Astral Limited (ASTRAL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q4 FY '21 Earnings Conference Call of Astral Limited hosted by Edelweiss Broking Limited. [Operator Instructions] Please note, that this conference is being recorded. I now hand the conference over to Mr. Praveen Sahay from Edelweiss Broking Limited. Thank you, and over to you, sir.

Thank you, Ayesha. Hello, everyone. Thank you for joining to the earning call of Astral Limited. On behalf of Edelweiss, I would like to welcome management team of Astral Limited to discuss the results and outlook post Q4 FY '21 earnings. I have with us from the management, Mr. Sandeep Engineer, Managing Director of the company; and Mr. Hiranand Savlani, Chief Financial Officer. Firstly, I would like to congratulate management for a very strong performance in the quarter. I now request Mr. Engineer for his opening remarks, post which we can open the floor for question and answer. Over to you, sir.

Hello, everyone, and thanks for joining this Q4 and annual numbers call. Unfortunately, from last 2 years, we are unable to come down to Mumbai and meet you in person and have a conference to interact with you closely and share the year's earnings results and what else is being done due to the ongoing pandemic. I hope that you and your family are safe in this difficult time and taking care of everyone in your family against the pandemic. The world has passed through a very difficult time from last 1 -- for a year. And India is not an option out of it. India has passed a difficult time and now is passing a more difficult time and a more challenging time. And everyone has to take care of themselves. We have to take care of the recoveries, if they are affected by the pandemic, and the globe has to do the same. And I think everyone is taking care of each other as well as the society and following the strict guidelines given by the government. I want to thank all our team members for delivering a lifetime high result in this difficult time. At the same time, I want to thank all our key investors who have stood by us in putting confidence in the management in this difficult time also. You all know that we have more challenges with each day with the pandemic still continuing, a lot of challenges coming our way due to the pandemic, as well as the vaccination program also will take its own time. For Astral, myself, I'm not taking care of my own family, but I've been taking care of the Astral family as a whole and the families of my country, which is very near and dear to me. And whatever we can do in this difficult time, we are doing the contribution to the society. We have done our level best to get our staff members vaccinated at the office, at the factory. At the office, we are -- almost 80% to 90% office has been vaccinated. At the factory, mostly 50%-plus people have been vaccinated. So we have taken a very vigorous vaccination drive and the same drive still continues at our plants and at the factory level. For the CSR and what has to be done for the society, we have done our best to help many hospitals with equipment, biotech equipment, the oxygen concentrators and many other medicines as well as we have ensured that all our staff members who has been affected by pandemic should be given the best treatment not only to them but their family members and their children. And not a single rupee should be spent from their own pocket to get them recovered. But still, unfortunately, we lost a few people in the organization whom I will remember lifelong. And to take care of their families and their children, we have declared to give them their running salaries, a cost to the company, for 2 years and education to their children until they reach the college. This is what we have been doing for the -- our own people, and we'll keep doing the best for them and their families and spouses and, if there are ladies, for their husbands. We, as Astral, have come forth to put 2 oxygen plants at our Santej location. Two oxygen plants of 30-meter cube. I don't know exactly what is the number we tested [ or what is its shelf life ]. It will be [ coming ] this week and will be operational by next week. And we can daily fill 250 oxygen cylinders, which are used in these hospitals and, in a nutshell, taking care of 250 to 300 individuals for their need for oxygen. So a lot of these initiatives and a lot of these initiatives have been done and a lot of these initiatives are being continued. We are continuing to do so to help our society and help our country in this difficult time. Coming to the business part, let me first step into the pipe business. The performance, the numbers of the business will be obviously discussed by Hiranand Savlani, the Chief Financial Officer. And our family member, I can say very proudly. But to first brief you, there have been balancing expansion plans going on at every factory. Santej, we did atomization on many levels. We increased the -- certain capacities of higher range of fitting by getting new moulds. And we put up a facility to make water tanks. The water tank facility at Santej is operational and that is the #2 facility after the Aurangabad facility, which we acquired a few months back. And we have started rolling out the sales of the plastic tank, Astral tank, on the Santej location. We will be starting our pipe -- our tank manufacturing at the Ghiloth plant in Rajasthan shortly and then followed by the tank manufacturing at the Hosur plant in South also shortly within the next span of 3 to 4 months maximum. These will be 2 more facilities added to the 2 existing facilities at Aurangabad and Santej. The construction work of the valve manufacturing is being completed at Dholka. We have started basic range of valve both in plumbing as well as in industry. And with each passing month, there will be new moulds and new additions happening in this facility. We would also proudly say that we will be the first Indian company making its own compound for fire sprinkler, Fire Pro. And our compound and pipe will be the first product indigenously made approved by NSF -- not NSF, UL. UL is the highest approval for fire extinguisher pipes other than FM and LPCB. Those approvals are also underway. So we will be having all the international approvals, but we are now approved by UL. So we are in line with the products made globally and in the developed countries and have the approval of UL other than the ISI approval of India. At Santej, we worked for almost 2 years to revamp the technology of CPVC/aluminum/CPVC pipe. And we just launched that product a few days back and call it MultiPro. In past, we were making this product. But due to reasons, we had to stop the production. We worked on the advanced technology. We worked on improvement in technology. We worked on the improvement of the product for almost 2 years. And with all things in line, we have launched this product a few days back. And it is an excellent market because this technology globally is, at present, only with Astral and manufactured by only Astral. Globally, we are the first and only manufacturer of CPVC composite pipe. And it has extensive use, extensive market, extensive application. And the good part of our technology is the cost effectiveness of the product is much, much better than what we used to manufacture in the past. So we have made the product more cost effective to expand its usage in the plumbing as well as lot of other applications. So this product is proved from Santej. In the plants at Aurangabad and Sangli, our PVC CPVC machines are there, and we have started manufacturing PVC, agri and SWR pipes from Sangli. Shortly, we will be starting manufacturing of CPVC, PVC, agri and SWR pipe from Aurangabad. In next Q2, this will be operational. Sangli PVC is already operational. The Bhubaneswar work is in full swing. The project should be completed in September '21, and the production will be rolled out in October '21. This is a state-of-the-art plant design to go up to 60,000 metric tons. The first phase will be 20,000 metric tons. The Bhubaneswar will be operational in -- before this year-end. And all the plants at -- plants in Maharashtra will be making CPVC, PVC, SWR, agri to cater the Maharashtra market as well as the Central India market with cost effectiveness. There are value-add expansions going on. There are certain value-add expansions, product developments going on. Certain products are developed, but COVID is delaying us, in some way or the other, for the launching of these products. And we will be launching another new product line in Q1 or Q2 in the piping business. And our team has been continuously working on these developments and launching of new products. And we, at our level, at management level are also continuously involved in developing new technologies and seeking new opportunities in the market for the infrastructure business. So overall pipe has -- the results are there. There is growth. There is -- all these challenges, we have done our best. And again, I congratulate the team and a lot of initiatives to go ahead are underway. And we are also working on setting up our own R&D facilities and technology, transfer facilities as well as training facilities at Santej. And this should be through in next 1, 1.5 years, if we are not more delayed by the COVID. Coming to the adhesive business. Resinova, as we had always told, there were a lot of challenges 1, 1.5 years back, as you all know. We overcame the challenges. We, again, complete a -- completed our task of revamping things, and we kept on appraising you all. And we always kept you in the loop. And last few quarters, I've been telling you that things are in line, and you will see the numbers will reflect. And obviously, the numbers are reflecting. Resinova's performance was excellent. And at this difficult time, the results are in front of you. And we have almost grown at 93% in Q4 year-on-year basis. The highest in the history of Resinova. And I am confident that going forward, we'll keep this performance, we'll keep this run rate and we'll keep sharing you new developments in Resinova. A lot of new developments are taking place in Resinova. A lot of new product addition is taking place in Resinova in the construction chemical business, in the goods segment, in the maintenance segment, and we are also getting into a lot of other industries. The R&D facility at Resinova is under expansion. We are doubling the facility. And it will be operational in the next 2 to 3 months. The work is almost under the completion of the R&D facility. The plants are -- whatever the balance equipment or whatever the safety aspect, things have to be done, are continuously done at these 3 plants, 2 at Kanpur and 1 at Ahmedabad. We have kick-started initial work at Dahej, and it would be phase-wise. Many plants -- we'll be making the plant in phased manner. And it will take at least 1, 1.5 years to add a state-of-art plant at Dahej for certain chemistries and with the state-of-art safety and atomization. So that work has started. We have entrusted the work to one of the best consulting firms of India who has designed many chemical plants. And the work has just started in a phased manner. And with health pandemic, it allows us to speed up the thing. Accordingly, the work will go on at Dahej plant for Resinova. The business outlook is excellent in adhesive, and we are very positive for this business. And we are very positive about the growth and the future of the adhesive business in the Astral family. We have launched a series of new products in Resinova. We have launched new Solvobond premium range, Resiwood Edge and Zesta-D3. We have launched [ TU Provid APC ]. Then we have [ Boral ] in all the rubber adhesives. We have [ crack ] pillars, we have [ Monset ]. We have many, many chemistries where we were not present or we were just -- we need to -- where we needed to upgrade or where we need to have the better technology as we have done the same and have done the -- and then released products to the market from Resinova's stable. We're also working for a few new chemistries with U.K. as our company in R&D centers as well as the R&D center in Ahmedabad. And we will be also adding few products in coming quarters. And we'll keep you updated on this as we move forward in the new product category. Now coming to the Seal IT U.K. and U.S. business. U.K., as everyone knows, is almost out of pandemic and now it has declared -- the first country to declare COVID as a disease not a pandemic. And the growth trajectory now would be even better than what we have done. But in this challenging time of COVID, U.K., which is a country with lot of challenge of growth, it is developed country, but the Seal IT has given a 16% plus growth, an excellent growth, remarkable growth, and a remarkable double-digit EBITDA has been driven by the Seal IT though the raw material was under inflation. The U.S. product is doing very good. It is -- on itself, it is making profits. It is growing, especially the RescueTape business is growing excellently well, but we launched a few products for roof sealing hybrid products from U.K. which are made in U.K., in U.S. market, and the response is enormous. We are exporting containers' worth of products to U.S. We have been afforded by the big Home Depots and many other such stores, and we have been placing our products one by one in these stores. And the roof sealing hybrid products are exported from U.K. to U.S., and we are getting a good chunk of business there. And in future, if the same level of business continues, we may plan to make some more product lines in U.S., which are made in U.K. to cater the markets and to have a bigger growth in the U.S. market. Overall, Astral, as a family in this time of pandemic, has done its best to take care of the business, to take care of the growth, to take care of the profit, to take on the people and its investors. And we'll continue to do so in the coming years, coming months, and we are still working at our highest peak and highest level even in the month of April. And even this month also, we are working whatever the best we can to give growth and cater to the market and take care of the society. So with this, I thank you all. And we'll answer more -- many of your questions about your -- any of the things you want to know more about the business and other aspects. And then I pass on the mic to Hiranand Savlani to continue his interest with all of you. Thank you, everyone.

