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Ladies and gentlemen, good day, and welcome to Asian Granito India Limited earnings conference call.This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the 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 now hand the conference over to Mr. Praful Gatani, Director at Asian Granito India Limited. Thank you, and over to you, sir.
Yes. Good afternoon, everybody, and welcome to the platform with Asian Granito India Limited. I have with me -- I'm Praful Gatani. I'm Director of the company. And I have with me our Chairman, Mr. Kamlesh Patel; also our CFO, Mr. Amarendra; and our analyst, [ Mr. Kalpesh ], along with me. Welcome to you, all of you, once again. Please go ahead.Sorry, if you allow me, then I can continue with the basic information, sir, and -- related to the results. Results have already been published, and I'm sure you all have gone through it, which shows promising numbers and positive numbers this year, again. And we have a very strong futuristic view and based -- coming this year also. Although the first quarter is hit and miss by COVID-19 affect generally, and overall, to all the manufacturers, including us also. It's basically the month of April, which was not very healthy due to lockdown and due to an unavailability of the transportation, raw material and labor, et cetera. But very fortunately, we are one among the first leaders in the industry who have started their all the factory, and I'm pleased to inform you, and I am very, very happy to tell you that out of 900 manufacturers, so far, only 300 manufacturers have started -- restarted their plant and running on partial capacity, but we are the only one who have started all 10 manufacturing units, and we are running with the full capacity as of now. Thus, we have immense number of orders and sufficient numbers of orders, which are giving us complete capacity utilization from May onwards. So that is also a good sign that we are recovering, and we are doing pretty well. So considering this, I think we hope that this quarter onwards everything would be normal, and we would perform better in this year again. I know there will be a small effect of the first quarter, but we would recover in second, third and fourth quarters very nicely. We are very sure.At Asian, we are also looking at, very aggressively and very positively, international market, especially the market where there is a huge and very heavy anti-dumping duty to China has been levied, like U.S.A. and Australia and some part of Europe also. There, we would be getting a much larger share because not only we are competitive in terms of quality, we are also competitive in terms of prices with China. So -- and Indian brand overall in the international market is preferred over China.So this year, because of this international political issues, we would be getting advantage, and we would be getting a much larger international market share. Same will happen in Saudi Arabia and in Middle East also because we are one of the registered vendor in Saudi Arabia. We would get a much larger share this year.In turn, total balancing will be done between the international market and domestic market. Whatever we have lost during COVID in first quarter, we would recover in the last quarter, and we would recover with international increased sales also. So we hope that this year's going to be again comparatively a better year than the last year with us.Also, our Chairman has decided and converted the company into a very heavy digitalization program to reduce the marketing cost, which is something around 12% to 15% in general for all the companies. Our competitors, they are ranging between 14% to 16% as the sales -- cost of sales. And our is -- normally is at 12% cost.To reduce this and to implement the Atma Nirbhar program of our honorable Chief Minister -- our honorable Prime Minister, Shri Narendra Modi, our Chairman has designed one specific program to increase the manpower utilization in the rural areas to give them the benefits and give them the more employment.So I would also request our Chairman to brief you about this Atma Nirbhar program. So Kamleshbhai [Foreign Language] Atma Nirbhar program [Foreign Language] if you can, please.
Hello. Just -- Atma Nirbhar program, all over India [Foreign Language], we are launching this first time. Generally, [Foreign Language] Bombay, Delhi, Bangalore, Chennai [Foreign Language] retired principal, teacher, LIC agent, postman, travel agent [Foreign Language] sanitary, CP fitting, tiles, marble, quartz, adhesive [Foreign Language]Prafulji, please.
