Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Jyoti Resins and Adhesives Ltd (BSE: 514448) Q4 2026 Earnings Call dated May. 08, 2026
Corporate Participants:
Unidentified Speaker
Utkarsh Patel — Managing Director
Samit Shah — Chief Marketing Officer
Analysts:
Unidentified Participant
Saket Kapoor — Analyst
Unidentified Participant
Pawan Kumar — Analyst
Unidentified Participant
Mahek Sanghvi — Analyst
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Presentation:
Unidentified Speaker
Recorded. Ladies and gentlemen, on behalf of Captify Consulting Investor Relations team, I welcome you all to the Q4 and FY26 post earnings conference call of Jyoti Resins and Adhesives Limited. Today on the call from the management team, we have with us Mr. Utkash Patel, Managing Director and Mr. Samit Shah, Chief Operating Officer. As a disclaimer, I would like to inform all of you that this call may contain forward looking statements which may involve risk 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 period ended March 2020. The growth, perspective and vision for the coming year. Post which we will open the floor for Q A. Over to the management team.
Utkarsh Patel — Managing Director
Good morning everyone and thank you for joining us today. On behalf of the management team of Jyoti Resins and Adesis Limited, I welcome all our shareholders, investors, analysts and stakeholders to our quarter four and FY26 earnings conference call. FY26 has been an important milestone year in our journey. Not just from a financial standpoint, but from the perspective of building the foundation for the next phase of scalable growth for the company. Beginning in the second half of FY26, we initiated a comprehensive transformations journey across the organization spanning hr, technology, sales, marketing distributions and operational processes.
While these initiatives are still in the early stages, we are encouraged to see the first sign of tangible outcomes emerging from quarter four onwards. Despite a challenging operating environment during the quarter we delivered a strong performance with revenues growing by 18%. YoY lead by nearly 16%. Volume growth during quarter four. EBITDA margin states steady at nearly 27% which was in the over range guidance or for FY26. This revenue performance for quarter four is our highest ever quarterly performance in our history.
These numbers reinforce our belief that the strategic directions we have undertaken is beginning to translate into stronger executions and market tractions. During the quarter, we also undertook one of the largest brand building initiatives in our company’s history. Leveraging our association with Panka Tripathi and as part of our national footprint expansion strategy, we partnered with JioHortStar during the ICC T20 World cup to execute a high impact ETL campaign. The objective was clear to significantly enhance brand visibility, strengthen top of the mind recall and positions our brand among the fastest growing wood adhesives brand in India.
We believe this investment in brand equity will create long term benefits as we expand into our newer markets. And customer segments. What makes this performance even more encouraging is that it came despite multiple external headwinds including an extended monsoon season in actual and disruptions arising from the West Asia conflict in quarter four, which was during one of the most critical business periods of the year. The resilience of our channel partners, employees and the combined executions capabilities helped us navigate these challenges effectively and maintain our growth momentum.
Looking ahead, we remain highly optimistic about the India growth story and the long term opportunities within the food adhesives industry. We are working aggressively to deepen our presence in existing markets while simultaneously expanding into new geographies. As part of this strategy, we are commencing operations and strengthening our footprint in new markets of Odisha and Chattisgarh during May 26 itself. At the same time, we continue to consciously strengthen our presence in the OEM segment.
Our initial efforts across west and Central India have delivered promising results giving us confidence to further scale this business Going forward. We plan to expand into additional major metro markets with a focused OEM distribution strategy aimed at gaining meaningful market share in the category. Overall, we believe the company is entering a new phase of growth driven by stronger branding, wider distribution reach, improving organizational capabilities and deeper market penetration. While we remain mindful of macroeconomic uncertainties, we are confident that the momentum built in quarter four will continue.
As we progress on our journey towards becoming a 500 crores plus revenue company over the next 23 years, we are now open to taking the questions.
Unidentified Speaker
Thank you sir. All those who wish to ask a question may use the option of raise hand. We’ll invite you to ask the question. We would request participants to restrict the questions to two in the first round so everybody can get a chance to ask questions. So till the question queue assembles, we’ll take a question that has come in the chat from one of the participants, Mr. Arjun Shah. How do you define active carpenters on your platform? Firstly and where do you see this number going in the coming future with the new states that are entering, is the number seeing any traction?
Is it increasing or is there some level of churning where carpenters become inactive after a while? Do you see that happening a lot in new states?
Questions and Answers:
Utkarsh Patel
Yeah. So in this 1920 years of journey we have just almost 3 like 50000 carpenters in this journey and from that when we started this digital platform in 2018 around so till now we have registered almost 2 lakh carpenters into our platform. So from that almost 60% are carpenters very much active. So who are using regular our products and making these loyalty points. So now into the future Nearer expansion for this loyalty program is that we are aiming for more almost 25 to 50000 carpenters to onboard and engage with our loyalty program.
As we are now penetrating and going deeper more into the newer states up Delhi, West Bengal like and also now we are adding the Odisha in Chhattisgarh. So new registrations will come into the pipeline. So we are expecting 2 like 50000 carpenters end of the year we can say
Unidentified Participant
So his second part of that question is do you have a target number in mind for the next two to three years?
Utkarsh Patel
So we are aiming that at least 3 lakh carpenters should be registered. As we have gone detail through the through the data and we are have the assumptions about the per shop carpenters or that data we have. So we are aiming 3 lakh carpenters nearer future.
