Kajaria Ceramics Ltd (KAJARIACER) Q4 FY21 Earnings Concall Transcript

Kajaria Ceramics Ltd. (NSE:KAJARIACER) Q4 FY21 earnings concall dated Jun. 14, 2021.

Corporate Participants:

Ashok Kajaria — Chairman & Managing Director

Sanjeev Agarwal — Chief Financial Officer

Rishi Kajaria — Joint Managing Director

Chetan Kajaria — Joint Managing Director

Analysts:

Shaleen Kumar — UBS Securities India Pvt Ltd — Analyst

Achal Lohade — JM Financial — Analyst

Onkar Garudaaya — Shree Consultancy — Analyst

Sneha Talreja — Edelweiss Securities — Analyst

Girish Choudhary — Spark Capital Advisors — Analyst

Lavanya Tottala — UBS — Analyst

Sonali Salgaonkar — Jefferies India — Analyst

Himesh Satra — Sequent Investments — Analyst

Rajesh Ravi — HDFC Securities — Analyst

Aadesh Mehta — Motilal Oswal Asset Management — Analyst

Saurabh Jain — HSBC — Analyst

Rahul Agarwal — InCred Capital — Analyst

Jigar Shah — ICICI Securities — Analyst

Aasim Bharde — DAM Capital Advisors Ltd — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the Kajaria Ceramics Limited Q4 FY ’21 Earnings Conference Call hosted by UBS Securities. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Shaleen Kumar from UBS Securities. Thank you and over to you, sir.

Shaleen Kumar — UBS Securities India Pvt Ltd — Analyst

Thanks, Stephen. Good evening, everyone, and thanks for joining this call today. Today, we have with us from management Mr. Ashok Kajaria, Chairman and Managing Director; Mr. Chetan Kajaria; and Mr. Rishi Kajaria, Joint Managing Director; and Mr. Sanjeev Agarwal, Chief Financial Officer. I will hand over the call now to the management for their opening remarks and following which, we will open the forum for Q&A.

So, over to you Mr. Kajaria, Thank you so much.

Ashok Kajaria — Chairman & Managing Director

Thank you, Shaleen. Good evening, ladies and gentlemen. First and foremost, I hope and wish that your family, friends, and colleagues have been safe from COVID and I pray that all of us get over this crisis safely and quickly. I am with my sons, Chetan and Rishi, and Sanjeev, our CFO, and Pallavi, Investor Relation, on this con call.

The world is passing through a very difficult time from last one year and India is no different. In these diverse circumstances, I want to thank all our team members, dealers, suppliers for delivering one of the best quarters in this difficult time. At the same time, I want to thank all our investors who have stood by us, putting confidence in the management in this difficult time.

In these times, our priority is to take care of the Kajaria family as a whole. We have done our level best to get our staff members vaccinated at the office and at the factories. Also we are setting up an oxygen plant in the government hospital in Rajasthan, a place called Tijara, to help COVID patients.

The tile industry witnessed good recovery pickup post quarter three along with sustained growth into smaller cities and towns. Q4 also witnessed strong urban recovery in metros, Tier 1 and Tier 2 cities. This led to an impressive volume growth of 39% year-to-year in quarter four.

Our plants have operated at an average capacity utilization of 98% during the quarter. The subsidiaries continued to do well, registering a PBT of INR17.97 crores in quarter four FY ’21. Revenue from bathware business grew by 74% year-to-year from INR41 crores to INR71 crores in quarter four ’21. Revenue from plywood business grew to INR15.34 crores in quarter four FY ’21 from INR5.78 crores in quarter four ’20. We have attained the highest ever consolidated turnover at INR952 crores in quarter four F ’21. This is the highest ever by Kajaria.

Absolute EBITDA operating margin increased to INR191 crores as compared to INR93 crores in quarter four ’20 led by higher capacity utilization, plant efficiency, and improvement in subsidiaries. EBITDA margin for the quarter stood at 20.04% as compared to 14.32% in the corresponding previous quarter.

PAT in quarter four ’21 has increased to INR127 crores as against INR49.59 crores in quarter four FY ’20. Working capital cycle as on 31st of March, ’21 decreased by five days as compared to the last quarter that is 31st December, ’20, but if you take it at a quarter-to-quarter corresponding, then it has come down from 73 days to 50 days.

With this, I take the opportunity thanking you all for joining us today. Over to you for Q&A please.

Questions and Answers:

Operator

Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Achal Lohade from JM Financial. Please go ahead.

Achal Lohade — JM Financial — Analyst

My first question is, with respect to the volume growth, now last time you had indicated that you’re looking at 15%, 20% kind of a growth. Given now we are past FY ’21, what is the guidance on the volume growth given the current situation we are in?

Ashok Kajaria — Chairman & Managing Director

You see last quarter results in January, actually we had given a 20% to 25% volume growth for the years ’21-’22 not 15% to 20%. As you are all aware, first week of April, pandemic hit the country much more strongly than what it did last year. So right now, we are not giving you any volume growth indications as of date. We would like to see how situation goes while — you see, June is getting much, much better than — let me tell you little information more.

In April, we did a sales of 75% based on our projected targets. May, as you’re all aware, the states were literally locked down, almost 90% of our dealer network was closed, we’re still able to do 35%. This month as things are progressing, we should end up with about 75% of our targeted sales.

So at this stage, it’s very difficult. COVID is still there. We still have 80,000 cases every day. So it’s very difficult. But definitely I would like to review for July and August, first week of September I think we’ll have a much better idea as to how things are. I can only assure you on behalf of the management two things; one, we will do better than competitors, number one; and we are still not touching upon our sales volume growth of 20% to 25%, we would like to do it if situation permits.

Achal Lohade — JM Financial — Analyst

Understood. And in terms of the realization, how do you see the current situation given there is an increase in the gas price? So, if you could help us first with the gas cost for own and the JV plant for the fourth quarter on a rupees per cm, sir, and also the outlook on the realization?

Ashok Kajaria — Chairman & Managing Director

I will first give you the cost of gas. Gas costs have gone up by almost 20% plus. If you compare apple to apple last year January-March and this year January-March, the gas prices had already gone up by almost 20%. Gas prices are still at the higher side than what it was last year, that’s one. And I am sure that — and we have already increased the prices of ceramic PVT and GVT by about 2.5% to 3% in January-March, but always there will be — I must make a note that always there will be lag time of 45 days between the cost of increase of gas and our price realization because our gas price [Indecipherable] goes up from first of every month. We increase prices, the impact comes. It takes 45 days for the realization to take place.

