DCM Shriram Limited (DCMSHRIRAM) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to DCM Sriram Ltd. Q2 FY27 Earnings Conference Call. As a reminder, all participant lines will be in the listenerly 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 have the conference over to Mr. Siddharth Rangnekar from CDR India. Thank you, and over to you, sir.

Thank you, Steve. Good evening and welcome to DCM Sriram Limited's Quarter 2 and H1FI 27 earnings conference call. Today we have with us Mr. Ajay Sriram, Chairman and Senior Managing Director. Mr. Ajit Sriram, Joint Managing Director. Mr. Aditya Sriram, Deputy Managing Director. Mr. Avit Agarwal, Group CFO of the company. We shall commence with the remarks from Mr. Ajay Sriram and Mr. Ajit Sriram. Members of the audience will get an opportunity to ask their queries to the management following these comments during the interactive question and answer session. Before we begin, please note that some of the statements made on today's call could be forward-looking in nature and a note to that effect has been included in the conference Thank you, Siddharth.

Good afternoon, ladies and gentlemen, and a very warm welcome to all of you. Thank you for joining us today to discuss the company's performance around Q2 and H1 financial year 2017 results. I will commence with perspectives on the business environment and the strategic updates, post which Vikram will share views on the financial markets. The second quarter of financial year 27 operated against a backdrop of sustained structures. We continue to navigate an environment characterized by volatile energy prices driven by higher interest rates by major central banks, including the Reserve Bank of India. The geopolitical landscape remains highly complex, demanding active revaluation of supply chains and trade exposures. At the same time, digital technologies and artificial intelligence are becoming increasingly important drivers of productivity, innovation, and competitiveness. For industrial companies, the opportunity lies in applying these technologies to improve operating reliability, resource efficiency, decision-making, and customer responses. India's position as a reliable, high-growth economic anchor has only strengthened. Q1 financial year 27 real GDP grew at 7.8 percent, and RBI subsequently projected financial year 27 real GDP growth at 7.1 percent, driven by services, private consumption, manufacturing, and infrastructure-led investments. Simultaneously, we face immediate physical challenges on the ground, particularly within the agricultural and rural sectors driven by El Nino. Reservoir stories also remain below the previous year and the long-term average across the country. This will influence agri-inputs and rural consumption and ruby cropping conditions over the coming quarters. For us at DCM SHRAM, this environment reinforces the value of staying close to what we can control, integrated operations, cost discipline, working capital management, digital execution, and calibrated capital allocation. We are translating this strategy into action through several key project announcements, optimizing cost management and carbon intensity. We are establishing a 40-megawatt peak solar energy plant at Kota for Rs. 145 crores and installing filter presses in a cement plant at Kota for Rs. 60 crores. We are de-bottlenecking operations at Baruch and Kota to improve energy efficiency of our current operations and increase caustic capacity at a project cost of Rs. 120 crores. Third, advancing forward integration. We are setting up new lines for manufacture of speciality compounds of PVC, speciality medical grades, and diversification into the manufacture of halogen-free, flame-retardant grades of polymer compounds in our JV, Shiram Technor Limited, at a total cost of Rs. 133 crores. Our investment will be up to Rs 50 crores as equity into the JV. A conservative approach to our finances remains central of how we run the company. As interest rates remain elevated, our healthy balance sheet, comfortable leverage, and adequate liquidity positions are swell to manage volatility. Our growth strategy is intrinsically linked to our sustainability commitments. We are advancing our ESG roadmap across resource efficiency, energy transition, and meaningful community engagement. By embedding these principles within our operational DNA, we are ensuring our business remains agile, responsible, and future-ready. This balanced approach keeps us well-placed to pursue organic and inorganic growth opportunities and deliver long-term value for our stakeholders. I shall now invite your attention to industry dynamics across our businesses. First is chemicals. Globally, the chemicals industry environment remains volatile during In the second quarter of financial year 27, unpredictable energy and input costs, along with uneven demand across major manufacturing regions, weighed on industry economics. In India, underlying demand remains supported by domestic consumption across textiles, alumina, and infrastructure. Capacity additions over the last few years have been well absorbed by the markets. Future capacity additions may create near-term supply-demand imbalances and put pressure on prices and margins. Given the headwinds, our true likely operations delivered a reasonable performance. Capacity utilization during the quarter stood at 89%. Our freaker capacity provided valuable market flexibility, enabling us to export our plastic production despite disruption in global supply chains. While caustic prices corrected in line with the global market, improved chlorine realizations partly offset the impact. Hydrogen peroxide, higher natural gas prices, raised production costs across the industry, which in turn supported firmer product prices. In advanced materials, operating rates were higher across product categories as we continue to deepen our market presence. The segment witnessed sharp swings in both product and raw material prices, with the steep increase in Q1, followed