Q4 20/21

Jun 23, 2021

Ladies and gentlemen, good day, and welcome to Oriental Carbon and Chemicals Limited Q4 and FY 'twenty one Earnings Call. This conference call may contain forward looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on 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. On your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Akshat Goenka, Promoter and Joint Managing Director of Oriental Carbon and Chemicals Limited. Thank you and over to you, sir. Good afternoon and a very warm welcome to everyone. Along with me, I have Mr. Anurag Jain, our CFO and SGA, our Investor Relations Advisors. Before we begin, I hope you and your loved ones are in the best of health and keeping safe by taking all the COVID related precautions. I hope you have received our result and investor presentation by now. You can view the same on our company website. I am delighted to share that the Board of Directors have recommended a final dividend of rupees 10 per equity share of INR 10 each. This is 100% of the face value. In addition to the interim dividend declared of INR 4 4 per equity share in November 2020, thereby giving a total dividend of rupees 14 per equity share for the financial year End of 'twenty one. Coming to the performance of the company. Financial year 'twenty one began with lots of challenges due The outburst of COVID-nineteen pandemic had caused severe disruptions in business operations across industries. However, as the economy started to unlock gradually, We started witnessing recovery in demand. Our business operations started to pick up pace and we saw gradual improvement in our production levels. We started seeing recovery in our business trajectory starting 2nd quarter with normalization of replacement and OEM demand in the domestic well as international markets. This growth momentum has sustained in quarter 4 FY 2021, and we have reported a top line growth of 21 percent compared to previous year quarter 4. For the year 2021, the company has clocked revenues of INR344.7 crores. In the current business environment, we have seen an increase in raw material prices, which continued into quarter 1 of FY 2022 as well and hence is impacting margins in the current quarter. However, we are continuously focused on implementing measures towards controlling costs and improving operational efficiencies. Both our plants at Dharugra and Mundra are running normally despite the 2nd wave of COVID and we are taking all necessary precautions at all our workplace. Our expansion project is facing delays on account of hampered civil work, which again due to unavailability of labor And mobility issues of procuring machines due to the localized lockdowns that were in effect across the country in April May. With the unlocking and the pickup in various activities, we now expect the projects to be commissioned by October 2021. Also, I'm very pleased to announce that OCCL has been awarded With the EcoWattice Gold Sustainability Rating, this places OCCL among the top 6% of companies Assessed by EcoWatt is globally during the year. This was a very good achievement and we are very focused on being responsible is worldwide in terms of quality of product on one hand and superior service on the other, often collaborating with them to work out unique solutions. We are long term suppliers to most of the prominent global and Indian tire companies. We are focused on leveraging our strong execution track record to help us increase our wallet share with existing customers. Continuous investments in technology and R and D enables us to develop our product further. We will be focused on consolidating our dominant position in the Indian market, while increasing our penetration Into those markets where we have low penetration right now. To conclude, it has been a good year for us despite external challenges. We believe that the short term may be challenging, both from a demand and margin perspective in view of the various disruptions caused. However, we are confident that the medium term outlook is stable. Now I would like to hand the line over to Mr. Anurag Jain to update you on the financial performance of the company. Thank you. Thank you, Akshat. I will take you all through the stand alone financials of the company. Total income for Q4 FY 2021 was up 21% year on year INR 2 INR106.9 crores as compared to INR 88.3 crores In Q4 FY 2020, driven by sustained demand momentum post strong Q3 FY 2021, EBITDA for Q4 FY 2021 stood at INR 38.7 crores as compared to INR 29 crores in Q4 FY 2020, a growth of 33% year on year. EBITDA margins for Q4 FY 2021 stood at 36.2%. Margins have been affected by increased input costs. However, our sustained focus on improving operational efficiencies and tight cost control led to limited impact on EBITDA. Profit after tax for Q4 FY 2021 stood at INR 24.8 crores as compared to INR 17.1 crores In Q4 FY 2020, a growth of 45% year on year, our PAT margins for Q4 FY 2021 improved by 390 BPS to 23.2 percent. To quickly summarize the full year numbers, total income for FY 2021 stood at INR 3 INR54.7 crores compared to INR 353 crores at FY 2021. The minor dip in total income was due to Q1 FY 2021 results being affected by the shutdown of plant due to COVID-nineteen lockdown and low offtake of material immediately after assumption of production. EBITDA stood at INR124 crores as compared to INR108.5 crores in FY 2020, a growth of 14% year on year. Margins for the full year stood at 36%. VAT stood at INR 75 crores for FY 2021 as compared to INR 71.5 crores in FY 2020, a growth of 5% year on year, PAT margins for full year stood at 21.8%. 