Ladies and gentlemen, good day and welcome to the earnings conference call of Cera Sanitaryware Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Devrishi Singh from CDR India. Thank you, and over to you, Mr. Singh. Thank you. Good morning, everyone, and thank you for joining us on Cera Sanitaryware Limited's Q2 FY 2027 earnings conference call to discuss the results announced yesterday. We have with us today the management team comprising Mr. Vikas Kothari, CFO, and Mr. Deepak Chaudhary, VP Finance and Investor Relations of Cera Sanitaryware. We will start with brief opening remarks from the management, following which we will open the call for Q&A. A quick disclaimer before we begin. Some of the statements made in today's conference call may be forward-looking in nature, and a detailed note in this regard is contained in the results document that have been shared with all of you earlier. I would now turn the call over to the management for their opening remarks. Thank you, and over to you, Deepak. Thank you, Devrishi. Good morning, everyone, and a warm welcome to all of you for joining us on Cera Sanitaryware Limited's Q2 FY 2027 earnings conference call. I will begin by sharing a brief overview of the operational and strategic developments during the quarter, following which our CFO, Mr. Vikas Kothari, will take you through the financial performance in greater detail. Cera continued to deliver healthy growth during Q2 FY 2027, with revenues growing by 27.4% year-on-year. Both our sanitaryware as well as the faucetware business performed well, growing by 24% and 38% respectively. Sanitaryware and faucetware accounted for 45% and 43% of total revenues respectively, together contributing approximately 88% of Cera's overall revenues. Importantly, the growth during the quarter was predominantly volume-driven, with healthy traction across key product categories, including sanitaryware, faucetware, tiles, and construction chemicals. From a channel perspective, retail demand continued to recover and was complemented by an encouraging performance in the projects business. As many of you would be aware, the projects business has been an important contributor to our performance over the past several quarters. The improving contribution from retail channel is a positive development for the overall business. Another important aspect of the quarter was the consistency of growth, with business momentum remaining healthy throughout July, August, and September, rather than being concentrated in any particular month. It is important for the investors to appreciate that the broader industry environment remains challenging. While demand trends have shown improvement, the operating environment continues to be affected by elevated input costs and supply-side challenges. Against this backdrop, we believe that Cera's performance reflects the inherent strengths of the business model, as well as the multiple interventions we have undertaken to further strengthen our competitive position. Over the past few years, we have consistently worked on further developing our focus markets by strengthening distribution and dealer relationships, improving our market approach, and enhancing internal execution capabilities. These initiatives are now beginning to yield tangible results and, we believe, have been critical factors that have enabled us to win incremental market share. From a geographical perspective, we are seeing healthy traction across the wider set of markets. Uttar Pradesh has emerged as an important market for us, and the focus markets such as Bihar, Jharkhand, Odisha, Chhattisgarh, and MP have also shown traction. The work undertaken to strengthen our presence in these markets have helped us broaden our geographical presence and offset relatively weaker demand in certain traditionally strong regions. We continue to focus on deepening penetration and addressing white spaces in existing markets while simultaneously expanding our reach into smaller towns and emerging consumption centers. Coming to the input cost environment, brass and gas remain elevated during the quarter, creating challenges for the industry. We have taken calibrated price revisions across our product portfolio over the past few quarters, including a further price increase of approximately 8% in the faucetware segment, effective from September 1st, 2026, to partly offset the impact of higher brass prices. The benefits of this revision are expected to flow through the channels from later part of Q3 FY 2027 onwards. As discussed in our previous earnings call, there is a lag between implementation of price hikes and realizing their full benefits, particularly in the projects business, where certain supplies are executed against previously agreed prices. We have therefore introduced measures to strengthen pricing discipline for future project commitments and better project profitability against further increase in input costs. Alongside these pricing actions, we continue to focus on cost optimization, process improvements, and operating efficiencies. While the full benefits of these initiatives will be visible progressively, initial outcomes have led to an improvement in the operating margins on a sequential basis. We expect further benefits to flow through the coming quarters as these measures take effect. Our established sourcing arrangements and strong in-house manufacturing capabilities continue to provide us with a relative advantage in navigating the challenging cost environment. In particular, our favorable gas sourcing arrangement has helped us to cushion the impact of higher energy costs, positioning us favorably relative to several other industry participants. From a manufacturing perspective, capacity utilization has improved considerably, supported by recovery in volumes. Our sanitaryware facilities are currently operating at utilization level of 82%. In faucetware, we have been able to increase monthly production from 4 lakh units to 5 lakh units by adding certain balancing equipments of plant and machinery within the same facility. We have also selectively brought certain