Good afternoon, ladies and gentlemen. I'm Pelcia, moderator of Supreme Industries Q3 FY2023 earnings Conference Call, hosted by DAM Capital Advisors Limited. As a reminder, all participants will be in 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 and then zero on your touchtone telephone. Please note this conference is recorded. I would now like to hand over the floor to Mr. Aasim Bardey from DAM Capital. Thank you, and over to you, sir. Thank you, and good evening, everyone. On behalf of DAM Capital, I would like to welcome all to Supreme Industries Q3 results conference call. From the Supreme team, we have Mr. M.P. Taparia, Managing Director, Mr. P.C. Somani, CFO, and Mr. R.J. Sabu, VP Corporate Affairs and Company Secretary. Over to you, Mr. Taparia, for your opening comments. Thank you very much, Mr. Asim. I'm N.P. Taparia, Managing Director of The Supreme Industries Limited. I, along with my colleagues, Sri P. C. Somani, Chief Financial Officer, and Sri R.J. Sabu, Vice President Corporate Affairs and Company Secretary, welcome all the participants who are participating in the discussion of the unaudited stand-alone and consolidated financial results for the quarter and 9 months ended 31st December 2022. The stand-alone results and the consolidated results are already with you. I will give briefly on company product operating performance and other highlights. The company sold 138,362 tons of plastic goods and achieved net product turnover of INR 2,284 crore during the third quarter of the current year against sales of 91,364 tons of plastic goods and achieved net product turnover of INR 1,895 crore in the corresponding quarter of previous year, achieving volume and product value growth of about 51% and 21% respectively. The company sold 359,087 ton of plastic goods and achieved net product turnover of INR 6,500 crore during the nine month of the current year against sales of 265,301 ton and net product turnover of INR 5,106 crore in the corresponding nine month of previous year, achieving volume and product value growth of about 35% and 27% respectively. Total consolidated income and operating profit for the third quarter of the current year amounted to INR 2,319 crore and INR 331 crore as compared to INR 1,948 crore and INR 369 crore of the corresponding quarter of the previous year, resulting in consolidated income increase of about 19% and operating profit decrease of over 10%. Total consolidated income and operating profit for the nine month of the current year amounted to INR 6,622 crore and INR 824 crore as compared to INR 5,227 crore and INR 985 crore for the corresponding period of the previous year, resulting in consolidated income increase of about 26% and operating profit decrease of about 15% respectively. The consolidated profit before tax and profit after tax for the third quarter of the current year amounted to INR 273 crore and INR 210 crore as compared to INR 314 crore and INR 246 crore for the corresponding quarter of the previous year, resulting decrease of around 13% and 15% respectively. The consolidated profit before tax and profit after tax for the nine month of the current year amounted to INR 647 crore and INR 506 crore as compared to INR 823 crore and INR 645 crore for the corresponding period of the previous year, resulting decrease of around 21% and 22% respectively. The business scenario of all the product segment of the company for the third quarter of the current year ended 31st December 2022, as compared to the corresponding quarter in the previous year, has been as under. Plastic piping system business grew by 82% in volume and 31% in value term. Packaging product segment business de-grew by 12% in volume and 7% in value term. Industrial product segment business grew by 20% in volume and 24% in value term. Enumerable product segment business grew by 5% in volume and 9% in value term. The overall turnover of value-added product increased to INR 826 crore during the 3rd quarter of current year as compared to INR 665 crore in the corresponding quarter of previous year, achieving growth of 24%. The company had total cash surplus of INR 687 crore as on 31st December 2022, as against cash surplus of INR 518 crore as on 31st March 2022. Business outlook. Plastic pipe system business profitability continued to be impacted due to falling PVC prices till November 2022. December onward, PVC prices have started upward march. The low prices of PVC, along with the restocking by the retail chain, improved business substantially in December. Pipe system prices, in spite of increase in PVC prices, remain affordable. Demand from housing, agricultural, and infrastructure is quite improving. Company achieved 51% volume growth in third quarter on a lower base of corresponding quarter in the previous year, as huge destocking took place in that quarter. For nine-month period until December 2022, piping business has witnessed volume growth of 48%, which is quite encouraging. PVC resin prices, which had dropped by INR 66 per kilo, that is 45% since April this year till November, has recovered again by INR 15 per kilo since then. It looks that price of PVC will remain range-bound, which harbors well for the business. Company expect to maintain a growth rate momentum with increased range of system, which are commissioned in this year, along with affordable raw material prices. New greenfield project for plastic piping system at Erode in Tamil Nadu has commenced commercial production from December and with some delay. Upcoming facility at Cuttack in Odisha has gone to trial production in this month. All brownfield expansion of capacity and range of products are working smoothly. Company newly introduced olefin fitting and PEX piping system are getting encouraging response from market and poised for good growth in time to come. The company has launched cable shield conduit system in this month. With all the above projects and expansion in place, company expect to achieve volume growth in excess of 35% in this segment for this year compared to previous year. The cloth, laminated film division has introduced many new better products and was successful