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. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Pratej Cheda from Lucky Investment Managers. Please go ahead. Yes. So do you have any capacity on based on whatever on the quarter 3 quarter 4 Capacity utilization that you have for the ensuing year for growth or now the incremental growth On this on the revenue that we saw in quarter 3, quarter 4 is purely dependent on the new capacity which kicks in from quarter 3 or FY 2022. That was my first question. My second question is, we did a call in quarter 3 around I think around February. We were hopeful of capacity Panshan coming in by quarter 1, just was trying to understand why it's been dragged up to quarter 3 straight. That's the second question. And third is, is there any supply changes in the industry over the next couple of years? Thanks for the questions. Firstly, I'll answer question 2. We were always hopeful of it coming in July. And then we lost April May and a lot of June Due to vendors being shut, so equipment is not coming in, labor not there. So that's the reason. And even right now, a lot of people are struggling in getting labor back and supplying us equipment. So since the project is very dependent on External factors rather than internal factors. That's the reason we are saying October. Point number 3, there is no new supply side developments from my side to update on, except for what has What we've already said before and what are publicly announced. Question 1, quarter 3 and 4, we were practically at optimum capacity The utilization, maybe a little bit here and there, but the major growth would come with new capacity. Okay. Just on that supply side, sir, so in your opinion, what should be the industry capacity utilization today, Let's say in quarter 4 because lot of them would have gone through their full capacity utilization. And over the next 2 years based on the supply scenario, What do you think should be the capacity utilization in the industry? So I think I mean, I'll only take it through from us. I would assume that everybody would have been at optimum capacity utilization in quarter 3 quarter 4, right? Going forward, capacity is coming in from us, 30,000 tons is coming in from China Sunshine. But I think if the situation remains like it was in quarter 3 and quarter 4 and looking at natural growth rates All those things, these capacities should get absorbed. I don't have specific data on capacity utilization for our competitors. Okay. So the industry capacity utilization will not go through a sea change in the next 3 years, right, Yes. Even after the capacity addition? Yes. This is assuming that in Quarter 3 and quarter 4 things were at optimum levels. Sorry? This is assuming that quarter 3, quarter All things were at optimum levels and in the next 1, 2, 3 years, regular levels of growth normalized and increased demand. Okay. Thank you very much. Thank you. The next question is from the line of Anuj Sharma from M3 Investments. Please go ahead. Yes. Thank you. Am I audible? Yes. Yes. Thank you. Just On the previous question, an extension of the same. So how is the pricing behaving? Can you just give some insights on how the pricing is behaving and What is the outlook on pricing? See, the pricing has there was no change in the pricing during the last 6 months. But with the increase in raw materials, we are expecting prices to go up From next quarter to absorb the increase in raw materials. All right. But As you said on the supply side, there has been a delay and the demand continues to be optimum. Do you expect some changes On the pricing side, given that it's more the demand is more secular? So that is why I said that looking at this, we think that we will get the pricing from next quarter to absorb the increase in raw material prices. Okay. Okay. So I'm just going beyond the raw materials. So just beyond the pass on, there is no outlook you have on Beyond the Sorry, we cannot say that it will increase. If you are saying that whether the whole margin will bump up from What it was in Q3, I believe in Q4, I would not say that. All right, all right. Thank you. And my next question is on the cash balance, how are we deciding how much cash we'll require and How are you thinking about the cash utilization? So as of now, We are looking at utilizing cash in alternate investments, which are showing up in annual report as well when they come out. And that is where we are doing it. We are also keeping some cash available to offset our debt, So that option is always there and you're not running a high debt environment. And yes, And then as appropriate, we'll see what needs to be done. Okay. Okay. So lastly, Last question on the alternate investment, what is the final or the total commitment we have decided? Is there any change on that? And what is the expense structure of this alternate investments? So as of now, the committed investments towards these alternate investments So it would be ballpark roughly INR 60 crores and we are quite comfortable Taking it to around 20% of our net worth or gradually over time and our net worth will also keep increasing. What was your second question regarding that Yes. What is the expense structure of this alternative investment? What do you mean by that? What is the cost of management, the fee structure? You're saying per it's different, It's different because a lot of investments are done