Unidentified Participant
His second question is the receivables this year have gone up in line with the revenue. Would that imply that days of sale outstanding in the new states is a lot higher and would that also mean that receivables increasing in states where we already have an established business. Why is this happening and where do we see this number normalizing?
Utkarsh Patel
Yeah. So yes you’re right that the number has gone up last two, three quarters. But we are aiming for that nearly what was we were into the 24, 25 that was 120 rounds. So we are aiming that within two quarters will come with that. And the reason is yes we can say that newer state when we are starting that we need to build the more relationship and more engagement with the new dealers. So it is taking time and maybe some few more days going with the data sides. So in an existing state also we have been last 2/4 aggressive into the sales front.
But these all sales are very much secure as we are dealing with these dealers since so many years. So that will that can be maintained within two quarters.
Unidentified Participant
Sure. We’ll go to the participants who raise their hands.
Unidentified Participant
We’ll take the first question from Saket Kapoor. Saket, you can go ahead please.
Saket Kapoor
Hope I’m audible.
Utkarsh Patel
Yes, you are all.
Saket Kapoor
Yeah. Thank you for firstly for the opportunity sir. Firstly for the current year volume guidance with the type of capacity addition that you have outlined in your presentation. If you could just give the ballpark number. What are we eyeing sir? For the current year.
Utkarsh Patel
Yeah see I. I suggest that we have internally as a board decided that we don’t give the specific numbers as the geopolitical the issues are running also see if we go about the last 8 quarters so almost from 8 quarters, 5 quarters we have delivered almost 2 figure of growth and if we talk about the FY25 we grew by 11 if I 26 we grew by 8%. So 19% growth. So yes we are expecting that we should aim for the 15 20% but I think it is better that this quarter is very much not the suitable time that we can disclose.
I think because of the situation getting the normal quarter two is the things where we can go for the nine months growth for the exact figure. So but, but we can expect about the. Obviously we are aiming for the 15 20% of growth for that
Saket Kapoor
Actually slide number 15 number page therein you did gave us some understanding of how the period between FY27 to 29 looks. Whether in terms of the brownfield as well as the Greenfield capex that we are contemplating going ahead. So only factoring that into what what will the numbers translate into or the growth numbers translated to to was my my question. So if you could when you are giving us an understanding about the brownfield expansion which will be live before quarter two and the green field capex also.
So articulating those two what should be that attitude match between 19 20%. Sir.
Utkarsh Patel
Yes. See I can explain you how this business model is. Right now we are operating about 65% of our capacity. So basically it’s a 2000 ton capacity per month. And we have done almost 80% of brownfield expansions. And now within one or two quarter it will be finished and then the capacity will goes to the 3,500 tons per month. So it is now the plant will be the capable to generate the almost 600650 crores of revenue from that. So we are aiming for that to reach within this 23 years of 500 crores of revenue.
So we are targeting about that if we achieve 15 20% of growth from here. So that is a achievable number. And and the thing is in this business model the four quarters jumps very high into the volume. So we want to be advanced with the capacity building because few months are as an example if we talk about the march we across across more than 2100 tons per month. So these are the months where where the volumes go high. So we want to be very much prepared in advance so we don’t lose any market shares.
So this is how the guidance is that
Saket Kapoor
Okay. Yeah.
Utkarsh Patel
Yes, please go.
Saket Kapoor
Yes sir. A small point in in terms of the RM part sir if you could just explain to us how the RM have behaved in terms of the crude oil and the geopolitical issues. And. And how have we trending for the month of April and May in terms of the business setup and the business environment. And one financial question was sir, when we look at our current liability part it is to the tune of 95 crore. So that is the. The carpenter bonus discount account that. That we are maintaining. So the net cash balance should be less of this number.
Utkarsh Patel
Yeah. So in. In RM part. See vinyl acetate monomer van is the key raw material of our product. And yes of course it is a.
Saket Kapoor
So not getting your voice. Hello.
Utkarsh Patel
Yeah, I’m audible now. Yeah. So the. The RM part, the VM VAM VAM is the key role model of ours. So it is crude derivatives. So yes it is affected because of these situations. And I believe that if the situations get normal as a world level then it can. It can be come within the line within three months around. But it is very much early to say that because there is the situation is not stable right now. But we have taken the price rise and almost 70% price rise given the effect from the 1st of May.
So maybe to give the support to the company regarding this
Saket Kapoor
70% you mentioned. Sir, I miss your number.
Utkarsh Patel
Almost 60. 70% price rise we have taken. Okay. But from the first of May. So not every month from the first month.
Unidentified Participant
We’ll go to the next participant. Vidish Asha, you can go ahead please.
Unidentified Participant
So firstly congratulations on achieving great sales growth in this quarter. Really commendable and best wishes for continued growth. So I have two questions. Firstly in terms of sales growth what percentage has come from price hikes and how much is the volume growth? And also of the incremental sales versus last quarter how much from existing stronghold states such as Gujarat and Maharashtra and how much from developing states like you mentioned up etc.
Utkarsh Patel
So we grew by 8% means a volume front and there is not much difference versus that because as the price rises just got affected since last month. So last year was the same price what actually were at the time. So 8% is the volume growth for the entire year.
Unidentified Participant
The next participant, Pawan Kumar. Pawan, you can go ahead please.
