Finolex Industries Ltd (NSE: FINPIPE) Q3 2025 Earnings Call dated Feb. 10, 2025
Corporate Participants:
Saurabh Dhanorkar — Managing Director
Chandan Verma — Chief Financial Officer
Analysts:
Arun Baid — Analyst
Shravan Shah — Analyst
Ritesh Shah — Analyst
Sneha Talreja — Analyst
Ashutosh Khetan — Analyst
Vipulkumar Shah — Analyst
Varun Jain — Analyst
Udit Gajiwala — Analyst
Chinmay Nema — Analyst
Salil Desai — Analyst
Rahul Agarwal — Analyst
Karan Bhatelia — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Finolex Industries Q3 and Nine-Month FY ’25 Earnings Conference Call, hosted by ICICI Securities. 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 the conference call, please signal an operator by pressing star then zero on your touch to. Please note that this conference is being recorded.
I now hand the conference over to Mr Arun from ICICI Securities. Thank you, and over to you, sir.
Arun Baid — Analyst
Good afternoon — good afternoon, ladies and gentlemen. On behalf of ICICI Securities, I welcome all to the Q3 FY ’25 post-results con-call of Industries. From the management side, we have Mr, Managing Director; and Mr, CFO.
Now I hand over the call to Mr for his opening remarks, post before we open for Q&A. Over to you, Mr.
Saurabh Dhanorkar — Managing Director
Good afternoon, ladies and gentlemen. Welcome to the Investors Conference call for Q3 FY ’25 earnings release. We thank you all for your continued support and interest in Industries Limited. FIL registered a modest volume growth during the quarter in-spite of overall weak demand scenario. Operating performance of the company was muted during the quarter due to weaker realization.
Let me now take you through some of the performance indicators for Q3 FY ’25. Total income from operations was INR1001 crores for Q3 ’25, down about 1.8% 0.8% against INR1,919 crores in Q3 FY ’24. EBITDA decreased to INR83 crores in Q3 FY ’25 as compared to INR120 crores in Q3 FY ’24. EBITDA margins during the quarter stood at 8.3% compared to 11.8% in the corresponding quarter of Q3 FY ’24. The company reported a PAT of INR70.96 crores in FY ’25 Q3 against INR89.21 crore in Q3 FY ’24.
Now getting into segmental performance, for the Pipes Fitting segment, revenue remained almost flat at INR992 crores compared to INR991 crores in FY ’24. Volume in the segment increased by 5.5% Y-o-Y to 85,767 metric tons in Q3 FY ’25 against 81,8312 metric tons in the corresponding last quarter. The EBIT in the segment decreased to INR32.13 crore in Q3 FY ’25 as compared to INR74.24 crore in Q3 FY ’24.
Moving to the PVC resin segment, our revenue in the segment stood at INR413 crores as compared to INR321 crores in the corresponding quarter. Volume in the segment increased by almost 30% to 56,830 metric tons against 43,737 metric ton in Q3 FY ’24. EBIT in the resin segment stood at INR39.17 crore as compared to INR30.88 crores in the corresponding previous quarter in this year. The company continues to have a strong balance sheet with a net cash surplus of around INR2,300 crores as on 31st December ’24 as compared to INR1,570 crores in the corresponding previous year quarter.
I have with me our CFO, Mr Chandan Varma to take some of the questions. I also here for your questions. Let me now leave the floor open for questions. Thank you so much.
Chandan Verma — Chief Financial Officer
Good evening, all the participants. Mrs from. Hello
Operator
Yes, sir.
Chandan Verma — Chief Financial Officer
Yeah, you can take the question.
Operator
Okay, sir.
Chandan Verma — Chief Financial Officer
Before we open for the question.
Questions and Answers:
Operator
Okay, sir. Thank you very much. We will now begin the question-and-answer session. Anyone who wish to ask a question may press star and one on their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handsets only while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles we have our first question from the line of Shravan Shah from Dolat Capital. Please go-ahead.
Shravan Shah
Yeah. Thank you, sir. Sir, couple of things to understand. So in nine months, we have broadly done 3.9% volume growth. So how one can look at the 4th-quarter and till now in January and February 10, how are we seeing the volume growth? And if you can also help us in terms of the next year or maybe a couple of years, particularly previously we were looking at 10%, 15% kind of a growth. So how one can look at.
Saurabh Dhanorkar
Yeah, thanks,. Basically, this year so-far in the nine months has not been as good as we expected at the beginning of the year. Overall, the industry has not really performed well. And I believe it’s not just the pipes industry. Overall, of course, there is a weak demand. So the nine months in the Pipe and fitting, we have as I mentioned, slightly above 5% growth. As of obviously, we won’t be able to give exact numbers for January, but January also has not been very exciting. There is a very modest growth. So to give some guidance, we will be, I think hope of closing the year definitely with growth, but more likely a single-digit growth than a double-digit growth. So that unless of course some miracle happens in the next month or so, the demand has definitely picked-up compared to January, February is doing well, demand has picked-up both on the agri and the non-agri side. But overall to achieve more than 10% growth as we estimated at the beginning of the year and to be very honest, it looks like a perfect.
