Ladies and gentlemen, good day, and welcome to the Somany Ceramics Limited's Q1 FY 2026 earnings conference call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes.
Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sagnik Sarkar from SKP Securities Limited. Thank you, and over to you, sir.
Thank you. Good morning, ladies and gentlemen. It's my pleasure to welcome you all behalf of Somany Ceramics Limited and SKP Securities to this Q1 FY 2026 financial results conference call. We have with us Mr. Abhishek Somany, MD and CEO, Mr. Sailesh Raj Kedawat, CFO, and Mr. Kumar Sunit, Head Strategy and IR. We'll have the opening remarks from Mr. Somany, followed by the Q&A session. Thank you, and over to you, Abhishek Ji.
Yeah. Thank you so much. Good morning, ladies and gentlemen. Welcome to the Q1 FY 2026 earnings call. As you have all seen the results already, there's been a muted demand on account of lower sales in India, and also there's a little bit of pressure on lower exports from Morbi to various parts of the world in Q1.
Exports declined to INR 18,000 crores last year, and I think this year it would be a further decline, a couple of thousand crores is what the current trend is showing. Our sales grew by 4%, and by volume 3%. I must make a point here that there is a specific sale of Nepal, which adds about 1.2%.
In Nepal, we have come to an agreement where, owing to the specific laws of Nepal, we will be getting the sale profit only towards the end of the year, but the sale does not get counted because it's traded goods, and Nepal doesn't allow to consolidate in the sales in Somany. So if I had to account for that apple to apple, it would be about another 1.2% growth of sales.
Operating margin is marginally impacted due to low capacity utilization. Gross margin increased by 3.2% in Q1 quarter-on-quarter, and it declined 1.8% YoY. Largely, I would think it is flat. JVs were the places where we had the maximum pressure. On a standalone, we did reasonably okay, although the standalone capacity utilization was also low at 72%, whereas the console capacity utilization reduced from 81% to 77%. There were three plants which were underutilized.
One was the MAX plant, which was the high-end tiles. We have been extremely patient to make sure that that plant only produces high-end tiles currently. Some other corrective action has been taken to further improve the capacity utilization this quarter, and it is already showing some signs that in H2, this would be much better than what it is in H1.
On the sanitaryware front, there was a major kiln shutdown. That is back to 100% capacity as we speak. But in the first quarter, it was impacted, which was a situation where we had to completely shut down that kiln to repair it completely. It will also yield a better quality and a little better yield, and it is back to 100% capacity, so the second quarter should be very good from that point of view for sanitaryware.
The depreciation impact was approximately INR 5 crore in Q1 compared to Q1 2025. This is on account of reduction of life of some assets, so an accelerated depreciation. Once again, the capacity utilization at 77%, sales at INR 601. Correspondingly, you have seen the EBITDA.
The EBITDA basically gets impacted, as stated earlier, also on capacity utilization. So this capacity utilization, we are taking a lot of measures to make sure the capacity utilization is up and running by this quarter a little better, and also H2 would be 100 times better than what it is today.
As far as the tile segment revenue is concerned, ceramic consisted of 34%, down 1% from last year, same quarter YoY. PVT is at 26%, down 2%, and GVT is up to 40%, up from 37%. Gas prices are pretty much in line.
Branch spends will be in line with last year, plus or minus a couple of crores. Working capital has marginally increased by 4 days. Net dealer addition has been approximately 65 dealers in this quarter. Our guidance, we are not changing the guidance. We are still guiding for high single-digit growth and EBITDA expansion of about a percent and a half.
And we are very confident of the EBITDA expansion if we have a better capacity utilization, and that is something which we have taken very concentrated steps to make sure that goes through. The other salient point this quarter has been that we have concluded the JV with Dura Build.
The go-to market will be next month. We are concentrating on all the waterproofing products currently, and then we will move to other patents and other IPs which Dura Build has to offer. We are extremely hopeful and very excited for that new venture.
