Sir, couple of things first on the plumbing volume. So for nine months, we have done just a 4.3% and we were looking at 10% to 15% for this year. So now what's the revised guidance for this year and if possible for next year how much growth one can look at?
I think it is difficult to view the volume guidance exactly under the current situation because we are too much dependent on how this budget, government spending and all is happening because lot of crisis are there into the liquidity side in the system. Secondly, much awaited anti-dumping duty, we don't know when it is going to be announced by the government. So if that is going to come, then the definitely volumes will be very high in the Q4. But if that is not going to come, then volume will be slow. So it depends to subject to that, we will be able to tell. So we are waiting for that. And then we will be able to tell exactly what is going to happen. If both things will happen, then definitely we can deliver a double digit number in the Q4 also. But if it's not going to happen, then it may be a single digit also.
My second question is on the exports front. You mentioned a couple of geographies, Middle East, you have opened up an office at Dubai and you are planning to do exports to European countries. Currently, what portion of your revenues is coming from exports?
We won't be able to differentiate and give these numbers please, but we are expecting a positive and we are getting positive orders for our certain value-added products, but we won't be able to give you numbers on exports.
Sir, can you provide some color on tanks, walls, and rain flow separately, given this were the growth drivers that we had identified a couple of years back, so what the progress has been? If you can provide some numbers.
So these products are going as per the plan and whatever we have guided as them being the growth driver, they are currently doing very well and they are selling as per our budgets. And individual category numbers we don't want to share, but all three categories have picked up and they are doing very good. And we are ramping up the capacity for walls also. We are introducing some new ranges going ahead. And even with tanks, we are slowly and gradually adding tank machine at every manufacturing location. So latest was added in Hyderabad, and now with Kanpur, it will be also added in Kanpur.
Sir, Sandeep Bhai, one question. Sandeep Bhai, you did indicate for UK, we have done some additional backward integration and we bought some technology from Europe and it is likely to aid margins. Can you detail this, please?
I think we have just signed the agreement. So in the Q1, that will be available to us. So once it will be ready, we will definitely going to communicate exactly what that technology is there. So right now we have signed the agreement and things are moving on. So in Q1, that will be available to us. And then we will definitely announce everything. That's going to help the India operation also.
Last question is related to the pipe business, sir. I understand there is some demand and the ADD everything has impacted, but how is the CPVC business as a segment for you and as a foreign industry is behaving?
CPVC segment is doing good for us and overall also. Otherwise, this margin profile in the piping business will not be possible also to give. [Sandeep Engineer]: We have been doing good, we'll continue to do good and it always reflects in our working. And we don't want to break up and share because these are our confidential numbers. But yes, obviously we have been doing excellently well in this segment. [Hiranand Savlani]: Sir, CPVC is our bread and butter. If that segment is not going to help us, how can we maintain 17%-18%, 18% kind of margin? But definitely it is doing well. This particular part of CPVC was a challenge, and that is across the industry. It is not only for us, across the industry this challenge was that.
And second, sir, in terms of the margin in plumbing is for nine months is very good, 18.3%. Though our range was 16% to 18%. So how one can look at, is there a possibility this margin range 16%-18% can be now on the higher side one starts building in?
No, I think my range will remain same, only now our focus will going to be more of the volume than the margin only. I think margin we are based in the industry. So now our more focus will be on the volume rather than on the margin.
And in terms of the adhesives, because though we are saying a 14% to 16% margin, combine everything, but till now it is just 11.4%. So obviously you have mentioned that UK will start now throwing the positive EBITDA. Just trying to see how one can look at in FY26 itself, one can start looking at 14% to 16% adhesive margin?
