Kajaria Ceramics Ltd. (KAJARIACER) Q4 FY22 Earnings Concall Transcript

Kajaria Ceramics Ltd. (NSE: KAJARIACER) Q4 FY22 Earnings Concall dated May 17, 2022

Corporate Participants:

Aasim Bharde — DAM Capital Advisors Limited — Analyst

Ashok Kajaria — Chairman & Managing Director

Rishi Kajaria — Joint Managing Director

Chetan Kajaria — Joint Managing Director 

Pallavi Bhalla — Deputy General Manager – Investor Relations

Analysts:

Sujit Jain — ASK Investment Managers Limited — Analyst

Sonali Salgaonkar — Jefferies India — Analyst

Achal Lohade — JM Financial — Analyst

Abhishek Ghosh — DSP Mutual Fund — Analyst

Sneha Talreja — Edelweiss Securities — Analyst

Keshav Garg — Counter Cyclical Investment Private Limited — Analyst

Rajesh Ravi — HDFC Securities — Analyst

Peter Agnel — Shima Wealth Management — Analyst

Shrenik Bacchawat — LIC Mutual Fund — Analyst

Jenish Karia — Antique Stock Broking Limited — Analyst

Anik Mitra — Wallfort Research — Analyst

Mohit Agarwal — IIFL — Analyst

Ritesh Shah — Investec India — Analyst

Saumil Mehta — Kotak Life — Analyst

Sumakesh Mishra — The Carlyle Group — Analyst

Devanshu Sampat — Yes Securities — Analyst 

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the Kajaria Ceramics Limited Q4 FY ’22 Earning Conference Call Hosted by DAM Capital Advisors Limited. [Operator Instructions]

I now hand over the conference to Mr. Aasim Bharde from DM Capital. Thank you. And over to you, sir.

Aasim Bharde — DAM Capital Advisors Limited — Analyst

Hey, thanks, Ryan. Hi, and good evening all. On behalf of DAM Capital Advisors, it’s a pleasure to welcome you all on Kajaria Ceramics Q4 FY ’22 Earnings Conference Call. From the management we have Mr. Ashok Kajaria, Chairman and Managing Director; Mr. Chetan Kajaria, Joint Managing Director; Rishi Kajaria, Joint Managing Director; and Mr. Sanjeev Agarwal, CFO.

I would now hand over the floor to the management for their opening remarks. Thank you. And over to you.

Ashok Kajaria — Chairman & Managing Director

Good evening, everyone. It gives me great pleasure to welcome you to the quarter four F ’22 earnings call of Kajaria Ceramics Limited. As just said, joining me on this con call are my sons Chetan and Rishi, our CFO Sanjeev, and Pallavi Bhalla from Investor Relations. All of us sincerely hope that you and your family are safe and healthy.

I would have liked to meet you and address you in-person as we do each year, but the current unprecedented circumstances have compelled us to use this format. Financial year ’21, ’22 was a year of revival for Indian economy from COVID-induced disruptions. The country made rapid progress in vaccination and closed the year with the majority of the adult population vaccinated with both doses.

For Kajaria, the fourth quarter was the best quarter ever in terms of both volume and value. We cropped the highest ever sales volume of 25.97 million square meters in quarter four and 91.65 million square meter for the year without addition of any new capacities. We achieved the highest quarterly and annual turnover of INR1,102 crores and INR3,705 crores respectively despite tremendous disruption faced during the year.

F ’22 — ’21, ’22 was tremendously challenging in terms of cost pressure for the industry as well as for Kajaria. Back in July-August energy crisis started, resulting in supply shortages and huge spikes in fuel costs. Net, there were spikes in paper prices, freight costs etc. And then the disruption due to current inflationary challenges resulting from the geopolitical tensions in the Russia-Ukraine region. However, despite these headwinds, we have managed to keep our business on track and continue to build confidence with our customers. Though the rising gas prices and commodity cost inflation pose a near-term pressure on operating margins, our price hikes, around 2% from 1st of May will partially mitigate these cost pressures.

Today, India is among the fastest growing ceramic tile market, especially for branded players. This momentum is likely to continue given the ongoing recovery of the real estate sector and increased spending on home and workspace beautification and appearance. Thus we see accelerated traction not just from new projects, but also from increased application of tiles in replacement and renovation projects. In fact, we expect strong momentum from the replacement market going forward. We remain optimistic about the future and expect the next financial year to be a strong year for the company.

Now for this quarter’s performance. In quarter four F ’22, consolidated revenue from operations increased by 16% year-on-year to INR1,102 crores from INR953 crores in quarter four F ’21. Revenue from the Bathware segment grew by 16% from INR71 crores to INR83 crores in quarter four. Currently, our monthly sales run rate is more than INR30 crores for this segment.

Revenue from the Plywood segment grew by 25% from INR15 crores to INR19 crores in quarter four. In the quarter, power and fuel costs have gone up by INR82 crores as compared to the corresponding quarter of the last financial year, which has impacted the EBITDA margins. EBITDA margins for this quarter stood at 15.06% as compared to — as compared to 20.04% in the corresponding quarter of the previous year. Consolidated PAT in quarter four is INR96 crores. As of 31st of March, ’22, working capital days have marginally increased by two days to 52 days as compared to 50 days as on 31st of March, ’21.

Let me now provide an update on our ongoing expansion plans. We have commenced commercial production at our Jaxx Plant in Morbi in April ’22. The other two expansion projects at Gailpur and SriKalahasti has also been commission in this month. In the previous quarter, we had announced the organic expansion of 5 million square meters of slab manufacturing capacity in Gujarat with plant investment of INR210 crores. Today, the board has decided to withdraw the proposed investment as project has become less viable due to steep rise in gas prices of natural gas and inconsistency in gas supply at Morbi.

With this, I think this opportunity to thank you, taking your time out and for joining us today. Over to you.

Aasim Bharde — DAM Capital Advisors Limited — Analyst

Ryan, you can start the questions.

Questions and Answers:

Operator

Sure. Thank you very much. [Operator Instructions] Our first question comes from the line of Sujit Jain with ASK Investment Managers Limited. Please go ahead, sir.

Sujit Jain — ASK Investment Managers Limited — Analyst

Ashokji, one question on the average gas price for the quarter. And you can give the average gas price for the base quarter as well.

Ashok Kajaria — Chairman & Managing Director

The average gas price for the quarter four was about INR49.79. And for the current quarter, it is about INR50.30.

