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Hi-Tech Pipes Ltd
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Ladies and gentlemen, good day, and welcome to Hi-Tech Pipes Limited Q3 FY '22 Earnings Conference Call hosted by Ambit Capital. [Operator Instructions] Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Dhruv Jain from Ambit Capital. Thank you, and over to you, sir.
Thank you. Good afternoon, everyone. Welcome to Hi-Tech Pipes Limited 3Q FY '22 Earnings Call. We have with us Mr. Anish Bansal, the Executive Director; and Mr. Arvind Bansal, the CFO of the company today with us to discuss the 3Q FY '22 earnings call. Thank you, and over to you, sir, for your opening remarks.
Good afternoon, and welcome, everyone, for our Q3 FY '22 earnings conference call. In the third wave of COVID pandemic, hope you and your families are safe and healthy. I'm joined on the call by Mr. Arvind Bansal, CFO of the company. I hope everyone has had a chance to go through our results and updated investor presentation uploaded on the exchange. We are delighted to report double-digit net profitability in Q3 FY '22 continuously for second quarter in a row. EBITDA per tonne of INR 3,852 in Q3 FY '22, growing sequentially quarter after quarter. The portion of value-added products has increased to 25% in Q3 FY '22. It is continuously growing quarter after quarter. In the reported quarter, volume has decreased by 20%. Primary reason for decrease in volume is the extended monsoon period in the months of October and November and wider price gap between primary steel and secondary steel due to which distributors and dealers have started destocking. Sales utilization has improved considerably year-on-year basis, primarily led by increase in price of steel products and higher sale of value-added products. Though the raw material prices have increased on Y-o-Y basis, we have been able to improve our operational efficiencies, which has benefited us in margin improvement. I'm happy to share 2 major developments in the company. Firstly, the production of pre-galvanized tubes and pipes at Khopoli plant. The company has started commercial production of pre-galvanized pipes for Maharashtra and Goa market at Khopoli unit. Maharashtra and Goa markets are enjoying second-highest market share in GP Pipes on all India basis. The company is having backward integration for raw materials of GP Pipes. That is GP Coils, which is manufactured at Sikanderabad facility. Quality and service of GP Pipes is very well accepted in the market. Secondly, production of Galvanized Corrugated Roofing Sheets at Sikanderabad facility. The company has started commercial production of Galvanized Corrugated Roofing Sheet at its Sikanderabad manufacturing facility primarily for Northern markets. The company is having backward integration for raw material of GC Sheets. Quality and service of GC Sheets are very well accepted in the market. The company is further increasing the capacity of GC Sheets by adding new lines for thinner gauge sheet. The company is committed and focused to optimally improve capacity utilization of our existing plants. And at the same time, we have a clear vision to reach 1 million tonne capacity from the current level of 5.8 lakh tonne. The current quarter, Q4 has started with a big bang. Steel prices have more or less stabilized. Price gap between primary and secondary steel has narrowed down substantially, which has come down to the previous level. And the construction activity is going on full swing across the country. Though the country is passing through the third wave of COVID, however, we hope it will not impact industrial and construction activity in the country. With robust demand, we are very optimistic that this financial year will set a good foundation for years to come. I will now hand over the call to Mr. Arvind Bansal, our CFO, to take you through the financial results of -- for the quarter, December 31, 2021.
Good afternoon, everyone. I will take you through the financial results of Q3 FY '22. Our revenue from operations for the quarter grew by 6% year-on-year basis to INR 440 crore as against INR 416 crore in corresponding quarters. The revenue growth was primarily driven by a significant increase in our sales volume of value-add products and higher realizations. Sales realizations has improved by 48% to INR 67,600 per tonne as compared to INR 48,100 per tonne in corresponding quarter. Our EBITDA for the quarter increased by 8% year-on-year basis to INR 25.08 crores as against INR 23.22 crores in corresponding quarter. EBITDA per tonne for the quarter stood at INR 3,853 per tonne as against INR 2,800 per tonne, which is an increase of 37% on a year-on-year basis. The increase in EBITDA per tonne was primarily because of increase in sales realizations, increase in share of our value added, improvement in operational efficiencies and reduction of fixed cost on per tonne basis. Our profit after tax increased significantly and stood at INR 10.17 crore as against INR 9.26 crore in corresponding quarter. With this, I would like to open the floor for questions. Thank you.
