Kajaria Ceramics Limited — Q4 FY26

Kajaria Ceramics Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=eeCD55bgT8c Published: 13 days ago

0:01 1 second Ladies and gentlemen, good day and welcome to the Kajaria Ceramics Q4 FY26 earnings conference call hosted by Spark Institutional Equities Private Limited. 0:13 13 seconds As a reminder, all participines will be in the listenon mode and there will be an opportunity for you to ask questions after the presentation concludes. Should 0:21 21 seconds you need assistance during the conference call, please signal an operator by pressing star then zero on a touchstone phone. Please note that this 0:28 28 seconds conference is being recorded. I now hand the conference over to Mr. Girish Chri from Spark Institutional Equities 0:35 35 seconds Private Limited. Thank you and over to you sir. 0:39 39 seconds Yeah. Uh thanks uh Ysef. Uh good evening everyone. Thanks for joining. Uh we have uh with us the senior management team of 0:47 47 seconds Kajara ceramics including Mr. Ashok Kajaria chairman, Mr. Chayan Kajara vice chairman, Mr. Rishi Kajara managing 0:55 55 seconds director, Mr. Karthik Kajara uh VP and head Adisive division uh Mr. Sanjiv 1:02 1 minute, 2 seconds Agarwa CFO and Mr. Pervvin Guptas VP finance. I would request Mr. Gajara to start uh with the initial remarks post 1:11 1 minute, 11 seconds which we will have a Q&A session. Over to you Asho G. Thank you Gurish. Good evening everyone. 1:20 1 minute, 20 seconds It gives me great pleasure to welcome you to the quarter 4 F26 earnings conference call of Kajariah Lhi and as 1:27 1 minute, 27 seconds already said joining me on this conference call is a senior management team of Kajaria ceramics. I'm pleased to inform that this quarter we achieved a volume growth of 11%. 1:38 1 minute, 38 seconds This is the result of several efforts made towards unification of sales during the first nine months. This 1:45 1 minute, 45 seconds synification meant realignment of inventory across channels, manpower alignment and as a result resulted into 1:53 1 minute, 53 seconds flattish growth after which we experienced good momentum in demand since January 26 which was a result of efforts made by us in the first 9 2:02 2 minutes, 2 seconds months. The production has fallen by 7% during the quarter due to shutdown of our barby plants in March which have since started from 16th of this month. 2:13 2 minutes, 13 seconds In quarter 426, our consolidated revenue increased by 12% to rupees 1373 crores 2:20 2 minutes, 20 seconds compared to the corresponding quarter last year. 2:24 2 minutes, 24 seconds Time margin for quarter 4 stood at 19.19%. 2:29 2 minutes, 29 seconds Margin improvement is a result of cost optimization and some improvement and salesization over quarter 3 along with 2:36 2 minutes, 36 seconds allound efficiencies in production, sales and supply chain management. I would also like to mention here that 2:44 2 minutes, 44 seconds there has been a huge destruction at players in terms of costly 2:50 2 minutes, 50 seconds labor and cash flow as a result and other players who are multi-level multilocation plants will have a great 2:57 2 minutes, 57 seconds advantage as we go forward and their volumes and for the year 26 27 3:05 3 minutes, 5 seconds for us the journey has just begun and we remain optimistic about the current year's performance and beyond. 3:12 3 minutes, 12 seconds Let me share with you some data for the quarter. Segment wise, financial performance tile segment grew by 11% 3:21 3 minutes, 21 seconds year to year at 12 1 crores in quarter 4 of 26 compared to rupees 108 crores in 3:28 3 minutes, 28 seconds quarter 4 of 25. Bless segment registered a 6% growth in revenue reaching 117 crores in quarter 4 compared to 111 crores in quarter 4 25. 3:39 3 minutes, 39 seconds Revenue from data grew to 44 crores in quarter 426 as compared to rupees 21 crores in quarter 425. EB data improved 3:48 3 minutes, 48 seconds in quarter 4 f26 to 19.19% as compared to 10.01% in quarter 426. 3:56 3 minutes, 56 seconds PBG the profit before share of profit from JD exceptional items and tax for the 4:03 4 minutes, 3 seconds quarter grew to 228 crores in quarter 4 26 as compared to rupees 85 crores in quarter 425. 4:11 4 minutes, 11 seconds Fat for the quarter grew by to 136 crores in quarter 426 as compared to rupees 43 crores in quarter 425 due to 4:20 4 minutes, 20 seconds higher volumes and improved realization as of 31st of March 2026. 4:27 4 minutes, 27 seconds The working capital cycle improved by 14 days to 51 days as compared to 65 days 4:34 4 minutes, 34 seconds on 31st of December 25 mainly due to decrease in inventory and receivables and we'll continue to focus on reduction 4:41 4 minutes, 41 seconds of our working capital cycle as we move forward with 4:48 4 minutes, 48 seconds hello hi this is Sanji I would just like to say that in our 4:55 4 minutes, 55 seconds presentation Uh in slide number nine uh the inventory figure has been interchanged to data chainly. We have uh 5:04 5 minutes, 4 seconds uploaded the revised uh presentation to the stock chain and to our website also. 5:10 5 minutes, 10 seconds So please read inventory figure as datas and data figure as inventory. 5:16 5 minutes, 16 seconds With this I take this opportunity of thanking you all for joining us today. 5:20 5 minutes, 20 seconds Over to moderator for Q&A please. Thank you. 5:24 5 minutes, 24 seconds Thank you very much sir. We will now begin the question and answer session. 5:30 5 minutes, 30 seconds Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to withdraw yourself from the question, you may 5:38 5 minutes, 38 seconds press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll 5:45 5 minutes, 45 seconds wait for a moment while the question assembles. 5:51 5 minutes, 51 seconds First question is from the line of Keshav Loti from HDFC securities. Please go ahead. 5:59 5 minutes, 59 seconds Thank you for the opportunity. So congratulation on strong set of numbers. 6:03 6 minutes, 3 seconds So I wanted to get a sense from Q for growth. One is because of unification and secondly you believe because of this 6:10 6 minutes, 10 seconds Iran thing the Mori has taken a shutdown possible to biperate. How much posing could be coming because of the Mori 6:18 6 minutes, 18 seconds shutdown? And secondly, how are the things looking on Q1 side? 6:24 6 minutes, 24 seconds So this volume growth is not because of only the Mi shutdown in January and February also we had a volume growth. So it was consistently clawed for the four 6:32 6 minutes, 32 seconds in Jan Feb and March. And what was your second question please? 6:38 6 minutes, 38 seconds All the things looking in Q1 Q1 should be stronger than Q4. 