by an equally sharp correction. This led to liquidation of high-cost inventory and temporary deferment of customer demand. These pressures have now largely stabilized, providing a more balanced operating environment going forward. During the quarter, we commissioned the 100 tons per day aluminum chloride plant at Baruch, taking the total capacity to 250 tons per day, along with partial commissioning of the calcium chloride plant, taking us to 50% of the plant capacity, that is 133 tons per day out of 266 tons per day. We also commissioned the 68-MW Hybrid Renewable Power Project at Kota, further strengthening our structural cost competitiveness. The 58-MW Hybrid Renewable Power Project under group-captured SPV at Baruch is progressing as per schedule. The conflict kept raw material costs and subsequently PBC prices high. Weak construction demand going to monsoon and cautious trader bookings going to higher prices dampened overall demand. PPC's support toward introduction of the minimum import price of US$7.66 per metric ton helped domestic realisation and a weaker rupee further supported PVC prices. Our PVC volumes and realisations both improve and perform well with raw carbine production reaching the highest ever level and sales and realisation up year on year. Near-term PPC prices are likely to remain influenced by energy costs, currency movements, global supply conditions, and domestic trade policy measures. Domestic demand should improve after the monsoon. Global demand may get impacted by housing demand. The global sugar market is expected to move into a deficit of around 2.6 million metric tons in the year 26-27 season, compared to a surplus of about 2.1 million metric tons last year. Uncertainty of crops in India and Europe and higher diversion of cane to ethanol in Brazil could widen this deficit further. For sugar season 25-26, India is expected to close with a stock of around 3.65 million metric tons on production of 27.6 million metric tons after a diversion of around 3.1 million metric tons for ethanol, domestic consumption of 28.4 million metric tons, and net exports of 0.65 million metric tons. For the coming season, market estimates point to gross production of around 27 million metric tons with some downside risk. Domestic sugar price is currently on Rs. 4,800 per quintal and is expected to be range-bound. On the ethanol front, the tender for the 26-27 ethanol supply year includes ethanol made only from sea-heavy molasses and shifts supply toward grain-based feedstocks. Ethanol procurement price of maize-based ethanol has been reduced, while that of sea-heavy-based ethanol has not been revised, despite the increase in sugarcane price. With a store capacity of about 2,000 crore litres, already well ahead of demand, these developments significantly affect the sugar industry's investments in ethanol. The policy support with respect to fair share of allocations for sugar-based feedstocks and ethanol prices aligned with sugarcane costs are now critical to support the long-term viability of the sector. Finaster Building Systems. Finaster Building Systems sustained its growth momentum driven by healthy volumes across both retail and project segments despite a volatile real estate market. Margins continue to reflect the changing product mix, upfront investments, scaling our new business platforms, and higher input costs. During the quarter, phase one of aluminum extrusion plant at Kota was commissioned, while the second phase is in the process of installation and commissioning. Work on the wooden doors facility is moving as per schedule. Moving on, the Agri-Inputs business portfolio comprises of Shriram Farm Solutions, fertilizer, and bioseed businesses. First, Shiran Farm Solutions. The quarter was shaped by one of the weakest monsoons in over a decade driven by El Nino conditions. Although late season rains helped sowing catch up in the near normal levels, a shortened application window, moisture stress on crop, and tighter farmer liquidity kept demand for agricultural inputs selected. The SFS business witnessed a decline in top line in Q2, financially at 27, compared to Q2, financially at 26, largely accounted a difference in timing of sales of research wheat seed. The portion of the timing-related impact may reverse in Q3, subject to crop conditions and channel demand. Notwithstanding these conditions, the crop protection vertical registered healthy growth, backed by a differentiated product portfolio and ability to tap weather-driven demand. The business introduced four new products, including a promising wheat variety from our in-house R&D, while our digital campaigns reached over 1.5 crore farmers. Fertilizers. Natural gas prices for the urea business rose further during the quarter as the West Asia conflict continued to disrupt LNG supplies. Plant operations remain stable, and we continue to focus on improving energy efficiency, maximizing urea production, and keeping tight control over fixed costs. The increase in gas prices has raised the working capital requirement associated with subsidy receivables. Given the high gas prices, the indigenous urea fertilizer subsidy requirement for the year could be higher at Rs. 1.2 lakh crores versus the union budget of Rs. 85,000 crores. The very season remained very challenging for the bioseed business due to a broader climatic pressure, especially in south and central India. Despite the late recovery in rainfall, acreage under key crops such as corn, cotton, and paddy stayed below last year's level. This weighed on corn and paddy volumes, while higher input, production, and logistics costs added to margin pressure. Our cotton volumes are better than last year. The margins are also impacted by provision for doubtful debts in India and seed discard in Philippines. We remain focused on portfolio quality, inventory discipline, collections, and strengthening our market position ahead of the next planting season. I will now request Vikram to provide the financial perspectives. Vikram, over.

