Prince Pipes and Fittings Ltd (NSE: PRINCEPIPE) Q3 2025 Earnings Call dated Feb. 12, 2025
Corporate Participants:
Parag Chheda — Joint Managing Director
Anand Gupta — Chief Financial Officer
Nihar Chheda — Vice President, Strategy
Analysts:
Aasim Bharde — Analyst
Gautam Rajesh — Analyst
Shravan Shah — Analyst
Sneha Talreja — Analyst
Keshav Lahoti — Analyst
Pritesh Chheda — Analyst
Amit Agicha — Analyst
Utkarsh Nopany — Analyst
Arun Baid — Analyst
Jenish Karia — Analyst
Chinmay Nema — Analyst
Mudit Minocha — Analyst
Ashish Shah — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q3 and Nine Months FY ’25 Earnings Conference Call of Prince Pipes and Fittings hosted by DAM Capital Advisors. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Aasim Bharde from DAM Capital Advisors. Thank you, and over to you, sir.
Aasim Bharde — Analyst
Hi, good morning. On behalf of DAM Capital, I would like to welcome everyone for Prince Pipes Q3 and Nine-Month FY ’25 results conference call.
From the Prince team, we have Mr. Parag Chheda, Joint Managing Director; Mr. Nihar Chheda, VP, Strategy; Mr. Anand Gupta, CFO; and Mr. Karl Kola, Head, Investor Relations.
I will hand over the call to Mr. Parag Chheda for his opening comments. Thanks.
Parag Chheda — Joint Managing Director
Thank you, Aasim. Good morning, and thank you all for joining us for our quarter three and nine months FY ’25 earnings call. The presentation and the press release have been issued to the stock exchanges and uploaded on our website.
I hope everybody has been able to go through the same. The December quarter has been a challenging quarter for the industry and specifically for Prints as well. We have never shied away from admitting that our performance is far away from our expectations. Over the past few months, PVC prices have continued to remain volatile. As you are aware that PVC prices had fallen by 19% till October, leading to a sustained destocking. Thereafter prices increased twice by INR3 per kg in November on announcement of provisional findings of anti-dumping duty. However, delay in the final findings and implementation in the past couple of months had led to lower spot prices and maintenance of sub-optimal inventory at dealer level. Further, quarter three volumes in the industry and ours were affected by delayed demand and sluggish execution in the infrastructure and construction sectors.
Our profitability was majorly dented by lower volumes and high-cost PVC inventory vis-a-vis sales realizations. We are implementing a wide range of growth strategies on an immediate basis, which will yield returns in the upcoming quarters. Our investments in distributor management system will help us track and forecast end-demand more efficiently. Our focus on-brand reinforcement and customer loyalty initiatives like Udan 2.0 on a pan-India basis will help us expand and strengthen customer engagement, thus driving notable volume growth in medium-term.
By Prince, our pathware vertical continues to expand presence across markets. The segment is steadily expanding its footprint with new showrooms across Goa, two in Jaipur and Pune, in addition to the earlier launched outlets in Haryana and New Delhi. Now we are present in Tier-2 and 3 cities across North, West and South regions of India across more than 200 retail touch points.
Our integrated manufacturing facility at Bihar will be commissioned in this quarter and a capacity of 40,000 metric tons in a Phase-1 is likely to go onstream from quarter one FY ’26, which will cater to the rising demand in East India, a fast-growing market. At an organization level, we have been certified as a Great Place to Work, which is an independent concrete evidence of employee experience.
GPTW is a global authority to certify organizations across the world. This certification reiterates that Pipes fosters a positive work culture, enjoys high employee satisfaction and promotes sustainable business success, marking a significant milestone for the company. Achieving GPTW status will help attract and retain rich talent while also boosting employee engagement. In another significant development, Prince Pipes has ranked among the top two most desired brands in the Pipes category as declared by TRA Research in its most desired brand this recognition marks an important milestone for the Prince brand.
TRA research annual rankings are highly-regarded by the industry providing valuable insights into consumer perceptions and preferences for over a decade the Union Budget 2025 announced the extension of mission until 2028 with an enhanced total outlay aiming to achieve 100% coverage of portable tap water connections across rural households. It was reiterated that since 2019, 15 crore household representing 80% of India’s rural population have been provided access to portable tap water connections under the Mission scheme.
Additionally, the government plans to sign separate MOUs with the states and union territories to ensure the sustainability and efficiency of water service delivery, delivery reinforcing its commitment to a water secure future for all. This augurs well for the fittings industry that play an active role by bringing innovation, innovative solutions and technologies. To capture the long-term demand trends, we are expanding manufacturing at three key plants including our latest facility at Bihar, which will go on-stream by April.
Before I conclude, I would like to highlight again that we recognize that this quarter performance, both volume and profitability is far from our expectations while we are accountable to our investors, we are first accountable to ourselves. During these challenging times, I am confident that we will emerge stronger. Going-forward, I believe PVC prices have bottomed-out. As the sentiments improve, our volume performance will improve. The various marketing strategies, including digitizing of our value chain will help us gain market-share. While improving volumes and product mix, I’m confident that our profitability will improve from the current quarter.
Thank you for your time. I will now hand it over to Anand to take you through the key financial highlights.
