Analyzing...
That will include what?
Precise number will be told to you in the month of April.
Okay. And this will include all the PVC, CPVC and other value-added products as well?
All product segment what we are dealing in, in plastic piping system. And other product also.
All together as on today, this is a plan, but precise plan we will share with you in the month of April.
Understand. Okay. Also, sir, in terms of the industry. So, one thing that we are hearing about is that China has been lifted the export rebate that they were offering to their exporters. And from the understanding that we are seeing, the prices of PVC can increase going ahead. So, can you comment on that?
Already, the international offers which are coming to India are already high. As I told earlier, it has gone down up to $580 here in India. And now you cannot get any booking below $650. So, prices from the bottom level has gone up by $70 in last one and a half month. So, the trend has been reversed. Many producers because they were having too much loss, many capacities were running at low capacity and some plants were actually closed also. Demand supply balance is now started. People don't want to go and make it anymore if they are losing money.
Understood, sir. Thank you so much.
Thank you. Our next question comes from the line of Tejas Pradhan from Citigroup. Please go
Hi, sir. Most of my questions were already answered, but just as a continuation of the last query.
So, going forward, how much increase would you expect in domestic PVC prices? I know you mentioned $70 increase has already happened. Do you think this is the quantum of increase or further increase is also possible?
Dear friend, in such an uncertain atmosphere in the world, how can you forecast the price? We are incapable to forecast. We only know very well now that price erosion has been arrested. And price has started going up. Now, how much can go up? Very difficult to say. You can't forecast nowadays. In such an uncertainty, so many wars taking place, so many locations. So, much
Page 11 of 18 uncertainty. We are going through first of all, VUCA, volatility, uncertainty, complexity. Such a business atmosphere. But we know that all the polymer producers, not only PVC, other polymer producers also, some people closed their plant permanently. Some people temporarily closed. Some people put their plant for maintenance shutdown. Some people are running at low capacity because they are all losing money. And you can't forecast about crude price. Today, crude is around 60 to 64. Suppose, crude price goes down to $40, nobody knows what can happen to crude price. If that happens, then polymer price will go down for sure. If crude price can go down to $40, which happened in 2008, who can forecast nowadays? Very difficult to forecast.
In such a complex world economy, you can't forecast.
Sir, no problem.
Thank you. Our next question comes from the line of Vipul Kumar Shah from Sumangal Investments. Please go ahead.
Hello. So, is it possible to share CPVC volume for this quarter and 9 months? In 9 months, we have grown by 30%.
You would not like to share the absolute volume? Very classified information. Okay. Thank you, sir.
Thank you. Our next question comes from the line of Ronak Ostwal from Arihant Capital Market Ltd. Please go ahead.
Thank you for taking my question. Can you tell us how the industrial product segment is doing?
Because it was facing challenges, especially from the discretionary side. And also, on the rural side, how the demand activity is there right now?
Our industrial segment consists of three segments, three product divisions. Industrial component, material handling and cylinder. Material handling and cylinder are enjoying a moderate growth.
We are getting good business of material handling products. And also in the composite cylinder.
But the supply of component to automotive or to appliance sector, automotive sector is still doing better and encouraging. But the appliance sector is in turbulence time, you can say.
Whether it is the appliances or washing machine or the refrigerator or air conditioner, cooler or something. So, that industry, the models to which we are supplying the component, if they are doing fair or better, we are also in better shape. Which is not the case in the current year.
Industrial component to appliance sector is tough time and seeing a degrowth compared to previous year.
Page 12 of 18 Okay. Thank you, sir. On the rural side, how the demand is there right now, especially on the price segment?
Demand is quite okay. Rural side we are catering to our tarpaulin and our plastic pipe system. And demand is quite okay. Thank you, sir.
Thank you. Our next question comes from the line of Priyanka from Value Prolific. Please go So, I guess the Supreme Industries is growing so rapidly and have an ambitious plan for future.
I just wanted to get the understanding about the succession planning to ensure the stability that the Company will have in future also? They will do better than us. Can you please elaborate on that?
Our two grandsons are also now involved in the business. And we are confident that they will do better than us.
Okay. Thank you. Thank you for your time.
Thank you. Our next question comes from the line of Udit Gajiwala from YES Securities. Please
Hi, sir. Firstly, congratulations on great set of volume growth for the quarter. And I just wanted one follow up. In the start of the year, you were mentioning that you were looking at a 12,000 crores topline for ‘FY26. Like we agree that you have maintained your volume growth guidance.
