Hindware Home Innovation Ltd (NSE: HINDWAREAP) Q4 2025 Earnings Call dated May. 27, 2025
Corporate Participants:
Unidentified Speaker
Naveen Malik — Chief Executive Officer and Chief Financial Officer
Nirupam Sahay — Chief Executive Officer
Rajesh Pajnoo — Chief Executive Officer of Pipe Business
Sandeep Sikka — Member
Analysts:
Unidentified Participant
Ronak Osthwal — Analyst
Rohit Prakash — Analyst
Parikshit Gupta — Analyst
Nikhil Gada — Analyst
Vinod Krishna — Analyst
Moksh Ranka — Analyst
Darshil Jhaveri — Analyst
Utkarsh Nopany — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Hindware Home Innovation Limited Q4FY25 Earnings Conference Call Host hosted by Ariant Capital Markets Limited. 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, please signal an operator by pressing STAR and then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Raunak Ostwal from Aryan Capital Markets Limited. Thank you. And over to you sir.
Ronak Osthwal — Analyst
Thank you. Good evening and welcome everyone. On behalf of Aryan Capital Market Limited, we welcome you to Hindware Home Innovation Limited Quarter 4 and FY25 Earnings Conference Call. From the management side we have Mr. Nirupam Sahai, CEO of Bath Business. Mr. Rajesh Padinu, CEO of Pipe Business, Mr. Naveen Malik, CEO and CFO of Greenware Home Innovation Limited and Mr. Sandeep Sikka, the Group CFO. Kindly note that some of the remarks or observations made during today’s call might be forward looking such as financial projection or statement regarding company’s plan, objectives, expectations or intentions. The company does not have any obligation to revise this forward looking statement to reflect any future events or development.
For a comprehensive disclaimer, please refer to slide number two of the presentation. With that I would now like to hand over the call to management for their opening remarks post which we will open the question and answer session. Thank you and over to you Mr. Navin. Sir, you may proceed. Sir, you may proceed.
Naveen Malik — Chief Executive Officer and Chief Financial Officer
Good evening. Navir Malik, this side. Welcome to Hinder Home Innovation Limited FY25 and Q4FY25 earning call. Kindly note that some remarks and observations made during the today’s call might be forward looking. These may include but are not limited to financial projections and statements regarding company’s plan, objective, expectations or intentions. The company does not have any obligation to revise these forward looking statements to reflect any future event 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 FY25. Our business CEOs will then share updates on their respective segments.
Quarter. For FY25, the company reported consolidated revenue of rupees 699 crore with an EBITDA of Rs. 51 crore. And for FY25 consolidate revenue was Rs. 25, 23 crore. With the EBITDA at rupees 184 crore. We are undertaking strategic initiatives across bathware pipe and consumer appliances businesses, key priorities include optimizing product portfolio for high growth premium segments, expanding market reach and focus on top key cities, fostering innovation, strengthening brand loyalty and enhancing operational efficiency. I would now like to turn it over to Mr. Nirupam Sahai to take you through the bathware and consumer appliance business over to Narupam.
Nirupam Sahay — Chief Executive Officer
Thank you Naveen and good evening everyone. For quarter four FY25, the Pathway business reported 360 crores revenue and 37 crores EBITDA. For FY25 revenue was 1,384 crores and EBITDA was 147 crores. Despite the challenges in FY25, our robust foundation provides a significant advantage to us. Hindware’s leading brand position, characterized by high brand awareness and strong recall remains a key asset for future growth. The past year has been a period of profound strategic introspection for our business during which we rigorously identified critical areas to not only recapture market share but also to significantly bolster overall profitability.
This deep dive immediately propelled us into decisive action across our businesses and operations. We have implemented comprehensive cost optimization by rationalization of our employee cost structures, strategically focusing our efforts on top tier cities, streamlining our supply chain and fundamentally strengthening our after sales service. Concurrently, we’ve reinforced our go to market, our quality control measures and achieved tighter inventory control by prioritizing domestic sourcing. Our forward looking strategy centers on premaritization, a weighted dealer approach and strengthening distribution in top cities. Our sales force is actively driving demand through architect engagements, contractor collaborations and strategic project partnerships. These concerted efforts are already proving instrumental and we are now observing early promising offshoots of growth within our bathware and consumer business segments.
Despite challenges, our robust foundation and leading brand position remain pivotal assets for us. We anticipate a positive impact on performance within two to three quarters and we are confident in recovery of significant market share so that we achieved numbers higher than our past performance of FY24 to start with. Moving to our consumer business, we reported revenue of 92 crores for the quarter with an EBITDA loss of 7 crores. For FY25, revenue stood at 352 crores with an EBITDA loss of 17 crores. We have taken decisive steps in the consumer appliances business to cut losses driven by a thorough product portfolio rationalization and driving operational cost efficiencies.
