Ddev Plastiks Industries Limited (DDEVPLSTIK) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to D. Dave Plastics Industries Limited Q2F527 Earnings Conference Call, hosted by Go India Advisors, LLP. As a reminder, all participants' 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. Looney from Go India Advisors LLP. Thank you and over to you, ma'am.

Good morning, ladies and gentlemen. On behalf of Koolia Advisors, I extend a warm welcome to all participants joining us today for the quarter 2 and first half of FY27, Morning Conference Call for Dave Plastic Industries Limited. We are pleased to have with us the Senior Management, Mr. Dave Surana, Whole Time Director and Chief Executive Officer, Mr. Radhesh Kothari, Whole Time Director and Mr. Ariant Bothra, Chief Financial Officer. Thank you, sir. I will now invite Mr. Dave Thurana to share his opening remarks following which we will proceed the question and answer session. Thank you and over to you, sir.

Good morning, everyone, and thank you for joining the second quarter half yearly for financial year 27's earnings call of Dave Plastic Industries Limited. On behalf of the board and management, I wish you and your families a happy Diwali and a healthy and prosperous new year. We deeply value the trust and confidence that our investors, analysts, and other stakeholders continue to play in Dave Plastics. Today, we will walk you through our finance and operational performance of the board. and after ended September 26, followed by the key strategic initiatives, business developments, and industry trends shaping our growth outlook. The results and the investor presentation have been approved by the board and are available on the stock exchanges. The global macroeconomic environment remains volatile, yet India continues to stand out as one of the most compelling structured growth stories in the world. The first phase of the India-U.S. trade pact has been finalized and is now in legal drafting, with both sides working towards its early completion and operationalization. India is seeking preferential market access and greater tariff stability to strengthen its competitiveness against peer countries. While the broad framework and key issues are reported to be resolved, a few outstanding matters are still under discussion. Industrial companies continue to benefit from healthy domestic demand supported by a pickup in private capital expenditure, particularly in data centers and power transmission and distributions. Despite the ongoing crisis in the Middle East, companies are securing healthy order inflows, underscoring the resilience of the business environment. With strong TNDR transmission and distribution capex, robust order books, and capacity additions underway across the sector, players are well-placed for healthy executions ahead. Against this backdrop, the wires and cables segment continues to grow robustly, backed by strong demand, solid market positioning, and consistent execution, creating a favorable demand environment for their plastics. Near-term inflationary pressures are emerging, but both urban and rural demand remain healthy, and government support measures put further rate consumption growth in the period ahead. Importantly, India's economic activity remains predominantly domestic, which provides a degree of resilience during periods of global uncertainty. Over the years, we have mastered the science of converting polymer chemistry into high-performance solutions that empower industries, strengthens infrastructures, and enable a more sustainable future. Continuing this momentum, we delivered yet another strong quarter with robust revenue growth and healthy profitability. This performance reflects not only favorable demand conditions, but also the deliberate investment in strategic choices we have made over the past several years. Our export contribution has risen from approximately 25% in the previous fiscal year to 29% for half-year by 27, and it remains one of the main drivers of our growth. This progress is the result of strong execution across our strategic priorities and sustained investment in our growth platforms. Dave Plastics operates across five high-growth product segments, PVC compounds, anti-five compounds, XLT compounds, engineering plastic compounds, and HFFR compounds. With a diversified portfolio of over 200 SKUs, we serve critical sectors including wire and cable, construction, packaging, and engineering plastics. Our six manufacturing facilities located across West Bengal, Damalindu, Diwadi, Dadra and Agar Haveli give us an operational agility, scalable production capability, and efficient access to both domestic and international markets. At the heart of their plastics lies a deep understanding of polymer science application engineering. By combining technical expertise with continuous innovation, we develop customized high-performance compounds that help our customers improve the reliability, safety, and efficiency of their products across diverse applications. This solution-oriented approach has built enduring partnerships founded on trust, consistency, and superior product performance, and we remain India's leading polymer compounder. We remain committed to operational excellence, discipline, capital deployment, and creating greater value for our stakeholders and customers at every touchpoint. As the world expands towards electrification, renewable energy, and advanced infrastructure, we continue to expand the boundaries of material science from strengthening our leadership in specialized polymer compounds, In XLP to entering HFFR compounds, backed by discipline, capital allocation, and continuous capacity expansion, and a deep culture of innovation, each milestone becomes a catalyst for the next phase of growth. I would like to express my heartfelt gratitude to all our employees whose passion, dedication, and unwavering commitment drives our success and strengthen our culture of excellence. I also thank our customers for their enduring trust, our business partners and suppliers for their continued collaboration, and our bankers for their steadfast approach. Our growth philosophy remains disciplined, forward-looking, and value-creative. In FY27 and beyond, we will continue to expand capacities, invest in product innovation, move further up the value chain in higher KB compounds, and deepen our presence in international markets. Supported by 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 Rs. 5,000 crores by Fy30. Now I would like to invite Mr. Aryan, our CFO.

