Ladies and gentlemen, good day, and welcome to the Q3 nine months FY 2023 earnings conference call of Laxmi Organic Industries Limited, hosted by Go India Advisors. 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. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Kruti Patel from Go India Advisors. Thank you, and over to you, ma'am.
Thank you, Rutuja. Good afternoon, everyone, and welcome to the quarter three and nine-month FY 2023 earnings call of Laxmi Organic Industries Limited. We have on the call Mr. Ravi Goenka, Chairman and Managing Director, Mr. Rajan Venkatesh, Chief Executive Officer, Mr. Harshvardhan Goenka, Executive Director, and Ms. Tanushree Bagrodia, Chief Financial Officer. We must remind you that the discussion on today's call may include certain forward-looking statements and must be therefore viewed in conjunction with the risks that the company faces. May I now request Mr. Ravi Goenka to take us through the financials and the business outlook, subsequent to which we will open the floor for Q&A. Thank you, and over to you, sir.
Thanks, Kruti, and a very good afternoon, ladies and gentlemen, and welcome to our earnings call for the third quarter. At Laxmi, we are committed to the highest standards of corporate citizenship and the safety of our people, communities, and the environment being paramount. Our three-decade legacy is built on the values of quality, safety, and sustainability. In the last quarter, we successfully completed a comprehensive assessment by industry experts and assessors to retain the Responsible Care certification for another three years. This certification, third time in a row, is a testament to our efforts of living by our guiding principles. Furthering our commitment to green energy, we are working to add solar power to our current captive hydro and wind power mix. At the moment, we are hopeful of starting with the solar power used by the end of March this year.
The company has also retained its credit rating of AA-, with the outlook being upgraded to positive. The rating acknowledges the financial prudence followed and the improving cash flows. In Q3, we capitalized the second phase of our second large plant of the specialty intermediates or the SI business. We have concluded the debottlenecking at our Acetyl Intermediates or the AI business. With these, all major investments in the existing businesses for this financial year are concluded and give us tremendous confidence in the buoyant performance of the company in the upcoming quarters. We are future ready. To further our five-year growth plan, the land acquisition of the 92 acre plot at Dahej has been completed, and we are at the finalization of a detailed investment plan, which will be shared with you as soon as the board approval is done.
The growth at this facility will be primarily from the specialty type businesses and help us consolidate our position as a leading specialty chemical partner with the most reputed global indicators. On our fluoro specialty investments, the Italian site is now vacated. The Indian plant, one that we are all looking forward to, is on track, and this quarter we expect the first production to commence. As I have mentioned in our earlier calls, the sample approval for the first six to eight products from this facility are already with us. These are products that will be catering to the requirements of agrochemicals and pharmaceuticals and have demand both in the domestic and international markets. In the domestic market, these are primarily import substitutes. With that, let me come to the business and the financial performance of our company for the last quarter.
Starting with the SI business, our strategy in this segment is to cater to the domestic demand with quality products supplied consistently. At the same time, we have been working to deepen our relationships with our overseas customers who value the backward integration that we have been able to provide. As a result, our exports in this business have increased substantially to about 45% while we have retained our market leadership in the domestic markets. The supplies from the first plant that was capitalized in the last quarter have commenced revenues this quarter. We have a robust pipeline to further innovate and forward integrate into more value-added products. This segment contributed 35% revenues and 65% profits during the nine months of last year, of this financial year.
For the quarter Q3, these numbers are slightly higher, with the segment contributing 37% to revenues and about 70% to the profit. The contribution margins of the segment have also improved and are coming back in line with those at Q1 FY 2023. In our Acetyls Intermediary business or the AI business, we saw good volumes in Q3, and we maintained our market share in this business as well. Demand remained stable in this segment after having seen significant pressures in quarter two, especially in the European markets. However, with energy prices having softened there, demand has stabilized. From a financial perspective, this business will continue to be stable without major upswings coming in the immediate future. This business remains to be cash accretive overall. Our diversified business model has enabled us to navigate uncertain times and de-risk the business away from large dependencies.
