Q2 24/25

Nov 13, 2024

Summary

Q2 PAT reached a record INR 303 crore and operating margins improved despite lower turnover and falling fertilizer subsidies. Rising input costs and import competition remain key pressures, while Q3 fertilizer volumes and new capacity support the outlook.

Ladies and gentlemen, good day and welcome to the Gujarat State Fertilizers & Chemicals Limited Q2 FY 2025 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 then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. S. K. Bajpai and S. V. Varma. Thank you, and over to you, sir. Okay. Good afternoon, sir. We are pleased to welcome you all to the earning conference call of GSFC. We appreciate your participation in the GSFC Quarter 2 post results conference call. I trust that you must have reviewed our findings and the other presentations that have been posted on our website as well as the stock exchanges. We are happy to inform that your company has achieved a standalone highest ever Quarter 2 PAT of INR 303 crores. Also, second highest ever Quarter 2 PBT of INR 391 crores. And second highest ever first half profit after tax of INR 395 crores. However, company turnover fell by 13% in Quarter 2 and 6% in H1 on BIO basis. The main reasons for reduction in turnover is reduced subsidy rates and lower DAP and UDR trading volumes. Our operating margins rose from 7% to 11% in Q2 and 7% to 9% in H1. The company achieved this performance despite ongoing external challenges in fertilizers as well as industrial product segment. First was subsidy rates for P&K fertilizers fell significantly year-on-year in Q2 and H1, with ammonium sulphate falling by 38%, ammonium phosphate sulphate falling by 35%, and DAP falling by 24%, resulting in reduced P&K fertilizers sales realization. However, the government declared one time a special package of DAP of INR 3,500 per metric ton on October 24th, which provided much needed support to industry. The government is also prompt in releasing the subsidy, and we have received this subsidy up to the second week of October. Contrary to this, cost of essential imports such as natural gas, ammonia and phosphoric acid are on increasing trend. Recently, phosphoric acid price has increased to $1,060 per metric ton for Q3 current financial year versus $948 per metric ton in the Quarter 2 current financial year. International prices of DAP has now stabilized in the range of US dollar 640 per metric ton. Closing exchange rate of USD/INR is also cause of concern for the industry. Geopolitical tension in Middle East and Red Sea crisis are causing delay in arrival of vessels of DAP and other input materials. Considering the other factors, cost effectiveness of local phosphate fertilizers manufacturers is likely to be jeopardized. The company responded by boosting capacity utilization, increasing sales of manufactured products, and optimizing product mix in both segments. Fertilizer output went up by 16%, 1.21 million metric ton during first half on YoY basis. Good rainfall during current monsoon and enhancement of minimum support prices by Government of India for six major rabi crops will enhance demand for agri inputs in the upcoming quarters. The government is also pushing the industry to supply more DAP. As the company has finalized the import contracts of about 1.25 million metric ton in the upcoming quarter. We are targeting sales in the range of 5 lakh metric ton in quarter 3 current financial year. In case of industrial product segment, caprolactam spread reduced to $620 per metric ton as against $673 per metric ton on YoY basis. However, the demand of our major industrial product is likely to remain stable to firm during next quarter. The turnover of industrial products in quarter 3 2024-2025 is expected to be higher than quarter 2 2024-2025. Commercial production in HX Crystal plant has been commenced with capacity of 20 metric ton per day on 11th October of 2024. For melamine, domestic and export markets are expected to improve during quarter 3 current financial year, even though competitive imports of melamine are likely to pose a challenge. The organization is adhering to its strategic objectives with regard to capital expenditures. It is anticipated that Sulphuric Acid-V project and Urea-II revamping projects will be operational at end of the current financial year. Further, we are trying for part availability of cheaper solar power from GIPCL after part commissioning of their 75 megawatt solar power facility at Vastan, Gujarat. The facilities are expected to be fully operational by May next year. I would like to express my gratitude for your presence listening to my overview. Yes, we will now commence the question and answer session. