Ddev Plastiks Industries Limited (DDEVPLSTIK) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Q1FY27 Earnings Conference Call for D. Dave Plastics Ltd. As a reminder, all participants lines 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 this 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. Lonnie Ajmera from Go India Advisors Ltd. Thank you and over to you, ma'am. Good afternoon, everyone.

On behalf of GoIndia Advisors, I welcome you all to first quarter of FY27 Earnings Confidence Call of Dave Plastics Industries Limited. Today, from the management, we have Mr. Narendra Sarana, Chairman and Managing Director, Mr. Dave Sarana, Whole-Time Director, and CEO, Mr. Rajesh Kothari, Whole-Time Director, and Mr. Arian Botra, the CFO. I now hand over the conference to Mr. Dev Surana for his opening remarks and then we will open the floor for the question and answer. Over to you, sir.

Thank you. Good afternoon, everyone. Thank you for joining us today for Q1FI27 earnings call of Dave Plastics Industries Limited. We truly appreciate the continued interest and confidence of our investors, analysts, and other stakeholders. During today's call, we will discuss the company's performance for the quarter ended June 26, along with the key strategic and operational and industrial developments that are shaping our growth trajectory. The financial results and statements and investor presentation for the quarter have been approved by the Board of Directors and available on the stock exchanges. FI27 has commenced against a rapidly evolving global and domestic macroeconomic drop. While the world continues to navigate shifting geopolitical and economical reality, India remains one of the few large economies demonstrating structural resilience, policy continuity, and sustained growth momentum. The domestic macro environment continues to be supported by healthy public investment, improved private sector participation, more balanced corporate and banking sector balance sheets, and resilient consumption demand. Recent policy measures, including rationalization of GST rates, reforms in personal income taxation, and a more accommodative monetary policy environment, are expected to provide further support to growth demand. In addition, India's expanding trade architecture, particularly the India-EU FTA, which is expected to provide preferential access to more than 99% of Indian exports, represents a meaningful opportunity for the Indian manufacturing, exports, employments, and investment formation as well. These developments are closely aligned with the government's long-term vision of Vixit Bharat 2047, where infrastructure creation Productivity enhancements, industrial expansion, and global competitiveness remain central pillars of transformation. At a sectoral level, we believe India is entering a multi-decade electrification and infrastructure expansion cycle. Globally, rising urbanization, industrialization, power consumption, and digitalization are accelerating investments across electricity generation, transmission, and distribution networks. India is installed. Power generation capacity is expected to nearly double from approximately 442 GW in F524 to around 900 GW by F532, supported by substantial investments of 9 trillion rupees in the transmission infrastructure. This expansion across substations, power transmission lines, transformer capacity, and grid infrastructure is expected to generate sustained demand for distribution, power, and specialty transformers, while also creating significant long-term opportunities and potential for the wire and cable ecosystem. The rapid emergence of India's digital economy is creating an additional layer of structural demand. Investments in data centers, semiconductor ecosystems, renewable energy infrastructure, industrial corridors, and advanced manufacturing are steadily increasing the need for high-performance, reliable, and specialized cable solutions. This is driving a gradual but decisive shift from conventional low-voltage applications towards medium, high-voltage, and extra-high-voltage applications. These advanced applications require specialized polymer compounds, involve stringent customer approvals, and command superior realizations and create meaningful entry barriers for new and unorganized participants. This industry evolution plays directly to the strengths of Dave Plastics, with a legacy spanning over four decades and a leadership position as India's largest polymer compound manufacturer. The company is exceptionally well positioned to participate in this structural upcycle. Our strong qualification credentials established by customer relationships, deep manufacturing expertise, global laboratory certifications, and proven quality standards make us the preferred partner for leading wire and cable companies in India and overseas. Despite geopolitical disruptions, In recent years, with many wars, our exports have still grown at a CAGR of 16% between FY22 and FY26, reflecting the growing acceptance of our products in international markets as well. Today, Dayplastics stands at a scaled, diversified, and innovation-led polymer compounding company. Over a journey of more than four decades, we have continuously expanded capacities, coordinated our product portfolios, and strengthened our leadership across key product categories. As of June 2026, our total installed capacity is at 3,16,400 metric tons per annum. We offer more than 200 specialized compounds and continue to maintain strong positions in critical segments, including a market share of 50% in the Cyprus market and a leading presence in the HFR compound market in India. Importantly, this growth has been achieved while maintaining zero rejections, a robust balance sheet, and a consistent record of sustainable value creation. Building on this foundation, we are also making a focused and strategic entry into the battery energy storage systems. We see BESS as a natural extension of our understanding of the power ecosystem and as a compelling opportunity emerging from India's renewable energy transmission. As the share of renewable energy in India's energy mix increases, storage solutions will become increasingly critical for grid stability, energy reliability, and efficient power deployment. With the experience, financial discipline, operational capabilities, and a flexible approach, we believe Day Plastics is well-placed to build a meaningful presence in this emerging business vertical over the long term. Our growth philosophy remains disciplined, forward-looking, and value-accretive. In FY27 and beyond, we remain committed to expand capacities, invest in product innovation, and move further up the value chain in higher KB compounds, deepening our penetration in international markets. Simultaneously, we will scale the best business in a calibrated and disciplined manner, ensuring that growth is pursued with commercial prudence and balance sheet strength. Supported by powerful structural drivers such as infrastructure development, electrification, urbanization, renewable energy expansion, and manufacturing growth, we remain firmly on track to achieve our top-line ambition of 5,000 crores by FY30. With that, now I invite our Chief Financial Officer, Mr. Aryant Bhutra, to present the financial and operational highlights of the quarter. Over to you, Aryant.