in acquiring customers by entering in four additional countries. This division expects volume to be around the same level of previous year with improved profitability. Industrial component division is doing reasonably well The division continued to expand its customer base to optimally use its production capacities. Business of home appliance and white goods, which constitute largest share of the division, is seasonal in nature to some extent and is likely to improve further with diversified customer base and acquisition of new businesses. The division has also received letter of intent of about INR 45 crore for supply of electronic voting unit component and VVPAT, in addition to the earlier order of INR 76 crore. Material handling division continued to expand its customer base and product portfolio. Business of induction and auto molded products is doing well. There's good demand forecast from soft drink bottlers, which will further help the division to optimally use its production capacities. The furniture division has done well during the first nine months of the year, where its turnover has grown by 13% value and 8% volume over corresponding period of previous year. This division has also witnessed steep fall in polymer prices, leading to improved operating margin. Company's focus is to add further several varieties of premium product in this business. In Composite LPG Cylinder division, existing production line is running at full capacity and primarily catering to the order received from Indian Oil Corporation. Commissioning of the new line doubling the capacity is completed and expect to start full production from beginning February. Protective Packaging division is putting its continual effort to remain in business growth path. All products across categories in the division assure quality and value for money. Division is closely working with customers and users and developing new applications for varied industries, keeping their needs in mind. Division focused to grow in volume, do value engineering, and adopting new technology and manufacturing to drive improved profitability. Continued growth is witnessed in defense, export, and insulation business. Performance Packaging Film division is working extensively on developing special structure film to meet newer application and customer requirement. Efforts continue to enter new territories in export market and increase the customer base, which is providing fruitful with better realization and profitability. The division is also exploring expansion opportunities. The company's CapEx plan for the year 2022, 2023 of about INR 700 crore, including carry forward commitment of INR 280 crore, is progressing with a little delay from the envisaged schedule. New greenfield plants at Guwahati in Assam, Erode in Tamil Nadu have gone into commercial production. Plant at Cuttack is likely to commence production in February 2023. Entire CapEx is being funded from internal resources. The prices of various polymer being used by the company, particularly polypropylene, low-density polyethylene, and polyvinyl chloride, have witnessed upward trend in recent past after reaching the bottom during the current year. Prices have gone down earlier between INR 41 per kilo to INR 66 per kilo since beginning of the year till November. That is a reduction between 28%-46% before rising a bit during December and January till now. Most severe fall was in PVC resin, which also resulted in substantial inventory losses, part of which is recovered during December and expected further recovery in the last quarter of the current year. Company is hopeful of achieving good business growth both in volume and value for the year. This is a brief and overall summary for the quarter ended in the reference. Thank you for your patience. Now, I and my colleagues, Sri P.C. Somani and Sri R.J. Sabu, are available to reply to various queries raised by all of you. Thank you very much. Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press star and one on your telephone keypad and wait for your turn to ask the question. If you would like to withdraw your request, you may do so by pressing star and one again. We will wait for a moment while the question queue assembles. Ladies and gentlemen, if you have a question, please press star and one on your telephone keypad. The first question comes from Rajesh Ravi from HDFC Securities. Please go ahead. Yeah. Hello, sir. Good evening, everyone, and congrats on strong volumes in the pipe segment. Seems demand is quite good in this segment. Sir, am I audible? Yeah, you are audible, sir. Great, sir. Sir, could you quantify how much is the inventory loss booked in third quarter? You said there is a partial recovery, but on a net basis, what is the impact? No, in first half, around- No, no, not first. In first half, we lost INR 230 crore. Mm-hmm. Since there was not proper margin, so some money we might have recovered. Maybe we can't quantify today, but some profit definitely we recovered in the month of December. No, no. What I'm asking is in Q3 numbers, are there any inventory losses beyond Q1 edge? Q3 number only I'm talking. In Q3, first two months we real lost money. Right. Only in the last month we recovered money. Correct. You can see that our operating margin still remain below. What was the operating margin in the month of this quarter, last quarter of plastic piping? Last quarter plastic was 12 point something. In quarter three, our plastic piping margin was 13.49%. Right, sir. Hello? Yeah, yeah. Thirteen point four nine percent. Mm-hmm. We believe it was definitely 2% lower. Okay. Had this inventory loss not been there, it would be close to 15.5%, right? You are right. You are correct. Okay. Great. Great. Given that now prices have jumped from the November level, at least, inventory losses are behind for the industry. No, inventory loss totally behind. We believe that we will get some inventory gains. Inventory gains. Great. Great. When losing money, we are imported raw material where we lost quite heavily. Mm-hmm. In this quarter, we gain something from our import consignment, which is going to come. Okay. On