Q3 24/25

Feb 6, 2025

Summary

9M FY25 net revenue rose 23% and EBITDA 19%, driven by biofuels and spirits. A three-way demerger is planned, while high grain costs and Ennature margin pressure remain key watchpoints.

Ladies and gentlemen, good day and welcome to the India Glycols Limited Q3 and nine months FY 2025 conference call hosted by Nuvama Wealth Research. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on a touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Pawan Bhatia from Nuvama Wealth Research. Thank you, and over to you, sir. Good evening, everyone. Thank you for joining us on India Glycols Limited Q3 and nine-month FY 2025 results conference call. I would like to thank the management for giving us this opportunity to host the call and congratulate them on a good set of numbers. We are joined on this call with India Glycols management, represented by Mr. Rupark Sarswat, Chief Executive Officer, Mr. Anand Singhal, the Chief Financial Officer, Mr. Rajesh Marwaha, Head Sales and Marketing, BSPC, Mr. S. K. Shukla, Head Liquor Business, and Mr. Ankur Jain, Head Legal and Company Secretary. I would like to invite Mr. Rupark Sarswat to initiate these proceedings with his opening remarks, after which we will have a Q&A session. Thank you, and over to you, sir. Yeah. A very good afternoon to everybody, and thank you for joining us for this call. We have several topics on the agenda to talk about today. Of course, we will talk about the business performance and the nine-month highlights as well as highlights for the quarter. Equally importantly, we will also talk about the initiation of the scheme, which proposes to restructure IGL into three de-merged identities. What I will do to start off is to give you a little bit of highlights in terms of the business, and we will come to the details later on, and a very high-level view of the restructuring in terms of getting the gist of it. Then I will request my colleague, Mr. Anand Singhal, to take you through the details about the scheme, the demerger, and how it is going to be implemented, and the mechanisms that we will adopt to achieve that, and so on. Then we will have some more commentary on various businesses. After that, we will be happy to take your questions. Let me, as usual, start with how our performance has been. I recognize that what we shared with you are EBIT numbers. In order to explain the business sometimes, especially because there is some declassification of businesses involved, I will be referring to EBITDA or margin numbers as well. That is just to make sure that I am talking about and setting the right context. As you know, from a business performance perspective, we have had a good set of numbers to report. If you look at the nine-month performance, our net turnover at INR 2,905 crores is up 22.7%. Gross turnover is up 16.45%. Our EBITDA for the nine months at INR 376 crores is up 19.9%, and we continue to clock decent margins of about 12.95%. Various segments have driven this growth, particularly biofuels has driven top-line growth. Similarly, we have had excellent growth in potable spirits, and we have had some top-line growth in Ennature Biopharma as well. Chemical business has been slow, but I will explain that because the core businesses where we sell chemicals has actually done reasonably well, and I will explain that later on. In short, we have seen excellent growth, as I said, in biofuels, and the capacities that we have added have served top-line growth as well as bottom-line growth, and we have contributed to the blending program, which is on track. In the potable spirit space, as I said, excellent growth both in IMFL and Country Liquor. We will talk about it in somewhat more detail subsequently. We have had a slightly weak quarter for chemicals. But for the operating business, if you exclude the JV and some businesses which are readjusted, we have actually had excellent margin growth. There has been strong sales growth in Ennature Biopharma. However, as we have spoken earlier, both for the nicotine and thiocolchicoside business, our margins have been under pressure. We have been talking to you about new specialties. Of course, these kind of businesses have a gestation period. I am happy to state that whilst you do not see so much in numbers, and I will talk about the businesses going forward, we are quite happy with the progress that we have made in terms of projects. We are working with reputed companies. Many of our projects and products have been approved, and we are on track to generate significant commercial sales not only in this year but also for the years ahead. In addition to that, I think the joint venture performance has also been very good, where for the quarter itself, sales are up 12%, but the EBITDA for the joint ventures is up 75%. This is similarly EBITDA margins for the JV were up as well. One of the key reasons, of course, is lowering of the feedstock price differential for them. We generally compare with Reliance Industries. Also there has been a focus on improving the product mix as well as greater focus on exports. That is a high-level commentary on the business. We will talk about segments going forward. Let me go back to the restructuring scheme that has been announced. As I said, Mr. Singhal will tell you more about the details of the scheme. Let me give you a macro view of what the proposed business structure is, what is the rationale behind it, and so on. Essentially what we are trying to do is to restructure these businesses into three separate companies for the time being within the IGL group. The whole idea behind this is to run these companies differently. They have different focuses to provide them much more focus and also to allow potential investments in different businesses because different investors tend to have a different focus for the investment. In that sense, there is a potential to unlock value going forward. That is at a high level in terms of what the business restructuring is about. What you will see is right now we report bio-based specialties and performance chemicals, which is a business of, if you look at the existing structure for FY 2024, which is a top line of close to INR 1,626 crores. Then for FY 2024, biofuels was close to INR 512 crores. IMFL at a gross level was INR 574 crores and the net number for IMFL for FY 2024 would be lesser but that is the gross number. The plan is to have a chemicals business which focuses on green chemicals and specialty products, which include glycols, bio glycols, new specialties, industrial gases and so on. This on a like-to-like basis will be a slightly lower turnover because some of the products will go with what will be the Ennature Biopharma business. The second will be the IGL Spirits business, which will have spirits, of course, IMFL and Santanika, but it will also have the alcohol business or the biofuel business going with it. The third one will be Ennature Biopharma which will be Ennature as it is right now and also taking the biopolymers business which is small business from chemicals and putting it into Ennature Biopharma. We believe that this allow us to run these businesses in a much more focused manner. They have slightly different priorities, different markets, different drivers and therefore grow these businesses independently to create more value. I will pause now and I will request Mr. Singhal to brief you on the details of the scheme. Thank you, sir. The board in its meeting on 4th February has largely approved two proposals. One is the merger of Kashipur Holdings, which is a holding company for India Glycols and demerger of the business into two separate entity. One is the IGL Spirits, the other one is Ennature Biopharma. Presentation is already with everybody, so now everybody can see but I will largely give you the brief on what is the proposal although CEO sir has already given main things. For the new companies, the India Glycols which is the chemical business largely for nine months this company