Apollo Pipes Ltd — Q4 FY26

Apollo Pipes Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=KtEctBg8b6A Published: 5 days ago

0:01 1 second Ladies and gentlemen, good day and welcome to Apollo Pipes Limited's Q4 FY26 earnings conference call hosted by 0:10 10 seconds MK Global Financial Services Limited. As a reminder, all participant lines will be in the listenonly mode and there will be an opportunity for you to ask 0:18 18 seconds questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then 0:26 26 seconds zero on a touchstone port. Please note that this conference is being recorded. I now hand the conference over to Mr. 0:33 33 seconds Biplab De Burma MK Global Financial Services Limited. Thank you and over to you sir. 0:41 41 seconds Thank you. Uh good morning everyone. I would like to welcome the management and thank them for this opportunity. 0:49 49 seconds We have with us today Mr. Samir Gupta, chairman and managing director. Mr. Mr. 0:56 56 seconds Arun Nagarwal joint managing director Mr. Ajay Kumar Jan Chief Financial 1:03 1 minute, 3 seconds Officer and Mr. Anubh Gupta Group Chief Strategy Officer I shall now hand over the call to the 1:12 1 minute, 12 seconds management for the opening remarks. Over to you gentlemen. 1:22 1 minute, 22 seconds Good morning everyone. This is Samir Gupta, CMP of Apollo Pipes. I have joined today with Mr. Arunagawal JMP, 1:28 1 minute, 28 seconds Mr. AKN CFO and Mr. Anub Gupta Group CSO. I would like to extend a warm welcome to all of you to our Q4 FI26 1:38 1 minute, 38 seconds earnings call. The FI26 was the year full of roller coaster rides. The PVC prices dropped by 15% in the first 8 1:46 1 minute, 46 seconds months. Then rallied 75% in next four months and then again fell by 25% in 2 months to settle down at the current 1:55 1 minute, 55 seconds price of rupees 84 rupees per kg. I believe my team maneuvered this tide well wherein we crossed one lakh ton of 2:04 2 minutes, 4 seconds annual sales volume. Apollo pipe standalone sales volume increased by 7% and Kissan was flat on Y basis. Needless 2:13 2 minutes, 13 seconds to say that the demand remained impacted due to slowdown in both the private real estate sector and government 2:21 2 minutes, 21 seconds infrastructure spendings throughout the year. Our console AITA declined 30% for the full year due to inventory write 2:28 2 minutes, 28 seconds downs, aggressive pricing and fixed expenses for our new business verticles. 2:34 2 minutes, 34 seconds As we move forward, we have drawn a five-year growth plan to achieve 35% revenue GERE and hit Rs 5,000 crores 2:42 2 minutes, 42 seconds revenue by FY31. We are ready with three plants which can give revenue of,000 crores each. We will set up a new plant 2:51 2 minutes, 51 seconds of,000 cr capacity in South India and then 1,000 cr from allied products such as windows and bath wings. And to support this reason, our group's 2:59 2 minutes, 59 seconds chairman Mr. Sanjay Gupta had joined board. I'm sure that under his guidance and supervision we will be able to achieve these targets. That concludes 3:08 3 minutes, 8 seconds our opening remarks. Now we are glad to take questions. Thank you. 3:14 3 minutes, 14 seconds Thank you very much sir. We will now begin the question and answer session. 3:19 3 minutes, 19 seconds Anyone who wishes to ask a question may press star and one on the touchstone telephone. 3:25 3 minutes, 25 seconds If you wish to withdraw yourself from the question queue, you may press star and two. 3:30 3 minutes, 30 seconds Participants are requested to use handset while asking a question. 3:35 3 minutes, 35 seconds Ladies and gentlemen will wait for a moment while the question queue assembles. 3:46 3 minutes, 46 seconds Participants to ask question you may press star and one. 3:53 3 minutes, 53 seconds First question is from the line of Aryan Agarwal from money stories asset management. Please go ahead. 4:01 4 minutes, 1 second uh congratulations on a good set of numbers this quarter. What I want to understand is how the demand scenario is 4:08 4 minutes, 8 seconds shaping up overall now. This quarter look more encouraging than the previous few years and also what sort of impact 4:16 4 minutes, 16 seconds can we expect of the by the rise of this crude prices due to the conflict on PBC 4:22 4 minutes, 22 seconds prices and uh our overall uh I would say demand and supply scenario. 4:34 4 minutes, 34 seconds Hi Armen, morning. Um, so if you look at the demand scenario or the current 4:41 4 minutes, 41 seconds trends, we feel they are pretty encouraging. Okay. Um so whatever happened u with the settlement of uh PBC 4:50 4 minutes, 50 seconds prices and of course last 2 years had been pretty slow in terms of the end 4:57 4 minutes, 57 seconds demand from the construction sector or from the uh government infrastructure. 5:03 5 minutes, 3 seconds So we believe that industry uh is sitting at very like uh low base. Okay. 5:10 5 minutes, 10 seconds So this gives us uh strong headroom uh to increase our sales at least. Okay. 5:17 5 minutes, 17 seconds And we have been very aggressive like in last four or five months and you could see the results as well in terms of our volume and revenue in quarter 4 fi 26. 