Ladies and gentlemen, good day and welcome to the Finolex Industries Q2 and H1 FY 2026 earnings conference call 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 this conference call, please signal an operator by pressing star, then zero on a touch-tone phone. Please note this conference is being recorded. I now hand the conference over to Mr. Arun Baid from ICICI Securities. Thank you, and over to you, sir.
Thank you, Mark. Good afternoon, everybody. On behalf of ICICI Securities, I welcome you all to the Q2 FY 2026 result call of Finolex Industries. We have, from the management side, Mr. Udith Agarwal, Managing Director, and Mr. Chandan Verma, CFO. Now I hand over the call to Mr. Udith for his opening remarks, post which we'll have the Q&A. Over to you, Udith.
Good afternoon, gentlemen.
Good afternoon, gentlemen. Thanks, Arun. Good afternoon, ladies and gentlemen. Welcome to the investors' conference call for Q2 of FY 2026 and H1FY 20 26 earnings release. We thank you for your continued support and interest in Finolex Industries. Finolex Industries has registered a marginal dip in volume during the quarter and also for the H1 of this current financial year, mainly on account of prolonged heavy monsoon. The operating performance of the company has been notably improved during the quarter and also during the first half of the year due to our continued focus on margin and also operational efficiency. The company's endeavor, as we have been saying in the last conference calls as well, is to grow in the non-agri segment, is ongoing. We will also talk a little bit more about it as we go forward in our Q&A session.
Before I open the floor for Q&A, I want to take you through some of the performance indicators. Q2 financial year 2026, some of the highlights are as follows. For Q2 FY 2026, the volume, as I mentioned, decreased by about 6% to 65,336 metric tons against the 69,341 metric tons during the same period last year. Total income from operations has improved slightly, about 4% to INR 859 crore for the quarter, as against INR 828 crore for the same quarter previous year. EBITDA, we have seen a significant improvement in our EBITDA margins, which has gone up to INR 130 crore against the last year, same quarter, of INR 11 crore. PAT also has gone up to INR 119 crore against the INR 51 crore of the same quarter last year.
Some of the highlights for the first half are that overall volume in the first half has been down by about 2% to 157,645 metric tons against nearly 159,961 metric tons in H1 of the previous year. Total income from the operations is also slightly down to INR 1,902 crore against INR 1,969 crore last year. EBITDA has improved by about 3% in the first half to INR 224 crore, as against INR 217 crore of last year. Correspondingly, the PAT also has changed to INR 216 crore compared to INR 557 crore. Let's remember that INR 557 crore of first half of last year also included exceptional gains of INR 417 crore. As a company, we continue to have a very strong balance sheet with a net cash surplus of around INR 2,360 crore as of 30th September 2025.
I think with this little overview on the numbers, I would leave the floor open for questions. Together with me, my colleague Chandan, and we would be very happy to respond to the queries. Thank you.
Thank you. Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Shravan Shah from Dolat Capital Advisors. Please go ahead.
Hi, sir. Thank you for the opportunity. Sir, first off, I wanted to understand this change in inventory, which is INR 172 crore negative, and that's why there is a significant improvement in the EBITDA and EBITDA margin. A couple of things to understand here. First, how much is inventory gain in this quarter? How much one can look at to reverse in the third quarter? If we exclude this, then what kind of margin, EBITDA margin one can now look at from third quarter onwards?
Hi, Shravan. Good afternoon. How we look at our number, if you compare our gross margin, looking into the inventory number directly, inventory changes will not give you the right perspective. How we should look into the gross margin, what is there in the current quarter, and what is there in the earlier quarter? If I give you the perspective, our gross margin during the current quarter stood at 42%, whereas the same number of the corresponding quarter of the previous year is 30%. Number one. Number two, having said that, this inventory gain and loss as such is not directly in the quarter, but the number you can see in the financial result is only on account of what is the inventory that we have been carrying at the end of the previous quarter versus at the end of the current quarter.
Inventory gain or loss per se, we do not have in this quarter as well. Number one. Number two, as in our opening remarks, Mr. Udith has mentioned, we have been continuously focusing on our performance evaluation and focusing on the margin. Based on that, we will continue to give our end of year to keep the EBITDA margin to the extent possible at this level. We will try to maintain that.
