EPACK Durable Limited (EPACK) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to EPAC Durable Q2FY27 Earnings Conference Call hosted by DIMM Capital Advisors Ltd. As a reminder, all participant clients will be in the listen-only mode. 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 touch-tone phone. Please note that this conference is now being recorded. I now hand the conference over to Mr. Tanay from Dam Capital Advisors Limited. Thank you, and over to you, sir.

Yeah, thank you, Anam. Good morning, and welcome, everyone, to EFAC, the Audible's Q2 FY27 earnings call. Today, we have the management being represented by Mr. Rajai Didi Singhania, Managing Director and CEO, Mr. Rajesh Kumar Mittal, the Chief Financial Officer, and Mr. Nipin Gupta, GM Finance. At this point, I would hand over the call to Mr. Rajesh Mittal for his opening remarks, post which we will open up the floor for Q&A. Thank you, and over to you, sir.

Thank you, Tanay. Thank you all, and very good morning, everyone. Welcome to our earnings conference call of the second quarter and first half of the financial year, 2021. I would like to thank DEM Capital for arranging today's earnings call, the key The key financial highlights for the quarter 2 of financial year 27 are as follows. For the second quarter, revenue from operations stood at 439 crore, registering a strong growth of more than 106% on year-on-year basis, compared to 213 crore in the corresponding quarter of the previous financial year. EBITDA for the second quarter stood at 7.1 crore compared to 0.5 crore in quarter to financial year 26, representing an improvement of approximately Rs. 6.6 crore. The EBITDA margin improved to 1.62% compared to 0.23% in the corresponding quarter of the previous years. I would also like to I want to highlight an important point regarding the comparability of EBITDA margins. The company has not accrued any PLI income in quarter 2 for the financial year 27, whereas it has accrued a PLI income of each 8 crore in quarter 2 on year-on-year basis, which sat within that quarter revenue, and because it carries no associated cost, it directly flot the entire amount into the EBITDA. Excluding the PLI income for the previous revenue and EBITDA for quarter to financial year 26, EBITDA would have been negative Rs.7.5 crore, compared to positive EBITDA of Rs.7.1 crore during the current quarter. Accordingly, on a comparable basis, excluding PLI income, the company has achieved an EBITDA improvement of approximately Rs.14.6 crore on year-on-year basis, reflecting an improvement in underlying operating performance. This will also point here that this EBITDA margin does not include the, if I ignore the forex loss, the EBITDA would have been improved by rupees 10 crore on half year basis. Now, I would request our managing director and CEO Mr. Rajay T.D. Singhania to brief you on the operational highlights. Over to you, please, sir. Thank you, Rajaji.

And once again, good morning, everyone.

Let me begin with industry first. Primary sales for room air conditions in July to September quarter were better than last year. Last year were in unseasonal range, restocking around GST transition, laying down the industry. The quarter has been completely much better both in terms of primary and secondary sales. Secondary sales have remained healthy and general inventory is at a comfortable level, which gives industry a seamless starting quarter. And we are seeing this in our first-numbed early production class. Commodity prices, particularly copper, aluminum, plastics, the effects, the situation have been volatile throughout the year. Our contracts provide passing this cost, but passing is an ongoing process with a lag, especially when prices are moving as shortly as they are today. In such periods, some compression in presently margins is natural and it narrows as pricing In large appliances, washing machines continue to grow ahead of the broader market driven by shared to fully automatic and front-loop models and by rising penetration beyond the toxicity. In smaller appliances, kitchen categories such as air fryers, mixer graters, induction cooktops continue to see strong direction as consumers and brands increasingly looking to source those categories from reliable domestic market.

I am pleased

to share that EPECT durable delivered its highest ever plus half revenue of 3025 crores in H1 of 26. Up to 51.3% year on year. In second quarter revenue more than doubled to Rs 439. The quarter also shows our diversification at work. Some more domestic and non-domestic appliances The second quarter, RSC revenue grew 57%. Washing machines and air supplies led the growth and non-RSC business contributed 63% of the revenue for this quarter.

For half-year, SDA and LDA grew 62%. Our RSC business grew 58% interest staff supported by share gains

with existing customers and contributions from new ones. In second quarter, RSC revenue grew 161% starting on a low base of last year.

The national range is described in this regard around the history of lifelong industrial industry.

