Tata Chemicals Limited — Q4 FY26

Tata Chemicals Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=Yp8UTbXTKfg Published: 9 days ago

0:01 1 second Good evening ladies and gentlemen and welcome to the Q4 and FY26 earnings conference call of Tata Chemicals Limited. Please note that this 0:10 10 seconds conference is being recorded. As a reminder, all participant lines will be in the listenonly mode and there will be an opportunity for you to ask questions 0:19 19 seconds after the presentation concludes. Should you need assistance during this conference, please signal an operator by pressing star then zero on your touchstone phone. 0:29 29 seconds We have with us today Ar Mukundan, managing director and CEO and Nandkumar 0:36 36 seconds Kirum Kirumalai, chief financial officer of Tata Chemicals Limited. 0:42 42 seconds Before we begin, I would like to mention that some of the statements made in today's discussion may be forward-looking in nature and may involve risks and uncertainties. 0:53 53 seconds I now invite Ar Mukundan to begin proceedings of the call. 0:58 58 seconds Thank you. Thank you Darwin. Uh good evening and welcome everyone to our cube 4 FI26 earnings call and I'll start the discussion with brief overview of 1:06 1 minute, 6 seconds industry and then our operational highlights across business and geographies. 1:10 1 minute, 10 seconds Uh the demand scenario across geographies global demand is expected to be broadly flat in the near term constrained by weak macroeconomic 1:19 1 minute, 19 seconds conditions and more specifically amongst all our products just the sodash excess capacity. 1:25 1 minute, 25 seconds The recent Middle East conflict has driven up the energy and the raw material prices increasing production 1:31 1 minute, 31 seconds cost across various parts of the world especially other than US. Also, it has ship increased our shipping and transportation expenses. 1:42 1 minute, 42 seconds Despite these pressures, I I think there is no clear evidence as of now at present of demand erosion. But however, 1:49 1 minute, 49 seconds a prolonged conflict could begin to wain on demand. India continues to exhibit relatively robust demand growth with 1:57 1 minute, 57 seconds higher capacity utilization across all sectors. China and US are witnessing flat [clears throat] demand mainly in US 2:04 2 minutes, 4 seconds is due to the reduced offtake in the container glass segment. The geopolitical risk and ongoing tariff uncertainties continue to cloud the 2:13 2 minutes, 13 seconds global demand visibility and this tariff uncertainty is mainly with respect to US China 2:20 2 minutes, 20 seconds tariff issues. While the pace of economic recovery is expected to be slow in the year ahead, we do believe solar glass and lithium carbonate are expected 2:29 2 minutes, 29 seconds to continue to drive demand especially since the world is expected it would certainly pivot towards uh more uh 2:38 2 minutes, 38 seconds renewable and uh more natural uh energy sources and soda globally would be 2:45 2 minutes, 45 seconds gaining from this uh growth in this segment. 2:49 2 minutes, 49 seconds In terms of supply scenario across geographies, u China uh inventories remain elevated. The market sentiment softened slightly during the quarter Q4. 3:00 3 minutes In addition to that, I think while several things happened, the Chinese units did begin to slow down and they 3:08 3 minutes, 8 seconds carry out their maintenance work. one unit which is about 800,000 poo blaze plant uh sort of had an expiration of 3:17 3 minutes, 17 seconds production permit and it has started to do maintenance work. We also know in US one of the producers with 1.36 million 3:25 3 minutes, 25 seconds ton capacity around has also moballed this plant. Solv as we know already had 3:32 3 minutes, 32 seconds done about 180,000 tons of uh reduced production from their Spanish plant and this process is only going to help us to balance the demand supply equation. 3:45 3 minutes, 45 seconds The in terms of pricing u while in the month of March there were certain corrections what did happen towards the 3:53 3 minutes, 53 seconds end of uh March the prices saw a slight increase to compensate for energy and raw material prices and higher shipping cost. US domestic prices remained flat. 4:04 4 minutes, 4 seconds China's spot export offers remained steady between 150 and 170 and this resulted in Southeast Asia prices 4:13 4 minutes, 13 seconds remaining unreinerative especially for the US producers. 4:16 4 minutes, 16 seconds Overall pricing is expected to remain rangebound and react to mainly the energy cost 4:24 4 minutes, 24 seconds increases which some of the producers may pass on. 4:29 4 minutes, 29 seconds Now I will move to operational highlights. 4:33 4 minutes, 33 seconds In terms of the consolidated performance, the revenue was down by 2% at 3438 crores compared to previous 4:40 4 minutes, 40 seconds year. It was offset the lower exports from US was offset by higher volumes in India. Aida was at 274 crores compared 4:50 4 minutes, 50 seconds to 327 Q4 mainly on account of subdued prices across all geographies. 4:58 4 minutes, 58 seconds An exceptional charge of 1,837 crores is provided on account of impairment of goodwill in the US and rupees 159 crores 5:05 5 minutes, 5 seconds of deferred tax write off. This tax write off is expected to be reviewed once the unit starts to uh making 5:14 5 minutes, 14 seconds profits. Profit after tax before exceptional item was -279 crores compared to -12 last year. Net debt 5:22 5 minutes, 22 seconds without leases as on March 31st stood at 5,961 cr. 5:29 5 minutes, 29 seconds In terms of standalone, the revenue from operations stood at 1,254 crores, up 3% compared to previous uh year same 5:36 5 minutes, 36 seconds quarter. EIA at 216 was down by 6% due to lower realization and profit after tax from continuing operations was 48 crows down 51% due from Q4 of last year. 5:50 5 minutes, 50 seconds During the year during the quarter we acquired Noah Bay Singapore. This acquisition was completed on 19th March 2026. 