Pawan Kumar
Sir, I wanted to understand what. What will be the advertising expenses that we are planning for. For FY27. I. I guess we have spent around 53, 54 crores this year. Would it be as a portion of the revenues or would it be in. I mean are we assuming some growth or expecting this to be constant?
Utkarsh Patel
Okay. So for the advertising and trending marketing actually we spend 4% of our revenue right now. So it is not 50 crore. 54 crores. Because it is. I think maybe you are saying with the all the sales, promotions, offers and what the loyalty programs are there. So if we talk about the trade marketing and brand communications we have invested 4% and we are aiming to take this at least 6 to 7% for coming years.
Pawan Kumar
This 6 to 7% will take it in how many years?
Utkarsh Patel
This from this year. 6 to 7% from this year. And I think we’ll continue this at least three years from now. After that will
Pawan Kumar
Be spent this on exactly in the sense.
Utkarsh Patel
Sorry,
Pawan Kumar
6 to any incremental money.
Utkarsh Patel
Can you repeat the question please?
Pawan Kumar
Where will we spend spend this incremental money of the 3% incremental that we are planning to do.
Utkarsh Patel
So see mainly we are into the trade business. So will depends upon our influencers more and they are the very much important part of that this journey. So we’ll invest almost 70 80% of total budget to the trade marketing and 20 25% for the brand communications. So these all are the increased of this percentage will go to the more carpenters to engage the more carpenters into the loyalty programs to make the more awareness of the product visibility of the products into the shops also in shop branding also.
So it will be the mix strategies to invest this fund into the promotion of the brand.
Pawan Kumar
Okay. And given we are Talking about sustainable 65% gross margins, what is the kind of EBITDA margin band which would be sustainable given the current scenario?
Utkarsh Patel
So 23, 25% EBITDA margin we have always guided for the longer term.
Pawan Kumar
So
Utkarsh Patel
We are aiming to sustain that. And yes of course we are aiming for the gross margin 65% for that. But in this situation this quarter may be affect our gross margin because of the sudden price increase into the vam. So I think maybe this will impact all the industries who can concern about this raw material prices.
Pawan Kumar
Okay. And one last question. Have there been any price hikes taken by our bigger peers as of now for this
Utkarsh Patel
In April they have started and 4 to 5% price rise started to taken. And from the first May it is almost 10% has taken. So it will. I think it will effect from the 15th of May we can say mid of the quarter this the 70 effect will come into the price rise.
Unidentified Participant
Yeah, thank you. We’ll take a follow up from Videsh. He had gone on mute by mistake. You can go ahead.
Unidentified Participant
So sir, thank you for answering that there was 8% volume growth in terms of sales growth. 8% of volume growth. Also sir wanted to know in terms of the statewise sales. Our main stronghold states are Gujarat and Maharashtra. Just wanted to know how much percentage of our revenue this quarter came from new states. And
Utkarsh Patel
Cannot disclose the detail of the statewise volume growth because of the some restrictions. But you can mail us and our IR team can help into that. Okay.
Unidentified Participant
I hope you understand.
Utkarsh Patel
Yes,
Unidentified Participant
Yes. Yes sir. So one more thing was the. So the receivables have gone up from 125 to 160 crores. Which makes our receivable days four and a half to five months. So what was the so as you stated the reason was because of the new states. And you know you to give some time. So when do we. What is our plan in the medium term to improve the working capital cycle with the new states.
Utkarsh Patel
Yeah. So actually it is a two to three years of cycle in newer states as we are into B2C business model. So it takes two to three years to at least get the all the engagement to the carpenters influencers. Very much visibility of the product. The confidence of the product to make the relationship with the dealers carpenters. So it is an entire process and there is. It’s a. It’s a part of making them comfortable and doing the ease of business with us the policies at that level so we can get the more market share.
So this is. This is the always the strategy of euro since last 1890 years and now we have. We have very much experience that if you. If you see about the. All the balances we have not above 1% of the backdabs. So it is very much controlled and it is all about the relationship with the dealers and the carpenters. So these are the strategies that we are moving into the newer states. But we should aim for at least after two years that state should be very much stable and we can at least maintain 120 days of data cycle.
So we are aiming for that. That within these two quarters we can control that.
Unidentified Participant
Thank you sir. We’ll take the next question from Venkatesh. Venkatesh, you can go ahead please.
Unidentified Participant
Thank you. Thanks for giving me opportunity. My question is about. Last participant asked me ask the same question. It is more about the receivables. So if you can give me little more clarity on receivables because from last four quarters it kept on increasing. Of course you answered it a little more brief on the receivables.
Utkarsh Patel
Sure. So see we have differentiate ourselves since 2013. Earlier euro was with the typical distributor model that we make the channel partner distributor and the secondary payment is the responsibility of the Distributor after that we have moved to the stockist level. So we have created 54 branches across these 14 states. So these are the inventory transfer to these 54 branches. And from that we supply to the retailers. So that sales come to the companies in revenue. When the sales come, sells goes from the branches.
So it is directly to the retailer. So our debaters what 150crores are there that are very much spreaded to the 12,000 across retailers. So if we go about the overdue amounts so it is the not above the 1 or 2 lakhs per dealer. We have mentioned that into our this investor presentations also that that can give you the more clarity how this model works. So it is very very much sprayed. So that that is not we cannot risk the fund. And that’s why the reason that we are able to grow that much. So this is our strength.
