Bigbloc Construction Limited (BIGBLOC) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Bigbloc Construction Limited Q3 9 Months FY '25 Earnings Conference Call hosted by Ventura Securities Limited. [Operator Instructions] Please note that this conference is being recorded. Before we begin, I would like to point out that this conference call may contain forward-looking statements about the company, which are based on the belief, opinions, and expectations of the company as on date of this call. These statements do not guarantee the future performance of the company, and it may involve risk and uncertainties that are difficult to predict. I would now like to hand over the call to Tushar from Ventura Securities. Thank you, and over to you, Tushar.

Thank you. Good day, ladies and gentlemen. On behalf of Ventura Securities Limited, I welcome you all to Bigbloc Construction Limited Q3 and 9 Months FY '25 Earnings Conference Call. The company is today represented by Mr. Mohit Saboo, Director and CFO; and Mr. Manish Saboo, Marketing and Strategy Head. I would now like to hand over the call to Mr. Mohit Saboo for his opening remarks. Thank you, and over to you, sir.

Good morning. Thank you, and good afternoon, everyone. It is a good pleasure to welcome you all at this earnings conference call for the third quarter and 9 months of the financial year 2025. Let me start by giving you a brief overview of the financial performance for the third quarter and 9 months of the financial year 2025, followed by some of the operational highlights for the period under review. For the third quarter under review, the revenue from operations was INR 57 crores, which declined by approximately 8% year-on-year and rose by around 10% quarter-on-quarter. The operating EBITDA was reported at around INR 6 crores, reflecting a decline of approximately 62% year-on-year and 21% quarter-on-quarter. The EBITDA margin stood at around 10.74% for the third quarter. The net profit after tax was INR 30 lakh approximately, which decreased by around 97 % year-on-year and rose by 50% quarter-on-quarter. The performance quarter-on-quarter was primarily impacted by lower demand due to the festival season Diwali, and the state elections in Maharashtra. For the 9 months under review, the operating revenue stood at INR 160 crores, which declined by around 9% year-on-year. The EBITDA was reported at INR 24 crores, representing a decline of approximately 46% year-on-year. The EBITDA margin stood at INR around 14% for a period. The net profit after tax was around INR 3.5 crores, which was lower by 84% year-on-year. On the operational front the company's sales volume for the quarter in this marginally by 0.2% approximately on year-on-year basis, and approximately 12% on a quarter-on-quarter basis. The consolidated capacity utilization of the 3 running plant was around 53%, which was lower due to the gradual scale-up of the Umargaon (Vapi) plant, which has recently completed its upgradation, and the lower utilization for the SIAM Cement BigBloc Construction Technologies Pvt Ltd plant, which has recently started production, which also resulted in a loss of around INR 5 crores at the subsidiary level for the quarter under review. On the CapEx front, the technology upgradation for the Umargaon plant stands completed as on 16 October 2024. The plant has commenced commercial operations, which will be scaled up gradually. The plant's capacity utilization for the third quarter was around 41%. We have also completed Phase 2 of the Wada plant expansion. With this, our AAC blocks manufacturing capacity doubled to 5 lakh cubic meters per annum at this plant. The new product launch by SIAM Cement BigBloc Construction Technologies under the brand name ZMARTBUILD WALL by NXTBLOC have recently received a product test certificate from IIT as well as ARAI. SCG block is the only company in India that can supply 20 feet wall, which was previously being imported from other countries. Additionally, we have expanded our product lines in construction chemicals and will soon be starting Block Jointing Mortar, ready mix plaster, and tile adhesives manufacturing, which are designed to enhance construction efficiency and durability. We have introduced NXTGRIP Tile Adhesives along with its trusted brands NXTFIX and NXTPLAST, ensuring superior bonding, strength, and performance for diverse construction needs. I'm also happy to inform you that the company has secured an INR 4.5 crore work order from Tata Projects Limited for the supply and installation of 2 lakh square feet of 100 mm AAC panel at Micron India's semiconductor facility in Sanand, Gujarat. This marks the addition of Tata Projects Limited as a new customer, further expanding the company's client portfolio. We believe this customer and this order and the semiconductor industry offer enormous future growth opportunities for our company. Lastly, I'm delighted to share that our commitment to sustainability has reached new heights. We will install an 80-kilowatt rooftop solar power project in our Kapadvanj plant at Starbigbloc. Additionally, a 1,350-kilowatt solar rooftop system will be installed at our newly established factory under the joint venture Siam Cement Bigbloc. With these new additions, our total solar power capacity will reaching approximately 3,475 kilowatts across the company and its subsidiaries, reinforcing our mission to integrate renewable energy solutions into our operations. During the quarter of the total power requirement for the company, 16% came from renewable sources of energy. And going ahead, we intend to reach this level of almost 35 to 40%. With that, I now open the floor to the question-answer session. Thank you.