Talking about next year, again, we are enthused by the recent schemes announced by the government of India in the last budget, the Swami scheme for affordable housing, mission extended to 2028, mission for — which will benefit more than INR1.7 crore farmers. So both on the agri and non-agri side, definitely things are looking up. There is fundamentally nothing has — nothing has gone wrong with the economy as a whole. So probably the demand dip on the slight slowdown in-demand, which we saw this year will bounce-back next year. And next year we are I wouldn’t say very sort of hopeful, I would say, quite confident of a double-digit growth.
Shravan Shah
Okay. Got it. But looking at the January and February, is it fair that we can do a 5% to 10% kind of a growth in the 4th-quarter or it would be a kind of a 5%?
Saurabh Dhanorkar
No, yes, yes, yes, definitely, definitely. For the quarter? Definitely. For the quarter definitely.
Shravan Shah
Yeah. And now on the margin front, how one can look at the — because now two aspects to that, one is obviously the anti-dumping duty. So if you can help, is there any kind of a timeline that in next — by end of February, can we see that coming in? And if not, then how do we see the prices on the Q-o-Q front and then ultimately how one can look at in terms of the EBITDA margin front?
Saurabh Dhanorkar
On the resin side for the prices to look up, there are a couple of aspects. One, as you rightly sell the anti-dumping duty and two the BIS quality mandate. Now the BIS quality mandate I think has been postponed to June ’25, so that’s not likely to happen immediately. Anti-dumping duty on the cars, but we have been saying that for the last two, three months, it can happen in the next 15 days, but with the bureaucracy being bureaucracy, you can’t be very sure. So if that doesn’t come through, we are looking at more or less flattish PVC prices.
I don’t think there is any more room for the prices to fall further. If there is anti-dumping duty, then there’ll be an immediate increase. But from our perspective, we also look at the current prices, if there is some stability at lower level, that always then ultimately pushes up the demand for types of settings because people wait for some time to rebuild their inventories because they don’t want to carry inventory when prices are falling. But if there is stability for a couple of months, then yes, the demand will bounce-back. So either way, I think going ahead, I don’t know if January, February is too short a period to make any comments. But if you look at the next six months, then yes, we definitely see a bounced in.
Shravan Shah
So in that scenario, in terms of the margin level, whether at EBITDA level, is it fair that we can have a 11% plus kind of a margin in FY ’26.
Saurabh Dhanorkar
But see, generally, I think as a strategy, as a policy, we have not been giving absolute numbers in as a guideline. But the margins this quarter for our particularly the last quarter dipped a bit because of our competition everybody did a bit of discounting to push-out the stocks. Now that the inventory levels are not very-high, we see the prices despite what happens to the previous resin, we see the pipe and fitting prices moving up marginally because there is no pressure on discount and all that. So yeah, I wouldn’t put a number to it, but yes, we see improvement in margins going ahead.
Shravan Shah
Okay. And lastly on the expansion front, so 40,000, 50,000 tonnes we were supposed to add by March ’25 and for next year, I think the next expansion, we were looking at greenfield, I think 1 lakh plus kind of a number. So if you can update on that front.
Saurabh Dhanorkar
Yeah, out of this 50,000 tons expansion at the current locations, about 45% of that have the machines have already arrived, but we won’t complete the entire 50,000 by Q4 ’25. So about 25,000 tonnes roughly will come in this quarter, Q4 FY ’25 and the remaining 25,000 will go into Q1 FY ’26. So that completes the 50,000 tons capacity expansion at the existing locations. The greenfield capacity is still on-hold because currently, we are still optimizing whatever we have getting rid of the old machines and increasing the capacity at the existing locations because we see a lot of value in that instead of going for a greenfield capex because return on investment on — at the existing locations is much, much better than going for greenfield. So greenfield, yes, it is there on the part of work has been done but too early to share anything, but I don’t think you are going to hear any announcement, at least in the next six months about a greenfield project.
Shravan Shah
Got it. Got it. And the — in nine months, how much capex we have done and for 4th-quarter, how much and next year, given that the greenfield is not there, let’s say, so currently, how one can look at the capex.
Saurabh Dhanorkar
So I think this year we will — I don’t have the exact capex number for nine months, but this year we will end-up slightly above INR100 crores, including maintenance capex. And next year would be more or less similar, nothing, no peak. So because we already — we also have some maintenance capex every year to be taken off — taken care of in the resin plan to between INR100 crores to INR150 crores for both the US.
Shravan Shah
Yeah. Got it. So — and then this cash surplus INR2,300 crore, nothing concrete plan in terms of returning to the shareholders.
Saurabh Dhanorkar
That is for our Board to decide at the end-of-the year 7th. So I really can’t comment on that. But yes, that is one of the possibilities, but obviously that’s the Board’s decision.
Shravan Shah
Okay. Thank you, sir. All the best of all.
Saurabh Dhanorkar
Thank you. Thank you so much. Thank you. Thank you. A reminder to all participants, you may press star and one to ask questions. I repeat, if you wish to ask a question, you may press star and one. The next question is from the line of Ritesh Shah from Investec. Please go-ahead.
Ritesh Shah
Yeah, hi, sir. Thanks for the opportunity. Couple of questions. First is on the land-bank sale. Are we done with all of it or is a part of it still left? And what is the best we have realized so-far?