Thank you, Devdi. First of all, good morning, everyone, and outside, happy Diwali and happy New Year to all the members who are attending the call. For quarter to FI27, we are pleased to report a strong and resilient performance underpin by healthy demand momentum, disciplined execution, and the strength of our operating model. Revenue for the quarter grew by 44% year-on-year basis to 970-odd crores, driven primarily by robust traction in the wires and cable segment and a rising contribution from exports. EBITDA grew 16% year-on-year basis to 86 crores with a margin of 9%. This is a resilient result in the face of multiple industry headwinds, software trade sentiment, and ongoing geopolitical tensions in the Middle East. Based on the increase in average realisation, we have revised our annual estimates to I&R 3800 crores, making growth of 79% year-on-year basis for this year. Profit after tax was 52 crores, up 10% year-on-year basis, reflecting our sustained operational discipline, earnings quality, and ability to protect profitability across market cycles. For the first half, FI27 revenue grew by 36% year-on-year basis to 1968 crores, and EBITDA grew by 22% to 187 odd crores. FAT stood at 116 crores, up by 17% year-on-year basis. During the first half, we incurred capital expenditure of close to 79 odd crores, reflecting continued investment in capacity expansion, supply chain capabilities, and future growth platforms. Volume also rose to 102,000 metric tons as of September 2026. I now open the floor for questions and answers. Thank you.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touchstone 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 wait for a moment while the question queue assembles. The first question comes from the line of Archana Gure from IDBI Capital. Please go ahead.

Hi, good morning. Thank you for the opportunity. I have three questions. So, firstly, on the margin front, so despite healthy top-line growth in Q2, our operating margin looks slightly screeched. We understand that the robber's prices are volatile. But still, what's your long-term guidance on margin, sir?

Madam, thank you. First of all, good morning. As we have mentioned in the previous call, if you have been able to track the same, that last quarter, the prices went up substantially because of the increase in raw metal prices because of this new political tension in Middle East. The same trajectory remains. The prices are on higher side, and that has to be passed on to the customers. However, as far as EBITDA is concerned, we have always mentioned that we need to be tracked on an EBITDA per-term basis. When you see the EBITDA per-term for this quarter, we have achieved close to 17,000 rupees, which is one of the highest numbers as compared to the previous few years. If you see even the similar period for the previous year, year-on-year basis rather, the September quarter had close to 15,500 rupees, while the last full year average was close to 15,700. Last quarter, we mentioned specifically that there was some part of what is premium we could get in the export market, which is not sustainable, though some part of it was spilled over in the month of July and part of August, but not for the entire quarter. So, that is why the average is stood at close to 17,000 rupees.

Okay, okay. So, Aryanji, earlier we were talking about, you know, crossing that 10% mark. So, I understand the current scenario is not usual, but then should we stick to that kind of number, let's say, a year down the line?

Yes, we expect once this war subsides, the prices of raw material will also come down on a reasonable level. And once that happens, definitely the percentage number will improve.