But if you see, for the full year, it will nullify whatever the gas cost increases for a simple reason that the gas price increase is for everybody not only for Kajaria, so whatever happens the industry raises prices, we also will raise prices together. And at the same time, over a period of 12 months if you look at our horizon, it will be nullified.

Achal Lohade — JM Financial — Analyst

Understood. Sir, if you could help us with the absolute number, would that be possible, sir?

Ashok Kajaria — Chairman & Managing Director

Absolute number of gas?

Achal Lohade — JM Financial — Analyst

Yes, gas cost in terms of rupees per cubic meter?

Ashok Kajaria — Chairman & Managing Director

Sure, sure. You see in our three plants — two plants at North — Secunderabad and Gailpur, we are using natural gas. The prices, quarter four was INR28.46 per a cm and the prices for the current quarter is about INR32. So, an increase of roughly you can say about 15%. And in Morbi, the prices went up from INR33.60 to INR36.13 per a CM. So there also the price increase is close to about 9%.

Achal Lohade — JM Financial — Analyst

This is from the fourth quarter Y-o-Y, right, year-on-year?

Ashok Kajaria — Chairman & Managing Director

Yeah, yeah. For the year, as I’ve said, the gas prices have gone up by 20% if you take it. Quarter three, it was about INR26.10. Quarter one it was — quarter one was literally closed, it was about INR28. Quarter two, it was about INR26.

Achal Lohade — JM Financial — Analyst

Understood. This is very helpful, sir. I’ll come back in the queue. Thank you.

Ashok Kajaria — Chairman & Managing Director

Thank you.

Operator

Thank you. The next question is from the line from Onkar Garudaaya [phonetic] from Shree Consultancy. Please go ahead.

Onkar Garudaaya — Shree Consultancy — Analyst

Congrats on a good set of numbers. My question was regarding the guidance which you gave. My question is more to do with the long-term scenario. Do you think the tables have turned for the home improvement industry as a whole, because last two, three years were very challenging for this industry? So, wanted your view on that.

Ashok Kajaria — Chairman & Managing Director

See, the year ahead will be better than what we have seen last year, two reasons; one, the pent-up demand is not going anywhere because see in work from home, one positive thing is you’ve had lot of people are spending time at home. Earlier the menfolk or the lady folk whoever was working left house at morning, she came back or he came back in the evening, they never bothered about the home.

Today, you’re spending lot of time at home and something is not functioning, this is not functioning, earlier you used to get a message from the other half about this is not happening. Now you are seeing it yourself. So, lot of money will be spent on home improvement, number one.

Number two, what we are doing as Kajaria, we are doing three expansions in the current year. We are doing one expansion at Gailpur plant, which is about 4.2 million square meters of floor tiles at a cost of INR60 crores. We are doubling our Kalahasti plant, which is a glazed vitrified plant at a cost of INR110 crores and where the capacity increase will be about 3.8 million square meter because that will be for big sized tiles.

Third, we are doing another expansion at Jaxx where we are spending about INR80 crores and we will be adding about 4.4 million square meter of capacity. So unless we are positive, we won’t be doing this expansion. We are super positive that the ahead will be very, very positive.

Onkar Garudaaya — Shree Consultancy — Analyst

Okay. The second question is on the margins. What kind of margins do you think are sustainable?

Ashok Kajaria — Chairman & Managing Director

On margins, I will not comment today, I will be able to comment only at the end of the second quarter and the margins will depend on operating leverage based on the opening of lockdowns, volatility in gas prices. So looking at that, I don’t think it will be right for me to make any comments right now. But definitely at the end of second quarter, the situation will be very, very clear.

Onkar Garudaaya — Shree Consultancy — Analyst

So, I’m not trying to tell…

Ashok Kajaria — Chairman & Managing Director

And another thing which we have done, we are working and making sure that the costs don’t go up because that is one area we are working very seriously after last year. If you see our numbers of last year, there has been lot of cost saving. We are sincerely working towards that to make sure that the costs don’t go up.

Onkar Garudaaya — Shree Consultancy — Analyst

Yeah. I’m not asking you for a short-term guidance on margins, what would be in the second quarter or third quarter. I just wanted to ask, what kind of margin trajectory you are looking at, say for the next two, three years.

Ashok Kajaria — Chairman & Managing Director

I can’t answer that today. The COVID is still there, I will not be able answer to that today to my own satisfaction.

Sanjeev Agarwal — Chief Financial Officer

But like we have performed in the past, I think we’ll continue to have the same vision in future.

Onkar Garudaaya — Shree Consultancy — Analyst

All right. Thank you very much.

Operator

Thank you. The next question is from the line of Sneha Talreja from Edelweiss Securities. Please go ahead.

Sneha Talreja — Edelweiss Securities — Analyst

Congratulations on good set of numbers, sir. I have two questions basically. Firstly, with regard to capacity addition. So, we have actually announced capacity addition after a long time and earlier your outlook was that we would be largely going for outsourcing. So as you rightly said that you’re looking at things in a more optimistic way and things are looking upend because of which capacity expansion.

My question would be, is there any challenges that we are seeing at the outsourcing front or do we still continue to see good amount of outsourcing and it’s easily available, but despite that we see that the demand will be higher and we are going for capacity?

Ashok Kajaria — Chairman & Managing Director

See, all the three are luckily brownfield expansions, right. So outsourcing is also not an issue. We are already outsourcing, but it is always good to expand and if we can get additional capacity of our own in our own plants, it will definitely improve our margins. So, that’s why it’s a calculated call which we are taking and we — I think we are very bullish about that.

Sneha Talreja — Edelweiss Securities — Analyst

So, you mean the own capacity additions will lead to higher margin accretion going forward compared to what we are currently getting out of outsourcing or is it the product mix which is why…?

Ashok Kajaria — Chairman & Managing Director

Absolutely yes.

Sneha Talreja — Edelweiss Securities — Analyst

Okay. Secondly my question was, you actually answered it earlier that you have taken a price increase of 2.5% to 3% to pass on the raw material — I mean to pass on the gas prices. So, does that mean eventually what all the gas prices increases happened, it’s all absorbed or do you think you’ll have to take one or two further price increase for that gas price to get absorbed?

Ashok Kajaria — Chairman & Managing Director

See, whatever gas prices have gone up is already covered. I must add for the benefit of everybody, not only gas, paper prices have also gone up very much from first week of March which is our packing cost. So, all this has already been taken into account in the price increases. But if gas prices go up further — because we don’t know the current scenario, the Brent oil is at the high peak, it’s about $72 as we speak today. If the gas prices go up, definitely there has to be a price increase further.

