HIL Ltd Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Aditya Khandelwal - Securities Investment Management Pvt Ltd - Analyst : Yeah, hi, sir. Thanks for the opportunity. So, my first question is on Parador. So, if I look at on a YoY basis, our revenue have increased from a INR275 crore to INR288 crore. But our losses have also consequently increased from INR16 crores to INR19 crores. So, ideally, if our revenues have increased, we have undertaken cost saving initiatives, our product mix has improved. Ideally, the losses should have come down, but this doesn't seem to have happened this quarter. So, if you can elaborate, why is that not happening and getting reflected in the numbers?

Question: Aditya Khandelwal - Securities Investment Management Pvt Ltd - Analyst : And so now at what kind of revenue would this number, be around zero break even then the parallel losses should reduce.

Question: Aditya Khandelwal - Securities Investment Management Pvt Ltd - Analyst : Understood, sir. And also, just a small request if you could in the presentation, if you could just provide a breakup of revenue, gross profit EBITDA, and interest and depreciation cost of Parador. So, it will help us better appreciate the numbers. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 07, 2025 / 6:00AM, HLLT.NS - Q3 2025 HIL Ltd Earnings Call

Question: Aditya Khandelwal - Securities Investment Management Pvt Ltd - Analyst : Yeah. Sir, second question was on the roofing. So, if you can just provide some outlook because the roofing segment has been struggling. So, the Q4 and Q1 of next year are the huge quarters for the roofing segment. So, how is the demand outlook in that segment and has pricing improved? If you could just provide some flavor over there?

Question: Aditya Khandelwal - Securities Investment Management Pvt Ltd - Analyst : And Sir, just two questions here. So, with lower steel prices, this demand for our roofing products, has it impacted our demand for the roofing products? And second, is there overcapacity in the industry which is which would limit our ability to take price hikes?

Question: Aditya Khandelwal - Securities Investment Management Pvt Ltd - Analyst : Understood. Understood sir.

Question: Sanjay Kumar Elangovan - ithoughtpms - Analyst : First question on piping. PBT margins, if we compare with other players, supreme reported 8% Apollo Pipes did 3.3%, Finolex minus 5%, HIL minus 8.3%, all like to like for the segment piping, I just wanted to understand why such a huge divergence. Even if you remove the leader astral supreme, we are not even on par with the second-round players.

Question: Sanjay Kumar Elangovan - ithoughtpms - Analyst : Okay. And, and what is the margin difference between HIL standalone versus Topline or Crestia in terms of margins?

Question: Sanjay Kumar Elangovan - ithoughtpms - Analyst : Okay. And on Topline, the liabilities seem to be very significant compared to the sales and size of the company, almost INR180 crores sitting as liabilities, I think in topline. What is this and when will this come down?

Question: Sanjay Kumar Elangovan - ithoughtpms - Analyst : Liabilities in the piping segment has gone up by INR180 crores post the topline acquisition. How much of this is debt and what plans do we have to bring down the debt in topline?

Question: Sanjay Kumar Elangovan - ithoughtpms - Analyst : Okay. Okay. And second on roofing, what is the new normal margin? I think you are guiding for 12%, 13% for the full year. But going by the last few quarters, it looks like it will be high single digit margins at best going forward.

Question: Sanjay Kumar Elangovan - ithoughtpms - Analyst : Yeah. It used to be high, single digit in the non Q1quarters, but that high single digit is almost half. September, we did 4%, December is close to 5% but it's no longer 7%,8% 9%. That's what I meant.

Question: Sanjay Kumar Elangovan - ithoughtpms - Analyst : Okay. A final question before I come back on Parador. Increase in unallocable expenditure from INR20 crores to INR28 crores. What is this line item and why the sort of 40% growth? How will this number trend going forward? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 07, 2025 / 6:00AM, HLLT.NS - Q3 2025 HIL Ltd Earnings Call

Question: Sanjay Kumar Elangovan - ithoughtpms - Analyst : So, this the INR4 crores is the one-off item. The INR1.5 crores will continue. Yeah. Yeah. Yeah. Got it. Okay. I'll come back in the queue.