That's a great thing, sir. If you can manage such kind of a EBITDA percentage of 15% +, it's a great thing. Another thing, just to further understand here in terms of the realization, so if I look at on QoQ basis also, so there the realization has significantly increased kind of 16%. So a couple of things to understand there first, if you can also share the agri/non-agri share, and also though the overall volume has declined, but in that also agri/non-agri growth, and from where this realization increase is coming, and how now one can look at even if, let's assume there is no ADD, then this kind of realization is sustainable?
Shravan, as we have mentioned, we have during the current quarter, our volume is on an overall basis down by 6%. If you make a breakup of the 6% between agri and non-agri, actually, because of the prolonged monsoon, we have suffered a setback in agri segment, whereas there is a plus volume of around 7% in our non-agri segment. On an overall basis, there is a 6% decline, but this is largely contributed by the agri decline, but non-agri, we have registered a volume growth of 7%. On a quarter-on-quarter basis, the ratio between agri and non-agri current quarter is 56 to 44, whereas corresponding quarter of the last year, it was 61 to 39.
Okay.
As you go higher, as you go higher in the non-agri segment, non-agri generally gives us the larger in terms of realization. And agri is the sector where we get the largely volume. As we will be able to push our volume in the non-agri sector, our realization pattern is definitely going to be higher on an overall basis.
Got it. So compared to Q1, Q2, the non-agri share has significantly increased from 30% - 44%, and that's why we have seen a significant increase in the realization.
Yes, Shravan.
Yeah. So now how we look at from the third quarter onwards, because our endeavor was to have a 50%-50% agri/non-agri share, so this kind of a 56%-44% share, that kind of a can be maintained in the third and fourth quarter?
Shravan, the third quarter, fourth quarter, we also see a significant demand growth in the agri segment. Quarter two, we all know, is because of the monsoons, there is always dull demand in agri segment. That is why you also see that reflection in our share of volumes with agri versus non-agri. Yes, our long-term endeavor remains in that direction that we want to have a fairly good dependence on both agri and non-agri just to manage the seasonality in the business. I do not think we would be able to maintain 55-45 on that kind of a thing unless there is a significant shift in the demand.
But broadly, because the entire in terms of EBITDA now depends on this non-agri share, so roughly somebody has to understand how one can understand for the second half, because if our agri share goes up, realization again will be a dip, and that will obviously have an impact on the EBITDA margin. In that sense, wanted to understand.
No, but there would also be a volume growth. That will also drive the margins or the margins. Right now, if you look at it, our quarter two traditionally has been a lower volume quarter because of the monsoons. As we move into the quarter three, the demand for this will come back, agree. That will also help us to improve the volumes. I think we would be able to sustain the margin in the current percentage range.
Got it. In terms of the now on the volume front, 1H, 1.6% degrowth. Previously, we were looking at kind of a high single digit to double digit. That means we should be having an 18% kind of a growth in the second half. Now how one can look at the growth in the second half or maybe for full year, what we are looking at, and maybe if you can help us going forward also, because we were looking at double digit kind of a growth, given now the PVC prices are kind of bottom out, and maybe ADD will help there also.
Yes, certainly I will answer. The ADD will certainly help. We'll get to know probably in the next one week or so, hopefully this week, what is going to be the outcome of the decision from the government. That will certainly help you. You are absolutely right. The second part or the first part of your question, which was outlook on the growth. Yes, I think it would be fair to say that we are now looking at mid-single digit numbers in terms of our growth forecast for the year.
Going forward from FY 2027 onwards, we can see a kind of a double-digit kind of a growth that's kind of sustainble.
Yeah, I think, as you know, our volumes are our business is dependent on agri and non-agri, and non-agri when we talk about, we also talk about a lot of infra-related projects and the real estate developments which are happening in the country. As long as that thing continues, I do not see any reason why we should be doing less than the market.
Okay. Lastly, sir, what was our CPVC volume share and maybe if you can help us the growth in Q2 for us?
In Q2, our volume share was about 8%, Chandan, if I'm right.
Y es.
We have been able to contribute 8% in the CPVC segment.
Their growth will also be 5%-7%?
No, no. CPVC is going at a higher rate because we have a lot of endeavor on the CPVC segment. It is going double digit at a pace of double digit.
