Q4 23/24

May 30, 2024

Summary

FY24 revenue grew 24% and EBITDA 34%, with biofuels and potable spirits driving growth. FY25 priorities include using new capacity and growing value-added products, while input costs and market pricing remain risks.

Good evening, ladies and gentlemen. I am Soumya, moderator for the conference call. Welcome to India Glycols Limited Q4 and FY 2024 earnings conference call. 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 and then zero on your touchtone telephone. Please note that this conference is being recorded. I would now like to hand over the floor to Mr. Rohit Sinha. Thank you, and over to you. Thank you, Soumya. Good evening, everyone. Thank you for joining on India Glycols Limited Q4 and FY 2024 results conference call. We are joined on this call with India Glycols management, represented by Mr. Rupark Sarswat, Chief Executive Officer, Mr. Anand Singhal, Chief Financial Officer, Mr. Rajesh Marwaha, Head of- Voice is very bad. Sir, the voice is not clear at all. Can you hear us clearly? Am I audible, sir? Better. Slightly better, but because it was very woolly, your voice. Okay. I am starting again there. Apologies again. Good evening, everyone. Thank you for joining us on India Glycols Limited Q4 and FY 2024 results conference call. We are joined on this call with India Glycols management, represented by Mr. Rupark Sarswat, Chief Executive Officer, Mr. Anand Singhal, Chief Financial Officer, Mr. Rajesh Marwaha, Head Sales and Marketing, Bio-based Specialities and Performance Chemicals division, Mr. Ashish Sharma, Head Ether Business, and Mr. Ankur Jain, Head Legal and Company Secretary. I would like to invite Mr. Rupark Sarswat to initiate the proceedings with his opening remarks, post which we will have a question and answer session. Thank you, and over to you, sir. Yeah. Thank you, Rohit. A very good afternoon to everybody who has joined on this hot summer afternoon, particularly from a Delhi perspective. But before we start, I just want to make sure people are able to hear us clearly, because we could hardly hear Rohit clearly. Can somebody check with some people who have joined? Because otherwise I will go on. They are anyway on mute, so I will go on for 15 minutes, and then we will not know whether people heard anything. There is no feedback mechanism, no? Can you hear me? Yes, sir. We can hear you, sir. I just want to make sure, because Rohit's voice was clearly not audible. It was very woolly, so we couldn't figure out what he's saying. I just want to make sure people who are attending the call are able to hear us, because they'll not be able to give us a feedback if they're not able to hear us. Yes, sir. Your voice is so clear, sir. I'll just unmute a participant. You can get the feedback. You can just check with them, yeah. Sure, sir. I've unmuted Ashish Sharma, sir. Can you hear us? I just wanted to make sure. Yes. We can clearly hear you. Before this we couldn't hear Rohit, but we are clearly audible. Yeah. So good if you are able to hear us. Unfortunately, we are not able to hear you very clearly. Anyway, I'll go ahead then, and hopefully during question and answers we'll be better off. Okay. Once again, a very good afternoon to everybody who has joined. Thank you, Rohit. I'm joined here by my colleagues who Rohit has already introduced. I'll take this opportunity to give you some overview comments on the performance for this quarter as well as the year, and then subsequently we can take your questions. As you have seen, we've had a good year overall and a good quarter as well. If you look at the numbers in gross revenue terms, we have clocked a growth of 19% at INR 7,922 crores. In terms of net revenue, our net revenue is up 24% at INR 3,294 crores for FY 2024. In terms of EBITDA, that is about INR 428 crores, up 34%, and PAT, which is INR 173 crores, up 23% for the full year. So overall, there is a good performance both in terms of revenue and profitability. Particularly, it has been led by both top line and bottom line performance by the BSPC segment, which is essentially chemicals and biofuels, as well as potable spirits. A particularly good start as we added capacities for biofuels in the biofuel segment. As we have spoken over the last one and a half years, it is in line with what we had anticipated after putting up grain-based capacities for ethanol, which has allowed us to do a risk mitigation as far as ethanol supply and costs are concerned. Now the situation is that we are importing significant quantities of ethanol for our chemical intermediate production, which has meant that the capacities that we have put up is now available to therefore contribute to the biofuels revenue as well as contribution. For the quarterly performance, the gross revenue at INR 2,039 is up 23%. The net revenue at INR 926 crores is up 50%, and EBITDA at INR 109 crores is up 9%, and PAT at INR 42 crores is up 6%. We can see that there is a strong performance overall, both in terms of growth and net revenue. Particularly, the top-line growth has been driven by potable spirit. It has been relatively modest in the chemical segment for this quarter. In terms of high-level highlights for the company, you see a revenue growth of 24%, EBITDA up 34%, and a healthy EBITDA margin of 12.9%, which is better than before. As you know, we've had a couple of tough years, and as we have anticipated and also taken actions for, this has led to improvement. In terms of our, I already spoke about grain-based capacities and the new biofuels portfolio helping us both top line and bottom line. In potable spirit, sales were driven mainly by increases in country liquor sales, with both good performance in Uttarakhand and U.P., where we are close to or market leaders, particularly in Uttarakhand. In IMFL, most of the growth has come from our new market, which is Delhi and the paramilitary segment, and we will talk about it more later on. As you know, our key feedstock is ethanol for multiple businesses. The cost pressures on ethanol to some extent have continued, with high international ethanol prices. Also, they are not as high as they were earlier when we spoke about, say, one and a half years ago. What has also happened is that in the biofuel segment, there has been some volatility with respect to costs of grain and sale price of DDGS, which has meant that there have