the company level, what is the effective tax rate, sir? The normal tax rate, 25.17%. Okay. Okay. sir, any guidance outlook for the volumes and margins for, say, Q4? How is the demand looking up? what could be the drivers Q4 and FY 2024? similarly, on margins, any outlook? FY 2024, we will talk in April. For this year, full year, we anticipate our operating margin will be 12.5%+, and our volume growth will be around 25%. Full year, 25%. For the full company. Okay. 25% volume growth. Last year we sold 393,908 tons. This year we anticipate 25% volume growth for the full year. Okay, 25%. Last quarter you're building in slightly muted volumes, is what I can understand. Okay, that would mean that Q4 volumes should be flattish, similar to Q3 numbers. If I, work backward. Hello, am I audible? Yes, you are audible. Yeah. what I'm saying that when I look at 25% volume growth for full year, Q4 volumes appear to be flattish quarter-on-quarter and some 6%-7% higher year-on-year. Q3 numbers are very good. Correct. Correct. Q3 numbers are best along with the Q3 of last year. Mm-hmm. Q3 was unacceptably very poor. Yes. No issue, sir. I think that itself is good. On the CapEx front, this INR 700 crore CapEx, how much is pending for Q4 to be spent out? What is the outlook for next year in terms of what sort of CapEx company would be looking forward to? In the month of April. Okay, and how much? This year our commitment is continuous. When we end of the year, we will inform you total commitment made by the company. INR 700 crore is commitment by the company, including INR 280 crore carry forward. When we say commitment, doesn't mean that everything will arrive by March 2023. Mm-hmm. Some will come in next year. Oh, okay, because first half your CapEx outflow as per cash flow statement was INR 240 crores, which is every half year, the run rate continues between INR 200-INR 250 crores. That run rate will continue in second half. It will continue in similar way. Okay. Sir, one last question. The working capital days that you report in the presentation, what is the calculation behind that? When we do our working capital numbers, debtors, inventory and payables, they don't match with your numbers. Where would we be missing in terms of calculation? No, match the other current assets and excluding the cash in bank. Okay. Okay. Great, sir. I'll come back in queue. Thank you. Thank you. Next question comes from Udit Gadiwala from Securities. Please go ahead. Yeah. Thank you, sir, for taking up my question. Sir, given that, robust growth that we have seen, and you mentioned that the PVC prices started to move up in December. Sir, could you quantify that, you know, when did the dealer restocking commence, and what are the, you know, inventory days with the dealers now versus in the previous quarter? No, we don't keep a track of the inventory with the dealer, but definitely dealer started restocking. Even the coming forward after beginning February, the full season starts and the demand remains middle of June, very strong. We believe the dealer may only increase their inventory so that they can service the customer. Understood. sir, could you quantify that, you know, the demand driver, primarily where is it coming from? Is it the rural economy that you are seeing or is it the plumbing end? The demand was coming quite strongly from the agriculture segment also. Rural economy, we keep a track only for agriculture segment, where the demand was quite robust in the month of December. Understood. Sir, like you had mentioned that your FY 2024 on your TV interview today, you said that you are targeting for INR 9,000 crore top line. Is that figure right for, so the balance will come in Q4? We are targeting FY 2023. Yes, sir. FY 2023. 2023, we anticipate our turnover will be INR 9,000+ crore. INR 9,000. Okay, sir. Got it, sir. Thank you, sir. I'll come back in the queue. Thank you. Thank you, sir. I request the participants to restrict with two questions in the initial round and join back the queue for more questions. Next question comes from Ritesh Shah from Investec. Please go ahead. Hi, sir. Thanks for the opportunity. My first question is, can you please give us some indication on agri versus non-agri mix and how it has moved on a year-on-year basis? That's the first question, sir. No, I repeat the first question. There is no way to quantify because in India, agri pipe, our also or agri pipe are used in housing also. This is the same reply I give in every quarterly meet, and this is the reality of business. Sure, sir. Sir, would it be possible for you to share some trends on the CPVC volume growth? We had a growth of 32% in nine months. Okay. That's encouraging. Sir, just one clarification. When we give volume growth, when it comes to pipes and fittings, this does not include any resin sales, right? No. We are talking plastic product. Only products. Okay. Perfect, sir. This is very helpful. Thank you so much. Thank you. Thank you. Next question comes from Abhishek Ghosh from DSP Mutual Fund. Please go ahead. Hi, sir. Thanks for the opportunity. Sir, can you just help us understand what is the current capacity and post the commencement of the three units that you have spoken about in Tamil Nadu, Orissa, what will be your capacity looking like? You see, our capacity at the beginning of the year was close to 725,000 metric ton, and total the company they own. Okay. In at the end of the year, it should be somewhere it's like 15,000. Close to 90,000 ton capacity will be increased with the three new greenfield plant and other brownfield expansions. Obviously. Okay. The medium capacity increase in plastic piping division only. Correct. Okay. All of this 90,000 tons, part of it has come up in December. The residual will come up over the next, in the current and the next month, right? Hello? Yes. Yeah, you are right. Okay. Sir, how should one given the demand scenario in, you know, in the east and south southern belt, how should one expect the ramp-up of this capacity which is coming up over the next 12 - 18 months? Well, we are spread throughout the country. Yes, sir. Sorry? Sir, just referring to these new capacities which are coming up, depending on your past experience, over the next 12- 18 months, can it reach to a 40%, 50% utilization? Is that a fair estimate? Not 40%, 50%. Overall, we achieve, or is it new capacity? Yes. New capacity coming only in the middle of the year. Some capacity may come in this quarter also. This 12-18 months, what he's asking for. Yes, you are right. It will be far better. Not even 40%-50%. It should go 60%+ definitely. 