Sirca Paints India Limited ($SIRCA)

Good evening, everyone, and thank you for joining us today for Sirca Paints India Limited Q4 FY '26 Results Call. I'm Drishti from Finportal Investor Relations team, and it's my pleasure to welcome you all. We are joined today by senior members of the management team, including Mr. Sanjay Agarwal, Chairman and MD; Mr. Apoorv Agarwal, Joint Managing Director; Mr. Hira Kumar, Company Secretary; and Ms. Shallu Arora, CFO. So let me now hand it over to CFO, Ms. Shallu Arora, to take you through the financial highlights. Over to you, ma'am.

Thank you, Drishti. Hi, good evening, everyone, and thanks for joining for our quarterly results discussion. I'm pleased to share with you the financial performance of Sirca Paints India Limited for the fourth quarter of FY '25, '26 on a stand-alone basis. Revenue from operations increased to INR 134.29 crores in Q4 FY '26 from INR 100.92 crores in the same quarter last year. This represents a robust growth of 33.07% Y-o-Y. This strong performance was primarily driven by the differentiated portfolio, premium positioning and deeper market penetration. Moving on to our profitability metrics for the quarter. EBITDA for Q4 FY '26 increase to INR 25.74 crores from INR 18.97 crores in the same quarter last year, reflecting a healthy growth of 35.6% year-on-year.Our EBITDA margin for the quarter stood at 19.17% compared to 18.8% in Q4 FY '25. Looking at the bottom line, profit after tax increased to INR 17.71 crores this quarter from INR 14.16 crores in Q4 FY '25. This represents a 25.07% year-on-year growth impact. Coming to the FY '26 year performance, revenue from operations increased to INR 492.48 crores in FY '26 from INR 373.68 crores in the previous financial year. This represents a robust growth of 31.79%. EBITDA for FY '26 increased to INR 98.88 crores from INR 67.44 crores in the previous financial year, reflecting the healthy growth of 46.6% year-on-year. Our EBITDA margin for the year stood at 20.08% compared to 18.05% in FY '25. Looking at the bottom line, profit after tax increased to INR 65.05 crores this year from INR 49.10 crores in FY '25. This represents a 32.48% year-on-year growth in PAT. Let me now hand it over to our Joint Managing Director, Mr. Apoorv Agarwal, for ongoing strategic initiative and progresses during the quarter.

Thank you, Shallu, and good evening, everyone. Thank you for joining us. Financial year 2026 has been a transformational year for Sirca. Despite a subdued industry environment, we outperformed the broader paint market, a result of our differential portfolio, premium positioning and deeper market penetration. Quarter 4 delivered resilient growth supported by acrylic waterborne and advanced coating systems wider distribution and stronger architect and institutional engagement. Our acrylic coating system saw strong traction. It is the fastest-growing premium wood coating category preferred for superior aesthetics, non-yellowing durability and low VOC formulations. We expanded our luxury and super premium portfolio across Sirca, Oikos, Unico and Wembley Valentino, enabling participation from mass market to luxury decorative finishes. The new Wembley manufacturing facility is now fully operational, consolidating multiple production lines into one integrated setup, improving efficiency, quality consistency and cost economics. The Wembley acquisition further strengthens our position in mass and mid-premium wood coatings with strong cross-distributional synergies between Circa's premium network and Wembley's North India footprint. Formula transfers for acrylic and polyester system are complete. Commercial trials are underway with production expected to commence in the quarter 1 of FY '27. The UV technology transfer is also on track for quarter 1 of this financial year, deepening localization and supporting long-term margins. On brand building side, we deepened our engagement through partnerships with Architectural Digest and Elle Decor magazines and exclusive architect programs at premium destination. Distribution continued to expand across Tier 2 and Tier 3 cities with the upgraded Sirca Parivaar Pro platform driving stronger channel royalty. Our key priorities for FY '27 is scaling Wembley across India using Circa's nationwide distribution, completing manufacturing localization to build efficiency and margin, continuing to expand the premium and luxury portfolio, deepening Tier 2 and Tier 3 distribution through new depots, dealer appointments and Sirca Studios, growing our OEM and institutional business as organized furniture industry scales rapidly and initiating exports under the brand Wembley Valentino, beginning the polyurethane coatings in the coming quarters. Our vision is clear: to build India's most aspirational coating platform anchored in stronger manufacturing, a multi-brand portfolio spanning mass to luxury products, expanding pan-India distribution and deep engagement with interior designer, architects, OEM and institutions. Sirca is well positioned for sustainable and profitable growth in the near future. And now I would like to hand over the call to the moderator for question-and-answer session. Thank you, everyone.

