Ladies and gentlemen, good day, and welcome to the Astral Limited Q1 FY25 earnings conference call, hosted by HDFC 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 zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Keshav Lahoti from HDFC Securities. Thank you, and over to you, sir. Good day, everyone. On behalf of HDFC Securities, we welcome you all to Q1 FY25 earnings call of Astral Limited. From the management side, we have Mr. Sandeep Engineer, Chairman and Managing Director, Mr. Gaurav Engineer, Executive Director, and Mr. Hiranand Savlani, Executive Director and Chief Financial Officer. I'll now hand over the call to the management for their opening remarks, which will be followed by Q&A. Over to you, Sandeep, sir. Thank you. Thanks for joining the earnings call of Q1. As you all are aware, that the pre-COVID volatility of polymer and chemicals were in the range of 1%-3%, and its volatility is in, today is in the range of 10%-20%. In the long run, it's good for a bigger and cash-rich companies and very painful for smaller companies. But for a shorter period, it gives fluctuations in results from, for every company. In the past also, we have communicated to all our investors to please see our results on the yearly basis rather than on quarterly basis, because these kinds of fluctuations are going to give high volatility in numbers, either in top line or in the EBITDA margin levels. But in spite of so much volatility in raw material side, I'm very happy to say that our team is in better position and able to manage this volatility and deliver a good 16% volume growth against our guidance of 15% volume growth. So we are very much in line with what we have guided. Our CFO will discuss more on the numbers, but let me take you to the, to all the verticals of the business. In Pipe, we have completed the Guwahati plant, and it's fully operational now. Our bigger plant at Hyderabad is ready, and trial runs are going on, and we are going to start commercial production in the last week of this month. That is August 2024. Our fitting plant at Ballabhgarh is on the verge of completion, and we are expecting to start the production in Ballabhgarh plant for the fitting from next month, that is September 2024. We have put 22 injection molding machines in phase 1, and another 22 injection molding machines will be installed in phase 2. Dholka, our expansion on existing plant for additional machines for pipes is in full swing, and we are expected to start the production from Dholka from October 2024. Regarding our Kanpur plant, construction drawings, plans are ready. All agencies have been appointed, and we have awarded the construction work to a company which is starting the project work from the end of this month. Regarding new projects, we are planning to enter into O-PVC and PEX line, PEX pipes. Our, for both of the products, our machines are ordered, machine orders are placed. O-PVC trial production will start from October 2024, and PEX will start in next year, next fiscal year, Q2. Regarding bathware business, we are progressing very well. As communicated earlier, this is a new vertical for us, so we will go slow, but as we have guided earlier, we will be doing net sales of 100, anywhere between 100 and 125 crores for this fiscal. Best part of the business is that all our customers who use this product are, as well as the plumbers who are for fitting the products, are all appreciating the quality of the products, so our confidence is going up for this vertical and this business. We are also adding new SKUs in the vertical, and we are foreseeing a good growth coming from these new SKUs in the bathware division. Regarding our adhesive business, it is going as per our plan. This quarter also, we have a very healthy growth of 14%, and the industry was growing very slow. It's not only the growth, but we have also delivered a very healthy EBITDA margin in our adhesive business at 16%. Our rural initiatives in this vertical will give us further growth in the coming years, and all the products are very well accepted in the rural market. Regarding our U.K. operations of adhesives, this quarter was not good. It delivered a negative growth of 5% in top line and 2.5% in the EBITDA due to the elections and slower growth in the geography. We are closely monitoring the same and will work out plans to come back quickly on the growth path. We are confident that from Q3, we will be coming back to the normalcy of its business and to the plan, as per the plan, which we have made for the business. Regarding paints, we would like to inform you that we have launched Astral Paints in last week of June, and opened Gujarat and Karnataka market. We are understanding the market, and slowly we'll open few more states. The numbers will start from 2, 3, once we appoint sizable numbers of dealers for our brand. On consolidated basis, our growth is good. We are seeing the future of the building material industry is very good in India, so we are confident, confident that we will keep doing higher than the industry growth and keep gaining market shares in the coming time. I will now request Hiranand to take you through the financials, and we will take on your more questions on the business or whatever clarities you want in our question answer session. Thank you very much. Thank you everyone for joining this conference call of Q1 number. First of all, I want to take you the few numbers, and then we will give you the explanations of each vertical, like what scored there in the quarter. So the plumbing business last year was INR 938 crore, which has gone up by 8% to INR 1,013 crore, with an EBITDA of 17.94%. Of course, this EBITDA is including other income, so we are giving numbers in that way. That's why I'm giving this number. Adhesive business, India operation last year was INR 210 crore, with 16% EBITDA margin. This year is also INR 240 crore, so almost 14% jump. Though the industry was very slow for adhesive, but our company has delivered 14% growth with the same EBITDA of 16%. We have maintained the EBITDA in this category. Our UK operation was a little bit disappointing this quarter. Last year it was INR 94 crore; this year it has delivered INR 89 crore, so almost -5%. And the EBITDA last year, it was 8%, which is now 2.5%. But as Sandeep said, we are working on that. In fact, we were expecting some improvement, but it is getting delayed because of reasons already mentioned, that election can slow down in the economy, which has resulted that. But we are working on few initiatives, which will give us the growth back to the Q3 number onward. Paint, last year it was INR 40 crore, this year it is INR 42 crore, so almost close to 4.5%-5% kind of growth. EBITDA margin last year, it was 17%, this year it has come down to 10%, mainly because of the new launch of Astral Paint. So for that, we did a couple of big bang dealer meet in Bangalore and Ahmedabad city, and we appointed a lot of new staff for the Gujarat region and the Karnataka region. And because of that, we have to spend additional INR 2.5 crore-INR 3 crore. But this amount is INR 3 crore, but if I work out on the top line of INR 40 crore, it is working out to be 7%. So that's why it looks that the EBITDA margin has dropped from 17% to 10%, but