Thank you. Good afternoon, everyone. For the quarter ended 30 June 2026, we are pleased to report a strong and resilient performance, underpinned by healthy demand-momentum, disciplined execution, and intrinsic strength of our operating model. Revenue for the quarter gave by 29% year-on-year basis, driven primarily by robust traction in the cables and wire segment in the export market. EBITDA grew by 27% year-on-year, with margins at 10%, representing a commendable performance in the context of multiple industry headwinds, software trade sentiment, and ongoing geopolitical tensions in the Middle East. I would also like to add and highlight that this is the first time our EBITDA has crossed 100 crores as a benchmark. Profit after tax stood at 64 odd crores, resisting a year-on-year growth of 22%, reflecting the company's sustained operational discipline, earnings quality, and ability to protect profitability across market cycles. The quarter began amid a challenging global operating environment marked by supply chain disruptions, commodity price volatility, and external uncertainties. However, Dev Plastics continue to demonstrate resilience, agility, and execution discipline. Our ability to navigate such conditions is supported by our strong customer franchisee, scale advantages, manufacturing depth, prudent working capital management, and a leadership position in specialized polymer compounds. These trends are not easily replicable and continue to differentiate us meaningfully in the marketplace. During April 2026, we successfully commissioned our new The facility in Biwadi with a capacity of 48,000 mt. It is a greenfield XLP compound facility located in Rajasthan. With this addition, our installed XLP capacity has increased to 214,500 mt per annum, further consolidating our leadership in the important product category. The company continues to hold an approximately more than one-third market share in the XLP compound segment, and we expect That the new Bhivadi facility will contribute incremental revenue of close to 500 odd crores as utilization levels scale up progressively. Our capital expenditure strategy is anchored not merely in the pursuit of scale, but in a clear and deliberate conviction around the long-term opportunity in India's cable and wire ecosystem. We believe the next decade will witness a step change in demand driven by power transmission upgrades, renewable energy capacity additions, smart city development. This application will require cable and wire solutions of higher complexity, superior reliability, and advanced specification, creating a more favorable environment for organized, technically capable, and quality-driven polymer-compound manufacturers. Dave Plastics is well positioned to participate in this opportunity. Our investments are designed to deepen market penetration, enhance products post-series. Thank you. Today, our overall capacity stood at 316,400 mt during this quarter-end with capacity utilization of average 66 odd percent. The moderation in utilization is primarily attributed to the inclusion of new capacity in Bivari of around 48,000 mt, which had limited operating time during the period. As the new capacity stabilizes and progressively ramps up, we expect operating leverage and revenue contribution from this facility. We have a resilient core business. Thank you. And long-term share.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will be it for a moment while the question queue assembles. The first question is from the line of Arnav Sakhoja from Ambit Capital. Please proceed.

Thank you for taking my question. So, my first question is that, you know, we had a very strong improvement in organizations, you know, which I think mentioned is led by a higher growth.

Mr. Sakhoja, your line is breaking.

Thank you.

Thank you. The next question is from the line of Apoor from Whitestone Financial Advisors. Please proceed.

Yeah. Hi, sir. Thank you for the opportunity. Sir, in the last concord, you mentioned that our sum of the revenue in the Q4 is sufficient in the Q1 because in the last few days in the March, Because of the, we couldn't export, right? So it was shipped in Q1. So how much revenue in Q1 is the part of the Q4?

It is majorly driven by the export revenue because the shipments were having issues with respect to availability of vessels and other things in the last week of March when the work was just started, another was at the peak position, I will say. If you ask in terms of numbers, technically, it may be around 1,000 odd tons, which has been moved, but the value has changed later on because of increase in freight and on. So, this quarter, we have reported close to 300 plus crores of export revenue. Some part of it is contributed by the previous quarter's export quantities.

Okay, okay. And so, my next question is, sir, our new capacity at Givadi, how much we would be realizing that in the February 7th?

Average utilization of 50-plus percent from that. As of now, it is running at roughly 20-25 Watt percent, and slowly it will get ramped up over a period of time. So, by end of this year, we consider 50% average utilization for this year. Next year, it will be higher.

Got it. Got it. Thank you, sir. Thank you.

