Good day, ladies and gentlemen. You are connected to Q2 FY 2025 earnings conference call of NOCIL Limited. The conference will begin shortly. Please stay connected. I repeat, ladies and gentlemen, good day. You are connected to Q2 FY 2025 earnings conference call of NOCIL Limited. The conference will begin shortly. Please stay connected. Ladies and gentlemen, good day and welcome to the Q2 FY 2025 earnings conference call of NOCIL Limited. This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.
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 Mr. V.S. Anand, Managing Director of NOCIL Limited. Thank you, and over to you, Mr. Anand.
Thank you, Shlok, and good morning to everyone. I would like to start by expressing my appreciation for your presence today. Joining me are Mr. P. Srinivasan, our Chief Financial Officer, and our investor relations advisors from SGA. I hope you have all received our investor presentation. It is available on both the stock exchanges and our company website. To start with, let me provide you with an overview of the company's performance for quarter two financial year 2025. During this period, revenue from operations amounted to INR 363 crores. We witnessed a slight de-growth in volumes in quarter two financial year 2025 sequentially compared to the preceding quarter, partially impacted by logistical challenges. Having said that, we continue to build on our volumes year-on-year, both on a quarterly and half-yearly basis.
The domestic demand for other chemicals continues to remain robust on the back of the tire industry's stable replacement volumes and recovery in exports. Aggressive pricing actions and product dumping by Chinese, Korean, and EU rubber chemical players have put a significant strain on prices. On the industry front, there was a temporary slowdown in compounding production due to the shortages and very high prices of natural rubber. The natural rubber prices have since begun easing and availability improving. The OE growth for tires is expected to moderate amidst softened demand. The two-wheelers are expected to fare relatively better while the commercial vehicle segment is impacted by moderation and demand amidst a high base. On the export side, we are seeing continued momentum in our international business growth despite global challenges such as geopolitical tensions, container shortages, issues in the Red Sea region, and rising freight costs.
We have made good progress in expanding our international presence, a result of our long-term strategic engagement with our customers and our focused efforts in gaining approvals. The latex business has been witnessing a mild recovery with improved exports of rubber gloves from ASEAN, and this augurs well for us. In terms of raw materials, prices remain marginally higher during the quarter. Passing on these cost increases to customers has been challenging due to the fierce competition from China, Korea, and EU. In response, we have adopted a judicious approach, balancing price and volume amidst these ongoing challenges. Our chemical expansion program is progressing well at our Dahej site. This CapEx program that aligns with our strategic objectives for growth will enable us to continue to partner with our customers in their growth journey.
We continue to work on improving our operational efficiencies with technology and infrastructure, and at the same time prioritizing eco-friendly practices from energy-efficient production methods to waste reduction technologies. Looking ahead, while there continues to be an element of unpredictability in the external environment, we remain positive on our growth opportunities. We continue to focus on building our market strengths, deepening our customer relationships, and leveraging our other chemical expertise to drive growth. I shall pause for now. That's it from my side. I will now invite Mr. Srinivasan to provide an overview of our financial performance.
Thank you, Mr. Anand, and good morning to everyone. Let's run through the consolidated financial highlights. On the sales volume turn on index basis for Q2 FY 2025 is 141, taking base of Q1 FY 2020 as 100. On the revenue parameters, the net revenue from operations for Q2 FY 2025 stood at INR 363 crores as against INR 372 crores in Q1 FY 2025. A marginal de-growth as compared to the previous quarter. For the half year, the net revenue from operations stood at INR 735 crores, as against INR 748 crores recorded in H1 FY 2024. Again, a de-growth of 2%. We have maintained our selling prices largely for the quarter. Volumes for Q2 FY 2025 grew by 11% year-on-year, but showed a slight decline on a quarter-to-quarter due to logistic issues. The international business continues to show a growth trajectory.
For the first half of FY 2025, the volumes reflected a strong growth of 9% as compared to H1 FY 2024. Here, the domestic maintaining the growth trend as per the market trending and the export performing at a relatively higher double digit growth. On operating EBITDA performance, operating EBITDA for Q2 FY 2025 stood at INR 38 crores as against INR 41 crores for Q1 FY 2025, with EBITDA margins around 10% in Q2 FY 2025. Operating EBITDA margins for the quarter were impacted due to increase in production activity by 10% on a sequential basis, which led to higher operating costs along with certain freight costs incurred on account of export destinations. For the half year, operating EBITDA stood at INR 79 crores against INR 101 crores for H1 FY 2024, with margin standing at 11%.