Yes, 14 to 16 we have given the Indian operation. UK has never given that kind of margin. So our Indian operation will continue to give us that range only. Even if you see that this year number also, the adhesive division has delivered a margin of I think 16.36% in this quarter and on a nine month basis it has delivered 15.97% so close to 16%. So India operation is going to deliver the similar zone of 14% to 16%, but UK has definitely one more quarter we needed for the improvement because we have done the correction. So as Sandeep bhai said, we are expecting the improvement in the Q1 onwards. [Follow-up on UK margin]: [Sandeep Engineer]: UK margin will bring back to that 5% to 10%, which has been a historical margin. And that the steps we have taken would reach there. The market growth and all depends on how these local markets function. But we are sure that we will not be de-growing anywhere. these steps which we have taken to reduce all these overhead costs and certain costs, still maintaining the business will be actually reflected in 1 or 2 quarters from now.
Just a follow up to what you just said that now the focus will be on volumes and margins you are already doing the highest. Firstly, I would like to understand how did you manage to do this margin on a quarter-on-quarter basis, higher, given your volumes were flat. And from here, would you be following the strategy of discounting on pricing as done by many other players to gain volumes? And if that's the case, what is the outlook we should expect in terms of volumes?
So I think volume depends on the industry, how it is going to perform. So our normal range will be between 10% to 15% in the volume. That is what we normally work. And next year also we are expecting that we should be definitely going to deliver between 10% to 15% minimum. Because now the base will also be low. Because if the current year single digit growth will be there, then next year base will be low. So because of that, we can easily grow 10%-15% in volume. But if the market conditions are good, like whatever was there in the last year, we can deliver even 15% plus also. [On discounting]: We are not discounting anyway. Even you see in the past quarters also, we have not sold any of our products at a discounted rate. So, there is no question of discounting the thing. [Sandeep Engineer]: See ma'am, let me be very categorially very clear about things, that if a market is having a size where even by discounting, you have seen results, people are not grown. So I think it's always better to keep your healthy margins because discounting in this consumer industry is like once you discount your product and bring that margins of the discounts down to distributors, dealers, and in the past also we have seen and which everyone will see is to bring back the price level or reduce those discount level is a big process.
So just couple of questions in terms of, you have grown, you have basically been flat but you have maintained your margins well. Is it fair to assume you would have still maintained your market share just to understand the industry growth? How should one look at that perspective?
Definitely, if you see the industry, industry had not grown in this 9-month basis, hardly 3%-4% growth is there. So we have maintained our, whatever the market share is there. So will not maintain the margin at the cost of market share. We are not going to lose the market share and maintain the margin. That will never be the mindset of the management. [Sandeep Engineer follow-up on channel destocking]: No, it should happen in a short time I feel because channel de-stocking is one thing but the uncertainty of polymer, whether it will go up, will come down, whether it's, what is the open market, what is the price of the biggest manufacturer of India, all these ambiguities and the ambiguity around what will be the effect of the anti-dumping, whether it will go up. All these ambiguities which prevail within the market, plus spending from the infrastructure, spending from wood, will be settled down in the next 2 to 3 months.
Hiranand bhai, for 9 months what is the operating cash flow in CAPEX which the company has done? And the CAPEX budget for the full year, roughly if you have fiscal 25 and 26?
I don't have a handy number. You can call me maybe post this con call. [On CAPEX]: I think we should be closing around Rs. 450 crore or so for the full year. Next year should be somewhere around 250 or so. [Sandeep Engineer]: We have done most of our plants now. We are not going to add up any new facilities because we are now, Kanpur is almost completed. So I think next year the CAPEX cycle will come down drastically on the addition of capacity here as well as in adhesive.
Sir, what is the sense on the ADD which we're talking on pipe side?
I think we are expecting that this one should come, post budget should come.
Sir, I'm asking you this question because what we have seen, resin prices has not been volatile in the last three months and there are talks of ADD. So the chances of prices increasing is more. So why is the channel not getting back to normal inventory?
But still market is talking about downward trade. So very difficult to understand that somebody is telling that first some price is going to drop. Somebody is telling me that this basic duty in this budget is going to go up from 7.5% to 10%. Somebody is telling me that in the post budget, immediately the anti-dumping duty will come. So a lot of things are moving in the market. So very difficult to know what is exactly happening. So same thing is going to happen with the dealer and distributor. So everyone is talking the different language.
