DOMS Industries Limited Q3 FY26 Earnings Call Summary

Summary

DOMS Industries Limited - Q3 FY 2026 Earnings Call Summary Monday, February 02, 2026, 16:30 hours

Event Participants

Executives 1 Rahul Shah – Chief Financial Officer

Analysts 8 Ananya Nichani (Thinqwise Wealth Managers), Anik Mitra (Finnomics Solutions), Aniruddha Joshi (ICICI Securities), Aradhana Jain (B&K Securities), Jinesh Joshi (Prabhudas Lilladher), Kunal Vora (BNP Paribas), Mosam Shah (Wealth Guardian), Percy (IIFL Capital)

Financials & KPIs

*Calculated based on 9M % growth and Q3 figures.

Geographic & Segment Commentary

• Domestic Market: Represents over 85% of overall sales with 19.4% YoY growth. Momentum is driven by enhanced distribution and the onset of the back-to-school season.
• International Markets: Grew 15% over the 9-month period despite US tariff headwinds (50% on pencils). Growth was supported by DOMS-branded demand in Nepal, Sri Lanka, and the Middle East, plus new FILA-led exports to Chile, Mexico, and Europe.
• Baby Hygiene (Uniclan): Recorded seasonal high margins of 12% in Q3 due to peak winter demand for diapers. Management expects normalized annual margins of 8-9% as Q1 is typically a weaker quarter for this segment.
• Writing Instruments & Office Supplies: Significant growth led by pen capacity expansion. Management continues to focus on the ₹5 and ₹10 price points for ballpoint pens and recently launched mechanical pencils.

Company-Specific & Strategic Commentary

• 44-Acre Expansion Project: The company is constructing 9 buildings (150,000 sq. ft. each) in Umbergaon. While unseasonal monsoons caused a slight construction delay, the first building will commence commercial production in Q2 FY27, initially focusing on wooden pencils.
• Seven SpA Joint Venture: A 50-50 JV with FILA Group’s Seven SpA (Italy) to manufacture premium ergonomic backpacks. The JV will focus on OEM exports for FILA’s global needs and target a niche ultra-premium domestic segment; investment is capped at ₹15 crores initially.
• Product Innovation: Recently entered the metal pencil box manufacturing segment and expanded the “Wowper” baby hygiene brand into wipes and flat-style diapers via third-party OEMs.
• Supply Chain Integration: Acquired a 2.5-acre site in Jammu for ₹16 crores to enhance wooden slat processing and support the Fine Art category, further deepening backward integration.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Backpack Strategy

• Question: Why form a new JV with Seven SpA when you have SKIDO? (Jinesh Joshi)
• Answer: SKIDO focuses on the domestic mass market. The Seven JV is for ultra-premium backpacks (starting at €60-€70) and acting as a global manufacturing hub for FILA. Both operate through the DOMS network but target different price tiers (Rahul Shah).

Capacity Rollout

• Question: How will the new 9 buildings contribute to the top line? (Kunal Vora)
• Answer: Buildings are similar in size. Each takes 90 days to commercialize post-possession and 6 months to reach peak utilization. Growth will be volume-driven and relatively uniform rather than lumpy (Rahul Shah).

Financial Performance & Margins

• Question: What caused the spike in Uniclan margins to 12%? (Ananya Nichani)
• Answer: Q3 is the strongest quarter for diapers due to winter demand, leading to high fixed-cost absorption. Annualized margins will likely settle at 8-9% (Rahul Shah).

Raw Materials

• Question: How are you managing rising commodity prices? (Aniruddha Joshi)
• Answer: We are watching for 1.5 months to see if hikes are sustainable. If they stay high, we will adjust pricing or channel margins. We have a large, diversified purchase basket which provides some cushion (Rahul Shah).

Key Takeaway

DOMS Industries delivered a steady Q3 FY26 performance, with revenue growing 18.2% to ₹592.2 crores and EBITDA margins holding firm at 17.5%. The company demonstrated resilience in its scholastic stationery segment despite US tariff pressures, offsetting export losses via domestic mechanical pencil growth and increased color pencil output. Strategically, DOMS is aggressively expanding its manufacturing footprint through a phased 44-acre project and a new premium backpack JV with Seven SpA, aimed at global exports. With a consolidated 9-month growth rate of 22.7%, the company is positioned to hit the upper end of its 18-20% annual revenue guidance. While raw material volatility and slight construction delays at the new site remain watch points, the management’s focus on deep backward integration and premiumization through JVs supports a robust long-term growth outlook.