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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Ladies and gentlemen, good day, and welcome to the Asian Granito India Limited Q1 FY '21 Earnings Conference Call.This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectation of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded.I would now like to hand the conference over to Mr. Praful Gatani from Asian Granito India Limited. Thank you, and over to you, sir.
Thank you very much, and welcome to all, and very good afternoon to all of you. Thank you very much for being here on this day for a small, brief presentation from Asian Granito, AGL.This last quarter, as you -- we all are aware, that have been very, very different than the normal business quarters we talk about. There have been bit different developments which can be very, very positive to some of the industries like us also sometime and some have faced some kind of troubles and speed breakers in their growth.However, as far as AGL is concerned, the basic numbers were very stressed because of the physical nonavailability of the movement and transportation, mainly, and nonavailability of the labor, majoritively. However, the company has remained very strongly in terms of order booking conditions and proposed orders and future deliveries are concerned.In the first quarter, our sales was low. This happened mainly due to the lockdown in India and lockdown world over. Could not get enough transportation to move our goods in India and abroad, internationally. Hence, the quarter 1 has resulted into a degrowth of 58.5% approximately and our turnover for -- initially was around INR 129 crores against Q1 of '20, INR 312 crores.However, the positive side during this is very strong and good part with the company is that we had enough orders and material was ready, and which we have started supplying as immediately after the lockdown was opened and started, and which has given us a very high boost in our sales. After the month of July itself, like the August month onwards, we have been almost back into the action completely 90% although our peer group and competitive companies are still some way of managing or struggling to bring back their operations so far.I'm proud to announce that under the leadership of our Chairman, Mr. Kamlesh Patel, we could manage to operate our -- all the plants very, very -- at very early stage. And we were the first one in India who started operations in all the manufacturing units at first. However, most of the units, they added on their operations later on. And because of this advantage, a step ahead movement over others, we started our deliveries also very quickly, internationally as well as domestic also.So this was a very good leadership taken by our Chairman, Mr. Kamlesh Patel, and the very sharp execution of the strategy was done to get the labors back in action, get the vendors back in fold, get the suppliers and our dealers back in action. So this was done with the help of marketing team and with the help of operational team.However, as you would be more keen to know and understand about the results, results have been, as I said, it was under stress for the first quarter, where EBITDA also went into negative, and our PAT also remained negative. A good part of the company as of now is that we are almost back in action completely. And looking forward for a very, very significant growth in coming quarters, rest of the quarters, including the second and third quarter itself, where most of the companies are still trying to get into operations completely.We have a very strong and active marketing team. Because of their active participation, we could get a substantial number of orders in hand to execute, which is globally also and local also. Asian Granito, basically, with the brand of AGL, have always been focusing on B and C class city rather than focusing on major metros. And this has given an immense advantage at this stage because the labor movement, labor transformation from metros has gone back to B- and C-graded cities and rural areas, which is our peer market, which is our main core market rather, rather, I would say, a core market, sorry. And in that market, the activities are comparatively much better than in metros because, one, the availability of manpower is there, the availability of material is there. And second, people are having much more time available to do: one is reconstruction of houses; second is replacement of their floorings and walls; and third is constructing of their new houses.And because of the government policy, lot of rural housing, sanitation under the Swachh Bharat Abhiyan also, a lot of sanitation activities are taking place -- are being taken place. And budget housing is in a big swing, is up there. So we directly fit into that category where these kind of markets we are talking about. And we are having a very strong hold in these markets. So hopefully, the coming quarter, all the 3 quarters, we would have very, very strong numbers.And we would be very -- we would be showing a very strong path of growth in coming quarters. That's what I'm very, very sure. Considering the sales what we had in last -- specifically, in the month of August and July, it gives us lot of confidence to see that we are back in action and we are back in almost at a neutral space.So this is what it is about the domestic market and the post-pandemic situation. But at the same time, I would