Epigral Limited — Q3 FY26

Epigral Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=2n6m3WXHmaw Published: 3 months ago

0:00 Ladies and gentlemen, good day and welcome to Epigral Limited's conference call hosted by MK Global Financial Services Limited. 0:10 10 seconds As a reminder, all participant clients will be in the listenon mode and there will be an opportunity for you to ask questions after the presentation 0:17 17 seconds concludes. Should you need assistance during the conference call, please signal an operator by pressing star then 0:25 25 seconds zero on your touchtone phone. Please note that this conference is being recorded and the conference Samitura 0:33 33 seconds from MK Global Financial Services Limited. Thank you and over to you sir. 0:39 39 seconds Thank you. Good evening everyone. Thank you for joining us on Epigel Limited's Q3 FI26 results conference call. We 0:47 47 seconds would like to thank the management for giving us this opportunity to host them. 0:50 50 seconds On this call we are joined with Epigel's management represented by Mr. Mr. Malik Patil, chairman and managing director, Mr. Koshal Superkar, executive director, 0:59 59 seconds Mr. Rakkesh A Shagarwa, Chief Financial Officer, and Mr. Marin Kotcha, Investor relations. I would like to invite Mr. 1:06 1 minute, 6 seconds Malik Patil to initiate the proceedings with his opening remarks post which we will have an interactive Q&A session. Thank you and over to you sir. 1:15 1 minute, 15 seconds Thank you. Good evening everyone. 1:17 1 minute, 17 seconds Welcome to the call to discuss epic quarter 3 file 26 performance. I believe you had an opportunity to view the earning presentation that was released 1:25 1 minute, 25 seconds earlier today. The chemical market currently exhibits mixed performance with some segments achieving robust growth while others grapple with slower 1:34 1 minute, 34 seconds recovery due to an prolonged monsoon and persistent geopolitical uncertainty. Few segments in particular drove weak 1:42 1 minute, 42 seconds quarter on quarter performance despite yearon-year gains from the low waves amid challenges like muted exports 1:50 1 minute, 50 seconds stalled US India trade progress low realizations utilizations and tariff impacts. 1:57 1 minute, 57 seconds Nevertheless, out outlook indicates improved performance in coming quarters supported by strengthening demand fundamentals and gradual recovery across the key sectors. 2:08 2 minutes, 8 seconds In quarter 3 FY26, revenues grew marginally by 2% sequentially through volume remain largely flat versus the 2:17 2 minutes, 17 seconds prior quarter. The derivatives and the speciality business contributed 52% of the revenue up from 50% last quarter. 2:26 2 minutes, 26 seconds The first half of quarter 3 FY26 faced heat wins from the prolonged monsoon pestic season disruptions and plant 2:34 2 minutes, 34 seconds maintenance but volume picked up strongly from mid November onward. We expect this positive momentum to persist in future quarters. 2:44 2 minutes, 44 seconds Evida margins contracted to 17% in quarter 3 FY26 pressured by lower realizations rising raw material cost 2:53 2 minutes, 53 seconds and higher cost inventory however over 9 months FI26 we sustained 3:00 3 minutes margins at 22% with the monsoon now over and plant maintenance complete demand is recovering we have seen volume pick up 3:08 3 minutes, 8 seconds since mid November and expect sustained growth ahead as utilization improves overall performance should strengthen further. 3:17 3 minutes, 17 seconds Our capex projects to double capacity at the CPVC epic chloro hydrine and wind solar hybrid power plants are 3:25 3 minutes, 25 seconds progressing on schedule and remain on track for commissioning within the announced timeline and budget. 3:32 3 minutes, 32 seconds This will support diversification targeting 70% revenue contribution from the derivatives and speciality business 3:39 3 minutes, 39 seconds as we have committed combined with the chloroin value chain commission in March 2025. 3:45 3 minutes, 45 seconds The position us for a strong growth from FY27 onwards for our new projects. We are finalizing 3:52 3 minutes, 52 seconds capex plans expect to announce details in the coming months. These initiatives will enhance our integrated complex and 4:01 4 minutes, 1 second extend the value chain. They are set to drive significant growth from FY29 onwards. 4:08 4 minutes, 8 seconds In line with this plan, the team remains focused on scalable profitable growth, strengthening our integration and driving value for all stakeholders. 4:19 4 minutes, 19 seconds We are advancing with clarity on milestone capital efficiency and discipline execution to deliver 4:27 4 minutes, 27 seconds sustainable growth as we expand capacity and capabilities. I now hand over to the call to Mr. 4:33 4 minutes, 33 seconds Rakkesh Agraal who will take us through the financials. 4:42 4 minutes, 42 seconds Thank you Molly. Let me take through Q3 numbers. Overall plant iteration stood at 78% similar to previous quarter and 4:50 4 minutes, 50 seconds 81% in the corresponding previous year. 4:56 4 minutes, 56 seconds Quarter on quarter we witnessed volume growth but as product mix improved resulting to 5:03 5 minutes, 3 seconds revenue increase of 2% to rupees 6003 cr. Revenue contribution for very and speciality business stood at 52% versus 50% in the previous quarter. 