[Operator Instructions] The question is from Mr.Fenil.

Congratulation for a good set of number So, Apoorvji, I just want to know if you can share the segment-wise revenue mix like this Sirca imported from Italy, Sirca made in India, -- Welcome and Wemblino and then, Unico, Oikos and Wall paints -- if you can share some more details on segment-wise, then that would be helpful.

Yes. So despite being the tough year, Sirca has registered organic as well as inorganic growth. So the revenues combined from -- Welcome and Wembley were approximately INR 120.5 crores, out of which almost INR 46.5 crores was coming from Welcome and INR 74 crores was coming from Wembley. And out of INR 372 crores coming from our core business of Sirca wood coatings, approximately INR 124 crores was coming from the products which were imported from Italy and approximately INR 252-odd crores was coming from the products manufactured in India.

Okay. So this is the year-wise number you're saying, right?

On a yearly basis, I'm telling. INR 492 crores, if I combine into 2 categories, core Sirca was approximately INR 372 crores and Wembley and Welcome was approximately INR 120.8 crores.

Okay. I just want to know what's your view on the margins considering the current geopolitical environment like the Middle East crisis, conflict and all. So what is the management view on the margins for the coming quarter or FY '27.

See, so we are experiencing a short-term margin pressure because the raw material situation, as you rightly said, because of the global situation and crude oil because most of the products that we use are crude linked are on higher side and highly volatile. So the graph is like this. And -- but the good thing is that we have taken a couple of price increases following the industry. And these couple of price increases were taken in 2 phases. And post implementation of these couple of price increase, we will be in a position to maintain the gross margins that company was maintaining throughout the year. So there might be a period of 10, 15 days where the company has experienced pressure on the margin side, which is a period where we were not able to pass on the increase considering the situation to be highly volatile. But as I said that the industry and all the players in the industry have taken the price increase, so as Sirca paint. So the increase that we are incurring in the cost of production due to various reasons, which are the logistics, the packaging, the raw material has -- we are able to pass it on to the market in some or other way. So we don't see any long-term contractions on the margin side. Besides this, to go aggressive, as I told you that company is going to now manufacture the balance products that we were importing last year. So we will have some margin benefits from that side by producing those products in India, which will try to help us to go aggressive as well as maintain the margins in the category that we have been producing for the last couple of years.

Okay. And last question on this export market, what we have highlighted in the presentation, the Sri Lanka, Nepal and Bangladesh. So we already started this export or we are planning to start?

So in the last year as well and for the future also, Nepal is one country where company has already been exporting. And this year, we have targets of increasing sale in Nepal. Sri Lanka, we are -- last year, we only sold a couple of consignment to a single customer, but -- now we are trying to find full-time distributors in Sri Lanka. But for the rest of the countries, including Middle East and certain other parts of the world, company is starting to export in brand Valentino under the brand Wembley. This is going to start in this year for which company has identified the distributors, the parties where we want to sell. Unfortunately, because of the current situation, the shipment cost and finding the vessel for the volatile, highly flammable material is a little difficult. But yes, we are expecting as the situation normalize, our exports to Middle East, including Dubai should start in this year.

Next question is from Mr. Hemant Soni.

I just wanted to ask you one thing. Sir, what will be the revenue growth guidance for the next year? And any color on the margins for the next year?

Yes. So considering the current situation and considering company's expansion into product lines and also deeper penetration into newer cities, including South and West, we are looking at a growth of almost 25% to 30% based on CAGR growth.

And any color on the margins, sir?

The margins should -- the EBITDA margin should remain in the category of, say, 19% to 21%. So as previously mentioned, the volatility in the raw material prices has given us some temporary margin pressure. But with the couple of price increase, that will come back to track. So the EBITDA margin should stay in the range of 19% to 21%.

Sir, EBITDA margins in the range of 19% to 21% and revenue growth in the range of 25% to 30%, right? Yes. So sir, the INR 1,000 crores of revenue that vision we had, that seems achievable by FY '29, right?

