Jyoti Resins and Adhesives Limited ($514448)

Ladies and gentlemen, on behalf of Kaptify Consulting Investor Relations team, I welcome you all to the Q4 and FY '26 Post Earnings Conference Call of Jyoti Resins & Adhesives Limited. Today on the call from the management team, we have with us Mr. Utkarsh Patel, Managing Director; and Mr. Samit Shah, Chief Operating Officer. As a disclaimer, I would like to inform all of you that this call may contain forward-looking statements, which may involve risks and uncertainties. Also a reminder that this call is being recorded. I would now request the management to brief us about the business and performance highlights for the period ended March 2026, the growth perspective and vision for the coming year, post which we will open the floor for Q&A. Over to the management team.

Good morning, everyone, and thank you for joining us today. On behalf of the management team of Jyoti Resins and Adhesives Limited, I welcome all our shareholders, investors, analysts and stakeholders to our quarter 4 and FY '26 earnings conference call. FY '26 has been an important milestone year in our journey, not just from a financial standpoint, but from the perspective of building the foundation for the next phase of scalable growth for the company. Beginning in second half of FY '26, we initiated a comprehensive transformation journey across the organization, spanning HR, technology, sales, marketing, distributions and operational processes. While these initiatives are still in the early stages, we are encouraged to see the first sign of tangible outcomes emerging from quarter 4 onwards. Despite a challenging operating environment during the quarter, we delivered a strong performance with revenues growing by 18% Y-o-Y, led by nearly 16% volume growth during quarter 4. EBITDA margin stayed steady at nearly 27%, which was in our range guidance for FY '26. This revenue performance for quarter 4 is our highest ever quarterly performance in our history. These numbers reinforce our belief that the strategic directions we have undertaken is beginning to translate into stronger executions and market traction. During the quarter, we also undertook one of the largest brand building initiatives in our company's history. Leveraging our association with Pankaj Tripathi and as part of our national footprint expansion strategy, we partnered with Jio Hotstar during the ICC T20 World Cup to execute a high-impact ATL campaign. The objective was clear: to significantly enhance brand visibility, strengthen top of the mind recall and position our brand among the fastest-growing wood adhesives brand in India. We believe this investment in brand equity will create long-term benefits as we expand into our newer markets and customer segments. What makes this performance even more encouraging is that it came despite multiple external headwinds, including an extended monsoon season in H1 and disruptions arising from the West Asia conflict in quarter 4, which was during one of the most critical business periods of the year. The resilience of our channel partners, employees and the combined execution capabilities helped us navigate these challenges effectively and maintain our growth momentum. Looking ahead, we remain highly optimistic about the India growth story and the long-term opportunities within the wood adhesives industry. We are working aggressively to deepen our presence in existing markets while simultaneously expanding into new geographies. As part of this strategy, we are commencing operations and strengthening our footprint in new markets of Odisha and Chhattisgarh during May '26 itself. At the same time, we continue to consciously strengthen our presence in the OEM segment. Our initial efforts across West and Central India have delivered promising results, giving us confidence to further scale this business. Going forward, we plan to expand into additional major metro markets with a focused OEM distribution strategy aimed at gaining meaningful market share in the category. Overall, we believe the company is entering a new phase of growth driven by stronger branding, wider distribution reach, improving organizational capabilities and deeper market penetration. While we remain mindful of macroeconomic uncertainties, we are confident that the momentum built in quarter 4 will continue as we progress on our journey towards becoming a INR 500 crores plus revenue company over the next 2, 3 years. We are now open to taking the questions.

[Operator Instructions] So till the question queue assembles, we'll take a question that has come in the chat from one of the participants, Mr. Arjun Shah. How do you define active carpenters on your platform firstly? And where do you see this number going in the coming future with the new states that are entering? Is the number seeing any traction? Is it increasing? Or is there some level of churning, where carpenters have become inactive after a while? Do you see that happening a lot in new states?

So in this 19, 20 years of journey, we have touched almost 3,50,000 carpenters in this journey. And from that, when we started this digital platform in 2018 around, so till now we have registered almost 2 lakh carpenters into our platform. So from that, almost 60% are carpenters very much active, so who are using regular our products and making these loyalty points. So now into the future and nearer expansion for this loyalty program is that we are aiming for more, almost 25,000 to 50,000 carpenters, to onboard and engage with our loyalty program as we are now penetrating and going deeper more into the newer states, UP, Delhi, West Bengal like, and also now we are adding the Odisha and Chhattisgarh. So new registrations will come into the pipeline. So we are expecting 2,50,000 carpenters end of the year, we can say.

So the second part of that question is, do you have a target number in mind for the next 2 to 3 years?

So we are aiming that at least 3 lakh carpenters should be registered as we have gone detailed through the data, and we have the assumptions about the per shop carpenters or that data we have. So we are aiming 3 lakh carpenters nearer future.

