HIL Ltd
NSE:HIL
| 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 |
2 436.75
3 099.3
|
| 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 HIL Limited conference call. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Jigar Shah from ICICI India. Thank you, and over to you.
Thank you, Michelle. Good afternoon, ladies and gentlemen, and welcome to HIL Limited Q4 and FY '24 Earnings conference call for investors and analysts. Today, we have with us Mr. Akshat Seth, Managing Director and CEO of the company; and Mr. Ajay Kapadia, CFO. We will first have Mr. Akshat Seth making the opening comments, and he will be followed by Mr. Ajay who will take you to the financial perspectives.
Before we begin, I'd like to point out that certain statements made in today's call could be for win in nature, and details in this regard are available in the earnings presentation, which have been shared with you earlier.
I'd like to invite Mr. Akshat his views on the performance and strategic imperatives that lie ahead. Thank you, and over to you, sir.
Thank you, Nik. Okay. Perfect. Thank you. Good afternoon, everyone, and thank you for joining in HIL FY '24 and Quarter 4 Earnings Call. As always, it's a pleasure to interact with all of you and share our perspective on how the business is evolving shaping up and what the future holds for us.
In today's comments that we'll make here, I think the idea is to give a broad overview of what are things to watch out for, but also talk about how the quarter and year has panned out for us what have been some wins coming out of it in quarter areas that we'll continue to work on to get to the kind of growth trajectory and profitability that we have been up to over the last year.
So as FY '24 will be remembered as the year where we laid the foundation of what we call internally as we reimagined HIL. We've renewed our growth push in line with our strategic plan and ambition to be a USD 1 billion company over the next 3 to 4 years. We've come out of the year with a strong reiteration that we are on track for that ambition.
Just give me 1 second.
The acquisition of top line, the pipe company in East India last year or early part of this financial year and the resulting doubling of our pipes and fittings business was a major milestone. We have changed the paradigm of our branding efforts and reenergized our product innovation engine.
Value mining to enhance profitability has been established as a key organizational priority. In fact, as an example, we've run a detailed cost diagnostic in the last quarter of the previous financial year.
We've identified and we are now running a program on 2 areas, logistics and power and fuel has focused pockets of opportunity and more will follow. All of this is designed towards creating a meaningful impact on the profitability side.
Our more decisive steps have been toward building the organization, which can take us further over the next 3 to 5 years. We have strengthened our leadership team and our frontline teams. We are moving towards a digital lead. We are working with implementations on the AP side, SFA, CRM, loyalty programs and in analytics platform.
And we are building a culture of excellence, which is driving for superior results and outcomes in every area that we are engaged in. All of these steps, I'm sure turn into an exciting FY '25 and beyond for HIL.
Now if we go across various targets and segments for HIL India. We delivered steady performance in FY '24 with robust volume growth across most of our product segments. So that's been one key feature to look out. Overall, volume growth across most of our product segments, and we'll talk in a little more detail about it.
Overall, we reported a revenue of INR 2,231 crores for the year and INR 534 crores for the quarter, which is about 4% higher than previous year. This was achieved in the context of what we felt and experienced as a modest demand scenario and a situation where competition has intensified.
Hence, pricing pressures remained throughout the year, including in our Polymer business were multiyear low PVC prices presented an additional level of complexity. However, our relentless focus on driving operational efficiencies and continuous improvement in cost structure meant that we'll have improved our profitability across most of the segments through the year.
At Parador, we reported a revenue of INR 1,144 crores for the year and INR 318 crores for the quarter. These are all euro numbers translated to rupees. Parador in FY '24 presented a story of opportunity amidst adversity.
The recessionary macroeconomic conditions and the consumer sentiment resulted in a near meltdown in more construction activity and flooring demand in our core European markets. In this environment, we doubled down on our effort to gain market share by expanding our placing into commercial segments, agile pricing, restructuring our sales team, feeding new markets and on product innovation.
For instance, to be ahead of the curve, we have launched 1 lakh 64 new SKUs, that's nearly 15% to 20% on corporate, what our existing portfolio was. And this was launched in a major in-house customer event in March '24. We also maintained relentless discipline on cost and working capital to ensure lean operations.
In fact, our inventory is at an all-time low, and there are projections to for further reduction during FY '25. As a result, we have maintained quarter-on-quarter revenue growth for the last 2 quarters and also achieved positive operating margins.
I'm happy to state that on these calls, we had indicated that our first objective is to make sure H2 is positive on EBITDA terms, we have achieved that. Our second objective was to make sure that Q3 and Q4 are positive, we have achieved that. In fact, in Q4, while Q3 was just above was breakeven, slightly positive. Q4 with operating profit of INR 5 crores. And the quarter-on-quarter revenue growth was 16% during Quarter 4.
As macroeconomic indicators also show signs of a turnaround, we are confident of a smart recovery at Parador in FY '25.
The second story is where we have shifted second segment where we have strongly shifted during is on pipe and fittings business, where there is a strong momentum being built for volume growth. So volume at scale is the #1 priority, and we are pushing hard for it. The result is that in Quarter 4 we delivered 23% volume growth. If I were to just dice out for months, March and April, the volume growth is north of 40%. And this is a theme that you will hear from us consistently. The #1 focus is to drive volume growth in fitting.
All of this is being driven by targeted distribution expansion efforts in the retail segment as well as our focused approach to technical sales in the institutional segment. We'll have -- we'll be happy to work established a team, which is working dedicatedly on B2B sales and institutional sales. And we are deploying the best teams and the best tools to drive our work on this area.
I'm also happy to report that despite significant pricing pressure and that pricing pressure has only intensified as we exited the year in Quarter 4. The profitability of the Polymer Solutions business improved significantly by more than 300 basis points for the year compared to previous year. And these are all due to initiatives across supply chain and material costs.
You all have been witness to significant volatility with in regime prices last year. The regime prices are at an all-time low. However, we believe that security prices have now largely bottomed out and that means a stable pricing regime for this financial year FY '25.
