The Supreme Industries Limited (SUPREMEIND) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q1 FY '24 Earnings Conference Call of Supreme Industries hosted by DAM Capital Advisors Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Aasim Bharde from DAM Capital Advisors. Thank you, and over to you, Mr. Bharde.

Yes. Thank you, Michelle. Good evening, everyone. On behalf of DAM Capital Advisors, I would like to welcome everyone to Supreme Industries Q1 results call. From the management side, we have Mr. M.P. Taparia, Managing Director; Mr. P.C. Somani, CFO; and Mr. R.J. Saboo, VP Corporate Affairs and Company Secretary. We'll give the call now to Mr. Taparia for his opening comments.

Thank you very much, Mr. Bharde. I'm M.P. Taparia, Managing Director of the Supreme Industries Limited. I along with my colleagues, Shri P.C. Somani, CFO; and Shri R.J. Saboo, Vice President Corporate Affairs and Company Secretary, welcome all the participants who are participating in the discussion of the unaudited stand-alone and consolidated finance results for the quarter ended 30th June 2023. The stand-alone results and the consolidated results are already with you. I'll briefly give you company's product operating performance and the highlights. The company sold 148,544 tonnes of plastic goods and achieved net product turnover of INR 2,340 crores during the first quarter of the current year against sale of 108,922 tonnes and net product turnover of INR 2,159 crore in the corresponding quarter of previous year, achieving volume and product value growth of about 36% and 8% respectively. Total consolidated income and operating profit for the first quarter of the current year amounted to INR 2,383 crore and INR 343 crores as compared to INR 2,211 crores and INR 327 crores for the corresponding quarter of previous year recording increase of 8% and 5%, respectively. The consolidated profit before tax and profit after tax for the first quarter of the current year amounted to INR 283 crores and INR 216 crores as compared to INR 268 crores and INR 214 crores for the corresponding quarter of the previous year, recording increase of 6% and 1%, respectively. The business scenario of all the product segment of the company for the quarter ended 30 June, 2023 as compared to the corresponding quarter of previous year as under. Plastic piping system business grew 48% by volume and 11% in value term. Packaging Product segment business grew by 5% in volume and degrew by 1% in value term. Industrial Products segment business grew by 5% in -- by 4% in volume and degrew by 1% in value terms. Consumer product segment business grew 15% by volume and 10% in value term. The overall turnover of value-added product remains at INR 756 crores during the current quarter as compared to INR 761 crores in the corresponding period of previous year. The company has total cash surplus of INR 951 crores as on 30th June, 2023 as against cash surplus of INR 738 crores as on 31st March, 2023. Business outlook. Polymer prices witnessed a downward bias and continue to fall, albeit in range bound manner. During the quarter, prices of various fell between INR 5 to INR 8 per kilo except for polypropylene, which fell down by INR 13 per kilo, causing moderate inventory losses across the product segment of the company. The company has taken in hand a project to make PVC window profile and doors at its newly acquired 32-acre site and 15 kilometer away from Kanpur. The initial capacity planned will be 10,000 tonnes per annum, the company intends to sell window profile and complete window from this site. Later on, the company will put a window making facility at several of its manufacturing sites. The envisaged investment in this project will be around INR 160 crores. And after attaining full capacity, the company may add additional turnover of about INR 350 crores annually in this segment. The company is ready to seize the business opportunity and continue to commit required investment. During the year, the company had planned to add 4 additional systems that is PP Multilayer silent pipe system, Gas pipe system, PE/aluminum PE piping system and PPR piping system for industrial application along with its 36 existing systems, and its flagship Plastics Piping business. Project execution has commenced for setting up a dedicated greenfield unit in Malanpur near MP, near Gwalior to manufacture variety of industrial and ball valves. The company continue to commit new investment to increase range of value-added product in its piping business. Expansion of capacities and enlarging the product basket is underway, which will increase installed capacity of this division to 750,000 tonnes per annum by end of fiscal year 2024 against present capacity of 600,000 tonne per annum. The company continued to focus more on Made-up product sales from Cross Laminated film, which would help in better realization and improved profitability. The company plan to introduce newly developed Cross Plastic film is progressing well and plant with a capacity of 2,500 tonnes per annum should be in operation by end of fiscal year 2024. The company's furniture business is expected to grow well during the year, backed by softening of polypropylene prices and introduction of several premium products in the range. The company has 244 numbers of showrooms 30th June, 2023 and are being added regularly where quality furniture produced by the company is available. In Industrial Components division, passenger vehicle segment in auto sector is continuing its bullish trend and expected to remain positive during the year. Impending festival season and overall positivity in the economy should help the appliance segment of the division gather steam going forward, which will improve the weakness of industrial component division. The material handling division, product portfolio is doing reasonably well keeping in pace with the major drivers of material handling product like Automobile, FMCG, Whitegoods and retail. To meet the diverse needs of the customer, newer products are being introduced. Supplies of tailormade solution with customized crates are growing and most models of garbage bins range, which started recently, have been selling quite well. Composite LPG division continues to supply new age composite LPG segment to Indian Oil Corporation against its LOI as per schedule issued from them. We're also pursuing with other oil marketing companies for promoting composite cylinders in domestic market showcasing the safety to human life what the cylinder provides. Efforts continue to expand geographical reach and add new customers, which is a long run process due to nature of the product. In Protective. Packaging division, a strategy to drive growth, both in volume and value, which enhance profitability across product lines, yielding positive results. Division continues to focus on development and new application value engineering to provide best product with customized solutions and increase its export business by strengthening distribution needs in newer markets. The Performance Packaging dividend of the company is functioning optimally with its existing capacity. The division serves different market segment in food and various nonfood industry and working towards post extrusion value-added product for better margins. The division is focused to boost the sale of exported product to the whole world market. The company has a CapEx plan in excess of INR 750 crores for the current year, including carry forward commitment of previous year. Entire CapEx shall be funded from internal accrual. This is a brief in the overall synergy for the quarter and year ended under reference. Thank you for your presence. Now I and my colleague, Shri P.C. Somani; and Shri R.J. Saboo are available to reply to various queries raised by all of you. Thank you very much.