It is a much better margin business. But of course, while we build out the business, there will be certain pressures in the year 1 and year 2. But it is a very exciting business of construction chemicals. So extremely excited on those fronts. These are the salient points as far as Q1 is concerned. Q2 is already looking slightly better.
Although there have been incessant rains across the north, but still it is slightly better than last year July was. August is yet to be seen. It is early days in August, so let us see how that goes. We are very hopeful. September should be a great month. This is it from myself, and I would then open the floor to Q&A, please. Thank you so much.
Thank you very much. We will now begin the question and answer session. Each participant is requested to limit himself or herself to a maximum of two questions. Time permitting, we shall revert for any further questions that you may have which remain unanswered. Anyone who wishes to ask a question may press star and one on their touchtone telephone.
If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Pranav Mehta from Equirus Securities. Please go ahead.
Yeah, good morning, team. Thank you for taking my call.
Good morning.
Yeah. Good morning, sir. Sir, I just wanted to understand, since you have touched on briefly, but if you can elaborate more on this Dura Build acquisition and how you are seeing things playing out in-
The first few sentences I couldn't get. Can you please repeat?
Yes. Sir, I wanted to understand on the Dura Build acquisition. You have touched upon briefly, but if you can elaborate more on what is your strategy for this going forward and how it will be, let's say, contributing to the top line and the margins by FY 2027 and 2028.
Yes. Early days to talk on the top line and the margins currently because it just happened. Obviously, the strategy is in place where we are not going to lose money. Just to give you a brief, Dura Build has about 150 different IPs. We bought it for the IPs. You already know what the acquisition size is.
Over the next three years, we have the option of buying it completely, but we will move up to 75% and then maybe 100% by that time. They are still in the game for the current partner to maybe earn out more while we travel the 100% within three to four years. Specifically, we are getting into construction chemicals. Out of the 100 IPs, we are concentrating on the waterproofing piece.
The waterproofing market as what we estimate, obviously we are not in the market so we have not 100% data but we have 90% strong data. The market which we are trying to focus is approximately INR 6,000 crores and we are currently at ground zero right now.
That is a market which we are trying to get and he has IPs of waterproofing material which is literally starting from the waterproofing which goes into the concrete while the house is being built or the building is being built, right up to the bathroom and the wet areas and the terraces and also waterproofing for the wall in case there are leakages in the wall or cracks in the wall. It is called a crack proof. Pretty much all these products are available with industry leader Pidilite and various other players like Sika, Fosroc, Mapei, Asian Paints, et cetera.
So that's the segment which we're looking into. There is also another segment which we are thinking of getting into which is admixture because in the concrete the admixture for residential and building products, and this is not infrastructure, this is only for residential and commercial buildings. Admixture, that's another market of approximately INR 6,000 crores which goes into as an additive on the sites or in with RMC plants.
We are gunning for currently an INR 11,000 crore, INR 12,000 crore market. Both of those we are virtually at ground zero. This particular company was only selling approximately a couple of crore rupees of adhesive and about seven, eight crore rupees of admixtures. Admixture is a B2B and the waterproofing business is both B2B and B2C. We are going to leverage our dealership, and there are certain dealers who are dealing with these kind of products.
We're going to attract some of our larger distributors also to see if they want to start this business with us. Plus, we will be also getting into certain hardware shops and certain other specific waterproofing stores. The stores like paint stores, various hardware stores.
We did a little bit of a dipstick and a lot of our dealership, not a very significant amount, but a good 10%-15% of our dealership also is now been dealing into waterproofing for some time. So that's the business that we're getting into. We are currently doing all the packaging and all the go-to-markets. We should be ready to go to market in B2B, B2C for waterproofing towards the end of September.
Okay, sir. Sir, my next question was on this. As you rightly mentioned that the demand continues to remain relatively challenging. Let's assume this year also the exports continue to face challenges then. Do you think that in the industry the receivable part and on the realization part the worst is over or do you feel that still some competitive intensity might increase from Morbi then.
