Q2 21/22

Oct 22, 2021

Quarterly report

Ladies and gentlemen, good day, and welcome to the Q2 FY 'twenty two Earnings Conference Call of Supreme Industries, hosted by DAM Capital Advisors 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. Please note that this conference is being recorded. I now hand the conference over to Mr. Asim Harde from DAM Capital Advisors Limited. Thank you, and over to you, sir. Thank you, Rutuja. Good evening, everyone, and greetings to all. Today, on behalf of DAM Capital Advisors, I welcome all of you here for Supreme Industries q two results conference call. I would like to thank Supreme for giving us the opportunity to host them on this forum today. From the management side, we have mister M. P. Taparia, managing director, mister P. C. Somali, chief financial officer, and mister Rajilvitabhu, VP corporate affairs and company secretary. I will now hand over the floor to mister Taparia. With that, we can open the floor for q and a. Thank you, and over to you, sir. Thank you very much. I am MP Taparia, managing director of the Supreme Industry Limited. I, along with my colleagues, chief chief finance officer, and chief Ajai Sabu, vice president corporate affairs and company secretary, welcome all the participant who are participating in the discussion of the uneducated standalone and consolidated financial results for the quarter and half year ended thirtieth September twenty twenty one. The standalone results and the consolidated results are already with you. I'll give brief on company's product, operating performance and other highlights. The company sold hundred thousand two thousand six hundred seventy three 102,673 metric tons of plastic goods and achieved net product turnover of rupees 1,901 crore during the second quarter of the current year against sales of 94,836 tons of plastic goods and achieved net product turnover of INR $13.22 crore in the corresponding quarter of previous year, achieving volume and product value growth of around 844%, respectively. The company sold 173,937 tons of plastic goods and achieved net product turnover of rupee 3,211 crore during the first half of the current year against sale of 1 lakh 86,287 tons and net product turnover of INR 2,362 crore in the corresponding half year of previous year, resulting in volume degrowth of about 7% and product value growth of around 36%. Total consolidated income and operating profit for the second quarter of the current year amounted to rupee $19.32 crore and rupee $3.50 crore as compared to rupee $13.78 crore and rupee $2.82 crore for the corresponding quarter of the previous year, recording increase of about 4024% respectively. Total consolidated income and operating profit for the half year of the current year amounted to rupee 3,279 crore and rupee 617 crore as compared to rupee 2,434 crore and rupee $3.96 crore for the corresponding period of the previous year, recording increase of about 3556% respectively. The consolidated profit before tax and profit after tax for the second quarter of the current year amounted to rupee $2.96 crore and rupee $2.29 crore as compared to rupee $2.28 crore and rupee $1.75 crore for the corresponding quarter of the previous year, recording increase of 3031%, respectively. The consolidated profit before tax and profit after tax for the half year of the current year amounted to rupees 509 crore and rupees 399 crore as compared to rupees $2.83 crore and rupees 215 crore for the corresponding period of the previous year, recording increase of 8086%, respectively. The business scenario of all the product segment of the company for the second quarter of current year ended thirtieth September twenty twenty one as compared to corresponding quarter in the previous year as been held under. Plastic piping system business grew nine percent by volume and 50% in value term. Packaging product segment business grew 5% in volume and 26% in value term. Industrial product segment business grew 10% in volume and 39% in value term. Consumer product segment business grew by 4% in volume and 30% in value term. The overall turnover of value added product increased to INR $7.58 crores during the current second quarter as compared to INR $5.33 crores in the corresponding period of previous year, achieving growth of 42%. The Board of Directors has declared the interim dividend at 300%. That is 6% share of the week two each for the financial year 2122. The dividend will be paid to those shareholders whose name is 10 on the register of member as of the record date, the first November twenty twenty one. The company has cash surplus funds of 331 crore as on thirtieth September twenty twenty one and we can cash separate funds of the $7.59 crore as on thirty first March twenty twenty one. As the effect of second wave of COVID nineteen started airing down, there were revival of business in other segment serviced by the company. In spite of continuous rise in all grades of polymer prices, the company had volume growth in all these segments. The polymer prices have risen between 7% to 28 during this quarter. Higher increase was in the price of PVC resin where prices have gone up by rupee 34 per kilo. The price increase trend continued unabated in the current quarter also. In plastic pipe segment, the demand from housing segment is revived. The company had nine percent volume growth in pipe system in the quarter. Inspired to trend high price, the demand outlook in housing and aggregate segment looks maintainable. There is a shift in higher demand for CPD system as the prices of gas system have not gone higher compared to the price increase in PVC system. The company's progress in putting the plant in Guarati, Cutter, and E Road are going smoothly. All these plants will be operational between January 2022 to May 2022. The company initiate CapEx plan of rupees $5.21 crore for the year, including carrying forward commitment of previous year, is going on smoothly. The company adding new system all in above its existing 36 system and 35 system during this financial year for the for the investment plan in going forward. The new system are best pipe, best composite pipe, electrofusion oil and fittings, new model of furniture, polypropylene pipe system, varieties of grates and laminates in cross limited film, protective packaging, and performance film. They will be adding new application from these substrates. The company also company market is market is being targeted