Q4 23/24

May 10, 2024

Ladies and gentlemen, good day and welcome to the Alkyl Amines Chemicals Limited Q4 FY 2024 earnings conference call hosted by Ambit Capital. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference, please signal an operator by pressing star and then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Jayesh Deshmukh from Ambit Capital. Thank you, and over to you, sir. Thank you, Darwin. Good afternoon, everyone. On behalf of Ambit Capital, I welcome you all to Alkyl Amines Q4 FY 2024 and FY 2024 earnings conference call. From the management side, we have Mr. Kirat Patel, the Executive Director, Ms. Kanchan Shinde, Chief Financial Officer, Mr. Udit Agarwal, Chief Commercial Officer, and Mr. Chintamani Thatte, General Manager, Legal and Company Secretary. Without further ado, I would now request Mr. Kirat Patel to start with his opening remarks, for which we can open the floor for question and answer. Thank you, and over to you, sir. Thank you, Jayesh. Good afternoon, everybody, and welcome to our call, and thank you for joining in to our annual review of our performance. Let me begin by giving a few opening remarks about the year that has just gone by, and then we will open the conference for questions. The year has been a little mixed for us, a bit disappointing in the sense that we were expecting it to be much better. But there are some silver linings on the cloud, that the market demand for pharma is quite stable now and growing. And we have managed to increase our sales in terms of tonnage. However, because of price drops due to competition from the Chinese and some internal, the top line, as you can see, has reduced. Fortunately, the raw material prices have also dropped and margins in the last quarter are slightly better than the previous quarter. The second half has been a little weaker than the first half, but looking forward, we feel that next year is likely to be better than what we have seen in the last year. On the CapEx side, I am happy to let you know that the ethylamine plant, which we had been constructing over the last two and a half years, has been commissioned and has been running very well, much better than our expectations. And it is now probably the largest ethylamine plant in the world. And this takes care of our need for capacity of ethylamine for foreseeable future. And with that, I think I will conclude my opening remarks and hand over the floor for questions. Please go ahead and ask whatever you may need to ask. Thank you. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to please use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Nilesh Ghuge from HDFC Securities. Please go ahead. Yeah. Good afternoon, Kirat sir. Good afternoon. Yeah. Am I audible? Yes. Right here. Yeah. Sir, my first question is on CapEx. As you mentioned that you commissioned this ethylamine plant during this fiscal. Can you just tell us how much total CapEx we incurred in FY24, and then can you give us the project-wise breakup for that? Okay. The ethylamine project, which was the largest project which we had, finally was capitalized at about INR 375 crores. It is 120 tons per day. However, since we had spent a lot of the money in the previous two years, this year our total capital expenditure is about INR 120 crores. In that INR 120 crores is also some expenditure for our routine maintenance CapEx and the solar plant to supply electricity to our Dahej facility. This year's FY24, the CapEx was about INR 120 crores. INR 120 crore, okay. But capitalization was more because the ethylamine plant was a very large plant. Yes. So capitalization, I can see that it is about close to INR 500 crores in this fiscal? Is- INR 400 crores approximately. INR 400 crore. Okay. Second thing on the utilization. Can you tell us the utilization of acetonitrile plant in this fiscal? Because in our earlier communication you mentioned that first half, the utilization was close to 60%-65%. I just want to get the sense how it was in second half of FY 2024. Okay. The second half was not as good as the first half because the Chinese pressure continued in terms of price and aggressive selling in the Indian market. We were at about half our capacity, 55%, a little better than half. We are facing competition, both domestic. Domestic is very small, but largely the Chinese. Okay. The pricing is also under pressure? It has in the last quarter stabilized. Okay. Of course, it is difficult to say whether we have hit the bottom or not. Yes I hope that is true, that this is as low as it will go. Okay. The problem with prices, we are of course fortunate because we are one of the first movers. So our productivity on acetonitrile and our cost structure is probably lower than the newer people who have come in. This would be a bit difficult price for the newer entrants. So that is why I think we do not see too much activity from our domestic competition and mostly from the Chinese. Okay. And sir, just on the ethylamine side. You recently commissioned this plant, and you mentioned that plant utilization it's sufficient, utilization is ramped up. But you did mention that there was also pressure on the ethylamine side in our last communication. So how are the prices on that side, and what was the utilization of your ethylamine