Ladies and gentlemen, good day and welcome to the UFlex Limited Q2 FY25 Earnings Conference Call hosted by Dolat Capital. 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 the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sachin Bobade from Dolat Capital. Thank you, and over to you, sir. Thank you, Dumnayya, and good evening, everyone. On behalf of Dolat Capital, I welcome you all to the Q2 FY25 Earnings Conference Call of UFlex Limited. Hope you all and your family members are staying safe and healthy. From the management side, we have with us Mr. Rajesh Bhatia, Group President and Chief Financial Officer, and Mr. Surajit Pal, Vice President, Investor Relatio ns. Now I hand the floor to Mr. Surajit Pal for the opening. Over to you, sir. Thank you, Sachin. Good afternoon, ladies and gentlemen. Thank you for joining us today for the Q2 FY25 Earnings Call of UFlex Limited. Let me draw your attention to the fact that on this call, our discussion will include certain forward-looking statements which have predictions, projections, or other estimates about future events. These estimates reflect management's current expectations about the future performance of the company. Please note that these estimates involve several risks and uncertainties that could cause our actual results to differ materially from what is expressed or implied. I would now request Mr. Rajesh Bhatia, Group President and CFO, for these opening remarks, following which we will open the forum for an interactive session and answer a question-and-answer session. Over to you, sir. Thank you. Thank you, Surajit. Thanks for the introduction, and welcome all the participants on this call. The underlying for the Q2 is that it has been a continuance of the good momentum what we started the Q1 with, and the same momentum continues in the packaging sales business, India, and overseas. And that's what is reflected in results. Even on the packaging side, especially our packaging, for aseptic packaging, this is normally Q2 and Q3 are normally lean seasons. But still, in this season, we've seen a much higher capacity utilization level of 93%, versus 83% in the last year. The packaging film prices in India are much better. Overseas could be still better, but they'll be because there are a lot of exports happening from India, so the prices are remaining in a sort of check. But I think the volume has picked up in those markets as well, and that's all as well. So to give you perspective on the numbers, you would have gone through those, but still, I'll recreate them. So the top line consolidated, we had a 13.7% increase in value to about INR 3,853 or so. And the backdrop is that the packaging films revenue witnessed a growth of 23.4% on a year-on-year basis. So this 13.7% value growth, what we see in the Q2 is backed by a 23.4% value growth in the packaging films business revenue. The sales volume for the Q2 are up 10.9% year-on-year, again driven by the packaging films sales volume growth of about 14.6%. The Q2 standalone revenue increased by 19.3% value to about INR 1,970, again driven by the packaging films revenue growth of 39% value. Q2 standalone sales volume is up by 4.2% YoY, driven by the packaging films sales volume growth of 10.8% YoY. As I said earlier, the aseptic packaging business continues to do extremely well, and this quarter we achieved a capacity utilization of 93% even in this lean period. The same period last year, we had achieved a capacity utilization of 83%. So on a YoY basis, this quarter we've seen a 17.6% volume growth, which is there. Even in the current, even in the month gone by, which is October, the sales volume went up by about 24%. So if I talk about October last year versus October this year, so the good momentum in that business is continuing. And post the capacity extension to 12 billion packs, which we are expecting by the end of December. The Q1 or Q4 will be the first period during this cycle 2025-26 during which we have that capacity available. We are expecting as of now that business that enhanced capacity overall utilization for Q4 will be about 83% even post the enhanced capacity to 12 billion packs, which means that on a volume basis, we have a 20% volume increase in the sales volume. That's it about the aseptic business. Now, India BOPET industry, in particular, I just thought I'd make a mention to you. Last quarter, when we were there on this call, I had indicated that towards the end the prices and the margins had increased, but more or less they were reflected in the period post June 15. So the full impact for the quarter was not there. But this quarter, we've seen the full impact of the increases what happened till 15th of June 2024. And thereafter, also, there have been increases. So if I see on a Q2 versus Q1, at a gross margin level, industrial-wide margins have gone up by about 200-odd%. And even in the current quarter, over the Q2 quarter, the margins are up by about 20%, which means that if the prices continue to remain the way they are, the current quarter packaging films business, at least on the tech side, will also be better in this quarter even over the Q2, which on an industry-wide basis has already seen about 200-plus% the gross margin increase. The BOPP industry also, the gross margin increased by about 36% in Q2 over Q1. But unfortunately, we've seen some price correction in that market. In the current quarter that is going on, we are down to almost at the Q1 levels. Whatever we achieved in Q2, if we talk at the current levels, all those gains have been demonetized. On an industry-wide basis, again, the BOPET exports from India in the quarter reduced by about 10% in Q2 over Q1, largely because the prices were good, domestic prices were good in this quarter. Even for BOPP, they were down 5% Q2 versus