to spread to more the shield for all its product. In overall, in the 05/1934, company is aware that many purchase is still not there. So various product, therefore, shopping is now made rigorously to increase our reach in more and more. The demand for Tarpoline and metal product made from extra film is maintained at a higher level. The company able to pass the increased raw material prices to end product. Furniture business has gone up by around 4% in volume in the quarter. The company has launched successfully new models. In spite of cheap showcase, industry component business has grown in the quarter with a promising future for second half of the year. Material handling division has shown 16% volume growth. Company continues to add new product range to add value to its customers. It continues to deepen its market reach. Component cylinder engine has shown surplus in the quarter after several years of operation. The increased acceptance of the cylinder from domestic and internal market augurs well for this segment in future. The company had a volume growth of 3% in protective packaging division and 10% in performance packaging film in the quarter. Overall, in packaging segment, company's focus is to boost export business and develop new applications, eliminating with different substrates to add increased value to its customers. The company's solution provider supported the content by innovative packaging. Several new varieties of products have been launched in batch heating division. The appointment of new dealers in that division are continuing. The business is also growing. The company expect this to reach with 75 core business in this division this year. This is a brief and overall summary for the second quarter and first half of the year under reference. Thank you for your patience. Now I and my colleague, Vicky Somani and CRJ Sabu, are available to reply to various query you may have. Thank you very much. Thank you very much. We will now begin the question and answer session. The first question is from the line of Rahul Agarwal from Incred Capital. Sir, I had some broader questions, not specific to the results. On the volume side, you know, I can see fiscal nineteen, twenty, twenty one all being, you know, close to about four lakh tons in, you know, overall, of volumes last three years. First half of this year, you're looking about 7% Y o Y down volumes. Could you help me understand the direction in terms of volume CAGR, what you're looking for? And will we grow in fiscal twenty twenty two? And if you would just help me in terms of, you know, next two years? That's my first question. If you have seen in the first half, overall, our volumes have gone down principally due to demand restriction in every pipe segment in April, May, June this year as the COVID nineteen was very much widely spread in the rural area. That loss, we could not recall fully in the quarter two. During quarter two, plastic pipe business is grown. We are confident that even in six months, we will recover the lost volume in our plastic pipe division. But if there was severe loss of around 20,000 tons in the first quarter, overall, we anticipate that this year the volume growth will be still around 3%, which means we will still move in the cycle of 400,000 plus will not reaching the quoted number of five year number. This is an exceptional year, last year and this year. So, definitely, we are on the path to grow volume. But this year, we don't think that we can grow by more than three, four, 4%. Got it, sir. That helps. And my second question, sir, again, is more on the EBITDA per ton and margins. So broadly speaking, you know, fiscal sixteen to fiscal twenty, if I look at the five year average, it is, you know, about rupees 20 rupees a kilo, right, on the entire product on the company level. Fiscal twenty one obviously was 25 rupees a kilo because of, you know, improved product mix and stuff like that. Assuming a scenario where PVC resin prices go back to $70.75, on a steady state basis, your EBITDA per ton would be higher than 20 rupees a kilo? No. We will definitely when the price will drop to 75 rupees, at one time, there is a good inventory loss. Sir, I understand that. I'm saying excluding inventory loss on a steady state basis. No. You see, with the change of product mix, what we are now doing, You're missing our lower value items and adding more and more new systems, newer SKUs. So definitely, it should be maintained or should be improved. No. Our value addition was higher than 20 rupees a kilo. Last year, we sold around 300,010 plastic pipe system. So you said it's company level. Company level or plastic pipe, you're asking? We're talking PVC. No? You're telling PVC or company level? So I'm asking about company level, sir. Sorry. Page. Okay. Yeah. But company level also, we take more than 20 rupees. 400,000 tons, if you exclude depreciation also, we are in 900 crore. So you are you are I think 20 rupees kilowatt? EBITDA per ton, sir. At company level, the average was about 20 rupees a kilo. But, anyway but broadly, my point is when PVC resin prices normalize, right, obviously, there will be inventory loss, which I understand. But adjusted to that, because of your improved product mix in favor of value added products, your EBITDA per ton should be higher than 20 rupees a kilo directionally is what I'm trying Yes. Understand. Going to higher annual it was higher than 20 rupees a kilo last year also. If I exclude the inventory gain also, it was definitely higher than 20 rupees a kilo. Yes, sir. Got it. And, sir If I exclude inventory gain, it was 1,100 rupees or 400,000 tons, it was coming close to twenty eight fifty kilo. Yes, sir. Got that. And lastly, I wanted to check on the inventory. Looks pretty high, you know, about ninety days of COGS. Any specific reason why is it why it is at 1,160 crores? That's my last question. Thank you. Because PVC agent, we are finding a team shortage, so we could keep more quantity of PVC in our stock. Okay. So this is, like, raw material stocking, is it? More raw material and somewhat more finished goods also. Okay. Got it. Thank you so much, and all the best. Thank you. Thank you. The next question is from the line of Kashyap from Telami Partners. Please go ahead. Good evening, sir. Congrats for a decent number in such times. I have a couple of questions. First is, if you can just explain your thoughts on how you see the raw materials cycle panning