Time Technoplast Limited (TIMETECHNO) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Q1FY27 earnings conference call of Time Technoplast Ltd. hosted by Kavira Securities Private Ltd. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone. I now hand the conference over to Mr. Abhijit Mukesh Purohid from Kaviraj Securities. Thank you, and over to you, sir.

Thank you. Good evening, ladies and gentlemen. Kaviraj Securities welcomes you all for Q1 F527 earnings conference call of Time Technoplast Ltd. We have with us the management team, which is represented by Mr. Bharat Kumar Vageria, Managing Director. Mr. Naveen Jain, Old-Time Director, Technical. Mr. Vishal Anil Jain, Non-Executive Director. Mr. Sandeep Modi, Senior VP, Corporate Planning and Accounts. Mr. Heman Soni, Legal and Corporate Affairs. Mr. Baumeen Shah, Manager, Investor Relations. Now, without any further delay, I hand over the call to Mr. Bharat Kumar Vagiria for his opening remarks, post which we could open the floor for Q&A. Thank you and over to you, sir.

Good afternoon, my esteemed investors, respected members of the board, valued stakeholders, and thank you, Mr. Abhijit, for the gracious introduction. It is a privilege to address you today as present our financial and operational performance for Q1 FY2027 and share our outlook for the remainder of FY27 full year. Update on the current geopolitical situation. As we all are aware that global market continues to navigate the geopolitical uncertainties during Q1 FY27, which started on 28 February. Then last quarter, March month was there. Particularly development in the West Asia and ongoing Russia-Ukraine conflict, which is continuing since last three, four years. This contributed to volatility in energy and the raw material markets, which is the main input to our 75% product, which is called as the polymer products. The polymer prices witnessed significant movement during the quarter, and our predominantly B2B business model established pricing mechanism, enable us to effectively manage input cost fluctuation and maintain operational stability. Because of B2B business, we are able to pass on price increases to our customers with the time gap of 30 to 25 days. At the same time, India focus on strengthening energy security, expanding gap, gas infrastructure, and accelerating the adoption of the cleaner energy solution continues to create significant opportunity across our portfolio. We remain encouraged by the growing momentum in composite-based applications supported by the approvals received for Type 3 and Type 4 hydrogen cylinders, ongoing development of higher-capacity solutions for hydrogen applications, and progress towards the commercialization of 14.2 kg composite LPG cylinders. The recent HPCL, Swiggy, Stomart. Pilot further validated an advantage of our lightweight composite cylinders for the modern LPG distribution and the last mile delivery application. Supported by these structural growth drivers, our composite product business continues to deliver strong performance and remain one of the key pillars of our long-term growth strategy. Our composite product segment emerged as a key growth driver during the quarter, delivering a growth of about 29%. Precisely, it is 29.3%, making a significant contribution to overall business performance, supported by sustained demand across our border composite portfolio. Most importantly, our profit after tax registered a growth of 22.2%. Underscoring our continued focus on the operational excellence, capacity optimization, cost efficiency, prudent financial management, our disciplined approach towards the controlling finance cost and the improving operational leverage continue to strengthen profitability in the shareholders' revenue creation. We remain highly optimistic about the opportunities ahead, particularly in the composite product segment, where the demand momentum continue to be encouraging. This is reflected in our robust order book of approximately 185 crores. In parallel, our valued product portfolio including IBG composite products continue to witness healthy market acceptance and the sustained growth. Our industrial packaging division has also maintained steady and consistent performance across the market. Further, reinforcing our growth, visibility, we are pleased to announce, confirm packaging orders of approximately... Rs. 400 crores for the current calendar year, spanning both the domestic and international markets. To achievement, reaffirm, strengthen our diversified business portfolio, scalability of our operations, and strategic direction we have pursued over years, as industries globally transition towards a cleaner, safer, and more sustainable energy and packaging solution, We believe our companies... Exceptionally well positioned to capitalize on their structural growth opportunities. Looking ahead to the FI27 and behind, we remain committed to accelerate sustaining growth, enhancing opportunity efficiencies, expanding our innovation lead product portfolio, and delivering long-term value for all our stakeholders. With this... Let us move to the detailed review of our financial and operational highlights for the first quarter of the year. I invite you all to join us as a take through the key performance, insight, and strategic development, shaping our future growth journey. The key figures are during the Q1, net sales, 1,694 crores as against 1,354 crores last year, same period. EBITDA-2 25 crores as against 196 crores. PAT after tax is 116 crores as against 95 crores. Volume increased by 11% which contribute India 10%, overseas 14%. Net sales increased by 25%, India 30%, overseas 17%. While on this figure, I just clarify you, my overseas business In the sales revenue for the January, February and March because overseas follow the calendar year. So January, February and March overseas business and India business apply in May and June. Therefore, you have seen the volume difference and volume difference of the overseas and net sales difference is only 3 percent, but India which is 20 percent because volume growth is 10 percent, revenue growth is 30 percent. And that gap is going to be continued because overseas follow the calendar year and India follow the financial year which is beginning from April. EBITDA increased by 15%, PET increased by 22%. The higher EBITDA growth relative to volume growth demonstrates the company's ability to improve profitability through effective pricing, product mix, operational efficiency rather than relying solely on the volume expansion. I am also pleased to share our overseas subsidiaries have delivered robust performance in Q1 FA27 despite ongoing global uncertainty. And I have received a commitment from my international team that its growth will be going to continue in the period ahead also. Share of the business, establishment product but the value of the product is 25.4%. Share of the Indian Overseas business is 65% versus 35%. 