Half Year 2026 Al Maha Ceramics SAOG Earnings Call

August 25, 2026

Speaker #1: Alright. October.

Speaker #2: This meeting is being recorded.

Speaker #1: Start here. Spoken on mute. Off now. Mic on. Yeah. Good morning, everybody. I'm Rajiv Singh. Welcome to today's meeting. While a few of the guests are still joining in, we are taking everybody in.

Rajeev Singh: Good morning, everybody. I am Rajiv Singh. Welcome to today's meeting. While few of the guests are still joining in, we are taking everybody in. I thank you, everyone who so ever are here to attend this meeting, which is hosted by Al Maha Ceramics. In order to give you a brief on the business, what we have been through, I think just a small presentation we have made, and I will request my finance manager to share the presentation and let the audience go through it. He will take you through the presentation.

Speaker #1: So, I would like to thank everyone—whoever is here—to attend this meeting, which is hosted by Al Maha Ceramics. In order to give you a brief on the business and what we have been through, I think we have just a small presentation that we have prepared. I will request my finance manager to share the presentation and let the audience go through it.

Speaker #1: And he will take you through the presentation.

Speaker #3: Good morning, everyone.

[Company Representative] (Al Maha Ceramics): Good morning, everyone.

Vikas Shukla: Good morning, everyone.

Speaker #1: Who came first? I said I don't know. Okay. Yeah.

Rajeev Singh: ऊपर का message हटा दो ना, okay है यहाँ।

Speaker #3: Hello. Good morning, everyone. We are presenting for, till Q2, half a year past. FY26, half year. So this is the data, both ways.

[Company Representative] (Al Maha Ceramics): Hello. Good morning, everyone. We are presenting for till Q2 H1, FY26 H1. This is the data.

Vikas Shukla: Hello. Good morning, everyone. We are presenting for till Q2 H1, FY26 H1. This is the data.

Rajeev Singh: Slides तो कम से कम करें।

[Company Representative] (Al Maha Ceramics): दो बार किया, sorry.

Vikas Shukla: दो बार किया, sorry.

Speaker #3: Just, sorry.

Rajeev Singh: Can you check the presentation mode and maybe you can do. Something is wrong. को बुला लेना यहां पर।

Speaker #1: I just—presentation mode—and maybe you can do something. Is something wrong? Cool. So, I think stay there. No problem. Admit. Yeah. Hold on for a while, because in presentation mode, the slides are not moving.

[Company Representative] (Al Maha Ceramics): अच्छा।

Vikas Shukla: अच्छा।

Rajeev Singh: I think stay there, no problem. admit कर लो। Please hold on for a while because on presentation mode, the slides are not moving and we are just sorting out the technical glitch. I am really sorry for the inconvenience. Non-presentation mode only. slide open ही कर दें। बहुत सारे खोल रखे हैं। हो रहा है भाई?

Speaker #1: And we are just sorting out the technical glitch. I'm really sorry for the inconvenience. Non-presentation mode only. Slide open. बहुत सारे खोल रखे हैं। So, sorry for the inconvenience.

[Company Representative] (Al Maha Ceramics): Okay.

Vikas Shukla: Okay.

Rajeev Singh: Just a moment. Sorry for the inconvenience. We are again starting with the presentation. Yeah. Hold on here. This is the sales revenue and also the gross profit, the highlights of the H1 performance as compared to year over year, the same period, H1 2025. You can clearly see there is a jump in the sales revenue, 35%. Gross profit by 34%, operating profit 21%, PBT 7%. There is a slight decrease in the profit after tax, and we will explain to you why it happened. EBITDA has gone up by 9%. These are the growth figures. Next. Now the key highlights, if we have to see for H1 this year versus last year. The revenue this year was 5.270 million OMR, which is 35% higher.

Speaker #1: We are again starting with the presentation. Yeah. So, hold on here. This is the sales revenue and also the gross profit. The highlights of the HY1 performance as compared to year over year, the same period, HY1 2025.

Speaker #1: So you can clearly see there is a jump in the sales revenue by 35%, gross profit by 34%, operating profit by 21%, and PBT by 7%. There is a slight decrease in the profit after tax, and we will explain to you why it happened.

Speaker #1: And EBITDA has gone up by 9%. So these are the growth figures. Next. Now, the key highlights if we have to see for HY1, this year versus last year: the revenue this year was 5.27 million OMR, which is 35% higher.

Speaker #1: GP margin remains the same, at 22%, as compared to last year. There have been some inclusions in that, and due to that, it has remained the same.

Rajeev Singh: GP margin stands the same, 22% as compared to the last year. There have been some inclusions in that, and due to that it has remained the same. Profit after tax is 2.300 million, which is a marginal decline. The reason being, in fact, we have gone a little conservative this year for higher provision for receivables. There are interest expense liabilities which, in terms of the revision of lease terms. I think there is a revision of lease term for our factory premise, and due to that, the impact has come in terms of the increased expense on the lease liability. That is one part. Higher income tax provision. Last year there was a slight error in terms of H1 projection of income tax. If I compare apple to apple. This has impacted in terms of our profitability.

Speaker #1: Profit after tax stood at OMR 0.300 million, which is a marginal decline. The reason being, in fact, we have gone a little conservative this year for higher provision for receivables.

Speaker #1: There are interest expense liabilities which, you know, are in terms of the revision of lease terms. So, I think there is a revision of lease term for our factory premises.

Speaker #1: And due to that, the impact has come in terms of the increased expense on the lease liability—that is one part—and higher income tax provision.

Speaker #1: Last year, there was a slight error in terms of the HY1 projection of income tax. So, if I compare apple to apple, this has impacted our profitability.

Speaker #1: Otherwise, if we compare on the same terms, the profits were around OMR 0.575 million, right? And the fourth important point is the improvement in Al Hail operations, which we have been running since last November consistently without any stoppage or disruption.

Rajeev Singh: Otherwise, if we compare on the same terms, the profits were around OMR 0.575 million. And fourth important point is that improvement in Al Hael operations, which we are running since last November consistently without any stoppage or disruption. Go ahead, Vikas. I think you explain the company's finance figures.

Speaker #1: So go ahead, Vikasz. I think you explained the comp. Yes, finance figures. So this is the critical resource we are presenting here. The cost of goods sold, our cost is nearly at the same level.

[Company Representative] (Al Maha Ceramics): So this is the critical ratios we are presenting here. COGS. Our cost is nearby the same level maintained. GP margin is the same despite our overall profitability is increased. One factor as Shiyu said, that is a lease liability impact. It is impact almost 1% minimum in our gross profit margin. And if we see the general and admin expenditures, these are slightly increased. There's certain factors like the incentives bonus.

Vikas Shukla: So this is the critical ratios we are presenting here. COGS. Our cost is nearby the same level maintained. GP margin is the same despite our overall profitability is increased. One factor as Shiyu said, that is a lease liability impact. It is impact almost 1% minimum in our gross profit margin. And if we see the general and admin expenditures, these are slightly increased. There's certain factors like the incentives bonus.

Speaker #1: Maintained. GP margin is the same. Despite our overall profitability increasing, one factor, as our CFO said, is the impact of lease liability. It has impacted almost 1% minimum in our gross profit margin.

Speaker #1: And, if we see the general and admin expenditures, these have slightly increased. There are certain factors like incentives, bonus, IT investment, and IT-related expenses which have increased.

Rajeev Singh: IT investment.

[Company Representative] (Al Maha Ceramics): IT related expenses we increased. We are going for certain other IT enhancement in term of the more real time availability for the sales team and all. So that's the factor increase. Our operating margin is slightly declined by 1%, if you see. Selling expenses we reduced as compared to. Not only absolutely we have not reduced, but in term of percentage because our sales is increased, that's the impact is here. Otherwise it is the same. Net profit margin, that's the impact we already explained. This year bonuses are impacted and our IT related expenses we increased. And provisioning slightly just because of to maintain our IFRS requirement also, and the payments are coming in irregular manner due to war situation. That's why we are going for a safer side and compliance with the IFRS also. And here the EBITDA margin, it's 16%.

Vikas Shukla: IT related expenses we increased. We are going for certain other IT enhancement in term of the more real time availability for the sales team and all. So that's the factor increase. Our operating margin is slightly declined by 1%, if you see. Selling expenses we reduced as compared to. Not only absolutely we have not reduced, but in term of percentage because our sales is increased, that's the impact is here. Otherwise it is the same. Net profit margin, that's the impact we already explained. This year bonuses are impacted and our IT related expenses we increased. And provisioning slightly just because of to maintain our IFRS requirement also, and the payments are coming in irregular manner due to war situation. That's why we are going for a safer side and compliance with the IFRS also. And here the EBITDA margin, it's 16%.

Speaker #1: We are going for certain other IT enhancements in terms of more real-time availability for the sales team and all. So that's the impact in increase.

Speaker #1: Our operating margin has slightly declined, by 1%. If we see selling expenses, we reduced as compared to— not only absolutely, we are not reduced.

Speaker #1: But in term of percentage, because our sales is increased, that's the impact is here. Otherwise, it is the same. Net profit margin that's the impact we already explained our this year bonus is impacted and our, IT related expenses we increase.

Speaker #1: And provisioning slightly, just to maintain our IFRS requirements also, and the payments are coming in an irregular manner due to the war situation.

Speaker #1: That's why we are going on the safer side and in compliance with IFRS also. And here, the EBITDA margin is 16%. It has declined by 4%—just the impact we already explained to you.

[Company Representative] (Al Maha Ceramics): It is declined by 4%. Just impact we already explained to you. These are our income statement. We can see here clearly in finance charges, that is what we said about that lease liability and provision for doubtful debt as we explained to you, as well as in here, general and admin expenses.

Vikas Shukla: It is declined by 4%. Just impact we already explained to you. These are our income statement. We can see here clearly in finance charges, that is what we said about that lease liability and provision for doubtful debt as we explained to you, as well as in here, general and admin expenses.

Speaker #1: These are our income statements. So, we can see here clearly in finance charges—that is what we said about that, lease liability—and provision for doubtful debt, as we explained to you.

Speaker #1: As well as in our general and admin expenses.

Speaker #2: Income tax.

Rajeev Singh: Income tax also.