Question: Jiten Parmar - Aurum Capital - Analyst : Yeah, good morning. Akshat and Ajay. My question is on if you can throw some more light on what was the rationale behind the Birla new brand? And what is the plan for that? I mean, how will the branding be completely changed for at product level or if you could throw some more light and what will be the cost associated with that?

Question: Jiten Parmar - Aurum Capital - Analyst : Perfect, perfect. So, based on the previous con calls and Parador losses have definitely reduced. Now, in previous con calls, you mentioned that there will be a around EUR5 million per year saving. Now, so that essentially means around, EUR1.25 million per quarter. Now, that has that kind of happened in Q3, I mean losses but reduced. That I can see but has that exact number kind of been incorporated currently in the numbers? Were we at the same level which we had guided?

Question: Jiten Parmar - Aurum Capital - Analyst : Okay. And so.

Question: Jiten Parmar - Aurum Capital - Analyst : No, no, please continue. Sorry.

Question: Jiten Parmar - Aurum Capital - Analyst : Sure. Yeah. So how much was the inventory loss in the polymer or especially the pipe division? If I can get the number. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 07, 2025 / 6:00AM, HLLT.NS - Q3 2025 HIL Ltd Earnings Call

Question: Jiten Parmar - Aurum Capital - Analyst : Okay. I think that's good enough. Thanks, if I have any other questions. I'll definitely come back and wishing you all the best for.

Question: Jiten Parmar - Aurum Capital - Analyst : Sure. Okay.

Question: Rishabh Bothra - Anand Rathi share and Stockbrokers Institutional Equities - Analyst : Hello Sir Good afternoon. Just wanted to understand. Are there any synergies..

Question: Rishabh Bothra - Anand Rathi share and Stockbrokers Institutional Equities - Analyst : Yeah. Am I audible now?

Question: Rishabh Bothra - Anand Rathi share and Stockbrokers Institutional Equities - Analyst : Yes, I wanted to understand are there any synergies in terms of distribution network for each of the segments. Can benefit be obtained from one another? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 07, 2025 / 6:00AM, HLLT.NS - Q3 2025 HIL Ltd Earnings Call

Question: Rishabh Bothra - Anand Rathi share and Stockbrokers Institutional Equities - Analyst : I mean to ask, is there any synergy with respect to the distribution network for each of the four segments?

Question: Rishabh Bothra - Anand Rathi share and Stockbrokers Institutional Equities - Analyst : Okay. And with respect to our Parador business, do we compete with the [Greenland] in wooden flooring and laminate flooring?

Question: Rishabh Bothra - Anand Rathi share and Stockbrokers Institutional Equities - Analyst : Got it. And with respect to vinyl flooring, is the product line of responsive -- one of the product line of responsive similar or is it vinyl flooring is different?

Question: Rishabh Bothra - Anand Rathi share and Stockbrokers Institutional Equities - Analyst : Got it. And sir slightly on the last question, strategic side, we didn't -- I mean. We are not hoping that the Orient cement would be sold off from the group entity. Is there anything which can be sold off from the company, any of the segment, whether profitable or nonprofitable, anything in the pipeline?

Question: Rishabh Bothra - Anand Rathi share and Stockbrokers Institutional Equities - Analyst : Got it and the accumulated losses at Parador and how much time will it take to recoup those losses?

Question: Rishabh Bothra - Anand Rathi share and Stockbrokers Institutional Equities - Analyst : Thank you, sir. Thank you. Thanks a lot.

Question: Sanchita Sood - Robo Capital - Analyst : Good afternoon, sir. My question to you is regarding Parador. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 07, 2025 / 6:00AM, HLLT.NS - Q3 2025 HIL Ltd Earnings Call Okay. So, if I'm not wrong, you have guided for around EUR150 million revenues for Parador and FY'25. So, considering the Q3 results and industry scenario currently, do you still stick to that guidance or is there any change you'd like to make here. And going forward for FY'26 and FY'27 as well, what kind of visibility can we see for Parador, especially from regions outside of Europe? Can we get any idea on the orders or order pipeline that we have for these reasons?

