Pearl Global Industries Limited (PGIL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Pearl Global Industries Limited Q1 FY '27 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Shishir Gahoi, Head of Investor Relations of Pearl Global Industries Limited. Thank you, and over to you, sir.

Thank you very much. Good afternoon, everyone, and I am delighted to welcome you all to our earnings call for Q1 FY. I hope you all had an opportunity to review our press release and the investor presentation, which are available under the Investors section of our website and the same are also uploaded on BSE and NSE website. To discuss our results, we have with us our Managing Director, Mr. Pallab Banerjee; and our Group CFO, Mr. Sanjay Gandhi. They will take you through our results and business performance, after which we will proceed for question-and-answer session. Before we start, I just want to highlight that this call may include forward-looking statements based on the company's current views and expectations. Actual results could be different as future performance is uncertain and involve risks that are hard to predict. I will now hand over the call to our MD, Mr. Pallab Banerjee. Over to you, Pallab ji.

Thank you, Shishir. Good afternoon, everyone. I welcome you all to our Q1 FY '27 earnings call. We continue to deliver a strong top line and bottom line by our focused execution and multi-location presence. During this quarter, we achieved a revenue of INR 1,528 crores, and our EBITDA stood at INR 164 crores, which is a 10.7% and a PAT of INR 99 crores. We shipped 20.8 million pieces this quarter. Some important updates on the key developments that's affecting our industry. U.S.A., our biggest market, is -- has now an MFN plus Section 301 tariff on our apparels. As you know, after Supreme Court judged, IEEPA tariff has not legaled in February, U.S. had implemented a 10% additional tariff under Section 122. And this got over on July 24 this year. Now we have an additional 10% and 10% for India, Bangladesh, Indonesia and 12.5% on top of the MFN tariff for Vietnam. Now, following the Supreme Court's decision on February 20, which striked down the IEEPA tariffs, approximately INR 166 billion was collected as duties, which became refundable to about 3,300 -- 330,000 importers across 53 million entities -- entries. U.S. Customs and Border Protection is processing these refunds through the CAPE system, which went live on April 20 this year. U.S. government is in progress -- in process of providing a refund to these importers. Now very few or very small-sized customers that we have passed on these benefits back to their suppliers. In general, we haven't seen any of these refunds coming to us from our customers. Energy volatility continues as Iran and -- Iran war and Strait of Hormuz remains sensitive. Last quarter, we saw almost all Asian countries face the pressure, affecting the raw material prices and the time lines. We had to maneuver through these challenges. And I would say that we're still going through it. And on addition, like even before the peak shipping season, we have seen a shortage of containers and the shipping lines capacity shortages, resulting in delays and high spot prices of freights. On other hand, the Bab-el-Mandeb is back in news. As it affects one of the choke points of critical shipping lens, this will also continue to put an additional pressure both in terms of cost and time line of transit. Mostly the customers, our customers are paying these freights and we have FOB terms, but it does put a pressure to our industry. On the brighter side, what we find is that despite all these war and inflation, the U.S. consumer behavior remained healthy. We observed similar trends in other major Western markets as well, like European Union and U.K. If I talk of now, the retailers and the brands in U.S. are feeling better because they are getting back the -- one side, they have the confidence of the customers they are buying. And also, they have the refunds that is coming to them, which will make their position much more healthier and they can pass on more aggressively, let's say, pricing or their selling strategies. This should have positive impacts on the order books, what we feel. Talking of another different market like Japan, what we are seeing, it continues to raise security concern on the China, Russia, North Korea, this -- whatever is happening there geopolitically. Clothing import from China to Japan, which used to be around 65% plus, has now fallen down to 50%. So it's a 15% drop that has happened. And this is the first time in 31 years. Vietnam is now almost 17.4% of the market of Japan -- imports into Japan. And Bangladesh also has gained -- it has come to 4.3%. So this is something is a positive news, again, because Japan is one of the bigger market after U.S. and European Union. Talking about the country of our manufacturing, if you talk of India, the implementation of India-U.K. Free Trade Agreement, which went effective 15th of July 2026, is a significant positive development for Indian exports. Now the focus will be on the implementation of European Union FTA by the beginning of 2027. Such FTAs are normally a major boost to the raw material investments in India as well. Now what we are seeing is coupled by the other various schemes from Indian government, like the PLI schemes, the PM MITRA parks and the competitiveness amongst the states to draw investment. But we feel that the textile and apparel continues to be a focus area in India. Pearl Global already serves several of these markets in European Union and U.K. and have many customers because we are servicing them through other geographies, and we believe that this FTA will further strengthen these relationships as we create more additional sourcing advantage for them. We are proactively positioning ourselves to capitalize on these opportunities by enhancing our factory readiness in India, strengthening the compliance standards to meet some of the different standards of European Union and U.K., expanding the capabilities and also working closely with our customers on their future sourcing plans. In terms of challenges, in India, we did face the challenge of worker availability during the Q1 majorly because of being a harvest season, school holiday. And this time also we had the West Bengal election. We saw a lot of labors going missing or absent. Haryana and Noida both raised the minimum wage significantly, 38% and 21%, respectively, which caused another ripple into our cost structure. At Pearl, we are having a healthy order book and have better utilization of capacity in India as compared to last year when we had the backdrop of the tariff pressure, which has started around this time. Moving on to Bangladesh. Here, our business continues to grow. Again, we witnessed a healthy traction both from the existing as well as the recently added customers. Our ongoing capacity expansion projects in Bangladesh, along with the sustainable laundry operations that we are starting in September, and we should be becoming operational and execute orders in the second half of this year. These projects are expected to give us almost about 6 million to 7 million pieces of additional capacity in Bangladesh, and that will take our total group installed capacity to almost 108 million pieces. And this eco-friendly washing unit that we are adding, that also will help us in terms of value addition that we are doing to our garments. In Indonesia, the business momentum remains healthy with encouraging demand trends and strong growth from the relatively lower base, which is supported by our continued customer traction and the focus on the premium clients remains in this country. We remain confident of delivering both top line and bottom line from this geography. In Vietnam, it continues to be one of the world's largest apparel exporting countries after China and is playing a strategic role in serving the high-value and fashion-oriented segments for us. The country benefits from favorable trade agreements, including the European Union-Vietnam FTA. And we have benefited the most from ongoing sourcing diversification that has been happening under China Plus One strategy, as Vietnam also got the maximum benefit. It remains an important manufacturing hub for U.S. Encouraged by the strong customer traction, we continue to evaluate opportunities for additional capacity expansion in Vietnam. In Guatemala, we have reworked our operating strategy and seeing encouraging progress. We remain confident of achieving a breakeven during this financial year of 2027. Overall, we believe our diversified manufacturing footprint, diversified market and the client base, ongoing capacity additions and our ever strengthening customer relationships, will help us in these geopolitical challenges as we maneuver through these geopolitical challenges to trade the environment -- that the trade environment is facing. I feel that Pearl Global is positioned for sustainable growth over the medium-term. With that, I would hand over to Sanjay Gandhi, our Group CFO, to share the financial highlights. Sanjay, over to you.