actually it is not like that. So, gross profit margins are maintained, but it's the only challenge is that we have spent this amount, that's why it looks that way, our EBITDA margin is there. So, overall, on a consolidated basis, we have grown 8%, and this is a very healthy growth under the circumstances where the polymer prices were very, very low in the industry. The gap between the volume and value was 8% because of this lower polymer price, and that has resulted into the little bit loss into the EBITDA side also. Now, I'm coming to that also. First off, we want to discuss about the gross profit margin. The GP has improved during the quarter, all-time high of 40% plus. So, we are having no challenge as far as the gross profit is concerned. But it is not fully converted into EBITDA, mainly the reason we have communicated in the press release, that is mainly because of the employee cost and the other cost, which has gone up. If you see the GP even on the per kg basis also, I think we have maintained, little bit improved also on a per kg basis. So absolutely, we are on the right track. Q1 is always slow quarter and polymer prices were low, so the gap was wide between the volume and value. That's why also percentage EBITDA has come down. If the value and volume could have stayed, then the percentage EBITDA could have been much better than what we have delivered. We are quite confident that in coming quarter, this cost will come down, like other costs and employee costs also, because our seasonal quarter is going to start now. As mentioned, that couple of events were together in the Q1, particularly the ICC Cricket and the IPL. Because of that, our extra INR 20 crore cost was there on the branding, advertisement and exhibitions and all these things. But this cost will not be a regular kind of cost, so we will be strict to our annual budget, which we normally give and which is normally in line with the growth of the business. So we assure you that on a full year basis, this number will be in line with the growth of business. So we need should not worried about this cost because this is the one of the costs of particular quarter, and that is loaded on a lower quarter. That's why it is looking in the percentage some very high, but this is not going to be the case on a full year basis. Secondly, in the second half, normally we have seen the element of CPVC will be high, value-added products will be high, because our seasonal quarter is normally Q3 and Q4. So that is also going to give us a more advantage in terms of margin. Q1 is always, in the historically last 10-year number you see, it is loaded with the more of PVC products than the CPVC and the value-added products. So that is also one of the reasons that some pressure will be there on the margin. But otherwise, in the coming time, second half, it is going to be in a much, much in a positive direction. Secondly, we are also expecting that the BIS norms and the anti-dumping duty on PVC, which is already on the cards, which may come in Q3, so that is also going to support on the polymer price in the second half. And second half is always peak in our industry, so that is also going to add further support to our volume and the, you can say, the, advantage on the margin side. In the month of June, PVC price substantially gone up, but that pass-through doesn't take place because industry side, everyone was finishing the quarter, and no one was passing through to the market. Everyone was expecting that from July onward, we will pass through to the market. So because of that, everyone was expecting that the top line should improve, and equally the same inventory gain should also be there in the system. But actually, the pass-through doesn't take place in the industry. No player has passed through in the industry, so because of that, there was no inventory gain. Otherwise, the kind of price rise was there in the PVC, there could have been a inventory gain. So there was no inventory gain for us also. As far as the bathroom is concerned and paint is concerned, right now, we are spending more money. That's why it looks that the margins are low, and similarly, the market still it has not reached to the break-even point. So that is also reducing our EBITDA to some extent. But the way we are seeing the growth in the bathroom also, and once the all launch will be over for the paint, we may open up one or maybe next two state in the second half in the paint also. So then after, I think, it will be a substantial growth into that vertical also, and that is also going to support us with the additional EBITDA. So lastly, as Sandeep said, we are always giving the guidance of full year basis. One quarter will not be the right method to do the evaluation on all the parameters. Some quarter, where top line will be there, volume will be missing, EBITDA will be high, EBITDA will be low. These kind of things will keep happening on a quarter-on-quarter basis. But our annual guidance, which we have given 15% volume growth, we are maintaining that. If any change will be there or any, plus or minuses will be there in the system, we will be communicating to you in the coming quarter. But right now, we are confident that on a full year basis, we will be maintaining 15% kind of volume. Thank you very much. And with that, I want to open the floor for Q&A session. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question is from the line of Shravan Shah from Dolat Capital. Please go ahead. Hi. Thank you, sir. Sir, this 15% volume growth that we are seeing, I think, previously we are looking at 15%-20% kind of a range. So, given the fluctuations in the PVC prices, so, is it possible that maybe the Q2 onwards, we can, there is a chance to revise this upwards or, 15% would be kind of a max that right now we are looking at? And also now, particularly July, how was the kind of a demand? Or maybe if you can give some idea in terms of the volume, how was it? So like you see the history that whenever the polymer price goes up, the demand picks up. It is not a genuine demand, but it's a stocking demand. So the genuine demand will be the secondary sales. Primary demand keeps coming up and down. So whenever polymer price goes up, primary demand goes up. Whenever polymer price come down, primary demand comes down. So that is the normal phenomena, and to some extent, secondary also get affected with the price fluctuation. So we have seen in the past also, whenever price has gone down, the demand has come down. But the moment INR 1 or INR 2 or INR 3 polymer price goes up, the pent-up demand come back. So I think on a basis of 1 month or so, it is very, very difficult for anyone to predict what is going to be there for the full year basis. That is why we say that right now we are sticking to this volume. If any change will be there, genuinely any uptick or slowdown will be there. Last year also, you see, we guided 15% volume, and on a half year basis, we revised the guidance to 20%, and we ended with 25%. We are very, very sincerely communicating to our investors the reality of the market. This year also, we have not given the too high guidance. We have given only 15% plus kind of guidance because we know there is a highly volatility will be there in the