been periods in between where the margins of grain-based ethanol being sold as biofuels have been a little soft. Ennature Biopharma, a relatively smaller segment for us, has registered a growth of 7%. However, here we've seen margin pressure in particular due to a challenging market, price erosion in nicotine and API segment. Having said that, I think the strategy is on track. We are focusing on long-term risk mitigation and building a pipeline of value-added products. We've also been talking about new value-added products, and I am happy to share that there is a steady and a good start to commercialization of projects in the new value-added pipeline. In fact, we are expecting the plant to be fully commissioned in about a quarter's time, though we've started significant production already. We are anticipating that the capacities that we have put up, even though they are not very large to start with, and that was part of a strategy to have a modular approach. We are expecting that those by and large, taking a little bit here and there, will at least in some sections get fully occupied in the current financial year and we may be talking about incremental expansions to take the value-added chemicals portfolio ahead. Joint venture with Clariant. As you know, we have a joint venture wherein we have put in a specialty chemicals business a couple of years back, IGL getting 49% of the share, so that reflects on our overall profit performance. There has been a strong recovery in margins in joint venture performance, mainly driven by a reduction of material costs. As you know, we have spoken earlier, one of the key factors which affects, amongst others, the joint venture performance is the cost of ethylene oxide, which IGL supplies to the joint venture. For the factors that I have discussed, which is energy cost increases, which have moderated, which have come down for ethanol costs, which have come down with a moderate rate, plus the fact that we have put up our own grain-based ethanol capacity, has meant that the price difference or the cost difference between crude-based ethanol in the market and ours has come down, though the delta is still there, and therefore the relative competitiveness of the JV is better. So Q4, for example, for the joint venture show revenues going up 3% and EBITDA, though on a smaller base for the constraints that we said, getting up by 68%. For the full year, there has been some recovery. We had lost sales, so now the full year in terms of top line looks flat, and there is a modest EBITDA increase of 4%. Which is good news from the perspective of the joint venture as well. I think we will talk about it later. A final dividend of rupees eight for equity share has been declared. We are utilizing our grain-based ethanol capacities nearly fully to what we have right now to service the contracts that we have with oil marketing companies, and that looks steady. But before I move on to a segment-based commentary, what I will do is I will request my colleague, Anuj, to give you a quick update on the financial funding. Good afternoon. For the current quarter, I will state on take the results on consolidated basis. In the current quarter, the gross sale is INR 2,039 crores. This is INR 1,615 crores in the last year corresponding quarter, showing an increase of share of 26%. The net sale is INR 926 crore vis-à-vis INR 619 crore, showing almost about 50% improvement in the net sale in the current quarter. The EBITDA is INR 109 crores vis-à-vis INR 100 crores in the last corresponding quarter, showing 8% or 9% increase. While PBT is INR 55.6 crores against INR 45.64 crores, showing an increase of 31.8%. The profit after tax is INR 42 crores against INR 39.84 crores, showing 5.9% growth. The reason for this is due to the higher provision of the income tax. The EPS in the current quarter is INR 13.63 vis-à-vis INR 12.87 in the last year's corresponding quarter. To take up the yearly results for the year 31st March 2024, its gross sale is INR 7,922 crores vis-à-vis INR 6,641 crores, showing an increase of about 19%. The net sales is INR 3,294 crores vis-à-vis INR 2,651 crores, showing an increase of 24.26%. The EBITDA is INR 428 crores vis-à-vis INR 319 crores, showing an increase of 34%. PBT is INR 223 crores vis-à-vis INR 165, showing a 35% increase, and PAT is INR 173 crores vis-à-vis INR 141 crores, showing an increase of about 23%. The EPS for the current year is INR 55.87 vis-à-vis INR 45.55 in the last year. I will say as far as the operation is concerned, this year is the best year in the history of the company as far as the sales and the profitability is concerned. Thank you, Anandji. I have broadly talked about segments, but I will give you slightly more detail, keeping it somewhat short. If you look at the quarterly and annual performance for our three broad sectors, the largest one being chemicals and biofuels, or which we call biobased specialties and performance chemicals. I am consciously also saying biofuels, because that is a significant chunk of the chemicals business. So in terms of the BSPC segment for the quarter, we have had INR 623 crore revenue for the quarter, up 60%, and EBIT of INR 47 crore, which is up close to 12%. For the full year at INR 2,141 crore, the revenues are 25% and EBIT is up 35%, around INR 168 crore. Potable spirits has had a good year. Before I talk about potable spirits, let me give some additional comments on chemicals. I think in the chemicals business, a significant top-line contribution has come from the biofuels business. It is a steady business with not so exciting percentage margins. But it is something which is kind of adding significance to our top line and reasonably to our bottom line as well. At an overall strategic level, we see that we are on track in terms of what we are doing in the chemical space. We are leveraging our sustainability credentials much better. We expect that the year will be better for several of the key segments within chemicals. We expect it to have better traction as far as glycols are concerned. We expect an overall better year as far as biofuels are concerned, because several of these capacities have actually come up this year, and we will see full utilization of capacities in the current year. We expect that there will be a good addition of value-added products in terms of outcome in the current financial