Hindware Home Innovation Limited (HINDWAREAP) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Hindware Home Innovation Limited Q2 FY '24 earnings conference call hosted by Yes Securities. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Udit Gajiwala from Yes Securities. Thank you, and over to you, sir.

Thank you Yousuf. Good afternoon, and welcome, everyone. On behalf of Yes Securities Limited, we invite you to Q2 FY '24 earnings conference call of Hindware Home Innovation Limited. From the management side, we have Mr. Sudhanshu Pokhriyal, CEO of Bath Business; Mr. Rajesh Pajnoo, CEO of Pipe Business; Mr. Salil Kappoor, CEO, Hindware Home Innovation Limited; Mr. Sandeep Sikka, the Group CFO; and Mr. Naveen Malik, CFO of Hindware Home Innovation Limited. I would like to hand over the call to the management for their opening remarks, post which we'll open for a question-and-answer session. Thank you, and over to you, sir.

Thanks, Udit. Good evening, ladies and gentlemen, and welcome to Hindware Home Innovation Limited Quarter 2 and H1 FY '24 Earnings Call. I would like to provide a brief overview of our company's performance for the quarter, post which the business CEOs will share the key highlights of the respective businesses. Our performance during the last quarter is in the background of challenging macroeconomic conditions leading to slowdown in urban and rural consumption. Our company delivered a revenue of INR 700 crores in quarter 2 and recorded EBITDA of INR 80 crores. In H1 FY '24, our revenue was INR 1,334 crores, and EBITDA stood at INR 148 crores. Looking ahead, our primary focus in the short term is to build a pipeline of innovative, smart and interconnected products that seamlessly blend innovation and aesthetics to enhance the quality of life and living spaces for our valued customers. Despite the challenges presented by the current economic landscape, our commitment to growth, innovation and customer-centricity remains unwavering. We remain confident about the prospects of our businesses and its ability to drive growth. I would like to call Mr. Sudhanshu Pokhriyal to take you through the bath business. Over to you, Sudhanshu.

Thank you, Naveen. Good evening, everyone. During the review period of quarter 2 of FY '24, we delivered a Y-o-Y revenue growth of 5% in Q2 and 2% in H1. This growth was achieved despite inflation challenges, higher interest rates and liquidity pressures. This resulted in relatively soft demand for mid- and lower-priced bathware products. Our profitability and margin performance has been strong in the quarter under review. Our EBITDA expanded 33% year-on-year to INR 60 crores, translating to an EBITDA margin of 16.1%. Our consistent emphasis on improving our product mix and efficiencies is reflected in the performance. As we look ahead, our focus continues to remain on expanding our presence in new markets while maintaining a strong emphasis on productivity enhancements and working capital management. Capital investment will be directed towards establishing brand store for market expansion and enhancing manufacturing efficiency. These strategic efforts are aimed towards elevating our product pricing, enhancing our margin. Our diverse marketing investments play a pivotal role in helping us connect with our customers across the country. Our integrated marketing initiatives, including the dynamic IPL, Asia Cup and the current ongoing Cricket World Cup campaign is helping us enhance the brand visibility and appeal. Additionally, our partnership with Water Management & Plumbing Skill Council which is called WMPSC underscores our commitment of upskilling 5,000 plumbers over the next 2 years, reinforcing our dedication to skill development in industry and advancement. We are confident that we will maintain and enhance our market share by pursuing our growth strategy. This strategy includes launching innovative products, strengthening of the Hindware brand, expanding our distribution to Tier 3 and 4 cities and enhancing a luxury brand, Queo. These efforts are supported by a robust influencer program for key stakeholders and comprehensive marketing campaigns for all our brands. Additionally, our strategy to bring large-scale production in-house aligns with our overall objective to improve value creation. In conclusion, our strategic initiatives reflect a commitment to growth, innovation and delivering exceptional value to our customers. I would like to now hand over the call to Rajesh Pajnoo to take you through plastic pipes and fitting business. Over to you, Rajesh.

