Home / Transcripts / Stylam Industries Limited (526951) · January 19, 2023

Stylam Industries Limited (526951) Earnings Call Transcript

January 19, 2023

BSE Limited IN Industrials Building Products earnings 48 min

Earnings Call Speaker Segments

Operator operator
#1

Ladies and gentlemen, good day, and welcome to the Q3 FY '23 Earnings Conference Call of Stylam Industries Limited, hosted by Systematix Institutional Equities. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Ashish Poddar from Systematix Institutional Equities. Thank you, and over to you.

Ashish Poddar analyst
#2

Yes. Thank you, Michelle. Good afternoon, everyone. I'm Ashish Poddar from Systematix. I welcome you all for this conference call of Stylam Industries to discuss Q3 FY '23 earnings. So from the management side, we have Mr. Jagdish Gupta, the Managing Director; Mr. Manit Gupta, Executive Director; and Mr. Kishan Nagpal, the Chief Financial Officer. Without much ado, I'll request moderator to straightaway go for the Q&A session.

Operator operator
#3

[Operator Instructions] We have the first question from the line of Nikhil Gada from Abakkus Asset Managers LLP.

Nikhil Gada analyst
#4

Sir, my first question is regarding the overall demand scenario. I mean, our 3Q has been really, really good in terms of the volume growth. And considering the other sort of categories, we are seeing some amount of slowdown. So do we expect that this can also reflect in our business as well for the upcoming quarters? Or you think that we are on a strong footing?

Jagdish Gupta executive
#5

No, no. We will be definitely on strong footing. Even in quarter 3, we had some challenges of logistics. We could not get a few containers, 20, 30 containers from Russia, and to this Uzbekistan and Ukraine, which we are selling through via Poland. So that reduced our sales a little bit by 2%, 3% a quarter. Otherwise, we are very quite hopeful. Domestically, also we are increasing, not like export but [ exporting products ] every month. So it will be better than this quarter, surely.

Nikhil Gada analyst
#6

Okay. Understood, sir. And just, sir, as you just reflected on the domestic part of the business, I mean, for now past 2 quarters, you are doing somewhere around INR 80 crores to INR 82 crores run rate on a quarterly basis. And I remember maybe 6 months like you had said that we would be close to INR 350 crores to INR 400 crores of total sales in domestic...

Jagdish Gupta executive
#7

Maybe not INR 400 crores, INR 325 crores to INR 350 crores.

Nikhil Gada analyst
#8

INR 325 crores to INR 330 crores you think is possible?

Jagdish Gupta executive
#9

So actually the reason we are trying our best, and very hopeful, brand is already there, we are getting good response from the new distributors. Surely, it will grow.

Nikhil Gada analyst
#10

Understood, sir. And sir, just firstly, on the acrylic panel, can you give us the number as in how much sales was done in 3Q?

Jagdish Gupta executive
#11

Very good. You see when something is starting new in India, we are a import substitute. You will see, even up to now, we have INR 16 crores turnover already last quarter. Last quarter, we have made almost INR 7.5 crore, which is beginning and you can understand everywhere now the availability is 3, 4 months, you will see brand name will be in the market, Granex.

Nikhil Gada analyst
#12

So sir, just if you can sort of give us some amount of guidance because I think you had mentioned that we'll do somewhere around INR 15 crores to INR 20 crores quarterly from second half, and we have done close to INR 7.5 crores to INR 8 crores. I understand it takes some amount of time to...

Jagdish Gupta executive
#13

That is due to -- there is a new brand. You see, first plant in India for this sector. And when it will grow, it will grow multiple, same thing will happen with [indiscernible] in laminates. It means quality is acceptable. And we [indiscernible] export also.

Nikhil Gada analyst
#14

I understood. Okay, sir. Fair enough. Sir, just lastly, 2 more questions from my end. Just on the margin front, we are seeing a very steady improvement in our -- both in our gross as well as the EBITDA margins. So do you see further scope of improvement both from maybe RM side as well as from our product mix?

Jagdish Gupta executive
#15

Yes, yes, yes. You see our RM old -- this material, which will be used in third quarter, [ hopefully ] is from the old prices. And we have to book, accept on both, we have to plan minimum 3 to 6 months. So now with new product, new raw material is coming from our [indiscernible] on reduced prices. So definitely, it will improve.

Nikhil Gada analyst
#16

Understood. And sir, just lastly, I think we have done some restatement in our previous year's 3Q numbers. Can you help us what this restatement was?

Kishan Nagpal executive
#17

[Foreign Language]

Nikhil Gada analyst
#18

Sir, your voice is not clear.

Jagdish Gupta executive
#19

Currency fluctuation.

