Ladies and gentlemen, we welcome you all to Q1 FY 2024 earnings conference call of Venus Pipes and Tubes Limited, hosted by Antique Broking. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. 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 and zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Pallab Agarwal from Antique Broking. Thank you, and over to you, sir.
Thank you, Neil. Good afternoon, everyone. A very warm welcome to everyone for the Q1 FY 2024 earnings call for Venus Pipes and Tubes Limited. Today we have with us Mr. Arun Kothari, the Managing Director and Chief Financial Officer, Mr. Dhruv Patel, the Whole-Time Director, Mr. Kunal Bubna, the President of Finance, and we also have Mr. Stephan Muller, who's the marketing representative for Venus Pipes and Tubes for the European markets. We will have the opening remarks from Mr. Arun Kothari, followed by Mr. Stephan, who will brief us on the on-ground situation and operations of Venus Pipes in the European markets. Following which, Mr. Kunal Bubna will discuss the operation and financial performance for Q1 FY 2024.
Please note that Mr. Stephan will be on the call only to give his opening commentary, and rest of the question-and-answer session will be addressed by Mr. Arun. Thank you, and over to you, Arun, sir, for your opening comments.
Good afternoon, everyone. To begin with, we have uploaded our Q1 FY 2024 investor presentation on the stock exchanges and company website, and I hope you had an opportunity to go through the same. I will give you a brief update on the quarter gone by. First, that we'll talk about our strategy for FY 2024 and beyond. If I look back at FY 2023, it was a special year for us. We came up with an IPO and raise fund for expanding our facilities. Since then, there has been no looking back. We had a robust financial performance in FY 2023 and achieved highest-ever revenues, EBITDA and PAT, aided by favorable government policy and macro environment in the country. We entered in Q1 FY 2024 with great enthusiasm and commenced commercial production for our plant capacity expansion of seamless pipe and welded pipe.
Alongside, we have also commenced commercial operation for backward integration of the seamless pipe production of mother hollow pipe. We now are up and running with full capacity of the 33,600 MTA and with the CapEx cycle India booming and improving geopolitical environment, we are optimistic of demand scenario going forward. Talking about the Indian economy, India continues to remain in bright spot on the globe. Reports by various agencies expect the world GDP growth to be around 3.5%, while India is expected to grow by 6.5%, largely led by Government focus on manufacturing sector with initiatives such as PLI and Make in India. We believe that this initiative will act as a catalyst to the optimistic CapEx cycle and manufacturing capabilities, and capacity creation will happen across industries. The result of this focus is largely visible with India's PMI being above 55.
Speaking on the stainless steel industry, overall the stainless steel pipes and tube industry is experiencing a shift from unorganized to organized player on the back of addition of anti-dumping duty by the Government in seamless pipe, compulsion of the BIS certification in stainless steel pipe industry, more focus on customer towards quality and reliability of the product by consumers. Coming to Venus, I would like to give a few important updates. As we are seeing higher capacity creation across industry, we are optimistic of the demand scenario going forward, and hence we will be adding further capacity of 4,800 MTA of the stainless pipe in next six months. We recently commissioned our LSAW plant for manufacturing welded pipe. This LSAW plant was initially proposed to manufacture pipe up to 48 inches dia. However, we have enhanced our capability and now this can manufacture pipe up to dia 56 inches.
This will increase our SKUs offering. A few modifications have been done in installation of the piercing line for manufacturing of mother hollow pipe, which will lead to higher operational efficiency of the mill and will ultimately lead to increase in production efficiency. This will ensure the majority of our requirement of mother hollow pipe for in-house manufacturing of the seamless pipe will be catered through this capacity. The total capital outlay for this expansion should be in the range of INR 40 crore-INR 45 crore and will be funded from internal accruals.
Speaking on the Q1 FY 2024 performance, our revenue from seamless has increased almost 150% on year-on-year basis on account of higher demand by customers for seamless pipe across industry. We were able to generate higher revenue from this segment due to our high quality reliability and in-house manufacturing capability and trust for Venus brand in the market.
