Carborundum Universal Ltd
NSE:CARBORUNIV
| US |
|
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
| US |
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
Financial Services
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Mastercard Inc
NYSE:MA
|
Technology
|
| US |
|
UnitedHealth Group Inc
NYSE:UNH
|
Health Care
|
| US |
|
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
| US |
|
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
|
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
| US |
|
Visa Inc
NYSE:V
|
Technology
|
| CN |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
| US |
|
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
| US |
|
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
| US |
|
Coca-Cola Co
NYSE:KO
|
Beverages
|
| US |
|
Walmart Inc
NYSE:WMT
|
Retail
|
| US |
|
Verizon Communications Inc
NYSE:VZ
|
Telecommunication
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
1 037
1 825
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
|
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Mastercard Inc
NYSE:MA
|
US |
|
|
UnitedHealth Group Inc
NYSE:UNH
|
US |
|
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
|
Pfizer Inc
NYSE:PFE
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
|
Nike Inc
NYSE:NKE
|
US |
|
|
Visa Inc
NYSE:V
|
US |
|
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
|
3M Co
NYSE:MMM
|
US |
|
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
|
Coca-Cola Co
NYSE:KO
|
US |
|
|
Walmart Inc
NYSE:WMT
|
US |
|
|
Verizon Communications Inc
NYSE:VZ
|
US |
This alert will be permanently deleted.
You don't have any saved screeners yet
Ladies and gentlemen, good day, and welcome to the Carborundum Universal Limited Q1 FY '24 Earnings Conference Call hosted by Kotak Securities Limited. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Aditya Mongia from Kotak Securities Limited. Thank you, and over to you, sir.
Thank you, Dharwin, and good afternoon, and welcome, everyone, for the 1Q FY '24 Earnings Con Call of Carborundum Universal Limited. From the management side, we have Mr. Sridharan Rangarajan, the Managing Director; Mr. P. Padmanabhan, the CFO; Mr. G. Chandramouli, Advisor, Investor Relations; and Mr. Dinesh Kumar, Senior Manager, Strategic Planning.
Without any further ado, I would request the management to share their opening remarks post the results. Over to you, sir.
Good morning to all of you, and a warm welcome to our first quarter call. I would request my colleague, Chandramouli, to read out general disclaimer, and then we will start the call.
Good morning. During this call, we may make certain statements which reflect our outlook for the future or which could be construed as forward-looking statements. These statements are based on the management's current expectations and are associated with uncertainties and risks are more fully detailed in our annual report, which may cause the actual results to differ. Hence, these statements must be reviewed in conjunction with the risk that the company faces. Thank you.
Thank you, Mouli. So let's begin the call. I trust all of you are safe, your family are also safe and well. Today, I'm joined in this call Mr. Padmanabhan, our CFO; Chandramouli, our Investor Relationship President; Dinesh, our Strategic Planning Head. We will begin this call by providing a broad outlook and summary. Then we will take your questions.
Before I start, I would like to place on record the company's appreciation and thanks to Mr. Ananthaseshan who has retired as Managing Director of the company after reaching 60 years of age. Mr. Anan served the company over 37 years in various capacities. We wish him well in his retirement.
The company has begun this financial year with a solid start. We are glad to report another quarter of robust performance and a solid start to FY '24. For the quarter, our revenues have grown by 6% quarter-over-quarter to INR 1,191 crores at consolidated level and by 10% to INR 659 crores at a stand-alone level. The growth was majorly driven by ceramics, and the growth from basis electro minerals has been steady. All major overseas subsidies have performed well. Profit after tax and noncontrolling interest grew by 44% to INR 113 crores against INR 79 crores at consolidated level. You would note that we delivered INR 137 crores in Q4 FY '23, and this included an exceptional income of INR 25 crores.
In the current quarter, we delivered similar PAT without onetime exceptional income. PAT margins improved from 7% to 9.5% quarter-over-quarter at consolidated level. At the stand-alone level, the PAT increased by 28% to INR 993 crores from INR 73 crores. During the last year, same quarter, this was mainly on account of margins coming back to normal in abrasive stand-alone and improvements in margins of ceramic business. PAT margins improved from 12.1% to 14.1%.