Kishan Nagpal executive
#20

Currency fluctuation. [Foreign Language]

Nikhil Gada analyst
#21

[Foreign Language]

Kishan Nagpal executive
#22

No, no, there is no impact at all. [Foreign Language]

Nikhil Gada analyst
#23

[Foreign Language]

Kishan Nagpal executive
#24

[Foreign Language]

Operator operator
#25

We have the next question from the line of Pritesh Chheda from Lucky Investment Managers.

Pritesh Chheda analyst
#26

Yes. Congratulations for continuous improvement in numbers. Sir, just a couple of questions. One, you mentioned about this new RM. So when should this new RM start flowing in your P&L? And does it mean that we go back to the growth of the EBITDA margins, which you were making before this whole RM price rise of about 20% margin number?

Jagdish Gupta executive
#27

Hopefully, maybe not in current quarter, maybe next quarter, surely.

Pritesh Chheda analyst
#28

Okay. And -- but we'll start seeing the improvement and the journey towards 20%...

Jagdish Gupta executive
#29

You can see the improvement in every month, first, second. You can see first difference, second difference, third difference, you will see more difference.

Pritesh Chheda analyst
#30

Sir, the solid surface business of INR 7.5 crores, which you mentioned is the annual number or quarterly number you gave?

Jagdish Gupta executive
#31

No, no, no, quarterly. Now it is improving every...

Pritesh Chheda analyst
#32

Okay. Okay. And lastly, sir, I wanted to know the 9-month laminate volume number and the realization number or the quarterly volume number and the realization...

Kishan Nagpal executive
#33

9-month laminate is INR 86 lakhs [Foreign Language].

Pritesh Chheda analyst
#34

This is which? This is for 9-month?

Kishan Nagpal executive
#35

9-month [ period ].

Pritesh Chheda analyst
#36

Okay. And for the quarter?

Kishan Nagpal executive
#37

30.01 million.

Pritesh Chheda analyst
#38

[Foreign Language]

Kishan Nagpal executive
#39

[Foreign Language]

Pritesh Chheda analyst
#40

So basically, the full growth that we see is all value-driven?

Jagdish Gupta executive
#41

No, no, no, no. You see, INR 86 lakhs is for 9-month. Last year was INR 89 lakhs.

Kishan Nagpal executive
#42

INR 89 lakhs for 12-month.

Jagdish Gupta executive
#43

12-month.

Pritesh Chheda analyst
#44

[Foreign Language] INR 89 lakhs for 12-month.

Jagdish Gupta executive
#45

[Foreign Language]

Pritesh Chheda analyst
#46

Okay. Okay. Sir, I thought it was for 9-month.

Kishan Nagpal executive
#47

9-month INR 65 lakhs.

Jagdish Gupta executive
#48

Last year.

Pritesh Chheda analyst
#49

INR 65 lakhs, okay, sir. And on the plant utilization side, where are we?

Jagdish Gupta executive
#50

About 75% to 80%.

Kishan Nagpal executive
#51

80%.

Pritesh Chheda analyst
#52

Okay. And what is your CapEx plan now you are...

Jagdish Gupta executive
#53

I already mentioned many times, the CapEx plan right now, just -- adjustment, you can say, modernization of machinery, some automation like that, already going on.

Pritesh Chheda analyst
#54

Are you adding any laminate line?

Jagdish Gupta executive
#55

No, no, no. Still, we have too much -- rather it is utilization, we are going from automation that will also increase 30%, 40% more capacity from the existing things.

Pritesh Chheda analyst
#56

So you have scrapped the ply and the MDF and all those capacities?

Jagdish Gupta executive
#57

No, no, no. We have never told, plywood not scrapped, that's for -- somebody people like you mentioned, they will go to some other products, not in plywood.

Pritesh Chheda analyst
#58

Okay. And what is the maintenance or the automation CapEx that you'll spend in...

Jagdish Gupta executive
#59

That will be not more than INR 30 crores, INR 40 crores in -- it's already started.

Pritesh Chheda analyst
#60

INR 30 crores, INR 40 crores?

Jagdish Gupta executive
#61

Not in 1 year, 3, 4 years.

Pritesh Chheda analyst
#62

So basically INR 10 crores per annum.

Jagdish Gupta executive
#63

INR 10 crores, INR 15 crores.

Pritesh Chheda analyst
#64

Thank you very much, sir, and all the best to you, sir.

Operator operator
#65

Sir, before we move ahead on the management line, sir, your voice is little fumbled. So I would request you to kindly...

Jagdish Gupta executive
#66

No, my voice is not okay.

Operator operator
#67

Sir, it is fine, but it is a little fumbled. Some words we are not able to understand when you are speaking.

Jagdish Gupta executive
#68

You interrupt and then I will speak again. We will see...

Operator operator
#69

No, sir. That would be fine. This is okay. Sir, I would request you to speak in the same manner how you're speaking to me right now. We move on to the next participant. The question is from the line of Rishab Bothra from Anand Rathi.