5:29 5 minutes, 29 seconds So we want to carry this momentum into quarter 1 of FI27 which normally is u 5:37 5 minutes, 37 seconds like strong quarters within the financial year. So we are targeting 400 cr plus revenue for the quarter 1 fi27 5:46 5 minutes, 46 seconds and all our uh strategies in terms of pricing u marketing 5:53 5 minutes, 53 seconds branding uh we we want to achieve this number we already 5:59 5 minutes, 59 seconds got uh Mr. Mita Bachan um as our brand ambassador renewed. Okay. So, so um so, 6:08 6 minutes, 8 seconds so that will also help us in um in pushing for our brand towards our dealer network, channel partners, plumbers and 6:17 6 minutes, 17 seconds and consumer. So, so we are pretty we are pretty bullish on uh on FI27 now. 6:26 6 minutes, 26 seconds and um and not only FI27 we want to carry this momentum over the next four five years um like u Suji mentioned that 6:34 6 minutes, 34 seconds u u now Sanjay Gupta G is the chairman so so under his supervision guidance we 6:43 6 minutes, 43 seconds will leverage the group network um like we are already talking to large u dealers within the group and they have 6:53 6 minutes, 53 seconds already come forward and uh and u and started taking up PVC pipe dealerships, 7:00 7 minutes right? Uh so so the group synergies we in last four five years whatever we felt that can be leveraged upon now we 7:08 7 minutes, 8 seconds are working very closely on those uh on those uh benefits and and like I said 7:16 7 minutes, 16 seconds next four five years we want to grow our business by 35% on CHR basis and uh 7:24 7 minutes, 24 seconds there is a very good platform which has been established in terms of 1100 100 cr worth of revenue in FI26 7:33 7 minutes, 33 seconds and the capacity which is already with us is 3,000 cr rupes um and uh then one plant in south India will come in next 7:40 7 minutes, 40 seconds two years and the other incillary alli products what we are uh building up in terms of portfolio whether it is window 7:48 7 minutes, 48 seconds profiles whether it is water tank whether it is bath fittings so plus basis we are very confident of 7:56 7 minutes, 56 seconds delivering 35% u revenue gagger for the next 5 years 8:03 8 minutes, 3 seconds and um any uh the near time crude prices uh this time will trickle through the PVC prices or not does not look like that should make a difference. 8:13 8 minutes, 13 seconds It may impact but it is very uncertain right now to predict anything about the PVC resin or any other polymer prices 8:20 8 minutes, 20 seconds because markets or the situations are very uncertain. We are not sure what exactly will happen tomorrow. So we cannot give any clear guidance regarding 8:28 8 minutes, 28 seconds the pricing but of course it will remain under pressure for the next few months. 8:31 8 minutes, 31 seconds We don't we are not very much bullish about the prices. 8:36 8 minutes, 36 seconds All right. Thank you. Thank you very much. 8:39 8 minutes, 39 seconds You thank you. 8:43 8 minutes, 43 seconds Next question is from the line of Warun Chilasara from 361 Capital. Please go ahead. 8:50 8 minutes, 50 seconds Yeah. Hi sir. uh so I just wanted to understand for this quarter despite like 13 14% increase in realization our gross 8:57 8 minutes, 57 seconds margin uh kind of uh pit orientated uh from you know both quarter and quarter and why so could you just help us 9:05 9 minutes, 5 seconds explain you know what is the reasons for that so there are three main reasons u varun 9:12 9 minutes, 12 seconds number one being that of course u I mean like in our last earnings call we did mention that we want to be very 9:19 9 minutes, 19 seconds aggressive uh in terms of pricing Okay, because we want to catch up on the momentum of volume growth first and then once the base is set then we'll look at 9:27 9 minutes, 27 seconds the pricing. So in despite like the NSR going up uh despite uh PVC prices going up we continued with our aggressive 9:36 9 minutes, 36 seconds pricing strategy because u I mean that's what we had uh um like uh promise with our dealers. Okay. So so we continued 9:44 9 minutes, 44 seconds with that. We didn't want to be very opportunistic that prices are going up. So, so we pull out of our aggressive strategy just to 9:54 9 minutes, 54 seconds maintain the dealer confidence level and this will benefit us in quarter one. So, one is that second uh second is uh 10:01 10 minutes, 1 second because the window profile window profile uh business is getting built up. 10:07 10 minutes, 7 seconds So, there were some like cost associated to that whether there were like sampling etc at at various 10:14 10 minutes, 14 seconds showrooms we had to give right. So some some of that uh which got accounted in the in the in the u gross margin and 10:23 10 minutes, 23 seconds third uh now that I mean we want to have we want to have a base okay which can deliver 10:31 10 minutes, 31 seconds 35% volume kagger right so there were some like finished good inventory which was lying in the uh books right uh in 10:39 10 minutes, 39 seconds our plants basically um okay which was like dead inventory um um which was unsold inventory. So we thought that now 10:48 10 minutes, 48 seconds that uh the volume we have to catch up we had to clear some space right. So there was some like uh sellout of the 10:57 10 minutes, 57 seconds finished good inventory which was like unsold finished good inventory. So there was some write downs on that. 11:07 11 minutes, 7 seconds Okay. And and sir uh did we have any inventory gain this quarter uh because of the sharp increase in PVC price? 