fast-moving products in-house, reducing our dependence on external manufacturers and strengthening our ability to maintain consistent product availability. This has been particularly relevant given the operating challenges faced by several manufacturers in the Morbi cluster. Our ability to service customer requirements consistently has helped us respond effectively to the market opportunities. On the brand front, the core CERA brand remains the principal driver of our volume-led growth. We remain focused on strengthening our position across the mass and mid-premium categories through product development, distribution expansion, and sustained brand-building initiatives. At the same time, we continue to invest in strengthening our newer brands, including Senator and CERA Luxe, with a long-term perspective. Looking ahead, we remain confident of sustaining our growth momentum, supported by improving demand and deeper penetration across existing and emerging markets. The investments made in our distribution network, manufacturing capabilities, and internal processes over the past few years have strengthened our ability to capitalize on the opportunities ahead. While input cost inflation remains an important challenge, we expect profitability to improve progressively during the second half of FY 2027, supported by the cumulative benefits of pricing actions, cost efficiency initiatives, and the healthy volume growth. We are now confident of surpassing the revenue growth target, along with the full year's EBITDA margin outlook of 13%-14%. With this, I would now like to hand over the call to Mr. Vikas Kothari to take you through the financial performance of the quarter. Thank you, Deepak, and a very good morning to everyone. I will now take you through a brief overview of the company's financial performance for the quarter ended September 30, 2026. Revenue from operations for the quarter stood at INR 603 crore as compared to INR 473 crore in Q2 FY 2026, representing a healthy YoY growth of 27.4%. For the first half of FY 2027, revenue from operations stood at INR 1,089 crore, reflecting a growth of 23.7% over the corresponding period of the previous year. EBITDA excluding other income for the quarter stood at INR 73 crore as compared to INR 67 crore in the corresponding quarter of the previous year. The EBITDA margins stood at 12.2% in Q2 FY 2027 compared with 14.2% in Q2 FY 2026 and 10.1% in Q1 FY 2027. While input cost pressures, particularly in brass and gas, continued during the quarter, we witnessed a sequential improvement in operating margins. This improvement was supported by the benefits of the pricing actions undertaken over the preceding quarters, alongside our ongoing focus on operational efficiencies and effective cost management. As mentioned earlier, the benefits of price revisions, particularly in the project business, are being realized with a time lag. The revised price arrangements for future project commitments should progressively support margins over the coming quarters. The average cost of gas during Q2 FY 2027 stood at INR 47.29 per cubic meter compared with INR 33.79 per cubic meter in the corresponding quarter of the previous year. Similarly, the average cost of brass during Q2 FY 2027 stood at INR 932 per kg compared with INR 589 per kg in Q2 FY 2026 and INR 837 per kg in Q1 FY 2027. Representing an increase of 58% on YoY basis and 11% on quarter-on-quarter basis. In terms of the revenue mix, sanitaryware accounted for 45% of our revenues, faucetware 43%, tiles 10%, and wellness 2%. On a YoY basis, sanitaryware revenues grew by 24%, faucetware by 38%, tiles by 9%, and wellness by 71%. From a channel perspective, the projects business accounted for 39% of the revenues, while the retail business contributed 61% in Q2 FY 2027. In Q1 FY 2027, we accelerated deliveries for certain projects in view of the rising input costs. This resulted in a project-to-retail revenue mix of 43 is to 57. Going forward, we expect this mix to stabilize at around 40 is to 60. Profit after tax for Q2 FY 2027 stood at INR 56 crore compared with INR 57 crore in the corresponding quarter of the previous year. Earnings per share for the quarter stood at INR 43.52 compared with INR 43.92 in Q2 FY 2026. On the working capital front, we continue to focus on inventory management, receivables, and overall working capital discipline. Inventory days decreased from 83 days to 69 days. Receivable days reduced from 33 days to 28 days, while payables remained unchanged at 39 days. Consequently, our net working capital improved from 77 days to 58 days on YoY basis. As of September 30, 2026, our cash and cash equivalents stood at INR 897 crore. Our balance sheet remains healthy, providing us with the flexibility to support our ongoing business requirements and other strategic initiatives. Regarding our CapEx plans, we continue to progress with the investments outlined for financial year 27. CapEx incurred during the first half stood at INR 27 crore against our planned full year outlay of approximately INR 43 crore. Looking ahead, we expect operating profitability to improve progressively during the second half of FY 2027, supported by sustained demand, healthy volumes, and the benefits of our pricing and cost efficiency initiatives. We are actively working on increasing cost efficiency using automation and AI tools. We are aggressively evaluating various costs in the system, exploring greater automation of processes, and identifying interventions that can yield savings. We are confident that these actions will contribute visible and tangible benefits in the next couple of quarters and thereafter. While input cost movements remain an important factor, the cost actions and the likely benefits of operating leverage gives us confidence to maintain our full year EBITDA margin outlook. Overall, we remain focused on sustainable profitable growth and maintaining a healthy balance sheet. With this, I would request the moderator to open the lines for Q&A. Thank you. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use headsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Amit Srivastava with 361 Capital. Please go ahead. Yeah. Thank you for the opportunity. Sir, just wanted to understand first is, can you give us the breakup of this growth which has come in sanitaryware and faucetware? As you mentioned, it is more driven by the price, volume. If you can give the breakup, like last quarter you had given volume, price, and mix, how much it has contributed into this quarter? Yeah, thank you for the question. So, like we told, in terms of the growth part, as we are witnessing quarter-on-quarter, it is purely a volume-driven growth. Retail demand continued to recover, which was complemented by steady project performance. In terms of the breakup of the growth for the Q2, volume has contributed around 16.6%. Price revision actions, what we have taken, they are partially realized in the realization that contributed around 9.1%, and mix contributed around 1.7%. This was the overall company as a whole. I think you have asked for the breakup with respect to sanitaryware and faucetware. Again, in case of sanitaryware, the volume has contributed 14.3%, and the favorable price was 6.7%, and 2.7% was the mix impact, which has overall given the revenue growth of 23.7%. In case of faucetware, the breakup of 38% growth is largely driven by volume, that is 24%, favorable price impact, that is 10.3%, and the balance is the mix impact, which is 1.9%. Okay. Sir, just to understand this strong volume growth is coming. Are we gaining a market share because of we have some advantage on our cost side, or is it a brand distribution or new market which is giving us that edge? Or this price increase which we have taken, that pre-buying has also given a kind of push to our volume overall? What is really driving it? It is a ground-level demand or expansion, all this, if you can explain. Yeah. Essentially, the volume is being driven by increased demand from the market, because the pre-buying, like we have taken two price increases during the last two quarters, but that is something which is only impacting a particular period. Just immediately after the price increase, you find the volume going up substantially, but later on, it all normalizes. So, the sustained improvement in demand that we are able to see is not on account of just the pre-buying portion building up. It is the improved demand which is already there in the market. More importantly, it is the steps that the company has taken over the last couple of years when the demand was muted, where we have concentrated on both the external, the distribution channel, improving the market, understanding the consumer, understanding our distributors, and trying to improve the entire distribution, the product, the manufacturing efficiency, the outsourcing arrangements. They are all now coming up to kind of help us, because the external demand is there, but you will find that even meeting that demand becomes a challenge in the current situation wherein the more we are dependent, like 50% on outsourcing. As of now, you can say that because of the fact that we have taken those initiatives over the last couple of years, that is all adding up. Would you say that we have gained market share? I would definitely think that over the last three, four quarters, the way that our numbers have grown, market share would have gone up. But it is a little difficult to assess in our specific industry because you find that most of the players are unlisted, and it takes a little time for the numbers to come in. Even the ones which are listed have a large number of products. So, this particular space is because of the fact it is difficult to gauge as to what kind of numbers they are having. But we are confident that if we talk not talk about just the external competitors, at least we are very good, happy in terms of the kind of numbers that we have been able to achieve over the last, you can say, three, four quarters. Perfect. In terms of the project business, sir, you said that mix has increased to 43%, and which will move towards 40%. So, it can come in an immediate basis, like in a coming quarter, we can expect that, or is it a slightly medium term it will come towards that direction? Second is- It has already happened in this quarter. I will just answer your question about this, but it has already happened in this quarter. In this quarter, the project business was contributing 39% as opposed to 43% that we have done in the previous quarter. Previous quarter was kind of an aberration because of the input price increases which had happened and the kind of profitability concerns that it was raising. We had actively taken push deliveries of certain projects which were nearing completion. We had kind of preponed the deliveries at that point of time because the inputs were on a continuous rising basis. That was an aberration. We have already come back to that level of the 39% in the current quarter, and we should be at that level of 40 to 60 ratio that we have been traditionally, as of now, been maintaining over the last couple of years. We should be near that on a long-term basis. But that again depends on the fact that why this has happened, not only because projects was an aberration in the previous quarter, but retail has now started growing. Earlier, project share was growing because retail was not growing, projects was continuing to grow, so that is why share was becoming disproportionate. Now that retail has picked up and project is also continuing to do well, turnover is increasing, and the proportion of retail and project should remain in that ratio of 60/40 going forward. And there is still some order book of the old prices where we will be having a lower margin versus the retail segment, or is it now aligned to the new cost structure? That would still be there. Bulk of it has been materialized in the last couple of quarters. There would be some parts of it in still Q3, but going to the later part of Q3 and Q4, we could be all, we can say, more or less with new project orders, with new prices. Okay. Perfect. And sir, last question. In terms of the margin profile, if we look at in the last two