Ladies and gentlemen, good day and welcome to Finolex Industries Limited Q1 FY 2027 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 your touchtone phone. I now hand the conference over to Mr. Arun Baid from ICICI Securities. Thank you, and over to you, sir.
Thank you, Tanya. On behalf of ICICI Securities, I welcome you all with Q1 FY 2027 post-result conf call of Finolex Industries. From the management side, we have Mr. Udipt Agarwal, Managing Director, and Mr. Chandan Verma, CFO. I hand the call over to Udipt, post which we'll open the floor to the question and answer. Thank you.
Thank you, Arun, good afternoon, ladies and gentlemen. Welcome to Finolex Industries earnings call for quarter one, FY 2026/2027. We all are very pleased to have you here. I remind everybody that this call may contain certain forward-looking statements based on management's current expectations. Actual results may differ. I want to begin by saying that the quarter one of this current financial year was marked by volatility in polymer prices, which became the dominant macro factor for the industry during the quarter. Average PVC prices higher year-on-year at about $875 per metric ton in the quarter as compared to about $707 per metric ton average according to the ICIS reports, largely carrying forward the elevated levels seen in the quarter four of FY 2026 as well.
PVC prices show a sharp intra-quarter correction, which triggered a channel de-stocking and impacted volumes even during what is typically a seasonally strong pre-monsoon quarter for us. Two regulatory developments which I would like to also bring to everybody's attention is that the withdrawal of the customs duty exemption on PVC resin prices, which happened during the mid of July, and the imposition of the minimum import price for the PVC resin. These two developments should help and support some stability in the PVC prices as we go forward. I think this should also help with the channel inventories, and we look forward to having somewhat improved volume and business momentum over the coming quarters. As we all know that PVC demand in India follows a well-established seasonal pattern.
Demand peaks in the pre-monsoon period, January to May, as the farmers in the agriculture segment prepare for the kharif seasons. It starts to moderate a little bit during quarter two, quarter three, and then we also again see the impact coming up and back in again in end of quarter two, quarter three because of the rabi season coming in. With this, I would also like to give a little bit comment about the, as we look into the rest of the year, we remain optimistic, however, with a caution, about recovery of the volumes and realization. As the inventory is normalized, polymer prices stabilize, added by the current two developments which I talked about, the recent customs duty and MIP interventions. We believe that the structural demand drivers continue to remain in place and intact, and will continue to underpin the medium-term confidence.
This year we are also celebrating 45 years of Finolex Industries. We remain equally committed to our brand, our distribution partners, and the communities which we serve. Thank you for your continued trust and support. I will pass on the floor to Mr. Chandan Verma, who will talk about the numbers on the quarter one FY 2027 performance, and then we will open the floor to question and answers. Over to you, Chandan.
Hi, good afternoon, everyone. As you know, the number already we have published in our investor presentation uploaded on the site, though I want to give a brief highlight on the numbers, what we have. Overall sales volume declined by 27% from the corresponding quarter of the last year. Total volume we have registered around 68,000 metric ton during the Q1 FY 2027. Though we have seen a decline in the revenue by 27%, the overall decline in revenue is moderated by around 15% only. Our total revenue for the Q1 is INR 884 crore compared to INR 143 crore of the same quarter of the last year. We have seen a significant and healthy jump in EBITDA by 14%, and the EBITDA margin improved from 9% to 12%. Current quarter EBITDA stood at INR 107 crore, whereas the last quarter of the last year, it was INR 94 crore.
PBT is currently we are at INR 148 crore, and PAT is around INR 107 crore. We have a strong liquidity as we continue. We are having INR 2,636 crore of cash in hand, which we will continue to have in our balance over the prevailing time. The floor is now open for the question. We will invite question one by one, and we will address as and when possible.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Shravan Shah from Dolat Capital. Please go ahead.