Saurabh Dhanorkar
Part of it is still left. We don’t intend to sell that immediate. So overall, we had about 70 and odd acres out of which now 10 acres is still left. We are done with the remaining. This year, we have a gain of INR417 crores an odd. And overall, I think
Ritesh Shah
Around INR900 crores.
Saurabh Dhanorkar
Yeah, overall, we made about INR900 crores from sale of land. So we still have about 15% of the land-bank with us, but there is no immediate plan to sell that.
Ritesh Shah
Sir, why the significant gap between INR4170 crores and INR900 crores?
Saurabh Dhanorkar
Sorry, I didn’t get your question.
Ritesh Shah
Sir.
Saurabh Dhanorkar
INR900 is the INR900 crore is overall because we started at a particular price and then obviously, we kept selling 25, 25 this at a time. So the overall gain is about which part of it went into not FY ’23 and in FY ’25, it is INR417 crores. For the land banks which we sold during this year is INR470
Ritesh Shah
That’s useful. Sir, second is possible for you to quantify PVC and CPVC volume growth for the quarter if not say for nine months?,
Saurabh Dhanorkar
Would you be able to help on that?,
Chandan Verma
Can you please repeat the question?
Saurabh Dhanorkar
Volume growth. And
Ritesh Shah
Sir, volume growth for PVC and CPVC separately.
Chandan Verma
So PVC volume growth during the quarter is 30%. So largely this when we are talking about the PVs
Saurabh Dhanorkar
On the PVC pipes, PVC pipes, right?
Ritesh Shah
Yeah, yeah,.
Chandan Verma
So PVC pipe and fitting has gone up by 5% during the current quarter, whereas on the full-year basis, Nine-Month basis, it has gone up by the 4%
Saurabh Dhanorkar
CPVC.
Chandan Verma
CPVC separately, CPVC more or more or less remain at around 3% to 4% increase from the corresponding quarter of the last year.
Ritesh Shah
Sir, isn’t that quite low? In fact lower than PBC also, isn’t it a bit surprising.
Chandan Verma
So what happens with the CPVC we keep pushing in the market. So generally the PVC — CPVC volume remains in the same line from the — quite some time. So we keep pushing the PVC — CPVC product in the market, but overall volume, it will come in gradually, but not instantly.
Ritesh Shah
Okay. And sir, lastly, if you can highlight what is our current capacity? I think it’s around 470 pipes and fittings. If you can bifurcate it in fittings and how should we see this number of 470 going-forward, say, year end and next year.
Chandan Verma
So four — see current 420 breakup is 420 for pipe and 50,000 is for fitting, right? So as Mr rightly explained, if you — in our previous question that we are going to add 50,000 more capacity, partly in Q4 of this year and in Q1 of the next year. So our revised post all this expansion, our revised, pipe capacity will become 4,70,000 and the filling capacity will be — will remain at 50,000 level. So overall basis, we will be at from 470 to 520.
Ritesh Shah
Perfect. That is very helpful. Thank you so much for the answers. And, sir, good to hear you again. Thank you.
Saurabh Dhanorkar
Thank you.
Chandan Verma
Thank you, please.
Operator
Thank you. A reminder to all participants, if you wish to ask a question, you may press star and one. The next question is from the line of Neha Talreja from Nuvama. Please go-ahead.
Sneha Talreja
Hi, sir, good afternoon. Thanks a lot for the opportunity. Just two questions from my end. Firstly, on the demand front, we have seen start of agri season. How is the demand both on the plumbing side and on the agri side? And secondly, we have seen a fall — seen a fall of about INR3 odd in terms of PVC prices. Are you looking at another price drop or how is the PVC price scenario at this point of time? Thanks.
Saurabh Dhanorkar
Yeah, thank you. Basically on the demand front, as I explained to Savan, it has not really taken off as much as we were expecting in January. February is now the last eight, 10 days, yes, we have seen a demand picking-up both on agri as well as plumbing. That is partly because the channels are not carrying too much inventory. So that has helped. But yes, PVC resin prices dropped by INR3 rupees last week. And obviously, there would be a require — we — although we haven’t dropped as yet, there would be some correction on the pipes and fittings prices also because the competition will require — so we are — right now we are watching the competition to see how it goes. But yeah, things are not so aggressive right now for us not to pass-on the dip. So you can expect some dip in the realization. But you are saying it’s one-week down the line and no price downward action by any of the peers or you at this point of time on-ground. This was only about three days ago, three days ago. So we are still — I think everybody is in a because people want to hold-on to the prices, but I think it’s who blinks first. So as of now, we have not gone ahead with any further discounts.
Sneha Talreja
Understood, sir. That’s helpful. Thanks a lot for the opportunity.
Saurabh Dhanorkar
Thank you. Thank you. Thank you.
Operator
Thank you. We have our next question from the line of Ashutosh Ketan from Asian Market Securities. Please go-ahead.
Ashutosh Khetan
Yeah, hi, sir. I just wanted to ask the PVC, ADC and PVC VCM spreads for the quarter as well as the current launch.
Chandan Verma
So PVC, EBC spread during the quarter average it was around INR517 and PVC VCM spread is $757 per metric ton. And as of now, sitting on today’s date, the PVC EVC is 482 and PVC EVCM is $165.
