Filatex India Limited — Q3 FY26

Filatex India Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=fDDCPa1nufw Published: 3 months ago

0:02 2 seconds Good afternoon ladies and gentlemen and welcome to the Philatics India Limited's Q3 FY26 earnings conference call hosted 0:11 11 seconds by Branding Edge. As a reminder, all participant lines will be in the listen mode and there will be an opportunity 0:19 19 seconds for you to ask questions after the presentation concludes. 0:24 24 seconds Should you need assistance during this conference call, please signal an operator by pressing star then zero on 0:31 31 seconds your touchstone phone. Please note that this conference is being recorded. 0:37 37 seconds I now hand the conference over to Miss Janvi Karia from Branding Edge. Thank you and over to you Mr. Chandi. 0:44 44 seconds Thank you Sapnali. Good afternoon everybody and welcome to Felatex India Limited's earnings call to discuss the 0:50 50 seconds Q3 and 9M FI26 results. We have on call with us Mr. Madu Suduan Dhagaria chairman and managing director. Mr. 0:58 58 seconds Ashoke Choan, Chief Visionary Officer and Mr. Nitan Agraal, Chief Financial Officer. We must remind you that the 1:06 1 minute, 6 seconds discussion on today's call may include certain forward-looking statements and must be therefore viewed in conjunction with the risks that the company faces. 1:15 1 minute, 15 seconds May I now request Mr. Madusan Bkaria to take us through the company's business outlook and performance. Subsequent to which we will open the floor for Q&A. 1:24 1 minute, 24 seconds Thank you and over to you sir. Thank you. 1:35 1 minute, 35 seconds Good evening and a warm welcome to all of you attending our earning call for the quarter ended December 2025. 1:45 1 minute, 45 seconds Joining me on this call are Mr. Shawan our chief vision officer and Mr. Nitan Agavanal our CFO 1:56 1 minute, 56 seconds I'll begin with a brief recap of our financial and operational performance for the quarter 2:04 2 minutes, 4 seconds on a quarter-to- quarter basis the company delivered a meaningful improvement in profitability despite 2:13 2 minutes, 13 seconds relatively stable volumes revenue for Q3 FI26 stood at 50 crores compared to 1,76 crores in Q2 FI26. 2:26 2 minutes, 26 seconds Sales volume were 1 lakh 318 metric t largely in line with 1 lakh 1,391 metric t in the previous quarter. 2:39 2 minutes, 39 seconds Despite marginal moderation in revenue and volumes, ITA numbers 2:46 2 minutes, 46 seconds increased to 93.58 crores, registering a 5.23 quarteronquarter growth, reflecting 2:53 2 minutes, 53 seconds improved operational efficiency and cost discipline. 2:57 2 minutes, 57 seconds Profit after tax rose sharply by 16.3% to 55.33 crores compared to 47.58 crores in Q2 FI26. 3:09 3 minutes, 9 seconds indicating better operational leverage and margins expansion. 3:16 3 minutes, 16 seconds Year on year this profitability is showed a strong improvement. Revenue stood at 149.7 3:25 3 minutes, 25 seconds crores compared to 168 crores in Q3 FI25. 3:31 3 minutes, 31 seconds Sales volumes were 1 lak 318 metric t marginally lower than 1 lak 1,432 metric 3:38 3 minutes, 38 seconds t in the corresponding quarter last year. 3:42 3 minutes, 42 seconds Profility metrics improved materially beta increased by 24.16% 3:51 3 minutes, 51 seconds to 93.58 crores from 75.37 crores in Q3 FI25. 3:58 3 minutes, 58 seconds Profit after tax rose by 16.3% to 55.33 crores compared to 47.43 crores 4:06 4 minutes, 6 seconds last year. In first 9 months of the current fiscal year, we have exceeded the total beta impact achieved in the entire previous year. 4:17 4 minutes, 17 seconds Domestic demand remains stable during the quarter despite ongoing geopolitical uncertainties and volatility in raw material prices. 4:28 4 minutes, 28 seconds Consumption of polyester yarn held steady and we expect gradual improvement in demand conditions over the coming 4:36 4 minutes, 36 seconds quarters aided by better export visibility. 4:41 4 minutes, 41 seconds A key release has been the non-acceptance by mixture of finance of the DGTR recommendation on anti-dumping duty on MBG. 4:51 4 minutes, 51 seconds This removes a significant cost overhang for the polister value chain. 4:57 4 minutes, 57 seconds The issue of the inverted GST duty structure on PT and energy continues. 5:02 5 minutes, 2 seconds However, the withdrawal of QCOS on PTA has eased supply side constraints. 5:10 5 minutes, 10 seconds This allows access to competitively priced imports of PTA, particularly from China, which currently have surplus capacity. 5:20 5 minutes, 20 seconds Softening PTA import prices would partially mitigate margin pressures arising from yan imports from China. 5:30 5 minutes, 30 seconds Recent global trade developments are decreasingly positive in India and Apple sector for India and April 5:39 5 minutes, 39 seconds sector. with clear downstream implications for yarn manufacturers. 5:45 5 minutes, 45 seconds The EU free trade agreement is expected to improve market access and create a more level playing field particularly for value added textiles and apple exports. 