Ladies and gentlemen, good day and welcome to Astral Limited 3Q FY23 results conference call hosted by Equirus Securities. 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 0 on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Pranav Mehta from Equirus Securities. Thank you. Over to you, sir. Yeah. Thanks, Aman. Good morning, everyone. On behalf of Equirus Securities, I welcome you to the call for 3Q 2023 result discussion with the management of Astral Limited. Management is being represented by Mr. Kairav Engineer, VP Business Development, and Mr. Hiranand Savlani, the CFO. I would straightaway like to hand over the call to Mr. Kairav for his opening remarks. Over to you, sir. Good morning, everyone, and thank you, Pranav, for hosting this call. Thanks to everyone for joining so early in the morning. Welcome to the Astral Q3 con call. We know that we have called you a little early in the morning because as per the company policy, we only do our con call or publish any data during non-market hours. Since Mr. Sandeep Engineer is in U.S., he's doing a course at Harvard, we were able to complete our board meeting a little late yesterday. Because of that, it was not possible for us to have a con call yesterday evening. Today evening, we have some planned guests from overseas, so it was only possible to do this call in such hours. To strengthen our board with professional people, the board of directors have appointed two new members, Mr. Chetas Desai, a chartered accountant having very rich experience of 30 years working with reputed organizations like PwC and in investment banking business with Ambit as a CEO. Mr. Dhinal Shah, again, a chartered accountant having 30 years of experience in advising clients on taxation, exchange control, insolvency, and corporate laws. He was Central Council member at Institute of Chartered Accountants of India and Chairman of Direct Tax Committee of GCCI and a visiting faculty in IIM on various professional topics. We welcome both to our board, and I'm sure that we will learn from their rich experience, and they will really be an asset and a good addition to our board and our company. I am very delighted to inform you that current year, that is 2023, Astral is celebrating its 25th anniversary. As a part of the celebration, the board of directors have decided to reward its shareholders by issuing a bonus share in the ratio of one share for every three shares held with the investors. Very happy to share that our organization got renewed as a Great Place To Work in 2023. We held that certification in 2022. We were recertified this year as well. Our consolidated Q3 ended with a good note on all fronts, volume, value, and margins as compared to the second quarter. Let's start with one of the verticals of our business, our key vertical, that is pipes. We all know that the industry was passing through a tough time of PVC volatility. Now that the trend is reversed, it has reflected in good volumes in the pipe segment. The pipe segment overall, the demand situation was very good in Q3, and we are confident of a good growth in Q4 as well. Historically, Q4 has been the best quarter for the company and for the industry, and we hope that the same demand will continue and this growth will continue in Q4 as well. Further, PVC prices are stable since January, and that will give more confidence to the dealers to keep adequate inventory in the peak season. The losses that we were incurring due to high cost inventory of PVC has gone away from the system, and we may see some gains in inventory in Q4. Our Bhubaneswar facility is gearing up, and we have rolled out PVC products and water tanks from the Bhubaneswar facility. The CPVC products are under BIS certification, and shortly, we will start CPVC products from that facility as well. From Q1 FY 2023/2024, we will have all the products being rolled out from the Bhubaneswar plant. The water tank business is going as per plan, and we will be closing the year with INR 100 crore revenue guidance as communicated to our shareholders. Our new project of valves has started giving revenue with a few SKUs being rolled out, and we will be able to launch 120 SKUs by March 2023 and are expecting good revenue in the same segment in the next year. Our infra division is going at a good pace and with a lot of infrastructure projects from the government and a lot of infrastructure spend as guided in the recent budget. We are expecting a good growth in the coming quarters from this division as well. The adhesives division, similar to PVC, the prices of chemicals were falling, and we were having high cost inventory with us. Due to that, we were facing some pressure on margins, but now the pressure has started coming down as improvement in margins started from Q3, and we are expecting improvement in the margins from Q4 onwards as the prices of the chemicals have leveled. Our paint business is on a normal growth trajectory. On a nine-month basis, it has grown by 15%. As communicated earlier, we are waiting for NCLT approval for demerger, and once that will happen, we will start working on it, in full swing with the support of Astral brand, and we will be doing some rebranding and re designing of the product line as well. You will see improvement in the numbers from next year onwards. Our SAP implementation work in the paints company is on, and we are targeting to close that by Q1 FY 2023/2024. Bathware, which is a new category for us, we are working very hard, and we are seeing very encouraging results to start with. Our focus right now is on creation of network. We are happy to share that we have completed 231 display centers across various states of the country, and more than 80 display centers are under construction. We are aiming to complete 500 such showrooms and display centers in the next 3 months. I'm very happy to share that we are able to supply to more than 3,800+ bathrooms in projects, and more than 25,000 bathroom bidding is on, and we are confident that we will get the same. The project pipeline has started building for the bathware category, and the project pipeline looks quite healthy in the coming year, and we are very confident of our sales team and our product. We are expecting good sales number from FY 2024 onwards, and once our display centers are up and running, it will give a big boost to the overall numbers in the division. Last but not the least, as indicated in our press release, our company is doing good CSR activity and is doing a great job in uplifting parts of our society. I am really happy to share that our team has done an excellent job, and we were awarded 2 gold awards for our Ranthambore project and our Ice Stupa project in Ladakh, and a bronze award for our Hiwali pipeline project in Maharashtra by AFX Digis 2023. The entire awards were swept by Astral with the judges eliminating the silver category and awarding 2 golds and a bronze to us, and we beat out some of the bigger foundations and some of the bigger companies in India by taking all the 3 awards in this category. I hand over this call to Mr. Hiranand Savlani, our CFO, for his financial updates for the quarter and the way forward. Good morning, everyone. Thanks, Pranav from Equirus, for hosting this con call in our early hours. This is the first call