Cello World Limited (CELLO) Q3 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Seller World Q3 F526 call, hosted by ICICI Securities Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant clients 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, then zero on your touch-tone phone. Please note that this conference is being recorded. I now have the conference over to Mr. Manan from ICICI Securities Limited. Thank you, and over to you, sir.

Thank you. Good morning, ladies and gentlemen. On behalf of ICICI Securities, we welcome you all to Q3 and 9-month FY26 Results Conference Call of Cello World Limited. Today, we have with us Senior Management, represented by Mr. Gaurav Rathod, Joint Managing Director, and Mr. Atul Parulia, CFO. Now, I hand over the call to the management for their initial comments on the quarterly performance. Then, we will open the floor for Q&A session. Thank you, and over to you, Gaurav, sir.

Thank you, Manu. Good morning, everyone, and a very warm welcome to our company's earnings call. Joining me is our CFO, Mr. Tulparolia, and our Investor Relations Advisor, HGA. The results and presentations are available on the Stock Exchange and on our website. I hope you had a chance to review them. During Q3, financial year 26, the demand environment remained mixed. While we saw a healthy momentum in October, demand softened meaningfully in December, making it a relatively weaker December in recent years. Against this backdrop, we reported revenues of Rs. 553.7 crores with an EBITDA margin of 22.1%. Additionally, during the quarter, we incurred a one-time exceptional impact of Rs. 7.4 crore on account of gratuity provisioning, pursuant to the implementation of the new labor codes. This was a non-recurring adjustment and has impacted profitably for the cotter. In Q3, financial year 26, our consumer wear segment recorded a marginal decline in sales, primarily due to availability constraints in our insulated steel portfolio. During the quarter, we faced stockouts in insulated steel products, which led to an approximate 40% quarter-on-quarter decline in steel revenues. This decline was supply-driven and significantly impacted overall consumer revenues. Had the steelware products delivered the same growth as last year, last quarter, we would have seen a significant growth in revenues for the consumer wear segment in this quarter. Due to lower production volumes and suboptimal absorption of fixed cost in steel, we witnessed a higher sales to revenue cost ratio during the quarter, temporarily impacting margins. Importantly, had revenues remained at the last year's level, the growth would have been approximately 12% year in quarter 3 of financial year 26. We have commissioned a state-of-the-art fully integrated insulated steel bottle manufacturing plant in Rajasthan. Two production lines are currently operational with the remaining lines to be commissioned in phases through H1 of financial year 27. We expect the steel business to progressively ramp up and return to normal revenue levels over the next couple of quarters. I would invite a lot of investors to see this plant because it's very well done and I think you can gain a lot of confidence from the fact that we will be one of the best producers of steel in India. On the glassware side, our glassware business is currently operating at approximately 60% utilization. It continues at this utilization level because sales is catching up. We are seeing a ramp up in revenues in this segment. But as we had built some stocks, we are currently utilizing those stocks for revenue generation. We expect the utilization levels of glassware to be at this level for at least the next couple of quarters. While the category continues to face some pressure due to increased dumping from China, the business has reached breakeven and is contributing meaningfully to revenue. Profitability from glass will take some time to scale as operating leverage kicks in. On the writing instrument segment, the segment reported a topline of 86 crores. Delivering a 11% year-on-year growth. Contribution from the cello brand will start from this quarter and should meaningfully help in increasing revenue. In financial year 27, we expect combined revenues north of 500 crores with the Unomax and cello brand combined. And the scalability of both brands put together in the next few years is immense and we are looking at a top line of about 1000 crores over the next few years. The moulded furniture category witnessed a 10.6% decline compared to Q3 of financial year 25. This was primarily because of two reasons. One is because of weak polymer prices which impact this category directly. And some orders that we had, some government orders that we had last quarter, which were not reflected in this quarter. On our strategic priorities, you know, our priorities remain portfolio rationalization. So we are continuously evaluating our product portfolio using the 80-20 principle and continue to, you know, basically Make sure that we kind of are working towards always kind of rationalizing this product portfolio. Also, premiumization is, you know, another aspect that we are continuously working on.

We have kind of increased the mix to about 7 to 8 percent.