5:55 5 minutes, 55 seconds EU has a market worth 371 billion and Indian exporter are likely to have a breakthrough into this market. 6:04 6 minutes, 4 seconds Export of textile and emerald will help stabilize domestic demand also. 6:09 6 minutes, 9 seconds In the United States, the proposed tariff structure significantly improves India's competitive position with China facing 6:18 6 minutes, 18 seconds tariffs of around 34% versus approximately approximately 18% for 6:25 6 minutes, 25 seconds India. The relative depth of 16% is meaningful and structural rather than marginal. 6:32 6 minutes, 32 seconds US market size is also large at $300 billion. 6:37 6 minutes, 37 seconds The tariff differential may provide an edge which was missing due to high cost of raw material reserve with China. This 6:44 6 minutes, 44 seconds tariff differential substantially improve the attractiveness of sourcing from India 6:52 6 minutes, 52 seconds and importantly neutralizes the comparative disadvantage that Indian exporters face with Vietnam and Bangladesh and a distinct advantage against China. 7:05 7 minutes, 5 seconds The US remains the single largest global market for textile in April and any sustained improvement in India's export 7:13 7 minutes, 13 seconds competitiveness is expected to translate into higher export orders for fabrics and garments better capacity utilization 7:22 7 minutes, 22 seconds across textile value chain improve demand visibility and pricing stability for polyester filament yarn in the 7:30 7 minutes, 30 seconds domestic market for a yarn manufacturer's perspective these development represent a clear medium-term demand tailwind rather than a short-term sentimental shift. 7:44 7 minutes, 44 seconds A brief update on the capex. 7:47 7 minutes, 47 seconds The company continues to execute its 690 cr strategic investment program focused on capacity expansion, sustainability and energy efficiency and automation. 8:00 8 minutes Progress across projects remains largely on schedule except for minor regulatory delays in the renewable energy initiative. 8:08 8 minutes, 8 seconds We are warant about the mediumterm prospects of the polyester industry structural capacity additions in PTA 8:16 8 minutes, 16 seconds easing a policy related cost risk improving global trade sentiments and disciplined execution of our capex 8:24 8 minutes, 24 seconds program together provide a strong foundation for sustainable growth and margin resilience. 8:32 8 minutes, 32 seconds Thanking you for patient listening. 8:35 8 minutes, 35 seconds Now I'll be glad to answer any of your questions. Thank you. 8:42 8 minutes, 42 seconds Thank you very much. We will now begin the question and answer session. 8:47 8 minutes, 47 seconds Anyone who wishes to ask a question may press star and one on the touchstone telephone. 8:55 8 minutes, 55 seconds If you wish to remove yourself from the question queue, you may press star and two. 9:01 9 minutes, 1 second Participants are requested to use handsets while asking a question. 9:07 9 minutes, 7 seconds Ladies and gentlemen, we will wait for a moment while the question to ascend. 9:20 9 minutes, 20 seconds We have the first question from the line of Surya Nayak from Sunidi Securities. Please go ahead. 9:27 9 minutes, 27 seconds Hello. I hope I'm audible. Yeah. Go ahead. Yeah. Yeah. 9:32 9 minutes, 32 seconds Okay. Uh thank you sir uh giving me opportunity. So uh couple of questions one is uh what is the status of the 9:41 9 minutes, 41 seconds power uh with torrent energy that is uh we were uh dealing with and whether uh any further delay in that front and 9:50 9 minutes, 50 seconds secondly other I'm believing that the other capex are on stream uh that is 9:57 9 minutes, 57 seconds second uh any clarification on that if any delay is happening anywhere and thirdly is that to understand uh what 10:06 10 minutes, 6 seconds will be the key trigger for uh the uh the first recycle plant uh that know we 10:13 10 minutes, 13 seconds will be observing the success of that uh to trigger for further uh setting up of planning for the further setup of the 10:21 10 minutes, 21 seconds similar plans elsewhere. So there are three and I'll have some uh common question later 10:32 10 minutes, 32 seconds regarding torrent there were certain delays that's why it was supposed to start in June July but now it is getting 10:40 10 minutes, 40 seconds postponed to October November and we have had a site visit and we see they should be operational by October for 10:47 10 minutes, 47 seconds sure they had some issues with the government regarding evacuation of the activity now all has been cleared and we 10:57 10 minutes, 57 seconds see by October it should be done rest of the projects are all on time which in our hands that was something which was 11:05 11 minutes, 5 seconds not in our hand because we have tied up with torrent that we are equity participant and although we'll be 11:12 11 minutes, 12 seconds getting 100% power but uh the implementation is not in our 11:19 11 minutes, 19 seconds regarding uh rec cycle The key trigger would be once the product is acceptable by the customers 11:28 11 minutes, 28 seconds and we come to a steady state sales and full production then you would be looking for uh further 11:36 11 minutes, 36 seconds putting up new plants and at what scale we should put up. All that depends how soon we are able to sell and what 11:45 11 minutes, 45 seconds success we get with these customers because the new product is a new technology. So 11:53 11 minutes, 53 seconds but I think timeline should be 3 to 6 months after the startup of the plant. 