Thank you. The next question is from the line of Hardik Jain from Whitestone Financial Advisors. Please proceed.

Sir, our EBITDA per turn, although has decreased in terms of percentage, because the realizations overall has increased, but even in the absolute terms, the EBITDA per turn has increased. So, if you can just, you know, let us know what could be the reason behind it.

Major reason is driven by the exports. If you see the export of close to 300 plus odd crores, mainly to the MENA region, had been the main contributor. In volume terms, there has been no major growth in terms of export. It can be hardly few percentage in single digit or so. However, in terms of value, because there has been multiple issues. One, uncertainty over the freight rate, uncertainty over the availability of raw material prices. So, we could get better prices as compared to other competition in the Middle Eastern and other markets. And that is the reason in export we have done better. And that is the reason the overall EBITDA per ton has...

Bidda Purton is sustainable, or as the things ease out on the logistic front in the export, this can again come back to the normalized level that we saw last year.

It is very difficult to predict on this line, but definitely we, as a conservative approach, we can say that... Our targets are 16 to 17 rupees, or in percentage, you can say 10 to 12 percent of EBITDA margin is something which we always aim, and we have focused approach to achieve that only. So maybe 19.6, something which has been achieved in this quarter may not be sustainable for each and every quarter, but probably it can be sustainable for a few months from here also.

And broadly, when we say EBITDA per turn, generally, we should look at it in terms of per turn basis or in terms of percentage, because the realization can keep fluctuating.

See, the realization prices have gone up by 30%, and the margin cannot go beyond 30% at the same time. So, it is mainly pass-on business. We are a transparent supplier to most of our customers. And we pass on the prices which have come to us in an increased manner. And that is the reason the percentage basis, if you see, it is still looking good at 10%.

Thank you. The next question is from the line of Bhagwat from Prosperity Wealth Management. Please proceed.

Thank you for the opportunity. On the base of business, could you please comment on the intended business model, whether the company plans to operate primarily as ECC model or follow a BOO, that is asset warming model. What's the management view on both these type of business models?

This business is getting shifted from west to east. Start with, it will be supply and mix of EPC. Now, we are not dying on an immediate...

Okay. Okay. And what is the EBITDA margin should we expect from this day's future? And how do you see the margin profile evolving over the next few years? Are we scale-up in this particular business?

So when we scale-up, we have since it will be initially a supply model, we expect a EBITDA margin of 6 to 8 percent, which we have mentioned in our presentation as well. With passage of time, when we adopt EPC and when we adopt other models, then slowly and gradually it may improve.

And if you add EPC,

there is an addition of from 2% to 5% something you can get. Then there is an opportunity of becoming a system integrator, where it is practically more than EPC and less than a BEO model. So, there you can add a couple of more percentages also. So, in each stage, practically, if you ask me, there are 2 to 3 percent where you can keep on adding on the EBITDA levels.

Okay, and then peak, we can expect around 13%. Is that achievable?

Sorry, sorry, your voice is not clear.

At peak, can we consider 13% is achievable? Are these chains of and operating in this phase out?

Yes, long-term, long-term target is in the range of, I will say, 11 to 15 out percent. For utilization, we become system integrator and we do a lot of other activities as well, do backward integration of some parts which is possible, smaller parts, then we eye that it will be in the range of 11 to 15 odd percent.

Okay, okay, thanks for that. And my last question is, what are the funding requirements for this particular base business and how much depth does management exercise to raise for this business? Are you still there?

As of now, we have expected that the overall requirement will be within 200 odd crores in the first phase, and entire money for the same is being deployed from our internal approval. So, we cannot comment on all the requirements today.

Yes, I think the numbers that you have mentioned are a capitalist amount, if I believe. But, what will it be for the business, let's say, for one gig hour, what is the expected date we can consider?

You can consider...

Good day, thank you, and let's say one gigawatt hour to introduce EPC model, let's see. Yeah, so I am trying to understand, let's say, for 1 gigawatt hour EPC, base EPC we are trying to execute. So for that particular 1 gigawatt hour EPC project, what is the expected date that will be added in our books?

So, as I mentioned, as of now, what we expect... Comparatively limited and will be within the range of 150 to 200 crores, both considering capex and working capital margin. Now, additional debt in terms of working capital may be in the range of another 100 to 150 odd crores. However, since the first phase of business is And the course which will be applied.

Thank you so much for that.

I hope it is clear to you now.

Yeah, it's clear. Thank you so much for that. Thank you.

Thank you. A reminder to all participants, anyone who wishes to ask a question may press star and one on their touchtone telephone. The next question is from the line of Drishti Shah, an individual investor. Please proceed. Hi, sir.

I just had one question that I wanted to understand the margin profile in our export revenue and our domestic revenue. Because gross margins have seemed not to have increased too much despite our exports increasing so much. So, just wanted to understand that a bit.