The second question is, the receivables this year have gone up in line with the revenue. Would that imply that days of sale outstanding in the new states is a lot higher? And would that also mean that receivables increasing in states where we already have an established business, why is this happening and where do we see this number normalizing?

Yes. So yes, you're right that the number has gone up last 2, 3 quarters, but we are aiming for that nearly what was we were into the '24 '25 that was 120 around. So we are aiming that within 2 quarters we'll come with that. And the reason is, yes, we can say that newer state when we are starting that, we need to build more relationship and more engagement with the new dealers. So it is taking time and maybe some -- few more days going with the debtor side. So in an existing state also, we have been last 2 quarters aggressive into the sales front. But these all sales are very much secure as we are dealing with these dealers since so many years. So that will -- that can be maintained within 2 quarters.

Sure. We'll go to the participants who raise their hands.

Sir, we'll take the first question from Saket Kapoor.

Sir, firstly [Foreign Language] for the current year [Foreign Language] volume guidance [Foreign Language] with the type of capacity addition that you have outlined in your presentation. If you could just give the ballpark number. What are we aspiring, sir, for the current year?

Yes. See, I suggest that we have internally as a Board decided that we don't give the specific numbers as the geopolitical issues are running. Also, see, if we go about the last 8 quarters, so almost from 8 quarters, 5 quarters we have delivered almost 2 figure of growth. And if we talk about the FY '25, we grew by 11%, FY '26 we grew by 8%. So [Foreign Language]. So yes, we are expecting that we should aim for the 15%, 20%. But I think it is better that this quarter is very much not the suitable time that we can disclose. I think because of the situation getting normal, quarter 2 is the thing where we can go for the 9 months growth for the exact figure. So -- but we can expect about the -- obviously, we are aiming for the 15%, 20% of growth for that.

Sir, actually, [Foreign Language] Slide #15 [Foreign Language], 15 number page, therein you did give us some understanding of how the period between FY '27 to '29 looks, whether in terms of the brownfield as well as the greenfield CapEx that we are contemplating going ahead. So only factoring that into what will the numbers translate into or the growth number translate into was my question. So if you could -- when you are giving us an understanding about the brownfield expansion, which will be live before quarter 2 and the greenfield CapEx also. So articulating those 2, what should be [ territory ], between 19%, 20%, sir?

Yes. See, I can explain you how this business model is. Right now, we are operating about 65% of our capacity. So basically, it's a 2,000 tonne capacity per month, and we have done almost 80% of brownfield expansions. And now within 1 or 2 quarters, it will be finished and then the capacity will -- goes to the 3,500 tonnes per month. So it is -- now the plant will be capable to generate almost INR 600 crores, INR 650 crores of revenue from that. So we are aiming for that to reach within this 2, 3 years of INR 500 crores of revenue. So we are targeting about that. If we achieve 15%, 20% of growth from here, so that is a achievable number. And the thing is, in this business model, the 4 quarters jumps very high into the volume. So we want to be advanced with the capacity building because a few months are -- as an example, if we talk about the March, we have crossed more than 2,100 tonnes per month. So these are the months where the volumes go high. So we want to be very much prepared in advance so we don't lose any market share. So this is how the guidance is that.

Okay, sir. First...

Yes, yes. Yes, please go ahead.

Yes, sir. Sir, a small point in terms of the RM part. Sir, if you could just explain to us how the RM have behaved in terms of the crude oil and the geopolitical issues? And how have these trending for the month of April and May in terms of the business setup and the business environment? And one financial question was, sir, when we look at our current liability part, it is to the tune of INR 95 crores. So that is the carpenter bonus account that we are maintaining. So the net cash balance should be less or this number?

So in the RM part, see vinyl acetate monomer, VAM, is the key raw material of our product. And yes, of course, it is [Technical Difficulty]...

Sir, not getting your voice. Hello?

Yes. I am audible now?

[Foreign Language].

Yes. So the RM part, the VAM is the key raw material of ours. So it is crude derivatives. So yes, it is affected because of this situation. And I believe that if the situation get normal at the world level, then it can be -- come within the line within 3 months around. But it is very much early to say that because there is -- the situation is not stable right now. But we have taken the price rise, and almost 70% price rise even the effect from the 1st May. So maybe it can to -- give the support to the company regarding this.

70% you mentioned, sir? I missed your number.

Almost 60%, 70% price rise we have taken, but from the 1st May. So not April month. From the 1st May only.

We'll go to the next participant. [ Videsh Ashar ], you can go ahead, please.

Sir, firstly, congratulations on achieving great sales growth in this quarter, really commendable. And best wishes for continued growth. Sir, I have 2 questions. Firstly, in terms of sales growth, what percentage has come from price hikes? And how much is the volume growth? And also of the incremental sales versus last quarter, how much from existing stronghold states such as Gujarat and Maharashtra and how much from developing states, like you mentioned UP, et cetera?

