Good afternoon, everyone. After a long break of almost three years, we can see all the known faces before us. Very, very delighted to see all of you. To start with the program, I welcome you all. I was just calculating after exactly three years we are meeting everyone in person. The time has just passed or flied, and I am happy that everyone is safe. Now the world has put COVID in the back seat and progress in the front seat, because I was in U.S. a couple of days back, there nobody remembers COVID actually, and everybody's back to work. Lots of things have happened and lots of questions would be there for us to answer. Lots of new things have come.
We have always briefed you on our con calls, but to talk in person is absolutely different than when we talk on a con call. We were delighted to host this analyst meet, and I made it a point we want an analyst meet this year, with whatever happens. Now I'll jump a few slides. Some of the things everyone knows, but to go through the presentation. 1986, since our incorporation. Astral has grown multifold, and now we have a family of 6,000 people working in the corporate. We have export presence. We have manufacturing presence in three countries. We have 18 manufacturing units. We have a production capacity of 370,000 metric tons, 23 depots and 2,500+ distributors and 180,000+ dealers. The corporate structure of Astral is Resinova, we have 97.45%.
Now with the merger, it will become Astral in the next few days. Seal It is 80%. Still we have the Mr. David as our partner, who will still be with us for coming few years. Kenya, which unit was 50%, but we have exited Kenya market and the unit is closed and will be completely closed this year. There won't be any Astral in Kenya. Gem Paints, which we recently acquired, is 51%, and Seal It U.S. is 100% ownership of the U.K. entity. These are the product lines. Now we are in water tanks. Apart from pipe, we are coming in faucets and sanitary ware as you have seen. The valve project is complete. Paints is there.
I want to just brief you about what happened in last two years. Astral went into the expansion of its facilities in Ahmedabad. We put up a full-fledged tank unit at Ahmedabad plant at Santej. We started a new technology piping systems in PP multilayer. We already had the silent pipe, which is doing excellently well. We have added one more category in that to take on the rising trends of PVC and with additional benefits which this product gives. We added capacities of our fire sprinkler pipe, which has started doing very good in some of the states. We completed the pipe and the valve project at Dholka, which we had been talking for almost now two years. We have a whole range of valves up till 12 in.
We have launched it in the Indian market, and we will be working on exports of the same to Europe and parts of America. Global exports, we are tying up with the valve project. Valve project is high margin project with high technology. We also increased capacities where need be in Dholka plant with the addition of fitting range, which we completed in our pressure application, which is normally called the agriculture application. In the south, at Hosur plant, we started corrugated pipes to feed the South market, and we started manufacturing of water tanks. We did a small acquisition in Aurangabad to come into the water tanks. Sarita is the brand name which is sold parallel to Astral brand, especially in Maharashtra. Sarita was a company which was in water tank.
To enter the water tank business with two technologies, the roto mould and the blow mould, we went ahead and acquired this small company. We have now started even pipe manufacturing at Aurangabad in Sarita to feed the retail network where Sarita tanks are going. We have also started pipe manufacturing at Rex at Sangli. Sangli location also we added certain capacities. Unfortunately, we were not utilized for one and a half years because the downturn of COVID, the spending was very low on infrastructure. Last six months, the spending on infrastructure has improved at such a level that we are now short in supplies. We are getting orders of certain products where we have to wait for the supplies. We honor the orders at 15 days, one month of time. Things are much better on that part.
We added water tank and corrugated pipe in the Ghiloth plant in Rajasthan. Rajasthan plant now even makes all the range of water tank for North. We just commenced our production in Odisha. Odisha plant has started manufacturing water tank. Construction work is almost on the verge of completion, and we will be adding pipe production range at the east plant in coming four to six months to complete, to see the plant is up and running. Telangana, we acquired land. We have started construction to start the water tank project first, and then coming into the pipes to for the Telangana and surrounding markets. The north plant in Uttarakhand also is running at the optimum capacity.
We are planning to either expand it or to have ways how to expand it because we are landlocked there, so we are working on how to expand that plant. Adhesives, we did some expansion, not much in Kanpur, Unnao and Rania. We did improve the Rania facility to the level of a world-class facility. We have done balanced expansion in Unnao, but at some point we have to hand over the Unnao property back as per the agreement. We are only doing balanced expansions there. We have started the work of building a state-of-the-art plant in Gujarat at Dahej. Next year, the Dahej plant will be operational with certain chemistries, and we'll keep adding chemistries at Dahej plant and make it a manufacturing hub for most of our chemistries in adhesives. We expanded our R&D facility in Ahmedabad in adhesives.
We now have a state-of-the-art R&D facility with almost 50+ people working who are either PhDs or are very well versed with the R&D activities and are in the R&D activity. Adhesives per se has also expanded product line and we have added a lot of new chemistries in adhesives and expanded the portfolio. Looking to the market creation and reach, we are foraying into faucets and sanitary ware. Some of the products are on display here. The launch is happening on June of 10th at Goa. It's a massive launch with complete range. We have strategic tie-ups to make the product. Most of our tie-ups are on the exclusive basis. We have taken the complete capacities of the plant, so they would be working on exclusive basis. Atulji is here.
Most of you know him, so can interact with him after the meet is over. We have our in-house design team. We have not gone and made any product which is completely available on the shelf by a job worker. We have done everything in-house designed, and then we are bringing the product to the market. Recent acquisition of paints. I think lot of questions on paints, we'll go more deeper into all these two new avenues. This is foray into paints. Paint and faucets. Faucets behind the wall to in front of the wall. Paint and adhesive go hand in hand, especially when you are coming in a full range of construction chemicals. Gem Paints brought us two things. One, we have to work lot on south in adhesives. Vijaybhai, the owner of Resinova never worked in the south market.
We were absolutely not present when we acquired Resinova in South. From there, we have reached a level, but not to the level the competitors are. Gem has a very strong presence in South. South market, there was good retail network. Sales, their gross revenue was INR 260 crore last year from the South market only. They have a complete chemistry of paints which is needed and is done by the big paint manufacturers. Nitin's father, who started the company in 1981, is a high research guy in paints. He had worked for the Indian giant on the research and setting up of factories. Still his passion is research. They have not only the product line, but they make better products than available in the market. Second, they have just put up a new plant and capacity, state-of-the-art plant. The plant is highly automated.
The plant has a capacity to grow four to five times and still not do any CapEx. Secondly, for us, the retail network which exists in adhesives, we did a survey on this in the other markets, East, North and West. 70%-80% are in paint business. That gives us expansion, extension to our product range. Our construction chemicals can be easily, not easily, I can say, can be sold through the paint, painters and the paint market segment. Secondly, we are not going to be aggressive to be a number here, to fight on anyone, to throw money to do huge branding on any branding. We'll do endpoint branding. Astral already has a good branding activity going on, and the branding activity has made Astral a brand today. We are not going to additionally burn any cash here.
There is no expansion needed here, so no CapEx will be planned in paint for at least next two to three years. I would say three to four years. There will be no race. If we grow at 15%-20% +, it's 20% around, it's good enough to maintain a decent EBITDA, which they have been maintaining for 25 years. It is a zero debt company. They have a track record. We checked the 10-year track record. They have a track record of maintaining EBITDA in double-digit plus.
