Sirca Paints India Ltd
NSE:SIRCA
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Sirca Paints India Ltd
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Ladies and gentlemen, good day, and welcome to Sirca Paints India Limited Q2 FY '23 Earnings Conference Call, hosted by TIL Advisors Private Limited. [Operator Instructions]. I now hand the conference over to Mr. Sayam Pokharna from TL Advisors. Thank you, and over to you.
Thank you, Yashashri. Welcome, everyone, and thanks for joining the Q3 FY -- Q2 FY '23 Earnings Call of Sirca Paints India Limited. The investor updates have already been e-mailed to you and are also available on our website on and on the stock exchange website. To take us through today's results, we have with us the management team, Mr. Sanjay Agarwal, Chairman and Managing Director; Mr. Apoorv Agarwal, Joint Managing Director; Ms. Shallu Arora, Chief Financial Officer; and lastly, Mr. Suraj Singh, Company Secretary and Compliance Officer. We will be starting with a brief overview of the quarter gone by Mr. Apoorv Agarwal, followed by an overview on the financial performance by [ halo ]. I would like to remind you all that everything said on this call that represents any outlook for the future that can be construed as a forward-looking statement must be viewed in conjunction with the risks and uncertainties that we face. Some of these risks and uncertainties have been mentioned in our prospectus and follow-up annual reports. I would now like to hand over the call to Apoorv. Over to you.
Thank you, Sayam, and good afternoon, everyone, and thank you for joining our earnings calls for Q2 FY '23. It is my absolute pleasure to be talking to all of you this afternoon. I would like to begin by expressing my gratitude to my team, the investors and everyone associated with Circa pains and Delimited for your continued fees and trust in us. I would like to quickly take you through the performance of this quarter, followed by an update on financial performance by our CFO, Shallu Arora which we can open the floor for questions. As you can see from our performance in Q1 and Q2 in FY '23, it has been on a solid footing for the company. We witnessed healthy growth in top line in both Q1 and Q2. The performance has been good across all product portfolios. While Italian continues to be the backdrop of our performance. Other emerging categories like Unico are also making a noticeable contribution to our top line now. On the wall paint side, the response is good and more specifically in our premium category of solid seller finishes and texture coatings dates and Marco. Keeping in mind the response of Senarco so far, we are launching our first exclusive experience center for this portfolio, beginning with our first one in MG Road located in New Delhi, and the other one is in the pipeline. The movement on the Garanti Vian Glu portfolio is yet to pick up, and we have ordered the container with full load of products for the sampling with our OEM customers, which is expected to arrive within this month. On the resin side, as announced in our previous investor communications, we were in the process of commissioning a resin manufacturing line in our existing Sony Post facility, which is operational since the end of Q2. Currently, this line is manufacturing resins for our melamine and NC product category under the Unico brand. And the next step is we are planning to take up the manufacturing of resins for Unico range of products. We believe this project will be very crucial in standardizing the quality of the manufactured products and also will aid in cost optimization. The South India manufacturing facility remains on hold for another quarter, but we are quite confident that we will be in position to share updates on the same before the end of the financial year. The demand outlook for the coming quarter remains solid, barring some minor seasonal disturbances like temporary stop on the spray-painting due to pollution-related issues in the Delhi NCR region. Otherwise, we expect to do much better in the H2 FY '20 through '23 compared to -- now I will hand over the microphone to our CFO, to take you through the financial highlights for the quarter. Over to you, Shallu.
Thank you, sir. Good afternoon, ladies and gentlemen. It's an absolute pleasure to be here with you. So on the financial system, quarter 2 financial year '23 remained our highest-ever quarter in terms of revenue from operations with sales of INR 72.92 billion, registering an increase of around 20.3% year-on-year and 18.9% quarter-on-quarter. This is despite a higher base of both quarter 1 FY '20 and quarter 2 FY '22. On the profitability front, we have recorded an improvement in EBITDA margin with standard 26.3% in Q2 FY '23 compared to 25% in the previous quarter in Q2 FY '20. Our profitability has been aided by a price high take a last quarter coupled with cooling down of raw material prices and a line. Our past for the quarter stood the other highest of INR 2.42 crores, up 41.9% year-on-year and 23.5% quarter-on-quarter. We continue to maintain a solid balance sheet position with Zero in surplus liquidity to fund our future growth and expansion plans. On the working capital front, we carry higher buffer inventory to avoid any supply disruption of imported products, coupled with increasing manufacturing activities, further at better days also remain under control. Now we can open the floor for questions.
