Hindware Home Innovation Ltd (NSE: HINDWAREAP) Q1 2026 Earnings Call dated Aug. 13, 2025
Corporate Participants:
Unidentified Speaker
Nirupam Sahay — Chief Executive Officer
Rajesh Pajnoo — Chief Executive Officer of Pipe Business
Sandeep Sikka — Group CFO
Naveen Malik — Chief Executive Officer and Chief Financial Officer
Analysts:
Unidentified Participant
Harsh Pathak — Analyst
Utkarsh Nopany — Analyst
Parikshit Gupta — Analyst
Udit Gajiwala — Analyst
Nikhil Gada — Analyst
Rahul Kumar — Analyst
Raman KV — Analyst
Presentation:
operator
Ladies and gentlemen, Good day and welcome to hinware Home Innovation Limited Q1 FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Harsh Pathak from MK Global. Thank you. And over to you sir.
Harsh Pathak — Analyst
Thanks. Amshad. Hi. Good afternoon everyone. On behalf of MK Global, I welcome. You all to the Q1 FY26 earnings. Call of Hindwer Home Innovation. From the management side we have Mr. Nirupan Sahai, CEO of Baas Business. Mr. Rajesh Pajnu, CEO of Pais Business. Mr. Sandeep Sikha, the Group CFO and Mr. Navin Malik, CEO and CFO of Hindwer Home Innovation. I’ll hand it over to the management. For the opening remarks. Over to you gentlemen.
Naveen Malik — Chief Executive Officer and Chief Financial Officer
Good evening everyone and welcome to Hindwear Home Innovation Limited Q1 FY26 earning call. Kindly note that some remarks and observations made during today’s call might be forward looking. These may include, but are not limited to financial projections and statements regarding the company’s plans, objectives, expectations or intentions. The company does not have any obligation to revise this forward looking statement to reflect any future events or developments. For a comprehensive disclaimer, please refer to slide number two of the results presentation. I will start with a brief summary of our performance for the quarter one FY26. Our business CEOs will then share updates on their respective segments.
For quarter one FY26, the company reported consolidated revenue of Rs. 531 crore with an EBITDA of Rs. 58 crore. In a strategic move to sharpen our focus on kitchen appliances segment including chimneys, hobs and cooktops, the board has approved the discontinuation of high loss making product categories such as air coolers other than through the E Commerce channel ceiling and other fans, air purifiers, water purifiers and furniture fittings. Please refer to note number two and three of published financials for further details. I would now like to hand it over to Mr. Nirupam Sahai to take you through the bathware and consumer appliances business over to Nirupam.
Nirupam Sahay — Chief Executive Officer
Thank you, Naveen. For Qify 26, the bathware business reported 341 crores revenue and 43 crores EBITDA. Despite the challenges in the market, we remain well positioned to leverage our strong fundamentals. Hindware’s market leadership, supported by high brand awareness and deep customer trust, continue to be key drivers of our growth ambitions. Our Q1 results reflect the early signs of a business and transformation with meaningful initiatives undertaken to improve growth, profitability and margins in the pathway segment. As shared in our previous call, over the past few months we have undertaken a comprehensive review of our business model, refining our go to market strategy, driving premiumization in sanitary wear and faucets and adopting a zero based budgeting approach to support margin expansion.
These targeted interventions are beginning to yield results and on the back of this progress, we expect the second half of the financial year to show improved momentum and stronger performance. In Q1. We also deepened our engagement with the influencer community by rolling out on ground activation programs for the plumber community while continuing to work closely with architects and interior designers to strengthen our market reach and brand advocacy. Looking ahead, we plan to further invest in brand building to deliver comprehensive 360 degree engagement with both customers and influencers. In line with our premisition strategy, we will be introducing a range of premium faucets with higher average selling prices and stronger margins reinforcing our premium portfolio.
We are confident that this initiative will not only strengthen our presence in the premium faucet segment but also enhance the overall profitability of the business. As we move forward, we remain committed to making disciplined strategic investments in our brands to capture emerging growth opportunities in our consumer appliances business. Q1 revenues came in at 71 crores with an EBITDA of 10 crores. Over the past months we’ve undertaken a. Rationalization of our portfolio, sharpening our focus on a select set of high demand categories where we can lead and win. This includes kitchen appliances which includes chimneys, cooktops, hobs and sinks and water heaters. As part of this rationalization we have. Exited low margin segments such as field. Ceiling and other fans, air purifiers, water purifiers, furniture fittings and air coolers in general trade while continuing to sell air coolers through E Commerce.
