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Supreme Industries Ltd
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Ladies and gentlemen, good day, and welcome to The Supreme Industries Q3 FY '21 Earnings Conference Call hosted by Axis Capital Limited. [Operator Instructions] Please note that this conference is being recorded.I now hand the conference over to Mr. Aditya Bagul from Axis Capital Limited. Thank you, and over to you, sir. Mr. Bagul? The line for Mr. Bagul is disconnected. Kindly stay on line till I reconnect him. Ladies and gentlemen, I would now like to hand the conference over to Mr. Kashyap from Axis Capital Limited. Thank you and over to you, sir.
Yes. Good afternoon, everyone, and sorry for the confusion. It's a great pleasure to have with us the top management of Supreme Industries for Q3 conference call. From the management side, we are represented by Mr. Taparia, who is the Managing Director; and Mr. Saboo, who is the Company Secretary and also looks at Corporate Affairs and Investor Relations. I now hand over the floor to Tapariaji. Over to you, sir, and a very big congratulations for a good set of numbers.
Thank you very much, Shri Pujaraji. Good afternoon to all the friends. I'm M.P. Taparia, Managing Director of the Supreme Industries Limited. I, along with my colleagues, Shri P.C. Somani, CFO; and Shri R.J. Saboo, Vice President Corporate Affair and Company Secretary, welcome all the participants who are participating in the discussion of unaudited stand-alone and consolidated financial results for the quarter and 9 months ended 31st December 2020. The stand-alone results and the consolidated results are already with you. I'll give brief on company's product operating performance and other highlights. The company sold 100,11,584 tonnes of plastic goods and achieved net product turnover of INR 1,756 crore during the third quarter of the current year against sale of 1,01,393 tonnes of plastic goods and achieved net product turnover of INR 1,356 crore in the corresponding quarter of previous year, achieving volume and product value growth of about 10% and 30%, respectively. The company sold 2,97,871 tonnes of plastic goods and achieved net product turnover of INR 4,128 crore during the 9 months of the current year against sale of at 3,08,321 tonnes and net product turnover of INR 4,028 crore in the corresponding 9 months of previous year, resulting in volume degrowth of about 3% and product value growth of 2%, respectively. Total consolidated income and operating profit for the third quarter of the current year amounted to INR 1,844 crore and INR 455 crore as compared to INR 1,374 crore and INR 222 crore of the corresponding quarter of the previous year, recording increase of about 34% and 105%, respectively. Total consolidated income and operating profit for the 9 months of the current year amounted to INR 4,273 crore and INR 851 crore as compared to INR 4,082 crore and INR 587 crore for the corresponding period of the previous year, recording increase of about 5% and 45%, respectively. The consolidated profit before tax and profit after tax for the third quarter of the current year amounted to INR 401 crore and INR 312 crore as compared to INR 165 crore and INR 123 crore for the corresponding quarter of the previous year, recording increase of 143% and 154%, respectively. The consolidated profit before tax and profit after tax for the 9 months of the current year amounted to INR 684 crore and INR 528 crore as compared to INR 418 crore and INR 350 crore for the corresponding period of the previous year, recording increase of about 54% and 51%, respectively. The previous scenario of all the product segment of the company for the third quarter of the current year ended 31st December 2020 as compared to the corresponding quarter in the previous year has been as under: Plastic Piping System business grew about 9% in volume and 43% in value term; Packaging Product segment business grew by 2% in volume and 3% in value term; Industrial Product segment business grew by 32% in volume and 38% in value term; Consumer Product segment business grew by 11% in volume and 12% in value term. The overall turnover of value-added product increased to INR 758 crore during the current quarter as compared to INR 558 crore in the corresponding period of previous year, achieving a growth of 33%. The company has cash surplus of INR 432 crore as on 31st December 2020 as against net borrowing of INR 217 crore as on 31st March 2020. Business situation has become normal and all the segments were completely operating. Company achieved a volume and value growth of 10% and 30%, respectively, in the third quarter. The increase in volume sale, supported by increase in the business of value-added product, improved the operating margin to 21.53% compared to 16.11% of the previous year in the same quarter. The operating profit margin has improved significantly due to inventory gain on account of rapid price increase of PVC resin to the extent of around INR 80 crore in this quarter. The crop situation in the country is normal, which has boosted the rural income. The Rabi crop sowing is also being done in a larger area than the