BirlaNu Limited (BIRLANU) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the HIL Limited Q1 FY '22 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, Eliza. Good morning, ladies and gentlemen, and welcome to HIL Limited's Quarter 1 FY '22 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; Mr. Ajay Kapadia, Vice President, Finance and Accounts. We will first have Mr. Dhirup Roy Choudhary making the opening comments, and he would be followed by Mr. Veerappan, who will take you through the financial perspective. Before we begin the call, 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 has been shared with you. I would now like to invite Mr. Dhirup to present his views on the performance and the strategic imperatives that lie ahead. Thank you, and over to you, Dhirup.

Thank you very much. Good morning, ladies and gentlemen. Welcome to Quarter 1 FY '22 Earnings Conference Call of your company. I thank you all for taking out the time and joining us on this call. I hope that all of you and your loved ones are safe. Quarter 1 FY '22 was a robust quarter for HIL, despite the second wave of the pandemic ravaging through the country, and marked a good start for this year. While it would be wrong to say that HIL was not impacted by the second wave and the subsequent lockdown, the resilience and commitment shown by our team helped in sustenance of the business and produced a good set of numbers. Our diversified revenue base, in combination with strong brand and geographical presence, and our emphasis on processes have served us an effective cushion against what could have been a very difficult quarter. The first 2 waves of COVID have definitely helped us to restructure our business in many ways. Meticulous sales plan involving business intelligence, pin codes and [indiscernible] mapping drive at the greener pasture, and above all, continuous acquisition of new customers through our last leg connect in the market saw our teams becoming far more agile in recognizing the business potential. The planning model has been strengthened to ensure material availability at the point of consumption. Digital initiatives like industry 4.0 have ensured machine maintenance and its continuity. All of this ensured that material was available at the point of consumption, and we were able to serve the market better. This led to a consolidated revenue of INR 984 crores, grown by 42% year-on-year from INR 693 crores in quarter 1 FY '21. EBITDA grew by 62% Y-o-Y to INR 174 crores in quarter under review from a previous of INR 107 crores in quarter 1 FY '21. EBITDA margin grew to 17%. I will now take you briefly through the business segments. Firstly, talking about Roofing Solutions business. With an excellent planning and execution, we have improved our market share by 335 basis points in this quarter. Having aligned our business model to the changing landscape of the economy and the market, along with high demand for roofing solutions, we have been able to maintain our growth trajectory in quarter 1 FY '22. Leveraging our leadership positions, we continue to focus on our margin profile and continue to be best margins in the industry. The market has significantly weakened since quarter 1, and we do not see the pent-up demand this year as was witnessed in FY '21. Market prices, therefore, have also softened, which puts further pressure in [indiscernible] Can I request you to keep your audios off please? Thank you. We continue to receive a very encouraging feedback on Charminar Fortune, our asbestos-free roofing product. Humid cure has already witnessed some good initiation and traction, and the business tripled quarter-on-quarter. Our R&D team has challenged themselves to improve the costs further to bring it down while the efficiency of productions are continuously being raised. As an organization, we've continue to have high expectations from Charminar Fortune and its variants in years to come. While the overall construction sector will witness slow down in Q1 -- sorry, did witness slowdown in Q1, our Building Solutions segment sustained well with an increase in dominance in the tier 3 and tier 4 cities that we moved to over the last few quarters with providing materials for construction of labor hutments and COVID centers. Capacity utilization in most of our plants have crossed the 85% mark. And the new Orissa facility will help in not only increasing our capacity, but also better capture the market opportunity in the East for blacks and -- for blocks and panels as we bring it up by quarter 1 next year. It will have an annual capacity of 150,000 metric tonnes of blocks and 36,000 metric tonnes of panels, together with 30,000 metric tonnes of [ both ]. Birla Aerocon is well known in the industry for its policy. And we are sure that at the on-ground situation as it improves the real estate will help this solution, this particular business segment to further grow. Polymer Solutions segment also saw significant headwinds in Q1, but our business during the quarter was supported by a strong brand value, superior product quality and increasing reach. The brand has gained pan-India recognition with its recent soaring to South and East India and is well regarded throughout. Additionally, in putty business, brands has the biggest play. Our model is a careful blend between self-manufacturing and outsourcing, depending on raw material prices and regional demand. We have set very high benchmarks internally for this entire segment on quality and cost, and we will continue to innovate and add SKUs to ramp up this business in years to come. Parador, our German flooring solutions, are facing some unprecedented challenges owing to material availability and cost. Key materials like HDF, MDF are in huge shortage and the costs have soared through the roof. The team is, however, taking all actions to find long-term solutions for these challenges. However, this will affect, both top line and bottom line of Parador in this quarter and part of quarter 3. Notwithstanding the above, our expansion plan in Europe continues, and we will be able to see good results as the material situation improves. We also continue to expand Parador's global footprint by expanding and strengthening presence in countries outside Europe. Operations in China have been healthy, and it is well on its way to be the first significant market for Parador outside Europe. Hence, while our order book is high, the revenues will be muted for the next 3 to 4 months before situation eases out. All in all, we continue to have high hopes for this business based on robust performance it has delivered so far and the well-laid plan for future that we have. During last 4 years, HIL has taken tenacious call towards converting this company from primarily roofing solutions company to a one-stop global building materials and solutions-providing company. We will continue to add newer business lines, which will be carefully considered before launching. Our aim will be to limit capital employees into these businesses and look at incremental top line growth using our extensive market reach and brand. Some new products like tile adhesives, primers, gypsum plasters, water tanks, waterproof putty, Teflon tape, et cetera, are going through test launches one by one, and we will be able to talk more about them in the coming quarters. In conclusion, I want to emphasize that our teams have once again proven their mettle by mitigating the adverse impact of COVID-19 pandemic. They rose to the talent and with the invaluable experience of last year, they have innovatively emerged victorious as reflected by sustained good health of the company and its results. While we definitely see significant challenge in our business in Q2 in light of an excellent business performance same time last year, it gives us great comfort in saying that HIL will continue to overcome any challenges faced, knowing that this company is in the able hands of very dedicated and competent workforce. Our long-term goals are secured and will continue to grow in terms of revenue and profitability towards the USD 1 billion target while maintaining a healthy balance sheet. Thank you very much for your patience herein. I would now like to hand over the discussion to my CFO, Mr. Veerappan, to take us through specific numbers. I am available for further questions in the later part of this session. Veerappan, over to you.

