ORIENTBELLNSEMarch 31, 2025

Orient Bell Limited

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105turns

12analyst exchanges

3executives

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Management on call

Aditya Gupta

CEO – ORIENT BELL LIMITED

Himanshu Jindal

CFO– ORIENT BELL LIMITED

Suyash Samant

STELLAR IR ADVISORS

Key numbers — 40 extracted

rs,

ued and exports continued to be affected by the volatility of ocean freights. These external factors, coupled with overcapacity in the industry, especially from Morbi, increased pressure on pricing an

INR666 crore

industry-wide drop in average selling prices. For the full year OBL has registered net sales of INR666 crores in FY '25 compared to INR669 crores in FY '24, a drop of 0.4%. Consolidated EBITDA for FY '25 wa

INR669 crore

ing prices. For the full year OBL has registered net sales of INR666 crores in FY '25 compared to INR669 crores in FY '24, a drop of 0.4%. Consolidated EBITDA for FY '25 was INR30.8 crores, while profit after

0.4%

as registered net sales of INR666 crores in FY '25 compared to INR669 crores in FY '24, a drop of 0.4%. Consolidated EBITDA for FY '25 was INR30.8 crores, while profit after tax was INR2.8 crores. Des

INR30.8 crore

in FY '25 compared to INR669 crores in FY '24, a drop of 0.4%. Consolidated EBITDA for FY '25 was INR30.8 crores, while profit after tax was INR2.8 crores. Despite these difficult conditions we had wins on cos

INR2.8 crore

24, a drop of 0.4%. Consolidated EBITDA for FY '25 was INR30.8 crores, while profit after tax was INR2.8 crores. Despite these difficult conditions we had wins on cost saving initiatives and cost base improve

35%

L successfully retained a part contributing to our gross margins. Our gross margin for FY '25 was 35% versus 33.6% in FY '24. Our key strategic focus during the year was pivoting to strengthen our re

33.6%

lly retained a part contributing to our gross margins. Our gross margin for FY '25 was 35% versus 33.6% in FY '24. Our key strategic focus during the year was pivoting to strengthen our retail business

41%

lly glazed vitrified tiles and slabs. The salience of GVT grew to 41% in FY '25 and the vitrified mix improved to the highest ever 58.5%. This strategic shift towards

58.5%

salience of GVT grew to 41% in FY '25 and the vitrified mix improved to the highest ever 58.5%. This strategic shift towards premiumization was supported by investment in brand and sales tea

3.3 million

ds GVT and expand our reach, particularly in the South and West markets, the Dora GVT line having 3.3 million square meters has come into existence in FY '24 and has enabled growth. These capacity additions

INR234 crore

e into existence in FY '24 and has enabled growth. These capacity additions are part of the total INR234 crores invested in capex between FY '19 and FY '25, adding 10.9 million square meter of additional capa

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Guidance — 18 items

Suyash Samant

opening

“The management will be sharing the key operating and financial highlights for the quarter and full year ended March 31, 2025, followed by a question-and-answer session.”

Moksh Ranka

“So do you anticipate more capacity and since, line prices have risen after all, so there should be a deterrence for new capacity to be set up?”

Aditya Gupta

“We expect -- I think Morbi would have been at about 60% odd capacity utilization is our estimate last year, maybe even lower.”

Aditya Gupta

“So we expect this capacity overhang to continue till the markets turn for the better.”

Moksh Ranka

“So do you anticipate FY '26 to be a good year because of lower freight rates and any other things which would aid exports?”

Aditya Gupta

“But I think structurally, the freight rates definitely will be subdued for this full year compared to what they were earlier.”

Moksh Ranka

“So when do you anticipate margins to increase?”

Rohan Choksi

“So the commentary is similar that the next 2, 3 years, they do expect that to pick up as well.”

Aditya Gupta

“And that is why it's important that if export starts up and the capacity starts getting diverted there, it will stabilize prices and immediately, there will be a positive impact on everybody's volumes.”

Apurva Anil Sharma

“My question will be more on strategic side, sir.”

Risks & concerns — 5 flagged

These external factors, coupled with overcapacity in the industry, especially from Morbi, increased pressure on pricing and volume, heightened competition resulted in an industry-wide drop in average selling prices.

— Aditya Gupta

Despite these difficult conditions we had wins on cost saving initiatives and cost base improvement.

— Aditya Gupta

I get it last 1, 2 years has been weak overall for the market.

— Rohit

I think in the short run, we all know what the Indian economy looks like, what are the drivers, what are the risk factors.

— Aditya Gupta

It is just an issue of timing, which is difficult to predict that is going to turn this quarter or H2 or how exactly.