Ashutosh Khetan
Okay, sir. And what — and the second question is about how much percentage of the total volumes is CPVC apparently.
Chandan Verma
Sorry,
Ashutosh Khetan
For the pipes and the fitting segment, what total percentage of volumes is CPVC?
Chandan Verma
CPVC in terms of percentage, I think it’s around 5%, 3% to 4% around
Ashutosh Khetan
The total contribution of CPVC in the total volumes.
Chandan Verma
Now that’s what I’m saying.
Ashutosh Khetan
Okay, okay.
Chandan Verma
So the 5,767 metric ton, around 5% contributes to CPVC volume.
Ashutosh Khetan
Okay. Thank you so much. That’s it. Thank you.
Operator
Thank you. We have our next question from the line of Vipul Kumar Shah from Sumangal Investment. Please go-ahead.
Vipulkumar Shah
Hi, thanks for the opportunity. Welcome back, Dhanov.
Saurabh Dhanorkar
Thank you. Thank you, Ros.
Vipulkumar Shah
So what is our agri, non-agri mix for the quarter and nine months?
Chandan Verma
So for agri during the current quarter, our mix is 67% 33, whereas the corresponding quarter of the last year, it was 68 versus 32 on a quarter-on-quarter basis. And on a Nine-Month basis, our current nine months is 66 34 and whereas in the last year’s nine months, it was 63 versus 32.
Saurabh Dhanorkar
It is going up the ratio of non is going up 100 basis-points at a time, not as fast again as not as fast as we wanted, but yeah, it’s going up. Last year 66% it will move to 68% now.
Vipulkumar Shah
But still it is not reflected in the profitability, sir.
Saurabh Dhanorkar
The profitability this year or especially the last quarter has been affected, let me be very open about it by some discounting which happened across the industry. I think all the players then to some discounting because some inventory which was built-up in anticipation of demand and when the demand didn’t catch-up, there is some discounts which were not normally were thrown in the market. So that has affected. It has nothing to do much with the ratio.
Vipulkumar Shah
So can you quantify the discount, sir, is it possible?
Saurabh Dhanorkar
No, to be very honest,, I can’t predict. But if you see the — despite the volumes going up and PVC prices more or less the same, if you see that the realizations have come down and this is I think more than 50% due to the discounting. But to be very honest, I don’t have the exact number.
Vipulkumar Shah
And sir, what should be our steady-state volume or yearly volume for PVC resins because it has shown 30% growth this year. So is there any one-off or how do you read it, sir.
Saurabh Dhanorkar
No, I think that growth is because last year we had an annual maintenance shutdown and this year we didn’t have. So otherwise, PVC resin plant runs at full capacity. So there is no reason for any onetime increase in low-volume. S
Vipulkumar Shah
O this will be at a steady-state, right? This quarter?
Saurabh Dhanorkar
Yeah. Yeah.
Vipulkumar Shah
Okay. Thank you, sir and all the best.
Saurabh Dhanorkar
Thank you.
Vipulkumar Shah
Thank you. Thank you both. Thank you.
Operator
Thank you. We have a follow-up question from the line of Shravan Shah from Dolat Capital. Please go-ahead.
Shravan Shah
Hi, sir. Thank you again.
Saurabh Dhanorkar
Yes, sir.
Shravan Shah
Sir, yeah. Sir, this agri, non-agri, what our plan is to reach a 50-50 in next three, four years. So that remains intact. And do we think that in three, four years we can reach to that level or maybe it will take much longer time to reach our?
Saurabh Dhanorkar
No, no, no, it is definitely very, very doable. This year — this year, as I said, because the demand generally has been weak, we didn’t — the industry itself didn’t grow and we didn’t really achieve increase in-market share. But going to 15, 4 years is definitely a possibility, definitely. That is the target that is what we are working on. All our plans, all our budgets are aligned with that goal in mind.
Shravan Shah
Okay, got it. And sir, in this 3rd-quarter, was there any inventory loss?
Saurabh Dhanorkar
No, no inventory loss.
Shravan Shah
Okay, got it. And sir, this quarter the other income, which was INR82.6 odd crore was significantly higher. So is there any one-off in that?
Chandan Verma
No, that’s not one-off. It’s basically because of the — it generally consists of interest and mark-to-market gain loss for the securities and investment that we are carrying. So it is only on account of that. Yeah.
Shravan Shah
Okay, okay. So otherwise, otherwise on a normalized basis, one can say kind of a INR50 crores, INR55 crores that’s a normal run-rate in terms of the other income. Obviously it depends on the net cash level it keeps on increasing this will keep some rising, but that’s the way one can look at.
Chandan Verma
So even if you see the current — as you said, it is around the same range that you’re talking about. So current quarter’s other income is INR48 crore only. So within the same range that you’re talking.
Shravan Shah
Okay, okay. Got it. And sir, whenever, let’s say, we will announce the expansion, will it be kind of let’s say, once we reach this 470 odd 1,000 tonnes by June. So from there, only the 1 lakh that previously we have talked about, that’s the range only one can look at. And in terms of overall capex, even whenever we go for a greenfield also, then also it would be a INR300 crores INR400 crore, not more than that kind of a capex is needed.
