Mayur Uniquoters Limited (522249) Earnings Call Transcript & Summary

Ladies and gentlemen, good day and welcome to Q4 FY '22 Earnings Conference Call of Mayur Uniquoters Limited, hosted by Monarch Networth Capital. [Operator Instructions] I now hand the conference over to Mr. Rahul Dani from Monarch Networth Capital. Thank you, and over to you, sir.

Yes, thank you, Margaret. Good afternoon, everyone. On behalf of Monarch Networth Capital, it's our pleasure to host the senior management team of Mayur Uniquoters. Today, we have with us Mr. Suresh Kumar Poddar sir, Chairman and Managing Director of the company and Mr. Vinod Kumar Sharma, CFO of the company. I would now request the management to provide the initial comments about the results. Thank you, and over to you, sir.

Yes. Good afternoon, everybody. I welcome all of you to the fourth quarter and the year [indiscernible] so we will discuss in the -- our CFO will discuss using his part of speech. After that, we will start the question-and-answer, don't hesitate to ask anything, I'm here and Mr. CFO will be -- is at live. Thank you.

Thank you, sir. Thank you. 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 Q4 FY '22 Conference Call. Mayur Uniquoters Limited being a market leader in the synthetic leather industry and an organized player 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 second half -- in the year, but the auto makers are still facing the production problems due to shortage of semiconductor chips in international market. And because of this, our OEM export sale is impacted in the quarter. However, we are hopeful to regain the OEM sale and demand from the international market after 4, 5 months. Now I would like to start the financial highlights for Q4 FY '22 under review. We will also reply your queries if any after our review on the financial results for the quarter. The company has achieved revenue from operations on a stand-alone basis, amounting to INR 147 crores, PBT INR 25.5 crores and PAT INR 19.5 crores during the quarter, which is, in fact, decreased by 13%, 12% and 11% respectively from the last quarter. The revenue from some operations on consolidated basis is INR 162 crores, PBT is INR 33 crores and PAT INR 25 crores and also has decreased by 10%, 5% and 4% respectively from the last quarter. Our endeavor is to make the company a preferred supplier for the leading OEM, especially in U.S. and European regions. We are also pleased to share that the company is already approved by Mercedes-Benz in South Africa, BMW and Volkswagen in India carmakers, supply also started Mercedes and Volkswagen for their new models. The product supply to BMW is also expected from January '23 and our company is also entered into the sell agreement with Baxter India for our products supplied to Kia and Hyundai Motors in India, as well as global market. Regarding our new plants, almost all the project activities are completed now, except some small civil and site development work. We have also decided to put up a varnish plant, a new plant -- few site land site, which is expected to be completed in current financial year. While pursuing our business interest, Mayur Uniquoters also been endeavoring to fulfill our responses to other society. Under the corporate social responsibility programs during COVID pandemic period and COVID wave, the company has done vaccination programs in nearby villages, staff members in both the plants besides contribution towards the food, oxygen and donated kits, factory kits, oxygen concentrators et cetera, to the hospital, police station and Industries Association through CII and SOCM. The company has also adopted many hefty schools for education of children and 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 school area, distribution of books, cloth and most importantly family planning and family welfare schemes. The state government has also recognized these initiatives taken by Mayur's on various platforms. And we are thankful to all the investors for their valuable time to those who became the part of this conference call. And with this first few note, I would like to conclude and request you all to open the phone for questions and also request to -- because of time constraint, we need to end this call within 45 to 50 minutes, therefore kindly avoid repeated questions and looking to the bucket and competition, volume data will not be discussed. So please avoid volume data queries also. Thank you.

[Operator Instructions] The first question is from the line of Pritesh Chheda from Lucky Investment Managers.

Yes, sir, since the beginning of the year, we were hopeful that we'll ramp up supply with Volkswagen and Mercedes South Africa, which is a high realization product for us in the last quarter. Just wanted to understand what exactly happened there? Any case Volkswagen was a new client and Mercedes is a new client, so your comments on that.

See, this chips problem, semiconductor problem is going on from last 1 year. Now whatever projection they have given so far Mercedes-Benz is concerned, it was quite low, not even 50%. But from last 2 months, they are doing very well.

Okay. Hello? Hello?

