Q1 21/22

Aug 6, 2021

Good day, and welcome to the Q1 FY 'twenty two Earnings Conference Call of Oriental Carbon and Chemicals Limited. This conference call may contain forward looking statements about the company, which are based on the beliefs, opinions and expectations of the company as and date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. 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. Signal and operator. Please note that this conference is being recorded. I now hand the conference over to Mr. Akshat Goenkam, promoter and Joint Managing Director of Oriental Carbon and Chemicals Limited. Thank you. And over to you, Mr. Goenka. Good afternoon and a very warm welcome to everyone. Along with me, I have Mr. Anurag Gyan, CFO and NGA Investor Relations Advisors. Before we begin, I hope you and your loved ones are safe. We have uploaded our results and investor Presentation for the quarter on the stock exchanges and company website. Hope each one of you have had a chance to both of us. Quarter 1 FY 'twenty two was a challenging quarter with the onset of the 2nd wave of COVID-nineteen. We saw the demand slowing down in both domestic and global markets. There was substantial slowdown during the month of April May due to lockdown restrictions for varying degrees across different regions. The entire auto industry faced challenges on the back of demand disruption. OEM demand was also with many automotive companies shutting down their factory service. On account of 2nd wave, we witnessed more localized and micro lockdowns and restrictions imposed other than nationwide lockdown. Despite these headwinds, we have reported total income of INR86.5 crores with an EBITDA of INR52.8 crores and pack of INR 12.4 crores of quarter 1 FY 'twenty two. Raw materials of prices have continued the existing Trend in quarter 1 FY 'twenty two as we have communicated during the last quarter. However, we feel that now they have peaked. The spike in the raw material prices have impacted our margins as the past could generally happen to a lag of 3 to 6 months. However, with our continuous initiatives towards controlling costs and focused efforts on improving operational efficiency, we have managed to limit the impact on Now I would like to update you on our operations. Manufacturing facilities continue to operate normally at both our plants. We took all necessary precautions while ensuring safety and well-being of all our employees. The company has also organized vaccination for all employees and the family members. Coming to our expansion project, we faced delays due to logistical challenges created by the Critical challenges created by the onset of the 2nd wave. Therefore, the Phase 1 of 5,500 tonnes per annum in soluble sulfur line And 42,000 tonnes per annum sulfuric acid line in Arguera is now expected to be commissioned by October. I would also like to inform all shareholders that the Board has approved a revised dividend policy, which is available on the website of the company. This is a very good and very liberalized policy, which states our intention of paying close to 50% Profit after tax outage dividend. This again underlines our commitment to all shareholders and reinforces what we have been Same over the last years, but that we will reward shareholders. Our company believes in addressing the requirements of Our company strengthens the business of its customers through the development of customized grades, possibly the widest global range. We intend to continue to deepen our relationship with customers, strengthening our wallet share. The demand situation is also robust And it has picked up. There are some effects due to COVID in maybe in Russia and Far East Asia, but by and large demand is now robust. Our company has always given utmost importance to research. Our company's objective is to enhance product quality and performance. In order to achieve it, our company has made investments in a new R and D lab and setup, which will be commissioned in this year as well. Our company is also constantly committed to investing in ESG aspects, strengthening its results for compliance, environment, Integrity, talent management, ecosystem management in terms of vendors, customers and stakeholders. Our structured degree business has also started performing well. However, their operations were also impacted on account of a second wave of COVID-nineteen. Our company has remained competitive across various business cycles, growing through every downturn. The result The company has emerged among the most renowned and solidus sulphur players across the world. The business environment continues to be a bit uncertain due to the predicted 3rd week. However, we are well equipped to navigate the near term challenges based on our learning curve last year and are confident that the strength of our manufacturing will continue to drive our business relationships We are optimistic that when the market turns to an even balance, companies like us who