Good evening, everyone. I will now take you through the financial highlights of Q2 and H1 FY27. Net revenues, net of excise duty for Q2 FY27 were at Rs. 3,977 crores versus Rs. 3,272 crores, An increase of 22% year-on-year, driven by chemicals, vinyl, fertilizer, PBDIT for Q2FY26. We see 19 crores versus Rs.408 crores in Q2FY26, mainly due to higher input costs in chemicals, who did a one-time positive impact. So the volumes were up 2%.

Thank you, sir. We will now begin with a question. An answer session. Anyone who wishes to ask a question may press star and 1 on their touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Ladies and gentlemen, if If you wish to ask a question, you may press star and 1. Our first question comes from the line of Rhea Mehta with Equitas Investments. Please go ahead.

Thank you so much for giving the opportunity and congrats on the first numbers for TVC. I just wanted to understand on the chemical division, which is caustic and other non-caustic chemicals, we are seeing the margin pressure and you mentioned it was input pressure. So, could you explain the breakup of this negative margins or on a biowise basis a decline, even adjusted for the exceptionalism, a little bit of a decline? Just wanted to understand what point it is.

Yeah, so we have in the chemical business across the board, whether we look at the new chemistries that we got into, lines of business which we expanded, so what has really happened is that the cost of production has, in this quarter, the cost of production has gone up in the range of about 6 to 8 percent across, in the range of around 4 to 6. Effectively, the margins The first product which is definitely done better is hydrogen peroxide because there the prices went up because of the gas prices. That was dealing. For the rest of the products, that's how the margins live.

Could you help me with the specific raw material prices which have increased in the cost of production because as I understand the major cost of production is power for us and we have entire link of power for costing division with the PPSI and etc. So where is the incremental cost of production coming from and in which particular chemical and if you can go into specifics of that?

So, it will, again, vary on the product. What you said is right, power is the key raw material, and there the coal prices have gone up significantly, and they're still going up. The impact of highly impacting our caustic business. In the case of epichlorohydrine and the downstream of they're quite volatile, so high costs have come down. So, it's pretty volatile, given the West Asia crisis. The freight and all that is so disruptive.

What was the incremental depreciation on account of the newer plants which have been commissioned going forward? Incremental depreciation?

Half year, the incremental depreciation, for the quarter, for example, the incremental depreciation was about the total increase that you saw in depreciation. Ten cures came from the chemical business. Going forward, I don't think it will be very significant, at least in the rest of the year, Given the fact that most of the projects have been capitalized, there will be some increase because calcium chloride and aluminum chloride got capitalized, but nothing is a very significant increase because of that.

Coming to the PVC demand, so we've been listening to Calls of Supreme and all those companies and they're mentioning about demand destruction from there and reducing the volume rise in. With this kind of pricing for PVC, what are the current prices currently? What is the trend going forward, and what do you see of its demand?

