Ladies and gentlemen, good day and welcome to the Q4 FY25 and FY26 results conference call of Finolex Industries, hosted by ICICI Securities Limited. 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 the conference call, please signal an operator by pressing star then zero on your touch-tone phone. I now hand the conference over to Mr. Arun Baid from ICICI Securities. Thank you, and over to you, Mr. Arun Baid.
Thanks, Sagar. On behalf of ICICI Securities, I welcome you all to the Q4 FY25 result conference call of Finolex Industries. From the management side, we have Mr. Saurabh Dhanorkar, Managing Director, and Mr. Chandan Verma, CFO. Now I hand the call over to Mr. Dhanorkar for the opening remarks. Over to you, Mr. Dhanorkar.
Thanks, Arun. Good afternoon, ladies and gentlemen. Welcome to the investors' conference call for Q4 FY25 and FY26 earnings release. We thank you all for your continued support and interest in Finolex Industries Limited all these years. Finolex Industries Limited has registered modest growth in pipes and fittings volume in spite of weak demand scenario during the quarter and the year. The operating performance of the company is muted mainly due to weaker realization on account of volatility in PVC resin prices. The company's endeavor to grow in the non-agri segment in pipes and fittings is ongoing. Let me now take you through some of the performance highlights. For Q4 FY25, the volume in pipes and fittings segment increased by 2% to 102,253 metric tons against 101,710 metric tons in Q4 2024, in spite of the weak demand scenario. Total income from operations was INR 1,172 crore against INR 1,235 crore in FY24.
EBITDA stood at INR 171 crore against INR 209 crore for the corresponding quarter. Although EBIT in the segment decreased to INR 108 crore compared to INR 133 crore in the corresponding quarter, we have registered a significant increase in EBIT per kg trend from the earlier quarter. EBIT per kg was about INR 4 per kg in Q3 FY25, which has now increased to INR 10.50 per kg in Q4 FY25. PAT stood at INR 150 crore against INR 161 crore in Q4 2024. Highlights for the financial year 2025 are as this: the volume in pipes and fittings segment was up by about 4% to 347,982 metric tons against 336,577 metric tons in the previous year. This is in spite of the weak demand scenario. Total income from operations was INR 4,142 crore against INR 4,317 crore in FY24. Volume in the PVC resin segment grew by about 13% to 222,708 metric tons.
EBITDA for the company stood at INR 476 crore against INR 584 crore for the earlier year. Profit after tax has increased to INR 778 crore, including exceptional gains, for the year FY25 compared to INR 455 crore in FY24. The company continues to have a strong balance sheet with a net cash surplus of around INR 2,535 crore as of 31st March 2025, compared to INR 1,820 crore in the corresponding previous year. We would now like to leave the floor open for questions. Chandan Verma, our CFO, is with me to take some of the questions, and I am here. Please go ahead. Thank you so much.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star then one on their touch-tone phone. If you wish to remove yourself from the question queue, you may press star then 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. Our first question comes from the line of Shravan Shah from Dholat Capital. Please go ahead.
Hi. Thank you, and congratulations particularly on the EBITDA margin recovery QQ.
Thanks, sir.
Yeah. Sir, a couple of questions. First, I wanted to understand in terms of the volume guidance for FY26, and also, if possible, if you can share how do you see the industry volume growth for FY26, and if possible, for CPVC, what was our volume growth in Q4 and FY25, and volume share?
Right. Basically, as a policy, we do not give exact projections for the year. Overall, this year, considering all the uncertainties, the PVC resin prices going up and down, in fact, from a big dip, now they have started recovering. The uncertainty still remains. Uncertainty about government policies remains. It is very difficult to say. The oil prices, there is a lot of uncertainties overall in the scenario. Despite this, I can say that our internal targets, which we have kept for our team, are definitely double-digit growth. I would not like to give that as a guidance because, as I said, as a policy, we do not give guidance. We do not see a spectacular year ahead in terms of volume growth. We would be focusing this year mainly on recovery of margins, which had dipped.
We are doing a lot of cost-cutting initiatives, and I would say cost margin improvement initiatives, whether it goes in terms of better pricing policies, better volume, better product mix. Our focus would be on recovery of margins. As far as the overall scenario goes, we definitely see growth, but I would avoid giving any specific %. On CPVC, Chandan, can you say what was the exact?
Shravan, year on year, CPVC volume has grown by 17%. In quarter on quarter, it was roughly around 7%.
We see in CPVC definitely a double-digit growth going ahead.
Sir, can we still see our CPVC share around 6-7%, or is it still 5%?
Still around 5%.
