BirlaNu (NSE:BIRLANU) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to BirlaNu Limited earning conference call. As a reminder, all participant line will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation conclude. Should you need assistance during the conference call, please signal an operator by pressing star then 0 on your touch tone phone. I now hand the conference over to mister Mish Shah from CDR India. Thank you, and over to you, mister Shah. Thank you, Dhanush. Good afternoon, everyone, and welcome to BirlaNu Limited's q one FY twenty seven earnings conference call for investors and analysts. Today, have with us mister, managing director and CEO of the company, and mister chief financial officer.

0:46 We'll first have mister making his opening comments, and he'll be followed by mister who will take you through the financial perspectives that lie ahead. Before we begin, I have to point out that certain statements made in today's call could be forward looking nature, and details in this regard are available in the earnings presentation, which have been shared with you earlier. I would like to invite mister Tate to present his views on the performance and strategic imperatives. Thank you, Anu, to you, sir. Thank you, and good afternoon, everyone. It is a pleasure to welcome you all to BIRLANU's quarter one FY twenty seven earnings call. Amidst, one of the most volatile external environment, headlined by the Middle East conflict and its impact on global supply chains and pricing, I'm happy to say BirlaNu has delivered a strong quarter, delivering on both growth and profitability.

1:44 This performance was enabled by the efforts over the last couple of years to strengthen our product portfolio, sharpen our execution engine, to drive operational efficiency, and to build brand salience. Quarter one performance, as it was for quarter four last year, is a visible impact of these strategic initiatives, and we will only intensify the pace of this transformation in coming quarters. The India business has been off to a great start in FY twenty seven. We grew our revenue base by about 11% to rupees $8.33 crores, while EBITDA grew by 71% to reach rupees 98 crores.

2:35 As you can see, margins have improved by about 410 basis points over last year. This is headlined by the pipe segment where our margins expanded by six sixty basis points, nearly 7%, and roofs by nearly 4%. With double digit margins and growth, this quarter demonstrates our stated objective of value building growth. The key highlights of this performance include, in the roof segment, we broke all previous records crossing the rupees 500 crore mark for the quarter. In fact, we did 517 crores to be precise, which represents a growth of 17% over last year.

3:24 We reinforced our leadership position and increased our market share by about 1%. From a cost perspective, despite inflation, disciplined cost management and operating leverage translated into a margin expansion of nearly 4%. The wall's business continued its strong momentum with revenue growth of over 14%, led by robust demand across both panels and blocks. Focus market development initiatives and stronger sales execution across customer segments supported improved realizations, which together with disciplined cost management drove margin expansion by nearly 3% to 70 basis points to be precise.

4:19 The pipes business navigated an exceptionally challenging market environment during the quarter with sharp swings in resin prices. You recall in March, there was a price rise of nearly 60%. This was followed by a decline of about 30% in April, which resulted in sharp decline in demand particularly in the month of April. Despite these headwinds, the business demonstrated strong execution, delivering one of the strongest margin improvements within the portfolio with EBITDA margins expanding by over six sixty basis points. While sales rebounded strongly through May and June on the back of disciplined pricing, focused market execution, and cost management.

5:09 Construction chemicals was the business that was most adversely impacted by the Middle East Conflict. Our key raw material prices increased by over 50%, while disruptions across customer industries. For instance, industry was badly impacted, and project execution led to a temporary slowdown in demand across several application segments. Despite these headwinds, we delivered 11% revenue growth supported by focused sales acceleration initiatives and a significant expansion in our portfolio. This trend in our presence across high growth application segments and broadened our customer reach. Moving on to Paradox, where despite the Middle East crisis and the demand slump that was introduced or induced by that crisis in our core European market, we did well to sustain revenue at last year's levels.

6:13 The order book is healthy. It is up over 10% over last year, and the pipeline indicates a strong recovery in h two. Profitability was impacted due to cost pressures and less than projected revenue trajectory. We are confident of an improved margin profile for the rest of the year with a few of value enhancement initiatives in place, including a focused cost out program being led by BCG. You recall last year, we had done a similar program with BCG for the India business, and now we are doing the same thing for Parador. This short term turbulence aside, Parador is making rapid strides in its strategic build of new markets, especially US and India, new customers, especially in the commercial channel, and deepening its core, the DIY and retail in Europe.

