evening, ladies and gentlemen, and welcome to the Q1 FY 'twenty six Earnings Conference Call of Tata Chemicals Limited. Please note that this conference is being recorded. 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. We have with us today, Arvukundan, Managing Director and CEO and Nandkumar Pirmalais, Chief Financial Officer of Tata Chemicals Limited. Before we begin, I would like to mention that some of the statements made in today's discussion may be forward looking in nature and may involve risks and uncertainties.
I now invite Mukundan to begin proceedings of the call.
Thank you, and good evening, and welcome, everyone, to our quarter one FY 'twenty six earnings call. I'll start the discussion with a brief overview of industry, then our operational highlights across business and geographies. The market conditions remain fluid and balanced. Overall, global demand is estimated to be flat in the near term due to uncertainty associated with some of the trading issues.
The market conditions remain steady in growth demand being stable in India, China and some parts of other regions, including, I would say, Americas, excluding U. S. A. Though demand supply balance continues to be balanced, there are uncertainties in tariffs as it is a consuming industry, which will continue to weigh on market in the immediate term. And as this uncertainty disappears, we could begin to see some more balanced approach to market growth.
All product market continue to be oversupplied with high inventory levels in most regions. China inventory remains high at $1,800,000,000 a slight increase over prior quarter. This is going to continue to keep the market pricing range bound. In India, the soda ash list prices remain unchanged. On an average, import prices remain range bound between $230 to $235 Although MIT has been extended, it has not had much impact on prices.
In U. S, the export pricing to Asia continued to be under pressure and now has reached a balanced number. Overall, we expect pricing to remain at similar levels, at least for next six to nine months. In terms of company's operational performance, company reported quarter one FY 'twenty six on a consolidated basis, revenue from operations INR3719 crores and EBITDA of INR $6.49 crore and a PAT of INR $3.16 crores. For quarter one, the stand alone revenue of INR $11.69 crores had an EBITDA of INR $2.70 crores and a PAT from continuing operations of INR $3.00 7 crores.
In India, the performance is higher compared to previous year, mainly due to higher volumes, operational efficiencies, partly offset by a minor drop in realizations of soda ash and bicarb. Quarterly sales volume of all products increased, including FOS to eight fifty nine metric ton as compared to six fourteen metric ton in quarter one. U. S. Overall, both export sales and prices were marginally lower, the export sales impacted by a spillover of the shipment to next quarter.
In U. K, the cessation of loss of operations led to a lower volume and the other parts of the business which are continuing had better financial operations. Kenya saw slight lower volume, our prices were maintained as that of Q1 FY 'twenty five. Rally saw an overall growth of 22%, a volume growth of 9% and price growth of 13%, driven by growth in crop care and feed business and EBITDA margins stood at 16% and a FAD growth of 100% in Q1. In conclusion, we remain focused on ensuring that we focus on customer delight and serving our clients well.
We continue to focus on ensuring that we deliver on our outcomes in terms of volumes, costs and working capital efficiency. With this, I close my opening comments and hand back to the moderator to open for Q and A.
Thank you very much. We will now begin the question and answer session. Participants are requested to use handsets while asking a question and limit their questions to two per participant.
You can rejoin the queue in case of further questions. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. Our first question comes from the line of Nitish Dhoot from Anandrati Institutional Equity.
So my first question is on, I mean, you mentioned in your opening remarks and the presentation that prices continue to weaken during Q1. And the overall global demand is also estimated to be flat in the near term.
So if you could give some color on the extent of the price decline that we've seen in in q one and q two so far, and what would that mean for company profitability going forward? The reason why is, you know, it's possible. Given that India has some benefit of MIT till December, but for the other reasons, how would it how would it likely to pay out?
So firstly, MIT has had no impact. So let me just highlight.
So the the changes in the pricing has been fairly range bound. It has been between $3 to $5 and best in some pockets, can be $10, but that's the kind of production we've seen in most domestic markets. What we have seen is and if you take a trading quarter basis, it just will be very marginal shift in terms of $3 to $4 between last quarter to this quarter. And we believe that prices have more or less bottomed out. It's going to remain in this broad range.
