Hindware Home Innovation Ltd — Q3 FY26

Hindware Home Innovation Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=otnOmsO7kPw Published: 3 months ago

0:00 Ladies and gentlemen, kri and welcome to Q3 and 9 month FI26 earnings conference call of Hindware Home Innovation Limited 0:09 9 seconds hosted by Dollar Capital Private Limited. As a reminder, all participants will be in the listen only mode and there will be an opportunity for you to 0:17 17 seconds ask 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 dash on phone. Please note that this conference is being recorded. 0:31 31 seconds I would now hand the conference over to Miss Nikkat Capital Private Limited. Thank you and over to you ma'am. 0:40 40 seconds Thank you. Good evening and welcome everyone. On behalf of Dollar Capital, we invite you to Henware Home Innovation 0:47 47 seconds Limited Q3 and 9M FY26 earnings conference calls. From the management side, we have Mr. Nutamah 0:57 57 seconds CEO of BA and consumer appliance business Mr. Rajesh Pnu CEO of PI business and Mr. Sepit Sikka the group 1:06 1 minute, 6 seconds CFO kindly note that some of the remarks or observations made during today's call might be forward-looking such as 1:14 1 minute, 14 seconds financial projection or statements regarding the company's plans, objectives, expectations or intentions. 1:23 1 minute, 23 seconds The company does not have any obligation to revise these forward-looking statements to reflect any future events 1:30 1 minute, 30 seconds or developments. For a comprehensive disclaimer, please refer to slide two of the result presentation. With that, I 1:38 1 minute, 38 seconds would now like to hand over the call to the management for the opening remarks post which we'll open for the question and answer session. Thank you and over to you Mr. Nupam Sah. 1:50 1 minute, 50 seconds Uh good evening everyone and welcome to Hindu Home Innovation Limited's Q3 FY26 earnings call. Kindly note that some 1:59 1 minute, 59 seconds remarks and observations made during today's call might be forward-looking. 2:03 2 minutes, 3 seconds These may include but are not limited to financial projections and statements regarding the company's plans, objectives, expectations, or intentions. 2:12 2 minutes, 12 seconds The company does not have any obligation to revise these forward-looking statements to reflect any future events or developments. For a comprehensive 2:19 2 minutes, 19 seconds disclaimer, please refer to slide number two of the results presentation. 2:23 2 minutes, 23 seconds I will start with a brief summary of our performance for 9 months and quarter 3 of FI26. 2:30 2 minutes, 30 seconds For 9 months FI26, the company reported consolidated revenue of 1,848 crores compared to 1,824 2:38 2 minutes, 38 seconds crores in 9 months of FI25, reflecting a year-on-year growth of 1%. 2:45 2 minutes, 45 seconds IBITA stood at 170 Kores against 132 Kores in the same period last year, registering a year-on-year growth of 2:53 2 minutes, 53 seconds 28%. with IITA margins at 9 9% compared to 7% in the corresponding period last 3:00 3 minutes year. PBT before exceptional items was 30 crores compared to negative 30 crores in 9 months of FI25. 3:10 3 minutes, 10 seconds For quarter 3 FI26, the company reported a consolidated revenue of 640 crores 3:16 3 minutes, 16 seconds compared to 594 crores in Q3 FI25 representing a year-on-year growth of 8%. 3:24 3 minutes, 24 seconds Iita for the quarter stood at 52 crores versus 37 crores last year up 38% 3:30 3 minutes, 30 seconds yearonear with margins at 8 8% compared to 6% in Q3 of FI25. 3:38 3 minutes, 38 seconds Profit before tax before exceptional items for the quarter was 6 kores as against negative6 kores in the corresponding quarter last year. 3:47 3 minutes, 47 seconds As communicated in our previous investor calls in a strategic move to sharpen our focus on the kitchen appliances segment 3:54 3 minutes, 54 seconds including chimneys, hobs, cooktops uh and sinks. The board has approved the discontinuation of high loss waking product categories such as air coolers 4:03 4 minutes, 3 seconds other than through the e-commerce channel, ceiling and other fans, air purifiers, water fiers and furniture fittings. Please refer to note number 4:11 4 minutes, 11 seconds two of the published financials for further details. 4:15 4 minutes, 15 seconds Now I will cover the bathware and consumer appliance uh businesses. 4:20 4 minutes, 20 seconds For 9 months FI26, the Bathway business reported a revenue of 1,123 crores compared to 1,024 crores in 9 4:29 4 minutes, 29 seconds months of FI25, reflecting a year-on-year growth of 10%. 4:34 4 minutes, 34 seconds IBITA stood at 126 crores as against 110 crores last year, registering a growth of 14%. With IBITA margins of 11%. 4:44 4 minutes, 44 seconds BBT was 43 crores compared to 18 Kores in 9 months of FI25, a year-on-year increase of 146%. 4:54 4 minutes, 54 seconds While for quarter 3 FI26, the business reported a revenue of 386 crores compared to 338 crores in Q3 FI25, 5:03 5 minutes, 3 seconds representing a year-on-year growth of 14%. 5:06 5 minutes, 6 seconds IBITA for the quarter stood at 40 crores versus 35 crores last year up 16% yearon year with margins of 10%. 5:14 5 minutes, 14 seconds PBT for the quarter was 13 crores as against 4 crores in the corresponding uh quarter last year. 5:22 5 minutes, 22 seconds During quarter 3 business faced headwinds from global commodity inflation. To manage this, we implemented calibrated price hikes 5:30 5 minutes, 30 seconds during quarter three and have implemented another price increase in quarter 4 to fully offset the ongoing rise in raw material costs. 5:38 5 minutes, 38 seconds As shared in our previous call, we have undertaken several strategic initiatives in the pathway segment, including refining our go-to market approach, 5:46 5 minutes, 46 seconds accelerating premiumization and sanryware and fits and implementing a zerobased budgeting framework to structurally improve margins. 