7:13 At a consolidated level, the revenue for quarter one grew by just short of 12% to rupees $11.74 crore, and the EBITDA improved significantly to rupees 80 crores, which is about 35% higher compared to previous year. Before I close, I also want to share the progress on some of our strategic initiatives. Our strategic capacity expansion program will add a new chapter with the approval of a new boards plan near Hyderabad to supplement the green free... Green... Greenfield plant being constructed in. This reflects our confidence in the long term growth opportunity within the premium boards category.

8:02 Our innovation engine delivered a slew of next generation products in waterproofing and repair and rehabilitation segments of our fast growing construction chemicals business. To further our sustainability agenda, we recently commissioned additional solar capacity manufacturing facilities, while simultaneously advancing the next phase of renewable energy investments across our operations. We have also commenced implementation of our enterprise wide AI road map, combining targeted business use cases with capability building across the organization. Looking ahead, while the year has begun on a very strong note, we remain mindful of the evolving external environment.

8:53 Geopolitical uncertainties continue to persist, raw material, freight, and currency market remain volatile. And in addition, labor costs are showing an upward trend. We therefore remain disciplined in our approach and will continue to respond with agility as market conditions evolve. At the same time, we exit quarter one with the confidence that we will continue this momentum for the rest of the year. With a stronger portfolio, improving operating leverage, and a relentless focus on execution, BirlaNu is well positioned to deliver sustainable, profitable growth while continue... Continuing to create long term value for all our stakeholders. With that, I conclude my opening remarks, and let me hand over to Ajay to take you through the detailed financial and operational performance for the quarter. Ajay, over to you, and thank you.

9:49 Thank you, and good afternoon, I'll now walk you through the business and financial performance for the first quarter of FY twenty seven. While the quarter was marked by continued volatility across key input markets and inflationary pressure across certain cost categories, we delivered a meaningful improvement in earnings and margins, reflecting our relentless focus on cost optimization and execution excellence. Let me begin with the headline numbers. On a stand alone basis, revenue increased by 10% year on year to rupees $8.24 crore, while EBITDA rose by nearly 70% to rupees 97 crore. EBITDA margins expanded by over 420 basis points, supported by stronger realizations, manufacturing efficiencies, cost discipline and thoughtful execution.

10:44 On a consolidated basis, revenue grew by 11.6% to rupees 1,174 crore, while EBITDA increased by 35% to rupees 80 crore. Turning to the businesses, I'll start with group's business, which has delivered another excellent quarter with revenue growth of 70% and markets and markets are gain of about 100 basis points. EBITDA margin improved by three ninety basis points to 18.2%, supported by stronger realization, improved volume sales, and favorable operating leverage. The wall's business reported 14% revenue growth with healthy volume expansions across categories, improved realizations, higher capacity utilization and the benefit from the cost optimization initiatives implemented over the past year contributed to EBITDA margin expansion of two seventy basis point to 10.2%.

11:47 The pie business experienced an unusually volatile quarter due to abnormal movements in PVC resin prices, which materially impacted channel offtake, particularly in the month of April. Consequently, revenue declined by 11%, while volumes were lower by 27%. Net sales realization improved during the quarter, primarily due to lower share of agribies in the sales mix. Despite these headwinds, EBITDA margins expanded by six sixty basis points, driven by an improved product mix, procurement efficiencies and disciplined pricing actions. With government interventions facilitating stabilization in PVC raising price, we expect demand conditions to improve and anticipate moderate growth during the seasonally weak quarter two.

12:40 Construction Chemicals recorded 11% revenue growth despite significant inflation in key raw material prices. The business continued to expand its distribution footprint and customer reach, strengthening the foundation for sustained growth. Moving to Parador, revenue remained broadly stable on a year on year basis in euro terms. EBITDA stood at a loss of rupees 13 crore compared with a profit of rupees 5 crore in the corresponding quarter in last... Quarter last year. The decline in profitability primarily reflects elevated raw material cost, one times SAP migration expense, and certain planned maintenance and refurbishment activities that were advanced to the first quarter from subsequent quarters.

13:27 These timing related costs are expected to normalize in the second half of the year, supporting an improvement in profit... Profitability. Beyond our operating performance, we also advanced several strategic and financial in it... Initiatives during the quarter. During the quarter, the Board has approved the establishment of a greenfield designer board manufacturing facilities in Hyderabad with an estimated capital outlay of rupees 167 crore. This investment expands our manufacturing footprint in the premium board segment and further strengthen our positioning position in a margin accretive product category. Turning to the balance sheet, cash generation and capital efficiency remained key areas of focus.

