Mayur Uniquoters Limited (522249) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q2 FY '22 Earnings Conference Call of Mayur Uniquoters, hosted by Monarch Networth Capital Limited. [Operator Instructions] Please note that this conference has been recorded. I now hand the conference over to Mr. Anubhav Rawat. Thank you, and over to you, sir.

Thank you, Jacob. Good afternoon, everyone. I hope you and all your loved ones are safe and healthy. On behalf of Monarch Networth Capital, it is our pleasure to host the senior management team of Mayur Uniquoters. Today, we have with us Mr. Suresh Kumar Poddar, Chairman and Managing Director of the company; and Mr. Vinod Kumar Sharma, CFO of the company. I would now request the management to provide their initial comments about the results. Over to you, sir.

Thank you, Anubhav. Good afternoon, dear investors and analysts. Ladies and gentlemen, it is a great pleasure to be here to share with you the performance of Mayur. Thanks for giving your precious time to join Mayur Uniquoters Limited Q2 FY '22 Conference Call. Mayur Uniquoters Limited, being a market leader in the synthetic leather industry and in organized players, has been able to leverage the emerging opportunities and delivered exemplary performance in past years, both in national and international business markets. The markets are fully open in last quarter. But the automakers, especially, are now facing the problems, production problems due to shortage of semiconductor chips in international market. And because of this, our OEM sales is also impacted in the quarter. However, we are hopeful to regain the OEM sales and demand back to the market after 4, 5 months in coming months. Now I would like to start with financial highlights for Q2 FY '22 under review. We will reply your queries after my review on the financial results. The company has achieved revenue from operations on a stand-alone basis, amounting to INR 188 crores, PBT INR 33 crores, PAT INR 25 crores during the quarter, which has increased by [ 70% ], 74% and 73%, respectively, over the corresponding quarter. The revenue from operations on consolidated basis is INR 196 crores, PBT is INR 39 crores and PAT INR 30 crores and higher by 55%, 48% and 48%, respectively. Our endeavor is to make the company as appropriate supplier for the leading OEM, especially in U.S. and European regions. I'm pleased to share that your company is already approved by Mercedes-Benz South Africa and Volkswagen India car makers, and supply also started their plans for their new models. The product approval from BMW is also obtained and supply is expected from April 2022. Regarding projects, few plant project equities are completed, except some civil and site development was required at the site. This supply orders and dispatches are also coming in small lots and expected to increase gradually in coming quarters. While pursuing our business interest, Mayur Uniquoters has also been endeavoring to fulfill our responsibilities towards the society. Under the Corporate Social Responsibility programs, the company has done 5 to 6 phases of vaccination for the nearby villagers and staff members of both the plants. And besides contribution to our foods and oxygen. Green Zone donated safety kits and oxygen concentrators to the hospitals, police stations, industries, associations, all. The company has also adopted many [indiscernible] schools for education of children. The company has worked on education, especially for the girls and underprivileged child education. Various health care initiatives, especially child skill development, water for all sanitation at a school area, distribution of books, bags, cloth, et cetera, most importantly, family planning and family welfare schemes. The state government has recognized several occasions at various initiatives on the various platform. And I'm thankful to all the investors for their valuable time to those who became the part of this conference call. And with this positive note, I would like to conclude and request you all to open the forum for questions. And before that, I also request you all to kindly note that due to time constraints, we need to end this call within 45 minutes. And therefore, request to kindly avoid repeat questions during the call. And volume data will not be discussed, so please avoid volume-related queries. Thank you.

[Operator Instructions] The first question is from the line of Nirali Gopani from Unique Asset Management, LLP.

Congratulations on a very strong top line growth. Sir, my question is on the gross margin side. So in our Q1 call, you had mentioned that the raw material prices have started falling, and we have also increased our prices wherever required. And we were of the view that gross margins should start recovering from Q2. But, in fact, the gross margins have declined at least by 250 bps Q-o-Q. So I just wanted your comments on the sale?