market. Otherwise, we could have guided you more also, but we don't wanted to do that way. That's why we have given the guidance 15% plus. 15% can be anywhere 16, 17, 18, 19, 20, anything between 20% number. So we have to see how our peak quarters are going to perform. If our peak quarters are going to give us the good result, then I think should not be any problem. We can achieve even more number also than the 15%. So 15%+ guidance we have given, so we are stick to right now that. As far as July is concerned, yes, you are right, absolutely. July is slow because the polymers are coming down. And another INR 2- INR 3, everyone is expecting that the market price will go down, and that is already reflected in the street, and every dealer and distributor know this thing. But beyond that seems difficult to go down immediate basis. And if anything positive comes out from the VCM side or anti-dumping duty side, there is high probability the polymer price starts going up also. Similarly, in the anti-dumping side of CPVC also gets support in the increase in the price in the coming time also. So these all are subjective, and that is the reason we have given the range. So it is very, very difficult to monitor on a quarterly basis, but on a yearly basis, yes, we are quite confident that we will be delivering the same. Okay. And, secondly, in terms of Q2, is there a possibility that we can see the inventory losses? At this stage, we don't see any inventory losses. If further polymer goes down, yes, there can be a probability of loss, but at this stage, when I'm talking today, it doesn't look that the inventory losses will be there. Okay. Couple of data points, Bathware Q1 revenue and EBITDA loss was how much? CapEx, how much we have done, and for full year, we were looking at INR 300, so that remains intact? So, bathware, we have already given the price list. We have done close to about INR 26 crore of revenue, which is YoY basis, if you see, it is a 90% jump, but that is not the right way to evaluate 90%. It looks very good number, but the base is very low. And as far as the CapEx is concerned, we have not done any CapEx into the bathware side because sanitary ware is completely outsourcing. And as far as the pottery is concerned, already our Jamnagar plant is operational, so we have not done any CapEx. And we have not given a guidance of 300. We have said we will be, Sandeep also said in the initial remarks, that we should be doing between 100-125 crores revenue this year. No, no, I'm saying the full year, at company level, consolidated level, in terms of the CapEx guidance, so that- CapEx guidance will be somewhere around INR 350 crore on a full year. Okay. And then, in bathware this quarter, how much EBITDA loss? It is very difficult to work out exact loss, because earlier it was a separate segment, but now our plumbing product fittings, where we are using the brass element, we have started manufacturing this all brass rings in-house in our Jamnagar plant. So now that is clubbed with the plumbing business. So very difficult to arrive the exact number, but it will be very low. Yes, it will be very, very, very low, and there is no CapEx for this whole year. Okay. And lastly, sir, on the paint for full year, how much revenue we are looking at? And in terms of the margin, I think previously we said 14%-15% kind of a margin. So, that for FY25 remains the same? This year, margin will be little lower, as I communicated in the Q1 also, because of launch and all employee costs. Because our revenue has not started, but expenditure have started. That's why, margin has come down. Second half also, one or two more states may open. In that also, we'll take some, some initial cost, but we will be maintaining double-digit kind of margin. And then revenue for full year, paint? Mr. Shah, may we request you- Full year, I am telling you minimum 10% kind of margin we are targeting. Okay, thank you, sir. Thank you. The next question is from the line of Sneha Talreja from Nuvama. Please go ahead. Hi, sir, good evening, and thanks a lot for the opportunity. Just couple of questions from my end. In fact, an extension to the previous question on paints. Given that we've just launched it in, Gujarat and Karnataka, how are we looking at further launches, and what kind of revenues can we see maybe from two to three years perspective in this particular, division? We have launched in Gujarat. Gujarat also, we just launched a month back, and we have got good amount of traction from the market. We have already 40 big dealers who have started stocking and selling Astral Paints. We are opening Rajkot from this month, and then we are opening Baroda Surat from this month, and in next one or two months, we'll be also opening in the north Gujarat. See, the paint, one thing you understand, is that paint, we are going with the direct to dealer model also. Which is therefore what when we bought Gem, the same model was there. And direct to dealer model takes some time to get established, but the sale in first 16 days itself for Astral Paints was very good. We'll quantify some numbers on this from next, next quarter for Astral Paints to make it more clear and clarity. And then in next two months, we'll be opening two more states, which we have, we want to finish Gujarat, go to Rajasthan, then go to Maharashtra. So we will be going in phases of three months, three months, two months to open, two, three states, then consolidate the position in three states in the western zone and then to work more on the southern part where Gem is present. And we would always, we are targeting a growth of at least 15%-20%, 15% minimum from the level which we were last year. And as EBITDA, already Hiranandji conveyed, the EBITDA margin will be maintaining double digits. We will have certain expenses to cover up the market, to create the market, and to grow the market... But the response is positive, the product is well. We have done a lot of painter meets in Ahmedabad, in Rajkot, and there is a lot of positiveness from the painters about using Astral Paints. And the response is also very positive in the rural markets where we have gone with our paints. Our segment covers all the paints. We have the iron paints and the normal paints, which can be sold in the rural market. So, but the market is very positive. But as I would always tell, when we acquired Resinova, the market and of course, everyone got impatient about the competency and the way we would deliver. Now, when [inaudible] will, you see the way we have grown, the way we have delivered, the way we have created new markets, new products, you will have to trust and give us time, but we will not derail anywhere in the business. We would not burn our capital behind the business. We will not throw capital behind the CapEx here without understanding, and we will always be in a positive mode on growth and margin. And keeping margin intact at a level, we will keep growing the paint. Understood, sir. That was pretty helpful and detailed answer. Just second question from my end was related to pricing, especially CPVC. Of course, we see, you know, PVC being volatile. CPVC, there were a lot of price hikes which were anticipated. How is that panning out? Is it still on the anticipated mode? Are