like to mention here that AGL has also started focusing a lot on international global market also. This is mainly due to the advantageous place we have as an Indian product in the world market. Recently, you all are aware that there is a big showdown going on with China and Chinese product. Most of the countries either ban their products or they have levied a very high amount of anti-dumping duty, including America.U.S.A. also has laid down lot of antidumping duty, especially on our products, which are like similar products to tile and quartz, which is our forte, and we have been supplying to other countries also. But there is generally a substantial large amount of gap is available in the market.As per my knowledge, the world over, China has been the largest exporter of all kinds of tiles, quartz and synthetic marble, man-made marble, to the world. But in the recent last 4 months, the change has completely reversed. Most of the countries where China has a major role and their neighboring countries also like Thailand, Taiwan, then Indonesia, Philippines, Malaysia, they were having a major market share in these countries. Those countries have turned their faces to China, and they have reversed them. And now they are looking forward for other countries like India to supply them.I'm proud to announce that there have been several new contracts signed with these countries, specifically with Thailand, very large amount -- a very large one has already been signed with them, we're also putting an -- a JV in -- to be there in their market, and they would be outsourcing tiles across end markets and marketing with their brand for 21 countries, as per our information as of now.Also, the company has started exporting to the other Asian countries, like, as I said, Indonesia, Malaysia, Thailand, then Japan, Korea and Middle East. So these countries where there have been a dominating place from China, we would have a much stronger role to play therein and we would definitely capture, as an Indian company, as an Indian supplier, a better market share.With us, other companies are also focusing there, especially organized companies, I'm talking about the organized sector companies, which are like top 10 companies, if I can say, in these market. But our advantage is geographical location. We are comparatively much more closer to the companies which are based in North or in Central India.We are very, very close to the port. Our cost efficiency is much better than others. And because of that, definitely, we become very, very competitive in international market.So this would be another addition where we are looking forward very positively to have a better chunk in the total portfolio of export sales also. And this year, I think we would be having a much better sales as a segment, as an export segment in the total market. We would be thinking in coming years to cross the last year's sales. Not only cross, I think our target is to double the sales last year, what we have made it in the export market.With the orders in hand, it looks possible to us that we would be able to achieve the same. U.S.A. is also one of the markets where we are focusing. We are opening our own [indiscernible] centers. A couple of places, already it has been done and implemented and rest of the places, they're getting processed where we would have our own business centers, stock points also. And this would help us to penetrate a very large -- a huge market in U.S.As per our knowledge and our record, China used to sell more than INR 6,000 crore tiles, only tiles, okay. I'm not talking about the quartz, quartz is a separate segment itself. The tile itself is over INR 6,000 crore market is there in the U.S. itself. And the rest of the market, if you compare about -- if you talk about Canada, Australia and other European countries, China had a significant market share. This share would be divided now among Indian companies and Asian companies mostly because we would be starting export to them.And the trends are already there. People are coming to us on online. They are asking us. And instead of asking for the physical samples and physical quotes and everything, most of the things, thanks to this pandemic, has been converted into digitalization. Our company has gone a big way into digitization of arranging samples, arranging the feedbacks, arranging the quotes, arranging all the support system to them and a virtual visit to the factory or virtual display to them, we are arranging. Because of this, we are able to close a lot of good deals from the international market. And hopefully, this coming quarter would give us a very high amount of sales from export market also.So this is a small brief, I think, from us. And now it's open to the floor for any other questions. With us, I have our Chairman, Mr. Kamlesh Patel, my Co-Director, Mr. Rutvij; and our CFO and our analyst also here in the meeting. So any question is invited. Thank you very much for a patient listening to me. Thank you very much.
[Operator Instructions] We take the first question from the line of [ Ankur Agarwal ] from [ RC Solutions ].
[Foreign Language] U.S. market [Foreign Language] China [Foreign Language] anti-dumping duty [Foreign Language] Indian quartz...
I'm sorry, I could not hear you at all because there is a lot of disturbance in the voice. Can I request you to please repeat the question? Can I request you please repeat the question because it was not audible to me?