This is our very clear foray, not to talk of thousands here, not to talk of numbers here, not to talk of any race here, but strategically mingle this business into our adhesive and pipe and faucet business and do a expansion of our business with the right utilization of the network which we have created with distributors and dealers through our programs. I think still there will be lot of questions on paint, which we'll answer in the QA session. As I've already talked about the opportunity which we ourselves see to grow in paints and the faucets. Also, there are distributors in pipes, distributors in adhesives and dealers who have come to their optimum sale capacities of pipes. They are doing INR 50 crore. Five people this year crossed INR 100 crore in pipe. They are looking at new opportunities.
If we are not going to give those opportunities to work with them and grow, they are going to bring in other companies to work with. If they bring in other companies, if they bring certain competitors, we also need to see that they will grow on the back of us on the Astral brand and Astral Pipes. Because Astral Pipes sales is something so big for them, they can ride other products on that very easily. This is the thing which we debated a lot around on these things, and then strategically we went with the company, which already has a presence and already knows the business, and has a decent number and a decent price which we could get. We have worked as a trendsetter. We have products for the first time in the piping segments.
We have recently, which product we got, the PP is globally first product we have brought. We have been a trendsetter, and we would like to continue as a trendsetter with the generations added up. Nitin here, who is at present running Gem, is also a very young entrepreneur. Savlaniji, so you know from us, he with us from years to now more than CFO, entrepreneur, and both the sons and Atulji here to help us to run the faucet business. Astral journey, as everyone knows, but here is a part that we have from 1996 to 2022, we have always given growth. We have always grown both in our capacities, our product lines, our reach, our systems and our product, how to make things better always.
That is what we have always done, and with the new geographies which we extended ourselves. These are some awards and recognitions. Plumbing is something which has exceptionally grown in these two years, especially CPVC. CPVC has run into shortage for last two years, and it's still running into tight position. We are growing exceptionally well in our plumbing product lines. We had a little tonnage, lesser growth. The reason is that our double wall corrugated, the infrastructure pipe business had come down because of this various reasons known to you in the capital expenditure, which was stopped by the government projects. But things are back. These are our various plants with our capacities. Adhesives, as I already mentioned that, apart from what we did in India, we have done exceptionally well in U.K. and U.S.
U.S., apart from the silicone tape, we have launched roof sealing products which have taken up very well and are doing excellently well. Just six` months back, we have launched roof sealing products there. The technology is from U.K., and we at present export from U.K. in bulk. We repack at U.S. and sell in the market. In near term, in five to six months, we'll be starting certain additional products in U.S. market. Technology will come from U.K. plant. These are the manufacturing facilities. Everyone is aware, Astral is now present in all the parts of India. East, we were not there. We have just started the East. East, we are almost East and Southeast we have been. We'll get two plants. We have a pan-India presence.
We have now digitized the whole company, right from order processing to dispatches to the distributor billing pattern. We can transparently see our distributors' billing patterns. We have a DMS system. Our app, plumber and dealer is through electronic platform, Astral Loyalty app. Similarly, Resinova has also programs. We are now directly connected to plumbers, carpenters, masons, and part of electricians. We are not connected directly is the painters, which we'll work with our own expertise and digital platforms when we enter into the details of the Gem business shortly. We were the only company who in the second wave encashed plumber and dealers point, and we gave INR 32 crore to the market. They encash this point when people were sitting home, and they were in the need of money.
We were the only company who came forward and encashed their programs and whatever the points they had accumulated. It is such a robust program which we have designed completely, that we have a direct connect to the end user. We know the end user is buying, not buying, when he's buying, what he's buying, why he's not buying. It gives a huge transparency for us in our retail network as well as our end connect with the end user, the applicator. These are the product offerings in the pipe business. I already discussed most of them. Pipe product. We are now processing all polymers. We are in CPVC, we are in PVC, we are in HDPE, we are in PP. We now process all the polymers. Formerly, we were only a CPVC and PVC company.
We went into Rex, we become HDPE. Now we have water tanks, again, HDPE and other polymers. We process all the polymers in the plastic segment. This is a unique product, DrainPro, which I mentioned. A multilayer pipe made in PE, and it has more strength than PVC, and it is hardly costlier than the PVC. The cost effectiveness is such that you get a lot of benefits, less price escalations, and much more benefits which you get. This product we have just launched around three months back.
Two months back. Without any push, we are getting INR 1.5 crore-INR 2 crore sales a month. The Silencio, which was when we met last time, was INR 2 crore-INR 3 crore, is now INR 6 crore, INR 7 crore, INR 8 crore . Around INR 100 crore from it. Tanks, we just finished last year with first year itself with INR 45 crore, and this year we are targeting 100+. Our average run rate is INR 9 crore-INR 10 crore a month from last two months. Tanks, the traction is very high. Sometimes I feel we should have come at least two, three years back in tanks. Whenever things start, it is always good for us. Valves, the range is on display. Complete range is in production. We have launched in India. We'll slowly start export launch in next two to three months.
We have always talked about this valve business, and the opportunity in the next one, two years is INR 100 crore plus for valves, and with better margins here. Tanks, we have multiple ranges as there are ranges available, three-layer, four-layer, five-layer, all these things. You have to have the complete range, and we have the complete range of tanks. Adhesives, we have a complete range now. Construction chemicals was something which needed to be completed. We have completed that portfolio also to get into construction chemicals. Silicones, we have been doing good. Hybrids also, we have been doing good.
We have just launched a new Bondtite range, which is the first type in the globe, better than the global competitors, which is called Bondtite Pro, which gives more adhesion and more spread because in adhesive people need spread so that a lesser product can do more work. We have this product line, and we did a marketing campaign on Bondtite also recently. Solvent also we have a huge range and I think adhesive we have in three years done a massive expansion of range and justifying the sale of every range. Branding initiatives, I think, formally Kairav looks after adhesives, Saumya looks after and Kairav also is in pipe. Now we all work for faucets together and paints we have to learn from Nitin now. We have just signed Allu Arjun for South.
Because South we want to grow overall in our business in pipes also, adhesives also, paints is now there. South, the penetration of our brand ambassador from Hindi belt is very weak. We got a right tie-up with him. I think he's now the most favorable person for the South, and so we'll be doing only South campaign with him. Only South. Four states. No, five states now. Ranveer Singh is already there to take care of the other markets and campaigns around with him. I think most of you must have seen this ad. You know Gujarat Titans has won yesterday, so everyone knows that Astral is a part of this branding activity. These are the other branding, in-film brandings we have done. In short, here we would like to tell you that with all the.
Whoever it has done, it is X, Y, Z is not the question, but it has helped us to create a strong brand known to user also and non-user also. This benefit is what we are looking at to grow ourselves. Today, if you go to the market, and if you ask about Astral, at least with pride, we can say that we are known as a stronger brand, as a value addition brand, and also a brand which is well known for a quality product. This is what we have worked and created around whatever the activities we have done at all the levels. This is what is the strength to bring in the product line, which we are going to put to the market with additions. At least people carry a brand trust with us.
At least with Astral name, somebody would at least try one tin of our paint or at least one faucet from us or at least something from us, which I'm pretty sure. With this extension of brand, the new activities which we have taken to extend ourself is a rural brand, rural marketing activity. We have just started from last year a division for rural market. We found that we were present in cities, urban cities, but any town below 200,000 of population, our presence was minuscule. We were either in one shop or not at all. The reason is the distributors in the urban were making the product so costly and unaffordable, charging 15% premiums, 10%, freights. We have come out with a new division, with a new head, with the urban and rural market.