Alongside this we are driving cost efficiencies, maintaining disciplined inventory management and enhancing our after sales service experience. These initiatives have already started to drive growth in kitchen appliances and are contributing to improved profitability, a positive trend we expect to strengthen in the coming quarters. With that, I hand over to Mr. Rajesh Bajnu to take you through the pipes and fittings business. Over to you Rajesh.
Rajesh Pajnoo — Chief Executive Officer of Pipe Business
Thank you Nirubhan Good afternoon everyone and welcome to our investor call. It’s a Pleasure to be speaking with you today. In Q1FY26, we reported revenue of 119 crores and an EBITDA of 7 crores. Our performance this quarter reflects the on ground challenges faced during quarter one. The softness was driven by difficult market conditions, volatility in raw material prices and the early onset of monsoons which impacted both revenue growth and volume. In addition, our lower exposure to the agricultural sector, typically a key demand driver in Q1, also contributed to the muted performance. However, we are now seeing early signs of recovery in the current quarter and expect this momentum to translate into a stronger H2FY26 performance.
We remain well positioned to capitalize on the recovery and build on these positive trends throughout the rest of the year. In addition, we have commenced trial production of our new facility in Roorkee, Uttarakhand. Commercial production is scheduled to begin in H2FY26 which will help us enhance our manufacturing capacity and establish a strong footprint in Northern India. We continue to broaden our product portfolio to tap into emerging market opportunities and deliver greater value. This quarter we introduced a new range of products from foam board pipes for underground drainage, double wall corrugated pipes, polypropylene ppr, random plumbing pipes and fittings, strengthening our position across multiple segments.
At the same time, we are advancing initiatives across all business functions to optimize resource allocation, leverage technology and improve productivity and cost efficiency. We have also intensified investment in our brand and distribution network to further extend our market presence and deepen penetration. We are confident that these strategic initiatives combined with capacity expansion and portfolio diversification will drive profitable growth as we move forward. We are now ready to open the floor for your questions.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press STAR and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Utkarsh no Pani from Bob Capital. Please go ahead.
Utkarsh Nopany
Yes, good evening sir. So my first question is regarding your bathware segment. So it is good to see that we have posted positive revenue growth for the June quarter. But still our bathware revenue came around 341 crore in this June compared to the quarterly run rate of around 400 crore in FY24. So first wanted to know by then we could reach around say 400 crore quarterly run rate Mark number in your viewpoint.
Nirupam Sahay
So we expect accelerated growth on the quarterly number from this quarter itself. So quarter two onwards we’ll see higher numbers. We’ve already seen a move to positive growth in quarter one. We expect acceleration based on all the initiatives that we’ve taken on distribution and on product and on influencers and on brand building. So all of those have started kicking in and with continued investment we expect that to accelerate in the coming quarters. It has.
Utkarsh Nopany
Okay, just give some sense like maybe in certain fiscal year can we reach say 1600 crore top line in Bazaar which we did in FY24, maybe in FY27 or maybe in FY28. We must be having certain target in our mind to reach that number. What we were doing earlier.
Nirupam Sahay
Yes. So we run rate by quarter three and quarter four this year itself.
Utkarsh Nopany
Okay. And sir, on the Bathwai margin, if we see it was slightly down on a y o y basis in the June quarter and as we have taken a lot of cost rationalization initiatives in the past few quarters. So when we are going to see the benefit from those initiatives and what is the sustainable margin for this business in your view Count?
Nirupam Sahay
So the EBITDA margin for the boxware business is pretty much the same as the last quarter. 12.8% last year and 12.7% this year. @ the PBT level there’s an increase from 3.2 to 4.6% in the business. So all the measures that we’ve taken to drive top line growth, improve margin and control costs, all of them again have started kicking in in this quarter and we expect acceleration again going forward. So on the profitability point of view, whether it’s the EBITDA or it’s the pbt, we expect this to improve in the coming quarters based on all the actions taken on top line as well as bottom line.
Utkarsh Nopany
Ankar, what should be the sustainable margin in your viewpoint for bathware?
Nirupam Sahay
So we expect it to be in the mid teens.
Utkarsh Nopany
Okay. Now sir, coming to the pipe segment. So there has been a steep decline in our pipe volume. So it has degrown by 21% in this June quarter versus low single digit kind of a volume growth reported by the major listed pipe companies despite we having a very small base. So wanted to know why there has been such a steep decline for us compared to the competition. And what would be the volume growth and margin guidance for FY26 for the pipe segment?