Hello, am I audible?
Yes, it's better, it's better, now better.
[Foreign Language] U.S. [Foreign Language] anti-dumping duty China [Foreign Language] quartz [Foreign Language] India export [Foreign Language] company [Foreign Language] export [Foreign Language] quartz in U.S. [Foreign Language]?
You have an excellent question. See, as an Indian, there is an anti-dumping duty on Chinese products. And it goes up to as high as 700% also from -- on all the flooring and quartz, all products, which is including tiles and quartz also. So advantage -- we are getting advantage in a big way. And as you must be aware that we are adding production of quartz in coming days also. So we are getting a much better share in U.S. and especially quartz is helping us in getting market for tiles also in the U.S. So this is kind of a first step -- stepping stone in U.S. market, which we have already detected and we have already a place there. So [indiscernible] date, what you were saying that anti-dumping duty plus an anti-China movement, which is going on in U.S. is helping us because our quality is equally good, and sometimes it is better than some of the Chinese products, and our prices are very, very competitive. So now we are getting substantial good feedback and support and sales from U.S.
[Foreign Language] export [Foreign Language] credit [Foreign Language] company [Foreign Language] quartz [Foreign Language] U.S.A.?
Quartz, we are expecting something around -- over INR 100 crores we will achieve definitely this year. Maybe in the last 3 months, we will get something better, last quarter of this year, so it will -- it may go up also. But minimum like, we will cross INR 100-plus crore in this year.
Last year, [Foreign Language] financial year '20 [Foreign Language] quartz, sir?
Quartz may -- standalone, quartz itself, it is going to be a substantial growth because last time, the growth was joint. We've got another company also with us. It is called Camrola. So our share was very small. But this time, it is stand-alone AGL itself, our own brand, our own product, our own company. So we have a much better growth in this year.
[Operator Instructions] The next question is from the line of [ Deepak Mehta ], individual investor.
Deepak-bhai, good evening. How are you?
Good, sir. Good, sir. I hope you and everyone is doing well.
We are very well and we hope your family and you all are doing well. And you're sitting in Mumbai, so -- I think you're from Mumbai. So we are more concerned about you all guys who are from Mumbai.
Yes, sir. Thank you. Thank you once again, sir. So my question is about quartz and the U.S. market only. So what is the margin for the U.S. market, sir, for -- in the quartz and tile market?
See, EBITDA margins are substantially is higher than other markets in U.S. because U.S. marketing system is very different. They keep a very high margins normally for themselves also as well as for vendors also. So EBITDA margin is almost like 25% plus than the local other markets for quartz. I'm talking about only quartz, right?
Yes, sir. Yes, sir, for quartz specifically.
Average EBITDA margin, it comes to around -- around 10% to us, like for the basket of product -- basket of the product. Because some products are like a vanilla ice cream, we have to sell it sometime, which is like almost negligible margin we get it. But to get the whole basket being supplied there, we have to supply everything from vanilla to flavored this thing.
Okay, okay. And to capture the market, are we willing to negotiate on price? Or we are willing to increase the price? Is there any strategy as we have good opportunity due to anti-dumping on China? So what is the long-term opportunity and our company strategy, sir, to capture the maximum market share?
Definitely, we would not think on increasing the price right now because this is the time to make a foot base there, okay. What we are thinking is to make a much stronger network, much stronger penetration. So we would like to hold on a price and keep it same and rather increase the volume. So last year, if you see, our volume on export market was something around -- consolidated volume was around INR 158 crore, okay, which includes the U.S. market also. This year, our target is almost double, okay? And this can be done with a similar quality and quantity we are giving. At the same time, the prices is maintained because in international market, if you keep changing, every month or every quarter, prices, it gives a negative signal. So we need to be very consistent. So at least for time being, I don't think this would be wise enough to increase the price.
Okay, okay. And 1 last question, sir. So how is the demand in the Q2? And how it is going in this July and August? How is the demand in the U.S. market for quartz?