Thank you, Pallab. Welcome all to our quarter 1 FY '27 earnings call. I will now take you through our financial and operational performance. Quarter 1 FY '27 consolidated performance. Quarter 1 FY '27 is a great start of the year for us. We registered our highest ever consolidated revenue, EBITDA and profit after tax for the quarter. Consolidated revenue grew to INR 1,528 crores, up 24.5% year-on-year. This strong growth was driven by a strong volume growth across our manufacturing locations. Adjusted EBITDA, excluding ESOP expenses, stood at INR 164 crores, up by 44.1% compared to quarter 1 FY '26. This is driven by improvement in product mix and the operating leverage which we witnessed in a couple of our geographies locations -- manufacturing locations. Adjusted EBITDA margin stood at 10.7%, up by 140 bps year-on-year. It is pertinent to note that given the current customer mix, product mix and geographical contribution to revenue and margin in quarter 1 of FY '27, we are confident of sustaining this margin in Q1 series of subsequent year as well. PAT in quarter 1 FY '27 stands at INR 99 crores, a strong growth of 51.4% on year-on-year basis. Now talking about stand-alone financial performance. Total revenue stood at INR 340 crores, grew by 27.4% year-on-year. Adjusted EBITDA, excluding ESOP expenses, stand at INR 22 crores. EBITDA margin at 6.6% versus 7.3% in Q1 FY '26. The drop in EBITDA margin is despite -- drop in EBITDA margin despite revenue growth is because of higher wage costs in all factories in Haryana post wage revision by state government. Other highlights. During the quarter, we received a total dividend of INR 5 crores from Pearl Global Hong Kong, Hong Kong subsidiary company of PGIL. This is in line with the fungibility of cash across group entities. The company shipped 20.8 million pieces in quarter 1 FY '27, highest ever in Q1 series, up from 17.2 million pieces in quarter 1 FY '26. The Board of Directors have approved, subject to shareholder approval, the issue of one fully paid up bonus equity share for every one fully paid up equity share. CapEx update. We continue to build capacity and capability across our group. We have already updated on Bangladesh CapEx. Construction -- in India, construction for the second shed -- manufacturing shed in Bihar has already commenced. We are expecting completion in the next couple of months. The land acquisition in Vietnam is also completed in line with what we have communicated earlier. Further, we are in the process of outlining CapEx commitment of approximately INR 200 crores, INR 250 crores for FY '27 across geographies. We'll update you on the detailed CapEx plan in coming months. In summary, we have delivered another strong revenue growth and encouraging improvement in profitability. Quarter 1 FY '27 performance testament to the strength of our global, diversified business model, strong customer relationships and enhanced capacity and capability, which has enabled us to carry the momentum built over the past several years. We remain confident of sustaining the double-digit EBITDA margin on a full year basis as well. With this, I now hand over to the moderator to open the floor for questions-and-answers.

