Ganesha Ecosphere Limited — Q1 FY26

Ganesha Ecosphere Ltd Q1 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=rgLNmINfRwc Published: 9 months ago

0:00 Ladies and gentlemen, good day and welcome to the Q1 and FY26 Ganesha Ecosphere Limited earnings conference 0:08 8 seconds call hosted by Antique Stop Broking Limited. As a reminder, all participant lines will be in the listenon mode and 0:17 17 seconds there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance 0:24 24 seconds during this conference call, please signal an operator by pressing star then zero on your touchstone phone. Please 0:32 32 seconds note that this conference is being recorded. I now hand the conference over to Mr. Manish Mahavar from Antique Stock 0:39 39 seconds Broking Limited. Thank you and over to you sir. 0:42 42 seconds Yeah, thank you. Good afternoon everyone. I am pleased to host today's ad call of Ganesha Eosphere. We have leadership team represented by Mr. Dr. 0:50 50 seconds Gopalagraal CFO Mr. Prashant Kandel senior vice president and Mr. J Sharma director Ganesha without any delay I 0:59 59 seconds would like to invite Mr. Sharma to start with opening comments post which we will move to the Q&A. Thank you and over to Yash. 1:07 1 minute, 7 seconds Thanks. Thanks Manish. Uh good afternoon everyone and a warm warm welcome to all the participants uh to our Q1 FI26 1:14 1 minute, 14 seconds earnings call. The first quarter of FI26 was a challenging quarter for us due to some unprecedented events that led to 1:22 1 minute, 22 seconds spike in raw material prices. uh you know which uh further put pressure on the RPSF prices with with the virgin materials. Um this spike in raw 1:31 1 minute, 31 seconds materials was also attributable to a sudden rise in the demand for flakes. Um especially in the overseas markets um 1:38 1 minute, 38 seconds you know leading leading to a huge volume of export of flakes from India uh in the last quarter. uh the performance of the legacy business has thus taken a 1:47 1 minute, 47 seconds sharp beating making the first quarter being the lowest quarter of RPSF and yarn business for us among the last several quarters 1:56 1 minute, 56 seconds of the scrap uh key feed stock for our products reached at an unprecedented levels of 55 to 56 per kgs uh for some 2:03 2 minutes, 3 seconds time uh during April and May uh merely a fraction of this price surge in feed stock could could be able to be passed 2:10 2 minutes, 10 seconds on to the end customers um the biggest reason being over capacity in the industry and the suppressed demand from the user industry as well uh yarn 2:18 2 minutes, 18 seconds spinning as well as the non-woven textile sector uh which is already facing headwinds in the form of cheaper imports of fabrics as well as 2:26 2 minutes, 26 seconds uncertainty over the US tariffs on the Indian imports. 2:30 2 minutes, 30 seconds So overall on the uh legacy business side due to the slowdown of the demand at our buyers and our production levels 2:36 2 minutes, 36 seconds also came down to 95% as against 99% uh during the last quarter. Uh the proportion of value added production 2:43 2 minutes, 43 seconds normal products was also reduced uh by a few percentage points and the raw material overall raw material cost swelled to 70% of the revenue as again 2:52 2 minutes, 52 seconds 64% uh during the last quarter. uh higher scrap bottle prices uh lower sale prices and lower capacity utilizations 3:00 3 minutes coupled with the demand slowdown majorly contributed to the decline in this profitability. Uh in respect to the 3:08 3 minutes, 8 seconds arpet uh granu business or the packaging vertical which is primarily regulationdriven and the regulation for the mandatory use of arpet granules have 3:17 3 minutes, 17 seconds was implemented as scheduled from April 25. uh however the run rate of production and sale volume has dropped 3:24 3 minutes, 24 seconds by about 25% uh from the last quarter and uh results could not be translated on the expected lines uh due to couple 3:31 3 minutes, 31 seconds of factors. Uh number one was the early onset of monsoon um during the midsummer which is the peak season for the beverage industry which also affected 3:40 3 minutes, 40 seconds the beverage sales uh of our country really badly. Uh second was uh the the high high pet bottle scrap prices also 3:48 3 minutes, 48 seconds resulted into a 35 to 40% premium in the in the arped granual pricing compared to virgin also because virgin prices had 3:56 3 minutes, 56 seconds crashed u you know due to the cooling off of crude prices. So as per the past trends uh virgin uh prices of virgin pet 4:04 4 minutes, 4 seconds usually remain firm in summer because of the higher demand but uh unfortunately this season was uh it was the opposite case. Um basis the lower approved 4:13 4 minutes, 13 seconds capacity of arpet granules. uh MOEF has issued a draft notification on 3rd June uh on the demand of packaging industry 4:21 4 minutes, 21 seconds proposing that any shortfall in the mandatory usage of ARFET during FI2526 can be made up over the next 3 years 4:29 4 minutes, 29 seconds though that makeup would be over and above the individual targets of the respective future years basis the draft notification the brands who were already 4:38 4 minutes, 38 seconds using RP granules and also those who were to start the consumption um very soon uh slightly lowered down their their purchases. 