— Aditya Gupta

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Q&A — 12 exchanges

In your opening remarks, you mentioned that FY '25 was a challenging year, especially because of overcapacity in Morbi. So do you anticipate more capacity and since, line prices have risen after all, so there should be a deterrence for new capacity to be set up? Are you seeing any shutdowns there because average selling price has also dropped as you mentioned.

Aditya Gupta

Moksh, your line is not clear, Moksh -- did not understand your question. Can you please repeat? I just want to understand are more players opening up capacity in Morbi? Or are there any shutdowns because the average selling price has also dropped and line prices has also increased? So Moksh, so the data which comes out, I think it says about -- the Morbi associations are saying about 550 to 600-odd companies in Morbi units -- in Morbi were operating, somewhere in that range. We expect -- I think Morbi would have been at about 60% odd capacity utilization is our estimate last year, maybe even

Sir, my question was, in spite of GVT sales going up and now that all the capex is done as well, when can we see the operating leverage kick in?

Aditya Gupta

So I agree with you, Rohan. So we have the one big capex cycle for us, as I mentioned, is now over largely through internal accruals. Unfortunately, the markets have been very subdued. If you see the last three financial years, FY '23, '24, '25, the listed players have been in the -- total listed players have been in the INR11,000 crores to INR11,500 crores kind of a top line figure hasn't changed for 3 years now. So our capacity is in place. Our operating margins, as I mentioned, are getting better through cost efficiencies. But the operating leverage -- a lot depends on a bit of upside in th

No, no, I stopped talking. I finished my answer.

Rohan Choksi

Okay, sir. Got it. And sir, just quickly, I noticed the finance costs for 2025 have doubled from '24. But was there any new short-term borrowing taken or any specific reason for the finance cost... So Rohan, we had -- one is the new plant of Dora, which was capitalized in September '23. So that depreciation has come and hit us. On finance cost, specifically, we took the loan for that thing, which has been the interest of that has been a part of it because if you remember, in FY '22 and FY '23, we were largely debt-free. And we took up a term loan to finance the Dora line. The interest cost of

I wanted to know our current ASP. And on one of your previous calls, I read there were some plans to inch it closer to the market leader. Any color on the same? Could you quantify it for us?

Aditya Gupta

So Ashvat, there has been -- can you hear me, Ashvath? Yes, I can hear you. So Ashvath, there has been an improvement. As I talked about we are now 59% vitrified. So there has been an improvement. And compared to -- I don't want to get into numbers, but compared to, say, FY '23 versus FY '25, we have closed our gap with the market leader, I would say, by about, say, every INR10 gap if it was there in '23, we are now at about INR7 gap now. So we have closed that gap with what it was in FY '23. And it's been a steady thing. We have been doing that in FY '24 was better versus FY '23 and FY '25 is

Congratulations for posting good results in such an industry when the whole thing is going in doldrums. My question will be more on strategic side, sir. In the real estate cycle, tiles come towards the end of any project. Since '15, '16, '17 was a good cycle, then we had '18, '19 as a dull cycle, '20 and then '21, '22, '23, we had a fairly okay cycle and then '24, '25, we are seeing a dull cycle. Is this the right assumption to take forward that from '26 onwards, we could have a good traction in the tile industry overall?

Aditya Gupta

So, Apurva. Yes, I agree with you. It's a cyclical industry, and we hardly -- we see there is, we have 2, 3 bad years and then there are a couple of good years and then again bad years because what has happened is that our capacity in the good years, growth capacity gets planned and it's just so. So we also expect FY '26 to be better. The Indian economy so far has been quite resilient to shocks from abroad. And with the crude prices being lower than before, that's a huge positive for India. And we are able to just navigate this tile export…

Is it better? Okay. So what I was saying is that if this tile export piece of jigsaw puzzle from India is sorted out and we see some traction there, it will be a great year for the entire industry in India. So my assumption -- my reading, Apurva is that more than the real estate industry in the country, it is the diversion of export capacity into the domestic market, which is hurting us.

Apurva Anil Sharma

Okay. So see, right now, we have positioned ourselves in such a way, where the capex is completely done, we have spent on advertisement and branding better than the market leaders. We are ready in all the fronts. So we are just waiting for the growth to come in, and we will see the results. But as in -- for example, recently, Nitco got INR100 crores, order from Prestige Real Estate Builders. So do we -- are we also pouring into directly getting orders from these big real estate people? So, Apurva. We have separate sales teams, which are chasing large deals. As a matter of policy, we don't anno

Sir, my first question was, so since the Dora plant has come about and we were focusing a lot on increasing our market share in South India. I get it last 1, 2 years has been weak overall for the market. But have you seen any progress in terms -- can you share any progress that you have made in South India in terms of market share or in terms of retail touch points? I just wanted some clarity on that.