65% normally we achieve. Okay. Got that. Sir, you've also, you know, mentioned about this, you know, in the cross-laminated films, you have come out with new products and you're also looking at additional countries. How are the prospects in this segment? This year, the business will show hardly any growth. Next year we are quite optimistic that our business will grow in made up item and in export market will show good growth. We've got quite a good capacity lying idle. We'll be able to put better utilization of capacity next year. Okay. Okay. Sir, just one more thing. In terms of the performance packing division also, you've, you know, kind of looked at those special structure films for newer applications and you're also evaluating, expansion opportunities. How should one look at, this segment's prospects? No, this segment, our capacity is very small. We can produce only 12,000 ton per year. We are evaluating which capacity and where we put up. Up till now, we have not taken any decision. Once we take a decision, we will commit to all our investors. Okay. Okay, sir. Thank you so much, and I'll come back and thank you. Thanks. Thank you. Next question comes from Bhargav Buddhadev from Kotak Mutual Fund. Please go ahead. Yeah, good afternoon, team, and thank you for the opportunity. Sir, my first question is on how is the competitive scenario in the domestic market for cross-laminated films? We believe there were a few competitors who had come up with lower priced products. How is the scenario now? Scenario what? Competition. In terms of competition. Competition. Now they are selling in kilograms because in the market the quality was found quite inferior. Uh-huh. They only offered look-alike product which doesn't perform up to compare to our product quality. Okay. Are we seeing any improvement in terms of pricing over here, given that those competitors are exposed on their products? We are pricing product correctly. Our margins are in this segment continue to remain in single digits. Are we confident that we will see recovery? Margin single digit? No, I think margins are in two digit. No, no. Overall packaging business, I'm saying EBIT margin. Overall packaging, there are too many, three segments. When you say cross-laminated film, it is in double digit. No, for the overall packaging business, are we looking at a margin recovery, possibly in FY 2024? Yeah, sure. You see our protective packaging division, which also constitutes good part of the business in this, is working on various product developments, new applications. As a division, yes, we should show double digit definitely in 2023, 2024. Okay. Secondly, sir, if you look at the working, it's at about 36 days, or was it 30 days in FY 2022. Possibly this is on account of higher inventory days due to volatile RM prices. As RM prices stabilize, are we looking at working capital coming back to- Normal. Yeah, it should. To some extent, the growth in business will require more working capital, obviously. Okay. Yes, the level it is there, it should definitely come down. Lastly, sir, on the value added side, you mentioned CPVC had 32% revenue growth? Are there any other which you want to call out which have done well? No. There are many product of value addition, not only in plastic piping, in other division also. Overall, as we stated, our value addition business has gone up to INR 826 crore in third quarter. Okay. compared to INR 64 crore in the previous year, same quarter. Sure. There was 54% value growth in value-added item. Okay. Didn't come only from plastic piping. It came from other division also. Sure. Sure. Sure. Okay, sir. I'll come back in the queue. Thank you. Thank you. Ladies and gentlemen, if you have any question, please press star and one on your telephone keypad. Next question comes from Pranav from Equirus Securities Private Limited. Please go ahead. Oh, yeah. Thank you, sir, for taking my question. Sir, I wanted to understand and know about your thoughts on how the PVC prices are expected to move going forward. Because as we understand, globally, still the demand continues to remain challenging. India remains in a bright spot. Is there a possibility that imports might see dumping coming from a lot of other countries which are big exporters of PVC because of which going forward there is a possibility that prices may correct? Sorry, PVC prices and we believe PVC prices have gone down too much so that it can be corrected. It went down up to $650 from $2,100 internationally. Now it has come up to close to $950-$960. That overshoot when the, there's a big cycle change. Now after all, entering the cost position, we believe the prices are in range bound. $40-$50 up and minus, we cannot say. We don't see much upside also with the world economy not in great shape, but downside also due to cost push. Sure. Thank you very much. Thank you. Next question comes from Sailesh Raj from BNK Securities. Please go ahead. Yes. Sir, thanks for the opportunity. My questions are pertaining to Supreme Petro. So much of styrene monomer capacity has been created in China and a lot more capacities to get added, but still the prices of styrene are very volatile. If you see last six months from $1,250 per ton went down to $950. Again, now it bounced back to $1,250 per ton. By when do you expect the styrene prices will stabilize, sir? Styrene prices will always go and remain always volatile. Okay. The bulk freight rate from China to India is still at a elevated level. Earlier it was $110 per ton, but now also it is $80 dollar per ton. Whereas solid material can come at $30 dollar. Bulk shipping rates for liquids are still quite high. Mm-hmm. Fortunately, quite a good capacity