The Supreme Industries Limited (NSE: SUPREMEIND) Q3 2026 Earnings Call dated Jan. 21, 2026
Corporate Participants:
Aasim Bharde — Vice President – Research
M. P. Taparia — Managing Director
P. C. Somani — Chief Financial Officer
Analysts:
Shravan Shah — Analyst
Praveen Sahay — Analyst
Utkarsh Nopany — Analyst
Sonali Salgaonkar — Analyst
Rahul Agarwal — Analyst
Keshav Lahoti — Analyst
Sneha Talreja — Analyst
Meet — Analyst
Tejas Pradhan — Analyst
Vipul Kumar Shah — Analyst
Ronak Ostwal — Analyst
Priyanka — Analyst
Udit Gajiwala — Analyst
Shaleen Kumar — Analyst
Arun Baid — Analyst
Sanil Jain — Analyst
Yogesh Mittal — Analyst
Shailly Jain — Analyst
Varun Jalsaria — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Supreme Industries Q3 FY 2026 Earnings Conference Call, hosted by DAM Capital Advisors Limited. [Operator Instructions]
I now hand the conference over to Mr. Aasim Bharde from DAM Capital Advisors Limited. Thank you, and over to you, sir.
Aasim Bharde — Vice President – Research
Thanks. Good evening, everyone. I would like to welcome you all on Supreme Industries Q3 FY 2026 Results Call. We have the senior management of the company with us on the call, led by Mr. Taparia, the Managing Director, to whom I hand over the call now.
Thank you, and over to you, sir.
M. P. Taparia — Managing Director
Thank you. Good afternoon. Thank you, very much Mr. Aasim. I’m M P Taparia, Managing Director of the Supreme Industry Limited. I, along with my colleague, Shri PC. Somani, CFO; and Shri RJ Saboo, Vice President Corporate Affair and Company Secretary, welcome all the participant who are participating in the discussion of the unaudited standalone and consolidated financial result for quarter and nine-month period ended 31st December 2025. The standalone results and the consolidated results are already with you, I will be brief on company product operating performance and other highlight.
The company sold 522,000 metric tonne of plastic goods and achieved net product turnover of INR7,582 crores during the nine months of the current year against sale of 4,74,645 tons and net product turnover of INR7,336 crore in the corresponding nine month of previous year, achieving volume and product value growth of about 10% and 3% respectively. The consolidated operating profit and profit after tax for the nine month of the current year amounted to INR980 crore and INR520 crore, as compared to INR1,103 crore and INR667 crore respectively, for the corresponding period of the previous year, resulting in a decrease of 11% and 22% respectively. The business scenario of all the product segment of the company for the third quarter ended 31 December 2025, as compared to the corresponding quarter of previous year has been as under. Plastic Piping system business grew by 16% in volume and 10% in value term. Packaging Product segment business grew 2% in volume and degrew by 2% in value term. Industrial Product segment business remained flat in volume and grew by 1% value term. Consumer Product segment business grew by 8% in volume and 5% in value term. The overall turnover of value-added product remained at INR1,118 crore during the third quarter of the current year against INR961 crore in the corresponding quarter of the previous year, achieving growth of around 16%.
Business outlook, world economy growth is affected by geopolitical tension in several regions. This has resulted in extreme volatility in commodity prices. Combination of these factors have resulted in lower growth in world economy in the year 2025. The company believes this downward trend has now reversed. Polymer prices have started upward trend. The polymer provision has gone through quite tough time, which has resulted into closure of several petrochemical plant and all running at quite low capacity. Combined outcome of these action has put break in erosion of the prices of polymers. Starting from the calendar year 2026, the polymer price has have started upward movement. The company is operating in various segment of the business. The company has grown 10% in overall volume and 13% in Plastic Piping business in first nine month of the current year. The company expect to grow overall in volume between 12% to 14% and for Plastic Piping system, we expect to grow 15% to 17% during the year over previous year.
Plastic Piping business growth is now coming back to normalcy as continuous downward price trend has been arrested, driven by good monsoon, favorable economic condition and encompassing housing, agriculture, infrastructure in the last quarter of FY 2026, we put good demand growth in the year. The company is well equipped to meet increased demand of it’s Plastic Piping product portfolio. Newly launched PP Silent Pipe System and technical collaboration with POLOPLAST of Austria has been well received in the market. The company is expanding its range of [Indecipherable] and bathware product. The company continue to invest and enlarge the product basket in all the division and to remain focused in increasing it’s share of value added product. Capacity expansion at various location for plastic piping business and protective packaging product taken in hand are nearing completion and shall be available for full fiscal year FY 2027.
