BirlaNu Limited (BIRLANU) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Birla Nu Limited's Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touch-tone phone. I now hand the conference over to Mr. Meek Shah from CDR India. Thank you, and over to you, Mr. Shah.

Thank you, Sagar. Good afternoon, ladies and gentlemen, and welcome to Birla Noon Limited's Q4 and F526 earnings conference call for investors and analysts. Today, we have with us Mr. Sridhar State, Managing Director and CEO of the company, and Mr. Drikabadyar, Chief Financial Officer. We will first have Mr. Akshar Kshed making his opening remarks, and he will be followed by Mr. Rajita Paria, who will take you through to the financial perspectives. Before you begin, I'd like to point out that certain statements made in today's call could be forward-looking in nature, and details in this regard are available in the earnings presentation, which has been shared with you earlier. I'd like to invite Mr. Kshed to present his views on the performance and strategic imperatives that lie ahead.

Thank you, and over to you, sir.

Thank you, and good afternoon, everyone. It's my pleasure to welcome you all on Birla Noor's quarter 4 and FY26 earnings call. Just before we get into numbers, it's also important that we reflect back on the year gone by, which in many ways was a landmark year for us. It offered a significant inflection point in our strategic journey. This was the year we completed our transition from what was known as HIL to Birlanow, and that brought together a full breadth of our offering across pipes, construction chemicals, putty, roof, walls, and floors under one identity. This transformation reflects our collective ambition to be a leading global provider of innovative and sustainable home and building solutions. Another significant highlight for the year was the acquisition of Clean Coats. This was a strategic step designed to strengthen our portfolio in specialty construction chemicals and high-performance coatings, and it brought together Clean Coats' technical expertise, proven formulation, and export capability with our strong brand presence, market reach, and institutional relationships. The acquisition is a step forward in our commitment to double our portfolio over the next few years and also marked continued progress in reshaping our portfolio towards more value-added and differentiated offerings. For our shareholders, this transaction offers significant long-term value creation through deeper participation in a fast-growing high-value segment of specialized construction chemicals. Let me now move towards the performance for Q4, and I'll talk about the larger picture and then get into the individual segments. FY26 financially reflected both resilience and agility of Murlano. The business operated in a challenging environment marked by subdued demand conditions, pricing pressures, heightened competitive intensity, and uncertain geopolitical situation. You would recall, we started the year and quarter one was a difficult one. There were demand-related challenges in the market. There were pricing-related challenges in the market. And we ended the year when the impact of the Middle East war and crisis was looming large. And that in many ways sums up the external environment for the year. Despite these headwinds, we strengthened our market position through deeper market penetration, focused efforts on improving operational efficiency and disciplined cost management. I'm happy to say we enter FY27 with a strong momentum on both growth and profitability, and the evidence of that comes from our performance in Q4 for the India business. So, for the full year, our consolidated revenue was INR 3730 crores with volume growth across most segments. If we zoom in to quarter four, the revenue was 1,010 crores, which represents a growth of 9% over last year and an 18% growth quarter on quarter, so compared to quarter three. On a standalone basis, which is much of the India business now, we clogged revenue of 2,427 crores during the year. The significant milestone or achievement was on EBITDA front, where we have grown by 39% to reach an EBITDA of 146 crores. Much of this was driven by Q4 performance, where the standalone revenue was 625 crores growing at about 8%, and a margin expansion of nearly 400 basis points, 380 basis points to be precise. This performance was despite the ongoing Middle East conflict that created a challenging operating environment across our businesses and segments. With volatility in energy and logistics costs, impacting both input prices and overall market sentiment. Let me now briefly touch upon the segmental performance. One standout segment for us in India this year was the vault segment, which delivered solid performance consistently through the year. During Q4, the segment recorded a revenue growth of over 13%. And for the full year, a 14% growth. This was led by robust volume expansion, especially in the boards and panels segment. Despite continued pressure on realization, the business was able to mitigate impact on margins through disciplined cost management and operational efficiencies. Construction chemical, probably the youngest part of our portfolio, is on a strong growth momentum. This segment, including clean quotes, delivered growth of about 58% year-on-year in quarter four and 45% for the full year. With the addition of Clean Coach, we have further strengthened our product portfolio and enhanced our ability to offer a more comprehensive and value-added range of solutions, such as high-performance corrosion coatings, epoxy and PU flooring, waterproofing, and products for repair and rehabilitation. This positions us and our business for scalable and profitable growth in the years ahead. In roof segment, where we are established market leaders, we have reinforced our leadership position while maintaining a premium on pricing and profitability relative to the market and competition. During Q4, we delivered revenue growth of 8% year-on-year and 18% relative to Quarter 3. This performance represents a strong bounce back from H1 where both demand and pricing conditions were weak. The pipe segment witnessed a challenging operating environment throughout the year with demand conditions impacted by lower government spending and liquidity challenges. The sharp decline in resin prices, which reached multi-year lows, led to significant pricing pressures. This was followed by the month of March, where we witnessed a sharp increase, nearly 60% in a short span of three to four weeks. In this challenging and volatile environment, the performance during Q4 stood out as revenues increased significantly. We grew nearly 30% over Q3. More importantly, the EBITDA margins expanded sharply by about 1,300 basis points year on year due to sustained cost actions. At higher realization and also some impact of some positive impact of inventory revaluation. We are confident that in this segment, there is now a strong momentum with us, and going forward, we will continue to drive on both growth and profitability. Parador navigated a tough year marked by weak demand in key European markets, softer pricing and input cost inflation. Full-year revenues, while being steady to a marginal decline in Euro terms, overall profitability suffered because of an unfavorable product mix, higher material cost, and certain one-off expenses. Looking forward to FY27, we see clear momentum in growth and margins, driven by deeper European retail penetration, rising contributions from new markets like the U.S. And targeted pricing moves and the full benefits of the cost optimization that was done in F526. Beyond numbers, there are a few things to look forward to which will fundamentally improve both the growth trajectory and the profitability of the portfolio we carry. The first one is a program that we ran with BCG focused on some of our key product segments, which was a comprehensive value enhancement exercise. The idea was to identify and implement larger pools of P&L impact opportunities. We are already seeing, and some of it is visible in quarter four results, incremental benefits flowing through with the full savings set to materialize from FI 27 onwards. In addition, we have undertaken several internal initiatives across our business to tightly control cost and streamline processes. bolstering competitive margins and resilience against external uncertainties. On the investment front, execution remains on track across our key strategic projects. The new boards plant we are setting up in Naylor, Andhra Pradesh is advancing well and is on track as far as defined execution milestones are concerned. Similarly, the OPVC facility in Patna is now fully commissioned. Our innovation engine continues to remain a key differentiator for us, enabling us to consistently introduce value-added and differentiated solutions across businesses. During FY26, we launched several new products across categories such as designer boards, premium blocks, to name a few. These received encouraging market response and further strengthened our premium portfolio. Building on this momentum, we have an exciting pipeline of innovative and differentiated offerings planned for FY27, which we believe will further strengthen our market positioning and support long-term profitable growth. As we move into the new financial year, our focus remains firmly on strengthening market leadership, driving operational excellence, and delivering sustainable profitability. While we remain mindful of the evolving macroeconomic and geopolitical environment, we believe the organization today is more resilient, more agile, and future-ready, and it's well-positioned to create long-term sustainable value for all stakeholders. With that, I conclude my opening remarks, and I invite Ajay to take you through the financial and operational details. Ajay, over to you.