Okay. Now, sir, as you said, in terms of the margin, what we are trying, all the cost structures are cost reduction or better product mix. How can one look at margins of this quarter? EBITDA level, 14.6% EBITDA margin. How can one look at the normalized minimum, should it be a 14% plus for full year given the CPVC prices have also, I think, INR 2.5 has increased in the last 10-odd days? In that scenario, plus the ADD and BIS, whenever it will come, if you can also help if any timeline as per you.
ADD, BIS remain a question mark. We are confident that both of them will come. Only thing, unfortunately, from the government side, there has been a considerable delay. Now, the court also has told the government to speed up the process. That will add. What I am saying is we are not depending on government initiatives to drive our profitability. Independent of ADD, BIS, we are confident of improving the margins. I would not, again, like to place a number on that, but we see a margin improvement. As we have seen, the prices have gone up. While the prices of PVC resin, when they went down in the last quarter, we managed to recover the margins because we did not reduce our pipe prices in line with the resin reduction. When they went up, we went up more than the resin reduction.
That way, we are taking small steps in price recovery, margin recovery. ADD and BIS will definitely, as and when they come, will add to the margins. That would be, I would say, more like a bonanza.
Got it. When we say it will improve the margins, are we saying from the fourth quarter numbers it will, or from FY25? Because the number is a significant difference is there. That is what I just wanted to ask. From here on, whatever we have reported in fourth quarter, one can see an improvement on the margins.
What I'm talking about is from here on. I'm not really looking at the history. History is history. I'm looking at today onwards what happens.
That's great. That's great. Lastly, sir, in terms of this cash, so we were looking at capital allocation. So INR 2,535 crore cash. How one can look at two things. One, currently, last time, I think we have spoken that we will be adding another 25,000 ton capacity. If you can specify the current capacity and what one can look at the addition in the capacity and how we want to utilize this cash, INR 2,500 crore plus.
The capacity increase incremental will continue to happen with INR 25,000 we added. It's a total, our total project is INR 50,000 addition to capacity, which within this quarter or early next quarter, we'll complete that INR 50,000. Partly, INR 25,000 has already happened during Q4 2025. The remaining is happening in the next couple of months. Beyond that, obviously, with the market growing, we are looking at capacity increase. As you know, for the pipes, it's not a very highly capital-intensive business. The CapEx on the capacity increase will not be very, very high. All sudden, we would be left with cash. As we have discussed in the last panelist call also, it's a question of time. Again, this is a board's decision, so I cannot really give you any concrete figures or timeline.
Finally, if we do not have a very large CapEx, then it will be returned to the shareholders. It is a matter of time and it is a board's decision. I would not like to specify anything right now.
Great. Great. Sir, just to clarify, when we say the INR 50,000 to be added, so currently, our capacity pipe would be the similar INR 420, and fitting is INR 50. And from there, we will add another INR 25,000. Is that understanding right?
420 will go to INR 470. And INR 50 is currently enough, so it will be INR 520.
Okay. Okay. Okay. So we will add another INR 50. So from currently, INR 420, it will go to INR 470, and INR 50 will remain the same.
Correct.
Okay. Okay. Great. Thank you and all the best, sir.
Thank you, Shravan. Thank you.
Thank you. Your next question comes from the line of Pujan Shah from Molecule Ventures. Please go ahead.
Now, are you good?
This is what I'm looking for. Just slightly.
Yeah. Yes.
Am I clear now?
Yeah. Better now.
Yeah. My first question would pertain to, we are hearing that the high court has removed the stay for the CPVC for the ADD purpose. There is a bit of optimism in the prices which have been seen in the last four days. We have seen almost INR 2.5 per kg has been increased. Do you expect the ADD to be, it should be implemented sooner? If yes, what could be the price incrementation, could it improve the realization going forward?
No, sir. This price increase, which has happened in the last week, has nothing to do with ADD. This is basically because of strong demand from the market for the last couple of months. The price increase after the ADD is implemented is yet to come. To be honest, nobody knows when it will really come, if it comes in June. That will be an independent result; the result of the ADD will be seen independently in the prices. This current price increase is overall, there is a good demand scenario, less stock with PVC resin suppliers, less imports coming in for various reasons. This is just a demand-supply factor that these prices have gone up.
ADD, we are expecting in June, but to be very honest, with the way the government scheme, I mean, the initiatives are being handled currently, nobody's sure whether it will be June or July. It will come. We are hopeful that it will come.
Sir, on the case of the SC, which has been imposed on the state, is that removed right now due to it does not have any say on the ADD part? As the case goes to the DGTR and the Ministry of Finance, and there is no say from the Gujarat state, is that removed or is it still prevailing right now?
No, no. The stay has been removed. So there is nothing, no hindrance left now. So it's a question of procedural now delays. I don't think they can delay it too much now. But having said that, we are already at the end of May. So whether it will happen in June or in July, we have to wait and see. But it will happen. Now, there is no obstacle to that.