year. So that is as far as BSPC is concerned. In the potable spirits space, we have had a good quarter in terms of revenue at INR 247 crore, which is up 32% compared to the same quarter of last year. EBIT of INR 40 crores, up 37% compared to the same quarter of last year. For the full year, we registered a revenue of INR 947 crores, up 25%, and an EBIT of INR 164 crores, up 61%, which is a very good performance. It has primarily, as I said, being led by growth in two new areas, which is in the IMFL space, which is Delhi and paramilitary as a new segment for us. We have continued our strong performance as far as Uttar Pradesh is concerned for both our key markets, which is Uttarakhand and Uttar Pradesh. Also, you see a very good improvement in profitability, both on account of cost action as well as pricing action, which are not so much dependent only on what IGL decides, but it is a factor of getting those approved through the government as well. So it has been all in all, a very good year for potable spirits. For Ennature Biopharma, as I said, a relatively smaller segment for us. It has been a good year as far as top line is concerned. Particularly the quarter has been good at around INR 56 crores of turnover, up 28%. And for the whole year, the full year turnover at INR 205 crores is good. It has crossed INR 200 crores, if I am not wrong, Manish, for the first time, for the year? Yes. That is good from a top-line perspective. But we faced, as I mentioned earlier, some pressures on pricing because the market for nicotine and APIs has been quite competitive. A broad strategy to look at taking costing actions, and more importantly, builds the value-added pipeline is on track. So that is how we see that we will continue to take care of the business and make grow it both in terms of top line as well as bottom line. So those are my high-level comments as well as far as the various sectors are concerned, and I will take a pause now and then we can take some questions. Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press star and one on your telephone keypad and wait for your turn to ask the question. If you would like to withdraw your request, you may do so by pressing star and one again. Our first question comes from Shubh Jain from Emerge Capital. Please go ahead. Hello, sir. Please go ahead with your question, sir. There is no response from Shubh's line. Ladies and gentlemen, if you have any questions, please press star and one on your telephone keypad. We will wait for a moment while the question queue assembles. Our next question comes from Bala Subramaniam from Arihant Capital Markets. Please go ahead. Good evening, sir. Congratulations for good set of numbers. Sir, we have seen significant, am I audible? You are audible, sir. Yes, sir. Sir, we have seen significant margin improvement on year-on-year basis from 11% to 12% kind of thing, especially it comes from chemicals and potable spirits segments. We can able to go back to, if you look at 2018, 2019, that time. We have seen a margin of higher digit rates for this chemical side. Around more than 9% kind of margins we did. Potable spirits also once upon a time we did around more than 20% kind of margins. We can able to do those range in next over 2 to 3 years. In Ennature Biopharma side also, earlier, we did about 20% kind of margins, but right now it came down below 20%. What kind of reassurances we have on that Ennature Biopharma and especially in the agriculture and nicotine side. Is it good to share more details on the margin side? Yeah. I will ask my team to comment on specifically Ennature Biopharma. But if you look at overall margin over the last several years, honestly, over the last couple of years, I remember our EBITDA margin actually going up. It came down from close to 12% to 9.6%, then it went up to 11.9%, and this year we are looking at a 12.9%. So over the last few years, I can say that whilst the margins, yes, we want them to better and we would also like them to better, but if you look at the last three or four years, at an overall level, the margins have seen steady improvement. I expect that at an overall level, this trend will continue. We've had last couple of years of significant pressure, as I mentioned. Some of the cost pressures continue. But we are taking a few set of actions, and I'll comment on both chemicals as well as Ennature Biopharma at a very high level. I mentioned to you that some of the actions that we are taking are on the cost structure, which includes operational cost, efficiencies, energy, et cetera. We have a pipeline of actions which we'll continue to take next year as well. The other key thing for us is to Some things are not always entirely in our control, in the sense that, as you saw, freight, energy, and feedstock pricing for us really went through the roof over the last couple of years. That has adjusted to some extent, but not entirely. Strategically, we feel that our strategy in terms of building on our sustainability credentials, working on newer greener technology is perfectly all right, and to some extent, it is also helping us recover the margin. As I mentioned, the other key action, apart from managing the bottom line, is to enrich our product mix based on more value-added products. I can say, as I mentioned, that creating specialty chemicals businesses takes time because it needs a significant amount of R&D effort, formulation effort, application development effort, and the collaboration also takes Sometimes the collaboration with the company, even though the volumes are not that large, can take a couple of years for a product to materialize. I can only say that we are taking those actions. Those are on the right track, and as you can see, and you'll continue to see over the next quarters, our progress on the value-added product is steady. So that's a broad strategy. We understand. I think you are also probably talking about years, which is more than two and a half years ago, when we were comparing the business slightly differently because the entire specialty chemicals business was also part of the IGL portfolio. Which is now part of the joint venture. I must accept that as a percentage in the entire IGL portfolio, the margin percentage The specialty chemicals business or the then specialty chemicals business was higher and we were also operating on better times. Let me