Sure, that was helpful. Secondly, on the international business. So, for H1, the contribution from export was at 29% of total sales. So, we do see this number in near future, and my follow-up on this on margin, compared to the domestic business, what kind of operating funding does export have?

So, firstly, our focus, our, I will say, contribution majorly is driven towards expanding our geographies. So, definitely the percentage here and there may be different, but the point is our focus remains to expand our geographical territory. So, export will be a driving factor, and we expect definitely as far as volume terms, it is going close to 30-plus now, and on value terms, it will remain above 25% or probably near to 30%. Now, when you talk about margins, definitely export has a couple of percent better margin at normal times. Right now, the freight rates are higher, the transit time is high. So, we are comparatively losing that margin for a quarter or so, probably. But we expect that, as we have seen in the past, that once this problem of Middle East war subsides, the healthy margins, which is better margins as compared to domestic, will resume.

Sure. And maybe lastly, you know, the management has reiterated to be the 5000 mark by FY30. But if you can just guide us some more on, if you add up VHS contribution, I'm sure that number will be way higher. So any thought on that? Where do we see day plastic by 2030 including VHS?

So this 5000 nautic crores is purely from the compounding segment. And that too, we estimated at an average utilization much below what we have been achieving in this current financial year. So, we expect that we will be able to achieve 5,000 odd crores from our existing business even after the prices are neutralized after this war.

Yeah, but I was more, you know, can you guide us? Because you have more understanding on where do you stand on BHS. So if that part of the business is taken into consideration, whatever

Congress will be over and above this.

Including BHS. Sure. So, that was helpful. Maybe, you know, I'll again join the queue for further questions you can have. Thank you.

Thank you. The next question comes from the line of Shrey Gandhi from Anant Reddy. Please go ahead.

Thank you for the opportunity. My question is regarding the utilization of the plants. Like with install capacity now at approximately 3.16 lakh, overall utilization has dropped to 63% from 81 in last year. So, how are we going to ramp up this utilization and how can we expect the incremental ROC, ROE over the next one, one and a half years?

What is the reason for that? Mr. Gandhi, thank you for your question. Generally, if you see, whenever there is a new capacity addition, the average utilization initially may come down, and that is what is happening. We have added a good amount of capacity in PVC and good amount of capacity in XLP in the last fiscal year and the current fiscal first half, rather in the month of May, up to May. So, if you consider the same, the ramp-up will start majorly post this festive season is over. As of now, we have been operating roughly at 25-50% of the capacities. And now, post festivities, the demand picks up and XLP specifically starts getting sold post monsoon, because during the monsoon, the cable laying does not happen on a stronger footing. So we expect the ramp up will start from November mid to November end. And we'll have more than, as we mentioned earlier, we'll have close to 50% capacity utilization of the new plant by end of this fiscal year. So that will improve the overall capacity utilization.

Okay, got it. And the second question is on the EBITDA margin trend. Could you help us understand how much of the margin is contribution, compression is attributed to product mix or raw material pass through land? And more importantly, what is the sustainable EBITDA pattern which we are transiting for next two, three years?

So, I will be taking the second first. So, our average EBITDA pattern which we have been highlighting to all the investors is in the range of 14 to 17 rupees. Even better times, we can achieve better than that also. Right now, we are very close to the top end, the 17 rupees. And we expect this is because of the war risk premium we have been getting for the last two quarters. The average GBTA is higher. The last year's average was close to 15.7 rupees, which is, I will say, a good benchmark for us to target and achieve on an average basis for the full year better than that. So when you see the product mix contributing more towards it, it is the XLP. Because other products are comparatively low margin and low revenue, a major revenue is contributed by the XLP segment, and that is one which drives the overall markets.

My last question is on the new vertical which we are planning to enter, the best vertical, so I just wanted to understand what will be the difference between the core polymer compounding business and the new vertical going forward, and is there any key milestone right now, any conformed orders, or what will be the expected margin going forward in this particular segment when we look at FR-20 to FR-30 timeframe.