5:54 5 minutes, 54 seconds These initiatives are now delivering tangible results reflecting an improved operating performance, better product mix and stronger momentum across key markets. 6:03 6 minutes, 3 seconds We continue to strengthen engagement with the influencer community through onground programs for the plumber network while deepening collaborations with architecture and tier designers. 6:12 6 minutes, 12 seconds These efforts aim to expand market reach, reinforce brand advocacy, and we will continue to invest in brand building as well as comprehensive 6:20 6 minutes, 20 seconds customer and influencer engagement programs. Premiumization remains a key growth lever. The introduction of premium sanitaryware and 6:28 6 minutes, 28 seconds faucet ranges and new product developments which carry higher average selling prices and stronger margins has positively contributed to both revenue mix and profitability. 6:39 6 minutes, 39 seconds Premium product segment constitutes approximately 40% of quarter 3 revenues. 6:44 6 minutes, 44 seconds From a channel perspective, retail sales accounted for 76% of revenue while institutional and project sales made up 24%. 6:53 6 minutes, 53 seconds Demand trends remain steady, supported by a stable real estate environment and improving traction in the mid to premium housing segments. 7:02 7 minutes, 2 seconds We have also initiated focused working capital improvement measures including tighter receivables management, inventory optimization and improved 7:10 7 minutes, 10 seconds supply chain efficiencies. As a result, working capital days improved by 5 days from 90 uh from 100 days to 95 days. 7:19 7 minutes, 19 seconds Uh turning to uh consumer appliances business the quarter 3 FI26 revenue stood at 81 crores a growth of 21% with 7:28 7 minutes, 28 seconds IITA of.58 crores. Uh for 9 months FI26 revenue was 237 crores with IBITA of 17 7:37 7 minutes, 37 seconds crores at a 7% margin. Strategic portfolio rationalization and focusing on high demand and higher margin 7:45 7 minutes, 45 seconds categories such as kitchen appliances is now driving an improved product mix and stronger profitability. 7:51 7 minutes, 51 seconds With that I now hand over to Mr. Rajesh Pajnu to take you through the pipes. Over to you Rajes. 7:58 7 minutes, 58 seconds Thank you Navam. Good evening everyone and welcome to our investors call. It's a pleasure to be speaking with you today. For 9 months FY 26, the company 8:07 8 minutes, 7 seconds reported revenue of 488 crores, a bida of 32 crores and PBT of9 crores. In 8:14 8 minutes, 14 seconds quarter 3 of 26, our revenue stood at 173 crores with an aida of 12 crores and 8:21 8 minutes, 21 seconds PBT of 5 crores. During the year, the industry witnessed significant volatility in resin prices which impacted realizations and channel 8:30 8 minutes, 30 seconds sentiment. However, after a lengthy period of fluctuations, resin prices seems to have stabilized in quarter 4. 8:37 8 minutes, 37 seconds This is a positive development for the industry and we expect quarter 4 to be relatively better, supported by improved pricing stability and gradually 8:46 8 minutes, 46 seconds strengthening demand. In response to the volatile environment earlier this year, we took several calibrated steps to manage the situation effectively. We 8:55 8 minutes, 55 seconds strengthened our procurement strategy through tighter inventory controls and sharper pricing cycles to reduce exposure to resin volatility. We 9:02 9 minutes, 2 seconds implemented timely price adjustments to protect margins while ensuring channel competition. In addition, we aim to improve our product mix by increasing 9:11 9 minutes, 11 seconds the share of value added segments such as CPVC and specialized fittings which offer better margin stability. We also 9:19 9 minutes, 19 seconds intensified engagement with our distribution network to normalize channel inventory and drive secondary sales. Despite these initiatives, the 9:27 9 minutes, 27 seconds sharp and prolonged correction in prices coupled with cautious channel behavior did impact our realization and volumes 9:34 9 minutes, 34 seconds during the period and consequently our reported performance. However, these measures helped us mitigate the impact trigger margins to the extent possible 9:43 9 minutes, 43 seconds and maintain operational stability. I am pleased to share that Rudi plant commenced to commercial production at 9:49 9 minutes, 49 seconds the end of January 26. This facility enhances our cost competitiveness by rationalizing freight costs, improving 9:57 9 minutes, 57 seconds service levels in North India and increasing our responsiveness to market demand. We plan to ramp up ramp up capacity over the next three quarters 10:06 10 minutes, 6 seconds and once stabilized we expect to generate incremental annual revenue of approximately 200 crores with region 10:13 10 minutes, 13 seconds prices stabilizing early signs of channel stock restocking emerges and infrastructure and housing demand gradually improve. We are beginning to 10:21 10 minutes, 21 seconds see better momentum in order flows. As this normalization continues and channel inventories rebuilds, we expect working capital levels to improve progressively 10:30 10 minutes, 30 seconds over the coming quarters. Going forward, our focus remains on disciplined working capital management, deeper penetration in high growth region, expansion of our 10:39 10 minutes, 39 seconds dealer network and accelerating our share in high margin categories. With improved market conditions and the rampant operation facility, we are 10:47 10 minutes, 47 seconds confident of driving margin improvement and delivering sustainable growth over the medium term. We are now ready to take your questions. Thank you. 10:59 10 minutes, 59 seconds Thank you very much. 11:01 11 minutes, 1 second We will now begin the question and answer session. Anyone who wishes to ask question may press star and one on the 11:08 11 minutes, 8 seconds touchstone telephone. If you wish to remove yourself from question Q, you may press star and two. Participants are 11:15 11 minutes, 15 seconds requested to use handles while asking a question. Ladies and gentlemen, we wait for a moment while the question queue assembles. 