Thank you, Dhirup. Good morning, 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 ended 30th June 2021. As Dhirup mentioned, Q1 FY '22 marked a very positive start to FY '22 for HIL despite the second wave of COVID pandemic impacting the country. We found ourselves in a similar condition this quarter in Q1 FY '21, but we were much better prepared this time and we were able to overcome the second wave successfully. Additionally, unlike the first wave, huge resilience displayed by the team in keeping all the manufacturing plants, both in India and Europe, continuously running despite several challenges posed by COVID. All in all, it was an excellent quarter for HIL, and we are confident of maintaining this positive momentum going forward. In Q1, the Roofing Solutions business grew by a robust 40% year-on-year, coming in at INR 412 crores, which happens to be the highest ever quarterly revenue for this business in the history of HIL. The lower base of Q1 FY '21 also contributed to the quantum of this growth since the quarter missed around 20 days of operations going through the lockdown last year. We maintain our focus on our margin profile and continue to have industry-leading markets. Expanding geographical reach through expansion into tier 3 and rural markets remains a key element of our strategy as well. Moving on to the Building Solutions segment. Revenue for the quarter came in at INR 84 crores, growing 185% year-on-year. Most of our plants are functioning at more than 85% utilization and the upcoming [ Odisha ] facility will help not only ease the pressure on the existing facilities, but also help us further establish ourselves in the building metric space in the eastern part of India. The Polymer Solutions business has been making excellent progress in gaining a pan-India presence as discussed earlier and registered a growth rate of 124% year-on-year in revenues for Q1 FY '22. The revenue came in at INR 108 crores, and we are very positive on the outlook for the same. Utilization levels have been increasing in line with the demand for these products. And with the brand gaining a pan-India presence, we will see the growth momentum increasing going ahead. As regards to Parador, the revenue for the quarter stood at INR 379 crores, growing by 18% year-on-year, which also is the highest ever Q1 revenue delivered by Parador. The strong growth was supported by the opening of European economies and easing of international trade curves. As communicated earlier, due to scarcity and increase in prices of critical raw materials, profitability of this business is under pressure during the quarter. In the immediate future for the next 3 to 4 months, Parador is expected to go torrid times due to scarcity critical raw materials. However, we remain bullish on the prospects and have great expectations from this business, especially when it establishes itself as a global player in the Flooring Solutions business in the next 3 to 4 years. I will now talk about the consolidated financials. Revenue came in at INR 984 crores, having grown by 42% year-on-year from INR 693 crores in Q1 FY '21. EBITDA grew by 62% year-on-year to INR 174 crores in the quarter under review from a previous INR 107 crores in Q1 FY '21. EBITDA margins grew to 17%, a growth of 215 basis points. Happy to inform that HIL has delivered a PBT of INR 139 crores in 3 months' time, which is more than the first 6 months' PBT from continuing operations of any of the prior years. In fact, this is also more than the full year PBT of financial year 2020. PAT at INR 100 crores is double than the same quarter last year. EPS came in at INR 132.84 per share, increasing by 97% year-on-year. HIL continues to maintain a healthy balance sheet and cash flows. We have further reduced our debt by INR 106 crores, bringing our overall debt level to INR 303 crores. In India, the long-term debt as well as the short-term debt have been fully repaid during the quarter, and HIL India once again has become interest-bearing debt-free organization. Debt equity stood at 0.27x as on 30 June 2021 as compared to 0.41x on 31st March 2021. HIL's net worth stood at INR 1,107 crores and has grown over Q1 last year when it was INR 800 crore and more than doubled in the last 4 years. In accordance with the very good performance certified by our credit rating agency, our long-term credit rating has been upgraded to AA by ICRA. This is amongst the best in the industries we operate in. Q1 FY '22 has been a financially strong quarter for HIL. We continue to prioritize increasing profitability and business expansion. Our dedicated and resilient teams at time and again overcome the toughest of challenges to ensure that the company stays on the path to achieving these goals. 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 Subham Agarwal from Aequitas India.

And first of all, I'd like to congratulate Team HIL for the phenomenal performance. And given the current situation in Germany, I hope everyone is sound and safe. Firstly, on the Roofing business. I would like to understand what was the Y-o-Y growth in terms of volume. And secondly, I would also like to understand the current demand situation given the last year, we saw pent-up demand. So are we expecting similar demand compared to last year? Or how is the current trend that we are observing?

Thank you, Subham, and thank you very much for your kind words, makes a lot for us. We are all safe in Germany. The flood was really devastating, but I'm happy to say that our factory and our colleagues are all safe. Thank you so much. The growth this year on revenue has been 40% for Roofing. We have intentionally decided not to give out the quantity numbers hereon because it unnecessarily creates ripple in the market and doesn't help in way of how the competitors look at it. So we would say with that the market prices have increased 5% over quarter 4 in quarter 1. And we definitely see that the demand has improved about 18% in quarter 1 as a market, while our market share has increased more, and we have grown by 40%, as I mentioned. We see Q2 slightly lower than expectation, and that was also on account of a pent-up demand we had last year. But we are positive that on an annualized basis, Roofing will consistently grow as it has grown last year, but kindly keep that expectation at -- in single-digit growth for the market.

All right. And on the rest of the Building and Polymer division, obviously, it was impacted in Q1, but how is the ground situation right now? Are we going back to Q4 level?

Yes. The Building Materials and Polymers are doing well in Q2. It seems that we will be back very soon in Building Materials with construction now shaping up well. Polymers' growth will be robust. We have grown 53% last year in pipes and about 67% overall for the business last year, including putty. This year also, the growth in quarter 1 for pipes and putty have been very robust. Pipes have grown by 145% and putty by 100% over quarter 1 last year. And we -- our plan to take this business up to INR 1,000 crores in the next 4 to 5 years remains robust, and we are taking all actions towards doing that.

Great. And lastly, on the Parador division. So as I know that last quarter, we had taken a maintenance shutdown. So is that already done? Or are we expecting a few more shutdowns?

So let me just correct your understanding. There wasn't a maintenance shutdown at all, and I don't know where that's coming from, Subham. The problem in Parador is that there is a huge scarcity on material availability -- raw material availability. And this is in the net, everyone knows that in Europe and all flooring companies are raveling through it, and so are we. But our extended efforts towards improving the market and improving our sales in the market and getting into and penetrating newer zones have been consistent, and we are getting good rewards of that. So the order intake is absolutely fabulous there. We are just hoping that the material availability issue corrects itself. We are talking to many of the leading suppliers of key materials to support Parador. And hopefully, this will correct itself, but Parador will be weak this quarter. And I wanted to keep that down this clearly. And that's only because of material availability.