5:58 5 minutes, 58 seconds In addition to this 50 kilot tons of electric calena soda ash in Kenya was operationalized. 6:05 6 minutes, 5 seconds Unit wise in India this non soda in India Gujarat facility achieved 1 million tons of soda ash production. The 6:13 6 minutes, 13 seconds performance is higher compared to previous year. However, price drop was off price drop was offset by higher volume due to mainly due to higher 6:21 6 minutes, 21 seconds volumes. Drop in Eida is due to increase in fixed cost compared to previous year. 6:26 6 minutes, 26 seconds US export volumes were lower and Southeast Asia market realizations were underminated and I spoke about the impairment charge in the defer tax writeoff recognized in the books. 6:38 6 minutes, 38 seconds UK had lower revenue due to lower volumes partly offset by pricing. PBT is higher than previous year. Increase in 6:45 6 minutes, 45 seconds volumes in Kenya was partially offsetting the lower realization. 6:50 6 minutes, 50 seconds Singapore acquisition as I mentioned uh was completed during the quarter. 6:54 6 minutes, 54 seconds Rallies saw an overall revenue growth of 6% volume growth of 5% and price growth of 1% driven by growth in both cropare 7:02 7 minutes, 2 seconds and seed business. Overall when you look at the context of uh strategy the non-sordash revenue grew 14% from 6,118 7:12 7 minutes, 12 seconds crores in FY25 to 6,946 cr in FI26. 7:18 7 minutes, 18 seconds This is in line with company's focus to grow non-yclical business and non-sodash business. In conclusion, geopolitical 7:26 7 minutes, 26 seconds developments since in West Asia since late February have led to disruption in supply chain. These have resulted in 7:33 7 minutes, 33 seconds higher costs. This impact has been varied across geographies. However, overall sales performance remains steady. 7:40 7 minutes, 40 seconds Management is focused on reinforcing supply chain planning, maintaining cost discipline, improving operational agility to address near-term disruptions. 7:49 7 minutes, 49 seconds Our priorities remain firmly aligned to protecting margin, preserving cash flows, and maintaining balance sheet strength. We also continue to adopt a 7:58 7 minutes, 58 seconds very disciplined approach to capital allocation and we want to ensure resilience through this current phase of uh cycle. 8:07 8 minutes, 7 seconds We would be focusing on growing nonash revenue in line with long-term strategic objectives. With that, I close my comments and hand it back to moderator to open for Q&A. 8:18 8 minutes, 18 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone 8:27 8 minutes, 27 seconds telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to please use handsets while 8:36 8 minutes, 36 seconds asking a question and to please limit themselves to two questions per participant. You may rejoin the queue in case you need to ask further questions. 8:46 8 minutes, 46 seconds Ladies and gentlemen, we will now wait for a moment while the question queue assembles. 8:51 8 minutes, 51 seconds Our first question comes from the line of Sorup Jen from HSBC. Please go ahead. 9:02 9 minutes, 2 seconds Hi. Uh, thank you for the opportunity. 9:04 9 minutes, 4 seconds Uh, can you please explain expand a bit on the disruptions that you're noticing because of the Middle East conflict in particular? How is it impacting your raw 9:13 9 minutes, 13 seconds material sourcing across your regions and any outlook you would have that if the contract stretches from here can it materally impact your availability to procure your raw material? 9:25 9 minutes, 25 seconds Uh thank you Savv. I think firstly I would say that uh US operations remains largely insulated from this uh disruptions. 9:34 9 minutes, 34 seconds uh the uh UK operation also largely is insulated because uh the key element for them is uh uh the uh brine which they 9:43 9 minutes, 43 seconds from the uh we from their own uh brine brine wells. In addition to that they 9:49 9 minutes, 49 seconds did see some increase in spike in the unhedged portion of the gas but this is only a price issue not an availability 9:57 9 minutes, 57 seconds issue and part of that price increase we have also informed the customers and uh have also made the requisite changes 10:04 10 minutes, 4 seconds there with respect to India uh India thankfully has been working with 10:12 10 minutes, 12 seconds imported coal mainly from Indonesia which is not disrupted it's continuing as we speak of course there's a moment in pricing for which we have taken a cost for which we taken price changes. 10:21 10 minutes, 21 seconds Our biggest issue in India has been mainly the availability of uh imported limestone while we have adequate stock we've also moved to blended domestic and 10:30 10 minutes, 30 seconds imported limestone which uh is enabling us to uh run the unit well and at least we do we don't see any big issues for 10:39 10 minutes, 39 seconds the next 3 months. uh I would say amongst all the units the one which probably we need to watch closely is the Kenyan unit which depends on HFO as of 10:48 10 minutes, 48 seconds now I think they've got about 40 days of supply we are monitoring this closely and the HFO comes from Middle East and 10:56 10 minutes, 56 seconds uh we need to ensure that we have alternate sources which of about which we're working through through the system so all in all I think except for one key 11:05 11 minutes, 5 seconds element which is SFO which is bought for Kenya all of the units are absolutely safe and sound from the input 11:13 11 minutes, 13 seconds disruptions. Uh the big issue for us which we are trying to monitor is while we have passed on the cost increases to customers. Would any of our customers be 11:22 11 minutes, 22 seconds under pressure in terms of uh the impact from this crisis up to now we have not seen it in the marketplace but we are we remain completely watchful on account. 