Hi, sir. I have a couple of questions, but before that, a couple of data points, so it will help us to ask the relevant questions. For this quarter, what was the agri share, fittings share, CPVC share in the total volume?
Current quarter, we have the agri share is 69%, fittings share within agri 5% and within non-agri 25%. Overall, this is fittings percent on a total volume is 11%.
Okay. CPVC share is 7.5%?
CPVC share for the current quarter is around 7%, yes.
Okay. Got it. Now, I understand the volume significant degrowth is there, which we have seen across the companies who have reported results, Prince and Supreme also. In terms of the realization front, our QoQ jump is just a 1% versus both the companies who reported. They reported a 7% and 9% kind of a QoQ jump in the realization. Just wanted to understand why our realization was not on a QoQ basis a jump.
Okay. On a Q1 basis, if you have seen, our realization per kg has gone up by 15% with the same quarter of the same year, while our peers are also in the same range. I think we are well within the range of the realization per kg. We do not opt from our other peers, whoever the data is in the public domain.
Okay. No, I am talking about on the QoQ front particularly, because for QoQ, as the realization raises broadly, if I do the math with the volume 1.1% QoQ improvement and then the realization in this quarter versus, I was seeing that the other two players who have reported numbers, there it was significantly higher. I understand the volatility, but in April there was a downtick in that, but given maybe the March where we have seen the significant prices up and maybe the pass on would be happening with a maybe a 10 days or 15 days lag. That may be the reason why the other players were able to show the improvement, but we haven't. Just wanted to understand, was there any specific reason on that front?
You're talking about for the entire quarter or March to April only?
For Q1 versus Q4.
Q1 versus Q4.
Yeah
definitely, you have seen Q4 is a quarter for the aberration of the quarter, where we have seen an unprecedented increase in the prices of PVC that has resulted in the unprecedented realization hike. As we move in the Q1, and particularly in the month of April, there was a sharp decline in the PVC prices. The PVC prices has gone, if I need to quote a number, it has gone from INR 96 to INR 92, then INR 82. This is the reason that the prices have gone down per kg. That is how the realization has been moving from the quarter and quarter from the last year and from the current year. It's more about the realization within the industry. There are quite of incentive and discount also plays in the sector when we compute our landed price net realization per kg.
That is how things will work upon. However, from the Q1 quarter-over-quarter, if you see, from the same quarter of the last year, we are fairly within the range-bound that other public domain number we can see.
Now two things. On the volume and then now on the realization, and obviously that will lead to kind of a margin also. First on the volume, have you started seeing the kind of a channel level the inventory, because in last 15 odd days, we have seen an INR 12, INR 13 per kg price hike in the PVC because of MIP and the import duty withdrawal. Have you started seeing the growth in particular in the July and maybe in the June also? Have you seen that kind of a growth? Now for full year, how are we looking at on the volume front? Realization also, given the INR 12, INR 13 hike which has happened in last 15, 20 days, can we see a sharp QoQ jump in realization in Q2?
Yes, certainly, Shravan, there has been an impact to the market because of the factors which you talked about and also de-stocking in the channel. All these have an impact both on the volume and the revenue on the realization side. We will see how does it play out over the course of the year. But for now, yes, the minimum floor is set for the PVC pipes because of the MIP. We should see a little better quarter two in terms of the realizations.
Also in terms of volume, as you rightly said, post MIP, the volume has started to pick up. We have seen a quite good uptick in the volume in the month of July as well.
For full year, how now we can look at the volume for us as a full year?
No. Full year, see, Shravan, at this moment, it is too early to say anything because PVC industry is surrounded by lot of uncertainty and volatility. At this moment, whatever the projection we have given during our Q4 account call, we will continue to say. We will see how the year progresses, because it is only the Q1 that we have completed. Let us see how the year progresses, then we will give any commentary on the full year numbers.
At margin level also, any kind of a guidance that we want to give?
We will continue with our same last quarter's margin, the anticipation that we have given.