Okay. Thank you and all the best, sir. Hope we should be able to maintain the double-digit growth and maybe going forward and 15% kind of EBITDA margin. Thank you and all the best.
Thank you, sir. The next question is from the line of Sonali from Jefferies. Please go ahead.
Thank you for the opportunity. Some bookkeeping questions. Firstly, what was your PVC to EDC spread in Q2 FY 2026 versus Q2 FY 2025? Also, Q1, if you could give us.
PVC to EDC Q1, it was INR 522. In the current quarter, it is $532. $535, sorry. My bad. INR 535. This is PVC to EDC. Another one is what you have been asking, PVC to VCM.
PVC to is VCM, yes.
Yeah. INR 151 versus INR 187.
Understood. Sir, and what is the PVC to EDC spread right now as we speak?
Right now, it's roughly around INR 535.
Almost close to the average of Q2. Understood.
Yes.
Secondly, what were your average prices for PVC and EDC and VCM during this quarter?
That detail, actually, we do not disclose. That is the actual at what rate we have procured our VCM and what is the procured rate. Because it is a two, three factor that plays a major role. One is the market-driven price, plus at what rate we at how we are negotiating with our supplier, that also depends. That is something that we do not disclose to the public.
No problem, sir.
Whatever that number I'm giving you, it more or less gives you an indication.
Understood, sir. Very well understood. So my last question is, now first quarter was 9% EBITDA margin, second quarter is 15% despite volatile PVC in Q2, and you explained the reasons for that. So Q3, Q4, how should we look at the run rate? I'm not asking for an estimate, but approximate run rate. Should we go back? Do you foresee us to go back to Q1, sort of less than 10% EBITDA margins, or maintain sort of mid-teen EBITDA margins?
On a year-on-year, full-year basis, we would like to maintain a higher digit. It's our guess, higher digit EBITDA will be achievable. 15% is the number that we can see for the current quarter. Overall basis, higher single digit is more or less achievable.
Higher single digit, you said, for the full year. Is that right?
Yes.
Hello?
Around, you can say around 10%-12% around.
For the full year?
Yeah, for the full year.
Full year EBITDA margin. You're saying mid-single digit volume growth for the full year. Is that right?
Yes. Yes. Yes.
Understood, sir. Very clear. Thank you and all the best.
Thank you.
Thank you. The next question is from the line of Praveen from BL Capital. Please go ahead.
Sir, hi. Thank you for the opportunity. My first question.
Sorry to interrupt. Sir, your voice is very low. Could you please come closer to the mic?
Is it fine?
Not really.
Just a second, sir.
Hello.
Yes.
You need to be a bit louder. Your voice is quite faded voice we are getting.
Yes.
Hello?
Yeah.
Yes, it's better.
Okay. So my first question is related to what you had said about the agri/non-agri segment. Is that the bifurcation for the volume we had given or a value?
Volume. We always give a number, whatever the number we are giving in terms of volume only.
Okay. Second thing is on the PVC and the VCM route, I recall that there are some procurement challenges. How that saves? That's normalized or still you are getting some issues?
Yeah, you are right. There were some structural issues which are going on globally in terms of the VCM market, and we are trying to work through it via long-term contracts.
Okay. So we are not facing any challenges related to procurement of VCM right now?
I'm not saying that there are no challenges, but as I mentioned, we are trying to work it through the contract so that we have continued supply of VCM for our operations.
Right. Second question is related to the capacity. What capacity right now we have for pipe and fittings?
For pipes and fittings, yes, Chandran. We have five pipe and fitting altogether. It's INR 520,000.
Okay. And that we are expected to maintain for a full year?
Capacity is definitely installed capacity I am talking about. INR 520,000 capacity. If you can recall in our earlier call, we have seen INR 25,000 of the latest capacity we have done addition in Q1. This is why after that, our total capacity stands at INR 520,000 at this moment.
Okay. Okay, sir. Second thing is on the agri demand as an overall. So definitely I understand because of rain and Q2 was a got impacted, seasonally also, it's low. But overall, how you are seeing the agri demand is playing out right now?