To this effect, the revenue contribution from our top 10 customers stands at 34% for quarter three, and our industry mix has also become more optimal, giving the company more agility in the coming times. On the financial performance, I am pleased to report that in line with expectations, the performance for Q3 has been sequentially better than Q2. Consolidated income for the company was INR 658 crores, which was flat quarter-on-quarter, largely driven by the lower prices in the AI segment. In the same period, the profit after tax for the company at a consolidated level stood at INR 27 crores, up from INR 9 crores in the last quarter. Improvement in the profits comes from the increased contribution of the SI segment, prudent purchasing, improving ocean freight costs and the internal cost controls that have been undertaken.
As the ocean freight prices normalize and the container availability improves, the company expenses could see further improvements. Cash flow from operations for quarter three at about INR 50 crores are significant improvement both quarter-on-quarter and year-on-year. For the nine months of this financial year, the revenue dipped by about 7%, largely due to the much softer prices in the AI segment in this year versus the financial year 2022. The margins were also impacted by this and by the fact that energy and trade prices remained at much higher levels in the first half of this financial year than in the same period last year. The costs now seem to be normalizing, and as we add more renewable power over the course of time, this variance should gradually be optimized.
On the working capital side, our conscious efforts and strict vigil have led to improvement in inventory and receivables days. The overall cash flow from operation to EBITDA ratio has improved to 65% for the nine months, which for six months of financial year 2023 was at 57%, and for the full year of financial year 2022 was at 27%. This largely comes from the improvement in the cash flow, which for nine months of this year is at INR 125 crore, 22% higher than the INR 102 crore of cash flow from operations for the full year of FY 2022. Before I open the floor for questions, I would like to reiterate that the company's endeavor is to create long-term consistent value for all our stakeholders, employees, customers, vendors, investors, lenders and local communities.
We remain steadfast in our commitment to carry out operations at all our facilities with the highest standards of safety, health, and environmental excellence. Our business practices and financial management are all embedded with the DNA of creating a sustainable business that we can all be proud of. With this, I would like to open the floor for questions.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may star and one on the touch-tone 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 Ankur Periwal from Axis Capital. Please go ahead.
Yeah. Hi, sir. Thanks for the opportunity. First question on, you know, Europe and SI as a business put together. If I look at European revenues, we are, you know, largely flattish on a year-on-year basis, with some improvement there if I look at the nine-month numbers. If I look at SI, export has been showing a good growth on a year-on-year basis. Will it be fair to say that, you know, large part of this growth in SI business is coming from Europe or there are certain other markets as well which are opening up?
Related to that, you know, the newer products that we were launching, you know, is there certain, the pipeline, the new product pipeline, is there something more which is building up your comments there?
Sure, Ankur. Hi, Harsh here. Ankur, SI business is in geographies outside of Europe as well, while the AI business has a larger exposure to Europe. We see that we're able to diversify a lot more, and we had specified that U.S., China and some other Asian markets were our key focus, which is where we've primarily been targeting. Regarding the new product pipeline, yes, there is more to come, and we are looking to put more new products in the pipeline in SI business as well. Those will come and impact us in the next financial year.
Sure. From a cost competitiveness perspective, and given the elevated power cost, et cetera, you know, in the, in the global market, especially in the, in the European hemisphere, are there significant, you know, incremental inquiries coming in or, you know, probably a quicker ramp up? This is your interaction with the clients.
Well, no, I mean, it will be generic. Yes, there is continues to be significant interest in India, even though China is opening up. China can never be ignored as a market. We do believe India has got adequate space to grow for the entire industry, and Laxmi will play its part.
Sure. Just lastly, on the Acetyl Intermediate part, you mentioned in the opening remarks that this probably the pricing will remain here for a while before taking an uptick there. But any significant pressure that you are seeing in overall pricing, profitability in this region, both in domestic and international?