Ladies and gentlemen, we lost the line for the management. [Operator Instructions]

Yes, okay. Should I start? Yes, please. So that is one thing I have spoken about Mercedes-Benz. And now Volkswagen, we are doing okay business, there is no issue. No problem. Whatever they have said, they are buying, only thing which has happened because of this quarter 4 results after market was a very big market. We were doing about 7 lakh liter per month, but this quarter, it is not more than 3.5 lakhs liter to 3 lakhs liter because now automotive industry has decided -- the government has sold automotive industry that they have to have that working project [indiscernible]. Now they have made it compulsory to start AR value in all the costs. So the problem is when you have airbag in all the seats, on front seat and back seat and for the replacement market, it is little difficult to make that capable of able to put it with the air bag. So they are working on it seriously and finding some solutions. And hopefully, that solution will come and it has started coming because this quarter, it is improving, not as the old one, but it is into mean. So the main reason of this quarter is this problem because of this problem was the aftermarket and so far as profit is concerned, you have seen it's gone down by 6%. See, are you clear or anything else?

No, I just have a follow-up. So just wanted to understand this Mercedes, what kind of volumes -- so there is 0 volumes in the quarter, there is no pickup. How should we read it?

This quarter, it has increased to INR 30,000.

This quarter means the quarter gone by in March or the quarter which is going to come in June?

Quarter gone by March was down, but April, May, June there is improvement, part full improvement.

So between December and March it has gone down and now there is improvement?

Yes.

And what you mentioned about the replacement market, just because cars are being fitted with airbag, so it becomes difficult to put up a seat cover on it, that's how it is in the aftermarket?

Exactly, so that they are working out and government has said that from October rework will start, so that's why nobody was keeping the scope also and people were scared. But the way things are moving, it is impossible to start from October because they had to also prepare a lot of things. What we have seen in this quarter, this is improving by 50%.

In the June quarter?

Yes.

The volumes which are down from 7 lakh liter to 3 lakh is back to 4.5 lakh, 5 lakh liter, that's where you want...

Yes, yes, yes.

Okay. Sir, just last question. So based on whatever FY '22, if you could just -- I know you don't share volume, but if you could just share the volume growth or decline number? And what is the expectation for volume growth in '23? Hello?

[Operator Instructions] Over to you, sir.

I think we replied all the questions of Lucky Investment.

No, sir. Your audio was gone. So I just asked on FY '22, what is the volume growth number that you would have reported that would have experienced in '22? And what is the volume growth that you're expecting in '23?

Volume growth in '23 we are expecting.

Volume growth...

In '23 this year.

In '22, what it was and in '23 what are you expecting?

'21 -- volume in '23, I mean what is the -- we are expecting in '22, '23 and was in '21, '22, am I right?

Yes, sir.

Yes, in the '21/'22, our volume was at 247 – INR 248.

[indiscernible] 24 crore.

2 crore 48 lakhs.

I understood, sir.

Okay?

This year, I think the way things are moving should improve by 15% to 20%.

And how much did it grow in '21, '22 like 248 lakh liter the growth was...

28%.

28?

28, [Foreign Language] 2021 between and '21, '22.

So you have 7.5% growth is where...

That is in '22, right?

Volume right and value wise 26%.

The next question is from the line of Depesh Kashyap from Equirus Securities.

Sir, just want to understand the demand, how is the demand that you're seeing across various segments? You already talked about auto and the replacement market. So if you can talk about footwear?

For the footwear?

Yes, yes.

Footwear is down because there was a 5% GST. This government has increased to 12%. So from -- in the last quarter, the sale was very down. Although, our sale of automotive was not that much down compared, only that replacement market was down, but footwear is really down, now it is improving because the season starts from May, June -- April, May, June, July. And until Diwali, the market is going to be good, only 1 month will result and there full rainy season starts. Otherwise, this year, the footwear sale was down practically.

Sir, and among the PU plant, like how much sales did we do in FY '22 and what is the expectation now going forward, sir, like you are doing a backward integration also. So how is the sales happening in this?

Total sale we booked in PU plant approximated INR 27 crores, okay, in FY '22. And quantum volume-wise it was around 8 lakhs.

8 lakhs, okay? So still very low compared to the 120 crore production that the plant has right? So how are you looking at this?