we passing anything on? And moreover, how is the inventory levels at the dealer distributor level? This was the last. So PVC price so far is stable. There is no much volatility, but there are high CPVC on the anvil. CPVC price is stable right now, but there are high probability that because of this anti-dumping revised rule, there are high probability that the prices should go up. But because the PVC price has fallen, then the industry is under the little bit worried that CPVC may not go up. So because of that, no dealers or distributors are happy to keep the inventory. So everybody in a watch and wait mode. The moment, some uptick will start, then everybody will rush to, do the stocking. But at this stage, very light inventory in CPVC in the market, and, everybody is worried what will happen. Like PVC, nobody expected so sharp fall will be there. So because of that, right now... And secondly, it's the rainy season also. So normally also the demand will not be that high, and quarter is always lean, so that is also one of the reasons. So I personally feel that from September onward, things should start moving and, prices should go up. But right now it is stable and there is no price uptick. Understood, sir. Thanks. Thanks a lot, and all the very best to you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please restrict your questions to two per participant. If you have any follow-up questions, you can rejoin the queue. Thank you. The next question is from the line of Rahul Aggarwal from Ikigai Asset Management. Please go ahead. Yeah, hi. Thank you for the opportunity. Good evening. So two questions, first one on Adhesives. Obviously, consolidated number looks lower. You explained that India was 14% with 16% margins. Wanted to know your overall outlook for the balance nine months. In U.K., you already said what you expect, but India, what will you expect in terms of growth and margins? And on a consolidated number for Adhesives, what should be the margin we should work with? That's the first question. So I think India, we are expecting to maintain the similar margin for the balance nine months, and at the same time, we are expecting 15%-20% kind of growth. As far as U.K. is concerned, U.K. full year, we were expecting 8%-10% kind of growth on a full year number. But we have to reevaluate the things, how it is going to pan out, because second half we are expecting a lot of new things, development is happening, so it should definitely going to give us a good number. So on a full year basis, we are of the view that U.K. should give us minimum 8%-10% kind of growth. And margin side, we are expecting somewhere around 7%-8% minimum, EBITDA should be there from the U.K. If the second half will be better, it can go up also. Got it. That's pretty clear. And secondly, last question. So on the OpEx side, so I completely understand your explanation given on higher branding cost for about INR 20 crore for the quarter. But you know, last year, if you remember, that both the staff cost and other expenditure being pretty high, I think it was 35% higher year-over-year, about INR 250 crore for the full year. If you could guide us on the run rate ahead, that would really help. Like, how should we build the growth? Q1, I understand it's up again, 25% year-over-year, if I add up the staff cost and other expenditure. But some outlook on how should we look at staff cost and other expenses on a run rate basis going forward? So see, staff cost and all has gone up mainly because top line growth was affected because of the lower polymer price. Now, hypothetically, if the polymer price goes up by 8%-10%, then the percentage term will not be big gap, what we are seeing today. Secondly, that normally whenever you are adding the new verticals, new plants, like my Hyderabad plant is not giving any revenue to me, but my all complete staff is appointed over there, and cost is already started incurring. So that number will come at a later stage, but I have to incur the cost in advance. Same thing to paint also, we are expecting good number in the coming quarter, but I have to appoint the staff well in advance. I have to train the staff. So all this cost we have to incur for the new vertical, new plants. new geographies, we like the East and all the that market we have taken the entry. So there also we are increasing the manpower strength. So these all will definitely going to benefit the organization once the number will start growing. But right now, the top line is affected because of the polymer that looks at staff cost is very high, and definitely it is high on this lower top line. The moment the top line will start coming, I don't think it is going to be a more painful in the coming quarter. And secondly, this quarter is a very lean quarter also. On that, definitely it is looking very high on the percentage term. But otherwise, if you see on a quarter-on-quarter basis, it is not that high. If I'm comparing year-on-year basis, yes, it is very high. So please wait for some more time. Once this polymers will start going up for 8%-10% also, another, all the number will be changing. So our way of looking is that our gross profit margin should not be affected. So gross profit margin, not only it has gone down, but on the quality, it improves to some extent. If you see per kg also, it is maintained or little improvement. So, we are not too much worried on the employee cost at this stage. But if the growth will not be there, then definitely it is going to be a detrimental. But we are having confidence that in the seasonal quarter, growth will come back. There is no reason that India overnight will something happen to the country. So we are very positive. As far as other costs, I have already given the explanation that we are seriously looking into that and on lower base and couple of events become together only, and these events are booked long in advance, so sometime it happen that in the same quarter this happen. But in the coming quarter, it will substantially come down also. So on a yearly basis, it is not going to affect much. So we are quite confident on a yearly budget, whatever the branding budget or promotional budget we have given it to the team, we will be strict to that budget only. Sir, just a follow-up. What I was saying was, Q1 typically has the lowest staff cost and other expenditure, if you look at the full year trend, you know, if you go past history for Astral. Should that be similar this year also? So, like, whatever the percentage you are seeing last year, now, I think on a full year basis, more or less, it should be in the same range. Actually, I was referring to the absolute number, but I get your point, sir. I'll get back to you. Best wishes to you. You can separately also call me on a specific number. Yeah, sure. All the best, sir. Thank you so much for asking. Okay. Thank you. The next question is from the line of Pujan Shah from Molecule Ventures. Please go ahead. Hello, am I audible? Yes. Sir, we have been, like, mentioning from few press releases, yeah, about the O-PVC and the segment we wanted to grow. And, in our U.S. investor concall as well, we have explained about this O-PVC to develop the technology, where indigenously we have been developing this technology. So