Kajaria Ceramics Limited (NSE: KAJARIACER) Q2 2025 Earnings Call dated Oct. 22, 2024
Corporate Participants:
Aasim Bharde — Moderator
Ashok Kajaria — Chairman and Managing Director
Sanjeev Agarwal — Chief Financial Officer
Unidentified Speaker
Rishi Kajaria — Joint Managing Director
Nehal Shah — DVP Strategy & Investor Relations
Analysts:
Rahul Agarwal — Analyst
Shaleen Kumar — Analyst
Sneha Talreja — Analyst
Keshav Lahoti — Analyst
Unidentified Participant
Ritesh Shah — Analyst
Praveen Sahay — Analyst
Sonali Salgaonkar — Analyst
Vinamra Hirawat — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Kajaria Ceramics Q2 FY 2025 Earnings Call, hosted by DAM Capital Advisors Limited. [Operator Instructions]
I now hand the conference over to Mr. Aasim Bharde from DAM Capital. Thank you and over to you, sir.
Aasim Bharde — Moderator
Thank you, Siddharth and good evening everyone. Thanks for connecting to Kajaria Ceramics Q2 2025 results call. From the company side, we have the senior leadership team of the company, who will take us through the Q2 performance, after which we will open the call for questions. Thank you and I’ll hand the floor to Mr. Ashok Kajaria for his opening comments.
Ashok Kajaria — Chairman and Managing Director
Thank you, Aasim. Good evening, everyone. It gives me great pleasure to welcome you to the quarter two F 2025 earnings conference call of Kajaria Ceramics Limited. Joining me on this conference call, my grandson Karthik, our CFO Mr. Sanjeev Agarwal and Mr. Nehal Shah, DVP Strategy and Investor Relations. While we expected industry demand to revive post election late quarter-on-quarter, the sustained weakness in domestic market and excessive rainfall in the months of August and September has led to a subdued quarter two for the tile industry. Nevertheless, our tile volumes in quarter two F 2025 grew by 8.5% year-to-year to 28.70 million square meters. We however expect the demand outlook to improve for the tile industry in second half of this current fiscal.
Our consolidated revenue for the quarter stood at INR1179 crores, indicating a 5% increase compared to the corresponding period last year. Our EBITDA margins remained soft at 13.5% for the quarter, driven by muted margins reported by the bathware division, which was largely attributable to losses incurred in the recently commissioned [Indecipherable] unit in marble. Additional overheads incurred by Keronite unit in the tiles division which commenced operations during the quarter. Our Nepal project commissioned at September 24 and we expect we plan to witness a gradual wrap-up in production in second half of F 2025.
On the export front, India’s tile exports experienced a 15% fall in the first five months of the current year, totaling to INR7400 crores versus INR8700 crores in the same period last year. This was largely attributed to significant jump in ocean freight rates due to ongoing Red Sea crisis and lack of container availability. Now for this quarter segment wise financial performance, Tile segment grew by 5% in revenue terms reaching INR1053 crores compared to INR1000 crore in quarter two F 2024. Bathware segment registered a 6% year-to-year growth in revenue, reaching INR90 crores compared to INR85 crores in quarter two F 2024. The plywood revenue decreased by 26% in quarter two F 2025 to INR17.5 crores as compared to INR23.5 crores in quarter two F 2024. Revenue from adhesive grew by 40% to INR18 crores in quarter two F 2025 as compared to INR13 crores in quarter two F 2024. PAT for the quarter degrew by 22% to INR84 crores in quarter two F 2025 as compared to INR108 crores in quarter two F 2024. As of 30th of September 2024, the working capital days remain flat at 59 days compared to 31st of March 2024.
With this, I take this opportunity of thanking you for joining us today. Over to moderator for Q&A. Thank you.
Questions and Answers:
Operator
Thank you very much, sir. [Operator Instructions] The first question is from the line of Rahul Agarwal from Ikigai Asset Management. Please go ahead.
Rahul Agarwal
Yeah. Thank you. Hi, good evening, sir. Sir, firstly, just a view on gas pricing. Broadly what we are understanding is LNG is going to be oversupplied globally. It looks like long-term, the gas price is going to be extremely low, this more longer term view, I think 2026, 2027, we’re going to see a big time correction in gas prices. Any thoughts internally would have thought that, how do you see tile business long term if that really happens in India?
Ashok Kajaria
No, gas prices as of now changing much and you know, we are buying in north gas from BHEL, in — morbidum we are buying from BSPC. Nothing much has changed in the first six months of this financial year. And looking at that scenario, we don’t know right now what the situation will be. But as you are aware, we are also using biofuel to the extent of about overall about 22%, 23% overall and in north it’s close to about 30% plus. So first six month, there is no major change.