plant, including new capacity? Okay. So this is a big mix because we were using the old plant till about October, November, and the new plant also overlapped with it. So the old plant was obviously, the first half was almost fully utilized. The second half, it's been largely the new plant, and that utilization is maybe at about 60% of the thing, which is of course more than the old plant could deliver, but still we have headroom in the new plant. Okay. But- As far as pricing is concerned, yes, it has improved on both the selling side as well as the raw material side, the ethyl alcohol has softened. Okay. Compared to what it was, say six months, one year ago. Okay. Thanks, sir. Yeah. Thank you. The next question is from the line of Nirav Jimudia from Anvil Research. Please go ahead. Yeah, sir. Good afternoon, and thanks for the opportunity. Sir, I have two, three questions. One is on the volume growth for FY 2024. I think in the first half we were at around 14%-15% volume growth. If you can just let us know what was the volume growth for FY 2024? Yeah. The total volume growth for the whole year is under 10%. Its second half was much, I mean, it was disappointing, largely under pressure from acetonitrile, as I said earlier to Nilesh. And also monoisopropylamine, also we are facing Chinese competition. However, we have been able to compensate that with a few of the other downstream products of methylamine. So on balance, we have a little less than 10% growth. We were disappointed in that because we were expecting it to be more than 10%, given that the first half was so strong. Correct. In absolute amount, the volumes could be closer to 1 lakh tons for FY 2024? Nearly there. It is just short of that. Correct. Sir, if you can just walk us through the demand outlook for methylamines, like at what levels of capacity we are at currently. Are we planning any expansions there also? Along with it, if you can just let us know the demand drivers for methylamines, particularly in context of the derivatives. You are talking on ethyl, right? Methyl. Methylamines. Methyl. Okay. I will just hand it over to Udit, my colleague, who is the Chief Commercial Officer, who can give you a background on methylamines. Thank you for the question. As you know that the methylamines and methylamines derivatives have different application areas, and the growth rates are different for those. For example, one of the derivative, which is largely dependent on the personal care related products. That has a different dynamic versus the other derivative, which is largely on the pharma anti-diabetic segment, and that is a different growth trajectory. So it is a different thing at both the derivative end. The base methylamines are growing at their normal historical growth rate of low single digits. I would say this primarily because these products find application in the agrochemical industry, and agrochemical industry, as we all know, is the kind of pain which it had in the recent past. Yeah. This is where we are at this moment, but I would say that the derivatives are growing a little faster than the base methylamine. Got it. Sir, here you mentioned about the pharma. Predominantly you are talking about DMA HCL. If you can let us know, how is the market size both for the base methylamines as well as the derivatives of methylamines, and how much of the methylamines we are currently using captively for our derivatives, and how much we are probably selling in the market at this point of time? We are using about 30% of our methylamines captively and about 60% is sold. Sorry, sir, if you can just repeat. I lost in between sir. Yeah. So it's 30% of our production is self-consumed in methylamine. Yeah. About 60% is sold merchant. Okay. The old ethylamine plant which we were having, so any plan of converting into methylamines, or that would be kept separately as a ethylamine plant only? No, we are having plans to convert it into methylamines. The engineering has just started, so it would take a little time to convert it. But we are preparing for two years down the line when the demand has grown to a level where we will need it. As you know, we already have Patalganga as a standby to Dahej. Patalganga, the old second plant. Yeah. The methylamines plant, and that we bring online whenever there is a demand peak, when it happens in a few months. Or some particular homologue of the methyl between mono, di, and tri is in short supply, and we have to bring it on. Correct. Sir, is it possible to share the current market size of methylamines in India, and at what level of capacities we are currently on? Market price, you said? No, market size. Market size. The market size of methylamines in India and at what level of capacities we are at currently? Well, market size would be about 70,000 tons, I think, or 70,000-75,000 tons of production because both Balaji Amines, us, and RCF all self-consume some of their production. Correct. Maybe about 70,000-75,000. We are at about almost 80%-85% capacity utilization of Dahej plant, which, as you know, is about 45,000 tons a year. Correct. The standby plant what you mentioned would have a capacity of how much whenever we would Patalganga? Yeah, Patalganga, sir. The old plant is about 15,000 tons. Got it, sir. But it is also