See, in domestic scenario, there is no uncertainty as far as rates are concerned, as far as availability of vehicles are concerned. But in case of export, due to this war situation, there were many uncertainties. So while quoting your prices, you can only get an indicative rate and indicative timeline. So you don't know what will be the actual price. And on top of it, the raw material prices were so volatile that prices were changing every week, and sometimes twice or thrice in a week also. So it is very difficult to predict what will the price change in this particular week. So we have to take a calculated risk. And on top of some, I will say, volatility or war risk premium to quote to our customers. And that is the reason there has been some additional EBITDA pertain derived on an overall quantity which we have sold.

Got it. And, sir, I see in our presentation that our FY27 target revenue increase is expected to be 13%, while our capacity addition has been 25%. So, if you could just highlight that, are we being conservative over here or what?

Both. We are conservative in our approach. While making the estimates, we have considered the average prices which we have achieved in the last fiscal year. We haven't considered or factored the increased prices which we are as of now experiencing. This is point number one. Point number two, when you see the growth rate in terms of capacity utilization, the new capacity will ramp up on a slower basis. And I mentioned just to the... Average capacity utilization for them. If we consider the same, then out of 500 or so of revenue to be generated from that particular unit, we will be able to generate around 2 to 250. We have considered a conservative 13 percent, though in the first quarter itself we have surpassed due to the average increase in prices by almost 20 percent.

Correct. And how long do we expect the rise in the price of resin to continue?

It is comparatively much more stabilized as compared to what was there in the month of March and April. Now, once the war and the Hormuz situation is clear, then we expect the prices to slowly and gradually come down. It may not happen overnight, but it will take three to six months of time for price to gradually come down to the earlier levels.

Thank you so much. Thank you. The next question is from the line of Hardik Jain from Whitestone Financial Advisors. Please proceed.

Sorry, I just wanted to ask one more question on BESS. So, in this first phase of BESS, our capacity is going to be 1 gigawatt hour, isn't it, with this 200 crore capex? Yes. And we can... Because we are going into the supply mode in the first phase, and in this, we can generate 900 crores of annual turnover from this 1 gigawatt hour facility, right? Okay.

Depending on the sell prices.

Thank you. A reminder to all participants, anyone who wishes to ask a question, may press star and one on their touchstone telephone. The next question is from the line of Jainam Ghailani from SWAN Investments. Please proceed. Hi, sir.

Congratulations for a good set of numbers. One question from my side is that since we are guiding almost 13-14% growth in FY27,

how much would it be volume led and how much would it be mainly because of realizations?

If you consider the guidance we have given in the presentation, we haven't considered any increase in prices in that particular, because we feel that on an average by end of this fiscal year, the prices should be more than downward towards the pre-war level. So average, we have considered the same last year of 145 odd rupees. So on volume basis, we have considered a growth of 15%. So most important, I will say, aspect of Good morning, everyone. Tracking the growth will be to track the volume growth.

Okay, so when you are seeing 15% growth, year on year for this quarter we have grown only by 1%. So, we are still confident of maintaining the 15% growth guidance?

Yes, yes, because the new capacity which we have added in this particular fiscal year has just got operational. And it is slowly and gradually ramping up. It takes some time to ramp up probably another couple of months, and then it will have a higher level of utilization.

Okay. And so for the new facility, what would be the approval time from our clients for our products?

Generally, it is more towards supply of product on a standard design basis. So...

Ariel, Ariel. Sorry. Yeah, yeah. See, both the points. See, we are confident of achieving 15% volume growth this year, despite the first quarter being low on the growth, having just 1% growth, because this first quarter was full of uncertainties, because the local demand went down because of very high prices in the first quarter. And also, this volume growth in exports was not big, as Ariyant has explained. Only the prices went up and the margins improved. So, we could deliver better EBITDA. But going forward, we see that as the uncertainty on the price front subsides, the volume pickup will be back. And second part, as Eliane has said, that the new site will start contributing in big way in the second half of the year. So both these things will help us to achieve this 15% volume growth target. And as far as the approval process is concerned from the new site, it is no special or new approval is required. Our products are already approved by the customer. So whether we supply it from our existing plant or new plant, there is no new approval is required. We continue to enjoy that effort across our facilities.

Okay, sir. That's it from my side. Thank you and all the best.

Thank you. Thank you. The next question is from the line of Saakit Kapoor from Kapoor & Co. Please proceed.

Namaskar for this opportunity. Sir, firstly, thank you for a very detailed investor presentation, and my questions are all based out of the inputs that you have provided to us. I will just refer to the slide. But firstly, as Agent I was mentioning about, we are shifting the base from west to east, and that will result in delay of a few quarters, as mentioned. So, if one could first explain, and do we have our CEO, Rakesh G, or Dr. Tav also on the call here, or Manet, yeah, that's my point. Okay, okay, okay. So, firstly, on the relocation part of the story, if you could just explain to us, and then what will this translate into some rationale on that part?