Good afternoon, everyone. Thanks for joining this con call. And hope you all are safe, and we wish that we all come out quickly from this pandemic and move to our regular activities. And we take our country to the fast vaccination drive so that we can be coming out much faster way. We are thankful to Astral team which has supported us for this. And particularly to the HR team, which has taken care of vaccination work. And that is why we all seniors are safe. And we all are double vaccinated now. And we wish that whatever the left-out portion of the team members are there, HR is sincerely taking care of all of them. And shortly, they will also be getting vaccinated, and we all will be coming out from this pandemic. Now this press release is with you, so I will not take much number because we have already taken a sizable time, so I will try to give more time to the Q&A session. But I will highlight a few things which -- they have taken place in this quarter and going forward, what is our plan and what is our growth strategy. So a few of the points I will highlight and then we'll move to the Q&A session. So this quarter was one of the excellent quarters in the history of Astral, in which probably we have grown the size of the business in the piping, which deliver us close to about 80% top line growth on quarter-on-quarter basis. It is a mix of a little lower base also last year, definitely some advantage of you can say -- a greater advantage I can say is because of the polymer price. And particularly, the general demand was also robust in this quarter, and that is why it is not only the top line growth but in the volume terms also, we have grown close to about 36%. So in all respect, this quarter was excellent and we were running shortages in many of the items. And we were of the view that if this run rate will continue in the coming quarter, it will be very, very robust to us because a lot of shift is taking place from unorganized to organized side. But unfortunately, the second wave has come so a little bit activities that get -- got slow, but we are quite confident a bit that as this country will reopen, we will maintain a higher growth run rate in the coming quarters also. Getting to the adhesive side. Adhesive was also one of the best quarters, as Sandeep bhai said, in the history of the Resinova and the Seal IT. Both have delivered excellent number, and that is why you can see that the revenue growth of the last quarter was 73%. And perhaps the base effect of U.K. was not problematic, but yes, definitely Resinova is -- was low, but that is also, to some extent, supported. But 73% kind of growth is unbelievable kind of growth our team has achieved. Not only the growth of 73%, but our EBITDA growth was 150%, which is very, very remarkable. And that gives us the confidence what we have communicated earlier to you guys that ultimately, the goal of Astral is to take this adhesive business to 16%-plus EBITDA growth percentage level at which we are already going towards that journey. And we are quite confident that in the next 3 years' time, we will be a 16%-plus EBITDA company into the adhesive and the sealant business also. On a consolidated basis, similar, because both the businesses have equally delivered the good numbers. Because of that, the revenue growth was 79% on a Y-on-Y basis. And on a full year basis also, we delivered on a consol basis 23% top line growth. And EBITDA was doubled in the top line growth. Top line was 23%, EBITDA growth was 46% and equally, the strong PBT number of 74%. So in a nutshell, the numbers were very robust and the economy was growing at a very, very rapid phase and the kind of growth we were getting was tremendous. And we are of the view that underlying current is still very strong in the economy and the housing sector is performing very well. And you can see the housing sales number also that India normally do around 65,000 units quarterly run rate, which we have already crossed in the last quarter. India has sold 69,000 units of housing in the particularly top 9 cities. The market demand in the pipe segment was robust from September onwards. And that moment still continued until last quarter. Even April was comparatively good. Volume growth was at single digit, but top line growth was 50% compared to FY '19 because FY '20 number will be the misleading number. So that's why we have given in the press release also comparison with FY '19. Similarly, in the adhesive business also demand was excellent from July onwards. And it continues throughout the last quarter and equally good number we see in the April also. The best part we've seen in the adhesive was both India operation as well as U.K. operation did excellent work in Q4. And we are confident that going forward also, this momentum will continue post this small hiccup, which has come from the second wave. There was a huge pressure of raw material inflation in both the businesses, in adhesive as well as in pipe business. But pipe we were able to pass on quickly, while adhesive we pass on with a lag effect. And that is why a slight drop is there into our GP margin in adhesive business. But otherwise, in the pipe business, we are maintaining our GP margin also. And all these numbers will be uploaded on the stock exchanges website because we have prepared a very nice beautiful presentation. But unfortunately, yesterday, there was a cyclone effect in Ahmedabad. So many part of the city was disconnected from WiFi and mobile connectivity and the lights were not there. So our team was not able to complete that presentation. But I'm sure that my team will be able to complete today. And by late evening, maybe 8:00 to 9:00, we will be uploading that presentation for final touch to be given by me because I was throughout the day and was busy with the media and the con calls from the fund managers and analyst community. So we were not able to finish. But I'm promising you that you will be getting this presentation from our side by late evening by 8:00 to 9:00. As communicated earlier that the growth side in the coming time, like 3 to 5 years, will be very, very robust. And we are standby to better and the margin will also be much, much better. Normal margin in the pipe industry, you know 15% to 16% kind of sustainable margin, but now consistently last 6 to 8 quarters, Astral is delivering much, much higher margin than the normal margins of 15% kind of rate. So now we are of the view that this higher run rate will be a little bit inch up in the coming times also. Though there may be a pressure on the downward side on the PVC side but, at the same time, a good part is that, that the CPVC prices have started inching up now. And across the industry, everybody has taken the price rise between 5% to 8%. So the Astral has taken the price rise in the CPVC. So that will support the downfall of the PVC price. And Astral, you all know, that it's generating the maximum revenue from the CPVC side. Infra business saw a good pickup in the Q4 and the numbers were encouraging. So we are of the view that the way government has promised to spend sizable money into the infra side, if that is the run rate it will continue during the coming year, I think in the coming quarter, infra business should do better for us. Numbers are with you. So you all know that Astral is sitting with a very, very handsome cash on hand that is close to about INR 476 crores, even at a net level also after deducting the debt also, we are sitting on a net basis a cash of INR 409 crores. So robust cash flow is coming to us. And we are expecting in another couple of years, we will be crossing more than INR 1,000 crores cash flow. During the year, company has done a CapEx of INR 167 crores and which include the acquisition of this tank business where we spent close to about INR 45 crores, INR 50 crores. And we have added a capacity of 19,000 metric ton plus. Balance sheet quality, as you know, we are continuously communicating in every communication, every con call that Astral is very, very serious about the quality of the balance sheet. And we have demonstrated in this quarter also that you can see that in this quarter also, in spite of so much challenges were there, we did a handsome growth of 78%, 79%; on a full year basis, 23%, 24%. But still, we have maintained our working capital cycle, not only we have maintained but we have reduced our working capital cycle. You can see the