11:32 11 minutes, 32 seconds Understood. Do you also have any ammonia needs in our domestic India manufacturing? 11:39 11 minutes, 39 seconds Yeah, I think uh there has been a notification on ammonia. I'm glad you brought that up because while it is a very small quantity, it is nonetheless a 11:46 11 minutes, 46 seconds quantity which is uh which is cycled through in terms of uh you know one tanker for every 15 days or so. And uh 11:54 11 minutes, 54 seconds up to now we have adequate supply. We are able to source from the market but I think the uh fertilizer units have been advised not to supply to non-fertilizer 12:03 12 minutes, 3 seconds users. We've written to government that this order is uh going to impact all of us. As of now, we are fine but I think we're closely monitoring it and we're 12:11 12 minutes, 11 seconds also sure government will look into this. it is uh it's about 1% of the entire ammonia consumption in the 12:18 12 minutes, 18 seconds country and hence should not disrupt the fertilizer uh for the farmers but at the same time it would if this were made 12:25 12 minutes, 25 seconds available to the industry uh as freely as it was before I think we wouldn't have any issues with respect to uh any of our production challenge in India 12:34 12 minutes, 34 seconds understood that is very helpful a related question will be that you talked about cost inflation you're noticing in different production facilities across 12:43 12 minutes, 43 seconds the regions. Uh can you also give us some sense what kind of price hikes you would have taken in different regions and also whether all of the raw material 12:52 12 minutes, 52 seconds cost that you would have been rotating now does it also need more price hikes or everything is factored in 13:00 13 minutes in terms of the the uh price impact I think the cost impact if you look at us it's mainly in the diesel which is used 13:08 13 minutes, 8 seconds in the diesel vehicles which we run in the plant uh for the mobile units which are there and overall in the cost 13:16 13 minutes, 16 seconds structure it is not a big number and uh we are more or less hedged in terms of our gas so I don't think there's going to be a big issue there what we are 13:23 13 minutes, 23 seconds certainly doing is the shipping costs have increased so to our customers who to when when we ship them these are being passed on to customer in a very 13:31 13 minutes, 31 seconds transparent manner we are not uh doing uh beyond what is a cost increase in terms of UK certainly we have informed 13:38 13 minutes, 38 seconds the customers but the issue in UK why I'm not commenting is uh our unhedged portion actually moves on a daily basis. 13:46 13 minutes, 46 seconds So if I pick a day where uh the spike is high then then it will look like the position is uncovered and we are not 13:53 13 minutes, 53 seconds recovering fully. If I pick another day where it is so I think we would rather wait for a month or so to say whether the costing price increase is fully 14:02 14 minutes, 2 seconds covering the cost or not. as of now on a weighted average basis it does cover but we'll know only at the end of uh as as we move along in in the the direction 14:11 14 minutes, 11 seconds move move forward as far as India is concerned again we've covered the cost increases fully whatever we had in terms of uh the energy cost as well as the 14:20 14 minutes, 20 seconds additional cost to get the uh transport the material from uh the markets in both in Indonesia and in Middle East for 14:27 14 minutes, 27 seconds limestone and coal respectively. So all in all in all places we have been able to pass on the increase. Uh Kenya too has done the same but in Kenya it's not 14:36 14 minutes, 36 seconds a price issue it's a availability issue which we are working through and as I mentioned uh we are we are hopeful the next shipment will enable us to go beyond the 45day cover we have today. 14:48 14 minutes, 48 seconds Understood. Okay. Sure. uh a related question would be that um you know uh if the RM costs kind of you know don't 14:56 14 minutes, 56 seconds really kind of increase from here is it a safe assumption that the margins that we delivered in forio that those are the bottom margins and if the cost don't 15:05 15 minutes, 5 seconds increase materially from here there's a possibility that we could do better on the profitability or you still would you know believe some sort of margin 15:12 15 minutes, 12 seconds pressure could sustain in in the one Q as well so I can only speak about what we have witnessed up to now and this is 15:21 15 minutes, 21 seconds something which which you know could change in future. I think we are fully covered and as far as the numbers are concerned I think they should reflect 15:29 15 minutes, 29 seconds what we've seen uh going forward if something uh happens dramatic that we cannot 15:36 15 minutes, 36 seconds engage we we'll have to probably come to uh and uh talk to all the uh analysts and investors but as of now 15:45 15 minutes, 45 seconds we are fully covered uh what we are watching is the Kenyan situation understood okay and are are you also 15:53 15 minutes, 53 seconds noticing any inclination from your customers to try to ask for to shift away from the short-term contracts into 16:00 16 minutes the mid-term contracts. So dash any that kind of excitement are you noticing any of those signs? 16:07 16 minutes, 7 seconds Uh all I can say is that customers have become now more sensitive to domestic sourcing because they have realized the difficulty of uh depending on imports. 16:16 16 minutes, 16 seconds So we are seeing witnessing I I can say especially in India those who were importing have certainly have made uh uh 16:25 16 minutes, 25 seconds requests to us to increase the allocation because their view is that going forward they would like to reduce the dependency on imports while they 16:34 16 minutes, 34 seconds will maintain a share of imports versus domestic supply. Uh the the the realization that they would not want to take a risk on the imported material is is a positive on the market front. Sure. 16:47 16 minutes, 47 seconds Thank you so much and all the best. I joined that. 16:52 16 minutes, 52 seconds Thank you. Ladies and gentlemen, you are requested to please restrict yourselves to two questions only. You may rejoin the queue if you have any further questions. 