has a turnover of INR 1,079 crores with a EBITDA margin of 13.6%. The IGL Spirits which is proposed to be the other company which will be having the legal business and the biofuel business is having nine months turnover of INR 1,628. This is on net basis with 14.4% EBITDA margin. The Ennature Biopharma which has the biopharma means the herbal division plus the biopolymer which is the Guar Gum business is having the turnover of INR 178 crores for the nine months with having an EBITDA margin of 14.9%. This is what the proposal for demerging these three companies. The merger of Kashipur Holdings, a holding company with India Glycols is largely keeping in mind that the promoters will have the direct shareholding of IGL in their names. The main benefits I will say for the proposed scheme will be the demerger will enable independent growth for each businesses. Separating the business will reduce the risk of one business affecting the others, will create a potential to unlock value for the shareholders by drawing focused investors. Each business will have a clear focus leading to improved management and resource allocation. This is what we think that will be the main proposed benefits for the proposed scheme. Rest of the presentation is already with you and I will pause here and we will take up any questions during our question and answer session. Thank you very much, sir. Thank you. We will now begin the question and answer session. No, hold on, hold on. We've not finished. There are two things. Anandji, would you like to brief on the financial results first? Then I will give a little bit of sector commentary. Okay. Then we can take that. On the financial performance for the Q3 2025, in the current quarter from October to December 2024, we have a gross revenue of INR 2,424 crores, with a net revenue of INR 975 crores. If we compare this with the last quarter same period last year, we have a growth of say about 8%. The EBITDA in this nine months is INR 129 crores, vis-a-vis INR 107 crores in the last year same quarter, showing a growth of 21%, while the PAT and PAT margin is INR 57 crores vis-a-vis INR 42 crores, showing say about 37% growth. If we see the nine months results, in nine months, the gross revenue is INR 6,850 crores, vis-a-vis INR 5,882 crores, showing a growth of 17%. The net revenue is INR 2,905 crores vis-a-vis INR 2,368 crores, showing a growth of 23%. The EBITDA is INR 378 crores in the nine months vis-a-vis INR 319 crores in the last year nine months, showing an increase of 19%. And PAT is INR 167 crores vis-a-vis INR 131 crores in the last year, showing an increase of 28%. Basically, if we will see, the company has shown a very good result in all around growth and good results, I would say. Okay. Thank you, Anandji. What we will do is, we will very briefly touch upon segmental commentary and then we can go to question and answers. I had mentioned to you about nine months results while I had skipped the quarterly results, which you have already seen though. The net turnover at INR 975 crores is up 7.9%, but there is an excellent EBITDA growth for the quarter at 20.68%, and a much better EBITDA margin of 13.3%. If I look at the nine months performance or the performance for different sectors. For the chemicals business, for example, for the nine months, we see a top line de-growth of 8%, and for the quarter it is appearing 30% decline. However, I may like to add here that in some senses it needs the right interpretation, because we have had some declassification of products as we are preparing for the restructuring of the business, where some of the byproducts and DDGS in the earlier quarters reported along with chemicals. That makes you see a bit of a de-growth, which is not exactly representative for these numbers. I will give you the commentary so that there is clarity. There is nothing wrong here, it is just a matter of interpretation. Similarly, our biofuels business, at INR 770 crores for nine months is up 135% for nine months, and it is 79% up for the quarter. Our potable spirits business at INR 858 crores for nine months is up 25%, and at INR 325 crores it is up 37%. Our Ennature Biopharma business, at INR 169 crores for nine months is up 14%, and for the quarter it is up 4%. If you look at an EBITDA margin level, I know the numbers that you have are EBIT numbers, so I am not going to repeat them because those you already have. The chemicals business has seen a moderate decline of about 5%. Again, this is for some of the readjustments that we spoke about. Biofuels up 135%, potable spirit, excellent growth at 42%, Ennature Biopharma, the margins have declined mainly even though the top line has increased. This is because of the cost pressures that we have spoken about. I spoke about the joint venture, another number that I would talk about. What has also happened, in some ways, some of the toughest times that we faced are past. The price differential between crude-based ethanol and bio-based ethanol, which at one point in time had increased to in excess of 40%, which means bio-based ethanol was more expensive, is now down to a much more manageable 15%, which has reflected in much better results for the joint venture and also much better margins and profitability in some of our chemicals businesses which were under pressure. We continue to, as you know, import ethanol for a significant part of our chemicals business. It is because it is a much more lower cost option for us than procuring or even manufacturing ethanol using grain or molasses in-house. There are certain chemicals which demand molasses-based ethanol. Those, of course, we supply on that basis. Now, a very high level commentary in terms of our sectors. I mentioned to you about the biofuels program. Whilst you will be tracking this industry, I think the interesting thing is that from 1920, where the government targeted a 5% blending, they achieved 5% blending. In 2021, they targeted 10% but achieved 8% blending. In 2021-2022, they target 10%, achieve 10%. 2022-2023, targeted 12%, achieved 12.1%. In 2023-2024, targeted 15%, achieved 4.6%. 2024-2025, targeted 18%, achieved 18%. I have read these numbers out for a specific reason. I remember having been with you in discussions earlier where you all asked questions about how is the blending program going, how much will get blended? I kept on saying that while there will be ups and downs based on various factors, at a macro level, given the strategy for the blending program, which was based on increasing farm sector incomes, utilizing grain that we have, reducing Forex outflow, et cetera, this strategy is correct. Which is also reflecting that the blending program is on track and it was in that sense a good decision for us to participate in that. We expect that the 20% target for next year would be on track. Amongst very few government-driven programs that you see for the last few years, every single year, more or less, except 2021 because of other reasons, and then we caught up, have been completely as per target. That is a good thing. We expect that we have done about 11.7 crore YTD in terms of liters, in terms of volume, INR 770 crores in terms of top line. We expect 2024-2025 would be more or less in line, and we would more or less be doing possibly, hopefully, close to 15 crore liters of sales for biofuels. We do track several parameters that you several times ask questions for us. I think the government from time to time has been giving price increases based on cost increases. There are important factors which is grain price and DDGS price, which are important from a margin perspective. The price, of course, is determined by the government. There is also some bit of positive news on this front that the government has released significant quantity of more FCI rice at a cheaper price into the market, which means that the grain price, which had gone up to INR 27-INR 28, is expected to be lower in the quarters to follow. Hopefully, of course, it is dependent on a few other