HIL Limited (HIL) Q4 FY23 Earnings Concall Transcript

HIL Limited (NSE: HIL) Q4 FY23 earnings concall dated May. 17, 2023

Corporate Participants:

Siddharth Rangnekar — Investor Relations

Akshat Seth — Managing Director and Chief Executive Officer

Saikat Mukhopadhyay — Chief Financial Officer

Ajay Kapadia — Vice President – Finance and Accounts

Analysts:

Baidik Sarkar — Unifi Capital — Analyst

Pritesh Chheda — Lucky Investment Managers — Analyst

Shubham Agarwal — Aequitas Investments — Analyst

Rajat Setiya — ithoughtpms — Analyst

Nikhil Upadhyay — SIMPL — Analyst

Satish Kumar — InCred Capital — Analyst

Nikhil Gada — Abakkus Asset Managers — Analyst

Keshav Garg — Counter Cyclical PMS — Analyst

Ashwin Reddy — Samatva Investments — Analyst

Deepak Poddar — Sapphire Capital — Analyst

Manish Dhariwal — Fiducia Capital — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to HIL Limited’s Q4 FY ’23 Investor Conference Call. [Operator Instructions]

I now hand the conference over to Mr. Siddharth Rangnekar from CDR India. Thank you, and over to you, sir.

Siddharth Rangnekar — Investor Relations

Thank you, Nirav. Good morning, ladies and gentlemen, and welcome to HIL Limited’s quarter four and FY ’23 results conference call for investors, analysts. Today, we have with us Mr. Akshat Seth, Managing Director and CEO of the Company; Mr. Saikat Mukhopadhyay, CFO; and Mr. Ajay Kapadia, Vice President, Finance and Accounts. We will first have Mr. Seth making the opening comments, and he will be followed by Mr. Saikat, who would take us through the financial perspectives.

Before we begin, I would like to state that some of the statements made on 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 and is also available on the stock exchange website.

I would now like to invite Mr. Akshat to share his views on the performance and strategic imperatives that lie ahead. Over to you, Mr. Akshat.

Akshat Seth — Managing Director and Chief Executive Officer

Thank you, Siddharth; and good morning, everyone, and a very warm welcome to HIL’s FY ’23 and Q4 earnings call. Thank you for taking the time out today to join us and understand how the performance has been for us and how do we see the next few quarters panning out for us.

So, in this call, we will share and cover two things. We’ll talk about the performance in the just concluded year and quarter; and how are we poised in the short-run. We will also use this occasion to share a glimpse of how we are steering HIL towards an era of fast-paced value-building growth.

So at a consolidated level, HIL reported a revenue of INR3,479 crores with a PBT of INR117 crores for the full year FY ’23. This includes revenue of INR863 crores for quarter four and a PBT of INR4 crores for the same quarter. Overall, despite a difficult year, this performance reflects HIL’s inherent agility and resilience. And I’ll talk about how this has panned out at for our various business segments.

Within this consolidated picture, HIL India delivered its highest-ever standalone revenue of INR2,155 crores. In fact, this is the first time we crossed the INR2,000 crore mark. And this represents a healthy growth of over 9% compared to the previous financial year. The PBT was at INR164 crores for the India part of the business. For quarter four, the revenue stood at INR512 crores with a PBT of INR21 crores.

Breaking the India performance down to the various segments, the first segment is our Roofing Solution segment, and I’m proud to share that we have delivered the highest-ever revenue of INR1,115 crores, representing a healthy growth over the previous year. In doing so, we have extended our number one position in the market with significant improvement in volumes and pricing. A lot of this performance was driven by the Charminar brand, which has a rich 75-year-plus legacy of trust and is a big, big calling card for us in the market.

We remain at the cutting-edge of product quality and innovation and are deepening our distribution and reach to more remote locations, including deployment of digital tools and e-commerce for reaching out to our customers and end consumers. The start of this financial year ’24 in April saw slower volume uptake due to the festive season and high volumes of rains. And this meant a slightly muted demand sentiment at the start of the season. However, recent trends indicate that the season is picking up, and we believe that this will offset the slow start, and in the next four to six weeks, we should cover the deficit from the soft start that we experienced in April. Overall, last year, the high delivered cost of raw material did impact margins adversely. And it will remain a factor in this quarter as well.

The Building Solutions segment, our second big segment, remains a strong pillar of our thrust for our future growth. Last year, we ran at near 100% capacity utilization. And we grew our topline by 27% compared to the previous year, and crossed a INR500 crore milestone for the first time. There were strong efforts in driving operations in logistics efficiency, which is delivering for the Company’s significant gains and profitability in this segment. And we crossed the 9% profitability mark for the year, and this trend — this upward trend is likely to continue.

In this segment, we will continue our growth push through both organic — through both inorganic and organic means. Last year, our successful integration of FastBuild is a case in point. In this year, in FY ’24, new greenfield capacity for panels and brownfield expansion for blocks in Golan and Jhajjar will drive further growth. This will be followed by a new greenfield capacity for blocks in the Southern region.

Moving on to our third segment, the Plumbing segment. We achieved an impressive volume growth of 23% in this year in a market that witnessed once in a generation meltdown and volatility of input PVC resin prices. We are aggressively growing our channels. So we are increasing our reach and investing to expand our product range. We already have a portfolio of 1,500-plus SKUs of pipes and fittings. We have recently entered the underground drainage segment by commissioning our state-of-the-art facility for Foam Core pipe at our Thimmapur plant.

As we enter the second month of FY ’24, PVC prices remain in a soft territory, and that has had an impact on demand and prices. However, we believe that at these price levels, PVC prices seem to have bottomed-out and that demand recovery is around the corner. And we believe that the outlook for demand for the rest of the year looks healthy.

The Putty segment has been marked by intense competition and a soft price regime. In this scenario, our team has focused on the twin plans of cost reduction through R&D efforts and improving the price positioning with increased market pull and brand pull. As a result, we have expanded our market presence to South and East India through new trading locations closer to those geographies.

And finally Construction Chemicals, which is our exciting new foray in a space, which offers both high-growth and profitability. It is building on the channel strength that we have already built and acquired for putty. And we are driving synergies on those two segments. In the last year, we have built a solid platform, so FY ’23 was the first year for this product segment. And in this short time, we have built a platform with diverse product assortment, we’ve built our own proprietary recipes and a strong network of vendors and partners that is driving the growth. At this moment, we are focused on the North and West markets. And eventually, we will make it up pan-India footprint for us in this segment.

And moving on to our European footprint with Parador, where we reported a revenue of INR1,324 crores for FY ’23 with a loss of INR40 crores. The geopolitical crisis, high inflation and uncertain demand presented a challenging year for us in Europe. However, the Company and our team was sharply focused on demand fulfillment and costs, while we were leveraging the inherent strength of our product design, innovation and quality. And that meant that Parador actually outperformed its peers in the market.

The good news is that coming off quarter four and early part of April and May, the cost pressures have started easing out and the demand is picking up. We are optimistic of Parador’s prospects going forward. In fact, we at HIL are committed to deepening the Parador brand and its presence beyond Central Europe to other parts of Western Europe, North America, Middle East and Asia. In this pursuit, we have incorporated a new legal entity in UK during the year.

At HIL, and this includes both India and for Parador, we believe that our product segments and the markets we play offer us significant headroom for value-building growth. In line with his belief, we at HIL are investing in capabilities that will enable us to realize this growth potential. And these investments are for the medium-to-long run. We are investing in our brands and building a deeper connect with our customers and consumers. We are investing in building capacity and competency of our teams on the shop floor at the front line and at our R&D centers. We are also investing in modernizing our manufacturing facilities and R&D to drive quality and innovation in our products.