Thank you so much, Sudhanshu. Good evening, everyone, and thank you for joining us for our Q2 and H1 FY '24 Earnings Call. TRUFLO, our established brand now for plastic pipes and fittings, maintains its position as one of the fastest-growing brands in the industry in our addressable segment. In the review period, revenue stood at INR 201 crores in Q2 FY '24 and INR 357 crores in H1 FY '24. The revenue was primarily affected by a sluggish demand environment in the home plumbing segment combined with volatile raw material prices in the quarter that was driven by the agricultural pipe space, which is not our target market. Our EBITDA stood at INR 22 crores in Q2 with double-digit margin at 10.8% and INR 32 crores in H1 with margin at 9%. Despite some headwinds, we endeavor to maintain prices while actively enhancing brand awareness to expand market share and presence. Further, we have been proactive in engaging with plumbing consultants, plumbers and have organized various training sessions for our channel partners and influencers. These efforts will continue in the upcoming quarters to enforce our market presence. Our dedication to expanding our distribution network also remains unwavering with over 300 active distributors and approximately 30,000 retailers currently in our network. We are in the process of establishing a new state-of-the-art manufacturing plant in Roorkee, Uttarakhand and construction of the facility has already started. The plant is expected to be operational in Q3 of FY '24/'25. To conclude, TRUFLO remains committed to achieve its goals of market expansion, enhanced brand awareness and profitable growth. I would now like to hand over the call to Mr. Salil Kappoor to take you through consumer appliances and retail business. Over to you, Salil.

Thank you, Rajesh. Good evening, everyone, and thank you for joining us for our Q2 and H1 FY '24 earnings call. In Q2, our revenue stood at about INR 96 crores. And in H1, it came in at about INR 202 crores. The market sentiment faced its fair share of challenges primarily due to muted, soft consumer demand and which happened more in the smaller towns and the rural areas. We, however, used this time to focus on some of the basic hygiene factors like working capital level, improved our inventory levels and our working capital. However, over the coming quarters, the market has a positive outlook on the back of the upcoming festival season and increased demand from e-commerce. In our kitchen appliances business, we continue to retain our leading position even in the midst of our markets grappling with inflation and intensified competition. However, our cooler demand did come down. It was impacted due to unseasonal rains, especially in Q1, and some of it also continued to Q2. That concludes the opening remarks, and I would like to ask the moderator to open the floor for question-and-answer session. Thank you.

[Operator Instructions] First question is from the line of Akshay Chheda from Canara Robeco Mutual Fund.

So one question. So this is on the piping side. So sir, if you see the EBITDA per kg, that is around INR 21 or even if I see the absolute margin of around INR 10.8. So sir -- so I mean, this is on the higher side. So will it sustain going forward? Or was there any one-off? Or how do you see these margins? That was the first question.

Yes. See, EBITDA per kg is a mix of basically it is the product mix that we are selling in the market. So whatever we have maintained now, we see this -- going forward, we can maintain it. But it depends on the prices of PVC which have come down heavily. There needs to be a correction in the PVC price, which is expected maybe -- we are hopeful about it after Deepavali. EBITDA per kg will be -- basically, it is -- we have to see it from an angle of realization per kg, sir, because EBITDA per kg is something which is your total EBITDA, whatever we have now achieved by having that product mix volume.

So sir, how do you work, sir? Do you work on the percentage margin or EBITDA per kg, sir?

Percentage margin.

Okay. Okay. Sir, I understand that your capacity will come up only after 1 year. So -- and currently, I think you are running at optimal capacity utilization. So wouldn't you be out of capacity?

See, we have already started the construction. In the next financial year Q3, we are expecting that we will be commencing our commercial production. Till that time, we are trying to maintain the capacity, and we are also enhancing the capacities in our existing capacity plant, which is at Hyderabad. We are only working with one location at the moment with 2 plants near at Hyderabad.

Okay. So -- but then can you go to 12,000, 15,000? Or this is the maximum you can do because I think that you might be capacity constrained going forward, sir?

What 15,000? Can you repeat, sir?