11:38 11 minutes, 38 seconds The first question is from the line of Madurati from Counter Cyclical Investments. Please go ahead. So, thank you for the opportunity. Sure. 11:46 11 minutes, 46 seconds Home innovation segment has seen a decent growth uh if I compare Y but sir if I remove the products that we have 11:54 11 minutes, 54 seconds discontinued so what would be the growth and do we expect this growth to sustain going forward? 12:02 12 minutes, 2 seconds Yeah. Uh so there is an impact of approximately uh 8 to 9 crores of uh products that have been discontinued 12:11 12 minutes, 11 seconds which still appears in the base uh for the previous year. Uh so there is a marginal impact there but 12:20 12 minutes, 20 seconds on the growth uh momentum we are confident now that with our strategy of focusing on a few categories which is 12:28 12 minutes, 28 seconds basically kitchen appliances so chimneys cooktops hobs sinks built-in microwaves and ovens etc. uh and uh coolers only 12:38 12 minutes, 38 seconds through the e-commerce channel and water heaters. So with that very clear strategy to focus on these products uh 12:47 12 minutes, 47 seconds we have a clear path forward to growth both in topline and profitability. 12:53 12 minutes, 53 seconds Our kitchen appliances business u overall we expect a caggr of 15 to 20% 13:00 13 minutes over the coming two to three years in this business. So we expect steady growth uh going forward in in the 13:08 13 minutes, 8 seconds quarters to come. uh and we're confident that with this targeted strategy we will get there right and sir on the margin where can we 13:16 13 minutes, 16 seconds expect sir can we expect a uh low low or low singledigit margin or 10 uh low 13:23 13 minutes, 23 seconds double digit margin side of that scenar uh so for this year we are at about 7% 13:32 13 minutes, 32 seconds for the 9 months in terms of margin uh we believe that very clearly as we scale up the business with the kind of CG that 13:39 13 minutes, 39 seconds we are talking about we start getting operating leverage uh we're targeting a revenue milestone 13:45 13 minutes, 45 seconds of about 650 to 700 crores by FI31 and as we drive uh the top line up we 13:52 13 minutes, 52 seconds expect significant operating leverage to drive margin expansion. Uh so we will transition to doubledigit profitability over this period. 14:03 14 minutes, 3 seconds Got it. And so this segment is asset light right? We don't manufacture, we just uh source and use our distribution 14:10 14 minutes, 10 seconds network to uh sell these products. Is that understanding correct? 14:15 14 minutes, 15 seconds Uh absolutely. So it is a outsource model deliberately kept asset light. Uh 14:22 14 minutes, 22 seconds we leverage our distribution our go to market and marketing spends to build the brand. Uh and those will help us to drive growth. 14:30 14 minutes, 30 seconds Uh sir just a final question from mine sir is there due to the uh Chinese BIS and quality control norms on chimneys 14:39 14 minutes, 39 seconds and uh the the ones that is expected on hogs uh do we expect uh to further gain market share and s what would be the in 14:48 14 minutes, 48 seconds market size because of this BIS norms and quality control getting in? 14:53 14 minutes, 53 seconds Yeah. So uh since this was already in play for some time I think the localization has happened over a period of time for the indust for us as well as 15:01 15 minutes, 1 second the industry. Uh so the overall impact will not be very large on the industry or on us. 15:09 15 minutes, 9 seconds Got it. Sir can you just help us understand what is the current volumes that we do? 15:18 15 minutes, 18 seconds Uh we don't normally share the volume number. 15:21 15 minutes, 21 seconds Got it. Sir uh that was from Mir. Thank you so much and all the best. Thank you. 15:28 15 minutes, 28 seconds Thank you. The next question is from the line of Parish Gupta from Fair Value Capital. Please go ahead. 15:37 15 minutes, 37 seconds Thank you very much for the opportunity. 15:38 15 minutes, 38 seconds Uh my questions are for Rajes sir. Uh sir uh what was the share of faucet wear in our pipes and fitting segment for the quarter? 15:49 15 minutes, 49 seconds Which faucets you are talking about? 15:54 15 minutes, 54 seconds Hello sir, can you hear me? 15:58 15 minutes, 58 seconds Yeah, I can hear you. You're talking about talking about the share of faucet wear in the pipes and fitting segment. 16:07 16 minutes, 7 seconds Faucets here. 16:08 16 minutes, 8 seconds Yeah, faucets is a part of faucets is part of the bathware business. Uh, and it is about 43% of our sales in the bathware business. 16:20 16 minutes, 20 seconds Unders sorry about that uh mistake. Uh second question sir uh in terms of the uh you know pipes business in terms of 16:28 16 minutes, 28 seconds the volume we have done a lower number as compared with the industry uh while competition has grown like a high single 16:35 16 minutes, 35 seconds digit or early double digits we have actually come down in terms of our volumes. Can you please articulate why was that? 16:43 16 minutes, 43 seconds Yeah, actually we were expecting because from uh see if you talk about the competition they are they are into this field for a long time and they have 16:51 16 minutes, 51 seconds various manufacturing capacities across the nation. We are just operating with uh one facility at uh our Hyderabad 16:59 16 minutes, 59 seconds plant. We are expecting that in the last quarter we would uh uh come up with our facility in Guri. It is not we are not 17:07 17 minutes, 7 seconds able to sell agricultural pipes and SWR pipes because of their uh fate factor. 