[Operator Instructions] The first question is from the line of Venkatesh Balasubramaniam from Axis Capital.

Yes. My first question is, is it possible to quantify what was the inventory loss, which was there in the current quarter?

Around INR 40 crore.

Hello?

Around INR 40 crores.

INR 40 crores. Okay. Okay. Now the other thing is, this quarter, your volume growth was very strong. It was almost like what 36% and out of that, there was like a 48% growth on the pipe side. Was this something you expected? Or if it was ahead of expectation, what exactly is driving this growth?

We expected just like the volume was available in the company. Without -- the volume must be available also in the company. You see on the best last year, first quarter was very weak. If you recall.

Yes, yes.

Last quarter being very weak, we were expecting good growth to come in for agriculture market. In fact we were preparing ourselves that there is going to be a good growth demand the way government is giving push to infrastructure. And we are glad to see that government is taking many initiatives to boost the infrastructure so our big growth in the Piping division came from agriculture and infrastructure in the first quarter and first we are expected so we were prepared with raw material and with the capacity.

Okay. Okay. Now my last question is, what is your guidance for volume growth, revenues and EBITDA margin for the current year post the first quarter?

Overall company or what?

Overall company. Overall company.

Overall company, we anticipated volume growth of 20% plus, operating profit margin, 14% plus.

Okay. And what about revenues? Do you have a revenue number in mind.

Around INR 11,000 crores.

Around INR 11,000 crores. Okay. Okay. Okay. But sir, if you actually extrapolate this 20% kind of growth so if you take 20% growth on last year and you take the first quarter realization, you don't get to INR 11,000 crores. You get to a much lower number. So are you expecting -- does this also factor in the fact that over the next 9 months, PVC prices and plastic prices overall will go up. Is that something which are factored into your numbers?

Now prices started firming up already.

Okay. So there is an element of higher prices in the next 9 months, which has been factored in actually because...

The increase in value-added product business also.

Okay. Okay. Now the reason given is...

There are so many factors, dear friend. Please.

We'll take the next question from the line of Rahul Agarwal from InCred Capital.