65% in India, 35% overseas. And overseas, 35% is also de-risk in the various countries, 10 countries we have present. EBITDA margin in Indian Overseas is almost above 13%. So India is 13.4%, overseas is 13.1%. Great Margin. Overseas is higher because of the tax provision in India is higher and less tax provision required in the overseas. So, pet margin in India is 6.5 percent, overseas is 7.6 percent. Net cash flow processing activity is 155 crores in this quarter. Net of debt was reduced by 90 crores this quarter. Total capex incurred during Q1, 75 crores, which includes 28 crores to the regular maintenance capex, capacity expansion, re-engineering, and automation for a stabilized plant product, and 47 crores to the valued product, IBC, and composite cylinders. I would like to draw your attention to a couple of interesting developments which has been seen. Most of the things I have given in my running presentation, which is loaded on the BSE and NSE side also, and the company side, but very quickly I will go through that. Despite the global war situation, FR26 performance target continued to remain strong momentum in Q1-27, and that is to be continued. So, come and be, remain well positioned to sustain growth momentum. And not sending any guidelines for the target. Because growth guidelines, volume growth, I am talking, revenue growth, depending on the prices of the input, which we don't know when the war will be over and the prices will be stabilized. But here, volume growth, as committed, will be above 15 percent. There is the non-corrected. I mentioned in that document also, but again, due to consolidation of the product, due to consolidation of the asset, the revised non-core asset is 134 crores, for which realization commons from Q1, and this quarter, 9 crores have been realized. Balance will, efforts will continue for realization asset by share of that. Focus on the Empowerment ROC, that continued focus will be there to increase 1.75% every year, and in the three years' time, it will reach to 24%, which March 26th was 19%. Acquisition update, I had given in my presentation, but yes, one small acquisition where the investment was only 25% completed, equity have been acquired, and now that... Your company which operates in Dhulia, especially for P5 products, is already, all plants have been made, all clearance have been observed, and from Q2, commercial production will start from that location. Another requisition which was announced was evident packaging. Again, I have put up my all financial figures reference to this company in this board meeting, but again board told me, let's watch it. Stabilize, prices should destabilize. Then only we'll come to know exactly the volume growth of that company which is acquired. Because revenue growth may be 25 to 30 percent on account of the prices increase. So when we will come to the sustainable EBITDA, only the world situation and the prices stabilize, because company presently do the business 60% export and 30% local business. And their export is also affected in nearby countries, mainly in the Middle East countries where they have export, but other countries they are continuing. So I have to follow my board guidelines, which again we will see after. Settlement of the war and normalize of the businesses. Subjective, that the, that opposite company also should accept our terms. Otherwise, we will again put in the next board meeting and we will take whether this fund which is lying in the general corporate purpose may be used for the other purpose in the company and other better opportunity if available. The conclusion of product and manufacturing units is continued as a part of this year. I am just once again clarifying you, the year 2526 and 2627 is the year of consolidation of the products, units, and do the capacity requirement after considering the automation. So therefore, these two years' expenses, capacity expenses is high, which includes the money received under the QIPB plus already projected finance, finalized prior to the QIPB. So, this year, 2627 and 2526, CAPEX will be in the range of around 250 crores, but later on, subsequent to 2027, CAPEX will be the normal CAPEX, which will be in the range of 200 to 250 crores to capture the 15% growth for at least next three years. The conversation of electricity unit, that is continued, as we have mentioned, that energy storage... So long, power is available. Before which the agreement has been signed, and this next year definitely certain new Because as per our current estimation, if wherever our company operates the states and all solar, that states clear the green power by way of a solar, then we can save more than 35 crores. The surplus power, government power itself is available, so will not allow solar power. But that we will update quarter on quarter, which are the states coming up for the solar energy. So then, every time, the best judgment can be taken. Products update, like hydrogen type 3, type 4, fire extinguisher, air receiver tank, batteries for power sectors. He's already developed. Another product development, higher capacity of 250 and 350 liters cylinder for CNG, casket operations, hydrogen operations, that will make our product more competitive. And as we get the approval, we will be updated to the market. We expect in the next 90 days, some of the approvals will be in hand so that we can reduce and our... What product will be more cost advantage compared to other available products? In spite of additional benefits available for composite products, lighter weight and long shelf life. Update on the LPG cylinders. Yes, we have updated time to time. And once again, because some of the new investors, you are not aware about how the requirement of the LPG cylinder in India, I just would like to update. In current... Positions also, around the 32.6 crore active connections are here in India, because most of the 70% backward rural sector still people are using the LPG cylinders. And further, 50 crore cylinders are in circulation, and it currently, this government is offering 5 kg, 10 kg cylinders, and for commercial applications, bigger size like 15 kg, 26 kg. And, as you have seen, recent development which has happened, especially which we have updated also, recent company received the order for 140,000 cylinders from HPCL. Further, immediately, HPCL has tied up with the swiggy stomach for the delivery, immediate delivery, and we all are aware that e-commerce delivery day by day is increasing. Nobody has a time to go to the... The collection centers and give the cylinders and get back. But if you are getting within 10 minutes, 15 minutes, it's 10 delivery, which will increase the business of the LPG cylinder. So it's a good development as well as LPG cylinder, and this development will be going to be continued by the other oil gas distribution companies also, like Indian Oils, then BPCL, all companies going to be have that following the other. Then, some of the specific products like CNG, higher capacity, 250, 350, I mentioned to you, going to get the approval that will reduce the cost of the products, and it will be more saving products for the end users. And further, As far as fire extinguisher, yes, very good market. Company is first focusing on the oil marketing company, refinery company, where the 800,000 units are required. Product is ready now, and it is now commercial under discussion, and you