Jyoti Resins and Adhesives Ltd (BSE: 514448) Q2 2025 Earnings Call dated Nov. 21, 2024
Corporate Participants:
Utkarshbhai Patel — Managing Director
Vinay Pandit — Investor Relations
Analysts:
Madhur — Analyst
Shubh Shah — Analyst
Harsha Banka — Analyst
Amit S — Analyst
Madhur Rathi — Analyst
Jatin Chawla — Analyst
Chinmay Nema — Analyst
Rishabh Bothra — Analyst
Presentation:
Operator
Ladies and gentlemen, I welcome you all to the Q2 and H1 FY ’25 Post Earnings Conference Call of Jyoti Resins and Adhesives Limited. Today on the call from the management, we have with us Mr. Utkarshbhai Patel, Managing Director. As a disclaimer, I would like to inform all of you that this call may contain forward-looking statements, which may involve risks and uncertainties. Also, a reminder that this call is being recorded.
I would now request the management to brief us about the business and performance highlights for the quarter and half year ended September, the plan and vision for the coming years, post which we will open the floor for Q&A. Over to you, sir.
Utkarshbhai Patel — Managing Director
Thank you, Vinay ji. Happy New Year to all our investors, and I hope you all are doing good. About the business, yes, quarter two, the result has already announced, and you all know that the market is a little flat and the demand was slow, but still the festivals and the rainy seasons are over now. So for next quarter three and quarter four, the market is now very bullish for the building and construction materials, we strongly believe that. And about the raw materials, the raw materials are as soft as earlier. So there is no increase in the raw materials costing.
So we can start for question and answer.
Questions and Answers:
Operator
[Operator Instructions] We’ll take the first question from Madhur. Go ahead please.
Madhur
Hi. Good morning, sir. Thank you for the opportunity. Sir, I wanted to understand, when I look at our H1 numbers, we had highlighted that we’ll sacrifice on the margin, but there would be a volume and the revenue growth that would flow into, but that hasn’t happened. Sir, so why is that? And when can we see this margin reduction strategy that we are following to flow into our numbers?
Utkarshbhai Patel
Yes, Madhur. So you are very right that, that were the plans. But actually, the market was very, very soft as we done lots of effort with the team and the demand from the tertiary level was very slow, and it happens to all the companies as the results are announced for all the companies now for the quarter two and you have observed that — we have observed that the demand was totally slow. So it will be very risky strategy. We thought that if we push the more material through to the retailers, to the distributors, then maybe the chances are to make that heavy debtors on that and also the demand is not good in the ground level, so it will be not a good strategy.
So I thought we will cover into that — into the quarter three and quarter four when the market will be stable and in a good position. That is the reason that — but we have also passed some — the discounts also. It’s not like that we have not passed that discounts. We have made offers into the Diwali opening Muhurat for the 10, 15 days also for the silver coins and etc. So it also gives us the good response for that. And so that’s why we are able to at least cover the volume as per earlier.
Madhur
Okay. Sir, so for FY ’25, what kind of top line and bottom line growth do we see for our business?
Utkarshbhai Patel
So as I mentioned, that was the plan for the 20% of volume growth. And as we have taken the volume growth in quarter one 20% around, but quarter two because of the rainy season and the festivals and the demand — slow demands, we just stay flattish. So for the quarter three, quarter four, we will try our best to achieve at least 20%, 25% of volume growth so we can reach at least 15% of volume growth end of the year.
Madhur
Okay. And sir, on the price pricing front, do we see some kind of price high core price realization growth in H2?
Utkarshbhai Patel
No, price is not any variations in the price. I think it will be flat for that.
Madhur
Okay. And sir, on the margin front, do we see margins to be stable? Or do we see that they’ll go — they’ll reduce a bit, but that will be covered up in volumes?
Utkarshbhai Patel
So as I mentioned that we are planning to — for the 3% to 4% for the sales promotion discounts or price reductions. So we have keep it with ourselves from this operating profit margin. And more 3% to 4%, we want to invest in branding and advertising. So we have started that, and it is in the process. So it’s not like that, that amount is totally used in the current quarter. But we believe that the operating profit margin will be 28% to 30% around end of the year.
Madhur
28% to 30%. Okay. Got it, sir. Sir, just a final few questions from my side. Sir, we have highlighted that our ASP increased because of the share of premium product that has increased. Sir, so what percentage of our revenue would come from premium products versus our regular products? And sir, what would be these premium products that we have highlighted?
Utkarshbhai Patel
So that are the two products, EXTREME 3 and ULTRA 5IN1. So that is 30%, 35% from our revenue. So earlier, it was around 25%. So it has increased almost 10% for the premium product shares.
Madhur
Okay. And 25% would be a year ago, or what would be — when this would be 25%?
Utkarshbhai Patel
That I need to check exactly — that I need to check exactly. So I don’t have the exact data for that. But if we talk about the last year, yes, it was around 22% to 25%, and now it is 35%. So it has gradually increased within the last two, three quarters, we can say.