To fund these investments, we have doubled up our focus on value extraction from our operations. We are driving operational efficiencies and continuous improvement in our cost structure. And a key lever for that is digitization of our shop floors. There are IoT based solutions that have been deployed in the last year and we are continuing in that direction. We are using data and analytics to drive decision-making and an organization-wide thrust towards applying Lean Six Sigma principles to derive further value.

In conclusion, short-term headwinds aside, the fundamentals and prospects of HIL’s business remains attractive and we remain on course to achieve our FY ’26 ambition of $1 billion turnover with robust profitability.

On this note, let me invite our CFO, Saikat, who will provide us a detailed overview of the financial performance for the year. And we are available to answer any questions you may have post Saikat’s remarks. Thank you for your attention.

Saikat Mukhopadhyay — Chief Financial Officer

Thanks, Akshat. Good morning, everybody, and thank you all for joining the earnings call today. I’d like to take this opportunity to provide an overview of our financial performance during Q4 and FY ’23. As Akshat mentioned, despite the strict challenges which were posed by the geopolitical situation and also the resulting headwinds that we faced, our team really worked very diligently to minimize that impact on our financial performance during the year and the quarter.

I’m very pleased to announce that our consolidated revenue for the year stood at INR3,479 crores, with an EBITDA of INR248 crores, and a PAT INR97 crores, thereby reporting an earnings per share of INR129.09 per share.

In terms of business segments, our Roofing business grew by 7% in FY ’23 year-on year and amounting to INR1,115 crores, indicating a higher market share, which have strengthened our leadership position in this segment. We continue to expand our geographical reach in Tier 2 and Tier 3 markets to enhance digital connect with our customers. We also continue to enjoy highest margin in Roofing business amongst the competition.

Similarly, our Building Solutions business grew by 27% year-on year during FY ’23, surpassing the INR500 crore for the first time. This segment has made a good progress in the last couple of years. We are confident of continuing this growth by adding additional capacity as we move on.

Our Polymer business also showed positive growth, with revenues amounting to INR536 [Phonetic] crores during FY ’23, an increase of a percentage from last year. Increasing capacity utilization and demand for these products are driving this business and we are on track to make it a pan-India brand offering by expanding our distribution network.

Finally, on the Parador Flooring Solutions business, it generated a revenue of INR1,324 crores during FY ’23, which saw a decline of 15% over last year due to challenging geopolitical situation at Europe.

At a consolidated level, our debt stood at INR407 crores and the debt-equity is at 0.33. We are confident that our debt levels will not hinder our growth initiatives or our ability to navigate through the challenges in the marketplace. To tame inflation, RBI had announced multiple rate increases which had impacted the overall finance cost during the year. The similar impact was also seen in Parador due to rate hikes ECB, resulting in an increase in Euribor, which was earlier negative to 3% now, more than 3% now.

We are committed to invest in upgrading our existing infrastructure, augmenting health, safety and environment setup, and also invest in modernization of our existing plant and machinery. Over and above, normal maintenance capex, we will also expand capacity in existing block and panel plants and invest in introducing new SKUs for pipes and fittings. Overall, we are planning to spend around INR150 crores capex during the year; of which, 70% will be funded through internal cash accruals.

In Parador, we will spend on sustenance capex close to EUR3 million to EUR3.5 million. The Company’s net worth has further increased to INR1,242 crores at the end of FY ’23. On 31st March ’22, the similar number was INR1,166.

With this, I would like to conclude my remarks and hand it over to Siddharth. Siddharth?

Questions and Answers:

Operator

Thank you very much. [Operator Instructions] The first question is from the line of Baidik Sarkar from Unifi Capital. Please go ahead.

Baidik Sarkar — Unifi Capital — Analyst

Akshat, hi, good morning and welcome to the fold [Technical Issues]. Couple of questions. There seems to be a complete meltdown in the Roofing margins the last quarter. We’ve given to understand from the industry that the tax rate as such took reasonable price hikes towards the end of Feb and March, but obviously that doesn’t seem to have stemmed the floor. Could you please deconstruct this fall in margin across the different cost hedge for us, because there’s been multiple headwinds on right from fiber to cement to freight and all of that, and on pricing as well, right, where all the stress coming from?

And in Q1, I’m sorry, I missed your comment on the margins expected going forward in Roofing. And on the same note, on Parador, there were initiatives to grow the market in the Western and Northern Europe under Dhirup starting Q3, of course, we haven’t spoken in Q4. So the numbers per se don’t indicate any material derisking from our existing geography. So what’s happening there? What’s your sense of revenue and profitability? How are you imagining the next year for Parador.

Akshat Seth — Managing Director and Chief Executive Officer

Sure. Thank you for that. So, on Roofing, large part of the story has been around the input cost increase. In fact, in the last few quarters beginning August there has been a increase of nearly 25%, depending on which raw material overall between 3% to 25% increase in the raw material cost, and that has resulted in a shaving of nearly 10% from a contribution and margin perspective. The price increase that has happened and within it was quarter four, has been in the range of 3% to 4% for various players, including us. And depending on the geography region there have been differences. So that managed to offset a part of the increase, but it has not covered the entire cost increase that has happened. So, I think that’s been the reason why the margins have eroded. In this quarter, that same trend of, I think, given Q1 last year was good from a cost perspective, that impact will be felt this quarter as well. [Speech Overlap]

Baidik Sarkar — Unifi Capital — Analyst

So when does this normalize?

Akshat Seth — Managing Director and Chief Executive Officer

I think our expectation is — so let me just complete the quarter one picture. Early part of quarter one, there have been very small price increases, I think, we are talking in the range of 1% to 2%. And given the demand offtake was soft, there was less opportunity to pass on more. As demand picks up, there might be some opportunity, but overall normalization might take a few quarters. It is unlikely to happen in the next few weeks and month.

Baidik Sarkar — Unifi Capital — Analyst

But what’s the delta, Akshat? Because, Q1 is when the bulk of your profit pool from Roofing accrues to you, right. So if you miss the season, FY ’24 is pretty much gone up, right? So, what’s the delta, because your volumes were the highest in Q1 and there really is no reference range between Q4 and Q1, right, because of the difference in volumes. So, assuming, we see average 25% on an average the previous three years, right, ’21, ’22, ’23, what’s the ballpark you’re looking at this year?

Akshat Seth — Managing Director and Chief Executive Officer

I think delta in margin roughly we are looking at about a 4% to 5%. We are hopeful as demand picks up that we should be in a position to cover part of it. But that’s the envelope that we are looking at at the moment.

Baidik Sarkar — Unifi Capital — Analyst

[Technical Issues] So basically what you’re saying is we should expect something in the ballpark of 17% to 18% as far as Q1 is concerned for Roofing?

Akshat Seth — Managing Director and Chief Executive Officer

That’s right. And again, we are watching the situation as demand picks up. And there is opportunity to pass on price to the market. This might look better than what we just spoke about.

Baidik Sarkar — Unifi Capital — Analyst

Would you reckon that there has been a very strong increase in the supply side as well, which is hampering pricing, not just for us, but the industry? Is this more a supply-side issue or still more a cost side issue?

Akshat Seth — Managing Director and Chief Executive Officer

I think it’s largely a cost side issue. And there is a lag between — so the increase that happened for a combination of reason, it was availability, it was sea freight, it was also a forex exchange impact that came in. It happened in a very small period of time and the prices obviously could not be passed on at that same speed. So, there is a little bit of a lag there. I don’t think structurally there is anything at a disadvantage overall. And in the next few quarters, we would expect the normalcy to be started.

Baidik Sarkar — Unifi Capital — Analyst

Sure. And given that we have taken multiple price hikes the last fiscal, assuming volume growth to be in the range of, say, in 1%, 2%, would you reckon that the revenue growth in Q1 could more be in the range of 5% to 6% or even would that be a very optimistic scenario?

