BirlaNu Limited (BIRLANU) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to HIL Limited Q4 FY '21 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Siddharth Rangnekar from CDR India. Thank you, and over to you, sir.

Thank you, Steve. Good afternoon, ladies and gentlemen, and welcome to HIL Limited's Quarter 4 and FY '21 results conference call for investors and analysts. Today, we have with us Mr. Dhirup Roy Choudhary, Managing Director and CEO of the company; Mr. KR Veerappan, CFO; and Mr. Ajay Kapadia, Assistant Vice President, Finance and Accounts. We will first have Mr. Dhirup Roy Choudhary make the opening comments, and he will be followed by Mr. Veerappan, who will take you through the financial perspective. Before we commence, I would like to highlight that some of the statements made on today's call could be forward-looking in nature, and details in this regard are available in the earnings presentation, which is available on the stock exchanges and the company website. I would now like to invite Mr. Dhirup to come forward and share his perspectives on the performance and strategy. Over to you, Dhirup.

Thank you, Siddharth. Good afternoon, ladies and gentlemen. Welcome to the Q4 and FY '21 earnings conference call of your company. I thank you all for taking out this time to join us on this call and hope all of you are safe. During the last 4 years, we have redefined our vision, mission and core values and are in the process of transforming your company, HIL, into a global One-stop Building Material Solutions company. Dependency on revenue from asbestos business has been reduced significantly. We have grown 3x in top line and 4x in operating profitability in the last 4 to 5 years. Working capital percentage to revenue in India has been extensively reduced from 23% in FY '16 to 5% in FY '21 using lean manufacturing and financial astute policies. Well planned digital roadmap execution in initiatives like IoT 4.0 in many of the factories, Ariba, RPA, digital customer connect, Power BI, host-to-host banking, lead management, idea management, AP Workflow, planning and budgeting tool, et cetera, have all been implemented from time to time towards creating a more efficient workplace. Exceptional employee connect and treating our ONE HIL colleagues as our biggest effect has helped to improve employee engagement score significantly from 54% in FY '16 to 86% in the last year, FY '21. I personally complete 4 years with HIL this year. Last year has been a year of transformation for your company, where the organizational structure, processes, customer connect, costs and overall sustainability has been challenged towards creating a new, more efficient HIL. Let me first speak about our Roofing Solutions segment. We closed last year very well once again, emerging as #1 with a good lead in market share. While this second wave, which seems to be penetrating into rural sector, which threatens our business this quarter, as an organization, we have learned immensely from last year on how to manage this crisis. The team has come together in building a robust process in sales acquisition by digital mapping of customers, heat maps, BI models and pin code mapping, where 712 [indiscernible] have been mapped. The organization has become far more agile in identifying greener pastures and immediately rerouting its entire energy on a daily basis to areas where the business potential can be managed and reaped. We have also seen that securing 1,200 additional counters from our competition roofing last year, we have become far better in penetrating and converting a customer push -- a distribution-push business model to a customer-pull business model. The country is hoping to come back of these lockdowns soon, and we are positive of a pent-up demand to be seen in this sector thereafter. In Building Solutions segment, all actions that the team has taken towards moving to Tier 3, Tier 4 cities, to labor hutments, to COVID centers, they are all genuinely rewarding our business in a big way and substantial business coming from newer customers with far safer payment terms. Lead management tool and heat maps are being used extensively to director us to pin codes where construction activities are still on. The pandemic is currently posing a lot of headwinds as I speak, but the team is confident to come back as soon as the lockdowns are released. We've done that last year, and our confidence is far better this year. Polymer business also, which used to be primarily focused towards North and West zones earlier, have taken enough actions towards building their credibility in East and South using our Birla HIL brand. Therefore, the team is confident to redefine its focus into greener pastures and continue the growth model amidst the pandemic. Factories have really come out exceptionally well. And even when cities are getting closed, they have secured permissions to continue operations. Throughout the time, we have kept up premises COVID free, and this has been applauded by the local government when they have made surprise checks from time to time. Our central response team and local response teams at each unit have monitored the health of our HIL colleague and their families meticulously 24/7 and supported them in time of needs. Parador, our Flooring Solutions subsidiary, has enjoyed a robust quarter last quarter. With most European countries largely out of lockdowns, there was an extreme severe snow wave that Europe witnessed last quarter. Business has returned to normal. Additionally, the resumption of export activities has put our plans for global expansion for Parador back on track. Parador has been resilient and adopted very well to the situation. As a result, the company experienced growth in top line as well as bottom line despite other companies struggling. The various strategies adopted like DIY, e-business, online brand store, et cetera, have helped Parador deliver a good result. We will now shift our focus back to expanding outside Europe and target global geographies like China, U.S., et cetera, while strengthening our hold in different countries of Europe as well. This will happen as soon as COVID situation relaxes. The JV in China has had a robust start, and we are very excited for what is going to come. However, we are facing a short-term challenge of availability and price of HDF boards as well as chemicals in Europe. This is mainly on account of cascading issues due to disruption of operations of key suppliers in Europe in February, March when Europe witnessed every snowfall. This is also owing to very huge demand coming through in some of the other related products. This may have an implication on top line and bottom line in the first half of this year. However, as always, our dedicated team will leave no stone unturned to minimize this impact. At this point, I would like to briefly speak of our other prominent achievements, driven by our committed and dedicated employees. It gives me great pleasure to share with you that HIL was the third consecutive year, this year, included in the Great Place to Work listing. Today, HIL is proudly the #1 cement and building materials company as certified by GPTW for 2 years in a row in India. We are also certified as Superbrand India during the year 2021, and this will be the fourth consecutive years with this accolade. Lastly, while the pandemic still continues to pose headwinds in many of our businesses, I can assure all of you that the team is together and clear about their objectives. We have great brands backed by fundamentally robust business models and highly capable team. The challenges created by the pandemic have only strengthened our results further. The investment decision this year to expand capacity in Eastern region for Building Solution business is one such investment decision that we will take, and this will augur well for future growth. Finally, I would like to thank all the stakeholders for the continued trust and support you've had in your company, HIL. It has enabled us to meet the challenges posed by COVID-19 pandemic, and given our experience of the last year, we are better prepared. Thank you very much for your patient hearing. I would now like to hand over the discussion to my CFO, Mr. Veerappan, to take us through the specific numbers. I'm available for further questions in the later part of this session. Veerappan, over to you.