Thanks, Ankur Periwal. The Acetyl business, we continue to maintain our margins as we had estimated. In the near future, we mean for this quarter, but usually this is the quarter also when the demand picks up and we are already seeing green shoots of that, not only like I mentioned in Europe, but also domestically. We believe that we should be doing reasonably well. We didn't want to say anything on the upswing or the, you know, very, very high prices. We will continue to maintain our margins in the Acetic Acid business.
Okay, fair enough. That's it from my side. Thank you, and all the rest.
Thanks, Ankur.
Thank you. Participants who wishes to ask a question may press star and one. The next question is from the line of Jatin Damania from Kotak Securities. Please go ahead.
Thank you for the opportunity. Just wanted to do a follow-up question on the AI. I mean, as you have mentioned in your opening remarks also that we have seen a substantial jump in the volume. Can you throw some light on which region we are seeing a sharp increase in the volume? Where are the cost initiatives your company has taken, which are definitely the... I mean, you indicated that the margins we are able to manage as per the expectation. Given the tailwind in terms of the reduction in the freight cost and some amount of the benefits in terms of the power cost, how many basis points in the margin that we can see in FY 2024, 2025? Can you throw some light on that?
Jatin, your question was? You know, I'd like to say that probably the first thing to clarify is the volumes were good. I wouldn't like to say that there was a significant jump in the volumes. I think compared to Q2, the volumes were better in the AI business, given that, you know, given that the demand in regions such as Europe really came back. That is on the demand side of the piece. On the cost side of the business, of course, freight costs have started coming down, but the container availability still does not is not as seamless as one would like it to be. The cost improvement is different in different regions. It's not that the prices have come down equally for all destinations.
Having said that, we are seeing consistent improvement in freight costs. The container availability as we are, in the end of January, has also improved than what it was in the last quarter. I think this cost improvement curve should continue.
On the SI front, as in the opening commentary, but in the last question when you indicated that there are a couple of new products that we are developing. Instead of naming, can you highlight what is the total size of that product?
You know, we don't comment, Jatin, on the size of the product. As you will appreciate, there are two large CapExes in SI that we have done. One, we capitalized fully in Q2, and the Q3 results actually are showing the benefits of that. The other large CapEx, we finished the capitalization in Q3. The production will commence. You know, you will see the difference in Q4.
Okay. Sure. That's all from my side. Thank you.
Thank you. Participants who wishes to ask a question may press star and one. Next question is from the line of Bobby J. from Falcon. Please go ahead.
Hi. Hello. Yes, I just wanted to understand the economics of the AI business better.
Sorry to interrupt, we cannot hear you clearly. Can you speak a bit louder?
Yeah. Hello. Can you hear me? Is it better now?
Please go ahead.
Hello. Yeah. I wanted to understand the economics of your business a bit better, the AI side. The raw material that you use is Acetic Acid, right? That's been falling, and so has your Ethyl Acetate, your final product. That's also been falling. Why are you not able to maintain the absolute EBITDA? Both are falling, right? If it's a pass-through, your EBITDA shouldn't be affected.
Sure, Bobby. Bobby, in a falling market, when we can maintain about stock for about 60 days. That impact is continuously observed in your overall margin. In a flat scenario, you're usually flat, and the reverse is true for an increasing or an inflationary scenario. Over time, we see that this business normalizes and you're able to consistently generate margin and cash from this view.
All right. What you're saying is it's actually the higher priced inventory because of your extended holding period that's impacting EBITDA.
Correct.
Once the price falls down, you can actually pass it on. In other words, you can maintain your absolute EBITDA. Is it right?
That's right. That's right.
Okay. Now it's stabilized, correct, in this quarter? Do you see the same intensity of fall that was happening last quarter?
I think the large amount of intensity has the intensity of fall last quarter was a lot higher, which we don't like to predict which way the prices will go or how much the fall will come, so I'm not gonna attempt that. What we try and do is maintain a certain amount of margin that we can constantly operate at, irrespective of what price, where the irrespective of raw material finish good pricing. You're at any point in time just exposed to 45 to 60 days of invention.