will hear the good volume of the business in the second half of this year. Composite air-receiver tank is the OEM business which every air-receiver tank used. In the electrical vehicle, all type of the buses and the trucks need the air receiver tank. So company has developed in-house air receiver tank, which is cost competitive compared to currently available MS tank, receiver tank. So it will give the... Lightweight advantage to all the OEMs, who are the bus manufacturers and the truck manufacturers. And for your information, I want to update. Every truck or buses need three to four tanks in one vehicle, whether it's electric, whether diesel or the petrol. So very large requirement in their sector, and that company has developed in-house by using existing composite technology available. Then, we have a subsidiary company, PowerBuild, already four products in the previous year, which is developed, E-Rickshaw batteries, power sector batteries, and another data center area, batteries, which is very large market. So, initially, for agreement have been tied up with the Monbat company in Europe, who is the battery manufacturers of the... And we all are aware that how the business data center is increasing in India, because there is a major business expansion where the energy storage equipment will be required there. So it's a good opportunity in that energy storage space. And that company is currently doing its business in the range of 125 crores, but projecting over 30% growth year on year for at least next three years. And where will be the EBITDA substance expansion will be there, which currently is 12 percent, and targeting to reach 15 percent in the next two years' time. Then project related, yes, we have given in our running presentation, but just half right, as I mentioned to you, the year 2526 and 2627 is the year of the consolidation of units in the product. Therefore, in the year, this 2526 company completed This is a fully automatic plant that is near Morai for the composite products and which again some of the investors are hiring and they can tell to their friends also who are the investors or they would like to visit the plant. The company is organizing, visiting to the plants in the western area, especially this Morai plant is the automatic plant, fully automatic plant and all the most of the equipment is imported only. The plant is commensurate the production. Completed. And I'll go. We will see the automation by using the robotic technology and similar automation will be carried out at other locations also in India and overseas. Then, further, we have done the Gumbhri Pundi near Sinai. The pipe production facility separately have been installed and operational already, so that existing spare space can be utilized and expansion of the round field for the packaging product because market demand is good as far as southern regions are there. Well, we have completed in overseas also, Georgia, the U.S., where the good demand is there, and I am glad to tell you, U.S. Capacity relations is above 90%. Companies currently operating in the five states and further six states are under implementation. Before end of the year, that plant will be finalized because companies looking after on the built-to-situ premises on the ready basis. So that will give the more opportunity for increased our presence in USA. Then further, as I mentioned to you, 26-27 is again year of consolidation unit and the products. Therefore, any aggressive plants have been taken. Therefore, the capex I mentioned to you will be in the range of 350 crores. And thereafter, the capex will be in the range of 200 to 250 crores, which includes maintenance capex of 100 crores, considering the size of the business and to capture the 15% growth. So, project of 2027 includes in Gujarat, Sanand, where company has already submitted, but plants is under approval. And in Odisha, again, the government allotted land, and the plants have been submitted for the buildings. As rains will be over, construction activity will be started. Chiploon, Maharashtra, looking after the infradevelopment and the chemical zone is in Chiploon. Maharashtra packaging products and PE products will be there. The northern southern region expansion of the ecotech recycling has the commitment given for the QIP funds which will be invested further and is similar to western region plant which already my investors will be able to see during their visit. Then Saudi Arabia plant is there, building almost will be completed in the next month's time. Then depending on the war situation, The machinery will be commissioned, and demand is already there, and some of the consolidation of the existing unit in the Saudi, further expansion will be carried out with 100% ownership of the time technoplast. Growth likewise, segment-wise, major segment packaging, yes, we consider growth of 11 to 13 percent in this year, whole year, and that is going to be continued. Composite products, growth estimation over 25 to 30 percent, focus is completely there, which has a higher margin also, then only the ROC and EBITDA margin will be improved. P5, yes, considered more than 20 to 25 percent growth, most of the business. P5 carried out. Almost, I can say, in the first half, 40 percent, 35 to 40 percent business in the first half always, and 60 to 65 percent business in the second half, considering the government guidelines, government projects. And the last quarter always in the P5 business is very high because otherwise, if the EPC contractor don't complete the project, government levy the delay charges from them and delay project charges. Other products, 10 to 12%, all combined put together considering growth of over 15%. When I am highlighting on the volume growth at the same time, I am very sure. Investors would like to understand the volume growth will be 50% and what will be the EBITDA and paid growth. I am very clear considering the automation, considering the power cost savings, considering main power cost reduction on account of the automation. I am very clear when the volume growth will be 15%, then definitely EBITDA growth will be 19% to 20% and paid growth will be 3% to 24% considering the debt repayment already carried out and the company considering the operational cash flow from the operating activity and the commitment provided already towards the debt obligation. And further, already company has considered a CapEx plan of the 350 crores this year. So, absolute EBEDA, as I mentioned to you, relating to volume growth. So, percentage, for the time being, till the bar subscription improves, don't see the percentage of the EBEDA, because prices are uncertain. Then, an EBITDA growth drive was very clear, increase in efficiency, consolidation of products and units, main power cost saving, power cost saving, finance cost saving, and... Realization of non-core assets which is already identified as the consolidation of the products and in it is going to be parallelly disposable action will also be taken. Thank you. One, my request, consider me a time short. If any, my investor has asked one question, others should listen properly. They should not request the same question. Right?