See, as we have told previously also, there is lot of manipulation is going on in the import because all these carriers are importing from China, they are manipulating in quantity. They are manipulating in prices like health, I mean $2 [Foreign Language] So now the gap will reduce considerably. [Foreign Language] So -- but still we were managing with the good customers. Now the debt is reduced to between INR 30 – INR 25 to INR 35. So I hope the sale will at least 30% to 40% sale will increase in this year. And maybe if the things happened like this, maybe in '23 '24, we may able to reach the full quantum, may be, I'm not sure. But this year, it will definitely increase 30% to 40%. And after that year also I hope to increase by 30% to 40% [indiscernible], yes.

So we are not increasing the line of PU, right, we are initially planning to put one more line of PU, so that we are postponing?

And actually, let me -- today, I'm running one shift and as soon as we start running second shift in order for the line, that's to order the line and install it, they say that everything is ready, I don't have to do, right? In 6 months, we will be able to start the second line whenever we get the order.

Understood. Sir, last question, sir, what is the CapEx plan for FY '23 and the INR 47 crores CapEx that you have done in FY '22, what was that regarding, sir?

In FY '23, we are planning to do CapEx of around INR 51 crores, in which 50% will be spent on putting the varnish plant in Gwalior or in a plant, PU plant, okay? And the remaining will be incurred at the Dhodhsar plant for some expansion and working in other activities, which will add some value addition or capture the expansion.

Got it. And INR 47 crores in FY '22 was spent on what, sir?

It is also incurred on -- in the Dhodhsar plant on plant lamination plant and other cash expansion.

See we have put up one printing line, one embossing line because we have put up one coating line, which is -- which has already started. So to fulfill that, you have to add embossing, printing and then perforation. These 3 machines we have put up new machines in last year.

The next question is from the line of Rishab Bothra from Anand Rathi.

Just wanted to understand, you mentioned that because of ADT, around 25%, 30% incremental revenue will be available in '23 and '24, correct?

Yes.

This is only the rate -- duty has been imposed or there is quantum that friction from imports as well?

In PU?

Yes, in PU. I mean, you mentioned some sense in terms of rate of anti-dumping duty. So I just wanted to understand, is there a quantum that friction can also which can be imported or there is no quantum restriction?

So you see as already spoken to you that 36 rent anti-dumping rupee has been raised off. So that has already started from 25th of this month, May. And as I told you, the difference of the prices will reduce. It will not come to China price because of these manipulations. And then China is making huge quantity, that's why air cost is also much lower than us. Now we are working very seriously on manufacturing to you chemical also to fight with them. And we are talking to the government that how we can reduce the import duty on PU chemicals, so that very competitive with China. Now there are so many manipulations. In China, people are showing double their rate in their customs, so that they can get their 13% export benefit. So that benefit they can get and they can reduce the cost. So these things are going on, but until and unless, we had to fight with all the raw materials. Now why we are putting this work knit plant in Gwalior because in PU, here we have got 47 circular knitting machines. And in PU, most of the material is work knit. We have ordered for the machine of work knit also within next 9, 10 months, we will start that. So -- and there is rules different between imported this work made material and local material. Now local material which we are getting, I'm not happy with their quality. I mean why we have started circular knit because we were buying previously circular knit also from Indian market that they used to be always problem in development and all that. So we have decided to start this work knit also in Gwalior, so that our cost is reduced and we can make so many changes in the quality of the fabric to reduce the cost to enhance the quality. So -- and my third stage is go for 3. Now problem is that new production is not that big because I'm working on having a joint venture with some of the new chemical manufacturers, that main problem is coming of the quantity. So after this antidumping duty, we are very hopeful that in the next 2, 3 years' time, the quantity will increase. So I see a good future in the future for PU because once we start making PU chemical here, then we can beat China. Now we are bidding China in PVC, PVC is important in India. The reason is that we are self-sufficient in everything in PVC. And PU also so far Fabric is concerned, there is no issue. The only issue is that PU chemical that we are working on and I'm very hopeful that something will come out.

So just wanted to understand -- yes, yes, tell me sir, sorry.