The 15% kind of a number that we have said for full year.
We said sub 15%.
Sub 15%, around somewhere we will continue to say that. If everything goes well, then we'll see how the number will look like throughout the year. It's too early to say anything because just Q1.
There's much volatility also. I mean, global geopolitical situation is still fluctuating. Yeah.
True. Any inventory loss in Q1?
See, there are inventory losses and inventory gain and loss definitely would be there, but it's too not to report it at this moment. Whatever the gain and loss that is there, that will be neutralized over the period of Q1, Q2, over the period in time.
Okay. Thank you.
Thank you. The next question is from the line of Praneet from SJ Investments. Please go ahead.
Hi, sir. Thank you for the opportunity. I just had one question in terms of volume de-growth. I understand that the market is down and everything, but we have, I think, de-grown substantially compared to our peers in the market. Just trying to understand what exactly happened.
Shravan, as you know, our dominance or our larger presence in the agri segment, which was more affected than the other, which is the plumbing or non-agri segment, as you call it.
Yeah.
That's the primary reason what we see.
Yeah
as part of the reason for lower volumes for us, other than the channel which we talked about in the beginning of the call.
Understood, sir. In terms of expansion, I understand that right now market is off and everything. Do we have any idea in terms of expanding capacities? Do we have any plan in terms of increasing our plans in any of the-
The capacity planning is always done on a long-term basis. Capacity or the CapEx plans do not get impacted by the short-term macroeconomic environment. All our plans with respect to CapEx and capacity expansions remain in place.
No, sir. At this point of time, do we have any greenfield or brownfield things we want to do? Because I understand it here right now with our Masar plants, we've been only catered to largely the agri and our mix is also mostly focused that way. In terms of reducing the reliance, are we doing anything in terms of more material, like putting plants closer to urban locations or something like that?
We are expanding capacity, and we are also augmenting capacity via debottlenecking. As we have said in our previous calls also, the capital outlay for continues to remain around INR 125 crore-INR 200 crore range, and that remains intact.
Got it, sir. Do we see structurally anything affecting us? Because at least on the ground level, it's been noted that Finolex has not been that aggressive as compared to other peers. What do you have to say about it? Because there has been many people who have been saying that, on the ground at least.
At this moment, our capacity, see, we have the headroom to grow, right? At this moment, we have the total installed capacity of 520,000 and our last year volume was 333,000 tonnes only. Still we have the headroom to grow at a healthy rate of 10%-12%. Let our installed capacity get exhausted first. Yeah
yeah. Apart from that also, as Mr. Agarwal has just pointed out, there is a continuous process going on in our organization with respect to debottlenecking, where we remove our old, lower capacity extruder and keep adding our higher capacity extruder. In a way, within the same periphery, the few capacity we keep adding every year, rather than announcing a big in terms of greenfield and brownfield expansion. Still, as I have mentioned, we still have the headroom to grow at a healthy 10%-12% over at least 2028 year. Next one year, one and a half year.
Correct, sir. I understand there's headroom to grow. It's just that because the last few years and whatever, there's been some at least distress in terms of the agri segment also. I'm just trying to understand, is there potential that we are actually meaningfully looking for some other segment? Because I know you already have plans in growing beyond agri itself, but is it working out? That's my question.
Other sector, because non-agri is a wide area where we are looking into, but not in the other adjacent sector. We are definitely not at this moment looking for adjacent sector.
Got it, sir. Understood. That's what you meant. Thank you. Sir, just sorry, one final question. In terms of JJM, do we expect any substantial revenue growth from JJM 2.0 from September? They expect some substantial rollout. How does the company see it?
See, JJM 2.0, you know, for the current financial year, government has announced a rollout of, I think, INR 67,000 crores, somewhere ballpark there. The second point is how is the realization, how is the distribution of this? I think in JJM 2.0 they also have a different mechanism of distributing the corpus. As you would know that all our business is through channels. All our channel partners participate in this. We do not have a direct measure or direct correlation of the JJM impact, or any other for that matter, the other infrastructure related schemes onto our core volume. As I said, all the sales are through channel. Yes, as the money gets distributed from the government funds, that will certainly have an overall impact on the demand.