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone 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. The first question is from the line of Neeraj from Anvil Wealth. Please go ahead. Yes, sir. Good afternoon, and thanks for the opportunity. Sir, I have few questions. Sir, when we discussed last quarter, you mentioned that since it was the start of the season for the fertilizer, we had to offer some sort of discount in AS and APS. So just wanted to understand from you were those discounts withdrawn by us, and because our sales volume for both the fertilizers also looks pretty good. So just wanted to understand from you what was the situation on the discount part, A, and B, what was the average EBITDA what we have clocked for both the fertilizer grades? Because earlier you used to guide that for both the fertilizers, on an average, it used to be around INR 2,500 to INR 3,000 a ton. So if you can just share your view here. Sanjeev Varma here. In case of discount, yes, we have slowly reduced the discount over the period as the market started taking the fertilizers. As you know, the season was delayed, so real sales happened lately, but now it has been maybe zero for both the products. Got it. Sir, what was the EBITDA per metric ton for both these grades put together in Q2 of FY 2025? It is near about INR 2,500 for the six months. Got it. Because now those discounts have been withdrawn, we can see further improvement in Q3, because you also guided 5 lakh tons of fertilizer production in Q3. This would help the margins to improve in Q3. No, we are not certain because the sulphuric acid prices and ammonia prices are going to increase now in the next quarter. Yeah. It is very difficult to put it that same margin will continue for the Q3 also. PA prices have also increased. You know that PA prices have gone up USD 110 per metric ton. That will impact the cost of production. Yes, the market will start responding to this increase, and let's hope for the best. Got it. Sir, just to continue here, based on the production numbers what we have reported, I think our quarterly requirement for sulphuric acid this quarter was close to 175,000 tons. I think what we are having current capacity is, on an annual basis, close to around 7 lakh tons. You rightly mentioned that there was an increase in the sulphuric acid prices globally and also domestically. Does this build up in the prices for or increase in the prices of sulphuric acid doesn't help us to increase the prices of both these fertilizer grades? How much we are currently buying from the outside market so far as sulphuric acid is concerned? As you know, the Sulphuric Acid-V project, what we are under construction, that will be operational at the end of the financial year as per my opening remarks. Correct. Whatever the deficiency in the sulphuric acid for the previous months, October to March, we have made tie up with the other companies as a long-term solution. We are receiving this sulphuric acid at a competitive price rather than going on the spot. As you know, the spot market is very volatile and is very costly also. We have made arrangement of sulphuric acid for the 6-month period till the time our Sulphuric Acid-V project becomes fully operational. Got it. But the number of 175,000 tons of sulphuric acid requirement is pretty near to what we have actually consumed in Q2, or the figure is slightly different? No, it depends upon the production of ammonium sulphate and ammonium phosphate sulphate at our Sikka complex and ammonium phosphate sulphate at Sikka, Jamnagar. Depending upon the production over there and here in Sikka, we procure the sulphuric acid. Right. But then government doesn't allow us to build up those cost increases in our MRPs, or let's say the subsidy doesn't go up, because what we can understand from you that there are only two players who are producing this. Being a critical water-soluble fertilizer for the farmers, doesn't this allow us to pass on those cost increases to the customer or to the farmer? See, we are in a competitive market. There are different grades of water soluble available in the market. Yes, we get a subsidy based on the NBS rate for NPKS, and we have to move subsidies. Let's say only the MRP where we function based on competitors in the market. So that is going to remain for all the products which are water-soluble mostly. Got it. Sir, second question is on, you mentioned that our contracted price for phos acid for Q3 was close to USD 1,060 per metric ton, and with the shortage of DAP currently in the market, does it provide a chance for us here to increase the MRP, or there's a fair chance that government would increase the subsidy here so that our per ton margins are not impacted? You mentioned last time that even DAP were making losses at the EBITDA level. So if you can help us understand what was the situation in Q2, and how do you see the things forward? Yes. As I told that DAP, in the last interview also, the DAP was not a very cost-economical thing for us to produce here by purchasing of phosphoric acid. So we have shifted our production to ammonium phosphate sulphate and other NPK grades, fertilizer grades Sikka unit. And as far as the requirement of DAP is concerned, we have tied up with the foreign suppliers for importing the DAP of 125,000 metric ton, and we will be receiving in Q3. However, in Q2, if you have heard my opening remarks, one of the reason of lesser revenue is that we did not incur any trading of DAP. So that was one of the reason. So that's why our revenue turnover was 13% below on YoY basis. Correct. And because the INR 3,500 per metric ton increase in the subsidy was effective October- Yeah was Q2 being still at a loss at the EBITDA level for the DAP? No, it is effective from April 1, if I'm not mistaken. Okay. This 3,500 is effective from April 1 to December 31, 2024. This one more circular came from the DoF for compensating the loss, if anything, due to the import of DAP. That is effective, I think, that came from October 1. If whatever import we are doing, and if there is any loss incurred by the company, then this will be compensated by the government. That is on the trading only. On the