I was asking, sir, you are at around 10,000 or 12,000 of quarterly capacity. So what maximum you can go up to scalable capacities what I'm asking because at current rate, I think your capacity constrained.

Presently, we have a capacity of 52,000 metric tons. And we are running at a capacity of around 85% capacity utilization, which is highest in the industry.

Exactly. So I was worried that wouldn't be the capacity constrained going forward? So that was...

We are adding up the -- we have the facility to add up more capacities in the existing plant, sir. We are doing that.

[Operator Instructions] Next question is from the line of [indiscernible] from Nasser Investments.

I think it's a decent set of numbers. Sir, our focus on pipes and fittings, I mean, we've been talking of pipes and fittings being the growth driver. But don't you think that pipes and fittings has become more of a commodity kind of a business with a level market and a lot of players? So shouldn't you think that we should be focusing more on our bathware and building products division and our new introduction of geysers and consumer products, sir? Your thoughts and your views on how the top line will increase irrespective of what happens in the pipes -- plastic pipes and fittings, sir. That can be a segment, but that has become too much of our focus, sir.

With respect to overcrowding of the market, you see markets in India are getting competitive from all angles. It's not that the bathware product market is not competitive. So when the markets are getting competitive in a limited, let's say, sanitaryware market, it's, let's say, INR 5,500 crores, INR 6,000 crores market or a faucet is INR 12,000 crore market. Each and every company has to find a way so that it can use its brand to expand the horizon in terms of very nearly related product categories. So like we were front of the wall, now we've gone behind the wall. We have been very successful. So markets will always remain competitive. It's how you open the market. I think if you see the success of our pipes division, it's a 5-year old business, which we started in August 2018 after the setting of the plant. We are doing like last quarter, we had done INR 200 crores. Last year, we had done almost INR 790 crores of turnover, which is a fairly successful business in terms of development of the market. The market has accepted the product. Market distributors have accepted the product. Product is a high quality, and we are making good margin on it. So the ability to further enhance the margin still -- it's a separate vertical within our organization. There are some operating costs. So as we build up more and more volumes, the operating cost structure will come down, and the success of the overall business will start to improve. It's not only this like can we just focus on the sanitaryware or the faucet business. The arena within which we are operating, it will be very, very restricted. And especially if you see bathware segment, it gets a full level of competition even from the unorganized market. So almost 30%, 40% of the market on bathware segment, that will be faucet, that will be sanitaryware, is both getting a competition within the organization and even from the lower end from the unorganized players. But pipes is one such business wherein it's very closed box on the manufacturing, you can't outsource the product. And the person who is buying the product is buying -- sees the quality and also the brand, both of it. So that gives us an added advantage, and it also gives an added advantage that we are now addressing a bigger market, pipes is a much bigger market than other products. So gives a leeway for continual sequential growth year-on-year.

And sir, last time, we had discussed a bit about in your last con call about shifting -- you import a lot of this faucet from Turkey, I believe. So you were talking about shifting part of the production to India. So how is that going? I mean...

I think your question is shifting the imported sanitaryware into our factories. Your voice is not that -- that's why I'm repeating.

Yes, sir.

Yes, Sudhanshu?

Yes. So we -- I think 2 quarters ago, we talked about our initiative around reducing our dependence on imports. So I'm happy to share that we are progressing very well on that. In fact, we're developing most of our models in-house right now. And our import contribution of sales which is 16%, 17% has gone down to now single-digit percentages. And we're also seeing -- we are -- of course, we're already seeing great improvement in our margins. A part of that is, of course, contributed by the fact that domestic procurement is actually doing pretty well. So yes, to answer your question, yes, it's progressing very, very well.

And sir, broadly, could we expect the current year top line to beat last year, I mean, overall? Because half year has been muted.

So generally, you see like any organization to talk to, they run a strategy. They run a plan. We are very confident. We have given a guidance that we'll outgrow the market ranging 1 -- 1.25x to 1.5x. And we're still holding on to that in a medium-term range, but definitely there are some headwinds in some quarters for the industry, for the company as such. So we generally don't give any guidances on the coming -- forthcoming quarters as a matter of prudence and certain factors. But our plans to grow and our plan to capture the market in terms of the guidance is already given to stakeholders.