directly where there is hardly any fees. Some of them are a little bit of them are through funds, which has a standard fees. It's very different. It can't be answered in a general way. All right. Thank you for that. The terms we look at are always net Okay. All right. Great. Thank you. Thank you. The next question is from the line of Shashank Ghanodia from ICC Securities. Please go ahead. Yes, sir. Thanks for the opportunity. So I just wanted to understand, so large part of raw material inflation is already building into the numbers or is there some part which is Lower to Q1 as well. No large part is going to come in Q1. Okay. So in that case, Arvind, what will be a sustainable margin guidance at your end that you'd like to guide us? See, The medium term, long term guidance remains the same what we said in last quarter of EBITDA margins in the 28% to 32% range. It's very difficult to guide on Q1 margins and Q2 margins. But sir, last three quarters, you have done much ahead of the 32% upper bracket of the range, right? So, Albert, our special efficiency is also kicking in with the brownfield expansion. So, is that 34%, 35% kind of a range sustainable for us Over the long term, it's 2023 at least, FY23? Okay. If you ask is it possible, then yes, and it's possible. But is it something that we can commit to right now? The answer is no. Okay, okay. Fine. Secondly on the CapEx So out of the entire company to CapEx, what amount have you spent till date and what is going to spend in effect 202223? In March 31, we had spent around INR 120 crores odd. And And in this financial year, just for the current CapEx, we probably expect to spend another 30, 35, let's call it 35. And then for the 2nd round of CapEx, the amount would be roughly INR 60 crores And the exact deployment depends on when we kick started. Right. So, sir, But is it safe to assume that by FY 2020 PMB commission the 2nd phase as well or it can go even beyond I think we'll take a call on this once this line is commissioned. So from the time we take a call to do it, 16 to 18 months is when it will take to commission and the earliest we will decide on it is in October after this one is commissioned. And then lastly, what is the growth? To answer your question, I would say March 23 is the earliest that it would come. Right, right, right, right. So your question is answered. Yes. I was just asking what is the gross debt on book and what is the trajectory going forward for us? Sorry, I didn't hear the question. So what is the gross debt on our books balance sheet on the standalone basis and the trajectory of surplus cash on balance sheet as Total debt as of 31st March including short term and long term was INR178 crores. Any repayment for the next 2 years? So next 2 years, if you are looking at the end of the next year, We think that it will be around INR 180 crores to INR 185 crores by the end of next year also considering The CapEx which is there and the repayments which are there. Right. Thank you so much. I think we are close. Yes, I think they're going to be close to peak debt by September 30. Yes. Right. Understood. Thank you so much. Wish you all the best. Thank you. The next question is from the line of Chirag from TLC Asset Management Company, please go ahead. I have a couple of questions from my side. The first one is, What is the total revenue potential from the new capacity? And if you could break that up between insoluble sulfur to sulfuric acid part? And when do you expect to achieve full utilization? That's my first question. Just give me a moment. So the total revenue potential would be about INR 30 to INR 140 crores for the two lines. And can you break it up between the two lines please? Hello? No. So 2 lines are you calling? No, I meant between not the 2 lines of 5,500 each, I meant between Sulphuric acid external sales as well? Sulphuric acid should be around another INR 25,000,000 to INR 24,000,000. The total potential is INR 170 crores. Is that the correct understanding? So basically what Anurag is saying is that line 1 should give around INR 70 crores And sulphuric acid should give another INR20 25 crores. And then Line 2 should give another INR70 crores. Got it. That's great. The second question is, in terms of growth for the last few years has been on the slower side. So you've grown 5 year CAGR revenue at Sort of 4% and 3 years at around 5%. And we understand that there are opportunities within insoluble sulfur, but we also recognize the company has looked at outside opportunities Outside of within chemicals, but outside of insoluble sulfur. And any thoughts on that? And if you could just maybe just So Chirag, thanks for the question. So we did review various things Outside insoluble sulfur, but none of them in a related space, rectify. And we dropped the idea of doing anything in the related space. Now The question then comes is, are we going to do something in an unrelated space? And frankly, as per what our internal deliberations and discussions right now are, Is that I don't think we are poised to do anything in a totally unrelated space. You're opposed or unopposed? No, we are right now not keen on venturing into an unrelated space, which is not directly related to insoluble sulfur. And the ecosystem around insoluble sulfur, around tires, around rubber chemicals It's something that we have reviewed and exhausted as of now. And when do you going back to the earlier question, when do you To achieve full utilization of both lines? Okay. Anurag, do you have the When