DOMS

: Strong Q1 Growth Driven by Diversification and Expansion

reported a strong Q1, with robust domestic growth fueled by higher volumes and product innovation. The company's revenue grew 26.4% year-on-year (YoY) to ₹562.3 crore, while its Profit After Tax (PAT) increased by 8.8% to ₹59.1 crore, despite rising expansion-related costs. → Segment Performance: The core scholastic categories, including stationery and art materials, showed modest growth, while kits & combos surged by 42.2% YoY, benefiting from the back-to-school season. Office supplies delivered a standout performance with 76.9% YoY growth, driven by strong demand for pens, markers, and highlighters. The company is now tapping into the mid-market by introducing new products at the ₹10 price point. The Uniclan Healthcare (baby hygiene) segment grew by 40% YoY, supported by the commissioning of new wet wipes capacity. → Strategic Initiatives and Acquisitions: DOMS has completed the acquisition of Super Treads Pvt Ltd (STPL), which adds 3,600 MTPA of paper capacity and strengthens its presence in East India. This acquisition, along with its existing paper business, now contributes 11% to total revenue. Exports contributed 14.4% to Q1 revenues, with products now available in over 55 countries. The partnership with FILA continues to scale, expanding the reach of both brands. → Capacity and Margin Outlook: The company’s major 44-acre Umbergaon project in Gujarat remains on track, with commercial production expected to start by Q4 FY26. This facility will significantly boost capacity and is projected to double the workforce. Management expects upfront costs for new hires and distribution to weigh on near-term margins. However, backward integration and efficiencies from new facilities are expected to provide a cushion. The company maintains its FY26 margin guidance of 16.5-17.5%, and operational leverage from the Umbergaon plant is anticipated to kick in from FY27.