Revenue for welded pipe stood flat primarily on the back of reduction in the raw material prices, which is passed through in our industry. Having said that, our volume growth was healthy for our welded pipe as well. Our own blended level, if you see the volume growth, has been in the range of 70% on year-on-year basis and in range of 25% on quarter-to-quarter basis. Speaking on the financial performance, we are happy to report that we have been able to achieve our highest-ever revenue and profitability for Q1 FY 2024.
Our revenue for Q1 having increased by 58.1% for Q1 FY 2024 on year-on-year basis, while our EBITDA saw an increase of 91.7% on year-on-year basis. I would like to highlight that our EBITDA margin show a significant improvement, largely attributed to higher sales from seamless pipes, which is a high-margin rate, and also because of our backward integration of the mother hollow pipes. With our consistent supply of the high-quality products on timely basis, we have been able to increase our share of sale to direct domestic customer to 68% in Q1 FY 2024 as compared to 55% in Q1 FY 2023. This is testimony of our product quality and trust in the brand Venus by our customers. Export sales for the Q1 FY 2024 were down primarily on account of the use of imported raw material for manufacturing of seamless pipe.
We have commenced our manufacturing of the piercing line as a strategy of backward integration to manufacture the mother hollow pipe. With this backward integration, we believe that export revenue should see a huge upswing in going forward. We also continue to participate in multiple fairs and exhibition across the globe to display our wide range of products and our manufacturing capability for increasing our brand presence in the export market. We have been receiving positive response and inquiry, giving us confidence to improve our penetration and achieve a targeted export. Stephan on the call will give you more updates on our export market, especially in the European market and on our strategy around it. Overall, we are well-positioned to capture new market for the strong partnership and continue to raise the bar in terms of product excellence and customer satisfaction.
I now hand over the call to Mr. Stephan Muller, who has been associated with Venus Pipe for more than a 1.5 years now. He's the marketing representative for Venus in the European market. Stephan has experience of over a decade in this industry with a strong network and customer relationship across the European market. Over to you, Stephan.
Thank you, Arun, and hello to everyone. I will begin by giving some short overview on the current economic situation in Europe and will move on to talk about operations and opportunities for Venus Pipe and Tube in the European market. As you all remember, over the last 24 months, Europe has faced numerous challenges that have impacted its industries and of course, its economy. You know about the geopolitical tensions disrupting the demand and consumption. We have faced higher inflation on account, increasing interest rates, and we have energy prices which have been rising 3x higher of what it was pre-COVID period. To add onto this, Europe is facing a labor crisis, missing people. Cost of labor has increased multiple fold in the last two to three years. You see, all this have caused significant challenges for local European manufacturers in this market to sustain and expand the capacities.
In fact, the smaller unorganized players with small manufacturing facilities are facing, I will say, even survival challenges. The local manufacturers in Europe have not made any significant investments in expanding their technology and capacity over the last years. This opens up a huge opportunity for an organized manufacturer like Venus, who has developed its capabilities over time in terms of product portfolio, quality, SKUs, certifications and technology, which is one of the best in the industry. Talking about Venus, the company marked its presence in Europe markets for more than five years now. During this initial phase, Venus as a brand, improved its market presence by serving customers with quality products. The way the industry works is when a new player enters in the market, there's a gestation period involved, and customers place trial order before handing out larger ones.
For Venus, this gestation period is largely over. The company is now receiving full-fledged big orders from customers, and the order book and pipeline looks very robust. This evidence of Venus' ability to quickly establish a strong brand, thanks to its timely and high-quality product offerings. The Venus success in the European market can also be attributed to its collaboration with distributors, retailers, with focus on high-value products. By catering to specialized needs and delivering exceptional customer service, Venus has gained a competitive advantage over more competition. Additionally, the company's backward integration of production of mother hollow pipes for seamless pipes has further increased acceptance of the company products. If you take the terms of demand scenario on account of energy crisis pertaining in Europe currently, all the existing heat exchanger systems are mostly seeing a revamp.