Q1, again, largely because of the higher domestic prices, the exports contracted a bit. For Uflex India in Q2, the volume growth in the PET business has been about 14-odd%. While the overall packaging films volume growth, we've seen about 10.8%, but for the PET, where we have a dominant capacity and BOPP capacity, our BOPP capacity is rather not too high. So we witnessed about 14% volume increase in Q2. Having said that, all the good things, the flexible packaging margins in this quarter were impacted. And as usually happens, when the packaging films prices go up so steeply, there is always a lag effect in the flexible packaging margins because their prices are fixed for the last indexes which are pertaining to the previous month or quarter. And when those prices, when the raw material prices increase, so during that quarter or that month, you don't get such increases, but those increases come your way in the next month or the next quarter as per the terms of the customer. We've seen a contraction in margins in that given that we had a steep increase in the packaging films prices, and that's what sort of kept the margins, brought the margins down a bit both on a consolidated level as well as on a standalone level in this quarter. The exceptional items, again, the currency devaluation in Nigeria, Mexico, Egypt continue to affect some of those MTMs out of those translation losses. As I had explained earlier, also in Nigeria, we do business in Naira, in Mexico, in pesos, and Egypt in Egyptian pounds. And then the business, which is transacted in the local currencies, has to be converted into the reporting currency, which is INR, and there are devaluations of that currency vis-à-vis INR. So you will always have a situation where you will have those translation losses, which are exceptional in nature. We've seen Nigeria and Egypt and Mexico, all currencies are devaluing continuously, at least in the last two fiscal years. And even in this quarter, we've seen a currency loss of INR 79 crores in Nigeria, which was INR 99 crores in Q1. And in Mexico, we've seen a INR 14 crore loss, which was INR 61 crore in Q1. And in Egypt, the loss is zero, which was INR 39 crores in Q1. So while the losses have come down from a level of INR 180 crore in Q1 to about INR 92, 93 crores in Q2, but they still continue to appear on the P&L side. Ignoring these exceptional losses and ignoring some of the M2M of the currency swaps that we have, the normalized EBITDA for this quarter is INR 438 crores versus INR 408 crores in Q2 of FY24. Standalone EBITDA is up at INR 215 crores this quarter versus INR 168 crores in Q2 of the same period last year. And again, that is because the packaging films business has seen much higher prices and margins in the current financial year in the current quarter. But having said that, there is an impact of the packaging, flexible packaging margin contraction because of the reason that just explained. And the India business stands at an EBITDA of INR 215 crores versus INR 168 crores in Q2. The overseas business EBITDA is INR 223 crores this quarter versus INR 240 crores in the Q1. This has been impacted a little because of the higher energy cost in Hungary business in the Q2, which are now normalized in the current quarter. Our gross debt as of 30th September and net debt is at about INR 5,800-odd crores. Versus March position was about INR 5,600-odd crores. So we've seen a net debt increase of only INR 200 crores in this current system. And there are a few projects which are in the pipeline. And we are seeing completion happening in that chips plant, which we are expecting will come in H2. The expected timeline is between January to March. And this will be a game changer for our offshore business, given that while this will take care of our requirements of the PET chips in our Egypt business, but this will also cater to our European operations, our Nigeria operations, as well as our operations in the UAE. So all of them will become fully self-sufficient in terms of their raw material requirements. And still, we have certain surpluses over there, which we can, depending on the dynamics of the trades and all that, which we can export to Mexico or US business. So that, on a long-term basis, will take away the fluctuations in the quality and in the pricing of the raw material for the packaging industry and will bode well for the overall business in the years to come. This apart, we've announced an extension of new greenfield capacity in Egypt for our aseptic business, as we've been saying that the aseptic business in India has now been operating at more than 100% capacity for the last few years. And we've seen tremendous increase in scope, tremendous increase in exports in that winter season. And today, we say that we are looking at about 35%-40% exports, I mean, in India from India aseptic packaging business by exporting the aseptic packaging to the other world markets. But having tasted that success in that business, I've been saying over the last few calls that that business looks very exciting, and it's the time to take it to the global market. So we chose Egypt, especially because we know we are already there; it's quite a substantial business site for us. The cost parameters in Egypt is a big manpower. Energy costs are quite different from what you have in India. And it has an advantage that opportunity advantage, especially when you're looking at exporting to the Europe market. I think you have that advantage of nil duty when you export from Egypt into Europe. But apart from that, Egypt also consumes today close to about five billion packs a year, which is all imports. So that's the natural market. We are looking at the markets in Africa, which we are currently serving, the Middle East also. But at some point in