Speaker #1: Yeah, sorry. For income tax expenses last year, we are assuming that our previous year losses of the associate company will be covered. That's the reason in FY25 they have not taken, in H1, sufficient provision.

[Company Representative] (Al Maha Ceramics): Yeah. Sorry, income tax expenses last year, we are assuming our previous year losses of associate company will be covered. That's the reason in FY25 we had not taken in H1 sufficient provision. That's the assumption. Ultimately, we have taken that in Q4. That's why this year we are going proper in proper manner on month-on-month basis. That's the impact. This is our admin overhead breakups.

Vikas Shukla: Yeah. Sorry, income tax expenses last year, we are assuming our previous year losses of associate company will be covered. That's the reason in FY25 we had not taken in H1 sufficient provision. That's the assumption. Ultimately, we have taken that in Q4. That's why this year we are going proper in proper manner on month-on-month basis. That's the impact. This is our admin overhead breakups.

Speaker #1: That's the assumption. Ultimately, we have taken that in Q4. That's why this year we are going in a proper manner on a month-on-month basis. That's the impact.

Speaker #1: This is our admin overhead breakdown: rent and utility expenses, employee benefits—employee benefits are covered there—bonus impact, what we've given in FY26.

Rajeev Singh: Wow.

[Company Representative] (Al Maha Ceramics): Rent and utility expenses, employee benefits. Employee benefits covered that bonus impact what we've given in FY26.

Vikas Shukla: Rent and utility expenses, employee benefits. Employee benefits covered that bonus impact what we've given in FY26.

Speaker #2: So rent and utilities are.

Rajeev Singh: Rent and utilities are-

Speaker #1: that's related to lease liability.

[Company Representative] (Al Maha Ceramics): That is related to lease liability.

Vikas Shukla: That is related to lease liability.

Speaker #2: Right.

Speaker #1: And as for the rest of the expenses, if we see, all are maintained—more or less. Only office expense has slightly increased, very slightly. That's a nominal impact.

Rajeev Singh: Liability.

[Company Representative] (Al Maha Ceramics): Rest expenses, if we see, are all maintained more or less, only office expense slightly increased, very slightly. That is the nominal impact. Rest-

Vikas Shukla: Rest expenses, if we see, are all maintained more or less, only office expense slightly increased, very slightly. That is the nominal impact. Rest-

Speaker #1: And just,

Speaker #2: Material. Next.

Rajeev Singh: Next screen.

Speaker #1: This is packing expenses. It is same but maybe in future it will increase due to war. It will be impacted. It increase somehow we maintained in Q1 H1.

[Company Representative] (Al Maha Ceramics): This is packing expenses. It is same, but maybe in future it will increase due to war. It will be impacted, it increased. Somehow we maintained in Q1, H1, but now its impact will affect in future operations. Slightly, not much. Maybe we are expecting it, managing the alternate sources and trying to control the cost. Employee benefits. This is our current position. This is benefits related. Benefits means asset and simple side.

Vikas Shukla: This is packing expenses. It is same, but maybe in future it will increase due to war. It will be impacted, it increased. Somehow we maintained in Q1, H1, but now its impact will affect in future operations. Slightly, not much. Maybe we are expecting it, managing the alternate sources and trying to control the cost. Employee benefits. This is our current position. This is benefits related. Benefits means asset and simple side.

Speaker #1: But now its impact will affect future operations. Slightly not, maybe; we are expecting, with managing the alternate sources and trying to control the cost.

Speaker #1: This is our current position.

Speaker #2: Changeable.

Speaker #1: This is a balance sheet-related presentation, meaning the asset and fiscal side.

Speaker #2: Somebody is waiting. Can you admit them?

Rajeev Singh: Somebody is waiting. Can you add it? Only one can add it. No, the screen sharing is showing there. Where it is on. Stop sharing.

Speaker #1: Your screen sharing is showing there where it is on. Stop sharing. Okay? Stop share, please.

[Company Representative] (Al Maha Ceramics): Stop share.

Vikas Shukla: Stop share.

Rajeev Singh: Yes, yes. Stop share.

Speaker #2: क्या कर रहे हो? स्टॉप शेयर करो न।

Speaker #1: शेयर करो। ठीक है।

Speaker #2: उसको साइड से होगा।

Speaker #1: Next.

Speaker #2: अरे यार, वो नीचे आ रहा है ना, ऐरो।

Speaker #1: Yes.

Speaker #2: Next.

[Company Representative] (Al Maha Ceramics): This is our cash flow position.

Vikas Shukla: This is our cash flow position.

Speaker #1: This is our cash flow position.

Speaker #2: You tell me, cash flow decreased because of dividend. Whatever.

Rajeev Singh: Cash flow decreased because of dividend.

Speaker #1: This is cash flow; our decrease is just because of a certain outflow increase in our investing activities and all.

[Company Representative] (Al Maha Ceramics): This is cash flow. Our decrease just because of certain outflow increase in our investing activities.

Vikas Shukla: This is cash flow. Our decrease just because of certain outflow increase in our investing activities.

Speaker #2: Finance.

Rajeev Singh: Financing.

Speaker #1: Financing activities: They paid in dividend this year, 220,000. That is a major element. And lease liability, as we said, it was increased and extended till...

[Company Representative] (Al Maha Ceramics): Financing activities, we paid in dividend this year, OMR 220,000. That is a major element. Lease liability, as we said, it was increased and extended till.

Vikas Shukla: Financing activities, we paid in dividend this year, OMR 220,000. That is a major element. Lease liability, as we said, it was increased and extended till.

Speaker #2: I think the majority of the difference is, apple to apple, everything looks the same. The cash flow is impacted because of the dividend being paid, which was not there in last HY1.

Rajeev Singh: I think majority of the difference is April to April, everything looks same. The cash flow is impacted because of dividend being paid, which was not there in last H1. So that has impacted. Otherwise, if you see in terms of the activity and generation of cash, I think it is, as compared to last year, much better situation.

Speaker #2: So, that has had an impact. Otherwise, if you see in terms of the activity and generation of cash, I think it is, as compared to last year, a much better situation.

Speaker #1: And one more addition, sir: the income tax we paid last year, it was not.

[Company Representative] (Al Maha Ceramics): And one more addition, sir. The income tax we paid last year, it was not-

Vikas Shukla: And one more addition, sir. The income tax we paid last year, it was not-

Speaker #2: Yeah.

Speaker #1: For 97,000 that is.

Rajeev Singh: Yeah

[Company Representative] (Al Maha Ceramics): OMR 97,000, that is.

Vikas Shukla: OMR 97,000, that is.

Speaker #2: Fine. Next.

Rajeev Singh: Fine. Next. Yeah, OMR 97,000 income tax paid. Now, if I have to talk about what are the present challenges, you all are aware that the region is going through a very disturbed geopolitical situation. While it has given us a lot of challenges, it has also given us opportunity to list down the challenges. I think shipment, getting your raw materials or the freight charges, logistic cost, everything has gone really three to four times up. The impact is to the tune of around 40% increase in your packing, increase of around two times to three times in your logistic cost. The shipment cost is so high that we have to literally stop or drop our business in countries like Qatar, Bahrain, Saudi Arabia and these places, the cost of shipment is even costlier than the cost of goods. So this is not a viable situation.

Speaker #1: Okay.

Speaker #2: Yes, 97,000 income tax paid. Now, if I have to talk about what are the present challenges—you all are aware that the region is going through a very disturbed geopolitical situation.

Speaker #2: So while it has given us a lot of, challenges it has also given us opportunity to list down the challenges I think shipment getting your raw material or you know the freight charges logistic cost everything has gone really three to four times up and the impact is to the tune of around 40% increase in your packing increase of around two times to three times in your logistic cost the shipment cost is so high that we have to literally stop our or drop our business in you know countries like Qatar Bahrain Saudi Arabia and these you know places the cost of shipment is even costlier than the cost of goods so this is not a viable situation so I think that is something wherein raw material is impacted inflow of raw material and also finished goods logistic that is the major impact which has come even the vessels which are coming from Spain or Italy or from China there is no surety or certainty that it will come on a certain days dates and you are paying very high damage charges and also storage and other war charges and you know surcharge what the shipment companies are charging to us so this is the challenge what we are facing and also as we explained in the first part of our presentation the money rotation is poor in the market wherein while the receivable are slow I think the suppliers because of you know this urgency and also scarcity of materials they are insisting for faster payment or shorter credit terms because there is no material of packing or the other so if you are really looking for getting those material you have to pay extra and also pay little faster not like you know earlier we were taking 120 days or 150 days of credit so this way these are the challenges for the present situation next slide.

[Company Representative] (Al Maha Ceramics): Right. Thanks so much.

Vikas Shukla: Right. Thanks so much.

Rajeev Singh: So-

[Company Representative] (Al Maha Ceramics): Raw material.

Vikas Shukla: Raw material.

Rajeev Singh: I think that is something wherein raw material is impacted, inflow of raw material and also finished goods logistic, that is the major impact which has come. Even the vessels which are coming from Spain or Italy or from China, there is no surety or certainty that it will come on a certain date, and you are paying very high damage charges and also storage and other war charges and surcharge what the shipment companies are charging to us. This is the challenge what we are facing. Also as we explained in the first part of our presentation, the money rotation is poor in the market, wherein while the receivables are slow, I think the suppliers, because of this urgency and also scarcity of materials, they are insisting for faster payment or shorter credit terms because there is no material or packing or the other.

Rajeev Singh: So if you are really looking for getting those materials, you have to pay extra and also pay little faster, not like earlier we were taking 120 days or 150 days of credit. This way, these are the challenges for the present situation. Next slide. If I go opportunity also has come a long way in terms of. Because the same shipment charges are very high for the Indian tile companies or Chinese or that way, Iranian or any other importing companies which were there in Oman. This area has really got benefited by cheap imports not coming from these countries. This has given a lot of opportunity to local manufacturing players to strengthen their market. The same impact is UAE, because UAE is fully covered by road from Oman, and that's not a place where the shipment is required.