Saurabh Dhanorkar
That’s right. That’s right. Not like definitely not bothering. There is no plan for anything larger than that. You’re right.
Shravan Shah
Okay. Got it, sir. Thank you and all the best.
Saurabh Dhanorkar
Thanks,.
Operator
Thank you. We have our next question from the line of Varun Jain from Dorat Capital. Please go-ahead.
Varun Jain
Yeah. Hi, sir. So most of my questions have been taken-up. So just had a question on what are the channel inventory levels right now? Do you think the channel is at a very low-level or is it like moderately low? How is it?
Saurabh Dhanorkar
No, channel is at pretty low levels, yes, because with the prices not being very stable and the channel not expecting very price increases immediately. Last month or so, there have not been any buildup in their inventories. So they are, I would say, at low levels, yeah, at levels.
Varun Jain
And do you think there will be an inventory loss in Q4 since there was a price decline of INR3? And since the ADD is not in sight and we are already almost — we have already reached half of the quarter.
Chandan Verma
No, we are not expecting any kind of inventory loss also. So too early to say, but we are not expecting any inventory loss for Q4.
Varun Jain
Okay. Okay, sir, that’s all. Thank you.
Saurabh Dhanorkar
Thank you.
Operator
Thank you. We have our next question from the line of Udit Gajiwal from YES Securities. Please go-ahead. Yeah. Hi, sir. Just one clarification. You said that the Feb month is better than January, but could you give some color as to how is the discounting and the competitive intensity still going on and that will keep on renting the margins to get the volumes?
Saurabh Dhanorkar
No, I think the competitive intensity, which I think prevailed for some time in November and early December, that has now come down because I think people are comfortable with whatever they are carrying. So I think going ahead, they would not be — the normal, of course, price adjustments based on a market, I mean based on the PVC resi prices up pan down will happen, but the extra discounting will not happen now. I don’t think.
Udit Gajiwala
So is it like is that already stopped or that will ease down going ahead? I mean, fair, maybe the discounting could have continued. Is that understanding right?
Saurabh Dhanorkar
No, to some extent, I think the discounts which were probably there were some discounts which were thrown in as a quarterly scheme so something that if you live so much by December, you’ll get so much extra. So that is behind us. So that was for the quarter. So right now, nobody has announced any fresh schemes. So hopefully, the overall realization for this quarter would automatically improve.
Udit Gajiwala
Got it. Got it. And sir, just lastly, since the greenfield capex has been still kept on-hold, do we see any capacity constraints coming in to even grow, say, 10% to 12% CAGR for next two years on enhanced capacity?
Saurabh Dhanorkar
No, I didn’t get your question. You the VCM capacity, sorry, I didn’t get the question.
Udit Gajiwala
Yeah. So sir, with the capacity that we are enhancing with the brownfield for coming year and the next year. If we want to grow volumes by, say, 12%, 12% each for next two years, ’26 and ’27, do we see some capacity constants coming in by ’27?
Saurabh Dhanorkar
Yeah, if we don’t grow — today we are running at about 68%, 69%. So in — by next year, if we don’t go for greenfield, we still have adequate land and this at our Baroda plant at Rapnaghet. So at both the places, the infrastructure is there. So we’ll have to basically decide whether it will be the next expansion will be greenfield or brownfield, but some expansion will have to be considered maybe in second-half — starting from second-half of FY ’26. So we will come to a situation where capacity will be constraint. And in pipes, you know extrusion it takes hardly about six months-to put up capacity other than greenfield. So brownfield, we — if we decide that we are or if we see that we are running short of capacity, we can jack-up immediately. There is adequate infrastructure at Ratnagari and Massar both the places.
Udit Gajiwala
Okay. And sir, sir, for the greenfield capex, is consideration of moving out of these Western regions to put up a plant or there are still no decisions yet, I mean?
Saurabh Dhanorkar
No, it will have to be outside the Western region. Obviously that will make sense. And of course, one of the constraints for this, I don’t know, this must-have been discussed in the earlier conference calls also, but we have this mindset of whenever we go for a location, we go for a full-fledged. We don’t do 20,000, 30,000, 40,000 tons. So it has to be a minimum of 100,000, 150,000 tons kind of a plan. So even as of today, the East market is not that large-enough for us to warrant an immediate decision. Yeah, we are growing in that market, but we can today afford to take a few months more to arrive at that conclusion. I mean, arrive at the decision to start building?
Udit Gajiwala
Got it. And sir, just last one, if I may squeeze in. You mentioned that mission in the budget allocation that could be a tailwind. But do we have any plans to enter the OPEC markets or do we have existing capacity or any plans on it?
Saurabh Dhanorkar
And the OPVC market — OPVC, in my opinion and I believe this has been probably must-have been discussed earlier also is a highly hyped product. Today, the OPVC capacity or the sale-in India is not even 1% of the total pipe base, that 1% may become 2% or 3% and one is not OPVC. I don’t think has anything to do with OPC. OPC will be very, very, very small part of Jal Jivan. Is basically for all sizes of types and so whether somebody has OPVC or not, he can participate very, very heartily in the Jal mission.
Udit Gajiwala
Understood, sir. That that’s something new to hear, but yeah, we get your fine. Thank you for making us a. Thank you, sir.
Saurabh Dhanorkar
Yeah.
