Stylam Industries Ltd (STYLAMIND) Q4 FY23 Earnings Concall Transcript

Stylam Industries Ltd (NSE:STYLAMIND) Q4 FY23 Earnings Concall dated May. 05, 2023.

Corporate Participants:

Jagdish Gupta — Managing Director

Kishan Nagpal — Chief Financial Officer

Analysts:

Manoj Bahety — Carnelian Capital — Analyst

Nikunj Doshi — Bay Capital — Analyst

Keshav Lahoti — HDFC Securities — Analyst

Nikhil Gada — Abakkus AMC — Analyst

Ashish Poddar — Systematix Institutional Equities — Analyst

Aditya Sharma — Birla AMC — Analyst

Depesh Kashyap — Invesco AMC — Analyst

Udit Gajiwala — Yes Securities — Analyst

Harsh Shah — Dalal & Broacha Stock Broking Private Limited — Analyst

Darshil Zaveri — Crown Capital — Analyst

Dipanshu — Vizi Capital — Analyst

Alisha Mahawla — Envision Capital — Analyst

Puja Doshi — Praj Financial — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to Stylam Industries fourth quarter FY ’23 Earnings Conference Call hosted by Systematix Institutional Equities. 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. [Operator Instructions] I now hand the conference over to Mr. Ashish Poddar from Systematix Institutional Equities. Over to you sir. Yeah, thank you, Rico. Good afternoon, everyone. I’m Ashish Poddar from Systematix. It is pleasure to host the management of Stylam Industries. From the management we have Mr. Jagdish Gupta, the Managing Director; and Mr. Kishan Nagpal, the Chief Financial Officer. The result and investor presentation is all is uploaded on the BSE exchange. So, you would have got a chance to look at it. So, without delay are then straight away go to the Q&A session. Rico you can start.

Questions and Answers:

Operator

Thank you, very much. We will now begin the question-and-answer session. [Operator Instructions] Ladies and gentlemen we will wait for a moment while the question queue assembles. Our first question is from the line of Manoj Bahety from Carnelian Capital, please go ahead.

Manoj Bahety — Carnelian Capital — Analyst

Hi Jagdish ji. Good afternoon, sir. How are you?

Jagdish Gupta — Managing Director

Good afternoon, good.

Manoj Bahety — Carnelian Capital — Analyst

Sir, just if you can give us some update on our solid acrylic surfaces…

Jagdish Gupta — Managing Director

Sorry. Hello, yes.

Manoj Bahety — Carnelian Capital — Analyst

Sir if you can give update on our acrylic surface business, how the ramp-up is happening, how you are seeing the capacity utilization going-forward and outlook for the same over next two-three years? Basically, sir, I wanted to understand that how successful we are in terms of displacing imports? What are the early signs? Early feedback?

Jagdish Gupta — Managing Director

Manoj ji [Foreign Speech], as I mentioned early time this same type of questions. We are doing our best in the current [Foreign Speech]. Like you see it is the first plant in India. There are so many [Technical Issues] old laminates business, it took so many years, for us 15 to 20 years to gear up for the fast generation plant. Acrylic plant is also now started doing excellent. Even last month, we had a turnover of more than four crore. Domestically also be increasing day-by-day. It’s go-to-market, we are starting in many-many countries, new inquiries. We have a [Technical Issues] in Germany. Very good stand for acrylic as well as [Technical Issues]. So, this, you will see you next quarter. Figures will totally change. And very good future. 100% subsidiary here also all Korean are dumping acrylic in India. [Technical Issues] We are trying our best. We already filed an application with government for anti-dumping and [Indecipherable] on this also. So, we are hopeful that they will accept our request. So, it is doing good. We are not doing in a good way.

Manoj Bahety — Carnelian Capital — Analyst

Okay and sir how is the feedback on quality as well as how is the ramp-up… [Speech Overlap]

Jagdish Gupta — Managing Director

Excellent, excellent. Now you can ask the market now 100% likely your Korean quality.

Manoj Bahety — Carnelian Capital — Analyst

No sir. I was getting definitely good feedback when I was chatting with the market and how we are scaling up our distribution network on this and basically, how we are targeting domestic market as well as export? If you can give some color on guidance. How — what are your aspiration on this business over next two-three years?

Jagdish Gupta — Managing Director

No, no, no. You see these distributors, already we have many — like their houses, CNF [Phonetic] we already [Technical Issues] and sales — then you can understand sale is increasing. Now export to USA, Isriel, Philippines, Singapore, Taiwan, we already every month one or two lead customer when they will — container will go to them, they will satisfy their reputation will come. The same thing happening with HPL 15, in that when we started its score. But we are in a good direction, you can understand overall data.

Manoj Bahety — Carnelian Capital — Analyst

Right, right. Any aspiration, any guidance would you like to share at this stage for next two-three years, sir, for this business?