We have rationalized our offerings prioritizing high demand all season kitchen appliances like chimneys, cooktops, hobs and sinks and accordingly optimized our resources to strengthen our business returns. I’d like to reiterate that with all the efforts and investments made over the last few years, our kitchen appliances, chimneys, hobs and cooktops business has made significant strides in terms of sales and market share. And going forward we’ll put all our energies in driving strong profitable growth in this segment. To maximize impact, we are concentrating our efforts on top tier cities, efficiently targeting key demographics and bolstering our brand presence.
Additionally, we are sharpening our focus on institutional sales and streamlining our E commerce portfolio, ensuring a lean effective approach to drive accelerated growth. I’d now like to hand it 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 Nirugh. This is Rajesh Parjanu from Pipes Business here. Good evening everyone and welcome to our investor call. It’s a pleasure always to speak with you all. In quarter four F5 we reported a revenue of 247 crores and EBITDA of 24 crores. For FY25 complete year revenue was 786 crores and EBITDA was 61 crores. Despite challenging market conditions and volatile raw material prices impacting revenue growth, we achieved strong 12% year over year volume growth in FY25 demonstrating the effectiveness of our strategies and the strength of our operations. CPVC remains a key contributor representing 39% of the revenue during the financial year, highlighting the continued strength of this product line.
Our new plant in Roorkee, Uttarakhand is nearing completion and will soon commence production, significantly boosting our manufacturing capability and establishing a key footprint in Northern India. We are also actively expanding our product portfolio to capture new market opportunity and enhance overall value. We have successfully launched the new offerings including foam core pipes for underground drainage very recently and the products which are lined up for this year are double walled collagrative pipes, polypropylene random copolymer pipes, we have fire sprinkler system and we have PTMT faucets. We also are focused on implementing initiatives across all business functions to optimize resource allocation, leverage technology and enhance productivity and cost effectiveness.
Finally, we have made strategic investment in our brand and distribution channel to significantly boost our market presence and penetration. We are confident that these initiatives will drive substantial profitable growth. 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 their touch tone dial. If you wish to withdraw Yourself from the question queue. You may press star and two participants are requested to please use handsets while asking a question. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. The first question is from the line of Rohit Prakash from Marshmallow Capital. Please go ahead.
Rohit Prakash
Thank you for the opportunity. So my, I have two, three questions and my first question is on the long term strategy. I mean long term trend that I see in the business. So if I go Back to late 2000s, around 2006, 2007, Pariware and Sera together barely formed Hindustan sanitary wares or hindwear sales. So I mean hindwear sales was equal to the sum of Parivar and Sarah. Now it’s not a short term trend. But over the if you see over the last couple of decades what’s happened is each of them are either equal or larger than us individually and we have Jaguar also which is larger than us.
So over, I mean the long term trend seems to be that we are losing mind share in the customer’s mind and because of that losing market share as well. So just wanted to hear your comments on that. I mean how do we plan to restore Hindwer to the old dominance that we had?
Nirupam Sahay
So I’ll take that. So I think there are a few things which I mentioned in my opening remarks and I’ll elaborate a little on them. I think what we are focusing on is over the next few years clearly driving growth ahead of the market. Basically meaning that we gain market share year on year. How do we plan to do that? The first is really our go to market strategy. So I mentioned that we are really doubling down on distribution, really focusing on making sure that we have strong distributors across the country. Wherever we have relatively weak distributors, we are strengthening the distribution in those places.
We are also going in for a weighted dealer strategy. We’ve already kicked that off which means that we’re focusing on the weighted dealers or the larger dealers in each one of the key markets. We are also driving a strategy on products of clearly distinguishing between our mass, mass, premium, premium products. So between Hindwear, Hindwear, Italian Collection and Kyo, which are our three brands for mass, mass, premium and premium, clear delineation between the brands and making sure that we have robust product portfolios for each one of those segments. What we are also doing and which has already kicked off starting from Q4 of FY25 and has accelerated in Q1 of this year is focusing the sales team on demand generation.
So not only getting in sales but also generating demand. Whether it’s through architects, whether it’s through plumbers, through contractors. So really making sure that our sales force spends about 40, 50% of their time on demand generation. So through a combined impact of the go to market changes we’re making, the product portfolio changes that we’re making the way of working of our sales team in terms of more focus on demand generation, we’re extremely confident that we will get back to good growth in this business and a significant growth above the market growth rate, which means that we then gained market share year on year.
A lot of our internal processes are now geared to driving this growth. Whether it’s incentives for the trade or it’s incentives for the sales force. They’re all now focused on driving growth. So I think with a combination of all these factors, they’re extremely confident we are already starting to see the impact of it. And as we had said in the opening remarks, over the next 2, 3/4 we will definitely see the impact of all these actions in terms of good positive growth ahead of the market.
Rohit Prakash
Thank you for that elaborate answer. And Mr. Sahai, there’s hopes on you because I mean it was interesting to see some of your interviews from when you worked on Philips and how in a declining revenue business you include margins. So we hope to see the growth and margins coming back here. See my second question is if I see the last decade in hindware, right, We’ve had a lot of internal structuring. Like we have had three corporate restructurings, one demerger, one sale of asset and then another demerger that we are going through right now. On top of that we have had other organization restructurings also.