11:14 11 minutes, 14 seconds Very minuscule. uh because we were clearing the inventory right u so so inventory gains on the raw material 11:20 11 minutes, 20 seconds inventory was uh nothing significant okay and sir for this uh quarter like 11:27 11 minutes, 27 seconds you mentioned you know around 400 corover you're expecting so how has been April that uh you know weing like 40 45% 11:36 11 minutes, 36 seconds growth for this quarter uh despite you know PVC coming down so like how has been the volume growth for April uh looking like so far 11:43 11 minutes, 43 seconds we are on back because what we understand is there is fair bit of you know uh restocking again 11:50 11 minutes, 50 seconds because of you know declining prices. So has that not impacted anyway? 11:55 11 minutes, 55 seconds So channel is already running at a very low price low stocks. So that is not a big challenge right now because already 12:02 12 minutes, 2 seconds channel has is cautious regarding the prices and again there is not not very sharp drop we are expecting in the big 12:10 12 minutes, 10 seconds in prices two or 4% maximum here and there and again it will be again up to that uh next month only the duty 12:17 12 minutes, 17 seconds exemption which is up to 30th of June will be the last date and again 8.252% 252% duty will be again hitting up the 12:24 12 minutes, 24 seconds cost of uh imports. So we expect that that will not long to last. So we are not very much bearish regarding that it 12:32 12 minutes, 32 seconds will go towards again to a next level of around 60s in the coming in the near future. 12:38 12 minutes, 38 seconds Okay. And sir how much like we currently uh what is the procurement cost for us in terms of PVC price? Reliance price as 12:47 12 minutes, 47 seconds per Delhi landing it is somewhere around 84 85 rupees whereas the local trade market is around 79 rupees you can say 12:56 12 minutes, 56 seconds okay sir thank you sir I'll join the team thank you thank you thank you before we move to the next question a 13:04 13 minutes, 4 seconds reminder to the participants to ask a question you may press star and one next question is from the line of Kesha 13:10 13 minutes, 10 seconds Vlahoti from HDFC securities please proceed Hello. Hi, thank you for the opportunity. So I want to get a sense as 13:19 13 minutes, 19 seconds you highlighted you know you're getting aggressive for volume. So how you want to you know balance the volume and profitability side how should we see the margin going forward. 13:32 13 minutes, 32 seconds So if you look at u like Apollo pipes right on standalone basis our target is between 8,000 rupees per turn to 10,000 13:40 13 minutes, 40 seconds rupees per turn depending on like what kind of sentiments market um has if it is like lot of push then margins could 13:47 13 minutes, 47 seconds be like 8 to 9,000 per ton if there is natural pull then it could be 10 to 11,000 rupees a ton so Apollo uh we are 13:54 13 minutes, 54 seconds like targeting 10% margin uh like around 10 9 to 10,000 rupees per ton at the beta 14:02 14 minutes, 2 seconds Kissan I mean in the year one the margins were at like 400,000 rupees per ton but last year it was like barely 14:10 14 minutes, 10 seconds beta positive uh reason being that there was a lot of pressure on the demand there was no pull from the market so there was a lot of push sales assuming 14:18 14 minutes, 18 seconds that fi 27 will be better than fi 26 so for kisan the first target is to take it to 5 6,000 rupees per turn on sustainable basis and then eventually as 14:26 14 minutes, 26 seconds the um like further ramp up takes place um uh beyond 5 600 cr rupes of revenue 14:33 14 minutes, 33 seconds from Kissant then the margins uh will improve further towards 10,000 rupees per ton. So on console basis you can 14:40 14 minutes, 40 seconds assume that 67,000 8,000 rupees per ton then the journey towards 10 11 12,000 rupees per ton in next 2 three years. 14:50 14 minutes, 50 seconds Understood. Got it. So normally our understanding was uh just correctly uh channel inventory was you know pretty 14:57 14 minutes, 57 seconds high on the March end because PVC prices were going up that point of time although due to correction now the channel inventory is low. So is that 15:06 15 minutes, 6 seconds assessment right? How channel inventory moves. So that way the April volume should have been bit on the lower side. 15:12 15 minutes, 12 seconds Can you give some sense on April volume? 15:16 15 minutes, 16 seconds See definitely channel inventory u got like uh uh heavy right towards end of March 15:26 15 minutes, 26 seconds and it did impact u April to some extent right but like I said uh I mean 400 cr 15:33 15 minutes, 33 seconds of uh revenue for quarter 1 it we have factored in like you know whatever April 15:40 15 minutes, 40 seconds uh went through okay and there was expectation that yes after strong March, April will be light and but then from 15:48 15 minutes, 48 seconds May June again things will pick up. So we are already seeing uh pick up u um in 15:55 15 minutes, 55 seconds in inventory um in in channel filling up right. U so so yes I mean things are pretty much on track. 