do we expect to achieve full utilization of both the new lines? February 24, 25, somewhere in the second half of twenty twenty four, twenty twenty five. So the first line we would hope would be in the next financial year. That would be our hope depending on how the growth rates come and how the new approvals come. By the end of FY2023. Correct, correct, correct. By the or the end of calendar year 2022, Early, early, early calendar year 'twenty three is when we expect to achieve full utilization for the current line. And I think it's a bit early to talk about when we expect to achieve full utilization of the next time because we're going to review the scenario in September October. That's when a lot of our approvals and orders are supposed to come in for calendar year 2022. So now everything comes in smoothly and we have very good visibility From the current line, that's when we'll pull the trigger to expand the other line. And then that would basically be commissioned by March, April 23, assuming we pull the trigger to Started at the end of this year. And then that would take its own few months to ramp up. Sure. Could you speak about the alternative investments? What are they in right at the moment? Sorry, please repeat. You had mentioned alternative investments of I think INR 60 crores. So in what fund in what's the format, in which funds, what type of funds have you invested in? Sure. So I can speak about it And when our annual report is published in the next few weeks, all the data as on 31st March, which is around INR 30 odd crores Along with commitments will be published. But this is these are various, I would say, a lot of opportunistic investments that have come about as well as some focused Would you like me to go through each one right now or we can The more meaningful ones would be So after 30 crores, what would and the commitment of 30, what are the larger investments? So the larger ones out of the commitment of 60 would be funds, right? Funds like Fireside Ventures, Funds like India Poshint and some high yield debt funds, which are doing very well. In terms of These are either high yield private equity or some form of equity funds? Correct. There is no public markets, firstly. There is nothing in public markets. Now if you want some other marquee names that you may be familiar with, which has actually given a stellar return On paper is a share check that has been in the news recently. We got in at a very good valuation. It's already gone to 3x In 6 months, similarly things like BluetoothI, something like OIBDA has doubled In 6 months from when we invested another company where we invested money in March We either directly invested in the company, the Bluetooth guy for example, you would have invested directly into the The line for the management is disconnected. Kindly stay on line till I reconnect them. Ladies and gentlemen, we have the management line reconnected to the call. Thank you and over to you sir. So sorry, we got disconnected. Apologies for that. Chirag, did you catch my entire answer? No, I got part of it, but my Follow-up to that was the companies like Glutakai you would have invested in directly not through a fund? Correct, correct, correct. So the largest investments, if you talk about out of INR 60 crores, the larger cheques that comprise that would be through funds, Smaller checks would be great. And right now a 30 crore investment and a 30 crore commitment, is that right? Like the Co invest or like through the network, because you see in the last year, a lot of companies, as you know, went through a lot of distress And they were forced to raise funds at very good rates and very good opportunities. And what happened is plenty of the existing investors Did not have the liquidity or did not want to commit more capital to exercise the pro rata. So people like us got the opportunity to participate at rock bottom Sure. And this is a 30 crore investment at present with a 30 crore commitment, additional 30 crore commitment? That's correct. And also the reason for that is because as you know in the fund structure, you make a commitment which is drawn down over 4 years. Understood. So my follow-up to that is that obviously our base business is a manufacturing entity and our payout is still extremely low. Despite the fact that you have paid out INR 14, the payout as And hence, wanted to understand the rationale. We understand this commitment of INR 60 crores has already been made, But the comment that you will go up to 25 percent of net worth and last year's net worth will take you to around 100 for investment. So the justification for increasing investments Further from here is what we'd like to understand when the payout ratio is as low as it is? Look, It's a valid point and it's always a point. See, I would say that one has to look at it from a point of view of returning money to shareholders versus Earning a good return for the shareholders. I think that's where the conversation has to come to. And I think let me give you a point more thought and then circle back to you and answer it in a better manner. So what we would look certainly I think all minority shareholders, these kind of investments, we understand the commitment of 60, but we would look to see that any investment above the 60 It's done in an individual capacity. So you can pay out the money as a dividend and then individually promoters can do that in their own individual capacity Because our shareholders, we are keen to invest in Oriental Carbon. We are not