This will benefit Venus as company manufactures stainless steel high precision and heat exchanger tubes. Demand from offshore oil and gas companies as well pharmaceuticals will grow for the seamless and welded pipes. Going forward, Europe will provide multifold opportunities for prominent stainless steel pipe manufacturers like Venus. Well known for quality and will play an important role. Venus has strategically positioned itself to capitalize on its strengths and face emerging opportunities, making a formidable manufacturer in the stainless steel pipes and tubes category in Europe. That's the small resume from Europe. Now I will hand over the call to Mr. Kunal Bubna, President, Finance and Accounts, to take you through the operational and financial highlights of the quarter. Thank you for listening.
Thank you, Mr. Stephan Muller. Good afternoon, everyone. A very warm welcome to our earnings conference call. We are happy to report that our company has yet again reported higher quarterly revenue, EBITDA and PAT in Q1 FY 2024. On the revenue front, revenue for Q1 FY 2024 stood at INR 179.6 crore as compared to INR 113.6 crore in Q1 FY 2023, a growth of 58.1% year-on-year basis. Revenue contribution for the quarter was 34.62% from seamless and 4% from other sales. Sales from seamless pipe increased by 150% in Q1 FY 2022. The growth in this seamless was backed by robust volume growth. Sales from welded for Q1 FY 2024 stood at INR 60.8 crore as compared to INR 60.3 crore in FY 2023.
The sales for welded pipes were flat majorly on account of dip in the RM price as compared to Q1 FY 2023. If we further analyze, we have witnessed a double-digit volume growth on year-on-year basis. Our direct domestic sales to brand are up 95% year-on-year in Q1 FY 2024. Sharing of revenue from direct domestic customer has increased to 68% in Q1 FY 2024 from 55% in Q1 FY 2023. As mentioned earlier, export market has seen temporary reduction in sales due to use of imported RM in manufacturing of seamless pipes. However, with the new capacity operational now, we believe we have a huge runway for a growth in export market going ahead. On the EBITDA front, EBITDA stood at INR 27.6 crore for Q1 FY 2024 as against INR 14.4 crore in Q1 FY 2023, a growth of 92%.
EBITDA margin for Q1 FY 2024 stood at 15.4% as compared to 12.7% in Q1 FY 2023, a growth of 270 basis points. PAT for the quarter stood at INR 17.4 crore as compared to INR 9.1 crore in Q1 FY 2023 and INR 13.5 crore in Q4 FY 2023, a growth of 91% year on year and 29% QoQ. Further, we at Venus strive to increase our market share by adding in the product portfolio and-
Sorry to interrupt you.
Okay. With this, I would like to open the floor for question-and-answer round.
Thank you very much. We'll 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 your question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. The first question is from the line of Kunal Kothari from Centrum Broking. Please go ahead.
Yeah. Thank you so much. Many congratulations to the Venus team for their set of numbers. My question is related to what will be the current order book and how we see the exports turning going forward, and what is the reason that from last couple of quarters, we having such a dull export sales?
Yeah. Basically, the order book is around INR 200 crore as on date. Further from the perspective of export, as we said earlier also, the Chinese imported raw material are not accepted by the European manufacturer. That has been holding up to exporting more quantity. As you know, we have started the backward integration of hollow pipes, that is in-house manufacturing of hollow pipes by putting up piercing technology. That has started from May 24th. This will really help us to penetrate the export market. Out of this INR 200 crore of order book, we have around INR 35 crore-INR 40 crore from export order book. I think from the coming quarters to come, there will be more penetration towards export side.
Okay. Great. Second question is, as we have expanded our capacity with much value-added product portfolio. Compared to our traditional area of sales, where we see our business expanding further, like we are entering into new segments or new customer base and new geographies. Can you just throw some light on the strategy going forward, how we are expanding our reach and achieve our sales target?