Rishab Bothra analyst
#70

I just wanted to check, in our presentation, we have mentioned 9-month sales volume figure as 9.4 million sheets. Whereas in...

Kishan Nagpal executive
#71

In the presentation we have revised the figure, sir.

Rishab Bothra analyst
#72

Pardon me, sir.

Kishan Nagpal executive
#73

We've revised the figure.

Rishab Bothra analyst
#74

Okay. So what is the figure now for 9-month?

Jagdish Gupta executive
#75

8.6 million.

Rishab Bothra analyst
#76

8.6 million. But when we look at the 3 quarters, Q1, Q2, Q3, it's coming at 8.9 million. So I think there is some...

Kishan Nagpal executive
#77

24 crore, I think 32 and 30 crore, 86 crore.

Rishab Bothra analyst
#78

2.7 million, 3.2 million and 3.01 million.

Kishan Nagpal executive
#79

[Foreign Language]

Rishab Bothra analyst
#80

[Foreign Language] first half was your 5.9 million sheets. 2.7 million and 3.2 million.

Kishan Nagpal executive
#81

5.6 crore.

Rishab Bothra analyst
#82

Okay. 5.6 crore. Okay. Correct.

Kishan Nagpal executive
#83

24 crore plus 32 and 30 crore, 86 crore.

Rishab Bothra analyst
#84

Okay. And sir, your depreciation reduced considerably this quarter and interest has increased. So any clarity on that?

Kishan Nagpal executive
#85

[Foreign Language]

Rishab Bothra analyst
#86

Okay. And depreciation?

Kishan Nagpal executive
#87

[Foreign Language]

Rishab Bothra analyst
#88

So this will be the normalized depreciation going forward?

Kishan Nagpal executive
#89

Definitely. If there will be no addition to the [Foreign Language].

Rishab Bothra analyst
#90

Okay. [Foreign Language]

Kishan Nagpal executive
#91

[Foreign Language]

Jagdish Gupta executive
#92

[indiscernible] 5, 10, 15 also.

Rishab Bothra analyst
#93

[Foreign Language]

Jagdish Gupta executive
#94

[Foreign Language]

Rishab Bothra analyst
#95

[Foreign Language]

Jagdish Gupta executive
#96

No need for any build CapEx.

Operator operator
#97

We have the next question from the line of Udit Gajiwala from YES Securities.

Udit Gajiwala analyst
#98

[Foreign Language] there were some nations where we could not supply due to logistics issues. So what would be that amount [Foreign Language]?

Jagdish Gupta executive
#99

[Foreign Language] have already deposited with us. We are not producing anything without advance payment.

Udit Gajiwala analyst
#100

[Foreign Language]

Jagdish Gupta executive
#101

[Foreign Language] already start [ growing ].

Udit Gajiwala analyst
#102

Okay, sir. [Foreign Language] So that we'll see from FY '24 supposedly the [Foreign Language].

Jagdish Gupta executive
#103

Not '24, in the fourth quarter. From next -- it will improve every quarter. The reason being, when you will -- your sales will increase, overhead will decrease, so there are so many parameters. Ocean freight is already going to the normal level of 2 years back.

Udit Gajiwala analyst
#104

Got it. And sir, could you just reexplain [Foreign Language]

Kishan Nagpal executive
#105

[Foreign Language]

Operator operator
#106

We have the next question from the line of Achal Lohade from JM Financial.

Achal Lohade analyst
#107

Sir, just wanted to understand how is the domestic scenario looking like in terms of the demand situation? And also, how are the pricing moving in terms of the realization for the domestic segment?

Jagdish Gupta executive
#108

As I said, domestic, we are doing our best. Now network increasing every month. Realization is in part, realization is due to this raw material cost a little more. Now everyone has domestically reduced little, little prices. So we are very quite hopeful every month, there will be increase of INR 3 crores, INR 5 crores turnover, domestic turnover increasing if you go through whole data. We are doing good in domestic market, not as compared to export. Our export is growing more. But we've been proud that when our product is accepted in European country, U.S. country. It is why -- not in India, and we are quite hopeful. If you see -- you can see from third quarter, second quarter is INR 82 crores, third quarter or fourth, same.

Achal Lohade analyst
#109

Correct. Correct. Is it possible to get some more sense with respect to the domestic volume? How much was the domestic volume in 3Q?

Jagdish Gupta executive
#110

We are working hard. There are more than 200 people working on the metallic front. And let's say there's 3 years to establish in international market. Domestic is also growing.

Achal Lohade analyst
#111

Correct. Correct. Sir, in terms of the volume number of sheets sold in 3Q for -- in the domestic market?

Kishan Nagpal executive
#112

Domestic volumes?

Achal Lohade analyst
#113

Yes.

Kishan Nagpal executive
#114

12.15 lakhs.