Rajeev Singh: That is why to and fro movement from UAE market is very good. Presently, most of the consumption happening in these two markets because there is a scarcity of material which is not coming from other market. Nevertheless, we are also having impact of the giants like RAK Ceramics in UAE, then very cheap producing company from Saudi Ceramic Company, that even after paying a very high freight, their landing cost is cheaper. These challenges will continue. Opportunity wise, I think majorly if China and India not coming, complemented by anti-dumping tariff which was implemented by Oman government. Also, we are yet to see the quality mark which has been made mandatory by Oman government for any tiles which are getting imported in Oman, because as soon as these implementation came, the war situation started.

Rajeev Singh: We really do not know how is the implementation part, but these are also some barriers which is positive. Even if in future, if there is normalization, this will help us in strengthening our local market. Internal market, internal factors which, if I have to list down is value-added items what we have been launching in Al Maha. We have been targeting the mid-premium and premium segment of customers and really replacing all Italian and Spanish tiles in that segment. New and innovative product is that we have gone one step further from R11. We have gone the top best quality and certified tile, R12 anti-skid tile. We are promoting more of our antibacterial, antimicrobial tiles.

Rajeev Singh: Cool tile is also getting popular very much in the region because of very high temperature, and it is also giving us a good brand image and also penetration in this market. Most importantly, if I have to tell how we are looking at this market is the operation of Al Hael Ceramics Company LLC. As you all know that the market is having a high potential of porcelain tile and it is the highest growing segment in the ceramic tile market. Porcelain products coming from Al Maha not only giving us extra market or additional market, but also complementing sales of our red body tile, which is a low demand and also where you have to push the product in the market to sell.

Rajeev Singh: There also, we have not remained on the lower strata of the market where competition is really pushing everyone with the base products of 60 by 120 or just 60 by 60. You can see that Al Hael Ceramics Company LLC has gone ahead and introduced products like 60 by 120, 20mm thick, which is we are the only company in Oman to produce this and also 60 by 60, 20mm with 11 type of surfaces which is not available with any of the companies. Why we are going on a premium segment or a mid-premium segment? Because we know the future is going again. It will be going to be a bloodbath in the base category segment.

Rajeev Singh: Unless you create a market from today in terms of your value-added segment, you will not be able to survive with also the fact that Al Maha is going for expansion at Sohar as well. Going forward, end of this quarter, we are hopeful to start our line 2, which will double our capacity of Al Hael. Line 2 will not only give us these products what we are already producing, but also it will give us some of the products which I think very selected companies in the region have, like RAK, which is technical or full body porcelain. Full body porcelain is very highly in demand in Oman by ministry because most of their requirement and specifications are full body porcelain, which they are presently importing from India because there is no Made in Oman product.

Rajeev Singh: Now, proudly we can say that Made in Oman, we are the best in terms of our product basket, and we have all the products what any site will need. Next. This was a small brief. Can you just start the camera? This was a brief on our business operations for the last six months as compared to the last year. I am sure you all will be having a lot of questions. You can raise your hand and can start asking question one by one, and we will be happy to answer all of you. We all are in mute, so whosoever is asking question, please raise the hand and then we can start question answer. Yeah. There are Shaurya, Vision Capital. Let us start with Shaurya from Vision Capital, followed by Sandesh Shetty. Yes, Shaurya, go ahead please.

[Analyst] (Vision Capital): Good morning, Mr. Singh. Thank you for the presentation and for the brief of the industry and the presentation. Congratulations on a good set of numbers. I had a couple of questions. To begin with, the provision for doubtful debts for OMR 128,000 that you recorded this quarter or in the H1 of this year, how recurring is this number? We have seen there is a significant increase in your receivables year-over-year and quarter-over-quarter as well. The receivables are piling up. With the provision for doubtful debts increasing, is there a reason to be concerned about the high receivables?

Rajeev Singh: I will answer to this first. See, if we are talking about high value of receivables, I think this is very obvious that when you are starting porcelain and from one line which is a capacity of 200,000 and a consistent sale of around 100,000, 150,000, the value of those quantity is much higher than a ceramic tile, which is average being sold at OMR 1.5 or OMR 1.6. As compared to that, the average price of porcelain is OMR 2.8 to OMR 3.2. Their impact is double. When you are increasing your business, your receivables are going up. Nevertheless, if we see our comparison, the days of sales have come down drastically in terms of our collection. Quarter-over-quarter, the days of sales have not only because of high revenue but also because of good collections what we are getting.

Rajeev Singh: Now, doubtful debt is something like, there was a discussion with our auditors that if we really see the peers in our industry, you will have a very clear study of that there is hardly any doubtful debt, even though the customers are paying very late or their money is stuck for more than one year. So that way, analysis was more on customer-based risk analysis, and based on that, the risk provision was being done. Now following IFRS and also the geopolitical situation, we decided that it is always better to go a little conservative. Whatever the numbers you are seeing is 100% collectible and money is coming. For example, there is a disruption of business suppose in Saudi Arabia. The customer is not ready or able to pay in one go. He is paying like 25,000 Saudi Rial every month.

Rajeev Singh: Even if we know that we have got a certain payment which is sure shot, but since it is crossing my six month or 270 days, which is our internal policy, or one year, we have to take it as a doubtful debt. I think going little conservative was something, if you see industry-wise, apple-to-apple comparison with the peer analysis, we are the most conservative in terms of taking that. So there is nothing in terms of the concern, and I am sure when you see the cycle completion, because last four months our porcelain sales have gone doublefold because the line which was 50% utilized, we have gone for 100% utilization. So the cycle of revenue collection will be completed in 90 to 120 days. So you will see the cycle completion in the coming quarter. So that will answer your queries and other things.

[Analyst] (Vision Capital): Perfect. Thank you for the explanation. Makes a lot of sense now. My second question is on the porcelain front. Al Hael is obviously now operational, and you said that the line two will be operational this quarter, if I am not wrong. How much contribution should we be expecting from this? If you could give us a ballpark number in terms of how much increase in sales as a percentage.

Rajeev Singh: I think revenue-wise, while the revenue is showing very high, our share of profit in terms of management agreement is 3%, which is like whatever we are selling, we are getting 3% out of it as a net profit, which is appearing in our books. Suppose we are doing 100,000 business, we are getting 3,000 as our profit in that. This is the arrangement. Rest of the money is going back to Al Hael because they also require money to stand up and also clear the old issues so that the plant runs successfully. While Al Maha is sacrificing a lot of its share of profit, but present, the challenge is that penetration of the market, sustaining the market and also making Al Hael run successfully. So that way, I think it should clear your question, if I am not wrong.

I think, revenue-wise, while the revenue is showing as very high, our share of profit in terms of the management agreement is 3%, which is like, you know, whatever we are selling, we are getting 3% out of it as net profit, which is appearing in our books. So, suppose we are doing 100,000 business, we are getting 3,300 as our profit in that. So this is a very, uh, you know, uh, the arrangement. The rest of the money is going back to Al, because they also require money to stand up and also clear the old issues so that the plant runs successfully. So, while Al Maha is sacrificing a lot of its, you know, uh, share of profit, at present the challenge is that penetration of the market, sustaining the market, and also, uh, you know, making Al run successfully. So that way, I think, this is, I think it should clear.

[Analyst] (Vision Capital): Yes, sir. It does. Thank you. Just in terms of quantity, if I am not wrong, you had mentioned previously that after the line 2, Al Hael's contribution in terms of porcelain quantity should be around 300,000 to 350,000 per month, if that is not wrong.

your question if I'm, uh,

Rajeev Singh: You are talking about quantity in terms of square meter, yes.

[Analyst] (Vision Capital): Okay.

Rajeev Singh: Value-wise, it will go per month approximately OMR 700,000 to OMR 800,000.

Not wrong. Yes, sir. It it does. Uh, thank you. And you just in terms of, uh, quantity, if I'm not wrong, you you had mentioned previously that, uh, uh, after the the line to, uh, I'll Health contribution in terms of personal and quantity should be around 300 to 350,000, uh, per month. Uh, if if that's not wrong, you are talking about the quantity in terms of the square meter. Yes.

[Analyst] (Vision Capital): Great. Okay. Thank you. That helps a lot. Is Al Hael actually breaking even or will it break even after the operation line 2?

Okay, value-wise, it will go per month, approximately 700,000 to 800,000 Riyal.

Rajeev Singh: This is like a long way to go, Chaourie. As last meeting also, the same question propped up. But you know the liabilities are very high. Now bank is also waiting and watching us, like how the plant operations are happening, because this is the first time ever since this plant was commissioned in 2018 that it is being run successfully, consistently for almost 9 to 10 months. Despite challenges like we are getting it from Ministry of Labour, our old cases, very low cooperation from authorities in terms of recruitment, but still we are able to run the plant, beating all challenges. I think making breakeven, I think let the plant run for 1 year or so and line 2, because this plant has four lines, Chaourie, and you are presently, in terms of capacity utilization, is only 25%.

Great. Okay, thank you. So that that has a lot and uh, uh is awl hail actually breaking even on, you know, on on or or or will it break even after the operation line, too. So this is like

Rajeev Singh: Unless you go 50%, there will not be a money to pay back to the bank and start clearing your debts which are there. Then we think about having a roadmap in terms of when are we going to make the breakeven.

A meeting. Also the same question problem, but you, you know the liabilities are, you know, very high. Now bank is also waiting and watching us like you know how the plant operations are happening because this is the first time ever since this plant was commissioned in 2018, that it is being run successfully consistently for almost like 9 to 10 months. Uh, despite challenges like we are getting it from Ministry of Manpower. Our old, you know, cases, you know, very low cooperation from authorities in terms of recruitment. But still we are able to run the plant beating all challenges and uh, I think uh, making break even I think let the plant run for 1 year, or so and line 2, because this plant has 4 lines and you are presently in terms of capacity. Utilization is only 25%.

[Analyst] (Vision Capital): Right. Thank you, sir. On the ceramic side, what is your capacity utilization currently?

So unless you go to 50%, there will not be money to pay back to the bank and start clearing your debts which are there. And then we think about having a roadmap in terms of when are we going to make the, uh, break even?

Rajeev Singh: Currently last-

[Analyst] (Vision Capital): H1 of this quarter. Yes.

Right. Thank you, sir. And on the ceramic side, what is your capacity utilization currently?