coming at China. That will give a good support to our company for procuring our requirement of styrene monomers. Okay. Okay. Sir, can we expect this EBITDA per kg to sustain above INR 20, sir, for this year and the next year? Because nine months we have done INR 22 per kg. Per kg material. The overall EBITDA, overall, sir, for the company, EBITDA per kg, we have done INR 20. Supreme Petrochem, then they will reply you, dear friend. Sorry, sir? Supreme Petro will tell you correctly. Okay. Okay. Sir, how is the demand, current demand scenario, sir, now? The demand very, quite a good demand. Okay. By when do you think the new expanded capacity will be fully utilized? Last two and a half years, we didn't focus on exports. Also can you please guide us how much we are targeting in exports in this year and the next year, sir? Volumes. Our capacity of polystyrene has gone up to three lakh ton now. Okay. We believe that, we may export some 30,000-40,000 tons polystyrene next year. Okay. If we are running at maybe 80% capacity, 200,000 we'll be able to sell in India. Okay. Okay, sir. Okay, sir. Thank you. Thank you. We have a follow-up question from Ritesh from Investec. Please go ahead. Yeah, hi, sir. Thanks for the opportunity. Sir, just one question. There have been murmurs in the street about new management been indicated. What we see is there is a new HR head which has come in. Just wanted to, sir, understand the thought process of induction of senior management. Is this something ongoing? How should we look at it? That would be very helpful, sir. We have got appointed 1 HR head. Yes, sir. He's now functioning very well starting from first of August. Right. Sir, are we looking in, further induction at the top level? Basically given the company is growing and, manufacturing facilities are also expanding, are we looking to strengthen the core? We are having leadership development among our organization. Okay. Sure. Sir, would you be able to provide some color on our recent launches on cables, electrical side, and specifically on the cylinder side, how things have been actually progressing and industrial valve as well? Thank you. Oh, they will launch only in this month only. I have nothing to tell you today. Industrial valve and Cable shield has been launched this month only. It's too early to give any color about this. We anticipate good demand growth coming from both the product. Sir, would it be possible for you to quantify the size of the market that we are looking at over here and what sort of competition will be over there? We'll be conveying you on this schedule in the month of April. Sure, sir. Thank you so much, sir. Good luck. Too early to talk. Sure. Sure, sir. Thank you. Thank you. Next question comes from Hemant Manduskar, an individual investor. Please go ahead. Yes, sir. Please go ahead. Hello? Yeah, please. Hello? Yeah. Hello. Please. Yes. Hello. Sir, as per your management presentation, there is a capacity of Extruded Polystyrene which you are expecting to come up by March 2024. Sir, is that on track or has the capacity building started? Extruded Polystyrene? Extruded Polystyrene Boards. No. EPS. That factory will not come up, it'll not come up until in production. Okay. Are you expecting it to expand by one lac cubic meters by FY 2024? That I think they will be able to reply you properly. Okay, sir. Thank you. Speak to the team. Okay. Yes. Thank you. Next question comes from Rahul Agarwal from 增 益 Capital. Please go ahead. Yeah. Hi sir. Good evening. Thanks for the opportunity. Sir, first question was what could be the top two, three reasons for PVC resin prices to go up? Very good question. There was some plant went through difficulty and so there was tremendous shortage created because no new capacity came up and some existing plant went through difficulty. Some existing plant in U.S.A., it was a big supplier. They went on expansion, so they also closed their operation. Cumulatively for demand, the PVC we have never seen such a swing that prices went up from $700 to $2,100, and then came down again back to $650. Up journey started from April/May 2020 and continued up to October 2021. November onward the prices started falling. Sir, I was asking because of this December up move, the reason for that also was some plant shutdown globally, is it? Plant shutdown and somewhere the cost pressure, then they felt, okay, no worth, not worth producing to PVC. Okay. That plant. Prices dropped so severely that many supplier found that it's not worth running and making PVC full capacity. This is normal petrochemical cycle. Got it, sir. That plant is now already functional? Plants are by and large running. In the world there are good huge plants. There are 45 million ton capacity to produce. Some plants will always be either on maintenance or some plant may have some breakdown. Overall supply adequate nowadays. Got it, sir. Sir, the last question on packaging, the volumes actually degrew in third quarter by 12% YOY to 14.5, you know, tons, 14,500 tons. Any specific reason for this? Partly due to falling demand for cross-linked linear film product. I thought, sir, our products are better. Why is the demand going down? Better, there are so many look-alike product were there in the market selling at 30%, 40% lower than our price. There's no quality. That will come back now. Okay. Okay. Got it. Next quarter we should see some improvement. That's what you're indicating, right? Be it for sure. Okay sir. Got it. Thank you so much. I'll come back in the. Best wishes. Thank you. Ladies and gentlemen, if you have any question, please press star and one on your telephone keypad. The next question comes from Sonali Salgaonkar from Jefferies. Please go ahead. Sir, thank you for the opportunity. Sir, my first question is, with PVC prices firming up, do you perceive the risk of affordability getting impacted? We are seeing a very strong volume growth throughout this year, FY 2023, the first nine months, especially because PVC prices have corrected, which has led to increased affordability. Do you foresee that to reverse? Very right question. Do you foresee the reversal of prices? It