On the growth side, we continue to believe that this segment will grow at 8% to 10%. There was demand both on private residential side, on the institutional services and also on the government segment.
In this market, we are confident of continuing to outpace the demand as we have done so for the last several quarters. The recent acquisition of Topline, as I said, has been a major milestone. The focus is currently on a successful integration, and that's where our teams are spending their night and days, and on extracting synergies and procurement, operations and sales.
We believe and now being on ground and inside the organization that the expanded portfolio of products, customers and the geographies that we serve will add further momentum to a tight inciting story.
Construction Chemicals, the new pad on the block for us. Experienced a strong growth trajectory last year. In fact, we exited the year
[Audio Gap]
achievements are led by the sterling contribution of our teams on the shop floor at the front line and in our R&D centers. I'm also happy to share with all of you that we have been recertified as a Great Place to Work for 6 consecutive years with improved trust and let scores. As we march towards our goals, we will sustain our enabling work culture and ensure our teams are inspired to take to the next level.
In conclusion, I would say, there is strong work that is happening internally to gain momentum that good momentum is now visible on the volume front. We will return to only solidify that momentum on the volume side. There is strong work happening on improving profitability. Again, the first signs of improvement are visible.
We would also hope for greater support from the market on the pricing front, and that will mean that L3 are line in the right direction. But we believe those pricing cash are transient, and we remain firmly on the long-term stated ambition of reaching the billion-dollar mark.
With that, let me request Ajay to provide a detailed overview of our financial performance during the quarter and FY '24. And we'll be happy to take all your questions after those comments. Thank you for your time.
Thank you, Akshat. Good afternoon, and thank you all for joining today's call. I would like to take this opportunity to present an overview of our financial performance and operational highlights for Quarter 4. In Quarter 4, has achieved 4.3% year-on-year revenue growth to INR 535 crores as compared to INR 512 crores with visible volume growth in all business segments.
The reported EBITDA from the Tata was INR 27 crores as against INR 38 crore in Quarter 4 last year. The lower EBITDA is on account of onetime cost of INR 7 crores incurred during the quarter for acquisition-related costs and the property tax payment of per.
Apart from that, we are standing on leadership position during the year. This has resulted in higher salary costs. The retinal in business grew by 4% year-on-year to INR 250 crores in Quarter 4. Despite stage demand, we continue to grow in volume and thereby saturating our market leadership position in the quarter and continue to enjoy customer loyalty. We have reported 200 basis point year-on-year improvement in profitability during the quarter in this segment.
The building filament business grew by 10% year-on-year to INR 136 crores in Quarter 4. While the value in a seasonal grew by 18% year-on-year, the margin is under recede due to intense competition in the market, which led to lower price realization. The operating margin during the quarter is in line with same quarter of last year, and it was improved by 150 basis points over plus 9 months year. This improvement in margin is on account of development of volatile supply sources, which helped in the net input cost and price increase realized in later part of the quarter.
The Polymer Chemical business remained stable with was INR 133 crores per Quarter 4. The margin reduced on account of lower realization by 3% to 4% due to aggressive price up by major players and inventory provisioning. However, in FY '24, we are meeting recovery in profitability on account of various cost reduction initiatives and strategic procurement even when the industry price of both CPVC and PVC category declined.
In Flooring segment, we have achieved 13% growth in volume quarter-on-quarter. We reported 16% growth in revenue quarter-on-quarter to INR 18 crores. The operating profit for the quarter crores. Our focus on working capital optimizes can continue during the quarter and inventories are at the lowest level in Flooring segment.
Consolidated level stood at INR 548 crores, and the cash and cash equivalents of INR 237 crores at the end of the year. The total debt to Gratio stands at 0.44 as on 31st March 2024. We are confident in our ability to grow our forward footprint and create holes going forward.
With this, I would like to conclude my opening remarks. I request the moderator to attend the floor to questions. Thank you.
[Operator Instructions] The first question is from the line of Adit from Securities Investment Management Company.
Yes. So if we look at the last year, 1.5 years, we have been affected by a lot of external factors in most of our businesses. So do you slow down in the ipad increase in fiber cost spectrum muting business. So if you could just talk about how the external factors now in each of our businesses? And how is the mentality to you.
Thank you, Adit. I will -- let me take it in that artemisinic shipping. I think from an India perspective, 2 external factors. On the input side, that we are -- we track closely and have a bearing -- significant bearing on us. One is on the roofing side, the fiber cost factor. There is value to stability. There are only very modest and predicted price increases that are there trying for FY '25. We do not expect any surprises or any volatility on that front so that came on this to better than what it was last year.
On cement pricing, like you started the financial year, there was expectation that there will be an increase. So far, the prices are sort of held out and are largely a software on selection centers that there will be some on that. Be occupied for those situation. So no surprises and then size also plays out on our other cementation part of the portfolio, which is under building solution side.
The third factor is on PVC 12 resin price. But as I said, we are free fuel the prices now bottomed out. They are right quarter in the cards. We expect the pricing to do the around this level that you current year. And that should mean that there are no further surprises like the one we had last year.
Looking to walk out on the pricing coating segment into a competitive scenario where the larger plan in the last 3 to 6 months have shown a propensity to be very aggressive on the price side. And once you would see amongst players -- the larger players have declared results are going to be declaring results in the coming days. Then there is a decline in price beyond order prices would have indicated.
So that's something to watch out for. Other than that, I think from a demand perspective, given the election season in a slightly model start to this financial year or the expectation in the market is that as this whole election in comes to an end, there will be a robust time stack across segments, including in doing segment. So that's the other factor to keep in mind.
For us, however, and we get segment which get exposed to the demand in this quarter is in. We are now setting in second inning. We are already retuning a robust uptake on demand, and we are hopeful that this quarter, there will be volume growth compared to last year.