Question: Sanchita Sood - Robo Capital - Analyst : Okay. So, my second the second part of my question was that for FY'26 and FY'27 as well, what kind of revenue visibility can we see for parador, especially from regions outside of Europe?

Question: Sanchita Sood - Robo Capital - Analyst : Okay. And sir, you also mentioned that around 100% of the cost optimization benefits in Parador will come by Q1 of FY'26. So, I just wanted to ask that whenever that happens, what kind of EBITDA margins can we see for Parador?

Question: Sanchita Sood - Robo Capital - Analyst : Okay. All right. Thank you so much, sir and all the best. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 07, 2025 / 6:00AM, HLLT.NS - Q3 2025 HIL Ltd Earnings Call

Question: Vinay Gupta - Previse Wealth - Analyst : Yeah. Hi, good afternoon to the team. Actually, I am concerned shareholder. I'm just trying to understand when can we actually expect the company to be profitable? I mean, last year, we were guiding off about 77%, 77.5% EBITDA margins at the console level. And FY'2626 was probably looking at double digit. Now, we are barely even, able to make profits. So, I'm just concerned when do this, and you are taking so much cost initiative that we keep on talking about last call also. There were one-time INR8 crore, INR9 crores cost that you have not taken as a severance cost. And despite those efforts, I mean, as a company, we are not able to generate profits. I mean, I understand the demand scenario. But if we keep on talking about the volume share and the market share that our volumes are increasing. But if you are selling products at a loss, there's hardly point of getting any market share. Maybe the reason why we're getting market share is because nobody is willing to sell it at such low cost. So just want to get your thoughts on the profitability, at the console level. Thank you.

Question: Vinay Gupta - Previse Wealth - Analyst : Yes.

Question: Vinay Gupta - Previse Wealth - Analyst : Sure. Sure. Just you only point out, I think that we are profitable for this year primarily because of the other income, which is probably I think the sale of assets that we did on the operating level, we are barely making any profit. So, I get your point. I'm just trying to clarify that we are profitable because we did one off transactions.

Question: Vinay Gupta - Previse Wealth - Analyst : Sure. Sure.

Question: Raaj Macwan - Arjav Partners - Analyst : I'm audible.

Question: Raaj Macwan - Arjav Partners - Analyst : Hello, am I audible now?

Question: Raaj Macwan - Arjav Partners - Analyst : Sir, how much was the overall price drop in quarter three FY'25 compared to quarter two FY'25?

Question: Raaj Macwan - Arjav Partners - Analyst : Overall, our portfolio level, blended level.

Question: Raaj Macwan - Arjav Partners - Analyst : All right. I'm going ahead for FY'26 and FY'27. How much of this sales growth are we expecting?

Question: Raaj Macwan - Arjav Partners - Analyst : All right. And Sir when, when we say we want to grow in high team, so where do we see growth coming in from? Which segment would be the highest contributor of growth for us?

Question: Raaj Macwan - Arjav Partners - Analyst : And sir, how much is the PVC price per kilo right now?

Question: Raaj Macwan - Arjav Partners - Analyst : Earlier, you had commented if I'm not wrong from July to November, it was down almost 70% right?

Question: Raaj Macwan - Arjav Partners - Analyst : Understood. All right, sir. All the best. Yeah. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 07, 2025 / 6:00AM, HLLT.NS - Q3 2025 HIL Ltd Earnings Call

Question: Aditya Khandelwal - Securities Investment Management Pvt Ltd - Analyst : Yeah, I thanks for the follow up. Just two questions. Sir, we had sold excess land this year as well as last year. So do we have any further excess land which we can sell? And what would be the value of that?

Question: Aditya Khandelwal - Securities Investment Management Pvt Ltd - Analyst : No, I understand, sir. Do we have any excess land available for?

Question: Aditya Khandelwal - Securities Investment Management Pvt Ltd - Analyst : Understood, sir. And sir, what would be the losses which put will be making now?