Yes, 3 years from now.

3 years from now.

Next question is from Mr. Kunal Tokas.

Hello. Am I clear?

Yes, Kunalji, I can hear you.

My first question is you talked about starting to export Wembley Valentiono. And I also recall you had mentioned sometime last year that we might do contract manufacturing for Sirca Italy for regions like Russia, Middle East but that stalled for some reason. So is there any progress on that?

So the final discussion that we have with Sirca Italy, which happened in December 2025, where we also signed and completed the transfer of agreements of the balance acrylic products to be produced in India. During that time, internally with the discussion of the management of Sirca Italy was decided that it will be beneficial for Sirca S.p.A, Sirca India to start exports in the Middle East against the prevalent economical brands coming from Middle East and Turkey. And that is why we decided to target these markets with a newer Wembley Valentino brand with economical range of polyurethane products. So these are going to target the customers where because of the prices, the polyurethane ranges are not able to be sold. So this will be -- this sale will be done under the Wembley Valentino brand now.

Okay. Understood. But there is still possibilities of going in with the Sirca brand as well sometime later.

Yes. So Sirca Spa is already exporting to certain nations. So if we talk about Sri Lanka, Nepal, Bangladesh, we are going to continue in the brand Sirca. But other than that, where Sirca S.p.A is selling some higher quality of products like acrylic, waterborne, which still are viable to sell from Italy to the other part of nations. We don't want to create the confusion in the market, certain products coming from different origin and certain from different origins. So in order to cater that, we will be doing it in Wembley Valentino brand, which will gain the acceptance because in any case, the brand -- newer brands from Turkey and Middle East are gaining traction. So yes.

Okay. And second, what is the current utilization of our capacities at different places?

So for our core facility, which is the Sirca facility where we initially had 16,000 tonnes in the beginning of the year. But this year, we have increased the capacity by 1,750 tonnes per annum. So the total capacity today almost stands at 17,750 out of which we have -- this year, we have utilized almost 12,000 plus 12,000 tonnes. So we are expecting that by the end of this year, the capacities will be utilized fully in single shift of the Unit 1, which is the Sirca -- core Sirca unit. And besides that, the -- if we talk about the capacities of the Wembley, Welcome, Valentino and the newer products, we have installed a newer capacity where we have combined the 4 units of old Wembley distributor into where we have installed almost 3x the capacity that Wembley had earlier. So here, we have sorted to reach a turnover of about INR 250 crores to INR 300 crores with the right product mix of nitrocellulose and polyurethane. So in the journey of INR 1,000 crores, we are more or less sorted with the Sirca and the Wembley capacities.

Question is about competition. Are you seeing increasing competition from the larger players like Birla or Asian Paints -- or are they not making the move on this premium segment right now?

Yes. So as we always speak about, Sirca has been positioned in India as a premium category wood coating player. So when it comes to the premium product category, which is the polyurethane and the acrylic and the waterborne coatings, we still prefer to move to designer specification, and that is why company's major marketing budget goes to the interior design architect fraternity, where we are becoming their preferred partner when it comes to the recommendation of the wood coatings. So in the premium category, I would say that we still have lesser challenge in terms of competition with the bigger players. For the mass category, yes, but we are trying to manage it with the better margin offering to the retailer and also one retailer in one market, which will give him exclusivity and motivation and incentives to promote Sirca products.

Next question is from Ms. Resha Mehta.

I hope I'm audible.

Yes, Resha, you are audible.

So I am fairly new to the company. So just to understand the brand architecture, the Sirca brand is premium and Wembley and Welcome, which I believe are the 2 acquired brands that operate in the mass segment. Is this understanding right?

Absolutely right Resha.

And so I think before we used to import a lot of Sirca products from Italy, which has reduced over a period of time. So can you just talk about this journey? And are we like indigenizing production here in India? And what that does to our margins and also the raw material volatility part because of reducing the imports from Italy?

