Epigral Limited (EPIGRAL) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Epigrel Limited's Q1F27 earnings conference call. 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 and zero on your touchtone phone. Please note that this conference has been recorded. I now hand the conference over to Arya Patel, MK Global Financial Services Limited. Thank you, and over to you.

Thank you, Ameerat. Good evening, everyone. Today, we are here for Epicles Limited's Q1FI27 earnings conference call. We would like to thank the management for giving us the opportunity to host the earnings call. On this call, we are joined with Epicles Management, represented by Mr. Malik Patel, Chairman and Managing Director, Mr. Kaushal Soparkar, Executive Director, Mr. Rakesh Agarwal, Chief Financial Officer, and Mr. Milind Koteja, Investor Relations and Strategy. I would now like to invite Mr. Maulik Patel to initiate the proceedings with his opening remarks, post which we'll have an interactive Q&A session. Thank you, and over to you, sir.

Thank you, Ajak. Great evening, everyone, and welcome to the call to discuss Epicurel's Quantum 1 F527 performance. I believe you had an opportunity to view the Arneek's presentation that was released earlier today. Waterborne FI21 presented a highly challenging operating environment across all the segments, including chemicals. The ongoing waste-racia conflict directly impacted the cost structure for both raw materials and finished goods. Furthermore, severe disruptions to shipping lines led to the transit delays and the logistical constraints. The market volatility made business execution difficult. However, we are seeing a visible recovery compared to operation level, and we expect the macroeconomic environment to stabilize and improve as we move forward. Even against this volatile backdrop, Happy Gloss demonstrated a resilience, delivering a revenue growth of 15% and EBITDA margin of 25%. This performance was driven by the increased sales volume. and improved realization. This growth was primarily on account of diversified product basket of the company. Our diversified product portfolio provided a critical resilience in this challenging quarter. While certain segments faced headwind, our alternative product line stepped into the offset. This impacts and sustains our overall growth momentum. We firmly believe that as we further diversify, it will enable us to deliver consistent growth over a longer period of time. Our ongoing capacity expansion projects for epichloro hydrating and the CPVC raising are progressing as per timeline and within budget. With demand for both the products projected to maintain a double-digit CSDR over the coming years, Our enhanced infrastructure is perfectly positioned to capture India's expanding market and drive performance. I am also pleased to announce that our board has approved a strategic capex plant for two new projects. We are entering into the epoxy resin and formulation with the capacity of 125,000 tons per annum and setting up a multipurpose plant. Epoxy resin and combination is a critical material used for high-performance and quality-driven applications. As India grows, the demand for high-quality infrastructure development, automobiles, renewable energy, electronics is increasing rapidly and leading to the growth in the demand for epoxy resin. This move is strategically significant for the company as a key raw material required for manufacturing epoxy resin, including its anti-chlorohydrin and the caustic soda are already produced within our integrated manufacturing complex. More than 50% of the raw material value for the proposed project will be sourced internally, further strengthening our integration advantages and operational efficiency. In tandem, the company is setting up a multi-purpose plant to manufacture downstream products of the etichloroidine and the chlorodolline vanishing. This facility is aimed at addressing the growing domestic demand for pharmaceutical and hydrochemical intermediates and water-dispend chemicals in India. In line with our phased development approach, we are also establishing a pilot plant facility for both epoxy resin and formulations and MPP, multi-purpose facility, which is expected to be operational by quarter 2 FY2027. This pilot facility will help validate product quality, optimize manufacturing processes, and facilitate early customer approvals ahead of full commercial scale operation. This strategic expansion marks our forward integration into the advanced materials and the specialty chemicals segment, while further designing our integrated complex. This investment reflects our ongoing commitment to building a highly integrated manufacturing platform and diversifying our portfolio to deliver long-term stakeholder value. I now hand over the call to Mr. Rakesh Agrawal, who will take us through the financials.