Anand Gupta — Chief Financial Officer
Thank you for by and good morning, friends.
I’ll be taking you through quarter three and Nine-Month FY ’25 financials now. Revenue in Q3 FY ’25 stood at INR578 crores as compared to INR619 crores in Q3 FY ’24. In a challenging operating environment, we had volume of 41,267 tonnes in Q3 FY ’25 as compared to 42,665 in Q3 FY ’25.
EBITDA for the quarter stood at INR3 crores. We had a loss for the quarter at INR20 crores. Revenue in Nine-Month FY ’25 stood at INR1,804 crores as compared to INR1,829 crores in nine months FY ’20. In nine months FY ’25, we achieved volume growth of 4% Y-o-Y. EBITDA for Nine-Month FY ’25 were at INR107 crores with profitability at INR19 crores. Our overall working capital stood at 90 days as compared to 93 days in September and 95 days in March 2024. Receivable have shown improvement for the past two quarters and now stand at 53 days from 83 days in March-end. Inventory days stood at 102 days as on December end
With this, we’d like to open the floor for questions. Thank you.
Questions and Answers:
Operator
Thank you, sir. Ladies and gentlemen, we will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star N1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press time to participants are requested to use handsets while asking a question. We will now wait for a moment while the question queue assembles.
The first question comes from the line of Gautam from Everflow Partners. Please go-ahead.
Gautam Rajesh
Hi, sir. Good morning. Thank you for the opportunity. I had a few questions. My first question was why is the margin profile of the company changed significantly over the last few quarters, what is likely to be the steady-state of EBITDA margin that we are targeting?
Nihar Chheda
Yeah. So couple of things here as far as margin performance is concerned, margins have been under pressure at the gross margin level itself because of a constant reduction in PVC prices. So we’ve had a couple of quarters of inventory loss. So even in the December quarter, there was around INR30 crores of inventory loss. And so that is the main reason for the pressure on margins. And the second reason is in such a environment where prices are declining, we — our channel does destocking, which leads to a pressure on volumes, which is not only for us, it’s across the industry. So as a result of that with lower volumes, there is no operating leverage and lack of cost absorption, which is why not only gross margin, but also the EBITDA margins, operating margins are under pressure. I think going-forward…
Gautam Rajesh
Stable state of EBITDA that we would be targeting, sir?
Nihar Chheda
So long-term, we have always targeted 12% EBITDA. Today that is obviously a significant gap from our current performance. But to give a picture going-forward, I believe that from the March quarter itself, we will see an improvement in volumes. And from the June quarter, I believe that we will also see a better sentiment in the market as far as commodity prices are concerned. So, I think volumes should start improving from March quarter and both volumes and profitability will improve from the June quarter.
Gautam Rajesh
Okay, could we be able to see 12% roughly as from June?
Nihar Chheda
I think it’s tough to comment on that because the gap is large. I think historically, we have always tried to let the numbers speak and I think that doesn’t change even in this sort of challenging environment. I think we have to just focus on execution, look to improve volumes in this kind of times and the rest will follow.
Gautam Rajesh
Okay, sir. So from a growth perspective, so we are seeing green shoots not from this quarter like from the market or is it still done dull now and we can see that primarily from March or June?
Nihar Chheda
I think from March volumes should improve from the March quarter compared to the December quarter. And from June quarter, I think we should also see a better pricing sentiment in the market, which will also then further help volumes.
Gautam Rajesh
Okay, sir. And one final question from my side is, over the next two to three years, what sort of growth and margin profile do you expect from the business — from the business?
Nihar Chheda
So I think across the pipes, fittings and tanks, I think we have always outgrown industry by 2% to 3% and that is what we will continue to focus on. Of course, is a new baby where we can’t look at growth in percentage terms, but we have to look at it in exponential terms. So the revenue for the December quarter is around INR8 crores, which has increased from around INR5 crores in the second-quarter. So, there we should see a significant growth.
And 18 months from now, I think the bathware number also will be significant and the margins also in the long-term will be better than the piping margins. If you look at that industry, there is more scope for value-creation in terms of product differentiation and brand creation because it is a front of the wall product. So in the long-term, that will be a good value-added product for the organization.
Gautam Rajesh
Yes, sir., the overall business, any particular in two to three years, what type of growth and margin should we expect year?
Nihar Chheda
So two to three years overall business, we should outgrow industry by 2% to 3% every year. And margins again I think steady-state once we are out of these challenging times, I think 12 times is still achievable. Sorry.
Gautam Rajesh
So two to three years overall business, we should outgrow industry by 2% to 3% every year. And margins again I think steady-state once we are out of these challenging times, I think 12 times is still achievable. Sorry.
Operator
Thank you. A reminder to participants, please restrict yourself to two questions. If you have any further questions, please rejoin the queue. The next question comes from the line of Shravan Shah from Dolat Capital. Please go-ahead.
Shravan Shah
Thank you. A reminder to participants, please restrict yourself to two questions. If you have any further questions, please rejoin the queue. The next question comes from the line of Shravan Shah from Dolat Capital. Please go-ahead.
Nihar Chheda
Correct.