16:03 16 minutes, 3 seconds Okay. All right. So just can you give a sense you know what sort of maybe not on revenue sort of volume growth you are targeting for this quarter. So what 16:10 16 minutes, 10 seconds industry growth you're building and what is your target for this quarter and how is the demand moving right now agree and plumbing demand. 16:19 16 minutes, 19 seconds So if you look at like u the revenue for the port 4 was around 350 crores and we are targeting 400 cr. So it's like 15% 16:28 16 minutes, 28 seconds jump um somewhat right on quarteronquarter basis and I think NSR 16:34 16 minutes, 34 seconds for the like uh for the uh for the uh full quarter of Q4 was 110 rupees per 16:42 16 minutes, 42 seconds kg. So I don't think there'll be like much of uh hardly 24 rupees uh here and there. So 16:50 16 minutes, 50 seconds you can expect that the volume growth is uh like double digit only. 16:59 16 minutes, 59 seconds Understood. Got it. So that is helpful. 17:02 17 minutes, 2 seconds Thank you so much. Lastly, I also ask of the demand side. Uh flavor on demand. How is it moving? 17:08 17 minutes, 8 seconds Demand um is like April. April was good. 17:13 17 minutes, 13 seconds Okay. It could have been better but it was expected because of heavy March. May June um it's a seasonal quarter for the 17:20 17 minutes, 20 seconds industry. Okay. Demand from agree is good and projects which got spilled over as in like the uh the the construction 17:29 17 minutes, 29 seconds projects we got spilled over in quarter 4. So contractors are now rushing towards uh closure of those projects. So so demand is good uh so far. 17:41 17 minutes, 41 seconds Got it. Thank you so much. Thank you. 17:50 17 minutes, 50 seconds Next question is from the line of Anuparak from Anandrati. Please go ahead. 17:57 17 minutes, 57 seconds Yeah. Hi sir, thank you for the opportunity. Uh can you uh give me some color regarding how the demand is shaping up in urban and rural market? 18:12 18 minutes, 12 seconds So see I mean um so let's break the demand in two segments. One is uh plumbing construction. Second is agree 18:20 18 minutes, 20 seconds and u so so rural is all agree. Okay. So so that demand is good uh because of the 18:28 18 minutes, 28 seconds main season uh for the for the water pipes. Okay. So so that segment is doing fine. Now in terms of construction 18:35 18 minutes, 35 seconds plumbing rural and uh urban um I mean I would say that demand is good in both the regions. 18:46 18 minutes, 46 seconds Yes. Yes, I mean rud is outperforming urban um in last 2 3 months this is what uh we are witnessing. 18:57 18 minutes, 57 seconds Okay. Uh also uh just wanted to understand how is the competitive intensity in the plastic pipe space uh 19:06 19 minutes, 6 seconds within that the promoter of ashield pipes is planning to come up with a large pipe plant in FY27. So do you 19:13 19 minutes, 13 seconds expect the competitive intensity likely to uh remain high over the medium term? 19:21 19 minutes, 21 seconds See I mean competition intensity has increased significantly in the last 3 four years. Okay. And uh that's why out 19:29 19 minutes, 29 seconds of the pressure all the top players in the industry they started reducing pricing they got into price war and everyone fighting for u um um its share. 19:38 19 minutes, 38 seconds So so so that's continuing. Okay. At the same time lot of cleanup at the bottom level has also happened because the 19:48 19 minutes, 48 seconds larger players organized players are are are having a very aggressive pricing. So the margins in the industry 19:55 19 minutes, 55 seconds go down and then uh the players with higher cost in the unorganized segment uh with with uh zero brand value they 20:03 20 minutes, 3 seconds suffer and then they shut down also. So a lot of capacity gets cleaned up as well. So um so I guess uh um and after 2 20:11 20 minutes, 11 seconds three years of like flattish volume growth for the industry um at some point industry will benefit from the low base 20:18 20 minutes, 18 seconds also right um um if it's a 50 60,000 cr industry in size today and it starts 20:24 20 minutes, 24 seconds growing at 7 8%. So every year 4 5,000 cr worth of new market will be created and u and and yes I mean uh competition 20:33 20 minutes, 33 seconds will come and go. Okay, we are clear on our uh strategy that how we have to ramp up our plants uh which are three uh in 20:42 20 minutes, 42 seconds number today. Um um the main um North India plant uh then the West India plant and the new one environment we have to 20:50 20 minutes, 50 seconds take these plants to,000 cr revenue in next 5 years. Um then we want to put up a large plant in South India which is going to give me another 1,000 cr rupees revenue. 21:01 21 minutes, 1 second So uh so so within piping segment with the SQ range with the new products the 21:08 21 minutes, 8 seconds distribution network the brand Apollo um support from uh the group uh dealer 21:15 21 minutes, 15 seconds network guidance of Mr. Sanjay Gupta and then on top of it uh Amitab Bachan as a brand ambassador. I think we are pretty 21:23 21 minutes, 23 seconds uh we are well on track to uh to achieve these numbers uh irrespective of competition will go um will come and go. 21:36 21 minutes, 36 seconds Okay. Uh and sir uh what is the PVC resin price outlook for the next 2 three months? 