Madhur
Okay. And sir, how are the economics for this product? So what kind of — from a — if our regular product would be at an average selling price of INR100, are these products, how much higher are they? And on the margin front, how much excess margin can we own on these?
Utkarshbhai Patel
I cannot say the exact excess what margin we are getting from the premium products. But I can say about the realization value, it is around 8% to 10% category-wise. So as an example, if I talk about our medium premium product, WP 2IN1, which we are selling the most, as I mentioned, the waterproof adhesives. So if it is in INR200 range, then the premium product will be INR220 around. And again, the most premium product will be INR240 around. So almost 8% to 10% gap between each products, you can say.
Madhur
Okay, sir. Got it. Sir, I wanted to understand, we have — on our FY ’24 balance sheet, we have current liabilities that are unpaid expenses of INR84 crores versus INR81.5 crores in FY ’23. So what are these? And why aren’t we debating it into our P&L?
Utkarshbhai Patel
So that is basically provisional expenses created. And as we have mentioned in earlier calls that these are the points and sales promotions offers we have made for the carpenters and the retailers. So these are mostly 80% is for the carpenter point loyalty programs and 20% for the loyalty program for dealers.
Madhur
Okay. Sure. Got it. Sir, just a final question. Sir, on a dealer level, sir, what kind of discount or dealer margin do we provide versus Fevicol so that our volumes grow versus our dealers?
Utkarshbhai Patel
Pidilite is providing almost 4% to 5% to the dealers, and we are providing 8% to 12%, maybe it goes to the 13% or 14% as compared to the newer territory and the mature territory. So it is average 8% to 13%, we can say.
Madhur
Okay, sir. Sir, got it. Sir, thank you so much, and I’ll get back in the queue.
Utkarshbhai Patel
Thank you.
Madhur
Thank you, sir.
Operator
Thanks, Madhur. We’ll take the next question from the line of Shubh Shah. Shubh, you can unmute and go ahead please.
Shubh Shah
Yes, sir. Thanks for the opportunity. Sir, I have two broad questions. First is, can you break down this year’s — this quarter’s and first half volume growth and price change? As I understand, the ASP has — you passed on discount in this quarter, right?
Utkarshbhai Patel
Yeah. Right.
Shubh Shah
So any directional number on the percentage price decrease and percentage volume growth for this quarter and first half?
Utkarshbhai Patel
So it’s not a price decreased, but as announcement of the price remain the same, but we have run the different kind of sales promotions offers as per the festivals, as per the state-wise as we all know that the India has a different kind of mindset in each state. So we are running 14 states. So as our five states are mature enough and nine states are still we — are growing state. So we have used a different kind of strategy.
But it will be very tough that I can give the detailed breakup for this. But as an example, we run silver coin offers into the Muhurat order for the Gujarat, Rajasthan and MP. If I talk about the UP and Delhi, then we went for the hard bags for the — we tie-up with the American Tourister bags for that. If we talk about the Karnataka, there we have — went for some gold offers like that. So it’s a different strategies we use for that.
Shubh Shah
Understood. So on this front, taking from the previous question that ASP — overall ASP has increased, but still discounting has also increased in this quarter, discounting or incentives, if that’s the correct understanding?
Utkarshbhai Patel
Right.
Shubh Shah
Understood. And sir, on the volume growth front, any directional number on Q2 and H1 volume growth? So in Q1, we did 20% volume growth for Q2 and H1 overall?
Utkarshbhai Patel
Q2 is flattish almost Y-o-Y.
Shubh Shah
Understood. And sir, last question, any comments on how did our core geographies and the new geographies do for the first half and this quarter, so core geographies are Gujarat, Maharashtra, etc., and the new geographies, North India, all of those things?
Utkarshbhai Patel
So for the quarter two, actually, what happens for the newer territory, actually, we are getting good response into the quarter two. But the volume is — that are the initial stage and the volume is not much higher so it doesn’t reflect on the balance sheets. But as an example, if you talk about the UP, for the Lucknow is a big territory for us for the UP. But if I talk about the Jhansi, Varanasi that are the smaller territory, but that smaller territory actually give us the 100% volume growth this quarter two as compared to quarter one. So if I consider quarter one to quarter two because as an example, in Varanasi, we were doing 5 tonnes into the quarter one. But this time, quarter two, we have done 10 tonnes. So it is volume-wise, that is 100% growth into that territory. But 5 tonnes and 10 tonnes is not much volume all over. So it doesn’t reflect much under the balance sheets actually.
Shubh Shah
Okay. Understood. Understood. And what was the volume growth in our core territories? It was flattish, flattish for Q2?
Utkarshbhai Patel
For Q2.
Shubh Shah
Understood. Understood. And so in the Q1 in which we had 20% volume growth, was it also driven by flattish growth in our core territories and much higher growth in the new territories, or there was something else?
Utkarshbhai Patel
No, it is more into the core territory actually because the volume is higher into the core territory. And also, as I mentioned that in newer market, we are getting good response and good placements are there. Now dealers are giving us the repeat orders also, as I mentioned, into the quarter two, we get that response in Varanasi, in Jhansi, in Lucknow —
Shubh Shah
And sir, the last question. So for now out of roughly 12,000 tonnes of volume, what would be the proportion of volume that comes from new territories? And any guidance on that proportion going in the next two, three years, what that number could look like?