On the Parador side, the European bees, the macroeconomic environment, the external environment seems to have stabilized. The inflation rate is now under the kind of range that the central banks will be comfortable with. Interest rates have not been increased now for almost 6 months since December. There are some talks at some point, interest rates will also start coming down that the other indicator is the consumer sentiment where we go from our retail partners like feel are now sort of coming back to the stores.
And again, the expectation was that in the core Central European market, there will be a bounce back post their summer holidays. So in the August time frame. However, we have to preface that in market lower of the bank are also a lower than a earn rather than keep to one, so we need to do what.
That's why the focus for us is to diversify our geographical market growth away from the core center developing market. And that's some early wins have already started coming in. We are entering and we have entered some high large, high-growth market. And that also if I want to share an indication, the target that we have going forward that we need to have 50% of our revenues coming in outside our core markets. That's for the center of gravity for us in the past.
So there is a plan in place, which is being executed to reduce our dependence on those record markets. So I think that would be a quick summary, if I'm missing anything as far as external caters is concerned.
No, just -- and on the price structure in case of Europe, the material cost, which went up to almost none in the last couple of years, it has come down to a slow tens.
That's right. Let me also continue to watch is the situation in the geopolitical situation around Middle East, et cetera. While there are some escalations that has happened in recent weeks. So if we are closely watching there was no material impact on any of our businesses around it.
Okay. Sir, my next question is on Parador. So our revenues have fallen by 16% in FY '22, but our employee tax costs have increased by more than 10%. So we have talked about undertaking cost-saving initiatives in this business, but the CN is not reflected in the numbers. So if you could just help us understand why would that be the case?
And secondly, if I look at the commentary of the flooring on Europe, do you expect the demand to be weak for some more time? So as an organization, how are you looking to manage balancing costs in this low demand environment and investing in growth to expand into newer geographies and markets?
Right. So you're right on the material cost, you're right on the contribution margin. The contribution margin where we started the year was north of 60% new format the year at around 52%, 53%, and that's a significant move that has happened.
The Manta cost salary cost that you are talking about is largely on account of the investments that we are doing in growing our sales capabilities outside the course and the European market. In fact on this call and on this forum, we've been sharing this over the last 3 or 4 times that those are investments that we are making. It's on account of the new geography for we are strengthening and it's also on account of building from us on the commercial sales channel, which we were not closing earlier.
As with all sales investment, there is always a little bit of a lag between the sales uptake and the time people come in. So that's why you're probably experiencing it. The important thing to note is that in euro terms, the increase in Mantas is about 2.5%. When you convert it into INR, it looks like a 10% increase.
What is actually driving or is essentially less a 0.5% increase on the ground. So it's not a indiscriminate increase on the manpower cost, which are very considered increase the impact of that is now visible. It's maybe the currency factor, which moved from 83% to 89%, which is giving us a slightly exaggerated oculars.
And your next question was on -- can you please repeat the last part of your question?
This commentary of the comment adhering companies in a, we expect the amount to be refer some more time. So are we also replacing the same because if the investments that we are making, if you're not able to get into higher sales. This lower margin on Parador continue for some more time?
See, I think the commentary is true for the year that has gone by, depending on which segment in these geographies, the flooring market dropped by about 20% to 30%. And that is a fact.
Is that now showing signs of improvement? That is also a fact now, whether how fast through the downside we in the time. But that said, our confidence comes from the fact that we are gaining share at the expense of other competitors.
Even when you talk about DIY, retail, counters that we are on, we are now in more counters and our back is the working effort over the last 6 months, which is what is driving the growth in revenue month-on-month since October. In fact, March we promote as the best month in the full financial year and the same trend continues to make.
So for us, it is about regaining share in these geographies. And the second part is also to diversify in newer geographies. So more we have been speaking on this forum, and that remains as the central team internally as.
But I look at the year in...
Sorry to interrupt, sir, I would request you to kindly rejoin the queue for follow-up questions as there are several things for that. We'll take the next question -- before we take the next question, [Operator Instructions] We take the next question from the line of Nikhil Gada from Abakkus AMC.
Congratulations on achieving breakeven or profitability in Parador. So firstly, I have a few data questions. So if you can help me in terms of what was in a Polymer Solutions? So what was the breakup of plastic pipes in FY '24? What was put and what was Construction Chemicals? And if you can also give the EBIT split as well.
Just give us a second. We are pulling those numbers out.
So Nikhil, the split but part sector segment is construction chemical part is around INR 330 crores. Then construction chemical at around INR 195 crore, multitier.
Sir, what will be the EBIT?
In terms of EBIT, the bistate 0.2% on the rotor 2016.
You're saying FY '20 sorry, FY '21 numbers.
This is a time.
Okay. So you're saying 0.2% EBIT margins in pipes and remaining is for?
Yes.
Okay. And sir, just specifically for this fourth quarter in polymer, the INR 6 crore expense, which was there, is that included in this EBIT?
No. Does it start up on corporate cost allocated.
So could you help me with what kind of inventory losses we saw in this fourth quarter for pipes?
Around 1%, around 1%.
Sir, then since we have done such decent sort of volumes and there was only a 1% impact. The margins are comparatively on the lower side. So is it largely because of the competitive pressures that we have seen that we have to reduce our prices?
So Nikhil, at our plan for a INR 13 crore if you see the operating margin, you have reported 5% operating margin in prices.
Yes. I think the right one to look at is EBITDA at the different all across the board so. But to your question -- and your question was on the performance, it's right? So I think let me first preface before we come to Quarter 4. For the full year, there is a 300 basis point improvement in EBITDA compared to the previous year as far as this segment is concerned. And that is the real story.
From a Quarter 4 perspective, yes, there was a drug also dedicated around, if I'm not ready. Around 17%, 16%, 17% drop in prices like to experience in the industry. And then there were also -- there are some trade-offs we have maintained in terms of pushing harder on the volume side.
There are also some investments we have now stepped up on the marketing and distribution side. So these are all coming into place. But that said, it's something that you should compare with other competitors also in the industry because at that and others, will we were also going through some declared numbers, large players, whereas this year for us at an EBIT level, which you were talking, we had gained by about 540 basis points and the EBITDA result of one of our large peers motion around 170 basis points.