21:43 21 minutes, 43 seconds Prices like I told before earlier the prices should be right now in on the lower side they it may go down by you 21:51 21 minutes, 51 seconds can say three or 4% not too much downward is there again again on the higher side there's no too much scope also there so again on the high side 21:59 21 minutes, 59 seconds four or 5% plus side BC so we are not see too much of ups and downs in the PBC prices in the near future it should remain stable in the within given range 22:08 22 minutes, 8 seconds of plus - 5% only okay and for this Last question. What is the status of channel inventory? Is it normal or below normal? 22:19 22 minutes, 19 seconds Right now the channel inventory after March stocking and then again the prices fell down. So China has maximum D the 22:26 22 minutes, 26 seconds stock themselves and they are running on a very low inventory. So the increase on first they have tried to a little bit of 22:33 22 minutes, 33 seconds uh you can say uh increase the inventory at their end but that is not on a very higher side and again the seasonal demand is there. So we don't see the 22:42 22 minutes, 42 seconds channel is running on a very high inventory. It should be on a normal or you can say below normal inventory only. 22:48 22 minutes, 48 seconds Okay sir. Thank you so much. That's it from my time. 22:54 22 minutes, 54 seconds Thank you. Participants to join the question to you may press star and one. 23:01 23 minutes, 1 second Next question is from the line of Abhishek Sani froma investment managers. Please proceed. 23:07 23 minutes, 7 seconds Yeah thank you for the opportunity. I wanted to understand management's long-term vis strategy for Kissan Moldings. So promote Apollo pipes has 23:15 23 minutes, 15 seconds steadily increased its stake in the last few quarters. So should investors expect Kissan to continue as a separately 23:23 23 minutes, 23 seconds listed entity or could there be a merger or consolidation with Apollo pipes in to be considered in the near future and 23:30 23 minutes, 30 seconds what are the broad broader strategic plans for Kishan over the next three to five years? 23:36 23 minutes, 36 seconds [clears throat] 23:37 23 minutes, 37 seconds Okay. So I'll address second question first. Um Kisan molding plant u right 23:43 23 minutes, 43 seconds now is capable of generating 4 500 cr of revenue. I mean we closed at around 200 23:50 23 minutes, 50 seconds uh um 250 cr last year. Okay. So first u uh strategy is to take this to like 500 23:58 23 minutes, 58 seconds cr rupees. For that there is some like 30 40 cr of capeex which we have already incurred right. Uh then we want to build 24:08 24 minutes, 8 seconds capacity for 1,000 cr rupees within this plant and for that another 50 60 cr will be spent for brownfield expansion uh 24:16 24 minutes, 16 seconds within the uh premises. So we want to take Kissan plant 2,000 cr uh revenue 24:22 24 minutes, 22 seconds with uh with uh minimum 10 to 12% kind of ITA margin because that's the product SQ range they have that's the brand value it carries within the western Indian markets. 24:33 24 minutes, 33 seconds Uh during this time um I mean u we will ultimately merge Kissan moldings in 24:40 24 minutes, 40 seconds Apollo Pipes Limited. We are already working on like how to go about it. 24:45 24 minutes, 45 seconds Maybe in next few investor calls you will hear from us like uh about the timelines about the merger. 24:54 24 minutes, 54 seconds Okay. Thank you. Thank you. 25:03 25 minutes, 3 seconds Next question is from the line of air dosali from value equity. Please go ahead. 25:10 25 minutes, 10 seconds Hi uh thanks for the opportunity. Uh so I just wanted to know uh what do you think about the market structure going forward? Uh I think because of a lot of 25:19 25 minutes, 19 seconds sector weakness uh we should be seeing or targeting for some market share gains right in the next one or two years. I wanted to know what you think about this. 25:29 25 minutes, 29 seconds Yes. So see I mean uh if you look at my revenue base of 1100 cr rupees um on uh 25:36 25 minutes, 36 seconds on market u size of say 55,000 u today we are at around two 2 and a2% market 25:44 25 minutes, 44 seconds share um um um right and um and given the ramp up which is going to happen from the 25:53 25 minutes, 53 seconds existing plants plus uh our new south India plant and then then vanasi plant has to show results right which it will. 26:00 26 minutes So we are looking at like 3 three and a half% market share okay in next 3 four years 26:07 26 minutes, 7 seconds assuming industry will grow at 7 8% um so that's how we going to achieve our 35% revenue kagger what uh we are 26:14 26 minutes, 14 seconds guiding today and market share will I mean come at the cost of the smaller weaker unorganized 26:23 26 minutes, 23 seconds players okay still there is a long tail which keeps on getting disrupted because of whatever is happening within the um u 26:31 26 minutes, 31 seconds um like sector right in terms of price volatility etc. And on top of it uh the formalization of sector keeps on 26:40 26 minutes, 40 seconds happening and then consumer awareness towards brands formalized channels. 26:46 26 minutes, 46 seconds So all that will keep on uh helping us to take market share from smaller players. 26:55 26 minutes, 55 seconds Okay. Thank you. 26:57 26 minutes, 57 seconds [clears throat] 27:00 27 minutes Thank you participant. If you wish to ask a question, you may press star and one. 27:07 27 minutes, 7 seconds Next question is from the line of Shashan Sony from Dashia Capital. Please proceed. 