[Operator Instructions] The first question comes from [ Bhavesh ], an individual investor.

Sir, we are entering construction chemical. But as I understand, there are a lot of already established players, although the market is growing. So can you please explain the rationale for entering this segment?

Thank you for the question, Mr. Bhavesh. So just to highlight, we have already been doing some trading of construction chemicals like the Block Jointing Mortar, which is NXTFIX as well as the ready mix plaster, which is NXTPLAST since the last 2 to 3 years. And since we have now [indiscernible] volumes, almost 10% to 15% of our turnover is coming up from these construction chemicals, we decided to venture into manufacturing of these products. And at the same point of time, in the same setup, we will be also able to manufacture tile adhesives, which is another new product that we are introducing and looking at improving our realizations and increasing our sales for these products, we decided to enter into manufacturing of this product because the customer -- the target market for these products happens to be the same which happens to be -- for our AAC block division.

Yes. But sir, can you explain in terms of what are the prospects? What is the market size and how fast is it growing?

So earlier, people used to follow the traditional method of making -- fixing sand with cement and using it for joining the blocks or tiles or also the bricks. Now people have started using a bag form of mortar. Similarly for plaster also, people have started using the ready mix version, and the market has been growing at least at around 12% to 15%. And it gives us a value addition in that aspect that the customer does not need to go to different smaller manufacturers of construction chemicals. He'll be able to procure from the similar supplier of blocks, the same product of Block Jointing Mortar, tile adhesives, ready mix plaster everything.

Right. Got it. And sir, lastly, in terms of market in Maharashtra, I think we had seen a slowdown in the first half of FY '25. But are we seeing the pickup? And if we are seeing a pickup, is it mainly from running quarter?

Yes, the Maharashtra market was a little bit slowdown in the last Q3 because of the general elections ongoing in Maharashtra. And post the election results from mid-December onwards, we have started seeing a decent pickup in Maharashtra. And I think going ahead, the Maharashtra demand would keep on growing. As Bombay also is coming up with lots of different infrastructure projects, which are also helping in increasing the requirement for housing. And at the same point of time, the projects like Navi Mumbai Airport will help growth in that region as well as Pune. IT and everything has been growing phenomenally. So we see quite a promise from Maharashtra region.

Next question comes from Deepak Pawar from Vasuki India Fund.

Yes. My question is regarding what are our debt repayment plans as we have already taken up debt and we have already gone for the CapEx…

Your voice is not very clear.

Yes. I wanted to know regarding what is our debt repayment plan?

So regarding our debt repayment plan, I think as on 31st December '24, our debt equity ratio will be in the range of almost 1.15 to 1.02:1. And we have done recently completed majorly all of our expansion apart from the rooftop solar, which are self-sufficient on their own. And going forward, as the capacity utilization keeps on increasing, our debt level will keep on going down as our volumes as well as our margins will keep on improving.

So can we expect debt repayment in the next 2 to 3 years of time span?