Deepak-bhai, as per our knowledge, demand has started opening up, but U.S. is comparatively slower than India as of now, okay. Our Indian market has grown up very, very fast. And we opened up all the factories that I mentioned and our sales, by God-willing and with God's grace, has been very good this last 2 months and this month also itself, month of July and August this month. And the U.S. market has opened up, but definitely the -- not at the same pace as India has opened up and resumed.India market has opened up mainly because of this B and C class cities, which are like, it's still very safe and not much of the issues are there as related to COVID pandemic because the major issue which we see of this COVID, it is like in the metro cities and A class cities, if you can say. So that is another advantage that we have because [Foreign Language] market [Foreign Language] villages [Foreign Language] rural areas [Foreign Language], so there is hardly any effect of this pandemic now.
[Operator Instructions] The next question is from the line of [ Ankur Agarwal ] from [ RC Solutions ].
Sir, [Foreign Language] INR 100 crore [Foreign Language] this year [Foreign Language] peak capacity [Foreign Language] total quartz [Foreign Language]?
Ankur-ji, can I request you to repeat the question, again? Voice was not clear, so I can -- [Foreign Language] please [Foreign Language].
[Foreign Language] total capacity quartz [Foreign Language]?
Capacity, we are having 3 production lines. And in terms of amount is there, so we can make something around INR 150 crore approximately. I mean, if we convert this [Foreign Language] it's very difficult to convert it in terms of money because it depends on thickness, then color, and finish, something like this thing. But I'm just giving you an idea that the 3 lines can give us, if we take something like a standard 15 mm thickness kind of a thing, then can give us around INR 150 crore turnover.
And just to add, we have a proposition to set up a new unit, which should be operational and commence by the next 24 months. This will actually augment the existing capacities. So roughly, you could add up to -- from INR 110-plus crores, around INR 150-odd crores, which should -- I'm not able to give you a ballpark figure in terms of crores, but in terms of square meters, we should be doing significantly better or almost 2.5 to 3x the existing capacity.
Absolutely, absolutely.
[Foreign Language] total capacity [Foreign Language] domestic [Foreign Language] export [Foreign Language] maximum quartz [Foreign Language] export [Foreign Language] domestic [Foreign Language]?
Domestic market is still not grown up. It's very small. And majoritively, we are focusing on Western market, which includes, as I said, U.S.A. So I think domestic would be always less than 25% and 75% would be export market.
And we actually export to more than 78-odd countries, so -- which is excluding U.S.A. So we are exporting tiles, quartz, marbles, et cetera. But for quartz, in particularly, if we add on to the U.S. market, which is roughly a INR 5,000 crore market, and our sales are virtually at INR 110-odd crores and we try to substantiate that or increase our allocation to a specific market like U.S., you could do the numbers. The ballpark figure is -- or the range is very wide. As a result, the management has taken a decision that over the next 2 years, we should have additional or augmented capacity to the existing quartz segment.
[Foreign Language] books [Foreign Language] debt [Foreign Language]?
The total debt in...
Total debt is INR 330 crores.
INR 330 crores.
Which is including working capital.
Everything.
Total.
[Foreign Language] capital expenditure [Foreign Language] debt [Foreign Language] reduce [Foreign Language] plan [Foreign Language]?
Definitely. I mean we are working on some comprehensive formula to reduce our debt, and this would be seriously we will be thinking. Our Chairman has already given us a pathway to see that in coming 1 year, at least in the next 12 to 18 months, there is a drastical reduction in debt you will see. We are working on that.
[Operator Instructions] Next question is from the line of Sunil Shah from Turtle Star PMS.
Sir, my question is on the competitive landscape in terms of the players from India who can do this quartz export business? So we are there. Who else -- who are the other ones? And the opportunity size of the U.S. market? If you could give us some understanding on the opportunity and the players? And how are they placed in terms of what advantage they have, what advantage we have, et cetera? If you could give us an industry perspective on quartz export, please?