So in the last quarter, the prices rather has been increased very drastically. Now PVC resin prices in the last 1 quarter has increased by more than 35% to 50% as well as plasticizer prices has also increased. Other ingredients has also increased. And in the previous quarter, the prices of yarn -- I mean, yarn from which we make a fabric, that were also not increasing. But in this quarter, it has -- not from very beginning, but from end others, the cotton prices -- yarn prices has also increased. So now the prices are in the peak because mainly of this shipping cost, which has gone up by 4x. And other things whatever we are selling to U.S.A., the cost has increased like hell from INR 18 a meter to INR 65 a meter. But now it is going down. So I think the situation should be better in next quarter -- this coming quarter so far as margin is concerned. And secondly, there is one more problem -- because these automotive industries are increasing the prices on a quarterly basis. Now till now, they have given us the increase of January, February, March. So this April to September increase, which has to come very soon, that has not been included in this balance sheet. Because they take at least 3 to 4 months time to start, but they give it from the backward. So that you will have a better credit notes in the next quarter. It is also one of the reasons what you are asking for.

So, sir, what you're saying is that we'll receive the increment from April to September also in the coming quarters?

Yes.

Okay. Okay. And sir, secondly, on this PVC line, the 7th line has been commissioned?

Yes. Already started.

Okay. So sir, can you share what was the utilization level in this quarter?

Utilization in this quarter -- what was the total?

INR 78 lakhs. INR 78 lakhs the previous month.

INR [ 70 ] lakhs, INR 80 lakhs. This quarter -- [Foreign Language]. After 7th line, our capacity is approximate INR 3.5 million minimum, INR 3.5 million means INR 35 lakhs. [Foreign Language]

INR 80 lakhs.

[Foreign Language] INR 35 lakhs x 3. INR 35 lakhs x 3, INR 105 lakhs. That means 75% to 80%, you can say. INR 74%. Hello?

Okay. Yes, yes, yes. And sir, lastly, on -- we were looking to appoint some CEOs. So any update on that, if you would want to share?

No, we have appointed COO. Now we are looking at CEO also, but we are going very gradually. I don't want to have so many big people at a time. We have appointed CFO, very senior person. We have appointed good HR person. We have appointed COO. Now I will wait for another 3 to 6 months, and then we will see for the CEO.

[Operator Instructions] The next question is from the line of Priyadarshi Srivastava from Monarch Networth Capital.

Congratulations on a good set of numbers, sir. Sir, I just wanted to know what is the fee revenue for this quarter, sir? And who are the current customers in the queue?

You see most of the customers are same. Not big difference. Because those who are selling previously, they are selling here also.

Okay. Okay.

Gwalior sales was [Foreign Language]...

[Foreign Language].

INR 8 crores in this quarter.

Okay. Okay, sir. Okay. Sir, how much -- what will be the maximum revenue potential and when we expect to breakeven into that actually?

You can get INR 100 crores revenue from existing capacity. I think because of this COVID problem, things were moving very slowly, especially for PU because we started just at the starting of COVID. And then all my Chinese technician has went away, and that's why also we had some restrictions. But now we have got a Visa for a Taiwanese guy who is specializing in PU. He's a very experienced person. He's coming in the next week here, and he will stay with us. So, so far -- after that, we will have no constraint developing any quality, any type of quality, which is being used in our work. So that is one thing. And then because COVID, we have imported tough material from China. So that to clear it. So that's why also it is taking some time. But I think in next 1 year time, we should able to at least sell INR 50 crores to INR 60 crores -- INR 60 crores. Within in the next 2 years, we will -- we may have to go for another line because market is improving. Indian market is also improving. And I see very optimistic in the near future because of this Chinese problem. And then we have gone for anti-dumping duty also for PU so that PU is imported less. So it's a good market. Only thing this quarter could have been at least INR 220 crores, INR 230 crores. Because of this chips problem, the automotive industries are facing constraint of productions. They don't have even car at their showrooms. But the things are improving in the last 2, 3 years. We had a problem with U.S. supplies because of chips. But now this month they have started improving. And I hope within 2, 3 months, this problem will be sorted up. There is no dearth of requirement. There is huge requirement and bad luck. Most of the electronic industries are suffering because of the semiconductor problem. But this will be sorted down in next 1, 2, 3 months' time.

