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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 Visaka Industries Limited Q1 FY '24 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded.I now hand the conference over to Mr. Irfan Raeen from Orient Capital.
Thank you, Lizan. Good afternoon, everyone. On behalf of Visaka Industries Limited, I extend a very warm welcome to all participants on Q1 FY '24 financial results discussion call. Today on the call, I have with me Mr. Vamsi Krishna sir, Joint Managing Director; Mr. Shafiulla sir, Chief Financial Officer. I hope everyone had an opportunity to go through our investor deck that we have uploaded on exchanges and on company's website.I would like to give a short disclaimer before we start the call. This call may contain some of the forward-looking statements, which are completely based upon our beliefs, opinion and expectations as of today. These statements are not guarantees of our future performance and involve unforeseen risks and uncertainties.With this introduction, I hand over the call to Vamsi sir.
Thank you so much, Irfan. A very good afternoon to everyone. I am pleased to share with you the highlights of our Q1 FY '24 performance. But before we start discussing the quarterly performance, I would like to give, with an intent of keeping our investors and analysts familiar with, an update about developments in our businesses. We have had the opportunity to meet some of you at our Annual General Meetings and otherwise. But we are also interacting with a few of you for the first time.To my mind, it would be worthwhile to delve a bit on our company and brief you also about the products we manufacture and the applications. I trust this will be helpful to all participants. I must state that all discussions here will be within boundaries reasonably imposed by the company's strategic and competitive position. Over the last 4 decades, the company has established itself as one of the leading building construction material providers and a dependable synthetic [Audio Gap] in India with 13 manufacturing locations spread across the country. We have been growing our manufacturing capacity in line with the optimistic growth of India.What the government is doing on the macro infrastructure side, we are replicating at our corporate scale. The last 2 years, Visaka has invested in new and additional manufacturing capacities of our Vnext fibre cement boards and panels and our cement roofing as well. This rapid expansion is helping us to transform the company's growth. We have reached a position where consumers are well aware of our products, our product attributes [Audio Gap] to make a more informed purchase.A large number of projects, including the ones like the Parliament House in New Delhi and the Surat Bourse which were largely talked about. In India, India is possibly the most [Audio Gap] major economic growth story that we are seeing today. It is growing fast on an expanding base, indicating a critical mass of economic expansion. The 2 most drivers of this Indian economy comprise its spending per household and increased number of households. The prospects of our company cannot be appraised in isolation. They are linked to what is transpiring in the nation. Our company's products have inevitably capitalized on this reality across all our business segments.Government's various policies to incentivize those seeking to the low-cost homes is inspiring a new tailwind in the country's housing sector from the grassroots and upwards, which is widening the housing market, especially in the rural and semi-urban India. Our products are expected to ride this reality. The need to live better underlines the fact that people will need better roofing, alternate home partitions and sustainable construction materials and tools, taking our business product verticals ahead.Coming to a quick review of each business segment and quarterly performance. The company has achieved a revenue of INR 447 crores for the current quarter, the Building Products revenue for the quarter stands at INR 385 crores and the Textile turnover is at INR 62 crores. There is a general slowdown in the global economies with uncertainties and challenges like high commodity prices and high inflation. The demand for consumable products is very low during the present quarter across the globe. However, I would like to say that the demand for our products continue to remain good.Our roofing business, which is our legacy business, has done its highest volumes previous year 2022-'23 and maintaining the same momentum during the current year as well. Last year, we had an increase in our capacity and commissioned a new line at our Raebareli unit to meet for some of the demand and our products. The capacity utilization for Q1 FY '24 stood at more than 100% for our roofing businesses. The increase in main raw material costs, that's for chrysotile fibre has impacted the margins drastically compared to our previous years. The prices are now looking to be stable and we are expecting to do good volumes for the rest of the year as the whole rural income is down at the moment.Moving to our Vnext businesses. The Vnext has seen a tremendous growth in terms of volume of almost 43% over the