11:59 11 minutes, 59 seconds Okay. And so so like uh like you know our uh the virgin polymer uh business so 12:06 12 minutes, 6 seconds will it take at least 6 months because in the virgin case generally we start with up front maybe 80 to 90% 12:15 12 minutes, 15 seconds utilization because that is the scale that is needed but but in case of the recycle what would be the utilization 12:23 12 minutes, 23 seconds percentage that would be know we will be watching for we can start with 50% minimum. 12:32 12 minutes, 32 seconds Mhm. And we already that's why we have started to tie up with the customer right now only and we have had with the 12:41 12 minutes, 41 seconds data on everybody. So like this we are trying with some more customers. They still time and we should be able to have a tie up with them and we are also 12:49 12 minutes, 49 seconds giving them some [clears throat] sample products from our pilot plant so that they are sure about the quality and they 12:56 12 minutes, 56 seconds can sign take take up agreement I mean of take agreements with us even before the plant starts. 13:03 13 minutes, 3 seconds Hopefully it should not take much time maybe 3 to 6 months to come to full stream. 13:09 13 minutes, 9 seconds Okay. And for for that the raw metal linkage from the ready garment press players the 13:17 13 minutes, 17 seconds clo this those are actually in place. Uh so there we will not face any issues. 13:24 13 minutes, 24 seconds We are in the process of doing that but there are lot of consolidated in Gujarat who are buying from all these 13:31 13 minutes, 31 seconds people who are making fabrics and garments and they are consolidating that waste and selling. So we have have tied up tasks with them and they are sure 13:40 13 minutes, 40 seconds they'll be able to supply the volume if we need. 13:44 13 minutes, 44 seconds Okay. And regarding realization of the virgin polymer there is some some mild 13:51 13 minutes, 51 seconds reduction in the you know realization site. So just to understand whether this kind of level will be maintained 13:58 13 minutes, 58 seconds throughout the uh know maybe Q Q4 and Q1 Q4 will not be as good as Q3 because 14:07 14 minutes, 7 seconds government had lifted B on November 12th or 13th I don't remember exactly so after that there is a flood of Chinese 14:14 14 minutes, 14 seconds products coming to India so there is a pressure on margin so it will be slightly lower than what we have done in Q4 Q3 so Q4 could be slightly lower than 14:24 14 minutes, 24 seconds that but we are trying to mitigate that by various ways but still it will be slightly lower than Q3. 14:32 14 minutes, 32 seconds So how much the current differential between the US sorry China and India as of now? 14:40 14 minutes, 40 seconds See China India product wise we go like uh POI uh what we were the margins were before 14:46 14 minutes, 46 seconds BIS there is a less maybe very small difference PTY also the difference is not there 14:54 14 minutes, 54 seconds major difference has come in FDY FDY prices in India were quite high compared to Chinese so that have come down but 15:02 15 minutes, 2 seconds recently even Chinese prices have started going up and now China is going for a holiday for almost 15 15:09 15 minutes, 9 seconds Let's see when they open up what are their price levels. 15:14 15 minutes, 14 seconds But I think Yeah. Yeah. Tell you. 15:17 15 minutes, 17 seconds Yeah. Just know it just to understand because the current scenario post the uh EU deal. What I understood is you know 15:25 15 minutes, 25 seconds Turkey was a major supplier of Yans mans to European side. So uh Turkey was 15:33 15 minutes, 33 seconds outside the EU and that will be impacted. So in that case given our 15:40 15 minutes, 40 seconds uncompetitiveness to export market because of the China's dominance. So uh will we see that no any kind of uh uh 15:48 15 minutes, 48 seconds once the once the EU treaty is in forced then definitely we will see improvement in the margin? Right now EU treaty has 15:56 15 minutes, 56 seconds been signed but it has not been enforced. It has still to pass certain legislative measures in India as well as 16:03 16 minutes, 3 seconds in Europe. So once that come into course we will have advantage over China this thing even in the yarn and other garment 16:11 16 minutes, 11 seconds and fabrics and everything. So then margins are likely to improve and see all these development have happened very 16:18 16 minutes, 18 seconds recently. Even the US development has just happened 2 days back only the 25% extra tariff has been lifted and this 16:25 16 minutes, 25 seconds 18% has still not come into force. It might come into force maybe in next one or two weeks or 3 weeks I don't know. So all these things are changing so rapidly 16:34 16 minutes, 34 seconds very difficult to predict but these are positive signs and maybe we we are able to improve our margins maybe from next month. 