Thank you, Dhirup. Good afternoon all. I would like to thank you all again for joining us on the call today. I trust you and your families are all keeping healthy and safe in these testing times. I'll be taking you all through the financial and operating highlights of the business for the quarter and year ended March 31, 2021. Q4 was a second consecutive quarter with better performance than the pre-COVID levels. As all of you know, FY '21 started as one of the most challenging years for HIL due to the pandemic. However, extreme passion, commitment and dedication of the team, HIL was able to successfully convert this crisis into an opportunity to innovative ways of business. This has given us an immense confidence that despite greater challenges foreseen due to the second wave of COVID and nationwide lockdown currently, we will be able to continue to maintain a performance better than the pre-COVID levels. In Q4, our Roofing Solutions business grew by a robust 50% year-on-year. This high-growth also reflects the lower base created last year on account of us having missed over 10 days of operations during the lockdown in March 2020. On a full year basis, revenue grew by 22% year-on-year. We continue to expand our geographical reach in Tier 2 and 3 markets through enhanced digital connect with the customers. We also continue to enjoy the highest margin in Roofing business amongst the competition. Building Solutions witnessed a healthy growth of 23% year-on-year in Q4, with the pickup in real estate activity, as Dhirup mentioned. This segment has started making good progress. We are confident of continuing this growth through capacity creation. Happy to inform that profitability margins in this business have been maintained during the year despite having severe revenue loss in the first half of the year. Polymer Solutions business registered a growth of 94% year-on-year for the quarter and 51% year-on-year for the full year. Increased capacity utilization and demand for these products are driving this business, and we are on track to make it a pan-India offering by expanding our distribution network. Significant cost-saving measures and enhanced scale of business has helped this business delivering double-digit operating margin for the first time. Since the acquisition, Parador has moved from strength to strength. The company's revenue and profitability have grown at an impressive pace, even during the lockdown in Europe when other companies were struggling to cope with the changes. The operating margins have improved significantly during the year in Parador, and Parador enjoys healthy cash flows, underlined by a robust business model and a vibrant brand and also strong orientation on efficiencies from HIL. The consolidated revenue came in at INR 844 crore during the quarter, having grown by 31% year-on-year as compared to INR 645 crore in Q4 FY '20. EBITDA from continuing operations came in at INR 115 crores compared to INR 62 crore in Q4 FY '20, registering a growth of 85% year-on-year. The consolidated PAT for the quarter increased to INR 63 crore from INR 23 crores, growing by 144% year-on-year. For full year FY '21, consolidated revenue came in at INR 3,044 crore compared to INR 2,555 crores for the previous year and has grown by 19% year-on-year. EBITDA came in at INR 427 crore compared to INR 262 crore in FY '20, registering a growth of 63% year-on-year. PAT, excluding the income from discontinued operations, too, grew by a healthy 116% year-on-year to INR 214 crore in FY '21 as compared to INR 99 crore in FY '20. Total PAT, including profit from sale of discontinued operations, stands at INR 260 crore, a whopping increase of 145% year-on-year. HIL and subsidiary Parador, both registered healthy cash flows during the quarter. We have taken some more steps towards debt reduction by paying off debt worth INR 91 crore during Q4. Overall, in FY '21, we have repaid INR 332 crores of debt. The long-term debt in India currently stands at INR 38 crore as on March 31, 2021. We've also fully paid off the debt we had taken for the acquisition of Parador in the current year, within 2 years of time, instead of paying it off over a 6-year period. The debt-to-equity at a consolidated level stands at 0.41x as compared to 1.0 as on March 31, 2020. The company's net worth has further increased to INR 995 crore as at the end of FY '21. On March 31, 2020, the company's net worth stood at INR 743 crore. The earnings per share for the full year from continued operations came in at INR 286.12, registering a growth of 116% year-on-year, in line with our aim of maximizing profitability for our investors. HIL has enjoyed another successful quarter, driven by our hard working, innovative and dedicated teams. With this, I would like to conclude my opening remarks. I request the moderator to open the floor for questions. Thank you.

[Operator Instructions] The first question is from the line of Bharat Sheth from Quest Investment.

Mr. Dhirup and HIL team, heartly congratulation on excellent performance on all count, all the division and ROE, ROC, EPS and everywhere. Hello?

Thank you very much, Bharatji. Really appreciate your good words.

Yes. Now -- I mean, coming to this, our Roofing Solution, which grew at 22%, of course, because of low base and margin -- EBIT margin is also 23-plus. So it -- sustainable basis 2 years and looking at current term and situation what you described in rural market this year has been particularly affected, so what -- how do we really look at this business? And is there any further room to improve our EBIT margin, I mean, from here onward? So if you can give a little more color on that broader perspective?

Sure, Bharatji. See, we are #1 in India, and we have grown by 1% our market share further over the earlier year. That has strengthened our commitment to stay closer to customers, and b, rated as the best brand in the country. And I think that gives a lot of solace to us. We are not only #1 in quantity, we are also #1 in price. We dictate the best price in the market in most pockets that we are there. So that significant drive that we have made from a distributor-push led model to a retail or consumer-pull model last year, and we have used the pandemic to define this change in our model, Bharatji, is really helping us very well. And April has been a further good month for us. So that only substantiates the thought that we are absolutely on right drive we will continue to take profitable business. We'll not harp on just quantity we'll harp on quantity with a price that we want to dictate in the market as #1. And therefore, the profitability will continue. Now profitability is a deliverance of many items. So let me define a few. From an NSR point of view, we are market leaders. We have raised the price in the market again this quarter by about INR 3 to INR 4. Last quarter also, we had raised the price by INR 2 to INR 3. So this is a continuous effort that we are making. Second thing is the fiber price is definitely going to start looking down for us from Q2 because we have already reached the peak of differential pricing or a negative pricing for us, which I've been talking about in the earlier quarter. So that will help us in some way also in the material cost. The other material costs that is cement, fly ash, et cetera, are definitely going to pose threats to us, but the NSR growth and the quantity growth will continue the profitability is my great belief. There will be some brought back to the cost savings last year. We had done enormous cost savings last year. Some of it, which is relating to people cost branding cost, which is very small in roofing; and travel cost, which is also at the moment, quite less because of COVID. These will come back, but we'll bring them in very, very considerate manner. But I think, overall, we should be able to continue this margin is my view.

So sir, earlier, we were looking, I mean, industry growth of around 6%, I mean, and our growth may be a little higher. So shall we assume that we will be at a low double-digit top line will be able to grow because of pricing as well as, I mean, volume?

So when you are already #1, there is a finite room to grow unless the market really grows, Bharatji. So let me spell that out very openly. The market has grown good last year. We have seen a 9% growth in roofing markets in the country, we have grown by 14%. So we have grown far excess of the market growth. Now I would say that to be on the safe side, still consider a single-digit growth in roofing market, double-digit will be giving you a wrong projection, we will still strive to do that, but consider a single digit, but profitable growth is what I'll recommend.

Okay. And coming to the second, Parador, I mean, last year, our business in rupee term has grown, I mean, top line by 19%, 20%. But if you can give how much in terms -- in the euro term we have grown? So -- because rupee, I mean, currency fluctuation, weak -- market was really low. So how will we really look at this?

Yes. Good point. Very good point. Very valid point. Thank you, Bharatji, for asking that question, very valid point. Even if you had not asked, I would have brought it to the investors because we have always been very transparent to all of you, and we want to continue doing that. Now Parador has faced a very severe COVID condition last whole year, and you would have seen the borders were blocked. And about 50% of revenue of Parador comes outside Germany. Therefore, they definitely had to milk far more revenue in Germany. And as I mentioned, this was done through DIY, through digital mode, which they quickly changed over, and therefore, they kept up. Parador has grown close to about 9% to 10% on the top line, which in rupee term is showing to be 20%. My indication of Parador in Europe is normally, European countries are not habitual to growing more than 3%, 4%, but we will certainly drive Parador towards the 10% growth in revenue year-on-year. That's our aspiration, and even more. Parador, when we took over was, EUR 140 million. Today, it is about EUR 170 million, EUR 180 million. And my estimate is, we will double from here in the next 4 to 5 years. And therefore, we have to grow far in excess of single digit, which we will do, and we will do that profitably.

Sir, you have been always stressing that Europe -- I mean, this business is where the fixed cost is very high. So if I -- is it fair that, I mean, if we continue to grow, I mean, so EBIT growth will be more than the top line growth? And what kind of improvement, rather, we would expect? Because this year, I mean, we've already reported 7.5% EBIT.