Sure. And also, sequentially, the India business and even The US business, so it must decline in volumes. So what exactly drove the improvement in profitability, you know, I mean, for for both So I mean, if you could just to get some funding. And I understand I'm a bit surprised because you mentioned in the opening remarks. Yeah. Yeah.
The The US sequentially, I said, is a spillover so that forty, fifty thousand tons will back up in the next quarter. It is just a shipment timing issue. It has nothing to do with and India too, see no major issues.
We should be clicking around the numbers we've had in the previous few quarters.
Alright. So just one last thing. So you had planned a structural EBITDA improvement of about $606.50 crores through, you know, into shutdown of loss making UK assets and volume ramp up in India, Kenya and, you know, the cost efficiency initiatives that you had mentioned about. So do you hold on to your outlook for FY '26 considering, you know, I mean, some softening further on the
Yeah. So let me clarify. I think while prices are softened also, the input, they have been cost have come down to almost the same number. That is why the numbers are holding. So I did not speak about the cost side.
But having said that, I think our number, which is broadly what I indicated was INR600 crores, split equally between reduction in the, let's say, unviable operations in UK, INR200 odd crores in terms of additional bottom line contribution from new projects getting commission, And another 200 crores in terms of cost improvement, think still stands still holds fine for the full year.
Great, sir. Thanks a lot, and wish you all the best.
Thank you. Our next question comes from the line of Vivek Rajamani from Morgan Stanley. Please go ahead.
Hi, sir. Thank you so much for the opportunity and congratulations on good numbers. Just wanted to dig in a little bit deeper on the previous participant's question. If you could just give a bit more color on what's driving the sequential improvement in both India and U.
S, given that the volumes are lower, but the profitability seems to be a lot more stronger. Any specific reason for that? And that's the first question.
Yes. As far as U.
Is concerned, main driver of the shift is shift is one is the volume mix. I think there's a greater share of domestic sales versus sports sales in this quarter. But that will correct itself as it goes into the future quarter because the shipment we've got delayed was because of the mainly because of the issue on export consignment. So the net realization and net margins have been higher because there's a higher proportion of domestic. So it's a mix issue in U.
S. Addition to that, they've had a lower fixed cost, so that has led to the overall improvement in the EBIT. And India is purely a volume that's changed. The fixed costs are more or less in line as there's a marginal increase, but that was expected because new capacities were coming on stream.
Sure, sir.
Thank you so much for that. So just a clarification, given your opening remarks where you've said that, you know, there's not been any significant changes in pricing, some minor cuts. Would would it be fair to say that the q four EBITDA numbers for both India and US may be the more normalized numbers going forward? Or the one q numbers should be more of a normalized benchmark assuming, you know, no significant changes in pricing?
So broadly, think in US, as I mentioned, there's a mix of normalized.
So so because of the mix, there is probably gonna be in quarter two because quarter two will have higher share of exports and lower share of I think you would see that getting into a zone which is slightly lower than this quarter. In addition to that, there will be some additional costs in terms of fixed cost. So I think U. S. Should tend to drop a bit because of the two drivers, because basically export domestic mix and the maintenance and fixed cost.
That's the driver there. As far as India is concerned, we do believe that it is going to remain range bound, more or less what we are clocking. We may not see any major shift. If at all there's any big shutdown which is coming, it is in Kenya, but we will not talk to sell the market in the quarter two.
Okay, sir.
Very clear. And just a last one for me. Given the recent news flow that the Chinese government is looking to is looking at the excess capacity that's there across the petrochemicals and the chemicals landscape. So I just wanted to hear your thoughts if you think that could, you know, drive any kind of benefit from a soda ash perspective? Thank you very much.
So all all we are saying is there have been efforts with several governments. Chinese government is trying to do it. The Indian government has put MIT. But in terms of market behavior and market conditions, if we see an early time, I will report back next quarter.
Yes, sir.
Very clear. Thank you very much and all the way.
Thank you. Our next question comes from the line of Saurabh Jain from HSBC. Please go ahead.