Sunil-bhai, I think you're very right. There is a great opportunity because the quartz market basically was dominated by China, followed by Italy, Spain and then India used to come in. And India was almost like on sixth and seventh number. But just reminding the situation of India around 15 years before in tile market also. When I used to project 15 years before that India would be #2 or #3 in the world tile production capacity, so at that time, people used to really make a big question mark that how come it is possible. And today, fortunately, by God's grace, India is in the same situation. The quartz market, exactly in the similar situation which is like we were having around 15 years back in tile industry, ceramic tile industry. Today, this market is basically dominated by Italians, Spanish and Chinese. And almost 60% world market was dominated by China, which is like open. So you can understand opportunity for India, Spain, Turkey, and Italy, it is phenomenal. And everybody, if you see the numbers and if you Google out the numbers, everybody is increasing and getting a much better share in the market everywhere, world over. As far as Indian market is concerned, the players are concerned, we are 1 among the top 3 players of quartz now in India. And hopefully, as my Co-Director, Mr. Rutvij, just mentioned that we are adding on in large capacity in quartz. So I think by that time, we would be #1 in India in terms of quantity and turnover both. As far as quality is concerned, our quality is established. My Co-Director, Mr. Rutvij, already mentioned that we are exporting to more than 70 countries as of now. And our Chairman, Mr. Patel, has already told me to make sure that we touch 100 countries in this financial year for exports. So we -- our team is already working to make sure that, this year, we are exporting to substantial increased number of countries. And it means that our quality is acceptable, established. And we have been getting repeated orders from all these companies and countries.So as far as the opportunity is concerned, this is a very good opportunity. Only physical movement is restricted. So we have to depend on digitalization of the company and then communication, which we are doing it. And I think there would be a substantial support in this year's balance sheet from the quartz in bottom line, especially in EBITDA as average EBITDA.
Sir, I appreciate our company's positioning in the entire industry. My -- other insight that I would like to get from you is the value terms, how much export or how much is the import that is happening in U.S.? So in value terms, how much is that opportunity size? And apart from us, who are the other players? And how big are they? Or how small are they? And where do we rank ourselves? I mean are we the largest -- we are the #2, #3? How does that work out at an industry level? If you could give me some more understanding. I can completely understand about our complete positioning. I would like to get competitors' positioning as well, please.
Market size is very huge. The market size in the U.S. is pegged at INR 11,000 crores. Out of it, it was like almost INR 6,000 crores was dominated by or covered by China. So I think I would request my Co-Director, Mr. Rutvij, because he is an expert on this [Audio Gap] topic. So he would just give you the numbers and everything about the quartz in U.S.
Sure. I mean it is like this. Virtually, across the segment, what happened is over the last 3 years, we have significantly ramped up our exports coming from INR 30 crores to INR 60 crores to INR 180-odd crores -- INR 150-odd crores. That constitutes all the segments, predominantly from tiles, marble and quartz, quartz taking a significant jump in that. And over a period, what has happened is, universally, in U.S., up till about 12 months back, we were doing systematically a lot of exports to that.Now there was an anti-dumping duty which had come across due to which the quartz segment, particularly, had a small lag period. As of July 1, that same duty, anti-dumping duty has been imposed on China to the extent of 250%, whereas to India, it is to the extent of just 7%. So that market, which was imports from -- exports to America and China, that market was virtually INR 11,000-odd crores. Now that gap, all of a sudden has risen or the import -- the actual price in terms of export increased by that much percent of 250%.In India, we were amongst the top 2 or top 3 largest players who was actually exporting these products over the last period of 3 years. So over the period of 3 years, we have been consistently increasing our exports. Thereby, what has happened is our product has been universally accepted. Over the last 18 months, we have actually increased our number of -- I mean, export clientele and the third thing is, we have actually increased the number of sizes. Typically, you have a small size of 30 by 30, we actually do a larger format of 12 by 6 per square feet. Now that has virtually gained a lot of traction as well as importance in the acceptance.If you talk about India, it would be virtually we are at the second stage. I mean we are the -- by -- roughly within a span of 24 months, we would be the largest player to export quartz segment from India to 78-odd countries, including now US, which would be substantially higher, because typically, the quartz segment has a very good EBITDA margin.So to cut short your conversation or to brief it up, I would say that we are virtually at a #1 position in the quartz particular segment, with existing INR 110-odd crores coming from quartz and an augmented and additional capacities going onstream within the next 24 months. The first sales could be as early as within a span of 8 to 10 months.