We have already lined up a product range and our total mix of products, basically product basket, to offer to international market, and we are adding now even one product, which is called quartz into our one kind of a vertical, which will be focused on U.S. market and which has got a very good potential in West especially. So this would also add on into our top line as well as strengthen our bottom line also. So that would be another focus this year, we would be doing it.We are also making some sizable CapEx also to increase the quantity and quality in quartz. With this, in fact, we have another advantage of getting not only market for quartz, but with this networking, we will get market for tiles also, and it will strengthen our international business in tiles segment also. There are a lot of good advantages that international duties have been reduced and made favorable to India, specifically in case of Australia, in case of your U.S., Canada and some part of countries like France and Germany.So these countries will have an open door for us. We are already targeting and focusing on these markets to replace the Chinese tile market. Because cost-wise and quality-wise, both are -- we are very competitive, and we can offer definitely a much better product basket now with a large range of product available with us as well as a range of outsourcing product also. So these 2 together will help us a lot.Even this year, what we have done is, like, we have focused more on outsourcing to make companies asset-light basically. Our turnover, almost more than 60% would be coming from the outsourcing products also, which will reduce our fixed costs and strengthen our top line also. I think -- and I would now transfer to Mr. Amarendra, our CFO, for add on something financially to you.
In continuation to what our Chairman and Mr. Gatani has said, I'd like to add some more points, like what we are doing in our plant, we are doing a good product mix in our plant where we are outsourcing the low-cost, low-margin product to outside vendors, and we are going for high-margin product in our plant. So that will continue, that we are spending on research in our plant itself. And extra lines, we are adding for quartz in other facilities to cater the need of the U.S. market, which is now exponential -- having an exponential growth.This -- we are appointing our exclusives in U.S. market. Our dealerships and our showrooms are coming up there. So we'll have a big range of product displays there, and we are asking for a very good market share there. Like -- and opportunity from China has opened up a door of around INR 16,000 crore market to Indian players and world over; however, being the dominant player and chief -- and a better version, we are expecting that we will be in 2021-2022, 2020-2021, this will be coming as a boost for us, and we are going to encash this opportunity. So that is why we are bullish on our product. And whatever the losses we have incurred for the month of April, that will -- we will be able to cover it up in the entire year of 2021. And we feel that we will be able to have a positive growth of around 4% to 5% year-on-year in 2020-'21.Coming back to our results. We had a de-growth in quarter 4. That is because the lockdown started a staggered way. It started in Kerala; then it came to Bangalore, Chennai; then Delhi, Mumbai, Pune; and then it went to Punjab also. So this staggered lockdown started in the month of March itself, and that has a -- we lost around INR 140-odd crores of sales -- estimated sales, it could have been larger also, estimated sales in the last month, which brought us down by around 28% in our sales.However, in bottom line, as we said, that we were expecting this to happen in India since we had very good connections in China, and we found out that this epidemic is coming in a bigger way in India. So we planned it out, the futuristic part of our management. We discussed it internally that this is going to happen in the month of March itself. So we pushed our value sales in the month of February itself. And then we understood that March will not be that good. So we lost on sales, but the effort we did in the first quarter -- last quarter on saving our marketing cost and saving our sampling, branding, tools and travel cost, all those -- product launch, we shifted our product launch, all those things and digitalization of our marketing strategy. That has helped us to bring our profit in last quarter also wherever -- even though we lost 28% of sales, you will find that our profits have increased. So this was a combined strategy of our people who are working with us, our management who are having the pulse of the market and the futuristic strategy that we had.Coming on to major savings we made in gas prices. We were the pioneer in using gas technology in our product. Half of Morbi is still in coal and other technologies, but we were pioneer about that. And we -- for future years also, we have installed a very cost-efficient gas kiln in our product line, in our assembly line. So that will also help in bringing the cost down. We are also using natural gas, propane, mixed in our product. So that is one strategy to bring our cost down. We are in such an area where we get a little bit of subsidy in one of our companies, group companies, so that also helps for a longer one.And this -- coming back to the marketing cost, the branding, the tours and travels, the sampling cost, the display cost will be reduced. And we will put our effort in digital marketing, which will have a positive stake. And with the variable strategy we've brought in sales and marketing salaries, that will also enhance our penetration in the market because people will be more motivated to go inside the market, deep penetration and all. Thank you.