Sujit Jain — ASK Investment Managers Limited — Analyst

Right. And this 2% price hike that you’ve taken post-May, does that now fully cover the price hikes that should have been taken for FY ’22?

Ashok Kajaria — Chairman & Managing Director

Not necessarily, because gas situation, you must understand, as you might be interacting with other industries. First of all, the supply is uncertain, but there was a gas cut in Morbi by 30%, gas cut in north is to the extent of 10% and the prices are very erratic, and nobody can say at this stage what the gas prices will be next month on month after. So looking at that, whatever we can do under the current circumstances, we are doing.

Sujit Jain — ASK Investment Managers Limited — Analyst

Right. And in terms of our growth guidance, 14%, 15% kind of growth in tile, does that continue?

Ashok Kajaria — Chairman & Managing Director

We are looking at 15% to 20% volume growth for the year ’22, ’23 and a revenue growth of about 20% to 25%.

Sujit Jain — ASK Investment Managers Limited — Analyst

And our medium term target also 15% to 20% in revenue growth?

Ashok Kajaria — Chairman & Managing Director

What’s that?

Sujit Jain — ASK Investment Managers Limited — Analyst

About three years’ target that you used to give?

Ashok Kajaria — Chairman & Managing Director

No, no. What we are saying today, situation has improved better as we have just completed three expansions. So looking at that, we are seeing — and we — as I said in my earlier at this thing that this growth has come with no expansion. All three expansions have been completed. So with this, we are looking at 15% to 20% volume growth for the year ’22, ’23 and 20% to 25% revenue growth. Revenue growth is because prices have already increased in the later half of the year last year. So that will be reflected in the revenue.

Sujit Jain — ASK Investment Managers Limited — Analyst

Right. And one last question. Your estimated market size and export size in FY ’22 for the entire industry?

Ashok Kajaria — Chairman & Managing Director

For Kajaria?

Sujit Jain — ASK Investment Managers Limited — Analyst

For the industry, sir.

Ashok Kajaria — Chairman & Managing Director

Industry’s size for ’21, ’22, the domestic market is close to about INR21,000 crores and export has been to the extent of INR12,700 crores.

Sujit Jain — ASK Investment Managers Limited — Analyst

Sure. That is helpful. Thank you, and all the best.

Ashok Kajaria — Chairman & Managing Director

Thank you.

Operator

Thank you. Our next question comes from the line of Sonali Salgaonkar with Jefferies India. Please go ahead.

Sonali Salgaonkar — Jefferies India — Analyst

Sir, thank you for the opportunity. Sir, my first question is regarding your price hikes for the entire year FY ’22. Could you help us with an approximate range of your price hikes, cumulative price hikes in tiles, bathware and sanitary ware as well?

Ashok Kajaria — Chairman & Managing Director

You see, in tiles, the average price hike for the year started from April, July then October then November was about 10%. The cumulative effect is about 10%. For sanitary ware, the price hike last year financial year was to the extent of about 15%. And for the bath fittings, it was close to about 12% to 13% roughly.

Sonali Salgaonkar — Jefferies India — Analyst

Got it, sir. Sir, my second question is regarding Morbi exports. You told us that the export market currently in FY ’22 is about INR12,700 crores. What was it in FY ’21? And currently, do you think that there is a impending risk that Morbi which used to export about 45%, 50% of their production, could start targeting domestic market?

Ashok Kajaria — Chairman & Managing Director

See, two, three things have happened. First, the year ’21, the export was about INR12,000 crores. Last year there were disruptions to that. And mainly because of the freight cost going up, exports didn’t go much. It was about INR12,700 crores. This year, as you all might be aware, the costs in Europe have gone up slightly high. The cost of electricity has gone up by 300% in Italy and Spain. The cost of gas has gone up by 400% in Italy and Spain. There costs have gone up like anything. Similarly in China, they have — the gas costs have gone up by 150%.

In the current scenario, the exports look very, very promising from Morbi. My personal estimate is that this year against INR12,700 crores, they should end up with INR17,000 to INR18,000 crores of exports, because the export market has really opened up with their costs going up, in India, costs not going up that much. Costs have definitely gone up, as we are aware. Costs not going up as much, the exports will pick up from INR12,700 crores to close to INR17,000 crores, INR18,000 crores.

Sonali Salgaonkar — Jefferies India — Analyst

Got it. Sir, currently what production of Morbi is being exported?

Ashok Kajaria — Chairman & Managing Director

That is very hard to say, because you see, the gas prices keep on changing. But this year, definitely, they should export at least 30%, 35% of their production is exports, maybe 40% — 45%, 50%. Their main focus is exports. So they are trying to export as much as they can.

Sonali Salgaonkar — Jefferies India — Analyst

Okay. And you don’t foresee any risk that they will start a price war in the domestic market?

Ashok Kajaria — Chairman & Managing Director

Not at all. Not at all. It’s not easy to suddenly switch markets from export, go to domestic. It is not easy. So they’ll be — they are happy exporting and they are going to increase their market share there.

Sonali Salgaonkar — Jefferies India — Analyst

Sure. Sir, my last question is regarding your guidance for capex. You mentioned that you have withdrawn one of your projects in Gujarat. So what is the revised guidance for FY ’23?

Rishi Kajaria — Joint Managing Director

So this is Rishi Kajaria. So the reason we withdrew this plant was that because of the high cost of gas and erratic supply of gas, we said we’ll defer the plant. We have not — we don’t expand right now. We’re going to outsource and we are also — we just put our latest plant in South of India for the same big tiles. So we’re going to move from there.

Sonali Salgaonkar — Jefferies India — Analyst

Sure. Thank you.

Operator

Thank you. Our next question comes from the line of Achal Lohade with JM Financial. Please go ahead.

Achal Lohade — JM Financial — Analyst

Yeah. Good afternoon, sir. Thank you for the opportunity. Sir, can you help me with the gas cost for the full year FY ’22 and FY ’21? If you could also split in terms of North, West and South, please?

Ashok Kajaria — Chairman & Managing Director

The full year gas cost is INR42.21 for Kajaria for FY ’22.

Achal Lohade — JM Financial — Analyst

Would it be possible to split in North, South and West, sir?

Ashok Kajaria — Chairman & Managing Director

North is close to about INR41. South is close to about INR44. And West is INR49.

Achal Lohade — JM Financial — Analyst

Understood. And at this point in time, what would these prices be — cost will be? You said blended INR49 — sorry, INR50 something. If you could give the cost at this point in time?

Ashok Kajaria — Chairman & Managing Director

As of now, North is about INR52, South is INR59 and West is of course INR68.5, which is a GSPC prices.