Coming to the PBT parameters, the PBT for Q2 FY 2025, operating PBT for Q2 FY 2025 stood at INR 32 crores as compared to INR 37 crores in Q1 FY 2025. H1 operating PBT stood at INR 69 crores as compared to INR 84 crores in H1 FY 2024. On the profit after tax, the profit after tax for Q2 FY 2025 stood at INR 42 crores as compared to INR 27 crores in Q1 FY 2025. This is on account of the consequent to the Budget 2024 announcement, there is a long-term capital gains tax rate amendment change.
There is a tax credit of INR 14.89 crores was recognized due to these budget changes. For H1 FY 2025, the profit after tax stood at INR 69 crores as compared to INR 61 crores in H1 FY 2024. With this, we would like to open the floor for question answers.
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 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 the question. We will wait for a moment while the question queue assembles. The first question is from the line of Nirav from Anvil Wealth. Please go ahead.
Good morning, sir. Thanks for the opportunity. Sir, I have two, three questions. Sir, first is, you mentioned that there was increase in the production activity this quarter, but I think the sales was impacted due to the logistics issue. I think very well reflected in our stock changes also. So, let's say that if there was no logistics issue and we were able to sell whatever we have produced this quarter, what would have been the sequential growth in the volumes in Q2?
No, I would expect it would have marginally been higher than the previous quarter.
Got it. Are those logistic challenges behind us? Could we see the production, what we have clocked in second quarter, that should start moving in the third quarter onwards? Plus the normalized volume growth, which you mentioned last time that-
Yeah
we are seeing every quarter some bit of volume increases through the contracts, what we have negotiated with the customers. If you can just help us out understanding how the volume trajectory is looking out in H2 of FY 2025. I think we have clocked something close to around 9% volume growth in H1. If you can just help us understand some bit on the volume side, that would be helpful.
Yeah, sure. Like we mentioned also on the previous call, we see volume to develop positively. We also for the second half, we maintain that there should be an improvement from here on, further going into the second half, at least at this point when we look ahead. Clearly with the volumes developing positively.
Correct. Because sir, last year, third quarter was bit sluggish in terms of the volumes. Safe to believe that the current level of volumes, what we have been doing on a quarter-on-quarter basis, there should be improvement on the base volume of H1. Is the right understanding to do?
Yes.
Got it. Sir, second question is on the competition part. I think you mentioned that there was intense pricing pressure due to competition from China, Korea, and E.U. Just wanted to understand from you, when the competition behaves in terms of on the pricing side, do they work on the cost plus business, like when the raw material prices start coming down, they adjust their prices accordingly on a spot basis and change their prices, because of which we also face a similar sort of pressure in getting our volumes to be placed. How is the competition behaving at this point of time in terms of pricing, A, and in terms of placing their incremental volumes in the market?
Yeah. Based on our experience, what we see, and I can't specifically comment on what the approach is. But by and large, I see that they start with a cost plus kind of cost-related pricing. But then it tends to then also become very market-based, depending on how the rest of the pricing in the market tends to play out. Then that kind of tends to put a downward pressure if there is lowering of prices by some of the players. That's how this is playing out. Everybody is trying to really grab volumes, because there is lower demand in some of the markets. We know that the Chinese economy, as such, utilization levels are at a significantly lower level. So they're really looking to take those volumes. Sometimes they do take some, I should put it, a rational or irrational decision to take some volumes.
Then that tends to put a pressure on quite a few of the other players on the price.
Correct. At some point of time, do the customers approach us also on the similar lines, that do we also need to price our products on a cost plus basis or adjust our price accordingly? If you can just help us understand what sort of volumes of ours are susceptible to the spot prices, and how much of our volumes are more towards the contracted side, where such changes on a quarterly basis doesn't impact us.
