Shaily Engineering Plastics Limited (501423) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Shaily Engineering Plastics Limited Q2 FY '22 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Sanghvi, MD, Shaily Engineering Plastics Limited. Thank you, and over to you, sir.

Thank you. Good afternoon, and a warm welcome to all the participants to the Post Results Investor and Analyst Meet of Shaily Engineering Plastics. I hope you're all keeping safe and healthy. I have with me Mr. Sanjay Shah, our Chief Strategy Officer; and SGA, our Investor Relations Advisers. I hope you've had a look at our investor presentation that is uploaded on our website as well as the stock exchange. I'm happy to share that we've registered our best quarterly revenue in Q2 FY '22. This is on back of improved traction seen across segments and ramp-up in projects. The visibility we have across various businesses gives immense confidence that we will be able to scale up further and grow. During September, we commenced commercial operations at our new plastics facility in Halol, and we expect further ramp-up in production over the coming quarters. I'd like to mention our Healthcare business, with Specialty Pen business, and say that it has potential of doubling the volumes from a current level in a span of the next 2 to 5 years. Similarly, in Toys business, our clients have planned to source significantly from India, and we have limitless opportunity to grow with that. We remain very optimistic on growth going forward. Previous year same quarter, we had made an announcement that we have established a new wholly owned subsidiary, Shaily U.K., with the sole purpose of creating leading technologies across the pharma business segment that can be licensed to our customers either directly or through product manufacturing supply. The second wave of COVID led to extension of travel restrictions and caused delays in setting up the subsidiary. Today, we have successfully set up our design and research center in the U.K. and look forward to expanding our brand with this subsidiary. I'm happy to share with all of you that the Board has approved an investment of up to GBP 1 million in the Shaily U.K. This is in addition to the investment of GBP 200,000 made by the company towards equity share capital previously. We have concluded the fund raise announced in August 2021. We will deploy the funds to capitalize on large opportunities we see within most of our businesses. We have a clear vision of next 18 to 24 months in which we would like to utilize our funds strategically in various parts of our business. That is all from my side. I shall now hand over the call to Mr. Sanjay Shah, our Chief Strategy Officer, to give you the operating and financial highlights for quarter 1 of FY '20 -- for quarter 2 of FY '22.

Thank you, Amit. Good afternoon, everyone. I'll be sharing with you the highlights of our operational and financial performance of Q2 and H1 FY '22, following which we will be happy to respond to your questions. During the quarter, we processed 4,498 tons of polymer as against 3,986 tons in Q2 FY '21. In Q1 FY '22, we processed 4,093 tons of polymer. For H1 Q1 -- H1 FY '22 we processed a total of 8,591 tons of polymer as against 5,801 tons in H1 FY '21. Machine utilization rates were 69% in Q2 FY '22 as similar to Q2 FY '21. We have added a lot of machines in the intervening period in the last 1 year. Exports during H1 FY '22 stood at 69 -- 79% of total revenue as compared to 69% in the same period last year. I shall now brief you on the stand-alone result highlights. Revenue stood at INR 144.9 crores during Q2 FY '21 (sic) [ Q2 FY '22 ] as compared to INR 98.7 crores for the same period last year, marking a growth of 46.7%. In Q1 FY '22, we did revenue of INR 120 crores, marking Q-on-Q growth of 20.6%. On yearly basis, H1 FY '22 revenue stood at INR 265 crores versus H1 FY '21 revenue of INR 145.3 crores. Commencement of commercial supplies from the new plastics facility in Halol shared further boost for the revenue for the remaining part of the year. EBITDA for Q2 FY '22 stood at INR 23.8 crores as compared to INR 17.7 crores in Q2 FY '21 and INR 20.2 crores in Q1 FY '22. EBITDA margin stood at 16.4% in Q2 FY '22 as compared to 17.9% in Q2 FY '21 and 16.8% in Q1 FY '22. For H1 FY '22, EBITDA stood at INR 44 crores, with 16.6% EBITDA margin versus INR 21.1 crores in H1 FY '21 with EBITDA margin of 14.6%. Net profit stood at INR 10.5 crores for Q2 FY '22 versus INR 7.3 crores for -- in Q2 FY '21. Net profit stood at INR 18.5 crores versus INR 4.3 crores in H1 FY '21. Cash PAT for Q2 FY '22 was reported at INR 16.9 crores as compared to INR 11.9 crores for the same period last year. For H1 FY '22, cash PAT stood versus INR 30.8 crores versus INR 13.4 crores in H1 FY '21. Consolidated results include total assets of INR 1.92 crores as at 30th September '21 in total revenue of nil and total net loss of INR 0.1 crores from Shaily U.K. Limited, a wholly owned subsidiary of Shaily -- the company. Gross debt at the end of 30th September 2021, including working capital, stood at INR 257 crores. For the quarter, we incurred CapEx of INR 57 crores. We expect FY '22 CapEx to be in the region of INR 80 crores to INR 100 crores. With this, I would like to summarize on our operational highlights front and let you know that we are working actively towards diversifying of our business model and you will see better chances in the quarters to come as the orders start ramping up. We also take this opportunity to wish all of you very happy Diwali and a prosperous New Year. That is all from our side. Now we can open the floor for Q&A.