14:14 Through targeted initiatives across receivable, inventories and sourcing, we reduced approximately rupees 100 crore of working capital on a year on year basis, resulting in improved operating cash flows. I am also pleased to share that gross borrowings reduced by nearly 100 crore during the quarter from rupees $8.52 crore as of March 26 to rupees $7.58 crore as of June 26. We remain committed to maintaining a prudent capital structure while funding our approved greenfield and capacity expansion projects. As these projects are commissioned and begin contributing to earnings and cash flows, we expect borrowings to reduce progressively over the time. Overall, the quarter reflects the progress we have made in strengthening our operational and financial performance.

15:03 We remain committed to building on this momentum through sustained operational improvements, prudent financial management and long term value creation. With that, I conclude my remarks and hand the call back to the moderator to open the floor for questions. Thank you. Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on the telephone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are request to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Reminded all the participant that you may press star and one on their touch tone telephone in order to ask a question.

16:04 The first question comes from the line of Singh with My Equity Share. Please go ahead. Yeah. Thanks a lot. Am I audible? Yes, sir. You are. Yes. Yeah. Thank you. Yeah. Thanks a lot. So so, Akshat and and our CFO, I was going through the latest annual report. And I see that regarding our borrowings, we talk about some covenants which we could not honor in 2026, which in turn we took waivers from banks. So could you talk about it, what it was, and what we did around it? It is primarily debt equity covenants, which we could not make, and that is the reason we have taken waiver from the bank.

16:50 Okay. So in 2025, we did with two banks, and now I'm seeing, I think, six banks is given. So what is our thinking on borrowing overall? Like, how it will progress? So as of March 30... As of March 26, our borrowings were $8.52 crore. As of now, we are at $7.58 crore. So we reduced our borrowings by close to 100 crore during the quarter. Okay. And and going forward, how you think about it? Like, it will remain like this or we may take some more or there is a plan to further reduce it? In short in short... Near to short period, it will remain at the elevated level since we have announced couple of greenfield projects. One, we announced last year, Nelor Birla plant. And in yesterday's board meeting, they have announced Hyderabad board plant.

17:44 But, however, there is a timing difference. And our board plans will start giving us profit and cash from from end of the... End last quarter of this year, starting of first quarter of next year. So that will help us to repay the borrowings, and that will help us to fund for the new CapEx. Okay. That that helps. Yeah. Thanks a lot. And, Akshat, I would like to know your views on Perador in particular. I I know that numbers are yet to come on on PNL and all because of various headwinds. But but being in your seat and seeing the system very closely, how do you envision it in next two, three years? You think that that will be a good outcome if it unfolds with time? See, I think...

18:33 I don't know if you've been part of some previous calls. We've also laid out what are the blocks that we have been pursuing for growth in the Panadol business. At the moment, where we sit on the... On last year's revenue base, and I'm not reacting to short term month on month or quarter on quarters, some turbulence that might be there. But overall, there is there is now emerging line of sight for adding about at least 20 to 30,000,000 over the next couple of years on the revenue side to that base. Now that is coming through the investments we have made in building the commercial channel in US, in markets like India and also UK, Middle East.

19:27 And this is now basis pipeline and the advanced cases where we have put in quotations and they have been specified. So there is line of sight on that. And that... So that is one. Secondly, of of our DIY channels in across Europe. There... And that has been a strong reason why despite the growth in the market this quarter, we have maintained our revenue because we've been, again, increased our share on those DIY channels and growing beyond just the Germany theater. So that will also play out. And fine...

20:14 So so... And finally, there are... There were some markets that we had in Europe, places like Italy and some some markets in Eastern Europe where, again, order flow has started coming in. So those three put together give us that line of sight of that revenue increase. Now at that level, what it does is just given our breakevens and our p and l leverage starts flowing in, and there is also a decent level of profitability that starts coming in. So that is what we are putting fight for. And at the same time, there is work happening in further optimizing the cost structure.

21:01 I mentioned in my opening remarks that we have engaged with BCG for a similar program as we did in India, which is to essentially bring cost out of the system. Our expectation is at a conservative level that should deliver at least 300 to 400 basis point uplift on the EBITDA side. So there is line of sight on revenue. There is work happening, further work happening on the cost side, and I think there is... We are on the the the healthier outlook that you are looking for is on the horizon. Yeah. That that helps,. This is my first conference call with this company, and and I I admire your thought process. I have gone through all your previous communications.