If I also talk about pricing, then for this year, the price decline for us was about 13%. For the same competitors, the price decline is much more pronounced. In my estimate it's around the 18% month. So you should do that comparison. And I think earlier on, as far as this year is concerned, there's been good solid performance, both on volumes and also on profitability. To some extent revenue driven by the advertising. So that's a difficult metric to track.
Understood. Sir, secondly, just if we can give the overall.
Nikhil, 1 more and the volume has grown in a 23% volume in Q4, whereas in last few months, the level at areas 30%.
Correction in March and April, as I indicated, if we just pick up those 2 months was 31% and 33%. And again, that's a time that you will see recurring. You've spoken in the past this is a business with value. We can scale the scale comes better profitability and that's part that we are on.
This strategy portends on the most driving any top line onesies.
Yes.
Sir, secondly, just one question before -- and post that I've joined the queue then. If you can just overall give a guidance for all the segments in terms of what is the growth visibility you are sort of foreseeing in FY '25? And what kind of margin outlook for each of the segments, please?
From an opening perspective, and I'll share ranges. We should be looking at revenue growth in the of 8% to 10%. And we are confident of improving the margin profile by anywhere between 200 to 300 basis points from where we finished last year, which should relate now within striking the tenor better numbers FY '23 and before. Okay?
On Building Solutions, the revenue growth driven by some capacity expansions and should be north of 30%, 35%. And on the profitability side, we expect to cross the FY '23 profitability, which means that 350 crore to 400 basis point improvement that we have line of sight to.
On sites, with the organic value growth and it is not adding the impact of the acquisition should be in the mark of about 25% to 30%. On the PVC, again, a 25% revenue gotta aiming at seven mostly on the CPVC side, the construction chemical side.
Profitability across the whole Telenor segment should be largely stable at around the levels that we have. However, there will be some call taken to invest on business development activities around marketing, around product introductions, et cetera. So those are strategic price and investments that we would make in that segment.
In Parador, we are expecting our revenue growth were about 15% to 30% mark, and that will also have a good positive drive down to the EBITDA level.
Can we achieve a...
Sorry to interrupt, sir, I would request you to kindly rejoin in the queue for follow-up. We'll take the next question of Santa us from Robo Capital.
I had a few questions...
Sir, the participant has left the queue. We'll move on to the next question, which is from the line of Ravin Rupani from Investec.
My first question is related to piping. So many of the large competitors are participating in government mission project. Do we participate in that? And if yes, what is the order size that we have? And also, if you can elaborate on how should we understand the margins and the working profile in these projects?
So far, Birla HIL was not participating actively in the segment. One of the strategic rationale for our acquisition of top line was to create the credential specifications to be playing in that segment. And that's a segment we feel quite bullish about. We will grow that, and I think we have to start seeing this as participating in B2G and the business that is originating from government channels.
Today, a lot of that focus is on as Ajay mentioned, there are such water-oriented issues or programs that have been floated and other such with moving the painter urban connectivity. There are 2 other brands that will become relevant for us, which is on that. So one of the teams, the government is talking about and has announced is to create pipeline connectivity for LPD or natural gas to also be large Marcel calculation. So that's the second.
The third one is around broadband also where the government was talking about creating broadband connectivity to every rampant. All of these will require types, different specifications that we now have the capability to service it. We also have an credential store. So it's an area that is a good focus for us. There is a team that has been also driving this.
How much we do and have done so far as far as the HIL pipe portfolio is concerned, we have not done is largely negligible. On the acquired entity, PLE 50% of the business comes from programs. So that is our starting point, and we are now bidding resin many of those programs and of course, continuing the relationships.
So is it possible for you to quantify what is the order size that we have right now from the new entity?
It's a really difficult one because the order size and where time lines attached to it, but I think the 50% run rate is something that should be a good indication of where you are starting from to.
All right. So sir, you indicated that 50% -- sorry, 30% to 35% organic volume growth in piping. So how should one understand the volume growth in the -- from the new entity?
I said 25% to 30% on the pipe side. We should expect anywhere around the 20% mark on volume growth as far as your acquired entity is concerned.
Okay. And any sense on the working capital needs and the margins in this project?
So it should not be that from how we've played because the nature of such produce is that our supply and our payments come through contractors and not trading firm and government department. I understand there are concerns from an external perspective but because these are the main channels, payments might get completed or delayed. That is not the case because you are dealing with these contractors. These contractors are large institutions. They are not -- and many of them, I look at the entities and so on.
The payment is either done on cash basis or on a healthy basis. So the exposure is not any different from our other institutional business work. So this should not be a cause of concern going forward as we are scaling up this space.
Got it. Sir, last question is related to competitive intensity. So in your opening comments, you mentioned that there's an increase in competitive intensity from the large players that they are...
Bhavin, we are not able to hear you.
Sir, I would request you to kindly rejoin the queue for follow-up questions as you are not audible right now. We'll move on to the next question, which is from the line of Chirag Shah from White Pine Investments.
I have 2 questions, both on Parador. Question 1 is the x margin what are the samarginor the minor margin that you're looking in ad -- and if you can indicate what are the drivers for that? What kind of volumes you will need, what kind of raw material pricing or the net pricing for me, which is that dividend broader time line. And just on that is more not by one of the over on demand dynamics.
And second question on Parador, near term over the next 12 months, do you see that you are looking for a 10%, 15% kind of volume growth in '25, right, if I understood it correctly. Which segment or region are you driving that?
So Lion was slightly -- not for -- so I'm just going to repeat the question if you heard. So your first part is on Parador, is the kind of margin outlook that 1 would expect over the next to 2 to 3 years. I'll let Ajay speak about the specific numbers. However, there is out stack up happens.
Our face was to make sure that -- during the last 2 quarters, we are able to editors. Having achieved this goal for the current financial year, we want to do cash covered for the full year.