Yes. So Resha, yes, as you rightly said, we started as a pure trading company until FY '24, 100% of our revenues coming from import and trading, no manufacturing since in FY '25, we started manufacturing and started with almost 11 products, which contributed to about 50% of the revenues, which was the polyurethane technology. And in December 2025, we signed the agreement and started the know-how transfer of the balance acrylic and other products. And today, we can say that 95% of the products that we used to import from Italy will now be produced in India. So we have moved from a trading to a manufacturing company. And this has been done with -- again, with India becoming a manufacturing hub and most of the raw materials, most of the global companies have now strong presence in India. So the cost of the production and the raw material availability was much better. So it was more viable to produce in India, which has increased our gross margins a lot. But following this, the competition has also followed the same activity and most of our immediate competitors are also producing in India in lieu to which we have transferred in the last couple of years the price benefit also to the market. So for example, if we save, say, 20% on my cost, we have transferred almost 12% to 15% to the market, making product more affordable, and that is why our quantity-wise growth in polyurethane has been much more than the value-wise because we have done revision of price and reduced the selling price by 12%, 15% after becoming cheaper. And then 4% to 5%, we have increased our marketing cost. That is why you don't see a jump in the EBITDA. But yes, our gross margins have increased, which are been passed on in the market by increasing the schemes and also increasing our marketing budgets towards design fraternity.

Understood. And I think -- Wembley brand when we had acquired was doing around INR 72 crores of revenues, if I'm not wrong. And this year, I think at the very start, you called out that it's done around INR 74 crores revenues in FY '26. So does that imply that there has been no growth in the Wembley brand in the last 1 year? And if yes, then why? And what are we doing to try and fix the growth part?

Yes. So Resha, there are a couple of reasons where we don't see a lot of growth in the Wembley brand since it was the first year, the first year, the transformation and the teething problem took was a little more than what we expected. So when we acquired the brand, so the old distributors did extended and some more quantity sales before the acquisition was completed. So their INR 72-odd crores sale last year, they had almost INR 5 crores, INR 6 crores sales that they did additional before the transition. So one, one strong billing to all their distributors. So practically, most of the April sale was done in March. Also in the month of March, we faced a major shortage of a main product raw material, which goes into NC called cotton-- Nitrex. Which was -- which actually made us lose revenue of about INR 4 crores to INR 5-odd crores in the month of March. So we almost lost orders of INR 4 crores to INR 5 crores in March from Wembley-- it had been done, we could have reached revenue of INR 80 crores. And considering apple-to-apple, we were expecting a 20% growth. But considering these 2 factors, we were more or less flat. But as we go into the next financial year where the transformation and where the acquisition has completed the 1-year deadline and the terms and agreement with the old owners of the company has completed, we expect that this revenue will show real growth.

Okay. And can you just call out your RM basket, your top 4, 5 RMs and what is their percentage allocation, as a company resin?

Yes. Our RM majorly comprises of 3 parts, which is the resins, which are alkyd and polyester-based resins. Then is the solvents, which are the parts of crude. So solvents include solvents like toluene, like butyl acetate, like PMA. And then the third part, which is the smallest part is the additives, which comes from global suppliers like BYK, Dow, Bayer. So these 3 are the main category of the RM, which we use, out of which 95% is solvent plus the resin and 5% is the additives.

Okay. And resins and solvents, both are essentially imported, right? Or do we buy it from local dealers?

No, both are essentially important and mostly we buy from the dealers and from the reputed companies, the resins that come are from global suppliers and are made on our recipe, which is the key product going into our formulation and some key resins we manufacture in-house as well.

Right. And so since we -- what would be our export revenue sales? Would it be very small negligible or?

Negligible. If we talk about absolute numbers, last year was about INR 9 crores, majorly from Nepal and 1, 2 customers from Sri Lanka. This year, under the brand Wembley Valentino, we expect to grow our exports from the first quarter itself.

And -- so you did say that you have faced some challenges in your raw material for -- especially for Wembley, right? So are we seeing that raw material shortage or because of supply chain disruption right now? And because of that, do you foresee that it could hamper the revenue growth?

See, mostly, if we talk about Sirca and solvent side, we are not facing any significant delays or shortages of the raw material. The only problem is the high volatility in the prices. But when it comes to the nitrocellulose coatings, which uses a very important raw material called cotton, which is NC cotton, which comes from a global supplier called Nitrex. There, we are still facing pressures from the supplier because it is a product which also go in defense and the defense demand has been increased and some part of Nitrex has been diverted to defense and there are some problems also with the maintenance of certain cotton suppliers. So this is expected to be streamlined by beginning June when the other unit -- new unit of Nitrex gets operational. So currently, only with this raw material, we are facing shortages, which -- where we are not able to supply the nitrocellulose products completely. But we are expecting that within June, it will streamline and we will be back on track.