in which Sandeep bhai is not attending because he's traveling overseas, as said Kairav, and I'm happy to inform you that he has gone for Harvard University for his OPM course. He will be there for three weeks for this course. Last time, he attended three-week course in the month of May. I am sure we at Astral will learn something new once he will come back post this study. It is a matter of proud for all at Astral that now new generation is also taking charge of the business, and today Kairav is leading this call in absence of Sandeep bhai. On a personal note, I want to thanks all my investors and all my well-wisher because of their confidence and trust in our company and me personally. I have been awarded by the Institute of Chartered Accountants of India, ICAI CFO Award, which is the most reputed award in the country. The award jury was chaired by prominent industry personality like Sri Dilipbhai Sanghavi, sir, managing director of Sun Pharmaceutical Limited, along with other prominent personalities of the industry. As a chartered accountant, it is always a dream to get this award from our own institute. I'm lucky that I got this award and dream comes true for me, which was not possible without the support of all of you and blessing from my elders and the family member. This will increase my responsibility more. Now back to the business. As Kairav indicated, the Q3 was excellent. As we always communicated, Astral is believing in consistency of growth, and this quarter is in continuation of that consistency. That is why I have specifically given the few graphs in our press release, which can clearly indicate the five-year CAGR growth on a nine-month basis so that everyone can understand that how consistent Astral is there in terms of top line, in terms of bottom line or in terms of volumes, in all respect. The numbers are in front of you. I will not take much time, but will prefer to give more time on Q&A. Just key number, which I think I should highlight which I'm indicating here. The consolidated top-line growth in Q3 was 15% on YOY basis and 21.6% on a nine-month basis. EBITDA has grown up by 9.5% in Q3, sorry, de-grown by 9.5% in Q3 on a YOY basis and -6.4% on a 9-month basis. Mainly because of high-cost PVC and the chemical, we incur inventory losses. Now we are done away with these losses and high-cost inventory, and we are quite confident that Q4 will not be having that effect. On the contrary, as indicated, Kairav, that we may be having some inventory gain also in Q4. Adhesive and paint segment has delivered a top-line growth of 28.6% on a consolidated basis in Q3, and on a YOY basis, 39.70%. These numbers are not clearly comparable because last year we were missing the Paint business in number. An EBITDA growth of 11.4% in Q3 YOY basis and 18.2% on nine-month basis. EBITDA margin of Pipe division was 13.5% in Q2, has increased to 15.4% in Q3, which indicate 190 BPS higher compared to previous quarter. EBITDA in Adhesive and Paint was 12.2% compared to 12.6% in Q2, mainly because of high cost inventory, chemical and one of the loss in our U.K. business due to currency, which was to the tune of INR 5.5 crore. If we adjust this INR 5.5 crore inventory loss, our adjusted EBITDA for the quarter for Adhesive and Paint business is 13.8%. It is reported numbers are lower mainly because of this one-off item of forex currency loan. Bathware division has registered a sale of INR 9.68 crore in gross in Q3 and EBITDA loss of INR 13.8 crore. From this quarter onward, we are expecting that we will start generating a gross margin, so this loss number will start reducing on quarter-on-quarter basis, and we may come up in a good number, positive number from the next year onward. There was a loss of, I already discussed there was a loss of INR 5.5 crore in the forex in UK. If you see, we have published INR 41 crore of EBITDA. This if I add INR 5.5 crore, it work out to be INR 46.5 crore EBITDA, which is precisely 13.85% EBITDA of that respective division. If I adjust sanitary ware losses of INR 4 crore in this quarter and adjust the EBITDA of Pipe, then Pipe EBITDA will also increase to 15.83%. In both the segment, because of one-off item, EBITDA adjustment will be there. As far as the working capital is concerned, I think that is very well under control. Our receivable days are 23 days, inventory is 66 days. Net working capital days are 34. Today, we are sitting with a cash of INR 476 crore. With this quarter, all inventory losses related to PVC and chemical get over, and we are seeing a very healthy EBITDA in Q4. You are aware that Q4 is always a peak quarter for our industry, which always support us in economy of scale, which will further support to our margin in Q4. To summarize all what Caro said and I communicated in my initial remarks, we at Astral will be ready with all new set of plant and products by March 2023. East plant is ready with all products. PVC is already rolled out, and CPVC will be ready by March. Jamnagar faucet plant is up and running, and we may, looking to the initial response of the market, if we may require to increase the capacity next year in Jamnagar plant also. Wal plant, all products will be rolled out by March. We already roll out few and revenue has started. All 120 will be rolled out. Adhesive plant at Dahej will be ready by March, that will also start generating revenue from next year onward. Aurangabad plant, originally which we acquired for a water tank business. Looking to the demand scenario on the ground, we are seeing that we may be requiring some support of that plant, we have already started PVC pipe manufacturing over there. I'm very happy to inform you that last month alone we have done a reasonably good sale from Aurangabad plant also. Similar thing, Sangli plant we acquired for DWC pipe. Looking to the demand of PVC products in that region also, we have started manufacturing PVC pipe in Sangli plant also. Now we are adding our spare capacity of these locations into the pipe manufacturing also. Hence, we are expecting that FY 2024 should be an excellent year for growth for us and capacity utilization will improve substantially. At present, we are just 57% utilization. Whatever investment we have put for CapEx in last 3 year will start generating cash flow for us, which will improve our all financial ratios in a positive direction in the coming time. With this, I want to open the floor for Q&A session. Thank you very much. Over to moderator. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Rahul Agarwal from InCred Capital. Please go ahead. Hi, good morning, sir, and thank you for the opportunity. Congratulations, for a recovery in third quarter. Sir, two questions and then a bookkeeping question. Firstly, on Pipes, obviously the recovery is much better than Adhesives. Adhesives, my sense is, you know, like to like, removing Paints last three quarters, the revenue has largely been the same. Some bit of color, if you can provide on the demand, margins, you've already said that they'll start improving fourth quarter. Just on the demand and volume growth, if you would comment, sir, please. Thank you. I think Adhesive margin has already started improving. As I said you that if I adjust this forex effect, my consolidated margin is 13.9% precisely. Margin improvement has already started because the pressure on the chemicals are coming down. As far as demand is concerned, you are right, some pressure is there on the demand because the rural demand was low in the previous quarter. Now we are seeing some improvement into that. Secondly, you know, the U.K. economy is also under pressure. Our overseas business is also not able to give us the required run rate of growth. Because of that also some pressure has come. Now I think inflation has started coming down there also, and here also we are seeing, of course, this rabi crop and all, the demand in the rural side also will start picking up, and we'll be coming back to the top-line growth also. Now because of the price pressure will come in, the product will also become more affordable. That is going to support us in the coming time. Got it, sir. Second question was on Dahej. How much capacity does, you know, you add from, you know, 1Q? What is the asset turn there and the time to reach 100% utilization? I think it's too early to say when we will be able to utilize 100%. Let first we complete the plant and then we will one by one we will roll out the things. We are of the view that Dahej is a very substantial plant, so it will take some time. We are working on a few products, and there we are seeing a reasonably very high growth in the coming time because our team has started the groundwork on that, and we already appointed a senior people into that division. I will not disclose individual category or all these things because of competitive scenario. We are of the view that with that, we will be able to ramp up our growth in the coming time, and we will be utilizing the capacity as early as possible. We can say that with this Dahej plant, the adhesive as a whole, company as a whole, I think we can generate a revenue of close to about INR 1,800 crore, which is last year was INR 1,000 crore. I think substantial capacity addition is taking place, and we are confident that with this addition of capacity and with this introduction of new products in a aggressive way in the market, we will be delivering good number in the coming time. Got it, sir. Lastly, just bookkeeping. If you could just give me Gem revenue and EBITDA for the quarter and bathware revenue, please. Thank you so much. All the best. For January? No, for the paint business, if you could give me the revenue and EBITDA number, and for the bathware, the revenue number. I think bathware I already said INR 9.68 crore. Paint was roughly about INR 52 crore last quarter. EBITDA was 12.6% in paint. If I adjust this one-off effect of UK, then adhesive EBITDA was close to about 14.5% or something. Now I think we are back to 14%-15% EBITDA into the adhesive business. Got it, sir. Sir, bathware 9.68 is for 9 months or 3Q? No, it's three months because we started from last quarter. Okay. Okay. Got it, sir. Thank you so much. All the best. Prior to that sale. Prior to that, there was no sale. Initially, one or two quarter, one-off expenditure will be there because we are recruiting a lot of manpower also into that division. Initially, cost will be high, but once the run rate will start picking up from the next year onward, I think this all losses will go away. Absolutely, sir. Thank you so much. All the best. I'll come back in the queue. Thank you. The next question is on the line of Sumit Jain from ASK. Please go ahead. Yeah. Our compliments for a good set of numbers and welcome, Kairav. sir, if you can just quickly spell out the capacities that will be there now in pipes division and as well as in adhesives. I think pipes we are on a nine-month basis, we are utilizing 57% capacity. We are still low. That is what I said in my initial remark also that last three year, whatever CapEx we have done, I think they will start generating revenue from now. That's why I said that all financial number and ratios will improve. That commentary I am continuously repeating every time that Astral is spending too much of money into the CapEx side because we were decentralizing our company from one, two location to a country level, multiple location. Now we are adding pipe, as I indicated, Sangli, Aurangabad, now east plant. All this start contributing to us in the coming quarter. We are quite confident looking to the current scenario of the demand, we are quite confident that the numbers will be really good number in FY 2024. This is not I am telling you now. Even last year also, I communicated that FY 2024 will be the really good year for Astral because we are completing all our projects in FY 2024. Adhesive, I think adhesive capacity utilization is around 55%-60%, but we have to give one old plant of this Unnao of Kanpur to the previous promoter as per our original understanding in 2014. Our understanding was that till 2020 he has to give us the plant to use free. Because of this COVID, he was so generous that he supported us for extended two year. From April onward, we will be shifting all this facility, whatever the vessels are there, we will be shifting to Dahej and we'll start manufacturing. Capacity addition will be substantial, but at the same time, some capacity cut will be there because of shutting down this Unnao plant also. Exact number of how much we are reducing from Kanpur and how much we are adding from the this Dahej, I think we will be able to give you in the next presentation of our full year number. Safe to say that pipes capacity is now 310,000? I think we have already put it in the our number also. Sure. If you look at your. Pipe is 286, not 3. 286. Okay. INR 286,000 precisely 85, 95, sorry. 286,095. Sure. Inventory days have gone up. Working capital has also gone up. If I look at QoQ, it has gone up from about 20 days to 55 days. From March also it has gone up. What would be our cash flow from operations for 9 months? I think inventory, we are going into the peak season. If you see Q2 number, I don't think it has gone up substantially. It is like that only. 1 or 2 day here and there will be there on Q2 wages. Cash flow from operations for 9 months? 9 months, I don't have a handy number. Please call me post con call, I will give it to you. One last question on Seal It. While you have, you know, mentioned the currency loss, even if I add that back, the margins still have not stabilized to what they were before. This is for at least last two, three quarters, at least Q2 and Q3. When do you see situation there improving? I think last con call also we communicated that the Sealit is big player as far as the silicone business is concerned in the U.K. Silicone prices went up from $2.5 to as high as $8. Okay. From there it has started coming down, and again it has come back to almost $2.2-$2.3. Okay. Because of that, consistently there the inventory losses were there. Now I think they are coming out from that. Maybe by Q4 they will be done away with all this old inventory. From Q1 onward you will see there will be improvement into the number. This quarter I think they deliver 8.6% EBITDA, and we are of the view that Q1 onward, I think they will be coming back to the normal EBITDA. Even their sales have come off to from about INR 90 crore-INR 95 crore to INR 75 crore odd. That is my calculation per quarter. Naturally when their key product which has