Rural market we have completed, and we are getting very good results from Gujarat we did as a trial. We finished Rajasthan. Now we are working on Maharashtra and Madhya Pradesh. We have a new team of marketing people for rural, and all the products are going at present only pipes, but rural presence of Resinova is already very strong. With this, the pipe which we are selling to rural is giving very positive traction. That is new addition of marketing initiative taken up from last year. CSR, we are doing our best CSR activities. We are the closest thing to our heart is jungles. We spend good amount behind the wildlife.
Rest of the activities, some are being done at Gujarat level, and some are being done at the India level on our CSR activities. Healthcare was something which everyone has done last year. Similarly, Astral has come forward and done a lot on the healthcare part of the CSR activity. COVID measures, everyone has helped. Similarly, we have done even much better what we could do in the COVID times for the people of India. We have just got a certificate. How call it?
Certificate.
LEED certificate. Platinum LEED certificate. Just a few days back, we got this for our plant.
Santej.
Santej plant. I don't know Maroth photo. I don't know. Okay, let's leave that. Way forward is, we are going and envisaging a good growth in the piping market, especially in the plumbing in coming years. Everyone had a question. From morning I've been answering that what would be now way forward to pipe? Will you continue to grow, and how much? In two-digit plus we will grow, I am sure. I'm still not telling value. We still focus on the volume part, which is more important for us to grow than the value part. For adhesives, we have touched INR 1,000 crore, which we promised. From here onwards also the same 15%-20%+ growth will continue, which is our focus. The teams are aligned, the divisions are aligned, the systems are aligned. The endpoint contact with the users is aligned.
The tertiary visibility is 80%-90% for us in both pipe and adhesive business. Pipe is little less. We are increasing. This is giving us a good understanding of the user market and people. This is going to help us a lot. Paints, as we have given guidance that we would do our best to continue growth with Gem in South and add the geographies one by one. We don't want to rush and add that we know everything in India and we'll do something. Not spend any effort on anything which is wasteful or burn cash. Faucets also will be opening market by market with our distributors. We are launching in June. We are targeting faucets to reach two to three years, INR 500 crore. We are looking at paints to grow two to three years by INR 600 crore-INR 700 crore.
We are not looking at huge numbers here. Also go very systematically and with firm footing in the market. Lot of concerns about thousands being declared by people is not what we are looking at. We are strong at the segment we are and we will stay strong and keep growing at that level. The industry outlook of pipes is very positive, I can say. Plumbing segment is very, very positive, and we will be adding products, distributor, reach market, urban, rural. We see very positive traction there. Agri market also will be addressing with the rural base which we are growing and increasing. That will also give us extension of our other product lines which will be sold in the agriculture sector. These are the revenue numbers which we told that this is what optimistically we are looking at.
Similarly, in adhesives, 15%. I think most of the things we'll answer jointly when you have Q&A. Again, thank you very much, all of you, for taking time with mask-free atmosphere. We can see everyone. We will be delighted to see this type of COVID put behind and growth come back to the economy for this year and years to come. A lot of people would like to meet in person also. I'll be here up till 7:00 also, so we can meet one to one also. Okay, thank you very much here on. Hiranandbhai will take over from the financials. Thank you.
Good afternoon once again. Before I start, I think we should give the introduction of our teammates who have joined with us, though they are not on the dais, but we can introduce one by one. Kairav, you all know. He's the elder son of Sandeep Engineer. Graduated from Arizona State University. Sorry, Georgia Tech University. Saumya is from Arizona. You all know, he doesn't need much introduction. Saumya, can you stand up? He has graduated from Arizona State University and he's right now taking care of adhesives. Now he's learning a paint business from a young gentleman, Mr. Nitin. Nitin is our paint partner, the company which we have acquired 51% stake. You can interact relating to paint because he knows better than me. Better you interact with him directly for the paint.
Atulji, no need introduction. He is taking care of our this sanitary ware and the faucet division. This is the team which we have brought. But I think much, much bigger team we are having in Ahmedabad. Every division we are having the professional people working, whether it is HR, whether it's IT, whether it's a purchase division, marketing. Many from IIMs. I don't know how many people are working in Astral now. Very, very big team, I can say. As Sandeep rightly said in the initial remark that today Astral family is a 6,000 people family, it's not a small family now. Now again, coming back to the financial side of the company, let us focus over there. If you see the revenues growth of last four year. Why, why we have put the four year?
Last two-year numbers will be even better than that. We wanted to show you the pre-COVID base also. Because of that, we have taken a CAGR growth of four years. You can see from here that we are growing at a 22% CAGR growth of last four years. Though there was an adverse situation of COVID in last two years, but in spite of that also, we have delivered excellent numbers, I can say. Last year was the abnormal year where we have grown 38%, though we have promised in our last presentation that our company is expecting to double our top line in next five years. Practically 15% CAGR. Again, that we have delivered 38% growth.
Similarly, in EBITDA also, you can see that last four year growth is much, much better than the top line growth that is 28%. Last year, though there was so much of inflation, in spite of that, we were able to grow our EBITDA by 19%. Similarly, PBT also we have grown 35%, and last year it was around 21.5%. PAT is the same pattern, 41% is the top line, and last year it was 23.83%. Similarly replicated in EPS also and same thing with the cash profit also. This all presentation will be available to you, so no need to write any numbers because shortly we are going to upload this presentation to the BSE and NSE site and as well as our company's website also.
Pipe you can see the continuous capacity addition is taking place. We have grown capacity by almost 9% in spite of utilization was low because we were having preplanned CapEx scheduled because we know that the utilization last year was just 52%. In spite of that, we are continuously adding the capacity because we wanted to decentralize ourself. We started our journey with West, then we entered into the Southern market, so we put up a capacity in South, then we entered into the North market, and now we have just recently entered into the Eastern market where the tank business is very happily to share with you in the very first month of launch of tank, we are going to do INR 1 crore of business from the East.
That is a very, very encouraging number for us in the very first month itself. Pipe we are going to shortly start in the East. Still pipe machines are being installed, but production is not come. Similarly, sales value also you can say in a volume terms is 9.5% of the last four years CAGR, which is also a very, very healthy growth, I can say. Perhaps we may be one of the best company in the volume terms in the industry in the last four years CAGR basis. This is the working capital. We have always communicated to the investor community that Astral management is very, very serious about the working capital side. You can see continuously we are always trying to improve our working capital cycle.
That is why you can see we are sitting with a sizable cash, though we are doing a lot of CapEx. Last five years you've seen in the last previous presentation of Sandeep that we have spent INR 1,000 crore in the CapEx in last five year. The actual fruit will come now. Because somebody was asking this morning the question to me that do you think that the ROCE will be maintained? I was explaining them that last five year we've already spent INR 1,000 crore, but actually the utilization has not taken place. Because of decentralization of plant, we keep pumping the money on the CapEx cycle. The real utilization will come because now we are expecting the demand scenario will change because sizable demand is there at the developer level, and most of the good developers of the country are adjusted with the ready inventory.