Shravan Shah
Yeah. So even if I adjust that INR30-odd crores, then also the EBITDA margin comes at around 5.7 odd percent, which is still a much lower than what we used to guide. Right. So just trying to understand, so let’s say the prices, I don’t know your view in terms of the anti-dumping duty when it will be coming and in terms of the improvement in the PVC prices, but let’s assume if it remains at the current level, then in the particularly for the 4th-quarter where we can see the EBITDA margin? And sustainably though you are saying that 12% EBITDA margin is achievable. Can we see that coming from the June quarter itself or maybe it will take at least from the second-half of FY ’26, it will start coming in.
Nihar Chheda
So apart from the inventory loss, there is a further loss of around INR5.56 crores on account of the division, which we had guided for. Yes. And like I said, I think mainly the EBITDA margins are under pressure because cost absorption is not happening. Realizations and volumes both dropped, which led to pressure at the gross margin level and then obviously that trickled down to the EBITDA level as well, which is why there is a gap between our targeted our EBITDA and where we are today, I would not like to speculate on when the duty comes.
Of course, it is going to come whenever it comes, that will be a huge relief to the entire industry. So not only in terms of pricing or margins, but specifically in terms of there will not be any sort of negative sentiment from the channel to destock and channel inventory as we speak is low, it is quite low. So as soon as in sentiments just normalize, I think you will see a good volume pickup, which could be in either by end of this quarter or in the beginning of June quarter.
Shravan Shah
Sorry, sir, still not able to get — so let’s put — try to put a number. So in January and February, how much in terms of the broader range, how we see in terms of the volume growth? And for 4th-quarter, let’s say, the prices remains at what it is, how do we see the volume growth? And for next year, do we believe that once the Vihar is also operational, can we see a 10% plus kind of a growth that also coming from the June quarter itself for the entire FY ’26 and if that is the case and then are we believing that 12% EBITDA margin in FY ’26 is achievable?
Nihar Chheda
So I understand your question. What I will say is for the 12 months this year, we should have a mid to-high single-digit volume growth. And for the June quarter, yes, I can foresee a double-digit volume growth coming.
Shravan Shah
Okay. And then from the June quarter itself, can we see a closer to a kind of a double-digit or a 12% kind of EBITDA margin or will it will take us some time from the second-half of FY ’26, it will start coming in ’24?
Nihar Chheda
It will start coming in from the June quarter, things will normalize. I think volumes will solve most of the problems. So I think like I maybe to make my statement more loud and clear, you will see better volumes coming in from March quarter and you will see margin moving towards normal levels from June quarter.
Shravan Shah
Okay. That’s great, sir. Second, just if you can share how much we have already spent on the capex in nine months and what is left in the 4th-quarter and maybe for FY ’26, how are we looking to spend?
Anand Gupta
Yeah. So for nine months, we have spent around INR95 crores and in the last quarter, we will be further spending around INR60 crores because most of the Bihar’s closure will be there. The total Bihar capitalization will happen in Q1 of FY ’26. So this is how the capex plan is. So it will be spillover in FY ’25 and FY ’26, particularly the Bihar. For internal capex, excluding Bihar, it will be around INR110 crores crores.
Shravan Shah
So put together 110 plus? Yeah, I’m just clarifying. I’m just clarifying what has answered. So putting everything in terms of the cash flow perspective, how much capex will be there in FY ’25 and ’26.
Anand Gupta
So it will be in the range of INR260 crores to INR270 crores, including DR.
Shravan Shah
And ’26.
Nihar Chheda
So ’26, it will be a lean period for us because most of the capex we have done already in FY ’25. The leftover of Bihar plus 80 to 90, which is a normal spend over existing plants will happen.
Shravan Shah
Okay. Thank you and all the best I have a question. We’ll come back-in queue. Thank you.
Nihar Chheda
Before the next question, I would like to make a clarification. I misspoke the bathware sales for December quarter is INR9.5 crores, INR9.5 crores. Just one clarification. Please go-ahead.
Operator
Thank you, sir. The next question comes from the line of Sneha Talreja from Nuvama. Please go-ahead. Sorry to interrupt, you are not audible.
Sneha Talreja
Hi, are you able to hear me?
Operator
Yes, please go-ahead.
Sneha Talreja
Yeah. Just wanted to understand why is there a very sharp increase in inventory days? It’s largely standing at about 102-odd days versus even six months run-rate of about 88 days? That’s one.
Nihar Chheda
Yeah. The inventory days has gone up because sitting at the end of H1, if you look at our commentary or just commentary from the industry, we were expecting a very strong H2. Most people were expecting the duty to come in somewhere at the beginning of the second-half, which is why we were actually preparing for a very strong volume growth coming in December quarter and in March quarter, which has led to — which didn’t end-up happening, which is why the inventory has actually gone.
Sneha Talreja
So, this will be largely inventory in terms of raw-material and which is why the inventory losses.
Nihar Chheda
Yes. So, I would say around INR350 crores is of raw-material and the balance is finished good. Let’s that.
Sneha Talreja
Understood. Secondly, of course, we understand your volumes are not going up and gross margins have taken a hit, but what about your employee expenses both on Y-o-Y basis as well as Q-o-Q basis, we continue to see it on a very strong increase in trend even as a percentage of sales, last two to three years have seen a very strong run-up. Any comments on that?