previous year. Company enjoyed good demand for its product from rural market and from Tier 3 and Tier 4 cities. In the current quarter, the demand also got a fillip from the housing market. Several policy initiatives have facilitated this sale of ready-to-occupy housing units. Demand for company housing product has revived in metro cities. The demand for furniture and material handling products were higher compared to previous year. With a better offtake of consumer durables, the company enjoyed good demand for its industrial component business. The company's Packaging segment working was affected due to increase in its raw material prices which could be passed over with a time lag, which may happen in the current quarter. Company has also introduced economy model of Tarpaulin also in Cross Laminated film segment having lower value addition. However, the overall demand for Cross Laminated film product for the year is expected at a higher level, which may boost business to 21,000 tonnes in the current year compared to 17,000 tonnes in the previous year. Protective Packaging Division in the segment has also fared better as demand has come from construction, consumer appliance, yoga mats and other segments. Plastic raw material prices remain at an elevated level. PVC resin prices have gone up by INR 23 per kilo in the quarter, which is an increase of 25% in its pricing. The PVC prices remain even now at an elevated level. At the increased price, there is demand resistance from agriculture segment. It is expected that resin price may start softening by March. The company's CapEx plan is going smoothly. Along with carryforward investment commitment of INR 182 crore, the company made a plan to invest around INR 400 crore in this year. The same investment is made mostly in its existing plant where additional construction activities are going on at 7 sites. The company is also now putting up new plant at 3 locations. Lands for these plants have already been acquired at Odisha and Tamil Nadu. In Assam, the plant is being constructed on lease agreement basis. Company aims to put all these new plants in production in the year 2021/'22. This is a brief and overall summary for the quarter and 9 months of the year under reference. Thank you for your patience. Now I and my colleagues, Shri P. C. Somani and Shri R.J. Saboo, are available to reply to the various queries read by all of you. Thank you very much.
[Operator Instructions] [Operator Instructions] The first question is from the line of Bhargav Buddhadev from Kotak.
Congratulations for a very strong performance. Sir, my first question is on the strong growth of about 34% that we have seen in the value-added portfolio. So just wanted to sort of get more clarity in terms of what led to this strong growth and how sustainable is this growth? That's my first question.
Sorry, say it again.
I'm saying, sir, what led to this strong growth in the value-added product portfolio? Is it across categories? And how sustainable is this growth?
Across category, principally, [indiscernible] we had a growth in business of Cross Laminated Film product, which is all value-added item. And we have introduced several new products in our Plastic Pipe segment, several new products in our furniture, several new products in our Material Handling System and several new products in our Protective Packaging product. All these combined introduction of new products has given us a boost by INR 190 crores in the quarter.
Okay. And sir my…
Bhargav, I may add here, like even in the Plastic Piping system, the percentage share has gone up to 42%; furniture also, it has gone up to around 52.5%; and cross laminated, as sir has already told, it is 100%. Even the Performance Film division, the value-added percentage has gone up to 60%. So that's why the -- for the quarter, it was 42.3%, as already explained.
Company focus is in all the segments. Our focus remains to introduce value-added products.
Sir, my second question is, is it possible to know what has been the growth on your agri portfolio because essentially, we are hearing weakness, and you also alluded to that. So is it possible to know how much was the growth on our agri pipe portfolio? And essentially, is it just a postponement of demand or how should we look into that?
No, basically, agri pipe -- we know very well that agri pipe are used for housing also in several states. But company [Technical Difficulty] requiring pipes. They are postponing because the prices have gone quite high. But we know very well that from second half March and during month of April and May, even at a reasonably elevated level, they will definitely like to invest money in developing the water source in the fields, and as the fields become empty. By the time, we also believe that the prices will come down to some extent. Net-net, PVC prices have gone up since March by INR 42 a kilo. We believe, and what we are advised, that prices definitely may not come down to that old level, but definitely, it may come down to some level going forward in the next 2 to 3 months. So we believe that in the month of -- second half March onwards, the demand should revive the sector. Presently, demand is very poor.