Achal Lohade analyst
#115

Okay. And what was this in last year same quarter, sir?

Kishan Nagpal executive
#116

In last year same quarter, 9.05 lakhs.

Jagdish Gupta executive
#117

0.9 million.

Achal Lohade analyst
#118

Correct. Correct. Correct. And in 2Q...

Jagdish Gupta executive
#119

That means you can understand it has already increased almost [ 25 ].

Achal Lohade analyst
#120

Significant increase correct. And for the second quarter, sir?

Kishan Nagpal executive
#121

Second quarter this year, 11.9 lakhs. And last year it was 12.15 lakhs.

Achal Lohade analyst
#122

Okay. Okay. And for 9 months, sorry, I'm asking too many numbers, but just to get a sense in terms of the breakup, 9 months FY '23?

Kishan Nagpal executive
#123

9 months 33 lakhs [Foreign Language]

Jagdish Gupta executive
#124

3.3 million. The sheets number is matter. The reason begin, when we are going for value resell, and higher thickness, then value more and the quantity may be there.

Achal Lohade analyst
#125

Correct. Correct. Correct. And sir, if you can tell me, you said 200 people you have in the domestic segment. In terms of the distributors, retailers, any color as to where we are, where we want to be eventually?

Jagdish Gupta executive
#126

Sorry?

Achal Lohade analyst
#127

What is the number of distributors we have in the domestic...

Jagdish Gupta executive
#128

You see distributors we have many, maybe more than 200. That do not matter. If you have more distributor, there should not be quantity. There should be quality distributors. You have a distributor selling only 200 sheets per month. There is one distributor who is selling 3,000, so that not much matter.

Achal Lohade analyst
#129

Understood. So sorry, I joined a bit late. So what is the volume growth outlook we are talking about and the margin, sir, for us for FY '23?

Jagdish Gupta executive
#130

Growth you can see from the last year, it is growing 50% this year. And margins also, even in spite of the fact that raw material prices, ocean rates, everything drastically increased even then we are doing our best and doing good. This quarter, we are around about 17 -- near to 17% EBITDA.

Achal Lohade analyst
#131

Correct, correct. And what's the capacity utilization, if I were to ask you at this point in time?

Jagdish Gupta executive
#132

That would be 75% to 80%, again, depend on the capacity utilizing also not matter. If you are selling a high-value product, current capacity utilization may be more. If you are just selling a potato or commodities, then it can be more.

Achal Lohade analyst
#133

Understood. Understood. Great, sir. Any update on the acrylic...

Jagdish Gupta executive
#134

Acrylic is doing good. We are established in the market. And even we are getting in the quarter almost INR 7.5 crores to INR 8 crores, so it means we are happy. When there is a new product and market is accepting it.

Operator operator
#135

We have the next question from the line of Shubham Agarwal from Axis Capital.

Shubham Agarwal analyst
#136

Sir, just one question. If we look at our export revenue of INR 487 crores in the first 9 months of this year. How much of this would be -- sir, I'm saying that if you look at the export revenue alone from the first 9 months of this year, which is about INR 487 crores. How much of this number would be from white label export products?

Jagdish Gupta executive
#137

Could not understand -- what is the -- out of the INR 487 crore, [indiscernible].

Shubham Agarwal analyst
#138

How much would be from -- yes, from this INR 487 crores, how much would be from white-labeled exports, white label products export?

Kishan Nagpal executive
#139

White label products.

Jagdish Gupta executive
#140

White label, what is the meaning of white label?

Shubham Agarwal analyst
#141

I mean, where you are not stamping a brand on the laminate and selling it to...

Jagdish Gupta executive
#142

Okay, okay, branded. I told many times...

Shubham Agarwal analyst
#143

Unbranded, yes.

Jagdish Gupta executive
#144

60% of our turnover is on our brand name, many countries. 35% to 40% is OEM.

Shubham Agarwal analyst
#145

Okay, sir.

Jagdish Gupta executive
#146

OEM and end user, which are end user like thyssenkrupp is our customers. They are using in their elevators and escalators. So they don't need any brand.

Shubham Agarwal analyst
#147

Okay. So this 65% is only sold with your brand name in the foreign markets?

Jagdish Gupta executive
#148

Many countries, U.K., Netherlands.

Shubham Agarwal analyst
#149

Yes, in the European -- yes, yes. Okay. So that was all I wanted to check with you.

Operator operator
#150

We have the next question from the line of Pranav from Equirus Securities.

Pranav Mehta analyst
#151

Sir, I wanted to [Technical Difficulty].

Operator operator
#152

I'm sorry to interrupt, Mr. Pranav, your voice is breaking. We couldn't hear you.

Pranav Mehta analyst
#153

Hello? Am I [Technical Difficulty]?

