Ladies and gentlemen, good day and welcome to the Supreme Industries Q2 FY25 earnings conference call hosted by DAM Capital Advisors. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Asim Bharde. Thank you, and over to you, Mr. Bharde. Thank you. Thank you, Ridvi. Good evening, all, and thanks for connecting to Supreme Industries Q225 results call. From the company side, we have a senior leadership team who will take us through the Q2 performance and give us a brief comment, following which we'll open the call for questions. Thank you, and over to you, Mr. Taparia. Thank you, Mr. Somani. Thank you very much. I'm M.P. Taparia, Managing Director of Supreme Industries Limited. I, along with my colleague, P.C. Somani, CFO, and R.J. Saboo, Vice President, Corporate Affairs and Company Secretary, welcome all the participants who are participating in the discussion of the unadjusted standalone and consolidated financial results for the quarter and half-year ended 30th September 2024. The standalone results and the consolidated results are already with you. I'll be brief on company product operating performance and other highlights. The company sold 138,077 tons of plastic goods and achieved net product turnover of INR 2,236 crores during the second quarter of the current year against sales of 137,763 tons of plastic goods and achieved net product turnover of INR. 2,274 crores in the corresponding quarter of the previous year, resulting in volume growth at fair level and product value degrowth of around 2%. The company sold 311,912 tons of plastic goods and achieved net product turnover of INR 4,848 crores during the first half of the current year against sales of 286,307 tons and net product turnover of INR 4,614 crores in the corresponding half-year of the previous year, achieving volume and product value growth of around 9% and 5% respectively. The consolidated operating profit and profit after tax for the second quarter of the current year amounted to INR 347 crores and INR 207 crores as compared to INR 380 crores and INR 243 crores respectively for the corresponding quarter of the previous year, resulting in a decrease of 9% and 15% respectively. The consolidated operating profit and profit after tax for the half-year of the current year amounted to INR 772 crores and INR 480 crores as compared to INR 723 crores and INR 459 crores respectively for the corresponding period of the previous year, recording an increase of 7% and 5% respectively. The business scenario of all the product segments of the company for the second quarter ended 30th September 2024 as compared to the corresponding quarter of the previous year has been as under: plastic piping system business decreased by 1% in volume and 5% in value terms. Packaging product segment business grew by 11% in volume and 14% in value terms. Industrial product segment business decreased by 2% in volume and grew by 1% in value terms. Consumer product segment business decreased by 8% in volume and 1% in value terms. The overall turnover of value-added product went down to INR 907 crores during the current quarter as compared to INR 942 crores in the corresponding quarter of the previous year. The company has a total cash surplus of INR 674 crores as of 30th September 2024, as against cash surplus of INR 1,178 crores as of 31st March 2024. Going forward, the business outlook: plastic pipe system business growth was severely affected due to extreme volatility in previously risen prices, low spending on infrastructure in the first six months by governments, and extended monsoon. Due to late-season shipment movement blockage, the container productivity went down extremely. It led to a steep freight increase from Asian countries to India. 60% demand of UC18 in India is made from imports. Out of that 66% volume, more than 80% import comes from Asian countries. This has led to an increase in the cost of UC18 between mid-April to 30th June by 19%. As the freight rate started moving down, the prices took a deep cut between 1st July to 16th August. The prices then went down by 17.5%. This type of price volatility in a very short period led to de-stocking in the entire trade channel. As the rainy season got extended, the demand for agri pipe also remained subdued in the month of September. The government spending on infrastructure also has gone down in the first half of this fiscal year. Thus, the company is required to revise the guideline of 25% volume growth in plastic piping system to be between 16%-18% for the year. Now, the price volatility is price trend of UVC will sustain or go up marginally. Business has restarted. Monsoon has withdrawn. The government also announced an increase in infrastructure spending in the second half of this financial year. The company is fully geared to cater to increased demand of its product with increased available capacity from various ongoing brownfield expansions at multiple locations. The new greenfield unit dedicated for production of varieties of industrial ball valves has commenced commercial production effective from 1st September 2024. The company has been allocated required land near Patna in Bihar and also purchased required private land at Kathua district in Jammu