used for ethylamine as a standby. Correct. Got it. Sir, next question is on the contribution margin. Let's say if we exclude acetonitrile, which had a good year in FY 2021 and because of which our profitability was better. Let's say if we compare FY 2021 and now FY 2024, for rest of the products, like x of acetonitrile, let's say the methyl and ethylamines chain along with the derivatives. Has the contribution margins per kg had an impact in between these years? Or they were well taken care of through the price increases or the introduction of new products in that methyl and ethyl chains because of which those margins were protected? If you just can help us understand that would be helpful. Okay, if you ignore the volatility in the acetonitrile business— Yeah and other business, between the products, there has been a little bit of up and down in the margins. The methyl chain has done well. The margins have done well. Okay. The ethyl went through a little bit of a rough time one year ago and has stabilized and improved now. We hope to get back to the old levels of margins in the ethylamine chains. Of course, MIPA has last year been a bit of a disappointment because, as you know, our anti-dumping duty expired a year ago. Yeah. They did not renew it, and the Chinese have again become active. We have had price pressures in isopropylamine, and we have lost market share there. Correct. Sir, safe to conclude that probably as compared to FY 2021, methylamine margins in per kg basis would have improved. Ethylamines is still lagging, but you are expecting FY 2025 for ethylamines also, the margins per kg should be back to the levels of FY 2021, and that should overall help us to improve our contribution margins per kg. Yes. I would say you are right, except I would correct you that the ethylamine margins have already improved. Okay. It's already in the last quarter we have seen the signs now. Correct. Sir, last question if you allow me, before I jump into- Sorry to interrupt. This is Udit Agarwal here. Just to add to that, year 2021, 2022 was also the special years of the COVID times. Yeah. Correct. If you look at the ethylamine of this product margin over the last 10 years or so, and think about the margin situation current, I think that is a better way of looking at it. Right? Correct. Go ahead with your next question. Yeah. Sir, any new products are we planning to introduce on the specialty side or on the derivative sides of methyl and ethyl? Because after acetonitrile, I think such a meaningful contributor to the top-line level products have not been introduced by us. So are we planning any newer products both on the methylamine chain as well as on the specialty side, which could meaningfully help us in growing our volumes turnover as well as the margins? Okay. We have a couple of products under engineering. In fact, one almost close to finishing the engineering, and we have to take a decision shortly. These two products are not actually derivatives or part of the current amine portfolio or anything linked with that. Of course, there is also, as I said, a CapEx due for revamping the old ethyl plant to make it into methyl. But all these will happen over the next couple of years. Decisions will be taken in the next three to six months on proceeding, because currently the market situation seems to be very volatile with the Chinese active so much that, one hesitates to put CapEx in the ground and then find that the Chinese have undercut you all over the world. Correct. So we are being a little careful on that. But we have proceeding with all the soft part of the engineering permissions, getting everything in place, so when the decision is made, we can implement quickly. Correct. Sir, lastly, any volume growth guidance which you can give for FY 2025? Well, we've always been optimistic, and we've always feel that 10%-15% growth rate has been our norm. There have been a few years, like last year, where we have dropped below that. But otherwise, 10% is I think what we expect, 10%-15%, definitely may happen. Got it. Some part of it may be because we are still to ramp up the diethyl ketone DEK. facilities. We have not been able to actually exploit that product fully. We hope that next year will be better for us, and that will contribute to some extent to the 1% or 2% of that growth rate will be just diethyl ketone from a very low base adding to volume. What was the utilization rate in FY 2024 for DEK, sir? Oh, very poor. I think it was maybe 20%-30%. Roughly 1,000 tons. Yeah, less than that, I think. Got it. Thank you so much, sir. Wish you all the best, and enjoy the weekend with you. Thank you. Thank you. The next question is from the line of Jaiveer Shekhawat from Ambit Capital. Please go ahead. Sure. Thanks for taking my question. First question is on the anti-dumping duty investigation that has been going on acetonitrile. Based on the evidence that you have provided to the department, one, what has been the extent of dumping or the injury that has been suffered by you because of the dumping? And second, if the order is passed favorably, what kind of volume or margin benefit do you expect? Hello, Santanu here. We have filed anti-dumping in December and in March 2024, the investigation has been initiated. Hearings are going