Aarti Industries Ltd — Q4 FY26

Aarti Industries Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=GZng0aLiTo0 Published: 8 days ago

0:02 2 seconds Ladies and gentlemen, good day and welcome to the RTI Industries Q4 Fi26 earnings conference call. As a reminder, 0:09 9 seconds all participant lines will be on listenonly mode and there will be an opportunity for you to ask questions after the presentation concludes. Should 0:17 17 seconds you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that 0:25 25 seconds this conference is being recorded. I would now like to hand the conference over to Mr. Nishid Soleni from CDR India. Thank you and over to you. Uh 0:34 34 seconds thank you. Good afternoon everyone and thank you for joining us on RT Industries Q4 FYI26 earnings conference call. Today we are joined by senior 0:42 42 seconds members of the management team including Mr. Sury Kesha executive director and chief executive officer and Mr. Chan Gandhi chief financial officer. We will 0:51 51 seconds commence the call with opening remarks from Mr. footage followed by Q&A session where management will address participants queries. Just to share a 1:00 1 minute standard disclaimer, certain statements that may be made in today's conference call could be forward-looking in nature and a disclaimer to this effect has been 1:08 1 minute, 8 seconds included in the results presentation shared earlier and also uploaded on stock exchange websites. I would now like to invite Mr. Kesha to share his 1:16 1 minute, 16 seconds perspectives. Thank you and over to you sir. Thank you Nish. Good afternoon everyone. 1:22 1 minute, 22 seconds Uh welcome to RP Industries Limited Q4 in a full year FY26 earnings call. It's a pleasure to connect with you all 1:29 1 minute, 29 seconds again. The quarter under review was uh defined by a complex and dynamic global landscape. The escalation of 1:37 1 minute, 37 seconds geopolitical tensions in the Middle East has led to disruptions across global supply chains impacting trade flows, logistics timelines and input cost 1:45 1 minute, 45 seconds structures. In particular, the prices of key raw materials such as benzene, sulfur, analene, tolvine, methanol went 1:51 1 minute, 51 seconds up by over 60%. Uh, elevated freight rates are also resulting in an increasing cost of global trade. 1:58 1 minute, 58 seconds Further, the curtailment of volumes uh from Middle East has created significant supply chain issues and have presented near-term headwinds for the chemicals 2:06 2 minutes, 6 seconds industry. This has reinforced our need for operational efficiency, product diversification, and deeper customer engagement. Against this backdrop, our 2:15 2 minutes, 15 seconds FY6 performance uh and Q4 performance demonstrated the inherent resilience of our diversified and cost competitive 2:23 2 minutes, 23 seconds product portfolio and our ability to manage global volat volatility leveraging our extensive geographic footprint and deep rooted customer 2:30 2 minutes, 30 seconds relationships. The overall demand environment for our market of products remained largely stable. While we 2:38 2 minutes, 38 seconds experienced disruptions in the shipments to the Middle East, we were able to proactively redirect uh volumes to the other geographics, ensuring continuity 2:45 2 minutes, 45 seconds in operations and minimizing the impact on overall volumes. Before we go into the financials, let us also highlight 2:53 2 minutes, 53 seconds the two long-term contracts which we concluded in the last quarter. First one being a backward integration initiative with a leading global chemical company 3:01 3 minutes, 1 second transitioning the relationship into a more integrated end to-end manufacturing model with a capex of about uh 200 to 3:08 3 minutes, 8 seconds 250 kores uh to cater to the requirement over the residial 15-year contract period. Uh and the second one is a $150 3:16 3 minutes, 16 seconds million multi-year supply agreement with a global agrochemical innovator for a critical agrochemical intermediate used in crop protection formulations uh 3:25 3 minutes, 25 seconds extending through March 31st 20130 without uh this contract will be supplied without uh any instrumental 3:32 3 minutes, 32 seconds capex. These developments mark a strategic shift towards deeper integration, enhanced earning visibility and improved capital efficiency. 3:41 3 minutes, 41 seconds Notably during the year RT Industries was also honored with the 2026 Gallup exceptional workplace award by Gallup 3:49 3 minutes, 49 seconds becoming one of the first manufacturing companies in India to receive this recognition. This distinction further reinforced AI's position as a global 3:57 3 minutes, 57 seconds manufacturing organization combining operational scale with high performance and a peoplecentric culture. Let me now take you through the financial 4:05 4 minutes, 5 seconds performance for the quarter and the full year. For the Q4 FI26, the company reported revenue of rupees 2,422 crores, 4:14 4 minutes, 14 seconds representing a growth of 9% Y uh driven by stable domestic demand and increase in export volumes. AIDA stood at rupees 4:22 4 minutes, 22 seconds uh 342 cring 29% Y and profit after tax was rupees 137 cr registering the growth 4:30 4 minutes, 30 seconds of 43% Y. The freight cost has significantly increased in the current quarter driven by increase in export shipments and also due to increase in 4:38 4 minutes, 38 seconds the fuel rates accounting for the bulk of the increase in the other expenses. 4:42 4 minutes, 42 seconds Interest cost also include an amount of rupees 39 crores being the revaluation loss in respect of our long-term foreign 4:49 4 minutes, 49 seconds currency loan. For the year for the full year FY26 uh revenue stood at rupees 4:56 4 minutes, 56 seconds 9,18 crores up 12% on a y basis. Aa grew by over 15% to close as rups 1172 crores 5:05 5 minutes, 5 seconds while pat recorded a growth of about 27% to close the year at rupees 419 crores. 5:10 5 minutes, 10 seconds In line with the guidance given the capex for the year was at about 1125 crores. Overall the performance reflects 5:17 5 minutes, 17 seconds 3D execution supported by volume growth improving capacity utilization and benefits coming from operational efficiency despite continued margin 5:25 5 minutes, 25 seconds pressure uh over a significant part of the portfolio. Let us talk about uh specific business updates starting with 5:33 5 minutes, 33 seconds uh energy application which contributes roughly 40% of the revenue. We continue to maintain a very strong global presence holding a market leading 5:42 5 minutes, 42 seconds position. The volumes for the quarter were down 4% quarteron quarter primarily driven by lower exports to the Middle East where which were impacted due to 5:50 5 minutes, 50 seconds geopolitical disruption. The impact was lower as we were able to successfully reroot part of these volumes to other geographies and despite the disruptions 5:59 5 minutes, 59 seconds the capacity utilization continued to remain high preserving our wallet share with the global customer. The full impact of disruptions will be felt in 6:06 6 minutes, 6 seconds the ongoing quarter. Our expansion to 360 KTPA is on track and is expected to be commissioned soon in line with the market requirements. 6:16 6 minutes, 16 seconds Ongoing vulnerability in the refining product margin does create uncertainty in terms of gasoline after cracks and the supply chain risk related to the key 6:25 6 minutes, 25 seconds RMS. Um is adding some near-term risk to this business. uh but against this backdrop we maintain a very dynamic approach balancing volume growth with 6:34 6 minutes, 34 seconds spread management to optimize overall profitability to the best extent possible in non-energy applications agrochemical applications as a basket 6:42 6 minutes, 42 seconds demonstrated a steady volume growth albeit the margin pressure continue to prevail the contract wing supports the growth of select product and 6:51 6 minutes, 51 seconds intermediates and is in line with our plans to ramp up capacities which are already created for this application dye pigments Trains were relatively 6:59 6 minutes, 59 seconds stable for the quarter. Uh in the near term as the impact of lestia war is felt in the global market uh there could be 7:07 7 minutes, 7 seconds some impact on export but that we expect to be compensated by increase in volumes in the domestic markets. Polymer as application continue to perform well and 7:16 7 minutes, 16 seconds is currently in a strong growth phase especially demand and volume driven due to applications in the EV markets. uh 7:23 7 minutes, 23 seconds within the polymer application MPDA specifically continues to underperform due to heavy competition uh from China. 7:30 7 minutes, 30 seconds Rest of the portfolio continues to do uh extremely well. Pharma application also continued to remain stable during the quarter. The last quarter announcement 7:38 7 minutes, 38 seconds of Chinese China's anti-involution stance and you know impact to products related to PNCB in the NCB chain uh 7:47 7 minutes, 47 seconds should start seeing benefits from the Q1 FI27 onwards. But on an overall basis uh even the non-energy uh and uh sort of 7:56 7 minutes, 56 seconds the base business has performed better driven by volume growth and supporting cost efficiencies as we continue to make rapid progress on our operational and 8:04 8 minutes, 4 seconds strategic initiatives on zone 4 projects. Uh they're still expected to be commissioned in the phase manner during the current financial year. 8:13 8 minutes, 13 seconds Multi-purpose plant and PA plants are actually under commissioning trials and should come on stream soon while others will commission gradually in the next 8:21 8 minutes, 21 seconds couple of quarters. These projects were delayed by 3 to four months on account of labor constraints primarily uh driven 8:28 8 minutes, 28 seconds by uh LPG commercial LPG related issues and migration of labor uh due to election as well. The company has taken 8:36 8 minutes, 36 seconds multiple steps to support contract labor and to sustain them and to minimize the delay in the capexation. 8:43 8 minutes, 43 seconds From a capital allocation perspective as guided earlier uh you know the capex for FI26 is at about 1125 crores. Uh you 8:51 8 minutes, 51 seconds would have witnessed the decline in the capex spends in FI26 versus the spends in the past two to three years which is in line with our plans to optimize the 8:58 8 minutes, 58 seconds capital allocation. uh our capex for FI27 is expected to be in the range of 700 to 800 crores as we continue our 9:06 9 minutes, 6 seconds journey to optimize capex and maximize the returns. Going forward, we expect to invest in high growth initiatives with investment largely focus on niche high 9:15 9 minutes, 15 seconds return projects. Our previously announced partnerships are also advancing well. Audience the superform joint venture is on track for 9:22 9 minutes, 22 seconds commissioning in H1 FY27 with an initial focus on agrochemical spend and quoting and markets. Our circularity initiatives also continues to gain momentum with commissioning on track for the CY27. 