[Operator Instructions] The first question is from the line of [ Atul Kothari from Progwell Securities ].

Sir, I have a few questions, especially on our U.K. business. Sir, I wanted to know, should we expect revenue from Shaily U.K. in FY '22? And as and when the revenue starts flowing into our top line, can you explain as to what will be the nature of the revenue?

Yes, we expect revenue in FY '22 and the nature of the revenue to be...

I'm sorry to interrupt you, but your...

Amit, your voice is very faint.

I said we are expecting revenue in FY '22 in Shaily U.K., and the nature of our revenue is going to be primarily designed in onetime platform fee, as we call it, access to onetime platform fee.

Okay. Sir, basically, what kind of investment are we doing in Shaily U.K.? So is it basically on the technology front or on the R&D front? Or are we setting up a new manufacturing facility?

Atul, we are not setting up a new manufacturing unit. What we're setting up is a design center. In terms of the investments what we are making is basically setting up the design center and everything, and looking at acquiring IPs and commercializing them. So that's what we would be doing there.

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

Sir, congratulations on the improved traction. Sir, couple of questions. One, with the improved traction, there is also incrementally a case building up of value mix improvement or product mix improvement, yet the margins are lagging. So some comments there. And when do you see the margins also improving with the revenue traction or the value mix improvement?

So Pritesh, there's a couple of things. When you look at margins, if you were to look at last 2 quarters -- or last 3 quarters, you have seen raw material prices being pretty high, and the raw material price change with our customers happens with a lag. So that lag effect has basically led to a reduction in the gross margins by about a little over 100 basis points. We expect that gross margins will be back to normalized levels before the end of the quarter. Second is, we are now seeing ramp-up happening in the Carbon Steel facility, the steel furniture facility. And we see the ramp-up happening in Q3 on the new plastics facility, which will basically lead to an overall reduction in the fixed cost, which will -- basically should lead to margin improvement as we move forward.

Okay. The Carbon Steel unit ramp-up in the sense it's now operational and running. I think it was operational and running since the last -- since quarter 4, right?

It was operational -- we started the first product in December. We commercialized operations in December. And then quarter 4 and quarter 1 is when we commercialized all the products. And now we are going through a ramp-up on that facility.

Okay. The other question is now since half year has gone through and we are at about INR 265 crores to INR 270 crore odd revenue that we have reported, and the past call also talked about continuous traction on a Q-o-Q basis on the top line side. What kind of top line do you foresee based on the projects under execution that you have for FY '22? And specifically on the Carbon Steel project, which was expected to about, I think, INR 100 crore odd revenue, where would we be on that journey?

So Pritesh, I think on the revenue front, we will still stick with the number which we have been communicating since the last 2 quarters. We see a revenue of about INR 550 crores to INR 600 crores in the current year. Carbon Steel, INR 100 crores is what we would be looking at for FY '23.

The next question is from the line of Ritesh Shah from Investec.

My first question is for Sanjaybhai. Sanjaybhai, what should one make of working capital days? Inventory days have increased and overall cash conversion has actually increased significantly. I think in the last quarter you had indicated that there was a buildup on the back of the orders on the Toys side. So any related update to Toys segment as well would be quite useful.

See, working capital days, Ritesh, if you want to look at it, while there has been a slight buildup on working capital days, as we move forward between quarter 3 and quarter 4, you would see improvement in working capital days. So working capital days on a net level should start coming down. On the Toys front, we continue to typically exhibit the orders, which we have taken on. So on the Toys front, on a couple of projects, we had seen full ramp-up happening. So that business is basically, if you were to look at it on an individual basis, we have got back to normalized levels. But the other was -- as to the other projects there, we are still at the project stage, and we should basically be completing or starting supplies in Q3 and Q4. So it will take us some time to get back to normalized levels on working capital on those 2 projects.