I said we have [indiscernible] gradually inhouse is antidumping, every single competitor and in those who are importing from China they were as I discussed. But if the lobby and all that, we were able to make it happen. Now like that also in one short you cannot do so many things. So next work we are working with 3, 4 companies who are manufacturing here. We are working on reducing the duty also, but only reducing duty because duty is not much, it's 10%. So even if reduce maybe 5%, but that will not make very big difference. Now the difference will be there by manufacturing it. I'm working with the technical know-how also with some of the good Chinese manufacturer from whom we are buying the chemicals. They are already, but only thing is the quantity. So that will happen within a year's time, a year or 1.5 year time.

Just wanted to understand the industry dynamics, you mentioned in PVC we are self-sufficient, but what could be the quantum of import still happening in PVC? And what would be the quantum of imports happening in PU, [indiscernible] you can mention? You are 20% domestic manufacturing, 80% still relying on imports how is it on both the PVC and PU side?

Now in India, now at the moment PU is hardly 10%, 90% is PVC.

And low power market, sir?

In India, we are manufacturing 90% PVC and 10% PU. It means 90% is getting imported from China -- PU, PU.

No, no, you are asking between PVC and PU, right?

Yes, that I got it, sir, 90% imports in PU and 10% import in PVC, correct, year about?

No, no, no, not import, I'm saying the consumption. Consumption in India at about not even 90%, 95% consumption is PVC and 5% consumption of PU, that's what I'm. PVC is not imported in India because the cost calibrate is not there, so why anybody will import?

Got it. What's the mix for PU import and domestic manufacturing?

So can you repeat your question?

What's the mix for PU in terms of imports and domestic manufacturing?

PU import and domestic manufacturing?

PU import is at the moment, whatever is requirement is manufacturing is not even 5%, 95% is import.

And other than us anyone else is manufacturing PU? I mean are we the sole manufacturer or there are few small players as well?

There are more manufacturer....

There are 4 manufacturers in India.

And lastly, sir -- yes, tell me.

PU, there are 4 manufacturers in India including Mayur at the moment. And all the 4, we are not making even 5% of the requirement of India of PU. That means 95% of the requirement is 100, 5 liter is produced in India, 95 is imported, maybe 96%, 97%. And the main reason is the prices. Now we are in a position to make any kind of material which are imported in India from China. Mayur is capable of manufacturing that and that has been proved and people -- some people are buying who are exporting because in China, there is a problem for the quality also. But because of so much difference in the prices, we were not able to compete, now we will be able to compete maybe this from 5% increase to 15%, 20%. And once we start making PU, I mean within 4, 5 years, PU will also wiped up, for that we are working.

I would request Mr. Bothra to rejoin the queue for follow-up question. The next question is from the line of Aman Agarwal from Carnelian Capital.

Congrats on a good set of numbers. So my first question was maybe on the raw material price increases. So how much of the price increases have been -- we have been able to pass on to the customers? And how is the outlook there in terms of...

In this year, our raw material cost has increased by 6% compared to 2021. I mean whatever we have passed off, we have passed down 6% to 7% less because the prices has increased tremendously. We have increased in the whole year about 30% to 30% -- 27% to 30%, plus the price of PVC chemical like PVC, resin and plasticizer in case 80% to 90%. And the problem is that all the PVC manufacturer or plasticizer manufacturers are the big companies. They immediately increase the price, but when we go to the customer, they don't give it from tomorrow because there are line of customers, as I told you, in PVC, India -- Indians are not able to import because of the competition. So there are so many manufacturers in India of this PVC leather plus. So I say [Foreign Language] So that way it is not easy to pass on to the customer the same price. So that's why this is -- our profit has been reduced. But sir as you know our competitor, [Foreign Language] and that's because we have worked so many areas. We have export, we have general export, automotive export and we are working with very strong companies wherever we are exporting or in India also. We are not working with a seeker product.

Great, sir. My second question was on just Baxter India new orders which you were talking about in the earlier commentary. So like how much will be the volumes of this tie-up with Baxter India for the Hyundai and [indiscernible].