[Operator Instructions] Mr. [ Ritesh Shah ], you may please go ahead with the question, sir.
Sir, I had a question. How should one look at the company's value addition, if you can help it on a percentage in volume terms? And are there any new launches that you are looking at over next 18 to 24 months? That's the first question.
The volume of our value-added products, actually if you see, it is increasing quarter after quarter. In last financial year, proportion of our value-added product is around 15%. In quarter 1, it was around 22%. In quarter 2, it was around 23%. And now it has increased to 25%. Actually, value-added products earlier, they were galvanized by metal beam crash guard. But now we have added Galvanized Roofing Sheet and we have started production of GP Pipes at our Khopoli facility also. And we have started production of wider cold rolled coils and strips also, which has really given good margins to the company. And in quarter 4 or in the beginning of quarter 1 of FY '23, we are going to start Color Coated Roofing Sheets, which is going to further add in the [ city ] of our value-add products.
Sure, sir. And sir, how should one look at this number of 25% going forward, given we have several new launches planned? If one had to look at them on volumetric terms, how should one look at the...
Actually, we have the vision to reach to around 30% to 35% by FY '23.
Okay. And sir, how much will be the margin differential between when we say value-added versus the normal products that we sell?
Margin differential is more than INR 1,000 per tonne -- EBITDA per tonne -- in terms of EBITDA per tonne.
In EBITDA per tonne, it will be more han INR 1,000 per tonne. That's useful. And sir, second, pardon me for my ignorance, sir, how are we managing the volatility in the raw material prices, given we understand, I think steel prices have again moved up earlier this week. So is it like a price contract or a volume contract? What sort of MOUs do we have with the steel companies to mitigate the inventory risk? And anything on working capital that we are doing incremental to actually flatten this out?
Actually, regarding this price volatility, the good thing in our industry is, see, whatever price increases there, or some time decreases there, it is well known in the market. The mindset of our distributors and dealers is [indiscernible] going to increase will happen or decrease will happen. So we are able to pass on the increase or decrease in the market within, say, it's kind of around [ 7 to 10 days ] itself. In quarter 2 and quarter 3, there was steep increase in the raw material prices, which has really impacted the market of organized players. Reason being the gap between primary steel and secondary steel. Secondary steel, we call it as [indiscernible] steel manufactured by this Mandi Gobindgarh manufactures or [ Raipur ] manufacturers. Earlier, the difference used to be in the range of INR 5 to INR 6. But due to steep increase in the primary steel prices, this gap has widened to around INR 20 per tonne, due to which the demand of organized players has been temporarily shifted to unorganized players. That was a temporary phenomenon. But with [ God's grace ] and with market forces, now this gap has narrowed down significantly. And now the gap is more or less at the previous levels. And the good thing is, see, now the steel prices -- the primary steel prices has also stabilized this. Only some minor corrections might be there. No major corrections [indiscernible], it is going to happen, at least in near terms.
Right. Sir, sir, my question was, do we get into back-to-back contracts, like do we have price and volume commitment, both when we procure material from the [indiscernible]?
Yes. Actually, we have annual MOU with our steel producers, like this [indiscernible] is there or TATA is there, or Steel Authority is there. We have the volume contracts with them, annual volume contracts. But prices are decided on a monthly basis.
Sure. And sir, what is the sort of inventory that we keep at the plant for finished goods as well as raw materials? In a number of ways, well...
Total inventory, we are keeping around 40 to 45 days.
Okay. And is this a number that we are comfortable with, even going forward? Or is there scope for reducing this?
Earlier, it was around 50 days. And before that, it was around 55 days. So this inventory days are reducing year after year. And we are expecting in the times to come, it is going to further decrease.
Sure. And sir, last question was there an element of inventory gain basically in this quarter?
Some inventory gain, minor inventory gain was there in quarter 3. But actually, that gain was there in the month of October and November. And that has been mitigated by decrease in the price in the month of December. So only some token gain was there.
Sure, sir. That's useful, sir. And wish you good luck.
The next question is from the line of [ Bhavin ] from Investec Capital.