past year. Speaking about the robust demand for our products, I am pleased to inform that the capacity utilization of Vnext in Q1 FY '24 has stood about 85% and expect to increase in the coming quarters. Vnext, with its unique advantages over the conventional products, has a huge marketplace. We remain very optimistic about the future as the product's acceptance is increasing day-by-day.We are glad to announce that the product, Vnext, is also part of the new Parliament building as well as the Surat Diamond Bourse, the world's largest office building with a combined covering of more than 5 lakh square feet. Vnext boards are an eco-friendly [Audio Gap] alternative product to plywood, gypsum board, wherein the product is both fire and termite resistant. The use of our products for such constructions like the Surat Bourse has helped to save over 100 trees from being [ quarried ] and over 45,000 carbon emissions.In order to meet growing demand for our products, we have done a 72,000 metric tons of greenfield expansion at West Bengal Midnapore, which is expected to be operational in September 2023. By demonstrating the capacity to absorb costs, the company's products continue to deliver a superior price value proposition. The company showcased its resilience in terms of performance on year-on-year basis. We are optimistic about the industry as a whole given that the Building Material segment is expected to grow at a pace of 8% to 12% for the next 4 to 5 years due to the various demand [Audio Gap] including India's organized urbanization drive.With rebound in the real estate market and healthy outlook for hospitality and healthcare sectors, we expect our businesses to continue the momentum in the coming quarters. The Vnext business, which has started from scratch in 2008, now would likely touch around INR 450 crores by the end of this year 2024 and has informed targeting a turnover of INR 1,000 crores by the year 2030 with an estimated investment of around INR 500 crores over the years.Coming to our ATUM business, solar cells embedded into the fibre cement boards, making it a composite integrated solar roof with unmatched mechanical properties. This business of ours is in line with the national goal of achieving 500 gigawatts of installed renewable energy by 2030, which includes the installation of 280 gigahertz of solar power, making our product a game-changer in the industry. We have patents for ATUM, as some of you may already be knowing, in India, U.S.A. and South Africa. And all 3 countries are great potential for our product. We have done projects for Mahindra, BPCL, Piramal and the Rainbow Hospitals and several others in the first quarter, which will lead us to many repetitive orders in terms of traction for the product. And we see that the outlook for this is positive in the quarters to come.Our synthetic yarn business for the current quarter has been reasonably good, considering the sluggish demand in the sector. Most of the textile businesses have shown drop in turnover for the current quarter compared to previous. We were able to manage the turnover with a good price and return [Audio Gap] yarn produced by recycling of used PET bottles has been rapidly growing. There is great potential in the export market for this product as well. Our capacity utilization for synthetic yarn in Q1 FY '24 stood at 88%.I will now discuss the Q1 FY '24 financial performance. The revenues for the quarter stood at INR 447 crores versus INR 479 crores in the previous [Audio Gap] Segment break-up, the Building Products revenue for Q1 FY '24 stood at INR 385 crores against INR 391 crores in FY '23 Q1 and EBIT of INR 27 crores as compared to INR 53 crores in the previous quarter. The synthetic yarn revenues for Q1 FY '24 stood at INR 64 crores -- INR 62 crores against INR 88 crores in the previous quarter. EBIT for the quarter for yarn segment stood at INR 8 crores compared to INR 12 crores in the previous quarter.The EBITDA including other income, stood at INR 38 crores as compared to INR 66 crores, resulting in a degrowth of 42% on a sequential quarter. Compared to Q4 FY '22, the EBITDA grew by 35%. The EBITDA for the current quarter Q4 '23 stood at INR 28 crores. There was a huge impact on the raw material input costs, mainly of the price in fibre due to the Russia and Ukraine, due to which there has been a significant drop in our margins. PAT stood at INR 12 crores as compared to INR 38 crores in the previous quarter and for Q4 FY '23 it stood at INR 5 crores.The borrowings of the company, company has gross debt of INR 410 crores, which is considered as moderate due to aggressive expansions that we had undertaken in the recent years. The high interest and depreciation also added to decrease in profitability due to higher CapEx and borrowings currently. With better performance and cash flows in the coming quarters, we expect our borrowings to come down and with lesser interest costs. As the world moves forward with reducing the impact of global warming, we continue to strive towards being sustainable by leading the way across all our verticals, say the Vnext business or The Wonder Yarn business or the Solar ATUM.With this, we'll open the floor for questions and answers. Thank you very much.