and Kashmir for putting up plastic product complex, including plastic piping system. Execution of project at the location shall be taken in hand during the next financial year. With completion of all the expansion plans undertaken in hand, total installed capacity of piping system division shall reach 835,000 tons per annum by the end of March 2025. The business of post-event film has started showing improved performance with improved demand for tarpaulin and penetrating newer export markets. The division expects about 15% volume growth in the business segment for the year with improved profitability. Trends are coming for the newly developed cloth plastic film, which has good export potential. The commercial launch of the product will be expected by December 2024. The company expanded and introduced various new models of chairs and cabinets in its furniture segment. These new models have been introduced in the first half of fiscal year 2024-25. The division continues to add showrooms to improve awareness of the range of premium products. Total strength of showrooms has reached 328 by end of September 2024 from 308 showrooms as of 31st March 2024. Focus on extending distribution channels and adding more retail outlets continues. In the industrial component division, business conditions are improving, and the company expects demand scenarios to further improve in sectors of home appliance, white goods, which constitute a large part of this business. The division is also working to expand its customer base and develop the business in new sectors and witnessing positive outcomes. The material handling division is continuously expanding its customer base, introducing new products, and also investing in new machines and more. Orders have been placed for requisite equipment for bubble guard boards and capacity expansion of EP ROC. The division will continue to strive to enlarge its customer base and product portfolio, paving the way for more rate growth. Composite LPG cylinder division continues to cater to existing overseas customers and also participates in various export inquiries. Supplies against new LOIs issued from Indian Oil Corporation Limited are taking place regularly and expect to receive orders for additional quantities also. Response to the company's effort to engage with the distribution system of LPG cylinders with commercial activities is positive. The protective packaging division is doing good business, and its focus on developing customized solutions is working well. The strategy to work more on fabricated products is yielding positive outcomes. The division is continuously increasing its fabrication capacity in various geographies to cater to increased demand. Expansion activities are undertaken at Jadcherla, Telangana, Malanpur in Madhya Pradesh, and Kharagpur in West Bengal, which shall be in place during the third and fourth quarter of this financial year. Negotiations for a suitable location for a new greenfield site near the port in the western region to cater to export opportunity and domestic demand are yet to be concluded. The Protective Packaging division continues to utilize its capacity optimally and work on improved product mix and cost-efficient value-added product. Export opportunity remains the focus area, and the division is able to penetrate some new countries. The company has placed equipment orders and also awarded civil construction work for making windows at its new site in Kanpur Dehat in UP. In the first phase, the company is now planning to put up entire window-making facility in Kanpur and cater to customers in Uttar Pradesh, Uttarakhand, and NCR area. The company expects to supply windows in the first half of 2025-2026. Looking at the business outlook and future growth opportunities, the company has made capital commitments, including CapEx commitments of around INR 1,500 crores. Total cash outflow during the current year is not likely to exceed INR 1,000 crores and shall be funded entirely from internal accrual. This is a brief and overall summary for the quarter and half-year ending under reference. Thank you for your patience. Now, I and my colleague, P. C. Somani, and R. J. Sabu, are available to reply to various queries raised by all of you. Thank you very much. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Please limit yourself to two questions per participant. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Rahul Agarwal from Ikigai Asset Management. Please go ahead, sir. Yeah, thank you. Good evening, sir. Good evening, sir. Sir, first question was, would you like to share the inventory loss for the quarter? Maybe around INR 35-40 crores. Okay. Secondly, in the first quarter conference call, you had mentioned that the polyethylene gas piping systems will see some kind of launch in October. Could you share some progress report on that, please? Only gas system? Yes, sir. No, it is a good progress. We anticipate that we will get order in this quarter. Sir, how does the bidding pipeline look like? Could you share some kind of numbers in terms of what's the pipeline overall for the industry? Pipeline of what? Gas pipeline. Gas pipeline. The gas pipeline is a plastic pipeline used below the ground. Now, we