Doms Industries

Doms Industries reported a robust Q3 FY25, with consolidated operating revenues growing by nearly 35% year-on-year to INR 501.1 crores. Excluding the impact of Uniclan Healthcare, comparable revenue growth stood at 21.4%. This growth was primarily fueled by strong performance in stationery and art materials, including writing instruments, paper stationery, and fine art products. The office supplies segment, in particular, saw a significant 133% growth, attributed to increased capacities for pens, markers, and highlighters.

Consolidated EBITDA for Q3 FY25 increased by 26.7% to INR 87.9 crores, up from INR 69.3 crores in Q3 FY24. However, EBITDA margins marginally declined by approximately 110 basis points to 17.5% from 18.7%. This decline was primarily due to the consolidation of Uniclan Healthcare and the accounting impact of ESOPs granted in Q3 FY25. Despite this, the consolidated PAT grew by nearly 40% to INR 54.3 crores, demonstrating strong bottom-line performance.

The company is actively investing in capacity expansion, with over INR 100 crores invested in capital expenditure during 9M FY25, including capital advances. Uniclan Healthcare also undertook capex of nearly INR 11.5 crores for an additional diaper production line. A 1 MW solar plant was successfully installed at the Umargam facility, aligning with eco-friendly practices. The ambitious 44-acre greenfield project, with an estimated total investment of INR 900-1000 crores, is progressing, with the first building expected to be ready by Q3 FY26, followed by commercial production within 90 days.

Uniclan Healthcare continued to yield positive results, with a new diaper production line installed in November-December, increasing capacity to 65 crore diapers, with an expected 80-85% utilization. The EBITDA margin for Uniclan in Q3 FY25 was approximately 10%, which is higher due to the seasonal strength of the diaper business. For the full year, Uniclan's EBITDA margin is projected to be in the 7-8% range, with a sales potential of INR 250-300 crores from current capacity.

The export business experienced a 5% decline in Q3 FY25 compared to the previous year, primarily due to ongoing geopolitical tensions in the Middle East and a slowdown in Europe, impacting own-branded sales. However, management is cautiously optimistic about market recovery and plans to enter distribution agreements with FILA Group companies to export DOMS branded stationery to their local markets, starting with Latin America. Exports to FILA for Q3 FY25 were INR 37 crores, and own-branded exports were INR 27 crores.

Doms Industries expanded its direct retail outlet coverage to 140,000, an increase of over 15,000 outlets from the previous year. The company is also focusing on new product initiatives, including the launch of DOMS TOTS (finger paint, beeswax crayons) and the upcoming launch of DOMS branded bags from SKIDO Industries (51% stake) in the current quarter, timed for the back-to-school season. The C3 brand, catering to the economical range, contributed over INR 10 crores in Q3 FY25.

The company reiterated its FY25 consolidated revenue growth target of 23-25% and an EBITDA margin band of 16-17%. Consolidated ROE/ROCE is expected to be in the 23-25% range. Planned capex for FY25 is INR 160-175 crores, increasing to INR 200-225 crores for FY26, primarily for greenfield expansion and modernization. The long-term target for asset turnover at the new 44-acre facility, once fully operational, is 3x.