So are we looking at any alternative supplier for HDF right now?

Yes, sir. We are looking at. The problem that we are facing is while we are looking at China, we have also spoken to a couple in India and other places in Eastern Europe and other things. The problem is sea freights have become suddenly extremely expensive. So it's all about valuation at the point of usage. But all actions are being taken. Rest assured, the team as well as us are working overnight to correct this at the soonest possibility. The good part is that there is absolutely no bearing of this to the long-term plans of Parador, and we are very bullish on tariff.

And the demand, I would assume, would be very strong right now?

Demand is very strong. Our penetration has been extremely good. We have done very good penetration in countries like Spain, France, Nordic countries, and they are all resulting in good results on order intake. We are now supporting them with alternative products. There is a fantastic new venture that we have done in product there, which is called Modular ONE Hydron, which is waterproof solution. The Modular ONE was a absolute bright product that we had launched 1.5 years and done fantastic revenues last year. This is the newer variant of that. And this Hydron is going to -- doesn't need HDF, MDF. And therefore, we are trying to push this into the market as much as possible.

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

It's been a phenomenal phase of consolidation for as far over a year now and in the context of the journey that all of us have enjoyed, thank you very much for your leadership. A couple of questions. How should we read the industry structure at the unorganized manufacturers' end in the context of your phenomenal market share gains? You've explained in previous occasions how the supply chain of the smaller players have been impacted. How do you see this progressing?

Mr. Sarkar, many thanks again for your kind question. Roofing is primarily organized. So I won't say that's unorganized at all. About 90% or 92% of this market is fully organized with big 5, 6 players. That's going as per requirement. Building materials on blocks, there is a 50% unorganized and a 50% organized. And we definitely see that unorganized players are struggling. And I'm hoping to see a lot of consolidation there as we go forward. Pipes, again, there are both the unorganized or the smaller players and big players, 5, 6 who are really big sized. We are -- our aim is to get into this big league in the next few years, and we are taking all actions towards that. Flooring is very much organized in pockets of the country. So each country has their big players there, and they dominate through their brands and quality. Parador has an extensive brand and quality, and therefore, we are able to get good traction on sales in different countries. Materials is not an issue at all so far as we see, though the prices were extremely high in quarter 1, which is normal for cement and [indiscernible] and other things. But it will subside in quarter 2, it's my expectation. For fiber, we are doing reasonably well. There was an issue in availability of fiber, more so because we did a bumper season in quarter 1, which was quite unexpected also from many quarters, but we have been able to manage that and material availability at point of usage, excellent everyday production mapping that we did in all our plants, each plant doing fantastically well and scoring highest-ever production numbers. All of that supported in availability of material and then the sales [indiscernible]. So yes.

On the fiber import seen from Brazil, I think you alluded to in your previous call that you expected fiber prices to moderate in H2. Could you help us understand if that deal win is still on? And if it is so, how do you plan on utilizing the incremental gross margins that you expect to head our way in terms of either retaining the earnings or reinvesting that market share gains?

So margins are dependent on NSRs and material costs. And NSR is something that we'll have to scope up zone by zone. There are different challenges there. While the competition is all organized in Roofing, but their behaviors are unpredictable. And even though we have the best brand and market presence and we are the leaders in market prices, this softening in Q2 and Q3 is inevitable. And that will continue to drive down the margins in Q2, Q3, but it will again pick up in Q4. Overall, I think Roofing has done fantastically well in Q1, and we will continue to deliver good results throughout the year. Fiber impact definitely will be a positive for the balance of the year, and that should help in the process.

Sure. Lastly, in a context of $1 billion aspiration, what sort of blue sky we're looking at in the Polymers side business in terms of new capacities and product segments? If you could just spend some time on this.

Wonderful. I like your theme of blue sky and it's really a blue sky. There is absolutely nothing which will prohibit us to achieve our aspiration. Our aspiration for Polymers business is INR 1,000 crores for pipes and about INR 600 crores for putty in the next 5 to 6 years. We are taking all actions towards that. The present capacity for pipes in our plants will cope up to a revenue of INR 400 crores beyond which we'll have to add capacities. We are looking forward to expanding the product portfolio there, various SKUs for our existing products as well as possibly getting into new other types of pipe. All of that is being looked in by the team. They are very active as we speak. And the sky is blue, and we will achieve our target.

The next question is from the line of Pritesh Chheda from Lucky Investments.

Sir, on your comment on margin impact in Parador, what is the extent of margin impact? And what is the pricing action possible?

First of all, thank you for coming on the call. Parador is going through a tough time. It's every day's calculation that we are doing, I'll not be able to sincerely put a number across to you, but there will be a dip in profitability in Q2 as I see, and it's good to state that upfront. Prices are being increased by us and by the market also, and we have already increased the prices by about 9.5% over quarter 4 and we are taking stock of it every day.

Okay. Earlier, there was this thought process that the capacity of Parador can support about $2 million of revenues at about 12% margin with a slightly higher buyer there. So -- does that get challenged seriously as we go incrementally? Or what will be your thoughts there?

I've always spoken very clearly that the capacity in Parador can take us to EUR 200 million, just a small correction to your statement. And the profitability should always be taken around 10%. Anything more than that, the team will deliver. Last year, we had delivered. The present problem in Parador is only for the next few months, and I repeat, it's only for the next few months. Our long-term strategy for Parador continues to be there. Parador will be of EUR 350 million in the next 5 to 6 years. That's my commitment to you, with a double-digit profitability, and our actions are towards that.

Okay. Your margin last year was 12%, right, since some of the quarters after...

That's absolutely right, but I had also said very clearly, please do not take these margins on long term, take it as 10%.

Okay. And just lastly, a clarification on the Roofing side of the business. So incrementally, you are forecasting that the business should be growing at maybe a single digit, but there would be a beneficial margin because of the fiber price. That's how you are putting it, right?

Absolutely right. But again, to get the context correct, quarter 1 is the best margin for Roofing during the year as the season is at this time. It could be down in quarter 2 and quarter 3 and again pick up in quarter 4. So that should be kept in mind. But overall, on an annual margin part, we will not let it dip.

What is the capital expenditure for '22 and '23? And how will the debt look like in '22 and '23?