Would you throw some light on this number if you have revised that downwards?
Even the topline, you see, polymer prices, they are coming down. So, instead of 12,000 crores, now we are maintaining 11,000 crores to 11,500 crores.
Topline will definitely go down when the polymer price falls down between 12% to 20%. Topline is bound to go down.
Sir. I completely agree. I just wanted to derive some sense. That's helpful, sir. Thank you.
Thank you. Our next question comes from the line of Shaleen Kumar from UBS India. Please
Page 13 of 18 I just want to understand, today's PVC price is still below last quarter average PVC price. And I hear you saying that demand is coming back, but your last quarter volume was also pretty solid.
So, I just want to be sure, how are we certain of 200 basis point to 300 basis point margin improvement that we are looking in the 4th Quarter? So, what are the levers we have for that? I don't follow. What is the question?
Sir, we are looking at like the margin guidance for the next quarter.
We expect a better volume that will reduce some manufacturing cost.
And the erosion partly due to the falling price is being arrested. It's being arrested now. So, there won't be any inventory losses.
Okay. So, is it possible to quantify what kind of inventory losses we had in 3rd Quarter?
So, for the overall 9-months, I think the figures have been given between 100 crores to 120 crores. You see the prices are so falling continuously, it's really difficult to quantify on a month- to-month, quarter-to-quarter basis. That's why we have estimated for a period of 9-months, what is the impact.
Fair enough, sir. If you put them equally, that basically explains probably 100 basis points to 150 basis points margin compression. For nine months, it is. Yes. Right.
So, that's something which we believe that we can gain back if the price remains stable.
Correct. The 4th Quarter, we don't envisage any margin loss on the account of the inventory losses. And going forward, you don't know. Predicting any price movement is very difficult.
We believe that there is no price erosion now. Because this is the seasons time now.
But is the price enough for you to improve the margin from here?
Prices are always passed upon. So, there is no issue in the margin. But once whatever inventory you are carrying, if the value is getting eroded, then you are selling at a lower price, lower margin.
Fair enough, sir. Alright. That's it for my side. Thank you so much.
Thank you. Our next question comes from the line of Arun Baid from ICICI Securities. Please
Page 14 of 18 Hi, sir. My question was, we have a capacity of 1 billion tons of pipe by the end of this financial year. So, when do you expect it to be utilized fully? By which year?
Normally, if we utilize 70%, we should be happy. So, we should expect that we should be able to sell 70% capacity next year.
And the second thing is, with regard to assuming there are no more PVC price cuts, which is not expected. So, will we bring it back to a historical range of 15%-16% margins, assuming there are no more price fluctuations, PVC on the downward trend at least? 15%-16% margin, I don't recall. 14% and up to 15% is the normal margin, normal scenario.
So, operating average will play out, because our volumes will go up. So, still you are expecting around 15%?
We will decide and we will talk to you in the month of April for next year, please.
No, sir. I am not talking next year. I am just saying assuming PVC doesn’t correct from here anymore and you have the volume growth which we expect to come through, will we be doing 15%-16% margin in that case?
Yes, for the quarter, yes. Because of the higher volume, our manufacturing cost, our administrative cost gets spread around the larger volume. And that's how for the year we are targeting 13.5% to 14% margin.
So, actually my question was for a longer term, not for the quarter.
That's why I am saying for longer term perspective in the normal scenario, it is 14.5% to 15% is the operating margin we expect. Now depending on the new product launch, depending on the product mix, definitely we are trying to improve it further. Whether it's a quarter percent, half percent, it all depends upon the plan of the new product launches and success.
We are happy to say that every quarter we are increasing the share of value-added product.
Yes, sir. Exactly, sir. That's why I was trying to say that things are looking better. Thank you. Okay, thank you.
Thank you. Our next question comes from the line of Sanil Jain from Ambit Capital. Please go
Page 15 of 18 Hi, sir. Thanks for the opportunity. So, I have two questions. So, I just wanted to know what is the current capacity of PP silent pipes and what is the pricing on that?
Capacity is 3,000 tons per annum. Okay. And pricing depends on the various factors. There are hundreds of products in the system. So, every product has a different price. Price is a very elaborate word actually. But it is a premium product.