5:14 5 minutes, 14 seconds dropped by 22 to 103 crores as relation for the few products dropped. There were increase in raw material prices and high 5:22 5 minutes, 22 seconds inventory cost. P is stewed at 39 crores versus 51 cr in previous quarter. It includes one time expense related to say 5:30 5 minutes, 30 seconds change 10 labor labor code and for Q9 of 26 planeration issued at 76% versus 5:39 5 minutes, 39 seconds 82% in the corresponding period resulting in drop in revenue by 7% to rupees 1807 crita is at rupees 398 cr 5:48 5 minutes, 48 seconds with margin is at 22% versus 28% in the corresponding period of previous year. 5:53 5 minutes, 53 seconds This dip in margin was on account of drop in realization and increase in roal cost. This concerned the crude dollar in 6:00 6 minutes value chain plan in March 2025 and it is expected to contribute sizable to profit 6:07 6 minutes, 7 seconds and loss account from financial year 2027 onwards. Once the plant starts generating sizable revenue overall 6:14 6 minutes, 14 seconds profitability should improve ROC stood at 70% as on 31st December 25. If we exclude capital working progress then 6:22 6 minutes, 22 seconds our ROC stand at 20% as on 31st December 25. Net depth prehibit stood at 1x as on 6:31 6 minutes, 31 seconds 31st December versus8x as on 31st December 24 and hence we are in very comfortable positions over 6:38 6 minutes, 38 seconds there. Our net depth stood at 557 cr versus 531 cr as on 31st December 24th and during the year we spent capex of 6:47 6 minutes, 47 seconds rupes 337 cr and our capex plans are moving as per schedule. We witnessed utilization level improve from mid of 6:54 6 minutes, 54 seconds November and we expect that momentum to continue in coming quarters as well. 6:58 6 minutes, 58 seconds Hence we expect overall performance to improve from here on. With this we can now open the floor for questions. 7:08 7 minutes, 8 seconds Thank you very much. 7:12 7 minutes, 12 seconds We will now begin the question and answer session. Anyone who wishes to ask a question may press star N1 on their 7:19 7 minutes, 19 seconds touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants 7:26 7 minutes, 26 seconds are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. 7:52 7 minutes, 52 seconds The first question is from the line of Deep J Sanjetti from Mana Finance. Please go ahead. 8:00 8 minutes Hi, am I audible? Uh yes, you're audible. 8:04 8 minutes, 4 seconds Okay. Uh now we are expanding the CPVC almost doubling the capacity of CPVC but Reliance and Adani are coming up with 8:12 8 minutes, 12 seconds huge capacities by FI to uh 28. What is your view on this? Will it put a margin I mean will it put a pricing pressure and realization pressure? 8:27 8 minutes, 27 seconds So uh uh what's the name manipesh you know Reliance I think they are 8:35 8 minutes, 35 seconds coming up with a small capacity right now I think around 11 KTA that's what I know uh right now which is they are 8:42 8 minutes, 42 seconds going to commission in this year uh and uh Adani has not announced yet that's what we know in terms of the CPVC 8:51 8 minutes, 51 seconds definitely they are coming with a big capacity of PVC plant both the players in a big way but the CPVC capacity is 8:59 8 minutes, 59 seconds not coming with the big capacity that's what we hear so far from the market and what they have announced so far in the market yeah 9:09 9 minutes, 9 seconds okay so I mean but in case I mean you don't so you don't see any pressure right now there is no pressure on the CPVC prices 9:16 9 minutes, 16 seconds no CPVC prices the pressure is there it is because of uh the PVC prices has gone down substantially in last 4 months 5 9:26 9 minutes, 26 seconds months uh it is bottom out. Now everyone knows that the PVC prices has started going up. So we see the prices are going to improve from this quarter onwards. 9:38 9 minutes, 38 seconds Okay. you mentioned that there was a temporary pressure or sorry 9:46 9 minutes, 46 seconds so no I believe it is a temporary but for particularly if you're talking about the quarter three because this kind of situation was never seen in terms of the 9:54 9 minutes, 54 seconds PBC pressure in terms of the pricing of the raw material and the CPVC also same time and now the prices of PBC is improving so we see the improvement in 10:02 10 minutes, 2 seconds the CPVC pricing going forward okay so you you mentioned that there is the temporary pressure of uh software 10:10 10 minutes, 10 seconds realization on select products. Can you mention which products are these and uh why these temporary pressures has come 10:17 10 minutes, 17 seconds in and how much of the how much time would it take for this temporary pressure to go away? 10:24 10 minutes, 24 seconds So uh if I consider the overall chemical industries uh you know the pressure was there in last I think 9 months uh the 10:34 10 minutes, 34 seconds pressure was there because of the global situation is not doing great and and from uh I believe from this quarter 10:41 10 minutes, 41 seconds onwards we see very positive signs in terms of the prices are now started moving up upwards majority majority of the chemicals not only the products 10:50 10 minutes, 50 seconds which we are manufacturing but I see The demand has also started picking up as quarter 3 and quarter four. Normally it is on the hard side for us uh in terms 10:59 10 minutes, 59 seconds of the consumption pattern but also the prices are also moving started moving upwards globally uh mainly you know and 11:07 11 minutes, 7 seconds then the the one of the major factor is China has announced 250 products they have withdraw the rebate of the product. 11:14 11 minutes, 14 seconds So I think globally and other petrochemical product are also going up. 11:19 11 minutes, 19 seconds So all commodity price are going up. So all chemical price also started moving slowly going up from this quarter 11:27 11 minutes, 27 seconds onwards. But the last quarter we believe that it is it was the bottom out situation for majority find majority of the chemical manufacturing products. 11:41 11 minutes, 41 seconds So you don't see any pressure coming uh by I mean by FI27 uh you think all the pressures will uh 11:49 11 minutes, 49 seconds vanish on all the all the products or do you see any uh I mean any pressure 11:56 11 minutes, 56 seconds coming on some other products still I would say uh for the next financial year from this quarter onwards uh the 12:04 12 minutes, 4 seconds situation will be better compared to the last 9 months uh That's what we see from going forward in terms of demand also in 12:12 12 minutes, 12 seconds terms of the pricing also uh that's what we can see but individual product to product it may differ the timeline but 12:20 12 minutes, 20 seconds definitely compared to last 6 months everything will on the improve it it is going to be on the positive side you 12:27 12 minutes, 27 seconds know great great thank you so 12:39 12 minutes, 39 seconds Thank you. The next question is from the line of Rohit Shanhan from Suni Securities. Please go ahead. 