Sneha Talreja — Edelweiss Securities — Analyst

Thank you, sir. That was helpful. One last question if at all I may ask is with respect to outlook. Given that currently or last quarter we of course were very optimistic that Tier 3, Tier 4 kind of places are doing very well. This time of course COVID has gone way more in the interiors compared to even the outskirts. So, anything that you are getting to hear from your dealers, distributors in terms of offtake. And according to you, will it take more time for sales to pick up compared to last year core cycle? Any thoughts there?

Ashok Kajaria — Chairman & Managing Director

See what happened last year, as we are all aware; Tier 1, Tier 2, Tier 3 supported us very much in the first three months after pandemic that is April, May, June. Then the metros came in from October, things changed. This time the first three months are tough for a simple reason, April as I’ve said, was 75% of the sales volume that we targeted; May was literally closed, 90% the dealers were closed still we did 35%; and June things have started looking up.

See the Tier 1, Tier 2, Tier 3 as we are all aware, pandemic had hit very, very strongly. But because of serious lockdown by all the states, not the national lockdown, serious lockdown by all the states, things have started looking up. Things have started moving. As unlock happens — because unlocking still has to take place in many of the southern states, West Bengal, and Odisha; as unlocking takes place, things will get back to normal in the month of July, we are sure about it and you will see a different perspective from July onwards. So, the correct answer if you honestly ask me will only come at the end of the second quarter.

Sneha Talreja — Edelweiss Securities — Analyst

Sure. Sure, Thanks, sir. That was helpful and all the very best.

Ashok Kajaria — Chairman & Managing Director

Thank you. Thank you.

Operator

Thank you. The next question is from the line of Girish Choudhary from Spark Capital Advisors. Please go ahead.

Girish Choudhary — Spark Capital Advisors — Analyst

Thanks for taking my question and congrats on a good performance. Couple of questions. Firstly, on the bathware division…

Ashok Kajaria — Chairman & Managing Director

[Foreign Speech] can you speak a little louder?

Girish Choudhary — Spark Capital Advisors — Analyst

Yes, is this better?

Ashok Kajaria — Chairman & Managing Director

Yes.

Girish Choudhary — Spark Capital Advisors — Analyst

Yes. On the bathware business, last two quarters we have been hitting around INR80 crores to INR86 crores, for the year around INR210 crores. So, what is the outlook here both in terms of revenues and margin and what are the investments being planned in this division? You did announce the capex on the tiles division, but anything there which is on the cards?

Rishi Kajaria — Joint Managing Director

So, bathware did about INR210 crores last year in FY 2021 and our vision for the next three years is to touch about INR500 crores. Even this year we are looking at an optimistic growth for the bathware division. And in terms of capacity, right now we are okay. As the time goes along, we — see luckily whatever we need to do, we have — the existing plants have the capacity to further expand. So as the time comes, we would do it in the existing plants only. So, right now there is no major capex involved in the bathware business.

Girish Choudhary — Spark Capital Advisors — Analyst

Okay. The reason is because if I see the faucet’s capacity, this has been turning at 100% for two consecutive quarters. So, any reason why we are not yet starting the foundry?

Ashok Kajaria — Chairman & Managing Director

You see the faucet capacity currently is at about 10 lakh pieces per annum, right. As Rishi was rightly saying that last six months, the plant operated at close to 90% to 100% of the capacity as you rightly said. With little addition, we are going to watch quarter two with little addition of machines. With probably an investment of about INR10 crores, INR15 crores, this plant will take us to about 30 lakh pieces per year.

Rishi Kajaria — Joint Managing Director

Yes. So, existing — in the existing plant only, we can easily increase the capacity in a space of three to four months.

Sanjeev Agarwal — Chief Financial Officer

And capex is going to be very minimal.

Rishi Kajaria — Joint Managing Director

Very, very less.

Girish Choudhary — Spark Capital Advisors — Analyst

Okay, great. And in terms of margins for this division, if you can give your outlook?

Sanjeev Agarwal — Chief Financial Officer

So Girish, as the capacity go up, the margins will continue to go. We have already set our team in place. So any — the same team will be able to sell for next two, three years. We don’t have to hire any more person. That initial setup cost is already done. So going forward, the margin will only — is going to be higher than that.

Rishi Kajaria — Joint Managing Director

As the top line continues to grow, the margins will be better. Right now base is very low. So as the top line increases, it will only get better.

Ashok Kajaria — Chairman & Managing Director

And just to add one more information, in bathware we have increased prices by 10% effective from 1st of May because as you all might be aware, the prices of brass has gone up.

Girish Choudhary — Spark Capital Advisors — Analyst

Okay. Sir, on the second question on the capex bit. Capex on a — just on a per million square meter or per MSM, the INR80 crores planned capex seems higher at around INR29 crores versus some of the other plants, Gailpur and also the Morbi one. Any reason for the difference?

Ashok Kajaria — Chairman & Managing Director

Yes. I’ll tell you the Tirupati plant, the capex is higher because we are taking the latest machinery there with a value addition. So, there we want to increase — we are going to make all the big size tiles and it’s a GVT plant and even the — so the realizations of that plant will also be better. Yes, the capex is more, but the realizations will also be better because we’re going to be making only value-added tiles there, big sizes there. That’s why the capacity of 3.8 million square meters less, but your overall turnover in the realization of the plant will be much better.

Girish Choudhary — Spark Capital Advisors — Analyst

Got it. Thank you and all the very best, sir.

Ashok Kajaria — Chairman & Managing Director

Thank you.

Operator

Thank you. The next question is from the line of Lavanya from UBS Securities. Please go ahead.

Lavanya Tottala — UBS — Analyst

Hi, sir. Thank you for the opportunity. So, I want to know your view on how the exports overall — for the overall industry, how exports have been given that only India has been impacted by this second wave? How the overall market or overall industry is growing?

Ashok Kajaria — Chairman & Managing Director

Exports are still continuing from Morbi. They will continue to do so for a simple reason, they have proximity to the port. India has established its market abroad and we as India are very, very competitive, as a country. So, exports are continuing irrespective of COVID except the period of probably lockdown when the sub-production suffered.

But this time if you are aware, lockdown did not stop — state lockdowns did not affect any transportation, number one. They also allowed the industry to continue as long as you can sell. So as far as the industry was concerned, there was no stoppage from the state and transportation continued throughout the pandemic.