factors. It will lead to improved margins for the business. Not only would the FCI rice be cheaper, but I think as you introduce and put that in the market, the market factors drive other private players selling their rice also lower. We talked about the chemicals business. If I take out what we sell to the joint venture, of course, there is a separate dynamic here. That is a part of an agreement. The benefit of what we do with the joint venture also comes to us in terms of course, profit-sharing because we own 49% of the joint venture. But if you look at the core business, if I take out ethanol and some of the other categories, I would like to for a little bit of reassurance about this business that for the nine months, for these businesses which includes glycols, glycol ethers, glycols, new specialties, biopolymers, gases, and your sales, our top line is actually up 30% and our gross margin is actually up 58%. I wanted to make this point because your obvious question about the numbers of chemicals is therefore addressed. That is broadly the commentary from my side. I would request Rajeevji to give a little bit of commentary on potable spirits, particularly IMFL. I think it is important for us for two reasons. One is that one of the significant rationales for us is to provide the focus on the IMFL business. Which you know is a very interesting business going forward. There is a lot of interest in the market, and I was just going through some of the numbers. The potable spirits business in India, which is expected to be about $56 billion in 2025, is expected to grow at 7.2%, going up to about $112 billion in 2034. There are, of course, various factors driving this, right from premiumization to even health and wellness, therefore people investing in better spirits to change in demographics, digital, et cetera. We have also had a partnership with Amrut, which is a good milestone that I am sure Mr. Rajeev will like to talk about. Then we can take questions. Rajeev. Hello, I am Rajeev Mujirani speaking. I am a liquor man throughout. I served as CEO and President of Radico Khaitan for 13 years. I was with Shaw Wallace for 11 years. For whatever reason, I have stayed with liquor. I joined this organization just over four years ago. Once I joined, we realized that we have got hidden potential of our ENA quality. ENA is Extra Neutral Alcohol, as you know. Also, we co-pack for Bacardi, which is the third-largest liquor company in the world. Perhaps that was the reason I was hired. We felt that while we have made our mark in Country Liquor, we are leaders both in our home states of Uttar Pradesh as well as Uttarakhand, where our state-of-art distilleries are located. But the potential, or we say the growth potential is in IMFL, particularly premium. Like our CEO rightly mentioned, premiumization story sells all over the world because India has captive consumption. I do not have to go into its demographic details, but the demographic dividend, as you say, is in favor of liquor because to put it in simple words, Australia is added every year in India as far as consumers are concerned, to more than 20 million consumers. There is huge potential. While the IMFL industry is growing at 7%-8%, it also goes up to 8%-9%, the premium industry is growing at more than 20%. The top management sat down, and we said, while we have a traditional brand like Soulmate Blu, which is a millionaire brand, which has done more than 10 lakh cases last year. But we were a very shy company. We would not talk much about liquor because IMFL was still small. But then we felt the need to do premiumization of our brands. As we say in marketing, we felt the need gap. The need gap in the consumer's mind was there, in vodka particularly. Just to mention that the top MNCs do not have a vodka brand. Only Radico Khaitan, which is a prominent player and a leader brand, has a successful vodka. There was always a room for a second player. What we did very cleverly is, if I may use that word, our chairman always prophesizes quality consciousness, and consumer consumables, we must give the best quality. Perhaps that is why IGL is so entrenched, and over a period of time, our Black Boss business has done so well. We went to Europe, and we got the best of best flavors from Germany, and that made the mark. Our Amazing Vodka, in the first year of launch three years ago, made its presence felt, and we got gold medals consecutively for two years in open competition. We have an annual event where all over the country, people participate, industry participates, and in a blind format, the jury judges the quality. Because of the excellent quality, our brand got noticed. Today, I take a lot of satisfaction in mentioning that Amazing Vodka and its flavors are among the top three vodka brands wherever we have launched it, namely U.P., which is our home state, Uttarakhand, Delhi, and even Rajasthan and Chandigarh. Just within three years, largely because of the packaging and the quality. Then we felt the need that, India being a tropical country, there was a very good need of a refreshing drink. As our CEO rightly mentioned, the tastes and preferences have steadily changed. There was a time when hard whiskeys would sell, like Peter Scott or Solan No. 1. But today, lighter whiskeys, young consumers want lighter, refreshing, easy-to-drink brands. We made a beautiful brand called Zumba. Zumba was named by us. Zumba, as you know, is a wellness program. It also gives a hint of that you have to drink responsibly. We created a citrus white rum. The leader brand, you are aware, I don't have to mention. I take satisfaction in mentioning that today our Zumba Lemoni, we call it, is the challenger brand and the second-largest in this segment. This segment is very small at the moment, but we will grow the category, and our brand is doing very well, Zumba Lemoni, in U.P., Uttarakhand, Delhi, and now also, I take satisfaction in mentioning that we have got approval in paramilitary also. Then we felt that when we have got such excellent quality in ENA as also the packaging standards for the last over a decade with our Bacardi International, then why can't we also do inorganic growth and have double-engine growth, if I may use that word. This is an election. Double engine is quite popular. I'm quite familiar with Amrut. We approached them, and we convinced them that while their bandwidth is, as you know, Amrut is a wonderful company, and Amrut Single Malt is world-famous. While they concentrate on malt whiskeys, they have got certain very valuable millionaire case brands like Amrut’s MaQintosh Whisky, which is a 35-year-old company, and Old Port Rum, which is the sixth-largest brand in rum across category as per data available. So we said, why not we partner with Amrut on a royalty basis and make it in Kashipur. The moment I said Kashipur, they were more than happy to tie up. Just for your knowledge, gentlemen and ladies, Amrut has in 75 years' history, never done a partnership. This is the first time, and it is all because of the IGL Kashipur brand name. Because of the brilliant quality, the consumer sees the label when they see Bacardi being bottled, right from Breezer to the top-end Carta Blanca, where our Chairman and the board has invested a lot of money. The consumer feels doubly satisfied that this is a quality product. So Amrut was more than happy to join with us, and on 7 July 2024, we started the business. Though it is early days, I cannot make a statement that we have made our presence felt. But what we did was, we got these brands in the premium segment. Premium, when I say, in Delhi, MRP of INR 800 to INR 1,100. We have got one more variant of MaQintosh. One is MaQintosh Black and one is MaQintosh White, in order to cater to both the segments. So let's add MRP is INR 1,100 for black and INR 850 for white. So the growth of premium segment is so fast because the income levels of the consumers are going up. The entry level as premium segment, youngsters that make lots of