Agri demand, as you know, I mean, this is impacted because of the, I mean, not only the early onset of monsoon, but also prolonged monsoon. I mean, we are still having rains in some parts of the country. That has a continued impact on our volumes as well. I think on an overall basis, we don't see such a decline in the demand overall. It should come back, and when it comes back, there would also be a pent-up demand which will also be there. I don't think there would go into any significant impact on the agri demand.
Okay. One clarification, sir. You said related to non-agri, you are doing infra as well as real estate projects. Any bifurcation or any color on that? How much is the infra contribution and where are you going to see the infra contribution going forward?
As you might already know, that we do most of our business through channel partners. We do not supply directly to these kind of projects. It is very difficult to really put a finger on how much is coming from infra, how much from real estate segment. That is something which we call as our project sales, and we see that there is a momentum in that area. That also drives our non-agri sales.
Got it, sir. Thank you and all the best.
Thank you. Participants who wish to ask a question may press star and one on the touch-tone telephone. The next question is from the line of Ritesh Shah from Investec India. Please go ahead.
Yeah, hi sir. Thanks for the opportunity. It's a couple of questions. I wanted your broad thoughts on one, how are we looking at our market share in volumetric terms? That is one. Second is on the use of cash, any particular timeline that you have in mind on how we will go about it? Third, any specific changes at the company level that you aspire for, say, over the next 12-18 months, 12-24 months? Specific question that I had over here was, we have indicated in past about the variable component for the employees. Has there been any progress? Do you think that that is something which is required? These are the first three questions.
Ritesh, wait, Chandran here. Just to update, because we, PVC market, PVC pipe and market is a very mix of market where there is organized player and unorganized player both. Considering this, it's very difficult to give what is the market share that we are having. Having said that, if we compare ourselves with the three major players, if we compare ourselves with three major players like Astral, Supreme, and Finolex, in that scenario, our share roughly comes out to be 25%. If you compare ourselves with the three big players in PVC pipe segment, largely. Number one. Number two, your question was.
Cash.
Cash. Cash utilization definitely, that question we have been saying quite some time. Because we have, at the end of the day, we'll have to see how the cash is best getting utilized over the deployment in our internal requirement as well as CapEx utilization. After that, anything, something left out, then that has to go back to shareholder in whatever form that is suitable. Third, the stock option, that is very old scheme, that was very, I think, four, five years back or probably five years back, we have decided something to give option to the employee, but it has not materialized at this moment. It is on file as well.
Sir, any timelines on the usage of cash on books? Because almost INR 2,400 crore of cash sitting on the books since quite some time. Sir, any timelines in place over here, sir?
Ritesh, it's very difficult to put any timeline because it depends upon what kind of planning is going on in our cash that is there on the table. Once that materializes, that goes for the multiple level of approval, including board, then we'll be able to conclude how what action we will be able to utilize and by what timeline.
Sure. Sir, variable component for employees, I was referring to marketing and sales, not the ESOP part.
Okay. Okay, sorry. My bad then.
Yeah, any progress over there?
Yeah, sorry. No. So at this moment, we still that we have not decided to go ahead with the variable component. When next year our approval cycle will come, then definitely we'll look into. At this moment, it's not decided. Currently, yeah, we are working on the fixed-to-fixed basis only.
Sure. Last question, where do we procure CPVC resin from? Given there are a lot of new capacity announcements locally as well, and there is new incremental capacity, we understand Reliance is also putting up something this month. Is it something that we have factored, to basically, if you are not sourcing locally, then we will start to source locally? What bearing will it have on working capital and the sourcing cost?
We have already been, it's not like that we are not buying from Reliance. We are already buying from Reliance locally. Because, as you know, our capacity is not sufficient. Our internal PVC resin capacity is not.
Sir, I'm referring to CPVC. Sir, CPVC.
Yeah, CPVC also. I mean, we have been taking from all the sources, and we are constantly in touch with Reliance. For other places, we are already buying from Reliance. It is not like that we are not buying from Reliance. It is not only Reliance. There are other producers also, as you rightly mentioned, their capacities which are coming up. We are in touch with everybody and trying to evaluate and improve the suppliers as we go along.
Right. Sir, just last.
It will always be a mix of local versus imports. I think, I guess, I estimate, not guess. My estimate would be that going forward into the future, probably dependence on the imports would be reducing more and more because of the local capacities coming up, not only by the Indian producers, but also some of the international producers like Lubrizol trying to do something locally here in India.
