Q1 22/23

Sep 8, 2023

Summary

Q1 FY24 revenue, EBITDA and PAT fell sharply amid global demand weakness and Chinese oversupply. Management maintained a 20%–22% EBITDA margin outlook and targets INR 4,000 crore revenue by FY26–FY27 as markets recover and capacity expands.

Ladies and gentlemen, good day, and welcome to the Balaji Amines Limited Q1 FY 2024 earnings conference call hosted by Nuvama Wealth and Investment Limited. 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 the 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. Ranvir Singh from Nuvama Wealth and Investment Limited. Thank you, and over to you, sir. Thank you, and a very good afternoon and warm welcome to everyone. We have with us Mr. Ram Reddy, the managing director of Balaji Amines. Before handing it over to the management regarding today's call, I would like to read the safe harbor statement. This conference call contains forward-looking statements about the company, which are based on the belief, opinion, and expectation as of today. Actual results may differ materially. These statements are not the guarantee of future performance and invoke risks and uncertainties that is difficult to predict. A detailed safe harbor statement is given on page 2 of the company's investor presentation, which has been uploaded on the stock exchange and the company's website. I will now hand over the conference to Mr. Ram Reddy. Over to you, sir. Thank you, Mr. Ranvir. A very good evening and extend a warm welcome on behalf of Balaji Amines Limited to all of the shareholders who have joined us for this conf call to discuss the financial performance of the Q1 FY 2024 and performance of the company. We appreciate your time and interest in our company's performance. Before we dive into the financial results, I would like to address the significant factor affecting the timely submission of our financial results for the quarter ended June 30, 2023. The delay is primarily due to our subsidiary, Balaji Specialty Chemicals Limited, proposing to undertake its initial public offering of equity shares, which has been subsequently withdrawn. The management team of Balaji Specialty Chemicals has been fully engaged in this process, which has temporarily hampered their availability to complete the preparation of financial results required for the consolidation of our company's financial statements for the said period. We apologize for any inconvenience this may have caused. Moving on to the financial performance of Q1 FY 2024, I hope everyone had an opportunity to go through the financial results and investor presentation, which have been uploaded on stock exchange and on our company's website. During the first quarter of the year, our company encountered an unparalleled array of hurdles with the specialty chemical industry. These challenges were predominantly a consequence of the swift contraction in global demand. This has been further exacerbated by an oversupply situation in China, stemming from sluggish domestic demand and slowdown in several developed markets due to stock piling. These factors have impacted the offtake and sustenance of realization, especially in the specialty chemicals market. However, we firmly believe that this is a temporary setback and our long-term prospectus remain robust. Our performance Q1 aligns with the industry's subdued trends. We are dedicated to maintaining a customer-centric approach, consistently delivering value. This commitment underscores our dedication to serving our customers' needs effectively. Our medium to long-term plans are progressing as intended. Our new projects are on track, and we are diligently working towards their successful completion without incurring any debt. Our strategic focus remains on identifying unique product opportunities, enhancing our product offerings, and contributing to India's self-sufficiency objectives through the development of world-class manufacturing facilities. Our continued leadership in amines and their derivatives within India has been cornerstone of our success. Additionally, our comprehensive portfolio of specialty chemicals sets us apart from competitors and reinforces our position as a reliable and innovative industry player. In summary, while the challenges of the first quarter were notable, we remain optimistic about our long-term prospectus. Our commitment to customer satisfaction, strategic initiatives, and our strong market position in key areas will continue to drive our success as we navigate through these challenging times. Now let me take you through the consolidated financials and operational performance. Revenue from operations for Q1 FY 2024 stood at INR 469.32 crore as compared to INR 674.86 crore in Q1 FY 2023. Total volume stood at 26,820 metric tons for Q1 FY 2024 as against 27,358 metric tons in Q1 FY 2023. EBITDA for Q1 FY 2024 was INR 103.69 crore as compared to INR 219.48 crore in Q1 FY 2023. EBITDA margin for Q1 FY 2024 stood at 22.09% as against 32.52% in Q1 FY 2023. PAT for Q1 FY 2024 was INR 67.68 crore as compared to INR 148.04 crore in Q1 FY 2023. Diluted EPS for Q1 FY 2024 stood at 16.28 per equity share as against 37.95 in Q1 FY 2023. For Q1 FY 2024, amines volume stood at 6,757 metric tons, amines derivatives volume stood at 8,288 metric tons, and specialty chemicals volume stood at 11,775 metric tons. On a standalone basis, we are a zero debt company. Looking ahead, we have strategic CapEx plans in place to fuel our future growth journey. We have initiated the CapEx for setting up the following plants, which will significantly