Next question is from the line of Jayesh Gaygol, an individual investor.

Am I audible?

Yes, you are.

Congrats for the great numbers. I just want to -- like what is the net debt right now? And is there any debt restructuring plan in the future?

So you are looking at the consolidated debt.

Yes, sir.

Consolidated debt on the balance sheet today is around INR 835 crores, and which has increased slightly over the March figures because of the low trend in sales, some inventory accumulation has happened, which we feel that it gets liquidated in H2. On the CapEx, which is relating to Roorkee has -- the part of that work has started. And also, we are investing extensively in terms of our distribution reach to the market in terms of opening our display centers. So we are even seeing in terms to get to the future growth. But definitely, we have given the guidance for a debt reduction over a period of time and as the profit earned through, so we'll repay it.

Sir, my next question is a little bit regarding the company's demerger. Actually, we did a demerger in 2019, our AGI Greenpac and Somany Hindware. That and the valuation of AGI Greenpac was a little bit less, lesser than overall Hindware. So I want to -- as an investor, I would say that AGI Greenpac gave multiple return to their shareholders. And it was not in the case of Somany Hindware. Now it is a Hindware combination. So do you think that demerger was not in the favor of Hindware and more in the favor of AGI Greenpac?

This demerger is now almost 5 years old, and there was no favor given to anybody. One shareholder of HSIL got one share of SHIL. So it's technically a sort of a bonus for everybody. So many investors, they were not bullish on that particular company. They might have sold. But today, the cycle reversal has happened. In fact, both the companies are performing very well. Only answer which I can give you is on the combined thing, let's say, immediately before the stock got split, the stock was at INR 220. But today, if you see combined stock of both the companies together, so it is above INR 1,200 -- above INR 1,400, INR 1,500. So if anybody would have stuck with us from a pre-demerger basis, he would have made 7x in the last 4 years. So there is a substantial value creation. It's not that demerger is good for one and not good for other. There was a rationality to a demerger because each of the businesses had a growth plan. And whosoever -- equities are long-term in nature. So whosoever stuck with us for a long term have made a return on it.

Okay. Sir, any further -- there is any further plans of demerger because we now have four business like pipe, retail and the bathware. Is there any chances of another demerger?

No. Demergers are not done because there are businesses. Demergers are done on some rationality. So nothing as such even in the thoughts.

Next question is from the line of Nikhil Gada from Abakkus AMC.

Congrats on a...

You need to be louder. I'm not able to hear you clearly.

Is this okay?

Now it's okay.

Yes. So sir, the first question is on the sanitaryware and faucets business. We have seen a muted sort of performance in first half. Do you think that second half would be any better? Or you still feel that as you know, this sort of trend will continue?

Yes. So I think we've seen at an overall level in Q1 the markets to be muted, especially also on the affordable and mid segment. And if you go geography wise in the Tier 2, Tier 3 markets, where we've seen a bit of a slowdown. There can be multiple reasons for it, of course, higher interest rate and inflation is one of the key reasons is what we believe. So expectation, of course, is that the second half is going to be much better. That's what we expect. No doubt about that. I think that was something which we were pretty sure that H1 is going to be a little tough, and H2 is going to be a much better part of the year. And that's exactly how I think it's going to pan out is what our view is. Very difficult for me to give any numbers here, but -- and as an organization, we do not give any guidance. But to answer your question, I expect the second half of the year to be much, much better.

We have generally seen when the market is slow, especially during the COVID times, the market was slow. The recovery post a particular event becomes very, very fast. But there is a subset of activity in the market even if [ that leads to ] slowdown, once the revival of demand happens, then the whole thing will move very fast.

Yes. And also around -- so this is a thing around revenue. But of course, on the profitability side, we've done well. We've been able to really deliver a set of numbers in terms of growth in our margins. We've given multiple guidances not just around revenues, but also around the way we'll be running our business in terms of improving profitability. I think I'm sure you've seen numbers even in such difficult situation, our H1 margins are improving.