Okay. Sir, possible to highlight which are the new PVC and CPVC capacities which are coming up in India over next two years?
As I mentioned, just one name.
Right.
Yeah, Lubrizol as an international base. You know a couple of players in Gujarat who are coming up with these kind of capacities here in India.
Okay. Anything from Reliance, sir? Specifically on the CPVC side?
Reliance is also putting up the capacity.
Okay. Okay. Okay. Sir, I'll join back with you. Thank you so much for the answers. Thank you.
Thank you. The next question is from the line of Sneha Talreja from Novuma Limited. Please go ahead.
Hey, good afternoon, team. Just two clarifications here. One, you said is mid-single digit growth, and does that include the benefit of anti-dumping duty and channel restocking that you're already building in?
Yeah, that takes care of. Yeah, that's included in there. The benefit of the anti-dumping is already included in there. You see, that is the overall market correction. That would be more or less a pass-through for us.
Understood. Secondly, what I wanted to understand was that one place you said that you would be maintaining 15% sort of EBITDA margin. On the other hand, your annualized EBITDA margin guidance stands about 10%-12%. So just wanted that clarity over there.
Just to correct, just in the previous question, we have clarified that EBITDA margin for the year we are going to maintain around 10%-12%. That is in line that you are asking the same thing.
Yeah. Probably just a few quarter one.
That means you expect margin cooling off for the coming two quarters, which would actually take care of the increasing agri mix because you are expecting improving demand from agri over the next two quarters. Is my understanding correct there?
Yes, yes. Your understanding is correct, Sneha.
Understood, sir. Thanks. Thanks a lot. All the best.
Thank you.
Thank you. Participants who wish to ask a question may press star and one on the touch-tone telephone. The next question is from the line of Mehul from Nayan M Vala Securities Private Limited. Please go ahead.
Hello.
Yeah. Yeah, Mehul.
Yes, sir. You are the best.
Yes, sir. I just wanted to know current utilization. What is the current capacity utilization?
This year, as of currently, for the six months ended, our total capacity utilization is around 70%.
70%.
Yes.
What are you expecting for 2026 and 2027?
Next year?
For full year.
2026 and 2027?
This will be around, let me, one second. One second.
This will be roughly around 74%-75%, 20 27, 2028.
For both the years?
Sorry, 2026, 2027. 2026, 2027.
Okay. Okay, sir. Thank you, sir.
Thank you. The next question is from the line of Vishal Shah from Sameeksha Capital. Please go ahead.
Yeah. Thank you, sir. Sir, what is the reason for substantial reduction in trade payable and other current liability for H1?
Reason for reduction in the other current liability, right?
Yeah. Trade payable, major end.
So see.
Yeah, please, sir.
Other current liability largely consists of our borrowings at the year-end, at the point in time of reporting. Currently, since our procurement uplifting is low, and the last quarter we have been at the full place, that is why it represents the borrowing that we have in the market. As our scale of operation is going to be higher during the upcoming quarter, then again that will be equalized in terms of our year-end number.
Credit end?
It is also the same line. As the procurement activity will go up in the upcoming quarter, it will also go up in the same line.
Thank you.
Hello.
Thank you. The next question is from the line of Shubham Padhiyar, an individual investor. Please go ahead.
Yeah. Hi. Am I audible?
Yes, sir. You're audible.
Yeah. My question is for Mr. Agarwal. I just wanted to understand since this is his first year, is there any short-term and long-term focus areas that he sees? Also, is there something that needs to be changed in the company or something that he thinks that can be added in the company? Anything of that sort?
Thank you for the question. See, our business is, as we have been saying, is that we are a pipes and fittings producer and marketers. Yeah. That position remains unchanged. Yeah. We will continue to drive the focus on pipes and fittings. Yeah. Of course, we would be continuing to be looking at the products which we would be going into these kind of markets constantly. I think any company of our size will do that. That is normal to happen. We will continue to drive the operational efficiency. We talked about just in the previous question, the capacities, what we have, and what would be the utilization. There has been question about our expansion plans also. That all will continue to drive. Yeah.
Okay. Thank you for that. Also.
Structurally, I think our business is, as I mentioned in the opening, is about pipes and fittings manufacturer and marketers, and that position is not going to change.