Rahul Agarwal
I understand that, sir. What I was asking was, basically global studies are saying that LNG pricing could correct like 40% going into next three years. Any major change would you see? Let’s say if hypothetically, if that happens, what really happens to the tile industry?
Ashok Kajaria
[Speech Overlap] global right now is not in our hand, we are not buying gas directly, we are buying through these companies. Unless there is a major change, we cannot comment on that. That’s not our thing that we can do anything about it.
Rahul Agarwal
Okay, get it, sir. Sir, secondly, just on the industry performance overall first half and outlook, what do you think, like how will this really pan out? Obviously we all know that real estate launches have been bit slower, but ultimately the outlook is okay. Any thoughts on what should be the first sign of recovery in demand?
Ashok Kajaria
No, it’s already happening. Things are looking positive. What the data feedback is, things are looking positive and the demand is coming from real estate projects partially. So we feel that what we have done in the first half, second half should be much better than the first half.
Rahul Agarwal
Got it, sir. And last question on the working capital, the 59 days. Sir, can we as a business do better than this as in — in terms of is it really possible to run the business at 30 days? Because what we are seeing is Somany is actually trying to run it at almost zero investment. Is it really sustainable from Kajaria perspective?
Ashok Kajaria
What we will try to do that it will not be 40 days but I think by end of March we will bring it down to 50 days.
Rahul Agarwal
And how will that come through this — this will happen more from…
Ashok Kajaria
We are trying to bring it down to 50 days by end of March.
Rahul Agarwal
Got it, sir. Will that come more from receivables or inventory management?
Ashok Kajaria
Both, both, both receivables and inventory management. It’s a combination of both.
Rahul Agarwal
Okay, sir. Get it sir. Thank you so much for answering my question, sir. Happy Diwali.
Operator
Thank you. Next question is from the line of Shaleen Kumar from UBS. Please go ahead.
Shaleen Kumar
Yeah, hi. Good evening, sir. So sir, you know you said that second half is likely to be much better than first half. Is there any signs or any discussions with your distributor indicating that like…
Ashok Kajaria
In tile, as you know there are no distributors, there are dealers across. We have almost 1850 dealers across India. Your feedback is coming positive. You see, two things you all must understand that in the months of August and September there has been excessive rainfall all in the country. And you have just seen the result of [Indecipherable] other day, there is a fall of 35%, you see why? Because things can’t move. If there is so much of rain, things can’t move. Things are much better in the country now, rains have stopped and you know that second half is always better than the first half. But this time first half, this first two months were election period April and May, August and September were excessive rainfall.
If you look at that second half will be definitely the better side.
Shaleen Kumar
Right, sir. Sir, just want to understand, if you have any sense, we have delivered like 8% growth, volume growth. Any sense that we grown ahead of the industry, like how much was the industry? Just like in case you have any inter on that?
Ashok Kajaria
Shaleen, industry should have grown at about 50% domestically. Exports are down, as you know, because of the — this problem in the Israel-Hamas war. And we at Kajaria have grown by 8.5% plus in the second quarter. I think we are definitely at least 5% more than the industry. And going ahead, as you know, Kajaria has always been doing much better than the industry. I can assure you on behalf of Kajaria, Team Kajaria that we will definitely do 5%, 6% more than whatever industry grows
Shaleen Kumar
Yes. Yes. Sir, our realization has been flat, I understand it’s a tough environment, but how should we think about, like, you know, it’s a volume versus value play. So going forward, is there a chance for our realization to improve and what will drive it, if it, if that could be a case?
Ashok Kajaria
Shaleen, realization will remain flat more or less, at least it is not coming down as I said last year, the realizations have become normal when for the first six months, number one. Number two, any realization growth will only come and more value added sales go to the market the bigger tiles, the market increases. There will be slight improvement. But what you will get as a mileage will be increased volume. Increased volume will give you some — leave it to market.
Shaleen Kumar
But that’s not something we are looking in near term, right? It’s more of a little few quarters away?
Ashok Kajaria
Increased margin will be there in the second half, increased volume will be there in the second half, know? Definitely it will be much better than the first half whatever you are seeing.
Shaleen Kumar
Sure.
Sanjeev Agarwal
Yeah, Sanjeev this side. So, as you rightly said that, see there are two parts of business, one is a tile business and another is a non tile business.
Shaleen Kumar
Sure.
Sanjeev Agarwal
So what we have done is, as Sir has said that we have done much better than the industry. The volume in a such challenging industry, the volume has been good. And the most important part is this, despite this bad scenario, the realization has not fallen.
Shaleen Kumar
Correct.