So I have never guided that about this can be the cycle below 120 days. But if we are aiming that if it is maintained 110 days, 120 days then company has the enough strength of the cash flow also. And whatever the fund we are needed for the green field or any expansions that can easily achievable by the internal accruals. So this is how this model is. So yes of course it is 150 days. 160 days is a little bit higher. But we can control. And if we go about the past. If you see about the 21, 22, 23 we have controlled that within 118 days around.
So within this next two, three quarters will control this.
Unidentified Participant
Can we take it in this way in the sense, you know, going forward you will be able to maintain between 1 and 2 lakhs for each dealer. And you will bring down the inventory or in cash flow level to 120 days. That’s what you mean to say?
Utkarsh Patel
No, no, no, no. See overdue payments. So if we talk about the 150 days, 140 days about that are the very much overdue payments. So if we go into the detail of the dealer. So it is not much than 1 or 2 lakhs per dealer. So it is not that much risk about the company. And we can maintain that with with making the good follow up good relationship with the dealers with the understanding of the of the markets also. So it is controllable. And in past if we see about that company has controlled that Data is within 1, 1, 5 or 120 days.
So it is doable. But we were into the growth journey last eight quarters. So because of the expansions of the market, this much has gone high. But it can be controllable within two or three quarters from you.
Unidentified Participant
Thank you. Thank you. Thank you. All the best.
Utkarsh Patel
Thank you.
Unidentified Participant
We’ll take the next question from Mark Singhvi. You can go ahead please. Ma’. Am.
Mahek Sanghvi
Yeah. Can you hear me? Hello.
Utkarsh Patel
Yes, you are audible?
Mahek Sanghvi
Yeah. I wanted to ask about how. How much inventory of wham do you have right now for how many months?
Utkarsh Patel
So we are running with the inventory of 25 to 30 days.
Mahek Sanghvi
Okay. But you. But do you expect the rice price to rise further, right?
Utkarsh Patel
It is already rise and not more price from here because it is almost 100% price. If we talk about the VAM, it was earlier 80 rupees, 75 rupees around. Right now it is running 160, 180 rupees around.
Mahek Sanghvi
Okay. Okay. And second thing is we are going to target OEM distribution. So we were not doing this earlier.
Utkarsh Patel
No, it is not that. So we have started this OEM business since 2020 around. So right now of our revenue, 6% revenue is coming from the OEMs. But as OEMs for the metro mega cities now OEMs are doing very good into the growing phase. So we also take the leverage of that. And the same wide glue are using. We have the four product categories into that and we are targeting also and now onboarding more talent to grow this segment. So we are assuming that after two, three years our revenue will be 85% into the.
Into the retail and 15% around into the OEMs.
Unidentified Participant
Okay. Okay. Okay. Thank you.
Unidentified Participant
Thank you sir. We’ll take the next question from. You can go ahead please.
Unidentified Participant
Good morning, sir. Thank you for giving me this opportunity. Sir. As we have seen that you have a FD of 140 crores. Since it’s a long time that you are sustaining with this fda, why don’t you invest your money in good mutual funds or stocks or why don’t you buy back your stocks even. And other part, why don’t you give a dividend payout ratio giving more dividend to your investors. If you have such a huge amount of money in your FDs, that is giving you a very low margins, very low interest rates.
Thank you.
Utkarsh Patel
It’s a very good question. Yeah. So if you see last six years we have given 15% of our pad to the stakeholders as per the dividend. And that is very much maintained. One thing is that see this FD is about the also the one liability. 1995 crores liability is there. So it Is there. But so the internal accruals this fund we will need from the growth. So as we are now moving to that journey that as a Euro now we are the almost reaching the second largest player. And there is a huge gap between the industry’s dominant player and Euro.
So now we are moving towards that. So we need this fund to utilize into the market expansions in greenfield expansions also. So see we have started about that. If you see about the the investment into the advertising, branding and trade marketing what we have done. So last year that was 1.5 around. This year this is 4% around. And now we are moving into the 6 to 7% around. And we will continue this 6 to 7 or maybe 8% around next three, four years to grow and capture the more market share. So right now the companies needed this fund and the competitions will be very much tougher in coming years as we will cross about 500 crore of top line.
So this is not the time to diversify this fund and. But we can have the regular meetings with the board also. And we are also working jointly closely for these strategies. But right now it is not into the plan
Unidentified Participant
Further to add to this, if you see the latest balance sheet we have deployed money into liquid funds to the tune of 46.8 crores.
Unidentified Participant
We’ll take the next question from Dixit Doshi. Dixit, you can go ahead please.
Unidentified Participant
Yeah. Thanks for the opportunity. Can you hear me?
Utkarsh Patel
Yes. You’re
Unidentified Participant
Ready?
Unidentified Participant
Yeah. Thank you for the opportunity. Firstly just a clarification. You. You mentioned 15 to 20% growth. So this kind of growth we are targeting a volume growth or the overall company level growth.
Utkarsh Patel
See volume growth, the growth should be always by the volume. And if we talk about the last year it is not much difference. 8, 8% was the volume growth and 11% was the revenue growth. So we are targeting that at least 20% of volume growth we can achieve to achieve over 500 crore of benchmark.
Unidentified Participant
Okay. And when we assumes or target say 15, 20% volume growth our established states, let’s say Gujarat, Maharashtra, those states will grow at what high single digit. And the additional growth will be from new state. Is this the fair assumption?