Thank you. Year-on-year revenue increased by 15% to 709 crores compared to 615 crores in Q126 on an account in sales volume and also because of the increase in realization. EBITDA in absolute term increased by 10% to Rs.179 crores compared to 163 crores in Q126. EBITDA margin stood at 25% versus 27% in Q126. PAT grew by 25% to Rs.99 crore versus comparable adjusted PAT of Rs.79 crore in Q1-26. In fact, in the corresponding previous quarter, we have announced a profit of Rs.160 crore that includes Rs.81 crore on account of the deferred tax adjustment. So, after adjusting the PAT of Rs.79, we have compared. ROC stood at 16% as on 30th June versus 24% as on 30th June 25 due to drop in earnings for trailing 12 months and also because of sizable capital working progress. If you remove capital working progress, then ROC stands at 18% for Q127. Net debt to EBITDA stood at 0.8% as on 30th June versus 0.6% as on 30th June 25 on account of lower earnings for trailing 12 months and also debt increase. We have spent Rs.62 crores on capex in Q1-27. Our lab lab stood at Rs.474 crores vs. 439 crores as on 30th June 2021. With this, we can now open the floor for questions.

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-down 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'll wait for a moment while the question queue assembles. The first question is from the line of Nirav Chimudia from Anvil Wealth. Please go ahead.

Yes, sir. Good evening, and thanks for the opportunity. Sir, a few questions. So, first, on the epoxy side, let's say, if you can help us explain that the capacity announcement is predominantly for the LER, or it also includes the value-added products.

No, this capacity which we have announced, this is including LER and value-added products in the population as well, yes.

Okay, okay, but predominantly this 1,50000 tons of capacity wood in result can produce up to 1,50000 tons of LER. That's the right assumption to make? 100,000? 125,000 tons, which we have announced.

No, Aliyah will be a little bit lower size, but it is a mix of all products including Aliyah, this capacity it is. Correct. So, our plan is very clear, you know, 50% of the apichloroids you would like to consume in-house, and 50% we will sell continuously in the market. Correct, correct, correct.

And when we...

After our expansion of new catex of apichloroids. Perfect. The total capacity of the company will be eventually around net KTA, one net 10. So also 50% would like to consume in-house in the epoxy resin and its derivative, and remaining 50% we will sell in the market.

Perfect. And when we convert AGR into value-added products, predominantly the additional raw material required would be bisphenol, right, and not the ECH.

Right.

Sir, just continuing here, where do you see the markets moving for the epoxy over the next three, four years, and if you can also help us understand which of the user industries would be driving this growth. Also, if you can help us explain what's the current market size for epoxy resin divided between LER and the value-added products.

Yeah, so the epoxy market, as we know, it will be majorly consumed in India, specifically in the windmill blades. It will go into automotive industry. It will go into construction industry. And then again, it has applications in various other downstream products, which are yet to grow in India. And considering current situation, the demand for epoxy to our estimate is around somewhere around 2,50 to 3 lakh ton, and which we expect to grow in a double digit percentage from here on. So, considering that, the additional supply that will come from us, I guess it will be easily absorbed in the market, considering the way India is growing for all the quality kind of products, and that's where the demand for this should go up.

Perfect. So, what would be our focus?

You know, one more point, you know, we are also expecting because in Europe, all the chemicals planned are difficult to survive. So, we believe that eventually it is going to be exported from India. Once the FTA agreement is done, so we are at par with other Asian players, and being a very logistical point of view, we are near to Europe, so we consider that Europe is also going to be a big market going future once the FTA agreement is done with India.

Correct. I was just coming to that point. So, what would be our competitive advantage here? So, because we have a backward integration in terms of ECH as well as the caustic soda, so the competitive advantage would be more based on the lowest cost production of LER or would it be based on the differentiated products which is generally required for the export market?

So, it is going to be both as a background integrated as well as we will have a mixed portfolio. We will start with basic product and eventually we will go into the specialty. That's the priority as of now. But, yeah.

Correct. And according to your best estimate, like in terms of the value-added products, how much is the approval time from the customers? Because there the customers are generally stickier in terms of… The materials from where they are purchasing on. So, considering that point, where do you see the approval cycles from the customers, specifically from the value-added portfolio?

Look, that's a very good question. You know, you must have seen in my presentation I mentioned about the pilot plan. We are dedicately creating a pilot plant and we will take approval of the customers wherever it is required. But, you know, in epoxy resin market, not all applications require a customer approval well in advance. And it takes time. Certain applicants, it is taking time, but not all applications. So, definitely, initially, once we start a plant, we will start with basic thing and eventually we will go into the speciality. But we are setting up the pilot plant just to make it efficient. Once we commission both plant epoxy as well as our existing multi-perspectant as a value-added product of ECH apichloroetrine as well as eurodollary and all. So we can able to use once we commission it before that we are able to use. And products produce, all the batteries and the products, and the customer trials and afterwards is done very late. Based on our past experience, we do not want to delay that. So that's why we have invested in last six months in the pilot plan, which is going to be commissioned by September this year. So we have enough time for the pilot facility to commission product-to-product application-wise, and by the time we commission our both the Perfect, perfect.