have developed a pipe, a composite pipe, which can be also used above the ground. The market is around 100,000 tonnes annually, but we have still not participated at all, so I can't say much about it. But as our product is now approved by the sovereign inspecting agency, we anticipate to get order from this quarter. Got it, sir. And last question was on CPVC resin. Like on the TV interview, you shared some numbers on PVC resin's import and domestic production. Could you share what is the CPVC resin local production and how much is the import today? CPVC resin local production, yes, sir. We don't know. We are getting from local also imported also. Local also there to import PVC. They don't make PVC. The local supplier whoever are making are importing PVC and then chlorinating and offering CPVC. Our material then also is being imported. Sure, sir. But how much would be CPVC compounds available in terms of tonnes in India? I don't buy compound. I buy only resin only. But overall, the market is around 220,000 tonnes annually. Okay, sir. And lastly, sir, just on PVC resin, you mentioned that the import still remains like 65% of overall consumption. Let's say three, five years out, do you think the Indian, the large business houses which have announced some new capacity, do you think India can be self-sufficient in PVC resin production? No, no. They announced the expansion will happen in 2026, 2027. But when the capacity happens also, India will still require to import minimum 200,000, 2 million tonnes. India remains short of 2030 with the current forecast. Got it, sir. Perfect. Thank you so much, sir. All the best and wish you a very happy Diwali. Thank you. Thank you. Same to you. Thank you very much. The next question is from the line of Shravan Shah from Dolat Capital. Please go ahead. Thank you, sir. Sir, I'm just trying to further understand in terms of our lowering the volume guidance for FY25. So if I'm just doing the math, the ask rate for second half is for plastic pipe segment is close to 22%-22% kind of a growth required. That means that 92% kind of a utilization. So there are two questions I'm trying to understand. In September, was our volume in plastic pipe segment much better than the July, August? And in terms of the October, is it much better than the September? And if possible, how we can break this in terms of the overall third quarter, how much growth are we looking at? I'll tell you. Quarterly number in July was a very bad month. In July, our business had gone down from 34,710 to 27,700. It dropped by 20% in the month of July, and I guess there was marginally 3% growth. In September, it was more than 15% growth, and now onward, normally second half is always better. Our last year second half grew by 28% by volume. In 2022, 2023, we grew by 38% by volume. Second half is always better than first half, and now, through this talking took place in the last four months, that is June, July, August, September, we anticipate good growth going forward compared to first half, so we are confident when we are revising guideline to 16, 13%, we are quite confident. Unless some very untoward event takes place. Got it. Got it. And second, in terms of the going forward also, previously we talked about even from FY25 onwards, so FY25 onwards, we were looking at broadly 12%-15% kind of volume growth. So that guidance remains intact. Got it. And sir, on the realization front in plastic pipe segment, on Q-on-Q basis, 6.1%, that is a significant increase. So now, how do we see third quarter in terms of the pricing? Will it form for us? Will it be some decline will be there or it will be a flattest to some improvement? We don't anticipate PVC price to go down now further. So when PVC price is not going to go down, we do not see any reason why the value will decline compared to the volume growth. Okay. Okay. Okay. Got it. Got it. Is it possible currently what's the total capacity, though we are mentioning that by FY25 we will be for plastic pipe, we will be 835,000? But currently, how much it is? It may be currently maybe around 790,000. Okay. Okay. Got it, sir. Thank you and all the best. Thank you very much. The next question is from the line of Utkarsh Nopany from BOB Capital Markets Limited. Please go ahead. Yeah, good evening, sir. Sir, yeah, sir, first thing I wanted to understand, what would be the peak capacity utilization for our pipe facility during strong demand season? Actually, 25%. Okay. Sir, because you mentioned that our current pipe capacity is around 790,000. And if we do the math, then it looks like that we need to operate at close to around 90% utilization rate for the second half of FY25 to meet our guidance. So, now eventually by end of September. Okay. Capacity also increasing in the second half further. Every month we are increasing. From 790 go to 835 every month, we'll go on adding capacity because this is going on brownfield expansion, not a new greenfield. Yeah, got that one, sir. Sir, second thing, our pipe volume has grown at around 8-9% rate during pre-COVID period. Given the current economic scenario, just wanted to understand from you, what would be the sustainable pipe volume growth rate in your viewpoint, say, over the