manufacturing side, this subsidy increase of 3,500 will take care of our profits, or still the profits are not at the reasonable level to adjust? No. Profits are not at the level. That is why I told that we have shifted already to the APS production in place of DAP. That is as simple as this. Got it. Sir, last question from my side is, on the urea part, how much we are currently losing at the EBITDA per metric ton level? Once that energy conservation measure is implemented, which would reduce our gigajoule per metric ton, how much of this EBITDA per metric ton could be recouped? Sir. Hi, this is Ajit Sir. Hello. Yeah, sir. Yeah. With regards to the urea, as everybody knows that the government has not implemented or revised the fixed cost, and the fixed cost is based on company-wide for each industry. So that's a portion, because variable cost is being passed through. So that's a portion which affects every company. So ours is also the case where we get hit about INR 1,000 to INR 1,200 per metric ton on the EBITDA side. Got it. And these energy conservation measures, what we have been implementing or is in the process of getting completed, would this INR 1,000 or INR 1,200 per metric ton would help us to save some of the fixed cost? Because then our urea capacity is also going up. Is there any chance of us recouping some of this EBITDA per metric ton loss? That will also do some sort of help in respect to covering up this differential. Over and above, government is also in the process of revising that, and they have asked for the data of the fixed cost from all industries. They are in the process. Once they get completed over with that process, they might come up with increase in the fixed cost on metric ton part also. That process is on, and we have already submitted the data for the same. Let's see, once they come up with their calculation and finalization of the increase in fixed cost. Got it, sir. Thank you so much, sir, and wish the entire team all the best. Thank you. Thank you very much. Thank you. The next question is from the line of Shanmugam, an individual investor. Please go ahead, sir. Yeah. Sir, thank you for the opportunity. My question is slightly on the cost. I see employees cost has sharp reduction, sir, approximately by INR 50 crores. Is there any one-time cost that has impact? Or do you expect the same reduction in the coming months as well? No, no. This is the one-time cost. Actually, what we have provided something because of the pay revision and bonus payment, there were some certain adjustments. But it is not a regular feature. It is a one-time cost. There is an entry for INR 50 crores. Am I right? What? There is an entry for INR 50 crores, entire is due to the one-time adjustment? There was an entry. Can you say it? To INR 50 crores. Let me put it this way. Can I expect the employees cost in line with the previous quarters? Just a minute. Let me see. This is INR 250 crore over in 2023. Now 30th September 2024, the personal cost is only INR 185 crore. Is that right? Yeah. INR 250 crore was the earlier in 30th September 2023, when we have made the provision. Yes. That is why the cost was higher in 2023. Now it has been reduced to normal level, which is INR 185 crore. Okay, great. If this is current norm, it is going to be same in the coming month. Am I right? Yeah. That is correct. Yeah. That is fine. Second cost element, raw material cost, I see there is a drop by 1.5% on sequential basis. In initial remarks, sir, I understand that we may not sustain in the coming months here and there. If I look at in different perspective, sir, can we at least stick to 63% of material cost in the coming months or it will be like last year, it will be 65%? Sorry if I am wrong in numbers. No, no problem. This raw material cost is on increasing trend, I guess, as I spoke in the opening remarks. Main raw materials are insecticides, P2O5, phosphoric acid and ammonia. Both the costs, if you see the internationally ammonia pricing and the phosphoric acid pricing is in rising trend. Anyway, this raw material cost will go up. As our production is higher in this quarter, that is also the impact on the higher raw material cost. Is there any value engineering that we can expect to sustain this to offset the hike in raw material cost in the coming months? It is very difficult to say, because the hike in the fertilizers, the prices are determined by the government subsidy and the MRP both. If there is any increase in the cost, we have to adjust somewhere either to switch, shift the production of other products, or we have to absorb the cost. But we manage this through the product mix changes, so that, yes, we are keeping it in control. Yeah. That is what I understand from your opening remarks as well. Because of the product mix, we could offset the higher costs. In that sense, can we maintain this 11% or at least 10% of EBITDA in the rest of the quarters? Yeah. See, it is 7%-8%. It will remain in the same line. Pardon, sir. Sir, you are talking about that EBITDA percentage now. No, what I was trying to say, do you expect the raw material cost increase in coming months at VIP? Also, I understand from you that there is a product mix changes that given good improvement in EBITDA, so the hike in raw material cost can be offset by your product mix changes in the coming months. Yeah. Correct. So ideally, so what you achieved, 11% EBITDA, can be expected in the coming months. Am I right, sir? See, you