Jagdish Gupta — Managing Director

No, no two three years, [Technical Issues]. For this reason, we go for the new machine which was installed last quarter. For this reason is we are thinking that their market is so big. For this reason, we ordered — we installed a new machine.

Manoj Bahety — Carnelian Capital — Analyst

Okay, that’s interesting, sir. Sir — yes sir carry-on, carry-on sir. You were saying something.

Jagdish Gupta — Managing Director

No, but there is no danger, nothing, no problem. It will be definitely you will see within one year [Technical Issues] one two years, you will see altogether changes.

Manoj Bahety — Carnelian Capital — Analyst

Great sir. Great, good to hear that. And sir second question is on the laminates side since large part of our revenues come from export, so how you are seeing the global scenario? Are you seeing any challenges in terms of demand outlook?

Jagdish Gupta — Managing Director

I think we have no challenges, if you see our volume is increasing in export. And every year you can see exactly, more than 50% increase in turnover from the last year. Maybe some changes are good for someone, bad for someone. For us we don’t think we are seeing any problem at all.

Manoj Bahety — Carnelian Capital — Analyst

Okay, okay, okay, and what is our current capacity utilization, sir? In laminates?

Jagdish Gupta — Managing Director

It’s 75% to 80%.

Manoj Bahety — Carnelian Capital — Analyst

Okay sir. Thank you so much sir for taking my questions. I will come back-in the queue.

Operator

Thank you. Our next question is from the line of Nikunj Doshi from Bay Capital. Please go ahead.

Nikunj Doshi — Bay Capital — Analyst

Hi, good afternoon. Just wanted some clarity on the capex plan. So, what are we spending on this INR150 crores, over what period? Means, what kind capacity additions that we’re looking at?

Jagdish Gupta — Managing Director

See we are, already we have a land. We have a company. We are going for [Technical Issues] same new product and unlike value ended product, in the same field for sport market. As well as small quantity maybe in domestic also.

Nikunj Doshi — Bay Capital — Analyst

And over what period we are going to spend this capex INR150 crores [Speech Overlap]?

Jagdish Gupta — Managing Director

99% within this year, hopefully.

Nikunj Doshi — Bay Capital — Analyst

In this year only. And this will help our capacity to increase by what percentage?

Jagdish Gupta — Managing Director

Sorry.

Nikunj Doshi — Bay Capital — Analyst

What percentage of our capacity increase will happen because of this capex?

Jagdish Gupta — Managing Director

That is totally different, product, or course, of HPL. A different value addition product and different type. So, turnover will be minimum INR500 crores from it.

Nikunj Doshi — Bay Capital — Analyst

Okay so this INR150 crore will help us in getting INR500 crores turnover?

Jagdish Gupta — Managing Director

Yes, yes, yes.

Nikunj Doshi — Bay Capital — Analyst

Okay. Thanks, thanks.

Operator

Thank you. Our next question is from the line of Keshav Lahoti from HDFC Securities, please go ahead.

Keshav Lahoti — HDFC Securities — Analyst

Hello, thank you for the opportunity. Sir, one bookkeeping question, what is the acrylic revenue in quarter four?

Jagdish Gupta — Managing Director

Hello?

Operator

Mr. Keshav Lahoti, may we ask you to please speak up as we are unable to hear you.

Keshav Lahoti — HDFC Securities — Analyst

Hello, is my voice good? Am I audible?

Operator

Yes, please go ahead.

Keshav Lahoti — HDFC Securities — Analyst

Yeah. So, what is the acrylic revenue in quarter four?

Jagdish Gupta — Managing Director

Total [Technical Issues] Approximately INR9 crores.

Keshav Lahoti — HDFC Securities — Analyst

Okay, and is it EBITDA breakeven as of now?

Jagdish Gupta — Managing Director

Yes, yes.

Keshav Lahoti — HDFC Securities — Analyst

Okay. Got it, and the new laminates expansion, which you are doing, so it will be primarily focused on export or it’s a broadly the mix of…

Jagdish Gupta — Managing Director

Mostly, mostly, mostly on export.

Keshav Lahoti — HDFC Securities — Analyst

Okay. And what sort of guidance is there for the next year? What sort of volume growth you are looking at? Earlier you were guiding laminates margin will be back to 20% in-quarter one, are we there?

Jagdish Gupta — Managing Director

[Technical Issues] hopefully everything you can see in the fourth quarter, maybe from the last year fourth quarter, there is almost more than 50% increase. We are quite hopeful that the figures are going domestically as well as export. Surely, which you are mentioning, even we will be near to that hopefully.

Operator

Thank you. Our next question is from the line of Nikhil Gada with Abakkus AMC. Please go ahead.