[Foreign Language] I mean the volume was -- they have predicted this year about between 20,000 to 30,000 per month, they've got a very good relation with Baxter because this -- Korean companies, they always keep a Korean person in between, they don't deal directly. So this guy to whom we have tied up is manufacturing PU, he is not manufacturing PVC. And he has got a very good hold in Korea and Hyundai company. So that's why we were able to get us this business. And now the same thing they are producing in huge quantity in Korea also, they are just saying let us work for 6 months, if everything is all right which will be, then we will work with the Korea also, where the price realization is also better and the quantity is also about 30,000, 40,000 what he said. And then he is prepared to give us business in other parts of the world, like Europe, America because he is supplying everywhere, wherever Hyundai is there. So he will try everywhere, wherever he is selling to you, he'll try to introduce in PVC. It will take time, it cannot happen tomorrow. The whole thing will take at least 3, 4 years, but it will keep on going every year. So this is one very good thing and other is asking us for PU also, if we can compete. So we are working on that also. We were given few sample also in 2, 3, 4 days, we will make the sample and then see what is the price difference where from Korea there is one advantage there is no import duty. Let us work it out. I mean this is a good opening from my point of view because this is addition.

Okay. Sir, a bookkeeping question really. So on the other income side, in this quarter, we have basically turned around INR 7.5 crores, INR 8 crores versus around INR 2 crores, INR 3 crores on a regular basis. So what cost is increase in the other income in this quarter was?

Can you -- clear your question and speak slowly, so that it's not echo.

Okay. So on the other income side, sir, in this quarter, we have slightly higher other income compared to the previous quarter. So I was just trying to understand the reason for this thing.

Basically, in other income, it has increased because of fluctuations in the foreign exchange and our investment income, prices has increased?

Sir [indiscernible].

Sorry to interrupt you, Mr. Agarwal. May I request you to come back in queue for follow-up questions as there are several others waiting for the turn as well.

Yes, sure.

[Operator Instructions] The next question is from the line of [ Anil Sharma from InCred ].

Yes, am I audible?

Yes.

But I would request you to come on the handset mode, Mr. Sharma. I think you are on...

Sir, just a question on -- after the [ ADD ] and the opportunity for PU is so huge, 95% is imported. So would you prioritize new PU lines or you would focus on PU chemicals to make it integrated first?

We have to focus on both. We have to focus on chemical import and as well as to produce more and more PU with imported PU also. As I told you that we have able to quote 46 cents antidumping duty, that will also help us. And one thing more, there are 2 kind of PU's, one is red PU, which we are making in Gwalior. Another is the dry PU, I mean in the same machine, which we are using, they're in Jaitpura and those are -- for that also we are making [indiscernible] PU and they have got an approval in America, this Chrysler company for their Malaysian plant and that is more than $20. And some trial orders we have got -- we have sent them 700 liters, maybe in next 3, 4 months we'll start selling them at least 15,000 to 20,000 mix. And then after that, we will start with Chrysler also. So we are working in all the front PVC, high-solid PU, direct PU. So today any kind of material in the world is being manufactured, any part of the world, we can make that bet. Of course, it takes time, but we are capable.

Sure, sure. That's interesting. Sir, second point is in the ADD, one of the manufacturers in China has been exempted from this. So 2 questions. One is what is the risk from this manufacturer? And also can imports be rerouted from other countries wherein so this...

Very possible. They are working hard from all the areas. They are trying to come through Vietnam and all that. Now we are working with the government, I have spoken to [ DRI ] people also that something has to be done. One side, [ Mobilia ] is saying [Foreign Language]. Otherwise, everybody was telling it is impossible, it cannot happen because all the footwear manufacturer and all the traders were against it, but even though it has went down. So I'm very hopeful, it's a matter of time.

All right. And sir, last question is, since this duty exemption or duty is for a 5-year period, between the 3 and 4 manufacturers, how much do you think can India take market share from 5% today in the next 5 years?

So the way things are moving, if some other things doesn't come in between, then it will increase. [Foreign Language] naturally other people will also come and I'm not worried for other people to come because the market will automatically increase. [Foreign Language] So I think it is better, I'm not worried with that. Today there are more than 150 companies who are making PVC leather, but we are still fighting and we are #1. So what is the main thing? One should never worry about other people are coming in. If your R&D is strong, if you have got a good machinery, you have got good people, we will fight. So I'm not worried, but rather I am happy that so many companies come so that my raw material will become cheaper. Then it depends on your technology. [Foreign Language] So the people are buying. [Foreign Language].

