Birlanu Ltd (NSE: BIRLANU) Q1 2026 Earnings Call dated Aug. 06, 2025
Corporate Participants:
Akshat Seth — Managing Director & Chief Executive Officer
Ajay Kapadia — Chief Financial Officer
Analysts:
Mit Shah — Analyst
Moksh Ranka — Analyst
Parikshit Gupta — Analyst
Rohith Potti — Analyst
Nishant Gupta — Analyst
Analyst
Sanjay Elangovan — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to BirlaNu Limited Earnings Conference Call. Please note that this conference is being recorded.
I now hand the conference over to Mr. Mit Shah from CDR India. Thank you, and over to you, Mr. Shah.
Mit Shah — Analyst
Thank you, Virat. Good afternoon, ladies and gentlemen, and welcome to BirlaNu Limited’s Q1 FY ’26 Earnings Conference Call for Investors and Analysts. Today, we have with us, Mr. Akshat Seth, Managing Director and CEO; and Mr. Ajay Kapadia, CFO.
We will first have Mr. Akshat Seth making opening comments and will be followed by Mr. Ajay, who will take you through the financial perspectives. Before we begin, I’d like to point out that certain statements made in today’s call could be forward-looking in nature, and details in this regard are available in the earnings presentation, which has been shared with you earlier.
I’d like to invite Mr. Akshat Seth to present his views on the performance and strategic imperatives that lie ahead. Thank you, and over to you, sir.
Akshat Seth — Managing Director & Chief Executive Officer
Thank you. Good afternoon, everyone, and thank you for joining us for the BirlaNu Quarter 1 FY ’26 Earnings Call. Quarter 1 for us was characterized by testing market conditions on one hand as well as a resilient response from BirlaNu side.
We reported consolidated revenue of INR1,052 crores. This marks a 4.9% year-on-year decline and EBITDA of INR59 crores. Weak demand, early onset of monsoon, pressure on input prices and excess capacity resulted in both volume and price headwinds across most of our product categories. In the context of these adverse external situation in both India and Europe, we set out with 2 clear objectives for this quarter, and I’m pleased to report meaningful progress on both fronts.
First, we aim to gain market share in our priority segments. On this front, we’ve delivered a strong performance and have outperformed the industry, especially in construction chemicals, in the wall segments around panels and boards and also blocks and at Parador. The second priority was to maintain a sharp focus on cost efficiency to cushion the impact of the soft pricing environment.
I’m happy to share that despite pricing pressures, we achieved margin expansion in select sub-segments of walls, construction chemicals and also at Parador. In our other categories, while margins did contract, the decline was lower than the broader market price correction, underscoring the disciplined execution and agile cost management.
Let me now walk you through the details of these at a segmental level and the key initiatives that we are driving. First, let me talk about Parador. Weaker industry sentiments driven by the uncertainties around tariffs led to a slight decline in revenue to INR304 crores. Despite this, we significantly improved our operating profits to INR5 crores versus a loss of INR2 crores last year. We are not only positive, there is a positive trajectory on the EBITDA margin as well. This was the result of strong pricing action and restructuring that we had done last year. Also, despite marginal decline in sales, Parador continues to take market share across the product categories.
For our roof segment, as you all are aware, Q1 is the pivotal quarter. This year, the season was marked by industry-wide demand contraction and price erosion relative to last year. In line with this headwind, we experienced a slight decline in both volumes and margins. However, with respect to our competitors, we not only maintained our market leadership, but also sustained the price premium we command in the market. The enduring strength of our brand equity and channel relationship continues to hold us in good stead.
In pipes, the PVC resin prices have continued its southward trajectory. In fact, the prices were 15% lower compared to same time last year, same quarter last year. Early rains reduced the intensity of construction activity in this quarter, impacting the demand. Further, government spending remains subdued. Nonetheless, we remain optimistic and with an expanded product mix and strengthened distribution, the business is well placed to benefit from a market rebound.
Our Construction Chemicals business continues to deliver on its high growth potential, recording a 37% revenue growth this quarter. This performance was driven by 2 key levers: aggressive channel expansion and a sharp increase in brand visibility through sustained marketing efforts.
As I’ve emphasized in earlier calls, both the Pipes segment and the Construction Chemicals segment are strategic focus areas for us in India. We are making steady progress in strengthening these categories and their contribution to our overall portfolio continues to rise in line with our long-term vision.
