ORIENTBELLNSEQ1 FY26June 30, 2025

Orient Bell Limited

5,437words
99turns
13analyst exchanges
3executives
Management on call
Aditya Gupta
CEO – ORIENT BELL LIMITED
Anuj Arora
CFO – ORIENT BELL LIMITED
Suyash Samant
STELLAR IR ADVISORS
Key numbers — 28 extracted
INR142.5 crore
wever, trade discounting has increased, leading to a lower ASP. OBL has registered a net sales of INR142.5 crores compared to INR147.3 crores in quarter 1, a drop of 3%. Our gross margins for quarter 1 FY '26 h
INR147.3 crore
increased, leading to a lower ASP. OBL has registered a net sales of INR142.5 crores compared to INR147.3 crores in quarter 1, a drop of 3%. Our gross margins for quarter 1 FY '26 have further improved by 50 b
3%
has registered a net sales of INR142.5 crores compared to INR147.3 crores in quarter 1, a drop of 3%. Our gross margins for quarter 1 FY '26 have further improved by 50 basis points and now stand at
50 basis point
rores in quarter 1, a drop of 3%. Our gross margins for quarter 1 FY '26 have further improved by 50 basis points and now stand at 36.5%. Tight control on working capital has also helped improve
36.5%
Our gross margins for quarter 1 FY '26 have further improved by 50 basis points and now stand at 36.5%. Tight control on working capital has also helped improve our cash conversion cyc
INR5.6 crore
ys versus 35 days in quarter 1 of last year. Consolidated EBITDA for quarter 1 FY '26 stands at INR5.6 crores and EBITDA margins have improved by 60 basis points over last year. Net debt position also staye
60 basis point
solidated EBITDA for quarter 1 FY '26 stands at INR5.6 crores and EBITDA margins have improved by 60 basis points over last year. Net debt position also stayed constant at a comfortable INR9.5 crores with healt
INR9.5 crore
proved by 60 basis points over last year. Net debt position also stayed constant at a comfortable INR9.5 crores with healthy cash balances. We have stayed on course towards investing in brand building and con
2%
ustomer experience and brand building continues to help drive vitrified mix, which also gained by 2% over last year to reach 58% of our sales. While salience of GVT increased by 1.6% over last year
58%
d building continues to help drive vitrified mix, which also gained by 2% over last year to reach 58% of our sales. While salience of GVT increased by 1.6% over last year and now stands at 40.1%. Thi
1.6%
ch also gained by 2% over last year to reach 58% of our sales. While salience of GVT increased by 1.6% over last year and now stands at 40.1%. This is now similar to our industry peers. To summarize
40.1%
reach 58% of our sales. While salience of GVT increased by 1.6% over last year and now stands at 40.1%. This is now similar to our industry peers. To summarize, OBL has improved on cost quality, bra
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Guidance — 17 items
Suyash Samant
opening
“The management will be sharing the operating and financial highlights for the quarter ended June 30, 2025, followed by a question-and-answer session.”
Aditya Gupta
opening
“Anuj will be based at our corporate office in Delhi reporting to me.”
Keshav
qa
“I wanted to get a sense on the demand, how has been the demand in July and when you expect the demand to pick up like the real estate cycle has been strong, which we have been talking.”
Aditya Gupta
qa
“I wouldn't go by a percentage guidance, percentage is totally dependent on the denominator.”
Aditya Gupta
qa
“Whether it will be 3.7% or 4% or 3.5% little bit, but ballpark to give you a sense I think we will be around this range and we will continue to invest in branding.”
Moksh
qa
“And so the consolidation you expect would take a lot longer time because after 8 years, we are seeing this kind of consolidation?”
Rohit
qa
“And what kind of capex are we looking forward to in this segment going forward?”
Gunit Singh
qa
“So sir by when can we expect to achieve optimal utilization levels and like you mentioned economies of scale, do we see any margin benefits when we reach the optimal utilization levels?”
Gunit Singh
qa
“So what kind of EBITDA margins can we expect at the optimal utilization levels?”
Gunit Singh
qa
“And so I mean, what are the main constraints for ramping up and by when do you expect to ramp up to optimal utilization levels?”
