Stylam Industries Ltd
NSE:STYLAMIND
Earnings Call Analysis
Q3-2024 Analysis
Stylam Industries Ltd
Stylam Industries Limited held its 3Q FY '24 earnings conference call, hosted by Systematix Institutional Equities. The call featured Mr. Jagdish Gupta, the Managing Director, and Mr. Kishan Nagpal, the CFO. The discussion commenced with a brief introduction by the hosts, followed by a Q&A session.
The company experienced challenges in domestic market growth, with factors such as waiting for anticipated increases and the need for improved strategies despite increased expenses. However, Stylam reported positive growth in exports despite setbacks related to the Palestinian-Israel conflict.
The Red Sea crisis significantly affected ocean freight, impacting 50% of Stylam's customers. The management expressed plans to mitigate this temporary issue by passing on costs to customers, foreseeing stability in raw material prices which have led to improved margins.
Stylam's new laminate plant, anticipated to be operationalized by the end of Q3 FY '25, is expected to enhance production for exports and domestic markets. The company aims for a balanced approach between contract manufacturing and its own label for this expansion.
The company targets substantial revenue from the new plant, aiming for a total capacity of around INR 800 crores, a significant increase from the current level. Stylam plans to optimize the new capacity over a 2 to 3-year period.
Stylam's Solid Acrylic Surface business is poised for growth, particularly in the face of challenges like antidumping measures against imports from China and Korea. The company foresees positive developments in this segment both domestically and for exports.
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Ladies and gentlemen, good day, and welcome to Stylam Industries Limited 3Q FY '24 Earnings Conference Call hosted by Systematix Institutional Equities. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Ashish Poddar from Systematix Institutional Equities. Over to you, sir.
Yes. Thank you, operator. Good morning, everyone. This is Ashish Poddar from Systematix Institutional Equities. We welcome you all for Stylam's 3Q FY '24 earnings conference call. From the management, we have Mr. Jagdish Gupta, the Managing Director; and Mr. Kishan Nagpal, the Chief Financial Officer. Result was published last week, and we believe that we have got a chance to look at them.
In the interest of time, we'll directly get into the Q&A, and we request participants to avoid repeated questions. Operator, you can start the Q&A session.
[Operator Instructions] We have our first question from the line of Keshav Lahoti from HDFC Securities.
Hello?
Hello. Yes, sir. Go ahead, sir. Hello, [ Mr. Dhruv, ] you're not audible, sir. You're not audible through, sir.
Hello.
Yes, yes, you're audible now.
You actually said Keshav Lahoti, so I got confused. Yes, no issue. Sir, so my first question was that what was the reason behind this low volume growth especially in the domestic market, where we were actually projecting close to 30% to 50% revenue growth in the near term because of the lower base as our presence is currently very less compared to our peers?
Absolutely correct. First of all, in export term, we have an almost damage of INR 18 crores to INR 20 crores due to this Palestinian-Israel war, and we are #1 in this area. You see the reason for export. Rather we are happy that we have a growth in export.
Yes, sir. Okay. Sir, what was the reason behind degrowth in domestic market?
The domestic market actually [indiscernible]. We have no big reason for this. We are trying our best productively, best acceptability there. We are opening new branch offices also. But really not correct, honestly. Maybe it is that we are waiting for every time that it will increase, it will increase. Unfortunately, it's not going -- let's see for this quarter also. But export, definitely, it is growing in a big way and in a right way, right direction. We have many, many new OEM customers adding with us, very big brands of world with us. Domestic also, we are, maybe then let's hope for this 2 months more. Otherwise, we will change our strategy, see what we can -- how we can improve in domestic also in spite of the fact that we have more expenses this quarter, last quarter. Revenue down, top line is down, even then our margin EBITDA is better than last year also.
Right, sir. Sir, how do you see the Red Sea crisis plays out in the near future...
It's a very big problem again. Now even then, ocean freight increasing 2 sides, in Israel plus Europe, U.S.A. not much affected. Almost 6, 7 times. And our 50% customer affected our 50% increase. But if it is -- this month or next month, we will pass on everything, they understand that it is a genuine problem. But it will temporary phase. I don't know, maybe 1, 2, 3 months, how much time it will take.
Okay, sir. Sir, how do you look at the raw material price trend in the near term because the margins have already improved substantially?
It is stable now.
Okay, sir. Do you expect this type of gross margins to be maintained going forward?