For walls, this period was transitionary. On one end, we saw a combination of subdued demand, lower government infrastructure spending and heightened competitive intensity, particularly with new capacities being commissioned across the industry. The impact was — the impact of this was most felt in the price realization for blocks business. Further, we commissioned and stabilized Chennai Line 2 for blocks in this quarter, which resulted in some one-off expenses being reflected in the P&L. But more than this, the rehaul of our sales strategy for this segment meant we have significantly increased our order books and pipeline for the rest of the year.
The impact of this is already visible in our panels and boards, which grew by 16% and 9% in volume terms, respectively. And they also improved the margin profile. I’m confident that blocks will follow suit in the coming quarter. The stage is set for this business for a robust performance this year despite continued price pressures.
Looking ahead, while we remain cautious on the near-term external outlook, our strategic direction is clear. We will continue to consolidate our leadership in high-growth categories, drive premiumization and innovation across the portfolio and leverage cost and productivity levers to protect margins. The recent rebranding has energized our efforts in the marketplace, and we will further build on that momentum in this year.
Importantly, with our new capacity expansions on track, including, as you would have noted, the ambitious greenfield project in Andhra Pradesh that will produce designer and high-density boards, amongst others, and the upcoming OPVC plant in Patna. We are laying a strong foundation for future growth. Our new product development engine is also gathering momentum with various new products to be launched over the next couple of quarters across our product segments. The key ones to watch out for will be our pipes, construction chemicals and wall segment. These initiatives will position us well to capture opportunities as demand begins to recover.
To sum up, while Q1 presented its share of challenges, we believe our focused execution and resilient strategy have helped us navigate the volatility and more importantly, continue building momentum for the future. I’d like to reaffirm our commitment to building a high-performance, purpose-led culture that propels BirlaNu into its next chapter.
With that, I conclude my opening remarks. I thank you for your continued trust and partnership. Let me invite now Ajay to walk you through the financial details. Ajay, over to you.
Ajay Kapadia — Chief Financial Officer
Thank you, Akshat, and good afternoon to everyone on the call. Let me take you through the key financial and operational highlights for Q1 financial year ’26. As Akshat mentioned, this was a challenging quarter marked by a volatile external environment, muted demand, price pressure and increased competitive intensity. Despite these headwinds, we stayed focused on execution, market share protection and operational discipline.
Our consolidated revenue stood at INR1,052 crores, reflecting a 4.9% year-on-year decline. Let me now walk you through our segmental performance. In Groups, revenue stood at INR442 crores, down by 4.7% year-on-year, impacted by a subdued rural market, early monsoon and price erosion. That said, our relative performance remains strong with market leadership and price premium intact.
Our sustained investment in brand equity and distribution depth continue to be key strength. In walls, we registered modest revenue growth of 2% with top line reaching at INR138 crores. Importantly, we achieved volume growth across all product lines despite soft demand conditions and heightened competition. Our refreshed sales strategy, coupled with margin improvements in panels and boards have started yielding results.
With the commissioning of Chennai Line 2 behind us, we expect blocks to recover and contribute meaningfully in the coming quarters. In Pipes and Construction Chemicals segment, our revenue declined by 14% and stood at INR168 crores. Pipes in particular, was impacted by a sharp 17% decline in the revenue to INR124 crores, driven by continued fall in raising prices, early monsoon and tepid government spending. However, our construction chemical business grew at robust 37% year-on-year, added by strong traction in channel expansion and focused marketing. This category remains a core part of our strategic growth blueprint.
In Parador, our revenue declined by 3% and stood at INR304 crores, largely due to weaker consumer sentiment and ongoing tariff-related uncertainties. That said, we recorded a notable turnaround in operating performance. Operating profit rose to INR5 crores compared to a loss of INR2 crores in the same quarter last year. This improvement reflects the structural cost initiatives and pricing actions implemented over the past quarters.
On the profitability front, EBITDA stood at INR59 crores compared to INR74 crores in Q1 last year. Profit before tax came in at INR5 crores. The contraction in margins was largely due to external price corrections and input cost pressures across categories. Despite this, our cost control initiatives helped contain the impact and we expanded margins in select sub-segments. We continue to uphold strong financial discipline with working capital remains within our internal thresholds and total debt as of June 30, 2025, stood at INR678 crores with a debt-to-equity ratio of 0.55.
Looking ahead, while we remain watchful of market trends, especially heading into quarter 2, we are confident in the robustness of our strategy with focused investments, cost optimization and disciplined execution, we are well positioned to navigate short-term volatility while building long-term value. That concludes my remarks.
I now hand it back to the moderator to open the floor for questions. Thank you.