So we combine the faucet ware and the sanitary wear salesforce. We combine the support system of both the consumer appliance and the bathwear business. Now we are separating these businesses now. I mean at least it’s a very small sample set. But I mean it seems like there’s a lot of confusion within the ranks on what is happening strategically. When you compare that with some of the competition like Parivar or Sarah or somebody, they’re just in the bathroom still. They’ve not gone out of the bathroom and they’re just focusing on doing more of the same as they did five, seven years back.
So are we done with all the structuring restructurings and going forward we just plain old vanilla running the business as is.
Naveen Malik
So basically if you little bit seen this over the last 10 years. But when I talk about first I’ll talk about the corporate restructuring and then we can talk about the restructuring. So in terms of the corporate restructuring, when you see we had a demerger and then for followed by a slump sale and we have, you know, communicated this also in the past very extensively. This was, you know, for unlocking the values. You know, like when you see a previous company which was hsil, it was having packaging as well as the consumer facing sanitary process and other businesses together.
So the first two restructurings were purely focused on, you know, segregating the subset of a B2B businesses. On the B2C businesses, I think from any shareholder who would have shelled you, who would have held the shares pre 20 till now, it would have been a substantial value creation. The proposed restructuring which is right now underway, for which the board has approved and we are waiting the appropriate approval from the stock exchanges that is further to unlock two subset of businesses separately. One is on the consumer side and second is on the building product side. So lot of, you know, when you do all these exercises you learn also and you should take steps to improvise wherever the market demands needs.
So right now our building product business and, and our consumer product businesses were getting clubbed. So as a result of this whole demerger and balancing and amalgamation as proposed in the scheme, we strongly feel it will further create a new subset of value for any long term shareholder. I think that’s one part on the corporate restructuring. Second, on the businesses like over, over the last 10 years we have focused on certain, you know, including certain more segments into our businesses like pipes. We are not a faucet players from 15 years back. Now faucet plays a bigger role.
And also on kitchen chimneys and hops and cooktops, we have definitely not been successful on some seasonal businesses like air cool fans and you know, we had some air purifier. So these are the learnings which we are improvising on. And now when you see as a combined entity of HHIL and Hindwear together, obviously they will get demerged. We are very focused into four key businesses which is sanitary faucets, pipes and kitchen chimneys and hobs. And in each one of these businesses, you know, we have a significant, I’ll say market share and a growing market share for each one of them.
So we feel that now having made investments over last six, seven, eight years, now is the time, you know, over the next two years we have done a lot of internal. Over the last two years we have done a lot of internal, you know, rejects in terms of, you know, optimizing the cost, realigning the teams. So all I can assure you is for the good of the organization. Nothing against, nobody plans for, you know, bad. It’s always for the good.
Rohit Prakash
Thank you. My last question is on debt. I think a couple of years back when a market cap was above 4,000 crore, there was a suggestion by a shareholder on raising equity to pay down debt. But the belief at that time was that the cost of equity is much higher and we have debt for strategic reasons. And then we’ve had to dilute when the market cap was half that level at around 2,000 crore to pare down debt. And if you see some of the leaders in the business, they tend to do the opposite. They dilute and make the balance sheet strong during the up cycle and they take on debt and become aggressive in a down cycle to gain market share.
So in the context of business cycles and the learning, is there any rethought on balance sheet strength and debt and of hopefully becoming strong there so that we don’t have to dilute equity at a very low price in the future?
Naveen Malik
So I take your point. But you know, we keep evaluating all this stuff in terms of, you know, how we make our overall balance sheet much stronger. Financial year 24, 25 has not been a great year for us especially and that has led us to lot of introspection internally where we need to improvise and where we what are the strengths on which we further leverage on? I think you will have to give us another 12 to 18 months. You know, in terms of first stage, you know, we feel that in next 12 to 18 months, 12 to 15 months are restructuring and you know, putting both the companies in the listed mode will be there.
And definitely this is backed up by a very robust internal, you know, as we have worked out a very strong business plan for each of the business segments we are in for each other company which then technically should throw out a free cash flows and will require, you know, maybe 24 months to get back into a situation wherein major chunk of the debt is actually paid out of the free cash flows.
Rohit Prakash
Thank you. So over the next two, three years, the idea is to reduce debt to a more reasonable level. Am I right?
Naveen Malik
Yeah. Yeah.
Rohit Prakash
Thank you so much. I’ll get back into the. Thank you so much for your answers.
operator
Thank you. Our next question comes 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 across segments. First on pipes and fittings. Can you please help me with a split between B2B B2C and if there was B2G as well for FY25 and the aspiration going forward in the next two and three, two to three years.
Rajesh Pajnoo
See as far as this business is concerned, quantum of B2C is always around 65 to 70% of the total business and B2B is around 30 to 35%. And as such we are there now we were a new player but we have, we are enrolled with almost all the projects in the country. All the consultants approvals are in place. So we are at a threshold of around 30% of our business comes from B2B and the rest is for retail segment. And going forward in any case this is going to be the trend 30 to 70%. But yes, we presume that coming forward we will be doing better.
