Visaka Industries Limited (509055) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Visaka Industries Earnings Conference Call hosted by ICICI Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Jigar Shah from ICICI Securities. Thank you, and over to you, sir.

Thanks, Steven. On behalf of ICICI Securities, I welcome all to the conference call of Visaka Industries to discuss the Q1 FY '21 results. From the management, we have with us today, Mr. Vamsi Krishna, Joint Managing Director of Visaka Industries; Mr. Vepa Vallinath, Director and CFO; Mr. Shafiulla, Senior VP, Corporate Accounts and Finance. I would request -- I would now request Mr. Vamsi Krishna to start the call with his opening remarks, post which Mr. Vepa Vallinath will speak, and then we can proceed with the Q&A session. Over to you, sir.

Vamsi, connected?

Yes, sir. Mr. Vamsi, your line is in talk mode, kindly go ahead please. Just give me a minute, I'll just reconnect him once again. Participants are requested to please be connected while we reconnect Mr. Vamsi. Ladies and gentlemen, we have Mr. Vamsi reconnected. Over to you, sir.

Yes. I think we had a small connection problem there. So coming back, the COVID, as we've seen, has had a very, very tough impact on most businesses. And as Visaka, we were no different. To start with, the months of March ending and April were really tough, but we really geared up in an evolving situation, and we geared ourselves up in all business fronts. We now are a company with 4 main verticals: the AC sheets, of course; the Vnext division that we've launched almost 10 years ago; and the Textiles division; and the new baby of the company, ATUM. So talking about the Asbestos division, I think that eventually became the savior for the company during the whole lockdown period. The rural India, as we've seen, was the least affected during the first quarter of this year, especially during the pandemic, and like our dependency of the product, the rural India really supported us in terms of the product outtake. The 1 month gap of April really created a huge demand for the entire industry, not just Visaka, but the industry as a whole. And over there, our practices are way forward and helped us in terms of stabilizing our AC sheet division. We've seen a good pickup in terms of demand for the 2 months, which we ran the business for. AC really had a price pull in terms of the demand. So that resulted in good margins. In essence, what we've been -- what any business rather looks at in terms of reducing expenses, increasing their revenues and thereby increasing their margins, we happen to experience that during the toughest period of COVID, and we are happy to share that with you. Coming to the Vnext business, as the urban metros, all of them were in a very, very tight situation, most of them were in severe lockdowns, so the movement of business in the metros really got affected. Vnext, as you all know, we've been concentrating very heavily in terms of how to increase our urban market share in terms of metros and upcoming tier 2 markets. So the immediate effect of lockdown was there on our Vnext products, thereby making us feel the pinch in terms of numbers in Vnext. But the second 2 months, once the lockdown norm started easing up, we saw Vnext coming back immediately to reasonably good numbers in terms of achieving almost about 20,000 tons in 2 months. So in view of that, going forward, we actually see that there's going to be a good offtake for Vnext. As we are changing our strategies now, even for the Vnext, we are concentrating more towards rural this year as well as urban expansions, of course. The secret of Visaka's Vnext success is that we've been able to be very aggressive in our expansions in terms of deploying our product in almost 1,500 to 2,000 selling points now all India. And we have a great product differentiation. People who use our product really know the difference in quality and utility. And of course, we've been very innovative in terms of our applications. So today, most of the COVID fast-relief hospitals have been constructed with our Vnext products. Be it disinfectant tunnels, be it the fast quarantine setups that have been of huge need, Vnext was there for those requirements. Not only that, going forward, I think Vnext is definitely going to see a much brighter and a bigger game to play. Because as you all know, we are a substitute product to plywood and the AC blocks and traditional construction. And today, seeing a big labor issue in terms of migrant laborers going back home or in terms of availability of