[Operator Instructions] The first questions comes from the line of Kishore Kumar from Unifi Capital.

Congrats to the entire team for the great set of numbers. So sir my first question is related to the U.K...

Sorry to interrupt, Kishore sir. As there is a lot of disturbance, can you please use the handset?

Yes. So my first question is related to the EU -- U.K. and EU FTA. So last call also you mentioned about rising customer interest and customers visiting our facility in India. With U.K. we are already enforced and EU possibly by next year, can you share an update on how it's progressing? And if you can quantify the incremental order that you are adding, or incremental volume that we can actually get from our existing customers as well as new customers based of these geographies? And are we going to carve out some portion of our existing facility in India to new customers or the incremental ones will be enough for now?

Thank you, Kishore Kumar. See, what I said earlier also, like we have been seeing when these treaties got -- getting finalized and was coming for fruition for implementation, we saw that interest generating in most of these customers. And they have been talking to us much more intently in terms of more capacity, not only in India, but for other places as well, because see, it gives them that kind of security that if something happens to Bangladesh or Vietnam and all, that diversification is there with Pearl Global that immediately the business can shift to the other location. And also the kind of product, which is a unique handwriting for India, let's say, those kind of products also are available, which earlier the price was becoming a challenge because if they place it in India, then they have to pay higher tariffs. So both these things that we have been seeing is a positive traction. In terms of U.K. business, yes, you will -- by end of this year, you can -- you will see a significant jump in the U.K. business that we do as a group. Now, whether this tariff will -- this Free Trade Agreement will result into only India growth -- because when the customer talks to us much more intently and much more strategically, it encompasses all the locations. So that's one of the huge benefit that we are getting from this FTAs. Yes, we are getting a traction in India also and in other places as well. And I think second part of the question was? Sorry, I missed out. Did I miss out?

No, the second part, are we going to...

The capacity?

Yes.

So no. No separate factories for European markets. So basically, what we do is that our factories, existing factories, we have wherever like certain requirements were there from some of these customers, which was in addition to what we already had there. So those fulfillments we have done. So we are ready to execute the business from these places as well. So that way the readiness is coming across all our factories.

Got it, sir. Got it. Sir, my second question is related to the revenues. So similar to the EBITDA margin jump, we did see the revenue growth also much higher than our guidance. And is there any one-off delivery that took place in Q1, which led to this growth? And given both move in our favor, is there any revision to our full year guidance for the revenue? You did mention about the EBITDA sustenance, but on the revenue sir?

See, last year, there was a challenge as U.S. market faced the tariff challenges. So there were a lot of conversation and most of the retailers are also going defensive, because the prices were going up, how the customer would react, what would happen to the economy. So there were a lot of question marks. So as that overhang went out, we saw a good traction from the customers. The confidence of the customers and the consumers is definitely resulted into a better order book. So it is not a one-off thing that has happened. Yes, if there is a change in the consumer sentiment or the market sentiments in the Western market, that might fluctuate. But otherwise, I think that -- the pressure that was there because of tariff, that I think got released quite a lot. And as I said, like the other geopolitical development that is going on, whether it is Japan, whether it is the European Union, like most of these countries what we've earlier faced that the war -- when the first Middle East war that was happening in Palestine or before that in Ukraine, were basically creating some kind of negative consumer sentiment. That, fortunately, what we saw in the last 6, 7 months, or even after this war started in Iran in March, we didn't see that. So that, I think, is a big differentiator this time that we see.

