Apollo Pipes Ltd (NSE: APOLLOPIPE) Q4 2025 Earnings Call dated May. 12, 2025
Corporate Participants:
Unidentified Speaker
Aasim Bharde — Advisor
Sameer Gupta — Chairman & Managing Director
Anubhav Gupta — Chief Strategy Officer
Analysts:
Unidentified Participant
Keshav Lahoti — Analyst
Pujan Shah — Analyst
Udit Gajiwala — Analyst
Sneha Talreja — Analyst
Utkarsh Nopany — Analyst
Ashutosh Khetan — Analyst
Nabanu Mondal — Analyst
Deepak Pandey — Analyst
Presentation:
Utkarsh Nopany — Analyst
SA. Ladies and gentlemen, Good day and welcome to. Welcome to the Apollo Pipes Q4FY25 earnings call hosted by DAM Capital Advisors Ltd. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touch tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Asim Bharde from Dam Capital Advisors Ltd. Thank you. And over to you sir.
Aasim Bharde — Advisor
Thank you. Navya. Good morning. On behalf of Dam Capital, it’s a pleasure to welcome you all on Apollo pipes Q4 and FY25 results Conference call from the Apollo Pipes management. On the call we have Mr. Sameer Gupta, Chairman and Managing Director, Mr. Arun Agarwal, Joint Managing Director, Mr. Ajay Kumar Jain, CFO and Mr. Anubhav Gupta Group Chief Strategy Officer. I hand over the call to the management now for their opening comments.
Sameer Gupta — Chairman & Managing Director
Thank you. Good morning everyone. This is Sameer Gupta, CMD of Holopipes here. I, along with my colleagues Arun Agarwal, JMD, AK Gen CFO and Anubhav Gupta Group CSO. Welcome everyone to Apollo Pipes Q4FY25 earnings call. FY25 was amongst the most tough years for the PVC pipe industry. The demand was highly impacted from slowdown. In private real estate and government infrastructure. Spends on the top of it. The frequent fluctuation in PVC resin prices led to continuous destocking by our channel partners. We believe that the overall PVC piping industry would have declined by about 5% in FY25. It impacted Apollo Pipe also as we are the seventh largest player in the country. However, we still managed 23% volume growth backed by our strategy of inorganic and geographical expansions. The company’s EBITDA was flat at 95 crores as margin declined due to aggressive sales and slow ramp up. At our western plant, Apollo Pipes had laid down solid foundation for 20 to 25% volume growth for FY26.
I am pleased to tell you that we have three additional revenue drivers which are OPVC Product segment, Window profile, Powder segment and Varanasi Plot. The EBITDA margin slightly recovered this year backed by improving sales mix. Some green shoots are visible in terms of pickup in construction activity. We expect government trust on water infrastructure and housing to return sometime in FY26. In FY25 we incurred a capex of Rs. 166 crores after rupees 250 crores. In the previous year our capacity has increased to 2 32,000 tons which shall further increase to 2,60,000 tons by the year end FY26.
The residual capex would be rupees 100 crores. To achieve this capacity it will be funded from internal cash flows. At a consolidated level we have net cash of 46 crores. Despite heavy capex expense, our working capital cycle remained prudent at 36 days which resulted in operating cash flow to EBITDA of 65%. We expect this to improve further in coming years. On top of it, we will have equity inclusion of rupees 110 crores from an Omani’s fund against which rupees 28 crores already credited in April with balance coming in the next 17 months. These proceeds will be used for investment into Greenfield plant in South India along with our other company requirements.
Now coming to Q4FY25 performance. I am pleased to tell you that we had best ever quarter with revenue of rupees 315 crores. It could have been slightly better but industry pain persisted in January to March quarter as PVC prices continue to decline and we did not see any improvement in infrastructure and real estate sectors. Our return profile in terms of ROE looks depressed as of now due to reasons such as 1. Low capacity utilization 2. Ongoing CAPEX spends 3. Margin pressure 4. Weak macro environment. However, we are confident of achieving 25% ROCE in next two years and as we increase our sales volume at 25% CAGR with margin improvement.
This is from our side now. We are glad to take questions. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press STAR and one on their Touchstone phone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Keshav Bijay Ratan Lahoti from HDFC securities. Please go ahead.
Keshav Lahoti
Hi. Thank you for the opportunity. Do we had any inventory loss for this quarter?
Anubhav Gupta
Hi, Anubhav Gupta here. PFC prices did decline this quarter. But as we carry very little inventory so inventory losses are very very minuscule.
Keshav Lahoti
The volume growth guidance which you have given 20 25%. So can you please split between you know what sort of growth you’re targeting for standalone and Kisan because it’s a complete different geography, both Kisan or standalone.
