Carysil (NSE:CARYSIL) Q2 2027 Earnings Call

0:01 Ladies and gentlemen, good day, and welcome to CARYSIL LIMITED Q2 and H1 FY 'twenty seven Earnings Conference Call hosted by Go India Advisors. This conference call may contain forward statements about the company, which are based on the beliefs, opinions and expectation of the company as of date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded.

0:48 I now hand the conference over to Mr. Chirag Parekh. Thank you, and over to you, sir. Yes. Good evening, ladies and gentlemen, and thank you for joining CARYSIL LIMITED Quarter two and FY 'twenty seven Earnings Conference Call. I extend my warm, festive wishes to all of you and your families. Our results and investor presentation are available on the stock exchanges and on our website. Joining me today is Usdan Nansham, Executive Director and Group CFO along with GIA, Investor Day Advisors. Quarter two performance. Despite a challenging global environment, pleased to share that CARYSIL delivered its highest ever second quarter revenue of INR275.7 crores, a growth of 14.6% over last year.

1:35 Our core business, zinc business continues to be our main growth engine. The quartz zinc volumes grew about 10% to 217,000 units and quartz things contribute about 54% of our revenue. Stainless steel volume also grew by 8% to 47,000 units together, our zinc contributes 65% of our revenue. Our profit volume grew by 8%, kitchen appliances 12% and services 23% on our revenue this quarter. With this wider portfolio, CARYSIL is steadily becoming a complete kitchen solution provider for our customer capacity expansion hub. Granite zinc plant is running at a 92% utilization, stainless steel plant running at a 91% capacity utilization in quarter two FY 'twenty seven, which is close to optimum level. Our addition, 250,000 units of annual capacity of quartzings and 150,000 in Kinseng due by the end of FY 'twenty seven comes at the right time.

2:43 In line with Make in India, we are also doubling our faucet and kitchen appliances capacities to 100,000 units each to reduce our dependence on imports. This too is on track end of FY 'twenty seven. International business. Our long standing partners at IKEA, Lowe's, Home Depot and Audent, Aeefle continue to be a large share of their business. We've extended our partnership with Home Depot Canada and U. S, starting working with Aeefle in Australia, New Zealand, Thailand and Indonesia. They received our first Amazon by Amazon USA. In The U. K, CARYSIL products limit recorded highest ever half revenue of GBP 6,200,000. Our services business saw a softer demand to GBP 5,800,000 against GBP 7,000,000 of last year. In The U. S, The U. Unac Granite grew its revenue to $5,600,000 from 5,000,000 approximately a 10% plus growth.

3:44 Domestic business, it's been one of our biggest opportunities and our growth engines. Indian consumers are increasingly choosing premium brand and design led kitchen products. So our business grew by 30% in the first half and India contributed 21% of our revenue versus 19% last year. Expanding our presence through galleries, brands for experience centers, B2B vertical with developers and also online platforms like Amazon and Flipkart. To build our brand further, we have signed renowned actor, Mr. Bobby Dior, as our brand ambassador for FY 2027 and 'twenty eight. We remain on track to achieve INR500 crores domestic revenue over the next three years.

4:30 Innovation and outlook. We are preparing global launch of our nanotechnology based things in 2027, starting with Europe and U. S. Is a smooth finish of our granite sink with other additives other than quartz. This is approximately 25% of the global revenue of the other competitors. By entering into this segment, we'll be able to achieve our we'll able to increase our market share in the luxury segment globally. Also, the value addition is approximately 20% more than the current Granite things. We are maintaining our FY 'twenty seven guidance of 15% revenue growth with an EBITDA margin of the guidance given 18 to 20%. We still remain plan to remain at the upper side of our margin guidance.

5:28 Our priorities are clear, growing four categories, completing capacity expansion on time and improving profitability to allocating with discipline. We also like to give you that there has been a big win by democrats in United States. So we see now a strong momentum of orders coming from United States. We're already seeing some immediate trips by our customers to our factory as early in next week. So we are very confident there'll be huge momentum now coming from United States, not just for Granite Zinc, but also for stainless steel things. Now I would like to hand over like hand over to Executive Director and Group CFO, Mr. Anand Sharma. Over to you, Anand.