Coming to the subsidiaries performance among the overseas subsidiary, CUMI America performed significantly well in terms of top line and the bottom line. CUMI grew well and profits were better. [indiscernible] Russia and [indiscernible], south Africa is almost flat on top line. CUMI Middle East and CUMI China, the company has cut down its operation, as you all know. On the other hand, domestic subsidiaries have grown in double digits over the last year, whereas generation business SEDCO, had some challenge in terms of the bottom line due to a steep rise in cash price. And we are working in terms of how to recover.
In terms of the CapEx at consolidated level, we spent INR 55 crores in the first quarter.
I will now cover the segmental performance. Abrasives basis, consolidated revenue for the quarter was almost flat at INR 519 crores compared to INR 513 crores in Q1 of the last year. Stand-alone grew by 5% to INR 282 crores. Sterling, American subsidiary, VAW, and AWUKO delivered INR 24 crores of incremental sales. Closer of China, lower volumes in RHODIUS reduced to INR 14 crores of sales. On a sequential basis, sales degrew by INR 5 crores. Stand-alone Abrasives, Sterling, CUMI America and VAW combined together gave an increment of INR 12 crores, where slowly stopped by INR 15 crores. Abrasives India has grown compared to Q1 of the last year, that is almost flat sequentially.
Coated Retail segment is facing challenges after increase in supplies from China and new entrants in the segment. All other segments and abrasives are doing well. We expect to hit overall 8% at 10% growth at the full year level. The focus has been on improving the margins, which have come down significantly in the last few quarters. We focus on product mix optimization, increasing sales in value-added products and improving internal efficiencies, which helped us to bounce back to the previous margins in the range of 15% to 16% compared to 12.1% in Q1 of the last year.
RHODIUS in Q1 achieved a net sales of EUR 15.5 million compared to EUR 17.4 million in Q4 of FY '23, and EUR 18 million in Q1 of the last year. We communicated in the last call that RHODIUS is planning an 8% to 9% growth in FY '24. We also said that the energy cost increase would be in the range of EUR 2.2 million to EUR 2.5 million, and our team will try their best to offset these. The price increase put up to offset the cost push resulted in lower order intake, which impacted the overall sales. We are also seeing softening of demand in parts of Europe. Our revised outlook is a flattish top line. Last year, we delivered a loss of EUR 4.7 million, which included one-off costs of EUR 0.2 million and a PPA write-off of EUR 2.8 million. We expect that this year with higher top line, we could deliver a small profit, but with softening in demand and increase in energy costs, we can expect a similar loss in line with that of the last year. This is our current outlook. We have 8 more months and we are looking into all possible options to minimize this loss and improve the performance.
Coming to AWUKO's performance. This quarter, they achieved EUR 2.5 million sales against EUR 2.6 million in Q1 as well as Q4 of the last year, past financial year. Losses in Q1 was EUR 0.7 million against a loss of EUR 1.2 million in Q4. The cost control levers as well as drop in input costs helped to minimize the losses. We communicated in the last call, the losses in FY '24 will be around EUR 2.5 million. We expect AWUKO to break even the FY '25. We maintained the same outlook.
Coming to the bottom line performance for the quarter, profit and loss before finance costs and tax at consolidated level of INR 31 crores against INR 18 crores in Q1. The increase predominantly coming from stand-alone margin moving from 12.1% to 15.3%, better performance of Sterling and closer of China. Sequentially, PBIT margin dropped from INR 32 crores to INR 31 crores. This is due to lower profits in India, in America, Middle East and China. Margins at consolidated level dropped from 7.3% to 6% sequentially but improved from 3.5% in Q1 of the last year.
Electro Minerals. Electro Minerals consolidated revenue for the quarter was INR 418 crores versus INR 406 crores in Q1 of the last year, resulting in an increase of 3% and stand-alone Electro Minerals grew at 10% quarter-over-quarter to INR 197 crores from INR 179 crores in Q1 FY '23, please, and grew by 11% sequentially. [indiscernible] Russia and [indiscernible], South Africa was almost flat quarter-on-quarter and marginally lower when compared to sequentially. For the quarter, profit before finance costs and tax at consolidated level was INR 74 crores [indiscernible] Q1 predominantly contributed by a better performance of [indiscernible]. PBIT stand-alone level improved by 59% to INR 33 crores. And sequentially -- INR 33 crores sequentially and degrew 25% quarter-over-quarter, have leasing in commodity price impacting the realization of our products and higher input costs.