17:02 17 minutes, 2 seconds Our next question comes from the line of Sumat Kumar from Motila Los. Please go ahead. 17:07 17 minutes, 7 seconds Yeah. Hi. Uh my question is for us. Uh sequentially uh we have seen a improvement in uh Victor. Okay. from 17:15 17 minutes, 15 seconds loss of profit. So can we can we say this is because of you have cut down your export where you you are making 17:22 17 minutes, 22 seconds losses and also if it is it is so what is the mix of domestic sales for us and 17:30 17 minutes, 30 seconds export uh you're you're right I think broadly you would you you you would uh you're 17:38 17 minutes, 38 seconds attributing to not not selling in the unreinerative markets which today for us is mainly Southeast Asia That is what 17:46 17 minutes, 46 seconds has happened during the during the quarter and uh regarding uh fuel cost uh in this 17:56 17 minutes, 56 seconds quarter to what extent uh we have an impact uh because of higher fuel cost in the market across geography. 18:06 18 minutes, 6 seconds No in terms of cost I think we we have no no impact at all. I think because usually we we have different levels of 18:14 18 minutes, 14 seconds stock and different positions of hedging. For example, in India, we usually carry three to four months of stock and I think that uh that more or 18:23 18 minutes, 23 seconds less if would would help us to work through and I think if at all any increases will come through going 18:30 18 minutes, 30 seconds forward. So we we do know the coming shipments are going to be expensive. So we have actually spoken to customers and taken the corrective actions there. As 18:38 18 minutes, 38 seconds far as US is concerned as I mentioned that the gas is fully hedged and I think we are keeping a watch on those prices. 18:46 18 minutes, 46 seconds Our biggest issue continues to be in Kenya where I think while we have a cover for 45 days beyond that cover I think we have to buy at the market rate 18:54 18 minutes, 54 seconds and the market rate has uh actually shot up uh quite a bit in terms of going up almost to 50 to 60%. which we will which 19:02 19 minutes, 2 seconds we are engaged with customers and have informed them and uh we are dealing with this in a very transparent basis. 19:10 19 minutes, 10 seconds Okay, thank you sir. Thank you. 19:16 19 minutes, 16 seconds Our next question comes from the line of Vive Rajamani from Morgan Stanley. Please go ahead. 19:25 19 minutes, 25 seconds Um hi sir, thank you so much for the presentation. 19:29 19 minutes, 29 seconds uh you did mention that you are seeing a few closures or some capacity taking maintenances. You did give examples of a 19:38 19 minutes, 38 seconds capacity in the US and in China. Uh just with respect to that, could you just talk about how soda ash flows have 19:45 19 minutes, 45 seconds started to change uh if they have because of the conflict and if you could see some relief with respect to you know 19:53 19 minutes, 53 seconds some of the regions potentially slowing their exports or you could see some relief in terms of pricing which which you were obviously suffering because 20:01 20 minutes, 1 second there was a lot of dumping that was happening. So are you starting to see some sort of relief because of these flows or do you expect that to kind of 20:08 20 minutes, 8 seconds happen over the next uh couple of quarters? 20:12 20 minutes, 12 seconds See I think uh what we are certainly seeing is the imports have slowed down. 20:16 20 minutes, 16 seconds they've become almost half of what it used to be pre-conlict and uh that's a uh net effect the result of uh uh the 20:24 20 minutes, 24 seconds slowing down of uh exports which Iran was doing as well as the Turkey which was coming through the uh Red Sea I 20:33 20 minutes, 33 seconds think those two have certainly slowed also the movement from other exporters have reduced during the period because I'm talking about the first month of 20:41 20 minutes, 41 seconds April of what we are but this trend is likely to continue in our So certainly in India we are seeing an 20:48 20 minutes, 48 seconds impact of uh and also customers are also very clearly wanting to have a higher share of domestic supplies. I think 20:56 20 minutes, 56 seconds that's all we can say uh in terms of uh u any other pressure point in terms of uh 21:04 21 minutes, 4 seconds u prices coming down it's actually going up because shipping costs have increased. So the landed cost in India 21:12 21 minutes, 12 seconds has gone up because of the shipping cost. 21:17 21 minutes, 17 seconds Um sure sir that's clear. Uh but it would also be fair to say that the increase is purely a cost of an exercise. So margins will potentially 21:26 21 minutes, 26 seconds have to uh wait for a bit longer to kind of benefit. Would that be a fair statement? 21:33 21 minutes, 33 seconds It would vary between market to market but it's a fair statement. Also there's a there's a play which will happen because of rupee depreciation that also 21:41 21 minutes, 41 seconds brings in a natural protection for the Indian market. So you'll see all the all these effects play out. So uh we we do 21:49 21 minutes, 49 seconds believe that it's going to be positive for domestic producers and domestic sales in every part of the world. 