The moment ready inventory will be down, then there is a high probability that the new construction activity will take place. We are quite confident that normally if you see the cycle of real estate, whenever the new construction activity start, it remain five to seven years time. We are personally feeling that next five year will be the good year for the building material industry. You can see here on the working capital cycle that across all the parameter we have improved. Our net working capital cycle has come down from 18 to 12 days just. That is one of the best thing I think Astral has done in the last two year during the COVID period also we have tried to improve our working capital cycle.
Adhesive business also, if you see the CAGR growth of last four years, it is 17%. Last two years was a much, much better growth. Last two year CAGR was 31% because you know that we accepted our mistake in adhesive and we corrected that also. I'm sure you must have seen our con call commentary that we were telling that we did the mistake in our distribution network and all. We corrected that and that is why two years our growth was impaired. Now we have again come back and we are growing at a very fast rate. That is why you can see the two year CAGR is almost 32%. Last year it was 37%. Now we are back.
As promised in our con call last year in the Q1 that we are targeting to be INR 1,000 crore company in the adhesive business, I think we have delivered that. We stand by with our commitment what we have done to you guys. EBITDA also 14.5%. Particularly this year EBITDA was under tremendous pressure because of the chemicals. You all know the chemical cycle has wreaked havoc. Nobody thought that many of the chemicals will be the 100% price rise. Even some chemicals are 200% price rise also. Normally in the retail industry all the biggies in the history they have never ever done the price rise frequently because normally retail price doesn't change frequently. This time is a black swan kind of event I can say.
Because of that so much of inflation is there into this adhesive side, in the chemical side particularly. Because of that pass-through is taking place with little lag. That is what exactly happening with us also. We are also passing through with some lag, and that is why some pressure is there. The moment the reverse cycle will start, I am sure and confident that our margin will expand very fast the moment this chemical cycle will reverse. In some chemical, it has already started reversing also. Still, we cannot say with a conviction that it will shortly going to reverse, because still the supply chain is disturbed at a global level. China problems are already there because of their zero COVID policies. Very, very difficult to predict at this stage.
At least it looks that now some in near term it is going to be there, and a peak has been formed. Now from here on at least it will not go much upside, but the downside chances are very bright. This is the break-up of our revenues. Plastic business is contributing 77% and the adhesive is 23%. More or less we have maintained. Hardly 1% gap is there between the adhesive and the plastic business. Plastic business little bit has increased 1% mainly because of the storage tank. We did about INR 45 crore last year. This is the consolidated number, including adhesive and the pipe. More or less it is same range. You can say the top line of last four year CAGR is 20%. Last year was 38%. EBITDA was 26%.
This year is 19%. Last year was a sizable element of the, you can say, the inventory gain also because of the continuous price rise in the polymer side. This year it's the other way around. In the last quarter, some inventory loss was there. Because of that, the margins are coming back to the normal trajectory, which we are always guiding that the normal broader range of the business will be around 16%-18% kind of EBITDA. PBT also similar fashion, 31.78% growth, and the last year it was 21.6%. PAT, EPS and all cash profit is following the same pattern. Here also you can see that the working capital cycle, we have always communicated that we are very, very cautious about that.
Adhesive also, we are continuously trying to improve that cycle because our major focus is on B2C side. Our 90%-93% of the business is coming from B2C side of the business in adhesive. You can say B2B side is hardly 5%-7% kind of business. Today brand is getting stronger and stronger and we released the first ad of Bondtite after entering into this adhesive business. That ad has got a very, very good response. Unfortunately, that ad is not running right now, but we'll do it post my presentation. We'll show you the ad. I'm sure many of you must have seen, and most of you are in my WhatsApp group also.
I keep communicating all of you whatever the development is happening at the company level and putting the ads also in the group. There also we have reduced the working capital cycle from 37 days to 31 days. This is the net cash position. Two years before we were in negative cash base, but now substantial improvement is happening. This is the net position I'm telling you. Cash minus whatever the debt is there. Last year it was roughly about INR 400 crore and this year again increased to INR 556 crore. In coming three years we are expecting a sizable cash flow to come. In spite of sizable investment into the CapEx acquisitions, still we are expecting that the cash flow will be sizable because you have seen the number.
This year we were close to about INR 500 crore of PAT. You can understand the kind of cash flow we are going to generate in the coming time. Majority of the CapEx cycle I think will going to end by FY 2023. Actually, originally my plan was FY 2022. That is what we communicated to you earlier. Because of the new addition of the businesses and, like, we added the tank business and now faucet and sanitary ware and now the paint. Because of that, it is delayed by one year. Otherwise we were supposed to end our CapEx cycle last year itself. Now this CapEx cycle is going to end next year. Afterward, I think we will be focusing on the more on the utilization side of the business rather than putting more commitment to the CapEx cycle.
Whatever amount will be required, that will be on the working capital side. Working capital cycle is also very, very healthy and robust, so I don't think much working capital amount is also required for this company for the growth. Except the new businesses, because new businesses I have to also learn because I am also learning the sanitary ware and faucet from Atulji. Paint, now I will learn from Nitinji. Based on that, I think we will work out how the working capital cycle is going to pan out for these businesses. This is the opportunity where Astral is there today you can see. Plastic pipe is roughly about INR 35,000 crore industry. My number may be little bit here and there because I don't have authenticated number, so my team has picked up from some source.
Number may not be accurate a little bit here and there, so please excuse for that. We are continuously increasing our market share into this plastic pipe industry. You can see from the last two years where the industry were degrowing and Astral were delivering the positive growth in the volume terms also, in the value terms also. Water tank is just the beginning of the journey. I can say we have just acquired hardly 1% kind of market share. Shortly we are targeting the next three to five years span, we should be at a minimum 5% kind of market share. Paint, again, a beginning of the journey. Market opportunity INR 55,000 crore. Again, that last year the Gem Paints did around INR 215 crore.
There also sizable opportunity is there. Adhesives, again, INR 16,000 crore opportunity in India, where our market share is 4%-4.5% kind of level. There is also enormous opportunity there. We are still to touch the INR 1,000 crore mark. You can see. The immediate competitor is maybe almost eight times than our size. We have ample opportunity into that business also. We may grow easily 15%-20% should not be a big challenge to us for the growth into that business also. U.K. is extremely doing well. I still remember we bought a U.K. company, 80% stake at INR 44 crore. This year, U.K. company has delivered more than INR 44 crore of EBITDA. You can understand whatever the business where Astral is entering, we seriously look into that and then only we take the position.
Without that hard work, we don't just for sake of entering we want to. Paints, tank, we acquired a company which top line was hardly INR 20 crore. We doubled the top line, INR 43 crore in one year, and this year we are talking about INR 100 crore. Same thing, Resinova also when we acquired it was INR 150 crore and INR 160 crore. This year we crossed INR 700 crore. U.K. also, when we acquired it was close to about less than INR 100 crore, close to INR 100 crore level, and this year they crossed the INR 300 crore mark. Whatever the acquisition we have done, we have tried to grow them, but at the same time, our strategy is very clear. We don't want to grow so fast. We don't want double, triple or four times growth in a shorter period.
15%-20% CAGR is more important for us, and that is why in every con call, I always communicate to you that we believe in consistency. We don't want to have a kind of growth. Whenever there is abnormal growth, that time I always get more under tension. That's what is there that all of a sudden growth has started coming. We always believe in the consistency and in future also, we will try to see that we maintain that consistency. Valve, again, a new opportunity. I have intentionally not put the figures of valve because I don't want my competitor will come to know that what Astral is doing into the valve business, because it's a very highly specialized business for us and a very high value-added business and a high margin business for us.