Current prices of the PVC are in the range, the domestic prices, are in the range of around, you know, 95,000 to 1 lakh rupees a ton. So those are the kind of prices currently prevailing. So the next question.

I just wanted to understand the demand side of it with the current PVC rising recently so high. I think the last cycle of the P4 was around $90,000, and we had so far back speak. We just wanted to understand how the demand is running out.

See, demand is, because as was mentioned in the Champions remarks as well, that demand will start picking up. Now there's a monsoon, so over. Q4 are a good season, but we are not seeing one, we are not a very large producer, so we are not seeing any challenge, we are producing 100% of our capacity, a little more than that.

Happening again, considering that the prices have been above MIP and with the overcapacity still being in China, the table will be starting to happen again.

As I mentioned in my opening remarks, we already have a MIP of $7.66, plus there is an import duty also. So with that, the prices today are expected to be quite stable.

Congratulations, Randa.

My last question is on the sugar division. So, I just wanted to understand which is the mandate of C-heavy, how much crore litres of ethanol can we make from sugar, from C-heavy? And second was for the maize division. As the current newer rate notified by the government, what is the kind of corn break-even cost we are looking at? And since corn is also increasing, will we be going for maize day, say it now?

Allocation, in terms of what we can manufacture, so our total capacity to manufacture is in the range of around crore litres. Out of it, almost 50% is. Now, as far as the maize prices and the maize price itself going up, so there will be shrinkage of margins. So we will try to optimize the FCI-based rice to whatever extent we get the allocation of FCI rice. So that's what, frankly, given we feel that the feedstock is going to be a challenge for ethanol this year.

And we would be able to easily manufacture, I suppose, 8,000, 8,000, 8,000 litres from C-heavy, right?

Yeah, yeah, we should.

Got it. Order book was a little tepid this time. Was it a function of some particular event?

See, I think for Finister now, order book, unless it is a significant fall, order book is becoming, it's not so relevant, because what happens is that project businesses become almost like 45% of the business, and that is what can cause some bit of volatility in the order. So one day you have a large order, and then the order book looks big, maybe two quarters down the line that order book might change, because it was only there, and some And by last quarter, we'll also be doing wooden dolls. Right, right, right.

I think Panista has been fantastic for us in going forward, looking forward to seeing better numbers. Thank you. That was my question. I'll get back to you before the question.

Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question comes from the line of Jainam Gilani with Fawn Investments. Please go ahead.

Hi, sir. Thanks for this opportunity. Most of my questions have been answered. Just one question was that could you give an update on the demodulatory process as we were planning?

So, see, the major process is on. The management is working on it. As I had mentioned in the previous interaction as well, that given the position being, these businesses are quite interlinked. And we don't want to make modifications later on. We just had to filter that. And now we are in a pretty advanced stage. So, we hope to, you know, get it to the board very soon.

Okay. So, we can expect that in two to three quarters, right? In Q1, FI 28, would that be a good timeline?

Yes, that's what we are targeting.

Thank you.

Thank you. The next question comes from the line of Raja Kumar Vedianathan with RK Investment. Please go ahead.

Yes, good evening. Thanks for the opportunity. Sir, I have two questions. The first one is on the vinyl segment. So I see that the PVC realizations have gone up quarter on quarter, And even your revenues have gone up, but there has been pressure on your margins. The PBDIT margins are almost 21.9, we survey 22 something in the previous quarter. So just one, what is the outlook for this segment?

So see, one, as far as my information goes and the information that we have provided, the margins have improved significantly. The increase in realisation is more than the increase in cost. Going forward, it's difficult to say, although we are hopeful on the prices being firm, as we mentioned in the Chairman's speech as well, that there is minimum import price, keep the business healthy. But what happens to the energy prices, because energy is the cost of production, that is one issue, but what we are doing as a process is also that, see, these are momentary that energy prices have gone up and things like that. But what we are doing is getting more and more of renewable energy, which will, like, almost, we are looking at almost, that is about to get fully commissioned. Part was commissioned, part is about to get commissioned in maybe next few days. So all those steps have been taken to optimize or reduce our cost of production. But still, coal still forms the majority of the cost, and the cost of that is going up. So let's see what happens.