My colleague, Veerappan, just informed that after quarter 1, we are debt-free as an organization in India. And the debt in Parador will -- absolutely is not a problem, it's a 7-year debt at 1.5% hybrid interest. And Parador is able to deliver cash beyond what is needed to repay the bank, so that's not an issue. Coming specific to your question, this year, we should do about INR 125 crores to INR 130 crores investment in CapEx in India and INR 82 crores out of that is for the new CapEx in East for our Building Materials new plant. In Parador, we will invest, I think, about EUR 5 million to EUR 6 million. A part of it is maintenance CapEx. So no major plans of CapEx investment this year apart from the Orissa plant. And most of it should be from internal accrual. '23 numbers, let me get back to you.

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

Congratulations on a great set of numbers. First of all, I would like to congratulate the team for putting up such an excellent performance in such tough times. And over the last 4 years, the way you have transformed this company from a pure roofing company to a building material company, great work on that aspect. And you mentioned in your opening comments, Dhirup jee, that, going forward, new products you are venturing into are going to be very promising. So looking forward there, what are these new products, if you can throw some more light on these? And how have our old products that you have launched in the last 2 quarters, including the tile adhesives and primer, how are they doing? If you can give some color on this.

Amit jee, you've been very kind. Thank you very much. It means a lot to the team. And yes, 4 years, there was a very clear strategy that we have rolled out for the organization from a sustainability point of view, and I think that's absolutely waging well. When you want to be a one-stop building materials company, new products will roll in. The question that always haunts the management is, should we go all out, set up CapEx and go all out for product. We have taken a line where we want to utilize our USP and the company's USP is its market spread and its brand. There are lots of counters in the rural sectors that we have almost spread across the country and they sell many products, and we want to [ buy it ] into these products. So with less investments, as I mentioned, we want to do the outsourcing model and test these products as we go forward in test markets. And as it goes profitably forward, then we will take on the business to it. Products like tile adhesives, primers and gypsum plasters have already started its penetration in the market in a small way in test market. Businesses aren't at a start where I can talk about them at the moment. So I asked for a couple of quarters more when I can get back to you with more detail. Water tanks, waterproof putty and Teflon tape are the next bid that we will be launching maybe this quarter. And all will be to our existing same suits. And therefore, there will be no incremental effect or CapEx related to them.

Excellent. That answers my question. And my second question is that the kind of cash flow that we are generating. And of course, this year, you're going for a CapEx. Going forward, are we looking at some kind of acquisition or something because we assume that there will be bigger CapEx -- bigger cash flows coming through. That's one thing. And the second is on Roofing. What is it that we have done differently from our competition that has led to this kind of market share increase? That's all from my side.

Thank you, Amit jee, both are very good questions. So let me take the Roofing part first. So I think we have some wonderful competitors, and they push us further. So I owe a lot to them for making HIL what it is today. We have done a meticulous planning in material availability, in production capabilities, introducing industry 4.0, which ensures that no machine will take us by surprise. And it's a fact known to everyone and to you and to the market that quarter 1, the production are far lesser than the sales in a good quarter. And we were ready with it. So therefore, our plans were active far before quarter 1. And we had carried good quantities of relevant material SKUs at different pockets of the country. And we have 39 depots, and we have utilized that extensively. Quarter 1, the miracle was that none of the days of quarter 1 our factories were stopped. There was continuous vigilance from the government and directions to us, and they were checking -- physical checks were there, but they were very, very happy with the way we had kept the plant neat and clean and free of COVID and taking care of our people. So I think that was one aspect which kept the manufacturing on. And every day was a better result than the earlier. So they were breaking record after record. I think the team was fully motivated to come out of their homes during deep second wave and aggressively work towards the success of their company. Sales had penetrated immensely, and we had used several digital modes to get into the pin code, [indiscernible] mapping. We had improved retail spread. About 1,026 new counters have been [ renovated ] from our competition and we have far more ground last leg connect now. And all of that has comfortably helped us to get the best from what I would say was a good market in quarter 1. So we have been lucky, but we have been strategic. Coming back to your second question, which is on what we will do with a good cash flow. So yes, good cash flow is good to have. but 0 debt is not ideal for a growth profile. If we had stayed with 0 debt, we would have -- we had achieved 0 debt in the first year of my joining, 2018. And HIL wouldn't have grown to where we are. So we will take actions to grow. But this time, the actions would be more organic growth in pipe and building materials. This time, the actions will be more towards growing in India because we feel there are a lot of flexing that we need to do to expand our product portfolio. We are not in a hurry for an M&A at all, honestly. And let me confirm that to you. If there is something definitely that comes knocks our door, which is exciting, we will be taking it to the stakeholders and taking those comments .

The next question is from the line of Madhav Marda from Fidelity Investments.

You're the person sitting with the company, I just wanted to understand one aspect. With the Parador business that you have, could you help me understand the industrial assets and the industry structure? How it operates in the Flooring business in Europe? And just sort of your key growth drivers that you are planning to reach that EUR 350 million revenue in the next 5 years?

Thank you, Madhav jee, and I can go for hours and hours on this because this is very true to my heart. Parador, first of all, is a brand which is #1 in Germany, and German brands are #1 in the world. So you can take a correlation that this brand is the best-known brand in many ways in flooring. We have 2 factories, one in Coesfeld in Germany and one in Gussing in Austria. And both these factories are highly automated. The revenue of Parador was EUR 140 million when we took this company about 2.5 years back, and we had taken it to EUR [ 170 ] million last year. The growth profile on profitability was the first issue that we hopped on from a 7% EBITDA when we took this company to about 11%, 11.5% last year as we achieved. That was a good regime that we had been able to achieve. The second goal was then to expand the company geographically and product-wise. So this is a highly R&D and innovation involved company where 50% of their revenue every 3 years gets changed by new products. So a lot of innovation continues to happen, and we keep complete tap with the market and customer expectations in prices. Our major market is Germany, catering to 50% of the revenue, followed by the rest of Europe, which gives another 25%, and the rest of world, was then [ still up ] for the balance, 25%. Our intention is, while we are strong in Germany, how can we be stronger in rest of Europe and expand? And that's where specific actions have been taken in Spain, in France, in United Kingdom, in Netherlands, in the Nordic countries and also the new joint venture that we have set up in China. Spain has grown 100% over last year in quarter 1. And quarter 1 last year was also good for Parador because while the pandemic has affected Europe, Parador was the only flooring company which was catering to all people who were staying at home by individual shipment and digital malls. So over that, we have grown 100% in Spain, about 17% growth has come in France, U.K. has grown by 140%, Netherlands has grown by 24% and Nordic countries has grown by 7.5%. And China is doing very well. Now that COVID is settling down in China, that joint venture is showing good colors. Our expansion plan in Parador is to expand in Europe first and then further expand in China because they have the biggest middle class population, which are highly brand activators. We have a direct train line from Germany to China for the goods movement. And we have got everything digitilized, therefore everything is [indiscernible], otherwise could be a risk in China. So all of that has been done. Our next room is to move into North America and Canada. And we are looking at a joint venture there as well. We are taking the joint venture route because the investment is absolutely small and the risks are limited thereof. And once we get a good footing, then we can look at our own investments and creating our own companies at a later day. Parador will grow to EUR 350 million in the next 5 to 6 years, and we are taking all actions towards that. There has been a small setback, which was quite unexpected in Europe in the Flooring segment where the material problem has come up, which will -- for Q1, we have somehow been able to skip through. Q2 will get impacted. Q3 partly may get impacted, though we are taking all actions towards it. We will be back in Q4 in a big way. And thereafter, there is no looking back. So this is how I will define Parador.