Sanjeev Agarwal
So why the margin has fallen? Margin has not — has fallen mainly because of two things, one is a tile unit. We have put up Keronite, so that is under the stabilization. So, that has been somehow responsible for the fall in margin. And another major factor is bathware division, wherein we had put up a plant which is still under stabilization and there will be significant improvement in the second half. So the blame should go to these things and which are rectifiable in the next half year.
Shaleen Kumar
Actually, that’s kind of a answer my another question where I could see increase in other expense. So is that the reason for jump in other expense?
Sanjeev Agarwal
Yes.
Shaleen Kumar
Sir, last question, but…
Sanjeev Agarwal
When the volume will go up, so other expenses will not go up in return. So we get some operating leverage there also.
Shaleen Kumar
And — sir, last bit, okay, other expense I understand now. How should like how should we think about our gross margin, that have also come down a bit, right? So is there any particular input costs that have gone up?
Sanjeev Agarwal
[Technical Issues]
Ashok Kajaria
Yeah, Shaleen, so if you look at year-on-year, the gross margins are down, that’s largely because of realization drop by nearly 3%. And if you look at quarter-on-quarter, the gross margins are down almost 90 bps and that’s largely because of higher mix of outsourcing, which has gone up from 23% to 26%.
Shaleen Kumar
Yeah, I was looking for sequentials, sir, it’s largely because of the outsourcing. Understood.
Sanjeev Agarwal
Yeah.
Shaleen Kumar
Understood. I understood. All right, sir. Best of luck for second half. Thank you so much.
Ashok Kajaria
Thank you. Thank you, sir.
Operator
Thank you. The next question is from the line of Sneha Talreja from Nuwama. Please go ahead.
Sneha Talreja
Hi, sir. Good evening and thanks a lot for the opportunity. Just continuing on the margins part of it, you’ve also mentioned that there were losses in the bathware, which is in a newly commissioned unit and also because of the Keronite unit. Is it possible to quantify so that we can, you know, come to the normalized margins?
Ashok Kajaria
I think because the margin should be around 80, 90 bps because of the bathware thing.
Sneha Talreja
Because only of the bathware 80, 90 bps kind of an impact?
Ashok Kajaria
Yes, you can say roughly 100 bps, 90 to 100 bps because of the bathware. There is some softness in the faucet also because the prices of metal has gone up and we have not been able to pass it on in this quarter, maybe we generally pass it on with the leg. So maybe we’ll make up next quarter in faucet also. So majorly, you are right, you can put the blame fall in margin to bathware, so tile business has been fortunately, there is no, which is our core business, which is our main business that has not been affected and we have performed better than the industry, both in volume terms and there is no fall in utilization. So we are quite satisfied. So we have not done the way we wanted, the way we guided for the volume, the way we guided for the margin, but we are quite satisfied that giving the circumstances we have — we have done really fine.
Sneha Talreja
Understood, sir. Understood. So, these margins then definitely can normalize in the coming two quarters, which is, I mean, H2?
Sanjeev Agarwal
No, should be told, this is the special circumstances we have attained this margin. So I’ve given you the reason, I’m not saying you are intelligent enough to calculate the margin. As said, the reason for fall in margin, first, the bathware unit did not stabilize which is under stabilization, so it is stabilized. So it will not show the same margin which we have shown in the first half or the Q2. Second, the Keronite tile division which is — which was only at 38% will not work at 38%. When the percentage will improve, obviously the margin will improve. So I think we will regain the lost margin in this two segment and the tile business, we are not as and we are not guiding you for a better improved margin in tile sector also, as Kajaria ji has said that we are not expecting any price increase, but we at the same time, we are not expecting any fall in the price also. So fortunately, if the things improve, you may — we are not guiding, but we may see some price improvement also going forward we don’t know.
Sneha Talreja
Understood, understood. Last two questions if I may. Can you give us the gas prices for north, south and west, sir?
Ashok Kajaria
Gas price average is INR37 right now.
Sneha Talreja
This is exactly same as last quarter? And all the three units also remain, I mean all the three regions also remain the same gas price?
Ashok Kajaria
Yeah, yeah, it is INR38 for north, south is INR37, west is INR35 and average is INR37.
Sneha Talreja
Understood sir, understood. One last one from my end. While you mentioned about the volume, is there any industry growth estimate for H1?
Ashok Kajaria
Volume growth for H1, industry should be about 2%, 3% only.
Sneha Talreja
2% to 3%.
Ashok Kajaria
Yeah, it’s been a muted performance.
Sneha Talreja
Understood. Understood. Thanks. Thanks a lot, sir and all the very best.
Ashok Kajaria
Thank you. Thank you.
Operator
Thank you. The next question is from the line of Keshav Lahoti from HDFC Securities. Please go ahead.
Keshav Lahoti
Hello. Hi. Thank you for the opportunity. Sir, as your Nepal rather commission now, give us some sense on how the Nepal market is doing? What sort of ramp up you’re planning, what sort of margin you would make in this market?