So we grew by 8% in the volume front. And there is not much difference versus that because the price rise has just got effected since last month. So last year was the same price what actually were at that time. So 8% is the volume growth for the entire year.

We will move to next participant, Pavan Kumar.

Sir, I wanted to understand what will be the advertising expenses that we are planning for FY '27. I guess we have spent around INR 53 crores, INR 54 crores this year. Would it be as a portion of the revenues? Or would it be in -- I mean, are we assuming some growth or expecting this to be constant?

Okay. So for the advertising and trade marketing, actually, we have spent 4% of our revenue right now. So it is now INR 54 crores because is -- I think maybe you are saying with all the sales promotions offers and what the loyalty programs are there. So if we talk about the trade marketing and brand communications, we have invested 4% and we are aiming to take this at least 6% to 7% for coming years.

This 6% to 7%, we'll take it in how many years?

From this year. 6% to 7% from this year. And I think we'll continue this at least 3 years from now. After that, maybe...

And what will we spend this on exactly in the sense...

Sorry?

That 6% to 8% (sic) [ 7% ] incremental money?

Can you repeat the question, please?

Where will we spend this incremental money of 3% incremental that we are planning to do?

So see, mainly, we are into the trade business, so will depend upon our influencers more. And they are very much important part of that, this journey. So we'll invest almost 70%, 80% of total budget to the trade marketing and 20%, 25% for the brand communications. So these all are the increase of this. Percentage will go to the more carpenters, to engage the more carpenters into the loyalty programs, to make the more awareness of the product, visibility of the products, into the shops also, in shop branding also. So it will be the mix strategies to invest this fund into the promotion of the brand.

Okay. And given we are talking about sustainable 65% gross margins, what is the kind of EBITDA margin band which would be sustainable given the current scenario?

So 23%, 25% EBITDA margin we have always guided for the longer term. So we are aiming to sustain that. And yes, of course, we are aiming for the gross margin 65% for that. But in this situation, this quarter may be affect our gross margin because of the sudden price increase into the VAM. So I think maybe this will impact all the industries who can concern about this raw material prices.

Okay. And one last question. Have there been any price hikes taken by our bigger peers as of now for this business?

So in April, they have started and 4% to 5% price rise started to taken. And from the 1st May, it is almost 10% has taken. So it will -- I think it will effect from the 15th of May, we can say. Mid of the quarter the 70% effect will come into the price rise.

We'll take a follow-up from [ Videsh ].

There was 8% volume growth -- in terms of sales growth, 8% was volume growth. Also, sir, I wanted to know in terms of the state-wise sales, our main stronghold states are Gujarat and Maharashtra. Just wanted to know how much percentage of our revenue this quarter came from new states, sir. And...

I cannot disclose the detail of the state-wise volume growth because of some restrictions. But you can mail us and our IR team can help you do that. I hope you understand that.

Yes, yes, sir. So one more thing was, sir, the receivables have gone up from INR 125 crores to INR 160 crores, which makes our receivable days 4.5 to 5 months. Sir, what was the -- so as you stated, the reason was because of the new states and you need to give it some time. So when do we -- what is our plan in the medium term to improve the working capital cycle with the new states?

Yes. So actually, it is a 2 to 3 years of cycle in newer states. As we are into B2C business model, so it takes 2 to 3 years to at least get all the engagement with the carpenters, influencers or very much visibility of the product, the confidence of the product to make the relationship with the dealer carpenters. So it is the entire process and there is -- it's a part of making them comfortable and doing the ease of business with us, the policies at that level, so we can get the more market share. So this is always the strategy of Euro since last 18, 19 years. And now we have very much experience that -- if you see about all the balance sheets, we are not above 1% of the bad debts. So it is very much controlled. And it is all about the relationship with the dealers and the carpenters. So these are the strategies that we are moving into the newer states. But we should aim for at least after 2 years, that state should be very much stable and we can at least maintain 120 days of debtor cycle. So we are aiming for that within these 2 quarters, we can control that.

Sir, we will take the next question from Venkatesh.

My question is about -- last participant asked the same question. It is more about the receivables. So if you can give me a little more clarity on receivables because from last 4 quarters, it kept on increasing. Of course, you answered it. A little more brief on the receivables, sir.