give you a little bit of context. If you have heard some of my calls earlier, I used to say that we faced a time where for a long period of time landed ethanol imported price costs to us was close to INR 35 a liter. It went up to as high as INR 70 a liter. We were also talking about those times. Costs have now come down. They have come down, but they have not come down to those earlier levels. Those pressures are there, but I also talked about the strategy to build it. As far as Ennature Biopharma is concerned, I told you about the price pressures and again, the focus on building a pipeline, but I will request my colleague Manish to give you some more comments. Yeah. Basically, as Ritu said, regarding this new value-added production that we are thinking upon in the pipeline and the prices are under stress because of this margin has become low in the nicotine area and the API product side will be beside. These two products are our bread and butter till now, but now we are in the start into the new product line in the general industrial and we have certain leads in the U.S.A. and Europe. Hopefully, this year turnover would be at least increase by 45% and the margin would be much better than the earlier. Got it, sir. Sir, on the utilization, like last quarter you have mentioned triclocarban INR 4.2 lakh per kg and nicotine INR 7,000 per kg. What are those in current level, the price points? Currently, the nicotine is low as around I have to check the current prices. I will get it to you separately. Fine, sir. On the power cost side, it is continuously coming down in terms of sales. Right now in this quarter, 7.8% is our sales. We have seen significant improvement on the power cost side. Sir, we have signed agreement with ReNew Green to procure captive wind and solar hybrid power. It is expected in this year, which quarter supply is expected and whether this trend will continue or how do we see in coming quarter? If you have read some of our updates that we have given, we have already given an update that there has been a delay as far as ReNew is concerned. The delay has been explained on account of change of certain regulations or court directions, based on which there are certain challenges, which is what ReNew have told us in terms of the current structure of group captive. What this means is that we are in discussions with ReNew to look at it again, which means that we are not in a position to give a timeline on when we will be able to realize those benefits. However, we are continuing to pursue not only ReNew, but also are in discussion with other companies as to how we can look at not only low cost power but secure green power for our operations. Having said that, I may also add, which may be of interest, we have not spent any money as far as ReNew is concerned so far, especially after we have come to know that there are some challenges. We are in discussions with ReNew and also some other people who can potentially supply us green and cost-effective power. Got it, sir. On the NSU side, commissioning is expected in Q2. What kind of volumes we can expect in coming months? Earlier you mentioned around 150 metric tons, whether we can able to 200 or 300 in that range. Yes. This is a plant with multiple capabilities and multiple reactors. A significant portion of the plant has already been commissioned. But we have said that complete commissioning will happen when it happens, which is Q2, et cetera. As far as the volumes are concerned, I am cautious that I am not going to give projections for the business, but I think in a few months we expect our monthly volumes to cross 400-500 tons per month. Hello. Sir, am I audible? Yes, sir, you are audible. Yes. Sir, ethanol, the supply started for this INR 1,164 crore order from oil companies because the contract time period is November 2023 to October 2024. We have started the supply and when the revenue recognition will happen, whether we can expect in this year? I would first like to slightly correct you. We call it allocation and not a contract in the sense that this is the allocated quantity based on what the oil companies are able to blend and pick up the material. Having said that, I think by and large, I have looked at, by and large, with a little bit here and there, we are in line with supplying what is the allocation given to us. I do not remember the monthly number. We can get back to you to send us separately. But I think by and large, we are in line with it. To some extent, we have already started clocking the revenue. And we expect that the revenue will go up a little bit as we start to cater to the allocations that they have been allotted to us. Thank you, sir. I will come back in queue for further questions. Thank you. Do you still have further questions, Vivek? Thank you. Anyway, that was our last one. Yeah. Okay, sir. Thank you. Thank you, sir. Our next question comes from Vedant Gulgani from Poddar Diamonds. Please go ahead. Hello. Hello, am I audible? You are audible, sir. Actually, my question has been answered. Sorry for that. Shall we move on to the next question, sir? Our next question comes from Manish Sitana, an individual investor. Please go ahead. Yeah. My question is regarding the country liquor space and with the new excise policy being announced by the government of Uttarakhand. How do the company foresee that impacting our top line and bottom line in terms of the margin as well as the sales figure? Yeah. As far as country liquor policy in Uttarakhand is concerned, it is quite favorable because of two reasons. One is we have got a higher selling price, we call it ex-distillery price, which everybody has got because it is as per the slab. The second thing, because of the foresight of our top management, we have been very quickly able to install a Tetra Pak machine. This is the first time in Uttarakhand. I will give you a small background. Because of the Ganges, plastic was not allowed in Uttarakhand for so many years, ever since Uttarakhand was formed. But now, as the policy changed, from April 1, Uttarakhand excise has seen reason for them to bring Tetra Pak for country liquor as well as IMFL. As our CEO rightly said, we are leaders in country liquor as far as Uttarakhand is concerned. Now, we have been able to quickly garner all the resources, and we are the only supplier of Tetra Pak in Uttarakhand. Now, so much so that