Sameer Gupta
So if you look at Apollo pipe standalone we expect volume growth of 20% and Kisan having slightly lower base. Right. And the revenue and volumes have been depressed there for many years. And the idea to acquire Kisan was that we will be able to help them ramp up pretty quickly. So yes, Kisan should be slightly better than Apollo standalone.
Keshav Lahoti
Got it. So what sort of margin plan you have for Kisan for this and for FY27 and FY27, what are the levers which possibly will help them to improve margin? How you can change your mix. And lastly, on the working capital stretch, do we have scope to reduce it?
Sameer Gupta
Right, so coming on the margin first, if you see just immediately after our acquisition, the company’s operating margins become positive from negative, right? So at the end of the year they are making around 3 to 4% EBITDA margin. We believe that in FY26 these margins could inch up to around 5% and in FY27 there will be further improvement of 200 250bps. So as we see that in next two, three years the company has capability to generate 8 to 9% EBITDA margins easily in terms of working capital. Okay, so coming to the levers. So levers is of course the operating leverage because the capacity on which they are sitting right now is around 50 to 60,000 tonnes on annualized basis.
Whereas right now we are making around 20,000 ton a year. So as the capacity ramps up we will get operating leverage benefits. And of course as the product availability improves, the pricing premium will also come into play. In terms of working capital. In terms of working capital, I mean it’s the first year of consolidation into APL Apollo system. Right? As APL Apollo is working on 30, 35 days of working capital easily now Kisan also as we have more data about their distributors etc, so we are talking to national banks to initiate channel financing at some point.
It may not happen in FY26, but in FY27 definitely we will do that. And as for these supplies, also the supply of raw material, at some point we will start getting better payment terms from our raw material suppliers. Anyways, the purchase is being integrated with Apollo pipes so we will also see benefits towards the better payable days. So in two, three years we expect Kissan to generate or to be or to become as efficient as Apollo pipes in terms of working capital.
Unidentified Speaker
5% margin still looks low for next year. So that way we were expecting, you know, faster ramp up. Earlier when we did the acquisition part Something is missing. What we possibly might have thought.
Anubhav Gupta
Yeah, see I mean at this point, I mean how the industry is behaving, right? PVC in particular, I mean overall building material industry is going through a lot of pain and PVC industry in particular is going with more pain. I would say so, yes. I mean these numbers can change if we see better performance in Q1, Q2. But this guidance, what we are giving is with lot of thought process behind it that we are going through tough times and if at all there is improvement more than what we’re expecting. So yes, these numbers will definitely be surprised and we might surprise you in quarter three, quarter four.
Keshav Lahoti
Got it. And what is the console margin guidance for the company for FY26 and 27?
Sameer Gupta
Apollo pipes like I said is at around, as you can see, it’s around 8% EBITDA margin. Right? Definitely we will want to take it up to 10 to 11% in next two years. And Kisan, like I said will be around 6 to 7% in two years.
Keshav Lahoti
The recovery would be gradual, right? Somewhere middle 26 would be somewhere in middle of this, right?
Sameer Gupta
Definitely it should. Provided we see improvement in macro better than what we are thinking today.
Keshav Lahoti
Okay, thank you so much.
operator
Thank you. Next question is from the line of Poojan Shah from Molecule Ventures. Please go ahead.
Sameer Gupta
A bit. But if you could be closer to Mike, it’ll be better.
Pujan Shah
Yeah. Is it closed? Is it audible now?
Sameer Gupta
Go ahead please.
Pujan Shah
Yeah, sure. So my first question will be pertains to JJ and so we know that the last eight, nine months there was bit of slowdown and the fund release was a challenge from the government side. So just wanted to know your part. So how is the situation right now and what could be the potential in this year for the JGM purpose?
Sameer Gupta
So JGM has been weak for last 1314 months now consistently. Right. The product, what we supply in JJM is HDP pipes. In FY24 the contribution from this segment was around 12 to 15% and this year it fell below 5% in FY25. So our volume kind of declined by almost 60, 65%. Right. And for FY26 we have not factored in any substantial volume recovery in SG GP pipes for jgm. And the reason is that yes, I mean government did increase the budget allocations in I mean for water, for water infrastructure. Right. And there were some payments to the contractors which were made in last 12 months also which was stuck for 6, 7 months.
But still I believe that, I mean the government needs to do much more what it has done in last two, three months after budget announcement. So I guess we need to see that, I mean how the budget allocation gets converted into actual money transfer into the contractors bank accounts. Right. And how new orders come into play. So we have the capacity, we have the product. Right. As of now we are not in our FY26 business plan of 20% volume growth. We have not factored in a lot of recovery from this segment. But if it comes it will be added bonus to it.
As of now we are remaining cautious on this particular segment. Our focus is to increase sales in the trade channel in the housing plumbing segment which has been our strength. And on what we have been working over the last three, four years, very, very aggressively.