Basically, if you see the predominant sector, what we have been chatting earlier was chemical and engineering. It will definitely always form a good five of our total contribution. We have been expanding to pharmaceutical, food processing, oil and gas. These are the few other sector which will be fertilizer, Food processing and all in this, that would be further added up going ahead with this entire SKUs of higher sizes and all being built up.
Further clarity.
Yes.
Further clarity, we are recently aware that there is a very good demand coming from the railway sector. We have already started to supply to a number of companies who are manufacturing the vehicles. There is a very good demand coming from the railway sector also. This sector has been added in the last quarter.
Okay. Lastly, sir, on LSAW, as it's a new product portfolio that we added, which sector does it cater to?
There is a very good demand right now coming from India in the water sector. It will go in the oil and gas also. Some part will also go in the chemical sector also, or some part in fertilizer sector. In all these sectors we are already catering to a number of customers.
Okay, great. Thank you so much, and all the best for future. Thanks a lot.
Thank you. Next question is from the line of Dhruv Jain from Ambit Capital. Please go ahead.
Hi, sir. Thank you so much for the opportunity. Sir, I had a couple of questions.
Sorry to interrupt you. Can you please speak through the handset?
Can you hear me now?
Yes.
Yeah. Sir, I had a couple of questions. Sir, one was that in your investor update, you've mentioned that you've seen a decline in realization in the welded segment, and that's why revenue is flat. Can you just let us know what was the quantum of decline, please?
Yeah, it was in the range of 13%-15%.
Okay. Sir, with respect to the order book that you mentioned, right? If you could just let us know what's the percentage of stainless or seamless pipes as a thumb rule, if you should think that as a percentage of the overall CapEx, what your customer is doing, what will be that quantum in terms of, say, the seamless or the welded pipe?
Basically in volume term, 55%-60% would be welded, balance would be seamless pipe.
Okay. I was talking more from a, say for example, if the project size is X, what will be the quantum of the seamless or the stainless pipe as a percentage of the overall project size that your customer might be incurring, if there's a calculation that you have done?
No, it's really very tough to give because it depends how far is the site, how many internals, say, move the pipe within the premises. There are n number of factors which play into it. Giving any fixed figure of any percentage would be very, very tough for us.
Okay. Since we have Stephan also on the call, I also just had a question for him as to how has been the acceptability of the Indian seamless and stainless pipes, and how has that acceptability changed over the last two or three years? In case, because you guys are looking to export in a big way in the future, what's the sort of regulatory barriers that have been created? Any color would be appreciated there, sir. Thanks.
We have been exporting to Europe for more than five years, it had been around 10% of total export volume in FY 2021. From FY 2022 onwards that we have been facing challenge because of the Chinese raw material. I think the acceptability of Indian-made seamless pipe and also through the piercing that is highly acceptable in Europe. There are no as such we have found any plant coming up with any specific demarcation between piercing or any other technology in Europe till date. I think it is widely accepted. Again, see the prices and other factors, because of that, the prices are on the higher side what the European manufacturers sell as compared to we as Indian goods are priced, would give also us a competitive advantage to penetrate this market.
Thanks, sir.
Thank you. Next question is from the line of Sneha Talreja from Edelweiss Financial Services. Please go ahead.
Good afternoon. Congratulations on great first numbers. Sir, just two questions from my end. Firstly, just wanted to understand about the new capacity additions that you are taking, please. If at all you could just give us some light on the seamless side. Quickly, just after increasing your capacity by 3x, what is giving you confidence to increase the capacity further? Where are we right now in terms of expanded capacity, and how do we see the utilization rates ramping up? Some flavor here would be helpful.