Questions and Answers:
Operator
The first question is from the line of Moksh Ranka from Aurum Capital.
Moksh Ranka
I wanted to ask in our segmental results, I see a loss of INR18 crores for the Floor division, whereas in our presentation, we mentioned that for Parador, it’s currently operating profit of INR5 crores, so why there’s a discrepancy, could you please explain that?
Ajay Kapadia
Operating profit is before depreciation and interest, whereas in the segmental result, we report PBT.
Akshat Seth
The key message is at an operating margin level, EBITDA level, it is positive. And as we have shared in the past, that is the first milestone that we’ve been consistently keeping a watch on. This is now the third consecutive quarter where it is EBITDA positive.
Moksh Ranka
Q1 generally is a very strong quarter for — especially our roofing business and if you look at last quarter — quarter-on-quarter last year, that quarter was bad for us also. During this year, we have done a lot of cost cutting in our Building Solutions and all our major businesses since — and even after that, we are not seeing any margin expansion. Why is that?
Akshat Seth
For this quarter, in roofing business, there have been 2 things that have happened from an industry level. Overall, we believe there has been a volume contraction of anywhere between 1.5% to 2% and there is a price erosion compared to last year in the zone of 4% to 5% and select states in North are more affected than others.
In that context, our volume decline is about 1%. Our price realization decline is about 3%, so both are better than the industry numbers. It is this price decline, which has translated at a margin level. In fact, the margin decline is less than the 3%, and many of the cost initiatives have helped in offsetting the impact of that. But largely, the story is around price realizations translating to the EBITDA level.
Moksh Ranka
Regarding our capital allocation, so we are doing a capital — greenfield capex of around INR127 crores. Also, our debt is quite elevated and the external scenario is still not turning around. I wanted to understand if the external scenario is muted for 1 to 2 years, can we survive this? Even if for 1 to 2 years, like there is a problem in the industry scenario, so how do you see?
Akshat Seth
A couple of things to keep in mind. One, I think it’s important to distinguish between what is the short-term scenario and what are the long-term prospects that we are building. While we navigate the short-term challenges, like you said, on the external environment, it is also important that we create growth engines for future. This particular investment is happening in a category, which is a high-growth category. Even in today’s context for us, the boards business is doing well and is one of the more profitable. It’s in — the profitability is in mid-teens as far as that product segment is concerned. The outlook for that product segment is strong, and that’s why we are also investing selectively in the right pockets, which help improve both the revenue and the — revenue profile and the quality of revenue in terms of the profitability.
Operator
The next question is from the line of Parikshit Gupta from Fair Value Capital.
Parikshit Gupta
I have a couple of questions. First, on Parador. You already mentioned in your opening remarks that due to the tariff situation, the demand has been relatively sluggish, but what do you see the European markets as in the rest of the financial year? Can you also share some updates on the Indian market entry for Parador?
Akshat Seth
From an outlook perspective, as we are now almost in the middle of quarter 2, you would recall, I’m just rewinding to end of March, Q4 end when we had last spoken, there was a certain sense of buoyancy in quarter 4. That buoyancy was stalled because of all the uncertainties around tariffs and tariff announcement. Now as that situation clears up and there is greater certainty around it, the outlook for especially the second half because quarter 2, there are — that geography is also impacted by holidays and so on. But beginning September, the expectation is that there should be a turnaround and there is some positive green shoots that are visible on that.
At a minimum, we expect to resume where we left off around March, where there was some good momentum building up as far as the demand scenario is concerned. That’s where the situation looks like from a Europe point of view. We remain hopeful. In fact, the slight decline that has happened in quarter 1 in terms of revenue, we are hopeful that we’ll be able to cover it up by the time the year ends, and we should finish the year on a positive trajectory.
As far as the India part is concerned, the team in India is now fully in place. Along with the rebranding in the April time frame, we made formal announcements of the India launch of Parador. We have been prioritizing the work on the commercial segment first, and there is a healthy order pipeline that we are pursuing. The first revenues are also now beginning to get clocked. The build phase is in strong momentum, both from a team perspective and the order book perspective. As the commercial part stabilizes, we are also impaneling our retail partners to drive the B2C part of that business.
The work is on in full swing, including the third aspect, which is on product sourcing, so a lot of logistics, product sourcing, etc, have been sorted now. We are moving as per plan on that.