Utkarsh Patel
It is a fair assumptions. But still if we talk about our five mature states still there is a very much opportunity line. If you talk about the Karnataka, if you talk about the Maharashtra. So yes we can say that that growth can also contribute. But it will be parallel in newer states also. So all to put together efforts will be done as going more deeper into the states And Also wider to the States.
Unidentified Participant
Okay. And lastly you mentioned a 60 to 70% price rise we are taking from the 15th of May.
Utkarsh Patel
Right?
Unidentified Participant
Okay. Okay. That’s it from my side. Thank you
Unidentified Participant
Sir. We’ll take the follow up question from Saket Kapoor. Saket, you can go please.
Saket Kapoor
As a percentage of the the revenue which you book what is our RM contribution and. And what is the contribution from when
Utkarsh Patel
It is almost 90% of. Well
Saket Kapoor
Okay. So sir if it. If we extrapolate that then the revenue for the current year would be. Money would be rising in. In terms of the price hike that we have taken. And how should we factor in the the revenue number for the current year? If we are increasing the prices by 60 70% that that would translate into 60 70% growth in the revenue or I’m missing something, sir.
Utkarsh Patel
No, so it is. See it is too early to say because just from the first April the price rise has started and now after the 15th of May it will be again the second price rise and the. The situation is not now stable. So we have not of correct assumption about that the van prices will be stable for the next 12 months or three months or five months or we don’t know about that. So it is too early to say that what will be the. The revenue impact into the the gross persons rate. But right now I think we should focus for the volume growth as the situation is not normal right now.
So it
Unidentified Participant
Is too
Utkarsh Patel
Early to say with this quarter. I think in a quarter two we’ll get the more clarity about the consistency of the RM prices
Saket Kapoor
And say will this lead to demand destruction also or what is the filler we are getting from the on the demand side of the story when when we look our product as which goes into the furniture segment total sir cost. If somebody takes it and undertakes an activity. So how. How can you just give us some color on the same. Because that is these are phenomenal rise and need to be absorbed otherwise that could lead to demand destruction or what is your take on this?
Utkarsh Patel
Sure. So it is almost 5 to 10%. So if we talk about. If the furniture cost is total 10 lakh rupees then 50000 to 1 lakh rupees this is used into that. So it is 5 to 10%. And see it is about the. Yes it is impacted as the situations. The. The gas cylinder situation was not normalized last two months. So the. The always the labor thing about the migrate to the their natives. So mostly the carpenters are from the Rajasthan and up. So we are seeing that little traction into that they are migrating into the.
There’s particular states because of the LPG issues and everything. But it has not much impacted as the quarter four the volume was good. So I hope that within this 23 months the situation will get normalized.
Saket Kapoor
Okay so only to conclude so as of now offtake.
Utkarsh Patel
See I, I I I believe that there is a huge expansions into the current cities Metro megas. The governments are now moving towards the India growth story. So in a longer term it is not much. Yeah so it will. It will maybe affect one or two months not more than that I think.
Unidentified Participant
Thank you sir. We’ll take the next question from Bhavani Mishra. You can go ahead please. Sir. We’ll move on to Harsh. You can go at least.
Samit Shah
Hello.
Unidentified Participant
Yes, you’re audible.
Samit Shah
Yeah yeah yeah. Hi good morning. So I have a question. You mentioned key in a Metroid markets we are growing around in a high single digit. But recently I did a channel check visit to almost the clusters of Carpenter Lab Wood market in Mumbai. But where I observed like we still have outlets out of three out of one store. We have so like
Unidentified Participant
Despite being
Samit Shah
A Metroid market why there is a such a low penetration in store. And I’m not talking about small stores, I’m talking big stores and being a mature market our product is not went to almost all the stores. And so I’m not understanding like why are we moving to new state. Because we are still. I believe we are still under penetrated.
Utkarsh Patel
Yeah you are very right that because it’s the ocean of that. So that’s why we have that opportunity and that’s why we are aiming for that. It’s a more than 7,500 crores of market in we have reached almost 300.
Unidentified Participant
There is a background voice coming from your mic.
Samit Shah
Is it? Is it correct now?
Utkarsh Patel
Yes please. Yeah
Unidentified Participant
Yeah yeah.
Samit Shah
So yeah so yeah
Utkarsh Patel
So so the these are the opportunities lies into the market. And you are very right that it is a. We can say that out of three or four counters we are presence into one counters. That’s why we are into the 20% of of market share into the Maharashtra. So it is to. It is long miles to go from here and that’s why the growth will become from the existing states also and the newer states also. So that’s why we have decided that we’ll state this 14 states plus two states we are adding and we are going much more deeper.
So we have not started Chennai yet. We have not started Kerala yet and not Jammu Kashmir yet. So that These are the reasons that now we want to go go more deeper into that. And this is the opportunity actually into the market. So we it is the doable growth that if we aiming for the 1200 crores of revenue it is doable.
Samit Shah
So my reason reason to ask this question was because why to go like it’s obviously it is very good to go in new states. But where we have already built a relationship with the dealers. The carpenters knows our brand which I came to know at least from Mumbai market. It is much easier to penetrate in multiple stores like first. And we can be more aggressive by while this like currently we are going in high single digit. By doing more aggressive in matured markets we can grow double digit. That shows my question.