Yeah. It's a mix of both. Basically, like we have also explained in the previous calls, most of the pricing tends to hold for a quarter at least with the large customers, some of them even for longer periods. But some of them, since they are also long-term relationships, they don't tend to fluctuate that much. Some of the customers, then it's a balance of both, where you have the long-term engagement, where you don't see too much of fluctuation in volumes from one quarter to the other. But for some of the other customers, you do tend to see that fluctuation. So it's a mix of a basket of both that we have there.
Got it. Sir, last bit from my side, one, you mentioned that there was a double-digit volume growth on the export side on a year-over-year basis. If you can just clarify that number. Second, are we seeing any recovery on the latex side of the business, where our volumes were impacted in last year and even in first quarter. So are we seeing some sort of recovery there on the latex side of the business?
Yeah. So on the latex, yes, we do see that the production of rubber gloves is improving partially. I think also what we see is that exports from ASEAN is also improving. So there is an uptick in the market compared to the situation last year for sure. Yeah.
Correct. And sir, last one on that export numbers or export volume growth on a year-over-year basis, if you can clarify, sir.
Yes. It is double-digit growth. Amit can confirm. I will not specify the exact number, but it is definitely more than double-digit growth.
Okay, sir. Thank you so much, sir, and wishing the entire team of NOCIL a happy Diwali and a prosperous New Year.
Thank you.
Thank you.
Thank you.
Thank you. The next question is from the line of Aditya Khetan from SMIFS Institutional Equities. Please go ahead.
Yeah. Thank you, sir, for the opportunity. Sir, my first question is in regard to the volumes part. Sir, on sequential basis, sir, can you clarify these volumes? Is it majorly because of the international volumes or because of the domestic volumes?
There is growth on both fronts from a year-to-year basis. Also on a sequential, you see there is a bit of a staggering of volumes is what I would say. And due to logistical challenges that we have witnessed. Yeah. I do not see that as a real de-growth per se.
Okay. Sir, onto the logistical challenges. That is clearly reflected into the higher other expense. Sir, is it possible to quantify the number? How much was it higher on sequential basis? Absolute figures, sir, if it is possible to share.
Like I mentioned, at least I think if we didn't have, hypothetically, we should have marginally been higher than the previous quarter volumes.
Okay. Sir, as you had also mentioned in your initial commentary that higher competition is clearly impacting the company. That is also reflected into our per ton margins, which we calculate. Sir, any idea, in terms of a cycle, that is clear, we are standing at the bottom. What are the triggers, like which can take these per ton margins to the original levels, which were there, you can say five to six years, before. Any triggers you find apart from the higher competition or any sort of the value addition which is going up or any sort of new products you are launching, that can help us to improve the margins or we will more or less remain at this level going ahead?
I see that with improving of the economies outside of India and improving demand, we should see prices moving up. But then, I don't have a specific time frame to put in terms of when this will improve, given the uncertainty that are all around. But that's on the market front, and where I see that there is clearly a possibility that prices should improve with increasing demand in the other markets. But on the other hand, we continue to work on products which we can bring to the market, but they do take its time. We are in trial phases. Products are in different stages, where we want to also get into product and application where we can see more resilience. So that is work in progress, but that's still some time away, yeah.
Okay. But sir, in your presentation also, the graph of the rubber consumption. Sir, the number is quite similar to the 2017 figures of 28 million tons. It seems, sir, over a period of six to eight years, demand has been largely sluggish only into the global market. Any particular reason, sir, why this demand has not gone up and it is at the similar level?
Aditya, there are a few challenges which the market encountered. One was the automobile degrowth in 2018, 2019 in China. Second, the COVID waves of COVID one, COVID two, and stuff like that, which has impact on the rubber consumption. Therefore, if you see, there were two major interruptions during those periods where the market degrew, and therefore you saw a sluggish thing. But whenever there is a recoup happening, it goes into 3% thereabout or 4% thereabout. So it's a matter of time. Once the conditions stabilize, I think hopefully the momentum will pick up. Having said that, in the last 10 years, one has seen despite this volatility, the average growth for this industry has been 2%, 1.8 or thereabout. So, compounded CAGR growth is 2% per annum.
Now, maybe once these things rectify, I think, or correct, the conditions stabilize, hopefully the momentum starts to pick up.