So honestly, our target is not to repay the debt. We are a growing company, and we'll be coming up with more expansions in the next couple of quarters as well. We have recently acquired 1 land in Central India near Indore, where we'll be putting up one more AAC block manufacturing setup. And on a long-term basis, I think a debt equity ratio in the range of 1 to1.5:1 is somewhat, I think, should be quite comfortable as the industry also has been growing significantly over the last 3 to 4 years.

So my next question is regarding the CapEx itself. As you said, you are currently venturing into Indore.

That's right.

Any other region because last time I remember you were talking about South India. So any progress on those part?

I think last time we had talked about coming up with manufacturing setup in 2 different locations, one in Central India and other in Southern India. So Central India land near Indore has recently been acquired just a day back or so. And Southern India also, we are looking at the land opportunities and we will hopefully be finalizing the same in the upcoming couple of quarters.

On the second, my next question would be what is the ratio where we supply in the realty construction and infra construction? Is there any ratio available, how much we supply to?

So almost 65% to 70% of our material is going into commercial as well as real estate spaces. Almost 15% to 20% of the material is going into [Technical Difficulty] Reliance or Adani, L&T or [indiscernible]. And 10% material is going into real estate spaces as well [indiscernible].

My next question is on the chemical front. This chemical whatever we'll be manufacturing, will it be B2B or B2C?

So this will be majorly B2B again, as we have been doing a lot of trading of these construction chemicals since the last 2 to 3 years. And we'll try to develop a small vertical of B2C also in the smaller towns and villages. We'll be manufacturing these on our own, we'll be able to get better realizations and better sales through those networks as well. I mentioned that we have a retail network also for blocks. We'll be using that network for the B2C [indiscernible].

So in the construction chemicals segment, what would be our margins -- EBITDA margins that we can expect?

I think similar margin of almost 18 to 22 percentage is something what we are seeing in the construction chemicals space since -- even in the trading division, we have been witnessing almost 10% to 12% margin for the construction chemicals.

My last question would be on the carbon credits. Generally, we sell these carbon credits once in a whole year, right? In 1 quarter, we get this credit sold and get included in the revenues. So which month we do that? And what would be the revenue from the carbon credits? Any ballpark figure for this year?

So in the current year, so far, no carbon credits have been sold. We are waiting for the issuance of carbon credits from the audit authorities of Verra. And once the credits are issued, we'll see -- inquire with the market, inquire with the buyers as to what the current selling prices are. And then probably we'll take a call as to whether to sell them or to hold on to them for better realization.

Next question comes from Ranjith Kumar from Spark Capital.

So my question is on the raw material front. So I've had access to look at the raw material composition of a few other AAC block players in the market, the organized players. I think Bigbloc, in particular, uses more ash content in terms of volume, right, when compared to the other players who use a bit of more cement, bit lime, et cetera. So I was just wondering what the impact of using more ash content in AAC blocks would be in terms of compression strength or any other mechanical structural property? Because from whatever I understand, increase in the ash content actually increases the porosity of the brick, resulting in a lower strength. So I was sort of wondering like what kind of grade that you sell to your customers? Would it be grade A or grade B or grade C? That is one question. Second question is, from where do you actually procure cement, cement, and bit lime for your bricks?

So coming now to your first question for the ash content. So I think -- as per my understanding across the entire AAC block industry, almost entire industry would be using ash in the ratio of 60% to 70%, 65% being the industry average, someone might be at 63%, someone might be 67%, pending on the product mix, et cetra. And in terms of the compression strength or the product grade, so we have been supplying products as per the client requirements and have been having [indiscernible] order from various customers the likes of L&T, Reliance, Adani, Capacite infra, Oberoi, Sunteck, Runwal and many others. So most of the sites, the block requirement is grade A block which is our grade 1 block which is requiring compressive strength of 4 blocks. There is for certain specific customer where their specific requirement is of 5 plus compressive strength the likes of Ahuja Cements, then [indiscernible] which I cannot name right now. We are also making specific strength material of 5 plus where the cement or the binder requirement goes up and the ash requirement goes down. But their price [indiscernible] raw material mix in a way that we give customer satisfaction the first -- who have -- priority. And at the same point of time keeping our costing as well [indiscernible]. In terms of the [indiscernible] cement and lime, so lime has been procured at all the H block. It is from Rajasthan. Then our various certain manufacturers of lime -- bit lime powder which we have been using, we've been [ boothing ] from this since the last second or so. The quantities from different suppliers keep on changing the -- since we're running 4 different plants and our requirements are quite high. And in terms of cement again the regions that we're located, there is abundance of cement available from the prime suppliers of cement for us is Wonder Cement and various others include JK Lakshmi Super as well as [indiscernible] Cement or [indiscernible] many others.