As informed earlier, new greenfield plant capacities have taken up for execution in this financial year. [Indecipherable] acquisition are fully integrated and realigned and shall be available for the full potential from this month or from February onward. Total installed capacity of the plastic piping business shall lead to 1 million ton per annum by FY 2026. Project execution and site for profile for window is now nearing completion, production cash have commenced. The company expects to launch commercial production of window in the market from February 2026. During the first nine month of the current year, company has made capex outflow of INR1,031 crore, including acquisition of Wavin business. The company expect total cash outflow during this year will be around INR1,200 crore towards existing and new capital commitment, including acquisition of Wavin business. Entire capital shall be funded from internal accrual. All other product divisions are faring well and envisage moderate growth during the year. The protective packaging product division is especially driving it’s growth plan by increasing product range, expanding capacity and offering customized solution.
The company has fully executed Letter of Intent for supply of 200,000 numbers of 10 kilo composite LPG cylinder to Bharat Petroleum Corporation Limited. Company issued further Letter of Intent for supply of 200,000 number of composite cylinder to Bharat Petroleum Corporate Limited, which shall be executed in the current quarter. The company continues to work to expand export geography and participate national and international exhibition in the field of energy and gas. This is a brief and overall summary for the quarter and half year ended — quarter and half year under reference. Thank you for your patience now.
Now I and my colleague, Shri PC Somani and Shri RJ Saboo are available to reply to various queries raised by all of you. Thank you very much.
Questions and Answers:
Operator
Sir, thank you very much. [Operator Instructions] The first question is from the line of Shravan Shah from Dolat Capital. Please go ahead.
Shravan Shah
Yes, thank you, sir. Sir, first on the volume front. So this quarter Wavin volume was how much?
M. P. Taparia
Wavin, part of it now because after they are making same product now what we are making.
Shravan Shah
Okay, okay.
M. P. Taparia
So, we cannot say how much volume is from Wavin, but we got Wavin customer also more than 180 customers joined our company and they made the same product what we were making only some range very small range were different. So, you can see a part of overall volume of 16% growth in the quarter compressed growth due to Wavin also.
Shravan Shah
Okay, got it. And sir, now given that now we are maintaining the piping volume growth of 15% to 17% that means the for fourth quarter of 2026 the ask rate is 20% to 27%. Are we are confident that this will be done given also if you can throw light in terms of how the PVC prices have increased till now and how do we see given the China where whatever that will be applicable from the 1st April. So, before that is there a possibility that further price of PVC can decline?
M. P. Taparia
You put two, three question together Basically this quarter onward the demand for [Indecipherable] to come full way that weak demand season start from March and this quarter will include the month of March. So, demand for eco segment come in always big way after the harvesting of crops that happens end of February and other sugar cane being harvested, so we are seeing the demand coming from eco sector. So we are quite confident that the growth this year — this quarter will be adequate to justify our guidance of 15% to 17%. We are quite confident
Shravan Shah
Yes —
M. P. Taparia
In third quarter, we have grown by 16%.
Shravan Shah
Yes, true, true, true
M. P. Taparia
And plastic now, they started hardening. First thing I say they stop going down. The PVC world booking has gone down up to $580 and now currently $640 and the rupee also become big, earlier it was INR89 and now it is close to INR92 and the local maker fix the price based on import quality. So, the producer price have gone up and with the rupee depreciating further and China putting some restriction on the from 1st April 2026, we anticipate that price may go further up little bit.
Shravan Shah
Got it. Sir, now on the margin front, so in the nine month and even this quarter also our overall EBITDA margin as 12.1% even if we exclude the labor code extra of INR15 crore or also then also 12.3%, but we were looking at previously 14.5% to 15%. So now how one can look at the margin for fourth quarter and even let’s say going forward for FY 2027-2028 how one can look at the margin?
M. P. Taparia
2027-28 we will talk in April, for the current year now we have revised our guideline and we now believe that our margin will be between 13.5% to 14%.
Shravan Shah
But sir that that also means that in the fourth quarter we are looking at minimum 15%, 16% plus kind of a margin.
M. P. Taparia
[Indecipherable] please.
Shravan Shah
Okay, okay. And lastly sir, finance cost, other income and profit from associate, all these three things particularly other income and profit from associate has came down and finance cost has gone up. So how one can look at on the quarterly run rate basis?