Pujan Shah
Just wanted to add on that part. So do you feel any clean shoots also in Jijing or still there is a lack as you have said that still needs to watch on the cautious mode due to two, three months down the line as government needs to spend more. So still there is no green shoots being visible in this space. Right.
Sameer Gupta
Like I said, after budget announcement in end of Feb. We came to know that the contractors got paid. The payments were stuck for long time for them. Okay. But not enough that could lead to very sharp recovery. So next two, three months we need to see how the money comes into contractors accounts.
Pujan Shah
Right? Got it. And the second question would be in the OPUC side. So we know that few states have been opening up right now. And we have seen one of the state has been pushing up with the tenders on OPUC part. So how is the strategy for that state and how we have been planning to grow OPEC as a part of the whole of AP and Apollo?
Sameer Gupta
See right now in terms of capital employment, what we have done OPBC is like 15% of our total capital employment today. Okay. In terms of gross block. Right. So we have made substantial investments in last 12 to 15 months to make a mark in this segment. And it makes a lot of sense for this product to do better in next five to 10 years. Because there are clear savings for the Indian government who is spending on the water transportation infrastructure. There are savings of up to 30, 40% when we compare the cost of laying down piping on per meter basis compared to the steel piping, the ductile iron piping which is the current product today since it’s a new product.
So the state governments will adopt this gradually. Right. Right now there are four, five states where this product has been approved and sales have started. Even we could sell good number, right? In FY25 because all our three mills got operational towards end of the fiscal year, right? We are going and making presentations in lot of states, right where we are trying to convince the authorities that how this product is beneficial and why they should adopt. And not only us but all the other players who have installed this machinery plus the, plus the machinery people who are producing machines for this product even they are going and making these presentations to the various authorities relevant for this product.
So I guess in next one, two years we will see a lot of adoption for this product and companies who have invested into this because you needed to be the first ones among the first ones to have this access to the technology which Apollo has already. So we will see a lot of gains and benefits over the next two, three years. And that’s how the transition happened in the plumbing site, right? From steel pipes to PVC pipes in last 15, 20 years. So we see similar trends which are becoming visible in OPVC pipes. It’s just that because lot of government approvals are required, lot of conviction for the government agencies need to be in place.
So everything is being worked out. By end of FY26 we will have much revenue contribution from this segment and and I’m sure when we will share the numbers you shall feel surprised.
Pujan Shah
So sir, just wanted to add on that part. So do you. Are we planning to increase any capex on this front? Because as you said one to two years the adoption will be quite strong. So do you see any capex or like right now I think we have 9,000 MTP of capacity for OPEC. So any target idea what we want to plan to increase to X number in coming years?
Sameer Gupta
So, so see, I mean for further investments we will want at least 2, 3/4 of. Of. Of good order book visibility, right? Nothing stops us from putting up more capacity. We are sitting on net cash balance sheet. Our operating cash flow is very very strong. If we believe that the order book visibility is much more than the existing capacity, we will go and add up more capacity.
Pujan Shah
That is quite a challenge in terms of equipment procurement. So there is a very constraint in terms of buying equipment because of the capacity constraint by SPIN technology. So is that a facility when we will plan and we will get the delivery on time and then we can start commercialization at the inflection point of this new product. So is it how the strategy will work on that one?
Sameer Gupta
So since we already have a license with the approved machine vendor, we can buy as many machines as we want.
Pujan Shah
I think I have heard that there is a capacity constraint from that player which is mole. So they can only produce I think eight lines per year. So do you feel that still we will able to procure due to. We have that advantage of licensing already with the mole. So that will help us to procure more early than the competitor.
Sameer Gupta
So I guess again see, I mean. So first we need to have enough order visibility, right? Before we go and ask them for more machinery, right? So that is six months from now, right? Like I said, it’s a new product. Government is always very slow in adoption of any new product. Any new technology it is related to water. Very sensitive product, right? Very sensitive segment for. For whether it is central government, state government. In six months we will have much more clarity whether we want to go for additional lines or not. But we have understanding with our machine supplier, right? That if we wish to buy more lines, they will give to us.
Pujan Shah
And sir, we are planning to procure a PhD line in kitchen molding. So we are, we are being strategy on OPC for APN Apollo Pipes as well as the Kisan, right? So we will have a blended technology where Kisan will play a better role in where the Apollo is not being present in that specific region. So how that would economic. That economics will work.
Sameer Gupta
So that is right. Because see, I mean it’s a very sensitive topic, right? I will not want to divulge too much of detail but what I can tell you is that Apollo Pipes has access to the technology from the best vendor in the world. Kisan of course could not get the license, right? How Apollo Pipes did. So Kisan is working on whatever is available right from the market. What other players are doing, Kisan is doing that and investment is much lower versus what the seven guys did to buy a molecular machine. And this much visibility we have that on whatever investment Kisan will make, we will have 30, 40% return on that investment.