Sir, if you can give the how much of the losses in the bathware segment for this quarter and nine months?
I think hardly any losses are there. We don't now separately workout because it is already merged the pipe and secondly, many of the pipe related brass fittings are manufactured in the same plant. So very difficult to segregate the EBITDA of the bathware. But I think hardly any losses will be there. What we guided that by this year, we are going to be breakeven, so yes, definitely. So next year, some contribution will come from that vertical also, positive EBITDA.
I just want to see how we can expect a topline to unfold as you have already mentioned budget and that will be a key decision. But as far as numbers is concerned, last year in FY24 we have grown top line somewhere close to 9% while your historical average was somewhere close to 15% kind of band. So moving forward what kind of growth as a percentile we expect in the coming years?
If you see the last two years, current year and the last year, our topline growth was low compared to what historical levels were there mainly because of the drop in the polymer price and the chemical prices. So both our business affected in the topline because of drop, heavy drop I can say, into the polymer price and the chemical price. So now we are seeing almost bottom is there. From here on we are not seeing a much drop into the polymer price or maybe a chemical price. So it's a question of only time when it is going to go up. But if you see the last year, our volume numbers were fantastic. But that is mainly because of the value was not there, it looks like a 9% kind of growth. But this year we are of the view that volume should be lower than the value. So value will be growing faster than the volume. So hypothetically, my volume growth will be 10% to 12%, then the value growth will be 15%. So this year, because of the base effect, we are of the view that the value should be better in FY26. That is how and we will be back to our normal growth of 15% kind of zone.
And sir, lastly, you highlighted that antidumping duty probably will help but if even if this happens in Q4, there will be a jump up in Q4 because of the stocking up by the dealers and all post that it will again back to the demand growth right?
Well, depends on when the government implements it. [Kairav Engineer]: depends on multiple factors, depends on when they implement depends on how much provisional duty comes, what will be the rupee impact. Okay, so it depends on a lot of factors and also depends on whether the demand goes up because restocking can only happen up to a certain level. After that if the demand does not pick up then people will not stock just because the price of the polymer is going to go up. [Hiranand Savlani]: I think that will be the sentimental wise it will be really positive for the market and then the market will very clear that from here on the prices will not go down.
Firstly, on the paint side, there's a lot of heightened competition in the market. So how are we progressing in terms of penetrating the market in new geographies?
Let us be very frank that when we bought the paint market, compared to the size of others, we have never acquired this business to go and create a huge, huge market. When we acquired Adhesive Business, the giant was in multi-folds and folds, and we acquired Rs. 150 crores worth of business where we had similar questions, and we said that we will continuously grow, deliver at 15%-20% pace. Now here also we are acquired a business with the size of around 200 crores-250 crores. It's not that we want to reach the India overnight or create any magic with a wand stick. We have opened, we clearly said in my opening remark, Gujarat, we are slowly penetrating. Rajasthan, we opened recently in last month, two months and we will penetrate. Then we will go to another two states. I want to open the pan India. It would be disaster for Astral, which we will never do by employing so many employees or over-stretching in capital expenditures or doing anything for heavy marketing budget. But give us time. We give us time of a few years, and you will see a continuous growth with a positive EBITDA.
From PVC side, so previously if I am not wrong you mentioned we are targeting 78,000 metric ton capacity. So are you still planning on that? And on the pricing front, since lot of players are starting manufacturing OPVC, do you see any supply side pressure or still the demand is pretty much high?
I think India doesn't have any capacity of OPVC. So I don't think any too much capacity is going to be there. And secondly, this machinery delivery time is also very, very high. So at least in the coming couple of years, we are not seeing any over capacity into the OPVC. Maybe after 2-3 years, it can be, but at this stage doesn't look like that.