out on the PVC side. It continues to remain tight. And what are your thoughts on, you know, by when things will get a bit normalized, or do you think this tightness will persist? Just some thoughts on how one should look at it. Actually previously, I've gone into a super cycle mode, structure, which may remain even up to year 2023 because there were not much capacity coming up in PVC. The concern is really stuck. You should not complete the petrochemical. It is also around 50% chlor alkali. As you see, Lant is coming with 1,000,000 ton capacity, but they are getting the free stock being made in their country, which is expected to arrive and then the plant may operation by 2024. Adani is planning based on imported coal from Australia, maybe 2,000,000 tons, but that also may not come before twenty four months. So that is Indian condition. India today dependent 55% import. When you are so much dependent on import, then country become the vulnerable. We are paying the top price of PVC in the world market. Compared to us, we don't really are in Latin America or Turkey, and they are also more dependent on imports. We believe overall such a tight scenario may start even sometime in March, not before. We are apart from less available PVC, there's a problem with shipping lines. The flights are extremely high, and the ships' movements are very slow due to the COVID restriction on every port. We are told also there is some in the shipment movement. So I think the shipment line and this everything may become slightly normal after six months. Currently, QC price in India are going to go further higher in the quarter that you have up to mid December quarter? This is a trend. Sure. Fair enough. And sir, would it be fair to assume that given such a scenario of tightness, our inventory days will sustain on a higher side because we will obviously not want to start with the factory of the raw material. So we will obviously keep higher level of inventory than we used to normally keep when situation was normal. So maybe for the next six months to one year, we might just have a elevated level of inventory. Some inventory we maintain, there is some gain, but there is some loss in production cost also. We we are not turning our pipeline in full capacity. At least the pipeline, we are running at a lower capacity because we are just lost in business also. That's why we are saying that we may have only 3% volume growth. Sure. Fair enough, sir. Is there just you know, do you think that CPVC, which is not gone up as much, will probably also see a cycle similar to PVC, or do you think that that will remain? Because, you know, that's been surprising. It's been pretty stable relative to what PVC has kind of seen. CPVC, additional quantity is not available in the world. Okay. CPUC become completely short now because CPUC is a good demand. CPUC, we never expected. Okay. Our company our company had 30% volume growth in Securgy. Sure. And we are not able to meet the demand. Oh, great. And, sir, finally, you know, on Supreme Petrochem, even, you know, that also has been we've been going through a super cycle as far as the spreads are concerned. And there also, I think there has been you know, there also the cycle seems strong. Can you actually give your thoughts on how we see, you know, the spread going forward? Last year, the spread was unusually very high. Yes. It's not a sustainable spread. Now the spread has come down a little bit, but, fortunately, we have got huge demand from Indian market. Our plant is fully sold out. Today, we are not able to meet the demand in the country. Fortunately, our expansion plan is going very smoothly, and we hope that our expansion capacity will be in operation by April, May next year, which will give a capacity of a 130,000 tons of polystyrene and EPS. Presently, both the products are short from our company. We are running the plant flat out, even to around 24,000 ton per month in the market, and that is not adequate to meet the country demand. So supreme country is actually at positions on the point of demand supply side. Sure. So so at one point, we used to export. Would it be fair to assume that we are basically now not able to even meet the domestic demand? Exports are virtually down to zero now. Not not zero. We had some customer commitments, so we may be exporting around 1,000 per month. And you should continue. You don't have to give. You know, material to give. Also, the response will need to look after Indian market. Sure. And, sir, the the second company which went out of the system as far as capacity is concerned, there is no chance of them coming back because, obviously, this is gonna take a huge amount of time for it to recalibrate operations. So that vacuum remains. At at that location, they can't recharge, and we have not heard any updated plan. Okay. Fair enough, sir. Sir, all the best to you and the supreme team, and I'll look forward to meeting you in person. You very much. Thank you. The next question is from the line of Chirag Claudio from ValueQuest. Please go ahead. Yes, sir. Thank you for the opportunity. Sir, my first question was on agri demand. So what is your expectation from upcoming agri season? Agri demand was pipe. We started ten, twelve days before, but then there was I'm seeing the rainfall in Maharashtra, Bengal, they're not to come, but they forget. So temporary, demand is slowed down. But I just yeah. I see the general. He knows there's any. We believe when the things become normal, the normal exit demand will come back to PVC. Okay. And on a full year basis, you said that you will grow your volumes around three to 4%. But when it comes to specific pipe division, what is the expectation? Will we be able to surpass last year pipes volume, or it is difficult to cross that volume? So, definitely, we are minus by around '20 15025. We hope that we will record it all loss, and there will be some margin, 1% growth in plastic pipe this year. Got it. We can't we can't can't record the loss. We just want to be lost in the appeal due to the peak period for this for pipe demand. No, sir. So, sir, what you are trying to say is, last year, whatever volumes you would have done in H 2, we'll be able to do that similar volumes. Right? Oh, what we do is we didn't say to last year, we'll do better this year. So on a on a year basis, we should be maintaining or changing nominal growth in pricing volume? No. Because the asking rate to maintain the