21:48 So so I ended up learning a lot about this business and in general, like, what is your thinking about this business. So thank you for that, and I think I'm all set. Thanks a lot. Wish you all the best. Thank you so much,. Thank you. Next question comes from the line of Shlok Akoya Shlok Akoya with Xylem. Please go ahead. Yeah. So, sir, my question was also on. So just wanted to understand, like, more about how do we expect the BCD initiatives to come in? Like, what's the timing for that? So the timelines, we've already completed the diagnostic phase. The design phase was... Is underway by...

22:41 And the implementation, etcetera, is about the four month exercise. So in in about four to five months, I... Okay. The first results and impact will start becoming visible in... Within this... By the end of this quarter, and then they will keep rolling for maybe another three months. So q four of this year should have visible impact on the p and l. But many of those will start building gradually over over the next three to four months. So the October to December, there will be a buildup, and the full impact should be visible around the q four mark. Okay, sir. Thank you. All the rest for the year ahead.

23:28 Thank you so much. Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and 1. Next question comes from the line of from Securities Investment Management. Please go ahead. Yeah. Hi, sir. Thanks for the opportunity. Sir, first question was on the boards and the panel segment. If you could just talk about what is happening in this industry because if I look at your commentary and the kind of feedback we are doing, it seems that this seems to be a strong growth segment for us. So if we just talk a little bit about what's happening in this segment, what is driving growth in this segment, and what kind of utilization we are working currently.

24:27 Right. So... And your question is on the board segment, which is today, roughly anywhere by anywhere between 1,500 to 2,000 crore industry segment, but growing at any close to 10 to 14% growth rate year on year. The segment is also attractive because it sort of offer... Affords a higher margin profile. So most players in the industry are operating in the high teens as far as margin... Operating margins are concerned and probably even more. The... It's a segment which also is interesting because it affords differentiation on the products and playing in the previous segment. So there are basic boards, and then there are value added products like high density boards, designer boards, etcetera, which afford a greater level of differentiation.

25:32 We believe we have a right to win in that segment because so far, we've been capacity constrained. We've been operating at nearly 80 to 90% of our capacity. So we are jock a block. We have a right right to win because on cementitious product, it follows a similar product composition as in in the fiber cement industry. So there is a lot of resident knowledge about the product and our ability to differentiate and innovate on the product. Plus, we also have the market access to the customers because we are serving the same customers for our other wall wall products, whether it's block or panel.

26:21 And that's why we feel very confident about our prospects. And, hence, the two capacity additions that have been announced, one earlier, which is in Andhra Pradesh, we are expecting to commission that plant by q four of this financial year. And then the new project that we are pursuing where we got the board's approval yesterday, that will be in Telangana. So that's where we are sort of hedging capacity, plus there are smaller brownfield capacity additions that will happen at our existing plants. So so so from our perspective, it is... It's a segment with the new capacity additions that we have announced over the next couple of years.

27:15 By the time these capacities come in and we are able to ramp it up, it will inject close to a revenue upside of about 300 to $3.50 crores, and hopefully, EBITDA uplift north of 75 to 85 crores. Does that answer your question? Yes. Sorry. Your line is not clear. Hello? Yes.. We cannot hear you. You may please rejoin the queue. Thank you.

28:13 Our next question comes from the line of Sai Kanesh with Square, sixty four Capital Advisors. Please go ahead. Yeah. Can you hear me? Hello? Yeah. Your voice is not clear. Is this here now? Not really, miss.. Dennis, are you able to hear me? Yes. Yes., you may please proceed with your question. Okay. A couple of questions on the roofing side. You have reported a 70% PBT margin in the case for the q one FY twenty seventy six. Well, our peers are in line with our our margins.

29:01 But before we grew 20, 25% plus EBITDA margin, if you look at the 05/2223, at that time, our peers used to do 17, 16, 17, but the margin. But now, peers have started recording 17% margin, but we are still searching at 17 range. I... I'm not 100% sure of which peers you are talking about, but I would request you to also just try and do a deeper analysis of the peer results because a lot of our peers have in the last three or four years added boards in their portfolio, and that numbers that get reported are a consolidation of boards and roofing.

29:53 Whereas the roofing numbers you are talking for us are pure play roofing numbers, and we have not sort of with our board's number. I don't understand. And boards boards margin would make the same currency. Slightly different, yeah, slightly different understanding at our end. So I'll I'll request that you do have a look at that. Boards for most players are delivering attractive margins, which is what I covered in the previous one as well. But I'm happy to say from a roofing perspective, overall, while the... There there has been a strong improvement in the EBITDA margin compared to last year.

