Garware Hi-Tech Films Limited — Q3 FY26

Garware Hi-Tech Films Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=rDpukyDA0Bk Published: 3 months ago

0:00 Ladies and gentlemen, good day and welcome to Gervaria High-Tech Films Limited Q3 and 9month FY26 earnings 0:08 8 seconds conference calls hosted by Go India Advisers LLC. 0:13 13 seconds As a reminder, all participant lines will be in the listenon mode and there will be an opportunity for you to ask questions after the presentation concludes. 0:22 22 seconds Should you need assistance during the conference call, please signal an operator by pressing star then zero on 0:28 28 seconds your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Miss Gara 0:36 36 seconds Singla from Go India Advisers LLP. Thank you and over to you ma'am. 0:41 41 seconds Thank you. Good morning everyone. I am Gima Singla and it's my pleasure to welcome you on behalf of Gwaria HiCech Films Limited. Thank you for joining us 0:50 50 seconds today for quarter 3 and 9 months of financial year 26 earnings conference call. This call is being hosted by Go India Advisor. Please note that today's 0:58 58 seconds discussion may include certain forward-looking statements. Therefore, they must be viewed in in conjunction with the risks that the company faces. 1:05 1 minute, 5 seconds Today on the call, we are joined by Mr. 1:08 1 minute, 8 seconds Deepak Jooshi, director sales and marketing and Mr. Abhishek Agarwal, the CFO. I now invite Mr. Deepak Jooshi to present the company's business outlook 1:16 1 minute, 16 seconds and performance after which we will open the floors for Q&A. Thank you and over to you sir. 1:22 1 minute, 22 seconds Thank you Karima. Good morning everyone and thank you for joining us to discuss the performance of Gwar High Films Limited for the third quarter of FY26. 1:34 1 minute, 34 seconds To start with, wishing you and your loved ones a very happy new year. Gwar's 1:41 1 minute, 41 seconds business model true to its 90 years of heritage and innovation, integrity and customer first approach remains 1:49 1 minute, 49 seconds resilient in the face of uncertain global macro conditions. Geopolitical volatility and successive tariff actions 1:58 1 minute, 58 seconds by the US administration continue continued to pose a challenging environment for exporters. During the 2:06 2 minutes, 6 seconds quarter, we experienced the full impact of 50% tariff structure. The offtake was 2:13 2 minutes, 13 seconds calibrated to maintain undisrupted supply chain. Even in this challenging 2:20 2 minutes, 20 seconds environment, GHFL largely maintain its uptake. Revenue declined marginally by 2:27 2 minutes, 27 seconds 1.6% yi. Even for 9 month FY26 revenue decline was limited to 2.4%. 2:37 2 minutes, 37 seconds Our order book continues to remain robust. 2:41 2 minutes, 41 seconds Despite a 50% tariff, the Abitar decline has been contained at 7.4% on Yi basis in Q3 FY26. 2:54 2 minutes, 54 seconds For 9 month FY26, the decline is around 8.3% primarily on account of tariff related cost absorption. 3:05 3 minutes, 5 seconds Export continued to form a significant part of our business contributing 74.3% of total revenues for this quarter. Our 3:14 3 minutes, 14 seconds sun control segment witnessed a strong demand. Our architectural film business continued to expand rapidly in all 3:21 3 minutes, 21 seconds geographies including Middle East and Indian markets. Backed by focused marketing initiatives and premium 3:28 3 minutes, 28 seconds product launches. Recognizing the growth potential in the Middle East market, the company has announced to establish a 3:36 3 minutes, 36 seconds wholly owned subsidiary in UAE. The new entity will manage trading and exports 3:43 3 minutes, 43 seconds of films, ceramic coatings and paint protection film across the Mina region and other international markets. We also 3:52 3 minutes, 52 seconds set up two of its kind uh global application studio in UAE and we are in 4:00 4 minutes process of onboarding more partners across the globe to strengthen our brand equity. This strategic step meaningfully 4:09 4 minutes, 9 seconds strengthens Gwar High films global footprint, expand export capabilities and enhances long-term growth visibility 4:18 4 minutes, 18 seconds in overseas markets. We had successfully doubled our paid protection field capacity to 600 LSS in September 25. The capacity is ramping up as per the plan. 4:31 4 minutes, 31 seconds The expansion has enhanced manufacturing efficiencies and unlocked additional capacity headroom for our future growth. 4:40 4 minutes, 40 seconds The upcoming TP TPU manufacturing line which will be commissioned by October 2026 will further strengthen our 4:48 4 minutes, 48 seconds backward integration and innovation capabilities with 25% of the capacity earmarked for new generation products. 4:58 4 minutes, 58 seconds In addition, we launched Gervare Home Solutions, a new D2C business vertical aimed at expanding our domestic 5:07 5 minutes, 7 seconds footprint and cater to unmet consumer demand in the architectural film space. 5:13 5 minutes, 13 seconds We opened our first GHS studio in Chamur in Mumbai. It is in collaboration with a local interior design firm and we plan 5:22 5 minutes, 22 seconds to follow the same approach to increase our presence to all towns in India. This platform will help GHFl directly engage 5:31 5 minutes, 31 seconds with consumers and premium real estate projects while enhancing brand visibility and driving higher margin 5:38 5 minutes, 38 seconds growth. Our Kurvari application studio network which acts as a direct to consumer channel for premium PPF and 5:47 5 minutes, 47 seconds glazing films continues to expand rapidly. We are targeting to cross 300 plus studios by end of FY26 5:57 5 minutes, 57 seconds and have already crossed 250 stores in Q3. This will strengthen our presence across tier 1, tier 2 and tier three 6:06 6 minutes, 6 seconds cities in India. Overall, despite external challenges, this quarter reflects GHFL's resilience, adaptability 6:16 6 minutes, 16 seconds and strong operational foundation. Our continued investment in capacity expansion, product innovation and brand 6:25 6 minutes, 25 seconds building initiatives will ensure we remain well positioned to capture emerging opportunities and deliver 6:32 6 minutes, 32 seconds sustainable value stakeholders. Value two stakeholders. Thank you very much. 6:39 6 minutes, 39 seconds Now I hand over to Mr. Abishek Araal uh our CFO for financial commentary. 6:46 6 minutes, 46 seconds Thank you Deepak and good morning to everyone. 6:49 6 minutes, 49 seconds Let me now take you through the key financial highlights for the quarter ended December 31st 2025. 6:57 6 minutes, 57 seconds For Q3 FI26, our consolidated revenue stood at 459 crores compared to 466 7:04 7 minutes, 4 seconds crores in Q3 of FI25 reflecting and 1.6% year-on-year decline primarily due to the tariff related disruptions in the key export market. 7:15 7 minutes, 15 seconds Despite this, exports remain stable at 74%. 7:19 7 minutes, 19 seconds Abita stood at 86.7 crores compared to 93 93.7 crores in Q3 of FI25 showing a decline of 7.4% yearon year. 7:30 7 minutes, 30 seconds The beta margin stood at 18.9% down only 118 bips year on year maintaining a healthy level despite 7:39 7 minutes, 39 seconds tariff headwinds which has primarily been driven by cost optimization initiatives. 7:47 7 minutes, 47 seconds PBT came in at 73 crores down 9.8% one year while the pair pad for the quarter 7:54 7 minutes, 54 seconds was 55.8 crores compared to 60.8 crores in Q3 of FI25. 8:00 8 minutes On 9 month basis the 9 month of FI26 revenue stood at 1523 crores marginally 8:07 8 minutes, 7 seconds lower by 2.4% 4% yearonear while a beta was at 343 crores down 8.3% yearonear 8:15 8 minutes, 15 seconds reflecting the cumulative impact of tariff volatility on the balance sheet front GHL continues 8:22 8 minutes, 22 seconds to remain debt-free with a robus cash and liquid investment balance of 669 crores as on 31st December 2025 8:32 8 minutes, 32 seconds this strong liquidity position provides ample headroom for our ongoing strategic capex including the TPU line as well as 8:40 8 minutes, 40 seconds future innovation and expansion initiatives. 8:43 8 minutes, 43 seconds Despite short-term headwinds, GHF continues to maintain a strong financial foundation and steady operating cash 8:51 8 minutes, 51 seconds flow generation with new capacity additions, continue to focus on valuated products and improved 8:58 8 minutes, 58 seconds manufacturing efficiency. We expect to gradually enhance our revenue visibility and profitability in the coming years. 9:06 9 minutes, 6 seconds Thank you all. Over to over to the moderator. 9:12 9 minutes, 12 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press 9:20 9 minutes, 20 seconds star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you 9:27 9 minutes, 27 seconds may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will 9:36 9 minutes, 36 seconds wait for a moment while the question Q assembles. 9:40 9 minutes, 40 seconds The first question is on the line of Mahesh Bendra from LIC Mutual Fund. Please go ahead. 9:48 9 minutes, 48 seconds Uh, hi sir. Thank you so much for the opportunity sir. Uh, despite of uh I mean soft quarter and uh the tariff 9:57 9 minutes, 57 seconds issue we were able to handle down our gross margins really well. So sorry to interrupt Mahes. Can you please speak a little louder? 