inventory days, which has come down from 77 to 54 days. And our working capital cycle on a consol basis has come down from 41 to 27. So our working capital has also given us the additional operating cash flow for us. As far as this opportunity in which Astral is there, we are into right now into 4 segments, that is the pipe, infra, adhesive and the tank. Pipe opportunity in India is roughly about INR 33,000 crores -- INR 32,000 crore to INR 33,000 crores; infra is close to about more INR 1,000 crore opportunity; adhesive in India, roughly about INR 15,000 crore opportunity and INR 14,000 crore opportunity in U.K.; and tank business is roughly about INR 5,000 crore opportunity. So all put together, Astral is right now working in an area where the market opportunity is roughly about INR 67,000 crores. No need to write this number because everything -- these numbers are already there in the presentation, which you will get post con call. So pipe, we are roughly about 7% to 7.5% of the market share. Adhesive India, we have a hardly 3% to 4% market share. In U.K., we have close to about 2% kind of market share. And tank, we are just about to begin our journey. So huge, huge, I can say, potential is that in the coming next 5 to 10 years for the growth. And we are expecting, if we work hard, we can double the size of our top line in next 5 years' time. At the same time, we are working on the new product also. And you will find the list of the new products which we have launched in the -- each and every category of Astral. Sandeep bhai has already discussed about this MultiPro. Then we have launched a water tank also in the adhesives. Every category, we have launched a new product with advanced technology and the advanced chemistry. Whether it is a construction chemical, PVA, you can say the epoxy side, even a solvent cement also, we have launched premium categories of solvent cement into the adhesive basket. And we will continue this kind of launching in the coming quarter because a sizable, I think, product range is there in the pipeline, which our R&D team is working and Sandeep bhai is spending more money into the R&D side. And we have put up a very, very state-of-art building of R&D into the Resinova and unfortunately, this is not a good time to invite all of you. But I will wish that the moment these things will settle down, we will invite all of you to visit our facility and see the kind of R&D facility we have put up in Ahmedabad. We are also open for the growth, whether it is inorganic or organic, because now the sizable cash is there and the sizable cash flow is expected in the coming time. So we are always ready for the both side, organic as well as inorganic side. And -- but our criteria will remain same, and we will maintain that discipline that any business, which will not going to give us 20% ROCE, we will not look into that kind of businesses. And we will be looking only profitable businesses and businesses which can leverage our brand Astral as well as it can leverage our distribution network of dealer and distributor, which is a huge, huge network, more than 33,000 kind of dealers in pipe business and more than 130,000 dealers into the adhesive basket. So we have a very, very huge family. If they can sell products, we are ready to bring that product into our basket. And we will keep continuously introducing this type of product. Now coming to the pipe side, again, as you know that the shift from unorganized to organized side is getting momentum. And we are of the view the second wave will be further getting into more accelerated way. And still, we all know that 35% kind of -- 30% to 35% is unorganized space into the piping sector. So this is going to be a good, good driver for the growth for Astral. Secondly, we already communicated that Astral is moving from the human approach to the systemic approach concept. And that is why we are strengthening our system at the office level as well as at the market level. And this Astral loyalty program is getting momentum in the market. You'll be surprised to note that now every month, we are getting sizable new plumbers getting into that program and many new dealers are getting -- joined into this program. And in this pandemic time, we have supported every plumber brothers and our dealers by way of transfer of their money into the Paytm account so that they can get in this difficult time. So they need not to worry about their -- whatever their points are there. They can immediately convert and we can transfer the money to their Paytm account. And we would sizably transfer that money during this pandemic time also. As communicated by Sandeep bhai, east plant is gearing up. And hopefully, we are targeting to be ready by September, so October onwards, the delivery will start in the market. And as you know that our competitors are very, very strong into the size of the geography. But our stake is very low into that. So we are expecting that the moment our plant will be ready, we will be saving a huge amount of logistic costs, which will help us to strengthen our geographical reach into the Eastern market. And we will be delivering a good number in the coming times over there. Same way, government projects, you know that the kind of amount government has communicated in the budget and the various forums, whether it is Jal se Nal (sic) [ Nal se Jal ], whether it's affordable housing, whether it is an infrastructure project, they all will keep supporting the Astral product. And we are quite confident that Astral will also participate in these kind of not directly by bidding process but definitely, we will be supporting our dealers and distributor community to support it at local level, panchayat level or maybe a municipality level, wherever the projects require these kind of products. You all know that with every growth, we are always believing in decentralizing ourselves and derisking ourselves. So as a part of that, we are continuously going to derisk our business. So this year, we are adding the 3 locations of pipe: that is in Sangli, we are adding the pipe; as well as Aurangabad; and this Hosur -- sorry, Bhubaneswar. That is -- these 3 new locations in the pipe is going to be added in the current year. Similarly, as communicated earlier also, I'm repeating again that Astral's continuous focus will be there to the value-added products. And we will continue to add the value-added product in our basket. And valve product is a little bit delayed, but many valves have already started production in our existing plant. But the new building is almost on the verge of completion. And then the new machines and all will -- and mould will -- are on the way. So hopefully, we are targeting that the Q2 new buildings will start producing the varieties of valve, and that will be rolled out from the Q3 in the market. Adhesives and sealants side also, growth is there continuously, and we are expecting that this moment will continue, and this will be further supported by the new product launch, which we have recently done and new additional products, which is shortly going to be launched in the coming time. And the U.S., as Sandeep bhai has already discussed, will be a good, good growth driver for our overseas operation. If that product will click, the numbers will be really fantastic for us. So right now, we will export maybe 15, 20 containers. And they have given a good support to us. And now we are thinking to retake over there that product exporting from U.K. And with the further growth, we are going to start producing at the U.S. plant itself. Plastic storage tank, I think, a little delayed in this project. But now we are ready with the 2 plants, Aurangabad and -- because acquisition side also, there were some delays because you know this is the pandemic time, so some paper formalities and that takes always time. So we have completed the complete acquisition process in the month of March. And now we are ready and we have begun to take the challenge of the market. And now we will be pushing our product into the market. And similarly, Ahmedabad plant will also support [ Gujarat ]. Ahmedabad is ready with the tank. And shortly, the 2 new locations will be added, that is Ghiloth and the subsequently, Hosur. And in the last, we are going to add that into the -- our Eastern plant. With this, I want to conclude my initial remarks and open the floor for the Q&A session. Thank you very much.