12:47 12 minutes, 47 seconds Yeah. Uh thank you for taking a question. Uh so uh first of all uh just wanted to know what what was the ECU for uh last quarter and this quarter. 13:00 13 minutes The ECU for this quarter is around 29,000 30,000 and it has been almost similar to last quarter marginally 500 2,000 rupees down. 13:11 13 minutes, 11 seconds Okay. So post December have we seen any uh correction in ECU or it is still remain in that similar range? 13:20 13 minutes, 20 seconds It is in the same range and I guess uh it will be around 30 31,000 kind of a thing in the coming months as well looks like. 13:29 13 minutes, 29 seconds Okay. some some bit of improvement is there. Got it. Uh uh [clears throat] secondly on the chlorotoloin side as uh 13:37 13 minutes, 37 seconds we have commissioned in uh last year March uh now uh at uh till now what kind 13:46 13 minutes, 46 seconds of utilization we have reached and as uh although we already have indicated that FI27 would be the year where we will see 13:55 13 minutes, 55 seconds uh uh meaningful contribution but still just wanted to know how we are progressing in that uh in terms of uh utilization levels. 14:05 14 minutes, 5 seconds uh so in chloro if you see the volumes are increasing uh like on month on month as well as quarter on quarter but again 14:12 14 minutes, 12 seconds it's it is not uh reached a sizable number to give any kind of percentage of utilization maybe once the next quarter 14:20 14 minutes, 20 seconds that is from Q1 we are expecting it to contribute in a sizable way so at that point of time we might be able to share some sort of number but nothing as of 14:28 14 minutes, 28 seconds now but it is improving on a month-on-month and quarteron quarter basis So in terms of volume we are not able to achieve but in terms of approvals of the 14:36 14 minutes, 36 seconds customers we have achieved quite a bit and quite number of products we got approval from the end users and they 14:44 14 minutes, 44 seconds have started using it and I think we are going to get advantage in terms of the China is also going to reduce the uh 14:52 14 minutes, 52 seconds export benefit. So I think this will have a positive impact on this line of products also going forward and also the 14:59 14 minutes, 59 seconds currency situation is also changing in China. China's currency is appreciating and Indian currency is appreciating. So that has also an impact of the local 15:08 15 minutes, 8 seconds manufacturing going forward in this kind of products. 15:13 15 minutes, 13 seconds Fair enough. Fair enough. uh and uh in in chloroline I mean uh as of now since we are gradually progressing so these 15:22 15 minutes, 22 seconds these whatever volumes are going these are more or less uh kind of samples only or we have start uh delivering uh some 15:31 15 minutes, 31 seconds orders for the customers or just uh I mean sample kind of things only 15:39 15 minutes, 39 seconds no it is not a sample it is actual delivery on a full truckload basis but the people change the volume uh and once 15:47 15 minutes, 47 seconds they started using slowly and gradually they will transfer the order to the domestic players. So overnight they 15:54 15 minutes, 54 seconds don't stop supply from where their supply chain sources are there. So that confidence will take time that's why it is getting delayed but it's not about 16:02 16 minutes, 2 seconds the sampling it's actual delivery product. 16:06 16 minutes, 6 seconds Got it. Got it. and and these orders would be what uh short-term orders or would be uh 6 month one year kind of uh contract with the customers. 16:18 16 minutes, 18 seconds So currently till the as as I as me has mentioned actual substantial number will start from the FY27 onward. So we are 16:26 16 minutes, 26 seconds expecting the major orders will start coming and major timeline with the timeline and with the long-term contract also in terms of volume will start 16:34 16 minutes, 34 seconds coming from the FY27 onwards. So far they are testing and trying and the confidence once they get it then only 16:42 16 minutes, 42 seconds they will place long-term. So right now everything is on the quarterly basis only. Yeah. 16:48 16 minutes, 48 seconds Oh and one last question on uh ECH side. 16:52 16 minutes, 52 seconds I mean uh I mean earlier uh we were seeing price increase because of rising 16:59 16 minutes, 59 seconds glycerin prices. uh so how uh uh I mean the pricing has been there for ECH and u 17:08 17 minutes, 8 seconds uh ECH also has I think a significant uh export [clears throat] contribution uh how that has been uh affected or uh uh worked out in this quarter. 17:24 17 minutes, 24 seconds So ECH yes you are right because of the glycerine price is going up the ECH value is also going up because 65% of 17:33 17 minutes, 33 seconds the world demand is converted to the glycerine based EC globally. So yes uh 17:40 17 minutes, 40 seconds globally the ECS price has gone up uh and uh you know the Trump is not supporting the 17:47 17 minutes, 47 seconds biodeiesel uh project and the glycerin is a byproduct of biodeiesel. So you know the glycerin price is going to 17:55 17 minutes, 55 seconds remain high till the biodeiesel are not getting supported by the global leaders. 18:03 18 minutes, 3 seconds So we tend to believe I mean in the current quarter and also coming this is kind of a uh new normal which will continue. 18:12 18 minutes, 12 seconds Okay. Okay. And and uh any uh export revenue got impacted or still we are 18:20 18 minutes, 20 seconds doing similar kind of uh export uh volumes because of this US uh tariff angle or anything. 18:28 18 minutes, 28 seconds US was not a major uh for us for the epic chloro particularly uh the export overall 18:37 18 minutes, 37 seconds volume is remain almost same as last quarter in terms of volume for the overall products but yeah European 18:44 18 minutes, 44 seconds volume has affected last quarter but I think it is coming online right now because some of the manufacturers of epic chloroin has decided to close their 18:53 18 minutes, 53 seconds permanent plant because of the current situation is very tight in Europe So that advantage may come in the coming 19:00 19 minutes years probably to the Indian manufacturers. 