That's why I've intentionally not put it. I can put the opportunity what is there in the valves. Sandip rightly said there is a sizable opportunity in the export market also in the valves. Many people have started inquiring for that also. We are not in a full-fledged mode. Right now we are still focusing on the Indian market. Once we will see the response in the Indian market and how the feedbacks are coming for the quality aspect of these valves and all, then we will open up the market for the export also. Faucet and sanitary ware, I think Atulji is there, so you guys can interact with him. There also we can see there is a huge, huge opportunity there.
Today I was just a couple of days before I come to know from the market only that a leader in this faucets and that business, Jaquar, has a waiting period of 30-45 days. You can understand the kind of opportunity there. A brand like Astral definitely will do some good business in this segment also because 70% of Astral's dealers are into sanitary ware and the faucet business. That is what we have done the survey before entering into this business. We are quite confident that in this segment also we should do reasonably good. I don't want to commit too much of number what Sandeep has communicated. I'm a very conservative person, so I don't want to unnecessarily give you a too much of bigger picture.
That's why I have clearly mentioned in my presentation that we are targeting INR 1,500 crore additional business from our new business activity, but chances are that we can cross that ballpark number also. Key takeaways. Basically, I think most of that we discussed. Good demand is there in the system. April, May was also equally good numbers, so nothing to worry on the number point of view. Last year, the April, May base was low. On that base, I think we may be growing at 70%-80% in this two month. But that's not a real number I can say. We have to see the coming quarter, how it is going to pan out, because two-month number on the lower base doesn't make sense. I don't want to give you the exact number what we have done.
Similarly, unorganized players are continuously under stress, so that will continue with the time also. Again, the polymer prices are fluctuating now on the reverse side of the polymer. So that is going to give more and more pain to the unorganized side of the people. So companies like Astral, who are a cash-rich company, I think they will take the highest advantage. Not only Astral, other company can also take the advantage out of that. But it's a good time for the organized player to grow the market share in this kind of environment. As communicated, recently launched products are going to give us a good growth. Normal businesses are already giving us a good growth. So now the turn has come that, our new product contribution will start from the current year. The real number will come in the next year.
In my con call also, I said that FY 2024 will be the bumper number for Astral. That is what we have planned well in advance, and that we already communicated you in the call also. Few launches will keep coming from the Astral family. Whether it is a adhesive business or whether it is a pipe business, we'll keep continuously adding the new product. Our R&D team is continuously behind that, and they are searching many product like DrainPro. Sandeep rightly said that in the very second month, this month, we are targeting to cross INR 1.5 crore of business. A new product, if it is contributing INR 1.25 crore in the second month of the business, so I can easily say this product can be a INR 300 crore-INR 400 crore product over a period of time.
I'm not committing to the five-year or seven-year, but that kind of potential is there for that pipe. It's, quality-wise, this pipe is much, much superior than the available pipe in the country, I can say. That is the strength of that pipe. Only time will say how it is going to spread out over a period of time.
East India tank has already been rolled out from the Santej plant, and shortly we are going to open up this pipe factory, pipe production over there. Hopefully East is going to contribute reasonably good number. If you see our immediate competitor in East, the number one guy is doing close to about INR 1,000 crore business in the East. You can understand the kind of opportunity there in the East where Astral is just doing a beginning of the journey. We have a base. It doesn't mean that we don't have a base, but our base is still small compared to our immediate competitors. We can do reasonably good growth in the coming time from the eastern market also.
Valve we already discussed, so we are expecting the valve should also to contribute good, not only in terms of top line, but in the terms of bottom line also. It is going to give us a good growth in the coming time. This is what from my side, thank you very much. We all three are here for the Q&A session. Thank you.
Andhra ke granite ko Rajasthan ke marble se jode. Ekdum tight. Bondtite. Bengal ke sheeshe ko UP ke tambe se jode. Ekdum tight. Bondtite. Punjab ke pittal ko Haryana ke lakdi se jode. Ekdum tight. Bondtite. Arre Kashmir se Kanyakumari tak India ke alag alag materials ko alag alag material se jode. Ekdum tight. Bondtite. By Astral Adhesives.
Hello. Thanks, Sandeepbhai, for giving me this opportunity. It's like you mentioned, it's over three years since we last met in this kind of a gathering. Couple of questions, two clarifications that I wanted. You mentioned that the Dahej factory would bring two new chemistries. Does this mean new product range or a better way to do the existing products?
It is not the new chemistries. Some of the chemistries which are major for us, we are going to shift to Dahej with a state-of-the-art plant which will be highly automated with high safety levels. Most of the raw materials which we used in making of these products are made in Dahej or surrounding areas, which will save us substantial amount on transportation. At present we buy drum packings. There we can buy in bulk. When we buy in bulk, the cost of drums as well as drumming and all goes away, so we can have a substantial saving overall on the raw materials.
Right. Thanks. Second point is on the valves. I believe this would be entirely in-house facility that we would have, because I'm sure this is a highly critical item where secrecy, et cetera, would have to be maintained.
It is 100% in-house facility, right from manufacturing to assembling to testing. It took time because all these molds were not made in India, which are coming from abroad. COVID delayed the manufacturing of mold as well as the technical people who had to come from abroad and set up the manufacturing process. The whole project got delayed by over a year. Now everything is up and running.
Right. First question now is on the sanitary ware and faucets business. While you've given us the opportunity size, just to understand what is it that we are looking at in terms of initial launch, to cater to a pan-India presence, to cater to some part of India, or how are we looking at this launch?
The launch will be of entire pro-product range. We'll be starting from the middle, very low segment, middle segment, upper and higher upper. Higher upper, our focus would be much lesser. We would be focusing on the middle two segments with the entire range is coming at one go. Astral is not coming with a part of the range, which I never wanted to give a wrong signal to the market. To make the reach of the product, we will go phase-wise. We'll go first with west or three or four states will open. What I see from at present, all our key distributors are coming to Goa for the launch. First time in the meets or somewhere people would send their son or second generation.
Here, all the decision making makers in the distributors who joined me 20 years back are there, and everyone is excited to take up the product. Not to go in any rush, we will go zone-wise opening, and this whole strategy will be opening one zone, stabilizing it, go to the other zone. It may take us six months to eight months to get a pan-India coverage.
Would it be correct to assume that this is more or less a outsourced product for us?
It is-
Maybe in more like dedicated suppliers, et cetera, but we are not spending anything on the CapEx.
It is outsourced. There is nothing on the CapEx which we have spent except the divisions which we have, the executives we have, and we have a state-of-the-art, huge warehouse where we have a R&D, some research and development facility. We have designers in-house, and we have a testing facility, very high-end testing facility. Every product will come there, will be equally tested in our QC, and then will go to the market.
Sir, second question is on the paint business. It's considered a very sexy business. A lot of analysts like to talk about this business. We had a paint company which came last year and it shook the market. It swept the market off its feet. It's a different thing that the price is now less than half than what it used to be. Couple of questions on this. You are acquiring a company down south. You do have ambitions to spread the paint business. Paint has a lot of logistics issues. It's very, very expensive transporting finished goods, raw materials. How do you plan to take this company forward?