Okay. Sir, just wanted to understand on the second piece, in China, we know that 80% of the PVC resins are made by the carbide route, and it is not environmentally friendly. Just wanted to understand, there is a hard start of 2031 that there should be a decrease in the manufacturing of the PVC resins from China. Do you see that positive impact flowing right now by capacity being shut down and the conversion being happened, or will it take time?
No, that process has already started. To be honest, more than that calcium carbide route and environmental issues, with all this, once anti-dumping duties kick in and BIS, more importantly, once the BIS comes in, then China will become a very, very difficult country to import from. All of a sudden, the whole scenario will change. More than the ADD, we are looking at BIS, which is actually, there's nothing stopping the BIS. There cannot be, because BIS mandate has been imposed on many other products. PVC resin was much lower on the list. Already, a lot of products have already got this BIS implemented. Once that happens, none of these resins from China can come in. That's a very positive. Going ahead, we see less and less threat coming from China.
Sir, just I don't get that point. On the BIS side, you are talking about paste, so suspension PVC, right? Not the paste?
No. Suspension.
Okay. Okay. Okay. Got it. Then my third question would be on the CPVC side. If we look into it, we know that many of the manufacturers have been expanding their capacities. Domestic procurement will be easily available right now in coming years. Even large giants like Reliance and Adani might add in the capacity coming years ahead. Do you think that realization will impact on a higher side and that should be compensated via volume, or do you think that demand-supply will be stabilized once the capacity gets on stream via all these places?
No, but the capacity which has been announced and which is on the way is still short of the total demand. The total demand, even if we take a muted growth of, say, maybe even single digit, will continue to grow. All this capacity is still not going to outstrip the demand. I think that the dynamics will not change drastically.
Sir, if we are considering the one single-digit scenario as well, current demand would be around INR 250. Let's suppose we assume FY2029, all the capacity gets on stream. The total capacity, the supply will be around INR 570, while the demand would be around INR 420. Do you still feel that there would be much advantages because maybe one of our companies is just shifting their plant, their demand would be shifted to over a year on, that could be around INR 420 supply. That would be stabilized there. That's the demand dynamics which we have been looking into?
No, sorry. I didn't get the question. Shifting, added, who's shifting the plant?
Lubrizol.
Sorry?
Lubrizol.
Sorry, sorry, sorry. I completely misread your statement. You are talking about CPVC.
Right, right, right. Yes.
Okay, okay. Sorry, sorry. I was talking about SPVC. No, no. CPVC, yeah, there would be, it is getting more and more commoditized now. With Lubrizol shifting the plant here, Epigrel growing. You're right. Reliance also might get into it. DCW talking about this. Availability of CPVC is definitely on the increase. Earlier, in fact, production or the growth of CPVC was constrained by capacity because getting the raw material was a constraint, which is slowly going as we go ahead, that's not going to happen. Today, the special status that CPVC enjoys, we believe that going ahead, it is getting more and more commoditized. On the manufacturing side also, a lot of players have got into CPVC. The super margins which prevailed at one time have already softened a bit.
They would still always be better than SPVC because of the technology angle and because of the very low-level producers not being able to enter the market. Going ahead, I think demand-supply will play the role in pricing as it does in SPVC.
Just wanted to add on that part. In the CPVC space, as you rightly said, the margin might squeeze. It might impact the realization in the pipe segment as well as the price of RM gets commoditized. It gets impacted. Do you think that our future growth, which we are expecting a double-digit growth in the CPVC segment, would be compensated more on the volume side as the realization gets squeezing when the capacity gets on stream?
Yeah. It will come from volume. Today also, despite a much muted business scenario for FY25, our CPVC volume grew by 17-18%.
17% year on year.
17% year on year. We have been able to grow. That market itself is growing. It's not that only we have grown. Yeah, this would come more from volume. Going ahead, we see substantial volumes coming from our CPVC this. The mix also we see improving greatly towards more towards double-digit.
Just last question on the bookkeeping side. Can you just spell the realization currently on PVC, CPVC, and the spread between PVC and VCM?
Do you have it offhand?
We have the number. See, generally, we do not disclose the number on a realizing part and basis. The overall number that we have disclosed, that is there in the public.
Okay. Got it. Got it. Thanks for the opportunity. I will get back to you.
Thank you, Pujan. Thank you.
Thank you. Your next question comes from the line of Sonali from Jefferies. Please go ahead.
Sir, thank you for the opportunity and congratulations on a great set of margins.
Thank you.
My first question is on the resin side. Sir, despite the PVC resin dropping by almost 18% in FY25, I think on a full-year basis, you have posted a brilliant expansion in your resin EBIT margin. Sir, could you help us understand more as to how did we arrive at such a great number, as in what has structurally changed within our business, or is it just something that we did in the interim?