Sir, you are absolutely right. Parador's profitability will grow as we grow the top line because the fixed cost is big. Up to top EUR 200 million line, euro terms, they have the capacity. Beyond that, we'll have to add more CapEx. There will be necessity of some OpEx additions from time to time because we need teams in different countries as we try to grow, but profitability definitely will come more with top line.

And sir, last question, if you permit?

Go ahead.

Sir, do we see any threat on the mining of the fiber, I mean, ban coming in any of a country from where we are procuring the materials? Like what we saw, I mean, between -- temporarily in Brazil?

You may keep your antennas open, sir, because very difficult for me to judge from here. I go with what my partners in Brazil or my suppliers in Brazil say, but they do not see any risk at all, and I'm going with that.

[Operator Instructions] The next question is from the line of Baidik Sarkar from Unifi Capital.

Mr. Choudhary, congratulations to you and the entire team in the last few quarters. The environment has been very difficult, but HIL's demonstration of strength has been very apt. Congratulations to you again, sir. A couple of questions. Starting off with domestic roofing. The environment in the roofing sector seems to be rather conducive for the entire ecosystem. And I'm just talking about your other listed peers here. Could you help us understand how much of this is driven by core rural demand? And how much of this is actual market share gains? And what might be the status of the smaller regional players from whom you might be taking market share? And how do you expect that trend to continue?

Mr. Sarkar, first of all, again, thank you very much for your kind words. The team really would be happy to hear them. Coming back to your Roofing segment, sir, our segment is primarily on the rural sector. So everything we achieve is from the rural sector. And therefore, I owe everything that we have achieved to that sector. We have been able to achieve this by both top line growth as well as improvement on market share. So the tonnage as well as the price realization. Market has grown last year, so that was favorable to us. Even if we had lost about a month of sales due to COVID closure in April, there was a huge pent-up demand that happened, and that has helped. Roofing demand is casted by a good rain in the earlier year. And therefore, the crops are good, and therefore, the available cash with the customer, with the farmers are better in the subsequent year, and then they buy a lot of roofing product. So going by that trend last year, the rains have been very good, crops have been very good all these time, and I'm hoping -- plus a lot of government initiatives have happened. They have got money in their banks from the central government. All of that are very positive. There is a extreme bullishness in the rural sector, and that should definitely help us in Roofing business this year. While I say that there is a dampening factor, which is COVID because for the first time, the second wave, as it seems, is getting into the rural sector. What havoc it will create in the coming months only God can know because, I can't foretell that. But the I'm confident that as the closures of the state, that means the state closures as they have announced today in many of the states open up, the demand is going to flush back and the pent-up demand will happen again this year like last year, right up to the rains, and we will be able to see a good season once again this quarter.

Okay. That's helpful. How is the pricing environment in general? We understand steel prices are up quite a bit, and though not like-to-like comparison. Do you guys think that might have played a bit in shifting consumption patterns from probably steel to asbestos?

Sir, I do hear a lot about the steel to asbestos, but from my little 4 years' experience, I can tell you, they are quite different business segments. Customers who prefer steel go for steel. Steel is almost double the price of asbestos, and therefore, to assume that someone will go for asbestos just because steel prices have gone up , is a little difficult for me to say. But however, if there is a certain crisp of customers who are in between a selection of steel and asbestos and would like to draw to asbestos because steel prices are going up, that will definitely help the asbestos segment if the steel prices continue to go up. Second, of course is it gives us a little bit of power to raise the prices further. And that we are trying to do at every significant opportunity, and HIL leads the price, I mentioned. So all in all, I would say steel price going up, good news for asbestos.

Sure. And what's the utilization on sheets today? And is there any update on the green roofing grouping product? I think the challenge here isn't as much product chemistry, but rationalizing costs to manage asbestos cost? Any update there would help. And if I could just squeeze one more in. I didn't quite understand your comment on the negative spreads emerging from Brazil. So if you could just fundamentally explain how that will work out?

Sorry, your second point, negative, what was that, sir?

No, I think you hinted that raw material fiber import prices from Brazil might begin to slow down from -- might begin to...

No, no. Let me have -- no. All I said is Brazil was -- we are buying from Brazil for almost 3 quarters now. Initially, there was a a little bit of a negativity because we were not getting the right mix of fiber from Brazil. That's exactly what I was talking about in the earlier 2 quarters to all of you. That has now settled down. R&D has worked very well for us. And therefore, from quarter 2, we would definitely see benefits coming on fiber to us over last year quarter 2. So that was -- so it was positive remark on Brazil imported fibers for HIL. That was one. Now what was your other question, Bharatji -- sorry, Sarkarji?

Sure, sir. Utilization...

Utilization, our capacity in roofing is about 1.1 million metric tonnes in a year, and we are far away, we are about 77% utilization at the moment. We are using part of that capacity for trials and tests for the non-asbestos roofing Fortune product. We now have a dedicated Fortune line in Faridabad, and that's helping us immensely. We've started moving good Fortune new product that is through the humid cure product into the market. And hopefully, this business is definitely going to outshine big ways in the next 3 to 4 years time -- 2 to 3 years time.

The next question is from the line of Jigar Shah from ICICI Securities.

Congratulations to HIL for the good set of results. My first question would be on Parador margins. You have improved the margin from 7% to almost 12% in FY '21. So can you highlight what are the key reasons for this kind of margin conversion in last 3 years? And what could be -- yes.

I'll be happy to answer this question. See, when we took Parador, we knew -- I mean, it was a 175th company that we had looked through in the M&A circuit. And it ticked all the boxes because I wanted a company rich on technology and brand, low on profitability. You'll be amused to hear that I wanted a company with low in profitability because the multiples are then easy to be absorbed. So 7.5% was the EBITDA multiple at that stage for this company. And our biggest and the first important focus apart from getting both the companies together culturally as well as financially was to look at profitability of the organization. So we had dedicated teams of Six Sigma and lean manufacturing planted in Germany who are working with our German colleagues, enhancing their skills and helping them to realize the low-hanging fruits. We've worked very well with them on material cost and try to reduce that cost. We have looked at other variable costs. Cost saving was a big drive like in HIL India. We did similar things in Parador last year to try and bring that through. We've also got some help from the government in way of offsetting the manpower cost during the times when other companies were not fully running, and therefore, we could get some benefits. So that's a very small element, though. So all said and done, all elements that goes into building the fixed and variable cost of an organization was looked at minutely towards enhancing this. So the enhancement has come from within the organization. This is a good profit realization that the organization can have, provided we don't have a hit on material cost and those kind of stuff.

And going forward, what would be the outlook? Will you be able to continue the EBITDA margin of 11%, 12%? Or you mentioned that...

Sir, I think for a safe consideration, I will say, consider for Parador a 10% EBITDA and a higher single-digit growth, but the team will try to do far better than that.

Okay. And also, sir, you mentioned a lot of IoT 4.0, Six Sigma, lean manufacturing. You're doing a lot of things in India in all this technology and processing. So -- yes, digitalization. So would you like to highlight any specific things where you will be able to increase your efficiency and margins going forward due to all these new initiatives?