Operator
Thank you. We have our next question from the line of Chinme Nima from Capital. Please go-ahead.
Chinmay Nema
Good afternoon, sir. I had a couple of questions on the non-agri side. So if you could share the — as you’ve guided that the intention is to take the non-Agri share to about 50% in three to four years time. I think this guidance has been there for some time. If you could share what are the key three, four initiatives or strategies that are in-place to achieve this? And moreover, what are the challenges that you are facing in scaling up this business?
Saurabh Dhanorkar
When we talk about non-agri, there are two segments to the non-agri market, the retail segment and the project segment. Because of our already-existing large retail, we have been doing whatever, in fact, we have come from — we used to be 80-20 at one-time. So from 80-20, we have steadily moved to now 66, 34%. So there is a steady risk, but that is primarily on the retail side. We have traditionally not been very active on the project side till a couple of years ago. A couple of years when we started really looking at projects and that’s a big business. The project side is a big business for and all the Lodhas and all this that’s a big segment, which we were really not much into. Now since a couple of years, we started that process.
And as we are talking today, we have a very, very active, very strong, very experienced team separately handling the project business. They don’t look at rated at all. Earlier, we were doing the project business through our retail network and through the same salespeople. Today, we have deep contacts with the MVP consultants, with the builders themselves and so that’s what’s driving this. And going ahead, now we are approved in almost 100 with 100 MEP consultants, which we were hardly 10 or 20. So that’s a very, very steady progress we have done on the project side. And I think that presence will surely kick-start a much, much larger growth rate on the side. Retail, of course, we continue to expand the network, we participate in the schemes, we do the marketing mark activities, we work with the retailers, we work. So that’s an ongoing thing. But more than that, I think the big push will come from the project side.
Chandan Verma
And just to add what Mr is saying, we have a — we have developed an in-house analytical team, analytics team. They are helping us to ensure in which segment in which time the demand of a particular SKU or the particular product is coming into. So we are getting into the more detailed analysis of the kind of study where the product concentration, product timing that we are studying, that is also going to going to help us pushing our non-aggressive?
Chinmay Nema
Understood, sir. So what is the current split between retail and the projects on the non-agri front, if you could share that.
Saurabh Dhanorkar
Current project would be hardly 10% to 15% and there is a big, big scope to go higher in that.
Chinmay Nema
Got it, sir.
Saurabh Dhanorkar
Competition for some of the larger players, it is much higher.
Chinmay Nema
Okay. Okay. And on the retail side, in our more established markets where we have leadership in the — in the agri space, could you share how far behind are we from the market-leader in terms of number of SKUs or any other metric that you would essentially gauge for industry positioning of different players in the PVC
Saurabh Dhanorkar
Side?
Chinmay Nema
Sir, on the non-agri side, so basically in the markets where we have a certain leadership where we are on the non-agri side.
Saurabh Dhanorkar
Oh yeah, non-agri side, we do have certain SKUs which the competition has, but we overall in the last couple of years we have caught up with many of them like ball was a big thing we were missing out also. We have a full team and full production of. So that that’s one segment but yeah, the SKUs SKU wise, I think we are still maybe 5.7% behind others but I don’t think that’s really seriously hampering our revenue to a great extent. But yes, we are catching on. We already have plans to add most of them, except maybe a couple of couple of items which we particularly I can’t name them now, but we don’t want to get into. But other than that, I don’t think there will be lacking in revenue because we don’t have any SKUs. So by the end of year, we would be fully equipped.
Chinmay Nema
And sir, what kind of debtors they do we operate and on the retail side? I understand that on the agri side, it’s more of a cash-and-carry model.
Saurabh Dhanorkar
Yeah, agri is fully casual carry. On the retail side about average 45 days.
Chinmay Nema
Okay. Got it, sir. And lastly, and I’ll get back-in the queue after this. On the on the agri side, how should one think about the growth in the medium to long-term perspective? Is it largely the 6%, 7% industry growth or do you see any tailwinds in that — in that segment?
Saurabh Dhanorkar
No, see, basically agri is very much linked to the GDP growth. So typically about 3% plus 2% to 3% higher than the GDP growth. So it’s really linked to the economy. So going ahead, if we are looking at 6% to 7% for the GDP as a whole, maybe about 10%, 9% to 10% for the agri side.
Chinmay Nema
Got it, sir. That’s very helpful. Thank you.
Operator
Thank you. We have our next question from the line of Desai from Marcellus Investment Managers. Please go-ahead.
Salil Desai
Thank you. Sir, I did not quite understand this discounting bit that you explained. Did you mean to say that in the quarter-end in December, there was heavy discounting, which has now stopped or it was there in-quarter two and wasn’t there in-quarter three.
Saurabh Dhanorkar
No, it was there in-quarter three. And as I said, these were basically discounts which were not prevailing earlier and which were not linked to the drop-in PVC prices. These were discounts announced in the form of, say, quarterly schemes that if you — for a particular dealer or distributor, if he left X quantity of by December 31st December, then he would get 1%, 2%, whatever extra. But these were discount schemes, not as a reduction in the basic price itself, but these were additional incentives offered for lifting before 31st December. So as of now, obviously, they have been very wrong because the schemes ended on 31st December and we don’t foresee that coming back now.