6:44 6 minutes, 44 seconds uh the momentum has started now and we're looking at a good 26 27 going forward so we cannot break it on otherwise but the good momentum has 6:52 6 minutes, 52 seconds started now I would say in general Q1 historically is low in the 6:58 6 minutes, 58 seconds industry and Kajaria so Q4 cannot be compared with Q1 7:05 7 minutes, 5 seconds but the whole year is going to be much better after no I got it I was asking more on year on 7:13 7 minutes, 13 seconds year April on April basis of the momentum whatever the double digit volume that might be continuing April also possibly might be at an accelerated 7:21 7 minutes, 21 seconds case was my question and my first question was that I understand it's because of both unification and more so I was just trying to ask possible to 7:30 7 minutes, 30 seconds bifurcate this growth just let's say for example what has been your growth in Jan the first two months when you have not 7:37 7 minutes, 37 seconds seen the mod destruction the vice chairman said that this is not The growth is not just because of uh 7:45 7 minutes, 45 seconds more because we have started uh getting the growth from the month of January itself 7:53 7 minutes, 53 seconds because Janu were 8% uh 8 to 9 8 to 9% and then content March also. 8:03 8 minutes, 3 seconds Understood. Got it. That is helpful. So what sort of prices you have taken in the market because of inflation in gas prices and how are the gas prices now and in last quarter through four? 8:17 8 minutes, 17 seconds Can you repeat the question please? 8:20 8 minutes, 20 seconds So my question is what sort of price hike you have taken because of increasing gas prices? What the gas prices region wise in Qur and currently? 8:30 8 minutes, 30 seconds So we have taken a price increase of roughly 12 to 13% in our north plants and Morti has been slightly higher around 16 to 17% because the gas price 8:39 8 minutes, 39 seconds has gone up much higher there that's been the region wise price increase and south is also in the similar lines and more or less we have covered the 8:47 8 minutes, 47 seconds cost of increase of gas and with some some added budget but more or less covered the cost which have gone 9:00 9 minutes The reason why gas prices for Q4 and currently how it stands see there is a varied combination. You see what has happened in the month of 9:09 9 minutes, 9 seconds March all the plants in Mori were shut down. So almost there's no calculation as far as Mi is concerned. Now we have 9:17 9 minutes, 17 seconds started the Mori plants on 16th of April. As far as the gas prices in north are concerned, the government of India 9:23 9 minutes, 23 seconds made a restriction that you will get for the first few days 80% and 65% and it's a varied price as you might be aware. So 9:32 9 minutes, 32 seconds give it exact number is difficult to say but calculated by the prices have gone up quite a bit and we have different type of gases. 9:40 9 minutes, 40 seconds Yeah, it's not in in our uh non plants. Understood. Thank you so much. 9:50 9 minutes, 50 seconds Thanks. 9:53 9 minutes, 53 seconds Next question is from the line of Sneha from Noama. Please proceed. 9:59 9 minutes, 59 seconds Thanks a lot for opportunity and congratulations on a great set of numbers. Just continuing with the last participants question. You generally used to give a break up of north, south 10:08 10 minutes, 8 seconds and west average gas prices. Uh could you give that to us for Q4? 10:15 10 minutes, 15 seconds So north is roughly 55.54 rupees per FM for quarter 4. 10:20 10 minutes, 20 seconds South was 49.6 and west was 46.57. 10:26 10 minutes, 26 seconds And could we have current prices too if possible? Yes. 10:34 10 minutes, 34 seconds April the price north is roughly 62.5 south is around 81 rupees and west is 79. 10:42 10 minutes, 42 seconds Sure. 10:45 10 minutes, 45 seconds Like the chairman and you know you have these are gas prices. Yeah. Gas prices not the company who has gas prices. Yeah. 10:52 10 minutes, 52 seconds Understood. So you you're saying that you also have bofuel because of which the average fuel price is on the lower side. Is my understanding correct? 10:59 10 minutes, 59 seconds Yeah. Yeah. Correct. Yes. So average fuel price would be lower than the gas price. 11:04 11 minutes, 4 seconds Understood. This is where we would have some advantage versus Mori. And what would be the current mix of biouels? 20 25% if I'm not wrong. 11:12 11 minutes, 12 seconds would be around 15% no north plant is about 30% 30% for the bio 11:20 11 minutes, 20 seconds north plant in in there they are using code in body 11:29 11 minutes, 29 seconds and south also also in understood understood and secondly for 11:36 11 minutes, 36 seconds an extension to this given there is a steep increase in grass prices and the way you know we have taken price increases to to manage the margins any 11:44 11 minutes, 44 seconds end users demand impact that we seeing on ground not just because of the t price increases I think we are seeing it across the construction uh space like 11:51 11 minutes, 51 seconds we've seen sharp increases let's say in wood in you know uh HRC I mean across the board are you seeing any amount of 11:59 11 minutes, 59 seconds hit taking place on the construction sector not really I think u the demand is there and uh that is a very small segment of 12:08 12 minutes, 8 seconds the entire uh real estate project so just for that uh price increase they will not stop their construction. 12:14 12 minutes, 14 seconds So we are looking at a good demand for the year. Any guidance that you want to give? 12:21 12 minutes, 21 seconds See guidance as you are aware I have always given right. It didn't work out. 12:26 12 minutes, 26 seconds So after I give the guidance you people have not done this. So my request would be my request will be going forward not 12:33 12 minutes, 33 seconds to give any guidance and we perform we perform perform and prove to you people that we are doing a good job as a team. 12:43 12 minutes, 43 seconds Perfect sir that on the volume front anything on the margin front that margin could stabilize your market. 12:52 12 minutes, 52 seconds We are confident that with the current scenario we should be maintaining between 18 to 19%. 12:58 12 minutes, 58 seconds Perfect sir. Thanks. I'll get back in the queue. Thank you. Thank you. Thank you. 13:06 13 minutes, 6 seconds Next question is from the line of Pravin Sahai from PL Capital. Please go ahead. 13:12 13 minutes, 12 seconds Yeah, thank you for opportunity and uh many commutation on good set of numbers. 13:17 13 minutes, 17 seconds Uh my first question is uh related to the fuel uh as the you had given that the fuel uh prices has increased in all 13:26 13 minutes, 26 seconds the three locations. uh but if I look at your uh fuel expenses as a percentage of sales has down uh so is that the impact 13:35 13 minutes, 35 seconds has not reflected in the Q4 or the price hike which you had highlighted already taken uh you know that's uh the impact as well. 13:46 13 minutes, 46 seconds So we we took a price hike in uh early March. 