4:47 4 minutes, 47 seconds Set off allowed to the bottlers for their p for their past consumptions of arpet granules during last financial year against the stipulated targets of 4:55 4 minutes, 55 seconds fi26 was also leveraged by the branch to postpone their purchases slightly to subsequent quarters due to the high 5:01 5 minutes, 1 second premium of rpet versus vp. uh despite the disappointments in the first quarter there are some positive forms were in 5:09 5 minutes, 9 seconds the form of revenue numbers and margins of our new business which were maintained and we could keep the expenditures under control. Uh though 5:17 5 minutes, 17 seconds the performance was not on the expected lines uh but uh things have definitely started improving uh already in the current quarter as under the prices of 5:27 5 minutes, 27 seconds pet bottle crap has come down and now normalized in the range of 41 to 44 rupees per kg and thus improving the gross margin significantly. uh with 5:36 5 minutes, 36 seconds onset of forthcoming festival season, demand is also improving slightly and the orders for September October deliveries have picked up significantly 5:44 5 minutes, 44 seconds and we are expecting that demand will return back to normal levels in the subsequent quarters. We've got very good export orders of RPSF uh from the 5:53 5 minutes, 53 seconds European market on the back of depreciating rupee against the euro. uh with ease of size differential between the virgin and recycled granules. The 6:01 6 minutes, 1 second sale volume of warped has also significantly picked up and the production run rate has reached to uh very high levels. Now sale visibility 6:10 6 minutes, 10 seconds until the December has been uh finalized to us by by our existing customers with much improved optics by all the brand 6:18 6 minutes, 18 seconds owners that we're currently working with. 6:21 6 minutes, 21 seconds On the regulation side while giving the finality by the MOEF the draft notification is still pending and and soon to come out as per our sense the 6:30 6 minutes, 30 seconds shortfall of FI26 proposed to be set off will be cabbed to to around 10 to 15% meaning that rigid plastic packaging 6:39 6 minutes, 39 seconds industry will need to comply at least 15 to 20% mandatory usage and only 10 to 15% of shortfall can be should be 6:46 6 minutes, 46 seconds allowed to be carried forward and set off. Uh although we are still awaiting the final go ahead uh from the ministry on this but this is what the expected 6:55 6 minutes, 55 seconds outcome is as of today. Um much awaited facile licenses have also been provided to many new recyclers and thus the thus 7:04 7 minutes, 4 seconds it has broadbased the capacity of the recycling industry with new approvals in place. The current approved capacity now stands to around 1.67 six seven lakh 7:13 7 minutes, 13 seconds tons and thus easing the fear of packaging industry about the availability of required volume of RPT material for complying to the regulatory guidelines. 7:23 7 minutes, 23 seconds Our Bronfield expansion of uh 22 and a half thousand tons at Vangul will be operational as per schedule. We have also started making uh good exports of 7:32 7 minutes, 32 seconds RPC Daniels uh to keep the balance between domestic and overseas demands. 7:37 7 minutes, 37 seconds uh promoters have infused uh 104 cr uh by conversion of their equity warrants in July reinforcing their commitment towards the growth of company's 7:45 7 minutes, 45 seconds business. Uh though the performance in first quarter is falling short of our expectations and we have faced some new challenges which we were not expecting. 7:52 7 minutes, 52 seconds We believe it was just a temporary bump and we have realigned our business strategy according to the new challenges and realities and are confident in 8:00 8 minutes surpassing the financial numbers of FI25 under the prevailing national and global market scenarios despite lower numbers in the first quarter. It is our belief 8:08 8 minutes, 8 seconds that long-term business outlook is quite intact and we're fully geared up to seize the opportunities available in the pet recycling industry which is 8:16 8 minutes, 16 seconds upcoming. Uh thank you all for your patience uh and listening and now we are ready for any questions which you may have. Thank you. 8:26 8 minutes, 26 seconds Thank you sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star 8:33 8 minutes, 33 seconds and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 8:40 8 minutes, 40 seconds two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. 8:55 8 minutes, 55 seconds The first question is from the line of Mr. Naim Patel from Bastian Research. Please go ahead. Hi, am I audible? 9:03 9 minutes, 3 seconds Yes. Yeah. So, thank you for the opportunity. 9:07 9 minutes, 7 seconds I had a question regarding our upcoming green field capacity in Usha. So is it going to be completely integrated where 9:14 9 minutes, 14 seconds we ourselves structure the raw materials and manufacture the wash flakes or is it going to be structured more around sourcing the wash from the joint venture 9:23 9 minutes, 23 seconds with race eco chain which happened this year. So and more color on that would be appreciated. 9:30 9 minutes, 30 seconds So yeah thank you Mr. Patel. So it will the consolidated capacity where we would be having the washing line as well as the granization line. 9:41 9 minutes, 41 seconds Understood. So we will we won't be procuring from the joint center at all. 9:48 9 minutes, 48 seconds Yeah. So in joint venture we are putting the washing lines. People are making the primary washing and it is not the food washing. So uh from these small lines we 9:57 9 minutes, 57 seconds will be uh transporting the wash flex to our mother plant. So in mother plant we will be making the washing the rewashing 10:04 10 minutes, 4 seconds the uh flex to make it food grade and then we'll make the granulation. 10:09 10 minutes, 9 seconds Understood. And uh just for tracking purpose back in FI25 we used to report uh consolidated utilization. So was that 10:17 10 minutes, 17 seconds utilization included including all facility as our total capacity or was it tracked separately a bit more column that would be helpful? 10:26 10 minutes, 26 seconds No. So we have given the the separate capacity capacity of the standard business uh and capacitization of our war and subsidiaries. 10:35 10 minutes, 35 seconds Okay. Thank you. That's all command. 10:39 10 minutes, 39 seconds Thank you participants. If you wish to ask a question, you may press star and one on your touchstone telephone. 10:48 10 minutes, 48 seconds The next question is from the line of Mr. Man Asher from Growth Sphere Ventures. Please go ahead. 