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 touch room 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 paid for a moment while the question queue assembles. The first question is from the line of Kumar Saurabh from Timecathic Investing. Please go ahead.

Hello, sir. I know Aarab.

Yeah, just a minute. Let me reduce the voice. Yes.

Yeah, sir. My question is on the working capital days. In the last few years, it looks like our working capital days are oriented and cash flow growth is also has been stagnant. So, will it change? That is one. And second, once we are done with this high capex cycle, I think the kind of growth we are having, we should be doing 600-700 crores of cash flows. So, how do you plan to utilize because we have done an excellent demonstration, sir, and congratulations on good set of numbers. We are almost getting debt free and we will be generating more cash. So, do we have some inorganic growth strategy in plan in the next two, three years once we start filing a cash? These are the questions.

Yeah, Swarup, I think you have a good question, but we are little conservative. First question is right, the washing facility, but you know the statutory requirement for the green energy we have to use, especially the packaging product. Now in India, packaging product is almost, if you, total packaging product is almost 75%. But packaging product, which we divided in two parts, India and overseas, then India, we have a 50%. So I consider in my overall revenue, around 35% is the packaging business. And out of that packaging business, we have to use 30% recycled material. And that also government has given certain exemption. The product which has already exported, no, you are required to compliance. And product which is going in the food and pharma companies also not required. So I consider washing line that is again even I need to pay cash buying material from the secondary market. To my agent to arrange the inputs for me because I don't buy that material on the credit basis. I have to pay cash immediately by money transferring their account. Then my agent will get the material. That material will come to my recycling plant. It's a statutory requirement. But I don't think that will disturb any way working after cycle time. I am coming out very important thing. My working after cycle time, prior to war situation, you see that December 2025, my working after cycle time reached 200 days. Which was disturbed at the time of the COVID period. And we have kept our target to reach the working of the cycle time of 90 days. How 90 days we considered? Very clear. 70 days is on account of the receivables. 65 days is on account of the inventories. That is called 135 days. 45 days is on account of the creditors we minus. Then the balance 90 days is our working of the cycle time. We ourselves have kept the target. In the last quarter of March 26, it is disturbed because of the raw material prices increased by 40 rupees, almost 25 percent to 30 percent suddenly in the March because of the West Asia war. So that, therefore, working of the cycle time increased to 115 days, which now you see already in this quarter where some prices have stabilized. Okay. Fighting reached to 110 days. Reducing. Again, you will see in the next quarter, it will further reduce. We are targeting ourselves. At the end of the year, it should reach to around 100 days. Come back to the original, which was in December. But yes, you ask me the three years down the line or two years down the line, definitely my target is 90 days. Now, you are right. You are asking, when company has a cash from the surplus fund, what to do? Very clear. When anybody is giving me the fund, once I have made the repayment of the debt, what to use this money? You know very well, most of the company, and I have always followed my guidelines of the valued investor. We have certain large mutual funds are there. We will take the guidelines of the board and our valued investor, and we will do the investment, yes, if any opportunity arise, where I can increase my more ROC, where the good value of the business we are getting it, then definitely the organic and inorganic growth, both are open for us. But yes, if a company surplus fund, that is, funds are for the investor funds and funds of the promoters for their share of the holdings only. Yes, because we can also see the possibility as time required to buy back the shares of the company at the right time, so that will also give the enhanced value to the my valued investor. But yes, we have to follow the certain guidelines of the SEBI stock exchange, what is the timeline, when we can do the buyback, so definitely 27 onwards. Definitely, we can consider this as fact. Further, company focus to increase the return, whatever profit earnings, paid earnings are there, certain payout ratio also will increase. So, I also invest an opportunity to see the other options available. At the same time, I am telling you, we have discussed. Yesterday in board meetings also, and further going to discuss in the upcoming board meetings, because we have come across so many other things also, where the products fitted in the company's guidelines, because promoter has experienced in this line, polymer products, polymer buying. Nationally, internationally, across the 10 countries experience. So, what other opportunity where companies can gain good value of the return of the money, and that also possibility will be explored in the period ahead. So, yes, as you are worried, we are also worried. Once, when companies don't have a fund, people have a problem. When the company has more funds, Then also the problem multiply. Because you have a fund, you have to invest it and give the return. So, definitely, we will take the majority advice from our investor and the board and do the best interest of the board. You got my answer?