quarters, your margin is slightly subdued than what we were guiding for the full year. Given the guidance, though marginally it has been lower and has revised downward, but still the second half is implied very strong margin of 14.5% kind of margin. Are we confident that this price increase, whatever we have taken, and the current cost structure, we are able to manage that for profitability? In respect of the margins, like we had ended Q1 with 10.13% in Q1. We had mentioned at that point of time that low margin was a kind of exceptional, and that had happened primarily because of a large number of one-time factors which had played during that point of time in that particular quarter. Going into Q2, you'll find that most of those factors have reversed, and we have started seeing an upswing in the margin. I'll just give you an idea about the various things which have played in Q2 and what we expect going forward in Q3 and Q4. Just to answer your question in respect of whether we are confident in respect of the total margins coming in the range of 13%-14% for this full year. We are pretty confident now that we should be able to surpass our 18%-20% top-line growth that we had projected earlier, and also the margin that we had indicated of 13%-14% that we should be able to achieve. Just to give you a sense of how the 12.2% has materialized in Q2, I start with, let's say, 10.13, which we had projected for, which had actually come in for Q1, and we had said that 4.5% was kind of a one-time effect. Those one-time effects have been reversed in the current quarter. So 10.13 plus that 4.5 kind of became 3.83% because that turnover also increased substantially as compared to Q1. In Q2, the turnover was higher. That 4.5 effectively translated into something like 3.8%. Ideally, 10.1 was the base of Q1, 3.8 was the reversal of the one-time effects which had happened at that point of time. So we should have ended up with something like 13.9% of our revenue, 10.1 plus 3.8%. At that time, we had taken an impact of, projected of 1.5% in case of price rise. Actually, the price rise impact on the company as a whole came out to be 2.5%. So 1% additional we have gained over there, so which takes it to something like 14.9%. Ideally, our margin should have been 14.9% because of this, as these adverse factors have taken effect in Q2 as opposed to Q1. Also, there was an operating leverage impact of 1.9%, like because of the fact that our turnover had increased, but the fixed costs are remaining constant. So this 1.9 favorable margin impact was there, operating leverage impact. Ideally, our margins in Q2 should have been 16.8%. There were a few negative factors that brought it down to 12.2%, so I will just enumerate these negative factors. The primary factor was the increase in brass prices. Brass prices, even over Q1, it went up by roughly 11% to 12%. It was, on an average, the consumption was at INR 589 in Q1. It came out to be, sorry, INR 837 in Q1. INR 589 was in the previous quarter, INR 837 in the previous Q1 FY 2027. It came out to be INR 932 in the current Q2 FY 2027. So there is a 12% increase, which led to an overall 2.1% EBITDA decline. Publicity expenses increased by 0.5%. Our sourcing of sanitaryware and tiles, the prices had gone up, gas prices had gone up in Morbi, so that resulted in 0.3% negative impact on an overall basis in the company. Also, discounts was a negative 1.7%. This was more in the project wherein you find that the old projects were still continuing in Q2. If your prices go up, but the selling price which you are effectively giving to the consumer remains the same, so the projects remain the same, so the discount typically looks higher. That is why the negative impact of discounts slightly has gone up in retail also, but which we have taken a lot of steps in the future, which will bring it down again. But that 1.7% impact was there on account of discount. All this added to something like 4.6% negative. I will just repeat them again, the negative factors. Brass, 2.1%, publicity, 0.5%, sanitaryware and tiles procurement, 0.3%, discount, 1.7%. So 4.6% negative in total, which took our margin from that 16.8% had this negative factor not occurred to 12.2%. Going forward, we are confident that in Q3, few of them should be reversing because most of the projects have now started, as I mentioned, the old projects are now being completed. Most of the deliveries which will be happening in Q3 and Q4 onwards, you will find that there will be for the new projects with the new pricing. So the discounts over there, the pricing effect would be coming into effect over there. So we expect that the negative discount factor of 1.7% to disappear and also improved pricing further to come into play. That should be impacting us to a large extent in the future. Lastly, we have also taken quite a few measures for controlling the retail discount also. The September price increase effect of faucets, we had to take into account in the current quarter of Q2. That will also be playing into Q3 and Q4. So going forward, we are pretty confident that the margin of 13%-14%, which we had projected for the whole year, should be very easily achievable. Okay. That's very helpful. Thank you, sir. Thank you very much from my side. Thank you. Thank you. A reminder to all the participants, please restrict yourself to two questions, and if you have more questions, please rejoin the queue for more questions. The next question comes on the line of Shriansh Jain with 3A Capital Services. Please go ahead. Hello, am I audible? Yeah, we can hear you. Thank you for the opportunity, sir. Just one question from my end. Has the current geopolitical scenario helped company like us in terms of shift from unorganized to organized market, especially in faucetware division where we have shown excellent growth? Geopolitical situation has done a kind of a double-edged kind of a situation. It has added problems as well as presented the opportunity also. Problems is that, if you look at the gas prices, they have been going up continually over the past, you can say, one year or so. This has been