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

Ladies and gentlemen, good day, and welcome to The Supreme Industries Q3 FY '24 Earnings Conference Call, 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 Limited. Thank you, and over to you, sir.

Yes. Thank you, Muskan, and good evening, everyone. On behalf of DAM Capital, I'm happy to welcome you to Supreme Industries Q3 post results call. From the management side, we have online Mr. M.P. Taparia, Managing Director; Mr. P.C. Somani, CFO; and Mr. R.J. Saboo, Company Secretary. Over to you, Mr. Taparia for your initial comments.

Thank you very much. I am 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 standalone and consolidated financial results for the quarter and 9-month period ended 31st December 2023. The standalone results and the consolidated results are already with you. I'll be brief on company's product operating performance and other highlights. The company sold 158,025 tonnes of plastic goods and achieved net product turnover of INR 2,429 crores during the third quarter of the current year against sale of 138,362 tonnes of plastic goods and achieved net product turnover of INR 2,284 crores in the corresponding quarter of previous year, achieving volume and product value growth of about 14% and 6%, respectively. The company sold 444,332 tonnes of plastic goods and achieved net product turnover of INR 7,043 crores during the 9 months of the current year against sale of 359,087 tonnes and net product turnover of INR 6,500 crores in the corresponding 9 months of previous year, achieving volume and product value growth of about 24% and 8%, respectively. The consolidated operating profit and profit after tax for the third quarter of the current year amounted to INR 400 crores and INR 256 crores as compared to INR 331 crores and INR 210 crores, respectively, for the corresponding quarter of the previous year, recording increase of 21% and 22%, respectively. The consolidated operating profit and profit after tax for the 9 months of the current year amounted to INR 1,123 crores and INR 715 crores as compared to INR 824 crores and INR 506 crores, respectively, for the corresponding period of the previous year, recording increase of 36% and 41%, respectively. The business scenario of all the product segments of the company for the third quarter of the current year ended 31st December 2023 as compared to the corresponding quarter in the previous year has been as under: Plastic Piping System business grew 17% by volume and 9% in value terms. Packaging Products segment business grew 3% by volume and 4% in value terms. Industrial Product segment business grew 10% in volume and degrew by 1% in value term. Consumer Products segment business degrew by 3% in volume and value term. The overall turnover of value-added product increased to INR 853 crores during the third quarter of current year as compared to INR 826 crores in the corresponding quarter of the previous year, achieving growth of 3%. The company has a total cash surplus of INR 586 crores as on 31st December 2023 as against cash surplus of INR 738 crores as on 31st March 2023. Business outlook. Polymer prices have stabilized at an affordable level. Red Sea conflict has disrupted normal flow of the business. The price volatility may become severe if this conflict becomes more wide spread. In our country, additional petrochemical plants have gone into operation. Further capacities to make polymers are expected to go into production in the country in next 2-3 years. This augurs well to plan further growth in the company's businesses. The company acquired M/s Parvati Agro plast at Sangli, with a capacity of 36,000 tonnes per annum. The additional adjoining land of 7.76 acre, which was part of the deal, is still waiting for certain Government clearances to company's ownership. Several balancing equipment’s to run the plant fully are still to come. The company expects to run this unit at full capacity beginning February this year. The construction of the company's fourth plant at Malanpur is going in full speed. It is expected that the plant will be put in operation during the first quarter of fiscal year 2024-2025. This plant is geared to manufacture Ball valves and Industrial valves. The company received BIS approval for supplying it’s HDPE pipe for carrying Natural Gas. The company expects to introduce this new system to the market in fourth quarter of the current year. The plant can produce Accoustics Polypropylene pipe, is expected to go in operation during July-September 2024. The company has started offering its CPVC pipe system for Industrial application. Earlier, the company was catering plumbing and fire sprinkler system from CPVC raw materials. The company will now be able to cater to demand for Industrial Piping requirements from CPVC material. The company has placed order for 9 lines of O-PVC pipe manufacturing with its suppliers, after entering into this business. Once all these lines are operational, then the company will reach a capacity of around 30,000 (sic) [ 40,000 ] tonnes per annum of such pipe. This capacity may be operational within two-year time. The company intends to start O-PVC pipe production at Cuttack and Gadegaon, apart from its Sangli unit. The company achieved a volume growth of 30% plus in first 9 months of the year in its Plastic pipe division. The company expects to achieve similar growth for the full year in this segment. The company's manufacturing facility to make Windows and Doors at Kanpur is progressing. Considering the long delivery schedule of equipment which are of foreign origin, it is expected that the benefit of this business will accrue in 2025-'26 working only. In Cross Laminate Film division, the company continues its efforts to increase its range of made-up products along with its penetration in the entire country. The company is also putting more resources to reach several international markets to sell its existing variety of Cross Laminated film products. The benefit of all these initiatives will be reflected in future business growth. In Consumer product segment, the company had a degrowth of around 3% in the quarter. The profit level, however, was maintained compared to last year for the same quarter due to catering to premium range of products in this segment. The Cabinet range has superlative growth. The company's drive to increase numbers of showrooms has resulted in such number increasing to 298 number by end of December 2023 from 244 showrooms at the beginning of the year. The Industrial Component Division continued to face weak demand scenario during the quarter. This division is more dependent on appliances and white goods which have not fared well even during festive season. Division is continuously engaging with new customers and application to optimally use its manufacturing capabilities. The division is hopeful of business recovery with gaining new customers and new applications. The business scenario in the Material Handling Division remains robust with good demand from Fisheries, Food and Vegetable and Dairy segments. Division has also received good orders from the soft drink industry. The introduction of the new dustbin range has received encouraging response and the division should continue its momentum of growth both in volume and value terms. Newly installed production line of composite LPG cylinders has been successfully established. Execution of old order received from Indian Oil Corporation is nearing completion and new enquiries are expected soon. The recent introduction of promotional campaign and activities by Indian Oil Corporation has seen increased enquiries for the product. Other two oil marketing companies are also likely to introduce the product in the market soon. Export enquiries continue to flow but no significant development has yet taken place except repeat orders from existing customers and small quantity orders from new country and new customers. The Protective Division business has been able to develop specialized and customized solutions for its newly acquired customers. Necessary investments are being made to ramp up the capacities to meet the increasing demand. The division is working for more export opportunities and strengthening of internal as well as distribution network is in progress. The Performance Packaging Division is exploring more export opportunities and working on new applications for better profitability. Its present capacities are optimally utilized and availability of space remains a constraint for further growth plans. The company remains optimistic for business opportunities and continues to commit more Capex in line with its growth plans. Total commitments, including acquisition of business of Parvati Agro Plast and carry forward commitments of previous year, may exceed INR 1,000 crores. However, total cash outflow is not likely to exceed INR 750 crores for the year and the same shall entirely be funded from internal accruals. This is a brief and overall summary for the quarter and 9-month period ended under reference. Thank you for your patience. Now I and my colleagues, Shri P.C. Somani and Shri R.J. Saboo, are available to reply to the various queries raised by all of you. Thank you very much.