Sir, these initiatives are well-proven initiatives in the industry. So we are not attempting on them as the only organization. But anything that we attempt on, we do it through a very, very stringent norm of selection, where the ROIs of every investments are first looked into before we step into it. So I can, in a global way, commit to you that every initiative that HIL is taking they are very confident of the returns from these initiatives. Now let's take up IoT 4.0. IoT 4.0 is nothing but having a very transparent factory, where you're able to see end-to-end of the -- on the factory. And therefore, the machine utilization, even right up to maintenance, preventive maintenance of the machines and everything can be seen on a palm trough. So we've got this done in 5 factories, and we are getting this done in many other because it's giving a realization to the bottom line. Similarly, you look at Ariba, it has given very good saving because it's a reverse option tool, and it's helping us from -- so I can take you through each one of them, and everyone has a very, very clear mandate for a cost savings. Idea management is nothing but idea from our own colleagues on how to improve the cost base. And we have got about 1,200-plus ideas coming from our own colleagues, which has delivered a cost saving drive, which we have taken last year. So all of this are all towards that end.

So can you quantify any specific cost saving like number of -- amount or something like that, that you have come out of this...

Very -- I was not prepared for this question. Very difficult to answer off hand, sir. We can -- we will be happy to take you through in case you have a specific question on it.

No problem, sir. And my last question would be on Parador, what kind of return ratios you will be doing at this product? And...

Sorry, what kind of?

Return ratios, ROCE.

Oh, ROCE of Parador. We should be looking at 14% ROCE in Parador, and I think we will only enhance this further as we go.

The next question is from the line of Naresh Katariya from MoneyCurves Investment.

Dhirup and whole team, I know it's customary to say congratulations with really exemplary performance. So fantastic and congratulations. My only question is on the $1 billion aspirational vision, which was mentioned first time in our presentation today, very happy to note that. So I wanted to understand elements of strategy, what we have planned to reach $1 billion? Of course, I got part of the answer, when you said our vision is to double from EUR 170 million to EUR 180 million, the Parador piece. What are the other elements? Because I don't think Roofing is going to grow 150% -- 140% to reach INR 3,000 crores to INR 7,000 crores, INR 8,000 crores. Would it mean we could look at some acquisitions? Or will it only be the existing segments? So just wanted some color on what's the roadmap towards 2025 $1 billion.

Thank you, Naresh, and thank you very much for your kind work. Naresh, $1 billion is my dream. And unless we have a dream in place, we can never move forwards. And $1 billion, let me just tell you, was a dream made by the team together when our organization wa $140 million. This was far before Parador was taken. It was just after I moved into HIL in the year 2019, we made this dream. And $140 million to $1 billion was flight that we wanted to take by 2025, 2026. We are happy that we have come through 3x of our revenue. So from INR 1,000 crore, we are now INR 3,000 crore. From INR 3,000 crore, we have to reach INR 7,000 crore. I know Indian rupee may depreciate further, maybe INR 7,000 crore would become further steeper with $1 billion, but let's take INR 7,000 crore for the sake of discussion. Indian operation is to double from here, Parador is to double from here, straightforward. Now Parador, there will be lots of things that we'll be doing. We will be moving step-by-step into more countries in Europe strengthening our sales in there, opening up own organizations in these countries because each 1 of them work differently, customer preferences are different, product preferences, consumer demand, DIY, digital, everything is different in every country of Europe, even though it's collated as a very small geographic location. And language plays also an important role. So localization is very -- customer service requirements are different in Europe in different countries. So we'll be walking into that. We are also looking at North America. It's just at the scratchy side at the moment. We have looked at joint venture in China. I'm very hopeful that the Chinese joint venture, which delivered about EUR 3.5 million last year. Should be able to do about EUR 20 million in the next 3 to 4 years or even more. So there will be a growth coming from there. So Parador will grow. In India, Pipes will grow. The Polymer division, which is about INR 360 crore today should become more than -- INR 380 crore will become more than INR 1,000 crore that's for sure in Pipes -- in Polymer. We are looking at the building material also. That will also grow. So for instance, the new CapEx in East will add another INR 110 crore in 2 years, 3 years' time. Similarly, further CapEx wherever that's needed to strengthen our building materials, we'll do it. We're trying to bring in some new products into the foray, and you -- we will talk about that as we go forward and establish that. So those are the things. There may be a delta of INR 1,000 crore here and there, which will need to be bridged through an M&A. And I'm not losing out my attention on M&A because I believe there is a 1:1 debt equity that 1 should look at for a harmony of the organization. And we have -- we were 1:1 when we secured Parador. Now we have come down. If you leave out the European debt because that is at 1.8% and is easily being furnished by Parador, we are only at 0.16:1 debt to equity at the moment. There is a good bit that we can do. Let me also remind all our investors and owners of HIL that whatever debt was taken to secure Parador -- to acquire Parador in India has fully been repaid. So Parador now is free to you. And similarly, any asset that we take, we will be working on that direction that any debt we take, we will be furnishing out of the proceeds of that organization. And together, we are going to strengthen the company. So that's the dream.

[Operator Instructions] The next question is from the line of Viraj from Securities Investment Management.

Congratulations on good set of numbers. I just had 2 questions on Parador. If you can just provide some more deeper dive into what is our share now in core markets? So we've seen quite a healthy growth in FY '21, so -- because of the initiatives you've taken, so what is your share now? And what kind of opportunity or market size we are looking to -- is there in rest of the Europe? So any color you can share on that? Second is, if you look at the difference between consol and Parador balance sheet, that is to INR 100 crores, INR 120 crores odd cash on Parador balance sheet, I mean, debt as well. But there's a sizeable amount of cash. So do we have -- I mean, if you can just provide some color, what kind of expansion plans in terms of CapEx or any other requirement you may have in Parador for FY '22-'23? And what do our plans for the surplus cash there?

Virajji, thank you so much, again, for your kind words. Look, Parador, I'd just mention that every country by country, we will be working out the expansion plan. We have got a slight setback of about a year because of COVID because people couldn't go out of in their home countries, international bodies were steel, they were worried about COVID. Vaccines had not been given. So naturally, we have got a 1-year setback, if I may say. But our intentions are very much there, and the directions are absolutely clear. We want to grow in China, we want to grow in the Nordic countries, we want to grow in Spain, we want to grow in France, we want to grow in Switzerland, we want to grow in Austria, Germany, we want to grow in United Kingdom. So it's very, very chartered. I think the team has worked out very clear direction towards these growth in the next 4, 5 -- 3 to 4 years' time, the investments that will be needed in way of building our team, which will be more operational. Wherever there is a need for a small CapEx, we will not shade away from that. The cash in Parador is a creation of a good operational process that has been created there, and the team has been energized. This year is looking tough, as I must say that quarter 1, quarter 2 in Parador will be very difficult because there is a very huge pressure on HDF availability, which is a board, which is not available in Europe. The prices have sored through the roof. Lumber prices in Europe is scaling through the roof. Chemical prices are scaling through the roof, which is completely unimaginable. So we are trying to live with that, but one is the price, one is the availability that's putting a bit of a break to the revenue growth in Parador in quarter 1 as we see and maybe to some part of quarter 2. But we will make it up. This is a short term. Long term, Parador is absolutely planned out, and we are going to do all these executions as we go. Part of the cash will be used for them. There is a standard CapEx that we use in Parador. Last year, we did allow them so about EUR 5 million, EUR 6 million will be towards a normal CapEx that we'll be doing this year in Parador, where the bottlenecks will be released and part of it is maintenance CapEx. So overall, it's a pretty well planned out 3 to 4 years engagement in Parador, which will take us further.