last year volumes is around 14% volume growth you required in in H 2, which is a tall task number. So I'm just trying to reconfirm that. But your quantity we sold last year in six months will do better in this year, six months. This is what we presume today. Got it. But on a full year basis, it might be below last year because Q1 was disrupted. Full year basis, there will be no gain. Got it. Got it. And just secondly, on overall pipe division margins, how one should look at this given the volatility in PVC prices? And is it fair to assume that Q3 margin would be better than Q2? Margin, you see, ultimately, prices continue to remain and continue to go high. So in terms of percentage, margins come down because your numerator and denominator both goes up. Sure. There might be there. So mathematically, the margin will come down if the price continue to rise in a similar fashion. Okay. So what is the sustainable margins you are looking in in particular lane pipe division? Maybe around 15%. Okay. Thank you, Ananda. Thank you. The next question is from the line of Sonali Salgaukar from Jefferies India. Please go ahead. Sir, thank you for the opportunity. Sir, my first question is, could you share with us the operating margins in terms of percentages for q two FY twenty two across segments? Operating margin. I think this time we'll join a bit. So our desire is to discontinue the giving the operating margins per se. Understand, sir. So my second question is how would you look at expanding or probably increasing the volumes in your CPVC? As in any thoughts on expanding the CPVC product mix within Sattri? No. CPVC, we had a volume growth of 30%. We have increased our capacity by putting new plant in. We are also we are also put new capacity regarding now. So we definitely will sell more volume of CPC in this year compared to last year. Got it, sir. That's it from my side. Thank you. Thank you. The next question is from the line of Bharga Pudade from Kodak Mutual Fund. Please go ahead. Yeah. Thank you very much for the opportunity, and congrats for the good performance in a tough environment. Sir, my first question is that if you look at the five realization in 2Q and compare it with 1Q, then there is just about a marginal increase in pipe realization. So what we understand is that bulk of the PVC price increase has happened in the second half of the quarter. So is that the reason why there's just a marginal increase in pipe realization? And maybe in the third quarter, we will see a much higher realization in pipes. Is there is there a fair understanding? Anyway, we see the first part is that we see pressure going down by 19 rupee kilo. Yes. Second quarter went up by 34 rupee kilo. Right. So there are too much volatility. So month by month, I can't compare it. Can't tell you also. Net net, the price of PVC gone up by 15 rupee kilo. If we see what was the price, thirty first March, and what was the price on thirtieth September. Right, sir. And the second thing, although in the first quarter, there was less or no agreed price. Understand. Understand. That's why there's just a small movement on a q on q basis. Yeah. Yeah. But, sir, assuming the PVC prices hold at these levels, arise from a margin percentage margin basis, we might see a reduction. But on a EBITDA per kg, we should see an increase. Right? I mean, assuming the PVC price increase or stay at these levels because we've accumulated a lot of inventory as of September. Wait. Wait. Almost 400 or 400 inventories. And just given situation, we are reluctant. We want to maintain the price maintain the market of the product. So we increase the price also after two weeks or slightly more than two weeks. We don't increase the price immediately. So, sir, so far in the third quarter, have you seen any price increase in in in in pipes? Yes. In pipes. Yes. Yes. Same with the price issue. I I don't have the number in front of Okay. But we have seen some increase in the. Right? Normally, our policy, when the prices go down, we drop immediately. Okay. Okay. And then go up also, then we increase it slightly within the game of even fifteen to the eighteen days. Sir, my second question is that on a two year volume CAGR, if you look at in pipes, it is close to about 3%, and this is despite a rising consolidation happening in the market. So is it fair to say that on a two year basis, India as a country overall would have seen a decline in in in overall pipe consumption, or how to look at that scenario, sir? There may be decline this year also. Last year, there were around 14% in plastic pipe. Okay. In the country, this year also, there were some change growth. There will be a decrease. Now we are not clear, but we believe that there will decrease around 4% this year also. Okay. And this is mainly led by lower demand for agri. Is that a fair understanding? Lower demand. There is no a lower demand that people may be using more there's some carbonates also. Okay. There are many type of nonbased pipes are being produced. Okay. And people are going for cheaper quality PVC pipe. That Okay. Should go too high. And, sir, my last question is that in the value added product side, we've seen almost a 42 growth. Is it possible to share what has led to such a strong growth? Which which segments have led to this growth? We're into several new products in pipeline also in our particular particular division also and material handling division also. We are working always to increase share and range of video edit product in other segments of business. Okay, sir. Thank you very much, and all the very best. Thank you. The next question is from the line of Uttershan Upani from Haitong. Please go ahead. Yes. Hi. Good evening, Sarah. So just to continue with the previous question, like what we see that our pipe EBITDA per unit, has gone down from 36 rupee per kg in June, to 31 rupee per kg in September. Despite we have a better product mix, in September due to low agri pipe sales volume and favorable resin price movement in September versus unfavorable resin price movement in June. So sir, do you see any possibility that we may have to operate at a lower margin going forward to clock decent volume growth as we are still operating at almost double the rate of pipe EBITDA per unit, which we used to clock in the past. I don't mind. What is the value? I'm just borrowing question, probably. What is your per kg EBITDA in pipe was higher in q one compared to q two? Because