Nihar Chheda
So one is because of. And apart from that, we have been aggressively increasing our manpower in the marketing and sales divisions. So this is as a result of that because even if you see today compared to our peers, our sales force is a smaller. So as we grow, we want to — we make two kinds of investments. One is in terms of branding and second is in terms of increasing the sales force, which is why it’s being shown. I think it’s getting highlighted more because sales is not growing. But once that starts growing, I think these investments will start paying.
Sneha Talreja
Understood. And did you also mentioned on the mid to-high single-digit kind of a volume growth run-rate for Q4 and double-digit growth volumes for FY ’26, is that correct or given PVC prices are still on a downward trajectory, we’ve just seen a INR3 dip. So why do you expect a growth now versus what we have seen in Q3?
Nihar Chheda
No, sir, I agree Q3 volumes are not — are not good, but if you still see Nine-Month numbers, we are at around 4.5% volume growth, which is in-line with other larger players. And I believe that we will see a good coming in the quarter-four. So I think with this kind of a mid to-high single-digit growth is possible in March quarter. And yes, from next year onwards, we will be seeing a double-digit growth.
Operator
Does that answer your question, Sriya. Hello,, are you there?
Sneha Talreja
Yeah, it does answer. Thanks.
Operator
Thank you. The next question comes from the line of Keshab Lahoti from HDFC Securities. Please go-ahead.
Keshav Lahoti
Hi, hi, thank you for the opportunity. Sir, firstly, whenever we talk about channel inventory is low, but that would be correct understanding channel inventory was low in Q2. So from Q2 to Q3, the channel inventory might have been stable or possibly might have improved. So that way the channel inventory has not impacted the growth rate year-on-year. How should we read it?
Nihar Chheda
No, I think channel inventory is extremely low right now because what happens is when prices are falling with no sign of any triggers of increase apart from the duty, there is a lot of anxiety in the channel to keep stocks. So my sense is right now channel inventory is very low and possibly even lower than what it was at the beginning of the quarter. Okay, understood.
Keshav Lahoti
Got it. That is helpful. Sir, on the incentive side, have you given higher incentive this quarter? Because last quarter also its inventory loss, your margins were somewhere around 9%, but now that has fallen to 5%, 6%. I understand one reason is volume. Do it have to do with incentive also something?
Nihar Chheda
Yeah, it is to do with two things. One is because of this challenging environment, we’ve had to take some price corrections and we’ve had to incentivize the primary and secondary channel. So that is true in this kind of a environment, we’ve had to hold-on to our market-share at least and to and to do that we’ve been forced to be slightly more aggressive in the marketplace. And I think as sentiments improve, we will be able to pull these back.
Keshav Lahoti
Can you quantify what sort of additional incentive you have given in this quarter?
Nihar Chheda
It depends from state-to-state from category to category, but would be in the range of three-odd percent.
Keshav Lahoti
Okay. So earlier the 2% was already there. Now you added to three more percent incentives. So broadly the incentives have increased by 5% in last few quarters.
Nihar Chheda
This is — this 2% I think you’re referring to is the cash discount, that is just for distributors to pay within three days. This is a 3% additional sort of discount that we had given during the quarter to ensure that our volumes are intact.
Keshav Lahoti
Got it. So the discount impact is 5% what I’m getting compared to maybe three, four quarters back, that impact is 5% right now. If I combine all this.
Anand Gupta
No. So if you are referring to the last commentary where we had — where we had indicated that there is some 2% incentivization was done. So that was valid for the last quarter. And what just mentioned, 3% for this quarter, so it is not on-top of 2%. It is 3% for the quarter. It’s not on the top of 2%.
Keshav Lahoti
Understood. Got it. Got it. That is helpful. Thank you for the clarification. That’s it.
Operator
Thank you. The next question comes from the line of Pritesh from Lucky Securities. Please go-ahead.
Pritesh Chheda
Yes, sir. You know, including this quarter or maybe last now, 10, 12 quarters, if you see your volume performance vis-a-vis some of the larger players is quite different. So if you could tell us the key reason and how does it rectify itself? And it seems that you have lost some market-share as well.
Operator
Sorry to interrupt, Pritesh, please be a little louder. Thank you.
Pritesh Chheda
Hello. Is it clear though?
Operator
Yeah.
Nihar Chheda
Yeah. So Pritesh, to answer your question couple of years ago, we had our ERP issue, which led to a lot of supply-chain issues for a few quarters when we did actually transparently mentioned that we have lost market-share. Past few quarters, I would however, say that our growth has been in-line with larger players. So if you see the nine-month numbers, we are at around 4.5% volume growth, which is in-line with the other two peers. So right now, the challenge is more to do with the industry as opposed to our specific market-share. Before that, I will agree that because of our supply-chain issues, we did have a some loss of market-share. But if you see for the nine months, we are still broadly in-line.
And going-forward, not only are we confident of holding onto our market-share, but growing our market-share and taking market-share in not only from peers but from specifically the smaller players both organized and unorganized in this industry. So, we continue to expand our channel. We continue to invest in marketing and in increasing our team. And we have also made huge investments in digitizing our value chain through distributor management systems and sales force automation, which helps us improve our productivity per channel partner and per sales executive. We now have better visibility of retailer level sales, secondary sales, which then helps us improve market-share at a more — granular level across geographies and across product categories.