Utkarshbhai Patel
That is very tough to say right now actually because the growth will be coming into the both territories. Because if I talk about the core territory still, there is a very big scope into that. As an example, if I talk about the Karnataka, we are doing good into the Karnataka. But if I talk about the market share, then it is only 15% market share we have taken yet. So it is — we are more optimistic to grow this territory at least double from here. So yeah, it will be the mix efforts together.
Shubh Shah
Okay. All right. Very helpful and clear. Thank you.
Utkarshbhai Patel
Thank you.
Operator
Thank you. We’ll take the next question from Harsha Banka. Harsha, you can go ahead please.
Harsha Banka
Good morning, sir. My first question is, why do you say you are second largest wood adhesive brand when Jivanjor sales, which is Jubilant Industries’ brand are more than Jyoti sales and both are in wood adhesive?
Utkarshbhai Patel
Okay. So I want to clarify that Jubilant Organosys Limited that Jivanjor brand had the epoxy adhesives and the white glue both categories. And there are so many categories into the epoxy adhesives also. So they are into the rubber adhesives, they are into the binders also. So it is different, and they are into the lower quality segment also. So we have maintained ourselves as a premium retail segment into the white glue. So that’s why we are claiming ourselves in the white glue premium retail segments only not for the economical grades or not for the rubber adhesives or for the epoxy adhesives.
Harsha Banka
And my second question is what about the capacity utilization ratio for H1 and expected utilization rate for H2? And is there any further expansion plans from your side?
Utkarshbhai Patel
Yes, we are almost getting our environment clearance within maximum two months. So after that, we can start to purchase the new boilers, vessels, reactors, cooling towers, etc. So we are planning to increase our existing capacity. So in brownfield, we will go for the INR5 crores to INR10 crores of investment in next six months. So the capacity after that, it will be almost double from here.
So we can — yeah, so we can reach at least INR500 crores of top line with the existing plant. For that, actually, we require some storage to increase the storage capacity for the finished goods and the raw materials for that. So maybe we will plan a near space to our factory on the lease for that. And after that, for the next investment, we’ll go for the greenfield for the newer plants and newer place, but it will take at least two to three years for that.
Harsha Banka
Okay, sir. Thank you so much.
Utkarshbhai Patel
Thank you.
Operator
Thanks, Harsha. We’ll take the next question from the line of Amit S. Amit, you can unmute and go ahead please.
Amit S
Hello, sir. How is the competitive intensity from other players? We are hearing that Pidilite is also quite aggressive in the market. How are you facing up to the competitive scenario?
Utkarshbhai Patel
Competitions, we can say are more active since two, three years. It is not that nowadays, they are active already. The competition was from the first day. But the thing is that they are also suffering with the demand and supply into the market. So quarter two was very tough for all the companies. If I talk about the Astral, if we talk about the Asian Paints, if we talk about the Pidilite also. So this white glue category or any other building material, construction products, it’s a little tough to manage this revenue growth into the little — less demand into the market.
So yes, there are same active as per earlier. But what I believe that, that is a good thing, I think, happens to us because now we are more aware, more active to save our market share, plus we need to grow into the newer states. We have to save our market share to the existing core states, plus we need to grow for the core states also. So we are also very active. We have recruited 150 people of team into sales and marketing last one and a half years.
So we are improving our CRMs. We are improving our ERP systems. We are recruiting the people into the admin and accounting back office supports. We have hired the training manager for that. The induction program is going on. Recently, we do our sales and marketing being the training program into Ahmedabad, and that is the second program actually done by us. Every quarter, we are planning to do this. So these all are activities into the pipeline. And I think it is always — it should be there, and it always make the organization more strong for that. So yeah, we’ll definitely take for opportunity to grow more from here.
Amit S
Okay. And sir, regarding your rewards point program, we see around INR90 crore liability for expenses in your liability side of the balance sheet. Is this similar to the INR600 crores to INR650 crores odd liability for expenses in Pidilite balance sheet? And how do you see this trend behaving for you as you grow?
Utkarshbhai Patel
I think this will not grow much from here because we have started some auto redemptions program also. Earlier-stage carpenters were used to accumulate the points since so many years, one, two, three, four years, a few of carpenters. And now we have started to motivate them. We are running a different type of attractive offers to make them decisions to redeem the points. So these type of strategies we have already developed and started, and we are more improving into that — into our loyalty program. So it will not go much higher as per revenue growth. But yes, compared to the Pidilite, it is almost same that liabilities, that INR650 crore liability is what Pidilite has.
Amit S
Yes, sir. Thank you for it.
Utkarshbhai Patel
Thank you.
Operator
Thanks, Amit. We’ll take the next question from the line of Madhur Rathi. Madhur, you can go ahead please.
Madhur Rathi
Sir, thank you for the opportunity once again. Sir, I wanted to understand, sorry — sir, we have highlighted that, sir, this INR500 crore revenue can be reached over the next six months, sir. So is this the reason why our revenue is stagnant in the INR250 crores, INR260 crores levels? And for this to inch up, we will need that capex to come in and for our capacity to double?