Operator operator
#154

No, sir. I would request you to please rejoin the queue. We have the next question from the line of Pritesh Chheda from Lucky Investment Managers.

Pritesh Chheda analyst
#155

Sir, on the export side, we continue to hear in lot of other building material products about channel inventory and about slower growth in lot of these exporting nations. But when we look at your numbers, it's fairly stable on a quarter-on-quarter basis. So if you could give some color on what exactly we are doing on the export...

Jagdish Gupta executive
#156

It is good or better. It is good that we are...

Pritesh Chheda analyst
#157

It is, sir, very good. And we've just wanted...

Jagdish Gupta executive
#158

And sale is improving in Europe and all developed countries, not in Middle East.

Pritesh Chheda analyst
#159

Okay.

Jagdish Gupta executive
#160

You can understand that our quality like what we view as local Make in India. Now Made in India community is established by talents in these countries. And we are quite hopeful that it will increase more in every month. In our core, we are finding a very -- more partners over there.

Pritesh Chheda analyst
#161

So you are adding more customers and more countries...

Jagdish Gupta executive
#162

Customer and country also. Customers, mostly we are working as a partner, not a customer, buyer and supplier. This is the reason that our sales is increasing.

Pritesh Chheda analyst
#163

Okay. And you see this trend continuing, and that's the reason why you talked about 15%, 20% top line growth next year?

Jagdish Gupta executive
#164

Yes, yes. Definitely, surely.

Pritesh Chheda analyst
#165

Okay. And just lastly here, what new countries have you added?

Jagdish Gupta executive
#166

No. We never disclose. We are very weak in U.S.A. and in North and South America, we see increasing. You see, there is no matter of country, we are already covering most of the countries. In some country, we have new products are coming, new customers, we can find more customers. And that our old customer is also improving their sales.

Operator operator
#167

We have the next question from the line of Pranav from Equirus Securities. I'm sorry to interrupt, sir, there is a disturbance on your line -- on the management line.

Jagdish Gupta executive
#168

From our side, no.

Operator operator
#169

Yes, sir. Sir, I think you are moving the receiver. So we could hear that. Okay, sir. Kindly proceed. Mr. Pranav?

Pranav Mehta analyst
#170

Yes. Can you hear me?

Jagdish Gupta executive
#171

[Foreign Language] Yes.

Pranav Mehta analyst
#172

Yes, sir. [Technical Difficulty]

Operator operator
#173

I'm sorry to interrupt, Mr. Pranav, we are not able to hear you.

Jagdish Gupta executive
#174

But I can hear him, madam.

Operator operator
#175

Sir, his voice is breaking.

Pranav Mehta analyst
#176

Hello. Is it clear now?

Jagdish Gupta executive
#177

Yes.

Pranav Mehta analyst
#178

[Foreign Language] So any particular reason?

Jagdish Gupta executive
#179

[Foreign Language]

Kishan Nagpal executive
#180

[Foreign Language]

Pranav Mehta analyst
#181

[Foreign Language]. Hello?

Operator operator
#182

Pranav, your voice is breaking again.

Pranav Mehta analyst
#183

Yes. Can you hear me now?

Kishan Nagpal executive
#184

Please continue.

Pranav Mehta analyst
#185

Yes, sir. So mainly it is because of freight rate only.

Jagdish Gupta executive
#186

Freight also, but other parameters also when the sales will increase. Overall, expenses will definitely decrease. It is not increasing proportionately.

Pranav Mehta analyst
#187

Yes, sir. [Technical Difficulty]

Operator operator
#188

Pranav, your voice is breaking. We cannot hear you.

Pranav Mehta analyst
#189

Hello?

Operator operator
#190

Yes.

Pranav Mehta analyst
#191

[Technical Difficulty]

Operator operator
#192

Yes. Pranav, I would request you to go to the network area and then call us back, please. We are not able to hear you at all now. We have the next question from the line of Harsh Shah from Dalal & Broacha Stock Broking Private Limited.

Harsh Shah analyst
#193

I have a couple of questions. Firstly, sir, what is the guidance for the acrylic surface for the next quarter? So can we do, say, around INR 10 crores to INR 15 crores?

Jagdish Gupta executive
#194

Yes. You see I mentioned that our network is increasing every month and when we -- almost INR 8 crores, INR 7.5 crores to INR 8 crores this quarter. So it will definitely double in this quarter.

Harsh Shah analyst
#195

Okay. And sorry, I think probably I missed one of the data points that you mentioned earlier. So what is the export volume of Q3 of last year?

Jagdish Gupta executive
#196

Q3?

Harsh Shah analyst
#197

Q3 of FY '22?

Jagdish Gupta executive
#198

Q3 last year.

Kishan Nagpal executive
#199

37 lakhs.

Jagdish Gupta executive
#200

Amount. You are talking about the value?

Harsh Shah analyst
#201

No, the volume data.