So, that was one very positive thing which has happened. So exports continue. At Kajaria, we are doing, as you are aware are hardly 3% of our production is exports. So, Kajaria will be more or less a domestic focused market. But in one of the units — our JV units at Cosa as we explained last time to all of you, we have put up one line for glazed vitrified which is only for exports.

Lavanya Tottala — UBS — Analyst

Okay. Got it, got it. So as we see that even motley players are planning to expand their capacity. So, do you think the export and the domestic demand going ahead will be able to absorb the whole — I mean the whole capacity will be addressed or do we see the pressure because of the demand issues again? So capacity is being increased everywhere so how do you see that going ahead?

Ashok Kajaria — Chairman & Managing Director

I would say good question, two things. One, all the expansions have been delayed by a minimum of six months, one. Two, exports will further go up from India as sentiment — anti-China sentiment with lot of anti-dumping duties on China. Exports will continue to grow and when it comes, the market should also expand.

Right now as we are all aware, 15 months of pandemic has done lot of damage to the country as an economy, but as markets come back to normal — near normal, the markets will grow and that additional capacity should be absorbed in the domestic as well as export market I would say.

Lavanya Tottala — UBS — Analyst

Okay. If I may ask one last question. Do we see any change in the product mix going ahead? Or more or less our product mix will be the same as in, I mean now, any change in the product mix that we are seeing?

Rishi Kajaria — Joint Managing Director

See, product mix is, more or less be the same. I mean any new product will come, it will — it’s a matter of time, but there’s no major product change. If you talk about Kajaria, our revenue mixes are 40% is ceramic tiles, for us 32% is PVT and 28% is GVT. As we discussed, we are expanding in all the three divisions so I think more or less our mix will be the same going forward as well.

Lavanya Tottala — UBS — Analyst

Okay. Got it, sir. Thank you. Thank you so much.

Rishi Kajaria — Joint Managing Director

And in South, as we discuss, we are adding the value-added tiles, the big slabs. So, that will further improve our product portfolio.

Lavanya Tottala — UBS — Analyst

Yeah, yeah. That’s the reason I was asking this question with the south which we are expecting, if you’re expecting any change in our product mix higher towards the value-added?

Rishi Kajaria — Joint Managing Director

We are going to make — we are going to continue making glazed vitrified tiles, but in that only we are going to introduce some bigger sizes. That’s why our capex is high and our — the overall volume is less.

Ashok Kajaria — Chairman & Managing Director

And sales realization will be much higher.

Rishi Kajaria — Joint Managing Director

Much Higher.

Lavanya Tottala — UBS — Analyst

Got it. Got it, thank you, sir.

Ashok Kajaria — Chairman & Managing Director

Thank you.

Operator

Thank you. The next question is from the line of Sonali Salgaonkar from Jefferies India. Please go ahead.

Sonali Salgaonkar — Jefferies India — Analyst

Sir, good evening. Thank you for the opportunity and congratulations on a great set of numbers. My first question is a little bit more broader one. What is key differences? What are the key differences that you are experiencing right now between the first wave of COVID last year and the second wave?

For example, last year there was, as we understand, a complete shutdown on construction activities. But is it correct in understanding that this time many states allowed construction activities with onsite accommodation and very limited labor. But the construction really did not stop as completely as it was in the last COVID wave? Is that right?

Rishi Kajaria — Joint Managing Director

You’re right. Construction is still going on. That is why in spite of a major lockdown, we still did about 35% in May and some — and projects are still also going on. So yes, construction work is still going on. Maybe in a slow mode but yes, construction work is going on.

Ashok Kajaria — Chairman & Managing Director

See, another thing which happened. Last pandemic although there was a total lockdown, the dealers operated — were closed on the front and operated from the backdoor because there was less fear. This time, as you are all aware, it hit us very hard in April, May, June. The fear was so much that even when it was allowed, they said we will not open right now, we will open after a while. The dealer also didn’t want to go to the shop and open.

And secondly, he said there are no customers coming because the fear was very much. As it starts easing down, things are getting back to normal as I said and we are hoping to do 75% because things are getting back to normal. And unless the dealer opens, you can’t sell.

Everything was open; transportation was open, plants were allowed to open, but who do you sell? 90% or 95% of the dealer shops were closed in the local lockdown, state lockdowns. So, that was the scenario. This time the people really got scared because somebody or the other relations or the family members died in COVID. The thing was so serious that people were very scared. Now they are trying to get off the ground.

Sonali Salgaonkar — Jefferies India — Analyst

Understand, sir. Sir, what about the urban versus rural mix? In the sense that last year, as you mentioned some time back in the conversation, that the rural was quite strong. But this time, as we understand, the urban is expected to rebound back better. Is it correct?

Ashok Kajaria — Chairman & Managing Director

I don’t agree. I think metro will be whatever it was last year, Tier 1, two, three will do better. It’s a question of another few days. The moment life gets back to normal there, they will definitely perform because there is a lot of work happening in those areas.

Sonali Salgaonkar — Jefferies India — Analyst

Understand, sir. Sir, my second question is regarding the distribution. I mean the Company has penetrated deeper across cities and townships over the past two, three years. Could you help us understand what is your current distribution and how much of your sales are being contributed by exclusive dealership and where do you envisage that going say in the current two, three years?

Ashok Kajaria — Chairman & Managing Director

See, Kajaria has 1,700 dealers. Our vision was, which we have shared I think couple of times with you people that to have a dealer in every Lok Sabha area which is 542. Right now almost 150 Lok Sabha constituencies are still left out and Kajaria has a vision in April ’20 to get into it and have a dealer everywhere. That was only possible because of the introduction of GST on 1st of July 2017.

Because of pandemic, things didn’t work like that. But I’m sure that as soon as things become normal, Kajaria would like to have a dealer in every single Lok Sabha constituency across the country which means another 150. But also I would like to add last year, in spite of pandemic, we have added about 200 plus dealers which is the normal dealers of course.

Because when you when you get exclusive dealers, you have to get their showrooms done and all that as per your standards, which was literally not possible because of the movement of the people — display people and all that, even the dealer didn’t want that. So once things get back to normal, I think this exclusive dealer process will continue further.

Sonali Salgaonkar — Jefferies India — Analyst

Understand. And what about the market share gains? I mean exports are still going strong, so we continue to be quite strong on the domestic front. But market shares from the smaller unbranded marginal players, are you continuing to see market share gains for the products of Kajaria all across the product mix?

And lastly, what are our YTD price hikes? So, you mentioned 2.5% to 3% ceramic price hikes and about 10% bathware price hike since 1st of May. But year-to-date, from Jan, what would be our cumulative price hikes across both the segments? That’s it from my side.