My question has been answered.
The next question is from the line of [ Dharma Venkatesh ], an individual investor.
Am I audible now?
Yes.
And congratulations on doing a very good set of numbers in these difficult times. My question is that what is the CapEx plans the company has in the future? Because when I went through the annual report, the company targets -- has a capacity target for financial year 2024. So what are further CapEx plans the company have in pipeline?
Ms. [ Dharma ], actually, we have the clear vision to achieve our capacity to a level of 1 million tonne. But at the same time, we have the focus to achieve our existing capacity. Our existing capacity is 5.8 lakh tonne. At present, our utilization is in the range of 45%.So first, we are focusing ourselves to utilize this capacity, at least -- or to the tune of, say, 60% to 65%. After reaching this utilization, then we will think of further expansion. Although we will keep on doing some minor additions and then [indiscernible] launches, but major CapEx, we are not going to do.
So if my understanding is correct, if the capacity utilization reaches optimal level, then the management will decide on further CapEx, correct?
Correct. Correct. That's correct.
Correct. And given our current capacity utilization is around 45%. So if the capacity utilization reaches optimal levels, is there any scope for increasing the margins because of the absorption of fixed costs?
Sorry, come again?
Sir, our current utilized -- capacity utilization is around 45%. So if the capacity reaches around 70%, 75%, is there any scope for increase in the margins because of absorption of fixed costs?
Yes, yes, yes. It's the [indiscernible] when volume increases, fixed costs automatically get reduced. And it is going to add in the margin.
So is there any visibility you can give on the margins or...
The visibility what we can give is -- if you see, our EBITDA margins are increasing year after year and quarter-to-quarter. And in the times to come, also, it is going to further increase. But it is difficult to give any specific number.
Okay. That's fine. And our current debt levels are the-- debt levels is going to be reduced or kept at this level? Or what is the plan for the debt?
Actually, all this debt level depends on the steel prices also. If steel prices remain the same, hopefully, it should -- there should not be any major decrease in the debt level. This will be at the current level. But with the volume increases, we always need certain working capital. But in terms of operational efficiencies of debt level inventory in terms of number of days, it is going to be improved.
Okay, sir. And one last question. Is there -- like what is the -- sorry, sir, export market, are we looking at it? Like what is our -- moving forward? Or only we're concentrating on domestic?
Yes. [indiscernible].
Yes, sir.
So exports, we are actively focused towards exports, but the current situation is such in which the freights -- the ocean freights have gone up significantly high. And there is a very, very acute shortage of the containers. So we hope the ocean freights to stabilize in coming quarters, and we'll -- again, we'll move towards exports. Currently, the company has done exports to the tune of 10%.
Okay, sir, fine. Got it. And just as a confirmation, are value-added products share, our target for financial year '23 is around 30% to 35%, am I correct?
Correct. That is correct.
The next question is from the line of [indiscernible].
Sir, one -- first question would be, sir, you did mention that one of the new value-added products that we'll be launching would be the Color Coated Roofing Sheets. So I wanted to understand like what is the value addition in that? And what is the EBITDA per tonne that you look at in this product?
Anish Bansal on this side. So the Color Coated -- we launched this product in the first quarter of [indiscernible]. The EBITDA margin in this quarter ranges from INR 5,000 to INR 6,000 per tonne on a blended average basis.
And sir, what is the value addition? I mean, besides coloring, do we do galvanizing? Or what is -- why so much difference? I just wanted to understand.
Yes. Before Color Coated, it is continuous galvanizing, the processes. And before galvanizing, there's a cold rolling process. So it is a 3-stage process.
Okay. Cold rolling, galvanizing and then colors. And sir, which is the other product that you mentioned? Sorry, but I was not able to hear it clearly.
So that will be the launch of pre-galvanized tubes from our Khopoli unit for Maharashtra and Goa markets.
Pre-galvanized tubes. And again, the same question, what would be the EBITDA per tonne -- I mean, from these products?
INR 4,000 to INR 5,000 per tonne.
INR 4,000. Okay. Yes, that was a few questions from my side.
The next question is on the line of Kamlesh Kotak from Asian Market Securities.
Am I audible?