Sure. So see, we have differentiated ourselves since 2013. Earlier Euro was with the typical distributor model that we make the channel partner distributor and the secondary payment is the responsibility of the distributor. After that, we have moved to the stockist level. So we have created 54 branches across these 14 states. So these are the inventory transfer to these 54 branches. And from that, we supply to the retailers. So that sales come to the company in revenue when the sales goes from the branches. So it is directly to the retailers. So our debtors what INR 150 crores are there, that are very much spread to the 12,000 across retailers. So if we go about the overdue amount -- so it is not above the INR 1 lakh or INR 2 lakhs per dealer. We have mentioned that into this investor presentation also. That can give you more clarity how this model works. So it is very much spread. So that is not -- we cannot risk the fund. And that's why the reason that we are able to grow that much. So this is our strength. So I have never guided that about this can be the cycle below 120 days. But if we are aiming that if it is maintained 110 days, 120 days, then company has enough strength of the cash flow also. And whatever the fund needed for the greenfield or any expansions, that can easily achievable by the internal accruals. So this is how this model is. So yes, of course, it is -- 150 days, 160 days is a little bit higher, but we can control. And if you go about the past, if you see about the '21, '22, '23, we have controlled that within 118 days around. So within this next 2, 3 quarters, we'll control this.

Can we take it in this way in the sense going forward, you will be able to maintain between INR 1 lakh and INR 2 lakhs for each dealer and you will bring down the inventory -- cash flow level to 120 days. That's what you mean to say?

No, no, no. See, overdue payments -- so if we talk about the 150 days, 140 days about that are the very much overdue payments. So if we go into the detail of the dealer, so it is not much than INR 1 lakh or INR 2 lakhs per dealer. So it is not that much risk about the company. And we can maintain that with making the good follow-up, good relationship with the dealers, with the understanding of the markets also. So it is controllable. And in past, if you see about that, company has controlled that debtors within 115 or 120 days. So it is doable, but we were into the growth journey last 8 quarters. So because of the expansions of the market, this much has gone high. But it can be controllable within 2 or 3 quarters from here.

We'll take the next question from [ Mark Singhivi ].

I wanted to ask about how much inventory of VAM do you have right now, for how many months?

So we are running with the inventory of 25 to 30 days.

Okay. But do you expect the price to rise further, right?

It is already rise. Not more price from here because it is almost 100% price rise. If we talk about the VAM, it was earlier INR 80, INR 75 around. Right now, it is running INR 160, INR 180 around.

Okay. And second thing is we are going to target OEM distribution. So we were not doing this earlier?

No, it is not that. So we have started this OEM business since 2020 around. So right now of our revenue, 6% revenue is coming from the OEMs. But as OEMs for the metro/mega cities -- now OEMs are doing very good into the growing phase, so we also take the leverage of that. And the same white glue who are using near the 4 product categories into that, and we are targeting also and now onboarding more talent to grow this segment. So we are assuming that after 2, 3 years, our revenue will be 85% into the retail and 15% around into the OEMs.

Sir, we'll take the next question from [ Vatsal ].

Sir, as we have seen that you have a FD of INR 140 crores. Since it's a long time that you are sustaining with this FD, why don't you invest your money in good mutual funds or stocks? Or why don't you buy back your stocks even? And other part, why don't you give a dividend payout ratio, giving more dividend to the investors, if you have such a huge amount of money in your FD. That is giving you a very low margins -- very low interest rates.

It's a very good question. Yes. So if you see, last 6 years, we have given 15% of our PAT to the stakeholders as per the dividend, and that is very much maintained. One thing is that -- see, this FD is about the -- also the -- there's one liability, INR 90 crores, INR 95 crores liability is there. So it is there. But -- so the internal accruals, this fund we will need from the growth. So as we are now moving to that journey that -- as a Euro now, we are almost reaching the second largest player, and there is a huge gap between the industry's dominant player and Euro. So now we are moving towards that. So we need this fund to utilize into the market expansions, in greenfield expansions also. So see, we have started about that. If you see about the investment into the advertising, branding and trade marketing, what we have done. So last year, that was 1.5% around. This year, this is 4% around. And now, we are moving into the 6% to 7% around. And we will continue this 6% to 7% or maybe 8% around next 3, 4 years to grow and capture more market share. So right now, the company needed this fund and the competitions will be very much tougher in coming years as we will cross above INR 500 crores of top line. So this is not the time to diversify this fund. And -- but we can have the regular meetings with the Board also, and we are also working jointly closely for these strategies. But right now, it is not into the plan.

Further to add to this, if you see the latest balance sheet, we have deployed money into liquid funds to the tune of INR 46.8 crores.

We'll take the next question from [ Dixit Doshi ].

Firstly, just a clarification. You mentioned 15% to 20% growth. So this kind of growth we are targeting a volume growth or the overall company level growth?

See, volume growth -- the growth should be always by the volume. And if we talk about the last year, it is not much difference, 8% was the volume growth and 11% was the revenue growth. So we are targeting that at least 15%, 20% of volume growth we can achieve to achieve over INR 500 crores of benchmark.