Can you please repeat the first question?

What will be the product mix between the core polymer business and the new vertical whisper planning model?

So, both are different businesses all together. The product mix in the first category is mainly driven by the XLP segment and followed by PVC compounds for wires. And that will remain the same way. HFFR, we consider as part of the similar story. It can replace PVC and it can have its own basket as well. So, definitely the third basket which is growing is HFFR segment. So, this ratio probably of XLP-PVC-HFFR will be close around and the product mix will be similar. Can you talk about the other product basket, which we are going to start over a period of time? As of now, we haven't decided on the product mix. We are working on it. And as far as if you see the overall milestone basis, so currently we are at the construction stage. We haven't been able to complete the entire project as of now. So, once we go live, then we will be at a better stage to confirm you the important milestones. And till the time we go live, we are not going to get our secure orders because it is an industry where cycle, the sell prices cycles are moving on a very volatile basis. It is better to have your plant ready first and then go for the order. We are planning for next year because we were waiting for the state government's incentive policy, which has been just announced in the last week. We are reviewing the same, and based on that, we will go ahead with our full execution once we are done with the assessment. So, probably by next financial year, first quarter or so will be the right time to start the product.

Got it, got it. Thank you so much, and wishing you and your entire

team a happy Diwali and a happy New Year. Thank you. Happy Diwali to you and your family as well.

Thank you. The next question comes from the line of Jainam Ghilani from Swan Investments. Please go ahead.

Hi, sir. Festive greetings to the team, and thanks for this opportunity. Sir, my question is that earlier in our call, we are maintaining a guidance of 10 to 15% volume growth. But in the first half, we've done only 1-2% volume growth. So, do we still maintain that volume growth guidance? And do we expect that in the second half, our volumes could grow by almost 15-20% or we tend to decline our guidance for volumes?

As of now, we haven't changed our volume growth guidance. We continue to maintain the same. The first half have been impacted majorly due to the war in the Middle East, where either the transit times have gone up, the export rates have gone up, or you can say there has been a lot of restriction in the movement. So that is one of the reasons why effectively there has been comparatively not major growth in the first half. And then, if you see on any year basis, the first half remains heavy on the monsoon, where the cable laying is not on a major basis. They hardly get a couple of months to function that way. So, it is the second half which drives the volume growth for us and the revenue. So, we continue to maintain the same.

Okay. And so, for HFFR, we are planning to double our capacity to

20,000 tons by the end of the year.

So, what would be the approval cycle for the same, and how do we see competition coming up in the Indian markets for the same?

Good morning, HFFR. We are already, with our existing capacity, we are seeking approval from the customers, and then that process is continuing. So, new capacity, what we will add, will basically be used to produce the product which are already approved, and for the customers who have already approved our products. So, the product approval cycle is already on, and as we go ahead. The demand for every approved product and from every customer who has approved our product will keep on increasing and that is why we are adding capacity and we are adapting this capacity.

Okay. Got it. And so what would be our CapEx guidance for FY27 and FY28, please?

Aryan? Sorry?

CapEx guidance he is asking for. So, current year, we have overall CapEx guidance of 175 Watt-Gros. And next year, probably another 50 to 70 odd crores is already coming.

Okay. That's it from my sister. Thank you, and happy daywali to the team.

Thank you. A reminder for all the participants, in order to ask a question, you may press star and 1 on the touchtone telephone. The next question comes from the line of Arya Shah from Whitestone PMS. Please go ahead.

Hi, sir. Am I audible?

Yes, you are.

Thank you for the opportunity. I have two questions regarding the best segment. So, so there's increasing competition in the. Battery, storage, system, SMB, how sustainable are the company's realisation levels, and what revenue per gigawatt does the management consider, on a conservative estimate?