Rajeev Singh: Last three months, our capacity utilization has gone up to 95%. From last year, around 58%, 60%, it is now 90% to 95% approximately.

And first of all, this quarter—yes, in the last three months—our capacity utilization has gone up to 95%.

[Analyst] (Vision Capital): Right. Because of the increased costs of raw materials or increased logistics, has there been any increase in the selling price of ceramics that you foresee?

From last year, it was around 58 to 60%. It is now approximately 90 to 95%.

Rajeev Singh: Of course. Of course. In fact, we were the only company to push the sales increase. There are two attitudes in the market. One is that prices are going up, so you book as much order as you can and get it at the old price, which competition has done. Rather, we were the only player to have gone very boldly in the market and tell that our cost is going up, so we are increasing prices, taking a challenge. Even if we are taking a beat in terms of customers getting deviated to competition, we will hold on, because we cannot take this cost into our profit loss. So that way we have revised our prices twice, both in ceramic and porcelain, and well accepted by the market as well.

Raw materials or increased logistics. Has there been any increase in the selling price of ceramics that you foresee? Of course, of course, of course. In fact, we were the only company to...

[Analyst] (Vision Capital): Right. Thank you, sir. I am sorry I am taking a lot of your time. I know that other questions-

Push the sales increase see there are 2. Uh uh uh attitude in the market 1 is that uh prices are going up. So you booked as much order as you can and get it at the old price which competition has done rather, we were the only player to have gone very boldly in the market and tell that our cost is going up. So we are increasing prices, taking a challenge. Even if we are taking a beat in terms of customers getting deviated to competition, we will hold on because we cannot, uh, uh, take this cost into our profit loss. So that way we have increased our revised, our prices twice, both in ceramic and Porcelain and, uh, well accepted by the market as well.

Rajeev Singh: I think that will take care of lot of questions what others also have in mind, because you are very specific in your questions.

[Analyst] (Vision Capital): Thank you. Thank you, sir. My last question is regarding the product mix of the industry, and that is on the industry as also you mentioned that porcelain is priced almost twice as much as ceramic. My two questions are, one, are there any local competitors, local manufacturers of porcelain other than you or Al Hael? Secondly, how do customers value porcelain over ceramic tiles? The market share between the two.

Right. Uh, thank you sir. Um, I'm sorry, I'm I'm taking a lot of your time. I know that other, uh, I think that will take care of lot of questions. What others also have in mind because you are very specific in your questions. Thank you. Thank you sir. Uh, my last question is uh regarding the product mix of the industry and and that's on the industry is also you mentioned that porcelain is priced almost twice as much as ceramic. Uh my 2 questions are 1, are there any local competitors, local manufacturers of porcelain other than you or I'll help and secondly how do customers uh, value or sell?

Rajeev Singh: Okay, so coming to your second question first. The porcelain is the fastest growing segment in the ceramic, because ceramic and porcelain both comes under the family of ceramic. One is red body, one is white body, and porcelain is which is like an impervious material, and porcelain is something which is a very low water absorption. I think if I have to talk about market, the demand is extremely high on porcelain. So there is a pull from the market in terms of porcelain, where customers are coming and asking for porcelain because of high strength, high durability, larger size, better surfaces. But I think potential-wise, if you have to say, 70% of the market is porcelain and 30% ceramic. If we talk about commercial projects, 85% is porcelain and around 15% is your ceramic.

Been over, ceramic tiles. You know, the the market share between the 2, okay? So coming to your second question. First, the porcelain is the, you know, fastest growing segments in the ceramic, uh, you know, because ceramic and Porcelain both comes under the family of ceramic 1 is red, body 1 is white body and Porcelain is, which is like a impervious material and Porcelain is something, which is a very low water absorption. So, I think, uh, uh, if I have to, uh, talk about Market, the demand is extremely high on porcelain. So there is a pull from the market in terms of porcelain where customers are coming and asking for porcelain because of high strength, high durability, larger size, better surfaces. But uh,

I think, potential-wise, if you have to say, 70% of the market is porcelain and 30% is ceramic.

And if we talk about commercial projects, 80%, 85%, it's 43.

Rajeev Singh: So that is the mix of the market, and it is like every year the pie is growing by around 7% to 8% of the total potential. But at the same time, the growth or the demand potential of porcelain is much higher as compared to ceramic. Because while ceramic volume is going down, porcelain demand is going up. So this is your second question. I am sorry, what was your first question in terms of local competition. Okay. There is one company which is there, which has got one line only, and they are into the base products, and they are also in the market and complementing the demand of the porcelain in the local market.

And around 15% is your, uh, ceramic. So that's the mix of the market and, uh, it is like every year. The pie is growing by around 7 to 8% of the total potential, but at the same time, the growth or the demand potential of porcelain is much higher as compared to ceramic, because while ceramic volume is going down, porcelain demand is going up. So this is...

Your second question. Uh, I'm sorry, what was your first question in terms of local competition? Okay, there is one company which is there, uh, which has got one line only.

And they are on into the base products, and they are also in the market.

You know, complementing the demand for porcelain in the local market.

[Analyst] (Vision Capital): Great. Thank you, sir. And just a small follow-up. So the competition for ceramic, because of the anti-dumping and the quality standards, has reduced quite a lot. Is it the same in the porcelain as well or no?

Rajeev Singh: Come again? I did not get you.

Great. Uh, thank you sir and and and just a small follow-up. Uh, so the competition for ceramic because of the ante and the quality standards has has reduced quite a lot. Uh, is it the same in the porcelain, as well or no?

[Analyst] (Vision Capital): So the

Rajeev Singh: Anti-dumping. Okay. Anti-dumping is for all products, ceramic, porcelain, everything. Also to answer one of the things, even though the demand of ceramic is going down, what we have done at Al Maha is that we are not into commodity products wherein the products are being sold just based on the prices. Because in ceramic, there is also one company called Eagle Ceramics in Sohar, where they are bringing in material or something from India and selling at a very cheap price. So if we really want to survive, we cannot have those prices. We have gone ahead and introduced products with the surface effect, with R11 tiles, with thick tile, very innovative surfaces, which is adding value to our products. Also antibacterial in Barid.

Come again, I didn't get you. So the, uh, The Dumping. Okay, LT dumping is for all products. Ceramic, personally and everything. Now also to answer 1 of the things, like, even though the demand of ceramic is going down. What we have done at Al Maha is that we are not into commodity products, where in the products are being sold, just based on the prices because in, uh, ceramic there is also 1 company called Eagle Ceramics in, uh, you know, uh, Sahar with. They are bringing in material or something from India, and selling at a very cheap price. So, if we really want to survive, we cannot have, you know, those prices. So we have gone ahead and introduced products with the surface effect, with the R11 tires with the thick tile, very Innovative surfaces, which is

Adding value to our products.

Rajeev Singh: So in ceramic also, a lot of product innovations are happening just to beat the competition and keep us afloat in terms of premium segment.

Also antibacterial and varieties. So

In ceramics also, a lot of product innovations are happening, just to meet the competition and keep us afloat in terms of the premium segment.

[Analyst] (Vision Capital): Thank you, sir. Thank you for your answers. Thank you very much.

Rajeev Singh: My pleasure. I will request Mr. Sandesh Shetty to please ask whatever questions he has.

Sandesh Shetty: Yeah. Hi. Am I audible?

[Analyst 1]: Yeah. Hi. Am I audible?

Please ask whatever questions you have.

Rajeev Singh: Yeah, you are audible. If you can speak louder, it will be better.

Yeah. Hi. I'm Audible.

Sandesh Shetty: Yeah. Thank you for the call. I have a couple of questions. With respect to the market right now, you mentioned that the porcelain is 85% of the total market. Am I right in this? This is the local market you're talking about, right?

[Analyst 1]: Yeah. Thank you for the call. I have a couple of questions. With respect to the market right now, you mentioned that the porcelain is 85% of the total market. Am I right in this? This is the local market you're talking about, right?

Rajeev Singh: No. In fact, what I said that total potential of porcelain is 70% in the region. Whereas if we talk about projects, which is institution, commercial, in buildings. So there, the requirement is 80% to 85% porcelain, 15% ceramic. Our market primarily comes from, in Oman, refurbishment segment, which is like people making their own houses. There's hardly any high investment coming up in terms of the big malls or something like Dubai, where real estate is booming. If I talk UAE, especially Dubai, 80% to 85% is porcelain, 15% is ceramic. If I talk Oman, 65% to 70% is porcelain, 30% still remains ceramic. I hope it's clear.

Yeah, you're audible, but if you can speak louder, it would be better. Yeah, thank you. Thank you for the call. And, just, like, I have a couple of questions with respect to the market. Right now, you mentioned that the porcelain is 70% to 85% of the total market. Am I right in this? So this is the local market you're talking about, right?

No, I will—uh, in fact, what I said is that total potential, of course, is 70% in the region, whereas if we talk about projects which is institution, commercial, you know, buildings, so there the requirement is 80 to 85% porcelain, 15% ceramic.

Sandesh Shetty: Yes. Thank you. Second question is on your revenue mix. How much of your total revenue is from exports? You mentioned there are some issues with. There are current issues with Qatar, Bahrain, and KSA. I just wanted to understand your export mix, like what percentage is from these regions.

[Analyst 1]: Yes. Thank you. Second question is on your revenue mix. How much of your total revenue is from exports? You mentioned there are some issues with. There are current issues with Qatar, Bahrain, and KSA. I just wanted to understand your export mix, like what percentage is from these regions.

But you know, our Market primarily comes from in Oman refurbishment segment which is like people making their own houses, there's hardly any High investment coming up in terms of, you know, the big malls or something like Dubai where like real estate. Is booming, so if I talk about UAE, especially Dubai, 80, 885 percent is porcelain. 50% is ceramic. If I talk Oman 65 70% is porcelain. 30% Is Still Remains a ceramic. I hope it clears. Yes. Yes yes. Thank you. Uh, second question is on your Revenue. Mix. Like how much of your total revenue is from exports? Like you mentioned, there are some issues with like their current issue.