In terms of allocation, in terms of the sheer quantum of value, is it higher than JJM 1.0 for JJM 2.0 for piping, at least for the segments we cater to?
I think on an overall basis it is not higher than JJM 1.0.
Okay. In terms of value also.
In terms of the value I'm talking about. I don't have it, remember the JJM 1.0 number off the top of my head, but I know that JJM 2.0 is about INR 67,000 crores and it is lower than JJM 1.0.
For piping allocation. I'm asking more specific to piping. That is the overall number, right? Piping, do we have any specific insights?
No. I don't think I can add anything more to than what I have already said.
Got it. Understood. Thank you, sir. That's sufficient.
Thank you. Before we take the next question, we would like to remind the participants that you may press star 1 to ask a question. Reminder to all participants, please press star one to ask a question. The next question is from the line of Sneha Talreja from Nuvama . Please go ahead.
Hi, good evening, sir, thanks a lot for the opportunity. Just a couple of questions from my end. Firstly, with respect to again, your volume growth, which has been substantially lower than peers, not only this particular quarter, but even if I look at quarter four now. What are your thoughts on market share loss? If you look at the industry level numbers also, I think industry would have de-grown by around 8%-10% odd versus our de-growth would be much higher, in volume terms. What are our thoughts here and how do we expect to gain back this market share?
Thanks, Sneha, for the question. I just want to bring to everybody's this, that if we look at full year FY 2026 and the top five reporting companies who report their volumes. On that basis, our share for the full year FY 2026 was about 22%. Okay. When we look at market share, we should look at it over a longer period of time and not on a quarter-to-quarter basis. We do not have the numbers from all the reporting companies for the quarter one as yet. I think one or two are still to report their numbers. I don't see any change in the market share. Even for the quarter one as compared to full year FY 2026.
Okay. Let me just put it this way. If I look at top six companies, and if I compare that data from FY 2023 to FY 2026, our market share used to be 27%, which has come down now to about 22 odd percent. This is just top six, not even thinking about industry level growth and all. How would we fare that and what are plans to basically get back, is all I'm trying to understand.
There is a constant push in terms of increasing penetration in the market, increasing our presence in the underrepresented areas. That's what there's been a push from our side to improve our volumes. There are few segments of the market where we are not present. Where some of our competitors are present. You have to also take into perspective when calculating the overall market shares. I think, to better understand the question and the underlying dynamics, we have to look at absolute like to like. Finolex Industries is a pure play PVC pipes and fittings producers, where other producers also have a larger share of other polymers into their portfolio. That could also be a factor which might have an impact on the numbers the way they are looked at.
Understood. That was helpful. The second question is regarding PVC prices now that they are on upward trend. What sort of a volume rebound can we see? More importantly, out of the total PVC price increase that we've seen in this last one month, how much of it is passed on to the end user at this point of time?
Chandan will be able to take that.
Sneha, you have seen there is an upward trend, as you rightly said, in the prices of PVC in the market. I think hardly barring INR 1 or INR 2, I think most of the thing has been passed on to the customer at this moment. Talking on today's date.
Understood. How is the demand after the price increases that we have seen?
Yeah. Demand is quite, as I am mentioning, July was quite good volume pickup that we have seen. Since it is the six or seven days of August only, my numbers are looking in the right direction.
Understood. Thanks, Chandan. All the very best.
Thank you.
Thank you. The next question is from the line of Sonali from Jefferies. Please go ahead.
Sir, thank you for the opportunity. My first question is, again on the volume. We understand that agri pipes is about 70% of your mix. Could you help us understand, of the volume decline of 27%, how much was the decline in agri versus plumbing?