17:12 17 minutes, 12 seconds But what happened is because uh due to certain uh statutory obligations and approvals it got delayed. So we were not 17:20 17 minutes, 20 seconds able to hold on to that market the north market. In any case the competition is very high but we were not able to sustain that as we could not supply 17:28 17 minutes, 28 seconds those items from Hyderabad. So that was the particular reason that we have not done well in north as far as the uh 17:35 17 minutes, 35 seconds operations are concerned. But since now this will not be there because we have uh the end of uh last month we have 17:42 17 minutes, 42 seconds commercialized our key operations. All approvals are in place and we expect better things to happen in future. 17:51 17 minutes, 51 seconds Understood sir. Uh in terms of the uh PVC prices, you already mentioned that uh it has already bottomed out and we 17:59 17 minutes, 59 seconds are seeing an upward trend. We see that in the Reliance PVC prices as well. But uh there is I believe an export restriction from the Chinese 18:07 18 minutes, 7 seconds manufacturers from 1st of April. Do you anticipate that to be uh significant support to the prices and if that is sustainable for us? 18:18 18 minutes, 18 seconds No, that is success from 1st of April. 18:19 18 minutes, 19 seconds It is a it is just a proposal. Uh this is there is no government. There is no any uh thing which has come up for this. 18:26 18 minutes, 26 seconds It's a proposal. It may take some more time. I don't see any uh thing coming up. It looks like that uh the market the secondaries has started taking place 18:35 18 minutes, 35 seconds because there was no material in the secondaries and the market has started growing. You see after uh it is after a long long time that is uh if you uh say 18:44 18 minutes, 44 seconds July 24 the rates the PBC rates were 94 rupees and they bottomed out to in 2 years time to 68 rupees. Now for the 18:52 18 minutes, 52 seconds first time we are seeing a price hike for almost around 72 rupees in just 15 days time. So things look positive. 19:02 19 minutes, 2 seconds Okay. So just my final question before I join back the queue. uh how are the channel inventory levels for the uh you know pipes dealers now and how was 19:11 19 minutes, 11 seconds January month in terms of the volume flow into the market. H so now things have started picking up January we have 19:19 19 minutes, 19 seconds done very very well and we have almost uh resisted even a growth in our value that is around 23% of value so you can 19:27 19 minutes, 27 seconds understand that all this stocking which had happened has started taking place people have started stocking and there 19:34 19 minutes, 34 seconds is a volume growth of 30% also in understood sir this is helpful I'll regen the queue thank you very much 19:42 19 minutes, 42 seconds thank Thank you. 19:47 19 minutes, 47 seconds The next question is from the line of female Dhabat from Choice Institutional Equities. Please go ahead. 19:56 19 minutes, 56 seconds Hello. Uh yeah, thank you for this opportunity. So, uh I have some busy questions. So uh I want to know is there 20:04 20 minutes, 4 seconds any capacity expansion plan in the shorter term other than the ruri which 20:10 20 minutes, 10 seconds already we have started in January. So and uh how we will strategically manage 20:17 20 minutes, 17 seconds this new supply considering the current market and competition and all. 20:24 20 minutes, 24 seconds This is uh the question to pipes pipes division sir. 20:28 20 minutes, 28 seconds Yeah pipes pipes. So yeah no we we don't have any yeah yeah we don't have any plans of uh any expansions further the capex which has 20:36 20 minutes, 36 seconds been incurred at uh ruri is already over we have commissioned the plant we expect the north market to pick up from this facility which has already started 20:44 20 minutes, 44 seconds taking place in future the near 2 three years we don't have any plans of uh putting up any further 20:52 20 minutes, 52 seconds capacities we believe as such we have a huge capacity in Hyderabad and we have installed a capacity of 12,000 00 metric 20:59 20 minutes, 59 seconds terms in Guri and we can ramp it up. So uh we don't see any uh reason why we should go for some new facilities and including in capex here. 21:11 21 minutes, 11 seconds Okay. Okay. And uh regarding the piping segment itself uh the volume decline on 21:17 21 minutes, 17 seconds a YA and Q during the quarter to 10,327 MT. So uh what is the management 21:25 21 minutes, 25 seconds guidance or outlook on the same for upcoming period? So do we have any uh guidance or any any uh s sustainable 21:33 21 minutes, 33 seconds level for the yes the way uh we are we are seeing it now and the way things are happening we are just we can give you a guideline of 21:40 21 minutes, 40 seconds around 12 to 15% of volume growth in future. Okay. 21:51 21 minutes, 51 seconds And uh what is the sustainable I bida margin uh for our consumer appliances because it's too much volatile from last 21:58 21 minutes, 58 seconds two to three quarter. So what what what is the government uh I what is the like 22:05 22 minutes, 5 seconds guidance on this like sustainable margin for consumer appliances? 22:12 22 minutes, 12 seconds uh so in terms of the strategy that we adopted to focus on a few categories if I look at the largest category that we 22:20 22 minutes, 20 seconds will play in uh going forward it's kitchen appliances where we have a significant market share for chimneys already uh and are focusing 22:29 22 minutes, 29 seconds on high growth in the other categories as well of cooktops etc. The gross margins for the kitchen appliances business is in the 40s. 22:40 22 minutes, 40 seconds Uh and we believe that as we grow that business, I talked about a CG of 15 to 20% yearon-year for the next few years. 22:47 22 minutes, 47 seconds Uh we get operating leverage there as well. Uh so we believe that with that mix now in a relatively high margin uh 22:56 22 minutes, 56 seconds category uh we can sustain uh profitability at the level that we want to be hit for the 23:03 23 minutes, 3 seconds 9 months this year and we look over a period of time to getting to double digits over the next few years. 