Ladies and gentlemen, good day and welcome to Astral Limited's Q1 FY 2024 Conference Call hosted by Nuvama Wealth Management. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star, then zero, or you can call on four. Please note that this conference is now being recorded. I now hand the conference over to Ms. Sneha Talreja from Nuvama Wealth Management. Thank you, and over to you, ma'am. Thank you, Huda. Hello everyone and good evening. Thank you all for joining the conference call. Today we have with us Mr. Kairav Engineer, Executive Director, and Mr. Hiranand Savlani, Executive Director and CFO. I'll hand over the call to Mr. Kairav for his initial opening remarks, which we can open the floor for Q&A. Over to you, sir. Thanks a lot for the opportunity. Thank you, Sneha, for hosting the call. Good afternoon everyone and welcome to the Q1 FY 2026 earnings call. I will go over all the different business verticals one by one. We'll start with the pipe business. Volume was flat in Q1 due to low demand, early monsoon, and low government spends. Now it looks like the volume has started picking up July onwards, and we are confident of a double-digit growth this year as per our initial guidance. PVC anti-dumping duty can be announced in this quarter, and it will aid in volume growth and value growth as well once it's announced. We expect some uptick in PVC prices. One can say safely that the PVC has more or less bottomed out. The Kanpur plant will be commercially ready. It will be ready for commercial production in Q3. It will commence in a phased manner, starting with our tank and PVC products first, and it will assist in the growth of our north markets, especially markets of UP, Bihar, and certain pockets of the eastern NCR. All PVC orders have started coming in now. The products have settled. All regulatory approvals are in place, and we expect that once the government spending starts again in a proper manner, we expect good orders in the OPVC lines as well. In the new product pipeline, we are working on multiple new products at the moment, several high-tech systems, several systems that will be the first ones to come to India, and we will gradually announce the same as we get ready to launch them one by one. Our Hyderabad plant is now settled and is gearing up, and in the coming quarter, one can see good volume benefit from our Hyderabad plant. As far as Bathware goes, the response is very positive for Astral Bathware products. Our project order book is healthy, and our order book is growing quarter on quarter. We achieved 27% growth in Bathware in quarter one, and we'll try to maintain a similar growth momentum in the coming quarters as well. We are launching some very good and high-quality products in our Bathware business. They will not only aid in growth but also in the terms of brand unionization. As far as the adhesive business goes, the India business is performing good for us. We grew by 9% in the first quarter, and with our July numbers in the first four-month basis, we are close to our guidance of 15%- 16%. Margins are within our guided limits of 14%-1 6% in the adhesive business. U.K business has stabilized and is picking up with 7% growth in quarter one and a 5.5% EBITDA. We have appointed a new person to lead the U.K business and come with a very rich industry experience. You will see a good turnaround in the U.K business in the coming quarters. As far as the paint business goes, the growth journey has started. For the first time after acquisition, we have delivered a 20% growth in the paint business, and this is mainly due to the Astral brand paint launches in certain territories across India. We will aim for a similar growth trajectory in the paint business in the coming quarters. Now, coming to the acquisition of Nexelon and the question of the CPVC plants, we had been doing R&D for three years, and I'm very happy to announce that we have developed our in-house technology to manufacture CPVC resin along with the technical assistance from our technical partner in the project. We are going to put up a 40,000 metric ton capacity. That is a total investment of INR 150 crore, where Astral's share in the investment will be INR 120 crore for 80% equity. Our first step in the backward journey, as you all are aware, was the compounding of CPVC, which we started doing a few years ago. This is now the second step in our backward journey. By doing this, we will be able to grow our volumes and increase our margins at the same time. This plant will commission by Q2 FY 2027. Q1 was slow for all building material industry, but Q2 is showing good promise, and we are confident of achieving our guided numbers of double-digit growth in this financial year. Now I will hand over to Mr. Hiranand Savlani, who will go over some financials. Welcome to all for this earnings call of Q1 FY 2026. Results and price slides are in front of you. I want to just highlight the key sales number and the margin number. The plumbing division last year was INR 1,013 crore, which this year is INR 953 crore, registering a degrowth of 5.85%. Adhesive India business last year it was INR 239 crore. This year it is INR 261 crore, registering a growth of 9.15%. Adhesive business U.K last year it was INR 89 crore. This year it is INR 96 crore, so it's close to about 7% growth. Paint business last year it was INR 41.5 crore. This year it is INR 50 crore, registering a growth of 20.72%. Bathware business last year it was INR 26 crore. This year it is INR 33 crore, so close to about 27% kind of growth. As far as EBITDA is concerned, plumbing division last year it was INR 181 crore. This year it is INR 156 crore. Last year it was 17.93%. Now this year it is 16.41%. Adhesive business India last year it was INR 38 crore. This year it is INR 36.6 crore. In percentage terms, last year it was 16%. Now this year it is 14%. Adhesive business U.K last year it was INR 2.2 crore, INR 2.46 crore, and this year it is 20.21%. If I remove the forex effect, the EBITDA comes to 5.4%. Paint business last year it was INR 4 crore. This year it is INR 0.7 crore. Last year percentage was 9.64%. This year it is 1.4%. Overall EBITDA on a consolidated basis was 16.36% last year. This year it is 14.25%, so close to about 2% growth in the EBITDA level. The biggest reason for the drop was the inventory loss, which all the industry players are suffering because of the drop in the polymer price, which was in the tune of INR 25 crore. If we remove that effect, I think EBITDA is more or less in the similar line as last year. In our industry, particularly for Astral, Q1 is always loaded with more PVC volume than the CPVC volume because in Q1, the agriculture demand will always be there. This year monsoon was early, which slowed down the construction activity, the CPVC volume, and the value-added products were low. You can see there is a drop in the EBITDA. If I remove that effect of inventory losses, still it is much, much better than the industry. As Kairav communicated, we are very happy that now U.K is coming to the growth path again after almost the last three four quarters we were suffering the challenges. Now it has delivered a growth of 7% and the EBITDA margin of 5.4%. Similarly, our new businesses are also contributing now in a good way. Bathware has contributed 27% revenue. Similarly, paint first time after acquisition has delivered a 20% kind of top line growth. We are confident that in the coming time, we are expecting the paint to deliver good number, at least 20% kind of top line growth for the full year. Now coming to our acquisition of CPVC resin plant. This is the game changer announcement which Astral Limited has done yesterday for entering into CPVC resin manufacturing business. Before that, I want to take you to the year 2015 when Astral went into the backward integration for making its own compound and we stopped purchasing CPVC compound from Lubrizol. You must be aware that with this decision, Astral Limited has not only improved the volume, but Astral has improved the EBITDA margin of between 3%- 4%. All these numbers are there in the history. I can give you some numbers which you can verify from our earlier balance sheets and from the press release. In October 2016, when we came out from the Lubrizol and started our own backward integration of compound, that time in FY 2016, our EBITDA was 12.38%. In FY 2016, EBITDA was 12.38%, which went up to 14.6% in FY 2017. Almost 2%, more than 2% jump in one year. In FY 2018, it further jumped to 15.39%. In FY 2019, it further jumped to 16.46%. Now we are stabilizing between 16%-1 8%. You can understand the jump of 3%- 4% in EBITDA because of just backward integration in the compounding technologies. Now, as Kairav communicated, we are moving to the second round of backward integration, which we were thinking for long, but we were working for the last three years and which we have completed now. What was the rationale of going into the CPVC manufacturing plant? The first rationale was, as you know, Astral is a quality product. I'm sure you must be knowing that in recent times, a lot of deterioration is happening into the CPVC piping industry. Many players are supplying the quality which is below the mark in the market, and that is where a lot of failures are coming. Astral always believes in the quality. To maintain the consistency of the quality, the steps were needed that why not we develop our own manufacturing of CPVC resin so that we can have a consistency of the quality. Today, Indian manufacturers are also manufacturing CPVC resin, but we all know that the quality standards are not as per the international level. Because of that, a lot of people are facing challenges. Though there is a little lower price resin, the quality is not up to the mark. Considering that in mind and considering our long-term security of the quality, we thought that why not we should think on that side. We were working for the last three years on R&D. We have done a lot of R&D on that, and we have done a lot of trial batches in our pilot plant. After success of that, we have decided to come into this business. Secondly, when there is a narrow gap between CPVC and the PVC, at that time, normally the CPVC volumes pick up. Now today, if you see the CPVC and PVC price gap is narrowed down, there is a high probability that there will be a conversion of many consumers from PVC to CPVC. That is going to increase the volume