Achal Lohade — JM Financial — Analyst

Got it. And in terms of the margin guidance, you talked about 20% — 15% to 20% volume growth. Would it be possible to give any color on the margin guidance?

Ashok Kajaria — Chairman & Managing Director

Margin, it will be very difficult to say at this stage. The biggest factor is, costs have gone up everywhere in gas, paper, transport. Right now, it’s very difficult. And I personally feel at this stage it’s too early to guide the margins. Let things settle down and lot of things will automatically come out with the numbers which we are talking about. We are talking about 15% to 20% volume growth, 20% to 25% revenue growth. I think lot of things will come out from there.

There is no extra manpower addition because whatever the people are there, they are there. So with this, some traction will come out of there. But one sector we are not able to say anything at this stage is the cost of gas. But internationally, just for your information, prices of gas have come down. It was as high as $33 two months back, because spot market, the gas have come down to about $21. That change has already happened.

Achal Lohade — JM Financial — Analyst

Understood. And just last question, sir. In terms of the momentum, so if we see, for the quarter it is about 2% growth Y-o- Y in terms of the tiles sales volume, while we are talking about 15%, 20%. Is it possible to get some color given Jan-Feb was impacted? How has been the March exit?

Ashok Kajaria — Chairman & Managing Director

See, one thing is for sure that you can’t compare it quarter-to-quarter. Some quarters are very, very good in the earlier year. When you — if you start comparing, like in the first quarter of this financial year, the volume growth could be as high as 50% because the last quarter there was a pandemic. The entire India was in this COVID. So that is not the way to do it. The correct way to do it compare to year-to-year.

Achal Lohade — JM Financial — Analyst

All right, sir. Thank you so much, and wish you all the best.

Ashok Kajaria — Chairman & Managing Director

Thank you.

Operator

Thank you. Our next question comes from the line of Abhishek Ghosh of DSP Mutual Fund. Please go ahead.

Abhishek Ghosh — DSP Mutual Fund — Analyst

Yeah. Hi, sir. Thank you so much for the opportunity. Couple of questions. You mentioned about a price hike from 1st of May of about 2%. When was the last price hike taken before that, sir?

Rishi Kajaria — Joint Managing Director

The last price hike was taken in November end, which was roughly 4% to 5%.

Abhishek Ghosh — DSP Mutual Fund — Analyst

Okay. So Rishi, just to understand one thing because we have been looking at inflation across every line item, be it freight, paper, everything. And if you also see the cost of gas differential between your own plants, vis-a-vis Morbi is fairly high. So the price hikes were not initiated because that would have impacted demand. How should we look at it in terms of the competitive intensity scenario?

Ashok Kajaria — Chairman & Managing Director

See, price hike is what the market determines. It’s not [Technical Issue] not taken, we should not take. Number one. My cost of North have also gone up. The gas prices, if you see the numbers, which I have given you, they have gone up drastically in the period of one year. Last year at this time, quarter four ’21, the prices of gas was INR29 at Gailpur. Now in quarter four F ’22, it went up to INR49. So you see, it’s a question of which plant had to take a price hike. There is no general thing that I have to take it across plants. It’s a question of where my costs are going up, and I have to see that in what prices we can sell in those markets.

Abhishek Ghosh — DSP Mutual Fund — Analyst

Okay, okay. And sir, as you mentioned that gas prices have started to soften, and we also hear that Gujarat Gas has also removed that supply cut. Sir, at some point, will you again reconsider if these things were to sustain in terms of the slab plant or will you keep outsourcing and source it from southern plant only more in the medium term?

Rishi Kajaria — Joint Managing Director

So right now, the plant is not in the cards. Right now we’re going to outsource from Gujarat or mostly supply from a south plant. And in outset, we’ll assess again, reassess again after six to eight months.

Abhishek Ghosh — DSP Mutual Fund — Analyst

Okay, okay.

Ashok Kajaria — Chairman & Managing Director

And the prices have gone up. They have put 100%, but the prices have gone up by INR5, don’t forget that.

Abhishek Ghosh — DSP Mutual Fund — Analyst

Correct. Okay. So it’s also a matter of cost and supply both. So whenever you think reversing, then will you take a call after six months is what the understanding is, right?

Rishi Kajaria — Joint Managing Director

Correct.

Abhishek Ghosh — DSP Mutual Fund — Analyst

Okay. And sir, just two other quick things. In terms of the sanitary ware where you’re putting about almost INR80 crores with about 8 lakhs per annum of pieces, what would be the broad peak revenues that can come out of that?

Rishi Kajaria — Joint Managing Director

Revenue will be around INR175 crores to INR190 crores.

Abhishek Ghosh — DSP Mutual Fund — Analyst

Okay. So about 2 times, 2.5 times, etc. one should work with?

Rishi Kajaria — Joint Managing Director

Correct, correct.

Abhishek Ghosh — DSP Mutual Fund — Analyst

Okay. And just one last thing. Here channel checks are suggesting that April given the inflation and other things post-March has been a slowdown for most of the building material product. Is it — are you seeing that for tiles business?

Rishi Kajaria — Joint Managing Director

We’ve been okay. It was a decent month for us. We are not seeing a slowdown.

Abhishek Ghosh — DSP Mutual Fund — Analyst

Okay, great. Thank you so much for answering my questions, and wish you all the best. Thank you.

Operator

Thank you. Our next question comes from the line of Sneha Talreja with Edelweiss Securities. Please go ahead.

Sneha Talreja — Edelweiss Securities — Analyst

Thanks a lot for the opportunity. Just two questions from my end. Firstly, I just wanted to understand, what would be the current run rate of the slab plant that we must be doing, an approximate percentage figure in terms of overall revenues just to get a sense that how much would be outsourcing and how much are we getting it from the South plant?

Rishi Kajaria — Joint Managing Director

It’s a very, very small number, a small percentage of our entire sales. So our plant is just starting out. And we just commenced commercial production on 16th of May, that was yesterday. So let the material come out, then we’ll take a call. But it’s too early to say. We’re just starting it.

Sneha Talreja — Edelweiss Securities — Analyst

How much now we’ve been outsourcing?

Rishi Kajaria — Joint Managing Director

Little bit. Little bit.

Sneha Talreja — Edelweiss Securities — Analyst

Okay. Got that. And secondly, just wanted to understand about the margins, sir. You highlighted couple of things apart from power and fuel cost going higher, I think paper prices, freight prices. Any of those costs have normalized? And just focusing price hikes takes care of what proportion of the price increase? Any sense on that so that we get to know what could be the margin run rate going ahead?

