Q4FY26 volume jumped from 1.4% (Q3) to 10.8% YoY - first double-digit print in 4 quarters.

First is that — if we look to last quarter, we were obviously mentioning about the demand environment sort of being not the best or the most supportive. And this quarter, we've obviously seen volume growth see a sharp improvement to double digit? So if you could just give more clarity both from what changed from a demand perspective versus last quarter? And also from our side, what are the initiatives that we've taken? And if you could bifurcate the growth both from a category and channel perspective, given that we've mentioned that athleisure has been facing the impact of a high channel inventory?

Nihal, thank you for the question. Karthik this side. We've definitely seen some level of uptick in terms of consumer demand in quarter 4, which is reflecting in the performance. We've also seen some level of revival with athleisure as a category. That's because we've kind of reached the fag end of the correction in distributor inventory, which is something that's been plaguing us for the last, I think, 2 years now, maybe a little over that. Specifically, the month of March, we've seen decent upticks. Feb and January were good as well in relation to the first three quarters of the year, and that's what is reflecting in the performance that has been published. So it's a combination of two things. We are seeing — we've witnessed better tertiary performance at the consumer level in quarter 4. And two is, we've also seen a very close connect between secondary performance and primary performance because inventory levels have now come back to where it needs to be.

Second question was, obviously, you highlighted about the input costs rising and how to think of margins with all the initiatives? Does the range of 19% to 21% on EBITDA still stay or maybe there could be a slight slip till this inflation improves?

Well, initiatives-wise, I think we are going to be aggressive as far as demand generation is concerned. However, the macroeconomic conditions is something that we want to keep a very close watch on. The effect of the input costs, which the Managing Director mentioned in his commentary, is real, and that is something we are keeping a tab on. We're still confident that we will operate between 19% to 21%. This year, '25-'26, has been a year of very good performance in terms of margin. We closed the year with 22%. But our range, we believe, will be between 19% and 21%, and that's what we'll be targeting for the coming year as well.

So just again on the volume piece. So this 11% growth has been delivered on the base of 9%. So I wanted to understand incremental moving parts to the same. So obviously, one part you mentioned that there were positive consumer sentiment along with company level initiatives. But anything on the festive timing or anticipation of even price hikes playing a role on the volume growth?

I don't think so. From a festive point of view, the only large festival which impacts our business was Eid. But the quarter-to-quarter comparison, Eid was well within March in both the years. So in a way, there could have been between months or between weeks, some level of difference. But within the quarter, I don't think festive has played a very big role. Your second question was in terms of upstocking for price benefits. That's something we don't encourage. We have completely moved towards replenishment. And hence, all of this is purely demand driven. So as long as secondary performance happens, primary is an outcome. So there is no upstocking in the channel.

Just as a follow-up to this, the calibrated price hikes that you all have taken till now, what would be the quantum of the same? And when were they effective from?

Yes. So we took a price increase. I mean, we initiated it in the month of January, sometime mid-January as far as production is concerned. But I think the benefit of that has flown in only from mid of March. That's because of the FIFO model that we operate with. And that is to the tune of about 2% weighted average. But in terms of how much has flown into revenues, it will be quite minimal because, let's say, about 2 to 3 weeks at best within the quarter where we would have realized the revised prices.

I just wanted to check — double check on this volume growth momentum. And given the strength that you are witnessing, is this something that is — despite the macro environment, so are we seeing this sustain? Is that what is giving us confidence? Is that volume driven or is the price hike? I just wanted to kind of better appreciate the confidence in looking at continuing the 14% growth momentum?

Avi, thanks for the question. Like I mentioned, I don't think we've accrued any significant price increase benefits in quarter 4. To some extent, yes, because the weighted average price increase itself was 2%. And from a period point of view, like I mentioned earlier, about two weeks — at best three weeks of the quarter is where we would have gained from the new prices going into the market. So I don't see too much of a difference there. The delta between volume performance and value performance of about 4 percentage points is largely a reflection of mix and premiumization and very little to do with the price increase. Our intent in the year going forward is a volume growth intent.