Yes, yes. You are Mr. Kamlesh.
Sir, just can you help us understand the volume breakup in terms of how much of the sales come through the OEM and contract business direct and how much we sell from distributor channel?
So Mr. Kamlesh, our B2C, that is our dealers, distributors and retailers, this would constitute of 70% of our sales. And 30% comes from the B2B segment, which will include the corporates, the PSUs, the government bodies, OEMs, projects and exports.
Okay. And would you have any classification how much of our product also goes? I think we also are supplying GI pipes to agri. So how much would be agri and infrastructure, any ballpark estimates you'd share?
So yes, in our tubular business, our proportion of GI tubes and pipes is about 25%. And the primary customer is the Jal Jivan Mission, which is the central body team and all the states, they have to supply the portable drinking water through pipes. And this is our focus for the coming financial year as well.
So 25% of the total volume, you said, right, is GI tube, which go into...
25% of the tubular volume.
And at the overall volume, how much percentage it would be?
Approximately 10%.
Okay. Okay. Fine. Secondly, sir, just I wanted to understand how much CapEx you have made in the Khopoli plant for this 80,000 capacity?
So we have made a CapEx of INR 30 crores to INR 35 crores for Khopoli unit.
For 80,000 units, right? 80,000 tonnes?
Yes.
Okay. And sir, last 2 quarters, we have been seeing a decline in volume. So how do you see the fourth quarter going to shape up? Is it also going to be a [ muted ] quarter, as we speak?
Yes, Ritesh (sic) [ Kamlesh ], Q4 -- Q2 and Q3, we had a little challenge from the steel price hike and the difference -- the gap between the secondary and primary players. But that is bridged down significantly. And Q4, we are hoping for at least a volume of 19,000 tonnes.
Okay. And you said that up to 65% of the utilization you are not going to have any major CapEx right now?
Yes, some balancing would be there, but not a major [indiscernible]. But the CapEx in the form of color coated, that will be there and then some balancing will also be there.
Okay. So it will be in what range, sir, annualized basis CapEx would be?
For FY '23, it should -- see, the color coating CapEx had also been captured in the previous H1 also. And in next FY '23, we see a CapEx of INR 10 crores to INR 15 crores.
Okay. Okay. Right. So sir, so is it safe to assume that by FY '24, we'll be achieving 65% of the utilization of the current capacity?
Yes, yes, definitely.
Okay. And sir, what is the gross debt as of today?
About INR 300 crores. And out of this, INR 200 crores -- approximately INR 200 crores is towards working capital and INR 100 crores is the long-term basis.
INR 200 crores is working capital, right?
Yes.
Okay. So sir, just an observation, if we compare our company with leader in that space and the kind of business there evolved over the last 2, 3 years, I think we also should rather focusing on the capacity utilization and improvement of the working capital from 60-plus days to sizable lower amount and also improve the balance sheet with the lower of debt and finance cost. And then, only I think we should contemplate the [indiscernible] expansion is what I would suggest as an observation we should now [indiscernible].
Yes Kamlesh. And as you would see from the previous years, we are continuously improving the -- on these 2 fronts, the total working capital cycle also, and the utilization also. Here, utilization -- the new capacity, 80,000 is fairly new, and it takes like a little bit of time to absorb these new capacities. So from Q4 onwards, we are fairly confident of doing the 65% utilization.
And then that also will mean that if we don't have any major CapEx...
Yes, yes.
We'll be able to reduce the debt also sizably from INR 300 crores now over the next 2, 3 years. What could be the debt level?
Yes, in relative terms, it should come down. But we'll be needing some more working capital also as we could see increasing volume. So our focus is -- and we have brought down the debtor days from 45 to 30 days in last 3 years. So the focus is there towards the better efficiency of working capital.
Right. Because, sir, as I was mentioning, the leader has already reached a cash and carry model of around 10 to 15 days of net working capital. We are already at 60-plus days still. There's a lot of scope for us to improve there. And I think need that plus the debt deleveraging happens that can take care of our EBITDA as well as profitability before the next case of CapEx goes because we have enough of headrooms to grow as far as the volume is concerned, right, sir?