And next year, we should be PBT-positive is how the role stockers happening, which basically would translate to a positive EBITDA margin of 3% to 4% for the coming year and it's gearing up to near double-digit levels in the subsequent 2-year period. So the steady state we are looking at by FY '27 should be in the 12% range. FY '26 will do in the 6% to 7% range.
Your question on the volume growth, at mountain, we are expecting 15% to 20% revenue growth and loan growth will be probably it is in around 70% to 22%.
Yes.
So you said volume growth of still volume -- so the.
Into 17% to 22% agent is depending on the mix of the product in the market.
Yes, my question was rechesegment of paradises and which region is giving you a fairly strong number you are targeting? Or which region and which segment is where you are banking on to get this kind of number?
So from a region point of view, the biggest contributors, if I look at the picture over the next couple of years will be the following. There is a recovery that will happen in the back Germany, Austria, Switzerland will be 1 contributor.
The range -- the whole made block, which will be the second big contributor. And Nordic, I will also try and answer the product story. In that region, it is all our products, which grew roughly 25% or we sell 25% to 30% each. More as a new.
The other big cluster, which will deliver growth in Europe is the Iberian tester, Spain, plus which is largely on the laminate and minor flooring. In terms of markets, which are largely move and you are banking in terms of investment, there are 3 midmarkets to watch out for maybe for one is U.K. Again, our composite portfolio such as U.S., which will again be more on the modular one and on the individual side.
And then there is China, which has done reasonably well for us over the years at close. The -- we are aiming to grow that. There was a strong retail presence largely on the premium side and that is more on the engineered side.
We believe is completely losing for a sale and there is small amounts and that's the other geographies. So that's the overall way outline where the growth will come from. Product-wise, in the past, you've sort of been 25% across our sales categories due product mix will be largely maintained.
Okay. And just one clarification on the margin guidance that you indicated at 27% and 25% expect margin. How much of pricing or let's say our gross margin will play a role in this? Or is it more driven the operating leverage you are comfortable with current gross margins that you have?
The gross margin that is at current level is where we will stay. It is the operating leverage, which will start delivering the bottom line impact. Gross margin, there is maybe 100, 200 basis points work that is still remaining, which is on product reengineering, et cetera. And as we enter some of these markets that might be local sourcing, but largely -- in fact, I would say, mostly area will come from operating leverage.
This is helpful. So why I was asking is the RMC turn coal is the cost pressure over the last 2 years start going down. You are looking to pass it on to gain volumes. That is the right way to look at the business of Carradori, correct?
Chirag, you'll have to say that again, not clear the question.
I think if raw material cost pressures, which were there over the last 1, 2 years, as they start going for. You are looking to pass it on to the customer to win volume. That is the business approach that you are looking at for next 2 to 3 years. Is this the right thing to understand?
I would not summarize it that way. Can you hear us, Chirag?
Yes.
I think the way to think about it is that the cost levels in our estimate are already now down to probably the levels that they will stabilize at. We do not expect further decline. And then the P&L structure that we spend on today is what we would like to maintain at a gross margin level.
Minor pricing year or there changes with the product mix. But there are also positive factors that will come into play. For instance, I've been sharing that we are now playing aggressively on commercial. In fact, the other cuts to your question, Chirag, on where the growth comes from, total of growth is expected to come from commercial customers.
Commercial customers and accounts also turn out to be more profitable than the DIY in retail one. So they will have some positive impact there as well. So I don't think we are seeking to change the gross margin and contribution structure. You are not trying to play the price gain that maintain the current P&A structure.
What I did indicate in my opening remarks is that somewhere the agility leading needed on pricing. And there is a fundamental change that we are doing, maybe 24 months ago, and that's how the market in Central Europe used to do you had 1 rate to apply that rate loads to every client at every customer. And there was a certain lack of flexibility.
Now for us in a range manner to be placed with the customer to ensure that the India account is the competition, which means that in certain accounts, there will be slightly lower margin. And taking account, there will be slightly higher margin. Also, if you start looking at margins in a consolidated manner and not just on a product or other flexibility that we have broken.
[Operator Instructions] We'll move on to the next question, which is from the line of Franjita Sut from RoboCapital.
I'll just continue asking my question. So this is regarding your Building Solutions business. So our aim is to double our revenues in this segment by FY '26 or '27. So are we looking at any further capacity enhancement or acquisition for the segment? How exactly are we planning on doubling our revenues here? And also, how are we planning on reaching like a 10%, 12% margin number from the current 5%, 6% level?
Yes. So yes, over the next couple of years, private timely with the time line. There will be some capacity additions that happened. However, we are being careful that, that capacity addition has to do on the non-commodity side of the portfolio. So -- and those design of those and things, which are more aesthetically oriented and higher end profitability coming in from that segment is where we would look to invest. These are not large investments but we will do that.
The second thing is to your question on profitability on the interest 12% or thereabout. Most of the work that is happening is on the internal cost structure. So one on material costs and we own the recipes, et cetera, is a constant thing. It's always in response to our pricing in market. That is one big area model on the other second over how we can also start introducing value-added products to the portfolio, which have a better margin profile to that.
I mean there has been some going on back end. But if I were to say there is material cost. There is the conversion cost where we are and as I mentioned, aerial component.
The third one on the cost side of the logistics were on what is happening. And then, of course, there is -- I mentioned the value-added products coming into the portfolio.
So more point the 12% margin is operating margin, which is right now in this it is 9.5%. So 5% is PBT margin? So those are the difference.
Okay. All right, sir. And regarding my second question is regarding our retail segment. So sir, what is your outlook now regarding the crytotile fiber prices? Is this the new normal for us?
I think the level that we see here is the normal. We do not expect a decline. The best case scenario is that the prices remain near stable at current levels.
The next question is from the line of Subham Agarwal from Aequitas.
Yes. So my question was regards to the our business. So I can see there was a loss in the segment in Q4. So what went wrong there?