27:14 27 minutes, 14 seconds Yeah. Hi. Uh thank you for taking my question. Um I just had like a two-part question. One is just on the product 27:21 27 minutes, 21 seconds split within pipes. if you could just let us know uh broadly what's the current and what do you intend it to be 27:28 27 minutes, 28 seconds right there's also CPVC uh I'm assuming ramping up so if you look at uh our uh sales split 27:37 27 minutes, 37 seconds right uh let's start from the top so one is the plumbing construction second is agriculture and government intra so um 27:46 27 minutes, 46 seconds plumbing construction is around 60 65% okay of the total pile and then then rest 35% is agree and government infra 27:55 27 minutes, 55 seconds within uh within uh within uh the the uh construction uh plumbing C I mean uh 28:04 28 minutes, 4 seconds CPVC is growing at like um 10 12%. Water tank is growing at 20 30%. 28:11 28 minutes, 11 seconds window profile business um is um like ramping up um it like quarter 4 28:18 28 minutes, 18 seconds contribution was small but this year we expect minimum like uh four 5% uh u 28:25 28 minutes, 25 seconds contribution in the total revenue uh okay for the construction u plumbing segment and then yes uh the demand 28:34 28 minutes, 34 seconds uptick in the base products which are like UPVC pipes u uh and fittings that also uh will drive volume growth for FI27. 28:46 28 minutes, 46 seconds Got it. And uh given your recent tie up uh with Lubresol, are you seeing early signs of uh the benefit that you're 28:55 28 minutes, 55 seconds giving? Because what we also see from your competitors, right? They're kind of doing the compounding inhouse and 29:03 29 minutes, 3 seconds passing on that benefit to you to the customers, right? So, how do you see that play out in the actual world? 29:12 29 minutes, 12 seconds So like I said u I mean um CPVC grew for us by 10% um in FI26 and uh and u with 29:21 29 minutes, 21 seconds result tie up and support. Okay we are expecting more than 20% growth in FI 27 um within CPVC segment. 29:33 29 minutes, 33 seconds Got it. That's very helpful. Thank you. 29:34 29 minutes, 34 seconds And maybe just one last bookkeeping question. um your other expenses kind of increased uh a bit uh more right in Q4. 29:44 29 minutes, 44 seconds Um was it related to maybe like as you mentioned earlier in the call right some starting off expenses for the window or 29:52 29 minutes, 52 seconds was there like a particular reason for the increase in other expenses mainly talking about standalone 29:59 29 minutes, 59 seconds of course yes mainly that only understood okay thank you so much and bless 30:08 30 minutes, 8 seconds thank you next question is from the line of rashan nay from antique stock broking Please go ahead. 30:17 30 minutes, 17 seconds Yeah. Hi. Uh thanks for the opportunity. 30:19 30 minutes, 19 seconds Uh so my question is Rashan your voice is very low. Uh is it audible now? Yes please proceed. 30:26 30 minutes, 26 seconds Yeah. So uh in molding uh last performance show you know we should 30:33 30 minutes, 33 seconds start seeing improvement in but uh you see the performance is more or less uh similar to last quarter. So it can help 30:42 30 minutes, 42 seconds to understand what has gone wrong in this quarter of the family that that's 30:53 30 minutes, 53 seconds can you okay so as I could understand you're asking about Kisan molding's quarterly performance correct correct 31:02 31 minutes, 2 seconds so see I mean quarter 4 revenue for Kisan was 80 cr rupees which was like 60 cr in quarter 3 okay so so there is a 31:11 31 minutes, 11 seconds good uh jump on quarteronquarter basis in terms of volume also from 5,000 ton u 31:17 31 minutes, 17 seconds it um it uh did like 7,000 ton on quarteronquarter basis so so yes I mean there is uh in terms of volume ramp up 31:26 31 minutes, 26 seconds and revenues there was a good jump in margin yes there was u some disappointment reason being uh the um 31:35 31 minutes, 35 seconds like um the the Jan and Feb months were not too good in terms of uh um like uh 31:43 31 minutes, 43 seconds demand demand only recovered towards like you know end of February and March month. So there was a lot of push sales and aggressive sales in the first two 31:51 31 minutes, 51 seconds months which led to like margin deterioration but that was the strategy what we adopted and um and um and now 32:00 32 minutes that the plant uh ramp up is happening right the operating leverage benefits will start coming in and from quarter 32:07 32 minutes, 7 seconds one you will start seeing improvement in the margins as well. 32:12 32 minutes, 12 seconds Okay uh that's helpful. Uh and the next question is uh um as as the uh as you have indicated that you know 32:21 32 minutes, 21 seconds Mr. Rashan your audio is not very clear sir. Uh is it better now? Request. Yes. 32:28 32 minutes, 28 seconds Yeah. So the next question is uh as you have indicated that you know the import duty is likely to you know uh come back 32:35 32 minutes, 35 seconds uh by uh June. uh so are you witnessing any higher uh imports from China or this 32:42 32 minutes, 42 seconds is is it expected to be there in uh May and plus minus four 5% uh know PB price 32:51 32 minutes, 51 seconds uh volatility