exacerbated by the geopolitical situation, wherein it has increased quite sharply over the last couple of quarters. The gas situation has become extremely precarious at the end of previous year, Q4, and the beginning of Q1 of the current year. Now, at least the prices are higher, but the availabilities are not an issue, but the increased prices are again putting a lot of pressure on the input side. The cost pressures have added. Coming on to the supply side, we have been able to maintain our sourcing arrangements, and we are confident that we do not anticipate any challenges in meeting our demand the way it will be there in the future. Morbi players on an overall basis have been slightly impacted, but typically, if you look at the Morbi profile for sanitaryware, you find that it is either they are OEM suppliers, so that has not been impacted too much because they have been able to pass on the input, increase in the input margins to the OEM players. Like we have, our procurement costs have gone up over the last, you can say, couple of quarters. Even in their own selling which they are doing in their own brand, because the entire market prices have gone up, they have been able to pass on the increased cost in the input side onto the consumers. There has been some benefit because the fact that the prices have gone up, the consumers tend to move more towards the branded players as opposed to unbranded ones. That has helped to a certain extent. But on a primary basis, if I say that is it only because of the fact that this pricing, the situation has evolved in Morbi and they are not able to supply to the fullest extent, maybe on their own to the outside consumer. That would be adding some part to the demand, but it is mostly, as I mentioned earlier also, it is what we have undertaken over the last couple of years for increasing our channel effectiveness and all the other improvements that we have done, which is now kind of yielding benefits and enabling us to take, help us to kind of gain market share in a situation where overall economic conditions are a little tough. Great to hear that, sir. Thank you so much and wish you all the best. Thank you. Thank you. Next question comes on the line of Bhupesh Kavdia with ICICI Direct. Please go ahead. Hello. Thank you for this opportunity. I wanted to ask- Mr. Kavdia, sorry for interrupting. We cannot hear you. Can you speak a little louder? Am I audible now? Yes, please go ahead. I wanted to ask, as you have mentioned the revenue mix in your presentation, which comprises of 43% from premium, 37% from mid, and the rest from entry. What includes, which brands are included in premium and the rest of the segments? The divisions which have been done over here is not on a brand-wise basis. Most because if you talk about, let's say, Senator or any of the CERA Luxe, which are the different brands that we have, or Polipluz, we find that as of now, they constitute a very small portion of the overall revenues. Like for Senator, we are talking about, let's say, it should be ending the year with something like INR 50 crore, INR 60 crore, INR 70 crore of number. The total, if you see the premium and the mid and the entry levels that we are talking about, it is mostly about the CERA brand, where we have offerings across the ranges. Whenever we are talking about the mix over there, obviously the premium brands would be coming in the premium, but it is mostly comprising of the CERA brand, the premium items, the mid items, and the entry-level items. Okay, thank you. Can you share the contribution from CERA brand amount? It is primarily like the CERA brand is the one which is kind of contributing the, you can say, 98%-99% of the entire amount, because as I mentioned earlier, we are expecting, let's say, total of INR 2,450 kind of a number for the whole year. Let's say, Senator and Polipluz taken together would be accounting for something like, you can say, INR 70 crore for both of them taken together. So it's a very small proportion which is coming in from these two brands. Others, the bulk of it is coming from CERA. Thank you. Also, are there any new CapEx plans, and what is the update on sanitaryware CapEx expansion plan? Regarding the CapEx plan, in case of faucetware, like we told, this was not a bigger CapEx, but the brownfield what we have conducted two years back. The capacity was increased from 3 lakh pieces to 4 lakh pieces. Now, since the infra was already built and we are seeing a good demand which is coming in both sanitary and faucet, so by making some adjustments in terms of the additional equipments to be procured, effective from September, we have increased the capacity from 4 lakh pieces to 5 lakh pieces per month in case of faucetware. We will review the faucetware demand in the fourth quarter. If there is a possibility that the demand gets more than this, then we have the space and availability within our current manufacturing facility to raise it further from five to around 6 or 7 lakh in a phased manner. Coming to the part of sanitaryware, as we have seen a couple of quarters back, the capacity utilizations were lower. The idea was to get the current plant fully operated. Right now, in Q2, the capacity utilization has come to around 82%. We are reviewing this sanitaryware-related demand, which is on month-on-month and on quarterly basis, it is showing an upward trend, largely supported by volume uplift. We will review the situation by end of this year in terms of taking the further decision with respect to the greenfield project, for which the land has already been procured. By end of Q4, we will be in better position to take a decision for the construction of the greenfield project. Thank you. Mr. Kavdia, please rejoin the queue for more questions. A reminder to all the participants, please restrict yourself to two questions and rejoin the queue for more questions. Next question comes from the line of Sagnik Sarkar with SKP Securities. Please go ahead. Yeah, thanks for the opportunity. I had a question on the in-house manufacturing percentage for both sanitaryware and faucetware. I think FY 2026, you