Thank you for the opportunity. My question is on The UK business. We saw that the margins have kind of improved sequentially, obviously, because of the product mix that is completed for now. But wanted to know your sense whether the current run rate is worth something you expect to continue for the rest of the year or there is more room for improvement in terms of profitability and EBITDA that you deliver?
In UK, I think there are two big drivers of that shift which will happen.
I think the quarter one, they have had to buy CO2 from market, they announced CO2 production should start this quarter. Secondly, the pharmaceutical grade, the salt plant has been commissioned. But right now, they are going through a process of qualification with customers that should begin maybe in the second half of the year. So I think there'll be two further drivers to move. We do expect to run the year towards the third and fourth quarter with at least a balance of zero losses at the fact level in U.
U. K. So I think the drivers towards that and the two drivers of that are fundamentally the shift towards own CO2, which is obviously lower cost and also sales and approval of pharmaceutical grade salt from the customers in the second half.
Okay. Any numbers that you can share how much of savings are you targeting from this in house due to captive month?
We can't do specific, but I already sort of highlighted that we do expect that the 31 negative issue is.
Okay. And what happened to the Kenya margins in this quarter, it kind of, you know, a bit declined sequentially. So any light on that?
I think fundamentally, the the sale of the proportion, the mix of sales and the local African market had reduced.
We are actually back up as we move through the year again. So whenever they export more towards Southeast Asia versus domestically in Africa, I think the margins tend to shift. I think that would be back to normal.
Okay. Understood.
Separately, there is a comment in the presentation that the VAT includes the 75 crores on account of income tax refund. Where is it reflecting? And is it in the India business?
That's in India business, sir, in the other income line interest and the tax line.
Okay. But what is it relating to?
So before income tax, we can order in the month of May towards the old case we had, That was in our favor. So that came in the month of May, and we got a tax order for both interest and tax.
Yeah. Mhmm.
Actually, we had also informed the stock exchange in the month of May in the month of May. If you look at notice is released by the company, the details are there on the stock exchange.
Yes, sure. Thank you. And one last question, what is the progress on the ten year capacity expansion? What is the update there?
Yes, I think that's what I said. We have commissioned a 50 kiloton calciner and it is going to what I call as the trial run that we see. So sometime during the second quarter, it should be delivering products towards the market. But we'll clarify that specifically with more color in the quarter two.
But it is being commissioned, it's going to trial right now.
Okay. Understood. Thank you so much.
Thank you.
Ladies and gentlemen, we request you to please restrict yourself to two questions per participant. You may rejoin the queue for follow-up questions. Our next question comes from the line of Abhijit Akhena from Kotak Securities. Please go ahead.
Yes.
Good evening, and thank you. The sharp decline in power and fuel cost this quarter on a quarter on quarter basis sequentially, is that primarily led by lower coal cost or is it The UK closure, should be better understand?
Yes, it is a combination of the two.
It is also led by lower gas, lower coal and also the station of the operations.
Okay. So this is a sustainable number going forward. Right?
Yes. This is a sustainable number. And also, there could be savings because some of the optimization work is underway.
So that's where we are. But it should be sustained.
Thank you. And just on The UK expansion sorry, the turnaround. There was this sodium bicarbonate project that we had planned.
So is that still on track? And if so, by when could we expect So we are going through right now, this this is a the design work is still continuing.
And as we speak here, continue to progress that. But our our first effort during the current year in terms of the needed is to make sure that we get the at least we enter the year at a breakeven at the back level. That's what we are working towards.
We're making sure that all the project commission and all the existing capacity of is back on stream in a balance day because they had to reconfigure the unit because it doesn't it no longer has a storage unit attached to it. They they've also going to qualification on the.
So thank you. Just one suggestion from my side. Believe previously you used to offer the geographical split of The US volume.
I'm not sure I see it anymore in the presentation, but it would be helpful if we could start getting that again once again. Thank you.
Thanks for the question. No sir.
Thank you.
Our next question comes from the line of Sumant Kumar from Motilal Oswal. Please go ahead.
