Astral (NSE:ASTRAL) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to ASTRAL Limited q one FY twenty seven earnings conference call hosted by Equidious Securities. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Then zero on your touch tone phone. Please note that this conference is being recorded. I now hand the conference over to mister from Equiria Securities. Thank you and over to you sir. Yeah. Thank you,. Good evening, everyone. Thank you for joining this call.

0:47 Today from the management side, we have mister Sandeep engineer, chairman and manager. Mister, ED and CFO Mr. Tarav Engineer, Executive Director and Mr. Songya Engineer, CEO, SSL and Fintivis. I'll now hand over the call to Sandeep sir for his opening remarks. Over to you, sir. Thank you. I welcome you all for the earnings call Q1 FY 'twenty seven. As you all are aware, the polymer industry is passing through a volatile time. Prices are highly volatile and fluctuating. And it was on the negative side in Q1 due to that the industry key growth by approximately negative 10%.

1:37 But I'm very happy to share that in spite of that, as usual, Astral is a company which always focuses on growth and at the same time on profitability. And which once again, we have demonstrated in this quarter with a flat volume growth against market reporting almost 10% negative. And also we have delivered a 10% value growth with an 18.9% EBITDA, which is one of highest in the industry. This clearly suggests that Astral is continuously gaining market share for many years for many years and the journey is still continuing.

2:22 Now let me take you through our all our verticals. Plumbing, demand was overall weak in the industry, but because of decentralization of plants, our demand was very good. And we are taking market share in new geography where we have started our new plants. As you are aware, Astral has spent 1,500 crores in CapEx in last four to five years in all the verticals. And now it's the time to utilize the same and generate the cash flow from there. As communicated in the past, we have increased our product basket in last three to four years. And this product basket is not only adding a good performance, but also is adding to a value performance.

3:14 New product basket includes water tank, valves, fire sprinklers, OPVC, PTMT, low noise and other products. This has given a strong growth and healthy margin. Our Kanpur and Hyderabad plant have geared up and are giving good growth in their respective geographies. Our CPC resin plant, construction is going on as per the schedule and we are expecting to complete it by December end. And we will take the trial runs and finish the settlement and the product stabilization in Q4. Our state of heart new valve production facility is up and fully running.

4:01 We are also adding aluminum patch machines, which are under installation, and we are going to complete the same in mid September. And by end of September, all trials will be over and the commercial production of the same will be made. Bathroom business is also slowly picking up and more and more new projects and developers are getting added to the Astral brand. During the quarter, we have given a healthy growth in our partner business by 18.1%. Our Adhesive business, the quarter was once again an excellent quarter for Adhesive India business. We have delivered a robust growth of 24.9%. We are getting good response in rural and online business. At the same time, overseas business is also picking up well.

4:51 I'm sure you must have seen that this vertical, which was continuously growing market share by entering to new geographies, new product introduction and focuses on both rural and overseas market as well as the even the urban market. During the quarter, the margins were under pressure due to high cost of inventories and previous quarter, inventories which we had with previous quarters. But we are confident that by the year end, not only we will achieve our targeted revenue, but also deliver the guided margins. The UK adjusted business, this business was passing through a tough time last year, but we took a quick hold decision and we are happy to see a growth is that growth is coming back and EBITDA margins are also showing signs of pickup and improvements.

5:41 You can see the numbers that this quarter it has delivered a robust growth of 26% with an EBITDA of 4.9%. Pain business, first time after acquisition of Gems, we are seeing a history high growth of 48.7% in this vertical and not only that, we are at EBITDA breakeven point. We are at EBITDA breakeven. Paid business has delivered robust growth with all the six operating states and also new launches have given good response across the geographies. ESS, the newly acquired specialty chemical company, we are happy to share that from the very first quarter, the newly acquired company not only is giving quick start of revenue, but also an excellent EBITDA of 12.9% and we are expecting that to come to grow in coming times, and the vertical will be delivering good value, growth and excellent margins.

6:41 With this, I'm closing my initial remarks and let Mr. Hiranan Sablani take you through the finance performance of Q1. Good afternoon, everyone. Welcome all for our earnings call for Q1 FY 'twenty seven. Results and press release are in front of you. I just want to highlight the key numbers. The vertical wide numbers are asunder. Last year Q1, plumbing business was INR $9.53 crore, again that this year it is INR $10.50. So registering a growth of 10.1%. Adhesive business India last year it was INR $2.61 crore, this year it is INR $3.26 crore, so registering a growth of 24.8%.

7:31 Adhesive Business U. K. Last year was INR96 crore. This year it is INR121 crore, registered a growth of 26%. Paint business last year it was INR50 crore. Now this year is INR 74.5 crore, registering a growth of 48.7%. DSS, we already, Sandeep had given the number, it is INR 6.7 crore with the EBITDA of INR 90 lakh. So overall, if you see that the numbers are in line what we have projected and EBITDA percentage also I am giving you. Q1 Plumbing business last year, it was 16.4%, now it is 18.9. Adhesive business India it was 14% last year, now it is 12.2%.