30:39 I think the base you are talking about is three to four years old. Different industry dynamic and different input prices at that point in time. So it's a slightly different one, but happy to say that overall, it's been a good quarter from a margin point of view, and there has been a significant improvement. Okay. And is there any inventory gain or such that one off? There is no one off, right, in our booking margin? No. There are no one offs. There was... There are no inventory gains or revaluations that have been done. So these are pure operating numbers. Okay. Okay. That is all my. Thank you. Thank you, sir.

31:26 You. Our next question comes from the line of with SMIFS Limited. Please go ahead. Yes. Hi,. Thank you for the opportunity. We have done exceptionally well on the leasing side. We have done exceptionally well on the leasing side. Right? 17% growth is come after a gap of so many quarters. So just wanted to understand what has been the growth drivers, and how would the secondary sales on the? So on secondary sales, overall, all of this is secondary because this is this is a period where there there are significant off takes, and this is not a product that has good stocking. So stocking for us happens only in the q four period or q three... End of q three.

32:24 This is a season where there is a strong secondary momentum. So I would call all of this as secondary for this period. What has contributed overall, there has been buoyancy. I think the rural demand was strong. There was price support available. So overall in 17%, the volume growth is nearly 10%. What also held was our closest competition as a substitute product. The steel sheets were at an elevated price point. So there was increased demand for for the fiber cement tools.

33:10 So those were some factors that played out well. And, overall, there was buoyancy in the industry. Understood. And as you mentioned that we have done quite well on the working capital side, and there has been a reduction of about 100 crores. So just can you talk about what efforts have you been made and how much of the discussion? No. No. Working to put this. So, Rob, we have we have worked on two areas. One is the inventory side. We used to carry a large stock of fiber. We have substantially reduced our fiber stock in last six to eight months. The other side on on receivable side, we have tightened our controls on giving the credit, and that has resulted into close to 30% reduction in our receivable numbers.

34:09 So one can safely say that both the things are sustainable going forward? Both are questionable. No. Sustainable. Yes. Yes. Yes. Yes. Yes. Yes. That's good. Yeah. Those will be two questions from my side. Thank you. Thank you, sir. Thank you. Our next question comes from the line of with Securities Investment Management. Please go ahead. Okay. Hi, sir. Thanks for the follow-up. Sir, continue with the moves and challenges. If you could just help us understand, is this a replacement product?

34:56 Like, it's... We are replacing plywood or the system? And if yes, so what is generally the advantage of this product as compared to substitutes? So it it has a broad range of substitutes. So these are used for between panels and boards. They have applications in creating walls. So these are drywall applications. They help in creating room room partitions, etcetera. Boards additionally have the application of using as threading, whether for internal or for external applications. There are a range of products in that category. So, yes, chips and boards, etcetera, and one traditional walls are the other substitute.

35:50 The advantage is the faster fabrication and application. So the time involved for construction goes down. The cost, it is a cost effective product. And third, the thermal and sound insulation properties are great. There is also fire retardant properties that the product offers. So that's a broad overview. I didn't have you tell me a question. No. I'll ask the call.

36:39 Hello? Is there a person follow-up? Hello? Are you audible? Yes, sir. You are. Yeah. Let's hear. Now you are audible. Yeah. So I was asking, is it usually used in commercial application, or it is also used in residential? Larger adoption in commercial, but it is used equally in residential as well. So the adoption is increasing in the residential segment as well, But the penetration level is higher in the commercial applications. Understood. And, in this 1,500 or 2,000 crores market, is it needed to dominated by organized or the share is also quite large? No. So it's not a easy product to manufacture.

37:28 The CapEx intensity is also fairly high. It's largely dominated by by organized players. So there are only five to seven players of note in the industry. There is also a good 15, 20% share of imports currently into the country. Got it. Got it. And, sir, you mentioned that the margins in the segment are, say, close to mid teens for for the industry as a general. But when I look at your EBIT EBIT margins, which we give in segmental, our our margins are in the, you know, mid single digit. So why is there such a sharp contrast between us and the industry?

38:18 So I play currently... I was talking only about the board segment. Our wall segment today is a combination of boards, panels, and blocks. Our blended margins reported this quarter are about 10 to 11%. Stand alone board plans tend to upgrade, and especially the new ones tend to operate in the 15 to 20% range. Understood. Was currently making very low margins? Was currently is now finally in a double digit zone, and there's again been a two to 3% improvement over last year. This has been one of the strategic pursuits we've been making that the rightful zone for our wall segment from a profitability point of view. Our current portfolio is in the zone of about 12 to 14%.