Yes, Kamlesh, we are very well aware of this. And the leader is doing some dealer financing also. They are giving -- they are routing it through the other dealer finance channel. So I think once our dealer finance operates, we should -- like we should build this gap significantly.
Sure. And lastly, sir, as far as the product competitive pricing goes, are we at par with the leader and other companies? Or how our product is sold? Is it at a discount? Or is it a parity? How it works?
More or less, our dealers are retailers. They sell it more or less at the same price level, very minimal gaps.
Okay. Okay. Great, sir. That's it from my side.
The next question is from the line of [ Dhiral ] from Phillip Capital.
As I'm new to this company, pardon if my questions are basic in nature. Sir, first of all, I wanted to know what is the market opportunity size of the product that we manufacture? Hello? Hello?
Please come again.
Sir, what is the overall market opportunity size for the products that you are manufacturing right now? -- opportunity size.
[indiscernible] industry is around 8 million tonnes per year [indiscernible].
8 million tonnes?
8 million tonnes, yes.
Okay. So maybe we're very minuscule player in this, right, because our overall market -- this volume is just INR 5,80,000?
Yes. Yes. Right now, it is. And we have ample of opportunities. We see it like this.
Okay. And sir, when you say that our value-added contributes almost 25% of the current revenue. But sir, when I look at the overall EBITDA margin, sir, we have not seen any kind of an improvement in that over a period of time.
If you see our EBITDA -- our increase in value-added products is well reflected in our EBITDA margin. If you see last year, our EBITDA margin was [ INR 2,600 ]. And now in 9 months, it is INR [indiscernible] on per tonne basis.
And sir, overall EBITDA -- But if I see overall EBITDA margin, it has remained between 5% to 6% only, sir.
Actually, in our industry, we always compare EBITDA in terms of EBITDA per tonne, not in terms of percentage. Recently, suppose steel prices is at INR 50. And it goes up to INR 70. In terms of percentage, it is going to come down. But our EBITDA in terms of sales [indiscernible] per tonne. That will increase -- that is the main thing for us. Steel is a commodity. And there is always volatility in the steel prices. Sometimes there's a sharp decrease or sometimes there's a sharp increase. That's why in our industry not everybody does the analysis in terms of EBITDA per tonne, not percentage.
Okay. Okay. Okay. Got it. And sir, you also spoke about because of these higher prices, market is shifting towards the unorganized players. So what is the current organized share?
Basically, that was a temporary phenomenon, and that has happened in Q3. Now the price gap has come down to original levels. And hopefully, now this -- not going to be [indiscernible].
Okay. But sir, what is the current unorganized share?
Organized market share is around 80% and unorganized is 20%.
And sir, what was the price gap, which was there in Q3?
Actually, originally, price gap used to be in the range of INR 5 to INR 6. And in Q3, the highest price gap was around INR 18 to INR 20.
Okay. So now again, the spread has come down to INR 5 to INR 6?
Yes, yes, yes.
Okay. Okay. And sir, just last 2 questions, sir. So why our capacity utilization is very low at 45%? It is that we have increased our capacity, that's why?
Because -- there are major 2 reasons. First one is our Khopoli facility has been started in Q4 only of FY '21. And that is going to be increased gradually. Volume is going to increase gradually. Second thing is, in Q3, we [indiscernible] shift from unorganized to organized players [indiscernible] players, which have impacted both our share, everybody's share. But hopefully, in Q4, we are going to get good volume.
Okay. So you just given the guidance of 90,000 metric tonne, right, sir?
Correct, correct, correct. That's correct.
Okay. Okay. And sir, lastly, you're targeting 35% value-added products by FY '23 end. So what will be our targeted EBITDA percent for that overall?
Sir, we have already mentioned this EBITDA per tonne is going to increase quarter after quarter. And it will be difficult for us to give any specific number, but it is going to be increased.
Okay. So this -- just last on...
[Operator Instructions] The next question is from the line of Dhruv Jain from Ambit Capital.
Sir, I had a question, and this is a continuation of something that you mentioned in this call. So with respect to working capital days on the receivable side, and you mentioned that some of the industry peers are able to do channel financing. So just wanted to understand that when can we start channel financing? Or what are the [indiscernible] we've seen that there has been a decline in spend in inventory days. So furthermore, what are the kind of initiatives or things that you are doing on the inventory side to reduce this going forward?