16:43 16 minutes, 43 seconds But I think from next quarter definitely there should be some improvement in the margin because US will come into effect 16:49 16 minutes, 49 seconds by then Europe I think will take another 6 months to come into force whatever we have heard in the news. 16:57 16 minutes, 57 seconds Correct. Correct. But at given point of time even if you know the export market looks healthy maybe post EU enactment uh 17:06 17 minutes, 6 seconds we will not think of further going into the virgin side I mean the manmade for five 17:14 17 minutes, 14 seconds we we will first explore the recycle and if we don't see much scope there then we'll go into the virgin side we want to 17:22 17 minutes, 22 seconds expand only in the recycle because that is something very proprietary to us and we don't see much competition over there. It's a new thing and if it's 17:30 17 minutes, 30 seconds accepted then because we have limited resources we can't grow everywhere. Correct. 17:35 17 minutes, 35 seconds But we go multiffold multiffold in that field. It will not be a similar plant. 17:39 17 minutes, 39 seconds It would be either five times seven times depending on how it goes. 17:44 17 minutes, 44 seconds So maybe our long-term ambition is to have around one lakh plus capacity aggregate capacity put together. 17:53 17 minutes, 53 seconds Long-term vision would be to have more than 1 million. and one lap is too small. Next would be more than one around 27,000. We are starting with 18:01 18 minutes, 1 second one lap is just just four time I said the next point would be at least five to seven times. 18:08 18 minutes, 8 seconds Okay. For but for that the raw metal linkage should be in place otherwise you know that I mean you may not get 18:16 18 minutes, 16 seconds there there's a lot of raw materials available. 18:20 18 minutes, 20 seconds Okay. There are a lot of brands which are ready to do there are a lot of European countries which are ready to but we we are already exploring every 18:28 18 minutes, 28 seconds possibility we started exploring that and uh any timeline aspirational 18:36 18 minutes, 36 seconds timeline you have set for that 1 million uh capacity of recycling only once this plant is operational I'll 18:44 18 minutes, 44 seconds be able to Okay okay okay thank you I'll come Thank you. 18:52 18 minutes, 52 seconds Thank you. We have the next question from the line of NRA man from White Pine Investment Management. Please go ahead. 19:01 19 minutes, 1 second Yeah, thank you for the opportunity. I just wanted to know uh few things. Uh just on the on the tariff side, uh 19:08 19 minutes, 8 seconds assuming the European tariffs are approved, European FDA is approved by their own parliament. uh can you give 19:15 19 minutes, 15 seconds that some number wise understanding how we are competing versus China on the uh imports into US as far as yan and fabric 19:24 19 minutes, 24 seconds is concerned right now the tariffs in Europe are ranging from 5% to 12% depending on the 19:32 19 minutes, 32 seconds category of the product so from yarn to fabric to garment so India what we here 19:39 19 minutes, 39 seconds will go into zero tariff China will have this same tariff what today. So India will be more competitive to that extent 19:48 19 minutes, 48 seconds against China. China is the biggest exporter both to EU and to USA. So it's 19:55 19 minutes, 55 seconds a big chunk like India exports percentage wise would be maybe 5 6% to 20:02 20 minutes, 2 seconds Europe. US I think it's around 8 9% of their total imports but China is close 20:09 20 minutes, 9 seconds to 28 30% of their total imports. So now we'll be competitive against China and also main exporters which is Vietnam and Bangladesh. 20:20 20 minutes, 20 seconds Their LDC status will also finish in December 2027 which gives them a zero duty in Europe. 20:30 20 minutes, 30 seconds Yeah. 20:32 20 minutes, 32 seconds So all that will help us to compete with them because we can compete with Bangladesh and Vietnam even at the same 20:40 20 minutes, 40 seconds duty but they were enjoying zero duty whereas Indians were paying more duty in Europe. So now we'll be at par with them 20:46 20 minutes, 46 seconds at least once this is effective and we'll be better off than China. 20:52 20 minutes, 52 seconds Got it. But but are we so uh is the difference in price so narrow that we even if say a 5% duty in Europe goes away we can 21:00 21 minutes see yeah 1% you leave the order that's the kind of competitiveness 5% is a very big number and for government also I'm 21:08 21 minutes, 8 seconds sure 5 7% are a very big number the margins in export businesses are not that great only in retail and other 21:15 21 minutes, 15 seconds things are so high market yeah yeah okay so any thoughts you have 21:22 21 minutes, 22 seconds uh and and Turkey import yarn uh as a whole from China something. Yes. No. Yeah. It import from 21:29 21 minutes, 29 seconds China as well as India also. India also sells to Turkey. 