9:34 9 minutes, 34 seconds All these initiatives not only underscore our R&D progress but also helps us secure a first mover advantage as we tap into emerging opportunities in 9:42 9 minutes, 42 seconds sustainable chemistry. Working capital requirements expanded during the quarter driven primarily by significant elevation in raw material prices uh 9:51 9 minutes, 51 seconds causing an uptick in net debt as well as interest expenses. While we are working with our customers and suppliers to optimize the working average cycle, the 10:00 10 minutes normalization of this might take some time. However, given the capex intensity is lower, we still anticipate the net debt to decline uh in the current year. 10:09 10 minutes, 9 seconds FY 2627 uh begins with sort of cautious optimism supported by improved capacity utilization, strong order visibility 10:16 10 minutes, 16 seconds through long-term contracts and continue to progress on the key growth and integration initiatives. The specific situation in West Asia continues to pose 10:23 10 minutes, 23 seconds near-term risk uh to the availability of certain critical feed stock and placement of feed products in the Middle East. While near-term risk persists, the 10:31 10 minutes, 31 seconds company's actively working with suppliers and customers uh to explore alternate sourcing and placement avenues to ensure continuity of operations. The 10:39 10 minutes, 39 seconds company has delivered strong growth in quarterly a bit uh and is on track to implement profitability improvement initiatives including the higher 10:48 10 minutes, 48 seconds operating leverage related initiatives, cost optimization initiatives and incremental contributions from recently commissioned and upcoming assets. With a 10:57 10 minutes, 57 seconds strong foundation of strategic investments improving capacity utilization and long-term partnerships, RP Industries is well positioned to 11:04 11 minutes, 4 seconds navigate near-term volatility while building a robust foundation for sustainable growth. So with that, I would now request the moderator to open 11:13 11 minutes, 13 seconds the floor for the Q&A session. Thank you. 11:15 11 minutes, 15 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone 11:24 11 minutes, 24 seconds telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. 11:34 11 minutes, 34 seconds Ladies and gentlemen, we will wait for a moment while the question queue assembles. 11:41 11 minutes, 41 seconds We'll take our first question from the line of Archid Zoshi from Noama Institutional Equities. Please go ahead. 11:49 11 minutes, 49 seconds Hi. Uh good afternoon and thanks for the opportunity and uh congrats on a great set of numbers this quarter. Uh first question for uh on the quarterly 11:58 11 minutes, 58 seconds results. I just wanted to understand uh we have had a gross margin expansion. Uh would there be an element of an inventory gain that we might have booked uh especially during the month of March. 12:09 12 minutes, 9 seconds Uh so that was my first one. 12:14 12 minutes, 14 seconds So there is [clears throat] I think uh on a overall quarter basis there is a FX gain of roughly around 10 crores on 12:21 12 minutes, 21 seconds inventory I think it's a bit of a mixed bag because though the pricing went up in the March many [clears throat] of our raw material pricing also went up 12:28 12 minutes, 28 seconds simultaneously and we did have uh some amount of contracts concluded from a pricing point of in Feb which we 12:35 12 minutes, 35 seconds continue to serve in March. So not a significant impact of inventory gain in the last quarter but from a FX standpoint there was a gain of roughly 10 crores in the last quarter. 12:46 12 minutes, 46 seconds Uh understood. Uh uh uh second question on um uh the exposure that we have in 12:53 12 minutes, 53 seconds our energy portfolio uh specifically in the Middle East uh and also at the company level if you can uh uh throw some number on that. 13:04 13 minutes, 4 seconds So on an average yearly average basis roughly 9 to 10% of our revenue came from Middle East which is dominantly in 13:11 13 minutes, 11 seconds energy application. Uh so that's the extent of exposure that we have currently in the region. We are working actively to uh to figure out a way to 13:21 13 minutes, 21 seconds divert that product portfolio to the rest of the world. We also hope the situation in the Middle East should get settled uh at some point in time and at 13:28 13 minutes, 28 seconds that point in time we actually might see a increase in demand uh in that particular region given you know uh practically the material flow to the 13:36 13 minutes, 36 seconds region has stopped now for almost 6 to 8 weeks kind of time frame but nonetheless that's the extent of exposure. 13:44 13 minutes, 44 seconds Sure. Uh one last final one before I jump back to you again. Uh so you did mention about the MPPP and the PEDA 13:51 13 minutes, 51 seconds plans to come uh uh online as uh at the earliest. Uh what would be the balance 13:58 13 minutes, 58 seconds uh uh capex that we plan to commission in this year? So if you could just elaborate on the kind of timelines of uh uh in terms of commissioning of these 14:06 14 minutes, 6 seconds capexes and when can we expect uh uh revenue acrals uh or sales to happen from these plants. If you can uh split 14:14 14 minutes, 14 seconds this in a uh elaborate uh timely manner as possible that would be helpful. Uh that would be all from my side. Thank you. 14:22 14 minutes, 22 seconds Yeah. So I think the entire zone 4 which is a combination of a multi-purpose plant, calcium chloride plant and there 14:31 14 minutes, 31 seconds are five chemistry blocks different chemistry block. I think the entire capex will get commissioned during FY27. 14:38 14 minutes, 38 seconds I think the first two which you'll get off the block is the calcium chloride and the multi-purpose plant. The PA capacity we consider it as extension of 14:47 14 minutes, 47 seconds the multi-purpose plant. So I think all of the calcium chloride is actually already sort of uh the commercial runs 14:55 14 minutes, 55 seconds have happened. The plant is under operation. It will ramp up to full capacity over the course of next uh 3 to four weeks. I think the multi-purpose 15:02 15 minutes, 2 seconds plant and uh associated extension of PA is also under commissioning trials as we speak. So within this quarter we should 15:10 15 minutes, 10 seconds be able to declare it sort of uh commissioned and commercialized. I think the remaining five different blocks will get commissioned throughout the current 15:19 15 minutes, 19 seconds financial year. I think compared to our original expectation there is a 3 to four months of delay uh in that commissioning cause mostly due to 15:28 15 minutes, 28 seconds contract labor issues. But nonetheless even with that we anticipate all of this get to commission within the current financial year and that accordingly the 15:37 15 minutes, 37 seconds revenue aggregation will start over a staggered manner right we don't anticipate all of it will go through a full capacity utilization in a very 15:45 15 minutes, 45 seconds short time frame as I'd mentioned earlier it does take a little bit of a time bandwidth to go through a qualification cycle and improve capacity 15:52 15 minutes, 52 seconds utilization uh over over a period but the initial revenue from these assets should start uh as early as from Q2 of this financial year. 16:06 16 minutes, 6 seconds Thank you. Right. 16:09 16 minutes, 9 seconds Next question is from the line of Arun Prasad from Aventus Park. Please go ahead. 16:15 16 minutes, 15 seconds Uh good morning. Uh thanks for the opportunity. Uh my first question is on uh look at ouration 16:24 16 minutes, 24 seconds most sorry can you use your handset more please? your audio is not very clear. Uh hopefully this is better. 16:32 16 minutes, 32 seconds Yes. 16:34 16 minutes, 34 seconds Um so uh my first question is on the utilization we are mostly at upwards of 80 85%age and if I look at the Q4 16:43 16 minutes, 43 seconds volumes and annualize it if it is it's close to 100%age. So is this a industrywide phenomenon or is it just uh 16:50 16 minutes, 50 seconds because uh we are at uh this kind of utilizations because we didn't have any supply last cycle. 16:58 16 minutes, 58 seconds No, I think it would be bit unfair for me to comment whether this is industry wise phenomena. I I think at AIL what I 17:05 17 minutes, 5 seconds can comment on it is I think improving utilization levels of all of our existing asset has been a deliberate strategy and I think we have pushed 17:13 17 minutes, 13 seconds volumes sometimes you know even at the expense of a slight uh slight compromise on the margins and that is reflected in 17:21 17 minutes, 21 seconds the utilization levels that you see I think there are some value chains like PDA where we are structurally figuring out a long-term solution but I think apart from that in terms of the value 17:29 17 minutes, 29 seconds chain we have been able to push up the iteration levels Um and as we speak uh we see further uh 17:36 17 minutes, 36 seconds upside possible in select chains like DBD where we are also working on you know uh capacity debottle making um as 17:44 17 minutes, 44 seconds we mentioned in the last quarter and even in sort of ethylation chain where the new contract that we signed in the last quarter plus the downstream integration of data will help us improve 17:53 17 minutes, 53 seconds utilation levels in that particular chain but uh but I think in from our from our global customer diversification 18:02 18 minutes, 2 seconds and relationship ship standpoint. I think in a significant part of our portfolio, we are reaching to utilization levels which are which are healthy. 18:11 18 minutes, 11 seconds Okay. Because this kind of utilization usually uh leads to a pricing recovery and a margin uh expansion because of the 18:19 18 minutes, 19 seconds tight uh supply um demand uh balance. So should we expect uh some kind of a 18:28 18 minutes, 28 seconds pricing related uh upsides from our existing portfolio and existing or models? 