23:12 23 minutes, 12 seconds Okay. Okay. And the last question I I read somewhere like uh the company completed the sale of its manufacturing 23:19 23 minutes, 19 seconds assets in Telangana to Arristan uh for almost uh 115 uh cr 23:26 23 minutes, 26 seconds on de 11th December something. So can you can you share some color on this and uh the impact of this in our on our financials? 23:36 23 minutes, 36 seconds So uh this is not a part of HHI. Um this factory sale was part of our joint venture uh with the group a Atlantic. Um 23:45 23 minutes, 45 seconds we have set up a water heater factory there. Uh but as you can see from the results, initially we could not load the 23:53 23 minutes, 53 seconds factory uh the way we anticipated the market would behave. So a joint decision was taken to dispose of uh the 24:00 24 minutes manufacturing operations and which was successfully done and we use that money to pay off the entire debt of HPL in 24:09 24 minutes, 9 seconds December. uh going forward uh this will be a trading module and as an opportunity exist you know we can source 24:17 24 minutes, 17 seconds uh from vendors from the manufacturing uh facility we can we have sold but definitely the whole idea of u doing all 24:25 24 minutes, 25 seconds these activities to have a healthy bottom line you know but if you see you know number of initiatives we have done over the last 12 to 18 months uh you 24:33 24 minutes, 33 seconds know to take step-by-step improvement and improving the bottom line uh as well as maintaining the growth at the same So these are the steps towards that direction. 24:44 24 minutes, 44 seconds Okay. Noted. Not it. Thanks. Thanks for the thanks for your answer. This is all from my s. 24:53 24 minutes, 53 seconds Thank you. A reminder to all the participants. You may press star and one to ask question. 24:59 24 minutes, 59 seconds The next question is from the line of Ronach from Capital Market Limited. Please go ahead. 25:06 25 minutes, 6 seconds Thank you for the opportunity sir. Sir I just wanted to know what is the amount of inventory loss in p five segment 25:15 25 minutes, 15 seconds sir in this whole year it's uh 4 cr rupees 4 cr for current quarter and what is for 9 months 25:22 25 minutes, 22 seconds no for the whole for the whole year 4 cr for whole year and for the quarter if you see our inventory level it's it's 25:30 25 minutes, 30 seconds around 1.2 two cores for the whole year we have maintained very less inventories we are managing with very less inventories this year 25:37 25 minutes, 37 seconds okay sir got it and my next question is on kitten segment part earlier you mentioned that you will you were 25:44 25 minutes, 44 seconds targeting of quarterly run of 100 ks by quarter 4 so when we can expect that run 25:52 25 minutes, 52 seconds going uh so in quarter 4 we'll be close to that number uh And by quarter 1 of next 26:02 26 minutes, 2 seconds year, we will hit that number. So we'll get uh 90 plus in quarter 4 is what 26:09 26 minutes, 9 seconds we're looking at and uh hitting the 100 number in the next quarter. 26:15 26 minutes, 15 seconds Yeah. So on a run rate basis we'll we'll we should get to 100 by early next year or the next this financial year. Okay. Okay. 26:23 26 minutes, 23 seconds And sir on in pipe segment on J side like are we seeing any improvement in gel driven mission? 26:32 26 minutes, 32 seconds Please come back again. I couldn't hear sir. 26:34 26 minutes, 34 seconds Uh sir on gel even mission side just wanted to know that we are seeing any we are seeing any improvement. 26:41 26 minutes, 41 seconds We we are not in gel the specified product mainly is high density polyethylene and uh we are not into that uh segment at all. Sir. 26:51 26 minutes, 51 seconds Uh okay s I got it. Thank you. Thank you. 26:58 26 minutes, 58 seconds The next question is from the line of Rah from Safire Captain. Please go ahead. 27:05 27 minutes, 5 seconds Hi. Uh good good evening. Can you hear me? Uh yes. Yeah. Yeah. 27:10 27 minutes, 10 seconds So uh the way you explained you know for the consumer product business that your uh focus is mainly on the higher margin in kitchen appliances and all. 27:19 27 minutes, 19 seconds Similarly, uh what is your plan for the bathway segment? What kind of growth do you see there and what uh products you're focusing on and what kind of 27:27 27 minutes, 27 seconds margins are sustainable in that uh segment? 27:32 27 minutes, 32 seconds Uh so uh in this quarter uh we in quarter 3 we grew at 14.3%. 27:40 27 minutes, 40 seconds So it was a healthy double-digit growth in quarter 3. 27:45 27 minutes, 45 seconds uh we expect to continue that momentum in quarter four of this financial year and going forward the ambition is to 27:51 27 minutes, 51 seconds stay in uh the mid teens in terms of growth uh in the bathware business uh 27:58 27 minutes, 58 seconds and the profitability. So what we are working on is a couple of things to improve profitability further. One is 28:06 28 minutes, 6 seconds really focusing on the product mix. So I mentioned that all the new products that we are launching are higher ASP average selling price as well as higher margin 28:15 28 minutes, 15 seconds than existing uh the existing range that we have. Uh so we're focused a lot on new products at higher margins. We're 28:23 28 minutes, 23 seconds also focused on improving productivity and efficiency at our plants. So the two sand plants and uh our faucet plant and 28:32 28 minutes, 32 seconds we believe that that can also give us a good impact in terms of profitability. 