21:32 21 minutes, 32 seconds So because there's a reciprocal tariff uh you know there's a procure that Turkey needs to implement. So wouldn't 21:40 21 minutes, 40 seconds we benefit on the exports to Turkey if uh the yarn demand goes up if if the EU FDA is signed? 21:49 21 minutes, 49 seconds Yeah, definitely will uh benefit. 21:53 21 minutes, 53 seconds Okay. But and uh Okay, got it. But any numbers your thought on how much the margins can go up or I know it's it's a commodity business. 22:00 22 minutes That's very difficult to say right now. 22:03 22 minutes, 3 seconds Everything has just happened in last one and a half not even one month for me. 22:08 22 minutes, 8 seconds 27th January I think the EU agreement was signed and US came on first or 2nd 22:16 22 minutes, 16 seconds of August right and and uh and uh I I I slightly 22:24 22 minutes, 24 seconds missed the starting point on the recycled polyester uh what is the date I'm very sorry I missed an initial 22:31 22 minutes, 31 seconds remark so we are on track hopefully we should start production by end of September everything is on back. 22:39 22 minutes, 39 seconds Okay. And uh yeah. Okay. 22:42 22 minutes, 42 seconds Only on the power front. The power front we are delayed because we are dependent on which we have signed. So they had some evacuation issues with the 22:51 22 minutes, 51 seconds government. So we have also sent a person. We had a site. Their equipments are there and I think they should be operational by October. 23:04 23 minutes, 4 seconds Got it. All right. But uh in terms of margins, how is it fairing right now for the entire polister side? 23:11 23 minutes, 11 seconds Polister side margins are under pressure especially in FDY after uh the BS has been lifted because 23:20 23 minutes, 20 seconds FDY prices are quite low in China and especially only one item of LDY which is coming is there are two varieties in FTY 23:29 23 minutes, 29 seconds one is semid one is bright. So they are they have ample production of semid. So the middle margins are under more than the right. 23:39 23 minutes, 39 seconds Okay. And any any any numbers on how much the margin has fallen on the FDY side on in one one 23:45 23 minutes, 45 seconds FDY side. Yes. Uh in sidel it has fallen by 6 to 7% and bright maybe 2%. 3% something like that. 23:56 23 minutes, 56 seconds Okay. I'll come back to the queue. Thank you very much. Yeah. 24:02 24 minutes, 2 seconds Thank you. A reminder to all the participants. You may press star and one to ask a question. 24:10 24 minutes, 10 seconds We have the next question from the line of Siddhad Pasi, an individual investor. Please go ahead. 24:17 24 minutes, 17 seconds Um, hi, good afternoon. Uh, firstly, uh, great set of numbers and, uh, great outlook on the business. So, no 24:25 24 minutes, 25 seconds complaints on the business front and with respect to what the management is doing. This is a two-part question from my end and uh the second part will be a 24:33 24 minutes, 33 seconds slight critique. The first question uh there's been rumors in the markets regarding a anti-dumping duty coming on the 24:40 24 minutes, 40 seconds Chinese yan into India. So any clarity on that is the company expecting the same and if that were to happen what sort of margin improvements do we see 24:49 24 minutes, 49 seconds and secondly this is more with respect to being a minority shareholder while the company is doing a great job and I don't have an issue with respect to the 24:56 24 minutes, 56 seconds business being run as a minority shareholder when you know you see on the Bombay stock exchange over a month only a 100 unique fans have traded the stock 25:05 25 minutes, 5 seconds the stock's valuations are nowhere close to what the numbers reflect and what the peers in the market are can the company 25:12 25 minutes, 12 seconds or the management ensure greater interaction with mutual funds, greater interaction with PMSs so that the larger PMS, mutual fund and retail community 25:21 25 minutes, 21 seconds becomes aware of the business because true while the business is doing really well, true value creation for a minority would happen when there is an 25:28 25 minutes, 28 seconds improvement in the P ratios and the you know stock pricing with respect to the numbers that we're throwing out here on year in a great way. Uh thank you. 25:38 25 minutes, 38 seconds the anti-dumping duty only there's one uh anti-dumping investigation going on that is on text 25:48 25 minutes, 48 seconds I don't know the outcome will be but yes there is an investigation going on on text against China 25:55 25 minutes, 55 seconds and your other questions regarding the valuation and other things so we have recently hired a IR and a PR firm and 26:03 26 minutes, 3 seconds let's see maybe it will help to improve the image of the company amongst the investors and 26:11 26 minutes, 11 seconds give you a better return in the stock market. 26:15 26 minutes, 15 seconds Thank you so much and congratulations and all the best. Thank you. 26:21 26 minutes, 21 seconds Thank you. We have the next question from the line of WhatsApp Jen from Universal Consultancy. Please go ahead. 