for the industry in a big way in the coming times. The way polymer price has dropped, there is a high probability that many customers will move from PVC to CPVC in the coming times. The reason is that when Astral launched CPVC in the beginning of the journey, Astral adopted CTS standard, which is the copper tube size standard. In PVC, the standard is ASTM. The gap between ASTM and the CTS standard is almost 20%- 30% kind of weight difference. The pipe will be lighter weight in CPVC versus heavy weight in the PVC pipe. Because of that end-use level pipe, the value is coming down for the CPVC. That is going to help in a big way in the coming times if this gap is going to become narrow, which will increase the volume substantially. In that case, if Astral has their own manufacturing plant, Astral can take the highest advantage of that, not only in terms of volume, we are definitely going to gain good market share, but also to improve our margin. Today, if you see the CPVC market, the other players are there, you can see their margins also. Their EBITDA margins are in the range of 25%- 30%, which is a huge margin. Even if we conservatively pick up that margin, we can even downgrade that margin also. Then also, it is going to be a big saving to Astral to manufacture its own. The other biggest advantage to Astral is that if you compare the investment, if you compare the investment what Lubrizol has done, the announcement of CPVC plant, you see the Japanese players' investment, even the current local players, which they have done the investment into the CPVC plant, compared to that, the technology which Astral has developed, our investments are very, very low. We are going to invest INR 150 crore and going to put up the 40,000 metric ton capacity. That is going to be a very big benefit to Astral in terms of return. Now, if you consider 20%-25% even conservative EBITDA margin also, you can work out your payback period. Payback period will be much, much softer. Not only payback period, but Astral's investment in CPVC plant for us, it is a zero investment. The reason is that today Astral is holding close to about three months raw material inventory because we are dependent on imported CPVC. Because of that, we have to hold a higher raw material. On an average, our inventory will be 90 days inventory. On an average, roughly about you can say 12,000 metric tons raw material is going to be there in the system. If I convert into the current price, then the raw material itself is contributing INR 120-INR 130 crore of investment in working capital. If I start my own manufacturing plant, then the inventory is not required because it will be near to my plant. There is no need to hold that much of inventory. My inventory level is going to come drastically drop, which will make my plant free. It is a big, big advantage for the long term. That's why I used in the beginning, it's a game changer for Astral. This is the biggest advantage why Astral took a decision and not overnight Rio Techens decision. After working three years, matching the quality, what we originally did in 2016, there were a lot of hundreds of trials we took, and then we took the compound decision. Similarly, here also, last two years, we have taken a lot of trials in our pilot project, and then after a successful trial, we have taken to this decision. Today we can proudly say Astral's investment will be lowest in the industry. Not only investment low, but our costing will also be lowest in the industry because the way we have done the hard work in the backward type for the last two and a half years to three years, that has given us a lot of opportunity to reduce the cost. That's today, I'm only just saying, but after one year, once this plant will be commissioned, that time you will see that will be converted into the actual number. Now, this rationale, we have taken this call. If you have any questions, I will be happy to answer everyone. I think Kairav has covered about all the other businesses. Now we are opening up the floor for the Q&A. Thank you so much. Thank you very much. We will now begin with the question- and- answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press Star and two. Participants are requested to use handsets by asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. I request each participant to ask two questions. The first question is from the line of Sravan Shah from Dolat Capital. Please go ahead. Thank you, sir. Sir, just continuing on the CPVC resin manufacturing. Two things are to understand. First, let's say from the third quarter of FY 2027, once the plant will be operational, on a full-year basis, as you have mentioned, the margin to improve. For us as a plumbing division, how one can look at the margin improvement? Currently, whatever 16.5% is there in the first quarter, can we see the margin moving to a 20% + once it will be on a yearly basis? That is first. Second is, why 40,000? Will Will this suffice the entire requirement by FY 2027 or FY 2028? Can we also have a plan to increase the capacity to 100% of our requirement? Coming to your first question, this margin expansion will definitely be there. Exactly how much will be there, the market situation will decide because we have to take a call at that point of time on how much we want to pass on to the market to gain the volume very fast. Secondly, how much we want to retain to improve our margin. We are going to split the profit into volume growth as well as into the margin growth. That will be decided once the actual production will be ready with us and actual working will be there at that point of time. Margins will be much, much better than what you are paying to expect. Regarding your second question, 40,000 metric tons plant will not be definitely sufficient for us. Because the way we are expecting the growth in the coming times, we may be requiring more capacity in the future. Right now, I think to start with, 40,000 metric tons is more than enough. The balance we can source from our Japanese partner, which won't be out higher. At the time when it is required, at that time, we will think for the further expansion. Let us first establish 40,000 metric tons and whatever the number which we have done onwards. When the actual number will come, we want to see how the realistic number is there. Based on that, we will take that decision. I can say that the margin will definitely expand. Second, sir, on the volume front, the quarter was muted. If you can explain in terms of the, for us, the CPVC in terms of the growth and then the industry growth, and now July 30% growth that we are seeing, also double digits, and we are seeing a guidance for FY 2026. The ask rate is 13%. Does that mean once the ADD will come, this double digit could be even 15%-20% kind of a number is also possible? See, there are two things. One is that, you know, double digit can be anything. It could be 10%, also 12%, also 15%, also 20%. There are many different parameters at play. ADD is not the only parameter. Once the ADD comes, price will settle at a certain level. After that, we need BIS for the price to even move further up. We also need the government spending to increase in the system. We also need the building material segment as a whole, especially on the construction front. At the developer level, the demand should also go up. It is a combination of multiple factors. Looking at what we are seeing, the trend as per the second quarter, we are confident that, you know, double digit growth as per our initial guidance during our analysis, whatever we have guided, that much we can achieve at the end of this financial year. And I can add to that, if all will be in favor, like suppose anti-dumping come, BIS come, then you are right. We can go up to 15% or will not be a big change. Okay, okay, got it. Lastly, sir, a CapEx for Q1 and for full year and maybe a next year if you can help because now the additional CapEx of INR 120 crore is there. This year, we have guided around INR 300 crore kind of CapEx because the Kanpur plant building is ready. The market delivery will start. In Q1, we have spent only INR 50 crore on the CapEx. Next year, I think the whole CapEx will be there because we are not going to expand any capacity for the next two or three years in the pipe category, so there will be hardly any CapEx. This INR 120 crore, yes, definitely it will be there, but that will be over a period of 12 months. Some CapEx will come this year and some will come next year because first building level stage investment will be there, then the machinery level will be there. Over a period of 12 months, we are going to par this INR 120 crore. Okay. Lastly, if you can allow me, U.K adjusted now the post of forex 5.2% margin. Can we now see this will be the kind of a minimum and we can see an improvement in the margin? Historically, U.K has been an 8%- 10% EBITDA company. Margins will eventually settle in that 8%- 10% range, EBITDA range for the U.K company. Along with margins, there also we are going to focus on the top line growth as well. Got it, sir. Thank you, sir. All the best. Thank you. Thank you. Thank you. The next question is from the line of Sujit Jain from Bajaj Life. Please go ahead. Yeah, hi, Kairav and Savlani. encouraging commentary. A few points, you can note them down and give me one-liners. If I look at data for the last 14 consecutive quarters, our volume growth versus Supreme, which is 3x our price, we have lagged consistently. Overseas adhesive business, as we've seen at least for many years, 10 consecutive quarters, it has been weak. 7% growth, but there could be some currency depreciation for this quarter. Paints, when I look at it, it's encouraging commentary, but when we acquired the company, it was close to INR 200 crore, and last year also it closed at INR 197 crore. When we acquired, it was INR 215 crore. Even if you do 20% growth, it will be INR 220 crore or slightly higher than that this year. Finally, our ROE has been consistently coming down. If you can address all of this, thank you. Let me address one by one. The first comment on the volume comparison with our competitor, look at the competitor's number. If you see the major chunk of volume came from the Jal Jeevan Mission. In Jal Jeevan was not there because we are not manufacturing HDPE pipe. Two years, there was a huge spending by the government of India, particularly three elections. Sizable