8:17 Adhesive business UK last year it was flat 0.2%, now it is 4.9% and paid business last year was 1%, now it is 0.1. So consolidated basis last year, it was 14.3%, which is now 15.5%. So roughly about 1.2% kind of improvement into the EBITDA. As you all know, we are always believing in consistency in numbers and the profitable growth for the organization. I'm very happy to share that this quarter also we have delivered a very healthy 10.1% value growth in pipe and plate volume growth in pipe and again the negative growth of industry by roughly 9% to 10%.

9:02 In adhesive and paint also, we have registered a very robust consolidated growth of 29.5%, in which adhesive was 25.2% and the paint was 48.7%. The overall Q1 value growth is 15.9% and with the EBITDA margin of 15.5. The key points to note here is that in the history, we have first time delivered a highest 48.7% growth in paint after acquisition of JEM. As we guided in last call that we will be closing full year with 20%, 25% kind of growth. But with this kind of number in Q1, we are confident that we will be definitely crossing the guided number. Further, you will be also noted that in all the vertical, whether it is a paint, whether it is adhesive or whether it is a plumbing, we are continuously gaining market share, which is always a good sign for any company, and so it is for the Astral.

10:01 In pipe, one of the good things has come up for the industry, which is implementation of MIP, which will make our life little easy because we are continuously seeing the volatility. Since last few years, a huge volatility in polymer prices, particularly into the PVC. Now with this implementation of MIP, this will reduce the sizably and which is very good for the company as well as all of you to forecast the number. Demand scenario in pipe industry is very robust from July onward. Till yesterday, I can say for four point five months, we are into the double digit growth. So you can understand the kind of extraordinary growth we achieved in the month of July and the first twelve days of the eleven days of the current month, which give us the confidence that what we have given the guidance of double digit growth. So we will be definitely going to achieve on a full year basis.

11:05 Since realizations are very high, which will give value growth of more than that, that is right now realization and the volume gap is 10%. And with this implementation of MIP, we are of the view that the value gap will continue. And if that is the case, our value growth for the full year will be more than 20% in top line. As communicated by Sandeep, we are slowly coming back to our U. K. Business growth path as guided in the last phone call, which you can see in the number, and we are confident that by year end, we will be from coming to the normalcy what we have guided.

11:50 We have guided the double digit growth in top line. Now in the first quarter itself, we have delivered the 26% kind of growth. So we are confident that The UK will definitely going to surpass the double digit mark. From Q3 onward, I think tax aluminum packs, which Sandeep already discussed, is going to start contributing to the top line and the bottom line. This product is very well accepted in the Indian market, and it is a very high value product and a high margin product. Few more products we are planning to launch in Q3, which we will communicate to you in our next earning call when they will be at the advanced stage of launch. Overall, industry environment is positive in all vertical, and we are confident that we will be delivering a healthy growth in the coming quarters also.

12:39 With this, I want to thank everyone and open the floor for the Q Thank you very much. We will now begin the question and answer If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, in order to ensure that management is able to address questions from all the participants in the conference call, Please limit your question to three per participant. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of from Dollar Capital. Please proceed with your question.

13:39 Hi, sir. First of all, congratulations on gaining the market share both in plumbing and adhesive. You have highlighted many, many things just to get a more confidence on that front. So particularly on the guidance front. So far from the plumbing, we have mentioned that in four point five months, we have seen a double digit growth. So in Q1, when we have a flat growth, does that mean that the only the April was where we have seen a significant maybe a degrowth and then the May and June, there must be a growth and July, does that mean that we are seeing a kind of a 20% plus kind of a growth? So your understanding is right, but little I can do the correction.

14:28 The April number was not good for the entire industry and particularly for Astral because we implemented our new SAP HANA. So our business operation was not would practically start for the dispatch for ten days. So definitely, April was not good. But then May or not, we started growing very fast. And in the month of July, we will register a growth of 40% in volume, not 20%. So because of that, we are on a four, four point five month basis, we are into the double digit. Okay. So then does this growth is just because in Q1 because of whatever the volatility was there and now in last since the mid of the July 12, INR thirteen, PVC prices have gone up and which is supporting so this quarter and maybe then the full year, can we see a mid kind of a 15% kind of a growth that is more likely kind of achievable.

15:33 And at the same time, in terms of the margin, because we in plumbing used to guide 16% to 18%, but this quarter also 18.9%. So what's the possibility that we should be doing a more than or maybe close to a 19% kind of margin given that the now PVC prices are kind of up and plus MIP would be supporting. So I'm trying to understand the upside risk. So I think the way July and August has picked up, it looks that the demand has come up very sharply from the market. One of the reason was that dealers and distributor were destocked because prices were going down. So because of that, nobody was in a mood to keep the inventory.