Thank you, Aksad, and good afternoon to everyone for joining this call. I am happy to take you through the key financial and operational highlights for quarter four and for the full year FY26. FY26 was a year of transition and strategic progress for Vildanung. The operating environment remained challenging throughout the year with continued volatility across key markets. Soft pricing in the most categories, and demand conditions that stayed uneven for a large part of the year. Despite these headwinds, we delivered steady operational improvement across most of our businesses, supported by disciplined execution, cost optimization initiatives, and improving operating leverage. I believe our performance needs to be viewed in that broader context. Before I begin this segment with discussion, I would like to highlight that. During the quarter, we have received merger order for Krestia with Birlanu, and accordingly, our stand-alone financials are reported on merged financials numbers. Let me begin with the headline numbers. On a stand-alone basis, revenue for quarter 4 grew by 8% year-on-year to Rs. 625 crore, supported by healthy volume growth across most of the segments. EBITDA margins improved by nearly 380 basis points during the quarter, added by stronger operating leverage, the early benefits of our cost optimization initiatives, and dividend received from clean course of Rs. 5 crore. For the full year 26, standalone financial revenue grew by 2% to Rs.2427 crore, while EBITDA increased by 39% to Rs.146 crore, supported by improved operational efficiencies, dividend received from Kincorps Rs.22 crore and profit on sale of assets Rs.7 crore. Importantly, most business delivered healthy volume growth despite rising headwinds during the year. The only exception was pipes were volatility-lit in PVC resin pipes and muted government spending created a relatively difficult operating environment. At the consolidated level, revenue for quarter 4 grew by 9% year-on-year, Rs. 1010 crore for the full year. Consolidated revenue stood at Rs. 3,730 crore, reflecting a growth of 3% over last year. Let me now take you through the segment-wise performance. Starting with ROOPS, the business reported revenue growth of 8% during the quarter 4, with revenue standing at Rs. 275 crore. For the full-year revenue remained broadly stable at Rs. 1139 crore, despite a relatively weaker first half. The business continued to maintain its market leadership position and pricing premium throughout the year. Despite sustained pricing pressure, margins remained largely stable, reflecting the continued benefits of our cost optimization initiatives and operational discipline. Involved, both the quarter and the full-year performance were particularly encouraging. Revenue grew by 14% during the quarter to 161 crore, whereas full-year revenue stood at 610 crore, reflecting a strong growth of 13%. This performance was primarily driven by panels and boards, segment which delivered growth in the range of 20% to 25% during the year. The growth reflects stronger execution, healthy order pipeline, and improved utilization level at Chennai New Line. Overall, the segment continues to demonstrate a strong and consistent growth trajectory, which gives us confidence in its long-term potential. Construction Chemicals was one of the fastest growing business in our portfolio during the year. Revenue grew by 58% during quarter 4 to Rs. 37 crore, while full-year revenue increased by 45% to Rs. 117 crore. I am pleased to highlight that we crossed our first milestone of Rs.100 crore revenue in this segment during the year. The acquisition of clean quotes marks our entry into the quoting segment, further strengthening our product portfolio while also enabling premiumization opportunities and healthier margins. The integration process is progressing well, and the segment enters FY27 from a significantly stronger position than where it started the year. In PIES, revenue for Q4 grew by 4% to Rs. 147 crore. However, at the full-year level, revenue stood at 495 crore, reflecting a decline of 8%, while volumes remained broadly flat. This decline was primarily due to multi-year low PVC resin prices during the year. Importantly, margins improved sharply during quarter four by nearly 1,300 basis points, mainly due to steep price increase in the resin prices in the month of March due to Middle East tensions, while full year margins improved by 280 basis points. We expect prices to stabilize over the coming months and anticipate a stronger recovery in FY27. Supported by increased government spending and infrastructure-led demand, revenue declined by 9% year-on-year in Euro terms during the quarter and 7% for the full year, with the slowdown primarily concentrated in the second half amid intensified competition and geopolitical uncertainties across European market. During the quarter, the business reported an operating loss of Rs.35 crore, which includes a one-time season's provision of Rs.19 crore. That said, several corrective initiatives have already been implemented to improve operational performance, and we expect a gradual recovery through FY27. I would also like to draw your attention on provisions created for diminution in the equity investment in Birlanu International GmbH amounting to Rs 74 crore, which has been reported under exceptional items in the Standard 1 Financial Statements for the quarter. This is strongly reflecting our investment value in line with current performance of Parador. Additionally, during the year, we monetized certain non-core assets, resulting in a gain of Rs.47 crore. Excluding these accounting adjustments, the underlying operational performance reflects improving profitability trends and stronger cost discipline across the portfolio. Turning to the balance sheet, maintaining financial discipline remained a key focus area throughout the year, even as we continued to invest for growth during the year. Our date stood at Rs. 709 crore at the beginning of the year, increased to 929 crore as on December, primarily on account of investment in clean course acquisition, as well as ongoing expansions in OPVC and new bourse land in Andhra Pradesh. I am pleased to note that through focus working capital management and tighter operational controls during the second half, we were able to reduce borrowings, and it stands at Rs. 851 crore at the end of the financial year. The direction of profit on debt reduction is encouraging, and we remain committed to maintaining a prudent and disciplined capital structure in line with our internal plans. The foundation we built through FY26 is significantly stronger than where we started the year. We entered FY27 with improved operational momentum, a more integrated business structure, and greater confidence in our strategic direction. We remain fully committed to translating this progress into stronger financial performance and long-term value creation for all our stakeholders. With that, I conclude my remarks and hand the call back to moderator.