[Operator Instructions] The next question is from the line of Vinay Ambedkar, an individual investor.

Am I audible?

Yes. Yes.

Sir, can you tell us what is the operating level loss which is still coming from the PU division? And when do you think we can become EBITDA positive there at what level of sales?

You are talking about the Gwalior PU [Foreign Language] Just wait a time.

Sir, meantime...

You need another question, please tell me.

Sir, in the PVC division, because majority of the sales have come from there, what is the contribution between auto, footwear and publishing at the turnover level? And how do you see the division progression?

You see in this quarter, footwear sale was about 32%, furnishing was not much. Mainly, we are doing automotive. Automotive was, 31 plus 9 plus replacement, 47, and [ 956 ], 57%, 58% is automotive. This includes domestic OEM, export OEM and replacement market. And rest is -- sorry?

INR 31 crores, you said is the domestic OEM, right, sir?

Yes, yes, yes. 31% domestic OEM.

[ 31% ], not 31 crores?

No, no, percent. I'm talking percent, all percent. Yes.

Percentage of total sales or percentage of PVC?

Total sales. Total sales.

Total. Okay. And 9%, export OEM?

Yes, export OEM, 10%; and the placement market is about 18%. So 31% plus 18%, plus 10%, you can say, 59% is automotive.

Sir, footwear, how you see the market progression with the unlocking and COVID going away?

You see at the time of COVID, of course, there was a problem. But now it is sorting out. And you see now this 15 days will be a little bit downfall because all the labors go away 15 days before Diwali and they come after Diwali. So now the market from next week, it will pick up. And I think it will be good. I don't see any problem in the market because everybody is -- only problem a little bit is the price. The way raw material prices are increasing, we are not able to increase their sales price. But anyhow the demand is good. See, everybody played for the price reduction, but it's increasing everywhere. You go for any industry, the price is increasing, but still people are buying. So I don't see any problem. Rather I think whatever happened in this quarter in automotive industry, this coming quarter will be much, much better. Otherwise, if this chips problem would have not been, at least we would have done INR 30 crores more in this quarter.

Okay. Sir, within PVC, do we -- are the operating margins better for auto versus footwear, anything like that? Sales realization is better in auto...

[Foreign Language]

No, no. You see all this, you say, like auto, there are 3 segments in auto. One is the replacement market. One is OEM domestic. One is export OEM. Now the best margin, if you calculate on all these 3, export OEM is #1, then footwear is #2 and then #3 is auto OEM and replacement market.

Okay. So sir, basically then if our exports increase and our footwear sales increase, so our margins are likely to increase?

You see the main market is this only automotive and footwear. So auto OEM is fixed every quarter and whatever increase or decrease here to date. Now this quarter, it was a little less because the previous increase has not come, which will come in the next quarter. So then it will be better in the next quarter. So for footwear is concerned, it is same what's it used to be.

Okay. Sir, the like is that last quarter, we were expecting that RM prices will reduce like you rightly...

No, no. RM prices has not reduced, rather RM prices has increased. Now we think the way -- the biggest problem is the shortage of the material. There is no supply of PVC resin, very less supply, although I'm well stocked more that 3, 4 months. So so far supply is concerned, I have no problem. But the prices are increasing. And availability is not there. That is the biggest problem. But anyway, it is better for us to get a better price when there is shortage, there is always chances of increasing the prices, although we have increased the prices. But...

Sir.

Yes.

Okay. Sir, one thing you have been rightly focusing on an enterprising also is about our margin, which used to be between 10% to 12% a few years back. And in the last year or so, we crossed 20% and we have reached as much as 26%, 27% in the March quarter and December quarter. You -- was there anything exceptional because in that 6% [indiscernible] you were able to earn such a margin? Because now you come down to...