Thank you. First is, Definitely, the competition is coming up in a strong way. However, the current demand and supply scenario, if you study the country, the demand is more than 50 gigawatt hour per year. The capacity which is available is less than 10 gigawatt hour. So, there is a huge gap in that respect and that the government's guidance, they want to implement close to 222 gigawatt hour by FI30 is a very strong guidance. To maintain that, we need a lot of capacity in the country to come up. So, that is one thing. Government is also constantly focusing on this particular endeavor and allocating a lot of funds. You must have seen the recent BGF announcement, other announcements. So, these are few of the drives which government is pushing to make this business. Successful order for all the competition people who are coming in the industry. And as far as revenue guidance is concerned, see, currently the prices prevailing in China and India is close to 80 to 85 dollars per kilowatt hour. So, probably in terms of one 5 megawatt hour container, it will be close to 4, 4.5 watt crores delivered in India.

Okay. Thank you.

I'll come back, Nakeem. Thank you.

Thank you. The next question comes from the line of Karan Kubaria from an individual investor. Please go ahead.

So, my question is, do you maintain the guidance for the further growth for FY27? I am talking about the top line and about the margins. Will it recover back or not in the further quarter? As you can still see the uncertainty going on. Do you have the capacity to pass on the cost to the clients? This is, these are the, these are my questions.

Okay. So, if you see our guidance, as far as revenue is concerned, we have revised it upwards to 3800.cro. from 3340 because of the change in prices which have been continuously for last two quarters. We have estimated at roughly 150 or 2 rupees and the prices are prevailing at roughly 190 plus. So, we have definitely considered the same and revised by 30%. To 3800 odd crores. So, that is one part. EBITDA, we have already given an estimate of close to 360 odd crores of EBITDA for this particular FI. And if you see the actual numbers, we are in track on the similar numbers. So, we continue to maintain the same. We continue to target similar numbers. So, probably I have been able to address your question.

Thank you. Thank you.

Thank you.

My question is on cash flows also. In H2, FI27 will it increase positively or not for the future? I mean, the next two quarters and

about

the debt to equity, the remaining 0106, I am seeing. I don't know it is the old one or not, but then also will it improve more or not, on any debt you are taking for the short term in future, please guide on this.

So, your question was not clear to me completely, but what I understood is, you want to understand that whether we will be able to achieve the balance targets in the two quarters or not, and what would be the debt position or so. So, when we say the annual estimates have been revised to 3800 euros from 3340, we have definitely considered the average increase in the prices as well as the volume target we have considered. So, yes, we are confident that we will be able to achieve very close to the numbers we have targeted. And as far as debt numbers are concerned, you can see that they have already come down from a level of first quarter to second quarter. It has already been close to half. Rather, if you see the net debt position, we have been maintaining a positive net debt position. We have hardly any debt in the books. It's all indirect creditors and everything which is there. So, on a debt level, we have hardly any major debt in the books. And the current finance cost which you see in the last quarter, September quarter, we expect that this is the peak for the current fiscal for a quarter.

Okay, in the last question from my head about the exports, are you going to increase your exports for the future growth?

So, yes, we are focusing

constantly on increasing our geographies, and that is the reason export numbers are showing an upward trend, and that will continue to be our focus. Prices, once are rationalized, the number may come down on an average basis, but in terms of volume, our focus is towards increasing our exports and geographies.

Okay, thank you.

Thank you.

Thank you. The next question comes from the line of Apoor, an individual investor. Please go ahead.

Yeah. Hi, sir. Thank you for the opportunity. So, my question is, our current EBITDA pattern is of around 17,000 rupees. So, is it sustainable or once the price comes down, the EBITDA pattern will also come down to around 14,000 or something?

So, there is a broad range. We have been always mentioning of 14 to 17 rupees that this is a right EBITDA range. Now, some quarters, it may be beyond that also. Some quarters, it may be closer to those numbers. So, that all depends on the geopolitical scenario, the other scenarios and everything. Right now, if you ask me, on both the sides, the import and export side of trade trades and transit trade, both are on the highest levels, I can say. And that is the reason why we are witnessing, to some extent, war risk premium for the last few quarters. So, once this war is subsiding, or rather, like we have seen, the U.S. midterm elections is over now, and to some extent, there is some sort of normalcy. We cannot say how long it will be there, but definitely there is some sort of normalcy. We expect the freight train to neutralize, and then the... Prices and EBITDA margins will also be on a stable level. So, roughly, we can say that you should keep the range of 14 to 17 rupees as a benchmark.