Thank you very much.

We will now begin with the question and answer session.

Anyone who wishes to ask a question may press star and then 1 on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, to register for a question, please press star and watch. Your first question comes from the line of Nitin S. Dharmavat from Auram Capital. Please go ahead.

Yeah, thank you for the opportunity.

Hello.

Kenneth, thank you for that. Your voice is not clear, please.

Yes, just give me a minute. Am I audible now? Yes. Okay.

Okay. So my, you know, only question and few observations is we have, you know, now taken an impairment in the European subsidiary. So in a way, it is good that this is the first recognition of the problem in the subsidiary. We have already given long enough rope of almost eight years to this subsidiary. Has the time not come to take a call on the subsidiary? Last year, we mentioned that this year will turn it around and make it profitable. Now, some other issues have come up, which affected the subsidiary materially, but not our Indian operations, which did really well. So, would it not be prudent to recognize the problem and take the final corrective measure in this part of the business? Our management team has extensive experience. In business and consultancy, and well qualified. So without being biased, what would you have suggested to someone else going through the same situation?

Since we are talking in indirect terms, what we would have recommended to any... Any party as consultants or external advisors, we are following all of those in the case of Parador. And many of them are at play. Some are visible, some are not visible for you. But I think the only element I will say is it's going through a difficult business cycle. We all recognize that there is no lack of acknowledgement on that. In a business cycle like this, whatever actions have to be taken are also at play. So, I want to assure you that there is no loss of objectivity in that regard.