Corporal elements do 45 percent, midterm waters and continue to fit in captive integration in heat exchangers, copper tubing, PCBs, cross-flow fans and golded parts. Lead Now 72 customers across 19 categories and top two customers concentration has come down to 32 percent from 72 percent earlier in FY22.

During the year, we launched vacuum cleaners, power fan, nuclear blenders, and added newer customers. For F427, our pipeline includes oil fit hikers, slushy machines, air purifiers, and a couple of other products which are intended. On our high-class partnership through EMGP and our whole new and subsidiary facility,

though the last season we produced room air condition for ICANN, the next milestone is washing machine. Pilot production for Front Road washing machine is scheduled for end of November 26 with commercial production to product. Front Road washing machine is a premium, growing segment of washing machine market and this takes PMDPL from a single product category to multi product product. Along with the results, the board has taken decisions to sharpen our focus on the core business. We are transferring our 50% state in Epago Electrical, joint venture with Ramgarsan Group, RRWL, who will hold now 100% of the market. We are also winding up two subsidiaries, namely Gumjin, India Autoproducts and EPEC Electory Components Private Limited. Both of them neither had any operating security and nothing comes from both the products. Our share of losses from Epago was 12 crores for FF26 and S1 of FF27 and that trend now Going forward, our capital and management attention will be fully on EPEC durable and EMPP.

On margins, how we are reading this state government, we are scaling up the top line strongly and

winning shares and like for like EBITDA grew 77 percent in the half. Reported profitability is being head-bred by depreciation and interest for new capacity. The lag in passing through commodity costs, the absence of PLI income and sustainability, Neapartagneed is theame. Any whicitÑ ellers in demands or competitiveness. As facility Oğlumab buildings fill up , fixed cost absorptions will support marginal dependence. Our priorities remain future. Full first, scale growth engine sustain RLC share gains while pumping up washing machine including front door at EMTTL and small domestic appliances which remain our fastest growing and most margin efficient learners. Second, Deeper strategic partnership. We have a robust pipeline of new products and customers across segments and our near-term priority is converting the top sales into stronger profitability.

With this, we now open the floor for Q&A.

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

Yeah. Hi, sir. Good morning and thank you for the opportunity. I have a few questions if I may. So, the first one I want to understand is that yes, we've seen very strong top line growth this quarter for RAC on a favorable base. Maybe if you can sort of help us break it down into value and volume.

Volume-wise?

Yes, for the quarter.

Volume wise, I think it will be difficult, the data is not handy, but overall, the AC for 2, 2, 0, and 50 percent, and a very weak class, the same quarter.

So, RAC, I have a segment-wide breakup, which is also part of the investor PPT already uploaded.

Yes, sir. No, I want to mean to say is the 160 crores of RAC, which we have done, if you can sort of help us break down, how much was it led by volume? and how much was pricing benefit? Okay, in that sense, yes.

So, the prices of overall compared to last year, same quantity, the increase has been approximately 50 to 20 percent, varying from model to model. So, that's the approximate price increase which has happened on because of the commodity and the corrects.

So, overall price increase is varies from 50 to 20 percent model to model. Sure, sir. Sure. And so, the other thing I want to understand is that yes, while you've taken a 15 to 20 percent price increase, gross margins have seen, you know, a sharp contraction on a ROI basis. Can you maybe split the contraction into two pieces? Because one piece would be the under recovery of price hikes, and the second would be also a portion of higher ASPs impacting your margins optically. So maybe if you can sort of help us understand what percentage of price hike is yet to be taken versus the cost escalation which has been seen.

So, on this Taneh actually if we compare like to like last year H1 or 2 we had secured like Rajajji mentioned PLI income of 8 crores in 2 and overall 20 up of 30 crores in H1. So, if we neglect the PLI the gross margin the last year was approximately 12.4 percent which So, I am going

to say that the 15% to 20% price act which we have taken sort of covers all the escalation till date.

I'm just saying, sir, fair to say that the 15 to 20% price hike which we've taken for our customers sort of takes care of all the cost increases which we've seen?

Largely, yes, but like I mentioned earlier, there is a lag. Prices are not passed on later, so there's always a lag, but yes, in general, mostly based on our contract, any escalation or decrease in commodity is passed on subsequent quarter. So, that's an ongoing process, but there's always the right. But largely, yes, the increase has been passed on to almost all different customers.

Awesome. So, the other question was, obviously, you know, we've been seeing the secondary sales have been far better. So, if you can sort of help us understand what are the current industry levels, you know, in terms of inventories at both brand and channel, if there's any indicative, you know, number or any indication if you can sort of provide will be helpful.