6:18 Anand. You, sir. Ladies and gentlemen, let me give you through the consolidated performance for quarter two FY 'twenty seven. Revenue from operation of 275.7 crore. It's increased by 14.6% Y and Y basis and 5.2% Q on Q basis. Total income, INR278 crore, up by 13.9%. Gross profit, INR149.7 crore, which is 16.8% higher. Gross margin also improved by 133 basis points to 53.9%. EBITDA grew to 54.1 crore, up by 9.3. Margin for quarter two FY 'twenty seven was 19.4% compared to Q2 FY 'twenty six, 20.3% and Q1 FY 'twenty seven, 21.2%.

7:10 Margin decrease is on account of higher raw material costs and CPET. Profit before tax and profit after tax both has increased by 10.35.8%. EPS is $9.97 as compared to quarter two FY six, dollars 9.56. Half year basis consolidated performance, revenue from operations INR 537.9 crore, up by 15%. Total income, 542.8 crore, up by 15.2%. Gross profit, 294.9 crore, up by 19%. Gross margin also improved by 174 basis points to 54.3. EBITDA INR110.1 crores, up by 17.6%. Margin by 42 basis points to 20.3%.

8:02 Before tax, $82.02 crore by 23.3%. Profit after tax, 61.1 crore, up by 21.3%. EPS increased to INR 21.02 as compared to last year's first half, INR78.59. With this, we can now open the floor for question and answer. Thank you. Over to you, operator. Thank you, sir. We will now begin the question and answer session. Star and two. Participants are requested to use handset while asking a question.

8:48 Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Resha Mehta with GreenEdge Wealth. Please go ahead. Yes, sir. Thank you. Congratulations for a decent show. First, I just wanted to check whether we've locked out on any export revenues for want of container availability? Was that a challenge or high freights were a challenge? Any disturbance in loss of revenues on that front?

9:36 So I think as a company, I think we've topped the highest revenue, Rish, in terms of export and for India. Yes, there has been tremendous challenges as far as availability of containers are concerned, the higher freight charges. But we've been able to fairly weather across this strong headwind than we've still been able to put on a great performance. So nothing we probably would have slipped about few containers here and there, but nothing significant. Got it. And only growth by across products. I see that surfaces has de grown in terms of revenues, while kitchen appliances revenue growth has also been flat. So if you could comment on these two specific product segments that why in this quarter it was subdued?

10:32 And what are our expectations going ahead? Yes. So as far as the services are concerned, I think this whole strategy like focusing on more exotic stones and which is one of a kind, I think that's really worked. Somehow, even in spite of very high inflation in United States, planet, I would say more natural exotic stones have been continued to do fairly well. And we targeted more premium customers. So that strategy has really worked. As you would have seen that the appliances sale has also grown by 10 on quarter on quarter. There is one piece of whole new appliances, which we are planning to which we unfortunately could not launch it before Diwali this year. We'll be able to now launch it in 2027, And this is in line with our what we do, our new launch, which we are doing by end of this year. So we are quite hopeful that this new premium products will fetch a lot of attention and traction in the market.

11:53 And second thing is we've also now been very careful of this BIS certification. So most of our appliances now, the total almost 70 to 80% of the appliances are manufactured by us, say, in house, we are now almost cutting down on imports as much as 70 to 80% at all levels. So there has been a supply chain issue as far as the assembly and the manufacturing, the appliances are concerned because the first year we started doing it. And I think as of now, on quarter will definitely improve, and I think we should be all... I think we should be all set for 2027 because by March, the BIS, you will not be able to import anything post March 27.