26:30 26 minutes, 30 seconds Hi. Uh can you hear me? Yeah. 26:34 26 minutes, 34 seconds Thank you for the opportunity. Um my question is on the quality control order and the impact of its withdrawal on 26:42 26 minutes, 42 seconds company's margin and debt prepayment schedule. Um with regards to cap capacity utilization, what is the 26:49 26 minutes, 49 seconds projected capacity utilization once EOS goes live and additionally how is the capacity expected to increase on a 26:57 26 minutes, 57 seconds quarteron quarter basis specifically uh for October to December 2026. 27:04 27 minutes, 4 seconds EPS lifting has 27:10 27 minutes, 10 seconds definitely impacted the margin somewhat because now people have access to China's products because China is 27:19 27 minutes, 19 seconds selling at a cheaper prices. They have more better availability of the raw material at a better prices because they 27:25 27 minutes, 25 seconds are surplus in PG also. That is the main thing regarding your debt repayment. Our 27:33 27 minutes, 33 seconds company is virtually debtree at the moment. So there's no problem that we'll have a problem with the debt repayment because we have a debt of around 100 27:42 27 minutes, 42 seconds crores and we have cash reserves of more than 100 crores with us. So that's not a problem. And going forward also whatever debt we are taking is very minimal. 27:53 27 minutes, 53 seconds So there should not be any problem with that. 27:57 27 minutes, 57 seconds Regarding capacity utilization, company is utilizing fully the capacities available. We had a small fire in 28:04 28 minutes, 4 seconds October 16 in one of the plant. So we lost a little bit of production that was around 1 one and a half% of the total production. 28:14 28 minutes, 14 seconds Otherwise we are always most of the time running and utilizing full capacity. So increase in the volumes will only happen 28:22 28 minutes, 22 seconds once we put in more machines. So we are increasing our capacity by approximately 55,000 tons peranom and that should be 28:30 28 minutes, 30 seconds operational by September 2026. So in Q3 of next year you will see improvement in the capacity. 28:39 28 minutes, 39 seconds Before that the capacity will be more or less in the same order. 28:46 28 minutes, 46 seconds Okay. Thank you. I have another question. um with signing of the European FDA, EU FDA and stronger EPR 28:55 28 minutes, 55 seconds norms by the European nations um how does that impact our company and I see that our exports have reduced 29:03 29 minutes, 3 seconds quite a bit in the recent times. So does that increase our export share and also how does US yeah it it will increase our export 29:12 29 minutes, 12 seconds share because we become more competitive against China in Europe once the EU is signed and become enforced. It is already signed but it has to be become enforcable. 29:23 29 minutes, 23 seconds What was the other question? Sorry if I could move forward. 29:26 29 minutes, 26 seconds Also regarding US tariffs, the same thing regarding US tariff. Yeah, same thing will happen. 29:31 29 minutes, 31 seconds Yeah. Yeah. And EPR tightening norms will help us in our recycling initiative which we have taken up. The companies 29:39 29 minutes, 39 seconds would be more than willing to tie up the dust because there is very there is hardly any company which is doing textile to textile recycling. Most of 29:48 29 minutes, 48 seconds the recycling which is happening in the world is from bottle to textile. 29:53 29 minutes, 53 seconds Okay. And are there any other competition companies in circular polyester recycling? 30:01 30 minutes, 1 second They have announced projects but our would be one of the first one to start. 30:06 30 minutes, 6 seconds I don't know what will happen once when they come in because they have announced and nobody's coming before anytime 27 30:15 30 minutes, 15 seconds and they also first time project for them. This would it's not that they are doing it all. All of them have done some pilot scale plants and now they are all scaling up. 30:27 30 minutes, 27 seconds Then everybody has a different technology. It's not that all technologies are similar and ours is one of the least capex per 30:36 30 minutes, 36 seconds wise. If you will see the numbers, ours is least capex per turn wise of production. Part time of production. 30:44 30 minutes, 44 seconds Our capex is the least compared to any other which is coming in the future. 30:50 30 minutes, 50 seconds Okay. And these are like the competition is Indian companies or international companies. 30:58 30 minutes, 58 seconds Both. There's one Indian company which is coming up and uh there are quite a few international company. In total I 31:06 31 minutes, 6 seconds would say there would be total maybe five or six not more. Okay. 31:17 31 minutes, 17 seconds Thank you. A reminder to all the participants. You may press star and one to ask a question. 31:27 31 minutes, 27 seconds We have the next follow-up question from the line of Surya Nayak from Sunidi Security. Please go ahead. 