Over time, this, we want to take it to about 20 percent. The channel mix is also evolving digitally. Our revenues now are about 15.7% of the total revenues, which is meaningfully gaining a lot of traction. On the profitability side, the softness in profitability, as mentioned earlier, was driven by lower steel volumes and a one-time gratuity impact. This blip is very temporary. As steel volumes normalize, we expect margins to revert to our normalized 22% EBIT over the next two quarters. On the working capital side, we will tread cautiously over the next two quarters with sharper emphasis on working capital, optimization and inventory discipline. This may temporarily moderate revenues but will strengthen our long-term stability and return ratios. We remain confident of delivering about 8-10% overall growth supported by the steelware ramp-up and glassware scaling in the next couple of quarters. The steam completely kicks in and the glassware completely scales up. We should also kick in by then, and we should start returning back to our normalized EBIT levels. With that, I would like to hand over to our CFO, Mr. Atul Parolia, for the financial highlights.

Thank you, Arak, and good morning to everyone. I will be sharing the financial details for the quarter gone by. In quarter 3, financial aid 26, the company reported revenue of 553.7 crore. EBITDA for the quarter stood at 122.3 crore, translating into a EBITDA margin of 22.1%. During the period, the company incurred a one-time impact of 7.4 crore due to the implementation of the new Labour Code. Perfit after tax for the quarter was 63.6 crore with a PAD margin of 11.5%. Coming to the revenue mix. Consumervia contributed 69.5% of the total revenue, followed by the writing instrument at 15.5%, while the modern furniture and allied product accounted for the remaining 15%. In terms of channel mix, generated and export contributed to 75.2% and 9.1% of the sales, respectively. Online sales contributed 10.6%, while modern tech accounted for 5.1% of the total sales. From a segment-wise margin perspective, riding cement led with a gross profit margin of 56.7%, followed by the consumer wear at 50.2% and modern furniture at 39.6%. Now, coming to the 9-month financial year 2026 performance, revenue for the period was Rs. 1670.1 crore with a year-on-year growth of 8%. Gross margin level remained healthy at 51%. EBITDA came at Rs. 389.8 crore, with an EBITDA margin of 23.3%. The company reported a profit after tax of Rs. 222.3 crore, resulting in a pet margin of 13.3%. With this, I would like to open the session for the question and answer.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question, may press star and 1 on their touchtone telephone. 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. Participants, if you wish to ask a question, please press star and 1. The first question is from the line of Vaidik Bafna from Munaf Networks Capital Limited. Please go ahead.

Congratulations, Gawaf. So, sir, I have two questions. Firstly, on the consumer wear side, can you quantify the growth delivered in the opal wear and the glass wear segment on a quarterly basis and for nine months as well? What kind of growth in terms of percentage has the company delivered?

So, hi. Basically, we do not report our revenue separately. You know, we can get on a call after to, you know, understand this better. But as I mentioned that, you know, in the consumer wear segment, we saw growth across all our segments, except for the steel wear, which, you know, led to the decline of revenues. Otherwise, it would have been a decent growth. Given the fact that, you know, we had a very good growth last quarter. So, a lot of the Diwali sales had come in the September quarter. So, it would have been a very good quarter had still class not given us a stop-out situation.

Go ahead, sir. Thank you, sir. That's it for me.

Thank you. The next question is from the line of Praveen Sahai from PL Capital. Please go ahead.

Yeah, thank you for the opportunity. Sir, my first question is related to your guidance of last quarter, double digit of our revenue growth with a margin of 22 to 23%. So, where we are about that? Because if I look at Q4 with these guidance, it looks very high growth in the top line as well as in the EBITDA margin as well. So, if you can.

No, so basically, as I mentioned that if steelware would have contributed meaningfully in this quarter, this quarter would have been in a double-digit kind of a growth overall because our writing instrument segment also saw good growth. And, of course, molded furniture, because of the polymer prices, has a direct impact, because as the polymer prices go weaker, because 62% of the cost of molded furniture is actually polymer. So, that is why there we had a slight decline. So, overall, you know, as I said, in the next few quarters, the glassware plant also, of course, has given us revenue but no profit. So that, of course, affects margins temporarily. So as I mentioned that, you know, over the next couple of quarter months, we regain our entire revenue from speed. And also, of course, as GlassWeb starts contributing to margins, this margin will return to its normalized level at about 22%.

Is there any, you know, guidance number would you like to give?