Ashok Kajaria — Chairman & Managing Director

Okay. That’s too many questions at one time. Still I try to answer. See, as far as the price hikes are concerned, I go from the last questions. Price hikes are concerned, as gas prices went up as I said from January to the extent of about 20% — 15% to 20%, we had to hike the prices. So we started off with the first polish vitrified, then we did ceramic, and then we did GVT. And the impact was 3%, 3% for ceramic and polish vitrified and 2.5% for glazed vitrified.

Last year what has happened, just to tell you, the raw material prices of brass has gone up by close to about 30 — sorry, close to about 50% in the last one year. We had two price hikes. First was on 1st of January where we increased the prices by about 6% for this sanitary fittings and now by another 10% from 1st of May.

As far as sanitary ware is concerned, we also had a price hike from 1st of May by about 6% because there two things happened; one, the cost of transportation has gone up, diesel freight. And secondly, the cost of gas has gone up at Morbi. These are the two factors — and the cost of paper has gone up. So, these are the three factors which allowed us — asked us to make sure that the cost goes up.

Rishi Kajaria — Joint Managing Director

And coming to market share, your point was that — see, the market didn’t grow last year. It was probably negative growth last year. We still did our same turnover — almost same turnover as last year 28 — INR2,780 crores as compared to INR2,800 crores. So yes, the market share is being improved gradually.

Sanjeev Agarwal — Chief Financial Officer

And we don’t have the number of Q4 of the — all the organized players so we can’t comment — see, every quarter we have done gradually better than the last — previous quarter. And in the fourth quarter it is not year-on-year, but sequentially we have grown 10% — 12%.

Sonali Salgaonkar — Jefferies India — Analyst

Right. Sir, so you’re hopeful that the trend will continue?

Sanjeev Agarwal — Chief Financial Officer

Trend should continue barring this first three months where there is some uncertainties. So Mr. Kajaria also guided that he’ll be able to guide you only after the things settle down.

Sonali Salgaonkar — Jefferies India — Analyst

Great, sir. Thank you so much.

Sanjeev Agarwal — Chief Financial Officer

By not giving right — that doesn’t mean that we are not positive about it.

Sonali Salgaonkar — Jefferies India — Analyst

Yes, sir. Understand. Thank you.

Operator

Thank you. The next question is from the line of Himesh from Sequent Investments. Please go ahead.

Himesh Satra — Sequent Investments — Analyst

Hi, sir. Congratulations for the great set of numbers. Sir, my question is what is the maximum turnover that we are expecting from the capex that we have planned?

Ashok Kajaria — Chairman & Managing Director

You see, I’ll give you one by one. Like this Gailpur expansion, we are spending about INR60 crores and we should be getting a turnover of roughly about INR135 crores, INR140 crores. As far as Malu Panna — sorry, as far as Jaxx, we are expanding the capacity of 4.4 million square meters of polish vitrified tiles and which would give a turnover roughly about INR160 crores — INR175 crores. As far as Kalahasti where we are expanding with a capex of INR110 crores to the capacity increase of 3.8 million square meters, that should give a turnover of about INR208 crores. All are — as Rishi said earlier, all are brownfield expansions.

Himesh Satra — Sequent Investments — Analyst

Okay. And like how many — like in the percentage terms, how many dealers are open as of today?

Ashok Kajaria — Chairman & Managing Director

How many dealers we have? We have currently about 1,700 about dealers across India, out of which 1,500 are you can say operative dealers.

Himesh Satra — Sequent Investments — Analyst

Okay.

Ashok Kajaria — Chairman & Managing Director

See, on an average like I have just said few minutes back, we have added last year about 200 dealers. But at the same time those who do not perform, we also throw them out and — or ease them out, whatever word you can say. So, we have already literally eased out about 150 dealers. So, net addition last year was only 50 dealers. As the economy opens up, on an average now with the capacities we are talking about, we should add about 150 dealers a year.

Himesh Satra — Sequent Investments — Analyst

Okay, thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Rajesh Ravi from HDFC Securities. Please go ahead.

Rajesh Ravi — HDFC Securities — Analyst

Hi, sir. Good evening, and congrats on great set of numbers. If you could just throw some more light on the demand trends that we have seen in FY ’21 both for domestic as well as export market?

Ashok Kajaria — Chairman & Managing Director

See, I already said, I think this question has already been answered, but still I — for the sake of replying, I’ll reply. In FY 2021 we all know that first three years [Phonetic] was a washout and as situation grew, every quarter sequentially the number went up — sales number went up. First three months it was supported by Tier 1, Tier 2, Tier 3. And after that from October 1 the metros also joined in. The numbers as you can see has been better and better and better. In spite of three-month lockdown, we could achieve a sale of INR2,780 crores, which is only 2% less than what we did in ’19-’20.

Bottom line has been much, much stronger. So looking forward, I think we’ll come back to the same scenario, demand will be very positive. Last year it was a total lockdown, but this year since the state-wide lockdown was there and it started around 15th or 20th of April, we don’t see that kind of a damage happening what happened in the first quarter last year.

Rajesh Ravi — HDFC Securities — Analyst

Okay. No, I was talking more on terms of the industry. What is your expectations of the demand number for the industry in FY ’21 both domestic and export markets?

Ashok Kajaria — Chairman & Managing Director

See last year if look at it, the exports grew. Exports grew from close to about INR9,000 crores to INR11,000 crores. The domestic industry was down by close to about 20% because in Morbi, we are all aware, till June nothing worked and then they started gradually opening up from July ’20. So, the local market was down about 20% and exports grew there. This year in the scenario, exports as I said earlier will definitely grow. It should grow from another INR11,000 crores to INR13,000 crores, INR14,000 crores, INR15,000 crores because we are seriously working on it.

And as far as the local is concerned, because of pandemic which started off in April continues till date. It’s very difficult to assess what will be the scenario overall for the industry as of now. Too early. Second quarter [Speech Overlap] I would like to address all and say that second quarter will be more informative. Because if you ask the same question again, I won’t have the answer because the simple reason that second quarter will be more informative.

Rajesh Ravi — HDFC Securities — Analyst

Right Sir. And sir, on this capex which you know related to Gailpur, Jaxx and [Indecipherable] what is the timeline we are looking at? Are all of these capex will be spent in FY ’22 or they would be split over two years?

Ashok Kajaria — Chairman & Managing Director

All the expansions will be completed in this financial year, number one — in last quarter of this financial year, number one. Number two, overall capex this year we are looking at about INR250 crores to INR275 crores because some of the import payments go to next year. But all the expansions will definitely be completed by end of this year, fourth quarter.