Yes, thanks for the detailed answer, sir, and thanks for the great execution. Wish you all the best, and I would love to be part of the plan visit as reach out to the IIT. Thank you, sir. Thank you, sir. Thank you.

The next question is from the line of Karan from Guardian Capital Partners. Please go ahead.

Hi, thanks for the opportunity. So, last quarter, you had indicated that the volume of price increase pass-through would happen over the coming months. So, I want to understand how much of that has been passed on to the customers, and is there still a meaningful amount left to be passed on?

No, I'm just very clear to tell you. What is our pricing system? Because most of, I can say, 70 to 75 percent customers. Just for example, I am telling you, April, May, and June month, there was an increase, no downward was there. Only the downward started from July only. And July also, you know, these local manufacturers' prices change either Monday or Thursday. Why they do Monday? Because Friday, They used to receive the ICS report, the international reports. And on Wednesday, they used to receive the plates report. These are the two reports which these polymer manufacturers follow. So certain time, they see the market conditions, see their input cost, and they do their changing. But we don't change our weekly pricing. We do our pricing with our customers once in a month, and most of the customers have chosen the date between 8th to 12th of next month. So, whatever prices changes taken place, for example, in the month of July, will be effective in the month of August. August changes means between 8th August to 12th August. Up to 1st August to 8th August, business will continue as per the old pricing only. Whatever prices changes will come between 8 to 12, most of the customers finalize prices based on the July prices, and the business will be confirmed. Because every person needs every day. Packaging is a basic product for most of my customers. And one thing I am telling you, packaging is hardly 6 to 7 percent of their cost. That is not their main cost. That is one of the packaging is cost for their products. So, With the time rate of, if you sum up the three months, there will not be any difference in the pricing. And whatever prices increased, major price increase was. Taken in the month of March and April, which everything has been passed on, nothing is there. And that is, I am talking, relating to packaging product, which is 75% of total revenue and 75% business also in the two parts. Around 37% business is in India and 37% business is in overseas manufacturing locations. And for packaging business, quality is same, whether in India and overseas, because customer profile is also same. Many customers, more than 50 customers who are international customers, they are buying in India as well as buying in other countries. So we follow the same practice. And other manufacturers internationally also follow the same practice of the monthly practice. Available. That when the prices were down, we similarly passed on. For example, in the month of July, prices are down by three times. 10 rupees, 9 rupees, and 4 rupees. 23 rupees, polymer prices were down. But at the same time, you and we all know very well, again war started. Once they have agreed for a signing of the MOU, MOU signed. But again, it is reversed back. Then again, it started increasing. And almost 6 rupees further increased. Thank you. Plus 4, 23 rupees, 6 rupees, so net 17 rupees will be passed on in the current month to them. And similar, I am getting this price decrease from my local manufacturers also. And when we do the buying from the overseas also, We are keeping in mind what is the exchange rate, what is the current rate scenario, we always keep the contingency of 2-3% in our pricing system. So that will not affect our EBITDA margin in terms of the absolute figure. Now, 25% other products where we carry the inventory, I mentioned in my last call also, The critical product, high-value product, where EBITDA margin is in the range of 18%, like in composite product, we carry the inventory for the six months, because you... We all are aware that Russia-Ukraine war has created uncertainty, but at the same time, because most of the composite products I am servicing to the government and semi-government companies and big corporates, where I have to give the timely delivery, so I carry the inventory for more than six months, so I can keep them servicing time. And these orders also on the fixed pricing system also, so I cannot get the increase or decrease. But I carry the inventory, based on that, we do the costing. And most of the composite products My input cost is also fixed for the 12 months, so I am getting my input cost accordingly. So there is no affected will be there.