Yes, sir. So the next question was on the margin front. You mentioned that the import share has come down to now single digit. So I'm just assuming from that perspective, have you been able to capture most of the benefits of the mix shift in margins? Or do you think that this will further improve in the coming quarters?

No, this is not complete. This is -- in my view, this is just the beginning of the improvement. And in fact, if we go over a period of next 2 to 4 quarters, in fact, [indiscernible]. This is -- and this was one of the biggest initiatives. There are lot of other things also we are planning. So margin improvement is something which is a high focus for us. And 100% localization has not yet happened. It is something that is still going on. We will see the benefit as we go forward.

Understood, sir. And just regarding that same point, we were of the understanding that once the import comes down, we will see an improvement in the working capital cycle in sanitaryware and faucets. Maybe it's a timing thing, I don't know, but we were also talking about bringing this down to 100 -- below 100 days in -- when we acquired the plant from AGI. So it's been almost close to now 18 months, but we're still seeing this working capital cycle in the range of 120 days. So just any comments on that, please?

Yes. So first of all, on the margin side, we expect our margins to improve nearly 200 basis points over the next 1 or 2 years. So 1 year we can say about 2 to 4 quarters. That's one point I wanted to mention. Secondly, on the working capital side, our -- so working capital is for the constant thing, right? So we did not see sales as much as we thought we would. There was a bit of an unsold inventory, which is actually in Q1, Q2 we've seen -- so if I look at -- if I break down my working capital, we see an improvement on our inventory side by nearly 8 to 10 days, while we have actually seen a bit of an increase in our receivables, which is actually netting off. And you see a bit of a very minor reduction of 2 days in the sanitaryware, faucet side of the business. So there is a bit of seasonality in this entire exercise. When I'm doing -- when I'm actually reducing my dependence on international markets, I can't go and tell my importers -- the exporters, the people who are buying from channel that I'm going to reduce your business. So I maintain a bit of inventory. I manage that by managing my inventory in a certain way because there's certain a bit of planning I have to do for localizing the same products in India. So as a -- because of this kind of a reason, we've not seen significant improvement but we've seen about 8 to 10 days improvement on inventory side. I certainly believe by the end of the year, you'll see these numbers coming down much, much lower than what they are currently there. And then an exercise on this is going on extensively. Inventory has come down, it will keep coming down. And at overall working capital level also, you see a huge improvement.

Sir, what according to you would be the best working capital cycle in sanitaryware and faucets? Or what would be your target? Would it be 80 days, 85 days, 90 days?

So I would definitely love to have something just closer to it. Why not lesser, in fact? I mean, why 80, 85 days.

That's the industry standard is what we are made to believe. So just from that perspective.

So I totally agree with you. I think our numbers should be closer to 85, 90 days in the first stage and even going lower than that in the second stage of our reduction on the working capital. And I can assure you that's something which is on the cards. It's not too far away when we see these numbers. When a market, which has been growing at 16%, 17%, 18%, we've grown last 2 years at upwards of 40%, 50%. And suddenly, you see 2 quarters and the growth come down to single digits, your inventories come under pressure. But as you recalibrate your demand cycle, you recalibrate your existing inventories, these numbers are again start coming back to normalcy. And you have to remember that we are coming from -- except for the last quarter, if you go back the previous 8, 10 quarters, we've seen growth of upwards of 35%, 40%. So suddenly, when the growth comes down, there is a bit of a lag effect on inventory side. And that's something which is going on right now. There's nothing we should be alarmed about. It's something which is basically a part of the reduction, which will happen. I mean, there's a technical term in supply chain called bullwhip effect and that's something which is happening right now.

Got it, sir. Sir, next is on the plastic pipes business. One of the participants did ask about running short of capacity. And you have mentioned that we have space in Hyderabad and we plan to enhance. Is there anything as of now on the anvil in terms of what kind of capacity expansion we are planning and what kind of CapEx do we allocate to that? And by when can this capacity be onboard? Hello?