Okay, got you. Sir, just one last question. Sir, any update on the anti-dumping duty? Have we represented to the government, and is the government seriously considering to impose an anti-dumping duty in the near future, considering the impact which we have seen in our margins also?
We are actually, at the moment, studying various parameters of the study. We have not filed anything.
Okay, sir. So we have not applied yet, sir?
We are studying this before we decide which product, if at all, we want to. So far, the study, there are various parameters to be studied before we take a view. This is a joint decision between our consultants and NOCIL. At an appropriate time, when we do it, we will announce it.
Sure, sir. Thank you, sir. That is it from me.
Thank you, Aditya.
Thank you. The next question is from the line of Radha from B&K Securities. Please go ahead.
Hi, sir. Thank you for the opportunity. Sir, firstly, I would like to appreciate the management and team for continuously increasing volumes despite the challenges. Sir, my question was, on the other expense front, I was surprised to see the higher other expense in this quarter. Normally, around 45% of other expense is power and fuel cost, and 14%, 15% is freight. In the previous con call, you had mentioned that from this quarter, we would be witnessing the benefit of cogen turbine. So I had thought that any increase in freight cost would have been offset by benefit of cogen. However, it was not reflected in the numbers. So, I request you to kindly help me understand these numbers.
Radha, there are a few things. The turbine got commissioned in this quarter. It is a fact. We saw some benefits accruing. But I think what we have mentioned that we had a production increase in the activity because we had anticipated a higher sales or despite during the quarter, which did not happen. Therefore, the loading of expenses is where proportionate to the manufacturing activity. So that is one thing. Secondly, you also had the exports to the destination, the Western world, so obviously it will be having a relatively higher freight cost as compared to our ASEAN continent markets. So both these factors came into the system in terms of other manufacturing expenses, and which includes even the packing material also. So there are three, four parameters which got loaded in other expenses.
That is why it is a one time you see this, but it should stabilize as we go along.
All right, sir. Sir, just continuing this point. From July to October period, we are seeing that freight rates have halved from $6,000 to $3,000. So in the next quarter, do we expect to see twin benefits of cogen plus lower freight rate in addition to the operating leverage on anticipation of higher volume?
Yeah, we are going to see that. Those things will come in.
All right, sir. Also, just wanted to ask, sir. In the last quarter, we were expecting some large approvals from customers. So has that come through?
Yes, Radha. This is ongoing and we do receive on a quarterly basis approvals. Like I have mentioned, it is not specifically, it will be a customer, multiple customers, multiple sites. That is ongoing and that is progressing from quarter to quarter.
When can we see those volumes reflected in the numbers?
Actually, we are seeing this as we speak. We are seeing this and like we just discussed in one of the earlier questions, we are clearly seeing it in the volume development.
All right. Sir, lastly, the South America market OE and aftermarket demand seems to be very strong. Just want to know, are we supplying to this region and any new customer addition or share of business increased with customers allocated in this region? Also, today, volume in South America, if we take an index number of 100, then how much growth are you expecting from this region in the next two years?
We are supplying to the South American market. We have presence with some of the global customers in those markets. Most of the growth, I expect more in North America than in South America, because also the volumes and the opportunities are more there. We have not put a specific number on what we will expect from South America in the next few quarters as yet.
Sir, what percentage of our total volumes would be to South America? Would it be lower than 5%?
By and large, yes.
Okay, sir. Thanks, and all the best.
Thank you.
Thank you. The next question comes from the line of Dhaval Shah from Girik Capital. Please go ahead.
Yeah. Hi, sir. My question is on the commentary made for H2. The overall auto market globally, the commentaries has been quite low, and we see a good improvement for us in terms of volume growth. This is coming on back of you seeing more customer wins on the specialty side, and some market share gain. So where is this positivity coming out from? That is my first question. Second question is on the competitive intensity. You mentioned a couple of countries' name. This intensity, and we have seen it many times in the past also. So the quantum of intensity, is it similar to some time in the past or it is something very high right now? If you could relate to a time period in the past for us to better understand how we reacted that time, and how did we come out of it.
So some relation to the past. These are my two questions.