13:52 13 minutes, 52 seconds Okay. So that is resulted in the like your question was fuel price is down in the Q4. 13:57 13 minutes, 57 seconds Yeah. Fuel prices as a percentage of sales has been down. So that is because of the that is because 14:04 14 minutes, 4 seconds of the lower production we produce less 7%. 14:08 14 minutes, 8 seconds We sold more and we are comparing the percentage on sales. So sale is higher and production is less. Sale is higher by 10 11% 12% and production is down by 14:18 14 minutes, 18 seconds 7%. So as a percentage uh the fuel price have gone down. In fact actually the price per square meter has gone up. 14:28 14 minutes, 28 seconds Right. Got it. Because you seeing the absolute number. 14:32 14 minutes, 32 seconds Yeah. Yeah. Correct sir. Uh second thing on the price hike as you said that early March you had taken the price hike. So 14:41 14 minutes, 41 seconds in the coming uh quarters or this quarter Q1 we will see uh the entire benefit of what 12 to 15% of uh increase in the prices in our realization. 14:54 14 minutes, 54 seconds We [clears throat] should we should uh we should see definitely some increase in the price realization. 14:59 14 minutes, 59 seconds We cannot quantify any number because it's a very dynamic situation. 15:03 15 minutes, 3 seconds So we have taken the price increase. We might have to give some discount as well. 15:07 15 minutes, 7 seconds Absolutely. Like in project we might be a little more flexible in terms of our pricing. 15:12 15 minutes, 12 seconds So but one thing is there the prices will be much higher than the whatization much earlier. 15:20 15 minutes, 20 seconds Right. Right. And last question sir because uh what we yet to uh fully resume or uh you know come to the force. 15:29 15 minutes, 29 seconds So such a benefit what he had received in the Q4 uh in terms of the volume growth uh we we can see in the coming 15:37 15 minutes, 37 seconds like this quarter and the coming quarter till the mor is not coming back with the fully production. 15:47 15 minutes, 47 seconds No from 1st of May now Mi is also starting their production GBC is giving gas to whoever wants to take it in Mi. 15:56 15 minutes, 56 seconds So that quarter for scenario is not there anymore and now gas available to anyone who can take it and produce and sell. That is the current scenario going forward from May 1st onwards. 16:07 16 minutes, 7 seconds You see two things are happening. One minute one minute let me explain to you two things are happening. For the first time in last 5 years the gas prices are 16:16 16 minutes, 16 seconds going up like this. The gas prices which was 47 or 48 rupees landed is as of today is 84 rupees and 50 plus are 16:24 16 minutes, 24 seconds landed for the model players which includes the tax which includes the caloric value equalization. Point number one. Point number two for the extra price you have to give a banger into. 16:35 16 minutes, 35 seconds Third point when it comes to pricing you have to sell at these prices. Morby has as we are all aware Morby has always reduced the prices reduce the prices. 16:46 16 minutes, 46 seconds First time they have to take a 35 to 40% height. A product like 4 ft x 2 ft which are selling at 20 rupees a square ft has 16:53 16 minutes, 53 seconds to be sold at anywhere between 27 to 28 because that is the impact of gas. So how can they sell cheaper? Now they are not sure whether they can sell at these 17:02 17 minutes, 2 seconds prices. So as of today nobody knows how many plants will run, how many plants will be able to run properly. The plants which will run properly are one who has 17:11 17 minutes, 11 seconds created a brand in Mori. There are a few players I would say 10 12 players who have created a brand for themselves. 17:16 17 minutes, 16 seconds Yes. And secondly who are outsourcing for organized players or some other players who have uh backup demand. Yes. I will produce and they will buy. 17:24 17 minutes, 24 seconds Besides that there is a lot of question lot of questions should be answered on Monday fourth because uh first second third is a holiday from people are 17:32 17 minutes, 32 seconds expecting to start but Monday you will know how many players started the plant. So that would be my answer to that. 17:39 17 minutes, 39 seconds Thank you so much sir and that's uh really helpful to understand the current situation. All the best sir future. 17:48 17 minutes, 48 seconds Thank you. 17:50 17 minutes, 50 seconds Before we move to the next question, a reminder to the participants to ask a question you may press star and one. 17:57 17 minutes, 57 seconds Next question is from the line of Sonali Salgar from Jeffre India. Please proceed. 18:04 18 minutes, 4 seconds So thank you for the opportunity and congratulations on a good set of numbers. So my first question is uh the 18:11 18 minutes, 11 seconds production I was just trying to align the numbers. Your production is down by about 7%. The sales is up by 12%. Uh is 18:19 18 minutes, 19 seconds it fair to assume and interpret that there was a lot of finished good inventory lying with you earlier which 18:27 18 minutes, 27 seconds was ready which you sold off in March and going forward with that inventory liquidation behind us uh our sales would 18:36 18 minutes, 36 seconds be more in line with our production. Is that the right way to look at it? 18:41 18 minutes, 41 seconds So you're right. First inventory has gone down because of this uh uh the shutdown of Modi. our inventory has gone 18:48 18 minutes, 48 seconds down. Secondly, going forward, currently all our plants are running at full production. So with a combination of our own plants running at full production 18:56 18 minutes, 56 seconds and our stocks, we'll to service all the sales uh orders and outsourcing and outsourcing as well. Outsourcing still 19:04 19 minutes, 4 seconds is a little uh is still a little problem because as uh we just said that mobile lot of plants are still shut down 19:12 19 minutes, 12 seconds but we have enough stocks and our plants running at full capacity to service the market to do our numbers. 