Coming to performance of VAW despite challenges due to ongoing Russia-Ukraine conflict, the team at is continuing to manage this well in taking suitable actions every time. The operations are running well. and the installed capacity being utilized well, VAW delivered its higher ever quarterly sales of RUB 2.4 billion in this quarter compared to RUB 2.12 billion prior quarter and RUB 2.11 billion in Q1 last year. This was mainly on account of higher realization across all 3 segments as well as weaker ruble against U.S. dollar and euro. They delivered a profit of RUB 417 million, which is again highest in many quarters. Rubles where converted an average of RUB 1, which is equivalent to INR 1.09 this quarter compared to 1.16 in Q1 in FY '23. You would note that the average for FY '23 was 1.23. Capacity utilization is normal, and they are able to sell more in Russia. The mix towards Russia, sales domestically has increased to 60% in the first quarter. [indiscernible] is able to collect all this receivable, they continue to be debt free, and outlook remains stable and positive.
As for the Ceramics business is concerned, Ceramics consolidated revenue for the quarter were higher by 18% at INR 287 crores as against INR 243 crores in Q1 of last year and sequentially, it was INR 265 crores. Stand-alone Ceramic grew by 19% to INR 231 crores on a quarter-on-quarter basis on account of strong demand across end-use services and geographies and grew 9% sequentially. Subsidiaries in Australia and America registered significant growth as well.
Profit before finance costs and tax at consolidated level grew by 39% to INR 81 crores from INR 58 crores on a quarter-on-quarter basis and grew 31% sequentially at stand-alone level. It grew by 38% to INR 62 crores quarter-on-quarter. This was majorly on account of growth in volume, realization and product mix. There was INR 58 crores of debt at stand-alone books and total debt consolidated basis was at INR 178 crores compared to INR 232 crores as of March '23. The debt-to-equity ratio was at 0.06 at consolidated level. Cash and cash equivalents, including deposits with maturity exceeding 3 months at net of borrowing was INR 190 crores.
I would like to end the opening remarks with a small summary. Performance of the company in Q1 is good. Electro Minerals, Ceramics and nonretail portion of Abrasives are performing well. Russia and South Africa are doing fine. AWUKO progress is in line. There's a softening of demand in Europe and RHODIUS is working on an effective response plan. Company remains debt-free. We feel stable. Stand-alone growth could be in the range of 15% and consolidated would be in the range of 10%. Stand-alone and consolidated PBIT margins compared to FY '23 should improve.
With that, I think we will complete the opening remarks. We'll be happy to take your questions. Thank you.
[Operator Instructions] The first question is from the line of Bhoomika Nair from DAM Capital Oswal IDFC Securities.
Sir, my question -- first question is on the Abrasives segment on a stand-alone basis. The demand still continues to remain fairly muted the revenues are at around sub 5% kind of a growth is just about that. So what is the outlook in the domestic market? And how is the competition from the Chinese, which have kind of picked up in the last 6 months, does that still continue? And that's my first question.
Yes. So I think, as I said, except the retail segment, we are doing fine in rest of the segment and the growth rates are in double digit. We feel the challenge is largely in the retail segment, where there could be some dumping happening from China. And of course, there's going to be a response, which will take some time. And as I said that we could be looking at a broad 10% growth, which is what I indicated at the full year level. This is we feel that retail could be flat or slightly lower. This is our current thinking. And our team is putting together a response plan for that. Other than that, I think the standard industrial side position side and international exports are all doing fine.
Sir, 10% would be the Abrasives stand-alone entity growth?
Yes.
Okay. Sir, here we were obviously there is a challenge, as we mentioned, but there was also a plan to kind of bring the technologies and the practices that they have on [indiscernible]. What is the progress on that aspect for improving the Abrasives cost competitiveness in the local market?
So the -- bringing technology of RHODIUS is not to address the cost competitiveness in India, but it will address the cost competitiveness in Europe. By having product manufactured here, we will be able to supply to the Europe well, which are all like the baseline products, which is -- I think we are progressing, vetting we will take 18 months by the time we will have these work, but whatever we are doing currently, we will do that, which requires like, for example, we are currently working on oral certification, which is a base level requirement and the audits are currently going on. Once that is there, then we will have the next step which is basically creating an environment of manufacturing at their quality level. And so I'll start supplying to that. So that program is very much on.
Okay. Sir, my second question is on the A&D segment and initiatives out there. What is the progress of the high priority, is that we were looking at? We were already in private stages out there in industrial sector was much better than India. So what is the progress out there? And also, if I may squeeze in on the project of the [indiscernible] within the Ceramic segment?