[Operator Instructions] The first question is from the line of Nitin Jain from Fairview Investment Advisers.

Yes. And first of all, congratulations on the excellent set of numbers. So I have 2 questions related to the adhesive segment. So in this quarter, the market leader has seen their margins drop sharply due to raw material inflation. But we have managed to improve our margins quarter-on-quarter and year-on-year. So is there any particular reason for this outperformance? And related to -- and the other question is the waterproofing market, like, the market leader is seeing it is as the next leg of growth. So how are we present there? Because every quarter, we see paint companies gaining market share and the market leader also gaining market share. So how aggressive are we here?

So I think I agree with your understanding that there was a huge pressure on the raw material side. And the same thing was with us. In initial remarks also, I communicated that there was some pressure on the GP level. But because we did about 73% top line growth, so because of economy of scale, we were able to improve our margin, not only the reduction in the margin but there is an improvement into the margin. So basically, economy of scale has supported us in this difficult time. And at the same time, with lag effect, we have passed on to the market. And tank, that should -- we are not in a big way present. Our volume in the PVA is still very, very low, so it has not affected too much to us because our other products have performed very well. So because of that, there was no pressure on the margin. But yes, margin pressure is still there because still the raw material prices are on a higher side. But actually, we are passing over the lag effect, and the top line growth is high. So because of that, there is no pressure on the EBITDA, and on the contrary, in this EBITDA side, we have increased our EBITDA margin. Regarding your second question to the waterproofing, yes, everyone is talking about the waterproofing and then we see a very, very big market opportunity to that front. So every player definitely is going to perform in this market. When the market size is big, everyone can take a small piece of the cake. Larger player or maybe a leader can take away the bigger chunk of the cake, but there is always an opportunity available for the smaller-sized companies also to take some portion of that. So that is the case with us also. So with time, we are also continuously launching new products into the waterproofing side. In my presentation, which is shortly going to be uploaded, in time you will see our new products which we have launched in the waterproofing side also. So keep fingers crossed, we'll keep adding the product basket into that segment also and will keep growing at a higher rate.

And with the plumber data which we have, and as we are in the construction industry, in the plumbing business with the plumbers, the connection with the plumbers, lot of our waterproofing products will be launched with new initiatives and which will help us to grow because we have all the products in line. We have all the chemistries. We have all the products available. And we need to go and touch the end users, and that programs have been worked out, rolled out. And I -- we also equally see a great opportunity in waterproofing business. And we'll give you a good set of numbers in this segment and this business in coming years. And very soon, we'll be growing very well in this segment. And we have a lot of initiatives with the plumbers and a lot of end users is going on in the waterproofing. So it was a good question, and I think we are very positive on this, on the waterproofing.

Okay. So sir, a follow-up on this. So Mr. Savlani mentioned about the lag effect. So should we see any pressure on the EBITDA margins in this quarter or the price will take care of?

Yes, this quarter, April was good, I can say, but May is still slow because of the majority of the country is passing through this pandemic time and the lockdowns and all those things. So top line growth will be low compared to what we originally planned. Of course, it will be better than the last year Q1. The last year, April was affected. This year, May is affected. But one thing is good that there is no complete shutdown, so that is a good part that at least some sale is happening today also. So that is going to support us. But I think 1 quarter or maybe 1 month or 2 months is not the right way to look at any company. We have to see any company's performance from the next 5-year point of view. And we always guide our investor. They don't look over quarterly number because quarterly number, 1 quarter may be abnormal, 1 quarter may be subdued because of the market condition and all, but you have to see the annual number. You see, in this difficult time, you rightly said that the peers are not able to grow top line, and Astral was able to grow 26% top line growth. That itself shows that we believe in the long-term journey, and we are -- whatever steps we are taking, that is taking from the point of view of long term, not from the 1 quarter point of view. So I humbly request every investor, it will be misleading if you continuously look at the quarterly number. Always look at the annual number and the next 5-year number.

[Operator Instructions] The next question is from the line of Sujit Jain from ASK Investment Managers Limited.

Sandeep bhai and Savlani ji, congratulations. Very delighted with the numbers. A quick question on now on the industry size, you spelled out INR 32,000 crores, that is for pipes. But in terms of volume, what you think would be the industry size and roughly the split between CPVC and PVC? And clearly, you have made some solid gains in terms of market share. What your current PVC, CPVC market share would stand? Any inventory gains this quarter, if you can quantify? And generally, to understand our cost structure, compared to other CPVC players, how much extra in terms of operating margins you will be earning because you make your own CPVC compound?

So let's start with the last question first. That CPVC compound, what is the advantage to us? I think I will not be in the position to quantify because of the competitiveness in the market. But definitely, anybody who's making the compound, and now, Astral team has got the mastery in making the compound today, any raw material resin of the world, we can compound in our plant. So that is the strength of our Astral team that they can compound any raw materials of the globe. So that definitely is going to give us support in terms of our cost competitiveness. Regarding your second question also, what is the market opportunity for volume? I don't have a handy number with what is the PVC volume number of the country and the CPVC number. But I can say that our market share, as far as the PVC is concerned, it is hardly 4% to 5% kind of run rate. CPVC, we may be close to about 22% to 23% market share. But volume side, I don't have a handy number with me, but if I will get it somewhere, I will definitely share it to you. Anything else still left out?

And the inventory gains that you can quantify, other companies have done that.

I think it is very difficult to quantify. But my rough estimate, I may be wrong also, it will be somewhere around INR 30 crore kind of inventory gain in this quarter. Roughly, I'm telling, it may be plus/minus a few crores.

And for the full year FY '21?

Major sale in the previous quarter was CPVC. And that is why you are seeing the heavy growth in the previous quarter as well as you can see the realization per tonne has gone up sizably. That is mainly because CPVC has contributed very heavily to us. And I told in the initial remarks that many of the items, we were shortfall also because of the supply constraint was going on in the system and all the vessels were getting delayed. Now touch wood, we got every raw material in time. Now everything is aging back to the normalcy. But otherwise, we -- at one point of time, there was a challenge of the raw material also. So CPVC has contributed very, very good in the last quarter, and that is why you are seeing this expansion into the margin as well as the top line. Best part is that in this difficult time also, Astral has maintained their GP margin to 38%, which is the best part, I personally, as a finance person, seeing in my number. And EBITDA will definitely grow with the economy of scale, but maintaining the growth profit margin in this difficult time and passing on at the right time to the market, that is a big achievement our team made. So all credit goes to our marketing team, which has done this excellent job.