on right now, and we are planning for filing interim relief also in that. But it will take time. Maybe in Q4 of 2024-2025, we expect that to come if it is favorably on our side. Extent of margin injury. Injury. Injury is in the range of 15%-20%. Sure. If I were to compare your FY 2024 revenues with pre-COVID, say FY 2020 revenues, the revenues have increased by roughly 50%, whereas your EBITDA is largely flat. One, if you could help us understand this 50% growth in revenues, how do you break that into volume growth and realization growth? Secondly, if your realization were to remain wherever they are as of now, when do you think you can reach back to the 25% EBITDA margin level that you had also guided earlier in the calls? Okay. Last year, our average selling price dropped by almost 20%. Though there was a volume increase, our top line dropped by about 14%, and the average pricing dropped by about 20%. Given that, the margins obviously have come down per kg. Looking forward to it, I don't think that margins will ever go back to the 2021 levels, because those were exceptional years. Our average before that, so we expect that the next year we will get back to the average margins and will make up to the level which we were the year before by sheer volume increase. We are growing in terms of volume, and that is adding to the bottom line. Sure. Because, sir, if I see pre-COVID, I think prior to FY 2020, possibly you are doing 18%-19% EBITDA margins, which possibly you might be in a position to do in a couple of quarters. Was FY 2020 also impacted because of COVID by any chance, because we still had a March lockdown that happened? Or was it still a normal level of margin that you would expect going forward? FY20? Yeah. That was around 25%-26% EBITDA margin. Do you see that as a normal level of margin, or was there aberration in that? That is on the higher side, 25%. Sure. The 20%-22% is what has been our norm. Sure. 18 has been low. We have even gone down as much as 14 at one point, I think. I would say that 20% EBITDA margin is what we hope to achieve between 20% and 22%. Sure. Sir, next question is in terms of realizations. Analyzing your data as well as that of your competitor, we find that after many quarters of sequential decline in realization, we have seen some increase on a sequential or a quarter-to-quarter basis. One, what has led to that? Secondly, would you call that as an aberration or do you believe that realization can increase from here on? I hope it is not an aberration. The main reason why the slide in the top line has dropped is because the prices are stabilizing. Volumes have been growing little by little. Because the prices have stabilized with Q3 and Q4 numbers are looking on the top line a little better than Q3. I hope going forward, this trend continues. I think we have seen the bottom of the prices, and on both on the finished goods and on the raw material side. Maybe raw material side, still there is a little bit of softening could happen in, say, acetic acid or ethyl alcohol. I think we are near the bottom. I think these margins are what you could predict could happen next year. Sir, what gives you the insight or the foresight to possibly comment that it could be the bottom? Secondly, has there been a change in the industry dynamics over the last couple of months or quarters which has led to this improvement in realization? What has really led to the improvement? Well, I think the improvement is only that it has not improved, it has stabilized. That means if the price was, say, INR 150 and it had dropped from INR 200 to INR 150, it stopped dropping and remained at INR 150, while volumes kept creeping up. So it is stuck at about that. Levels of prices have remained stable for some time. So that gives us hope that perhaps we have reached a stable point equivalent in the industry based on what the Chinese are doing, because the Chinese were the ones who upset the whole apple cart. They seem to be now at this price over the last few months. Sure. If they, of course, back out, then prices will go up. But if they again become more aggressive, then it is a separate story. Sure. It is a little worry that the yuan is weakening. Mm-hmm. Sir, last question to Kanchan, possibly. Kanchan, if you could explain the quarter-on-quarter increase in your other expenses. Quarter-on-quarter increase. Yeah. Quarter. There is roughly about a 15 odd crores increase that has happened in other expenses. If you could just call off that. Yeah. Nothing much. Mainly CSR expenses, which we could not spend, we had to make provision for that. There was one asset at Patalganga which was not being used, so we had to impair that. Since there is increase in production, the power and fuel expenses have increased. Nothing exceptional other than this. Perfect. Sure. Thank you so much, and all the best. Thank you. The next question is from the line of Rajiv Rupani, an individual investor. Please go ahead. Yeah. Thank you for the opportunity. Sir, I had a question on methylamines. Sir, our competitor has a 48,000-tonne plant, and they are commissioning a new 40,000 tonnes plant in December 2024. Right now, we have sold at 60% of our methylamines we sold in the market. What would be the impact on the prices of methylamines and our