28:37 28 minutes, 37 seconds Uh so we are looking at both topline increase that's obviously one primary driver. The second is working 28:45 28 minutes, 45 seconds systematically on improving gross margin through mix and cogs uh improvement and then looking at all levers in terms of 28:53 28 minutes, 53 seconds cost below gross margin. Uh so I think all actions in place already uh results starting to show uh both in terms of 29:02 29 minutes, 2 seconds topline growth. Uh we've now had four months in a row of double digit growth. 29:06 29 minutes, 6 seconds So I think it's good to get consistency in terms of double date growth as well. 29:10 29 minutes, 10 seconds Uh and we believe going forward that all the steps we're taking will lead to uh healthy topline growth as well as growth. 29:19 29 minutes, 19 seconds Can you uh give a certain minimum range for this segment particularly like where it can you know um sustain and then grow ahead. 29:30 29 minutes, 30 seconds Yeah. So what we're targeting is a 3 to 4% improvements in the IITA margin over the next 18 to 24 months. 29:40 29 minutes, 40 seconds Okay. And uh the 90 to 100 crate was you mentioning for a pipe business correct? 29:47 29 minutes, 47 seconds Uh no that was for the consumer appliance. Consumer. Okay. 29:53 29 minutes, 53 seconds Overall okay I'll get that in. Thank you. Thank you. Thank you. 30:02 30 minutes, 2 seconds The next question is from the line of Jasmine from VT Capital. Please go ahead. 30:09 30 minutes, 9 seconds Hi, my questions were answered. Thank you so much. Thank you. 30:17 30 minutes, 17 seconds The next question is from the line of Yeshu, an individual investor. Please go ahead. 30:24 30 minutes, 24 seconds Hi, good evening sir. Uh, thank you for taking my question. I have a couple of questions uh regarding the bathware segment. Could you please tell me the 30:33 30 minutes, 33 seconds capacity utilization for both sanitary as well as faucetware? 30:38 30 minutes, 38 seconds Yeah. So uh in quarter 3 we had a capacity utilization of over 80% in our sanitaryware plants and over 90% in our faucet plant. 30:49 30 minutes, 49 seconds Okay sir. And uh if I look at the uh the revenue growth for the bathware segment um how much would you say is it an 30:58 30 minutes, 58 seconds effect of outsourcing? So if you could uh maybe give me the outsourcing versus manufacturer number for maybe the segment segment wise or the total bath. 31:09 31 minutes, 9 seconds Yeah. So uh in sanitary wear it's 70% inhouse manufacturing and roughly 30% 31:16 31 minutes, 16 seconds which is outsourced. In the case of faucets, it's about 50 odd%. So 50/50 in in house versus credit. 31:25 31 minutes, 25 seconds Okay sir. Thank you so much. And sir uh a couple of other questions as well. So now that we have grown at about 14% for 31:33 31 minutes, 33 seconds the quarter, has the discount scenario improved that we're not uh giving as much discount to our dealers or is that still the same? 31:42 31 minutes, 42 seconds Yeah. So the discounts uh have not changed majorly over the course of the last couple of years. We also are very 31:51 31 minutes, 51 seconds careful that we take a look at what is happening in the market as well. Uh so we are not out of whack with what is 31:58 31 minutes, 58 seconds happening in the market. We put in the inputs which will help us to drive both topline growth as well as profitability 32:06 32 minutes, 6 seconds improvements. So whether it's inbuilt discounts or CNS, all the schemes are basically targeted at topline and bottom 32:13 32 minutes, 13 seconds line growth. Uh so there's been no substantial change either upwards or downwards in terms of discounts. 32:20 32 minutes, 20 seconds Okay. Sorry. So just one last question. 32:23 32 minutes, 23 seconds So over the years we have uh reduced our dependence uh from the Chinese imports. 32:29 32 minutes, 29 seconds uh has there been any uh important sorry uh has there been any change uh related to that or is it is it still in that 7 to 8% range? 32:40 32 minutes, 40 seconds Yeah, it's it's probably a little less than that now. Uh we've consciously over the last uh couple of years uh tried to 32:48 32 minutes, 48 seconds indigenize wherever we can multiple benefits of that of course uh in terms of flexibility in terms of time uh for 32:55 32 minutes, 55 seconds supply etc. uh so now it would be in the very low single digits from China. 33:01 33 minutes, 1 second Okay sir. Uh so would you say that is the reason for uh the uh decrease in net working capital days for the segments? 33:09 33 minutes, 9 seconds Uh that's part of the reason for the inventory reduction. Yes. 33:14 33 minutes, 14 seconds Okay. Okay. Thank you so much sir. Thank you. Thank you. 33:19 33 minutes, 19 seconds Thank you. The next question is from the line of bat an individual investor. Please go ahead. 33:26 33 minutes, 26 seconds Hello, thanks for the opportunity. Uh looking at the current uh raw material environment, do you plan to getting in 33:33 33 minutes, 33 seconds long-term contracts with suppliers in bathway segment? 33:39 33 minutes, 39 seconds Uh so given our experience over the past few years and the volatility that has 33:46 33 minutes, 46 seconds been there in recent times uh we have contracts with them but we don't necessarily believe that long-term contracts will benefit majorly. 33:58 33 minutes, 58 seconds Uh next question would be uh could you throw some light on how you are going to focus on increasing distribution network as you have mentioned that 34:07 34 minutes, 7 seconds Yeah. So, uh there are a couple of strategies that we're following uh in terms of go to market. 