contribute to our expansion. Number one, the n-butylamine plant, which will have a capacity of 15,000 tons per annum, is progressing well, with anticipated commissioning the plant around December 2023. The methylamine plant, with a capacity of 40,000 tons, has initiated project implementation work. We expect this project to be commissioned around June 2024. In addition to these ongoing projects, we also have some exciting new projects in our pipeline. This includes the establishment of dimethyl ether with a capacity of 100,000 tons per annum, a new age gas, which has application in various fields, such as replacement of LPG for fuel and aerosol usage, demand of which is being met by imported LPG currently. The company is working on various other applications and usage for replacing LPG. The project is likely to be commissioned by the end of financial year 2025, and DMAHCL plant with a capacity of 7,500 tons is likely to be commissioned by the end of H2 FY 2024. These projects demonstrate our commitment to expanding our product portfolio and catering to the evolving needs of the customers. Our Unit 4, Phase II and III projects are shaping up as a world-class facility set to begin phased production from second half of FY 2024 onwards. We are confident about stronger long-term opportunities. We anticipate FY 2025 to be marked by growth and opportunities as market conditions improve. The promising future is driven by India's potential on the global stage. We are well-positioned to be a game changer and a performance leader as market dynamics shift. Our inherent strengths and competencies continue to guide us in navigating market complexities, propelling us towards greater excellence as a leader in amines and specialty chemicals. Now we can open the floor for question and answers. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Rajiv Rupani, an individual investor. Please go ahead. Yeah. Good evening, Mr. Reddy. Good evening. Sir, when I had visited you for the factory plant visit on 30th June, at that time you had informed us that the methylamines new plant will be commissioned by March 2024. The DME new plant will be commissioned by July 2024 and the n-butylamine will be commissioned in 2, 3 months, by September. In the presentation and the press release, there is an extension of dates. I mean, is there a delay and why, sir? There is a 1 or 2 months delay because of some of the equipments and some of the labor shortage. Now we have taken the stock of the situation and given the exact likely dates, like before December, I think we will be commissioning the butylamines. Maybe 1 or 2 months is delayed what we said. Same way, methylamines will commence by June 2024. The DME will take further time, that is by end of the financial year. All are under construction. The both are under construction. One is under commissioning level, it is the final stages. Okay, sir. But DME is taking much more longer time, like more than 4 or 5 months time period. Rajiv, one by one, we have to do it. One plant is commissioning now. There are some regulatory issues. Some of the storages, we need the government approvals for filling the material in storage like ammonia, like methylamine gas. Even for the DME also, we have to take methanol permission. All those permissions now within the control. Basing on those dates, we have given these new dates. Okay, sir. One more thing. Last time, in this Unit 4, we were supposed to do expansion of DMF and ACN, which was put on hold. Any update on that, and have the prices of these products improved in the last 2, 3 months? DMF, I will tell you what is happening. DMF, sometimes we are getting shortage of DMA. That is the reason we have taken DMA first. For the DMF, we want to still give some time for the market to absorb. The new latest development, we started exporting this product. We want to settle down full capacity of the present capacity, then we will take. We have not scrapped that plan. It is still there, but it has taken the back bench. As regards your acetonitrile, because of the market condition, prices have gone to below raw material cost. Even today also, it is in the same situation. That is the reason we stopped the manufacturing for the last one and a half quarter, we are not producing. We have some stocks. We are just salvaging those stocks. The moment it improves, because these products which are looking the brighter market, we have taken into the front bench. The moment we finish this, then probably we may take that. In addition to these, we have many other projects in the pipeline, which we are going to declare in the subsequent time. Okay. My next question was on the EBITDA margins and top line. Sir, you had guided us earlier that once all this expansion is complete in 2, 3 years, our top line will be about INR 4,000 crores. Are you sticking to that? Once all these expansions are complete in, let us say, 2, 3 years, what will be our consolidated EBITDA margins? See, as I said, it depends upon the raw material finished goods product prices. Both the prices have come down. That's the reason it's difficult to say. I said that as on the date, the prices, if you take the reference of those prices, yes, I'm still sticking to the INR 4,000 crores in the coming years. EBITDA, as I said, it will be between 20%-22% on the consolidated basis. Okay. My next question on Balaji Speciality. Since we have withdrawn the IPO, could you give us more information about, one, is the debottlenecking complete? Number one. Number two, I believe we have the 100 acres for expansion. So