Yes, yes. If it is going, there should not be any dramatically change, very, very high -- 2%, 3%, 4% or 5% increase, no matter. When our top line will increase, everything will be covered. The other expenses are not for this -- meant for this sale. All expenses are minimum INR 90 crores to INR 100 crores per month with sales. There is no increase in any type of expenses. But we are -- I myself personally very happy that in spite of the fact these all circumstances, that our margins were better than last year.
Definitely, sir. That is very commendable. Sir, I wanted to understand how big will be the scale of the new laminate plant, which is expected to be operationalized by Q2 FY '25? And what will be the target user base?
Not Q2. Q3 end. We never said 2. Like -- again, there is already place heavy machinery order, leveling is going on, everything. Maybe within 2 weeks, we will start the construction part also. All government -- mostly government's already formalities with us.
Okay. Sir, and you have already mentioned that it will be used for exports. But do we have any idea that will the customer be from contract manufacturing?
Already. That is a different sizes, different things. We will get immediately sales from that.
Okay. So that will be primary through contract manufacturing and not our own label, right?
No, no, no. Same, 50-50. Right now, we are doing the same thing.
And sir, just my last question from my side. Will this plan be completely focused on laminates or we will keep some land parcel for future CapEx as well or something like particle...
[indiscernible] We don't need any CapEx after that. And we are utilizing whole thing. Maybe it is a more value-addition product we will produce here.
Okay. So sir, what is the size of the CapEx like in terms of revenue terms, if you can quantify, in terms of the current capacity so that we can...
In terms of capacity, we target, we had a revenue of almost INR 200 crores, INR 225 crores, total plant. And total capacity will be minimum INR 800 crores. But I don't know it will 2-year take, 3-year take to utilize the whole capacity.
The next question is from the line of [ Kunal ] from Kitara Capital.
Sir, I wanted to know outlook for Solid Acrylic Surface and...
I'm not hearing you properly.
I just wanted to check how Solid Acrylic Surface business going and...
Yes. It is actually -- again, it is growing, not like where we started export like in U.S., in other country. Now the [indiscernible]. Nobody wants to give. Laminates, of course, we are #1, so the reason they are paying the ocean freight. Now it is in domestic also, we increased a little bit. Now we are hopeful that there will antidumping very soon. They already -- government already -- China and this Korea is dumping here in India. Too much import from China now.
So how much revenue do you expect from the business in the next 2, 3 years?
No, 2, 3 years. No, no, these are quite [indiscernible] very soon, we can get INR 200 crores, INR 300 crores business when machines are ready, everything, capacity is there. Whenever anybody visits from U.S., any country, they appreciate the -- and we are quite hopeful that very soon it will be.
Sir, both the lines are operational or one of them is operational?
One. We have no much order. So far we have not utilized. We are utilizing capacity only 10%, not more than even 10%.
Is it because you're not getting orders or...
Yes, we're not getting orders.
The next question is from the line of Viraj Parekh from Carnelian Asset Advisors.
Yes. Sir, I just wanted to understand a follow-up on the previous question. I mean [Foreign Language]. I mean, now what are we trying -- like you're saying, you're not getting orders. So what is the plan to ramp up this capacity utilization because [Foreign Language]
[Foreign Language] we usually actually go through our past history of laminates HPL. At least, we start, we are not at losses from acrylic. And when we start our laminates in '92, '93, we suffered almost 15 years, if you go through our total older balance sheet. We have covered so many losses, so many things. Even that HPL was already available in India in so many factories. Even then, it took so many years. But acrylic, we are number first company in India to start with Europe technology with the same. So when you want to build your own brand name, which takes many if we want to sell it as an OEM to anywhere in India, we can sell it easily. We don't want to go that way. We want to have more patience that our Granex brand should be established. This is the reason for the long -- more delay and not getting immediately. We want to build our brand name. [Foreign Language]. We don't want to sell like OEM. Whatever we are selling in our acrylic, whichever it is, 100% of our own brand name, even overseas. And we [indiscernible] very soon, expecting every week, every day thinking about this thing.
Understood. Sir, just one thing if you can help me understand -- the 9 months of FY '24, how much of revenue have you earned from acrylic? And can you split that up in export and in domestic?
No. Our sales is -- approximately INR 4 crores.
INR 4 crores for 9 months, sir?
INR 5.37 crores.
Yes, for 9 months. No, no, third quarter. Sorry, sorry, it is third quarter.