I said, the Q4 picture was essentially on account of the price of that happened, the pricing reduced by nearly 20% and that something that we see across all players. That takes primarily the reason why this happened was -- but I think also, as you can imagine, across quarters whereas Veracast move that upon internally, plus there are product mix variations that happening monomethyl. That's why it's important to look at the aggregate annual picture, where we see we have done quite well in improving the profitability. And as I said, that improvement is nearly 300 basis points compared to it this year. But specifically for Quarter 4 was largely on account of the price drop.
Okay. And any more one-off costs or CapEx you are expected to incur because of the acquisition of top line in the near term?
Nothing material now.
Okay. So regarding this acquisition only, so are there any low-hanging fruits in top line which need to be addressed? And should we expect FY '25 to the consolidation year? Or do you think both HIL and Topline can start firing from FY '25 itself? And what kind of margins are you targeting in piping business?
So because opportunities identified, yes. In fact, there are opportunities on the other side of. There will be learnings for tile also having their expose to the pipeline system. So in both ways, these have been probably identify, tabulated. People have been assigned to those. There is range from sourcing-related benefits to recipe-related benefits through operational leverage.
And of course, the bigger theme of the consolidation is help on the manpower side and on the management, overall. So all of that is into play. So your question will this year largely the consolidation. My expectation is that the first 4 to 6 months will largely be consolidation after which I'm looking to you in that what should start firing all total. But not the full year for sure, but maybe about 4 to 6 months for consolidation, and we are now already 1 month now in 2023.
On the margins for the -- yes. So as I said, for this year, we should be at similar margin levels as last year. And there will be some additional investments we'll be doing on business development around advertisement and promotions, et cetera. So at current levels, you do margin also accounting for the cost.
Okay. And could you just help me with the revenue split between your pipe sales and product sales?
So a few.
And what would be the volume for the pipe sales for FY '23 and FY '24?
So sir to understood in case of my young 19,000 metric ton, 951,000 2015.
Okay. Got it. And is your party business making losses? Or is it breakeven?
It is profitable. In fact, the profitability there also this year has improved despite a drop in the pricing and the price drop was nearly, if I'm not wrong, close to 10-odd percent. But overall, the segment is profitable.
Okay, sir. Got it. And just last one thing. Just can you help me with the capacity utilization for all your different business segments?
So across using and Building Solutions, we are north of 90% in pipes. Not counting the Topline acquisition, we are in the 65% to 70% range.
Okay. Got it. And any CapEx requirement in FY '25 and '26?
We had -- I think we've shared with all of you, we are expanding our blocks capacity in China and we are doubling that. So that project is already underway. It should get commissioned by H2 this year. There are a couple of capacities that we are flagging on the CT side, construction chemical side. Are you able to be able to better serve the various regional markets. Those are smaller and less minor, they are not big ticket as such.
And then there are certain capacity anything in adjusting price and 3 points.
The next question is from the line of Deepak Poddar from Sapphire Capital.
Sir, just a clarification first, when you mentioned about this first quarter, we expect both volume and price growth and margin improvement. So here, what's the reference point we are talking about? I mean, are we comparing it on a Y-o-Y basis?
Yes, yes. We are comparing it on the Y-o-Y basis.
So last year, I think our margins were close to 8.6% at the EBITDA level. So we do expect...
We are talking for which segment?
Talking on a consolidated basis.
Okay? Yes. Please go ahead. Sorry, I don't mean to interrupt.
No. So last year consolidated basis, I think we were at 8.6%. So we expected this first quarter, at least we see some improvement on both on the revenue side as well as on the margin front.
That's correct.
Okay. Okay. Fair enough. And my second question is on your interest cost. This quarter, your interest cost, I mean, it's very negligible. I mean, what's the going forward rate 1 should look at?
So in the range of titer quarter? Million INR 5 crores to INR 6 crores per quarter, right?
In India. Okay, understood. And then just a clarification, 1 more. You mentioned the FY '25, we expect a similar EBITDA margin level as last year. So that's FY '24 margin level that we are expecting or FY '23?
Last year when I said , and I was reading the commentary specifically for the Salina business.
Specifically about the other...
In the other 2 segments, as I said, there will be no improvement in the performance and profitability one.
Yes. Because the reason I was asking is because you mentioned the segment-wise margin improvement. -- in terms of roofing will be closer to your FY '23 margins and even the building division would be closer. Polymer is already higher than your FY '23 margins. Is just the Parador there is some differential, but you do expect an improvement in margin. So can 1 expect that FY '23 EBITDA margin on the consolidated level, one can see that in FY '25? Which was around 6.5%, I guess, in FY '23, your EBITDA margin at the company level.
And you're asking at a consolidated HIL India plus Parador, right?
Absolutely. Absolutely.
Yes. I think that's a fair assumption. We may achieve that much here.
Okay. And we are on track for this 12% FY '26 margin? Or there is some some delay here and there that can happen that we have earlier guided to date.
I would say nearer the 10% to 12%, yes. So the range we can talk about is in that. So 10% to 12%, yes.
We are 10% to 12% FY '26.
[Operator Instructions] The next question is from the line of Keshav Garg from Counter Cyclical.
Last year, you told us that we will do $1 million revenue in the next 3 years. Last year, there was a marginal decline in revenues. Now this year, we are saying that in the next 3 to 4 years, we will be $1 billion in so you see that if you take segment by segment, then except for the repo segment, which is our traditional segment in the Building Solution as well as in the Polymer Solutions, we are grossly and comprehensively underperforming the -- our peers, the competition.
Now for example, in the Polymer segment, our revenues are flat in the past 3 years and our margin for FY '24 are the lowest in the whole industry at least amongst all the listed players. If you see the Building Solutions segment, then there is a player big block construction, which is doing less than half the revenue that we are doing in AAC block, but their PVT margin is 6% whereas our margin Barite IT margin is 5%. And their market cap is almost equal to the market cap of.