16:18 But now everyone is rushing to fill up the inventory. Secondly, because of MIP now, the dealer and distributor also have a confidence that probably this price, polymer price is not going to go down at least. So downside is protected. So they are getting confidence that they are filling their stock also. So that giving us the confidence that the scenario will improve it. Thirdly, normally, whenever there is a first quarter, it's so weak, right, played kind of number, then naturally, the second quarter should be better. Last year, if you see the pattern was similar. That first quarter was weak and then the second quarter was we delivered close to about 20% kind of growth, volume growth. So similar pattern is getting repeated. So I don't want to jump in at this stage and tell you that full year wages, we are going to deliver 15, 20% volume or something. Let us wait for some more time.

17:09 Let us be finish the q two number. And then I think we will be hosting the call somewhere maybe in the month of November or so. So by that time, we'll be having more clarity. So we will be in a position to upgrade our guidance. But at this stage, we want to don't want to unnecessary jump. As far as your second question was relating to the margin. I think margins are pretty stable. And because of polymer volatility, 1% or 2% kind of plusminus will keep happening. So we will be definitely going to be in the range of 16% to 18%. And if the market condition will be better like what is right now, because now polymer prices are going up. So if these kind of scenario continue for a longer period, then there are probability that we may increase the margin.

17:54 But right now, our guidance will remain to 16% to 18%. We will change our guidance if needed post Q2. And similarly, the I'd say also the significant growth India, 25% kind of a growth and U. K. Also, 26%. And both we were having a kind of a 15%, 20% guidance for India and more than 10. So there, is there a are we devising right now or still there also the similar guidance and maybe Q2 post Q2, we will upgrade the guidance? So the chances are bright to revise upward. But at this stage, we don't want to do that thing because still we want to wait for some time because we don't want to unnecessarily misguide the street based on the one quarter number or maybe four months number.

18:43 So better we wait for the completion of Q2. And post that, if required, we will definitely change our guidance. And the India margin will be there. Obviously, this quarter was lower 12.2%, but it will come back to 15%, 17% what we are Yes. Yes. Yes. I think we already disclosed also in the press release also that it will be back. Okay. Thank you, sir, and all the best. Thank you. Thank you so much. Thank thank you, sir. Ladies and gentlemen, to ask a question, please press star and 1 now. Participants who wish to ask questions may please press star and 1 at this time. The next question is from the line of from PL Capital.

19:33 Please proceed with your question. Thank you for opportunity, and many congratulations for a good set of numbers. My first question is related to domestic business. As you had already highlighted that price hikes has been implemented. So how much has been absorbed in the market? And is there any further commodity inflation is there to take a further price hike? So I think, Soumya here, so I think overall the RM prices were upward of overall I would say more than 15%, 16% rise was there. Exact figure I'll have to say, but I can give you that it was so we did a price increase of half of that, so around 6% to 78% price hike we had done across our boards, So I think few things we had to absorb as a raw material as a higher price.

20:32 So we had to observe in Q1. But I think with the RMs softening and overall cost coming down in Q2, I think there will be definitely a positive impact going forward for the Additive India business. Okay. Secondly, on the adhesive only the international, out of your 26% of the growth, how much is the currency led? I think close to about 10% is related 8% to 10% related to currency, rest is on the constant currency. Okay. And in the, there's a DSS number is consolidated, 67,000,000? That is consolidated in paid because it is a subsidiary of the paid business. Got it. Got it. Lastly, on the pipe and fitting, because you're in the starting commentary also mentioned about the Kanpur and Hyderabad, which is ramping up very good for you.

21:30 So at what level of utilization that these two plants are running at? And what are the because you have taken some capacity expansion in this quarter as well, somewhere around 3,000 odd. So how how how has been the capacity for this and at what level of utilization is Kanpur the Kanpur is is gotten a very good response in the market, local market. So the Kanpur plant is majority sold out. So very high utilization, but again, the Kanpur capacity is very small. We are planning to expand the Kanpur facility in the coming year to take care of the growing demand. And Hyderabad, I think, will be operating at around the utilization of around 50%.

22:20 But there also, you know, we are slowly and gradually getting a foothold in that local domestic market. So we have enough land and space there to expand also, but the capacity obviously higher than Kanpur. So that is why utilization point of view, you are seeing a slightly lower number. And capacity addition, whatever we have done is basically we have added, we have just done some debottlenecking at the existing facilities, added some molds and some fitting machines and PEX machine and some other new product lines that we are developing. So substantially no new facility work has happened. Good to hear that. Last questions are related to the paint because that's 48% of a growth. Can you give more color on the how has been the volume growth or the geographical expansion, which led the growth for you? If more color on that will help.