necessarily keen to participate in fiacide or glutocay or others. So I would urge management to think about restricting this investment to INR 60 crores and not enhancing it to 20% of net worth, which is a very, very substantial number in our mind. I think fair enough and point well taken, sir. We'll circle back on this. I made a note on it. Sure. The last question I had was, I believe Eastman has sold out They are incurring both of the business to 1 drop. So do you see any impact of that? So yes, this is certainly there. They have sold it out. I believe the price that has been declared is around $725,000,000 Impact on that, I think it's too soon to say how it's going to shake out. The deal hasn't closed. It's expected to close in the next few months. And then we have to see what happens in the market with that. I think the deal value certainly seems quite less to me, if I had to say that. Could you have an assumption in terms of what would be the revenue or profitability of the businesses sold? Because I know it's not just in cerebells, it also includes something else. Yes. We don't have exact figures, but if I had to make a While it gets, this used to be in an EBITDA multiple of maybe 6 to 8, somewhere in those single digit regions. Sure. Great. Thank you very much and all the best for the coming Thank you. The next question is from the line of Dikshit Doshi from Whitestone Financial Advisors. Please go ahead. Yes. Thanks for the opportunity. Most of the questions have been answered. Just a couple of small things. What would be the cost of debt currently? And you mentioned that our capacity of 10,000 is coming and Sunshine is coming up with 30,000 tonnes. What would be the current global capacity? So the cost of debt would be somewhere at an average of about 7.3% to 7.4%. And as far as global capacities are concerned, they should be Around 300,000 tonnes. Okay. And one more thing, Last time you mentioned that this 41,000 tons of capacity is coming up between OCCL and Chang Cheng, But there is some reduction in the reduction is also going to happen in 1 of the Japanese plant and Eastman plant. So for this expansion, do you feel that reduction will happen? I mean, for this deal of Eastman, will the capacity of They'll be looking for shutting down the plant or it may not happen? I think the Japanese plant has already happened, but We don't know what will happen in the future because it has already been taken out by one drop. So it will not be right to speculate just now What steps they will take with that company in the near future? Okay. Thanks. That's it. That's it from me. Thanks. Thank you. The next question is from the line of Avishik Datta from Prabhudas Keladhal. Please go ahead. Hello, sir. So just wanted to know like has there been any significant disruption in the month of April May and how is it looking like in the current month? Yes, there has been an impact on sales, especially in the month of May, which is going to continue in June. April was okay. But in May, there was a reduction in demand, so actually in the domestic market. And that reduction continues in the month of June. But we hope that with everything opening up and the tariff and the Okay. If I have to just in percentage term from Q4 levels, what will be the impact? Just ballpark, what kind of And downside was there in the month of June? That's just a reduction. And But I will not be able to tell you exact percentages because we do not discuss the quantities here. Okay. And in terms of raw material price Okay. I will tell you, in the domestic market, there has been a richer amount more than 20%. Okay. And so the raw material side, is the pricing upswing still on or has there been some softening because There has been softening in prices of other chemical prices also. No. Unfortunately, in our case, what is happening is that there has We obtained stability in the last 3 months, but we do not see any softening as of now. So they have been increasing Simply for the 6 months till April and now they have been more or less stable since then. But We are not seeing any softening. We were expecting some softening in the month of May or June, but unfortunately it has not happened Okay. Okay. Thank you so much. Thank you. Anyone who wishes to ask a question may press star and 1 at this time. The next question is from the line of Rohit Nagaraj from Suniti Securities. Please go ahead. Yes. Thanks for the opportunity. So pardon me from a limited knowledge, As I can see in terms of our capacity expansion, these have happened at the rate of 5,500 metric tons On a consistent basis, is there any thumb rule to this? And since we have reached at a level where the growth probably will be Relatively faster. Again, why are we doing that just 5,500, 2 lines instead of going in for a little higher Expansion, which can probably give us benefits of scale. Thank you. No, there is the only thumb rule is that our lines are designed this way That one line may approximate capacity of 5,500. So these are the lines that we keep adding 1 by 1. There is no other firm rule on that in terms of demand, etcetera. Obviously, if the demand is more or less, we can pace the PACE, the lines accordingly to meet the demand. Right. But as I can see, Historically, every after a couple of years, we have seen that there has been a capacity addition. So is it Not possible to do it at one go instead of going on a yearly basis, which as I have explained probably would be Good in terms of benefits of scale. So instead of