19:06 19 minutes, 6 seconds Okay. Okay. That's it from myself. Thank you. Thank you. 19:15 19 minutes, 15 seconds Thank you. The next question is from the line of Profane from Ageless Capital and Finance. Please go ahead. 19:23 19 minutes, 23 seconds Uh good evening. Thank you for taking my question. Uh just a couple of questions first on CPVCA and on the similar lines 19:30 19 minutes, 30 seconds for ECH as well. Uh even though now we uh like you said the prices have bottomed out and you know they're slowly 19:37 19 minutes, 37 seconds going up but uh the over capacity that has been persistent and that has been there with our competitors also 19:45 19 minutes, 45 seconds increasing capacity with our customers backward integrating into the making of EC or CPVC. So in that sense how you uh 19:54 19 minutes, 54 seconds you know how you viewing the scenario because we are essentially doubling our capacity in both of these segments. So will we be suffering from over capacity? 20:02 20 minutes, 2 seconds What kind of capacity utilizations can we expect on the uh enhanced capacity? 20:10 20 minutes, 10 seconds Yeah. So see when I mean again whenever we put any plant either it's for ETH or CPVC our perspective is considering the 20:18 20 minutes, 18 seconds demand growth that is expected to come in next 5 to 7 years. So considering current situation the the demand is also 20:26 20 minutes, 26 seconds growing into ECH and CPVC. So uh we don't see a much of a kind of a pressure but yes it can happen that when we commission our plant which we are 20:35 20 minutes, 35 seconds expected to do in kind of a September 26. So maybe for initial 6 months or a year's time we have to run our plant at 20:43 20 minutes, 43 seconds lower utilizations but eventually considering the growth which is expected into the epoxy which will lead to growth in ECH and in terms of real estate which 20:51 20 minutes, 51 seconds will drive the growth in CPVC we tend to believe that you know maybe matter of one or two years we should be able to run our plant at optimum utilization 20:59 20 minutes, 59 seconds levels even after considering the new capacities which are coming because growth in India is there which will definitely absorb the capacities that 21:07 21 minutes, 7 seconds are coming. So whoever or including us if we are putting a plant we have thought of the growth that is going to come in terms of demand but yes it can 21:15 21 minutes, 15 seconds be like one year here and there and in that particular year we might have to run our plant at a lower utilization so we live with that but it's not going to 21:23 21 minutes, 23 seconds happen that that's going to be there for like four five years it's a matter of one or two year. 21:28 21 minutes, 28 seconds What uh but can you you know uh like not to quote you on it but can you just give me a brief range that we can expect with 21:37 21 minutes, 37 seconds respect to our capacity utilization for both these segments for FI27 or 28 whatever 21:44 21 minutes, 44 seconds you know it is very difficult to predict because in the chemical plants people announce the date of commissioning but 21:52 21 minutes, 52 seconds normally it is not happening on time and once they start the plant the teething problems and everything how much time 22:00 22 minutes they are able to resolve and how much time they are able to commission their capacity that is also timing we cannot 22:07 22 minutes, 7 seconds predict. So based on that it's keep changing. If you noticed the past announcements and past records every 22:15 22 minutes, 15 seconds chemical company has announced uh this timings are not able to match and based on that I think it is difficult to 22:22 22 minutes, 22 seconds predict exact when it is going to happen and why it is going to happen. Yeah, normal this situation will come going forward. 22:30 22 minutes, 30 seconds But as a management what we anticipate is that like what happened in FI26 of the last 9 months or 6 months that was 22:38 22 minutes, 38 seconds because of the prolonged monsoon and also the early monsoon and also the demand was bit subdued but now it looks 22:46 22 minutes, 46 seconds the demand has been picked up. So it looks like that the coming quarters or the coming months will be much better compared to what it was last 6 months or 9 months. 22:57 22 minutes, 57 seconds Got it. Unders. But not even like a base case so that we can understand like will we be utilizing 75,000 tons of the 1 23:05 23 minutes, 5 seconds lakh 50 of CPVC. Just just a random number just a base case scenario that the management might have thought of. 23:12 23 minutes, 12 seconds So uh probably our budget exercise we are going to start probably from this month onward. So probably it will 23:20 23 minutes, 20 seconds cleared probably by March it will be cleared more about the next year. Yeah. 23:25 23 minutes, 25 seconds Understood. And just to understand on uh you know Astral doing their own CPVC is 23:32 23 minutes, 32 seconds it how how difficult is it to set up a plant of CPVC? How capital intensive is it? Can the other CPVC pipe guys like 23:41 23 minutes, 41 seconds Supreme Prince also uh do this which may you know cause us more harm? 23:50 23 minutes, 50 seconds See that is difficult to comment while others might will do it you know uh uh definitely it is a difficult and it is a 24:00 24 minutes different compared to compared to the pipe manufacturing facilities and the mindset this is a B2B kind of 24:07 24 minutes, 7 seconds mindset and that is B2C so I don't know how people are thinking and how they will uh commission this plant but yeah 24:16 24 minutes, 16 seconds uh so every every plant has No definitely they will once they announce I think they will do it but how 24:23 24 minutes, 23 seconds much time it will take and when they are going to commission it's a it's a question mark because every new manufacturing has a has a as a learning 24:31 24 minutes, 31 seconds phase so how much time they are able to resolve the problems and commission the successfully and reach to optim optimization level the time will tell 24:40 24 minutes, 40 seconds yeah but yeah as you rightly said everyone can think of it if aar can think of it but normally uh normally 24:48 24 minutes, 48 seconds people wanted to focus on the B2C part of the business rather than going into the B2B business who are already focusing the customers B2C kind of 24:56 24 minutes, 56 seconds business. Normally they don't think like the like the five people even you know except you know like they don't have the PVC manufacturing 25:04 25 minutes, 4 seconds facility understood on okay I got it on the CPC side just one last question on the ECS 25:12 25 minutes, 12 seconds side will we ever consider forward forward integrating into epoxy? 