Akshat Seth — Managing Director and Chief Executive Officer

I think that will be the top-end of what one should expect. Given April wasn’t off to a relatively softer start, that’s why we are slightly cautious, but we are cautiously optimistic on this, because in the last week, 10 days, the key markets have started showing signs of picking-up, and that is good news. And the expectation is that the next four to eight weeks we will be in a position to get the season back on track. Like you said, Q1 is important for us.

Baidik Sarkar — Unifi Capital — Analyst

Okay. And your comments on Parador, please.

Akshat Seth — Managing Director and Chief Executive Officer

Yes. So Parador, I think, we are aware of the situation in Europe found itself first half or first three quarters of last year. The good news is that on macroeconomic parameters, things have bottomed-out and [Technical Issues] in the positive territory. So consumer confidence index first signs of it recovering. Inflationary pressures and cost pressures have eased out. And in fact, even if we compare for Parador from its peak around June of last year, the material costs have dropped by nearly 25% and that is showing up even in our numbers, of course, it comes with a little bit of lag given the inventory build-up and so on.

And the third on the demand side, things are picking up. In fact, the last quarter was represented a better performance than the previous two quarters for us. So there is a change in direction, even within the last quarter, month of March was a great month for us and that trajectory and that direction will continue. So that’s as far as the short-run is concerned. And as the inflationary pressure comes down as the consumer index goes up, I think demand will only strengthen from where we stand today.

So the outlook remains strong. What we are also doing and this is now from a medium-to-long term, you also mentioned there were — in our earlier calls, we have shared that there is whole growth and diversification of markets that we are putting in place. I think, we have used this time to add momentum to those efforts. There is a bunch of six to seven markets that we have identified as priority markets outside our home of Central Europe, these are in Western Europe, in North America, Middle East and Asia. And we are building these markets not just from a tactical play of the sales outputs, but almost building it as independent businesses, and the focus really is on each of these market, getting the product assortment right, getting the brand and our brand positioning right, getting the pricing right. And that’s why in the last quarter or so and we continue to do that, we are building teams that will service these markets almost on a dedicated basis. So that’s the foundational work that is on and I think the results will start showing up in the next few quarters. Already the order book coming in from these markets look much better and very healthy and augurs well for what the prospects in future will look like.

Overall, [Speech Overlap] if I may just conclude, overall, for this year, we are far more optimistic than the performance of last year. Last year was an aberration. If we go back to the year before and — or the two years before that, we have to restore the trajectory that we were on. And I think we are fully confident of getting there in this year.

Sorry, there was a question.

Baidik Sarkar — Unifi Capital — Analyst

Yeah. So, I mean, just the last question before I get back. So will Q1 see breakeven or should we wait till Q1 — till probably Q2 for that?

Akshat Seth — Managing Director and Chief Executive Officer

I think we will have to wait for Q2 and Q3 for that. There are also — so it will be breakeven definitely, I think, at an EBITDA level, we are already breaking even. We did breakeven in Q4 also. And at a PBT level, Q2, Q3 is where we should look at.

Baidik Sarkar — Unifi Capital — Analyst

Thanks, Akshat. All the best.

Akshat Seth — Managing Director and Chief Executive Officer

Thank you so much.

Operator

Thank you. [Operator Instructions] The next question is from the line of Pritesh Chheda from Lucky Investment Managers. Please go ahead.

Pritesh Chheda — Lucky Investment Managers — Analyst

Yes, sir. I’ll ask three questions, because I have one each for the three divisions. In the Parador business, you mentioned that cost pressure started easing out and you’ve also mentioned that the 25% drop in material cost from the peak. Yet, when we see the EBITDA absolute there is an increase in loss. So if you could reconcile that? And when do you see yourselves moving back to the peak EBITDAs that you had seen in Parador business? That’s the first question. And I’ll ask the other questions on the other two divisions after this.

Akshat Seth — Managing Director and Chief Executive Officer

I think the cost on Q4 is largely due to a one-time employee cost that was adjusted at the end of the year. So it is one-time in nature, and that should not influence the numbers for next year — next quarters and in this year. So that’s on the first one. I think it will — the first focus for us is to restore the revenue trajectory. And there are investments we are making in building these markets to come back exactly to the profitability that we were at a couple of years ago, I think we are looking at three to four quarters to get there.

Pritesh Chheda — Lucky Investment Managers — Analyst

Which means, if you do not clock INR400 crores of revenue, you do not clock the older margins at INR350 crore revenue, at max you are basically breakeven. Is that the assessment?

Akshat Seth — Managing Director and Chief Executive Officer

That is correct.

Pritesh Chheda — Lucky Investment Managers — Analyst

Okay. My second question is on the asbestos side. Any impact of this season of no rains or lower rains and substantially lower asbestos volume roofing sheet volume by any chance?

Akshat Seth — Managing Director and Chief Executive Officer

No, I think it’s — I think we have to see the season as a period of three to four months. There is enough optimism in the system and there are signs indicating that, that as the season we will be all right despite a slightly [Technical Issues] in early part of April apart from rains, there was the festive season, which kept people [Technical Issues] but I think this time in key markets, which are important for us are all very positive.

Pritesh Chheda — Lucky Investment Managers — Analyst

But is there any historic correlation between lower rains and asbestos volume by any chance?

Akshat Seth — Managing Director and Chief Executive Officer

There is, but it comes with a lag. So bad rains or relatively poorer rains this year will have an impact on the season in the following month and in the following season.

Pritesh Chheda — Lucky Investment Managers — Analyst

And my last question is on the polymer business. Competing companies in the piping has have communicated about restoration of margins by lower PVC prices. Will we see the same where our EBITDA will entirely get recouped in FY ’24 because of the PVC?

Akshat Seth — Managing Director and Chief Executive Officer

That’s the outlook for us. I think the price levels that are there and as volumes start restoring and demand picks up, the expectation is that that it will come in that. In fact, early indications from April also indicates the same, actually confirms the outlook that we were looking at.

Pritesh Chheda — Lucky Investment Managers — Analyst

Okay. Thank you very much, sir.

Akshat Seth — Managing Director and Chief Executive Officer

Thank you so much. Thank you for your question.

Operator

Thank you. Next question is from the line of Shubham Agarwal from Aequitas Investments. Please go ahead.

Shubham Agarwal — Aequitas Investments — Analyst

Yeah. Good afternoon, everyone. Thank you for this opportunity. First of all, congratulation on your new role. My questions are limited to Parador and Building Solution division. So firstly on Parador, sir, we have been talking about breaking into new geographies since quite some time now. So I wanted to understand the specifics related to what kind of revenue we have already started generating and what outlook do we hold for the rest of — in the coming two three years for business ex Germany? That’s one.

And on the second question on Building Solution, so in your opening remarks you mentioned few capex that are expected to come this year and few greenfield expansion also you mentioned. So what is the plan overall, if you can elaborate on that will be helpful. Thank you.

Akshat Seth — Managing Director and Chief Executive Officer

Okay. Thank you. On Parador, I think, the international part of the story is rolling and you will see that the momentum in the months and quarters to come. I will also like to inform that already today we are selling to over 80 countries and the international part of our business has grown steadily at double-digit growth rates for the last three years and we are only strengthening that momentum. Today, nearly 35% to 40% of our revenue contribution is coming from international markets and markets outside Central Europe home base. So, as we stand, the situation is growing stronger and we are expecting that this growth momentum will continue.