P. C. Somani
You see finance cost increase is a temporary, for this funding the capex plan totally for the current year. So some short term borrowings have been taken, not compromising on the liquidity of the balances, that’s why finance cost is a bit higher with this quarter it was there in last quarter. Going forward, we will again be having a good surplus in hand. Our whole capex plan is already been compared as mentioned INR1,031 crore is always outflow has been made, how much outflow has been planned now for the current year and other income is since the other income mainly consist of the surplus being generated from the liquid balances since we had a healthy operating balance of INR950 crore surplus by putting into the liquid schemes, which has come down, so that is a temporary place and ultimately if you want to put our money for business, the investment is not the core activity.
Shravan Shah
True, true, true. So, the — in Q2 the other income was INR15.5 crore and now it came to close to INR3.8 crore, so from Q4 again can we see a INR8 crore, INR10 crore kind of a number or this kind of a number is a normalized one one can look at?
P. C. Somani
You can start seeing from next year it is not in this quarter because this quarter we have to wipe out this small borrowing what we have taken, so the interest cost will come down, finance cost will come down and the finance cost is again combination of actual borrowing, as well as Ind AS accounting also.
Shravan Shah
And even for profit from associates are for nine month also significantly from INR88 odd crore, INR50 odd crore has came down, yes, the last one only.
Operator
Okay.
P. C. Somani
Supreme petrochem results as you have seen yesterday are not to the expectation level what we expect and this is the result of that one.
Shravan Shah
Okay. Okay. Thank you, sir and all the best.
Operator
Thank you. [Operator Instructions] Our next question comes from the line of Praveen Sahay from PL Capital. Please go ahead.
Praveen Sahay
Yes, thank you for opportunity. Can you give the capacity number for all the three vertical? And as well as you know the kind of a capex you had done what kind of a capacity you are looking for FY 2027 for all four verticals?
P. C. Somani
For FY 2027 we will, we will talk in April.
Praveen Sahay
Okay. And so right now if you can give the capacity —
P. C. Somani
As mentioned last time also piping, plastic piping will be 1 million ton.
M. P. Taparia
Thank you. Okay.
P. C. Somani
And other three segments packaging, industrial —
M. P. Taparia
We will talk in April only.
P. C. Somani
Yes. So total will be 12.2. So, there is no much addition into the other segment in any case.
Praveen Sahay
Okay, okay, got it, sir. Got it. Second question is related to the cylinder, so that’s a — you had mentioned that’s 2 lakh of cylinders already executed and 2 lakh of LOI you have, how much of the revenue have generated and expecting from the pipeline of LOI?
P. C. Somani
No, I think we have mentioned into the declaration to [Indecipherable] this 2 lakh cylinder will generate revenue around INR54 crore.
Praveen Sahay
INR54 crore you had already generated with execution of a 2 lakh cylinder of LOI?
P. C. Somani
Correct, correct.
Praveen Sahay
Okay. And the similar amount you are expected to do out?
P. C. Somani
Correct.
Praveen Sahay
Thank you, sir. I’ll come in.
Operator
Thank you. Our next question comes from the line of Utkarsh Nopany from Anand Rathi. Please go ahead.
Utkarsh Nopany
Yes. Hi, good evening, sir. Sir, my first question is related to the plastic pipe demand scenario and —
P. C. Somani
Your voice is not, Utkarsh.
M. P. Taparia
Can you just repeat the question? Not clear.
Utkarsh Nopany
Hello. Yes sir. Am I audible right now?
P. C. Somani
Yes, please.
Utkarsh Nopany
Yes. Sir, what I wanted to understand on the demand side. So, in the opening remarks it was mentioned that the plastic pipe demand is now coming back to the normalcy. So, in this context I want to understand whether we meant that the channel has started refilling inventory or we are also seeing signs of demand improvement at end consumer level in the January month compared to the previous December quarter?
M. P. Taparia
This now normal demand started coming up and you are right. The destocking was taken to very extreme level. So now because there’s no much — there is chance of some price going up also. The normal stocking is started and going to continue. Now this is the pre demand period from January to June of plastic piping system, pre demand period.
Utkarsh Nopany
Sir. So like are we seeing signs of improvement in demand for plumbing and infra pipe in the January month compared to December quarter period, sir?
M. P. Taparia
We are finding improved demand.
Utkarsh Nopany
Okay. And sir, like in the press release like it was mentioned that we are planning to put up a Greenfield plant in FY 2027. So sir, can you please provide some more details regarding the location and the timeline of those new plant?