Understood. And second, on the OPVC segment, what is the expected capacity planned and what is the CAPEX outlay for the same?
Currently we have got already capacity to produce around 8,000 tons annually. Okay.
Currently, and it is not utilized fully. Buying from government department, central government is very slow for water supply. But we believe that demand will start picking up now. We are getting many inquiries now onward. So, we hope that we will be able to sell a good portion of the capacity next year.
But we are not looking to like add capacity on it?
Once this capacity is sold out, then we definitely will add.
Okay. Understood. Thanks. That is all from my side.
Thank you. Our next question comes from the line of Yogesh Mittal, an Individual Investor.
Sir, thank you for the opportunity. Sir, so I just wanted to know if it is possible to throw some light on PVC pipes versus the metal pipes like the GI pipes and cast-iron pipes. How does the interplay happen for the demand when the prices changes in between them? And how is the demand in terms of like what is the market? What is the general market trend in terms GI pipe versus the PVC pipe?
The application where PVC pipe is used, metal is no substitute. PVC pipe has no substitute like metal. Metal is very expensive, too much weight, too short life. PVC good pipe has got very good life. Right, sir.
Earlier cast iron pipes are being replaced by PVC and at most of the places they are replaced.
Cast iron pipes you don't see much in use now in India.
Right, sir. So, thank you for your answer, sir. Thank you.
Page 16 of 18 Thank you. Our next question comes from the line of Shailly Jain from Dolat Capital. Please go Hello, sir. Thank you for the opportunity. Sir, most of the questions are being answered. I just wanted to have an idea about what is the gross debt and cash number for us in 9 months ,at the end of 9-months? As of 31st December? Yes. The net debt is 132 crores. And gross debt?
No, this is the total debt. What I am saying is, net debt is the net of the surplus balance available. Net of, yes. 132 crores.
Okay. And, sir, it would be great if you could just provide us with the data inventory and payable number., working capital?
Inventory, you can say it is 1,900 crores. Receivables about 568 crores and payable about 1,100 crores, whole put together, all liabilities.
Okay. Understood, sir. Sir, as we have indicated that our finance costs will go down, so how are we looking at our debt in FY’27?
No. We want to remain debt-free. That is our commitment.
We will be debt-free 1st April itself on 31st March only. Okay, this year?
We will have a good amount of cash surplus in our books on 31st March 2026.
Okay. And, sir, what would be our CAPEX number for FY’27? April we will discuss. Okay. Sure, sir. Thank you so much.
Page 17 of 18 Thank you. Our next question comes from the line of Varun Jalsaria from 360 ONE Capital.
Hi, sir. Thank you for the opportunity. Sir, just wanted to have some sense on the packaging product division. Like, how is it progressing? What is the demand like for that segment? Packaging segment?
Protective packaging is growing by 10% in volume. And margins are quite good, double digits.
So, this is for the full year, you are saying?
For the quarter also, for the full year also.
Okay. So, the demand is good there. I mean, that is not a problem, right?
Demand is good. We are offering many customized solutions. Fabricated products.
And secondly, sir, on the PVC window business, could you give us an idea, like, how is it progressing? Any, in terms of value, volume and that's part of the piping division, right? If I am not wrong.
As of today, it's a separate division, we are supplying in the next Month. And, we will be selling windows only, no profile. We anticipate we may be able to produce around 250,000 windows every year. It will take some time to sell the capacity. And when the capacity is sold, we have plans to go on expanding.
Sir, what will be the revenue potential from this business? In excess of 300 crores, full capacity. And currently, how much are we doing?
We will start sales from next month only.
Okay. So, as of now, it's not contributing any revenue? Nothing.
And, so, the non-pipe segment, only packaging, you're expecting a growth. And for industrial, you don't expect any growth for this quarter, or maybe for next year as well?
We expect growth in material handling. We expect growth in furniture. We expect growth in productive packaging. Every segment, we are expecting growth, except industrial component business.
Page 18 of 18 Okay, sir. Thank you, sir. And any capacity expansion that we are taking in packaging, that was planned for this year? We are planning, next year. Okay, sir. Thank you.
Thank you. I would now like to hand the conference over to management for closing comments.
We are thankful to all the analysts who raised the question. We were impressed by the very analytical question raised by them. We thank all of them for the time taken to ask several questions to clarify. Myself and my colleagues thank all of them. Thank you.
On behalf of DAM Capital Advisors Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you very much.