Even though you have a slow growth planned, but to have a presence in, say, other than the five states to move up to Central India, Western India, you need more capacity because I don't think the present capacity is enough. What's the game plan?
What is in my knowledge I'll answer, and rest I'll tell Nitin to add, because we have just completed the process. We know that we came into faucets and immediately coming into something has raised a lot of questions for us. Immediately after our announcement, next day somebody comes and announce thousands of crores behind it has crossed, has put us more in some tighter spot. As far as I have understood going there in the decorative paint, but you can correct that transportation of paint is not a costly affair. Transportation of paints to warehouse is not a costly affair. Second, whatever he sells is turnover. We Hiranandani is arranging a visit to Bangalore to see his new facility shortly, because we need to clear the waters that what is going around and what exactly is there, what we have gone into.
We will show the new state-of-the-art plant. The capacity which is there is four times what they sell at present. We are not going to run to four times overnight. At least as I told that two years we don't foresee any CapEx. Secondly, there is nothing to add in this chemistry. He has every product. They have every product. There's nothing that new technology has to be done. We have to just keep on improvising and improving, which is a process. Globally, it goes on. Practically, why we are also slow and conservative, we don't want to throw huge numbers and put any misleading things. Second, it is a synergy to take adhesive and paint together. We are not here to multiply or multiplication to anything or add multipliers here. We are very focused on our businesses, which has been there.
You have been from the first meet to this meet, and when you start with questions we are lucky for that year. You always have to start for the first questions. That year goes very good for us, so we'll be lucky this year also. Like adhesives, when we acquired this same forum kept on asking that number one is there, how will you exist? How will you grow? What will happen? Which chemistries is you will grow? We at that time also said we are not here to compete. One will remain one. One is there to, and we salute them for the hard work they have done, and they will continue to do the hard work and remain one. We are here to build our own brand and business, and we have done that. We have done lot of chemistries.
Somebody had to buy a company to compete with us and things happen all around in business. Here also we have a company who has a 81 to now known technology sales in the market. We have a base, you cannot say huge base, but a real base. There are a lot of confidence which comes with the base, and that is what we'll work to build on at a reasonable level. Again, very clear, no cash burning for both the businesses. We have very clearly defined the financials of faucet business that we want not to burn cash, but first year would be tough to give margin numbers, as you all know. If we don't burn cash, this is a great thing. Here it's a profitable company which will be keeping adding a growth and with maintaining a margin.
I think we have a very clear mind and strategy around, and we have enough on the plate at present. We will be working for five more years to build this plate. There will be no addition to the plate. We have everything on the plate now. Okay.
Sir, like you mentioned that you are not worried about somebody announcing INR 5,000 crore CapEx to become INR 10,000 crore. I think that is just a thought behind you, but no effect on you.
Basically, it is always a thought, if you have a confidence as a promoter and as this brand. Bigger brands will come with big numbers. India is a big 1.3 billion people. I am going with my own base. If I was not there with him, he would have grown at 15%, which he's growing. Relatively, this business is obviously going to grow at 15% anyway. With my addition, at least I'll add something. I'm not worried about the big numbers which are going to come. Everyone would have to work hard, and every end user and every dealer wants alternates. There is a market for alternates for everyone, and every end user also needs to work on alternates.
Sir, last question. Sandeep, Hiranandbhai. Our capacity utilization is around 52-odd percent, and we have quite a bit of capacity. Considering that we are now out of COVID, would it be fair that we would be back to our 75%-80% in the next two to three years?
There are high probability that we will come back to that level of 70% utilization or so, because now new CapEx will be hardly anything. Definitely that is possible. Secondly, what your question was that I can just add to what Sandeepbhai has communicated, that the paint business is a very, very high asset turn business. Normal asset turn, if I'm not wrong, Nitinji, you can correct me, it should be somewhere around 8 x. 8 x asset turn?
Yes.
Yeah. Even if in future, suppose we are growing a little faster than what we are planning at this stage, and we have to add the CapEx, it will be very minuscule CapEx. It cannot be too high CapEx. Secondly, chemistry-wise, I think plant-wide, paint and adhesives are more or less the same plant, and we are putting a state-of-the-art plant in Dahej. We have kept some provisioning for this paint business also. In future, not now in next two, three years, because we have enough capacity right now. In future, suppose we feel, what was your question on logistics side? If we feel that logistics is an advantage to our favor and we want to add some capacity over there, we have space available with that.
We will spend some amount of money and we can create the CapEx also next three, four years down the line. Not now, at least. It's not a difficult thing to do.
Thanks. Thanks a lot for all those questions, answers.
Hi, sir. Thanks for taking my question. My question is, sir, Astral was largely behind the walls with the pipes and adhesive business. Now with the tanks and also faucet and paint business, with the paint business, you're coming on the walls. Can we expect in the future we get a more products like, consumer durables or something like that on the table? Because you have huge cash of more than INR 500 crore, and also the CapEx is largely over by FY 2023. Can we expect new product coming into the line by next couple of years?
I think a lot of things can be done around this business, which both these segments we have come in. Either going for anything else, I would go for my own manufacturing facility of faucets or something if I have additional cash, rather than going to a new product. We are very, very clear from all the seniors, all the family members, all the people who are there in the company and very, very clear in our thought process that we need to do a lot in these two segments for next five to six years. We'll not bring in any surprises at all.
Yeah. Thanks, sir. Next question, you talk about DrainPro, which we recently launched. How the-
DrainPro.
Yeah. How is the pricing different from the PVC or CPVC pipes?
5%-7% costlier than normal drainage PVC pipe.
Type B.
Type B.
Thanks, sir.
Thank you.
Hello. Yeah, good afternoon. Sir, what will the CapEx for Dahej plant and that is mainly for the, only for the raw material or are we putting capacities of PVC pipes or CPVC or adhesives?
No, no. We are putting a plant for the finished product, not for the raw material. Raw material is the added advantage what Sandeepbhai communicated. Like today, Sandeepbhai said that we are buying in a drum. What happened that buying the product in drum packing is always costlier than buying in a tanker. Now because Dahej we have enough space available with us, so we will buy in a tanker load. Secondly, it will be adjacent to our factory because most of the chemical factories are in Dahej area because it's a chemical zone, and our factory is also falling under the chemical zone only. Because of that, it will be added advantage into the raw material side. Otherwise, we are putting up a factory for the finished products only.
CapEx will be roughly about, I think INR 70 crore-INR 75 crore for the first phase, and second phase may be another INR 30 crore-INR 40 crore. Total all put together will be INR 110 crore-INR 120 crore max.
On the adhesive side, what was the volume growth in last year? Because
I think it is very difficult to arrive the volume growth in adhesive side of the business because products are selling in a different measurement. It is very difficult. Some are selling in PCs, some are in a kg base, some are in a liter base. It is very, very difficult to arrive. Definitely I can say if I can convert, I can give you the exact number. Maybe close to about 25% kind of volume growth. Because price rise in the adhesives was very limited last year. This year, we have on the contrary taken the price rise in the month of April and in the month of May also. Majority was of the volume driven growth last year. Yeah.
Thanks.