Okay. INR 5.37 crores for the third quarter. And sir, total for the 9 months, how much is it?
Total is almost INR 20 crores.
INR 20 crores. And sir, can you split this INR 20 crores in export and domestic?
Domestic is almost INR 11 crores. Export is almost INR 9-point-something crores -- INR 8-point-something crores.
Understood. So just a question on [indiscernible] ahead. We have -- it's been quite a number of years that we have tried and tested the export and domestic markets...
Not many -- only 2 years. We started it after COVID, actually.
Correct, sir. Correct. It's been 2 years since we commercialized the first laminate line. So just wanted to understand in this 2 years of your experience in the market, where do you think your next -- your would be concentrated focusing on? Would it be the export market? Or would it be the domestic market?
No, no domestic market is also very big. We started with -- we actually -- it is mostly for domestic, but export market is also big. It is only China and Korea is capturing whole -- the whole of the world. This was our reason. I told you if we want to sell it to OEM, we can sell it easily. But what is the problem -- not a problem, we are facing is, to make our brand name. Even if you go to India market, if you ask, everybody know Granex now.
Understood. My question is from the point of view, not that the opportunity is big, but there will be considerate more of your efforts on? Do you want to focus to first establish Granex as a domestic brand and then keep it global? Or do you want to see that global is much more easier to build than domestic?
No, no, no. Both are -- for us, both are the same. But I'm sure it will not be like HPL in India we are doing. It will grow more in India, domestic market. It is export substitute. Still there is a INR 700 crores to INR 800 crores export -- import from Korea and China in India every year. And government has already started -- initiated antidumping duty on this. This will also help us. Just started 2 weeks back.
Sorry, sir, can you repeat the last thing. Government has import duties? I cannot hear.
Government has started -- initiated antidumping.
Government has initiated the antidumping duty [indiscernible] also. So more or less, in the next 1 year, antidupmping will be implemented.
If it is implemented, we don't know, and then it will be a great help to us to curb this import which they are dumping in India.
Understood. Last 2 questions before I get up in queue. So earlier participant asked that about the freight impact versus the Red Sea. You're saying as of now, you've not passed on to the customers. You are taking some of the hits on our margins. [indiscernible] fully passed on?
Yes, yes. When something starts, immediately, you have an order for 2 months and something immediately happened. Then that you have to pay from your own pocket for few days or few months. You cannot -- but now the new orders are coming -- it is coming with a surcharge, reversion rate. It is already in last quarter balance sheet. In spite of that, our margin increased.
Yes. Sir, my actual question was that [Foreign Language] -- so is there like [Foreign Language] raw material cost be more or less stabilized right now -- as we pass on this cost to the customer fully, is there scope for the margin to improve going ahead?
I really cannot confirm that right now, but I'm sure it will not decrease. It will be -- we are trying to maintain it.
Sure. So just last, last question is last quarter, we did sales volume of 3.15, this quarter 2.8. If you could give a breakup of that last quarter and this quarter in domestic and export volume?
Pardon?
Q2 [Foreign Language]?
Q3 [Foreign Language], domestic [Foreign Language] 12.86.
Domestic [Foreign Language] 12.06?
12.86.
Sorry, [Foreign Language] it's very muffled. I can't hear you clearly.
12.86.
Okay.
15.17 exports.
Okay. And sir, last quarter Q2?
Q2 [Foreign Language] 15.47, domestic.
15.47?
15.98 for export, sir.
15.98.
The next question is from the line of Ritesh Shah from Investec.
Sir, a couple of questions. First is, sir, acrylic as a product. Sir, [Foreign Language]?
Per sheet.
It is on per sheet?
Per sheet by 760 mm by 3660 mm.
Okay. Sir, secondly, [Foreign Language] antidumping duty [Foreign Language]...
Mostly China [Foreign Language]
Okay. But sir, [Foreign Language] Montelli sheet [Foreign Language], Max acrylic sheet [Foreign Language], PMMA [Foreign Language] antidumping [Foreign Language] is it on a particular HSN code?
[Foreign Language] that is under one HS code only. [Foreign Language] we cannot say. But otherwise, it is under one head.
Okay. Sir, [Foreign Language] my understanding, I think, [Foreign Language] 3920 series [Foreign Language], 3921 [Foreign Language], 3506 [Foreign Language]...
Maybe [indiscernible]. I think our solid surface [Foreign Language], it is coming under 1 head only.