Utkarsh Patel
So but see in a channel check it is a very very deep, deep subject is there. And if we talk about the Mumbai then we are the first company in within this 70 years of journey who has achieved this number. I cannot disclose the exact number of the volume into the Maharashtra. But these are the things happen. And that’s why that revenue we have generated of 100 crores of revenue into the quarter four. So we are going much deeper. And this quarter four is a result that it is doable. And if we see about the quarter four number it is exponentially as compared to quarter three.
Right. More than 30% growth is there. So these are the reasons. So yes, of course we are going much deeper. And you are very right. That should be the strategy. But our strategy is into that. And that is the reason that we are able to maintain it is a debt free with this. Maintain this 27% of EBITDA. Because if there is a no repeat customer, there is no any business can make the profit. So we always believe into the repeat business and more deeper, more volume. So we are into that. And yes of course we will not go about that only focusing on the wider the strength.
But we are on to the deep going deeper more.
Unidentified Participant
Thank you sir. We’ll take the next question from Bhavani. Mishra. Bhavani, you can go ahead please. Bhavani, you there sir, we’ll move on to Jayatriva. Jay, you can go ahead please.
Unidentified Participant
Hello. Am I audible?
Unidentified Participant
Yes.
Unidentified Participant
Yeah. Thanks for the opportunity. My question is while it is good that we are getting into new states and we are expanding my question comes very much inbound. Where there are players like Jeevan Joe who are setting up capacities in Gujarat. Do we see it as a competitive threat or how are we assessing it? What is your take on that? That is My first question,
Utkarsh Patel
Jay, I suggest you to be focus of our questions only cannot talk about the competitions. If you have any, you can please mail us. We can definitely answer for that. But in general, yes we can say that we are very much aware about this. And as we are into 30, 35% presence. And though we are very much old brand since 20 years. Gujarat is very much strong base of ours. So we have the very good relationship with the dealers, with the carpenters, very good strong network. And competition was earlier.
It is not that today. Now there is a competitions that was from the first day. But though we have understand the market and we have created our niche. So we are very much confident that we’ll figure out the way and grow from here.
Unidentified Participant
Definitely. Definitely sir. I totally get your point. Also wanted to understand while we are very much strong in the wood as I says the white clue adhesive speech. Are there any adjacencies when we have multiple product offerings? The mobilization of product is faster if it the dealers or Euro standalone wood adhesives is enough for a dealer to give away other products like do these products sell in a basket? Or it is a one on one conversation. Just wanted to understand that.
Utkarsh Patel
Sure. So the question, the answer of this question is if there was a problem for that then it was not possible that we are gaining getting this 35% of market share in Gujarat. So it means that it is not required and we have focused and that is our strength. And this is a market of 8000 crores of market by India. So it is a long journey to go and we want to be focused. We want to be stay with the single product at least thousand crore of journey. And after that maybe we can think about the adding the new products for that.
Unidentified Participant
Definitely. Definitely. Those were my questions. Sir, thank you so much. All the best.
Utkarsh Patel
Thank you
Unidentified Participant
Sir. We’ll take the next question from Amish Kanani. Amish, you can go ahead please.
Unidentified Participant
Sir, congrats on a good number in Q4. So one quick question was. I was wondering if the offtake of Q4 was seasonally higher as you know even dealer would at our tomatile vam is crudely. Maybe they were anticipating in the price and hence they have probably taken more than required. So if you can give us some sense of, you know and a comfort whether the retail demand also was as Strong as say 15% plus if you can give us some flavor there or is there an inventory at deliverable which you know, if carpenters are not on the ground in Q1, my fear is maybe our number May not be, I’m not worried about quarterly sir, I understand and I’m more interested in the annual trend.
But just if you can give us some flavor of how these things are on the ground and that is one and so second in that extending the same question. So this year if you are aiming for 15 and you know you have also partly explained that overall a price rise itself is 15 maybe we are, we are not looking at a very high growth on a volume terms. I, I understand you are saying you have an aspiration to at least grow 10% plus on volume term also. But I understand you’re saying as of now we are not clear. Maybe by second quarter the situation will be clear and you, you may be able to answer us say in the second quarter call, you know what is the situation.
So that is I understand question is sir, this year we are assuming say ballpark 15 growth to reach a 500 crore turnover. Sir, for the next two years at least we should be able to grow at 20 sir, 18 to 20. So sir, are we you know how confident are we that you know we should be you know more in a band of say 15 to 20 than say a band of 10 to 15%. Thanks.
Utkarsh Patel
Sure. So thank you Amish and very much understanding of industry you have. And a very good question you ask about that. What about the tertiary because as we have now pushed the material to the markets quarter four and now we should focus more into the carpenter segments level to offtake the material. So I think Samit sir is the person who can give you the very good answer of that. Can you add this?
Unidentified Participant
So Amish, great good question first of all. So see I’ll tell you about the Q4 basically if you see the business dynamics. So Q4 has always been a heavy quarter in the business overall. Right. So that is where so it is not because of the fear of price rise in all, all they have stock the material and all. So that’s what the the first answer. And, and just to add in what Utkashar said that yes we are focus going forward is more on a tertiary. So we are completely moving our entire focus towards demand generation and entire transformation journey is slated towards in this direction only.
So we are very much confident that this, this, this is what we can continue going forward.
Utkarsh Patel
So that’s why we are investing more into the carpenters trade marketing.