could you just please give a glance how we have been like, is it this first machine is being imported or we have been indigenously developing with any kind of association with any company? How we looking into it and how forward we have been planning to grow this segment, and what could be the potential plans for next two to three years? So O-PVC, yes, we have guided that this will be our indigenous technology. We have not outsourced this technology, so it will be completely in-house. And to start with October, November and December, 3 machines we have lined up. So initially, the capacity will be close to about 78,000 metric ton. Once the machine will be there and actual operation will be there, we will come to know exactly how the capacity is going to work out, but it should be somewhere around that level. And if we get a good response and success, then we can expand very quickly. So we have to see how it is going to work out. And definitely it should be price-wise, it will be very, very advantage to us, and that is going to help us to grow the market very fast. As far as market is concerned, market likes this product, and a lot of inquiries are getting floated in the market. And the moment we will start, immediately the demand should come. That kind of inquiries are there in the system. So keep finger crossed. Once everything settles down and we start selling into the market, we will be in a much, much better position to guide you what exactly is going to be there, what kind of the realization will be there, what kind of profitability of that businesses will be there. But at this stage, it looks very good, and it's a very, very promising product for the country per se, I can say. So it is going to help every player in this industry. There is no technology or license fees which we will have to pay or no royalties. It is a jointly developed technology, as we did in our silent pipe or in our, the PP pro pipe. And secondly, we will be making all fittings also in-house. So we will be not dependent on anyone to, source fittings or pay any royalties or long-term things. And it will be purely, everything would be owned and run and done by Astral itself. Sir, just to confirm, you are saying jointly developed. So we have been associated with any company, extrusion company, or it is just we are just- We are associated with a technical partner, but we are not at the liberty to disclose from where we are sourcing the machine or what the technology is, for the obvious reasons. Okay. Sir, like, we know that in many of the technology we follow from the best... and even though just wanted to look into, like, if you look at the Western countries and even China. So how they have been shaping up in this piping segment, this pipe segment specific, and is there any key with- We have anything with China at all? I'm sorry, I didn't get you. You are asking that how China is shaping up with this type of thing, but we are not aware, nor are we anywhere involved in anything to be bought from China. Okay, okay, okay. No issue. That is from myself. Thank you, sir, for explaining. Operator, this voice clarity is missing. We are not getting the right voice. Somewhere, something is missing, so can you check the line? Sure, sir. I'll check it out. Volume, inaudible up volume off. Sure, sir. The next question is from the line of Nitin Jain from Fairview. Please go ahead. Yes, thank you for the opportunity. So, the volume growth that you have reported this quarter is quite good. However, if you look at the volume value gap, which you indicated, it's around 8% for Astral. So, it's a little higher than, you know, what our peers have reported. So if you can elaborate on that and how we see this gap closing, going forward. And also, like, in the last two, three quarters, it's just an observation, like, there has been, you know, recurrence of one-off expenses, like, you know, the Jaipur event, then around INR 20 crore on branding in this quarter. So these are, I think they are impacting the margin. So where do we see this recurrence? Do we see it subsiding going forward? If you could elaborate. Thank you. Yeah, yeah, it is always will subside. See, we have already changed our branding strategy. We are moving out of, and have moved out of the brand ambassador model. So we are saving money on the brand ambassador side. We are saving money on the TV ad side. We have moved out of the TV ads also. We are focusing mostly on the on-ground activity and cricket. And in cricket, IPL and World Cup, both the events happened in the same quarter. Now, that is not in our hand because we have a tie-up with both of them. We have a contractual obligation to fulfill, so we have to do it. But then going ahead, going further, there are no major such events in plan, so obviously the cost will come down. Okay, so on a full year basis, it will be the same, is what you're trying to say? Yeah, yeah, yeah. It will come down only. It will not go up. There are no major events. Now, only the events that are going to come up will be the major exhibitions and such things which are essential for trade. No other big time activities are there in line. We have already finished them majorly. We are in the mode of sticking to our budget and guided figures. So be assured by the fiscal, it will come down by, but by the fiscal end, it will be in line with everything, what has been guided. Okay, fair enough. And if you could clarify on the volume value gap, like for Astral, it is 8%, but the peers have reported much lower numbers. So if you could elaborate on that. So basically, normally what happened that, Q1, Astral is normally of a CPVC-driven more company, but the Q1 is always loaded with the more of PVC product. And we opened up the plant in Guwahati and, this, Cuttack, where right now, the more of sale is coming from the PVC side. So because of that, the overall it is like that. And the PVC also, if you see Q1 and Q2, towards Y on Y, may be substantially low, but June only it started picking up sizably, but that couldn't been passed through to the market. So that was the reason that the gap was wide. But going forward, I don't think, in the coming quarter, the PVC will be high. The PVC will be more, so because of that, that gap will be narrow. Okay, that's helpful. And just to follow up on what you indicated, that you are unable to pass on the prices like most of the industry players. Was it because of increased competitive intensity or how is it shaping up? So normally what happened that everyone was sitting with the old inventory, and, secondly, quarter ending was there, so everybody was of the view that from July onward we will increase. And all the big players were of the view that we don't want to pass on to the market. So because of that, and then the July already, naturally, PVC price come down. So normally in PVC business, it doesn't happen like that, so quickly it goes up and so quickly it comes down. Normally, stabilize for some time and then either it goes up or it goes down. But this is the unique thing we are seeing for so many years. We have never seen that in a one month it is going up by 14, 15 rupees and the next month it is coming back to another 11, 12 rupees. This is not a normal phenomenon. Because of that, every