12:46 So, okay, I could reconcile your statement with kitchen appliances because the growth there was 1%. So probably because of the BIS disturbance, you know, the growth has been muted. But surfaces, I think you were saying that we did well in some natural premium stones. But if I look at the revenue, that has degrown by 3%. So that's what my question was, why has surface has degrown? No. UK. UK. That is right. UK. So so anyway, UK UK is right now very soft, and that's why you would have seen the surfaces of... I think a small drop of 3%. How much is it? In terms of revenues, yes. Because I think when you look at Yeah. Surfaces as a product, the revenue decrease is 3%. But if I look at CARYSIL LIMITED, The UK subsidiary, that is degrown by 25%.

13:32 So, again, the degrowth here has accelerated. So any any, you know, near term visibility in terms of at least arresting the degrowth? Yeah. So I think the... Yeah. That's right. And you said The UK UK is now... Is been... Is, you know, is passing through a bit of rough time. We are... We have just appointed a new new head for the services. He would be now taking charge from next month, and he's been asked only to drive the business for the services. So I think we want to get the services back on track. There are a lot of opportunities, but we just wanted someone to focus on. So after mister Julian Ann Anderson, we've left the company last year, we were looking to find a replacement of somebody who focuses on the software in The UK. So I think we are quite hopeful in the coming quarter, you will see an increase in the software.

14:26 But, you know, at the same time, sir, if I look at CARYSIL products, which is also, you know, based in UK, right, UK based subsidiary, that has grown at 11%. So, you know, again, of course, there are macro headwinds in The UK, but why would CARYSIL products have done well? That is yes, yes. That is the thing. See, there are two very different segments of the market. Is services which goes into kitchens and one is both kitchen sinks and pockets are used for more replacement market. So across the world, you would have seen the kitchen sink business even in the worst time, they are doing performing very well. While cupboards will start to go mostly to the newer kitchens, which are being built less now. So that's the major difference.

15:14 And sir, lastly, on the United Granite revenues, right, so that has also slowed to just 4% growth. You did talk about CARYSIL LIMITED, but United Granite has also slowed down its growth in terms of just 4%. 10% growth. Revenue grew from 5% to 5,000,000 to 5,600,000. In first half. In the in the first half. Yeah. I was talking about q two. Q one has been handsome growth. Yeah. But q two has slowed down. Yeah. Yeah. So q one has a better growth. Q two, a little slow growth. But overall, in the first six months, it's grown by more than 10%. Okay. Okay. And since we are so buoyant about new partnerships and with new customers, new OEM partners, would you think that maybe 15% revenue growth is conservative and we may like to revise it upwards at some point of time, maybe say in Q3 or thereabout?

16:19 Yes. I think I mean, very honestly, I've never seen this kind of optimism or positivity coming from the demand. It's kind of reconfirming and validating our future growth story has been at tremendous interest in our company across the world and mostly now from Europe and United States. I think there are some big deals, which is on the edge. And I think if these kind of big deals are being realized and what we hear from our U. S.

17:04 Customers and they're all coming to see us, there must be something going on right now. So I think if something of this realizes, I think we will be able to we will probably see an upside above 15%. Got it. All right. Sure. Thank you. Best wishes to you, Anand, sir. Yeah. As of now, it is... We are being conservative on... We know we don't want to overpromise on anything, but we have the great opportunities. Thank you. Sure. Thank you. Thank you, Ruchan. Thank you. The next question comes from the line of Edik Baffner with Monarch Network Capital.

17:58 Sir, congratulations on this good set of numbers despite of these challenging headwinds, which we faced during the quarter. But now, sir, as we see that now since the US election outcome has been out and we see that this is a great positive for us, so do we expect any kind of political changes or any kind of industrial changes which can happen and which are benefit CARYSIL the most? Do we expect anything like that? Starting the... I think, you know, the best thing has come out of this whole election is the positivity towards India, especially when there was this tariff looming on our head for a while now.