Three questions. Firstly, on margins. Pipes and Industrial segment, I think the margins reported are lower Y-o-Y. Could you elaborate, please, what is the reason? And what do you -- what is the outlook on the same, please?

In piping system, the first quarter we earned 14.27% is much better than last year, first quarter.

He is talking Y-o-Y. You're comparing with the previous quarter.

No, I'm comparing EBIT per tonne for plastic pipes. This quarter is about INR 16.6 a kg. Last year same quarter, it was about INR 19 a kg. So why is the decline, please?

Yes. The principal 2 reasons. One is agri volume. Agri and infra because the volume growth which has come in this quarter is because of agri volume and the infra volume, which are low value-added product from that perspective. Since the last set, the volume was less of those products, the overall margin per kg, what we are looking is a lot better. And secondly, this first quarter, as mentioned, about INR 40 crore of inventory loss has come which also -- comes down to INR 3 a kg in overall volume of piping...

Piping also and other segment also, which was across the board all the polymer price has fallen.

Sir, my understanding was even last year same quarter, you would have had a very large inventory loss, right?

Last year was very poor. Last year margin was 12.55%.

EBITDA margin.

EBITDA margin.

Right. So if I account for inventory loss even last year, then why should the EBIT fall so much? That's purely because of mix.

We showed more agri and more infrastructure pipe in the first quarter this year.

Got it, sir. Sir, just to understand this more better, like what do we do in infrastructure pipes? Could you elaborate like what product and what are you talking about?

[indiscernible] Nal se Jal.

What is the volume contribution for Nal se Jal?

7,000 the next we showed last -- this quarter.

So first quarter of this year, we have sold 7,000 tonnes into Nal se Jal.

7,000 extra compared to the quarter last year.

Extra. What is the absolute amount sir for the quarter?

Absolute quarter 12,000 tonnes.

12,000 tonnes. Okay. Got it. So moving forward, what is the volume growth expected for industry and packaging segments for fiscal '24?

The industrial piping segments is about 10% to 12%.

Sir, just trying to verify. I mean, on the TV interview, the overall company volume growth is guided towards 20% plus. Piping is about 23%, 24% plus for fiscal '24 so if industrial packaging is at 10%, 12%, how do you get to the 20%...

Volume, we anticipate a growth of 34,000 tonnes and packaging altogether is expected to be 54,000 tonnes.

Okay. This is the total volume for the year, is it?

Total volume for the whole year.

34,000 and 64,000 respectively.

54,000 packaging, our industrial component, 34,000.

Okay. Got it, sir.

And in industrial, we count material handling also and also composite so if I combine altogether, it will be 67,000.

Okay. Got it sir. Got it. And last question from my side...

Industrial, which comprise industrial, material handling and composite all 3 together.

Understood, sir. Understood. Lastly, for the PVC windows, doors, the CapEx, you said is INR 160 crores. Is that included in INR 750 crores?

Yes. It is included.

Okay. And this will be part of Industrial segment or furniture segment?

So part of plastic piping segment, which we may change the nomenclature to building solution when we start the production. We will decide whether we want to give a separate segment or we keep as a part of building solution.

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

Sir, I'll just carry forward on the prior question, Sir, you indicated Nal se Jal volumes, sir, how much is the revenue contribution over here? And how should one understand the corresponding working capital and margins?

I don't know which question...

Nal se Jal revenue contribution.

Which one?

Nal se Jal this collision pipe what was...

I told you a number [indiscernible] share value...

Revenue contribution.

Include trade market also. There are many products also, it is not possible to give you because it is not only pipe, we are selling also electro-fusion fitting and compression molded fitting so immediately, not available.

Okay. Sir, if I asked you the question the other way around, we had this Maharashtra government order of around, I think, INR 800 crores, would we have supplied to something like INR 200 crores, INR 250 crores in this quarter? Or if I take INR 150 per kg...

[indiscernible] crores to supply in 30-month period, 30-month period, INR 480 crores not INR 800 crores.

40-month period, INR 480 crores okay. And sir, how different will the...

Maybe by now, we might have supply INR 100 crores.