[Operator Instructions] And the first question is from the line of Rahul Agarwal from Incred Equities.

Sir, first question is on volume growth. I can see packaging, industrial and consumer products obviously are going through lower growth what we are seeing in pipe, when does this go to double digits? Because 9 months, largely all these 3 segments have grown in single digits. So could you help us understand what do you see growth in fourth quarter or for the full year, if you want to talk about fiscal '24 or the next year, fiscal '25?

In packaging segment we are moving towards value added items. With value added items, our operating margin will improve, volume may not be in double digits but it will give a better profit growth to the company.

Sir, what about industrial and consumer next year, volume growth?

Consumer segment as we stated we are moving more and more to premium items, so volume growth will be insignificant, but will be much better than previous year. Industrial product segment will depend on how our customer business improves, so we cannot talk about the volume growth or whatever it is, on Industrial segment we cannot talk. We cannot give any promise on how much will be volume growth and value growth.

Got it, sir. Sir, next question was any inventory gains or loss in third quarter?

Inventory loss only.

Sir, any rough estimate of inventory loss?

For 9 months we can only declare today that whatever was the valuation of our Piping division on 1st April, it has gone down by value of INR 51 crores in 9 months. The same quantum of inventory valued at INR 51 crores lower on December 2023 compared to 1st April 2023.