Rajesh Pajnoo
Yeah, this would be a valid question and would be there in the minds of everybody. I would like to put it this way. If you see the same comparison of Q4 with all the competitors. We have done much, much better than others. It was the reason that February and March were and we were able to supply lot of material in the month of March. So what has happened is there was a steep decline in the raw material prices from April. So two reasons. One was the decline in raw material prices and another onset of monsoons at an early stage.
And Q1 signifies more towards the agricultural segment where we are not there. So there was a lot of destocking which happened at the distributors. So April and May, mid of May we could not push the material to the market. And if you see from June onwards there was a positive correction. And now this quarter, the current quarter we are doing fantastic. We are there at a volume growth of almost around 35%, cyclic of 35%. We have bounced back. And as regards your, we would say that the complete year would be somewhere around close to double which is maybe around 9 to 10% volume guidance.
Utkarsh Nopany
Okay. And sir, the next question is regarding your consumer appliance division. So we have taken a pretty large exceptional loss in this quarter. So, so wanted to know is it mainly pertaining to the inventory write off for the discontinued products and how much inventory we were carrying at the end of June 25th?
Naveen Malik
So these are I think if you. Have gone through the notes to the results. So these are write offs relating to the businesses. And many of these businesses are similar seasonal in nature. But over a period of time we had made investments like in certain products categories. We had our own specific modes linked to our designs like air purifier, water purifier and even part of the category of water and this air coolers. So it’s a mix of when we. Have done all this provisioning. So we have reviewed a line by line items of elements of fixed assets, elements of inventory and when you discontinue certain business categories, definitely the chances of money getting stuck in the trade is also very high. So considering all the things this provision. Has been estimated, we are trying to get the best value out of it. The board has mandated that we should, you know, try to get the best out of it if anything is there as we move forward. So it will be, it will, it will be part of the pnl.
Utkarsh Nopany
Okay. So for the consumer appliance division the EBITDA margin has improved sharply. Maybe this might be related to this discontinuation of loss making product category. So do you expect to maintain such high margin going forward or is there any one off in the June quarter number for consumer appliance model.
Naveen Malik
If you see the note number two. There is a one off item which is relating to. Because when we closed all these categories we have also downscaled our warehousing space. And if you see read the notes to the accounts, 6 crore other income is a one time income which is relating to the difference between the, as far this is as per India the difference between, between the value of lease assets and the lease liabilities. So other than this we feel the momentum on the margin given the fact that we have cut costs in this business also in the past. Now this product categories we have looked at.
So the focus now going forward will be on kitchen chimneys and other part. I’ll request if Mr. Nirupam can you know, carry this forward.
Nirupam Sahay
Yeah. So the conscious decision to stay in certain categories and focus and win in them. So in the case of kitchen appliances, primarily chimneys, cooktops, hob sinks, the reason for doubling down on that is the fact that we see profitability in that business today. And with all the steps we’re taking on the portfolio and on cost we believe that the gross margins and the profitability overall will keep going up in these businesses. The reason that we’ve stayed with air coolers and E commerce again is because we believe there is profitability in that part of the business.
Coolers in general trade was not profitable. So these are very conscious calls for us to focus on certain categories, win in them in the market while driving profitability as well. So with this mix change and focus on a few categories we are confident of growing both the top line and bottom bottom line in the coming quarters.
Utkarsh Nopany
Okay, and for lastly sir, if you can just guide what would be our capex guidance for FY26 and where do we see our net debt at the end of March 26?
Nirupam Sahay
So on CapEx in the bathware business it’ll be roughly between 70 and 80 crores. On the consumer appliances business it will be only about 7, 8 crores. So that’s the Capex situation.
Utkarsh Nopany
Okay.
Naveen Malik
Pipes should be somewhere around 15 in a range of 15 to 16, 17 roads based on the approach.
Utkarsh Nopany
Okay, and where did you see the debt at the end of March 26th.
Naveen Malik
Given the fact that we don’t have a substantial capex. The capex which got added in last €1 is primarily on the pipes plant which is a new pipe plant which we set up in the state of Roorkee. So given the fact that not much. Capex is there, little bit. From the. Money which we are generating from you know, the internal approvals that will Go towards that and it should remain in the range from whatever it is right now in the repayment about 60, 70 crores happening in the financial year.