See, basically, for seamless, as we said, all the capacity had all been installed and started. On the front of seamless, we are working on a 60%-65% utilization level. On the front of hollow pipe manufacturing is around 55% or till last quarter, the utilization level. For welded, the new capacity for welded, that is the higher dia tube mills and the LSAW which we recently started on July 21st, that has been working around 25%-30%. The reason for expanding in seamless, we have been seeing good amount of traction, post anti-dumping and all for seamless. Many of the users are also shifting to, though it's costly, one seamless, but they are also shifting because it can withstand more pressure and is comparatively more quality-wise, more comfortable when used in your process.
We found keeping an ear has been seeing our seamless turnover has been increasing both in the form of value and volume. That gives us the utmost confidence to increase the capacity around 50% for seamless going ahead. As we said to you earlier also, we will also be trying to work on a smaller size of tubes. It will be more of a value-added product also, and it will also give us a higher margin going ahead.
Sure, sir. What about the utilization going ahead? How are you seeing that scaling up?
We are targeting for FY 2025 around both welded and seamless taken together around 70% of the 33,600.
Understood, sir. Just last technical bit.
Sorry to interrupt you. I will request to join.
Sure, we'll do that. Thank you.
Thank you. A request to all the participants, please restrict to two questions per participant. If time permit, please come back in the question queue for a follow-up question. Next question is from the line of Neeraj Shah from GC Investments. Please go ahead.
Yeah. Good afternoon, sir, and congratulations on a very strong set of numbers. Two questions, sir. We are expanding our seamless capacity by 50%, and through some efficiency levels, we are also increasing the piercing capacity. Will it continue to match on an expanded capacity basis?
No. We are trying to match, but we believe we will be able to come in first those utilizations start, but it will not 100% match with that.
Okay. Till we operate at 85%, 90%, it should be okay. We should be sourcing everything internally.
I think those level we would be able to achieve it going ahead, it will take a few more months for us to do those entire production and come up with those answers.
Got it, sir. The second question is, you've just mentioned, you are targeting around 75% utilization for FY 2024.
70%, yeah.
75%. 70%?
70% on the total 33,600.
That number we have guided earlier at 60% capacity. We are kind of slightly upping our guidance.
Yes.
Okay.
Keeping all, if you see the first quarter volume growth and all, and in the last quarter, we believe there are good amount of upstate in the market from the penetration level order book. We believe we will be able to take it to 70% in this FY 2024.
Got it. During the quarter, the volume growth was how much, sir? Blended basis.
25% around.
25%, that was sequentially?
QoQ.
QoQ volume growth. Okay, great, sir. Thanks, sir, and all the best.
Thank you. Next question is from the line of Sahil Sanghvi from Monarch Networth Capital. Please go ahead.
Yeah. Thanks for the opportunity and congratulations for a good set of numbers. My first question is that now once this 400 tons per month of new seamless capacity will be commissioned, we will have around, say, 14,000 tons roughly, annually coming from seamless and 24,000 tons from welded. That means we will be higher on the high-margin product in our portfolio. Can we do more better margins from what we have guided now?
See, basically this seamless would be coming in the coming six months, it will be more of the end of this financial year. I think what we have guided around on a blended basis, 30% upstate in the margin. Currently, I think we stick to that, but definitely add capacity, but it will come into effect of this calendar year.
It will come in when? Sorry.
Other six months. It will be in effect. Not much result-
Sir, sorry to interrupt you, we are losing your audio.
Yeah. I have to say it will come in effect to not much of this. It will add this year. I think better to take the guidance of 30% on a blended basis utilization EBITDA for FY 2024.
My question was more of on a full utilization basis, if whatever capacity we've commissioned, including the new seamless that you announced yesterday, as a complete portfolio, we'll have higher proportion of seamless then, compared to what you had announced before. Margin guidance remains the same?
Yes, Sahil ji. For the seamless segment, in overall basis, we should see.
So-
Hello? Yes.
Yes.