I understand that and I appreciate the fact that we are on top of the things.

But if the things are not working, like, you know, eight years is not a small period. We are given long enough time for this. So maybe sometime we'll have to take a final call to stop loss. We are continuously making losses. I'm sure that we are in hope wherein we'll turn it around. I'm sure that someday will come. But it should not be too late for us is my only, you know, comment on this.

I understand and appreciate the counsel there. The only addition I will make is in the seat that I sit, we act and react more than just on hope. We react on data and lead indicators and what the order books and pipelines are. So, rest assured that every... Part of this is being looked at objectively, and all the advice that we could give as an external advisor in this situation is at play here.

Okay, I have shared this. I wish you the best.

Thank you so much, Nitin.

Thank you. Your next question comes from the line of Vaibhav Parjatyah from Honesty and Integrity Investment. Please go ahead. Hi, can you hear me?

Yeah, Vaibhav, hi. Yes, sir.

Thank you a lot for providing the opportunity. So, I just wanted to understand the prospects on the roofing part of the business, both on the demand side and the cost side. So, on the demand side, if it can help us understand where our product stands, it is always… We have a steel roofing because they're, you know, in galvanized process, there's a usage of LPG, and we hear the reports of some disturbance of steel roofing availability in the market. So, great if you can help us understand the impact of this phenomenon on demand and connected to this is the outlook on demand. And secondly, on the cost side of the roofing business, how rupee depreciation is impacting the cost and how do you see the margins going forward in the roofing business. If you can help us understand these phenomena, that would be helpful.

Yeah.

So from a demand perspective, what we are witnessing, and I can say that on the evidence of the last two to three months, is there is good momentum on the demand front, certainly better than what it was last year, and last couple of years, honestly. What are the factors driving it? We believe there is some underlying resilience in the rural economy, which is helping. So the demand there seems to be helping at a macro level. You are right that at this moment, the price differential between our roofing product and the substitute, which is steel roofing product is. Is on the higher side, given the rally that has happened in steel prices and metal prices in general, and that gives us some pricing headroom and also some substitution opportunity. So that is also playing out. So I think those two factors are helping what looks like a promising demand scenario. On the input cost, etc., and rupee depreciation is a factor there. Yes, it's playing out. It is impacting us because a big part of our raw material cost space is imported. And to that extent, there is exposure. There is not just on rupee depreciation, but also the impact of freight increases that will play out. And also, given it is a mild product, Increase in cost of petroleum products and energy prices also have a bearing on the principal price of the raw material that we get in. So, there is pressure on the input side from fiber perspective and also from cement, which is a big raw material for us. So, there is some inflationary pressure on the input cost as well. We are confident that at least some part of this will be offset from price corrections in the market, hopefully, and it's too early in the season to make a commitment around it. But hopefully, it should mean some better times as far as margins are concerned.

Right.

But are you, I understand, I mean, you've given a good brief about it, but are you hearing from the market that is there a shortage of steel roofing or the steel industry is somehow managing as of now and availability is not an issue on the steel roofing alternative products that competes with our products?

I won't be able to comment on the availability part of that, but I certainly hear and there is enough evidence that on the pricing part, there is certainly a lot of concerns.

Thank you.

Yeah, hello.

Yes, did you hear my response?

Yes, sorry, I missed the last sentence of your conversation, so if you can repeat that, that would be helpful.

I said I won't be able to comment on availability concerns, but we certainly know that there are concerns around pricing of steel roofing and steel products for that segment.

Okay. Got it. Understood. Yeah. That's it for my answer. Thank you. Thank you so much.

Thank you. Your next question comes from the line of Parikshid Gupta from Fair Value Capital. Please go ahead.

Thank you very much for the opportunity. I hope I am audible.

Yes, Parikshid. Please go ahead.

All right, so my first few questions on the pipes and construction chemicals segment. Can you please help me with a breakup of the construction chemicals segment? You mentioned that there is a 58% growth year on year in Q4. Can you tell me how much contribution is there from Clean Coats and what is the growth number X of Clean Coats, please?

Yeah, so, without clean course,

the growth is 25% for full year. With clean course, it is 58%. Clean course number for the four and a half months is 20 crore.

Okay, 58% is for quarter four.

No, no, full year.

58% is for quarter four and 45% is for full year.

Right?

Yes.

Okay.

So, if I had a chance to say that.

Yes, please go ahead.

Please, sir, you continue with the numbers. Let me ask my follow-up questions after that.

It's correct.

Your other question is, what is the clean course number? It is 20 crore for four and a half months from the date it acquired.

And X of this, you're saying the growth for just quarter 4 is 25% just for construction chemicals, right?

Now, we are saying, overall, including clean quotes, for the full year, the growth is about 45%, and for quarter four, the growth is 58%. Okay, this is including clean quotes. If you knock off clean quotes, then at a full year basis, that number is 25%.