18:51 And I think we definitely will go on a back bog. This is obviously has will I think will boost a lot of our current customer confidence in The United States that goes across current to Lowe's to Home Depot to Minaj to MSI to for instance across and to Krausz. United Our States clients, we excited about the outcome, what has come. People have planned their visits to come and see us. There has been a lot of fresh inquiries in planet and in stainless steel things, which has been floated to us now in large numbers.

19:39 And also, secondly, I think there is also an opportunity where there is a lot of supply chain issue from Europe to United States. So I think we would be kind of keeping the benefits out of this. One was this looming sword on our head was about this tariff, which nobody knew where it was going. And I'm not saying that it's going away, but it is 100%. We are very confident that this will now it's not a definitely as possible to reach a trade deal with India. So I think we all are looking very positive at this point of time, and we can I think our business in United States will be more bullish in coming future? And also one important thing is I want to mention is this nano technology products, which I mentioned, which will set us another about 20% value addition, which is about 25% of the luxury kitchen sink business in the world. We are launching it in The United States in Las Vegas on first week of February.

20:52 So we are launching new models with this new material filler system, and I think that is also quite exciting for us. Secondly, we are also launching first time our new premium stainless steel kitchen sink that also at the show. So I think overall, we look very excited with this outcome of the results. Got it, sir. So, sir, we expect the things to change as fast as it could. So, this should benefit us. And sir, apart from this, can you confirm more on the Amazon U. S. Order, which you had mentioned earlier in the call? You have we have received the first order, right? Yes. We received the first order from Amazon U. S. And which will obviously be the election again.

21:44 There's everybody is a bit of kind of conservative as far as ordering goods because of tariff. But I think this will also bring a lot of positivity in Amazon side, too, and which will also help us in the to improve our business with Amazon in 2027. Okay. And sir, this order would be cost and sales things both? Sorry? I see stainless steel both or? Just the quartz and stainless right now right now, I mean, right now, I would say this for granite things. We will be getting our first new stainless steel things order by end of this year from different customer in United States.

22:29 So we see some good momentum coming on steel side also in The United States next year. Okay, sir. Got it. And then one last final question, sir. As we saw in the in the in the notice sent on the exchange regarding recognition of the CFO. So, sir, have we found any new CFO or anyone who can join in? Yeah. So I think I want to also clarify good opportunity. I think me and Anand has shared a great relationship. But as you know, that the CARYSIL is looking for CARYSIL two point o, this whole new phase of growth and where I would like to have the... All the CXO level people as close to me, working very close to me. Ananda has been tremendous contributor to the company many years. He has a great relationship, but there are also personal challenges with him.

23:28 So we we cannot kind of enforce this to anyone. So it's always tough to find as competent as others, fingers crossed, I think we have already shortlisted the candidates, and we should be appointing anytime soon. So it is not going to be long till you have a new CFO. Thank you. Yeah. Okay, sir. Got it, sir. Thank you, sir. Thank you. The next question comes from the line of Sanjay Lara with Bastian Research. Please go ahead. Yeah. Hi. Hi, sir. Thank you for the opportunity. So I just wanted to know, you know, in the q two, we...

24:16 What I wanted to know is the cost of is perfectly fine and Okay. And and and it it is pretty much controlled, and therefore, we see gross profit margin increase. But when I come down at the EBITDA level, the employer cost and other expense has been increasing rapidly. So if you can clarify on those level and specifically for a Q2 perspective? No. So I think one thing is very clear that company is on a rapid expansion mode, and we are enhancing our capacity. We need to train people ahead of time. So there is overlapping of employee cost, one. And second is that we do our on expansion phase. We've also hired a lot of new people more on like we hired a CTO, we hired a lot of project head, a lot of our engine engineers.

25:09 So there's also a new lot team which is coming into place, and this is basically to take care of this extra capacity, which is going to be realized by March 27. So once the capacity and sales is in place, the employee cost will be diluted to that extent. So we see as far as percentage of the employee cost rising in 2027 in terms of percentage to revenue.