Pritesh Chheda
Just to clarify, your ERP implementation ended in ’23, right?
Nihar Chheda
Correct.
Pritesh Chheda
So you even had a loss of market-share continuing in ’24 as well.
Nihar Chheda
So the ERP implementation started in ’23 FY ’24.
Pritesh Chheda
And for the nine months, see this the PVC price volatility, et-cetera, now in the Nine-Month, what is the PVC RM impact if you have to quantify and what is the non-pipes EBIT loss, EBITDA loss which is there in this nine months and why is it that you have a higher inventory and some other players do not go through a similar RM cycle. So what exactly you do versus what exactly is the method that you are deploying in-sourcing raw-material?
Nihar Chheda
So we for the year we’ve had around INR50 crore of inventory loss.
Pritesh Chheda
For nine months basically?
Nihar Chheda
To December is around INR50 crore inventory loss.
Pritesh Chheda
And the non-pipes loss? Newer business is basically a bar.
Nihar Chheda
Per quarter is around INR5 crore to INR6 crores.
Pritesh Chheda
Loss.
Nihar Chheda
Per quarter.
Pritesh Chheda
Okay. So INR15 is this INR50 crores is inventory. What is the inventory method that we deploy where it goes through much sharper cycles?
Nihar Chheda
So we are mainly import dependent as a country. So any of the larger producers would typically have 50% to 60% dependence on imports, which is why because of the lag, because of the transit times, we are keeping — we are forced to keep higher inventory. In this case, the inventory was a significantly higher because we were preparing for a very strong H2 because the way the first-half had gone. We were expecting a very strong second-half with an improvement in sentiment, which didn’t happen, I think that has been postponed. So instead of happening in the beginning of Q3, I think that is going to now happen in the end of Q4, which is why we sort of — the inventory days looks higher, but I think by the end of this quarter you should see a sharp reduction in inventory days.
Pritesh Chheda
And lastly, one clarification on the pricing.
Operator
Pritesh, those were your questions. I would request you to rejoin the queue. Thank you. The next question comes from the line of Odit from Yes Securities. Please go-ahead. The person you’re speaking with has put your call on-hold.
The next question comes from the line of Amit Agicha from H.G. Please go-ahead.
Amit Agicha
Yeah, am I audible?
Operator
Yes, Amit.
Amit Agicha
Yeah. Good morning and thank you for the opportunity. Sir, my question was connected to the expected revenue and margin contributions on the segment post-acquisition. And are there any further M&A opportunities the company is evaluating?
Nihar Chheda
Currently we are not evaluating any M&A opportunities. In December quarter, like I said, we have around INR10 crores of revenue coming in from which will increase quarter-on-quarter significantly. So just to give you a further color on that, now we have expanded our operations in South and East. So for the first 3/4 of the year, we had operations only in North and West, so we were still not pan-India. In-quarter three, we’ve been able to deploy our teams in South and East India. So today as we speak we are we are operating in I would say 90% of the country so now the channel is being set-up in south and east parts of the country so by end of this year we will have a channel of pan-India and this contribution from Bathware will continue to go up.
Amit Agicha
And the current capacity utilization rate across all the plants, like if you can give a ballpark number?
Nihar Chheda
So across all these plants would be around 50% across the pipe business.
Amit Agicha
Thank you, sir. And the best for the future.
Operator
Thank you. The next question comes from the line of Utkarsh Nopany from Bob Capital Markets Limited. Please go-ahead.
Utkarsh Nopany
Yeah. Hi, good afternoon, sir. Sir, I’m again repeating the same question which has been asked by the previous participant. Like if we see when we do the comparison with the major listed pipe companies, we were the only exception who reported negative volume growth for December quarter and that too over a weak base of last year, which got affected because of the ERP implementation. And our margin has also contracted the most in comparison to any other listed pipe companies. So can you please specify what challenges we are facing, particularly on related basis, not on industry factor, which is resulting in such poor performance?
Nihar Chheda
So today, as we speak, we are still on nine months have grown 4%, 5% on volumes. So currently, as we speak, there is no specific challenge for us relative to the industry. Yes, I take your point that our base is more favorable because the last year was impacted by ERP. But in this kind of environment, it is very tough to increase market-share or win-back lost market-share of the past. This year for nine months, we are still at 4%, 5% volume growth, which is in-line with other larger players. And this — like I said, we will see an improvement in volumes from March quarter and then in volumes and profitability from June quarter. We are confident of the same. There are no challenges that are specific to us. This is more just industry going through tough times. To repeat myself, nine months, we are still in-line with peers. I take it that it is a favorable base. But in this kind of time, it is hard to win-back market-share. We have to at least try to be in-line with the larger players.
Utkarsh Nopany
But the other players have not seen such kind of a margin contraction and they have not been such elongation in their working capital cycle, which we are seeing. And then also if you are thinking that over the nine months, we are growing at the same pace. So what pain we are actually facing? Is there anything like we are not able to compete with the major brands because they have cut-down their prices in the market. So we are facing difficulty in getting the volume.