software, engineers, retail opening up, has got so much money in the hands of the young consumers, that their entry level is INR 800 plus. So we want to harness that potential. Though we have just rolled out about three, four months back, and it is not fair for me to say that we are successful, but I am sure we are at the right direction because with Amrut, just to mention that the entire liquid is transferred from Amrut headquarters, from distillery in Bangalore to Kashipur. In other words, there is 100% quality consistency as far as Amrut’s liquid is concerned, and 100% packaging consistency as far as IGL is concerned. So it is a very good mix between the two natural partnership, and I am sure in the next quarters you will see, if I may use the word, because I am basically a sales and marketing person, you will see a VTO. So vertical take-off. Which one has done in the past many a time, but I am sure, with the confidence that our board has reposed in us, we have recruited certain very good professionals. This is early days, but I am sure, in years or quarters to come, IGL will be known for best quality premium brands. Thank you, Raju. As you can see from enthusiasm of Raju, we are very positive about, and feel of course he is very knowledgeable. I think that being said, you have already seen the detailed presentation and the numbers. We will now take questions from people who have assembled here. Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the desktop telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Just put the easy questions first. That is just okay. Thank you. The first question comes from the line of Bala A. with Arihant Capital. Please go ahead. Good evening, sir. Congratulations for good set of numbers. My first question regarding post restructuring, more than 75% of business comes from IGL Spirits. Is there any plan to listen that entity? Plan for? Listing. First of all, there is some nice music also coming. Sir, maybe request that you mute your line, sir, after you have asked your question. Thank you. Okay. Yeah, thank you. You see, one step at a time. Right now, whilst there are all these options which are on the cards and also talked about, and the fact that we will look at opportunities to unlock value. Right now, the focus over the next period, I think the time frame of, I do not know, Anandji will say 12 months to 15 months. The idea is to get these separately working as independent P&Ls. To get the focus in the businesses to drive growth. That is number one. Of course, these will be different companies. The options after that are obviously listing them and also looking at potentially partners, et cetera, are all there. Anandji will look at. Just to add what CEO sir has told, that all the companies will be listed because the demerger will happen through NCLT route. Okay? The demerger will be effective from 04/01/2026. Say, we will take about 12 to 15 months in getting all the formalities relating to demerger done, which includes the SEBI NOCs and of course the lenders and other NOCs and the NCLT NOC. Yeah, approval, you can say. This demerger will be effective from 04/01/2026, and all the three companies will be listed on the stock exchange. Mr. Bala A., you can go with the next question. Yes, sir. My second question regarding what is the price difference between imported ethanol and domestic ethanol? We are using imported ethanol for chemical business. Is there any quality difference between imported ethanol and domestic ethanol? Because in domestic ethanol, we are using for biofuels and distilleries. Okay. Bala A., we have talked about it before, but I will nevertheless respond. First of all, the imported ethanol, which is either imported from Brazil or U.S., is either grain-based or sugarcane-based, and we can take both. This is industrial-grade ethanol. Now, you need to understand that for the purpose of blending and for the purpose of potable spirits, the ethanol that we import cannot be used. That is not allowed to be used. Therefore, first thing is that all the ethanol that we put into biofuels or in a potable spirit, depending upon the need, is manufactured in-house, be it from grain or molasses. As far as chemicals are concerned, we can use both grain-based ethanol and molasses-based ethanol and grain-based ethanol from the U.S. interchangeably in our plant. So effectively, there is no quality difference. Of course, these ethanols may come from different sources. There may be traces of slight ingredients which are different, which we may need to do some pretreatment to make sure that our catalyst systems work well, which we do. But as far as the decision of using them for our chemical product is concerned, from a quality perspective, there is no difference. Sometimes people, depending upon their strategies on carbon footprint, et cetera, may prefer, for example, molasses-based ethanol. That is more from a sustainability carbon footprint perspective, but not from a quality perspective. From a quality perspective, we can use both these or multiple grades of the ethanol that I have just talked about to deliver the same quality of product to customers, either domestically or internationally. Got it, sir. My last question regarding biofuel side. Last two or three quarters back, we used to report more than 7% kind of margin. In this quarter, only 3.3%. Is there any specific reason for that? I briefly touched upon it, that there are multiple factors which impact the margins that we make on biofuel, and the margins do go up and down. There are three factors, and we monitor all of them closely. One factor is the price. The price for various sources of ethanol, which goes into biofuel blending, whether it is molasses, C heavy molasses, B heavy molasses, damaged food grain, FCI-based rice, et cetera, or corn-based, is fixed by the government, and it is based on the free stock. The second parameter which affects the margin is the price of grain. Price of grain, if you remember, at one point in time when we started this business in 2023, 2024, was even hovering around INR 19 to INR 20. Then, as there was increased demand and also some slowdown by the government in terms of allowing FCI rice to be used, the prices of grain in the market had gone up. If you look at August 2024, September 2024, July 2024, we saw reasonably high prices of grain, which were hovering around INR 27 to INR 28. The other factor which also affects the margin is the price of DDGS, which is the protein which comes out. The higher the price, the better the margin on ethanol, because that's a byproduct which gets sold. The reason you saw somewhat lower margin possibly is because grain prices were higher, DDGS prices had dipped, and as I'd also mentioned, going forward, the government has announced release of more FCI for grain-based ethanol. There is abundant stock with the government, and we expect that the grain prices will come down, and this will positively impact the margins on biofuels. Thank you. Mr. Bala A., may we request that you return to the question queue for follow-up questions. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to one or two per participant. Should you have a follow-up question, we would request you to rejoin the queue. The next question comes from the line of Rohit Nagraj from B&K Securities. Please go ahead. Yeah. Thanks for the opportunity. Congrats on good set of numbers, and again, congratulations for the demerger scheme. Seems interesting. First question is again on the demerger scheme. In terms of the individual three segments, how is the working capital for them? What could be the debt structure as of now based on the long-term debt sitting across individual businesses? Lastly, in terms of ongoing projects, what are the individual projects which are going across all the three segments? Thank you. Rohit, regarding the working capital allocation to each company and the term loan allocation, we are talking to the term lenders, mainly the State Bank of India, who is the leader in our consortium banking. Although we have more or less finalized, depending upon the NWC for the working capital and term loan for the projects for which we have taken. But we have yet to get the confirmation from SBI. We are in process. That will take some time. We will come back to you on this once it is finalized. Regarding the project completion, more or less all the projects, whatever we have undertaken is complete except one grain distillery, which we are installing in Gorakhpur, and hopefully that will also be completed by March 2025. Then all the projects, whatever we have undertaken, will be completed before the demerger. Okay. Sure. That is helpful. The second question, again, from the managing all the three business perspective, how would the group structure evolve? Rupesh will be a group CEO, and there will be individual CEOs across the business. The question I'm asking is primarily because if we were to have individual CEOs to head the businesses, we may have to groom someone from our own organization or may have to hire for the next maybe 12, 15 months by the time the scheme is culminated. Just a broader perspective on this. Thank you. Rohit, thank you. First of all, thank you for making me feel a little insecure about my job. That was on a lighter note. Well, look, it is too early to say what exactly would be the structure, but let me put it in terms of principles. The principle of demerger, to start with, is to continue to run the businesses under one umbrella, but differently, as in separately from a strategic perspective, but not unduly increasing the cost base. Okay? That is what you will continue to see in the near future. Depending upon how it pans out, of course, there will be need for individual resources. How those individual resources will be structured, built in from the organization, got from the outside, is something which is work in progress. It is very difficult for me to immediately tell you how that will span out. But as I mentioned, for the time, there will be several resources which will be common, like it happens in many group companies. Otherwise, we will end up increasing cost quite a lot. There will be corporate resources which will be common, and there will be a mechanism to allocate these costs going forward. After the companies are separately formed, the way they start growing, the way they have the individual projects, I think there will be an ongoing dynamic way of looking at resourcing them. Sure. That is helpful. Just one last clarification. As of today, we are a green chemistry company, given that all the three segments are based on bio or ethanol. Once the businesses are separated, will the chemical business may transform into a combination of green plus synthetic chemistry, or will it continue to remain on the green chemistry lines? Thank you. Okay. Look, we believe that sustainable chemistry is a significant strength of ours, but it is not the only box that we would like to operate in. Not to say that we will. For example, when we talk about specialties or performance chemicals, we would not limit ourselves to saying that unless it is completely green, we will not do that. No. We will look at those areas as well. But we would like to leverage our green strengths, our green feedstocks, to make our specialty chemicals green, greener, and even more green. To give you an example, we are looking at bio-based amines, so we would be perhaps, hopefully, the first company to make bio-based amines using ethanol and ammonia. But subsequently, we may start to use ammonia, which comes from green hydrogen, so therefore, that is also completely circular or much lower carbon footprint. That journey will continue. Rohit, in short, the answer is, we will continue to look at opportunities to grow based on our strength. One of our key strengths is sustainable chemistry, but our key strengths also are process development, product development, application development, and forming strong relationships with some customers in the B2B space to whom we can add significant value. Sure. That's really helpful. Thanks a lot, and all the best. Thank you. Thank you. Thank you. Thank you. The next question comes from the line of Saket Kapoor from Kapoor & Company. Please go ahead. Mr. Saket, your line has been unmuted. Please go ahead with your question. Yeah. Namaskar, sir, and thank you for this opportunity. Congratulations, firstly, to the entire team for setting the timeline and meeting the timeline in giving investors the update and the proposals for demergers. We hope for a smooth transition. Sir, not many questions. Only, sir, a couple of data points. Firstly, sir, the pain point in our vertical has been the Ennature Biopharma, and that has been on a slide for the last three quarters in a row. If you could spare two minutes and explain. Although I firstly also congratulate the team for giving a very descriptive investor presentation. Questions are answered there very well. But if more color, broader notes could be given on the Ennature Biopharma going ahead. Saket, thank you, and you are anyway quite aware of our business each time and are well prepared, and you also ask difficult questions. Anyway, look, we have spoken about it for some time. The strategy has been, first of all, to continue to maintain market share in this dynamic market, which we have done quite well, as you can see. Our top line has been growing. Our market share, particularly in the domestic market, has actually increased. There have been various factors which have been policy changes in the international market and competition, which has put pressure on margins. However, we are confident that the business longer term is the right business to be in, but needs the right strategy, which we are following, and the right strategy is this. I think the first thing is to penetrate the developed markets. We are working on several fronts over there. For example, it needs several regulatory approvals in those countries, which we have been working on. It needs improving our standards and certifications and compliances in-house. For example, we are working on upgrading our Ennature facility to US FDA audit compliance, and the audit has been completed. As and when that gets certified, we will be in a better position to market our products into the developed market. That is one part of the strategy. The second part of the strategy is innovation, to look at delivery formats which are much better. As you know, these products like curcumin or nicotine or thiocolchicoside can be converted into various delivery formats, which the pharma companies or the food companies value for their therapeutic benefits. That is the other thing. The third pillar of growing this business, which is also the right strategy, which is also somewhat more time-consuming, is to push for branded nutraceuticals, which therefore establish ourselves as a brand in two ways, either through our products or follow what we sometimes loosely link to the Intel Inside model, where our brand is a co-brand to important brands within India or abroad. Whilst I completely recognize where you are coming from and accepting your concern about the pressure on profitability, there is a silver lining. Our top line has been growing. We are working on the right strategy to improve our standards, compliance, certifications within India to get regulatory approvals or approvals by customers abroad to focus on branded nutraceuticals and innovation. That is what I have to say about the business. Right, sir. It is heartening that the revenue is growing, but further disheartening that even on improved top line, the profitability has halved from the last 9 months. That was the key reason. You very well explained what steps we can take to improve the same. Sir, coming to the presentation part, I think we should also try to incorporate the debt position, the net debt position, and the movement of debt also in one of the slides so that covers that. That is the missing piece, according