10:55 10 minutes, 55 seconds Hello. Hey. Hi. Yes. Uh congrats on decent set of numbers uh in in this time where the EPR was delayed and 11:03 11 minutes, 3 seconds everything. So uh yes, I just have two questions. Uh I'll begin with my first question. Uh the biggest bottleneck in 11:11 11 minutes, 11 seconds the air was the approval timeline right and now since the EPR has shifted to FY27 or it has been deferred to FY27 11:21 11 minutes, 21 seconds how do you see the competition coming in since there are I guess five seven players whose capacities are ready but they don't have any approval. So do you 11:30 11 minutes, 30 seconds think that this time period will be taken by brands to uh basically shift their supply chain and shift their uh 11:39 11 minutes, 39 seconds and and build new suppliers and henceforth bringing the competition into the market and realizations getting down say in FY 27 and 28 down the line when our new capacity is coming. 11:52 11 minutes, 52 seconds Thanks for the question. So, so see uh basically first of all the ether guidelines have not now have not shifted but what the recent draft which came out 12:00 12 minutes what they what the government has allowed that uh the 30% any shortfall from the 30% requirement for this year 12:08 12 minutes, 8 seconds will can be can be offset by doing higher percentage uh in the subsequent year. So for example let's say a brand 12:15 12 minutes, 15 seconds owner is let's say is able to do 15% this year and and is falling short of 15% for this year. So they have to offset this by doing the extra 15% over 12:25 12 minutes, 25 seconds the next three years above the given target for the next three years. Number one. So so the EPR A E A E A E A E A E A E A E A E A E A ER requirements have not 12:32 12 minutes, 32 seconds shifted but they have just allowed carry forward of the shortfalls if any if the brands are facing number one. Number two, uh yes, obviously, you know, it's 12:41 12 minutes, 41 seconds very important that the industry capacity gets created because unless the industry capacity gets created, um there is a there is a very strong stance from 12:49 12 minutes, 49 seconds the industry that how are they supposed to even complete their require targets uh if the if the capacity is not there on the ground the implementation will 12:57 12 minutes, 57 seconds not even make sense. This is the biggest ground that the industry is putting forward to the to the ministries for for deferment which they are not listening 13:06 13 minutes, 6 seconds to. So but I still think that uh if you think about the regulation implementation when it happens uh you 13:13 13 minutes, 13 seconds know as it starts happening the the supply and demand of high quality arpet granules will still be in a much bigger 13:21 13 minutes, 21 seconds glut because um although the capacities are on ground but how much of a really high quality RP will be available in the 13:28 13 minutes, 28 seconds market is still a big question mark. So it will take a lot of time for the industry to mature you know and to get the get to that level and meanwhile we 13:36 13 minutes, 36 seconds are all already expanding our capacities of RPD going forward. Uh yes there may be you know certain certain uh 13:43 13 minutes, 43 seconds challenges in the short term but but I think that the long-term uh fundamental is very very strong and clear. 13:50 13 minutes, 50 seconds Got it. Got it. Yeah. Uh so just to basically add to your answer the uh since the ETR is deferred the the volume 13:58 13 minutes, 58 seconds has been deferred to 27 and 28. So uh second question was just on that line that are the brands interested in having 14:06 14 minutes, 6 seconds at least the minimum quantity that they agreed to buy from you guys in FY26 or that is also being deferred to 27 and 28. 14:17 14 minutes, 17 seconds Uh no no obviously so all all our customers are uh you know oftaking the quantities uh that they that they had uh 14:24 14 minutes, 24 seconds you know estimated for this year although obviously it's not nowhere even close to 30% requirement as per the mandate but yes they are maintaining 14:33 14 minutes, 33 seconds their their uh you know uh given targets to us for the quantity optic. Yes, what what happened is that because of the 14:40 14 minutes, 40 seconds sudden jump in the uh prices and the huge premium um and coupled with you know sale pressures that they were facing in the season they did defer 14:48 14 minutes, 48 seconds their purchases a little bit uh but we are again already almost fully back on track and fully utilized as of today. So 14:57 14 minutes, 57 seconds um and it's pretty clear you know until the until the full year as well. 15:03 15 minutes, 3 seconds Okay. Yeah, that's great to hear. Yes, thank you so much. All the very best. Thanks. 15:10 15 minutes, 10 seconds Thank you. Participants. If you wish to ask a question, you may press star and one on your touchdown telephone. The next question is from the line of Mr. 15:20 15 minutes, 20 seconds Chhattan Desh Pande from PKday Advisors. Please go ahead. Uh hello sir, can you hear me? 15:28 15 minutes, 28 seconds Yes. Yeah. Yeah, you are able. 15:30 15 minutes, 30 seconds Yeah. Thank you for the opportunity. Uh so I wanted to ask on the capacity front itself. So as you mentioned that uh high quality ARPET uh like the capacities 15:39 15 minutes, 39 seconds that have high quality ARPET might not be as much as stated but uh how do you see playing this out over the next uh 15:47 15 minutes, 47 seconds like 5 years if you have any idea about that? 15:54 15 minutes, 54 seconds Just for our long-term uh vision uh as for our long-term vision we are looking for uh having around 30% of the markets here in the recycling revenue sector. 16:04 16 minutes, 4 seconds So, so over next five years we our target is intact. 16:08 16 minutes, 8 seconds Got it. And in terms of supply, how are you going to ensure that your supply of recycling material that the arpet like you are like that is safeguarded from 16:17 16 minutes, 17 seconds the competition because you see a price war that is going on there. 16:23 16 minutes, 23 seconds Uh see obviously obviously u it is it is obviously it will happen. There is no you know we we we do not doubt that uh competition competitive pressure will 16:32 16 minutes, 32 seconds not be there but we still think that uh currently the market is very very you know on at a nent stage immature. Um 16:39 16 minutes, 39 seconds none of the qualities of any of the computers have yet been proven uh on ground and uh we think that uh still we 16:47 16 minutes, 47 seconds are very very efficient in our operations from any of our competitors currently operating in the Indian market be it about sourcing be it about 16:55 16 minutes, 55 seconds operations be it about uh you know sales and volumes. So we think that we will always be able to remain be able to 17:02 17 minutes, 2 seconds maintain that alpha from the competition no matter what. So uh it is all we are always going to have that upper hand 17:10 17 minutes, 10 seconds competitive advantage from any of the other competitors that are out there in the market. 