come down from the such a peak level of $8 to $2.3-$2.4, they have to pass on that price drop also to the market. Top line will be eroded. Just like PVC in India, every PVC manufacturer has started eroding the top line. Everyone has moved to the volume. Similarly, there also the similar situation is there Have the volumes gone up there? Yeah? Have the volumes gone up there 9 month basis? Yeah, yeah. Volumes are picking up. Volumes are picking up. On the contrary we are doing expansion over there. Sure. Sure. Thank you. Thank you. The next question is on the line of Nitin Jain from Fairview Investments. Please go ahead. Yeah, thank you for the opportunity. My question was related to the piping business. With the price appreciation that we're seeing in the PVC, given that you have mentioned, you know, Q4 is our peak season, what kind of volume growth can we pencil in for, say, Q4 and Q1? My next question is, any update on the income tax matter that had occurred last year? Thank you. I, as far as the PVC prices go, they did increase by INR 13 in the end of last quarter. Now, you know, PVC is no longer going up. PVC has been stable since January. We expect this to be stable for the coming few months. It's again too soon to say because we don't know about the global situation and there can be anything happening. Too early to comment on where the PVC will go. As far as volumes go, I think we are comfortable in sticking to our guidance of 12%-15% volume growth. We don't want to, you know, give a very high guidance and then, you know, just not achieve it or... You know, we stick to a very conservative guidance. Looking at the overall scenario and looking at how January has gone and how the first week of February has gone, I'm very confident that Q3, Q4 we will give a decent volume number. I can add what Kairav said that 12%-15% is our long-term guidance. If you consider this year, I think this year will be much higher than. You can see the nine-month number also. Nine-month wages we are already up by almost 20%. This year we'll be ending with a very high double-digit number, I can say. Next year onward, Kairav has said long-term 12%-15% will be the minimum guidance. Looking to the current situation of the market, we may exceed that number also. Keep finger crossed because we should not jump in on a 1 quarter higher number wages. We have to see how the consistency is maintained into the PVC prices and how the market is going to response. Overall, the demand in the plumbing side is very, very robust, so it looks like that numbers will be very, very encouraging. I think as Kairav rightly said, that it's too early to say on the PVC price and all this front. Because of that, we will not be able to tell you on quarterly what will be the run rate. Yes, as of today when we are talking, 8th of February, this quarter is going excellent, I can say like that. Great. My second question on the income tax thing that happened last year. Any update on that? I don't think. We have not received any notice or any demand as far as income tax department is concerned. If anything will be there, we will definitely update. Being a listed company, it is our responsibility, it is our duty to intimate to the shareholders. As of today, we don't see any problem in the system. Sounds good. Go... All the best. Thank you. Thank you. Thank you. Thank you. The next question is from the line of Venkatesh Balasubramaniam from Axis Capital. Please go ahead. Yeah. Thank you for the opportunity. I had a few data questions. First of all, in the third quarter, did you have any inventory loss or gain in the pipe segment? If it was there, can you please share it? Yes. There was a loss of PVC pipe. It was October and November, there was a sizable loss. Some of loss we cover up in December. Sizable we will be covering up in the Q4. That's why in the initial remark we said that we'll be having a healthy EBITDA margin, and there will be some element of inventory gain also in Q4. Whatever the price rise in PVC we have seen, that was in the month of December. Because of that, the benefit will come in January and February. We are seeing a good number in Q4. Yes, in October and November, there was a loss. It is very difficult to quantify how much will be there, but it should be close to about INR 35 crore kind of level was there. It is not an approximate base number. It is not a perfect number. It is my guesswork I am telling you. Don't rely on the exact number. Mr. Venkatesh, does this answer your question? No, it doesn't. What I was asking is, does the... This INR 25 crores is the third quarter inventory loss approximate number or is it like, you know, you gained back part of this INR 25 crores in the, in the month of December? It's 25. Okay. Now the second question is, I don't know if you shared it, but it was not very clear. Can you share the Paints revenue and EBITDA in the third quarter? INR 52 crore revenue and 12.6% EBITDA. 12.6% EBITDA. Okay. You in your press release also have given that for the nine months, sanitary ware and faucets has done INR 13 crores loss. Did you also mention that in the third quarter, the loss was INR 4.5 crores? Did you share this number? I'm just checking. Yeah. INR 4 crore-INR 4.5 crore, yes. What exactly was the number in the second quarter? Is it possible to share? Second quarter was around INR 3 crore or something like that. Okay. Okay. Now. In this quarter we have added lot of new teams with us, plus Jamnagar plant related, initial setup cost was also there because we opened up the Jamnagar plant also. That cost was also there. Revenue was not there. From this quarter onward, revenue will start flowing. We are expecting that this loss number will wipe out in next couple of quarter. Okay. Okay. Now in the first 9 months, sanitary ware and faucet, you didn't have any revenues, is it? Because we didn't started in the market. We started from Q3 only. Okay. No, because you shared some number, INR 9.68 crores for third quarter. Was that a revenue? That is for Q3 number. Okay. That is the Q3 number. Okay. Now the last one small query which I had, if you see your consolidated financials, at the other income level, you have a loss of around INR 2 crores. Why is that? INR 5.5 crore loss was there in UK, which I said in my initial remark also. There was a gain of INR 3 crore something in my other operations like Astral and all, wherever we are parking our liquid funds and all. That was a gain. Net off was INR 2 crore minus. Okay. No, shouldn't that come under Forex gains which you anyway give separately? No, because as per the accounting policies are such that you, 9 months whatever the other income is there, you have to reduce 6 months and the balance figure you have to show as a 3 month. Okay. Because of that, this whole question was raised by me also to my team that why you are showing here. They said, "No, it is like that only." Because gain will be like that upstairs and loss will be on down. Okay. Okay. They have to net off on a nine-month versus six month. Whatever the difference is there, they have to show like that way. Okay. Okay. Thank you. It was a confusion to me personally also to be very honest. Okay. Okay. Thank you for very much. I just had one request to you that if on a consistent basis, on a