The first part of your question, there are two things. One is, if you look at our market share outside India, we have a very negligible market share. That is one. There is an opportunity to grow with customers. The other part is when you look at the rubber industry consumption, and largely it is the tire dominated. Within that, the OE part is a smaller percentage. It is about only 30%, very reflective of what we have in India and even in the global market. It is more of a replacement market. I see that the replacement market is still reasonably doing better than last year, when I see this across the regions here. That is also a positive trend. On the other hand, our presence is also small. With both this as a combination, there is reason for optimism.
The third part, which I can add is, the long-term engagement that we have been having, the strategic engagements, and the approvals that are coming through, which also I see as a positive contributor to that. If I would summarize, I think these are some of the points to answer your first question.
Got it.
The second one, on the part of the intensity of competition, I would say, that it is at a high level now to really say, is it how related is it to some period in the past? I am sure there has been a period similar to this in the past, some period around 2019, 2020.
I think 2020 and 2013 also.
Yeah, 2013. So there have been phases where this intensity has been high. So let's say if I look at a time frame from the past, there are some comparisons to this similar period, yeah.
Okay. So between then and now, our portfolio mix is much better towards better margin products or specialty products, we may put it. Is it the right way to understand since we have always been focusing for many years to improve our specialty portfolio outside India?
Yeah. So they have increased over the years, but also some fluctuation here and there in the last one or two years. We see that has contributed also with some of the specialized application products increasing in volumes over the years. That has given us a lot more robustness to the bottom line.
Okay. Sir, any innovation index kind of matrix we maintain to understand out of our total sales volume as you read it today, how much of the products have we developed in the last three year or a two-year period? Just to understand how are we progressing as a company?
Yeah. We are tracking what is usually called the Vitality Index which is critical to look at new product introduction and how they perform as an overall percentage of sales. We are tracking it, but we have not declared any of this in public domain. To give you an idea, it is progressing positively. That is something that we have as part of our leadership dashboard that we watch very closely. That is something that we track. Products introduced in the last five years.
Interesting. Last question, sir. As we see a volume growth from, this is the index what we give. This quarter we were at 140 odd. A 10% growth from here should bring a big leverage on the EBITDA? Am I understanding correctly if we just compare it to FY 2023 quarters? Is there a large operating leverage sitting here for a 10% volume growth from here?
Sir, there will be operating leverage just kicking in as the volumes go up, for sure. Yeah.
Can we look at like a 10% volume growth from here could give a 3%-4% jump on the EBITDA side?
I think we cannot quantify those things at this moment. We are studying that because it all depends on the product mix also. That's it.
Is there a room to improve our gross margin further from here? Keeping aside the price increases, which are market-driven, but is there some organic growth room to improve our GP, which is like 43% this quarter?
There is a continual improvement. We always work on our efficiencies and the yields parameters on a regular basis. We start monitoring on a regular basis, and we do have an internal target where we can stretch ourselves, but it all comes under the broad chemistry composition of the structure of the molecule. I think we have some room to play, but I don't think it's that significant. Maybe a one person here and there, it can improve definitely. Just to add, a lot of our work of our R&D team apart from looking at new products is process efficiencies and both in the yield as well as the process. They continue to accrue, and I'm positive with volumes they will also add.
Got it. Thank you very much, and happy Diwali to everyone. Thank you.
Thank you. Thank you. Wishing you the same.
Thank you. The next question is from the line of Rohit Nagraj from Centrum Broking. Please go ahead.
Yeah. Thanks for the opportunity. So first question is on the export recovery. So you mentioned that there is a recovery in exports and double-digit volume growth. At the same time, you have also mentioned that there have been aggressive pricing actions from China, Korea, and new players. So how have we fared in terms of this competition and maybe which geographies which have given this kind of growth? Or is there anything which can be explained by these two contradictory things? Thank you.
Thanks, Rohit. I would say while, yes, the competition and price intensity continues to be there, not only in India but also outside, probably a bit more in India because people see that there is demand in the country. If I were to put it's a combination of both the long-term engagements that we are getting into and the push over the last two to three years, and the long-term relationship that we have had, which is enabling us to mitigate some of these other factors to a certain extent. I cannot say that we are very immune to it. Surely, we also will be susceptible, but at least it's holding us in good stead. And we are positive that we should be able to at least continue in that direction, more as a reliable supplier, a long-term supplier, somebody they can de-risk their supply chains from.