Parikshit Gupta
In terms of the polymer, basically the Pipes and Construction Chemicals segment, we do understand the pressure in pricing because of the weaker PVC prices. What kind of — I mean, considering many things, there are many factors. There is the demand scenario because of weaker — stronger monsoons and then also the raw material pricing. For the entire year of FY ’26, would you be able to articulate some sort of margin guidance on this segment?
Akshat Seth
I can. You’ve been now — I’m sure part of multiple conversations like this. What is your guidance on the PVC pricing?
Parikshit Gupta
To be honestly — to be honest, well, I was looking at PVC pricing from Reliance, the grade 6701. On a nationwide level, I did see an uptick. However, while speaking with companies, the story is the other way around. This leaves me are there at a position where I am doing something wrong in my calculations or it is very difficult to understand how the prices might move?
Akshat Seth
Parikshit, I think without getting into too much detail, I think PVC pricing is a slightly hazard and making predictions on it is slightly hazardous. There are several global factors at play. There are regional and India level factors at play. There is also capacity issues that are playing around. Assuming the situation stays where it is, I think for us, the focus really at our stage of evolution is to keep gaining share on the market side and volume side, and that’s the push that we are making. If there is a helpful movement on the PVC price, I think that will get reflected in the margin. But just given the very nature of the industry at this moment, I think it’s a difficult one to hazard a guess on.
Parikshit Gupta
In terms of the overall segment mix, so the past few quarters, roofing has contributed around 30%, building walls is around 15% Polymer and construction chemicals around 20% and flooring around 35%. Now while keeping in mind the $1 billion top line aspiration, is there a targeted segmental revenue mix that we are currently working towards?
Akshat Seth
See, increasingly, and I think the trend because this particular number will not make sense on a quarter-on-quarter level, but at an annual level, every year, we are shaving off about 4% to 5% in terms of the share that the roofing segment has in the overall portfolio much of the growth, much of the investment is essentially coming in the non-roofing segment. Progressively, this 30% will keep coming down. That’s the expectation and on an average, a 3% to 5% erosion should happen every year.
Parikshit Gupta
My final question before I rejoin the queue. I think it has been articulated in the previous con calls as well, but to just understand it more clearly, in order to achieve the $1 billion top line aspiration, do you have any rough capex requirement estimate probably proportional to the current net worth of the company that could be required?
Ajay Kapadia
In next 3 to 4 years, we expect investment to the tune of around INR500 crores in capital side, which includes investment in construction chemical and pipes and fittings, we have already announced investment in the fiber cement boards plant. All put together, INR500 crores capex and then another INR200 crores to INR250 crores we need for working capital.
Akshat Seth
Yes. To add to what Ajay said, this INR500 crores will not take us all the way to $1 billion because there will be an inorganic part of the story. There are also some parts of the story which are unanswered. Our sense is this number will be sufficient to take us to the INR5,000 crores, INR5,500 crores level. Then there will be more capital required for the remaining part of the year.
Parikshit Gupta
Just one follow-up on this. At this point, considering the balance sheet, would you be solely relying on internal accruals and debt or would you also be open for raising equity? However, I do understand that is a factor of how the stock price also does, so just any color on that, please?
Ajay Kapadia
Parikshit, raising equity is more Board decision, so we cannot comment on that. Our plan is initially we will fund this capex through borrowed funds. As and when the margin expands, we will fund through internal accruals.
Operator
The next question is from the line of Rohith Potti from Marshmallow Capital.
Rohith Potti
On the roofing business, I mean, 1 or 2 of your peers have released results and their roofing business seems to have performed better as compared to us. Is this — I mean, is this driven by the geographic mix or is there any other reason for the underperformance here?
Akshat Seth
Without naming names, and I would urge you to do a little bit of comparison. I think what’s also important to keep in mind is what is the profitability level that we have and even with these numbers versus the profitability numbers that they will have. The comparison is a slightly difficult one. We continue to be at least 400 to 600 basis points better on profitability compared to any of our competitors, so that’s one point of comparison.
Second, we have sustained our market share, so we have not lost on volume. Being the price leader in the market, there is always a balancing act and in a market which is declining and where there is price pressure, it is always a tough balancing act. We believe we have done a good job this quarter to retain our leadership, both on volumes and on the price premium front. A part of the price erosion was inevitable given how the industry was behaving and which is what is reflected in the slight erosion on the margin or the decline in margin that has happened.
Rohith Potti
See, I mean, in sort of a follow-up to the previous answer you mentioned on how we might reach the $1 billion. I understand roofing as a percentage will continue to go down, but even Parador, which contributes another 1/3 of our revenues, it’s in Europe. And even with growth, do you think it can grow materially to help with our ambition to hit that $1 billion?