having the 11,000 tonnes capacity, directly going for Maybe a 22,000 ton capacity, which can give us those kind of benefits. So we buy the land and when we do the Civil work etcetera and common utilities, we do it on the scale for 1,000,000 to 11,010. So that is why whenever we do the CapEx, the first phase is much more expensive than the second phase, because in the second phase only the line comes in, The common utilities, civil work, etcetera is done in the 1st phase itself. All right. And generally, how much time does it take To put up a line? So it takes around 18 months for a line to come up. Okay. Right. So we have to plan probably a couple of years in advance If we gauge that, there would be certainly a demand till we see, right? Yes. So ideally, we would like to See the demand 2 years ahead and then put a column. Correct. And you explained in the earlier And sir, that we expect that sometimes on mid-twenty 24, we see the incremental capacity utilization being absorbed And we are at optimal level. So effectively, it seems that every single year we will have to add another 1500 tons of line? Well, that depends on the growth, what growth we see in future. So based on that, we have to time Time by expansion. Right. We have to take into account what is the market growth that we are anticipating in accordance with the time by expansion. Right. And just a last just a small clarification. So maybe sometime in 2017, what was The cost to put up 5,500 tons of line and what has it been now? I mean, just to understand what has been the Price inflation in terms of the equipments and the capital expenditure. So when we started off the Thanks, Shun. There was not much inflation at all. Thankfully, a lot of our equipments and expenditure was done before the COVID, A lot of the commitments are made. After this COVID has come with steel going through the roof, there has been massive inflation, I would say, Maybe even 30% in just the last one year, but we feel protected from a major part of it because we had our orders in before COVID. Sure. That's understood. Thanks a lot and best of luck. Thank The next question is from the line of Neeraj Mansingtha from White Pine Investment Management. Please go ahead. Hi. Just wanted to know, just a few Duncan engineering, can you give your thoughts on what do you see going ahead and How you see the investments in that form and what are the businesses and some more color on that will be in this So The line is not very clear, but basically what you're asking is how Duncan Engineering is doing and what the way forward is. Am I correct? Yes, sir. So Duncan Engineering performance continues to improve as is evidenced in raw mix numbers. The cash Position also keeps improving. In the last year, we've beefed up the team, we've gotten new people in engineering and In procurement and all these kinds of areas. And now in terms of growth for that company that will come from new products, Better products and new approvals in there are different approval things like EIL approval and all those kinds of things. And then approvals in the PSUs like BHEL and NTPC and places like that. So working towards that and then the growth should be good. Can you give more color on whether you're planning to invest more money in the firm and We are not planning on investing more money from here. That I can tell. Okay. And long term prospects of Having this business as a core business or is it ultimately sell off or high When that is decided, you will be the first to know. No, the reason I'm asking you is because sometime back you just mentioned that you're not having much Ideas of investment, you don't want to enter to unrelated space, but this is a space you are present. So that's why I was wondering. No, there is nothing on the table to invest further. Okay. Thank you very much. Thank you. The next question is from the line of Shiv Chinnani from Elara Capital. Please go ahead. Good afternoon, sir, and thanks for the opportunity. So just wanted to have your view on how do you see Oriental Carbon Evolving, let's say, over a 5 year timeframe. The reason I'm asking this question is that clearly, let's say, Once the new capacity is on, we'll be generating anywhere between INR 150 crores to INR 200 crores kind of an EBITDA number, I mean depending on cycle and Whole lot of other things, but which will sort of make itself sufficient in terms of the new expansions going forward. So how do we see Oriental Carbon? Is this a company that sort of grows Along with the underlying industry growth, which generally is a single digit kind of a number and hence consequently throws out a lot of cash. And of course, the management takes a call on how and where to deploy that cash or there are some other thoughts around it. So If you can just give me a color like how should we look at this company over a 5 year period? So right now, we are basically focused on selling out the capacity that we have that is going to come on stream. And if we look at our overall tonnage numbers that we sold in the year ended March 31, gone by, And if you look at the potential capacity that we'll have 3 years from now, there is still a huge, huge delta to cover. And covering that delta on its own is also going to give us a lot of growth. Beyond, no, we have not thought of anything else. So if you had to push me to pick 1 of the 2 options that you suggested, then the first option where The company grows with the underlying growth and throws up cash. Right. And so again, I mean, A