But at this, at these rates which are now of raw material rates we only see volume growth happening in the coming future and not the value growth.
Parikshit Gupta
I understand sir, with the depressed PVC pipes, I believe recently there was a green shoot basically and a slight uptick in the PVC price.
Rajesh Pajnoo
Yeah, that happened last one week. Just last one week. And that’s the silver lining. It has happened after a long, long time. Maybe after around two and a half quarters. We have been waiting for this. So there is a slight upward price which has happened at 1.5 rupees per kilogram. So we presume this is too small at a base of around sixty seven rupees kg. You know, last if we see last three years figures, last one year has been from seventy eight rupees to sixty seven point five rupees. But last three years it has gone down from 140 rupees to sixty seven point 5 rupees.
So one and a half rupees. But we definitely aspire that yes, maybe down the line two months we will be having some upward movement in resin prices. Then the things will be stabilized. Otherwise as a company, as our policy and whatever we have been doing last three, four years, we are as far as percentage is concerned, we are the fastest developing player in pipes. So we’ll be continuing our volume growth. But value growth will only come once the resin prices go up.
Parikshit Gupta
Understood. In terms of the volume growth I. We all understand that with the roorkee plant commissioning 100% it will add 12.5 thousand metric tons. However, are there any further near term plans for further augmenting capacity? Maybe for the new product segments like DWC or other ones in the FY26.
Rajesh Pajnoo
See the product lines which I talked about was like DWC is already in Place the machines have come, we have taken the trials. We are waiting for the BIS approvals because this product has a BIS line. So we have applied, we are, we are expecting the licenses to be there in next 15, 20 days and we shall be commercializing this product. As far as other products are concerned, it’s like spare sprinkler system which takes some time and this will be somewhere lost somewhere around last part of quarter three. And there is PTMT faucets which will take another one and a half a month to get launched.
But these all are value added products. As far as volume is concerned, it will only come from your PVC and CPVC products. As far as Roorkee is concerned, we are starting with a capacity of 12,500 metric tons. That’s right. What the figures you have. But seeing way forward like once we commission it, I think by 1st of July we should be commercializing the operations. There we are at the fag end. We have almost closed down all the things which have to be done there once we start the operation. Seeing forward next three, four months how the market behaves.
We have, we have created the entire plant and we have, we are just installing some machines so we’ll be in a position to install more machine because the full plant is ready and we’ll be enhancing our production capacity. But that would be totally dependent on the market reception.
Parikshit Gupta
Understood. These are very helpful. Just one more question before I rejoin the queue in sanitary wear. Can you please help me with the share of faucets in terms of the top line? And just on that, I recently visited the vibrant buildcon Expo. During that I was able to meet with a couple of manufacturers from more B. We understand that there was a downturn in the more BI industry because of the mass segment players, you know, losing out on volumes because of the export tensions. However, at a general trend they have also started to expand domestically be it through B2B or even B2C channels.
Some players even are on E commerce platforms as well as have their own brand presence in northern and even central Indian markets. So just on this, do you see this as something which has been happening since a while now or is it a new imminent sort of a threat to players like us?
Nirupam Sahay
So on the first question, the share of faucets in our overall sales is between 35 and 40%. So we’ve seen good growth in faucets over the last few years. So the share has gone up to between 35 and 40% every quarter on Mobi. This is something that has happened over the last year and a half since the export issue came up, particularly the usa. And there’s a little bit of desperation in the MOBI manufacturers to try and make up for that loss of export sales. So it’s not very recent. It’s been happening for more than a year, year and a half.
I am firmly of the belief that at the end of the day the consumer is looking for quality product. And in our case, since we have our own manufacturing units both for sanitary wear and faucet, we are focusing on offering the best quality products at the best possible prices. And if we continue to do that, I think MOBI will be there, but I think it will eat away a little more at the smaller brands or the unbranded segment rather than the top three, four players. So I think we’ll just stay focused on providing quality products at the right price and I think that should hold us in good stead.
If we continue with our strategy on the go to market, on the product portfolio, et cetera that I talked about earlier, I think we can overcome the potential threats on the local suppliers.
Parikshit Gupta
This is very helpful. But just a final follow up. In terms of the portfolio of hindwear, in terms of sanitary ware, I believe there is a wide range which essentially caters to almost all segments of almost all economic segments of the consumers. Although you mentioned focus on more premiumization in your opening remarks. But the products that I witnessed at the Expo were also of high quality. And the price point, be it in sanitary wear or even in consumer appliances, was relatively competitive from all the A grade players like ourselves. So I mean, given this context, are we further rationalizing our portfolio or is there something that is incorrect here?
Nirupam Sahay
Yeah, so there are two steps that we’re taking on the portfolio. One is a rationalization. So low volume, low gross margin products we have rationalized and are continuing to rationalize. And the focus in the new product introductions over the next year and a half, you already made the plan for the next six quarters is basically largely on the mass premium and premium segments. Making sure that we plug any gaps that are there in the portfolio, whether it’s in terms of products themselves or price points, and really focusing on the categories that are growing in the market.