Utkarshbhai Patel
Yeah. Sorry, I didn’t get your question exactly?
Madhur Rathi
Sir, so we are currently in the INR250 crores to INR260 crore level on a revenue basis. But the INR500 crore revenue, you highlighted that once our capacity doubles, that would be — we could achieve that —
Utkarshbhai Patel
Right.
Madhur Rathi
So is this the only limiting factor that over the next six months that when our capacity doubles, then over the next three to four years, we can double our revenue. Till that time — till the next six months, it would be on the muted level?
Utkarshbhai Patel
So what happens, it’s not much investment into the brownfield existing plants. So we want to be well prepared for that for the next three years of journey. And what happens in this B2C business, we are running our offers and quarter schemes as we have divided a year into the four parts, so every quarter end maybe also we are — some quarters also, we are doing short-term 15 days, 20 days offers also like that I mentioned into Diwali, we did the Shubh Muhurat offer for the 15 days when the new year came.
So it’s like that. So sometimes what happened, the sales goes high to that level that we require. As an example, in last March 2024, we have done — reached almost 2,000 tonnes per month. So that is almost utilization of the 100% capacity what we have right now. So that spike happens. So we want to be well prepared so we didn’t — don’t lose any market shares from that. So that’s why.
Madhur Rathi
Okay. So sir, can we double our revenue by, let’s say, FY ’28 to INR500 crores?
Utkarshbhai Patel
Right. So we have the plan for the ’27. And as quarter one was 20% of volume growth, so that was a very good quarter at that time, and we get the good confidence also for that. But the quarter two, as we have mentioned that it was softer. And still we have half year to cover. So we are very optimistic that we will cover to at least 15% to 20% volume growth this year also. So if we’ll go with this pace then it will reach in 2027, INR500 crores of top line.
Madhur Rathi
Okay. And sir, what — so in our presentation, we have highlighted 20% to 25% volume growth. Sir, so this entire INR500 crores would come from — so I guess, around INR300 crores, we could achieve in FY ’25? So sir, post FY ’25, sir, can — what would be the value growth? And what would be the volume growth? Volume growth, I guess, you have highlighted 20%, 25%. So what could be the value growth that would help us achieve?
Utkarshbhai Patel
I think right now, no, not much any variations in the pricing. So we are assuming that the price will be so flat. So we are guiding for the volume growth, 20%.
Madhur Rathi
Okay. Sir, so this premium segment that is 30% to 35% won’t grow much, or this would be stable going forward?
Utkarshbhai Patel
That is very early to say something about that because, of course, we are more optimistic to increase the more shares for the premium products. But the demand of the market, the perception of the market should be a little different every states. So a few states are more — consuming the more premium products. But it’s not like that every states are demanding for that. So it is tough to say specific on about that.
Madhur Rathi
Okay. Sir, a few questions from our balance sheet. Sir, why did our bad debt increased from INR5 lakhs to INR1.92 crores in FY ’24? And similarly, sir, what would be our receivables as on date that are more pending more than six months?
Utkarshbhai Patel
The first question was?
Madhur Rathi
Sir, our bad debts increased from, I guess, INR5 lakhs to INR1.92 crores in FY ’24. So why is this a huge jump in that? And similarly, sir, what would be our debtors that are pending more than six months as on like H1 end?
Utkarshbhai Patel
So for the bad debts and debtors, it is always into the pipeline. And as you can see, that is below 1% actually. So we are assuming that we should stay below 0.5% or 1% between for the bad debts. So that provisions has done and that is on the pipeline. So it is not like that we have a clear wipe off from the balance sheet, right? So it’s provisions done for that, and it will be happens into the final balance sheet made into the March.
Madhur Rathi
Okay, sir.
Utkarshbhai Patel
It is —
Madhur Rathi
Yeah, sir, please go ahead, sorry.
Utkarshbhai Patel
Below 1% from the revenue, not more —
Madhur Rathi
And sir, how much would be pending for more than six months out of the — like the — our balance sheet numbers — receivable numbers of H1, how much would be pending out of these INR99 crores — INR100 crores, how much would be pending for more than six months?
Utkarshbhai Patel
So if I say about the percentage-wise, it should be not more than 0.3% or 0.5% max.
Madhur Rathi
Okay. So only, I would say, like INR30 lakhs to INR50 lakhs would be only pending for six months — more than six months?
Utkarshbhai Patel
The total revenue percentage. So if I talk about the INR260 crores of revenue, then it’s go to the INR1 crore around.
Madhur Rathi
Okay. Okay. Got it. Sir. And sir, just a final player, sir, when can we become a pan-India player? And sir, is the Euro7000 brand registered in the name of company or in the name of promoters?
Utkarshbhai Patel
No, it is registered into the 0name of the company from the first day. And all other category products like subproducts, we have also registered from the first day. And about the pan-India presence, right now, we like to penetrate more into the existing 14 states. Still it’s a huge opportunity and huge volume to cover into the 14 states. But if we get the good opportunity into the remaining states like Odisha, Bhubaneswar like Chennai or Kerala, if we find out good channel partners or good opportunity, we’ll definitely look for that also.