spending because the government wanted to stock the water that we have done so much of work. Sizable growth has come from that segment. Because of that, if you are comparing, then definitely yes, volumes were very high. Our presence was not there into that segment. Now, regarding your second question on paint side, yes, we have communicated in the past also that we were working on the strategy because we wanted to launch the Astral brand and we were doing a lot of homework at the back office level. I think now we are trying to settle down because we have worked out certain strategies and now that is going to play in the market. That's why we are confidently saying that we will be able to deliver 20% kind of growth because now the senior person has also joined having rich experience from the similar industries. That is going to help us in the coming times because the moment you launch the new brand, a lot of spending will be there. On a INR 200 crore top line, if you are spending even INR 10 crore for any marketing experience or anything, it worked out to be 5%. Because of that, margins were also under pressure. Secondly, you also know that the industry is also passing through the challenge of one of the competitors who has created a lot of issues in the market, which I don't want to discuss in everything. That has also created the pressure on the margins for the entire industry. That has also affected and that's also given us the more time to take that kind of strategical decision. Now I think we are ready. We have a team which is also ready. That's why we can confidently say that this year we will be able to grow minimum 20%. We will be near to INR 240 crore kind of run rate this year. Going forward, we will give again the guidance for the next year. I think now things are settling down and we will definitely going to grow. Once the volume will pick up, definitely the margins will also improve a lot in the coming times. What was your third question? I missed that part. This was regarding overseas adhesive business, 7% growth. If I look at at least 10 quarters later, that is huge. Even for this quarter, 7% growth in sales could be on the back of currency depreciation in that geography. This business has continuously been in the WIP mode. When do we finally get our act together here? I told you that this year we are confident that we will be back to the normal. I am very happy to share with you that because top line growth was missing for the last four or five quarters, overheads were very high. There was a tremendous pressure on the EBITDA margin. In the last quarter, you can say the gross profit margin was highest in the last four years. There is an improvement, but it is not converted fully into the EBITDA. EBITDA has come to 5.4% only. In the coming quarter, we are confident that it is going to definitely help us in the improvement in the EBITDA also. At the same time, top line growth also. We have appointed a very senior person having very rich experience of more than 25 years in the industry to take charge of our U.K business. He has just taken charge, and that is the reason that today Mr. Sandeep Engineer is not on the call because he is with him in the U.K to make him understand the entire company and how we have grown up this company and what is going to be a strategy for the growth. All these things are going to be discussed over there. We are confident that you will see in the coming quarter, things will improve. There was continued pressure on ROE.. Yes, definitely. You are absolutely right. We are also very worried about that thing also. The reason is that in the last three years, if you see, we have spent close to about INR 1.5 billion of CapEx. This INR 1.5 billion of CapEx, unfortunately, when we have spent at that time, the market scenario is not in our favor because polymer is going down. Because of that, continuous pressure is coming on the realization side. The building material is passing through a challenging time. Actual utilization of this INR 1.5 billion has not been there in the system. In the next coming two to three years' time, you will see CapEx will be on hold and the utilization will improve. That definitely is going to help to improve our ROI and ROCs more. We are quite confident the moment we will stop that CapEx cycle, it is definitely going to help us to improve our markets and all this. When I look at data, when I look at data, you start the year with a CapEx guidance and you end up doing at least 2x or higher CapEx by the end of the year. I think capital efficiency is something you should really focus on. No, I fully agree with you because a lot of decentralization at the time was going on. When you enter into the market at that time, you realize that certain things are needed. Because of that, you have to change your CapEx plans also. I can assure you that particularly in the five divisions, this year will be the last year for the CapEx. After that, two to three years will be only maintenance-related CapEx. You will see a lot of improvements because ultimately, you know, the company has already spent money. The benefits always for the CapEx come at a later stage. It is unfortunate that the market condition was not in our favor. If the polymer did not have dropped by 25% kind of level in the last two years, then this situation could not have arisen. Overheads keep growing every year. If your top line doesn't grow, it always gives you the pressure on the margin. Because of that, the return ratios are getting disturbed. If polymer could not have fallen so high, then this situation might not have arisen. Your point is valid, and we respect that part and will give you confidence that in the coming quarter, you will see continuous improvement into that. Thank you. I'll come back from the queue. Thank you. Thank you. Thank you. The Thank you. The next question is from the line of Sneha Talreja from Nuvama Wealth Management. Please go ahead. Hi, good evening, sir. Just two questions from my end. Firstly, in your opening remarks, you mentioned about improving demand scenario. I wanted some update on that. Is it on the retail level, project level, building material side? Where is the improvement that is actually seen? Is it on the pan-India level, certain geography? Some flavor there will be helpful. Secondly, on your CPVC resin plant, I just wanted to understand your procurement strategy because you will be, of course, procuring PVC and flooring both from outside. Given there will be some time, QC implementation on PVC, how are you seeing procurement strategy for both, PVC as well as, where are you looking at procuring flooring from? I think these are the two from my end. I will tell you on the demand side, basically. See, demand side, pan-India demand definitely has not opened up. It is certain pockets and geographies are doing better, and certain pockets and geographies are still in the improvement stage. Looking into this festive period, especially Raksha Bandhan, Janmashtami, and the long weekend of 15th August, we are hopeful that once all these festive times pass, September is looking to be very promising in terms of demand as of today's trend. I may be wrong. Things may change, but as of today's trend, we feel that from September, the market has to open because this year Diwali is in the middle of the October month. Most of the home improvement activity usually starts two months prior to the Diwali period, two or one and a half months prior. We feel that after this festive period, from the third week of August, things should improve on a pan-India basis in terms of demand. Second question, you are talking about the procurement of PVC for our CPVC plants. I'm very pleased to tell you that in the three years of the R&D that we have done, we have worked with very different types of PVC grades, and we have done the chlorination of different types of PVC grades, domestic as well as international. We are confident of using different types of PVC grades as per our wish and desire and as per the market pricing to make our CPVC. We are not limited to a single PVC supplier for our CPVC plant. We have done R&D for very different types of grades, for different PVC that are coming from China, coming from Korea, coming from the U.S., coming from the local manufacturers. A lot of R&D has been done. On the PVC procurement front, we are not afraid or scared of the anti-dumping scenario at all. Now, as far as the chlorine procurement goes, chlorine is right now in the negative, and surplus is available. We have to procure the liquid chlorine. We will procure the liquid chlorine. There are many chlorine people in the state of Gujarat who are ready to give the liquid chlorine to us. Even the chlorine procurement, there is no problem at all. I can add what Kairav said that the demand scenario, we have given the July number. We are not communicating investors that 30% volume has come. That will be the benchmark in the going forward. This is what the July number, even if I give the base effect also, then also it looks better. Even if I consider the last year's little negative effect due to volume, then also it is looking better. We have to wait for some more time because we cannot just jump in on the one-month beige and say that no, no, no, no, going forward, everything is looking rosy. I request every investor that give us some time. We will be the most vocal company. We will be communicating to you regularly on every con call, and we are meeting every investor in the conferences also. We will communicate what is the ground reality. July was looking promising, and August so far is going good. Yes, rightly Kairav said that festive seasons have started. We have to wait and watch whether it is going to give the effect in the coming time or not. That will be only assessed at the end of September. If for the entire quarter, the numbers are looking good, then we will communicate in our next phone call. We cannot say on the basis of one month that these are the numbers which are going to be for the rest of the year. Let us wait for some time. Secondly, PVC side, absolutely, we don't see any problem. You all are aware that India is going to increase the capacity of PVC local manufacturing in a substantial manner. Both our big giant companies of India are increasing the capacity in a big way, whether it is the Reliance or it is the Adani. Absolutely nothing to worry on the PVC procurement