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Dynamic Eyewear India Limited

Dynamic Eyewear India Limited - Related Party Transactions

Introduction

Based on the Draft Red Herring Prospectus (DRHP) dated July 20, 2026, and subsequent filings, here are the “Related Party Transactions” (RPT) details of Dynamic Eyewear India Limited.

Business Model Operations

Business Model: DEIL operates an asset-light B2B model focused on designing, marketing, and distributing premium eyewear. It operates three verticals: (i) Distribution of international brands (e.g., UCB, Hackett, Ted Baker), (ii) Own brands (XITE, INSIST, WOW, WMƠ), and (iii) White label product development for third parties.


Raw Materials: The company consumes Cellulose Acetate, TR-90, Stainless Steel, Titanium, and various alloys.


Sourcing and Volatility: In FY 2026, 65.17% of purchases were imported (primarily from China), with 34.83% sourced domestically. Raw material prices are subject to volatility, affecting management estimates.


Customer Advances: The company received ₹23.15 lakhs in advances from customers as of FY 2026.


Comparable Peers: Listed peers include Lenskart Solutions Ltd and Yash Optics & Lens Ltd.


Total Addressable Market: The source describes a "structural shift" in the Indian eyewear industry toward organized retail and premium fashion-driven products.


Order Book: Customer orders are finalized based on specific collections and recorded in the ERP system, but a total backlog figure is not explicitly provided.


Revenue Mix: The revenue is 100% domestic for the reported periods, with no specific export revenue figures mentioned in the operations mix.

Financial Performance Health

Financial Trends (FY 2024–FY 2026):

  1. Sales: Increased from ₹3,437.60 lakhs (FY24) to ₹3,850.53 lakhs (FY26).
  2. EBITDA: Increased from ₹790.01 lakhs (FY24) to ₹1,318.42 lakhs (FY26).
  3. PAT: Increased from ₹339.44 lakhs (FY24) to ₹808.21 lakhs (FY26).
  4. Margins: EBITDA margins improved from 22.98% to 34.24%; PAT margins grew from 9.87% to 20.99%.


Reason for Increase: Growth was driven by a higher-margin product mix (Own Brands contribution), the addition of new international brands, and operational efficiencies under the asset-light model.


Return on Capital: ROCE was 68.78% (FY26), 132.23% (FY25), and 92.38% (FY24).


Asset Turnover: Reached 0.83x in FY26, recovering from 0.75x in FY25 (Calculated from).


Operating Cash Flows: Generated ₹552.40 lakhs in FY26 and ₹644.11 lakhs in FY25, improving from a negative ₹385.01 lakhs in FY24.


Debt & CapEx: Total debt raised (Short + Long term) stood at ₹2,269.60 lakhs in FY26. Capital expenditure was ₹14.79 lakhs (FY26), ₹8.83 lakhs (FY25), and ₹96.43 lakhs (FY24).


Free Cash Flow & Conversion:Trend Analysis: The EBITDA to Cash Flow from Operations conversion percentage is not consistently increasing. While there was a significant improvement from FY 2024 to FY 2025 (increasing from -48.73% to 55.62%), the conversion percentage decreased to 41.90% in FY 2026.


Risks Management Outlook

Key Risks:

  1. Geographic Concentration: 50% of FY26 revenue comes from only three states: West Bengal, Gujarat, and Maharashtra.
  2. Import Dependence: Heavy reliance on China for 65% of procurement exposes the company to cross-border trade risks.
  3. Seasonality: 70–75% of annual revenue is generated in the second half of the fiscal year (Oct–Mar).
  4. Unsecured Loans: ₹1,353.27 lakhs in unsecured loans are repayable on demand.


Red Flags: Historical instances of negative cash flows, reliance on a single domestic manufacturing partner (Five Star Optical), and the use of unsecured loans that can be recalled at any time.


Growth Plans: Funding of working capital for new product launches, establishing company-operated Multi Brand Outlets (MBOs) in high-footfall locations (malls/airports), and launching technology-enabled eyewear in Q2 FY2027.


Government Intervention: Programs like "Make in India" and the National Logistics Policy are expected to support domestic supply chains and manufacturing competitiveness.


Industry Trends: Management views current trends as a structural shift where consumers increasingly perceive eyewear as a fashion accessory rather than just a medical necessity.

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