quarterly basis, you share in, at least in the call, you share the plumbing revenues and rather the sanitary ware faucet revenue and EBITDA, because that helps us understand how the underlying pipes business is doing. Otherwise, you know, you end up thinking that actually the pipes business is not doing very well, which is actually not positive for the- That- Yeah. That's why in this quarter I was specifically given that number. Yeah. Okay. Okay. All the very best for the future. Thank you, sir. Thank you. Thank you. The next question is from the line of Praveen Sahay from Prabhudas Lilladher. Please go ahead. Yeah. Thank you for opportunity. Firstly, congratulations on the CSR award and to the Hiranand Sir for your CFO award. Now the question from my side is related to the volume growth of 30% which you have delivered. Can you give some more color on how is, you know, the further like PVC, CPVC or a corrugated pipe tank has performed? If not in numbers, in the qualitative terms, if you can give some view on that. Hi, Praveen. Sorry, we don't give any segment-wise data, be it value or volume, because as you know, the competitive intensity in the business is too high. We would like to maintain the secrecy on our vertical wise data. Yeah. Praveen, you, I can give you some color that in all segment we have grown. I can say like that way, all segment, whether it is a PVC, whether it is a CPVC, whether it is a tank, whether it's a DWC, all segment there was a growth. Otherwise this 30% growth is not possible. We are not agri company, you know. Most of the growth has come from the plumbing side of the business. Because of that, all segment we had a growth, and that's why you are seeing this number. Right. Second questions are related to the sanitary ware and the opening commentary. Kairav has mentioned that's a 25,000 bidding on the way for a bath building. What is that exactly? We are currently quoting in projects, which the total pipeline is around 25,000 bathrooms. We are working on a few projects, and we are confident that we will close them. That is why I had mentioned that, you know, we are actively working on certain large scale projects across a few metro cities in India, where the quantum is about 25,000 bathrooms. We have already supplied to more than 3,800 bathrooms in our project business in the sanitary ware and faucet division. Mm-hmm. Okay. The next question is related to the paint. You also mentioned about the rebranding of that. Is it like a Astral brand, you are going to do with the paint or? We have not yet decided on exactly what path to take. Right now the paints business, the brand name is Gem Paints. Gem Paints is a very strong brand in a couple of south states where it operates. We have not yet decided whether to change the brand name from Gem Paints to Astral Paints or to keep it Gem Paints. Based on the market scenario and the feedback that we will get from our sales team and from our channel partners, we will take a call in the coming few months. Right now we are working on the packaging of the product, we are redesigning all the packaging, then we are slowly and steadily working on a new website and new creatives. A lot of stuff is happening, the rebranding from either keeping Gem or Astral is not yet finalized. We will communicate that to the market once we take a decision on that. Okay. The last question is related to the incremental, you know, the capacity at Aurangabad plant and Sangli plant, you had created for the PVC pipe. How much is the CapEx you had incurred for that? It is very less CapEx actually. The plants we already had and the buildings were already constructed, so it was basically just buying the extruder for the PVC pipes and placing them there. It was not a very significant. INR couple of crore hardly it was there. Okay. Thank you. That's it from my side. All the best. Thank you. Thank you. A reminder to our participants, please press star and 1 to ask a question. The next question is from the line of Mitul Shah from Reliance Securities. Please go ahead. Good morning, sir. Thank you for giving me opportunity, and congratulations on a very strong performance. Sir, I have first clarification on we said pipe utilization of 57%. That is including this new Sangli and Aurangabad plant or that would be incremental coming at the end of the quarter? No, no. Including that only. Sangli, Aurangabad, this Bhubaneswar, all put together. Okay, sir. Second question on this pricing of PVC as well as adhesive also, where we are saying that price increased over the end of December and then onwards it is more or less stable in January and February. On a blended average Q3 average price versus January, February is how much it would be higher now, roughly? I think it is very difficult to arrive that price rise because we have not given any price rise to the market. What we communicated that whatever the high cost inventory was there, that is gone away from the system, so we are not increasing any price. On the contrary, if the demand comes more, then we may have to reduce also the price. We have to see how ultimately we are settling down our margin. Based on that pricing will be decided. As of today, January, there was no change in the price in adhesive or paint or pipe division. We have maintained the same pricing what was there in December. December there was a high fluctuation in the price. Yes, sir. I'm asking for Q3 averages. October, November were relatively low price. December we are saying it has increased and the December higher level is maintained in January. Compared to Q3 average, it should be slightly high, right? Definitely it will be high. Much higher because INR 13-INR 14 price rise was there in December, so naturally it will be high. Okay. Lastly on the tank business side, sir, that we are on track to achieve our targeted revenue in the first year itself. Going forward, how much in terms of expansion network, et cetera, if you can give more details and once we reach to a stable volume or size, what would be the stable margins in next 2, 3 years for this segment? Like tank, you can see the market, Astral is selling always at a premium. We are not a commodity company, which we have repeatedly said. We are a brand, so we will not sell any product at a loss. That is a very, very clear thought process among all the senior people working in Astral. Even today also, tank also, you see our margin will be somewhere around 12%-13% minimum. That is the beginning of the journey, and that is with a low capacity utilization. With this increase in the utilization, I think we will be settling down somewhere around 14%-15% margin. That we have communicated long back in our previous calls also, if you can go back to our transcripts also. We are very clear that we will be working on a 14%-15%. That is a healthy margin for any brand to work. We will be maintaining that kind of margin. Today, yes, definitely, we are still low because we are gearing up our market share and still we have not grown up our market. Even 2%. Even if I do INR 100 crore this year, we will be hardly 2% of the market share. It is not a substantial market share we have gained. This is just a beginning of the journey. We have to see, we have to evaluate, because right now our tank is rolled out from