are not very clearly what you are asking. See, what we have said that we try to change the product mix to recover the hike in the product cost from the mix thing, and that is the best and overall basis we will do. So we are assuming that we will be able to maintain our EBITDA margins in that case. Okay. 10% we can expect in the coming months also for EBITDA. Currently, it is 11.6% achievement. Even if you look at hikes in the coming, everything sort of thing, this product mix could help for that and could be around 10% I can expect, no? See, again, we are not able to clearly hear you, what you are saying. The only thing which we want to say that our endeavors is to see that our EBITDA margin is protected with the change in the product mix in spite of increase in the cost of the raw materials. This will be on the best handle of basis based on the market demand and supply both. Yes, our full efforts will to see that we at least get some EBITDA which we got in this Q2. Yeah. Thank you. I understand that there is a reduction power cost that would, I do appreciate cost functions for their management. Let us say that still there is a room and there is some policies coming on or from next year onwards, there will be a good impact next year or maybe in May onwards. That is fine. With respect to other expenses, sir, I see it is very neutral. It is a fix in nature compared to last year and our sequential basis. Do you see any room for cost control on this area, sir, other expenses? Or you can drill down couple of elements that contributing more than 50% of other expenses. What I see is the other expenses are more or less at the same level in the quarter and as well as in half yearly basis. The quarterly basis, it is around INR 234 crores, and half yearly it is INR 443 crores. There is no difference as such, and we are maintaining the same level of the other expenditures. Sir, my last question, on other income, how much portion that comes from your investment, sir? I think balance sheet, you have a big investment. If I ask you how much portion that is related to your investment income out of INR 150 crores, I believe. I remember correctly. It is INR 150 crores. Most of these things, the other income contents is the dividend received from the other companies, and the interest on our excess funds, whatever we have parked in the fixed deposit or with the bankers. The entire income from that investment. Am I right? I cannot say it is investment. It is a temporary parking of funds, whatever we are having, whenever we receive subsidy or something like that. Temporarily, we park the funds, and we take the interest on that. Okay, sir. Sorry, one question last, I need to. Sorry for that. With regard to cash equivalent, I see huge element in the balance sheet, about INR 2,000 crores, I believe. Roughly, I remember INR 2,200 crore, I believe. This cash company, you have any ideas, sir, to diversify this, maybe to improve efficiency or from charging perspective? Do you have any ideas, sir, to share? No, we cannot get what you asked there. Will you please repeat? In the balance sheet, I remember there is a cash equivalent, more than INR 2,000 crores in the balance sheet. Am I right, sir? Yeah. Maybe. You have huge cash as idle. Do you have any plans to invest to improve efficiency? Yeah To improve verticals? Yeah. Sir? There is an option. No, I won't. Whatever the cash we are having in the balance sheet, it will be used for our expansion project, which is lined up as per the investor presentation. Two projects, we will be commissioning in the year-end. That is INR 400 crore to INR 500 crore is required to be paid. Then after the phosphoric acid and sulphuric acid plant, we are projecting a sixth unit, that costs INR 1,560 crore or so. Yes. And over and above this eighth project, we have already got land, and that study is going on, and we are immediately starting our finalization of which product and which project we will be going to install there. Whatever the money we are having, it will be applied for the expansion of the project. Great, sir. What is capacity utilization as of now for the current year? Capacity utilization is more than 100%. More than 100%. Yeah, I understand now. All these expenses that you are looking for CapEx will be effective from the next year onwards? Whatever CapEx we are having INR 565, I thought that it will be required to be paid at the year-end. Afterwards, as per the progress in the project, we would be utilizing the funds. No, I mean, when it will be converted into a number, the CapEx. Could be next year onwards, next January? Yeah. Because all these projects are for the captive consumption. There will not be a direct one-to-one link with Sulphuric Acid-V. Whatever the sulphuric acid we produce over there, it will be consumed internally. It will be having impact on our bottom line rather than the top line. Okay, sir. Sir, last and final, you said that annual guidance in the last phone call, I do remember that volume perspective, there will be growth of 20%. Hope that we stick to the same number. Am I right, sir? Yes. You said the growth in the turnover, right? Volume base, yeah. Volume. Volume. See, growth in the volume, if you see this quarter, there was a slight decrease in sales because of the market condition there, and next quarter will be improving the sales. Yes, we are projecting a growth of 20%, yeah. Sir, thank you, sir. I appreciate your time, sir. Thank