Okay. And when we assume or target, say, 15%, 20% volume growth, our established states, let's say, Gujarat, Maharashtra, those states will grow at what, high single digit and the additional growth will be from new states. Is this the fair assumption?

It is a fair assumption. But still -- if we talk about our 5 mature states, still there is very much opportunity line, if we talk about the Karnataka, if you talk about the Maharashtra. So yes, we can say that, that growth can also contribute, but it will be parallelly newer states also. So all put together, efforts will be done as going more deeper into the states and also wider to the states.

Okay. And lastly, you mentioned 60% to 70% price rise we are taking from 15th May.

Right.

Sir, we'll take a follow-up question from Saket Kapoor.

Sir, as a percentage of revenue which we booked, what is our RM contribution and what is the continuation from VAM?

It is almost 90% of VAM.

Okay. So sir, if we extrapolate that, then the revenue for the current year would be rising in terms of the price hike that we have taken. And how should we factor in the revenue number for the current year if we are increasing the prices by 60%, 70%? That will translate into 60%, 70% growth in revenue? Or I'm missing something, sir.

No. So it is -- see, it is too early to say because just from the 1st April the price rise has started. And now, after 15th May, it will be again the second price rise. And the situation is not now stable. So we have not correct assumption about that the VAM prices will be stable for the next 12 months or 3 months or 5 months or -- we don't know about that. So it is too early to say that what will be the revenue impact into the growth percentage. But right now, I think we should focus for the volume growth as the situation is not normal right now. So it is too early to say with this quarter. I think in quarter 2, we'll get more clarity about the consistency of the RM prices.

And sir, will this lead to demand destruction also? Or what is the feeler we are getting from the demand side of the story when we look our product which goes into the furniture segment? Total, sir, cost [Foreign Language] if somebody takes that and undertakes an activity? So how can you -- just give us some color on the same because that is -- these are phenomenal rise and needs to be absorbed. Otherwise, that could lead to demand destruction. Or what is your take on this?

Sure. So it is almost 5% to 10%. So if we talk about if the furniture cost is total INR 10 lakh, then INR 50,000 to INR 1 lakh adhesives are used into that. So it is 5% to 10%. And see, it is about -- yes, it is impacted as the situation -- the gas cylinder situation was not normalized the last 2 months. So always the labor think about the migrate to their natives. So mostly the carpenters are from the Rajasthan and UP. So we are seeing that little traction into that. They are migrating into their particular states because of the LPG issues and everything. But it has not much impacted as quarter 4 the volume was good. So I hope that within this 2, 3 months, the situation will get normalized.

Okay, sir. Only to conclude. So as of now [Foreign Language].

Not much. See, I believe that there is a huge expansions into the current cities, metro/megas. The governments are now moving towards the India growth story. So in the longer term, it is not much -- it will be affect. Yes. So it will maybe affect 1 or 2 months, not more than that, I think.

Sir, we'll take the next question from [ Bhavani Mishra ]. Sir, we will move on to [ Harsh Chaurasia ].

So I have a question. You mentioned in the metro markets, we are growing around in a high single digit. But recently, I did a channel check visit to almost the clusters of carpenter and wood market in Mumbai. But where I observed we still have outlets out of 3 out of 1 store we have -- so despite being a metro market, while there is such a low penetration in stores? And I'm not talking about small stores. I'm talking of big stores. And being a mature market, our product not went to almost all the stores. And so I'm not understanding that why are we moving to new states because we are still -- I believe we are still underpenetrated.

You are very right that because it's an ocean of that. So that's why we have that opportunity and that's why we are aiming for that. It's more than INR 7,500 crores of market, and we have reached almost INR 300 crores. Can we...

There is background voice coming from your mic.

Is it correct now?

Yes, please.

Yes, yes.

So these are the opportunities lies into the market. And you are very right that it is a -- we can say that out of 3 or 4 counters, we are present into one counter. That's why we are into the 20% of market share into the Maharashtra. So it is long miles to go from here. And that's why the growth will come from the existing states also and the newer states also. So that's why we have decided that we'll state these 14 states plus 2 states we are adding, and we are going much more deeper. So we have not started in Chennai yet. We have not started in Kerala yet and not Jammu Kashimr yet. So these are the reasons that now we want to go more deeper into that. And this is the opportunity actually into the market. So we -- it is the doable growth, that, if we are aiming for INR 1,000 crores, INR 1,200 crores of revenue, it is doable.

So my reason to ask this question was because why to go -- like obviously, it is very good to go in new states. But where we have already built a relationship with the dealers, the carpenters knows our brand, which I came to know at least from Mumbai market, it is much easier to penetrate in multiple stores like first and we can be more aggressive while -- currently we are going in high single digit. By doing more aggressive in mature markets, we can grow double digit. That was my question.