Ashok Kajaria — Chairman & Managing Director

Margin run rate I can’t tell you right now, as I said earlier. But if you look at the overall cost in this particular financial year starting from April, the cost would have — should have gone up by about 3%, 3.5% taking into account the difference between quarter four of last year, that means the year just ended, and quarter one of this year. But with this 2%, we cover part, we are not covering fully. And as we go forward, we will see how the gas price will behave, because the main factor would be the gas prices. Paper prices which have gone up are now stable right now, it has not come down. And freight costs had normalized because there were freight increase because of this Kisan Andolan and all that. So that is normalized. But whatever the diesel cost has gone up, the freight has gone up.

Sneha Talreja — Edelweiss Securities — Analyst

Understood, sir. That was helpful. Sir, last one. Any flavor on the demand in terms of Tier 2, Tier 3 cities, how is it going? Your sense on the new versus the replacement demand that which one is picking up more? Are we seeing good amount of demand from the project side? I mean, some flavor there on the demand front.

Chetan Kajaria — Joint Managing Director

Hi. This is Chetan Kajaria. So we are seeing the ongoing recovery in the real estate sector and increased spending on home and workspace beautification and appearance. Also we see accelerated traction, not just from new projects, especially in smaller towns and cities, but also increased application of tiles in replacement and renovation projects. In fact, we expect very strong momentum from the smaller cities, Tier 3 and below going forward.

The example — a couple of examples for sharing with you. One of a dealers in Bihar wants to open a 16,000 square feet showroom. Similarly, a dealer in Rayya, which is a Amritsar — near Amritsar, wants to open a 38,000 square feet showroom. This shows the latent demand in these smaller cities whether demand will come from in the coming future. I hope that answered your question?

Sneha Talreja — Edelweiss Securities — Analyst

Yes, it does. Thanks. So largely from the Tier 3, Tier 4 cities driving an applications that you’re seeing from the tiles piece that’s driving?

Ashok Kajaria — Chairman & Managing Director

No. Next three years, the demand will come from Tier 3 and Tier 4 cities. That’s what Chetan was trying to convey. That yearly action would be in the next three to four years.

Sneha Talreja — Edelweiss Securities — Analyst

Understood, sir. That was really helpful. Thanks, sir.

Operator

Thank you. Our next question comes from the line of Keshav Garg with CCIPL. Please go ahead.

Keshav Garg — Counter Cyclical Investment Private Limited — Analyst

Sir, again on the question of gas prices, if I heard correctly, you mentioned that through 1Q our gas prices have [Indecipherable] INR49.79 to INR50.3. So sir, that’s a very marginal increase, whereas if we see the newspapers are announcing that the government has doubled the administered price of gas to $6.1 MMBtu and further from 1 October, it is further expected to increase to $9 something per MMBtu. So sir, in that case, how come our gas prices…

Ashok Kajaria — Chairman & Managing Director

My dear friend, we are not getting that gas. That gas is not available to people like Kajaria and other manufacturers. That is for fertilizer power and other sectors. The gas, which we are buying today is paying — the price which you are paying is much, much higher than what you are talking about.

Keshav Garg — Counter Cyclical Investment Private Limited — Analyst

Sir, so I get your point that you are not getting administered priced gas, but the market price of gas itself has shot up even more in the international markets. So I mean, then how come our gas prices are so marginal increase?

Ashok Kajaria — Chairman & Managing Director

It’s not marginal increase. I think you didn’t listen. I just shared the quarter four of 2021, my gas prices were INR29 supplied by GAIL per SCM. And today in the next — a year later, in the same quarter, I’m paying INR49. It is 70% price increase in one year.

Keshav Garg — Counter Cyclical Investment Private Limited — Analyst

I get that, but…

Ashok Kajaria — Chairman & Managing Director

It is at the peak. Prices were — look, Morbi prices were INR36 on 24th of August. It went up to INR40 on 24th of August. It went up to INR50 on 4th of October. It went up to INR63 on 1st of November. And now it has gone up to INR68. That means in a space of nine months, the prices have gone up from INR36 to INR68, It’s than 85%. Who is saying it is cheaper.

Keshav Garg — Counter Cyclical Investment Private Limited — Analyst

Sure, sir. Sir, I get your point totally sir that throughout last financial year prices have been going up. Sir, but my point is that quarter-on-quarter, have the gas prices in the spot market not increased further? Q-on-Q, I’m talking about. Q1 of this year that we are currently in versus last quarter.

Ashok Kajaria — Chairman & Managing Director

See, quarter three, the average gas price was INR46.5. Quarter four, the average gas prices were about INR50. And this quarter, the prices will be close to about INR52 or INR53. That’s what it is.

Keshav Garg — Counter Cyclical Investment Private Limited — Analyst

Sir, and you are mentioning that you are also not sure about the supply of gas. So in case, we are not able to obtain the gas that is required, is there any alternate…

Ashok Kajaria — Chairman & Managing Director

That doesn’t apply to me. Why you put such a question. That doesn’t apply — that applies to every single person in the country. If there were continues there is a problem, it will apply to every single person. Why this kind of a question.

Keshav Garg — Counter Cyclical Investment Private Limited — Analyst

Sir, and lastly, wanted to get a broad idea that our cost of gas, sir, how does it compare with the other major tile manufacturers? Sir, where do we fall on the higher side or the lower side?

Ashok Kajaria — Chairman & Managing Director

Our cost is lower side because we are getting north prices which are lower.

Keshav Garg — Counter Cyclical Investment Private Limited — Analyst

Okay, sir. Thank you very much, and best of luck.

Ashok Kajaria — Chairman & Managing Director

Thank you.

Operator

Thank you. Our next question comes from the line of Rajesh Ravi with HDFC Securities. Please go ahead.

Rajesh Ravi — HDFC Securities — Analyst

Yeah. Hi, sir. Am I audible?

Ashok Kajaria — Chairman & Managing Director

Yeah.

Rajesh Ravi — HDFC Securities — Analyst

Yeah. Sir, on the gas prices again, if we sort of give the break-up which you gave for Q1 FY ’23, for Q4 and Q3, what was the price across all the three regions; North, South and West, please? INR49 you said is for North. South and West in Q4, how are they?

Ashok Kajaria — Chairman & Managing Director

Q4, the North was INR45.5.

Rajesh Ravi — HDFC Securities — Analyst

INR45.5, okay.