We will now begin the question-and-answer session. [Operator Instructions]. We have our first question from the line of [ Sandesh Agarwal from Sasa Capital ].
Congratulations management for great results. And I have some few questions. I am new to this company. So my first question is, sir, what is your key differentiator against Hikari and Asian pens regarding product...
Yes. So ICA Pidilite and Asian Renner, as you rightly mentioned, are our main competitors. But currently, if we talk about our product portfolio, currently, we have a larger city of products to offer to the market. So we compare to capitalize. Secondly, we are the only company now which are still offering 100% made in Italy products. So our presence amongst the architecture and influencers still is much more when it comes to recommendation through architects of pure Italian products. Third, our strategy, if we compare against the Asian Renner, we are quite more preferred partners are becoming a preferred partner of dealers where we are entering because we are offering a secured margin to the retailers. So 3 main points where we differentiate and where we say that we are a step ahead and our competitors is our biggest product city compared to Isaiclite, a better presence amongst the influencers, especially the designers, when it comes to the 100% main product, which other main 2 competitors doesn't have. And thirdly, a better margin to offer to the retailers so as to keep your interest in our brand.
Okay. And my second question is, sir, what is the market size of Italian and economical to -- and among that, what is our market share in both the category Italian and economic... See, amongst the Italian view, we still are enjoying almost 20% market share, above 20% market share because this market has grown more than about INR 800 crores to INR 900-odd crores, considering the data that we have from Europe of export. But once the capital it and Asian when are moving towards manufacturing in India also of the products which they import from at least the actual imports of these products are declining. But for us, for now, we are still maintaining the Italian identity. For sure, in coming months, the 6 of our main products will be produced in India. So we will be in a better stage or positioned to compete the market in terms of pricing. But as of now, we hold more than 25% share -- when it comes to the Italian category. Overall, to market, if you say, which combines of the talent you made in India a few 120 water bond, pinners, wood fillers, altogether is above INR 6,000 to INR 7,000-odd crores, out of which we are still present in a smaller niche because the Unifor manufacturing has just started, and we are increasing our distribution footprint. So currently, the market size of the total wood coating is above INR 6,500 crore, INR 7,000 crores.
Okay. And sir, what is the mix of Italian and non-Italian in our current quarter since? And also the product-wise sales like Union wall.
Yes. So if we talk about the contribution of Italian, it still remains on the top and approximately 67% of our sale is coming from the Italian fees, 12.5% is coming from the UNICO range of products and other 12.5% from the thinner. So combined Unico is about 25% now. And Volpe is still a very small contributor of about 4%.
Okay. And sir, what is the capacity utilization for this, I think, this H1 -- for our Unico and other...
Yes. So for the NCM and together with the Unico, we are almost at 35% of utilization with the single ship. So we are expecting that the S2, the momentum from the newly developed distributor states where the Unico products are moving is going to be quite fast. So we expect that in less than a year, we will be able to achieve 100% capacity.
Okay. And sir, Sir, how many continuations to you have installed at your dealer distributor network?
So in dealer distributor network, currently, we have installed about 60 machines out of which 80% is in the northern part of India, which includes lipanjab, Arana, UP, U.K. and Utrata. Now we are expanding out to Gujarat and Maharashtra and South very aggressively, and we expect that other 50 machines to be installed in the next -- in...
Okay. And sir, how do you see response regarding intimation from our dealer distributors?