that is that factors in uh this higher imports that can come from China in the month of May. 33:02 33 minutes, 2 seconds Yeah Mr. Russian. Yeah, we expect that that may come the higher imports may come because on account of seeing duty 33:08 33 minutes, 8 seconds being uh you can say that that uh no duty being removed and again the duty will be there from 1st of July. So they 33:15 33 minutes, 15 seconds may be there may be high level of imports in the uh you can say next 15 or 20 days 30 maximum 30 days you can say that but again the channel will be 33:24 33 minutes, 24 seconds cautious regarding that because once again with the higher level of imports the uh the traders always faces losses 33:32 33 minutes, 32 seconds because of those uh things higher inventories so I don't think that there will be too much of stocks in the uh you can say channel for the resin 33:40 33 minutes, 40 seconds inventories with the traders but of course they will definitely u take a bet on that thing and um we'll try to make 33:48 33 minutes, 48 seconds higher imports and we'll try to make money on account of that but seeing a monsoon season posted for July or August 33:55 33 minutes, 55 seconds you can say that the demand will be under pressure in that uh Q2 so I don't think that it will be at a very high level of course it will be at there but 34:04 34 minutes, 4 seconds not very high level so it can be a yes or no both ways but we are not very much bullish about that thing 34:13 34 minutes, 13 seconds okay thanks a lot We have question from my side. What is the uh traffic guidance for FI27? 34:24 34 minutes, 24 seconds Okay. Uh see I mean we spent 150 cr rupes for the FI26. FI27 our commitments 34:32 34 minutes, 32 seconds um are to ensure that the uh like Kisan plant has the capacity to um to throw 34:40 34 minutes, 40 seconds 1,000 cr kind of revenue and plus some groundfield expansion in the existing plant which are going on. So for FI27 the total capeex uh requirement would be near about 100 cr rupes. 34:52 34 minutes, 52 seconds Okay. Uh that's all from my thank you. Thank you. 35:00 35 minutes Next question is from the line of SNH Pala from Nama. Please go ahead. 35:06 35 minutes, 6 seconds Good afternoon team and thanks a lot for the opportunity. Just couple of questions from my end. Uh you said from quarter one onwards you shall see margin 35:14 35 minutes, 14 seconds improvement but while what we understand is that there have been aggressive pricing which even you have opted for even you know the competive intensity 35:21 35 minutes, 21 seconds continues to remain high with share of agree being higher in quarter one how do you plan to achieve higher margins here 35:31 35 minutes, 31 seconds I mean in terms of if you look at the IITA right look at Apollo standalone and look at Kasan so Apollo standalone has 35:40 35 minutes, 40 seconds been in the range of 8,000 to 10,000 rupees per ton on regular basis. Now given that I mean volume will increase 35:47 35 minutes, 47 seconds within standalone standard Apollo there will be a lot of operating leverage benefits we will see. So so that's the like I would say positive tone which we 35:57 35 minutes, 57 seconds highlighted that there will be like gradual improvement in the spreads for Apollo standalone from 8 to 8500 9,000 36:06 36 minutes, 6 seconds rupees per ton. So that much improvement you will keep on seeing. Kissan right now is at like barely breaking even. The 36:14 36 minutes, 14 seconds reason being uh the plants are being like highly underutilized. So so a lot of work is happening how to increase sales etc. And initially of course sales will come um at at lower NSRs. 36:27 36 minutes, 27 seconds Kissan will take one two quarters to show like improvement significant improvement but yes I mean we'll pull it out out of like you know minus one minus 36:36 36 minutes, 36 seconds 2 which it is being uh throwing for last four quarters understood and uh where is the 36:44 36 minutes, 44 seconds confidence on the volume growth coming in is it any improvement on the sectoral demand that you are seeing and you have also invested into OPVC have you started 36:51 36 minutes, 51 seconds seeing any infrastruct or or is it just purely the plumbing and the agree side of it where you're seeing things pick up now. 36:59 36 minutes, 59 seconds I think that's the core business which uh which shows positive signs okay for such growth guidance. 37:07 37 minutes, 7 seconds Government infra still remains uh low right although a lot of promises have come towards like release of payments 37:14 37 minutes, 14 seconds etc and kickstart that capex but uh we have not seen anything significant coming on ground as of now. 37:23 37 minutes, 23 seconds Our our positive sense is coming from the like core existing products, our dealer network, addition of new dealers 37:30 37 minutes, 30 seconds from the group. Uh then the pricing aggressive pricing what we adopted six four five months ago that is started to 37:38 37 minutes, 38 seconds play. So all the factors uh at the micro level make us uh bullish on our uh volume numbers. 