So the -- as far as -- in terms of the high-purity silicon carbide, we are doing it at both in [indiscernible] as well as in Russia. And these are the, I would say, lab scale where we are testing these products and creating confirmatory results for various parameters, which requires like are we able to achieve the foreign ends and high-end capability. And that is what we have done, and we have reasonably achieved the foreign capability. And we are progressing towards work towards on the high-end side of it. And we are also, in the meantime, setting up a plant in India. And that will be -- that will convert it from a lab scale player, a small mini plant at this point in time. That's what we will get into that. As far as [indiscernible] is concerned, I think the progress is quite decent. We have been fully utilizing our capacity. One of our major customers doing well. And that progress is really well as far as CUMI is concerned and the progress in terms of further parts that we can supply in the SOFC field is also very much in line with the time scale that they are working with the customer.
Sure. So just my follow-up on the high parity to recall, when do we see them progressing from last store revenue and within the SOFC, what is the kind of revenue run rate that you are operating at? And what kind of possibility [indiscernible] over the next 2 to 3 years?
See, high-purity silicon carbide setting up could take a year, and then we will start supplying these products. So I would say it might take a year to set up and then establish ourselves another year. As for SOFC, I think we don't share an individual component wise details as far as industrial ceramic piece is concerned. But it's a very sizable portion of our business, and we are progressing well there.
The next question is from line of Bhavin Vithlani from SBI Mutual Fund.
[indiscernible] little disappointing to your expectations. So could you talk about the cost takeout initiatives given that passing on price increase and increased cost is difficult. So how do you scale up in the revenue, which is very critical for you to turn around? And is there eventual plan of 11% still in there?
Sir, I missed your first sentence. Could you repeat -- are you talking about RHODIUS?
Yes. The question is on the RHODIUS where the performance has been below your expectations and -- so how do you break out cost as you're not able to pass on the price hikes. And your guidance of 11% margins.
Yes, yes, yes. No, no, very fair question. I think -- so first of all, the biggest portion of it is the energy cost. So these costs are contracted much in advance, and that is, okay, we had a benefit of that in our favor last year, but that is impacting us in the current year. So -- as we see the cost of gas prices have come down. And I think our contract on it over in the current year, we expect that will cap that down, and that is we are currently seeing that.
The second is, we are also working in terms of improving the product output, which is basically some rework in terms of material preparation investment that we have done as well as in terms of land balancing that the work that RHODIUS is doing, we feel that would also help us to bring that part down.
To your question of will we get to the 12% that we indicated to you in terms of the PBT margin. We are still confident of getting that. I don't think we have any doubts on that. It's a temporary phase. I would say that the softening what we are currently seeing. Products are in demand. But at the same time, we have to recognize the fact Europe is going through a demand challenge. So hence, I think it is important to bring this up, and that's how we are sharing the current outlook. As I said that we still have 8 months to work on in terms of any other possibility of bringing these. And see some of these contracts are with private label partners happens much in advance. So hence, we need to work with each 1 of them and win these orders, which we are definitely working on. How can we load the business in such a way that we get the benefit of the volume, and that's what we are currently working on as well.
Actually second question is on the industrial [indiscernible] of the business. And within that, where we think that the factories is a piece where we're running full now despite the strong growth. Could you just give us outlook on new expansion initiatives in the factory space and also the other expansion in the Ceramics segment?
So Ceramic segment, I think, has got 2 components, the refractories and industrial ceramics. Both the components are doing well. And in fact, the refractory side of it is definitely, definitely hedging higher than distal ceramics at this point in time. And all our programs in terms of the capacity expansions, investments in latest process, all that is fully on [indiscernible] nothing is held back. We don't see capacity coming in way as a constraint.
Okay. So just a follow-up here. What is the outlook towards the expansion in the industrial and the factories and what will be the volumetric expand will it like double or so the current capacities?
So I think -- see, if you really see this year, I think they have Q1, they have grown at about 19%, and we should expect a 20-plus percentage growth is very much possible.
We have the next question from the line of Harshit Patel from Equirus Securities.
So my first question is on the stand-alone Electro Minerals margin. We have done 11.6% in the third quarter, which is very much below our guided range of 14% to 15%. While I understand that we had done some structural improvement in the past couple of years. such as producing the synthetic of brownfield [indiscernible] modernization of furnaces to increase the process yield and so on and so forth. So any specific reasons you would want to comment here?