Yes. So my question is for India, and we have seen a EBITDA improvement. So is there any kind of the contract, revision of the contract for product, which is helping us the margin improvement or a benefit of any input cost or sales business has better margin in this quarter?
So all in all, I think the cost variable cost are down for some basis because there's been I've highlighted several people, several analysts. The coal prices have come down, so that is certainly helping us.
In our We can't be clear about. Can you can you speak louder to me?
Is it clear now? Is it clear now?
Yeah.
So I said, I just seen a so we're getting an echo from your line.
No. Okay.
Yeah. So the the variable cost is certainly lower. It's still getting an echo from your line.
Sir, you made the right hand. Yeah. Go ahead.
Okay. So as was mentioning, the variable cost is actually lower on account of coal and other input costs. Also, higher volume and in terms of pricing, as I mentioned, it is rainbows and some pockets dropped a little, but it's thereabouts. So the real driver of this number is really higher throughput and making sure that our fixed cost are more or less even even then in line with what we projected. So it's basically variable cost and volume.
Okay. And can you talk about the CapEx for this year and capitalization for capitalization also?
See, last year, we had a peak CapEx cycle on account of expansion in India. That's not over. What could be this year is only the operational CapEx for all geographies. And after our thousand course fee incurred earlier on the operational CapEx. Not much gold CapEx left to pay. Everything is done last year.
CapEx this quarter.
This year?
Yeah.
So what is the maintenance CapEx?
What is this? By comment we are discussing on this?
As of now, I think are continuing to push ahead with the expansion and growth in Kenya.
We will certainly be looking at opportunities for growth in India also. The next phase of growth in Metaprol is being worked out. We'll come back with specific numbers towards the first quarter of this year. While the design work in U.
S. Is continuing, we will press the pedal on that only when the market conditions seem to be clearer to us. As of now, we put it on pause, but it will be a pause for in a couple of quarters or maybe a year. But the moment market conditions are clear, we would prefer. So the work is continuing.
The approval from the environment authority, public hearing approval has been obtained. So it is pretty close to getting all the necessary approvals. But it's internally, we are awaiting the right time to prepare green.
Okay. Last soda ash side is demand supply scenario and balance. And going forward, do you think in these three, two to three quarters, you can have some balance product demand demand supply and anything from that any timeline when we can see that some tightness in the demand demand supply.
Yeah. This is the the current situation we are facing. There's not a demand problem. Demand is actually very fine. The demand is growing as per our projection.
There is no no issue at all with the market in the demand side. Our issue is more from the excess supply and the continuing operation of unviable units. If you look at the seizing of operation, only two people have announced their offer. One is Us and also the other third, second largest player in Europe has also announced easing of one of its operations. We've just heard some news of Chinese units going into long maintenance shutdown, whether it is seizing operation or this unit is Shandong high wall, which is considering idling capacity.
But we're going to see as these announcements come. So actually, big issue in terms of the major moving will be on the basis of either plant idling capacity or taking a pause for a certain period of time till the production demand catches up. Right? Right now, it's not a demand issue. Is fundamentally a supply Buy some units, which are unviable.
Okay. Thank you.
Thank you. Our next question comes from the line of S Ramesh from Nirmalbang Equities. Please go ahead.
Good evening, and thank you very much. So if you look at the China prices, so there is about a $150. So to what extent is the market in Asia already discounting the entire excess supply from the the Mongolia expansion? Or is there still some more increase in production from Mongolia, which can put further pressure on Asia Pacific?
So it's really Mongolia expansion has come on stream between you.
But I think the real issue is that at these prices, many of the units in China are not viable. So I think that there'll be some some moments that needs to happen there. So really, the the Mongolian unit is very competitive. It's an actual soda ash. It is really the synthetic soda ash, which have to take the call. We'd like to watch the news.
So is the entire Mongolia capacity in operation now, the 5,000,000 tons?
Yeah. More or less.
Okay.