Understood. My second question on the pipe segment, can you also help me understand the breakup of the revenue of the pipe segment? How much was it from the CPVC, I mean the high margin segments, and how much of it was with the OPVC and relatively mass segment, please?

So, OPVC is not a mass segment. OPVC is actually more premiumized. Yes, UPVC. So, roughly the split for us in our product portfolio, we run at about 39% to 40% at CPVC levels, and the rest is UPVC, SWR, pressure pipes, and so on and so forth. So you can think of a 40-60 split.

Understood. Now, in terms of the DGTR removing the anti-dumping duty until the end of June, I am sure that the industry lobby is rooting for not extending this removal of anti-dumping duty, but can you tell me some more detail of how the discussions are happening so far?

I would not be in a position to comment on that. I am not aware of any industry lobby talking about this. So this is this best of our knowledge was government's proactive action, given the volatility that was experienced in the market and the impact it was creating in the consuming pocket. As I made a remark in my opening comment, we witnessed a month of March where in three weeks, the prices went up by about 60%, and then in the month of April, they again climbed back by about 25% to 30%. And that kind of volatility is... It's not good news for the industry overall. There might be short-term profits, but it creates a slightly longer-term uncertainty, which is where this step is welcome, and that's as far as I can comment on it.

Okay, but the removal was before this entire situation in the Middle East. That was in early March.

No, the, sorry, you were talking about the import duty, right?

Correct, yes. They were, so there was the import duty.

If I remember correctly, that came in in April, not in March. That was almost three, four weeks after all of this had happened is when it came. So sometime in April, first 10 days of April, if I remember correctly.

Okay, I will recheck my data here then. And can you please also help me understand the current demand environment? You mentioned in your opening remarks that it has been weak through FY26. We have observed that. But how does it look now? If you can shed some light on that, please.

See, you would have seen across most companies, Q4 was better. It is how we experienced it. It was better both on volume and revenue and also on profitability. In fact, more so on profitability. We believe we have done better than most of our peers on the improvement side as far as profitability is concerned. And as we entered the new financial year, given this whole volatile resin price environment, It's a hard one to predict. The fundamentals still remain intact, but sharp increases in prices or sharp decrease in prices drives abnormal behavior by channel and stalking happens and so on or de-stalking happens in an adverse situation. But the fundamental macro demand scenario still remains intact. The amount of construction and hence the consequence of that on the demand for pipes still remains where it was. What we also see as a positive, if I may add, the last two years were extremely soft as far as government spending in infrastructure on water and pipeline and JJM, etc. From Q4, we are witnessing some green shoots of recovery on that front. It is also accompanied by a fresh commitment by the government in the recent budget of the allocation for JJM and so on. Having said that, those allocations were made in the last year and the year before that as well, but only a small amount of that was actually realized. But the fact that the program has been rebooted and we witnessed some positive movement on the ground. It is again a positive tailwind that we will take for the industry.

If I may, a couple of questions on Parador, please. I do understand the severance package impacting the operating income. What were the other challenges in Q4? You mentioned the high input prices in a software demand environment. I do get it. But from an operational perspective, were there other also challenges which resulted to such a lower negative margin?

No, so I think operationally there were no other challenges. Given this whole war situation hit in early part of March, and if you see traditionally March and quarter four is almost a high season for us. There were a lot of orders which have been deferred. While those orders still remain in our order book, they have been deferred and hence there was a negative impact on revenue. So a large part apart from those one-off items, the reason for profitability being low is essentially the drop in revenue and volumes. So no other factor or any major factor to report here.

Understood. And in terms of the India expansion of Parador, from basic research, I could find out certain links which talk about the pricing and the offerings online. But can you also help about how you're positioning this product in terms of both commercial as well as P2C offering of the product?

Yeah, so it's still positioned at the premium end of the segment. It's a made in Germany product. And that's the proposition that we are building. The brand is centered around quality aesthetics. And that's the same promise that we are making to consumers here in India. Over the last two, three years, sorry, over the last 12 months, there is now a sales team which is dedicated for this, and a lot of groundwork has happened in that. So, we are now... So, building a pipeline of orders, both on the commercial side and also equally building a retail footprint. Having said that, we recognize that much of the demand will be anchored around the larger cities and metros, and that's where the market focuses. So, we are not trying to be everywhere. The one challenge that we face, which also is in some sense, The landed cost of those products in India is something that remains a concern. So pricing will be a critical factor, and India, you are aware, is a very price-sensitive market. So that's one challenge that we manage on a day-to-day level, but the rest of the fundamentals and positioning is as I described.

I understand. In terms of comparison, maybe, with existing players, for example, Wellspun Living, I looked at their catalog, their offerings are of the similar specifications. I cannot comment on the relative quality of the two products, but the pricing is at somewhat discount to Parador. In such an environment, when you have to gain market share for existing players, while I understand the aspect of the freight cost also being inbuilt in your product, How do you think you will be able to, you know, sustain growth or gain growth or sustain market share when the product is already priced at a premium? Can you tell me a little bit about that, please?