Madhur Rathi
Okay. Sir, just a final question I had come up. Sir, I think in the furniture segment, if there is an increase in share of organized sector, that is the ready-made furniture or these branded furniture, sir, how does this impact on our revenue over the longer term? And sir, what percentage of our revenue would come from B2B versus B2C?
Utkarshbhai Patel
So right now, it is a 3% revenue come from the B2B and 97% from the retails only, B2C only. But yes, you are very right that the organized sector is growing. But if we go into the deep of this particular segment, then it is happening only in metro mega cities, where the main offices furniture, the workstations made into the modulars. If we talk about the modular kitchens, then upper segments in metro mega cities that happens for the modular kitchens.
So still, the retail market is very, very huge as 70% population still are in villages into the India and they are migrating into the cities. So when they purchase one BHK, two BHK, max three BHK apartment, then definitely, it’s not the — if we talk about the commercial aspects, it is not fit with the modular things because it will go to the higher for that particular segment. So that goes with the trade segment only with the carpenters, with the plumbers or with the electricians like of interior done, not like everything is ready-made. So still, it is a long journey for the India, as if we talk about the IKEA. IKEA has came into India since 2015. So it is almost nine, 10 years to that, but not much volume they have taken yet.
So — but parallelly, yes, this market will not reduce from here. Definitely, this market, ready-made, will be grow in some phase. But we have also introduced our team and our product into the OEMs also, and we are recruiting more people for the OEMs into the metro and mega cities. And we are planning for the separate management, separate leaders for that, separate consignee and sales agent for that. So we want to take this market shares almost 10% to 15% to our revenue. But 75% to 80% will remain into the B2C only.
Madhur Rathi
Okay, sir. Got it, sir. Thank you so much, and all the best.
Utkarshbhai Patel
Thank you.
Operator
Thanks, Madhur. We’ll take the next question from the line of Jatin Chawla. Jatin, you can unmute and go ahead please.
Jatin Chawla
Yeah. Hi. Good morning, and thanks for the opportunity. My first question is, how do you see the demand trends in the month of October and November? You mentioned till September, things were slow. But with other categories, we have seen post festive things have picked up. So how are you seeing things? And are you confident of delivering 20% kind of volume growth in the second half?
Utkarshbhai Patel
So for the October, the demand was also slow actually and during the Diwali time. But right now, market is picking up. So we have still one and a half month. And right now, orders are good, the demands are in the pipeline and the things are moving towards a good way. So we are optimistic for at least 15% volume growth into the quarter three.
Jatin Chawla
Okay. Got it. Thanks. That’s all.
Utkarshbhai Patel
Thank you.
Operator
Thank you, Jatin. We’ll take the next question from chat. It’s from Ankit Khaushal. So his question is about expansion. He’s asking, how will you do the expansion by way of debt or total cash accrual?
Utkarshbhai Patel
Can you repeat the question, please?
Operator
Yeah. So he’s asking, how will you do the expansion, by the way of debt or total cash accrual?
Utkarshbhai Patel
By the way of the debt and the cash approvals?
Operator
Accrual. Accrual.
Vinay Pandit
We’ll use debt or we’ll use our internal cash for capacity expansion? His line seems to have disconnected. I’ll just answer on his behalf. Expansion will be done any brownfield or greenfield will be done from internal cash accruals. No external debt will be needed. As you would have seen in the presentation, we are currently settling on around INR137 crores of cash and cash equivalents. We’ll just hold for him to log back in a sec.
Operator
Yes, sir, you’re audible.
Vinay Pandit
Okay. Please go ahead.
Operator
Sure, sir. So we’ll take the next question from Chinmay Nema. Chinmay, you can go ahead please.
Chinmay Nema
Good morning, sir. I’m audible?
Operator
Yes.
Chinmay Nema
Sir, just a quick question on the other current liabilities. Could you share — so in FY — at end of FY ’23, this was INR86 crores. At end of FY ’24, this is INR88 crores. Could you share, during the year, how much is the addition to this number? And then how much was the redemption?
Utkarshbhai Patel
It was almost same for the last year, I think INR3 crores difference was there, right, Vinay ji?
Vinay Pandit
Yes, sir.
Chinmay Nema
Basically, just trying to understand what is the churn in this number. So how much gets added to this number during the year and how much gets redeemed?
Utkarshbhai Patel
The net addition or reduction will not be more than INR5 crores to INR10 crores on an annualized basis. Basically, the pace at which the points are getting created and redeemed, you will not see impact on turnover on an annualized basis of more than INR5 crores to INR10 crores.
Chinmay Nema
But then, I mean, just trying to understand how old are these receivables. Basically, as sir said that not more than 1% are greater than six months old. So does that mean that there’s big churn in this number, so essentially 99% of these liabilities get churned out over a one-year period?
Utkarshbhai Patel
No, you touched up receivables and liabilities in the same statement when you’re talking about —
Chinmay Nema
I’m sorry, payables.
