Hindware Home Innovation Limited — Q3 FY26 earnings call

So there is an impact of approximately INR8 crore to INR9 crore of products that have been discontinued, which still appears in the base for the previous year. So there is a marginal impact there. But on the growth momentum, we are confident now that with our strategy of focusing on a few categories, which is basically kitchen appliances so chimneys, cooktops, hobs, sinks, built-in microwaves and ovens, etc., and coolers only through the e-commerce channel and water heaters. So with that very clear strategy to focus on these products. We have a clear path forward to growth, both in top-line and profitability. Our kitchen appliances business, overall, we expect a CAGR of 15% to 20% over the coming 2 to 3 years in this business.

Clarified the impact of discontinued products and provided specific growth guidance for the key Kitchen Appliances segment.

Asked by Madhur Rathi

Yes. See, if you talk about the competition, they are into this field for a long time, and they have various manufacturing capacities across the nation. We are just operating with one facility at our Hyderabad plant. We are expecting that in the last quarter, we would come up with our facility in Roorkee because North, we are not able to sell agricultural pipes and SWR pipes because of the freight factor. What happened is, due to certain statutory obligations and approvals, it got delayed. So we were not able to hold on to that market, the North market.

Explained the operational and logistical challenges that led to volume decline in the Pipes segment and highlighted the strategic importance of the new Roorkee plant.

Asked by Parikshit Gupta

As of April 1st, this is only a proposal. There is no government decision yet, and nothing has been finalized. It may take more time. I don't see anything happening soon. It appears that the secondary market has started picking up, mainly because there was no material available earlier. As a result, the market has begun to grow. After a long period, PVC resin rates, which were INR 94 in July 2024, bottomed out over two years to INR 68. Now for the first time, we are seeing a price hike of almost around INR7.5 in just 15 days' time. So things look positive.

Provided an update on the PVC price trend and the potential, though uncertain, impact of Chinese export restrictions, indicating a positive outlook for the Pipes business.

Asked by Parikshit Gupta

Yes. We don't have any plans of any expansions further. The capex, which has been incurred at Roorkee is already over. We have commissioned the plant. We expect the North market to pick up from this facility, which has already started taking place. In future, in the near 2, 3 years, we don't have any plans of putting up any further capacities. We believe, as such, we have a huge capacity in Hyderabad, and we have installed a capacity of 12,500 metric tonnes in Roorkee, and we can ramp it up. Therefore, we do not see any reason to pursue new facilities or incur additional capex at this stage.

Clarified that no further significant capex is planned for the Pipes segment beyond the recently commissioned Roorkee plant, indicating efficient capacity utilization.

Asked by Fenil Brahmbhatt

This is not part of HHIL. This factory sale was part of our joint venture with Groupe Atlantic. We had set up a water heater factory there. As you can see from the results, initially we were unable to utilize the factory as anticipated, given how the market behaved. Therefore, a joint decision was taken to dispose of the manufacturing operations, which was successfully executed. The proceeds were used to repay HPL's entire debt in December. Going forward, this will operate as a trading model.

Explained the strategic divestment of a loss-making JV asset, its impact on debt reduction, and the shift to an asset-light trading model for that specific product category.

Asked by Fenil Brahmbhatt

So, in quarter 3, we grew at 14.3%. So it was a healthy double-digit growth in quarter 3. We expect to continue that momentum in quarter 4 of this financial year. And going forward, the ambition is to stay in the mid-teens in terms of growth in the Bathware business. And the profitability, so what we are working on is a couple of things to improve profitability further. One is really focusing on the product mix. So I mentioned that all the new products that we are launching are higher average selling price (ASP) as well as higher margin than the existing range that we have. So we're focused a lot on new products at higher margins. We are also focused on improving productivity and efficiency at our plants.

Detailed the multi-pronged strategy for the Bathware segment, focusing on product mix, operational efficiency, and sustained mid-teens growth.

Asked by Rahil Shah

So I think in this financial year and particularly in the last couple of quarters, we are growing ahead of the market. So we are gaining market share. The strategy that we are following is what I talked about, that is new product developments and launching premium faucets and sanitaryware ranges. So the focus has really been on creating differentiated products across all of our brands. So we have Hindware, which is mass. We have Hindware Italian Collection, which is mass premium, and we have Queo, which is premium. So across all 3 brands that we have, we are making sure that we have differentiated products as far as possible. So big focus in terms of design, aesthetics, performance. So that is really helping us to differentiate in the market and helping us to grow ahead of the market. The other thing that we've really focused a lot on is customer service, and we believe that, that is actually a big differentiator. So we now have invested. So, for example, consumers can reach out to us on WhatsApp in 9 Indian languages.

Outlined the company's competitive strategy based on product differentiation across multiple brands and enhanced customer service, leading to market share gains.

Asked by Kabir Leelani

At this point of time, the price increase that we've taken, so we've taken about 15% to 17% in faucets and we've taken about 5% to 6% in sanitaryware. So we believe that, that's enough to cover whatever raw material impact there is as of now. If it goes up substantially further, then we'll have to look at another price increase. But at this point of time, we don't believe in the short term, we will need to do that, but we'll keep an eye out.

Provided clarity on the current pricing strategy's ability to offset raw material costs and indicated a proactive stance for future adjustments if needed.

Asked by Akshay Chheda