34:15 34 minutes, 15 seconds One is increasing a number of brand stores. Uh I'm talking right now about Bathway. In case you want consumer 34:22 34 minutes, 22 seconds plans, I can cover that as well. But in Bathway, we're basically focusing on brand stores. So, roughly one/ird of our sale comes through our brand stores 34:29 34 minutes, 29 seconds across the country. We have 500 odd. Uh so really making sure that we set up brand stores in tier one, tier 2 and in 34:36 34 minutes, 36 seconds some cases even tier three towns uh and extract as much as we can. It's obviously great for the brand. It's a good c uh customer experience that they 34:45 34 minutes, 45 seconds get with Hindware and we obviously get sales out of that. Uh and normally we sell the higher priced products from the brand stores. So there multiple 34:53 34 minutes, 53 seconds advantages. The second is in terms of increasing our penetration in tier one and tier two and tier three towns in 35:01 35 minutes, 1 second terms of the number of dealers that we have. Uh so we've been very conscious of making sure that we look at the quality 35:08 35 minutes, 8 seconds of distributors and dealers that we have rather than just looking at numbers because numbers can be misleading. So we're targeting growth from what we call 35:16 35 minutes, 16 seconds weighted dealers. So the more important dealers in each market really making sure that we increase counter share at each one of these weighted dealers that 35:25 35 minutes, 25 seconds we identified across the country. So setting up brand stores focus on weighted dealers and increasing the number of uh dealers that we have in 35:32 35 minutes, 32 seconds tier 1, tier 2 and tier three. I think it's a three-prong strategy that we're following. Oh, that answers my question. Thank you. 35:41 35 minutes, 41 seconds Thank you. Thank you. 35:44 35 minutes, 44 seconds A reminder to all the participants you may press star and one to ask question. 35:50 35 minutes, 50 seconds The next question is from the line of Kabir and individual investor. Please go ahead. 35:56 35 minutes, 56 seconds Thank you sir for the opportunity. Uh my first question is the 4.65 crime charge for the labor code. Is this uh complete 36:05 36 minutes, 5 seconds or should we expect the more provisions in the future? 36:08 36 minutes, 8 seconds So this is based on the fair assessment as we could do uh on the basis the current provisions which are there. Uh 36:16 36 minutes, 16 seconds there are still more regulations as we understand which regulation and some benchmarks which government may release. 36:23 36 minutes, 23 seconds So anything additional you know then we'll have to take at that particular time. 36:30 36 minutes, 30 seconds Okay. My next question is in the building products. How are you differentiating from the other competitor like Sarah, Kazari and Sani? 36:38 36 minutes, 38 seconds Are you gaining the market share or just growing with the industry? 36:42 36 minutes, 42 seconds Uh so I think in this financial year and particularly in the last couple of quarters we are growing ahead of the market. So we are gaining market share. 36:52 36 minutes, 52 seconds uh the strategy that we're following is I talked about new product uh developments and launching premium uh 37:00 37 minutes faucets and sanitary wear ranges. So the focus has really been on creating differentiated products uh across all of 37:08 37 minutes, 8 seconds our brands. So we have Hindu which is mass, we have Hindu talent collection which is mass premium and we have Kio which is premium. So across all three 37:16 37 minutes, 16 seconds brands that we have we're making sure that we have differentiated products as far as possible. So big focus in terms of design, aesthetics, performance. Uh 37:26 37 minutes, 26 seconds so that is really helping us to differentiate in the market and helping us to grow ahead of the market. Uh the other thing that we've really focused a lot on uh is customer service and we 37:35 37 minutes, 35 seconds believe that that is actually a big differentiator. Uh so we now have invested uh so for example consumers can 37:42 37 minutes, 42 seconds reach out to us on WhatsApp in nine Indian languages. So we are the first in the industry to offer it not just in Hindi and English but consumers can 37:50 37 minutes, 50 seconds actually interact with us in nine Indian languages now. Uh so we're using automation, we're using technology 37:57 37 minutes, 57 seconds uh and making sure that the ability of consumers to reach out to us whether it's website, whether it's WhatsApp etc becomes simpler and simpler and the 38:05 38 minutes, 5 seconds interaction is better and better. Uh and we are measuring that constantly through NPS. So we take the net promoter score from every consumer who interacts with 38:14 38 minutes, 14 seconds us. I'm happy to say that the net promoter score is high and has been increasing over the last focusing on that as a big differentiator as well. 38:24 38 minutes, 24 seconds Okay. Thank you. Let's answer my question. Thank you. Thank you. 38:29 38 minutes, 29 seconds The next question is from the line of Akshi from Karana Robikawa Mutual Fund. Please go ahead. 38:36 38 minutes, 36 seconds Yeah. So, thank you for the opportunity sir. Two questions. So, first is on this uh plastic piping. So you hinted at a improvement. 38:44 38 minutes, 44 seconds I'm sorry to interrupt sir. I just request you to speak little louder. Yeah. Is it is it audible now? Yes sir. Now it is. 38:51 38 minutes, 51 seconds Yeah. So sir, first question is on the plastic piping piece. So you mentioned that a better outlook for the Q4. So is it entirely to do with the restocking or 39:00 39 minutes even the secondary sales are equally strong? Basically just wanted to understand is the end demand also improving or it will be largely driven by restocking. So that was on the 39:08 39 minutes, 8 seconds plastic piping piece. And sir, second question on the bther side obviously you have posted a healthy number this time. 39:15 39 minutes, 15 seconds So sir again here also is it that in anticipation of price hike and hence there was an element of restocking or 39:22 39 minutes, 22 seconds again even here the and demand per se is improving or is it that they completed initiative that you spoke about and hence better numbers that we could show. 39:31 39 minutes, 31 seconds Yeah, these are the two question. Thank you. 39:33 39 minutes, 33 seconds Okay, we'll answer first the price question. Yes, definitely there looks like uh it's both both things are happening parallelly. The restocking is 39:42 39 minutes, 42 seconds taking