These are things that are working positively for us.
Sure. Second question, sir. We've been talking that we want to de-risk ourselves from the rubber chemicals, and probably we've been working on the same in our R&D, but nothing has actually come out. So any progress on that? Given that there could be opportunities outside the current vertical that we are in, are we aggressively looking at any inorganic opportunities besides the CapEx program that we are having and given the cash balance is significantly higher on our balance sheet? Thank you.
Yes. It is a two-pronged approach where we look to leverage adjacencies in our chemistry. That means, how do we look at our own chemistry that can go to other applications? There is work that's happened, and there has been some sales in that front, but really not so material for us to report it. These are very specialized applications also where we see some good traction. We've been working on these projects for more than two, three, four years now, and some of them are showing some traction, but I'm really not in a position to really talk about it because I don't see it as so material. But hopefully they will start gaining some traction. On the other hand, the option is always to look at the inorganic, and we are actively looking at it.
At the same time, we want to find an option that can also leverage our own strengths. Strengths not only in chemistry, but a lot of our other capabilities that we have. We can actually then have those synergies coming together. We are working on this, and I am also not able to put any timeline to that because there are so many other factors that play into this, that sometimes they do not work in the last minute. I think that is ongoing. We will continue to pursue that.
Got it. Just one last clarification. The 20% increase in capacity from this INR 250 crores of CapEx, what is the timeline for this? When is it likely to get commissioned?
That is like the third, fourth quarter of 20. Actually, Rohit, we have announced that by September 2026, 30 months from the date of announcement, we will be ready with the plant ready for completion. Thereafter, the trials and approvals thereafter. It may take three, four months thereafter. That is why I said fourth quarter of FY 2027, the business should start coming in.
Fair enough. That is all from my side. Thanks a lot. Best of luck, and
Thank you.
Thank you.
Thank you. Same to you.
Thank you. The next question is from the line of Raman KV from Sequent Investments. Please go ahead.
Can you hear me, sir?
Yes, sir. Please go ahead.
Sir, can you give the guidance for FY 2025 as well as what is the current capacity utilization?
Current capacity utilization is 70%.
70%, okay.
Yeah. Our guidance in terms of volume, as we have said in the past, and again we maintain, our endeavor is to grow sequentially quarter-over-quarter. We do not want to give any specific guidance. Our intention of the base number is 140, we would like to grow from here every quarter.
Okay. In terms of volume, you want to grow quarter-on-quarter.
Yeah. That is what we are looking at.
And sir, you have announced INR 250 crores CapEx for the Dahej facility. Is the whole CapEx only for debottlenecking the existing facility, or are you planning to addition?
It's a brownfield new plant around there.
Okay.
It's not a debottlenecking project.
It's a brownfield project.
Yes, that's right.
And sir, you have told in this call itself that the specialized products gave more robustness to the company's finances as well as you have mentioned that there are new products under development. So these products, are they like specialized chemical products or they are just like, how do I say, low margin products?
Yeah. So what I mentioned was over the years, the specialized applications have slightly moved up, but not beyond a certain point. Not specifically to this quarter, to the previous quarter. Nothing has significantly changed on the specialized application products. Coming to our new developments, clearly the focus is on better margin products, less on the commodity space, yeah.
Okay. Thank you, sir.
Thank you.
Thank you. The next question is from the line of Manoj Jethva from KSA Shares and Securities Private Limited . Please go ahead.
Good afternoon, sir, and thank you for the opportunity. My first question is relating to the green chemistry, which you have mentioned in the presentation slides. Currently, NOCIL is having 20+ product applications. Are we going to launch any new products keeping the green chemistry in mind?
Yeah. We are working on this. When you say green chemistry, it also includes substances that are safe to use, as well as looking at greener renewable options. We are looking at all this regularly, and they are in the works, Manoj, yeah.
My second question is pertaining to China Plus One strategy. Everybody is talking on the buzzword of China Plus One strategy, but China is also coming out with the new unique economic package of almost around $54 billion. How we guard rails against such developments which might take place in China, sir?