Okay. Sure. And sir, how different will be the credit days and margins for this particular order is that at par with the company level? Or is it a tad lower.

30 days. That is the only place where we give credit. Other contractor, we buy -- sell either advanced payment or we get LC. We don't get them clean credit. Maharashtra government wanted -- we agreed to be kept in credit.

Okay. And sir, margins.

Margin are nominal margin. In this business, the margins are low.

Okay. Okay. Okay. And sir, 1 broader question. Are we looking at any professional appointments at CEO CXO level at the company level?

I'm professional.

Sir, you are there. Absolutely.

So what, I'm professional.

The next question is from the line of Sneha Talreja from Nuvama.

Congratulations on great set of volume. Just couple of questions from my end.

You are the first person to congratulate. Thank you very much. Tell us, please.

Please just wanted to understand you have this time spoken about PVC windows and door segments in your press release. Just wanted to understand how big is the opportunity -- and how are you looking at things here just something on this particular segment.

It's a very big opportunity. In China, the market for plastic window and door is 4.5 million tonnes. India is around 100,000 tonnes. Population, India, China, more or less same. Then the opportunity you can calculate.

Right. And are there existing players in this particular market or currently Indian market is being import driven?

Several players. Several players, several fabricators, there are so many current companies are also playing. They are principally important profiles from the respective countries and offering customized window. We had a plan to make the window profile and make window, and we will be appointing fabricator also who will give customized window. It's a long-run game, and we are going to stay in a long run basis. We consider business in great potential for which company, people have to work very hard for several years.

Understood, sir. Understood. Sir, secondly, you also mentioned on the PVC prices front that you see upward from now on prices firming up and this particular quarter, you've seen a INR 40 crore kind of an inventory loss. Are you building in this inventory loss maybe going ahead, this will get offset by some amount of gains or you see not that amount of PVC price increase. So some thoughts on PVC prices, sir.

Some gain may come. And as of today, we do not see any more inventory loss.

Understood, sir.

We'll take the next question from the line of Abhishek from DSP.

Sir, just a couple of questions. In the Industrial division, also there is margin weakness on a sequential basis. Is it due to inventory? Or is there any other factor?

Industrial dividend and margin is better compared to last year, the same quarter. We are seeing that industry component we earn more money than last year percentage-wise. So every -- we run every segment or component better margins than last year.

Sir, I was more referring to on a sequential basis, but I can take that offline otherwise.

Sequential basis, Okay. During the full year. Sequential basis component last year, first quarter, we earned [indiscernible]. This year, first quarter, we earned 10.14%. In material handling last year, first quarter, we earned 10.3%, this year around 10.79%.

You are asking fourth quarter versus first quarter, is that it?

Yes sir. Yes sir. First quarter versus first quarter.

This is not relevant to us. Quarter-to-quarter be relevant. We are not in a banking business or IT business.

Sure sir. Sure. So the other thing is you spoke about the. Okay, fair. Sir, in terms of the PVC window and you also spoke about building solutions. So are there some other products also, which in the future you could evaluate on similar lines. There are some other products as well, which 1 has not tapped into.

[indiscernible] building solutions. As we come along, we will convene to you whenever we take up new product.

Okay. Okay. And sir, how should one look at the distribution of the same? Will you have to create a new distribution channel? How should one look at that?

We'll build it and bring to notice of the all partners.

Okay. And sir, just 1 last question. In terms of the channel inventory, how is it now that PVC prices have started to move up now, how is the channel position of the -- as far as the...

Normal inventory, maybe on lower side only.

On the lower side, okay.

The next question is from the line of Achal Lohade from JM Financial.

If you could help us understand in terms of the CPVC growth, how has been for the quarter and also the plumbing segment for PVC if the growth was in the similar fashion?

CPVC our company is at 12% degrowth in first quarter. Plumbing segment overall with good growth. CPVC a little degrowth and mostly in the North and Eastern market because there were so many counterfeit producers crop in, then we filed legal cases against many of them, we succeeded, but during the period of success, we lost some business in the first quarter in North and East. Now the action had been adequately taken, and we have made our legal department more strong, but there are so many counterfeit producers come up in Eastern India and Northern India.