23:22 As our last guidance, we are not expanding into more states. So the South states, we will finish. We have finished three states in South. We have two more states in South, which we will finish when the time is right and when we feel it right. And in the West, we have opened the Gujarat, Rajasthan and Maharashtra markets, three states. So now we are taking very conscious call in terms of understanding that how our bottom line is also going with our top line and accordingly we will invest more in states and more in manpower. But now it is getting the state stable and growing within this state. So we are consolidating in this state. So that is a very positive sign that we are seeing around 48% growth from this existing states where we have opened. So the acceptability is good and the volume growth, I think, would be around 35% to 40%, I could put it. Rest would be, I think, the value growth due to the increase of the pricing of the products which we have taken.

24:30 Ladies and gentlemen, to ask a question, please press star and 1 now. Participants who wish to ask questions, may please press star and 1 at this time. The next question is from the line of from Citigroup. Please proceed with your question. Yeah. Hi, sir. In terms of volumes in the plumbing business, obviously, we have done much better compared to the other players. Right? So just to get some additional color on this thing, how much of this was a function of product mix or geo mix? And how much have been... You've been probably more aggressive on pricing in terms of versus competition? I mean, considering in April also, have ten days, you mentioned you had lost because of the transition as well. Right? So despite that, the very strong performance on volumes.

25:26 I think product mix has not changed much because we are more focused company on the plumbing side of the business. So I don't think product mix has changed. And that is why you see that the margins are also pretty stable. Normally within the 16% to 18% we deliver this time little more. So product side, I don't see any big changes there. Right. And on pricing, I mean, was there any probably more aggression in the quarter to achieve the volumes or no change versus the historical? No. No. Actually actually, we we are we are very blessed that we are taking the... Getting a good set of distributors from the competitors who are willing to join us.

26:14 And so a lot of network expansion has happened. So without sacrificing on the margin, we are able to deliver these numbers. Understood. Understood. Secondly, the addressable segment, in the last quarter, you had some one off branding expense. There is nothing of that that sort in this quarter. Right? No. Not much. This part. Maybe routine branding cost will be there definitely, but not one off kind of. No one off. Okay. Understood. And lastly, on the paints assets, roughly, what will be your capacity utilization right now? Paint, we will be somewhere around 60 kind of utilization. 60 to 60%.

27:01 After the volume after the growth that we have seen in the quarter? Yes, 30%, 35% kind of growth. The next question is from the line of from CLSA. Please proceed with your question. Hi. Thanks for the chance. My first question is on ground end user demand. While we have seen a strong uptick in the month of, let's say, June and July, how much of it do you think is driven mostly by destocking? And how is the end use demand? And which segments are actually contributing to this demand? End use demand is robust. That is why you see that in the paint business, the adhesive business, pipe business, marker business, all business we have delivered robust numbers this quarter.

27:56 And q two also, the demand is continuing. So end user level demand, I don't see there is a major... Any sort of a major problem. So is it both from rural or urban or anything to call out that urban is growing stronger than rural and that is why probably you have outperformed the industry? No, no. Across the board, only in the piping side, the agri demand was a bit muted. Otherwise, overall, all products are doing very well. Sure. Lastly, any change in inventory number that has contributed to the margin in this quarter, whether inventory gain or loss? Not really. Alright. Thank you. That's all from my side. Thank you.

28:41 Thank you, sir. Ladies and gentlemen, to ask a question, please press star and 1 now. Participants who wish to ask questions may please press star and 1 at this time. The next question is from the line of from. Please proceed with your question. Hi. Good evening, team, and congratulations on super strong numbers. Just a couple of questions from my my end. While you already said there is no inventory gain element, while the product mix is not, you know, largely remain same, what would have led to the margin improvement? Because if I look at it from my perspective, probably from last two to three years, if I look at current margins, they are at the most highest level, especially in Q1 attaining like a 19% sort of margins. What would have led to that?

29:30 That's the first one. So mainly, if you see, Sneha, that all our new plants, our overheads were very high because utilizations were very poor. Now with this kind of growth, what Karol said about both the new plants, that has supported us to improve our margin, mainly because of economy of scale of that particular two plants. Because all laboratory related costs, operator related costs, plant related costs, all your fixed labor costs, are going to be there whether you produce or not. So with this extra production that has supported us to improve our. But our volumes are actually flat y o y. Right? That's that's the... I mean, I would have got the operating leverage part of it, but with volume being flat y o y, how does it work out? Or is it any Basically basically basically, I would like to add that in the first quarter, the agri demand was muted.

30:27 So lesser lesser sale of the agri product happened. But the rest of the products which are plumbing products for us and value added product for us, the sale was good. So when you sell less of the agri type products, automatically the margin profile will improve because agri is having a much lower margin than the plumbing product. Understood. So that's precisely the product improvement change that we are talking about. And what would have been the growth of CPVC this particular quarter in this entire It's in a it's in a double... It's in a it's in a high single digit type. During the quarter? Yeah. That's helpful. Secondly, but where revenues, just a bookkeeping one for this particular quarter?