Salil Desai
I see. So in that context, if, let’s say, if the quarter three had some of these discounts which have not been there as part of regular practice. Then the profitability improvement in pipes and fittings from quarter two to quarter three, what would you attribute it to if you had to break-down the top two, three drivers of this. What would those have been?
Chandan Verma
So first driver definitely would be the volume. So volume see if you see even a quarter-on-quarter growth from the Q2 to Q3, there is a significant increase in the volume. So volume from the quarter two to quarter three have gone up by 24% that is the major contributor to the earning that we have taken.
Salil Desai
Okay. That would be like bulk of the change or there have been some
Chandan Verma
But that is why we are getting the — our profitability during the current quarter. So 24% jump from the last quarter is a massive jump. That has contributed to the bottom-line. I see. Okay, all right. Thank you very much. That helps yeah, I’m done interm question. You can proceed.
Operator
Thank you. We have our next question from the line of Rahul Agarwal from Asset Manager. Please go-ahead.
Rahul Agarwal
Yeah, hi, good afternoon. Thank you for the opportunity. Sir, three questions. Firstly, you said Jan, Feb is seeing better volumes. Just wanted to understand how is it different for plumbing versus agri? Could you just break that down? And qualitatively, could you make us understand how do you see plumbing volumes progressing in this quarter, please? That’s the first question.
Saurabh Dhanorkar
As I said, January was more or less flattish. January — this increase what we have seen is only in the last 10 days or so in February. January, there was no great. But February now we see agri, especially when it picks up, it just — it picks up. So more on the agri side, there is a very, very clear visibility of this. On the non-agri side, yes, we have buy a few new projects and that is driving the growth. And overall, as I said, the channels are not carrying too much of inventory. So the slowdown which happened in the last quarter or even till January, today what is the demand pickup overall, the channels are now — have started stocking up.
Rahul Agarwal
Got it. So-far Jan been flat Y-o-Y, Feb, 10 days, agri has picked-up faster, non-agri is more projects and retail non-agri is still slower, it just started to pick-up. Is that correct?
Saurabh Dhanorkar
Yeah, more or less.
Rahul Agarwal
Got it. Sir, secondly, on Mission. I mean, this topic has been discussed quite a bit now on plastic pipes. I always assumed that the project orders under Janjeevan Mission were not very big for companies like us. So could I understand like, let’s say, fiscal ’25 or ’24 in terms of volumes, did really participate into Jan mission? Is it like some decent amount of volumes we have sold under this project.
Saurabh Dhanorkar
Yeah, yeah. Basically see mission is not that the government buys directly from us. So it’s basically the pipes go all across and it is spread all over India. So wherever you have a distributor, retailer the pipes should flow into that and basically mission is to bring water on tap to every household. So I think somebody mentioned about OPVC. OPVC is a very small part of that. So many of our dealers have participated very, very actively in the projects. This happens at even village levels so because of our strong presence everywhere, compared to some of the competitions, we are doing much better in the
Rahul Agarwal
Got it. So would you attribute the Nine-Month sales volume being slower purely because on a Y-o-Y basis, because JGM volumes have been much lower this year. Is that understanding correct?
Saurabh Dhanorkar
No, I don’t — I said I — that’s it. Because as I said, the pipes in the mission go — we definitely know that a lot of pipes go, but we don’t track because when my distributor buys, let’s say, 20 truckloads in a month, out of that two truckloads may be going to or six maybe going to. We don’t — frankly we don’t track that. Yes, because we see that the pipes go, we get feedback. When we talk to them, we get that feedback. But we don’t have a system of tracking every pipe which has gone into the mission. So to be very honest, I won’t be able to give a very, very definitive reply to that question, the how much has the Jan Jivan mission contributed positively or negatively on our growth? Overall, yes, overall has definitely contributed to the growth in the pipes business as a country, as an industry, definitely. But in the nine months, whether we did better or not to be very honest, I don’t have those numbers.
Rahul Agarwal
Right, right. Yeah, I understand that. I understand the limitations. But for the overall industry, would you have — Hazard a guess is in overall sales volume for JJM over 12-month period, how much would that be? Would it be like upwards of 3 lakh tons or maybe higher than that
Saurabh Dhanorkar
As a — as an industry or for us
Rahul Agarwal
Outlook for the industry. For us I understand.
Saurabh Dhanorkar
Yeah, yeah, it would be easily, easily both to 3 lakh tons but maybe slightly higher than that.
Rahul Agarwal
So maybe I should like 5 lakh tons is a reasonable assumption.
Saurabh Dhanorkar
Yeah. Yeah, yeah.
Rahul Agarwal
Okay. Okay. Get it, sir. And thirdly, the last question on new product pipeline, both under — and mostly on the — on the non-agri, agri, whatever, but PVC, CPVC, how does the new product pipeline look like for fiscal ’26 ’26 for Phenolex? Any meaningful innovations or R&D which is happening right now, which you are excited about?
Saurabh Dhanorkar
Yeah, I don’t think any meaningful R&D happens in the pipe and fitting industry worth talking about to be honest. But yes, new products like the for the CPVC for fire sprinklers there. Some of those, I mean the same pipe, this slight modification goes into a different applications. And yes, we are following them and we are getting into all those applications. But if you ask whether any big R&D is happening, no, I will not at, not at any of the this that pipes will be pipes will be pipes, fittings will be fittings, you will have brass fittings, you’ll have CPVC fittings, you will have so something which is going to be earth-moving, no, nothing is going to happen there.