next two- to three-year period? I'm not asking for FY26 or 27, but from medium-term perspective, what kind of a volume growth we can look for? I can say normally I could talk country growth. Country growth should remain between 10-12% going forward next three years. Okay. Country growth. Sir, my last question is that what would be the sustainable margin guidance for our pipe and packaging segment? Piping segment will be between 14%-16%. And so for packaging segment? Packaging is always better. Sir, can you quantify because our packaging segment margin has remained pretty weak for the last few quarters, but what kind of a run rate we can look for going forward? Between 16%-18%. Okay. Thanks a lot, sir. Thank you very much. Ladies and gentlemen, to make sure the management is able to answer every question, please limit yourself to two questions per participant. Thank you very much. The next question is from the line of Ritesh Shah from Investec. Please go ahead. Hi sir. Thanks for the opportunity. Couple of questions. Sir, first is any update on the anti-dumping duty which is expected on PVC? And secondly, what we hear is the quality control order on PVC got postponed. Likewise on EDC, ethylene, and VCM. Sir, any updates from a regulatory side over here which can help on PVC pricing? Actually, I have a question first I must tell you. So anti-dumping duty, the first people to reply will be Astral Limited. So in that, we are not involved parties. And on this BIS certification, we believe the BIS will require to extend it up to as of today, it is up to 24 December. Up to 24 December, very few companies have been qualified. Country-dependent, more than three million tonnes PVC import. They are qualified up till now only five suppliers. If they don't extend it, then there's going to be huge crisis in the country in January-February. There is no PVC. PVC price will go up 100% more. We have to close down the capacity also. We don't anticipate such scenario. I don't think any such long decision will be taken. We are dependent on import. Today, you can't restrict all the people of the world not to supply to India. No way. PVC, very important material required for farming, required for housing. Okay. Sir, that's very useful. Sir, my second question is we have downward revised volume guidance. You indicated we are confident on second half volume growth of 21%-24%, the implied numbers. Sir, I was just trying to get a sense on how does the agri order book stand because just going through my notes, a couple of quarters back, we had indicated that we had INR 480 crores of confirmed order book from the Maharashtra government. Is it possible for you to provide some color on the agri order book and when we say that lower spending by government in first half, what all states we are referring to over here? Just trying to get more comfort on the volume throughput into second half. Agri sector, it was only for infrastructure. There are two, we don't miss two things. Agri sector, separate subject, and Maharashtra order was for infrastructure. For providing water, health. So they got to do infrastructure. And they are hardly buying anything. Okay. Sir, what I'm trying to understand is what is the current order book position which gives us confidence for volume growth for the guidance that we have given? We would have a huge debt shedder. We would have more than 1,000 distributors who are marketing our product. You would lose network of retailers, lose network of plumbers. They require now for housing. You require the product. It's a very important product for housing. In housing, functional area, kitchen, and bathroom. You cannot use anything without pipeline. Our essential product. Housing construction going on properly. Government is also building 30 million houses. They require piping system. Correct. Sir, if I can, can I squeeze in one more question? Ask me what you want. Yeah. Sir, so basically when we have given the guidance of 580-590,000 for full year on piping side, sir, what part of it would be government-driven and what part of it would be agri? Would it be possible for you to give some broad ballpark numbers over here? Very small government-driven. Very small government-driven. We don't do more than 2-3 thousand tons business of government every month. We are a small player in government business. We don't participate in many government business. Agriculture demand will be there definitely. Now, next five months, demand is here for agriculture. With the monsoon, it will be down. Thank you very much. The next question is from the line of Keshav Lahoti from HDFC Securities. Please go ahead. Thank you for the opportunity. So firstly, I just want to clarify the numbers which you have given. It's 20% degrowth in July, August, degrowth is 3% year on year, and September more than 15% growth. Have I heard it right? You are right now. Okay. And how has been the things shaping up in October month? October now, it is only 20 days the first. Yeah. So how are the details? Are we doing double-digit kind of growth? Can't work on day-to-day basis. As I told you already, that we'll be growing more than 40% in second half. We have grown 38% in 2022, 2023. Last year, we grown by 28%. Second half is normally a better business period for our piping system. So on 16% growth, we must grow by 41% by volume. We are very confident. Understood. But in last quarter, you have guided your CPVC volume growth was 40%. How has this number increased to? CPVC volume growth, we are 33% for six months. 