Okay. Sir, my last question is on our Tank business. Is it possible to quantify how much was the contribution so far in the third quarter and the 9 months in FY '21? And what is the capacity now? And what will be the new capacity in FY '22?
I don't know whether I got numbers, Saboo? But definitely, we are putting the Tank facility in all the 3 new locations. By end of December this year, we will be manufacturing and supplying tanks from 8 locations. Today, we are supplying from 5 locations. And we sell around INR 15 crore, INR 16 crore tank every month presently. And going forward, we believe that this business will go on growing. So ours is very high quality, and we'll be in more locations, so we'll have logistic advantage.
The next question is from the line of Nehal Shah from ICICI Securities.
Congratulations for a very good set of numbers.
Thank you, Nehalji.
Sir, my question is on the Packaging Product segment. Now that's the only segment where we have seen very low single-digit volume and value growth. Can you quantify as to which segment within the Packaging Product segment that has led to this kind of numbers?
Which segment we are talking?
Packaging Product segment, sir?
Packaging segment?
Yes. So we have only 2 and 3 -- 2% volume growth and 3% revenue growth in that segment, while in your opening remarks you have said Silpaulin growth has been good. So whether Protective Packaging or Performance Films have led to lower-than-expected…
No, Silpaulin had a good growth and Protective Packaging business also had a good growth. But we also have one division Performance Packaging Film. As quite a lot of capacity came up at a time, and the prices of LDPE has gone up very steeply at the time, so some business we didn't participate. That's why our business overall in Packaging segment had a lower growth. But now in the current quarter, the price of the LDPE started coming down, and we definitely will be showing better performance in this quarter.
The next question is from the line of Sonali Salgaonkar from Jefferies India.
Congratulations on a great set of numbers.
Thank you very much.
Sir, my first question is, at this point in time, whether, can we share any approximate guidance in terms of volumes or margins, whatever you're comfortable to give for the next year?
I can only share one thing that last year, in the month of January-March, March was -- March month, the business was washout. So in the current year, if the COVID situation remains in control as it is today, then January-March '21 will be better than January-March 2020. But in these uncertain times, precise guidance, we find quite difficult to give. I can only share one number that last year in January-March, the company had a sale of INR 1,403 crore. This year, January-March '21, in the current position, our business is better than INR 1,403 crore.
I understand, sir. Sir, my second question is regarding Packaging, particularly the margins. Now that the company has introduced an economy model of tarpaulin, do you think that structurally, there could be some pressure on the packaging margins as this product scales up?
No, company -- our process of cross-laminated film, we generate quite a lot of scrap. Earlier, we were selling that scrap. Then we felt that when we sell this scrap, we are not adding proper value, and we wanted to offer the consumer, and they require a product which has got only 6 months lifetime and lower thickness product which we can give them at lower cost, just to add value to our customers. So that segment business, in the current year, we anticipate that we might do a business of around 2,000 tonnes. It is not going to be a large business, but it is going to be a business which meets the particular requirement of the consumer.
Understand. Sir, my last question is regarding our present distribution and SKU strength, please.
Saboo, do you have numbers?
Yes, yes, I have the numbers.
Please.
See, the present overall company distribution strength as on 31/3/2020 is -- 31st December 2020 is 4,001. Of that, Piping, we have 1,373; Material Handling, we have 205; Furniture, we have 1,214; Excess Cross-Laminated, we have 504; and Protective Packaging, we have 705. Now this, as compared to 31/3/2020, it was overall 3,567. So 3,567 overall has gone to 4,001.
Understand, sir, and our capacity breakup as well, please?
Yes, capacity breakup also I'll give. See, capacity, in fact, as on 31st December 2020 is, for the Plastic Piping, it is 4,99,111. Basically, it includes piping, fitting and rotomolding. Industrial, it is 74,897; Packaging, it is 90,554; and Consumer, that is Furniture is 29,848. So all in all, it is 6,94,409. Now this capacity will be the installed capacity as on 31st March 2021. Now as compared to 31st March 2020, the aggregate of all this was 6,35,969. So there is an increase of about 58,000, which basically was in Piping System, which is basically piping, fitting and rotomolding.