So would it be possible for you to quantify incremental numbers on price? I think we had initial orders of around $7 million, $8 million. Has there been a further buildup on that or have you already started shipments to the Vendees and Toys...

We have started shipments since quarter 1 and quarter 2. So quarter 1 includes shipments for toys and quarter 2 also includes shipments for toys. I think for the current year we will still remain in the range of $7 million to $8 million. And we are now looking at building up the pipeline for next year, which we think should probably be higher than that.

Sure. And are there any other companies that we have approached wherein we can actually increase our vendor base from 2 to more? That's also something that we had indicated earlier as part of our strategy.

So Ritesh, we are in discussions with 2 or 3 other customers, but still at an initial stage. The first product which we have supplied is just out in the market. So we should be getting a much better visibility once people start buying that product. Incidentally, it's a global launch of that toy from Shaily. So -- and it's a pretty prestigious product. So we expect that there will be good visibility for Shaily -- for that. And we should see traction as we move forward.

That's very encouraging to hear. And the other question is, anything specific that you'd like to add on the pharma side, devices, any global launches? Or how should one look at the pipeline? Or how are we looking to monetize it probably this year and next year? If you can provide some color and numbers over here would be great.

I'll let probably Amit answer that. Amit, do you want to take that one?

Sure. So we are currently working on a couple of new molecules. We're working on an auto-injector for semaglutide. We have just acquired IP on this product, and we'll be developing it in Shaily U.K. as our first official project. In terms of revenue, we're seeing -- we're hoping for approval on teriparatide in the U.S. market with one of our customers, which means that we will be able to make -- start making commercial supplies as early as, I would say, between half of calendar '22 and the last quarter of calendar '22. We anticipate similar traction also on our pens that have been supplied for liraglutide because these are almost launch-on-approval products. So we anticipate supplies to start between end of '22 and middle of '23 for both these products. We're looking at initial volumes of 150,000 on teriparatide and close to 1 million on liraglutide.

And the pipeline looks good, right, from an execution as well as launch standpoint? The reason I ask is, I think, earlier we had indicated that pharma could be as big as home furnishing by, say, FY '24 or FY '25. It's typical because of the molecule...

Ritesh, we have not said that. What we have said is, over the next 3 to 5 years, pharma would basically grow at a level between 2x to 3x from the current level.

Yes, yes.

So that's what we have said, just to correct that out.

And that still looks very promising. So I don't think we'll change the indication on that because we do anticipate 2x to 3x growth on pharma over the next 3 to 4 years.

[Operator Instructions] The next question is from the line of Hitesh Taunk from ICICIdirect.

Sir, I have 2 questions. One is, we have seen a good traction from the export business. And now if you see the export revenue -- the contribution from the export revenue has increased significantly of around 70% to 79% in this first half of FY '22. Just wanted to know whether this contribution is largely increased from the Swedish Furnishings Major or is it some other products, which are driving this export? The first one is this. And the second one is, sir, if you want -- I just want to know some update on the RoDTEP front, which is export incentive program, whether this is beneficial for us or not? These are the 2 questions I have.

Hitesh, on the export front, the growth is coming in from multiple segments. One is in Swedish Home Furnishings customer as well as on the Toys. So quarter 2, we did a major ramp-up on Toys, which saw increase in revenue. So you've seen ramp-up, our overall exports as a percentage of revenue going up on account of that. On RoDTEP unfortunately, till date EOUs are not covered in the RoDTEP benefits. So while the government has been making noises it will get covered from 1st of April, we don't see clarity in terms of how and at what rates they will be covered. So we -- I don't think it will be right for me to comment on that. Once we see some clarity from the government on just in terms of how EOUs get covered and at under what rates, we would be able to comment on that.

The next question is from the line of Kaushal Shah from Dhanki Securities.

Sir, we had earlier indicated about CapEx plan for the next 2 years, FY '23 as well as '24. So should we continue with that? I think it was in the region of around INR 200 crores, if I'm not mistaken. So do we continue with that plan or we want to tweak it, given that there is higher traction both in the pharmaceutical and in toys now? And the second question was on the Pharma segment specifically, we, I think, again, had indicated that there were some commercial opportunities likely in the next calendar year, CY '22. So that also remains on track?

I'll let probably Amit answer the second part of your question and then come to the first part of it later on. Amit, do you want to talk about the pharma?

Yes. The voice was very faint. Do you mind repeating the question, please?