Certainly. So what we were looking at is the steady-state OPM this company can make, and hence, the full year number, inventory gain number, for FY '21, if you can spell out.

So full year number maybe, again, I'm saying we are not able to calculate, but it should be somewhere around INR 60 crores to INR 65 crores, INR 70 crores kind of run rate will be that because our major chunk of business is coming from CPVC. In CPVC, there was no change in the price. On the contrary, there was a little drop from our side into the price. So because of that, there was no gain into CPVC side. But definitely, we will see, might be INR 60 crores, INR 70 crores kind of gain should be there, maybe for a few crore plus/minus because we are not able to calculate an exact number. And secondly, sir, I can tell you, we are more dependent on the local sourcing. So because of that, our raw material or whether finished good into the PVC basket will be comparatively low than the players who are dependent on imports. So the higher gain or higher loss can happen to people who are more dependent on the import. While we are dependent on local source, either it is chemplast or maybe you can say the Reliance and all these things. So because of that, our inventory levels are also low. So the moment what price we are getting, we are passing on to the market. So that is why I think our gain will be much, much restricted compared to the other players.

The next question is from the line of Girish Choudhary from Spark Capital Advisors Private Limited.

And firstly, I would compliment on the great performance during the quarter and the year. First question on the adhesive business. For the segment -- in this segment, you clocked around INR 740 crores of revenues this year. But if I see the second half performance and annualize, it sits like more than INR 900 crores. So just to understand this better, which part of this business is showing a strong uptake? Is it the construction, chemicals or wood-related or maintenance chemicals? Would love to hear your detailed comments on this.

So Sandeep bhai, will you reply to this or should I reply?

I can reply. See, every segment has given growth. There's no specific growth of only a few chemistries, which have grown. This has been such a good balanced year for us and balanced way of correction and work done. That even when we went into details and in our Board meeting, everyone was delighted to see equal spread of growth in every segment: in the maintenance, in the epoxy, in the silicon, in the grouts, in the solvent cements, in the cement texture, mixtures, in the wood product line. So it has been a very, very balanced growth, and that is a very good sign of any business, I would say. If it is a lopsided growth, it is always dangerous because if something goes wrong on the lopsided growth, your growth falls very fast. But if you have a very balanced growth of all the chemistries, all the products coming in the right percentage, a variation of few, 4% to 5% here or there, is an excellent business. So every chemistry, every product, every segment we catered to has given us growth. I think the...

Secondly, I can add, Sandeep bhai, here that the best part is that you -- I think the question was right that if we pick up the second half, the second half growth was robust. And if we could have grown upon that run rate, I think we were internally targeting INR 1,000 crore mark in FY '22. But now, the second wave of COVID has come, so we have to see how the pent-up demand is supporting growth, it's supported last year. If the same will be repeated. There are higher probability that we can touch the INR 1,000 crores run rate in this year. So it depends on how hard reopening is taking place. Otherwise, yes, we are mentally prepared and geared up our team already to take that challenge, to touch this landmark number.

I am confident that we will be touching this landmark number, though this 1 or 2 months have been challenging, because now the layout of the business is perfect, rich systems or programs, our way of reporting, our way of billing, our electronic system set in the business, our chemistry, our product line, our demand. So I am 100% confident if 15 days or month goes here or there, but we'll achieve the number by.

Great to hear that. Second question, from the government side, we are seeing massive outlay, specifically Jal Jeevan Mission, this year, INR 50,000 crores. And going ahead also, it's expected to increase. So what are you seeing on ground from this side of the business? And how will a company like Astral placed to take advantage of this and incremental...

I think, Girish...

Yes, Sandeep bhai, you continue.

We have been doing -- we both are sitting at different places. So sometimes the overlap don't mind us. The thing is that we are doing good business in government through Rex. And these last 6 months have shown a good growth and good pull in the market. The sale has grown. Even in these 2 months also, it has been doing good. And we are working on certain product lines with these Nal se Jal projects, which will be value-added products. We don't want to go into a mass product line and then just rub our bottoms out, but we are working on certain product lines. We have really value-added products and still go in these projects. I cannot give you the bigger outlay of these projects due to the competitive reasons. But yes, our eyes are open on this, and we are working on this.

[Operator Instructions] The next question is from the line of Sonali Salgaonkar from Jefferies India.

Congratulations on a great set of numbers. Sir, my first question is regarding the demand trends. Now you touched upon that saying that may appear to be a little weak. Sir, but dwelling deeper into that, any particular trends you are witnessing in May right now from the urban versus rural point of view as well? And, sir, 54% value growth in April on a 2-year basis, was it more because of the underlying demand or market share gains from the unorganized?

So Sonali, I think it is too early to comment about what will happen in the near term to the May. 15 days number cannot be the trendsetter for the company for the full year. So I think it is too early for us to give you any guidance or any comment, which may be not right, because we are not experts into the pandemic side going forward, what is going to be there. So -- but the rate the number of cases as per the reported numbers are coming continuously down, that had given the hope that the revival will come soon but very, very difficult to say that this will be surely going to come. So I don't think that will be the right way to tell you that what is that. But overall, the demand is coming from the states which are fully opened right now. They are under the restricted lockdown. From that side, demand is still continuing, and we are getting the numbers from that state. But many of the states are at the full lockdown. From there, we are not getting any number. So it is a mixed kind of way things are going on in the first 15 days. But at the same time, April -- yes, April numbers are good. But majority of the growth, I can say, was led by the values in the volume. I already communicated in my earlier remarks also that the volume term growth was very [ big ]. So -- and as such also, if you see that historically also, Astral is delivering close to about 16% growth in the first quarter. So first quarter anyway is a lean for us. Whether it is affected by even 10%, hypothetically, I can say that then also, on an annual basis, it is going to touch with only 1.6% of the volume, so it is not going to affect Astral's number per se for the full year. We were very happy that this thing happened after completing our peak quarter, that is the Q4. So even if something goes wrong in first quarter, on an annual number, believe me, it is not going to affect because first quarter is anyway slow for us. You see the last 10 years -- now almost 2007 to until 2021, so almost 14-year history is there. 14 multiplied by 4, so almost 56 quarterly numbers are available. You can see the trend that Q1 is always lean. So I don't think we should give more focus to the Q1 number. Q1 number is not going to affect Astral in any sense.

Sir, fair point. Sir, my second question is, would you like to give any medium-term guidance, in the sense 3 to 5 years? Because you just mentioned in your opening remarks that you are targeting to double the size of your top line over the next 5 years. So any growth rate or margin guidance you would like to give at this point of time? And also the CPVC price hikes that you mentioned of 5% to 8%, when were they taken?

So I already replied all this answer in my initial remark. Again, I'm repeating, if you've not listened to that. So CPVC price, I think across the board, industry has taken in the month of April. Some may have tried in March also, but they were not able to implement. Maybe they have implemented in some geography. But April onwards, I think, across the industry, everyone has taken the price rise into the markets. So this April, I'm telling you. Now coming to -- yes, now coming to your second question was regarding...

The guidance, sir, medium-term guidance.