Nikhil Gada — Abakkus AMC — Analyst

Yeah, hi. Thanks for the opportunity and congrats sir on great set of numbers. Sir, my first question is regarding the capacity plan. Firstly, sir, we were going to do some brownfield expansion of close to 40% increase in capacity. So that is done?

Jagdish Gupta — Managing Director

No, no that I — that in from the existing plant only.

Nikhil Gada — Abakkus AMC — Analyst

Yeah, but is that capacity onboard?

Jagdish Gupta — Managing Director

That is a modernization of some machinery that is ongoing process.

Nikhil Gada — Abakkus AMC — Analyst

So, sir, let me ask it differently. So, we had a capacity of 14.4 million sheets.

Jagdish Gupta — Managing Director

Sorry, sorry for interruption, many times I mentioned you capacity 14 million sheets capacities always on if you go for [Technical Issues] 14 million [Technical Issues] we go for 0.06 mm, 0.07 mm then then it will be 14. We compare with compared to laminate and higher [Technical Issues], then it will go even 9 to 10 million only. So many those same question, I am mentioning that people as per our balance sheet has to predict report they mentioning quantity, but otherwise, this figure — value figure will be more better for you to understand.

Nikhil Gada — Abakkus AMC — Analyst

So, sir if you can help me understand, also from your perspective with the current capacity that we have in-place, what is the total revenue potential, we can achieve?

Jagdish Gupta — Managing Director

Yes, yes, absolutely correct. Many a times I told you that this plant and HPL only, not in acrylic or MDF or hot coating it is valued to INR1,300 crores.

Nikhil Gada — Abakkus AMC — Analyst

And this includes the 40% you had mentioned…

Jagdish Gupta — Managing Director

Yes 40% yes, like now, correct, that is already going on.

Nikhil Gada — Abakkus AMC — Analyst

No-no, sir, I understand, I understand. So now this INR1,200 or INR1,300 crores potential [Speech Overlap]

Jagdish Gupta — Managing Director

[Foreign Speech] mismatch from some commodity, some high value.

Nikhil Gada — Abakkus AMC — Analyst

Understood, understood. Got it sir, and sir, secondly on the margin front, we are seeing the raw-material correction, especially on the chemicals front. Are we passing it on in the market or we are holding on to it or we are able to [Speech Overlap]

Jagdish Gupta — Managing Director

Seeing on market first of all. There is no drastically decrease in prices of chemicals drastically, not drastically. It is coming, if it increases by 50% and they decreased by 25% to 30% you cannot say it is at same level. Number-one, number two, when prices increase so much, we have not increased the prices same, we could not, people — we could not put to our end customer same prices. So there at the moment, domestically, of course, people are foreseen to these [Technical Issues] market. Pressure is there but no much pressure. Because everybody knows it that we have yearly the 5% to 10% maximum. Whereas [Technical Issues] increases by 40% to 50%. I think you understand what I mean.

Nikhil Gada — Abakkus AMC — Analyst

Yeah, yeah, I understood. Got it sir. And just couple of more questions so-far, specifically for FY ’23, can you give the geographical mix of our export business, based on FY ’23 number?

Jagdish Gupta — Managing Director

Same thing is going on. Same domestic, versus but we are more focusing on domestic. We are hopeful that the figure will little bit change like now we are doing 70, 30; 65, 35, like two-third, one-third, so we are hopeful that it will be 60, 40 in future.

Nikhil Gada — Abakkus AMC — Analyst

Sir, I get that, for exports, specifically for export, I am asking a breakup, which we used to do 40%, 45% year around [Phonetic] and I think [Speech Overlap]

Jagdish Gupta — Managing Director

Okay, okay. Now everywhere there is a sale increase, everywhere, these people say every time there is a recession, but we have not seen any recession. In our HPL and maybe in other product, there can be in recession.

Nikhil Gada — Abakkus AMC — Analyst

Any new markets you would like to call out [Speech Overlap].

Jagdish Gupta — Managing Director

Yes, yes, yes. Now, we have presence is everywhere almost going, so yearly small quantities, slowly we will increase more.

Nikhil Gada — Abakkus AMC — Analyst

Sir, how much would be U.S. as of now?

Jagdish Gupta — Managing Director

U.S. maybe 4% to 5% definitely. Total, if anything we need, specifically [Technical Issues] but now we are doing good in U.S. also.

Nikhil Gada — Abakkus AMC — Analyst

Okay, sir. Fair enough. And sir, just lastly on this INR150 crores capex, are we going to do any — raising any debt or it will be through internal accruals completely?

Jagdish Gupta — Managing Director

I think no need for any debt. Most probably we will do it from our own.

Nikhil Gada — Abakkus AMC — Analyst

On internal accruals, right.

Jagdish Gupta — Managing Director

Yes.

Nikhil Gada — Abakkus AMC — Analyst

Okay, sir got it. Thank you, so much for answering all my questions. All the best.