With COVID, there is -- a serious effect has been observed. It is like migration of labor from metros to B- and C- and D-grade cities, and -- which is our forte and which is our market, basically. So there would be a de-growth in metros. However, there will be a substantial growth in B- and C- and D-class of cities because of ample of labor is available and cheap labor would be available. Also, people would go for budget houses, economic houses. And government may roll on further more goodies for these -- this particular segment. So this is our niche market, in fact, I would say.And Asian is basically is a -- Asian is basically a company which is not into a very high-value and premium products. We are into a mid and upper mid kind of a tiles segment, which is a market which is, basically, you can see in B- and C- and D-class of cities. So this market would support us further this year. And it will give us a good supporting numbers also at the end of this year, I think.And anything is to be added by us.
We can open floor for a question-and-answer session.
Can we open the floor, please, for any questions? Thank you.
[Operator Instructions] The first question is from the line of Vivek Shah from -- sorry, an individual investor.
Sir, my question is regarding our new promising segment, quartz. I think day before yesterday you came out with an announcement about U.S.A. has reduced the duty on quartz for Indian quartz and increased the duty for Chinese quartz. So can you please elaborate what all -- what is the total U.S.A. size for quartz, Chinese market in U.S.A. that can be replaced by Indian market? And how much we are exporting to U.S.A.? Or total our quartz export? And what are our planning for next 2 years for quartz exports especially?
Thank you very much for asking a very, very relevant question of the time, basically. This political change and then the world powers, like, what has, as I said, shifted some commercial powers from one to another places also. And in line with that, U.S. has already imposed a very heavy anti-dumping duty on various Chinese products, which includes tiles and quartz also.China have already been -- always been a preferable business partner with U.S., but in last 3 or 4 months, if you see, the things have changed. This time, they have imposed 750% duty on Chinese product, which is, specifically, I'm talking about quartz. Whereas tiles, they have imposed around 350% duty, and quartz is around 330% duty they have -- sorry, they have imposed. Whereas on Indian product, the duty is only 8% and 3%, respectively -- 8% and 3%, respectively. So this would definitely open door for Indian suppliers, and similarly, suppliers from some other countries.Quartz is -- by and large, is a new segment. There are very few production lines in the world. Still it is -- it was dominated by China. China used to be 51% partner of quartz business with U.S. The total size of the U.S. business in Indian currency, if we talk about, it is approximately INR 1,100 crores -- 1,100 -- INR 11,000 crores, sorry, INR 11,000 crores. And out of which, around 51% was controlled by China. So this is a substantially large number as of now, if you see, and it was followed by Spain.Now when we talk about China and Spain, there is a big difference between these 2 countries. Spain cannot be compared with China because of the cost-effectiveness. China has already -- always been a supplier, which is supplying reasonably good quality with cost-effective method or model.So India is following the similar model. We have a good quality. Our new lines, which is much more modified, much more advanced lines will provide a much better quality, better thicknesses, better prices, better shape of quartz and suitable to the U.S. market. So this year, we are expecting substantial good growth in tiles business. We are also investing in a new line, which is going to come into our 100% subsidiary in Amazon Ceramics. And first time, we are going to use robotic technology for manufacturing quartz. This technology also gives us a better quality, better sizes and better thicknesses and even better printing also, printing in terms of better mixing. So all together, this will give us a better product to offer to U.S. at par with China, which China was controlling.So this is going to be one important segment for us in this year, year 2020-'21 as well as in 2021-'22.
But sir, in the presentation, you have shown the segmental revenue for quartz as INR 180 crores for financial year...
So we are existing in the same market, and we have already done this business last year also. INR 180 crore is the right figure you have mentioned. That's the correct figure.
Out of which, how much was the export?
INR 100 crores.
INR 100 crores was export last year.
So INR 80 crores were domestic and INR 100 crores were export. So what are you expecting next 2 years?
Next year, I mean, I think '21-'22 is we are talking about, we should touch around INR 250 crores worth of exports only.
INR 250 crores of export?
Correct, '21-'22.
And domestic, about roughly?
The domestic contains the same figure. The domestic would not change much because domestic market is stagnated. It is not growing. And I think maybe there will be, in total market, maybe a small de-growth because it's a premium market, but we will recover it in international market.
And sir, any CapEx for quartz for next 2 years? Or we have a capacity?