Utkarshbhai Patel
Yeah. So liability for expenses, typically, today, we have a 3-year redemption program, but some of them may be slightly longer, but these are the old ones. But as we go ahead, we are trying to churn it out faster. So the pace of creation versus redemption stays neutral on the company’s balance sheet.
Chinmay Nema
So would it be possible for you to provide the breakdown as to what’s the aging schedule of this?
Utkarshbhai Patel
No, we don’t do that. We can’t give that. But if you see last year’s notes to accounts to the revenue, the net impact on the turnover was only INR2.9 crores.
Chinmay Nema
Okay. All right. Thank you.
Operator
Thanks, Chinmay. We take the next question, the follow-up question from Shubh Shah. Shubh, you can go ahead please.
Shubh Shah
Hey hi. This is Chirag. Sorry about the incorrect name. This is Chirag. Just wanted to ask one question, Utkarsh ji. If I look at the large listed global peer, right, in their consumer and bazaar segment, they did end up in this quarter also having sort of a mid-single digit, a little higher than mid-single-digit volume kind of growth. So my question is, is there anything concerning in any of our geographies where you think there is minor — even if it’s a minor market share loss or if there is a minor loss due to — we are not present in the right segment, subsegment. Just wanted to know if there is anything? Or is this just a quarterly blip?
Utkarshbhai Patel
No, I don’t think so that market will go more from here because this is a trade business and the traders, the retailers are very much involved into the markets. So we want to stay with this segment only. And parallelly, we will increase our modular OEMs categories also. So — but not for the consumer bazar market you are talking about.
Shubh Shah
And then the difference is largely because, I guess, the unseasonal rains were more in the geographies that are core to us and whereas for the large listed peer, that was more spread out across India. Is that a possible explanation for the difference? Because we were flat and they were up 7%.
Utkarshbhai Patel
For the 7%, you are talking about whom?
Shubh Shah
Pidilite.
Utkarshbhai Patel
Pidilite, yeah. But see, I mentioned earlier calls that, that is 870 products they are manufacturing from the different plants, and they have created a huge category, so like paints, building construction materials, epoxy, adhesives, binders and white glue also. So it is very tough to say about that white glue segment. But as per my knowledge, the white glue segment is almost flattish for the Pidilite also.
Shubh Shah
Especially in our geographies, in our core geographies, you mean?
Utkarshbhai Patel
Yes, yes. Because they have — do the acquisitions of the Araldite also in 2020, ’19 around. So that is also a very huge network for that epoxy adhesives range. So that is all over — all put together with 870 products and 6,100 SKUs, they are on to the 7% of growth. So it’s very tough to say for the particular product line.
Shubh Shah
Understood, sir. And on the new geographies, you said that the traction is good. Any geography that you can point out which is doing better or worse? Or is it broadly very similar across the new geographies also, the traction? Even though their volume contribution is lower, we understand that. But just in respect to their own past, anyone doing much better than expectation, much worse than expectation?
Utkarshbhai Patel
UP is doing good actually, and we are getting the good response as we have expected as the UP market is a little — the market they are eager to attract a regional brand. And if we do the good customization, do the good ease of doing business policy, we always welcome that kind of brand. But Delhi is actually a little tough for us, what we have expected. So Delhi is not doing much that, but UP is doing good. And also, we have entered into the Punjab for the different Chandigarh also, Patiala also. So the response into the Punjab is also good.
Shubh Shah
Understood. And UP can be as big as Gujarat, Maharashtra?
Utkarshbhai Patel
Yes, of course. So we have a big plan. Right now, we have a team of almost 30 people, which were into the last quarter, actually 22 people. So more eight people are on board in UP now. And still, we are planning for the — at least double the team from here. So maybe it will go to the 60 persons of sales and marketing team we require into the UP.
Shubh Shah
Yeah. Understood. Thank you so much for the time.
Utkarshbhai Patel
Thank you.
Operator
We’ll take the next question from chat, which is from Gunit Singh. So he’s asking what are the primary reasons for the increase in margin from approximately 20% to the current 30% to 33%? And is it due to lower raw material prices? Also, can the 30% plus margins be sustained?
Utkarshbhai Patel
So it is from the lower raw material cost also. And as we have increased the premium product market share, so it is both together.
Operator
And he’s asking, can this 30% margin also be sustained?
Utkarshbhai Patel
Yes. This year, we’ll go — we lined with, I think, 29% to 30% of margin. Above that, I think not lower than that.
Operator
All right, sir. Thank you.
Utkarshbhai Patel
But if I say about the longer term, in earlier call also, I mentioned, for the longer term, we guide our investor for the 22% to 25% of EBITDA.
Operator
Okay, sir. Sure. So we’ll take the next follow-up question from Madhur Rathi. Madhur, you can go ahead please.
Madhur Rathi
Sir, just one question. Sir, how many SKUs do we have? And sir, what would be the smallest pack that we sell? Or are we selling only bulk packs?
Utkarshbhai Patel
We have 125-gram and 250-gram packs also. That used is very less used by the carpenters. But the size, we can say that 500 gram to 1 kg, 2 kg 5, 10, 20, 30, 50 and 60. So 60 is the biggest pack size.