side. Chlorine is also ample available in the Gujarat state. We have done all this homework because last three years we were working on that. This is not the decision which Astral has taken overnight. We are quite confident that these kinds of things are not good. Even if there is a challenge at the local level, we are prepared for the international PVC. Also, we have done all this trial in our pilot plant. Next question. Thank you, sir. Thank you. The next question is from the line of Praveen Sahai from PL Capital. Please go ahead. Thank you for the opportunity. There are two questions from my side. One is related to the employee expenses for a quarter, which I can see has increased. What's the reason for that? Are we continuing to be at this level? We have communicated earlier also that because of continuous falling polymer prices, the top line is getting eroded. Because of that, the percentage is going up. At the absolute level, it is going very negligible, but at the percentage level it is showing very high because we have entered into multiple new businesses. Because of that, we have to appoint new people not only on the ground level, but at the senior level also. Now, base effect is going to play its role from the coming quarter onwards, and you will see there will be a drop in the employee cost. It is only a problem of temporary nature because new businesses' contribution, the moment it will start growing up. Like Bathware, we communicated that we have grown 27%. Paint, we have grown 20%. These kinds of contributions will keep coming in the coming quarter. This employee cost will definitely come down in the coming quarters. Thank you. Next question, sir. By year end, how is our capacity going to be? Right now, it is 387,000 metric tons. Where are you seeing at the end of the year? I think another 25,000 metric tons. kind of will be added in the Kanpur in the first phase. If needed, we will add more also. Buildings will be ready for all the plants. Like Hyderabad also, we have completed the building. Only if and when needed, we will add the machinery, so that CapEx will be very low. Okay, thank you, sir. Thank you. The next question is from the line of Pujan Shah from Molecule Ventures. Please go ahead. Hello. No, sir. Can you please be a little louder? Yes, please. Am I audible now? Yes. Oh, much better. Yes, yes. My first question pertains to the current CPVC procurement. As we don't have any backward integration of our CPVC resin, from where do we procure the CPVC right now? After the backward integration, what% of our total consumption will be used as captive consumption there? Right now, we are procuring our CPVC from Sekisui Japan, and some from DCW at the local level. We are procuring from multiple sources. We are procuring good quality CPVC resin. After this plant completion, it will be based on the demand scenario. At that point in time, we will be able to answer how much of our internal capacity, internal demand, does this 40,000 ton resin suffice. 40,000 is just the resin. On top of that, I have to do the compounding. When you do the compounding, another weight is added. That 40,000 when converted to compound becomes almost 46,000 or 47,000 tons. Once this plant is complete and 40,000 is on a 100% utilization basis, the number is there. We have to see when the plant commences and how much yield we are getting and how the plant stabilizes because CPVC plant to stabilize also takes some time. It does not happen directly because the process is a very volatile process. Based on that, we will be able to give you an answer how much of our internal consumption this plant will be going to provide. Got it, sir. My second question is, as we are investing one sister, we are investing INR 120 crore after INR 150 crore of the total stake shares. 20% share will be, I think, invested by a Japanese company. What are the things they have been bringing onto the table to just we are sharing that our 20% share to them? Why are we going? 20% is not by any Japanese company. 20% is our technical partner. He is an Indian nationalist also. He has worked on this particular technology along with our team. He is bringing for the balance 20%, he's bringing his own capital into the business. Okay. Got it. My last question would be in the opening session. Sorry to interrupt, Mr. Sir, but I request you to rejoin the queue for the follow-up questions. Thank you. The next question is from the line of Keshav Lahoti from HDFC Securities. Please go ahead. Thank you for the opportunity. Sir, as you have highlighted your adversarial four months growth, possibly can you do the same for the pipe division also? Secondly, in June, the growth has changed. It is not at the cost of margin, right? Nothing has changed on the strategy front. Nothing cost-wise. Private benefit strategies have been adopted by Astral. Margin is always of a priority to us. We are not going to cut for this type of growth. We are not going to cut our margins and do the business. Whatever margin for the piping business, we have guided 16%- 18%. We have always guided the investor community that we will try for the 16%- 18% EBITDA in the piping business. I think we will stick to our guidance of 16%- 18% for the annual basis. Okay. If you can comment on the plumbing growth? No, no. For the sake of growth, if sir, even if margins 1% or 2% lesser, we don't mind it. As far as the demand is there in the market and we think that we are able to get the good growth by dropping 1% or 2% margin, I think we will be happy to do that thing. It is not a thumb rule that we want to work on this and we don't want to sacrifice the order below that margin. If we see that there is a demand in the market, then we are ready to sacrifice our margins also and we'll be giving the first priority to the volume, not to the margin. Unnecessary cutting the price and disturbing the market, that is not the mindset of Astral. If we surely see that there is a growth by reducing 1% or 2% margin, if we are getting extra growth, yes, definitely we will try first to that thing. Got it. Sir, two months from the volume growth, what I'm trying to understand, how is the June basis? Is it more to do with basis at how much the 30% growth number? This 30% is considered on a year-over-year basis. Last July, we are comparing the first. Right. What I'm trying to understand is, is it the base was very rich or the number is looking 30% growth or possibly, as you highlighted, additive growth for the first two months? Can you do the same for the plumbing volume growth for the first two months? What is the? I don't have a particular month's number handy with me, but your first phone call, definitely you call me, I will share that number to you. Sure. Thank you, sir. Perfect. Thank you. The next question is from the line of Praneet, who is an individual investor. Please go ahead. Praneet, are you? Sorry for the delay. I was wondering in terms of CPVC manufacturing, why would it? What is the timeline of the operation? I joined the collaboration list. I don't mind my question later. I understand that the yield is going to be higher. At the present rate, what is the yield we have been expecting during R&D phase? How are you expecting it to change over time? I understand polymer capacity is not going to happen instantaneously. How is that going to happen? In terms of PVC, are we going to continue to because there's a domestic supply chain in R&D like the DCW or Chemplast? Would it not be with them? Is it comparative prices internationally that we are expecting to capitalize on? Could you show some perspective on PVC C procurement and things like that? CPVC, we will comment in the second quarter of FY 2027 is what our initial plans and commentary is. As far as the yield goes, we are not sharing the yield data because it is proprietary to our R&D technology. Exact yield data we will not share. As far as the PVC sourcing for this manufacturing of CPVC goes, like I said, we have worked with several different PVC manufacturers from across the world. We are comfortable in sourcing whichever grade is available at the competitive price to ensure that our end product remains competitive and the benefits get passed on to the parent company. Secondly, I can add here that we have a very healthy relation with all the names you have given, whether it is DCW, whether it is Reliance, whether it is Chemplast. They all are our trusted suppliers. We have a very healthy relationship of years. It is not one or two years. Last 10 years, we are working with them. I don't see any challenge into that side. They all are our trusted suppliers. At the same time, a lot of international suppliers are there with whom also we are working for so many years. We don't see any problem into that side. The price is going to be the primary factor that it would depend on sourcing because R&D is done with all the. Sourcing is not just price, but we will ensure that we manufacture this product at a competitive price and at the desired quality to ensure that at the end of the day, the parent company gains the market share and volume without sacrificing on margin. Secondly, you see today also, if you see the price now for PVC, whether you pick up any company in India, all are having the same price. They follow the same price across the board. You source from any company, all the three companies, PVC price is common. Now, if you compare with the international price also, the price gap will not be more than INR 1 or INR 2 because PVC is not that product. It's a commodity. Your gap will be INR 1 or INR 2. Whether I buy imported material, whether I buy local material, the gap is not going to be more than INR 2. That is how the local players are adjusting their price. They are always giving the price on import parity basis. It is not going to be a big gap. CPVC margin, it is already in the public domain of the other companies. You can check all are working on 35% plus EBITDA margin, 25%, 30%, some are working on more than that also. One or two rupees price is not going to affect the CPVC margins or maybe CPVC costings. Understood. In terms of inventory management, you mentioned that it is going to be not a high impact in terms of CapEx because of the rest inventory days. Perfect. To what extent do you think it will get down to the 90 days, or could it be 30? How would it be once the manufacturing process comes in? At the end of the day, it will