production? Okay. I think we have been expecting expansion on Balaji's methylamine capacity. He has actually two plants, 30,000 and 15,000. That is how he is at 48,000. Now he is putting up one plant, which is 40,000. Obviously he will shut down one of the older plants, which is probably less efficient. There is a tightness for him and some other of one of the homologues, which is dimethylamine. Most of dimethylamine as far as Balaji concern goes into DMF, which is his own product, and DMA HCL. I assume that he is expecting the DMF market, which has unfortunately been very low, to improve and therefore he will need more DMA. That is the kind of analysis that we have come to, that he is putting up new capacity in methylamine to support an increase in the DMF situation. Because between RCF, us and him, there is enough capacity currently to supply the market. Barring few odd instances, there has not been any shortage of methylamines in the country. Okay. I know- Also is a question that you plan something two, three years ago, looking at some growth. When they come online, sometimes you are off by a year or so. Perhaps it may be one year too early for him, maybe that just happens. So you are saying that there would be no impact on the prices of methylamines and our- No, there will be. There will be an impact because obviously he would like to use his plants fully, at least two of them, if not the three, and that could create some pressure on the methylamines merchant market. Okay. And sir, I have a follow-up question. Do we have any intention of setting a DMF plant in the future? We are always looking. We have the technology, but we do not find it, at the current pricing, very exciting. That is the reason I think why for the last year or two, both RCF and Balaji Amines have been struggling with their DMF capacity. Okay. My next question- From both the Chinese and the Saudis. Okay, sir. My next question was on ethylamine. In the con call, you have said that prices have improved for ethylamine, and we are operating at 60% capacity utilization in the second half. What is the outlook going forward? What are the prices of ethylamine per kg, if you could let us know? What could be the average price for 150, 160? Yeah, about INR 150 to INR 160, depending on mono, di, tri. Going forward, I think ethyl is a very steady growth market. It grows by 5%-7% every year. Our plant is now planned for the next five to 10 year kind of view. So that we don't have to put up a new capacity for ethylamine again. Okay. Our competitor also has about 2,200 tons. Are we exporting some ethylamines, or what is the domestic total demand for ethylamines? Both of us are exporting small quantities of ethylamines and their derivatives. But largely it's domestic. Most of the ethylamine is largely domestic. Both of us are, as I said, we are at 60%. We estimate that his capacity utilization is also in that region, 50%-60%. But of course, being a slightly smaller plant, capacity utilization may be higher. But we have a larger market share. Okay. Thanks for the update. My next question was on ACN. Sir, we have been facing this pressure from the Chinese people since last six, seven months, and we have filed for the anti-dumping duty. When do you think this Chinese competition tapers off? What if the anti-dumping duty does not come in our favor? No. Look, when will the Chinese taper off? Nobody can say. I do not think anybody has a view on that. It is not just acetonitrile, it is across the board. They have too much capacity in most of their chemical industry. In fact, we recently saw an announcement by one of their companies for a huge methylamines plant. Considering they already had a methylamines plant, that company which was operating at 60%. I have not understood their logic, and that company is making losses. It is a very strange picture. It is very difficult to predict when they will taper off. But we have noticed if you go historically, at some point in time, maybe they last for a year and a half, and then they kind of ease off. We have to survive and hold our heads above the water till then. We are still making money in acetonitrile, not as much as we would like to or we were making. But we are more than breaking even. If the situation does not worsen, we will continue to attempt to grow our market share because the Indian market is growing. That is the good news. We will continue to hold on to our market share and grow with it. Yes, if we get the anti-dumping duty, which may take, I do not know, about a year maybe from now, unless of course, we get some interim kind of a relief, then the chances of our market share improving is much more. Okay. What is the current prices of ACN currently? Acetonitrile? Yes, sir. About 150 or so. Okay. My- Other people 145, for the smaller people 160, that kind. Okay. What would be our capacity utilization this year? About 55%. 