Got it, sir. Understood. Sir, there is a proposal under Section 301 to provide tariff quota for textile and apparels, so I think specific countries, which includes Bangladesh and Indonesia for us. So is that a real benefit to prospect given we have to import U.S. cotton and there will be cost related to freight, insurance, all those things?

No, no. See, the U.S. cotton part is that if you import -- if any country import U.S. cotton and then make the garment from there, then they get that kind of subsidy, that kind of tariff benefit. So that's how the U.S. really -- That's for every country. There's nothing specific for Bangladesh or some other country. And even, our minister also has clarified that. So that -- that is like use of U.S. cotton specifically just to promote U.S. exports. Otherwise, I think every country has got under 301 a 10% tariff, additional tariff over MFN. Vietnam and China, those kind of countries have got 12.5%. And it is definitely stacked on the existing penalty tariff that China already has for U.S. So yes, less, a little, but yes, there's some different -- some advantage definitely there for India.

Okay. Got it, sir. Got it. Sir, other expense of...

Sorry to interrupt...

Percentage...

Sorry to interrupt sir. May I request you to please rejoin the queue for follow up questions. The next question comes from the line of Bhavya Gandhi from Bajaj Alternate Investment Management Limited.

Yes. A couple of questions from my end. And first of all, congratulations on a very good set of numbers. First question is regarding the average realization per unit. Historically, we've been doing around INR 600 to INR 650, but this quarter, we've done closer to INR 735. So can we assume that INR 700 to INR 750 would be the normalized range average realization per unit? That is number one. And second is regarding the earlier guidance that you had given, we have already achieved on the current run rate. INR 1,500 crores is the first quarter revenue, and we had alluded earlier regarding INR 6,000-plus crores of top line for FY '28, but we've achieved in the first FY '27 itself, which is the current run rate. So would you like to revise revenue guidance going forward?

Thank you. See, the average realization part, at this particular season, a lot of outerwear definitely gets -- sits out. So I don't think we should be focused on the average realization so specifically. But yes, it will definitely -- our endeavor is to grow it from INR 600 to higher. Like as we get better customer, like more upmarket customer, then this will go up. If I get a more volume customer, then it will go down. But yes, like for this particular quarter, definitely, there's a lot of value-added outerwear shipments goes. The -- In terms of the top line guidance, yes, like our goal was to cross INR 6,000 crores by 2028. And as we said, like we have been -- like, our capacities and all have been made, so we can definitely achieve that. But it depends on how the macro factors are, the macroeconomic situation is. So if it remains favorable, like what we saw in the first quarter, if the rest of the year remains like that, then definitely, we should be very close to our target with the kind of numbers that we are trending. But that's something like it's more of a statement -- a future statement, I would say. Yes, we are ready. We are, in fact -- capability-wise, capacity-wise, we are ready. Let's see how it goes. Sanjay, if you want to add anything further to this?

Yes, sure. So Bhavya, on the realization part, if you compare quarter 1 last year also, our average realization was around INR 715. And this year it is INR 735. So typically, as Pallab has mentioned about the product mix, in this particular quarter, our realization is always on the higher side. Last year, we closed an average realization of INR 643 crores -- INR 643 per piece. And so if we're comparing an average of full year with the quarter 1, that maybe not the right comparison. I think if you look at quarter 1 of last year to this year, we have improvement of INR 20 which is there. And -- yes, and then it depends on the product mix, how it continues for the rest of the year to really determine our average realization price.

Got it. Sir, just one follow-up, if I can squeeze in. Yes.

And on the revenue side, we have been mentioning that our endeavor is to accelerate the milestone revenue, which is specified for FY '28, and we keep working towards that.

Right. Sir, assuming that the 7 million pieces will come on stream, so you'll have closer to 108 million capacity, right? Our initial guidance for FY '28 capacity was closer to 130 million to 140 million. So can we expect further CapEx also after 108 million pieces?

See, we had said by 2028, we should be having capacity of around 125 million to 130 million. That's because we want to grow. Definitely, INR 6,000 crores is a point of time, INR 6,000 crores that will be -- we expected that we should cross by '28 or before, as of now it looks like. Now that doesn't mean that that's my end goal. Like end goal would definitely be higher. Yes, you asked the question of are we coming with next -- what is our next 3-year vision or something, like we will definitely come out and communicate with all of you on that. But yes, we want to grow. Like as we said, like our main competition have been with these big giants from South Korea and Taiwan and all who are in multibillion dollars. So our first goal was INR 6,000 crores. Definitely after that, we would be -- we have to touch that $1 billion mark and then move on from there. So the capacity will continue to grow. By 2028, we had forecasted that we should be having around 125 million to 130 million pieces capacity. Yes, by this year, you will see that 108 million number will be crossed in September, October itself. And then we'll continue to grow.