be blended sourcing, right? Yeah. Right now, I am talking about CPVC. PVC inventory, we are not keeping for 90 days because it's a local supply. We don't need, one week or two weeks inventory is more than enough. Whatever the higher inventory which we have to keep, that is for the CPVC because that is more inventory dependent on the import. Because of that, we have to keep the high inventory. Now, suppose 90 days inventories are there in the system today. If my local plant is there and it's our own plant, I think we can easily manage in one week inventory or max to max two weeks inventory. There is no need to keep higher inventory because the supply is sure. If I reduce my inventory by two and a half months, even if I'm considering higher or 50. There are many benefits, as Hiranand said, I want to add that there are many benefits that we will still explore once we make our own resin. We can also do the compounding and pelletizing on trials, which aids in better efficiency. We can get rid of the compounding processes across our plant to further enhance the secrecy of our recipes and raw materials. We can ship directly the finished compound to our factory. A lot of things like this can be unfolded, which we will work on once this plant is stabilized. Understood. Thank you for your answer. Thank you. Thank you. The next question is from the line of Sravan Shah from Dolat Capital. Please go ahead. Hi, sir. Sir, just one thing. This quarter, obviously, the prices were very low realization on the plumbing side. Just to understand, if I just do a math, obviously, though PVC share was higher and that's why the prices were lower, but still from FY 2025, the current realization is close to 8% lower. Given, let's assume the EDD does not come right now, just for the assumption. Current prices versus the Q1 average, how is it and how one can look at unless the CPVC share goes up, obviously, it will help us to improve the realization. Still, on a full-year basis, if somebody, if we remove the EDD, I think that we will still see a kind of a 5% on a YoY basis decline on the realization front. Your comment will be helpful. I think it is very difficult to predict the balance nine months because the first quarter is over now. The balance nine months, when EDD is going to come, when BIS is going to come, when the polymer prices are going to go up, I think it is very difficult to predict at this thing because the market is volatile. What is going to be the CPVC price in the coming time? It is very, very difficult to say what is going to be there by the year end. Every quarter, we will keep updating you. Now, if you see that Q1, Q1, the polymer price dropped, and then the latest stage CPVC price has gone up, and now it is stable. Maybe Q2 will be better in terms of realization versus Q1. It is very, very difficult to say when prices are going up and when prices are going down. It is volatile. I think once the things will settle down, yes, definitely we will be in a position to predict. At this stage, giving the year-end realization number will be really challenging for us. What I wanted to understand is currently the PVC prices versus for us in Q1, how much is higher? 14% down is there compared to the last Q1. Q1 FY 2026 versus currently is 14% down. Q1 FY 2025 versus Q1 FY 20``26 is 14% down. Versus Q1 last quarter, there is no change. Okay, okay. That's what I've observed. From this quarter, we are. Yeah, yeah. This quarter, we don't foresee any inventory losses. Got it. For industry in Q1, CPVC volume growth would be how much and for us would be how much? be very frank, nobody is giving the CPVC data in the market. It is very, very difficult for anyone to predict how much is the volume, how much is what. Everyone is talking percentage and all this thing, but there is nobody giving the exact number. It is very, very difficult if you compare with what we are comparing and what the players are giving the questions. There is a mistake. If you look at the import data, we have checked the import data. If you look at the import data, I think the type of the CPVC data that we are getting from the market, from the commentaries, I don't think such data without any proof, we have to think that you know they are absolutely correct. Got it. For us, the combined plumbing volume is kind of a flat 0.5% growth in that. Yes, it is flatish in Q1 because overall demand sluggishness was there. We will cover up in the subsequent quarter, so nothing to worry about. On the CPVC side, we have not decreased or lost any market share, so nothing to worry about there. Majorly, the PVC discharging happened because of the falling PVC prices. Nothing, no problem on the CPVC side. Got it. Got it, sir. Thanks for your answer. Yeah, thank you. Thank you. The next question is from the line of Utkarsh Nopany from BOB Capital. Please go ahead. Yeah. Hi, good evening, sir. My first question is regarding what pipe AI is on. If you see, it was down at a much higher pace on a Q1Q basis compared to our peers, despite we have a low exposure to the agri pipe segment and we have a high exposure to the CPVC pipe portfolio. I wanted to know whether this is because of steep decline in the CPVC resin prices in the June quarter, and if you could also quantify what has been the sequential change in CPVC resin prices in the June quarter period. I think CPVC price was definitely down. There is no doubt about that thing. What is the actual price had dropped from where to where, nobody is having the authenticated data because everyone is buying from different stores and every player's pricing is different. Local players are selling it. Even local players are not selling at the same price. They are selling at a different price. Japanese are selling at a different price. Lubrizol is selling at a different price. Very, very difficult for anyone to compare that, that's from where to where it has gone down. What has been the change in the CPVC procurement price for the June quarter on a quarter-on-quarter basis? We don't share all this internal information that this much is down or this much is up because we don't share all these individual numbers. I said price goes down, that is the reason you can see that the realization drop was there. Okay. My second question is on your CapEx side. How much CapEx have we incurred in the June quarter and what is our guidance for FY 2026, and why are we acquiring 80% stake in the proposed CPVC resin plant? Why are we not acquiring 100% stake? I think this answer Kairav has already given. I think you have not listened to that thing that this 20% is with the technical partner. I can't leave technical partner alone because he has given us the technology and he has helped us in our R&D functions and all this thing. He was working with us for the last two, three years and he wanted to invest in that plant. He has taken 20%. You know we need someone, see CPVC, like I said, is a volatile polymer and we have to ensure the chlorination process has to happen under certain parameters. It is a process that needs a lot of care that has to be taken to ensure the quality of the final product. We will require this partner to run the factory on a day-to-day basis and to be with us for further expansion and for further support. You know we require his services at the moment. He's with us. Okay. Sir, on the CapEx side, what is the guidance for FY 2026 and how much have we spent in it as of the June quarter? Q1, we have spent INR 50 crore. We have given the guidance of INR 300 crore-INR 350 crore, and we have stuck to that. Okay, thanks for your answer. Thank you. The next question is from the line of Saniya Kothari from AUM Capital. Please go ahead. Good evening, sir. Congratulations on conceptually navigating a challenging polymer market this quarter. I just heard a couple of great points with the excitation of Al-Aziz Plastics. How will this product complement Astral's existing portfolio? What synergies are you expecting in the next 12- 18 months? Al-Aziz makes multiple products. It makes electro-fusion fitting for water supply, for gas. It makes a PPR fitting. It makes some PPS products. It makes very different variety of products. Like I said in my opening remarks, we are working on several new systems to be launched in the Indian market. Some of these systems will utilize the fittings that are manufactured by Al-Aziz. We have good long-term plans with the fittings of Al-Aziz. On top of that, a lot of Al-Aziz's fittings are used in the industrial application and a lot of them are used in water supply application as well. Once the government demand starts, again, the demand for Al-Aziz's product will start. We can utilize the Al-Aziz's product for clean water supply, for gas supply, for wastewater supply. A lot of different product categories and product lines we can manufacture using these fittings. We are under the process of manufacturing a lot of new innovative product lines, which we will announce as we are closer to the launch date for each one of them. Okay, sir. What percentage of revenue do you target from this acquisition, even FY 2026 and FY 2027? It is very hard to quantify right now, madam, because we are only making fittings. In that, also a lot of range expansion is going to happen. On top of that, I have to develop some of the plumbing products to go with the fittings. It is very hard because it will all sell as a system. It is very hard to quantify right now what percentage of top line this will happen. Like with our double wall corrugated systems that we acquired, the Rex company, it has become a substantial revenue driver for Astral. We foresee that even the Al-Aziz's product will become a substantial revenue driver for Astral in the coming quarter. Okay, sir. Sir, with backward integration and acquisitions, I sense we will be diversifying beyond plumbing. What% of the revenue do you target from non-plumbing segments for the next two years, sir? The backward integration is non-diversion. It is the same plumbing product, only we are doing the backward integration. It is not an altogether different product we are doing. It is a part of the plumbing only. Okay, sir. Any guidance for the revenue growth? Sorry to interrupt, but I requested you come back for the follow-up question. Okay, thank you. Thank you. The next question is from the line of Sunil Shah from SRE PMS. Please go ahead. Yeah, thanks for the opportunity. I am just