Rajeev Singh: I think I tried to explain that since this war erupted in the month of March. So January and February, we were able to supply to countries like Qatar, Saudi Arabia, Bahrain, and all these places through the shipments. Now, after this war has started, business has come down drastically. Now, our consumption of material or the sales presently are happening in only two countries, mainly. One is Oman, which is around 60% and 40% from UAE, with a small quantity going sometimes to Yemen or to the countries which are able to utilize Salalah Port or something, because the port or wherever shipment comes, it becomes totally non-viable. So if you have to understand, since March to date, our market is mainly two market. One is Oman and second is UAE. And our consumption is coming out of these two markets.

Like, I just wanted to understand your export mix—like, what percentage is from these regions. So I will, uh, uh, I think I tried to explain that since this war erupted in the month of March—

So, January and February, we were able to supply to countries like Qatar, Saudi Arabia, Bahrain, and all these places through the shipments. Now, after this war has started, the business has come down drastically. Now our...

Sandesh Shetty: Okay. Got it. Thank you. Also, you mentioned on the expansion at your Sohar plant. Can you shed some light on your CapEx? What would be the CapEx and what the capacity would be like?

[Analyst 1]: Okay. Got it. Thank you. Also, you mentioned on the expansion at your Sohar plant. Can you shed some light on your CapEx? What would be the CapEx and what the capacity would be like?

Consumption of material, or the sales, presently are happening in only two countries. Mainly, one is Oman, which is around 60% to 70%, and then 40% from UAE, with a small quantity sometimes going to Yemen or, you know, to countries that are able to utilize Salalah port for something. Because at the port, or wherever the shipment goes, it becomes totally non-viable. So, if you have to understand, since March to date, our market is mainly two markets: one is Oman and the second is UAE, and our consumption is coming out of these two markets.

Rajeev Singh: I think this was announced in Muscat Stock Exchange six, seven months back. We are going with the expansion of porcelain tile in Sohar. This will be to sustain our business of Al Maha Ceramics as a company. And this will be on latest technologies in terms of the porcelain wherein we will be targeting the bigger sizes and also the sizes which are not so common, along with the normal sizes. So it will double our capacity of Sohar plant. CapEx and all we will announce soon in terms of how much is going to be the CapEx investment. But this is already in, and I think we are working to get things move very fast on this.

Okay, okay, got it. Thank you. Also, you mentioned the expansion at your Sohar plant. Can you shed some light on your capex? What would the capex be, and what would the capacity be? Any details?

Sandesh Shetty: Okay. Thank you. Just one last question to you on the new innovative products like the antibacterial and the cool tile. Just wanted to understand the margin and compare to the normal tile, like how would be the margins for these new products? It would be better or

[Analyst 1]: Okay. Thank you. Just one last question to you on the new innovative products like the antibacterial and the cool tile. Just wanted to understand the margin and compare to the normal tile, like how would be the margins for these new products? It would be better or

So, I think this was announced in MSM about six or seven months back. We are going ahead with the expansion of the porcelain tile line in Sohar. This will be to sustain our business of Al Maha Ceramics, as you know the company, and this will use the latest technologies in terms of porcelain. We will be targeting the bigger sizes and also the sizes which are not so common, along with the normal sizes. So, it will double the capacity of the Sohar plant. Capex details and all will be announced soon, in terms of how much is going to be the capex investment, but this is already in, and I think we are working to get things moving very fast on this.

Rajeev Singh: See, I will tell you these R11, R12, which are anti-skid tile, very popular in the markets of Europe or in matured markets like Dubai, in matured markets like Jordan. The people are coming and asking that what is the grade of anti-slip property of the tile. But I think Oman has got a long way to go in terms of customer understanding, but slowly it is coming up. So these products are futuristic product if I have to talk about our market, but at the same time, we are creating an image in our market or in mind of the customer that it is Al Maha which is giving you generation next product. Antibacterial tile was launched before COVID. We never knew COVID is coming, but this gets rid of your bacteria and microbes, even virus, to the extent of 99.9% for the lifetime.

Okay, okay, thank you. Uh, just one last question. On the new innovative products, like the antibacterial and the cool tile, I just wanted to understand the margin compared to the normal tile. Like, how would the margins be for these new products? Would it be better or...

See, I will tell you this—uh, R11, R12, which are anti-slip tiles—are very, very popular in the markets of Europe, for matured markets like Dubai and matured markets like Jordan. People are coming and asking that, what is the grade of anti-slip property of the tile? But I think Oman has got a long way to go in terms of customer understanding, but slowly it is coming up.

Rajeev Singh: Now, slowly we are pushing it to Ministry of Health, schools, they are understanding and taking. So if you talk about these are not a very high volume product, even Barid, which is a cool tile. It is not giving you volume, but it is giving you high revenue and also high margin and also a huge impact in terms of premium brand positioning in the market. So when you're creating a product basket, there are certain commodity or fast-moving voluminous product, and there are mid-level, and then there are niche products which are not sold in terms of volume, but in terms of value, and also to make the customer aware that if they are looking for anything which is next generation, it is only Al Maha where they can approach.

For 9% for the lifetime, now slowly we are pushing it to Ministry of Health, schools—they are understanding and taking. So, if you talk about these, these are not very high volume products. Even batteries, which is a cool type, are not giving you volume, but they are giving you revenue—high revenue and also high margin, and also a huge impact in terms of premium brand positioning in the market.

So these are, you know, when you're creating a product basket, there are certain commodity or fast-moving, volume-end products, and there are mid-level, and then there are niche products, which are not sold in terms of—

Volume. But in terms of value, and also to make the customer aware that if they are looking for anything which is next generation, it is only Alma where they can approach.

Sandesh Shetty: Okay. Thank you. Thank you, team. Thank you so much for the answers. Thank you.

[Analyst 1]: Okay. Thank you. Thank you, team. Thank you so much for the answers. Thank you.

Rajeev Singh: Thanks, Sandesh. Have a good day.

Okay, okay, okay. Thank you. Thank you, team. Thank you so much for the questions and answers. Thank you.

Sandesh Shetty: Yeah.

[Analyst 1]: Yeah.

Rajeev Singh: Can I request Mr. Ali, he can ask questions.

[Analyst]: Thank you very much for the presentation and your responses. Regarding Al Hael, since you are saying things are getting better, do we expect any reversal of the provisions that have been taking place for the past few years?

[Analyst 2]: Thank you very much for the presentation and your responses. Regarding Al Hael, since you are saying things are getting better, do we expect any reversal of the provisions that have been taking place for the past few years?

Thanks, and have a good day. And can I request, Mr. Ali, uh, can—uh, he can ask questions.

Thank you very much, uh, for your, uh, for the presentation and your responses, uh, regarding alhad, since you saying, uh, things are getting better. Do you expect any reversal of the provisions that have been, uh, you know, taking place for the past few years?

Rajeev Singh: Can you speak louder, Mr. Ali?

[Analyst]: Yeah, sorry. I am talking about the Al Hael provisions that have been made in the past for the past few years. Are we expecting any reversal for those provisions, especially that it was mentioned that production has been good and sales are also good. Do we expect that, Mr. Rajiv?

[Analyst 2]: Yeah, sorry. I am talking about the Al Hael provisions that have been made in the past for the past few years. Are we expecting any reversal for those provisions, especially that it was mentioned that production has been good and sales are also good. Do we expect that, Mr. Rajiv?

Uh, can you speak louder, Mr. Ali?

Yeah, sorry. Um, so I'm talking about provisions that have been made in the past, for the past two years.

Are we expecting any reversal for those provisions? Especially since it was mentioned that the production has been good, and shares are also good.

Rajeev Singh: Provision in Al Hael?

So, do we expect that? Uh, Mr.

[Analyst]: Al Hael. Yes. We took a lot of provisions at Al Maha Ceramics level on the accounts because it was not doing well. Is it clear, my question?

[Analyst 2]: Al Hael. Yes. We took a lot of provisions at Al Maha Ceramics level on the accounts because it was not doing well. Is it clear, my question?

Yes, we took a look at provisions at the Alma level, you know, on the account because it wasn't doing well, no, yeah.

Is it clear my question?

Rajeev Singh: Oh, actually, Mr. Ali. Vikas, have you heard him?

[Company Representative] (Al Maha Ceramics): Yeah.

Vikas Shukla: Yeah.

Rajeev Singh: Will you answer?

[Company Representative] (Al Maha Ceramics): Yeah.

Vikas Shukla: Yeah.

Rajeev Singh: Please.

[Company Representative] (Al Maha Ceramics): Sir-

Vikas Shukla: Sir-

Rajeev Singh: Speak louder.

Well, actually, Mr. Ali. So, because—have you heard him? Yeah. Will you answer? Yeah, please.

[Company Representative] (Al Maha Ceramics): We already write off our provision investment, but we are not going to reverse up till the equity become positive.

Vikas Shukla: We already write off our provision investment, but we are not going to reverse up till the equity become positive.

Speak louder.

We have already written up our provision investment, but we are not going to reverse it until the equity becomes positive.

[Analyst]: Which equity? Sorry, I did not get your answer. What do you mean which equity?

[Analyst 2]: Which equity? Sorry, I did not get your answer. What do you mean which equity?

[Company Representative] (Al Maha Ceramics): Al Hael.

Vikas Shukla: Al Hael.

Rajeev Singh: Al Maha equity in Al Hael.

Which equity? Sorry, I think that was your answer. What do you mean? Which equity?

[Company Representative] (Al Maha Ceramics): Yes. Al Hael equity become positive, then we are going to reinstate our investment value.

Vikas Shukla: Yes. Al Hael equity become positive, then we are going to reinstate our investment value.

[Analyst]: How far is that? I mean, what is the financial position of Al Hael? Because we can't see that. Can you give us a bit of clarity on that as well, please?

[Analyst 2]: How far is that? I mean, what is the financial position of Al Hael? Because we can't see that. Can you give us a bit of clarity on that as well, please?

[Company Representative] (Al Maha Ceramics): That is in progressive state.

Vikas Shukla: That is in progressive state.

Rajeev Singh: Mr. Ali, I will answer to that. I think it is too early for this to comment, and this is also part of what Mr. Shaw from Vision has asked. I think the plant which was never started got started in November, and most part of it, we were able to start the plant and sell only 12.5% capacity because even one line, running it at a full capacity was a challenge because of manpower. Now, last three months, we have started selling 100% capacity utilization, and we aim to start line two. Unless we have two lines running successfully, there will not be a positive cash enough to look at the light, what we are looking at in terms of our seeing something which is taking care of these impacts.