So and after roughly end of performing in the domestic market, we have gone into a saturated or declining market like Germany, and then there we are trying to be the impossible. So we are in a totally value disruption where the corporate after taxes falling by 19% as over the 5 year -- past 5 years, our return on capital employed is less than the cost of capital. So I'm sure HIL is a great place to work to employ. But when will it become a great place for shareholders.
Thank you, Keshav. I think it's -- your comments are a great shortage on for us. Thank you. Yes. I think your assessment on where the opportunities lie as part on. I think it's not too different from what we've also called out. But you can imagine is that the situation will look more -- I mean there is no fun in having a debate around whether your managing segment is 80% or 100% crores, but I would also say that it's not entirely inaccurate.
There are 2 choices. The choices are either we conclude you, I own a disappointment or we are on 1 recovery and there was a plan to do that. I think that's the update for the second one. And that's the journey we are on. You would also appreciate none of these are overlaid switches that can be done and we can turn them on in a band in city as part of what have been sharing is attention to also give you the comfort that what are the areas I mentioned in which the plans have been put in place, impacting on, execution is happening.
Recovery, as you would appreciate, is always a steer and somewhat slower one are now doing preventative stake recoveries in any business. So yes, the assessment and the identification of those opportunities. And by and large, even the taxation.
So I just want, sir, if you could tell us that for Parador especially. So there has to be, for what efforts you're putting where we appreciate, sir, but there has to be some deadline that if we are unable to turn around this company by this time, then we will rethink our plans.
Because there is more point just like Tata acquired Corus and they kept on putting money, kept on putting money. And ultimately, they are drastically winding down the capacity. So it's better to just control the losses rather than just compounding the mistake by keep on putting more and more funds and more management bandwidth from where their prospects are moderate.
Have you -- if I may, to talk, Keshav, have you been following the Parador story for the last 4, 5 years?
Sorry, in 5 quarters or the have made, it will be a cumulative loss. So there is a time value of money also, there is an opportunity cost also. Just a feedback from the shareholders that please rethink your priority because the growth is in India, and we are trying to struggle in a saturated market. So if you see the Eurozone economy is staining 2007 at $12 trillion. So I mean, what's the point of struggling over there is beyond comprehension.
So I think part of that, Keshav, I think it's important to understand why there is optimism and there's a slightly different point of view, but we have internally about are then maybe perspective on it. The most important thing is that the product, the brand and the equity that who have at that company is worth a lot more than what it was showing us at the moment. I'm not doing talking valuation, I'm talking in terms of revenue and P&L performance.
We want to do it at 100% to make sure that its true potential is reached. We now have line in sight of getting there. There are early signs of recovery. And one of the things that I would respond to you said, year certain macro and the economy. The question of the last Q is, are there more successful companies in the Eurozone? And buying instillation from those, we feel that you can be one of those, which also means that part of the revenue portfolio will need to be diversified from any particular geography to a few more geographies, which will be cash that we are on.
Although we candidly admit the last 12 to 24 months have been difficult. I will also highlight that the previous 24 months was great. And the insight of shareholders were also extremely happy about most 24 months.
Given there has been a recessionary period in that geography should not mean that the core that we hold on to suddenly becomes not available. Yes, there is a recovery, and we are putting solid efforts to ensure that it's an accelerated recovery from where we can. And to your question, there should be a time line, yes, there is always a time line.
Has that time come in or a minor because there is dose left and we want to look valuated focal case realizing that.
So sir, I hope our efforts bear fruit and...
Sorry to Mr. Keshav, I would request you to kind of rejoin the queue if you have follow-up. We'll take the next question from the line of Niraj Shah from Arihant Capital.
My questions have been answered. Just 1 clarification was left regarding the consolidated EBITDA margin that you are talking about for FY '26, you mentioned 10% to 12%, but what did you mention for FY '25?
We have a consolidated level SP1 7.5%, 5%.
The next question is from the line of Nitin Ghandi from InQuest.
Can you share with us what's the maximum potential revenue from each of these segment at current feeling prices?
Maximum potential revenue. I'm just trying to beat the reasonable time frame, so that the answer makes sense. If I look at the FY '27, '28 timeframe, the routing segment maximum potential could be about 1.3x as or current year. Building Solution authority -- I'm sorry, Agarwal helping me with some notes.
Overall, building contribution could be in the range of about 750 to 1,000 depending on the capacity addition that we are doing. Pending our own plans and already, I think the top line acquisition, et cetera, we have line in sight to pushes towards the 1,500 mark.
The PNVC segment will be closer to the INR 500 crore mark. Flooring Parador in this time frame should do narrow EUR 23 million to EUR 25 million now.
Sorry, how many million euros you say? EUR 25 million.
EUR 225 million to EUR 230 million.
Yes. Okay. And for this roofing solution for building, you are likely to double the capacity, but for proofing any expansion.
Roofing, no expansion of plan.
The next question is from the line of Sanjay Kumar from ITO Financial Consulting.
Question on the Building segment. What was the reaction for the full year.
I'm sorry, the line will see...
Sir, your audio is not clear, maybe request to kindly use your handset to ask question.
Yes. What was the realization per cubic meter for the full year?
In the building segment calculate you need to say is overseas blocks, which is on 2018 cities after rate went.
Sir, is it that much lower compared to the peers. I think the -- even the listed peers at INR 3,800 per cubic meter. Why is that different?
There is good freight and that number will be in the range of INR 3,500. Again, the prices are distrain different reverse. So we are a plant in China in Rabat, Maja, Arana as well as an risa. So each plant is a different realizations.
Okay. And what is the raw material cost for this segment as a percentage of sales?
Yes. It's the realization number reining the range of 30%.
40%. Okay. Okay. So this is gross margin is in line with other peers, but it is not reflecting in EBITDA margin. Is it down to the efficiencies we have in our freight and transportation or the operating leverage sitting in employee cost because the gross margins are same. So we are having demand in the other line items. Can you comment on this?