19:19 19 minutes, 19 seconds Understood. Yeah. So so just as a followup what is the current capacity utilization of our plant? You could if 19:27 19 minutes, 27 seconds you could please facilitate that as the outsourcing in Mi and in the other regions and how much percent of our 19:34 19 minutes, 34 seconds supplies coming from our production will be uh as Vishi said 19:42 19 minutes, 42 seconds just now from 16th of April all the plants are in full capacity but that today as Kajaria we outsourcing to the 19:51 19 minutes, 51 seconds extent of almost 27 28% of the materials from Mori now there is question get in 19:58 19 minutes, 58 seconds the month of April and AP April was of course tough but how much we get in May things could get normal as we go forward 20:06 20 minutes, 6 seconds but right now that's a question mark because many plants as I just said before are not running because they are not running for a simple reason the gas 20:13 20 minutes, 13 seconds they got started getting gas is only from 16th of April and then again from 1st of May for the people who have not started the plants yet so as we go 20:22 20 minutes, 22 seconds forward we'll know but our plants are running full and as rightly said our our stocks have come down by almost 1 and a half million square meters in 20:32 20 minutes, 32 seconds the month of March itself because the mobile plants are shut down and we sold more. So that's how we we have stocks have come down and we also realize 20:39 20 minutes, 39 seconds better cash flow because of tightening up the notes. 20:44 20 minutes, 44 seconds That is very clear. And just one last question from my end expert definitely accounts for about 25% of the 20:53 20 minutes, 53 seconds your line is not clear voice is not clear. Sorry. Sorry. Is this better now sir? Apologies. Is this better? 21:01 21 minutes, 1 second Yes. 21:02 21 minutes, 2 seconds Uh so on the exports we understand Kajaria doesn't export but Mori used to export about 25% of its sales in Gulf. 21:12 21 minutes, 12 seconds Uh so with that getting impacted do you foresee more competition once the Mori starts producing from the 1st of May and 21:21 21 minutes, 21 seconds also we understand that they have taken price hikes but with us taking about 15% price hikes. Do you think that the 21:29 21 minutes, 29 seconds competition could be more from Mori in the domestic market? I think you did have I said two things. 21:36 21 minutes, 36 seconds One, they have taken a price hype of 35 to 40% for a simple reason. That's the impact of gas only. Baki, I'm not 21:45 21 minutes, 45 seconds talking about other inputs like packing and all that but just the impact of gas is roughly about 35 to 40%. Number one. 21:53 21 minutes, 53 seconds Number two, as the plants were closed, the question of exports doesn't even arise because in the month of the exports has hardly been 4 to 500 crores. 22:02 22 minutes, 2 seconds Why? I give you two reasons. One, the plants didn't run. Secondly, lot of exports to Gulf are affected. Give you a small example. Before the war on 28th of 22:11 22 minutes, 11 seconds Feb that the freight was $300 for UAE today, the freight for UAE is almost $4,000. So how can we export and how 22:19 22 minutes, 19 seconds will they the buyer will get? So these are the which are which are helping the industry. 22:25 22 minutes, 25 seconds My sorry my question was that once more starts producing from 1st of May and I agree with you that the exports are 22:34 22 minutes, 34 seconds definitely impacted would that increase the competitive intensity in the domestic market. That was my question. 22:41 22 minutes, 41 seconds This is what I said earlier. out of 500 600 plants which people say in the industing in the investing community 22:48 22 minutes, 48 seconds which I agree not more than 150 as of today there are only about 70 80 90 plants which are running and as I said 22:56 22 minutes, 56 seconds earlier few minutes back that on 4th of May you will know that how many plants are running our estimate is not more than 150 to 160 plants ultimately will 23:05 23 minutes, 5 seconds run from 1st of May if they run there is a big shortage as it is in the domestic market and why will the export and uh 23:13 23 minutes, 13 seconds have this headache they will rather feed the domestic market because domestic market is important coming to competition there is already a big vacuum if you go to mor today we will 23:22 23 minutes, 22 seconds find many plants don't even have a single box some everything has been sold and that's a that's a that's a scenario 23:29 23 minutes, 29 seconds which has been sold to us by people okay sir we have no material because what the dealer said then during the month of March who were buying from they told 23:37 23 minutes, 37 seconds them yeah I give you money of the past I give you money of the present give me whatever you about gold prices. So they have cleared their stocks entirely. So 23:46 23 minutes, 46 seconds it's a very very positive scenario for the so-called organized players who are multilocational plans going forward for the whole of 262. 23:55 23 minutes, 55 seconds Got it. Very clear. Thank you and all the best. Thank you. Thank you. 24:04 24 minutes, 4 seconds Next question is from the line of Rahul Aarwal from Ikea. Please go ahead. 24:10 24 minutes, 10 seconds Hi sir. Uh good evening and congratulations for a very good number. 24:15 24 minutes, 15 seconds Uh so firstly on the Bware side this 50 cr buyout of the P investor is it for the entire 15% stake or is it lower? 24:27 24 minutes, 27 seconds It's for the entire 15% stake. 24:31 24 minutes, 31 seconds They invested they invested $10 million 8 years back. So we bought the entire uh 24:38 24 minutes, 38 seconds stake for 50 cr by mutual uh discussion and negotiation. 24:45 24 minutes, 45 seconds Got it. Sanju G. The second question on the cost side, you obviously mentioned that 18 19% epida margin is achievable 24:52 24 minutes, 52 seconds next year but when I look at uh you know this year there have been lot of costsaving efforts which you have made uh this staff cost of 550 crores for 25:01 25 minutes, 1 second fiscal 26 the number looks like stabilized at 130 crores per quarter. 25:05 25 minutes, 5 seconds How should we look at this cost going forward for the other expenditure and staff cost? 25:14 25 minutes, 14 seconds Sorry, what was your question? the soft sir the I'll just repeat myself uh my question was that this year it was a 25:22 25 minutes, 22 seconds restructuring year for Kajaria you've done a lot of effort on the cost side uh for fiscal 26 the staff cost is now 25:30 25 minutes, 30 seconds stabilized at 530 crores which is 130 crores a quarter and other operating expenditure also come down substantially 25:37 25 minutes, 37 seconds to 480 crores right if this is the base per fourth quarter run rate how should 25:43 25 minutes, 43 seconds we look at fiscal 27 on expenditure side in the similar grounds we not looking at 25:51 25 minutes, 51 seconds uh see similar you see you have not calculated one thing for the year 25 26 25:58 25 minutes, 58 seconds in volume way overall volume we grew at 3%. We are talking about a much positive growth going forward as we have seen in 26:06 26 minutes, 6 seconds the quarter 4 at 11%, we are saying