And just on the industrial landscape in terms of maybe for Germany or Europe, how big this addressable storage market is for us where Parador operates? And just our market share and would like to know how much market share do the large players have? Just some sense on that would be really helpful.

Okay. So unlike roofing, as we say here, which is absolutely organized and we have a digital count of the market, in Parador flooring market, there are no data that clearly talks about the market share. Therefore, any number that I say will not be rationally proved and, therefore, I'll stay away from it. All I can say is Germany, we are #1. There are good players in every country. And they have their meaning, but we have an excellent brand. We have a coordination with very good designers who fill up for new designs and Parador, therefore, stays on the top. The market is pushed through by many to the distributor -- the big distributors and therefore, it's a 3-leg push, distributors and retailers and to the consumer. We have moved away in Germany, which is our 50% revenue market to levels where we are slowly doing away with the distributors and going directly to DIY and selling through them to the consumer that would in long term give us better margins as well as have a far better feel of the consumer sentiment. So that -- in different markets, that's different because some places are importer-driven, some places are commercialized, which means they have to go with the influencers and push the business to big commercial construction. Some are DIY-driven again. So different countries have entirely different phenomenon.

Understood. And, sir, essentially, this is a business which is driven by similar to any building material company in India, like it's a brand distribution and one key asset here the design and R&D. This is very crucial. Like you said, in this year, the product line gets sort of revamped. So that's a broad way to look at the...

You're absolutely right. It's like any other building materials, but what separates Parador is its innovation and brand. So I think these are the 2 which makes it so attractive for many.

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

Congratulations on the excellent set of results. So I have 3 questions. The first is with respect to Parador. So just wanted to confirm if the rest of the world sales is still at 25% in Q1? Or has it been different? And if you can give the broad outlines of the sales from different areas in Parador? So that's one. And I would also like to know the capacity utilization across your various segments using Polymers, Building and Flooring? And you have made the comment in the presentation that humid cure technology have been introduced in international market. So just wanted to get more insights on that. So these are my questions.

Mr. Basu, thank you very much. The Parador revenue has more or less been consistent. Germany has dipped a little bit because last year -- over last year, because there was a huge pent-up demand in Germany that we have seen. And also since the borders were closed, our intention was to maximize out of Germany last year. So as a percentage, overall, Germany has dipped over on a pie. And I gave you the percentages of growth that we have achieved in different countries. I can repeat that for you. Austria, we have grown by 30% over last year in quarter 1; Spain, 100%; France, 17%; U.K., 140%; Netherlands, 24%; Nordic countries, 75%; China, 100%. So there has been good growth outside Europe as well. That was also our intention because that solidifies our positioning internationally and this starts from a heavy dependence on one country like Germany. Coming to your second question on capacity utilization. In quarter 1, Roofing has been 100% utilized. But overall, I definitely see that Roofing is about 70% capacity-utilized as an annualized basis because there are lean periods that have started now. And 2 quarters, quarter 2 and quarter 3, are lean, where we don't need 100% capacity utilization. And that's the time we use in some of our plants to make non-asbestos roofing, especially in Kondapalli and in Faridabad. Coming to Building Materials, we are 85% to 90% full up on our capacity, and we seriously need capacity expansion, and that's where we are looking forward to our new venture in East. It's slightly getting delayed because of land acquisition, which is taking a lot of time, again, owing to COVID and the priorities that the government has there, but government is very positive. And we are hopefully going to be in line to bring it to the light of the day by quarter 1 next year. Polymer Solutions' capacity utilization is roughly about 50% and both in putty and pipe. So therefore, that gives us a lot more to expand in these. Parador is about 70%, 72% capacity utilization. At the moment, it's low because we are not able to produce enough, owing to raw material issue, but there is a good room to expand in Parador also from its present capacity. That was your question, I guess, Mr. Basu.

Yes. And my last question, sir, was with regard to your humid cure technology. So you made a comment on the presentation that it has been launched in the international market.

Yes. So I would correct myself if I [ expect ] so, but I do not -- because it hasn't really seen the light of the day in too many countries. We have definitely supplied Fortune into Nepal. Nepal is like India. We have a market share in Nepal now of more than 60% of roofing by Fortune. So it's a good penetration we have done that country. We have also supplied to Somalia and Oman. So there have been some good initiation in these countries, again, [ PEP ] supply so that we can -- but they are all doing well. They have been put on the roof and behaving very well. So exports have been rather limited.

So I mean, are these exports based on the humid cure technology? Or just an early...

It's all humid cure now. It's all humid cure now for us.

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

I have followed the new launches and I see products like wall primer, interior, exterior and [ side ] jointing mortar, et cetera. Is this something we can hear from you on new products and how do you think that should shape up in the coming years? Are there any other product categories which you are in a position to talk, we are thinking of launching?

Naresh jee, I mentioned that twice, but I'm happy to say that again. Yes, these are the products that you name, tile adhesives, primers, gypsum plasters, water tanks, waterproof Teflon, putty, Teflon tapes, et cetera, that we are all planning. And we are planning them in the same sales route as we have to strengthen our utilization of sales reach. And you would hear about how successful they have been in coming quarters. At the moment, they are only test launches.

The next question is from the line of Nikhil Gada from Abakkus AMC.