18:35 18 minutes, 35 seconds I I think the utilization levels that you see are at a uh sort of the bulk product level right level, DCB level or 18:44 18 minutes, 44 seconds at a italication level. I think if you look at our portfolio, our portfolio significantly also goes downstream of uh 18:52 18 minutes, 52 seconds this bulk isomer level chemistries and that's where I think the story product by product will be very different. Of course, there are some value chains 18:59 18 minutes, 59 seconds where there is a pricing recovery uh at a bulk level and we talked about NCB last quarter as well and we have seen that uh kind of happening now as the 19:08 19 minutes, 8 seconds Chinese anti-involution plays out where the margin profile has definitely included including pricing. I think TCB continues to remain quite robust uh and 19:17 19 minutes, 17 seconds is driven by both I think tighter capacity transition as well as uh as well as demand growth coming from EV 19:24 19 minutes, 24 seconds market versus some other chains uh even though we might be operating uh at a relatively higher level if the global industry hasn't moved to that relation 19:33 19 minutes, 33 seconds levels then the margin uptake or the pricing correction will not happen. 19:38 19 minutes, 38 seconds Okay. Okay. in your assessment u that uh that is a likely scenario maybe we are at higher levels industry is not uh this 19:46 19 minutes, 46 seconds kind of a level I I think there are some products in which that situation does exist and that's why I would hesitate to 19:54 19 minutes, 54 seconds say that the across the portfolio we are seeing margin recovery or pricing corrections I think there are definitely pockets of the portfolio where it is 20:02 20 minutes, 2 seconds happening uh and in general I think given the global dynamic I think uh if China continues to act uh what what they 20:11 20 minutes, 11 seconds are talking about then there should this recovery should become much more broad-based going forward compared to current situation where it is sort of in 20:19 20 minutes, 19 seconds select pockets industry understand uh my my second question is on the NMA um so 20:26 20 minutes, 26 seconds typically on a elevated uh group prices uh our understanding is that NMA scores over the say probably the traditional 20:35 20 minutes, 35 seconds NTB um are you seeing this playing out uh at least and secondly uh if you are not 20:42 20 minutes, 42 seconds facing or if you're not seeing a supply to the Middle East uh where we are facing MMA volumes currently and is it sustainable? 20:52 20 minutes, 52 seconds Yeah. So I think on the MMA economics frankly uh a lot of complicated answer without getting into technical details. 21:00 21 minutes I think [clears throat] I mean we've described this a few times in the past. 21:04 21 minutes, 4 seconds There are multiple factors which play out when it comes to affordability of MM of final customers. Um I think one of 21:12 21 minutes, 12 seconds that is also a NAFTA gasoline spray. I think in the current situation NAFTA being uh significantly stronger that sometimes does have impact on NAFTA 21:21 21 minutes, 21 seconds gasoline spread available to our customers but at the same time the absolute pricing level sort of remaining at a higher level also creates a 21:29 21 minutes, 29 seconds counterbalancing it sort of factor uh for the for the spread affordability. 21:34 21 minutes, 34 seconds It also has an impact in terms of our raw material cost goes up right both analine and methanol at a significantly elevated level. So in that context uh 21:43 21 minutes, 43 seconds our ability to offer certain pricing to customers that also gets impacted by ultimately raw material cost prices have to be passed on. So there are multiple 21:51 21 minutes, 51 seconds factors playing over there. What I can say is that um we are able to optimize volumes and spreads to ensure that 21:58 21 minutes, 58 seconds liquidation happens wherever there is a physical possibility of supplying the cargo. Uh so our shipments to US are 22:06 22 minutes, 6 seconds relatively consistent and happening. our shipments to Europe are starting uh and we hope to expand that uh going forward. 22:14 22 minutes, 14 seconds I think the the domestic market also remains uh relatively consistent from a volume standpoint. I think Middle East is a place where physically it is 22:21 22 minutes, 21 seconds impossible to ship the material as of now as we speak and uh that's where there's an impact. I think we partially 22:29 22 minutes, 29 seconds offset that in the last uh quarter but the full impact of that I think will be visible uh in the coming quarter. It 22:37 22 minutes, 37 seconds depends on how soon the uh west situation settles and we are able to restart our flows to Dubai and Oman market. 22:45 22 minutes, 45 seconds So we should expect the contribution from energy uh in our revenue should slightly moderate. 22:53 22 minutes, 53 seconds Uh frankly difficult to answer the question right because we are uh in the sort of four weeks into the quarter. Um 23:02 23 minutes, 2 seconds you know if the situation stabilizes there is also possibility that the volume requirement in Middle East can dramatically go up given the region has 23:10 23 minutes, 10 seconds been running dry of the product for last 6 8 weeks but if the situation in West Asia doesn't settle down over the course of next two months then of course uh you 23:18 23 minutes, 18 seconds know we would expect certain impact on the volumes for this molecule going into the Middle East market. 23:23 23 minutes, 23 seconds Interesting. If I can squeeze in one more question on capex. Uh you said that uh 26 capex are reduced from 1125 crores 23:30 23 minutes, 30 seconds to the summit or 800 odd crores. Is it because of the scope reduction or 23:36 23 minutes, 36 seconds postponing of the cash flows uh to 27 uh and finally the break up on the FI26 27 capital? 23:45 23 minutes, 45 seconds We we did not FY26 capital was in line with what we had said. It was 1125 crores. It was not reduced. FY27 capex 23:54 23 minutes, 54 seconds is what we are saying will be in the range of 750 to 800. 23:57 23 minutes, 57 seconds Oh okay. Okay. Any breakup uh approximate ballpark breakup of the project life 750 to 800 crores 24:04 24 minutes, 4 seconds significant part of it will still go in completion of zone 4 and part of it will also go to the new long-term contract which we signed right where we announced 24:12 24 minutes, 12 seconds total capex of 250 crores. I think part of that will be spent in the current year. So these two will kind of broadly 24:19 24 minutes, 19 seconds account for uh significant amount of capex and then we have a sort of yearly run rate of 150 or that goes into assessment. 24:30 24 minutes, 30 seconds Oh okay understood. And and finally on the NTP and the calcium chloride uh at current prices uh what is the series uh revenue from these two projects? 24:41 24 minutes, 41 seconds I would not uh uh like to comment again we we don't talk about revenue. I think we talk about margin profiles. Um and 24:49 24 minutes, 49 seconds given there are lot of products which are interlin even within MTP and uh within the different zone 4 blocks. I 24:58 24 minutes, 58 seconds think the total potential coming from that location in a integrated manner is what we have talked about and I think we 25:06 25 minutes, 6 seconds continue to maintain uh that range. Um and we will hit that you know we will hit that over the course of uh two years 25:13 25 minutes, 13 seconds is the current plan. Um I think it would be it would not be correct to talk about uh revenue/margin potential based on 25:21 25 minutes, 21 seconds today's pricing because it is definitely a bit uh I would not call it a sort of regular pricing/m margin level. 25:30 25 minutes, 30 seconds Understood understood all uh thank you very much. 25:35 25 minutes, 35 seconds Thank you. Next question is from the line of Adita Ketan from Smith's Institutional Equities. Please go ahead. 25:43 25 minutes, 43 seconds Yeah, thank you sir for the opportunity. 25:46 25 minutes, 46 seconds Uh so my question is on to the D segment. Uh so as you mentioned on the D segment 25:52 25 minutes, 52 seconds uh is recovering and we are expecting a steady state uh going but when we look at the numbers on Y basis and on quarter 26:01 26 minutes, 1 second basis both and it seems like the D segment is now slowing down after peing out the last few quarters. uh is there 26:09 26 minutes, 9 seconds any changes into uh into the structure of the business or volumes in the global markets or Indian markets are slowing down. Any any thoughts of that? 26:19 26 minutes, 19 seconds So overall uh if you look at our share of business in rice, pigments and printing mix, we classify the three end markets together it remains in the range 26:27 26 minutes, 27 seconds of 10 to 11%. Um and uh you know it will remain broadly around that. I think there are multiple trends within the segment at a product level which differ. 26:37 26 minutes, 37 seconds For example, you know, uh 33DCBH is one of the core product invest segments where we are facing pressure on the demand from the global markets but then 26:46 26 minutes, 46 seconds that is partially getting compensated by increasing demand in the local market as the global consolation in the pigment industry happened. Right? So there are 26:54 26 minutes, 54 seconds different trends at a individual product level. Overall uh I think our share of you know this application remains at 27:03 27 minutes, 3 seconds around 10 11 odd percentage. Um there is a part of the portfolio where uh because 27:09 27 minutes, 9 seconds of extremely high raw material pricing and corresponding price price being passed on through our products some of 27:17 27 minutes, 17 seconds the low margin segments may not be able to afford and we might see a slight amount of demand destruction but u and 27:24 27 minutes, 24 seconds that could be a potential impact in a 3 to six months kind of time frame but so far I think the the pressure in the global market has been compensated by 27:32 27 minutes, 32 seconds the growth in the domestic Sorry. 27:38 27 minutes, 38 seconds It has been two years and persistently are mentioning one of the margin. 