what are the products planned in that 100 acres? You had also talked about 2, 3 years, we'll double EDA production. So an update on that, and what's the EDA price right now? See, debottlenecking, we are taking probably next week, we are going to take the equipment. One equipment has to come. Almost 90% of the equipment has reached to the plant. Only 10%, which we are expecting in one week. Once that comes, we are going to take the shutdown for 2, 3 weeks for finishing this debottlenecking activity where we are installing one or two additional columns whereby we get to increase the capacity as well as the purity also will improve. That is number one. Number two, I said that two opportunities, either the new products or doubling the capacity. See, until unless this goes to the 100% capacity, market gives the full support in the price point of view. We are not going to double the capacity. However, the new products, like as I said, the land allotment, actually, we are going to receive today. Finally, we received the provisional letter where we have paid 25% EMD, and we are expecting the final letter today as the minutes have been completed 2 days back only. Once that comes, probably within 7 to 8 days, we are going to submit the details to the environmental clearance for which the products like I will tell you few products, hydrogen cyanide, sodium cyanide, EDTA-2Na, sodium cyanide, dimethyl malonate, diethyl malonate, methyl cyanoacetate, triethyl orthoformate, trimethyl orthoformate. These are the products. Actually, maybe one or two products somebody must be doing, or maybe all the products will be first time in the country. Some of the products actually listed in the PLI scheme by the Government of India. So you will hear in coming quarters about the development of this. Or probably when you come after 2 quarters, you will see actual plants building at site. Okay. This all will be through internal accruals at Balaji Speciality? Majority internal accruals. Maybe we will be required some INR 100 crores-INR 200 crores if the projects are not delayed. If they are delayed, then we will be doing this from the internal source. If they are doing faster installations, probably we may have to temporarily, some banks, maybe INR 100 crores-INR 120 crores from the loans from the bank. Maybe we may take help of the parent company. Thank you. I will get back immediately. Thank you. Thank you. We have the next question from the line of Kishan Gupta from CD Equisearch Private Limited. Please go ahead. Chandrakant here, sir. Yeah. Sir, how has specialization in amines helped the company move through in these tough times, can you just say? Like if there's any specialization regarding that. See, since we are there in the amines market more than 25 years, definitely our cost prices is lower than anybody else. I can say probably in the world also, I can say. What we have seen, we are in a position to export to the various parts of the world. Unlike earlier days, today we are exporting even methylamines also to different parts of the world. In some of the places, samples approved. Earlier we were not having the, what you call, REACH registration for the methylamines. Now we have taken the REACH registration for the methylamines and started exporting also. So because of our expertise, for the past 15, 20 years, our conversion efficiencies are lower. That's the reason today we are in a position to stand in front of this tough competition. Okay, sir. Yeah, sir. Despite talks of global demand contraction, how come the company has more or less maintained the volumes this quarter? See, volumes, I can say because of the basket, we have the various products. Mr. Gupta, if you see that we are going on adding the new capacities. In spite of the new capacities, we are not in a position to increase the volumes. Suppose if everything goes well, then you will see that increased capacity will reflect on the total volumes. That you will see in the coming quarters. As I said in my initial comments, we have not taken the current situation is a permanent thing. We have not stopped our expansions. All the expansions, maybe one or two months here and there, are progressing as we had decided earlier. Because we believe that this is a temporary period, maybe one quarter, one and a half quarter. Maybe after one or two quarters, we will see the demand of all these products. When you come back to the original state, then we will definitely get the advantage of all these capacities created as of now. Okay, sir. Sir, have the company tried to benefit in any way from the sharp fall in raw material prices? It is not like that. Because of last one and a half, one, two quarters back, the inventory has given very bad taste to all the industry, including our company. That is the reason we are going very optimistic inventories. That is the reason we will not get neither the benefit nor the loss for the inventories. Right. It is very short. We will be having only 15, 20 days raw materials, unlike earlier days. But definitely, going forward, the prices have started increasing now. With this last two weeks, we are seeing the methanol prices have gone up and the methylamines prices are likely to get the improvement, domestic and as well as outside the country also. Okay, sir. Thank you so much, sir. You are welcome. Thank you. The next question is from the line of Rohit Sinha from Sunidhi Securities. Please go ahead. Yeah. Thank you for taking my question, sir. First question on our acetonitrile plant, as you said that costing is a little bit