M. P. Taparia
Two plant. One is near [Indecipherable] and another plant near, in Bihar, near Patna.
Utkarsh Nopany
Okay. And sir, those plants are expected to become operational in FY 2027?
M. P. Taparia
This should be operational by FY 2028.
Utkarsh Nopany
Okay, thanks a lot sir, these are my questions.
Operator
Thank you. Our next question comes from the line of Sonali from Jefferies. Please go ahead.
Sonali Salgaonkar
Sir, thank you for the opportunity. Sir, I had only one question. So, PVC price has again from point to point from October to December it’s gone down by about 7% Q-o-Q. I’m sure there would have been seen some element of inventory loss this quarter. Sir, is it possible for us to quantify that?
M. P. Taparia
Very difficult, overall, no, it’s not only in PVC, the polymer price have gone down across the board. All the polymer, PVC, polyethylene, polypropylene, CPVC, all polymer price have gone down. We believe in first nine months company might have taken a hit of between INR100 crore to INR120 crore in nine month operation which resulted in our giving lower guidance of operating margin.
Sonali Salgaonkar
Understood, sir. Sir, and just one more if I may. In the remarks that Mr. Somani said about the higher interest cost, we said that we had short term borrowings for the funding. Sir, is this regarding the Wavin funding that we spoke about?
M. P. Taparia
Not Wavin funding, routine funding. It was a very small amount, INR132 crore and now that is all being paid.
Sonali Salgaonkar
Understood. And we are — the interest cost is likely to normalize from Q1 FY2027, is that right?
M. P. Taparia
Yes. Yes. There is no doubt about it.
Sonali Salgaonkar
Understood. Thank you, sir and all the best.
Operator
Thank you. Our next question comes from the line of Rahul Agrawal Ikigai Asset. Please go ahead.
Rahul Agarwal
Yes. Hi, sir. Good evening. Thank you for the opportunity. Sir, just wanted to know your thoughts on the industry for the entire PVC industry. If you look at the nine months gone by, any comments could you offer on how the PVC industry would have grown and market share for Supreme? Because Supreme Overall has grown 10% on volumes in nine months. What could be the volume growth for the industry and are smaller players losing market share that is happening.
M. P. Taparia
Industry growth you can get from raw material producer breach.
Rahul Agarwal
Sure sir. Have we seen any —
M. P. Taparia
I can say the growth of the Supreme industry, please.
Rahul Agarwal
Yes, sir, I understand that. Anything on the smaller player side, is there consolidation in industry?
M. P. Taparia
We know our shares have gone up in plastic pipeline system.
Rahul Agarwal
Yes. All right, sir. No problem. Thank you so much and best wishes for the year.
Operator
Thank you. Our next question comes from the line of Keshav Lahoti from HDFC Securities. Please go ahead.
Keshav Lahoti
Hi. Thank you for the opportunity. Just a follow up as I, have I understood correctly. So, your interest cost which has increased in this quarter to INR12 crore possibly will reduce in Q4. And maybe from FY 2027 onwards the quarterly run rate would be INR4 crore, INR5crore, is this a fair assessment?
P. C. Somani
You are right.
Keshav Lahoti
Okay. And how is the other income mode which has taken is only INR4 crore this quarter earlier which used to be INR15 crore. How will this number be in Q4 and in possibly maybe FY 2027, some sort of guidance?
P. C. Somani
As I mentioned, this is not our core activity. It was deployment of surplus funds available in hand since we are using money for businesses. So, again depends the opportunity for the business how much, how it works, it all depends upon the availability of liquid funds in hand.
Keshav Lahoti
Understood. What I’m trying to get it, is it due to working capital? Possibly there was some stretching of working capital that has led to possibly more utilization of fund business in this quarter?
P. C. Somani
Absolutely, absolutely. For the current year, since the production capacities were being utilized optimally, the working capital has been increased particularly on the inventory side, not on the receivable which will come down once the fourth quarter is over.
Keshav Lahoti
Understood. Got it. Earlier you have, you know, sort of indicated your CPVC volume growth was 26% in H1. How has been the growth in this quarter?
M. P. Taparia
Total growth in nine month is 30%.
Keshav Lahoti
Oh, 30% implying 40% kind of a CPVC volume growth in Q3, quite good to realize.
M. P. Taparia
Nine months, we have grown 30%.