[Operator Instructions] Next question comes from [indiscernible] from [indiscernible] Partners.

Sir, by when we can expect the margins to go to our previous levels?

So for the last quarter, our margins have been in the range of almost 15% EBITDA, but that also includes the lower utilization of the new JV Plant where we have introduced AAC wall ready-made, which is the only product available for a height of up to 20 feet. And this plant has been running at substandard utilization because, in the last quarter itself, we have got some certificate from IIT as well as ARAI for the compressor strength as well as fire installation and noise level and all those things. And I think it will take about a couple of quarters since this plant comes up to utilization levels going up to 50%, 60% upwards. And if you look at our earlier plant, the 3 older plants that we have, those plants, the margins have been in the range of almost 18% to 20%.

And so we will be able to reach our last year's revenue this year, like INR 200 crores…

Turnover was approximately around INR 240 crores. The realization have gone down in the current year because of overall raw material price decrease as well as a little bit slowdown in the demand as well across different regions because of general elections in the first quarter, the Maharashtra election in the third quarter. So -- I mean, revenues might be a little lower than the last financial year.

Okay. And what kind of growth we expect after '25 -- in the next 2 years, like what kind of growth are we expecting given that we have a new business also coming up?

So from first quarter, the turnover has increased in the second quarter, and we have seen another 12%, 13% jump in the third quarter. So going ahead on a quarter-on-quarter basis, I think our capacity utilization and revenues should keep on increasing and we should be able to reach almost 70% plus utilization hopefully in the next 3 to 4 quarters.

Next question comes from Aditya Verma from Synergy.

My question is regarding the profit guidance. So what is your profit guidance for the next quarter and financial year '26? And also, sir, I see in the balance sheet, the interest is greatly reducing our profit. So is there any plan or we plan to maintain the same debt level and the interest level?

So in terms of the profit margin capacity utilization is at around 53%. And on a quarter-on-quarter, we are concentrating on increasing the utilization levels currently. And as the utilization levels keep on increasing, our profit margins will keep on improving. Coming down to the finance cost. So the finance cost has increased because we have recently expanded as well and increased the capacities across all our units, some upgradation of the Umargaon plant where we will be generating lower reduction as well as the manpower cost has gone down. So looking at those aspects, maybe the finance cost has increased. But overall, we are concentrating on increasing our company's profitability on the long-term.

[Operator Instructions]. Next question comes from [ Jay Shukla ], an individual investor.

So my question is with regards to our current revenue for FY '25 in the current 9 months, we see that the overall volume levels has gone down due to maybe lower capacity utilization and some maintenance work which is going on at the plant. However, we also see that the overall number of the revenue has still come down. So is there any realization issues which we face from the customer's end?

If you see the volume levels in the first 2 quarter, our volume were down in the particular per quarter the volume has been a little on the higher side as compared to Q3 FY '24. Coming to the realization point of view, yes, the realization in the current year has been a little bit on the lower side because one, all the raw material costs have also been gone down. And the cement prices I think in the last quarter had witnessed almost 4 or 5 year low. And looking at that, we also had to pass on some pricing benefits to the customers. And at the same point of time, because of a little bit of a slower demand growth and competition, the realization has also come down in the last quarter.