Nihar Chheda
So coming to working capital, working capital has looks elongated because of the inventory days going up. Our debtor days still is in control. It is around 53 days compared to 83 days at the end of last financial year. So we have seen a reduction of 30 days. And like I said, inventory days will normalize at the end of this financial year. If you look at on the margin side, yes, the decrease in margin has been the largest majorly on account of two things. One is an inventory loss of around INR30 odd crores and second a loss, which was foreseen of around INR5 crores. Yes, competitive intensity is high, but we are — this is not new for us. We have been in this industry since 40 years. So we have seen ups and downs. This is a down-cycle.
When I say down-cycle, not really in terms of end-demand, I think end-product demand is still more or less okay. And going-forward, I think it will continue to grow this industry. It’s just that right now sentiments amongst the channel across the channel have been very poor. Once these sentiments not — I will not even say positive sentiments, but once the sentiments normalize, we will see a better volume performance, which will then help us normalize our EBITDA margins. So I have to acknowledge that times are tough right now, but we are very confident that this is not going to be a prolonged pain. It is going to be a sort of quicker turnaround because of the reasons that I just explained.
Utkarsh Nopany
Okay. And sir, my last question is like, are we likely to see any further M2M inventory loss in this March quarter as PVC resin prices have corrected in February. And where do we see our net-debt at the end of March?
Nihar Chheda
So yes, we will see an inventory loss in-quarter four. I will not be in a position to quantify it. I don’t think it will be a significant inventory loss sitting today. It will not be a major inventory loss in the March quarter. As far as net cash position comes.
Anand Gupta
Yeah. So apart from term-loan, we have working capital debt as well. So the net cash — net cash position is in negative because of mostly the term-loan what we have taken. So net-debt is around INR109 crores, including term-loan.
Utkarsh Nopany
Okay.
Operator
Thank you, sir.
The next question comes from the line of Arun Bath from ICICI Securities. Please go-ahead.
Arun Baid
Hi, thanks for the chance. Just one question. Yeah. Just one question they had. We have been speaking of industry-leading growth for the last two, three years continuously. Just to give a sense, you look from FY ’22, I think post-COVID till now, we are nowhere near the competition in terms of volume growth to get the margins, which is not worth talking about. What gives you confidence that this will change from June quarter?
Nihar Chheda
So like I said, for this nine months, we are in-line with industry at 4%, 5% growth. It should be higher given that our base is more — is lower, which is in-line with what you’re speaking. So I acknowledge what you’re saying. This year, things have normalized as far as volume growth is concerned, we should be growing at a higher pace because, yes, our base is on lower-growth relative to other peers. So I acknowledge that. It’s just that in this kind of environment, we’ve just holding on to-market share itself has been a task but I think just as sentiments change post duty I think you will see the channel being willing to stock at least normal levels forget about aggressively restocking.
So that is why — and apart from this, there is a lot of other initiatives that we’re taking in terms of investing in the brand, digitizing the value chain and increasing our sales force productivity through sales force automation. And we continue to expand the distribution network. So we are — I know times are tough, but we are still focused on execution. And if we keep our head-down and execute, you know, typically whenever our backs have been against the wall is when we have had the best performances as an organization. So that’s where my confidence comes from in terms of having this is not going to be a prolonged pain, but a quick revival. That is why we are so confident of a quick turnaround.
Arun Baid
But if I look at even from FY ’19 data till FY ’24 because FY ’25 is not over. So we can keep it on that point. The data is in sacro with what we claim that we’ll grow more than the industry. It’s way, way lower than the other two peers which report numbers, it’s way lower than that. And second thing is one question here is why do you want to building on inventory, which is when you say that we build-up inventory significantly in Q2, thinking that AD will come through and there will be a advantage. Is it that we are trading on PVC because we have seen your peers, obviously, they also had some inventory loss, which was minuscule. But just trying to clear on that. The margins are not because 1/4 you will have a gain because of your policy in the second-quarter, if it doesn’t work, it goes against you. Should we reaching our policy there? And we are definition.
Nihar Chheda
This is — we are not thinking like traders. This is not that we built-in inventory to take — I never said to take advantage of the duty. I said that we have expanded capacity aggressively the existing plants, then with Jaipur, Telangana and now with Bihar plant. So let me make myself very clear, this inventory is not to — to take advantage of the duty. That has never been the intention and I have never said that. The intent was that we expected a stronger volume growth in December quarter and March quarter. And we have put up the capacity, we have put our money where our mouth is. But the point is that if we add capacity and there is a positive sentiment in the market, we should have supply security. So we have seen times in the past four, five years where there have been such good demand from the market and we have not been able to serve the demand despite having the capacity and the orders.
So this is not a position or this is not some speculative thing. This is just we have the capacity. We were expecting a good volume growth, which is why we have done this. And this is — we will see a normalization from this quarter itself. So this is not — this inventory is not going to — it’s not some dead inventory or anything like that. It’s just three months-to normalize. So by the end of this financial year, we will see a normalization of inventory.
Arun Baid
No, I appreciate the point on normalization of inventory. I’m trying to say the huge inventory buildup. Just to give a sense, every quarter for the last many quarters when you report numbers, you talk of an inventory loss which comes to us every quarter for the last — I think last one where you reported again was Q3 FY ’23 or somewhere there. What I’m trying to again indicate is that we are — in our case, the variation on your profitability is significant because of the inventory management. This is your call. That’s my observation. Thanks.
Operator
Thank you. The next question comes from the line of Jenish Karia from Antique Stock Broking. Please go-ahead.