And is very particular to our company or it's across the brands you have noticed.

It is applicable to Aashirvad also to our knowledge and to Astral also to our knowledge.

Interesting. And you said the PVC side, the plumbing has seen a good growth.

Other side, there is no issue. CPVC because of expensive so there were so many people are -- to make counterfeit but fortunately, the legal depart -- the law and court we have full support and we could take action against them. But in the process, we just brought some loss in volume. But we are confident we'll recover.

Understood. And sir, given the correction in the PVC price on a year-on-year basis, if I see over the last 12 months, could there be a case of reduction in the CPVC prices? Have you seen your purchase price for CPVC already coming now.

CPVC prices already started going down.

Can you quantify how much has it already come down, sir?

There are now so many suppliers. Each supplier has different pricing. So I can only say the prices started going down. Every supplier drop their price. Supplier to supplier it depends.

And has that been also passed on to the channel, sir? Is there a price reduction for CPVC.

Basically, when the price drop, we will pass it all now.

Okay. So it's a similar fashion like a PVC in that sense.

It may not be similar fashion.

Understood. And sir, 1 more question, if I may, with respect to the storage tanks. Can you elaborate a bit now as to what revenue size have we achieved? And how do you see over next 3 to 5 years?

No, very strong.

Any number you could put across like...

Number is classified.

The next question is from the line of Deepak Jangid from Purnartha Investment Advisors Private Limited.

My question is that you have mentioned that with the additional capacity of PVC windows and doors, the additional turnover we are expecting is INR 350 crores. So when do you foresee this INR 350 crores to come into our books.

Too early to reply. Too early. Too early to reply. Let the production start first.

Okay. Okay. And what EBITDA we can expect from this additional capacity.

We will inform at the right time. We [indiscernible] this is the intent of the company, company taken action. We have purchased 32-acre land, and we have hired people to put the plant in operation as quickly as possible.

The next question is from the line of Bhargav Buddhadev from Kotak Mutual Fund.

Congratulations for a strong volume growth in the pipe business. So sir, my first question is we've reported almost 47% Y-o-Y volume growth in pipes. Is it fair to say that we've taken a decent amount of market share given that our newer locations have also started contributing?

Market share, we hope the market share gain -- our market share is increasing.

Sir, would you have a sense, sir, what has been the industry volume growth in this quarter in pipes?

We don't see much growth in volume, not much growth. But compared to the first quarter last year, the numbers are jumbled up. Overall, the industrial -- 3.7 million tonne last year on PVC, out of which 70% is plastic piping only. This year, the growth is reasonably okay in each of the segment. But we believe it's our company with many locations now in operation, we will be taking some share from other people also.

Okay. And would it be fair to say that we would have taken a large amount of market share in East India now that our factories are commissioned. So incremental growth is coming in from that geography?

You are right, Eastern India we were now 3 plants, Guwahati, Cuttack and Kharagpur. And we are quite happy with our growth in those markets.

And what would be an approximate market sizing in that side of the geography, sir, overall market sizing? Any sense.

Overall market size in the country last year was 4.2 million tonnes. There were plastic pipe going in piping. Of the 4.2 million tonnes, we count 65% in the organized sector.

Sir, I was referring more to Eastern part of the country, East India.

We don't give correct number with you. But we are the very dominant player in Eastern India. That is for sure.

Okay, okay, okay. Secondly, sir, you mentioned the tanks business has been doing well. Is it fair to say that it is a value-added product for us?

Value-added product.

Okay. Because of late, competition has been rising and there has been some pressure on profitability. So just wanted to check.

Our quality is extremely good.

Okay, okay. And lastly, sir, on the Silpaulin side, when do we expect the segment to again start getting into the value-added category?

[indiscernible] of the dividend this year only, it will start going to value added. [indiscernible] segment of application, we also go...

The next question is from the line of Vipul Kumar Shah from Sumangal Investments.

So my question is regarding margin in the plastic piping products so if I see, if I compare with the fourth quarter of last year, margins have come down -- have come off very sharply even after adjusting for 40 crore inventory loss. So what are the main reasons for such a big loss in margin?