Ashok Kajaria — Chairman & Managing Director

South was INR50. And West, of course, was INR62 because it is a GSPC only.

Rajesh Ravi — HDFC Securities — Analyst

Okay. And this Q3, how were the numbers?

Ashok Kajaria — Chairman & Managing Director

Q3, the North was INR43, South was INR55.5 and West was INR58.17 on average because the prices went up from 1st of November.

Rajesh Ravi — HDFC Securities — Analyst

Okay. And for FY ’21, could you share these break-ups, please? You gave for FY ’22 average.

Ashok Kajaria — Chairman & Managing Director

FY ’21 full year?

Rajesh Ravi — HDFC Securities — Analyst

Yeah, full year.

Ashok Kajaria — Chairman & Managing Director

North was INR26, West was INR28.5 and South was close to about INR12.5.

Rajesh Ravi — HDFC Securities — Analyst

INR12.5. Now it’s INR60?

Ashok Kajaria — Chairman & Managing Director

Yes. Srikalahasti [Foreign Speech]

Rajesh Ravi — HDFC Securities — Analyst

Okay. And sir, now given that we have just — from 1st of May, we have been able to take a 2% price increase. And given that on a quarter-on-quarter basis, it is a 7%, 8% jump in the average fuel cost and energy cost, how do you look at the margins sequentially? Because even in the…

Ashok Kajaria — Chairman & Managing Director

Please, don’t repeat this question. As I already said, margins we can’t comment at this stage.

Rajesh Ravi — HDFC Securities — Analyst

No, no. I’m not saying — you are right. You cannot comment. But I’m saying, are you already seeing pressure on a sequential basis on the margins which has already come up to…

Ashok Kajaria — Chairman & Managing Director

How return and how gas prices will behave, it is not in my hands today. What I can do I can do. What I cannot do I cannot do. Don’t ask me do something which I cannot do.

Rajesh Ravi — HDFC Securities — Analyst

Correct, correct. And given that your own production have now got commissioned, do you see that would improve — that would lead to better margins what you have in your outsourced laminate?

Ashok Kajaria — Chairman & Managing Director

It should. It should.

Rajesh Ravi — HDFC Securities — Analyst

Okay. And sir, this sanitary expansion, what is the timing for that, that Kerovit?

Rishi Kajaria — Joint Managing Director

What’s that?

Ashok Kajaria — Chairman & Managing Director

Sanitary ware expansion will take about 15 months from here on.

Rajesh Ravi — HDFC Securities — Analyst

15 months. So somewhere FY ’24 second half we will have this plant ready?

Ashok Kajaria — Chairman & Managing Director

July ’23, we should start commercial production.

Rajesh Ravi — HDFC Securities — Analyst

Okay. Great, sir. I’ll come back in queue. Thank you.

Operator

Thank you. Our next question comes from the line of Peter Agnel with Shima [Phonetic] Wealth Management. Please go ahead.

Peter Agnel — Shima Wealth Management — Analyst

Good evening, sir. Sir, my first question is that what will — can you please shed some light on what is the raw material basket cost this quarter and this full year? And at what raw material basket cost is it comfortable to maintain close to 18% margins according to you?

Ashok Kajaria — Chairman & Managing Director

No. First of all, let’s don’t [Foreign Speech] don’t put questions about 18% margin. I just said that margins we are not able to comment on. Why are you putting that [Foreign Speech] 18% margin. Number one. Number two…

Peter Agnel — Shima Wealth Management — Analyst

I’m sorry, sir.

Ashok Kajaria — Chairman & Managing Director

No, no. Number two, as far as raw material costs are concerned, raw material costs more or less are in line with what was in 2021 and ’21 and ’22 except some increase in freight when raw material is concerned because of the increase in the diesel cost and all that. And secondly, I also said that packing costs have gone up. The paper costs have gone up. As a result, cost of boxes have gone up drastically. That’s a 16% impact from that point of view on the cost of boxes.

Peter Agnel — Shima Wealth Management — Analyst

And sir, my next question is that, in the previous call it was mentioned that in order to maintain the 15% plus volume growth, INR300 crores of capex for the next three years would be planned. So…

Ashok Kajaria — Chairman & Managing Director

No, I didn’t say that. I said, every year it will be like that. Every year it will be close to INR300 crores of capex. That’s what I said.

Peter Agnel — Shima Wealth Management — Analyst

Yeah, yeah. So consider every year INR300 crores capex for the next…

Ashok Kajaria — Chairman & Managing Director

Close to that. Close to that, yes. This year we are already — we have already spent INR250 crores, INR260 crores of capex in the three expansions.

Peter Agnel — Shima Wealth Management — Analyst

Sir, just wanted to confirm that same thing what you mentioned last time is continuing?

Ashok Kajaria — Chairman & Managing Director

Yeah, yeah. It is there.

Peter Agnel — Shima Wealth Management — Analyst

And sir, my final question is that, sir, in terms of — we are seeing that there is some new store openings, you shared some data on some newer dealers wanting to expand their stores. But any other key market share gaining strategies being adopted by you?

Ashok Kajaria — Chairman & Managing Director

No. The simple thing is, if Kajaria has to grow at 15% to 20% in volume terms in the year which we are talking about and 15% plus for the next two years, we have to have our dealer additions. We are talking about adding close to 400 dealers in the next three years. And most of them will be, out of 400 you can say about 170 will be or 175 will be exclusive dealers of Kajaria. It could be a division, which is — it could be a dealer who is working in two divisions, it could be a dealer who is working all the three divisions, it could be dealer exclusively in one division. But definitely, it will be exclusive Kajaria, at least 170 to 175 dealers out of 400.

Peter Agnel — Shima Wealth Management — Analyst

Okay. That is very helpful. Thank you, sir.

Ashok Kajaria — Chairman & Managing Director

Thank you.

Operator

Thank you. Our next question comes from the line of Shrenik Bacchawat with LIC Mutual Fund. Please go ahead.

Shrenik Bacchawat — LIC Mutual Fund — Analyst

Hi, sir. Thanks for the opportunity. Sir, my first question is, what will be the cumulative price hike in the Tile segment that we have taken in the last one year versus the unorganized players, how much they have taken?

Ashok Kajaria — Chairman & Managing Director

Say it again, please. Can you repeat…

Shrenik Bacchawat — LIC Mutual Fund — Analyst

Hello?

Ashok Kajaria — Chairman & Managing Director

Yes. Please repeat your question.