have invested in larger capacities at a competitive cost will be at the right place to capitalize in future. Now, I would like to hand over the line to Mr. Anurag Jain to update you on the financial performance of the company. Thank you, Akshay. I will take you all through the standard and financials of the company. Total income for Q1 FY 2022 stood at rupees 86.5 crores as compared to rupees 46.9 crores in Q1 FY2021, Year on year growth of 84%. Income for Q4 FY 'twenty one was INR 1.6.9 crores. High year on year growth is on account of lower base of last year. However, demand was impacted in local and global markets In Q1, on account of 2nd wave of revenue. EBITDA for Q1 FY 'twenty two stood at INR22.8 crores at INR 20.9 crores in Q1 FY 'twenty one, a growth of under 54% year on year and EBITDA for Q4 FY 'twenty one was INR 68.7 crores. EBITDA margins for Q1 FY 'twenty two were up 26.4%. Margins have been impacted due to increase in input costs Rocket Architects in Q1 FY 'twenty two is to register INR 4 crores as compared to INR 1.4 crores in Q1 FY 'twenty one and INR 24.8 crores in Q4 FY 'twenty one. Our EOT margins for Q1 FY 'twenty two stood at 14.4%. With this, I would like to open the floor for questions and answers. Thank you very much. We will now begin the question and answer session. If you wish to remove yourself from the question queue, you may press star and The first question is from the line of Nirav Seshadhyay from Securities Investments. Please go ahead. Yes. Hi. Thanks for the opportunity. I just have 2, 3 questions. First is on the capital allocation policy. So in your last Is there any update or any reason on that? And when you say dividend policy is now being made furtherized, So is 50% payout a base payout or it can vary because when you say up to 50% it can be from So it's 0.10 percent to so just want to get an perspective on that. So I think both these aspects are very nicely covered in the note that is going to be on our website. She covered in the note that is available on our website. What I can say is that we've traditionally been paying out 20%, And now the intent is to pay off 50% subject to the free cash flow being available. So we've not written 50% just for renting it. It is also because we hope and expect to be paying out something close to that. As far as the investments is concerned, I think We've got a nice note there as to how we plan to utilize retained earnings. And it's quite clear over there. So, okay. So, if you look at our vision, as you've put it out in the annual report, which we have communicated repeatedly, it's to be Present in every tire of the world, right? And I would like to really congratulate the promoters, the top management on the stellar operating performance. Prurant and pound capital allocation, they have been making consistently single mindedly to achieve this vision. But as a shareholder or a long term investor, it's It's a little focusing and also you feel disadvantaged given that it is still good to pursue the investment. I mean, the question here is that Are we still a chemical company focused on achieving the stated vision? Or we are now a coating company having a business From manufacturing of rubber chemicals to managing a wide set of portfolio businesses. I mean, an area which in the latter part, we don't have any expertise per se. So just to understand the promoters, per se, is to really pursue the latter part, then why not just share the maximum cash, surplus cash we have To minority shareholders via higher much higher payout or buyback every year, so that even we get an equal opportunity to decide What's best used, we bid for the cash. So this is the feedback we are sharing because on the business side, we have done a phenomenal job in terms of Having that focus and vision and beyond, we are pursuing that. But just on the capital allocation, this week, So I think let me answer your question in 2 parts. Firstly, pretty much all the future free cash flow we are saying we are going to pay out as dividend. So that's one part because when we say 50% of that, That basically is very close to majority of the free cash flow that will be generated after removing money required to repay loans and CapEx and all those things. So that is one part. 2nd, the quarters that is here, it's good to maintain optionality. We may I have acquisition opportunities. We may have other diversification, JVs. For those kinds of things, we need to retain some cash on the books. And that is the reason we are not paying out the cash that is there, but most of the future cash flow is going to be paid out. So basically, my question here is not about having a surplus cash in the balance sheet. That's okay since you're looking at opportunities Which may come at certain time in the future. The question is largely in terms of the quality of those investments which we are making either in terms of AI or Startup and IPOs and all that. I mean, wouldn't one find it more prudent be parking