For example, in Sanchez, wall mounted is growing. So really making sure that we have a strong robust portfolio in wall mounted, which is higher value and higher gross margin. Similarly in something like basins, for example, making sure that we have a robust product portfolio and over the counter basins, where again there’s a disproportionate growth happening in the market. So really making sure that we are with the market or ahead of the market in terms of trends and having the right products and largely focused on the mass premium and premium.
Parikshit Gupta
Understood, sir, these are all very helpful. I will rejoin the queue. Thank you.
operator
Thank you. Our next question comes from the line of Utkarsh Nupani from BOV Capital Markets limited. Please go ahead.
Utkarsh Nopany
Yeah, hi. Good evening, sir. So my first question is for your Bhatia segment. So if you can just guide us, like how has been the industry growth rate in FY25 and what is your expectation for FY26? Sir?
Sandeep Sikka
So the overall industry has grown in single digits. If I look at sanitary wear and faucets, the tiles business has grown in actually low single digits. Going forward in FY26, the expectation is that tiles will continue to be at the low single digits in terms of market growth. Sant Re and faucet again likely to be in the mid to high single digits. So the expectation is that there’ll be marginally higher growth in FY26, but still in single digits and in tiles in low single digits.
Utkarsh Nopany
Okay, fine, sir. And sir, we have our bath Fair revenue has degrown by around say 12%. So we have lost market share in FY25. So if you can just help us understand, is it because that we are facing some strip competition from our major peers or like we are facing strict competition in any specific geography? If you can just highlight it would be very helpful, sir.
Naveen Malik
Yeah. So I think there are a couple of aspects of the degrowth in FY25. One is I think there were some gaps in our portfolio portfolio in line with the market trends. So when I talked about focusing on things like wall mount, over the counter basins, etc. Those are the areas in which we potentially had some gaps in our portfolio. That is what we are very quickly plugging and making sure that we have extremely strong portfolios where the market is growing. So that was one aspect. The second was in terms of distribution. So there was a little bit of disturbance in the course of the year in terms of distributors and dealers.
We’ve gone back, as I mentioned in an earlier comment, on really focusing on strengthening our distributors, making sure that they’re actually performing the task of a distributor, which is reaching out to multiple dealers across the geography, giving credit in the market. Wherever we’re finding distributors are not playing that task, then we’re making sure that they either improve or, or we find an alternative distributor there. The second is, I think in terms of focusing on the large Dealers versus the massive dealers. So we have a very large number of dealers that we reach out to, which is a strength, but really making sure we’re gaining counter share in the weighted dealers.
I think that key element which probably didn’t go as well as we planned in FY25 and a strong focus starting end of quarter four last year, FY25 and in FYI in quarter one of FY26 we’ve gone back to these weighted dealers, identified across markets and really making concerted efforts to gain share in these weighted dealers. I think a combination of these two things is what is going to get us back to gaining market share overall and gaining market share in weighted dealers.
Utkarsh Nopany
Like you mentioned that we are targeting to gain market share over the next two, three years quarter period because of the initiatives which we have taken. So like in the H1 FY26, can we expect to grow at a market level, if not more than market level and start posting positive revenue growth or you see that in H1FY26 it would be a difficult thing to say right now or maybe after 2, 3/4 only we would be able to say more confidently.
Naveen Malik
So what we’ve said very clearly is that we expect all the measures that we’ve taken over the last few months and are continuing to take to have an impact over the next two to three quarters. So in this financial year we are confident of hitting double digit growth and growth ahead of the market. So if we look at it, it’s going to play out over the next 2, 3/4. And if I look at the whole 4/4 of this year, it will definitely play out in terms double digit growth and growth ahead of the market which I mentioned is likely to be in the single digits.
Utkarsh Nopany
Okay, so my second question is on your consumer division. So like earlier, we have merged the sales and marketing customer care warehouse logistic operation of our bathware and division with our consumer appliance division. And as we are now looking to demerge the consumer appliance division. So whether we should, whether we are looking to create separate backend functions for consumer division in future as well.
Nirupam Sahay
So that is still under internal discussion. So not at liberty to share right now.
Utkarsh Nopany
Okay, so my third question on is on your water heater JV business. So like in this quarter we have provided an impairment loss of around 30 crore which is roughly as per our calculation is 45% of your initial investment amount of 68 and a half crore for this business. So can you please help us understand the rationale for such a Large impairment made for this JV business which recently commenced operation in FY24. And are you going to book any further impairment loss in future? And we have made also incremental investment of 17 crore for this business in, in this March quarter.
What was the rational for that?
Naveen Malik
So if you see in the year 2021 the water heater was part of the Holy One subsidiary of HHIL by name of a company called Industiga Private Limited. And all the investments which were done into that subsidiary was technically at a face value. However in May 2021 we did a joint venture with a French company and and they also infused equity into the venture to make it a 5050 venture. So as a result of that when you see the results of the quarters of FY21 22 in the consolidated results on account of the loss of control, you know we had to acknowledge an upside of somewhere around 65 crore, you know as a fair valuation of the investments in the subsidiary.