I think -- so the one -- I don't -- I can't guess what per you have in mind that it's not an exact peer because we are a multiproduct we use so we do an we do both as well as blocks. There is that difference to keep in mind. Also we are a multi-geography player. So there are some differences that come back.
The third, the same year also has had in producer a fairly sharp decline on the profitability. So there are no factors also that come into play.
Okay. Correct. And sir, second question was on the other products, fiber boards and sandwich panels. The listed peer is going to introduce ALC panels out of play, light-weight concrete panels, which is going to target our sandwich panels and fiber bases. So a threat are we working on ANC panels?
Yes. So from our side also, there is effort that it's not a direct competition application as similar but my same. A lot of it is also for our type of platter is an effort that goes in building the demand for with the right influencers for that type of product. So these are not exact substitutes to each other.
Okay. Finally, what's the capacity addition in AC blocks that we are planning?
300,000 cubic meter in mutant.
The next question is from the line of Viraj from SiMPL.
Questions. One is on -- if you see the trend in the last few quarters, in other sales been on a decline a lot is also to do with the market. And if you see the commentary for one of the largest players in Europe, vote market is still quite there. So I just wanted to get your thoughts on what gives you the confidence to kind of volume growth we talked about for FY '25. What is that you are seeing in terms of -- which gives you the confidence that may be able to achieve that? And is that a turnaround happening from Q1 itself? Or do you think it's more back-ended? That is one.
Second, again on Parador is we did some financial restructuring back in Q3 and the interest costs are expected to come now. Now what the list what an intercompany loan and as well as we have provided a corporate guarantee as well. So any thoughts you can give on why we did that?
And lastly is on the Building Solutions. If you look at our presence by on a pin the basis, we are more on north, east and south. But if you look at all the markets like right, the demand-supply equation is -- demand is part excess of supply right now. So any particular reason why we've not been there or any plans of expansion in that case? These are the 3 questions.
So Parador, what gives us confidence on the recovery side. I think much of what we are talking about is assuming a flat or stable market environment. So whatever bounce back that happens in the market will be an upside potentially on the numbers that I'm talking about.
Where does that confidence come from? I think the real high return to how the order books have been tracking over the last 3 to 4 months and that order book has consistently exceeded the turnover that we have registered like the one need indicators would give us a go center confident.
The second steps that we have taken internally, number one, was in Europe. We have do organized our sales teams, do a structure we meter incentivized, which basically means that some of the success we've hired in our core Central European markets like Toni. It is now being replicated across Western Europe and Nordics. So we are opening up channels and retail, which was our traditional state center developing nice as well.
Now these channels have a way of adding scale and volume in a significant manner. That's number one.
Number two, I've been talking about the playing on the commercial side, where over the last 4 to 5 months, a lot of work is now concluded on building the right product portfolio, the right collectors and the right team to make a solid push towards that work having been done where a pipeline of orders that we are achieving and that should open up on your new segment.
Third is the work that we are doing with our customers. One is from a branding marketing but also like from a product innovation point of view. We had not done a new -- major new product launch for 4 to 5 years. The event that I talked about in March in post like a Fashion Week in the garment space. That's the kind of category we are in where you need to refresh what you have as an offering to the market periodically.
We had only 500 people come in from mostly from Europe, but also a large region like China, the nearly INR 42 crores so that. And that has resulted into others, a lot of customer interest could most importantly, sort of your seriousness of being that business in that geography. And the new places that we are getting into.
Places like U.S. and China last year in terms of the revenue performance, all those 2 small but have been the best ever for us. So those are also showing lettings. So a lot of the confidence that we speak about is coming up bottom up from what we gain from the market that we are playing in and the teams that operate in that market.
It was not an mechanical projection on itself. These are all bottom-up estimates. And I'm again reiterating that we estimate our basis, continued sluggishness in the macroeconomic environment, advances and there are indications like that as there may be an upside also on this.
And -- so that was I think your question on Parador in terms of?
On sale on the financing cost advantage. So the annualized adrenalin the range of INR 5.5 crores. Our profit is already utilized in last year, the balance will come in.
Last question more than open and the long system.
So that is what I said, it's a 5 crores annualized savings on account of interest costs U.S. already realized in master balance has to come in this year.
Your question on vending solutions. Yes, West has been an interesting market. We do have capacity. It's not that we don't have. We have a plant in Berlin produces docks. So there was some capacity.
Do we want to seriously consider putting up more capacity? Yes. Are we evaluating it? Yes. So soon, we are in a position to announce something concrete will be full sort but we are globally tracking the market, and we agree with intact on filing tradition.
Just one follow-up on Parador. In the past, we talked about having a pipeline of more than 70 million, 75 million commissions, right? How would that pipeline be to be now? And how is the conversion happening? Can you color this on that?
So we would have the exact numbers. My sense is after churning out the wins and whatever large opportunity, we will still be in the zone of about $80 million to $85 million. That I think is a healthy pipeline to maintain. What has been win ratio? The win ratios are typically, the win-loss mark. It's about 35% as the win ratio that happens, but you would appreciate that items in these pipelines also, however, 2 to 12 month period in which it gets resolved and the decision from. So there are 2 other factors to keep in.
Ladies and gentlemen, we will take that as a last question for today. I would now like to hand the conference over to the management for closing comments. Over to you, sir.
Thank you. As always, it's been a pleasure interacting with all of you over this call. We thank you for taking the time out. Thank you forn staying engaged with the HIL story. I will, again, we take I think there were some comments that. We take those governments in the absolute positive manner because that's the opportunity that lies in front of us for companies with the legacy that we will, there will be periods. The opportunity set looks lighter than it should. So that's the time when our execution capability and our legacy comes into place. And you are deeply conscious of making that turnaround in a second accelerated me.
So thank you so much. If you have more questions, we would like to know more about any of our businesses and how we are doing. We are happy to spend bang one-on-one with any of you. Reach out to an Investor Relations as can be to you on those queries. Thank you very much.
Thank you, members of the management. On behalf of HIL Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.