Pujan Shah
But sir, one side we have been saying that we have been cautious in terms of JGM and we are looking for next two, three quarters in the same space we are also investing in the Kissan for the lines. So how I’m not getting so.
Sameer Gupta
No, no. So, so, so opvc. See, I mean when we say jjm it is about announcement of new projects, right?
Pujan Shah
Right. Right.
Sameer Gupta
OPVC is replacement of DI pipes, right? So the DI pipes which have been laid down in last 50 years, right? So they keep on getting replaced. That’s that the regular orders which keep on coming. So OPVC pipe has the opportunity to go and get installed in the existing lines which is kind of replacement demand. Government is, is Slow on announcing new projects under JJM scheme. But the replacement demand, right, that is always there, no? So. So Pipe is getting used in for the replacement demand in infrastructure projects.
Pujan Shah
My last question would be on the realization of OPC so could you just guess a number? So lastly you said in I think last year the realization was 200 per kg. So this is currently prevalence to 5, 10%.
Sameer Gupta
Again we will not want to share too much details about this but. But this is, this is higher than our blended NSR what you see today.
Pujan Shah
So. So specifically.
operator
I’m so sorry.
Pujan Shah
Sure, sure.
operator
Thank you.
Pujan Shah
Yeah, I will jump in.
Sameer Gupta
Thanks.
operator
Thank you. We take the next question from the line of Udit Gajeewala from yes, securities. Please go ahead.
Udit Gajiwala
Yeah, thank you for taking up my question. Anubhav, if you can just elaborate a bit on this vendor profile. But I mean when are we commercializing this product and where do we see the revenue ramp up for coming? 2 to 3 years.
Anubhav Gupta
So Udit, the product launch is lined up for June of 2025. Right. Which is next month. We have, we have almost finished the capex very minuscule CAPEX is pending which shall be completed in the next 40, 50 days and then we have lined up the launch of this product. So yes, it’s a new segment for us. In next two, three years we expect this product to contribute substantially to our revenue and margins.
Udit Gajiwala
And just one bookkeeping thing. So when we do the console minus standalone there seems to be some inter segment volumes. So could you provide some light as in why has that happened in this.
Udit Gajiwala
Quarter specifically.
Anubhav Gupta
Just just one check. Yeah, this. In this quarter there was intercompany sales so that’s why we had factored that.
Udit Gajiwala
So this has moved from. So this is a part of Apollo’s volumes basically standalone.
Anubhav Gupta
Yeah, Apollo volume. Standalone is totally Apollo’s volume And if you talk about console. So there is intercompany transactions which has been netted.
Sameer Gupta
The total Internet transactions for the whole year is approximately 617 crore.
Udit Gajiwala
All right. And in terms of our geographic expansion that we were planning, you know in our standalone business. So now with Kisan coming up with a plant in West. I mean do we see Apollo’s more market share now coming from east and south as Western center could be catered by say Kissan? Is that the understanding? Right?
Anubhav Gupta
Definitely that was the reason of Kissan acquisition. Right. Anyways we were looking, looking for a greenfield plant in West India and then we got access to this asset, we went ahead and bought it and now Apollo pipes on standalone basis is Focusing highly on new products in North India. Right. And with Varanasi plant we will have lot of access to Central India and East India and south existing plant in Bangalore. I mean we have, we have been doing brownfield expansions there. And eventually next one to two years we shall have a greenfield plant in South India also at some point we will have much more clarity about that in next six to nine months.
Udit Gajiwala
All right, that helps. Thank you and all the best.
operator
Thank you. We take the next question from the line of Sneha Talreja from Novama. Please go ahead.
Sneha Talreja
Hi, good afternoon team and thanks a lot for the opportunity. This couple of questions from my end. If I look at your last year’s volume growth that has been largely being flattish. One reason that you gave was of course HDP demand being missing on ground. But is there anything which was troubling other than this the entire of last year and how is the current ongoing demand at this point of time and as a channel destocking largely done with or are we still seeing the impact of the same?
Anubhav Gupta
So Sneha, so two things to end with. Right. So volume is flat. Yes. Because of collapse of SDP sales. But on the other side I would like to tell you that our CPVC volume increased in double digits. Right. Our water tank business increased in double digits. Our agribusiness also. Right. Which is like 45% of volume. Even that grew in double digits. So it’s mainly because of collapse of sdp, right? Yes. The regular UPVC pipes. Right. Which goes into. Which goes into housing, plumbing. So there the volume was flattish. Of course. It’s a commoditized product. The industry had massive price war into this segment.