workers now, Vnext's attribute, what we've been preaching over the last couple of years, people are seeing the actual result and the utility of the product. So that is something that is going to be something to look forward to as a company. Just a performance metric to share with you, the whole sustainability angle that Vnext has helped us engage with, we've saved over about 5 lakh trees in terms of deforestation and about 70,000 tons of carbon emissions. So Vnext is actually one of the lowest CO2 emissions in the building industry as we speak today. We are, of course, Green Pro certified, and we recently got an environmental award for ATUM as well. So as a portfolio, we are trying to increase our sustainability angle for the company. Coming to ATUM. It has been a very interesting and an exciting first year of operations since we launched. We've got awarded the UL and IEC certification. That means that our products has got tested in Germany, which is the hub for solar, as everybody knows, in terms of technology. And America. So the ATUM has been tested in America and Germany. And we've actually got a certificate where they said we are the first product like this in the world. So that is really a good feather in the cap for a new product like ATUM. Following which we got invited to the United Nations to showcase our affordable housing models that we've developed with ATUM, complete self-sustainable home. We've got engaged with many data centers across in Mumbai and in other parts of the country. We are looking at good offtakes from pharma sector for ATUM because if you really see, the power cost of any enterprise today is a heavy one on the cash flows. And ATUM really helps you in terms of easing out the monthly cash flow systems because of its really fast payback of just 2.5 years on a roof. Coming to Textiles. Textiles has been a very badly hit division for us in the COVID, because Mumbai, which is one of our major markets for the textile business was under complete lockdown. We are just getting reports in the last 2, 3 days that the Bhiwandi market is opening up. So we are seeing a slight ray of light as the Mumbai market improves -- or opens up in terms of its restrictions and business stabilizes. We definitely see a good push in the Textile division as well. Coming to sustainability, in textile as well we've done a lot of R&D, and we've come up with sustainable yarns. So it's basically the plastic bottles which we consume day in and day out, which just end up in dump yards or our oceans mainly, we've actually made a plastic recycling and used that in our yarn production. So we've almost saved about 95 million tons -- million PET bottles of these plastic bottles. So we made yarn out of them. So last year we sold about 1,000 tons of this yarn. So that is also picking up. And internationally, we are seeing a trend of antiviral yarns, which due to the whole pandemic, people are getting more sensitive and they want to have a more cleaner and greener environment. So that's where textiles also is taking a good outlook. Coming to digitization, I know we've been a very traditional company since the last 40 years. We've been concentrating mainly on product sales. But over the last 5 years, we've been working extensively and coming up with interesting solutions for the market, not just sell product. And in view of that, we've actually come up with a solution called Vnext Solutions app where you can just quite literally sitting at your home, you can design a house, an office space or a factory on your fingertips in your mobile phone and place an order and pay on the app itself. So this is going to be a very good breakthrough in terms of construction solutions. There are very few digitized solutions in the construction space. And nothing as far as really ordering, sitting at home and designing what you want to get completed in a one-stop solution. So that's where the digitization or the tech infusion is going on in terms of our building industry. So here's a quick snapshot of all our divisions and where we are heading forward to. And as Visaka has been consciously trying to increase new businesses to diversify into businesses that make sense that add value, we are definitely looking at sustainability in a very big way. And innovation, of course, innovation is the need of the hour and helps us be ahead in terms of market. So we are living by example. We are trying to adopt products like ATUM -- invent products like ATUM and sustainable yarns to stay ahead of the curve. So here is a quick brief from me. I will hand over to Mr. Vallinath.