The next question is from the line of Sneha Talreja from Edelweiss.
Congratulations on very good set of numbers.
Thank you.
I have 2 questions. Firstly, with respect to demand side. So we have seen sharp increase in PVC prices. So what sort of a demand impact are you seeing on your agri business and on your plumbing side of business? Have we already started kind of resistance from distributors or from end-user customer for picking up material?
Demand for all our product piping is good except in agriculture segment. Agri segment demand is quite weak now compared to last year in the same month. And other than Agriculture segment, in housing segment, we are getting demand now from throughout the country. Earlier demand was weak from metro cities. Now the demand is coming from metro cities also.
Sure. So Agri would be down y-o-y. Apart from that, housing and all is up -- like, all the rest of your segments?
Agri as on today is quite dull.
Sure. And sir, what about DWC segment? Have you started seeing any pickup there from the government expenditure side?
DWC, the inquiries are coming. Our business has improved definitely, but we are very selective in participating. Ours is a very high-quality product. When we put BIS, our product qualifies to be BIS. And we believe that as people see a quality product, we will have more loading on our plant. Our present capacity around 12,000 tonnes per year. And we believe that going forward, we'll be able to utilize the full capacity. Currently, we are not utilizing full capacity of DWC.
Okay. That's helpful. Sir, one last question and second question here goes, with respect to your tank business. I know that you don't have the current numbers available, but what sort of margins are we currently making on this business, if not revenues? And do we have any vision to reach a particular number, let's say, in next 3, 5 years, if at all, you can put that number in?
We are creating more capacity of tanks by going to more locations, as I told earlier. Currently, we are supplying from 5 locations. We'll be adding 3 more locations by end of December 2021. And here the location is very important because the logistics play a big role in the pricing and affordability of the tank. We'll be supplying from 8 locations. It's a full range of the product. We anticipate our business will go on growing.
Right. But any vision on the number for like after 3 years or something? And what kind of margins are we making and any improvement that we see there because of additional of locations?
Now our margins are quite okay, and the business for -- our tanks business is growing quite well.
And as already explained, the margins on this tank business is all value-added margins.
It is from all locations.
The next question is from the line of Abhishek Ghosh from DSP.
Sir, just 2 questions. What is the 9-month CapEx? And what is the CapEx outlook for '21 and '21 estimated?
For 2021, we will be, apart from -- including the carry-forward investment of INR 182 crore, we'll be overall term of INR 400 crore in the year 2021.
'21 will be totally INR 400 crores and…
'20, '21 combined. By end of March, we'll be making -- including carry-forward, a commitment of INR 400 crore. And all the plant, for which we make a commitment, all may not be on production because some plants have long delivery periods. But we give our best on our commitment. And this commitment will be by -- around INR 400 crore by end of March 2021.
Okay. And sir, just one more thing. In terms of the industrial part, we see very sharp realization improvement and also healthy margin. So if you can just comment on that, how you are looking in the industrial part of the business?
Industrial part demand as on today is quite strong. We are adding capacity also in our existing plants. And demand -- the consumer durable demand is quite good with our customer. And so they are buying more and more volume of components from our companies. But we are not opening any new site to make industrial components.
The next question is from the line of Mohammad [indiscernible] from Optimum Securities.
Can you comment on the business performance of Supreme Petro? Actually, it has been a very good performance. It improved delta between polystyrene and styrene monomer. And sir, in the result, you have mentioned that Supreme Petro is going to go far a change in its Object Clause. Can you comment on that also, what will be bill your proposed?
Sorry to interrupt, Mr. Mohammed. Sir, I would request you to mute your line while the management answers your question. There's a disturbance in your line.
Yes.