In terms of inventory levels, compared to last year, it was last year wherein again due to a seasonal range, the inventory had lined up both with the customers as well as with the general partners. I think we are looking at a significantly improved situation and my only guesswork would be like last year, I remember we were talking about somewhere around 5.5 to 6 million of inventory in trade towards the end of 2022. I think that was the condition last year, it's probably 40-50% lower. So, this again is an estimation based on the kind of outlook we are getting for Q3 and Q4. So, there's a good bull in Q3 and Q4 as well. So, that gives us the confidence that yes, channel investors are rather comfortable or we can really because the sales continue, they are at a lower level.

Sure, sure. So the other thing was also, you know, we've seen a lot of capex which has been put over the last couple of years, right? We've almost had a 400-plus sort of a plan in terms of expanding capacity. You know, that's yet not translated into meaningful revenues for us yet. So, you know, what is our roadmap, let's say, for the next three to four years in terms of, you know, scaling and utilizing these capacities, sweating these assets? And I think a lot of it is also for Hisense. So, how are we thinking about, you know, scaling up Hisense as a, you know, brand for us as a partner over the next two to three years in terms of revenue scale up?

In terms of the overall CapEx, the announcement we made almost 18 months ago was that we are looking at a CapEx of close to 270 crores of which 370 is what has been actualized till So, and with this mostly everything has been already put to use and the plants are largely The balance in this growth will further be staggered in next 6 to 12 months, that is the medium term vision. And now the focus is very clear, like we are withdrawing from a couple of joint ventures and couple of like people and also the focus is very clear, we are looking at segments getting received to growth and the balance of hundred growers which you saw in the ingredient and dieta is also now going stretched and will take another 6-12 minutes by the time we see growth in even more detail with this. So, yes, investment in Hi-Sense is largely completed with commencement of fund-fired washing machine excepted in end of November, and then the rest, hundred crores which is now budgeted, would be started in the next 6-12 minutes to further ramp up the capacity of consuming machines and look at newer models of applications.

But there are no significant investment plans in any medium.

Got that, sir. Got that. Maybe I'll fall back in the queue and join back again later. Thank you so much for answering my questions, sir.

Thank you. A reminder for all the participants, in order to ask a question, you may press star and 1 on your touchtone telephone. The next question comes from the line of Shriyansh Jain from 3A Capital Services. Please go ahead.

Hello, Emma Audible. Yes, sir. Thank you for the opportunity. Couple of questions, sir. First, since this year being the last year for PLI, so post-PLI, how do you see margins going forward? Will we have to take further price hike to maintain margins?

Thanks, sir.

So, yes, this is the last year for the AC-PLI for Effect Durable, and for last year and this year, currently, we are not getting any income in terms of the PLI thing. So, based on our current discussion and the industrial representation done to the ministry and the PIIT, the budgeted amount for the PLI for the EC which was roughly 5000 crores that we have largely remained unutilized with the government, there is an ongoing discussion wherein we believe there could be some extension happening. So, that is very, but at the same time, yes, whatever PLI income was acquired by us was largely passed on to the customers to get to be competitive in the market. So, as you can see, we have been discussing about increasing the overall gross margin in Initiative has been taken to increase the prices wherever the discounts were being given in terms of the PLI. So, in the medium term, I will relax some normalization and beyond that further normalization will happen and as we like this sounds, we have to reverse quarter on quarter.

Great to hear that sir. Next question sir. Could you please provide sales number from Hisense and have you had any talks with the Hisense team? What are the response they are getting from the Indian markets?

Overall on the Hisense side, Hisense is already a very strong brand and has already gained significant market share in India in terms of their values in market and that is how the brand is getting created. For AC, the current year being the first year for them as a mass player, they have already sourced close to 18000 year conditions from us in this year, being the first year So, that gives us a lot of confidence in terms of the overall penetration and the channel which they have created. And now, with lots of multi-consider going forward like washing machines and etcetera, we believe Hisense is on right track and our association will send us in terms of the outlook and the intent with which we have partnered with them.

Sir, could you please provide the sales number from Hisense, it would be helpful.

Approximately, for H1, it is close to 90 crores.

90 crores. Okay, sir. Thank you so much and all the best.

Thank you. The next question comes from the line of Pratap Malival from Mount Intra Finance. Please go ahead.