So any possibility of margins improving or it will be maintained at current levels?

It will all be a function of how the price moves from here. If it remains at this level, then the margins should idly come down. If it goes up, then probably yes.

The second question is on the sugar segment. So, I heard the chairman said talking about the overall outlook for the country as a whole. So, I just want to know for TCM per se, what is the production that you are targeting and how much reduction are, you know, if you can give some color on, Last year, how much are you expecting?

in the month of September, because of which there has been lodging of cane. So that can also impact. But then, let's see, in our region, how it works out, because it's very, within UP also will be region to region. So probably we'll get to know in next two months' time, two, three months' time as to how it works out.

And is it fair to assume that there will be pressure on both the cane crush volume as well as on the recovery rates?

It's too early to comment. It also depends on what the fog is like in the winters. That will impact the recovery. If climate progresses, what is the sunlight and all that will...

Thank you. Participants who wish to ask a question may press star and one. The next question comes from the line of Saket Kapoor with Kapoor & Co. Please go ahead.

Yeah. Namaskar sir. Hope I'm watching.

Namaskar.

Yes, sir. Firstly, in terms of the cost rate, so the price trend, what have been the current, how are the current markets shaping up for the cost rate realization? I think there was a date post the first quarter, but in our ECU realization or the one which we have given about, that shows an increase. So, can you explain how the price trend has been, and other question was pertaining to aluminum chloride realization, how this product price realization is shaping up, and what is our current utilization level?

What we have given in the lecture presentation is the ECU. What we were talking about is that the caustic prices have come down. However, the ECU is a mix of caustic and chlorine. The chlorine prices have actually been, you know, the negative chlorine prices which were in Q1 around 8,000. I don't have the exact number but ballpark around 8,000. In Q2, they came down to around 5,000. That has been the reason why.

Okay, and pertaining to the aluminum chloride realisation set and the volume?

I don't have the exact number here. Again, as I said, aluminum chloride is a small part of the business, and the reason why aluminum chloride is there is to support the caustic utilisation. And cost of utilization has actually gone up. If you see our utilization vis-a-vis same period last year, cost of utilization was around 79-80 percent. And this year, or this quarter, the utilization is 88 percent. So that shows the success of having the aluminum chloride plant, which has helped the utilization along with the market development activities as well.

And also the chloride prices are closely linked to the aluminum prices. So there is a correlation there. So if the cost, which is aluminum, for us is a cost, if that goes up, then the aluminum chloride prices also do move up. There may be a bit of a lag. So the margin, you know, depends on the prices, of course, but they are reasonable.

Right. And currently, what is our captive consumption of chlorine, and what is the roadmap ahead that, say, two years down the line, what would be the captive number, rightly?

So, for us, actually, we have two locations, just again, Bharuch and Kota. So, in Bharuch, after all our projects are commissioned, we expect to have a 45% capital consumption. It will be in the range of... Additionally, what is a big strength for us, especially in Bharuch, is that we have a number of customers or partners who have grown with us over the last 30 years. So, they are our pipeline customers, and they consume approximately 27% as well. So, if we put those together, you know, it will be in the range of 70% between captive and pipeline customers.

Just to take into account the costly soda prices, how has the price trend been, the realization for the first quarter versus the second quarter, what has been the actual decline of the import parity prices, if you can give a number to the same. And the second question, second addition to it is, have we heard or seen any announcement from a big player like Grassian giving, outlining their strategy that they would be not selling any further clothing into the market over a period of time and creating that ecosystem where entire clothing would be utilized if they are the largest player? So, correct me here, I have heard from when I read it, but I must confirm about it, so I would like to have your thought process of how the largest player is planning is regarding chlorine consumption, completely self-consumption by then, in time sight.

To your first question, actually, what we look at is the ECU price, which is the combination of the caustic price and the chlorine price. I think we've already shared earlier in the call that caustic prices have been a range bound, but chlorine prices have moved up. They were more negative. Now they are less negative or closer to zero. So overall, ECU Thank you very much. So that we remain robust even in the down cycles and we, you know, enjoy the up cycles that are there.