big one, before it gets digested, it gets reversed. Otherwise, this kind of things we have not seen in the past. Normally, pass through takes place within a week time or max to max 10 days time. Okay, that's helpful. Thank you and all the best. Thank you. Thank you. The next question is from the line of Sonali Salgaonkar from Jefferies. Please go ahead. Thank you for the opportunity. My first question pertains to your volume growth again. I understand that we are majorly into plumbing and some part into, you know, DWC or infra. ... Could we get some kind of qualitative or quantitative color as to how much our volume growth has come from plumbing and how much from infra this quarter? And secondly, also, how much from urban versus tier one, tier two, et cetera? I think we don't share, Sonali, these kind of number in the calls, neither in the personal meetings also. These are the confidential things we don't discuss in the market. Okay, fair enough, sir. So my second question is a bit strategic in nature. This is regarding your new products and verticals. So we understand that you have started into bathware via greenfield and paints via an acquisition and then developed on that. So as of now, how much would be the distribution overlap of these individual new verticals with your core pipes business? And so how many more quarters do we foresee this added promotional cost to continue to strengthen our own brand? So, bathware has a bit of an overlap with the piping business. I would say about 50%-60% of our retailers sell bathware product. So right now, our distribution channel and our retail channel has gladly accepted our bathware product, and the numbers are moving in a very positive manner, and we will only grow upon them. When it comes to paints, there is a bit of an overlap between paints and the adhesive side. There is not a major overlap between the paints and the piping side of the business. However, there are a few piping distributors of ours who are into project business and into industrial business, who have shown their willingness to stock and sell this particular product line of ours. So, that is also a very positive sign for us. With regards to promotional spends, see, we are not doing major promotional spend in either of the two divisions, neither in bathware nor in paints. The promotional spends are basically mostly the exhibitions that we have to do for the bathware product, because it is a touch and feel kind of a product. And for paints, it will be mostly, you know, painter meets and meeting the influencer who are going to test and experiment with their products. So that is, both of these are very essential for the, these businesses, and this is the only thing that we will continue. We are not looking to do any big brand, branding campaigns or spend a lot of money building these two businesses as of yet. I would like to correct that in, faucets, we did acquire a plant at Jamnagar, which has a good capacity, good product, a latest plant also, and, with a good product line and which could help us to make all our faucets now. But it was on an asset value base, so we never paid for any brand value or anything. So we got it at a good price, and we have our own plant at Jamnagar. Understood. So very helpful to know. Sir, just lastly, wanted to clarify, are we or have we been a part of Nal Se Jal so far? For our PVC product, yes, we have supplied, and we are in a few states supplying to good contractors. It's a PVC-based product line, which we are seeing. But it will not be a sizable business for us because we are selling at our quality and our price. So it is not. Nal Se Jal is not a sizable business for us. We are only selling to the selected contractors who are buying it at our price, our terms, and our quality. Sure. So, sir, as of now, say, in FY 2024 or Q1, whatever you choose to, you know, let us know, what would be the revenue accretion from Nal Se Jal? And, may we ask which states are we a part of? So, Sonali, it will not be possible for us to give the exact number because we are selling it to our distributor. From distributor, it goes to the contractor or maybe site or maybe project directly, which is very difficult for us to know. We don't know exactly what will run. Even if that number will be there, it will be very low. It will be very minuscule. Understood, sir. Very clear. Thank you and all the best. Thank you. Thank you. Thank you. The next question is from the line of Praveen Sahay from Prabhudas Lilladher. Please go ahead. Yeah, hi, sir. Thank you for taking my question. I have only one question, that too related to your overall for quarter overall gross margin. So gross margin of 40.5%, which you have delivered for a quarter. So how you see this number the way forward? Would you be able to maintain this, or is there any one-off there in this quarter, or you will see this to improve in the down the next three quarters because your seasonality is there in the second half? So as far as improvement is concerned, I don't think we are already sitting on a very high margin, so there is no point to improve further from here. Even if it is coming down 1 or 2%, it's fine to us. But again, further improvement, I don't think we have a mindset to do like that. Rather, we will be more focusing to grow the business than the margin of GP. So we are at a very, very healthy margin. So our normal range is moving between 36%-40% kind of zone. Precisely now it is 40%+, but otherwise 36-39 kind of zone. So I think we will be happy with that kind of gross margin, but we'll be more interested to- One-off is there in this quarter or no? ... Which one? Any one-off is there in the gross margin for this quarter? Very low, very low, very low. Thank you, sir. All the best. Thank you. The next question is from the line of Shubham Agarwal from Axis Capital. Please go ahead. Hello. Hi, thank you for the question, Randy, and everyone. Just, okay, I have two, two questions. One is, can you quantify the one-time cost and the cost heads? Just to summarize, you've spoken of them over the call, but if you can just summarize what were the one-time costs in Q1 FY25. So, like, the main one-time cost was INR 20 crore for the branding, advertisement, exhibitions, and that related additional cost was there, which Kairav also explained. And I also initial remark said that because of few events happened at a one time, that's another additional INR 20 crore we have spent into that. And to some extent will be on the employee side also, which is very difficult to quantify. Exactly, we have not done the working, but some portion will be into that side also. But other than employee and all will be normally the, in the routine part of the business. Whenever you are doing any new activity, new vertical you are opening, new market you are opening, new plant you are opening, you have to incur these kind of things, and then the revenue follow later stage. But the major chunk was, I think, INR 20 crore from the branding side and advertisement side, and another few crore INR maybe on the this employee side. Right. And then this INR 20 crore is after considering the savings, let's say, that you would have done because you were not doing what you say, those ambassador, brand ambassador related