[Operator Instructions] The first question is from the line of Rahul Dani from Monarch Networth.
My first question is regarding our Vnext division. We've done pretty well. Just wanted to get some idea as to what kind of order book do we have and what kind of capacity utilization do you expect for the same for this year?
Yes. So for the Vnext business, capacity utilization so far has been around 88% to 90% in the first quarter. We are seeing that the uptake is increasing [Technical Difficulty] And with our new plant coming in, in Midnapore, we see that the overall distribution cost of the division will be better as the newer plants come in. So overall, we see the demand for the product is very, very good. We are seeing a very bullish outlook of almost around 25% to 30% in terms of growth rates in this space. I think we'll be [Audio Gap] numbers in this division.
Sure, sir. That's very helpful. Sir, my second question is, as you know, also we are shifting in concentration away from roofing business to other segment. So I just want to understand in the next couple of years, what kind of revenue split do we see from each segment? And any CapEx lined up for the future? That's my question.
Absolutely. I think actually I missed to mention this point. We as the company had taken up a goal to make our legacy business to new age business in terms of revenues to equalize. And I think we'll be very happy to share that by FY '25 we should see a 50-50 ratio in terms of new businesses to the legacy business. And in terms of investments, as I just shared, we are looking at Vnext division to be a good growth driver for us in terms of the product acceptance and in terms of the product deployment. So we will be having a couple of more investments in the Vnext space more seriously as we have talked first. We are also looking at smaller investments in the textile space based on how the market outlay is. Investments will be majorly in the new [Technical Difficulty]
Sorry to interrupt, sir. Your audience breaking up.
Yes. I was saying that our new business revenues up to the old business, the legacy business revenues would equate about 50-50 ratio by FY '25. And going forward, our investments will be more concentrated in the Vnext businesses, high growth rate business that we are concentrating on. And we look to double our revenues in the Vnext space over the next 5 to 7 years. That's the outlook that we are looking at in terms of growth in this space.
The next question is from the line of Anika Mittal from Nvest Analytics Advisory LLP.
My first question is, sir, our Asbestos-based product have been badly impacted because of a reliance on Russia for the raw materials. Do we have similar dependence on any other raw material which we import from any other country or do we have multiple sourcing options to avoid the dependence?
Yes. So if I understood correctly, you're asking about the raw material import dependency from Russia for the legacy business and if such similar dependency. No, actually, that is one of the primary reasons why we are looking to expand and invest further into the new edge new growth businesses where we don't have such dependency. [Audio Gap] quite a few multiple sources of raw material inputs and different countries that we have those sources from. So we are fairly secured [Audio Gap] our new age businesses in terms of inputs, yes.
Okay. Sir, my second question is, post commissioning of new Midnapore plant in the current quarter, can we expect more order inflows from export business?
Sorry, I didn't understand the second one. Can we expect...
Can we expect order inflows from export business? Orders inflows.
For our export business of Vnext? Is that what...
Yes.
So Vnext as a product has found great acceptance across the country and across the globe now. In fact, we are exporting to more than 25 to 30 countries across the world. And the demand has been slightly varying because [Audio Gap] global impacts that are happening in various parts of the world. But the offtake in terms of Vnext has been quite promising. In fact, our exports have been quite stable. We are looking at almost roughly about 25% or 30% of our production that we can cater to the export market. But it will keep varying based on better pricing structure that we get with entire terms of our long-term growth. So that's the reason why we had more concentrate in the Indian market.