The market that we have chosen, as you can imagine for seeding these markets and the aspiration for us is that like Central Europe is one major fortress for us. We create at least four, five such markets, which have seen not just from a sales perspective, but there is a whole business that we are running in these countries and that’s the approach with which we are going. In setting up those businesses inevitably, there is the element of getting the right team in place both sales and others. It is about getting the right products in our portfolio, because the product demands and aesthetics of each market is different. Sometimes the mix that a market prefers between, let’s say, engineered wood, laminate, luxury vinyl tiles that makes us different. So we have to — the channel predominance in these markets is also different, some are more commercially focused market, some are more retail distribution-led markets.

The price structures and the incentives in those markets are different. So, that is where a lot of effort is going on. And some of the early [Indecipherable] highlighted in terms of double-digit growth is essentially coming from the first efforts that have already been there. We are in many markets also setting up logistics centers and actual infrastructure to also augment the customer service that we are offering there. So, these results will start showing up in the next few quarters. But the base work and the foundational work is in full swing and the early signs and early wins give us the confidence that it is headed in the right direction.

Shubham Agarwal — Aequitas Investments — Analyst

So on just to elaborate on this point a bit more, so I think we entered China as a market 3, 3.5 year back, so how has been the response for our product in that market and how has this market matured over the last three years? This will give me a better indication of our strategy.

Akshat Seth — Managing Director and Chief Executive Officer

I think, China from when it started and somewhere the last year in China is an aberration we are all aware of the situation that it was in. So I will keep that out of the equation. But from the time we started about four years ago, it steadily grow to a volume of nearly EUR7 to EUR8 million of sales, which in a market and also we are positioned as a premium product in that market, it’s a robust growth. As things resume in China, there is — the order book has started building up, and we are hopeful of resuming the trajectory that we were on still about 12 months ago.

Shubham Agarwal — Aequitas Investments — Analyst

Okay. Okay. And what is the potential that you think Madena [Phonetic] is for our product?

Akshat Seth — Managing Director and Chief Executive Officer

I think in the short run, we are at least about 50% of where we should be.

Shubham Agarwal — Aequitas Investments — Analyst

Okay. Got it. And my second question was on Building Solutions, regarding the capex.

Akshat Seth — Managing Director and Chief Executive Officer

So, on Building Solutions, let me break this down across the two main product segments here, in blocks additional capacity that we are looking at and some of it will have a full-year impact this year. So it was commissioned in late last year and we’ll see the first full-year impact this year and some are new capacities that will come on-stream in the first and second quarter of this year. The total additional capacity is to the tune of nearly 200 cubic meters from a blocks perspective. The impact in volume will be about 120,000. So there is a delta between some of which has been commissioned from — so the actual nameplate capacity will grow by 240,000 but the volume impact this year you will see will be about 120,000 on the block side. And these are capacities that are coming up in Golan, Jhajjar, Thimmapur where we have already sort of executed these and commissioned these new additions.

On the panels side, there is about 36,000 that is coming through in Balasore in the next couple of months. And some new capacity commissioned late last year to the tune of about 35,000 across Thimmapur, Faridabad, the full-year impact is about 45,000, which will be shown and reflected in this year’s financials. So that represents nearly a 20% growth in the panel capacity, both blocks and panel capacity across if we compare it with previous year.

Shubham Agarwal — Aequitas Investments — Analyst

Got it. So, overall 20% for FY ’24 we can assume that will be available.

Akshat Seth — Managing Director and Chief Executive Officer

That’s right.

Shubham Agarwal — Aequitas Investments — Analyst

Thank you. Thank you. That’s it from my side. Congratulations.

Akshat Seth — Managing Director and Chief Executive Officer

Thank you so much.

Operator

Thank you. Next question is from the line of Rajat Setiya from ithoughtpms. Please go ahead.

Rajat Setiya — ithoughtpms — Analyst

Hi. Thanks for the opportunity. Am I audible?

Akshat Seth — Managing Director and Chief Executive Officer

Yes, you are. Slightly muffled, but I think it should be okay.

Rajat Setiya — ithoughtpms — Analyst

Is it better now?

Akshat Seth — Managing Director and Chief Executive Officer

Yes.

Rajat Setiya — ithoughtpms — Analyst

Okay. Thanks. Sir, are you facing any raw material availability issues on our roofing side or is that all smoothened out now?

Akshat Seth — Managing Director and Chief Executive Officer

There is no availability issue. Of course, the situation is dynamic and requires a fairly large set of eyes to look at that. We have a diversified base. So we source from all available sourcing configurations across the world. There is no — while we continue to monitor it, but there is no foreseeable risk on availability side.

Rajat Setiya — ithoughtpms — Analyst

Okay. All right. If I’m correct, right now we have sources coming in from just two countries, right?

Akshat Seth — Managing Director and Chief Executive Officer

No, it’s from three countries, South America and Kazakhstan and Russia.

Rajat Setiya — ithoughtpms — Analyst

Okay. All right. Thanks. And sir, the last year that we indicated that we did around INR135 crores. Could you please break-up — give a break-up of this, which segments so how much of capex?

Ajay Kapadia — Vice President – Finance and Accounts

Yeah, Rajat. This is Ajay [Indecipherable]. So out of this INR150 crore capex, the major capex is —

Akshat Seth — Managing Director and Chief Executive Officer

I think the question is for last year.

Rajat Setiya — ithoughtpms — Analyst

For both years if you can share one-by-one.

Ajay Kapadia — Vice President – Finance and Accounts

So last year also we spend major capex in Building Solutions segment where we setup a new panel plant and we acquired a part business in Qatar. We also spent capex in capacity expansion in panel plant as Akshat mentioned just now. Future also, we are spending major capex in Building Solutions, where we are expanding our blocks capacities in Golan, Jhajjar. We have already announced setting up of a new plant in Southern region for blocks business. These are also we spend capex on the number of SKUs expansion in the pipes and operatings business. Apart from that, we have on an average INR40 crore maintenance capex, which we do every year for all the business put together.

Rajat Setiya — ithoughtpms — Analyst

Sure. Could you please break it up in terms of numbers, like how much went into panels or how much went into blocks and maybe —

Ajay Kapadia — Vice President – Finance and Accounts

If you say around INR50 crore capex we will see in polymer business, and around INR40 crore to INR50 crore capex in addition to the greenfield project, which we will do in Building Solution business. So roughly INR25 crore, INR30 crore capex, which is more maintenance capex in roofing business and older plant of Building Solution business.

Rajat Setiya — ithoughtpms — Analyst

Okay. Understood. And last year what was the breakup?

Ajay Kapadia — Vice President – Finance and Accounts

Last year, majority capex we did in Building Solution business. Again, INR30 crores, INR40 crores, you have to take it off for maintenance, which is mix of all the plant.

Rajat Setiya — ithoughtpms — Analyst

Sure. Thank you so much. And one more question about, if you can help us share the numbers by sharing the numbers of different product verticals with pipes and putty and construction chemicals for the last year.

Ajay Kapadia — Vice President – Finance and Accounts

So, we did close to INR350 crores in pipes and INR175 crores in putty business. Construction Chemical is more reported as a channel which we use, that is part of Roofing and Building Solutions, but it is small numbers, we did around INR29 crores, INR30 crores last year. The SBT [Phonetic] is in the range of INR4.5 crore to INR5 crores a month.

Rajat Setiya — ithoughtpms — Analyst

Okay. And for pipes and putty, is it possible to share the similar numbers for pipes and putty for the year, let’s say, FY ’22 or FY 2019?

Ajay Kapadia — Vice President – Finance and Accounts

Yeah. So earlier the pipes in FY ’22 was close to INR320 crore and the putty was around INR200 crore year before.

Rajat Setiya — ithoughtpms — Analyst

And 2019, sir?

Ajay Kapadia — Vice President – Finance and Accounts

I don’t have that number right now. You can connect with me after this.

Rajat Setiya — ithoughtpms — Analyst

Sure. Sure, sir. Thank you so much. These were mine. Thanks for answering.