Yes, Rajesh? Rajesh, you're there?

Yes, yes, yes. Nikhil, am I audible?

Yes, sir.

Yes. Nikhil, we have already ordered of the machines. And I think from December onwards, we will be adding up the capacity in our existing plant since these machines take a lot of time. And we will be able -- we have added 5,000 metric tons in the past. And we'll be adding up a similar 5,000 to 7,000 metric tons in the next quarter. That will give us a leverage to go to the market and then suppliers.

So if I got you correctly, you're saying this 48,000 of annual capacity will go to 53,000, 54,000.

So presently, we have already added up. So we are at 52,000 -- we were 47,000. We are at 52,000 now. We will be adding up 5,000 to 7,000 more.

So that basically we'll go to around 58,000 you're saying?

Yes, yes, yes.

And the CapEx for this was how much, sir?

Almost around we have -- just around INR 19.9 crores.

Understood. And after this expansion, are we maxed out at Hyderabad or we can further add in Hyderabad?

No, no, no. We can further add up. We are planning in the last quarter also because we had already created a second plant, if you remember last time. We had the capacity.

So okay, fair enough. And Roorkee would definitely come in 3Q FY '25?

Absolutely. Absolutely.

Understood. Fair enough. So just then one last question if I may. In the overall balance sheet, if we see, sir, there has been a CapEx of close to INR 70 crores. And I get this INR 20 crores, I think, it's for pipes. Can you help me understand what is the remaining INR 50 crores for?

You're talking about pipes?

No, sir, overall, overall at the company level. When I see the cash flow statement -- sorry, so CapEx of INR 70 crores.

So question about CapEx? So there is incremental figure of around INR 50 crores on the development of various, what we call that, retail spaces which is for Hindware business and not [indiscernible] pipes and tiles also. So overall INR 20 crores, we have invested into development of our retail spaces. So this is one thing which is there. There is additional spend in sanitaryware plants because we are changing those capability [indiscernible]. So another INR 14 crores, INR 15 crores have been spent there.

So that would be INR 35 crores and INR 20 crores for pipes. So that is INR 55 crores and the remaining INR 50 crores would be, sir, for...

Where are you seeing the INR 100 crores is in the overall cash flows.

Sir, I'm taking the first half cash flow statement. And that I've seen the purchase of properties, which is around 7 this year.

We've given you a break-up of how much. We've given you break-up of pipes.

So I assume pipes...

Pipes is around INR 28 crores. Pipe INR 6 crores is at Roorkee and INR 22 crores is at Isnapur.

Next question is from the line of Darshil from Crown Capital.

I hope I'm audible.

Yes.

Sir, most of my questions have been answered. So just wanted to get color on consumer business. So just how are you faring in that? And when can we expect to maybe breakeven in that? Because it is dragging our profits by some -- a little around INR 12 crores like it's at half of what our PBT is. So just wanted to get a sense in that. What is our plan in our consumer appliance business?

On the consumer business, see, we -- as you know we started with a large portfolio. But I think what makes sense and we realized over the time is that some focus on the entire operations will have a better already better outcome. So not only because of better allocation of resources but also what we have seen right now in this quarter that there has been a reduction -- substantial reduction in inventory when we started on just 2 or 3 main drivers. As already shared, we reduced our working capital by about INR 44 crores quarter-on-quarter basis, which is a result because we started diverting resources only to the 3 main drivers where we feel that we have a -- would like to win. The first one being the kitchen business, where our margin is also good. And we expect that going forward, we will have good growth there. The product category, the response of the consumer as well as the trade is of -- it's a very good nature as far as the business is concerned. The second one, of course, water heaters because we have our own manufacturing and that has substantial improvement in the quality of the products. We stand today amongst the leaders. So -- and we are a late starter into this business. But as far as the quality of the product is concerned, we are much ahead of many of our peers. And then the third one, which is cooler business, though, which has a seasonality angle to it, which has been visible in the last 2, 3 years. But our share on online business is much higher as compared to our overall share in the market. We have disproportionately high share as far as the online business is concerned for coolers. We do want to focus on these 3. And we are hopeful that in the coming quarters we'll see a much better on the operations and overall business front as well.