Jagdish Gupta — Managing Director

Thank you.

Ashish Poddar — Systematix Institutional Equities — Analyst

Before we go to the next participant I think he wanted to understand the current revenue potential is INR1,300 crores without this INR40 crore capex on the brownfield.

Jagdish Gupta — Managing Director

No, no, no, no, it is including that. That is already going on. Half, we have already done, maybe even two three months, that is [Operator Closing Remarks] INR40 crores means balancing of machinery.

Ashish Poddar — Systematix Institutional Equities — Analyst

Okay, so that includes that INR1,300 crore potential is including that.

Jagdish Gupta — Managing Director

Yes.

Ashish Poddar — Systematix Institutional Equities — Analyst

Okay sir, thank you. Rico you can go ahead.

Operator

Thank you. Our next question is from the line of Aditya Sharma from Birla AMC. Please go ahead.

Aditya Sharma — Birla AMC — Analyst

Yeah, sir. Hi thanks for the opportunity. Wanted to understand more about the expansion plan when we talk about this INR150 crores of investment. Can you please help us understand what is the value-added product that we’re trying to manufacture and what is the end-product demand? If you could just elaborate on the product front, it would be really helpful. Thank you.

Jagdish Gupta — Managing Director

No, you’ll see it is a very initial stage. The reason being, it is in different sizes. Market is a very big, may be [Technical Issues], there will not be many big player in the international markets when we see different sizes, different thicknesses. Of course, we are going for that. And there is a very big market in export market. Next quarter, next maybe in next call, we will explain you everything.

Aditya Sharma — Birla AMC — Analyst

Okay, just wanted to understand, so is this manufacturing setup, completely different from our existing setup, are we… [Speech Overlap]

Jagdish Gupta — Managing Director

[Technical Issues] different and we will go for fully, we will try to go for fully automation and everything, it will be most modern plant, better than our existing plant.

Aditya Sharma — Birla AMC — Analyst

Got it market, hoping to get more details on this.

Jagdish Gupta — Managing Director

Next — next quarter definitely.

Aditya Sharma — Birla AMC — Analyst

Sure, sir. Sure sir. Thank you so much.

Jagdish Gupta — Managing Director

Okay, thank you.

Operator

Thank you. Our next question is from the line of Depesh Kashyap from Invesco AMC. Please go ahead. Yeah, hi sir, thank you for taking my questions. Sir, my question is again on capex. The INR150 crore capex that you’re doing, is it same location? The 28 acres that you said is empty right now, that is going to be used for this?

Jagdish Gupta — Managing Director

[Technical Issues] Your voice was breaking. Could not understand.

Depesh Kashyap — Invesco AMC — Analyst

Sir, I am saying this new capex is going to come at the same-location in Panchkula or some other location?

Jagdish Gupta — Managing Director

Yes, yes, the same location. We have additional land already there. We have land, everything, the company is here. Stylam Panel limited already registered, everything is here.

Depesh Kashyap — Invesco AMC — Analyst

Okay, same location got it. And sir also you said this INR40 crore capex that you’re going to do is going to happen this year, right. Almost 50% is already spent, 50% of already spent. So around INR20 crores will be spent in this year?

Jagdish Gupta — Managing Director

Maybe you had mentioned two or three times it is only modernization and upgradation of machinery and the balancing of equipment.

Depesh Kashyap — Invesco AMC — Analyst

No, I understand, I’m just looking at the numbers, so around INR20 crores you’re saying is spending, and you’re going to spend 99% of INR150 crores this year. So, it comes around INR170 crore capex you’re looking for FY ’24, right, and if I look at your operating cash-flow, it was INR66 crores, right. So, and you also mentioned that you want to be net-debt free, so I just wanted to understand how this all adds up?

Jagdish Gupta — Managing Director

No [Foreign Speech].

Depesh Kashyap — Invesco AMC — Analyst

[Foreign Speech] operating cash-flow this year is around INR66 crores.

Jagdish Gupta — Managing Director

[Foreign Speech] So naturally, we are putting much more.

Depesh Kashyap — Invesco AMC — Analyst

Okay, okay, I will understand more of it offline.

Jagdish Gupta — Managing Director

[Foreign Speech] then we can take some part of loan also if need.

Depesh Kashyap — Invesco AMC — Analyst

Got it, got it, but — but one thing is clear, everything is going to happen in FY ’24 capex-wise, that is clear, right.

Jagdish Gupta — Managing Director

Yes, we are trying our best.

Depesh Kashyap — Invesco AMC — Analyst

Understood, understood. Secondly sir, you had excellent improvement in the working capital. So just wanted to understand [Foreign Speech] receivable days have come down to 148 days, right from 66, so this is the lowest in last 10 to 12 years of history right. So, anything you want to call-out? Is there any structural improvement that you’ve seen and any old receivables that were like pending for the last two or three years?