Sanjeev Agarwal
So basically, we have put a 5.1 million square meter capacitor, ceramics and GBP in Nepal. We just commissioned September 24. The total market size is INR2500 crore and in volume term it’s between 22 to 25 million square meters. So if we’re looking at ramping up now, sales in the next coming three to six months as the plant gets stabilized and the dealer showroom we had basically.
Keshav Lahoti
Okay. So should we expect like what sort of ramp up, like 50% utilization in next one year? And how would be the margin in this plant compared to your Indian business?
Sanjeev Agarwal
Yeah, plant is working at 100% and our target is to spend 100% on the plant capacity going forward.
Keshav Lahoti
Okay. So this is a margin accretive like Nepal is a margin accretive business compared to tile business?
Ashok Kajaria
At the moment it is difficult to make any comment on the margin, because it’s a new market. So it may be margin accretive, maybe similar. It’s too early and I think let’s wait for another quarter to enable us to give any guidance about the Nepal.
Keshav Lahoti
Yeah. Understood. Got it. Sir, secondly, coming on the sanitary ware business. So again, sort of a sub-par performance of 6% only volume revenue growth in sanitary ware and plywood business have declined by 26%. So how should we see this business going forward?
Sanjeev Agarwal
So for sanitary ware business, we had a very low growth. The only reason was again, as you know, because of the heavy rain, the market was really very difficult last quarter and we’re looking at a much better H2 going on from here. We are doing a lot of things also, lot of showings are being made, a lot of work is happening at the ground level. So we are looking for a much better H2.
Keshav Lahoti
Understood, got it. Last question from my side, the volume growth guidance what you have given last time 11% to 12% for FY 2025 is 15% to 17% EBITDA margin, does it remain intact or would you like to lower it?
Sanjeev Agarwal
No, it will go down because the new plant has really got — lower down our margins and it will still take another two, three months to stabilize and from the quarter four will be much better [Speech Overlap]. We won’t be able to maintain our guided market.
Keshav Lahoti
Okay. So what is the new guidance for this year?
Sanjeev Agarwal
In this financial year.
Keshav Lahoti
Hello, sir, what’s the new guidance for this year for volume growth and margin?
Unidentified Speaker
Volume growth, we can say we achieved, as VCV had said that plant is still under stabilization. So…
Ashok Kajaria
The overall volume growth this year, overall for the tiles would be anywhere between 9% to 10%. We have already done 8% in the first quarter, 8.5% in the second quarter. And as I have already said, the second half will be better than quarter one and quarter two. So we are looking at a 9% to 10% volume growth as far as the second quarter two is concerned for the full year.
Sanjeev Agarwal
And margin guidance will see at the lower end of our stated [Speech Overlap].
Ashok Kajaria
As you know, we have given a margin guidance of 15% to 17%. It will be by end of the year. It will be at the lower end of this guidance in this year.
Keshav Lahoti
Okay. So by Q4 it would be 15%, right?
Ashok Kajaria
Yeah.
Keshav Lahoti
For Q4 you are talking or as a year you are talking?
Ashok Kajaria
No, no, I am talking for the whole year. I am talking for the whole year.
Keshav Lahoti
Understood, got it. That is helpful. Thank you so much.
Ashok Kajaria
Thank you.
Operator
Thank you. Next question is from line of Jyoty Mishra from Nirmal Bang. Please go ahead.
Unidentified Participant
Good evening, sir. Thank you so much. This is related to the same volume growth number that is given that full year it will be in a range of high single digit of 9% to 10%. Could you give us any guidance in terms of the pipeline? Because we know that the project which would require tiles we order for those tiles would have any which would have come. So pipeline, so do you grab your pipe…
Ashok Kajaria
Definitely correct, it is not a project based company, there is a pipeline of pending orders, is a dealer based company. We have 1850 dealers across, orders keep on coming and going, this has been going for a number of years. So there is no such thing as pipeline. And since we have already done 8% in the first quarter, 8.5% in the second quarter and with the markets looking positive we will do whatever we are saying. There is no such thing in this industry.
Unidentified Participant
I agree, sir. But you will have a break-up of your tile volumes in terms of, you know, IHB and the real estate or you know segment and real estate would typically have a pipeline. So maybe…
Ashok Kajaria
We will talk about it at the end of quarter three.
Unidentified Participant
Okay. Okay. Thank you, sir. That is all my question.
Operator
Thank you. The next question is from the line of Ritesh Shah from Investec. Please go ahead.
Ritesh Shah
Hi, sir. Thanks for the question. Couple of questions. Sir, first is in the last analyst meet you had indicated that we will focus on government projects and will have a pan India team. You had also indicated certain target numbers from this particular segment. Any specific update over here? And what will be the contribution of government projects? If you could please help on that.