spends. Despite that, you spent INR 20 crore extra, is what you're saying, and this will normalize over the next nine months. No, no, no, no. Brand ambassador and all contracts were there, so that cost was already there. So, no new cost. The contract said that the brand ambassador will not be there. Whatever the existing recurring cost, because we have to pay that in advance. So that will not be the reduction into that, right? So future will not be that cost. So to that extent, it will be a sizable saving in the coming year. Also, I would like to add that last year, whatever we had, the one-off event costs and all that also will not be there this year. Whatever we had, our twentieth anniversary celebration event costs, et cetera, that also will not be there going ahead in this year. So, all that cost will also be removed. That is why we said in the initial remark that you wait for the full year number. Definitely, you will see that the cost will be only in line of the growth only, not going to be high on a full year basis. Right. So I'll just move on to the second question, which is regarding the pipes business. So what I understand is that the whole, as you mentioned, that the industry was sitting on old PVC inventory and then they did not pass on. And at the same time, we are also hearing that the growth was subdued in June 2024. So is it right to say that there was some kind of caution in the industry players with respect to the volume growth of, PVC pipes, that they preferred volume over, you know, increasing, passing on the price increases to the market? Was there some kind of ambiguity with respect to the volume or the demand in June? And how is it fared in July and August? Normally, what happened in the month of June in a space manner, the price is go up. So in normal circumstances also, normally, every company gives one week to two week time to the distributor to manage the inventory. Okay? Mm-hmm. So everyone might have thought that, even if we are going to increase the price, we are going to get the benefit for one week on an average. So that is not going to affect too much to the company's profitability. And everyone was on the quarter-ending phase. So everyone was of the view that unnecessarily disturbing the price on a quarter-ending period is definitely going to unnecessarily create problem within the distributor term. So industry and not pass on that thing, but that is not the regular kind of phenomenon. And to add to Mr. Savlani, that in our market, if the giants do not pass on the price after a PVC rise to the market, then we also have to follow the same, because we cannot work in the opposite direction. Right. Basically, any price rise, it is very simple. Price rise in PVC takes a few days to pass on. But as we were about passing on the price rise, we don't say we have not passed on. There was a sudden product price which has come down, and because the reason is that a lot of PVC, which was earlier booked by traders at a lower price, all the material came together. And that material they wanted to offload for their capital churning, and it all happened very fast. Otherwise, if you see the way the PVC is globally, and, if you see the way the PVC raw materials are behaving, there is no reason the price has to come down. We had a detailed meeting with India's biggest PVC producer, and he explained that there is no reason that looking to the capacities and the VCM availability that the price at a lower bandwidth will remain. It will obviously improve as the stocks in the market are over. Got it. This is helpful. I just want to ask one thing on the bathware business. Mr. Agarwal, may we request you to return to the- Sure. Question queue for further questions? Thank you. Sure. The next question is from the line of Manan Madlani from KamayaKya Wealth Management. Please go ahead. Yeah, good day. Thank you for the opportunity. So my question is again, on the gross margin side. So this even for the time on the control you did, was it because of any change in the product mix? So if, if you see that compared to last quarter, it is not much change. Slightly improvement compared to the last quarter. Okay. There is no big, big bang increase. Okay? So- It was all-time high, that's why we say. But otherwise, last quarter also it was close to 40% than that. Correct. Okay. And, for O-PVC, how much gross margin will be there in that business? Any broad range will be fine. I think let we launch the product, and then we will be having more clarity. And we even have to see how the costing is getting worked out, because it's a new product. So we have to understand how the cost parameter is setting out, and based on that, we have to work out the realizations and all. Also, we have to see how other competitive product realizations are there. Then only we will be deciding the final pricing and all things. So I think we have to wait for another couple of quarter. October machines are coming, so hopefully November market commercial production will be there in the market or maybe quarter end, October end also. So we will be in a position to give you all the thing in Q4. Okay. On the adhesives side, how is the silicone pricing behaving? Silicon, now, I think it is comparatively stable. Not, not big, big, volatility right now. Okay. Yeah, thanks. That's it from us. Thank you all. Thank you. Thank you. Participants are requested to kindly restrict your questions to one per participant. We have the next question on the line of Ritesh Shah from Investec. Please go ahead. Hello? Yes, Ritesh. Yeah. Hi, sir. One pointed question. You have given guidance on EBITDA margin on P&L today for both plumbing as well as other sales. Simple question is: What is the absolute employed cost and other expenses that we plan for FY25? We have already communicated that all will be in line with the percentage margin, whatever was last year. So does it mean 7.8% of sales and 14.6% of sales that is what we are looking at, irrespective of the changes in resin price and the revenues? Correct. Correct. No, if the resin price goes down, then the percentage can go up also. Correct. So that is the reason, sir, why I'm asking what is the absolute number? And the reason to stress upon this, for the reason that is in Q4, is a lot of focus on cost rationalization. And in Q1 again, we see a bump, which we understand that it was perfectly logical and it was expected. So that's why I'm asking, like, at the start of the year, you emphasized on having full year budgets. So what is the employee cost that we are looking at on a full year basis, and likewise on the other expenses? It is very difficult to give you the absolute number, Ritesh. Normally, every quarter-on-quarter, we monitor the things, and based on that, the new recruitment plan getting executed. Budget is always subject to certain number. If the numbers are moving in a certain direction, then we may add few, or if it is not like that, we may reduce also. It is very difficult to give you the absolute figure in the beginning of the year. It keeps changing based on the requirement of the business and based on the growth of the business. Very, very difficult for us to give you that, "Okay, we are going to end the year in this number." That is never going to