to me, in our presentation. Anandji, if you could just give me the net debt number as on December 31 and the current maturities pending every March. I will just tell you, although whatever you have suggested that we will take up. Generally, on a quarterly basis, we have a repayment of about INR 60 crores. On a yearly basis, we have a INR 240 crores repayment on the term loan. Right now the company is having an outstanding term loan of about INR 1,200 crores. Okay? Right, sir. This is the position. This time you can see that finance cost has gone up. That is only because of that the project has been completed and the finance cost has been charged to the interest, because earlier till the project had not been completed, that was capitalized. The interest rate has slightly firmed up because of the overall increase in the interest rate by the banks. We are fighting, but let's see how we can reduce the cost. Okay. Lastly, if I may, if the time permits, sir, firstly on the ENA dynamic, if you could just throw some more color how the pricing on ENA dynamics have been. Again, sir, for the valuation aspect for which Raju sir was elaborating about the IMFL part of the story. We are clubbing the government-regulated business of grain-based ethanol and the liquor part. Does that gel better for getting the right valuation going ahead, since other liquor companies may or may not be having this under their portfolio? Wherein the margins in the near future look subdued and get diluted because of these two business getting clubbed. This is the overall restructuring which we are doing. That was my query. Saket, look these decisions, there are two things. One is margin percentage, the other is absolute margin. On one hand you may look at margin percentage, but there are certain synergies as well. If you have an alcohol business, you have the option of manufacturing your own alcohol, be it molasses-based, be it grain-based, control your own quality, and you may sell it to others as well. In that sense, it brings synergy in terms of backward integration. It brings synergy in terms of better control on quality. It brings synergy in terms of being able to leverage your ethanol business and get scale by supplying to biofuel as well as potable spirits or maybe even selling to others. Now your question is that what happens to percentage margin? Well, percentage margin is one factor, but the overall profitability and resilience of the business also improves. There could be various ways of looking at it, and there are also ways of how the hardware and the plant can be segregated or how they cannot be segregated, what's the best possible fit. So far in the wisdom of people who sat together, this seemed like the most optimal way going forward. Right, sir. And for the ENA dynamics, sir, you can give some more color on how the price. Gentlemen, I just wanted to highlight one point. Please, sir. Can you hear me? Yes, sir. I can very well, sir. Loud and clear. ENA is in a unique position in spite of making the largest, or if I may say, largest ENA producer or among the largest ENA producers in the country. We have almost 100% captive consumption. As our CEO rightly said, there are three benefits for IMFL particularly, because I specialize in IMFL and liquor. One is consistency of supply. Our ENA, just for your knowledge, goes to Bacardi in Nanjangud, which is in Karnataka. Karnataka is abundant on ENA, but they only buy our ENA from Kashipur, transported there because of the brilliant quality. Number one. Number two, our captive consumption is increasing so much, particularly for IMFL and Country Liquor that we naturally get the benefit because it's from one tank to the bottling line. So lot of headache of transportation, freight, GST, interstate, the movement expenses are all avoided. Third is best servicing, because as our CEO said, consistency of supply. So we are in unique position. We use as much ENA as we produce. What better backward integration do we need? Yes, sir. Will you shed some light on the pricing, sir? Our CEO has already told you. Pricing, I didn't get your question, Saket. Can you repeat? Sir, what is the pricing dynamics of ENA right now? Whether the prices have moved up as per the demand supply, or how are ENA price currently, quarter-on-quarter or year-on-year comparison can be given. You want to? Saket, I would like to add over here is that, ENA business is looking pretty promising right now. Since in the new tax regime, when it has moved to the state to decide the taxation, the opportunities are opening up in the immediate and the medium future. Also we are looking at export markets, but you see that our own consumption of ENA in the Country Liquor and IMFL segment is increasing, and we are becoming a strong player within the state. So obviously the net sale in the state of IMFL and CL is being taken up as a larger share of IGL. The rest of the sales left in the distillery market, though right now available, but as our share increases, will slightly be impacted because of our own consumption. There are other alternatives like we are supplying in the pharmaceutical segment as well as in the perfumery and deodorant segment. Plus, we are looking at certain export markets in the Middle East and, say in the East Africa region. So pricing right now is pretty good. It's moved up a bit. Over a longer term period, we will have to look at what is the final tax structure and how the margins work out over the next few months. Thank you, sir. Mr. Saket, may we request that you return to the question queue for follow-up questions, please. The next question comes from the line of Rohan Patel from Turtle Capital. Please go ahead. Hello. Thank you for the opportunity. My question is regarding our potable spirit business. What we have understood is, we are the largest player in potable spirit in Uttar Pradesh and Uttarakhand, leading the spot in that. But the second-largest player and other new players that are coming, they are not making the margins as high as we do. Even the second-largest player isn't making that much margin. They are in somewhere near single EBITDA. Last year they were in negative EBITDA, and they are guiding for lower double-digit EBITDA next year. We seem to be making very high level of EBITDA margins. So can you explain us the difference in our margin profile and theirs? Maybe you can explain yours, why do we have such a high margin? See, I think we have a decent margin. There may be players who are playing in more niche volumes or niche markets. We have a combination of a business, which is the Country Liquor business as well as an IMFL business. That gives us some resilience in the sense that the Country Liquor business is more steady, both in terms of volume, as well as in terms of margin, as well as in terms of a short feedstock, for example, molasses. We believe that some of the things that Raju spoke about, I spoke about, the fact that we have in-house ENA helps us reduce our costs, helps us reduce our supply chain costs. Lower margin, please. We have our plants which are integrated. I told you that we make a lot of ethanol, so therefore our scale is much higher, which means our utility costs are lower. Raju mentioned about the fact that there is a tank, we don't need to take it in trucks to another place. We can just pipe it and use it. Then, of course, there is also, having said about cost, when you are in the consumer market, it is also about pricing. The pricing is about positioning, pricing is about strategy, pricing is about delivering a perceived value by the consumer. These are set of these factors. It is good to hear your observation that we are making healthy margins. We would actually like to improve them. That's right. Coming to your 2024 numbers, like potable spirit was near to INR 950 crores. Out of that, how it would be Country Liquor? Yeah. The country liquor ballpark. You are talking about last year? Maybe last year and as well as this year, ballpark, if you can share the