Ashok Kajaria
You are absolutely correct, the project team is in place, only the project team is in place, point number one. Point number two, as far as government projects are concerned, it will definitely go by at least 25% more than what we did last year because earlier we had a project team only for north. Now the project team has come in place in east, west and south. So definitely it will be more than 25% government work what we have done last year.
Sanjeev Agarwal
And just to add to that, Ritesh, that this year we’ll see more and more of approval which will be done. The real sales will happen start coming from next year. But the team is in place and we are going and meeting a lot of government departments.
Ritesh Shah
That’s useful. And sir, would it be possible for you to quantify what percentage of a total volumes are from government projects right now and where we aspire this number to be?
Ashok Kajaria
Yeah. Last year, if you remember we did 10% in government business and this year we are looking at least at about overall sales volume 12.5% to 13% of the government business.
Ritesh Shah
This is very useful, sir. Sir, my second question is…
Ashok Kajaria
Just to complete my sentence as Rishi said, this year more, you know, in government department, approvals require lot of time, what approvals are done now the business comes next year. So with the project team in place already now I am sure that next year this number should go up to 15% as far as government share of the total sales are concerned.
Ritesh Shah
Sure, that’s helpful. Sir, my second question is on capital allocation. Just keeping a check of what the company is doing. I see basically there was a JV that we did. I think it’s in for UK Path Holding Limited, I think Kajaria UKP Limited. After that we have made an acquisition of CTD Stores, when the quantum is quite significant, so is it like change in thought process? Are we investing into the retail network overseas? How should we look into this and the total amount that we have actually spent on the overseas assets, if at all we have acquired them, if what I read is correct.
Rishi Kajaria
So we are not going to spend a lot of money and our focus is not changed. After opening the London store, we got this very good distress of these seven stores which we thought would further strengthen our retail operations. So in terms of capital allocation, very less capital has been allocated and we don’t intend to allocate a lot of capital at home.
Ritesh Shah
So is my number right? 400,000 pounds to acquire seven stores?
Rishi Kajaria
Correct, correct.
Ritesh Shah
Okay. And from a incremental RoC standpoint, if I have to look at this particular aspect in isolation, I think Kajaria ji has always been focused on incremental RoC and margins. So how does this particular bucket on overall scheme of things actually fit in? Because it — it’s a bit different to traditionally how we have operated.
Sanjeev Agarwal
Ritesh, it is too small which will make any impact on RoC. 400,000, how much is [Foreign Speech] the investment per, I mean, this is not even a question to be asked. [Foreign Speech]
Ritesh Shah
Fair thing. But we don’t intend to progress this on this path going forward, right? Or is it like if we have some distress assets, we’ll continue to buy?
Sanjeev Agarwal
That portion he has answered, I’m just answering the RoC point of view.
Rishi Kajaria
Ritesh, as you said, we’re not acquiring any more assets and this is just to stabilize the London operations and we are not getting into it much any further.
Ritesh Shah
Sure, that’s helpful. Sir, my third question is, I was moving around the channel and I found basically two brands, one was Primera and other was Tecnica. The price points over here in the same Kajaria shop were significantly lower. I’m just trying to understand, is there some change in thought process on our market positioning? Because Kajaria has always been premium solid brand, that’s how our pricing has been.
Rishi Kajaria
Ritesh, you must have seen this in the Kerala market. Basically it’s the same tile, but to cater to different set of dealers, let us suppose in Cochin there are 50 dealers, we can’t win dealers in every shop. This is to give a higher distribution reach within the Kajaria brand only and pricing is not much lower. It is hardly 5% to 7% lower than the actual Kajaria brand we are selling. So, there is not a major difference in the price inflation in this.
Ritesh Shah
Okay. So is this something for a specific micro market in Kerala or is it we intend to replicate on a pan India basis?
Rishi Kajaria
No, currently it is only for Kerala market as of now.
Ritesh Shah
Okay. This is — this is quite helpful. And sir, last question…
Rishi Kajaria
Yeah.
Ritesh Shah
Yeah, sorry, sir, please finish it, sorry.
Rishi Kajaria
That’s 100% retail market with no project, so that’s a different market altogether. This is only for the Kerala market as of now.
Ritesh Shah
Okay. And sir, would it be possible for you to quantify the quantum of volumes attached to this or is it very, very small?
Rishi Kajaria
It’s too small. The volumes in the overall picture in this is very small.
Ritesh Shah
Okay, last question sir. Channel inventory, is it low, high? How should we gauge?
Ashok Kajaria
Channel inventory overall has reduced after GST. You see, earlier the transit time was much higher than what it is now. GST has removed lot of roadblocks. So today the dealer keeps a maximum inventory of 45 to 60 days and he locates with that because the delivery time has reduced drastically, that’s so because of the wide range of products, he keeps inventory of 45 to 60 days.