Right? Understood. Yeah. Thanks a lot for the detailed answer. Sir, my second question is on PE pipes. You continue to maintain a healthy growth outlook, yet the Q1 volumes were relatively subdued. So was there a timing issue related to a prospect execution or should we expect the growth to be tilted towards the second half of FFID region?

No, still I agree with you because I am happy to tell you that today morning also I reviewed the business. Considering how the rains are coming in each part of the region of India. And I am pleased to tell you, I have received my from P.E. department extra dividend. The good demand is there in the month of now, August and September. Almost I will be able to use my 75% of my capacity in these two months. So, yes, so as far as first quarter, yes, the demand was slow, little, and not only the, because of the, there was no any other reason except the price increases substantially, which government has not given a price increase to the EPC contractor, and the EPC contractor wanted product, but we are not supplied wherever we could get the business with the price increase, Because we also know when our product input cost itself is 70% and EBITDA margin is in the range of 10-12% and the price increase by 30%, who has told us and in which school we studied that we should adopt the laws and supply to the fulfillment of the commitment? And that's very clear. We should get the price increase. We are willing to supply. We have a capacity. So first quarter, business is affected. But second quarter, as only one month, the last month is only completed, and remaining two months, I'm quite hopeful we'll be able to achieve our target. And the overall growth, more than 20% in a year, which is projected, we are going to get it, orders are in hand, confirmed orders are in hand, but price, yes, and we accept the prices are going to be regionalized, reasonable in the period ahead, considering the ore. Two things. Government also has to compromise and will be required to give the market conditions, required to give them an increase to the EPC contractor because very thin margin EPC contractor also work. If government need infrastructure development, government need the some foreigners should come to India, then interactivity has to be increased. Cost is immaterial. You have seen that now. The tips in India have shortened, which is affecting the electronic business. Now, government is supporting, government is giving the benefits to each of the industry, and they are... Expanding each of the state for the chips industry, which is a basic requirement in the electronic segment. Otherwise, the entire industry will be affected. So, government definitely will support the APC contractor. And currently, even price comes to the reasonable, but certain states or certain areas where the rains are ongoing, they cannot lay out the pipe in that line. And pipes are used for the various segments, for water management, seaweed management, power dug line, all. But here, You ask me, I have seen the trend also. In the first half, normally 35% business. In the balance half, 65% business as far as P5s are concerned. And that, based on that, we are working out.

Understood. Thanks a lot for that explanation. That was it from my side. Thank you.

Thank you. Ladies and gentlemen, you are restricted to restrict your question to one per participant. The next question comes from the line of Aryan from Equities Investments. Please go ahead.

Hi, sir.

Congratulations for the question.

Just wanted to understand, you know, that because of the increase in crude prices, we saw our gross margins fall a bit. So, for our company, what would be the ideal level of crude where, you know, our margins will be the highest?