Got it, sir. And your comment on CPVC for industrial piping, how much annual volumes can we do on an ideal basis?

I can't share all. Product has been very well accepted.

Sir, any idea of the market size?

We have entered now on the market side, not only CPVC we are supplying PPR also for industrial application. We supply polyethylene pipe also for industrial application. It's a market overall for industrial piping. The material is used as per the requirement of the customer and requirement of the application.

Got it, sir. And last question on O-PVC, you said your capacity expansion is 40,000 tonnes, this is over and above Parvati's 36,000 tonnes.

30,000 tonnes. We have planned 30,000 tonnes capacity expansion but that will take 2 years' time.

Got it, sir. Is it over and above Parvati's 36,000 tonnes?

Sangli 3,000 tonnes in only O-PVC. 33,000 tonnes is PVC and polyethylene. Total capacity of Parvati 36,000 tonnes, out of which O-PVC 3,000 tonnes.

Okay. Got it, sir. Got it. Anybody else in India who does O-PVC right now?

There are 6 more customers -- 6 more suppliers.

And what would be roughly the Indian capacity for O-PVC?

I have no idea.

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

Congratulations on strong volume growth, especially in the plastic side. Wanted to understand, you've done 17% this quarter, and you had earlier guided for 28% volume growth, which you further decided to upgrade it to 30%. So what's the confidence coming -- where is the confidence coming from? What are the new avenues, which are driving this volume growth of 30% after a strong year already?

Not clear. Madam, can you repeat the question please?

Sir, what's giving you confidence of upgrading your own volume guidance of 28% in pipes to 30% now?

In the first 9 months, we have grown by 30.4%. And the polymer price has become further affordable and there is good demand from infrastructure and housing and last year in the month of January and February the demand was low. So when we say that we will grow 30% for the year, 9 months we have grown by 30.4%. And the remaining 3 months, business conditions are looking better compared to last year. So we are able to commit that we will grow 30% for the full year in plastic piping.

Understood. And rest of the segment, sir, where do you see potential, you mentioned about packaging that you are focusing more on value add and margins would come in, but you would say you won't go to actually double-digit volume growth. When do you see this segment going back to double digit? Would it be single digits for next year as well?

In Packaging segment, there are three divisions. Like Cross Laminate Film, we are going more and more into value-added product other than Tarpaulin where we are able to capture more value than what we are getting in Tarpaulin and protective packaging film, we are growing into more and more multi-structural and more and more into export markets where we get better margin, so our capacity is restricted, we don't have capacity producing 10,000 to 11,000 tonnes per year, with the space constraint we can't grow more capacity there. So whatever capacity we have got we want to earn more money by that capacity by going into specialized product. And protective packaging product, we are now selling more and more laminates to realign fire substrate and we laminate and in that laminate product we are getting more value addition where it is more profitable.

Understood, sir. Understood. Sir, also on your new product line, just wanted some clarity, you mentioned that revenues will start flowing in from FY '26 with the PVC window profile system. Could you speak more on it that how will be the distribution network, have you started creating the same, what is the potential of this product line for you?

In the Window line, our plan is not to sell the profile, we will make customized window as per the requirement and we will do window fabrication, initially at 5 locations, 3 of the company and 2 we have identified franchisee who will make on our specification and customize, we will offer the window to the customer based on our profile and our accessories. And initially, we hope to sell 5,000 tonnes and later on we will increase that capacity to 10,000 tonnes in the same site that is in Kanpur.

[Operator Instructions] The next question is from the line of Shubham Aggarwal from Axis Capital.

Sir, just we've seen very strong growth coming for you over the last year. I was trying to get a sense that where have you seen this growth coming from? You're also very strong in government business, you're strong in retail as well as in projects, right, the plumbing business, the projects business. So where have you seen the maximum growth come for during the last year? And what do you expect going forward in the next 2 years there, where will the growth come from governments, retail or projects?

Our business with government is very small. Our business is mostly coming from -- in plastic piping more from housing and going to the agriculture and further growth from infrastructure which we don't deal much with government but we share through contractors and that business is the smallest among the 3 segments. Number one is housing, number two is agriculture and then the government.