31:34 31 minutes, 34 seconds And so uh just to understand uh globally uh what is the mandate being uh given to the garment maker to 31:43 31 minutes, 43 seconds source uh uh recycled fiber? So let's say in in in the context of aggregate 31:51 31 minutes, 51 seconds fiber that is been uh used if you can give some color on that and secondly uh our estimates are telling that know the 31:59 31 minutes, 59 seconds we may not be requiring uh further acquisition date for the uh projects. So what is the thought process in your 32:08 32 minutes, 8 seconds case? Uh whether year ending uh dates will be rising or uh it will be uh at the same price same level 32:16 32 minutes, 16 seconds rates of what rising pardon sir I couldn't get your last question. What was it? What will be? 32:26 32 minutes, 26 seconds Yeah earlier you were saying that around close to 120 to 130 cr will be raised for the purchase of some German 32:34 32 minutes, 34 seconds machineries. So whether uh we will be requiring it at all for the dates or because the internal generations are quite robust debt. 32:46 32 minutes, 46 seconds Yeah. 32:48 32 minutes, 48 seconds Yeah. Yeah. We we we will be taking some debt like for recycling we have tied up 32:54 32 minutes, 54 seconds for 200 crores of debt and if our internal approvals are good maybe we'll take draw less with that and for other 33:04 33 minutes, 4 seconds expansion of the yarn in uh parent company we have tied up for the ECB loan against the machinery which we are 33:11 33 minutes, 11 seconds importing so that in any case will take that is 130 crores I mean This is Euro if the Euro value 33:20 33 minutes, 20 seconds changes it changes approximately 130 crores. 33:25 33 minutes, 25 seconds Okay. So uh so in all how much debt you are expecting to uh take in FI2 33:33 33 minutes, 33 seconds once all the projects are completed it will be like 330 crores of new debt. 33:38 33 minutes, 38 seconds New debt. Okay. And regarding the effects fluctuations uh if you can give some color as to what it is know giving 33:48 33 minutes, 48 seconds rise or let's say creating a trigger for rise in the fluctuations whether it is related to 33:55 33 minutes, 55 seconds that I cannot I'm not an expert on the currency I cannot give what triggers no no about on account of what actually 34:03 34 minutes, 3 seconds I mean is it related to raw metal import of raw metal or what actually that is what I'm saying whether an operation So raw material, 34:11 34 minutes, 11 seconds yeah, raw material when we import, we import in dollars and we get a LC90 days credit and we keep on hedging it as and 34:20 34 minutes, 20 seconds when we are advised, we have kept advising company who keeps advising how to progress in the 34:28 34 minutes, 28 seconds foreign currency because we are not experts. We according to the advice of that person and the company. 34:36 34 minutes, 36 seconds Okay. And sir, what is the update on the Gales PTA plant because we are here what 34:43 34 minutes, 43 seconds numbers? I think when I talk to the company they are saying they'll be able to give material by April, April end. Okay. 34:50 34 minutes, 50 seconds But the some people are there some people are saying they'll come by June. 34:55 34 minutes, 55 seconds IORC is likely to start from October November this year. 35:00 35 minutes Okay. Then uh the what the benefits we were expecting in the first quarter last quarter of the uh current fiscal that 35:09 35 minutes, 9 seconds will be spill over to maybe uh next next next next quarter. Right. 35:14 35 minutes, 14 seconds Right. Right. And regarding the mandate you know overall mandate of the uh you know government makers to to source the 35:22 35 minutes, 22 seconds recycled fiber if you can Europe there is a EPR extended producer responsibility among all the producers 35:29 35 minutes, 29 seconds who are selling in Europe that they have to use certain percentage of recycled material and their government is also 35:37 35 minutes, 37 seconds insisting that that recycle should be textile to textile not bottle to textile and they also want to use that but it is 35:44 35 minutes, 44 seconds not available as of now. So they are forced to use the bottle to textile. 35:49 35 minutes, 49 seconds Even if they want to use the availability is not there. Okay. 35:54 35 minutes, 54 seconds All tying up with various people who are coming with textile to textile already. 35:59 35 minutes, 59 seconds So is it is it some kind of collar you got like you know maybe 25% or 30% of 36:06 36 minutes, 6 seconds the uh virgin fiber they need to procure a recycle one. right now I think the the the mandate is 36:14 36 minutes, 14 seconds starting from 25 to 30% and lot of companies have said by two 2030 or 2032 36:22 36 minutes, 22 seconds they'll go 100% on that but it all depends on the availability of the yarns also now okay okay and it is not only polyester they must 36:31 36 minutes, 31 seconds be using maybe recycled cotton or other fibers also okay but we are not going to get any 36:39 36 minutes, 39 seconds benefit from the EPR side on once our facilities will be our benefit is that today the demand is 36:47 36 minutes, 47 seconds there and the prices are much more than the budget the demand virgin this recycle prices are very high compared to 36:54 36 minutes, 54 seconds the virgin prices. So you still believe that now whatever you have guided earlier of 35 37:02 37 minutes, 2 seconds yeah that kind of still get yeah yeah they are easily they should be getable I mean I nobody can guarantee 37:10 37 minutes, 10 seconds but they should be getable because what I hear the prices in the market are much more than what I have guided for but much depends upon whether uh the new 37:18 37 minutes, 18 seconds capacity is coming in place how soon that new capacity coming in place because you know uh there's no so Don't worry about the 37:27 37 minutes, 27 seconds capacities coming in. The demand is much more than the capacity which will come in next 3 to 5 years. 