In both quarters, you know, as I mentioned that over the next two quarters, profitability will be a little subdued because it will keep getting better as the steelware plant ramps up. But in H1, after H1, I think things should improve drastically and we should return to our normal ratios.

Okay. Second questions are related to the cello brand. For writing and sessionary, last time you indicated by 28 or so, 350 odd crore of revenue you can generate. So, like how much of the revenue you are expecting for 27 because you guided for some around 500, north of 500 crore you are expecting from this segment.

With put together, you know, we will be clocking in good numbers. So, upwards of not, not of 500 crores is a given for next year. In the stationary segment, both brands put together. It could be, it could be, of course, a lot more. You know, we have been evaluating, of course, we have just bought, you know, just bought the brand about two months back. And that is why you will start seeing revenues from this quarter. Having said that, you are right that the revenues were about 300, upward of 300 crores per cello. But there were a lot of loss making products in that particular, you know, portfolio. So we will, we have rationalized or we will be continuing to rationalize some of those products, which might reduce the overall revenue. But, of course, even after that, the revenues will be, you know, amazing in terms of the writing instruments, and we should be upwards of, way upwards of 500 crores.

Second question, third question, sir, related to the GT, because this quarter we had seen the general trade has been down. Is it only because of a steel product?

So, yes, GT has been down majorly due to steel products. That is the main reason. And also, if you see the Diwali impact also was there, because last quarter it was a very good growth in the consumer wear segment, in GT also. And GP seems to have softened a little bit in this quarter. So, both impacts, steel of course is a big impact, and also marginally due to the, you know, Diwali being pre-poned.

Okay, and also, I just could clarify, this steel has also impacted our in-house manufacturing, because that number has significantly down to 63% compared to 77-75% we used to give in this quarter. So, the in-house manufacturing contribution has gone down for this quarter to nearly 63% odd. So, is that because of steel availability is low and that's impacted our revenue?

No, it has not gone down. I don't know where you're getting that number from because it's about 72% in-house manufacturing and it will only go up as we start producing more of the steel pair.

No, so actually I calculated from your 9-month number is 73% and first half is 78%. So if I calculate for the Q3, that is a lower number. So that's why I'd ask.

No, actually that doesn't match with my number, but of course we'll discuss this later. We can get on a call and discuss it.

Thank you, sir, and all the best.

Thank you.

Thank you. Before we take the next question, I remind you to all the participants that you may press star and 1 to ask a question. The next question is from the line of Bhavy and Rupani from Inverse Tech. Please go ahead.

Hi, sir. Thanks for the opportunity. So, first on Opalware, can you spell out what is the utilization levels for our Opalware plan right now?

Almost, we are at about 85% of utilization at this point of time.

And any incremental expansion plans over here, even that we are running at almost peak utilization?

No, currently, at this point of time, we need to first exhaust capacity to 100%. Also, there is new competition in the market, so we are trading cautiously on that side. But yes, Yes, of course, you know, as we near complete exhaustion of capacity. You know, we will start thinking about it in the next few months.

And, sir, do we have any brownfield optionality at our existing plant in case we look to expand the facility?

No, brownfield, no, we are at, in glass and opalates, it's a little difficult to expand, you know, in terms of brownfield. So it will have to be a complete greenfield project when it comes to opalates.

All right, and one more question on Opalware, sir. So, what is our realigning timelines over here and KPX for realigning for a couple of years from now?

For Opalware?

Yes, sir.

Any more capex at this point of time because as I mentioned that because of there is new capacities that have been added in the market, so we'll have to wait and watch a little bit. But if we do, you know, there is going to be a capex of about 110 crores is what we'll look at if we are going to be ever doing it this year.

Sir, I was asking about the realigning KPEX. So what I'm assuming is post 2 or 3 years, we need realigning of our lines or furnaces, right?

No, no, no. So that is just maintenance KPEX you're talking about. It's not realigning. It is just maintenance KPEX is always considered. And basically that is not much. That is about 10-15 crores a year, which is also maintenance for most of our lines.

All right. And one more question on Opal Vesa. So, basis of channel checks, what we understand is imports in this category has increased over the past few years, and despite regulatory covers being present, right? So, how is industry working on it, and any measures industry has taken to curb these imports?