55%-60%. Thank you. My- I am talking about FY 2023/2024. Going ahead, what would be the capacity? Going ahead, we are hoping to improve it to 60%-65%. Because market is growing, I am assuming the same market share between Chinese and us, because anti-dumping duty, even if it comes, is not going to impact the next year unless we are very lucky. Got it. Thanks for the update. My next question was on the raw material side. What is the current prices of ammonia, acetic acid, and methanol? Could you please guide us? Hi, this is Udit Agarwal. Ammonia has been, as you know, primarily driven by the fertilizer industry and what happens there. Currently, ammonia is about, depending on the location, in the range of INR 50 to INR 52 per kg. Acetic acid has been fluctuating up and down. Yeah. It is a little shy of 40 at this moment. What about methanol? Methanol or ethanol? Methanol. Methanol. Methanol is sub 30 these days. Just below 30. Thanks. My last question, sir, last con call you had talked about two derivatives of DEK. Could you please give an update on that? No, derivative of DEK. No, DEK is a final product. DEK is the final product. We do not- You had talked about two derivatives in last con calls. DEK, we may have talked about. We may have talked of DEK, which is a new product. Okay. There is no derivative of DEK. We do not derivatize DEK. That's our customers. Okay. Thank you. That's from my side. Okay. Thank you. Thank you. Thank you. The next question is from the line of Aman Chaudhary from Motilal Oswal. Please go ahead. Hi, sir. Hello, Aman. Hi. There were a couple of reports that there was downturn in the methylamine market in April, or at least the first half of April, with inventory destocking also continuing, along with decline in downstream demand as well. Can you throw some color on the same? Sorry. Come again, the downturn in? Downturn in the methylamine market in April, or at least the first half of April. I don't think we saw anything unusual in the methylamine market. Okay, sure. If you could give the exports to domestic sales mix for the quarter and FY 2024 as well. As a percentage? As a percentage. 22%. FY 2023/2024 is 22%. Relatively- For FY 2024. It's 80/20. More or less 80% is our domestic and about 20% is export. I think this is what Kanchan has been saying. This is where we are. Sure. Thanks. My next question would be regarding an FID that in our last conversation, Kirit sir, you had alluded to, that would be requiring a CapEx of around INR 80 crores-INR 90 crores. Any update on that? Yeah. This year we spent about INR 120 crores on CapEx. Next year, we are looking to spend about INR 60 crores to INR 80 crores. A large amount of it is maintenance CapEx and some debottlenecking in our current products. As I said, we have two new products in mind, and those decisions have not been finally taken about going ahead. If they do, then these CapExes will be additional, and they are in the region of between INR 75 crores to INR 200 crores, but it will be spread over two years. Hello. Sure. In the very beginning of the con call, you had alluded to the market demand for pharma being stable now. Can you throw some color on the agrochemical side? Agrochemical has been a little bit mixed depending on which kind of market do you look at. The kind of situation with the agro industry had been in the last two years or so, that destocking had been going across the supply chain in the agrochemical. In fact, is still on, although we have some indicators from the market that on a very selective basis, this might be kind of coming to an end. Yeah. We could see some upside from here. However, having said that, there is also a large increased Chinese competition, not only for our direct product, but also for our customer's product. The Chinese are also kind of selling at very, very low prices, the agrochemical molecules, not only here in India but also internationally, where our customers are also exporting. On the agrochemical side, yes, it's a mixed situation, while on the demand side, we seem to be seeing things getting a little better, but not still there where it should be. But the destocking effect seems to be coming to an end. At the same time, competition from Chinese are also increasing. So we'll have to see. Today, if you look at the entire chemical industry, upstream, downstream, it's really largely what is happening in China. The rest of the world is also affected because of that, because Of the total chemical production, more than half of it is in China. 55%-60% of the chemical industry, global chemical production is in China. Sure. Last question from my side, even if we get an interim relief with regards to acetonitrile or say the final anti-dumping duty is also levied, would this encourage a private player to enter the market, which had announced 10,000-15,000 tons per annum capacity around two years back? Yeah, I think there are a couple of people who are already in the market. In fact, our competitors are already there in the market, but they are at low production levels because at these prices they are probably not profitable. Correct. There is always the chance that if the anti-dumping duty comes in and the prices go up, they will also try and grab some market share. We are just hopeful that because of our larger volumes and our efficiencies and our production cost advantage, we will be able to retain market share and increase it. Sure. Just small clarification last from my side. Any update on the additional Dahej land that we have been looking for? No, we haven't got any further progress on that. Given that we have enough land in both in Kurkumbh and Dahej for the new products