Unidentified Participant
So we have increased the budget also if you see our marketing budget is majorly skewed towards trade marketing which is trade is our basically carpenters and dealers community basically. So that is where we are going very stronger and deeper to penetrate and gain more market share by these actions. Basically.
Utkarsh Patel
And about your second questions here. You are very right that if you want to achieve this 500 crore rupees then definitely we’ll need to focus focus for the 18 20% of growth. And you are concerned about that. That the. About the. What the situation is going on and the. The demand will be same or not. But as I explained that there is not much difference into the. The down level. The all the constructions are into the pipeline. All the real sectors are now into the streamline. So it is there. The carpenters are available into the market.
And that’s why the reason that our redemptions are very high. We are getting the good response into our. The loyalty programs. So there is no worry about our brand is the. Because of that we are now, right now we are a smaller part of the total industry. So it is a. It is a huge gap and huge opportunity lying about that. So it will not impact because we. We need to take the market share from the existing market. So. So that’s why this is a doable number. And that’s why if you talk about. I explained that in the last eight quarters, the five quarters we can able to achieve this growth if it.
If we see about the last two quarters. If we talk about the quarter two it is a 20% of growth. If we talk about the quarter four it is a 16 growth. So it means that it is doable just we need to maintain that every quarter and that deep focus and hard work we need to do about that. And all we all are the team as we are very much sincere and very much going deeper to achieve this number.
Unidentified Participant
Yes. And just to add in what sir said that because of this only like we are confident that we can drive this number. There is a huge scope and as a part of our transformation journey we have been. We are very conscious about what you are saying basically. So that is why our work right now transformation journey is going on towards both deeper and wider reach for the euro as a brand and all products also. So that is where we want to have multi fold drive in existing markets as well as going for a few select a few new markets also to start our presentation our presence basically in those markets basically.
So that’s where combined efforts we’ll put together will lead us to. To the required growth numbers we are driving.
Unidentified Participant
We’ll take the next follow up question from Mahak Singh. You can go ahead please.
Mahek Sanghvi
Yeah. I wanted to ask how was April because you are you Know hiking prices from May. So dealers must have brought in quantities, right?
Utkarsh Patel
Yes. So yeah, but April was good. And April we can say about that because of the price rise is going to in the May. So dealers house get that trying to get that benefits and that opportunity. So April was good into the volume wise.
Mahek Sanghvi
Like are you not going to give me a number?
Utkarsh Patel
It is not possible. Sorry. Of course
Unidentified Participant
Not.
Utkarsh Patel
But we can. You can contact our IR for anything else.
Mahek Sanghvi
Okay. And have we thought about backward integration in raw material production?
Utkarsh Patel
So economics of that? Yeah, see I explained about that VAM is the key raw material and at it is not manufactured in India. The material is totally imported. And very huge giant companies are into that. And so that’s why it is not workable for the backward integrations.
Mahek Sanghvi
Not workable at all.
Utkarsh Patel
Right now this volume is not suitable for that.
Mahek Sanghvi
Okay. And any R D spend on new products in white glue right now are we doing anything new?
Utkarsh Patel
So if we see if we saw about the history of the euro last 15 years. So every two years we have added new products. So right now what products we have into our basket. So that is the complete the applications wise all the needs by the furniture gluing industry. So if we talk about. We have the different elements of the waterproof. We have the fast drying. We have the high coverage, high grab adhesives. We have the OEMs 4, 4 product range into the OEMs also we have the cheaper grill also. So everything is covered.
We have the PVC glue which are covered. The acrylic and PVC sheets to the MDF and plywood. So entire range are covered right now. So there is no any spending into the R D. But we hired the technologies when it is needed. So right now we are at least at that level that we have covered all the products to gluing industries for the furniture.
Unidentified Participant
Take the next question from. You can go ahead please.
Unidentified Participant
Oh, am I audible?
Unidentified Participant
Yes, yes,
Pawan Kumar
Yes.
Unidentified Participant
Just a follow up question. So you talked about the current liabilities coming from the reward program. So when these numbers the when the carpenters start redeeming their amounts so our EBITDA margins would go down. So can you tell me when will this EBITDA margins be normalized to 20 to 25%.
Utkarsh Patel
So see it. It is not much impacted if you see about the last year. So it is all only 4,4 crore rupees of difference between the provisions and the the redemptions. So it is hardly 1.25% only. So it will not impact and it is running on in a smooth way. So we are expecting the same for the next coming quarters.
Unidentified Participant
We will take the next question from Vidish. You can go ahead please.
Unidentified Participant
So. So the past few years the we’ve been in the 250 to 300 crore revenue range and even our profit after tax has been in a similar range. So do you think so the next 12 years we could see a solid growth coming. And also will we be able to maintain our capital allocation strategies? What I mean to say is will we be able to see sustained ROE and ROCs in the next two to three years?
Utkarsh Patel
Yeah. So yes we are into that and as I explained that 20 to 25% diesel long term EBITDA margins what what we want to sustain. And if we see about the last three years it is very much into the line. And if we grow by the 15 20% margin volume growth then the margin will be stable and it will be the overalls also will be the control. So it is not about that within this two, three years what you are saying that the exact number we can disclose about that.
Unidentified Participant
Take the next question from harsh orders here please.
Samit Shah
Hello. Yeah. So on the price Excel like before the 60 to 70 price hike how much like on an average how much our product portfolio would be compared to our the market leader Basically in terms of pricing and post this pricing price how much premium would be charging versus the market leader.