And lot of smaller players whose SGP capacity was idle. So they got into this commoditized UPVC products. Right. And that studied the market, a lot of players are increasing losses. Right. We believe that same trends selling at loss will not be possible in FY26. So stronger players with market shares and distribution network they will be able to ramp up this UPVC pipes as well. Right. In FY26. So that’s why we are confident that 20 25% volume growth is is possible for. For us in FY26.
Sneha Talreja
Understood. And while you gave this number of around 25% is what you see in the next two years. What are the targets that you have in mind? Leaving apart 2025 top line growth which of course will mean better utilization. But what are we looking at in terms of margins and where will those margins come from? What are the target numbers here with respect to. Let’s say share of agri moving up to plumbing. You know what are we thinking on those things?
Anubhav Gupta
Right now as at FY25 end our capital employment is around 750 crores. Okay. Now. Now 100 crore more capex will come in FY26. Right? So the. The. The capital employment will be 850 crores. And this capital employment of 850 crores will give us revenue of around 2500 crores. Okay. And the margins which right now are at 8 and a half 9% they will inch up to around 10 to 12%. Right. In next two to three years. So that means on 2500 crore my company can generate EBITDA of 25050 to 300 crores and EBIT of around 200. Two hundred and twenty five crores. Right. On a capital employment of 800. So. So this gives us confidence that we shall be able to generate 25% ROC in the next two to three.
Sneha Talreja
Understood? Understood. The lower asset terms that you’re taking is on account of OPVC coming into play. Is my understanding correct?
Anubhav Gupta
Say it again please.
Sneha Talreja
The lower asset terms that you assumed 2500 odd crore stop line on the base of 850 odd crores capital employed that comes on the back of OPVC coming into play. Because other than that if I’m not wrong we are at the terms ideally should be up for the forex.
Anubhav Gupta
Oh no. So. So this 850 crore also includes working capital, right? So my gross block will be around 700 crores. On 700 crore we are expecting 2500 crore of. Of revenue. So. So gross. So asset turnover. Gross block. Asset turnover is around three and a half four times only.
Sneha Talreja
Understood? Understood. That was helpful.
Anubhav Gupta
Yes and yes. OPVC is under one time as a turnover product.
Sneha Talreja
That was helpful. Thanks. Thanks Anubhav. And all the best.
operator
Thank you. We will take the next question from the line of Utkarsh Nopani from Bob Capital Markets Ltd. Please go ahead.
Utkarsh Nopany
Yeah. Hi. Good morning sir. So my question is again on your sales volume number for the March quarter. So if we remove the Kisan volume from our console number then the next standalone volume was down by 5.5% in this March quarter Despite we have been aggressively spending on the CapEx for the last two years. So wanted to know what is the reason for the same. And like you have also guided that we are targeting to grow our standalone volume by 20 to 25% rate in FY26. So what is giving you the confidence that you are guiding such a high volume growth number when you are seeing such a muted demand in the market. So if you can throw some light on this too.
Anubhav Gupta
So, so, so. So. So see, I mean you look at the value wise, right? Value wise it is because of a drop in the net selling realization on the back of declining.
Utkarsh Nopany
I’m asking on volume.
Anubhav Gupta
Volume is not minus 5%. Volume is flat. 1,270 was in Q3 and 21,122 is in quarter four. So. So it is flat. It is not down 5%.
Utkarsh Nopany
Sir, like if we adjust the console volume from your whatever the KISAM number you have given then our net standalone volume number is down.
Anubhav Gupta
So this is because of the inter segment sales which Mr. Jain explained over call short while ago. We have also given in our presentation standalone Apollo pipes volumes quarter three, quarter four is flat. There is no decline of 5%.
Utkarsh Nopany
Okay, so even if it is flat, what is giving you the confidence of doing 20 25% growth in FY26, right? Because the demand environment is pretty weak. And the leading player also indicated that the demand environment is going to be pretty decade in FY26. And they have guided pretty low volume growth. So how come you are expecting to clock a much?
Anubhav Gupta
Fair question. So there are three drivers. Okay. What we believe will drive this 20 25% growth in terms of volume. Number one is our window profile products segment which is ready for launch in month of June. June. Right. We will get incremental sales from this product. We have done a lot of homework. We have formed lot of strategies in terms of market launch, in terms of market mapping, in terms of distribution setting up. Right? Which is fully supported by our talent acquisition. What we have done in this segment plus the capacities what we have built here.
This is going to give us incremental revenue, right? Second is our Varanasi plant which shall be starting in the second half of FY26. Okay. Now we are not able to supply much in the. In the. In the Central India and East India. Because our existing plant in Raipur is very very small plant, right? But the kind of network what we have built in those markets, they require. They require much more product from Apollo, right? Which we are not able to service today. But after commencement of RNC plan, we will be able to take a lot of market share there which will all be incremental.