Yeah. When you say China Plus One strategy, and if you really bottom line that, it's nothing but reducing a supply chain risk, right? As a player, as a large, if I put myself in the shoes of any of our customers who buy something that is very dependent on ingredients that run their plant, I'm always looking to de-risk my supply chains to ensure that I have a stable supply chain. This obviously leads to opportunities for players who can support them in this front. I see that this supply chain de-risking will continue to gather momentum with all the uncertainties that are around. I see that this will gain more traction as we go along. I'm not able to comment on the stimulus or what's really happened there, but I think the fundamental concept is to look at supply chain de-risking.
Just to add a bit, I think despite the stimulus, what we have seen is the export tax subsidy or the rebate which the Chinese government has extended to the rubber chemical manufacturers continues to remain at same level. It has not been increased.
Thank you. Sir, appreciate to share some growth trajectory apart from the rubber chemical things. Are we looking out for any inorganic growth in the same space, either say in India or overseas?
We are exploring options, Manoj. Like I responded to one of the earlier questions, that is an ongoing process. We are doing it in a structured manner. That is ongoing.
Sir, thank you very much, and wishing very happy Diwali to all at NOCIL team, sir.
Thank you. Thank you, Manoj. Wishing you the same.
Thank you. The next question is from the line of Nirav from Anvil Wealth. Please go ahead.
Sir, thanks for the opportunity. Sir, when I see our annual report and in particular the power schedule, and when we compare our volumes of FY 2022 and similar amount of power consumption, I think what we have consumed in terms of per metric ton of finished goods was something around close to 5,500 units, which is now down to 5,000 units precisely in FY 2024. This is despite the fact that our volumes have not grown, but we have brought down our per ton consumption of power. One thing you mentioned that we have been continuously investing in the process part of our business. So two things here.
One, with the improvement in the volumes which we are envisaging, could this further fall, and specifically I am talking about the power consumption per metric ton of finished goods and with the cogen turbine benefits also now accruing to us, would it also bring down our unit cost of power? Because predominantly we were more reliant on the coal side and with this renewable power coming on. Just wanted to understand the benefit of this in light of volume growth, A, and the mix of power getting changed.
Yeah, we will see some benefits accruing in. I think because some things marginally got kicked in this quarter because we commissioned during the quarter. As we go along and once we start operating at a stable capacity, these benefits will start accruing.
Correct. But sir, is it the right understanding that our power consumption per metric ton has come down by close to 10% over last two years, and this is purely because of the process part of our investments?
So what happens is, whenever you are running a plant at a particular throughput rate or a better utilization rate, you will get the optimization benefits. Some of those come with that.
Correct. This should further improve once our volume is getting ramped up.
Yes, Nirav. That is expected to happen. Also the fact that we have been also looking at green energy options, that has also been contributing to that with the ramp-up.
Got it. Sir, secondly, apart from the power side, are we seeing any improvement on the per unit consumption of raw material or let us say improvement in the input/output norms for some of our products where you mentioned that the process innovation is also being a key investment for us. Are we seeing some improvement there also, which eventually brings down our cost of production?
Yeah. We have several examples internally where we have had this. Over the years, this is a continual program. Regularly there is work on the yields, on the consumption of the raw materials. There is a positive traction on this on a regular basis, Nirav. Yeah.
Correct. Sir, last from my side is, in terms of the debottlenecking, what we have been doing, how much would have been capitalized till H1 of FY 2025 and how much balance is yet to be capitalized?
Nirav, I do not have specific numbers right now with me. As and when I get the details, maybe I will share it separately with SGA and with everybody.
Thanks. Thank you so much, and wish you all the best.
Thank you. Thank you. Thank you.
Thank you. As there are no further questions, I would now like to hand the conference over to Mr. Anand for closing comments.
Thank you. Thanks, Shlok, and thank you everybody for your time and engaging discussions. I take this opportunity to thank everyone for joining the call. I hope we've been able to address all your queries. For any further information, kindly get in touch with me or Strategic Growth Advisors, our investor relations advisors. We wish you all a happy and safe Diwali and a Happy New Year. Thank you once again, and have a nice day.
Thanks.
Thank you. On behalf of NOCIL Limited, that concludes this conference. Thank you for joining us, everyone, and you may now disconnect your lines.