Congrats on a very good set of numbers. Sir, my first question is just, once again, going back on Parador. While you mentioned that we have seen good growth across the regions of Europe, wasn't that Europe was also under lockdown in 1Q and that might would have had an impact on our numbers or we were able to still deliver in such a challenging environment?

So is your question, Nikhil jee, on this year or last year?

Sir, this year. This year, 1Q FY '22.

So you're absolutely right. There were parts of Europe which went through severe problems on COVID. And these challenges were there even last year. And if you remember, the same thing, as I said last year, we had changed the sales model of Parador from a distributor-driven to more digital, DIY, retail, online brand stores, commercial business. And the same strategy was taken this year as well. So Parador is not getting affected by COVID. I can make that statement confidently. If the borders get closed due to a third wave or whatever, I don't know. So I can't forecast that. But if the borders are open, sales of Parador will not get deterred at all. At the moment, there is a concern on materials and therefore, we are having a slow revenue growth in Parador, or rather we are facing problems in Parador, but that's only temporary.

Yes. Sir, just on the demand aspect, where you're saying that the demand is still quite strong. How do we take into account the order flows as in -- because since we supply on a DIY basis as well as through distributors, how does this booking happen? If you can just help us understand that.

So we are -- we have our people in many of the countries. We have our own companies. We have JV in China. And bookings come through them, and we are extensively growing our customer base, which is also a part of our goal to grow Parador, and that's happening every day. So orders, therefore, are good. We are challenged to keep our customers with us now that there is a material scarcity, but we will come over that. So orders are good. It's only finding the material and delivering it which is a concern. We are working on that every day, and it's going to be a challenge, though, for this quarter.

But we are not losing any orders because of this deal, right, as of now?

We have to let go some orders which have HDF, MDF and some critical chemicals, which are problems, but we are trying to compensate the others with alternative products.

Got it, sir. Sir, and secondly, on the margin front as well in Parador. So while you sort of alluded that we were able to skim through in 1Q., was it because we had some low-cost inventory still with us that we were able to deliver at decent margins in 1Q and that is something which is going to be a problem in the coming quarters?

In simple words, Parador is working the Indian style, and I take pride in my country. That's why I'm saying this, while the Germans are also excellent. But they have completely gone out of the way to keep pace and doing everything they can to keep the revenue up while the materials are a big problem. But the bottom line is being pushed hard and there's a huge headwind owing to raise in prices of the materials. Chemicals are absolutely on the roof and sea freights have gone 6x up. So it's putting a lot of pressure. There was a serious problem in quarter 1 -- at quarter 1 calendar year this year when there was this debacle in the Suez Canal as well as huge snowfall, which completely collapsed the economy there for at least good 2 weeks. And those cascades have happened. Summers are summers in Europe and factories close down. So there's little that we are able to, therefore, quantify at this moment. But as summers go off, we will make once again our attempts to get back to where we were in Parador.

Got it, sir. Sir, secondly, on the pipes business -- especially the pipe business, we have seen that a lot of the other companies have reported numbers, and they have seen some impact of inventory losses because of the PVC prices seeing a sharp dip. Somewhere down the line, our numbers are still quite resilient. So is it that some of it might we might see in 2Q and 3Q? And how do you see the demand aspect as well? I know you mentioned that we have now achieved some amount of pan-India presence. How do you see -- because last 2, 3 quarters, we are still at this 50%, 60% utilization. I think COVID has been an impact. But are we benefiting in terms of improving our market presence?

So market presence is certainly getting benefited. Numbers are growing and the revenue has grown. So pipe in quarter 1 has grown by 145% over last year. And though last year was a weak base, but this year also 1 month was completely collapsed due to COVID. So it's a good performance by the team, I give it to them. We will continue to grow in pipe and that's being triggered by: a, our brand; b, extensive growth in sales that we are doing in way of market reach. We are growing our sales team in pipes. We are growing our market reach. We are growing our brand realization in pockets. And now we are pan-India, as I mentioned to you. So all of that is supporting. Yes, the impact of inventory will be there this year, and it's having a 2-legged impact. One, because PVC prices are not growing as much as it did last year. Therefore, there is no consolidation or rather primary stocking that's happening in the market. Therefore, the demands are low for pipes. And second, the carrying inventory and those prices at the PVC price did lower itself. So those prices could be higher at times. So there is a loss owing to that, that happens. HIL has managed it well even last year when we had started importing a lot of it and they were at better prices than the domestic availability. And we have taken the right time decision. We have lost about INR 2 crores, INR 2.5 crores to inventory already this quarter. Next quarter also, there will be some hit. But overall, by cost savings, by R&D interface and everything, we'll try to see how we can manage this.

Okay. And sir, just lastly on the pipes business itself, what kind of sustainable margins do you expect this business can deliver once we reach those 70%, 80% utilization levels?

Pipes should be catching up with a double figure. And our aim is to grow pipes to about 12% when we reach INR 1,000 crore levels or more -- at EBITDA, sorry. And at INR 400 crore level, we should be at double figures EBITDA also.

Got it, sir. And just sir, lastly, before I get back in the queue. In the Roofing business, we are sort of at peak levels of utilization, especially in the main quarter which is 1Q. Any plans of expansion over there or some amount of capacity additions that we can do so that this demand which we are seeing that we are able to keep on capturing more market share?

Nikhil jee, I give it to my competition who are already adding further CapEx for expanding AC sheet, asbestos roofing because that takes away a valuable cash out of them. I would not do that. And that's the last in my strategy. I'll tell you why. Because, a, we have only a 70% utilization of our plants in Roofing. So there is a good 30%. It's a matter of good planning, meticulous way to handle the product, good quality products, which can sustain a long term in go-downs if we have to stop them and all the rest of it, which HIL is able. Second, during the season, when you really need materials, if your plants can't deliver and astronomical numbers are our benchmark numbers, then you will need to add CapEx. Our plants are #1 in the world on productivity, and we are very confident that with our present productivity and capacity, we don't need to add capacities. We would use our CapEx, as I answered to one of my valued investor, I think Amit jee asked that question, I answered. We are going to use our cash very valuably. They are your money, and we would use it sensitively. Not for [indiscernible]

The next question is from the line of Alisha Mahawla from Envision Capital.

Congratulations on a great set of numbers. Sir, I just wanted to understand that considering in our Roofing Solutions business, we're expecting a slightly tepid growth considering there won't be any pent-up demand this year. Building Solutions with almost at peak capacity, Flooring -- or rather in Parador, we're expecting again some sort of constraints because of raw materials. So do you think FY '22 will be more of a year of consolidation? And '23 is when we will be sort of all cylinders firing? Or do you think that there is still scope for very healthy growth for FY '22 also?