Sir, broadly, what would be -- in 9 months FY '23, broadly what percentage of your business would go to government, retail and projects?

The problem is whatever pipe we sell for agriculture, the agriculture pipe, we know that many of the pipes are used for housing. So difficult to divide the total percentage between housing, agriculture. Government business in small in the company. It may be less than 10%.

Okay. So when you say government business, you actually mean that business which may also be supplied through contractors to the government. You mean...

We combine both of them. Directly with government, we are only dealing with Maharashtra Government, otherwise all through contractors.

Fair, sir. And just in this context, I think we're a big player for Jal Jeevan Mission across the country. Just wanted to get a sense that a lot of the 28 states have already completed their Jal Jeevan Mission targets is what we see on their website. And as they complete and more are expected to complete in the next 6 months, what impact do you see from this once the Jal Jeevan Mission has completed for the government, once they have achieved their targets...

We are now told that the Nal Se Jal scheme will be over in 6 months, but we believe that by March '25, most of the works should be complete. But we are now moving into their supply system and this is also going to be suppled through government issuing order from the gas company and where our pipe is being approved by now BIS and we will be using the same capacity to manufacture pipe suitable to carry natural gas.

[Operator Instructions] The next question is from Sonali Salgaonkar from Jefferies.

I have just one key question about your margins. Now core operating margins in Q3 is at about 15.5%, which is up by more than 200 bps year-on-year and even about 10 bps quarter-on-quarter. Sir, I actually would like to understand from you as to -- I mean, what is the key for such a margin resilience? Because this quarter, we saw volatile PVC prices, especially in November -- sorry, especially in October and December when the prices were quite softer. So despite this volatility, what can lead to the margin resilience, especially because even value-added sales is just at about 35% of your overall sales this quarter. I would like to hear your thoughts for it.

We are increasing our range of product more and more. In our piping system, our range is now in excess of 16,000 SKUs. We are making more and more special products which may not fall in the value-added product because our criteria for value-added product is it must earn 17%. But if it earn lower than 17%, they don't fall in value-added product what was declared to us, but definitely become higher than 15%, which enable us to enjoy a margin of around 15.5%. And this trend will continue, we will be working for speciality market so that we are only to maintain our margin at a better level.

Understand. Sir, and broadly, are we able to give any approximate estimates as to within your plastic piping system, which is about 55% of your overall top line, how much of it caters to agriculture versus construction?

Very difficult because as I spoke to earlier investor partner, that agriculture pipe is used for housing also, so very difficult to give percentage right. But as we inform you that we are principally supply to housing market direct to the project construction or through retailers. We are not a big player in agriculture market. As there is a demand also between 7 to 8 months in a year and we are not very -- strongly active in agriculture market. We're more in housing market.

Understand. Sir, and last one from my side. Would you be -- would it be possible to give us tier-wise distribution, very approximate as to how much comes from urban, then how much from Tier 1, Tier 2, et cetera, because your volume growth has been consistently very strong and outpacing the peers. So we would like to understand as to where this additional growth is coming from?

We'll go introducing several new systems. When we're introducing further SKU and new system, we are going to establishing new distributors. We're putting more plants also to make it more comfortable and more convenient to the consumer to get the product at lower cost. So these combined factors, all these factors, we're quite optimistic that we will continue to enjoy reasonably better growth.

[Operator Instructions] The next question is from the line of S. Ramesh from Nirmal Bang Equity.

So if you're looking at your blended margins and your margins on PVC pipes, there is a healthy trend in terms of margins per tonne. Thus percentage margins will vary with the top line. So in terms of your own assessment of the market, how do you see the EBIT per tonne for the pipe business moving in the next 1 to 2 years based on the ability to grow the volumes and operating leverage as well as the change in input cost and the overall...

You see, based on the product mix what we are into and we are introducing, our EBIT margin per tonne will be in the range of INR 18 to INR 20 a kg.

It is a blended margin. And how about in the pipe segment because pipe segment is already at about INR 18 to...

I am talking pipe only.

Okay. And what about the overall company margin?

Company margin see different product divisions. Everything does not go on the based on volume.