I think, see, there is an active anti-dumping duty that still exists on Opalware, and overall the rise in imports is not very significant. It is very, very limited, and it is an inferior product that is being imported. So I don't think we have had any real, you know, reasons to worry there, as an industry as well.

Got it. One more question on OpelWare. I just wanted your thought on this, given competitive intensities increasing in this space, what would be our preference, volume or margins?

About 85% capacity utilization, I think we should be, ideally, anyone should be focusing on profitability at this point of time until, you know, the new capacity gets, you know, completely penetrated in the market. So I think that is our priority now. Cost reduction and optimization will be our priority going forward so that our margins are maintained because revenue potential growth is only going to be the 15% capacity that we have left.

Sir, a couple of questions on glassware. So, first, on glassware, you mentioned that utilizations will remain at 60% over next two quarters. So, just trying to understand, is it demand or software or any technical issues at our plant?

So, it's not anything technical. The idea is that, you know, the revenues are ramping up. But of course, it takes a little time for revenues to keep going up. Of course, month on month, we are seeing a growth in revenue of glassware. But since it will take a little time, of course, the potential can be, you know, a lot more, as I said, from this plant. But until that happens, you know, we will have to keep the utilization levels at about 60% and also there is stock that is built up which we will also be, you know, which we will also be selling in the next couple of quarters. Post that, we will, you know, increase the utilization. So there is no technical challenge. It is the product side, you know, is completely set.

Perfect. Got it, sir. I have a few more questions. I'll join back the queue. Thank you.

Thank you. The next question is from the line of Naidik from NB-Alpha Fund. Please go ahead.

Hi, sir. Thanks for taking my question. So, my first question is, you mentioned that there were some supply challenges in steel there. So, this was primarily because of the BIS standards coming in and our facility yet to come online. Is that the sole reason for the same?

Yes, so BIS has... In January, we had built a lot of stocks. So we had about 6-8 months of stocks. And of course, we had also procured some products locally through some OEMs. But the kind of product line that we had before when we were importing was pretty large. And we of course are unable to have all of those products today. But, yes, as we are going to ramp up our production, these are all products that are going to come back, you know, and that was basically the reason, the main reason, the BIS is, of course, the main reason that we had this situation.

Right. And, sir, if this was not the case, you know, we didn't talk about issues and the scene where revenue... In fact, what was the growth we would have seen?

If revenues of steel would have stayed the same.

What about the capacity that now we have put in a silver? What is the capacity that we are bringing in?

So we are bringing in about... You know, we have two lines operational. This has revenue potential of up to, you know, upwards of about 300 odd crores for the moment. And we can just keep adding lines. We have the facilities. So it will just be a brownfield expansion for that.

There's one clarification that he did on the deal structure of, you know, the cello pens brand that we have bought, and in fact, you know, we would be booking, say, 200 to 300 euros of revenue in 3x26 from the cello brands itself. We'll be getting the profitability also of the same, you know, but we won't be paying anything. So, I'm just not able to wrap my head around the deal structure, so if you could just, you know, throw some light on the same.

So basically, the brand was bought by CPIW, which is... So, CPIW paid for the brand. So we were only involved in the brand deal. A separate company altogether. So that is why there is no impact. Because we already had our current facilities, had enough capacities. As we go along, is the... We have more machines, you know, in the next couple of years. There would be a capex of about 50 to 60 crores in this category. In the next... And that's why you're not seeing any...

Sir, but what's in for the asset owners for this? I mean, I believe we would be producing and running the assets and selling and booking the revenue, right, for the brand. So, what's in for the asset owners? Why would they buy?

I mean, the asset owners bought the asset. They bought the land, building, everything. They will sell at a better price, maybe. That is why they invested.

Okay, they will sell at a markup. That's what it is. So, you mentioned, you know, the margins in consumer wear were sort of flattish or down due to steelware revenues not coming in. So, I don't understand the plan just came in. So, how did that affect our profitability in consumer wear?

So, two things. Steelware did not give the revenue. which was a big revenue decline. So, that is why the profitability was not reflected. Secondly, though we grew... Which is not profitable at this point of time. Right? It is only breaking even.

God is right here. Thank you, Sanjeev.

Thank you. Ladies and gentlemen, a reminder to all the participants, if you wish to ask a question, please press star and 1. The next question is from the line of Sukrit D. Patil from iSight FinTrade Private Limited. Please go ahead.