time, we know that we have been exporting to our international customers. And at times, we've seen in season that because of that, sometimes we are not able to meet the local demands. So the local demand has always been a priority. It's only that during the lean period, which starts actually after 15th of August and goes until end of December in India, especially when the winter season sets in, the requirement goes down. And we've been trying to fill our plant with export orders during this time. But you can't really see the issues of the timing. So your customers would always need the product throughout the year. So while the seasonality may be there for India, but for the world market, it will be a different seasonality. We thought that Egypt is a good venue where we could set up this. It has a large market of its own. It doesn't have any facility. There's no producer currently. So that market plus the European market will come very handy. And since a lot of customers who we are exporting, we are already pre-qualified. So the time taken for the customer qualifications for this time around will be much less as compared to what we did when we first had a facility at Sanand. I think just to give you a number that the PET chip facility in Egypt, when it is fully operating at full capacity utilization, will also boost our EBITDA by about. We are expecting normalized EBITDA of INR 2,000 crores, which will boost our EBITDA by another 5% or so. The aseptic packaging Egypt on a full capacity utilization will also give us a 20% higher EBITDA over our current level of operations. If we talk about H1 also at the same time, H1, if you see the EBITDA has grown up by about 24-odd% if we compare H1 of last fiscal versus H1 of this fiscal. Again, it's all driven, largely driven by the packaging sales volume, which is up at about 13.8% on a year-on-year basis. The aseptic packaging sales volume up by about 10% year-wide. Now, just one second. That position, more or less, I've already said. The consolidated EBITDA for H1 is INR 903 crores versus it's gone up by about 23.9% with H1 over the last fiscal H1. And again, driven by the packaging sales of 13.8% and the aseptic of close to about 10%. And the standalone EBITDA for H1 stands at INR 429 crores, which is up close to about 21% over the same period of last year. So if we see H1 FY25 versus H1 FY24, you will see a much better performance both on the packaging film sides. The aseptic packaging continues to grow from every sequential quarter basis. And now with the new capacity in India coming on scene, as well as international capacity coming on scene in FY26, I think that's one business which has been contributing higher EBITDA margin when we look forward to replicate that success of the aseptic India in the overseas markets as well. That's been basically the summary for the financial performance for the Q2 as well as H1. We are now open to any Q&A that you may like to ask us. Some of the details which are not available in the presentation, we'll note down and try to get back to you as soon as possible because sometimes some of the details which are very sort of. So you guys keep on looking at the numbers day in and day out. But we'll try to answer them as best as possible. We'll be happy to come back with you with certain numbers, what you may be looking forward to. And certain numbers which we can't share also, we'll also take your question. Thank you for everything. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. 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 is from the line of Aman Kumar Sonthalia from AK Securities. Please go ahead. Yeah. Good evening, sir. Good evening. Yeah. So my question is that in the last phone call, you have said a lot about the recycling business. So this time, I think you have not given the utilization level of recycling business because you have set up a few plants overseas and a few plants in India. And nothing is talked much about the recycling in your opening remark. So whether now we are not that much optimistic about the recycling business going forward? No, no. We are very much optimistic about the recycling business. But some of the EPR guidelines in Europe and in India are coming. I'm told in Europe, the new EPR guidelines, which mandates the recycling, comes into play from 1st of January and India from 1st of April or 1st of June. So there is nothing. There was nothing while the facilities are there. They are running also as well. But what we've been saying is the real momentum comes only when you look at when the laws are enacted and people are forced to spend extra money in terms of complying with those requirements. So that is why we remain upbeat about that business and that we see that over the next few years that will also become a very formidable business for us. But this quarter, we've given some certain numbers in the presentation what we have achieved. If you want, I can talk about those numbers, but I think those presentations are with you, and you can look at in detail where we've given PCR, MLP, and all that, what we have achieved in terms of the production in this quarter. But we have that the main major theme for next few years, aided, of course, by the legislation changes in the world markets and India where we operate. Now, in India also, frankly, there have been a few times the government has postponed the compliances and all that because not everybody is ready for it. And you know, ultimately, in this industry, then it's relating to the food packaging. You can't take chances with that. So it's a whole industry sometimes is not prepared. If we are prepared, our preparedness is much ahead of them. Still, that does not count, and the government may take a view that we need to postpone it by another quarter or six months and all that. But having said that, this will all come from regulation only. We are ready to sort of. Sir, right now, we are exporting around 40% of our aseptic packaging capacity. So production, 35%-40%. [Foreign language] But otherwise, generally, you can take about for the year as a whole, about 35-odd%. 