I tell you it is very unpredictable. Nobody have thought. In my life of 55 years working in this industry, I have never seen the increment like this what has happened in last 1 year. Nobody could have imagine that this will happen. And this has happened only because of the shipping companies problem because every end product supplier has a raw material supplier, [Foreign Language]. He is also buying and shipping companies are involved. So this all drama is because of shipping industries. And then automotive industry problem is because of chips, supply because the demand of computer and electronic items has increased a lot during this COVID time. So that's why they are facing problem, but this problem is temporary problem maybe in the next 2, 3 months' time, it has started improving, it will improve up further, because 1 or 2 companies -- even Tatas are trying to make chips because the main thing is there is a huge, huge investment in this. But anyway, this will be sorted out because more than is automotive industry has a big problem. But it will sorted out of like in U.S.A. also 3 weeks back, the situation was very bad. But in the last 2 to 3 weeks, the demand has increased. I mean they closed their plants, certain plants because of the shortage of chips, not because of the requirement. And even in America, people don't have any car in the showroom. Just for displaying, they don't have a car. Hello?

Yes, sir. So basically, I think demand is very strong -- once shipping...

Yes. Yes. Yes. There is a 1 year -- this is the condition because people are spending money because spending is no issue. And then in India has got a much better chance because you know this, what is happening in China. So people are [indiscernible]. And further, the PVC -- our PU level clock has been introduced as a replacement of genuine leather. So gradually genuine leather will go down, and this PU will increase in automotive industry. Of course, it will take time, but it is happening. And the PU cost is more than $20. We are working with that. And one of the American companies, we have got 90% approval. Maybe in next 2, 3 months, we'll be able to get up. So that once we start that, because there is less competition in that target 2 companies are making in the whole world, we'll be the third.

Can you share the name of the client?

Sorry?

Can you share the name of the client, sir?

Mr. Ambedkar, may we request that you return to the question queue for follow-up questions.

Sure, sir. I just wanted a data point about the last PU division. [indiscernible].

Okay.

Maybe you can tell later, sir.

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

Sir, I have a question on the Volkswagen and the Mercedes order ramp-up. What is the progress there? Because both of them are fairly higher value per liter order, so what is the progress there? Second, I was doing a rough math. So it is quite apparent that the things at which the RM has increased is not the pace at which the pricing for the finished good has moved up. So here, what happens, do we have to absorb those gross margin losses or reduction? Or we tend to get price hikes eventually for this type of RM increases, if you could give a comment there? And I have one more question. I was confused on the PU plant. Sir, on one side, you are saying that Korean is supposed to come and there's some balancing equipment. And on the other side, you said that you sold PU worth INR 8 crores in a quarter. So yes, I'm just unable to understand in which format has the plant started?

See, there are hardly 2 or 3 players you may see and that also very small quantity. This PU, I have been working since 2003. So because I see the future is PU. Today we are PVC in automotive, we are selling say $7, $8 or $8.5. Here, we start with $20 or maybe even $24 or in some cases because it is replacing leather, genuine leather. And that's why scope is good, but everything takes time. And the biggest problem our was that we started in COVID this thing.

So the plant has started, sir?

Plant has started long back, 1.5 years back.

So then what is this balancing equipment needed at PU plant and you need a foreigner to help out with the plant? So what is that to do with?

No, no. Listen to me. [Foreign Language]

[Foreign Language]

[Foreign Language]

So, [Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

So now the machine can wait for the customer, but the customer cannot wait for the machine. So [Foreign Language] Now today, I suppose you are buying something from a particular customer. And the new supplier has come and wanted to supply you. He will not buy 100% from you from the next day. He will first test your material, check it for some time, 2, 3, 4, 5 months. When they are satisfied, that we will start. So this is the process. And once it starts because one good thing is there, wherever we have supplied whichever customer, he is repeatedly buying from us. And the second problem because the bad luck you can say, we started with this when COVID has started. So everybody -- all dealers who are importing from China, they have huge stock. So they have to clear their stock. But now I'm seeing the things are moving, new customers are coming. Even in some cases, our prices are 20% higher. And now to compete with China, we have started manufacturing the backing cloth. And then the second stage, we are working for PU resin manufacturing also so that in the price war, you can compete. And then we have gone for antidumping duties also. We had 2 [indiscernible]. We want to put anti-dumping duty on PU leather cloth. So if that will happen, that will also help, because in India, people are how they are. And -- because government is also very strict after China, they want to support Indian industry. This will happen. This is a matter of time. Because, of course, I travel whole world, I know the market, what is happening there. So this is bound to come, nobody can stop it. The only thing we should be capable to introduce the product. So Mayur advantage is always that we focus on R&D. Now this man from Taiwan, which I'm getting is the best in Asia. And he has more than 30 years experience in this. I'm paying from my noses. People will say, if you are not making profit, why you are doing? I'm doing it for future. Industry is always for future. You invest always in future, not in present only. So I'm not bothered at all.