Thank you. Am I on the line here?

Yes, sir, you are audible?

Yes. Yes. Thank you, Mr. Vamsi Krishna, and good morning, dear friends. Welcome to Visaka Industries Q1 call, which has been a great quarter. In very discouraging circumstances where the whole world is experiencing pain, we are glad to announce some wonderful set of numbers for this quarter. I think the main reason why we could -- we were able to achieve this is that I think we worked much harder during the lockdown rather than the normal period. In fact, we have had serious discussions, minutest of items have been analyzed in-depth and separately action has been taken to cut down costs drastically and also prepare as to how to reduce risk when markets open and how to take advantage of the opportunity as soon as the market opens. I think because of that, we have -- we were able to immediately respond with lightning speed the moment markets started opening from May. So this is an advantage to us as the rural markets are fairly insulated from COVID and hence the demand for [ products ] there has improved. So within the just effective period of 1 month and 20 days we had, from 10th of May, because 4th May the factory opened for some cleansing, cleaning et cetera, sanitization, et cetera, took a week and then from 10th of May, if you see, in 1 month and 20 days we were back with sales and end up with a sales volume of 85% of the sales volume of last year's same quarter. So that, along with cost cutting have resulted in healthy margin. So our [indiscernible] as our JMD has rightly said, so though April is a washout for everything, and May has started off very well with 33% capacity utilization and by June we came to 67% capacity utilization. As a combination of cost reduction and pricing rate, in the month of June itself, early month of June, the [ BO ] segment had 67% capacity utilization giving EBITDA of 15%. So this is a marked departure from the margins which we have been showing so far in this business in the -- so far in the last 2 years. So I've been talking about -- to the investors about the potential margins in the [ gross ] business to 20% for the last many quarters. And I think now that they are headed towards that. I'm sure that this quarter the margins will continue to sustain and to increase further as the operating leverage improves as the capacity utilization grows. While [indiscernible] the textile division, of course, is one actually which has experienced worse effect, but all the investors and all the market participants will appreciate that our impact of spinning business is a very unique business, it is a unique technology and therefore it enjoyed a space the moment markets open. Because we sell to most of the major brands. And therefore picking up scale and margins in this business is not at all difficult. If one would remember that last year we have declared the best results, the highest result of INR 17.5 crores of PBT in this business at year ending March 2020. Therefore, it's only a matter of time maybe from the middle of August or toward the end of August this market will pick up and will reward us handsomely. The ATUM business also, while we may say that ATUM market's growth and the pandemic is impacting, the truth is that the business managed to improve revenue to INR 2.2 crores in this quarter compared to INR 85 lakh in the same quarter last year. So that means it's more than doubled. Though small numbers, but the truth is that even in such a bad situation people are willing to buy and install ATUM. So that shows the potential of this business, and we expect this also to ramp up more and more as the lockdowns are lifted more and more progressively. So as a combined effect of all the above, Visaka Industries ends up with a minimal drop in revenue of 19% despite losing 33% of the time, April 1 month out of 3 months is about 33% of the time, but the drop in revenue is only 19%. This is a combination of aggressive sales as well as improvement in prices. The revenue grew, while EBITDA margin improved to a healthy 21% in June 2020 compared to 14% last year. PBT rose 31% to INR 46.1 crore over last year's INR 35 crores. The PAT rose by healthy 49% to INR 34.4 crore over last year's INR 33.07 crores. Interest cost also came down by INR 50 lakh to INR 3.94 crores, and depreciation came down by INR 1 crore due to [indiscernible] getting fully depreciated. The net debt, the most interesting part, net debt came down from INR 193 crore as on June 2019 to INR 80 crore by the end of June 2020. The entire working capital facility is remaining unutilized and we have liquid funds. Even if there's likely to be some increase in the working capital borrowing during the off-season due to pickup due to accumulation of inventory and also pickup of CapEx during the remaining part of the year. The debt is still expected to come down. My expectation is about anywhere between INR 50 crores to INR 80 crores, INR 90 crores by the end of FY '21 or FY '20. So this year is going to be a great year. It is going to be good in terms of profitability. It is going to also be a year in which Vnext business will start generating double-digit margins for sure. And we also expect to reduce debt and also incur CapEx. So during quarter, while the cement roofing business is the main contributor, I expect Vnext and yarn to contribute handsomely in the subsequent quarters. So I would say the picture [Foreign Language]. We have seen the asbestos effect so far and this, I think, is sustainable. Volumes have slightly come down, but I think we are trying -- we'll try to maintain the margin. So during the offseason, margins -- volume will definitely come down, but the margins will be maintained. And we understand yarns are going to contribute handsomely in the remaining part of the year, thereby taking up the margins to all-time high. The market, of course, for roofing business continues to be robust. And not only that, when cement roofing business formally picks up, it continues for about 3 to 5 years. And we expect the same to happen now also, especially since the steel sheets have been subjected to antidumping duty from China, Vietnam, et cetera, and imports from China are being discouraged. The Vnext business is expected to grow in double-digit in subsequent quarter, double-digit margin. So -- and also this year will be a year in which the ROCE and ROE are going to rapidly and create a lot of wealth for the shareholders. So overall, all these businesses are going to contribute. Even in such bad times, we have reduced costs. We have done our major marketing exercises in preparation of the market and with the right kind of initiative to generate this kind of return. And you'll also be happy to know that -- as you already -- of course you're already aware, that Visaka has got a very good balance of businesses. Now if asbestos roofing sheet is totally a rural oriented business, the boards and ATUM are the totally urban oriented business. So whichever markets do well, the respective businesses will do well and [ create profits ] And if both the markets do well, the company will be on the top [indiscernible]. And synthetic yarn business is, of course, neither rural nor urban, it is an all-India, all-season business. And in that also when we have a niche technology, obviously we will do well. In [ cement sheet ], nationally we are the #2 player. In the boards, we are the largest player, arguably the largest player. In the yarn, we have a very unique yarn. And in the case of ATUM, we are an innovator. So all the ingredients and -- with a strong management and the right initiatives, I think all the ingredients are there to have a very wonderful year this year as well as the next 2 to 3 years. I hope I have covered most of the [ things ] . Of course, the working capital cycle -- I mean working capital base has come down to about 75 days as of end of June. It could have been much better, it could have been much lower but for the little bit of slowness in the boards and the yarn. Otherwise, the working capital base could have come down to as low as 50 days also. And I think we will see this kind of thing for us during the course of this year. So all these things are going to generate a lot of free cash flow, it will help us through CapEx, and will also reduce debt. Thank you very much. We now, I think, can take questions.