on the higher side right now, so we have stopped production. Just wanted to understand whether the demand still is there or demand has also taken a hit because of different factors. When we are seeing any kind of improvement in terms of starting this plant. Thank you. See, demand is still there. Because of the import outside country, the acetonitrile by-product is acetonitrile from the outside country still coming into the country. That's the reason today we are not in a position. I think somebody has gone for the anti-dumping also. Filed the case of the anti-dumping. If that comes, then probably we may think of restarting. As I said earlier, we have a plan of alternate technology, but we are still waiting whether that alternate technology also will give us the sustainability in front of these lower prices from outside country. We are also waiting how long the people from the outside country will make the losses and dump in the country. That is also another big question. The moment the situation improves, the plant is there, and we can start immediately. Okay. Secondly, as we largely focus on most of the, I would say, self-sufficient products. Our export earlier was not that significant. But looking at the current scenario in the market wherein Europe, most of the chemical companies are looking to shut down or maybe reduce their production levels. How we are seeing the kind of opportunity building up for us in the export market, and do we have that kind of plan for expanding sizes in our existing portfolio or producing any new product there, especially for the export market? Definitely. Definitely we are trying to encash the China Plus opportunities. As I said for the earlier question, the products which we have never exported, we have taken the REACH registration, we started exporting. Like DMF, we used to shout every time in the domestic market itself. Now we started exporting the DMF outside country where there is an opportunity. Where the people stopped buying from the China in some of the developed countries like U.S.A. We just started looking those markets and all other products which we have not taken the REACH earlier, now we have taken the REACH registration. Probably in coming two quarters, we will see the increments in the exports when you compare to the earlier quarters. In addition to the new products. Okay. So roughly, what is the export domestic mix right now for us and where we would be targeting maybe down the line in one or two years? There, see, 85, 15 if you see the standalone basis. And in the base earlier year we have done consolidated basis even 25, 70 also we have done because we cannot take that. That particular year was different when you compare to the normal market situation. But going forward, our target is to take minimum 20, 22% of the exports and balance 78% to 80% should be the domestic. The reason why I'm telling the 20%, in our type of industry, if I do more than 15% to 18% exports then I will get the natural hedge for the imports if any we import any of the raw material. So that's the reason we are targeting that minimum we should do it, 20%, 22%. And we will achieve in coming two, three quarters. Okay. One last question. Looking at our revenue profile from last five, six quarters and I think from peak of March 2022 our top line has come down consistently. Obviously the prices have corrected significantly in the recent times. Now as we are talking about the bottoming out of chemical prices, are we looking at, as a company also we are looking at the same situation that this situation looks to be on the bottom side and no further downside maybe looking and maybe from there onward we should be sitting on a positive side only. Mr. Rohit, we do not see because 2021, 2022, the year was a special year where some of the products which are sold at INR 170 which were sold in those period at INR 500. That was a special period, we cannot compare that. But yes, definitely the current situation has bottomed up. I do not think the prices will go further down. We see from here onwards there should be some improvement and maybe in coming one or two quarters prices should be stable at normal level from this bottoms. Okay. So margin profile should also I think Yeah. Rohit, could you please rejoin the question. Okay. for follow-up question. Thank you. We have the next question from the line of Aman Madrecha from Augmenta Asset Managers. Please go ahead. Yeah. Hi sir, thanks for the opportunity. Sir, could we throw some light on how has been the DMF utilization over the last six months and also how has been the new products doing like the DMC and the Propylene Glycol? Are we able to produce this product on a full scale or are we still not able to find the right customer mix on this new product like the DMC and the Propylene Glycol? See, DMF, yes, you are right. There was two type of problems we faced. One problem, sometimes prices. When there is a price we were not having the sufficient DMA. These were the two types of the problems we were facing. That's the reason we were operating at some 40%-45% capacity level. Once we commission the methylamine plant, at least one problem we will solve that the shortage of the DMA will not be there because the additional capacity of the DMA will be coming into the line. Secondly, the other thing, because of the market pricing we are targeting now the outside country because the outside country prices we have seen better than the domestic. Actually dumping is happening in the country. Unfortunately, we are not getting government support