Great. Great, sir. I appreciate that. Yes, yes, I completely. Thanks very much for this insight. Sir, I have one more question, which is I just want to understand your cash conversion cycle. What I'm trying to say here is that the time when we make the quartz as a product and the time for shipment and we send it to the U.S. market, what is the period in which we receive our money? And how the sales actually happens in the U.S. market? Meaning we have distributors, we have dealers, we have direct buyers, they'll keep inventories. If you could give me some better understanding into this as well, please.
The international market is excellent. Cash conversion in international market is very, very quick because we do not give anything besides LC, okay? The conversion rate of Indian market is much longer than international market. So as far as our policy is concerned, as a company, we are doing everything under LC. So our conversion rate is almost 0 there. But when we talk about average conversion, then it takes around 45 days.
45 days, yes.
Okay, okay. So I'm talking about the quartz exports. There, it is not much of an issue is what you are saying?
Conversion is, say, around 30 days, you can talk about that.
Okay. And sir, we have dealers and distributors for U.S. markets for quartz exports?
Sorry?
For the quartz exports business, we have dealers and distributors in the U.S. market?
Yes, yes, yes.
Yes, of course.
Okay. And they'll keep the inventory. And so they give us orders, we make it, we ship it. How is at all -- we give products to them? I just want to understand the inventory which could be there with the -- distributors' inventory?
In the U.S., we are not holding any inventory at all. We are holding -- we are not holding anything on behalf of them. They are buying from us. They are our distributors. They are managing their own inventory at their level. And I think they hold at least for 90 days their inventory because in U.S., this is a normal culture, for any construction business material, it takes around 90 to 120 days for them to liquidate them and their cash cycle is much longer than Indian market.
Fine, sir. All the best on the opportunities which are there for you. We look forward to seeing great numbers from the company.
Take good care of yourself. Thank you very much.
[Operator Instructions] The next question is from the line of Ketan Mehta from One-up Capital.
Sir, my question is related to the other businesses apart from the U.S. market. You are supplying to many other countries. And there is a fear that there is a general slowdown in the global economy and of course, the Indian economy. Your views on that? That is the first one. And secondly, there is a concentration regarding -- from the company side to communicate and do more businesses to the retail customers. Your views on that regarding the 2 segments for the year? Could you please guide on that?
Ketan-bhai, your question is a very right question that there is a general slowdown. But I take it other way also. This pandemic has given a lot of opportunity to country like India where we were not focusing on so many businesses and so many opportunities and suddenly, we are looking at them. And like, now you see pharma. Pharma business suddenly has shooten up. And same thing, if you talk about our market, our market was something like this, where China has a very strong dominance everywhere in the world. Wherever we go, people used to tell us directly that, look, we are buying Chinese tile, can you compare this tile, this price and this thing. Now there is suddenly a very different change. There is a change atmosphere world over in this business. People are not discussing us that this is a Chinese tile, this the price, this is the quantity, can you match it, then we talk about, otherwise, get lost. There's -- nothing is happening like that. People are coming in a different way to us. They are saying we don't want to buy China tile. Can you give us something similar or better than that? And the price is like it's becoming a secondary choice to them rather than they are focusing more on non-Chinese products everywhere.So this pandemic has given us a very big -- opened up a very big window and very high scope for penetrating ourselves into and venturing ourselves into the untapped market. So yes, in totality, there is a slowdown. But when we talk about as an Indian manufacturer of certain goods, for us, there is a very huge window has been opened by this event. And I think we would have a much better place to play now rather than previous market, previous trade arena.