10:05 10 minutes, 5 seconds Yeah. Uh am I'm audible now. Yeah, please go ahead. Thank you. 10:09 10 minutes, 9 seconds Yeah, sir. My question is uh despite of such a soft quarter, still our gross margins were uh not impacted that way 10:18 10 minutes, 18 seconds for the quarter. So yeah. So uh normally uh like you said uh 10:28 10 minutes, 28 seconds Q3 uh uh for us is uh a soft one because uh the seasonality there is no sun no 10:36 10 minutes, 36 seconds sun control kind of uh theory we say uh but uh we have been working on this 10:43 10 minutes, 43 seconds because uh after uh uh the impact of tariff which was hit full of 50% in this 10:50 10 minutes, 50 seconds quarter we managed our operational efficiencies is pretty to the best of our possibilities. I mean we went uh 10:58 10 minutes, 58 seconds with lot of changes uh in um uh for operational efficiencies and plus um uh 11:05 11 minutes, 5 seconds the product mix which we tried to make uh keep it at a very high level that means the more of a high-end products. 11:12 11 minutes, 12 seconds So that's how we were able to maintain this. 11:17 11 minutes, 17 seconds So the tariff that we are paying now uh where it is booked it is in cost or is it in sales? 11:25 11 minutes, 25 seconds Uh it's it's a mix of both. Uh I mean we are passing some of it uh to our 11:33 11 minutes, 33 seconds distributors, dealers. Uh so uh which ultimately goes to pass on to consumer but a very small fraction to end 11:41 11 minutes, 41 seconds consumer but uh some of it is passed on to our distributors and customers 11:48 11 minutes, 48 seconds rest uh we are observing with our efficiencies uh operational efficiencies and product mixes. 11:55 11 minutes, 55 seconds No my question is sir uh suppose we were paying 100 rupees last year uh I mean selling the product now because of the 12:02 12 minutes, 2 seconds tariff the price has gone up. So that ex incremental um the uh incremental amount that we are paying as a tariff that is 12:10 12 minutes, 10 seconds gone into what where that is booked in sales or it is going goes into expenses. 12:17 12 minutes, 17 seconds No that uh so uh Mah uh it has both the impacts uh the increase sales price to our uh 12:26 12 minutes, 26 seconds dealers and distributors it reflects into our sales numbers while the direct which we are paying that becomes part of our expenses. 12:35 12 minutes, 35 seconds Okay. Okay. Sure. And sir uh given uh the current outlook I mean uh do you 12:42 12 minutes, 42 seconds think I mean uh uh I mean we are uh trying to set up a new plant in Middle 12:48 12 minutes, 48 seconds East. So when that plant will come up and uh that will have an impact in FI27. 12:56 12 minutes, 56 seconds Uh see uh we have set up this subsidiary uh because um our growth in uh Middle East North Africa region has been 13:04 13 minutes, 4 seconds phenomenal. I would say we have doubled in in one year uh the sale uh to Middle East season. So we need uh a strong 13:13 13 minutes, 13 seconds subsidiary which can take all the contracts from uh big companies uh local companies because uh the especially for 13:21 13 minutes, 21 seconds the architectural business Middle East is continuously growing and there is a need to block the sun um the the heat in 13:29 13 minutes, 29 seconds in many cases. So the primary objective is to cater to that reason. then uh uh the structure of duties from that 13:37 13 minutes, 37 seconds subsidiary always becomes makes it more attractive and third is uh you know with 13:45 13 minutes, 45 seconds this growth uh this is the ideal uh location for future growth. I mean we have uh like multiple objective uh with 13:53 13 minutes, 53 seconds this particular uh subsidiary in uh UAE. 13:59 13 minutes, 59 seconds No, I mean um when this will become functional uh ah this you know there are 14:06 14 minutes, 6 seconds uh like many steps to that uh the one is like uh setting up which will be completed during this quarter that is 14:15 14 minutes, 15 seconds quarter 4 right but the full impact of that uh might be seen in the later half of FY27 14:24 14 minutes, 24 seconds okay and the tax for this will be zero like needle length right in Middle East Yeah, because this is being set up in uh 14:32 14 minutes, 32 seconds uh this is being set up in free zone. So uh the tax to earned by that subsidiary uh is almost uh nil. 14:43 14 minutes, 43 seconds Sure. Sure. Thank you so much sir. Thank you. 14:49 14 minutes, 49 seconds Thank you. The next question is from the line of Rahul Jane from Grad and Spell. Please go ahead. 14:57 14 minutes, 57 seconds Thanks for [clears throat] the opportunity and sir, congratulations to you and the entire team at Carvar uh given the environment for the kind of 15:04 15 minutes, 4 seconds numbers we have been reporting. So just to add to the previous question uh yes the growth margins have remained flat and in fact they have improved year on 15:12 15 minutes, 12 seconds year as well as quarter and quarter and you explained that some of it is due to the product mix change. 15:18 15 minutes, 18 seconds So firstly sir this entire 50% tariff impact has that been visible in the quarter quarter three and from here on 15:27 15 minutes, 27 seconds uh how do you look at the gross margins going ahead see uh first of all uh uh yes we have 15:35 15 minutes, 35 seconds seen uh full impact of uh almost full impact of 50% tariffs uh but if you 15:42 15 minutes, 42 seconds really see um again uh we are controlling ing the sales that means 15:49 15 minutes, 49 seconds only absolute necessary uh uh product are being uh sold uh into the market to our distributors and dealers because in 15:58 15 minutes, 58 seconds any case of any favorable decision we we tend to gain that uh so that's the purpose of that that's why uh we said u 16:06 16 minutes, 6 seconds I mean there is inventory into the bonded warehouses which can be at a click away whenever the need is there 16:13 16 minutes, 13 seconds into uh by our consumers now uh going forward um if so full impact is there in 16:21 16 minutes, 21 seconds Q3. Now going forward the margins because this is uh we are seeing uh if 16:28 16 minutes, 28 seconds you see the Q3 margins versus Q3 margins so there is hard uh uh less impact. So 16:35 16 minutes, 35 seconds we think in Q4 and Q1 the margin should remain uh around 20% or so depending on 16:43 16 minutes, 43 seconds the product mix but we expect uh to that range but if any good things from Supreme Court of USA or um any trade 16:52 16 minutes, 52 seconds deal happens even to 25% which we are hearing this is all like all in public these things that there might be a 16:59 16 minutes, 59 seconds removal of 25% uh against Russian oil or something. So that also will give us a big positive boost and so 17:08 17 minutes, 8 seconds scenarios are different but definitely in in main season the these thing uh margins will improve and if anything 17:17 17 minutes, 17 seconds goes away like 25% or so we'll definitely grow between 20 to 25%. 17:24 17 minutes, 24 seconds Fair enough and sir with regards to the inventory at the customer level the end customer level. 17:29 17 minutes, 29 seconds Yeah. uh how is that situation currently? I understand from of the channel sex in other industries key that 17:36 17 minutes, 36 seconds is probably at the lowest end. So given the tariffs two scenarios or let us put the tariff remains at the current level. 17:45 17 minutes, 45 seconds So how do you look at the inventory at the customers level and thereby the sales growth going at Corus. 17:52 17 minutes, 52 seconds See um if this remains there so the margin uh like uh the sales volume is 18:00 18 minutes definitely uh bound to increase because still we have got very good uh numbers and we are keeping uh the inventory in 18:08 18 minutes, 8 seconds the bonded warehouse but now the season is coming. If you really see this quarter it starts from the March onwards. I mean March sale reflects the 18:16 18 minutes, 16 seconds seasonality. So sale will definitely increase. All right. Uh that goes without saying because we are not losing 18:23 18 minutes, 23 seconds any sales. We have protected our consumers from any um I would say substantial increase in the in the 18:32 18 minutes, 32 seconds prices. So that was our end goal. If you remember our last uh con calls, we have always maintained that we will not lose 18:40 18 minutes, 40 seconds uh any consumer. We will continuously to grow. Uh so ultimately uh you are right that there has been a decrease in 18:48 18 minutes, 48 seconds inventory into the chain from our from our side between the consumer side uh there has been a decrease because we try 18:57 18 minutes, 57 seconds to we are expecting any good thing I mean any trade deal or something will save us uh a good amount of money right 19:05 19 minutes, 5 seconds so that's why we are trying to keep it at the lower lower level but if it does not happen any deal does not happen no decision comes into favor still the sales growth will continue. 19:16 19 minutes, 16 seconds So that means this year we can be around 2100 plus kind of turnover as what we have been targeting and next year can we 19:23 19 minutes, 23 seconds look at 15 20% growth over and above 2100 at current of 50%. 