Yes. So firstly, regarding the dealer financing, we are actively trying to get the same arrangement with our distributors and dealers. And I think in the next financial year, we'll be very close to sign it off. And secondly, regarding the inventory levels, as you have seen, it has come down. And we still see there's a scope of another like 5, 7 days more to shrink the inventory days. So we are focused on this. And maybe next financial year, we'll bring down this further.
So the next one is if we have to think about working capital reducing going forward, what is the kind of target that you are setting for yourself in terms of days working capital reduction in terms of these going over the next 2 or 3 years?
So we -- our benchmark is what the market leader is doing. So gradually and steadily, it's a process. So -- and we are very conscious of this fact. And I think another like 3 to 4 years, we'll manage to be in the same range.
We take the next question from the line of [ Amruta Deherkar ] from Wealth Managers.
I wanted to know regarding the Galvanized Color Coated Roofing Sheets. What is the kind of capacity that we are coming up? That's my first question. And my second question is regarding the debottlenecking, which you had spoken of in the presentation. So like what is the time line for completing that debottlenecking from 5.8 million to 7 million tonnes, right?
So the Color Coated Roofing Sheets, this capacity is about 50,000 tonnes. But our overall capacity will be at 5,80,000 tonnes only. It's a value-add product. So the total capacity will remain at 5,80,000 tonnes, but this 50,000 tonnes will be value-add product.
So like in the current capacity of 5,80,000 tonnes, what is the proportion of value-add capacity that we have?
Out of 5,80,000 tonnes, we have -- the value-add capacity is around 2,20,000 tonnes.
Sorry, 2,00,000?
2,20,000 tonnes.
Okay. And what is the time line for -- I mean, what we're working with the capacity?
So the debottlenecking will take place in FY '23 partly and partly FY '24. And the debottlenecking is going to take place in all the plants. And we are looking forward for a 10%, 20% increase in every plant.
And what is the, kind of, like CapEx spend that we have to do for this debottlenecking?
In total, it should be around INR 15 crores to INR 20 crores. Total will be INR 15 crores to INR 20 crores.
The next question is from the line of [indiscernible].
Sir, 2 questions from my side. So first question is that you did mention that this quarter, January, we have started on a strong note because of the construction activities, et cetera, resuming. So you expect a good quarter for -- good Q4. But if I have to ask you if you can give some guidance, how do you look at the volume numbers or volume growth, say, for FY '23, FY '24? So if you can give some numbers there, that would be helpful.
Okay, Q4, we are targeting a volume of 90,000 tonnes.
Okay.
And in FY '23, we are targeting a capacity utilization, and average capacity utilization of 65%.
65, 6-5, 65%?
Yes, yes. Approximately 3,80,000 tonnes.
So, sir, that would be a growth of around 10%, 15% Y-o-Y?
20 -- more than 20%.
Okay. Okay, More than 20%. And sir, second question would be, sir, if you see that the market leader is talking a lot about, say, building hospitals out of the tubes, et cetera, I mean, a pre-engineered structure. So they are even talking about building that are being made out of the steel tubes. So sir, how do you see this area of business? I mean, of course, with the current capacity, I understand that you might not be having the capacity to produce this type of steel tubes that are needed for that. But overall, I mean, you might have done some assessment. So how do you see the structural -- the structure -- I mean, that area of the business? I mean, if you can comment there, that would be helpful.
Yes. Actually, our production rates are fungible. We -- in fact, we are making these products and we are supplying to the warehousing segment wherein all the tubular structures are being used for putting up the warehouses in check. So we are already present in this segment. And as the market goes -- because right now, it is a very, very nascent stage. So as the market goes, we are equipped and geared up to meet this demand.
Okay. And sir, on the high storey buildings, like, is it possible? I mean, how do you see that? I mean, the feasibility of, say, building of 5-storey, 6-storey building out of this planning -- I mean, does it give the same?
As you would have seen in our annual report presentation, we have featured one project in Noida. This was a 4-star hotel. And the entire hotel is made from Jumbo steel tubular pipes, which is our offering. And we have provided more than 500 to 600 tonnes for this project. And this entire [ G+8 ] has been built on the whole section itself.