Yes. So I think in the earlier call we had indicated about some commercialization happening for, I think, of pharma device or molecule, I think, in the next year and -- which would lead to ramp up in volumes. So in an earlier question I think you did indicate about incremental volumes coming through in the next year. So that was related to that particular molecule which is going to get commercialized in CY '22?

Yes.

Yes, Kaushal. So Kaushal, on the CapEx plan, I think we are still looking at about broadly if you were to break up the investments, we're looking at about INR 100 crores to INR 120 crores on the pharma part of the business and balance about INR 80 crores to INR 100 crores on growing our nonpharma part of the business, which would basically mean toys, home furnishings and other segments. So that's broadly what we are looking at currently. As we move forward, we see more opportunities coming up, we could probably revise it, but I don't see any -- based on current knowledge which we have, we are looking at about INR 200 crores.

And this INR 200 crores will be spread over 2 years, FY '23, '24?

Right. Part of it -- some of it will be done in FY '22 also. So between now to the next 24 months is when we would basically be spending this amount.

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

Sir, just clarifying on this CapEx. So initially, you mentioned INR 60 crores have been spent for H1 FY '22 and INR 80 crores to INR 100 crores is what is for FY '22. And over the top of that, there is INR 200 crores or part of this INR 200 crores is also a part of the FY '22 number?

So part of the INR 200 crores is part of the FY '22 number, Pritesh. And that's what I told Kaushal. So what we spend from now till March will basically be part of INR 200 crores, which we are spending, so...

Basically, INR 150 crores kind of number comes in the next 2 years. That is...

Are you...

Okay. INR 200 crores.

If you were to look at from October '21 onwards for the next 18 to 24 months, we will basically be spending INR 200 crores.

Okay. So INR 100 crores and INR 100 crores. And...

Yes. What we spent essentially last quarter was basically mainly on the new plastic facility which we set up in Halol. So over -- a large part of that amount was basically in the new plastic facility, which we set up in Halol.

That was about -- that is after the CapEx we did for the furniture.

Those 2 furniture facilities. Yes, the 2 furniture facilities. So this...

After that, we did this Halol plastic factory, right? How much did we spend there?

On the Halol plastic factory, we will end up spending a total of about INR 60 crores to INR 62 crores.

And at what asset term?

It will be higher than the average asset term.

Okay. And sir, lastly, on the pharma side of the business, so on the pen side, we had certain products already on commercial supplies and certain new products to be added this year as well and some to be added next year. Now Amit mentioned -- did mention about the next year, the 2 molecules. But what is the progress on the existing supplies which we are doing, and a new molecule which was -- or a new platform which was supposed to get commercialized in '22 itself, so any progress there?

So Pritesh, '22, the commercialization of the molecule, which was submitted back in 2019/'20 is in progress. We're expecting approval over the next 6 months, which means commercial supplies will start in '22. On the other 2 molecules where we've made clinical supplies, we anticipate launch also towards the end of -- or towards the middle of '23 to -- beginning of '23 to the middle of '23, where we see substantial volumes ramping up. The other market that we have supplied into, and we actually have open orders for is in the Middle East. So there have been quite substantial business development efforts, and we've seen the fruits of that effort. So we are in the middle of making supplies to the Middle East. This is all for our platforms. Apart from that, if you -- I don't know if you've seen Sanofi has launched a product in India recently, a new -- which is obviously -- which is also made by us.

Okay. So I'll just conclude here. On the new commercial side, bulk of your -- one of the platform is supposed -- hello?

Yes, yes. Go ahead, Pritesh, we can hear you.

So on the incremental supply side, one of the platform or one of the molecules is supposed to get commercial next year and 2 molecules will get commercial year after next year, right? That's how it is.

Yes.

The next question is from the line of [ Akash Mehta from Kapal Investments ].

I had a couple of questions, first being on the operational efficiency front. Just wanted to know how much we've evolved over the past few years in terms of our operational efficiency? Are we reducing our dependency on labor and getting technologically advanced or we've changed our recruitment policy of people? If you can just throw some light on this area.

So Akash, the new facility which we have set up for plastics is a fully automated facility. We would be putting on a video of that facility on our website shortly, I think probably before the end of November. I would suggest that you guys have a look at it. It will probably give you a sense in terms of the type of plants, which we are setting up now.

Okay. I think that could be helpful going forward. And secondly, on the capital infusion and borrowing front, that's almost doubled since the March '21 level. So what will be the duration of converting these investments into the top line?

I lost your question in between, Akash, if you could repeat it, please.