31:15 Bhaktur, I think last year, it was INR 24 crore. This year, it is 28.7. Understood, sir. Thanks thanks a lot, sir. I'll get back in the queue. Thank you. Thank you. All the best. Thank you, ma'am. The next question is from the line of Anup Parag from Anandrati. Please proceed with your question. Yeah. Hi, sir. Just one question from my end. What was the CapEx amount spent in Q1 FY 'twenty seven? And what are we budgeting for FY 'twenty seven? So I think this quarter, we have spent INR 137 crore in CapEx in all the vertical put together. Because even the CPVC plant work is in wholesale. So if you want breakout, I can say close to about INR 87 crore we have spent in plumbing.

32:07 And they see we have spent around 29 crore. Sorry. 29 plus three. So 22 crore. UK, roughly about 2 crore. And then 16 crore on CPVC resin plant. And for the budget for FY '27? I think we have said 300 kind of level, three to three fifty kind of level will be there. Hello? Hello? Yeah. Hello? Yeah. Thank you. Thank you, ma'am. The next...

32:54 Ladies and gentlemen, to ask a question, please press star and 1 now. Participants who wish to ask questions, may please press star and 1 at this time. The next question is from the line of from Capital. Please proceed with your question. Sir, in what ware, now are we for this quarter, is it a kind of EBITDA positive? Because till last quarter, we were kind of a breakeven. But still we are at a breakeven. Okay. Okay. And in The UK for full year in terms of the margin now, we can see 8% to 10% kind of margin we can build in?

33:45 Yes, yes. We are targeting that only. And for paint, how we can now now see because the growth is there. So from Q2 itself, can we start seeing EBITDA positive? And what number one can look at kind of our 6%, 7% kind of a number for full year EBITDA margin? Last call, we have guided that we will be delivering lower single digit EBITDA growth. Okay. Okay. Okay. That's it from my side. Thank you. Thank you, sir. The next question is from the line of Durgesh Shukla from Incred Capital. Please proceed with your question. Hello, sir. Thank you for the opportunity. I just want... Can we reconfirm your volume and EBITDA guidance?

34:35 Volume and EBITDA guidance for plumbing? Yes. So we have given the guidance of minimum double digit growth Okay. For volume. And EBITDA, we have given 16 to 18%. Okay. Okay, sir. And what about the sales sector? Paint? Yes. Paint, we have given guidance of 20 to 25% kind of top line growth. Okay. Top line. And and if you you want 15% to 20% kind of growth. Okay. And any margin guidance on the same, which you would like to give? And we have given lower single digit guidance.

35:23 And it is we have given 15% kind of guidance. Thank you, sir, so much. That's all from my side. Thank you. Thank you, sir. The next question is from the line of Kesha Vlahuti from IDFC Securities. Please proceed with your question. Hello. Hi. Thank you for the opportunity. Firstly, I'm from security, a small collection. Sorry to interrupt, sir. May we request that you speak a little louder? Am I audible? Yes, sir. Now... Yep. You can proceed. Am I audible? Yes. Yes. You are audible. Yes. So I was saying firstly, I'm from HSBC Securities.

36:12 The first question is when you say July has been a 40% growth, is that the market has been good or possibly you would have gained more share in July month, subject which you have been gaining market share? No. Market has been good, and we are gaining the market share. So it's a combination of both. So you see the market share process gaining share is it's not one quarter basis. Last ten years continuously every year we are getting market share. You up the last ten year number, every year we have grown market share. So that is an ongoing process because we are continuously adding our new location, new geographies, new products. So that exercise is still continue and will continue for some more time.

37:05 Understood. Hello. And sir, on the inventory, how is the channel inventory right now? Secondly, when PVC prices have declined this quarter, still we have not seen inventory loss. Why is that so? And secondly, Q2, should we have a good inventory gain as PVC prices has been up? So see, it depends at what price you are buying your inventory. Based on that inventory gain and loss will be decided. And secondly, how much is the contribution from your value added product is there? So if your contribution from value added product is also increasing, so inventory is low a little bit here and there is not considered. So I think Q2, very difficult to say at this stage because still a lot of time to come, but it looks that prices are continuously going up. But everyone is sitting with a low growth.

38:00 So everyone is passing on support to the market. So we have to see how much we have to give the support to the market. And based on that, the volume will be decided. And based on that, the inventory gain will be there or not, that will be decided by the end of the quarter. So I think it's too early to say. But one more thing is also going on in the industry, which can also be materialized in the near term. It looks like that government is also seriously thinking for the value added duty also on the Chinese product. So like MIP there, the similar kind of empty dumping kind of duty kind of value added thing is also going on. So if that is also going to be there in place, maybe in maybe one month, two months down the line because process is going on with the government. So that is also going to support the industry in the coming time.