Kamleshbhai, our Chairman, because he was involved personally in implementing this project. So he would tell you about the technology as well as the investment also in quartz. Kamleshbhai, please.
[Foreign Language]
[Foreign Language] we have got 51%, right?
[Foreign Language]
[Foreign Language] are looking at the Indian partners, Indian partner [Foreign Language] on Indian soil with the Chinese appliances, machinery, they want to export to U.S.A. because they cannot miss the U.S. market. [Foreign Language] Chinese...
[Foreign Language]
[Foreign Language] Kamleshbhai, quartz manufacturing [Foreign Language] cost-wise, how competitive we are with China? China [Foreign Language] cost-wise?
[Foreign Language]
And also when we talk about international market, there is a premium of Indian product over Chinese product. Chinese product, [Foreign Language] it is always treated as a discounted product. It is not treated as a respected product. Any product you talk about it. So when we say that is Made in India, it always has a little premium over China. So even we are at par with cost also, we are competitive in terms of quality also, and there is a small extra premium also we get in the market being an Indian product.
[Operator Instructions] We've a question from the line of Sunil Shah from Turtle Star Capital.
Sir, I have one question. You stated that this year, our export can grow from INR 100 crores to INR 250 crores. Sir, largely, this incremental INR 150 crores, we expect to come from the U.S. market?
I think there is a little gap between the information. What I have mentioned by category that year 2021-'22, we would be doing it. We would be doing it. And this year, it was -- we have given the figures, which is like INR 158 crores, we have done it. And we try to achieve -- we'll try to achieve something around INR 275 crore to INR 280 crore for the total gross exports, I'm talking about.And per se, we are talking about specifically about the quartz. Quartz will give us something around INR 250 crores in the year '21-'22.
Yes. Sir, I'm talking quartz itself, that this year, our export of quartz was -- this year, meaning FY '20, we've done INR 100 crores of exports, right, of quartz?
Yes. True, true, true.
Yes. So by FY '22, we'll do about INR 250 crores?
Yes, you're right.
So that incremental INR 150 crores, we expect to come from the U.S. market?
Right. Mostly.
Correct. Mostly.
90% U.S.
Okay. And sir, how important is technology in this field? Because if the price advantage which has come to India versus China, sir, can other players easily set up this plant or technology is very important? Could you make us understand that what is the technology barrier in this industry?
It's not just the technology, even the process is a big barrier. The -- some manufacturing companies, which have come in late '90s and early '20s, if you -- toward 2000, you'll see they failed only because they could not set the process. It's not just buying a machine. It's not just like buying a luxury car, and you don't know the driving. So you need to know the proper driving also to have a luxury car. So something like this, technology is available. I'm not saying technology machines, anybody can buy. But the setting up the process, making up a mix. Mix is important. It's very, very important how to make a mix because people take like months together, years together to settle down with the right product, right thickness, right design and right shine. So we are already like ahead in this. We already crossed these -- all barriers. Our product is very well acceptable in the international market. We already have been selling it. We already have been getting repeated orders. So our strategy is very different than others. So maybe if somebody wants to enter into the line, they will face a lot of barriers, not just buying a technology and implementing a project. Other issues are also -- will be going to be there.
Okay. Sir, one important point is, is there any small unorganized player from Morbi area or from anywhere else in the country, who is also doing this quartz business? Meaning, how is the market segmented? Could you just give me some more understanding on that?
At present, Morbi unorganized player [Foreign Language]
Okay. Sir, one more point. [Foreign Language] INR 11,000 crores is the opportunity size of quartz business in America and 51% was being done by China. You also mentioned that Spain is another country which was exporting, Spain [Foreign Language] how much of the share is like...
Let me first correct you, it is INR 11,000 crores, okay, for only quartz. Only quartz is INR 11,000 crores.
Yes. And Spain is doing around INR 2,000 crores to INR 2,200 crores now with the increased number. So it was some INR 1,500 crores before, but now they have already started increasing their share in the market. Vietnam and Spain is very aggressively doing, and they are increasing. We have observed the numbers are going up. Spain has already reached up to around INR 2,200 crores. I think they will cross INR 3,000 crores in the coming year.