Hi, am I audible?

Yes, sir.

Hi, thanks for taking my questions and congrats on a good top line performance. So I just wanted to ask, when it comes to our overall debt on our balance sheet, if we look at a pair of hours that is almost twice our scale, they seem to have this kind of debt. And so what is our outlook here? You know, on our finance course, I believe last what also the management had pointed out that we can do better on this front. So, can you just give me an idea going forward how the debt levels will turn out?

Overall, if I see compared to last year, in terms of the debt position, the debt was across the company with 770 crores and currently also 725 crores overall across the company, but certain areas where the company has been focusing and improvement has been achieved especially in terms of inventory reduction and payment has been done to the suppliers and also close to 251 crores of payment has been done to the supplier. So, for the inventory which we are carrying, we produce inventory by almost 125 Watt per hour and 100 crores have been capitalized in terms of the investments in the last quarter. So, yes, the debts remain similar currently, but in terms of the plans of KPEX, like I shared, 100 Watt per hour of investment is planned in next six months. The company is not looking to raise any new capital, any significant new capital. So, for the medium term, the overall debt positions will remain similar, which is almost 0.8 times the equity, and then we will see normalization happening as the capacities which have been created for two years.

Okay, and just to kind of deep dive here a little bit.

So, most of our debt is I think the short-term working capital debt. So, we projected strong growth going ahead. So, as that growth comes in, we don't anticipate, again, a corresponding constant increase in our finance cost, so we can get some of that leverage into our bottom line, so we can effectively make a more uniform, profitable profile. Is that correct, sir? So, just what I'm trying to ask here is that our finance cost should not see much more of an increase going forward, even with the strong revenue growth that we are projecting ahead.

So, if you look at the numbers also the total finance cost last year versus this year with revenue doubled in terms of value has almost remained same, but there is there has not been any increase in the finance cost overall finance cost as it has had the absolute number and going forward yes definitely as we are rationalizing or increasing our SD and NDA sales in which the payment terms are significantly much better as compared to the issue, we believe the

Okay, and again, I was comparing with some of our peers that are indexed to air condition and manufacturing. Even if I look at some other players, we seem to have the lowest margin in the peer group. Even a player that is smaller in scale and, you know, shared one of our anchor customers, they seem to have margins in the range of 8 to 9 percent. A player that is larger also We also have 8-9%, but we are kind of in the 6% rate that too on an annualized basis. So, why is it that we have the lowest margin and what can we do here to improve this profile margin profile?

I am definitely concerned, definitely, yes, this is an area of improvement for us, especially with the large set of backward integration and the cost associated, currently the margins Okay,

and just one clarification regarding the washing machines for the Hyacinth.

I believe you had pointed out pilot production and the timeline. Could you reiterate the line wasn't clear, I wasn't able to hear. So, what is the commercialization status of the washing machine for Hyacinth?

The Hisense washing machine we are talking about is the front row washing machine, which is the tech transfer done from Hisense, and the pilot production, currently the pilot production is ongoing, we will complete all the pilot production by end of November, and then

from December onwards, the mass production will start. Okay, sir. Yes, thank you. Those were my set of questions. Thanks for taking them.

Best of luck with the quarters coming in. Thank you, sir.

Thank you. A reminder for all the participants, who wishes to ask a question, may press star and 1 on the touchtone telephone. The next question comes from the line of Ravindranath Nayak from Nirmal Bank Institutional Equity. Please go ahead.

Thank you for the opportunity, sir. Sir, just, you know, your voice is a little bit muffled. I cannot listen it properly. So, can you please correct that? That would be helpful. First of all, in the last year, without PLI benefit, your gross margin was around 12.4%. And this quarter, your gross margin is 12.8%. And also, there is an increase in high-tech. You mentioned that 90 crores of updates from Hisense. Am I right, sir? Okay, okay. So, last year, without PLI, your total sales in RSE was 53 crores, and this year, you know, like to like basis, it is 161 crores. There is a significant rise in RAC business, and also the last quarter, your gross margin was 14%. Despite the high contribution from Hisense and also growth in the RAC, the gross margin has declined on a quarter to a better basis. But, you know, it should have increased. So whether the high sense margin is low, and also there is a significant traction in the small durable appliance, some domestic appliances, and also component has gone up from 44 crores to 109 crores, and small durables has gone up from 107 crores to 168 crores. So, despite that, your gross margin is low on a quarter-to-quarter basis. Whether the high-sense margin is low and also this component and other segment, non-RSE segment, margin is still low. That is why gross margin is still low. So, whether the, if in the coming periods, whether the RSE margin will contribute with the growth of the RSE margin, RSE segment, will the contribution from the RSE margin will grow in the coming quarters, or it is not like that?