did around 41% and 53% in-house manufacturing. Just wanted to know what the number is currently. Are you looking to scale up the in-house manufacturing going ahead? Will this drive margins higher if we increase the in-house manufacturing? Thank you. Thank you, Sagnik. I'll just give you the figures for the current quarter. In the current quarter, the sanitaryware manufacturing was 41%, outsourcing was 59%. For faucetware, the numbers stood at 35% for manufacturing in-house, and outsourcing was at 45%. Regarding your question in respect of whether there's a shift in the future, like in faucetware, we have been shifting substantial quantities from outsourcing to manufacturing. In sanitaryware also, the idea would be that we'll be trying to shift it in the in-house kind of a situation going forward. In respect of margins, there would be no impact on the margins per se from shift from outsourcing to in-house, because the split of the SKUs that we take from outsource and from in-house are very different. Typically, the outsourcing SKUs are those which are simple to manufacture and which we don't want to manufacture in-house, because we can get it at a very good cost from our outsourcing partners. Typically, manufacturing is reserved for the more higher value-added and more, you can say, expensive and value-added feature-loaded kind of a SKU, which are more difficult for the outsiders to manufacture. So, the margin profiles are very different, and as we continue to grow, that split would remain as it is. Like, we are growing in the premium segment, the more bulkier pieces are kind of now becoming larger in volume. So, as we grow, we'll find that the margin profile as such would not change. It will remain the way it is right now. Okay, thank you. Thank you. Thank you. Next question comes from the line of Reshma Mehta with GreenEdge Wealth. Please go ahead. Yeah, thank you. Most of my questions have been answered. Just one question that, considering the demand momentum that we are seeing, would you like to spell out some kind of revenue growth guidance for FY 2028, or would you say that that is too early for now? We will continue to say that it is too early right now, because we want to wait for 2027 to close and then see how the entire year went in respect of the demand, as well as how we are able to scale up our manufacturing and how our outsourcing also holds up with the current kind of situation. Then we want to give a kind of guidance for 2028. The reason I was asking this was because we will be on a pretty high base, right, at 20% plus kind of a revenue growth for the current year. Hence, in FY 2028, on that base, at this stage, would we be confident of achieving at least a double-digit kind of a revenue growth, or even that is too hard to comment at this stage? That is what we are trying to say, that as of now, it will be kind of difficult to comment on 2028, because first we need to end 2027 and see where we are landing, and then what the situation is at the end of March, because a lot of things depend upon, a lot of uncertainties are prevailing in the external market also right now. You have the world situation, which is a little precarious right now. The India situation is also kind of dependent on that. So, how we end March, and then we will be able to project what we can see for 2028. Right. The second question is, let us say hypothetically, the war comes to an end, and the commodity inflation that we have seen, that tapers down. So, what happens to price hikes then? If you could cite an example, let us say from the past, wherein during such, let us say, post-COVID hyperinflationary times, we would have taken price hikes. Then do we reverse these price hikes? What happened in the industry? What did we do in the past, and what do you think will happen in case the commodity inflation subsides? Traditionally, what has happened, and even in the current situation, I do not anticipate that if the raw material prices do taper down, because let us talk about these different divisions separately. If you talk about sanitaryware, even though the external market has been impacted by a bit, due to the increase in the gas prices, because of our own arrangements, we have had minimal impact. There has been impact on us also, but not to the extent that the players who do not have access to subsidized gas, they have been impacted. So, even if the kind of gas prices stabilizes, that will definitely impact our outsourcing kind of cost, because that would come down. But typically, we do not anticipate that the prices would be impacted, because in the past also, in case of sanitaryware, as well as in the case of faucetware. In case of faucetware, there has never been this kind of a jump, at least what I can remember. But even in the current situation, even if the brass prices come down from the current level of 950 to 1,000, what it is prevailing right now, to let us say, something like 600, 700, which was there, let us say, a year back. So, even then, we do not anticipate a kind of a rollback in prices, because even now, you find there is a lot of impact in the profitability. The manufacturers have been kind of absorbing the increase to the extent that has happened right now. So, once it starts, even if it tapers down, we still need to recover the past losses. Maybe project pricing would be impacted slightly. Discounts may go up slightly higher, because that you can kind of reverse. But typically, there has never been a reduction in prices in the case of sanitaryware or in the case of faucets. Right. So, maybe if the demand is lower at that point of time, even in the retail channel, we may pass it on in terms of higher discounts to the channel, right? That understanding would be correct? Correct. If the demand pattern does not hold up and the prices of the inputs come down, then maybe higher discounts would be the way of passing it out. Like, that was the situation which was prevailing in the last couple of years, when the demand was not there, and we finally found that the higher discounts were kind of trying to give an impetus to the demand, like try