Okay. And where do we see the realizations going from now onwards?

So currently we are just concentrating on increasing our utilization levels. So for last quarter our utilization was in the range of almost 53%, 54%. Firstly we want to bring the realization from almost 65%, 70% upwards and then we will be concentrating on realization goals.

Okay. And in percentage terms, what would be the impact of the lower realization roughly?

So our earlier EBITDA margins were in the range of almost 23%, 24% but in the last quarter, it was in the range of almost 18% 19%. So I think our [indiscernible] 4%, 5% in terms of realization. And the other [indiscernible] realization has been because of lower raw material cost, as I've already mentioned before.

And sir, recently, we have seen that there are some rate changes from GST perspective. So what would be the overall financial impact on our current inventory levels or the sales which we are planning to make going forward?

So honestly, there has not been any rate change. Just a clarification, which has been issued by the GST Council in their meeting on 20th of December, which has been recently announced. And there was an ambiguity going on as to what will be the GST rate on fly ash based GST block. So there are 2 types of AAC blocks. One is sand-based and the other is fly ash-based. We have been manufacturing both. Sand-based we have been clearing at a rate of 18% and the fly ash we have been clearing at a rate of 12%. And recently the clarification has been issued that the fly ash based AAC block which has content of more than 50% of fly ash will be classified as the 12% GST, because the [ DTGI ] which is the authority from the government of India, which is evaluating GST rates for different product has been trying to identify this issue and we have gone ahead with the GST council submissions and now they have issued that clarification that we'll be tax [indiscernible]. So there's no difference or any impact. It's just a clarification which has been issued for us.

Okay. And sir, just a connecting question with the realization part. So is there any accumulation of inventory along with some lower capacity utilization, which we are currently having at either of our plants as in the inventory is yet to be sold or is slow moving as compared to the previous year or previous quarter?

So this is a bulky product. And inventories, that we keep on [indiscernible] at our plant in a way that we have 3 to 4 days of inventory that our plant for finished goods as well as 8 to 10 days for raw materials. Raw materials we increased the inventory before monsoon [indiscernible] for ash well as coal so that we don't have to bear the transportation losses because of extra moisture content in both of those materials. But because of the bulkiness of the product, we cannot increase the finished goods inventory beyond a certain days because the storage [indiscernible].

So sir, my next question would be with regards to the market share of organized players vis-a-vis the unorganized players for the AAC block manufacturing, especially in the West region.

So in terms of Western India, the market share as of today in terms -- we cannot differentiate directly between organized and unorganized because post GST, the unorganized in that way we had been dealing into cash and is almost finished. And if we count that way, the organized and unorganized -- we - the organized are the ones who are running multiple plants and having different setup, whereas the unorganized being the single plant or the smaller plant with the capacity of maybe 50,000 to 1 lakh cubic meters per annum. So I think that would be today at approximately 50-50 ratio sort of.

And what would be the pricing difference between the -- between these 2 categories?

So I think the organized players because of their timely supply, the quality of material that they offer, they are able to command a premium of anywhere between 3% to 6%, 7% as compared to the unorganized or the smaller players.

We have a follow-up question from Ranjith Kumar from Spark Capital.

So earlier -- following up to my earlier question on the different grades of AAC block that you sell. Obviously, you said that you would be selling all different grades depending on what the customer wants. So what would be your percentage of grade A, grade 1 or versus grade 2, grade 3? And in terms of -- I mean like what is the percentage of breakage level that you see in your plants in terms of the overall volume of bricks that you make? And how do you sell the ones which are kind of broken? Would it be at 80% of the realization or 70% of the realization or something like that? Secondly -- okay, I'll ask my next question after you answer this.

