Orient Bell Limited

Aditya Gupta

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Himanshu Jindal

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Himanshu Jindal

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Aditya Gupta

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Viraj Mehta

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Himanshu Jindal

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Himanshu Jindal

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Achal Lohade

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Aditya Gupta

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Aditya Gupta

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So, Achal, there are a number of things which when you look at a blended ASP, there is also an impact of product enhancement which comes into play.

— Himanshu Jindal

Very difficult to kind of give you a figure on a product perspective, but it's a cross product category.

— Aditya Gupta

So Ankur, I think as a policy, we have stayed away from giving guidance on the future, largely because the biggest cost piece, which is gas and oil, is so, so unpredictable and uncertain.

— Aditya Gupta

It's very difficult to give a guidance at this point in time because of obvious reasons.

— Himanshu Jindal

Another area that has been of concern to us has been a lot of front-liner attrition, over the last five months-six months in terms of sales team.

— Aditya Gupta

We are taking action, I spoke about how we have opened more branches, last year I spoke about how we have added more sales Headquarter towns, new Head quarter towns so that we can now spread out the risk.

— Aditya Gupta

But specific figure whether it will be INR1 lakh crores, whether it will be 80 or 90 and all that kind of difficult to say.

— Aditya Gupta

But optimistically cautious at this moment, at least for the current year.

— Himanshu Jindal

Q

Thank you. Good afternoon, ladies and gentlemen, and a warm welcome to our earnings conference call. After two consecutive good years for OBL, FY’23 was far more challenging than our expectations. Not only did we get impacted by the flurry of cost increases, but markets in general were less receptive this time. Demand especially from the low-end retail projects, a key strength for Orient Bell in the recent past, was impacted significantly with interest rate hikes coming into play, especially in the second half of FY’23. On the other hand, the new capacity buildup by peers added to the overall

Himanshu Jindal

Thanks, Aditya. Good afternoon, all. A second consecutive challenging quarter for OBL, our revenues contracting by 6.8% for reasons addressed by Aditya in his opening remarks already. For the full-year, we were flat on volumes and 7.5% up on revenues versus the last year. Largely product mix improvement with GVT salience increasing to 23%, which is approximately 3% higher versus the last year. And ASP gains versus the average baseline last year. Throughout the year, focus clearly was on more sustainable, cash-backed, high-value sales from one manufacturing, given the organic expansions getting

Q

Hi, Aditya, hi Himanshu. The first question is, if I look at the market share, and you alluded to it, that we lost some market share because of working capital, but if I at least look at the working capital cycle of two of the larger peers that are listed, their working capital cycle has shrunk this year YOY by 8 to 10 days, and still they have grown faster than us on a larger base. This is something that I am struggling to put together.

Aditya Gupta

So, Viraj, are you referring to the credit given to the trade part of the working capital? Overall working capital I am looking at, but even the receivable cycle has not gone up for them. Which is where I am struggling to put two and two together? So, Viraj, I will try and come in here. I looked at what the peers published. You know, the peer that you are referring to has actually incidentally increased a lot on the payables front. The cash conversion has obviously gone down, and this is why you are citing this, but if you look at purely the receivables and the inventory, I think we are largel

Q

Good afternoon. Thank you for the opportunity. My question was just an extension of the previous question. If you look at the gross margins Q-O-Q, they are down about 700 basis points. They're about, right? And you mentioned that it is kind of driven by discounting. But when I look at the realization, they are flat Q-O-Q. What am I missing, sir?

Himanshu Jindal

So, Achal, there are a number of things which when you look at a blended ASP, there is also an impact of product enhancement which comes into play. So, those numbers may or may not be identical in case the product mix have changed. More importantly, like we mentioned, the costs have gone up. This is very clear for us. We have not got the kind of respite that some of our peers have. So, they are armed with more gas pricing advantage at this point in time that we are not yet. So, it should play out in the next three to six months. What you should also remember, we, like I shared with you guys in

Q

Hello, sir. Thank you for taking my question. Sir, my first observation is if I look at it two-year window, that is from FY’21 to FY’23, we seem to have done better than both the larger peers. Now for the coming year, both are guiding for double-digit volume growth and margin going back to FY’22 level. So, basically FY’24 margin, they are saying that will go back to FY‘22 levels. So, what is our view and our expectation on that front? Can we also go back to the similar margin level?