that surplus as a Bond or a debt mutual fund or fixed deposit or in a bank account, See, I think this is being bugged by a committee in the board. The board is also directly supervising it. So there is no right or wrong answer to this. I think this is more a philosophical discussion. What you are saying is also right. What someone else is saying is also right. What the Board and all are doing in their visiting is also right. So I think this is a matter of perception. Okay. The second question is on the other expenses. If you see Q and K, we've seen a drop in sales, but other expenses will not So is there any one off in this? Or how should we understand this? The utilization would have been also lower. So when you say other exclusives, you are comparing with which quarter, please? Q1 quarter on quarter. Super versus Q1 to Q1, okay. Now in Q1 in June, most of the senior members have taken salary cuts. There was no increment. Semi cuts were there. In this quarter, sadly, we had been restored and there has been some increments this year. So there is a substantial difference because of that. Then the major difference is that other expenses also include power and fuel, packing and freight, Which has more than doubled, nearly doubled from last quarter because of the quantity which has been showed. So these are the two major reasons that our expenses are increased. But otherwise, the baseline of our expenses are not increasing. Okay. So going forward, as the utilization improves and the volumes pick up, this will be the base expenses, right? You won't see a similar increase in No, no. So if the volumes pick up, obviously freight will go up, power and fuel will go up, trucking expenses will go up. So other expenses will go up. So there There is a portion of other expansions which will go after the introduction. Okay, Sanjay. Thank you. Ankit? The next question is from the line of Aditya Sivan from SMM. Please go ahead. Good afternoon, gentlemen. So my first question is if we can highlight the volume growth for Q1 FY 'twenty two and for the FY 'twenty one? So what I have said already was that the volume As nearly doubled. So that I've already indicated. It's not totally doubled, but nearly twice last year. Okay. And what was the, sir, FY 'twenty one volume growth figures? No. We do not give exact volumes, please. For utilization fee that is sequential, sir? It's the same thing. Okay. Okay. Sir, my second question, so what is the current penetration level in the United States? Because there so we are targeting major needs. Also, if you can tell us what is the market size in the United States currently which we are targeting? The market size in the United States is around 35,000 tonnes. 35,000 to 40,000 tons. And we have started making endnotes. So we are still in early stages. And hopefully we should improve our market share there. Okay. So from what about the How about 2,000 tonnes we can take as a figure as of now in the U. S. Which we could be doing right now? It's a little Currently, we are already doing a bit higher than 2,000. Okay. So my third question, sir, Sir, we are manufacturing almost 3 kind of weight that is the high dispersion, high stability and special weight. If you can split this into percentage as to how much High risk percent, high stability and special rate? So all of these put together are now, which is 90% or more about I cannot split the offhand between HS and HD, but if we look at HS, HD and Specialty, they constitute More than 90% of our total volumes. Okay. So just would okay, so the special grade component would be a mix Would be a much higher as compared to the high dispersion or would it be lower? What's similar just as now? HS and HC would constitute the major part Okay. Okay. The same things to our West Coast. So have you replaced any threat challenges because of the 2nd COVID wave, particularly to the US and the other economies? I didn't get your question. What was the cost of 67%? It's not major increases towards the exports. So roughly around 65% to 74% is our export. Have you witnessed any freight related challenges, particularly in United States, you and in other countries? Yes. So, freight has gone up. And that has been a challenge. We have been managing this. In fact, if you are aware that even Container availability is becoming an issue for many people. Fortunately, we have also managed That's better. And I think once the freight rate normalizes, which should happen. Okay, okay, okay. Yes. This is one thing that is a big question mark even looking at Q2, Q3 Because there's very little we can do about this container availability and freight rates and all that. And This is an external aspect which will have a significant impact on our P and L and there is little we can do about it. Okay. Okay. Sir, so just to repeat to the earlier participant question, sir, on a sequential basis, the revenue has fallen, but Still the other expenses have gone up. So you had said that the power and fuel cost