19:31 19 minutes, 31 seconds See uh again uh for that uh uh this we I mean this is a subjective question that like we remain at 50 uh% tariff and what 19:40 19 minutes, 40 seconds happens because we definitely expect something better or some action from our end but definitely these numbers uh what 19:47 19 minutes, 47 seconds we are seeing is almost um we are sales is stable despite all those challenges in 9 months right so we will be close to 19:56 19 minutes, 56 seconds that number uh we in fact this quarter can be stronger and it all depends on uh like how the the I mean if we feel 20:04 20 minutes, 4 seconds nothing is going to happen we can release the the goods and from US bonded warehouse which will reflect in our sale 20:12 20 minutes, 12 seconds so we can reach to the numbers what we did uh last year because we are already at the same number in 9 months 20:20 20 minutes, 20 seconds and last question when it goes yes given the scenario that nothing happens but if you talk of the sales 20:27 20 minutes, 27 seconds definitely it will have a 15 to 20% % uh CGR growth next year because this year we have tried to curtail everything but we'll find other ways we have we have 20:36 20 minutes, 36 seconds found or we are finding other ways uh to to continue this growth right sure that's nice to use and last 20:43 20 minutes, 43 seconds question from my side with regards to the new PPS unit which has come in so what is the current utilization and what 20:50 20 minutes, 50 seconds kind of ramp up we see going ahead in next two three quarters two to four quarters yeah so uh ppf also like right now it is 21:00 21 minutes uh running around 65% uh uh utilization rate and going sorry sir this new line I'm talking only 21:08 21 minutes, 8 seconds about the new line new line I'm talking uh 60 it is running 55% capacity old line is running full 21:16 21 minutes, 16 seconds but uh the thing is uh that is again uh if you really see we are growing very strong in uh certain regions uh that is 21:25 21 minutes, 25 seconds Middle East, North Africa, India uh and there is definitely PPF being a high value. If you really see uh the absolute 21:34 21 minutes, 34 seconds price of PPF versus absolute price price of sun control, PPF is at a much higher uh prices, right? Absolute pricing. So 21:42 21 minutes, 42 seconds the duty impact, tariff impact is pretty high. So we are seeing some challenges from the US market. Despite that uh this 21:50 21 minutes, 50 seconds capacity is right uh currently 65% uh utilized. 21:56 21 minutes, 56 seconds Sure. Thank you so much sir and all the best. Thanks. Thank you. 22:03 22 minutes, 3 seconds Thank you. The next question is from the line of Vir from Carl Carelian Asset Management. Please go ahead. 22:12 22 minutes, 12 seconds Thank you for the opportunity. Am I audible sir? Yes. 22:17 22 minutes, 17 seconds Yeah. So the first question is probably if you could give me some uh insight on this quarter growth in terms of US and 22:24 22 minutes, 24 seconds non US and also 9 monthly for US and non US growth. 22:28 22 minutes, 28 seconds Yeah. So uh US is like uh uh I mean same quarter if you see last year there was 22:36 22 minutes, 36 seconds almost 40% uh 43 44% was sale was to us this uh I mean this year uh I mean Q3 22:44 22 minutes, 44 seconds FY26 it is around 40%. So there is a marginal 3% drop but that all has 22:51 22 minutes, 51 seconds already been more than that is already there in the warehouses to be sold I mean against orders. So real sale we'll 22:59 22 minutes, 59 seconds see a 3% degrowth in uh this market uh in US market but in absolute terms it has grown because we have dispatched the 23:09 23 minutes, 9 seconds material against orders but not yet I mean it is it is in the bonded warehouse and waiting to be invoiced. So that's why we have maintained like I've been 23:17 23 minutes, 17 seconds saying we have controlled the sales uh to avoid any impact. So 43 and 40%. Then if you talk of other geography like 23:26 23 minutes, 26 seconds Middle East was uh used to be around 4% last year it has crossed 8% already in 9 23:32 23 minutes, 32 seconds months right and EU has been stable uh around 10 to 11%. And India uh around uh uh 25%. 23:44 23 minutes, 44 seconds Uh so you said Middle East EU and India numbers are for 9 months right? Yeah. So what will be the 9 months? Two months. 23:52 23 minutes, 52 seconds Three months. Three months. You asked for the last quarter. So I'm giving you last quarter numbers. 23:56 23 minutes, 56 seconds Right. And so what will be the 9 month number? It should handy with you. So just a second. 24:03 24 minutes, 3 seconds Yeah, numbers are similar because we have started seeing uh this kind of trend uh since if you remember the March 24:11 24 minutes, 11 seconds this tariff thing started. So almost the same numbers. 24:17 24 minutes, 17 seconds Got it sir. Just a follow up on the previous I mean you can ask offline but the numbers are similar so I gave you absolute exact numbers of uh Q3 uh versus last year. 24:28 24 minutes, 28 seconds Sure sir I'll leave it offline. uh this uh a strategic uh understanding if I wanted to understand on the previous participant question uh he was asking in 24:37 24 minutes, 37 seconds terms of the uh inventory at the channel level at in in you know a different geographies since uh Q3 was the first quarter with 24:46 24 minutes, 46 seconds 50% tariffs at strategic level uh how are we looking at production uh in a normal versus a tariff environment at 24:54 24 minutes, 54 seconds what kind of inventory levels are we maintaining in a normal versus tariff environment so we just wanted to understand that like what is the range 25:02 25 minutes, 2 seconds between the two how have we pivoted to navigate the tariffs because you know we've been doing an exceptional job with our margins. 25:10 25 minutes, 10 seconds Yeah. So uh if had there been uh no tariffs so our inventory levels remained 25:17 25 minutes, 17 seconds roughly 1 month in US and around 1 month in transit. So it's like a 60 days inventory you can say at at uh our 25:26 25 minutes, 26 seconds warehouses plus in transit from India right so this ranges between uh I can say 60 to 75 days right now if you add 25:36 25 minutes, 36 seconds everything so this goes uh almost uh I can say uh more around 100 days I mean it's like uh 25:44 25 minutes, 44 seconds you can just see 60 days versus 100 days so there is like 30 40 days more inventory is lying uh with us in the 25:52 25 minutes, 52 seconds warehouse. I mean transit remains the same only in the warehouse in inventory has been increased and that has been done purposefully. 26:03 26 minutes, 3 seconds Got it. So and how are we looking at the production levels I mean capacity utilization across the lines in a tariff and non-tariff environment. 26:11 26 minutes, 11 seconds Yeah. So now in case of uh like uh current situation u so India I mean the 26:18 26 minutes, 18 seconds the manufacturing and everything lines are running full and uh having like we we are not changing anything at the at 26:26 26 minutes, 26 seconds the level of production because orders flow is good and lines are being utilized at optimum level. However, we 26:33 26 minutes, 33 seconds only control at the uh uh customer uh as at a warehouse level in USA. As I told you, the aim was not to lose any customers. So, all the orders are there. 26:44 26 minutes, 44 seconds Only release of the material just to uh to see any kind of gain in 30 40 days will fetch us additional revenues. Uh 26:52 26 minutes, 52 seconds so, that's why we are keeping it like that. So, 30 40 days more inventory at the uh uh warehouse level. However, 27:00 27 minutes factory is continuously producing as per the requirement because we we are we only produce against orders and we are we have enough orders for this quarter and uh going forward. 27:11 27 minutes, 11 seconds So just a follow up on that uh you know currently growth is a little bit muted you know because of the tariff situation 27:19 27 minutes, 19 seconds if we are maintaining a lines at full you know for the you can say last one and a half quarters there would be some time where you know production would 27:28 27 minutes, 28 seconds kind of reduce if the tariffs don't go away anytime soon over the next two quarters. So that time would we have to revise the strategy or we continue in 27:36 27 minutes, 36 seconds the same thing because your anticipated demand growth is strong. So despite 100 inventory levels, you're seeing growth 27:43 27 minutes, 43 seconds at you know 15 20% for stronger Q4 and Q1. 27:48 27 minutes, 48 seconds Yeah. So um uh like I said there are some other alternative ways are uh being 27:56 27 minutes, 56 seconds worked where uh you know if we can mitigate the impact of in this tariff but at the same time even if it 28:04 28 minutes, 4 seconds continues we are maintaining uh the margin like uh uh this quarter if you see being uh the seasonally low quarter 28:12 28 minutes, 12 seconds we have almost touched I can say close to 20%. Right? So uh given a situation like this remains and nothing else 28:20 28 minutes, 20 seconds happens of course there will be many factors will change geopolitical situation tariff situation and our situation to cater the market. So there 28:28 28 minutes, 28 seconds will be all three places there will be definitely uh some changes right but let us assume nothing happens like nothing 28:35 28 minutes, 35 seconds changes still are we will maintain a growth of 15 20% because we will not hold inventory in in um in our 28:43 28 minutes, 43 seconds warehouses we will do whatever sales naturally happening which we which is at the rate of 15 to 20% caggr right so why 28:51 28 minutes, 51 seconds do we uh curtail then our productivity we'll continuously grow because we are still making margins on that 29:01 29 minutes, 1 second right so this last question I get back in Q uh so for Q3 uh I think the CF said that you know our margins in the range 29:08 29 minutes, 8 seconds of 18%. Uh if I just remove the other income portion and just look at you know AITA without excluding