38:49 But again, it depend on the government outcome, so we cannot give with us assurance that it will be there, but that is also talk going on. If that is the case and further polymer will go up from here, definitely the inventory gains will be there. Got it. Sir, I'll also ask, how is the channel inventory right now in the market? How is it? I think now it is an okay kind of inventory, neither low, neither high, I can say. Whatever they have bought it in the month of July, they will consume in the beginning of the August because secondary sale is going very well in the market. And across all the cities, we are monitoring the number. So it doesn't look that the the channel is sitting with a high inventory. They are mostly sold out. Got it. So sir, what was the idea?

39:37 We are planning for a demerger of two units and possibly we decided to hire big four and decided to call after this season. So what was the entire thought process? And how should we see, let's say, if you was down the line whether we will see a gain on card? I think we thought that it is good for in the interest of the shareholder. And earlier that we do, that will be a better control on the organization. But I think end of the day, we have to respect the majority of the shareholders' point of view also because end of the day, we are the trustee of shareholders. If the shareholders are not happy for with any of the reason, then I think we should respect. And considering that in mind, I think we don't mind to reverse any of our decision, which is not in the interest of the shareholder.

40:27 So we decided to call out. And similarly, the independent adviser always also guided us that it is not the right time to do the demerger because you are still a low company in terms of top line. If you pick up a side after that, if you start doing, that will be better option. And same, I think, was expressed by many of our shareholders who are holding the sizable equity in our company, even if the low equity holding, even the many of the well wisher, our analyst community also, they also expressed the same view. Then the Board also thought that we should also respect this kind of view. And based on that, we've taken out. Understood.

41:12 Got it. But till what time, as you highlighted, shareholder also didn't want it the demerger thing. Till what time the demerger won't happen? Means how many years or possibly at what revenue base, what is the thought process? I think there is no clear thought process that we will be doing at this level, but I think now it will be sizable top line growth and maybe the sizable EBITDA level, not less than $56,000 top line. So... And by that time, we may think over that. But, you know, business, very difficult to predict at this stage. But we are of the view that that should be the ideal size, 5,000 crores plus kind of size will be the ideal size. But that doesn't mean that the moment we cross 5,000, we will do that thing. So we will see the situation on ground at that particular point of time, and then we will take a call what to do.

42:04 Got it. One last question from my side. The U. K. Had received 8% to 10% EBITDA margin guidance for the entire year or possibly this number will reach by end of the year? No, for the full year. The next question is from the line of Rahul Agarwal from Ikigai Asset. Please proceed with your question. Yeah. Hi. Good evening to all on the call. Am I audible? Yes. Yes, Rahul. Okay. Sir, three questions. Firstly, on the industry side, right? I mean last year was tough on the piping, plumbing sector, even this quarter is tough. At the same time, I'm sure smaller players would have struggled handling their pricing on inventory.

42:53 Over and upwards of that, we are seeing some branded players trying to build up their volume. We have seen some couple of large names getting into the market on pipe fittings. Just your thought on what is really happening in terms of industry. Right? And larger players gain market share. There's no doubt about it. But just first question essentially was to understand, how do you see the industry overall panning out? Because it's been a real volatile period. So obviously, it should benefit you, but just some thoughts on that. So I will I will answer your question on on... See, first of all, last year, I don't think it was challenging, not for us, and neither was this quarter challenging for us. Because our priorities are very simple and our goals are very simple.

43:38 So I don't know, but we are outperforming the industry by a fair bit since the last five to six quarters, you can say. And as far as the larger company goes, I think we are eating away the market share from all the larger player in the market. And you can obviously see from the number that small to mid scale companies are struggling in this particular business environment. And when you are talking about the other big brands coming in or other new players coming in, I don't see anyone significant coming in who will disrupt the market or I have not seen any player who has entered in the last five, six years to disrupt the market in any way. Okay. I get that, Astral. So... But just one question here.

44:28 You know, we always end up discussing the PVC for ASTRAL. Right? I mean, that's the highest profit for you. But just on the PVC side, and which is also bulk, it also is like, I'm assuming that it's close to 50% more than that on volume for ASTRAL. What is happening over there? These market share gains are happening on the CPVC side or even on the PVC side? It is happening across the board, all product segment. Okay. Okay. Got it. Second question was on primary sales versus secondary. Do we track secondary sales for ASTRAL five three four three? We track tertiary also. Okay. So my understanding was, obviously, 1Q had a lot of destocking issue, which is why July is 40% growth. Base is low.

45:18 We're seeing stocking again. But if you could just comment on tertiary sales for 1Q, that is one question. And second is, is primary equal to secondary now Tertiary and primary both were tertiary and secondary were both higher than primary in Q1, obviously, because the channel was destocking. And secondly, Q4 sale was very high. So because of that, the secondary and the tertiary sale in the Q1 is always high. That is why the channel has restocked largely in the month of July, and still the restocking is happening because the channel was very dry in the Q1 because largely all the secondary and tertiary sales had happened.