The second question is on the chlorotoline. So, where are we currently in terms of the product placement in the market? I mean, are we selling the base products of ring chlorination where OCT, PCT, 3,4, DCT are the products which forms there? Or are we also doing photochlorination and the cyanation products which have a slightly complex process and a better realization? So where do you see this business moving over next one or two years in terms of going into the complexity of process and hence the profitability part?

So, yeah, it's a good question, Anirav, and I think we learned from our past couple of years' experience, you know, about the chlorotolline because it took us a lot of time to take approval because we don't have the pilot facility for the trial, which is which customers of pharmaceuticals and hydrochemicals, which take their approval from their CDMO customers. And that we realized, and I think this time, before we plan our expansion, we would like to set up a pilot plan, as I mentioned. And that is the reason. And definitely, as you mentioned, the OCT, PCT, or any dichlorotolus derivatives, which we are planning as a photochlorination, we would like to go downstream as much as possible as the intermediate. And based on our learning of last two years, we have identified a couple of products which has a much higher potential than what we have set up a plant in the first phase. So, definitely existing product portfolio of chlorotolids we are expanding along with Epic chloroadden derivatives which is used for the water treatment chemicals intermediate which are currently imported directly into the N application which also wanted to cover in our existing multipurpose planos.

Correct. So, the base products of chlorotolines are currently getting sold. It's like going into those complex processes and products. Now, based on this pilot plant, we would be moving ahead with those products sooner.

Yeah. And as you said, you know, eventually our goal is to target probably next year's time or target is to reach. Once the multipurpose plant will be coming, our target is to reach. All the derivatives, specialty product portfolio, which we are producing in multi-purpose plant, along with the chloro-volume derivatives, we want it to close to around $500,000 revenue you would like to target. That's our first milestone you would like to activate.

And this should be in FY29 or could be sooner than.

Yes, it could be in FY29, because in FY28, we are targeting to complete the MPP, so the AMPOP will happen gradually, so maybe FY29 or FY30.

Perfect, perfect. Sir, last big grouping question, so what were our ECU realizations for first quarter, and if you can also share for Q4 of FY26 would be very helpful.

So, Q1 FY27, the ECU was around 35,000, 36,000.

And for the fourth quarter? Fourth quarter, it was around 30,000.

30? Yes, 3-0.

Okay, fine. And last, if I can just squeeze on, what were the capacity utilization for Caustic Soda, ECH, CMS, and CPVC business for Q1?

So, Caustic Soda, it would be having around 75%. ECH was again around 70-75%. Okay. ECH, CPVC was around 50-55%.

Okay.

Fluoroflufence was around 100%.

Okay. And peroxide? Around 85-90%. Perfect. Thank you so much and wish you all the best.

Thank you. Thank you. The next question is from the line of Rohit Sina from Suniti Securities. Please go ahead.

Yeah. Thank you for taking my question, sir. Some of my questions are already answered. Just a couple from my side. One is, out of this 600 code APICS, could you give us the break up for this, I mean, our re-proxination and MPP project?

Rohit, it will be difficult to give the break up as in announcement we have kept a combined.

Okay.

Okay, fair enough.

And just wanted to understand as we are adding our ECH capacity, I mean doubling our ECH capacity from 50,000 to 100,000, and here for epochization as well as MPP would be requiring ECH. So, just after these, as you were saying, 50% would be consuming internally, would that be enough? I mean, for all these 125,000 epoxy and MPP, I mean, 50% would be available for sale or would there be further, you can say, consumption for?

In the NCP plant, which is other than epoxy application, the quantity requirement of epi-fluoridin is not that big. So definitely, we will continue on our customers, which we have catered so far. We will continue going forward also. So definitely, as I mentioned, 50% of the epi-fluoridin will remain for the existing customers, which we are catering right now.