we are following a steady build approach. We can dump a lot of Tetra Pak into the market, but we want both the bottle as well as Tetra Pak to coexist. The margins in Tetra Pak naturally are higher because there is no glass bottle, there is no cap, there is no label. It is only a smart pack, if I may say that. So we will be able to harness the first-mover advantage. As you know, in our various calls, there are only two major players in Uttarakhand. We are there and another is Radico Khaitan. Radico Khaitan does not have Tetra Pak machine. In foreseeable future, we don't see because it is highly capital intensive. It is a very sensitive thing. It is not like any other machine. It requires lot of care for various reasons. Now, the first initial reports of April and May are encouraging, and we have made our very good mark as far as country liquor in Uttarakhand is concerned. It will not be fair for me to give you a figure, but I can only say we will be able to get most of the country liquor sales, whether in bottle or Tetra Pak in Uttarakhand. Secondly, since the policy allows Tetra Pak for IMFL also, so we have a definite plan to introduce Tetra Pak in IMFL as well. IMFL already we have about more than 25% market share. The third step we are taking is introduce new premium brands, which is as far as all other states are also concerned. To sum it up, we have two, if I may say, sustained competitive advantages. One is we are the only company to have quickly installed a Tetra Pak machine and also given the output. Though the consumer acceptance, I cannot make a statement that it is successful. It's yet to be ascertained. But the first reports are encouraging. But only over a period of three months to six months, maybe one year, we'll be able to make a statement that Tetra Pak will overtake glass bottle. The second is the price increase in realization. So these are the two changes of Uttarakhand country liquor and IMFL. The price increase that you're mentioning would certainly translate into a better margin, I may say so? Yeah, definitely. Yes. Definitely. Okay. My second question is, sorry. No opportunity to discuss much details, but we are very focused. This is our home state. Yeah. We are quite focused. Yeah. My second question is on certain financial aspect, which we are bifurcating some cost of material consumed and purchase of stock in trade, which was not that amount in, let's say, March quarter of the last year. What is the difference between the cost of material consumed and the purchase of stock in trade, and why are we showing them separately here? Why we are not showing them separately? Why are we showing, and what is the difference between the material consumed and the purchase of stock in trade? What is the difference? I want to understand the difference between the two items. The stock in trade is basically the stock in trade with line, while the material consumed is basically the material actually consumed by the company for the different products. Are these materials again of our raw material or consumables or what exactly are they? This is basically the molasses and the alcohol. You are referring to material consumed or stock in trade, purchase of stock in trade? I am asking a line item which in the current quarter was INR 115 CR. Stock in trade is basically the trading activity which we are doing for some of our products. Well, I still didn't get you. If it is a trading activity, why is it being shown as an expense? Because corresponding March quarter was INR 2 crores and this quarter it is INR 115 crores. So what exactly is the difference? This is basically the material which we on the trading activity. And this figure is basically the balancing figure, which I can say has been shown as a stock in trade. I'll get back to you separately on this. Thank you. We'll give you the clarification separately whenever you ask. No problem. Thank you so much. Thank you, sir. Ladies and gentlemen, if you have any questions, please press star and one on your telephone keypad. We will wait for a moment while the question queue assembles. Our next question comes from Rohit Nagaraj from Centrum Broking. Please go ahead. Thanks for the opportunity, and congrats on good set of numbers. Sir, my first question is on importing ethanol. You mentioned that you have started importing ethanol. However, recently we have seen that there is again surge in terms of logistic cost. What is your assessment of the situation, in terms of the incremental imports, whether there will be again cost that will go up and will it have impact on the margins? Just a broader view on the same. Thank you. Yeah, Rohit. Good to hear from you after a long time. How are you? All well, sir. Thank you. Rohit, you understand our business quite well. You have covered it for a long time. I think, yes, overall, there is some increase, as I mentioned. There was softening of imported ethanol prices, which went up to 47, 48 or thereabout in terms of the weighted average that comes to us, then it has gone up a little bit. So there is some increase, but at the same time, given the option that we have for what we produce in-house and sell it for biofuels, it still usually makes sense to use imported ethanol for making chemicals. I expect that will continue for the foreseeable future. Foreseeable, as you know, depends on so many things. But I see that will continue. I expect that there will be some volatility, some increases, but overall, I do not expect a significant amount of dent either in terms of our top line or our bottom line. There may be some, but I think compared to what we've seen over the last 2 or 3 years, it is relatively nominal compared to that. Broadly, I don't see our numbers or our top line getting significantly impacted because of that, as of now. Sure. Got that. Sir, second question is on potable spirits. I think we have been doing geographical expansion. So where are we currently in terms of reaching beyond the existing geography, and what is the plan in terms of going across different states over the next maybe 2 to 3 years? Thank you. As you know, we have, as our CEO mentioned in the beginning, we have almost added new two verticals or two new areas of business. One is Delhi. Delhi, we changed the RTM, as we say, route to the market. We were earlier working through the distributor. Now, the company has put focus