Okay. Sir, so INR 11,000 crores [Foreign Language] how much was India doing earlier?
Only INR 600 crores.
INR 600 crores. It's 6%. Only 6% approximately we were having, and we intend to grow this year at least by another 5%. I mean, we would -- should have something around 10% market share totally in the U.S. this year.
Okay. Okay. And sir, we also expect that the margins would also improve because the pricing flexibility will also be there now that the duty is down from 85% to something around 3%. So that will help us to have some better pricing also, and because of which, margin will also be better off?
Certainly. You are absolutely correct. It will ease out the pressure on pricing, and the margins would be better because pressure on pricing comes only with China. See, most of the other manufacturers are comparatively more different manufacturers, but not very, very aggressive suppliers in the market. Whenever there is a competition with Chinese product, then a lot of pressure is there on pricing. It's basically when we talk about Israel as a manufacturer of quartz, Spain as a manufacturer of quartz, a leading manufacturer, they are not the ones. They don't play these dirty games mostly.
Okay. Fine, sir. All the best in the opportunity which is there. We look forward to great numbers from all of you.
Thank you so much. Thank you so much.
[Operator Instructions] Our next question is from the line of Shrenik Jain from JM Financials.
Sir, can you throw some light at the capacity utilization for tiles industry currently that is in Morbi? And on the Gujarat gas prices at Morbi, if they have fallen recently in the last 1, 2 months?
Total Morbi and Gujarat, 900 manufacturing plant is there. [Foreign Language] 600 plants, 500 to 600 plants [Foreign Language]
And sir, gas prices?
Gas price, [Foreign Language].
It is corrected with the global prices. So if global prices is under pressure, so I think this would keep going on, I mean, another couple of months also, it would remain the same situation.
Okay. And sir, labor cost, can you throw some light. Are the labor costs -- I heard that labor costs have gone above 5% to 10% in Morbi. Was it true?
You are saying gone up or gone down?
Up, up.
No. Not exactly. Not exactly. It's not that. The availability of labor is an -- a question. The price is not a question today. In fact, they are desperate to work. That is, all the people, those who are available, they are desperate to work. But availability -- number of availability is less. And that is for a reason why this another 50% companies have not yet started.
So sir, any -- if you have any view of by when can they return or when can production normalize?
See, people are -- it is happening. It is in the process. But there is a psychological fear. It's not just like a physical factor. It is -- more is a psychological factor also. And government is providing them a lot of packages and goodies. So it's difficult to say that by when they will be back. Monsoon is already on. So a lot of labor would be involved now in kharif [Foreign Language]. So they would be doing their job there and seeding and all. So it takes -- it might take some time to normalize the situation and come out of this fear of COVID right now.But as I mentioned in the beginning, and I'm pleased to repeat it again, that our all the 10 factories are working. We are manufacturing with full capacity as of now. Also, we have full order, like -- and even pending orders of exports, also more than 100 containers as of now is lined up for this month.
Okay. So sir, the domestic new orders are coming from -- can you tell us it is coming from which segment, like is it institutional, retail? Or like, what is driving the demand currently? And what will drive the tile demand over the next 1 month?
We -- already [Foreign Language] Bombay, Delhi, Bangalore or Chennai, already lockdown [Foreign Language] 30,000 square meter single day [Foreign Language].
Sir, I would like to mention that demands are coming from B and C categories of city [Foreign Language] construction activities are in full-fledged. [Foreign Language] and demands have been generated. So there is a big demand from institutional and government projects. Retail [Foreign Language]. We are only looking forward to the big cities. [Foreign Language] They are raring to go. Unfortunately, [Foreign Language] so we are expecting [Foreign Language] another 1 month. As soon -- as you understood that today, government has announced that within 1 month, they are going to launch the vaccine and all. So we expect [Foreign Language] all over India. But [Foreign Language] C-category cities are giving us a boost -- big boost, where we are actually present in a very good number and [Foreign Language] they have a good position.
Sir, on the cost-reduction measures that we are doing and savings in gas cost should overall help us in maintaining the margins? Is it fair understanding?