So, Mr. Ravendam, let me just put the correct number, I hope you already have them in front of you. So, for the current quarter, I mean due to Y on Y, the RIT revenue has increased from 61 per hour to almost 161 per hour. So, that is 160 percent growth. Similarly, small and large domestic appliances has grown from 107 per hour to 168 per hour. So, that is So, overall, yes, there has been an increase of 106 percent, and at the same time, like you rightly stated earlier, the gross margins have improved on a like-to-like basis, excluding PLI income. So, for last year, gross margin was 12.4 percent, whereas currently, the gross So, the growth margin level, yes, it has increased, increase can be attributed to couple of things, especially one is the growth in the non-RSE sales like the SE, IG and the component and but what we intend to see is the increase would have been much better reflected if the RSE commodity impacts were being passed on much more in the area type, especially under the current turbulent situation, there is always a lag. So, that has slightly dragged down, but overall still there is an increase in the gross margin one. Two, what Rajesh D said in his opening demand, the company has booked a correct loss of approximately 10 per ounce,

which

has also led to a reduction in the gross margin what we see in the numbers. So, if both were not there, yes, the gross margin would have been much better.

Okay. Okay. And you showed this, you know, this BLDC Motor Joint Venture. So, what is the game plan here? We require BLDC motors for our applications. What is the game plan here?

In terms of our exit from IPAVU and the stake sale to Ramratna Group, RRWL in the case of the key plan is clear. Last two years, the company had almost booked a loss of 12 crores, which has reduced its equity from 22 crores to almost 20 crores. So, there was a loss of 12 crores And RRWL wanted to further scale up the business and we are trying to, and we are looking to venture into other businesses, other motors, the non VLGC segment as well, and the high FXP motors and others, which is not of great interest to Effect Durable, and Effect Durable also has options to source motors, so while we will continue to work closely with K-Power 4, even after the stage stage in terms of developing will be customized VLGC motors, but So, we actually open the doors for us to explore opportunities of buying motors from elsewhere as well which we are related to. So, motor, a real easy motor asset is not some area of concern for us where otherwise effect durable already has in house capabilities to manufacture almost all the other components like controllers, heat exchangers, process, moldings, steel part everything in house. So, the poor competence remains within effectively and motor which we already have an option to buy from several other suppliers, we will be happy to get open for us.

So, that means you know.

We see our exit from is more of a maintaining a capital discipline and not as a retreat. This brings the management focus into our poor business which we see is already showing great

Okay, and lastly one question regarding this RAC business, how much you know we do and with you know the outdoor and indoor unit, the mix is how much you know in favor of outdoor and indoor? Can you please give it that number in terms of percent? How much how much revenue would you from indoor units, how much would you from outdoor units that is what I am asking?

See overall revenue was 150 crores in this quarter and almost 780 crores for the entire actual for this year. The revenue is not calculated separately for indoor and outdoor units because RAC is sold as a single complete set to a customer. So, we have we are going to categorize here window ACs and split ACs. And our total installed capacity as of date is almost 2.3 million in terms.

Ok, and you have actually the compressor inventory or you know complete tie up with the compressor for this entire year whatever you are going to manufacture fully 100 percent?

Yes, so in terms of compression the current domestic manufacturing capability within India Since I have been there I have been a you know extending our ceiling all and in terms of overall pressure capacity available and the requirement. So, we have priorities in place, we have already been securing compressures from the two large player Philly and GMCC and they have ramp-up their capacity. So, we do not see any shortfall and we will be working with them on the competitive risks.

Ok, so what is the total volume you are expecting this year fully?

So, AC market the market is on a track to definitely go this year and our estimation is that for the complete year AC industry is looking at the definite growth of anywhere between 20 and 25 percent compared to last year.

No, no for you your volume I am asking for 27, for 27.

So, we do not give forward looking numbers, but looking at the trend for H1, you see this especially has grown in value terms by almost 58.2 percent. In volume terms, it would have grown by close to 45 percent. That is my estimate because there is an increase in the ASPs.

So, you meant to maintain that in a 45 percent?