may not go back to the same level of INR 72. In country, we are getting at INR 72 a kilo. We don't see the price going back to INR 72 a kilo. Understand. Our procurement cost has gone up from INR 72 to today to INR 90 a kilo. It came down from INR 160 a kilo to INR 72. Now currently it is INR 90. We do not see any reason for prices to come down from INR 90 to INR 72. No. So that's what I'm asking. If the prices stay firm for PVC, do you foresee the affordability to get impacted? No. Small changes in pricing in all polymers go on taking place. That is a part of business. Okay. Got it. In the last two years it was significant price rise and significant price drop. That's why PVC came in limelight. Okay. Got it, sir. From the demand side, are you seeing any weakness in the real estate or construction demand in Q3? You did mention that agri was very strong, have you seen any weakness in construction demand? We are seeing good demand coming from agriculture, housing and infrastructure, all the three segments. Got it, sir. That's it from my side. Thank you. Thank you. Next question comes from Keshav Lahoti from HDFC Securities. Please go ahead. Hi. Thank you for the opportunity. I just wanted to check one thing. Last time you mentioned that your capacity will increase by net-net 60,000. Overall it will be 80,000, but a plant from Maharashtra to Erode will transfer by 20,000. This quarter you have guided your capacity will increase by 90,000. What is the reason for the same and what will be your capacity segmental-wise in FY 2023 end? Yeah. Yeah. Capacity realignment with the Erode, et cetera. We have put up the new lines also. We have expanded the capacity for the plastic tote tank. That's why the overall now for the current year, the capacity increase is better and now visible. Everything will be in production by end of February, mostly. Our segmental capacity for the end of the March 2023, which is close to 8,15,000 metric ton, the major it will be in the plastic piping system, 6,10,000. Industrial product, 83,000. Packaging product, 90,000. And consumer product, 30,000. Okay. Understood. Sir, now as PVC resin prices have pulled up from INR 150-170 odd levels to INR 90 level, do you think now there would be some demand impacted of CPVC? Impact on demand on CPVC? No, CPVC, as we told you, we've seen a growth of 32% nine months. CPVC demand is growing in the plumbing segment. Housing is continuously requirement continues. We don't see any demand downside also. We don't see a downside. Okay. Okay. One last question from my side. Again, I would like to ask you on resin prices, is it fair to assume that resin prices will settle at 90 level, or do you think the volatility will continue in this? In all the polymer prices, not only PVC, all the polymer prices volatility remain. It's all commodity product. Prices will always remain volatile. If the volatility is only three, 4 INR a kilo, minus or plus, doesn't make much difference. If it was serious, PVC came in limelight. It went up from 70 INR to 160 INR, and then came down to again 72 INR. Otherwise, it's nothing great now. It normally occurs in our business. Now it is normal business cycle. Okay. Thank you. That's it from my side. Thank you. We have a follow-up question from Rajesh Ravi from HDFC Securities. Please go ahead. Hi, sir. As you mentioned in the earlier question, the pipes plastic capacity is now increasing to 610,000 by year-end. Even if I do 25% volume growth, you would be closing the year with close to 500,000 tons of volumes for FY 2023. That would mean you will have some good amount of, you know, capacity surplus for next 2-3 years. Just wanting to understand how would that impact or lead to a slower CapEx program for you for next 2-3 years, and you would focus more on asset sweating? Here you see the capacity what we are talking is installed capacity per annum. Mm-hmm. As years went past, our utilization remained around 65% or so. Correct. Effectively, if you have 800,000 ton capacity, and if you do a 65%, then you require further capacity. The number of SKUs, the items, the change of product line. Mm-hmm. Not slowly, yes. Demand not evenly throughout the year. Right. Right. Understood. Right, working capital in company, so we don't create inventory beyond LCL. Okay. Put together, capacity utilization cannot be or will not be more than 30% to 70%. Mm-hmm. Correct. sir, would you. Apart from that, we also need to expand geographically to make our product more reachable to the various part of the country. Okay. Which of these geographies, Which markets do you believe that your reach is still, you know, not to the optimum level that you expect it to be? We have to explore throughout the country. There's opportunity for us throughout the country. Okay. Mm-hmm. Mm-hmm. Mm-hmm. There are 6,000 taluka, 6,000 taluka in the country. Okay. Every state there are many taluka where our product is not found. Mm-hmm. Okay. Understood. Sir, in terms of macro numbers, would you have any, you know, any view on how would have demand been shaping up in FY 2023 for plastic pipes and more so, you know, in terms of PVC and CPVC growth for the industry this financial year? Overall for the country this year, we are told by the ramp maker the country may see a growth of 21% by volume. Okay. We are saying we will grow by 35%. Mm-hmm. Country also will grow by 21% by volume. Country had a degrowth continuously for last 2020, 2021 and 2021, 2022. This year country has entered into growth path. Sorry, you mentioned that Supreme will deliver 35% volume or 25% volume growth? We anticipate that we will grow 35% plus in the plastic piping system. In the plastic piping, right. Country is expected to grow by 21%. Okay, okay. Understood. Anything on the CPVC, similar numbers? What sort of volume growth the industry is looking at? CPVC, we can tell you about our company. We have grown nine months 32% and the country growth may be around 240,000 ton. Okay. This 32% growth is volume or revenue for you, sir? In volume. In volume terms. Okay. Okay. Yeah, and going forward, are you expecting that with prices softening compared to the volatile