to meet the lower demand. So, that we can expect in the future also. Like if demand kind of tapers and there is a reduction in the kind of discounts, sorry, in the kind of prices which are there for the inputs, then maybe the discounts would be going up. And lastly, any more price hikes yet to be passed on? Have we taken any- As of now, we are not looking at any price increases further. We had taken one for faucetware in the month of September. In sanitaryware, as of now, we are comfortable. It is an evolving situation. It is very difficult to say offhand what could be happening. But as of now, it seems that for the current quarter, Q3, there should not be any price increases. Sure. Thank you, and Diwali wishes to the team. Thank you. Same to you. Thank you. Next question comes from the line of Utkarsh Nopany with Anand Rathi. Please go ahead. Yeah. Hi. Good morning, sir. My first question is regarding your gross margin. In your initial comment, you mentioned that gross margin in our sanitaryware portfolio came under pressure on a YoY basis in September quarter. However, we were of the view that we should have seen margin expansion in our sanitaryware portfolio, as the spike in gas cost for us is quite lower compared to our peers, because we have the benefit of sourcing of low-cost APM-linked gas. We should have also seen some benefit of liquidation of low-cost inventory, because we have taken a good amount of price hike in our sanitaryware portfolio. Can you please help us understand what we are actually missing out? Why the gross margin in our sanitaryware portfolio has come under pressure? See, gas is only one part of the total cost which is such that is being faced by the company. You will find that obviously the impact to Cera is lower than what is there for the entire market. But still, you will find that the impact for gas, apart from that, you will find that other factors have also gone up progressively. If you look at the transportation cost, you will find that the cost of fuel and hence the, even otherwise, the transportation cost has gone up substantially. We are saved by the fact that we don't have too high of imports, because over the years, the cost of containers has kind of increased exponentially. But because we have only limited exports, it didn't impact us too much. But there have been inflationary factors which are playing across the various cost parameters, which have kind of led to the margin decline. But with the kind of price increases that we have taken, as we mentioned, that it takes some time back for the impact to come in, we will find that in the case of Q3 and Q4 going forward, the gross margin for both sanitaryware as well as for faucets should see improvement. No, sir. Your point is very taken. Just wanted to understand what will be the share of the gas cost as a proportion of our production cost for sanitaryware, and what would be the freight cost as a proportion of our revenue? The freight cost will be in the region of, you can say, 11%-12% for sanitaryware. For the company as a whole, it comes in the region of 8%-9%. But for sanitaryware, because of the fact that the items are bulkier, most of the freight cost is kind of there for the sanitaryware division. So it will be in the range of, you can say, 11%-12%. The gas cost, if you talk about outsourcing, because the price, if you use that, coming from two ways. One is from our own manufacturing, second is from the outsourcing partners. In case of outsourcing partners, we find that for them, it's a substantial part of their total input cost. They are not getting a kind of subsidized gas from GAIL. That is why you find that whenever the gas prices increase, the outsourcing cost increases in a proportionate manner, not in the same sense, because let's say that, I think the input cost for gas for outsourcing partners will be in the range of 30%-35%. So if the cost is doubling, you find that the impact that will be coming would be substantially for the outsourcing partners. And also because of the fact that they do things at a very small margin, because for us, they are supplying as OEM suppliers, and for them, the margins are extremely thin. So whenever there's an input cost increase, they have no choice but to pass it on to the OEM players. They don't have any scope for absorbing the increase in the input cost. So that 55% of that business which we have taken from the outsourcing partners has totally impacted by the increase in the gas prices. I think we have taken two kind of increases in the outsourcing partners. One was 9% in the month of March, sorry, April or May, and then again there was a 3% increase, I think, in the month of September. So a total of nine plus three, you can say 12, 13% has gone up as a procurement cost from our outsourcing partners. So, it's a mix of various factors which is now we are seeing reflected on the gross margin. It's not a single factor which kind of plays into it. For our own manufacturing, you find that gas cost, as you mentioned, would be substantially lower. It should be only if you talk about sanitaryware manufacturing, it should be in the range of, you can say, 11%-12%. Thank you. Mr. Nopany, please rejoin the queue for more questions. Next question comes on the line of Rupesh Kavdia with ICICI Direct. Please go ahead. Thank you. The company has now achieved a cash balance of around INR 900 crore. Given the pressures from input cost increase- Mr. Kavdia, sorry for interrupting. We cannot hear you. Can you speak a little louder? The company has amassed around INR 900 crore of cash balances, and given the inflationary pressures and freight costs and different factors, there must be some smaller and unorganized players in the sanitaryware, faucetware, and tiles segments may be struggling. Does the management consider any acquisitions of such companies? See, these, they are two separate things. The input cost rise is something which is impacting all players. That cash pool that we have has no impact on the kind of input cost increases that are happening. Your main contention is whether we can use this situation as an