See, I won't comment on a specific competitor or market player. Not right on my part to do that, but I will just take an analogy. In the automotive world, you will have... So Maruti and also Mercedes playing in the market, they will have different positioning, they will have different price points and different offerings in the market. And the market thankfully is large enough to absorb different rights of proposition and for each of these companies to make a successful venture out of it.

Thank you very much for answering my questions. I will get back in the queue for any follow-ups, and good luck for the current quarter.

Thank you, Barishas.

Thank you. The next question comes from the line of Anubhav Guild from Cosma Ventures. Please go ahead.

Yeah, hi, sir. Thank you for this opportunity. Sir, I have a bunch of questions. Hi, Anubhav. Sir, for Parador, from what I understand is, in India, the engagement with architects and contractors is a very long-dated, tough process. And then we have imports coming from China and Vietnam. So the turnaround for the next few years would largely come from a turnaround from our European sales, correct?

That is correct. See, compared to the scale of our... European business and the international business, India is just about starting up. So the fortunes of Parador are not anchored only on the India business.

So, sir, the European outlook, you would say, is continuing to stay where it was, or we can see any signs of improvement yet?

You should look at some improvement and judges on that, and not because the market is bouncing back, but there are certain moves that we are making. One of them is to reboot our whole retail. So, you are aware that we are very strong on the DIY side. We have some retail presence, and commercial is something that we were starting up. Now, especially in our core Central European market, in the last 6 to 12 months, there has been a reboot of both the teams. And also differentiated product offerings for these channels, which give us confidence that this year there will be an uptick in these markets coming in from there. And I'm not talking just, I'm talking on basis of what the leads look like, what the initial traction has been, and so on. So that is one significant area where you should see uptick. Second, on the engineered wood side in Europe. We are going further on the premium end of the segment. What has happened in that market is that the mid-end of the market has been affected by cheaper imports from places like China and so on, and hence it was important for us to expand our range on the premium end. And that work has happened. We launched that whole collection back in February, and we are now rolling with that. So that's the second area which is expected to give us an uptick in the core Central European uptick theater. Independent of any market bounce back. So all of this is assuming that the external environment remains where it is.

Helpful, sir. Got it.

So can I get a breakup for the wall sales with 610 crores split into AAC blocks, panels, and boards for this year and last year?

Well, roughly AGB 60, 30, 90 percent, 60, 30, 60, 25, and 15 percent.

60 would be blocks and 25 percent would be panels. Yes. Okay. And so for boards and panels, what is our current capacity utilization and where can sales go towards in the next two, three years?

Actually, in both those segments, we, in fact, even in blocks, we are chock-to-block as far as capacity utilization is concerned. And hence, the increase in sales or production will come from two things. There are some brownfield expansions we are doing, which will come on stream within this financial year, hopefully by the start or sometime in Q3. So that will give us an immediate fillip on what we are able to sell. The second thing is the new project that we are, Greenfield project on boards that we are putting up in Nellore will give us additional capacity. And that is also designed to make products which are value added. So we are looking at HD boards, designer boards, and so on. So, in this financial year, those are two big areas which will add capacity for both production and sales.

So between the three panels and both would be much more profitable than A to C blocks, right?

See, there are a lot of synergies across three. So, we look at it as a combined unit because a lot of boards, for instance, are fed into the panel side and so on. So, it's hard to sort of split it across the three.

So now just coming to Polymyr, if you can just elaborate on your strategy for pipes and settings, like you mentioned the Jal-G1 allocations. And the distribution is different from our core asbestos and both business. So I'm guessing we are doing this via distributors. And unlike roofing, we don't have leading industrial capacities. And our range probably is lower than the leaders. So can this turn around and scale up over the next few years?

Yeah, so a few clarifications first. When it comes to range, we are comparable to anyone in the industry, including the largest player in the country, and that is not something that was there over, say, three years ago, but in the last three, four years, there has been concerted effort to ensure that we are complete on our range. We carry over 3,000 SKUs. And from CPVC, UPVC, OPVC to HDPE, the entire range is available with us, point number one. Point number two, we have a manufacturing footprint across all the four regions of the country, so north, south, east, west. Third. We have significant capacity in our production plan. So for us to scale up from where we are to, let's say, another 30-40% more than this, we have that kind of capacity already. And so it does not require fresh investments. So those are three sort of baseline items. Given what the market conditions, and I'm now commenting on the strategy, what the market conditions were in the year that has finished, FY26, we were, as a team, sharply focused on making sure that all the operational efficiencies are maxed out, and a lot of work was done on that, which is now visible in our 4-4 numbers. Even if I discount some of these material and material cost related items, which were one-off because of the price spike that happened, there is still a lot of gain to be shown on the profitability side. We feel that's now in a stable area. And as the markets are sort of looking positive, demand scenario is looking slightly better. We are focused on accelerating sales. A lot of effort and initiatives have gone in defining which markets we want to win. A proper sales acceleration program has been underway for the last six months. And really now the focus is just make sure that we are winning in the markets that we have identified as our priority ones.