In addition to that, on Parador, again, there is a specific question. With this — I mean, Europe is seeing a lot of spending increase, particularly Germany and other regions with infrastructure spending increase and defense spending increase. Do you see that helping our business in Parador as well?
Akshat Seth
Yes. On the first part, of course, Parador has to play a meaningful role in the growth ambition that we have. In the aspirations that we have defined for ourselves, Parador growth, especially in the — in the new markets that we are investing in, which is North America, Middle East, Asia, are important part of this whole game plan. You are aware that we have been investing in these new markets. The idea is that we build this almost to the size of our core markets, and that’s a 3 to 5-year journey. I think the first shoots of green shoots of results on that are now beginning to be visible. This, of course, has a big role to play. I mean, at a minimum, we would expect the revenue from last year to grow about 30% to 40% in this whole journey that we are talking about.
In the short to medium term, as far as the economic and demand scenario in Europe is concerned, yes, there seems to be some sight to recovery. Again, I’m drawing your attention back to the quarter ending March with the new government in Germany, with new investment plans in various parts of Europe, the sentiment was turning. There was a temporary blip with these tariff-related uncertainties. However, there is also now ample evidence that, that should be behind us and there is a positive sentiment that is likely to prevail in the second half of the year.
All of that will mean that a lot of the bottomed-up consumer spending should start coming back. Also, the spending on the construction sector, which was worst affected over the last 2, 3 years, should also start coming back. All of these are great signs as far as Parador is concerned. I will give one last example or illustration of why we are saying what we are saying.
You are aware that in Europe, a part of our exposure or sales channel is those large DIY chains. For us, in the last 6 months, the volume uptick has been phenomenal on the DIY part of our business, which means that there is more footfall coming back into these stores, which again is an early sign on how the sentiment seems to be turning. We remain hopeful and H2 is expected to be much better than what H1 has been. Some of these announcements that happened since the beginning of January should be a good sign.
Rohith Potti
Further follow-up on Parador and with our planned expansion to Middle East and India, etc, it’s not very common to see consumer or — I mean, consumer-facing products or products which are visible to the consumer, manufactured in Europe and being able to price it affordable enough for this part of the world, right?
Akshat Seth
Yes.
Rohith Potti
How do we figure out profitability to manufacture something in Europe and sell in India and have enough volume and revenue to make a difference for the effort that we are putting in? That is one part of the question.
Second part, I mean, a conversation with industry and somebody who worked in BirlaNu you as well, seem to indicate that when an influencer refers the customer to buy Parador because you see Parador products side-by-side with some products made in China, the price difference seems to be putting it off and maybe one potential strategy should be for Parador to have its own stores as well, where the comparison would be with Parador itself or some similar premium stores. Could you speak about the strategy on how we differentiate our products, which is sometimes difficult in products like tiles and flooring, etc. These 2, it will be helpful to hear your thoughts on these 2.
Akshat Seth
See, a big part of the proposition. Even today, as we speak, our products are sold in over 80 countries globally. The big proposition that we have on this global play is made in Europe quality and the design and aesthetic sensibilities that come with our operations there. That is a big part of the USP that we carry.
The second thing is, as we globalize and we start looking at volume play in many of these markets, we are also looking to diversify our supply basis. For instance, when we talk of North America, while a big chunk of it will be supplied from our plants in Europe, we will need to also have some flexibility in the supply choices that we exercise. Similar logic will get applied to our other global markets where we are building a meaningful presence.
You are absolutely right on the influencer part. That’s where I think our engagement with the whole specifier community, essentially the architects and designers is very important. The proposition on — and the difference that our products offer compared to some of the Chinese product is important to translate in those communications because it’s also a product which is a 20, 25-year life cycle product. It’s not a consumable which you use in Pro. There are choices. We will, of course, not be at the same price level as some of these cheaper Chinese products, but there is a quality promise that we are making and which is our calling card in the market.
What is also helpful in our case is that we have a wider product portfolio, which offers a price laddering from — and if I give an India example, we have products that sell from INR100 a square-feet to INR1,000 a square-feet and at every INR150, there will be a product offering. There is a price laddering and depending on what is the price sensitivity of the projects that we are pitching for, there is a different product that is available. That gives us a good leeway. I think the traction we are gaining in markets like India is encouraging.
