Event Participants
Executives
2
Aditya Gupta (CEO), Anuj Arora (CFO)
Analysts
5
Apurva Sharma (Raas Capital), Ashvath Rajan (Arihant Capital Markets), Gunit Singh (Countercyclical PMS), Sagar Jadav (Marine Research), Saurabh Jain (Sequent Investment)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹203 crores | +42.8% YoY; driven by 22.9% volume growth and ~15.9% ASP increase from input cost pass-through |
| Volume Growth | +22.9% | Benefited from Morbi supply gap in April–mid-May plus OBL's demand-generation initiatives |
| Gross Margin | 39.7% | Highest ever; aided by effective input cost pass-through and higher own-manufacturing contribution |
| EBITDA | ₹17.6 crores | Up from ₹5.6 crores YoY; operating leverage and realization improvement primary drivers |
| EBITDA Margin | 8.7% | +480 bps YoY |
| PBT | ₹11.2 crores | vs loss of ₹0.6 crore in Q1 FY26 |
| Capacity Utilization (blended) | 73% | Up from 64% in Q4 and 60% in FY26; headroom remains for further improvement |
| GVT Share of Sales | 47% | By value in Q1; 15–20% of GVT supplied from Dora plant, balance largely from Sikandrabad |
| Working Capital Cycle | 18 days | Improved from 20 days sequentially on better inventory and receivables management |
| Cash & Liquid Investments (net of debt) | ₹47.7 crores | Company remains debt-free; internally financing planned capex |
| DSO | Improved 5 days | Q1 improvement aided by sellout support and faster collections |
| Sellout Ratio | ~40% of primary sales | vs 26% in Q1 FY26; company-driven sellout reducing dealer inventory risk |
Geographic & Segment Commentary
South & West (Retail): South retail volumes grew 37% YoY and West grew 60% YoY in Q1, reflecting stronger traction in historically underrepresented territories following the Dora plant expansion. Management expects these regions to continue outgrowing company average. Plant-level utilization is not disclosed due to cross-plant product movement.
Project/Enterprise Segment: Project revenue was 18% of total (orders above 3,000 meters plus direct enterprise team). Retail has grown faster than enterprise for the past several quarters; management is now focusing to add incremental value volume from large builders but has not set a target split.
GVT (Premium Products): GVT accounted for 47% of sales by value in Q1; converting an underutilized ceramic line to GVT (~1 million meters) will further improve mix and asset utilization, expected to contribute meaningfully in Q3–Q4.
Exports (Industry): Industry exports down sharply to ~₹800 crores/month average in April–May (April ₹500 cr, May ₹1,000 cr) vs ₹1,500–1,600 crores pre-crisis, driven by 5–6x higher freight costs to Gulf and geopolitical tension. Export recovery remains uncertain.
Company-Specific & Strategic Commentary
Tech-Driven Sales Ecosystem: Instalook enables dealers to showcase ~50,000 new tile designs monthly; PMT adds 2,000+ new projects monthly; Lakshya tracks daily visits to 6,000 mapped influencers. New AI chatbot Drishti answered ~10,000 sales-team questions in July, providing granular actionable insights — a logical extension of 7+ years of structured data accumulation.
Demand Generation & Sellout Support: Sellout reached ~40% of primary sales volume vs 26% last year, giving dealers confidence to stock despite price volatility. 24/7 TV advertising sustained for over a year to drive brand preference and inquiries; DSO improved 5 days in Q1.
Manufacturing Optimization & Capex: ₹10 crores planned to convert 1 million meters of existing ceramic capacity to GVT; additional ~₹5 crores on digital printing and polishing equipment over the next 4–5 months, all internally financed. Management prioritizing utilization of existing assets before incremental capacity; larger expansion decision expected in 2–3 months.