we had certain inventory gain in q one because of the low price of the They cannot be inventory gain. The price has gone down like this. Even price of What I is that, like, if if we are not clear We are not calculating the way you calculate, so I will I totally replied to you immediately to you. On June 1, June 2, I don't really reply to you. What was the price? Yes, sir. I I can't check it. Yeah. You could check product mix and the pricing that way. Sir, actually, what I wanted to understand, if I see the price volume growth rate on a two year CAGR basis, it was eight and a half percent in last September, September, which has gone down to 3.5% in this September, despite having much better industry dynamics. Now, if we see our EBITDA per unit has also gone down on a sequential basis despite having much better resin price movement. So just wanted to understand from you, do we need to operate at a lower EBITDA margin to clock decent volume growth rate going forward? No. This you said this quarter, I was I I my my year going down. I I'm not aware what you're One kg. Yeah. How how can you go down? I don't know this quarter. I don't fast that it will go about. I don't know the number. I can I can calculate that and reply to you? You can ask some pretty question link. Calculate and then let them know. Sure, sir. We don't have any problem like that. So, sir, just wanted to understand, last thing from you is that whether the EBITDA per unit which was there in September, can we think that we can continue to operate at that level at least going forward? No. Were actually, we can give you we should improve the EBITDA in terms of percentage of per kg because of the various new products or new things being introduced, and the product is getting changed on a regular basis. Okay. Thanks a lot, sir. We are introducing new systems also in the piping segment. They also should add in That's all. I I should study properly. I can't reply. Yeah. You are quite. Okay. Thanks a lot, sir. Okay. Thank you. Thank you. The next question is from the line of Akhil Parekh from Alara Capital. Please go ahead. Thanks for the opportunity. So my first question is you mentioned you in your comments that there is a PVC PVC kind of a super sizing. So even for the medium term, like for next one to two years, will this make a happy scenario for companies like Shapri and other big players in terms of the realization growth as well as the improvement in market? Just from a perspective next year. No. Basically, PC will remain short. For that next year, the PC will remain short. So we cannot plan big expansion based on PVC. Okay. Okay. But but in general, we have done well in in a inflationary environment. So so does that imply that we will continue to do better basically as compared to, say, smaller unorganized peers. No. Our our our purchase is very large from domestic players, they are they are running the plant properly, so I we get adequate quantity from domestic players. Okay. Okay. Second, sir, in the in the result update, you have mentioned that there was a shift in higher demand for PPG systems as the prices of the system have not gone high compared to PVC systems. So does that imply that demand has shifted from PVC to CPV because there has been an Yeah. Right. But isn't it right that the application of PPV and PVC is complete are completely different? In plumbing system, up earlier, they were buying only up to one inch of one and forty five. Now with large diameter also, one and a half, two inch, two and a half, three, and four inch, they are shifting to PVC instead of they are shifting to CPVC instead of PVC. Okay. Okay. But you cannot get but you cannot get CPVC. Okay. Sir, last question on web capacity, sir. If you can please highlight segmental load, how much the capacity is, and where it is expected to do the end of Yes. Capacity is on thirty first March twenty one. We had a total capacity of about 697,000 metric ton. Okay. And by end of this year, we anticipate it should be somewhere about 750,000. So 50,000 metric ton capacity will come into production by end of this year, additional. Okay. And and segmental wise? The breakup of 750,000, the plastic pricing will be 547,000. Industrial product, 80,000. Packaging product, 88,000. And consumer product, 33,000. 33. Right? Yeah. 33. Within plastic, sir, could you be able to highlight how much is CPV? CPV, CPV, don't use separate data. Okay. Okay, sir. No worries. Thanks a lot, and best wishes for coming. Thank you. The next question is from the line of Ritesh Shah from Investec. Please go ahead. Hi, sir. Thanks for the opportunity. Sir, couple of questions. Sir, in one of the answers, you indicated that we have increased there has been price increases with a lag because we want to maintain market share. Sir, just want to understand why and and how should one place this basically? Price increases with a lag because to my understanding, when Reliance increases prices, we immediately increase prices in a week or in ten days. Is it something to do with the price elasticity? And if this particular comment, is it for any specific is it for tarpaulin, or is it for plastic piping? Sir, how should one understand this? Tarpaulin, also, I don't repeat the price next day. Same in the furniture, same in plastic pipe. We're gonna increase the price next day. In pipe, we used to, but this is volatile. No. Well, five also never generally, generally, don't increase, but now we set a big increase after our distributor given commitment to several builders to supply the pipe pipe system to them, they'll be put in great difficulty. So we'll take care of our marketplace also. And since you keep weekly price, you can't eat. We are selling products. We are not selling raw material. That's that's useful, sir. Sir, what is the b to b part of our sales on plastic piping? Our b to b b b b b to b b to to b to to b to b to c. We don't sell b to b. We sell b to b for some time to see. Okay. A part testing system, which is b to b to c. Okay. Okay. But, sir, there there would be some projects sales. I'm I'm just trying to get a sense for that. Project sales again made by our distributors. Okay. Okay. That's that's useful. Sir, secondly, would it be possible for you to comment on how much did the industry grow in this particular quarter? What I'm trying to understand is the amount of market share gains that the company would have won given there is a large gray market premium or