Absolutely. Great observation. And I think largely coming out of the softening of the market coming basically import from China that is coming in this way. That's the biggest reason for the drop. But we still feel that at a full year level, 13% to 14%, we will be looking at as an EBIT margin, but still our gain. And I think we will -- the outlook for the next few quarters when we went through that, we feel confident about that.
Sir, just a follow-up to that. In the VAW Russia, we are already operating at flat-out capacities. How we are planning to grow over there? Because as I understand, the realizations are coming down and if we are not able to move the volumes because of the capacity constraint, then how will we achieve any kind of revenue growth?
So I think I would look at it in 2 parts. I'm not sure where you're getting the idea that the realizations are coming down. Average realization in ruble terms is higher. They are able to flex the mix more towards the domestic one. But your observation of the volume growth is a fair observation. But given the market condition, which is largely a geopolitical issue. We are waiting and watching. We did 1 sale expansion last year, and I think that is on stream, and that will help us a bit. But I think we would have wait for things to stabilize before we take the next call.
Understood.
Understood. Sir, second question is on the stand-alone abrasives. So the revenues have been segmented around INR 280 crores in last 7 quarters now. So as you have already mentioned about the heightened competition from Chinese products, especially in the retail counters. So just wanted to check if we have deliberately scaled down a particular product group or a customer side? Or is this softness entirely due to the normalcy coming back to the Chinese in force?
So I would like to this into 2 parts. One, the part that is on the retail side of the abrasive business, and the part which is on the industrial side of the abrasive business, both on precision and standard industrial product side. We feel that on the retail side, we see this challenge coming. And -- but on the rest of the side, we are able to see the growth. And as I said that the growth on those sides will be double digit. With the retail at a flat or slightly lower than last year, we are expecting about 9% to 10% growth. But I think this is our current outlook. Our people are working in terms of how should we work on a response plan in terms of addressing this. It is a fact that we have been flat for a couple of years. We are conscious, and we will get back, I think, give us about 6 quarters in terms of how do we respond to that. We are working on multiple strategies to address this.
Understood.
Understood. Just a small follow-up to that. Have we reduced the prices of our products as improved costs have started coming down or the pricing remains at the same level as before?
So prices are responded based on the market condition, which is as the input cost is coming down, definitely, people expect this, and we are also responding based on the market situation. But at the same time, we are able to improve the margin. If you look at our margin has gone up, and we are in the range of 15.3%.
The next question is from the line of Amit Andani from [indiscernible] Private Limited.
My first question is on the industrial ceramics side where we are witnessing a strong growth in you highlighted at least 20% growth. I just wanted to understand, sir, we have been talking about advancement here and largely this business being global in nature. I would like to understand, are we increasing our disable market new products in pipeline, if you would highlight like we did for net surrender? And at the same time, if we would like to highlight the contribution from [indiscernible] and [indiscernible] how the growth has been there?
Yes. I think we are definitely trying to improve our product range and service the customer. And as the customer also expects us to move along with their own growth as well, like a lot of our customers are asking us can we supply a part which probably they are sourcing elsewhere at this point in time. So definitely, these programs are there, and some of them are very interesting areas that we are working on, which I think will start playing out in future. Similarly, even in the refractory also, we see that quite an interesting demand overseas exports is really picking up, and that is also helping us in terms of the growth. So I would say that both these engines are currently firing well, and we are doing the right steps in terms of addressing that.
Right. My next question is on abrasive did highlighted on retail side, we are foreseeing headwinds. So how much is the retail portion in addresses? And second question on the Radius aggressive. You did highlight that the major advantage would be the taking cost advantage and then selling cost there. So what is the utilization there? And how we are actually thinking to increase utilization in [indiscernible] in the coming quarters?
So as far as the retail is concerned, we are in the range of about 30% to 35% is our share of our business is the retail. And as far as the RHODIUS [indiscernible], they are operating pretty much on a very high capacity utilization. So that is not a challenge. And what we are really looking at is the challenge of price drop or expectation of the price drop from the customer. We say we -- our situation of passing on the cost there by the price increase. So that is where this current struggle is, and we are working towards that.
All right. My last question on Electro Mineral. VAW, we did highlight it in the last quarter were only like 85%, and you have a mentioned recent growth there. So any thoughts on CapEx there? Any outlook you would like to take is on the capacities in VAW?