So basically, only the Wembley brand gets impacted, right, because of the nitrocellulose...

Yes, because NC is under Wembley only. If we talk about the polyurethane, acrylic and other ranges of coatings, the raw material price volatility is there, but there is no major shortage or disruption in the raw material.

And with the agreement that we recently -- or the discussions that we had recently with our Italian partner. So with that, does that open up any fresh opportunities, be it for contract manufacturing or for exports or maybe for something else?

Yes. So as per our latest agreements, we have signed to produce the balance products, which were earlier imported considering the need of the market. And with this, we have already discussed the export opportunities. And after the mutual discussion with Sirca Italy and their management, Mr. Luigi Durante, we decided to start the export in full swing under the brand Wembley Valentino and see the results and see the market and then maybe think about contract manufacturing at the later stage because currently with the key product category, Sirca S.p.A is still comfortable and competitive to export to other nations. So maybe in the coming quarters or later in the year, we will be discussing that opportunity. But for now, what we are going to focus is on the exports to the other nations under the brand Valentino by Wembley.

Understood. And the -- if you can talk about the distribution expansion, which you said is going to be one of the drivers of growth, right? So currently, we would be strong in North, I presume. So how much percentage of our revenues comes from, say, North, West, East, South?

Currently, majority of our revenues, even after acquisition of Wembley and Welcome, which were also Northcentric, comes from the northern part of India, where we include states like Delhi, NCR, Punjab, Haryana, UP, UK, Rajasthan and MP. So 80% of the revenues are coming from these territories and 20% is coming from the West and the South, where we have now started to expand. And out of 20 depots that we have pan-India, 5 depots recently have been opened in last year, which are in Bangalore or majorly in the South and the West, from Pune to Surat to Ahmedabad to Mumbai, a new branch coming in the center of Mumbai. So the core focus of the company remains to grow the revenues in the West and the South this year.

So with this growth focus in West and South and considering there is, of course, competition as well, do you see that as we expand, we try to expand more to markets outside of the north, we may have to give extended credit periods or trade discounts or so on and so forth to our channel partners, which may in turn affect our margins or stretch our working capital?

See, no. What I think is that Sirca is a brand which is not new to West or South market. It's a brand which is very much accepted by the designer and the architect. But unfortunately, we are a little late to enter strongly and fully into the South and the West. Company is recognized as one of the preferred partners for furniture manufacturers in those regions. So people like Godrej, people like Narsi, people like Spacewood, which are in Nagpur, Nashik and Pune are using our products since many years. So we -- Sirca is a preferred or it is an established name in the market where even the retail market knows that it is a brand which is very, very popular in the North. But now with the right team, which was set in last year, the revenue momentum has already begun. And it follows the similar payment lines, which are in line with the competition or which are in line with what we are following in the North. So we don't see any extended credit terms, but also, in fact, better credit terms because if we speak -- when we go from North to South and West, the credit terms in the retail in South and West are a little better than what it is in North.

Right. And one last question, if I may. right? So what are the price hikes that you have taken? You did call out you've taken 2 price hikes, but just if you could quantify that?

Yes. So at the Sirca level, we have taken a price increase of 5%, which was implemented from first week of April and another price increase of again 5%, which has been implemented from today. So 2 price increases combining to almost 10% on the whole range of Sirca products. And on the Wembley and the Welcome side, the price increase has been approximately INR 35 per liter.

And this is enough to offset the RM price inflation so far?

So far, yes.

Next question is from Mr. Mahesh Attal.

Congratulations on good set of numbers, Apoorva. Am I audible?

Yes. Thank you, Mahesh.

Yes. So I'm fairly new, and I was just looking at your results. And see, the kind of growth that you have done in FY '26, what optimism you take along with you with the last financial year that gives you a strength or maybe kind of say, optimism at company level that you'll be able to give same kind of results in the next -- maybe we can talk about the next financial year or maybe in a couple of years down the line that you can just give some guidance on that.