17:16 17 minutes, 16 seconds Got it. Got it. Thanks a lot. Thanks a lot. 17:20 17 minutes, 20 seconds Thank you. The next question is from the line of Mr. Amit from Edghava and Company. Please go ahead. 17:29 17 minutes, 29 seconds Good afternoon. Yes. Yes. Thank you for the opportunity. 17:37 17 minutes, 37 seconds U there's a stat I'm sorry to interrupt could you come again with your question please my 17:45 17 minutes, 45 seconds question is like what is the current depth level and targeted depth reduction by FI26 and what is the blended cost of depth 17:52 17 minutes, 52 seconds so the the currently the that is in the region of 500 around 550 cr uh and the 17:59 17 minutes, 59 seconds the average cost is about 8 and a half% Sorry, you're not audible. 18:11 18 minutes, 11 seconds Um, Mr. Amit, you're not audible. 18:22 18 minutes, 22 seconds Mr. Rammit, could you come again please? I have to read you. Yes, sir, please. Thank you so much. 18:29 18 minutes, 29 seconds We'll move on to the next participant. 18:32 18 minutes, 32 seconds The next question is from the line of Miss Dolly from Nash Investment Advisory. Please go ahead. 18:41 18 minutes, 41 seconds Uh thank you for the opportunity. I nearly had two questions. So firstly I wanted to understand uh regarding the 18:49 18 minutes, 49 seconds var units. So if we see the realizations have been all-time high not all time maybe good this quarter because of a 18:58 18 minutes, 58 seconds higher raw material prices and everything but our uh volume has reduced so as a company I wanted to understand 19:06 19 minutes, 6 seconds our strategy is it like regarding a company and industry also so are we not willing to take a margin hit because the margins have been sustain uh at this 19:15 19 minutes, 15 seconds volume of the margins are decent so are we not willing to take a margin hit for a higher volumes or the prices are fixed in the industry. 19:26 19 minutes, 26 seconds Uh see this is always a strategic uh you know call that we make uh you know it it really depends on the situation uh 19:35 19 minutes, 35 seconds depends on the customer depends on a lot of factors market conditions um uh you know if if there is a visibility of a 19:43 19 minutes, 43 seconds higher volume we obviously we we try to grab the opportunity by finding out the right solution but u uh if the if the 19:52 19 minutes, 52 seconds volume is not flowing in then there is no point in you know even discussing uh this uh sort of a solution right so it 19:59 19 minutes, 59 seconds it really depends on the situation um we did not uh you know I mean we did not face a situation where 20:07 20 minutes, 7 seconds uh by taking a margin hit or taking a profitability hit would lead to an increase in any big volume so it did not make sense at all 20:16 20 minutes, 16 seconds okay so like if uh you just mentioned also it is important to increase the supply in the so like many players will be coming up maybe two years or three 20:24 20 minutes, 24 seconds years later. So do we think this 24% margins will be sustainable when many supply loses or we can see this going down? 20:34 20 minutes, 34 seconds Yeah. So uh uh the industry is very national the industry is developing uh and uh so uh so it it is very very 20:43 20 minutes, 43 seconds difficult to predict the pricing and the margins at presently over next two uh three four years. uh so uh 20:52 20 minutes, 52 seconds uh so so definitely we expect the margins would be maintained till the supply demand supply gap is there and which we we expect would be uh next 21:00 21 minutes three four years when the 16% uh uh mark is achieved so uh till that there demand decent supply demand supply would be 21:08 21 minutes, 8 seconds there and we expect the margins to be maintained okay lastly that in a in a standalone business so we 21:17 21 minutes, 17 seconds just mentioned that from high 52 to 54 rupees for kg prices. It has dropped uh in recent months. So if we can uh tell 21:25 21 minutes, 25 seconds the percentage gap between if a customer is buying a virgin yarn or a recycled yarn, what would be the uh percentage 21:32 21 minutes, 32 seconds gap last quarter and what would be uh now? 21:36 21 minutes, 36 seconds Uh so I couldn't get what the percentage gap you talking about. So like if I'm if I'm buying virgin yarn and I'm buying 21:44 21 minutes, 44 seconds recycled obviously recycled yarn would be expensive at 53 54 rupees per kg. So how much expensive it was last quarter 21:51 21 minutes, 51 seconds because that's why our uh volumes decreased. 21:54 21 minutes, 54 seconds So uh so basically uh basically the the raw metal prices was increased but because the uh there is a there there 22:02 22 minutes, 2 seconds remains a gap of 10 to 12% in the pricing of the bin and the uh recycled PSR. recycle PSR be sold cheaper by 10 22:09 22 minutes, 9 seconds to uh 12%. So because of the u demand uh demand slowdown uh in the user industry 22:16 22 minutes, 16 seconds we could not uh pass on the increase in the round prices to the uh final consumer and that's why the profit profitability 22:24 22 minutes, 24 seconds was affected. Earlier uh when there was earlier uh earlier uh we would be we were able to pass on the any increase or 22:32 22 minutes, 32 seconds decrease in the ramen prices to the end consumer but this time we could not because of the slowdown in the industry. Okay. Okay. Got it. Got it. Thank you. 22:40 22 minutes, 40 seconds Thank you sir. All the best. Thank you. Thank you. 22:47 22 minutes, 47 seconds Participants. If you wish to ask a question, you may press star and one on your touchtone telephone. 22:54 22 minutes, 54 seconds The next question is from the line of Mr. Pankage Gupta from Ratnabali Equity Private Limited. Please go ahead. 23:01 23 minutes, 1 second Um hi Yash and Gupal G. Uh just one thing on the export side. uh are our 23:09 23 minutes, 9 seconds products our pet flakes or granules are being exempted under this 25% and 50% tariff which has been levied. 