No, I think the realization part is not going down. If you see our realization also is down a couple of rupees, but that's not because of price decrease, that's because of the product mix. Although we continue to make sure that we sell higher product mix. But in Q1, generally, it is a situation where some lower product mix also goes.
Some second-quality material, some old delete items, we've sold a lot of that, and therefore the reduction. But from the price front, in fact, we've taken a small price increase in July, but there's been no further price decrease, so to say, apple to apple.
As far as export is concerned, current trends are showing that it'll be in that same INR 17,000, INR 18,000 crore range. But the kind of quality which is being compromised from Morbi is really not competing with us anymore.
Morbi is only surviving. I say most of the Morbi brands. I obviously don't mean the industry leaders from Morbi, but 95% of the brands in Morbi are only surviving because of extremely high scale evasion of taxes of GST. That has also reached a peak where there is no further scope to evade taxes. I mean, they're already billing at INR 10, INR 11 a square feet.
Okay, sir. Sir, on the receivable part for the industry, more or less-
Sorry, sir. I'll tell you about that. The receivable part, thankfully for us, we've gone down on receivables by a day. We are absolutely on the ball there and not losing focus. So touch wood, receivable, as far as we're concerned, is only better than what it was last year, while it is a pressured market. We're not seeing any further changes there or any further movement there. So even in July and August, we are absolutely on the ball.
Sure. Thank you very much.
Thank you. Our next question is from the line of Sneha Talreja from Nuvama. Please go ahead.
Hi, good morning, team, and thanks a lot for the opportunity. Just a couple of questions from my end. Just wanted to deep dive into the current demand scenario in the domestic market and any improvement that you're seeing in the export market also, because that will define the competitive intensity from Morbi-based players. So closely from that front.
Sneha, demand hasn't further gone down. It's under pressure. We have grown. Even in July, we've grown. From that perspective, I wouldn't say that demand is further muted in India. Yes, there's a little bit of pressure, especially in the value-added segment, where the scope of tax evasion is that much higher. That's the only one which is little bit under pressure.
But we are holding prices. We will, in fact, increase prices a little bit. And we are also holding on our receivables. From that point of view, this is the domestic demand. As far as export is concerned, we don't export a hell of a lot. However, our exports will probably go up by 10%-12% because our base is low. But overall exports will be lower is what the trend is showing. But one never knows.
In exports, there is those couple of months which do cover up. Even if you see last year, till H1, the trajectory was showing that it would be only about INR 15,000 crores. Then it made up, and finally it touched about INR 18,000 crores.
So that's where the export is. It's not picked up. But has it gone down further? Very slightly. Not a very large amount, but the trend is showing that it's not going to be more than INR 16,000-INR 17,000. But I'm the wrong person to ask for exports. Probably our channels in Morbi would give you a better idea on exports.
Got that, sir. Secondly, sir, the peer is into another level of cost-cutting measures that they are taking. Just wanted to understand two to three things from you. Are you following any of those cost measures along with the leader? That's first. Do you see any implication of those cost-cutting measures coming to you in the form of maybe some abstinence curtains and some market share gains? Some of the respects in case you can touch upon that would be really helpful.
Yeah, I can't comment on their strategy, but as far as we are concerned, we didn't have such costs. We had a single person at the top with all the vertical heads working. We don't want to change that. We don't have separate divisions other than at the corporate level, where there are separate vertical heads called GVT, PVT, ceramics.
The only other team which we have, which is working separately, independently, is our Sanjiwa team, but that's been there since inception of Sanjiwa. Now the adhesive team, which is separate, but it's already been separate since inception.
So we didn't have any large costs. But yes, when going is tough, then in legacy companies, there are certain costs which you look at even more carefully. So if you've seen our employee cost, my employee cost has remained the same. We have given increments.
Unlike some of the people who have given none increments, we have given increments, but we've been very cautious of that. Touch wood, our team also has been very cooperative on that front. If you will see that this year, we should be able to reduce.