Yes, so the biggest rationale beyond this is that there is an opportunity in East. As of now, there are no players in East, and we considered West only because there was a lot of players coming in West, and we had our warehouse availability in West. Now, post the elections, we also looked for better warehouses in East, and now we have started locating few warehouses over here. So, there is an opportunity. So, there is no time lost as far as the warehouse identification is concerned. Now, the timeline which is getting extended is only because the installation timeline will get delayed because of this. Second, as far as the project opportunity is concerned, if you see today, most of the bids which have gone in the market are all of low prices and everybody is now forfeiting, getting their EMDs forfeited, and those are going to be re-tendered. All the projects which were tendered are supposed to be getting into re-tendering, so there will be opportunity, so those projects are also getting delayed, and all this happened only because of increase in sell prices. So if you calculate both the things together, then practically we haven't lost the market, not the opportunity. It is only the timeline, which is, even if our plant was ready and there was slow demand in the market, our growth would have been slow. So, rather, we have used the time and we have shifted to a better base. Now, Bengal is an opportunity, and with Bengal government now coming up with their own industrial policy in the next five to six days, it will give us more leverage to shift our project over there and get the benefit out of it.

Oh, right. When we look at our EBITDA number, which you mentioned that historically, first time we have put it, and yet in 1 crore profitability, that is 3 giga mark. So taking into account the factors of the higher export for this quarter, do we see that there is a likelihood of maintaining the trend rate with the enhanced capacity also getting at better utilization and operating leverage kicking in the second half? How should this number, it should be trending for the remaining part of the year on a board pathway status?

See, currently the uncertainty is still there, specifically with the hormones and the availability of material and the prices specifically. So, it is very difficult to comment that how long this type of export business will continue month-on-month basis. As of now, whatever orders we have in hand, July is already over, August we are in, and we can comment up to here. As far as the overall conservative annual guidance is concerned, we continue to maintain that whatever guidance we have given, we will definitely surpass it given that first quarter has been a proportionate basis much better than what we expected.

Sir, on the export firm, can you comment for this quarter, this 330 odd number, which we have for the first quarter, with reference to the deliverables scheduled for Q2, are there a likelihood that these numbers we would be able to post, because we have already two-thirds done?

I have some protection in this number, because the prices marginally came down in the interim, in the month of July. And accordingly, the export have also comparatively will, as far as the average selling price is concerned, will be comparatively lower. So, from that perspective, I can only comment that 300 may not be the right number, but in terms of volume, last quarter, whatever volume we have done in this particular June quarter, the next quarter comparatively will be better.

Okay. So, coming to the tennis part, I think, so we did 52,163 for Q1. And taking into account the volume and the new capacity, what should be our run rate for this year?

We targeted 231,000 tons for this entire fiscal year. First quarter is lower, as Kothayaji explained, because of the... We have already incurred, invested already.

We have already done. So, for the year as a whole, what will be the balance amount, and I think, in the presentation, we have mentioned the addition of two cap capacities, SFR and another compounding also that will get kicked into. This will just explain the benefit of it.

Building our capabilities in east for medium voltage cables. So, as of now, we used to manufacture in west, and we used to get the material for the eastern customers. Now, we are building those capacity. It will be happening by end of this fiscal year or by first quarter, but investment is already committed. Second, HFFR, as we committed earlier, we are increasing our capacities and we target to increase it to 20,000 tons as we originally targeted for FI27. Now, these two capacities are being added. A new site is already located near Wapi, which will be built and developed. So, there will be some investment for that and then there will be investment in the best business. Overall, we expect the year's committed investment will be in the range of 150 to 175 Watt-Cruz.

So, to expect at WAPI, what are we trying to build energy of funds?

So, basically, we are trying to consolidate over there a few products. Today, we have in multiple plants or there are less capacities in terms of space to add more capacity. So, we'll... Accordingly, gradually, moves a few products in a new side, and the existing side will have a few products.

Sir, if time comes, can I add a few more and then join the queue? Yeah. Sir, interest costs have also risen. So, although we maintained a high price.

There was a sudden increase in raw metal prices in the month of March, and because of that, if you see the March inventory was comparatively higher, and the debtors are comparatively also higher. So, the immediate requirement of finance could not be driven by internal costs. We have to look for alternative source of finance, which is the working capital sources. So, that is the reason that the finance cost has risen. And now, from the month of, I will say, July, it has started slowly, gradually coming down.

And then on the debtor part and the cash conversion cycle, what is the number of days and how are these shipping up?

First quarter, you can understand the cash converser cycle comparatively went up because of the sudden turmoil and uncertainties. Now, it has again consolidated and it is coming down, and we expect it to be in the range of 55 to 60 days as we originally see on a regular basis.

Okay, sir. I am just referring to two slides, 23 number and page number 26.

Just a second, sir.

Yeah. Slide number 24.

I missed it.

At slide number 24, the...