Right.

[Foreign Language]

The next question is from the line of Manjeet Buaria from Solidarity Investment Managers.

I had 3 questions. The first one, sir, was on this PU for auto OEM exports, you briefly touched upon the opportunity with Chrysler for their Malaysia plant. But could you just expand a bit more on that opportunity because you have been working for PU in the auto export market.

You see now what has happened, I'm talking this automotive market, this high solid PU which I'm talking is for the automotive market, not for the general market because it is very expensive, more than double and from wet PU, right? Now there is only 2 manufacturers in the whole world, one is in Europe and one is in Japan, third is Mayur, which could enter these 2 guys are selling. Now because the prices are so high, it's not that it can be used like PVC, casually, they are putting up and what they are doing, they are replacing leather because leather is still with this $20, it's more than $50 per square feet if you convert in PVC with cutting difference and all that. So what they are doing slowly, they are trying to replace Jenny and leather, even in PVC high-quality PVC. Today, the PVC which I'm supplying to Mercedes-Benz in South Africa, they are replacing leather in their high-quality cars also, can't say -- in when there are 3 parts. One is front driver part, then second is belt part and third is last one. So in last one from leather, they have started shipping through this PVC and PU. So this is happening gradually and it will keep on happening. Nowadays in automotive industry, there are 3 kind of products are used. One is artificial leather, one is Jenny and leather and then play. Now in some cases, fabrics are also replaced with PVC leather. Now because the automotive fabric prices are very low compared to our best quality of PVC leather which is introduced by this high [Foreign Language] gradually, it will grow, you will also grow, but we will grow very, very slowly because of this price problem. Now we have a contract with [ Bikesun ] right and now in some cars, they were using wet PU and Bikesun was supplying. Now to reduce the cost, they have gone to PVC, high-quality PVC, with the price wet PVC 30%, 40% [Foreign Language]. So you see everybody is looking for a change and how the price can be reduced. [Foreign Language] The quality of artificial leather has increased so much and it is getting better and better every day. [Foreign Language], right?

Hello?

Mr. [ Samdani ] any other question? Due to no response, we'll move to the next question. [Operator Instructions] The next question is from the line of [ Chintan Shah from Northstar Fund. ]

Yes, hello? Yes, hello?

Sir, I wanted to know how much percentage of raw material we imported in FY '22 and FY '21?

That sauce of the cup, which is not possible to tell you.

Okay.

Later, I will tell you.

Okay, sir. Sir, can you give me the revenue breakup for entire year '22 for export OEM, export and leather and other such category?

I can give you domestic and export.

Okay.

Domestic is 77 and export is 23%.

Okay. Sir, and the capacity utilization in PVC and PU separately, sir?

PVC around 65% and PU 24%.

The next question is from the line of [indiscernible] from [ Hexagon Assets. ]

My question is regarding, when the cost of raw materials and trade going forward normalizes, does the company has to correct the pricing for its product going forward and if yes, how long does it take for the company, like how -- till what time the company has to correct the pricing for products?

So current means reduction?

Yes, sir, reduction.

Naturally reduction will happen, it has started already happening because the prices have started falling down in PVC resin and plastic fiber. But the way it has been increased, it cannot be decreased like that because the main problem is the power and fuel prices have increased, coal prices increased 2.5x. So that effect is also there, as we are reducing some prices from 1st of this month coming from June because PVC resin and plastic fiber is falling.

Sir, a follow-up question on this. So sir, should we expect any sort of margin expansion going forward because of the elevated pricing?

Yes, of course, of course.

Gross margin will increase this year, the way it moves moving this year.

The next question is from the line of Awanish Chandra from SMIFS Capital.

[indiscernible] and congratulations, sir, on a different set of number in challenging time. So just one thing, you have mentioned that you were incorporated in [indiscernible]. So what is the strategy around that reason.

Awanish, your voice is very -- getting disturbed.

Yes, Chandra, your audio is not very clear.

Keep your mouth little away from the speaker and then...

Sir, I was -- okay, sir. So I was asking regarding this new subsidiary, what is the management strategy from that subsidiary and future outlook?

For PU?

From the new subsidiary, Mayur...