Shrenik Bacchawat — LIC Mutual Fund — Analyst

Yeah. My first question is sir, what is the cumulative price hike that you have taken in the last one year? And what could that be for the Morbi unorganized players? So I’m trying to understand has the price difference reduced over the last one year?

Ashok Kajaria — Chairman & Managing Director

We at Kajaria have taken about 10% price hike cumulative for the whole year. As far as Morbi is concerned, we are not aware what they have done because that you have to find out.

Shrenik Bacchawat — LIC Mutual Fund — Analyst

Okay. And sir, can you please throw some light on how our Bathware business is progressing? And how is the industry behaving on that side? And what is the growth that we can expect in the Bathware segment for the next three years?

Ashok Kajaria — Chairman & Managing Director

No, I just shared it. See, three years is very difficult in the current situation of gas uncertainty because people are very distributed at Morbi more disturbed than here. And three year scenario is very tough, but we can share that the coming year it should be — we are — last year they did exports of about INR12,700 crores. I personally feel, the export should be as high as INR17,000 crores to INR18,000 crores this year because of the cost increase in Europe, Spain and Italy and China as well, big cost increase. As far as the domestic is concerned, last year was about INR21,000 crores. And if all goes well, it should be close to about INR23,000 crores.

Shrenik Bacchawat — LIC Mutual Fund — Analyst

Sir, my question was regarding the Bathware business of Kajaria.

Ashok Kajaria — Chairman & Managing Director

I’ll tell you. Bathware, we’re looking about 30% to 35% volume growth in the next — volume and turnover growth in next three years. Every year, we’re looking at 30% to 35% growth in turnover. Like this year — from this year we did INR210 crores to INR235 crores, which is about 30% to 35% growth. We’re going to maintain the same growth in the next three years, cumulative every year.

Shrenik Bacchawat — LIC Mutual Fund — Analyst

And sir, on SKU front, are we in line with the large bathware players in India?

Ashok Kajaria — Chairman & Managing Director

Absolutely. We have all the products and we have all the product lines which other people have as well.

Shrenik Bacchawat — LIC Mutual Fund — Analyst

Sure, sir. Thanks so much.

Operator

Thank you. Our next question comes from the line of Jenish Karia with Antique Stock Broking Limited. Please go ahead.

Jenish Karia — Antique Stock Broking Limited — Analyst

Yeah. Thank you for the opportunity. So first question is what capacity utilization rate can we expect going forward? Hello?

Rishi Kajaria — Joint Managing Director

Going forward, we will tie optimum capacity utilization as then keep on going forward.

Jenish Karia — Antique Stock Broking Limited — Analyst

Okay, okay.

Ashok Kajaria — Chairman & Managing Director

Close to 95%, 96%.

Jenish Karia — Antique Stock Broking Limited — Analyst

Okay. Got it. And just one thing. I see again for the quarter, the depreciation charge has gone up, but there is only increase in capital work in progress and not the net loss. So is that the run rate we should be expecting going forward for depreciation?

Pallavi Bhalla — Deputy General Manager – Investor Relations

Hi. Pallavi at this line. We don’t see this is going to be the run rate going forward. This is one of the case. We have charged a little higher depreciation in view of the assets as required. But this is not going to be the run rate.

Jenish Karia — Antique Stock Broking Limited — Analyst

Okay, okay. So are they write-offs or it’s just because there is a change in depreciation policy?

Pallavi Bhalla — Deputy General Manager – Investor Relations

No, write-offs, there are just few assets where we need to charge a little higher depreciation. And that’s — this rate will change obviously because we have commissioned three plants and you will get new depreciation from April onwards because of the commissioning of the new plants. So this is not going to be the run rate.

Jenish Karia — Antique Stock Broking Limited — Analyst

Okay, okay. Got it. Thank you. That’s all for me.

Operator

Thank you. [Operator Instructions] Our next question comes from the line of Anik Mitra with Wallfort Research. Please go ahead.

Anik Mitra — Wallfort Research — Analyst

Good evening, sir. Am I audible?

Ashok Kajaria — Chairman & Managing Director

Yeah.

Anik Mitra — Wallfort Research — Analyst

Sir, can you throw some light on the sanitary ware market? Like, do you find any headwind for like sanitary ware manufacturers, especially for unorganized players?

Rishi Kajaria — Joint Managing Director

We didn’t understand your question. Can you just repeat what are you exactly asking?

Anik Mitra — Wallfort Research — Analyst

Yeah, sure. Can you throw some light on sanitary ware market situation currently? Like, is there any headwind for unorganized player in this particular segment?

Rishi Kajaria — Joint Managing Director

So sanitary market is a lot of demand and that is the reason why we are expanding and putting up a very high end plant because you’re getting that market — demand from the market. We are not able to outsource much because the products are selling well even from the unorganized market. So that’s the reason. So there’s a lot of demand happening and that’s the reason for our expansion.

Anik Mitra — Wallfort Research — Analyst

Okay. So like can you give a rough number like how much is the unorganized market of sanitary ware?

Rishi Kajaria — Joint Managing Director

Sanitary ware is a very unorganized market. I think overall the entire market size, 60% — 50%, 60% would be unorganized and 50% would be organized.

Anik Mitra — Wallfort Research — Analyst

Okay, okay. And one small question regarding gas prices. I came across that in Q4 FY ’22, one of the manufacturers not based out of Morbi, but obviously based out of Gujarat, they are saying that they are getting gas prices of INR13, INR13 something per MMBtu from GAIL. So I just wanted to understand, is there any special arrangement like where GAIL is giving much lower than market prices to some of the manufacturers, some of the players?

Ashok Kajaria — Chairman & Managing Director

Good luck to him and good luck to you for this information.

Anik Mitra — Wallfort Research — Analyst

Okay, sir. Okay, I got your point. Thank you.

Operator

Thank you. Our next question comes from the line of Mohit Agarwal with IIFL. Please go ahead.

Mohit Agarwal — IIFL — Analyst

Yeah, thanks. Sir, my question is on demand. So you’ve been mentioning that real estate is doing quite well. Sir, I wanted to understand this 15% to 20% growth in ’23. Is it going to come largely from the retail side or real estate project sales also will be a big focus? And if you could share what is the current share of project sales to developers in your sales mix?

Chetan Kajaria — Joint Managing Director

Hi. This is Chetan Kajaria. So majority demand will come from retail sales. A normal split is 75% retail, 25% projects. So we are focusing on building more showrooms, as CMD said, and more exclusive showrooms also. So that’s the split of our retail to project sales.