39:24 I'm happy that we have broken into the double digit zone, and there is further headroom for improvement there. So I think we are now 80% where we should be given the portfolio we carry today. And I'm not counting the impact of the new capacities that will further pull this margin up. Got it. Got it. And, also, coming to, I think you mentioned in the opening remarks, there was some one off cost this quarter. If you could just firstly quantify the fee. Yeah. So broadly, two buckets. There were some IT upgradation projects and enhancements that were planned earlier, which were executed in this quarter. So that is one time in nature, essentially, to do with our SaaS systems and and a couple of other things.

40:23 Then there were some repair and maintenance spends, which were front ended at the start of the year, those will get normalized over the rest of the year. So they were essentially... Given that we take shutdowns in quarter two, they were front loaded into quarter one for for booking the orders. So those are the two major ones. Understood. And if you could quantify the amount? So together, these two will account for about a million. Yeah. A million euros. Got it. Got it. And now, sir, now since you took over, in prior order, we were looking to change the revenue mix. So diversify, right, from Germany, get into more commercial applications.

41:23 So if you could just help us understand how have we progressed in the last two, three years since you took over in Canada? And in the next one or two years, how do you see this mix going from currently? Yeah. So commercial from being... In true sense, being less than 5% and the... These new markets again contributing again to less than 5%. We are earlier in to... In response to an earlier question, had mentioned that there is line of sight of adding about $2,030,000,000 of... On last year's revenue base. That would push the share of these two components to about 20% in the portfolio. So that's the outlook for the next couple of years on that front.

42:14 Understood. And now appointment of this BCG, so last two, three years, we had worked on our cost reducing the breakeven levels. We had also, I think, removed certain employees last quarter. So if you can help us understand what is... What more is BCJ expected to do in Cairo? So, yes, there's been a lot of cost out work over the last couple of years on that, and thank you for summarizing the the topic on which that has been done. You are absolutely right. The external advisers like BCG also help in bringing an additional layer of analytics and market benchmarking, which allow us to go deeper on these cost topics.

43:06 They are essentially working on four areas. There is a topic on pricing. There's a pro... Topic on procurement. There's a topic on SG and A. Operations. And finally, the last one is on operations. So just the analytic horsepower that they can bring and also the benchmark... Benchmarking that they can bring having worked with a wider set of players in the industry and across geographies typically end up being useful in these programs. So think of it as what we did was Horizon one savings, and now we are pursuing Horizon two savings. Understood. Understood. And lastly, sir, on the Polymer business, is the team codes now being recorded in Polymer only?

44:01 In stand alone, no. But in consolidated, yes. In fact, we have changed the segment name from polymer to pipes and construction chemicals. Yeah. Got it. So this improvement in profitability, how much of it is? Because clean codes is now being recorded in Polymers because I believe it was a high margin segment. It is a high margin segment, and that's why the performance at a stand alone level has recorded an improvement. So I will distinguish... Impact is... And the positive impact you talk about is independent of the impact of CleanCode. So CleanCode's addition only makes it better.

44:49 But even if we exclude that, there has been an improvement in the margin profile. Got it. Got it. So, sir, thanks for answering the questions and. Thank you so much. Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and 1. Our next question comes from the line of Vinit Joshi, an individual investor. Please go ahead. Hello? Am I audible? Yes, Vinit. Yes, Please go ahead. My question is that are we considering moving parallel manufacturing to low cost manufacturing location like India, especially in the wake of India, EU, trade deal?

45:40 Will it really help us to reduce our cost structure? Second question is around the debt to equity ratio. Are we looking at having some sort of a price issue to make sure that the debt to equity ratio is more reasonable, which we alluded to earlier in this call. And third point is regarding what is our right to win the EVC five segment. It already established players like Supreme and Astral and, you know, and so many others, which are already in the market, dominating the sector. That's all. Thanks. Go ahead. Do you want to take the debt to equity? Yeah. So debt to equity... Our debt to equity ratio as on June 30 is point six eight times, which is well within our manageable range.

46:31 As far as decision on right issue or other part is normally... Board is taking those decisions. So I will not comment on that side. That's Yeah. Sorry. What was the question on Parador? Moving manufacturing. Yeah. Yes. So it's a great question. At the moment, most of our manufacturing is out of our clients in Germany and Austria. Over the last twelve, fourteen months, we have been exploring options of diversifying... As we are diversifying our markets and global footprint, the need to diversify our supply base and building local for local is an important consideration.