33% for six months. Okay. That is very interesting. And sir, what is your overall volume growth guidance? Pipe, you said 16%-18%, but overall? Overall, we may grow between 14%-15% for the company. Okay. And one last question, sir. What is the sense on the channel inventory? Is it picking up? Channel inventory. It will pick up. It will pick up. Channel inventory, they are. Channel inventory is huge. In general, there are so many distributors, there are so many retailers. But because they bought less, we are getting figures from the raw material makers that their sales were poor now. So we definitely believe that sales must be emptied at any moment this season time. So normally, there are people that demand will be better. There's no rent. So housing actually will also pick up big way. And the big festivals are going. The Navratri, Dasara, Diwali big festivals will be going after October. So November, November, they are all business months. And the kharif crop is going to be harvested. And fields are empty. They require money to be invested in development work. And fortunately, this year, the water reservoir, the 155 big reservoirs of the country, they are full 88%. So they have enough water for the farmer to invest money to lay pipeline. Thank you very much. The next question is from the line of Praveen Sahai from Prabhudas Lilladher. Please go ahead. Yeah. Thank you for the opportunity. Sir, the first question is related to the margin. If I adjust your inventory loss, your margin is nearly around 15 and a half or 15.6%. So with that normalization in the PVC resin prices, second half, are you expecting similar kind of a margin? We are given guidance to be outside between 14 and up to 15.25%. Now, there's always some uncertainty. But we are quite comfortable. So for the full year, you are saying 14 and a half to 15.2%? 15.25% with no what can happen, nothing. Nobody knows now. Better to your safe side. Okay. Fine. Sir, the second question is related to the realization especially. In that, we had seen some correction as well in the realization in the piping segment. So is that YoY side? Is that some element of a product mix also there? I can't follow your question. Can you just repeat your question? I do not understand. Sir, the realization of the plastic pipe segment on the YoY side, it's 4% down. And QoQ, it's 6% up. And if I look at the fluctuation in the PVC resin prices, there's been also there. And you had also given some fluctuations in the quarter, upside in the PVC resin prices as well. But is that the Q2 versus the last year Q2, there is a product mix change as well? There's so many SKUs, so many systems. So many. Can't track that way. So it's not only because of PVC resin prices, it's also the product mix change which has led to the difference in the realization. Value added item must have been better. Otherwise, the margin would have gone further down. And you are able to maintain this value-added mix, 40% of value-added expected to be maintained at the company? Might have been better value-addition in the month of August, September. No, sorry, sir. Repeat. Might have been better value-addition sale in the month of August and September because in the pipe prices, the margins have been completely eroded due to fall in the resin prices. So we could see sustained margin to a respectable number due to better sale of value-added item in the month of August and September. Okay. Okay. Got it, sir. Thank you. Thank you. Thank you. Thank you. Thank you very much. The next question is from the line of Sonali Salgaonkar from Jefferies. Please go ahead. Sir, good evening. Thank you for the opportunity. Sir, my first question will be regarding any segmental flavor you would like, by segmental I mean end user, you would like to highlight in terms of A, in this quarter, which segment did not perform well? And secondly, going forward, maybe in the second half, which segment do you expect to perform better? Segment, I think the plastic pipe system will work better in second half. Then packaging segment, business will be better second half. Furniture segment, I think all the divisions will do better in second half. Normally, all divisions do better in second half. Sorry, sir. I meant from the point of view of either housing or infrastructure or agri. Infrastructure, we are not a big player. But as a small player, that business was eroded in the first half. So that business may grow again by 10-12 thousand tons. But we are a small player in infrastructure. Our major business is housing. And next is agriculture. Infrastructure is a poor third. So, was it the case that housing was not doing well in July when we had this degrowth of about 20% volume? July is a rainy season. July normally remains lower. Sir, year on year drop. Year on year, with the prices coming down, so the whole pipeline, they were reducing their own stock. They all lost money. When prices