Yes, I understand that. So if you see there is an improvement in the blended margin, if you look at EBITDA per tonne about INR 24,000, roughly, right? So under $300 per tonne, would you be driven more by volumes in terms of the overall blended EBITDA over the next 2 years or when you talk about value addition...

In the sense only in the plastic piping system. Other divisions, in the packaging, they are not grown by volume, the value-added product or the customized solution or special applications. Each segment has a different specularity and not be just given a simple margin guidance for per kg.

So basically, you're saying if you look at the next 2 years, we should look for the most of the growth to come from the pipe business. Is that a fair assessment?

Pipe being the largest one, giving 65% to 70% of top line. The volume growth definitely will come from piping. The other divisions are not capable of growing in great speed. Margin improvement will come from the other segment where particularly from packaging is doing very good now.

No, so the question is in terms of the incremental growth in the other segments, can it move the needle in terms of your overall growth in EBITDA? That's the question. But in pipe, your margin per tonne is stable and is the one way always...

We are happy that we have declared this year 15.5%, and definitely we want to improve, but 15.5% is far better than what we have achieved earlier.

Okay. So in terms of the overall CapEx, how much is the CapEx share or the costs you have incurred on the acquisition of that Parvati's assets?

Parvati assets, we have given INR 151 crores and INR 21 crores for the adjoining land which is yet to come. Total outgo will be INR 171 crores.

INR 171 crores. So that INR 1,000 crores CapEx, does it include the subsidiary, Supreme Petro also?

No, no.

Supreme Petro, they are on investment.

So this INR 1,000 crore CapEx, where is it going? What are you creating based on that?

This was in acquisition of Parvati Agro of INR 171 crores and also around INR 600 crores is the other piping activity. And other segment also we've invested money. So overall as we stated we'll be committing investment including carryforward and acquisition of Parvati Agro of INR 1,000 crores. And this year, we're going to end March 2024, we will be having cash out of INR 750 crores out of debt.

Okay. So if you're looking at your overall ROCE profile, what is the expectation of ROCE on this CapEx incrementally?

ROCE, last year was 33%.

You see ultimately, when we put a greenfield plant, it takes some more time to get the proper utilization of the infrastructure. So see, from the greenfield plant, it's later on because we expand phase by phase. But our asset to turnover ratio remains between 1 to 2.4, 2.5 once the full infrastructure and whole expansion comes into play.

So in terms of overall volume growth in terms of tonnage once you complete this CapEx, can you give us some sense in terms of what is the percentage growth in overall aggregate volumes, say, in 2, 3 years' time?

See, the INR 1,000 crores CapEx what we are committing this year would reach our capacity -- installed capacity from 800,000 opening capacity as on 1st April '23 to above 1 million tonnes by December 2024.

Okay, sir. So one last thought on Supreme Petro. They have announced a huge CapEx of INR 800 crores, they are planning to invest in the...

Supreme Petro, they are on investment plan.

No, that's fine. So is it possible to give us some indication in terms of what is the thought process in Supreme Petro in terms of expansion and ABS? What is that CapEx on...

Supreme Petro, they announced now that they are putting one line of polystyrene and ABS and then they're putting line to make 1 million square meter of 3D panel, 12,000 tonne of styrene and 100,000 meter cube of extruded polystyrene foam board. They are going to put 5 segments of business at a new complex at Panipat, which is in Karnal district near Panipat, Indian Oil Corporation Refinery. They acquired the land and where they're putting this investment within the third complex of Supreme Petrochem.

So what about that acrylonitrile butadiene styrene project they talked about....

It is very clear, the butadiene styrene that ABS is being put up at the adjacent plant in Maharashtra, near Nagothane. This work is going in full swing. That plant will be in operational phase by March 2025, with a capacity of 70,000 tonne per annum.

And what will be the CapEx on that?

Their CapEx is around INR 850 crores or INR 900 crores.

The next question is from Abhishek from DSP.

Sir, just in terms of the pipe growth that you have seen of almost about 30% in the first 9 months. Just wanted to understand what would be the growth of the underlying market? And would that imply market share gains?