Rahul Agarwal
Okay. Got it, sir. And you said on the credit period on agri is cash-and-carry, non-agri retail is 45 days. How about non-agri project, sir? How would you handle your no slippage on the balance sheet on receivables? How does that work right now for?
Saurabh Dhanorkar
No, sorry, I didn’t get the question. What was it? How do we —
Rahul Agarwal
I’m referring to non-agri project business, which right now is pretty small, 10% to 15%. But incrementally, if we take more projects, how would we ensure the balance sheet quality in terms of no receivable issue and what is the credit period you’re offering on projects?
Saurabh Dhanorkar
No, basically, again, when we talk about projects, we don’t supply anything directly to the builders. It is all through our channel. So the credit will remain the same to the channel. It is for the channel partner to then tie-up with the builder to see how he manages his cash-flow. We have no intention of increasing our — just because we are more into projects, we have no intention of increasing our credit limits for them.
Rahul Agarwal
Okay, perfect. And these dealers are also in under channel finance for non-agri sales
Saurabh Dhanorkar
Yeah, yeah, they are there trans.
Rahul Agarwal
And incrementally that should increase or is it like almost done there?
Saurabh Dhanorkar
You mean the overall number of the number of partners or number of the amount of credit you are saying?
Rahul Agarwal
Yeah. I was saying the channel finance penetration within the existing channel network, is that reasonably covered or you think there is more scope for channel finance for dealers right now?
Saurabh Dhanorkar
So there is scope for channel finance when we arrange channel finance for them through banks, I think it’s more of the banks following-up with them and getting them in their fold that’s in the interest of the banks. So that’s an ongoing process and not all of our — not all the dealers are today availing tenant finance. So there is scope for increase there. But without affecting our credit quality.
Rahul Agarwal
Yes, perfect. It’s all non-recourse, right, non-recourse to
Saurabh Dhanorkar
Yeah, absolutely,.
Rahul Agarwal
Perfect, sir. Thank you so much for answering my questions and best wishes to you, sir for the next year.
Saurabh Dhanorkar
Thank you.
Rahul Agarwal
Thank you. Thank you.
Operator
Thank you. We have our next question from the line of Karan Batelia from Asian Market Securities. Please go-ahead.
Karan Bhatelia
Hi. Am I audible?
Saurabh Dhanorkar
Yes, yes, absolutely.
Karan Bhatelia
Sir, my question is with respect to the PVC resin business, while the volumes are up 30%, spreads are better on a Y-o-Y basis. But still the EBIT per kg remains to be at INR7. So can you make us understand?
Chandan Verma
So see the prices of PVC that we sell to the more captive position is largely depend upon the market — it’s a market-linked price. So as the prices of PVC in the market will go down, our transfer price to the other segment will also go down. So you see there is a decline in the — from the Q2 and Q3 both, there is a decline in the PVC prices. So that has resulted in the lower realization per.
Karan Bhatelia
Okay. I was referring more on the Y-o-Y number, sir.
Chandan Verma
Even for a Y-o-Y basis, overall basis, the PVC prices have seen a declining trend. So that is how this is referring to this while our realization per ton is going down on a Y-on basis also.
Karan Bhatelia
Okay. Okay. And how is our business doing? What’s the capacity utilization there and any CapEx plans?
Saurabh Dhanorkar
See,, we don’t actively participate in their management. So we are more like a — though we consolidate their numbers, we are more like a passive investor. That business is growing, business doing well, but I’m — we understand they don’t have any large capex plans. But beyond that, to be honest, we don’t have any exact numbers with them. It’s only at the end-of-the year, we just — I think we catch-up with whatever they are doing and consolidate them in this. We don’t actively participate in the decision-making.
Karan Bhatelia
All right. All right. And lastly on the SKU addition, so can you help us out if the focus remains on the non-agri side, how faster will be the SKU offerings that will increase over next two to three years?
Saurabh Dhanorkar
So this year itself, we have — this is an ongoing process adding to the SKUs. So as I said by probably by FY end of FY ’26 or early FY ’27, I don’t think there’ll be any SKUs which we don’t have and the competition has.
Karan Bhatelia
All right. So this could be in the range of 2,500 SKUs no as on-date.
Saurabh Dhanorkar
Yeah, yeah, we have more than 2,500 years. Okay. Okay. Thank you. Thank you very much. That’s it
Operator
Thank you.
Saurabh Dhanorkar
Thank you.
Operator
Ladies and gentlemen, that would be the last question for today. And I now hand the conference over to the management for closing comments. Over to you, sir.
Saurabh Dhanorkar
Thank you. Thank you. Thank you, everyone. Thank you for your interest in the company. Thank you for your questions. I hope we have answered most of the questions. And you are most welcome to get-in touch with us with Chandan Varma. If you have any follow-up questions, we’ll be very happy to answer them. Have a wonderful day. Thank you. Bye.
Chandan Verma
Thank you all. Thank you for all the participants and sir, great time ahead.
Operator
Thank you. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.