Okay. Sir, in the Volkswagen and Mercedes order ramp up?

[Foreign Language] Mercedes has given us a requirement of 40,000 meters per month, but now they are buying not more than 15,000 to 20,000 because of the chips problem. Even a month before last, they have hardly bought 5,000. Then last month -- from last month, they have again started improving. Everybody is selling in the same book. And now they are doing another problem. You have a chips problem, so you will like to produce those cars who has got the most profit and expensive cars. So other thing is that PVC leather cloth is used for medium class or lower class of car, not very high class, right? So that is also affecting because whatever chips are getting, they are using, wherever we have the best margin. But it is a temporary problem. Next 3 months, I think it should improve. In U.S.A., it has improved a lot. From last 2, 3 weeks, we are coming almost 80% to the original sale.

Okay. And sir, on the gross margin question, so the [indiscernible] we obviously got price increases less versus the raw material. So how much lag do you think it is for you to get the pricing from your customer? Or you have to adjust this whatever 200, 300 basis point loss on gross margin eventually over time, it settles down?

[Foreign Language]

Sorry?

Either [Foreign Language] Straightforward increase [Foreign Language]. They will try their best not to increase or you take the less price than whatever is asked for. But it grows with the time like sometimes the prices were reducing that time also, we didn't reduce the price. So we've go -- in those particular quarters, we've got some benefit. Now here, you see the biggest problem is all the suppliers are the multinational suppliers, so our PVC resin, plasticizer or yarn. So whenever they increase their price, they increase from the next day. Previously you say -- on first, we will say from today, my price is this, even if you have given the advanced money or advanced order, doesn't matter. But we cannot go to the customer and can say that from tomorrow, I will not give you the money. [Foreign Language] price increase [Foreign Language] effective [Foreign Language] I don't think -- I think it is come to the peak. It should to start coming down in my opinion, it should start coming down.

Which means you are thinking that the price increase from customers is difficult to get buy? But do you think that the material price will come down and automatically margins should come back? Because you have gained also in times when raw material prices were lower, and you didn't pass on, right? So it's a more natural process, which will happen?

Yes, yes, yes. [Foreign Language] 100%, 100% price has increased. PVC resin, which we are buying for INR 90, it is now INR 189 to INR 190. Plasticizer, we used to have INR 80, it is now INR 165. How much of...

End of the year credit was, what was that?

[Foreign Language]

You said no, you get a credit note from the customer at the end of the year. So what was that?

Yes. That automotive industry, giving the increment after the end of peak like January, February, March quarter [Foreign Language]. April, May, June [Foreign Language] Maybe in next 2, 3 weeks, it will settle. So it will show in the next quarter. So [Foreign Language] Problem [Foreign Language], these are all multinational companies. Chinese company [Foreign Language] Japan [Foreign Language] So it takes at least 3, 4 months, minimum.

[Foreign Language]

[Foreign Language] We have to give the bill copy all. So they will ask that, okay, April, May, June, they will be settled. So they will ask for April, May, June price, then they will take average of that and accordingly, whatever was the basic price and whatever increase that particular item, that increase they will give, or if there is any decrease, they will ask for decrease also.

One more question, sir. Next year, as you're heading towards the future quarters, you have auto tailwinds because of this chip shortage easing out. When you have Volkswagen and Mercedes order ramp-up. And footwear was not doing so well until now for the last 1.5 years, 2 years, do you think even if footwear starts doing well, you should be able to record 100% utilization of capacity next year on PVC?

By next year, '22, '23 [Foreign Language] '22, '23, second half [Foreign Language].