Jagdish Gupta — Managing Director

Yes, yes, you’re right, we are doing our best to domestically our receivables is going down, right. So, we are trying our best you we’ll see next quarter. Maybe it is improving every day. It is good to sign or bad sign?

Depesh Kashyap — Invesco AMC — Analyst

No, it’s a very good. You’re absolutely doing a good job but sir I wanted to understand, the receivables which are under for two to three years at a pending write-down INR15 crores right now [Speech Overlap].

Jagdish Gupta — Managing Director

Look, people are going to pay us when the company is growing, brand-name is established, people are [Technical Issues].

Depesh Kashyap — Invesco AMC — Analyst

Which already is still to come, or it’s already booked in the numbers, I just wanted to clarify that?

Jagdish Gupta — Managing Director

[Foreign Speech]

Depesh Kashyap — Invesco AMC — Analyst

Okay, okay, got it. And sir, also you are saying the new plant [Foreign Speech] capex, that is mainly for the export market, but you have also said in the previous calls and going-forward, you will focus is also on the domestic market. So how it [Speech Overlap]

Jagdish Gupta — Managing Director

Of course, domestic [Foreign Speech] that will sell in domestic market also.

Depesh Kashyap — Invesco AMC — Analyst

Okay, okay and sir, lastly on the receivable days [Foreign Speech] working capital [Foreign Speech] right. So, any deterioration you expect in working capital if the domestic ratio goes up?

Jagdish Gupta — Managing Director

Domestic [Foreign Speech] revenue mix. Do you expect any deterioration in the working capital cycle? [Foreign Speech] working capital [Foreign Speech] we are buying everything on cash payment. There is no effect or other, there is still we have inventory. We are going to reduce that inventory also, if there is any need. We are not much focusing. Then the saving increasing that is always increasing, your expenses are decreasing. So I think everything is coming back to where you will see, God willing. Balance sheet will be more back. That I can say. Not more than this.

Depesh Kashyap — Invesco AMC — Analyst

Great sir, last question, sir, just wanted to understand your thoughts on the demand scenario, because you are investing a big way according to your balance sheet in the laminate market, but when I look at your peers right, your other bigger players, they are investing more towards the particle board. So, they’re not investing so much in laminate. So, what is that you are seeing and they are not seeing? Is there any export market opportunity that you figured out or how is it?

Jagdish Gupta — Managing Director

[Foreign Speech] particle board — perception — plywood. [Foreign Speech] 90%, he will be also on the line. [Foreign Speech] why you are going for it backward class integration, you should go for new things. [Foreign Speech] unorganized sector [Foreign Speech] 100% like the idea, [Foreign Speech] perception and they are going for MDF, particle board, plywood. But for our — intention, we are more focused on these laminates and different kind of products. You can see our figures. For this reason, we are more focusing on those on where our figures are going on. And if we go for same thing, particle and MDF plant. Their cost is also, not more than INR300 crore to INR400 crores and turnover will be not more than INR500 crores to INR600 crores. We are thinking, maybe they are right, maybe we are not right, everybody has their own spare over key.

Depesh Kashyap — Invesco AMC — Analyst

Sir [Foreign Speech] turnover target [Foreign Speech] in how many years can that be achieved?

Jagdish Gupta — Managing Director

[Foreign Speech] easily we can achieve in two to three years, very easily.

Depesh Kashyap — Invesco AMC — Analyst

Great sir, great [Foreign Speech]. Thank you and all the best. Thanks.

Operator

Our next question is from the line of Manoj Bahety from Carnelian Capital, please go ahead.

Manoj Bahety — Carnelian Capital — Analyst

Thanks for taking my follow-up question. Sir just a little clarification on the capex. You mentioned that INR40 crore capex will increase our capacity by up to 40%, so this plus INR150 crores, so INR40 crores will take-up our existing laminates capacity up by 40% and over and above that, we are spending INR150 crores more to put the new capacity, is it right?

Jagdish Gupta — Managing Director

Yes, yes you are right but this INR20 crores we have mentioned six months back up and it is ongoing process. We are already investing on it.

Manoj Bahety — Carnelian Capital — Analyst

Okay, okay.

Jagdish Gupta — Managing Director

We are already investing on it. 50% already invested.

Manoj Bahety — Carnelian Capital — Analyst

[Foreign Speech] 80% capacity utilization level [Foreign Speech]

Jagdish Gupta — Managing Director

[Foreign Speech] to can be extendable to [Indecipherable]. We are going for that. We are going for a different way. So more balancing of recruitment with something [Foreign Speech] modernization and utilization of capacity, we are doing that.