which we are planning, there is no urgency. We have applied for it, but we haven't heard back. We are not in a big hurry. There's no urgency in the matter. Sometime in the next year or two, we will probably take action and move on that situation when these two projects are under implementation. Sure. Thanks. Thank you so much. Okay. Thank you. The next question is from the line of Nirav Jimudia from Anvil Research. Please go ahead. Yes, sir. Thanks for the opportunity again. Sir, you mentioned about the improvement in the margins of ethylamines, which has already started happening on. From when it started improving for us? Was Q4 numbers captured some portion of those margins or the entire increase in the margins for ethylamines was captured in Q4 number one, and along with it, let's say on a scale of 100, the margins for ethylamine in terms of contribution per kg, how much it would have improved on for us? Well, there's no exact point in which the market turned around. But yes, towards the last three, four months, we have been seeing that the margins have improved, the ethyl alcohol has stabilized or in fact, actually gone down from the peaks it was. The selling prices have also improved marginally. I hope this keeps up. We cannot predict how the market will go tomorrow. We can see that we have the alcohol all the way up to half the year, September to October. We can see the visibility on the alcohol pricing, which seems to be very positive. As far as the selling prices are concerned, yes, this quarter looks good, but one cannot predict the next quarter and the quarters after that. No, sir. What I was trying to understand from you is, the margins on a per kg basis started improving from last three, four months. Let's say if it were INR 100 a kg margin, how much it would have improved on? Oh, I see. Well, margins would have improved by about 20% on the It's very difficult to say. I mean, it's a- A rough idea would also help. I am not asking for any exact numbers, but just to get some qualitative understanding about the improvement in the ethylamine margins, which started happening over last three, four months and which is currently sustaining. Yeah. Ethylamine margins, it is difficult to say, Nirav, how much it has improved because it has been up and down. Got it. Was it a temporary bottom? This is a very difficult question to answer off the cuff. Got it. We'll have to look at it and say that this is the range in which it was earlier, and now it is this range. Okay. Yeah. I'll have to come back to you on this. It's not possible to answer at the moment. No worries. Sir, on the cost side, you mentioned last time that we were in the process of putting up the solar plant. I think one of was getting commissioned in November, December of 2023. Any update on the same and- Yeah, the solar plant in Dahej got commissioned in January, and we have already started receiving the electricity from that plant. Okay. Totally now in the company, we have about 8 megawatt or so, 8.5 megawatt capacity between Kurkumbh, Patalganga and Dahej. Okay. Out of our total requirement of power, how much this would help us to use from this captive? Okay. So there are three sources for power for us. One is, of course, solar. Then there is a turbine which we use, back pressure turbines for our steam generation, and MSEB or GEB, Gujarat Electricity Board. So I think on an average, about 50% of the electricity which we use is from the grid, from the electricity boards. Okay. About 20%-25% is from the turbines and about 20%-25% is from the solar panel. Okay. And the turbine would predominantly be using the coal? Yeah. The steam is from coal. All three sites is from coal. Sir, any possibility of giving us quantitative numbers in terms of the saving in the power cost which could accrue to us because of commissioning of this 8.5 megawatt of solar power plant? No, 8.5 is the total amount which we have. Okay. What got commissioned just now in the last year, in January, was, I think. 3.5 3.5. Okay. Any numbers which you can help us out in terms of savings which have started accruing to us because of this 20% captive use through solar, which otherwise probably would have been buying through grid or through generation through turbines. Of all? All. Yeah. My estimate would be this 8 megawatt would be giving you about 3 to 4 crores of savings in lieu of if you were buying from the grid, right? Okay. These are the incremental savings. We are buying and generating our own, maybe about 3 to 4 crore savings every year. Okay. Sir, last year our absolute power cost was like INR 215-216 crores, combining everything put together. That would have included fuel. Yeah, fuel. What was the similar number for FY24? We'll have to just look it up, but it is lower because coal prices have dropped. Come down, yeah. Correct. It would have been considerably lower because the coal prices have dropped. Sir, last question would be in terms of the breakup of sales. If you can just help us know the breakup of INR 1,440 crores of sales, what we have reported between amines, amine derivatives, and the specialty chemicals for FY 2024. I think the percentage change has not been very significant. It's still, I think in the region of 40%-50% is main amines. About 25% is derivatives and