and seven brands are already there in Delhi market, and there has been a phenomenal growth. There is focus on Delhi market. Plus, what has happened is, as far as paramilitary business. Paramilitary, it consists of the BSF, CRPF, ITBP, and SSB. Now, what was happening earlier, for so many years, all these four formations would give tenders separately. Last year, as luck would have it became one tender, and we could see it quickly. I am a IMFL person, and I understand this fairly well. We quickly applied for tendering in all five brands. To our good luck, all our five brands, because of our quality consciousness at Kashipur, where we also co-packed Bacardi for so many years, and we are known for good quality IMFL. Our five brands have done very well, and we are among the top sellers to paramilitary. Now, the good news is, again, the tender came a few days ago, and we have been able to add two more brands, and we will be able to take the volumes up. But mind you, this paramilitary is a limited business. It is not CSD. CSD is army, while this is paramilitary forces. There is moratorium in CSD till 30th of June, and we are quite prepared. There are certain restrictions, as you would know, since you're asking particularly IMFL question. There are certain restrictions on quantity achievement before you introduce brand into CSD. We have been able to do so on two of our brands, and that we will apply. Now, it is very easy to increase the geography as far as the IMFL is concerned. But our top management has taken a conscious decision to go steady build, as I said, and also improvement in margins. So at the moment, we have made Delhi successful, paramilitary, and Uttarakhand, of course, will blossom, if I may use the word, and U.P. will be steady, which is our second home state. At least in the next six months or a year, we do not have any plans to add new states. Instead, we have all the plan to introduce premium brands. Because it is very easy to start new states, but the kind of exposure that the working capital requirement is so high, and open credit has to be given. We don't want to lose money in the business. So as a strategy or as a conscious step, what we have done, we are not increasing in this year more states. Instead, we are bringing two more new brands. I'm glad to inform you, it is already signed and under production. We have tied up with Amrut Distilleries. Amrut Distilleries, as you know, is a world-class single malt company. They have visited our unit. They know about us because of the Bacardi co-packing, and we have got their brand called MaQintosh. Amrut is not a listed company, so you may not be able to have access, but it is underway. Excise approval has been given. We have got the license. So MaQintosh Whisky, which is a 35-year-old whiskey of the company, we will be making on royalty. Royalty or franchisee route. In other words, we will be investing into working capital and also making all the profit and giving away a certain sect of royalty to Amrut. This is the first time Amrut has tied up with another company in view of our quality standards. So this is one step. Another is, our Amazing Vodka has been quite popular and successful in the last three years. Wherever we launch, we are among the top three vodkas, whether it is in Delhi, whether it is in U.P., whether it is in Uttarakhand or any other state, we are among the top three. We want to sustain and extend this success to another flavor. For obvious reasons, it is not in public domain, so I cannot give more details, but these two steps we are taking in IMFL. We are quite poised. Sure, sir. Thanks for that elaborate answer. It clarifies a lot of things. Sir, just one last question in terms of investments in pipeline. What are the current investments across the segments which are currently underway, and what is the plan of capital expenditure for FY 2025 and FY 2026? Thank you. For the current year, there are two major expansions which are going on there. One is the increase in the capacity in Kashipur from 400 to 500 KLPD, which will be ethanol manufacturing. For Gorakhpur, we are increasing the capacity from 110 to 280 KLPD. These are two major CapEx, and there may be some expenditure on NSU, because I think there will be some expansions depending upon the market demand. These three are the major expansions for 2024, 2025. After that, we are not planning for any major CapEx in 2025, 2026, except the maintenance CapEx, which will be ranging from INR 40-INR 50. Just to add there, I think based on how some of our new chemical businesses opportunity is built up, as I had mentioned earlier, we may be looking at some incremental capex, but it is not something that we have firmed up right now. Sure. Fair enough. Thanks for answering all the questions and all the best, sir. Thank you. Thank you. Thank you, sir. We have a follow-up question from Shubh Jain from Emerge Capital. Please go ahead. Thank you, sir, for the opportunity. Couple of my questions have already been answered. Just one question. Can you please give some color on our debt profile and how we plan to reduce it and over what period of time? Currently, our debt position is about ₹900 crores, including the ETVD which we have taken about 10 years back. This year, the total repayment is about ₹350 crores, for which we have already made some prepayment amounting almost about ₹100 crores. We are also planning to make some of the prepayment out of the better cash flow. This is what is the planning. As far as the new CapEx is concerned, since we are already through with the new CapEx, I do not foresee any major term loan raising from the banks or from the market. Okay, sir. Sir, what is our average rate of interest? It is around 9. Okay, sir. Thank you, sir. All the best. Thank you. Thank you, sir. Our next question comes from Saket Kapoor from Kapoor & Co. Please go ahead. Yeah. Namaskar, sir, and thank you for the opportunity. Firstly, Ashish-ji, our closing net debt level when we will be repaying our debt, what should be the expected long-term loan level for the closing FY 2024, 2025? 