No, there's nothing that, to be very honest, we can do at the plant level because that's a running plant and it's a petrochemical plant. It's not that doing any tweaking this. The prices are driven by international prices. Basically, the delta in the PVC and EDC prices internationally is what drives the margin. That has been favorable between EDC PVC and VCM PVC. It's mainly a question of, I think, the international price. I would not like to take any great credit for more efficient operations or anything.
Understood, sir. If I may ask as an extension to the same question, in FY25, what proportion of our production of PVC resin came in via EDC and what via VCM?
Do you have it, Chandan, offhand?
Out of total production, roughly one second. 55% came from the EDC route, rest came from the resin route.
VCM route.
VCM route, yeah.
Yeah. So my second question is regarding the demand scenario presently. Now, we understand that in Q1, the initial April month as well, there was some softness in the PVC resin. Right now, as we are seeing, there are strong monsoons across most of the parts of India, which is sort of inversely proportional to the usage of agri pipes. Considering that this is one of your key summer quarters, and we are witnessing all these characteristics in terms of demand and PVC resin prices, how would you rate the demand right now and also the channel inventory of the agri pipes?
Right now, in fact, April and May have been very strong months for us, both agri and non-agri. In fact, till the rain started a couple of days ago, we have been completely sold out on inventory. We are running very low on inventory. So despite the channel not carrying too much inventory, we pushed out everything. The channel pushed out to the, I mean, end user. As of now, even despite the push from our side, the channel is not carrying too much of inventory. With the rains now starting, obviously, the demand will slow down.
We still have to take a call whether this is a long spell of monsoon, which has already started, because we saw in the last almost thrice out of the last five years, we saw that the monsoon starts in June, then there's a long lull for about a month and a half, and then it resumes. If that happens, then the demand will pick up again because, to be honest, this was a little unexpected for the farmers also. Some of the activity is still not complete. If after a week or so there is a lull, then we see a strong demand pull coming back. If this continues, then obviously agri pipes is in because you can't lay the pipes during when it is raining so heavily.
I do not know whether I can answer your question very emphatically, but to be this, till today, we are on Monday. Maybe till Wednesday, Thursday, we have had very, very strong demand from the agri as well as non-agri side.
That's pretty clear, sir. Sir, my last question, of the full-year volumes, how much of that would have come from agri versus non-agri, as in what % volume growth in agri division versus non-agri in FY25?
Chandan.
So FY25, our agri to non-agri was 67:33.
Yeah. So your full-year volume growth is about 3%. In the full year, how much would be the agri growth and how much would be the non-agri growth?
Agri volume more or less 2% in terms of totality, and non-agri around 9%.
Understood. Sir, thank you and all the best.
Thank you, Sonali.
Thank you. Your next question comes from the line of Udit Kajivala from Yes Securities. Please go ahead.
Yes, sir. Thank you for taking up my question and congratulations on your recovery in margins.
Thank you, Udit.
First, if I may ask, just to follow up, when you said that the demand is strong for these two months, especially last month, if you can, then is it purely because of restocking, or is it some end demand in some particular stage that has commenced, or is it related more to pre-monsoon? If I may, you may elude more on it.
Yeah. This is more basically pre-monsoon kind of this because if you have seen the last few months with the previous resin prices were dropping, people delayed, delayed, delayed their purchases to quite some extent. Ultimately, there comes a time when what is needed to be bought will be bought. This was, in fact, the demand was strong despite the resin prices had still not kicked in. There was still uncertainty about it. Now, with this INR 2.5 increase, now suddenly there is a rush from people for the last day. That is a different scenario altogether. Coming back to your question, the demand came from actual users. It's not that the channel is stocking up too much of inventory.
Got it, sir. In terms of our price differential versus peers in the non-Western markets, where I understand that the Western region is one of your strongest zones, but in other markets, what would be the price differential that you have versus the peers?
Difficult to answer that because many of, I would not like to take any names, but some of our large competitors have a different pricing policy in different markets, different pockets. It changes from, I think, pocket to pocket, district to district, state to state. To be honest, we do not really play the price game very strongly. Beyond a certain limit, we depend on our brand and the quality. I would not be able to give you a clear answer about what is the price difference. Sorry.
Understood, sir. No worries. Lastly, you mentioned in your opening remarks that focus is more on margin. One of the reasons is one of the ways which your product makes and some cost controls. Could you elaborate more on what kind of cost initiatives are we taking? Is it that?