that it'll be much better growth as we do it because we are not giving any numbers as I said but will be much much better as 26:14 26 minutes, 14 seconds we go forward. Number one, number two some cost increase will be there of course because when you start a new some cost increase will be very marginal. It 26:22 26 minutes, 22 seconds will be very marginal and it will be much more nullified while the volume growth which will happen and and the 26:29 26 minutes, 29 seconds price increase which has taken place from 1st of April because actual price second price increase only came from first of April. See in terms in absolute 26:37 26 minutes, 37 seconds number there would be some increase in mainly in in case of labor and all but in terms of as said as a percentage of 26:45 26 minutes, 45 seconds sale it will be lower cost administrative cost as a percentage of scale will go down 26:52 26 minutes, 52 seconds will go down will go down very clear sir and last question sir when I look at the production uh you know are my sense is for Kajaria 27:01 27 minutes, 1 second in-house production is about 60 65 million square meters and please correct me if I'm wrong and when I 27:09 27 minutes, 9 seconds it is it is 84 million square meters 87 87 87 27:20 27 minutes, 20 seconds you can complete your question but improving yeah so I was actually breaking it down 27:27 27 minutes, 27 seconds into three parts uh own capacity joint venture and outsourcing I was looking at own capacity and joint joint venture is 27:35 27 minutes, 35 seconds about 89 MSM. I agree with you. The question is 87 million 87 87 million. The question I'm asking 27:43 27 minutes, 43 seconds is fourth quarter when I look at production uh looks like the JV production obviously is declined purely because of some you know cash supply 27:51 27 minutes, 51 seconds issues in Mori going forward in the month of March don't forget that happened only in the month of March January February Mori has been also normal. 28:00 28 minutes Yes sir. Yes sir. So just from 16th of April when you're saying that gas is available for all of our plants should I 28:08 28 minutes, 8 seconds assume it is also for our outsourcing partners and joint venture plants put together should I absolutely absolutely yes correct 28:16 28 minutes, 16 seconds yes outsourcing still joint venture partners yes outsouring outsourcing partners is a question now 28:24 28 minutes, 24 seconds because we are not completely outsourcing 100% from each of the outsourcing partners we are doing some percentage of our sales So if they can't do the plant fully on 28:32 28 minutes, 32 seconds their own then they will not produce just for us a small percentage of the sales. So that's a question mark as we go forward we will get to know more about it as the events unfold. 28:43 28 minutes, 43 seconds Got it. So because that is almost 30 million square meters we have sold from outsourcing partners last year. So that will all get compensated from your 28:52 28 minutes, 52 seconds in-house production from JBs and own plants. Is that correct? 28:55 28 minutes, 55 seconds It it is not that the whole outsourcing will stop. The outsourcing will reduce that to in initial months. If the mori 29:02 29 minutes, 2 seconds mori has already started and in from from 1st of May more plant will open they will have to sell. So they will 29:09 29 minutes, 9 seconds have to sell to kajeria first. So it is a it is a one or two month disturbance in the in the supply. It is not a permanent disturbance because when we 29:18 29 minutes, 18 seconds are ready when we are giving assurance as said if the plants are running who have the multi uh who have the brand and 29:25 29 minutes, 25 seconds who have confirmed order if I there can be situation that we have we are outsourcing from 20 so we outsource 29:33 29 minutes, 33 seconds let's say from 12 going forward then you see last year we sold 118 million produced about 87 86 million and we 29:41 29 minutes, 41 seconds outsource about 32 million square meters of price as was just A suppose A doesn't run we will tell you about B. The question is very simple. Material availability is not a problem for Kaya. 29:52 29 minutes, 52 seconds Kay has to outsource this year we have to outsource almost 40 million plus right. So we'll outsource from A if not 29:59 29 minutes, 59 seconds ABC as plants move on this program is limited to probably for the month of April and May as things normal people 30:06 30 minutes, 6 seconds will come forward to uh our this thing and say 30:13 30 minutes, 13 seconds why don't you buy from us. Outsourcing will not be a problem in terms of square meters. I think initially initially yeah initially it's a problem going forward 30:21 30 minutes, 21 seconds will not be a problem because we'll be realigning our supplers. Got it sir. Got it. Very clear sir. 30:30 30 minutes, 30 seconds Thank you so much and wish you all the best for fiscal 27. Thank you. 30:38 30 minutes, 38 seconds Next question is from the line of retest. Please proceed. 30:44 30 minutes, 44 seconds Yeah. Hi sir. Uh couple of questions. Uh sir, first is uh if you could please help clarify uh sir more uh will need an 30:53 30 minutes, 53 seconds increase of 35%. Uh I think you said 20 rupees and then 27 rupees. Uh but sir you also said uh initially that 16 to 31:02 31 minutes, 2 seconds 17% price increase in west and ours will be in similar lines. So I just wanted to understand the timelines for both the numbers. 31:13 31 minutes, 13 seconds May you see what you have not understood. Mori per se was selling a product let's say 20 rupees a square 31:19 31 minutes, 19 seconds feet that's a 4T by 2 ft right today as far as they concerned their costs have gone up by 35% because of increased 31:28 31 minutes, 28 seconds price of gas so their price have gone up from 20 to 27 or 28 depending on the customer as far as ker is concerned I 31:36 31 minutes, 36 seconds was already selling at higher price so my price increase is only 15 16% which covers the cost of gas and this thing so 31:43 31 minutes, 43 seconds that is what the scenario If somebody supplies you from he was earier supplying you at 20 today they 31:52 31 minutes, 52 seconds supply you you at a minimum price of 27 28 maybe 29 rupees also square so their cost is escalation is 35 to 45%. 32:02 32 minutes, 2 seconds There are two things. One is the movie price is cheaper. So and our prices the branded fair prices are higher. So the 32:09 32 minutes, 9 seconds same cost will be less same amount of increase will be higher percentage for Modi and less percentage for Kajaria. 