Rajesh Ravi — HDFC Securities — Analyst

Okay, great. So, FY ’23 the contribution would start kicking in from these expansions too?

Ashok Kajaria — Chairman & Managing Director

Yes, it will start definitely.

Rishi Kajaria — Joint Managing Director

Yeah, absolutely.

Rajesh Ravi — HDFC Securities — Analyst

Right. So, your revenue growth target of like — could remain in the higher side?

Ashok Kajaria — Chairman & Managing Director

We have already said that.

Rajesh Ravi — HDFC Securities — Analyst

Yeah, great. Thanks, sir. I’ll come back in queue. All the best.

Operator

Thank you. The next question is from the line of our Aadesh Mehta from Motilal Oswal. Please go ahead. Mr. Aadesh Mehta, your line is in talk mode, kindly go ahead with your question, please.

Aadesh Mehta — Motilal Oswal Asset Management — Analyst

Hello, sir. Congratulations on good set of numbers. Sir, just wanted to understand directionally will we continue investing in new businesses like ply boards? I’m seeing that there is some resolution to increase your capital allocation towards that kind of business. So, just wanted to get some sense on that, sir?

Ashok Kajaria — Chairman & Managing Director

See, plywood last year we did a turnover of about 39-point-some-crores and I would like — Chetan is here, I would like him to talk about.

Chetan Kajaria — Joint Managing Director

Yes. So basically in 2021, we did INR39 crores of turnover in the plywood segment. This year we’re targeting more than — between INR80 crores to INR90 crores. The reason being we’re also adding laminates as a vertical outsourcing from Morbi. So the extra capital required is that the working capital comments are jumping the turnover from INR40 crores to INR85 crores, INR90 crores and going forward we also see it increasing more. As the GST coming in, more and more unorganized players are getting squeezed and the share of the organized sector is increasing rapidly. So yes, we are seeing a very positive outlook going forward in this vertical.

Aadesh Mehta — Motilal Oswal Asset Management — Analyst

Got it, sir. Thank you very much. All the best.

Ashok Kajaria — Chairman & Managing Director

Thank you.

Chetan Kajaria — Joint Managing Director

Thank you.

Operator

Thank you. The next question is from the line of Saurabh Jain from HSBC. Please go ahead.

Saurabh Jain — HSBC — Analyst

Yes. Thanks for the opportunity and most of my questions have been answered. Again wanted some clarity on the capex front like you announced this capex for FY ’22. Does the management already have a mid-term plan in their mind where [Technical Issues] new announcement on the capacity side for let’s say in FY ’23 or FY ’24?

Ashok Kajaria — Chairman & Managing Director

No, no. At this stage no. Let this be done, then we come back. You see we have to grow every year, right, in volume terms. Same question probably you ask me at the end of the second quarter or third quarter that how you are going Mr. Kajaria. So as we process things, as the market opens up because as we said, pandemic is still on. So, we will plan everything for ’23 — ’22-’23 at the end of the second quarter or third quarter.

Rishi Kajaria — Joint Managing Director

And you’ll appreciate this is already a bold move. What we are doing with three expansion, this is already a very bold move because we are very positive and very confident that yes, we’d be able to absorb this production and we have a very positive outlook towards it. So as the time progresses, in future when we need to, we’ll expand more. But I think our first target is to get this all completed in this financial year.

Saurabh Jain — HSBC — Analyst

Sure. Definitely we will appreciate the capex plans. And secondly, taking from the previous participant what we would want to understand is that you highlighted 90% of the dealerships were closed during the month of May. How much of these are already back in the market now? And how has been the response from these dealerships that have opened? Are they just stocking up the products very aggressively or is it only a slow kind of response from the dealers that have reopened now?

Ashok Kajaria — Chairman & Managing Director

It’s a — wherever the economy is opening up, it’s a very positive response. Let me give you a data where things have not opened up. One is Tamil Nadu, Kerala where once a week they are operating; Karnataka they have started working only from today till 2 o’clock; then Andhra and then Maharashtra, which is slowly opening up; Orissa is still locked — lockdown, they will open only from 18th; and West Bengal it is slowly opening up.

Other than that, you can say most of the sales have already opened maybe for limited hours. Things have started moving well. I already made the statement in my earlier remarks that we are looking at a scenario where Kajaria should be doing 75% of the target. And in July, we are looking at a near-normal scenario as economy opens up.

Saurabh Jain — HSBC — Analyst

Sorry, July what you’re looking at?

Ashok Kajaria — Chairman & Managing Director

Near normal.

Saurabh Jain — HSBC — Analyst

Near normal, okay. Okay, understood. And one more question, how much was your advertising spend for FY ’21 and what would be your expectation in FY ’22?

Ashok Kajaria — Chairman & Managing Director

See last year, let me tell you about ’19-’20 also, we spent close to INR90 crores. In FY 2021 because of pandemic, we really cut it down and we spent about INR46 crores. This year we are looking at a scenario where we should spend about INR70 crores.

Saurabh Jain — HSBC — Analyst

INR70 crores, okay. And how much would have been your increase in your freight and forwarding cost and other admin expenses?

Sanjeev Agarwal — Chief Financial Officer

See, that we don’t pay freight.

Ashok Kajaria — Chairman & Managing Director

We don’t pay freight. We pay freight on raw materials, but as things — you see you can’t generalize, just make one statement. We are all seeing that the prices of freight is going up every day, it started at INR60 diesel, today it is at INR100 in nine months or 10 months. How can you calculate that today, tell me? So as all this impact happens, as I said earlier, three major impacts are there. One is the gas price, second is the paper price which has gone up, and third is internal freight on raw materials.

On external we pay ex-factory, so the freight is to the dealer. As their scenario changes happening, we will work on the prices. So, it’s very difficult to quantify at this stage what will be the freight, what will be this, very difficult.

Saurabh Jain — HSBC — Analyst

Okay sir, understood. One macro question, if I would be allowed to ask. So, what would be your sense of what — where industry is really heading towards? Because we are seeing the prices are getting increased and is also being absorbed by then consumers. So is the industry in this crisis time moving more towards expensive products and more of value-added products as the buying propensity or propensity to spend has really increased?

Ashok Kajaria — Chairman & Managing Director

Let me give you a few data, you will have the answer yourself. Steel prices May ’20 to May ’21 has gone up by 50% to 100%. Non-ferrous metals from May ’20 to May ’21 has gone up by 50% to 70%. Plastic has gone up from 50% to 70% in one year. Paper prices have gone up from 50% to 100%, all the industries are doing well. MRA prices have hardly gone up 2.5% to 3%, maybe another 3%, 4%, 5%.