Okay. Okay, sir. So, that's it for Mike. Thank you.

Thank you.

Thank you. Anyone who wishes to ask a question may press star and 1 on the touchtone telephone. The next question comes from the line of Tinku Moni from SMIA Investment. Please go ahead.

Yeah, have I heard it?

Yes, you are.

So, my first question is that export-related growth was on what basis had added on any market or onboard or any new client internationally. And my second question is that what is the percentage rate on international market and the Indian market and can you tell me the percentage and what would be outlook for FY27 and FY28 keeping in mind to the contribution?

Thank you. The export is given by both new markets and new customers. It is very difficult to mention how many new markets and how many new customers have been added to this portal. This is a continuous exercise wherein we keep working with a lot of new customers every time. So, overall, I will say it's an overall journey, and sometimes new customers will be added, and the old customers will be having their own differences and issues. Like, today, you can see the Middle East, where few of the customers are witnessing complete blockage of material. They are not able to receive any current materials. So, there, probably, the customer will be hardly receiving our material this time. But there will be a few other customers in the other region who are getting the material. So it is very difficult in terms of numbers and geographies to comment every time. But yes, the focus remains on exports. The margins are a couple of percent better in exports. And that is the reason it is driving us to look for other alternative markets even. And as far as the current target is concerned, we have already revised it to 3,800 crores, and we expect that once the prices subside, then next year, with volume growth, we should be somewhere closer or at least 10% better than this.

Okay, and the margin will be sustainable?

Yes, margins, as I mentioned, we will have to track the EBITDA pattern margins of a range between 14 to 17 rupees, and that will be a sustainable margin.

Okay, that's all. So, thank you so much.

Thank you.

Thank you. Anyone who wishes to ask a question, may press star and 1 on the touchtone telephone. The next question comes from the line of Nikunj Doshi, an individual investor. Please go ahead.

Yeah, hi. Good morning. Actually, till last quarter, like, we were very positive on BESS project, and we were concerned of starting in H2 of this year. And this time, we are totally quiet on the project. So, are there any technical issues that we are facing or any delays because of which we are totally going silent on the project? So, good morning. We have mentioned in the last quarter itself that it will be operational by end of this year or by the first quarter of the next year. And since the state's incentive policy got delayed by a quarter or so, we can say that we wanted to understand the policy and accordingly wanted to take up this project. So, now the policy has been announced on 5th of November and we are working on that policy. Once we have finalized and applied and then we will take up the next steps. So, there are technical issues or any issues that you are facing in the project, hopefully. No, as such, nothing as such, because we were waiting for the state policy to come. And secondly, on the other expenses, if you look for the current quarter, it's like significantly higher as compared to the same period last year, and even sequentially also.

So, are there any one-offs in the current quarter in other expenses?

Not one-off, but the export rate, as I mentioned, has gone up substantially. But there are regions wherein the export rate was hardly $10 to $20 per ton, which is now standing at $300 to $350 for $2 per ton. So there is a huge gap of export rate which has gone up, and that remains the highest expense head in the books for this quarter and for last quarter as well. Okay, okay. Yeah, okay, that's it. Thanks. Thank you. Thank you.

Next question comes from the line of Sakit Kapoor, from Kapoor & Co. Please go ahead.

Yeah. Namaskar, sir. I hope I'm audible. Yes.

Namaskar.

In terms of the tonnage part, you have already articulated that we have revised our target in terms of the turnover because of the higher realisation. I think so, 1 lakh odd number we had the tonnages for the first half, and taking into account the DVD ramp-up, how is the tonnages going to shape up for H2? And secondly, 29 to 30% was export. So, taking into account, what is the current order book pipeline for export, or how do we, what is the time lag between booking order to execution for export?