Keshav Lahoti
Got it. One last question from my side, sir. How is the channel inventory possibly can you compare how was the channel inventory at September and how has it moved in December and how is it moving now in January when you know PVC prices are rising, have started to rise?
M. P. Taparia
We don’t know. We don’t know, but we only know that when they place the order, they are — they’re following very vigorously. They dispatch the goods very quickly. When they place the order, they follow-up very intensively, dispatch very quickly.
Keshav Lahoti
Okay, got it. That is helpful. Thank you so much.
Operator
Thank you. Our next question comes from the line of Sneha Talreja from Nuvama. Please go ahead.
Sneha Talreja
Thank you for the opportunity team. My most of the questions are answered, I just wanted to get a sense in demand. How are we seeing on ground demand at this point of time and how do you see it moving for various segments like PVC, CPVC in case you can, you know, give some numbers there?
M. P. Taparia
No demand for plastic piping system, demand for every product is reasonably good now. The economy is drawing well and the product price have gone quite low and the demand for housing, agriculture, infrastructure all are going quite well now.
Sneha Talreja
Yes, but if at all we have to put some volume numbers in place that how much would be industry demand volume growth, it would be 8 to 9 or probably 10 to 12, some sense there would be helpful?
M. P. Taparia
We told now that piping system will grow between 15% to 17%, which necessarily means our growth will be more than 16% in this quarter.
Sneha Talreja
Sir, I was speaking more from the industry perspective, industry group. This is your outperformance over industry, but how much can industry be growing at the moment?
M. P. Taparia
Check with raw material producer, please.
Sneha Talreja
Sure, sir. Thank you.
Operator
Thank you. Our next question comes from the line of Meet from Motilal Oswal. Please go ahead.
Meet
Thank you, sir. Sir, I have one question regarding the capacity that you are setting up in FY’27. Can we get the understanding how much capacity are we setting up across the two locations for what we discussed?
M. P. Taparia
Actually, we are planning to add 100,000 tons overall as on today.
Meet
That will include what?
M. P. Taparia
Precise number will be told to you in the month of April.
Meet
Okay. And this will include all the PVC, CPVC and other value-added products as well?
M. P. Taparia
All product segment what we are dealing in, in plastic piping system. And other product also. All together as on today, this is a plan, but precise plan we will share with you in the month of April.
Meet
Understand. Okay. Also, sir, in terms of the industry. So, one thing that we are hearing about is that China has been lifted the export rebate that they were offering to their exporters. And from the understanding that we are seeing, the prices of PVC can increase going ahead. So, can you comment on that?
M. P. Taparia
Already, the international offers which are coming to India are already high. As I told earlier, it has gone down up to $580 here in India. And now you cannot get any booking below $650. So, prices from the bottom level has gone up by $70 in last one and a half month. So, the trend has been reversed. Many producers because they were having too much loss, many capacities were running at low capacity and some plants were actually closed also. Demand supply balance is now started. People don’t want to go and make it anymore if they are losing money.
Meet
Understood, sir. Thank you so much.
Operator
Thank you. Our next question comes from the line of Tejas Pradhan from Citigroup. Please go ahead.
Tejas Pradhan
Hi, sir. Most of my questions were already answered, but just as a continuation of the last query. So, going forward, how much increase would you expect in domestic PVC prices? I know you mentioned $70 increase has already happened. Do you think this is the quantum of increase or further increase is also possible?
M. P. Taparia
Dear friend, in such an uncertain atmosphere in the world, how can you forecast the price? We are incapable to forecast. We only know very well now that price erosion has been arrested. And price has started going up. Now, how much can go up? Very difficult to say. You can’t forecast nowadays. In such an uncertainty, so many wars taking place, so many locations. So, much uncertainty. We are going through first of all, VUCA, volatility, uncertainty, complexity. Such a business atmosphere.
But we know that all the polymer producers, not only PVC, other polymer producers also, some people closed their plant permanently. Some people temporarily closed. Some people put their plant for maintenance shutdown. Some people are running at low capacity because they are all losing money. And you can’t forecast about crude price. Today, crude is around 60 to 64. Suppose, crude price goes down to $40, nobody knows what can happen to crude price. If that happens, then polymer price will go down for sure. If crude price can go down to $40, which happened in 2008, who can forecast nowadays? Very difficult to forecast. In such a complex world economy, you can’t forecast.
Tejas Pradhan
Sir, no problem.
Operator
Thank you. Our next question comes from the line of Vipul Kumar Shah from Sumangal Investments. Please go ahead.