I tell you, if I... You see the absolute EBITDA per ton. Okay? Don't see the percentage terms. As I mentioned to you, 15% volume growth, 19% EBITDA growth, and the 23 to 24% paid growth. Now, I have seen in my life of 40 years the polymer prices changes, whether it's downward or upward. First time, it was happened in 2008-09, Lehman Brothers crisis, when the prices were $1,300 per ton, but the dollar rate was 50 rupees. Today, dollar is 100 rupees around 96-97. Then the prices again in the four months came back to the thousand level. Similarly, things I have seen in the COVID period, when the prices reached to $1,700. Then, again, after that, in 2022, 2023, come back to $1,000 to $1,200. And the same is continuing since the last three to four years. Reasonable level of the polymer, next three years visible, considering the capacity expansion by the large companies in India, by the petrochemical products, and considering the expansion plan nearby countries, mainly in the Middle East. And in addition to that, the USA expansion and Korea expansion for the local manufacturers. And I also used to read many reports, polymer markets reports, India and international both. The reasonable polymer prices in terms of the polymer is considered $1,100 to $1,300. $900 is also not correct. People will not make the money. Similarly, if you ask me the oil prices, reasonable price is... $70, between 70 to 80 is a reasonable price per barrel for that. And that will able to stain the polymer prices $1,100 to $1,250. Because I understand from many petrochemical companies, cost of the producing oil per barrel is $55. So they also make certain money then only. Again, certain company who buy the oil, crack the oil and make the polymer. Certain companies buy the ethylene from ethylene, they make the polyethylene products. Polyethylene products means the polymer products. Certain company buy the polypropylene. So every company do not. Put their own petrochemical complex, because petrochemical complex is very cost high, then you should have a complete, very big size of the land, and investment is also very large. So many companies buy directly from ethylene and make the polymer. So I give your answer, the reasonable price of the oil is between 70 to 80 dollars, not 100 dollars. I have seen 125 dollars long back. In the COVID period. But again, if the polymer prices, lowest I have seen $600 in my life and maximum $1,800. But does not mean that today, for example, when the oil price is $60 and polymer price is $1,000. And when the oil reaches to $120, then polymer will reach to $2,000. I have not seen at all. It's not proportionately increased. It's again demand supply gap. I will be at this country. So as I mentioned to you, reasonable oil prices 70 to 80, and the polymer prices ranging from 1100 to 1250 is a reasonable price, where all people are happy, packaging cost will be reasonable cost, and we will able to maintain our margin in the range of 40 to 15.5%.

Understood. Yeah.

Thank you very much.

Thank you. The next question is from the line of Rohit Suresh from Samathwa Investments. Please go ahead.

Good evening, sir. Thank you for the opportunity. Sir, I had a couple of questions. First, on the LPG cylinders, how much for FI26 will be domestic and how much will be exports?

Normally, you will find domestic and export will be almost 50-50.

Okay, and, okay.

I have your RTV for 26, 526, that data have been provided at a time, currently I don't have that figure. But normally we consider, because my capacity is currently 1.4 million cylinder, considering the different sizes of the LPG cylinder, we do different sizes, means 5 kg, 10 kg, 15 kg, 26 kg, we can maximum can produce 12.5 lakh cylinders in a year. But this year, yes, in the Q1 figure is already given to you, and it is depending how much export order, because it is in our hand. We have some, something in our hand. If the export order are there, party wants, we can delay it also if local requirement is more, because we have to see in which month they should arrive it. We can take the direct vessel, we can take some indirect vessel and give the submission to the customer. But normal, when we take the order, we consider almost 50 to 60 percent to first the local make in India to support the local industry, local OEM market, and balance 40 percent.

Sir, within the 50% domestic market, how much will be PSU versus non-PSU?

It is entirely PSU. All companies are PSU, see, currently. No, no, we are not supplying to non-PSU. Long back we have supplied to some of the confidential petroleum company. Some we have given to the reliance, that's all. They are reusing back and completing it. Otherwise, no, everything is...

Understood. Thank you so much, sir. All the very best. Thank you.

Yeah, thank you. Thank you. The next question is from the line of Devam from our Deco and Flet Management. Please go ahead.

Yeah. Hello, sir. Sir, I wanted to confirm the level of debt, the cost of debt, and the exact working capital at the end of Q1. What would be the one-off working capital level in the numbers right now? And finally, given the 342 crores of unutilized QRP proceeds, our other income should be much higher than what it is, even if it be computed around five and half to six percent. So what is the reason for the difference over there?

Let me see that. You asked some related to figure questions, but I am very, roughly I know my cost of the point. 8.5% is cost of the fund is there, and another, you have asked me about 340 crore FD is there, yes, FD is given there, because I have required to give, put the FD money, which unutilized money for the QIP portion is kept under that, and I am getting the interest income over there, and the interest has come, have been netted, so that will not come under the other income, because interest, third of the FD is already considered. Thank you. This company's other income is hardly other income. Other income, how much other income is there? Then you can't do the rent or something which you receive. How much other income is there in the queue? Let me see that. How much other income is there? One crore, other income in the first quarter, which is mainly on account of the rental income, because certain premises which company is having and given on the rentals, including the mold and machinery given on the rental, which were not utilized by the company. And in the whole of the year, also, we will see. Sir, that is amazing. Last year was the nine crore, right? Whole of the year was nine crore.