Madhur Rathi
Sir, the majority would be bulk, I guess?
Utkarshbhai Patel
Majority will be bulk. So from the 5 kg to 60 kg is almost we can say. So 5, 10, 20, 30 is the same and 50, 60 is the same in our total volume.
Madhur Rathi
Okay. And sir, how many SKUs do we have currently?
Utkarshbhai Patel
Around 65 to 70 SKUs.
Madhur Rathi
Okay. Sir, just a final question on the margin front. Sir, this 22% to 25% margin, sir, so we highlighted that 3%, 4% would go to discounting and 3%, 4% would go to advertising. Sir, so these margins would come in, in FY ’27 only, or like over the next five years, gradually, we’ll keep on adding these advertising efforts as well as discounting efforts to dealers?
Utkarshbhai Patel
Yeah. I understand your question. It gradually happens basically. So right now, in the quarter two, there was no meaning to make investment in advertisement because as when was the market was very down at that time. So it was no meaning for that. So right now, we are starting for that. So gradually, it will be go to this Q3, Q4, then next year, Q1, Q2, Q3, so gradually, we’ll increase that — into that.
But we have hired the agencies. We are into that maybe you all have seen our Diwali video also earlier that we have made the carpenter video in the Holi also, and we do the promotion on the digital platforms, social media marketing running very aggressively into the carpenters are into the Facebook more as compared to Instagram. So we are targeting the Facebook audience also for that and YouTube also. So it has already started for that.
Madhur Rathi
But we can see this moving over the next three years to these levels?
Utkarshbhai Patel
Next three years, yes. We can say it gradually will happen so that — but from the next year, I can surely say that, that advertising and branding will be the at least 3% to 4%. That’s for sure.
Madhur Rathi
Okay. Okay, sir. Got it, sir. Thank you so much, and all the best.
Utkarshbhai Patel
Thank you.
Operator
Thank you, Madhur. We’ll take the next question from chat from Bharat Gupta. So he’s asking, what are the key challenges faced in Delhi market? Why despite getting more discounts, we are yet to make a mark? And second question he is asking is, what’s the road map for gaining traction with OEMs?
Utkarshbhai Patel
So for the Delhi, the challenge is that, right now, the team and the channel partners only. And we have not do as much as effort, we can say, into the Delhi as aggressive to find good channel partners and team. That is the challenges and the new product is as though acceptability is always tough when you enter into the new market and Delhi is a little premium market. The second — what was the second question, for the?
Operator
It was what’s the road map for gaining traction with OEMs?
Utkarshbhai Patel
Right. So for the road map, right now, we have targeted for the metro mega cities. So in Mumbai, we have a good team, different channel partners for the OEMs, and we are getting good response. So almost from 3% revenue, what I have mentioned, that is 2% revenue is coming from the Mumbai only. And we have started the plan for the Telangana, for the Karnataka and for the Gujarat also.
In Ahmedabad, we are getting good response into the OEMs, and we are increasing the number of dealers into that. In Pune, we have increased our number of dealers into that, and we have hired the separate team for that. So if I talk about the brief of the road map, then we’ll go for the separate team, separate team managers for this and that is in the pipeline. So I think we’ll recruit more than 50 to 100 people into the OEMs in the next year.
Operator
All right, sir. Thank you. So we’ll take the next question from Chinmay Nema. Chinmay, you can go ahead please.
Chinmay Nema
Sir, just a quick follow-up on my previous question. So I just want to understand on the asset side, what is the counter entry corresponding to the other current liabilities?
Utkarshbhai Patel
Cash on the books.
Chinmay Nema
It’s cash on the books, right? So basically, as these are paid out, it will affect — it will reflect in our cash balance?
Utkarshbhai Patel
I said receivables and cash on the books both.
Chinmay Nema
Receivables, understood.
Operator
Thanks, Chinmay. So we’ll take the last question from the chat box from Gunit. He’s asking, what kind of growth are we looking at for FY ’26?
Utkarshbhai Patel
So FY ’26, we are targeting for the INR375 crores to INR400 crores of revenue.
Operator
All right, sir. Thank you. So since this was the last question — okay. So we’ll take one more question from Rishabh Bothra. Rishabh, yeah, you can go ahead please.
Rishabh Bothra
Hello, sir. Good morning. Just wanted to understand, you elaborated on your expansion of capacities and expansion of widening of distribution network. Can you please let me know what it is now and what will be post the expansion?
Utkarshbhai Patel
Post expansion means you are talking about the brownfield what we are —
Rishabh Bothra
Yeah. Both in case if there is any greenfield as well as brownfield expansion, what will be the capacities which we will be having?
Utkarshbhai Patel
Okay. So after brownfield, INR10 crores, we’ll double our capacity from here. So almost 4,000 tonnes per month, we can say. But for that, we are assuming that for the plant and maintenance, the efficiency will be the 85% to 90%. And so if I talk about the revenue-wise, then it is — it can go to the INR400 crores to INR500 crores of revenue with this brownfield investment. And after that, when we are going to plan for the greenfield that the investment will be done almost INR40 crores to INR45 crores around, and it is all put together land, plant, building, machineries, packing machineries, etc., and that can go to almost INR1,200 crores of revenue.