Basically, see, it's not a rocket science in our pipe and fittings industry. You improve the operating ratios. That is what we are doing. You reduce the scrap percentage. These are some of the things with very tight controls, with very tight monitoring, some outside help from TPM consultants. Some initiatives are being taken. I wouldn't be able to give you too much of details because obviously everything is not for the market. I would just summarize better efficiencies. On the buying side also, we have got some better pricing now from some of the suppliers based on volume commitment. We have changed some buying pattern. Everything adds up a bit. There is a very clear focus at the beginning of the year. We have taken that this year would be a year of margin recovery.
Understood, sir. That's it, sir. Thank you and all the best.
Thank you.
Thank you. Your next question comes from the line of Ritesh Shah from Investech. Please go ahead.
Yeah. Hi, sir. Thanks for the opportunity and congratulations for a good set of numbers.
Hi, sir.
Definitely.
Sir, the first question was currently PVC resin prices are at INR 70, INR 70, INR 71. Sir, hypothetically, if the anti-dumping duty comes in, where should we expect these prices to stabilize at? Is it like INR 75, INR 77, INR 80? Because the range of anti-dumping duty across countries is very, very wide. So how should we understand this? That's the first question, sir.
See, basically, one is the anti-dumping duty and the advantage which we get immediately because of that. On the other hand, we also have to wait and see whether some of these countries on which anti-dumping is imposed are able to absorb part of that by lowering their prices. That is why it is a very dynamic situation. There would be a recovery definitely anywhere between 5%-10%. To be honest, to put a finger on the number would be very difficult because not the entire anti-dumping duty, we just cannot take a mathematical average of all the countries and then put a number. It will be something which the larger PVC resin producers will keep trying a portion at a time and trying to push it through the market and see how the suppliers react to that.
Sir, how did you come to the number of 5%-10%? Is it possible to comprehend that, please?
Sorry?
Sir, you indicated that a price increase could be anywhere, say, 5% or 10%. How do we arrive at that number of 5% or 10%, sir?
That is based on the import pattern and what can go through. This is estimated by the industry. 10% I would say would be very, very ambitious. 10% would be something like INR 6-INR 7. But INR 3-INR 4 is something which I think is definitely which can go through. As I said, it can be anywhere between. If you want to place a range, it can be between INR 3-INR 6.
Sir, is it fair to assume that this INR 2.5, which has happened over the last seven days, ten days, is already part of this INR 3.5 that one can possibly assume?
No, no, no. That has nothing to do with anti-dumping, no. Because nobody knows when that.
Sir, and then.
Sorry.
Correct. So how should we read into this last INR 2.5, INR 1, and INR 1.5 of increase? Is it because imports have dried out and hence the price uptake, or is it like the demand has really shot up? That's the reason why price has gone up.
The demand has been strong for the last couple of months. Plus, there have been production cuts because of maintenance shutdowns at the domestic producers' level as well as some large international players. Imports have dried up or reduced, I would say. There was very, very low inventory with the large PVC producers. This has nothing to do with anti-dumping. This was purely a demand-supply gap, which, whether this can be sustained is the question over the long run if there is no anti-dumping duty. As of now, yes, it looks sustainable, but suppose theoretically there is no anti-dumping duty for the next four months, and then monsoon kicks in, then maybe there will be a question mark whether this can be sustained. This is purely a current demand and current supply scenario playing out.
Sure, sir. This is helpful. Sir, secondly, as we look into the next fiscal, do we have any plans to launch any new product categories, any new product lines, and anything on geographical expansion if we are targeting anything?
No, as we discussed in the last analyst call, the geographical expansion is something we are working out at the back of it. Even in the last call, I said, at least for the next six months, you will not hear any announcement about that. Currently, our philosophy, we have already spelled out in the past also, is to first squeeze out every possible efficiency from the existing plants. All our three plants have adequate possibility to increase the production by just changing the replacing the old capacity, smaller capacity machines by higher capacity machines. The manpower remains the same. The overheads remain the same. You just get almost double the production from the same space, from the same real estate or from the same manpower. Our focus always has been to first squeeze out every possible efficiency there and then look at expansion.
We still believe that there is a scope for better capacity at the existing. Whatever the next immediate round of expansion which comes after this 50,000 tons, definitely brownfield would be option one. Option two, we are still contemplating, but it's too early to make any announcement right now.
Sir, and so just last question, would it be possible for you to quantify your total fittings capacity and what part of it is for outsourcing? A related question, sir, earlier we had planned that Ratnagiri, given we have two ways to produce resin, EDC, ethylene, and VCM, do we have any plans to further backward integrate specifically the VCM line, or is it entirely on the backward line? Thank you so much.
No, sorry. What was your first question? I missed that.
Sir, fittings capacity. What is your total fittings capacity?