23:20 23 minutes, 20 seconds So yes it is till date it is uh so all petroleum product basically all petroleum products are coming under an 23:29 23 minutes, 29 seconds exert 2 uh so this uh any Trump uh uh any tariff we call it Trump tariff sorry 23:36 23 minutes, 36 seconds uh so any Trump tariff is not being uh attracted to any petroleum product till now and uh uh these rpt flakes and rpt 23:45 23 minutes, 45 seconds granol are out of uh this uh terapform position. 23:50 23 minutes, 50 seconds Okay. And second is that there was some regulations on Europe around SUPD and 23:56 23 minutes, 56 seconds there was some media article that only the uh waste which is generated from 24:03 24 minutes, 3 seconds European Union areas will only be counted as 25% uh uh uh towards their 24:12 24 minutes, 12 seconds obligations of 25%. So since we are exporting to Europe any development or any clarity on that front? 24:22 24 minutes, 22 seconds So we we were not exporting anything to Europe. Uh earlier also uh only the export was flakes was happening to 24:29 24 minutes, 29 seconds Europe. uh earlier to this uh SUP uh uh notification where it has been mandated 24:37 24 minutes, 37 seconds that only the European uh reason of waste will be considered as uh mandatory 24:44 24 minutes, 44 seconds uh use of uh recycled plastic. So uh the majorly export of arpet was happening to 24:50 24 minutes, 50 seconds us only. uh this uh uh Europe uh version has impacted uh the export of PT flakes 24:58 24 minutes, 58 seconds from India and that is why uh the prices in India has uh uh gone down for PT bottle. 25:07 25 minutes, 7 seconds Okay. And uh one thing say you have mentioned that the bottle prices went up as high as 5455 but now that has been 25:16 25 minutes, 16 seconds corrected. So at one point of time the uh arped granules was trading at 40 50% premium to the virgin prices. What is the scenario now? 25:28 25 minutes, 28 seconds Yeah. So the premium has come down by about 20%. With the uh decrease in the prices of the uh pet bottle is grab. 25:37 25 minutes, 37 seconds Okay. Okay. So in that case the acceptability of brand to take our pet should increase because the 25:45 25 minutes, 45 seconds differentiation have reduced drastically. 25:48 25 minutes, 48 seconds Yes of course of course it is it is and just last question say all our lines 25:55 25 minutes, 55 seconds in vangal which is 42,000 all of them are now FSSI approved and brand approval 26:02 26 minutes, 2 seconds for all the three lines. Uh so uh two has already got approval from brands as well as FSSAI. For third one we got the 26:10 26 minutes, 10 seconds approval from FSSAI. Uh the brand approval is in process. So it's a matter of time because we have already done all 26:18 26 minutes, 18 seconds the trials. So maybe uh in a week time or 10 days we can get the brand approvals also. 26:25 26 minutes, 25 seconds Okay. Thank you. Thank you. Thank you. 26:30 26 minutes, 30 seconds The next question is from the line of Mr. Amit Kumar Rajput from Red's Capital. Please go ahead. 26:38 26 minutes, 38 seconds Hi. Am I audible? Yes sir. Please go ahead. 26:41 26 minutes, 41 seconds Yes. Thanks for the opportunity and congratulations on these numbers. So my first question regarding is the we are 26:49 26 minutes, 49 seconds predominant dominantly working on a textile industry focus because our our product is more 26:58 26 minutes, 58 seconds predominantly sell on textile for textile industry. So what will be the impact of US tariff on a demand side 27:05 27 minutes, 5 seconds like are you seeing any sort of demand difference in exile? 27:12 27 minutes, 12 seconds Sorry Mr. Vakut uh uh it is a good question uh the demand uh has already been discounted uh because of the US 27:20 27 minutes, 20 seconds tariff and the but exact exact u picture will emerge once the uh things are finalized as of uh the things are 27:27 27 minutes, 27 seconds changing every day. So uh but yes uh the the uh the new orders from the uh uh Americas uh to the uh uh to the uh 27:36 27 minutes, 36 seconds suppliers uh is on halt. So the demand is already affected but going forward we 27:43 27 minutes, 43 seconds see uh uh it will not be impacted much two three factors uh we uh see one is the uh the government of India will make 27:52 27 minutes, 52 seconds some uh incentives to the exporters. to uh what of this uh incentive number one there may not be the the so high tariff 28:00 28 minutes it may it might be the industry is expecting it might be diluted over a period of month or so and number second the government of India will also do 28:07 28 minutes, 7 seconds some package or incentives to the exporters number three uh even if the uh the so high tariff remains there so uh 28:17 28 minutes, 17 seconds America is not having the capacity uh to fulfill the uh the short call which will be created by uh uh from the uh import 28:25 28 minutes, 25 seconds from India. So that will be uh channelneled through the China or Vietnam or Bangladesh. So in that case the whatever the dumping is being 28:32 28 minutes, 32 seconds happened from the these countries to India that will be stopped because we are having the limited capacity and once the capacity is channelneled to the USA so that that metal will not come to 28:40 28 minutes, 40 seconds India. So the the mixture demand will be incre will be improving. So going forward uh temporarily maybe there are 28:47 28 minutes, 47 seconds some uh challenges but uh but in the medium term we we don't see much impact will be there on the Indian economy because of that. 28:57 28 minutes, 57 seconds Okay what will the targeting in 36 or 37? 29:06 29 minutes, 6 seconds Yeah so Mr. Will you please come again your wires were cracked in between. 