Sir, so... On that, just understanding that what you mentioned, that actually, if we just reverse the debt, that is around 546 crores based on the ratios given in the quarterly update. So, if it is 546 crores of debt and the cost is 8.5%, then after netting of a QIP proceeds, let's say 6% or 5.5% sort of quarterly number, 16 crores finance cost does not tally up. So, what are the other components of finance? I think I will expand you this way.

I am expanding you. You know the major cost which is coming, even I have mentioned in my last call also, even company pay off entire debt, no any outstanding is there on account of the debt, and company has no any cost of the funds, even though there is a certain non-fund based facility, which is called the bank guarantees, import cost, documentation cost, export documentation cost, which is, Going to be continued, because I have to continue, have a sanction of the banks. Normally, you know, the banks will sanction the facility. For example, I need a thousand crores facility on account of the bank guarantees, on account of the documentation, L.C. facilities, like that. Then you know that every... Bank charge some kind of the half percent to 0.75 percent. It is called the product. The renewal fee need to be paid. Okay. So, I mentioned that, and company, most of the composite product, which are listening to the government companies and semi-government companies and multinational companies, even in some of the packaging product also, which is company has working on the tender system, need to provide the guarantee, bank guarantee. So, utilization of a guarantee limit in the range of 400 to 500 crores need to be given. And if the 5% value of the guarantee or 10% in certain cases, which is to be for 2 years or 3 years, performance guarantee is to be given. So, 30 to 35 crores facility on account of the non-fund based cost is going to be continued, number one. Number two. We have a debt-free as a company, as a overall, but if I will see the country-wise differently, certain countries have facilities available, I am continuing. Certain countries have cash-plus available, so they use their surplus cash for buying on the cash basis and selling the material. I can't transfer the inter-country fund available on every fortnight or every month like that. So, the running cost, 35 to 40 crores on account of the known fund-based facility cost. Plus, the renewable cost of the facilities will continue in the range of 35 to 40 crores, as against 100 crores, which were near the cost of the finance cost two years back, last year, 24, 25 and 25, 26.

Sir, that part? That part and trend is very much appreciated and that is also understood from the annual report.

I think if you need a bit of detail working, I welcome you. You can come with and understand with my chief finance officer about this entire transaction.

Just one part, what is the one-off working capital level? Because I think there is non-fund-based difference seems to have increased. So the one-off working capital level seems to have gone up. That should moderate in the next two quarters. Is that the right understanding?

No, I could not get you first thing what you want. I have mentioned you about the working capital cycle of 115 days which was in March, then which is reduced to 105 days which is currently, companies keeping target of 90 days. Working capital cycle time, how work out which I have explained to you, 70 days receivable, 65 days inventories, and 45 days credit, 90 days is the company target. Now, the certain things, working capital parts, It's depending on the sales in the whole month take place. You are very well aware that always you can't compare. And one another thing I would like to tell you. In first quarter, company used to do 22% business, second quarter, 24%, third quarter, 26%, and the last quarter, 28%. That's way, 100% business, whole project had carried out. In other words, the first half, 45%, 44% to 45%, and second half, 55% to 54%, it still takes place. Exact working, yet currently I don't have available, how much working is available, how much term loan, but yes, overall figure is available, and from that, the working can be possible. Last quarter interest, and this quarter interest multiplied by companies having fund cost of 8.75% in India, 6.5% overseas, and And the borrowing internationally and India put together, different, I can say, almost, it's 70% borrowings in India and 30% borrowings are overseas. This is the way of the working. So, exactly working, you want to understand, you are welcome and understand from my office. You can send the time and accordingly they will devote the time and you can understand. Exactly working, how the interest has been worked out for this quarter. Okay, sure. Thank you, sir. Yeah, thank you.

Thank you. Ladies and gentlemen, due to time concerns, we will take that as the last question. I now hand the conference over to Mr. Bharat Kumar Vageria for closing comments.

Thank you very much. It means I am very happy that most of the valued investor has got required information in my detailed investor presentation, which is loaded on the site. Otherwise, I was thinking that there is a lot of caution in the quarter one, considering the ongoing war and understand the company profile. Once again, I would like to thank for hearing the management comments on that. Again, I am assuring as far as there is no any change in the growth guidance. Margin guidance and the paid guidance for the next three years because everything is online. All the commitments provided, we assure you to fulfill and return to the investors which have been assured. And we are fully compliant of all the guidance and the rules and regulations of the exchanges, whichever are required to fulfill that. Thank you very much once again.

On behalf of Kavira's security, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.