I mean we do not give out forward looking numbers, but yes we are looking at industry And as Kepa continues its focus on increasing its share of business and nuclear growth in partnership with newer customers, we definitely believe that we should outgrow the industry.

Okay. I am sorry, sir. I could not listen to you properly. Anyway, all the best, sir. Thank you. Thank you.

Thank you. The next question comes from the line of Rajiv Mehta from Yes Securities. Please go ahead.

Yeah, hi, good morning. Sir, I mean, your voice is not very clear, but still, I'm going to ask you on margins. Sir, on the margin side, is there any pass-through left from our side to our customer and which will reflect, say, from October onwards or in the second half? Is there anything, is the lag pricing impact left for us, which will be reflected and will support a better margin trajectory in the second half of the year? And if you can also tell us what will be your explicit margin guidance for the whole year, maybe next year also, so that we need to understand how the operating leverage, you know, how the leverage at the PAT level, earnings level will play out, because we've been seeing that while the top line is increasing significantly, But, you know, your EBITDA and your, you know, PATS numbers are, you know, have been not commensurately growing. So, if you can just give us whether any margin pass-through is left and what will be your explicit margin guidance and earnings growth guidance, maybe next year, whether you will see earnings growth being better than top line.

So, thank you on pass-through. Yes, there is the portion still to grow because this is an ongoing process. So, at any given point of time, in real time, this will always be a lag, because our pricing agreements with most of the large customers is on the basis of quarter to quarter. So, last year, the last quarter's pricing cases are passed on in the following quarter. That's how it has been working since several past several years and for the fair industry. So, at any given point of time, yes, there will be some lag, but having said that, overall Overall, I guess there is not any significant gap left in terms of talking on the commodity in

relation to the brand customers that is 0.1.

So, here in like I have shared earlier, the biggest brand for us has been the forex fluctuation, which definitely is an area of concern and we are working on it. So, forex fluctuation is something which is which cannot be passed from the end time and the payments, then the payments are made to the customer that the rupee has been depreciating. in regards to USDN specially with regards to CMT is an area of concern and we are keeping a bit continuous watch on it. So, that is something where we need to definitely work to improve our order of margins as well. Again in terms of the outlook for margin growth in the future 2 areas which I mentioned earlier, One, with our discipline on recovering the TLA discount which are passed on to the brands earlier, as we roll back in the phase manner, definitely the margins would improve going forward. So, that is one thing I may be here we are working on. And two is the protect mixture with specially the largest small domestic appliances being margin equity as the overall mix of the

And sir, in line with the capacity expansion that we are doing, you know besides ISEN, so whatever Your capacity is tied up for Hisense. Hisense will hopefully scale up. But for the other capacity, I mean, has it tied up with customers? How are you thinking about utilization of those capacity coming through in the next year or next to next year? What is the visibility on utilization of the upcoming capacity?

So, I think in terms of our existing capacity, especially in our previous 2 plants, namely Terragon and URE, the capacity utilized are significantly much better and we have been, so those 2 plants have been delivering good capacity utilization for us and the revenue and the margins as well. For us, the challenge since last couple of quarters was always utilizing this capacity. But the question is, thank you. So, today I am going to discuss your perspective on the table. The answer that is, oh, I am going to discuss the conversation already. Oh, I am going to discuss what you have to be taking on camera. So, I'm going to discuss the future of the meeting. Which I'm going to discuss the conversation, but I also have to discuss next question, which So, with both this we will definitely see a better utilization of our newly created extra capacity as recently now we hope to use and with that deliver on the overall capacity utilization is going to be safe.

And do we get some money by you know divesting that 50 percent in that JV to Ram Rasna group? I mean would we get some consideration what What will be that consideration?

Consideration.

Consideration what is the entire 50% stake is if 15 crore will be.

Okay. You got it, sir. Thank you, and that's enough. Thank you, Rajiv.

Thank you. Ladies and gentlemen, who wishes to ask a question may press star and 1 on your 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. We will wait for a moment while the question queue assembles. Ladies and gentlemen, we will take this as the last question for today. I now hand over to management for closing comments. Over to you, sir.

Thank you all for participating in the earnings conference today. I hope you have been able to answer your questions satisfactorily. And thanks to DEM Capital for organizing the conference today. Thank you all. Thank you so much.

Thank you. On behalf of IPAC Durable and DEM Capital Limited, that concludes this conference. Thanks for joining us. You may now disconnect your lines.