25:58 So my second question would be we are increasing our cored zinc capacity and which will be live in early FY twenty seventh. And still think we have already done the capacity. And my question is, since we are in talks with so much new customer and the existing customers are also, you know, increasing their capacity and increasing their footprint with you. So how do we see the capacity, you know, ramp up? Because this would be pretty much for a year perspective point of view. Then again, we will go for a new CapEx or how do we see? No. I think whether capacity see, I think let me put this into pieces in two pieces. So I think that our capacity, what we are investing in infrastructures for zero five million things, where we are going to invest on the first phase of investment, 150,000 as far as the machinery is concerned. Anything which we want to move to another 250,000 sales, it will take about four months time for the company, which is good enough with time the new customer would give it to us.

27:13 As far as the current capacity is concerned and the challenges that we have, like, for example, last month, we did our highest sales and we kind of ran over 100% capacity just for one month is because we had kind of huge orders. We had to put up a great incentive scheme with our workers, and we also improved our production cycles at the manufacturing level, so which has helped us to kind of outdo performance last month. Any of these rush orders come something before the capacity come in place, I think we have we have our team in place. Like you said, that the employee cost is rising because we have a lot of employees. We are backing us up. We feel we increase the capacity, work overtime till the new capacity comes up.

28:14 As we all know, supply chain is the biggest issue at this point of time globally, and we do not want to let this opportunity go. Sir, another question would be since what we are seeing and what we are hearing in various other management across the industry, we are seeing that freight cost has been increasing rapidly in the quarter and and and coming Yeah. Period of time as well. So how do we see that? And is that pressure of full along? And and and including this, we are talking about 18% to 20% margin of EBITDA level. Is that would be maintained because of the globally pressured going on?

29:01 Yes. Good question. I think this margin, unfortunately, we probably have missed our target margin in quarter two. That's what I come to here. But if you're looking at the current global situation, I think our company has done very well. Our team has performed very well because it is unprecedented freight cost and the disruption in supply chain which is going inside the world. Now the quarter two, I think probably is the worst ever challenging quarter we ever had, where we had the highest cost or challenges in terms of every input cost of whatever it is, freight to anything. So I think this margin of 18% to 20%, already, I think we did how much, 90%, 20%?

29:55 Percent. Stand alone was 21%. So already on the stand alone, we're already doing 20%. Yes. U. K. And U. S. Was quite flat. So that's why it has kind of on consolidation, diluted the margin. But on the consolidated margin, 19.4%. So only my answer to you is moving forward, right now, we see a trend of pulling down. We see the raw material prices going down. We see the freight gradually going down. So I think I can only see an improvement in margin moving forward. The next question comes from the line of Bala Murlikrishnan with Oman Investment Advisors.

30:53 Congrats on good setup number. So my first question is regarding the stainless steel. We had some capacity in the last quarter, but the volumes this quarter are not perfect. So for this is clarify that one, the in the q three, we can see some volume additions. What would be the volume reduction in the first quarter? We're seeing the capacity has been increased. The volumes have not come, but in the quarter two, in the stainless steel. So it has been flat at 91%. Yes. So I think quarter on quarter, we're able to maintain the sale We've been on improvement. But like I said, that there is a new inquiry for stages moving forward.

31:46 We will see in the coming quarters. But as far as the fundamentals, think we are still very strong. Sales is still is doing well. And this new technology where we are going to press the things with 15 radius and 25 radius, which will only happen in quarter four. Okay. Understood. Secondly, the some deals which agreements you discussed in the last quarter, like Australia, New Zealand, the London from Canada also. So what is your progress on it? Have those deals are neutralized? Have you started any dispatcher to this country, sir? Sir, I'm having a bit difficulty understanding you. So if you can go slow and a bit louder, please.

32:40 Yes. In last quarter, we discussed about some agreements with the Australian, New Zealand retail customers and also some Canada customers. So what is there any progress there? And have you started any dispatches to them? So we have signed a good deal, I would say, great deal with Haefler, New Zealand and Australia. And we have got our first orders in this quarter and which would be dispatched by next month. And this coming quarters, I think the deal was about anywhere around 25,000 to 30,000 things a year. And I think we expect to be on track next year. But if your question is, have we received the orders? Yes, we have received the orders, also from Canada and also from New Zealand, Australia.