So -- but see, in channel [indiscernible] it is a very deep -- deep subject is there. And if we talk about the Mumbai, then we are first company during this 70 years of journey who has achieved this number. I cannot disclose the exact number of the volume into the Maharashtra. But these are the things happen. And that's why that revenue we have generated of INR 100 crores of revenue into the quarter 4. So we are going much deeper and this quarter 4 is the reason that it is doable. And if you see about the quarter 4 number, it is exponentially as compared to quarter 3, right, more than 30% of growth is there. So these are the reasons. So yes, of course, we are going much deeper. And you are very right, that should be the strategy. But our own strategy is into that. And that is the reason that we are able to maintain. It is debt free. Maintain this 27% of EBITDA. Because if there is no repeat customer, there is no any business can make the profit. So we always believe into the repeat business and more deeper more volume. So we are into that. And yes, of course, we'll not go about that only focusing on the wider strength, but we are on to the going deeper mode.

Okay, sir, we'll take the next question from [ Bhavan Mishra ]. [ Bhavani ], are you there? Sir, we will move on to [ Jay Trivedi ].

My question is -- while it is good that we are getting into new states and we are expanding, my question comes very much inbound, where there are players like Jivanjor who are setting up capacities in Gujarat. Do we see it as a competitive threat? Or how are we assessing it? What is your take on that? That is my first question.

Jay, I suggest you to be focus of our questions only, cannot talk about the competition. If you have any, you can please mail us. We can definitely answer for that. But in general, yes, we can say that we are very much aware about this. And as we are into 30%, 35% presence and though we are a very much old brand since 20 years, Gujarat is very much strong base of ours. So we have the very good relationship with the dealers, with the carpenters, a very good strong network. And competition was earlier. It is not that today now there is a competition that was from the first day. But though -- we have understand the market and we have created our niche. So we are very much confident that we'll figure out the way and grow from here.

Definitely, sir. I totally get your point. Also wanted to understand, while we are very much strong in the wood adhesives, the white glue adhesives space, are there any adjacencies when we have multiple product offerings? The mobilization of product is faster with the dealers? Or Euro stand-alone wood adhesives is enough for a dealer to give away other products? Like do these products sell in a basket? Or it is a one-on-one conversation? Just wanted to understand that.

Sure. So the answer of this question is if there was a problem for that, then it was not possible that we are getting this 35% of market share in Gujarat. So it means that it is not required and we have focused and that is our strength. And this is a market of INR 8,000 crores of market pan India. So it is a long journey to go and we want to be focused. We want to stay with the single product at least INR 1,000 crores of journey. And after that, maybe we can think about adding the new products for that.

Sir, we'll take the next question from [ Amish Kanan ].

Sir, congrats on a good number in Q4. Sir, one quick question was, I was wondering if the offtake of Q4 was seasonally higher as even dealer would get our raw material VAM is curdling. Maybe they were anticipating the price, and hence, they have probably taken more than required. So if you can give us some sense of comfort whether the retail demand also was as strong as, say, 15% plus. If you can give us some flavor there? Or is there an inventory at dealer level, which -- if carpenters are not on the ground in Q1, my fear is maybe our number may not be -- I'm not worried about quarterly, sir. I understand. And I'm more interested in the annual trend. But just if you can give us some flavor of how these things are on the ground. That is one. And sir, second, extending the same question. Sir, this year, if you are aiming for 15%, and you have also partly explained that overall price rise itself is 15%, maybe we are not looking at a very high growth on volume terms. I understand you are saying you have an aspiration to at least grow 10% plus in volume terms also. But I understand you're saying as of now, we are not clear, maybe by second quarter, the situation will be clear and you may be able to answer us, say, in the second quarter call what is the situation. So that is -- I understand. Question is, sir, this year, we are assuming, say, ballpark 15% growth. To reach a INR 500 crore turnover, sir, for the next 2 years at least we should be able to grow at 20%, sir, [Foreign Language] 18% to 20%. So sir, are we -- how confident are we that we should be more in a band of, say, 15% to 20% than, say, a band of 10% to 15%, sir?

Sure. Very much understanding of industry you have. And a very good question you ask about that, sir, about the tertiary? Because as we have now pushed the material to the market quarter 4 and now we should focus more into the carpenter segment level to offtake the material. So I think Samit sir is the person who can give you the very good answer of that. Samitbhai, can you add to this?

Yes. So Amish, great -- a good question, first of all. So see, I'll tell you about the Q4. Basically, if you see the business dynamic, so Q4 has always been a heavy quarter in the business overall, right? So that is where -- so it is not because of the fear of price rise and all they have stopped the material and all. So that's what the first answer. And just to add in what Utkarsh has said, that, yes, we are focused. Going forward is more on a tertiary. So we are completely moving our entire focus towards demand generation. And entire transformation journey is slated towards in this direction only. So we are very much confident that this is what we can continue going forward.