24th, we have mentioned about this water-free retardant XMP insulation of cables. I think so. This was done earlier or this is something new that we are introducing and if you could explain to us what are we trying to explain to us

about this product earlier also. This is a product in the backseat for a long time, but we got an approval specifically for this from a German lab. A few, I will say one and a half, two years ago. And from that time, it is being presented every quarter in the presentation.

And in terms of the order booking or the customer orientation and revenue booking, we have not, as of now, booked any order for the same. How will that commercialization, how will it come?

It's a regular product. We are already supplying this product in good quantities.

Thank you. The next question is from the line of Bhargav Bhuddhadel from Ambit Asset Management. Please proceed.

Yeah, good afternoon. Good afternoon, and good performance. Sir, there has been a significant volatility in raw material prices. Is it fair to say that given our balance sheet, we would have gained market share, and as of now, also crude continues to remain volatile? So, can we assume that in FY27, there will be a good amount of market share gains as well?

I can address this question in a different manner that we have set up this Biwadi capacity to address to the, and rather target to increase our market share in the Indian market. Similarly, once the domestic market majorly will be driven by this Biwadi unit for the local customers in and around Rajasthan and Delhi. Some part of our capacities from West will be driven towards exports, specifically in Europe and as we indirectly supply for the U.S. market also. The objective is to increase the market share, and objective is to increase the overall revenue, considering that whatever product profile we are in, the medium and high voltage, there we have to also keep on increasing the voltage category over a period of time.

See, Aryan, I would like to add here, to whatever you have said, is that... In the last couple of concourse, we have always said that we are having lower market share in this medium-voltage SLP category, and that is where we see a possibility of increasing our market share, and that is why we went close to the customers in North by putting up a new capacity. And, of course, as Mr. Bhagavan said, that this uncertainty in the global availability and the pricing and logistic issue will help us. To fight in a better way against the imports. Local customers will now be more relying upon us. Compared to any overseas supplier, because supply chain disruption will lead to them coming to us in the last moment. So they would rather like to buy from us if we are able to offer the right product at right price point. And this uncertainty is creating both the situation where we are able to offer right quantity, right quality at right price point. So I'm in full agreement with what Samargo has said, that this will show an opportunity for us to capture the bigger market share, and we are right there with additional capacity with us.

And so, this plant in Vivadi, which you highlighted, are we looking at new customers as well, or will we be supplying to existing customers only?

We will be supplying to existing customers only, because, see, the CCV line, mostly the new customers are small ones. So, for example, the KEI is a company which has started a plant in parents. So the CV lines, they used to have 5, now suddenly they will have 10. So you are going to supply to the same customer because they have added capacity. So you will get more business from them.

Secondly, we were listening to a lot of industrial capital goods companies' conference calls, and they have been highlighting significant growth in exports to both the Middle East and U.S. in particular as well. So, is this a sort of a war phenomenon? You think there is enough traction here as obviously data center, AI, as well as power infrastructure in the U.S. is getting built up? So, the demand towards U.S. all of a sudden seems to be increasing disproportionately in terms of exports.

See, as far as we heard, the Middle East and many other markets, especially Middle East and U.S., they tried to build safety stocks. So, the order flow was quite strong for some point of time. The order flow was very strong for initial months of the war. Okay. Okay. Okay. I understand.

Secondly, the assumption, we have said that the realization which you are assuming is flattish on a YY basis. But assuming that crude remains maybe, say, around $85, $90, you think that there will be postponement of demand, especially in the domestic market, or you think that the inventory is so light that they'll have to press the button and start buying volumes?

I tell you, there are different segments which will be affected by the crude prices and some segments which will not be affected, and some will be affected at a later date. Generally, in capital good industry, what we see, the impact of uptick or downward tick comes a little later with the time length. So, of course, if the crude remains at an elevated level, then the project cost of everybody will go up, and then people might decide to slow down. Okay. But we do not see that happening at this point of time. That is one. Second, the prices will not be driven only by the crude prices. Prices will be driven by demand supply and the logistics cost. So, suppose, horribles are called tough. Then, despite crude remaining, first, crude will not remain at, say, 80, 90 or 100. It will definitely drop. But whatever you are hearing in the market, that despite almost opening, the lot of crude production has been lost. So, that will have an impact and will keep crude prices elevated. A short-term knee-jerk reaction can bring it down, but it will gradually go up. Now, if that happens, whether it will have the same impact on the polymers, I say no. Because again, demand supply and regional supply balances will decide and drive the trade flows and the pricing. And then in that case, I think we are at a right location. Because India has got enough capacity for polymers. So we would get our polymers probably at right price. And then we can export to the markets which are in difficulty from the logistic point of view and other aspects.

And sir, my final question is that obviously we decided to change the location from Ahmedabad to West Bengal, and Mr. Ariyant also highlighted that in the next five, six days, an industrial policy is also likely to get announced. So, given that the state has not seen a lot of investments since a lot of vehicles, and now there is a regime change, you believe that the government will also offer a good amount of incentives to attract manufacturing, and that could also sort out into our equinox in West Bengal because of Zandabas.