21:57 21 minutes, 57 seconds Um sure sir thanks. Uh and just one last clarification on UK uh you were reporting positive numbers for the last 22:03 22 minutes, 3 seconds three quarters. Could you just explain uh what happened uh this time around with respect to a better? Thank you. 22:11 22 minutes, 11 seconds Yeah, this time the main decision which we had taken was there were certain operational changes which we had to do with respect to product and product 22:18 22 minutes, 18 seconds production capability and capacity. We prepawned the shutdown which was planned in April into the month of March. This was done proactively to have a better 22:27 22 minutes, 27 seconds run next year and uh that's the impact you're seeing in terms of numbers otherwise it should go back to the 22:33 22 minutes, 33 seconds normal number. In fact because of the uh prepponing of the maintenance we do believe that we'll be have much better 22:40 22 minutes, 40 seconds operating parameters than what we had before. 22:45 22 minutes, 45 seconds Um sure sir thank you and all the very best. 22:50 22 minutes, 50 seconds Thank you. Our next question comes from the line of Ankor Periwal from Access Capital. Please go ahead. 22:56 22 minutes, 56 seconds Uh yeah, hi sir. Thanks for the opportunity. Uh uh first question, you know, uh in your opening remarks, you did highlighted, you know, some plants 23:03 23 minutes, 3 seconds uh either going for a longer uh sort of no maintenance or maybe mouthwatering. 23:08 23 minutes, 8 seconds Uh does it change the overall demand supply dynamics uh given the incremental supply that was coming from China? 23:16 23 minutes, 16 seconds No, I think so. See the point which which I want to highlight on China is that their inventories are fairly high. 23:22 23 minutes, 22 seconds Even today the inventories are close to 1.5 to 1.8 million tons but it's it's been stable. I think unless the unless 23:30 23 minutes, 30 seconds the stock levels come down we cannot see the major impact flowing through to market. So we will sort of highlight this inventory level in every quarter. 23:39 23 minutes, 39 seconds As of now I think it's pretty range bound as I highlighted. uh the Chinese prices while they they they they do show 23:46 23 minutes, 46 seconds an increase in dollar terms in the uh remn terms they have remained more or less flat at about 1250 remn or so uh per term. 23:59 23 minutes, 59 seconds Sure sir and just a follow up there. Uh there was an expectation that probably you know the synthetic the older plants in China may see a shutdown with this 24:06 24 minutes, 6 seconds natural sort of you know uh production increasing. Any updates? Anything on that side or it's still the same capacity? 24:14 24 minutes, 14 seconds It's the same capacity but they're running many of them are taking a maintenance closure and many of them are running at a lower utilization. uh but 24:23 24 minutes, 23 seconds uh clearly uh what what I would say is that the uh the early signs are that that we are beginning to see some some 24:31 24 minutes, 31 seconds movement but it's not today of a number which is uh of a uh substantial nature to sort of highlight. So I I would 24:40 24 minutes, 40 seconds certainly say that it is beginning and the numbers are also showing. We've also looked at the listed companies and their financial numbers. Their operating 24:47 24 minutes, 47 seconds parameters are under financial uh under stress. 24:53 24 minutes, 53 seconds Sure sir. And uh just uh lastly on our uh you know the cash flow generation uh from the business uh we have seen a 25:00 25 minutes sharp dip in operating cash flows which is you know in a way uh being led by the working capital uh decline as well sorry 25:07 25 minutes, 7 seconds increase as well. Uh so any thoughts there how should one look at you know the cash flow generation across the businesses or is there any one entity 25:15 25 minutes, 15 seconds which is impacting uh you know the overall company's cash flows. So your comments over there thank you. 25:22 25 minutes, 22 seconds No, I I think fundamentally we we have to ensure that we exit from unreminerative market which you have 25:29 25 minutes, 29 seconds done. Uh I think barring for last quarter we did do one shipment uh to Southeast Asia which uh which was 25:38 25 minutes, 38 seconds unremunerative because there was already a pre-existing contract. Uh other than that we have now stopped it. So we would only see this improve going forward. And 25:46 25 minutes, 46 seconds also uh since we are focusing more on domestic and the proportion is mostly higher with domestic you would also find 25:53 25 minutes, 53 seconds that the working capital cycle improve and that should also release some cash. 26:00 26 minutes Sure sir that's helpful that's it from my side. Thank you. 26:06 26 minutes, 6 seconds Thank you. The next question is from the line of Rohit Nagaraj from 361 Capital. Please go ahead. 26:13 26 minutes, 13 seconds Yeah. Uh thanks for the opportunity. Uh so first question is in terms of the increase in operating cost uh given that 26:22 26 minutes, 22 seconds we are safeguarded from the inventory but uh generally speaking uh increase in the fuel cost as well as the logistic 26:30 26 minutes, 30 seconds cost. What would be the increase in opex across our four facilities uh given that 26:38 26 minutes, 38 seconds if these new you know high cost uh utilities come into play. Thank you. 26:45 26 minutes, 45 seconds I I can't give a specific number. All I can say is that the uh the logistic cost on the output side is mostly a pass 26:53 26 minutes, 53 seconds through for customers because they do uh it's part of the contractual arrangement which we have whereas uh the uh in input 27:01 27 minutes, 1 second cost increases is what I said we've already transparently communicated to customers and passed on those increases and uh in all the units it's been more 27:09 27 minutes, 9 seconds or less uh been at par with what our cost increase has been uh except in UK where I said because of the fluctu uating gas prices we not able to pin 27:18 27 minutes, 18 seconds down but on an average it is fully passed down to the customers. 