So then how do you see the acceptability of these, I mean, pre-engineered buildings? Or how do you see this business shaping up? And do we, as a company, have to put in some more efforts like in convincing people or over a period of time, you see that the acceptability of these products would increase? Yes, that would be the last question.
I think for our industry, this is going to be the game changer in times to come. And as we have seen in the West and the other developing nations, this is a standard norm of construction.
Okay. Okay.
So -- definitely, this will open a huge opportunity for our industry.
[Operator Instructions] The next question is from the line of [ Surbhi Sharma ] individual investor.
My question is related to the branding of GC and Color Coated Sheets as you are manufacturing these new products. What the company is really doing about branding of these GC, Color Coated Sheets? And is the management thinking about engaging any brand ambassador for that?
Very good question. The company is -- because it's a B2C product, and we have identified certain marketing and branding strategies and activities. And we have endorsed a good professional team for this. And so starting from this quarter, they will start on this in our northern markets -- rebranding activities in the northern markets like UP, Rajasthan, Uttarakhand, J&K, Haryana, Punjab. So these directories, they'll will be covering in Q4. And as the production increases and as the supply increases, we'll go down to the further states. Regarding brand ambassadors, it is definitely on path, but we'll take a call in times to come.
[Operator Instructions] The next question is from the line of [ Dharma Venkatesh ], an individual investor.
Sir, just a small question. Like what is our financing cost in terms of percentage for our debt? Is the number available?
Yes, Mr. [ Dharma ]. So right now, our blended is between 8.5% to 8.75%.
Okay, sir. And one small suggestion, sir. Like in the investor presentation, like, is it possible to give the breakdown of volumes between products. It will be helpful for us.
Yes, definitely. We'll make the change from the same quarter....
The next question is from the line of [ Dhiraj Kumar ], an individual investor.
First of all, congratulations for the wonderful set of numbers. My question is that how is the company, or the management is focusing on the R&D activities, like towards product innovation or to improve the current products as per the market feedback? Do we have hired an agency for this? Or we are doing this in-house?
Dhiraj?
Yes. Am I audible, sir?
Yes, yes. You are audible. Actually, if you have seen, we keep on introducing new products in the market, like we have introduced Galvanized Roofing Sheets, GP Pipes, our [indiscernible] steel pipes, [indiscernible] buildings. And in time to come also, we are going to introduce new products. As our director has mentioned, we are going to start Color Coated Roofing Sheets in first quarter of next financial year. And we keep on introducing such products. We have a marketing team with us that is exploring the market requirements. We are meeting with architects and engineers also. And we definitely -- our team is working on the subject.
The next question is from the line of [indiscernible].
Yes, sir, you did mention about the brand -- brand activity. So just wanted to understand like how much -- I mean, say, for example, we at Hi-Tech, if we make a brand like we do a lot of promotional activities, et cetera. Sir, what is the brand premium that you can enjoy, say, if you have to compare it to, say, unorganized player or like-to-like players? Of course, we can't compare it to the market leader because of the -- I mean, is it possible that we can command the same market premium that a market leader is doing, if you do that? And what would be that percentage?
Actually, all this branding is a [indiscernible] process. It is not going to happen in a single day. Branding is basically a trust of customers. And trust of customers can't be won in a single day. And definitely, as our branding improves, as the trust of customer improves, we are going to command prices also in the market, better [indiscernible] in the market, better demand and priority over our peer's product.
So what would be that number if you can quantify it? I mean, say, 1%, 2%?
Everything can't be quantified in terms of numbers. It's a [indiscernible] process. And as this process is going on, you can see the translation of all these things in our numbers -- of quarter numbers. But if you want quantification, practically, it is not possible.
[Operator Instructions] Ladies and gentlemen, that was the last question for today. I would now like to hand the conference back to the management for closing comments. Members of the management, you may please go ahead with your closing remarks.
I take this opportunity to thank everyone for joining on the call. I hope we have been able to address all your queries. For any further information and guidance, kindly get in touch with us. Thank you so much. And have a good and healthy day.
Thank you very much. On behalf of Ambit Capital, that concludes this conference. Thank you all for joining. You may now disconnect your lines.