29:10 29 minutes, 10 seconds Could you come again with your question please sir? There's a lot of disturbance at your end. Yeah. 29:16 29 minutes, 16 seconds Okay. So my second question regarding the revenue mix which we are targeting for FI 26 27 29:24 29 minutes, 24 seconds you are you talking about the product mix uh revenue revenue total revenue I think total 29:31 29 minutes, 31 seconds revenue total revenue mix that would be uh around uh uh uh 50% from the 29:37 29 minutes, 37 seconds subsidiary and the uh sorry uh 35% from the subsidiary and uh uh 65% from the legacy business And what will be the product next? 29:49 29 minutes, 49 seconds So the the product in legacy mainly the uh recycle PSF and yarn is there and for the subsidies the major contributed to the recycle chips A R A R A R A R A R A 29:58 29 minutes, 58 seconds R A R A R A R A R gra okay so uh we are estimating that uh y 30:04 30 minutes, 4 seconds will be major contributor towards our uh in 26. 30:11 30 minutes, 11 seconds So, so the the major contributes would remain the recycled PSF not the yan yan we are having the small capacity. 30:20 30 minutes, 20 seconds Okay. 30:21 30 minutes, 21 seconds Okay. Thank you sir. That's all from message and wish you all the best for your future. Thank you. Thank you. Thank you. 30:29 30 minutes, 29 seconds Thank you. 30:31 30 minutes, 31 seconds The next question is from the line of Mr. Bhavya Gandhi from Dalat and Bacha Stock Broking Private Limited. Please go ahead. 30:39 30 minutes, 39 seconds Yeah. Hi, thanks for the opportunity. So my first question was regarding uh the EPR uh fulfillment that they have to do 30:46 30 minutes, 46 seconds for FI27 that also they can roll it over to plus 3 years or from starting from FI26 uh the addition will be 3 years 3 30:55 30 minutes, 55 seconds years addition from FI26. So basically the draft notification issued on 3rd of uh June by MOF is allowing only 31:04 31 minutes, 4 seconds carryover for the uh shortfall of the first year uh the year uh we are in uh 2526. 31:11 31 minutes, 11 seconds The remaining uh target for next years are intact. They have not been allowed to carry over and even this carryover 31:18 31 minutes, 18 seconds will be over and above uh the target for the next year. So let's say uh in 26 27 you have a mandate of 40%. So if you uh 31:28 31 minutes, 28 seconds uh carry over any of your shortfall of 2526 to 2627 it will be over and above 40%. 31:37 31 minutes, 37 seconds Okay. 31:37 31 minutes, 37 seconds Got it. So right so FI 27 and 28 they cannot roll it over uh for further years. In fact in fact they'll have to 31:44 31 minutes, 44 seconds fulfill for FI26 as well in 27 if they fall short in they have been allowed just to looking that the approved capacity is not there. 31:55 31 minutes, 55 seconds That is why uh they are just giving a headwind that okay if you are having any shortfall because of nonavvailability of the material it can be carried forward. 32:04 32 minutes, 4 seconds So we have presented the case uh and I hope uh even uh for the first year itself there will be a cap. 32:14 32 minutes, 14 seconds Got it. Got it. And sir is it possible to quantify what will be the total RP capacity across the industry at this 32:21 32 minutes, 21 seconds point in time and what is the demand? uh because now the first queue is already done. So some demand assessment. 32:29 32 minutes, 29 seconds So basically looking to the total consumption of uh 1.2 million tons of uh PT in India uh for uh packaging 32:38 32 minutes, 38 seconds especially in the bottles uh the food packaging uh the demand would should be 3.6 uh uh lakh ton uh for the first year 32:48 32 minutes, 48 seconds itself because you have so I think the demand must be 3.6 this weapon but if we uh if we exclude the uh unorganized sector so the the roughly 32:57 32 minutes, 57 seconds the demand is around 200,000 ton for this 2526 okay and versus that capacity what would 33:04 33 minutes, 4 seconds be the RPD capacity total uh across players today the capacity is around uh 1.5 lakh 33:14 33 minutes, 14 seconds okay fair enough and s is it possible to quantify the 125 crx uh how are we planning to fund that What is the cash 33:22 33 minutes, 22 seconds flow status at this point in time? Uh are we going to take any debt for that 125 incremental capex which is uh there in Warangal? 33:31 33 minutes, 31 seconds No. So uh we are not uh taking any debt for this 125. It is entirely from the intern approval and the cash is available with the company including 33:39 33 minutes, 39 seconds this conversion of war from promoters recently done four cr we got it. 33:46 33 minutes, 46 seconds Okay. Answer what would be the peak level of debt for FI27 and 28 if you can provide. 33:53 33 minutes, 53 seconds Uh we are looking around 700 cr of the debt peak level. 33:58 33 minutes, 58 seconds Okay, fair enough sir. That's it from Mah. Thank you so much. Thank you so much sir. Thank you. 34:05 34 minutes, 5 seconds The next question is from the line of Mr. Jes from Investment Advisory. Please go ahead. 34:13 34 minutes, 13 seconds Uh yeah uh thanks for the opportunity. 34:15 34 minutes, 15 seconds Uh by the way I have an individual investor. Uh so uh sir I just wanted to understand 34:24 34 minutes, 24 seconds uh what could be the uh next quarter guidance regarding revenue and margins. 34:33 34 minutes, 33 seconds So uh instead of the quarter quarter on quarter uh we are uh having the uh guidance uh for entire 25 26 uh so the 34:43 34 minutes, 43 seconds the guidance is about uh uh looking to the present circumstances and the some uncertainty prevailing globally over the 34:50 34 minutes, 50 seconds tariff and all those things we we we are uh confident in surpassing the uh revenue and uh the bottom line numbers 34:57 34 minutes, 57 seconds of the 24 25 but certainly if the situation improves and the things look up we would do better than that in this year. 35:07 35 minutes, 7 seconds Any particular number that you would like to put? 35:11 35 minutes, 11 seconds Yeah. So for for this financial year as of now we are giving the guidance of around 1,500 cr. 35:18 35 minutes, 18 seconds Uh sorry your voice I didn't get it. Can you please say that again? 35:21 35 minutes, 21 seconds So so as of now we are giving the guidance of what 1500 cr uh uh uh in view of the present circumstances and the situation prevailing. 35:33 35 minutes, 33 seconds Okay. And uh any improvements on margin level? 35:38 35 minutes, 38 seconds Yes. So the margins we we we are just uh uh guiding that we would be surpassing the uh the uh revenue and the bottom 35:46 35 minutes, 46 seconds line numbers which we have achieved in 2425. Okay. Yeah. Thank you. 35:55 35 minutes, 55 seconds Thank you. 35:57 35 minutes, 57 seconds The next question is from the line of Mr. Deepak Amera from IG India. Please go ahead. 