We have seen both. The overall total volume degrowth is 27%. If you compare our volume from the Q1 of current year versus last year of the same quarter, the agri has declined by 27% and non-agri is around 24%. Both are more or less in the same direction.
Understand. Sir, it would be really helpful if you could help us understand the month by month very approximate volume trends. The reason I'm asking is because we saw maximum amount of volatility of PVC in April. Of the 27% for the quarter, how much was the degrowth in April, May and June? That would be very helpful.
I think Chandan will have the exact numbers and he'll comment on that. As you rightly said, April was the month where there was maximum volatility. Out of the three months, April was the lowest volume month. We saw the pickup in the month of May. June was like a normal month, I would say.
So-
Chandan, do you have the specific figures?
Yeah. This is what the trend that, as Mr. Agarwal rightly pointed out, April was quite a dismal performance. May and June fairly in the way that things would have been there. July, as I mentioned, is a quite good number. That's it.
Chandan sir, do we have the numbers for April and May please?
At this moment, I don't have. We can reach out separately, we can discuss. At this moment Hand is not with me immediately, month-on-month. Generally, we quote the number on a quarter-on-quarter basis.
Sir, is it fair to assume that May and June was a growth and April was a degrowth, or even May was a degrowth?
No, May was a growth.
May was a growth. May and June were growth and April was a degrowth.
Yeah.
All right. Hello?
Yeah.
Yeah.
Go ahead, Sonali.
Yes. Thank you. Sir, my second question is, obviously 27% volume decline means a lot of weak operating leverage, but our margins have surprised quite positively. I understand you talked about the better realizations. Having said that, the lower margin agri is still about 70% of our mix. Sir, how should we look at the margins? What, in your view, has supported? Is there any element of inventory gain that you would like to talk about?
Whatever the operating performance we have seen, Sonali, this is largely the top line driven. Fair the cost-wise, as we have the more or less cost within range bound, but the bottom line contribution largely came from the top line only. That's it.
Sir, the top line, in the sense the volume was quite weak. I'm just trying to understand what could have supported our 300 basis points year-on-year margin improvement despite a weaker or rather a sharp decline in volumes.
You see, if the cost will remain range bound and we still see good realization during the current quarter, so then the things will definitely get percolated down to the EBITDA level.
All right, sir. Sir, my next question is channel inventory. As of now, what is the scenario of the channel inventory? Is it normal, below normal? Could you quantify that in a number of days, if possible, please?
Last part is the third part of your question is the easiest part, so I'll take that first. It's very hard to quantify the number, how many days of inventory is there, okay? Yes, there's been quite a lot of stocking which has happened in the month of July because the expectation was that the prices will go up, and which have gone up. I would say that henceforth, the demand would be more like stable, okay? Because we have a minimum floor set for the pricing. The volatility part should get somewhat moderated, okay? If there is a stability, that also has a steady impact on the demand. The demand remains pretty stable and channel also do not want to stock too much. More than what is required in the market.
Sir, does it mean that the channel inventory is normal right now? Almost normal.
Yeah, it's near about normal, I would say. There is still some room. Yeah, there is still some room. I would say that if the situation continues to remain like this, we would be reaching that stage not too far away.
Got it. Sir, lastly, if you could help us with a few data points on PVC, EDC, VCM, and the spread for Q1 this year, Q1 last year, and if possible, how it stands right now.
PVC for the Q1 current year is $863, PVC EDC spread is around $501. Same for the first quarter of the last year, $698 was the PVC prices and spread was $522. As latest as current, $795 is the PVC prices and the spread between the PVC EDC is around $490.
Understand. The spreads year-over-year have marginally gone down, right? $522-$501.
Yeah.
Yes. All right, sir. That's it from my end. Thank you.
Thank you so much, Sonali.
Thank you. The next question is from the line of Anu Parakh from Anand Rathi. Please go ahead.