Ritesh Shah
Sure. Thank you so much and all the very best. Sir, thank you again for answering the questions. Thank you.
Operator
Thank you. The next question is from the line of Praveen Sahay from Prabhudas Lilladher. Please go ahead.
Praveen Sahay
Thank you for opportunity. Sir, my first question related to the bathware, as 5.7% of the growth for this quarter. How is the guidance for a full year or the you are ahead?
Rishi Kajaria
So full year, we are looking at a 15% plus volume growth, revenue, revenue growth.
Praveen Sahay
Revenue growth, okay?
Rishi Kajaria
Next six months should be much better, much better, plant is stabilizing, the markets will be better. I think we’ll — the next six months will be much, much better. We will compensate for the first six months in these six months.
Praveen Sahay
Good to hear, sir. Second question is related to the Nepal project. Earlier you had said you have already business there and you do around 80,000 square meter per month. And with the plant coming in, will you ramp up to the four lakhs square meter per month? So that holds true. So from September or you know, when the plant has commissioned, so October, November, we will start seeing such number improvement.
Rishi Kajaria
No, the plant is already started, the plant started on 6th of September and it will come into full production by November — by November and we intend to sell as much as we produce as we go forward.
Praveen Sahay
Okay. So currently you are already doing 80,000 square meter per month from Nepal?
Rishi Kajaria
That just started, that was — that was in September, September the plant had just started, September we sold about 60,000, 70,000 square meter. From October it is, it will improve and every month here on we’ll increase our sales. As the production is increasing, the sales will also increase.
Praveen Sahay
Okay, fine sir. Got it.
Rishi Kajaria
The number you talk about, we’re exporting from India.
Praveen Sahay
Yeah.
Rishi Kajaria
Everything is locally made there. So obviously there’s a price, big price advantage and now with our plant coming, we’ll get much bigger share of the Nepal market.
Praveen Sahay
Yeah, good. Yes sir. Secondly, on the last call also you had given indication of broadening the coverage of a channel financing among dealers. Can you quantify in these numbers like how much of 1800 odd dealers so far, you know, covered with the channel financing? And how is our future target?
Ashok Kajaria
[Speech Overlap] There are two kinds of things. One is payment, we have two as I said last time, out of 1850 dealers today, almost 950 dealers are under 4% or 3%, 4% means paying in advance, 3% means paying in ten days. And almost 175 dealers are already covered in the channel financing. Our target is that by end of March we should cover at least another 300 dealers in channel financing.
Praveen Sahay
Sir, on this only is that the Kajaria only doing in the market this kind of a channel financing to the dealers or the PoS also?
Ashok Kajaria
Others are also doing, Cera is doing, Somany is doing, they are already doing.
Praveen Sahay
Okay. Okay, fine sir. And just to clarify if which you had answered earlier related to the government project. So for FY 2024 you had said 12% to 13% of your volume came from the government project and 15% for this year.
Ashok Kajaria
Absolutely correct [Speech Overlap] last year it was 10%, this year it should be close to about 12.5% to 13%.
Praveen Sahay
That is, sorry sir. That is for a volume you are saying?
Ashok Kajaria
Volume, volume. We only talk about volume.
Praveen Sahay
Okay. Last year 10,000 volume, this year 12.5 percent of volume?
Ashok Kajaria
Absolutely correct.
Praveen Sahay
Thank you sir. Thank you for your clarification, all the best.
Ashok Kajaria
Thank you.
Operator
Thank you. Next question is from the line of Sonali Salgaonkar from Jefferies. Please go ahead.
Sonali Salgaonkar
Sir, thank you for the opportunity. Sir, my first question is regarding the Morbi exports. You did mention that there is a 15% fall in H1. Sir, wanted to check on two aspects. Firstly, was there a planned shutdown in August, September by Morbi? And secondly, is the dip in exports impacting any domestic operations in terms of pricing because of the higher influx of their supply in the domestic market?
Ashok Kajaria
Now good questions. First, the freight impacted very much, I just give you a small example. The freight, let’s say to Europe was at one time was $1,000, it went up to $4,000. Now it has come down to about $2,500, so the Fed impacted, as a result the exports came down because the buyer for a container, if the freight is almost 40%, 45% of the component, the buyer cannot afford to pay and it cannot sell locally there, that’s one. Secondly, if you are aware in, just before Janmashtami about 250 plants got shut down and they were almost closed for a month and a half and they are gradually starting now. They are gradually starting now. Yes, you are right. Whenever the export suffer, partly they close the plant, partly they try to give in domestic, but as I have said a number of times in the past also, suppose you are a dealer and you have a showroom [Foreign Speech].