Manoj Bahety — Carnelian Capital — Analyst

Okay, okay, got it. And sir, lastly [Foreign Speech] acrylic capacity, if you can help me on that, what is our current capacity, how much revenue we can generate out of that capacity and [Foreign Speech] initially, our focus will be domestic market only because lot of imports are happening in India. Or we will be targeting both also.

Jagdish Gupta — Managing Director

Both. We mentioned many times, both our capacity, total capacity is up to a minimum INR400 crores. But we don’t know whether how many years, whether two years it will take, it will take three years, you can achieve this figure, but the market is growing [Foreign Speech] domestically as well as in export.

Manoj Bahety — Carnelian Capital — Analyst

Okay. So out of current capacity, you can generate INR400 crores and your focus will be both exports and domestic market, right?

Jagdish Gupta — Managing Director

Both, both, domestic and export.

Manoj Bahety — Carnelian Capital — Analyst

Okay, okay and what kind margins or contribution we can generate from this product? Is it better than laminates or [Speech Overlap].

Jagdish Gupta — Managing Director

That is very initial stage, believing that depends on money [Technical Issues] In that also, why do we like alignment [Phonetic]. There are many other color when we will utilize our capacities same manpower, same electricity, expenses will go down. So that we will, but surely looks it will be that way, if not that way, it should be same like. Okay, got it. Thank you so much. Thank you.

Operator

Thank you. Our next question is from the line of Udit Gajiwala from Yes Securities, please go ahead.

Udit Gajiwala — Yes Securities — Analyst

Yeah, Thank you for taking up my question, sir. Majority of the questions have been answered. Sir, just on the new capex that we are coming up with, so just want to understand that on INR500 crores revenue, what kind of realizations, could we expect on this kind shape that you’re dedicating for exports?

Jagdish Gupta — Managing Director

No that will be — certainly very good question. We are hopeful that the new margin should be more better then [Technical Issues]. Definitely it will be more. The reason being all sizes, different sizes and there is — there will be no much competition in that.

Udit Gajiwala — Yes Securities — Analyst

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

Jagdish Gupta — Managing Director

Thank you.

Operator

Thank you. Our next question is from the line of Harsh Shah from Dalal & Broacha Stock Broking Private Limited. Please go ahead. [Foreign Speech] in Acrylic, can we reach INR50 crores on revenue in FY ’24?

Jagdish Gupta — Managing Director

Revenue, yes. Yes, of course. If we cannot get the INR50 crore, then there is no use, we will close down the plant.

Harsh Shah — Dalal & Broacha Stock Broking Private Limited — Analyst

Okay. And could you give the volume split in domestic and export market for the quarter?

Jagdish Gupta — Managing Director

Only for current quarter or overall performance?

Harsh Shah — Dalal & Broacha Stock Broking Private Limited — Analyst

No, no laminates.

Jagdish Gupta — Managing Director

Laminates quarter, we have INR86 crores last quarter and INR151 in export.

Harsh Shah — Dalal & Broacha Stock Broking Private Limited — Analyst

I am talking about the volume split.

Jagdish Gupta — Managing Director

[Foreign Speech]

Harsh Shah — Dalal & Broacha Stock Broking Private Limited — Analyst

And within your domestic market, where are we growing much faster. Is it the Northern region or the Southern India?

Jagdish Gupta — Managing Director

Could you repeat the question?

Harsh Shah — Dalal & Broacha Stock Broking Private Limited — Analyst

Yes. So, my question is within the domestic market, where are we going faster? Is it in Northern India or the southern part of the country?

Jagdish Gupta — Managing Director

If we talk about the Indian domestic market, South India is the first — is the area where Stylam is growing and…

Operator

Sorry to interrupt, sir. May we request you to come closer to the speaker phone as the voice is not audible?

Jagdish Gupta — Managing Director

Is it fine now?

Operator

Yes sir, please go ahead.

Jagdish Gupta — Managing Director

Yeah. So, in India, Stylam is growing better at South, we have reached a dominant position in South and we are concentrating more on South followed by North and then West and then East. Overall, if you look at the Indian domestic market, building material wise, South market is more stronger in terms of sales.

Harsh Shah — Dalal & Broacha Stock Broking Private Limited — Analyst

Yeah. So, Y-o-Y, how much would we have grown in the southern part?

Jagdish Gupta — Managing Director

Southern, we have almost grown by what we started a year to almost we have grown by 40% to 45%.

Harsh Shah — Dalal & Broacha Stock Broking Private Limited — Analyst

Okay, great, thanks. That’s it from my end.

Jagdish Gupta — Managing Director

Okay, thank you.

Operator

Thank you. Our next question is from the line of Darshil Zaveri from Crown Capital. Please go ahead.

Darshil Zaveri — Crown Capital — Analyst

Good evening, sir and thank you so much for taking my question. Firstly, congratulations on a great set of results. So sir, I just wanted to ask what kind of — because we’ve been growing so far, what kind of revenue growth can we expect for the next two years since we are nearing a very high capacity utilization. And will the margins now have been stable [Indecipherable] this year? So what kind of margins do we see going forward? Those are my questions.