wanting to understand, you know, about the plumbing and the adhesives. That has been our core business for many, many years now. The new one is on the paints and Bathware. Just wanted to understand the penetration of these two lines, the Bathware and the paints, in our distribution reach. The question is, you know, plumbing, we are throughout the country, all across the country, similarly maybe even adhesives. What about paints and Bathware? Bathware also, sir. We are, sorry to interrupt you. I'll just finish on the Bathware side first because there are two different segments. Bathware also, 70% of our channel is selling Bathware. We have done an internal survey, and we are in Bathware also. We are present across multiple thousand outlets in India, and our distribution reach is going up. We are present in three geographies majorly now in the Bathware side: north, west, and south. East, we have to still ramp up. East, we will ramp up in the coming year or so because to ramp up east, we have to onboard a lot of manpower. We have decided that once the west, north, and south stabilize, we will gradually enter the east geography as well. Bathware also our aim. If we are not entering the different geography, then committing a 25%- 27% growth for the year is also not possible. Bathware also our focus is. Bathware again, we have to look at the Indian market because in the Indian market, there are hardly a handful of companies that have more than INR 500 crore top line in the Bathware business. Bathware business, it takes the time and a lot of end-user conviction to reach that scale of a INR 500, INR 600 crore top line player. Our first goal is to cross the INR 500 crore top line in the Bathware business in the coming years and to enter that club of being a manufacturer that does INR 500 to INR 600 crore of annual Bathware sales. We will look to ramp up in a more aggressive manner. Just a second, talk about Bathware right now since we're discussing that. 70% of our distribution reach is selling our Bathware products. Not our Bathware products. I said that they deal with the Bathware products. It could be of any brand. Okay. I'm saying that that 70%, we have seen one full year of that penetration already happening. Not everyone is going to stop selling whatever they are selling and pick up my product overnight. That is why I'm saying it takes years of conviction and convincing and customer preference building to succeed in the Bathware space. You look at all the other players and you see, you look, make a list of all the companies in the Bathware space in India. You will only see that a handful of companies have crossed the INR 500-INR 600 crore top line level because in this space, it's a slow burn. It takes some time to convince the customer. It takes some time to convince the retailer. It is a finished product. It is an in front of the wall product. It is not a behind the wall product or it is not a commodity product where tomorrow, if I say I will give you 5% extra discount, you stock two trucks of materials, someone will go ahead and stock two trucks of Bathware. It does not work like that. This industry, you have to work with the influencer. You have to work with the homeowner. You have to work with the architect. You have to work with the plumbers. It takes some time to develop the preference and to penetrate. Looking at what we have accomplished in our three years of journey, I am very hopeful that we will cross this INR 500 crore, INR 600 crore threshold and we would become one of the Indian players who has crossed that mark. Sure, sir. Sunil, I can add little here. See every distributor, normally when he joined, he watched the other distributor. One distributor will take a lead in Ahmedabad hypothetically. He will do some sales. The other distributors are watching him. The moment a certain level of volume he will reach, the other will be tempted to join with Astral. The third person will join. This journey is like that because nobody wants to take a risk to hold the inventories and do the business for the new business. Whatever the most trusted distributors are there, whom we are convincing that so many years you have worked with Astral, you give us a chance and you see that whether the product is working or not. Slowly and gradually, distributors are putting trust in Astral and they are growing. The initial journey, as Kairav said, will always be slow because I can give an example. If I go to any good contractor or maybe the good developer like Godrej, he will select me, Astral Bathware fitting, for one of his projects and he will give me two or three towers that, okay, I want to test your product, how it is functioning, how is the aesthetic look wise. This tower will take three years to complete. Until that time, he's not going to give me the other order because he will watch my product. He will see the functioning of my product. After that, he may be in his second tranche. He may be giving me 100 towers or maybe 50 towers or something like that. In the beginning of the journey, he will give me a few towers. The waiting period will be long for the same builder for the next order. That is the reason we always communicate to every investor that the initial journey will be slow. The second level of growth will be very fast because he is convinced with my product. If he is repeatedly coming to me, then he may be giving me 50 towers, maybe 100 towers, maybe 500 towers also. The initial journey will be slow in this business. That is why we are repeatedly communicating to investors that this will take time. The best part is that plumbers' connection with Astral is very high. Because of that, plumbers are pushing this product into the retail level. That is picking up very fast. That is why we are seeing that you tell me which company has given in two, three years' time triple digit number. Very, very hardly any company will be there. That is the strength of brand Astral. Maybe another one year or so, we have to work slow, and then all of a sudden, you will see there will be a fast growth. Because I explained to you, then the next level repeat order, because three years anyway, I have to wait for that builder. Because his tower will not be completed, he will not be giving me the repeat order. Let me just interrupt you. Coming to your second question of paint, paint, when we took over a lot of systemic changes were there, a lot of lecture notes were there. We implemented SAPs and all so that we can have a right way of reporting structure and MIS structure in the organization. Then we started appointing the distributors, factory dealers for the paint for Astral brand because now Jame is restricted to the south market only. The other markets we are entering, we are entering with the Astral paint. The moment I am entering into any smallest of the smallest market, one or two dealers which I do, it is costing me too much because my top line is not there. Because of that, I have to add the more things. That's why my employee costs are going very ballooning. Secondly, I am spending a lot of money on dealers' needs, distributor needs, gifting them, and doing a little bit of branding activity. Because of that, my EBITDA is getting eroded. I think we have already entered into Gujarat, Rajasthan, some part of Maharashtra, and in this MP also. Hopefully, now certain level of dealers we have already appointed in brand Astral. That is why you are seeing there is a growth in this quarter. From here on, the same people are going to give me the growth in the coming quarter. At the second stage, we will appoint more dealers in the more states because if I'm going to open up the entire pan India, then I have to bleed like anything because I have to need more and more people because it's a retail business. It is not a distributor-led business. It is a direct-to-dealer model. That will kill my employee cost. Because of that, in a gradual manner, we are working and we have a clear mindset that we don't want to make a loss. Okay, we may be a little positive EBITDA and keep growing one by one geography and. is the reason we are not going big way into the payment. Otherwise, it is going to be a cash run for us, which is not the mindset of the management. That is why it is going slow. Yes, now certain states we are already open. That is why you are seeing the number. We are confident that in the coming quarter, also by year end, we are targeting minimum 20% kind of growth. Minimum, I'm telling you, which can be high also. Sure, fine. Thanks, sir. All the best and we look forward to the old growth rates and old ratios. No, sir, we are also ready. Everyone, at the end of the day, we are also working for growth only. It is not that no one likes to, you know, not grow. We are also working in the CPVC plant. Whatever we have decided, we have thought about it for years and we have deliberated and talked about it. All these initiatives that we have taken are to further drive the growth of the company only. Sure, absolutely. Thank you so much for all these insights. Thanks so much. All the best. Thank you. The next question is from the line of Rahul Agarwal from IKIGAI Asset. Please go ahead. Hi, good evening, Kairav Engineer. Of course, just extending the discussion further on these categories. I think a lot of product categories need investment on branding as well, apart from manpower. I think more and more we are adding B2C products, apart from paint, Bathware. I think the core thing is about it also has that, you know, stuff like fans will also need some kind of branding because, you know, a lot of retail demand is out there. Just from a sales and promotion perspective, typically the business is spending about 3%- 3.5% of top line into branding. Should we expect more spending into this line item and, you know, get further brand spend to further ramp up these sales? That's the first question. Rahul Ji, if you see how Astral worked out the branding strategy, because when we entered into the HSC business, multiple brands were there. Because of that, we had to spend a lot of money on the branding side. What we did, we consolidated that business into the one brand, one type. Earlier, if you see, there were multiple brands for individual category wise of chemical, you can say. That we consolidated and made it a one brand bond type. Now today you see whatever the branding we are doing, that is in the name of bond type, so that our