Yeah. Chandan will give the breakup, but I would just like to clarify one thing. When you say outsource or when you say in-house, it is not in the conventional sales outsource. You can say outsource if I'm buying from somebody who is also giving to me and giving to auto component manufacturers and giving to somebody else. Whatever capacity, when we say it is not within our own premises, that is still entirely controlled, driven, everything by us. I personally do not really subscribe to this theory of in-house capacity and outsource capacity. Having said that, Chandan can give you the numbers.
Ritesh, our total fitting capacity is 50,000. Roughly, it consists of 1:4, roughly. One is in-house, four is the dedicated outsource contract manufacturers.
Sure. That's perfect. Sir, lastly, on the PVC VCM extension, anything on backward integration at Ratnagiri?
No, nothing immediately. As I said, still under study, we have not, I won't say that it will never happen. It does definitely make sense to push through that. You will not, again, I don't think, hear any announcement in the next six months about that.
Sure, sir. Thank you so much for the answers. All the very best, sir. Thank you again.
Thanks, Ritesh. Thanks.
Thank you. Your next question comes from the line of Sneha Talreja from Nuama. Please go ahead.
Hi, Chandan. Congratulations on a great set of numbers. Just two questions from my end. One is related to industry demand. Leaving apart the PVC price increase and decrease and leaving apart the restocking part of it, what is the in-general PVC plastic pipe industry growth rate that we are forecasting over the next five, six years?
See, CAGR has always been about 8-10%, and there is no reason for that to change drastically, either lower or higher. We expect that close to double-digit trend to continue, both on aggregate as well as non-aggregate side. For our internal calculations, we take a little above 10% growth.
You were talking about 10% growth in PVC plastic pipe industry only. This has been the past 10 years, Kever.
No, no, no. PVC pipe, plastic pipe industry as a whole.
Understood, sir. Second question was related to other new segments. I understand you're looking at capacity expenditure program, and you are working on it. Are new products such as OPVC and silent pipes, fireproof pipes, are all these kinds of pipes being considered, or is it the expansion only in traditional categories, be it PVC or CPVC, which are planned at this point of time?
At this point of time, it is still existing conventional pipes, OPVC, silent pipes on the study table, but nothing concrete to be announced yet.
Understood. Lastly, for clarity, if I see your PVC EDC spreads at this point of time, the spreads are not only declined by 5% quarter-on-quarter. At the same time, you have seen a great amount of margin expansion. Have those cost-cutting measures already been incorporated in this particular quarter only, or are we missing out on something?
Sneha, can you repeat your question once again, please?
If I look at your last quarter's PVC EDC spreads, that was about INR 517. This particular quarter, I see it INR 491. There is a strong QOQ recovery in terms of your plastic pipes margins. I just wanted to understand, is the cost-cutting measures already incorporated because of which you have a sharp increase in margins? I mean, PVC prices the entire quarter were on the downward trend, leaving apart the last two price hikes which have been post the quarter end.
You're talking about the PVC, the pipe segment?
Yes, pipe segment margins expansion.
In fact, I don't know whether you attended the last analyst call, but in that, I had mentioned that there was, to use a bad word, price war kind of a situation in Q2 and Q3 because of which the margins had taken a massive beating. At that time itself, we declared that we would steadily take the margins up. This is basically not so much on the costing side. The cost initiatives have started last quarter itself, but that is still to kick in. This is basically because of, one, better product mix, and two, more importantly, better pricing decisions that we, to which markets to focus on, which products to focus on, and what discounts we are willing to give, and what business we are willing to give up if the margins are not good enough.
It was purely a basic better pricing strategy, I would say, which is a more sustainable long-term kind of a this. There was probably some aberration in the pricing strategy in the earlier quarters, which got corrected and which is getting corrected further now.
Understood. You also mentioned that the price war last quarter, I mean, referring to the scenario. Is that pricing strategy opted by the large player now done with, and are you seeing some stability in terms of pricing across the players?
Yeah, there is a stability now. This happened, I think, in last June, July, August, something that time. Yeah, now we see stability. Anyway, we decided that we will not be part of any of these things. Based on our brand stability and our brand image, we will continue to whatever our brand justifies, we'll continue to get that price. We are seeing that improvement immediately in the market.
Understood. Can you just lastly speak about the PVC VCM spread? I don't have that handy.
As of now, PVC EDC spread is around $490. VCM shares are seen. PVC VCM is around $60.
$160. Understood. Thanks a lot, sir, and all the very best.
Thank you.
Thank you. The next question comes from the line of Vipulkumar Anupchand Shah from Sumangal Investment. Please go ahead.
Hey, sir. What was the PVC VCM spread last quarter, sir?
PVC VCM spread was 174.
174. So it has improved to 190 right now?
160.
No, I'm talking about current spread.
Current spread I'm taking, telling you.
160?
Yeah.
Okay, sir. Thank you.
Thank you. The next question comes from Shravan Shah from Dholat Capital. Please go ahead.