Utkarsh Nopany
Okay, thank you.
operator
Thank you. Before we take the next question, we would like to remind the participants to press star and one to ask a question. The next question is from the line of Parikshit Gupta from Fair Value Capital. Please go ahead.
Parikshit Gupta
Thank you very much for the opportunity. I have a couple of questions. First on the bathware segment, can you please split the top line between sanitary wear and faucet wear and share about the industry situations respectively?
Nirupam Sahay
Yeah. So our split is roughly about 62% sanity ware and 38% faucets. We have a strong focus on on growing both sanitary ware and faucets. With faucets possibly going a little faster and therefore over a period of time the share of faucets in the overall sales will go up by the end of this financial year. As I mentioned, there are a whole lot of new product introduction that we’re planning in both sanitary ware and faucets largely aimed at the mask premium and premium segments. So higher average selling prices and higher margins.
Parikshit Gupta
Okay, can you give a rough estimate of the margin profile across different brands? I mean Hindwear, Italian and qo.
Nirupam Sahay
So we don’t normally share the gross margins across the different brands. Yeah, I mean obviously we’re targeting improvement in gross margin across Hindwear, Indwe’s Italian collection and keo. Like I said, the focus is on launching more products in Hindu, Italian collection and Keogh because of the reason of higher average selling price and higher margins.
Parikshit Gupta
Understood. Second part of the question on consumer appliances, please. You mentioned earlier in the previous con call that there might be some new complementary product launches expected. I understand that inflame was also considering dishwashers some time ago. So I mean, is there any announcement that you would like to make about any new complementary products here?
Nirupam Sahay
Not at this point of time. We’ll make the announcement at the time that we are planning to launch a new complementary category at this point of time. As I mentioned earlier, we’re doubling down on on your chimneys, cooktops, hobs, sinks. We also have inbuilt microwaves and ovens. Those are the categories that we remain focused on for this financial year at least. And then we’ll add on as we see opportunities. But we believe there’s a huge opportunity in these categories themselves.
Parikshit Gupta
Understood. Now on the pipes division please. I think another participant already asked the question about drop in volume and value. Was the drop in value primarily on the Account of the agricultural focused quarter and raw materials price toughness or were there any competition? Increased competition from the unorganized sector as well, maybe more capacities being added. We understand about the situation with the larger players so those numbers are handy. However, any other information, if you could please share.
Rajesh Pajnoo
It’s not about competition because when it comes to our category of, you know, selling in the market, our average selling price is almost equivalent to all the large players, more or less the same. So it was basically as I said, we had a fantastic march. So there was destocking which was happening at the customer’s place and with it there was this. We are not heavily into the agricultural segment because for agricultural segment to sell an agricultural pipe you need to have manufacturing facilities all around the country as is there with different peers, big peers. So since we are only based out of south so we couldn’t catch that market as such, as I said we have, we’ll be starting our commercializing our roorkee plant in H2 so we’ll be capitalizing on that.
So that was primarily the reason and as I said that now things are picked up and we are doing fantastic. We are doing very well this quarter and we see a comfortable growth in the coming days.
Parikshit Gupta
Understood. What was this CPVC share for this quarter and any plans on doubling down on this particular product segment?
Rajesh Pajnoo
Yeah, CPVC share. As you all know that last one and a half year the plumbing market has not been that great. Approximately ours was the last two, three years at 40%. But last year every major peer if you see has shown degrowth in CPDC. It is now among almost around 30 to 35% and we are expecting in this year because July has been fantastic for cpvc. We had a market, we had a share of around 40.5% of CPBC in July and it’s the same way happening now in August also.
Parikshit Gupta
This is helpful. Just my last question before I rejoin the queue about the new products that you mentioned. The four the foam coat pipe, dwc. Would the margin profile for these products be at the same levels of our current pipes and pipe segment blended margin? Or.
Rajesh Pajnoo
You can say that all these products, they are niche products. So they are at a comfortable margin compared to CPVC Only because everybody is not into these products.
Parikshit Gupta
Understood, sir, this is super helpful. Thank you very much for answering my questions. I’ll get back in the queue. Thank you again.
operator
Thank you. Participants who wish to ask a question may press Star and one at this time to ask a question. Please press Star and one now. The next question is from the line of Udit Gajivala from yes, securities. Please go ahead.
Udit Gajiwala
Yeah. Hi team. Just one question that appear is now focusing on the more of the B2B segment, the project segment. So what is our sanitary faucets to share into the projects? Firstly and what has been the traction for hindware on those terms?