So in terms of the PNL now, can you give us some sense in terms of the sustainable run rate for depreciation, interest expense and tax rate, particularly with reference to UK? Because there you have taken out one asset for the lost opportunity. So you can put these things in perspective for UK as well as the company will be useful.
Yeah. I think if you take the current quarter number, more or less, it'll it'll be somewhere around $5.10 crores around that number in terms of depreciation and amortization.
And finance costs are depending on how quickly we can start to pay down debt, we'll make some effort during the year. It will start to also go down, but the run rate mentioned in the current quarter should be what we would what one should expect during the year.
And what about the tax rate?
Tax we can't tax the current one. Have all tax refund from it.
Therefore, we can't generate that. So Okay. Like, it should be depending upon the full year's profit number to what comes. Currently, we can't take the q one tax as well for the full year. It's got a number of one offs.
Okay. And so if you were to dwell on The UK business, the EBITDA margin has improved. So in terms of the run rate, say, over the next three quarters this year and then FY '27, would we go back to the British all gross margins and EBITDA margins? And when you ramp up the pharma business, do you think that entire volume can be placed next year?
Yes.
I think that that is what we expect will happen. So effectively, you will see a quarter on quarter improvement in the trend in terms Of U. K. By the time you come to the fourth quarter, you would know exactly what will be the sustainable number or thereabouts as far as U. K.
Is concerned. So every quarter will be better than the previous quarter because as we start to stabilize and cycle units with the new power configuration and having enough CO2 that that structure will improve as the pharma part starts to get into the market in terms of that is that is a higher margin, so it will start to impact or actually show that in the results. So we expect every quarter, it should sequentially continue to improve.
So my last thought on the India expansion, you have seen about 32,000 increase in product on a Y o Y and another about 12,000 in Baikal. So would we see the entire capacity from the expansion being placed in the second half for product and Baikal, or will it take some more time?
No. The only one which which which is ramping up for every quarter, every month is the Baikal because as you know, Baikal, we have worked with our customers in developing applications. So the utilization will continue to trend up. If you say that broadly, I would say about 20 odd thousand ton of that will the 5,000 tons per month approximately is the is the amount which we can make up as we move towards the end of the year. In terms of chloride, there is no issue in terms of placement of the product or market issue.
In spite of the slowdown in auto and the, you know, container glass, you don't see a challenge on the Indian market?
Overall demand, there is India will continue to show us higher. Our assessment of the market least for the first two quarters of the calendar year, Indian market has continued to grow. There's a slight difference in Chinese market by about 1%. And then we anticipate for the full calendar year, market other than North America, which is in South America, will also show growth.
And China is a slight dip, India is a growth, and U. S. Is flat.
Thank you very much and wish you all the best. Thank you.
Our next question comes from the line of Rohit Madraj from BNK Securities. Please go ahead.
Yeah. Thanks for the opportunity. It might be slightly repetitive question, but I'm just referring to our two three presentation where you have given the expansion project pipeline.
So that's India, 3.2 lakhs and Celica, 26. So dash US, four. So dash India, 3.5. And Vaika, UK, 1.8. So given the current circumstances, are there any deliberate delays on this project?
And what are the time lines that we are seeing for all these five projects and the overall CapEx as of now, which is a result for the same? Thank you.
In terms of, as I mentioned, the design work and the public clearing approval for The US has been obtained. And so it needs just one more modification to get a full clearance. So the work is not paid, but that is the one which is on pause as we see.
As far as India potash is concerned, out of the 320,000, broadly, we are looking at doing it in two steps of 150,170 tonnes. We'll come back to you by the second quarter in terms of the operationalization of that. I think all the details are clear, but it is going to be more like a debottlenecking at a low cost rather than full expansion as we have thought of before because we do believe the headroom available in balancing the price needs to do it at a much lower cost. In terms of U. K.
By car, we are this year, we'll be spending time on making sure our current existing 80,000 tonnes unit is fully run-in a proper manner before pressing the pedal. They are again designed to work on its way. And in terms of the, we are going to do this in two phases. The first phase would be out of the number there, which is already undergoing. I think the execution is just about to begin.
Sure. Thanks a lot. That's all from my side. Thank you and all the best.