37:49 37 minutes, 49 seconds Sure. Can I just give the distributor addition number probably FI25 versus FI26 where do we stand that 37:59 37 minutes, 59 seconds so so see I mean net net addition will be like 4 5%. Um because um now that uh 38:07 38 minutes, 7 seconds I mean we are looking for a very strong set of distributors who can uh run along with us right to match our growth uh 38:16 38 minutes, 16 seconds commitments of 35% on annual basis. So there'll be a lot of cleanup which will take place and we'll make some uh uh 38:23 38 minutes, 23 seconds relevant uh large dealers like how we uh operate in Apollo steel pipes. So that's the kind of strategy we're going to adopt here and we're going to filter 38:31 38 minutes, 31 seconds down uh smaller play uh smaller dealers and we'll attach them to the larger ones. Uh plus yes there'll be like some 38:38 38 minutes, 38 seconds addition from the group that number uh will be more relevant to give after say maybe two quarters. 38:47 38 minutes, 47 seconds Noted and uh lastly on the working capital days we've seen some amount of increase in this particular quarter. 38:54 38 minutes, 54 seconds Could you help us understand when can they normalize and what was the reason for increase this quarter? 39:00 39 minutes So, so see I mean um FI25 was a very solid year with 35 days of working capital cycle. Um this year FI26 we 39:10 39 minutes, 10 seconds closed at uh 46 days 45 days. So there is like 10 days of increase in the net working capital cycle which has mainly come from the inventory days. Inventory was 17 FI25 and 80 days in FI26. 39:22 39 minutes, 22 seconds So as uh plants are ramping up right um and and some clarity on the PVC price 39:29 39 minutes, 29 seconds settlement this inventory days shall come down by like 5 to 10 days during the financial year and our channel 39:37 39 minutes, 37 seconds financing program is also undergoing u uh pretty smoothly. So I guess FI27 we should uh be like closing below 35 days 39:47 39 minutes, 47 seconds and u and although our internal target is 30 days right um as at March 27 but yes it'll be like touching the FI25 39:55 39 minutes, 55 seconds number uh minimum got us thanks thanks a lot and all the 40:02 40 minutes, 2 seconds very best thank you next follow-up question is from the line 40:09 40 minutes, 9 seconds of Vun Chilasara from 361 Capital. Please go ahead. 40:14 40 minutes, 14 seconds Yeah. Hi sir. Uh sir uh just to follow up on the south plant uh uh when do we plan uh what is the progress here like 40:22 40 minutes, 22 seconds uh because we have the warrant expiring this year. So like what is the plan because in the capex you mentioned is only 100 cr for this year. So uh are we factoring anything for the south now? 40:35 40 minutes, 35 seconds So south see I mean right now we have a plant within Bangalore region. Okay. 40:40 40 minutes, 40 seconds Toukur to be precise. I u I mean um what we believe is that um whenever we 40:48 40 minutes, 48 seconds go and set up the base it will be near that area only. Malur, Tonkur, Bangalore, Belt. I think the work for 40:56 40 minutes, 56 seconds that will start after one year in terms of land acquisition etc. First I mean this year um 41:03 41 minutes, 3 seconds from the target is to ramp up Vanessi which is now fully operational. Okay. Um so so once we have like u confidence 41:12 41 minutes, 12 seconds conviction that yes uh Parani is uh on track then immediately we'll start working on South India plant. Um I mean 41:20 41 minutes, 20 seconds as per our experience and expertise what we have built in the project execution we believe that within uh 18 months uh from like the day we finalize the land 41:29 41 minutes, 29 seconds and 18 months from that date we can have the plant uh go live. So so so you can 41:37 41 minutes, 37 seconds expect that south India plant will come somewhere in like you know FI28 end towards FI28 end 41:46 41 minutes, 46 seconds for the window and the door profile business uh how is the realization for this uh segment and uh you know which are the areas that you're targeting initially. 42:00 42 minutes Hello. 42:02 42 minutes, 2 seconds See, I mean uh we sell uh window profiles on perl length basis. Okay. It we it doesn't get sold on a per kg basis. 42:17 42 minutes, 17 seconds Okay. But this volume gets added right I mean for our overall volume uh for the segment which we mentioned right 42:24 42 minutes, 24 seconds 160 plus. Yeah that's right. it is like uh contributing like around 1 one and a half% to the total sales. 42:34 42 minutes, 34 seconds Okay. And which are the geographies 42:35 42 minutes, 35 seconds [clears throat] 42:36 42 minutes, 36 seconds where where we have penetrated uh initially? 42:40 42 minutes, 40 seconds Right now we are at uh north India and south India. North and south here. 42:47 42 minutes, 47 seconds Okay sir. Thank you sir. 42:51 42 minutes, 51 seconds Thank you participants to ask a question you may press star and one. 43:04 43 minutes, 4 seconds Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to the management for the closing comments. 43:17 43 minutes, 17 seconds Hello everyone. I thank you all for joining us today for this con call. We appreciate your continued support and 43:24 43 minutes, 24 seconds interest in our company. We look forward to updating you on our progress and future calls. If you have any further questions, please feel free to reach to us. Thank you and have a great day. 43:36 43 minutes, 36 seconds Thank you very much, sir. On behalf of MK Global Financial Services Limited, that concludes this conference. Thank you all for joining us and you may now disconnect your lines.