Jagdish Gupta — Managing Director

Production, production wise, we are trying our best. We are quite hopeful that every year, which should be minimum 20% to 25% increase. When there will be growth in sales, automatically your expenses will reduce not proportionately, there will be no expense. We have not much administrative costs and not much sales people when sales were increased. So definitely, we are expecting 20%, 30% increase in this coming year, then the capacity will increase in different sizes, then growth may be more next to next year. But margin will also improve accordingly.

Darshil Zaveri — Crown Capital — Analyst

That helps a lot. And sir, I just wanted to ask, are Acrylic margins will be similar to our laminate margins or will they be…[Speech Overlap]

Jagdish Gupta — Managing Director

Like I told you, looks similar. Maybe more — now we have just capacity utilizing only 5% only, 5% to 6%. When it will be capacity increase, utilization will increase, automatically expenses will totally reduce.

Darshil Zaveri — Crown Capital — Analyst

Okay, okay sir. Thank you sir, that has been all and all the best for the next year.

Jagdish Gupta — Managing Director

Thank you.

Operator

Thank you. Our next question is from the line of Dipanshu [Phonetic] from Vizi Capital. Please go ahead.

Dipanshu — Vizi Capital — Analyst

Sir, I had a couple of questions. One of the thing is that on a quarter-on-quarter basis, if we see from last quarter, we have seen a decline in volume. So any reason you want to call out for the same?

Jagdish Gupta — Managing Director

[Foreign Speech]

Dipanshu — Vizi Capital — Analyst

From demand side, there is nothing an issue. It is just a product mix thing.

Jagdish Gupta — Managing Director

Nothing on issue in demand side. Rather, it is a better we are going for a high-value product, both ways, domestic and export. [Foreign Speech]

Dipanshu — Vizi Capital — Analyst

What I wanted to understand from you guys is what are the marketing initiatives, what you guys have taken in FY ’23? And what are you going to spend on marketing or some other activities for expanding your domestic as well as export market. Any marketing initiatives?

Jagdish Gupta — Managing Director

No, no, you see. Export, I told you in my nephew is sitting with me. He will explain you domestically. Export, we don’t need any marketing people. We already have eight, nine people, which is more than enough. We have not our office anywhere, just marketing, traveling from here.

Kishan Nagpal — Chief Financial Officer

So domestic market, yes in domestic market, we are close to more than 150 people, 150 sales people all over India, and all our structure is in place. So looking forward, we don’t feel that there will be a much addition of manpower in domestic sales business. So overall, the structure as a whole for Stylam is already in place for sales team also.

Dipanshu — Vizi Capital — Analyst

Also, we have seen a good amount, as he is also mentioning, we have seen a good amount of increase in employee cost over, say, last one year, we have seen almost INR4 crores, INR4.5 crores kind of increase on a year-on-year basis. So, do you think this to continue increasing? Or do you think that you have uploaded the employees expansion and now the results on the domestic market. And so, the margin expansion can play out in this year? Do you have any view on this?

Jagdish Gupta — Managing Director

100%, as already told that the increase in employee cost is because of the increase in salespeople. And overall, if we look at the revenue increase, the revenue increase will happen this year and no more salespeople will increase. And overall, if you look at the employee cost at the factory end, the manufacturing facilities end, most of the people are in place and the administration cost does not increase. So employee costs should not increase.

Dipanshu — Vizi Capital — Analyst

So what are the other levers for increase in margin? So because we used to operate at a 20% plus margin. Now again we are seeing a recovery in margin. How do we see this trend to play out? What are the other levers which we have, which can help us in increasing margins, say, the transportation cost or whatever. So from which point do we see that margins can expand in this financial year?

Jagdish Gupta — Managing Director

In this financial year with better reach of the brand and more brand acceptability in the market, the — and with more sale and more production, the cost will go down, and we feel that the margin should improve. In domestic market, overall, if we see the brand presence has increased and it should help us to increase the margin there also. And looking at the — for the exports, the transportation cost, they’re going down, like the container costs. So this all should help in increasing the margin for the next financial year, hopefully.

Dipanshu — Vizi Capital — Analyst

So, can we expect 100 to 150 basis point kind of increase in the full year?

Jagdish Gupta — Managing Director

Yes, surely.

Dipanshu — Vizi Capital — Analyst

Okay, sir. Sir, one point on this expansion, what we are trying to do. So, we are spending almost INR150 crores. So is it — so are you say fully committed that you want to do it in, say, one year or it depends upon how the cash flow situation will progress through the year?

Jagdish Gupta — Managing Director

No, no, no, I’m telling you very frankly, we were targeting to start it before March. We have already covered — going to cover under [Technical Issues] startup there is a benefit of income tax 15%. So we’re targeting to finish this — start within the year.