Yeah. Hi, sir. Sir, you said that the non-agri pipe volume declined by 24%. Sir, what could be the reason for this steep decline? We see that the other pipe companies have not seen such kind of decline in Q1.
If you see, in terms of the peer competitive, the non-agri sector segment peer also has more or less declined by, I think, around 18%-20%, if I'm not wrong, in terms of totality. The volume demand generally is driven by two factors. One is the price, and second is the demand anticipation in the market, price anticipation in the market. In both the scenario, as the thing has prices, we have seen the volatility for the agri and the same prices that holds good also for the non-agri as well. The prices, that's why we have seen that because of the in anticipation of the price volatility, the volume of the non-agri is also in the same direction as we have seen in the agri sector.
Okay. Sir, for pipes, what was the price difference compared to Supreme for, say, two, three years back, and what is the difference now?
See, it's very hard to define that in exact terms, but more or less, we are 10%-12%, I think we are pricey in market. Just a ballpark number, not exact number.
Okay.
This is also driven by the commodity prices. Yeah. No player would be too far away from market benchmarks, either on the positive side or on the negative side.
Sir, next on the margin guidance, you are giving us sub 15% kind of a margin guidance. Whereas in an environment where the resin prices are falling and the volumes are also declining, we have delivered 12% kind of margin. Why are we under-guiding on that front?
As we have just mentioned, we are continuing to hold back whatever we have seen in the Q4 and Q1 is because we have seen too many volatility during the current quarter. Our guidance remains same, what we have given the sub 15 kind of thing during our Q4 con call. Let's see how the quarter progresses over the period, because there are a lot of geopolitical scenario and uncertainty that surrounds our PVC industry. Let's move for another quarter, then we'll see whether this need to be revised or not. At this moment, we are holding back whatever we are seeing.
Okay. Thank you, sir.
Thank you.
Thank you. The next question is from the line of Rahul Shah from PL Capital. Please go ahead.
Yeah. Hi, sir. I'm audible enough?
Yeah.
Just two question from my end. Could you please provide some color on the gross margin performance? If we see the sequentially, the PVC, EDC spread has declined, yet our gross margin got expanded. What are the factors driving the margin expansion?
As I have just mentioned, if the prices of material will remain range bound and we'll see a growth in the realization, then definitely that will contribute to the gross margin.
The second is, if I had missed out some data points, could you please repeat the spread of PVC, VCM for the quarter one FY 2026 and 2027?
Q1 FY 2026, the spread was PVC, VCM spread was $ 522, and current quarter, Q1 FY 2027, the spread is $ 501.
No, sir. I just want PVC to VCM spread.
PVC to VCM spread. Okay. Q1 last year it was $ 163, and currently it's $ 122. Q1 FY 2027.
Okay. Okay, sir. Thanks. That's all from my side. Thanks.
Thank you. The next question is from the line of Shravan Shah from Dolat Capital. Please go ahead.
Hi, sir. Sorry, sir. Again, coming to the volume front. Sir, is it possible to maybe directionally quantify the July volume growth? Will it be a 15%-20% kind of a number? Ultimately, what I'm trying to understand for full year, can we see a de-growth or not? That's the one I am trying because, as you've mentioned, the April was kind of a wash out, May and June was a growth, and July obviously should be a better growth. If that's the case, then can we see a 15% kind of a growth in Q2 itself so that we have some fair bit of understanding what kind of a volume for full year can we look at? Maybe the other way is, can we see a flattish or a de-growth for the full year?
Shravan, I would say that July was the best month of these four months of this year. At this moment, as Chandan also earlier mentioned, it's very difficult to say the full year out guidance because volatility has been too much in the quarter one. If we see what is happening in quarter two, then probably we would be in a better position to give a more realistic guidance for the full year. It's just past one quarter, which was also so much of uncertainty, volatility. I would not like to make some forecasts based on just one quarter developments. Yeah.