has almost doubled. Now going ahead, considering the volumes will go up. So are you expecting power and fuel to go up from here on also? So what I said was that the power and fuel, I did not say double. I said That this constitutes power and fuel, petrol expenses and freight. So when my sales have gone up, Then all these things will go up. So going forward, also, though they will not go up on per participant basis, but they would go up on the See, if this is, for example, if I were to if I were to introduce double the quantity I'm producing now, so all these expenses will double, Right? Because these are more of a variable nature. Okay. Okay. Okay. Sir, one last question, sir, which are the 2 to 3 major raw material and also if you can help that split into percentage wise if possible? So our major raw material is sulphur and then we have oil. So these are the 2 major raw materials. Our gender product that we send in the market is 80% by rate is sulphur and 20% by rate is all. Okay, okay, okay. Sir, in the initial commentary, so you had said that because So that the raw material prices had went up. So you've not been able to pass on the same and the similar impact has been seen in the margins. And you also It is that the raw material prices are freed. But consider if the crude prices again start to winch up from $70 to around the 80 dollars $90 So again, we could see further like increase in the raw material pricing or what is your concern? So sulfur and the oil that we use do not carry a direct correlation to the oil. And if you look at historically, you look at it historically, The price of sulphur and oil used to be lower even when the price of crude was higher than this. So there is no direct correlation. They had their own supply demand dynamics. That is why looking at every aspect, we feel that the work week, We have been closely monitoring global prices, indices, trends, production parameters, How the production is happening across the world. And that is why, I mean, our analysis is that they might have peaked And we should be having better prices in the future. Okay. Okay. And from where are we taking this quoting one from? From the OEM, we have digital suppliers as well as global suppliers. So we buy globally and we buy it from Yes. So 50% would be export and 50% domestic, would that be okay? No, I think domestic reserve, import is less. Okay, okay. Got it, ma'am. Thank you, sir. That's all for me. Thank you. The next question is from the line of Dhruv from HDFC Asset Management. Please go ahead. Yes, sir. Thank you so much for the chance. So in the earlier comments, you mentioned that large part of your cash flow will now be paid as dividends. And if I also probably read through your dividend policy. A large Free cash flow. Free cash flow, yes. And delivering policy, it seems so is it Fair to say that the alternate investments or the other investments that we are planning to do, on an incremental basis, we will not be actively considering them. And except for the what we have already committed, I believe, we'll not be considering them if I read the statement on your earlier comment correctly. Again, what I said is that we have certain retained earnings in our company. I said, I don't expect the retained earnings To grow by much because most of the free cash flow is going to be paid out. Yes, Yes. Okay. So that does also imply that incrementally On an incremental basis, what I was wondering from, we won't be the alternate investments or the other investments that we were doing, that won't be actively considered now. I'm sorry. I don't get your question. So on an incremental basis, you will not be allocating further capital to The other kinds of investments that we were looking at earlier. I don't think I made such a statement. Okay. Got it. Got it, sir. So the second thing was on The Wazim outlook now, you said that the outlook has improved currently. So should we assume broadly kind of utilization From the current levels, from, I mean, current times? So what kind of levels did you say? When, please, can you remember? You said the demand outlook has improved significantly now given everything has restarted largely. So should we assume broadly full utilization or broadly if we can So obviously, we are looking for a much better demand outlook and therefore, a better offtake from other facilities. And certainly, the constituents will be a better capacity utilization. Was that your question? Yes, yes. Got it. And sir, lastly, we export quite a significant portion. Now is what we sell is on CICE basis or we sell on ECOB basis? I'm trying to understand, does the freight cost impact you in terms of realization? Or it's a cost to the customer? No, no. Mostly Okay. So the temporary increase in freight cost will have some implication for us? Yes. So it will have implications for us. Obviously, our customers also do realize and we are seeing some price correction on that impact. But Overall, even now in July also the