Supreme Petro, we have capacity to produce 24,000 tonnes per year -- month of polystyrene and expandable polystyrene combined at both the locations, that is at Manali in Tamil Nadu and Amdoshi in Maharashtra. After the closure of LG plant, they had some mishap, unfortunately, and so they are not able to now operate the plant. We have been able to sell out our entire plant capacity. Earlier, we were doing good quantity of export. But now just to catch-up domestic demand, we are exporting less than 1,000 tonnes per month in balance quantity. The plants are running full. We are able to produce around 24,000 tonnes a month, and everything is sold out in Indian market, except 1,000 tonnes in export around. We have taken expansion program where we'll put in another trend of polystyrene and also revamping the capacity of our expandable polystyrene at Amdoshi and Manali, and that is all going properly and should be operational by December '21. Hello? Did I answer your question, please?
Yes. And sir, are these -- the delta between styrene monomer and polystyrene sustainable, what is the trend right now? And sir, one more thing I had asked previously was that there is a change in the object clause for the Supreme Petro. I think there is a ballot voting that will happen later in the quarter -- in this current quarter. So what is the change which is expected to come?
Sorry, I didn't follow. What you asked?
Sir, the change in the…
Can you speak loudly? Actually, your voice is not clear, please.
Yes. Sir, the change in the object clause of Supreme Petro. Sir, in the result block, there is one resolution which was passed.
The object clause was prepared 30 years before to come in line with the company act and to make it more comprehensive, which is only enabling provision. Hence, they are going to now start provisioning ABS and other strategies. So we may see a comprehensive change in our object clause.
And sir, the delta between polystyrene and styrene monomer, is it sustainable? What is the trend right now?
So delta between polystyrene was better last 2, 3 months. Several plants have closed down. What can we say? Because we are selling mostly in domestic market only.
The next question is from the line of Manoj Bahety from Carnelian Capital.
Congratulations to you for excellent set of numbers.
Thank you. Yes, please.
Sir, I have couple of questions. First one is, if you can comment on the impact of inventory gains on your EBITDA margins overall, a broad number? And going forward, excluding these inventory gains, how do we see the sustainable margins going forward? That is my first question.
So I will reply your question one-by-one only. In the third quarter, our operating margin gone up to 21.53%. And when I say INR 80 crores was inventory gain, and if you divide this INR 80 crore by the INR 1,765 crore turnover, it will come down by more than 4%. If I exclude inventory gain, the operating margin will be something close to 17% -- 17.2%.
Okay. Okay. Okay. And sir…
The inventory gain was only onetime. Now sometimes, there may be inventory loss also.
Right, right, right. Sir, my second question is like looking at the current demand scenario and as well as your commentary like across all the segments, except Packaging side, all the segments you are seeing very good demand environment. And when I look at our CapEx and right now, whatever capacity which we are having, are we running a risk of going short on capacity looking at the demand scenario? And would be great if you can give some color on long-term CapEx or capacity addition guidance and whether there can be inorganic opportunity also which you may pursue to add capacities?
We remain optimistic. We believe that country is now getting control on this COVID-19 situation. We believe that vaccination drive is going in a very constructive manner. We are quite optimistic that when the Budget will come this time, it will give a big push definitely on infrastructure investment and also on health care spending. So that all augurs well for the business going forward. And we are also seeing that farmers are quite active, and there was good rainfall for last 2, 3 years. This year also, monsoon forecast is going to come after some time. And even Rabi sowing is quite good. And the crop is faring quite well. So the demand from -- for all our products which are going into rural areas and Tier 3, Tier 4 towns, we anticipate demand will be growing properly. And just to cater that expected ET demand, we are taking adequate steps to have the capacity available for the year '21, '22 and beyond. As you have been to already that we are making investment of around INR 400 crores in this year and that investment -- I'd like to share with all of you that investment is focused on Nal Se Jal scheme for which government is spending money every month. We will be making first time olefin molded fitting. We are also now going to make first time PEX pipe system and PERT piping system, high-quality piping system for plumbing totally hot water. We are also introducing several new varieties in bath fitting also. And we are going to produce tanks from 3 new locations. They are all value-added products, and we are investing money in all the segments.
Okay. Is there any upward revision in the CapEx, sir, looking at the demand scenario or…
Sorry, CapEx is planned because to meet the increased demand -- the expected increased demand.