other income 29:15 29 minutes, 15 seconds in the range of 15 15%. Uh just wanted to know that uh in in our think tank on the drawing board when we look at all 29:23 29 minutes, 23 seconds the possible scenarios in terms of downside do you see that if a challenging environment persists going ahead the margins can see further 29:31 29 minutes, 31 seconds decline because of uh stressful demand environment in in especially US? 29:38 29 minutes, 38 seconds No. Uh because as I'm saying uh this the scenario for Q3 is always different because it's the seasonally low. Every 29:46 29 minutes, 46 seconds year Q3 is like that. So if we see Q1 and Q2 are strong seasonal season for 29:53 29 minutes, 53 seconds us. So the margin will definitely improve that directly linked to more IR production or high margin products in uh 30:03 30 minutes, 3 seconds Q1 uh sorry in Q4 and Q1 right. So uh the the margin maintenance definitely uh 30:10 30 minutes, 10 seconds uh will improve. Now the question of uh uh your question was uh like yes uh if 30:19 30 minutes, 19 seconds this situation remains we continue to produce. However there are some strategies which are being worked out or 30:27 30 minutes, 27 seconds uh to uh you know to mitigate the impact to some extent. So that definitely will come. We are not uh I mean we all the 30:36 30 minutes, 36 seconds time working on this situation like how do we navigate through this situation though everyone of us including our exporters thought it's a short-term 30:44 30 minutes, 44 seconds phenomena but we are prepared for a long-term as well like like that remains that becames stable at 50%. Then too we 30:52 30 minutes, 52 seconds will maintain 20 plus uh margin and the with the sales growth of 15% bare minimum at CR level. 31:02 31 minutes, 2 seconds Thank you so much for all the very best. I'll get back in. Thank you. 31:10 31 minutes, 10 seconds Thank you. The next question is from the line of J from Philip Capton. Please go ahead. 31:17 31 minutes, 17 seconds Hi. So just two quick questions. One is on the product mix compared to Q2 with respect to your window films PPF and 31:24 31 minutes, 24 seconds IPD. Has that stayed stable or is there any change in that mix? And the second one is with respect to architectural 31:31 31 minutes, 31 seconds films. How has the growth been in that area and like what sort of revenue can we expect over the next couple of years? 31:40 31 minutes, 40 seconds Yeah. So uh uh in in in the question of product wings right so uh what happens 31:47 31 minutes, 47 seconds is uh in Q3 uh this normally the the lower range of window films sell more 31:55 31 minutes, 55 seconds right. So uh in when it goes to towards high season more IR product demands comes which is near infrar uh infrared 32:04 32 minutes, 4 seconds blockage of the films. So they tend to have very special films with our nano particles into that. So that generally 32:13 32 minutes, 13 seconds carries a high margin as compared to the mix. So that's why we are talking of product mix in Q3 versus Q Q2 and of 32:21 32 minutes, 21 seconds course in Q4 as well. So Q4 goes better in terms of uh product uh mix right. So 32:28 32 minutes, 28 seconds that is a general phenomena with us with under certain uh variables right it goes 32:35 32 minutes, 35 seconds up in um uh to extreme in Q1 and slightly lower in Q2 extremely low in Q3 32:42 32 minutes, 42 seconds then again goes back in Q4. So this is the phenomena which we always track and we are well under control uh for that 32:50 32 minutes, 50 seconds particular thing in uh going ahead right so that's uh and uh what was the second question sir 32:57 32 minutes, 57 seconds so with your architectural films I just want to understand like how has the growth been in that segment and is there any ballpark revenue which we can expect 33:05 33 minutes, 5 seconds in that segment over the next two or three years. Yeah. So if you see um I mean uh we are roughly we started this 33:13 33 minutes, 13 seconds architectural journey at around 10% of our uh total uh uh CPD sale right which 33:21 33 minutes, 21 seconds was roughly uh 15 cr uh last year 1500 cr last year right so uh so now 33:28 33 minutes, 28 seconds currently we are at around 20 to 23% of architectural sales but with ultimate 33:34 33 minutes, 34 seconds aim is to reach around 30% of that uh so from current level of uh 300 cr plus we 33:43 33 minutes, 43 seconds will reach in uh next uh I mean by next financial year to around 400 and then 33:50 33 minutes, 50 seconds 500 cr out of it okay sir got it thank you I'll just jump back in queue if I have any further 33:56 33 minutes, 56 seconds questions thank you thank you the next question is from the 34:03 34 minutes, 3 seconds line of mad kandi from investment private limited please go ahead Yeah, thanks for the [clears throat] 34:10 34 minutes, 10 seconds opportunity. Uh, just a couple of questions on the UAE plant. Uh, you said that it will be commissioned in Q4 26, is it? Am I right? 34:21 34 minutes, 21 seconds Yeah, that's the subsidiary. Yes. 34:24 34 minutes, 24 seconds Uh, no, the plant, the manufacturing plant will be commissioned in Q4. 34:28 34 minutes, 28 seconds We have not announced any plant uh in UAE, right? uh to be very precise there 34:35 34 minutes, 35 seconds are uh some plans uh uh which are uh we are working but uh this is uh as of now 34:44 34 minutes, 44 seconds it's only a subsidiary which will cater the business to Mina region and other exported to other region it will be a trading subsidiary 34:52 34 minutes, 52 seconds primarily uh yes as of now to start with it will be a trading subsidiary okay secondly on your gas studios now 35:00 35 minutes that you have more than 250 are They operationally profitable. Yes. 35:06 35 minutes, 6 seconds Uh also they contribute to the bottom line profitable but they are not standalone ones. They are the ones which are with 35:13 35 minutes, 13 seconds other product lines like uh auto accessories and all but they are profitable. I mean because 35:20 35 minutes, 20 seconds in retail it is okay. Uh and in as far as your US uh tariff impact is [clears throat] 35:28 35 minutes, 28 seconds concerned uh in this quarter did you see any prices uh getting dropped because you were absorbing the cost or how was 35:38 35 minutes, 38 seconds it or did you maintain the price and absorb the cost? See uh we we are like uh the 35:47 35 minutes, 47 seconds tariff impact like I said is 50% additional in that case u uh in the 50% 35:55 35 minutes, 55 seconds we absorb uh most part of it but there is some portion which is being passed on 36:01 36 minutes, 1 second to our uh customers right so we cannot specify the number because that lot of questions come to us like on the parity 36:10 36 minutes, 10 seconds and all those thing on theation advantage right So one portion is passed on another portion is absorbed on but we 36:18 36 minutes, 18 seconds have mitigated that successfully. Again if you see the numbers of Q3 like our uh 36:25 36 minutes, 25 seconds on the sales uh of that particular amount which we sold to USA which is 40% of total sale right out of that if we 36:34 36 minutes, 34 seconds add roughly 40% of the tariff and minus whatever has been passed on so there has 36:40 36 minutes, 40 seconds to be a 50 cr impact on pvt right which we did not see we saw only 7 to 8 crore 36:47 36 minutes, 47 seconds impact so we have successfully navigated ed by our efficient uh manufacturing process and efficient uh you know 36:55 36 minutes, 55 seconds product mix strategy and some of the products which uh we diverted to the territory where it was going to USA then 37:03 37 minutes, 3 seconds being diverted to other product other territories we have really managed that well by sending it to like reexported 37:10 37 minutes, 10 seconds cargo kind of things so lot of strategies has made us to navigate the impact of roughly 40 cr for the quarter 37:19 37 minutes, 19 seconds so So that's how it has gone to like a PBT level of 73 74 cr. So that's how we managed it. Yeah. 37:28 37 minutes, 28 seconds Basically what you're saying is there was a 50 cr downside but you managed 40 crores from other areas to make it 37:35 37 minutes, 35 seconds not. Yeah. There was a possible if we really pay all the duty and everything of course we pay the duty but I'm saying 37:42 37 minutes, 42 seconds if we if you see plain and simple you have a product sale and you have this additional duty you would have that kind 37:49 37 minutes, 49 seconds of impact but we successfully navigated through by passing on to something and then uh mar efficiency improvement 37:57 37 minutes, 57 seconds product mix change and all those and selling to the territories where earlier it was going through USA now directly going all those strategies we have worked out to mitigate that impact. 38:09 38 minutes, 9 seconds Okay. Just one last question. Uh given the fact that this uncertainty in US is going to continue for the next 2 three years uh till the time this present government is there. 38:19 38 minutes, 19 seconds Yeah. 38:19 38 minutes, 19 seconds Uh would you what are your plans to expand in other areas? Have you accelerated those? And which are the areas that you're looking at in expansion? 