Okay. Just one follow-up on this. Since you have a very clear defined growth map for Parador, can you kind of just give some indication in terms of how big each of these markets are when you say the rest of the Europe? And is this kind of more fragmented market? And kind of looking to capitalize on that or any color on the market structure as well?

These markets, each country -- and if you've worked in Europe, you would know each country is absolutely different. France looks more on aftersales than presales. Spain looks at more presales. They are looking at Spanish people there, who can speak the language and they have trust in that. Switzerland is far more globalized, but Nordic country is entirely different, their requirement for product is also different. They want wood flooring, absolutely. They don't look at LVP or vinyl products and all. So every country in Europe have a different requirement, they go through different channels, some of them go through big dealers, some of them go through DIY. The others are going through the commercial segment, as we say, for each project, so there is -- there are big influencers who control 6 or 7 big projects and you are supposed to go through them. So there is a mix of leverages or levers that we have to utilize to grow in each of these countries. And that's exactly the ground route that we have to follow, and we will do it through that route.

The next question is from the line of Shantanu Basu from SMIFS Limited.

Congratulations for the wonderful set of numbers. I have 2 questions. The first is with respect to Parador. So sir, can you give me the breakup in terms of sales in Germany and Austria, rest of Europe and rest of the world for the full year for Parador? And the second question is with respect to roofing. So I want to understand how -- I mean, whether the humid cure technology product has picked up? I mean has it been released in the market commercial sales purpose or is it in the seeding phase?

Thank you, Shantanu. I'll call you Shantanu. You can call me Dhirup. Shantanu, thank you very much for your appreciation. First of all, you'd asked about Parador. And I must say that in Parador, the breakup of revenue historically has been Germany and Austria, which is their home country because we have factories in Germany and Austria, contributes 50% of the revenue, 25% comes from Europe and 25% comes from rest of the world. That we've seen historically how Parador has been. Now when you come to last year, there has been a growth in German business because the borders were sealed, so naturally, they couldn't travel, the product couldn't travel enough. So rest of the world came to a mere standstill. So 25% of the revenue was kind of washed out because of COVID for most part of the year. The second half of the year saw the Europe part growing well, but and the credit is given to the teams that we have still grown in Parador amidst all this challenge because we have grown in the home country, and we have been able to pick up additional markets in Germany and Austria and thereby grow. So Germans and Austrians were sitting at home, they were not going in for their holidays, and they were spending in their home decors or refurbishment, if I must say and looking at DIY stores. And Parador was the only flooring company, which was selling through DIY and digital route. So that supported them to buy from Parador. And therefore, the entire revenue got benefited by Parador. So that's how it is today. Does it answer your question?

Yes. It does. I mean but if you can just broadly give me the numbers, just to understand how FY '21 was vis-à-vis other years? So the Germans and Austrians...

So there was an increase. There was there was a 10%, 12% increase in business in Germany and Austria and the rest of it came from Europe. Rest of the world was almost a minimum. China did about EUR 3.5 million. So that's the story last year. This year, as the borders open, situation should be better. We are facing a bit of problem in raw material at the moment, but that's only a finite issue, which we'll sort it out. Now coming to your second question was on roofing. So the humid cure has tested is coming out to be very well because we have started this from October last year. And actual production started in January this year from our new plant in Faridabad. The product looks excellent aesthetically as well as technologically. The strengths are wonderful. It's far, far superior than the earlier product also that we have made for non asbestos. So it is only enhancing our non-asbestos deployment. We have started now seeding it in different parts of the country. We have already sold 7,200 metric tonnes in the last few months to different institutional customers and by October this year, we have given it -- the time to ourselves to get the site responses on this. And if it looks good, then there is nothing that will stop us from going full out on this product. And this product will be the future for HIL, sir.

Right. Right. Okay. So you have sold 7,200 metric tonnes in -- I mean, in the current financial year? Or -- I mean how...

In the last 3, 4 months time, we have sold that, sir.

Okay. So basically, in Q4?

Q4, yes. And April, if you can count that. Yes.

Yes. Okay. Q4 and April, okay. You have sold 7,000 -- basically seeded 7,200 metric tonnes, right?

Yes, sir. Yes, sir. The technology looks wonderful. We've got external consultants working with us who are world-famous consultants in non roof -- non-asbestos roofing solutions. And we have also got this tested at Japan, and they have sent a very positive report to us. The IP has been registered. And PCT is being done in multiple countries outside India because we want to take this product outside the country as well.

Right. Sir, then when will commercial sales begin, commercial production and sales?

So when we are talking about sale of 7,200, they have all been commercially sold. So if you're talking about when will the big scale sales start happening? I think give it time up to October, and then we will start doing it in big number.

The next question is from the line of Amit Vora from PCS Securities.

Congratulations on the great set of numbers. Most of the questions have been answered, just a couple of things on the CapEx. So what is the total outlay that we are going to spend for the upcoming CapEx in Odisha?

Amitji, I hope you are doing well and your family. Thank you very much. It's INR 82 crore that we have planned to spend on the East project.

Okay, sir. And if I recollect correctly, you mentioned that the peak -- at peak utilization, we would be able to generate around INR 110 crores from this unit?

That's right, sir. And it will deliver about 150,000 meter cube of blocks, and that's about 20% enhancement in the blocks capacity. It will deliver about 35,000 metric tonne each of panels and boards, which is roughly about 50% enhancement on capacity for boards and panels.

Sir, any target that you have in mind by when you would want to reach peak utilization for this one?

The commercialization should be same time next year, sir, quarter 1 next year. And -- because at the moment, we are at the land acquisition and because of COVID, things have slowed down immensely. So we'll have to give it time. Give that another 1.5 years, and we should be at peak.

Great, sir. Great, sir. One more question is on Parador, again, you mentioned that you would be looking at North America as a market. So is there anything that you are doing at the moment in North America in terms of Parador?

Honestly, negligible.

Okay. So that...

We are looking at we have 2 toys like we had in China. China was the first JV I settled in immediately after we bought Parador because I had worked in China also. So I knew the market a little bit. In America also, that's where I've run a plant for almost 6 years, North America. Look, setting up your own factory or your own team there with a lot of people there on ground and huge cost is not possibly the way I would like to look at. So I'll again look at a joint venture partner, which shares my risk, and they have certain people on the ground and we put additional people on the ground, stranded the team, spread the cost and enjoy the revenue and the profitability. So that's the model I would like to walk into North America. So we're looking at -- we have already shortlisted 1 company then who are present in both North America as well as in Canada. So let's hope everything going for this JV should take shape sometime soon.

The next question is from the line of Subham Agarwal from Aequitas India.

First of all, sir, I would like to congratulate on posting such a good set of numbers in such tough times. And I hope the entire team of HIL is doing well. Sir, most of my questions have been answered, but I have a question relating to roofing. So given the current situation in rural India, which is our main market, and you did mention that April was good, but May is the time when most of the COVID had spreaded in rural India. So what has been your experience till now in May when it comes to demand? And if any of our manufacturing unit being impacted either due to lack of oxygen or lack of labor, if you can give some views on that part. And also, I would like to know the volume growth year-on-year in Roofing division?