sales have increased. So let us see how this how this is progressing. Sorry, sir. Obviously, again, there's a further increase because there are a lot of containers which are held up in China. And the free flow is being further effective. So let's see how this goes. Sure. And so how frequently do you revise your contracts with your customers? I mean, what duration are they? In terms of, say, for example, when is the next price reset that happens? Because only for the new contract, you will set it up as the new freight rates, but for the older So what I think is that most of the contracts are either on quarterly or up yearly basis. So I think if you look at it, Chemicals might be the kind of an equal split with a little bit balance on the quarterly side. So these are the I mean, so at least for a quarter, the prices are fixed. Okay. Got it. And part of this higher shipping cost impact is would also be visible in the 1Q numbers also. So it will I mean part of the impact is there in the 1Q? It will reflect in the numbers. Got it. Sure, sir. Thank you so much. That's helpful. Thank you. The next question is from the line of Nikhil from SI Yes. Hi. Good evening. Am I audible? Yes. Yes. She is here. Yes. Hi. Sir, Coming to your annual report, in the annual report, we had mentioned that the industry dynamics for last 3 quarters have been very bad. And there was no much pricing which was happening and there were excess capacities which were created. If you look at like last quarter or with the sale of the insoluble sulphur plant From Eastman to the PE, have we seen any plant shutdowns? And consequently, the increase in the cost structure which we are seeing, are we Do you see that considering the strong demand, we are in a position to pass on that increased cost structure to the customers? Or We are still some bit far away from this. So to answer about the cost structure, the cost structure has increased And it's working all the manufacturers of insoluble sulphur. Our trial companies also understand that there is a substantial increase in the cost structure. And we have wherever we have talked about it, we negatively have introduced. So it is not that The trial companies will say that though the prices have come up, we will not take increases. Secondly, Chinchak has hurt everyone. Everybody is looking to mitigate their costs across the globe. As far as your first question is concerned about shutdowns, Whether there has been any unscheduled shutdown because of this thing, I am not aware of that. Obviously, if because of Because of COVID, if there has been less supply, people might have produced less. But shutdowns of COVID-nineteen, we are not aware of this. Okay. So just coming to the second point, First one, you mentioned that the price increases are happening. The reason I'm asking is because I understand this freight cost and all which has increased has impacted Q1. But if you look at our long term EBITDA per ton or gross profit per ton which we were making, do you think like in a quarter or 2, once the price Increase in the raw material prices stabilized, we should be back to that level? Subject to freight. Because we don't know how the freight thing is going to play out in future. For example, I'll go and ask for a price increase in the month of June with my customers and I get I get a substantial part of it. And then at the end of April, it keeps on increasing in July and now there is increase in August. So that is something which will impact our profitability even going forward to the growth in stabilizers. Sure. Got it. And last question, on the new, the brownfield capacity, which will come in October, Are you seeing any tie ups or like any Feelers in terms of the utilization of the capacity being tied up with the customers? Or would it be like once it is In place and then only the marketing starts or how does this Marketing has already started And we have started seeing traction with our product getting approved at different customers. Now it's more about taking this So first, first, logical conclusion for getting the final approval and then actually converting it into business. But I would say we're making progress on that front. So this would meaningfully contribute only next year, right? In the next financial year, correct. That's correct. So meaningfully contributing to the next financial year. Okay, sir. Thanks a lot. Thanks for your time. And 1 now. The next question is from the line of Ruud from HDFC Asset Management. Please go ahead. Yes. So just a follow-up on the earlier one. If I look at the annual report, the freight and forwarding cost used To be around 8% to 8% of our sales, Dhir. So how has it changed now? I mean, what's the proportion now? So currently, it is just give me one moment. It's about 9% to 10%, but that was Q1. Q1. Q1. Q2 was further gone. Okay. Okay. So Q1 was not significant, but we are seeing a further increase from Q1 level. Is it fair to assume, say, for example, when the next contract