Alisha, thank you so much. I wish I could give these numbers offhand, but it's very difficult to predict. But I can tell you, our team will work for still a double-digit growth in this year. Profitability will be an issue this year in Parador, but overall, in other businesses, we don't see that problem. That's where Q1 being so good for us will help to stabilize the whole year also.

No, that's helpful. And just one last question. So for the ambitious target of $1 billion revenue that we have, which we aim to achieve over a couple of years, do we expect all our segment contribution to be in line with where they are right now and margin profile to be similar, or do we expect some segments to sort of start contributing more and, hence, our margin profile will look relatively different from where we are? Just broadly your view on it. I'm not looking for the exact number.

Thank you. No, I can give you exact numbers on this, Alisha, because $1 billion is slowly becoming less of a dream and more a reality. The team is working on that. We will grow all cylinders, and we have to because $1 billion can't be achieved by 2026 if we can't achieve a 2022 first in CAGR. And those kind of growth will come from next year. This year won't be a 20%, 22% growth because we didn't add CapEx last year. So this year, we are slightly [ clinched ] because last year was a year where we couldn't tap CapEx in many of our businesses. But pipes will be astronomically growing. We will see pipes at INR 1,000 crores. We will see putty at INR 600 crores. We will see Building Materials at INR 700 crores, INR 800 crores from where it is. We will see Roofing at about INR 1,500 crores, INR 1,600 crores, including the non-asbestos roofing. We would see some new products delivering a few hundreds here and there. We would see Parador at EUR 350 million, EUR 400 million. Our internal is EUR 400 million, but EUR 350 million for you. And we would see some new businesses definitely coming up as we need. Some new verticals may come up, adding [ 1,000, 1,500, which will all add up to 7,000 ]. So margins -- there is no growth without margins. And therefore, we will protect the margins very much. We will try to improve the margins where it is required. So pipes will improve the margins as the volumes grow. Therefore, the organization is all carved towards value add. It's all about economic value add for our investors, and we will not lose sight of that.

The next question is from the line of Sagar Jethwani from Phillip Capital.

Congratulations on good set of numbers. Sir, most of my questions have been answered. Just a couple of questions. Sir, so what is the replacement life cycle of Roofing and the Flooring? Is there any data available? Average life, yes?

Roofing -- at the moment, asbestos roofing is on its 74th year of existence. HIL was all Roofing till about 4, 5 years back. And therefore it continues. So there is no need for a replacement, honestly. Asbestos, the way we handle is absolutely safe, Sagar jee, and safe from manufacturing, safe for usage. And we don't see a need for getting worried. Though the risk always is there because some of the countries in the world have gone away from asbestos. A lot of institution in India have gone away from asbestos. So the risk does hover, but it's not something we should be unnerved in the next 5, 10 years at all. But we have worked on the non-asbestos roofing solutions. And Charminar Fortune is a product for which will stand up and can be made from all our existing manufacturing facilities of asbestos clients if asbestos goes out of the market, and therefore, HIL will be the only company in roofing which can immediately switch within the next 3 months to non-asbestos if asbestos is at risk. So that's absolutely no problem. Parador, as I mentioned, is not sticking to an existing product that this model or this company works. This company innovates with the revenue carve-out of 50% every 3 years from new products and that innovation, that development, that R&D will continue in Parador. And, therefore, it will continue to churn its product portfolio as the needs from the customers keep changing, and we don't see a problem on sustainability therefore. Building Materials, I don't see a problem at all. Blocks will continue. They were doing very well in class A cities. Now they have started picking up in tier 2, tier 3 cities as well, and those markets are growing and we have seen really how it has grown over the pandemic because we have charted our complete focus to tier 2, tier 3, and they are doing extremely well. Panels is all systems and value-proposed product, and we have a market share of 67% there in the country. We basically work with the influencers, construction agencies and help them to understand the value for this product, and it's growing fantastically and it's a very profitable product. So we don't see a problem there as well. Pipes is an evergreen product. And again, we are into CPVC, UPVC SWR pipes and fitting, and those are the trend of the day. If PEP or HDPE or any other pipe model we need to enter, we will keep our minds absolutely open and look at the business profile, the ROC -- return on investment and then invest in this. So we don't see a problem again. So sustainability is not an issue. From an environmental point of view, all our products are doing very well. Asbestos, though, has a negativity in many's minds, but we are very clear how we handle it. And ESG is something we have gone all out this year, and you will see it on annual report. So as an organization, your company is fully focused on keeping the environment, the people and its product sustainability.

Actually, sir, sorry, my question was a little bit different. My question was that how much -- what is the average replacement life from the consumers and as in the the flooring market...

My apologies.

So suppose every 6 years or 7 years that way in Flooring and Roofing as well, yes.

My apologies on that. Mr. Sagar, roofing stays 75 years. We say 75 years because the first products are still living, so you don't have to replace them. For flooring, the trend in Europe -- so it doesn't need a replacement, but the trend in Europe is they change their flooring every 4 to 5 years. And that's a fantastic trend for us because then the replacement demand continues. And it's not the demand of the product or technology of the product, it's all about having new designs in your own home. So that's the trend. I don't think building materials can change because you've built a house. So blocks stay and panel stay, yes.

And sir, secondly, a very small percent of our promoter holding is placed right now, suppose 5.6%, I think. So any plans to put it to 0 levels?

You're asking the wrong person here. You should have been at the AGM. But I'll put your question across to the Board and to the Chairman.

Yes, sure. Sure. And sir, any CapEx plan for FY '22, or any number if you can give, '22 and '23?

Yes. I've given this earlier in the call, but I'm happy to repeat. The CapEx for this year will be within INR 125 crores in India and about EUR 5 million to EUR 6 million in Parador, including the maintenance CapEx, and INR 125 crores includes the East project where INR 82 crores will be spent.

The next question is from the line of V.P. Rajesh from Banyan Capital.

Most of the questions have been answered. I just wanted to know with respect to the pipe side, how is the competition there? And how are we replacing some of the current incumbents in that?