Nirupam Sahay
So we’ve had a strong focus on institutional business over the last few quarters. We’ve grown at 15% in the Institutional business in quarter one. And I think the focus here is on growing in both sanitary wear and faucets. There’s a larger opportunity in sanitary wear but there’s also an opportunity in faucets. We’re showing good growth in both fancywear and foxys institutional. We’d also set up a team three quarters ago focusing on government and that is starting to pay off. So basically we are targeting the government segment as a big potential opportunity. So we’re growing every quarter in the government segment and we continue to build strong relationships with builders and architects across the country.
So VCS a strong growth momentum in institutional in quarter one and we see that momentum continuing through the year.
Udit Gajiwala
All right, sir. And in the pipe segment our volume decline has been much steeper than the peers. Is it that we are losing some market share into CPVC or the pricing? We are not able to have that volume share. And secondly, is there any element of inventory loss for the quarter?
Rajesh Pajnoo
This question I have answered twice. Volume declined sharply more than the peers is purely on the basis of. I again repeat that we had done some good sales in March more than our peers. If you see quarter four results and there was a destocking which is happening which happened at April and May. From June onwards we have started doing well and as I said we have been doing this quarter Q2 presently we are at a growth of around 30% in volumes. So there is no way that we have lost any share to the competitor. It’s not possible at this moment and inventory loss is not more.
It is just to the team of maximum 1 crore for the entire period.
Udit Gajiwala
Okay, thank you sir and all the best.
operator
Thank you. Before we take the next question we would like to remind the participants to press star and one to ask a question. The next question is from the line of Nikhil Gadda from Abacus amc. Please go ahead.
Nikhil Gada
Yeah. Hi sir. Thanks for the opportunity. Firstly sir, on the plastic pipe business you sort of mentioned that we are expecting a volume growth of 9 to 10%. But I’m assuming that our Roorkee plant will also start from second half so do you think that that will also aid volumes?
Rajesh Pajnoo
Yeah Nikhil, definitely it is going to boost our production capacity there also what we are talking of presently at these types of where I also anticipating a price correction. You have a right point. If there is a price correction in the by the end of Q2 then definitely this volume guideline will go up. But we are being very conservative at this stage because what has happened is last. Last financial year quarter one we were working at an average price of fusion at 85 rupees. Now it is 74 rupees. So we are talking of the volume guideline at these price because once the prices of the raw material are lesser you produce this type of quantity.
If the volume, if the price goes up then definitely the volume will change.
Nikhil Gada
So in that case of what kind of revenue guidance can you get?
Rajesh Pajnoo
Revenue is again you know if there is. It all depends if there is a. At this moment if we are talking of current prices then the revenue guideline would be around 3 to 4% which is there in the industry. But if the prices go back to normal what they were here last one and a half year back then definitely it will be something touching double digits. So this is the caveat where it depends on what the prices are there.
Nikhil Gada
In terms of the competitive intensity inside I think which has increased significantly in the last one and a half two years. What’s your view on that? Are we still facing some heat because of that or we are able to navigate and you know it’s. It’s not going to be difficult for us to deliver you know some double digit.
Rajesh Pajnoo
When we started actually all these. What you are talking about is just there has been a lot of competition because new players have come up in this business. But the level of SKUs which we are working and the new product lines which we have come, which we have launched this quarter, last one, one and a half months we don’t see any because then we are in the category of the right people who are the super players of your competitors. We didn’t see any competition from them because then their segment of business would be entirely different because they have not come, they haven’t come up with so much of capacity.
What we are having today and the product lines we have like BWC and Foamcore and now down the line three, four months will be delivering new fire spring work into the market. So these are all mixed products and are there. These people are not there in this market segment.
Nikhil Gada
And so on the margin front end pipe. So how do we see the margin for FY26 EBITDA margins.
Rajesh Pajnoo
My 26 would be somewhere around 8, 9 9% and 9.5%.
Nikhil Gada
You think that is doable even after what we have seen in one queue, pardon the two plus I’m saying after 6% margin that you’ve seen in one Q you still feel that you’ll be able to achieve?
Rajesh Pajnoo
Yes, yes. Because Q1 is the lowest as far as volume, sales value and EBITDA is concerned. If you see pipes business, that is the plumbing side of it, Q1 is the lowest part of this business. Almost 65% of the business happens in H2.
Nikhil Gada
I understand that sir, but then you already mentioned that we are seeing the CPVC share going down for us and I. I know that we have done 8, 9% EBITDA margin, but at that point of time our CBDC mix was much higher, right?