you, sir, for the opportunity. Thank you. Thanks. Thank you, sir. Thank you. Just a reminder, anyone who wishes to join the question queue, please press star and one on your touchtone telephone. Thank you. Yes, we can. The next question is from the line of Neeraj from Anvil Wealth. Please go ahead. Yeah, sir. Thanks for the opportunity again. Sir, in earlier discussions, you mentioned that put together everything like HX plant and renewables as well as the sulphuric acid and phosphoric plant, our CapEx was close to INR 2,200 crore to INR 2,300 crore put together. I guess, we have spent close to around INR 250 crore till March of 2024. Just walk us through how much we have spent till first half, and what could be the numbers we should look for FY 2025. First half, we have expended, I think, INR 100 crore to INR 150 crore, and up to 31st March, second half, we will be expending around INR 400 crore to INR 500 crore because SA-V and Urea-II revamping, both the plants are ready to be commissioned in March or up to the end of this financial year. Mostly all the payments or final payment will be released up to the current financial year. As far as this phosphoric acid and sulphuric acid project is concerned, it is at initial stage, so there will not be any direct impact on the expenditure. Slowly after the detail engineering and the orders are placed to the detail engineering persons, then after the payment will start, because the time period is also mentioned as up to March 2027, I think. Correct. Sir, currently, I think based on the production volumes, I think our phosphoric requirement, depending upon the grades we produce, is close to around 200,000 to 250,000 tons, in between that. How are we currently placed? Because, one that capacity would be commissioned. Before that, currently how much we are producing phosphoric and how much we are currently buying from the market? The phosphoric is produced only at Fertilizernagar complex. There is no phosphoric acid plant at Sikka. What we are having the capital expansion project, the phosphoric acid and sulphuric acid plant is to be put up at Sikka for meeting the requirement for DAP and other NPK grade of fertilizers. So presently, there is no phosphoric acid plant at Sikka unit. All the material is purchased from the foreign suppliers. As far as the Fertilizernagar complex is concerned, we are getting some rock phosphate from this RSMML, and we are also procuring rock phosphate from the foreign suppliers and then the PA plant here. Right. How much is our current PA production, sir, if you can share? In Baroda it is around 60,000 metric ton per annum. Okay. For that rock phosphate, what you mentioned, we either import or source something from the domestic market, correct? Yes. Got it. Sir, last question is on, you mentioned last time that Baroda complex consumes close to around 75-80 megawatts of power, and 40% is from renewables. The rest, we are currently buying it from the grid. Has there any reduction in the grid cost? Or are we increasing our renewables? Because I think you mentioned that GIPCL is going to commission in June 2025, something close to around 75 megawatt of solar power plant. How the power mix would look like once that supplies from GIPCL commences and any cost reduction in per unit basis what we have seen from our power buying from the grid? There are two plants we are supposing. One is at Charanka, a solar power plant of 15 MW. That plant is commissioned by the end of this financial year. That whole 15 MW we will be receiving for our own consumption. However, GIPCL has 75 MW plant, 50% of the electricity will come to us and 50% will go to the GACL, the other partner. In the GIPCL, our share is 37.5 MW. There must be some power saving because after this, we start receiving the power, then we will come to know what is the rate and what is the sort of charges they are charging. But certainly it is cheaper than the current power purchase from the grid. Correct. The grid cost is what? Close to 10, 11 rupees a unit or it is lesser than that? It is, I think 8 to 9 rupees per unit. Got it. Similarly, if you can also help the power consumption in MW for our Sikka plant and how we are placed there. Sikka consumption is quite less compared to Baroda unit and presently we are drawing supply from windmills and certain from the grid because Sikka operation depends on the availability of phosphoric acid and ammonia. There is very important to how to do this thing. Whatever the purchased power cost you get is a weighted average. From Sikka and Baroda both in the combined state. Got it. Any idea on the total power consumption at the Sikka unit? It is 32 MW if it runs on 100% capacity. It is based on changing capacity and our consumption reduces because, yeah. Got it, sir. Thank you so much, sir. Okay. Thank you. The next question is from the line of Saket Kapoor from Kapoor & Co. Please go ahead. Namaskar, sir. Thank you for this opportunity. Sir, for our industrial chemical segment, if you could give us some more color, what is the market scenario currently? I think so we were looking to move more downstream products for caprolactam. So where are we in terms of penetrating or improving our product market? So as you know that IC segment or chemical market, it is still not out of woods and there is cheaper material available from China and other foreign countries. So we have to compete the cheaper material and cheaper pricing