Yes. So the response of the tinting machine is very, very, very good because the sales of the color, the sales of the pigmented is increasing because people are now using more colors on their kitchen waters and finatures, so the demand for the pigmented fee is rising every day. And by installing machine, the margin of the retailers, especially in the light color products, increase quite high because the -- and fortunately, the sale of the lighter is more than darks they are earning very good margins. That is why we are very keen to have the machine. So we are satisfied we have come out with a very aggressive policy of machines. -- wherein we are offering the machine at a very good financial contract. So it is attracting a lot of dealers, and we are adding more dealers to join with our machine program. And in future, we are expecting that the sales related to the segmented is going to rise and dealers are showing quite key interest because from their counter, the sale of colors are increasing every day. And with the machine, they can earn very good margins, especially on the light range of colors, which contribute more to the solar sales.
We have a next question from the line of [ Rakesh Pal from T Wealth Capital ].
Am I audible?
Yes, you are audible, sir.
Sir, my question is, what is the volume growth in this half year 1 of this financing... So the volume growth also stands between 15% to 18%. So most of the growth is volume-led growth.
Yes, yes. Now it is volume-based because all the price increase that was done was in the last quarter of the last FY '22. And from the first quarter of FY '23, all the prices have started to come down. So our stream inflow has increased in the market.
And sir, with the increasing capacity utilization, can we expect some operating leverage playing out since you are around 50% capital utilization?
Yes, it is going to increase, but we are also increasing our marketing spend. We are increasing our spend towards the marketing and distribution. So we are quite maintaining the balance on that front.
[Operator Instructions]. We have a next question from the line of [ Vijay Johan from Horizon Portfolio Management ].
Certain on the very good set of numbers. So just if I look at the dealer number being distributed, so it has reached approximately 1,700 versus of INR 1,496 as of Q1. So what is the strategy that we have deployed that has worked very good for us in terms of dealer additions in just a single quarter.
So currently, no, we are now entering into the new market for the distribution, especially which I mentioned, in Maharashtra, Gujarat, Bangalore and Hazrabasmeans Patak and Talangana -- and with the Unifor range of products also launched in the northern part, where we are strong like the LipanJabaryana, we are reaching out to the second set of dealers where the sale of PU is increasing now. So the set of dealers and 3 set of dealers are coming -- are expanding horizontally and vertically. The more numbers are coming from the new markets where we are entering with the Unit, which has a very good drive advantage, good quality and the market for primary Pis increasing, so the retailers are more attaching to us. And every month, we are coming out with new dealers attached in the new territories. Besides this in our existing strong area where we are strong with the talent pew, we are adding more retailers because the is now not only limited to the top retailers, but it is increasing in the market share is increasing to the other retailers where we are reaching out with the Unico made in India to you where the response has started to come up, and we are expecting the momentum to grow faster, and that is why we are quite confident that in S2, we will be able to add even more the number of retailers that we did in H1.
Right. So any internal target that we are targeting in the next couple of years on the dealer numbers, let's say, from 1,700 to any rough plan that -- any color on that?
So at least, we estimated in the beginning of the year that by the end of this year, we will cross at least 2,000 retail points, keeping in mind our distribution expansion. So we keep on that number. And hopefully, if the things go well, the momentum keeps on going like it has shown in H1. Obviously, the results in H2 can be much better.
Right. That's very good. And on the new geography expansion that we mentioned like Gujarat and Maharashtra. So what is the difference in terms of consumer price and versus compared with the other parts of India, whether they are like more price conscious or they are like looking for a quality, any difference that experiencing the first hand side?