Right. What do you think is the reason behind the price fall? For acetic acid, it's even below 2018 levels. Is that increased supply or lower demand, or both?
I think everyone who is buying or consuming acetic acid would have a view of that. I don't mean to predict why it's happening. There are some reasons, I'm sure, but it's been very difficult to pinpoint. Our business is tuned to making margin irrespective of where the acetic acid prices are, and that's where we like to operate it.
I know. I understand that, but I'm just wondering, is there big supply coming up? That's something you'd surely know, right? Being in the industry.
No. No new supply has been announced, globally. That's starting up. That's public data. The industry largely remains long, if you look at acetic acid as an individual molecule.
Okay. All right. Thank you.
Thank you.
Thank you. Participants who wishes to ask a question may press star and one. The next question is from the line of Chintan Patel from Sadguru Capital Markets. Please go ahead.
Thanks for the opportunity, ma'am. What is the current utilization of AI and SI segments? I think we have a capacity of SI is around 80,000-85,000 tons. Correct me if I'm not wrong.
Chintan, hi. Tanushree here. Chintan, we've, you know, I think the way to look at our SI business, and we've sort of said this in the past, is rather than looking at the capacity to look at the product mix. The capacity in that business is not necessarily very relevant. As the product mix changes, you know, the profitability could change significantly. The way we look at this business is to look at what is the product mix that is coming out of here, and are we achieving the contribution margins that we had set out for ourselves.
Okay, okay. So what is the current utilization for AI and SI?
The AI business usually runs at roughly about 85% of capacity utilization, and I think we keep running at, you know, at those levels. We have a very, very large capacity. We've also just announced that, you know, we've complete debottlenecking of that. It's a fairly efficiently run plant.
Okay. Okay. Recently we have merged our subsidiary Yellowstone and [Acetile]. Can you quantify the what are the financial impact?
The financial impact, Chintan, is available in the published results. Previously the standalone did not reflect YCPL, but the consolidated results reflected the YCPL numbers. Now you will see that the standalone numbers include the YCPL contribution and, you know, the consolidated then takes into account the other group companies. If you would like to have a reconciliation line by line, very happy to speak to you offline and take you through that.
Okay, sure. Recently we have terminated one of the Middle East subsidiary and have given an effect of deconsolidation. Can you share some color on that? What is the comparable number for quarter-over-quarter and year-over-year number?
Sorry, I got the Middle Eastern subsidiary. What was the second part of the question?
That is all. Can you share some color on that? What is the comparable number for quarter-over-quarter and year-over-year basis?
The comparable numbers are all published in the results, Chintan. The Middle Eastern subsidiary had no operations for the last one year. We've closed it down.
Okay. Can you share some light on a fluoro facility? What it will start to contribute a meaningful revenue?
Sure, Chintan. I think this year will be where we establish the base very strongly, and the next phase of CapEx is already planned out. You will start seeing revenues in FY 2024 in a significant way. Of course, the story is much larger, and we have much larger plans for that.
Okay. You have highlighted in your presentation the opportunity lies in electronics and automobiles. Can you share some light on that?
That's one of the market segments we address, and we're looking to do that.
That means in particular area. It is coming in a particular area, a particular product are coming for this two articles?
Yes. We've got products that will address these two industries.
Okay. That's all. That's all from my side. Thank you.
Thank you.
Thank you. Ladies and gentlemen, to ask a question, you may press star and one. The next question is from the line of Nitesh Dhoot from Prabhudas Lilladher. Please go ahead.
Hi, good afternoon. Thank you for this opportunity. My first question is on the debottlenecking and acetaldehyde. What is the capacity addition with this debottlenecking undertaking?
Nitesh, the total capacity is about 2 lakh tonnes that we have. I think the debottlenecking was completed last. Was done in a phased manner. It just got completed. We capitalized that this quarter. That's therefore the announcement.
Sure. Okay. Okay, my next question is on the fluorochemicals business. Here, have we been able to secure any orders, you know, after the approvals which we understand are already in place?