Thank you.
The next question is from the line of Ankur from Axis. Please go ahead.
Yes. Hi, sir. Thanks for the opportunity.
Just a clarification on our U. S. EBITDA, for this quarter. So if I look at Q on Q, given that large part of the business is contractual, wherein we enter into contract for the full calendar year. I'm just trying to better understand the Q on Q variation here.
You did explain on the volume bit because of the delayed shipment volumes were lower. But it is purely because of lower exports that there is a sharp jump almost of, you know, INR 100 crores odd jump on the EBITDA.
Is that the I mentioned two factors. One is mix is correct. The second one is the lower fixed cost.
The fixed cost may normalize next quarter. And broadly, the range we're looking at is about 2,500,000.0 move on that. That's what we think on the fixed cost will move. Fundamentally, is the second driver in addition to the movement.
Sure.
So on a from a steady run rate perspective, what should, you know, that number be? Let's say, $1.50 crore odd on a steady state basis, give and take on a quarterly run rate?
We can't comment on that yet. I don't know. It's a forward looking thing.
But I have another question. If it's possible both quarter on quarter next quarter because we have some, you know, savings in June to come with our guidance, the cost in Q2. Apart from that, the mix will change in Q2 because of the export being more than domestic. But we can't comment on the exact numbers of what we're rendering going forward.
Okay?
Sure, Nandhu. No problem. Just the share of exports in U. S. Was around 60% last quarter. What was that number in this quarter?
We'll come back on that. The consignment, which got delayed to next quarter was about 45,000 tons. That's the indicator I've already given. I think in terms of if you if you wait for the second second quarter results, the h one will be fully indicative of what's the normalized number I expect.
Sure. It should be good. Second question on the Kenya side. While the volume run rate is slightly lower versus what we have seen in the earlier quarters, the margin hit is there again. So the volume loss is largely because of the weaker domestic demand. Will that be a fair understanding?
No, no, not weaker domestic demand. I think it is mostly led by two factors. One is, I think there was one, basically one delay in the shipments to Southeast Asia, which is not related to any shipment issue, but the customer asking us to hold back some of the shipments in Southeast Asia, which will settle during the year. And the second is that half of it is due to the domestic African supply, which we are hopeful that we'll make up during the current quarter.
Thank you.
The next question is from the line of Naushat Chaudhry from Aditya Birla Mutual Fund. Please go ahead.
Thank you. A few basic clarifications, sir.
First, on the solar prices in different geographies, just one check our different geography prices more or less largely correlated, or do they move in different direction? So your question is they are are they all moving in the same direction or different direction? Historically, the prices will be Sorry.
Yeah. I get I get your question.
Historically, The US domestic tends to be more or less steady, and it is the pricing is linked to the only The US domestic market. Indian pricing again is or less import parity, but there's also the issue of the Indian domestic pricing having a price premium because of issues related to port and other handling charges and elements. And the two variable number actually is in Southeast Asian market where there's no domestic producers. So really, that's the one which is impacted in terms of deal pricing worldwide. So all regions tend to have a localized number.
The one which moves in sync with the Chinese prices is qualification.
So different prices are fine. Just wanted to understand if everything moves in a similar direction?
Will not. Will not.
Because you see The US and US is on annual contract for the big market. So really, it will not see any shift at all. Whereas the pricing in median market is quarterly, so it will it will shift every quarter, if at all. And some contracts are half yearly contracts, so they are not going to move for at least six months. The UK market tends to be fully annual contracts, so they don't ship during the year.
And Kenyan market or Kenyan exports are mostly quarterly to Southeast Asia as well as the Kenyan sales to US sales to Southeast Asia are also quarterly. Whereas US sales to LatAm is mostly annual.
Second, on the again, on the product pricing, what do you think what can, you know, lead the prices to drop further? Any possibility going down further from here on? And if I ask if if it has to happen, what should then this So in terms of what we can control clearly is our internal cost structure.