33:39 Sir. So lastly, this long term CapEx CapEx, in the earlier presentation, we indicated that we want to move the quartzinc capacity to $1,500,000 by FY thirty thirty one and also in similar line, stainless into $500,000 So given the current trajectory, so we are adding 250,000 tons. So do you think I feel these figures would be a little bit conservative, maybe there is a lot of scope to add capacity by that time. So I would like to know what is your thoughts on this one, sir? Yes. So I think we are on track with what we are doing. Obviously, we will see on how quarter and quarter shapes up and what are the deals kind of shaped up.

34:29 We are very excited to see the quarter or the next quarter, I think, because there are some very interesting deals which can take place. And then we can probably significantly move the trajectory to the positive side. But as of now, the 1,250,000 I think on the long term, 1,500,000, INR $15,000,000, I think, is okay. And then when further things improve, we will see to enhance the capacity. But if your question is, do we have the further capacity to enhance? I think we have a huge infrastructure and land, whether we can further enhance the capacity right now.

35:18 Yes. Yeah. Please go ahead. Yeah. And maybe this month by month... By this month's end, we will go to that market showroom for a a visit, sir. I mean, maybe we can share this information with the team. Yeah. Yeah. Sure. Yeah. Sure. Yeah. You are saying something, sir. No. I'm saying is... You see... And I've been saying this again. There's 4,000,000,000 things in the market. Supply chain is a problem around the world, and whichever company is able to do at a great cost and a great supplies on time, which is going to be a leader. So you so you never know what things get disrupted in Western part since all our competition is coming from the Western part.

36:07 So you are absolutely right. I think we should be we should be geared up. If something if something goes wrong, we heard that one of the Italian companies start or will be closing down. So you never know if something like this happens, then we may get quite a huge momentum, I mean, quite momentum in terms of the orders. And the same thing is happening on the stainless steel side, freight cost is so incredible coming from the Far Eastern supplying to Europe and to The United States that people are now I've never seen such flow of inquiries also for the stainless steel side. So things look pretty interesting. I think we need to just keep a good watch.

36:53 And yes, we should be ready to enhance the capacity if some kind of this some things change dramatically. You never know how fast things can change in this global scenario. Yes, sir. That's good, sir. And good luck to Anand and Sarwath. We have been with the company for many years. And we should best of luck to you. Thank you. Thank you so much. Thank you. The next question comes from the line of Sagar Jatwani with PhillipCapital. Please go ahead.

37:39 Yes. Thanks for the opportunity. I have a couple of questions. First on what was the impact of sea freight cost rise and RM inflation each on the EBITDA margins, if you could break that down? And also any pricing action that we have taken during the quarter? Or are we going to take any pricing action going forward to combat the RF inflation? That is question number one. Yes. So I think we're starting to put both seafreight and raw materials cost in fact. I think it's the impact is about 1.5%. Yes, 1.10.5% to 2% And that's why probably we missed our margin target.

38:26 And your second question was on the price. Yes, I think we already have increased 5%, 5% price. But if something goes wrong further than this, if some inflation... If some inflationary cost comes in terms of freight or in terms of... But the best part is all our exports to the major customers are all FOB basis. So since it is on a FOB basis, there's not much impact on us. And also, if there is an increase in the raw material cost further than this, that will be passed on to the customers. But we'll have worked on fundamentally, we'll ensure that the margin guidance is not is that we are able to stick to the guidance, side of our margin guidance.

39:15 This pricing side that we have taken, it was effective from when? We did it from last month. Okay. So next quarter, we'll have a full quarter impact, Yes. Positive impact. Okay. Second question is on the India business expansion. So what's the expansion strategy in India? Are we going expanding region wise, state wise? Or is it that we are tapping specific cities and towns across India given that we have a premium positioning, premium and luxury positioning? So what's your expansion strategy here? Yes. So I think if you like, if you know, we have hired PwC for my leadership one and two restructuring process, which is on.