So on the capital infusion and borrowing front, it's almost doubled since the March '21 levels. So what would be the duration approximately of converting this into the top line?

We're already seen ramp up. So the capital fund raise, which we've already done, would be spent over the next 18 to 24 months as we talked about. So it will be gradual across different projects which we are talking about, and it will be over the next 18 to 24 months when we'll be spending that. The borrowings, which have been done, are basically for the new plastic plant which we have set up, which we have just commercialized in -- by end of September. We are looking at ramping up as we move forward. So you should see ramp in revenue between Q3 and Q4, which will basically...

Q3 and Q4?

Right.

The next question is from the line of Aman Vij from Astute Investment Management.

My first question is on the Toys business. So in the last few calls you had indicated that our customers were like $80 million to $100 million annually from India. And we are maybe like a single-digit wallet share as of now. For the next 2, 3 years, do you think we can become one of the main customer supplier to them? And maybe if you can talk about the largest current supplier from India [Foreign Language], are they like 20%, 25% wallet share? Or do you think these customers will always rely on 10, 15 players rather than 2, 3 big players?

The current largest player in India is a number which is what you talked about. It's a little higher than the number, which you talked about. And there is possibility to get to that number over the next 3 to 5 years. We are working with these customers to see how we can increase the number of products or number of SKUs, which we do for them and increase the wallet share. So since we just launched the first product, I think both of us are understanding each other a little more better. We're also trying to understand this market a little more better. And -- but I think we see enough opportunities on growing this business as we take -- as we go into FY '23 and FY '24.

Sir, to reach to the next level, do we think these 2, 3 customers will be enough or will we require a substantial addition of customers as well?

I think the numbers which we are talking about, we should be able to reach with 2 or 3 customers. But in Toys, we would be looking at adding more customers as we move forward to basically build up space.

Sure, sir. And you talked about we had achieved peak kind of run rate, I think, in Q2 some time. So any reason we are not gearing up faster? You have talked about similar run rate for the remaining quarters for this year only.

No. What we have said -- what Amit mentioned in his speech was that we achieved our highest revenue in Q2 FY '22. We have not said that it's the highest, which we'll achieve and we're not looking at going beyond that. So I think we'll see as we go on the numbers for FY -- Q3 and Q4, you should see a ramp up happening on that revenue.

Okay. Okay. That makes sense. The second set of questions is on the Pharma business. First, on the CRC caps, if you can talk about our utilization level and what we have heard other players are also thinking about adding CRC caps in their portfolio. So if the competition increasing, what kind of opportunity is there for CRC caps for us?

So Aman, when we look at reporting utilization levels, we don't report utilization levels across the business segment or across the specific business. Most of our business or our capacities are fungible across different businesses in every time. So...

Sanjaybhai, can I answer?

Yes. I'm saying -- yes, go ahead.

We're doing about -- on the caps, we're doing about 20% to 25% of our annual capacity. And the business is fairly steady. We add customers if we see a strategic fit, including on pricing, and that will continue, but there are no special efforts, in general, to ramp it up even substantially further. So while we have a capacity of manufacturing $100 million closer to the year, most of that capacity is now being used for devices, which means that at the moment we will do $20 million to $25 million closer to the year.

Sure, sir. And finally, on the Pens side, you have indicated some numbers 150,000 and 1 million for the 2 molecules over the next 2 years. So sir, if you see, we are doing currently 6 million run rate annually, if my memory serves me right. So over next 2 -- maybe 3 to 4 years because 2 years, all these products will get launched and they will take maybe 1 year to ramp up, so do we think from 6 million we can go to that, say, doubling of this volume? Or do you think the realizations are much higher, so we won't even require doubling of volume to achieve whatever targets we have in our Pens business?

I think if we look at next year, if I look at the visibility for next year, that 6 million is going to close to 9 million, 9.5 million anyways. So I feel confident that in 2 years, we will get to somewhere between 10 million and 12 million pens. And of course, the realization is higher because they are our own platforms. So there is -- the money that we invested on creating IP, designing, developing is part of the revenue here. But having said that, I still feel doing 10 million to 12 million in 2 years is going to be very possible.

Amit sir, just one final clarification on this part. So you have talked about Sanofi new pen and we will be one of the supplier, if not the only supplier. So is this ramp up happening only because of the contract manufacturing part or do you think the bulk of the doubling of, say, our pens capacity of our own IP pens also?

So far -- the numbers you speak of so far, as we sit today, you will see that 80% of the volume comes from contract manufacturing, that will change to 60%-40%, maybe 55%-45%.