46:06 Rahul, it is not only that July, we have delivered the 40%, but even August also so far, we are at a double digit growth. So it looks like the secondary and tertiary is going well. Otherwise, distributor beyond the point cannot restock that much. So genuinely on ground demand is picking up, and that is a reflection of this number. Got it, sir. Got it. And last question was on the sourcing of PVC resin and CPVC resin right now for ASTRAL, what is the important domestic mix for both this resin separately? I think we are not sharing this number. These are the confidential number. So it depends. Every quarter, the percentage will be different.

46:56 Sure. While asking it was from an import perspective, how is the sourcing for reasons because ForEx is depreciated, there are lead times which have increased because of freight issues. Our shipping costs also increased. I know this is a pass through industry, but some thoughts on We we... I think I think we have to stick to, you know, that we will continue to grow at a double digit volume and deliver a 16 to 18% EBITDA. I think we should not extrapolate into what is happening and where we are sourcing from. I think that is a proprietary information of the company. Okay. Sure. So one point I was trying to drive was is sourcing all part of the We we we have mentioned enough inventories, so no concern. Okay.

47:43 Alright. Thank you so much, and wish you all the luck for the rest of the year. Thank you, sir. Thank Thank you, sir. The next question is from the line of Akash Shah from UTI Mutual Funds. Please proceed with your question. Hi, sir. Am I audible? Yes. Yes, Akash. Yeah. So thank you for the opportunity. Sir, just wanted to ask on gross margin side, sir, in India, just a business, if possible, can can we share what is the gross margin decline on a Y o Y basis? We don't share individual number, Akash.

48:28 Oh, okay. No worries. Sure, sir. And, sir, in India, this is business. Now that, I mean, fair bit of time has passed, so, sir, how is the ramp up in South And West region because of the hedge plan? So are we sort of being able to ramp up the sales in this part of India? Yes. Yes. South for us has always been a big point since we have acquired Visinova. But last two years for India additive business has been very robust and it's a lot of legwork and market development activities are going on. So parallelly with sales, are also developing South equally, and we are looking South as our big focus for our sales increase for coming years, and South will deliver. And best, we are already doing fairly well, and we have a good market share for the product lines we are present in for the best region, and we have good counter share as well. So we'll keep focusing on and making our position even stronger in best also.

49:46 And the hedge plant is definitely helping in that. Sure. Sure. Sure. Yeah. Those were my questions. Thank you. Thank you. Thank you, press star and 1 now. Participants who wish to ask questions, may please press star and 1 at this time. The next question is from the line of Shiv, an individual investor. Please proceed with your question. Mister, your line has been unmuted. Please proceed with your question.

50:34 As there is no response, we'll move to the next question. The next question is from the line of from. Please proceed with your question. I just wanted to reconfirm. Like you said that we will reconsider the demerger of chemical business once it reaches a revenue of 5,000. So last year, the chemical business revenue was closed around 2,000 kuru. So does it mean that we are not going to consider the demerger of chemical business over the next five, seven years period? It depends. Said in the early report that if it is comes early and the situation is necessary to do that thing, we will relook.

51:19 But it is not a fix that we have kept in mind that, okay, at this level, we are going to do that thing. We can do it 7,000 also. We may not do also. It depend on the market conditions and the situation needed to grow the business, particularly that vertical. Based on that, it will be taken the decision. So there is no fixed time line in our mind. Okay, sir. Like, if you can give some sense, like, what kind of a scale return ratio and margin we are looking at before taking the call of demerger? I told you that we will take that call at that particular time. Right now, we are not taking the call, so there is no point to unnecessary discuss in detail this kind of thing. At least from number, least four, five year will be there, minimum five year.

52:07 So no need to worry on that side. Okay. Thanks a lot, sir. Thank you, sir. The next question is from the line of Roshan from Antique Stock Broking. Please proceed with your question. Yeah. Thanks a lot for the opportunity. So the bachelor segment grew by around Sorry to interrupt your question, sir. May we request that you speak a little louder? Is it better now? Yes, sir. Yeah. So bachelor segment grew by 18% in two months. What is driving this growth? Is it the retail or project? And how confident are you of sustaining this kind of growth going forward? We are we are still a very new entrant in the market and a very low base. So we are just starting out.

52:55 So we are working with a clean slate. So so some territories we are entering through projects, some territories we are entering through retail. But we are happy that we can deliver this 20%, 25% CAGR in business for the coming four, five years. So I think 'eighteen, we are not happy. To be very frank, We should be growing fast because our base is still low. Understood. And my second question is, you attributed now improvement in utilization of two plants as a major contributor for growth in the margin. So as utilization improves, how much operating leverage is still available in this coming year now?

53:44 So I think we have given the guidance. So it depend how much which plant is getting utilized because now both the plant has started utilization at a sizable level. So little bit further benefit can be available in the coming time, but cannot be a substantial benefit now from here on we can see. Understand. That's all from my side. Thank you. Thank you so much. Thank you, sir. Ladies and gentlemen, to ask a question, please press star and 1 now. Participants who wish to ask questions may please press star and 1 at this time. The next question is from the line of from Dollar Capital. Please proceed with your question.