Operator

Thank you. [Operator Instructions] The next question is from the line of Nikhil from SIMPL. Please go ahead.

Nikhil Upadhyay — SIMPL — Analyst

Yeah. Hi. Good morning. Am I audible?

Akshat Seth — Managing Director and Chief Executive Officer

Yes, you are. Good morning.

Nikhil Upadhyay — SIMPL — Analyst

Yeah. A few questions. One is, if we look at last year for HIL, as a whole, we had losses on the polymer business, and because of the inventory and also on the flooring business, because of the cost inflation. If we — so, first is, can you spell out what were the inventory losses for the polymer business as a whole for last year?

Ajay Kapadia — Vice President – Finance and Accounts

Nikhil, there is — there are two — two-way impact. One is the inventory losses, as well as when the prices came down, the contribution is — we also lost contribution on the immediate sense. All put together, we lost around INR25 crore to INR26 crore in the first two quarters of the year.

Nikhil Upadhyay — SIMPL — Analyst

Okay. And Akshat, you mentioned that in the flooring business, last year we had the cost inflation, because the MDF prices have gone out of the roof and then there was the forex and everything hit Parador negatively. Now — and the freight cost also hit us negatively. Now, since June, Jan and Feb what we are hearing MDF, even the domestic MDF players are saying that the prices have gone down by 20%, freight has also largely come back to pre-COVID or around that level. But for our [Technical Issues] our gross margins are still around less than that 40% level. So why is that not completely replicated in our P&L for this quarter, because the cost deflation had started happening since December and January. So was is some inventory holding issues or is it like we’ve not — so what impacted our profitability in this quarter at the gross profit level.

Akshat Seth — Managing Director and Chief Executive Officer

I think it will start showing up. When you look at the Q1 results, it will start showing up. The 20%, 25% drop is almost at a March-end level. So the impact of that will start showing up and playing out in the numbers in this quarter and the next quarter. So when we internally do our weekly, monthly numbers, it’s beginning to show in those.

Nikhil Upadhyay — SIMPL — Analyst

Okay. And you mentioned that in Parador there was some one-time employee cost adjustments. Sorry, I couldn’t get it for this quarter that’s why the loss. Can you spell out what was this one-time cost impact, employee cost related impact.

Ajay Kapadia — Vice President – Finance and Accounts

Nikhil, the impact is in the range of INR6 crore to INR7 crore for this quarter — in this quarter.

Nikhil Upadhyay — SIMPL — Analyst

And what was this relating to?

Akshat Seth — Managing Director and Chief Executive Officer

These were — I think, there were a combination of new talent being brought in and restructuring of the team, which were one-timing costs that were incurred.

Nikhil Upadhyay — SIMPL — Analyst

Okay. But the talent cost and everything will remain. So this is more of a regular employee cost, right. So what was one-time in nature?

Akshat Seth — Managing Director and Chief Executive Officer

So when you are acquiring talent, there are associated costs in hiring that get incurred. Similarly, if there is a separation, there might be some one-time costs of that nature.

Nikhil Upadhyay — SIMPL — Analyst

Okay. And lastly, Akshat, in your starting remarks and even in your conclusion, you said that the goal our how you see HIL is a value-accretive growth. Based on the current businesses which we had, if we can keep FY ’23 aside, because it was a odd year in terms of our performance, but where do you see majority or major lever for improving the profitability lies in HIL among the four or five businesses? And if some of the businesses are not operating at a profitability level, are we open to shutting them down — and this is moreover three to five years and the continuation, would you also look at adding more businesses or we would consolidate among these three or four businesses?

Akshat Seth — Managing Director and Chief Executive Officer

So I think — there will be — so let me answer this at two or three levels. First, when we look at the Company as a whole, there are a few things that we are driving. One is, and that will add at least a few percentage points on the profitability side is how can we premiumize the products and command a better price positioning in the market, a range of initiatives that are on that front. So that essentially will drive better realization for the products. And that is across the board, included in our flooring business in Europe. So that’s number one.

Number two, in such certain segments it’s a function of the scale. So, polymer business as it is ramping up, certain parts of our flooring business in international markets as it’s ramping up, when it reaches a steady-state scale in the next 12 to 18 months, the profitability will start looking better. So that’s the second level.

Third, there is an element of automation and technology infusion that we are making in our operations, which is driving efficiencies. Each program that we are introducing has a solid business case and otherwise that are attached with it and is actually delivering value on ground.

Fourth is our operational efficiencies, which start from procurement-related and sourcing-related efficiencies to the conversion and manufacturing, and these are three or four themes that we are driving consistently across all our businesses.

To your question on whether some businesses are less interesting or more interesting, I think at the moment, the portfolio we have, we feel very bullish about this portfolio and we are committed to growing them. What we are also looking actively are adjacencies which can piggyback on the existing infrastructure both in terms of manufacturing and our sales infrastructure, and that can bring more operating leverage for us.

So overall, we see significant headroom for growth both on the topline and bottom-line with the product portfolio that we are playing in and also the markets we have identified for ourselves. So that combination of product and markets is what gives us confidence that the journey ahead is interesting for us. And along the way, as we look and evaluate opportunities, things which are adjacent, which are complementary to what we are doing, we will continue to pickup those as well.

Nikhil Upadhyay — SIMPL — Analyst

Okay. Just one last question from me. One is, you mentioned that we’ve opened four or five new [Indecipherable] branches in Parador in new markets. Would you say those branches or those new areas which we have entered, would they be breaking even at this point in time or there would be a drag on the overall P&L at Parador? That is one.

And secondly, the four points you mentioned on procurement and operational efficiencies, what difference can we do then what was not earlier, because as I understand and is that Dhirup did work a lot on improving the operational efficiencies and a part of it was always visible on the roofing business where our profitability even on that period was much ahead of all the competitors. So where do you see — so if you can just spend some more time on what differently or what avenues you believe we can do differently, which can probably give this advantage on the profitability or the margin side?

Akshat Seth — Managing Director and Chief Executive Officer

So, on Parador, I think, the short answer is, they are not a drag, they are individually making positive contributions to the P&L. The beauty of that business is manufacturing is still centralized at the moment in Germany and Austria. So that is where the big investments start coming in. So with that as the hub and there is enough capacity available to take us to at least 2X of where we stand. So each of these countries, the way we are scaling them up are being done in a positive contribution manner, not in a way that they are a drag on the P&L. So that’s number one.

The other piece that we are doing in these markets is essentially on building the brands. And you are aware that the whole brand build journey takes a little bit of time, it’s not an overnight exercise. So there we are making conscious investments.

Coming to the cost part of the story that you were asking about. I think the frame of what was not being done earlier and what new has been done, probably is not applicable to us. I think what the last two, three years have done is they have changed the context in which we play. So solutions that were already deployed three years ago, one year ago, just given that the global scenario has changed the supply dynamics have changed, no solutions may not be applicable anymore and may not be the most optimal solutions anymore. So there is a need to refresh those strategy that I think is one clear win that we see for ourselves.

The second piece, which is interesting and where again the available options have improved and increased is on the technology side. And there again, we are deploying tools, which are helping automate our lines further, which are driving more uptime of our plants and lines, and driving better conversion efficiency. And there are simple things, and I’ll give a very small example. Every time we introduce a new product in the market, there is a cycle time that it takes that we need to do trials in the market and so on and so forth. Now, if there is a technology assisted way of doing it and that time can be reduced by 50%, and that improves our agility and our response time to the market. So these are the kind of interventions which are driving a greater sense of efficiency in the organization.

Nikhil Upadhyay — SIMPL — Analyst

Sure. Fair enough. Thanks a lot. I’ll come back in the queue.

Akshat Seth — Managing Director and Chief Executive Officer

Thank you so much.