Okay. Sir, my last question is, does the export business have better margins? And going forward, can we expect more traction in that particular direction as our exports for board division has been 20% or 21% in the last 2 years?
So it really matter, it depends on the country to country in terms of margins and that we are very active in terms of what and where we concentrate and what volumes we sell. I think it goes more into day-to-day operations in terms of are we getting better pricing from so and so country versus what [Technical Difficulty] any other country for that matter. So it's a case-to-case basis. And we try our best to maintain the market and ensure that we get the best profitability for our products.
The next question is from the line of Dhananjay Kumar Mishra from Sunidhi Securities.
So my first question is that you said that the way you had a very good volume in Vnext. So can you give -- what is the break-up in terms of revenue of INR 380 crores Vnext...
Sorry to interrupt, Mr. Mishra. We are unable to hear you clearly.
What was the revenue contribution in Vnext this quarter? And what was the growth?
So I will not be able to give you a specific number in terms of the revenue contributions of Vnext, but I can tell you that the growth rate has been from last year to this year, it has been around 5% to 10% for the first quarter because we've seen an overall slowdown. But going forward, we are looking back to numbers of 25 plus in terms of our growth rates for the Vnext business.
Because you also said that we will be doubling in next 5 to 10 years -- 5 to 7 years, meaning that CAGR will be just 13%. And when demand is so good and you are also adding capacity in H2 FY '24 close to 72,000. So our capacity will be almost 25% more from current levels. So what kind of growth you are expecting at least for this year or next year in this Vnext?
I'm sorry, I am not able to fully understand what you're saying. Your line is...
See, our capacity is 5.5 lakh and then we are adding 72,000 tons in H2, by September, right? So what kind of growth we are touching for this particular year in Vnext, although the...
Understood. So like I've shared, I think year-on-year, our growth we are looking at around 25% upwards. So that's the track that we've been having over the last 2 to 3 years also. Going forward also, we see a similar rate. 25% growth year-on-year is what we can expect from the Vnext business.
And what kind of margin we are doing in Vnext?
Margins, I think have grown significantly. We can look at upwards of 15% gross.
15% EBITDA margin on a yearly basis?
Yes.
And my second question is, although all your peers were saying that chrysotile fibre prices is new normal and now we cannot expect much decline in fibre prices, we'll have to increase prices to get to our normal margin we would grow in the roofing segment. So is there any possibility to increase prices maybe in Q3, Q4?
So let me I think make myself more clear in terms of Asbestos pricing. I think if you see the industry, the history of this industry, every 5 to 6 -- 5 to 7 years, there is a spike in terms of the fibre costs over the last couple of decades, if you observed. And this year, this time, unfortunately, it has been because of the war. And the war situation has been quite unprecedented, as we all know, and we've been waiting for that situation to settle down. But what we've been observing is, because of that, the input costs have taken almost a 25% upward trend in terms of the impact of costs. And the offset that we could do in selling price was hardly about 2%, right? So it's almost 10x in terms of costs that have gone up in spite of our selling price uptake.So that is what we are trying our best to maintain in terms of our expenses and ensure that our input costs come down and ensure that the prices go up. Having said that, the selling price increase, since we all know that this is a rural product, has its price limitation in terms of how much we can push upwards in terms of price. We are trying our best to offset the input cost increase with various other measures. So that's been the focus right now for our company.
And lastly about solar roofing. So how has the response for that product? And do you see that portion or that share to grow in next 1 to 2 years?
Yes, absolutely. I think that has been one of the new initiatives by the company. And I always like to mention that it has been a very exciting journey for us to enter a new space with a new product where even the market, even the solar market has not seen such a product. And the gestation period has taken time in terms of product acceptance, in terms of product spread. And we are seeing a very positive sign in terms of getting repeat orders from the same customers that we have supplied over the past 3 years. And that is what is giving us a good boost in terms of an outlook.I think in the next couple of quarters, you should be hearing a lot more projects in terms of deployments, in terms of execution and in terms of growth. So I would say, a good idea for how the ATUM is driving should come within next maybe 10 to 12 months to be realistic in terms of how well the product is taking off. But let me assure you that we are on the right track in terms of the product deployment.