Okay. Also, do you have any strategy at place on how do we achieve the 50/50 agri-non-agri split?
Yeah. There are a lot of discussions going on within the organization about it, including the way we structure ourselves. That is also under discussion. Really putting a focus onto this, that how soon do we achieve this 50/50.
Because I think we've been planning to achieve this for the last five to seven years, and we haven't been able to do that. I just wanted to understand what's going to happen from going forward.
Yeah. I gave you some hints around it. Yeah. We are also looking at how do we structure ourselves to better capture this, move into that direction. That is one such indicator. I gave you an indicator about the SARC, which we move more into the non-agri kind of a business. That is also something which we are evaluating at this moment.
Yeah. All the best. Thank you.
Thank you.
Thank you, sir. Participants who wish to ask a question may press star and one on the touch-tone telephone. The next question is from the line of Shashwath Jalan from Augmenta. Please go ahead.
Hello. Hi. Thank you for the opportunity. Sir, as you have mentioned about the full year guidance on the volume front and also on the volume mix between agri and non-agri, I just wanted to understand if we have to split it between the non-agri between housing and infra and then include an agri as well. In the second half, which segment do you think can have some sort of a negative surprise in terms of volume offtake purely from external factors?
Oh, as we said earlier also, it's difficult to segregate and put a finger on how much is coming from the infra segment and how much is coming from real estate in our non-agri business. Because most of our business is through channel partners, we do not deal directly. It's difficult to put an estimate. Overall, we are able to say how much we are into agri and how much into non-agri. Yeah. What was the second part of your question?
Yeah. Just the overall demand, do you see within agri in the second half?
You know, I mean, the agri demand is dependent on quite largely on monsoon. That is primarily it. Otherwise, at this moment, there are no indicators which can have a negative impact on the agri demand.
Yes. Thank you.
Thank you. Participants who wish to ask a question may press star and one on the touch-tone telephone. The next question is from the line of Ritesh Shah from Investec India. Please go ahead.
Sir, can you detail the CapEx numbers for this fiscal, next fiscal, and the one after that, if possible?
You want to say?
Yeah. I mean, we have been saying this that on a yearly basis, we have to continue to support the growth in the market. We would be investing anywhere between INR 100 crore- INR 200 crore at a minimum in terms of our CapEx. That would be also the way we see at this moment would be the number going forward. Yeah.
Sir, this would be maintenance CapEx, or would it be new growth CapEx? Just trying to understand how will the capacity number increase. You indicated 520 KTs right now. Can one assume this number to increase by, say, 30 KT-50 KT every year? What should we consider?
Yeah. If we look at it, out of this 520,000 tons which we have as a capacity, did nearly 50,000 tons come up in the last six to nine months? Yeah. That capacity addition is a continuous process at our end. Yeah. We'll continue to add this kind of capacity to support our growth in the market. The numbers would be in this region only, INR 100- INR 200 crore per year.
Sir, should we assume this INR 100-INR 200 crores?
This is not a maintenance CapEx. This is the new capacity addition.
Sir, this would be net new capacity addition because I would presume we might be phasing out some old machines or refurbishing them. How should we look into that?
No, that's not there. I'm talking about the net capacity additions.
Okay. So, sir, fair to assume 100 KT of capacity addition every year?
I don't think so. 100 KT would be necessary, but somewhere in the region of 50-70-80 would be more realistic. It all depends, I mean, how the demand grows. If the demand grows faster, we are geared up to add capacities.
Okay. Sir, second is you did indicate that we are hopeful anti-dumping duty will probably come in a week's time. Sir, how much is the anti-dumping duty quantified at by region if you could provide some color? If at all it gets imposed as which has been proposed, what is the quantum of rupees per kg increase that we see, say, for any particular grade of PVC resin?
Yeah. I mean, the impact is different for different region material. Yeah. What we see is that the impact could be anywhere between INR 3-INR 6 rupees per kg, depending on the origin from which it comes.
How do we arrive at this INR 3-INR 6 per kg?
Yeah. I mean, there is an anti-dumping duty component if you look at the DGTR notification. In the origin, they have given a dollar number to it. Based on that, you calculate. Yeah. Yeah. That's why I said depending on the origin price which it comes to, yeah, if it is, and then the duty number is there. I mean, for example, if it is $50, I'm just making up a number. I mean, for any origin, if it is $50, then you can calculate how much it is, right?