36:04 36 minutes, 4 seconds Thanks for the opportunity. 36:06 36 minutes, 6 seconds I have two questions. One is that um as of now we are saying the margin got impacted because of the 36:15 36 minutes, 15 seconds mansoon lower demand on the food grade side by the FMCG or the uh uh food 36:24 36 minutes, 24 seconds companies. Now um if that is the situation today means when the capacity 36:30 36 minutes, 30 seconds is not there across industry and we couldn't um keep our margin intact uh 36:37 36 minutes, 37 seconds then what will happen after the capacity is there across industry means this uh uh how um why we are confident that 36:46 36 minutes, 46 seconds margin will be maintained later on when we can't maintain today in this quarter that was the first so it is not it is So we we the margins 36:56 36 minutes, 56 seconds were impacted largely in our legacy business of the RPSF but in case of RP granules or the subsidiary other business of subsidy we have maintained 37:04 37 minutes, 4 seconds the margins uh the margin the margins is int margins are intact. So uh we we uh with the with the uh increase in volumes 37:14 37 minutes, 14 seconds and the uh opt uh the the same level of margins will be maintained and there is no challenge uh as of now in maintaining the margins in our uh subary businesses. 37:26 37 minutes, 26 seconds Got it. So food grade there is no issue uh on the margin side. 37:31 37 minutes, 31 seconds Got it. Second question is if the capacity across industry will be so uh 37:38 37 minutes, 38 seconds low compared to demand then what's our plan after this uh December capacity 37:45 37 minutes, 45 seconds means um as a next phase of expansion because looking this is just the beginning of the um capac uh uh the 37:55 37 minutes, 55 seconds requirement on the recycled site so on the food grades. So after this December capacity what's the plan for uh further expansion? 38:05 38 minutes, 5 seconds So we have already we have already announced the uh uh the capacity addition of uh by about 90,000 ton uh 38:12 38 minutes, 12 seconds including this farangal uh expansion brownfield expansion. So the brownfield expansion uh it will be the mix of brownfield and green field. So total 90,000 capacity will be added by 27. 38:27 38 minutes, 27 seconds Yeah, I got it. But my my point is it is too low compared to the requirement and uh demand and the demand is also growing 38:36 38 minutes, 36 seconds and uh there will be carry forward and then subsequently also the capacity requirement will be very high. So are we 38:43 38 minutes, 43 seconds planning for the next phase of expansion post this capacity additions? 38:49 38 minutes, 49 seconds Yes. So post this 90,000 capacity additions making a total capacity 132,000 t of the grain from the presently 42,000 tons we would certainly 38:58 38 minutes, 58 seconds be uh uh making some uh further capacity expenses but the plan is to be final uh will be finalized after this addition of 39:05 39 minutes, 5 seconds 90,000 tons and uh apart from us other players are also adding the capacity so we we we don't expect key uh uh uh there 39:13 39 minutes, 13 seconds there will be a much shortage of the uh uh demand and supply gap there will not be a very big gap going forward. 39:24 39 minutes, 24 seconds Yeah, got it. But the other players are not proven yet. So we have early more advantage. We can capitalize. That was only point. Yeah, 39:32 39 minutes, 32 seconds of course. But you see capacity addition requires a uh two years uh two to two and a half years time. So uh you plan the capacity now and it takes about two 39:41 39 minutes, 41 seconds years time uh in on grounding the yeah on grounding the capacity. So, so but uh uh uh but already we have planned for the 90,000 39:49 39 minutes, 49 seconds ton and so in the in the midst of the 90,000 t we will decide for the further uh capex and for the capacity addition. 39:57 39 minutes, 57 seconds Oh thank you thanks for the opportunity best to see thank you the next question is from the line of 40:05 40 minutes, 5 seconds Mr. Aryan from Investment Managers please go ahead. 40:12 40 minutes, 12 seconds Uh hi sir uh maybe we follow up on the last question. Can you maybe quantify the kind of supply that we will see in 40:20 40 minutes, 20 seconds the next two years from these in especially in our bed from some of these new guys and and other than say our 40:28 40 minutes, 28 seconds first advantage uh what's the kind of uh mode we have going ahead? Uh thanks. 40:39 40 minutes, 39 seconds Uh yes you have to answer. 40:43 40 minutes, 43 seconds Uh sorry could you please repeat your question? 40:46 40 minutes, 46 seconds Uh yeah. So so basically I want you to maybe quantify the kind of capacity that we are going to see in the next two 40:53 40 minutes, 53 seconds years in our pet uh from some of these new guys probably know two three big capacities coming in and maybe other 41:02 41 minutes, 2 seconds than more advantage uh what's maybe are our going ahead. 41:08 41 minutes, 8 seconds Uh surely surely so see uh it's uh very difficult to uh tell you. So so I I I'll give you an example. Uh when we were 41:16 41 minutes, 16 seconds back in uh December 2023 when the regulations of uh you know PWM regulations were in place and the the 41:25 41 minutes, 25 seconds application was to start from 25 onwards. In 2023 the announced capacity of ARPED in India the announcements were 41:32 41 minutes, 32 seconds around 300,000 metric tons. But the reality is that we are already in 25th end and the real capacity is on ground 41:38 41 minutes, 38 seconds is at 180 right. So so the the problem is that the announcements are made but are the real um you know uh action 41:47 41 minutes, 47 seconds happening is the real action happening on the ground there is a big mismatch always in that and there is no way you can predict because everyone makes announcements but but the real uh you 41:55 41 minutes, 55 seconds know implementation uh is is a much different story altogether. Um you know people back off uh later. So as of today 42:03 42 minutes, 3 seconds the announcements that we are currently hearing or currently are currently out there in the market we're hing a capacity of um 3 and a half lakh tons by 42:10 42 minutes, 10 seconds in the next 2 years. Um how much of that will be actually uh on ground is is is is still a question mark. 42:19 42 minutes, 19 seconds Sure. Yes. Thanks. Thank you. 42:24 42 minutes, 24 seconds The next question is from the line of Mr. Mayul from 40 cents. Please go ahead. 