No. As I said in the previous question, we are operating at probably to the [indiscernible], and we just added a sell last year and we will not hesitate adding capacities. We will wait for some stability in the geopolitical situation before we start adding capacities. Normal CapEx programs that we do besides the silicon carbide in terms of the refractories and abrasives are all very much on and that we have made an on-ground investment there.
How much is the capacity for in VAW right now?
How much is the?
Capacity in VAW.
Capacity is about 90,000 tonnes of silicon carbide.
The next question is from the line of Haran Gupta from Varanium Capital.
Am I audible?
Audible with sort of disturbances.
Yes, okay. So I think that is okay. So my question is more related to the industry side. Am I audible?
Sir, if you are on a speaker, I would request you to come up from the speaker.
No, I am using the handset. Yes. So basically, my question is related to the industry side where we are working on [indiscernible]. Right. So how do you see the [indiscernible] products which goes to the [indiscernible] realization plan. So where do you see the next 5 years or maybe in [indiscernible] products segment, which is all in the manufacturing side. So the first [indiscernible] about the manufacturing is really all the [indiscernible]. So how do you view this time?
Yes, I think it's a great observation. I think India is witnessing a lot of investment in high-tech manufacturing as well as some of the new tech industries coming into India. So definitely, the B2B, what you call as industrial products, definitely will be in demand and products that we have, practically, we don't have any business to consumer type of a product. We have all B2B and probably a channel could be different, but I think, by and large, it's that type of obligation. And we see adding a great opportunity for a company like us in terms of what India would present to us and the -- as it goes from the current to, say, enter position, as the government wants to buy 2030, definitely a far more greater opportunity for companies like us will be there.
Okay. So the translation in the product will be on the basis of [indiscernible]
Sorry to interrupt, but the line is not very clear. We are losing your audio in between. May I request you to please use the handset while you're speaking.
Yes, I am using the handset maybe there is the [indiscernible] environment, not allow the connection better. But I'm trying to ask the question, being competitive advance in '18 in the PCB segment, is it more on analytics [indiscernible] cost effectiveness, right, on the basis cost advantage, we can make the competitive advantage or anything we can introduce [indiscernible]? Still overall industry [indiscernible] maybe [indiscernible] maybe [indiscernible] or anything, which is related manufacturing side. So I'm trying to get a broader view on this thing.
Yes. I think look, some of the businesses that we are in, actually, it requires a lot of processing and technology skills that are required. It's just not the cost which acts as an competitive advantage. Perhaps you start with cost as an advantage, but predominantly, it's the value that we would create both out of the technology as well as out of the processing capability. plus the integrated value chain that we process in terms of the minerals that we will have and which is manufactured by us, helps us to get integrated into both abrasives, ceramics and refractory products. So these are the value opportunity that we will be able to create and bring the differentiation.
Okay. And just the last 1 is, how does [indiscernible] to China or the other for manufacturing country while dumping the product. So how do you take in the long term? So that's something related to my previous question.
We give a very generic response because we are in a very wide sector that we are looking at. In the long run, you have to compete on the values and that's the only way you can compete any country for that matter. And that is what we are working on.
[indiscernible] also beneficial governments are implementing about the banking part. So that will be kind [indiscernible].
All right. The government should work on taking a look at antidumping support systems, which is, I think, a very good observation.
Okay. And in the long term, just let's review as a company, dumping your product in another country, right. Let's say 2 to 3 segments. We are something we've worked in a country. So in the long run, in the benefit in terms of financial. So in our content will be divested. Just ask a particular question.
I think I'm not getting your question right, but I think if you're asking us whether we will be going and dumping in some other country and this is no. That's not our interest and probably we are not playing in those type of field. Our scales are not that high for us to start looking at dumping as a way to survive.
[Operator Instructions] The next question is from the line of Aditya Mongia from Kotak Securities Limited.
The first question was more focused on Russia. You talked about the constraint on the supply side, but assuming there is no constraint from a supplier perspective given globally pipe going in China person, what kind of growth it be on a 5-year lock can you see out of Russia?