for the anti-dumping. The reason we just looking outside the country. Europe we started supplying. U.S.A. we will be supplying this quarter onwards. Saudi, we exported few quantities. So definitely in going forward, we should see the more than 60%-70% capacity utilization for the DMF. As regards DMC and Propylene Glycol, see DMC, we were hoping that the lithium battery manufacturers will start at least two to two and a half quarters back only they were supposed to start. But very unfortunately, no company has actually started up the batteries. That is one. Secondly, the prices at China, like other products, for this product also, they have created huge capacities and actually they are selling in the losses. So that's the reason we are in a position to cater whatever domestic availability. We are giving around 25% to 30% capacity we are running. To increase this, to take it further, we have started, we have already taken the REACH registration for these products also. We started giving the few marketing outside country, like Europe we have given couple of ISO tanks. The moment we get the full approvals, then probably this year also we will go to 50%-60% in coming quarters. Okay. Sir, as you were mentioning that we are looking to export DMF post the commissioning of the DMF capacity. But over the past years, we have been facing dumping from the countries like Saudi Arabia and all these countries only. So where is the problem? On one side we are facing the problem for the dumping from the Saudi Arabian countries, and on the other side we are claiming that we. Actually, Saudi Arabian, they are dumping only in India. In their own country they are selling at much higher price. That's the reason we targeted. For information, this month we sold two ISO tanks to Saudi Arabia at much higher price. So now we just started going to the outside country where those people are having the good prices and dumping in our country. We are also going outside only, at least to give them the competition so that they will understand that dumping outside, how it will affect to the everyone. USA also the same place. In USA they are having good prices. Only in the domestic market this is very unfortunate for us. We are having the both countries like Saudi Arabia and China is dumping below raw material prices. Sir, maybe we can say INR 100-INR 120 could be a viable price for exports for DMF? Even INR 90. INR 90 viable. INR 90, INR 95 also we can sell because we get some additional export benefits for the duty free raw material. All these things we will add. Even if we sell at INR 90, INR 95 also it will be viable for us. That's the reason we started going out. And sir, on the exports of the DMF, do we have some visibility like by the end of FY 2024 or early half of FY 2025, we will be able to utilize the capacity to the tune of 60%-70% on the DMF side? Definitely. We are targeting minimum 60% to 70%. And on the DMC and the Propylene Glycol side also, we are targeting during the same time? Yes. I mean, now we are at 20%, 25% level. We are targeting before end of this year, we should minimum do 50% to 60% capacity of these two products. Other product like ethylamines, which was greenfield project, which was first phase of these two products. DMC and before starting this, we started that ethylamine. That is doing more than 90% capacity. Okay. Sir, one more thing on this thing. For example, as we have seen during the past, like DMF, we have introduced DMF, but we have struggled for commissioning that. Currently as we have introduced DMC also, we are facing some issues. As we are coming up with a new product that is n-butylamine. We know that the domestic demand is around 8,000 metric tons and we are the only producers. Are we confident that as we start the plant and in a year or so we will be able to utilize that plant, there won't be any issues of utilizing the n-butylamine plant? Just your thoughts on the same. Yeah, definitely. See, whenever we plan the plants, we will just look at the global capacities and also consider the domestic growth. Like today is 8,000 tons. Maybe in coming two years it should become 12,000 to 13,000 tons, and we are going for the capacity of 15,000 tons. There will be some market outside country also, maybe 2,000 to 3,000 tons. We cannot expect, like what we are seeing in the DMC PG, initially out of 15,000 tons, definitely we will sell 8,000 to 9,000 tons in the first year of operation. But going forward, we will definitely see in the coming one or two years. As I said, we have to consider further four, five years' requirement of the various parts of the world. That's the reason we have taken 15,000 tons capacity. Going forward, we will see in the coming two years it will go to the 100% capacity. Okay. Sir, my whole goal is to understand, like for example Sir, we request you to please rejoin the queue for follow-up questions. Yeah, sure. Thank you. We have the next question from the line of Richa Agarwal from Equitymaster. Please go ahead. Thank you for the opportunity, sir. Sir, I wanted to understand this demand and the oversupply situation a little bit better. What is your outlook? How much time do you think the situation is likely to persist or wait? When you say that perhaps worst is already here, the prices have bottomed out, what gives you that confidence? If you could just take us through the demand and supply situation and how it is expecting to cover over. Richa Ji, you are right. We have seen all the bad time like prices lower and even the quantities, volumes also lower. Now, the