Sure. Sure, sir. Sir, just last question. Sir, what percentage of our fittings is part of this 520 KT? Overall, when we look at the sales volumes, fittings will be what percentage of the volumes?
Oh, Chandan has a better handle on the numbers. So in terms of our overall fitting, that comes out to be around 12% during current quarter.
This is sales ?
Volume, volume, volume.
Sales volume. 12% of the total volume, right?
Yeah. Yeah.
Sir, from a capacity standpoint, when we say 520 KT, what percent of it would be fittings?
One second. It will be around 18%.
18%. Sure. This is helpful, sir. Thank you so much. Thank you.
Thank you. Participants who wish to ask a question may press star and one on the touch-tone telephone. The next question is from the line of Aran from B&K Securities. Please go ahead.
Yeah. Yeah. Hi, sir. Sir, on the current quarter's data, what percentage would be attributable to the resin business, and how much would be attributable to the pipe business?
See, we have been reporting the consolidated number because we do not sell resins now. Everything is for captive. We always report it as one number. Eventually, we have been saying that resin sale to the external parties is no longer there, except a few nitty parties that are very minuscule. Whatever the volume we are seeing, it's only the pipe volume.
Okay. Just actually, I wanted to understand for the current quarter's improvement, how much is due to the resin business, and how much is due to the product mix in pipes?
No, that you have to keep in mind because that is the reason that we are focusing only on the pipe business. So we are considering nowadays resin is only as an input material. So whatever the volume that we are getting, there is no separate business identification for the resin. Resin is now playing as an input cost for our overall pipe. So the entire business efficiency and number that we are seeing, that is attributable to pipe only. We have stopped classifying or segregating resin as a separate business.
Okay. No, because the PVC delta improved this quarter, so there must be some benefit because of the.
Whatever the impact, either on a positive side or negative side, that you see, that will be impacting our pipe performance. No separate classification for the resin.
Okay. Sir, because since going forward, we will have anti-dumping on PVC, the delta would increase even further. Is that not a possible case for further margin expansion on, say, on the backward integration side of the business?
Backward integration is a bit petrochemical. PVC production is kind of a petrochemical complex. If anything, you want to do backward integration, by the time you, I mean, it's a different kind of a capacity addition with a different kind of magnitude altogether. We all have seen how the petrochemical complexes look like. That needs a different kind of planning.
No, I wanted to understand.
Anti-dumping and anti-dumping, we all know, is for a specified period of time. If you look at the kind of a petrochemical complex, by the time you start conceiving it, putting it on the ground, and you start getting production, it's its own maturity cycle. PVC, the anti-dumping duty is also for five years. Yeah. During the life cycle of the backward integration, they would be difficult to justify returns. That's point number one. Point number two is, with all these new capacities of PVC coming up here in India, there would be sufficient local capacities still be available for us for the resin to be available competitively. Yeah. This was one of the questions in the earlier one of the participants was also, is that how are we trying to manage in terms of sourcing locally our capacities?
At this moment, there is no such firm plan. There is always discussion which goes on in a country like ours of this size and magnitude. We already have expertise in this area and have developed it in the past. This is at a discussion stage. I cannot give you a timeline with when and what form we would be able to get backward integrated if at all we decide. Yeah. Our focus continues to remain on pipes and fittings.
Okay. I just wanted to understand, since after the anti-dumping, we'll get some margin benefit because of the PVC-ADC delta, which would further widen.
Yeah. It should support the industry. Yeah.
Yeah. Still, we maintain the 10-12% EBITDA margin guidance. Is it possible that we outperform that number as well, post the anti-dumping?
Difficult to say. It all depends how the international players, international suppliers into India, decide to run their petrochemical complexes and want to price their product.
Okay. Okay. Sir, that's it.
Thank you. The next question is from the line of Ritesh Shah from Investec India. Please go ahead.
No questions. My questions have been answered. Thank you so much.
Okay. Thank you.
Participants who wish to ask a question may press star and one on the touchtone telephone. As there are no further questions from the participants, I now hand the conference over to the management for the closing comments.
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