You see apart of inventory loss, the product mix is in the first [indiscernible] large volume of Agri and Infra, which is a lower margin business, has been done well in this quarter. And that's how so much volume growth of 48% in quarter-on-quarter. So those volumes come with lower margin, which affects overall piping business margin -- And in the fourth quarter of last year, we see some benefits of the annual incentive where you achieve some incentive schemes meeting the parameters, those incentives comes only in the last quarter, once you are [indiscernible] met the quantity criteria of the incentive scheme given by the robotic supplier?

So can you quantify the incentive, sir, if it is possible?

INR 0.50 a kg on the total quantity of PVC, what you will offtake from the suppliers.

Sorry, I didn't get it, sir.

On total quantity offtake you get annual incentive of about INR 0.50 kg.

Okay. INR 0.50 per kg. Okay, sir. And lastly, sir, regarding composite cylinders. So are we at 100% utilization? And are we going to expand any capacity there?

No, no. Already, we have expanded the capacity last year in February. Presently, the delivery schedule from Indian Oil Corporation are somewhat slower. So there's no reason to expand further. 50%, 70% utilization this year after the increase in capacity.

70% capacity utilization, right?

Yes.

The next question is from the line of Sonali Salgaonkar from Jefferies.

Congratulations on a great set of volume numbers. Sir, my first question is regarding Supreme Petchem. While you have delivered a very healthy operational performance, we can see that the contribution from your associate has gone down drastically. So from here on, how should we look at the contribution from Supreme Petchem over the coming quarters? Do we see revival in that?

No, they had inventory loss in the first quarter. Now that is all behind. Now the demand is looking quite good for them for the remaining 9 months. And I think Mr. Nair will be interacting with the investor team on Monday so he'll be able to give you all the questions and answers properly.

Sure. So we should expect some amount of normalization coming back in the coming quarters, right?

Yes. We are quite optimistic. The company is doing quite well on the investment plan also. The company put a very well issue. So we are very happy with the performance of the company.

Got it, sir. Sir, my second question on pardon me if I'm being repetitive because we got doubt of the call for a certain time. So your guidance for volumes and margins, is that correct that 20% plus volume growth in FY '24 and margins at 14% plus.

Yes. Yes, we anticipate our volume growth will be 20% plus, and our operating margin will be 14% plus.

Got it, sir. Sir and thirdly, about the demand. You mentioned that Infra and Agri were the drivers this quarter. But going forward, are you seeing revival in real estate construction. And if so, from where either rural or urban?

Our demand is going quite strong. When we talk the first quarter, this -- additional demand came from agriculture infrastructure. Our demand has never weakened. The demand is strong and effectively remains strong for the remaining 8 months of the year. Good growth demand growth coming from Infra activities also, which may continue for the remaining part of the year.

Got it, sir. Sir, and lastly, on the PVC trend, you mentioned that you have seen stability in the prices in July. So should we, I mean, inherently assume flattish prices over the coming quarters? Or do you think there could be renewed volatility into that? That's all from my side.

Volatility will remain always in the polymer, but not volatility like 2021. Always [ 50 ] plus minus continued. But presently, the trend is a little bit bullish.

Got it. Sir, sorry...

The prices of PVC [indiscernible] has gone up between $50 to $80 per tonne in last 4 weeks.

Got it. And just 1 last question. We missed the numbers of Nal se Jal volumes that you've given, could you please repeat that for us?

Nal se Jal volume, no, we could not -- we did not give exactly because there's so many products being applied.

All right. Sir, are you seeing renewed traction on the ground for this?

Yes, yes. That's why the infrastructure when we are talking infrastructure is a part of Nal se Jal only most of the infrastructure for providing the drinking water from reservoir to the village. So a lot of polyethylene pipes are being supplied for that only.

Got it. That's helpful.

Thank you. The next question is from the line of Rahul Agarwal from InCred Capital.

Follow-up. Sir, as far as the government business is concerned, we are doing Nal se Jal, which is largely infrastructure pipe supplies, and we are doing the IOC order under the composite cylinder. Anything else do we do for the Indian government direct billing.