a smaller guy is finding it difficult to procure resin. So I think that's a big advantage to the company. So, sir, just trying to understand on the market share gain, sir. I think market share will start better in April. Okay. Sir, one last question, if I may. Sir, can you quantify or indicate which are the segments wherein we are doing more than 100 crores of business on a on a annualized run rate basis. And you also indicated on Bath division around 75 crores of indicative business of this year, which is very encouraging. So, sir, can you some highlight on which are the segments wherein we could be clocking more than 100 crores, say including tanks, walls. And you heard the bus, which is due then we are going to cross 100 crores next year for sure. March, we do then. We are going to close 100 crores next year for sure. And other segments that we have segment, any out solid project will be 50 karat plus. And then you give 100 karat, I can't talk 100 karat unless you get it to go 100 score. Next year, I can't reply like that. Right. Sir, thanks. We have been in a Thank you. We are already asking. I already know we can talk 200 score plus. Okay. Wonderful. Wonderful. Great, sir. Thank you so much. I really appreciate it. Thank you. The next question is from the line of Abhishek Ghosh from DSP Mutual Fund. Please go ahead. Yes. Hi, sir. Thank you so much for the opportunity. Sir, if you can just help us understand the new BS norms, which has kind of got affected from first October, how will that kind of impact the overall market from the medium term perspective and mostly for the unorganized test? Let us be straight by. Yeah. This order has been straight by. Okay. So we will we'll have to wait for Yeah. We are not making, but there are so many pipe systems that we there's no BS standard. Correct. So you can't have BS. When there's no BS standard, you can't make a pipe. There are so many systems operating in our country, but we up till now, systems are not established. Okay. So what proportion of the Indian market would be or Indian pipe market would be that non BIS pipes? No. No. As I told you, there are all these pipes which is we should have in the we should have BIS with the BIS sender. So there is that one purpose is different. And secondly, when there are BH standard and people are making non BH product. Okay. Got it. $85.80 five, there is BH standard, but there are many people who are making non BH pipe. It is low cost five, and many people are buying those five. So I we don't do quantification of those quantum. I can't settle it. Okay. Okay. Non BI five is quite popular in the country. In many rural areas, people are buying non BI five only. So this but it is being given on their plant order, they will be shared by there I quote. I think the material was under heating in Maharashtra. I quote yesterday. So we we don't think that law will be sustainable. Okay. There are no BS or normal. There are certain five that that people who are non BS five also. We don't really get law of strength. Okay. Got that. So the other thing is, you know, in our earlier con calls, because of short supply of PVC and other things and working capital increase, there was this whole unorganized market share gains from the unorganized segment. But simultaneously also because of higher PVC prices, we are seeing down trading happening. So how would the branded players fared with, vis a vis the non branded or the unorganized guys during the last six months? Any color on that? No. Slowly slowly, the share of branded player will go on growing, but it's gonna be slow. It cannot be dramatic shift. But branded player, definitely, the market share will go into a small percentage over the period. Okay. Okay. Sir, just one more aspect is, you know, there was a lot of demand improvement which was expected because of the Nalsigel and the water projects, which the comments was kind of distinct. So 1Q was obviously impacted. But are you seeing any any pickup there, and that should also be a big demand driver going forward? Any thoughts around it? The demand should come now. After the rain, some time then withdraw from the during rainy season, you can't put the pipe. You you did that to put the pipe, so the infrastructure demand remains low during the rainy season. We we anticipate the demand is right from number. We can't remember to make. Okay. Okay. And sir, just one last question. In terms of the packaging segment, the volumes appear a little muted there. Was that the impact because of Silpollin part of it with Kerala not doing well? Was that the reason or any thoughts around it? No. No. Silpollin demand is growing and product packaging demand was growing. Only for 50 packaging demand was not growing to the extent what we anticipate. So we told you fifty packaging division, the growth was only 3%. Correct. That's why in packaging division, it was more than 10%. Okay. Okay, sir. Thank you so much for answering my questions. Wish you all the best. Thank you. The next question is from the line of Shailesh from BNK Securities. Please go ahead. Yes. Thanks for the opportunity, sir. My questions are pertaining to Sipreet Petro. Sir, any progress on plan with regards to ABS? And also given the payments of China plus one, are we planning to bring more products into TwinPetro as we have strong balance sheet and there will be cash approvals? Presently, the plan is on on ABS for sure. We hope to ramp up the technology in next four to five weeks, and then we'll immediately put the plan to install this in working progress. And under our investment already going on for expanding capacity of polystyrene and expanding the EPS also. So, potentially, we have no plan of any more vertical, but we'll go on growing in existing vertical. Okay. So this New vertical is going to come. By when, sir? New vertical. No. When the technology, everybody signed, then we will announce to everybody when the plan is going to start. But as on today, like, technical, everybody not signed, there's no debt to there's no debt we can announce today. Okay. Okay, sir. So now, sir, historically, we used to do a EBITDA per kg at 7 to 8 rupees. But last year, let's say '21, we did 27 rupees per kg EBITDA due to change in demand supply dynamics. What is the sustainable EBITDA per kg you are targeting, sir, in the long term? You already know that last year, delta was too high. That delta was not sustainable. Yes, sir. So any long term target you