Okay, Mayur tech and the purpose of putting the...

You see, one advantage in artificial leather is that there are so many areas where it is used, I think wherever fabric is used wherever genuine leather is used, artificial leather is replacement. But we are filling B2B, not B2C. So B2B, you are dependent on your buyers who are making the final product. Suppose today you are manufacturing a footwear, you are getting money from your brand, that money you are not going to pass on to me because you are selling B2C and I'm selling B2B. Now the furnishing industry, it's such an industry that suppose you want to change the furniture of your house, so what you do? You go with the interior decorator, he takes you to the shop and there he shows the samples and then you buy. So we have started this company to go to the retail customer directly. That means even if somebody wants 10-meter, 20-meter we'll sell, but that size will be very high price naturally. [Foreign Language]. So to be in touch with B2C customer, we have taken this decision, we have already made 6, 7 lines heating the sample and maybe from July end we will start distributing. And one thing more I find out that in PVC leather cloth whatever artificial leather is used, that 50% of that is consumed in furnishing and in chair, sofas, restaurants and all that. So there is a huge market for this, if you go and we can make good money also, but it takes time, but you have to start. We have already started. Now let's see, I'm very hopeful, already we have decided more than 180 dealers all over India, all over India means we are starting with North and then we will start other parts. I mean, we have an idea of having at least 1,000 dealers all over India gradually and not happen immediately. So that's -- because this is another line, is a totally different line. So once the brand name -- our idea is to popularize the brand name. Today, if we are -- I'm supplying you, you are a manufacturer of sofas, chairs and all that, so you will buy the best [ MC ]. But once people know and if you know Mayur is there and actually as a customer, you will go to the shop and you will definitely ask him, can you show me some Mayur resin. So once the brand name is stable, then you can make money. Now today all these brands, foreign brands, what they are doing, they are buying all the material products like footwear and all that from third world country and just putting 4 times. Suppose if they buy some shoes in INR 1,000, their retail price is INR 4,000. So the brand name is very important. In my business, the only brand name can work with the furnishing, so that's why I'm starting. And today, we have very little business with furniture.

You got it, Awanish? Hello?

We lost his line, so we will move to the next question. The next question is from the line of Dhruvesh Sanghvi from Prospero Tree.

[Foreign Language]

Sorry about the disturbance, Mr. Sanghvi, please repeat your question.

[Foreign Language]

[Foreign Language] correct. Now if you talk about the world, 4, 5 big companies of artificial leather, they are all professionalized. There are hardly one, maybe one company who is owner company, all are your holds company, investor companies and they have naturally professional people. Now in Mayur also, I have started that. We had a very good CFO. Now we had appointed a very good COO who was handling 18 companies in previous -- his company. And gradually we will go for CEO also. So now I'm working on how it can be professionalized. Now in professional, you have to work with the professional companies, artificial leather [Foreign Language] very big footwear brand names, they are professional. [Foreign Language] furnishing industry B2C. And from my point of view, what you are thinking, we'll definitely make it professional and we are making it, now I'm not wasting so much time. I'm just looking at how we can expand what new plants can we bring, what new ideas can be brought in. And naturally these guys who I'm thinking they are getting used to by language, by ideas. So definitely what we're planning is that in next 2 years, I will try to make it totally professional, my job will be that, okay go ahead with this line, go ahead with this kind of a product, that's what we are doing. We have [Foreign Language] we have appointed a very senior guy who [Foreign Language], you see like that we have to organize the good people, that's what I'm doing.

[Foreign Language]

[Foreign Language]

I would request Mr. Sanghvi to rejoin the queue. Ladies and gentlemen, due to time constraints, that was the last question for today. I now hand the conference over to the management for closing comments.

Closing comments.

Yes, thank you for listening to me carefully and I assure you that Mayur will try to do their best and we're doing it for the benefit of the stakeholders and there is a huge opportunity, now I can see that -- I mean hold flat plate is there, we have to cash it, which we are doing it. Now you see, we've hired a European lady for R&D. Now I'm telling today you give me any product in the world Mayur can manufacture. Now it is time to expand the customers which we are doing and we are getting it successful. And I hope -- not hope, I'm sure that we will see the big change in next few years in the business. Thank you.

Thank you.

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