But are you seeing traction in footwear?

Yes. Footwear [Foreign Language] Automotive was doing very good. No -- [Foreign Language] you see those all footwear manufacturers, they supply to wholesaler. Then wholesaler supplies to retailer. Now everybody has got a stock. And when you supply to retailer, you have MRP price. Now suppose today, they are selling an ex price MRP is a INR 300 for a sandal. Now INR 350 or INR 330, they have to think twice price. We are rather getting prices, but they are suffering much more this footwear. Because every now and then, they cannot increase the MRP. Can they increase MRP every week or every fortnight?

No.

People will not buy. Suppose [Foreign Language] but one thing is there, market is the there.

Market is?

Market is there, demand...

It's a better demand, right, versus what it was in last 1.5 years let's? Better demand and growing demand is what you think?

Sorry?

Versus last 1.5, 2 years, at least it's a much better market and a better demand in footwear now?

No. You see this 1.5 year, 2 years is definitely bad for everything. And especially because when the shops are not open, people are not moving out. You can even order the car, but where you have to go to the shop, see it, fit it, then only you will buy it. So there is more effected. You can't just footwear order by Amazon or anything. Yes, people are using that type of order, but maybe that 5%, 7%, not more than that. So footwear, you have to go to the shop, you have to see the hundreds of design, then you select out of that. [Foreign Language] .

[Operator Instructions] The next question is from the line of Sabyasachi Mukerji from Centrum PMS.

So first question. So you mentioned that you have now a total capacity of 3.5 million meters per month, right?

Per month. Yes, yes.

And you are operating around 74%, 75% capacity utilization?

Yes. Yes.

And you -- in the last participant's question, you mentioned that you would be reaching somewhere around 100% in somewhere in H2 FY '23?

Yes. Yes, '22, '23 second half.

Second thing, sir, on the margins, I just wanted to understand the margin outlook for the second half of this year and next fiscal year. What is the margin outlook?

[Foreign Language] The is an ongoing process. Company has to improve the aspects. You have to have better management. You have to have a better manufacturing capacity. You have to have good R&D. You have to have capability of listing a new product. Why have you spent INR 125 crores on PU? Because I know and you will see what will happen in the next 2 years' time because the people are moving from leather to PU. And the price I told you it's about $20, $25. So, so far, margin is consent now who has thought that this kind of increment will be there. We can only say the Mayur will keep on manufacturing new products, technical product, which will give better return and we will have a good management, good machinery, good people so that the cost is reduced as much as possible. So far as raw material is concerned, I can tell you in PVC leather cloth in India, the amount of -- the way our buying is there, is the cheapest, I can tell you. So what I'm trying to say, we will definitely try to keep [Foreign Language] And -- but we -- honestly, our team, everybody, we try our best because today's situation is very fluid situation. I can tell one thing very clearly that the market outlook is good. The future of industry is very good. They're very, very good. So there is no problem for selling the margin, it depends on the market, although we are doing our best. And [Foreign Language] you tell me out of 1,000 companies, how many companies are making this kind of profit? It is not easy to come to this kind of profit. You forget about your this finance companies and insurance company or all these companies. But in manufacturing, either you have a monopoly worldwide, then only you get a very good margin. Even if you calculate and see what is the margin in leather cloth industry? It is a huge, huge, huge difference because of our policy, because of our consistency in developing new products and invest in new technology. That is our recipe that I will keep on doing, I will not stop.

Okay. Okay, sir. Okay. Last question on the mix between automotive and footwear. So we are close to somewhere around, I think, 55% to 60% in automotive and 30%, 35% in footwear. So going ahead, probably next year or 2, 3 years down the line, where do you see this mix changing and also contribution from export OEMs in the automotive sales?

No, no. Export OEM, we are doing now. It is increasing. Because of this chips problem, it was a little less this quarter, but it is increasing. Because Mercedes, they have promised us 40,000 yarns per....

So this 10% will go to 20% of total sales, is it a fair assumption?

For quality and all. So this is the temporary problem, which has happened. Even then we are doing very good and we will keep on.

Sorry, I missed your part.

Hello?