confidence why we are getting more is the quantities lifting improvement has already started. Only thing is price, because people are habituated to the lower price, you are well aware that from the lower price to higher price situation, it will take longer time. Making higher price to lower, it will be done very faster. When we see the higher quantities have started lifting, we see the coming at least one, two quarters, it should come to the normal level of the volume point of view. Even price point of view also, it should come to the stable normal levels in the coming two quarters. Okay. And sir, the capacity expansions that you are doing, my understanding is that, we were going from 231 to 346,000 MT kind of capacity. What would be the current capacity and utilization? Of this, how much is actually going to the end market and what kind of capacity or production is being used captively, if you could talk a little bit about that. See, Richa Ji, till now what has happened in the methylamine, ethylamine, we were utilizing more than 60%-70% in-house only. That is the reason we were not in a position. But the reason we have gone for the expansion, one is ethylamines, we have done the bigger capacity, even though we were having a small capacity. Methyl also, we are talking to the additional 40,000 tons. That is the reason where we can sell some quantities in the market. Today we have 231,000 tons capacity altogether, like some of the product, like NMP, we have 33,000 tons, where we are doing only 15,000, 16,000 tons. New capacities which we are talking 162,000 tons like including the dimethyl ether is 100,000 tons. This answer is for everybody who is listening to this. I feel, it's my personal view, the dimethyl ether should be big game changer for the company. The reason is, if I calculate at least one district, two districts itself is the more than 60,000, 70,000 tons consumption of the LPG is there. We are talking about the, if I take the one region, at least western Maharashtra or part of the south market if I take, which is not sufficient even 20%, 30% of their consumption. Going forward, today we are running it, some of the plants at 80%, 90%, and some of the plants at 30%, to take the overall average that was 60% to 70% of the total installed capacity. And next 162,000 tons, which I was saying that total, coming two years we go for the revenue point of view INR 4,000 crores. While considering these capacities, we are hoping that we will do minimum INR 4,000 crores on the stable normal pricing levels. Right. Two years kind of time period, do you have that confidence that situation will normalize or the pricing pressures, they will improve but still Definitely. Okay. And sir, this product, I think DME, that you're talking about as an LPG substitute. From the end user point perspective, is it the shortage LPG or is it the pricing differential that will encourage them to shift from, let's say, LPG to this product? If you could talk about that. Both are there. Actually, we were in touch with the Government of India, with NITI Aayog for the past one and a half years, we were corresponding with the government. Recently, that is about a month back, government has already initiated that in all respects, the LPG companies should mix 25% of this product into the LPG, which you will see in the coming 2, 3 weeks, we should see the order should come out. They've already given these instructions to the BIS, Bureau of Indian Standards, to check the storages using, like LPG storages can be used for the DME and all. In our point of view, we have seen in China, they're already using more than 300,000, 400,000 tons, they are using, they are mixing in the LPG. They are mixing more than 30%, 40% in China. Definitely, looking into all these situations, we see that there is a bright future for this product. Okay, sir. Thank you and all the best. You're welcome. Thank you. The next question is from the line of Harsh from Marcellus. Please go ahead. Yeah, Mr. Harsh. Harsh, the line for you has been unmuted. You may proceed with your question. Harsh, if you're speaking, you are not audible. Ladies and gentlemen, as there is no response from the line of the current participant in the queue, we will move on to the next question, which will be from the line of Darshan Jhaveri from Crown Capital. Please go ahead. Yeah, Mr. Jhaveri. Hello. Hi, good evening sir. Thank you so much for taking my question. I hope I'm audible. Yes, go ahead. Yeah. I just wanted to ask, as the previous participant said, maybe around INR 4,000 crores revenue you can do on stable raw material prices. But as a layman who's not in the industry, what part should we be able to track so that we know that the prices have started correcting? Or what do you see maybe coming quarters or somewhere, something that would be easier for us to be able to check up on? Or maybe what do you see that maybe the start of calendar year FY 2024 things will become normal. A bit color or bit flavor along those lines, sir. Yes. Mr. Ashish. Maybe by end of this current financial year, the last quarter of this financial year, we are expecting the prices should go to the normal level. It may not go to the levels of 2021, 2022, because they were the special period, but normal level. For example, that product today we are talking, ethylamine. Last year it went up to INR 500. Today it is INR 160, INR 170. I am talking about it should be somewhere INR 200, INR 225 should be the normal level. Same with methylamines. On 100% basis, earlier we sold up to INR 150, INR 200 also. But