27:23 27 minutes, 23 seconds Sure. Sure. And second question is uh you talked about multiple capacities getting you know in shutdowns or 27:30 27 minutes, 30 seconds probably extended shutdowns. Uh has this happened particularly post the conflict or was it you know it happened before 27:38 27 minutes, 38 seconds that? I mean how just to get understanding about what in all capacities have been shut or how much 27:45 27 minutes, 45 seconds capacity has been shut post conflict and the earlier was I think is not there in the system. Thank you. 27:53 27 minutes, 53 seconds Yeah I I think most of them had initiated this process I think pre-conlict or conflict is only uh broadly may have accelerated their 28:01 28 minutes, 1 second decision. So I I would not because we are talking about a period in quarter where the conflict was the visible 28:08 28 minutes, 8 seconds effect started to show itself towards the end of March. So really I think this was a pre-conlict issue. We are monitoring the situation and uh we'll 28:16 28 minutes, 16 seconds give the better update uh in terms of postconlict what are the changes in the next quarter uh uh results calling. 28:25 28 minutes, 25 seconds Uh thanks a lot. All the best sir. 28:30 28 minutes, 30 seconds Thank you. The next question comes from the line of Arjun Kana from Kotup Mutual Fund. Please go ahead. 28:37 28 minutes, 37 seconds Sure. Uh thank you for taking my question. Uh my first uh query is on our new capeex plan. So we have enumerated almost 15 crores of additional capeex. 28:46 28 minutes, 46 seconds Uh could you help us with what kind of IR we expect to generate on this project? These four projects. 28:54 28 minutes, 54 seconds Sorry. I I think uh if you look at the uh capacity uh expansion which is immediate which is at 100 cr which is 29:02 29 minutes, 2 seconds what will come on stream immediately uh in about 12 to 14 months time. uh this return is expected uh to be in the 29:10 29 minutes, 10 seconds upwards of 20% which is our cutff and we uh and this is uh this is a debottling 29:17 29 minutes, 17 seconds on our current plant because we do believe with the current steam capacity we can produce more and the market needs more every year. uh the uh precipitated 29:26 29 minutes, 26 seconds silica plant uh is undergoing uh review detailed review in terms of uh various elements but uh if this capex were to 29:36 29 minutes, 36 seconds that to stay uh this will be towards uh anywhere between uh 15 to 20% at the low 29:43 29 minutes, 43 seconds end or 20% at the higher end. The densash is actually repurposing of our existing plant. So uh but bulk of the 29:50 29 minutes, 50 seconds expenditure is on repurposing and uh uh this probably is going to be the least cost densash plant uh built anywhere and 29:58 29 minutes, 58 seconds uh we would be exiting uh at after the decision is taken from our cement business uh and we'll be using the same 30:06 30 minutes, 6 seconds facilities to make dense ash and uh wino by the same token again is is in the range of 20%. So 30:14 30 minutes, 14 seconds sure sir sir just on the the uh vanimokum uh if one looks at the intensity it is almost capital intensity 30:22 30 minutes, 22 seconds is 2x of that of mappur so why would irr be 20% unless a selling price is double 30:30 30 minutes, 30 seconds no I think the big issue you you know which I want to highlight is the trans in salt cost structure production cost 30:39 30 minutes, 39 seconds is one one element but the logistic cost is equally the rate right so what we will be saving in this is 30:46 30 minutes, 46 seconds primarily the southern markets and we have mapped out the southern markets can take easily the easy so what we will 30:54 30 minutes, 54 seconds probably have a slightly higher uh capital cost is more than offset by the logistic cost which we'll be saving 31:01 31 minutes, 1 second sure and we generally sell this to uh a a group company right uh Tata consumer so in terms of our contracts uh is it on 31:10 31 minutes, 10 seconds a cost plus basis I know in 2019 19 uh during the time of de merger we had mentioned has there been any change uh in uh the agreement since then and what 31:19 31 minutes, 19 seconds are we currently making on related party transactions? 31:24 31 minutes, 24 seconds No all this is part of the same structure and we are continuing to do exactly as it has been approved by the board and our arrangements remain the 31:31 31 minutes, 31 seconds same and this has also been reviewed by the uh management of data consumer and which is one of the reasons we are going ahead with it. 31:40 31 minutes, 40 seconds Sure. So uh just to understand for the uh iodized salt we are looking at uh 15 to 20% IRRa for these projects obviously 31:48 31 minutes, 48 seconds sodash will be very remunerative uh and uh just on the precipitated silica plant so current HDS prices and if you look at 31:57 31 minutes, 57 seconds various grades it seems to be at around 80 rupees a kilo so uh I don't get how you'd be making 15 to 20% margins 32:05 32 minutes, 5 seconds sorry onrair on the cuddle facility See yeah yeah I think see the big big big 32:13 32 minutes, 13 seconds difference is that we are in south India and silica is a very bulk commodity and logistic cost is extremely high we are 32:20 32 minutes, 20 seconds the only unit which will be in south rest of the units are in Gujarat there's a freight cost difference between them and we are supplying only the tire 32:28 32 minutes, 28 seconds industry sure maybe I'll take this later uh just a followup and the last question is uh 32:35 32 minutes, 35 seconds given that we have taken a write down of goodwill in the US given sodash crisis. 32:40 32 minutes, 40 seconds Does that mean that uh logically we won't be undergoing any capeex in the US market? 32:47 32 minutes, 47 seconds No, we had made it clear that our capeex for the sodash business is going to be only when the cycle returns and we are 32:56 32 minutes, 56 seconds very clear about it and uh the capacity which we spoke about densash is a repurposing of the existing plant. Other 33:03 33 minutes, 3 seconds than that we have no other plans in terms of investment there. Our investments are fundamentally focused on non-sash businesses which is 33:10 33 minutes, 10 seconds bicarbonate, salt and bromine and uh various other chemicals and that's what we are focusing because this is it's the 33:19 33 minutes, 19 seconds cycle is still not complete. Only when we get a very clear sign that the cycle is shifting is when we starting this 33:26 33 minutes, 26 seconds and our net debt x leases close to 6,000 crores. Uh how do you see uh that play out over the next year? What cape taxes do we have lined up for FI27? 