So in terms of the categorization of grade 1, so there are 3 types of grades, which I can categorize for you. One is a 5 plus 10, which is made for specific customers, the likes of Ambuja and a few others. And I think those volumes are in the range of almost 3% to 5%. The other is grade 1, which is 4 plus 10, which is almost 85% to 90% of the volume that we are totally manufacturing. And the third is the grade 2 trend, which is the 3 plus 10, which is almost 5% to 10% of the total volume of our sales. And these are [indiscernible] the villages there where there is currently awareness being developed for use of AAC blocks for first time users, et cetera. In terms of the rejection level at the plant, so the new plants that are upgraded, means the JV plant, SIAM Cement, as well as the [ Wada ] plant, as well as the Umargaon plant, which has been upgraded. We are seeing rejection levels in, which is less than 2%, maybe 1 to 1. 5 percentage. And the Starbigbloc plant is running at the rejection level of almost around 4 to 5 percentage where we will be taking up the upgradation hopefully in the next quarter or so to bring down the rejection level at par with the other plants of almost 1 to 1.5 percentage. And rejected materials, the rubble that we call, is also being sold from these plants in a way that we can get almost raw material cost, 75%, 80% of the raw material cost from the sale of that rubble.

Okay. Sure. So also, another question. So you're also selling sand-based bricks, right? So what is the content of sand in that? And I think all the international AAC players predominantly use sand-based, not ash based, right? And what's the sand-based content in your sand bricks? And what is the percentage of sand based bricks in terms of volume of your overall thing? And what's the realization difference between sand based AAC brick versus ash based AAC brick?

So yes, we have been making sand based as well as ash based AAC blocks. Ahmedabad and Baroda markets, so majorly North Gujarat region is the place where sand-based AAC blocks are being used by various builders. And the same is a more premium and an expensive product, which also comes under 18% GST. The effective cost of the product goes up drastically. In terms of the product almost instead of fly ash, which is around 65, 60, 70 percentage, sand is used to the tune of 60 to 65 percentage whereas other raw materials, which include cement, lime, aluminum powder, gypsum remains the same. So more or less, it's a more finer product as compared to fly ash because as is a waste from the thermal power plant whereas sand is used finished product which is being used. Secondly, in terms of the share of the percentage, so in terms of the total volume of our sales, almost 10% is sand-based, rest 85%, 90% is fly ash based because the markets like Ahmedabad and Baroda are the only markets that sand based is sold. Rest of the other markets, which includes MP, Maharashtra, Gujarat, South Gujarat, only fly ash based AAC blocks are sold. Coming down to your question of the international markets, yes, majorly in international markets, the likes of Europe and other, majorly sand based blocks are only being made because they don't have enough availability of fly ash because those are not countries which are predominant dependent on coal-based thermal power plant. And because of that, they use sand for manufacturing of AAC blocks. India still being a coal dominant economy where 65% of the power is generated using coal-based thermal power plant, the availability of fly ash is much easy. And it's also almost pond ash, which is waste ash which is being dumped in the area surrounding the thermal power plant is still free of cost. So looking at those aspects, fly ash based AAC blocks are the major share content in the AAC block space in the country.

And one more question. I might have missed it during the initial presentation probably. So you are also doing panel walls, which are much larger in terms of surface area when compared to the AAC blocks. So these are sold at a higher realization. So how do you see the traction going in terms of the panels themselves versus AAC blocks? And would you say that there will be shift to AAC blocks first and then probably to a more premiumized product like panel? Or how do you see the movement happening as far as customer demand is concerned for AAC?

So the AAC panel that we have introduced is a new product in the country and more or less, we are the first movers in this space. And we are the only players who are providing a wall panel up to height of 20 feet. In terms of the market acceptability, it is taking a little bit more time, but with the closure of the recent order from Tata project, we are quite confident and we are in talks with lots of other large corporates for their upcoming manufacturing facilities, be it data centers or be it semiconductor, cables, electronics, et cetera, manufacturing facilities. Coming down to your point of market acceptability and conversion from AAC blocks. So it's not necessarily that only the AAC block customers will be shifting towards AAC panels, but there are lots of other different products, the likes of sandwich panels or bison panels, which is a category where we are looking at replacing those products with AAC panels because those products, the likes of bison panels or sandwich panels have a fire rating of almost 90 to 120 minutes, whereas our AAC panels have a fire rating of 4-plus hours, which is certified by IIT, which is the top most institution in the country. Secondly, the launch installation is also better than those other stock of panels. And thirdly, these panels, which are the bison panels or sandwich panels, they have a height restrictions of almost 3 to 3.2 meters, whereas we are able to provide a single panel with a height of almost 6 meters. So looking at these unique advantages of AAC panels, we are quite confident of the growth of this product going ahead.