So Mr. Agarwal, thank you very much for your kind words, again. Roofing, April has been good. We have, as I mentioned, look through a far more deeper last leg connect in open last year, which was a change in strategy. And therefore, even in May, while things are not happening in the ideal way that you want, the season hasn't been able to set in because of COVID fears and other controls. We are hopeful that we will be able to make up in the coming 1.5 months after the COVID relaxes or the controls relaxes. So I'm still very positive. And on account of that, what we have done is, we have taken special approvals and kept all our factories running. Therefore, the inventory is getting built up, has been built up substantially to cater to a pent-up demand when it comes before the rain. So I'll keep my fingers cross. This is a durable product, and therefore, there is no issue if, let's say, the pent-up doesn't happen, and we are stuck with a lot of inventory, we will have to then manage the inventory in the Q2. But it's worth a risk, and I wanted to go for that. So coming to your factories, none of the factories have had a problem with COVID at all. Yes, employees, many of them have had problems with COVID because of social aspects where they've got it from their relatives or other social medium. And that is something we couldn't avoid. But we have taken full caution in the factories, and we have kept all the COVID-infected colleagues as pape as we could by all kinds of measures, including hospitalization, oxygen, beds and everything. Since I'm on the Board of the CK Birla Hospital in Kolkata, the CMRI and the Jaipur Hospital, so it also supported. And also the group's philosophy has been to support employees. So we've gone out of the way to support the families and the employees.

Right. Sir, and the volume growth year-on-year that we achieved in Roofing division?

I don't have that number immediately. Maybe I'll get back to you.

14%. Dhirup, 14%.

Sorry?

14%.

14%. Thank you. Thank you, Veerappan.

And lastly, on earlier calls, you had mentioned that you are working on some of the value-added products, so any breakthrough that you would like to share, if any?

Mr. Agarwal, again, because of COVID, it's taken a little bit of a backseat, give me another quarter or 2, we will come with good news to you, sir.

No worries, no worry. And...

But the focus is on completely. We -- HIL is a One-stop Building Material Solution, it's not a asbestos roofing solution anymore. In fact, the revenue contribution from asbestos, which was 78% when I joined 4 years back, is now only about 30%. The rest is non asbestos. So more and more, you will see while asbestos roofing will grow, the contribution of asbestos will continue to come down, thereby making it a far more sustainable company. And all of these new initiatives will help, sir.

Right. And lastly, on the Polymer division, what was the capacity utilization that we achieved for the last quarter?

Sir, in polymers, we have been able to do well. So we have 3 factories, as you know. One of them is in Faridabad, one is Hyderabad and one is in Golan. The Faridabad factory was absolutely fullest, Hyderabad was also fullest, Golan was about 45%.

The next question is from the line of [ Tarun D.S. ], an individual investor.

Congratulations on an excellent set of numbers. Am I audible?

Yes, [ Tarunji ]. Yes, absolutely. And many thanks for your kind words.

Yes. So I'm a recent investor. And I just first wanted to understand the landscape of the Aerocon business. And if the pent-up demand and the commercial demand springs up, let's say, in 6 months or so, so I was just trying to understand how do our products, the both wet and dry, existed in the real estate landscape that we can look at in the next 3 to 5 years that can happen?

Okay. So you're talking about Birla Aerocon, which is the Building Solutions, [ Tarunji ]?

Yes. Yes.

Okay. So first of all, welcome to the family of HIL. And we hope you will feel very happy with your decision of being associated with this company. Building Materials has wet walling solutions and dry walling solutions. So when we talk of wet walling, we are talking about the AAC Blocks, the -- which is our biggest product. The market is half organized and half unorganized in India. And when we look at the total market size, HIL has about 18% to 19% market share. That's because there is a substantial bit of unorganized also, which we are unable to tap. We are #1 in the country. We are the best-known brand. In fact, blocks are known as Aerocon blocks in the market. They are not known as AAC Blocks or anything else because Aerocon is a brand well-known in the market. The Tier 2, Tier 3 cities are now growing in construction. And therefore, we see that the block requirement is increasing far more in the Tier 2, Tier 3. We have our presence in South, West and North, but we were completely not there in East. And that's the reason we are now setting up a new plant in East. This business is all about adding incremental organic factories and then adding to your product and doing the sales. It's also about creating a market need for block, which our technical expert team -- so there is a team of 11 people in technical experts who walk across the country and work with the influencers and the construction guys and help them to understand how to get benefit from our product. So we do mocks at various places for them to understand this better. So that's exactly the engagement that we do. We do our engagement with masons, with the influencers, with the construction from companies and try to promote this product. So that's about the blocks part of it, panels and boards. So we are hardly there in boards. Our main business is panels. And panels, feed about INR 60 crores, INR 70 crores business, and we are about a 60%, 70% also, that's about INR 120 crore business totally in India. We have the majority share there. That's also a very high profitable business that we have. We are, again, present in Hyderabad for panels and in Faridabad in panel. So this new bid that we are trying to create now East will all go well for our Eastern zone panel requirement. Panels, we have suddenly realized, can also get sold for the labor hutments and the COVID center, and we have realized this last year, and we have pushed big numbers, about 42% of our revenue has come through this sector, which was earlier not there in our business cycle at all. So there is a big scope for panels to improve, and we are going to do that. Boards, we are not fully into that. There are other competition of ours who are doing much better on boards. We are not so much into boards. But the new plant in Faridabad, which we have set up for Fortune can also make boards, and we are also trying to make boards out of our existing roofing plant in East during the off-season. So during off-season, the roofing plants are not fully utilized, therefore, adding some CapEx there, we can make boards out of these plants, and that's exactly the route that we are trying -- going to test in the eastern zone. So this is a business for you. This business side will be about INR 350 crore at the present capacity. And as we keep on adding capacity, it will further improve. There are some added products that we are trying to bring in also along with this, let me take a pause and come back to you in the next couple of quarters with the added charts.

That's really helpful, sir. And just a small question on Parador, that as I can understand that we were able to easily utilize the opportunity because we had an online setup and we were able to use the e-commerce and the DIY channels very well. But I was just wondering that as Europe is opening up now slowly, so could the off-line market come back and take that pie that we have worked hard and taken in? So how do you see that happening when the off-line retailers are also back in action? So if you could help with that?

Sir, as things -- [ Tarunji ] as things open up, my worry is far lesser. This was more towards enhancing that the revenue that I'm losing from rest of the world market, which is 25% historically, we are able to fetch through home market. That was the need then. And this has helped us. This was rather has well during the time of need. If that demand goes back to original seed, first of all, I don't worry about it. Second, because I'm going to go to other areas also, so I'm going to expand in other countries also. There's a good bit expansion that is there in the offering. We've not been able to do it that well in Parador historically and HIL will support Parador in every way to do that. Second is, you look at German, so when we have discarded one of the -- so there was a 3-step sales: distributors and dealers, retailers and then the customers. We have shut that to a DIY and the customers. So a lot of margin Parador has got, and we have been able to give very good prices at DIY. So the customers ultimately will look at what is beneficial to them. Also, the online brand store that we have utilized that has a software where you are able to download the software into your mobile. Any one of you need to understand that, please get across to us. And then you can look at your own floor and with the existing furniture, you can select various different versions of Parador flooring and see how it looks on your floor, so it's so easy for customers to then go ahead and order. And I think they are not going to give that away too easily.

[Operator Instructions] The next question is from the line of Manish from Fiducia Capital Advisors.

Fantastic performance and not just this quarter, but like over the last 4 years in the time that you've kind of walked in. And you've like really transformed the organization from what it was to where it is now. And with aspiration of $1 billion revenue by 2025, I'm very confident that we'll make it there, and positively.