Kishan Nagpal executive
#202

Volume is 37 lakhs, sir.

Jagdish Gupta executive
#203

37 lakh. 3.7 million.

Harsh Shah analyst
#204

No. Sir, I want for one quarter, export volumes.

Jagdish Gupta executive
#205

It is export...

Kishan Nagpal executive
#206

Export quantity.

Jagdish Gupta executive
#207

It is export quantity.

Harsh Shah analyst
#208

It is export. Okay.

Kishan Nagpal executive
#209

For 9 months?

Jagdish Gupta executive
#210

For 9 months.

Harsh Shah analyst
#211

No. I want export volume data for 3 months, not the 9-month.

Kishan Nagpal executive
#212

Only for Q3?

Harsh Shah analyst
#213

Yes. For only Q3.

Kishan Nagpal executive
#214

13.17 lakhs.

Harsh Shah analyst
#215

Sorry?

Kishan Nagpal executive
#216

13.17 lakhs.

Harsh Shah analyst
#217

Okay. And sir, any color on why our receivable days are increasing? Is it that some -- so would that account for these lower -- difficult to get money in the domestic market, so the receivable days are higher in domestic market?

Jagdish Gupta executive
#218

No, no, it is higher right now as we are going for this acrylic. So we have to keep the stock in the [ C&FI ]. So there is -- domestically, yes, you are right.

Harsh Shah analyst
#219

Sir, domestic, the days are increasing.

Jagdish Gupta executive
#220

Yes.

Harsh Shah analyst
#221

And if you could have the data, what is the cash flow from operations for 9 months?

Kishan Nagpal executive
#222

Cash flow?

Harsh Shah analyst
#223

From operations for 9 months?

Kishan Nagpal executive
#224

I did not get your question properly.

Harsh Shah analyst
#225

The cash flow from operations for 9 months of FY '23?

Jagdish Gupta executive
#226

Cash flow.

Kishan Nagpal executive
#227

Cash flow INR 31 crore of net profit, [Foreign Language] INR 35 crore, INR 36 crore cash flow [Foreign Language].

Operator operator
#228

We have the next question from the line of Nikhil Gada from Abakkus Asset Managers LLP.

Nikhil Gada analyst
#229

Sir, just a couple of queries on the data front itself. Our employee expenses, if I see from 2Q to 3Q, we have seen a decent jump of around close to INR 2 crores. Has there been any -- and basically, the sales have not moved so much from 2Q to 3Q.

Jagdish Gupta executive
#230

No, no. The reason being, we are now expanding our different team formation, solid surface. For that reason, the result will come in the next 3, 4 months. That is the reason for the entry. Overall expenses, you will see is reduced.

Nikhil Gada analyst
#231

Understood, sir. So is this cost going to go up further or we have made most of our...

Jagdish Gupta executive
#232

No, no, no. We are already established. Now the sales will come. You will see, when you start something, you have to put and the result is not coming in a Monday.

Nikhil Gada analyst
#233

Correct, sir.

Jagdish Gupta executive
#234

This is the reason.

Nikhil Gada analyst
#235

Understood. And sir, secondly, just on the finance cost was not able to capture what you said as in -- if you can once again mention it, please, what was the reason for the jump in the finance cost?

Kishan Nagpal executive
#236

[Foreign Language]

Nikhil Gada analyst
#237

[Foreign Language]

Kishan Nagpal executive
#238

INR 3.20 crores.

Nikhil Gada analyst
#239

Okay. Sir, normal finance question [Foreign Language].

Jagdish Gupta executive
#240

[Foreign Language] Maybe now it is lost, but overall, but overall export market is very good for us.

Kishan Nagpal executive
#241

[Foreign Language]

Nikhil Gada analyst
#242

[Foreign Language]

Kishan Nagpal executive
#243

[Foreign Language]

Operator operator
#244

We have the next question from the line of Vinayak Mohta from Stallion Asset Managers.

Vinayak Mohta analyst
#245

Yes. Am I audible?

Operator operator
#246

Yes.

Vinayak Mohta analyst
#247

Congrats on a great set of numbers. I have 2, 3 questions. The first one was, in the value-added segment, but the value-added [Foreign Language] what share of revenue was it currently and what share was it like 2, 3 years back, pre-COVID times?

Jagdish Gupta executive
#248

Sorry, again, [Foreign Language] again for export market, right?

Vinayak Mohta analyst
#249

No, I'm saying the value-added products [Foreign Language]

Jagdish Gupta executive
#250

[Foreign Language] But we are hopeful, every quarter it is increasing.

Vinayak Mohta analyst
#251

[Foreign Language]

Jagdish Gupta executive
#252

[Foreign Language]

Vinayak Mohta analyst
#253

[Foreign Language]

Jagdish Gupta executive
#254

[Foreign Language]

Vinayak Mohta analyst
#255

[Foreign Language]

Jagdish Gupta executive
#256

Total revenue is nearly INR 2 million, INR 1 million is [ acrylic ]. Total revenue both machines INR 400 crores to INR 500 crores.