Jenish Karia
Yes, thank you for the opportunity, sir. Sir, considering we have a good mix of plumbing pipes and low on the agri side, you must CPVC were growing. Now existing for the loss and inventory losses that we have reported, still on a gross level, our margin seems to be lower than some of the agri focused players. While you have explained the reason, if you could just shed some more light on that, that would be the first question.
Nihar Chheda
Yeah. So like I said in this challenging environment, we have had to give the channel more incentives and we’ve had to correct pricing as well just on to hold-on to-market share and ensure that on a nine-month basis, we are still having a positive volume growth. So as a result of that, we’ve had to be more competitive in the market, which is why there has been a pressure on the gross margins. But once the sentiment with the channel improve and the destocking stops and the channel starts regular inventory, we will see a normalization of the gross margin. And once the volumes improve, the EBITDA margins also will improve.
Jenish Karia
So given that understanding, when we are guiding for a mid to-high single-digit growth for the 4th-quarter, which implies a 30% growth on a sequential basis. Can we assume or is it better to assume that growth of 30% on a sequential basis that you have been guiding will come at a cost of margin and how has the — how has been the growth uptake for the first 45 days of the quarter, if you could shed some light, we’ll have a better understanding on the 30% sequential growth that you have been guiding?
Nihar Chheda
Yeah. Yeah. So I’m talking about a single-digit growth for the 12-month basis is what I have guided at. And we will have to continue our run-rate of the nine months or the 4th-quarter as well in terms of year-on-year growth. This will now not come at further. We have to just continue being market-friendly and we have to continue finding the balance between volume growth and being competitive in the market. We are not immune to the forces of demand and supply. So we have to continue — be competitive and gain market-share, although it has to be done in a profitable manner going-forward.
Jenish Karia
Thank you so much.
Operator
Thank you. Participants, you may press star and one to ask your questions. The next question comes from the line of Chenmai Nema from Precedent Capital. Please go-ahead.
Chinmay Nema
Good afternoon, sir. Sir, just needed a clarification on the volume number that we report, the 126k metric ton that we report this is on a blended basis right so including the business also.
Nihar Chheda
This does not include the number this is a pipe and fitting number.
Chinmay Nema
Understood, understood. Got it. And could you share the Nine-Month revenue for the water tank business?
Nihar Chheda
Can you repeat your question?
Chinmay Nema
Could you share the Nine-Month revenue for the water tank business?
Nihar Chheda
Just give us a second just will come back to you after the call on the.
Chinmay Nema
And just wanted to understand. Hello.
Nihar Chheda
Yeah, it’s INR34 crores of water tank sales for the Nine-Month period.
Chinmay Nema
Got it. And sir, what was the number in the nine months of the previous year? You would share that?
Nihar Chheda
27.
Chinmay Nema
Got it. And sir, lastly, my question was on the Bathware acquisition. If we look at the other listed companies in this space, this looks like a — this also looks like a challenging space to operate in. Could you give some color on our product positioning or where do you plan to operate in this space?
Nihar Chheda
So I don’t think it is a challenging business and neither is pipes and fitting, where we need to understand that this is a challenging time, but the overall industry is still, I think one of the fastest-growing industries in all of building material, which is why you also see such a lot of new entrants in the piping space and you see aggressive capacity expansion happening by our prints and by our peers. So let me clarify that our core business is not a challenging industry. It’s just a couple of quarters of challenge because of the commodity prices. But overall, we are in an industry that is poised to grow aggressively over the next five years. And similarly, I think bathware is total around INR18,000 crore to INR20,000 crore industry size with 65% market is organized and 35% market is unorganized.
Our margins tend to be slightly higher than pipes because there is a more scope for product differentiation and for brand-building because it’s a front of the wall product. So our intent is to use our channel to leverage our existing channel and cross-sell products. So that’s how we see it. And in terms of positioning, I think we would be positioning at the mass premium sort of bracket. We have collections across different price points, but the main is the math premium position.
Chinmay Nema
Understood. Thank you.
Operator
Thank you. The next question comes from the line of Modit M from M3 Investment. Please go-ahead.
Mudit Minocha
Hi. I want to understand if the industry margins have systematically gone down for the entire industry, given the market-leader has been very aggressive and is pricing at par with all the people. So I would like to understand your comments on industry margins like in two, three, five years, how you see? The second question is on the CPVC. Once this CPVC is abundantly available in Indian soil itself, do you think the competitive intensity in this segment also will rise? I’ll ask follow-up once.
Nihar Chheda
So yes, I think because there is a challenge with channel keeping regular inventory, the — yes, the market-leader also has become more aggressive with pricing, which has led to a downtick on margins for players across. That is true. I think going-forward, this will normalize as volume growth improves, as sentiment improves, this sort of aggressive pricing, I expect to not be as aggressive as volumes come back and I’m still continue to be optimistic going-forward. CPVC, yes, there will be more supply, but this is a very organized and a brand-conscious market, 75% of the market belongs to the top four players.
As supply increases, I think the market itself will grow because the price of the raw-material will significantly reduce which will make the product more affordable, even the finished goods because we are — we do pass-through the pricing. So with local capacity, I think India is actually — the CPUC industry cannot grow without such — with such a dependence on imports. So actually the industry is crying out for local raw-material manufacturing, which once that is available, I think the industry will grow multibound going-forward. And in-line with that, we are also adding capacity for CPVC.