of the caprolactam as well as melamine in the Indian market. However, we are doing some actions we are taking. For the caprolactam, we have commissioned this HX Sulphate Crystal plant. So H2SO4 is one of the intermediates for producing the caprolactam. It will go for the production of HX Sulphate Crystal plant, and that is 20 metric ton per day capacity and that has been commenced from 12 October. The per annum capacity of both the plants, one and two, comes to around 10,000 metric ton per annum. So near about top line will increase by INR 125 crores and being a good margin product, we expect around 30%-40% margin in this HX Crystal field. So that will reduce the caprolactam availability in the market. So we will get benefited by this and the new product, HX Crystal, which is 100% imported currently in India. Nobody else is manufacturing, so GSFC is the only manufacturer of this new product. So being a good servant for the Aatmanirbhar Bharat, that is a good step for the company is having. Sir, can you come again for the numbers? What will be our annual savings with this commercial production of HX Crystal plant? Sir, I told that top line will be INR 125 crores on full capacity per annum basis. Okay. 40% means INR 30 crores or INR 25 to INR 30 crores bottom line will be improved. Okay. Whatever we are having the breakeven of some few crores loss, that will wipe out. Okay. When will we be achieving the optimum utilization level? Sir, how will the ramp up be done? How much time will it take? It is already done. As of now, we are operating at more than 100% capacity already. The second one is commissioned on 11th October, and it is near to 90% or 95% capacity utilization. I am sure in the next one or so, we will be achieving more than 100% capacity in that plant also. Sir, secondly, for the fertilizers segment, I think so with rabi season buying, I think so in the Anvil, what kind of volume growth, sir, are we anticipating going ahead for Q3 and Q4, and what should be the trend going ahead since for fertilizer, we have more visibility than the industrial products? I think in case of fertilizer for next, say, rabi, means Q3, Mr. Mase has said in his opening remarks that we will be selling around 5 lakh tons of the fertilizers. Yes, we will be meeting that and maybe surpassing that because rabi is in full swing now. From January to March, the fourth quarter is always a lean season for this thing, and mostly goes to the stocking levels in field. So it will depend on the prices of PA and ammonia at that time, how much we produce and how much we put in the stocking at the field level. But overall, sir. Hello. Yes, sir. The growth, what we have indicated, growth in the volume should be there. Okay. And our INR 1,500 per ton EBITDA numbers, we should hold on to that? Yes. Correct. Sir, we have seen that our raw material price trends, employee cost, these things remaining stable, and also your presentation also speaks for the same. Going ahead, do you think that these line items, the vagaries of raw material are now behind us, and we can look at these price trends to remain in the similar way? No. International prices of all the raw material is very volatile. As you might have seen this current crisis, international crisis, war between the countries and that the crisis. This may impact the future scenario of the raw material availability in India and also the pricing. It is very difficult to say what way it will go. But sir, when we look at the key input cost movement, even year-on-year or even barring the June quarter, which is most of the imported phosphoric acid, ammonia, natural gas, benzene, prices have remained in a band only, sir. Correct me there, sir. When we look at the key input cost movement, slide number 5. Slide number 5, it speaks in that manner. That was the reason why I came to that conclusion. This is a slide only depicting the caprolactam and benzene spread. I think the slide of the presentation- Okay, sir. Only caprolactam benzene spread, and I have told that it has been reduced to $620 from $673 a year back on September 2023. Caprolactam benzene spread is reduced and let us hope for the best that some improvement will be there in the next quarter or so. But we are not very much hopeful. That's why we are taking this step to divert the caprolactam, reduce the caprolactam production, and divert the material for the new project called HX Crystal. And we are also importing some direct anone, so that anone can be directly fitted in our caprolactam plant. The benzene consumption will be lesser, because if you see the benzene pricing, it has been increased to 23% on year-to-year basis for the quarter. Benzene prices is very volatile. In comparison to caprolactam, benzene prices is much higher. That's why the spreads get squeezed. Okay, sir. I join this. Thank you. Okay. Thank you. Anyone who wishes to ask a question can press star and one on the touchtone telephone. Thank you. As there are no further questions, I would now like to hand the conference over to the management for the closing comments. Yeah, thank you for patiently listening, and I hope that we have given the satisfactory reply to all the investors who have posed the questions on the working of the company. And we will meet again after three months after the results of third quarter in January next year. Thank you very much. On behalf of Anurag Services LLP, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.