[Foreign Language] antidumping [Foreign Language] basically, is it for a particular HSN code, particular thickness? What are the specifications over here?
[Foreign Language] in my opinion [Foreign Language], that is a separate issue. Like our laminates -- thickness wise, yes, it is initiating thickness, that is okay [Foreign Language] 6 mm is also salable, 12 mm is also now. So it is initiated to thickness 6 to 12 mm.
Okay. And sir, any specific composition [Foreign Language]?
[Foreign Language] we don't know too much about this. We just request -- sent a request with the data that this is happening in this product. And in next quarter [Foreign Language].
Correct. Sir, secondly, acrylic market India [Foreign Language]?
[Foreign Language].
Okay. Sir, [Foreign Language] we are the first players -- first company to actually put up a facility and target the local market?
For this, yes. Solid surface [Foreign Language] acrylic, pure acrylic [Foreign Language] we are the only company, pure acrylic. [indiscernible] both lines are from Europe.
Okay. Okay. And sir, just one last question, sir, on the paper, basically for laminates, [Foreign Language], sir?
Mostly paper Europe [Foreign Language]. Germany, Spain [Foreign Language]. Some, only few is coming from China also.
Okay. And sir, [Foreign Language], sir?
Like India, market is growing still.
Sir, pricing trend, sir, [Foreign Language]?
[Foreign Language] there are 2 types: Number one, the craft paper; second is the design paper. [indiscernible]. Craft paper, we're buying from India. [Foreign Language] prices increase, a little between increase [Foreign Language].
Okay. Sir, so my question was [Foreign Language]?
Taxes are never exported. If we want to export any product and all raw material we can import duty free.
Okay. So we are taking that benefit?
Every company, not we. Every -- not laminates. On any product which you want to export, you can import that raw material duty free.
The next question is from the line of Deepak Lalwani from Unifi Capital.
Sir, just wanted to confirm, you mentioned that if not for the Israel situation, your revenues and exports would have been up by INR 18 crores to INR 20 crores for this quarter, right?
Right, right.
Okay. So has this been postponed -- the shipments have been postponed to Q4 or...
No, no, no. Now it is -- I'm quite hopeful, but not [Foreign Language]. Now it is a cold war. Same thing happening in Palestine and Israel. [indiscernible] Israel. Hopefully, very soon, life will be normal, whether they will -- fighting is going on and off. But we are hopeful that coming month, business will rather grow there when they will rebuild everything which is damaged in the Israel war.
Okay. But sir, [Foreign Language]?
[Foreign Language] They already started the flight to Europe. India [Foreign Language].
Okay. Right. Got it. And sir, [Foreign Language] export market is growing, right? So in which regions, if you can mention that?
Every region, almost [Foreign Language] in spite of the slowdown [Foreign Language] [indiscernible].
Sir, [Foreign Language] region-specific [Foreign Language] trend [Foreign Language] Europe [Foreign Language], Middle East [Foreign Language]?
[Foreign Language] even then we're then we are not improving [Foreign Language]
Okay. Sure. And sir, is this backed by end demand, which is increasing for laminates or [Foreign Language] you are gaining some market share from other players in the market?
No, no, market is also growing. We are getting unorganized share also.
Sure. Got it. And sir, raw material [Foreign Language] last few quarters [Foreign Language], are we passing on this through lower realization in...
[Foreign Language] pre-COVID [Foreign Language] understand nobody is asking us to do some little, little -- that is a part of business [Foreign Language].
I asked this question because if I look at your domestic realization, it's down almost 13% -- 12%, 13% on a year-on-year basis. So is there any impact?
[indiscernible] We are weak in domestic market. We are trying to gain it. For this reason, realization is less. Where, if you go to export, our realization will be in spite of these factors it will be more.
Sure. Sure. Got it. Sir, if you can give a sense on domestic next year, revamp [Foreign Language] any strategic initiatives that you are taking...
[Foreign Language] how should we improve and when. We are fully, every country of the world know Stylam. Why not India? [Foreign Language] We will think how we will do it. Surely, it will be done [Foreign Language] quality [Foreign Language] price [Foreign Language]. Now we think it is our second one after USA. After this new plant, architect, Singapore architect [Foreign Language]. We are doing like this, why we are not gaining much in domestic market. So we are more serious thinking about this.
Sure. Sure. Got it. And sir, my last question was on the Red Sea impact. So firstly, on the revenues, any shipment delayed have we seen?