24, 25? Yeah. Saket, it will be around ₹625 crore or ₹600-₹650 crore. Okay. We have closing balance of 725, which will go down to 650. Hello. Actually, I don't know from which sources you have seen that 725. My debt is around ₹900 crore as of now. Okay. Which will come down to INR 650 crore. That INR 725 crore has not included the ETVD. I am talking about the amount including ETVD. Okay, sir. Which is the export advance which we have taken about nine years back. The entire ETVD which we paid in the current year, 2024, 2025, which is about $17.8 million, and rest is the rupee loan. The entire outstanding, say, for the term loan will come down to about INR 650 crore. INR 650 crore from the current level. Sir, when we look at the cash flow, we find we have spent around INR 553 crore for FY 2024. Its breakup, sir, whereas for the two years that we have spent around INR 1,000 crore. Actually, this year, we have capitalized all our projects which has been completed. That includes NSU, that includes the grain distillery, up to 400 KLPD, and one, the boiler. Apart from this, there are some, I will say, the miscellaneous CapExes, and one is the nicotine CapEx into the hub. Right. The major amount is coming from grain, 400 KL and NSU. Okay. And for the Gorakhpur part too, INR 180 is still left to be spent. It will be spent for this year. INR 180 is in pipeline, and this hopefully will be capitalized in the current year after completion. Right. Can you give me the feedstock also now with the expanded capacity, we will be 500 for Kashipur and 290 or 280 for Gorakhpur. What percentage upon this we have to depend on the grains and how much will be the molasses? This 290 and 500 is totally on grain. Okay. These are the broken rice which we are dependent, sir? This is all broken rice. Okay. Yes, sir. Sorry. Yes, please. Go ahead. I did not get you, sir. No, I think you were asking something. There was a lag, so I spoke over you. I said go ahead and then I will respond. Yes, sir. Sir, is it the broken rice sales from the FCI? That is our feedstock. We are sourcing it from FCI only or from open market? We have from time to time looked at both options. FCI rice is currently not available, so damaged food grain is available depending upon what is the price, what is availability. We look at both options. There is no hard and fast. It is also a factor of how the government wants to make FCI rice available or not available, et cetera. We have also looked at price from the private markets. These grain plants subsequently, just to add, I think the government has a policy to diversify the feedstock for grain that we will use for ethanol. I think going forward, and we are in the process of evaluating, testing trials, et cetera, I see that significant part of grain may start also coming from corn as a feedstock. Most of these assets, with some modifications, can be used as corn as well. As you see, most of the ethanol that is produced in the U.S. is actually corn-based. I see that also stacking up in the fact. Sir, maize and corn are the same? Pardon? Hello? Yeah. Sorry, sir, I interrupted you. Maize and corn are the same feedstock? Yes. Maize and corn are the same. Just to conclude, availability of raw material is not an issue, even with the expanded capacity. Let us put it this way, that the government, if you look at various articles and the policy, is very clear to continue to push to go for 20% blending. Okay? So far, if you look at the blending program from whenever it was announced, there has been, by and large, it has, give or take, stuck to the percentage increases that we have planned. In between, there have been hiccups, where sometimes SPRI's availability, et cetera, has been difficult. We expect, as we have discussed before, that some of these hiccups will continue from time to time. But if you stabilize, if you look at a longer time horizon, I think we see that we will continue to be able to, by and large, utilize our capacities to supply to the oil blending companies because the government strategy is quite clear. The government also, when the prices have gone up, for example, if you look at grain prices when they went up, I mentioned earlier that to some extent, we saw softening of margins, but the government is supporting to some extent by increasing those prices. So we see, by and large, the business for biofuels in the foreseeable future, unless something drastic happens like a drought or something, to continue, and not only to continue, but also to steadily increase in terms of percentages. It is very difficult to have a crystal ball and give an exact forecast on what exactly will happen, but that's how we see it. Right, sir. And sir, for the last point for subject to ethanol is, for the allocation of supply, can you give the revenue which we have booked for this financial year, and the next balance we know what the contracted value is. So how much have we Yeah. I don't have the numbers completely ready with me, and we've not given a forecast either for the business or segment by segment. As I had mentioned earlier, by and large, so far, we are tracking the respective allocations. If the oil blending companies don't pick up, et cetera, those kinds of issues. See, what could be potential hiccups or somewhat derailers. Derailers is a strong word. I think raw material availability to some extent, we saw some challenges, but by and large, we cope. Picking up by oil blending companies for various reasons, that could be a potential issue. But other than that, we see that by and large, we've been tracking on allocation and we expect to track on allocation. Right, sir. And Rupakji, you mentioned about 400-500 tons per month to be the dispatches for the NSU. Can you also provide some numerical number to it? What would be the run rate? See, I don't call it a projection. I will say that give or take, depends on how it goes. And I'm not talking only about products produced from this specific asset. I'm talking about various new value-added products. We are expecting, and don't take this as a projection, is that something like in the financial year, something like INR 200 crores coming from new value-added products is something that we are targeting. As I mentioned with a disclaimer, it's not a projection that I'm giving. And hopefully, depending upon how some of our collaborative projects work out, there may be a little bit of slowdown happening, there may be escalation happening. As I said, it is a business which is different from cement or ethanol or petrochemical. This is a business that you have to build with your partners, brick by brick, based on various products. Right, sir. Sir, Satish, I