27:44 27 minutes, 44 seconds Uh it seems like there is no answer. uh any sort of a you can uh any sort of a positive thing which you see going ahead 27:51 27 minutes, 51 seconds for FI 2728 whether we could uh so higher up in the domestic part could partially mitigate the RM price right 28:00 28 minutes any sort of things that can change structurally into the business I think the biggest driver to get back 28:08 28 minutes, 8 seconds the margins in the agrochemical segment would be uh how sort of Chinese industry evolves on this particular application I 28:16 28 minutes, 16 seconds think they have been one of the most important driver uh of the margin compression in this segment over the 28:23 28 minutes, 23 seconds last few years and I think their conduct and behavior over the coming years coming quarters and years is what 28:31 28 minutes, 31 seconds ultimately determine the the ultimate sort of margin potential in these segments. Um as I said um the narrative 28:38 28 minutes, 38 seconds that we are hearing what we are seeing I think if that persists and that becomes much more broad-based uh we might see a 28:45 28 minutes, 45 seconds recovery in the margin but I think uh we wait to see a firmer trend to make a conclusive commentary on the 28:54 28 minutes, 54 seconds Got it. Uh onto the debt side we have seen like debt to reach around 49 billion in its fiscal year. So highest 29:00 29 minutes over when we look at the AR history. Uh any particular reason because we also see on the asset side there is 600 cr of 29:08 29 minutes, 8 seconds cash also sitting today. Uh yeah so what I say because we don't have 29:15 29 minutes, 15 seconds also material capex also 700 800 cr or maybe 1,000 cr that we can easily do it from our uh so cash only. What is the need for so much debt taking down? 29:26 29 minutes, 26 seconds So uh let me answer that. Uh so the the cash which you see is more like a one-off kind of a situation. It just happened that one of the term loan got 29:35 29 minutes, 35 seconds disersed to was the last days of March and then couple of holidays. So the money were not effectively utilized to reduce the debt. So on the net debt 29:43 29 minutes, 43 seconds basis we are still at around 4,300 crores. Uh a good part of this maybe around 250 to 300 crores is purely because of the working capital increase 29:51 29 minutes, 51 seconds which has happened in the uh last part of the Q4. Plus as you would have seen the export profile has gone up. Export 29:59 29 minutes, 59 seconds revenues have gone up. So in exports the receivable days are optically a bit higher than the domestic uh receivable days which is where the working capital 30:07 30 minutes, 7 seconds profile continues to remain a bit elevated. So a 4,900 cr debt obviously will not be there. We have to look at a 30:14 30 minutes, 14 seconds net debt number of around 4,300 cr. Now as we speak bulk of that cash has already been used to liquidate the debt portfolio immediately in the first week 30:21 30 minutes, 21 seconds of April. So that's how it is. But yes uh going forward as the capex intensity is going down the capex is coming down a 30:29 30 minutes, 29 seconds bit and cash flow is improving the the debt for this year will uh start tapering off. 30:36 30 minutes, 36 seconds So I got one last question. Uh can you provide the break up of the CWIP of 2,000 cr you have done in FI FI20? 30:45 30 minutes, 45 seconds A bulk of that would be for zone 4. As you understand zone 4 had a capex of around uh 1,800 odd cr. So a bulk of 30:52 30 minutes, 52 seconds that would be with zone 4. I don't have that exact breakup right now. We'll find it separately later on. But yeah, a bulk of that would be zone 4. So zone four 31:01 31 minutes, 1 second from an overall perspective a bulk of capes to happen has already happened by FI26. 31:08 31 minutes, 8 seconds Got it. Thank you. 31:11 31 minutes, 11 seconds Thank you. We'll take our next question from the line of Amar Moria from Lucky Investments. Please go ahead. 31:18 31 minutes, 18 seconds Yeah. Hi sir. Thanks a lot for the opportunity. Uh sir just want to understand like uh in terms of your uh 31:28 31 minutes, 28 seconds pricing environment primarily let's say if you see an agree portfolio uh are you seeing some some improvement in the 31:37 31 minutes, 37 seconds pricing and primarily uh lot of supply which was China based there were couple 31:43 31 minutes, 43 seconds of plants which had fire incidents so do you see any improvement in your uh pricing of the product. 31:53 31 minutes, 53 seconds So I think on absolute pricing of course there is a huge positive trajectory compared to where we were in Jan. I think what we have to look at is the spread and margin because even raw 32:02 32 minutes, 2 seconds materials have also gone up significantly. I in some cases 60% in some cases they have also more than doubled. So I think what we have to look 32:10 32 minutes, 10 seconds at is spread and I guess not necessarily absolute pricing which definitely is significantly better compared to where 32:16 32 minutes, 16 seconds it was uh you know at the start of the Q4. Um I think some of the incidences 32:23 32 minutes, 23 seconds that you mentioned that which happened in China. Yes, I think there is a sort of increasing scrutiny especially on 32:31 32 minutes, 31 seconds sort of nitration chemistry related assets. uh and we see uh more and more regulatory constraints rightfully uh 32:39 32 minutes, 39 seconds being put so on these chemistries to avoid sort of hazardous uh operations which are kind of non-safe right so move 32:48 32 minutes, 48 seconds more towards continuous operation put traditional safeguards in place and that will mean that some of the smaller volume um uh inefficient uh players will 32:58 32 minutes, 58 seconds ultimately vacate the market at some point in time and that should lead to sort of indust consolidation and sort of better conduct going forward but it will 33:07 33 minutes, 7 seconds happen over a period of time um in in select products we see impact of that uh in the near term but I think as I said a 33:16 33 minutes, 16 seconds broad-based recovery um we will I guess get to see a firmer trend over the course of next few quarters 33:24 33 minutes, 24 seconds okay and typically when you talk about spread let's say uh ideally uh how much percentage of your portfol 33:33 33 minutes, 33 seconds in agro as well as in the energy space would have seen the improvement in the spread. 33:41 33 minutes, 41 seconds So I think uh I think on agro side frankly um we are currently we are able 33:48 33 minutes, 48 seconds to hold on to spread uh and that itself is uh from a company's point of view is a good outcome because passing on such a 33:57 33 minutes, 57 seconds rapid increase in raw material cost to uh to agrochemical specialtity chemical companies who have a much longer 34:05 34 minutes, 5 seconds gestation period in terms of absorbing uh price rises. 34:10 34 minutes, 10 seconds um I think is a good outcome. I think over the course of next 3 to six months we will be able to fully pass on the price provided you know there is certain 34:19 34 minutes, 19 seconds stability that comes on the raw material side which itself is a bit of a question mark right now. Um typically there is a huge amount of inventory in the 34:27 34 minutes, 27 seconds agrochemical chain right we are at intermediate level but there will be inventory at intermediate level inventory at a technical level inven at a formulation level and inventory at 34:35 34 minutes, 35 seconds ultimately end consumer level. So all of that needs to get adjusted before the full pricing is passed on and uh that's 34:42 34 minutes, 42 seconds what typically takes time versus you know uh if you look at some of the energy applications or some of the polymer applications where you are 34:49 34 minutes, 49 seconds directly closer to end customer there the price pass through happens relatively quickly okay and typically for one last 34:59 34 minutes, 59 seconds typically how much uh percentage of the supply would have gone out of the system let's say because of this fire incident 35:06 35 minutes, 6 seconds in China and this small facilities which are now likely to be closed or on the verge of like you know uh closure 35:15 35 minutes, 15 seconds because of the scrutiny increasing and all those things difficult to comment we don't have answers for that also the specific uh 35:23 35 minutes, 23 seconds incidences that you are mentioning are not linked to our product portfolio right so it doesn't impact a directly as 35:29 35 minutes, 29 seconds such and position to answer that okay fine sir thanks a lot thank you sir thank 35:37 35 minutes, 37 seconds Thank you. Next question is from the line of Nitesh Dud from Anandraati Institutional Equity. Please go ahead. 35:45 35 minutes, 45 seconds Uh hi uh good afternoon team. Uh thank you for the opportunity. Uh my first question is uh uh uh you know basically 35:53 35 minutes, 53 seconds it looks like you know there is some there is a higher inventory created. uh that's you know also visible from the disconnect between the increase in the 36:01 36 minutes, 1 second production figures across the products and the uh you know the sequential revenue decline if you see uh and that's despite the increased prices so what 36:10 36 minutes, 10 seconds explains this uh disconnect uh I see a stock adjustment line of 109 crores that's increase in inventory could you give some color on this 36:19 36 minutes, 19 seconds yeah so uh if you're looking at that there certain materials being moved out from India were exported out and uh uh 36:26 36 minutes, 26 seconds are on seas reaching to our customers and that is why they have been in transit inventories which you're looking at. 36:34 36 minutes, 34 seconds So that material given is not delivered to a customer I think the revenue from that part of the portfolio is not recognized. 36:42 36 minutes, 42 seconds Uh okay so is that what extends the increase in the working capital on the inventory side uh you know between Q2 and Q4. Yeah. Yes. 36:50 36 minutes, 50 seconds uh obtained and uh so see that and some element of the raw middle price impact which came in the later 36:56 36 minutes, 56 seconds part of the month the last month right uh and so sequentially there's a 37:03 37 minutes, 3 seconds 22% increase on the other expenses right on a 5% revenue decline so that's also partially related to the uh production 37:10 37 minutes, 10 seconds levels versus the sales volumes that is primarily driven actually by fate so I think we saw especially mid 37:19 37 minutes, 19 seconds bonders we saw sort of huge escalations in the freight rates. Um so I think the jump that you see in other expenses significant part of it is actually 37:28 37 minutes, 28 seconds coming from freight. It's a combination of freight rates as well as the additional export volumes right I think 37:34 37 minutes, 34 seconds the overall on overall basis almost 57% of uh total revenue came from exports uh and that's what uh is also reflected in the incremental fate in the expenses. 