Tile Adhesives (New Initiative): ₹2.5 crores revenue in Q1, 100% cash-and-carry, minimal capex (no captive plant). Scaling from select North geography to broader North India and parts of East in FY27. No plans to enter bathware; focus remains on the tile-adjacent adhesive segment.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue / Volume | No formal guidance for FY27 | Management cited geopolitical volatility (Middle East, Russia refining losses) and policy of not providing guidance; encouraged by positive input KPIs (PMT, Drishti, Instalook adoption) and QoQ momentum over the last 3–4 quarters |
| Price / Margin | Maintain current pricing and margins near-term | Gas prices in July close to Q1 levels (~₹60); no price cuts taken yet. Management watching market closely and will adjust if industry softens |
| Capex | ~₹15 crores over next 4–5 months | Includes ₹10 cr ceramic-to-GVT conversion plus digital printing/polishing upgrades; internally financed, no leverage required |
| Capacity Utilization | Improvement expected in Q3–Q4 | GVT conversion of underutilized ceramic line to drive incremental utilization and premium product mix |
Risks & Constraints
| Risk | Context |
|---|---|
| Gas Price Volatility | Average gas price of |
| Supply Normalization & Competitive Pressure | Morbi plants resumed operations post mid-May, potentially removing Q1's supply-vacuum tailwind; OBL–Morbi price gap narrowed from ~₹800 to ~₹50–55, signaling converging pricing and potentially higher competitive intensity |
| Export Weakness | Industry exports at ~₹800 crores/month vs ~₹1,500–1,600 crores pre-crisis; freight costs to Gulf up 5–6x; export-led demand remains a key swing factor if geopolitics normalize |
| Input Cost Pass-Through Reversal | ASP increase (+15.9%) was largely a pass-through of higher input costs; management confirmed strategy is to stay competitive and follow the market, implying realization could decline if selling prices soften |
Q&A Highlights
Price Hike Magnitude & Sustainability
- Question: How much price hike was taken in Q1, and will prices sustain given gas prices have softened? (Gunit Singh)
- Answer: Total price increase of ~18–19% taken, almost fully realized. Gas was ~₹60/cubic meter in Q1 vs ₹44–45 pre-war; currently ₹60–62 with no cuts taken yet. July gas prices are close to Q1 levels. Management is watching market pricing but has not committed to future price defense. OBL–Morbi price gap narrowed from ~₹800 to ~₹50–55, which favors organized players. (Aditya Gupta)
Volume Growth Drivers
- Question: What drove the 23% volume growth, and is it sustainable now that Morbi supply is back? (Gunit Singh)
- Answer: Growth came from two buckets: (1) industry supply vacuum from Morbi's shutdown, which OBL capitalized on given its low Morbi dependence; and (2) OBL-specific demand generation —sellout support at ~40% of primary volume vs 26% last year gave dealers confidence to stock despite price uncertainty. Management declined volume guidance but cited strong early indicators from input KPIs (PMT projects, Drishti usage, Instalook adoption). (Aditya Gupta)
Plant Utilization & Regional Performance
- Question: What are Dora plant utilization numbers and its contribution? (Ashvath Rajan)
- Answer: Plant-level utilization is misleading due to cross-plant product movement for market-specific selling. Instead: South retail volumes +37% YoY, West +60% YoY — both historically underrepresented regions — reflecting Dora's strategic role. Blended utilization improved to 73% from 64% in Q4 and 60% in FY26. GVT is 47% of sales by value; 15–20% of GVT from Dora, balance from Sikandrabad. (Aditya Gupta)
Gas Price Stability & Q2 Outlook
- Question: Will the gas cost inflation persist into Q2, or has the bulk been absorbed in Q1? (Ashvath Rajan / Apurva Sharma)
- Answer: Bulk of gas price increases occurred in Q1; July gas prices are close to Q1 levels with only 1–2 rupee fluctuations. However, geopolitical risks remain — including Russia's ~1/3 refining capacity losses and evolving Iran situation — so stability is not guaranteed. Management remains watchful on both gas costs and selling prices. (Aditya Gupta)
Exports Weakness
- Question: What is the current export scenario given freight cost increases? (Sagar Jadav)
- Answer: Exports have fallen to ~₹800 crores/month average in April–May (April ~₹500 cr, May ~₹1,000 cr) vs ₹1,500–1,600 crores/month earlier, primarily due to freight costs to Gulf rising 5–6x and geopolitical tension. Export markets remain depressed, especially Gulf region. (Aditya Gupta)
Cash Deployment & Capex Plans
- Question: How will the company use its ~₹75 crores cash balance productively? (Ashvath Rajan)
- Answer: ~₹15 crores committed over the next 4–5 months for ceramic-to-GVT conversion, replacing digital printing machines, and adding polishing machines — all internally financed. Management is evaluating next-stage manufacturing expansion, with a decision expected in 2–3 months. The larger cash balance is earmarked for business reinvestment, not distribution. (Aditya Gupta)
Tile Adhesives & Product Expansion
- Question: What is the outlook for the tile adhesive business and any plans for bathware? (Ashvath Rajan)
- Answer: Adhesive revenue was ₹2.5 crores in Q1, operating on a 100% cash-and-carry model with no major capex (no captive plant). Scaling from select North geographies to broader North India and parts of East in the current year. No plans to enter bathware — focus remains on the tile-adjacent adhesive segment. (Aditya Gupta)
No Formal Guidance
- Question: Can you provide revenue and EBITDA margin guidance for FY27? (Saurabh Jain)
- Answer: Policy is not to give forward guidance, especially given current volatility (Middle East news changes every few days). Management is encouraged by quarter-on-quarter momentum over the last 3–4 quarters and positive input KPIs related to demand generation, customer engagement, and market penetration, but no specific numbers were shared. (Aditya Gupta / Anuj Arora)
Key Takeaway
Orient Bell delivered a strong Q1 FY27, with revenue up 42.8% YoY to ₹203 crores, driven by 22.9% volume growth and 15.9% ASP increase from input cost pass-through. Gross margin hit a record 39.7%, EBITDA margin expanded 480 bps to 8.7%, and PBT swung to ₹11.2 crores from a year-ago loss. The quarter benefited from the Morbi plant shutdown (April–mid-May), which created a supply vacuum that OBL capitalized on via its low Morbi dependence and ~40% sellout support; tech tools (Drishti AI, Instalook, PMT) are driving secondary sales and dealer confidence. Management remains optimistic on long-term housing, infrastructure, and innovation demand, but declined to provide guidance amid geopolitical volatility, citing stable July gas prices, narrowing OBL–Morbi price gaps, and an ongoing capacity expansion evaluation as key watch points.