Vinayak Mohta analyst
#257

Understood. [Foreign Language]

Jagdish Gupta executive
#258

[Foreign Language] we are going for capacity -- [Foreign Language] And we are going for modernization and automation. So our capacity in laminate, we can go minimum INR 1,200 crores to INR 1,400 crores, again, depending on the valuation of the product.

Vinayak Mohta analyst
#259

Understood. [Foreign Language]

Jagdish Gupta executive
#260

[Foreign Language]

Vinayak Mohta analyst
#261

[Foreign Language]

Jagdish Gupta executive
#262

[Foreign Language] The way we are growing, you can see for the last 3 years, almost 50% increase every year. We will hope and we trust that it should continue and we will try our best.

Vinayak Mohta analyst
#263

Understood. Sir, last question, [Foreign Language]

Jagdish Gupta executive
#264

[Foreign Language] not only one parameter, there are so many parameters, it depends.

Operator operator
#265

Sir, before we move ahead on the management line, sir, there is a background noise. I mean, people are talking behind.

Jagdish Gupta executive
#266

Sorry?

Operator operator
#267

Sir, there is a background noise. People are talking.

Jagdish Gupta executive
#268

Okay. Somebody is in the room.

Operator operator
#269

The question is from the line of Karan Surana from Monarch AiF.

Karan Surana analyst
#270

I just wanted to ask, our operating cash generation for the 9 months. I think I missed that the last time the last participant ask that question. So what has been our OCF generation of operating cash generation for the 9 months? And sir, the follow-up would be what has been our debtor days as well as inventory days for the 9 months, sir?

Kishan Nagpal executive
#271

So working capital [Foreign Language] 96 days.

Karan Surana analyst
#272

Okay. [Foreign Language]

Kishan Nagpal executive
#273

[Foreign Language]

Karan Surana analyst
#274

[Foreign Language]

Kishan Nagpal executive
#275

[Foreign Language]

Operator operator
#276

We have the next question from the line of Resha Mehta from GreenEdge.

Resha Mehta analyst
#277

So I'm new to the company. So I just had one basic question. If I look at your 9 months quarterly run rate in terms of top line, that's INR 240 crores, which if I look at 9 months FY '22, that quarterly run rate then was around INR 170-odd crores. So just wanted to understand that structurally, what are the changes that have happened? So what I understand, obviously, the laminate segment has grown. But as a company, what are the initiatives that we have taken, let's say, in the export market or in the domestic market, which has led to this kind of revenue growth? So be in terms of adding new geographies, new customers and domestic market expanding our footprint, et cetera, if you could just elaborate on that?

Jagdish Gupta executive
#278

Yes. You see, first of all, our new plant which we started it from 2018 after that 2-year COVID plus, it is one of the second largest plant in the world after [indiscernible] in U.S.A. Any customer from overseas came to see, you can see our plant on YouTube. And you can understand. Second thing, we have a new machinery, new product, new changes. So of course, it will increase [Technical Difficulty] when there is a market, there is still in the -- where is the demand for -- we are very weak -- still weak in domestic market. International market is very big for [indiscernible]. So this is the reason -- everyone is growing. We are also growing in the same way.

Resha Mehta analyst
#279

Right. Right. So domestic market, if you could just elaborate that, was it that you were present in certain geographies and then over the last course of, let's say, the last 1, 1.5-odd years, you've put in a sales team or expanded your distribution in the domestic market? Anything of that sort?

Jagdish Gupta executive
#280

Yes, of course, for that reason last year we participated in IPL, now we are also planning again for advertisement and we're sure that -- before that 2 years back, we had no much capacity from our old plants. So we are more concentrated on export. Now we are going for both with domestic and export also.

Resha Mehta analyst
#281

Right. And on the export front, has there been any meaningful addition of, let's say, new geography?

Operator operator
#282

Sorry to interrupt Ms. Mehta, I would request you to please rejoin.

Jagdish Gupta executive
#283

Hello?

Resha Mehta analyst
#284

Yes. So on the export front, if you could please elaborate that whether you added any new geographies, new sizable...

Jagdish Gupta executive
#285

Last time also, somebody asking this question. We are almost -- where our laminates is required, we are [indiscernible]. Few countries here, new countries, we are searching, we are locating, our people are traveling. And their country, we are already exporting, then also our customer base is increasing there. So you can see the [indiscernible] this year also, figure will be more than 50% increase than last year.

Ashish Poddar analyst
#286

Resha, you may come back in the queue, please.

Operator operator
#287

We have the next question from the line of Rajat Setiya from iThoughtPMS.