are coming down by 17.5%, then my distributors also were stocking goods. They all lose money. Understood. Sir, so basically, is it a fair understanding that housing is doing well, but this was predominantly due to destocking? You are very correct. Okay. Sir, I just wanted to confirm, August 3%, was it a growth or a degrowth in volumes? August was 3% degrowth. I guess overall growth was 3%. It was growth. Yeah, it was growth or degrowth was 3%. As every growth. Okay. So, July a drop of 20%, August a growth of 3%, and September growth is 15%. Understood, sir. Sir, thank you for this clarity and all the best. Thank you. Thank you very much. The next question is from the line of Sreenath V. from Bellwether Capital. Please go ahead. Hi sir. Wanted to find out how CPVC is growing. Is it growing faster than the piping division? Also wanted to understand the anti-dumping duty on CPVC has come in and are the prices stable as the channel started accepting inventory. Just wanted your views, sir. Now, CPVC price is stable. There is no drop, no increase. The anti-dumping duties have come mostly on Chinese suppliers and on some South Korean suppliers. We are particularly in India getting materials from USA, Europe, Japan, and Thailand. There is no anti-dumping duty imposition on those countries. Got it. And growth, sir, in CPVC, how is it playing out in this demand environment? CPVC, how much? How is the growth? Yeah. Growth, yeah, I don't know. Maybe 10%-12%. Our company grew by 33%. Oh, wow. So in this quarter, we saw 33% growth in CPVC volumes. Half yearly. In this quarter also, we have grown better. Okay, sir. So the CPVC market has been somewhat stable from a demand perspective. The demand weakness is largely in PVC. Is that a fair understanding, sir? CPVC in India is used for plumbing. Plumbing is not affected by rainy season. Plumbing is done inside the bathroom. So the demand doesn't get affected. The housing was going on properly. Got it. Got it. So CPVC business grew double-digit even in this quarter. Our company has a good position in CPVC. Perfect. Perfect. Thank you, sir. Thanks a lot. Thank you very much. The next question is from the line of Sneha Talreja from Nuvama Please go ahead. Hi, good evening, sir. Thanks a lot for the opportunity. Sir, just two questions from my end. One is related to you have mentioned that you will be manufacturing the entire window system at one of your plants. Could you elaborate on this? Because earlier, you were looking to manufacture only window profiles. How big is this opportunity? And what are the numbers we can see from this particular business? We will be selling not selling profile. We will be giving customized window as per the requirement of any project. We will be making a ready-made window as per the size and supplied to the customer's house. We will be installing the window also, so with our 5,000 capacity, we may be able to produce by overall average some 320,000 windows every year, and we will be restricting ourselves to the market in UP, Uttarakhand, and NCR area, and we are going to make windows only in our plant in Kanpur, so we are also wanting to learn the business. How big is this market currently? And who are the players? Market, there are many players. We are the last entrant. There are many players. Market may be around 150,000 tons. And we are putting capacity of 5,000 tons. Understood. Sir, lastly, on the plastic pipe division, while most of the questions are answered, just related to inventory side of it, according to you, what must be the channel inventory? And has already channel started picking up inventory in October? Would that have normalized, or is it yet to normalize? I believe channel inventory must have been now normalized. Must have been normalized because there's no return now. The whole price drop has happened in the middle of August. Thereafter, there was no big change in pricing. That's why you are seeing we have more than 15% growth in September. So channel inventory must have become normalized. Understood. One last one, if at all I can get in. On the government side of business, while you said that you can get back that growth of 10, 12 thousand, that is ideally on a QOQ or an H2 versus an H1 basis. But that number must already be there in your base. So you are talking about an acceleration in growth from 15 to 20 only on the back of housing, right? Housing, agriculture. Agriculture also, which is here faster growth versus last year? Agriculture normally is demand. This is a big period of demand from November to May. There's a big demand in agriculture. Because in June, July, August, September, June, July, August, agriculture demand goes very much down. Right. We are normally second half September, but this year September was a washout. Because the monsoon extended up to end September. So we had very poor demand in the month of September for agriculture. Which doesn't happen normally. Understood. Understood, sir. Thanks. Thanks a lot, sir, and all the very best. Thank you very much. The next question is from the line of Nikhil Agarwal from Kotak AMC. Please go ahead. Good afternoon, sir, and thank you for the opportunity. Sir, my question was on the PVC, on the plastic pipe