25:17 25 minutes, 17 seconds As of now we have no plan uh to going into the power integration because we find it ECS has enough demand going 25:24 25 minutes, 24 seconds forward and uh the growth will come uh from the the capacity expansion which is happening recently in the epoxy 25:33 25 minutes, 33 seconds business. So as of now we are not taking anything on the epoxy side. 25:40 25 minutes, 40 seconds Got it. Got it. Thank you so much for taking my questions. All the best. Thank you. 25:47 25 minutes, 47 seconds Thank you. The next question is from the line of Nepon Sharma from VLS Finance. Please go ahead. 25:56 25 minutes, 56 seconds Good evening everyone. So I wanted to uh you know know the bifurcation for the revenue for this quarter uh in terms of 26:04 26 minutes, 4 seconds uh you know volume sold as well as the realization for the products. So did the volumes go up for this quarter as 26:11 26 minutes, 11 seconds compared to you know last year's quarter or even the previous quarter and what about the average uh revenue for each products? Can you comment about that? 26:20 26 minutes, 20 seconds So see in terms of the overall volume uh compared to last quarter it has been almost kind of a flat or marginal kind of a growth. Uh but in terms of product 26:30 26 minutes, 30 seconds wise revenue is not something that we share. So I won't be able to share any data on that. 26:36 26 minutes, 36 seconds Okay. Okay. uh because uh last quarter it was CPVC costic soda and I believe hydrogen peroxide whose uh realizations 26:44 26 minutes, 44 seconds were low. So uh what what is the situation right now for them? 26:48 26 minutes, 48 seconds So it has been in the same kind of a range nothing I mean maybe 1,000 here and there but not a major movement in terms of the realization. 26:58 26 minutes, 58 seconds Okay. Okay. And uh talking about hydrogen peroxide uh the realization last quarter was low because I believe I might be wrong. Uh there were several 27:07 27 minutes, 7 seconds imports from Bangladesh. So what is the current scenario? Can you uh comment upon that? 27:14 27 minutes, 14 seconds It has been the same situation. See the import is coming from there and we are also selling in India and again there is a good demand for that. So in terms of 27:23 27 minutes, 23 seconds uh demand there is no change there in terms of import from Bangladesh that is also no change and the prices also remain in the same range. 27:32 27 minutes, 32 seconds Okay. Okay. And uh any new update on the new chemistry that you were you know uh talking about in the previous phone 27:40 27 minutes, 40 seconds calls uh any expected date that when it will be announced. 27:44 27 minutes, 44 seconds So we are on the advanced stage in terms of finaliz finalizing uh a few things on that lines. So maybe once it is freezed 27:52 27 minutes, 52 seconds I will be able to share before that it's difficult to share anything on that news because I it is not in public domain. 28:00 28 minutes Understood. Understood. And my one last question uh I read it somewhere that uh FPN has been you know making a pilot 28:08 28 minutes, 8 seconds plans for CPVC pipes. So are we planning to you know forward integration into CPV pipes as well for the future? 28:17 28 minutes, 17 seconds No. Uh so we already have a pilot plan for the pipes but that is for the our internal development of the CPVC regine 28:25 28 minutes, 25 seconds in terms of the quality and it is for the CPVC compound what we are manufacturing for our customers for that 28:32 28 minutes, 32 seconds tasting purpose but as you as you understand right we know we are building up a fiber plant right now but that is 28:38 28 minutes, 38 seconds that is mainly for the to serve our customers in the chloro derivatives and and for the future products as well as 28:46 28 minutes, 46 seconds for the CPVC also. also. So combined we are building one pilot plant right now in our campus just to support uh the 28:53 28 minutes, 53 seconds downstream and and the the improvement in terms of the quality and the when you launch a product I think you can do the sampling much more advanced from the 29:01 29 minutes, 1 second pilot plant and you can uh so that is much easier in terms of rather you spend on the uh the full scale plant and then 29:10 29 minutes, 10 seconds you start sampling to the customers. So that's we understood and we are we wanted to reduce that timeline going forward in the future and that's why we 29:17 29 minutes, 17 seconds are building up to one pilot plant but that's that's for common for all the products it's not particularly for particular chemistry the uh the the 29:25 29 minutes, 25 seconds thing which you mentioned about the CPVC we already have a pilot plant for the pipe but it is not for the we wanted to go in the pipe manufacturing but just 29:33 29 minutes, 33 seconds for the internal testing in the parameters and for the uh for the compounding facility. 29:41 29 minutes, 41 seconds Okay, understood. Thank you for answering my questions and best of luck for the future. Thank you. 29:48 29 minutes, 48 seconds [clears throat] 29:48 29 minutes, 48 seconds Thank you. The next question is from the line of Manish Banani from 361 Capital. 29:55 29 minutes, 55 seconds Please go ahead. 30:00 30 minutes Uh Manish, your line is unmuted. Please proceed. 