Good morning to the team. My name is Sukhrup Patil. I have two questions. The first question to Mr. Rathod is, beyond the growth outlook, how will Seloval manage risk and uncertainty across its core categories?

So, when it comes to input cost, you know, they don't rise and fall very drastically. Unless we have situations like COVID, where it changes for everyone. And because we are a consumer-facing brand, you know, some of those input costs are, you know, passable to the consumer. And I think... It is very limited when it comes to, you know, input costs. And if it happens, it happens for everyone. And I think that is the reason that, you know.

Many other risks that would completely,

you know, have a very major impact. I don't know if you're kind of referring to any other risks that, you know, so if there is anything specific, I could answer it in that fashion.

No, in general, I'm just asking, not anything particularly oriented, just in general, any risks that you foresee in the coming days? Just wanted to understand that.

I don't see any major risks in the coming quarters. Of course, this is something I can't foresee. If there is something that happens like a BIS kind of a situation where there is regulatory problem, then no one can foresee that. So I think whatever we can foresee, of course, we can plan for it.

My second question to Mr. Parogia is, along the similar lines, beyond the margin guidance, how will you manage any financial risk or uncertainty in areas like raw material costs, working capital, and capital allocations? What guardrails will ensure earning quality stays stable, you know, even in these volatile conditions? I want to understand your plan of fashion and point of view on this. Thank you.

In the past, which we have seen, actually, our profit margin is more or less remain in a range bound, actually. And the reason being, as we said, we have the product mix, actually. And with the product mix, we get the advantage of higher bidder peers. And in the future, even we don't see any such risk, actually, which we are saying. And our best thing is, actually, Our new product, as you see, our new product goes on coming, actually, and that gives us many advantages.

Thank you, and best wishes.

Thank you.

Thank you. The next question is from the line of Anirudh from ICICI Securities Limited. Please go ahead.

Yeah, thanks. So, sir, generally, whenever the... So, commodity prices move up and down a bit. INR depreciation is also there. And the rules related to BIS are also there. So, historically, it has been observed that in such cases, the larger players like Shell end up gaining good amount of market share. So, if you can share what has been the market share journey for the steel products, and how do you see the market share, let's say, changing over next one, two years. That is question number one. And then question number two, in terms of while there has been a relatively softer growth in the market itself, have you seen any impact on the trade spends, especially in the molded furniture segment, etc.? So, how should we read in terms of the trade spends, inventory levels in the trade, etc.? Any material changes happen to that due to slowdown in the market growth? Yeah, thanks.

You are right that, you know, overall, as we ramp up our production, and, you know, before, there were a lot of importers, people could import different items. But, you know, and that will help overall in the long term as we scale up our production to gain some market share. But also, you know, one thing we should understand is that, you know, when we were importing, we were importing from 20-30 different companies in, you know, in the world. And the point was that the kind of diversified range that we could have, we cannot have that anymore, and no one can have that anymore. So I think that is one reason that... You know, we still remain, of course, we remain confident that, you know, market share gains will happen because no one now can go and import, say, a container. But having said that, the range has reduced. And to build that range will, of course, take some time. And over the years, we will be able to do that as we scale up our revenues. But yes, possible, 100 percent, this should come in and kick in in the next year. In terms of your second question, Change in the channel. The primary growth, of course, has stopped for everyone, but at the same time, the secondaries have been at par. So, I wouldn't say that there is a meaningful increase in channel stock.

Okay, sure, sir. Second, just from a strategy perspective, Celo operates the business through multi-pubsidaries. Will it be easier in terms of operations as well as... And from the trade perspective also, if all subsidiaries get merged, because then there can be seamless flow of capital from one segment to other. And even from trade perspective, there will be single billing and single accounting, overall audit, all the expenses can also slightly come down. So, is there any thought process on that or the current system of multiple subsidiaries is actually, will continue and is more beneficial? Yeah, that's it from my side.

I think for us, multiple subsidiaries have been the way we have been working. That's how we are structured. Because we don't want to put the expenses or burden of one company onto the other. And every unit is basically a P&L for us. One person basically handles it. So, overall... Easier. You know, kind of... We have structured, in the fashion we have structured. From a billing point of view, actually cello world has most of the billing and it is kind of one point for most of our customers, except for the glassware side, which is the second billing point. So I think that is not really a major concern or it will not really reduce any further cost. Yeah, it can just make it easier. That's the only thing. I think, you know, we are happy with the current structure and would like to operate it.