branding costs come down substantially. Secondly, in our new businesses like Bathware or paint, what we have done, we have given the brand Astral to them, which is already an established brand. No need to explain to anyone what is Astral. Today all our Bathware products are carrying Astral brand. Similarly, paint is also carrying Astral paint. They are getting the big advantage of the parent brand. We have not kept the separate brand so that we have to do the separate branding for them. That is why in the coming time, once the volume will start picking up, our branding costs are not going to go up. It is going to come down. That is why we have worked so much time on that and worked out the strategy in such a way, considering next 20 years in mind, so that in the future we should not do the branding for individual categories. We don't see branding costs to go up in the coming time. It is going to be within control, and once the volume will start picking up, then it will come down. Last two years, the polymers were on the down cycle. Otherwise, you could have seen now also the branding costs have come down. In absolute terms, we are spending less and less on branding than what we were spending two years ago. In absolute terms, we are not in the rupee amounts. It's not that the budgets are going up. Don't worry on that side. We have kept all these parameters under sales costs. Perfect. Got that. Just one clarification on the large discussion on CPVC resin. I'm assuming that 100% of this resin will be used captively and there will be no sales outside. Is that understood? Yeah, 100% captive use. 100% captive use. We might actually have to buy some resins from the other supplier outside also because in the initial phase, it might not suffice our demand. Whatever we are making, this 40KT will be 100% captive use. Got it. You know what's up? Question to Hiranandji Savlani. Just from an accounting perspective, sir, this will be a segment three kind of accounting, or it will be included in the plastic product? That we will decide. We have not given the thought on that side because we have just done the announcement of the plan. At a later stage, we will communicate to you. Technically speaking, if it's 100% captive, do we need to really report? Can we come back for the follow-up question? Yeah, it was just a follow-up. Anyway, thank you. Technically, we have to show separately. Okay, got it, sir. Best of luck for the rest of the year. Thank you. Thank you. Thank you. Thank you, Rahul. Thank you. The next question is from the line of Rishab Bothra from Anand Rathi Shares and Stock Brokers. Please go ahead. Hi, sir. Just wanted to understand, are there more surprise elements in coming quarters? Last few quarters, we have seen paints, Bathware, now this Al-Aziz, and currently the backward integration. Is there something else also going on? I don't think so right now, anything on the card. If any opportunity will come, definitely we will look into that. If we want to grow, then definitely we have to be like that. The kind of growth companies foresee, then a lot of cash flow will be generated. Naturally, we have to invest somewhere. You see the history of Astral. We are continuously generating good cash flow from the new businesses. Right now, it looks like that because it's the beginning of the journey. You see the HSC, what the cash flow we have generated from that. Now, Bathware also will start generating the cash flow. Paint, right now, it is looking weak. Once the volume will start picking up, the paint will also generate the cash flow. We don't see any problem what we have done so far. Any new business or any new acquisition, initial journey will be like that only. I remember in 2014, when we acquired Resinova adhesive business, the similar kind of things were there. Everyone was worried about what is going to be there. At that time, Resinova's margin was 6%. It is not that today I am telling you. You can go back in 2014 number and you check. We have already reported at that time also the margins and everything. The margin was 6-7%. Today, we are happily delivering 14%, 15%, 16%. That business has not only given the growth, but it has doubled the margin percentage also. Initial journey for any new business will always be challenging. Once it will settle down at a certain level of volume, economy of scale will be there, then definitely it is going to generate cash for us. For any new business, we have to keep patience and we have to give some time because we are not here for one quarter or two quarters. We are looking for any new business for the next 10 to. Mr. Ritshab, does that answer your question? As there is no response, we'll move to the next participant. The next question comes from the line of Sandeep Jain from Bajaj Life Insurance. Please go ahead. Sorry, we were not able to hear you earlier, convergence. Can you repeat the question? Three-year R&D that you've done in the company on CPVC, how much is the, you know, total R&D spend that you've done for this CPVC project? We have not done much spend. It is negligible. Maybe INR 4 crore or INR 5 crore at maximum we have spent in the R&D side. We had set up a pilot plant, small pilot plant, which was manufacturing 50- 100 kg of batch every day. A very, very small amount of spend that we have done in this side, R&D side. The other thing is this company, which is going to invest 20%, was incorporated on December 31st, 2023. Correct. If they have done something, I mean, this is a curious thing, basically, that we have communicated that we did something on our part for three years, but that amount is not big. See, Kairav, from here on, can we also see, let's say your U.K business head, let's say this partner, I think some of your calls, this company has become big. Can we also get to hear your other heads and your other partners so that we also kind of come to know what capabilities they bring from their, you know. Which partner thing, sir? U.K side, we are going to take the 100% control of the U.K business. There is no partner thing. I'm not saying that. At least once in a year, if you put the U.K head, your paint head, your adhesive head in front of us. We have just U.K head, we have just recruited, okay. The paint side also, the new team is there. Next year in the analyst meet, we will try to bring as many seniors as possible so everyone can meet them on one platform. Correct. They save the questions rather than you for theirs. No, definitely you have a valid point. You have a valid point. Next year, we will promise to bring our senior people to our analyst meet that we have, annual analyst meet that we have in Bombay. We will bring our seniors from the different divisions where people can interact with them and where people can ask them direct questions. In the past, we have already invited our U.K partner also in one of the analyst meets, and people have interacted with him also. Similarly, even when Reginova was acquired, the Reginova promoter was also there in the analyst meet. Kairav, can you stick to a format, let's say an acquisition, when it becomes not one year, two years, but let's say three years old? After that, your guidance for each acquisition in terms of sales growth, margin, cash conversion, and ROC, and progress on that quarter after quarter. Can you stick to this format? Yeah, yeah, we can definitely work on that. That is not a problem. They'll accept it. Because this will, you yourself will come to know your own history of acquisition, where you are sitting on it. Otherwise, there will be no check in terms of where things are heading in terms of the ROCs of each individual component. I agree that we agree to it. As you said, sir, in India, whenever you do an acquisition or whenever you do any acquisition, once you do the acquisition, someone is selling the company because they are not being able to manage it. Only then will they sell the company. When you are buying the company, there are a lot of things. You have a legacy manpower. You have the different attitude of people working in the company that you have to change. A lot of change management is there. You have to bring in your software. We run on SAP, so we have to introduce SAP. We have to introduce best practices for HR. We have to introduce best practices for clients. A lot of things go into play. It is not that today we buy a business and tomorrow they start working as per our whims and fancies. In India, people management and change management is a really tricky thing that one has to take on when you do any acquisition. Some people, some staff and some companies you acquire, people are more receptive to change. Some companies, people are less receptive to change. For example, U.K companies, they were very receptive to change because U.K traditionally has that mindset that people, there is no emotion attached to the business. When you acquire an Indian company, a lot of people are attached with the old promoter. Still, the old promoter is existing in the business. He still comes to the office. A lot of people are still going to him with the problem and grievances. All these things are in, we have to manage in a very delicate manner. Your points are well accepted. We will create a standardized format. It will help you in terms of tracking your own data. That's it. You are correct. Thank you. The next question is from the line of Aditya Das, an individual investor. Please go ahead. Hi, Kairav Engineer. Yes, yes. My question is regarding the fact that, you know, our market share in the piping business is still relatively in the higher single digits, I think. The other new businesses that we have just introduced have comparatively even lower market share, and the opportunity to grow in terms of, let's say, longer-term business opportunity is huge. I understand that quarter- to- quarter, you know, we might have some disappointments because of the polymer prices not, you know, meeting our expectations and going down. We are, you know, technically resulting in inventory losses, but that is something which is a short-term matter. What I want to understand from you is where do you see this business, you know, five years from now, seven years from now, and what is the volume growth or, you know, probably top line growth that we can sustainably expect from this business, considering that we have a lot of new businesses? That's my question. See, volume growth, we are expecting