This is what we are focused on. And, Nausha, in terms of what your model is our realistic expectation that I mentioned, there'll be 600 crore improvement over last year, split 200, 200, 200. That is our realistic expectation of where we expect the market to be. I guess I expect the maybe 50 or 64 move from what I mentioned. Overall, in terms of numbers, if you put it, not more than that.
Last, on the from an export point of view, how long do you think soda ash typically the product can thrive globally in a normalized market condition?
Can you repeat the question?
Beyond which is the next one. From a export point of view, the soda ash product, can it be private in normalized market condition beyond which it it it's not viable.
Oh, beyond which it's not viable.
I I I I fundamentally, for synthetic producers, it cannot travel long because the variable cost of synthetic production is high, and it tends to be mostly domestic or nearby market. But for natural for ash, have a headroom to travel with a with a freight cost of anywhere between 30 to 50 odd dollars anywhere in the world because the available cost is low.
Got it, sir. Thank you so much.
Thank you.
Our next question is from the line of Abhijit Aguirna from Kotak Securities. Please go ahead.
Thank you so much for the follow-up. Mukun, just wanted to clarify the previous comment regarding the 600 plus 200 plus 200.
So I I'm sorry.
I couldn't exactly follow what this was. It's 50 delta that we are talking about for the upcoming year. This was in relation to what will be the key bundles of improvement between last year and this year in terms of the performance. And I had mentioned that there is the because of inflation of operations in UK that will contribute about INR 200 odd crores. The increased volumes in India will do 200, and our own cost out efforts which we are doing, both at variable and fixed would give us 200 odd crores.
That was broadly the comment I had made last time, and that that is probably playing out as I expect. Okay.
So 200 times three, so 600 is the total improvement on a year on year basis? Correct.
Which which we are doing the year.
UK is more or less in the bag. I think in terms of expansion also is more or in the bag.
I think we caught up with a work in progress with. Got it. Okay.
Thank you so much, sir, and all the best. Thank you. Our next question comes from the line of Mitel from understoodindia.com. Please go ahead. Yes.
I had a couple of questions. First, on the natural potash industry. It is reported that China in China also 2.8 metric tons will come into capacity next year, 2026 as well. Is is is that on schedule or so it's reported 2.8 metric tons? Yeah.
I think that the the there is an effort to continue to keep adding capacity, but I think we're also watching this phase. I think this has to be first looked in the context of whether there's a rationalization of synthetic capacity in China. There is already an effort, and I think we need to watch this. So we'll clarify this to you maybe later than that on next next quarter. Yes.
Regarding the soda natural soda ash only, the the the the the WE soda has bought Genesis in the previous quarter, and now they are the leading producers of natural soda ash. Given their dominance in the forward integration to glass also, are they in a position wherein they can keep the soda ash prices lower and still benefit? The lower soda ash prices are still benefiting them, actually. Is don't understand the question. I'm not gonna answer that in the question of our other specific company, but generally, wanna tell you that when input material prices go down, for a downstream manufacturer, it is actually negative in terms of competitive advantage.
Because this competition gets the material, raw material at a lower price. So, broadly, let me leave that with you. I I think that should give you where I think if you're a downstream product producer, you would want the raw material actually for your competitors to be priced higher. Okay. Got it.
Sir, the second question was on coal prices. We have risen from May. So we have seen a sharp reduction in coal cost fuel cost this quarter. So can can it possibly go up in the quarter? We are constantly contracting, and our numbers are not tender very much up.
I'll cross check this number, but as of now, we think it is still biased towards now.
Thank you. Ladies and gentlemen, we will take that as the last question for today. I would now like to hand the conference over to R. Mukundan for closing comments.
Over to you, sir. Thank you, everyone, for joining the call today. While the market conditions remain evident challenging, our endeavor is to excel in our operation and continue to focus on what we can do internally. And we will ensure that we in all of our current capacities to come on stream are fully brought on stream, focus on cost optimization and optimization of working capital. Next quarter, we'll be able to give a better update on market conditions as the future becomes clearer.
Thank you all and see you in Q2 FY 'twenty two.
Thank you. On behalf of Tata Chemicals Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.