[Operator Instructions] The next question comes from the line of Bharat Gulati from Dalal & Broacha.

Congrats on a great set of numbers. Just regarding our stand-alone margins, we've seen a dip of about 70 basis points Y-o-Y, even though we've clocked all-time high gross margin. So I'm just trying to understand that do we expect to enter that 8.5% to 9% sort of EBITDA margin range in our stand-alone business? Or will we continue to hover in that 7.5% to 8% range, because that's the only real drag on our consolidated margins? And just to add to that, have we peaked out on EBITDA margins in the remaining geographies? Or do we still expect some operating leverage to further push up margins from that side?

Sanjay, you take this.

Sure, Pallab. Yes. So first, on the stand-alone EBITDA margin decline of -- which you mentioned, you see we -- I mentioned in the commentary as well, there has been a revision in wages in Haryana -- state of Haryana, where we have four factories operating here. And that incremental wage impact has hit the P&L in this quarter and which have really impacted the EBITDA margin for this particular quarter. Despite the increase in the margin, this is why I mentioned we have a decline. If the -- if I just have to -- for the sake of exercise and I have to add that number, we should be looking at a 9% plus kind of an EBITDA. Having said that, of course, the -- going forward in the subsequent quarter, we have to keep working on the efficiency and the cost optimization measures to stay competitive and also while working on the EBITDA improvement. So yes, the target is to really have high-single-digit and double-digit EBITDA in Indian operations as well. And that's where we should be looking at as we move in the subsequent quarter. But that's a journey which is there. On your second question about the overseas location, overseas locations have both potential of leverage because the new capacities are also getting added in -- especially in Bangladesh. And also Vietnam, we mentioned that we have done a land acquisition. So the complete project implementation plan will be shared in the coming months. And -- so there is a potential for improvement there as well. Indonesia also has a scope of operating leverage. So these are the opportunity in overseas locations. As we have guided earlier, our first aim is to really target between 10% to 12% by FY '28, and we are heading very much in that direction. And of course, as and when there is more opportunity coming up for improvement, will be in line with our CapEx plan, we'll keep intimating to you.

Got it. And just on realizations from the previous participants. Have we seen a realization improvement in our India geography as well? Or is this more of utilizations improving in Indonesia and Vietnam which has caused the realization to spike? Just understanding that has overall group realizations improved on a broader base? Or is this just more of a seasonality we've seen of INR 735 kick in? Yes.

It's more of seasonality because a lot of this heavy outerwear, heavyweight outerwear and winter goods goes at this point of time. So that has got a higher FOB. That's what we're experiencing. Majority of the outerwear goes from Vietnam and Indonesia, some from India and Bangladesh as well. But that's how the nature of this business in this quarter is.

Got it. Got it. And just lastly, on our consolidated EBITDA, would we be able to quantify how much is the tariff impact? Or is this 10.7% without any tariff impact? I mean I'm just trying to get a like-to-like comparison because last year same quarter, our EBITDA margins on an adjusted ex of tariff impact basis were at 10.7%. So just trying to understand, have we improved from that 10.7% or has it sort of been flattish? Yes.

So this quarter, there is no tariff impact. This entire EBITDA is operational improvement and the -- was driven by the volume growth and the operational efficiency, which we have earlier mentioned in our commentary and answer to the questions. So we are pretty confident that the consumer -- with the customer mix, product mix and the geographical contribution given in the quarter 1, in the Q1 series for the subsequent quarter as well, we should be able to maintain that and continue working towards improving it to our objective of reaching to the 12% kind of EBITDA margin.

The next question comes from the line of Sani Vishe from PL Capital.

The first part was obviously on the realization, I think it is already touched upon. But I just wanted to confirm, so we have been conservative in terms of the revenue guidance, and we have also been conservative in terms of forecasting the realization growth. So anything changes on that? Because we have been considering stable realizations for FY '27. So do you mean that it is still in line with what you were expecting earlier?

In terms of top line, we have been always saying that our CAGR would be in the range of 12% to 14%. But if you look at better years, we have done more than that. So this year, if it continues to be more than that, definitely -- I think as of now, it looks like it should be better than that number. To really give a forecast, I think we will create another platform in which we will talk about -- we are analyzing and we are making preparation for what should be our numbers and goals, we'll share that with you. But yes, as of now, the traction that we are getting is -- seems to be much better than 12% to 14%. In terms of bottom line, I think Sanjay had repeatedly said that we are more confident because as these numbers goes up, get the leverage. Sanjay, you can add further to this?