At least July, whatever the growth, will it be a mid-teens kind of a growth that we are witnessing? Some understanding on that will help us.
July was a good number, but let us not get it quantified at this moment. We are saying, we have seen a good growth in the month of July, but let us not get into the quantification at this moment, Shravan.
Okay. In terms of, though for last many times we are saying that agri, non-agri, 50/50 we want to achieve. Looking at this quarter, obviously 69%. Do we have internal any kind of a number that we want to do at least 2%, 3%, 4% kind of a improvement from agri to non-agri kind of a thing? I don't see anything broadly happening there.
If you look at our last couple of years, last year our agri versus non-agri was 63%, and agri the year before was 67%. There's been a constant improvement in terms of share of our business in agri and non-agri. Better portfolio balance in terms of the market segments. I think we will continue to have that directional approach, which we have always been saying, that we want to have a more balanced portfolio in the market segments which we operate in. Yeah. As we said, in the case of market share also, I would say here also in the case of the segments in which we operate, probably one quarter is not a representative number for a longer period of time.
Sir, given the kind of INR 2,636 crore cash, there also we are not even finalizing how we will distribute to the shareholders. At least why even we are not finalizing in terms of the growth plan. Maybe we are very less in terms of the CPVC, which is a kind of a high price, high margin. Why we are not even thinking to deploy some money there, so at least it will help us in terms of the growth and also better realization and better margin.
See, the investment into the business for the current portfolio organic is always there. Yeah. We are continuing to invest into the business and we will continue to invest into the business to support the growth across all sectors, whether it is UPVC or CPVC. Yeah. The second part of your question, which is this case that all these investments, the larger scale investments I'm talking about, are guided by the board. The board has to take a call at when is the right time to do with this strong cash. Whether it is giving back to the shareholders, whether it is investing into larger scale investments. That's a constant discussion with the board, and since we are guided by the board in this matter, so as soon as there is some decision, I think we would be happy to announce.
Sir, that's the main thing, because this cash is piling up. We are not even saying that distribute the 100%, but even INR 500 crore, INR 700 crore, or even INR 1,000 crore, if we would have invested in, let's say, expansion of the CPVC plant there or the capacity, it would have helped. Even till now, even right now also, we are not even planning to deploy or start. Otherwise, how, when we can start seeing the kind of overall Because that will ultimately help us to reduce our agri share once the CPVC share keep on rising. Unless we start, how we will achieve 7%-8% kind of a CPVC share? That too in our volume is there. I don't know. If I look at the entire industry and against that, our CPVC volume, maybe even that would be lesser than 5%.
Why not we are even thinking that to have at least 10%, 15% or 20% kind of a share in CPVC? For that, we need to expand the capacity. For that, we need the money. That money is there, but we are not even thinking for last many years. It is already there.
Just to bring one point, we have enough CPVC extrusion capacity. For manufacturing of pipes, we have enough CPVC extrusion capacity to support the growth of CPVC segment. Okay. If that is the question, that's what our response would be. If you also look at the overall share of CPVC in the entire PVC market-
Yeah
which is around 7%-8%. Yeah. Our estimation is that about 7%-8% is the total CPVC in the pipe segment. Yeah. This is the same share which we also have. We are also moving along with the industry.
Okay. Thanks.
Ladies and gentlemen, we would like to remind all the participants who wish to ask a question, please press star and one. The next question is from the line of Hena Vora from DAM Capital. Please go ahead.
Yeah. Hi, sir. Thank you for the opportunity. Just one question. We noticed a lot on the margins for this quarter. I assume you said the costs remain range bound. Are you trying to say that we had some low cost inventory from the previous quarter that we liquidated during this quarter, and that's how the margins have come up?
Two things you'll have to keep in mind, Hena, that we have the certain cost advantage in terms of our being a backward integrated player. Whereas the other players are securing the raw material directly from the market, the core raw material, we are one step back where we procure the raw material for the manufacture within. That depends upon at what point in time we have booked our procurement and consignment. That's how the dynamic keeps playing in our case, which is quite different from the other player in the industry. That is how we are getting certain cushion over there.