No, sir, going forward for FY '22 and FY '23, looking at the demand scenario, are you planning any additional capacity addition other than INR 400 crores which has been, I think, announced…
Definitely, with all the investment, we'll be still ready -- which is still in place only in 12 states of the country. There are 29 states in the country. So definitely, we'll be putting plant going forward in more states. Our product is fairly intensive. We want to be close to our customers.
The next question is from the line of Bhargav Buddhadev from Kotak.
Sir, so this year, we've seen good expansion in our distribution. And with these 3 new locations, we'll also have a good spread in terms of geographical presence. And lastly, we've also seen good acceptance in terms of our value-added products. So sir, if you look at all these 3 aspects, how confident are we in terms of our volume growth as we enter FY '22 sort of, should we expect a double-digit volume growth on the back of these 3 triggers?
Mr. Bhargav, as you rightly said, we are definitely penetrating into more areas of our country. But still, there are thousands of tehsils where our reach is still quite weak. Our continued efforts are going on to make our presence felt in all districts of the -- all the tehsils of the country. There are tehsils/taluka that are around 5,700, and we are not there in each of tehsil and taluka as on today. So we are going on penetrating into each tehsil [indiscernible]. We are going on increasing our retailers' numbers who are keeping our product in stock. We are also continuously increasing more SKUs. When we close the year, we will share with you how many additional SKUs have been added by the company in the year 2021. It's a continuous process, and we will continue to grow in this direction.
And lastly, sir, on capital allocation, now that our net cash balance has already crossed INR 400 crores, how should we sort of look at in terms of capital allocation going forward?
Capital allocation will be made if the customer requires. We still continue to remain restricted to plastic product only. And whatever will the requirement of each segment, the company will be capable to invest money. Whereas money if they remain in a liquid form, it is the money of the shareholders remaining in the company's books.
Besides, Bhargav, I may add here, one thing more because see, like…
Hello?
Mr. Bhargav, I may add one point more here. Like the plumbers, basically, for the piping system are infrastructure, and they are brand ambassadors. In fact, we have also started the insurance cover for the plumbers. So that is just to draw your attention, actually, on this point.
Yes, Mr. Taparia, you were saying something?
No, I covered it.
The next question is from the line of Abhishek Ghosh from DSP.
Sir, I just wanted to get your sense around how should one look at the ROC on the incremental CapEx that you're doing given that the proportion of value-added would be higher and there are also -- most of them are greenfield projects, some of them are also greenfield? So how should one look at the ROC from the incremental capacity that you're adding?
As we told earlier also, our ROC aim is, it should remain above 25%. Now in the last 1, 2 years, it is hovering around 30%. Our desire is to improve it further over 30%. After all, as you heard in my opening remarks, we are having construction activity in 7 sites, which is a brownfield expansion; greenfield expansion in 3 new sites, which will be happening over a period of 2 years. Whenever we are putting now site, it will be a full product complex and that takes around 2 years to fulfill the requirement of that area to create capacity. We'll be always alert on maintaining our ROC in inverted level. We are not happy with our 28%, 29% ROC. We want to do more than 28%, 29%.
Sure. And sir, just one more observation. Your earlier cash flow generation used to be in that INR 400 crores, INR 500 crores range. Now you have also increased the capacity intensity. And as they come on stream, the cash flow range which you will generate will more tend towards INR 800 crores to INR 1,000 crores over the next 2 years. So such a large sum of cash flow when you will generate, how should one look at in terms of the intensity of capacity? Will it increase or should -- would you also look at export? How should one look at your company more from a 2- to 3-year perspective onwards given the large sum of cash flow?
Structurally, I say that as on medium-term also, we will remain restricted to plastic product only. Investment will be made only plastic product only. Will -- if any, inorganic expansion also, if we find any asset worthwhile, then we will make inorganic expansion, but that also had to be linked to plastic product. Otherwise, virtual money lying in the books that is shareholder money, that Board will decide if the money remains INR 1,000 crores, INR 1,500 crores, Board will take appropriate decision which is beneficial to all of us.