Yes. Yes. Yes. So I think in the initial remarks, we said that we are aiming to take the company to the double in the next 5 years. So indirectly, we are communicating that long-term 15% kind of top line growth will be bare minimum. We are always -- I can say we are always hungry to grow more. But as a guidance, we are very conservative, and you have seen the history of last 14-year post listing that Astral management is already -- Q4. So we are always conservative in our guidance, and so we are targeting and aiming to be on that level. But at the same time, I communicated the other part also that now we are sitting with a sizable cash also. So there can be -- growth can come from inorganic side also or maybe a greenfield new project can also come in the coming time, next 3 to 5 years. Now if that is going to be there, then the growth rate can be even higher than that also. But that is all subjective because it is very difficult to get an acquisition kind of candidate because our criteria are very tough: minimum 20% ROCE; it should be leveraging brand Astral; it should be leveraging Astral network; it should be a long-term, highly profitable business; and it should not be a high CapEx-oriented business. These are the many filters Board has defined. So within that filter getting the business, it is always a challenge. But yes, definitely, we are keeping our eyes open, and if the right opportunity will be there, we will definitely look into that. So if that is the case, then I think we can be growing even higher run rate also.

[Operator Instructions] The next question is from the line of Maulik from Equirus Securities.

Congratulation on very good set of numbers. Just 2 questions, Sandeep bhai. One is can you just help us understand -- because the right kind of the price gap between the CPVC and PVC is not there. In international market, the PVC is right now $1.8 per kg. CPVC could be in the range of around $2.1 or $2.2 per kg. Could you see the shift and there is more demand for the CPVC from the plumbing as the consumers see that CPVC is no more expensive and they start deferring? Have you seen such trend in the past quarter? Or probably, will you see this in the coming quarter also?

Yes, Maulik, you're understanding -- you're absolutely right. I think CPVC is cheaper compared to PVC. The way PVC has gone up compared to that CPVC has not gone up. So because of that, many players can think to move from PVC to CPVC. And that trend we have seen in the last quarter, and that is why the CPVC volume was very high in the previous quarter, and that trend will continue in the coming time also. That is what we are internally thinking. I think Sandeep bhai can add more into that. Sandeep bhai?

See, first of all, Maulik, the international price is not $1.8. It is around $1.5 and $1.45. Then the pricing softening will start because things are coming normal in the globe. So my thinking is that, that PVC will soften out in next 4 to 6 months, but obviously, CPVC has not so much gone up in this -- compared to what PVC has. And obviously, CPVC is a better polymer, better product. And as it is made in copper tube size compared to the ASTM, the per feet running weight of CPVC pipe is less. So the cost of pipe from us $0.03, $0.04, [ 1 inch is low ]. So the internal plumbing is -- there would be an external usage of CPVC obviously going up. Now when you go to the CPVC again, the CPVC, the advantage which Astral carries, the team in CPVC makes its own compound. It buys its own polymer. And it has advantage of buying polymer from 2, 3 sources, which also gave a major pricing advantage of Astral. And that also additional advantage is being converted into the margins or usage or other programs which we can run as well as the [ cost ] aspects and in the projects. So obviously, these advantages are carried on for the CPVC to grow more than PVC. And PVC is still at this price also prevailing market has come down to a certain extent, but not substantially. Because if you go in SWR, agri, all these applications, there is no CPVC, there is PVC: column, edging. Only where you find CPVC is plumbing against the PVC white. So obviously, that market will be more expanded in CPVC.

Got it. Second question and the last one. Hiranand bhai has given us some guidance on the adhesive margin that the aspiration is to reach to 16%, 17% margin on that side. What could be the similar for the plumbing or the pipe sector, pipe segment, given this year, we did -- 21.5% margin was there compared to 18% in the previous year? Any sort of guidance or outlook on the margin?

I think, Maulik, margin side, pipe, we have already said in the initial remarks that the 15%, 16% is the long-term sustainable margin. But the way Astral is functioning, the way Astral is doing a lot of decentralization work, lot of value-added products are getting introduced in the system and we are taking the economy of scale advantage and all those things, so that will take us to the higher margin run rate. So now what will be the higher run rate? I think that time will tell you, but yes, definitely, these are the long-term sustainable kind of margins. And it depends on the polymer trend also. We have never ever said that we will be able to maintain 23%, 22% kind of margins because these are the abnormal margins, which include the element of inventory gain also. So we have to understand that part also, and we have to remove that also from the system. And secondly, whenever there is a polymer high, then you know that in percentage terms, your margin will always go up because your fixed overheads are always fixed. And your top line growth then -- if you divide with them, then definitely, your core expenditure will be low. So because of that, I think, margins are very, very high, which definitely will not be able to sustain 22%, 23% kind of rate. But yes, we will see that we should be between 16% to 18% 19% kind of run rate. That will be a good achievement for us. But yes, 15% to 16% is long-term sustainable. Additionally, whatever we are taking, the steps and all, whatever that benefit will keep coming to us, we will keep increasing to that level, but this will be the minimum benchmark we will set in the organization.

Okay. And just -- you mentioned that the April to -- April '19 to April '21, the growth in pipe segment for the April '21 was 1%, right, volume growth?

I don't remember exactly 1%, but it should be somewhere in the lower single digit. Yes.

The next question is from the line of Kunal Lakhan from CLSA.

Sir, you mentioned earlier that your PVC market share is about 4% to 5% and CPVC is around 22% to 23%. So the market share hasn't really changed significantly in the last 1 year or so. So just wanted to understand that you have been mentioning about the consolidation happening in the industry, but it doesn't get reflected in the market share. That's my question one. And my second question is in terms of your guidance of 15% top line over the next 5 years annually. Would you break that up into volume guidance and realization guidance? The reason why I'm asking this is because if you look at our volume growth in 2021, it's 3%. And largely, the top line growth has been driven by realization and pricing. So just wanted that breakup of, like, mid-15% top line that we are targeting in terms of volume growth.

So this 15%, we have given a generalized guidance that we will be -- with the caveat that there are a lot of new activities happening in the organization that will take the growth on a higher side. So that is not like 15% is a fixed guidance from the management side. So this is the minimum which we are targeting. And then there are a lot of, you can say, levers available with the management and which I already explained in my initial remarks also. And we have put up these all levers into the presentations also. If that will support, then the growth can be even much, much higher than what is that level. Secondly, your remarks of the market share, I think you should also understand that the country level, the polymer market has de-grown by 15% to 17% last year. So we should not forget that the market was compressed. And under that situation, Astral was able to grow at a 3% to 4% volume. When the market is compressed by 15%, 17%, and we are growing at 3%, 4%, that means indirectly, we are getting the market share. So -- and secondly, this industry number, I have put an approximate number. It may not be a right number with me. So I don't think, in any sense, we can say that we are not getting the market share. We are definitely getting the market share. Otherwise, we can't grow in this de-growing market, which is de-growing at a very higher rate. So we have to consider the market conditions also. Based on that, I think we should take the decision. So I'm quite confident that we are definitely taking the market share, and that is reflected in the numbers also.

Let me get into this.

Sure.

Last year -- last fiscal, we have done excellently then in PVC compared to the smaller players also and everyone, and we have -- in spite of not doing anything in April, May, we have given this number of growth. You can imagine if you divide this growth number by just 10 months, then the growth would be even much, much better, in double digits. So we are focused, and we are working and we would be growing in PVC. We don't want to just focus on CPVC. That's not -- CPVC is a product with which Astral is born, so it will obviously be a lead product of Astral. But PVC is not a product which is in a certain category or not being considered. Why are we going with Bhubaneswar plant? Why are we putting PVC machines in Aurangabad and Sangli? Sangli, already 4 machines are operational. Aurangabad 4, 5 machines will be operational in 2 months. So obviously, even in north, we are planning in Uttaranchal to get into this. Everywhere, our focus is to extend in all polymers: PVC, yes, obvious; CPVC, yes, obvious; [ PPT ] also; and in the water tank business. It's coming in water tank business, yes, obvious. And there are a lot of other plants which are there for the growth of the polymers, products, reach and margins, which we cannot unfold every strategy in an open platform, being watched by every manufacturer, looking what Astral is doing and what Astral is saying, what Astral wants to do and what Astral says has been repeated in the reports of every people. So we don't want to echo our own policies with other people and then get that echoed back to us. So yes, obviously, we are focusing on everything which is there in the business. And with the margin-ended products, there was a question where -- why you can sustain your margin because we are focusing also on margin-ended products. We are focusing on a lot of product lines where we know that we can sustain a better margin and we can sustain our EBITDA margin. But a lot of these strategies cannot be unfold, but the numbers will unfold and say about the same thing in the coming years and coming quarters. And obviously, our dreams would be high in next 5 years to reach a goal, which we have set for ourselves to a number of -- to the top line and the bottom line for both adhesive and the pipe business.