If we grow in the humble digits also and not the high single digits, even then we will be able to reduce our employee cost as a percentage of revenue by 1%. We're very careful on that account. As far as the other costs are concerned, in terms of advertising, which is the other big one, the advertising cost, we are not reducing, but we are maintaining. So as a percentage, it will probably remain slightly, maybe a little more, but nothing very substantial.
The other cost which goes down, which we are looking at very carefully, is making travel more effective because as you see, travel has become extremely expensive. So we are being a little more cautious using a lot of teleconferencing facilities, video conferencing facilities to make sure that reviews, travel, et cetera, is under check. Obviously, it can't be so much under check because it becomes counterproductive.
To answer your question, we are not following anybody. We have our own strategy. We don't have such crazy costs on human resources. But yes, there is obviously enough and more can be done to make the current resource more productive. We have taken one action. Every year, there are certain attritions which happen. In some places we have not filled those gaps. Those are nothing very major.
At all levels we've not filled up those gaps, and we have extended the people's territory, and maybe at the plant also, we've extended a little bit of their responsibility. But those are not crazy numbers. They're 20, 30, which we have not further replaced and rather extended the current team's responsibility. So we are very focused on not letting costs go up while demand is under pressure.
That was really, really helpful, sir. Thanks a lot, team, and I'll get back in the queue.
Thank you. Our next question is from the line of Rehan Syed from Trinetra Asset Managers. Please go ahead.
Yeah. Good morning, team, and thank you for giving me the opportunity. So I have two questions. First, on the SMPL investment side that we have done. So for the proposed INR 50 crore investment into SMPL, could you outline the expected return profile and payback period, or either how it fits into the company's corporate growth strategy?
Sorry, can you speak a little slowly? I am not understanding. The line is very unclear.
Sure, sir. My question is regarding the Somany Max Private Limited 50 crore investment side. You have done 50 crore investment into Somany Max Private Limited. Could you outline the expected? Hello, am I clear?
Sir, your voice is muffled. Can you just put?
Are you talking about the Somany Max?
Sure, sir. I will just shift my. Hello. Can you hear me? Hello.
Hello. Yes, sir. Please go ahead.
So sir, my question is on the side of Somany Max Private Limited INR 50 crore investment. For the proposed INR 50 crore investment into Somany Max Private Limited, could you outline the expected returns profile or either payback period, and how it fits into the company's broader growth strategy for going forward?
We have taken the approval from the board of 50. It is not that we are going to spend the entire amount. It is an approval which has been taken. This has been taken to further augment Max to make sure that I am running at full capacity. We are going to be adding certain presses there because the current press, which is a Continua press, is inefficient on certain sizes.
It is only efficient on the larger sizes. But to keep the plant running and not have shutdown costs, we are adding two traditional presses where we would be able to produce the slightly non-value-added. In the interim, at least that will reduce my losses from shutdown costs. Also we are putting in certain other balancing equipment to further augment the value addition.
We are putting a warehouse because this non-value-added which will happen, this will go into a separate warehouse because we do not have space in the current warehouse. Therefore, we will have to augment the plant to produce the other warehouse. The rest of it is because the plant is loss-making, it is to cover certain losses.
This is all through internal approvals. We are putting in the money and the payback is quite decent if I had to look at any shutdown cost. We are hopeful that we will not be doing any shutdowns in the plant, and we will run the plant at full capacity, which gives me a lot of benefit even on the gas and on the production cost of every single material, be it the high-end material or the low-end material. That is the reason. But we will not be spending the INR 50 crore currently. This is only empowering us to take permission for INR 50 crore. I hope I was able to answer.
Yeah, sure. It is a very well-defined answer. We have it here. My second question, sir, is on the retail footprint expansion side. What is the current number of exclusive showrooms and multi-brand outlets, and what is the target by end of 2026? How is the mix between urban and semi-urban geographies we are recalling for going forward?