47:24 In doing that, cost is one criteria, but... And I'm not talking cost of just the material, but cost to serve is the important criteria as we look at these new global markets. So those options are being evaluated, whether it is India or somewhere else. I think as these get crystallized, we'll share it with you. What it also does apart from a cost perspective is to give supply chain flexibility and derisk the supply chain in many cases. So it's an important strategic initiative that we are pursuing. Having said that, the most important criteria in these decision making is the quality.

48:10 There is a certain premium positioning that has, and there is a certain quality promise that brings. In these supply choices and options that we evaluate, that is an important go, no go criteria. Vineet, is that... Does that answer your question on? Yes. Thanks. I just want... Wanted to ask about, Okay. The right to win for PVC pipe. Yeah. Yeah. So PVC pipe market, overall, you would have observed over the last three odd years has been on a roller coaster. Having... And there are three or four things which remain fundamental to winning in this. One, of course, is the brand pull and the and the equity of trust that you can make with this product.

49:09 And that... There... We feel with the Birla brand, there is a strong equity that we have in the market. Remember, this is a product that people rely on because it's it's behind the walls, and it's in their house for the next several decades and not not just a consumable product, which is. Second is the quality of product. Third, in order to win with the channel, you need to have the product range. So range and SKUs is important. Fourth, from a execution perspective, channel access and deeper penetration in the sales channels and in the markets that we choose is, again, an important criteria. So those are the three or four areas where we feel, especially in our preferred markets and select geographies, we feel we have built the strength.

50:11 We also have the product range, and we carry the brand to be able to scale up in that segment. One more thing, how does the consolidation of BIRLANU brand help? For example, earlier, we had business. Now we have plus all of them on the brand. So does that help the cost for the? I think the feedback from the market, from the channel, and from our customers seem to indicate that there is a greater resonance of the brand across categories. And our ability to sell the entire portfolio rather than just one isolated product has increased.

51:02 I... And, like, with most branding decisions, it's... The correlation is hard to establish. Regarding the positive trajectory of the financial performance is also an indicator that there is some volume uplift we are getting because of those rebranding decisions. So that's a strong indicator, coupled with what we hear as feedback from the market point towards the fact that there is greater resonance of our basket of products and not just one product that people associate with. Thank you, and all the best.

51:49 Thank you, Vineet. Thank you. Our next question comes from the line of Akhil Akhilesh, an individual investor. Please go ahead. Hi. Thank you for the opportunity. So, Akshay, I've been following the company for the last two, three years, and it seems like we are finally turning up on us here. And I wanna congratulate you and your team for the work you've done best. I just wondered if you have growing confidence in the outlook now to let us know what are the possible targets for FY twenty seven on revenue and margin for the whole company. And also on the longer term target, which we had to double the revenue base to maybe 8 to 9,000 crores in the next two to three years.

52:38 Will it be possible within the existing verticals of the company? And what kind of capital allocation might that require in terms of growing capacity or else acquiring company? First of all, Achish, thank you so much for your kind words. As a team, we are excited at where we are. And in terms of outlook, I will only say, at least the last two quarters, we have been reaching targets. So any target I share with you is a hazardous one. I will only say that we we hope to continue the momentum of the last two quarters and continue to go beyond our internal targets as far as performance is concerned.

53:28 The larger vision of doubling ourselves, yes, I think we are constantly sort of pursuing that. Some of the announcements that have been done recently, including in yesterday's board meeting about setting up new capacities and investments in in that area are a step in that direction. I think what we know at this moment is over the next couple of years, there is close to 500 crores of CapEx that have been allocated to known named prog... Programs and projects as these opportunities, whether greenfield or inorganic, they crystallize, meaning, keep coming back to you and sharing that information.

54:15 But we are also confident that at the moment, capital availability is not a constraint, and we are in the market for interesting opportunities, which allow us to reach the milestone you spent out on an accelerated path. Yeah. And, sir, would you say that this is the year where Parador will breakeven on a full year basis? Because all the good work you've done on the other verticals, as you know, get diluted by, you know, the impact Parador has had over the last few years. So there's a lot of untapped potential in your company, but we... I mean, do you think that this is the year finally that BIRLANURE will stop working against us?