Vipul Kumar Shah
Hello. So, is it possible to share CPVC volume for this quarter and 9 months?
M. P. Taparia
In 9 months, we have grown by 30%.
Vipul Kumar Shah
You would not like to share the absolute volume?
M. P. Taparia
Very classified information.
Vipul Kumar Shah
Okay. Thank you, sir.
M. P. Taparia
Thank you.
Operator
Thank you. Our next question comes from the line of Ronak Ostwal from Arihant Capital Market Ltd. Please go ahead.
Ronak Ostwal
Thank you for taking my question. Can you tell us how the industrial product segment is doing? Because it was facing challenges, especially from the discretionary side. And also, on the rural side, how the demand activity is there right now?
P. C. Somani
Our industrial segment consists of three segments, three product divisions. Industrial component, material handling and cylinder. Material handling and cylinder are enjoying a moderate growth. We are getting good business of material handling products. And also in the composite cylinder. But the supply of component to automotive or to appliance sector, automotive sector is still doing better and encouraging. But the appliance sector is in turbulence time, you can say. Whether it is the appliances or washing machine or the refrigerator or air conditioner, cooler or something. So, that industry, the models to which we are supplying the component, if they are doing fair or better, we are also in better shape. Which is not the case in the current year. Industrial component to appliance sector is tough time and seeing a degrowth compared to previous year.
Ronak Ostwal
Okay. Thank you, sir. On the rural side, how the demand is there right now, especially on the price segment?
M. P. Taparia
Demand is quite okay. Rural side we are catering to our tarpaulin and our plastic pipe system. And demand is quite okay.
Ronak Ostwal
Thank you, sir.
Operator
Thank you. Our next question comes from the line of Priyanka from Value Prolific. Please go ahead.
Priyanka
So, I guess the Supreme Industries is growing so rapidly and have an ambitious plan for future. I just wanted to get the understanding about the succession planning to ensure the stability that the Company will have in future also?
M. P. Taparia
They will do better than us.
Priyanka
Can you please elaborate on that?
M. P. Taparia
Our two grandsons are also now involved in the business. And we are confident that they will do better than us.
Priyanka
Okay. Thank you. Thank you for your time.
Operator
Thank you. Our next question comes from the line of Udit Gajiwala from YES Securities. Please go ahead.
Udit Gajiwala
Hi, sir. Firstly, congratulations on great set of volume growth for the quarter. And I just wanted one follow up. In the start of the year, you were mentioning that you were looking at a 12,000 crores top line for FY’26. Like we agree that you have maintained your volume growth guidance. Would you throw some light on this number if you have revised that downwards?
P. C. Somani
Even the top line, you see, polymer prices, they are coming down. So, instead of 12,000 crores, now we are maintaining 11,000 crores to 11,500 crores.
M. P. Taparia
Top line will definitely go down when the polymer price falls down between 12% to 20%. Top line is bound to go down.
Udit Gajiwala
Sir. I completely agree. I just wanted to derive some sense. That’s helpful, sir. Thank you.
Operator
Thank you. Our next question comes from the line of Shaleen Kumar from UBS India. Please go ahead.
Shaleen Kumar
I just want to understand, today’s PVC price is still below last quarter average PVC price. And I hear you saying that demand is coming back, but your last quarter volume was also pretty solid. So, I just want to be sure, how are we certain of 200 basis point to 300 basis point margin improvement that we are looking in the 4th Quarter? So, what are the levers we have for that?
M. P. Taparia
I don’t follow. What is the question?
Shaleen Kumar
Sir, we are looking at like the margin guidance for the next quarter.
M. P. Taparia
We expect a better volume that will reduce some manufacturing cost.
P. C. Somani
And the erosion partly due to the falling price is being arrested. It’s being arrested now. So, there won’t be any inventory losses.
Shaleen Kumar
Okay. So, is it possible to quantify what kind of inventory losses we had in third quarter?
P. C. Somani
So, for the overall 9-months, I think the figures have been given between 100 crores to 120 crores. You see the prices are so falling continuously, it’s really difficult to quantify on a month-to-month, quarter-to-quarter basis. That’s why we have estimated for a period of 9-months, what is the impact.
Shaleen Kumar
Fair enough, sir. If you put them equally, that basically explains probably 100 basis points to 150 basis points margin compression.
P. C. Somani
For nine months, it is. Yes. Right.
Shaleen Kumar
So, that’s something which we believe that we can gain back if the price remains stable.