Yes, Mahesh. So there are 3 major points that actually fuel us and that actually make us very confident and optimistic about registering the growth that we have been doing for last many years. And the first thing is that the demand for the polyurethane and the product shift from certain product category to polyurethane technology is happening very fast in the market, which will-- Sirca being as an established player in the polyurethane category will give us a lot more opportunity. And we can say in simple words that the market size of polyurethane is going to rise in the coming year, which make us very confident that we will be able to grow in our polyurethane category. The second good reason is that Indian furniture industry in India is almost ready to scale to next level after the BIS implementation, which happened a couple of months ago. We are expecting the local production of furniture in India to grow very aggressively for next 3 to 5 years. So this year, we are seeing an upside in the manufacturing of local furniture and less of import, which will allow us to sell more coatings to the furniture manufacturer, which is the core business of Sirca. The third, again, very important, as also mentioned earlier, that Sirca is expanding into new territories with a core focus in West and South and experienced team coming in and joining us for last 6 months are already -- have already started to show results. So the real number expansion will be shown in this year. And with the Wembley, Welcome integration into Sirca, we are seeing to use the positive sides and energies of both the brands to increase the sale of both the brands. So all 3 points that the addressable market for Sirca India is increasing. The furniture industry is set to rise because of the various reasons that I mentioned. And third, the distribution network and Wembley, Welcome integration will give us more power to increase the sales, fuel our strategy and thought of registering the growth that we did this year.

So we will be maintaining the same growth numbers that you have delivered in this financial year? Are you confident on that?

Yes. So we are quite confident, and that is why in the beginning, I mentioned that we expect a minimum considering the market situation and being a little on the restricted side, we still see that 25% to 30% CAGR growth is what we expect as minimum.

Okay. So I just want to understand the -- let's -- I just want to go to the basics. I mean, to understand your business. So let's say, I'm getting furniture done at my office or maybe at my residential space. So why would I require only Sirca? I mean why would the person who is actually helping me do it, maybe the interior guy or maybe who's the one who recommends your product? Like basically, what is the selling point? I mean -- why would someone come to buy Sirca as a brand? And where exactly this polyurethane thing you say, right? What was prior to polyurethane is what I want to understand.

Okay. So I will answer your second question first. Before polyurethane, people were mainly using melamine. Melamine is a 2-component product, but only with 10% hardener and very easy to apply. So for the contractor, it was very easy. But if you talk about the VOC content and if you talk about the final finish, it is nowhere near to polyurethane, which is still a very less VOC and high on quality product. So coming back to your second question, in our trade, there are mainly 3 influencers when we talk about retail business. One is architects and designers, which we called as a doctor of our trade. Second is the contractor and the painter, which actually goes to the dealer and buy our products. Third is the dealer, which is the point of sale, which are the multi-brand shop, which is selling Asian Paints,Berger and Nerolac and also keeping Sirca as a product. So these are the 3 main influencers. And Sirca has been originated and Sirca has been positioned as a premium wood coating player in the market, and that is because of the design fraternity. Sirca has given India best of the products at the time where no competition existed, and that is why we have maintained a pure Made in Italy identity, and that is why we are the preferred choice of designer. So we have the category of the products which have been specified by the designer like a doctor. And the specification goes into their drawings and goes into their project. And when a contractor is hired at the site who has to polish the furniture, which is made on site, that contractor then goes to the market, to the retailer to buy the product. So this is the whole cycle. And that is why our influencer program with designers is very strong. And today, we are proud that we are one of the top partners when it comes to wood coatings with architects because we have developed that relation with the design fraternity in last 20 years by recommending our product, and that is why we say that 100% of our sales, which we do is secondary. Then we also run a very strong influencer program with contractors on Sirca Parivaar app and dealer act as our logistic partner who keeps our product and sell it to the as per demand.

CapEx number for FY '27? CapEx, CapEx. Any CapEx outline for FY?

For FY '27, we are not actually expecting very big CapEx. We are only expecting a INR 5 crore to INR 6-odd crore CapEx, which we will do to enhance our production of the acrylic products, which we have just completed the know-how. Most of the CapEx has been completed this year, which was mainly towards the Wembley, Welcome side to consolidate 3, 4 different facilities into one for cost economies and also to increase the capacity for next 3 years.

What would be -- what is the royalty number that the parent company gets from the same?