Rajesh Pajnoo
Q1 it was down but now presently the segregated we have bounced back to 40% of the market share of CBDC which had gone down to 34%.
Nikhil Gada
And just lastly on the pipes front, do we see any improvement in working capital cycle since we are already introducing new products? Do you think that it can go up further from these levels or you think we can see some.
Rajesh Pajnoo
We have maintained working capital. It’s already. If you see season also it’s almost around 85 days. So we are on this level last three, four quarters. We don’t feel going up, working going up.
Nikhil Gada
Sorry sir, I missed the last. Hello that I missed the last part. Sorry.
Rajesh Pajnoo
I said about the working capital. We are maintaining working capital at around between 80 to 85 days last three quarter. So we don’t see any recoveries are fast. We don’t see working capital going up. And if you see pipes business, we have been maintaining it last four or five years.
Nikhil Gada
So just then on the Bathwell front you mentioned that you have done good business in the HD and the government side. Can you help us? What is the share of institution which has government?
Nirupam Sahay
So the total institutional sales is 25% of overall revenue in quarter one.
Nikhil Gada
And how much would be government?
Nirupam Sahay
Government right now is roughly about 8 to 9% of the overall institutional sales. We expect that over the next three quarters to go up to about 15 to 16%.
Nikhil Gada
So safe to say that 40% revenue will come from industry plus government. And our assumption is that the margins are bit lower on this side of the business. So do you think that there could be some impact on margins?
Nirupam Sahay
Government is a subset of overall institutional. So I was talking about the share of government with institutional sales so the overall margins in institutional have remained fairly steady over the last five quarters. So with the mix change, even with government coming in, it’s not that the margins have gone down dramatically. So we continue to maintain the same margin level in institutional sales despite growth in government.
Nikhil Gada
And how would be the working capital cycle over here.
Nirupam Sahay
For the bathware business? Overall?
Nikhil Gada
Yes.
Nirupam Sahay
Yeah. So we’ve shown a reduction of six days versus quarter one last year. So we’ve gone down from 101 days to 95 days.
Nikhil Gada
I get that. What I’m trying to understand is the industry, government, business, what kind of a working capital cycle is over there? Reserves, our retail business.
Nirupam Sahay
There’s no significant impact on the overall working capital by increasing the institutional business. No significant impact.
Nikhil Gada
Understood. Similarly, in bathware, you know, we have seen new brands coming in the business and now most of the brands are also one to two years old. And we have also seen some impact in terms of our market share, loss, etc. So do you feel that to regain that market share and also to grow from those levels, is there going to be a lot of challenge that we are going to encounter or you think that that is something which is more or less, we should be in a good position to achieve that?
Nirupam Sahay
Yes, I think we are well on the path to regaining some of the market share that we lost last year. All the actions that we’re taking in terms of distribution, in terms of new products, in terms of work with influencers on brand building, all of that is going to lead to growth, improvement in terms of the growth percentage and in the profit, like I said, we’re targeting for the year mid teens, so that’ll be a significant improvement versus so both on growth and profitability will show significant improvement versus last year and therefore again in market share as well.
Nikhil Gada
But sir, in terms of demand, because we have seen that the demand has not been great in the market and with new competition coming in, so. And we have not delivered sort of the growth that we were for the last month to two years. So when we say that we are trying to see, or we are rather seeing any improvement, can you give some sort of understanding how and what are the things that are working for us which is helping us think about the growth that we are looking at?
Nirupam Sahay
Yeah, so we have a strategy that we’ve rolled out over the last quarter which is basically targeting weighted deals. So large dealers across the country, the weighted dealers, our focus is on establishing a very strong engagement with them, rolling out programs for these large dealers and regaining counter share or increasing counter Share which was already high in quarter one itself. We’ve seen high double digit growth in these weighted dealers. So we’re targeting about 700 odd dealers across the country, weighted dealers and we’re seeing a high double digit growth already there. The second is in terms of new product introductions.
So roughly about 33% of our sale in quarter one was from NPD’s, so launched over the last couple of quarters and we expect that to accelerate as we launch more and more new products in the coming three quarters. So that again the strategy is working well in terms of helping us to increase the top line. The third event terms of basically getting more out of the influencers. So really the engagement with Plumbers. Plumber meets. We’ve relaunched the Plumber app that we had to make it far more intuitive and user friendly. All of those actions are leading to far more traction with Plumbers as well our interaction with architects, because that is going to be a key segment for us going forward, particularly institutional, but also for smaller projects in general trade.