Yes. So there -- so market compared to the northern and the son part of India, it behaves a little differently, especially in Gujrat and Maharashtra. -- when it comes to the polyurethane coating is there is a sensitivity when it comes to the pricing. And surprisingly, these 2 are the markets, which are markets for the end user to the retailer remains the contractor. That is why the price sensitivity comes quite high. If we talk about Northern India, we are more driven by the end consumer also when it comes to the pricing. And we are influenced -- and our main influencer remains a contractor where we attract them through our aggressive schemes. But on the contrary, when it comes to Gujarat and Maharashtra, the final thing that matters is the landing price to the contractor because he actually remains the main buyer in these markets. So there is a quite difference in terms of the pricing and material replacement strategy when it comes to the Gujarat and Maharashtra market. And on the other hand, the products also. There are certain products which are very fast moving compared to Northern India, where there are 8 to 10 products, which contribute to major turnover on the contrary in the Marash and Gujarat, there are like 4 products which contribute to major revenues when we read the competition data also. So yes, it is quite a different market, and we are learning every day, and that is why we are implementing the right strategy that has needed to enter the market in a slowly and certainly paying off. We are setting up our footprint with repo in Andaba and Vida Depot in Mumbai and the retail network is increasing with almost 25, 25 active dealers in Endava Suran Mumbai each. So total 75%, we expect that the numbers should now multiply white part and the number of retailers should also increase in the coming months.
Right. And any branding like change or like marketing expense, we are increasing -- so any teachings that we are doing on branding and marketing side because now we are like moving to become like a national brand versus our geography specific. So any change in the marketing strategy or something...
Yes. So obviously, the plans for -- especially for Q4 related to marketing are quite, quite, quite aggressive. We have changed the brand perception, and we have come up with the new tagline called your Italian Autograph. So we are all ready to reach out to the consumer and all the influences through 360-degree marketing platforms, including OTT, which needs to happen, which we expect to happen from Q4 because we still are in finalization of certain distributors in the areas like Chennai, like a couple of areas in Kerala also in Kolkata, though we have signed up a very good distributors in Telangana and Karnataka. We are on the word of completing our distribution footprint by Q3, which will allow us to confidently get into the 360-degree marketing. So Q4 marketing spend would increase and -- but we are quite sure that we will be able to balance it out with the cost reduction by resin plant coming in by more products being manufactured in India, which we are currently importing. So this will allow us to freely increase the marketing spend without compromising very strongly on the margins. And this quarter, like we had very solid EBITDA margin of around 26.3%. So is this a steady state margin or like what is the normalized margin that we look for like a long-term basis, particularly ring, I'm not looking for any number... So see, going forward, the sustainable margins -- EBITDA margin that we see is anything between 24% to 26%. Keeping in mind that we are going to increase our marketing spend from Q4, considering that we are now available on a national level, and we want to be a national brand that is why all the efforts that we have put in the last 2 months -- 2 years is related to increasing -- completing the product city and increasing the distribution step-by-step has started paying us off and with this marketing spend and with the learnings of the other brands in the market, we expect that maybe for 2 quarters, it might -- the EBITDA margins might get a little on the lower side when the expenses on the marketing front increases deliberately. But at the end of the day, as I mentioned, that it will be majorly contributed and balanced by the cost reduction that is happening with the resin plant coming in with certain products being manufactured here. And with these advantages, we will be able to neutralize and long sustainable EBITDA margin is anything above 23% what I can say.
Right. And from the resin plant, any improvement in margin in terms of like percentage have you like finalized? Or is it too soon to mention like maybe 1% or 60 bps? -- can we expect on the gross margin side?
Yes. The gross margin side, see the resins contribute to almost 40% of the product formula. And currently, we have started with the NCN Melamine resins production, which is still in quantity on the lower side. Now we are moving towards the P one the product life has been tested because the testing cycle for testing cycle for these resins has to be respected as per the Italian norms because it is monitored by our Italian counterpart. So we expect that there is soon, we will start with the revenues also. But yes, it well, since 40% is the contribution and we will reduce almost by 7% to 10%. So the total percentage benefit that we will have will be between 3% to 5%.
We have a next question from the line of [ Akash Saviri from Perpetual Investment Advisors ].
Sorry, joined the call a little late. So in case my questions are a little repetitive. Apologies for that. My first question is that the we increase our lead strength by 100 in 1 quarter because the last quarter presentation said 39% is our team's strength. So have we increased our team by 25%? Or if you could just throw some light on that?