[Operator Instructions] The next question is from the line of Madhur Rathi from Counter Cyclical Investment.
Sir, from the previous participant's question, you are saying that our Vnext division is expected to grow 20% to 25% over the next few years. So why are we only guiding for doubling our revenues in the next 5 to 7 years? Because it will be a lower target than what the growth we are seeking. So if you could help me -- need some clarity on that it would be very helpful.
So you are asking, if we are projecting a growth of 20%, 25%, why is there not a faster revenue uptake? Is that what you're asking?
Yes, yes. So we are only guiding for INR 1,000 crores in FY '30. So regarding that.
Yes. So the projections are based on various market conditions, and as I'm sure you all understand, and the rate at which the product has been accepted and the way we are looking at. Taking all things into consideration, we feel that this will be a good target for us in terms of where we are standing. It took us almost 10 years to reach the stage of growth that we have today. And going forward, I think we are very bullish in terms of how things are.If there is any opportunity at all in terms of speeding this up, let me assure you, we will be the first to grab that in terms of market capacity. Since we've started today, we are selling almost INR 1 crore square feet per month. That is the deployment that is happening month-on-month for the product. And there is severe competition looking at us in terms of how we are performing. There are new players entering the market. In spite of all that, I feel the brand name that Vnext has created in the network, in the project base and the architect space, I think this will be a good achievement in terms of the way forward. Having said that, any opportunity that we can do a better and faster job, let me assure you, we'll be right there and ensure that happens.
Okay. So this will be kind of a conservative number?
Sure.
Yes. And sir, the next question would be, sir, our...
Sorry to interrupt. Mr. Rathi, can you speak a bit louder? We are not able hear you.
Sir, on the roofing segment, our revenues have been similar to what we had previous year this quarter, but our margins have improved. So are you seeing some kind of improvement on the Asbestos sheet segment altogether or how is the industry performance? So if you could highlight on that.
Yes. I think unfortunately, the war's impact has been quite long. I think we were not expecting the impact to be for such a long time, but nevertheless, that has been the reality. And because of that, the input costs, as I was sharing, has been on an uprise. And the company is trying various methods to offset these increases and ensure that our margins are maintained. It has been a challenge in the first quarter in terms of offtake because of various parameters and the input cost. So going forward, the focus of the company will be to ensure that we curtail our expenses and ensure that we do the best cost benefit analysis in terms of every sale that happens. That is the strategy for the roofing business going forward.
Okay. And sir, my final question would be, on our AGM, you have guided that our yarn business is a high-margin segment and you are into a specialized kind of recycled yarn, but our margins and revenues have been declining constantly. So why is that? What is the view going forward?
Yes. I don't agree that the margins have been decreasing constantly. It's been only this quarter in terms of a margin drop that we've seen in the textile space. That is because of a overall dip. In fact, many companies have taken severe shutdowns and there have been severe actions taken in the industry. But we have been able to maintain a basic -- a smaller drop, I can say, compared to what has been happening in the industry.The outlook for textile has always been very cyclical and a rapid uptake and rapid downtake in terms of our experience over the so many years in this space. I think a good outlay for you would be that we will ensure that whenever the markets are doing well, we are getting the highest premium for the product that we make, which is the reality. And whenever there is a downturn, we are the least impacted compared to the competitors in this space given that we are in that niche. I trust this answers your question.
And my final question would be, when do we see both our segments going into a steady state? And some kind of guideline on what could be our revenues for maybe next 1 or 2 years and margins as well?