Yeah. Thank you for the opportunity again. Sir, CapEx for FY26 would be how much?
Roughly around we have planned 120 plus. Yeah.
Sorry, 125,000.
Not more than 150.
Okay. 125-150.
Yeah.
Okay. Sir, also just I wanted a clarity. The staff cost for this quarter was INR 51.3 crore versus for last three quarters, it was around INR 57 crore. Is there any one-off in this?
No, it's not exactly one-off. There are a lot of year-end valuation is required to be done. So because of that, it's more or less the impact of that, cascading impact.
Submission can be done more.
Okay. So going forward, is it fair that our staff cost will again come back to that INR 57 crore kind of a quarterly render?
Yes.
Okay. Second, obviously, we have significant cash, and that's why our other income has also this quarter gone up to close to INR 65 crore and for the full year INR 247 crore. Till the time we decide that this money is to be returned to the shareholders, this kind of a run rate on the other income front is likely to continue?
Yeah. It's more of the result of how the market is performing. Based on that, these numbers are coming.
More or less similar.
More or less similar in nature.
Okay. Okay. Okay. Got it. Just, sir, if you can again clarify in terms of the currently for FY25, when we say the 5% CPVC share, does that mean that broadly the entire industry would be a 250,000 ton kind of a yearly number?
Yeah. Around 260-270.
Okay. Okay. Okay. Including everything PVC, it would be a 43-44 lakh ton.
Correct. Yeah. PVC is around 4.1 million ton. Yes. 4.1 million ton is the total India demand.
Okay. Got it. Got it, sir. Thank you and all the best.
Thank you. Your next question comes from Pujan Shah from Molecule Ventures. Please go ahead.
Thank you for the opportunity, sir. My first question pertains to, let's suppose, the 18% increment.
Your voice is not coming through.
Your voice is breaking.
Voice is breaking.
Am I clear now, sir?
Yeah.
Yeah.
Yeah. So my first question would be on the, let's suppose the PVC prices right now, what has been in check, it remains the same. Assuming the EDC VCM prices also remain the same, do you feel that EBITDA margins could be in the range of 10-15% easily going forward, assuming the similar situation for FY26?
Pujan, let us not put any number on the margin percentage. Let the things, because there are various dynamics that decide the margin. We are not willing to put any number on the margin at this moment.
Okay, sir. Got it. Sir, right now you say the realization, so the spread between PVC and VCM remains at 160 while a quarter ago it was 174. What has impacted the margin specific to that? Because ultimately, the EDC has been in chap a bit. What happened to the VCM part? Why has the VCM spread narrowed down?
No, sir. I think what Chandan is saying is that 160 is this month's.
The latest one. Not the year-end.
Current sitting on today's date.
If you see long-term, this also, month on month, it keeps going up and down. PVC goes up, this goes down. If PVC has moved up and VCM takes time to move up, the data increases. If PVC comes down and VCM stays there, the data. Month on month, it's very, I think, not correct to look at it as a trend. Basically, if you see a quarterly or a half-yearly or yearly trend, there is nothing. The dynamics have not really changed drastically. Month on month, it will always change. There is no particular reason for that. Considering year-on-year, it would be around INR 160 range, the spread.
No, no. 160 remains today. Going ahead, we see it same as similar to last year. We have no dynamics. We don't expect to change dynamics.
Okay. Got it, sir. My second question would be on the last call as well. We have been mentioning about the OPVC, and it is not, so we are not being keen to enter into that space. What are the key reasons you have been looking into for the, because ultimately, other players also, I understand the segment is too small right now, but other players are very optimistic about this product. What are the key thoughts about this specific to OPVC?
Basically, as you rightly said, the market is still quite small, and it's not as if there is a five-year or three-year gestation period once we decide to get in. It's not that you have to put up a huge greenfield facility. The day we feel that the market is right, we already have the brand. We already have the distribution network. It's a question of three to six months when we can enter the market. We are still on the wait-and-watch approach. We are not saying that we will not enter it. Right now, our focus, as I said, has been on various initiatives. The management bandwidth right now is not on OPVC. We'll get into it when the opportune time comes.
Okay. Got it, sir. That is from my side.
Thank you. Thank you.
Thank you. Next question comes from Madhav Agarwal from SG Investments. Please go ahead.
Hello.
Hello. Hi. Thank you for the opportunity, sir. Just a couple of questions. Can you tell me what's the current market share for Finolex?
Current market share for the Finolex as a percentage of total PVC, I mean PVC pipe market?
Yes, sir.
It's about, again, between organized and unorganized, we look at the share of the organized market. Chandan, you have the number right now?
Hold on for a minute.
I'll pass this question. You continue. I'm telling you in a while.