So that's why we are investing more into the carpenters' trade marketing.

Yes. So we have increased the budget also. If you see, our marketing budget is majorly skewed towards trade marketing, which is -- trade is our carpenters and dealers community basically. So that is where we are going very stronger and deeper to penetrate and gain more market share by this actions, basically.

And about your second question, you are very right that if we are going to achieve this INR 500 crores, then definitely we'll need to focus on the 18%, 20% of growth. And you are concerned about that -- about what the situation is going on and the demand will be same or not. But as I explained that there is not much difference into the down level. All the constructions are into the pipeline, all the real sectors are now into the streamline. So it is there. The carpenters are available into the market. And that's why the reason that our redemptions are very high. We are getting the good response into the loyalty programs. So there is no worry about our brand. Because of that, we are now -- right now, we are a smaller part of the total industry. So it is a huge gap and a huge opportunity lying about there. So it will not impact because we need to take the market share from the existing market. So that's why this is a doable number and that's why if you talk about -- I explained that in the last 8 quarters, the 5 quarters we can able to achieve this growth. If we see about the last 2 quarters, if we talk about the quarter 2, it is 20% of growth. If we talk about the quarter 4, it is 16% growth. So it means that it is doable. Just we need to maintain that every quarter and that deep focus and hard work we need to do about that. And we all are the team we are very much sincere and very much going deeper to achieve this number.

Yes. And just to add in what sir said that -- because of this only, like we are confident that we can drive this number. There is huge scope. And as part of our transformation journey, we have been -- we are very conscious about what you are saying, basically. So that is why our work right now -- transformation journey is going on towards both deeper and wider reach for the Euro as a brand and all products also. So that is where we want to have a multifold drive in existing markets as well as going for a few select -- few new markets also to start our presentation -- our presence basically in those markets basically. So that's where combined efforts we'll put together will lead us to the required growth numbers we are driving.

Sir, we'll take the next follow-up question from [ Mark Singhivi]

Yes, I wanted to ask how was April because you are hiking prices from May. So dealers must have brought in quantities, right?

Yes. But April was good. And April, we can say about that because of the price rise is going to May, so dealers has get -- trying to get that benefits and that opportunity. So April was good in volume-wise.

Like are you not going to give me a number?

It is not possible. Sorry about that. But you can contact our IR for any figures.

And have we thought about backward integration in raw material production?

Yes. See, I explained about that VAM is the key raw material and it is not manufactured in India. The material is totally imported. And very huge giant companies are into that. And so that's why it is not workable for the backward integrations.

Not workable at all?

Right now, this volume is not suitable for that.

Okay. And any R&D spend on new products in white glue right now? Are we doing anything new?

So if we see -- if you saw about the history of the Euro last 15 years, so every 2 years, we have added new products. So right now what products we have into our basket, so that is the complete -- the applications wise, all the needs by the furniture gluing industry. So if we talk about -- we have the different elements of the waterproof, we have the fast drying, we have the high coverage, high-grade adhesives. We have the OEMs -- full range into the OEMs also. We have the cheaper grade also. So everything is covered. We have the PVC glue, which are covered the acrylic and PVC sheets to the MDF and plywood. So entire range are covered right now. So there is no any spend into the R&D. But we hire the technologies when it is needed. So right now, we are at least at that level that we have covered all the products to gluing industries for the furniture.

We will take the next question from [ Vatsal ].

Just a follow-up question. So you talked about the current liabilities coming from the reward program. So when these numbers -- when the carpenter start redeeming their amounts, so our EBITDA margins would go down. So can you tell me when will this EBITDA margins be normalized to 20% to 25%?

So see, it is not much impacted. If you see about the last year, so it is only INR 4 crores of difference between the provisions and the redemption. So it is hardly 1.25% only. So it will not impact, and it is running in a smooth way. So we are expecting the same for the next coming quarters.

We will take the next question from [ Videsh Ashar ].

So the past few years, we've been in the INR 250 crores to INR 300 crores revenue range and even our profit after tax has been in a similar range. So do you think, sir, the next 1, 2 years, we could see solid growth coming? And also, will we be able to maintain our capital allocation strategies? What I mean to say is, will we be able to see sustained ROE and ROCEs in the next 2 to 3 years?

So yes, we are into that. And as I explained that 20%, 25% is a long-term EBITDA margins, what we want to sustain. And if we see about the last 3 years, it is very much into the line. And if we grow by the 15%, 20% margin volume growth, then the margin will be stable and it will be the -- overall also will be the control. So it is not about that within this 2, 3 years what you are saying that the exact number we can disclose about that.

Sir, we'll take the next question from [ Harsh Chaurasia ].