40:08 One thing has been come out very clearly is that if you want to the kind of growth we are looking from India, and I very honestly, I think we are performing as a brand and as a company in India, and that's why I have kind of put a growth, I think, to INR500 crores. So India is going to be our growth engine. And if you want to go to INR500 crores, there are a few things we need to do, but I can only touch the few important things. First is that you need a good leadership team. So one leader is not enough to drive this whole India business. So we are basically going to split this whole into e com business, B2B business and B2C business. Further, when you go to leadership two, we are going to split it in terms of categories, things and profits one and appliances into two. So an there accountability and ownership for each of this. We would be strongly governing by the KPIs for all the team members till the ASM level and try to give them targets, try to get and have a very strong monitoring control, which we honestly don't have right now.

41:22 Third is, right now, this whole exercise is going to take place, and we feel that there are the top eight to 10 centers where CARYSIL is doing well, we see that territory itself having a lot of growth opportunities. So we're trying to expand our team around all these eight to 10 regions across India. And at the same time, we are also trying to look at what are the gaps in the market which the company needs to do. I think so we are on a track right now to shape this up. I think by end of you'll be able to hear this news in the next thirty to sixty days about our new team and new structure and what we plan to do. Yes.

42:09 Last bit the advertisement and the branding expenses, how should we look at it going forward given our fast paced expansion in India specifically given that we have a brand ambassador now in place. Also, we plan to add another few brand ambassadors as part of our last conversation. So your comments on ad and the branding expenses maybe for next year, that should be helpful. Yes. So I think this is one important factor for what I think is full brand store expansion. So on the brand store expansion, we only have 20 brand stores across India, which most of our peers have more than 150 to 200 brand stores. So I think this is where, one, about a large chunk in the 'twenty seven, about INR 25 crores to INR 30 crores, maybe we have to invest as a company to kind of grow to the revenue of build a road towards INR500 crores. I think sorry about that point, I forgot.

43:13 And as far as the marketing for the brand ambassador, I think one thing is very clear. We internally spoke about this that we need a very clear 5% pure advertising expenses going to build a brand in India, not with the same goal, but purely on terms of advertising and branding. And December, what we do all, we are going to spread across the TVCs. We are going to be on social media. We want to see the bill billboards in major cities where CARYSIL as a brand is a leader. A lot of promotion with BOVI around. So I think you'll see that the company is now going to spend as high as 5% only on advertising as far as this? The second question would be yours, how much will be your diluted margins?

44:10 What we're to do is we are going to minimize the discount of 5%, which we are giving to just to bring to more of a push strategy. So we are going to stop doing that 5% of extra discount, which we are giving to the distributors and that 5% we are going to use for brand building. So try to see that our, you know, that our margins are not disturbed. Yeah. And and that way, the economies of scale should also help in kind of improving the margins, in fact, right, in addition to the discounting rollback. Correct. Correct. Correct. Understood. That's The whole... That... Do you know this whole thing of what what we do all and, obviously, I know him also as person also, a great, great, great guy. But the impact, a lot of questions were asked that why did you hire a male brand ambassador versus a female.

45:10 You know? So I think this whole concept of getting a male a man inside a kitchen, cooking for females, and most of the chefs are men in the world, one of the best chefs in the world. Bobby Bobby has such a great impact, what I see recently, and I think this is really going to build the brand to the next level. It's gonna catch a lot of eye eyeballs. Yeah. So we are quite excited to do something different than the industry. Yeah. Yeah. Thank you for answering all all my questions. All the best. Yeah. Thank you. Thank you. The next question comes from the line of Nipur Kimka with CDEquity Research. Please go ahead.