normal level we sell, it should be somewhere INR 100, which is today at INR 85, INR 90. If this situation takes, I'm talking about only 15%, 20% improvement in the current prices. If that takes place, yes, we are confident that with the additional capacities that we are creating and old plant running at reasonably higher capacities, we should be definitely in a position to reach INR 4,000 crore level of revenues in coming 2 years. Sir, that's very good to know, sir. And sir, I also wanted to know any other risk that you see that maybe that can hamper or is the worst behind us, like any other that we might not understand or something that you see that can also again put a speed bump. Just want to know, sir, so maybe this year can be considered a bit sluggish in terms of profits, and next year we'll have maybe non-linear growth in profit that can compensate for this year? I think with 2 quarters. One quarter, we got some better taste, and this current quarter also may go little. Next 2 quarters, that is three and four quarters, if they do greater than the normal, then averaging about it should be flat but not sluggish, as you said. This is my personal view, I'm telling you. Other thing like bottom prices, bottoming up, which you are telling. Yes, what we have seen the totally bottom has already happened. I don't think countries like China will go further in losses. Some of the plants we have already seen who are doing lower prices in last three, four quarter, one or 2 plants already closed. Especially in the BDO, one for butanediol base products, they already closed. So like that, how long they will do once they come to the realization, once they come to the real thing in the market. Other thing, like U.S. already stopped taking from the China. That advantage as an alternate India will get. Looking into all these points, I feel it should be improved in coming 2 quarters. Sir, one last question, if I may, sir. Yes. Yeah. Sir, with this FY 2025, can we assume maybe we might be able to do INR 3,000 crore revenue and then INR 4,000? The 2 years plan target is about FY 2026 or 2025? I just wanted to clarify that, sir, in normal case scenario. Current year you should not consider. Yes, you are right. That is 2024, 2025 you should touch plus or minus INR 3,000 crores. Then 2026, 2027, we should be in a position to touch INR 4,000 crores. Okay. That helps me a lot, sir. All the best, sir, and hope for great results, sir. Thank you. Thank you, Mr. Ashish. Thank you. We have the next question from the line of Harsh from Marcellus. Please go ahead. Yeah. Hi, sir. Am I audible? You are audible. Yes. Yeah. My question is basically, we've been hearing for some time now that China is setting up some large capacities. Just want to know that are you hearing some large capacities being set up in our products, methyl, ethyl, acetonitrile? Can you repeat your question? I didn't understand. Basically, we have been hearing that China is setting up some large capacities which will be coming online sometime in late 2023 or in 2024. These capacities are across a whole bunch of products. Just want to know from you that are you hearing as well about some capacity coming, which will come online in any of our products, that is methylamine, ethylamine, or acetonitrile and any of our synthetic ingredients. Fortunately, I have not seen any new capacities coming in China for the methylamines and ethylamines. Ethylamines, they are already in short of ethanol. They are depending on the U.S.A., which has become a little tight. That's the reason I don't think methylamine they will come. Methyl, it is licensed in their country. If they want to export, they need to take the license from the Government of China. That's the reason many of the companies not thinking of it. If anything comes, maybe smaller capacity. But for the methylamine, their entire world is open. I don't think that will impact, at least for the methyl and ethyl amine. Yes. Like acetonitrile, if they go like this, dumping, it will definitely impact on the domestic companies for the acetonitrile, but not on the methyl and ethyl. Okay. Are you hearing any new capacity coming up for acetonitrile in China? That also we have not seen, but existing they have huge capacities. Acrylonitrile capacities are coming up. Existing acrylonitrile and acetonitrile, as I said earlier, that new technology, yes, there one plant is coming up with a new technology, which we were declared that we will be coming up with a new technology. Similar technology I heard somebody is coming in China. If that comes into the pipeline, probably that gives more tough competition for the acetonitrile in domestic market. Okay. Understood. Thanks a lot. Thank you. Thank you. The next question is from the line of Rajiv Rupani, an individual investor. Please go ahead. Yes, sir. I had a follow-up question on DMC. Sir, earlier you had talked about DMC blending in diesel. Could you throw some light on that? Also I am reading about Amara Raja Batteries and Exide forming up plans for lithium-ion batteries. Are we in talks with them, and by when do you think they will start their plants? We are very much in advance with both the companies. Discussed, in one of the company, we have sent the samples also, not only for the DMC. They may not use much of DMC, but they will be using more of NMP. We were discussing more on the N-Methyl-2-pyrrolidone and part of the DMC also. The moment they start, definitely we are first in touch with them for the raw material for both the companies. DMC blending in diesel? Blending