We are thinking can the market absorb. The market absorbed steel prices of 50% to 100%, the market absorbed the non-ferrous prices. How can you say that 2.5%, 3% is the March price? I’m not able to understand. All costs are going up everywhere in the country, as the situation demands, the prices have to go up simple. It’s a very…

Saurabh Jain — HSBC — Analyst

Yes, that is why I was asking because the cost of constructing a house is now escalating a lot. So, would there be a breaking point wherein there’s demand…

Ashok Kajaria — Chairman & Managing Director

I don’t have to say anything, I have given you all the answers. You have all the answers

Saurabh Jain — HSBC — Analyst

So, thank you, sir.

Ashok Kajaria — Chairman & Managing Director

Cement prices I forgot to mention, cement prices have gone up by 50% in one year.

Saurabh Jain — HSBC — Analyst

Yes. Sure, sir. Thank you so much and all the best for the future quarters.

Operator

Thank you. The next question is from the line of Rahul Agarwal from InCred Capital. Please go ahead.

Rahul Agarwal — InCred Capital — Analyst

Yes, hi. Good evening. Thanks for the opportunity and congratulations for a good result. I joined the call about 30 minutes late so please pardon me if the question is repetitive. My first question was on the capex side. So is the overall capex of INR250 crores for a 12.4 million square meter capacity, just wanted to know the capex per plant differs on a million square meter unit basis if I look at the amount spent.

Rishi Kajaria — Joint Managing Director

We have already given detail in our presentation, you can check that.

Ashok Kajaria — Chairman & Managing Director

Yes. Rahul, don’t mix that. All the three plants are making different products as said by Rishi earlier. Ceramic tile have a different capex, polished vitrified tile have a different capex, and glazed vitrified tile have a different capex. And in this case of glazed vitrified tiles, we are moving towards bigger products, which are more value added. So looking at that, this is how the capex is planned. Don’t club the capex and the value and then divide, you will have the wrong answer.

Rahul Agarwal — InCred Capital — Analyst

Perfect. That’s what I was wondering, sir. Thank you so much for the clarification. And one thing was when I look at the capex, is it also including land cost here in any of your plant?

Ashok Kajaria — Chairman & Managing Director

There is no land costs.

Rishi Kajaria — Joint Managing Director

They’re all brownfield expansion.

Ashok Kajaria — Chairman & Managing Director

They are all brownfield expansions. As you joined late, no issue, but they’re all brownfield expansions.

Rahul Agarwal — InCred Capital — Analyst

Okay. Prefect. And sir, one last question on the gas pricing side. So, just wanted to know if you can throw light. In the last quarter you discussed this that the gas pricing you have at different plants have long-term and short-term both, but broadly speaking is the volume pre decided and the pricing base changes quarterly? Is that how it works?

Ashok Kajaria — Chairman & Managing Director

No. My dear, you’re aware gas prices are — you see as far as Gail is concerned, gas prices are determined every month. As far as Morbi are concerned, they decide the price as and when they like which is affecting all the people. That is nothing in our hands. We have quantities, but pricing is not in our hands.

Rahul Agarwal — InCred Capital — Analyst

Okay. So the quantities are pre-decided as per a plant basis, is it?

Ashok Kajaria — Chairman & Managing Director

Yes. We are flexible, but prices every first of the month they decide based on the various factors of rent and all that.

Rahul Agarwal — InCred Capital — Analyst

Perfect, got it. Thank you. All the best. That’s all.

Ashok Kajaria — Chairman & Managing Director

Thank you.

Operator

Thank you. The next question is from the line of Jigar Shah from ICICI Securities. Please go ahead.

Jigar Shah — ICICI Securities — Analyst

Hi, sir. Congratulations for the good set of numbers. My question was more to do with plywood and laminate. So, I wanted to understand the rationale behind entering the laminate segment before we are breaking even in plywood and reaching at some particular levels. So, would you like to highlight whether it will be complementary to our plywood sales or it will give us more revenue in wood panel segment? How do we look at that?

Ashok Kajaria — Chairman & Managing Director

Chetan, will you answer that?

Chetan Kajaria — Joint Managing Director

Okay. Yes, please. So, basically laminate is a complementary product and we are outsourcing this from Morbi with zero capex. Also the gross margins in laminate would be much higher than plywood and this would additionally add to our top line and bottom line and help us increase the turnover and the breakeven much faster.

Also this is a INR6,000 crore market, INR4,500 crores is domestic and INR1,500 crores is exports. Out of the INR4,500 crore domestic market [Technical Issues] is unorganized. So, there is lot of scope to grow in this vertical especially with the GST coming in and the cash flows of unorganized players being tightened up, there is lot of scope for new players to get more market share in this vertical which is again part of the wood paneling industry; plywood, laminate, and MDF.

Jigar Shah — ICICI Securities — Analyst

So, are we expecting breakeven in plywood this year?

Chetan Kajaria — Joint Managing Director

No. Last year we had a loss of INR10 crores in the plywood division. This year we should come down to around INR5 crores, INR5.5 crores. And next year which is ’22-’23, we’ll start making money little bit — breakeven/making little bit of money next year.

Jigar Shah — ICICI Securities — Analyst

Great. And my next question would be the increasing capacity across the industry, all the top players are increasing the capacity…

Ashok Kajaria — Chairman & Managing Director

Okay, sir. Thank you. Thank you so much.

Operator

Thank you. Next question is a follow-up from the line of Achal Lohade from JM Financial. Please go ahead.

Achal Lohade — JM Financial — Analyst

Yes. Thank you for the opportunity, sir. Just one question in terms of the working capital. Sir, how do we see — I mean we have done a great commendable job on the working capital. Do we see this stabilizing here or is there further scope to reduce and is there any element of channel financing for us or are you seeing channel financing prevalent in the industry now?

Ashok Kajaria — Chairman & Managing Director

First of all, we have no channel financing, number one. Number two, if you look at March ’20, it was 73 days; December ’20, it was 55 days; and now it’s at 50 days. I think it will vary between 50 to 55 days. Sometimes you know, when the troubled time is there like in pandemic, this time it will go up at the end of June. Some stocks going up, but normal quarter working is usually between 50 to 55 days.