P. C. Somani
Correct. The fourth Quarter, we don’t envisage any margin loss on the account of the inventory losses. And going forward, you don’t know. Predicting any price movement is very difficult.
M. P. Taparia
We believe that there is no price erosion now. Because this is the seasons time now.
Shaleen Kumar
But is the price enough for you to improve the margin from here?
P. C. Somani
Prices are always passed upon. So, there is no issue in the margin. But once whatever inventory you are carrying, if the value is getting eroded, then you are selling at a lower price, lower margin.
Shaleen Kumar
Fair enough, sir. Alright. That’s it for my side. Thank you so much.
P. C. Somani
Thank you.
Operator
Thank you. Our next question comes from the line of Arun Baid from ICICI Securities. Please go ahead.
Arun Baid
Hi, sir. My question was, we have a capacity of 1 billion tons of pipe by the end of this financial year. So, when do you expect it to be utilized fully? By which year?
M. P. Taparia
Normally, if we utilize 70%, we should be happy. So, we should expect that we should be able to sell 70% capacity next year.
Arun Baid
And the second thing is, with regard to assuming there are no more PVC price cuts, which is not expected. So, will we bring it back to a historical range of 15%-16% margins, assuming there are no more price fluctuations, PVC on the downward trend at least?
M. P. Taparia
15%, 16% margin, I don’t recall.
P. C. Somani
14% and up to 15% is the normal margin, normal scenario.
Arun Baid
So, operating average will play out, because our volumes will go up. So, still you are expecting around 15%?
M. P. Taparia
We will decide and we will talk to you in the month of April for next year, please.
Arun Baid
No, sir. I am not talking next year. I am just saying assuming PVC doesn’t correct from here anymore and you have the volume growth which we expect to come through, will we be doing 15%-16% margin in that case?
P. C. Somani
Yes, for the quarter, yes. Because of the higher volume, our manufacturing cost, our administrative cost gets spread around the larger volume. And that’s how for the year we are targeting 13.5% to 14% margin.
Arun Baid
So, actually my question was for a longer term, not for the quarter.
P. C. Somani
That’s why I am saying for longer term perspective in the normal scenario, it is 14.5% to 15% is the operating margin we expect. Now depending on the new product launch, depending on the product mix, definitely we are trying to improve it further. Whether it’s a quarter percent, half percent, it all depends upon the plan of the new product launches and success.
M. P. Taparia
We are happy to say that every quarter we are increasing the share of value-added product.
Arun Baid
Yes, sir. Exactly, sir. That’s why I was trying to say that things are looking better. Thank you.
M. P. Taparia
Okay, thank you.
Operator
Thank you. Our next question comes from the line of Sanil Jain from Ambit Capital. Please go ahead.
Sanil Jain
Hi sir, am I audible?
Operator
Yes, you’re audible.
Sanil Jain
Hi, sir. Thanks for the opportunity. So, I have two questions. So, I just wanted to know what is the current capacity of PP silent pipes and what is the pricing on that?
M. P. Taparia
Capacity is 3,000 tons per annum. Okay. And pricing depends on the various factors. There are hundreds of products in the system. So, every product has a different price. Price is a very elaborate word actually. But it is a premium product.
Sanil Jain
Understood. And second, on the OPVC segment, what is the expected capacity planned and what is the capex outlay for the same?
M. P. Taparia
Currently we have got already capacity to produce around 8,000 tons annually.
Sanil Jain
Okay.
M. P. Taparia
Currently, and it is not utilized fully. Buying from government department, central government is very slow for water supply. But we believe that demand will start picking up now. We are getting many inquiries now onward. So, we hope that we will be able to sell a good portion of the capacity next year.
Sanil Jain
But we are not looking to like add capacity on it?
M. P. Taparia
Once this capacity is sold out, then we definitely will add.
Sanil Jain
Okay. Understood. Thanks. That is all from my side.
Operator
Thank you. Our next question comes from the line of Yogesh Mittal, an Individual Investor. Please go ahead.
Yogesh Mittal
Sir, thank you for the opportunity. Sir, so I just wanted to know if it is possible to throw some light on PVC pipes versus the metal pipes like the GI pipes and cast-iron pipes. How does the interplay happen for the demand when the prices changes in between them? And how is the demand in terms of like what is the market? What is the general market trend in terms GI pipe versus the PVC pipe?
M. P. Taparia
The application where PVC pipe is used, metal is no substitute. PVC pipe has no substitute like metal. Metal is very expensive, too much weight, too short life. PVC good pipe has got very good life.