Rishi Kajaria — Joint Managing Director

And just to add to that, the demand is coming from everywhere. Now the real estate projects are also happening, government projects are also happening. So if you — as we are looking at 15% to 20% volume growth, we have to cater to all the segments.

Mohit Agarwal — IIFL — Analyst

Okay. So broadly the mix will remain same over ’23 as well?

Chetan Kajaria — Joint Managing Director

Yeah.

Mohit Agarwal — IIFL — Analyst

Okay, sure. That’s all from my side.

Operator

Thank you. Our next question comes from the line of Ritesh Shah with Investec. Please go ahead.

Ritesh Shah — Investec India — Analyst

Hi, sir. Thanks for the opportunity. Sir, my first question is, we have a agitated [Phonetic] guidance on volume growth. Rightfully so, we have not given any guidance on margins because of gas pricing volatility. But sir, how do you think of balancing volume growth versus margins? It’s a bit of a philosophical question, but just trying to understand the thought process, sir.

Ashok Kajaria — Chairman & Managing Director

First of all, there will be a very good balance between the volume sales and the margins. Right now, we are not able to answer. I could have answered this question of margin. But right now, because of uncertainty of — absolute uncertainty of gas prices, we are not able to answer that. I’m sure next time when we meet after three months, lot of answers will be there and we will know exactly what is happening.

But yes, one information I must share which I said earlier, but I wish to share again. The gas prices a month and a half back was close to $33 in this spot market. Today, the prices have come down in the international market to $21. That means the scenario is improving. If scenario improves, definitely, people like GAIL, people like GSPC, everybody will bring — or Indian Oil, they will try to find better opportunities and try to bring the prices up. If the prices come down, it will definitely not only benefit Kajaria, it will benefit the entire industry.

So I think we should wait for three months — two, three months when we meet next. We’ll have lot of answers in this because this is a very difficult time, so we are not able to give you the right answers. But definitely, you would see that gas prices have to ease because lot of developments have happened, people are trying to explore more options. So things should ease. But only thing once can tell you with confidence that at Kajaria, we will do this 15% to 20% growth with the three new expansions coming up.

Ritesh Shah — Investec India — Analyst

Sure. Sure, sir. Sir, my second question is, you did indicate the withdrawal of this INR210 crores pertaining to snap — highlighting economics, right? How different would it be for say GBT [Indecipherable] Ceramics? I understand, slab is something which is a niche product? Is it entirely contingent to the product category that we are looking at or does it also put at question the wider economics for any incremental capacity which are actually coming up in Morbi?

Rishi Kajaria — Joint Managing Director

Ritesh, I’ll answer this question. Basically this plant we were putting to feed all over India for this slab plant, but then looking at the gas prices and the erratic gas supply, we said, let us — we have just completed expansion in our Tirupati plant and this is the latest technology from Italy called CONTINUA+ and we are the only plant in India — sorry, South of India to have this technology. So we thought that let this plant start, let us start feeding the North and the western markets from this plant. And as we go along, we’ll take a call. So that’s why we have deferred the expansion as of now. This year, I think we will continue without it. Later, we’ll see how, we’ll take a call later.

Ritesh Shah — Investec India — Analyst

Correct. Sir, what I’m trying to understand is if a company like Kajaria withdraws it, which is a good thing, what happens to the smaller players in Morbi given their cost curve will be something similar? We have balance sheet brand, working capital, everything on our side. Does it mean that there is evident shift which will happen when it comes to volumes which will come to the larger guys like Kajaria?

Rishi Kajaria — Joint Managing Director

No, you’re not getting it right. I think it’s more of a strategic goal. We are not saying the volume — there will be a volume pressure or something, it’s more of a strategic call that we don’t want to invest so much money in Morbi right now. We want to see how the South plant is, see that demand and then take a call. That does not mean the demand of the product will be not there. We have taken a strategic call looking at the higher gas price and the gas cost and supply. But to also add to that, there is no more new slab plants being added in Morbi as per the knowledge we have.

Ritesh Shah — Investec India — Analyst

Sure. That’s very useful. Just last one question for Ashokji. Sir, you indicated the export market can go from INR12,700 crores to INR18,000 crores. Sir, can you give some more data points? Basically, highlight what the container freight charges are if the export run rate from Morbi really could on a monthly basis off late, which gives us confidence of this INR18,000 crores number because it’s just a sizable number. We understand gas prices in Europe versus India, and the other variable is container freight. How should one understand this [Indecipherable]

Ashok Kajaria — Chairman & Managing Director

Okay. Good question. The costs in Europe, which is the biggest export market, you see for your information, Italy exports 70% of its production for exports. Spain exports 78% of its production is exports. These countries, the cost of gas, electricity, as I said earlier, from November-December onwards has gone up by 300% for electricity and 400% for gas, plus paper, plus pallets, everything it has been written and the ceramic wall matching. With this, India will become viable and India will export to many markets, including USA, where our presence was much less, and these markets will open up for India.

And I’m sure with the kind of aggressiveness the Gujarat people have from Morbi and exports, they will be able to do the numbers, which I’m talking about, because our costs have not gone up that high compared to the cost of Italy and China. So that’s one reason. In the month of March, they have done exports of INR1,200 crores, which had fallen as low as INR800 crores in the month of December-January. They have picked up, they done INR1,200 crores. I’m sure — April data I don’t have, but I’m sure with the ongoing time, the numbers would be met, whatever we are talking about.

Ritesh Shah — Investec India — Analyst

Sir, this is very useful. Just a related question, sir. Is there a raw material angle when it comes to the European, basically, as far as rushing to Spain when it comes to procurement of raw material from the U.K. Is that also angle what I’m referring to play? I’m just…

Ashok Kajaria — Chairman & Managing Director

They are working to solve this problem, but they have a serious problem. In Europe, Spain and Italy, they use lot of [Indecipherable] for manufacturing of these bigger a slabs. So they’re having a very serious problem, but I’m not touching that issue right now. I’m only touching the issue of electricity and gas and other input costs like paper, I said, there also the costs have gone up, pallets, freight, everything has gone up. So I’m not touching that thing about raw materials because there is something — we’re shipping here, can’t comment on, but they are having various figures.

Ritesh Shah — Investec India — Analyst

Got it. This is very, very useful. Thank you so much. I appreciate that.

Ashok Kajaria — Chairman & Managing Director

Thank you.

Operator

Thank you. Our next question comes from the line of Saumil Mehta with Kotak Life. Please go ahead.