Also we acknowledged there was a gain on a slump sale because initially when we slum sailed this business into a subsidiary since since it was a wholly owned subsidiary we did not acknowledge the gain but as we lost the control so overall gain was around 100 crore as such which was in a consolidated books but not in the consolidated financial but not in the standalone financials. So now as we as the subsidiary as the joint venture has started with the production. So there are initial factory costs which are there which we are trying to see how we can work on.
And for that we had to infuse 17 crore more during the quarter four and that was done. All these investments into a subsidiary are made into this joint venture are made on the fair value based on an independent value report. And accordingly we had to take the impairment both on the standalone as well as on the consolidated financials.
Utkarsh Nopany
Okay sir. And sir, can you please give us the budgeted capex for FY26?
Naveen Malik
You mean to say that overall Capex or what?
Utkarsh Nopany
Yeah, Overall CapEx for FY20.
Naveen Malik
For FY20. I think the overall Capex should be in a range of 100 to 125. 125 crores. Considering the fact that part of the equipment for our pipes new plant at Roorkee is being you know done in quarter one. And also this considers into account the proposed investments into opening our brand shops and you know and other manufacturing related investments.
Utkarsh Nopany
Okay, thanks.
operator
Thank you. The next question is from the line of Nikhil Gadda from Abacus. Please go ahead.
Nikhil Gada
Yeah. Hi sir, thanks for the Opportunity. So that’s firstly on the but business front, you know we have seen a continuous deceleration in our margins and when we compare to what is business inherent margins are we are somewhere around 500 or 600bps off and I assume you have given some incentives etc as well. But going forward in this next year or two years when we are predicting such high level of growth, then do you think these margins are something which will go back straight to 14, 15% levels?
Nirupam Sahay
Yes. So the two impacts on gross margin which are built into our plans for the coming years. One is increased operating efficiencies as capacity utilization at our plants increases with these volumes. So in our annual operating plan for this year itself, for example, that leads to greater capacity utilization and therefore operating efficiencies which come in which will help us to improve gross margin. The second is that we are, I mentioned a lot of new product introductions coming in over the course of the next six quarters largely at the mass premium and premium segments which will all be at a significantly higher gross margin than existing products.
So that’s built into the, I think a combination of the operating efficiencies from manufacturing, the new product introduction being at a higher gross margin and rationalization of the portfolio. I mentioned that we’re weeding out the low margin products from our portfolio. So combination of these three things will lead to the increase in gross margin. So I think all three are already in play and we’ll start seeing the improvement in gross margin in the coming quarters itself.
Nikhil Gada
So yeah, so it partially answers my question, but I’m just looking for a number here. Are we looking at a 200, 300 bps improvement straight away in the next year or since all these measures you are going to, you have implemented are going to benefit in the coming quarters. Right. So from that perspective, yes, I probably.
Nirupam Sahay
Won’T put a number to it, but significant improvement in gross margin in this financial year itself and then going forward.
Nikhil Gada
And so secondly, just on your guidance for 26 where you’re saying there’s a going to be a double digit growth that we expect in bathware, are we already seeing some green shoots for us in this two months that have gone by?
Nirupam Sahay
Yes, that’s a clear emphatic guess.
Nikhil Gada
Okay, got it. So secondly on the pipes business, you know there is some confusion in terms of your capacity. So if we see from third quarter to fourth quarter there has been a I think 8,000 metric ton increase in our capacity. So firstly just needed an update date on that and the Roorkee capacity will be over and above this 66,000 capacity, 12,500.
Rajesh Pajnoo
Nikhil, what you are saying is right. There has been an increase in capacity because we have received two extruders at our Isnapur plant, that is the Hyderabad plant. So that is why that capacity has got increased. And as far as the road key is concerned, yes, that 12,500 metric tons is over and above this capacity. That will be only mentioned once we start the commercial production.
Nikhil Gada
So apart from the addition that we have done in Isnapur, is there any further land available for doing more expansion in Isnapur or we have maxed that out?
Rajesh Pajnoo
No, we have not. There we have the capacity, we have the place where the plant is already built. We can just increase the number of machines. So we have a provision for expanding our capacity in the current factory itself.
Nikhil Gada
And I assume that that max can go. You can double from what we are currently in in that particular plant, right?
Rajesh Pajnoo
Not double, but we can definitely go 40 to 50% above that capacity in our current system here. Whatever.
Nikhil Gada
And just on the pipes. Business margins. You know, we have seen a difficult sort of a year in terms of how the overall PVC business has gone in terms of pricing. But we have done a good job in terms of our margins overall. So safe to say in a very stable sort of an environment which we assume the next year should be, we go back to the 10, 11% EBITDA margins we always wanted to reach in this business.