The next question is from the line of Abhishek Ghosh from DSP Mutual Fund.

Sir, just a couple of questions. We hear a lot of the unorganized players having faced a lot of issues during the crisis because of supply chain and other things. Now with things kind of normalizing, do you believe they kind of coming back? Or have they kind of gone for good, if we can just get your comments on that?

Actually, in second wave....

Yes, Sandeep bhai, you continue.

We are more affected actually. And if your ship is shaken too much, it takes its own long time to come back to the level. So it is obvious that it is not going to be so easy and so fast for the unorganized players and the smaller players to come back at that thrust and force, and they -- lot of them are almost in the capital -- when they have issues with the working capital cycle. And a lot of them have issues with their production facility almost shut down. So obviously, we don't really wish that this should happen. And I would not, as a person, as an industrialist, wish this is a good sign and anybody should face this in the future or any time. But obviously, for reasons, these are -- what has happened. And I think this will continue. It's not going to bounce back that [ easily ].

Abhishek, I can add what Sandeep bhai has said that a few of them definitely will come back. It is not that 30%, 35% unorganized players are that they all will die. But hypothetically, I'm telling you even 20% or 25% of that will go away, then INR 10,000 crore plus market opportunities are there with the unorganized players. So INR 10,000 crores to INR 12,000 crores is mainly with them. Even if that 20%, 25% will go away from the system, that itself is going to open up a big opportunity for the organized players and never ever is it going to happen that 100% will die. That will never happen. Even after 10 years also, some unorganized players will be there in the system.

Yes. No, that's very helpful. Sir, the other question is if you can just help us understand the increase in the touch points for the adhesives segment. If you can just help us with some quantification of that, what is the touch point today and what are you doing to kind of increase it in percentage terms, that would be helpful.

So touch points, actually, what has happened that earlier we were working on a certain database which marketing people were sharing with us. So -- but that was not an authenticated database with us. But now, I think we have developed our own programs, and now we are tracking it down the line data and all the things. So now we are getting the authenticated number. Right now, we are quoting in our presentation 130,000 touch points, but I think it should be more in the system. But because now we are consolidating all this number, I think, hopefully, in next 1 or 2 quarters, we'll be getting the right number, what is that, because now every schemes and everything is connected with that program. So because of that, we'll be having the exact number with us. That is going to help us also in our decision-making also and given the exact numbers also. So hopefully, maybe 1 or 2 quarters down the line, we will be able to tell you exact number. But right now, we have project a number of around 130,000 to 140,000 number in our presentation but actual numbers should be more. As far as pipe is concerned, I think there, 33,000 to 34,000 kind of touch points are there.

[Operator Instructions] The next question is from the line of Madhav Marda from Fidelity International.

I just wanted to understand all the new launches that we spoke about, the valves unit and the aluminum CPVC pipes, what could be the opportunity there in terms of the opportunity size in India? And also just curious to understand, can valves and the aluminum CPVC pipe, is that an export opportunity also in the future?

In the size opportunity, just give us 1 quarter, we can give you a percent, approximate size of the market. Also obviously, because we are not -- there is a market, there is a size. We were -- when we stopped manufacturing of this composite 5, 6 years back, we have reached a monthly sale of around INR 3 crores to INR 4 crores. But that was a very costly product at that time. What, actually, we have developed and made is much cost effective and gives the same results and better results. So we'll give you an exact size of the market in just 1 quarter. And whilst obviously, yes, we will give you a rough estimate, already in the industrial segment, we are growing. And we are selling valves around INR 70 crores, INR 80 crores, and we'll give you exact size of that exactly -- it's a rough estimate. The third point you are saying, yes, more will have export opportunities, and we'll be exploring opportunity for it. And it has more export opportunity than even Indian opportunity, especially valves and even pipe, there are similar export opportunities.

And the export opportunity for valves and aluminum CPVC pipes, is that something we would like to explore in the near term? Or is it going to be more 2, 3 years later once we...

So once the range is over, we can explore in valve. You cannot go with half range. So once the range is over in the next 1 year or so, we'll obviously explore and composite in next 2 quarters. After 2 quarters, we'll start exploring.

The next question is from the line of Sneha Talreja from Edelweiss Securities.

Congratulations of great set of numbers. Sir, just 2 questions from my end. What is the breakup of other expenses -- or why the other expenses in this particular quarter is a bit higher? And secondly, what is the CapEx guidance for the next 2 years?

I think as far as the CapEx is concerned, we are targeting roughly INR 130 crores to INR 150 crores this year, and next year will be close to about INR 100 crores. Now coming to your second question of other expenditure. I think last quarter was an abnormal quarter for us because we launched our new brand ambassador, Ranveer Singh. So because of that, we spent a sizable money for fees of Mr. Ranveer Singh. Secondly, making the ad film because that is also a costly affair, to make an ad film. And we have made 3, 4 different films. It was not only 1 film. So we spent on the making of the film charges also and plus launch campaign. We completely sponsored the India-England series, and that has given us a good mileage. And secondly, we had a sizable budget line with us. And because so we cannot shy away doing the branding, otherwise, we are going to affect our brand for a longer-term basis. So we were -- having sitting on a sizable budget with us, so we were a little bit generous in spending into the branding activity. So that also was there. So because of all those things, other costs have shot up. But that is not a permanent type of feature. After doing that also, our annual branding budget goals compared to previous quarter earlier, it was low. So we are always focused and very clear that our budget, whatever being given to the team, should be strictly followed. It is not that we can change our budget. But yes, the timing of quarterly basis maybe changing because of the event. But otherwise, on an annualized basis, we always try to maintain what budget we have given to the team.

The next question is from the line of Rahul Agarwal from Incred Capital.

Am I audible?

Yes.

Congratulations, Hiranand ji and Sandeep ji on a very good set of results. A lot of questions got answered. Just one question, from fiscal '17 to '21, I'm seeing there is a consistent decline in overall debtor days. The receivable management has been amazing. Overall working capital, obviously, I'm looking at the core number, inventory plus debtor minus creditors has gone down from 41 to 27 days Y-o-Y. That is also great. I just wanted to understand, is this driven by pipes or adhesives? That is one. And if you could guide us on the future of this, like where does the overall working capital cycle stabilize? Obviously, fiscal '21 was a very great year for working capital for most companies here, but if you could just help us understand working capital better and where does it stabilize would be helpful.