Third is opvc, right? We have made the investments. All our three lines are ready. We have already started building order book. There was minor contribution in FY25 and the visibility what we have for FY26, there will be much more incremental sales coming from OPVC. So these are the three new product segments, new product categories, new markets which are going to give Us incremental revenue. Plus existing capacities should grow at 5 to 10% depending on how macro factors behave. Yes. As we are sitting today, things do not look very good. Good in terms of macro but.
But we believe that maybe after monsoons, right? The real estate activity, the. The construction activity shall pick up quickly and. And India cannot stay dull, right? Consistently for 15, 18 months, right? Whole of FY25 was bad for macro. First half again should be. Should remain bad but second half should see good recovery, right? And that’s the confidence we are getting from our interaction with the EPC contractors who are having order books from the real estate developers who have lined up good launches and completion deadlines they have, right? Even if macro doesn’t do too good as we expect in second half, I don’t think there will be a large miss to our guidance, right? This 20, 25% guidance what we gave again, we gave it after much deliberation, lot of homework, right? So that there shouldn’t be any miss, right? Even if macro doesn’t support, right? So we are confident that we should be able to meet the expectations what we are setting today to our investors.
Utkarsh Nopany
Okay. And sir, how Agri pipe demand is shaping up in this quarter? In this. In the current June quarter.
Anubhav Gupta
So Agri has done well so far, right? Last year agri volume had double digit growth for us so far in Q1 we are seeing the same momentum.
Utkarsh Nopany
Okay. And sir, lastly like for Kisan earlier, we intended to increase the Kissan capacity from 60,000 ton to 80,000 ton. So whether that CAPEX plan remains intact or we have kept it on hold.
Anubhav Gupta
Right now we have made some investments, minor investments in Kisan to. To. To fix the issues what were inherited, right? We did minor investments. Idea is to take Kissan to like 3040000 tons of annual production and then we will invest into new lines. We have enough land in Kisan plant, right? So the brownfield expansion will be very quick. It’s just that we first need to see how the ramp up is going on in the current environment, which we are hopeful. We are confident that it should meet our expectations. Maybe early FY27 we will assess that how many new lines need to be added for Kisan but for FY26 we are sorted.
Utkarsh Nopany
Okay, thanks.
operator
Thank you. Next question is from the line of Omakant Sharma from Vansh Venture. Please go ahead.
Unidentified Participant
Hi sir. Good morning, sir. Am I audible?
Anubhav Gupta
Please go ahead.
Unidentified Participant
Yeah. Hi sir, I’ve just got two quick questions. One, if you could just throw some color around the TAM for the OPVC business and how do you see the scale up for yourself as the industry expands? Right. So when you see the business from a two, three year standpoint, how does the OPVC exactly scale up for us as well as the industry and what is the time looking like? And secondly, second question is on the expansion in the distribution network for us in the different geographies. How do you see that spanning out?
Anubhav Gupta
So the market analysis, what we had done before investing into OPC segment. We believe that 7,8,000 crore worth of annual sales can be generated through replacement. Through replacement of ductile iron pipes with opvc. Right. So that’s the TAM on annual basis as per our analysis. And when we speak to our peers and the machine vendors, I mean so they are also near about same figure. So. So yes, the time is around 7000 crores a year.
Unidentified Participant
And sir, how do you see what is our current contribution from OPVC and how do we see that spanning out? Let’s say by FY27 or FY28 when we are sitting down and the effort that you’re putting in and the investment that we’re putting in, how do we see our revenue moving towards the opvc? How much would that contribute?
Anubhav Gupta
So I guess see in terms of revenue, when I say value wise, right. It would be around 5% in next two to three years. But in terms of profitability will be higher. Because the margin on OPVC is much superior than our current blended margin. Got it.
Unidentified Participant
Got it. Sure. And secondly, sir, if you could just throw some. So largely would it be fair to say that the existing product itself would be the driving factor for the growth of the business?
Anubhav Gupta
In revenue. Yes. In margin OPVC will contribute.
Unidentified Participant
Got it. Got it. And so if you could just throw some color on the distribution expansion, distribution network expansion side.
Anubhav Gupta
Right now focus is to build network and the network in East India, Central India which will be fed from our upcoming Varanasi plant. Then along with Kisan, we are working to strengthen their markets in in West India. Right. Because for last four, five years they are not invested anything to build network. Right now with Apollo backing, we are ensuring that the west region distribution network strengthens heavily. And the third focus is on South India. Right. Although our plant is running at decent utilization levels. But our ultimate large greenfield plant in South India which may take two Three years right before it is fully commenced.
So we have started working to create market and to increase our brand awareness in that region. North India strong anyways, right? We are among top three in terms of market share in North India. And here the idea is to keep on launching new products, right? And keep our distributors clients busy with our product launches. Got it.