33:37 33 minutes, 37 seconds Yeah, around 1,300 cap for next year Arjun and next year we expect the debt to remain more or less similar levels because the pressure on the business is 33:45 33 minutes, 45 seconds there for next year also broadly. So we expect the debt to be more or less the similar level as current year March ending 26. You may not change 33:53 33 minutes, 53 seconds and capex and what we spending this 1,300 crores on. 33:58 33 minutes, 58 seconds See mostly on maintenance capex we have in both and US plus some capex of balokum silica and some capex also Singapore we acquired a company 34:06 34 minutes, 6 seconds recently. So broadly is maintenance capex in all geographies mainly and US and both capex in south and Singapore. 34:15 34 minutes, 15 seconds Sure. 34:17 34 minutes, 17 seconds Fair. Thank you and wishing you all the best. Thank you. Thank you. 34:23 34 minutes, 23 seconds The next question is from the line of Abijit Kala from Kotak Securities. Please go ahead. 34:29 34 minutes, 29 seconds Yeah, good evening. Thank you so much, sir. Uh just two from my side. One is with regard to the valuation review that was conducted for the US operations. Uh 34:37 34 minutes, 37 seconds did that cover the mining rights assets also that are part of the US books? I believe those are fairly large uh amount. Um 34:44 34 minutes, 44 seconds yeah I'll talk about that. Uh see in the US cap there's no one say so there's only India India concept there there's 34:52 34 minutes, 52 seconds only goodwill in the US books. So mining is only in the India and the IFRS part here. So we only impaired the goodwill and not the mining rights. So $28 35:01 35 minutes, 1 second million is the impairment of goodwill which is there. The mining rights remains intact. US there's no money right it's only goodwill. 35:12 35 minutes, 12 seconds Okay. But uh were these mining rights also assessed in terms of uh you know the uh the the value of that they carry 35:19 35 minutes, 19 seconds at this point in time by the valuer or yeah they they are intact. See we value the entire business as a whole and then we see what is the value of worth now with a shortfall. First we on talk of 35:27 35 minutes, 27 seconds goodwill. This 28 is only goodwill which means the mining rights are intact uh in the India's books 35:34 35 minutes, 34 seconds and we depreciating the mining right yeah over 100 years based upon the life. 35:39 35 minutes, 39 seconds So we we take a write up every year one 100 for the last 10 years now going forward that is a gradual drop in that based upon the mind left over. So 35:46 35 minutes, 46 seconds broadly that's the way we look at things here. 35:50 35 minutes, 50 seconds Okay got it. And uh just the other one on the silica plant at Kadu the 775 cr investment. Um so would it be possible 35:59 35 minutes, 59 seconds to just help us with uh you know the broad expected revenues and maybe beta from that project the 50,000 tons we are putting up. 36:05 36 minutes, 5 seconds We will do it offline we can't talk about that here and uh we'll do it separately. The next call we'll update you watching all of people. I know it's very early stages now here but we'll 36:13 36 minutes, 13 seconds talk about more about them maybe in the Q1 quarterly call. 36:17 36 minutes, 17 seconds Okay. But I mean 20% uh you know ROC would mean something like say 150 cr of uh you know earnings eit E bit from that 36:26 36 minutes, 26 seconds project would that be a fair assessment we work based upon those numbers and we will talk more about that maybe end of Q1 and the assessment is done based upon 36:34 36 minutes, 34 seconds a market view of what's going to happen and see look at this plant there's no increment of fixed cost it's the same plant only going to have there so the 36:42 36 minutes, 42 seconds the so we go to the same location going to add more capacities and therefore the fixed cost would remain same so you get operating leverage there. Therefore, you'll be ending up adding more a bit 36:50 36 minutes, 50 seconds per turn. That's a broad concept. It's it's not a green field. It's more like a within the same location adding more machines to the people being more or less constant. 37:00 37 minutes Yeah, it is in that range. I mean, it's broadly in the range. Uh yeah, I see. Okay. Yeah. Because I mean the 37:08 37 minutes, 8 seconds 775 crores is all incremental capex, right? I mean uh you know Yeah. Yeah. Okay. All right. I'll take it offline. Thank you. 37:18 37 minutes, 18 seconds Thank you. The next question is from the line of Atur from ICICI Credential Mutual Fund. Please go ahead. 37:27 37 minutes, 27 seconds No thanks. My questions have been answered. Thanks. Thank you. 37:33 37 minutes, 33 seconds Our next question comes from the line of Sakit Kapoor from Kapoor Company. Please go ahead. 37:46 37 minutes, 46 seconds your line has been yeah namaskar sir hope I'm audible yes sir firstly uh what are what are the 37:55 37 minutes, 55 seconds signs of the incremental demand from the uh for the solar gas class manufacturers particularly some new capacities were 38:03 38 minutes, 3 seconds anticipated uh to commercialize for the current financial year and what's the outlook going ahead especially from the 38:10 38 minutes, 10 seconds solar glass and then sir the update on the reinitiation of uh the anti-dumping duty cells. What's the uh update on this? This is my first question. 38:22 38 minutes, 22 seconds So I think the the a is the the thing which is being investigated along with 38:30 38 minutes, 30 seconds is also safeguard duty which will have quantity restrictions. That's what the government is looking at rather than just to put duty on. They also want to get the quantity restrictions in place. 