almost 5 locations. In future also we will see how many more location will be added into the tank side. Tank is basically a logistic play. If you are near to the market, you will be able to serve to the market in a better way, because storage is the biggest challenge for any distributor or a dealer. If you are near to the market, you can gain a fast market share. Otherwise, it's a challenge. We have to see how first we have to utilize our current capacity, and then we will see how best way we can add the more capacity into the existing plant, or we may add to the new plant that we have to work out. Right now we are operating from five location, and in future we may add more. Yes, sir. Sir, if I can squeeze one more question on dealer level inventory for pipe business compared to traditional Q4, how it has been and restocking related details if you can give? I think dealer level inventory is still not at the optimum levels because the dealer level inventory was very dry in Q3. With the PVC upward movement, the demand came from the end consumer, the farmer level demand and the builder level demand, developer level demand. A lot of the product that was sold in Q3 was consumed in the market rather than building up the inventory. From January onwards, we are experiencing that the dealer level inventories have started building up, but I would say it is still not at the optimal level as it used to be before PVC started falling. Yes, sir. All this is 25,000 bathrooms we are talking about. What could be the ticket size per bathroom here, roughly? I think it is difficult to say it. It depends on the project, what product they use. We have faucets, starting from under 2,000 INR, and then we have faucets that are selling at 12,000-13,000 INR. Similarly with our sanitary ware product, and ceramic product also. It depends on what range this developer decides going for. If it is a low cost housing, then the ticket size is different. If it is a little bit of a medium to an upper scale sort of a housing complex, then the ticket size is different. Basically we have a four category into sanitary ware and faucet: start range, mid-range, upper mid-range and the high end. We are quoting to all categories of the developer. We don't know which category the order will flow. Thank you very much and all the best, sir. Thank you. Thank you, sir. Thank you. Before we take the next question, I'd like to remind the participants, limit your question to two per participants. If time permits, you may join the queue for any follow-up. Thank you. The next question is from the line of Achal Lohade from JM Financial Institutional Securities. Please go ahead. Yeah, good morning. Thank you for the opportunity. What I wanted to check is that, you mentioned that in your comments that the demand has been robust in the plumbing business. If I were to look at the quarter-over-quarter jump in the volume, it's about 13% for us, while it is 30%-50% for some of our peers. Just thought of, you know, getting your perspective on the same. I think we communicated earlier also, we are not a agri pipe company. Major chunk, if you see the volume is coming from the agri side of the business. That's why if you can compare the per kg realization of Astral versus other brand, you will clearly find the demarcation over there. We are much ahead of any players in the market. Similarly, if you see the margin, we are much ahead of any players in the market. That is a very clear indication that we are a plumbing company, more focused on the CPVC side of the business. That's why you can't compare the two companies or all other peers. We have to compare apple versus apple. We can't compare apple versus banana. That's a big gap, because right now the biggest demand is coming from the agri side of the business. Last two years, the demand was very, very low into that segment. Secondly, the base effect you have to also consider. The base effect was very low for the other company, particularly the agri-dominated companies. We have to consider that also. That's why we have given the press release, the five-year CAGR numbers also in all front, top line, EBITDA, volumes, all respect we have given the number. That again, I am telling you that number will not be a comparable because the nature of business of every company is different. All companies are respectable company in the market. We don't want to say that other companies are not good. All are doing great in their respective field. Comparing volume number, it will be very, very difficult because then if somebody is CPVC dominated, their volume will be low. If you compare only plumbing number, yes, definitely. If some companies are giving you the number of plumbing, volume of plumbing, then yes, definitely you can compare and then you can say that which company is doing good. I will be very happy to understand from you if you get this kind of number. I would be definitely learn from you. Wherever we feel that we are not doing good, we have to improve ourselves also. Got it. You know, basically, I just wanted to clarify, this is largely driven by agri for the others, so which is not our key focus area, and that is the key difference. That is our hunch. You know, I cannot 100% without seeing anyone's books, I cannot 100% comment that, you know, all their growth is coming from agri. From the market, sentiment that developed in the end of Q3, with PVC prices going up, you know, a large chunk of demand was coming from PVC. With the farmers not having bought new agri product for a large time, it was, you know, PVC prices had bottomed out, so the demand was very robust from the rural India and the farmers. Also line businesses of agri pipes were also doing very good. Overall, this is what our market and channel check says. Got it. Got it. Just a small clarification. You said the inventory loss for the third quarter is INR 25 crores, right? Two five, INR 25 crores, right? I say approximately. It is not a correct number. Approximately. It is very difficult to arrive the number of inventory loss. This is the approximate number. This would be realized loss, so to say, right? I mean, given, it's sold in October, November, this will be realized loss. Yeah, yeah. that's why we say that December the PVC price shoot up. that benefit we will get in the month of January and to some extent in February. If the PVC price maintain its same level, whatever the closing level of December was there. suppose hypothetically in February, if the PVC price goes up from here, then there will be a further gain in February and March. if it is goes other way around, down, then the gain will be low. I think now it is at least good that in our peak season the price are stable. PVC price has not changed from first of January. that is a very, very good thing for the industry because that gives the confidence to the dealer to put up the inventory. Normally dealers are afraid to have a more inventory when there is a fluctuation in the raw material side. Here at least one thing is good, so last 40 days the prices are stable. Got it. Just, just one more question, if I may, with respect to, like you mentioned, 13%-15%, you know, volume growth for the pipes business. Similar, you know, guidance for the adhesives piece? Adhesive also we have said. See, it