Unidentified Participant
Got it. Thank you. Thank you sir. That’s all from my side.
operator
Thank you. We will take the next question from the line of Ashutosh Khetan from Asian Market Securities. Please go ahead.
Ashutosh Khetan
Yeah. Sir, I just had one question. What were the ad spends for the this year and what will be for the coming year?
Anubhav Gupta
So ad spends remain at around 1% of the of the revenue, right? And given that we are able to increase our revenue by 2025%. Right? So that much increase you will see in the ad spends also. I don’t think we are going to go beyond 1 1.25%. Because whatever. Our focus has always been more on BTL activities, right? We have launched an app to enroll as many plumbers as we can, right? So we have launched. We are going to launch a plumber incentive scheme, right? Wherein we have started enrolling the plumbers on a tech app.
Right? And idea is to. Idea is to remain strong in the BTL activities, right? Anyways, margins are under pressure for the whole industry. Once we achieve 1112% EBITDA margin on an expanded revenue base of 2,500 crores then we’ll see if it makes sense to go ATL. But for next two years we want to focus highly on BTL only which is more ROI focused. Right?
Ashutosh Khetan
Okay. And one more question that how many dealers are currently taking channel financing for the year?
Anubhav Gupta
15% as on date
Ashutosh Khetan
15. Okay sir.
operator
Thank you. Next question is from the line of Nabanu Mondal, an individual investor. Please go ahead.
Nabanu Mondal
Yeah. Right. So from the. I have a question with regards to the Kiffan molding, branding and advertising exercise. What are the activities which are ongoing right now to increase the brand awareness which we had lost over the last five, six years for? If you could go some lights, let’s say we are getting into trade promotions or are there any advertising spends which we are occurring for increasing the brand awareness of this one.
Anubhav Gupta
So right now what we are doing in Kisan is working on very very basic infrastructure, right? Whether it’s towards the capacities or it is toward the distribution network, right? So like I said, we made a few investments to fix the plant issues right now whatever production is there, it is like streamlined Right. Quality. We worked on how to improve quality. Got some systems in place, what Apollo Pipes had been following for many years to improve the efficiencies etc on the distribution then on the distribution front. Right. So their top 100 distributors, right. We are ensuring that they become part of the family.
Right. They get the products on time, deliveries on time. Right. The SKU range is increasing. Whatever fill in the blank has to be there. Apollo Pipes pitches in and they complete the complete SQ range. So we are working on the basics. Right? Kisan brand anyways is very, very strong. So we don’t believe that we need to make investments into brand as of now. Right. First idea is to ramp it up to around like 30, 40,000 tonnes a year in terms of volume. And then, and then, and then we will invest into branding if at all.
We have to move beyond western markets, right. From the same factory. So focus is to fix the the basics first. Right. And then, and then we’ll go into peripherals and we don’t see any requirement for investment into branding promotion for the next two years.
Nabanu Mondal
Yeah, just a follow up question out here that considering we are mentioning that we’ll be increasing the capacity to 35 to 40,000 tons.
Anubhav Gupta
Capacity is already 50, 60,000 tons a year.
Nabanu Mondal
Yeah. So when we are saying that we are increasing the volumes to 35 to 40,000 tons, when do you think that this will be possible? I mean within the next year or do you see? Because when we acquired the plant we were already I think doing 25,000 tonnes of volumes and I think that it has been flattish in the current year. So could you throw some light on this?
Anubhav Gupta
Right. So see, I mean FY25 volume for Kisan was around 20,000 tons. Right now we are guiding for 25% volume growth. Right? So ideally it should be much higher but in terms of our internal targets are much higher. Right. So let’s assume that it does like 25, 30,000 ton in FY26. Right. And then another 8, 9,000 tons will get added in FY27. So by FY27 Kisan should be near about 35,000 tons as per our business plan.
Nabanu Mondal
Perfect. That’s it for me. Thank you.
operator
Thank you. Next question is from the line of Poojan Shah from Molecule Ventures. Please go ahead.
Pujan Shah
Thanks for the follow up sir. So I just was wondering on the Kishan molding PVC pipe equipment. So we said that we have bought an equipment which is cheaper in terms of pricing and we are not into agreement of seven players. So just wanted to Know last time when, when we had a con call we said that we won’t be procuring machine other than spin technology. And right now we have been trying to procure from a cheaper equipment available right now. So is that the equipment supplier is now being comparable to the monitor or the spin technology Is that the efficiency is the same compared to them or what we have been, what we have been seeing on this part.
Anubhav Gupta
So not at all. The quality is not at all similar, right? See, India is a. India is a market which. Which can absorb products of different qualities, right? So. So where the specifications are for like 100% quality their molecular is there, right? And then where quality as per whatever the tender documents are there. So if it calls for slightly lower quality then we can supply from that plant, right? So it will depend on the tender specifications. Right. And the idea is to have the full SQ range in OPVC what the whole industry is going for, right? You require better quality product.