In overall basis, Sahil ji, our utilization will be around 70%. In seamless segment, we are expecting we will be able to utilize almost 85%-90% installed capacity. The new capacity will ramp up mostly in the, we can say last quarter of the FY 2024. New capacity utilization, we can expect for the last quarter, we'll utilize some of the capacity in last quarter of the FY 2024.
Got it, sir. My second question would be, what would be the revenue potential of this complete capacities that you've announced and everything, including the 400 million metric tons per annum of seamless. What could be the revenue potential, sir?
See, from all this capacity, we can see upside revenue compared to the FY 2023. We can see growth of the almost 2.5x compared to FY 2023.
2x-2.5x .
2x-2.5x . Depends on the segment, which segment we'll cater because there is some grade difference also. If you'll manufacture the higher grade pipes, then there will be revenue may increase or almost minimum 2x the revenue potential minimum is there. It can be up to 2.5x .
Got it, sir. Got it. Thank you so much.
Thank you. Next question is from the line of Vikas Singh from PhillipCapital. Please go ahead.
Good afternoon, sir. Congratulations on a very good set of numbers. Sir, just on the immediate term, I just wanted to understand, if I look at your numbers, then this quarter seamless has jumped significantly while welded has been kind of the package. Is it going forward when your welded capacity is to start ramp up, are we expecting any dilution in margins or this kind of the margins we would be able to maintain?
Basically, for seamless, it's basically not in percentage. This is what we see the margin. Our EBITDA per kg what we see. There will be no dilution in the margin individually if I see a welded or I see for seamless. For both welded and seamless, it would be increasing going ahead also. Proportion-wise, definitely seamless was on the higher side in value terms of 60%-62%. Definitely as and when with welded come, volume-wise if we see it will be 65%-70% welded and around 35%-40% for seamless.
Understood, sir. Sir, my second question pertains to our LSAW Mill. If I compare to some of our competitors, our LSAW Mill size is usually very small and oil and gas usually demands for a larger capacity kind of the mill. Just wanted to understand what was the thought process here, or we have a plan to get into further larger capacities of LSAW and then HSAW in a future course of time.
Vikas, for oil and gas sector, for in SS segment, we had the LSAW facility up to 56 inch dia size of the pipe. Previously, as earlier mentioned, previously it was planned up to 48 inch dia size of the pipe. In almost all the largest water quantity consumed in the oil and gas sector is mostly up to 56 inch dia size of the pipe. We can say more than 80% is the quantity is up to 56 inch dia size of the pipe. We'll be easily capable to supply to oil and gas segment because we can able to manufacture up to 80% of the total requirement of the oil and gas sector, whatever they require.
I was more talking about the tonnage basis. Our capacity seems to be pretty small vis-à-vis competitors. That's what I was basically.
No, Vikas, if you see in the quantity basis, in the SS segment, in all the other competitors is also having LSAW facility of almost this size of level. This is the SS segment. The other players who are having bigger, more LSAW facility will be in the carbon steel and other products. In India, almost the all LSAW plant, which is having the segment in the SS industry, is having capacity in ton almost equal to us only.
This is purely SS LSAW.
Yeah, purely SS.
Understood. That answers my questions.
Okay.
Thank you, sir, and all the best.
Thank you. Next question is from the line of Shivam Vashi from Inga Ventures. Please go ahead.
Hey. Hello, sir. First off, congratulations on a great set of numbers for the quarter. Sir, I just want to understand, we have a piercing. Venus has a piercing line for the hollow pipes. Vis-à-vis the extrusion, how is the market shaping up in terms of product acceptability? Is the customer do demand for extrusion or no, they are fine with piercing, the piercing pipes are now more acceptable in the market. Can you just throw some more light on it?
Sir, generally what we are seeing with the customer, it is the standard what they narrate specification or it is not the technology basically what they are pinned on. Generally, what we find 90%-98%, around 90% is acceptable is extrusion technology. There can be few brand difference or other very niche sectors where the specific demand for extrusions are there. Obviously, as I said, majority are very comfortable with this technology. Basically, they liberate the standards of manufacturing of pipes.