So on the price hike, sir, like before this 60% to 70% price hike, how much -- like on an average, how much our product portfolio would be compared to the market leader basically in terms of pricing? And post this pricing -- price hikes, how much premium we would be charging versus the market leader?

Can you repeat the question, the first question?

So basically, my question is like before the price hikes of 60% to 70%, how much our portfolio pricing was like cheaper than the market leader? And now after the price hikes, how much premium we would be charging versus the market leader?

See, it is almost we are at par with the industry and the market leader. But if we see about the landing cost, then Euro is always good, attractive as compared to that industry. So we are more into sales promotion, discount to the dealers and the retailers. So it is there. So if you talk about the market price, that is almost similar to that, at par for that.

So this is the post price hikes, like the pricing would be almost par to the market leader?

Both. So if we talk about -- earlier also and it is for the post also for that, because, see, we have taken the price rise also, yes.

Got it. And sir, just one more thing on the branding communication which you mentioned. Like now we have started going in South as well. Like you mentioned in future, we are looking to go in Chennai, Kerala market. So do you think the current brand ambassador we have, he is very famous in the -- like nowadays, people prefer a regional face than a national face, especially in South. So do you think like we would need -- like our branding would need north a different brand ambassador and in South we will be adding one more brand ambassador? Or this is the wrong thing which I'm -- in the way I'm thinking?

No, no, it is not a wrong thing. And Harsh, it is a very good questions and suggestions you have had. So yes, of course, this is in our mind. But right now, as we are more into the Central and Western part, so it's a Bollywood community and Pankaj Tripathi is very much famous into that. Also, one main thing is what our influencers are belong to. The carpenters are from the -- 90% are from the Rajasthan and UP. So they are very much with this existing brand ambassador. So that's why we have chose them. But definitely, South is a different part of that. And if we talk about the Tamil Nadu, if we talk about the Andhra, it is a different part. So when we'll go more penetrated and go the more, generate the volumes, we need to think about that also. So we are very much aware about that. And it's a very good suggestion of your's.

Yes. And Harsh, right now, we are basically into -- this is a huge way to cover in [indiscernible] basically in these three markets basically. So we are very conscious about that. MD sir said that about the language markets. And so accordingly -- right now, as you rightly mentioned that most of our community, basically carpenters and all, they belong to Rajasthan and UP. And if you go to even down South also, you'll find that most of this carpenter community are coming from these states. So they are very much well aware about the Hindi and all. And that is why we chose as a unanimous choice Pankaj Tripathi at this moment. We may look at local space. Maybe -- it's a long shot basically. As of now, I think this is what we will -- we are going to continue.

We'll take the next question from [ Varun Thana ]

Just wanted to understand. Are we thinking about going into general purpose adhesives at any point in the 8-gram to 200-gram packaging space? Because -- will you have to tweak the formula too much to get into this space? Or it's something we're not considering at all?

No, Varun, we are not considering at all because it's a different segment and it's a total different distribution and network. It is more into the stationeries and pan shops and everything. So it's a different distribution. Our expertise is more into the furniture, to the carpenters work gluing solutions for the furniture. So this is the market what is INR 8,000 crores above. So we need to stick about that.

We will take the next question from [ Mark Singhivi ].

Yes. I wanted to ask that we have done only 60% to 70% hike in product, 100% is rising raw material and 6% to 7% we are going to spend on advertising and only 15% to 20% volume growth. So are we expecting any, what we call, operating margin reduction this year?

It is too early to say for the entire year. But yes, of course, it will affect on the quarter 1. And I believe that all the chemical industries, pharma industries will get this effect into the quarter 1 regarding the EBITDA. Because as -- only -- I think B2C industry, of course, the price rise is not passed from the second day, but B2B industry may be -- will less bleed, but B2C model will bleed. But we cannot predict about the next 3 quarters because it is about the geopolitical situation. But I think it will be controlled within 2 months. Then maybe from the next 3 quarters, we are not much affected as we have taken the price rise. But I think we are expecting that maybe very near soon there will be again a price rise we need to take to cover the difference.

And what else can we do to protect the margins, anything else?

Unfortunately, it is uncontrollable for each and everyone. Right now, it is facing the situation. So I think quarter 1 will be the same situation for all the industries right now.

Sir, we'll take the last follow-up question from [ Varun Thana ]. Varun, are you there?

I think he has finished his question. We'll take one last question in the chat from one of the participants. What is our plans to list on the NSE?

It is in process. We have -- we are into the process and very near it will list on the NSE. So we are into that process.

Sure, sir. That was the last question for the day. Would you like to make any closing comments before we end the call?

So thank you very much for trusting our brand, trusting our management. So yes, we are on niche and we are working hard to achieve more and grabbing more market shares. So I hope that you all understand the current situation about quarter 1. So maybe very soon we all come out from this situation and we can contribute good growth into the industry. So thank you very much for trusting us.