opportunity for buying out players who are there in these other sectors, like from our outsourcing vendors who are there or vendors who are there in the faucetware, tiles, or the sanitaryware space. That is a continuous outlook that we keep on doing even otherwise. Like when we were taking that land also, we evaluated a lot whether in respect of we should be acquiring some outsourcing partners or whether we should be acquiring somebody from the industry as such. That is always an ongoing kind of a thing that we keep on studying. If something comes up and it looks kind of beneficial, that opportunity is there, that option will always be exercised. Okay, thank you. Thank you. Next question comes from the line of Karan Bhatelia with Asian Markets Securities, AMSEC. Please go ahead. Hi, sir. Good morning. Am I audible? Yeah, we can hear you. Yeah. Sir, just wanted some clarity on the price hikes. On the last few calls you've mentioned of a few price hikes in fourth quarter, a few prices in first quarter. So I think the effective price hike is what, 12% for sanitaryware and 16% for faucets. So anything incremental that we've taken lately? Sorry, you mentioned the earlier prices, price increases that we have taken, but what was your question? Yeah, 12%, 13% for sanitaryware and 16% for faucets. Anything after this we have taken? That was in the month of May. Then we have taken another price hike in the month of September, in the case of faucetware. That was to the extent of 8%. The total increase in faucetware has become 16% plus 8%, 24%. 16% in the month of May, 8% in the month of September, taking it to a total of 24%. In the case of sanitaryware, it is 12%, which we have taken in the month of May. Right. There was no price hike in sanitaryware after that? No, in September there was no price hike in sanitaryware. It was only in the case of faucets. Faucets is more impacted by increase in the input cost, brass, because that constitutes a significant portion of the total COGS. We find that brass will be constituting roughly 60%, 65%, because even something which is not directly brass, even the bottom parts which go along with your faucets, is constituting bulk. On a bulk basis, it is mostly brass only. That is why 60%, 65% of the cost is impacted by brass, and any significant movement in brass needs to be translated directly into the cost, which necessitates a price increase in the case of faucetware it is more required as against your sanitaryware. Right. One clarity, right? You have given reasons why margins were short in Q2, quarter-on-quarter. You mentioned of higher discounting to the range of 1.7%, but given the fact that retail demand is strong, project is ongoing. Why this high discount of 1.7% which impacted the Q2 margin sequentially, from my end? Yeah. What happens is, in the case of projects, if you talk about, you have a fixed price. Let us say the MRP is 100 and you have a fixed price of, let us say, 60. Now when your price increases, you find that the price will go up from 100 to 110, but your price would remain at 60 only, the price at which you are supplying to the projects. That additional amount reflects as an additional discount. Also in the case of retail, certain schemes which have been created, let us say, at the beginning of the year, that cannot be reversed immediately because you have a quarterly scheme, you have a kind of half-yearly scheme, and you have certain annual schemes also. So, it takes some time for the discounts to be rolled back. We cannot do it immediately because schemes which have already been launched, they cannot be withdrawn immediately. So even in the case of discounts, there would be a time lag in reversing them. Whenever you give additional schemes, it takes some time for that to come into effect. The same thing is once you withdraw also, because schemes have already been launched, it takes some time for them to come into effect. Going forward in Q3 and Q4, as I mentioned, you will find that a lot of those reversals have already been initiated, and that impact would start becoming visible. Also in the case of projects, most of the earlier projects are now closed. Going forward, you find that most of the newer priced projects would be coming in. Both the pricing impact and reduction in discount in retail will lead to improvement in margins in the future. Right. Got it. Last question from my end. We have taken a 12%, 13% increase in sanitaryware prices. We had some benefit of gas sourcing vis-à-vis Morbi. What is their cost increase vis-à-vis us? Yeah, as I mentioned in the when the previous question was being asked, like typically for the Morbi player, the gas cost has kind of doubled. Right. What is their price hike already taken in the market vis-à-vis 12%, 13% for CERA? I cannot tell you what they have taken for their own products, but for the price increases that we have offered, because see, what happens is it totally depends on the kind of relationship that you have with them and the kind of business which you are doing with them. Because most of our suppliers are, we can say, giving us a substantial volume of their total production, they are not able to pass on the cost increases to the fullest extent. Even they kind of take a hit. We have kind of taken increase of 9% in the month of April, May, when the prices had gone up substantially, and another 3% in the month of September. So total 12% increase in the prices for our outsourcing vendors, what we procure from our outsourcing vendors. Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of question and answer session. I now hand the conference over to the management for closing comments. Thank you, everyone, for attending this call and for showing interest in Cera Sanitaryware Limited. Should you need any further clarification or would like to know more about the company, please feel free to reach out to me or to CDR India. Thank you once again for taking the time to join the call. Bye. Thank you. Thank you. On behalf of Cera Sanitaryware Limited, that concludes this conference. Thank you for joining us. You may now disconnect your line.