37:46 37 minutes, 46 seconds Uh right right and so of the targeted aida u so we expect about 350 to 400 37:55 37 minutes, 55 seconds crores coming in from from the capexes right and with this you know the delay in the zone 4 cex by a few months uh any 38:04 38 minutes, 4 seconds slippages you know on the guided eida numbers or probably you could stay closer to the lower end of the eida uh 38:11 38 minutes, 11 seconds range x of pricing gains obviously I mean what's your thoughts No sin look our our target as a management team 38:19 38 minutes, 19 seconds still remains on how to do catch up even with that three to four months of delay. 38:24 38 minutes, 24 seconds At the same time we are transparent in communicating in terms of how are we progressing against our initiatives right. Um I think we laid down a very 38:32 38 minutes, 32 seconds clear path in terms of what actions we are taking to achieve the targeted growth. Um and and cost and operating 38:41 38 minutes, 41 seconds you know efficiencies operating level which is sort of relatively in our control is going as per track. Most of the initiatives in the cost are 38:49 38 minutes, 49 seconds implemented. They will start accuring fully uh in the current year. Operating leverage all initiatives are on track. 38:56 38 minutes, 56 seconds There is no delay in any of these. Of course, near-term relativity will create quarteronquarter different picture. But from a strategy implementation point of 39:03 39 minutes, 3 seconds view, uh there is no lag effect there. I think on the capex side yes we are uh behind compared to our original plan and 39:12 39 minutes, 12 seconds that 3 to four months of delay will have an impact uh in terms of how much we are budgeting over the course of next two years but we are figuring out strategies 39:20 39 minutes, 20 seconds to mitigate that impact and this is purely on account of labor shortages or any other reasons also 39:27 39 minutes, 27 seconds partially responsible because I think 3 to four months delays on account of labor shortages suddenly I mean at least 39:36 39 minutes, 36 seconds In last quarter this this wasn't spoken about so not sure maybe if you can explain this is the phenomena of this quarter 39:44 39 minutes, 44 seconds there's a 35% reduction in the contract labor availability in the region where we are regulating in capex and uh right now the project is in the kind of last 39:52 39 minutes, 52 seconds mile connectivity like where a lot of pipeline work needs to happen which is usually significantly labor intensive uh and that's where uh I think the impact 40:00 40 minutes is hitting us right now so the combination of impact of LPG and I is to some extent also the election created 40:08 40 minutes, 8 seconds migration. Um we are working quite proactively to address that issue but today yes we do have a significant shortage of contact labor in our 40:17 40 minutes, 17 seconds solution. Understood. Understood. And just one last s so this 39 crores of revaluation loss on effect I mean it 40:25 40 minutes, 25 seconds looks slightly on the higher side for a for a particular quarter. uh we can you know probably give some uh you know 40:31 40 minutes, 31 seconds color on the total exposures and uh the hedging policies there. 40:36 40 minutes, 36 seconds So we have roughly around $87 million of an FX which is unhedged and is open rupee depreciated by close to 5 rupees 40:44 40 minutes, 44 seconds from a level 31st March 31st December was at 89.8 or something and 31st March was at 94.88 so there was a 5 rupee 40:53 40 minutes, 53 seconds depreciation on Indian rupee on a $87 million of exposure. Unfortunately the accounting treatment uh requires us to 41:00 41 minutes take the impact of this on the day of the balance sheet. Whereas if we look at the overall dollar perspective say uh 41:07 41 minutes, 7 seconds this is relatively an exposure which will be repaid over a period of next 8 years. So from a dollar balance sheet point of view I've got a larger export 41:15 41 minutes, 15 seconds portfolio which will absorb this as a natural hedge but from an accounting point of view that gains are accounted only once it is material as well as this loss is accounted now. 41:24 41 minutes, 24 seconds Understood. Understood. Uh great. So thank you so much. really helpful. 41:28 41 minutes, 28 seconds [clears throat] 41:29 41 minutes, 29 seconds Thank you. Next question is from the line of Darita from TSP Asset Managers. Please go ahead. 41:36 41 minutes, 36 seconds Hi. Um, thank you for taking my question. Uh, firstly the 1,800 to 2,000 cr of capex that we are doing on zone 4. 41:45 41 minutes, 45 seconds Uh, can you give a split uh for the calcium carbide uh calcium chloride and MP uh plant? I mean how much would it be? 41:54 41 minutes, 54 seconds Would it be anywhere somewhere between 450 500 odd crores or how should we think about it? 41:59 41 minutes, 59 seconds Typically we will not share asset block by asset block capex. I think at the overall zone level the number is what chin described earlier. 42:09 42 minutes, 9 seconds Uh okay. Uh secondly on the 1,800 cr of IBATA uh 42:18 42 minutes, 18 seconds runway uh 15200 crores was uh from the cost initiatives. Uh any changes uh you 42:26 42 minutes, 26 seconds think from the NPD plus zone 4 plus UPL JV that we may see [clears throat] I mean any any change in the incremental IBIDA from these three u segments. 42:37 42 minutes, 37 seconds I think we are at this point in time we are not changing the EIDA potential from all of these initiative. I think the only thing we are highlighting is on the 42:45 42 minutes, 45 seconds capex level growth. I think this is a slight delay in the project execution and that might have a uh impact on realization of that EIDA potential 42:55 42 minutes, 55 seconds uh in the given time frame but apart from that there is no change uh on any of the AIDA potential that we have already highlighted 43:02 43 minutes, 2 seconds right so 300 to 450 cr is something that can flow through but maybe um not in 43:09 43 minutes, 9 seconds FI28 but could get delayed by six seven odd months or something like that. Yeah. 43:16 43 minutes, 16 seconds Okay. Um on the working capital days, uh our u I understand the freed issues and 43:25 43 minutes, 25 seconds the war related issues but um I believe that our exports will continue to grow as it is. Uh so how should we think 43:32 43 minutes, 32 seconds about the receivable and inventory deals from here on? 43:36 43 minutes, 36 seconds I think it will remain pretty dynamic. I think uh one is export but I think the export to which region also matters quite a bit uh because different regions 43:45 43 minutes, 45 seconds have different voyage times and that ultimately decides your working capital exposure. For example, in last quarter significant part of exposure done to us 43:54 43 minutes, 54 seconds which typically on an average has two to three months of time. So your working capital requirements are much larger versus Middle East where times are as 44:02 44 minutes, 2 seconds low as you know 7 to 10 days uh your working capital exposure is significantly lower. So frankly difficult to comment at this stage. I 44:10 44 minutes, 10 seconds think it does remain quite dynamic depending on which region you're sort of pushing your product to. Um and transit 44:18 44 minutes, 18 seconds times, customer terms, uh you know the situation in the market, all of that determines ultimately what kind of approval position we end up landing 44:26 44 minutes, 26 seconds into. What's more important at this point in time is of course to ensure very dynamic allocation of the product to the regions because a global 44:34 44 minutes, 34 seconds geopolitical situation remains quite volatile. Uh so I think that remains a priority and a subsequent impact of that 44:42 44 minutes, 42 seconds in working capital is managed through incremental debt. Uh we don't like it. 44:47 44 minutes, 47 seconds It does cost us in terms of our balance sheet as well as the interest cost. But there's the necessity given the global situation at this stage. 44:54 44 minutes, 54 seconds No. So I meant keeping the current situation aside. Uh should we think about it as a I mean total your 45:03 45 minutes, 3 seconds networking capital days of anywhere between 60 to 70 odd days we've also seen a 50 odd day kind of a cycle. So that is where I was coming from and more 45:12 45 minutes, 12 seconds so from a perspective of zone 4 is commercialized then how would that incrementally affect our uh working capital days? Ideally as a target you 45:21 45 minutes, 21 seconds would like to remain within 55 to 60 days kind of average levels but as I mentioned it does vary depending on the market position but from a objective 45:29 45 minutes, 29 seconds standpoint I think we like to target 55 to 60 days kind of levels and I guess zone 4 will not materially change the uh number continue to be in the same 45:38 45 minutes, 38 seconds trajectory okay got it and just lastly on the tax state uh um it's been a little volatile 45:47 45 minutes, 47 seconds this year how you I think you mentioned mentioned the 15% kind of tax rate for 2728 uh sorry 27 should that uh should we 45:56 45 minutes, 56 seconds assume it to be 15 or is there any change there we should be in the range of uh maybe around 10 to 15% uh this year there are 46:04 46 minutes, 4 seconds a lot of earlier tax litigations which have came in our favor and that is why you see lot of prior adjustments and uh 46:11 46 minutes, 11 seconds the m the default tax adjustments and everything hopefully with that getting over we will not see much of volatility But given the fact that we have zone for 46:20 46 minutes, 20 seconds which is getting commercialized and there's an IT depreciation which will be a significant part of uh deduction available the tax rate will be in the 46:28 46 minutes, 28 seconds range of around maybe uh 9 to 14 15% kind of stuff. 46:34 46 minutes, 34 seconds Okay. That's all. Thank you. 46:38 46 minutes, 38 seconds Thank you ladies and gentlemen. In order to ensure that management is able to answer queries from all participants kindly restrict your questions to two at 46:46 46 minutes, 46 seconds a time. you may join back the queue for follow-up questions. 46:50 46 minutes, 50 seconds We'll take a next question from the line of Sanjay Jen from ICA securities. Please go ahead. 46:57 46 minutes, 57 seconds Yeah, good afternoon. Uh thanks for the opportunity. Uh first on the follow up on MMA, you did explain some of the dynamic but just to get a picture clear. 47:07 47 minutes, 7 seconds Uh my understanding is there is two big application for MMA. One is uh in the gasoline NAFTA blended application where 47:14 47 minutes, 14 seconds they boost octane. The other one is the refinery which are not able to meet the guidance guidelines on the octane 47:21 47 minutes, 21 seconds boosting aro. Uh they add MMA to meet the regulation. Uh now given gasoline and NAFTA spread in between in fact went 47:29 47 minutes, 29 seconds to negative and even today it remains in a weaker zone and considering the volatility it doesn't seems that this uh 47:37 47 minutes, 37 seconds dynamic is going to change pretty much uh uh in next uh uh one or two quarter. 