Rajesh Pajnoo
It is very difficult to tell you at this stage because everything depends on the moving price of the raw material which is will be there for the whole year. Because what happens is when your prices go down which is currently there, your fixed costs are same, right? And in terms of percentages then your. Your margins in terms of absolute value don’t go up. You cannot commit 10% unless another resume price goes up to 80, 80 rupees. So what we have tried this year is we have hold on to our expenses. We have tried to see that we don’t lose much on our bottom line as well as we have taken care of the top line also if you have one.
Because almost every competitor’s result is out, right? So I think in terms of percentage of volume and value growth we have surpassed all of them like 2% growth in value and 12% growth in volume. But as far as the margin in terms of percentage of 10 or 11% can only be committed when the value. I.e. The price of this raw material goes up.
Nikhil Gada
Understood. Just one last question to for Sandeep Ji Sir. If you can call out what kind of a debt reduction are we expecting in 26 and then in 27?
Sandeep Sikka
I think in next two years we should reduce it by a level of somewhere on 200 to 250 crore. And this is something which looks achievable on the surface, right?
Nikhil Gada
Yeah, go ahead sir. Thank you so much. Thank you for answering all my questions. All the best.
operator
Thank you. Ladies and gentlemen, in order that the management is able to address questions from all participants in the queue you are requested to please restrict yourselves to two questions only. You may rejoin the queue for follow up questions. We have our next question from the line of Vinod Krishna from Avendus Wealth. Please go ahead.
Vinod Krishna
Hello.
Naveen Malik
Yes. Yes please.
Vinod Krishna
Given that we have lost market share, it continues from the first question Rohit asked what is the diagnosis that we. Have done that why we have lost. Market share in sanitary where we were the leaders once upon a time in bathware especially. And unless you do the right diagnosis you can’t take the right steps. And what steps have you taken? So because the market share and now. What is what, where do you think. Our market share will go to in.
Nirupam Sahay
The next two to three years in both faucets and. Yeah, yeah. So I answered that question in. In a few different ways but I’ll just try and go through it again. So the fact is that yes, we’ve lost a market share over the last couple of years. I think that’s a given. Our effort now is in making sure that we continuously gain market share for the next few years. So that is really the focus. Can’t change the past need to focus on the future for the future to gain market share. We’re working on a few key levers.
One is the go to market strengthening our distribution both in terms of distributors and dealers. Second is reorienting our sales team to make sure that the focus not only on driving top line sales but also on driving demand generation. So tertiary sale is what we’ll stay focused on. And the third is really the product portfolio and making sure that we have the right portfolio for not only today but also for tomorrow and driving growth ahead of the market. Along with that we are obviously working on a lot of levers to improve profitability as well. One is gaining market share from a top line perspective.
The other is making sure that we improve on growth, gross margin and optimized cost. And the combination of that leads to higher ebitda. So those are the efforts that we are making and as I mentioned we are already seeing the green shoots in Quarter one of this year itself. And we expect as we’ve committed over the next two to three quarters to show significant improvement in top line and bottom line. I think that will be visible as the results come up in the next couple of quarters.
Vinod Krishna
But you are not ready to explain. Us because even in the last phone call I was asking the same what the diagnosis part, why is it the. Product or the brand or distribution? Where did we lose? Lose enough or where did we lose out? So we are not ready to discuss that on the public forum.
Nirupam Sahay
I answered that earlier as well. There was a issue in terms of some of our distributors who were not performing up to the mark. We’ve taken action on those distributors and either they’re improving based on our feedback or we’re reducing them. The second is we didn’t focus enough on weighted dealers, the larger dealers. We lost some counter share there. We’ve taken steps to regain the counter share and actually gain market share at those weighted dealers. The third is that we had some gaps in the product portfolio which we’ve now filled and will continue to fill over the next few quarters to not only catch up with the market, but stay ahead of the market.
That’s in terms of top line. Then in terms of increasing capacity utilization, greater volumes to our plants. So that improves our operating efficiency working on new product introduction at a higher gross margin. So all of those steps which I mentioned are basically meant to then take us to the next level. So those are the factors. Don’t want to dig too much into the past, but I think that distributors, dealers, product portfolio. Those are the receive address.
operator
Thank you. The next question is from the line of Moksh Ranka from Aurum Capital. Please go ahead.
Moksh Ranka
Hello. Can I know the mix between mass premium and mass premium products for your battery division?
Nirupam Sahay
So I didn’t catch the question you asked me for the share of mass and Mass premium. Yes, Mass, Mass premium and premium. Yes. Today mass is about 50% and about 30% would be mass premium and about 20% is premium. 15, 30, 20. Over the next couple of years, we plan to obviously increase the share of mass premium and premium significantly. Okay, that was, that was an earlier question. Thank you.
operator
Thank you. The next question is from the line of Darshul Javeri from Crown Capital. Please go ahead.
Darshil Jhaveri
Hello. Good evening, sir. Thank you so much for taking my question. Hope I’m audible.
Naveen Malik
Yes, Hello.