Become positive, then we are going to reinstate our investment value. So, so, how far is that? I mean, what is the financial position of alha? Because we can't see that, uh, uh, so so so, so can you give us a bit of clarity on that as well? Please, uh, that is in Progressive. We said, if you'll answer to that, like, I think it is too early for this to comment. And this is also part of what Mr. Shower from Vision has asked, I think the plant, which was never started. Got started in November and the most part of it, we were able to start the plant itself only 12.5% capacity because even 1 Line running it at a full capacity was a challenge because of Manpower. Now, last 3 months, we have started selling 100% capacity utilization and we aim to start light to

Rajeev Singh: I think we have to wait and watch in terms of let the two line start and that also successfully for consistently for next six months. Then I think we will be able to comment very clearly on that how the picture looks the other end.

Unless we have 2 lines running successfully, there will not be a positive cash enough to look at the light, you know, what we are looking at, in terms of our, you know, seeing something which is taking care of these impacts. So I think we have to wait and watch in terms of let the 2 line start and that also successfully for consistently for next 6 months and then I think we will be able to comment. Very clear.

[Analyst]: Great. Thanks for your response. Regarding the expansion at Sohar, now you are going to expand into the porcelain segment.

[Analyst 2]: Great. Thanks for your response. Regarding the expansion at Sohar, now you are going to expand into the porcelain segment.

On that— is that how the picture looks at the other end?

Rajeev Singh: Right.

[Analyst]: Is it not like competing with Al Maha Porcelain segment as well? Because Al Hael is all porcelain.

[Analyst 2]: Is it not like competing with Al Maha Porcelain segment as well? Because Al Hael is all porcelain.

Rajeev Singh: See, these are not something I can say that competing with your internal brand. This is like complementing your brand because size, which are limiting at Al Hael, we are not able to produce, we will be able to produce here, like 1,200 by 1,200, thickness by 18 to 20 mm, 75 by 75, 800 by 1,600. Everything we can make. Secondly, let me give you a brief of this market and the region. The potential of this market of Gulf is around 600 to 700 million square meter. Million square meter, 600 to 700. Our capacity of Al Maha is 5 million and Al Hael is around 18 million. We have a long way to go in terms of keeping our market presence, in terms of keeping us in terms of really a player which makes sense.

Great, um, thanks. Thanks for your response regarding the expansion at Sahar. Now, you are going to expand into the porcelain segment, right? So, is it not like competing with the porcelain segment as well? Because it is all porcelain.

Rajeev Singh: If you talk about RAK Ceramics, their capacity is 113 million square meters, Saudi Ceramic, 63 million. Why they have a high capacity? Because unless you have a high capacity to produce, you will not be able to sell the market. The market which is transforming into a porcelain market, it is not like A versus B, it is like an A plus B. So two plants will force you and give you a leverage to grab the highest market share of this market, where somebody having one line or just a plant which is not able to service the market, they will not have volume or the size or the product basket to compete in the market. So I can say that even if we bring another plant like Al Hael, it will complement us.

Into 220. Mm, 75 by 75 800 by 1600, everything we can make. Secondly, let me give you a brief of this market and the region, like the potential of this Market is of Gulf is around 600 to 700 million square meter, million square meter 6 to 700. Now our capacity of Alma is 5 million and Al is around 8, uh, you know, uh, 18, 18 million. Now we have a long way to go in terms of keeping our, you know, Market presence, in terms of keeping us, in terms of really a player, which makes sense. If, if you talk about their capacity is 113 million square meter. Saudi Ceramics, 63 million. Why they have a high capacity Because unless you have a high capacity to produce, you will not be able to serve the market, the market, which is strong.

Transforming into a porcelain market. It is not like A versus B. It is like A plus B.

So two plants will force you and give you leverage to grab the highest market share of this market, whereas somebody having one line or just a plant, which is not able to service the market—they will not have, you know, volume or the size or the product basket to compete in the market. So I can say that even if we bring another plant, like a hill, it will complement us.

[Analyst]: Great. Sure. It is going to be an expansion. How would you finance that expansion? Are you going to raise some debt or equity or a combination? Or this is to be disclosed later on?

[Analyst 2]: Great. Sure. It is going to be an expansion. How would you finance that expansion? Are you going to raise some debt or equity or a combination? Or this is to be disclosed later on?

Rajeev Singh: You are talking in terms of finance of the project?

Great. Uh, I'm sure. And, uh, so so it's going to be an expansion. Uh, so how would you finance that expansion? I mean, uh, uh, are you going to raise some debt, or Equity, or a combination? Or this is to be disclosed later on?

[Analyst]: Yes sir.

[Analyst 2]: Yes sir.

You are talking in terms of finance of the project. Yes, yes. Yes, sir.

Rajeev Singh: So that, in fact, we are a debt-free company. So that way I think we can always take the help from the bank and that stage is yet to come, that how are we going to finance because we are in a process of finalizing technology and also the cost. Once it is done, I think you will be soon aware of how we are financing and what is the total CapEx cost.

So, in fact, we are an adaptive, free company, so that way I think we can always, uh, take the help from the bank.

[Analyst]: Great. Okay. The other question regarding the increase in revenue. Is it primarily because of the increase in price or because also increase in volume?

[Analyst 2]: Great. Okay. The other question regarding the increase in revenue. Is it primarily because of the increase in price or because also increase in volume?

And, uh, that stage is yet to come—that is, how are we going to finance? Because we are in the process of finalizing technology, and also the cost. Once it is done, I think you will be soon aware of how we are financing and what is the total capex cost.

Rajeev Singh: Both.

[Analyst]: Got that. Sorry.

[Analyst 2]: Got that. Sorry.

Uh, great. Okay. Uh, the other question, um, regarding the increase in revenue, uh, is it primarily because of the increase in price? Or is it also because of increasing volume?

Rajeev Singh: I think majorly by volume because as I have told you, our capacity utilization of Al Maha has gone up to 95% and entire orders are back to back. It is not like we are making to increase our stock. We are making to sell it in the market. While stock position has come down as compared to last year's finished goods stock, our capacity utilization has gone up. So volume has moved up significantly. Plus it is further complemented by the volume of Al Hael Ceramics, where the value per unit is almost double the normal ceramic tile. So this both has added up in terms of revenue increase, plus also a little contribution coming from increase in prices. Since it is H1, the impact is not properly visible here. Maybe in coming quarter you will see it better.

I think, majorly by volume, because I have told you.

[Analyst]: Great. Okay. One more question regarding the. We see a lot of new developments coming in Oman. We have Sultan Haitham City, we have a lot of projects coming in. How do you make sure that you are getting your share of these new developments? The Ministry of Housing is doing a lot of effort. Everyone is putting a lot of effort to have new developments, whether residential, commercial buildings and all of that. How do you take advantage of this current

[Analyst 2]: Great. Okay. One more question regarding the. We see a lot of new developments coming in Oman. We have Sultan Haitham City, we have a lot of projects coming in. How do you make sure that you are getting your share of these new developments? The Ministry of Housing is doing a lot of effort. Everyone is putting a lot of effort to have new developments, whether residential, commercial buildings and all of that. How do you take advantage of this current

I was capacity utilization of Alma has gone up to 95% and entire orders are back to back. It is not like we are making to increase our stock. We are making to sell it in the market. So while the stock position has come down as compared to last year when is good stock, our capacity utilization has gone up, so volume has moved up significantly. Plus it is further complemented by the volume of a hail ceramic. Which the where the value per unit is almost double the normal, ceramic tile. So this both has added up in terms of Revenue increase plus also a little contribution coming from increase in prices, but since it is hy1, the impact is not properly visible here. Maybe in coming quarter, you will see it better.

Uh, great. Okay. Uh, uh, 1 more question regarding the, you know, we, we see a lot of new developments coming in our mind. Like, we have Sultan haitam City, we have a lot of projects coming in. How do you make sure that you are getting your share of these, uh, you know, uh, new developments, the ministry of housing is doing a lot of effort. Everyone is putting a lot of effort to have new developments, uh, with the residential commercial buildings and all of that.

Rajeev Singh: Yes

[Analyst]: boom in situation in Oman? Yes, please.

[Analyst 2]: boom in situation in Oman? Yes, please.

Rajeev Singh: Yeah. I think what you mentioned is one of the most exciting part for any local manufacturer. There are certain other complementing factor which I mentioned that anti-dumping, which has been introduced by Government of Oman, which is impacting cheap imports. Second is Made in Oman quality mark which is coming on the product and also making it mandatory. So far when we were approaching Ministry of Housing or Ministry of Education, they were telling us that, "See, you do not have full body porcelain or porcelain in Oman. So we are compelled to buy it either from India or UAE because Made in Oman products are not there." Blissfully, Al Maha will be the only company to produce whatever thickness, whatever size, whatever product, and even your technical porcelain, which is full body porcelain, which is being recommended and is specified in all the government projects.

So how, how—how do you, you know, take advantage of this current, uh, uh, bill? Yeah. In this situation in Oman. Yes, please. Yeah. So, I think what you mentioned is one of the most exciting parts for any local manufacturer. There are certain other complementing factors, which I mentioned, like anti-dumping, which has been introduced by the government of Oman and is impacting, you know, cheap imports. Second is the "Made in Oman" quality mark, which is coming on the product and also being made mandatory.

Rajeev Singh: We will be able to get a major chunk of that. Now, just to inform you that we got some major orders from Ministry of Housing and Ministry of Education, and that has come to Al Maha Porcelain because of quality and Made in Oman impact and that we are looking at. We have created actually a separate team to capture these segment which was earlier being done like the same person going and very casually approaching. We have created a full team which will be side-by-side government offices specification. So we are very, very excited and hopeful that this situation will really keep momentum growing. And as a Made in Oman company, we will be able to give our products at least 60% consumption within Oman.

It's either from India or the UAE because maybe Noman products are not there. Blissfully, Al Maha will be the only company to produce whatever thickness, whatever size, whatever product. And even the, uh, you know, your, uh, uh, technical porcelain, which is full-body porcelain, which is being recommended and is specified in all the government projects, we will be able to get a major chunk of that.