numbers earlier, the agri market should open up big way and that is where the volumes can remain buoyant for next additional quarters? Demand will remain buoyant, coming in the peak irrigation season, that is April, May. Mm-hmm. If nothing untoward happens, because, the prices are today are down by 20% compared to last year January. Right. Right. Final product selling price is 20% lower than last year January. Mm-hmm. It became very affordable to the farmers. Correct. What we understand is that the sales, rural or agri sales have relatively much lower margins compared to the plumbing sales. Would that mean that while volume numbers for the industry may look up, margin profile for the industry and major players may taper down? Margin will remain normal. Pipe is farmers pipe prices are always kept low. Correct. Blended margin, will it be impacted? I'm just trying to understand. We don't make only agriculture pipe. We make varieties of products. Correct. Correct. Our housing is bigger than agriculture. Mm-hmm. Any ballpark breakup, sir? How much would be your housing sales or plumbing sales as a whole? Breakup we do not know because agriculture pipe is used for housing also. Mm-hmm. Mm-hmm. Mm-hmm. Okay. Great. Great, sir. Lastly, one more question, this Meghmani Finechem, CPVC resins, which is now getting available in the market, and next year DCW resins should also come in supplies. How would they change the CPVC dynamics? The re-requirement or import may go down. Okay, would it also bring in more players, more CPVC pipes manufacturers in market? Yeah, there are already many are there. Mm-hmm. No, why I'm saying this is currently the resin supply is well concentrated and few have only... This is more of a moat sort of thing, and hence the pricing of CPVC also remains elevated. Can that see a risk? We don't see. After all, CPVC supply was not a problem starting this year. The problem was there in previous year due to the plant shutdown of Kaneka. Correct. Correct. For now this year, starting from April, there was no problem supply. No, I'm not talking about Supreme, sir. In general for the industry. In this year, sir, there was no problem getting CPVC resin. Nothing. Okay. Okay. If a local problem come up, then to that extent import become go down. Mm-hmm. Mm-hmm. Okay, great. Great, sir. We expect it to be that way. Yeah. Great, sir. That's all from my end. Thank you. Thank you. Next question comes from Sujit Jain from ASK Investments. Please go ahead. Sir, if I look at your volume growth five year CAGR from FY 2014 to FY 2019, it was 8%. Of course, this was a sluggish real estate period. Over the medium term, five years hence from today, let's say FY 2023 end, what kind of industry level volume growth one can expect? Of which segment? For overall piping segment. 15% our company should grow. 15% you're saying? 15% volume growth should go next five years. O- Yes. That is mainly on the back of housing demand, that is plumbing pipes, is it? Our same infrastructure, agriculture, all segment. Okay. What would be your normalized margins at the company level overall now that the inventory gains and losses are out broadly? Overall should be Between 15%-16% in normalized level. Okay. In terms of your dealer distribution network, where that numbers stand today? Now, we go on increasing our reach. We go on increasing number of distributors here. Now, overall we've got nearly 4,373. Okay. This number. That is the distributor number. In terms of dealers? Distributor, dealers, there are each segment they've got different number of dealers. In piping system more than 70,000 retailers. Okay. In every business our distributor has got dealers, so we have got to reach to maybe more than 250,000 retailers. Overall, we don't keep. I don't have numbers to just tell you. Distributors sell, many of them sell to many retailers. Penetration-led growth will not be there for Supreme because Supreme would have reached to most of the distributors and dealers in India. No, it's not the case. I know what you mean. Reach-wise, you see, India is a large country. It's mentioned in earlier call, the answer key, India has more than 6,000 talukas. There are many talukas and districts. We are very clear that we are not present in all 6,000 talukas. We are present in many areas. That's why our sales are the highest in the country. This 4,300 number can potentially go to what? 5,500, 6,000? No, we don't keep any limit. Right. After there are 6,000 talukas, we've got several products which are sold through distributor network, not only plastic piping system or furniture or tarpaulin or material handling system or Prakriti packaging product. We have many, many more number of family members going to be added. Right. Did we hear it correctly when you spoke about CPVC demand in India at 240,000 tons? Around like that, yes. It is restricted only to plumbing. Right. Very small segment only. Right. All of your competitors are entering into bathware and faucetware segment. Supreme has not done that. Yeah. What is the strategy? We are already there. Our brand is very strong. Aquacrate brand is very strong. Not, not metal faucetware. You are there in plastic faucetware. Aquacrate, we are not in metal. Would you in future look to. We have got as of today, no plan to go to metal. Right. If we have plan, you will be informed to all our partners. Right. One last question, capacities coming up in east. You've put up capacities. Astral has put up capacities. If in one particular region large capacities come up, would it impact the sales in that particular region? Any region, we've got to still re-reach only in 12 states. Still 29 states are there. We have to reach in many, many more states. Today we are operating 28 plant, we'll be opening new plant in new location, which we will convey in the month of April. What is the potential of fittings revenue per annum eventually? Sky is the limit. You make good quality product, you can go and sell it. One last question, your region-wide split of your volumes in piping division? North, West- We are- East, south. We are present throughout the country. Any% you would like to give us? I