[Operator Instructions] The first question is from the line of Shubham Agarwal from Equitas.

Yes, sir, basis the information given in the presentation, if we see year-on-year the realization of building products has increased by 13% and Q-on-Q, it has increased by 11%. But when I see the gross margin it has improved slightly by 2%, but sequentially it has dropped by 2%. So one gets an impression that even though the realization has increased, the cost has also increased the same time. So my question is to understand how sustainable this growth in realization is going ahead given that cost has increased this year over the increased cost in the last year.

Okay. Shall I take this question?

Yes.

Yes. So when you take the overall gross margin, what happens is, in the case of the boards, there's an operating deleverage. In the case of the spinning, there's an operating deleverage. And therefore that is getting reflected in the gross margin. The price increase has been predominantly in the [indiscernible] division, right? That is the main reason for this to show up like this. And it's not that actually raw material costs has not gone up significantly, there's only a marginal increase. That is because of the cement price there holding a little higher in the first quarter. Other than that, there is no worry on the raw material cost. It is only a marginal increase. And the increase in the cement prices were much higher. Only thing is when once boards and spinning operating leverage comes back to normalcy, you will see the full impact of reduction on the gross margin.

Okay. So going ahead, you are saying the realization will sustain?

Yes, that's what we think. The realization in the asbestos sheet will sustain. And in the case of the boards also, some amount of increase in realizations have taken place, which can increase further. And the volume, especially in spinning, this one, the volume will ensure that a lot of contribution is seen.

Okay. So going ahead, for the year the gross margin is expected to be even better compared to 51%, right now?

That's right. That's right.

Okay. And sir, secondly, on the other expenses side, so if we see the June quarter last year, the Other Expenses was almost 26% of the total revenue. And this year, it is 21% of the overall revenue. And on absolute terms also, it has decreased substantially. So what I'm trying to understand is how much of this reduction in Other Expenses given the COVID situation can be sustained post normalization?

See, the Other Expenses contain costs like consumables [indiscernible] and price costs, et cetera, right? So the volumes are less both in the boards and the spinning and the shipment of the [indiscernible] in terms of volume numbers, the price cost is flat. And therefore the cost will come down. Similarly in April month, June month, we lost production. Therefore, there's literally no cost incurred at all at the plants for 1 month, 2 months, right? But of course we also didn't have the benefit of the production, and therefore this quarter, that amount of cost -- some amount of cost is incurred. Similarly, production also has been [indiscernible] consumables and even power there. So some of these costs will definitely come back. But of course, salary expenses again recur. So some of the costs will increase but otherwise because of the initiatives that we have taken, at least 20% of the cost will be a constant reduction, will be a permanent reduction. Rest of the cost. [indiscernible] what you call the margin -- as the volumes and all the business returns to normal.

Okay. So going ahead, the total proportion would be lower by around 20% you are saying?

Yes, it will be there. Because the kind of cost reduction exercises we have taken, in a sense, we have gone so deep into it. And it's something like many people are saying that COVID has taught us how to live life all over again. How we are in a rat race, how we are doing -- we're losing life and doing a living. And now how we have to live in a proper organized manner. Similarly, we use the same opportunity to re-search the company and what we have done all this days and where we stand today, and then we have set the reset button in terms of that. And therefore that means a radical change in the [ total business ].