32:17 32 minutes, 17 seconds Number one and going forward the difference will be minimized. Number [clears throat] number two number two our non G prices have gone up much 32:25 32 minutes, 25 seconds higher than the non Mi you see whatever we outsource he's talking about that the the our prices 32:34 32 minutes, 34 seconds were already higher when we were selling so the difference will minimize% increase as said earlier inreasing 32:43 32 minutes, 43 seconds 16% they increasing by 35 40% so that difference will minimize our cost will not go so much compared because I'm already more expensive. 32:53 32 minutes, 53 seconds Correct. S just another clarification sort that 47 rupees currently somewhere at 84 rupees and in our case you 33:02 33 minutes, 2 seconds indicated Q4 was 46.57 and April you said was 79. Uh so how 33:08 33 minutes, 8 seconds should we look at the 79 and 84 like 79 you also was gas 33:15 33 minutes, 15 seconds north 79 then you work out yourself in in north we getting gas from real 33:24 33 minutes, 24 seconds limited and we are getting three types of cash that's RLNG then the Hrihub and the JCC government of India has already 33:33 33 minutes, 33 seconds described the formula that you will get 80% of normal and 20% of spot uh price 33:42 33 minutes, 42 seconds spot right they started with that on 9th of March then they reduce it to 65 then 55 again they brought it back to 65 as 33:49 33 minutes, 49 seconds of today it is 80% 80% is a normal 20% is a small price as far as south is concerned for Southeast Asia we are in 33:58 33 minutes, 58 seconds the same formula for kalasti last year last month we paid a higher price because we have no contact of spot price 34:05 34 minutes, 5 seconds we have from 1st of May at a normal price they have entered into long-term contact with 10 years. So that's 34:16 34 minutes, 16 seconds is that clear now or you do like yes I have some uh probably I'll call sing after the call. Uh sir my second 34:24 34 minutes, 24 seconds question was uh how much is the inventory that we have uh in million square meter is it closer to 1820 34:34 34 minutes, 34 seconds inventory inventory would be about 11 11 million square meters total 11 million square meters okay and sir 34:42 34 minutes, 42 seconds how much would the Hello and sir how much would be the inventory 34:50 34 minutes, 50 seconds at the JV partner levels or outsourcing partners I'm Just trying to understand that we have significant advantage not only because of size location but also 34:58 34 minutes, 58 seconds that the inventory that we have at our hand uh which could also be low cost inventory. So there is no low cost inventory because the prices have already gone up from 35:06 35 minutes, 6 seconds March. So there cannot be low cost inventory. Inventory is a normal because what is being produced is being sold. So what she said earlier we have inventory 35:15 35 minutes, 15 seconds whatever inventory is there it is okay because our plants are going with capacity. There is a problem in what we were outsourcing in outsourcing. Last 35:23 35 minutes, 23 seconds year we outsourced to the extent of 32 million square meter. This year we'll be outsourcing to the extent of 40 million square meters. As things normalize we 35:30 35 minutes, 30 seconds get materials from outsourcing. And as I said if a doesn't A doesn't start B will start C will start they will come to us and say yes you buy from us. Simple. 35:41 35 minutes, 41 seconds Correct. Correct. Uh this is it is not that we or somebody else has inventory of 1 month or two months in for your 35:49 35 minutes, 49 seconds information they have cleaned up the whole act there is no material they have sold everything correct wonderful wonderful and sir 35:57 35 minutes, 57 seconds lastly uh any specific reason for uh the buyback decision at this point in time how should we read into it 36:04 36 minutes, 4 seconds so that's more to the buyback decision is more to give us the market confidence that we very confident the good numbers 36:14 36 minutes, 14 seconds going forward. We we feel that we going to do well and it's a better 36:20 36 minutes, 20 seconds it is not tax efficient. So this uh from this time that it has become more efficient. So this is a better way of 36:28 36 minutes, 28 seconds returning money to the shareholder. So one we were having enough cash on the balance sheet which is much more sufficient than our capex and other 36:36 36 minutes, 36 seconds things. Two it is tax efficient to the shareholder. See it will improve our uh 36:42 36 minutes, 42 seconds also this is very helpful because of course 36:50 36 minutes, 50 seconds yeah and and thank you thank you so much thank you for the answers. 36:56 36 minutes, 56 seconds Thank you. Next question is from the line of Utkash Nani from Anandrai. Please proceed. 37:05 37 minutes, 5 seconds Uh yeah hi sir. Uh so my first question is regarding uh the tiles production. So if you see it has gone down by 7 and a 37:12 37 minutes, 12 seconds half% in March quarter. Uh but you have mentioned that all of our plants are currently operating at full capacity. So just wanted to confirm from you that 37:21 37 minutes, 21 seconds whether our tiles production volume is not likely to get impacted [clears throat] in Q1 as we have seen in Q4. 37:28 37 minutes, 28 seconds So the tile production was down by 7% in March in March. in March quarter but because March the plant shut in Mori plants now 37:37 37 minutes, 37 seconds much lower now as I said from 16th April all the plants are running at full capacity even the Mi plants. 37:43 37 minutes, 43 seconds Okay. Uh so so like on a Y basis we can see some bit of decline in our production in in the current June quarter. Is it correct sir? Because we have started the plant on 16th of April. 37:54 37 minutes, 54 seconds Correct. Correct. 37:56 37 minutes, 56 seconds Okay. And the second thing sir like uh you have mentioned that many plants in Mori are still shut. uh uh so whether our understanding is correct that 38:04 38 minutes, 4 seconds outsold sales volume uh for us might get impacted in in the current June quarter but uh but it will go back to the normal level as things normalizes in Mori. 38:16 38 minutes, 16 seconds You're absolutely correct. Absolutely correct. 