Rohith Potti
My last question is, we — in our — I mean, the last call and this call, we seem to indicate that construction chemicals and AAC are — I mean, we are expanding there capacity-wise and there are key elements of our growth strategy. I mean, both are broadly commoditized with a lot of competition, right? I mean — and I believe construction chemical as a basket is a very large basket. Having a wide range of products and having the right distribution, etc, so how do we differentiate and grow here? What is our right to win in this?
Akshat Seth
The construction chemical piece, first is not a tactical play. We are building this and we are taking strategic calls in order to build a INR1,000 crores, INR1,500 crore-plus business over a period of time. Hence, the build is essentially around 2 or 3 key pillars. One is we need to have product expertise. Having our own recipes, not necessarily our own manufacturing. On manufacturing, the idea is to remain in a hybrid mode, but having product capabilities and to have differentiated products in the market is one key USP.
Second, having good channel reach. This market is somewhere divided into B2B and B2C. 70%, 80% of the market is still B2C and there, building the right channel and channel penetration becomes important. Third is the brand power of the pull that the brand creates. In this category, the opportunity is that you take any sub-segment, there are maybe 2 branded players and then a whole host of unorganized players, which is where the opportunity for us is to occupy the top 3 spots in the segments that we are choosing to play. A lot of it will require the right branding and marketing effort.
Those would be the 3 sort of ingredients to win in this market that at least we are pursuing. But we are building this business for the long haul. It is not a tactical INR100 crores to INR100 crore player that we are getting into.
Rohith Potti
I’m guessing if that is a target, then we have an acquisition inorganic plan here as well, probably?
Akshat Seth
Absolutely. Like I shared in our key growth segments, whether it is pipes, whether it’s construction chemicals, while organic is an important — is the key driver of growth, inorganic and smart inorganic buys is something that we are in the market for. Anything that helps us leapfrog the growth journey is something that we are very interested in. Short answer, yes.
Operator
The next question is from the line of Nishant Gupta from Minerva Capital Research Solutions.
Nishant Gupta
I wanted to understand your — like when do we expect that the real estate demand or the end customer demand to pick up and all the segments to contribute in a big way? Like I’m not really looking at a very long-term frame where you intend to reach a $1 billion, but what is that inflection point where we see all the segments contributing? Because real estate play, etc, is the luxury projects are getting sold on the other launch, but we see the demand dwindling on the middle income or the affordable housing kind of thing. When do we see all the segments to pick up together?
Akshat Seth
You’re asking when do all our segments start picking up or are you asking, when does the broader macro?
Nishant Gupta
No, when all of your segments pick up?
Akshat Seth
It’s a good question. I’m also thinking which way to address this question. See, I think by all accounts, I would say that we are somewhere at the bottom of the commodity cycle. The demand scenario at a macro level is not exactly robust. There are also liquidity pressures that we have — that we are witnessing in the market. I think you would have noticed, RBI over the last 3, 6 months has stepped in at various points in time to address that.
There is also excess capacity floating around in the market. On the positive side, a lot of the economic indicators seem to be on the right track. The monsoon has been a good one. The expectation is that rural demand should be robust post this monsoon. The festive season should be an interesting one. I think at least my own expectation is the macro conditions in H2 should start improving, but given where we are, the full improvement to take shape, maybe a 2 to 3-quarter journey from there on. As that picks up, I think I am confident that BirlaNu is positioned really well to ride the buoyancy that comes with that across all our segments.
Nishant Gupta
Sir, one more question. You mentioned at the start of the call that we have been gaining market share, right? Is this gaining of the market share coming primarily from the unorganized segment, where we obviously due to the cost competitiveness, those guys are getting out of the market across the segment? Is that the unorganized demand that we are able to capture right now?
Akshat Seth
Is your question with reference to a specific product category or is you are saying?
Nishant Gupta
Sir, like you mentioned that some of the segments have been gaining market share despite the competition, right? I just wanted to understand, where is this gaining of the market share coming from? Like in the construction chemicals or in the wall on the boat segment. Like are we capturing the unorganized market or the organized players are losing the market share, etc? I’m just trying to understand, how the dynamics are shifting?
Akshat Seth
See, the situation is slightly different across categories. Roofs, there is hardly any unorganized segment. The market is fairly consolidated across the top 5, 8 players. There, the story is different. In pipes, there is a big part which is unorganized. However, the unorganized segment plays largely in a very local regional fashion and on price points where we do not operate. We still like to believe that we are competing with the established incumbents in the market, and that is where the gain is happening.
Now many of those players are also gaining share. Now who is actually getting into the unorganized or whatever is coming is — coming on because the industry or category itself is growing is hard to say. But we typically, as a branded player in this industry do not play at price points or service levels or product quality, which the unorganized sector would be in. Hence, my belief is, we are competing more at the upper end of the market.