So you have displayed a certain material of Somany, Johnson or Kajaria. Now somebody comes and tells you, look, I will give you 15% cheaper what you will do, because you cannot display and sell because next time that material will not be available. So it doesn’t impact at all the local market at all. It used to earlier because the price difference was very much. With GST coming in, that difference has narrowed down to a great extent. So honestly, it is not affecting the local market.
Sonali Salgaonkar
Sir, very clear. Sir, my second question is regarding pricing between April 24 to September, what has been the overall pricing action in H1 FY 2025, both for tiles and sanitary ware?
Rishi Kajaria
Price has been completely stable. Actually there’s been no price change at all between April to September. As you can see in our realization and we continue to, I think we’ll continue to see that in the next six months as well. We don’t see either a price increase or the price declines. We have already answered this earlier.
Sonali Salgaonkar
Sure. Sir, that’s good to hear because despite the…
Ashok Kajaria
Sonali, the only thing is one up is this brass prices in bath fittings, because brass prices right here again getting back to normal. So that was the only difference as far as the brass prices. In tiles, not much has changed.
Sonali Salgaonkar
Understood. And last question, capex guidance for FY 2025?
Sanjeev Agarwal
So yeah, so for capex, if you look at the first half, we’ve done a capex of INR135 crore which includes INR101 crore excluding Nepal, Nepal was INR34 crore. And for the full year, we expect capex of around INR200 crore which includes Nepal INR44 crore and balance INR156 for divestiture.
Rishi Kajaria
This is including the normal capex.
Sanjeev Agarwal
Yes, including maintenance capex.
Rishi Kajaria
Maintenance capex and some capex for the office building. We are making a new office.
Sonali Salgaonkar
Got it, sir. Very clear and all the best to the team and happy Diwali.
Ashok Kajaria
Thank you. Same to you all, it was…
Operator
Thank you. The next question is from the line of Omkar Mugardare [Phonetic] from Sree Investments. Please go ahead.
Unidentified Participant
Sir, I just wanted to check with this lower revenue growth than earlier projected, is there any impact on your long-term goals which you had earlier stated, three year goal.
Ashok Kajaria
Please repeat the question? Can you please repeat the question, please?
Unidentified Participant
Yeah, I was asking whether with the lower growth in the revenue because of the industry performance in tiles industry, just wanted to know whether there will be an impact on your guidance which you had earlier given three year goal?
Ashok Kajaria
Three year is not changing much because you know, every year cannot be — since year is not changing much, this year also, as we have already said, the full year will have a volume growth of 9% to 10%. Earlier we estimate, but a lower double digit, now it’s 9% to 10% we are talking about and EBITDA of 15% to 17% a year we are seeing that will be at the lower end of this guidance.
Unidentified Participant
So I guess for the three year goal you had stated around 13% to 15% kind of revenue growth, if I’m not mistaken?
Ashok Kajaria
Yes, yes, yes.
Unidentified Participant
And what was the margin guidance given for three year?
Sanjeev Agarwal
Yes, as you said that we had given a three year vision, we had given a guidance of 15% to 17%. So we cannot give any specific number, this year it will remain at the lower end of the guidance. The next year it may be — maybe middle, maybe upper end of the margin. So overall guidance is what we have guided between 15% to 17% it will remain the same. How much which year, we cannot tell you.
Unidentified Participant
And what about the revenue projects which were given?
Rishi Kajaria
Revenue, you are repeating. We have already answered that we are not changing the guidance of three year marginally because this year the performance has been muted as against this year guidance, it may impact slightly our overall guidance. But it is difficult to say this now, maybe next year we can grow better than what we expect. So overall we are not changing our three year vision.
Unidentified Participant
Okay. As far as the current quarter is concerned, have you seen any green shoots since you are seeing the second quarter — second half will be better than first half?
Rishi Kajaria
Already answered, already answered. This point has already been answered. Next question please.
Operator
Thank you. [Operator Instructions] The next question is from the line of Vinamra Hirawat from JM Financial. Please go ahead.
Vinamra Hirawat
Can you hear me?
Ashok Kajaria
Yeah, yeah.
Vinamra Hirawat
So, I wanted to compare the ten days between the beginning of Navaratri pre Dussehra, it’s possible to provide you a rough estimate of growth for ten days between Navaratri and Dussehra for this year and last [Technical Issues].
Ashok Kajaria
[Foreign Speech] It’s a normal season, it is not something that we are on Amazon, we don’t have an Amazon [Speech Overlap]. It’s a normal thing, normal thing.
Rishi Kajaria
Next question please.
Operator
Thank you. The next question is from the line of Nilesh Sharma from Anantnath Skycon Private Limited. Please go ahead.