Aditya Gupta

So definitely, Rohit, a very large percentage of this GVT growth which you see all-India is driven by South India. We were almost totally a ceramic player in South India historically, since the Dora plant has come in. We are doing much larger numbers of GVT in South and West, which were almost nil GVT kind of geographies for us. So it has definitely helped us. The unfortunate part for us have been that the downfall in the ceramics has been steeper than what we anticipated, so while in this financial year, you have seen other results also almost everybody has kind of dropped ASP. Let me tell yo

I would like to know the overall institutional sales contribution in FY '25 and Q4 if possible?

Himanshu Jindal

Moksh, your line is not very audible. Can you please repeat again? Yes. Is it better now? Much better. Okay. I would like to know your institutional sales breakup like what was the total contribution in FY '25 and Q4 FY '25? Himanshu Jindal The way we track our projects, Moksh, we do roughly around 20%, 25% institutional one way or another way. This is a combination of small or medium or large projects, all of that put together, private plus government. Yes. And 3, 5 years down the line, except for the boutique stores what do you see a major contributor for us would be? See the market is getti

Just because the line is a little distorted. I just missed the utilization levels for the whole company, if you can repeat that and also for the FY '24, the same number for FY '24?

Himanshu Jindal

Shubham, I think what you need to know, we added more and more capacity in the last 1.5, 2.5- odd years, yes. So bulk of the capacity that we have added has come up in FY '23 and FY '24. Now to answer your question, our capacity utilization last year was somewhere between 65%, 70%. This year is somewhere between 55%, 60%, yes, but on an expanded base. So as and when the you'll see capacity utilizations improving. Got it. And also, if you can repeat the B2B sales, B2C sales and B2G sales for FY '25 and '24? See, both the years, it's more or less similar, 20%, 25%, like I said to a previous ques

Thank you for the opportunity again. Sir, my question is a bit on the industry scale. I wanted to understand the demand, is it pent-up in any form right now or is it that this demand is being diverted towards Morbi-based competition on any end? And yes, any color on the same?

Aditya Gupta

So see, the -- interesting question, Ashvath. We also track the top five, six unlisted companies.

Yes, I am listening.

Aditya Gupta

So that's my answer. So I don't think organized sector is losing out on market share to Morbi per se. Got it. And I mean, quantifying on the market share, could you give us a number on what is our market share right now overall? So see, as I said about last year the listed companies were about INR11,500 crores. I think it will be something similar. So we would be about 5% to 6% of the listed company universe. If you were to add the top five or six unlisted players then the market comes to about INR15,000 odd crores and then you can get the numbers there. So it would be about 4% to 5% of that.

Thanks, everybody. Thank you for taking time out and being with us. Look forward to meeting you for the next earnings call, which will be in August sometime or July end I think. Thank you, everybody.

Management

Speaking time

Aditya Gupta

Ashvath

Moderator

Moksh Ranka

Shubham

Himanshu Jindal

Rohan Choksi

Apurva Anil Sharma

Rohit

Suyash Samant

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Opening remarks

Suyash Samant

Thank you. Good evening, everyone, and thank you for joining us today. We have with us today the senior management team of Orient Bell Limited; Mr. Aditya Gupta, Chief Executive Officer; and Mr. Himanshu Jindal, Chief Financial Officer, who will represent Orient Bell Limited on the call. The management will be sharing the key operating and financial highlights for the quarter and full year ended March 31, 2025, followed by a question-and-answer session. Please note, this call may contain some of the forward-looking statements, which are completely based upon the company’s beliefs, opinions, and expectations as of today. These statements are not a guarantee of the company's future performance and involve unforeseen risks and uncertainties. The company also undertakes no obligation to update any forward-looking statement that reflect developments that occur after the statement is made. I now hand over the conference to Mr. Aditya Gupta. Thank you, and over to you, sir.

Aditya Gupta

Hi. Good evening, everybody. Welcome to our quarter 4 and 12-month FY '25 earnings call. Fiscal year '25 presented a challenging operating environment for OBL. Domestic demand for tiles remained subdued and exports continued to be affected by the volatility of ocean freights. These external factors, coupled with overcapacity in the industry, especially from Morbi, increased pressure on pricing and volume, heightened competition resulted in an industry-wide drop in average selling prices. For the full year OBL has registered net sales of INR666 crores in FY '25 compared to INR669 crores in FY '24, a drop of 0.4%. Consolidated EBITDA for FY '25 was INR30.8 crores, while profit after tax was INR2.8 crores. Despite these difficult conditions we had wins on cost saving initiatives and cost base improvement. The go-live of our solar power purchase agreement at Sikandrabad has lower power cost. By streamlining processes and improving existing systems, operational efficiency was enhanced, help

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