Also to add Malaysia, Thailand and...
And as I mentioned before also, Mr. Rutvij also reminded me, I give you a very good example. China and their neighboring countries is like a God, okay. They used to penetrate their market, and they used to give very long credit to them. So they used to look at always for Chinese products and they used to buy like Malaysia, Thailand, Indonesia, Philippines, Taiwan. Today, even if we talk about Taiwan, we are supplying from India, not only we, there are other some companies also supplying from India a very huge amount of tiles. Taiwan is like a part of China indirectly, if you say, but they are buying tiles from us. Vietnam is buying tiles from us. Malaysia is buying tiles from us. We have made a large setup and large association with Indonesia. Thailand has already signed a large treaty with us for business. So these are markets which we never ever thought that it would be our market because China was dominating almost 100% there. So these are like, it is now they are out of this market, and we are getting into these markets also.
Okay, okay. Sir, one small bookkeeping question. How is the gas prices -- I mean, as far as our cost is concerned, the trend in gas prices?
Interestingly, you see crude has gone down very badly and it has supported us. So this is called blessing in disguise. In the last 4 months, if you see the crude -- crude and gas is indirectly related. So price is down substantially.
[Operator Instructions] Next question is from the line of Aasim Bharde from IDFC Securities.
Can I get this name again, please?
Yes, this is Aasim from IDFC Securities. So actually, my question was just -- you just made a comment and you've been talking about this, of course, in the call as well that you made inroads in Vietnam, Taiwan, Malaysia. Sir, I just wanted to know what has really prompted them to look away from China. See, in the U.S., it is quite clear the anti-dumping duties have really priced China out of the market. But in these countries, is there something similar in terms of duty structure or any other economic reason why they're looking away, to diversify away from China?
See, 1 thing we have to understand, which is a fact, which is unwritten fact that U.S. dominates the world over almost all the countries and they dictate. So there is an indirect message has been communicated to world over everywhere, besides Russia, that it has to be followed like this. So a lot of companies, under pressure from U.S., they have gone and a lot of companies emotionally, out of emotions or out of compulsion, they have done this thing. So politically, what are the reasons, I cannot comment on this thing. But particularly when we talk about these countries have taken a stance, which is very clear, not only about tiles, in general, for all the products which so far they have been importing from China, to be little away from China. So this is happening across the board, it is not happening only just for the tiles or for quartz.
Also to add on to the fact that all these countries were taking some kind of exports to U.S.A. When you understand that the country of origin from where the goods are being manufactured, when it lays on or when it stresses on China, U.S.A. might have some kind of difficulties or I would not put it as difficulties, some kind of issues regarding the product of origin. So all these countries, when they are exporting substantial quantities, it's just that China was exporting, say, INR 11,000 crores worth of tiles and INR 5,000 crores worth of quartz, but all these countries, simultaneously, like India, were also exporting to U.S.A. although in smaller quantities, could be in the range of from INR 100 crores to INR 1,000-odd crores. But when U.S.A. takes a stand that we would not encourage products from China, then the issue lies on that when you see the country of origin comes from China, all products would have a similar issue and stance.So to brief it or to sum it up all, probably, all these countries are now looking at other avenues than China, and India, basically, world over in tiles and granite -- I mean, quartz, they were comparing India, China. So the next logical best option is India. And amongst in India, in the quartz segment, we are amongst the #2. In the tiles segment, we have substantial exports. So already in the export markets, we've been there since the last 3 years significantly ramping up.Today, for the quarter-on-quarter, Y-o-Y, I mean, to stress on Y-o-Y, from a total sales, roughly around 25% constitutes from exports, as compared to last year, where it used to constitute around 13%. So in a year's time, we have almost doubled our exports. Going forward with the U.S.A. market opening, we intend to see this particular percentage ramp up significantly. So I hope that gives you the dynamics of where we are headed.