30:04 30 minutes, 4 seconds Uh thanks for the opportunity sir. uh as I mentioned in the PPD presentation that there is some verification from the from 30:12 30 minutes, 12 seconds the software realization of the slick products and also there is some raw material increase in the cost. So for which 30:20 30 minutes, 20 seconds product uh this uh increase in the raw material the realization drop. 30:27 30 minutes, 27 seconds So it is happened because of the PBC price was going down uh drastically in last 6 months and because of the high 30:34 30 minutes, 34 seconds inventory and low offtake uh during the monsoon time we we have a higher capacity of of PVC in the stock and that 30:43 30 minutes, 43 seconds was the major reason in terms of the inventory call high inventory cost. 30:47 30 minutes, 47 seconds Uh so basically you are saying that the software realization has happened only in the CPVC and not for the other products. 30:55 30 minutes, 55 seconds other products. Yeah, it was not a major issue. Uh but CPVC it was a big a big gap in last four five months time in a very short period of time. 31:05 31 minutes, 5 seconds Okay, we got it. Got it. Thanks. 31:11 31 minutes, 11 seconds Thank you. The next question is from the line of Ashish from Leo Capital. Please go ahead. 31:18 31 minutes, 18 seconds Hi. So my first question had to do with I wanted to understand the uh demand supply dynamics around costic soda in 31:25 31 minutes, 25 seconds India. Are there any new capacities uh that are coming in over the next few years and if so how viable and how 31:34 31 minutes, 34 seconds viable are imports into India? Is this a long-term risk? 31:40 31 minutes, 40 seconds Okay. Yeah. Ashish you know the costic soda plant you know in the current situation like the Adani and the Reliance is building up a big capacity 31:48 31 minutes, 48 seconds including the forward integration of PVC. So the chlorine is completely utilized in the PVC and the costic will be excess. So going forward we see the 31:57 31 minutes, 57 seconds the costic price will come down and the chlorine price will go up going forward once the plant will commission because 32:04 32 minutes, 4 seconds everybody as I mentioned the plant is uh they announced big capacity but they gradually they commission the plant because entire such kind of big capacity 32:13 32 minutes, 13 seconds is difficult to commission at the time so slowly and gradually the Indian demand is also increasing. So we don't see uh the problem in the chloro 32:22 32 minutes, 22 seconds industry but the the dynamics of the costic and the chlorine might change going forward slowly and gradually but it it will take time you know currently 32:30 32 minutes, 30 seconds it is under construction and I think when it is going to commission is yet to be seen going forward. Yeah. 32:38 32 minutes, 38 seconds Okay. Uh thank you. Thank you. on on secondly on the CPVC side I know you mentioned that uh post uh commissioning 32:45 32 minutes, 45 seconds in uh Q2 FI27 possibly you expect that one year of subdued re uh utilization 32:53 32 minutes, 53 seconds post which you expect utilizations to pick up because of real estate growth. 32:58 32 minutes, 58 seconds So I wanted to understand the demand dynamics around market dynamics around that. So how much is imports currently? 33:05 33 minutes, 5 seconds How much is demand fulfilled inside India and how much do you expect this to grow? 33:12 33 minutes, 12 seconds So India you know we analyze normally uh every year but you know the TPVC consumption has also gone up this year 33:21 33 minutes, 21 seconds also in terms of volume. We'll come to know in the March and but last quarter is very pink normally for the pipe industries. So we'll come to know in the 33:29 33 minutes, 29 seconds March. But in terms of volume uh there is a growth even in such kind of time where the the monsoon is prolonged uh 33:36 33 minutes, 36 seconds then the market has affected quite a bit this year. Still there is a growth in the CTV in terms of the volume but 33:44 33 minutes, 44 seconds compared to previous years there was a slow slow growth in last year but we are expecting going forward as you rightly said the real estate growth is going to 33:53 33 minutes, 53 seconds continue and and we see the more growth going forward because the the CPVC and the PVC price difference was little lesser compared to previous time. So we 34:02 34 minutes, 2 seconds see the more faster growth in coming years in the CPVC industry going forward. 34:07 34 minutes, 7 seconds uh can you quantify this uh CPVC from the management's perspective because you're expanding capacities there. 34:15 34 minutes, 15 seconds So CPVC demand uh would be somewhere in the range of around 2A 80,000 tons. I mean that would be we are expecting by 34:23 34 minutes, 23 seconds end of this year the 31st March. So every year we expect that to go in the range of 10 to 12%. So considering when we have a cap when we will be coming 34:32 34 minutes, 32 seconds with our capacity maybe next year we'll land up with around 3,000 tons of demand. So considering that we see that 34:40 34 minutes, 40 seconds even the supplies that are coming will be eventually absorbed by the demand that is growing. So maybe 6 months or one year can be here and there but 34:49 34 minutes, 49 seconds eventually the growth in the CPVC market because we expect the CPVC uh demand to reach 5 lakh by FI 2030 2930. So and 34:58 34 minutes, 58 seconds this is just a plumbing application. So and that will happen uh so eventually the all the supplies that are coming will be absorbed but again one year can 35:07 35 minutes, 7 seconds be here and there it cannot be like a steady growth of 10 to 12%. So this year was that kind of a situation but we believe that considering demand it will 35:14 35 minutes, 14 seconds be absorbed whatever supply that we are bringing. Got it. Got it. All right. Thank you. 35:19 35 minutes, 19 seconds Thank you so much for taking the question. 35:25 35 minutes, 25 seconds Thank you. The next question is from the line of Hamsh Katpar from Green Portfolio. Please go ahead. 35:32 35 minutes, 32 seconds Yeah, good evening sir. Thank you for taking my question. My first question is regarding the CBBC uh basically on the margin side. So our margins have taken a 35:41 35 minutes, 41 seconds significant hit of like coming down to 17%. So when do you expect the margins to go back to the normal 24 25%. 