have, sir, above 15 rupees This is commodity product. You can't target low long term. You have seen the company private product. The price change also. Okay. Yeah. Anyway, we can say that we definitely got very lean origination, and we are cash surplus. We'll not have a debt, and we will definitely go on making surplus. As on today, it will look look like. Sir, in b two c product, XPS, any further plans to expand or increase the scalability of the business? Not b two c, also b two b two c. Now we don't sell direct to consumer. Okay. Because we we experienced any distributors any distributors we have added, sir, in last twenty years. What are the future plans? In the experience business, how many distributors we have added in last one or two years? And what is the future plan to increase the scale of I don't remember for me immediately. SPS, I don't remember. But we are adding a distributor definitely every quarter, but I don't remember with me just now. Yeah. Okay, sir. Yeah. Thank you, sir. Thank you. The next question is from the line of Sriniv Bajawat from JM Financial. Please go ahead. Hi, sir. Thanks for the opportunity. Sir, my question is that in the upcoming agri season, the PVC pipe prices will be much higher than the previous season. So is that risk of agri season being impacted again, the upcoming agri season, because of the extremely high PVC prices? The only thing we expect that that farmers may reduce their purchases of large diameter PVC pipe in a. We sell under 10 140 and one sixty So farmers may reduce their demand for larger diameter. They may go more for smaller diameter to meet their requirement. The demand, meter is right, going to be more only, but not not less. Though the drums are all full, farmers will like to irrigate their land, and this is the time when you need to raise the pipes. So we don't anticipate the overall which is why demand will be less. The sizes may change. Up till now, we should know indication that they are not buying 110 millimeter. They are not buying one forty millimeter. We have not seen any thing. We have 110 millimeter pipe also selling. Okay. And, sir, in as per the channel checks in the larger cities, previously, the larger builders used to buy pipes only from larger players like Supreme and Astrol. But now as you also highlighted that they are downgrading in order to save some of the cost as PV three has gone up. So do you believe that in the b two b segment, the larger players have lost share to the new and upcoming players or smaller players? We have no idea. The largest players are continuously are my customer even today. We are not aware that they should trade us. They are customers. Okay. So is there any drop in volumes from the large builders? Yeah. No. There was any drop. Now the business is good with all the builders. Okay, sir. Thank you so much. Thank you. The next question is from the line of Rajesh Shavi from HDFC Securities. Please go ahead. Yeah. Hi, sir. Good evening. I have few questions. First, if you could talk on what was the value added product revenue in q two? In q two, value added product was $707.58 crores. 58 crores. $7.58 crores. Okay. And, sir, because we see that negative operating cash flow, you mentioned that you have, increased the raisins inventory, if I heard it right. And given that the inventory raisin prices have shot up end to end, what sort of inventory gain is there in the 2Q numbers? It gave me gave me a high level rating. Give me pricing power. Yes. I don't have to increase the price, and I can still supply my customers. No. No. In inventory gain, which was booked in the Yeah. We are we are as long as I'm not looking for any inventory gain. No. I didn't get your answer, sir. I'm in in this reported numbers. Are there any inventory gain or not? Because the prices have gone up between the quarters. We don't as number, after September, there's no inventory gain. Okay. And, you mentioned that prices don't go up immediately, you know, as in when the raising prices go up. But that would be the trend even earlier also. Right? Understand because it and it is very steep. I give an example. On first December first October, price went up by 10 rupees. Mhmm. Mhmm. Thirteen days price went up by 10 rupee kilo. 10 rupee kilo. And thirteen days price went up by 20 rupee kilo. That 20 rupee kilo, we are going to implement finally fully from first number. Mhmm. Okay. So as we stated weekly. You can't pass it on immediately. Then it will kill your whole marketing network. Mhmm. Okay. And, like, yes, in this context itself, given that the prices have shot up significantly and understand the industry is fairly consolidated and, enjoys strong pricing power, But do you see any headwinds to the, you know, pricing upward in terms of passing on all these hikes, you know, even after a lag? We can increase the price differently because we get get out of the market. Mhmm. We are we are we are we the. So what is the steady state margin you're looking at in the pipes division at least, you know, a 20% is a fairly good EBITDA margin that you're comfortable with? Or is very, very well disturbed. It's such a big increase. They still still I don't know what to talk to. No. No. I'm not talking about a quarter and two. I'm talking on a from a normal run rate, assuming things stabilize at around current levels. Is it fair to say that you can operate at 20 or 25% EBITDA margin in the piping segment? 25% EBITDA margin, I I never seen that. I don't know. Okay. No. What are the numbers you are working with? We we work only that we must get more than 25% on temporary employed. 