Question: Aditya Khandelwal - Securities Investment Management Pvt Ltd - Analyst : Understood. Understood. Sure, sir. Thanks for answering my questions.

Question: Navneet Bhaiya - Individual Investor - Analyst : I wanted to understand your polymer numbers a little more in detail. So last year you had done a top line of INR535 crores in the polymer division and then you had acquired Crestia, which was at the time of acquisition approximately INR330 crores in Topline. So that gave a total of about INR860-odd. This year, so far, you've done INR528. So, most likely you're going to end up with a decline of maybe 15% to 20% if I add Crestia to your base last year. So, do I get the numbers? Right?

Question: Navneet Bhaiya - Individual Investor - Analyst : Okay. So based on the backdrop of, the industry leaders showing a marginal growth, companies more of your size declining by maybe 0 to 5%. So, have you lost market share as compared to the industry? And then if that is, so why are you, sounding so bullish on this segment given this year you seem to have lost or you seem to have declined more than the industry?

Question: Navneet Bhaiya - Individual Investor - Analyst : Understood. So just to understand it, Crestia saw a decline in top line of approximately how much so far this year as compared to last year.

Question: Navneet Bhaiya - Individual Investor - Analyst : 40% to 50%.Okay. And at the time of acquisition was this, I'm guessing it was not anticipated, right that the government spends would be much lower for the year.

Question: Navneet Bhaiya - Individual Investor - Analyst : Understood. My second question is on your roofing business. Your commentary, initial commentary as well as in the presentation, you mentioned that there's a decline in the market size. Now, can you delve on this a bit more? Do you think this is a structural decline where the cement roofing sheets are being replaced by some other material? Or do you think it's a one off year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 07, 2025 / 6:00AM, HLLT.NS - Q3 2025 HIL Ltd Earnings Call

Question: Navneet Bhaiya - Individual Investor - Analyst : Understood. Thank you so much. All the best.

Question: Sanjay Kumar Elangovan - ithoughtpms - Analyst : Hi. Thanks for the follow up. Just a bunch of questions on Parador. Do you expect more cash burn in Parador? Our liabilities in Parador have come down QoQ. So, safe to assume this is the peak death of the cash burn in Parador.

Question: Aditya Khandelwal - Securities Investment Management Pvt Ltd - Analyst : Can you share of non-Europe sales in Q3.

Question: Aditya Khandelwal - Securities Investment Management Pvt Ltd - Analyst : And for other segments, you said that you want to grow at high teams. Parador, can you maintain this high single digit sort of growth going forward in FY'26 as well or can there be some sort of [accel]? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 07, 2025 / 6:00AM, HLLT.NS - Q3 2025 HIL Ltd Earnings Call

Question: Aditya Khandelwal - Securities Investment Management Pvt Ltd - Analyst : Okay. And just a couple of feedback, see probably the board, the promoters, they're all convinced of the turnaround, but we don't carry the same level of convictions. I mentioned this last time to Rohit and few other colleagues in the call mentioned it. Why don't you give more information to investors like volume growth, cross margin, EBITDA for each segment because half the time the call is spent on such details, and you could give some sort of EBITA bridge to highlight all the cost initiatives you seem to be doing in all the segments. That's one and second at INR1,000 final crores market cap, I would evaluate buying the whole company that is if I had the money to. Are the promoters looking to increase stake, given the selling other businesses and given HIL's valuation. I think this is a great price and it would be a great sign for us investors and the market as a whole. So, request you to pass it along to Avanti.

Question: Aditya Khandelwal - Securities Investment Management Pvt Ltd - Analyst : All the best.Byebye.

Question: Sanchita Sood - Robo Capital - Analyst : Yes, thanks for the follow up. I'd just like to reiterate what a few previous participants had said about providing segment wise EBITDA margins in our quarterly presentation. Having said that, can I get the segment wise EBITDA margin for nine months in Q3?

Question: Sanchita Sood - Robo Capital - Analyst : All right. Thank you Sir.