Okay. Sir, and secondly, I wanted to understand the CapEx in the board segment, the Tamil Nadu plant, which is 50,000 MT, is it on track given the real estate is slowing down?

JMD garu, would you like to answer that?

Yes, yes. We are going ahead with the plant actually. We'll be looking at maybe sometime in September. There's definitely a delay in terms of our original planning of wanting the plants up and running by March 2021. Maybe by about a quarter or 2 is what we are looking at the delay. But the project is on because we see that the demand for boards should not be impacted once the regular business starts again. So yes.

Okay. So by September '20 -- sorry.

Sorry, please go ahead.

Yes. So you're saying by September '21 we can expect this to come on stream?

Sure, sure.

Okay. And sir, thirdly, on the synthetic yarn, given that you are saying Bhiwandi will open in 2 days. So till now, what has been the status in terms of volumes and for the entire quarter what do you guide?

So to be honest, we were really trying to push as much as possible wherever the markets were opening, but we could achieve hardly about 40% to 50% of our normal sales in the last couple of months. In fact, even in one of the months we did less than 40%. So we are trying to get back to as much normalcy as possible. But going forward, I feel we should be able to touch maybe 70% in Q2 if the markets open up on track because we are still seeing a lot of uncertainty. Few markets have been extending their lockdowns in the red zones and all of that. So with a conservative approach, we are expecting maybe about 70% is what our assessment is so far.

For the entire...?

Vepa, if you want to add something, please do.

Yes. To add on to that, and I must tell you that for the boards, the export market has been pretty good. We are able to export well. So that is partly helping us to make up. Even in boards, I think, last year, we have done [ deferred ] exports. So the exports are supporting and export markets are reasonably good. The price has also been reasonably good in the export market for both yarn and as well as the [ board ] export.

Okay. Sir, what proportion would be export of our entire sales for Q1?

Q1 exports have been 33% of the first quarter sales in the spinning. And in the boards and panels...

It will be about 30% as well. 25% to 30%.

Yes, it must be -- it is around 30%.

Yes.

Okay. Sir. And lastly, one last question. So on the roofing side, because the margins have increased, do you see any additional capacity coming up in the market?

No. I think we need to understand the current dynamics of how the Indian rural roofing is changing, especially because of the steel prices impact and all of that. We don't see that the demand of roofing will exceed our existing capacities because we are still under capacity utilized in terms of the existing facilities that we have. But we see a stability in terms of the next 3 years going forward. I don't think we'll be needing any expansions in the roofing business.

Okay. Okay. That was helpful, sir.

[Operator Instructions] The next question is from the line of Amit Vora from PCS Securities.

Congratulations on a very strong set of numbers. My first question is, having been already in Q2 and we are already in August 1st week, has there been a demand spillover into the July month for the roofing segment? Are we seeing any demand there? Generally, Q2 is a leaner quarter? That's my first question.

No. Actually, we are seeing the same trend. I think the first quarter itself saw the demand where the shortage was in the beginning of the year. But Q2, the way the demand is, it is in similar trends as any other off-season what we've observed.

Okay. And what would have been our market share in Q1, if there is a number that you can put forward?

I think market share point of view, we should be in the same stage. Actually, all the -- the whole industry has done their maximum efforts. So the market shares will not have changed much in terms of our existing things. So we should be around 19% to 20%, I think, is what we are currently at.

Okay. Yes. And the last question is, what is the CapEx that we have? I'm sorry if I'm repeating this, if I would have missed it. What is the CapEx for this year that we are planning?

Sorry, I didn't hear you. Vepa, yes, please.

Amit, the total CapEx will be more for the -- NIM CapEx will be for the new unit in Coimbatore, which will be about INR 80 crores. That's a normal CapEx of maximum of INR 10 crores, INR 15 crores because this is not a period in which we're going to incur CapEx so liberally. So -- and even this should get spread over a period of 2 years, FY '21 and FY '22. So that would be the CapEx.

[Operator Instructions] The next question is from the line of [ Anthony Phillip Joy ] an individual investor.

Sir, I would like to ask you is that is there any new geographies that you are looking at in terms of roofing -- in terms of the ATUM products that you have?

Vamsi, your call.