Secondly, sir, you had mentioned that our aim is to take the split between agri and non-agri to 50 and 50. And currently, it's at 67 to 33. We just wanted to know what are the steps we're taking to achieve that 50 to 50 level?
Basically, these are all obviously long-term measures. One, I can tell you one significant step which is driving. If you see, last year also, our growth in non-agri was much higher than the agri growth, and we expect to continue that way. One significant step is that we were practically absent from the projects market. We were depending entirely on the retail network and the large projects, the Lodha and the Hiranandani and the Sobha developers of this world. We hardly had any presence there. In the last couple of years, we have taken, we have a completely different team for projects business, which focuses only on these initiatives, and that's been yielding very strong results. We are now there in almost, I would say, 60% or 70% of the top 100 builders we are already there. Our share is increasing.
Besides that, within the retail segment, also we are taking a lot of initiatives like reaching out to the schemes for retailers, for plumbers, which earlier we were not doing so in a focused manner, which also we are doing. That is yielding results, definitely. Traditionally, we were always the agri player, and we played the market from that perspective. Now we have completely different teams for agri and non-agri, and that's yielding results.
Just to add, Madhav, in terms of our share in the PVC pipe segment, see, there are two segments of PVC pipe manufacturer operates in India. One is the organized sector, and another is the unorganized sector. Since the data of the unorganized sector is generally not available, we compare ourselves with the largest players. Out of the largest players, we are roughly having a share of 30% around market share.
Understood. Thank you so much. That was all from my side. Thank you.
Thanks, Madhav. Thanks.
The next question comes from the line of Karan Bhatelia from Asian Market Securities. Please go ahead.
Hi. Good evening. Am I audible, sir?
Yes, Karan.
Sir, just wanted to understand what would be the fitting volume growth in the entire year? Percentage could be helpful.
Last year, we had muted growth, to be honest, more like 1 or 2%.
PVC, if I heard it correctly, FY25 volume growth was 17%.
Correct.
Right. And sir, since the focus now remains more on the non-agri side, what kind of expansion have we seen on the SKU-based or sales marketing efforts this year, and how do we see that in the next two years?
Yeah. So one other SKU-based, of course, we keep on adding every year 100-200 SKUs. I don't have the number right now with me how much we added last year, but that's an ongoing as and when the market requires, we keep on adding. Today, we have more than 1,500 SKUs. Exact number, unfortunately, I don't have right now. An initiative, as I said, for the non-agri, I just emphasized the earlier question in the earlier question that the projects business, the reach out to the retailers. We have now a large digitization program going on where we have visibility on the inventory with the retailers. We have direct outreach with the retailers. A lot of these digitization reach-out programs, plus to a great extent, the projects business is adding out to our non-agri.
That's right. Have we also separated the project team from the retail team? Is the focus on projects too?
Yeah. Yeah. That's a completely separate team. They don't even look at the retail business. They are completely on the project side.
All right. Yeah. Thank you. Thank you. Yeah. Thanks. That's it.
Thank you. The next question comes from Vishal Shah from Sameek Shah Capital. Please go ahead.
Am I audible, sir?
Yes, sir.
Yeah. On the question regarding, sir, we have INR 2,500 crore cash on books and the board will decide. As the matter is going on since last more than a couple of years, when can we expect the same? As we are not doing much CapEx of INR 125-150 crore, can we expect in the next one year or so?
No, Vishal. It would be not only unfair, it would be illegal for me to answer that question because that is a question which only the board can take a decision. I can say one thing, the management is fully aware that, yes, this is money we are holding on behalf of the investors. If we do not use it adequately for the business, we are obliged to give it back to the investors. The board of directors, the management is sensitive to this issue, but it would be unfair for me to put a timeline on it.
Okay. Sir, the second question, can we expect any sale of last year in Q1? We sold the properties. Can we expect the similar line of sales of the additional property that what we have and exceptional item in the current year also?
No. I don't think we plan to sell anything now.
Okay. Fine. Thank you, sir.
Thank you.
Thank you. The next question comes from Madhav Agarwal from SG Investments. Please go ahead.
Hi, sir. I just had a quick follow-up on my earlier question. Just wanted to know the split between the retail and project business.
The project business for us is, in fact, we just started, as I said, the whole concept started a couple of years back. This year, we have done well, but I think it would be still project business only 10% of the retail business. There is scope for growth, but yeah, today we are not where we would like to be.
Understood. Thank you. Thank you so much.
Thank you, Madhav.
Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments.
Thank you. Thank you, everyone, for attending this call today. If you have any further questions, you can always reach out to us by mail or by telephone, and we'll be happy to answer. Have a wonderful day. Thank you again.
Thank you, everyone. Thank you for your participation.
Thank you. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us. You may now disconnect your lines.
Thank you.