Okay, sure. This is very helpful. Many thanks.

Thank you.

Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Karan Bhattalia from AMSEC. Please go ahead.

Hi, good morning. Am I audible? Yes, yes. Yes. Hi, I wanted to understand any pricing actions, you know, taken across the portfolio or, you know, how do you see pricing strategies, you know, in the medium term?

So, no pricing strategy as such, you know, in an environment like this, we are not, you know, guided even in the first quarter, that some of the expenses had increased, but we were unable to pass on. So, there is no, but now there is no such pressures also that, no new pressures, I would suggest, that will lead to any pricing corrections. Rather, we are actually worried. You know, the manufacturing side where we can, you know, cut cost and optimize. I think that is the strategy going forward, at least for this, at least for a few quarters.

Right, right. And on the classware side, I think we're slightly behind our targets. Fourth quarter earlier, we were estimating 80% capacity utilization, and I think profitability from this vertical will only start once we cross 75%. So how do we see classware as a portfolio?

Glassware, for the company, is a very long-term bet. Once we establish ourselves in this particular product line, it's a tough product line. For anyone else to come into the entry barrier is extremely high. The kind of glassware producing is, I would say, today much better than a lot of countries have been able to do. We are not worried about current profitability. We are more, you know, wanting to first gain the market. Thank you very much.

Noted. Thanks for this. And on the writing instrument side, one last question from behind. How is the product portfolio for BIC Cello? Because I believe for us, we're more on the writing side and slightly lower on the other stationary part. And we were ideally wanting to expand that portfolio as well. So BIC Cello, how is the split between writing and stationary?

So, BIT Sello is actually structured exactly like us. So, Stationery is a very small plot for them as well, which actually is a fantastic and a very big opportunity for us now going forward by adding these products into Sello, which has a much better brand equity when it comes to Stationery. So, I think, yeah, that way it's a fantastic opportunity and, you know, it opens up a lot of doors.

Because we did launch a few products like markers, crayons, geometry boxes, mechanical pencils. So how is the ramp up there? How is the market reacting to our 16 revs?

I think while we have introduced all of these, it has been not a very big ramp up there with the Unomax brand. What we are now going to start doing is, you know, have those similar kind of products in the cello brand. And I think with the fellow brand, you know, the scale-up will be a lot faster.

And on Capex, run 150 crores for this year and 75 crores for next year or anything incremental could be seen?

So, maintenance Capex is going to be at about 75 crores, 75 to 100 crores. Apart from that, there will be slight Capex in the writing instruments.

Right. So, correct to assume, 150 for both the years, 26, 27. Maximum, yes, maximum.

That is the upper limit.

Yeah, thanks.

Thank you. Anyone who wishes to ask a question, may press star and 1. The next question is from the line of Deepesh J. Sancheti from Mania Finance. Please go ahead.

Congratulations on acquisition of cello brand. I wanted a question, I wanted an answer about, you know, what do you think will be the growth driver, and will it be fair to assume that writing instruments will be the growth driver for the next two years?

So, I think for us, growth drivers are two, glassware and writing instruments. Both are, you know, glassware, of course, the potential is very huge. And we will try to reach about 80% capacity by the end of the next year. And in writing instruments, of course, with the acquisition of cello, you know, we are now looking at fantastic numbers for this year. And of course, as I mentioned before, it opens up a lot of doors for a lot of other stationary items. So yeah, these two pillars are going to be very important for us in the next year.

Right. And since we are already planning CAPEX, you mentioned that we are already planning CAPEX in the writing instruments. Wouldn't it have been better that we would have acquired the assets of BIC, also BICCELLO that time, and instead of, you know, having additional CAPEX? I mean, if you can just give a comparison that what was the, you know, what was the advantage of doing a fresh CAPEX rather than not acquiring the assets?

A lot of this CAPEX is actually acquiring some of those assets of big cello, which is some of the molds and machines. What we did not require is the land and buildings. Which was the bigger asset, right? The others are smaller asset. And a lot of their machinery was very, very old. So I think we did not see any, you know, advantage in kind of acquiring them because they would run very inefficiently. So that is why some of that capex is going to be in the newer machines and newer molds.