Yes. So the team expansion is happening on all the fronts. It is happening on the sales side and also on the back end and the plant side. So with the new resin plant coming in, we have new people, including chemists waiting for the resin area. We have entered into the new distribution and new territories like Nate and Balagna very strongly. So the sales team in the South and Gujarat Arastra are getting on board very aggressively. So yes, on the manpaside, on the team personal side, we have added a lot of new people in all the departments.
Okay. Got it. And my next question is that we see some improvement in the working capital cycle. So do we see any further improvement? Or would this be sustainable over a period of time?
No, in S2, we are expecting a lot of reduction in the working capital cycle in H1, especially on the stock side, we were very high because of the seasonal problems that we face from Italy, like in August, they remain close, and we have to order stock in advance in order to be safe enough to have enough material for Q3. And secondly, because of the ResaUkraine thing because of the gas problem, they were expecting that they might hold their plans for some time. So keeping in mind all the information that we had from Sirca, we had to stock a bit more. So H1 shows a very steep increase in the inventory side, which will be quite controlled in H2. So altogether, in H2, we will see a better performance on the working capital side.
Okay. Got it. And you could throw some light on the revenue split between Italian PU Unico and pains in H1? So in H1, almost 67% of the contribution was coming from the Italian few. -- other 25% was coming from the Unitu and the Kinner, and rest was coming from the Golpan and Marco and our Woodfieler range.
Okay. And also, if you could update about the export markets like Nepal, Bangladesh, Sri Lanka and Dubai. So Nepal, tacho has started to move on a positive momentum. We had good consignments now going in currently like full container loads and it is pickup picking up the momentum quite well with our distributors, Reliance pains. In Bangladesh, we are yet to sign up with a distributor. In Sri Lanka, we have started some movement with a couple of OEMs coming through our local distributor, provide an there. Though the retail sale with him has not begun, be considering all the disturbance at Lanka had in past, but the OEM business is going on, we exported about $15,000, $16,000, $20,000 in the last couple of months. But yes, we are expecting that within this financial year, Silanta and Nepal would start performing regularly in terms of export and Bangladesh, we expect that we will close the distributor within this financial year.
Okay. And also, if you could talk about the progress on the first consignment of hot melt and how has it been received by the OEMs?
Yes. So the samples that came the results related to the hot mantle especially with customers like Godridge and people who are making for IP with excellent and now we will enter with the specialized flew very soon in the market, especially with the OEMs. But on the other hand, with this product moving in, we are more excited for our second step, which is the bible which we intend to produce here in India only. So though we have delayed our projects, but as rightly said that good coating market is becoming quite aggressive. You see a lot of happening in the wood cutting a lot of nonpaying players are also entering this segment. So we are seeing a lot of happening, and we are putting all our energy concentration on the wood coating by increasing our distribution as this product is becoming of primary rather than secondary. So we see that in next couple of quarters, the momentum towards the blue would also start happening. So would white clue be a retail product... Retail, why blue, we will enter in retail with the margin strategy, margin to the retailer strategy.
Okay. And the next question is that if you plan to manufacture Italian products or your in India, on the open opportunities for exports to other markets due to the ward like any new markets or new opportunities for the company?
Yes. So we were exploring this with seat already during our last couple of visits also recently, we discussed this, though it is a complicated structure. But once it starts, I think we will find a way to export to certain other countries besides Selena Ipala and Bangladesh.
Okay. And just my last question was, if you could talk about the year-on-year change in all the segments, Italian PUC or the year-on-year change?
So in terms of Italian, we are up by almost 10%, 12%. But on the Uniper front, it is more than 30%. Sorry, on... Onto? Veltin. So Volcan is almost at the same level. It's not shown any growth.
We have a next question from the line of [ Vijay Chahan from Horizon Portfolio Management ].
Yes. So any update on the contract manufacturing side, like it was mentioning a couple of quarters back. So any opportunity that we are finding in contract when fixing side or not?
See, to be frank, we have not explored the contract manufacturing area. Currently, all the manufacturing that we are doing it for our own brand for the Indian and the export market, but we have not explored that particular vertical.