38:29 38 minutes, 29 seconds So first and foremost we have grown uh really well in Middle East region. So we have uh I mean the sales which was last 38:37 38 minutes, 37 seconds year versus this year has doubled. If you see last three years uh two years where a tariff was not seen but if we uh 38:44 38 minutes, 44 seconds if we compare versus two years versus uh to now it's the growth has been almost uh three to four times right in terms of 38:54 38 minutes, 54 seconds sales uh from that particular region from Middle East North Africa region. So that is continuously growing and uh we 39:01 39 minutes, 1 second are also growing in the markets like China. There are a lot of uh plans where uh there uh there is like we are doing 39:09 39 minutes, 9 seconds partnership with some top players uh to gain advantage of that market because our product is really good. Only thing 39:15 39 minutes, 15 seconds is we have to like uh our brand global really does uh well there. So that area we expect to grow really well and um 39:24 39 minutes, 24 seconds even in US like I said in terms of orders and everything we are continuously growing we are targeting we are taking a shareh from top of the PS. 39:34 39 minutes, 34 seconds So that growth is also there. So any moment any positive thing from USA even 39:40 39 minutes, 40 seconds if it is 25% will really uh I mean be a great uh uh thing for us but even if uh 39:49 39 minutes, 49 seconds we assume that 50% is going to remain there we are confident that we will navigate through really well in uh Q4 39:58 39 minutes, 58 seconds and then next year onwards because we have strategies in place which will be announced shortly. 40:05 40 minutes, 5 seconds Okay. And lastly uh does this uh impact your white labeling uh business or is it impacting your brand business tariff? 40:14 40 minutes, 14 seconds See it impacts both because the uh you know the tariff is applicable for both. 40:20 40 minutes, 20 seconds Uh but if you really see on white labeling there are there are possibilities because white labelled people sell all 40:28 40 minutes, 28 seconds around the world as well. So we are directly selling them from India. So in that case we are able to you know 40:35 40 minutes, 35 seconds distribute uh uh this thing really well without it does not go to US uh yeah territory. 40:44 40 minutes, 44 seconds Yeah thanks a lot. Thank you for your answer. Thank you. 40:50 40 minutes, 50 seconds Thank you. The next question is from the line of Priyank Agarwa from Equestria Securities. Please go ahead. 40:59 40 minutes, 59 seconds Hi sir. Thank you for the opportunity. Thank you and honorable. Yes. 41:05 41 minutes, 5 seconds Yeah. So my question is that in CQ we have seen uh uh revenue stable uh despite that the margins have declined. 41:14 41 minutes, 14 seconds So so how the how the margin was impacted like because of the temporary investments D2C during subsidiary 41:21 41 minutes, 21 seconds branding or like was or it was because of the structural cost pressures and in the coming quarters. So how do you see the beta margins going forward? 41:31 41 minutes, 31 seconds Yeah. So u uh see uh AITA margin the uh the primary reason is of course tariff situation in US which was 50% 41:40 41 minutes, 40 seconds additional. So like I explained had that not been there we would have really done well but we have to accept the fact whatever it is it is right. So that's 41:49 41 minutes, 49 seconds number one. Number two in uh in Q3 our margins are usually in this range only 41:57 41 minutes, 57 seconds like u 18.59 90%. But uh they when the seasonal mix changes it will improve it 42:05 42 minutes, 5 seconds will go 20 plus uh easily with even with 50% uh tariffs right that is number two. 42:11 42 minutes, 11 seconds Number three, we are doing lot of activities like um we have opened like direct to customers uh global 42:18 42 minutes, 18 seconds application studios in Middle East. Two of them has been opened in last last week and uh there are more in 42:26 42 minutes, 26 seconds pipeline. So that will really boost our brand image and uh direct to consumer business where margins are good with the 42:35 42 minutes, 35 seconds brand visibility. Then we are doing gervare home solutions in India for we just launched one in uh Mumbai but there 42:43 42 minutes, 43 seconds will be many more to come. So that will again uh create the demand in India market. Then Gwar application studios 42:51 42 minutes, 51 seconds which are 250 right now and will reach to 300. So this is again direct to sale and in US market also we are signing up 42:59 42 minutes, 59 seconds lot of such studios which uh we are in the process of doing so. So that will also boost our sales and profitability 43:06 43 minutes, 6 seconds in US market when we go directly to consumer. Right? So all those uh things we are actually if you really see the 43:14 43 minutes, 14 seconds company's focus is to become more of a consumer-driven if you see each and um every steps of uh ours which is Gervar 43:22 43 minutes, 22 seconds application studio, global application studio, Gwar home solution, global home solutions. This will really really uh we 43:30 43 minutes, 30 seconds are trying to become more as a consumer brand than as a you know uh B2B kind of uh business. 43:43 43 minutes, 43 seconds Thank you. And my uh one more question I have regarding home solutions. What is the revenue model here? I mean in terms 43:51 43 minutes, 51 seconds of franchising versus company own and what kind of capex you are looking at this and the opex if you want the scale 43:59 43 minutes, 59 seconds do to see over the next two to three years. 44:01 44 minutes, 1 second Yeah. So see I can give you some highlights of that that uh we um I mean the gware home solution means the model 44:10 44 minutes, 10 seconds is uh uh this is like a channel which is e-commerce based uh model right. So their consumers will directly pay to the 44:19 44 minutes, 19 seconds company and company will uh have those uh franchisee models or those I would say outlets where they do the work 44:28 44 minutes, 28 seconds applications and others and they will be paid accordingly right so it is full under garvar uh company's control right 44:37 44 minutes, 37 seconds right from their database till uh payment and everything but it is more of a like I said it's a ecommercebased 44:45 44 minutes, 45 seconds model Because physically it is this model cannot work because the ticket size are very small but the number of 44:52 44 minutes, 52 seconds consumers are enormous right so that's the primary model and these platforms and everything have been created but 45:00 45 minutes still into the testing models or testing modes now on cipex there is hardly any capeex into that because company already 45:08 45 minutes, 8 seconds does these kind of products uh the main products are sun control film surface protection film for your furniture, for 45:17 45 minutes, 17 seconds your kitchen sink and etc. There will be more products like uh switchable films, there are some coatings which are 45:25 45 minutes, 25 seconds required for the home. So this most of the products uh company already makes but it needs a different kind of 45:33 45 minutes, 33 seconds attention which we are doing. It's a mainly a selling platform uh selling and a branding platform for the company. 45:47 45 minutes, 47 seconds Mr. 45:50 45 minutes, 50 seconds Thank you for Okay. Thank you ladies and gentlemen. In order to ensure that the management will be able to 45:58 45 minutes, 58 seconds address questions from all the participants in the conference. Kindly limit your questions to two per participant. Should you have a follow-up 46:06 46 minutes, 6 seconds question, please rejoin the queue. The next question is from the line of sweatsh from ANS12. Please go ahead. 46:14 46 minutes, 14 seconds Uh hi sir, thanks for giving this opportunity. Sir, I have a couple of follow-ups actually because most of my questions have been answered. Uh so my 46:23 46 minutes, 23 seconds first question is uh regarding the Dubai subsidy. Uh I believe you said that right now what we are looking at is 46:30 46 minutes, 30 seconds mainly from a trading uh point of view to cater to those geographies. But I also heard you saying that you know we 46:37 46 minutes, 37 seconds might set up a manufacturing uh uh kind of a unit uh somewhere uh you know down 46:44 46 minutes, 44 seconds the line. So if we ever decide to set up a manufacturing plant outside India, I wanted to understand would it be in this 46:52 46 minutes, 52 seconds subsidiary or any other geography that we are looking at? So see uh uh first of all like u uh the 47:01 47 minutes, 1 second basic thing is if you really see uh versus our uh uh uh the tax proposition and the growth into that uh region. So 47:10 47 minutes, 10 seconds uh the growth has been really great. So that's why it makes a very obvious uh choice for us to open a subsidiary 47:17 47 minutes, 17 seconds because we have tripled our numbers in 3 years and much more to come because we are signing good agreements with top 47:25 47 minutes, 25 seconds companies in in uh real estate and architectural space. So the business is growing then it is like ideal for the 47:35 47 minutes, 35 seconds duty structure in the free zone right and uh uh that's one and third is there are opportunities to export from these 47:43 47 minutes, 43 seconds reasons [snorts] uh uh at a good uh these things so these uh setups are being made the details we are like you 47:52 47 minutes, 52 seconds know the subsidiary opening is uh pretty fast and this will happen in next one or two months but there are other actions 47:59 47 minutes, 59 seconds onto at like you know the manufacturing means what kind of manufacturing there are couple of options there which has 48:07 48 minutes, 7 seconds being evaluated and being worked out right so there is no timeline and there is no commitment from us as of now but 48:14 48 minutes, 14 seconds definitely it is it is making uh we are making uh the decision in in a way to take maximum advantage of that reason 48:23 48 minutes, 23 seconds plus other geographies in terms of uh you know uh the like taxation and other purposes exist and growth is the 48:31 48 minutes, 31 seconds forefront of everything the company growth numbers in that region. Yeah. 48:36 48 minutes, 36 seconds But it also mean that once we start manufacturing here we can also sell it to us and then would it also help us uh 48:43 48 minutes, 43 seconds from a tariff point of view is what I wanted to understand. electricity. 