42:31 42 minutes, 31 seconds Hello sir. Thank you so much for the opportunity. Uh sir, if we were in a non-tariff scenario right now, uh what 42:39 42 minutes, 39 seconds would be the which was which quarter would be the best quarter in terms of demand and supply for the industry? 42:48 42 minutes, 48 seconds Yes. Yeah, please. Please go on. 42:52 42 minutes, 52 seconds Then please which sector you were talking about? The recycling sector. 42:59 42 minutes, 59 seconds Uh see we have we have two verticals. 43:01 43 minutes, 1 second One is textiles and the other is packaging where we send our applications in. So both of them are very different from each other. Uh packaging for packaging usually the summer season is 43:10 43 minutes, 10 seconds the best. Um though this uh summer was really badly affected due to the early onset of monsoons in India. So for 43:18 43 minutes, 18 seconds beverages for beverages especially and packaging for us the the the uh summer season uh is usually the best demand uh 43:26 43 minutes, 26 seconds quarter. uh in case of textiles uh it really varies. The festive season you know generally I think quarter 2 quarter 3 usually remain the better ones. 43:37 43 minutes, 37 seconds Okay. And and uh so what you stated about the packaging uh vertical it seems 43:44 43 minutes, 44 seconds that Q1 is the best quarters and how are Q2 Q3 Q4? 43:49 43 minutes, 49 seconds I mean in scenario so see it's a it's a fluctuating demand. 43:55 43 minutes, 55 seconds It's very difficult to comment like that but yes obviously you know in certainly so South India is is a much more consistent uh you know industry in terms 44:04 44 minutes, 4 seconds of volume uh in beverages and FMCG uh throughout the year because we don't have winters but certainly in north in 44:12 44 minutes, 12 seconds the north of India um in during the winter seasons the the volumes go down so uh they they go down by about 20 30 44:19 44 minutes, 19 seconds to 40% in the in the uh winter half of the year but As far as the RFPs are concerned, as for our our supply is concerned, we are 44:28 44 minutes, 28 seconds already having the clear visibility till uh for the financial year uh uh though it was slightly impacted in uh Q1 because of the reasons already. 44:40 44 minutes, 40 seconds So uh but uh from Q2 and Q3 and Q4 we are we are we are already having the decent content with us. 44:46 44 minutes, 46 seconds Okay. And so my second question is how much of our revenues is exports? 44:52 44 minutes, 52 seconds So the the presently we presently in the last quarter we got the 12% of the revenue from the exports. Okay. And what was it the previous year? 45:01 45 minutes, 1 second It was 9%. 45:03 45 minutes, 3 seconds 9%. And any estimate you can give for this year? I mean barring the non uh uncertainty of the tariff. 45:13 45 minutes, 13 seconds Yeah. So so barring that we are expecting we would be making around 15 to 20% of our total revenue from exports. 45:21 45 minutes, 21 seconds Right sir? Okay, thank you so much sir and all the best. Thank you. 45:25 45 minutes, 25 seconds Thank you. The next question is from the line of Miss Dolly from Neverhare Investment Advisory. Please go ahead. 45:34 45 minutes, 34 seconds Uh, hi sir. Thank you for the followup. 45:36 45 minutes, 36 seconds I just had one question. Uh, so this was regarding ETR uh penalty demanded allowed by the government. So like if it 45:44 45 minutes, 44 seconds would be like possible for you to quantify the calculation like uh due to high difference between like version and recycle chips in the water. So I wanted 45:53 45 minutes, 53 seconds to like was will it be ever lucrative for the packaging companies to actually use 100% version chips and the pay 46:01 46 minutes, 1 second penalty rather than uh using 30% recycle chips in costing terms if you can quantify calculation. So Dolly uh here 46:10 46 minutes, 10 seconds here we would like to uh bring your attention towards uh the penalty and consequences of the penalty. So penalty is not the forego of your liabilities. 46:20 46 minutes, 20 seconds Penalty is because you have not done what has been asked by the regulation. 46:26 46 minutes, 26 seconds Beyond this there will be even if you are not uh completing uh your mandatory targets of using recycled plastic there 46:35 46 minutes, 35 seconds will be environment compensation cases that may be uh taken by the courts uh 46:42 46 minutes, 42 seconds taken to the courts and uh even up to uh the unit closure may happen because if you are not completing your mandate 46:49 46 minutes, 49 seconds means you are still damaging the environment uh even you have paid the penalty but uh the damage to the environment has 46:56 46 minutes, 56 seconds So then uh there will be environment compensation cases also going on. 47:02 47 minutes, 2 seconds So in in short uh the the paying the paying the penalty is not absolving uh the the uh packaging industry from the 47:09 47 minutes, 9 seconds consequences of environmental damages it will remain there. 47:14 47 minutes, 14 seconds Okay. Okay. Got it. And and this uh just one question of this export market that we are looking to which countries are we majorly targeting here for ARP and for RPS separately. 47:27 47 minutes, 27 seconds So mainly we are we are exporting to uh Europe, we are exporting to Middle East, we are exporting to US also some uh some 47:35 47 minutes, 35 seconds quantities to US and we are also exporting to uh Nepal and the nearby countries. 47:42 47 minutes, 42 seconds Okay. Thank you. 47:45 47 minutes, 45 seconds Thank you ladies and gentlemen. I would now like to hand the conference over to the management for closing comments. 47:55 47 minutes, 55 seconds Yeah, thank you. Thank you uh uh Manish. 47:58 47 minutes, 58 seconds Thank you all the participants for the uh for joining us on the call. Thanks a lot. Bye-bye. 48:05 48 minutes, 5 seconds Thank you sir. On behalf of Antique Stock Doing Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.