38:18 38 minutes, 18 seconds Okay. Uh and sir third thing sir like uh just wanted your sense like our teddies phase volume uh has grown at only say 6% 38:27 38 minutes, 27 seconds kagger o over the say last 7 year period. Uh so what would be your guidance on the volume growth say over 38:34 38 minutes, 34 seconds the next 3 to 5 years for Kajaria? I think I I think I think our chairman has already said about this and we will not 38:41 38 minutes, 41 seconds see over uh sir can sir I did not get you sir like when you have said can you please 38:48 38 minutes, 48 seconds repeat once again I already said I'm guidance earlier 38:56 38 minutes, 56 seconds years it didn't work out for various reasons because we have no control over the outside atmosphere we have a control over what we are doing but we don't have 39:03 39 minutes, 3 seconds the control over the outside atmosphere so keeping in time we have decided not to give any volume guidance number one number two we will perform as we move 39:12 39 minutes, 12 seconds along in a positive manner that's all at this stage okay and sir lastly like on the fuel side sir you have mentioned 39:19 39 minutes, 19 seconds that our gas procurement cost in north is around say 62 rupees uh versus say around 80 rupees for west and south so 39:28 39 minutes, 28 seconds just wanted to know what is the reason that our gas procurement cost is so low in north compared to the south and the west region 39:35 39 minutes, 35 seconds I I think you didn't One of the earlier speakers asked this question. I answered again I repeat for the benefit of everybody. Government of India has set a 39:44 39 minutes, 44 seconds certain formula. They have made Gale as a nal agency on Nam that you will you will coordinate for the entire gas 39:52 39 minutes, 52 seconds pipeline because of this war. Now what they have done as per government guideline whatever you have lifted in the last 6 months you will get 80. They 40:00 40 minutes started off with 80% at normal prices, 20% export prices got reduced to 65 then to 55 again raised to 65 and again to 40:09 40 minutes, 9 seconds 80. As of this morning we are getting a north plant gas at 80% at normal prices 20% at spot price. As far as South Asia 40:19 40 minutes, 19 seconds is concerned we are getting in the same formula because they the CGD company there is going by this in Kali we are getting gas from think gas and we have 40:28 40 minutes, 28 seconds no such agreement. uh for the month of April. So we have to pay spot prices. We have just entered to an agreement 2 days 40:36 40 minutes, 36 seconds back and we will get at normal prices in S cash from 1st of May. So that's a scenario. Mor scenario you are already aware. So I don't have to talk about it. 40:46 40 minutes, 46 seconds So it's a very fluctuating fluctuating thing. If I tell you no I am getting this this will go min because every day the norms are changing by government of 40:55 40 minutes, 55 seconds India and accordingly is my only so whatever it is we share the formula if required so you can later work out and tell the gas prices. 41:04 41 minutes, 4 seconds Okay. So if you can just throw some light how is the supply of propane at the moment in comparison to say January 41:12 41 minutes, 12 seconds and February not allow my dear propane is not allowed for the industry. Normat of India has issued a circular on 5th of 41:19 41 minutes, 19 seconds March that propane will not be supplied to industry. It will only be used for domestic LPG production. No industry is getting propane for your information. 41:29 41 minutes, 29 seconds Okay. Thanks a lot. Thank you. 41:35 41 minutes, 35 seconds Thank you participants to join the question queue you may press star and one. Next question is from the line of Sorup Jen from HSBC. Please proceed. 41:47 41 minutes, 47 seconds Uh thank you for the opportunity and congratulations for a great set of numbers. Uh I just wanted to continue from the previous question on propane. 41:54 41 minutes, 54 seconds So why do we understand that in the recent times the propane is not allowed but when the expectations are that the mor is going to get back the production 42:02 42 minutes, 2 seconds live what is your sense is it going to be like a permanent shift to natural gas and propane not being allowed to mod even for the long term is that a 42:11 42 minutes, 11 seconds structural shift that you are assuming or when things normalize and they might get that and shift to ship back to propane. 42:18 42 minutes, 18 seconds See how can we say that right now about propane also the propane price 160 rupees and it depends on the world situation. So right now household 42:26 42 minutes, 26 seconds cooking and fertilizer are most of the priority sector for the government to give propane to. So this is a very fluid subject which we cannot comment upon because the price source is very high of propane. 42:36 42 minutes, 36 seconds Yeah, know I wanted to get a sense because you are there closer to the industry. What is the inner circles indicating like government is serious about making a permanent shift to 42:45 42 minutes, 45 seconds natural gas or things can go back to propane in the long term point of view is what I'm asking neither for you nor for us to decide it 42:52 42 minutes, 52 seconds all depends on the war situation what is happening government's first priority to give is to give LPG to domestic number 43:00 43 minutes one which you are also aware we are also aware second priority is to give to fertilizer because that's an area they can't afford to this thing I'll just 43:08 43 minutes, 8 seconds give you a small information the fertilizer prices there is a shortage of fertilizers in India shortage of fertilizer in India and the fertiger is 43:16 43 minutes, 16 seconds being sold at 100% premium and the import of fertilizer which is coming is at double the price of Indian 43:26 43 minutes, 26 seconds production so that is why the priority of the government is to make sure third priority as you know earlier was power industry was coming later they have not 43:35 43 minutes, 35 seconds given any gas to the power industry they said no I can't give you gas industry has been put on a priority number three and when I'm saying industry means all 43:42 43 minutes, 42 seconds industry sure uh my second question is on the bofuel thing that you mentioned is it 43:50 43 minutes, 50 seconds possible to share what could be the comparable bofuel cost for you on a perm basis 43:57 43 minutes, 57 seconds bioil cost varies but I can share you the the northern plant the bioil cost is about 20 rupees per cm comparatively and 44:07 44 minutes, 7 seconds uh in South they're using cold in they're using coal because in in what do you call this 44:20 44 minutes, 20 seconds spread you cannot use coal so that is why we 44:27 44 minutes, 27 seconds had an option to use bio government but it looks like a very good arbitrage 44:35 44 minutes, 35 seconds now you know getting bofuel at 20 let Can you a little bit about a ceramic uh tile plant? Tile plant consists of 44:42 44 minutes, 42 seconds two major facilities. One is called a spray D. One is called a kil. K can only be run on gas, natural gas or propane or 44:50 44 minutes, 50 seconds LPG which is gas. As far as spray is concerned, it can be run on bofuel. It can be run on coal. It can be run on 44:57 44 minutes, 57 seconds gas. So we can only use bofuel in spray air. And that is why when we we gave you this information that 30% of the fuel 45:05 45 minutes, 5 seconds today is bio which is used in the spray air in northern part of the area. Okay. 45:10 45 minutes, 10 seconds So you are related to the fact that it cannot be taken more than 30% as overall fuel mix. 45:22 45 minutes, 22 seconds Yeah sure I appreciate it and just was trying to confirm it. Secondly, a lot of other players would also be like trying to secure this biouel because it is come 45:30 45 minutes, 30 seconds at a lower cost and also you know the crop has also recently happened for for mustard. Are you seeing any challenges in terms of you know procuring this 45:39 45 minutes, 39 seconds material for produ and orient they are already using it and as far as mustard is concerned there is 45:48 45 minutes, 48 seconds no challenge in the maximum production of mustard is in the state of Rajasthan and plenty of mustard is available. Got 45:55 45 minutes, 55 seconds it. Uh second question, can you also give us some sense on how the growth trends are looking like in the month of April? 