realization. We've seen a quarter-on-quarter jump of about 6%. So, and from the prices that I have, I see that average prices in quarter two are actually down for PVC. So, did we hold on to the higher prices and maybe had an impact on our market share or something during the quarter? Thank you. You see, quarter one is dominated by agriculture. April, May. Okay. Yes. Whereas the product mix is different in the second quarter. That's why you are finding better realization compared to quarter one. There is a product mix. Okay. But our market share has been stable on a quarterly basis. There's been no impact on that. Now, we might have gained market share. Okay. Okay. Great. Could you quantify? I mean, could you just what's the market share right now? Could you mention that? Not market share. I want market share to unless the data comes from the only players, then only we'll be able to make it out. Okay. Normally, they've said the market of plastic pipe is around 4.3 or 4.4 million tons. And we are holding 65% of the organized sector. Okay. In the organized sector, we are the largest supplier. Yeah. Right. Next is Finolex, and then come Astral and Ashirvad. Yeah. All right. By volume, we are the largest supplier in the country. Right. Right. Yes, sir. Yes. Sir, one more question. How has the government spending been till now? If I'm not wrong, government spending did start, it picked up from July end or maybe from August. So did we not see any demand from that, from the government segment during the quarter, or is it yet to play out? Government already announced that first half spending was low, and then they will release money for second half. So second half starts only from October, no? Okay. Okay. We believe that October to March, government will be requiring first half, they will be involved in election and new government to come in position. Because Astral is mostly driven by central government. But now, central government is very much in position, and so second half demand is definitely going to be better. All right. Understood, sir. That's it from me. Thank you so much. Thank you very much. The next question is from the line of Bhavin Pandey from Athena Investments. Please go ahead. Hello. Hi. Good evening and thank you for the opportunity. Sir, just first thing, we see an increase in the depreciation expense. So what explains that? Tell me again, what do you see? Sorry. Yeah. Am I audible now? Yeah, please. We could see a jump in depreciation expense. So what do you think would explain that? Explain. Yeah. You see, a lot of brownfield expansion is taking place. But for a lot of SKUs, we have to require the molds for each and every SKU, where the life of the asset is lower than the plant and machinery. So as we are developing more and more SKUs, the additional CapEx, which are incredible, which is going into production, we have to provide proportionate depreciation based on their respective life of the asset. This will be the year in which we'll be having the highest CapEx. In the first half itself, we had an addition of more than INR 260 crore. Okay. So, sir, I'm assuming for next few years, a few quarters at least, we will be seeing higher depreciation expense on account of this. And once this tapers down, the flow towards PAC would be lower, right? You see, ultimately, depreciation, it's a cycle. Something gets added new, so depreciation will be higher. But the old asset will get fully depreciated faster also. But as we are moving towards CapEx plan, and this year we have committed close to INR 1,500 crore CapEx, so definitely, yes, depreciation will be higher compared to previous years. And sir, what kind of asset terms do we expect on the investment that we are doing over the next three, four years? On a brownfield expansion, you can expect 1:2.5. On a greenfield, it's 1:2. Okay. So 2.5 and 2X respectively. Yeah. And could you shed some light on the PVC prices, how they have behaved recently, and how do we see them shaping in the quarters ahead? And now the prices are stable. We can't forecast, but we believe the prices are stable at a lower level. So there's very less chance of prices to go down unless the crude oil comes down or the economy goes very bad. So, overall, as you are fully aware, China is giving big stimulus to revive their economy. The U.S. economy is also not doing so well as they started reducing interest rates. So we saw that they are comfortable now with the inflation level. We believe that the worst may be behind, but that is a big question I have to reply. Big question. But we believe the worst might be over in the world economy, mostly U.S. and China. They are a big user of PVC. Thank you very much. The next question is from the line of Abhishek Ghosh from DSP Mutual Fund. Please go ahead. Yeah. Hi, sir. Thanks for the opportunity. Sir, in terms of if you look through your operating cash flow, we see a large buildup in inventory. Is it related to raw material or finished products, or is it an anticipation of a very strong second half? Some color there would be useful. We combined raw material finished goods both. Okay. So it is largely because it will come down properly by the end of March. Okay. So it will come back to the