Sure. And sir, the inorganic, if at all you look at it, that has to also meet the threshold of that ROCs that you look at?
Definitely. Without ROC, no money is available.
The next question is from the line of Ritesh Shah from Investec.
Sir, my first question was on new product launches. Any specific update on Biofloc which we had launched in 5 states? What is the progress over there? Secondly, we were expecting new agricultural films to be launched from the Halol plant. So that's the first question, sir.
No, Biofloc is still under observation. We have supplied -- as told earlier, we have supplied 212 pieces of Biofloc, and it takes longer period to observe whether they are beneficial to my users. Always one focus remains, whatever product we sell, it must add value to my customers. So unless it's proven, we don't want to go aggressively in marketing Biofloc tanks. Presently, it is under observation.
Sir, new agriculture films that we -- we had new product launches from the Halol plant, sir, what is the status over there?
What do you mean by the agri product?
Sir, we are planning to launch new films from the Halol plant, the plant where we have…
Ritesh, we are already launching an economy model of Tarpaulin only. That is Tarpaulin, smaller size Tarpaulin 9 x 12, 15 x 12 or even 24 x 18 which is of lower thickness, which may have a shelf life of 6 months. We can put them to use only up to 6 months, but they are low cost. In India, you need to supply product which is low cost also considering the buying power of our community. And it is just functional, so it is meeting the requirement.
And my second question is, we do hear headline numbers on Nal Se Jal. These numbers are very big which come from the Budget. The expectation is, again, this year, the numbers might double up. But sir, how should one look at the impact or the benefit that company like Supreme has on back of this? Is it possible, sir, if you can give some color how the state governments actually come up, specifically the incremental CapEx after what the budget reallocation also comes. So how would it effectively benefits us? If you can highlight some product segments where we have the beneficiary over last year, and if say the number doubles on allocation, how will it help us?
We are -- we have got the largest range of products in housing segment in the country in plastics and that's meant for expensive housing and also affordable houses. We offer all types of products for housing. We are also introducing this year, olefin molded fitting which are also remitted through government scheme to provide Nal Se Jal to millions of houses in the country over the next 3, 4 years' time. And that project also going to be very useful for meeting the requirement of Nal Se Jal very quickly. Government has got a very novel objective to provide Nal Se Jal in each house and will be supplying the fitting which is required for the system. So our focus remains on housing, and we are fully geared up to supply to the requirement of the consumer.
The next question is from the line of Nitin Bhasin from AMBIT Capital.
Sir, first question is about the value-added product portfolio share in the piping segment. Mr. Sabooji said that it's about 42.8%, 43%. So does it happen that when the PVC prices will correct because today, PVC prices are leading to high margins, the value-added product share can also come down?
No, PVC pricing will be affecting mostly in PVC pipe price, and PVC pipe generally, they don't go into value-added item. If prices go up, margin remains very narrow only, we will invest more money only.
Okay. Because I was thinking that because you have a very high margin from inventory gains, inventory gains could have led to an increase in [indiscernible] LAP share. Is that the case or no, sir?
Inventory gain is coming because the share is quite a large volume of PVC resin, but pipe has not given any. Pipe is not coming into inventory gain segment. Only very some special type of pipe that we make, they only come into value-added item. Otherwise, piping is a big business, then our share would have gone very high. It has gone up. If you compare the third quarter last year was 41.87%, and this year about 42.90%.
Okay. Sir, second question is in the Piping segment, do you think you're gaining market share in CPVC and PVC both? And if you could provide a sense who are we gaining market share from?
I can share the number only with you that in the country, 9-month PVC resin consumption has a degrowth of 20.5% and our company had a degrowth of PVC by 3.70%. And CPVC compound, the country in a 9-month had a degrowth of 13.5% and our degrowth was 2.9%. We definitely [indiscernible] that we have got an increased market share in 9 months in PVC and CPVC.
Sense on PVC pipe industry as such.
Because PVC resin 76% are used for piping only -- piping system.
I'm sorry to interrupt, Mr. Bhasin. Sir, there is a disturbance from your line. I would request you to mute your line.