To follow-up on that, would abundance of — not abundance, at least availability of CPVC with — within India, would that also start local competition and unorganized players coming in like we saw in PVC. And so the margin differential will then cease to exist will reduce at least. It will not cease to exist, it could reduce, but I think it will be more-and-more compensated by a larger volumes coming in from a value-added product, industry overall will grow. And this is this is used for hot and cold water plumbing. It’s a sensitive application used in the concealed parts of a bathroom where if there is leakage, the scope is — to do damage to other building materials is very-high and the nuisance value for the builder also is very-high. So typically plumbing cost is less than 1% of the overall builder’s project cost. So, I believe actually industry will continue to consolidate and brands will continue to be bigger.
Mudit Minocha
Thanks. Last one from my side.
Operator
Sorry to interrupt I guess you are done with your two questions. So I would request you to rejoin the queue. Thank you. The next question comes from the line of Shravan Shah from Dolat Capital. Please go-ahead.
Shravan Shah
Hi, thank you, sir. Sir, that trade incentive of 3% is still continuing in till now in January, February?
Nihar Chheda
Yes.
Shravan Shah
So any idea when we will be either reducing or stopping this 3%. Okay.
Nihar Chheda
I think we have to continue observing the market, which is what is our job. And right now, the focus is on improving volumes. And as volumes improve, our cost absorption will improve and profitability will improve. So this is the time to hold-on to volumes.
Shravan Shah
Yeah. Okay. And second, sir, this Bihar, initially we were having a 50,000 ton and now I think in opening remarks, we said the 40,000 tonnes, which will start from the April onwards in terms of the production. So if you can help us what’s the capacity, the next phase of.
Anand Gupta
Yeah, sure. So in the opening remarks, we said that we’ll be starting off with 40,000, which is primarily pipe capacity. And in next six months by at — by end of H1, we’ll be ready with not 50,000, but around 55 to 60 KT, we should be ready with that capacity and that will include pipes and fittings both.
Shravan Shah
Okay, got it. And lastly, sir, is it possible, I understand that be previously also answered in terms of the employee cost. So just trying to understand because the cost sir has gone up decently high in last kind of three odd years. Is it possible to share in terms of the top managerial, including the three promoters, a broader range currently, how much we would be drawing or part of the total of salary cost or staff cost, INR45 crore INR46-odd crore quarterly, how much would be — we would be? Because there we see that in last three years, we have taken a significant hike from 20% to 35% odd in last three years. So just trying to understand if we are not growing our volume, then as a promoter, why don’t we would have thought that we could have not taken a hike or maybe a lower point that could have also helped to some extent in terms of the better margins.
Nihar Chheda
So, there is two-parts. One is the fixed salary and one is a commission. The commission to promoters is a function of profit. So if there is no — if the profit parameters are not met, then the — there are sort of the — so basically commissions are variable and I think it’s actually a significant positive that we are linking our compensation to the profitability of the organization. So all interests of all shareholders are aligned. Estimated remuneration to the directors for this year will be around INR9 crores.
Shravan Shah
Okay. Thank you, sir.
Operator
The last question comes from the line of Ashish Shah [Phonetic] from Business Match [Phonetic]. Please go-ahead.
Ashish Shah
Good afternoon, sir. Thank you for taking my question. I just have two questions. One is what we witnessed last quarter — in this quarter in terms of profitability. Any steps and measures that you can take from a long-term perspective, whereby in the next round of raw-material volatility, we can safeguard ourselves.
Nihar Chheda
Yeah. I think in the short-term, we will see a reduction in branding cost for the March quarter because we are trying to optimize cost to ensure improvement in profitability. And I think going-forward, the focus just has to be on growing the volumes and especially in the plumbing space to ensure a better cost absorption going-forward. So in the short-term, we will — our discretionary cost is branding, which we will tone down in the March quarter. And in the long-term focus has to be on volumes so that we are able to absorb our overall fixed-cost better.
Ashish Shah
So thanks, but I think that sounds more at an operating level, right? So at the raw-material level or the gross margin level, we will continue to be a — and we will continue to face the volatility every time it hits us or any steps we can take to safeguard ourselves at that level, not at opex level.
Nihar Chheda
But at the gross margin level, we will be — going-forward, we will be more-and-more prudent with inventory management, which will help us safeguard ourselves in a volatile raw-material.
Ashish Shah
Okay. And sir, just one last question. You mentioned the number of capacity. Is there a way to look at your opex to say that we have significantly ramped-up our people and manpower and hence going ahead when incremental business kicks-in the next year or year-after, we can get some operating leverage or they will actually go up in-line with the business.
Nihar Chheda
No, I think like our capacity, a lot of the addition in manpower has been done over the past two or three years. So I think like our total capex number as well, even the manpower cost, the growth will not be as aggressive going-forward.
Ashish Shah
Thank you, sir.
Nihar Chheda
Thank you.
Operator
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for the closing comments.
Nihar Chheda
Thank you all for attending the call. Thank you.
Operator
Thank you, sir. On the June quarter foam fit underground you may now disconnect your calls lines.