Yes, sir, that was very helpful. The second question. So again, this is on the U.S. market and this is for both tiles -- actually more pertaining to the tiles piece. So in the recent times, of course, like Italy and Spain have also fallen back because of their own corona issues. And I guess that would -- and there were also substantial exporters in the U.S. market.
Absolutely.
Once when things normalize, can these 2 countries like spoil the party for Indian players in the U.S. market? Or do they not have enough capacities? Any thoughts on that?
See, in Italy and -- Italy and in Spain, they are mostly playing in the niche market, okay? Historically, not from today, from 25 years. Fortunately, I'm in the industry from almost 20 years. So I can tell you whole history of ceramics or marble or granite, natural stones, everything because I travel a lot world over, okay? Now when it comes to market, which is like a commodity kind of a market when we talk about tiles and quartz, it was always compared between India and China, okay. Italy has got their own niche market. Spain has their own market. Sometimes we are compared with Spain in the worldwide, okay?
7% to 10%.
But when it comes to quality, when it comes to pricing, we are much better than now even Spanish tiles. Around 10 years before, it used to be that when Spanish tiles and Italian tiles used to be larger and better than us. Now India has grown so much in last 15 years, India has grown technologically so much, and quantity-wise also, we have increased so high quantity that our: one, pricing is very competitive; two, our technology is as good as any company which is making tiles in India -- in Spain. So I think they cannot spoil our party anymore. And we are one among the players, and we'll remain among the one player itself. And now once like we have already started placing ourselves into the market, which was untapped market, it would be very difficult for China, again if it enters 6 months, 1 year later, to the same market to remove us. Because normally, once you place yourself positively with quantity, design and price...
Quality also.
Normally -- quality. Normally, the people they don't change their suppliers so often.
Otherwise, they would have changed China long time back. They wouldn't have reached these markets of INR 5,000 crores and INR 11,000-odd crores, if that would have been the situation. Today, we are competitive almost in tiles and we are actually the leaders in India for quartz and the same stands now for international markets.
Right, right. Okay. Yes, that was also quite insightful. Sir, just final question. This is more on the Morbi side. I mean, so in terms of players, would you be able to comment on how many are currently running? How many are still shut? Because just if I read correctly, Gujarat Gas has said that their industrial volumes are back to normal. So like does this mean that the current number of Morbi players who are operational, they are running at peak or maybe far better than normal capacity utilization in the past? And the factories which may still not have operationalized, do they not have any room to open up? Like can you talk about something on those fronts?
See, in the beginning, if you have heard, I have told -- I have briefed it about this thing that the numbers looks very aggressive because market is good for us. And Morbi market is even one step less than us. So your information about the Gujarat Gas is correct, that volume has become almost normal now. And almost all the companies have started. I think more than 90% companies are operating. We were one among the first, I would once again, emphasize on this thing. We were first among the one who started all the factories at a very early stage. And market looks to be very promising. So I think whatever the leftover are also there, they will start very soon.
Okay. So just to take away from what you just mentioned, that 90% of units are already operational in Morbi. And just a small thought from that is that since industrial gas volumes have come back to normal, the scope for a price cut in Morbi on the gas front looks low, unless there is a reduction in international prices, correct?
I don't think there could be an immediate, any price cut either in input or output, both. The reason being now, there is a market. Market looks promising, okay? So I don't think there would be immediate any cut would be coming up.
[Operator Instructions] Well, members of the management, that was the last question. There are no further questions. I would now like to hand the conference over to Mr. Praful Gatani for his closing comments.
Thank you very much for hosting us. And thanks a lot for very active support from your side. I thank everyone on behalf of our Chairman, Mr. Kamlesh Patel, who has attended today this conference. Thank you very much, and we keep looking forward for all positive remarks and support from your side. And I promise our company is doing -- going to do much better than the last quarters in coming quarter. Thank you very much once again for being with us.
Thank you.
Thank you. On behalf of Asian Granito India Limited, we conclude today's conference. Thank you all for joining. You may now disconnect your lines.