Yeah. I had a couple of questions on cash management. Firstly, is it possible to share that what would be your CapEx in FY 2023, and in which areas would this CapEx happen? As you mentioned, after FY 2023, there isn't much CapEx for the next three to four years. What would be the maintenance CapEx levels from FY 2024 onwards? Secondly, given that you have so much cash, and I think if my numbers are not wrong, with a INR 24 EPS , INR 3 kind of dividend last year, your dividend payout is extremely low. Why are you accumulating so much cash on your balance sheet? Given that you're expecting so much cash flows, why not have a higher dividend payout close to 40%-50%?
Like, as per the commitment with the paint business, we have to pay INR 200 crore immediately to them. Now shortly we are going to pay INR 200 crore because some paper formalities were pending. Hopefully this week only we are targeting to pay INR 200 crore to that. Secondly, sanitary ware and faucet business launch is now. We need some working capital for that also because we have to do the lot of purchases and we have to keep certain minimum inventory, and to some extent, some receivable will also be outstanding in the market. We need the additional working capital for that. In addition to that, we need some CapEx money for our East plant because steel pipe facility is not still operational. Some CapEx will go into that.
Plus regular, you rightly said, the maintenance side also, INR 30 crore-INR 35 crore or INR 40 crore goes into that also. We keep continually adding the few molds and all. There also INR 30 crore kind of things will be there. Plus we are putting up one facility in Telangana also. There we already committed INR 25 crore on land. The first phase we are targeting to put up this tank unit. There also we have to spend another INR 25 crore-INR 30 crore for the tank project. Existing projects also some CapEx outflow is committed and then the additional working capital for this. Then there is an outflow of the paint business to the promoter from where we have taken the 51% stake. Because of that we have not distributed too much of dividend at this stage.
Definitely once our plans are chalked out, because we have just acquired the paint business, so we have to internally discuss what are our plan and what is the commitment. Based on that we will be deciding the final cash outflow. Hopefully in another couple of quarters we'll be done with all our CapEx plan and all this working capital requirement and all this outflow of the paint also. If required, definitely it is your money, it is not our money, so we have no right to keep money spending, investing in 4% kind of return. You guys are more intelligent to invest that money, rather I invest because I'm not an equity guy. Neither I have a mandate to put money into the equity. I'm putting in the liquid fund only, so generating only 4%.
Definitely we will give back to the shareholders only or maybe management work out, we may go for the buyback options also.
What will be the total CapEx in FY 2023?
Still not finalized because now the paint and all these things have come, so we have to work out final CapEx. I think it should be somewhere around INR 150 crore kind of CapEx will be there in the current year. All businesses put together.
Yeah. Hi, sir. Sir, congratulations to you and your team for your journey so far. So my question is on the valves business. So you've mentioned in the presentation that it's a INR 5,000 crore opportunity. Could you explain, is this just a domestic pie or does this include the export potential also? Also, what kind of competition do you have in this business, both from domestic or export, you know, market scenario? And probably the third question is, do you envisage yourself getting the same market share that you have in the pipes business around 10%, and what time do you think you'll reach there?
I think valves we have added some potential for the export also. Now coming to your question of 10% of the, whatever the market opportunity, it will take a lot of time. It is not easy to acquire this INR 500 crore of revenue from this new business. There's always a journey. It will year-on-year keep increasing. But definitely 10% is a difficult task in the next three to five years time. Yes, over a longer period you can think on that line, but at least not in the immediate phases. Now, as far as the competition is considered, I think Georg Fischer and all other companies who are selling these valves in Indian market, majority are imported valves. No one is manufacturing in India all the specialized valves.
Most of our competitor will be the overseas multinational giants only, so will not be a local people. Too much of demand is there in India also. Close to about, I think INR 2,000 crore opportunity will be India itself.
Sure, sir. Thanks a lot.
Hi, sir. Theo. Sir, you mentioned that you are expanding in rural areas in some of the states, especially Gujarat or Rajasthan. What kind of differential growth you are seeing there in pipe segment in rural areas? If you can highlight, you know
At present, this project started just six months back. As far as I can understand, if we are at present doing, say, INR 100 of sale, if we cover the rural India, at least we can do 20% of it from rural. Rural is huge, but rural is something which takes its own time to develop. One, it is more ruled by the local brands. Second, service. Third is the confidence of getting the material on time. Fourth is the major thing is that their cash cycles, because we have kept the rural market as advance payment only. If somebody in rural retail wants a material, he has to go on our special app which is given to him, punch the order and make the payment, then only go.
We don't want to create too many touchpoints where we have to go around and for the money. We have made a complete system. Yeah, it is working very well. By next one year, we can exactly quantify and let you know what exactly rural opportunity will come for us in the piping business.
Sir, this is only for pipes or this will rural, you will do other products also same channel?
At present, we have only started with pipes. We will study and we can add things as we have a whole family of products which is in front of you. At least for one year to stabilize, we'll only be going with pipes. That too, we have opened the fast moving products. We are not giving like somebody wants. No specialized product will go to rural. The segment is the PVC drainage, the PVC agriculture base, the CPVC and the plumbing PVC. These are the only four segments we cater to the rural market, and the water tanks. These are the only moving products in the rural market.
Sir, your paint business, INR 215 crore top line, balance sheet kitna bada hoga?
Like balance sheet, there are two elements. One is the operating part of the balance sheet, and secondly, the non-operating part of the balance sheet. That is why we are going for the demerger exercise, and the demerger will take place by the year-end. Balance sheet side mere ko lagta hai ki close to about INR 340-INR 350 crore kind of will be there. All put together, I'm telling you one side. Effectively, if you work out, CapEx was roughly about INR 40 crore or something like gross block is there, INR 40 crore-INR 45 crore is gross block is there. There is a working capital and also debtor days are close to about 55 days right now. Inventory will be another 30, 40 days kind of inventory will be there. Some creditors are also there.
I don't have exact handy number with me, so once this, all this demerger exercise and all we are going to complete, then we will be able to show you the exact number. Right now it is mota mota number will be like that. Still you need any specific number, you can call me anytime. I will give you that number to you.
I had a couple of follow-up questions.
Yeah.
Yeah. There are. You as of now report numbers around two businesses, pipes and adhesives, when you report numbers. Now, going forward, there are going to be tanks, valves, sanitary ware and faucets, and paints. Will you be adding four new subdivisions and reporting numbers, or tanks will be part of pipes and others also get somewhere else? How will the reporting happen?
To be honest, we have not still finalized how reporting going to work out. Definitely we will prefer, still not a final decision, but still we will prefer that we make a plastic as a one category and then sanitary ware and the faucet will be the another category and the paint will be the, and adhesive will be the third category. This will be the broader three category. Still we are internally discussing and we have to see how the statutory guidelines permit in India for the segmental reporting. We have to study that also. Based on that we will finally take the call.
Yeah.
Definitely we will give you the number. From that you can get some sense of top line and the EBITDA of respective division. That is what we will see, that how best way we can communicate. May not be a segment, then we will be giving it into the presentation or somewhere so that you can get a sense out of that.
Among the new businesses, last year you had only tanks, right? Which was around INR 45 crore revenues.
Yeah.
Okay. Now, lastly, last question is, in terms of the paints business, from which quarter will it start getting consolidated into the numbers?
It will start from the Q1 itself. Because as per the Ind AS guideline, the moment you take the controlling stake and board seat over there, you have to consolidate. May not be equity transfer, but as per the Ind AS guideline, they have defined the controlling stake.
Okay.