47:44 47 minutes, 44 seconds how should we think and uh if you can help us with the two breakup one is more sustainable the other one could remain volatile. Uh so that's number one and 47:52 47 minutes, 52 seconds probably an associate question is that considering that crude has gone up uh one can anticipate uh ethanol blending 47:59 47 minutes, 59 seconds to rise very sharply which in itself acts as an upturn and then there is a gas shortage which 48:06 48 minutes, 6 seconds can lead to uh some of these uh dynamics playing against us. I know we have a balance in terms of higher crew type but I think uh there are lot more headwinds. 48:17 48 minutes, 17 seconds So can you help us explain this entire MMA situation or is it going to think about it for next two to three quarters? 48:24 48 minutes, 24 seconds So as as you yourself explained it is complex right because there are multiple trends which play out it simultaneously 48:32 48 minutes, 32 seconds and uh trying to uh aggregate all of these trends which have different directional impacts to come up with a concrete point of view on where we will 48:41 48 minutes, 41 seconds land up uh at the end of you know 3 six months frankly is not an easy exercise because uh individual uh I think you 48:50 48 minutes, 50 seconds only talked about factors but also these factors vary region by region. 48:54 48 minutes, 54 seconds Right. What gasoline state we see today in the Middle East versus what we are seeing in Europe versus what we are seeing in US is also very different number. It's not necessary that all 49:03 49 minutes, 3 seconds three regions will see exactly the same number on a given day. So with all of these factors playing out, I think the 49:09 49 minutes, 9 seconds only objective uh effort that we can do uh is to ensure that we are working very 49:17 49 minutes, 17 seconds closely with our customers to understand their affordability and in that context optimize the volumes and spreads to 49:24 49 minutes, 24 seconds ensure our manufacturing asset sort of runs at a healthy utilization levels and also it gives us guidance in terms of what is our affordability to buy our raw 49:33 49 minutes, 33 seconds materials and that's what we are focused on right Now um I think the gasoline asset cracks have been very volatile. Um 49:40 49 minutes, 40 seconds and yes there are days in which it has gone negative. There are days in which it has also gone up $20 per barrel. 49:46 49 minutes, 46 seconds Right? Uh given the sort of extremely volatile situation that we have seen over the last six weeks. I don't think 49:53 49 minutes, 53 seconds there is any conclusive trend at this point in time which we can draw. Uh and I don't think we will reach a stability until the situation in the Middle East 50:02 50 minutes, 2 seconds is kind of directionally at least settled. Till that point in time, the only thing that we do is to ensure that 50:09 50 minutes, 9 seconds we remain very very uh closely connected with our customers to understand their affordability and try and do um sort of 50:16 50 minutes, 16 seconds our raw material sourcing and the production planning linked to their affordability and their requirement and that's what we're focusing on right now. 50:24 50 minutes, 24 seconds But can you just split between uh or probably give the breakup on how much it is way the pricing is not linked to the 50:32 50 minutes, 32 seconds crack and it is just the production or the refinering inability to produce the gasoline and uh irrespective of pricing 50:41 50 minutes, 41 seconds they will need to add MMA to the gasoline. 50:44 50 minutes, 44 seconds I think that's I would frankly say that's a relatively small market. I think irrespective of pricing the need to add MMA I think that market will 50:52 50 minutes, 52 seconds always remain bit limited because uh MMA is not the only optin booster available in the market right I think there are multiple other uh products albeit you 51:01 51 minutes, 1 second know they operate at a significantly lower performance range but there are of course alternate options available in the market so at some point in time the 51:08 51 minutes, 8 seconds pricing economics has to come uh into the picture when it comes to customer decision making um but you know we can 51:16 51 minutes, 16 seconds have a detailed chat later at this point in time as I said I think the objective remains at least the region where the trade flow is operating right now uh 51:25 51 minutes, 25 seconds there how do we maximize sort of our share uh and we hope that the region where the currently the flows are closed which is the Middle East uh will 51:33 51 minutes, 33 seconds hopefully open up uh you know as the thing stabilizes that's pretty clear my second question is on the contracts uh not the two we 51:42 51 minutes, 42 seconds have announced now I'm talking about the historical five contract one was MMA can help us in the business cycle. Where are 51:49 51 minutes, 49 seconds we in those four contract uh utilization level? Uh some uh have we reached the peak uh contract level? Where are we in those four contracts? 51:59 51 minutes, 59 seconds I know one one got terminated. So uh we were trying to do something out of it but yeah and utilization level will help. 52:07 52 minutes, 7 seconds No. So I think uh I mean uh without getting into the specifics I think but broadly out of three contract one was 52:15 52 minutes, 15 seconds for sort of advanced polymer intermediate that continues to operate as per the contractual terms there is uh 52:22 52 minutes, 22 seconds no volatility there uh you know relatively secure and predictable earning coming from that particular contract. The one link to MMA I think uh 52:31 52 minutes, 31 seconds there were certain aspirations in terms of target volumes and uh that we wanted to achieve. I think at least if you look at the last calendar year I think that 52:40 52 minutes, 40 seconds contract opted uh in that range right so we were able to achieve the target volumes uh it doesn't mean that the monthly and the quarterly volumes 52:48 52 minutes, 48 seconds necessarily are met but at a yearly level if you see uh I think uh that contract did meet uh kind of the 52:56 52 minutes, 56 seconds targeted volumes the our nitric acid contract which was another long-term contract that we did for the purchase of the raw material also continues to 53:03 53 minutes, 3 seconds operate as per the contractual terms and there is uh no deviation uh from that and there was another contract for agrochemical intermediate where the 53:12 53 minutes, 12 seconds volume conditions are being made but yes from a margin point of view there has been a pressure compared to what was originally anticipated uh during the 53:20 53 minutes, 20 seconds contract uh closes but that's the current status of the four large contracts that's that's great one last on the 53:26 53 minutes, 26 seconds balance sheet side um we ended this year with four odd uh times neted to ITA and next year there is an headwind of higher 53:35 53 minutes, 35 seconds raw raw material translating into higher working capital requirement and we have a target of reaching the 2.5xed 53:43 53 minutes, 43 seconds toa can you help us the part to be uh meed to a bit of 2.5x in next two years 53:52 53 minutes, 52 seconds I think we Jason can add but I think we closed the year at roughly 1172 and our net debt was 4,300 54:01 54 minutes, 1 second 3.6 time so we are roughly at a 3.6 six level uh just to try and get that perspective right. Um going forward of course the 54:09 54 minutes, 9 seconds anticipation is that the AIDA will increase and the net debt will go down. 54:13 54 minutes, 13 seconds Um I think this is the year potentially where hopefully the cash flow should be more uh than the capex that we are 54:20 54 minutes, 20 seconds planning to do. uh which should be uh and from a working capital point of view yes there is a pressure but I mean 54:26 54 minutes, 26 seconds whether it goes the current you know currently they're operating at a crude level of $110 per barrel right if it 54:33 54 minutes, 33 seconds goes to a scenario where it goes to $140 and $50 per barrel then of course we're looking at a scenario where the raw material working capital requirement 54:40 54 minutes, 40 seconds will go even further up and that will put a strain on the balance sheet the likelihood of that scenario we don't know uh in general the anticipation is 54:48 54 minutes, 48 seconds that the pricing scenario should stabilize at the current level or should get corrected once the situation normalizes and that should ideally lead 54:56 54 minutes, 56 seconds to um reduction in the working capital uh requirement uh going forward. Um and 55:03 55 minutes, 3 seconds as I talked about capex and uh you know with the capex intensity going down and the operating cash flow going up overall 55:10 55 minutes, 10 seconds the at least the internal target is to reduce the net levels from the current levels in the current financial year 55:17 55 minutes, 17 seconds despite the current pricing scenario um and the capex intensity that is planned for the current year. 55:25 55 minutes, 25 seconds Super uh thanks thanks for all those elaborate answers and the super for the coming. Okay. 55:32 55 minutes, 32 seconds Thank you. We'll take our next question from the line of Dell from HDCM. Please go ahead. 55:39 55 minutes, 39 seconds Uh yeah. So thank you so much. uh so the nitration related incidents in China probably are linked to some specific product uh one key product but I just 55:46 55 minutes, 46 seconds trying to understand based on some of the commentaries it seems uh the read through is I mean implication could be for broader nitration related chemistry 55:55 55 minutes, 55 seconds similar nitration related chemistries I'm just trying to understand uh how are you reading this uh developments also uh 56:02 56 minutes, 2 seconds are is our I mean our nitration product related chains very different than probably what these Chinese are 56:10 56 minutes, 10 seconds and uh the implication would be for I mean uh the impacted products would be for them. 56:16 56 minutes, 16 seconds Yeah. So our our product portfolio is significantly different compared to uh you know some of the products in which uh these accidents have happened in 56:24 56 minutes, 24 seconds China. So there is no direct linkage uh first of all. Second, in general, I think it is good that the regulatory 56:32 56 minutes, 32 seconds standards, the standards on uh safety will go up and that will that will help in general overall chemical industry 56:41 56 minutes, 41 seconds does good for the society. Uh the corollary of that is uh with increased governance with increased standards uh 56:48 56 minutes, 48 seconds it is possible that some of the smaller scale inefficient operator will be forced out of the market and but that is expected to happen over a period of time 56:57 56 minutes, 57 seconds and not sort of in a knee-jerk uh manner uh and that's what will help the overall sort of margin profile of these nitrogen 57:05 57 minutes, 5 seconds chemistries. But as I said there are multiple products which get manufactured you know using this chemistry and onetoone linking is always difficult but 57:14 57 minutes, 14 seconds broadly speaking as a industry I think we are on a right track when we say that we want to improve the standards of safety and the standards of governance on some of these hazardous chemistries. 