Got it. Got it. And sir, as epoxy racing would be adding, margins for overall combined business will remain in that 20-24% kind of range which we were guiding earlier or any changes in that?

Definitely epoxy is, you know, if you say compared to, it's a high turnover in terms of volume gain, compared to other products what we have in the basket. So definitely, emitter margin will be much lesser, because if you see the, compared to the investment, the ratio of turnover in the epoxy within is almost 4 times. Which is almost three times higher than what we have, that we are having right now in our existing portfolio. So, definitely EBITDA margin in terms of percentage, definitely it is coming lower, but in terms of the absolute value, I think it is substantial value for the company.

And just to add to that, we are, I mean, whenever we evaluate the project, our focus is ROC. So in that way, epoxy, even with that kind of margin, it's in the ROC bracket that we generally target for.

Fair enough.

Fair enough.

And just a last question on the KPIs of this 600 crore, at peak level, what kind of maximum revenue would you be generating?

Combining both the projects. Combining both the projects, the peak can be in the range of 1,000 to 1,500 a year.

Got it.

Sorry, my mistake.

My mistake, 1,300 to 1,500 a year. Okay, 1,300 to 1,500. Fair enough. That's it for my session.

Thank you, and best of luck. Thank you. The next question is from the line of Abhinav Mandovara from Equitas Investments. Please go ahead.

Yeah, thanks for the opportunity. My first question was regarding the current chlorine realizations for Q1 and current, and you mentioned ECU realizations for caustics were in the range of 35,000 to 36,000. What are the current realizations as of today? And since the warlike situation has prolonged, do we see caustic inputs coming in and any supply side disruptions happening around that?

Hello?

Sorry, can you repeat your question? Your volume was a bit low.

Yeah.

Am I audible now?

Yes, yes, yes.

Yeah, my first question was regarding the chlorine realizations for Q1 and currently, and for ECU realizations, for Q1 you mentioned 35,000 range. What are the current ECU realizations, and since the war has prolonged, do you see caustic being imported and any disruption happened over there?

The torrent realizations have been in the range of around 4,000, negative 4,000, and the ECU for the quarter one was around 35,000, and we considering current when the things have cooled off a bit, the ECU currently also has been in the range of around 31, 32,000. Okay.

And what are the current PVC prices? Sorry?

So currently, there was an MIP which came last yesterday, and the PVC prices have increased. So it is around 85-84. So does this create a negative impact? Because this will be a new floor. And could you help us with the impact on the PVC?

So, PVC is a raw material for the C-PVC application, and normally if you see the major difference was coming from globally, it is coming from a carbide-based PVC, a carbide-based PVC which is made out of coal that is having a lower price than the ethylene-based PVC. So, I think because of the MIP, major effect was on the carbide-based PVC, not on the ethylene-based PVC. So, we use ethylene-based PVC. So, I don't think so. Is there any major impact? But I think it is support. You know, people who consume PVC, which compared with our CPVC, they don't understand. Sometimes we cannot manufacture CPVC from the carbide-based PVC. So, that's why it is easier to convince our customers because of the MIP.

So, we can pass on the entire incremental price, right?

Not immediately, but yeah, gradually. But it helps us to convince our customers in the CPVC industry that we cannot compare with any kind of PVC as a CPVC application is only for, we can manufacture good quality of CPVC only from the ethylene-based building.

Got it. Also, in the caustic space, we've seen a lot of capacity addition across the last couple of years, across a lot of players, and majority of it was exported to a couple of places. Now, since there is a lot of supply chain problems, do you see that the domestic space, there is a lot of competition given that your capacity utilization has also decreased to 75?

Yeah, that is true. You are right. What we have forecasted, our CTVC growth, which was not came compared to last year and this year. But normally, we are expecting because now the C-PVC pricing and the PVC pricing, the difference is not big in a huge way. So, majority of the applications which is used for the PVC also are converting into the C-PVC application, not only for the hot water pipe application. So, the volumes we should see now the increase in the current financial year and the going forward also. But, yeah, you are right that, you know, as a CPVC, growth because of the PVC fluctuation was so high in last. So, there is an effect in terms of inventory, so purchasing from all the customers of pipe. So, they are controlling their CPVC or the PVC inventory in a controlled way, and that's why the consumption is also affected, and the plant is also running a little lesser capacity. But we see normally the current quarter also because of the monsoon season, this is always the case throughout the year. You know, if you see the sales will start from quarter three and quarter four is a major two-quarter considered as a CPBC for the major growth in the country.