Yes. That's exactly what's on the way. I think their customer too are just waiting for us to see actual production and look at fresh specs from manufactured batches. We're just waiting upon that and subject to that, we're able to dispatch product to them.
Sure. On the HF supply, so have we been able to secure the HF supply? If you can just give some color on, you know, on that side.
Yes, we've been able to secure HF supplies as well, we've got agreements in place to make sure that we are secure on HF too.
Sure. On the specialty intermediates, basically, I mean, can you give the utilization of our first long-term project in Q3? Capacity utilization.
Yes. It ramps up to a fairly good extent in Q3 as we had expected. I would say almost to its, the top quartile of its capacity utilization. We're just waiting to see the next quarter. It's got a little bit more headroom to go. Look at it that way, Nitesh.
All right. How is the second phase placed? I mean, how are we placed on that side? In Q4, you know, what kind of ramp up, you know, what kind of utilizations can we see in the case too?
Likewise, even for our other CapEx, it's a similar thing where you will see a ramp up to a fairly good level in Q4, and you may have a little bit more room to go in the quarter thereafter.
All right. And just last bit on the CapEx. What will be our CapEx outlay for FY 2024, 2025? I believe, you know, other than the Fluorochem and the SI second phase, I think, there is nothing else for now. Second phase is also commissioned, nothing, you know, more than that, you know, nothing has been announced. Any color that you can give on that for the FY 2024 and 2025?
Yeah. We have got two CapExes planned out already. We've not announced those numbers because one is in FI which will require CapEx for a fair bit of new products and some derivatives that we've planned. These as we had mentioned earlier, we'll announce these CapEx and rather we trigger these CapEx as soon as the base is solidified. The other expansion will come up in Dahej, which we will announce once we have the full board approval as well.
Any of these would get commissioned, you know, by FY 2025 itself or will it be beyond 2025?
You will see commissionings in FY 2025. That's where we are working.
Sure. I believe that for the SI CapEx possibly the asset turns would be higher than what, you know, than what you've indicated for the first leg of it. Would I be right?
New CapExes will be higher than the existing one in SI. Yes.
Sure. Sure. Thanks a lot. That's all from my side. All the best for the coming quarters.
Thank you, Nitesh.
Thank you. Participants, you may press star and one to ask a question. Next question is from the line of Khushbu Shah from Nirmal Bang. Please go ahead. Khushbu Shah, please go ahead with your question. Your line is unmuted.
Yeah, I just wanted to ask about.
I'm sorry to interrupt you, but we cannot hear you, ma'am. Your voice is too low.
Hello? Am I audible?
Yes, please go ahead.
Yeah. I just wanted to know a bit more about the product profile of chlorine and will the margins be like in line with SRF and Navin?
Sure. The product profile is going to be chlorine and HF are our primary starting raw materials. We make several derivatives of that which go into agro pharma and a large range of industrial applications. Margins will be similar to those of what you see of other specialty chemical companies in the top tier.
Okay. Thank you.
Thank you. Participants may press star and one to ask a question now. The next question is from the line of Rohit Nagraj from Centrum Broking. Please go ahead.
Thanks for the opportunity. So in terms of the first phase of SI with six to eight samples which have been approved, product samples, what could be the potential that we are looking at maybe in first year and second year of our operations, normalized operations?
Sure. The assets that we have acquired, the assets by itself can give about revenue. They used to give a revenue between EUR 25 million-EUR 30 million in Italy. We will look to. Sorry. We will look to achieving a part of that in the first year. As manufacturing stabilizes and we will trigger new CapExes, we are seeing a long runway ahead where we can grow this significantly.
All right.
What I'm trying to say is that the first year is primarily to establish the core very strongly, which enables us to fill up into new growth avenues as well as various derivatives that are already planned out.
All right. Got it. Sir, second question is, now we have three segments, including the fluoro specialty and what we talked about with Dahej, it's a specialty products. Will this be a separate segment without any overlap against the three segments? What are the chemistry platforms or user industries that we are targeting from these new set of products?