We have that product available. You have slightly lower quality product. We have that product available. So. So whatever will go, it will go as per the tender requirements. Tender specifications requirement from the EBC contractor who has secured the project from the government.
Pujan Shah
Considering the blended NSSO realization. So what was considering it would be around 120, 130, right? So the realization of occupancy could be in the same range or it would be not above near to 200.
Anubhav Gupta
I will not like to comment on that. What I can tell you is that it is higher than our blended nsr.
Pujan Shah
Okay. Got it. Got it sir. And as per the government specification we have been seeing that the tender which has been floating around that is a requirement of class 500 mark. So do you feel that the same quality below that the government is not going to procure the OPC lines. So do you think that the equipment supplier, the cheaper equipment supplier has that quality the class 500 mark which can be able to supply and that would be the sales.
Anubhav Gupta
Look, all machines that are being supplied by any of the manufacturers actually comply with the standards that are there in the country. So nobody, nobody is supplying any machinery which doesn’t comply with the Indian standards required.
Pujan Shah
Thank you so much.
operator
Thank you. We take the next question from the line of Sneha Tal Reja from Nuama. Please go ahead.
Sneha Talreja
Hi, thanks a lot for the follow up opportunity. And one of the answers to your previous participants. While you said that you know demand is at this point of time we can aiming at second half. Could we get some guidance that what would be a split between first half and second half volume growth in case. That’S ready to go.
Anubhav Gupta
Sneha, see what I said is that macro seems to be improving in second half, right? Our trajectory like how it has been in earlier years, it should be like 40, 45% in H1 and 55 to 60% in H2. Right? What I was referring to was the macro factors not Apollo pipes business model.
Sneha Talreja
Understood? Understood. Thanks. Thanks for the clarify.
operator
Thank you. We take the next question from the line of Deepak Pandey from Sagun Capital. Please go ahead.
Deepak Pandey
Hi, am I audible? Hello.
Anubhav Gupta
Yeah, please go ahead.
Deepak Pandey
Yeah. Sir, just want to understand on the window profile and the door profile segment, what sort of capex are we incurring there? And when can we expect the commercialization to happen? So window project, the capex is expected to be somewhere between around 60 crores. And we have already done almost 80, 85% of the expenditure and we are launching it in June of 2025. Okay. And can you also throw some light. On the demand side of it, sir?
Anubhav Gupta
So obviously if I have invested into a new segment. So our estimates say that there is a good demand. Because look, currently any houses being constructed are not wind, food is not being used actually. So it is a new type of product that are being used. So it is either UPVC or aluminum windows. So if you see the tam, right, time is infinite. Like how many wooden door frames will be used today in India, right? Whether high end, low end, mid end homes, plus the office complexes, commercial construction. So what trends we are seeing is that the developers, the independent homeowners, they have started looking for alternate window or door profiles, right? Whether it was steel business started four, five years ago or right now it is UPVC trend which is coming up, right?
So what we are seeing is that today the users, they are looking for alternate options in terms of quality, in terms of cost, in terms of durability, in terms of maintenance, right? So as far as UPVC is concerned, is concerned, what we are seeing is that there is demand from the high end homes also, right? Then there is demand from low end housing also where the government is doing low end homes or it is real estate developers who are going for lower end homes, they prefer UPVC because the installation becomes very easy, there is no maintenance, right?
And cost wise also they are like at par with the wooden door frames depending on what kind of quality of wood they use, right? So I would like to put it in a way that the time is very big, right? Users, they’re looking for multiple options, right? For this particular segment I mean just to put a reference to it, Apollo Steel Pipes, our sister company it is selling 300,000 chocolates every month, right? 300,000 chocolates every Month. It’s steel chocolate, right? It’s steel door frame. 300,000 every month. So. And UPVC is already being done by few players, right. And it is gaining a lot of momentum. So we also expect to have good volume from this.
Deepak Pandey
Got it. So last question from my side is regarding the EBITDA per turn separately if. You can share for Apollo Pipes and. Kisan for FY25 and the guidance for FY26 as well.
Anubhav Gupta
EBITDA spreads like for Apollo pipes should be thousand rupee per ton at least higher than what it was in FY25 and Kirstan of course because of low base will be slightly higher than that.
operator
Thank you ladies and gentlemen. In the interest of time, that was the last question. I would now like to hand the conference over to the management for closing comments.
Sameer Gupta
Thank you all. For patients listening, I hope we have been able to answer all your questions satisfactorily. Should you need any further clarification or would like to know more about the company, please feel free to contact our team. Thank you once again for taking the time to join us on the call.
operator
On behalf of Dam Capital Advisors Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines. Sa. It