The Indian market, the PVC hedges has gone up by 15% in first 9 months. The Indian market growth of CPVC has grown by 2%. Polyethylene, how much market is growing, we'll see, there are so many applications so I have no idea, but PVC, which is our preferred material, has grown by 15% in 9 months by volume and CPVC by 2% by volume. And our company grown by 30% in overall piping, in which CPVC is grown by 8%, and PVC is grown by more than 24%.

Okay. Okay. So you have then -- that implies that you have gained significant market share, sir, in the 9 months of FY...

Our company market share has increased.

Okay. Great. Great. And sir, just in terms of the capacity, Somaniji called out that you have 8 lakh tonne capacity. What is the current capacity as we speak after 3Q FY '24, what is the addition in the 9 month FY '24?

So 9-month CapEx, yes, which is going to production is very, very limited from that perspective. So once we close March '24 then we'll be able to give precise capacities, what has gone into production.

Of each segment.

By each segment-wise. Parvati capability which has come into fold, but did not yet fully operational. So any capacity giving right now will not be right analysis. I think March '24, let's us wait for that.

Okay. But broadly, you're saying by December 2024, you will have 2 lakh tonnes of additional capacity, including Parvati, that's the way to look at it.

Yes.

Okay. And that will include how many greenfield capacity?

Greenfield, well, we are putting in Malanpur, otherwise Parvati is definitely from our prospective is greenfield that way. But otherwise we are expanding capacity at Erode and Cuttack.

Which are now running plants and now they're no more greenfield.

Correct. So it's an extension of the earlier greenfield, so it's now a brownfield expansion?

Now Cuttack, there's some old plant, Malanpur old plant, Guwahati old plant. So now we're expanding. What we're doing this year will be from brownfield, just brownfield gone into operation already.

Got it. Got it. Got it. And sir, just one other thing in your press release, what we found that this time around, you have spoken a lot on the export opportunities as far as the LPG cylinders, the Protective Packaging and the Performance Packaging division is concerned. So is there a different way you're looking at the export opportunity now for these three categories what can be the contribution of exports over a medium term? Any thought, sir, is there a bigger opportunity there?

We started in big way into increasing our export not only in packaging but also in piping system. Piping system and packaging, both ways, there's a big thrust on boosting export. So we have now started participating in several exhibition in the world. And once the outcome comes, it will take some time, it don't grow overnight. So we'll be reporting to you after the year is out how much we are growing in export business.

Okay. Got it. Got it. Sir, just one last question from my side. In the LPG cylinder part of it, you have called out that apart from IOC, you're also seeing the other 2 oil marketing companies also looking to introduce the product. If you can just give us a broad sense in terms of the capacities and would you like to...

No order has come from any of the other companies, we hope.

Correct. Okay. And what is the overall market size here, sir, how should one look at it?

A big market size of steel cylinder, but the buying of plastic cylinder is very small. Market size is 4 crores cylinders per year. And I don't see they're buying half a million cylinder annually.

Okay. So would you need further CapEx over there? Would you think there could be a need in the next 6 to 12 months where you'll need to allocate more capital here?

As on today, no CapEx needed but we'll sell the capacity.

The next question is from the line of Akash from UTI Mutual Fund.

Am I audible?

Yes, audible.

Yes. Sir, just wanted to ask how much is the price decline in CPVC segment? I mean what is the realization decline in CPVC?

CPVC prices ramp has gone down by around 10%, but there are so many suppliers now participating in the market. So broadly, I can say the price has gone down by 10%. I told you that there are now several suppliers playing in the CPVC market and the price has roughly gone down by 10%.

Sure. Sure, sir. And next year, the antidumping duty in CPVC segment is going to end, so any thoughts whether the antidumping duty will get renewed? I mean, the government will extend that antidumping duty. I'm referring to CPVC...

That detail will be given by government only.

And the next question is from the line of Shubham Agarwal from Axis Capital.

Just, I think, 2 clarifications that I missed out. You were mentioning about the sustainable EBIT per kg for the plastic piping segment. Did I hear it right at INR 18 to INR 22 is a workable range that you are working with?

INR 18 to INR 20 per kg.

Somani, your voice cracked. Can you repeat?

INR 18 to INR 20 per kg. The sustainable EBIT per kg in piping system.