Yes. I think definitely, the new businesses are in a comfortable position in terms of take-off like I've shared and reiterated. The margins are improving for Vnext as well. Last couple of years, we've added 2 new plants. And this year, we'll be adding another plant. And we are looking at further expansion in this space given the rapid acceptance and growth in the product. So the margins also are improving year-by-year or rather quarter-by-quarter in for the Vnext case.So overall, I think the company's growth will be in track driven by the Vnext space. That's what we are looking at, supported with the solar and the textile business. That is what the general out-take is. The roofing business, we will see to be a more stable addition in terms of our turnover. We should be able to maintain our costs and our expenses to have steady margins in that space will be a good outlook for that.
The next question is from the line of Sanchita Sood from RoboCapital.
Yes. What I wanted to ask was regarding the chrysotile fibre prices. What are they currently? And as compared to, say, FY '23, by what percentage have they gone up? And another question is that when can we expect the overall margins to resume to, say, FY '22 or FY '21 levels? Like when can we expect them to come back to those levels again?
Sure. So in terms of fibre costs, actually the fibre cost have gone up by almost 22% to 25% in terms of last year what we've seen. And we've been able to offset hardly 2% in terms of increasing our selling price for that space. Looking at the way things are moving, I think based on the input that our suppliers have been sharing with us, as the war situation settles down, I think we will see a normalization of the prices in terms of stabilizing or reducing from the current levels. Having said that, the company's efforts has been constantly to be, I can't say independent as there is dependency on this raw material for making the products, but we are regularly trying to come up with how best we can reduce the cost by offsetting different expenses that we undergo.
Finally, I just wanted to ask what would be your outlook on the debt levels for the next 2 years?
I think the debt levels should be coming down if we are not taking any further expansions in terms of new projects. Actually, the interest cost and the depreciation account has impacted us in terms of the overall numbers. But we are seeing a positive outlay in terms of our cash flows from the new businesses that we are having. Second, I think the debt will definitely come down in terms of overall outlook. Having said that, once we look at further expansions on new age businesses, like Phoenix, we might see a similar line, but it's not a reduction. That's the general offtake might take.
The next question is from the line of Chirag Vakharia from Budhrani Finance.
Sir, just wanted to get your sense for FY '24, what margins do you expect for the roofing business? And going ahead, where do you see this?
So margins will be definitely under pressure because of raw material prices. So based on [Audio Gap] achieved in Q1, I think definitely with the measures that we are taking in terms of reduction -- reducing our expenses, we'll be definitely slightly better than what we've experienced. But I wouldn't show a highly bullish picture in terms of the roofing business in terms of the pressure that we are in.
Okay. And sir, for the yarn, you said you were specifying about the margins. What range do you see margins in good times and in bad times, sir?
So margins in yarn business have been pretty steady. In fact, 15% upwards has been what we've been observing in the yarn space. And I think there has been about 2% to 3% drop in Q1 compared to the previous quarters. But some years, we've even seen about 18% upwards. So we will say that the yarn business should -- we will book the revenues and turnover based on the market situation. I think the outlook is that in another 6 to 8 months, there will be stability in terms of overall textile industry.
Okay. And sir, in the roofing segment, sir, in terms of growth and demand, what's your outlook, sir? How is it shaping out?
I think roofing has been an interesting space since the last couple of years in terms of demand being there in the rural markets. So as you all know, the Indian market is evolving almost every year. And our journey in this roofing space is to capture the rural market, right? People who are moving from [ packed ] roofing to cement roofing is the market space that we cater to. And over the years, if you take about -- talk about Visaka being in the market for 40 years, the market has shifted from South to West to East to now North. So North and East are the primary markets where the demand is coming from for the overall roofing space. And that's the reason why we wanted to increase our capacity in the North to cater to this demand.I think overall as an industry, I think the numbers may be equal, maybe hardly maybe around 3% to 5% growth we can observe on a good time. But it is more about how best we can cater to the growing markets in the rural space. That is what the focus of the company should be. And to reduce expenses to offset these input costs that we are seeing.