In the next 2 to 3 years basically you are indicating?

Yes, that's right.

The next question is from the line of Ritesh Shah from Investec.

Sir, just a follow-up question. We were scouting for a CEO for the comp. Any progress over here?

Sorry, Ritesh, we were scouting for?

We were looking to bolster the top management. Any progress on incremental management hiring at the top level?

Amit, what Ritesh is talking about is the replacement of CEO.

Yes, yes, yes. I'll take this. No, we are -- look, I think we are still scouting. We've added a consultant this year. And really, that's on the technical front. We're revamping the way we do injection molding. We're introducing a process through which it becomes more of a science than the art it is using the years of experience that we have. So we've hired an expat in that regard who is running our entire revamp on the technical side. But we still continue to -- we've also hired a very senior fellow in procurement, but we still continue to look for that CEO to say. And I believe that over the next 12 months we should be -- we will be in place with one on Board.

Sure. That helps. And my second question is, are we facing any challenges on the logistics side, be it containers or freight costing, et cetera, et cetera, which could hamper the revenue numbers in the short term or is it something which is pretty much okay and is...

So Ritesh, logistics -- sorry, Amit, you're -- okay, go ahead.

No, no. Go ahead, Sanjaybhai. We'll have the same answers. Go ahead.

So Ritesh, logistics is a challenge. It would not be correct of me to say it's not a challenge. It's a challenge in terms of inbound as well as outbound. Revenue numbers which we achieved in Q2 could have been higher if logistics issues were not there. But we're trying to find solutions to it. One area where we have an advantage is in most of our cases over terms with customers are export, so it helps us. But I mean the customer also looks at in terms of the freight cost which he's paying and that does impact as we move forward. One of the reasons I think -- I don't know whether you asked that question or somebody else asked the question, why do we have higher working capital -- yes, you asked that question, working capital days. One of the reasons for higher working capital days, especially on raw materials and FG -- SFG is basically because looking at the logistics issues which we have on a lot of imported material, we would be increasing the same volume [Technical Difficulty]. That's one reason why you've seen a little higher working capital days. I expect things to improve in the next 6 months, 6 to 9 months, and we should see some further improvement as we move forward. But yes, it is a challenge right now.

Sure. And the last question, polymer prices have moved up significantly. I understand we operate more or less on a cost-plus basis, it will accrue probably like a lag. So is there some risk over here or is it very much normal status quo on our business terms with our partners? And one should assume...

Ritesh, yes, you are right. We will get with a lag. So some of it has happened, some of it will happen with a lag as we move forward.

The next question is from the line of Faisal Hawa from H.G Hawa and Company.

Sir, to me, this looks like a business where the growth could be almost unlimited because of our inherent advantages of low cost and having to really being able to do a lot of manufacturing quite easily. So what are our -- ultimately, how do you see this going year-on-year? Can we aim for a year-on-year growth of at least 20% or 15% sales on a volume basis? And what would be the contribution of our top 5 customers to revenue?

So Faisal what we have been saying is if you -- on all of our -- most of our calls what we've been saying is we should basically be looking at about 25% CAGR growth over the next 5 years, where -- yes, there will be some years or some quarters when we will have higher growth, there will be some years when we will have lower growth. But on a CAGR basis, that's what we would look at.

And what would be the contribution of the top 5 customers to our revenue?

So top 5 customers will account for about 80% plus of our revenue.

The next question is from the line of Kaushal Shah from Dhanki Securities.

Sir, if you can throw some more color on our Swedish plant? We were going to add some more SKUs, both on the carbon steel side as well as on the plastic side. So anything there incrementally?

So Kaushal, we just started a new facility called the Home Furnishings Major where we would have added about -- close to about 15, 16 of the top-selling SKUs or -- and we just commercialized all of these in September.

This is on the plastic side?

This is on the plastic side.

Right. Okay. Okay. And anything on the steel side?

Yes, the steel side, we have already commercialized about 6 products, where we are looking at ramp up. And once we get to that ramp up, we will look at adding more products and customers.

Thank you. [Operator Instructions] As there are no further questions, I would now like to hand the conference over to Mr. Amit Sanghvi for closing comments.

Thank you, everyone, for joining the call. We hope we have been able to answer your questions adequately. For any further information, I request you to get in touch with SGA, our Investor Relations Advisers. Thank you very much. Happy Diwali, Happy New Year and stay safe.

Thank you. On behalf of Shaily Engineering Plastics Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.