57:25 57 minutes, 25 seconds Sure. So based on the reading uh what I understand probably if you can help me was that uh the problem was or the issue was primary related to the nitration and 57:33 57 minutes, 33 seconds related whatever they were doing uh in that particular molecule. Um so the nitrations that we do is it very different I'm just trying to understand 57:41 57 minutes, 41 seconds u say for example a chemical plant in China is doing nitration on a separate on a different molecule than the incident related molecule will they also 57:49 57 minutes, 49 seconds see a tightness or uh this will not have any implication on them so I think in general the standards go up they get applied as a as a rule 57:58 57 minutes, 58 seconds across the product portfolio right it doesn't remain restricted to a particular product it is applied at a chemistry and a reaction level and not necessarily for a particular product so 58:06 58 minutes, 6 seconds Everyone will go through increased culting. I think especially from a standpoint uh bulk of our operations now we have moved to continuous nitration 58:13 58 minutes, 13 seconds which is inherently much safer than the batch nitration and I think we have significantly enhanced our safety 58:20 58 minutes, 20 seconds practices and safety measures when we are operating you know such chemistries over the course of last now couple of decades right which is sort of visible 58:29 58 minutes, 29 seconds also in our performance from the safety dimensions and our recognition by the global bodies when it comes to safety and sustainability uh parameters. So we 58:38 58 minutes, 38 seconds feel very confident and comfortable and we also feel that the actions currently getting taken in China are are in the 58:46 58 minutes, 46 seconds interest of the industry from a long-term point of view. 58:49 58 minutes, 49 seconds Sure helps. Uh so secondly is uh on the beer um the contract the long-term contract um although um we have seen 58:57 58 minutes, 57 seconds some positive developments related to that final technical molecule in US. Um so any changes for us in terms of how we see uh and also the duties in US 59:06 59 minutes, 6 seconds probably are now lower. So um any changes that we see on this um I mean utilization of this asset now 59:13 59 minutes, 13 seconds I think as I mentioned in the last call I think sort of 50% of that asset is used to manufacture one particular intermediate that goes into denim and 59:22 59 minutes, 22 seconds there we are seeing steady volumes right now so it will definitely lead to a better utilization of that asset in the coming financial year. 59:31 59 minutes, 31 seconds Sure. Got it. And lastly um if you can speak about RM availability primary methanol and I think sulfur related u um 59:40 59 minutes, 40 seconds what's your I mean how's the availability for you? I understand price will be high but in terms of physical availability are you seeing challenges? 59:48 59 minutes, 48 seconds No in terms of physical availability we are well covered uh so far uh as far as both of these commodities that you mentioned uh it does come at a 59:57 59 minutes, 57 seconds increasingly higher cost to ensure that sort of all of our plants are fed 100% of the requirement but from a physical availability point of view we are well 1:00:06 1 hour, 6 seconds covered on both of these commodities and when you say covered uh it is for I mean duration what duration 1:00:13 1 hour, 13 seconds so you know depends on the commodity or something and all we will typically have a coverage of you know a couple of months something like uh sulfur given 1:00:21 1 hour, 21 seconds it's a domestic supply you know we will have a contract in place and we'll have a coverage a few weeks but so commodity by commodity the coverage usually change 1:00:31 1 hour, 31 seconds thank you so much and all the best thanks thank you ladies and gentlemen 1:00:40 1 hour, 40 seconds we'll take our next question from the line please go ahead 1:00:46 1 hour, 46 seconds yeah thanks for opportunity. Uh just one question on the demand side. So you mentioned in one of the remarks that uh 1:00:54 1 hour, 54 seconds the demand contraction in exports market probably for the discretionary uh portfolio can be taken care by the 1:01:02 1 hour, 1 minute, 2 seconds domestic market. So what gives us confidence that there may not be a material distortion even in the domestic 1:01:09 1 hour, 1 minute, 9 seconds market given that the pricing for the same you know non-disclary portfolio h sorry deflationary portfolio will go up in domestic market too. Thank you. 1:01:20 1 hour, 1 minute, 20 seconds That comment was specifically for dy and pigments in the context of a particular product where there is a pressure in the global demand but that is getting offset by the increase in the domestic demand. 1:01:30 1 hour, 1 minute, 30 seconds I think in general your point is right if if you know globally uh because of West Asia war if the global interest rate cycle reverses and there's a global 1:01:39 1 hour, 1 minute, 39 seconds inflationary scenario which links to potential downward trend on the global GDP then of course it will have impact on the discretionary spend not only in 1:01:47 1 hour, 1 minute, 47 seconds the global market but also in markets but that's a scenario which we continue to monitor and sort of mitigate um at 1:01:54 1 hour, 1 minute, 54 seconds this point in time uh difficult to comment but but it is a potential risk in case you uh we start seeing impact of 1:02:01 1 hour, 2 minutes, 1 second the global GDP level including India right just one number related question what would be the gross block by the end 1:02:09 1 hour, 2 minutes, 9 seconds of FI27 when the entire zone 4 will be commissioned 1:02:17 1 hour, 2 minutes, 17 seconds uh end of FI27 we should be in the range of around 9 and a half thousand of crores and stuff 9 and a half th000 to 1:02:24 1 hour, 2 minutes, 24 seconds 10,000 we don't exact numbers but uh around that range Sure. That's excellent. Thanks a lot and all the best. 1:02:33 1 hour, 2 minutes, 33 seconds Thank you. Next question is from the line from Philip Capital. Please go ahead. 1:02:40 1 hour, 2 minutes, 40 seconds Yeah, thanks for this opportunity. So just uh clarifications of what you have commented already when you said that raw 1:02:47 1 hour, 2 minutes, 47 seconds material security is it fair to believe that for the June quarter at least there is a 100% kind of raw material supply 1:02:55 1 hour, 2 minutes, 55 seconds security that has been insured. Is that right understanding or given the way the situation changes here 1:03:04 1 hour, 3 minutes, 4 seconds on a every week basis I think uh affirming anything uh for next two months is like uh um anyway let me not 1:03:13 1 hour, 3 minutes, 13 seconds go there broadly I think we are well covered based on our current planning today of course we can't predict you know hypothetical scenarios two weeks 1:03:20 1 hour, 3 minutes, 20 seconds down the line 3 weeks down the line as of now based on our current contracts in place we feel we are welcome Okay. Uh second clarification about the 1:03:30 1 hour, 3 minutes, 30 seconds freights. Uh this this generally the spike in the other expenses quarter on quarter basis what we see the as you 1:03:39 1 hour, 3 minutes, 39 seconds mentioned that that is large portion of that is due to freight but uh looking at freight share uh kind of 78% of the 1:03:46 1 hour, 3 minutes, 46 seconds total. So even with that getting double so the number is slightly higher. So and 1:03:54 1 hour, 3 minutes, 54 seconds the second related aspect what I want to understand whether this elevated freight is still June quarter end or it is or it 1:04:02 1 hour, 4 minutes, 2 seconds can be very short-term phenomena also there are three elements to freight sura there is rate uh which is which is a 1:04:10 1 hour, 4 minutes, 10 seconds unit rate the second is the volume and third is the destination right and all three were adverse in the last quarter 1:04:18 1 hour, 4 minutes, 18 seconds rate because of west Asia war related issues I think the freight rates went volume because we put substantially 1:04:25 1 hour, 4 minutes, 25 seconds higher exports right 57% of his exports and the third is the destination mix because we pushed out lot of material to 1:04:32 1 hour, 4 minutes, 32 seconds US which is the longest wage time and have significantly higher rates compared to let's say markets like middle east 1:04:39 1 hour, 4 minutes, 39 seconds where you know the absolute quantity of freight also goes down significantly compared to US a combination of these three things and that's where you see 1:04:47 1 hour, 4 minutes, 47 seconds significantly higher okay just last one point sir uh while you are kind of a bit cautious uh given 1:04:56 1 hour, 4 minutes, 56 seconds the short-term situation that is visible but you are also very confident about the uh the potential for SI27 in terms 1:05:05 1 hour, 5 minutes, 5 seconds of growth and all that looking at strong order book visibility or positioning so and also the new project contributions. 