And the second bit, I just wanted to clarify, see, you've retained the guidance of 19% to 21% and you've been kind of arguing or reiterating this guidance. But what exactly — we saw last year, you've been able to deliver a much higher margin trajectory. What is it that changes now which kind of gives you mix will kind of change this? Because I'm not able to appreciate fully why 22% levels that we saw, there's no one-off here, should kind of moderate.

Yes. I'll explain that. So the 19% to 21% margin range that we typically target is considering certain cost components such as marketing at 5%, maintaining certain gross margin levels, certain cost of salary and corporate stuff. So considering all those factors, we aim for a margin range of 19% to 21%. Last year, specifically, the fact that we got slightly higher margins was because our marketing expenses were lesser than 5%, we also could sustain the gross margin significantly. So going forward, if we have a normal level of marketing spend, which is at 5% and we do see some inflationary pressure coming into the product cost, there will be some pressure on the EBITDA margin for sure. It's not expected to be as elevated as 22% last year but still be within the range of 19% to 21%.

My first question is with regards to the overall competitive intensity. In a rising pricing scenario, that is the inflation scenario, do you think it kind of benefits to a market leader like you when the other people kind of struggles to get the raw material and other stuff. And that is also, in some extent, has helped you to drive a better margin versus the benefit, coupled with the, of course, the improving consumer sentiment?

Gaurav, I would agree with what you're saying. Usually, when there is adversity of any form, be it inflationary pressure, be it macroeconomic conditions, and we've seen it in the past multiple times, typically, a market leader, a large player with sound supply chain capabilities, sound investments, well-established, stable distribution network tends to gain. We've gained from such situations in the past. And hence, if any form of adversity should come by, I would imagine we would be competitively in a much better position than other players, and hence, we will stand to gain. Also, given the healthy margins that we today enjoy, it is a choice for us to absorb those inflationary pressures to the extent possible. And not really pass it on to consumer so that we can still hold and grow share and keep top lines intact and demand intact.

Just one bookkeeping question from my end for Deepanjan specifically. The inventory this time around is quite higher versus the earlier level. Is this a deliberate strategy keeping in mind the upcoming inflation and we are stocking some RMs because of this? And also on the subsidy that we expected to receive from the Odisha?

Okay. So on the inventory side, you're right, it has been a conscious call to build up inventory, both as a hedging technique against anticipated raw material price increase as well as to ensure our supply chain is adequately stocked. So from both the perspective, it has been a conscious call to build up the inventory. Also, typically, in the quarter 4, we do have a buildup of inventory to — because the Q1 is typically much heavier. So that way, yes, it's a conscious call. On the subsidy part, yes, we didn't plan to realize any subsidy in FY26. But yes, in FY27, we have plans to start realizing the subsidies. So over the year, I think we are expecting we should be getting around INR40 crores to INR50 crores of subsidy and that will happen.

Firstly, this is a second consecutive year where we started the year in a tepid manner, but end has been strong. Now if I go back, let's say, 3 years and look at the share of the subsequent quarters, 1Q used to be very high at around 28%, and 4Q used to be the lowest at 20%. And this has changed materially this year? So 1Q is at 25%, and 4Q is at 24%. By any chance, is it more a realignment given that we have gone into an auto replenishment system and now primaries are much more aligned with secondaries than what it used to be in the past, and therefore, if one has to gauge a more representative growth number, it is closer to the full year growth rather than 4Q growth?

Sameer, firstly, I think excellent observation, and you've answered the question as well. As we moved from a push model to a pull model, it's only natural that sales curve across the year normalizes. Of course, this normalization of sales curve also is a phased manner. So year after year, you will see the differential between quarters becoming probably lower. But that having said, I will not attribute all of the performance only to that. And hence, your second hypothesis of, hence, should we look at the annual performance as the performance going forward? I wouldn't probably allude to that because also quarter 4 has gained in terms of better consumer sentiment than what we experienced in the first few quarters.