is very difficult to give you one category-wise guidance. We have given already in FY 20 presentation first time we have given the guidance of 5 years. Okay? That we will be doubling our revenue in next 5 years. If you pick up the number of 22 or maybe 23, I think we are going much, much ahead of what we have guided. We, we are continuously giving the guidance that we will be maintaining that run rate, that doubling our revenue in next 5 years. That is what guidance we have given. Quarterly, very, very difficult to give the guidance or individual segment while giving guidance, it's really challenge. Within segment also, if I start giving numbers you'll ask the category-wise guidance. I think it is very, very difficult for anyone to give you that kind of number. Yeah, on a broader basis, we have committed that we will be delivering 15%+ re-revenue guidance. That is about the 5-year doubling. Today we are much, much ahead of what we have guided. Our new product contribution will start coming now, which I already said in my initial remark. That is very important to see how that new divisions are going to perform, whether it is a valve, whether it is a faucet, whether it is a sanitary, whether it's the East Plant performance. We have to see how this all new things are going to support us. Based on that, the guidance may change on upward direction also. It is too early, so we don't want to unnecessarily give you too much of hope that we can do this, we can do that. It is very difficult because launching is easy, to grow up in the market it is always challenging. Like tank, we were never expecting that very second year of performance we will be doing INR 100 crore. In the very first year itself we got a confidence, that's why we said that we will be able to do INR 100 crore. Similarly, sanitary ware and faucet, I'm not giving any guidance for FY 2024 because we know it's not an easy business. We have to work hard. First we have to create this 500 display center. That is very important and success for us. If we are able to do 500, I'm sure we will be able to deliver the numbers also. Till we are not able to do that part and start talking about the number, I think it will be too early. I don't want to give any guidance on the sanitary ware and faucet for next year because we have to do still lot of work. Same thing will be in the paint. Paint also we are working since last almost 6 months, we are just understanding. Now we are going to complete our SAP implementation. Once you implement SAP, then you start getting the authenticated number. Based on the daily number, you can't rely and take a final call. Our all seniors are working on a certain system-based approach. Now on a daily, we can't work on that way. First of all, our utmost challenge is to implement SAP and SAP implementation for a smaller company is another set of challenge. We are working on all fronts, but I think number may be 1% or 2% here and there. Look at the 5-year growth of Esper. Look at 10-year growth of Astral. Don't look at 1 quarter, 1 year number. Please join with us for next 10-year journey of the growth rather than 1 quarter, 2 quarter. That's why every call we are communicating that we are a company which will give you a consistency of the number. We don't want abnormal kind of growth also. At the same time, we don't want to degrow also. We want to maintain the consistency. Thank you, Mr. Lohade. Request you to join the queue for any follow-ups as we have several participants waiting for their turn. Thank you. We take the next question that is on the line of Rajesh Ravikumar from HDFC Securities. Please go ahead. Hey. Hi, sir. Good morning, and congrats on good set of numbers. Coming to this plumbing business, the inventory losses, though you're talking approximately INR 25 crore, I think Q1 and Q2, the losses were close to INR 25 crore and INR 45 crores. Q3, the price, recent price fall was, you know, quite low, INR 12-13 from September exit. Just wanted to understand how this accounting works because the number seems to be quite high, you know, given what we booked in the first half. What happened that once you book, once you sell, na, then the real number of loss comes. Mm-hmm. Inventory will not come because it is at the cost value. Okay? Okay. In this Q3, we have sold the highest volume. If you see the last 9 months number, the highest sale took place in the Q3. Okay. Majority of the high cost inventory was sold out in the Q3. Mm-hmm. Is it like? Let me complete. That's why I said that Q4 will be a gain because whatever the low cost inventory we have purchased in the months of October, November, December and continuous basis, that is not sold out. Mm-hmm. That will be sold in Q4. Mm-hmm. That's why we said there will be some element of inventory gain also in Q4. Okay. Basically, accounting is that based on the selling, not on the basis of purchase or anything else. Okay. It's not basis the outstanding at September and whatever inventory you had marked to, you know, marked it down. It is basis sales on actual basis? It will never be marked down because it is not sold. Mm-hmm. Mm-hmm. Mm-hmm. Okay. It is at the cost. It is at the cost. Okay. The 9-month number would give a fair understanding of your total losses because this consummates the whole cycle. Yes. Okay. Perfectly well. Sir, secondly, on the adhesives, and paints revenue, if I look at the prior numbers have been restated, you know, any specific reason for the same? Because I don't think there is change in the business. The paint numbers have already been affected since March 2022. No. I think we have started from Q1 onward, not last year. Mm-hmm. Right. Q, huh. From Q1 onward, paint business we avoided. Why the prior numbers have been restated, sir? Because we don't have authenticated number with us. There is no audited number, so our auditor will not console that number. They said we need a quarterly audited number. Mm-hmm. Mm-hmm. Mm-hmm. Okay. Okay. just, if you may have. Small size company, normally nobody make the. Agree. audited number. Agree, agree. Agree on that. Just September quarter, can you give the paints, EBITDA margin again, please? December you gave 12.6%. For September, how much was the number? September, I don't have a handy number with me. Can you call me post con call? I can have to check my sheet and let you know. Thank you. The next question is on the line of Sujit Chen from ASK. Please go ahead. I think it was 13.9% in Q2, paint business. Yes. Sujit Jain from ASK, please go ahead with your question. Just one question on the Rex. From the time you acquired the company, what would have been the volume CAGR? Is the business finally back in terms of growth in terms of volume? I think now this year is doing great. This year will be a reasonably very high growth into that business. This year, I think on a 9-month basis, we are up by, I don't know exact number, but close to about 25% volume growth. Doing very well for us this year. Looks that the way now government has done lot of announcement into the budget for the infrastructure related things, that looks that we will be getting a reasonably high growth into that business also. Railway side also, government has done lot of announcements, we are supplying certain products related to that