Achal Lohade — JM Financial — Analyst

Understood. And with respect to cost reductions, you did highlight about the A&P, but what kind of cost reductions did we see in FY ’21 put together all excluding A&P? What is the extent of cost reductions we have seen like traveling and conveyance etc.? How much of that you think is more permanent or how much would come back?

Ashok Kajaria — Chairman & Managing Director

See, cost reduction will be there. Two, three things are going to happen. One, as we are saying that [Indecipherable] 15%, 20%, 25%, whatever the volume growth, the manpower cost will not go up in the sense proportionate will not go up. Some increase of cost will be there on manpower. Manpower per se will not go up quarter [Speech Overlap] headcount will not go up.

Sanjeev Agarwal — Chief Financial Officer

The increase will be due to increments only.

Ashok Kajaria — Chairman & Managing Director

Yes, number one. Number two, as we said just now few minutes back that ’19-’20 it was INR90 crores, the year which went by was INR46 crores, this year looking at INR70 crores. Third, traveling will also come down. Travelling will also come down because now most of the business is being done by phone and with the pandemic still there — here and there, people are afraid of traveling themselves. So, traveling overall in 2021 had come down drastically.

This year also I feel that it will not go up much because people would like to — even the dealers or our people are used to getting over phone or Zoom whatever it is. So, the traveling cost will also come down. And I think by and large with this, we are working on, I think, all fronts.

Achal Lohade — JM Financial — Analyst

And just one more question, sir, with respect to the gas cost. You did highlight that the fourth quarter it’s about INR32 for our plants outside Gujarat. What is it already now as we speak in the month of June?

Ashok Kajaria — Chairman & Managing Director

Same, INR32. April, May, June; it is around INR32.

Achal Lohade — JM Financial — Analyst

And given the current crude price, how much do you think it will go up at the current crude, assuming current prices?

Ashok Kajaria — Chairman & Managing Director

At current crude also it will be IN32, I’ll tell you why, Current crude is not going to change much different, but unfortunately what has happened lot of gas capacity abroad has been shut down because of the lower volumes earlier. So, that the spot gas prices have also gone up very high. That was about $6, $7 about six months back. It has gone up close to about $8.5 to $90.0. So that will probably impact, but we don’t know at this stage today, it’s early. Brent is not making much difference right now, Brent is taken into account at $70.

Achal Lohade — JM Financial — Analyst

Understood, sir. And just one more question, sir, if I may. With respect to — if I — this is more from longer term and not really I’m looking at the current year, sir? Given the way the capacity additions are happening in Morbi or otherwise and the kind of demand improvement we are looking at, is it fair to say that we are — the pricing behavior or ability to take — pass on the cost inflation is much higher this time around compared to say two, three, five years ago. Would that be a fair assessment?

Ashok Kajaria — Chairman & Managing Director

Yes, it’s a fair assessment. Why? Because earlier the gas places in Morbi were not moving much. Now they are higher because of the single reason that GSPC is buying a lot of spot gas. If spot gas prices go up, their gas prices will go for the Morbi players. And earlier they were coal — they were in coal.

If you look back two years back, they were in cool so it was a different story. Now everybody is on gas whether it’s Morbi or Kajaria or anybody or Somany, all are on gas. So the moment their prices go up, they will also increase prices, so will we. So, that flexibility has come now which was not there before two years.

Achal Lohade — JM Financial — Analyst

Understood. And sir, just last question again in terms of the demand.

Ashok Kajaria — Chairman & Managing Director

I have to go also. Please I have a lot of meetings so I think we have enough discussions. Let’s have the last question from another — someone else please if you don’t mind.

Achal Lohade — JM Financial — Analyst

Thank you, sir.

Operator

Thank you. We take the last question from the line of Aasim Bharde from DAM Capital Advisors. Please go ahead.

Aasim Bharde — DAM Capital Advisors Ltd — Analyst

Yes, hi. Evening, everyone. Thanks for the opportunity. So, just wanted to understand that would Morbi as a hub continue to largely focus on exports or would they also want to target the domestic market? Because I would assume margin in the domestic market will be higher for Morbi as well and if they do want to have a mix of domestic export — if Morbi wants to have a mix of domestic and exports, how do you expect ground level dealers to react?

Would they look to Morbi as well or would they stick with larger brands? So, I presume Morbi’s balance sheet has strengthened over FY ’21 and perhaps they can be more competitive in the domestic market. So, what — any sense how dealers would react? That would be great.

Ashok Kajaria — Chairman & Managing Director

See as far as your question is concerned, let me be very honest. Morbi is catering to exports and also domestic. You can literally say as of now, literally 40% to 50% is for exports and 40% to 50% continues to be in the domestic market. It will also be like that in future. Whatever capacities are being added on, let us say 50% will go to exports and 50% will be catering to the domestic market.

See, there are certain areas even if we want an organized manufacture like Kajaria, Somany, Johnson; we cannot reach. They are able to reach whatever the reason maybe because of — cheaper or whatever it is. So looking at that, that balance will always be there and also that keeps us on our toes.

Aasim Bharde — DAM Capital Advisors Ltd — Analyst

Okay. So, I mean on the dealer level front, there would still be — even at the current juncture, there is a healthy mix of Morbi and the organized players and that balance will still continue going forward.

Ashok Kajaria — Chairman & Managing Director

Yes. But secondly, what we at Kajaria are doing, we are trying to get more exclusive dealers. In the last three years, that process started. Because of pandemic, it slowed down. The moment this thing neutralizes to a certain extent, we’ll have more exclusive showrooms. Like out of 1,700 dealers, I said 1,500 are operative. Out of that, about 300 to 350 are exclusive Kajaria showrooms which in three years we would like to take it to 600. That’s the vision of Kajaria.

Aasim Bharde — DAM Capital Advisors Ltd — Analyst

Great, sir. Okay, sir. Thanks. That was the only question I had. Thanks a lot.

Ashok Kajaria — Chairman & Managing Director

Thank you, sir. Thank you.

Operator

Thank you. Ladies and gentlemen, due to time constraint, that was the last question. I now hand the conference over to the management for closing comments. Over to you, sir.

Ashok Kajaria — Chairman & Managing Director

Thank you very much for organizing this conference, I want to thank you all the people who were there today, listened to us with lot of patience, gave us an opportunity to talk about Kajaria. I thank each and every one of the investor who was there today on behalf of myself, Chetan, and Rishi. And I thank you all.

Rishi Kajaria — Joint Managing Director

Thank you.

Chetan Kajaria — Joint Managing Director

Thank you.

Sanjeev Agarwal — Chief Financial Officer

Thank you.

Operator

[Operator Closing Remarks]