So, I will take the first one, and I will request Photography to take the second one. When you see the first... The number, specifically why we have revised our annual estimates, the average realization was coming close to 190 rupees for the first half of the year. And when we estimated the revenue, it was close to 150 odd rupees. So that is the reason we have revised the estimates. And the numbers we have achieved close to 1,002,000 tons, and we have estimated earlier was close to 2,30,000 tons. So, we expect the balance of quantity should come in the year, being the major driver generally. And for the... Good morning, everyone.

The market has been volatile in the last six months or rather, I will say, since March, and it will continue to remain volatile because, as Sakheji asked, what is the time length between you getting the order and you delivering the cargo to the customer? It is totally uncertain and totally unpredictable because sometimes at a particular destination, the transit time is, say, two weeks, and then to the same destination, your next event can take four weeks. Because the roots are not stable, and because of that reason, and even the frequency of the connecting vessels has gone down, so that is what is proving a little challenging for increasing the export at this point of time. But still, we are maintaining our presence to all those markets, and hopefully... I'm a nation. of this quarter or early next quarter.

Sir, when we look at one of the impacts in terms of the finance cost and the trade cost, I think so, even taking that, sir, do exports envisage. A higher margin than the domestic? And what is the environment for the domestic player? Are there not sufficient demand that we can cater to the domestic market rather than focusing more on export? Or is it the developing of the market for export that we are pitching the product and keeping ourselves relevant there? So, because of so many reasons, yeah.

You see, there are too many variables. In fact, local demand, say, for example, during the second quarter is generally the lean season because of monsoon. Okay. So in the second quarter, the monsoon had an impact on our volumes because domestic demand was not so strong as it should be. And export market was also not so strong because of the longer transit time and higher seaf rate. So once you look at the higher seaf rate, it hurts your viability when customer is comparing the DDP prices. Okay, because our FOV goes down, our net back to ourselves go down if the sea freight is high. So that had an impact, but these are all temporary impact. As you can see that in the first quarter, we had a better margin, better profitability from the exports because people were ready to pay war premium despite having higher sea freight. Okay, despite having higher landed costs, people wanted to cover material. So the war premium was available. The second quarter was a little wait-and-wash quarter for all our customers in the export market. And we see the normalcy to recover, normalcy to come back by end of this quarter or early next year.

Okay, sir, factoring these aspects, then the EBITDA margin trajectory that we have hit, I think, 9% for Q2, which was, I think, 11%, 10% was for the first quarter, 9% for the second quarter. So this should be the bottom now, and margin should look up with the ramp-up of capacity and the cost absorption from the new units, sir, or what should be?

See, we expect the prices to be topping now, and that is the reason we expect, yes, to some extent the percentage should be the base now. However, I will always suggest and request to consider EBITDA per ton as the right parameter to tracker instead of the percentage, because the prices will keep on moving here and there, and that will distort the percentage numbers.

Okay, and that number also should be sub-16,000, as you mentioned, that last year's average, it should be based on that.

Yes, we are trying to keep it as a benchmark.

And now, sir, what are the contributions from the new incumbents? I think so, Aditya Builder Group has also poured into the wires and cable segment. So, what kind of demand are we getting to them and what is their pie in the total share, if any? And they outtook thereof to them.

Sorry, let me respond to this. See, it will be difficult for us to give you customer-specific data because there are certain NDAs we are governed by. But if you look at our PVC compound numbers, you will be able to see that we have been able to capture some growth which is coming through the building wire industry. So, you will see the improvement on our PVC compound side, the second quarter numbers, and even overall first half numbers, if you compare with the last comparable period, you will be able to see that growth.

Okay, but the new player is ramping up its capacity, so that much understanding you can give?

Yeah, yeah, yeah. See, the growth which has come has definitely come by addition of new customers.