Risks & concerns — 6 flagged
See first quarter is always a historically weak quarter for the industry.
— Aditya Gupta
And that is due to because demand slowdown domestically and also because of exports not being that -- export demand not being that.
— Moksh
As I said earlier, people are being cautious.
— Aditya Gupta
So that negative drag on our volumes is now much lesser than what it was, say, last year or the year before.
— Aditya Gupta
Now there are so many tiles, so many sizes which are available that the dealer is finding it very difficult to predict which one will sell and all.
— Aditya Gupta
So it is very difficult for the dealer to predict what will sell and what will not sell.
— Aditya Gupta
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Q&A — 13 exchanges
Q
Thank you for the opportunity. My first question is in terms of, have you seen any improvement in terms of our volumes? And if you could also give us our utilization levels for this quarter, that would be really helpful.
Aditya Gupta
We are not able to hear you. A lot of background noise is there.
Q
Is it any better?
Management
Q
My first question is on the utilization. Could we have what is our utilization for this level for both our capital plant and the facility?
Aditya Gupta
We can't hear you. I’ll join back the queue.
Q
Thank you for giving an opportunity. I wanted to get a sense on the demand, how has been the demand in July and when you expect the demand to pick up like the real estate cycle has been strong, which we have been talking. So what is stopping the demand to pick up? And lastly, is it something like unorganized Morbi gaining market share? How are you reading the market situation?
Aditya Gupta
Thanks Keshav. See Keshav, see demand was, if you talk about exports, I talked about a couple of things which are impacting us. One of them was export volumes. So we saw actually that May '25 was better than May '24. That is the last month for which official data is available. Checks in Morbi tell us that June was also better. But from July onwards, again, there is some pessimism in the market because of the fuel tariff wars and uncertainty. Almost 7% to 8% of our tile exports Indian tile exports will land up in the U.S. So we don't see an immediate recovery in demand. One silver lining is tha
Q
Thank you for the opportunity. My question is, could you please evaluate on Orient Bell’s entry into engineered stone segment? Also, do you have any plans to tap the high-value potential gulf market in the future?
Aditya Gupta
So two questions. One is about engineered stone. So we don't have that product today. What we find is that bulk of engineered stone is going into export that too into the U.S. market and all. So not very sure that we would get into this category. However, we do sell an increasing amount of large slabs, 6 feet by 4 feet, 2.5 feet by 8 feet, the volumes of which have been growing nicely. Your second question was about the UAE market and all. So we have historically not been into exports. Export is not a branded play at all. Exports from India are typically price-led exports, not brand led and al
Q
Okay. So my question is on our margins. We have taken a slight hit on margins compared to the industry leader. So I wanted to understand the scenario on a relative basis, I mean, are we taking a hit on our ASP or what is exactly happening?
Aditya Gupta
What I understood your question was that this question was on margins. You said that our margins have been sluggish. Is that what you're saying? Yes, yes. So you're talking about EBITDA margins. I think, Ashwath, this is basically where the scale comes into play. The market leader has had much better margins than us. And why only tiles, this is something which plays out in every industry, the market leader with the benefit of volumes and synergies and economies of scale, will have a better margin. Just like to point out to you that our gross margins historically have been among the best or may
Q
Is it any better now?
Aditya Gupta
Ashvath there is much disturbance. I think we should go to the next person.
Q
I wanted to ask our marketing spends are currently at 3.7% for this quarter. So how are they for the next 9 months, are we planning to increase the marketing spend to 5% or we are trying to maintain it.
Aditya Gupta
Can you repeat the question, please? Yes. So our marketing spends are currently at 3.7%. So are we planning to increase our marketing spend at maybe 5% for the next 9 months or the spends will continue? I wouldn't go by a percentage guidance, percentage is totally dependent on the denominator. So what I would tell you is we have continued investing in branding. We have spoken about this I think almost 1.5-2 years back. And we have been on TV and we also aggressive on digital and also very aggressive on our tools. We have taken building Orient brand as a priority area for us. So we continue to
Q
Sir, I just had one question. Recently, we got into a new segment in the tile adhesives segment. So just wanted to know our rationale behind getting into the segment? And what kind of capex are we looking forward to in this segment going forward?