Darshil Jhaveri
Yeah. Yeah, hi sir. So. So I think a lot of questions of minor answers. So just wanted to, you know, get a brief, like maybe a more macro type of View for you. So currently like when we said like FY25 has been a struggling year. So in terms of like FY26, we are seeing a double digit growth. So the margin that we’ve seen in FY25 would be a rock bottom. Right. So because if you’re getting growth then you are also seeing about a multiple levers. So we should be able to get back to maybe like at least 8, 9% in current year. So will that be a fair assumption?
Nirupam Sahay
So in the Basquiat business, the EBITDA we delivered in FY65 was already 10 point looking at an improvement on that. Yes.
Darshil Jhaveri
And the pipes, you said that it will come as the price becomes better, right?
Nirupam Sahay
Yes.
Darshil Jhaveri
Okay, okay, okay. So I just wanted to know on a console basis you would see better margins going forward. That’s the key thing for us. Could you call would it be 100, 200 basis points is a fair assumption, sir?
Naveen Malik
Yes, definitely. Because when you’re talking of growth, leverage to come into the play and when you see, you know, with the slight degrowth, it hits us, you know, on the adverse side. But when it’s in, when it’s a growth, definitely the, it will come back very fast. Thank you.
operator
The next question is from the line of Parikshit Gupta from Fair Value Capital. Please go ahead.
Parikshit Gupta
Thank you for the follow up. The next few questions are on the consumer appliances business, please. I understand that the industry cagr overall is over 20% for the next five years. However, there is large amount of competition and we do understand that the brand recall of hindwear, however, with a growing market, a growing consumer base, high competition, there are very low cost of switching. So in addition to the brand legacy, what differentiates hindware, kitchen appliances and heating products for a consumer to select those?
Nirupam Sahay
Yes. So in the consumer appliances business, strategically we have decided to focus on a few categories. So I think the relevant comparison is the growth in those categories. So if I look at kitchen appliances, which is our primary business in consumer appliances, and that’s a strategic call that we’ve taken on kidneys, cooktops and hobs. One is the core, the quality of our products is excellent, even if I do say so myself. And this is feedback from the market. So from consumers, from end consumers and from our dealers, the feedback is very, very positive on quality.
The other is differentiation in the product. So we have for example a range called Max Silence, which is one of the most silent chimneys in the market. So we’re working on several innovations within that space. So we are doubling down on innovation in the categories that we’re focusing on, making sure that we provide extremely good quality, better than market in many cases and differentiated value propositions. The other is that we are investing money in our brand stores for consumer appliances as well. Today we have about 130 odd brand stores. We’ll be putting in another 50, 60 this year itself.
So really making sure that we get the right consumer experience for people to buy the products from there a combination of the product portfolio, innovation brand stores as well as shopping shops in multi brand outlets. Really making sure that we give the best quality products at the best quality prices and provide where the consumer experience is great. So we have in store promoters that we’re putting in in these brand stores who are then able to really explain the product to consumers. We’re also putting in a lot of money on digital activation and below the line activities to really drive consumers to our brand stores and to the multi brand outlets.
So through a combination of all of these, we’re very confident about are growth in the kitchen appliances space. There is a lot of growth happening even in hobs and cooktops. So we’re making sure that we have the right portfolio to drive that growth as well. Then there are adjacent categories in kitchen appliances like sinks for example, inbuilt products, microwaves, etc. Microwaves, ovens. So really making sure that in each one of these adjacent categories, so chimneys is the hero product, but then also cooktops, hobs, sinks and inbuilt products really so give our whole kitchen appliances portfolio to the consumer.
The second in terms of water heaters. Group Atlantic is our French joint venture partner. They’re one of the leaders in terms of technology on water heaters globally. So they’re providing us technology and we are providing the go to market. So really the products there again are top notch quality. So really focusing on product categories where we can provide a differentiated value proposition. Top notch quality and then making sure that we have the physical presence for consumers to go. Also leveraging E commerce. So we are also leveraging E commerce for our kitchen appliances products and our water heater.
So we’ll be focusing strategically on a few categories and making sure that we win in them rather than spreading ourselves thin and trying to win in 10 different categories. That’s really the focus right now. Even when we expand our product portfolio, we look at adjacent spaces within kitchens rather than trying to create a new category. So that’s really the medium term strategy for us.
Parikshit Gupta
Understood. This is very helpful in terms of the overall market share, how I mean tentative what would be a tentative number for hindwear in terms of kitchen products appliances?
Nirupam Sahay
So difficult to give a number because unfortunately, there’s no really good syndicated data available for this category. Having said that, we are a clear top three player in the kitchen appliances space.
operator
Thank you, ladies and gentlemen. We will take that as our last question for today. I would now like to hand the conference over to the management for closing comments.
Naveen Malik
Thank you everybody for joining us. I hope we have been able to articulate and answer your questions in the right perspective. So if you still have more questions, you can still write back to us. And once again, thank you again for joining us.
Nirupam Sahay
Thank you.
operator
On behalf of. On behalf of arihant Capital Markets Ltd. That concludes this conference. Thank you all for joining us. You may now disconnect your lines.