Sure. And one more final question. So how do you see competition from other kinds of bricks, right, like concrete bricks, hollow bricks and another -- there's also another technology through which you make bricks, which I'm not able to remember. But how do you see that competing with AAC blocks? Obviously, those other bricks are far better in terms of quality, price, et cetera, versus red bricks or clay bricks, right? But how do they compare with the AAC blocks? And how do you see competition from those kind of bricks?

So AAC blocks has been growing a lot of traction and are gaining more awareness, acceptability in the market. But even after all these years, the share of AAC blocks in the walling material is around 10, 11 percentage, whereas that of red bricks is still at around 80 percentage. And other materials, which includes different types of panels or concrete blocks or even other technologies would be having a share of almost 6, 7 percentage. So there's a huge scope of growth by conversion from red brick to AAC blocks, firstly. So the product future still looks quite promising in the last -- and once a person from red bricks will not directly move to concrete blocks or different sorts of panels because for multistory or residential, the unique characteristic of AAC blocks means the density of the lightweight is a huge advantage. And without that [indiscernible] high-rise are not possible.

We have a follow-up question from Jay Shukla, an individual investor.

Sir, recently, in the quarter 3, we have also seen a reduction in volumes for our other cement manufacturers as well. So I believe the flow of demand would go hand-in-hand for cement as well as our AAC blocks, especially in the West region, the fall in demand was roughly around 5% to 7%. So can you break down your revenue or the product mix, which is used for infra use, commercial use and housing purpose.

So yes, you're right. In the last quarter, I think the cement demand did witness a little slowdown. And s I mentioned, apart from the demand slowdown the cement prices in the last quarter had an almost 4 to 5-year low because of which our realizations have also gone down because we have to pass on the benefits to the customer. Coming down to your query for the use of the product. So as I mentioned earlier, almost 70% to 75% of the product is being sold for residential as well as commercial properties, be it housing or redevelopment or various other segments. Almost 15% of the product is being sold for industrial uses, which includes various factories coming up the likes of ArcelorMittal Nippon Steel as well as Reliance came up some factories, Adani coming up with a solar factory or glass factory, Waaree coming up with a solar factory. And certain products are also going for the warehousing division and almost 5% to 10% of the product is also for retail sales, which is being sold on a retail level for individuals who buy who are retailer.

Got it. And sir, what would be your guidance for revenue and EBITDA margin for FY '26 and '27? Because I believe we had earlier guided for doubling our revenue in a couple of years. So will that remain intact? Or will that be subject to change?

So currently, we are just concentrating on increasing our utilizations on a quarter-on-quarter basis. And utilizations keep on improving, our revenues will also gradually keep on growing. And yes, we'll be seeing a substantial jump in our top line in the next financial year.

Okay. Do we have any number in mind for the capacity utilization or the revenue part?

So I think we should see at least a 5% to 10% jump in our utilization from the current levels of 53%, we intend to be 65% to 70% in the next financial year.

And sir, as you correctly told and as per the media release for the acquisition of land near Indore in Madhya Pradesh. So what are our plans in terms of additional capacity, which we intend to do in the coming period, and approximately by when should we expect the plant to be commissioned FY '27 or even ahead of that?

So currently, we have just acquired the land. We'll be doing the necessary documentation procedure for conversion of the land to all agricultural as well as necessary permissions from the government department. And in the next couple of years, we'll be looking at increasing our installed capacity from 1.3 million cubic meters to 2.3 million cubic meters to 2.5 million cubic meters.