I think the overall performance was excellent in pipe division, followed by Resinova. That is Indian adhesive division. Overseas division, on the contrary, a little bit inch up in the working capital cycle. So 2, 3 days or more in all sites, whether it was inventory or receivable. So overseas side, there was no improvement in the working capital cycle. They have maintained with the 3, 4 days plus/minus. But definitely, in the Indian operation, both adhesive as well as by pipe, both have performed excellent, I can say. And going forward also, I think we are targeting that we will be more or less 5 days plus/minus from whatever the level right now you are seeing. But on a quarterly basis, it can be a little bit plus/minus. Like, now hypothetically this quarter, this quarter, the volumes will be a little lower because of this pandemic effect. So in that case, your inventory level may go up because we were working on a 20%, 25% kind of volume growth trajectory. And now all of a sudden this challenge comes. Then naturally a little bit inventory will go away. Again, the pent-up demand will come. Then in Q2, again, it will go down. But on an average, I'm telling you we will be plus/minus 5 days what you are seeing in the current year full year number.

Sir, full year ended at 18 days. So should I assume like 25 days is a steady-state number, overall working number?

Maximum, you can consider 25 days.

[Operator Instructions] The next question is from the line of Sagar Jethwani from PhillipCapital.

Great set of numbers sir, and an impressive growth plan. Sir, I have quick 3 questions. In piping segment, whom are we taking market share from? Is it just from the unorganized market or maybe you can name any player? And my second question is, how much is the export contribution do you see in next 3 and 4 days? Third, if you can quickly help us with export margins and export receivable days.

So I think it is not fair to give you any organized player's name that whose market share we are taking. That is an injustice to everyone. So we will not be able to share the name of whom we are taking the market share. But definitely, unorganized market share, we are definitely taking. So that is across all the industry, every organized players are trying to take the unorganized portion. Now coming to your export side, I think export side still has very, very limited presence. So now with this addition of new products, like Sandeep bhai has rightly said, that CPVC aluminum has a good potential for export. Valve is a good potential for export. Now our adhesive division is picking up for the export. Many products are such that we can also export. So going forward, we may increase our focus into the export front, and we may increase our export. Because right now, export as a percentage of the sale, is hardly anything. So -- but definitely, yes, there is a huge scope available in future. And definitely, we will see that now we can keep our specialized people over there. Right now, already some people are appointed and they are taking it. That's why export revenue is going up. But still, it is not up to the mark. So we will see that now we can increase the strength over there, and we can grow this revenue at a very, very fast run rate because still, our base is very, very negligible and scope is there. And now with the new addition of the product, that scope will be wider. So definitely, we will try and see that we can grow the market share into the export side also. And on receivable, I think amount is very negligible. So hardly anything will be there. And majority of our export is either advance or through LC. None of the party whom we give clean credit, so it is 100% secured. And that is why you can see in the balance sheet, which is going to be shortly published and presentations and all, our more than, I think 90 days of receivables are hardly INR 3 crores -- INR 2 crore as a company as a whole. So INR 2 crores, INR 3 crores is nothing looking to the size of that. So we don't allow -- and we are very, very serious about our -- this cycle. And we don't allow anybody. Otherwise, we can have done a much, much better volume if we start giving the credit terms to our distributor or maybe quoting to the direct projects or maybe giving suppliers to the government. We can grow even at a much, much faster rate. But we have maintained a discipline in the organization that we don't want a higher growth. We want the growth, which is consistent. See, this is very important. We'll put Astral philosophy there. We don't want overnight growth. We want a growth which is consistent, and that is why you see the day we got listed from 2007 until today, 14 years, you see on a year-on-year basis we are growing. So we always believe in consistency. We don't own 25%, 30%, 40% kind of growth. We want -- in 15%, we are happy, but we should see that it should be consistently maintained. And that is why we every time -- personally, I'm also telling every investor, if you want to compound your money, Astral is the best company for you. A short-term kind of gain, Astral is not a good company to put money. So consistency is very important for us, and we always stick to that. And we are educating every -- our team members also into that front only.

The next question is from the line of Achal Lohade from JM Financial.

Congratulations for great numbers. My question was in terms of -- we have seen be adding acquiring Rex, be acquiring a facility in Aurangabad. I'm talking about specifically the pipe segment here. So in terms of acquisition -- or do you see opportunities around -- as you kind of hinted we could have INR 1,000 crores kind of a cash balance over the next couple of years. So in that situation, how do you look at deploying that from an inorganic growth perspective? Will that be more in the pipe segment or adhesive segment?

Inorganic growth is obviously any growing -- any organization which is sitting on cash and which is an opportunity which comes through the door, we obviously grab. And we have done that. As of now, nothing on the table. But as of now, opportunities come and go and we try to evaluate. If there is a future, there is a margin, there is a product line, there is a synergy, there is an opportunity, we will always keep looking at it. It is not that we won't be looking at it. But wherever we have taken this step of getting into a new segment, getting into a new business, getting into a new product line, getting into some industry, we -- you can see our track record of all acquisition. We put them online, put them on growth, put them in our culture and do our best. Having said, we now are assuming to do. And obviously, we will be exploring such opportunities in these 4 walls of the construction industry. That is what we would like to remain, in these 4 walls of the construction industry. And Astral has built its own brand, its own -- so it is today having a lot of recognition as the best brand, as the most powerful brand. Many, many recognitions are there. You will see in the presentation today. And the best part of Astral is, which it was not there maybe 6 years back. Today, Astral has its own complete range of technology, complete range of product lines, complete indigenous technologies, whether carbon pipe is made, whether composite, CPVC compound, fire pipe, industrial pipe, PVC and even the column pipe, we have a new technology. Astral has its own technologies. It has all its own brands. Astral does not have any brand which is owned and technology from someone else. It has its own product line. It has its own technology. And it will keep growing the growth path in its own technology product line in piping, adhesives and by the inorganic part also. That is what my vision carries, sir.

We take the last question from the line of Sujit Jain from ASK Investment Managers.

Sir, just one question. You mentioned about the gap between PVC and CPVC price. In terms of current rate for PVC, what they would be, so that, that gives us a sense as to the reduction of the gap between the 2.

So like PVC, pre-COVID, it was roughly about INR 1 -- sorry, INR 70 a kg which has gone up to a peak level of INR 135 kind of level. And now it's INR 4 less, so around INR 130, INR 131 is there. So that price rise goes there. While CPVC, there was no price rise, except this 5%, 6% or 7% every company has taken in the month of April. So that kind of gap has reduced, I can say, in the system.

That was the last question. I would now like to hand the conference over to the management for closing comments.

Thank you, everyone, for this opportunity. I would always like to close saying that be safe, take care of your families, take care of yourselves. And still we have to work and still we have to grow. So we have to accept the reality, accept the challenge, take care of ourselves, get vaccinated and we have to get back to our work. And we are back on work, and we hope everyone gets back to work and things keep normalizing. We pray to God. We appreciate the steps taken by the several state governments and the central government and we get back to business in short. At the same time, we thank you for your trust in us and believing in us and giving us the opportunity today to present our Q4 result and joining us in our -- this call and the annual results also. And we will surely look forward to, again, talking to you of the Q1 results. And if time permits and if things permit, at the half year results, we would like to come down to Bombay and have a conference and meet you in person. That is what I'm aiming for. But stay safe, stay healthy and take care of yourselves. Best wishes to everyone. Thank you very much.

Thank you, everyone. Thank you for joining this call. If any questions are unanswered from the participants, I think you can call me anytime. My mobile is always available 24/7 for you people. And post this presentation, if you have any question or any doubt, then also you can call me tomorrow because this presentation will be now uploaded shortly, maybe a couple of hours or so. I will try whatever early I can do and will be in touch with you. Thank you very much. Thank you, and bye-bye. And thank you to Edelweiss team for hosting this con call. Thank you, Praveen.

Thank you. Thank you, Edelweiss people.

Thank you. On behalf of Edelweiss Broking Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.