54:31 Hi, sir. Sir, just wanted to clarify. Initially, we said that in terms of the value and volume growth, which was a 10% in this quarter, and we are looking at more than 20% kind of a gap for this FY 'twenty seven. So that means that the realization for plumbing for the entire full year FY 'twenty seven versus FY 'twenty six should be that kind of a growth that we are looking at kind of? No, no, no, no. I think you misunderstood me. I said that if the volume will be 10%, then the value will be 20%. So 10% kind of gap will be maintained for the full year. That is what we are forcing from the current market situation. It can be 1% or 2% plus, it can be 1% or 2% minus. It again depend on the product mix also.

55:24 But right now, after so many years, we are seeing that the first time that the value will be higher sizably compared to the volume. Last three years, if you see, all the piping industries were sufferer because volume was there, but the value growth was not there. So because of that, all our overheads were continuously going up, and that was continuously giving us the pressure on the margin. But this is the first time after so many years, we are seeing that the value will be at least 10% kind of plus compared to the volume. Now hypothetically, 15% volume will be there, then the 25% kind of growth will be there in value term. So that is going to help us to improve into our margin because our overheads are going to remain at a certain level. And if the top line grows, then it is going to support us into the margin front.

56:14 I'm not telling you 20% plus, I'm telling you 10% compared to volume. Got it. Got it. Understood. And in terms of our stand, once the our new CPVC plant will be there by Q4 this year. FY 'twenty eight, let's say, this year, if we do a kind of a 15% volume growth, so then next FY 'twenty eight, the growth rate would be higher than the FY 'twenty seven growth rate? Definitely, your understanding is perfect. Not only growth will be higher, but the margin expansion will also be there. Yes, yes. That is definitely will be there. So that's why I was trying to push that given the margin that we are already there 18.9 for plumbing.

57:03 So why what is stopping us still to do or not increase that upper band of the guidance via 16% to 18%? No, Shyavan, you please understand that on the basis of one quarter, we can't keep changing our guidance. You have to also give us the time. And you know last three years, it is the industry is continuously volatile. First time after three years, we are seeing that at least MIP kind of things is there. And now government is also thinking for the further duty on the Chinese products. If these kind of things are placed on the market, we can confidently tell you that now this is going to be there. But right now, industry is passing through the up and down kind of scenario. So in that case, unnecessary misguiding the investor, that is not the philosophy of ASTRAL.

57:52 We always want to be transparent with you and unnecessary, we don't want to put up pressure on us also and unnecessary misguide you. So keep patient. We are already in the month of August. September is not far away. Then after if if the situation will improve, we are definitely going to change the guidance. In the past also, we have done the same thing. Whenever there is a market situations are positive, we have upgraded our guidance. Whenever market situations are not in our favor, we are happy to downgrade also. Yeah. No. No. Why why I was saying that because in... If I look at even last two years also, FY 'twenty five, 'twenty six, the the the margin was 1919.6%. And given that the value growth for this this year, as you are highlighting that it should be a 10% plus kind of a value growth. So in that case, and then obviously the volume growth will be there. So if we are confident in terms of the value growth would be higher, then the confidence Sir, your understanding is absolutely, sir. One, your understanding is absolutely right. You are thinking on the right direction.

59:03 But for that, you have to keep little patient because I don't know which quarter inventory gain will be there, which quarter inventory loss will be there. And if we improve the guidance, hence tomorrow something goes wrong and PVC fall and then the inventory loss come, then you yourself will say that why... What was the need to increase the guidance? So with the appropriate time only, we will be able to guide you. And what is going to make different to the long term investor? Is the long term investor of Astral is waiting for a one quarter number or two quarter number? Investors should think for the company from the next two to three year point of view rather than thinking for one quarter or two quarter. When management is telling you that wait for the one quarter, I don't think any of our investors have any concern. We are giving always the industry best number in terms of top line, in terms of bottom line. And we are continuing our strength on that side, that we will be maintaining that kind of a thing. But exactly improving the margin and improving the top line guidance on a quarterly basis, I think it is too early to jump in. Please please humble request to you that wait for some time. At the appropriate time, we will be guiding you.

1:00:16 Got it, sir. Thank you. Thank you. Thank you. Thank you, Sawan, for understanding. Thank you, sir. Ladies and gentlemen, we'll take this as the last question for today. I would now like to hand the conference over to management for closing comments. So thank you very much all of you for being with us for the Q1 numbers, and we look forward to again connecting you with the Q2 numbers. So thank you, everyone. Thank you very much. Thank you, everyone, for participating in the call, and thanks, Pranav, Equirius, for hosting this call. Thank you, sir. On behalf of Equiria Securities, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines. Thank you.