Right. So, my question was mainly for caustic. So, caustic also, we've seen a lot of capacity addition and volume, capacity utilization has reduced. So, just wanted to understand because in the last couple of years, a lot of capacity was built in caustic, which was getting up, like, ported, which because of current war, like, scenario, supply chain is disrupted. So, could you help me in the caustic space?

Thank you. I believe, you know, because of the ways of alumina expansion is happening in the country, so we believe we are going to be net import of caustic continuously in India, irrespective of the capacity addition will happen gradually, which people have announced in the past. Good morning, everyone. I don't think so, India will be surplus. Definitely, once the plant is commissioned, and that plant is also going to commission in a gradual way. So, based on our past experience, irrespective, you know, wherever the caustic expansion happens, definitely you will face a challenge for a couple of years. But eventually, as a country is growing there in terms of the application, in terms of the consumption, in terms of the… A downstream application in terms of daily use as well as in the aluminum application. So we don't find that it is eventually that whatever capacity we are adding, eventually in the future it will be absorbed. So definitely for the short term we face the issue, but not in the long term.

Got it. And in terms of epoxy, there are a lot of players who have come up with capacity already, like DCM, Freedom, Graphene, etc., etc. So do you think this will also be a domestic substitute or like ECS, we would also be trying to export this?

No, this is definitely right now. Our long-term goal and approach is to capture a customer in India only because, you know, India's market is growing continuously because mainly it is used in infrastructure-based applications. And that is growing even in the renewable energy, windmill is also growing. So, our target long-term is that, but, you know, if once we commission the project, because, you know, certain size of the project does not make sense to set up, because when we set up a project, we keep always in the mind that we are doing it for next three to five years period, you know, once we commission the project. So, initially, if we might need to export, and the situation in Europe, as I mentioned in the past. That is a little tight, and there is a possibility, and we are going to be at par with other Asian players also, once the FT agreement done is zero. So, initially, we might export like other products which we have done in epic chloride in the other product also. So, same time, you know, initially, we will export, but eventually, this is going to be catered to the domestic Indian market only.

Got it. And what are the current ECS realizations?

Current ECS realization is, it's almost close to around, you know, 180 to 185 apes, yeah.

So the prices have reduced, it was around 200 to 10, right, earlier?

Yeah, it is compared to all the products which was there during the war time, which has gone to peak, that has reduced. And again, now, you know, it has gone down to 175 levels, and I think it is now going up again to 185 to 190 levels. So it is going up and down based on the situation in the global scenario right now, ups and downs based on the oil price and the logistic cost.

And how much will we have power integration currently, and what is our foresight going forward?

So we are very clear, you know, we are not going to invest further in the captive power plant. Whatever we are going further, the energy requirement is going to be captured from solar and wind hybrid. This is an agreement which we are doing with the different suppliers on a long-term basis. So we already have a 20 megawatt hybrid arrangement with one particular agency. Now we are doing, already we need another contract of 20 megawatt. And going future as and when our energy requirement will increase, we will add more and more solar and wind in the future. So there is no great advantage to set up a captive power front at this moment of time. Where the government has given a great advantage by doing a long-term agreement with third parties. And you can reduce your cost as good as your sceptic power plant.

Got it, got it. Thank you so much for getting back into you for further questions.

Thank you. Thank you.

Thank you. The next question is from the line of Harishat Singh Kanya from Robo Capital. Please go ahead.

Hello. An audible? Yes. Yeah, so congratulations on a great set of results. So, just to get a clearer understanding, so, from the 600 crore capex, we are adding, like, around 1,300 to 1,500 peak revenue, at peak revenue. So, would that take our, like, total peak potential to, like, around, say, 4,000 to 4,500 crores? Is that a correct understanding? Seeing we are, like, close to 2,500 crores earned, we have, like, done quite good utilization.

No, see, when we are at, I mean, last year we ended with 2400 CR at that point of time, we have still capacities that can be ramped up. Plus, along with that, we have commissioned the capacity. So, like chlorotholeons, costly soda, CPVC, the existing capacity can further contribute in FY27. Along with that, we are expected to commission our additional capacities of ECH and CPVC in a couple of months. So, that will further add. So, if I put together that numbers of the epoxy, resin, and the MPP over a period of time, we should land up somewhere around 500,000 CR once all the plants reach optimum level.