Indian government business, we are doing only with Maharashtra. Otherwise, our business is done through contractors. We don't do directly.

Okay. Even the composite cylinder thing is direct previous through contractor...

Indian Oil Corporation, we can't -- yes, it's a government company, but probably a limited company now.

Yes, sir, yes. So I'm including PSUs also. So anything else we do apart from Nal se Jal and cylinders with the Indian government or public sector companies.

No, no...

Okay. Got it, sir. Sir, secondly, on the composite cylinder, what's the order book now?

Order book is reasonably okay. As Mr. Somani informed you, we are anticipating we'll be able to sell 70% of capacity.

Which basically means that we sell about 7 lakh cylinders this year, right?

900,000 [indiscernible]

I thought the capacity was about 1 million units, right?

Yes, yes, 1 million, but...

We will try to make more, no issue.

Okay. Okay. So different sizes so that's why you can sell about 9 lakh pieces, is it?

Yes.

Okay. Got it, sir. And lastly, PVC window and door that is also a value-added product.

It should be value-added.

Okay. And that definition of 17% margin remains, right? Is there any change to that?

We went in 17%.

We'll take the next question from the line of Praveen Sahay from Prabhudas Liladar.

So the first question related to the capacity increase in the piping segment, that is you had mentioned to reach from 6 lakhs to 7.5 lakhs so should I consider the 4 of the due initiative or the systems you are adding in the piping system, that is also included in the capacity expansion in that. That's a gas piping system and silent piping.

In the production, we are fully available next year only. They are putting investment. So investment made out [indiscernible] also this year, like polypropylene silent pipe system, the advantage of the system may be available early next year. PP industrial piping also may be available next year. The polyethylene gas pipeline also is going through the approval process. So that also benefit may come next year. Only Aluminum P pipe, we have already put in that market and that is already being sold by the company. So out of the 4 new system, the benefit will start accruing to the company from next year. Money will be invested this year.

Okay. And can you more elaborate on the gas piping system users where it is used.

The polyethylene pipes supplied to the gas companies like Mahanagar Gas Limited were supplying only gas to the household. Like water to house, gas is also being supplied to the houses by piping system. And now government is putting more trust to supply gas to houses instead of supplementing the LPG cylinder. The gas companies are outwitting already in India. And those gas companies will require pipe for getting the gas to the house.

All right, sir. Sir, can you give the -- for this quarter, the volume contribution number for the 3 segments, like Plumbing, Agri, Infra in the piping, how much is that contributed.

We got a separate number because the pipes are -- the pipe which we showed [indiscernible] pipe are used for housing also.

We'll take the next question from the line of Kamal from CLSA.

I just wanted to ask that if I was looking at the realizations for kg for the packaging products, which has fallen by 6%. However, I can see an EBIT per kg increased by 6% Y-o-Y. Can you please elaborate like where we have performed better in this.

Again, can you repeat your question?

I was saying if we look at the realizations for kg for the packaging products, it has fallen by 6% Y-o-Y.

Packaging, you see we have 3 segments d this protective packaging, cross laminated packaging and the performance again. So protective packaging, which was languishing till previous years has started doing well. They are developing various new and customized solutions for their customers. So definitely, the realization package has improved. And so the margins also.

Okay. Got it. And can you please let us know like what was the overall capacity utilization for this quarter?

For this quarter as a company we have produced about 150,000 -- tonnes of products. You are talking about companies only...

Yes.

Yes. So against the capacity of 8 lakh metric tonne exceeding quarterly capacity of 20,000 metric tonnes. And we have produced 150,000. 75%.

We'll take the next question from the line of Srinath from Bellwether Capital.

So the CPVC growth for the entire industry was negative last quarter, sir? Or did we face a unique issue because of our...

For the entire -- for the quarter, I don't have the numbers.

Okay. Okay. And this is only impacting CPVC? Or you are seeing spurious products in PVC also in the Northeast market.

You could not get a growth of 48%. So 48% by volume in the first quarter in piping.

Got it. So the issue is only in CPVC.