Sure. User industries will be fairly similar. You might have one or two strategic user industries getting added. But just give us, give us some more time and we'll come back to you once we get board approval.
I don't wanna give some information that the board has not passed through the board as yet.
Sure, sir. Sure. Just one last clarification. For AI, our capacity is 232,000 tons per annum, right? I mean upwards, slightly upwards of 232,000 tons.
Yeah. The 232,000 number, the capacity is more than that, after de bottlenecking, and amalgamation of YCPL. You know, we don't give out the exact capacity numbers.
Sure. Sure. No, I was just trying to verify it because in our slide six we have given the capacity number is higher than 232,000 tonnes per annum.
Higher. That information is correct.
Fair enough, sir. Thank you so much for answering all the questions and best of luck, sir. Thank you.
Thank you.
Thank you. Participants, you may press star and one to ask a question now. The next question is from the line of Meet Vora from Axis Capital. Please go ahead.
Thanks for the opportunity. I just wanted to reconcile or reconfirm the segmental as well as geography-wise revenue for Q3. For Q3, our SI business is I mean 37% and AI is 63%. Can I get the geography-wise mix of SI for Q3 as in domestic and exports?
Meet, we don't geography-wise, we don't give the split of SI and AI. If you have any other reconciliation questions or financial questions, we can connect offline, please.
Sure. This 45% which you have mentioned in our PPD, is that for nine months-based or a mix for-?
The 45% is for quarter three, FY 2023.
It's for quarter three, FY 2023. 45% exports for SI?
Yes.
Sure. Second bit on the end user industry. I see over here that, quarter-on-quarter there has been decline in share of printing and packaging while there has been increase in share of coating. Has there been any customer change or has there been any usage change of AI or SI business because of which this change is there?
Meet , we, I mean, one of the strengths of the business is that we cater to a diversified industry group, and these changes would constantly happen depending on how various end users are running or various end user trends. These minor things will happen. As we had mentioned earlier, printing and packaging was not doing as well, and the reverse was true for coating some time back. These are just general parts and part of business.
Sure. That's all from my side. Thanks and all the best.
Thank you, Meet.
Thank you. Ladies and gentlemen, to ask a question, you may press star and one. The next question is from the line of Dhruv Muchhal from HDFC Mutual Fund. Please go ahead.
Yeah, thank you so much. This is one clarification. On slide 13, where you've given the SI contribution margin growth, the index chart. How should I think of this? If assuming the margin was 10% in 1Q 2022, has it increased at 28% in Q3 FY 2023? 10% goes to about 12.23% or 12.8%. Is that the right way?
Yeah, that's the right way to look at it. What we are trying to show is that from Q1 FY 2022 onwards, how has the contribution margin really fared for the SI business.
The percentage margin, how that's increased on a percentage. Got it.
Yeah.
What, what does the product mix optimization chart represent?
You know, a number of questions that were coming to us were around how many products are you manufacturing and how many unique products are you selling. This chart and product mix optimization is actually showing that, you know, if we were selling 100 products in Q1 FY 2022, which were giving us INR 100 of contribution margin. In Q3 FY 2023, we are selling 104 products, which are giving us a contribution margin of INR 128.
Got it. Got it. Perfect. Sure. That's it. Thank you.
Thank you. Participants may press star and one to ask a question now. The next question is from the line of Rajas Joshi from Marcellus Investment Managers. Please go ahead.
Good afternoon, sir. I had a question on the fluorochemicals business. I went through your environment clearance filings, and they mentioned that the chemicals that you start producing were in the BTF or the Benzotrifluoride value chain. Given that, I mean, we are procuring HF from outside and there is already a strong incumbent in this value chain, could you please, I mean, help us understand the strategy in this segment a bit better?
We don't comment product by product, but I'm happy to give you a answer to that in a different way. The products that we are looking to manufacture are not manufactured in India today, which is why we looked at McNeely as a strategic asset. Therefore, we are starting off with those products that are not made. McNeely has those technologies, and we are getting those to India. Therefore, we are looking at a good potential, not only in terms of import substitution, but even tying up with the global majors to service their international requirements as well.