Okay. So, in the PPT, you have mentioned that the addressable market is going at 10-13%. So, do we expect the company to grow at a faster rate or at a similar rate?

See, we always aspire to grow at the range of 20%. That's the internal target or even higher than that. So definitely we would like to do that. But if you ask me, then on a 3-4 year period, we can go in the range of 15-20% CAGR. So one year can be here and there because of XYZ reason. But the way India demand is growing and the plant that the capacity that we have, eventually plant will ramp up and we can have a CAGR growth of 15-20% for next 5 years.

And this is on the top line or in the bottom line?

We target for both top line and bottom line.

Okay. Great. I think that's it from my side.

Best of luck.

Thank you.

The next question is from the line of Sakshi Trivedi from Sanko Mutual Funds. Please go ahead.

Hi, everyone. So, my question is regarding MPP project. Like, we are known that we are going to announce epoxy and other things. So, how it is MPP project is different from epoxy and FR?

Sorry, your question is that how MPP is different from epoxy and FR?

Like, what is the MP user use or what type of product we are going to do in MPP project?

In MPP, you know, we are targeting all chlorotribal derivatives and the epichlorohedrine derivatives, which is mostly in the water treatment chemicals, which are used in the pharmaceutical intermediate and the agrochemical intermediate. And epoxy resin and the formulation is mainly going into the infrastructure-based activity, including renewable energy and the automobile also, and the coating application also. So, this is two different end-use application and the customer base.

Okay. And second thing you have talked about like current EBITDA margins is around 25 to 26% and after commissioning of epoxy, it will be reduced. Then how much estimated margin we are expected from the 600 crore project?

See, it is difficult to give a number in terms of margin as, I mean, in terms of the epoxy, it's of a lower margin, but high assets or ROC will be intact. So what I can tell you is that going forward, we would always target to have an ROC around 20%. So we are targeting for that. Rather than giving guidance on margin, I can tell you that ROC we are targeting in the range of 20%.

Okay, okay. And, like, currently we have seen so much uptown in ECH while doing selling prices or higher glycine prices as well. So, what is the, like, projection for future? Like, are we expecting margins as per board approval or something different?

Actually, whenever we conceive a project, we don't consider based on the current situation because this is abnormal situation. The current crisis and the situation which is going on in the world, which is not going to sustain for a long-term point of view. So, when we consider a project, we always calculate based on the pre-war situation, what was the normal situation, and based on that, we conceive a project and what is approving based on that data and numbers.

Okay, okay. Got it. That is from my side. Thank you.

Thank you.

Thank you. The next question is from the line of Manish Bhataneh from 361 Capital. Please go ahead.

Thank you for the opportunity. So, my question is on the EPR oil trend. So, as Indonesia is implementing the B50 biodiesel pandemic, and as the glycerin is the bioproduct of the biodiesel, So, given that ginger is a by-product, so, how do you see this impacting the glycerin prices?

Your question is regarding the biodiesel or?

My question is regarding the glycerin project. As an epic owner, I know what is the glycerin, and glycerin is the biolog of the biodiesel. So, if they are moving from the B40 to B50, so given that they are moving to B50, so biodiesel will increase. So, as the supply of the glycerin will also increase. So, want to understand, like, how you are expecting the ACS project moving?

So, to be very honest, you know, this is helping in terms of this is based on the bower diesel, this is based on the palm oil base. Majority of the product which is coming on the palm oil byproduct coming out from the bower diesel. So, in the current situation where the crude oil price is not stable, because of that, the propylene price is not stable. So, propylene is a competition based. So, definitely, it helps in the current situation. The way the crude oil price is fluctuating, the glycerin price has not fluctuated that much. But at the same time, logistics plays also a major role. So, logistic cost has increased continuously in all the products globally because of the crude oil price in the current scenario. So, that much effect has come on the glycerin. There is nothing to do with the current situation and the glycerin price, you know, the power diesel policy and based on the glycerin decides which way it is moving and palm oil, you know, plantation of the palm oil and how is the production is coming out in every year based on that glycerin is moving rather than moving along with the propylene or the crude oil base. Yeah, this is completely different. There is no relation with the crude oil and the current situation.