place and we are also seeing a traction from the market. There are inquiries the uh projects which have got 39:49 39 minutes, 49 seconds held up for a long time has started taking off and uh we have also started now receiving you know continuous BQS from builders and other projects. So we 39:58 39 minutes, 58 seconds are seeing both the things happening parallelly looks very positive. Got it. 40:04 40 minutes, 4 seconds Yeah, on bathware uh what we've uh 40:14 40 minutes, 14 seconds uh sorry could you just repeat the bathway question please? Sir in the Bathway also the same question I mean there was anticipation of price hike right so is it that there was some 40:23 40 minutes, 23 seconds element of upstocking before the price hike typically that happens so is that the reason hence the numbers were good 40:30 40 minutes, 30 seconds or per say the end demand is also improving and hence we are looking at a strong numbers going ahead 40:37 40 minutes, 37 seconds so there are combination of a few things which have happened uh okay I think one is that uh demand sentiment 40:45 40 minutes, 45 seconds in general has improved Okay, I won't say it's, you know, brilliant at this point of time, but it definitely improved quarter 3 versus quarter 1 and 40:52 40 minutes, 52 seconds quarter two. So that's obviously led to a little bit of an upside in terms of consumer sentiment. Having said that, I think a lot of the actions that we've taken have led to this kind of growth. 41:02 41 minutes, 2 seconds Got it. Uh I've talked about the go-to market. 41:05 41 minutes, 5 seconds The other thing which I talked in earlier investor calls also was that we are focusing very heavily on markets where we have a relatively low market 41:13 41 minutes, 13 seconds share. So putting in focused sales and marketing efforts to grow our market share in uh areas where we have relatively low market share that is 41:22 41 minutes, 22 seconds paying us good dividends and a lot of the markets where over the last few years we had relatively low market share we are gaining market share so that is 41:29 41 minutes, 29 seconds helping uh then the other is in terms of the increase in the average selling price through the new products uh that we are selling in the market that is 41:38 41 minutes, 38 seconds also helping in terms of growth so I think a lot of the strategic actions that we've taken over the last few quarter are paying paying off in terms 41:44 41 minutes, 44 seconds of growth on uh pricing particularly we had taken a price increase in November 41:51 41 minutes, 51 seconds uh on faucets and uh a little bit in sanity wear. Uh the brass prices as you 41:58 41 minutes, 58 seconds probably know have really gone up over the last couple of weeks and months. Uh so in the month of January now across 42:06 42 minutes, 6 seconds the industry pretty much uh everyone's taken a price increase of what 14 to 16% in faucets uh and about four or five% in 42:14 42 minutes, 14 seconds in sanitary wear. Uh so the there's a minor uptick because of stocking before the price increase but that's not the primary factor driving the growth. 42:24 42 minutes, 24 seconds Got it. And so the pricing action that we have taken is it sufficient to counter the RM inflation or some more will be needed assuming that the prices stay here. 42:34 42 minutes, 34 seconds So at this point of time the pricing fees that we've taken so we've taken about 15 to 17% in faucets and we've taken about 5 to 6% in everywhere. So uh 42:43 42 minutes, 43 seconds we believe that that's enough to cover uh whatever raw material impact there is uh as of now. If it goes up 42:51 42 minutes, 51 seconds substantially further then we'll have to look at another price increase but at this point of time we don't believe in the short term we will need to do that but we'll keep an eye out. 42:59 42 minutes, 59 seconds Got it. This was very helpful. So thank you. Thank you. 43:04 43 minutes, 4 seconds Thank you. The next question is from the line of an individual investor. Please go ahead. 43:13 43 minutes, 13 seconds Uh no sir you have already answered all my questions. Thank you so much. 43:19 43 minutes, 19 seconds Thank you. A reminder to all the participants, you may press star and one to ask question. 43:34 43 minutes, 34 seconds The next question is from the line of Alles Gopani from Gopani Securities and Investment Limited. Please go ahead. 43:42 43 minutes, 42 seconds Uh good evening sir. Thank you for taking my question. uh I wanted to ask the what is the net debt as on 31st 43:50 43 minutes, 50 seconds December and what will be the debt allocation for bath business and that consumer business that we are demerging 43:57 43 minutes, 57 seconds the company so the total debt as on uh this is a bank debt which I'm talking is around 740 kores 44:06 44 minutes, 6 seconds and for bath it is around 265 and uh pipes is around 450 and balances for the 44:15 44 minutes, 15 seconds hindware Thank you sir. 44:23 44 minutes, 23 seconds Thank you are in one to ask question. 44:38 44 minutes, 38 seconds As there are no further questions from the participants I would now hand the conference over to the management for the closing comments. over to you. 44:45 44 minutes, 45 seconds Uh thank you everybody who joined the today. Uh really appreciate all the questions. Um uh there is a step-by-step 44:52 44 minutes, 52 seconds improvement if you see over the last you know four five quarters which we are demonstrating and still a good way to go 45:00 45 minutes go and we're just trying to target you know you know how we maximize our growth how how to you know bring back the 45:09 45 minutes, 9 seconds profitability numbers as you were there in the so um it's a keep walking stage right now and uh we will very soon the 45:16 45 minutes, 16 seconds trajectory is thanks again for joining Thank you on behalf of Private Limited. 45:25 45 minutes, 25 seconds That concludes this conference. Thank you for joining us and you may now disconnect the lines. Thank you.