normalized levels. Yeah. Yeah. Okay. And sir, just in terms of the first half, any expectation of what would have been the market growth for PVC pipes? The market might have grown between 9% to 10%. Sorry, I missed you on that, sir. Market might have grown 9% to 10%. Okay. So you would have largely maintained your market shares as far as the first half is concerned? I think so. Okay. Got it. And sir, the other thing is we see healthy growth coming back as far as the packaging product division is concerned, coupled with a healthy margin profile as well. So any comments on that? Because packaging seems to be doing well as far as both growth and profitability. Two divisions which are growing in capacity: one is the Plastic Piping System and secondly, packaging product. Our consumer products business was in bad shape in the previous two years due to so many products were launched by various competitors, and the products failed in the market. So there is a strong revival of demand for our products. And in packaging products, we have lots of varieties of fabricated products, and we have lots in so many world markets also. So that is growing by leaps and bounds. So combined packaging products and cross-laminated film, the packaging market demand for our company is growing nicely. Okay. So you think this is on a recovery path as far as your market shares and growth profile is concerned? Yeah. Right. Okay. Okay. Okay. Sir, just one last thing. In terms of capacity expansion, some of the listed and the branded players, whoever is announcing capacity, you think beyond that also the 35% unorganized or the semi-organized players are also adding capacity, or is it the three, four listed players whom we kind of listen to? So many players come new, and so many players go away. So we are not taking on unorganized players. Okay. Mostly selling in their own local market. And we believe the organized sector market share will go on growing small way, will go on growing. Okay. Okay. So from the 65%, it should only inch up from here is what you reckon from here? It will grow further. In a small way, 1%, 2% may go on growing. I'm sorry to interrupt, sir, but for a follow-up question, please rejoin the queue. Sure, ma'am. Thank you so much. The next question is from the line of Chadha from ValueQuest. Please go ahead. Yes, sir. Thank you for the opportunity. Sir, my first question is on gas piping system. What is the capacity which we have created for this particular product, and what to expect, sir, in terms of volumes in the next six to 12 months? We have huge capacity of making polythene pipe 3,000 tons per month. The same capacity can produce pipe for water. They can produce for gas also. For gas, we require very different raw material, and we require a very strong testing system. Today, we have got system in place only at one plant which is near our. Other polythene pipe plant, we have not created any capacity to make any testing facility for offering gas pipe. So we'll be offering gas pipe today, or we are offering gas pipe today only from our Gadegaon plant which is close to Tiradhan, and where we have got monthly capacity to produce 3,000 tons per month. So we are testing the market. There are other players. We are testing the market, and we are going to sell, I believe, in this quarter. Okay. And sir, who is the customer here? And And who are the competitors? Who are the customer? Many players are already in the business. Many players. Okay. And who would be the customer? Customer is like Mahanagar Gas Limited. There are so many gas company who are distributing gas. They are the customer. Okay. Okay. And sir, who want to give more and more houses gas supply by pipeline instead of buying LPG cylinder? In this market, dear friend. Okay. And And we will not only be supplying pipe, we will be supplying fitting also immediately. Very clear. There are many suppliers who only supply pipe, not fitting. Sir, in the initial comments, you had mentioned that there was INR 35-INR 40 crore inventory loss during the quarter. If I look at your gross margin, that has actually gone up by almost 100 basis points. What could be the reason for this? Gross margin? No, margin? No, no. Gross margin says when we are building up the inventory, which has gone up, then the overheads go into the overheads and the valuation goes into the finished goods. So that's why your cost of goods sold may not be the correct depiction. Okay. Okay. And just lastly, on pipe segment, you said sustainable margin says 14%-16%. So you mean EBITDA or EBIT? EBITDA. 14.5-15.25 EBITDA. 14%-16% pipe. We have EBITDA. EBITDA we have. Generally, what is the depreciation? About 3%. Okay. Okay. Thank you and all. Thank you very much. Ladies and gentlemen, due to time constraints, that was the last question. I now hand over the conference over to the management for the closing comments. Thank you and over to you, sir. Thank you very much. Thank you. Thank you to all the friends who have raised questions. We are very thankful to them for asking very intelligent questions. Thank you very much. Thank you all. Thank you. Thank you. On behalf of DAM Capital Advisors, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you. Okay.