Utkarsh Patel
Can you repeat the question the first question.
Samit Shah
So so basically my question is we like before the price hikes of 60 to 70% how much are portfolio pricing was like cheaper than the market leader like and now after the pricing price hikes how much premium would be charging to versus a market leader?
Utkarsh Patel
See it is almost we are at par with the industry and the market leader. But if we see about the lending cost then Euro is always a good attractive as compared to that that industry. So we are more into the doing the sales promotion discount to the dealers and the retailers. So it is that. So if we. If you talk about the market price that is almost similar to that at Para for that. Yeah. So this
Samit Shah
Is the. This is the post price hikes like the pricing would be almost part to the market
Utkarsh Patel
Both. So if we talk about the earlier also and it is for the post also for that because same we have seen the taken the price rise also. Yes, got
Samit Shah
It, got it. And this is one more thing on the branding communication which you mentioned like now we started going in south as well like you mentioned in future we are looking to go in Chennai Kerala the market. So do you think the current Brand ambassador we have. He’s very famous in the like. Nowadays people prefer a regional base than a national face especially in south. So do you think like we. We would need like a branding would need North a different brand ambassador and south we will be adding one more brand ambassador or this is a wrong thing which I’m in the way.
I’m thinking.
Utkarsh Patel
No, no it is not a wrong thing. And Hershey it is a very good questions and suggestions you have had. So yes of course this is in our mind but right now as we are more into the central and western part. So it’s a Bollywood community and Pankatri party is very much famous into that also the one main thing is what our influencers are belong to. The carpenters are from the 90 are from the Rajasthan and up. So they are very much with this existing brand ambassador. So that’s why we have chose them. But definitely south is a different part of that.
And if you talk about the Tamil Nadu, if you talk about the Andhra it is a different part. So when we’ll go more penetrated and to go the more generate the volumes we need to think about that also. So we are very much aware about that and it’s a very good suggestion. So viewers.
Unidentified Participant
Yeah and right now we are basically into. There is a huge way to cover in HSMS basically in this speaking field, in the speaking markets basically. So we are very conscious about as MD sir said that about the language markets. And so accordingly right now as he rightly mentioned that most of our community basically carpenters and all they belong to Rajasthan and up. And if you go to even down south also you’ll. You’ll find that you know most of this carpenters community are coming from this state.
So they are very well aware about the Hindi and all. And that is where we chose as a unanimous choice as an party at this moment we may look at you know, local face. Maybe it’s a. It’s a long shot. Basically as of now I think this is a. This is what we will. We are going to continue.
Unidentified Participant
Okay sir, we’ll take the next question from Barun Varun. You can go ahead please.
Unidentified Participant
Hi, just wanted to understand are we thinking about going into general purpose adhesives at any point in the 8 gram to 200 gram packaging space? Because will you have to tweak the formula too much to get into this space or it’s something we’re not considering at all?
Utkarsh Patel
No, we are not considering at all because it’s a different segment and it’s a total different distributions and network it is more into the. You know stationaries and pawn shops and everything. So it’s a different distributions. Our expertise is more into the furnitures to the carpenters work as a gluing solutions through a furniture. So this is a the market what is 8,000 crores above. So we need to stick around about that.
Unidentified Participant
We’ll take the next question from Mark Singh. Mark, you can go ahead please.
Mahek Sanghvi
I wanted to ask that. We have done only 60 to 70% hike in product. 100% is the rise in raw material and 6 to 7% we are going to spend on advertising and only 15 to 20% volume. Good. So are we expecting any what we call operating margin reduction this year?
Utkarsh Patel
It is too early to say for the entire year. But yes of course it will affect on the quarter one. And I believe that all the chemical industries, pharma industries will get this effect into the quarter one regarding the EBITDA. Because as only I think B2C industry of course the. The. The price rise not pass from the second day. But B2B industry may be will less bleed. But B2C model will bleed. But we cannot predict about the next three quarters because it is about the geopolitical situations. But I think it will be controlled within two months.
Then maybe from the next three quarters. We are not much affected as we have taken the price rise. But I think we are expecting that maybe very near soon there will be a again price rise. We we need to take to cover the difference.
Mahek Sanghvi
And what else can we do to protect the margins? Anything else?
Utkarsh Patel
Unfortunately it is uncontrollable for. For each and everyone’s right now it is facing the situation. So I think quarter one will be the same situation over all the industries right now.
Unidentified Participant
Okay. Okay. Thank you so much
Unidentified Participant
Sir. We’ll take the last follow up question from Varun Datta. Varun, you can go ahead please. You there.
Unidentified Participant
Think he’s finished his question. We’ll take one last question in the chat from one of the participants. What is our plans to list on the nsc?
Utkarsh Patel
It is in process. We have. We are into the process and very near maybe it will listed on the nsc. So we are into that process.
Unidentified Participant
The last question for the day. Would you like to make any closing comment before we end the call?
Utkarsh Patel
So thank you very much for trusting our brand testing our management. So yes we are on a neat and we are working hard to achieve more and grabbing more market shares. So I hope that you all have understand the current situations about quarter one. So maybe very very soon we all come out from these situations and we can contribute the good growth into the industries. So thank you very much for trusting us.
Unidentified Participant
Thank you to the management team for your valuable time and thank you all the participants for joining on the work. This brings us to the end of today’s conference call. You all may disconnect now. Thank you.