[Foreign Language] the people are helpless. Everyone understand in the world. [indiscernible]
Okay. Got it. So..
And It will be temporarily, it will not go permanently.
Right, right. I'm asking from a revenue standpoint. So revenue [Foreign Language] delay.
I don't think so. Other local customers, mainly [indiscernible], [Foreign Language].
Sure. So if you can indicate how the January month has been for recovery? [Foreign Language].
[Foreign Language].
Okay. Okay. Got it. And sir, in terms of procurement of raw material, [Foreign Language] freight, is that...
[Foreign Language].
Sure, sure. Got it. And sir, [Foreign Language] CapEx -- if you can give a sense, [Foreign Language] funding [Foreign Language]...
[indiscernible] already we have so many almost fixed, the project in America. We are not going to get any [indiscernible]. No need.
Okay. Sure, sir. Got it. And what will be the CapEx investment?
INR 200 crores -- INR 200 crores, INR 225 crores [indiscernible].
The next question is from the line of Adityapal from Motilal Oswal.
[Foreign Language] U.S. and Mexico market [Foreign Language].
Hello?
Hello.
Hello?
[Foreign Language] U.S. and Mexico markets [Foreign Language] FY'23. [Foreign Language]
U.S.?
Yes, sir.
[Foreign Language] If you go through the data, it is increasing. I cannot disclose now. We are already in touch with them who is buying from us. So surely, it will increase.
Understood sir, understood. But [Foreign Language].
[Foreign Language] U.S. is a very big market for us.
It can be as large as Europe revenues?
Sorry?
Europe [Foreign Language].
[Foreign Language] per month.
And sir, just to double click on the domestic part, any activity we are doing to increase our distribution marketing?
[Foreign Language] trying our best. I told last [Foreign Language] that when we're doing extraordinary good and our brand name is established worldwide, why not? We are not taking it in India market. We are trying our best. I'm quite hopeful that next year, there will be more [indiscernible] about this.
The next question is from the line of Keshav Lahoti from HDFC Securities.
Congrats on delivering all-time high EBITDA margin. So just wanted to understand on CapEx side. CapEx, the amount you highlighted is INR 200 crores to INR 225 crores. While I remember earlier, the CapEx was supposed to be INR 150 crores. So what is the reason for increasing CapEx size?
No. INR 150 crores [Foreign Language] plant. We have 3 presses, maybe now we are going 4 presses. This is also reason [Foreign Language] but we have almost the funds are ready with us. [Foreign Language] beautification wise, automation-wise, [Foreign Language] then many new things are coming when we started. Cost of everything, construction cost [Foreign Language]. INR 200 crores [Foreign Language] INR 190 crores [Foreign Language] INR 210 crores [Foreign Language]. It is just started.
Understood. Got it. How would be the CapEx split year '24 or '25 [Foreign Language]?
[Foreign Language] when it will be completed.
[Foreign Language]
You are asking sorry, again.
[Foreign Language].
[Foreign Language] INR 10 crore, INR 15 crore [Foreign Language] next year or quarter [indiscernible].
Okay, okay. Sir, [Foreign Language] larger-size laminates [Foreign Language]. It's more like a new product. [Foreign Language] it will be easy to ramp up this plant. And secondly, you might have some visibility from OEM side also [Foreign Language] larger laminate [Foreign Language] ramp up [Foreign Language]?
Already [Foreign Language] machines [Foreign Language]. Market is there. We will get our customer and already buying. And this -- like [Foreign Language] technology [Foreign Language]. If we go to India, then we have something in mind. [Foreign Language] sale, we have no worry at all.
Understood. That is good to hear. So [Foreign Language] acrylic, Chinese or China or Korean [Foreign Language] lower price may dump [Foreign Language] something duty[Foreign Language].
[Foreign Language] we do not know anything about that. [Foreign Language] the government [Foreign Language]. They understand they are doing something wrong.
[Foreign Language].
[Foreign Language].
Fair point. Sir, [Foreign Language] acrylic 10% utilization [Foreign Language].
Sorry?
[Foreign Language] acrylic 10% utilization [Foreign Language]? Export [Foreign Language] acrylic player.
[Foreign Language] only Korea and China toward [Foreign Language].
Okay.
[Foreign Language] not a new product for Indian market. [Foreign Language] We have no worry about that. We are not at loss even on this.