Operator
The next question is from the line of Ajish from.
Analyst
For the $1 billion sales target, can you tell me any time frame which you guys are able to achieve it?
Akshat Seth
See, given where we are, forecasts are, as I’m saying, I’m staying away from forecast, but the first milestone and what is within our side is doubling ourselves from where we currently are. That line of sight over the next 2 to 3 years is very much on the horizon.
Analyst
Any comment on long-term ROE target or a consolidated operating profit margin, something like that?
Akshat Seth
See, again, at that level that I’m talking about, the idea is to start inching towards the double-digit operating profit level. That is again the first milestone for us to achieve.
Analyst
For the products which are offered by Parador and if you are entering to — and expanding to market like India, so how much is the organized, unorganized market share combination in India as of right now? Do you guys have any numbers?
Akshat Seth
For Parador products?
Analyst
Yes.
Akshat Seth
Overall, Parador type of products in India is INR1,000 crores, INR1,200 crore category. Much of it in recent years, a certain section of it, especially on designer flooring, the vinyl flooring, there are a few local players and also on laminate. I don’t think there is too much of unorganized play here. There is also a fair amount of infusion from China and Southeast Asia produced products coming into the country. In terms of numbers, I would say, these imports will account for about 30% of what is being consumed here. A good 40% to 50% is local production and then the rest is imports from elsewhere. There are no real unorganized play.
Operator
The next question is from the line of Parikshit Gupta from Fair Value Capital.
Parikshit Gupta
This is just on the status for the capacity expansions. For the OPVC plant in Bihar, are we still on track on commissioning in the quarter 4 of this financial year?
Akshat Seth
Yes, we are.
Parikshit Gupta
You mentioned that the Chennai line has already commissioned now, right? What kind of utilization is it currently running at? For the next few quarters, how do you expect that utilization to move?
Akshat Seth
Just one second, I’ll share the numbers with you. As of July, we have already sort of ramped up to about 50% capacity utilization and every month that is ramping up. Our expectation is that we should start hitting the 75% number in another 4 to 5 months’ time.
Parikshit Gupta
While at it, would you be able to please share what was the capacity utilization for all of our segments in this quarter? I know it’s a very limited data point, not to be extrapolated, but I would just like to understand what the numbers were, please?
Akshat Seth
On an average, if I go segment, in roofs, we would be close to 85%, 90%, Ajay, is there a different number?
Ajay Kapadia
This quarter, it is upwards of that. This quarter, it is 100% utilization in roofs. In blocks, it is around 75% to 80% utilization. Panels is 85% utilization. Panels and boards both put together. The pipes business are roughly around 70 percentage utilization.
Parikshit Gupta
Just a follow-up on this. I might be interpreting it incorrectly. Considering that the roofing segment was at a 100% utilization. However, the top line came down. How is this — I mean, is it a factor of built-up inventory or is there something different that I’m not understanding here?
Akshat Seth
At a volume level, there is a very marginal decline. It’s just a 1% decline. Last year, from a volume perspective, again, we were nearing that 100% utilization level. I don’t think there is — revenue drop is largely on account of price rather than volume.
Parikshit Gupta
That would be to the tune of almost 4% you’re saying from the previous year?
Akshat Seth
3% to 4%, that’s right.
Operator
The next question is from the line of Sanjay Kumar Elangovan from iThought PMS.
Sanjay Elangovan
First question on Parador. What was the volume growth in Q1? Also, you would have had significant benefit from currency, the rupee depreciation, right? What was the volume growth in Q1 for Parador?
Ajay Kapadia
Volume growth in Parador in Q1.
Akshat Seth
Parador volume, I think we have dropped by growth — volume terms, there is a degrowth. Price, there has been an increase and that together — so there is a price increase both from the pricing changes or revisions we have done, plus there is a product mix benefit that we have got. As a result, the revenue drop is only about 3%.
Sanjay Elangovan
You also had significant benefit from currency, right? If you can quantify how much we gained from the rupee depreciation?
Akshat Seth
About 6% to 7%. Ajay? Currency?
Ajay Kapadia
Yes, 6% to 7%.
Akshat Seth
Correct.
Sanjay Elangovan
Volume, degrowth was 10%, is it?
Akshat Seth
That’s right.
Sanjay Elangovan
I request you to keep the commentary consistent in the presentation because like last quarter, you mentioned both volume and revenue because we had posted a growth. But this quarter, you have missed it and you mentioned only revenue.