Sir, the fact that piercing line, it seems to be when I see it with our competition, because of piercing line we are having a better asset turn vis-à-vis competition where in the extrusion line have a lower asset turn. The competition is going towards that as well. I just want to understand how large is the market size for both piercing and extrusion. Piercing is now outdoing extrusion in terms of acceptability. Hence Venus will be sticking to its piercing line only.
Shivam-
Please.
Shivam, for the extrusion or piercing, we cannot able to define the whatever capacity in the market required from the extrusion or the piercing. But what we have observed since in last five years in the market, acceptability of the piercing product as well as the extrusion product is almost at the same level. There is a very few industry in the India or world which demand particularly if any quotation, any inquiry come from any buyer, they never ask if material should be from the piercing or material should be from the extrusion. They simply ask the seamless pipe. Almost in the 95% of the seamless demand in all of India, as well as in the global level, is the piercing product is acceptable. Some of the 5% we can say whoever demand products from the extrusion.
Right now, if any competition will come from the extrusion segment, because in market, both the product quality is accepted. Piercing product is also accepted in the international market as well as in domestic market in any type of industry. We don't foresee any competition will come due to reason of the extrusion or piercing mill. It depends on the. You get the similar margin, better margin, because in India or in globe, very few players having the extrusion facility. You can get slightly better margin on extrusion facility. Right now we are not much able to define how much capacity is required in piercing or how much in the extrusion.
Right. Basically, given the kind of acceptability that is coming in for piercing through hollow, we are very much well-placed. The acceptance will be fine for us to serve this market with a lower capacity.
Yes, sir, we are very hopeful.
Great, sir. That answered my question. Thank you, sir.
Thank you. Next question is from the line of Harshad Zaveri from Pi Square Investments. Please go ahead.
Okay, sir. Congratulations for the great set of numbers. You guided that the order book currently stands around INR 200 crore. Is it repeatable in next one quarter?
Yes, more or less for 90 days-100 days only.
Okay. Your guidance for 2x-2.5x revenue, that we expect by FY 2025?
Sir, see, the endeavor is always there to achieve it by FY 2025.
Okay. Sir, with you being concentrated in the chemical industry, currently the industry is facing some headwinds with around 40%-50% utilization. Do we see that as a risk for Venus as a brand?
Sir, see, definitely chemical form a good chunk, but again, we supply to 10-12 other sector also. Engineering also form a good pie of our total order book and all. That's why we have been expanding to other sector, expanding to other part of the country, and we are also trying to penetrate ourselves in export market. That's why we want to hedge it in a way so that any sector being affected, as you said, like chemical is slightly affected, we are not affected much by that.
Okay, sir. All the best.
Thank you.
Thank you. Next question is from the line of Harsh from KRIIS PMS. Please go ahead.
Thank you for the opportunity. Congratulations team for a great set of numbers. I had couple of questions. One, for expanding domestic market as you increase the guidance also. We are seeing our market growing faster, or is that we are confident that we would gain share from the other set of players? Is it a combination of both, that the additional capacities would get absorbed quicker this year?
Definitely, it will be combination of both. As I said, we were targeting other sector also. We are also targeting other part of the country, and we are also targeting a good amount in export market. It's basically a mix of all these combination which give us the confidence that we will be able to achieve the target number what we have said.
Got it. Perfect. Just one more question. Apart from Europe, do we have any other big market where we can look to explore and like we have an advantage in Europe, some other country, et cetera, where we can target in future?
Yes, definitely. We have the other country also in our target. We are exploring opportunity in which country we can focus. There's a very good demand comes from the United States also. Demand comes from the Africa also. Right now we are in the export market, we are heavier, the more focus in Europe. In coming quarter, we can see the growth in the African market as well as in U.S. market.
Perfect. Just one follow-up question on this. If the landed price would still be competitive in U.S. and Africa, post shipping and everything, right?