be the right number also. Even if I communicate, it is not going to be the right, because it keeps fluctuating. Well, you know, business doesn't work like that way. If suppose my business give me extraordinary... I'm giving you an example. If my paints business give me extraordinary number, then I can increase that staff strength also. I can open the new city also. So in that case, my absolute number will not be matching. Same thing, now Hyderabad plant is getting opened up. Now, suppose Hyderabad plant is giving me extraordinary number in the beginning stage, I can add new staff over there also. So it is very, very difficult to quantify on an absolute basis. That's why we said that you have to monitor on the basis of percentage rather than on an absolute number basis. All right. So if I just, what you indicated on the guidance, I'm on the same question. Let me just please finish. You have indicated a guidance of 16%-18% for plumbing and 14%-16% for other sales. Is that right, sir? Yes, it is the right number. Right. It is the which I have given it for the- Let me just- I have given it for the India operation, not the UK. Correct. Yes. So let me just finish the question. Yeah. So when we have given this EBITDA margin guidance, hypothetically, if the resin prices go down by INR 15 for the rest of the year, my simple question is: Will the management be flexible to cut down on the costs, or we will still continue to go out with the cost? And then, basically, how, how should one understand the sensitivity of the margin profile? So naturally, cost will come down because we have to be sensible. If my business is not growing, if business is not giving me the right thing, then I have to reduce my cost. That is what we have done in the past. You see our history, 2007, we have got it listed. Today we are in 2024, last 17 years, we have done like that way only. We are always trying to adjust the thing. When the quarters are good, we are working in a different way. If, if the quarters are not in our favor, we reduce also.... So that is what the business, because we cannot keep spending the money even if the business is not growing. That is not the right way to manage the things. Sure. I just have a related question for Sandeep bhai. In short, what we would like to communicate very clearly is that if there are challenges coming up in the polymer, we will be accordingly taking care to see that by year-end, we fall in the right number, and which if need be, we'll start working and correcting from quarters, whether it is the other expense, whether it is the branding expense or whether any other expenses are there. Secondly, yeah, manpower-wise also, we will be working judiciously to see wherever... But when you have two new things which are firing up, the same thing happened in the past when we acquired Resinova also. Because now Resinova is proving itself, growing, everything is happening. So there are other initiatives also we have taken in adhesive business. We are opening many new markets and avenue which give us this three quarters, and we are again communicating when we meet. But very, very clearly, as Hiranand Savlani said, if the challenges come up in growth or in numbers or in polymers or chemicals or anywhere, we will be obviously cutting on the cost and see that we are maintaining our guidelines, and we will be very much conscious about our numbers and figures and EBITDA. So we are as a family and we are as all of us, always cautiously working and to see that things move in the right direction. Look at the COVID period, how quickly we reduced the cost. So we are understanding that because end of the day, we are the trustee of investors' money, so we have to judiciously work. We cannot work what we like, because ultimately we have to respect each other. Thank you. So based on the requirement of the business, we will take to. Okay. Please go on. We have the next question on the line of Akash. Please go ahead. Yeah. Hi, am I audible? Yes, we can hear you. Yes. Yes, yes. Yeah. Hi, sir. Thank you for the opportunity. Sir, just wanted to ask, what is the gross margin in adhesives business in India? India gross margin is 45%. What was that same quarter last year? Must be about 43. Sure. And sir, what is the current plastic piping capacity, and how do you see it increasing over the next two years? Capacity, current capacity, let me check my paper and give you the exact number. It is about 334,000 metric tons. Yeah, and say by FY 25, what will it be? I, I think I have to work out because a lot of expansion activity is happening at Hyderabad, then Ghiloth, then Hosur also, and then Dholka also. Every plant, some expansion activity is going on because we are expanding the capacity everywhere. So I think maybe you can call me later, I can give you the tentative number, what will be the year-end capacity. Sure. Sure, sir. Thank you. Thank you, sir. Thank you. Thank you. We have the next question on the line of Amit Purohit from Elara Capital. Please go ahead. Yes, sir. Thank you for the opportunity. Sir, just one on the realization for the plumbing business. So, if I look at, you indicated that second half you would see improvement, that is largely to do with the base effects, which will play out, because plumbing cost had come down. Sorry, PVC prices have come down during that period. So, mid to high single digit growth, if the prices remain stable as of now, should be assumed right? And the second, I wanted to check, is sequentially, because of the inferior mix, and also you were saying that Q1 was looking low. So from here on, if prices remain same, then, we should see realizations improving for our plumbing business. Is that right, sir? Yes, sir, it's the right understanding. If even if the polymer price remains same, the coming quarter realization will be much better because it will be more loaded toward the plumbing side of the business than the PVC side of the business. Every sequentially quarter, it goes up, and Q4 is always better. Okay. So on a full year basis, there is a possibility that we may have 1%-2%, even if the pricing remains stable, the realization could be better just because of YOY being lower in the second half last year. Oh, no, it will be more than 1.2%. Okay. Okay. The full year margins for the plumbing business, you are indicating 16%-18% percentage margin? Correct. Correct. Correct, correct. Oh, okay. Okay. Thank you. Thank you. That was the last question. I would now like to hand the conference over to Mr. Keshav Lahoti for closing comments. Keshav, you are there? Hello? Hello. Hello, operator, can you hear us? Yes, sir, we can hear you. Okay, I think Keshav is not there, so we can conclude the call. Let Sandeep bhai to say the closing remarks. So thank you, everyone, for joining the Q1 earnings call. We will again get connected after the Q2 call, and thanks for your support. Anything which you want to ask or unanswered, you are always welcome to stay in touch with us. Thank you very much, everyone. Thank you. Thank you, everyone. Thank you. If anything is left out, any question, please call me on my mobile number. Thank you so much. Thank you. Thank you. Thank you, sir. Thank you. On behalf of HDFC Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.