Yes, yes. If you see, they have already announced a lot of initiatives in the last, I will say, three months of time. One of the major initiatives is that there was an issue for any industry to think of investing where land availability was very difficult. One was the Land Selling Act and then getting the right documentation and right title of the land. What they have started is, for a large project, government will acquire the land, consolidate it, and give it to the industries. This is one of the initiatives they have already done before announcing any incentive policy. They are already working on incentive policy and there has been a lot of buzz in the newspaper and news for the last 7-10 days that it will be out by the end of August. So we are awaiting that policy before taking a final decision as far as the location. However, it is clear it will be coming to Bengal, where in Bengal is something which is getting finalized in the next 5-7 days.

Thank you for the pleasure and all the very best.

Thank you so much.

Thank you. The next question is from the line of P. Yogi, an individual investor. Please proceed.

Good afternoon, everyone. Sir, again, my question is regarding the growth target. I agree, there will be a Q1 disruption and we've grown because of better realization. But I'm asking just hypothetically, in our user industry, they are growing very fast. And maybe next year, do you think that this growth rate may be delayed from Q1, it could continue and our utilization could be much better in next year? Or just try to understand what's stopping the higher utilization, because our consumers are growing very fast. There is a demand everywhere. There is a strong investment power sector everywhere. And something is, we have capacity, we can supply to, just try to understand, is there each, we do have all approvals from our clients. So, do you think, what is good, what put the bottleneck, basically, because the industry is growing much faster than our growth.

Good afternoon, Yogi G. I would like to address the question in a bit different manner. Probably, you are seeing the number from the terms, in terms of revenue. No, no, no, no, no, no, no, no. In terms of volume, then it is collected by the volume also. So, we have given a target of volume growth of 50% in this particular fiscal year. In the photo category in which we are servicing to all the cable customers, they are growing at average 12 to 13% only. And they have given the guidance on similar numbers only. The additional 2-3% is only to ensure that we grab a better market share in Indian market as well as the export market. Why are they growing at 12 to 30%? The segment of transmission and distribution. When you talk about their overall numbers, it includes the wires, which is the house wiring segment. It includes the EPC business and includes the cables, which are beyond 220 or I will say beyond 672 kV segment, where as of now we are not supplying to them. So as of now, our segment is with them is three categories. One is the low voltage 1.1, 3.3 segments. The medium voltage.

Sir, our Q1, do you see our EBITDA pattern will continue at exit quarter or because this quarter we've grown because of higher realisation. So, will you see EBITDA per KGO pattern could be in similar range for fully?

As I mentioned, it is very difficult to comment such things amidst uncertainties. Today, if you see our order books are generally spot. And it is not beyond 10 to 15 days or probably 20 days. So we can comment probably up to August only. So July has been comparatively a good month. Minus the uncertainties which will come again in case there is the announcement which came last night that Iran is now considering no discussion up to 29 when there is a change in the president. Technically, if you ask me, it is very difficult to comment. We have to watch month or month.

Sorry, I completely agree. I am just trying to ask you, if you remove the volatility, there is one gross margin, what we internally decide, and one is obviously driven by volatility in the raw metal prices. It is generally

in the range of half 15 rupees to 16 and half 17 rupees, in which we are slowly and gradually quarter and quarter versus improving. The volatility, this is a volatility premium, technically, I will say, of roughly two and a half, three rupees, which have been gained in this quarter, which could not be two rupees, three rupees in the next quarter, it can be less also. But we cannot comment specifically on the figures immediately.

I completely agree. I just say, due to better product mix in future, can we actually inch up somewhere?

We are looking towards a better margin profile. And on a volume of roughly 50,000 tons per quarter, you can understand that 200 rupees also contributes to a very good number.

That's true. This is a final question from my side. Sir, in our DSS project, we would be competing with the EPC players, right? So in that, what is our mode basically? Because clients also see the historical traditions or any past track record. So how do we pass that criteria?

There are two things. One is reliability and credibility. We are in active discussion with a lot of existing customers in this segment. And since in the power industry, we are a credible player as far as supplier to cable companies. So that gives an additional added advantage or you can say edge over others. As far as moot is concerned, that will come over a period of time because once you enter into this industry, you initially supply the product to the customers and then slowly and gradually it's being a new industry. You understand the problems and you solve in a better manner. So that is an expertise as you can say management expertise. We have over a period of time in the cable industry, we have survived and become the most For the same objective we try and on a humble basis we need to target and to solve the problems of the customer rather than only supplying the product to them.

Sir, for backward integration, are we open for new JVs or any kind of investment?

Yes, yes, we are always open. We are always open. There is no closing on any opportunity. Whenever there comes an opportunity, we will explore and we will then look after whether the opportunity is worth going forward or not.

Thank you very much, sir. And all the best.

Thank you so much.

