Orient Bell Limited

Aditya Gupta

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Aditya Gupta

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Himanshu Jindal

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Rohit

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Rohit

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Rohit

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Aditya Gupta

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Aditya Gupta

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Rohit

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Rohit

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As the price cuts took time to play out, our revenues continued to be under stress with a 7.4% drop in the quarter, while volumes were slightly better at 3.8% drop year-on-year.

— Aditya Gupta

It's becoming difficult for Morbi guys to penetrate domestic markets because earlier what they were doing largely showing pricing by being non-compliant.

— Himanshu Jindal

Would the marketing campaign put some more pressure on our margins, which are already at quite a low level?

— Gunit Singh

Last few quarters have been difficult for reasons that we spelt out, largely revenues, largely the gas price differentials that we had vis-à-vis the others.

— Himanshu Jindal

So, we have to be very cautious as to what we do.

— Himanshu Jindal

Sir, my concern is that this is the fourth consecutive quarter when our sales are dropping year- on-year.

— Keshav Garg

So, the primary concern is that, when will we stop losing market share from the already low base that we are in?

— Keshav Garg

If you exclude all those who are doing exports, and you exclude all those who are in those top three, four, five rankings, you would find the majority who are selling onshore are finding it difficult to sell.

— Himanshu Jindal

Q

Thank you. Good afternoon, ladies and gentlemen. Welcome to the Q2 FY24 Earnings Call. It has been a tough quarter for us, with the marketplace demanding liberal credit and lower prices. We dropped our prices in some categories by 8%-10% during Q2 and this reflected in an ASP drop of Rs.16, which was partially made up by an improved product mix, i.e., more GVT and Vitrified. As the price cuts took time to play out, our revenues continued to be under stress with a 7.4% drop in the quarter, while volumes were slightly better at 3.8% drop year-on-year. Some of the major highlights of the quarter

Himanshu Jindal

Thanks Aditya. Good afternoon to all. So, the last few quarters have not been great from a revenue point of view for OBL, impacting profitability. Markets have been sluggish and the aggression from players did intensify, not only on pricing but also on credits in quarter two. Something that we have avoided as we believe in more sales backed by actual cash flows, especially when the uptake is slow. Our trading operations have done well. Growth in volumes was more than 17% on a Y-o-Y basis and our trading margins expanded as well, backed by the improved product mix, despite the drop in realizati

Q

Hi, good afternoon, sir, and thank you for the opportunity. So, my first question would be if you could highlight broadly geography-wise, so north, south and western market, the demand scenario? And how do you expect it going forward during the second half of the year?

Aditya Gupta

Hi Rohit. I think demand has been broadly similar across geographies. There is not much of a difference. And not much data also available, but one thing which is clear is that the demand for exports has been very robust in quarter 2. We estimate about 40% to 45% growth on exports in quarter 2 over last year's quarter 2. But domestic has been similar. Got it. So, my basic reason for asking this question was because we have recently started the Dora facility and if there is sluggish demand currently right now, so how soon do you expect the Dora facility to ramp-up in terms of capacity utilizatio

Q

Hi, sir. Thank you for this opportunity. So, sir, one of our largest competitors, one of the biggest players in India, Kajaria, they recently reported their results. And we saw an year-on-year growth in revenues as well as margins for them. While for us, it is quite the reverse. So, I mean, what are we doing different that we are not able to achieve, I mean, growth year-on-year? And what can we do different in your opinion to, I mean, get back to the growth trajectory?

Aditya Gupta

Okay. Thank you, Gunit. See, our margins are extremely sensitive to top line. And I think you're talking about the market leader. They had talked about how their overall fuel cost has come down quite a lot because they have started using some biofuels and all, which is something which we have started doing almost two years back. So, our last year baseline already had captured that benefit. The other, the bigger part, I think, is the revenue piece, the top line piece. And this is where for a company of our size, every extra kick in revenue adds very disproportionately to our margins. More so be

Q

Sir, my concern is that this is the fourth consecutive quarter when our sales are dropping year- on-year. And if we compare our numbers with the industry leader, then they have shown mid- single-digit growth year-on-year. And today, Prism Johnson also came out with their numbers. They have also shown year-on-year growth in their tile segment of mid-single-digit and their PBIT has tripled. Kajaria's PBIT has also gone up 40%. Whereas it is understandable since our top line is only falling and we are losing market share, then obviously, operating de-leverage will kick in. So, the primary concern

Aditya Gupta

So, valid this thing. As I talked about some of the reasons that we have in terms of, we have had in terms of a very high ceramic play. I think with the new capacity which are coming up, we only had between, our vitrified capacity has historically, GVT capacity, vitrified capacity has been very low, with this new line coming in. For the first time, we can seriously address some of the biggest markets in the country, which is South and West. So, going forward with the teams in place, with the new ad campaigns which we are talking about, which, Himanshu said, is going to be a very significant de

Q

Thank you. Thanks everybody for your participation. Look forward to getting back to you in the month of January. Thank you.

Himanshu Jindal

Thank you.