Sir, I'm not able to -- sorry for interrupting, but I'm not able to hear you very clearly.

[Operator Instructions]

Yes, yes. Is it better now?

Yes. Yes, it's far better. Thank you.

So I was basically complementing on the performance, not just this quarter or the year, but like over the last 4 years, the way the organization has been transformed. So now my -- I wanted to take an understanding that HIL has a leadership position in the various businesses that it has taken up, whereas the new business of Pipes is a business which is already there in a crowded space where there are already very strong players, so what kind of an aspiration? And what is the edge that we have there in kind of -- in making a play in this business, you also said that you are taking to INR 1,000 crore revenue. So could you just give me a kind of understanding about our play in the Pipes side of it?

Sure, sure. With pleasure. So Mr. Dhariwal first of all, you've been very kind. But yes, 4 years has been good trend for us and HIL has enjoyed. And I must say that there is a lot to achieve. So we are just at the brim of a further expansion in the organization. And I think the whole organization enjoys this profitable expansion. Coming to Pipes. Pipes is a very, very populated place. You are right, there are some very big names there in Pipes who have created these names over 20, 30 years, and we are just there. We've just started. So I think 3 things works in Pipes, as I understand it: a, the brand. Because pipes, even though it gets hidden behind them wall, consumer wants to know what pipe it is. [Foreign Language] for instance. It's about the Astral Pipe branded with Salmanji in West. So they want the brand. Birla name is a very big brand in India, whether you like it or not. And we have Birla HIL brand to our pipe. There is no other Birla pipes in the country. So that gives us an edge over others, and that's the brand pool. We have to only build it in a fashion, and that's exactly what we need to do. Second is product quality. It's so given, but the product quality has to be par excellence. Ashirvad I believe, are #1 in product policy. And our product is absolutely at par with them. So this is confirmed by the market experts, and therefore, we are very happy to bring a product to the market, which is highest of the quality. Third is people. It's the team, it's the spread, it's the connect that you should have in the market. It's all about plumber engagement. It's all about getting to know what they want. It's all about giving them what they need. And we are doing exactly that. We are not looking at big distributors because they're not coming to us. They are already with the big guys and why would they come for us for a lower volume. So we are going to smaller guys going to the plumbers, developing with them, working with them, lot of plumbing exercises are being done together. During the COVID, we have gone out of the way to support them. I'm not saying we're the only one, maybe others have also done it, but we are definitely doing the right way. We have moved -- our strength was North and West because we have 2 factories, 1 in Faridabad, 1 in Golan. We have now moved to South and East. South, we have created another factory in Hyderabad. And East, at the moment, we don't have a plant, but we are supplying out of our existing factories. And we are developing even B2B. We are trying to engage so B2C. We already have a dominance by way of the spread that Roofing segment gives us in in the Tier 3, Tier 4 cities. And believe that Tier 3, Tier 4 villages, there is 1 store, which sells everything and pipes is amongst it. So we have that benefit. We have the spreads, we have the brand, we have the quality, we have now a good set of people, and we are growing every day on that. So I think that's what's giving us the true strength of pushing pipes. Putty is another product which works very well with pipe. There's a 42% cohesion that we see in both the businesses. So therefore, bringing putty into the foray and joining it with pipes has helped us to secure much bigger accounts, distribution accounts because they get the volume, and that's also helping in the freight. So we have grown about 63% last year in -- 64% in Pipes and 51% in Polymers overall last year. And I think that's been a month-to-month work that has been done. So every month growth over the last month. Team is fully motivated. We have everything that is needed. We are doing small brand exercise. If you're in Delhi, you would see all the 3-wheelers having HIL -- Birla HIL brand behind them. So we are doing a very focused way, but very, very careful about the spending, but doing it the right way, sir.

Another question that I had was, actually, we have global aspirations, and we are a leadership player in the segments that we are. And we also recognize the importance of R&D. So 1 I understand that the R&D is being done on the roofing side, where we have come out with this, what is a product like...

Fortune. Yes. The non-asbestos Fortune.

Yes, Fortune brand right, the humid cure, humid cure. So meaning, on the R&D side, I mean, how do we kind of rank at a global scale at a global level? Meaning are we looking at some patents? Are we looking at some kind of -- some cutting-edge thing where -- which basically helps us in, 1, ensuring and strengthening our #1 position? And also maybe looking at some sort of expansion, global expansion or something?

So first of all, R&D is a very, very strong hold that I believe in, we weren't as strong 4 years back as it is today. And Fortune is an entire development of R&D with absolutely no collaboration with anyone else. And I'm telling you this is a product the world doesn't have. And therefore, we are able to get the IPs very smoothly done because no one is there to challenge us. And this product is going to make a mark in the Roofing segment. R&D is also supporting immensely for Pipes because a lot more recipes are being worked on lead free pipes that we want to -- we are delivering and continuously working on cost savings on all of that because all of that has impacted deliverance to bottom line. But now we have a very strong R&D in Parador also. So for the products of Parador, we have a very strong R&D, where almost 1/3 of revenue in Parador -- or rather 50% of revenue of Parador every 3 years is new and made by the R&D, so which means we're continuously developing newer products in Parador, which adds to the value and get us better profitability and market penetration. So in blocks, for instance, we are looking at bullet-free panels and blocks to be made for the military application and the joint venture project with IIT is going on. There are lots of things that we can do further. I know this can be further enhanced, but we want to see R&D as really #1. We can always catch up again. If you have any other sense on R&D, we will -- I love to learn from you, sir.

The question is from the line of from Naveen Bothra from Shubhlabh Research.

Yes. Dhirup sir, well, excellent performance, congratulation.

Thank you, Naveenji. Thank you so much.

My question -- almost all the questions have been answered. Just a couple of questions. One is regarding our aspiration of $1 billion by 2025-'26. You have almost spoken a lot of things about this thing. So going ahead, new product you discussed. But in the last call, you said that we may come up with tanks foray and all these things. So in the piping business, some [indiscernible] are there, sanitary ware, faucets or water tanks. So if you can say something about this -- all the new products and all these things? Because when we see HIL, we can make a complete house with all the products of HIL. So some gaps are there like water tanks, sanitary ware or faucets. In the flooring also, we don't have tiles. So if you can talk about all these things? Because all these things are going to be complementary to our $1 billion aspiration.

Naveenji, it's such a wonderful thing to hear from you because what you are not challenging today is the performance quarter-on-quarter, but actually helping me to think forward for the $1 billion. Thank you very much, sir. That's really your company. I would love to hear from you on a personal call someday. But let me quickly answer this for the benefit of everyone. We have done an extensive work on sanitary ware on faucets at 1 time. And we found that we were not able to get a good business in India, which was ethically run and the multiples were well within our reach. So it's not that we have left it, but we have not found the right company, I would put it that way. And this is not something that I can grow from 0. I would rather have to take a company and grow it on that. Tanks is something we are definitely looking at. Tanks has a very big element on freight, therefore, it has to be on a localized area. We are looking at that concept, and we will get you more details in the next quarters as the business takes some shape on that. Tiles, again, we've had a tensive look, sir, and we have not found a company which we could possibly invest, which will ethically run at that stage. But this is now dated this is about 3, 4 years back exercise. We are happy to take a look at it. And if you have any other advice on that, we'll take it. But Parador is a brand, which is #1 in Germany, and we would not bring in any product into Parador, which in any way dilutes the brand factor. So we'll be very conscious of the brand. And it's getting us high NSR, therefore, the customer realizations are better. Some big names like Hadi Teherani and others who are world recognized interior designers are collaborating with Parador, and therefore, that brand part will be of extreme important. On pipes, we are definitely looking at additional pipe variants. So for instance, we are in CPVC, UPVC SWR column and pressure pipes. We are looking at HDPE, if that is a possibility. We are looking at PEX, if that is a possibility. We are looking at different sizes of pipes. Agricultural pipes, though the margins are low, whether that's an area we should walk into? Different types of fittings. So we have enhanced the fitting range immensely. And as we are speaking, the range is getting further enhanced. So that will continue in our dream towards making pipes a big game.