Operator

Thank you. Next question is from the line of Satish Kumar from InCred Capital. Please go ahead.

Satish Kumar — InCred Capital — Analyst

Thanks. Thanks for the opportunity. My question has been answered. Thank you.

Operator

Satish, sorry, but your audio is not clear.

Satish Kumar — InCred Capital — Analyst

[Technical Issues]

Operator

Hello, Satish?

Akshat Seth — Managing Director and Chief Executive Officer

Satish, I think the line is not clear.

Ajay Kapadia — Vice President – Finance and Accounts

He said his all questions are already answered.

Satish Kumar — InCred Capital — Analyst

Yeah. Thanks, Akshat. Thanks for the opportunity. But my question has been answered. Thank you. Thank you so much.

Akshat Seth — Managing Director and Chief Executive Officer

Thank you.

Operator

Next question is from the line of Nikhil Gada from Abakkus Asset Managers. Please go ahead.

Satish Kumar — InCred Capital — Analyst

Yeah. Hi. Thanks for the opportunity. And just a few questions. Firstly, or on the Parador part, so while we are trying to bring in lot of efficiencies and we are seeing that the cost pressures are easing, just wanted to get a sense in terms of where we are in the cost index, if we can say so, as in when we were in a normal situation and when we saw this entire rise. The reason to ask this is that our gross margins, if I just do consol minus 10, assuming that that is our Parador business, still remains there is an impact of close to 800 to 900 bps, 8% to 9% on the gross margin. So just want that perspective.

Akshat Seth — Managing Director and Chief Executive Officer

Your question is in the context of Parador?

Nikhil Gada — Abakkus Asset Managers — Analyst

Yes.

Akshat Seth — Managing Director and Chief Executive Officer

No. So, I think, I probably answered this in an earlier question as well. The cost pressure and the element going into the gross margin has started easing out around the March timeframe. They are currently not reflected in the numbers that have been shared, because there is a certain lag effect that —

Nikhil Gada — Abakkus Asset Managers — Analyst

Sorry. Akshat, yeah, I understand that. So that the benefits will be visible from the next quarter. So what I’m trying to understand is that if those benefits are factored in, how much of a gross margin improvement we will see in the coming quarters and when will we get back to the 48%, 49% sort of gross margin levels.

Ajay Kapadia — Vice President – Finance and Accounts

It will be in the range of 4% to 5%, that will be on account of material cost reductions.

Nikhil Gada — Abakkus Asset Managers — Analyst

Understood, sir. And do we expect this to further improve in the coming quarters in terms of how the RM pressures are easing off?

Ajay Kapadia — Vice President – Finance and Accounts

It’s a continuous process, like the contracts are negotiated every quarter. So we will try all our best efforts to further bringing it down.

Nikhil Gada — Abakkus Asset Managers — Analyst

Got it. Sir, my second question is on the Building Solutions segment. Over year as well we are seeing a consistently the EBIT margin levels are sort of going down. So any specific reason why we’re seeing such kind of low EBIT margins even when we’re doing such high capacity utilization? And do we see this improving first quarter?

Akshat Seth — Managing Director and Chief Executive Officer

I think, overall as we see on the Building Solutions, at least our view is the margins are in the positive direction. So if you compare the full-year versus the previous year, we’ve actually improved by about 200 basis points. I think your commentary is correct for quarter four. There were certain one-time issues that cropped up, especially with our Golan plant and there was some pull-back on the Chennai plant for a period of time, which is why this particular quarter, it is lower. However, at a full-year level, the trajectory is in the positive direction and we are confident that this will only grow up from here.

Nikhil Gada — Abakkus Asset Managers — Analyst

Got it, sir. And sir, just a couple of more questions. On the Construction Chemicals part, where you’ve mentioned that you want to leverage the putty channel and also more brand investment will go into it. Could you highlight the products that we are sort of earmark to scale up in this particular segment?

Akshat Seth — Managing Director and Chief Executive Officer

I think, it’s a wide array of products. At the moment, we’ve got nearly 65, 70 SKUs that are there. They belong to — yeah, it’s mainly into tile adhesives, primers, coatings. We are also now trying to enter into waterproofing solutions with more SKUs are in this particular product segment right now.

Nikhil Gada — Abakkus Asset Managers — Analyst

And all will be in the B2C space itself, right, will not be any B2B per se?

Akshat Seth — Managing Director and Chief Executive Officer

It will be a combination of B2B and B2C.

Nikhil Gada — Abakkus Asset Managers — Analyst

Okay. Sir, and just last question, can you give some kind of ballpark guidance for the full-year ’24 for the Company level in terms of where we can reach?

Ajay Kapadia — Vice President – Finance and Accounts

Normally we do not give any guidance, but it will be positive from this year’s number we will report across —

Akshat Seth — Managing Director and Chief Executive Officer

We’ll do better than ’23. That’s all.

Nikhil Gada — Abakkus Asset Managers — Analyst

Okay, sir. Thank you so much. That will be all. Thank you.

Akshat Seth — Managing Director and Chief Executive Officer

Thank you.

Operator

Thank you. Next question is from the line of Keshav Garg from Counter Cyclical PMS. Please go ahead.

Keshav Garg — Counter Cyclical PMS — Analyst

Sir, I just wanted to understand that in each of the divisions like you mentioned that in Parador with our existing capacity we can roughly double our revenues. Sir, so what about the rest of the divisions? It would just indicate that what is the maximum revenue we can generate if you operate at full capacity and by when do we reach to basically, hope to reach the same? And also sir, what kind of steady-state operating margin in each of the segments do you expect going forward?

Akshat Seth — Managing Director and Chief Executive Officer

So, I think, overall, and maybe the capacity utilizations will give you an indication in roofing, we are at about 80% — between 80% and 85%. Building Solutions, as I mentioned, we are running at full capacity, but this year we are adding nearly 20% to 25% on top of that, and that effort will continue. On Polymer side, while we are at about 65% capacity utilization, but the volume growth that we have seen in the last few years and we hope for this year are high numbers, and we are already contemplating adding more capacities in this segment. At Parador, I mentioned already that there is headroom for nearly 40% to 50% more than what we have done.

Keshav Garg — Counter Cyclical PMS — Analyst

Sir, and margin, steady-state margins in each of the segments?

Ajay Kapadia — Vice President – Finance and Accounts

So, if we see in Building Solutions, we expect the margin will go — margins will be better than the current numbers, we will expect it will be in the range of 12%.

Akshat Seth — Managing Director and Chief Executive Officer

Yeah. I think, Building Solutions, the aim internally is start hitting the low-teens as the first milestone and then see where we can go from and add to that. On Polymer, again, I think, the lower-teens is the range that is the first milestone for us to cross. Construction Chemicals, we believe, from a mid-teens perspective is the milestone that we are aiming at and there it becomes interesting for us. Flooring, the first milestone for us internally is, and again, it comes from a combination of the choice of markets, product mix is to start hitting — inching towards a double-digit mark.

Keshav Garg — Counter Cyclical PMS — Analyst

Sure, sir. And, sir, lastly, wanted to understand sir that is there any possibility that, sir, we can move the manufacturing of Parador to India and maybe export to the European and other markets from here, sir? Is that a realistic possibility?

Akshat Seth — Managing Director and Chief Executive Officer

I think on the manufacturing side, the evaluation is a continuous one, because we also need to understand the markets and the products that we are serving, what is the best place to serve that. So it’s not just India, I think within Europe, we continue to evaluate elsewhere, we continue to evaluate. And as our geographical footprint increases also on the market side, there might be opportunities for us to diversify the manufacturing capacity from our current locations or manufacturing capacities beyond our current location. But that’s a subject of constant evaluation. At least in the short run, we do not envisage that shifting to India at least.