And Deepanjan, just a follow-up here. Do you also anticipate wage inflation because employee cost is a big part of our P&L.? And there have been a lot of minimum wage hikes that have been announced by a lot of states. So is it fair to assume that there will be a decent or, let's say, higher-than-normal wage inflation this year?

Not immediately. For example, in this part of the state, Karnataka, wage increase has been — DA increase has been already announced, and we have not seen any abnormal increase there. But with the new wage code around, there can be changes, but we have to see on how it goes.

Just wanted — given the inflation backdrop, I just wanted to understand the thought process of working, which has gone behind 2% price hike. Just trying to understand why not 4%, 5%? What are the limiting factors or the thought process that goes behind this?

Thanks, Tejash, for the question. The price increase that I mentioned about was something that was activated in January, and that was much before the inflationary pressures because of macroeconomic conditions had to come by. And that was not a measure to mitigate inflation. It was essentially taken because we had upgrades and enhancements in many of our products and selectively across products, we had taken a price increase, which turned out to be a 2% weighted average for the brand, but we have not increased prices of all of our products. Very selectively, we have taken it. So far, we have not touched the prices for inflationary pressure, but I think we will be doing it soon. We've been able to cover a lot because of measures that we had anyway taken to — in terms of inventory prepositioning. But in quarter 1, we are expecting to again touch our prices given how the input costs are trending.

Second, Karthik, just a couple of months back, you were quoted in media, and I'm not sure if — there's not the video interview, but you have quoted somewhere that you said that the company has not maxed out the margin expansion potential. And that was when we had a trading margin of 22% plus. So I just wanted to know that today's guidance and that commentary, how should one reconcile that?

Yes. So I think if you look at it, today's guidance is largely given a year or 2's outlook, and that's why we're looking at a 19% to 21% because there are going to be investments in technology, which is unprecedented as far as Page is concerned in the previous years. So that's going to add to costs. And we are also looking at, like I mentioned, because of the inflationary pressure that we are experiencing today, it's a call whether we should actually pass on all of that to the consumer and keep our margins intact. So these two are going to play a role in terms of seeing how our margins go ahead. The comment I had made a couple of months back was largely to do with production efficiencies and that leading to better margins. I don't believe we've maxed out on production efficiencies as a manufacturing organization. We still have potential to improve our efficiencies there.

And can you highlight how is the rollout of JKY and Bonded collection? I think you did a second phase rollout with a larger MBO, everything. So how is the performance and how is the road map?

Yes. So JKY Groove, both the summer line as well as the winter line for last year, we've sold out, sold out quicker than we anticipated to sell it. And hence, for Groove 3, which will be — which has started hitting the market in the month of May, we are actually extending it to about 500 exclusive brand stores and select multi-brand stores and all of e-commerce. So the response has been great so far, and we are anticipating equal or better response as we go into the summer this year as well. In terms of the Bonded line, I think a lot of our numbers in terms of ASP increase and premiumization is thanks to the Bonded collection, both in men's innerwear wear as well as bras, very, very well accepted all through quarter 3 and quarter 4.

See, as a market leader, we are navigating a high base from previous years while simultaneously, we are seeing a surge of niche digital-first brands, which capture the Gen Z mind share. My question is, are these newer players actively eating into our market share? Or is our slower growth purely a reflection of a larger denominator and subsequently, how is our product pipeline evolving to protect our core?

Thank you, Lakshminarayanan. On the first question, I think very, very interesting topic of discussion. Yes, it's a lot more crowded a place than it used to be, let's say, 5, 7 years ago. And there are no large players, so to speak, probably Loony only there as a large player, but there are several small, good, effective D2C brands that have come in over the last 4, 5 years, which has in a way, helped us change our game as well. The way we organize ourselves today is we play a very different game in general trade, and we play a very different game in D2C or e-commerce. And across all the top platforms that you can think of, Jockey is number one, both in men's innerwear as well as women's innerwear.