Second, on Parador, what is the share of U.S. revenue? Also, do our competitors, I don’t know, say, Tatket, Mohawk, do they have plants in the U.S. or do they import from other countries? Just asking from the tariff perspective.
Akshat Seth
From a tariff perspective, the interesting bit about the U.S. market is nearly 60% to 65% of the relevant category of flooring is imported into U.S. from various parts of the world. That’s why the tariff situation, especially from our industry perspective, is expected to have some inflationary impact on the price levels in that market.
Sanjay Elangovan
No, do we have any advantage because we manufacture in Europe and, let’s say, others manufactures, where in a high tariff countries, higher tariff countries.
Akshat Seth
See, again, the full picture has to finally emerge, but given the levels that have been announced, there might be a slight advantage. I’ll give 2 examples. One — and this is relative to the imports. Anything that is manufactured in the U.S., there will still be a disadvantage.
Now 2 examples, engineered wood, a large part of the engineered wood top decks, etc, come from Canada, where the tariff level is higher than what it is in Europe. That could be an advantage. Second, there is a fair amount of imports that happen from China, Southeast Asia, where again, Europe will have a slight advantage. But having said that, I’m repeating that production that happens within U.S. will obviously be at a relative advantage compared to Europe.
How does that actually play out? I think we are watchful, but we remain quietly confident that it does not in any way negatively impact our prospects in that market.
Sanjay Elangovan
Second, on roofing, you said in the last call, we asked if 12%, 13% is a new normal, you said the first milestone is 15%, 16%, but now we are sub 10%. How do we look at roofing segment margins going forward? Is 9%, 10% the new normal or do you still think 15% is get, let’s say, a few quarters now?
Akshat Seth
Yes. At an operating profit level, this quarter itself was about 14% for us. Is it lower than what we expected? Yes, it is. I think we would have expected that there is — this is now the second consecutive year where there is a year-on-year price drop. We would have expected a correction to happen this year, which has not come through and which is also part of the reason why the results are less than flattering for most players in this industry. The route to improve profitability has to come from better pricing in the market.
Sanjay Elangovan
Any risk from U.S. tariffs on Brazil? Does that change any raw material dynamics for us?
Akshat Seth
Not directly. I think 2 factors to keep in mind or keep a watch on. One is, of course, the currency exchange rate. Second is how does the shipping freight rates pan out could be another thing to watch out. But specifically, no direct impact on — from the tariff on our raw material supply base. But these are 2 things which are sort of part of the overall value that we pay for that, and that is something to watch out for.
Sanjay Elangovan
Final question on OPVC. We are told that you guys are talking to a Chinese partner for the OPVC machine. We took feedback on both Chinese and the Indian OEMs, but none of them, at least as of now, do not match the quality standards and fail quality tests in terms of, let’s say, the degree of orientation or consistency in orientation across the entire length of the product, so who is our supplier? Who are we talking to? We heard that we are in discussion with Bayer Machinery and not the ones that other companies are talking to like, SAIL, also, or Polytile. Is Bayer qualified to make Class 500 pipes? How is their quality? Where are we on the OPVC journey? Because last quarter, we spoke about it in a big way, but I don’t see any mention in the current quarter or the presentation.
Akshat Seth
Yes. See, it doesn’t matter the source of it, eventually, these are build a new OPVC pipes and the quality promise and the specification promise has to come from our brand. It has to match with what the industry standards, the specifiers, let’s say, a lot of OPVC is bought by government agencies. The specification comes there. And third, BII standards, so we have — we will be conforming to those. There is no question about it. If we are entering into that segment with our brand on it, the product will be more than the specification that is demanded there.
Sanjay Elangovan
Where are we on the journey? I mean, have you ordered machines? What’s the capacity that we are looking at? How many machines?
Akshat Seth
We have not only ordered machine, as I said, we are on track for commissioning production and supplying beginning Q4. We are in advanced stages. Products are being product testing, line testing, commissioning, pre-commissioning activities are currently underway.
Operator
Ladies and gentlemen, that was the last question for the day. I would now like to hand the conference over to the management for closing comments.
Akshat Seth
Thank you, everyone. It’s been a pleasure interacting with all of you over this call. We thank you for taking time out and engaging with us today. We at BirlaNu value your continued interest and support. If you have any further questions or would like to know anything more about your company, the results, kindly reach out to our Investor Relations desk. Thank you very much.
Operator
Thank you. On behalf of BirlaNu Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.