percentage. In percentage terms, what would be the ballpark? I will let you know, ballpark. Can you give me a second? Yeah, sure. In terms of top line? Yeah, top line. See, in terms of top line, roughly 60% of our business is Country Liquor. Roughly. Maybe you can get into more details with Anandji, but you wanted a ballpark, so that's how it is. Yeah. We can finally assume 50%-60% would be your Country Liquor out of whole potable spirits. Is Country Liquor with the same margin profile as overall potable liquor? Maybe IMFL might be having higher margins. Look, IMFL also has higher costs of marketing costs, packaging costs, and so on. For us, it has been kind of similar. I do not have the exact numbers with me, in terms of Country Liquor and Potable Spirits, but yeah, they are kind of similar. Some brands in IMFL make higher margins, but we also need to input that we are a relatively newer business and we are also investing in improving our channels, et cetera. Yeah, right. See, the good point about Country Liquor, particularly in Uttarakhand, is if you go into details, and it is in public domain, we have a very good market share. Out of eight bottles sold Country Liquor in Uttarakhand, seven to eight bottles are of IGL. So that shows our dominant position, if I may use that word. It was all properly done. We are the only company which has got Tetra Pak machine, and which is a huge capacity, which competition does not have. Naturally, we have our own ENA, we have our own Tetra Pak capacity, so we are able to corner most of the business of Country Liquor. Though it is not fair for me to exactly give you the figure, but the Country Liquor margin is higher than the IMFL margin in Uttarakhand, where we are leaders. As opposed to U.P., where the margin, because U.P. is a very large state with lot of players, so naturally the margins are under pressure. But the good point about Country Liquor is it is all quota-based. Now, what is quota? If you understand this, then you will get how sustainable our Country Liquor business is. See, as opposed to IMFL, in the Country Liquor, there is a quota. In other words, the wholesaler has to buy a certain volume every month after month, to give certain revenue to Virgo, et cetera, resulting in a certain assured income for Country Liquor for us. The consumer behaves in such a manner that naturally certain regions have gone to certain brands. Since we are leaders, particularly in East and Central U.P., we are in a very dominant position. To sum up, Country Liquor is very consistent, quota-based, and assured income. The margins in U.P. are satisfactory, but the margin in Uttarakhand is very handsome, and in the foreseeable future, they are likely to remain as such. This will become a very big revenue stream for us. Yes, of course, IMFL gives a multiple, but as our CEO said, it requires time, it requires marketing inputs, but on a long-term basis, IMFL any day will give us huge value, both top and bottom line to the organization. We work very closely on these segments on a day-to-day basis. The MIS control systems are so brilliant here that every day we get exactly what is happening into the market. This is not the forum to talk about, but the processes are brilliant here, and IT controlled very nicely. Everybody knows on SAP what is happening transparently, and that is why perhaps the investors are quite happy with the work we do on Country Liquor. Well, that was a satisfactory answer. If you allow me, I have couple of more questions for you. Sure. Yeah. You satisfied? Yes. I just wanted to dwell into the distribution. You just talked about the quota base. The quota that is out there, is it for a segment of liquor, like for Country Liquor, for IMFL, or is it a brand-based, like a wholesaler or retailer has to buy certain brands of Country Liquor? Naturally, it can't be brand, because brand is depending on the consumer choice. But it is the retail college or the wholesaler has to buy a certain quota, and because actually it's related to revenue. Because he has to buy. For example, in Kanpur, the quota is, say, for 1,000 cases per day. So they have to buy 1,000 cases per day. If they don't buy, they have to pay cash into the exchequer. So they might well sell that 1,000 cases resulting in business to us, consistent business to us. This is the duty of Country Liquor. Okay. Because they have legal status. Yes. Considering that your dominant position, this quota-based, this might give you a very close competitive advantage compared to somebody else who is coming into U.P. because you know the distribution way better, the retailers way better, and can push your IMFL brands forward. Yeah, just one point, in addition, maybe you already mentioned it, that by and large, all states or at least U.P. and Uttarakhand, the Country Liquor that they supply in their state are sourced from Country Liquor, which is manufactured within the state. Okay. Great. I am talking about the IMFL initiatives that you are bringing the more premium brands. The understanding of industry dynamics, the distribution, being in this field might help you compared to somebody who is the other IMFL brands that are coming into the state. Yes. By all means, yes. Okay. Fair enough. If I have any more questions, I will get back into you. Best of luck for future. Thank you. Thank you. The next question comes from the line of Vanshika Gupta from GRK Stock Broking. Please go ahead. Yeah. Hi. Am I audible? Yes, ma'am. Please go ahead. Yeah. I had two questions. One for you mentioned that our CapEx cycle is almost complete. Only our Gorakhpur plant is remaining. So for 2026 and maybe the next two years, how does the CapEx cycle look for the company? Maybe one year because then we will have the demerger. So let us just talk about the next one year. Then I wanted to touch upon the glycols business that you spoke about in the introduction that the revenues have declined. There is some declassification of business compared to last year, which is why it is not purely comparable. So if you could elaborate on that and just let us know what is happening in that segment, some details on it. Okay. Let me give you a qualitative answer on CapEx first because I do not have specific numbers for the years ahead on CapEx. If Mr. Anand Singhal wants to add, I would request him to do so. Look, there are several opportunities that we continue to chase in various businesses, particularly the potable spirits business and the chemicals business, because they are more significant compared to Ennature Biopharma in terms of CapEx intensity. As we grow the IMFL business or the Country Liquor business, from time to time, there are two capacities which are important. One is the ethanol capacity. We have added significant ethanol capacity already. As far as our captive consumption is concerned, we are more than covered. Supposing we have more need for captive consumption of ethanol into the potable spirits business, we can always, if required, sell less to biofuels, divert more to potable spirits. So that we are more or less covered, except that from time to time, as this goes up, we may need to put up capacities to make ENA or Extra Neutral Alcohol, which need a higher level of purification, which does not need too much CapEx, but based on need, we have been increasing our organic capacity, and if there is need going forward, we will augment it. The other CapEx in the liquor business is about putting up blending and packing lines, where also most industry takes a modular approach. It is not something where you put up one big plant. You can continue to add lines, which are kind of largely it is about assembling them and putting them up. Many of these lines can be changed from doing one brand to another brand and so on based on how the market is. So we do not expect a huge amount of CapEx, but we would be doing CapEx, which will be required to support the growth in the business, which may be in terms of ENA, which may be in terms of putting up lines. As far