Dipanshu — Vizi Capital — Analyst

Okay sir, very good, very good. Thanks for taking my questions. All the best.

Jagdish Gupta — Managing Director

Thank you.

Operator

Thank you. Ladies and gentlemen, due to time constraint, we will be only taking more two questions. Those will be the last two questions. Thank you. Our next question is from the line of Alisha Mahawla from Envision Capital. Please go ahead.

Alisha Mahawla — Envision Capital — Analyst

Hi sir, good afternoon. Thank you for taking my questions. [Foreign Speech] sequential basis, the revenue is declining. So is there any seasonality or any one off?

Jagdish Gupta — Managing Director

Sorry. revenue is declining in export market. How?

Alisha Mahawla — Envision Capital — Analyst

In Q1, it was INR170 crores, then it was INR165 crores, INR155 crores and INR150 crores of the revenue, in exports.

Jagdish Gupta — Managing Director

Madam, actually at that time, ocean freight was almost 15%, 20%. Now it is reduced to the same level, almost pre-COVID level. But our total revenue is not declining.

Alisha Mahawla — Envision Capital — Analyst

Okay. Understood. [Foreign Speech]

Jagdish Gupta — Managing Director

[Foreign Speech]

Alisha Mahawla — Envision Capital — Analyst

And this quarter, the 2.7 million sheets we have sold, in that, what is the domestic volume? In laminates it is 2.7. [Foreign Speech]

Kishan Nagpal — Chief Financial Officer

[Foreign Speech] [Foreign Speech]

Jagdish Gupta — Managing Director

You are talking about 2.7, first quarter only. [Foreign Speech]

Alisha Mahawla — Envision Capital — Analyst

[Foreign Speech]

Jagdish Gupta — Managing Director

It will be volume, you see Madam. [Foreign Speech] If there is a — now the commodity product, volume can be more — if there is a value additioning product, then volume can be less but revenue can be more.

Alisha Mahawla — Envision Capital — Analyst

[Foreign Speech]?

Jagdish Gupta — Managing Director

[Foreign Speech]

Alisha Mahawla — Envision Capital — Analyst

[Foreign Speech]

Jagdish Gupta — Managing Director

You are very intelligent. Absolutely correct, Madam.

Alisha Mahawla — Envision Capital — Analyst

Okay. [Foreign Speech]. Thank you so much sir.

Jagdish Gupta — Managing Director

Thank you.

Operator

Thank you. Our next question is from the line of Puja Doshi from Praj Financial [Phonetic].

Puja Doshi — Praj Financial — Analyst

Thanks for taking my question. And sir, congratulations for good set of numbers. Sir, my first question is that we are currently at 14.3 million laminate sheet capacity. So that will increase to how many million sheets with this INR500 crores of capital expenditure that you are doing?

Jagdish Gupta — Managing Director

Madam, I told you, mentioned that, that product is totally different. Maybe you were going from this presentation and my speech, I mentioned that sheet, number does not matter. If it is a mixed product like numbers we are producing only 0.6 and 0.7 then with 14 million. If we go for more compact, more value addition, one and one plus then quantity may go less than 10 million also. Same thing in the new products which we are going, we can only explain you after next to next quarter or next quarter but volume-wise, I cannot tell you, but value I can confirm you that it can be minimum INR500 crores.

Puja Doshi — Praj Financial — Analyst

Understood, understood. Okay. Okay. Got that. And sir, secondly, there’s a lot of competition in laminate segment. So I just wanted to understand what is the right to win there? And if you could talk a little bit on the innovation, distribution, pricing and after-sales in laminate.

Jagdish Gupta — Managing Director

Madam, if you go worldwide, everywhere is competition. You have to go ahead with competition. [Foreign Speech] we are selling in export not to Middle East country much, we are selling to Europe, U.S.A. If our brand name is moving in that country, why not in India. [Foreign Speech] if you go anywhere in India, you will find our brand presence. [Foreign Speech].

Puja Doshi — Praj Financial — Analyst

[Foreign Speech] demand, whether it will be driven by replacement demand or new housing demand?

Jagdish Gupta — Managing Director

[Foreign Speech] people, they know our brand name. Now they have more confidence on Stylam brand. [Foreign Speech] you will find a dramatic change.

Puja Doshi — Praj Financial — Analyst

Okay, got it sir. Alright, thank you, that’s it from my side.

Operator

That was the last question of a question-and-answer session. I now hand the conference over to Mr. Ashish Poddar for closing comments.

Ashish Poddar — Systematix Institutional Equities — Analyst

Yeah. Thank you, all the participants, for joining us today. I hope you got answers for all your questions. I wish you a good day ahead. Thank you. so much.

Operator

[Operator Closing Remarks]