No, no, I'm not asking about the crude oil. So what I'm asking is that as the glycerin is a bi-product of the biodiesel, glycerin is also the raw material for the ECS, right? So if the glycerin, if the biodiesel is in the high production, sort of the supply will increase. If the supply will increase, then the price of the glycerin will correct. And if the price of the glycerin will correct, so the ECS sizes will also get correct. So, that is what I am asking. Are you expecting that issues will have pressure on the realisation front?

So, that is true to some extent, but it is not only these factors which affect the glycerin price, you know. Sometimes the palm oil price also equally, and then the people, you know, it is like when you are calculating your energy cost, you are, you know, you need to take care of your byproduct also. So, people are considering the pricing of both the product. In a same way, you know, you can't neglect by-products, that's why it's free of cost or something. So whenever, palm oil is also, you know, it is also a very important factor in the designing the price of this thing. Not only if you say, you know, it is a by-product only, so you can neglect in terms of the cost, which is not the case. But you are right in some extent that this is a by-product when there is a pressure. It is true, but normally now the glycerin demand is globally, depends on the season. It is also increasing and sometimes it is down. So it depends on, there are a lot of other factors also decide the price of glycerin, not only as a by-product, you know, it is deciding factors.

Okay, we got it.

Thank you so much for the second question.

Thank you. The next question is from the line of Pratikhoza from Systematics Group. Please go ahead.

Yeah, it's time for opportunity. Just one question from outside. What will be the tip is for left by 28, I guess for left by 27, it's around 400,

so left by 22.

Your voice is not clear, Pratik. We can't hear.

No, so my question was, the question was on CAPEX.

So for FI27, I guess the CAPEX

means around 400 crores. What would be the CAPEX for FI28?

FI28, again, the CAPEX would be in the range of 400 CR.

So, 27 and 28, 400 crores.

Yes.

And tax rate would be around 25%?

Yes, that's right.

Thank you.

Thank you.

Thank you. The next question is from the line of Pujanshah from Molecule Ventures. Please go ahead. Hi. Mr. Poojan, may we request you use a microphone to ask a question?

Sure.

Hello.

Yes, Ujan.

Yes. Okay. Okay.

Yeah. So, first question would be on the KPX side. So, we are spending around 600 crores. So, how much will be for the internal and how much will we take the debt?

So, around 60%, 40% will be from the internal. Of course, around 60% will be from the debt.

Okay, got it, sir. And just to understand the current scenario of the EVC side, we have seen quite a volatility in PVC. So, just to understand, one of the first is how we are able to procure the raw material because ethylene-based, so we have seen the majority of the facility of EDC are based out of Miravish and that has been impacted and that's where the price has been spied. And so just want to understand how is the RM situation currently and are we able to procure the availability or we are facing some issues on the procurement of PVC that is impacting the ultimate impact on CPC.

Yeah, so what you said is true.

Things were a bit volatile in the full quarter, and especially in April and May, but things had been stabilized then once it was kind of a peace talk. But again, because of the situation which is happening in the market, The situation is, again, the prices are going up, but again, current prices are going up because of the MIP. So I guess overall, because of this, there should be a stability in the price. And I guess if I look at from a long-term perspective, this will kind of bring a stability and it will be good for overall market put together. So we are positive on this rather than thinking on the other way around.

Right, and so just to understand on the current realization of CPC, what is the current realization is pertaining right now, and what is the hike we are expecting after increasing the PVC price due to MIP?

That thing has been already factored, and currently, the CPVC prices will be in the range of 115, 110. So, again, now, again, how much the price will go up? Because the impact might come because of the issue in West Asia, where its crude is impacting. But again, time will derives, too, only to comment how things will pan out in the coming next two months.

What I am asking, just to answer your question, you know, the ethylene-based PVC price was already on the higher side than the MIT was declared. So, I don't think so any major impact will come on the C-PVC price. You know, this will affect only the coal-based PVC, which people are using for the PVC application. Got it.