The parent company gets 0.75% of our total reported revenue.

That is excluding the Wembley brand, right? Wembley brand is something that we have acquired on our own.

On our own, but we are giving it on a total thing because in December 2025, we signed an agreement to also export the polyurethene products in Wembley Valentino brand and also launch in Indian market, which are made from -- and which are being done with the help of Sirca Italy. So to avoid any confusion and everything, we bring out -- we calculated that number of 0.75%, but on the total reported revenue.

Okay, and what's the -- what's something so specialized about Wembley that gives you confidence that this will be accepted very well in Indian markets and the global markets? Or what is the kind of size that you are looking at in the first year of operations? Any numbers that you have worked on?

Wembley actually is a household brand when it comes to the products like sanding sealer and lacquer, which are Nitrex technologies, nitro-based technologies. And it is a brand which is -- which was present in India since 1962. So it is a kind of a legacy and they have been positioned very, very well in their product category. They sell the volumes which we did -- which we do in polyurethane because the average realization of the product is very less. But in terms of the quantity, they are more or less similar size of what we sell in Sirca because the average realization is less. 70% of the revenue of Wembley comes from 2 products, which are their hero products and which they are selling for many years, which are called a sanding sealer, lacquer. So brand is very well positioned in terms of name. They have not scaled revenues because of their own personal reasons where the old promoters had own interest to invest. But that is where we saw a strategic upside. And with the increasing demand and addressable size of polyurethane, we are all set to launch PU in Wembley Valentino brand. So we are seeing that altogether, we see from the base that we have done this year, almost a 40% increase in the revenues coming from Wembley and Valentino this year.

And the margins on that would be higher than our existing business margin or it would be on the same lines?

No, no. The margins on these products are less than the Sirca luxury product range.

How less? I mean, can you just quantify the margins that this business will have?

This business has all-- 10%, 12% less gross margins compared to -- 15% less margins than compared to -- gross margins compared to Sirca. These are the products which goes into retail as a primary product and not as a secondary product. So selling Sirca requires a lot more manpower, a lot more schemes, a lot more effort in terms of marketing. But with the mass product like sanding sealer lacquer under the Wembley brand and PU under the Valentino, which we intend to offer to the mass market need of polyurethane will require less manpower and more primary selling. So what we believe is that even if the gross margins are less in terms of Wembley and Sirca, but final EBITDA, if I make a separate balance sheet of Wembley, Welcome and Sirca, the final EBITDA would still come down more or less at the same level.

Okay. So basically, what you're saying is that absolute numbers would be increasing and -- but the margins would be shrinking.

Yes.

Okay. So you would be actually increasing your top line a lot because of adding this thing, right?

Exactly.

Okay. So should we take the bandwidth of what we have achieved in FY '26, that could be the bandwidth that we see from here on, it will slightly decrease on that?

See, only considering the external factors, the market sentiments and even if you see last couple of years and results from the building materials space that none of the company actually has registered much very good growth in year-on-year basis. Still Sirca has outperformed because of the distribution network and everything only because the market sentiment, the demand side never was opening up. And still we are going through a rough patch or a stage where because of the current ongoing situation, the demands are not increasing to the expect that we do. If that happens in the coming quarter, of course, yes, we should be more or less in line in terms of our growth with the last -- with the FY '26.

And what is the price differential between the melamine thing and this polyurethane thing?

See, if we talk about per liter melamine today after so much increase, about INR 230, INR 240 a liter, PU comes out at an average of INR 450, INR 460. But there is a kick to it because the coverage of the product of polyurethane is much more than melamine. So per square feet cost, we see a 10% difference.

So basically, polyurethane would be on the higher side and then...

Polyurethane is on the higher side, yes.

But then the quality, as you said or maybe the...

[indiscernible] anyone can make from naked eye, even a layman.

Next question is from Resha Mehta.

So I would presume you would have an exclusive right to sell the Sirca brand and products in India, right?

Yes, Resha. We have an agreement -- a brand agreement with them, which is currently till 2041.

Understood. And acrylic products, are they a new product line and hence, a new revenue stream for us? And would this also be under the Sirca brand?