Okay. One last question from my side. Sir, domestic [Foreign Language] growth [Foreign Language] as you correctly highlighted, quality is -- Stylam is on par with other industry leaders. Sir, what is your thought on the ad side, where possibly the others are spending heavy on ads. So that could be a reason why Stylam is...
Sorry. Again, again?
So as you correctly highlighted in call, Stylam quality is on par with other players in laminate industry. Just my question is, what is the thought on spending on ads in domestic side because others are going aggressive on that side?
No, no, no. That is not a problem. That is not -- we can also go. But when we have no much network. Ad [Foreign Language] we already have a video, already spent 3 years back. [Foreign Language] Then it will be otherwise to somebody who goes in any city of India and their product is not available, then ad [Foreign Language].
Okay. So the idea is...
We are doing our best. Every day, worried about that.
The next question is from the line of Alisha Mahawla from Envision Capital.
[Foreign Language] which was more like down to [indiscernible]...
[Foreign Language]
[Foreign Language]
[Foreign Language]
[Foreign Language]
[Foreign Language] 40, [Foreign Language].
[Foreign Language] INR 200 crores CapEx cut in next year. Sir, domestic market, [Foreign Language] will be [indiscernible] capacity [Foreign Language].
[Foreign Language] this capacity is for compact lamination different sizes. Market is already there in sport. So we don't think there will be any problem.
Okay. Domestic capacity is [Foreign Language]
[Foreign Language] domestic [Foreign Language].
Okay. Okay. And sir, domestic market, any particular focus on market [Foreign Language], which is creating problems in growing [Foreign Language] domestically which market is working and not working?
Yes, actually, [Foreign Language] I have no much right answer. We are trying our best. So we are trying our best. I'm quite hopeful that definitely very soon, it will grow.
Okay. So -- and acrylic [Foreign Language] 10% utilization [Foreign Language] are we breaking even there?
Yes, yes, yes. We have no loss. [Foreign Language] automation machinery are not much and the power [Foreign Language] totally machines automated.
Okay. And except [Foreign Language] the ongoing board [Foreign Language].
[Foreign Language] Israel, Palestine [Foreign Language] due to this [Foreign Language].
Okay. So at least next couple of quarters, we think the export business should continue to do the growth in the business?
Definitely, definitely.
The next question is from the line of Nikhil Agarwal from VT Capital.
Sir, raw material impact [Foreign Language] raw material.
[Foreign Language] Unfortunately, [Foreign Language] but otherwise don't look like this.
Okay. So the cost of raw materials [Foreign Language] Q3. So what was this led by 150 bps around cost of raw materials [Foreign Language] Q3. So [Foreign Language], raw material, [Foreign Language].
[Foreign Language]
[Foreign Language] [indiscernible] prices are mostly stable. So gross margin [Foreign Language] Q4.
[Foreign Language].
Freight cost [Foreign Language] freight cost [Foreign Language].
[indiscernible] order today. [Foreign Language] suddenly strike on Red Sea. Next [Foreign Language] . We will not pay anything to, so far that temporary period we paid. Now every new orders coming with extra charges. [Foreign Language] everyone has the same problem. [Foreign Language]
Got it. And sir, demand scenario, domestic market [Foreign Language] it is slow down in Q3? [Foreign Language]
Slowdown [Foreign Language]. I'm very happy with my result of [Foreign Language].
The next question is from the line of Parikshit Kabra from [indiscernible] LLP.
Sir, [Foreign Language] Q3 export impact [Foreign Language] Red Sea issue, but Q2 [Foreign Language] export impact.
[Foreign Language].
[Foreign Language] Greenlam Industries, [Foreign Language].
[Foreign Language] I cannot comment anything. They have their own offices everywhere. We have no office. And I cannot comment anything.
So Q2 [Foreign Language] only macro headwinds [Foreign Language].
We are doing our best, and we are growing.
Sir, Q2 [Foreign Language] headwind, macroeconomic headwinds [Foreign Language]?
[Foreign Language]
Q2 [Foreign Language] export impact [Foreign Language].
[Foreign Language].
Europe [Foreign Language].
[Foreign Language]
The next question is from the line of Chirag from White Pine.
Sir, my first question is a clarification on the antidumping. So you said the proposal has been given to government, right?
[Foreign Language] You don't [Foreign Language] initiate [Foreign Language].
Initiate [Foreign Language]. From when it is getting implemented? And ...
No, no, no, not implementing. They start the investigation.
They started the investigation. Okay.