Okay. And lastly, sir, on the cash flow part, we have given under the cash flow, the tax paid and the net of refund is closer to 34.78 lakh. So can you give the breakup of what have been the advanced tax for the first half?

So, advanced tax is the major number, close to 26, 27 odd crores, including TDS, and balance is the tax for the last year.

And lastly, sir, I think you did mention about the freight cost and other stuff. Finance cost is also a function of this export, having set at 29% of the revenue point, what has resulted in this higher finance cost at 11.5 crores?

Yeah, see, though it is finance subject, but let me, see, the common point is that the cost of per unit which we are producing or we are selling has gone up by, I mean, more than 20%. So inventory holding cost or even funding the debtors for the same duration, the cost has gone up.

Yes, as rightly highlighted by EcoBarrigy. So, if you can see, the data's numbers have gone up to close to 650 plus from a level of 400. And similarly, inventory level from roughly 250 to

260 crores to close to 400.

That is something where the major deployment is. And if you see over the last average number is there, the closing number is there. But if you see the last six months on month-on-month basis from our numbers, then it had a higher peak. And slowly and gradually, the inventory numbers have been now rationalized to a lower level as compared to what it has. It went up close to 500 plus as well. And similarly, the data also have got rationalized and slowly and gradually, it is getting further rationalized. With prices expected to come down, I think it will give a positive impact on both sides. It will reduce the working capital and it will reduce the finance cost as well.

And what is the net cash, sir, on the book?

We have more than 100 crores of cash available and 67 crores was the net. So roughly 35 crores was net cash available to us.

Okay. And lastly, sir, under the current assets, the investment value has gone up from 15 crore 31 lakh to 37 crore 37 lakh. So what has been the classification for this 20?

It is mainly in mutual funds.

Thank you.

Thank you.

A reminder for all the participants, in order to ask a question, you may press star and one on your touchtone telephone. The next question comes from the line of Shreya Gandhi from Anantarithi. Please go ahead.

Thank you for the opportunity again. My question is in continuation with the previous participant. Attractables are increased by approximately 115 CR in this half yearly. So, is this due to higher exports or any longer credit period we are offering to the customers? And what is the targeted cash conversion cycle going forward?

So, if you see the average selling price, which has gone up from roughly last year's average of $145 to $192 in this particular first half, it is driving the data's numbers. So, even for that matter, I will say the month of March had seen some sort of higher number also. So, overall, this increase of more than 120 odd crores and probably considering both inventory and all other things, which has also taken a considerable hit. It is mainly driven by the increase in prices. So once this, the cash conversion cycle remains the same, but the increase in prices on both the side, the RM and the sale side, is leading to the higher number.

Got it. And just to follow up on the price point, what is the typical pass-through like which we are offering, we are experiencing right now, and how do we plan to protect the EBITDA pattern in the scenario of volatile prices?

So, we have been always a cost-plus supplier to most of our customers, and we pass on the prices immediately with change in prices. So, technically, the maximum lag which we face is 5 to 7 days in terms of any contract. In the domestic market. And as far as export, it is generally a spot contract, and long-term contracts are hardly any with us. So, we hardly face major price risk. It may be in the range of 15 to 20 days for export as well.

Got it.

Thank you so much.

Thank you.

Thank you. Ladies and gentlemen, we will take this as the last question for today. I now hand over to the management for closing comments. Over to you, sir.

Yes, thank you. A few important pointers, just wanted to mention that. Firstly, we are right on track to achieve our projections of 5,000 crores by 530. On domestic front, the domestic demand has been resilient and will improve further starting this quarter. On the export front, the Middle East has posed certain challenges, certain headwinds and tailwinds at the same time, with the shipping charges have gone high, so we are navigating through that, but also at the same time, there are more opportunities in newer markets where cable customers are trying to find new suppliers, so we are right there, ready with our certifications and products to serve them. So, we are going forward. It's a combination of headwinds and tailwinds, and we remain resilient and growing to achieve our projection. Thank you, everyone.

Thank you. On behalf of Dave Plastics Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.