I actually got disconnected. I just joined back. So I'm afraid you have to just give me a recap of the last 30 seconds, please.

So you have introduced a new product called ATUM. My question is, is there any new geographies that you're getting into with this product?

Yes, absolutely. So I think -- thanks for asking this question. I think I missed mentioning it earlier. So early this year, we had launched ATUM in the U.S. So the certifications that we were telling you about earlier in terms of UL and IEC, so we are now clear to sell anywhere in the world. And we've actually done some exports to some parts of Africa. And we are in talks with people from Dubai, from Singapore. And the U.S. is actually in a heavy, heavy crisis in terms of homelessness. They really need fast, affordable and sustainable homes. So we had an opportunity to launch ATUM in the U.S. in Jan and the unfortunate situation like the whole world, COVID hit us, but we are exploring all the leads in America quite seriously. We are in touch with Habitat for Humanity as well where they are in talks to use ATUM. So yes, we are looking at new geographies for that.

So which means the company should be having a patent for this. And my question is what could be the margin that we can expect from this product? And what is our market share at this moment?

So first of all, regarding patents, we've actually filed for patients almost 2.5 years ago. Since the idea was -- came to life. And patents normally take about 3 to 3 1/2, 4 years, depending on various circumstances. So we are waiting to hear more on that. Coming to market share, we have to understand that this product is a completely new category. We are actually innovating the category itself where the roof generates electricity. So talking about market share, we'll be very negligible if you compare to solar and the roofing industry as well. So we have to wait and see in terms of how the actual offtake of the product happens. Like we said earlier, the first year just got in about $1 million in revenue for a product category that didn't exist the previous year. So we definitely see a good offtake in the product this year as things open up. So I hope that answers your question.

The next question is from the line of Dhiral Shah from PhillipCapital.

Sir, in your opening remarks, you have stated that the cycle of building product have reversed and you see a good growth in the next 3 to 5 years. So what gives you that confidence, sir?

Normally you see the rural story, if you have seen the rural markets have been very badly affected. In fact, the overall economy was impacted in the last 3 to 4 years. It's gradually coming down. And in that, the worst suffering is the rural market. We have seen lots of deaths being reported, lots of what you call, dharnas, being done by the labor in Delhi and all that market, in the capital city of Delhi and all these things. Now suddenly, the -- even this current year's rainfall has been normal. Last year's crop has been good. Now the Rabi sowing is very good and the government is pumping in a lot of money. And therefore the rural economy is suddenly, again, realizing -- I mean, is receiving a lot of attention, both from nature and from the government. And that's what is going to happen. And not only that, because of the lot of migration of people from the urban part of the city country to the rural country, if you see the balance of population urban to rural, actually earlier the rural population was going on shrinking and therefore the number of mouths to feed and the hands to work are also coming down. But now what happened suddenly there is a surge in rural population and there is a reduction in the urban population. Therefore it's going to be an all-in-all rural consumption story for this year. And this story once it happens, it takes time for it to again change because lots of things in the economy have to readjust and change, for people to get confidence and again get into a different mode. So now people are in a better mode and due to the government supporting the rural economy and all that. So normally this is how this thing is, and this is what we have seen umpteen number of times in this business. In 33 years I have seen actually 5, 6 times this happening. And therefore once the cycle turns, it takes another 3 to 4 years for it to again adjust. Because initially margins rise, then volumes also rise, then maybe some capacity additions also could take place. Some people in a hurry seeing the opportunity may add capacity. And then suddenly again urbanization, people coming to urban cities. Again more industrialization in the urban side happens. And then the demand will come down there and all the big things will happen. So it will take at least 3 to 5 years for this whole story to change. So there are too many factors working in favor of the rural country. And that is the reason why we get the confidence that what we have seen now is not just a blip. It is going to be a sustainable story for some time to come.