38:39 38 minutes, 39 seconds The second piece is on the uh solar glass. I I I think it's safe to assume that uh when the solar glass units are 38:46 38 minutes, 46 seconds running, we would be anywhere between uh approximately 7,500 10,000 tons of uh 38:53 38 minutes, 53 seconds demand every month for the dense ash incrementally during the initial period but we'll come back with the exact specific you know how this demand is 39:02 39 minutes, 2 seconds going to grow as each one of the units comes on stream. 39:06 39 minutes, 6 seconds So as per does the program outlined by the solar glass manufacturer what is the anticipated demand have you worked out a 39:13 39 minutes, 13 seconds number on the same I think the big are coming which is which is the main reason we se we are doing this unit in uh the 39:21 39 minutes, 21 seconds conversion of dens plant to dens plant is to cover that demand we do expect at least 50% utilization uh as as it comes 39:29 39 minutes, 29 seconds on stream and the balance with the growth which is why we are doing the repurposing of the cement 39:37 39 minutes, 37 seconds Okay. And said currently with the type of uh geopolitical scenario playing out and and imported material uh hindrance 39:46 39 minutes, 46 seconds what kind of uh how are the imports being affected on a monthly basis from the other geographic into into the country. 39:55 39 minutes, 55 seconds Yeah. Yeah, I think broadly one would say that anywhere between 70 to 80,000 ton or a one lakh ton was the imports 40:03 40 minutes, 3 seconds depending on which month you pick up and that is reduced to half right now. 40:08 40 minutes, 8 seconds Okay. and those are supporting the domestic volumes and from the it being supplied by the domestic players that is 40:15 40 minutes, 15 seconds how it is getting that that is what has happened there's a there's an increased focus on the domestic players and we are supporting 40:23 40 minutes, 23 seconds the Indian customers as well as we can from the domestic source all all the players are doing the same 40:30 40 minutes, 30 seconds and in terms of this flu gas flu gas part of the story how is the sodium bicarbonate demand uh currently shifting 40:38 40 minutes, 38 seconds up and what are what are our utilization levels in terms of the same I won't have the exact number of how 40:46 40 minutes, 46 seconds much what percentage of our uh output goes there you know we increased our output from about uh 140,000 ton to 40:54 40 minutes, 54 seconds 200,000 ton in India which is fully sold out now and uh with uh with the increased production from power from 41:01 41 minutes, 1 second coal fired plants this uh demand is going to continue to grow uh and uh and it it's the biggest buyer is of course 41:09 41 minutes, 9 seconds NTPC and we do work with them very closely. 41:13 41 minutes, 13 seconds Last point is on the freight and forwarding charges when we look at the standalone number the volume increase is I think so from 2 lakh 15,000 metrics 41:21 41 minutes, 21 seconds and to 2 lakh 22,000 whereas the freight and for forwarding charges have gone up from 148 K to 166 K and similarly the 41:32 41 minutes, 32 seconds employee benefit cost have also risen significantly from 67 cr to 84 cr. So what explains these two differential? 41:42 41 minutes, 42 seconds So the the employee one is the year end adjustments which we make. I think if you it' be ideal if you took the full year number uh which is 293 versus 313 41:51 41 minutes, 51 seconds on the employee side and uh on on the on the freight side uh you want to get back number. Yeah I'll come back on that separately. 42:00 42 minutes I don't have the numbers off hand. Okay. So 10%. Thank you. It is a 10% I think. 42:06 42 minutes, 6 seconds So it's it's a higher amount 20 cr yeah yeah more than more than that but from 150 to 166 so where the volume has not 42:14 42 minutes, 14 seconds risen come in to that so that that was the reason for 42:21 42 minutes, 21 seconds uh partly the non revenue uh what are we including in this 6,000 cr uh revenue part so what is the major item that we 42:31 42 minutes, 31 seconds have everything other than sodash uh uh the fundamentally with biccarbonate, salt, 42:40 42 minutes, 40 seconds silica, foss, bromine, chlorine, cement also rallis, all all that is included in 42:49 42 minutes, 49 seconds this. Okay, thank you sir and all the best to the Thank you. Thank you. 42:56 42 minutes, 56 seconds Thank you. We have no further questions ladies and gentlemen. I would now like to hand the conference over to our mukundan for closing comments. Over to 43:04 43 minutes, 4 seconds you sir. Uh thank you for joining the call today. It's been a difficult quarter and a difficult operating environment. But I think what we are 43:12 43 minutes, 12 seconds focused on is disciplined execution, strengthening the supply chain responsiveness, maintaining strict cost and cash flow discipline, reinforcing 43:20 43 minutes, 20 seconds the portfolio action in terms of moving towards higher percentage of non-sash business. These actions taken over the 43:29 43 minutes, 29 seconds next few quarters will improve further the outcomes in terms of margin and uh profitability. Our commitment to 43:37 43 minutes, 37 seconds customer service and operational continuity especially in the current times remains very focused. Our long-term value creation remains one of 43:45 43 minutes, 45 seconds the key top agendas which we have for that. Uh we have a experienced team which is well positioned to manage the current uncertainties and continue to 43:53 43 minutes, 53 seconds deliver sustainable performance for all shareholders. Thank you and uh see you all for the Q107 results. 44:02 44 minutes, 2 seconds Thank you on behalf of Tata Chemicals Limited. That concludes this conference. 44:07 44 minutes, 7 seconds Thank you all for joining us. You may now disconnect your lines.