Saumil Mehta — Kotak Life — Analyst

Yeah. Thanks, sir. Two questions. First on the book-keeping. What was the total A&P spend you have done for FY ’22? And any guidance on FY ’23, ’24 ballpark?

Rishi Kajaria — Joint Managing Director

You’re talking about the advertising spend, right?

Saumil Mehta — Kotak Life — Analyst

Yes.

Rishi Kajaria — Joint Managing Director

We spent around INR80 crores in S1 financial year ’21, ’23. And we’re looking at a slightly higher spend in this coming financial year.

Saumil Mehta — Kotak Life — Analyst

Okay.

Rishi Kajaria — Joint Managing Director

So as a percentage of sales that number should be still 2%-odd versus 3%, 3.5%, 4% revenue.

Saumil Mehta — Kotak Life — Analyst

Okay, perfect. And the second question is more on the working capital. Now obviously, we have seen some moderation of working capital which used to be about plus 65, 70 days attach peak day 19, 20, from there we are down to 50. If I take slightly longer SKU, maybe ’14, ’15, ’16, used to be average 30 days of working capital. So from there, working capital is still about 50. Over the next two, three years, do we believe that working capital days then actually come down with more formalization maybe smaller players getting out of — more stressed. How should we look at working capital?

Ashok Kajaria — Chairman & Managing Director

When you compare the data, you are forgetting that the years you are talking about, there is lot of imports of polished vitrified tiles from China. And then you import, you have less requirement of money because you pay after 180 days. When normally, if you look at the three year data, exports have — imports have stopped for the last six years. If you look at the data from ’18, ’19, ’20, ’21, you will find that the working capital has been roaming around here. And going forward, it could be one day, two, three days plus, two, three days minus. That’s about it.

Saumil Mehta — Kotak Life — Analyst

Perfect, perfect. Okay. Thank you, sir.

Operator

Thank you. Our next question comes from the line of Sumakesh with Carlyle. Please go ahead.

Sumakesh Mishra — The Carlyle Group — Analyst

Hello? Am I audible?

Ashok Kajaria — Chairman & Managing Director

Yes.

Sumakesh Mishra — The Carlyle Group — Analyst

I want to understand how the product mix has moved between GBT, PBT and Ceramics. We can do a comparison between FY ’21, ’22 and what is the projection or the budget for FY ’23? The more structural thing that I’m trying to understand is that had the consumer demand changed because of this pass through of gas prices?

Chetan Kajaria — Joint Managing Director

So the revenue mix is the following. Ceramics is 38%, PBT 32% and GBT is 30%. And the volume mix is 44% Ceramics, 30% PBT and 26% GBT. And we see an equal growth opportunity in all the three divisions going forward. Nothing much has changed, it’s stable.

Sumakesh Mishra — The Carlyle Group — Analyst

So we have basically not observed people moving from GBT to PBT or Ceramics because of this inflation in prices, correct?

Ashok Kajaria — Chairman & Managing Director

See, you are forgetting one thing. Chetan shared some data with you where the dealer very recently, a guy in Bihar who is dealing with Kajaria has a 4,000 square feet showroom near Darbhanga. He is opening a 16,000 square feet showroom near that place and the demand is for all the products. Similarly, a guy in Rayya, which is one hour drive from Amritsar airport, he is on highway, he has 8,000 to 10,000 square feet showroom, he is top 10 of Kajaria. He wants to open a 38,000 square feet showroom. So it’s — he is on a highway. And so he sells everything. So it’s not a question of the price change will make a difference. People are making house once in five years, once in 10 years, they want the best of everything. And the impact of the total cost of tiles and sanitary in the house is about 6%.

Sumakesh Mishra — The Carlyle Group — Analyst

Understand. The only reason why I was asking this question is because earlier you had mentioned that there is only a certain level of price increase that we can take. And base of that…

Ashok Kajaria — Chairman & Managing Director

That is not because of any other thing. That is because we have to beat the market. We have to complete the 700 people from Morbi and we have to compete with among other fellow organized players. So keeping that in mind, we have to strike the right balance. It’s not a question of what the market will take. It’s a question of you have to be there to sell. You can’t have 15% to 20% volume growth and you take a price hike just like that. So it has to be a very balanced approach.

Sumakesh Mishra — The Carlyle Group — Analyst

I understand. Thank you.

Operator

Thank you. Our next question comes from the line of Devanshu Sampat with Yes Securities. Please go ahead.

Devanshu Sampat — Yes Securities — Analyst

Yeah. Hello, sir. Good afternoon. Just one question. So your plan for exports have been moving as per how the scenario has been. So now that you’re saying that it’s slightly improving, can we expect a higher contribution or some exports for Kajaria?

Ashok Kajaria — Chairman & Managing Director

No. Kajaria is not — you don’t expect much contribution, because we want to focus more on domestic market, Kajaria is hardly doing about 3% of exports. We would like to maintain that even in future.

Devanshu Sampat — Yes Securities — Analyst

Okay. Thank you. That’s it from my side.

Operator

Thank you. Our next question comes from the line of Keshav Garg with CCIPL. Please go ahead.

Keshav Garg — Counter Cyclical Investment Private Limited — Analyst

Sir, just wanted to understand the competitive scenario. Sir, do you think in your judgment the organized players, especially in the tiles, are they basically passing on the prices or are they basically holding on to prices for the sake of volumes? Sir, what is the basic direction that the competition is picking?

Rishi Kajaria — Joint Managing Director

Mix of both.

Ashok Kajaria — Chairman & Managing Director

See, depending on what your individual mission is, my mission is right now to have a 15% to 20% growth as Kajaria. That’s our mission. Keeping that in mind, we will do a balanced price hike. And if you are not looking back, if you look back last year, in spite of everything, we have taken a 10% cumulative price hike right from April to July to October to November. So now we are only in the month of May. We have already taken a price hike of 2% from 1st of May. If the situation demands, why should I miss that opportunity. But I can’t say it today. Let the market move and then we’ll take that call.

Keshav Garg — Counter Cyclical Investment Private Limited — Analyst

Okay, sir. Thank you very much.

Ashok Kajaria — Chairman & Managing Director

Thank you.

Operator

Thank you. As there are no further questions, I would now like to hand over the conference to the management for closing comments.

Ashok Kajaria — Chairman & Managing Director

Thank you very much for this interaction. I’m thankful to all the participants who have given their valuable time and spent here and put some good questions. And we as management, plus our team of Sanjeev and Pallavi will be too happy to answer any questions later on, on an individual basis also. Many thanks for this meeting today — for this call today.

Operator

[Operator Closing Remarks]