In the piping system, right. And secondly, on the CapEx, you said this year FY '24, FY '25, if you can repeat what is the CapEx guidance '24 in revenues?

No, FY '24-'25 not yet given. That we will talk only in the month of April. Right now for the '23-'24, we are going to commit -- we are committing, we'll be close to INR 1,000 crores, including the previously carryforward.

And the next question is from the line of S. Ramesh from Nirmal Bang Equity.

See, in terms of the PE pipes, you are targeting for the gas segment, what is the overall market you are targeting? And what is the kind size you expect to reach in the next 2, 3 years? Because that's a segment, there is a lot of CapEx happing in the new geographic areas. How do you see that business growing in the next 2, 3 years?

As PE gas pipes will be -- maybe several years. I can't tell you what is the government plan, but definitely it's required. And along with the pipe, we'll be supplying them our electro-fusion fitting also. So we make the fitting also, so we will be supplying full system which is not only pipe, but fitting also.

Okay. So in terms of the overall supply situation for your input materials like PVC and polyethylene, how do you meet the demand supply in Asia, China? And do you see any risk of China kind of dumping materials for your finished products like packaging and pipelines, so that's a bit of a concern for the entire chemical sector? So on the availability of PVC resin and PE resin and on the Chinese situation, what are your thoughts?

I don't follow your question. Dumping of the product, we are not aware because if you were shipping, yes, so we are not aware any pipe or polyethylene pipe or PVC pipes are being dumped from China to India, we're not aware. And even China is big supplier of polyethylene also in Indian market. We could lose capacity in India itself. PVC, because we are sure -- we are importing from China, the country is very short of PVC. And China is a big exporter so definitely large volume of PVC being imported from China.

Okay. Sir, one last one in terms of sustainable development to meet reductions on the carbon footprint, have you taken any initiative? How do you see that moving forward for your company and the plastic processing industry in general?

No, I think plastic processing is very responsible business and the scale at what we're doing is currently now being recycled. Actually nowadays, it's very difficult to find waste unless you go into municipal waste. Because whenever people are throwing plastic wastes, they are throwing actually wealth. We should not throw it and this should be collected and now there are many recyclers operating in the country, so many processes. And they are finding good use of the scrap plastic. So they know it's fully sustainable now.

And the next question is from the line of Udit Gajiwala from Yes Securities.

Sir, just one follow-up question. On the television interview, you mentioned that you'll be looking at a 12% to 15% growth for next year as well. So this is overall volume growth or just the pipe segment that you had mentioned?

No. 15%, I talked about piping segment.

12% to 15%.

12% to 15%? Hello?

That is for the piping segment.

The next question is from the line of Rahul Agarwal from InCred Equities.

Tapariaji, one question on the agriculture demand. We are entering a very strong season based on the weather outlook. How do you think where are the farmers' income moving and your assessment of how does the pipe demand look like for the next 6 months?

We believe demand is going to be quite okay because the pipe prices have come down quite significantly. And fortunately many of their products being grown in our country, the farmers are able to get better price. There's no problem, we heard about credit availability. So we believe now onwards up to 10th of June, the demand for pipe in agriculture market is going to remain quite robust.

Got it, sir. Secondly, sir, anything from the budget we should expect any positive or negative surprises for our company and our industry? Any thoughts, sir?

People say this budget is already continuing. Only, there is nothing -- no significant announcement we made because this is pre-election budget. The proper total budget will come in month of July, but considering the growth impetus moving in the country, we believe any budget will come which will come with a positive trend only. We remain quite optimistic in the growth of our economy.

Got it, sir. And last question, whenever the national election happened in the past, has it caused any disturbance or it's been very smooth for PVC pipe industry?

I don't see any, no problem. Only whenever on the working case, there's movement of cash money, there's a difficulty, but nowadays most of the businesses are no cash business. Most of the business at the farmer's level also, they've got so many bank accounts only. So business are done mostly by -- through banks only, so there's no issue nowadays. We don't get any affect due to election.

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

Thank you very much. Thanks to all the participants for very intelligent and elegant questions. We thank all of them. Thank you very much.

On the behalf of DAM Capital Advisors Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.