Now just to, uh, uh, you know, inform you that we got some major orders from Ministry of Housing and Ministry of Education and that has come to Alma because of quality and Med Noman impact. And that we are looking at, we have created actually a separate team to, uh, you know, capture these segments, which was earlier being done, you know, like the same person going and very casually approaching. We have created a full team, which will be side by side government, uh, offices, specification. So we are very, very excited and hopeful that this situation will really keep momentum growing. And, uh, as a Medina man company, we will be able to give our products at least 60% consumption with the nomad.

[Analyst]: Great. How do you see the remaining part of the year, in terms of profitability?

[Analyst 2]: Great. How do you see the remaining part of the year, in terms of profitability?

Rajeev Singh: I think we are looking much better performance as compared to last year, this year, in fact. I think H2 is we really don't know how the war situation will be, how it will further impact in terms of cost input. Keeping everything same, I think we will have the momentum going and we will have better results by the end of the year.

Great. Uh, and how do you see the remaining part of the year? I mean, uh, in terms of profitability.

I think we are looking, uh, you know, much better performance as compared to last year. Uh, this year, in fact. And uh, I think hy2 is we really don't know how the war situation will be how it will further impact in terms of, uh, cost input and uh, keeping everything. Same, I think we will have the momentum going and we will have a better results, uh, in by the end of the year,

[Analyst]: Great. Thank you very much.

[Analyst 2]: Great. Thank you very much.

Rajeev Singh: Thank you, Mr. Ali. Anybody else who would like to ask questions? Shaurya, you want to again ask something? Please go ahead.

Great, thank you very much.

Thank you Mr. Ali

Anybody else who would like to ask questions?

[Analyst] (Vision Capital): Yes, sir. Just a small follow-up. The new Sohar expansion will also be porcelain, right? I know you touched upon this recently, but what exactly will be different, and is my understanding correct that your current Al Hael plant is not able to produce what you intend to produce in the new Sohar expansion?

Sure. You want to again? Ask something, please go ahead.

Rajeev Singh: New Sohar expansion, you're talking about Al Maha or you're talking about any competition which is coming?

Yes, sir. Uh just a small follow-up uh the new Sahar expansion will also be porcelain, right? So uh I mean I I know you. You you touched upon this uh recently but what exactly will be different and uh, is it true? Is it is is is my understanding correct that your current? I'll hail plant is not able to produce what you intend to produce in the new Sahar expansion.

[Analyst] (Vision Capital): I was talking about Al Maha, but if you could give us the details of the competition, that would be great also. Thank you.

New SOAR expansion—are you talking about Al Maha, or are you talking about any competition that is coming?

Rajeev Singh: No. I think you must have seen in the news that there is a Chinese company which has also signed some deal in the free zone to bring in one porcelain plant. I think, going forward, we have to be very clear that to beat the anti-dumping, the Chinese companies will keep on coming and putting up the plant in the country itself like they did it at Saudi Arabia, Jordan and many countries, and Oman is also not away from that. But one good part is that while they focus on high volume, low price, we are not into that segment. As I explained you in the beginning of my presentation, we are trying to move out from the commodity segment, which is going to be a very price-oriented and low margin product. I think mid and premium segment, the competition is less.

Uh, I was talking about Alma but if you could give us the details of the competition, that would be great also, thank, you know, so I think you must have seen in the news that there is a Chinese company which has also signed some deal in the free zone to bring in 1, porcelain plant. See, I think. Uh, going forward, we have to be very clear that, uh, to beat the entry dumping the Chinese companies will keep on coming and putting up the plant in the country itself. Like they did it at, uh, uh, Saudi Arabia, Jordan, and many countries, and Oman is also not away from that, but 1, good part, is that while they focus on high volume low price,

We are not into that segment and from as I explained to you in the beginning of my presentation, we are trying to move out from the commodity segment, which is going to be a very price oriented and low margin products. So, uh, I think, uh, mid and premium segment.

Rajeev Singh: Volumes are something which matches your capacity. I think that's the way to sustain and grow further. What was your question for Al Maha expansion of porcelain versus Can you just repeat?

Uh, the competition is less. Volumes are something which matches your capacity, and I think that's the way to sustain and grow further.

[Analyst] (Vision Capital): Yeah. The new segment, the premium segment that you are targeting would be catered by this expansion of Al Maha, right? In porcelain, the new one in Sohar.

Rajeev Singh: I think I explained to you the plant will take to commission maybe 18 months to hardly 2 years. By that time, if I have to really foresee the market where it is going, I think demand for larger sizes, higher thickness will be more. The world is changing towards the surface innovations. The machineries which are complementing to give you a finish of a stone or rough or whatever you want to, or full body through and through designs which are futuristic designs and fetches you a high premium prices. That will be focused on that. Logistic-wise, I think for sure both plant will not produce same products.

And what was your question for Al Maha expansion of porcelain versus? Can you just repeat? Yes. So the the new segment, the premium segment, uh, that you are targeting would be catered by this, uh, expansion of Al Maha, right in in porcelain, the new 1 and so on. So, I think I explained you the plant will take to commission. Maybe uh is 18 months to hardly 2 years, by that time, if I have to really foresee the market where it is going, I think demand for larger sizes higher thickness will be more and also the world is changing towards the surface Innovations. So the Machinery is, which are complimenting to give you a finish of a stone or rough or whatever you want to or full body through and through, you know, designs which are futuristic designs and fetches you a high premium, you know, prices. So that will be focused on that and logistic wise, I think, for sure.

Rajeev Singh: It will be something wherein you have to complement that what all products you need to produce at plant A and what all in plant B, and how logistic can support us in getting into the catchment area because porcelain is a very heavy material and also logistic plays a very important role. Keeping one plant in, say, Sur and then fetching it all across the region is not going to help us. We may also decide that maybe we decide to have a few catchment area serviced by plant A, few servicing by plant B, and all the different sizes. Opportunities are immense, I think. Once it comes, I think I can also say that after 2 years we may go again for doubling the capacity of porcelain at Sohar. That's exactly how I look at it.

[Analyst] (Vision Capital): Great. Okay. Because the small confusion that we had in our mind is when there is already excess unutilized capacity at Al Hael, why is the company going for another expansion in Sohar?

Products you need to produce at plant a and what all implant B and how logistic can support us in getting into the catchment area, because porcelain is a very heavy material, and also logistic plays a very important role. So, keeping 1 plant in say s, and then fetching it all across the, you know, region is not going to help us. So we may also decide that maybe we decide to have a few catchment areas, service by Plante you serving by plant B and or the different sizes. So, opportunities are immense, I think I, once it comes, I think I can also say that, after 2 year, we may go again for doubling the capacity of porcelain at soar. So, that's exactly how I look at.

Rajeev Singh: I will correct you. It is not unutilized capacity. One is that you are starting the plant, you require what? You require raw material, you require manpower, you require lot of things in the plant. It cannot happen all of a sudden. Even for getting five recruitment, we are struggling like anything from the authorities. Slowly we are going ahead and trying to do that. Once we say and compare it with the ease of doing business as compared to the countries, for example, Haidi, which is in global presence India, I think you have to just start the plant and things fall automatically. If everything falls good, Al Hael can run all the four lines and there is a demand presently to capture those lines. It's not that you are struggling to sell the product and not able to run the plant because of that.

Great. Okay. Because the small confusion that we had in our mind is when there is already access and utilized capacity at Al Hill. Why is the company going for another uh expansion? I will I will, I will correct you.

Starting the plant, you require raw material. You require manpower. You require a lot of things in the plant. It cannot happen all of a sudden. Like, even for getting 5 recruits, we are struggling a lot with the authorities. So slowly, we are going ahead and trying to do that. So, once we say and compare it,

Rajeev Singh: Present situation, there is ample of demand which can take care of even four line of yours. But running the line is not easy. It requires lot of synergies and that we are overcoming slowly one by one, in terms of working capital, in terms of manpower, raw materials, and other things.

With the ease of doing business as compared to the countries for example, highly. Which is in, you know, Global presence in India. I think, uh, you have to just start the plant and, uh, Things Fall automatically. So, if everything falls, uh, good, uh, you know, Al Health can run all the 4 lines and there is a demand presently to capture those lives. You know, it's not that you are struggling to sell the product and uh, not able to run the plant because of that present situation. There is ample of demand which can take care of even 4 line of yours, but it running the line is not easy. It is it required. Lot of synergies and that we are overcoming, uh, slowly 1 by 1, in terms of working capital, in terms of Manpower, raw material and other things.

[Analyst] (Vision Capital): All right. Okay. Thank you, sir. Thank you for your time.

Rajeev Singh: Yeah, Mr. Ali.

[Analyst]: Sorry, I have one more question. I just wanted to know your arrangement with Al Hael, because you mentioned that you take 3% share of their revenue or something. However, you are responsible to run the factory. So can you just shed more light on your arrangement with Al Hael, since I know it's associate. So just can you briefly give us a bit of more understanding on the arrangement? Thank you.

[Analyst 2]: Sorry, I have one more question. I just wanted to know your arrangement with Al Hael, because you mentioned that you take 3% share of their revenue or something. However, you are responsible to run the factory. So can you just shed more light on your arrangement with Al Hael, since I know it's associate. So just can you briefly give us a bit of more understanding on the arrangement? Thank you.

All right. Okay, thank you, sir. Thank you for your time. Yeah, Mr. Ali,

Sorry, I have one more question. Um,

Uh, I just wanted to know your arrangement with Al Maha, because you mentioned that you take a 3% share of their revenue or something.

However, you are responsible to run the factory. So, can you just shed some more light on your arrangement with—since I know it's associate.

Rajeev Singh: Okay. As you are aware, Al Maha owns 45% of stake in Al Hael. 55% of the stake lies with the Qatari owners who are presently in Qatar and not very active in terms of day-to-day operations or any involvement. The management agreement, which has happened at the time of 2022, that Al Maha, being an expert in the segment, will run the plant and also will try to create a market with the present sales force, what Al Maha already has with them. The present arrangement is that Al Maha is buying or maybe taking the product from Al Hael and selling it under Al Maha branding, which is the products in the market is Al Maha Porcelain, produced by Al Hael. The margins what we are keeping is 3%, which is net profit. Net profit of all.