Aditya Gupta
So, Rohit, we are not looking at any capex immediately. We are getting this manufactured as per our specifications from partners. We would evaluate our capex on this as the business goes. Anyway, this is not a very capital intensive business. The rationale is that we have a large distribution network and customers need tile adhesive and other bonding chemicals and all. And there was a lot of demand from our dealers into this. And this is -- as more and more tiles are becoming vitrified, people are -- this is a growing market and it’s a good time to get into it. Fair enough, sir. Thank you so m
Q
I would like to understand what's the current capacity utilization?
Aditya Gupta
So quarter 1, just give me a second. I've -- so I think capacity utilization would be about 60% in quarter 1. So sir by when can we expect to achieve optimal utilization levels and like you mentioned economies of scale, do we see any margin benefits when we reach the optimal utilization levels? And if so, can you quantify what the steady-state EBITDA margins can be even if we consider the current, I mean, scenario and the current gas pricing. So what kind of EBITDA margins can we expect at the optimal utilization levels? So we don't give out forward estimates on EBITDAs or revenue, but conside
Q
Sir, good evening. My question is regarding has there been price cuts in this quarter due to the environment that we are operating compared to last quarter? And if yes, then we have still seen an increase in the gross margin. So what would be the reason for that?
Aditya Gupta
So yes, Rohan, there have been price cuts. As I mentioned in the opening statement, our average selling price is lower than what it was. And bulk of that is because of more aggressive discounting. To your second question, why our gross margins are better. I think our gross margins are better because of very frugal manufacturing and other cost basis we have spent on marketing, yes. We continue doing that. We had TV campaigns on in the first quarter of this year. But our wastage and our control on manufacturing cost has been very, very tight, which has helped us give better gross margin. Right.
Q
Ashwath, may be your line was very bad. Maybe you can just ask one question at a time and I'll try to answer it.
Ashwath
Yes, am I audible? Can you hear me now? Yes, yes, I can. Okay. So I'll just go one by one. Number one is in terms of what is our strategy for Tier 2 and Tier 3 markets since we have decent capacity in ceramic. And as far as some channel checks are concerned, as far as some channel checks are concerned, we have had talks of ceramic being still in demand there in Tier 2 and Tier 3 markets. So is that true one? And what are our -- what is our strategy going forward? So, Ashwath, what we -- you asked for strategy specifically on ceramic. So what we have done this year is we have decided on a few s
Q
Thank you, everybody. Thank you for being part of the call and look forward to hearing from you all in the next quarter. Thank you.
Management
Speaking time
Aditya Gupta
37
Moderator
15
Moksh
10
Ashwath
8
Aswath
6
Rohan
6
Gunit Singh
5
Keshav
3
Preemal Dsouza
2
Ashvath
2
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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 of Orient Bell Limited, Mr. Aditya Gupta, Chief Executive Officer, who will represent Orient Bell Limited on the call. The management will be sharing the operating and financial highlights for the quarter ended June 30, 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 to reflect developments that occur after a statement is made. I now hand over the conference to Mr. Aditya Gupta. Thank you, and over to you, sir.
Aditya Gupta
Thank you, Suyash. Good evening, and welcome, everybody, for our quarter 1 FY '26 earnings call. As we saw in the last year, demand continued to remain subdued in this quarter as well. Heightened competition has forced a renewed focus on cost savings. There was some reduction of freight internationally, resulting in better exports during May and June. However, the 3-month moving average of exports is still below FY '25. Government projects, execution, gas costs, geopolitical environment and tariff wars continue as decisive factors impacting demand across the building and construction industry. At OBL, we have continued focus on process and our mission to make tile buying easier for the end consumer. Multiple initiatives have been successfully launched for enriching the customers' buying experience. Some of these are launch of an AI-based visualization tool to aid our dealers convert walk-ins. This tool has already crossed a million-plus views on Insta and doubled usage in the activated
Anuj Arora
Thank you very much, Aditya. This is my previous experience. I'll try and basically deploy all those process improvements and controls that I've done in my previous organization so that we do a sustained growth in OBL as well. Thank you so much.
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