35:52 35 minutes, 52 seconds Hey uh as we have earlier conveyed in our opening remarks as well uh this quarter was impacted because of the high cost of inventory and also the 36:01 36 minutes, 1 second realizations uh for the product has cooled off. So considering that uh we believe that Q3 was impacted in that 36:08 36 minutes, 8 seconds manner but Q4 onwards we believe that the margin will be uptick but again uh we believe that it should be in the 36:14 36 minutes, 14 seconds range of kind of a 21 to 23 or 25% 22 23% kind of a range. So it uh the things 36:21 36 minutes, 21 seconds will be better in Q4 onwards. It looks like as of now considering the prices of PBC going up and also the uh CPVC prices where it is. 36:30 36 minutes, 30 seconds Okay. And uh is there expectation of uh an increase in revenue also YI basis? 36:38 36 minutes, 38 seconds Oh sorry Y basis. So yeah because see for in FI26 the volumes were low because the first half was uh actually muted 36:47 36 minutes, 47 seconds because of early and prolong monsoon and also because of subdued demand. So we believe that FI27 definitely we will have a good volume growth as well. 36:56 36 minutes, 56 seconds Okay in the fuel section basically uh the management earlier did mention a sizable revenue 37:05 37 minutes, 5 seconds expected in FY27. Could you tell in terms of like percentage what in the overall revenue profile what percentage of revenue are you expecting to come from that segment? 37:16 37 minutes, 16 seconds Uh as uh earlier we said that we are in the stage of getting approvals and the contracts will get formed from the first 37:24 37 minutes, 24 seconds half I mean the quarter one of FI7. So maybe that would be the right time to convey any number on this rather than committing now. 37:32 37 minutes, 32 seconds Okay. and and the uh regarding the margins. So you expect the margins there to also be in the same range of 21 to 23 or a little higher. 37:40 37 minutes, 40 seconds It should be overall in the range of 20 to 23% kind of thing. Okay. Thank you so much. Okay. 37:50 37 minutes, 50 seconds Thank you. The next question is from the line of Pujen Sha from Molecule Ventures. Please go ahead. Hello. 37:59 37 minutes, 59 seconds Hello audible. 38:01 38 minutes, 1 second Yes. Yeah. So sir my first question pertains to the PC CPS and the PBC side. 38:08 38 minutes, 8 seconds So understanding we have been hearing of on the PBC that uh on the domestic industry uh there might be 38:15 38 minutes, 15 seconds implementation of MIT. Now I just wanted to understand if that happens and the base case scenario would be around $800 38:23 38 minutes, 23 seconds to $850 per ton. So and the global level might not be trading at such a high price. I understand the price has been 38:32 38 minutes, 32 seconds bottoming out but might the upper end could be sustainable around 750. So do you feel that we can have some pressure 38:40 38 minutes, 40 seconds in terms of margins in the CPC side going forward? 38:49 38 minutes, 49 seconds So uh you know definitely as you rightly said that PBC price is going up so the CPVC will catch up the C as the increase 38:58 38 minutes, 58 seconds price of the PVC also going forward but yeah there was always a lag of increase probably a one month or one and a half 39:06 39 minutes, 6 seconds month kind of it's always in all all kind of products but definitely it will catch up the price increase of PVC by 39:12 39 minutes, 12 seconds the CPVC also going forward We wanted to understand about the right now the situation we understand this 39:20 39 minutes, 20 seconds quarter we have been specifically impacted uh due to higher inventory of CPAC but uh which let's suppose uh the 39:28 39 minutes, 28 seconds price of the PVC has been uh in in downward trend and so might be we have 39:36 39 minutes, 36 seconds refilled the inventory of PVC so that would be benefit in Q4 for the specific quarter uh understanding let's suppose 39:44 39 minutes, 44 seconds this PVC is prices from here on of let's say 10% or 15% all 39:51 39 minutes, 51 seconds see uh if you see uh in Q3 it was impact because we were having a high cost of inventory whereas the CPVC prices had 39:59 39 minutes, 59 seconds gone down in the PBC prices considering current situation and the things enough I think the Q4 will be better off 40:07 40 minutes, 7 seconds compared to Q3 in terms of uh the specific uh in the CPVC margin case that is one thing secondly 40:14 40 minutes, 14 seconds in considering I think as Molly earlier said whenever there is an increase in the raw material prices we are able to pass on in the finished good prices as 40:21 40 minutes, 21 seconds well but yes that can happen with a lag of a quarter. Now hypothetically 10% rise how much it will take how much time 40:28 40 minutes, 28 seconds it will take to pass on in the CPVC that to our estimate generally takes a quarter's time but uh I guess any 40:35 40 minutes, 35 seconds increase in the PVC prices would be able to transfer to the CPVC prices with a lack of a quarter and so what is the current uh uh 40:45 40 minutes, 45 seconds chlorine utilization percentage as of in for Q3? 40:50 40 minutes, 50 seconds So as of now chlorine integration is around 70 75%. 40:56 40 minutes, 56 seconds Okay. So considering uh so ECU what we have been speaking out is 29,000 30,000 and considering uh so what could be the negative chlorine uh pricing right now. 41:09 41 minutes, 9 seconds So chlorine currently negative is around 7,000 7,000. So basically if we have that integration in the space so why we have 41:18 41 minutes, 18 seconds been suffering in terms of ECU because are we suffering from dumping from China or it is the ideal capacity has been built in India that has been impacting the ECU. 41:31 41 minutes, 31 seconds I didn't get your question. 