Hello. So sorry. I actually missed your comments.

[Operator Instructions] We have the next question.

Hello? Hello?

Vinod, can you hear me?

Yes, I can hear you. I think Mr. Poddar line disconnected. Yes, please reconnect it.

Ladies and gentlemen, please stay connected while we reconnect to the management. Ladies and gentlemen, thank you for being on hold. The line for the management is now reconnected. Thank you, and over to you, sir. The next question is from the line of Chintan Sheth from Sameeksha Capital.

Congrats for a very good set of numbers. Am I audible, sir?

Yes, yes, yes.

Yes. So sir, if I look at -- from the data you've given that 31% domestic OEM sales and the 32% footwear. It seems that we have grown very stupendously in the domestic market when export was muted given the chip shortage which you explained earlier. Going forward, do you see this domestic performance to sustain in terms of your export? Earlier, we used to do INR 50 crores quarterly run rate revenue generating footwear?

Your voice is not clear.

Voice is not clear.

[Foreign Language]

[Foreign Language] This quarter, it seems we are doing -- we have kind of reach to that level. Do we think footwear to continue at INR 50 crores plus the run rate going forward in PVC and PU will be additional revenue to that?

Yes, yes, definitely, PU will be additional than PVC. [Foreign Language] While you are seeing down in percentage, it's not down. And overall, it is not down. But overall, the automotive sale has increased like anything. That's why our footwear is looking a little downward. Because...

Yes, I'm talking about absolute INR 50 crores revenue. 2017, '18, quarterly [Foreign Language] INR 250 crores, INR 300 crores footwear revenue which was kind of declined because of the weak market condition. Now I'm seeing that this quarter, we have reached back to INR 50 crore plus -- INR 60 crores plus around in this quarter, including PU. So are we seeing that this INR 50 crores run rate can be sustained going forward, the market is now recovering back to old days?

I think whatever we have done in first half, we should be able to do that in second half also. If that happens and which I am very much confident maybe this quarter, maybe a little bit 5% to 7% less, but then January, February, March will be much better. Because in January, new models start coming, so people start buying from next year. And then what happened in the last quarter because India is making more of chappals. The chappal season start in summer time. So for summer time, they start making our stocks from February, March. So that means maybe October, November, December may be a little bit down. Little bit down mean by first quarter, maybe a little less than second quarter. But the fourth quarter will be much higher. If you see, in totality, I think we expect to come to INR 600 crores.

Okay, okay. And sir, on the domestic OEM. This quarter, we have done around INR 50 crores, INR 58 crores based on the number you have given. Sir, what...

OEM, it was 31% and earlier was INR 58 crores.

Right. So earlier, we were in the...

Mr. sheth, may we request to return to the question queue for a follow-up question, please.

Can I complete this question or?

[Foreign Language]

[Foreign Language] quarter, what has driven this bump up in the revenue in domestic OEM inside?

[Foreign Language] auto OEM domestic [Foreign Language] INR 58 crore.

INR 58 crore.

INR 58 crore, we have sold. It's very good amount.

Right, right. And what is [Foreign Language]

[Foreign Language] So first quarter, second quarter is much, much higher 60%, 70% [Foreign Language] because of corona, sale was less compared to April. April was highest. [Foreign Language] INR 62 crores, INR 63 crores [Foreign Language]. June, July, August, September [Foreign Language] The last 2 quarters of the last year was higher sale.

[Foreign Language]

[Foreign Language]

Hello? You might close the conference call. Time is over.

Yes, please. As there are no further questions, I would now like to hand over the conference to management for closing comments.

Closing comments.

Hello.

Hello.

Hello ?

Yes, sir, proceed with the closing remarks.

Hello. Yes. I must thank all of you and Monarch also to arrange this conference call, and I can assure all the people who are listening that Mayur will do his best to make the best of the performance. And we can look forward for the good future. And this year, as I told you that there will be the hope for a minimum 20% growth. Thank you very much for supporting all of us -- all of you have supported Mayur. And I think we will try our best to keep you satisfied. Thank you.

Thank you. On behalf of Mayur Uniquoters and Monarch Networth Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.