Aditya, we have able to do such kind of a forecast in a country like Russia, you would appreciate that it is amongst many things that's going on at this point in time. But what I can tell is that what is going in favor for -- Russia as a country has got a lot of minerals. This is not going to change overnight. And the demand for those minerals will continue to be there irrespective of the political situation that it is facing. And the cost positions that they have are really attractive. So these are core, I would say, values that -- or the advantage that the share processes at this point in time. And hence, I would like to look at it that way. And it is difficult for me to give a forecast, let's say, 5 years from now, what would be the growth. If things are normal, I think we can definitely look at all possible ways to expand there. And this is a good place to work on.
Understood. The second question that I had was in related. You talked about realization from Russia going up. What are the kind of drivers -- kind of driving that thing up? Just want to get a sense of because there's a mix change that has happened. How much more rest growth actually happens if capacity constrained?
So I think the way I would like you to look at it is that -- so there is a demand inside Russia, right? And those demands were met by us as well as by imports. Now the Russian government is also looking at similar to [indiscernible] programs in terms of supporting the Russian industries as well as supporting the consumption that should happen in a domestic manufactured industry. So hence, they are also looking at how can they support their ecosystem. And they are also facing in terms of sourcing products from outside of Russia. So obviously, these things help at this point in time. So I would say that that's the reason we are also having capability to change the mix and improve the mix in what we sell in Russia. And thereby, we are able to continue to progress well.
Understood. The final question from my side. As we first look conversations for the new role of the company. From the perspective of how you see through the growth happening from here on. How much importance would you be giving to acquisitions from here on? And I understand the [indiscernible] supply chain and how it kind of fits inside. Does that make you more open to be doing acquisitions? And if you can give us some sense across segments [indiscernible] help us out?
Yes. I think you see -- some has been doing acquisition based on the need it had and how that acquisition brought value to its existing positions. So I think -- if you ask me, I think we will continue that program, and we will continue the program in terms of our core areas that would be the area that we will look at it. Largely in terms of where we can add value in terms of the technology to support growth in, let's say, industrial ceramics in particular. And similarly, some of the growth areas that we would look at it in terms of high-performing materials. These are areas where definitely we would look at it. And similarly, we are also looking at how should we revitalize our research setup and improve our capability and bring in let's say, not a short-term objective, but really on a long term, how we can add value in terms of bringing products, a differentiated product through the research. This is something will be our focus going forward.
The next question is from the line of Harshit Patel from Equirus Securities.
Sir, my question is on advanced technology. I think in the last annual report, you have mentioned quite a lot about what are the new [indiscernible] that you are definitely over there, including those lectin insulation box and 1 order that you listen from a power utility company as well. Could you give us some outline about what would be the growth drivers over there? -- what kind of growth that we are looking at? Would that be in excess of more by 2025 or not? Over the next 3 to 4 years? And what are the actions we are taking to become profitable over there? I think last time you had mentioned that for the full year FY '24, so that segment will become profitable. So are we on track with respect to that or not?
So I think as far as [indiscernible] is concerned, they are working on multiple segments. The key focus segment is Building is 1 key focus area, which is basically how do you reduce the energy intensity of building. Then the second area is the cold chain, which is largely how do you supply products from -- what is produced is efficiently supply to the market. And there are current methods of serving them in terms of refer track type of model and how do you make use of PCM as an alternate. Similarly, the other area is transportation of vaccines, transportation of medicines, all these areas were well in terms of the PCM product applications. They also have polymer as third vertical that is also the key focus area. What currently we are doing is bringing out newer and newer applications and demonstrating to the customers in terms of the use of it and convincing them to shift. And this is actually the process and takes time because there's going to be an initial first cost, which is going to be higher, but a lifetime cost is going to be lower. But also, you are having a very, very green conscious fast that you would have. But it takes time. In India, it's not going to be easy for converting from a traditional solution to a solution like this, but that's what our team is working on. From a small base, their growth rate can be higher and I still feel that we should give them a couple of more years before we start presenting and reviewing them in terms of focused lens people like you can start looking at that. So I would say it's something that we nurture at this point in time, let's allow them that space and then we will wait for their growth.
The next question is from the line of Bhavin Vithlani from SBI Mutual Fund.
[indiscernible] regarding previous answer [indiscernible]. You mentioned the SIC prices in Russia has been going up [indiscernible]. In the domestic EMD, you mentioned about drop in the realization. So if you could answer in this. One is the quantum of price increases in Russia and quantum of bank drop in India over the last quarter in the Y-o-Y terms? And if you could just sense to understand this better.