Rishabh Bothra
Sir, with respect to brownfield, when will be having this available for commercial production expanded capacity? And by when will the greenfield come up? I wanted to get a sense, the revenue amount, which you mentioned, will be available from which financial year? Is it ’27, ’28? How is it?
Utkarshbhai Patel
No, it will be available [Technical Issues] so we’ll get [Technical Issues]
Rishabh Bothra
Sir, your voice is not audible slightly.
Utkarshbhai Patel
I’m audible now?
Rishabh Bothra
Yeah, better.
Operator
Yes, sir.
Utkarshbhai Patel
So by this investment, we’ll get the environment clearance approval within two months. So after that, we’ll start to purchase and install the vessels, reactors, etc., for that to the existing plant. So within six months, we can say. So we can say by June or July month of next, so from six months from here, we will be able to have the total capacity of INR500 crores of — to generate the INR500 crores of revenue.
And for the greenfield, we’ll start to look for the land, we’ll purchase the land, than it gets the one and a half year to get the environment clearance approvals, then the one-year time for the building constructions, everything. So it will take almost two, two and a half years of total plan from here. So we can say in 2027, ’28, we will be ready for the new plant as a greenfield.
Rishabh Bothra
So just to brief, before this call, I started looking at two quarters and my concern was that market is growing, why Jyoti is not growing. So hearing these conversation, I believe that your growth path momentum will be strong and good enough. Lastly, the distribution network, if you could let me know what it is now and how are you expanding that and in which geographies?
Utkarshbhai Patel
Sure. So If we talk about the branches, what we are working with, so that was 28 branches last year. And right now, we are on the 38 and more four branches are into the pipeline, so it will go to the 42 branches. So we are already on the way that to establish our consignee and sales agents, channel partners for the strong distributions. Then as I mentioned that in December 2022, so beginning of the ’23 January, we can say we have 250 people of team into the sales and marketing. And right now, we have the team of 400 people. So we have recruited almost 150 people into the one and a half year of span. So that is also in the pipeline. I believe — and we have plan for the next one year also. From here — next one year, we’ll recruit more 100 people into the sales and marketing, includes the OEMs team also. So we are into the development to set our channel partners, to set up our team to grow from here.
Rishabh Bothra
Can I ask one more last one? I missed out asking. So in terms of the product category, there are other players also likes of Pidilite, Astral. What is unique of our product and why a customer wants EURO brand? I’m sure EURO is a popular name. And in terms of marketing, is it — we are also touching base with the influencers, social marketing? Or how are you taking it on that front?
Utkarshbhai Patel
So it’s actually a long answer for the questions. And it is — but brief, if I can say that it is all about the efforts of the 17 years, and it’s a very micro management we do — we did. And yes, you are very right to the influencers. So we believe we take the responsibility on our shoulders at the tertiary level. So as an example, if we talk about the newer states, if we talk about the UP right now, so we have taken the total responsibility of the pool of the material from the retail counters. We are giving the guarantee, we are giving the commitments to them. And EURO is always with a promising brand, what we have promised that we have always overdelivered to them.
And because — see, no any business can be profitable without the repeat customer base. And the repeat customer base will be only because of the — if your product is good, your quality is good, your service is good and your commitment is as — you delivered as per your commitment. So these all are the factors what we have done till the date since 17 years, our inductions program, our training program, our recruitment to the team, the members, how we recruit? What culture we have made.
So it’s lots of — all the effort together, we are getting the good response as compared to — I cannot say as compared to Astral or Asian Paints. But because they are into the primary sales more, they have acquired the multiple businesses right now, they have already the distribution network, so they have made them the distributor and primary sale done by them. But we are focusing on to the tertiary level, and that’s why that profit margin we are getting in the repeat business. Maybe the revenue-wise, maybe we are flat into the quarter two, but it’s not like that we have not made a good profit. The profit numbers are good. So this is all the 360 degree efforts.
Rishabh Bothra
Thank you, sir. Thank you for the detailed explanation. And my objective is never looking at quarter-to-quarter, it’s a longer-term horizon. Hope to meet you soon. We’ll connect with Vinay and fix up the things.
Utkarshbhai Patel
I appreciate it. Thank you.
Operator
Okay. Thank you, Rishabh. So this was the last question for the day. I now hand over the call back to Vinay sir. Over to you, sir. Thank you.
Vinay Pandit
Thank you, sir. Utkarsh ji, would you like to give any closing comment before we end this call?
Utkarshbhai Patel
Yes. So we keep looking forward, and we are optimistic for the new challenges. And it is always good to take the challenges that we can grow more and build a strong foundation, strong organizations. And we are looking for more people to recruit. We want to expand into the existing core states and go deep into that also. And your support and wishes are with us. So we’ll try our best to make our commitments fulfill into the market. Thank you very much, everybody.
Operator
[Operator Closing Remarks]