in diesel, yes. We are still corresponding with the Government of India. We have done some trial with one of our vehicle with the Automotive Research Association of India in Pune. That is an Innova we sent a vehicle, and that has given good results. But still government has to give clearance for that. Before that, they gave the more positive on the dimethyl ether. That is the reason we are working on the dimethyl ether. But DMC, they are not full confident for the mixing in the diesel. In China, they are using. In many places they are using it. Okay. That was helpful. DMC, you had last time intimated that three more car makers are planned and product is ready. Any update on that? No. Until otherwise this battery manufacture starts, we are not going to touch that. We have the technology. Things are ready at table. The moment they start manufacturing this lithium battery, I do not know how many people will start for the full up manufacturing, how many will go for the N minus one. Many people will bring and assemble the project as they are manufacturers. We do not know 100% until otherwise they start buying from us. So we will have to wait to kickstart their manufacturing facilities. Thank you. Yeah. Thank you, Rajiv. Thank you. The next question is from the line of Aman Madrecha from Augmenta Asset Managers. Please go ahead. Yeah. Hi, sir. Thanks for the opportunity again. Actually, I missed the first half of the call. Could you please highlight why was the BSCL IPO called off? See, that is taken by the Balaji Speciality board because of the current market situation. Expected valuation did not come, and they were not having Market was not favor, so that's the reason I think they deferred it. Probably they will take the next course of action in coming quarter, and which we will be informed. Okay. Also, sir, what has happened with the board now? Who is in Balaji Speciality Chemicals and who is in Balaji Amines? You can see on the website there. Still I can tell you, like in Balaji Amines, A. Prathap Reddy is there, D. Ram Reddy, myself, and A. Srinivas Reddy. These are the N. Rajeshwar Reddy. These four are the executive directors. Same equally, four independent directors. Dr. Suhasini Shah is there, and Dr. Uma Pradhan is there, and Mr. Adabala Seshagiri Rao is there, Mr. R. Mohan Kumar. These are the four independent directors and four executive directors in Balaji Amines Limited. Balaji Speciality Chemicals, again, Mr. Prathap Reddy is there, and Mr. Rajeswar Reddy is the managing director of the company, and Mr. Hemanth Reddy will be the whole-time director for that company. Independent directors, one is Mr. Rajendra Tapadiya, and the other, again, is Amarender Reddy is there as an independent director. Again, Dr. Suhasini Shah is common in both the companies. She is the independent director. Okay, sir. That's all from my side. Thank you. Yeah. Thank you. Thank you. Ladies and gentlemen, we will take one last question from the line of Rohit Sinha from Sunidhi Securities. Please go ahead. Yeah, Mr. Rohit. Yeah. Sir, thanks a lot for that. Just one thing, as we are also anticipating some recovery. Since we have, I think, close to 50% exposure towards pharma and- Yeah. Mr. Rohit, can you Yeah Can you speak out clearly and loudly? Yeah. Sorry. As we are talking about some kind of, you could say, recovery from the second half, and we have close to 50% exposure in pharma and roughly around 26% in the agro side. So where initially you can say recovery signs are visible as of now and where we should be keeping close eye on? Yes. Thank you. See, as I am telling, you are also sailing in the same boat, that we have seen some improvements in the API and pharma market where our exposure is more than 55%-60%. Agrochemicals also, as I said, the improvement we have seen, the quantities have started moving more than the earlier quarters. Only thing is prices, we will have to chase to improve the margins and prices in the coming weeks and months. Probably in four or five weeks, we should be in a position to convince the customer end for bringing back to the normal levels, prices, as the raw materials also are going up. We look forward in coming two quarters. Definitely by end of the year, we all should cheer up and talk about the improvement in the total market, raw materials and finished products. Okay. That's it from my side, sir. Thank you. Thank you. I would now like to hand the conference over to the management for closing comments. Over to you, sir. Thank you very much. Thank you for taking out time and participating in our conference call. The overall outlook for Indian pharmaceutical companies and agrochemicals is expected to improve further as companies in Western economies support the China Plus One policy, and the pharmaceutical and agrochemical industries account for the vast majority of our end user clients' needs for aliphatic amines and specialty chemicals. Given the strong correlation between demand for our products and demand for the products from our end user industry, we anticipate a strong growth potential for our company in the coming years. At the same time, we are constantly working to expand and diversify our products portfolio in order to address more segments of our end user markets. Thank you once again to all the shareholders, stakeholders who are showing confidence at our company. Even at the bad times, you stood with us. I am really thankful to all. Thank you very much. Thank you. On behalf of Nuvama Wealth and Investment Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.