Retail expansion continues. We are at 65 dealer addition, and we will be adding approximately 250 net additions of dealers. We have targets for that as to what our net addition of dealers will yield us in terms of sales. Retail expansion continues in mostly tier 2, tier 3 towns.
Okay.
And some underrepresented areas of tier 1 towns.
Okay. And sir, my last question, if you just gather this also. If we assume how much percentage of revenue or rather margins we can expect for 2 to 3 years down the line, can you just comment what number?
Sorry, can you repeat? How much percentage of revenue, what?
No, no.
Rehan, your voice is muffling a lot. Can you pause?
Yeah, sure. If you can put some ballpark percentage of what we can expect revenue or idea of margins growth going forward.
Your voice is still muffling.
I think the margins are not going down further. Margins would only improve with the capacity utilization, like I mentioned earlier in the call. This year, we are pretty sure that our capacity utilization will be back in place to last year levels, or probably much better than last year levels, which means that we will be adding to about a percent and a half on margin as a certainty.
Okay.
Very confident.
Okay. Thank you for your time and I'll just stand by contact.
Thank you. Our next question is from the line of Lokesh Maru from Nippon India Mutual Fund. Please go ahead.
Hi, thanks for the opportunity. Sir, two questions from my side. One is just an extension of what Sneha asked. For example, if a leader attempts to, let's say, two quarters down the line or whenever, attempts to gain volume.
Once they gain that margin, if they try to give that away to gain more volume via maybe cutting realization or so, if that gap bridges with our realization, do you think however you trying to fortify your position in the market on that front?
That is one. Number two, second question is, regarding in market where it has been challenging to grow high single-digit volumes, how are you thinking around market share gain, and what are the areas which are major focus? It could be anything like distribution, like you said, retail expansion or product or technology. How can that eventually pan out, and how are you thinking around that aspect? That's all. Thank you.
First question is, margins. If anybody thinks that they can reduce margins, already we are an extremely commoditized business, and we are fighting Morbi where there is high scale tax evasion. If one thinks that by reducing realization or reducing prices on a sustained basis, they can gain volume, I think it will hurt them more than gain. That is not the right strategy. It erodes the brand, it erodes the gain.
For us, we have been able to bridge the gap between us and its leader, and we will continue to bridge the gap, and we are extremely confident of that too, bridge the gap continuously. Market share cannot be gained beyond a point with just reduction in prices. That is a knee jerk. It happens for a quarter or two, and then you are back to square one.
That is my answer on the market share, and I do not need to fortify myself. In fact, my challenge is that how I can use my capacity better at better realization. I am not even looking at reducing. We are going to be making better products. We are going to be innovating. We are already innovating on products. If you do some channel checks, you will see there has been a large difference between what we were doing earlier and what we are doing today.
Dealers are a lot more happier with the kind of designs and kinds of innovation we are coming out with. Long way to go, but that is the focus, and the focus is not to reduce and go down on commoditized product. It is all about value addition and going up the value chain. That is as far as that is concerned. Your second question was what? I am sorry.
No, sir. Those were the two questions. One was on the discount realization part, another was on the market share. Thanks so much.
I think the domestic market is flat. If you look at most of the Morbi players, they are flat, except a few exceptions there. Therefore, from that point of view, if we keep growing at even this pace, we are taking a little bit of market share. Over there, the market share is extremely fragmented and it is more on evasion. I do not think that is a sustained way of doing business where you are selling products lower than your cost.
I believe 70-80 plants have already shut in Morbi. I see more of them getting shut in the near future. There will be a consolidation in the next couple of years if this is how it continues. Our balance sheet is strong. We are not taking the eye off the ball on balance sheet. Our continuous focus is on value addition. Continuous focus is on capacity utilization.
Obviously, both of them have been under pressure. While we do that, we keep our balance sheet under check, and I am very confident that we will be able to do both of those over time. It is a brand which has been selling a lot of mass products. It takes time to move up the value chain, but it will happen.