There are 2 ways of quarter -- cost reduction. One is we are getting benefits of -- one is like organic and unorganic or natural and unnatural.Natural cost factor, what we have got at this year, is a reduction on gas price, okay? That is one, which is a natural factor have given it.Second, as I mentioned to you that Chairman has already implemented one new program, which is Atma Nirbhar program, as well as which is going to contribute into reduction in the cost of our cost of sales.So as -- if you see our numbers, our cost of sales is around 12% of the total sales. We have a target to reduce it to something around 10% to 9% this year. By digitalization process and digitalizing the whole process by reduction of marketing expenses, sales promotion expenses, which includes the distribution of samples, distribute -- physical visit to the counters. So all these things and -- travel and advertisement expenses. So this will reduce, I think, by around 2% to 3%, we would be able to reduce by the year-end total cost and in sales and marketing also.
We'll take our next question from the line of Chirag Lodaya from Valuequest.
Sir, this -- basically, the changes which you have mentioned, quartz and tiles, the anti-dumping duty have increased for in this quarter. [Foreign Language]
Can you repeat the question, please? I could not get your question.
Yes. Is it audible now?
Yes. Now it is audible, Mr. Chirag. Yes.
Yes. So this Chinese anti-dumping duty on quartz and tiles, the effective rate [Foreign Language], sir. When they got implemented, this duty?
[Foreign Language]
Okay. So now -- okay. Okay. Okay. And how India exports[Technical Difficulty]Saudi Arabia [Foreign Language] anti-dumping duty [Foreign Language], how do you see that development for Indian tiles export?
No. Saudi Arabia has a very structured anti-dumping duty. In fact, they have already made a list of Indian manufacturers under different categories. We are already one of the registered vendor. And our subsidiaries are also one of the registered vendor. So we are very comfortable with the Saudi Arabia anti-dumping duty. In fact, we would get a bigger number this year with this new structure.
Okay, okay. So [Foreign Language] sir, overall tiles export [Foreign Language] this year, FY '20?
This FY '20, you're talking about? Or '21 -- '20-'21, you want to know?
'20.
FY '20.
FY '20, we have done around INR 60 crores in tiles export, which we are thinking at -- with the U.S. market opening up to us when China is going out. So we are expecting this market to grow exponentially, and we are looking at a double-digit growth in this market also.
So sir, this INR 60 crore export in this year, how big can it be in next 1 or 2 years for us, for tiles?
Tiles segment will -- definitely will grow because of not only one reason is that China. The second reason is the accessibility of our product to new markets. So as of now, we are doing already exports to around 55 to 57 countries, and we intend to do this year, in 2020-'21, something around 75 countries. That is one, number of countries.Second, we are going to penetrate our products into the couple of large markets like U.S. and Europe and Australia. So that will increase the number.Third, being a registered vendor in Saudi Arabia, we would definitely fetch a better number and better sales figure in this year from Saudi Arabia and Middle East also.Total last year, we have done something around INR 158 crore exports, and we intend to touch this year around INR 275 crore exports, which includes the quartz also.
Okay, sir. Got it. And sir, what is the margin in quartz business? What is the EBITDA margins in the quartz business for us?
Margins is like it is a widespread margin. So at the end, it is something plus-plus 20%, I can say, in general, because...
Product to product, it varies. It is 18% to 25%. Overall, it remains at 20%, 21%.
Got it. Got it. And sir, just lastly, so your commentary is being pretty strong compared to opening up of plant. When I look at your peers barring, say, will be, all this other listed entity or say organized player, nobody has been able to open plant more than 1 or 2, but we have opened our all the plants. So this bullishness is coming from export opportunity? Or it is domestic also you are seeing lot of traction currently?
Both, both. We have a huge number of pending exports right now, okay? So we are doing that also. As well as our -- see, the advantages, we were not dominated in dominating factor -- dominating player in A-class cities. We are like our peers. Our peers are not the Morbi. Our peer is basically is organized sector companies like Somani, Kajaria, Johnson, they are one, okay? They have -- their major market share is from the metro cities. We are mostly -- like we have a major market share in B- and C-class cities, where our vendors have -- our dealers have already started functioning, and there are pending projects like small houses, small colonies, some government projects, some new hospitals, some new kind of schools and all these things. So there, we are supplying. But there, we have already started servicing them.