Keshav Garg — Counter Cyclical PMS — Analyst

Sure, sir. Sir, thank you very much and best of luck.

Ajay Kapadia — Vice President – Finance and Accounts

Yeah, Keshav, one more from the margins, we just mentioned is operating margins and not the PBT margins.

Keshav Garg — Counter Cyclical PMS — Analyst

Sure, sure. Thanks.

Operator

Thank you. Next question is from the line of Ashwin Reddy from Samatva Investments. Please go ahead.

Ashwin Reddy — Samatva Investments — Analyst

Yeah. Hi. Thank you for the opportunity and congrats Akshat on your appointment. So my first question is [Indecipherable] then are you seeing the Company, right? So where do you think is the biggest scope for improvement as to where the Company is. meaning, how do you want to — so how would — so where would you want to spend the most amount of time in next six months to one year?

Akshat Seth — Managing Director and Chief Executive Officer

I think, I’ll say there are broadly three themes. First is, there are pockets and engines that will be the driver for growth, getting those growth engines fully trained up and firing in at a 100% level is the first priority. And that’s why these product mixes which geographies we are operating in what more capacity we added in is of course, the first one. So the growth piece is number one.

I think there is a second piece where we are focusing a lot of our energy is to build a stronger customer connect and that has two implications. One is, having stronger brands that resonate with these customers. Having a product portfolio, which is closer to what the customer needs are. And that in turn hopefully allows us a better price position. So that’s the second thing.

The third focus area is getting the right team, not just — across the board and across functions, which can enable this growth. So the people front is something that is a key focus area. And I have to say on that account HIL in the last four, five years has done strong foundational work. In fact, we are widely recognized this year, we are breaking into the top 50 of Great Places to Work. We are rated — and this is the fifth year running that we have achieved this milestone. We are rated number one in the Building Materials and Cements category, which is a recognition of the strong people practices that exist, but getting these teams ready for the phase of growth and the elements and initiatives that we’re driving is the first focus area.

Ashwin Reddy — Samatva Investments — Analyst

Got it. Got it. Got it. And my second question is on the Roofing part of the business. So in the Roofing part, could you outline what is the concentration like in terms of the states, say, what would the top four or five states in the country contribute to your Roofing segment? And what would these states be?

Akshat Seth — Managing Director and Chief Executive Officer

So, I think in the North, UP, Bihar are key markets for us. You want to, Saikat, talk about this?

Saikat Mukhopadhyay — Chief Financial Officer

UP is one of the key areas that we have. Apart from that, Haryana, Punjab these are the emerging markets and we have done good business out there. East, Bihar definitely is — Bihar, Jharkhand is definitely one of the key markets that we are operating. So, primarily in the Northern sector is our sweet spot as far as these market are concerned.

Ashwin Reddy — Samatva Investments — Analyst

So these top four, five states would contribute what, 50% of the sales or more than that?

Saikat Mukhopadhyay — Chief Financial Officer

More than 50% of the sales.

Ashwin Reddy — Samatva Investments — Analyst

Hello?

Akshat Seth — Managing Director and Chief Executive Officer

So we are seeing more than 50% of the sales in the zone of [Speech Overlap]

Ashwin Reddy — Samatva Investments — Analyst

Okay. Got it. Got it. And finally, again, on Roofing, sir. So, any comments on Charminar Fortune brand which was there [Indecipherable] highlighted. So what is the progress there? How do you — how would you think about it? Any investments on this and what is the progress on this Fortune brand?

Akshat Seth — Managing Director and Chief Executive Officer

It’s a product for the future. On technology side, I think, there has been rapid strides made in the early ways of product stability and the features are at a level where we have a good client base and it’s also now been installation for some time. So we know post installation results also. And we continue to drive it. There is a dedicated team that is developing clients and market for it.

Ashwin Reddy — Samatva Investments — Analyst

But right now, what is the proportion of Fortune to the overall Roofing segment in terms of the percentage contribution to the Roofing segment?

Akshat Seth — Managing Director and Chief Executive Officer

It is still small and somewhere it’s partly our effort is also how the market evolves, because there is still a price differential that comes in. And the adoption of the market is a also a function of how customers sort of adopt to it. From our side as a company and just given the focus on sustainability, we are making our efforts to make sure that there is greater awareness for this product. We are inducing a lot of trials, especially in institutional clients. And steadily — in fact, last year we did about 25% more than what we did previous year on the Fortune line.

Ashwin Reddy — Samatva Investments — Analyst

Okay. Thank you so much. And wish you all the best.

Akshat Seth — Managing Director and Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from the line of Deepak Poddar from Sapphire Capital. Please go ahead.

Deepak Poddar — Sapphire Capital — Analyst

Hello?

Akshat Seth — Managing Director and Chief Executive Officer

Hi, Deepak.

Deepak Poddar — Sapphire Capital — Analyst

Yeah, yeah. Hello. Yeah, thank you very much, sir, for the opportunity. Sir, I have two, three queries. First up, I think we did mention that we are on course for $1 billion revenue by FY ’26, right? I mean, that effectively means around 30%, 35% CAGR in our revenue over next three years. But do you think that it’s a little more optimistic than what I think we have seen over last past three years? I mean, some comments in this regard would be quite helpful.

Akshat Seth — Managing Director and Chief Executive Officer

It’s ambitious, it’s a stretch, but it’s an ambition that we are all committed to. So, yes, we are trying to break away from the growth rates that we have seen in the past. So that’s a conscious choice. Within that, I think, we have broken down what are the steps that will get us there. And one key lever we see is inorganic, which, I think, in the past has contributed in a small way, may have to contribute in a slightly larger way as we go around. But it’s an ambition that we are all fully committed towards.

Deepak Poddar — Sapphire Capital — Analyst

So it includes inorganic ambition also in this. I mean, it’s not an organic growth we are talking about when we’re talking about $1 billion kind of a —

Akshat Seth — Managing Director and Chief Executive Officer

It’s a combination of both organic and inorganic. The relative proportion of that will have to play out as we go, but it does include an inorganic element also.

Deepak Poddar — Sapphire Capital — Analyst

Okay. Understood. And — I got it. And when you mentioned that in terms of steady-state margin, right, so you mentioned segment-wise. So ideally what 12% to 14% could be at a consol level would be a steady-state EBITDA margin that one can look at, I mean, over the medium-term?

Ajay Kapadia — Vice President – Finance and Accounts

It is in the range of around 11% to 12% operating margin.

Deepak Poddar — Sapphire Capital — Analyst

11% to 12%. And that is the target over what next three to four years or sooner?

Akshat Seth — Managing Director and Chief Executive Officer

Yeah, I think, at least, if I look at it in a two-year to three-year horizon, that will be the right yardstick to keep. Given that this is also a growth part of our evolution, so there is an element. So we need to consider that in reality as well.

Deepak Poddar — Sapphire Capital — Analyst

So, two to three years, right?

Akshat Seth — Managing Director and Chief Executive Officer

That’s right.

Deepak Poddar — Sapphire Capital — Analyst

And the last thing that you mentioned on the Roofing, as well as on the Parador side, so quarter-on-quarter, we do expect some benefit, right, in terms of cost pressure easing out in Parador and in the Roofing segment, because of the price hike we do expect some delta in margin right? So ideally, it would be a right way to think that this quarter our margins have bottomed-out, and there is only one way up as we move into coming quarters in terms of profitability, specifically?

Akshat Seth — Managing Director and Chief Executive Officer

I think at a gross margin, certainly.

Ashwin Reddy — Samatva Investments — Analyst

EBITDA margin. I mean, EBITDA margin, that 4.5% that we did, so ideally, one — it would be right to assume that it has bottomed-out?