So sir, is it fair to assume that maybe in FY '25, we'll be able to breakeven on this business, sir? Will that be a fair assumption?

I would not want to give a forward-looking forecast of that, projection of that. But let us see how things fare out if the consumer demand, which is -- we've seen -- all of us have seen has been muted in the last 2, 3 quarters. As we see that improving because a lot of the spike that we see is the uptick because of the business -- because of the festival season. And if this is same and we have good summer, then definitely a much higher chances of getting there. But we'd like to see as it goes.

Next question is from the line of Mr. Udit Gajiwala from Yes Securities.

So firstly, you had last time mentioned that we'll be looking to repay INR 100 crores debt annually. So just wanted to check the progress. Are we still maintaining that? Or are there some alterations?

So typically, when we say that INR 100 crores debt repayment that was in a contextual sense that if we don't invest into additionally into the additional facilities, obviously, the profit which we're going to earn will go towards the reduction of the same. But as you see, like we are investing into pipes because there is a demand. And the debt -- or the internal growth instead of going toward the debt reduction is getting towards there. So that we are keeping in the future in terms of there is a demand in this, but I think the debt reduction is still on INR 100 crores, but it may take another 6 months or so.

Understood, sir. And sir, what will be the total CapEx for '24 and '25?

'24, we have already spent odd -- INR 66 crores, INR 70 crores to date. And the major chunk which has to be spent is on the Roorkee pipe plant wherein the total CapEx is INR 152 crores, of which just INR 6 crores have been spent. So I think in the next 18 months or so, we should be doing this the balance, which is over INR 140 crores, INR 145 crores. And a part of this, we'll continue our initiative in terms of development of our opening of the retail plan and strategy. So we'll invest INR 15 crores to INR 20 crores more there in terms of -- this I'm talking about 12 to 18 months next. And some CapEx on the IT side because we're keeping organization IT ready, so we keep investing another INR 2 crores to INR 3 crores on the IT readiness which was there in terms of going digital. These are the broad heads of CapEx and some CapEx on the sanitaryware as I told you, would be there in terms of the changes which we are doing, so another debottlenecking CapEx of around INR 10 crores, INR 15 crores.

Next question is from the line of Manish Beria, an individual investor.

Yes. So I just want -- I have seen like Hindware doing a lot of advertisement in this World Cup and things like that. So just wanted to see what is the advertisement budget this quarter versus last year, let's say, just to get an example like how much is exceptional advertising cost or budget this year.

Yes. So you want exact number?

Broadly, I mean, something to -- just to make out like what would be the normalized margin or something like that if maybe advertising doesn't come back to normal fees, let's say.

Yes. So, I mean, for the year, we spent about 4% and basically phased across the year. And we saw some opportunity because of the cricket World Cup. We spent extra in Q2 [indiscernible].

So basically, the Q2 was higher versus last year, right?

Marginally higher.

Marginally higher, okay. The second question could be -- in the bathware, I mean, we are already doing 16% EBITDA margin. And I think like there are a lot of operational things that you are doing that will expand import substitution and things like that. So that aspiration could be like 20% margin at some point in time?

No, I did mention sometime back that we're looking at increase of about 200 basis points over the 2 years period like you should actually keep with you. So 20% is not something which we mentioned. We mentioned it clearly around 200 basis points, say anywhere between 18 to 18.5.

As there are no further questions from the participants, I now hand the conference over to the management for the closing comments.

Thank you, everybody, for joining us on the call today. We understand the market [indiscernible] but I think this gives us an opportunity to relook internally and build more efficiencies into the system in order to be cost competitive. Be rest assured, I think we are working on the best strategy to put best foot forward in terms of keeping the momentum of growth as well as earnings on the book. Thank you very much. Thanks again. Thank you.

Thank you. On behalf of Yes Securities, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.