Thank you so much, sir.
Thank you. A request to all participants, please restrict your questions to two questions per participant. Our next question is from the line of Udit from YES Securities. Please go ahead.
Yeah. Hi, sir. Thank you for taking my question. Sir, since you mentioned that you are sticking to your guidance for this year, have you seen any improvement which is kicking in or the hopes are on H2? Also an extension, in terms of the Max plant work towards the utilization, and are you seeing any structural shift or anything happening more towards mass market or low-end tiles?
There are two segments. Mass market is a separate segment. Value addition is a separate segment. There is a larger demand and larger traction for value added segment. Obviously, it's a very small part, but there is more and more traction happening. At Max plant, to answer that question, we are at about 51%, 52% capacity utilization.
Therefore, we are putting these stresses to make sure that we go above 70%, 75% capacity utilization in H2 or more. That's the idea, to produce a little bit, not the entire Max product, but a little lower price product than what we are doing in Max currently to avoid any further shutdowns. That's as far as the Max plant is concerned. As far as distribution is concerned, it is going to be tier 2, tier 3. We continue to add distribution.
All right, sir. What would be the B2B mix for us and how is that pie growing?
It's the same. It's about 75% to 77% is B2C, and the rest is B2B. All efforts are on to see how we can increase the B2B by at least 5%, 7% so that we are able to use the capacity utilization. While doing that, we are also very careful of our receivables because B2B is where you get stuck with receivables and which we do not want.
Similarly, like receivables, what would be the margin differentials between the two?
Project obviously depends on the project. Some projects by also the value added, but generally, I wouldn't know off the back of my head, but about 4% or 5% difference in the margin between retail and projects. More than the margin is the delayed receivables which further impacts the project.
All right, sir. Thank you, sir, and all the best.
Thank you. Our next question is from the line of Anubhav Goel from Cosma Ventures. Please go ahead.
Hi, sir. Sir, can I get a region-wide split of our sales?
Approximately 38%, 39% is north and about 27% is south, and the rest is kind of equally divided. North is 41%, south is about 27%, and the rest is divided between east and west, and 3%, 2.5%, 3% is exports.
Got it, sir. Just a general question on the industry. Are we finding small guys at very low bases innovating on designs to attract architects in terms of designs and trends? Has that become more so important in today's time versus, say, a decade back? How are we placed on that front?
It's not a question of attracting architects. I think these smaller players with single dealers, they're able to incentivize the architects a little more. Beyond which, it's not a specific trend. We have seen Morbi always have these three, four players which do well and then they crash and burn.
Also we are seeing in Morbi, there are one or two industry leaders which are obviously doing well, but under them there are five, six people who are coming up with designs. At the end of the day, their finance is tax evasion. You remove the tax evasion and they don't have any finance anymore. They're able to do all of these investments basically based on high scale tax evasion. The higher the margin business, the more attractive is the tax evasion and incentivization.
So sir, for these small players maybe at, say, 50 crores sales, 70, 100, where we feel they might be doing better on terms of designs, the tax evasion point would apply to them as well.
Yes, correct. They are not doing better on terms of designs. It is just that they have a single dealer in a particular state or particular city. There are two dealers. Obviously, there is not much competition. They have a small base. They are able to incentivize the dealer more. They are able to incentivize the consumer and the architect more because of this. But it is not that they have better designs. That is a very subjective term. The smaller players do not have better designs.
Got it, sir. And sir, you mentioned, I think even we have taken a lot of work versus earlier in terms of becoming more aggressive in terms of our design. So we are doing work on that front.
Yes. We are doing another launch in September and then another launch soon after Diwali. So you will keep seeing better and better products and better and better designs coming from us.
Okay, sir. And sir, just my final question on our Max plant. They are playing the GVT. This would be sort of mid-premium, right? In today's market, not like very high premium.