Mr. Rajesh, welcome to the call. Pipes is a very aggressive market. We know it. We had known it and we had taken a very concerted effort towards fighting all of that. The market is growing about 10%, 12% annualized, but we are growing more than 50% for the last 2 years. So yes, we have to take away the market from other players. But the good thing about pipes is there are about 5, 6 players, and we can name them, who are in the top graph, INR 1,000 crore-plus revenue. And the rest of them, with no means to demean them, but are toddlers, they are about INR 200 crores, INR 300 crores or lesser in total turnover. So the brand plays a very strong positioning there. And there is no buildup buy in the country. So that helps us to get into -- and be in a way, retail and distribution. We are continuously growing on that. And that's giving us extra buy to take away market share, if at all, that means any, even though we are very small still in pipes.

Right. Right. That's very helpful. My second question was just, you guided for this year that you will be double-digit growth. But on the margin side, given all the volatility you are experiencing in Parador and otherwise, what's your sense? Will we be like the margins we see in Q1? Or will it be more like last year, so can give us -- directionally give us some idea on that?

Sir, on the margins, it will be very difficult for me to cast a number. The only -- and I'm very transparent. So I wouldn't have stayed away from it. The reason is, as soon as we're able to get the material issue sorted in Parador, everything will be balanced out. So for Indian context, I can tell you for the businesses in India, we'll grow, and we'll do decent margins, whether it is higher than last year, last year was a great margin, or lesser or how much growth, I think -- let's wait for another quarter. I'll give you those numbers. Parador, just that much. If we are able to sort that out, everything is back.

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

I just joined the call a little late. So pardon me if I'm asking this again. Just on the Roofing side, I had 2 questions. So from what I understand in the previous call, you had mentioned that Roofing business goes through some cyclicality in the sense that every 3 years, there will be 2 good years and 1 bad year. So I'm just going through last few quarters. Q1 FY '22 has been good, Q1 FY '21 was good. So in a way, what I'm trying to understand is, should we expect that FY '23 should be a dull year in some sense? And second thing is you mentioned that we should do about INR 1,500, INR 1,600-odd crores from the Roofing by FY '26 for the $1 billion target. So just back of the envelope calculations tell me about a 10% CAGR. Now if I were to assume the cyclicality in the business, so out of the 5 years, I expect about 1, 2 years to be a little dull. So that just takes the CAGR, it'll be higher in double digits. And you also mentioned that you expect the Roofing business for you to grow in single digits. So just wanted to get your sense on this.

Wow. Very good question. Thank you so much for helping me with this question because I can clarify this to you. Don't go by the sentiment of 2 plus 1 -- 2 years good, 1 year bad. So that has been what we have seen for a decade now. Please count yourself for next year based on the rainfalls of this year and the cash availability with the farmers and any incentives that the government do. This year, again, the rains have been extraordinarily well. It has been slightly delayed, but it's got its share. We are very hopeful that the rabi, the kharif and all the crops will be good for farmers to reap by next year. And therefore, I'm hoping to have another solid performance of Roofing next year. Also, government is paying directly to the banks. They have been taking a lot of initiative. I thank the Indian government for taking keen interest on farmers, and that's helping our business. So please don't worry about that at all. Second question is, look, Roofing is not asbestos alone. So we sometimes just be myopic, in my opinion, that's not what today's HIL is. Today's HIL is all about excitement, of creating the new fortune by bringing in new products and value-adds using our extensive market reach. So we will carve out this INR 1,500 crores, INR 1,600 crores from asbestos definitely, which is growing, as well as from non-asbestos roofing and from many other value-added solutions and new products that can go through this route to the rural sector where we are strong from roofing. So all of that will add to this.

Okay. And just last bit. So just wanted to understand what is the industry growing at in roofing? And yes, so just wanted to know that.

Q1, the market has grown by 18%, 1-8, in roofing over Q1 last year, and we have grown at 40%. These are revenue numbers.

Okay. All right. And so just do you think the market has expanded in some sense because from what we understand is the steel prices have also gone through the roof. So the differential that used to be there has increased about 20%, 25-odd percent. So do you think this helps the Roofing business in the long term? And how sustainable would that be?

There are 2 things that HIL is doing, for instance, to help the market grow. A, we are doing good branding activities now and, therefore, a perception in the minds of people about a good quality, good brand, sustainability and all those things are being done by us. We are the leaders in the market. So a lot depends on how we also carve out the market. The second is we have come out with colored roofing, asbestos roofing. So that competes with the brightness of colors that steel sheets do and therefore, hopefully, that part of our creativity will also add to our business expansion and the market expansion. And yes, we have seen last year also asbestos roofing has grown. And this year also in the quarter 1, they have grown. So part of it is steel. But again, please don't forget that there are certain sectors of markets where steel is always preferred and [ immaterial ] of where the prices are, they will still go with steel. So there is a certain bit of cannibalization that steel had done from asbestos, which may be coming back to us because steel price is high, but most of it is creations in the market through brand. Any other questions?

We'll move on to the next question. That is from the line of Ritesh Badjatya from Asian Markets.

Congratulations to the team for an excellent performance in the quarter. Sir, my question mostly is answered. Just one question. Given our most line of the business are in the growth phase, so just wanted to ask about the management bandwidth. How do we manage different line of business so efficiently? And how would it effect the [indiscernible]?

Sorry, your line is slightly disturbed, but what I have as is the management bandwidth and how do they manage this expansion for different lines of business. So people are the resource. It's the biggest asset that I believe and I claim is in my balance sheet, though it doesn't reflect there. It's the team, and we are growing the team extensively. We are growing the team both in leadership as well as down the line. Merit has given priority in this organization. Employee engagement is given priority. Your company is a great place to work for the third year, and this is only the third year we have gone for a certification like that, and we have got the certificate. And we are 55th in the country. We have an 86% employee engagement score from Great Place to Work. All of that adds to it. So we are adding people. We are adding the spread of people in sales. We are adding plants wherever it's needed. We added the putty plants, we have added the pipe plants in the last 4 years. So all of that is a continuous effort. If we get suffocated on management bandwidth, we'll never be able to do. So I confidently say, I don't work, it's the team that does it, and I'm proud of this team. So that will continue that way, sir. Believe me, without people, HIL will not be able to achieve what it's doing. Can we take the last question?

Sir, that was the last question.

Okay. Fantastic. So thank you very much. It's been a pleasure interacting with all of you over this call. We thank you for taking time out and engaging with us today. We value your continued support and interest in your company, HIL. If you have any further questions, we are transparent, we are open, and we'd love to discuss all of that with you. Please reach out to our investor relationship desk. Thank you very much. Stay safe. God bless you.

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