Okay. So if you can talk a little bit more about the tanks product it because we have AAC blocks, we have bone, we have putty. But tanks foray you spoke a little bit in the last call. So if you can throw some more light, can we hear...

I will, sir. I will. I will. Please give me a quarter or 2, I will get back to you.

Okay, okay. And regarding the Parador business in India because right now, we are not seeing that much of Parador in India. So if you can throw some...

Sir, it's very difficult, sir. Sir, it's very difficult. Last whole year, we've not been able to do much meaning in Parador India because new projects who were looking at high-end flooring was not at all there last whole year. So it is something that we have -- for instance, we have acquired a wonderful 5-star Hotel in Sri Lanka for Parador, but in India, we have not been able to make these breaks in a big way. So Parador India hasn't taken shape primarily because the need for a very high end, high variant flooring is very niched in India. And because of pandemic last 1 -- 12 months, roughly, this market has been slow, but it should pick up very soon, and we will do what is necessary to build this up also.

The next question is from the line of Kush Gangar from Care PMS.

Sir, my only question is on Polymer side. Did we have any benefit for the last couple of quarters from the rising PVC prices? Or the current margins at current capacity utilization are questionable?

You're searching into my internal P&L, but Gangarji this is your company, so you need to know that. Yes, we have. We have been able to achieve roughly about 2% on the Polymer segment's profitability on account of securing PVC from different sources. That may not continue because PVC prices have already started sliding.

The next question is from the line of [ Shreyan Jain ] from Quest Investment Advisors.

Hello?

Yes, [ Mr. Jain ]?

Congratulations for great set of numbers. Most of my questions have been answered. Just in our previous interactions, you had mentioned that we are completing 75 years. So any idea on any special dividend for investors as sort of anything on that?

Dividend was announced. If you're not happy, you should bring this up in the AGM. But everything else, sir, is in the hands of the Board. I think I'm too small to try to talk about this, my apologies. That's not an answer I can give you.

Okay. All right. And sir, just last bit on the Parador side. If I look at the Q4 numbers, if I just compare euro with constant currency so we've got about 3% top line growth. So what I'm trying to understand is, is it largely because of the weather in Europe or -- what I'm trying to understand is, have some of the players got back because last quarter, what we mentioned was we've been able to -- our model is agile we've been able to do it DIY, e-commerce. So that helped us in the last quarter quarters. So what I'm trying to understanding is has the other players got back some share? Or what is it?

The business was quite slow last quarter, [ Mr. Jain ], if that's your question. Sorry, I couldn't hear you very well. But the business was slow on account of huge snowfall in Europe that happened last quarter and paralyzed the market completely. But Parador has still been able to continue the business. Other companies, I don't think has been able to do as well as Parador.

The next question is from the line of Anish Jobalia from Banyan Capital Advisors.

So at the cost of repetition, sir, really good see the great number the year and before. Sir, just wanted to understand from the Parador perspective...

[Operator Instructions]

Yes, yes, yes. Is my voice audible now? I hope -- can I speak now?

Yes, go ahead.

So Parador, sir, I just wanted to understand, you have been -- you -- earlier in the call, you mentioned about 10% growth and 10% margins. So given the headwinds that we have been facing in the business, bit as you mentioned about Q1 and part of Q2 also. And also the fact that in last year, some of this demand was also driven by people staying more at home. So there's a possibility that they might start moving out more as compared to last year and the spending on homes might come down. So do you think that we can still grow at 10% in the next year on the base that we have created for FY '21 and also the fact that the investments that we have been making into the joint ventures and new initiatives might still take a bit more time to fertilize.

Anishji, I'm not able to at all project how COVID is going to span. At the moment, it seems that COVID is relaxing in Europe, so which is good news. I don't think there is an issue on demand for the European segment Parador at the moment, as we speak, it's more about delivery. Because we have a problem with the material availability, but it is only a few month issue. So if you're looking at a bigger scale for Parador, nothing is changing. We are absolutely moving full ahead. Maybe in a quarter or so, the growth will be muted on account of -- that's also the team is working on. I'm not saying it will be muted. I'm just saying the team is working extensively. We are going to do far more outside Germany also. So the market won't be an issue at all. If we can sort out this material issue, which is a few days back news to me and while I was living with them. And I thought it's transparent enough to inform all of you. The team is working on it. I don't think the year will look at anything different than last year. We will continue to grow. We want to take Parador to EUR 350 million, EUR 300 million. And if we have to reach EUR 300 million, we have to do all of that.

Right. And sir, 1 question on the Roofing Solutions. I mean, what I understand, the industry grows for during the good times and then as the monsoon becomes bad, then it declines. So overall, the industry growth is not very high, maybe around 3% to 5%. So in the last year, we did very strong volumes in this business, and also, there was a demand-supply mismatch, especially in Q1 where we were able to do better than others. So I have 2 questions here that this time, maybe the competition is also equally ready with their products, their inventory to be able to compete with us in Q1, where we had a lot of advantage in the last year. And also the pricing as you already mentioned that it's grown by 8% the realizations, right, over the last year. So can that also come under pressure because the competition being much more normal in this year as compared to last year? So overall, how does the...

Answer to both your questions is no. We have -- I've answered this before. Let me just repeat for the sake of everyone else also. We have gone into far more penetration in our sales. And the customer base has been walked through. We are doing a lot of digital customer acquisition. We are getting into heat maps, we are getting into BI tools, we are doing the pin code mapping. I think that's going to hold us good from a way of tapping market. Our competitors may be well prepared. They are great guys, but we will find a way to better them. That's all I can say. We have a team which you will trust on, and that will continue to deliver. On market prices, they are all dictated in the market, but we are #1 brand, and we always are the best in the market, and we'll continue to get our premium over the rest. So we've never been dependent on the smaller companies to decide our NSRs. We decide it based on our brand. So I don't think this division has anything to lose, provided tender mix doesn't go on for 3 more months and closure of the country doesn't go on for 3 more months, then neither you nor I have a control, sir.

Ladies and gentlemen, that was the last question. I now hand the conference back to the management for closing comments.

Thank you very much, everyone. It has been wonderful, once again speaking to all of you. As you can see, we are always very transparent with everything that's happening in your company, and we want to continue that with you. This is your company. You can trust us fully. We will not let you down. There will be headwinds here and there, but the team knows how to handle this. I'm confident that you will get satisfactory performance from your company HIL from quarter-to-quarter. All the best to you stay safe. And thank you once again. If you have any other questions, please reach to our Investor Relationship desk, and you can fix the call even with me at any time at your convenience. All the best to you. Thank you. Bye-bye.

Thank you. Ladies and gentlemen, on behalf of HIL Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.