I'd just like to add a point here to the question is, with the whole COVID situation and the last year's plastic awareness that our Prime Minister Modi has raised about, going green, going sustainable, I think lot of attention spillover has come to construction for sure. We've seen a lot of inquiries now in terms of what the product is. So the homework that we've been doing over the last couple of years is actually coming to light today. People are paying attention to date in terms of saying, oh, there's a product that is using lesser water, lesser cement and is faster to construct, need lesser labor to finish the work. So that we are seeing a good positive light for products like Vnext. Not only that, most governments today are looking at LGSF constructions, that is light gauge steel framing construction, which is where Vnext plays a very important role. Even the new parliament extension buildings that are coming up, Kerala government buildings that are coming up, all are being now specified to use products like Vnext and using LGSF construction. So that is definitely a positive sign for the Vnext division. Apart from that, from ATUM point of view, as Mr. Vallinath rightly said, even in COVID lockdown, we actually closed orders because people are seeing the benefit of having a roof, having an additional floor on top for no extra cost at all. And a very interesting case study to share, one of our clients who we installed ATUM for, for a beauty hair salon, she actually got a bill of negative INR 16,000 during the lockdown. What that means is that the power generation, which was happening with ATUM was not consumed and had actually added revenue for her. So these kind of experiences we are seeing with clients and we feel that it only has to increase going forward.

Mr. Shah, you have any more questions?

Yes. Yes. So what is the industry growth rate of roofing business historically and what kind of growth rate you expect in coming years then?

See historically asbestos business has not been growing, it has been degrowing, right, in the last 2 to 3 years. But now I think we will see uptick in growth. So what would be the number? Yes. For the time being, the emphasis is on margins and therefore we will not be too greedy to put both margins and volumes. Therefore, volumes come as -- basically underlining the dynamics and the factors which are driving the kind of sales. And as we go ahead, I think we'll be able to really assess how much of the growth will come. And once -- at least by the end of the second quarter, when once we could establish the full trend, then we'll be able to come out with a clear number of growth projected for this year and the subsequent years. But the downtrend has been arrested both in margins and volumes. Margins are going up to record highs and volumes downturn has been totally arrested. In just 2 months, with 33% loss of time, we have only dropped sales by 19% is an indicator that demand has been good. And I'm sure that this will continue. And ultimately it should translate in some growth. But the focus will be on margins.

You talked about antidumping. This is on which product, sir?

Steel. Steel sheet is one of the competing products, color-coated steel sheet. There's a lot of negative campaign thinking that steel sheet will give cooling effect and all that is in advertisement. And now one is the imports from China are being discouraged. We all know that, all products. And the second thing high antidumping duty on China and some antidumping duty on Vietnam also for the color-coated steel coils. So those coils are imported at very cheap rates. The Indian produced -- steel produced in India will be expensive. But steel imported from other countries is cheap, and they are coming in with cheaper imports. And that to some extent is luring the customers despite the fact that they are not a good substitute to fiber cement roofing for a residential accommodation. And another thing I want to add actually here, though I don't have any interest to support, so far, all the Whatsapp messages, all the guidance that we are coming is -- we are getting is, sanitize the cloth, sanitize the gloves, sanitize the nose mask, sanitize bottles, sanitize vessels, sanitize sheets, sanitize steel items, zinc items, glass items, but no one ever told me sanitize cement item. No one told me to sanitize my walls. No one told me to sanitize my floor. So that gives me a feeling that mainly COVID stays longer on steel products rather than on a cement product. And even that, I think, as the customers understand that this product is a much better product, one more factor like this, I think the sales should pick up. But we are not carrying forward that as a business campaign because we don't have any research to support, but on very anecdotal event and information that is being circulated through various source.

Okay. And sir, lastly, this realization which has went up, so is this in terms of cement prices going up or because of the shortage of our product?

Because of the demand.

Okay. Because of the demand. Okay. Okay.

The next question is from the line of Siddharth Rajpurohit from JHP Securities. Siddharth, your line is in talk mode. Kindly go ahead with your question.

Hello, am I audible?

Yes, you are audible.

First, congratulations to the team for a very strong result in a very difficult time. Sir, my first question is, what was the increase in realization in boards and roofing both year-on-year and Q-on-Q during the quarter, sir?

So the realization increase is about 6% year-on-year. It also is the same for quarter-on-quarter because there was some jump in the prices in this quarter. So the prices have been little stable over last year. And this year, the price has gone up by about 6%.

Okay.

You are asking about boards? You are asking for the Vnext product, right?

I want both, sir, for boards and roofing.

Roofing pricing, roofing has gone up much higher, about 14% is the price increase, realization increase, but the boards is about 6%.

Okay. And this increase is sustaining, sir, right?

Yes, that's what we think. Yes.