about 20%-25% is specialties, which is the main one being acetonitrile. Got it. Thank you so much, sir, and wish you all the best. Thank you. Thank you. As a reminder, ladies and gentlemen, you may press star and one to ask a question. We have the next question from the line of Dhruv from HDFC Asset Management. Please go ahead. Yes, sir. Thank you so much. Sir, firstly, a clarification. You mentioned that methylamine demand is about 70,000 tons domestically. So this would be just the base or say, for example, even the downstreams of say, DMF and everything, all inclusive demand is 70,000? No, all inclusive. The DMF is a question mark because DMF, if all the DMF demand in the country was to be made within the country of what we are importing, then yes, another 10,000 tons could be added to the methylamines demand. But obviously this has to compete with import, so it is not going to happen. When we say these demand numbers, these are based on production of base methylamines. Basically, production of base methylamines. What goes into downstream is separate, that is not included in these demand numbers. Probably those downstreams could be imported from outside, but that is not included. I'm including what, say, RCF, Balaji Amines, and us would be producing. My estimate of what we would be producing, they would be producing every year. Got it. Or this year. It goes up by 5%-7% every year. Sir, any kind of assessment if all, of course, this is hypothetical, but if all the downstreams were also to be made in India, which is probably currently imported, what would be the base demand for methylamines be? Sorry, what could be the? I mean, base demand for methylamines. Say, for example, currently it is about 70,000. Say, for example, DMF is currently, I am not sure how much is imported. If that was also to be manufactured in India and that would use base methylamines. So how much would that? I think you can expect another 10,000 tons. So additional. All inclusive. Okay, got it. Sure, sir. Sir, the second question is. In fact, both NMP and DMF and all, if you add up, it could be 80,000 tons to maybe 90,000 tons. Okay. There is a potential in India is competition, but obviously competition doesn't go away. True. Reality. 80,000 to 90,000 tons could be a kind of market size you would say, potential market size. Got it. Sir, the second question is, on a per kg basis for methyl and ethylamines, let's take before 2020, what the spreads would be on an average per kg contribution or EBITDA, and what were they in the current year? On a benchmark basis, I'm not asking for an absolute number, but how different would they be? Between- Current year, FY 2024. last year and now. Yeah. Pre-COVID or pre-2020, when there was some abnormality post that. Let's take pre-2020 and the current year on a per kg basis, methyl and ethyl. I'd have to come back to you on that because I'd have to look at the numbers of pre-COVID per kg. My gut feel would be that we would be slightly better off than that just now. I couldn't say for. Obviously, we are not as well off as the COVID years per kg, but pre-COVID to now, we'll have to just check. Which is, you're talking about 2019, 2020. Yes. Let's take three, four years. Yeah. Average of three, four years before 2020 just to get a sense. Sure. Good. We'll have to look it up and it's a Sure good way to look at our long-term pricing. And sir lastly, you mentioned one plant in China is still adding capacity. Is it possible to name that plant? Which plant is this? No, I think you can Google it. I will search. I think it is there in the- Perfect. No worries, sir. This is very helpful. Thank you so much. Thanks for your time. Okay. Thank you. Participants, to ask a question, you may press star and one. Ladies and gentlemen, if you wish to ask a question, you may press star and one at this time. We have the next question from the line of Pradeep Rawat from Yoga Capital. Please go ahead. Yes, sir. Thank you for the opportunity. I have one question. What is the market size of acetonitrile and how much is imported? Market size would be in the range of 30,000-35,000 tons. I would say about 40% of that estimated is imported last year. Okay. Thank you. That's also helpful. 50%-55% was imported. Okay. Thank you and all the best. Thank you. Thank you. As there are no further questions, I would now like to hand the conference over to Mr. Kirat Patel, Executive Director, for closing comments. Over to you, sir. Thank you everybody for listening in and spending this hour with us. I hope we have been able to answer most of your queries and look forward to your continued support in the future. As a few closing comments, I think we are looking forward to the next year with some degree of cautious optimism because I think the next year is likely to be better based on what we see happening in the last quarter. The good part is that our customers are growing, and the opportunity in India is large. So over a longish period, we will be here to stay, and the company will grow from strength to strength. Thank you very much for listening in, and thank you Ambit for hosting this conference. Thank you. On behalf of Ambit Capital, that concludes this conference. Thank you all for joining us. You may now disconnect your lines. Thank you.