Only in CPVC, which was obviously due to counterfeit pipe being supplied in Northern Asia, Indian market.

Got it. Got it. And so our total volume -- Hello. Yes. So if our total degrowth was minus 10% or Northeast degrowth would have been significantly higher than that, sir? Is that fair to assume that.

We told you we had a degrowth of 12% and the degrowth in North and East was more than 12%.

Okay. Perfect, sir. And last one, sir, I missed the first 15 minutes of the call. The Har Ghar Jal kind of -- any qualitative comments on what would the contribution be at least to the value top line? Because in volume terms, of course, there are different pieces and it becomes a little complicated. Would it be fair understanding that maybe about INR 300 crores, INR 400 crores of revenue largely came out of that program, sir?

Very difficult to quantify. Revenue from Nal Se Jal supplies.

Nal Se Jal we started only properly from this year only now.

Yes. So in the INR 1,600 crores, sir, would it...

Nearly 7,000 [indiscernible] material. And we get around maybe INR 150 to -- INR 140 kilo -- so maybe on 7,000 [indiscernible] INR 100 crores.

Okay. Perfect, sir. So about INR 100 crores would be the likely revenue that we would have accrued from...

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

Sir, I just wanted -- I had a question you have indicated around 15% volume growth guidance for the full year. If we take this Nal Se Jal Maharashtra government order out, how should we look at it? Will that number come down to around 12%, I'm taking into account INR 140 per kg, what you just indicated in the prior question.

What is the question, I don't follow.

50% volume growth has been now enhanced to 20% plus volume growth in today's call. For the company as a year...

For this year. We [indiscernible] 15% CAGR basis for that 3, 4 years. But for this year, we are saying that our growth overall will be 20%. And in piping segment, we may grow between 23% to 25%.

Sure, sir. Well, then it helps then the implied number goes to around 17% ex Nal Se Jal. That's helpful, sir. And sir, revenue guidance, does it remain the same? Or does that also change?

Revenue guidance from 11,500 we told in the -- now, we are talking INR 11,000 crores around where the prices will come down.

Correct. But sir, if I look at INR 11,500 crores of top line and the stated EBITDA margin guidance, is it still 13.5% to 14%? Or have we changed that, sir?

We talked today INR 11,000 crores. And operating profit margin guidance, 14%, which make INR 1,540 crores.

Correct. Sure. Sir, then it would imply EBITDA per kg for the balance 3 quarters at nearly INR 26, INR 27 versus what we reported in this quarter was INR 21, are we comfortable on incremental guidance on per kg basis as well given we already qualified the margin as well as the top line, sir?

You see this quarter, there was about inventory losses. -- which about INR 3 a kg. So INR 21 becomes INR 24 in your normalized conditions. And with a more volume of Agri and Infra, the realization per kg was lower in the first quarter, which is definitely going to increase as we move ahead.

Sure. This is very helpful. Thank you so much.

[Operator Instructions] We have the next question from the line of Vipul Kumar Shah from Sumangal Investment.

So the guidance, which you just spoke about, is it at EBIT level? Or is it at EBITDA level?

EBITDA level.

[Operator Instructions] We have the next question from the line of Sneha Talreja from Nuvama.

Also mentioned volumes for Industrial and Packaging division. I think I missed that, some 64,000 and 1 more number, if it all you could repeat that.

For both these segments, the Industrial Products segment, about 64,000 total number would be volume for the current year. And for packaging, also about 64,000 metric tonnes for the year.

Okay. So both 64,000 metric tonnes for the year?

[indiscernible] 67,000 on a composite cylinder, 67,000 industrial.

And 64,000 packaging.

And 64,000 in packaging.

Understood. Very helpful.

Thank you. Ladies and gentlemen, as that was the last question for today, I would now like to hand the conference over to the management for closing comments. Over to you.

Thank you very much. And we thank all the participants to raise very analytical and incisive questions. We thank all of them. For their time, and analyzing our working and guiding us. Thank you, all each. On behalf of Mr. Somani and Mr. Saboo, we thank all of them.

Thank you, members of the management. Ladies and gentlemen, on behalf of DAM Capital Advisors Limited, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.