So we have specific teams which are working with architects and interior designers. So that again is showing traction already and we expect that to accelerate. We’re also going to be investing in major brand building campaigns in the coming quarters, which includes both ATL and btl, so above the line, below the line and a lot of digital. And we believe that’s a good way to build the brand both for bathware and for consumer appliances. So with a combination of all these activities, I think we are confident that the market growth rate is looking like low single digits at this point of time for the year.
It may change in the coming quarter, but this point of time, that’s what it looks like and we expect to grow significantly higher than that and that’s why we are confident of gaining market share this year.
Nikhil Gada
It’s well understood. So just lastly, on the consumer appliances business, you know, all the product corrections that you have made, how do we see this business, you know, in terms of numbers, what kind of numbers are we targeting for FY26 and also if you can give some understanding on margins as well.
Nirupam Sahay
Yes. So in the appliances business we are targeting roughly about 430 to 450 crores in this year. So that would be. And this obviously is with the base of coolers in general trade, which was there, we’ve chosen to get out of that category. So the overall growth rate will be impacted by that base. But if I look at the categories that we are focusing on going forward, which is kitchen appliances, air coolers and E commerce and water heaters, there will be very high growth. So I think that’s a conscious decision that we believe that this is the right step to take at this point of time so that we can focus on the key businesses which will help us to drive high double digit growth this year and going forward for several years.
We’re already a very significant player in chimneys. We have high market share in the chimney space. We want to grow the market share in cooktops and hobs and sinks in this year itself. So all the actions are basically making sure that we continue to leverage the strength that we have in chimneys but also ensure cross selling of cooktops, hobs and other kitchen appliances to leverage on the strength that we built over the last couple of years in chimneys. In terms of margins, again, I think hitting double digit margins is really the objective that we have for this year.
And then building on that going forward.
Nikhil Gada
When you say 430 crores, the base is very, very high for us to achieve this kind of number.
Nirupam Sahay
Sorry, what is that?
Nikhil Gada
We have seen a 35% degrowth in 1Q and then when we target.
Nirupam Sahay
Yeah, so the degrowth is primarily because of the air cooler in general trade. So that was a high base in quarter one. We took a conscious call to get out of that business. So that is the base which has led to the degrowth in quarter one. Now going forward obviously that impact will not be there. And with high growth in kitchen appliances and coolers in E commerce, then over the next few quarters that number will keep increasing.
Nikhil Gada
And the working capital cycle in consumer you expect that to remain similar as currently trending or we are working on improving that as well.
Nirupam Sahay
We are working on improving that as well. So there is an inventory reduction of about 20 odd crores which has happened in this quarter. We continue to focus on improvement in working capital. So we expect we’ve already seen an improvement in working capital in quarter one and we have targeted action which will ensure that improves in the coming quarters as well.
Nikhil Gada
One last question to Shikaji. Sir, you mentioned, you know, last phone calls that we are targeting close to 250 crores debt reduction in two years. Now when we say that we are looking at 60, 70 crore reduction in this particular year, are we to say. That we are going to look at. A close to 180 order crore reduction in FY27?
Sandeep Sikka
Yeah, this depends on the repayment schedule which we have. So the net reduction which I assume six days, we have around 80, 90 crores of repayment. And for any new capex which we Are planning, you know, we may take another 20 crores overall. That’s why, you know, 60, 70 was there. So rest next year we’ll have a bigger repayment that is somewhere around 120 crores.
Nikhil Gada
So that’s how the plan is. And so in terms of the net debt number, where do we see this number to be? You know, three years on the line? Are we planning to become debt free in 3, 4 years time frame?
Sandeep Sikka
So number of initiatives have been worked. On and many of them I think if you see the PNL would be, you know, slightly visible right now. I know this will take another few quarters for us to prove, but once we are back in the momentum the way we were in 2004 and 2000, 2024, 2023. I think in four years, five years, definitely most with all the internal accruals which we are generating, we should be able to pay off the debt.
Nikhil Gada
Thank you so much for your time.
Naveen Malik
Thank you.
Nirupam Sahay
Thank you.
operator
Thank you. Participants who wish to ask a question may presta and one at this time. The next question is from the line of Rahul Kumar from Vaikariya. Please go ahead.
Rahul Kumar
Yeah, hi sir. First question is on pathway. Actually we have seen a pretty sharp improvement in the operating margins in this quarter. What has driven that?