46:03 46 minutes, 3 seconds As we said earlier, we cannot give you monthtomonth. First, our CFO already said that June quarter 46:12 46 minutes, 12 seconds is normally weak. So please try to understand two things. One, they mori plants are not producing at full capacity. Rishi just said that from 16th 46:21 46 minutes, 21 seconds of April all Kajeria plants are running at full capacity. Whatever we use in production for 15 days in Mori plants has to be taken into account. Mori 46:29 46 minutes, 29 seconds outsourced plants are not running in full capacity. They will run as and when they are comfortable. Chetan also said that right now say from certain plant we 46:37 46 minutes, 37 seconds are buying only 20% the capacity. He cannot run 80% unless he has a source to sell. So that scenario will always be there. We cannot do tell you what is 46:46 46 minutes, 46 seconds happening in quarter one and on a daily basis. It will what we have said we are looking for a very positive growth. Yes. 46:52 46 minutes, 52 seconds And not only we at Kajaria, I also said in my opin organized players like Kajaria, Sani and Johnson who have 46:59 46 minutes, 59 seconds plants all over the country will get get benefited by this process because there is a too much damage in please understand that and get all the 47:08 47 minutes, 8 seconds information you'll have a lot of information when you go out there that there is a lot of damage. So nobody knows at this stage. 47:18 47 minutes, 18 seconds So thank you so much and all the best. Thank you sir. Thank you. 47:26 47 minutes, 26 seconds Next question is from the line of Arunb from ICIC securities. Please go ahead. 47:31 47 minutes, 31 seconds Hi sir. Uh congratulations on a good set of numbers. So just how much was the ad spend uh this year? Uh in FI26 47:41 47 minutes, 41 seconds it was around uh I think 90 to 100 cr in the in the whole last year. We did it 47:48 47 minutes, 48 seconds less as compared to the previous year because we did very hard negotiation and some this year we are going to do much 47:55 47 minutes, 55 seconds muchu higher ad spend. Our new TVC has come. So we are just in the process making plan on many many many channels 48:04 48 minutes, 4 seconds or regional channels and others. So this year the ad spend maybe 40 to 50% maybe higher than that's what we spend in the region aggressive ad spend this year. 48:15 48 minutes, 15 seconds Okay. And and second thing is uh you know the salary hikes which last year was not given to employees as you mentioned uh this year have we taken any decision there? 48:28 48 minutes, 28 seconds Some action will be taken but we have yet to take a call but some action will definitely be taken in a positive manner because we are all part of the industry. 48:35 48 minutes, 35 seconds We understand they also understand that you as Kajari are making money. So we have to take a balanced call as we go. 48:41 48 minutes, 41 seconds Okay. And so third thing is uh in last year Q1 call Q1 FI26 we mentioned that once we reach a run rate of 250 crores a 48:49 48 minutes, 49 seconds quarter on the epida front with th00and cr visibility the salaries will be reinstated for the promoters. So anything there you can help us with. 48:58 48 minutes, 58 seconds So we have decided not to take the salary this year as well. 49:02 49 minutes, 2 seconds Okay. So sir uh means uh it's postponed till next year basically. What will be the numbers for this year? Right. 49:09 49 minutes, 9 seconds She did not say postpone for the next year. He said we will not take this year. Okay. Fair enough. Thank you very much. 49:17 49 minutes, 17 seconds Thank you. 49:19 49 minutes, 19 seconds Thank you ladies and gentlemen. As there are no further questions from the participants, I now hand the conference over to the management for the closing comments. 49:33 49 minutes, 33 seconds Oh, thanks a lot. I think uh very good questions came out and on behalf of all of us I but also I would like to add one 49:41 49 minutes, 41 seconds or two statements. I think great effort has been done by Chetan Nadishi as a team after unification. I think they have done lot of work in the last 49:49 49 minutes, 49 seconds financial year along supported by Karthik and ADF. I must say that it's been a tremendous effort by these three people in taking the company to this 49:58 49 minutes, 58 seconds heights and and and I'm very positive that going forward the results will be even better. A lot of good questions came and we have tried to do our best to reply them in the right way. 50:07 50 minutes, 7 seconds And also just to uh appraise you guys, we have kept a lot of good senior people in the company. A new CHR who has joined, a chief marketing officer joined for the entire branding of the company. 50:18 50 minutes, 18 seconds A new chief digital officer has joined to take over the technology part of the company. Even for Kerowit, Kerowit as a brand has been struggling for a while. 50:28 50 minutes, 28 seconds So but there also we've got couple of uh very senior people a chief business officer to look after the sales and 50:35 50 minutes, 35 seconds adviser who who's handling the factory both both veterans of the industry uh we've also got a senior purchase guy 50:42 50 minutes, 42 seconds so we've kept a lot of good people and I think that is the reason which we are so confident that going forward because ultimately the the team has to work 50:51 50 minutes, 51 seconds we're very confident that going forward we'll achieve what we want to achieve a good strong leadership team is in place now going forward 51:02 51 minutes, 2 seconds Thank you. Thank you. 51:05 51 minutes, 5 seconds Thank you, sir. On behalf of Spark Institutional Equities Private Limited, that concludes this conference. Thank you all for joining us and you may now disconnect your lines. 51:16 51 minutes, 16 seconds Thank you. Thank