Okay, sir.

So, my last question. If you ask me the strategy, strategy is essentially around sales acceleration.

Right, right. So, my last question for AAC blocks, could you mention which are the largest 2-3 capacities in the industry?

You know that, I mean, again, I can talk about my capacities. It's not right for me to talk about others.

Okay, sir.

Thank you, sir. Okay, thank you.

Thank you. Your next question comes from the line of Moksh Ranka from RM Capital. Please go ahead.

Hello, sir. There has been a structural increase in our employee cost percentage post our acquisition of Paradox. So, as part of our BCG cost-cutting program,

do we, like, intend to do more rationalization of our employee strength and, like, bring it back around 10% of revenues like it was earlier?

Most of the manpower cost has not increased substantially in Parador. It is, as you mentioned, 1.8 million euro provisions created for insurance. At the same time, last year, Forex was 1991, whereas this year, the conversion rate is 106, 107. So, there is an impact on account of Forex conversion rate. It is largely more or less same as last year in Parador.

No, I'm talking about like before that acquisition of Parador, like as a percentage of sales, it used to be around 10%, and now I think it's around 15% and more than 50%.

Like, are we like planning to...

See, it's also...

It's a function of also the denominator you were applying between, say, eight years ago and now, so that's also at play. Having said that, in terms of both headcount and the cost of headcount, it's something that we look at constantly, and wherever there is streamlining that needs to be done, we are always on the job.

Okay, and are we trying to restrict it to some percentage of things like in terms of that?

And also, like, one more question would be how much is, like, the maximum that we are comfortable with? Because leverage has increased a lot in the last few years.

Thank you.

So, if you say our equity is close to 1100 crore at console level, whereas date structure is 850 crore. So, we are comfortable to another 200 to 50 crore at this point of time.

Okay. Okay. Okay. Got it. I'll take it for myself.

Thank you. The next question comes from the line of Sanjay Kumar from iThought PMS. Please go ahead.

Hi. First question on margins. In Q2 call, I think we are committed to about 150 to 200 basis points. Uh, EBITDA improvement from the BCG project. In Q4, on a standalone basis, we did about, uh, 4 percent EBITDA margins. This is excluding other incomes, roughly 27 crores EBITDA. So, I guess the BCG driven savings has already played out, uh, as you had, uh, guided for in Q2. So, how do we get to, uh, 10, 12 percent EBITDA band EBITDA range? Which segments and what levers will take us there now that BCG has played out? Can you give us segment wise EBITDA margin profile, you know where we are in Q4 and how do we get to where do we get to in a say 2-3 year period?

On a lighter note, we can keep doing BCG type

projects and keep adding that, but it's a joke. See, the trick for us to get to double digits, which is where our first aspiration is to get the portfolio right in terms of the mix. Without me mentioning it, you have a sense, bases on numbers and declarations, that there are certain segments which are... Nearer the double-digit mark and certain segments which are not. So, one, the indexation on that. And so, for instance, our focus on construction chemical is coming from that whole belief that that's a segment that can be in double-digit inhibitor. So, it should have a reasonable share in the overall portfolio. Second, our investments that are happening on the wall side is also coming from there because that's a segment even today in our portfolio probably amongst the higher profitable one. So getting that mix right is important and over-indexing on elements which are better profitability is a key one.

Okay.

And Parador, I think in FY25 also we had done a severance package or a one-time package. Now we have provided another 1.8 million in Q4. So is this the end of research sharing there? Should we expect more severance in FY27? And this is one and the impairment at the Parador level itself. Does it mean there are concerns as a A growing concern for Parador, what led you to the impairment?

Due to the impairment.

See, if you see there is a, there is a losses in Parador in last couple of years. The value at console level is adjusted on account of Parador losses in last years to the extent of around 20 million euro. Whereas, in India, the investment was at the same level at original cost level. So, based on the current valuation, based on the ECF model and the CCF model, we have arrived at the valuation. And then, we have worked out the equity value and then adjusted the equity value investment to the current equity value as per the valuation model. So, that is one of the reasons the impact has come only in standalone books, not in the console books.

Okay, what is the residual equity value today?

What is the equity value?

Dual equity value.

So, so it's around 200 crore as in 31st March. Our original investment was 273.5 crore.

Okay, okay. On this severance, we will continue. We have been doing restructuring every year. What to expect in FI27 in parallel profitability?

I think what we should expect is a bounce back on sales, which then has a positive flow through on profitability. That's the expectation to carry for this year.