Akshat Seth — Managing Director and Chief Executive Officer

I think from this quarter — I would say, between this and the next quarter, you should see the trend that you are outlining, yes.

Deepak Poddar — Sapphire Capital — Analyst

Bottomed-out, yeah, from this quarter or next quarter?

Akshat Seth — Managing Director and Chief Executive Officer

That’s right. This quarter.

Deepak Poddar — Sapphire Capital — Analyst

Okay. This quarter. Okay. First quarter. Okay. I understood, sir. That’s it from my side. All the very best, sir. Thank you so much.

Akshat Seth — Managing Director and Chief Executive Officer

Thank you. Thank you so much.

Operator

Thank you. Next question is from the line of Manish Dhariwal from Fiducia Capital. Please go ahead.

Manish Dhariwal — Fiducia Capital — Analyst

Yeah. Thank you very much for this opportunity. And Akshat, I congratulate you on coming onboard and leading the Company from here on. So, I was — am I audible?

Akshat Seth — Managing Director and Chief Executive Officer

Yes, you are. I was just saying thank you for your kind words.

Manish Dhariwal — Fiducia Capital — Analyst

Thank you so much. See, so [Technical Issues] you’ve been associated with the Group for the last couple of years, but I think on the healthcare side. So basically what I wanted to understand that the businesses that HIL is in is rather different like brick-and-mortar actually literally. So, meaning what has been the like status at your end? Have you been able to completely like come on stream, you got like handle on the dealer network. It’s a very crowded kind of work. It’s a very — it’s a — lot of action happens on the ground. And so like the nuances that this business require and there are specific challenges and issues. You did mention that the earlier target of reaching $1 billion FY ’26 like remains. So I guess on that line and then you also mentioned that you — the focus is going to be on the inorganic opportunities, but on the core business is something that I wanted a handle on. It’s a big management change. So wanted your thoughts [Phonetic] on that. Yeah. No, I think — first of all, thank you for your kind words. It’s been a great start to my stake here. And the good part is I’ve been with the Group — this is my ninth year with the Group. And I started-off at the Group office leading growth and strategy for all our portfolio companies. In that capacity, I have worked extensively with HIL in the past. At that time, we were just about starting out our sites business. So the Polymer foundations were being laid at that time and scaling it up. So I was quite closely involved on that one. I was involved in a few M&A acquisitions that were done at that time from a Building Solutions point of view, so had a chance to work with the business there. So HIL is not entirely new. The HIL team is not entirely new. And I think when it comes to Group companies, there is a fairly close interaction that all of us have at a leadership level. We are aware of the dynamics of each other’s business and closely synergized in that. So the — I hope I have hit the ground running and I think you guys on the call looking at the numbers and I think the teams can say whether I have done it or not. But the intent has been to hit the ground running. And in this time I have spent a fair amount of time not just with our channel partners, that of course, are very important, but also at our manufacturing locations with our teams. The good part is coming into HIL is that there is a very strong team in place. The leadership team at the BU level at the corporate level is strong, has had a long vintage in track record with HIL. So they’ve obviously helped in this transition. I think, I feel very, very optimistic about the prospects of the Company. I think there is the task of setting the ambition and I think that’s already done. But the task of achieving the ambition is on that. And we are confident of making it happen. That’s very, very — that’s very good to hear. So, see, Akshat ji, we are like long-term shareholders in the Company and for what matters to us and obviously the Company as well as the shareholder value, which actually in the last couple of quarters has taken a hit and basically that’s emerging from the operational challenges that the Company facing and continue to face. So, you’ve shared your strategy on Parador, where you’re looking at setting up four or five [Indecipherable] I won’t say like as strong as Germany, but this basically can be the new outposts, so around which the business can grow and the margin can improve to double-digits from where we just — double from what we’ve had here. I think that I think will be a very, very good game. So, other than — so, see, one is the inorganic strategy, right, you mentioned that you were like kind of the driver of acquisitions that was done in the past. Now, so, the core business is the Roofing business, right. And in the last two years, the whole texture in fact, the whole kind of the profitability, the costing, the whole chain has changed drastically. So, and to note that the new businesses that the Company has gotten into, they are actually low-margin businesses. So like in Roofing you’ve had like 25%, then the new businesses like 11%, 12%, 13%. So capital allocation being a critical factor, meaning like you coming from a rather macro perspective, you had a bird’s eye view of where the Company was going and now you kind of hitting the micro-level. What are your thoughts that could like comfort us shareholders in terms of now the Company is kind of taking a turnaround?

Akshat Seth — Managing Director and Chief Executive Officer

Okay. What are the kind of thoughts that you would love to hear from me, which will give you the comfort?

Manish Dhariwal — Fiducia Capital — Analyst

That was you to tell us. So maybe on the operating side of the businesses, which are — which the Company already has in the Roofing side, what kind of change the last few years for margins are completely kind of deteriorated and obviously, they were like some issues, but [Indecipherable] strength of the brand and the strength of the Company just kind of needed for so long that kind of comes to play. So what are you — so maybe some thoughts there would be like helpful.

Akshat Seth — Managing Director and Chief Executive Officer

I think, here are some thoughts. And please do tell me at the end of what I have to say whether they are comforting or not. But this is how at least things are panning out for us. I strongly believe, I think, there is learnings from the past, but we can’t dwell on the past too much.

Second, change that we are bringing in is an element of impatience and aggression in how we look at the future and there is a strong burning desire to make this happen. 80% of the path is clear, and 20% will get clearer as we go along.

The third thing is, while ambition is there, I think, the opportunity for us is to also review and reassess the strategy that will lead us to that path, and that’s something that we have done in the past few weeks and continue to do so. A lot of the elements are getting crystallized we shared on Parador, but that kind of exercises being done literally for every small segment that we are looking at, because that assessment that is giving us confidence that we are in the right products and market. So there is a fair amount of confidence on that front.

The fourth element is that — and I think you made a mention that they are inherently — the products that we’ve been have returned lower profitability. I think if we look at the larger industry context of the product segments that we are in, they are not less attractive product segments from a overall industry perspective. So I think the focus for us is to get to the industry-leading profitability levels and growth percentages there. I think that’s the fourth point.

The fifth point is, yes, in the past, and if I rewind back to five years ago, the center of gravity of the organization was around the Roofing segment. It is important today, but a lot of our growth will come from things beyond Roofing. And that’s an important fact to acknowledge and recognize. Much of our growth plans are around those segments. And the idea is to diversify both from a product mix perspective and also the markets that we play in.

So, I think those are some thoughts. Overall, we have a strong legacy to fall back on, but we obviously need to do a lot of things differently to chart out a successful track from here for the next five to ten years.

Operator

Thank you very much.

Akshat Seth — Managing Director and Chief Executive Officer

And if I may just add one last comment, I think, the way we see ourselves as HIL is not just a Roofing and Building Solutions company, we see ourselves now as a comprehensive one-stop shop when it comes to the entire range of building products. And that’s where I think more things might get added. And to build our brands, which are recognized not just in India but at a larger-scale.

Operator

Thank you very much, sir.

Akshat Seth — Managing Director and Chief Executive Officer

Thank you.

Operator

Ladies and gentlemen, that will be the last question for today. I now hand the conference to the management for closing comments.

Akshat Seth — Managing Director and Chief Executive Officer

Yes. Thank you. And my heartfelt gratitude for everyone for having joined this call and for hearing us patiently. It’s been a absolute pleasure for me to interact with all of you and answer some of your queries. We thank you for taking your time out and engaging with us. Please do remain plugged in to HIL. Please do keep sharing your thoughts and ideas with us. These interactions are valuable for us. And if there are any further questions coming out of today’s call, please reach out our Investor Relations desk. All of us are available to address them. Thank you very much.

Operator

[Operator Closing Remarks]