Yes, I think it's a good observation. I think what we talk in India is largely alumina-based material. And what we are talking in Russia is the silicon carbide. And material coming from Russia into India is pretty expensive, and that's not to be compared. So here, we are talking about metals coming from China into the Indian market and bringing the prices down. Basically, it's -- I would say, not on a fair basis, but let's say, it's a jumping that would happen. But I don't believe that they can continue to keep on doing this. So we feel that we are able to match sometimes the prices based on the volume, and we are able to continue to keep the utilizations and capacities on stream. And that's why you are seeing that the growth there margin improvement is there, and we feel that there will be also continued such programs. But at the same time, we are also moving a lot of value-added products that get circle, which helps us to not based on a commodity-based discussion, but actually the value adds that we bring down. So that's what we are currently working on.
Could you give us the price realization gain in Y-o-Y in this quarter, both in domestic and in Russia?
I'm sorry, sir, at this point, I will not be able to discuss that.
Okay. No worries. Sir, and just last question is what is the capital expenditure plan for the current and the next financial year? And how would that be across the divisions?
So last year, we spent about close to INR 300 crores in the consolidated CapEx spend. And we would -- generally, we should be ballpark in that range this year as well.
And how that will be different across the 3 segments?
I would say for lease, I think, you can take 1/3, 1/3, but it could be somewhere 25%, some days will be 35%, but ballpark, it's 1/3.
The next question is from the line of Jason Soans from IDBI Capital.
What I just wanted to know when I can understand that you are well backward integrated to the electric section for manufacturing abrasive as well as certain ceramic as well. But I just wanted to know like in terms of proportion, how much do you source in-house and how much is taken externally or bot externally as a percentage? So.
Typically, let me call it about 25% to 30% would be sourced. Our abrasive would source from our electron and the rest is all sourced outside.
Okay. So 25%, 30% is sourced internally in the abrasive segment and the rest is sourced from outside?
Right.
And so my next question is you did speak about the increase in Chinese competition in your appraisal segment as well as collection meal segment as well, especially towards the alumina I just wanted to know are Ceramics business also, I think, around 50% to 60% of exports, and China is basically stepping up intensity there in terms of competitive intensity. So just wanted to know from your -- how is the Chinese competition playing out in terms of the Ceramics business in terms of global -- the global scenario, how are you see the Chinese competition play out in your [indiscernible]?
So as far as the ceramic business is concerned, look, I think we have war ceramics, and we have the other 1 is the industrial ceramic side of it. there could be competition coming in the war ceramic side of it, which is like base level ceramic that will be coming for protecting against the VAT. But on the other side, we don't see competition. Obviously, on the VA side, we are definitely getting into the value-added solutions like engineering solution plus supplying the intel, rubber bag ceramics, line ceramic. So all those are value-added products. So the you really work in terms of what the customer finally gets as a product rather than looking at per kilogram of ceramic supply. So that's how we work.
Sure, sir. And just a follow-up to that. I mean you do also supply to emerging areas such as [indiscernible] SFC and renewable energy. So there also, would you say the competition from China -- the Chinese competition is in minimal?
So on the SYFC field, definitely, we don't see that and definitely it's very, very minimum. And people actually work with you, the customers work with you for quite a long time to be part of their design itself. So it's not going to be just a quick buying decision, but it takes time, first of all, to bring you on board. And then it's also going to take time for them to make any change. So hence, I would say these are areas where people really compete on values.
[Operator Instructions] The next question is from the line of [indiscernible] Private Limited.
Just wanted to understand 1 thing. You did mention about VR ceramics and technical. Any proportional takeup, if you can provide within [indiscernible] dynamics?
Normally, we don't have this, Amit, I think -- yes the proportion of technical ceramics on the higher side.
That was our last question. I would now like to hand the conference over to the management for closing comments. Over to you, sir.
So thank you for being part of this call and actively participating in our business. You're questions and comments really help us in a lot of times. I would like to summarize here is that I think the performance of Q1 is really good and [indiscernible] ceramics, bond retail portion of abrasives are performing well. Russia and South Africa is doing fine. Our core is progressing well. Softening of demand in Europe needs to be addressed as far as RHODIUS is concerned. The company is debt-free, and I think the margins are improving. We will have a reasonable growth for this year. And I think with that, I would like to complete the call and looking forward to seeing you in the next call. Thank you.
Thank you. On behalf of Kotak Securities, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.