Okay, final question,

what was the volume growth in pipes and walls segment in Q4?

Uh...

Volume growth is in the zone of about 2% to 3%. And the second one was?

Walls.

Walls. Overall, volume growth in Q4 will be a blended of about 20% plus.

Okay. Okay. Thank you.

That's it from the side.

Thank you. Thank you so much.

Thank you. The next question comes from the line of Anup Namdiath with Equity Intelligence India FireRed Limited. Please go ahead. Hi.

Thanks for giving me the opportunity. So, my question is to Akshet, sir. Akshet, sir, you, this is in line with the two comments that you alluded to previous participants asking questions. So, you joined the CEO probably in 2023. And at that time, the employee cost was around, I think, around 400 crores, 400, 411 crores. I don't remember the exact number, but somewhere around that range. And for the current financial year, I think we are closing at around nearly 600 crores. So over the last three years or four years, we have seen a 200 crore increase in the employee cost. But despite that, we have not been able to drive sales. So I would like to know your thoughts into this because despite paying top salaries and having top talent, what is that is not letting us drive the sales?

Hello.

First, I think the numbers you are quoting, in general, directionally, I can understand where you are coming from. So the specifics of the number, I would urge you to check because they don't seem to tally with what our numbers are. There is an India part of the salary.

Let me complete, please.

Yeah, there is an India part, manpower cost, and then there is a parador part. There is also currency factor that comes in and so on and so forth. So we can speak separately, but there is some bit of parsing that is required there. That said, the revenue growth trajectory has not been where it should be. In the last at least couple of years, the focus has been to put new growth engines which can drive revenue in a more meaningful fashion, which is where the inorganic activities have happened, which is where a lot of organic push on building new markets, new product segments has been there. Some of these things have a little bit of a timing angle to it in terms of. From germination or sowing the seeds to when the harvest can be done. So maybe we are slightly earlier in this cycle. I think what has happened over the last couple of quarters gives us confidence that finally the growth cycle is moving. And you will see numbers which are more to your liking than what it has been in the past. That's number one. Number two, it's also been an environment where for our industry, both in India and outside India, the conditions have been less than benign. So there have been a fair amount of headwinds that have also been at play. And the third factor I will play is if you scratch below the surface, in every product segment, there has been volume growth over the last couple of years. But given the competitive situation and the pricing environment, it has not translated fully on the revenue side, which again is a correction that has to be done and so on. So there are some positives, but the big picture, I am not disagreeing with what you are saying.

Sir, from an optimistic point of view, if I say that we have a capable team to drive the sales further higher in the coming years, would you agree to that, or would that be the right statement to make?

Do you have the confidence? Absolutely, unequivocally, that's what is keeping us going.

The teams have been both restructured, new talent has been brought in. In many cases, new teams have been brought in. In many cases, there is the old set of people who are still leading from the front. So, there is a huge amount of confidence on the team. I will again give examples. I think we can keep talking about What the numbers are, and somewhere, let's say, five segments where we have been our own critics in the past, this is also the team which has delivered stellar numbers in Q4. So with some amount of market tailwind, this team has also shown evidence that it can hit the ball out of the park. So, we have the right ingredients and these things also have a little bit of... Timing factor that comes into play. So, we can't also get ahead of the curve on that.

Sir, one final question, if I may add. Yeah.

This is on the capital allocation, sir. We have stated our intent to grow in organically in our previous calls and I think even to the AGMs. And we have a stated objective of a billion dollar revenue target as well. So with the current capital structure, that would point to some sort of a fund raise or a fund infusion, equity fund infusion raise. And do you see the promoters willing to put in extra money and especially at the current decreased valuation, does it make sense for them to consider that? I know you are from the management side, it is a board decision, but then what are the feelings that you are getting?

So you already answered the question for me. I can't answer on behalf of the promoters of the board. I think from a professional management perspective, we are on the right way. There is a lot of momentum. And these are topics which also get solved as we go along. It is not that the switch from where we are to a billion dollars will happen overnight. If we are on that trajectory, there will also be a much better increase of cash approvals from the operations as well and so on. So let that play out. On that front, at least in my position, I carry no concerns and worry.

Fair enough, sir, and wish you all the best.

Thank you.

Thank you so much. Thank you.

Thank you. Maybe a quick time check should be here on top of the RSO.

Sure, sir. Ladies and gentlemen, we will take that as a last question for today. I now hand the conference over to the management for closing comments.

Thank you. It's been a pleasure interacting with all of you over this call. We thank you for taking the time out and engaging with us today. We value your continued interest and support. And if you have any further questions or would like to know anything more about your company, kindly reach out to our investor relations desk. I recognize there might be some questions that we have not been able to take, so please reach out to us. We'll be happy to engage after the call.

Thank you very much.

Thank you.

On behalf of Birla No Ltd, that concludes this conference. Thank you everyone for joining us and you may now disconnect your lines.