as the chemicals business is concerned, we expect that we will probably have incremental but not huge CapExes going forward to expand our value-added specialties portfolio. We do not have a number fixed for it. We are working on a large number of projects. As those projects justify, we will add more capacities to add more CapEx. That is based on business requirements. The other question that you had was on chemicals rather than only glycols, and I will comment on it a little bit, and I will also comment on glycols. If you look at only our glycols business, I mentioned to you, and I will give you a little bit of a breakup in terms of how we've looked at our overall business. Our glycol ethers and glycol ether acetate business in 9 months, sales have been more or less flat, but our gross margins are up by 42%. Our glycols business, our sales are up by about 26%, and our gross margin is up by about 83%. Now, these are not as granular numbers that we report on the stock exchange. But since you asked me a question from my internal management meetings, what we review, I'm letting you know. Our specialties business, which is small, has again seen excellent revenue growth of about 300% and a contribution or gross margin growth of about 183%. Our biopolymers business has declined slightly. It's a smaller business in terms of top line, but the gross margins have been flat. Our gases business has seen a revenue growth of 16% and a gross margin growth of close to 38%. And we also sell a methane oxide. That business has seen some decline in revenue, but has seen a contribution increase of about 72%. I mentioned earlier that for 9 months, the chemicals business, other than Extra Neutral Alcohol, and I am separating Extra Neutral Alcohol, because going forward, Extra Neutral Alcohol will become part of the alcohol business. And if I separate what is JV, which is based on an agreement and contract, has seen a top-line growth of 13% approximately year-to-date, and a gross margin growth in excess of 50%. To put these things in context, it is not a business which has been falling apart or not doing so well. I think we've had challenges, but it is a business which for the period so far, has done quite well. And even the glycols business, I mentioned to you that our contribution is actually up close to 52%. In fact, we've added a large number of, just specifically the glycols business, we've added a large number of new customers. So we've had a very interesting story in glycols, where if you just go back 5 years ago, almost 95% of our business was with Coca-Cola. And that business we have completely lost because of rPET related mandates in the U.S. Now, interestingly, whilst our volumes declined to as low as close to 30%, and I don't know the exact numbers compared to when we were doing that business, we reclaimed 85% of our margin because of developing more niche, more people who pay a premium for greener products, et cetera. So I think the business has been growing steadily. The business is strong. And I would like to assuage your concerns about the chemicals and the glycols business. Thank you. Ladies and gentlemen, our last question for today comes from the line of Ram Mohan Jayaram, who is an investor. Please go ahead. Am I audible? Yes, sir. Please go ahead. Yeah. Okay. Congrats once again to the board on a very good set of results. Also congratulations on the bold move for the demerger because this is much desired, especially in the context of potable liquor. Okay. So just my one observation is that long-term value basically comes from investing in our own brands, okay? Vis-a-vis, say, also getting revenues from, say, collaborations with Amrut or with Bacardi. Okay. So I just want to understand how big are our own liquor brands, IMFL brands, compared to the Amrut and Bacardi. There are three types of arrangements we have got. One is co-packing for Bacardi, which is like contract bottling. But since we have made investments into maturing the spirit and so many other aspects, the returns are there, but that is steady. But we have no control because Bacardi does all the selling, distribution, investment, everything. The second one is the organic growth that we get from our brands. So in our mind, it is very clear that up to premium brands, it will be all organically done. In other words, Amazing Vodka and our whiskey, Amazing Whisky. Because the consumer does not drink premium brands without a company legacy. That is why you find only top multinational companies are able to corner most of the premiumization story in India. Indian companies do not have the legacy of quality or scotch. People struggle. The fatality rate in premium segment of INR 1,000 plus is very high. In order to insulate ourselves from that risk, we have tied up with Amrut. Now, it is not a partnership. It is a royalty on a very long-term basis, and we give a certain royalty. Everything else comes to our bottom line and top line in terms of we make the investment, we do the marketing, we get the profits, everything we are doing. Because these are non-malt brands. Amrut, being a parent company doing malt whiskeys, are able to concentrate only, they have bandwidth to do only top-end malt whiskeys, while all other brands, premium IMFL brands, we are doing. To put it in simple words, once we give the royalty, which is defined in the agreement, the entire top and bottom line comes to us. So it is like for so many years, the brands belong to us. Rajeev, can I add to that? So, you mentioned this that value is created only if we have our own brands. Well, I would like to believe that it is partly true. Remember, we didn't start like a Diageo in this space. So we started because of our strength in ethanol. Yes. Moved into ENA, moved into country liquor, then started to take baby steps in the IMFL space. So the logical right strategy for us to do is to, first of all, establish ourselves as a quality manufacturer, and what better than being a very good partner of big brands like Bacardi and Amrut. First of all, this gives confidence to us to be like an internal side or to be like an important API supplier to a big pharma company is no less value-creating than only doing brand. It is differently value-creating. It may not give you the entire profit margin on the entire value chain, but it gives you a significant amount of profit, as Rajeev explained. Also it gives you much more resilience in terms of your business. Supposing you are an important component of big brand. Let us assume you are a very important component of what Diageo does, what Bacardi does, what Amrut does. It is a strong building block for you to also build your own brand. Honestly, looking at where we started our journey and where we are going, to be an important partner to reputed firms who have strong, steady building market share, in my opinion, I might like to make my case, is a stronger case for sustainable value creation than a weaker case. Okay, got it. Thank you very much. I basically see this as there are significant learnings from being associated with such quality brands, and hopefully those learnings will go into building stronger brands for our spirits division in the future. Thank you. Yes. You summarized it well. Thank you, sir. Ladies and gentlemen, that brings us to the end of the question and answer session. I now hand the conference over to the management for closing comments. No, nothing more from my side. Thank you for organizing it on behalf of IGL, and I think it was a good conference in many ways. There was no disruption, voice was clear, and good we could clear the queue in terms of questions. Thank you very much for sparing your time and going through the details of the organization and asking us questions, giving us the opportunity to explain our position and clarifying questions or doubts that you had. Thank you very much. Have a good evening, everybody. Thank you. Thank you. On behalf of Nuvama Wealth Research, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.