Because why I'm asking the similar question is because the PVC in the previous cycle when the oil was spiked, the prices were inch up to $105 or $1010. I think that was the price range which was being inch up in the PVC. And there was a sudden fall to $275. So, in that meanwhile, we might have hold some inventory which might be beneficial. But ultimately, right now, the prices have been spiking up and CCS is not. So that might be shrinking our EBITDA margin for a short-term period. So that's why my question was in a similar range.

If it's too, I mean, difficult to look at numbers on a quarter to quarter basis or even month to month basis, here put together in this side or that side, things get stabilized and we land up at the reasonable kind of company level margin.

Yeah, and last question would be on the CPC, because demand is pretty weak right now, and we were expecting in Q2 that the demand might be revived, but what is what has been happening is the industry is facing additional capacity from grassing. Obviously, they have started, and obviously, we will start our own facility as well of 75,000. So, how do you think the situation will pan out for FY27 in the CPVC site?

See, in India, when the companies are expanding, definitely there is a blurb for some point of time. But this customer approval and enhancement of the plant is also taking some time. It is not that easy. So, to ramp up and to reach that optimization, it will take time always whenever people are expanding their capacity. And same time, as I mentioned, in India, it is continuously growing. So, eventually, this capacity will be absorbed in India. And based on that, people are expanding the capacity of the CPVC. Yes, but you are right that for some point of time, there is overlapping and the overcapacity will be there. But in the long term, we are very positive in terms of the growth of the infrastructure which is happening in India.

Got it, sir. Thank you so much and all the best for the current year.

Thank you so much.

Thank you. The next question is from the line of Abhinav Mandovra from Equitas Investments.

Please go ahead.

Mr. Mandovra, your line has been unmuted. Please go ahead with your question.

Yeah, my question was regarding demand supply and rising scenario for hydrogen peroxide and chloromethane and second follow-up was why has the caustic current utilization have been reduced from previous quarters?

No, no, this is, normally we are running at full capacity only. Because of some technical issues, we might reduce the capacity in terms of hydrogen peroxide or the fluoromethan plant. But, yeah, major variation in terms of the gas price and the methanol price, it is happening right now. Because of the war situation, methanol price is very fluctuating, and the hydrogen peroxide is, we are generating as a co-product along with the chloroalkali, but most of the other competitors, they are producing from the natural gas. So, because of that, there is an uptake in terms of the hydrogen peroxide currently, because of it is directly related to, as a complication, it is directly related to the gas consumption.

Okay.

A major issue in terms of the consumption at the moment of time.

Okay.

Thank you. The next question is from the line of Rohit Nagraj from 361 Capital. Please go ahead.

Yeah. Thanks for the opportunity and congrats on sequentially good performance. Just one question on the chlorotolions front. What is the total CAPEX that is envisaged on the project? We did some CAPEX for the base chlorotolions, and now we are expecting the forward integration into value-added products. So, what is the total CAPEX and what could be the overall ROC requirement just to understand that there would be possibility that some of the base chlorotolins would be used for, I mean, captively consumed for forward integration. So, overall basis, what is the total CAPEX and what is the ROC that we are expecting?

So, in terms of CAPEX, that in Torotolumes, we have done CAPEX in around 250 CR. And again, once the plant reaches at optimum level, the revenue would be in the range of 300 to 350 CR. And again, once the multi-purpose plant commission and that starts ramping up, that all put together, we should end up in the range of 700 to 800 CR kind of top line.

Okay, so this is the consolidated top line including the previous project and the newer MPP case.

Yes, yes, yes.

Oh, and here too, our expectation is the 20 to 25 percent margins and probably a gestation period of three to four years to reach the peak utilization.

Yeah, so the expected margin would be in the range of 20 to 23 percent kind of things. And again, once we commission the plant, it will take time to ramp up maybe one and a half or two years time to reach the optimum level utilization levels.

Perfect. That's all from my side. Thank you and all the best.

Thank you. Thank you. Ladies and gentlemen, we will take that as the last question of the day. And I now hand the contents over to the management for closing comments.

Good morning, everyone. In conclusion, I would like to convey that we are moving in line with our strategy through our expansion plans and diversification. In terms of multi-product catering in various industries, we are targeting consistent growth. I would like to thank you all for joining us here today. Please feel free to reach our IR if there are still any unanswered questions. Thank you, everyone, for your participation.

Thank you. On behalf of Epicurel Limited, that concludes this conference. Thank you for joining us and you'll be now with Connect Your Lines.