Right, great. Just the last question about the Wimplast merger. Since all the regulatory approvals are almost done, when do you see that this merger will finally happen, if you can give a timeline to it or date to it?

See, in the bundle of Fav, only final hearing is there, is around last week of Fav, and the day after, once we get the approval, then everything is set. Then, We will be in the process of purchasing. I mean, already, as you know, our pundit date is 1st April 2025, so definitely from that date itself, but maybe around 2-3 months at a time, we will see how that gets through.

So by first quarter, in the first quarter of FY20's turn, we should be done with it? Yes, yes, for sure.

Great, great. All the very best.

Thank you.

Thank you. Participants who wish to ask a question may press star and want at this time. The next question is from the line of Vaishnavi Gurung from Craving Alpha Wealth Fund. Please go ahead.

Yeah, hi. Are you for the opportunity? An audible?

Yes, yes. Absolutely.

Sir, my first question is on the steelware segment. If you can help us with what is the total contribution of steelware to the consolidated revenue? And I wanted to address that, will the ramp-up of the new steel plan still impact the revenue and margins, or will the third-party sourcing continue having an impact? I just wanted to have a future outlook.

So, I think we do not give out numbers separately for the steelware. Basically, of course, the steelware, as I mentioned, is a significant component of our revenues in the consumerware segment and has taken an impact in this quarter. Going forward, I think, of course, as we ramp up our production and reduce our OEM supplies, we should see a meaningful growth in revenue and margins. So, I think at least we should return back or actually better the margin that we had before while we were trading.

So, we expect this impact to happen in the next two, three quarters, or we expect this to remain?

The impact will be in phases, the impact as we scale up, you know, over the next two quarters. The impact will, of course, the full impact will be, you know, only in H2 of next year, but then you will start seeing some impact over the next two quarters.

So, we may see some subdued growth in the next two quarters too?

We might not see growth because a lot of the product lines we are out of stock. So we will be just fulfilling those. In terms of our revenue, we will only be fulfilling. We might not reach complete revenue potential until the end of the first half of next year.

Okay, I just wanted to have an outlook on the moulded furniture segment. Will this current scenario of lower sizes have an impact in the coming quarters soon?

So I think if the polymer prices continue to be weak, you know, there will be a slight impact because as you know, it is completely directly proportional to polymer prices. And any decrease kind of decreases revenue, any increase increases revenue. So I think this will continue to be a trend in Wimplast and, you know, that is why we have always guided for a low single digit number growth in the Wimplast side.

Do we not have any hedge in place to mitigate this risk?

No, there is no mitigation that is possible here because, you know, that polymer crisis is not something that I can control.

We'll be trying to predict your question as I'm back with you.

Thank you. The next question is from the line of Akhil Parekh from BNK Securities. Please go ahead.

Hi, thanks for the opportunity. My first question is based on the commentaries now we have given across the product categories and given the software base we have in EFI 26. Would it be fair to assume that our growth rate in FY27 can be between 15% to 18% and the margin profile going back to 23% plus? And that's my first question.

All of us beware. Thank you. After that, you will see more growth. So, as the quarters go by, I will keep guiding. Currently, what I am guiding is for the next couple of quarters, what I can foresee is about 8-10% growth, given the fact that steelware will still be under pressure.

Sure, sure. This is helpful. And just a second question on the Opalware and the speed, right, and the peak utilization rate, what kind of sales turnover both these categories can be?

For 10 crores of revenue at its peak.

Okay, and about Steel?

Steel, current capacity will go up to about 300 knots with additional capex, which is not a lot. We can keep adding machines because the facility is completely built. If the capex post, that will not be much, even if you want to add capacity.

Okay.

And so, if I have missed it, the margin profile of the steel category, is it in line to the Opalier or is it below Opalier category?

So, it is in line, it is slightly lower always, it has been since we were trading. As we scale up our production, this could improve. You know, but currently it will stay a little lower as it has always been than Opalier.

Okay. Thank you.

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

Great. Thank you, everyone, for being on the call. You know, I think exciting times for us ahead with two fantastic categories, stationery and glassware, which is going to ramp up in the next few quarters. And, you know, we look forward to the next few quarters, and, you know, hopefully we'll have a much better year this coming year. Thank you so much. Thanks again.

Thank you very much. On behalf of ICICI Security is Limited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.