minimum double digit in the next five years. That is what internally we are working. Now, with this recent announcement of this backward integration, there are high probabilities that our volume may go toward this higher direction. Once this plant will be ready and all these numbers will be in our hands, we will work out our strategy, and based on that, we will communicate to all of you what will be the new strategy for Astral. The way we have understood, the way we have worked out the number, it is very, very promising. It is too early for us to give you that number. Let us first be ready with the plan. When the commercial production starts, one or two months, we work on that and we work out our exit savings. Based on that, I think we will revise our number. Right now, without that, also we were working for a minimum double digit kind of growth margin. With this announcement, we are expecting that the number will be much, much higher. Give us some time to work out our strategy, and based on that, we will communicate to you. Now, coming to the new businesses, you are right. The new businesses' base is very low. There is a high probability that on these new businesses, we can grow much faster. Like Bathware, last two, three years' numbers, this is the third year now. You have seen that how the numbers are moving. We are confident that new businesses will be giving us much higher than the other businesses, which are the established businesses. We are struggling for the last couple of years because of this, you rightly said, the polymer issues are going on. That is also all said and done. It is going to get over by this year. Post that, we don't see there will be a further erosion from here on. We don't know 100%. We are not a 100% right predictor also. Neither are we expert into that side also. Looking to our so many years of experience, it looks that this is the year where we see the bottom will be there. CPVC price, we are seeing that now it is trying to settle down. If something goes positive in our favor, like we said, the anti-dumping duty or BIS, in that case, it will be another bonanza to us. In that case, it is going to help us in a much better way, in a much positive way. All said and done, we are of the view that growing double digit will not be a challenge to Astral. Now base effects will also start playing. It will be on a higher side also. With this, next year, second half will be once this plant will be ready, then it is going to give us a much better positioning. It is going to give us a more boosted dose to push the volume in a big way in the market. Keep fingers crossed. We know the last couple of years we are passing through this challenge, but we will not be disappointing any of our investors once we will be ready with this plan. I totally appreciate the fact that, even when compared to peers, we are holding our CPVC margins relatively quite well. It is clear that, through our margins, some of our peers might be pushing some of the products into the market, and we are not. That strategy is quite clear. I will only say one thing, sir, that quality has been in our DNA since day one. We are the ones who will always advocate for the good quality product for our Indian consumer at the fair prices. You know, giving a subpar quality is never in our ethics or DNA. At Astral, we will never engage in such practices. For us, not only margin, but the good quality product, well-certified product, and a product that is clean and beneficial for the human health consumption is a priority and a crucial responsibility as a corporation. Secondly, I can add what Kairav said, that, you know, we are in a category like pipe, where the failure doesn't come immediately. Today, I am installing the pipe. It is not going to blast tomorrow. It is not going to leakage tomorrow. It is going to give the effect over a period of time. Maybe once the building will be ready, building normally takes two to three years to complete, and then the people will start using that pipe. Normally, failure comes at a later stage. Many of the competitors, whosoever is doing the shortcut route and playing with the quality, they will suffer at a later stage. It may not be on an immediate basis. Astral's philosophy is very clear. We don't want to do any shortcut route. Sometimes it may happen. Sometimes we also get frustration that what is happening in the ground, why somebody is selling it at 7%, 10% cheaper. We have to understand that this kind of quality is going to give pain over a longer period of time. It may not be one year or two years down the line, but maybe four years, three years, five years down the line. A lot of failures, you will see, and which we are communicating since long, that this kind of practice, particularly in the plumbing and pressure pipes, will not work because all these pipes are behind the wall. It has already started. Many competitors have started training right now. Many of their projects are getting failure. It will exaggerate it over a period of time. It is not going to happen tomorrow. Keep patience. Trust. Ultimately, the good quality product is going to survive for a longer period of time. The brand which is giving the quality product at the right price, it is going to survive for the long-term period. This shortcut route can give benefit for a shorter period of time, but long-term, it is going to be a real pain for anyone. See, today I am looking at long-term, and my family is looking at long-term business. I am 36 years old. I will work till at least 70, 75 if health permits. I am going to be in this market for another 35, 40 years. Whatever I will do and whatever I will guide to the fellow investor and the fellow community members present here, it will always be 100% true and genuine because we are here for the long-term. We are not thinking of any short-term gain. We are not looking to exit any business. We are always here for long-term and always trust the regulatory body of India, like BIS, who is certifying this product. You are very well aware of such regulatory bodies. They will always certify the good quality product. We are here as a quality player for the long-term business. Absolutely. I absolutely appreciate your views on this. My last question would be, recently, you know, a lot of building materials companies are also complaining of, you know, overall demand slowdown in the construction sector. Apart from the polymer and CPVC price decrease that we are already seeing for one or two years now, is this also something that you are witnessing in the, you know, piping sector? Some demand slowdown is there. Definitely, demand slowdown is there. That is why the quarter one was plenty, because the real estate side, some slowdown is there. Demand issue is there, and government side also, the spending is on the lower end. I think with this festival period, once it's over, we are hopeful that some demand revival will come from government as well as private sector. Since Diwali is there in the month of October, a lot of home improvement works could happen from the third week of August till Diwali. We are hopeful that some sort of a demand revival scenario should happen in the coming two to three months. Thank you so much, sir. Thank you. Thank you. The next question is from the line of Varun Jelasarya from 360 Capital. Please go ahead. Yeah, hi, sir. I just wanted to check, on the backward side, what is the kind of communication and the display showrooms that we have currently? I don't have this number on hand, but after the call, you can get in touch with Hiranand Savlani. Hiranand Savlani will provide you with the latest numbers. I think till 1,000 number we were giving to the market, but now every day new counters are getting in the system. We don't track on a daily basis, but I think till 1,000 mark was reached, till that time we were giving the investor the number. Now every day new counters are getting added. I have also not checked recently what is the real number, but definitely I will collect from the team and pass on it to you. Are these all full display showrooms or just the counters there? It will be a dealer's point where they give us one section for the display. One wall they are giving it to us to do the display activities. That is how they work. Exclusive showrooms also there. That is our distributor. They do the exclusive showroom where all the Bathware products will be displayed, and that will be exclusively for Astral products. These kind of also many shows are being already there in the system. Otherwise, on the dealer point, they give us a one wall, and there they do the display. Okay, sir. I'll connect with you. What was the losses that we incurred in the Bathware in the first quarter? To be very honest, because earlier it was a separate plant, we were able to know the exact number. Now the same plant is manufacturing a lot of plumbing-related products also. It is very difficult for us to work out the Bathware-related profit or loss because it is clubbed with the plumbing product. There we are manufacturing a lot of brass rings. I can say thousands of everyday rings are getting produced over there, which are being used in the plumbing product. All this, our brass, Elmo, teak, coupling, all these brass items for PVC and CPVC, all are manufactured in the same plant. It is very difficult to know the exact number of profit or loss for the Bathware. It is clubbed with the plumbing product. Okay, sir. Thank you. I'll connect with you offline for the showroom number. I'll read it to you. Thank you. Thank you. I think you can take the last question. Sir, there are no questions. Okay, okay. Thank you, everyone, for joining us on this call. We are committed to working hard and delivering growth. I know the last couple of quarters have been very challenging, but they have been challenging for everyone in the industry. The entire building material industry is going through a tough phase. Good things are looking in the near future. We hope that good things are there in store for the industry, and we will continue to deliver best on our promises as possible. Thank you, everyone, and have a good day. Thank you, everyone, and thank you, Sreya, for hosting this call. If any question is not answered, we request that you can directly call on my mobile number. Thank you so much. Thank you. On behalf of Nuvama Wealth Management, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.