25% on capital employed, which is That is not that's not we definitely like to maintain. Right. Great. And lastly, I'm not we are 40% on temporary employed. Mhmm. And, sir, on the you know, in terms of demand, how you know, could you throw some light on how has been the industry demand in 2Q if you have some numbers on that? Demand of what? Pipes. Why why growth for the industry? Don't do that in pipe. Demand from housing, it is both are maintainable. Both are maintained. So how much would have the pipes demand? Would have grown in February? Any industry number would you have? Don't have shared with idea of pipe segment only. We were told by the local commodity producer that demand has grown more in non pipe segment. Pipe segment demand is lower. Okay. In PVC region, 74% in pipeline segment, 36% non pipe. Non pipe segment, their growth was much more. Okay. Okay. And lastly, in terms of non pipe Hey. You are aware. In our company, pipe system, we have grown by 9% by volume. Correct. So and lastly, in terms of now because you're seated with a large amount of PVC resin inventory and prices have spiked up from there on itself. And if prices hold on, will that help you in terms of better higher inventory gains in third quarter? I can't reply to your hyperinflation. I don't know how things will be repaired in next two months. I can't say anything. On the current pricing level, the other way around, are you no. What would be your average inventory cost which you're seated seated with? Is that much lower compared to the current raising prices? I'm paying today high price to the lands, and I'm still not increase the price in market. Yeah. I think 23 kilo more for the purchase in mainly month of October. Mhmm. Going to increase the price only for first number. Okay. And this inventory is for how many months, sir, which you are which is at the September? Not not not many months. Not big like that. Not much. Okay. Great, sir. I'll come back in queue. Thank you. All the best. Thank you. The next question is from the line of Vipul Shah from Sumangal Investment. Please go ahead. Hi, sir. Congratulations for good set of numbers. Sir, can you comment on the composition in the business in your release? You have said that after many quarters, it has returned in the black. So can you comment regarding volume growth and EBITDA or any figures? No. I think there is nothing such to comment on volume growth because you see this division was lagging behind for so many years. Last one and a half year or two years, no phone delivery is allowed. No visitor. No customer came. So what we have what two, three things which we can say. One is the product is well established since 2019, and our existing customers are putting repeat orders. We are exporting to Somalia, Maldives, African countries. Domestic players have also started. The OMC, they also floated tenders, and they have taken good quantities and expected to be take repeated quantities again. So IUCL and WikiTel have floated the tenders, and they've made this soft launch in the market. Both these things of us well. If domestic market opens up, definitely, it will be good for the dividend. And now the international market is opening up. The sales has started. So we are now getting good inquiries from other countries, other customers. But you see, since it is a very low base, we we really can't comment or we just think we have done very good volume growth or. Okay. Okay. Thank you, sir. So at present, its contribution to turnover is very negligible? Correct. You're right. Thank you, sir. Thank you. The next question is from the line of Naksha Mehta from Credit Asset Management. Please go ahead. Hi. Thank you for taking my question. So my question is on your inventory level. As you said that PVC resin is not available, and that's why you have stocked up the inventory. So what is our order book to justify that stock up of inventory? No. Our anyway, first, I must correct our inventory is high, not only PVC resin. PVC pipe also isn't also the content. We used to put cost limited freedom product which we keep during the off season time. So the combination of so many item is not only PVC ready. Okay. Okay. That's the I must tell you the impression. And secondly, inventory value has gone up because the revenue price has gone up. Okay. So there's no stock up of inventory in the in the sense that I I repeat again I repeat again, add on today, whatever we are having. We don't say the unit again. Is it enough to sustain our market share and sustain our business and look after our customer's requirement? Okay. But as you as you said mentioned earlier that you are buying more inventory because it's not available. Right? So you buy you're buying more inventory because it's not available. Is that's not necessary. We are we are no. Material available at a high price. Okay. Material is available at high price. So you mean there is an inflation. Right? The price I just told you, price has gone up now this year. This month, other price has gone up by 20 kilo. Right. So are you how are we able to pass on this to the customer, or or is it taking a hit on our margin? How is that being Up up to time lag of two to three weeks. Okay. Okay. No. So are we able to pass on the inflation to the customer, or are we taking a hit on our margins? I said we are able to pass on the increase cost to the customer after a leg of two to three weeks. Okay. Okay. Okay. Okay. Understood. Alright. That was my only question. Yeah. Thank you. Thank you. Good luck. Thank you. The next question is from the line of Karan from Asian Market Securities. Please go ahead. Hi, sir. Thank you for the opportunity. Sir, I just wanted to understand what kind of inventory levels are the dealer distributors sitting at? Given the fact a lot of volatility in the prices, are they stocking more or they are sufficient in terms of the current inventory? Of the 300 distributed, I cannot share on behalf of them, but we advise them. They ask us question. We advise them we don't keep unless you see more inventory. We keep only get with inventory so that your customer doesn't go back empty handed. If you keep high inventory, there's a big chance of losing big money also. Right. Right. Right. Right. Even then Just one clarification. It's only when the PVC Can we conclude? Even then, if my distributor is giving large inventory, it is for them to decide. Hello? Does this answer your question, mister Bharat? Yes. Yes. Yes. And just one last bit from my end. Sir, it is it's only when the PVC price is short up by 10 rupees or 12 rupees, we take two to three weeks to pass on. But when it is, like, 2 rupees or 5 rupees, we can pass it on with one week's lifetime. Is that understanding correct? Normally, this price increase of 34 rupees a kilo, we were passing increase minimum of fifteen days. Right. That that yeah. That is from mine. Thank you. Thank you. Ladies and gentlemen, this was the last question for today. I would now like to hand the conference over to the management for closing comments. We we thank you very much, and we are thankful to all the investors for their very intelligent question. We thank you. We thank all of them. We also thank you, madam. Thank you. On behalf of TAM Capital Advisors Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.