All good. Thank you, sir. All the best.
Thank you.
Thank you. Participants, you may press star and one to ask a question now. The next question is from the line of Dhaval Shah from Girik Capital. Please go ahead.
Yeah, hello. My question is on the fluorine side. Like we have, couple of approvals from the customers in some time, and we also saw some delay in the starting of the project. You know, how were the customers fulfilling their demand, you know, for those products, you know, for which they had given us an approval? Were they buying it from somewhere else or, how was it?
It will differ from product to product, but it's a mix of two things. One is loss of sales opportunity for customers as well as potentially sourcing from others primarily outside of India.
Okay. Okay. These customers whom we are going to sell, are they all are domestic customers for us?
No, largely international.
Okay.
A lot of them will be feeding the growth potential of their respective end molecules.
Okay. Okay. This I believe, will be going into pharma and agro, as you said.
That's right.
If it's going on in the pharma, then So they don't have to mention any source in the document which they submit with the regulatory authorities. Or do they have to?
No. You're right. There is some regulatory approval required, which is why we're focusing more on the agro molecules, agro and industrial molecules in the earlier parts. Pharma will take slightly longer for approvals, but that we've managed our business plan accordingly.
Okay, okay. Basically, with this delay in the starting of the project, we did lose some customers. Now, like we are confident of a lot of those customers switching back to us for the period where we were not available.
Yeah, I don't think we lost customers, but I think the customers as well lost some amount of opportunity that they had.
Okay. They did not manufacture the product which they were supposed to using our product.
Correct. Both are true.
Okay.
Where you had some amount substituted, but some amount lost as well.
Okay, do we have to, you know, compensate them for... given they have lost some business, in their end market or some?
No, there's no liability for that.
Okay, okay. Okay, thank you very much, and good luck. Yeah.
Thank you.
Thank you. Ladies and gentlemen, before we take the next question, if you want to ask a question, you may press star and one. The next question is from the line of Janesh Dilip Karani, an individual investor. Please go ahead.
Hello. Henceforth, the company will be focusing on FI and SI, can you highlight what will be the margin going forward? In this, in the current quarter, second phase of SI has been accomplished. Is there any revenue contribution in this same quarter or it will start generating revenue from fourth quarter? In FY 2021, we had a flooding at one of our plants. We had claimed insurance for the same. Had the recovery insurance claim has been received or not?
Sure. I'll take the first two. We are looking to invest more and more in SI and FI-like businesses. We've made the business margins of our SI business fairly clear. That's visible to you from our online literature. Regarding our sales, we had some amount of sales already in Q3 from the plant that were from the new plant that was commercialized, and that will ramp up further in Q4. Okay. Tanushree can take the insurance.
Yeah. Mr. Karani, the insurance claim discussion is at a very advanced stage with the surveyor.
Okay.
Once these discussions close, the surveyor will submit their final report to the insurance company.
Okay, but it's taking too long. The last time also I asked the same question. It's taking long time for the claim amount.
Mr. Karani, this is a large claim with a large volume of data. You know, first of all, it's a large claim with a number of items against which the claim has been placed, which means there's a large volume of data and a number of inspection trips that the surveyor needs to be able to undertake.
Okay.
That they can then put up their report, which will go to the board of the insurance company.
Okay. once the claim amount is received, it will have PNL impact or balance sheet? It will add back to our profit or-
No. There won't be a PNL impact from this. There will be a balance sheet impact.
Okay. Okay. Yes. Thank you.
Thank you. Ladies and gentlemen, as this was the last question for today, I would now like to hand the conference over to the management for closing comments.
Thank you everyone for your time and patience. It's always a pleasure to be here with all of you and to answer your questions to the best of our abilities today. If anything remains, we are happy to take it offline, and our team will be happy to interact with you and clarify anything that you may have. Thank you for supporting our company. Thank you for being with us. Thank you.
Thank you. On behalf of Go India Advisors, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.