Understood, sir. That was my only question. Thank you.
Thank you.
Thank you. The next follow-up question is from the line of Anu Parakh from Anand Rathi. Please go ahead.
Yes, sir. Sir, in the last call, we indicated about the VCM sourcing. Are we facing any issues in terms of availability, or we were able to diversify the supply chain?
The VCM availability continues to remain limited because of this issue in Middle East. Okay? One of the challenges with VCM is that it requires a specialized logistics. With the feedstock also going to be in the Northeast Asia, where most of the material in India comes from, is also constrained. Okay? Overall availability of VCM is also limited. It's not as freely available as it was in the previous years. Okay? This also has an impact on availability of VCM for us.
The Middle East producers continue to remain under force majeure, and where we had major contracts. To also tell you that we were, in any case, not importing VCM during the four months from end of May till end of September because our jetty in Ratnagiri is a fair weather jetty. During these monsoon periods, in any case, in a normal year also, we were not importing VCM.
The last question is, what is the expected capacity utilization of the PVC plant for the remaining nine months of FY 2027?
PVC we continue to produce in Ratnagiri. Yeah. As you all would know that we have two lines, one is based on EDC, one is based on VCM. EDC line we continue to produce without any interruption. Hello?
Yeah. What about the Yes, sir. What about the VCM line?
No, as I said, the VCM line, in any case, during the month of monsoons, we do not produce because we cannot import VCM during this time because of our jetty limitations, and it's a difficult product to transport. It's also not like that we can import it at any other port and bring it to Ratnagiri. During these four months, in any year, we are not producing PVC with the VCM line.
Sir, what about H2 FY 2027 for VCM?
Our efforts to secure the VCM supply chain are ongoing, and we expect that the situation in Middle East should also get better with all this. The situation remains also a little unpredictable there. It depends on the availability of competitive VCM. One of the questions which was also asked is the spread of PVC, VCM. That's also a factor which we also have to keep into perspective.
Thank you, sir.
Thank you. The next question is from the line of Arun Baid from ICICI Securities. Please go ahead.
Hi, sir. Just one clarification. Based on whatever you've seen in July and the trends in the near term, do you think for the first half of this financial year, we'll at least be flat YoY?
Arun, as we have just mentioned, July was a good number, we are hopeful that a slight plus YoY basis we can expect. Still, the August and September, we need to see how the volume comes. Since in anticipation of the July Sorry, as per the performance of July, if we continue to go that, then definitely we can see such a plus number.
Got you. Thank you.
Thank you. The next follow-up question is from the line of Shravan Shah from Dolat Capital. Please go ahead.
Sir, last on the other income, this INR 75 odd it was lower half because of some there. Now this number is kind of sustainable. On a full year basis, can we kind of look at INR 300 odd crore kind of other income?
No. Nishant, one, you have to keep in mind, because this is purely driven by the bond yield scenario in the market, and these are the mark-to-market gain/loss, not the realized gain/loss. As the stable bond yield, then the number will remain in the range bound. If you see a quite volatility in the bond yield, because of the lot of factors keeps in place, while deciding the yield of our portfolio.
Sure.
If the bond yield will remain range bound, then the number will definitely come. Otherwise, this is simply purely mark-to-market gain/loss, not the exactly realized gain/loss.
Okay. Thank you.
Thank you.
Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments.
Well, thanks for the interesting discussions. A lot of questions around growth, around market shares. I just would like to comment that our endeavor will remain focused and to be able to deliver sustained margins over time. With that, I would like to say thanks to everybody for your continuous trust and support. I look forward to interacting with you all next quarter.
Thank you so much to all of you for your continuous support and confidence in the Finolex Industries. Thank you so much from my side as well.
On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.