All right. And there was some mention regarding the stake increase by the Sinai. Any update on that?
Yes. The surface stake discussion is still going on during our last couple of visits, as I mentioned when I was answering the last question that we have made them for a lot of things. And with this, we are starting to produce 6 of the products in India. So considering all the unrest that is happening in the Europe related to the Ukraine thing and with the gas war. It was a bit on delay. I hope once we start manufacturing the 6 products that are manufactured in Italy in India, which will happen in less than a month now that we expect, then the -- this old discussion would come to a conclusion. So I hope it should happen within this financial year.
Right. And lastly, on like we are reaching an all-time high quarterly revenue and profit. So any target that we are internally keeping in the next couple of years, like how should be our annual top line FY '25 or maybe FY '26.
Yes. So we are planning to grow at least by 25% to 30% annual CAGR growth. So we keep to be conservative. So keeping in mind all the happening that is happening in the wood coating market, there is a lot of increase in the demand side. And parallelly, we are coming out as a national payer, we are increasing our distribution. So we still believe that these numbers are conservative. But yes, we are quite aggressive that we will grow at decent percentage for next 3 to 5 years, for sure. Yes. That was all from my son thank you very much.
[Operator Instructions]. We have our next question from the line of [ Rakesh Pal from Test World Capital ].
I have one more question. I know the revenue split in India, as per regions like how much is the earn some northeast, southwest like that?
Yes. So if we talk about the revenue split, still almost 60% is coming from the northern part of India, which contributes Belinda Arana, UP, U.K. and tracing, including the retail and the OEMs. And almost 25% is coming from the Maharashtra, which includes the OEMs and rest is coming from the southern part of India and East. East is still the least contributor when it comes to our revenue contribution?
And sir, in terms of growth, which part of India is contributing more towards our growth...
So for the growth, all the parts are contributing. In fact, the North is also contributing because we are entering into the new retailers, we are entering with the new product. And since we are present here strong, we get the results very fast. But on the other hand, Gujarat and Maharashtra, especially the metro cities like Andaba Surat and Mumbai, they are the 2 tier cities and the upcoming towns in door, they are quite aggressively now started contributing to the growth in the revenue. So we expect that in H2, especially the Karnataka, Telangana, Maharashtra and Gujarat 4 will be contributing quite a decent number to the retail sales. And on the other hand, North will be still the most growth provider keeping in mind that we are strong there. We have a strong brand presence, and we are increasing our dealer footprint with the newer range of the products.
And sir, as you see spot there might be some problem in production in Italy due to this Russia, you can you can know it. So can we expect any problem regarding that due to like some unavailability of paints in the second half? Is there any chance like that... Sir?
See, so as per the instructions of Sakata, we have talked ourselves quite well. We are well -- we are well secured for -- when it comes to the Italian product stocks till February end. So the problem that could happen is in the month of December and January when they face a lot of extreme winter and with the gas problem, there might be a notification wherein the industries might have to shut first because they cannot use gas as they have to prefer the gas first. So keeping in mind the words position also, we are quite secure with the products. But now, if I give you an update, they are still operating, and we are still accepting the orders till 15th of December. So it means that the consignment that will leave by 15th of December will ensure us that we have enough stock till March in April. So we feel quite in terms of the stocks from Italy. And this problem also is only for the winters and this gas shortage might happen and they might have to shut...
We have our next question from the line of [ Raymond Shah from Asian Market Securities ].
For FY '23, what could be the revenue contribution from unique products, sir?
So FY '23, total contribution from Unico range of products, including the finer will be around 35%. That's it for my side.
We have a next question from the line of [ Aditya Mehta from JK Capital ].
So sir, I just wanted to have views about a variation in the guidance. So earlier, we were guiding about 50% to 60% growth per year for next 4 to 5 years, 5 years. And moreover, on the dealer addition side, in Q4, our guidance was that we had around 150 to 200 dealers per month, which has now changed to 2,000 dealers overall by end of FY '23. So just wanted to understand what was this change in the guidance?