41:33 41 minutes, 33 seconds Yeah. So let's suppose if ECU is trading at 30,000 and our integration closing integration is 75%. So broadly we have 41:42 41 minutes, 42 seconds been negative 25% only we have been throwing out at negative7,000 right. So ultimately what I've been trying to understand is why our issue has been 41:51 41 minutes, 51 seconds impacted so much considering the scenario that rupees been depreciating so dumping if there would be a dumping ground also the rupee depreciation might 41:59 41 minutes, 59 seconds help us. So uh trading at low ECU or we have been uh impacting impacted by the 42:06 42 minutes, 6 seconds lower ECU or what is the case right now in low cost it it doesn't work that way. First of all ECU the formula is very clear in 42:16 42 minutes, 16 seconds terms of costic sales minus chlorine prices. So it's not that whether we are integrated. So that's why we should have a better ECU. That's a simple formula 42:24 42 minutes, 24 seconds irrespective whether we consume inhouse or we sell outside. That is one thing. 42:28 42 minutes, 28 seconds Secondly in terms of the import. So import of costic is not something which is majorly come in India. In fact India is a net exporter in terms of uh costic 42:37 42 minutes, 37 seconds is just that the currently market is was bit subdued because of which the overall ECU was in that level and considering the way it was supposed to grow. We 42:45 42 minutes, 45 seconds believe it will be in the same range. It can go up it can go down but we we expect that it should be at this level or it might improve from here on. 42:54 42 minutes, 54 seconds Got it. Got it. And my last question pertains to the CPC. So what is the current realization of CPC? 43:02 43 minutes, 2 seconds It is somewhere around 95 to 100 rupees a kg. Thank you. 43:06 43 minutes, 6 seconds Uh so it has been improved somewhere in this quarter in this. Yeah. Yes. 43:14 43 minutes, 14 seconds Perfect. Thank you so much. I will join. Thank you. 43:19 43 minutes, 19 seconds Thank you. The next question is from the line of Shanchu from Sharma and Padi. Please go ahead. 43:27 43 minutes, 27 seconds Hello, I'm audible. Yes. 43:30 43 minutes, 30 seconds Yeah. Uh first question is around that labor code uh implementation. So have we done an adjustment in our uh uh income 43:38 43 minutes, 38 seconds statement this quarter or no? I I did not see anything specific but in the beginning I think someone mentioned uh that we have taken but I don't see 43:47 43 minutes, 47 seconds anything anything very big in the income statement. So uh are we not getting a very big limit or or we will take it later on? 43:56 43 minutes, 56 seconds We have already proed and amount is very small. 43:59 43 minutes, 59 seconds Okay. Uh it's it's not there. Good. Good to know. Uh uh so CPVC you mentioned it is around 95 44:08 44 minutes, 8 seconds to 100 per kg. Uh this is uh roughly a little bit low lower than than last quarter. 44:16 44 minutes, 16 seconds Yes. 44:17 44 minutes, 17 seconds Okay. And uh what would be the relation for EC right now? 44:27 44 minutes, 27 seconds Sorry. Uh what radation of what? ECS epigen. 44:34 44 minutes, 34 seconds So CH okay relation is ranging around 165 to 170. 165 to 170 per kg. 44:43 44 minutes, 43 seconds and uh and what what would be the utilization of these uh EC and PBC uh respectively? 44:50 44 minutes, 50 seconds I believe last quarter maybe it was around 50% if I'm remembering correctly. 44:56 44 minutes, 56 seconds So it has improved compared to last quarter but it will be difficult to give you the exact utilization levels of each product. 45:03 45 minutes, 3 seconds Okay. So it is 50% plus now. Yeah. Cool. Yeah. Yeah. Definitely. 45:09 45 minutes, 9 seconds And uh what about right now going into January, February? It's it's on the uptrend now considering you mentioned 45:16 45 minutes, 16 seconds that there there's a demand uh pull also coming. 45:21 45 minutes, 21 seconds So we believe that in terms of the volumes Q4 should be doing better. So definitely we see uptake in the demand from here on. 45:32 45 minutes, 32 seconds Okay. And uh about that the glycerine pricing going up uh uh is most of the ECS glycerine based or the other or the 45:41 45 minutes, 41 seconds other routes is also significant. So like how is the dynamics played out there? 45:48 45 minutes, 48 seconds I mean uh except the very old facility you know normally all new plants are coming with the glycerine base only. uh 45:56 45 minutes, 56 seconds the propane base is only on the western world and some some portion is in Korea otherwise most of the plants are glycerin based now uh no nobody is 46:05 46 minutes, 5 seconds putting up a new capacity based on the propylene because it is not feasible in terms of capex compared to glycerine 46:12 46 minutes, 12 seconds based GCS so in Asia almost the pricing which is coming from uh you know it is 46:19 46 minutes, 19 seconds based out of glycerine only okay and if glycerine prices go up Then 46:27 46 minutes, 27 seconds it's reasonable to expect that EC will also go up, right? You mentioned lag of a quarter or something. 46:34 46 minutes, 34 seconds Yes. Yes. Yes. Absolutely. Sure. 46:39 46 minutes, 39 seconds And about the new chemistry I think uh uh like can can you tell which will it be 46:47 46 minutes, 47 seconds like by the end of this financial or like by when will you be announcing it? 46:52 46 minutes, 52 seconds So as I said earlier we are in the advanced stage of finalizing things. So once that is done we will announce. So we are expecting to announce maybe in a couple of months. 47:04 47 minutes, 4 seconds Okay. So hopefully by the end of this financial year. Yeah we expect that. 47:11 47 minutes, 11 seconds Okay. Okay. Okay that's it from my side. Thank you. Thank you. Thank you. 47:21 47 minutes, 21 seconds Thank you ladies and gentlemen. We'll take this as the last question for today. Anna confesses over to the management for closing comments. 47:30 47 minutes, 30 seconds Hello. In in conclusion, I would like to convey that we are moving in line with our strategy through our expansion plans and diversification in terms of 47:38 47 minutes, 38 seconds multi-product catering various industries. We are targeting consistent growth. I would like to thank you all for joining us here today. Please feel 47:46 47 minutes, 46 seconds free to reach out our HR if there are still any answer unans answered question. Thank you everyone for your participation. Thank you. 47:55 47 minutes, 55 seconds Thank you very much on behalf of MK Global Financial Services Limited. That concludes this conference. Thank you all for joining us today.