Max is premium. Max is not mid-premium. The investment which we are doing is to go to mid-premium, which is part of the plant will go to mid-premium. We are pushing for the premium, but I do not want to dilute the premium to just get into mid-premium.
The idea would be in the interim to stop any losses and therefore, shutdown losses. Therefore, we are going to make the plant a little fungible, not entirely fungible, a little fungible to make also the mid-premium, which is pretty much everybody is doing that. Even industry leaders who have done the same thing.
So you would say the opportunity is massive. Or is there a thought we need to keep trying to go up the value chain in terms of realizations? Or you feel the opportunity is massive enough?
The opportunity-
Last question.
in both areas, in both the commodity, not really the commodity, but the mid-premium and the premium. I see tiles as extremely commoditized, low margin, but still a lot of opportunities for people who have good balance sheet and have a good distribution.
All right, sir. Got it. Thank you so much.
Thank you. Our next question is from the line of Keshav Lahoti from HDFC Securities. Please go ahead.
Hi. Thank you for the opportunity. One thing I want to understand, normally, if we see your Q4 to Q1, that is Q1 to the volume decline, possibly what we see the industry leader would be around 20%, but you are somewhere around, let's say, 10%. There is a good gap of 10% to 12%. We have seen in earlier years also at times. What is the reason for the same?
Q2, Q4, generally, you pressure the system and sell probably 10, 12 days more in Q4. Plus, the government also is finishing their. They need to spend their money. Obviously, Q4 on all accounts in India is higher. Government spending needs to be saturated. They need to spend that amount to get the next year's budget. Therefore, everybody is looking at picking up as much material.
We also have certain incentive schemes for dealers, which are yearly turnover discount scheme for the year. In case there is somebody who is lagging behind, they try to make up that so that they get that annual incentive. All of that, generally, Q4 on any building material industry, not only tiles, any single building material industry would be higher than Q1.
No, I understand. Normally, Q4 is higher than Q1. My question is more if I see Q1, Q2 decline, which for Somany is 22%, while the same number for industry leader is 10%. There is a big difference of 12%. Is there anything different maybe?
The Q4 wasn't as good as ours. That's the difference. If you look at it, Q4, ours was much better.
Understood. Got it. One thing, normally the accelerated depreciation which was charged for last two, three quarters, which was supposed to get over in Q4, this time also we see the depreciation is higher. When do you feel the depreciation will get to a normal run rate of, let's say, INR 19 crore-INR 20 crore, which you have guided earlier.
Keshav, it has normalized and we have explained this in last Q4 call also that it has reached to new normalized level, which is annually number of around INR 110 crore, plus minus INR 5 crore-INR 7 crore, and we would remain at that level. Earlier it was lesser and we have done a certain revision in the life of assets, certain key equipment, and that was resulted into this increase. Now this is my largely normalized level.
Got it. That is helpful. Thank you.
Thank you. Our next question is from the line of Utkarsh from BOB Capital. Please go ahead.
Yeah. Hi, good morning, sir. My first question is regarding your own manufactured plant sales volume. We see our own manufactured tile sales volume has been under pressure for the past eight consecutive quarters.
Can you please help us understand, is it because that the market size for our own manufactured tiles is shrinking or we are facing stiff competition from the Morbi players, so we are not able to grow our volume over the past two years?
No. First of all, trading you're seeing gone up because we sold two of our joint ventures and both those joint ventures are actually supplying to us the same amount as what they were supplying earlier, so nothing has changed. It's just that we're not in a JV, so therefore, you see the trading volume going up. But yes, our particular plant, the pressure has been on the wall tile.
What we're doing currently is we are doing small investments in balancing equipment to make these plants fungible to make also floor tiles. From H2 onwards, most of my wall tile plants, other than what I need for wall tiles, will become fungible to produce even floor tiles. So we will see capacity utilization go up significantly in H2 in our existing manufacturing.
Okay. And sir, what will be our gross margin profile for our Max plant, say, in the June quarter compared to our other plants? So whether there would be a significant gross margin difference there?