Okay. And that would mean doubling your existing capacity, right?

Yes, approximately, almost a growth of 50% to 100%.

Okay. And that we are targeting to achieve this by?

Hopefully, in the next couple of years.

[Operator Instructions] The next question comes from [ Manish Kima ], an individual investor.

So I have a couple of questions. With respect to the joint venture, what optimum capacity do we think we can break even because I guess the company has been reporting losses from the past 3 quarters, and quite understandably because we are --what do you say, not working -- I mean it's a new business. [indiscernible] with the company has not provided post-employment benefits and other long-term employee benefits as per (Ind AS) 19. And has the company done that, the profits would have been reduced. So I wanted to understand why there is a deviation, so these are my questions.

So coming to your question about the JV capacity utilization, we have been running at below par capacity utilization. And I think we should be able to break even at a capacity utilization of almost 45% to 50% for the JV company when we are able to sell almost -- increase our final sales. And in terms of the employee benefits we have started doing that for all the other companies Bigbloc and its subsidiary. The JV company since it has [indiscernible] last year probably it is missed out. But in the current year, we'll be accounting for the same as required.

So was the audit observation only with respect to the JV company?

Yes, because for all other companies, we have been providing for the necessary post-employment benefits as required on a compliance basis.

[Operator Instructions] We have a follow-up question from Jay Shukla, an individual investor.

So sir, what would be the impact on our bottom line? We say we would be providing for the employee benefits in the JV entity.

So we have provided for all other entities, he just missed out on the JV entity. But I don't think it will be a huge impact because most of the employees in the JV company are fairly new and would not impact majorly on the bottom line.

Okay. So it would be a rounding error if you can say that?

Yes, we will be providing for the same in the current quarter with missed out. I'll just check with the accounts team for the same.

Okay. Got it. And sir, when we say that we are seeing higher demand for the panels as well as AAC blocks from industrial usage for building factories, et cetera. So can we say that the 15% revenue mix, which we have from the industrial side might see a rise in the coming future?

Yes, definitely. So earlier if I talk about a couple of years back, we used to have maybe 2%, 3% or 5% volume from industrial sales has gone up to almost 15%, 17% in the last couple of quarters. And yes, with the upcoming growth of the advent of manufacturing in the country, I feel we will be able to increase the share of sales in our company.

Okay. And would our margins improve when we sell it to the for share development or would it be better in case if we sell it to the regular residential or commercial builders?

So for AAC blocks, the margins will remain almost at the same level. But for AAC panels, the margins are comparatively better for selling to the industrial and all such segments as well.

Understood. Understood. And sir, just a follow-up question for the revenue side. Are we seeing higher revenue numbers or higher demand as compared to the previous year post the December quarter, let's just say, from January onwards?

So the demand uptick has been somewhat better since the January quarter because the Maharashtra elections have also been over and this is almost a peak period for construction activities.

We are targeting to increase [indiscernible] another 5% to 10% in the coming quarter. So by when, will then…

Your line is not audible?

Is it better now? Is my voice better now?

There's a lot of disturbance and breaking in your voice somehow.

It should be better now. So my point was when we say we are planning to increase in the [indiscernible] coming quarters when are we targeting to utilize the new Umargaon facility to the 80%, 85%.

I'm sorry to interrupt. Your voice is not clear.

I'll ask my question in some other form.

Now I hand over the floor to Mr. Mohit Saboo for closing comments.

Thank you, everyone, for participating in this earnings con call. I hope we were able to answer your questions satisfactorily and at the same time, offer insights into our business. If you have any further questions or would like to know more about the company, please reach out to our Investor Relations Managers at Valorem Advisors. Have a good day. Bye-bye.

Thank you, sir. Ladies and gentlemen, this concludes the conference call for today. Thank you for your participation. You may now disconnect your lines. Thank you, and have a good day.