Aditya Gupta

So Ankur, I think as a policy, we have stayed away from giving guidance on the future, largely because the biggest cost piece, which is gas and oil, is so, so unpredictable and uncertain. Having said that, in part what I spoke earlier, that our gas linkages are such that both a fall in price or an increase in price kind of works through our balance sheet at a slower pace. So, I think there has been, crude oil to which our gas pricing is linked has been coming down over the last 3-4 months. In the case of Dora, which is an APM gas, we were paying INR32 last year. The government has announced a

Q

Sir, I'm trying to understand that our competitors who are larger on a bigger base, they have grown by approximately 10% volume growth but our volumes are flat. So, we appreciate the gas pricing that you explained to us, but it does not explain how our top line is lagging vis-à-vis with the competition.

Aditya Gupta

So, Keshav, absolutely correct understanding and I think the gas price, as you clearly said, is not the explanation here. I think what, because of the gas pricing or whatever else, what we did was we were a bit slow. I would say a lot slow in our discounting decisions. We were waiting and watching and now in retrospect, we should have acted faster. I think it's only by the end of Q3 that we started realizing our pricing and all. And if you see the bulk of our loss, the volume loss has happened in basically the mid-sized projects, say 3,000 square meter to about 5,000, 6,000, 7,000 square meter

Q

Hi, good afternoon. Aditya and Himanshu. ] So my first question is, so you mentioned Aditya that, we were a bit, behind the curve in terms of discounting. And that's why we lost some volumes. So, to kind of understand slightly larger picture. So in order to, for us to grow volume at a higher than market rate, does it mean that, the discounting is a primary means to grow volume for us going forward? That's how we look at the overall market dynamics.

Aditya Gupta

Actually, we don't look at it that way. And that is why, we ended up being conservative and a bit slow on the discounting piece. See, the way it works out is that, if there is a certain price difference between us and say Morbi and all, and it kind of keeps going up and down, we are still okay. But if there is a 5%-6% price drop by say one of the leading companies, that becomes a reference point for the industry and that creates a lot more damage to us. Having said that, to answer your question, I think last four years-five years, we have been working on a strategy to kind of reduce our depend

Q

Yes, hi, good afternoon, thanks for the opportunity. My first question is on what is the outlook towards your export market and how the mortgage player are doing the export in the current environment?

Himanshu Jindal

Naman, we don't really export massively, it's very little of our volumes anyway. So you know, Yes, but generally export markets are picked up, especially in quarter three, quarter four, whatever numbers that we saw, numbers are going up. Very simply put. So any plan we have to put the capex in Nepal? As we seen that the raw material prices are very low there in Nepal. So any plan to add there? And if players are adding the capex in Nepal? So Naman, yes, some local players have come up. One of them has been manufacturing for the last couple of years, one and a half years. Some new capacities ha

Q

Hi, good evening. You mentioned that you're facing attrition and the front lines in the sales side. Could you please tell us something more about that? What's the reason for that and what are you doing about that?

Aditya Gupta

Okay, Deepak, I think we had no attrition during the two COVID years. I think there seems to be some kind of a revenge, a job hopping or there's some reversal to the mean trend which is kind of playing out. When I speak to my friends across industries, everybody has talked about FY ‘23 being a very big year on attrition and we have also been impacted. For us, because we are a smaller player and we do not have too many, I should say layers and too many people on the field who can cover, say one person leaves by the time you kind of recruit his replacement, it does have an impact from month to t

Q

Hi sir, thank you for giving me this opportunity. So I just have one question from my side. So most of our competitors are already bullish on our industry growth. Some of them are mentioning that industry will get doubled or even close to INR1 lakh crores in couple of years. So I just want to understand your views on this. I also know you are not giving any guidance per se but if I could ask how much volumes we can do by next five years. Let's say by 2027?

Aditya Gupta

So Jojo, I remember you did ask the guidance question last time also. So we don't give out a guidance here, but let me give you some pointers. So we are adding capacity. In the last 2-3 years we have added one new line in Hoskote which came up in H2 of last year. We have increased the capacity of our GVT line in Sikandarabad which happened in H1 of last year. Again by September-October we will have another line in Dora which will get commissioned. So we are consistently investing on that. I also spoke about that. I have seen that INR1 lakh crores number being talked about which would be about

Q

Thank you everybody. Thanks for being on the call. I look forward to speaking to you again three months later. Thank you.

Himanshu Jindal

Thank you so much. Take care.