Sure. Sir, the last question is, Silpaulin revenues this year, what could they be? And what is a sustainable growth number? Is it 12%, 13%, more in line with the long-term growth of the company like 13%, 14%? Or do you think now we are at a situation that we can go to 18% to 20% growth?
We believe that we should go on growing 10% to 12% by volume only I'm talking. Value is not in our hand.
And 10% to 12% volume?
10% which should be sustainable.
Okay. And is for the whole company or Silpaulin, sir?
No, I'm taking -- the whole company, as you heard. Silpaulin, we would have better growth. I gave you a number that instead of 17,000 tonnes, we expect to sell 21,000 tonnes because not only in India, now our Silpaulin products are making better and better penetration into world market.
The next question is from the line of Maulik Patel from Equirus Securities.
Sir, just one question, referring to the earlier discussion. Can you just tell us that how CPVC piping has behaved in this particular quarter given that there is a significant price increase was there in the PVC side, but the CPVC prices were pretty much flat. So in terms of volume growth, have they done better than the overall piping growth?
Overall, I can share with you the country had a degrowth of 13.5%.
This is in sir, PVC, right?
Due to poor demand in housing in the first quarter, country had a degrowth of 13.5% of CPVC compound, and our company had a degrowth of 2.9%.
This is for the first 9 months?
I'm talking for 10 months.
Okay, sir. Sir, have we…
We anticipate business to grow. So that's why we have created now more capacity. So several new additional CPVC pipelines have been installed at Kharagpur, at Malanpur and also at Jadcherla, that means Bengal, Madhya Pradesh and Telangana.
Sure, sir. Sir, we have seen -- as you mentioned that the PVC prices have gone to $1,300. So has there been a price increase in the CPVC also?
CPVC not commensurate to that, but there is some price increase.
The next question is from the line of Rajesh Kumar Ravi from HDFC Securities.
On the CapEx front, which you mentioned, around INR 400 crores, this is for the current financial year, right?
Yes, you're right.
Okay. And sir, for next financial year, what sort of CapEx you are working on?
We will discuss in the month of April when we present the annual accounts.
Okay. No, any broad number that will remain between INR 300 crores to INR 400 crores?
We will give you precise number, but we will discuss that in the month of April. For the year '21/'22, we'll talk that time.
Okay. No issues, sir. And on the capacity breakup, can you please give those March '20 numbers?
Saboo, can you help? Saboo?
Yes. See, the March '20, which you are referring to, the plastic piping was 4,40,671. See, this plastic piping includes piping, fitting and rotomolding; and industrial products was 75,000 around; packaging products was around 90,500; and consumer products is around 20 -- around 30,000. All in all, it is about 6,36,000 tonnes.
And this new capacity which you mentioned currently around 6,95,000, this will be by end of this financial year, right?
Yes, by end of this financial year, yes.
And lastly, in terms of the industrial, we saw strong growth. So any particular segment which was strong all, like all the 3 -- 2, 3 segments you witnessed a strong demand growth?
The industrial segment constitutes industrial component and material handing system. And due to the great growth in logistics for the e-commerce, online business, demand coming for pellets. We are a very large producer of plastic pellets. Large warehouses, which are being created by the e-commerce companies, they are a big growth for the company.
And even in the consumer durables and all, you have witnessed similarly strong…
Thereby our industrial component.
Yes. In that segment, how has been the growth and all, sir, because for auto and consumer durables?
We are not into auto much, we are more into appliances and there, we are getting growth.
Okay. And Material Handling is also -- you're seeing good growth coming from there as well?
Yes, yes.
Ladies and gentlemen, this was the last question for today. I would now like to hand the conference over to Mr. Kashyap from Axis Capital Limited for closing comments.
Thank you, everyone, for participating in the call today. Due to time constraints, we couldn't take some of the questions, and you can write into Aditya or Mr. Saboo at Supreme, and we will definitely answer the questions which are left unanswered. Thank you, Tapariaji. Sabooji and Somaniji for being on the call today.
Thank you, Kashyap.
Thank you, Kashyapji. Thank you, very much. Thank you very much.
Thank you. On behalf of Axis Capital Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.