1:05:14 1 hour, 5 minutes, 14 seconds So if you can elaborate a bit where from that you are seeing the strong order visibility and uh if you also can give 1:05:22 1 hour, 5 minutes, 22 seconds some sense about the upcoming project whether it could be the JV with the the superform JV or the plastic recyclability 1:05:31 1 hour, 5 minutes, 31 seconds how meaningful those two projects which is coming this year in terms of number contribution for AI. 1:05:39 1 hour, 5 minutes, 39 seconds Yeah. So [clears throat] I think the midterm to long-term confidence comes from the fact that what we have been able to deliver on volume growth in the last 18 month time frame, 1:05:47 1 hour, 5 minutes, 47 seconds right? Which is shown that you know if we operate with agility in the market, we are able to get the market share and we are able to push a utilization of our 1:05:55 1 hour, 5 minutes, 55 seconds assets. Uh and it is also kind of reaffirms our cost competitiveness when it comes to getting the required share 1:06:03 1 hour, 6 minutes, 3 seconds of wallet from our customers. Um so if if we sort of disassociate ourselves from the near-term headwinds of West 1:06:10 1 hour, 6 minutes, 10 seconds Asia war, I think we need to long-term the ability to run the asset to their full potential and getting the required 1:06:19 1 hour, 6 minutes, 19 seconds share of volume from the global market and that confidence level is there and that's what is reflected in sort of our mid to uh long-term guidance. Um and as 1:06:29 1 hour, 6 minutes, 29 seconds the cycle turns as we have seen in some of the chains if you're operating at a higher volume base then the recovery 1:06:36 1 hour, 6 minutes, 36 seconds margin supports you in a incremental way because the margin gain that you get is on a significantly higher volume 1:06:43 1 hour, 6 minutes, 43 seconds compared to your old baseline right so that's the broad this is for the mid to long uh term from a JV point of view we 1:06:51 1 hour, 6 minutes, 51 seconds expect uh a to uh commission you know within uh hopefully June July kind of time frame which is the JB with super 1:06:59 1 hour, 6 minutes, 59 seconds form uh and that should actually ramp up CO utilization level within the current financial year. So that will start 1:07:07 1 hour, 7 minutes, 7 seconds contributing uh meaningfully. Um I think the recycling J is expected to commission within this calendar year. I 1:07:14 1 hour, 7 minutes, 14 seconds think it may not contribute meaningfully in terms of numbers as of now given it's a first of its kind plant and there will be a time frame to establish that 1:07:22 1 hour, 7 minutes, 22 seconds technology uh as such but nonetheless I think the proof of that technology will be established within the current financial 1:07:31 1 hour, 7 minutes, 31 seconds sure sir yeah uh yeah thank you for all the and congress 1:07:38 1 hour, 7 minutes, 38 seconds next question is from the line of Kumar Somia from ambit capital please go ahead Hi sir good afternoon. Uh so just couple 1:07:46 1 hour, 7 minutes, 46 seconds of question from my side on the backward integration capex that you have announced for one contract. So I if I remember right that was a fixed margin 1:07:54 1 hour, 7 minutes, 54 seconds contract. So how does this backward integration help in that contract? 1:07:59 1 hour, 7 minutes, 59 seconds It's a additional fixed margin that we will get for the remaining period of 15 years. 1:08:05 1 hour, 8 minutes, 5 seconds Okay. Okay. And in the second contract that you said uh this is the revenue potential over the next three years that 1:08:12 1 hour, 8 minutes, 12 seconds is 27 28 29 and 30 right? Yeah. Four years. Yeah. 4 years. Yeah. Okay. Okay. 1:08:19 1 hour, 8 minutes, 19 seconds And and secondly sir on this uh origin uh JV that you said so profile that you 1:08:27 1 hour, 8 minutes, 27 seconds are planning what is the margin that we should expect in this business? 1:08:31 1 hour, 8 minutes, 31 seconds Sorry your voice is muffled. Can you repeat the question? 1:08:35 1 hour, 8 minutes, 35 seconds Yes sir. So in the origin JV what should the margin that we should work with in considering how the ramp up will be and 1:08:43 1 hour, 8 minutes, 43 seconds what is the contribution that we should expect. 1:08:46 1 hour, 8 minutes, 46 seconds I think u I mean obviously uh maybe the right question to be asked to the JV management team as such but but in 1:08:53 1 hour, 8 minutes, 53 seconds general our philosophy is that JV should operate at a slightly better margin profile compared to where where AI is 1:09:00 1 hour, 9 minutes operating uh at this stage. um from a just to be sort of doubly clear though we will start presenting uh you know 1:09:09 1 hour, 9 minutes, 9 seconds ABDA from that JV as and when the number starts becoming relevant but from a consolidation point of view given it's a 1:09:15 1 hour, 9 minutes, 15 seconds 50/50 JV it will not consolidate into AI we will most likely report the numbers on a separate basis but from an accounting standard point of view that 1:09:24 1 hour, 9 minutes, 24 seconds number might not consolidate into AI at any time got it got so it will come at a separate line I think 1:09:33 1 hour, 9 minutes, 33 seconds Thank you. Thank you sir. That will be all. 1:09:36 1 hour, 9 minutes, 36 seconds Thank you. Next question is from the line of N Awal from Dam Capital. Please go ahead. 1:09:42 1 hour, 9 minutes, 42 seconds Nice. Thanks taking a question. So on the you know the few contracts that you announced this year and in the last call also you may alluded to the point that 1:09:50 1 hour, 9 minutes, 50 seconds you're looking to probably you know I think probably stepping up activities around partnerships and JV's uh you know the conversations are going up. So yeah, 1:09:58 1 hour, 9 minutes, 58 seconds I just want to check with all of that is truly going on in West Asia, has has the has there been a loss of momentum in some of those conversations or they are 1:10:05 1 hour, 10 minutes, 5 seconds going on as they you know as they were even prior to the conflict? 1:10:10 1 hour, 10 minutes, 10 seconds No, I think there is no loss on momentum. I think it does continue. Of course from a bandwidth point of view, management bandwidth point of view, 1:10:17 1 hour, 10 minutes, 17 seconds sometimes uh you know the crisis management takes precisions uh over some of these activities but I think we've created good enough structures within 1:10:25 1 hour, 10 minutes, 25 seconds the organizations to ensure that the momentum is not lost. So um I would say that on overall level uh we we don't see 1:10:32 1 hour, 10 minutes, 32 seconds momentum falling. Uh in fact uh we see momentum increasing because people are increasingly looking at more robust 1:10:41 1 hour, 10 minutes, 41 seconds supply chains, more secure supply chain for their global requirements going forward and uh we expect you know many 1:10:48 1 hour, 10 minutes, 48 seconds such conversations to proceed and conclude uh in the coming financial year as well. 1:10:55 1 hour, 10 minutes, 55 seconds And what is the nature of you know qualitatively these kind of arrangements that we are exploring with people? what is the motivation for them to tie up with something like RP? 1:11:04 1 hour, 11 minutes, 4 seconds So I think that again it's a long conversation but I think uh in in one line I think it's uh our ability to 1:11:11 1 hour, 11 minutes, 11 seconds deliver uh you know extremely reliable and safe safe operations in complicated chemistries in the most competitive manner right that's the value 1:11:19 1 hour, 11 minutes, 19 seconds proposition that we offer and I think the heartening thing to see in the last quarter was the repeat long-term 1:11:27 1 hour, 11 minutes, 27 seconds contract from the global major right I think it is one thing to get a long-term contract but in the major comes back to 1:11:34 1 hour, 11 minutes, 34 seconds you with a repeat long-term contract that also gives you a significant validation of the value proposition that you're putting up in this partnership 1:11:43 1 hour, 11 minutes, 43 seconds and that was very heartening to see. um uh the nature of the contract will keep varying right some of these are fixed margin contracts some of these are pure 1:11:50 1 hour, 11 minutes, 50 seconds buy and sell link to index prices kind of contracts so I think every partnership looks different from a commercial arrangement standpoint but 1:11:57 1 hour, 11 minutes, 57 seconds nonetheless it it does uh build in the it improves the quality of the portfolio uh going forward and brings certain 1:12:06 1 hour, 12 minutes, 6 seconds amount of earning visibility and just to push that point here is it fair to assume that you know when you look through the next couple of years or 1:12:14 1 hour, 12 minutes, 14 seconds or for such kind of incremental partnerships or JB that we will do will will contribute begin to contribute much more meaningfully to our business as we 1:12:22 1 hour, 12 minutes, 22 seconds go forward and overall helping the earnings quality that's the intention as well and last thing you know you know when you look at the you know the disruption 1:12:30 1 hour, 12 minutes, 30 seconds with whatever is happening for now with the vacation war uh I mean at what point does it become a challenge for us I mean till till you know if there's a 1:12:38 1 hour, 12 minutes, 38 seconds particular scenario scenario by which it derails probably you know our trajectory and and till what time it isn't really it's only a temporary hiccup for us. I 1:12:46 1 hour, 12 minutes, 46 seconds mean is there a way to it? I I don't know how do you so for us it's a challenge today right I think it's not 1:12:53 1 hour, 12 minutes, 53 seconds easy to handle uh you know more than 60% increase in raw material pricing in a two week time frame it's not easy when 1:13:00 1 hour, 13 minutes you know uh 10% of your revenue which is going to a market suddenly shuts right so I think it's a challenge even 1:13:07 1 hour, 13 minutes, 7 seconds today uh and I think as I said the only way you can manage it is sort of be proactive be agile in terms of all the action that you can take uh to minimize 1:13:16 1 hour, 13 minutes, 16 seconds the impact of such disturbances So, so I would say the situation is um a serious enough where it is a challenge 1:13:25 1 hour, 13 minutes, 25 seconds today, but at the same time I think they're putting in lot of efforts and actions to mitigate the impact to the best extent possible. 1:13:33 1 hour, 13 minutes, 33 seconds Thank you so much. 1:13:36 1 hour, 13 minutes, 36 seconds Thank you ladies and gentlemen. That was the last question for today. I now hand the conference over to management for closing comments. Over to you. 1:13:44 1 hour, 13 minutes, 44 seconds Thank you. Uh thank you all. We appreciate your ongoing support and participation in today's call. I think despite the prevailing near-term headway 1:13:53 1 hour, 13 minutes, 53 seconds linked to the Asia award, uh our disciplined approach allows us to manage to this phase effectively. We remain committed to our growth trait and look 1:14:01 1 hour, 14 minutes, 1 second forward to engaging with you again. Uh please feel free to connect with us for any followup queries. Thank you once again. Have a good day. 1:14:08 1 hour, 14 minutes, 8 seconds Thank you. On behalf of RP Industries Limited, that concludes this conference. 1:14:13 1 hour, 14 minutes, 13 seconds Thank you for joining us without your life.