48:47 48 minutes, 47 seconds See, I will answer in this way. The on if uh I mean uh see Middle East is very near to us, right? So, setting up a 48:55 48 minutes, 55 seconds facility to sell in Middle East is uh maybe one of the reason. But uh you know the main thing is uh not uh the like 49:04 49 minutes, 4 seconds looking into the geopolitics and everything that's like we are in India and one one thing in middle east always 49:12 49 minutes, 12 seconds makes good sense for us to reduce the geopolitical you know uh impact or uh uh to reduce 49:21 49 minutes, 21 seconds that impact to us. So that's very important. So that's why we are working on this. But uh as of now I can't say this much only we will whatever is there 49:31 49 minutes, 31 seconds we will announce uh properly and let you know as of now we are opening a subsidiary that's that's very open and we are exploring all opportunities we 49:39 49 minutes, 39 seconds are not like we said we have maintained like 18 to 19% AITA margin which will go to 20 plus but of course we want to go 49:48 49 minutes, 48 seconds back to the numbers where we were like 25 plus - 2% so ultimate goal is that so we have to reach there and we will do that. 49:57 49 minutes, 57 seconds So this AIA margin the 20 plus that you're saying this includes the other income right? 50:02 50 minutes, 2 seconds Uh margin right is is considering the other income right is what I want to understand. Yes. 50:10 50 minutes, 10 seconds Understood. And so my uh sorry to interrupt sorry to interrupt please raise for more question. This is my second question. Sorry. 50:19 50 minutes, 19 seconds Okay. Go ahead. Question go ahead please. 50:22 50 minutes, 22 seconds Yeah. And my second question was so just want to understand on the architectural side how much we are planning to invest 50:29 50 minutes, 29 seconds uh you know in this business in terms of people uh in terms of the marketing if you could just broadly help us understand our overall strategy for this 50:38 50 minutes, 38 seconds business in the medium term or also in in the in the you know the long term like what geographies and what products 50:45 50 minutes, 45 seconds and you know what kind of revenue potential this business can have for us over 3 four years and margin guidance for this business specifically and what 50:55 50 minutes, 55 seconds kind of ROI can we get from this business? There are seven eight questions for me. Okay. 51:03 51 minutes, 3 seconds Yeah. 51:04 51 minutes, 4 seconds Give us two questions to ask. So what to do? 51:06 51 minutes, 6 seconds No problem. I'm happy to answer. I'm happy to answer. So let me tell you the journey like I we said we started 2 years back when uh total business was 51:16 51 minutes, 16 seconds around 10% of total consumer product in architectural business right and right now we are at the level of around uh 22 51:24 51 minutes, 24 seconds to 20 23%. Right. So how we have grown and what are the strategies to grow faster is this and architectural 51:33 51 minutes, 33 seconds products are little different in nature as compared to automotive. Karwi is very strong in automotive business but with slight change investment which we have 51:42 51 minutes, 42 seconds already done um in uh last two years uh in new lamination line is helping us to 51:48 51 minutes, 48 seconds grow in this business. So there were uh you know architectural business needs many kind of products that includes uh 51:57 51 minutes, 57 seconds your sun control which is which reduces the heat and controls the glare reduces the ultraviolet rays UV rays to avoid 52:06 52 minutes, 6 seconds the cancer and then there are safety security films that means whenever you are seeing the school colleges banks 52:14 52 minutes, 14 seconds which are high-rise especially in the markets like USA so there they needs a very high protection from the so these are safety films. This 52:22 52 minutes, 22 seconds may be transparent in nature, colored in nature, but nobody should fall from that height or no even in some cases from the 52:30 52 minutes, 30 seconds distance range nobody should get hurt if there is a shooting on such incidents like in USA [clears throat] right so the and one 52:38 52 minutes, 38 seconds more thing is there are certain products which are decorative in nature like interior decoration and all those things 52:45 52 minutes, 45 seconds so so now so these kind of product range like 3 four years we were missing but last Here everything has been completed. 52:53 52 minutes, 53 seconds We have a complete range of products. 52:55 52 minutes, 55 seconds Right? If you ask any of out of uh these products they are available and manufactured by us. Uh because of this 53:04 53 minutes, 4 seconds we have been able to attract good distributors in USA, Middle East and other reason we were from the who were 53:12 53 minutes, 12 seconds uh doing the business with the top of uh like our peers right. So we uh they have we have attracted them because of our 53:21 53 minutes, 21 seconds entire product list. Then our pricing because we make uh end to end products by ourselves that means all we are fully 53:29 53 minutes, 29 seconds backward integrated for all those uh products. So we have like a competitive advantage in terms we don't we are not 53:36 53 minutes, 36 seconds far off I'm talking of only 10 to 15% as the prices. So we have like a full range of product and uh at a best um I would 53:45 53 minutes, 45 seconds say pricing best distributors in Middle East, USA and India from our peers they have moved to us and the last and not 53:53 53 minutes, 53 seconds the least is the team which was like earlier there used to be only one team. 53:59 53 minutes, 59 seconds Now we have like a separate architectural teams all around the world that includes in USA we have a top 54:06 54 minutes, 6 seconds person from a peer group. uh he has really done well and got some big distributors uh converted to our brand. 54:14 54 minutes, 14 seconds Same in Middle East. We are growing and one of the b major growth area is architectural there and in India we have 54:22 54 minutes, 22 seconds done almost all top hospitality, hotels in India and uh all kind of all airports, railways and everything we are 54:31 54 minutes, 31 seconds working under this uh this uh segment and one of the most important thing like I 54:37 54 minutes, 37 seconds said there is people good resources from our competition. Um then uh we have all product lines, we have good pricing. So 54:46 54 minutes, 46 seconds this is really uh working uh really well for us. If you see the revenue size if we go the whenever like uh we are 54:55 54 minutes, 55 seconds targeting now around 500 cr by FY27 and I can say like similarly if we talk 55:02 55 minutes, 2 seconds of all by FY30 we have an aim ambition to make it to around 1,000 cr with the with Gwari home solution in it. 55:11 55 minutes, 11 seconds Okay. Okay, thank you. Thank you. So this really helps a lot. Really appreciate this sir. 55:16 55 minutes, 16 seconds Yeah, thank you. Thank you. 55:21 55 minutes, 21 seconds The next question is from the line of Suji Jin from Opportune Wealth Advisory. Please go ahead. 55:29 55 minutes, 29 seconds Hello. Am I audible? Yes, you are. 55:34 55 minutes, 34 seconds Yes. Thank you so much uh sir for uh taking my question. I want to know more capital and you know other 55:43 55 minutes, 43 seconds sorry to interrupt we are unable to hear you your voice is breaking ma'am am I audible now 55:50 55 minutes, 50 seconds yeah please go ahead yes uh in view of 55:58 55 minutes, 58 seconds the pricing difficulties I wanted to know how this has impacted your uh you know uh working capital 56:07 56 minutes, 7 seconds cycle say have the receivables you know gone up or have your payables been a 56:13 56 minutes, 13 seconds problem? um any cash flow constraints or you know cash cycles extensions um what are you also seeing on the 56:22 56 minutes, 22 seconds competitive side you know while you are finding solutions at your end um what are competitors doing as I understand 56:30 56 minutes, 30 seconds your product is of high quality and you know high price as well it's a premium product um but there are always competitors looking to undercut um and 56:39 56 minutes, 39 seconds take away share you know when things like this happen so if you could share a little bit on both these aspects Next please. Thank you. 56:46 56 minutes, 46 seconds Uh I'll I'll explain you on the aspect of quality and what our competitors are doing. Right. The other part we'll try 56:54 56 minutes, 54 seconds to answer but the question was not clear. So let me answer you first the competitive landscape. So you know the 57:01 57 minutes, 1 second product which we make it is made out of very high base films which is normally 57:09 57 minutes, 9 seconds available with only few people in the world. And the reason of that is this uh we uh uh we are fully backward 57:16 57 minutes, 16 seconds integrated that means we make our own base fill. We do like metallizing we do the nano dispersion facility and some 57:24 57 minutes, 24 seconds preparation on the base films adhesives and our top coats like surface resident coating and everything uh into window 57:32 57 minutes, 32 seconds films. Right? All those processes have been uh developed inhouse and this has been a work of last 30 years which uh is 57:41 57 minutes, 41 seconds working very uh well for us and the machines and everything has been designed by our engineers with the help of experts from uh big companies who who 57:50 57 minutes, 50 seconds give us uh the machinery but not a single machinery manufacturer is there. 