Rajat Setiya analyst
#288

[Foreign Language]

Jagdish Gupta executive
#289

[Foreign Language]

Kishan Nagpal executive
#290

[Foreign Language]

Jagdish Gupta executive
#291

[ INR 50 crore to INR 65 crore ].

Rajat Setiya analyst
#292

[Foreign Language]

Kishan Nagpal executive
#293

[Foreign Language]

Rajat Setiya analyst
#294

[Foreign Language]

Jagdish Gupta executive
#295

Yes, yes, mostly for import. Small, small plans of [indiscernible], yes. And demand will increase, people awareness for this product will increase.

Rajat Setiya analyst
#296

[Foreign Language]

Jagdish Gupta executive
#297

[Foreign Language] they have their own offices.

Rajat Setiya analyst
#298

[Foreign Language]

Jagdish Gupta executive
#299

[Foreign Language] So prices are growing competitive and demand awareness is there. [Foreign Language] You go to any airport, you will see [Foreign Language] you will see this is available there.

Rajat Setiya analyst
#300

[Foreign Language]

Jagdish Gupta executive
#301

[Foreign Language] Here brand value is also still -- our brand value is increasing every day.

Rajat Setiya analyst
#302

[Foreign Language]

Jagdish Gupta executive
#303

[Foreign Language]

Operator operator
#304

We have the next question from the line of Pranav from Equirus Securities.

Pranav Mehta analyst
#305

Yes. Can you hear me now?

Jagdish Gupta executive
#306

[Foreign Language]

Pranav Mehta analyst
#307

Yes, sir. [Foreign Language]

Jagdish Gupta executive
#308

[Foreign Language]

Pranav Mehta analyst
#309

[Foreign Language] So by when we can expect some positive movement on this side? [Foreign Language]

Jagdish Gupta executive
#310

No, no. We have no much problem for debtors. So only we are facing a problem in domestic market. Every -- whenever the brand will establish in domestic market. So this period will be reduced. Hello?

Pranav Mehta analyst
#311

Okay. Yes, sir.

Jagdish Gupta executive
#312

[Foreign Language] go 30 days, even on fully advanced payment after some time, like in acrylic, we have no [ projects ]. 100% advance payment. So maybe then in laminates after few months, whenever brand will more established, then there will be reduction in the corrected period.

Pranav Mehta analyst
#313

Okay, sir. Okay. And sir, my next question was on raw material front. So chemical prices, [Foreign Language] paper prices are also coming down?

Jagdish Gupta executive
#314

It's coming down, but not in -- see just before this call, we had a Zoom meeting with our suppliers from Germany. We are asking them. We are still saying that this -- actually problem is from Ukraine and this war. Our [indiscernible] is from Europe. Energy crisis, we are reducing with government support, and German government is also supporting them. But we are sure it will reduce very soon.

Operator operator
#315

Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Ashish Poddar for closing comments.

Ashish Poddar analyst
#316

Before closing this call, I have a few questions. So sir, if you can give some guidance about the next year or the next few years volume growth in laminate, which you are foreseeing today in the domestic and exports market? And also, you have always talked about a big number for acrylic solid surface revenue of INR 300 crores to INR 400 crores. Do you still believe that it is achievable in the next 2, 3 years?

Jagdish Gupta executive
#317

Yes. It is definitely, the way we are moving, we are still very behind. People -- we are feeling -- sometimes we are feeling proud in the export market, new customers, we never expected that big company, big customers are coming to us thinking the metrics, yes, of course, I am not telling lie. It is gradually -- not increasing the way we're investing and the way we are growing in export. The acrylic in India and we are the first company to produce. And I heard that the government is also looking after anti-dumping duty on this product. So we are [ flooding ] in the market. That will also help us in terms of -- we are surely -- this quarter when we will meet after 3 months again, you will see the ways will be changing the sales figure and other parameters.

Ashish Poddar analyst
#318

Sure, sir. And one more thing, on the logistics issues you mentioned, have things still challenging or normalized?

Jagdish Gupta executive
#319

No, no. There is no challenge. You see, there are some countries where the [indiscernible]. There is some restrictions from the shipping company. Other -- everywhere you see, no problem in container availability, nothing.

Ashish Poddar analyst
#320

Okay. So you see that Q4, the current quarter will be a normal quarter for you?

Jagdish Gupta executive
#321

Yes. Better, normal and better.

Ashish Poddar analyst
#322

Okay. Thank you so much for answering all the questions of the participants, sir.

Jagdish Gupta executive
#323

Thanks to everyone. Thank you.

Ashish Poddar analyst
#324

Yes, we can close the call now. Thank you, everyone.

Kishan Nagpal executive
#325

Thank you.

Ashish Poddar analyst
#326

Thanks.

Operator operator
#327

Thank you. On behalf of Systematix Institutional Equities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

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