Oh, that's too granular a question. We talk of gross margin, but yeah, Sunit wants to say that.
Utkarsh, actually, the gross margin of Somany Max Private Limited plant would not be a right number to reflect upon as of now, considering the kind of capacity utilization we are operating at and the suboptimal product mix itself.
Though we are operating at 54%, but that too is a suboptimal product. Again, would not reflect the right number. I think once we are cutting the disinvestments and that will start probably towards the Q4, then next year onwards this would be giving a right number.
Okay. Lastly, what would be your maintenance CapEx guidance amount for FY 2026?
That is same as last year. Nothing has changed.
Okay. Thanks a lot.
Thank you. A reminder to all participants, anyone who wishes to ask a question may press star and one on their touchtone telephone. I repeat, anyone who wishes to ask a question may press star and one on their touchtone telephone. Our next question is from the line of Bharat Kudikyala from Choice Institutional Equities. Please go ahead.
Hello.
Yes, sir. Please go ahead.
Yeah. Can I get some color on reason why profitability, like one region is looking good and one region is not attractive at all?
You are not audible. Can you repeat, please?
Hello. Can you hear me now?
Yes.
Yes, sir. We can hear you.
Can you give more color on region-wise profitability? Like some region is attractive and some region is not attractive.
I can't understand you. I'm sorry.
What is the actual reason why? Sir, you told reason why, then what is that?
Yes, sir. Reason why profitability.
Profitability?
Yeah.
There is no region-wide profitability. Our profitability is between retail and projects. We do not count region-wide profitability because in every region we are selling the same kind of product mix.
Okay. Can you give the split between bathware, like sanitary and faucetware? Revenue of sanitaryware and faucetware, a split.
Yes. Sanitaryware, our revenue was INR 63 crores, which is sanitaryware and bath fittings combined, up from INR 61 crores. This would grow at about in early double digits for this year. We had a plant shutdown in sanitaryware in the first quarter, therefore it was lower, but we are absolutely in complete trajectory to grow at low double digits for this year for sanitaryware. That's doing well.
Yeah. Faucetware revenue, like a split of faucetware?
When I say sanitaryware, it's sanitaryware and faucets combined.
Okay.
If you want granular, faucets went from INR 28 crores to INR 31 crores, but sanitaryware was flat. Sanitaryware this quarter will do much better. Therefore, we are absolutely on track for growth of early double digits.
Okay. Can you give gas price for Q1 growth?
A little bit, but across India, largely flat.
Okay. Thank you. That's about mine.
Thank you. Our next question is from the line of Vivek Tulshyan from Newmark Capital. Please go ahead.
Hi. Could you share the total profit made or the loss made in the Max plant for the last quarter? Would it be fair to say that that was the key reason why the difference in profitability exists in the standalone and consolidated?
Yes, approximately INR 6.5 crore has been the loss from the Max plant. We are going to reduce this loss significantly and that will be impact on profitability, which over H2 will reduce and next year would probably be not there. We are very confident on that.
Got it. Thank you so much.
Thank you. A reminder to all participants, anyone who wishes to ask a question may press star and one on their touchtone telephone. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Thank you. Ladies and gentlemen, as there are no further questions, we will now hand the conference over to Mr. Abhishek Somany for closing comments. Over to you, sir.
Thank you so much for attending the Q1 earnings call. Like I said, challenging times, but when challenging times, you also find opportunities. We're looking at opportunities and are extremely confident of increasing our bottom line and also increasing our top line this year.
Taken many corrective actions to make sure that our consolidated only betters our standalone, because on the standalone front, we've done okay, but on consolidation, there's one or two plants which have given a loss. Sanitaryware is back online. Max maybe will take another quarter, but will be completely back online. So extremely confident on both those fronts. Look forward to the earnings call around Diwali. Thank you.
Thank you very much. On behalf of SKP Securities Limited, that concludes this conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your line. Thank you.