Yes. So acrylic is under the Sirca brand, and these are the products which still in the market is being sold as a Made in Italy product. And after the technical know-how agreement with Sirca Italy in December 2025, we are almost completing the trial phase and the Made in India product will be rolled out in the quarter 1 of current financial year. Acrylic is not a very new product. It is purely a old technology in Italy. But in India, we launched it 3 years ago where the revenue for the first year was negligible. But in last couple of years, revenue has shown a great spike after polyurethane becoming a commodity, acrylic is taking over the architect segment.

Okay. So the application would be the same for acrylic products, just like the PU?

Yes. The method of application is exactly the same like we apply, we apply acrylic. The main difference is acrylic is a higher technology product. So the VOC content is 50% less compared to polyurethane. Secondly, it is a product which actually enhances the aesthetic value of the veneer or the woods that you apply acrylic on. So it has non-yellowing properties. It is a property which gives you even a smoother finish. So it is something which is more premium than polyurethane.

Understood. All right. And your INR 1,000 crore revenue vision basically also captures the opportunity that arises from acrylic products, right?

Exactly, yes, ma'am.

Next question is from Mr. Tanmay Mehta.

Hello.

Yes, Tanmay, yes you are audible?

Yes, like I want to ask what is the timeline for exports to become a meaningful contributor, like, say, for 5% or more to overall revenue.

See, we are expecting the exports to -- under Wembley and Valentino to start within the first quarter. We already have certain orders. But because of the current ongoing situation, we are still facing some logistic issues. So as we go forward this year, I think we will -- the export will become a part of contributor in the revenue. It's not 5%, we are expecting should be near 3%, 4%.

Okay. And one more question I would like to ask like which geographies beyond North India are you prioritizing for Wembley distribution?

So, Wembley pan-India -- pan-India, we are now going to expand Wembley and along with Wembley, the Valentino and Welcome brand into East by hiring a distributor in Kolkata, into West and South by hiring distributors in all the major cities of South and West.

We will be taking next question from Mr. Arnav Khan.

I have just one question on the working capital of the company. If I compare our working capital with our peers like Asian Paints, it's almost twice as high. Can you give some explanation why is this the case?

Yes. So Arnav, in last couple of years, because of our inorganic growth coming from the acquisition of the -- Welcome and Wembley brand has actually increased a little on the working capital side because of the transition phase because during the transition, we have to acquire all the closing stocks and also ensure the newer production and maintain better inventories in terms to ensure that the transition is smooth. Besides that, again, the receivables from Wembley, Welcome has been a little on the slower side because of the initial transition phase and the payments of the old owners has to come first before our payments coming in. And by the end of this year, it has completed. So in the coming quarter, we are expecting both the inventory and also the debtors to come down and which has been up from last 2 years, majorly following this acquisition and also because of the global disturbance, which pushed us to immediately sign agreement of producing acrylic also in India. So acrylic sales were growing and almost contributed to almost INR 120-odd crores this year. And there the inventories of these products had to be kept for 6 months because of the logistic issues, the production time in Italy was increased. The logistics time was increased. So we were keeping inventories of these products of almost 6 months so that we don't run out of the stock. But now by producing it in India and consuming the old inventories by maximum June end, we will have a lot of relief from the import inventories, which we were holding for a period of 6 months, and we are expecting almost INR 15 crores, INR 20 crores inventory going down from here. And also from debtor side, we are expecting huge numbers to go down as the transition stage from Wembley, Welcome has completed now and the newer payment, all the payments to Sirca will start coming from now. So this will help us to improve the working capital in the coming days.

Okay, we will be taking last question from Mr. Mahesh Attal. Hello Mahesh sir, are you there? Okay, as there are no further questions, I would like the management to give the closing remarks.

All right. Thank you, team Finportal, and thank you, everyone, for joining. At Sirca, as I mentioned earlier, our vision remains very clear to build India's most aspirational and technologically advanced coating platform across premium luxury and mass market categories. With stronger manufacturing capabilities, a diverse brand portfolio, expanding distribution reach and deep engagement with the designers and architects, we believe the company is well positioned for the next phase of sustainable and profit growth. Thank you.

Thank you. On behalf of Finportal, I would like to express our gratitude to the management team of Sirca Paints India Limited for taking the time to join us and provide such detailed responses to the questions. We also appreciate all the participants for their engagement. If any questions remain unanswered, please feel free to reach out to us at the e-mail ID given in the chat box. You may disconnect now.