reset The pricing will be reset at the including the freight. So all these increasing freight costs can be absorbed then by the customer. It will all depend upon market dynamics. As I pointed out earlier, most of the contract receipts have happened in the month of June for July onwards, Right. So these contract checks are either for July August, September or July to December. So the next contract you said would be from October? The majority will be from January. Yes. Majority will be from January. And I think you'll have to pause the bridge at that stage. The situation is very volatile to predict what will happen there. Capital process at that stage. Got it. Sure. That's very helpful. Thank you so much. Thanks. Thank you. Participants, to ask a question, please press star and 1. The next question is from the line of Amit Shah from AC Securities. Please go ahead. Hi. Good morning. Good afternoon, sir. Sir, I have Shin from North America and Europe. And have you added any new customers here or cured more business from Existing customers? So the demand from Europe and USA has been normal. We did not So it is mostly the normal. And yes, we are adding new customer traction Worldwide. So that is a continuous process that we have I think new customers During the current year also. Okay. And sir, our Phase 1 of the expansion plan is expected to commission by October 2020 1. So what is the order book visibility post this capacity? By when do we expect the capacity to ramp up? So what is going to happen is obviously there will be some new orders which will happen from Q1 of calendar year 'twenty two. But looking at the new average capacity of Phase 1, I think that should be The utilization of that capacity should start from Q1 of FY 2022, 2023 as Akshay has Okay. And sir, lastly, sir, of this 216 crore CapEx plan, how much has been incurred till June 2021? And what is the expected revenue potential from the entire CapEx? So about INR 35 crores have been sent in June. The first stage is security of around INR 150 crores. And out of the CHF135 crores you have spent What was your second question? Is there remaining potential for this entire from this entire effect? Hello? Yes. So the revenue potential would be somewhere between 70 crores to 75 crores is around this household, around 70 crores. Okay. Okay, sir. Thank you. Thank you. The next question is from the line of Manish from Janbu. Please go ahead. Thanks for your opportunity, sir. In In the annual report, sir, you have written written there is a statement that insoluble sulphur cycle has bottomed out. And there is a in the future days to come, the price can go up. No, it's the other way around. What I had said was that the sulphur pricing, it appears to have tweaked. It is not rising anymore. Sorry, Ram. So I think I know what you're referring to. And what I meant is that the Margins and the whole economics of the industry had actually bottomed out and investment economics had disappeared. So now what is your question regarding that, please? No, no. I am asking about the insoluble sulphur cycle has bottomed out and the So So when it will go up and how it will go up is a different chapter? No, no, no. The question was that has it bottomed out? That was the question. Yes. In my view, we had reached the bottom. I mean, It will be very difficult for it to go further down. That's right. That's right. That's all that's all that was my question. And the second question was about Okay, sir. Yes. That's okay. Thank you. Thank you. The next question is from the line of Akshay Jain from Jain Capital. Please go ahead. Hello. Good afternoon, sir. I have a couple of questions, Apitha. Firstly, how is the scenario on Supply side for insoluble sulfur, any new capacity coming up globally? And secondly, what is your outlook on the tire industry With the current forward scenario in the domestic market? To answer your first question, I think whatever specificity To come up, I have already come up. We are not aware of any new capacities which are going to come up now or which are under implementation. Let me put it this way. To answer your second question, I recently read somewhere that in Europe, the secondary market for tire is booming now Because of the preference for customer travel. So that augurs well for tire consumption. So we are looking at the demand for tires In worldwide, as far as domestic demand is concerned, again, the same holds true. With greater personal mobility, the secondary tire demand appears to be on the rise. So we should be looking at a healthy demand in the domestic sector also, which we feel should be growing in double digits as we have understood. Okay. That's all from me. Thank you. Thank you. The next question is from the line of Cesar Gautik from CCIBL. Please go ahead. Sir, very good afternoon. And sir, I wanted to understand, sir, that there has been some news that Some private equity has bought over Eastman, which are competitors. So So any impact on the pricing