Thank you. The next question is from the line of Sakit Kapoor from Kapoor & Co. Please proceed.

Yes, thank you, sir. Just putting focus on slide number 8, wherein on the heading, what lies ahead for D-Day, wherein we have given the estimate. Now with our capacity at 3,34,400, we are expecting utilization levels in the vicinity of 70% for this year, sir, with 231 as our tonnage. Is that understanding correct, sir? Yes. Okay. And going ahead, sir, how will this number shape up for 28 in terms of the ramp-up that would happen?

So every year there will be some addition of capacities. As of now, the immediate capacity addition plan which was there, which have been approved by the board, have been presented and shared with the investors. And you can say every year we have been adding either capacity or dewater lagging towards the better product mix. And that is the same principle we are going to follow in future as well.

When we talk about the mix, this was, I think, the SLP has the highest contribution. So, we are going in the similar mix for the remaining part of the year also, that is, that 72 odd percentage number in your presentation, it was mentioned.

Yes, you can understand that we have added the capacities for XLP of 48,000 tons and almost 25,000 tons for PVC. So, proportionately, if you check, the XLP will always drive the growth, and PVC and other products will support it.

And, sir, when we look at your slide number 14, wherein you mentioned operating in five high-growth categories with 200 plus HQs, Under the Engineering Plastic Compound, Although we mentioned here that EBITDA margin is 10 to 15%, why is the contribution less from this category in terms of energy? If you could just explain, where do this engineering plastic product category fits in the whole profile?

Engineering plastics, if you see that as a product, it is much more complex than the age-old, I will say, anti-fab and PVC compounds. The only issue is that we don't want to stick into the commodity segment. We want to be there in the next segment where we can provide a solution to the customer rather than just providing a product. So right now we are into the lighting industry. It goes into many applications including automotive, lighting, FMEG, and many other segments. However, we are sticking to the lighting industry where we have worked for four plus years and now we have much more expertise and knowledge. And we are able to solve a lot of problems which are being faced by the customers. Though the volumes are less, but EBITDA margins in that particular product profile is comparatively good. And that is the reason we are still sticking to the industry. And whenever we find that this is a better opportunity, we will ramp up the capacities again.

And sir, when we mentioned peroxide, it is the PVC that you are referring to.

Sorry, sorry.

In your slide, you mentioned peroxide, slide number 20. So, peroxide is a PV system? Okay, so I'm just referring to slide number 21, wherein you have mentioned about BID and Lajistan, 24,000 for styroplast and 24,000 for peroxide. So what is the differentiation?

I think low voltage and medium voltage. One more point.

Yeah, in the, in the TANGE part, I think, sir, for slide number 8, we have mentioned TANGE at 334, 400, wherein, yeah. Okay, but in terms of addition, we are, we have a different number.

And that is up to this end of this quarter, June quarter.

Right, right. So, by the end of the year, we will be reaching the 334 number. That is what the capacity addition will be done. Right, sir. Thank you, sir, and we hope that we continue with this format, sir. This gives a lot of insight and understanding into how to read into the business and the management outlook. And going ahead, we wish the best to the team, sir, and all the best, sir. Thank you.

Thank you. The next question is from the line of Alok Vakil, an individual investor. Please, please.

Hello, sir. Thank you, and congratulations for a good set of numbers. Sir, in continuation to further a statement you did about supply chain disruption, is there any possibility of anti-dumping duty or BIS standards on XLP, HFFR?

As of now, there is no anti-dumping duty investigation in any of these products, nor there any discussion as far as BIS is concerned on the compounds. Yes, BIS has been implemented in few of the raw materials. Specifically for the polymers and PVC resin, but it is not there as of now in the compound section.

Okay, okay, sir. And sir, if I, sorry if I missed on to this, how are we going to benefit from UK FTA deal? Is there any scope or...

There are cable companies in UK and other countries as well. So, like EU, when you talked about EU FTA, we specifically mentioned in our commentary. So, there is a lot of opportunity in the European region.

So, let me add here. UK, we do not have any direct export exposure yet. So, with this UK FTA, now what has happened at Indian companies, cable companies, have started exploring that market aggressively. So, if they achieve business there, then definitely that in turn will get up indirect export business to UK. And then Indian cable companies are really targeting UK market aggressively. But the European Union FTA will have a direct benefit to us, because we are already exporting to a couple of customers good quantities in Europe, and the moment the duties come down, it will increase our competitiveness. Okay, sir. Thank you very much.

Thank you.

Thank you. Ladies and gentlemen, due to time constraints, that was the last question for today. I now hand the conference over to the management for closing comments.

Good afternoon, everyone. This is N.K. Surana. I, on behalf of my entire team, thank each and every participant profusely, and I hope that my team was able to reply all the questions these participants had, actually. So, good luck to everyone, and God bless us all. Thank you so very much.

Thank you. On behalf of Go India Advisors that concludes this conference, thank you for joining us, and you may now disconnect your lines. Thank you.