57:54 57 minutes, 54 seconds There are many many involved in that. So there is a big entry barrier if somebody tries to copy right and there are many of them more than 10 patents are there 58:03 58 minutes, 3 seconds which are like very essential part of our manufacturing right so this is what we are now and that's how like many uh 58:12 58 minutes, 12 seconds companies around the world who want to partner with us to have our basic films but we uh we have chosen the path to 58:21 58 minutes, 21 seconds growth by ourselves right so and uh if you see the journey In last four five years we have shown the kind of growth 58:30 58 minutes, 30 seconds we can do with our products right uh and the so if you really see the product comparison if we do it's only with some 58:40 58 minutes, 40 seconds of the US manufacturers right and we have partnership with many of such manufacturers as a white box in USA 58:47 58 minutes, 47 seconds right so there is very limited there are very limited people who make similar films like us but fortunately for us 58:56 58 minutes, 56 seconds unfortunately for that this the growth in US market for manufacturing um is is 59:03 59 minutes, 3 seconds really challenging they are not able to grow that fast uh in that market so in terms of manufacturing capability so 59:12 59 minutes, 12 seconds there we are coming into picture and we have lot more opportunities where we are filling the gap by supplying to them or 59:19 59 minutes, 19 seconds looking for opportunities where uh we can do some kind of partnership with them into these advanced markets. 59:27 59 minutes, 27 seconds Okay, got it. So sir my first question was about um how the pricing and the environment on the buyer side has 59:36 59 minutes, 36 seconds changed sort of your u you know selling power if you say pricing power we know about but say you know credit cycles 59:44 59 minutes, 44 seconds have they got extended at any part of your uh working capital is under pressure anything if you could share internally how this has impacted you and 59:54 59 minutes, 54 seconds your negotiations so to say with existing or old clients. New client sorry. 59:59 59 minutes, 59 seconds Yeah. So uh actually um nothing has changed let me tell you because of this situation because uh like we said we 1:00:06 1 hour, 6 seconds have managed this situation by our operational efficiencies. All right that is product makes making the product with 1:00:15 1 hour, 15 seconds higher efficiencies and everything and plus only a limited tariffs limited tariff impact has been passed on 1:00:23 1 hour, 23 seconds to our uh customers. Right? rest we have absorbed by the way which I just told you. So no change in terms of credit or 1:00:33 1 hour, 33 seconds these thing has changed. We are like uh the cash flow is really strong and we don't have any such challenge uh with 1:00:40 1 hour, 40 seconds us. No change has uh we did not so we did not witness uh any degrowth. 1:00:46 1 hour, 46 seconds Whatever we are seeing here is already we have orders but we are keeping the material so that any whenever it is like 1:00:54 1 hour, 54 seconds just in time kind of model we are working now in US. So no sale drop has happened no customer has been lost right 1:01:01 1 hour, 1 minute, 1 second only the impact slight impact which we are seeing on our margins which is uh quite well and open but the growth has 1:01:08 1 hour, 1 minute, 8 seconds uh is there and will remain there so no change in that. Okay. And uh just one small question. 1:01:15 1 hour, 1 minute, 15 seconds Sorry to interrupt you. Please rejoin the key for more questions. 1:01:19 1 hour, 1 minute, 19 seconds I'll do that. I'll do that. Thank you so much. Thank you. 1:01:22 1 hour, 1 minute, 22 seconds The next question is from the line of Ankit Gupta from Bamboo Capital. Please go ahead. 1:01:28 1 hour, 1 minute, 28 seconds Uh thanks for the opportunity sir. First uh firstly if you can uh you know we had a sales of around 325 crores for CPD for 1:01:37 1 hour, 1 minute, 37 seconds our consumer division. if you can give us the breakup of uh sun control films and ppf in that uh for Q3 as well as 9 months. 1:01:46 1 hour, 1 minute, 46 seconds Yeah. So Q3 uh 40% uh of sun control, right? Uh just one second. No, it's a 1:01:54 1 hour, 1 minute, 54 seconds 44% sun control, 24% PPF and 30% of IPD. 1:02:03 1 hour, 2 minutes, 3 seconds Okay. Okay. Okay. In fact uh uh the other question I wanted to ask was you 1:02:10 1 hour, 2 minutes, 10 seconds know when you say 65% capacity utilization of the new PPF line also this is primarily because our PPF sales 1:02:17 1 hour, 2 minutes, 17 seconds have largely remained flat on a 9month basis and uh so uh we would have you know the the the SCF facility that we 1:02:26 1 hour, 2 minutes, 26 seconds were utilizing for manufacturing the PPF that would have now moved to the new PPF line and we would have uh you know more spare capacity on the SCF side. So is that the right understanding? 1:02:37 1 hour, 2 minutes, 37 seconds Yes. Uh I mean uh the whatever we were running like 130 140% in old line with 1:02:44 1 hour, 2 minutes, 44 seconds the help of uh sun control lines. So you are bang on that now we have moved all the product to PPF line and all the sun 1:02:52 1 hour, 2 minutes, 52 seconds control is there. So both lines are growing on their own. Both both uh plants I mean there are five odd plants 1:02:59 1 hour, 2 minutes, 59 seconds in sun control line and two plants in PPF. Both are running on their own. 1:03:04 1 hour, 3 minutes, 4 seconds That's why we are seeing uh this growth as a uh minimal growth or I would say but as I said the real one of the real 1:03:12 1 hour, 3 minutes, 12 seconds reason is US market uh the ppf prices absolute prices are very high so impact of tariff on ppf seems to be pretty high 1:03:21 1 hour, 3 minutes, 21 seconds as compared to sun control because absolute prices of sun control are lower as compared to ppf right so that's why 1:03:28 1 hour, 3 minutes, 28 seconds so the so ppf challenges are more but despite that our growth in markets like India, Middle East, Europe and other markets has been really really good. 1:03:38 1 hour, 3 minutes, 38 seconds South America for PPF uh which has taken the burden uh offset the uh difficulties of the US market. 1:03:49 1 hour, 3 minutes, 49 seconds Sure. So when we looking for sorry to interrupt us please for more question. 1:03:54 1 hour, 3 minutes, 54 seconds This is the part of the second question only. So when we look for expansion sir now will we be expanding on the PPF side or SCF side? uh 1:04:02 1 hour, 4 minutes, 2 seconds see if you next we will expand on the first on TPU side. So one TPU plant is coming uh which is barely for one PPF 1:04:11 1 hour, 4 minutes, 11 seconds line. So we will be doing another uh like I mean not yet announced but we will be working once that is successfully done uh the TPU line. So we 1:04:20 1 hour, 4 minutes, 20 seconds can do more of those lines but definitely uh having said that the kind of growth we are seeing despite the tariffs. So if any situation comes uh I 1:04:29 1 hour, 4 minutes, 29 seconds think the next one in line may be sun control but this all as of now we have not decided but since you ask what looks 1:04:36 1 hour, 4 minutes, 36 seconds more plausible for us so looks plausible for us CPU and then sun control and then after that BPA but we are on a good 1:04:44 1 hour, 4 minutes, 44 seconds growth trajectory despite the tariff situation. Okay thank you sir. Thank you. 1:04:53 1 hour, 4 minutes, 53 seconds Thank you. The next question is from the line of Dhanil Desai from Turtle Capital. Please go ahead. 1:05:01 1 hour, 5 minutes, 1 second Uh hi, good afternoon team. Uh and congratulations for a very good set of numbers in this environment. Uh so 1:05:08 1 hour, 5 minutes, 8 seconds Deepak, the first question is on the TPU side. I think we have reserved the 25% capacity for the new product. So uh I'm 1:05:16 1 hour, 5 minutes, 16 seconds sure that uh you know now because next year it will get uh commercialized the PPU line. Uh if you can 1:05:24 1 hour, 5 minutes, 24 seconds take care of Yeah. 1:05:27 1 hour, 5 minutes, 27 seconds Yeah. So so so given that if you can talk about the kind of product slate that you have and you know we have a 1:05:34 1 hour, 5 minutes, 34 seconds history of creating large product of the tune of 500 or K like we created PPF then now we are creating architectural 1:05:42 1 hour, 5 minutes, 42 seconds frames. So do we see a product basket where you know one or two products can really scale uh you know to those kind 1:05:50 1 hour, 5 minutes, 50 seconds of numbers uh in terms of potential in terms of positioning if you can elaborate on that maybe without taking names or applications. 