Okay. Sir, any CapEx plan for next 2 years?
We have some planned for the Vnext business that we will be sharing soon as the time comes. But -- and the textiles, we have already shared I think last quarter also that we'll be taking up some investments to expand in the textile business. Nothing for the roofing space for now.
The next question is from the line of Aditya from Securities Investment Management.
Sir, if you could just talk about the pricing trends we are witnessing in the roofing segment. So generally, what we see is that in Q2, the industry takes price cut of around 3% to 5% as compared to Q1. So are we witnessing similar trends this year as well?
Yes. So we are trying our best not to get a dip in Q2 in terms of pricing giving the pressure for us. So we are trying our best to ensure that we do maintain the market with [Audio Gap] the price in terms of what we are experiencing. So I think to be very fair and open in this space, this Q2 will be a challenge to ensure that the prices don't fall from the Q1 time.
So sir, have we taken any price cuts in Q2 for the roofing segment?
No, not at the moment.
Okay. And sir, if you could just talk about the capacity addition in roofing segment. Are there other players in the industry increasing capacities? And what impact would it have, if any, on the pricing?
Yes. I think I'm hearing that one of our competitors is trying to do some expansion for the roofing space. But I think we are concentrating heavily on increasing and capturing our roofing networks. Visaka's strength has always been to highlight and capture new markets. I think that has been a strength for us since beginning where we hire new dealers and expand new markets. So I think we will be, I wouldn't say, totally unaffected, but we will still be in a comfortable position even though competition comes. Our strategy is to constantly capture the growth market. So that's what our take would be on that.
Got it. Sir, which is the geography where the capacity is coming up? And what would be the size of that capacity, any idea?
I think you will have to check with the competitors. I will not be able to comment on that.
Got it, sir. And sir, I have a question on Vnext segment. So if the total raw material cost is INR 100, which are the major raw materials that would constitute this in the Vnext segment?
Sorry, can you repeat that, please?
Sir, if the total raw material cost in the Vnext segment is INR 100, so which are the major raw materials which would constitute that?
Raw material split. Yes. So the major raw material for that would be I think pulp costs that we incur for Vnext space. But it is not as similar to what we experienced in terms of fibre. In terms of quantity, it's much lower and suppliers also are plenty in that space. So I think we are in a comfortable situation in that.
Got it. And sir, is the distribution for our Vnext segment and roofing business similar?
Distribution for Vnext and roofing is I think the similar quantum is hardly 10% to 20%, not much. We have deployed a completely new network. In fact, Vnext business is more of an urban dealer, urban metros is what we cater to in terms of our product. And roofing segment is more of a rural market. So it's more of a Tier 2, Tier 3 belt.So just to give you an idea, we have almost about 10,000 selling points for the roofing segment across the country in the rural space. And for the Vnext space, we've reached about 3,500 selling points in the major metros across the country that we operate. So that is the -- just to give you a rough outlay in terms of what we -- where we stand. And just to add to that, we sell through the gypsum network that we established in the country [Technical Difficulty] of Vnext through gypsum outlets and 20% through plywood outlets as well. But just an idea for you in terms of where the growth is.
Got it, sir. Sir, which would be the competing materials for our Vnext segment? Would MDF and plywood be the competing materials for the Vnext segment?
Actually, not plywood. It would be -- not MDF, it would be plywood and gypsum board. So for the drywall partitions where plywood is being used traditionally, Vnext have substituted them. And for the fall ceiling applications where gypsum is used at large, Vnext is substituting that. So these are the main pockets where we cater to.
The next question is from the line of Jasdeep Walia from Clockvine.
Sir, what kind of the EBITDA margins have you been able to achieve in the Vnext business? What has been the trend last 2, 5 years?
So we've been growing constantly in the Vnext space. So right from the last couple of years, we've seen margins go up right from 8% to 10%, 12% and now we're doing upwards of 14%. So we are around 15% mark in the Vnext business.