Right. And sir, lastly, gas price benefit, how it will flow in the numbers this year? So do you think cost -- do you think corresponding price decrease will price -- decrease will also happen with gas price going down? Or you will be able to retain large part of gas price decline [indiscernible]?
See, it can happen when you see all the factories are operating. Right now, only 33% or 35% factories are operating. So there would not be, in any case, any pressure on the price right now, okay? There is a disbalance in demand and supply. Right now, the situation is very different than what used to be, say, in 2019 beginning.
Right, sir. And you don't expect any pricing pressure at least in the near term?
Yes. Absolutely. And nearby, I don't see anything like that.
Our next question is from the line of Aasim Bharde from IDFC Securities.
Sir, first question, you mentioned that in B- and C-category cities, where you have seen growth -- you have seen growth. So actually, I wanted to know, is this only pent-up demand? Or do you see signs of new work also on the ground? Any new project launches, small-scale residential construction or affordable housing there?
You're -- very rightly you have mentioned it. One is the pending demand. The last 2 quarters, there is a huge pending demand is there. Second is you would see a big change. The migration -- reverse migration from metros to B-, C- and D-class cities. Government would also open up a lot of this budget housing schemes and which is already there also. Income tax also has a separate provision for this kind of a segment. So I think, in total, there would be a good demand and good rise in numbers from these cities.
So new demand should start trickling maybe in some time in the future, but not right now? Right now, it is mostly pent-up demand, right?
It is not like that. It is like together. It is mix. It is mix, both the situation right now. It is -- new demand also has started coming in from these cities. Now I'm not talking about metros at all. And I think there is both. It's a mix. It's a mix of it.
Okay, okay. Sure. Sir, and second question, could you just explain more about the AGD and GCC countries. You mentioned that it is a very structured and that you are very comfortable there. Sir, does this mean that even with anti-dumping duty, this market will still be competitive for you? Because my understanding was that GCC AGD makes India uncompetitive in these countries.
See, in case of GCC countries, basically, specifically when I talk about Saudi Arabia, they have made -- structurized it completely on basis of some information provided by Indian government and as well as Indian suppliers. So they have rated them on the basis of background of the manufacturers and ground capacities and everything. And accordingly, they have levied the percentage of anti-dumping duty. If there is a trader, then the number is very high. If there is a genuine manufacturer, number is -- the amount is very low. So we are already one of the vendor into it. Our associates, also, in the same category, they are also listed vendor. And our outsourcing partners also are a part of that list. So in total, we are very comfortable in the present situation that we can compete with others, and we can continue with our business right now.It's not like anti-dumping duty what we see in India or we see in some other part of the world, which is like across the board, it's a flat percentage, okay? There, it is very reckless sometimes because people they manage left and right, and they try to enter into the market. But this is on point and to the vendor. So it's more easy to operate there. And it is more easy to operate with your own brands.So see, when there is across the board flat anti-dumping duty, people -- lot of people, they have to forgo their brand because they want to enter through some or other sources, okay? Here, if it is a structured duty, you can still play with your own brand because you know that my duty is this much and my landed cost is this much. So you're dealer is comfortable in that price.
But I think as far as what I understand, barring 1 or 2 companies, most companies are in the 46% and beyond bracket of anti-dumping duty, I mean, at -- so I presume even you guys are at the 46% level. So even at 46%, the market still makes sense for you guys. Is that what you're saying?
Our associates are on a lower bracket also. Our associates and our outsourcing partners are also in lower bracket also. We are -- you are -- you rightly have studied. We are into 46% level. But our -- around 60% business is still from the outsourcing partners. And they all are based in Morbi. So that is possible for us to get into it.
But how many players -- how many companies have been selected for a lower duty? Is there a number out there? Like...
190.
Total number is very large number. It's almost like 200 companies have been registered in this, and the process are maybe still on. I don't know about it exactly, but process may be on. So it's a large number of companies already registered.