1:05:58 1 hour, 5 minutes, 58 seconds Yeah. So u um so just you have we have updated in the call that um October 26 1:06:06 1 hour, 6 minutes, 6 seconds October this calendar year we are starting this plant and uh we have kept around 25% allocated for the new 1:06:14 1 hour, 6 minutes, 14 seconds products that has been done strategically uh to make products for some architectural applications some of the medical applications the R&D is 1:06:23 1 hour, 6 minutes, 23 seconds going on but the idea is uh to make uh because we just don't want to be a backward integration to PPF. Of course, 1:06:31 1 hour, 6 minutes, 31 seconds PPF business is going to grow like anything with this because you know we are expecting by next year with these 1:06:38 1 hour, 6 minutes, 38 seconds favorable trade deals with EU and other markets where the luxury car segment 1:06:45 1 hour, 6 minutes, 45 seconds might see a good booth in sales which will directly impact the numbers of PPF. 1:06:51 1 hour, 6 minutes, 51 seconds that means PPF definitely will grow because PPF sale happens more towards uh cars which are I mean luxury segment I 1:06:59 1 hour, 6 minutes, 59 seconds would say right uh so that will be a very positive impact and at the same time TPU will help us to make the right 1:07:06 1 hour, 7 minutes, 6 seconds product without depending on external quality factors right so we can do lot of uh products lot of innovative 1:07:14 1 hour, 7 minutes, 14 seconds products for existing PPF line that is one way to look at it with margin improvements friends. Okay. So that is 1:07:22 1 hour, 7 minutes, 22 seconds uh one way. Second is uh 25% for making new products and doing R&D for those 1:07:30 1 hour, 7 minutes, 30 seconds products especially in the architectural uh building and medical segment and third once once we are like I think in 3 1:07:38 1 hour, 7 minutes, 38 seconds to 6 month when all operations are streamlined and we are on to that path we'll look for the growth into that uh that area. Yes to answer your question 1:07:46 1 hour, 7 minutes, 46 seconds once again we are aiming at the similar size of uh this uh new vertical uh from 1:07:53 1 hour, 7 minutes, 53 seconds TP and I think uh if I sorry that was my only one single question 1:08:01 1 hour, 8 minutes, 1 second right it was only one question yeah please go ahead quickly yeah yeah yeah so uh so second question I 1:08:09 1 hour, 8 minutes, 9 seconds think you talked about India uh being at 25% of the overall revenue so if you can give some color into in terms of the 1:08:18 1 hour, 8 minutes, 18 seconds architecture ETFs and the IPD and uh you know that's now a substantial number so you know how do we see that growing you 1:08:26 1 hour, 8 minutes, 26 seconds know into next couple of years uh from here yeah so um let me give you the number I 1:08:33 1 hour, 8 minutes, 33 seconds mean ppf is roughly uh I can say uh close to 20% in India market for all ppf I'm talking of ppf in the ppf segment 1:08:42 1 hour, 8 minutes, 42 seconds right so uh because this number looks uh bigger because IPD sale is uh IPD sale is mostly into India right the rest uh 1:08:52 1 hour, 8 minutes, 52 seconds so that's why you always see numbers uh 20% to 25% uh in India market but if I 1:08:59 1 hour, 8 minutes, 59 seconds talk of PPF we have never discussed that but around close to 20% PPF sale happens in India and as you know we have like 1:09:08 1 hour, 9 minutes, 8 seconds created this market there was hardly any market before we entered into India And we still see like with the current 1:09:16 1 hour, 9 minutes, 16 seconds rate uh it is estimated around 1.5% of uh 1.5% of total car sales are being 1:09:24 1 hour, 9 minutes, 24 seconds protected with PPF. We as compared to our around 13 to 15% of the advanced market. So we still see a big headroom 1:09:33 1 hour, 9 minutes, 33 seconds in PPF going forward and with anti-dumping uh investigations already reaching towards it's a it's a final uh 1:09:42 1 hour, 9 minutes, 42 seconds thing. So we expect that will help us to grow our uh you know to grow our market and margins both in India right and TPU 1:09:51 1 hour, 9 minutes, 51 seconds will add a further uh thing to that and these FTAs are going to add higherend 1:09:58 1 hour, 9 minutes, 58 seconds cars which will definitely so we on a long term we we are a player which think like what is going to happen in 3 years 1:10:05 1 hour, 10 minutes, 5 seconds into PPF industry with the help of you know like backward integration these FTAs how do they play out and how do We 1:10:13 1 hour, 10 minutes, 13 seconds stop we are never averse of the competition but we are always mindful of the people who are supplying quality products to the market. They should not 1:10:21 1 hour, 10 minutes, 21 seconds be you know I would say misled by the product which is not in quality but they just play on the prices. So all those 1:10:28 1 hour, 10 minutes, 28 seconds thing will be taken care by this ad. So there are certain strategies which we are working uh to have that main uh top 1:10:36 1 hour, 10 minutes, 36 seconds line top points I have shared with you in prepare. Now if we go to sun control, sun control the the we our major focus 1:10:45 1 hour, 10 minutes, 45 seconds area here is architecture. Of course automotive with given guidance by the government we are doing really good but 1:10:52 1 hour, 10 minutes, 52 seconds on architectural segment like all the top I would say this hospitality industry then consumers 1:11:01 1 hour, 11 minutes, 1 second then jewelry and gems and big malls all are being protected by our sun control. 1:11:08 1 hour, 11 minutes, 8 seconds We are now uh certified or approved in railways in airport authority of India in most of these names which I I won't 1:11:16 1 hour, 11 minutes, 16 seconds be able to take here. All the hospitality industry because what we have done is we are certified we are the only company in India to be certified by 1:11:24 1 hour, 11 minutes, 24 seconds green pro which is government has given that guideline that if you have any building as per the government guidelines so it is recommended to have 1:11:33 1 hour, 11 minutes, 33 seconds a company associated with a green pro certification. So we are the only one in India. Then we are GRIA certified. We 1:11:40 1 hour, 11 minutes, 40 seconds are certified by American Cancer Foundation to avoid cancer and we have certified all our safety films by UK 1:11:48 1 hour, 11 minutes, 48 seconds standards uh TV standards and uh EN standards of America. So you see the lot of work background work goes into 1:11:56 1 hour, 11 minutes, 56 seconds architectural certification product. I explained everything into my previous answer like how did we grow into 1:12:03 1 hour, 12 minutes, 3 seconds architectural business by creating a full range of products creating full team making awareness into the market. 1:12:10 1 hour, 12 minutes, 10 seconds So all those thing will take us this architectural business uh to next level in India and elsewhere right and when we 1:12:18 1 hour, 12 minutes, 18 seconds talk of 25% like you said it is mostly uh like major portion comes from IPD but 1:12:25 1 hour, 12 minutes, 25 seconds our growth engine IPD we strategically keep it as a stable level but the real growth will come from architectural 1:12:33 1 hour, 12 minutes, 33 seconds PPF and uh sun control business and of course we are working with some companies to supply as industrial products. So that will also add to this. 1:12:45 1 hour, 12 minutes, 45 seconds Okay. Okay. Thank you. Thank you and all the best. Thank you. 1:12:49 1 hour, 12 minutes, 49 seconds Thank you ladies and gentlemen. Due to time constraints we'll take the last question from Akil Par from BNK security. Please go ahead. 1:13:00 1 hour, 13 minutes Yeah thanks for the opportunity and most of the questions have been answered and uh congratulations on the resilient performance. uh just wanted to 1:13:08 1 hour, 13 minutes, 8 seconds understand the impact of depreciating rupee on our business. What percentage of a sales is dollar denominated and what percentage of raw materials are dollar denominated? 1:13:18 1 hour, 13 minutes, 18 seconds Yeah, I'll give you a ballpark number. I think we can answer that offline. But definitely uh when the dollar depreciation helps us to some extent 1:13:27 1 hour, 13 minutes, 27 seconds because uh our lot of raw material key raw materials are based on import parity 1:13:34 1 hour, 13 minutes, 34 seconds prices. So if the dollar if the rupee depreciates so we have that ne negative impact but our sale definitely into 1:13:43 1 hour, 13 minutes, 43 seconds mostly into US dollar or even euro and pound all those things are appreciating and rupee 1:13:52 1 hour, 13 minutes, 52 seconds is depreciating so this leads to a positive impact uh for us but uh there 1:13:59 1 hour, 13 minutes, 59 seconds is like uh 40% of that is taken away with our uh raw materials so That is the net impact on that. 1:14:10 1 hour, 14 minutes, 10 seconds Sorry. 40% is the dollar denominated raw material. Yes. Okay. Yeah. 1:14:16 1 hour, 14 minutes, 16 seconds Okay. All right. That's Yeah, that's all for myself. Thanks so much. 1:14:21 1 hour, 14 minutes, 21 seconds Thank you. Now I would like to have a conference over to the management for closing comments. 1:14:28 1 hour, 14 minutes, 28 seconds Yeah. On behalf of Kerwar High-Tech Films Management, I would like to thank you, thank all of you for joining us, 1:14:36 1 hour, 14 minutes, 36 seconds taking uh your time uh to understand, hear out uh from us. We will do our best to meet your expectations. Thank you very much. 1:14:47 1 hour, 14 minutes, 47 seconds Thank you very much. On behalf of Go India Advisor LLC, that concludes this conference. Thank you all for joining us today. As you please.