Great. And last point on the same thing, sir, what have been the import number for the six months of cost for the country? How much has been imported?

Directly with us, but if you can reach out to our team, they'll be able to share those numbers.

Okay, and lastly, big corporate houses are also contemplating huge capacity for both, for Caustic, I think, so the largest corporate in the country. So, how will that change the entire ecosystem going ahead with players like us who are selling caustic soda and their main attraction would be the chlorine realization for the PVC integration?

There have been announced capacities, and I think as we said earlier, our focus is continuously on how do we optimize our cost structures. There can be at times in the industry some demand supply mismatches, and we've seen that in the past decades as well from time to time. But overall, we feel that the India story is very robust. And if we take a three-year and five-year time horizon, we expect the industry to continue to perform well. While there is caustic capacity coming in, at least there will be no surplus chlorine coming into the market because that will all be integrated into PVC by the two large new capacities coming in. So I think we will have to see how it evolves. But these are also linked to global prices of plastic and PVC. So we feel in a medium-to-long-term time horizon, these capacities will get absorbed and the demand will continue to grow.

Thank you.

And of course, we have exports also as a strong lever now.

Yes, sir. I was alluding to that point. I mean, net of import and export, how much we imported in the country. But anyway, I'll take it off. Thank you, sir.

We are now, as a country, we are now a net exporter. We used to be a net importer some years back. But now, we are a net exporter as a country.

Okay. So, Phil, with the current logistic cost... I'm sorry to interrupt, Mrs. Sakeem. I'll join back here. Yeah, yeah. Thank you so much.

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

Yes, sir. Good evening, sir. I wanted to request you about this chlorine in-house consumption so that we can get rid of this minor price and all that. So I request you to look into the possibilities as far as possible practical.

Earlier in the call of consumption, approximately 70% of the chlorine capacity that is integrated. We also have some tie-ups, you know, through some arrangements with other customers in the region. So we feel quite confident that compared to a few years back, we are now, we have a healthy level of chlorine integration. And so we think we are in a better position now. Right, sir.

The other thing I wanted to know, sir, in 2027-28, can we expect the turnover of rupees 20,000 crores, sir? Consolidated turnover? Given our expansion and modernization and all that we are doing, at least 20,000 crores we will reach?

And the pipeline is going to grow, but giving the exact number is...

Okay. Okay, sir. Thank you.

Thank you.

Thank you. We have a follow-up question. It's from the line of Ria Mehta with Equitas Investments. Please go ahead.

Hi, Abhinav, this side. My question was regarding how much of our power cost is backward integrated?

How much of our power cost?

Captive, captive, backward integrated.

So, our entire power, we don't source any power from the grid. Renewable also, our target is in next total power requirement, around one-third should be coming from renewable.

Okay. And what is the current share of renewable?

About 107 peak is already there. And we're planning to add...

And switching to renewable, how much is savings as percentage of renewable when you switch and use higher renewable?

I think, I mean, renewable is always, you know, given the kind of coal prices, so it will be a function of that. But, yes, all these investments have returns on investment in excess of.

And, my last question was regarding bioseed. So, is it a multi-year use seed? Let's say, Kharif was bad, we can use the same seed in the next Kharif, or do we need to write it off completely?

The large volume of seeds and bioseeds we had in cotton, corn. All these seeds have, especially cotton has a life of almost four to five years, five years actually. And the other seeds have a life of two to three years.

And what was the quantum of the write-off which we took regarding inventory in Philippines?

This was in Philippines, where we took a write-off of about 12 crores for the half year.

12 crores. And what about India?

India, it was more of provision on the doubtful debt. As per the company policy, they are not bad actually, but we have an accounting policy under which we make provisions after a particular ageing. So we have done that provisioning. Hopefully we will recover that money.

Good with the amount. Thank you. That's it.

Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and one. Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments. of our diversified businesses.

Recent investments get ramped up. Our focus is on disciplined execution, operational excellence, and building the agility to respond quickly to changing conditions. We continue to use and implement digital technologies to improve productivity, sharpen decision-making, and deepen our engagement with customers. Thank you very much once again for your continued trust and support. Goodbye.

Thank you, sir. On behalf of TCM Sriram Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.