See, when it comes to the dealer additions, as I told you that we have added almost about 300 -- around 300 dealers in Q2 -- in Q2, and we expect that another 300-plus dealers are going to add in the next couple of quarters. The numbers remain almost in line with that what we expected since that we are going out with the 2 charter retailers, wherein we are starting to work with the reasonable numbers. So for example, in Kerala, initially, we added almost 100-odd dealers out of which a lot of dealers became inactive or with a very less sale of 6 liters. Currently, we are coming out with a policy wherein Eve-dealer contributes a minimum of INR 50,000 a sales. So a slight change in terms of agreements in terms of financial agreement with the retailer is coming out with a yearly billing of minimum flat. So that is by keeping in mind, we are quite confident that every quarter, 100 to 150 retailers still will be added. So we expect that in 2 quarters. So we expect that monthly about 50 to 60 dealers will be added, which will be actively working with us with a policy of minimum 50,000 billing a month, which includes Unico Italian view. So with these numbers, we expect that we will be able to add to our revenue, the actual numbers that we expect in H2, which shows a decent growth compared to H1. Related to the revenue growth, as I mentioned in my previous statement also that we -- with the conservative approach, we are expecting a minimum of 25% to 30% CA growth, which we mentioned that aggressively, we are expecting a 40% CAGR growth every year. Considering the external environment, sectors, everything, we currently, if we talk about, we are quite excited and we see Woodcote market going aggressively with our distribution increasing very aggressively with Unico products coming in and taking up very fast in the new territories with 6 products of Italy coming in we started to manufacture in India in the coming months. So we expect that the momentum will pick up and we will shift our gears and will move towards a very aggressive growth. But yes, to be on the conservative side, we mentioned the numbers to be 25%, 30%, but we expect that we will grow at a very aggressive rate of above 40% if we talk about the CAGR growth.
Great, sir. Great. So next year, we are targeting full utilization for the new capacity, which we have in commission. Am I right?
Yes, absolutely, please…Absolutely. We are expecting above INR 220 crore revenue from the facility. So going ahead, we might need some more capacities in order to achieve this growth rate target, which we have set for us.
So what are the CapEx plan for further years?
Yes. So we have already planned for increased capacity in our existing plant by adding 6 fully automated 3 tonnes mixtures, which -- where the CapEx will be about INR 3 crores to INR 4-odd crores since currently, we have a 1,500 liter tank now we'll be moving to 30 for the wide. We'll be adding 6 more tanks, which will add almost 18,000 liters in single shift every day increase in the production side. Besides this, for sure, as I told you, the Kabit plant, which is still on hold, will aggressively be taken up in the next couple of months. So we will come out with the increase in the capacity. I mean new capacity in the conbon the South part of India. So another -- about INR 5 crores to INR 8-odd crores CapEx plan there. So altogether, about INR 12 crore CapEx plan in terms of increasing the production of Unico and Italian view, we plan in next 1 year.
Okay. And sir, regarding our Italian products, which you'll be manufacturing over here. So this will manufacture along the unique range of products with the same resin that will be raising capacity that we have commissioned.
Yes. So this will be the parallel range product. The Unico range will go as it is and this will be the newer range. The resins that we are using in the Unico are different. And for the Italian, the resins will be altogether different. This will not be the same.
And this will have an increase in the margin in those products. Am I right?
Absolutely, 100%.
Okay. And sir, my last question regarding other financial assets, they have increased from INR 127 crores to INR 24 crores. So what was the main in this?
Sorry, the other... The financial assets. So that is majorly the short-term liquid funds. We have invested a part in the liquid funds. And going ahead of CapEx, what we have planned or it will be 10 per meter internet crores. Internal approval...
As there are no further questions, I now hand over the call to Mr. Sayam Pokharna. Please go ahead, sir.
From the Sirca Paint Limited and TIL Advisers Private Limited. If there are any other unanswered queries, please feel free to reach out to us or contact people have been mentioned on the back of the investor presentation a lot. Thank you.
On behalf of Circa Paint India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.