No, no, no. Yes, that I understand. I was just asking like how many companies, including the associate partners, would be in the lower anti-dumping duty bracket?
No, we have not categorized it so far, and we have not done that kind of analyze -- analysis on the number of duties and number of companies. So it is difficult to reply at this point.
What we understand -- I'd like to add one point -- what we understand is that Morbi associations and Government of India has also taken up this duty issues with GCC countries. And most probably, within a period of, say, 6 months or so, we'll see a revision so we understand that revisions may comply in shorter time.
Okay. Okay. Okay. Sir, just one final question. Assuming most of Morbi is not competitive in the GCC countries, where would all these exports go? Would it be -- I mean, would U.S. be a busy market to track? Or would there be other markets where Morbi players will have to focus more on?
No. Morbi is a very large player in African market. They have a huge market size in Africa and East Europe. So they are doing at a substantial good business in Eastern Europe, then some part of Russia also, Africa also and a little bit in U.S.A.
Our next question is from the line of Sunil Shah from Turtle Star.
Yes. Kamleshbhai, I have one question for you. So there is one more company, which I understand is in for the quartz business is Pokarna. Sir, how does that company compare with us? [Foreign Language] Is it our competitor? Or what are the good things about Pokarna which we can learn here? And which are the things where we have an advantage over Pokarna? So I am just trying to understand the competitive landscape between us and Pokarna. Could you just please make me understand, Kamleshbhai?
Pokarna is a Britain technology, and Pokarna is a 100% export-oriented unit. The single piece is not selling in the domestic market. And Asian is a domestic company in India. And we have a 3-line previous, we have a 3-line [Foreign Language] Pokarna is a Britain technology [Foreign Language].
See Pokarna is an established player, and it is going to be there in U.S. market. But the size of the market, which is now available, is much, much larger than the capacity what Pokarna is having. Pokarna total size is like hardly 2% or 2.5% of the total U.S. market. And leftover size today because China is out is like almost 50%. So very -- a small piece of cake is not a big issue right now in U.S. market.
Okay. Sir, I believe Pokarna is having some 30% margin in their quartz exports. Sir, so can we aspire to reach those levels of margin in our quartz exports?
See, Kamleshbhai, has very rightly said, this is -- he said very clearly that they are already established and they are making 30% profit. We are competitively a new, and we are a beginner in this line. So we are tracking at 20-plus. But definitely, with the new sizes, new product range and -- by the end of this financial year, you would see we would also reach something around 25-plus percent.
We have a next question from the line of [ Divyesh Shah ], an individual investor.
My next question is for Kamleshbhai. Kamleshbhai, [Foreign Language] organized or unorganized player [Foreign Language] what is your view about Morbi? Because [Foreign Language] about 100 unit is permanently closed because [Foreign Language] they were financing to the Morbi player. [Foreign Language] they have all withdrawn from the Morbi player. [Foreign Language] 90 to 100 organizations, Morbi [Foreign Language] what is your view? And how do you see Morbi coming up in next 2 years?
So as far as this financial issue is concerned, I think -- let me just take this liberty to speak on behalf of Kamleshbhai. See, we cannot comment about what is happening between them and their promoters. So frankly speaking, we have no idea about it. We only know because of the scarcity of labor, we -- they have not yet started again. So that is what exactly we know. Rest of the things, frankly speaking, even Kamleshbhai would not be able to speak and say something on this thing. This is definitely their internal matter. Maybe what your information have may be correct, may not be correct. So I don't know.
Thank you. Ladies and gentlemen, that was the last question. I now hand the floor back to the management for closing comments. Over to you, sir.
I heartily extend my warm thanks to everybody who has spent their valuable time to join us and give us an opportunity to express our views and express our commitment towards the growth of the company. On behalf of our Chairman, Mr. Kamlesh Patel, I can assure and I can promise this year is going to be better than previous year. We would certainly going to do better than the earlier numbers and perform better. And I'm sure we will see with much better results in coming time. Thank you for joining us. Thank you very much.
Thank you, members of the management. Ladies and gentlemen, on behalf of Asian Granito India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.