We have already agreed and signed for the controlling stake, so we have to immediately take into the consolidation.
Okay.
Q1 onward it will start coming.
What was the profit of the paints entity last year?
I think we have given the EBITDA level number, and the PAT was close to double-digit, close to 10% kind of level.
Okay. Thank you.
Good afternoon, sir. Thank you for the opportunity. Sir, I have first question on your network expansion. If you can give some detail for network expansion, particularly region-wise for FY 2022, and what is the planning for next one to two years?
I think region-wise, we don't share the network, but definitely the overall number we have given in the presentation. You can see from our last presentation, in the current presentation, from there you will get the exact number. Even I don't remember the last year what was the exact number, but I think in the presentation it is there. In the last year presentation also, we have given the network number, and this year is also given. Only thing, the difference which I am seeing today, now the numbers are more authenticated because now we are doing the KYC of each and every people, whether it is a plumber, whether it is a carpenter, whether it is a dealer. Now because we have a robust systems in the organization. Based on that, now we have authenticated data.
Earlier numbers were okay, but I can't say with 100% accuracy that these are the pakka number. Now this is the change. Now with this technology advantage, we are having the authenticated data. You can rely definitely on these data.
What would be growth for next one to two years? Any ballpark indication?
It depends what products we are entering into, what geography we are taking entry. Based on that, it will be decided. There is no mindset of the management that we want every year this much of the increment. That is not a mindset of the management. We only focus which product we want to enter in particular geography, whether the existing, who are our benchmarking with, which competitor is there, what is his network. There are so many parameters within which we are working. There is no mindset of the management that we want 10%, 5% increment into the network. But definitely I can say the way brand Astral is getting stronger and stronger in the market, this reach will keep continuously increasing over a period of time.
Now from 8 June, we have a final hearing with the NCLT for this merger of Resinova and Astral. With that merger also, there is a high synergy between two, I think, dealers network. We have to see how best way we can utilize that thing and we can further grow into that segment and/or maybe you can say the dealer network also. There is a high synergy is there post-merger. We are internally debating how best way we can utilize this thousands of data today we are sitting with it. We have geo-tagged each and every dealers of Astral. This all is going to help us in the long term, but it's too early to comment on that thing.
Let the merger process get over, and post that all the seniors will sit and work out the strategy and we'll see how best way we can utilize this data.
Second question is on ESG. As we are chemical and polymer industry, one of the highest polluting segment. What is roadmap for next four, five years on ESG side, sir?
I think last con call also we have declared our result of the ESG also, and you'll be happy to know that Astral is much ahead in the ESG requirement. Though it was not compulsory last year, we have published the sustainability report and our score was higher than the industry average. We scored around 39 or something. Our score was even currently it is still not published. I'm sure it will be even a little better than that. Now, as far as your comment on the polluting industry, sorry, we are not discharging water, so it is not a polluted industry. We are not a chemical which other chemical companies are like that. We don't discharge the water, so it is not falling under that kind of category.
We are self-consuming and recycling the same water.
Thank you, sir.
Good evening, sir, and thanks for the opportunity. I actually wanted to ask about your pipe segment. We have seen roughly around 10% volume growth during the year and which is much, much better than the leader. What I would like to understand is we had higher share of CPVC because of which we could grow much higher than the peers. The question would be, if I look at last four to five years, it would have been a broadly 9%-10% kind of a CAGR growth in terms of volume versus pre-COVID level, we generally used to report double-digit growth rate. What do you think has been the reasons for coming back to that 9%-10% growth? When do we see this growth moving back to those double-digit levels that we used to see?
If at all you could give some industry level numbers in the sense that, you know, how much industry would have grown versus your growth?
I think compared to industry, we are still better. We are still growing at close to about double-digit, 9.5%-10% kind of level. If you see the last two years, I don't have an authenticated number of the current year, but last year industry de-grew by almost 16%-17%. When the industry was de-growing by 16%, 17%, we delivered 4% volume growth last year. It is a clear message that we are gaining the market share. In the current year also, we are of the view that the industry might have grown hardly 1% or 2%. Again, than our growth is still 9.5% or 10%. This year also we have gained the market share.
Secondly, you are right, we are predominantly a leader into the CPVC market, so we are growing reasonably good into the CPVC side. It was unfortunate that, we acquired the Rex company and post-acquisition because of this COVID and all, the government spending become standstill. Because of that, we sizably degrow into that. You are seeing the number which are the consolidated number. Because of that, it looks that Astral has grown only 10%. If I remove this thing or you remove the, you can say the agriculture degrowth, or you can say the, you can remove the column pipe because the PVC price has gone up substantially high, so people move to the HDPE kind of level. Because of that, it looks like 10%.
If I remove this abnormal region, then my existing business is still 15% +. That is what previously we used to grow. Now in the future also, we are quite confident that if now the industry will start performing, if the industry will grow 5%, 7% or 8%, which is the historical GDP multiplied by 1.5 x. Normally, the plastic pipe industry has grown. If that is the case, I think we will be back to our normal numbers of 15% kind of volume growth. Still, market conditions are not that lucrative. I can't say with a high conviction that will be like that, but we are aiming to grow like at that level. It looks that now the way ready inventory has gone down in the system, new construction activity will start.
We have to pray that commodity price come down, and that will give the further support to the volume growth. Till the commodity prices will remain high, the construction activities are growing, but not at the pace which is required to be grown. We have to see how the commodity cycle is going to work out. PVC has already come down close to about INR 120. Reliance may be announcing tomorrow, day after tomorrow, another INR 5-INR 6 cut or so. Ultimately it will be benchmarked with the imported price. CPVC, lot of short supply there, so hardly any possibility of downward turn in the near term. Yes, definitely, ultimately, the local supply has to come in the system.
Like when the local supply will come from Meghmani or maybe DCW and all, then the CPVC will be stable polymer then or maybe little downward trend. If that is the case, I think we can grow our volume much, much faster rate than what we are growing at present.
I think let's have one to one now and, if there are any other questions we can answer one to one. Already two hours have gone. Okay, we'll take a last one.
Sir, I have a query on the sanitaryware. Like, which geography you are first focusing on and what kind of a product, like a premium or economy segment you are going to cater?
We are having the complete range from economy to premium. The focus would be on all the segments, but you cannot say the downward economy, but the middle two ranges will be focused, which has a good market share actually, why to focus. I think we'll start from West our launch and move to other parts of the country.
Okay. Next question, sir, related to your earlier products you had launched, PEX and silent pipe . How they are doing now?
Which one?
PEX.
PEX we have launched, but PEX we import and sell in our brand. They are selling well, but we are not at present too much focused. Because of this COVID, we cannot meet consultants and market. Because of that, the activity was very low. Still it will take some time for us to do complete marketing activities on this. The silent pipe is doing good. I said in my presentation also that silent pipe is growing at a good rate.
When valve is going to, you know, report the numbers?
What?
Valve.
Valve.
Valve already the launch is done. Already is available in the market.
Thank you, sir.
Yeah, we have a range. We have already displayed, I think some range.
Anything not reporting right now in the numbers?
See, everything will not report segment-wise. Valves and then tanks and otherwise, so we'll have to make a whole page of report.
Thank you, sir.
It will come in the plastic segment. Thank you everyone. Thanks. We look forward to again seeing you next year and with some flying numbers and hard work. Thank you very much.