Yes.
Definitely.
Okay, perfect. Thank you so much. Best of luck.
Thank you. Participants, you may press star and one to ask the question. Next question is from the line of Ankit from JHP Securities. Please go ahead.
Am I audible? Hello?
Yeah. You are audible.
Thank you for taking up my question, congratulations on a good set of numbers. I have one question. What is the segment-wise sales volume for both the segments?
Sales volume?
That's it.
Sir, we don't give quarterly volume. It's being given on annual basis only.
Okay. Thank you so much.
Thank you. Participants, you may press star 1 to ask the question. Next follow-up question is from the line of Sneha Talreja from Edelweiss. Please go ahead.
Thank you for the opportunity again, sir. Just wanted to understand two bookkeeping questions. Where is the gross debt currently standing at, and how was the working capital days in Q1?
The working capital days are basically aligned with what has been earlier. It's around 100 days, 105 days, net working capital, actually. The gross debt for working capital is around INR 80 or INR 40 odd crore over long-term debt so t otal debt on the book on gross level is INR 120, and a net debt of around INR 105 and INR 110 crores.
Understood. Thanks a lot, Kunal.
Thank you. Next question is from Soumitra Joshi, individual investor. Please go ahead.
Hello, am I audible?
Yeah, you are audible.
I'm a newcomer into this industry. I've been analyzing this. There are two questions that I have from my side. The first one is I would like to understand from a margin perspective, we've seen a sharp uptick in the margins. Now, if we compare it with our competitors, let's say from the southern side, I'll just name them, you can ignore it if you want it. Let's say a Hariom Pipes and a Venus Pipes. What is it that we are doing differently, or our company is doing differently that slowly but steadily the margins are really going up and we are creating that differential between the two? That is the first question. The second question is with respect to, China has opened up, but really the Chinese economy hasn't kicked in.
Because of that, a lot of dumping is happening across the world by Chinese products, and that is one reason why the chemical sector is facing a lot of headwinds. Now considering manufacturing into the picture, the same reason, does it hold true for Indian pipe companies also, especially in exports, where a lot of pressure is coming in from China?
Just to take your first question first. Hariom Pipe is not in the SS grade of pipes, welded and seamless body manufacturing. It's in the completely entire different sector. It won't be right to compare us with them. We won't be able to comment on margins as compared to Hariom Pipe. See, for a reason, our EBITDA had been increasing over a period of year as we said, we have started with this backward integration. We have been adding a capacity for welded up to 48 inch- 56 inch, which very few in the country does. We have been shifting our revenue proportion from trade and stockage more towards direct sales. Going forward also, we are moving towards export and the entire backward value chain would be there. That is the reason which is predominantly increasing our margin.
From the perspective of China, we can see what has happened in our industry in the month of December 2022, on the seamless pipe and also the raw material, there has been anti-dumping implicated by the Government of India for five years. That really saves the Indian manufacturer from the China dumping thing happening here.
That would be only for India, right? When it comes to exports, let's say Europe, I am not sure if the same anti-dumping-
Europe is not taking basically Chinese raw material. It will not be much affected. We won't be much affected by new China opening for Europe.
Basically that would not be impacting the piping sector across-
Yeah.
Not only Venus, but anyone in India will not-
For Europe, I'm telling basically, Europe side won't be affected.
Not only Venus, that means the entire piping sector as such is not impacted by China.
We can't say all the pipe sector, especially we are talking about the stainless steel pipe industry, in SS pipe industry, not in the carbon steel or in MS.
Okay.
Piping sector is defined in different sector. Venus is in SS pipe industry. Where in India is very few players is having SS facility in India.
Okay. In this particular sector, because of that anti-dumping duty, there is no threat of China's here or export part.
Yes.
Okay. Thank you so much.
Thank you. Ladies and gentlemen, we'll take that as our last question. I now hand the conference over to the Management for closing comments.
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