46:10 Yeah. Hi, sir. Good evening. So my first question was, do you think there is a sufficient pull of gravity for attracting top talent to Bhavnagar, a city with the size a tenth of Vandebar in the population less than a million? You see, I think your question come to me. How come I've been able What attracts one of the CARYSIL CARYSILL, the amount of momentum, the infrastructure, what we have. So I think if you are... Have you have you been to our factory before? No. No. Okay. Good. Okay. Good. So you should come, and you'll realize that this is probably the best place to stay.

46:56 Secondly, if somebody wants to really be made pretty life, getting away from the hustle and bustle, lot of inflation cost, lot of weather problem. Right? Bombay also crossed 300 a k q r recently, right, in terms of... I I can go home and I I... And I kind of fell sick, right, because of the weather. So for example, then my CTO I hired is from Bombay. And so yesterday, he called me. He thinks that I wanna move with my wife to... I'm not able to tolerate the weather. Secondly, he said the quality of the life I get in, was astonished to see. Third is the working culture at CARYSIL, the new headquarters coming up. It really excites me a lot of sports complex, team building. So I think this is a lot of other good things which we have. We are not completely, like, a 100% you need to be here. We we do a lot of, like, a week, like, five days, ten days, you know, work outside our our factory. That is also fine. It's the... We don't want that a 100% somebody needs to be based there. So we're also very flexible sometimes in a bit of high high grade working style, but most of my time level, you need to spend with the chairman of the of the company. Now whether I'll be in Bombay, you can spend there. If I'm in Ghana, you have to spend here.

48:24 Understood. Understood. Understood. And, sir, that's You would be... But you'll be you'll be shocked when you see the new CFO levels joining us and from which company they are coming and joining me. That means there must be something good that we must be doing. Yeah. Definitely. Definitely. Yeah. And, sir, secondly, have you considered bulking up your raw materials in the last six months because of this disruption and at the time when free trades have also sold? And by what? Is your question on inventory building? Yeah. Inventory of raw materials. In inventory, yes. We did build a build of inventory raw raw material, and that's why we have all... Far as the inventory is a bit higher on quarter two.

49:15 Yes. But, like, in quarter two, if I see, it was mostly I believe it was mostly largely same as FY 'twenty six. Anam, you want to Yes. So I think we have already booked material for next three to four months because of the pricing what we are getting. So what we discussed earlier that we are booking entry in advance so that we have a fair pricing available to us. We have not built more stock. Raw material, we have a normal stock. In terms of import items, we have some contract. Okay. Okay. So but if, let's say, in the future, if the situation repeats again, so will we... It'd be wise to build up some raw materials, like, extra raw materials reserved for this kind of situation?

50:09 So there is a lot of volatility, I think, and our main raw material, MMA and PMMA has a a link with the crude, and its prices going up and down. So we don't want to start to a one price. Any up and down, it's even out in the next six months or three months. So up to three, four months, we can take a position. But more than three, four months, there is no visibility. So we don't want to disturb that kind of visibility. Understood. Understood. Okay. Okay. Thank you, sir. Thank you. Welcome. Yes. Thank you. The next question comes from the line of Rishav Shah with Systematics. Please go ahead. Hi. So my question is regarding the kitchen appliances and the faucets where we are doubling our capacity, which will be done by the end of FY '27.

51:03 So we'll be reaping the benefits in FY twenty eight. I just wanted to know what sort of asset turnover or the additional revenue that we are planning on and what would be the target utilization for the sale? Yeah. This this is very asset light model because it's more than manufacturing. So the turnover will be five to six times of the CapEx what we are doing. And on a inflation, it will gradually increase inflation. We are targeting for next year 80 to 8,500. Ladies and gentlemen, due to time constraint, that was the last question for today.

51:54 I now hand the conference over to the management for closing comments. Thank you very much for joining this call. We hope that we're able to clarify your queries. However, if you have further queries, you may reach out to GI, Investor Advisor, to guide to the company. Have a great Diwali, and happy New Year. Thank you, sir. On behalf of Go India advisers, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.