am so sorry to interrupt you, sir. Could you please come back in the queue for more questions? Yes, ma'am. Yes. Thank you. Thank you, sir. Our next question comes from Meet Garha from Emkay Global. Please go ahead. Hello. Thank you for the opportunity. I wanted to ask, what will be the peak revenue potential for your company on current gross stock? Hello, am I audible? Yes. Yes, you are audible, sir. Actually, your question is not very clear to us. You are talking about for which division? This is basically for the chemical, liquor or both? Chemical and liquor separately. Pardon? Chemical and liquor separate. Chemical and liquor separate. Yeah. Liquor, I think we are already on 100% capacity. For liquor, we are already on 100% capacity. Okay. For Panilkar in Uttarakhand or Panilkar in U.P., we are already on 100% capacity utilization. For chemical, I think that's an answer. We have significant headroom in some of our base chemicals like glycols, glycol ethers, glycol ether acetate, etcetera. As I mentioned, based on how some of our new value-added products and specialty chemicals projects develop, we will be adding capacity incrementally to take care. It is very difficult right now for me to give you a peak revenue potential on current assets based on specialty chemicals, because it is a function of the product mix. I've already given you indications in terms of what we are targeting and in fact, the fact that over and above this, we will be doing incremental investment. Got it, sir. Thank you so much. Thank you, sir. Our next question comes from Pradeep Rawat from Yogya Capital. Please go ahead. Yeah. Thank you for the opportunity, and good evening to everyone. My first question is regarding the biofuel. How much of the biofuel do we internally use, and how much of it is sold in the market or to the government? Sir, we do not use any biofuel internally. Let me explain these to you slightly. It will help you to understand our business. We have three potential sources of ethanol. One, imported ethanol, which comes either from U.S. or Brazil. If it comes from U.S., it is corn-based. If it comes from Brazil, largely it is sugarcane-based. The second source is manufacture of ethanol from molasses. The third source is manufacture of ethanol from grain, and the fourth source is either of these two sources purchased domestically. None of the imported ethanol can be used either in potable spirits or for biofuels. This ethanol is then converted to various different things. It is converted to Extra Neutral Alcohol, if it is to be used in beverages, which can find way for our bottling, for example, for Bacardi or our IMFL brand or our Panilkar brand. But in that case, ethanol is converted to ENA, Extra Neutral Alcohol. If this alcohol is to be sold as biofuel, it is converted to whatever 99.9% ethanol, because you can't have moisture when it blended with fuel. That is a different technology. Taking ethanol from 96% to 99.9% is not distillation. It has to be done differently because it forms a 96%, what is known as an azeotrope, difficult to separate. This, which is dried up to this extent, is supplied to biofuels. It is not that we consume biofuel. We have different sources of ethanol. All sources cannot go into all different end applications. Some of the ethanol, which is either from molasses or from grain, which we produce, we do not buy and sell biofuel, can be converted into biofuel by drying it up to 99.9%, and therefore that goes into biofuel. We have a complex set of sums, which we do based on what is the best trade-off for us, and therefore it is difficult to give you an exact number. We have to have time. Subsequently, we can explain it to you. The reason I am saying this is, for example, if like it happened last year, if the imported ethanol became very expensive, it made sense for us to divert significant amounts of our manufactured ethanol for chemical intermediates. Now that imported ethanol has come down and we have shifted largely, except for certain chemicals which require molasses-based ethanol, to using imported ethanol for chemicals. This is a trade-off activity which we keep doing. I do not have one single number which I can tell you as a percentage, but if you do want more details, we will be happy to explain it to you in detail as well. Okay. Can you provide a number like how much liter of ethanol do we use internally? Yes, we can provide you a number, ballpark. For chemicals, around 50 lakh liters is being consumed for our own purpose and for 50 lakh liters for the CEO of the bio is a joint venture. 400. Then for potable spirit. For potable spirit is around 15 lakh liters per annum as ENA. Remaining that we manufacture, which is leftover, is supplied to biofuels. Sorry, I may have made a slight miscommunication. The consumption that he is talking about currently for chemicals, and that is the complexity I explained to you. Currently it is coming from imported. Yeah. Okay. 50 lakh liter is used for chemical and the other 50 lakh is used for? Sir, can I request you one thing? Manish will be more than happy to explain this in slightly more detail to you if you can connect with him. All the numbers and how it It is actually a complex set of planning. Honestly, really not on my list right now. Very difficult. Yeah. Okay. But we will be happy to explain if it is something that can be explained. Yeah. Okay. I will connect with him offline. Thank you. That is all from my side. Thank you, sir. Due to time constraints, we will not be able to take more questions. Now, I hand over the floor to Mr. Rupak for closing comments. Thank you for giving us that attention, for coming to our call in a busy day when you have got a number of calls to attend, asking us a number of questions, testing our knowledge of our own business itself. I hope I at least gave you reasonable replies to most of the questions, and I am conscious that some of you needed some more details from my colleagues, Anand as well as Manish. We will be happy to take them on later on. Otherwise, that is all from our side. Thank you. A very good evening to all of you, and have a good evening. Thank you, sir. Ladies and gentlemen, this concludes your conference for today. Thank you for your participation and for using Dur Sabas Conference Call Service. You may all disconnect your lines now. Thank you and have a pleasant day.