Uh, so so just just, can you briefly? Give us a bit of more, uh, understanding on on the arrangement. Thank you. Okay. So, uh, as you are aware, Al Maha owns 45% of mistake in Al Hill, right? And 55% of the stake live with the kauri owners.

Rajeev Singh: These products are sold by the same team which we have. The major back end team is also same, which is purchase, technical, or IT, or finance. Everybody, we are same. This is like a parental support to a plant which is struggling. Idea is that, and we have also got an agreement from the bank that we will try to put extra cash into Al Hael so that it starts creating its own cash flow. As I mentioned that if two line runs for next maybe two years, there will be enough cash to repay the debts and also clear the things, and we can see a very bright future. Same way, like if we start line 3 after, say, six months or line 4 after a year, it will have a much, much better situation.

Who are presently in Qatar and not very active in terms of day-to-day operations or any involvement. Now, the management agreement which has happened at the time of 2022 that Al Maha being an expert in the segment will run the plant and also will try to, uh, you know, create a market with the present sales force, what Alma already has it with them. Now, the present Arrangement is that Alma is buying the, or maybe the taking the product from alha and selling it under Al Maha branding, which is the products in the market is Alma, porcelain produced by Al and the margins. What we are keeping is 3%, which is net profit, net profit of all. So, these products are sold by the same team, which we have, uh, the major, uh, back end team is also same, which is purchased technical or it

Rajeev Singh: I am seeing that we will not stop at line 2, but line 3 and line 4 also will be taken care of.

Applying for after a year, it will have a much, much better situation. And I am seeing that, uh, we will not stop at line 2, but line 3 and line 4 also will be taken care of.

[Analyst]: Great. Is it profitable now? Are you really generating the 3%, Mr. Rajiv?

[Analyst 2]: Great. Is it profitable now? Are you really generating the 3%, Mr. Rajiv?

Rajeev Singh: 3% of the revenue.

Great. So, is it profitable now? So, are you really generating the 3%? Uh, Mr. Rajie?

[Analyst]: Sorry, revenue, not net profit. Right.

[Analyst 2]: Sorry, revenue, not net profit. Right.

3, 3% of the revenue.

Rajeev Singh: Yeah. The net profit is very less. Revenue, like I explained, Mr. Ali, if 100 we are selling, 3% of that comes to Al Maha as a net profit. It adds up to our profit.

Uh, sorry, revenue, not profit, right?

Yeah, net profit is

Revenue. Like I

[Analyst]: Yeah. Great. Thanks.

[Analyst 2]: Yeah. Great. Thanks.

Rajeev Singh: Which is a very minimalistic approach. I think somebody may ask that why you are not asking for more, but idea is that to make Al Hael Ceramics Company LLC stand first rather than making money out of it.

We are selling 3%, and that comes to Al Maha as a net profit. It adds up to our profit.

Yeah, yeah, great. Great, thanks. So, which is a very minimalistic approach. I think somebody may ask why you are not asking for more, but the idea is to make it stand first rather than, you know, making money out of it.

[Analyst]: This is intentionally done currently, but later may be revised. Is it?

[Analyst 2]: This is intentionally done currently, but later may be revised. Is it?

Rajeev Singh: Yes, of course. Suppose there will be few products which will be fetching margin to the tune of 39% to 50%. So there is no point sharing 3% there. So we are already in process, like normal product is fine, but if the products are fetching more than 25% margin, Al Maha Ceramics SAOG should also get better share.

[Analyst]: Yeah, because we invested quite hefty on it. I think more than OMR 1.5 million, isn't it?

[Analyst 2]: Yeah, because we invested quite hefty on it. I think more than OMR 1.5 million, isn't it?

And this is intentionally done currently, but later maybe revised, is it? Yes, of course. Suppose there are a few products which will be fetching margins to the tune of 39% to 50%. So there is no point in sharing 5% there. So we are already in process. Like, you know, normal products are fine, but if the products are fetching more than 25% margin, Al Maha should also get a better share.

Rajeev Singh: Right. Very true.

Yeah, because we invested quite happily in it. You know, I think more than $1.5 million, isn't it? Alright, very cool.

[Analyst]: Great. Thanks.

[Analyst 2]: Great. Thanks.

Rajeev Singh: Thank you, Mr. Ali. Any further questions?

Rajeev Singh: Thank you, Mr. Ali. Any further questions? Who?

[Analyst] (Vision Capital): Who?

[Analyst]: Maharam.

Vikas Shukla: Maharam.

Great, thanks. Thank you. Any further questions?

Rajeev Singh: Huh?

[Analyst]: Maharam.

Vikas Shukla: Maharam.

Rajeev Singh: Maharam. Yeah, please go ahead, Maharam. Maharam, I have not seen. Anybody else who will be interested to ask question? Any question from you, Mr. Ali? Shaurya, I think your question now rising. Please go ahead.

Yeah. Please go ahead. Madam

Like Maram, I have not seen.

Anybody else who would be interested to ask a question?

Any questions from you, Mr. Ali?

[Analyst] (Vision Capital): Sir, actually, these calls are very good opportunities to interact with the management and ask all the questions we have.

Rajeev Singh: Please. I am happy to answer. Please.

[Analyst] (Vision Capital): So we have to take the most of it. Thank you. My question is just regarding a small understanding of the financials, actually. When you say that 3% of every porcelain tile sold by Al Maha for Al Hael is recorded in the revenue. In the top line, do you record the full 100 and then you take 97 out under the cost of goods sold?

Rajeev Singh: Cost of goods sold.

[Analyst] (Vision Capital): Or is it that you only add 3 to the top line?

Rajeev Singh: Yes. And we are showing it as a revenue coming from associate company, not as a part of Al Maha, to make our investors be very clear what is there. So you are right in saying that 97% goes into COGS and 3% comes as a net profit without any SG&A and other expenses on that.

Rising your questions now, ding, please go ahead that, uh, actually these calls are the are, you know, are are very good opportunities to interact with the management and ask all the questions we have played the most of it. Thank you. Uh, my question is just uh, regarding a small uh, understanding of the financials. Actually, when you say the 3% of every time, uh, every proportion does sold by Al Maha for alh is recorded in the revenue. Uh, in the Top Line, do you record the full 100 and then you take 97 out, uh, under the cost of of, is it that you only add 3 to the Top Line? Yes, yes, yes. And we are showing it as a revenue coming from associate company. Not as a part of harma to make. Uh, our investors be very clear. What is there? So you are right in saying that 97 goes into comps and 3% comes as

[Analyst] (Vision Capital): Okay. All right. So whenever we see an increase in top line, it can be as a result of both.

As a net profit, without any S&D and other expenses on that.

Rajeev Singh: Yes. And our financials also will mention very clearly what is the revenue share of Al Maha, plant Al Hael.

[Analyst] (Vision Capital): Perfect. Thank you.

Okay, all right. So, whenever we see an increase in the top line, it can be as a result of both. Uh, yes. And our financials also will mention very clearly what is the revenue share of a plant, Alma plant, Al...

Rajeev Singh: Thank you. Anyone else, any questions? I hope I've answered all possible questions. Okay, Sandesh, please.

Perfect. Thank you. Thank you.

Sandesh Shetty: Yeah. Sorry. One just last question on the capacity side. You mentioned Al Hael has 18 million, right? You mentioned the capacity for Al Hael and Al Maha Ceramics.

[Analyst 1]: Yeah. Sorry. One just last question on the capacity side. You mentioned Al Hael has 18 million, right? You mentioned the capacity for Al Hael and Al Maha Ceramics.

Thank you. And, uh, anyone else? Uh, any questions, or—I hope I answered all possible questions. Okay, Sunday, please.

Yeah, so please—sorry, just one last question. On the capacity side, like you mentioned, uh, like you mentioned, Al Ahlai as 80 million, right? Uh,

Rajeev Singh: Yeah. See, capacity, I will tell you what it is a little dynamic figure because it all depends on what sizes you are producing. For example, if you're producing 60 by 60, one line can give you 10,000. Same line, if you produce 60 120, it will give you 8,000. Same line, if you produce 60 by 60 20mm, it will bring it down to 5,000. So capacity utilization is based on the basic size, but actually what you produce in terms of our product sizes, that all matters.

Sandesh Shetty: Okay. Thank you.

[Analyst 1]: Okay. Thank you.

You mentioned the capacity for a and Alma, see capacity. I will tell you what it is a little Dynamic figure because it all depends on what sizes you are producing the. For example, if you are producing 60 by 601 line, can give you 10,000, same line. If you produce 6120, it will give you 8000. Same line if you produce 60 by 60/20. Mm, it will bring it down to 5,000. So capacity, utilization is based on the basic size, but actually, what you produce in terms of our product sizes? So that all, uh, matters.

Rajeev Singh: When we say 18 million, it is purely based on the base size. But when you decide to run the plant with a particular size, then I think you have to calculate and inform that my capacity was, say, to produce 200,000. Out of that, I produce only 180,000, so this is my utilization. Not that I calculate from the base and I produce something very high or big, which has got a very high cycle or low production cycle. So that is not fair to inform.

Okay, okay. Thank you. Thank you.

So, when we say 18 million,

Sandesh Shetty: Okay, got it. Thank you, sir.

[Analyst 1]: Okay, got it. Thank you, sir.

Rajeev Singh: At any point of time, if you have any questions, you can reach me out and I will be happy to answer. That is for everybody. Thank you everyone. Thank you so much for taking out time and attending the meet, and wish you all a very good day. We look forward to have the same meeting after the end of Q3. Thank you so much. Thank you.

Okay, got it. Thank you, sir. Thank you.

At any point in time, if you have any questions, you can reach out to me and I will be happy to answer. That applies to everybody.

And, uh, thank you everyone. Thank you so much for taking out time.

And attending the meet, and uh, wish you all a very good day, and we look forward to having the same, you know, meeting after the end of Q3. Thank you so much. Thank you.

[Company Representative] (Al Maha Ceramics): Thank you.

Vikas Shukla: Thank you.

Great. Thank you.

Rajeev Singh: Welcome.

Operator: The recording has stopped.

The recording has stopped.

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