Yogesh Mittal
Right, sir.
M. P. Taparia
Earlier cast iron pipes are being replaced by PVC and at most of the places they are replaced. Cast iron pipes you don’t see much in use now in India.
Yogesh Mittal
Right, sir. So, thank you for your answer, sir. Thank you.
Operator
Thank you. Our next question comes from the line of Shailly Jain from Dolat Capital. Please go ahead.
Shailly Jain
Hello, sir. Thank you for the opportunity. Sir, most of the questions are being answered. I just wanted to have an idea about what is the gross debt and cash number for us in 9 months,at the end of 9-months?
P. C. Somani
As of 31st December?
Shailly Jain
Yes.
P. C. Somani
The net debt is 132 crores.
Shailly Jain
And gross debt?
P. C. Somani
No, this is the total debt. What I am saying is, net debt is the net of the surplus balance available.
Shailly Jain
Net of, yes.
P. C. Somani
132 crores.
Shailly Jain
Okay. And, sir, it would be great if you could just provide us with the data inventory and payable number, working capital?
P. C. Somani
Inventory, you can say it is 1,900 crores. Receivables about 568 crores and payable about 1,100 crores, whole put together, all liabilities.
Shailly Jain
Okay. Understood, sir. Sir, as we have indicated that our finance costs will go down, so how are we looking at our debt in FY’27?
P. C. Somani
No. We want to remain debt-free. That is our commitment.
M. P. Taparia
We will be debt-free 1st April itself on 31st March only.
Shailly Jain
Okay, this year?
M. P. Taparia
We will have a good amount of cash surplus in our books on 31st March 2026.
Shailly Jain
Okay. And, sir, what would be our capex number for FY’27?
M. P. Taparia
April we will discuss.
Shailly Jain
Okay. Sure, sir. Thank you so much.
Operator
Thank you. Our next question comes from the line of Varun Jalsaria from 360 ONE Capital. Please go ahead.
Varun Jalsaria
Hi, sir. Thank you for the opportunity. Sir, just wanted to have some sense on the packaging product division. Like, how is it progressing? What is the demand like for that segment? Packaging segment?
P. C. Somani
Protective packaging is growing by 10% in volume. And margins are quite good, double digits.
Varun Jalsaria
So, this is for the full year, you are saying?
P. C. Somani
For the quarter also, for the full year also.
Varun Jalsaria
Okay. So, the demand is good there. I mean, that is not a problem, right?
P. C. Somani
Demand is good. We are offering many customized solutions. Fabricated products.
Varun Jalsaria
And secondly, sir, on the PVC window business, could you give us an idea, like, how is it progressing? Any, in terms of value, volume and that’s part of the piping division, right? If I am not wrong.
M. P. Taparia
As of today, it’s a separate division, we are supplying in the next Month. And, we will be selling windows only, no profile. We anticipate we may be able to produce around 250,000 windows every year. It will take some time to sell the capacity. And when the capacity is sold, we have plans to go on expanding.
Varun Jalsaria
Sir, what will be the revenue potential from this business?
M. P. Taparia
In excess of 300 crores, full capacity.
Varun Jalsaria
And currently, how much are we doing?
M. P. Taparia
We will start sales from next month only.
Varun Jalsaria
Okay. So, as of now, it’s not contributing any revenue?
M. P. Taparia
Nothing.
Varun Jalsaria
And, so, the non-pipe segment, only packaging, you’re expecting a growth. And for industrial, you don’t expect any growth for this quarter, or maybe for next year as well?
M. P. Taparia
We expect growth in material handling. We expect growth in furniture. We expect growth in productive packaging. Every segment, we are expecting growth, except industrial component business.
Varun Jalsaria
Okay, sir. Thank you, sir. And any capacity expansion that we are taking in packaging, that was planned for this year?
M. P. Taparia
We are planning, next year.
Varun Jalsaria
Okay, sir. Thank you.
Operator
Thank you. Our next question comes from the line of Praneet, an individual investor. Please go ahead. Praneet, you have been unmuted. Please go ahead with your question.
M. P. Taparia
No question, you can ask.
Operator
Praneet, please unmute your line and go ahead with your question. Thank you. I would now like to hand the conference over to management for closing comments.
M. P. Taparia
We are thankful to all the analysts who raised the question. We were impressed by the very analytical question raised by them. We thank all of them for the time taken to ask several questions to clarify. Myself and my colleagues thank all of them. Thank you.
Operator
[Operator Closing Remarks]