Nirupam Sahay
Yeah, I think so. There is work obviously that has happened on gross margin and as we had said in the last con call so that we have optimal costs to drive profitable growth. So I think a combination of the work on gross margin and on cost is basically what is leading to it. We’ve also focused on increasing the in house production capacity utilization at our plants. So that is also helping. We have consciously over the last few quarters really worked on making sure that we have the optimal manpower as well across the businesses both in of terms as well in consumer appliances.
So we’ve taken all the steps that were required to make sure that we have a team that is in place which is fit for purpose for driving the kind of profitable growth that we want in this year and in the coming years. So I think all those measures have paid off basically in quarter one. And I think with continued focus we believe that that will just accelerate in the coming quarters as well.
Rahul Kumar
Okay, and what are the aspirational target. For margins to go by, let’s say. By the exit of this year on FY27.
Naveen Malik
So this year as I mentioned earlier, we’re targeting the mid teens and then showing improvement on that in the coming financial year, in the next financial year. So if you’re at mid teens Then we go to higher teens by next year.
Rahul Kumar
Okay. Okay. And this number you are saying, is. It for the entire year or for exit quarter?
Naveen Malik
No, so we are actually targeting that for this year, for this financial year, for the full year.
Rahul Kumar
Okay. On the consumer appliances part of the. Business, I may have missed that. But what is the working capital cycle over there? I don’t think it was mentioned in the presentation. And what is the debt net debt. Which is there on the part of the business?
Nirupam Sahay
Yeah, so the working capital cycle number of days is at this point of time about 130 odd. 133 days. Like reduce the inventory by about 50 crores receivable. So that momentum we expect to continue in both quarter two and quarter three. So we’ll see a further reduction in this going forward.
Rahul Kumar
And what is the debt net borrowings figure for that business?
Naveen Malik
So on the standalone basis it’s around. 35 crores.
Rahul Kumar
And on the pipes part of the business. Can we say that the worst is over in terms of pricing and volume?
Rajesh Pajnoo
Yes, absolutely. Or are there more headwinds? No, no, the work is almost over. As I said, we are doing very well. We have boost a growth of around 30% volume in July and we are at the same strike level in August also. So the worst you can see is over.
Rahul Kumar
Okay. Okay, that’s all. Thank you.
operator
Thank you. Participants who wish to ask a question may press star and one at this time. To ask a question. Please press star and one. Now the next question is from the line of Nikhil Gadda from Abacus amc. Please go ahead.
Nikhil Gada
Yeah, thanks again. Sorry, just one question. What is the timeline for the separate listing of both the companies?
Nirupam Sahay
So we have made an application to. Stock exchanges way back in the month of March. There have been few set of queries which we are responding, you know, very fast. So we expect that within next 30 days, 35 days we should have the SEBI approval in place. Our understanding is that it’s taking time with the exchanges right now and after which we will proceed to NCLT immediately. And there we feel span of around 8 to 12 months or 8 to 9 months or whatever. You know how the NCLT moves.
Nikhil Gada
Yeah. Thank you.
operator
Thank you. Participants who wish to ask a question may press star and one at this time. The next question is from the line of Raman KV from Sequent Investments. Please go ahead.
Raman KV
I’m sorry, I joined the whole little date. I just want to understand that with respect to a demerger in the listed entities it will be bathware and plastic. Pipes and the demergency will be consumer products, right?
Nirupam Sahay
Yes.
Raman KV
And so in the presentation our EBITDA is 58. But when we calculate the EBITDA I’m getting around 49 crore. So I just want to understand the adjustment.
Naveen Malik
When you. When you add 58 where is 58? So I think you’re looking at the. Consolidated EBITDA versus 58. So. So 50. Around 50 crore EBITDA is there for HIR Limited and balance is towards the H home innovation limit.
Raman KV
Okay.
operator
Thank you. Participants who wish to ask a question may press star and one at this time. Ladies and gentlemen, as there are no further questions from the participants I now hand the conference over to the management for closing comments.
Naveen Malik
I just like to thank everybody who joined on the call today. There have been certain green offshoots I’ll say in this quarter in terms of whatever we are trying to do in terms of improving the overall business, overall operations. I think we’ll have to wait. Investors will have to wait with us for another quarter or so as we come back fully in the momentum as we were initially. Thanks again for joining us today. Thank you.
operator
Thank you on behalf of MK Global Financial Services limited That concludes this conference. Thank you for joining us. And you may now disconnect your lines.