Unidentified Participant
Yeah, thanks. Good evening. Sir my question is regarding, we are planning to increase government revenue from 10% to 15% next year. So is there any negative impact on working capital which we are planning from 59 days to 60 days because government project payments are getting little delayed in 2025?
Ashok Kajaria
There is no impact at all. Let me tell you, for the last three, four years the government is paying much better than even the private sector vendors. So the government payment has been very, very good for the last three to five years.
Unidentified Participant
Okay. Sir, next question, how we are encountered the inventory increase due to lower export from Morbi local player. Is there any risk of dumping in local market?
Ashok Kajaria
I already answered that when Sonali ji asked this question, I already answered this, there are two things we do normally. First, they shut down their plants. You know, there are almost hundred plus plants who are basically export oriented, number one. If the exports are less, they trickle down their capacity or they shut down their plant. Secondly, if there is a showroom suppose, you have a 5000 sqft showroom, you have displayed Somany, Johnson or Kajaria, either of the branded players and somebody comes to you and says [Foreign Speech] who will you sell to? Because in this trade, [Foreign Speech] what you display sells. So as a result, if you just buy, where will you sell? Nobody will buy from you. Because a retail customer who comes, he sees the product and they decide what product I will use. So it doesn’t work. It used to work earlier because the price difference between the Morbi and the branded player and especially Kajaria was very high, this has now minimized to a great extent. The difference today is between 20% to 25% between Morbi and Kajaria. So that thing is no more valid. It used to be valid six years back when there was no GST.
Unidentified Participant
Okay, sir. Okay, sir. Thank you so much.
Ashok Kajaria
Thank you.
Operator
Thank you. Next question is from the line of Rahul Agarwal from Ikigai Asset Management. Please go ahead.
Rahul Agarwal
Yeah, thank you for the follow-up. Sir, just one question on Keronite. You know, how is the product rollout which happened starting May, how is the acceptance from the dealer? Is it like the product is very different than what the range we used to supply in GVT? Some color on that please.
Rishi Kajaria
The range is not very different. We were just attacking a different dealer market segment in different areas. But we are keeping it very, very slowly. I mean, we have hardly sold anything in the last couple of two, three months and they’re growing very, very gradually. We’ll take a call as we go along. If it doesn’t suit in the market [Technical Issues], it’s in a very, very small quantity right now, we’re just tested the market.
Rahul Agarwal
Sorry to interrupt, sir, your line got disconnected in between. Can you please repeat your answer?
Rishi Kajaria
It is very, very small without impacting Kajaria in any way we are testing the waters. We’ll take a call as we go along. If it works, it works. If it doesn’t work, we will change. We will remove it and change it to Kajaria.
Rahul Agarwal
Got it? Sir, could you just explain how is that different from Kajaria as of now?
Rishi Kajaria
We are attacking a different dealer network. This is more to attack the Morbi market. This brand has been launched to make sure that, you know, to counter the Morbi products and like I’ll give an example, in Tamil Nadu, there is a dealer in Dindigul, I went to the showroom, he has a one lakh square feet showroom, he has 25 brands of Morbi. So we are tracking people like these where we already have a relation and with the 25 brands of Morbi we’ll have another 26 brand of Morbi which is Keronite. So we are attacking these kinds of people where our Kajaria brand is not impacted by any way which it is not.
Rahul Agarwal
Okay, okay, okay. I get it. All right, sir. Thank you so much and…
Rishi Kajaria
Insignificant volume going forward as well.
Rahul Agarwal
Yeah. Well, I am assuming that the 38% utilization will obviously increase and it’s a 6 million square meter plant, it’s not small, right?
Rishi Kajaria
Right, right. We are also getting some material made for Kajaria from there, so we’ll balance it out. We’ll not — we’ll not go very aggressive in it.
Rahul Agarwal
Okay. So the 6 million will have Kajaria, Keronite both separately? That’s what you’re saying.
Rishi Kajaria
Correct, correct, correct.
Rahul Agarwal
Okay, okay. Okay, sir. Thank you so much for answering.
Nehal Shah
And even if share, can we — in that quantity, it’s going to be just 5% of our sales, so nothing more to dealer dependent.
Rahul Agarwal
All right, Nehal, thank you so much. Thanks.
Operator
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for closing comments.
Ashok Kajaria
I think thank you very much for this session. I think lot of good questions have come and we tried our best to reply to the best of our ability. I’m sure that anything else which can come later will be answered by our team of Sanjeev ji and Nehal. We are available at any point of time to take care of these questions. Thank you very much for organizing this conference.
Happy Diwali to everybody, the entire team of Kajaria.
Sanjeev Agarwal
Thank you.
Rishi Kajaria
Happy Diwali. Thank you.
Operator
[Operator Closing Remarks]