Got it. And sir, these margins are now sustainable or with the increasing scale there is potential to increase the margins further?
Surely, surely. Yes.
So there's potential to increase margins?
Yes, yes.
Got it. And what do you think the ideal margins would be in the long-term?
I think that would be hard to comment because the market is still expanding so drastically and plywood guys have also activated themselves in terms of protecting their market. But I can give you an idea that it's in a positive trend from where we are standing.
Got it. And sir, you mentioned some new competitors have entered this space. Can you name these companies?
Not new competitors, the existing competitors themselves are becoming more active as we have been growing. They are also trying to expand. So that is what I wanted to communicate.
Got it. Sir, I understand you have around 32% market share in this business, which are the second and third largest companies? And what kind of market share do they have?
I think the second and third will be much behind us because I think right now we are far ahead in terms of installed capacity as well. And we have been adding capacities, like I shared, Midnapore also we'll be opening up next month. I think -- I don't want to comment much on the competitors, but I can share that there's quite a good gap between us and the second player as well in terms of installed capacity and sales as well.
The next question is from the line of Satish Kumar, an Individual Investor.
Okay. Sir, in ATUM segment, when we reach 60 megawatt full utilization, what revenue we can expect, sir?
So in ATUM, if we do about 30 megawatt, we'll be seeing anywhere between INR 85 crores to INR 90 crores in terms of revenue and 60 would be double of that, around INR 170 crores to INR 180 crores.
Okay. So last quarter, we released some pledge. So what is the remaining pledge percentage, sir?
I think that I'll ask my CFO to take that. Mr. Shafi, can you please comment on that?
Yes. Around 8% still pledge is there. On the promoter share, it is 57% of 1 promoter. I think it will be released shortly. Last time you've seen that released. Again, we are trying to release further also if promoters are trying to release. It will not be more than that. It will be hardly anything. About 5% to 6% pledge is there.
Okay. Sir, last question. So what is the asset turnover ratio we expect from new West Bengal plant, sir?
It's 1:1. The investment is around INR 80 crores to INR 100 crores and we should be getting around that same for in terms of revenues as well.
Sir, I'm continuing. Sir, in Hyderabad I think we are investing around INR 75 crores for land. So any plan we have in mind for that land?
Actually, we've been wanting to expand in terms of our set-up and get into R&D for that as well. And that's the reason why we got into that. We have plans to make good visibility for that. We will share the details on that very shortly.
The next question is from the line of Mukesh Panjwani from WC Securities.
Yes, sir. Our Vnext division has been performing very well in the past and it's expected to do very well in the future too. Despite the fact we see that market is not giving good valuations to the entire, like Visaka Industries. So wouldn't it be a good strategy to demerge this Phoenix division so that it can unlock the value for shareholders?
Sure, sure. I think we've been discussing that topic internally as well. I think we will get back to you on the right decision that we end up taking on that space. But point noted. I think it's a valid suggestion. We will discuss on that.
[Operator Instructions] As there are no further questions, I now hand the conference over to the management for the closing comments.
So thank you, everyone for joining us. I think we had a good exchange of thoughts and information. I can assure you all that the company will continue to seek to play its strengths and ensure that we are doing strong and performing well in all our business segments across the country and across each vertical, like the roofing, in the boards, the textile and the solar businesses. We are optimistic of ensuring that we capture the growth attractively and profitability, enhancing value for all our stakeholders.I hope we have been able to answer all your queries. If you require any further details, please do contact us or Orient Capital, our Investor Relations partner. We will be very happy to have a sit down and go into further depths. Thank you, all. Have a good day.
One clarification, sir. The pledged shares are about 15.68%.
Okay. Thank you, everybody.
Thank you members of the management team. Ladies and gentlemen, on behalf of Visaka Industries Limited, that concludes this conference call. We thank you for joining us. And you may now disconnect your lines. Thank you.