follow-up to that is and again, which is probably an extension of what Chirag asked earlier. I mean, is the company at some point of time going to decide on its capital allocation policy And say that we are going to sort of pay out this much of as a percentage of profits To the shareholders, which can be a mix of dividend and a buyback and this is a kind of cash we are going to deploy in surplus investments, Amit? No, I think that's a fair point that Chirag has raised and now that you've followed up on. Sooner rather than later, it appears we will have to chalk out the policy and come out with it for the shareholders. Sure. Fair enough. Thanks a lot and all the best. Thank you. The next question is from the line of Apoorva Mehta from AM Investments. Please go ahead. Yes. So I just wanted to ask this new capacity, what will be the time line to ramp up this capacity? Like If it when it starts in October, can we ramp up in a month's time or 2 months' time if the demand is there? Or it will take some time to ramp up? So what Akshay Patel pointed out But once it starts in October, we hope to ramp up a substantial part of it by 2022 when The anticipated orders should flow in for the next year. So the dispatches of that should start from Some from November, December for exports or January like that. Okay. And On the customer front, when you were telling we will be ramping up and exporting more to U. S, are we Are we still in place and getting new customers from the U. S? Or what's your take on that? So yes, we are looking at new customers from U. S, but not new customers globally. Most of them would be plants of the customers where we supply elsewhere, but not in U. S. So that will be there. Okay. And a request to the management to I think about giving dividend, which is taxable, very high nowadays for our HNI kind of thing and everybody. It's better to have a buyback kind of a thing, which will be sustainable buyback where the management having only 51%, 52% kind of holding. So That can also go up or is the management participating in that same buyback and you know that the company is still credited I thought it was very reasonable or less than fair value kind of thing. So it's better to have a buyback kind of think that would be more tax friendly also. Okay. We have notated what you have said. Yes. Thanks a lot. Thank you. The next question is from the line of Rajat Sethia from IronPlanet Financial Consulting. Please go ahead. Hi, thanks for the opportunity. So my first question is what will be the blended tax rate after the new capacity comes online? So are you talking about tax rate after the new capacity? Correct. On the new revenue? The MAX rate applicable to now is 75% plus surcharge. So that is the rate which will be applicable to us. Obviously, we had some Mac, any forward. So the outflow would be on Mac basis only. So it is around 23%? Okay. All right. And the second question is about the capacity expansion. So once we are done with the ongoing brownfield effect, is there room to grow in a brownfield manner after this? I didn't get your question. No, there is no room to grow downfield after this. Okay. Okay. And let's say after a couple of years we decide to grow in a greenfield manner. So what And this cost differential will come. So today we are spending around INR 220 crores for 11,000 tonnes, a kind of CFS Connect rate I think in today's prices for greenfield, the 220 would have, I mean, Ballpark become 300 or more? 300. Vishal, at some point in time, you will have to limit that. So at those levels, at those at that cost, what do you think of the IRAS That's then So there is no payback for Greenfield today for anybody. Okay. Then how do you envisage the Our supply scenario from our side, our capacity and all after 5 years, Because if there is no payback, then are we going to grow after 5 weeks? That bridge will have to be crossed and That's today's situation is what it is. Today's situation is 47,000 tonnes brownfield expansion And greenfield expansion is not viable. Now let's see when the time comes what the market scenario is at that stage. Okay. Appreciate the details. Thank you so much. Thank you. The next follow-up question is from the line of Pratesh Cheda from Lucky Investments. Please go ahead. Just I have one follow-up. In the quarter gone by, which is the current quarter, why are our units plants operating or they were shut for some days? No, the plants were not totally shut for any day. So they were operating, albeit at a lower capacity because of the In demand, but they were operating, yes. And for us, it's not based on the demand. Sorry? Based on the demand, We took shutdowns more because demand went down, right. So we did not run the plants with the repair. So plant was unoperational for how many days in the quarter? Sorry, we took shutdown of lines. The plants were operational. Okay, understood. And For us the export should have been doing well, right? Yes, again exports did well in There is a slight decrease in the month of May June. Hopefully, it should come back in July. The decrease has been more remarkable In the domestic market. Okay. Thank you, sir. Thank you. Due to the time constraint, this was the last question for today. I would now like to hand the conference over to the management for closing comments. 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, our strategic growth advisers, our Investor Relations advisers. Thank you once again. Take care. 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 lines.