also. Road related announcement is there. We are supplying to that related products also. I think hopefully it will do good for us. Secondly, to utilize that plant, we were having the space, we thought that by the time these products start picking up, why not to utilize the space over there? We have put up our PVC machines over there in Sangli location. That has started giving us a good volume from that location. Ultimately, we are able to utilize that plant because all other facilities were there, utilities and all were there. Because ultimately, it is a prized plant. Now all our agri product, SWR products, all have started rolling out from that locations also. Yeah, that is good to know. You'll have to look at three-year CAGR because the nine-month base was muted, so hence 25% growth. What would have been the three-year CAGR in volumes? I don't have a handy number for the three year. Secondly, we don't share also individual product-wise. That is the policy of the management, that we don't want to share all this individual product category-wise growth. Thank you. Next question is from Girish Choudhary from Spark Capital. Please go ahead. Hi. Good morning, sir. Firstly, if you can talk a little bit about the CPVC market, in terms of how the competitive intensity, your market share, the pricing trends. The other thing is that we have also seen PVC prices coming down sharply. Do you see any impact to the CPVC volumes? That's the first question. CPVC prices will not go down beyond a certain extent is because India already has an anti-dumping duty in place, and that anti-dumping duty caps the CPVC price at $2. Even if PVC falls from here also, and when PVC was at a all-time low in December, November and December, CPVC prices have remained very stable. Because of this anti-dumping duty in place, the CPVC price will continue to hover around a certain level and will not fall beyond $2. I don't think there is any problem on that side. Thank you. Before we take the next question, I'd like to remind the participants to limit their question to one per participant. If time permits, you may join the queue for any follow-up. The next question is from the line of Sandesh Barmecha from Haitong Securities. Please go ahead. Thank you for the opportunity. Just one question. What was our nine-month FY 2023 CapEx? And what is our guidance for FY 2024 and 2023 as well? I think next year we have not still finalized the budget, so will be difficult for me to give you the number. Nine-month wages it was around INR 190 crore. This INR 190 crore include this acquisition of our Jamnagar faucet plant also. Okay. In FY 23, full year guidance, sir? Full year guidance will be, I think, another INR 40 crore, INR 35-40 crore will be there. Thank you. The next question is from the line of Jenish Karia from Antique Stock Broking Limited. Please go ahead. All my questions have been answered. Thank you so much. Thank you. The next question is from the line of Nikhil Agrawal from VT Capital. Please go ahead. Good morning, sir, and thank you for the opportunity. Sir, I just wanted to know what would be the expected volume growth for the industry for the next few years. Next? Few years, two, three years. I think. Volume growth for industry. Last 2 year industry was not growing. FY 20, I think, was the negative growth of 17% or so. FY 20. Sorry, FY 21 was negative by almost 17%-18%. FY 21 was roughly about flat or minus 2%. This year we have to see because it's not published data, so very difficult. This is what I have got the information from the market, I don't know whether it is authenticated or not. Nobody is officially publishing this data. This is what I have got from my reference check and all, I am telling you. Overall, if you look at things that have been announced, the budget that was announced recently, and looking at the real estate market, I think the next couple of years will be very good for piping companies. A lot of the inventory of finished inventory of apartments and houses got sold during the COVID time, and a lot of new projects have been announced pan-India. After the announcement of a project, it takes about 1.5 years or so for it to reach the plumbing stage. A lot of new construction is also happening. Next 2 or 3 years will be very good for the plumbing industry. Based on the infra measures that have been announced, it will also be very good for the companies dealing in infra products. Okay. Sir, we will take the last question. Sure, sir. Thank you. We'll take the next question from the line of Girish from Morgan Stanley. Please go ahead. Thanks for the opportunity. I may have missed this. The dealer inventory right now that exists for pipes, for your large dealers, how much is that versus, usually that, you would have seen in the past? Second one was just on the Dahej chemical plant. Are we expanding more on the consumer side? If you can give some rough split, around that 1,800 pipeline road of revenue, how much would be, industrial versus consumer? Thanks. Let me answer your second question first. Major chunk we are going into the consumer side only. You know that Astral is a brand, normally we believe in the consumer side more. More of will be on a consumer side. Secondly, your question was relating to the dealer inventory. I think Kairav has already replied, but again, I am repeating that thing, that PVC prices started going upward journey from December onward. Initially, dealers were not having confidence that this will be maintained or not. Because of that, they were shy away for taking the inventory. Slowly and gradually, they have started picking up the inventory, now they all are in a peak season, so they have to keep certain inventory. Otherwise, they may lose the business also, because in a peak season, you have to always having the inventory. Again, it is not 100% I can say, dealers are sitting with the full inventory, but maybe 75% or so dealers are sitting on the inventory and 25% still vacant positions are there. We have to see how the stability is coming in the PVC side, and based on that, they will be fully having the inventory which normally they keep with them. Thank you, sir, and all the best. Thank you. Thank you. Thanks, sir. Thank you. Ladies and gentlemen, that would be our last question for today. I now hand the conference over to Mr. Kairav for closing comments. Thank you and over to you, sir. Thank you everyone for joining on this Q3 earnings call. Thank you, Pranav, for hosting it. I hope everyone is satisfied with the call and our numbers and we will continue to work hard and we will come back with positive numbers in the fourth quarter. Also, we will continue to work hard for the coming years, and we will follow our guidance as given to our investors. Thank you all, and thank you for joining so early in the morning. It was lovely interacting with all of you. Thank you. Thank you everyone for participating this call. If you missed out any question or any number which anybody want to understand, please call me directly maybe after 1 hour and I will be happy to reply all of you. Thank you very much. Thank you very much. Ladies and gentlemen, on behalf of Equirus Securities, that concludes today's call. Thank you all for joining us. You may now disconnect your lines. Thank you.