don't have number before me, so I can't give you. I cannot give you a wrong. I don't want to give a wrong numbers. Is it west and south-heavy? Is it west-north heavy for the company? I say we sell throughout the country. Sure, sir. Thank you so much. All the best. Thank you. I request the participants to ask 2 questions in the initial round and join back the queue for more questions. Next question comes from Venkatesh B from Axis Capital. Please go ahead, go for it. Yeah. Thank you for this opportunity. Most of my questions have been answered. Just a very simple question. I know it is still early days and after the full year numbers are over, you look at FY next year, FY 2024. As of today, given that you will do almost 25% kind of volume growth in the current year, can you do double more than, you know, 10% kind of volume growth next year? Is that a possibility? I think we too are not. Basically, we may grow 12% next year. 15%. Okay. Okay. Right. Okay. If raw materials do not fluctuate too much, that is PVC prices remain where they are, we should be in that 15% to 16% kind of EBITDA margin band. We hope so. We hope so. Okay. Thank you. All the very best. Thank you. Next question comes from Utkarsh from ITI Securities. Please go ahead. Yeah. Yeah. Hi. Good evening, sir. sir, like, based on the current demand environment, can we expect to clock more than 20% volume growth for the pipe segment in the current March quarter period? Sorry, say it again. Based on the current demand environment and the resin prices, can we do more than 10% volume growth on a year-over-year basis for the pipe segment, in this current March quarter period? For this January, March? Yes, January to March, sir. Versus previous January. We'll do more than 10%. We'll do more than 10%. Okay. Last January, March, we said around 97,000 ton. Yeah. Mm-hmm. We'll do more than 10%. Okay. Sir, like, you have mentioned the volume growth for the CPVC for the nine month. Sir, can you also quantify for December quarter? Yeah, participants kindly stay connected while we connect the management team back on the call. Welcome back the management team. Please go ahead, sir. Hello. Yeah, please. Yes, sir. Sir, I was asking for the CPVC volume growth for December quarter period only, not for the nine month. We don't give number beforehands for the December quarter alone. Okay. Sir, lastly, sir, like, how is the competitive scenario in the pipe segment at the moment, whether the small and the mid-sized players have become more aggressive in the market, after easing of the PVC resin supplies in the domestic market? We don't compete with your place. I've got no view on her. We only know that our growth is 30%-35% and country growth is 25%, 21%, so our share must have gone up. Mm-hmm. Because we are introducing several new varieties of product, that also facilitated better growth for our company. Okay. sir, lastly, like, our number of pipe distributor or channel partner actually came down from FY 2021 to FY 2022 as per the annual report. Just wanted to know whether in this nine month of FY 2023, have we done any addition of five new distributors? What would be that number? I don't think any new number. We are mentioning same number, 13, 20, 13, 20, I think. Because total 13, 20, 13, now 13, 19. Okay. It was INR 1,250 on 31st March 2022, so our 39 distributor. Okay. Thanks a lot, sir. Okay. Thank you. Next question comes from Nikunj Khanna from ASK Investments. Please go ahead. I repeat. Question comes from Nikunj Khanna from ASK Investments. Please go ahead. There is no response. The next question comes from Nirav Shah from Aryan Capital. Please go ahead. Hi, sir. Thank you for taking my question. Sorry if the question is repetitive. Just wanted to understand, first thing is the rural demand. How do we see the rural demand right now? Secondly, what would be our view if China opens up, and then what would happen to the raw material pricing scenario over there if China opens up? Because I believe imports would increase from there. Just these two questions. Two question. On rural segment, we entered in rural Asia since we have two item, the agriculture pipe and our cross-laminated film for various agricultural application. In both the segment, we are seeing good demand coming from rural sector. Coming to the second point, we believe that if China is now done with strong restriction on COVID movement and China economy opened up, come thirtieth of this month when the China opens, the market expect the polymer prices may harden. country requires import. Okay. Otherwise, country no material to run the plants. Previously, at least, we are too much dependent on imports. Our 60% of our requirement has to come from imports. Okay. You're expecting prices to go up? May go up little bit. Not much. There is no reason for price to go up too much also and too much down also. Some small change will always take place. Okay. That would be towards the end of the current month, right? Sorry? As you said, the China will be opening up towards the end of the current month. Yes, in New Year Lunar holiday is there. It is held by 27. The China will open fully from 30th, that is Monday, and we expected that all polymer prices in domestic market in China will harden because the demand will open up very nicely after the Lunar New Year. This is the market expectation. Nobody can say, I can't predict correctly what will happen in China. If they supply more material in India, they're welcome, because we are short of PVC in any month in the country, and China is a big supplier. Understood. Understood. With that is from my side, sir. Thank you. Thank you. That will be the last question for the day. Now, I hand over the floor to management for closing comments. Thank you very much. Thank you, sir. Thank you, Ashwini. Thank you, ma'am. Thank you, sir. Ladies and gentlemen, this concludes the conference call for today. Thank you for your participation and for using Chorus Call Conference Service. You may disconnect your lines now. Thank you, and have a pleasant evening, everyone. Thank you, Prashasti, and everybody. Thank you very much. Thank you, sir.