37:33 37 minutes, 33 seconds Okay. So all depends on how quickly we scale up our business. That is important to uh Yeah. Yeah. Thank you sir. Thanks. 37:46 37 minutes, 46 seconds Thank you. We have the next question from the line of Arian Batya from In Research. Please go ahead. 37:53 37 minutes, 53 seconds Thank you. Thank you. My question, my first question is regarding the timeline. Can you provide the timeline of all the capex which coming in? When 38:02 38 minutes, 2 seconds will this all be timeline? All the capex are on timeline other than the torrent which I have 38:09 38 minutes, 9 seconds explained again that torrent to of hybrid power is little delayed. We thought I think it should be operation 38:17 38 minutes, 17 seconds by June July. Now it will be operational somewhere in October or November beginning. All the caps will be like by 27 or 28. 38:27 38 minutes, 27 seconds Now other capex are all going to be operational by September 26. This will be operational by October November 26 only. Nothing in 27. 38:38 38 minutes, 38 seconds Okay. Got it. And my second question is regarding the withdrawal of BIS. Now can a margin be like similar to what 38:45 38 minutes, 45 seconds happened in 2324 due to the Chinese dumping? 38:50 38 minutes, 50 seconds No. No. Even see China is also going for the anti-one option policy. You might have heard for lot of products they are 38:58 38 minutes, 58 seconds closing their inefficient plants any plant which is older than 15 20 years their government is closing that 39:05 39 minutes, 5 seconds and they are also trying to improve their margins. How long they'll keep on subsidizing the world. 39:12 39 minutes, 12 seconds Okay. So there might be a 50 200 basis point of impact due to this not like I don't think more than yeah 39:22 39 minutes, 22 seconds more than that should be there but maybe impact of US FDA then EU FDAs 39:31 39 minutes, 31 seconds would mitigate all these also in the coming quarters. 39:37 39 minutes, 37 seconds Got it. Got it. So my last question is on debt like current we have 100 cr of debt and incrementally we are taking 330 cr of debt. So overall debt will be 440 cr. 39:45 39 minutes, 45 seconds Yeah. And also we'll be repaying. So maybe by the year I think end of fi 27 39:53 39 minutes, 53 seconds we might be still net net maybe 360 or 350 something like that. 39:59 39 minutes, 59 seconds Okay. Got it. Thank you. Thank you. And best of luck. 40:06 40 minutes, 6 seconds Thank you. We have the next question from the line of sua from Pinpoint X Capital. Please go ahead. Hi. 40:15 40 minutes, 15 seconds Uh hi sir. Uh I just have only one question like what is your future plan once the first recycling project is a success? 40:26 40 minutes, 26 seconds Future plan is to grow on that and the next plant should be at least five times the capacity of this. 40:35 40 minutes, 35 seconds Okay. And we already started looking where we should put it. We are also exploring if we can go out of India. 40:44 40 minutes, 44 seconds There are certain places in Europe where we are talking they they might offer some incentives to take care of the 40:51 40 minutes, 51 seconds dumping of the governments in those countries. 40:55 40 minutes, 55 seconds Okay. So uh do we uh like in future uh we would be needing you know more fund for this uh and will it be utilized by internal approval or uh like debt? 41:09 41 minutes, 9 seconds Yeah, it will be always a combination of internal approval there. Okay. 41:14 41 minutes, 14 seconds And maybe we can raise equity also in the future if require. And how much capex would it might take? 41:25 41 minutes, 25 seconds It should be in the vicinity of anything around 1500 crores. Uh, 1500 CR. Yeah. 41:34 41 minutes, 34 seconds Okay. Okay. Thank you very much, sir. That's all from my s. 41:40 41 minutes, 40 seconds Thank you very much ladies and gentlemen. That was the last question for today and with that we conclude the question and answer session. I now hand 41:49 41 minutes, 49 seconds the conference back to Mr. Madu Bhageria for the closing comments. Thank you and over to you sir. 41:56 41 minutes, 56 seconds I'd like to thank everyone for participating and sparing their time to join us and 42:02 42 minutes, 2 seconds hope to talk to you all of you on the next call of Q4 of this year. Thank you everyone. Bye. 42:12 42 minutes, 12 seconds Thank you. On behalf of Branding Edge, that concludes this conference. Thank you for joining with us today.