[Foreign Language] application [Foreign Language] they will start it.
Okay. So this is one. Sir, second is a slightly different question before I come to. Sir, now that you are looking to add INR 800 crores of new capacity and basically kind of doubling your revenue, so how -- what are the changes that you're making internally in terms of your management bank with senior and middle level management so that you can scale up the exports as well as domestic business, if you can just talk a bit about it?
[Foreign Language] automatically [Foreign Language] we're doing that.
I understand [Foreign Language], but [Foreign Language]. So where are you looking to add more people?
[Foreign Language] proportionately. [Foreign Language]
[Foreign Language]
[Foreign Language] Your own offices, you are doing that, then you need too many. Otherwise, you would not need [Foreign Language]. You have a 100 customers. [Foreign Language] every month.
Okay. So let me rephrase. Greenlam [Foreign Language].
[Foreign Language] This is the best one for us.
So basically, [Foreign Language] distributor [Foreign Language] directly India [Foreign Language] and then they will do the onwards sale?
[Foreign Language] we are not getting. We were thinking doing. Some are end user, some are distributor, some are using their own name, some are giving the Stylam brand.
Okay. Okay. [Foreign Language]...
Yes, yes, yes.
[Foreign Language]
Hopefully not.
Okay. So that was one. Sir, second question was [Foreign Language] plant value addition [Foreign Language], which you're talking about going up to 20 seat also laminate. So is it fungible [Foreign Language].
[Foreign Language] If you want to go 6 feet, then it's okay. 5 feet is okay. Not like 8, 9, 11 then machine will be damaged.
Okay. Okay. [Foreign Language] margin negative effect, right?
[Foreign Language] Everyone is doing [Foreign Language] technical.
Yes, sir. I would like to come sir.
[Foreign Language].
Sir, secondly, [Foreign Language] which country, which players, if you can shed some light?
Competitors?
[Foreign Language]
[indiscernible] They are our healthy competitor, not bad competitor.
Okay. [Foreign Language]. So is it right to make a statement that Europe ...
[Foreign Language] we are looking after to India.
No, no, sir. [Foreign Language].Indian, Chinese, Korean. [Foreign Language] Is that the right way to look at it?
[indiscernible].
[indiscernible].
Mostly. China unorganized [Foreign Language].
U.S. [Foreign Language].
Yes, yes. Same like Indian.
I'm sorry to interrupt. May I request that you return to the question queue for follow-up questions as there are several participants waiting for their turn..
Okay.
The next question is from the line of Harsh Shah from [indiscernible] Stockbroking Private Limited.
Sir, [Foreign Language] quarterly run rate [Foreign Language]. So we have not kind of crossed the INR 240-odd crores. So do we have the kind of visibility for Q4 that we can surpass this?
[Foreign Language] can we think about we will not like that it should cross. We are doing everything. Some kind [Foreign Language] problem [Foreign Language]. We are quite hopeful 240 [Foreign Language]. Still doing good, generally good, now 2 months, still we have enough orders. [Foreign Language] would not be any problem [Foreign Language]. We will try that we can achieve this figure.
Okay. And can -- do you have the number for the number of dealers or distributors in the domestic market as of date?
[Foreign Language] you have 1,000 distributor or dealer. [indiscernible] sheet, no matter. We want the quality. [Foreign Language]
[Foreign Language] quality distributors, but any number you can give?
[Foreign Language]
[Foreign Language] And I will arrange.
[Foreign Language]
[Foreign Language] Export market [Foreign Language] CapEx [Foreign Language] export demand [Foreign Language] order book [Foreign Language]?
[Foreign Language] near to start, then we will ask our people to get already -- they are already using this size. So immediately, there are not only 100 [indiscernible] capacity immediately utilization [Foreign Language].
Sir, but already [Foreign Language] OEM [Foreign Language].
[Foreign Language] customers already, which are buying from us right now, they are using this size also, thereby not all, few. And they are that -- this size they are buying from somewhere else.
The next question is from the line of Amit Kalianpur from East India Securities.
My questions have been answered.
Sorry?
My questions have been answered.
Due to time constraint, that was the last question for today. I now hand the conference over to Mr. Ashish Poddar for closing comments. Over to you, sir.
Yes. Thank you, everyone, for joining us today. If you have any unanswered questions, you can reach out to me or the CFO. Thank you so much, and have a good day.
Thank you very much.
On behalf of Systematix Institutional Equities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.