Sure. So yes, I mean, as we mentioned that our -- we are pretty confident of accelerating our stated target of FY '28 INR 6,000 crores, and we should be able to achieve it earlier than that. And quarter 1 demonstrate very clearly in that line. We remain confident for the rest of the year as well. And as far as the bottom line is concerned, I think that will continue to improve and double-digit margin is here in the business inherently as well. We stated in our last earnings call as well, business has reached a stage where inherently it can generate an EBITDA margin between 10% to 12%. Now we mentioned 4 or 5 levers for it to reach 12%. Now the convergence of all these lever will be, of course, at a different point in time. But definitely, with all these levers kicking in, I think we -- our business should generate EBITDA of between 11% to 12%.

And on the realization front, we -- this realization that has happened is in line with what we were expecting at end of Q4. Is that correct?

Yes, yes. Realization is -- as I mentioned that if you look at quarter 1 of last year in FY '26, our realization average has been INR 715, vis-a-vis we are at INR 735. So there is a 3% -- 2.5%, 3% improvement. We -- it is a function of product mix realization per piece. And we always like to have better product and mix in -- while we do the actual execution, but it's also a function of the demand and everything. So while we discuss the number with you, we have taken a little bit conservative view because our focus is to bring the volume growth more in our model compared to the realization, which is a function of multiple things because some of the factors under our control, some are not in our control. But yes, we also look forward to improvement in realization as we go in the rest of the year.

Yes. Because last year, Q2, Q3, Q4 were also impacted because of the price cut that we have taken due to U.S. tariffs. So is it fair to assume that the realization growth ideally should be much better in Q2, Q3, Q4 compared to Q1?

So last year, like from India, we had some discounts that was going on, double-digit discount was going on to compensate that 50%. Yes, that difference definitely should come through. And for the other markets, it was hardly about 2% or 3%. So yes, like from the tariff point of what you're saying, the tariff discount that we have been giving. So hopefully, like that should fade away now or be much lesser. I don't like customers are not talking of compensating this 10% tariff or [indiscernible] discount at this point of time. So I think that should help. But in general, you see we are a growing organization. So like if we get a customer which is a mass, volume customer, so then definitely, the realization prices will be lesser, whereas more business comes from the premium segment of the customer base, then the realization would be higher. So as of now, I think we are more focused on the top line and the bottom line compared to purely on the realization per piece.

Yes. In general, like we would love to track and we'll love to grow that.

Yes. Fair enough. And finally, would you be able to give some idea...

Sorry to interrupt, sir. May I request you to please rejoin the queue.

This is only a second question and it's a short one. So would you be able to give some idea on how the volumes have faired geography-wise, if not number, at least some utilization numbers?

So Bangladesh continues to be the biggest, followed by Vietnam, India, Indonesia and then Guatemala. So Bangladesh is tracking close to about, I would say, 45% plus of the group. And then Vietnam and India are very similar in the range of about, maybe about 27%, 22%, 20% to 27% both of this and then followed by the other locations. I hope that helps.

[Operator Instructions] The next question comes from the line of Shradha Agrawal from Asian Market Securities.

Congratulations to the management team on a very strong quarter. Two questions. First is what is our capacity in Bihar [indiscernible] that we are looking at? And by when do we expect the [indiscernible]? And on the current capacity in India, what is the utilization that we opted, that we want to?

Bihar, we have two sheds that we are starting with, out of which shed was functional with 450 machines at the full capacity. And the second shed will be also similar, 450. What we intend to divide is one of them would be more of the woven garments and the other one would be net garments. So that's -- the woven part is already operational at this moment in time, and it is -- it should be ready by -- in October, November, we should see -- start seeing production there. And...

And In terms of million pieces -- sorry. Pallab. In terms of million pieces of garments, what is the capacity we are looking at, including [indiscernible]?

So at its full capacity, we should be able to ship about 4 lakh to 5 lakh pieces every month. But that is like once it fully ramped up. At this point of time, we're doing about close to 120,000, 130,000 pieces a month. And it should be -- over the period of next couple of quarters, it should move towards that full capacity.

And in India overall, what is the utilization that we operated at in 1Q?

That number we have not specifically reviewed at this point of time. We can come back to you. [indiscernible].