55:02 We are confident of that. Also, it's not a question of dilution or or or undilution. We are a multiproduct company. There will always... And the beauty of that is that there will always be some part of the portfolio which is outperforming, and it allows us to hedge through cycles geographically or across the products that we pay. So, yes, given the core markets of over the last couple of years, the market conditions were tough. I'm glad that in those tough conditions, we took tough calls to diversify and invest in newer markets, which are more resilient and which continue to offer a great promise.

55:51 And, yes, this year, the outlook is strong. We are looking at growth overall from a revenue perspective, and we are looking at more than breaking even this year. Okay. That's great to hear, sir. I'm looking forward to your numbers going ahead. Thank you. Thank you,. Thank you so much. Thank you. Next question comes from the line of an individual investor. Please go ahead. Hello, I'm now audible. Yeah. There is some background Hello. Manal. Yes. Sorry. Just just a simple question. Actually, regarding five, sir, if you are still in lower as of now. So despite the PVC prices have risen, what's the issue here?

56:52 Hello? Yeah. I'm not sure if I've understood your question. Hello. Am I audible? Hello, sir. I audible? I don't know. Yes, Mano. Yes, Mano. Can you repeat your question, please? Thank you. Yeah. Yeah. I sent a single question. Actually, regarding the five segment, they are actually, as of now, in losses. So I think that despite the prices have risen up front. What's the landmark you're going forward? Manav, actually, the PVC prices in April went down close to 30%.

57:40 Correct. You are right. And then I mean, the short term is now. Correct. So if if you recall quarter four, we had posted good positive profitability numbers, the previous quarter. This quarter, there was, again, sharp decline in prices, which led to decline in volumes, and I think that's been a trend reported by all industry players. So the numbers you see this quarter are somewhat impacted by the volume decline that has happened. But we believe this is a transient phenomena. And as we enter into q two, there are strong indications that, hopefully, the worst is behind us as far as the price levels are concerned. There are some measures that the government has also put in place, which has informing of the prices.

58:38 So those are good indicators. And the current momentum seem to suggest that the story of April should be well behind us. Thank you for the input. I I believe the same. Thank you so much,. Thank you. Thank you. Our next question comes from the line of with Square sixty four Capital Advisors. Sir, would you please go ahead? Yeah. Thank you for the follow-up. I wanted to know basically what is the asset term for our board and finance plan? We see I was just... Yesterday. Hello? I think it's a good point. Point... So asset term will be point nine x. Are Point nine are targeting to send the, yeah, $1.40 karat revenue.

59:28 It's $1.66 karat also includes the line cost. So there's the line, it will be around $1.45 to $1.50 karat investment. Wanted to know about the status of our pre phase one project, which we are on... Yes. Last year, I think so. Yeah. We Yeah. We Hello? Hello? As I mentioned, work is on in full swing. Can you hear us,? Yes. Yes. Yes. Enable. Okay. So that project is on in full swing. We are on track as far as timelines are concerned, and we, as I mentioned, q four, we should we should look to commission the plan. Okay. And one more thing I wanted to know as I have other, we have a CapEx program of $1.27 for for miller, both in panels and 40% of OPC.

1:00:21 Total CapEx of $1.67 we have announced last year. Out of that, how much has been done and how much is the balance that CapEx? I wanted to know about that as of June 30. The question is? So last year, we have announced $11.27 crore of and 40 crores of OPBC. So OPBC CapEx is already completed Okay. In in the last month. And projects, we are right now in the phase of civil construction work is going on. Probably from next month onwards, the installation plant in the machinery will start coming in and installation one... Work will start. I would say we would be close to 90% in terms of order commitments.

1:01:07 Maybe 90 to 100% from an order order placement perspective. Okay. And could you share the highlights of the revenue and EBITDA contributions of CleanCodes from q one FY twenty seven? So CleanCodes, we did revenue of 9 crores during the quarter, and and with a bit Hello? Thank you,. Yeah. Yeah. Thank you. Thank you. Yeah. Thank you. Anish Ladies and gentlemen any more questions? No, sir. As there are no further questions from the participant, I will hand the conference over to the management for the closing remarks. Thank you.

1:01:52 And over to your team. Okay. Thank you once again for joining us today. We sincerely appreciate your time and insightful questions and your continued interest in BIRLANU. If you have any follow-up questions, please feel free to reach out to our investor relations team. Thank you and have a great weekend. Thank you so much sir. Ladies and gentlemen, on behalf of BIRLANU Limited, that concludes today's conference. Thank you for joining us and you may now disconnect your line.