With regards to the second one, how is the distribution dynamics now? Because there have been some friction in terms of the channel when the entire new inventory management system was rolled out. Just want to check whether that is behind and things have completely smoothened out.

It's been a while now, Mr. Lakshminarayanan, since we embarked on the journey of auto replenishment almost, what, I think, close to 3 years, 2.5 years in now. I think we've settled in very, very smoothly. And all of our distributors appreciate this because it's helped them bring down their inventory levels. So all the feedbacks that we have obtained, both qualitative and quantitative from the distributor community, has been very, very positive in favor of auto replenishment system that we put in place. In fact, with all of that in place now and we've kind of gone that journey, we are going to be undertaking the implementation of a new distribution management system, which is the next level of change management.

Just 2 questions. One to clarify, earlier you mentioned 2% price hike. Does that take care of the entire RM inflation so far? And if I understand it correctly, you also mentioned some price hikes could happen in 1Q, is largely also related to RM inflation is what I understand because the priority is not for growth, but it's more for covering cost.

Thanks, Rahul, for the question. So let me just repeat myself. The first price increase that we took in January was not to cover inflationary costs. It was to cover product enhancements that were done in specific products. So any kind of enhancement we did to the product portfolio, that was translated to an increase in MRP, which turned out to be a weighted average of 2%, but it was not a 2% increase across all our products. It was product-specifically where enhancements were made, only there we took a price increase. And hence, the price increase that we will be taking now in quarter 1, that will be to be — in order to cover inflationary costs.

And then another 2%, 3%, which happens every year because of premiumization. So we're talking about like 5% to 7% of higher pricing next year over and above the double-digit volume? Is that understanding correct?

No, sir. Premiumization is not because of price increase. Premiumization is because of change in mix within categories that we deliver. Let's say, when a higher-priced product sells in place of a lower-priced product within the same category or, let's say, across categories, let's say, if outerwear share goes up, our ASPs as a brand go up. That is what we denote as premiumization. Premiumization is not a result of a price increase. So the price increase that we'll be taking in quarter 1 is purely for covering input costs. Now to what extent we will pass on the input costs, to what extent would be that price increase is something we've still not got our head around.

Karthik, I just wanted to check on the volume elasticity, right? So we will be taking some price hikes in FY27, early in FY27. So can you throw some light as in will sort of volumes get affected by these price hikes? And then how are you sort of getting confidence on supply and volume?

So good question, Devanshu. So I think we are very conscious about this. And I think we read volume elasticity for the brand pretty well. Our intention would be to touch prices to the extent that it does not affect our volume performance. And hence, our volume aspirations for the given year will remain intact in spite of taking price increase to cover or partially cover input costs. If it comes to a stage where we will need to touch prices to the extent that it's going to affect volumes, we would rather refrain from doing that given the healthy margins that we operate with and absorb that in the margins temporarily.

And Karthik, this volume thing is also — this confidence, is this coming also from a reduced competitive intensity? If you could throw some color on the intensity across categories?

Yes. So our reading has been that there has been consolidation of number of players for sure. And hence — and this is relative, right? Competition intensity when compared to, let's say, 1 year ago or 1.5 years ago is definitely a lot lower now than how it used to be about 1.5 years behind. So yes, and this is both in the men's as well as in the women's categories, competition intensity is much better — rather lower than what it used to be in the past. And the way we are seeing it, there is possibility of further consolidation in the market, which only makes available more room and space for us to operate as a brand.

Can you also help us understand on the online space, whether this has — this had an impact? And what would be our share of online sales today versus last year?

So we've gained a couple of percentage points when compared to last year, and that is quite a lot in the base at which we operate. As we stand today, 15% of our top line is contributed by the e-commerce business. As this — the reduction in intensity helped us, definitely because the lesser money is going into brands in terms of activating consumer, the more stable brands or market-leading brands tend to gain. And that's where I think we've gained. And like I also mentioned, we've also shifted our focus towards performance-led marketing, which has also helped us gain significant traction in the online side of the business.