of the product? Or I mean, are they basically aggressively looking up to take market share or Its share or increased volumes or any other impact that you see due to this transaction? I think it's too early to comment on these things. We have not even taken control of the asset To the best of our knowledge, we will only know how they will behave once they're actually taking control. Okay, sir. And also, sir, Had the Chinese insoluble sulphur manufacturers, have they been able to get some approvals and enter our customer base? No, no. To the best of our knowledge, no. Okay. And sir, is there any possibility of us entering the Chinese market? Well, we keep tabs on it. But if you ask me, in the near future, are we going to be getting a lot of sales from that? And I don't have that visibility. And so which are the other major Rafi, that you are not present as of now, any encounter you would like to enter? North America, Which is what we've been saying. A lot of focus is going into North America. And so the Japanese market, so this is the The largest automobile market in the world. Yes, I think I missed mentioning that. But more than the Japanese market, the Japanese manufacturer Sure. It's also continue to be on our radar wherever our presence is low. And as we get volumes from them, there may even a lot volumes in Japan. Sure, sir. And sir, also, sir, last year EBITDA has been flat since the last 4 years, and we understand due to COVID and other So but going forward, so you think that we're able to sustain a quarterly run rate of Over 100 crores top line and around 50 crores EBITDA per quarter? No, I think definitely, I think we should definitely, once things turn around, we should certainly start hitting 100 crores plus top line. And if we hit INR 100 crores plus top line, there's no I mean, the EBITDA, there's no reason why it could not be B plus. And sir, coming to a pricing arrangement with our customers, sir, what all is a pass through, sir? Like, for example, is the currency pass through raw material? Nothing is pass through. This is all basically negotiated every quarter. I mean, you're asking if contractually what is pass through and contractually Sir, now what are the factors which caused our raw material prices to increase or decrease? Like you mentioned that Even in the past, crude was above $100 sulfur prices were under control. So basically, what is basically causing sulfur prices to move? So sulfur has its own demand and supply dynamics. Sulfur, as you know, is also a major component of fertilizers. So, one of the biggest consumption of sulfur is fertilizers. So, that is one thing which determines The price of sulphur will be better susceptible to a huge production of fertilizer, and there is no corresponding to integrate availability. The other is the operation of the refineries per se. So there is no exact formula or method to say that, which is what is intact. But 2 major things which impact the pricing itself The So, people, lower supply of sulphur and consequently a pressure on sulphur prices. And secondly, there was a certain increase in convention Due to increase in fertilizer production, for example, then that could have an impact on sulphur prices. Great. And so lastly, We just have suggestions, sir, that instead of dividends, sir, please do regular buybacks so that our earnings per share can increase permanently, sir. Thank you very Thank you. Thank you. The next question is from the line of Abhijit Kaitan from S&M. Please go ahead. Thank you for the follow-up, sir. So my question is in which manufacturing unit of Darumvera and Mundra where we manufacture Interimable comfort. So where is the EBITDA per ton higher? No, that is very difficult to say. It depends on the area that we service, Where it is sold, so that would be unfair from Tarikatan to check which is advertised. Okay. But sir, as per the raw material availability like so to which manufacturing unit, so the raw material availability is closer And freight cost and power cost are low. So based on that, I think Let me put it this way that we have raw materials, for example, sulphur It's available in Mumbai in the work from Reliance and in Bhavurra from Panipat, refinery of IOCL. So freight wise, except for imported raw material, wherever it is to a little extent, There is not much difference in raw material prices. Okay. So our expansion of For 11,000 metric tons in soluble comfort is into which manufacturing unit? It is in earlier. Okay. Okay, great. Thank you, sir. Thank you. Ladies and gentlemen, this was the last question for today. I would now like to hand the conference over to the management for closing I take this opportunity to thank everyone for joining on the call. I hope we have been able to address all your queries. For any further information, kindly reach out to us for strategic growth advisers. Thank you once again. Thank you. On behalf of Oriental Carbon and Chemicals Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.