35, say 40%. [Foreign language] are expanding our capacity by 5 billion pack, [Foreign language] will take care of the market which we are exporting. So definitely, [Foreign language]. And again, 50% we are increasing the capacity 5 billion pack. So [Foreign language] [Foreign language] We took about three years to come up to a decent number in that. जो next 3.5 billion लगाया था, that was sold out on day one, it says. Now, when we are expanding to about 12 billion packs, we are expecting about 80%-85% capacity utilization level in Q1. And obviously, Q2 will be a better capacity utilization number. Now, the next plant we are going to achieve in FY26 and beyond. Now, you will have to make a big thing there also. But the markets are so huge. Look at when we started in India, we already had Tetra Pak in India who was already manufacturing. Now, Egypt, which is consuming about five billion packs a year, has no Tetra Pak over there. So Egypt is all importing its requirements. So that's the market which comes to you very naturally. And then when we look at exporting to Egypt, to Europe from there, you have an advantage from the thing. While your question is right in terms of, and we may not have all the answers on the day one view, but we feel that we will be able to replicate our India success in this business in Egypt very, very successfully and much earlier than what we achieved in our India business. We're very, very upbeat on that capacity. In India, we already suffered for a couple of years because we didn't have the capacity to cater to our domestic as well as our offshore customers. But with this enablement, if we have to swing capacities between India or Egypt plant serving a few offshore territories, I think we can always swing that. We can look to garner a larger market share in India. And if we all believe that next five years, when you become a five or seven trillion dollar economy, the multiplier impact of that on the consumption economy is going to be 10x of that GDP multiplier. So you have to set up capacities. You have to look at expanding in a market which is growing and which is giving you a healthy EBITDA margin as well. We've seen packaging films business segment, what kind of EBITDA margin it takes, what kind of cyclicality it has gone in the last few years. A few good years were COVID years and all that. And thereafter, except for Q1 and Q2, you've seen a single-digit EBITDA margin from industry as a whole. So clearly, there are requirements. We've clearly contacted more customers as to, "Can you give us more?" And we know our bottleneck now. We can't give more than what we are currently doing. So we had to settle this with them. So your liquor industry will be the biggest game changer because still there are a few states where the Tetra Pak is not effective. Packaging is not allowed in the liquor industry. So if they allow that, I think it will be a big market for us. Yeah. Yeah. [Foreign language]. If all the states in India were to allow this to take care of the smallest liquor issues, I think from the current capacity, we will need at least 3x of the capacity in India only to cater to that market. But having said that, that market is there only in India because only in and we will obviously try to look at Africa also. But because India mein, kyunki illegal liquor market is very big, Bihar and all these places, or you have a lot of spurious liquor being packed and sold and all that. So I think over the period, you will find that many states will allow liquor to be packed in aseptic. And the customer also knows that this is one packaging [Foreign language]. Like I tell you, when I buy ghee for my own home, no, I buy only Tetra Pak ghee, in aseptic packaging ghee because that is the only one which is pure. [Foreign language], your chances of going wrong are at least 99x of other packs. Okay. Sir, one more question. [Foreign language]. Maybe request that you return to the question. Queue for follow-up questions. Also, there are several other participants waiting for their turn. Okay. No issue. Thank you so much. The next question is from the line of Saket Kapoor from Kapoor Company. Please go ahead. Yeah. Namaskar, sir. And thank you for the opportunity. Sir, currently [Foreign language]? Maine na, I refrain from giving margins. And that is why I said if I see Q1, Q2 may there has been a 200% rise in the margins, gross margins. And from Q2 versus current quarter also, there is a 20% increase in the margins. But margins is a very blend which is not useful. Sir, your voice is cracking, sir. Hello. Hello. I can still hear you, sir. I'm saying I refrain from giving an absolute number of the margins, and I gave the margins in percentages. So as I said, Q2 FY25, there has been more than 200% increase in the BOPET margin and 35%-40% increase in the BOPP films margins. Current quarter also, there is BOPET continues to be strong. And over Q2, there is a 20% growth in the margins in that business. But in the BOPP industry, the margins today in this quarter are the same as what was there in Q1. Sir, what are the dynamics for the BOPET film industry currently that are favoring sustainable and increasing margins Q1, Q2 also? How do you see [Foreign language] So I'm quite confident that H2 margins in the BOPET industry will remain at reasonable levels. Frankly, I feel that the BOPET margins currently what are prevailing, there may be a little scope for them to be better. And it's a dynamic situation because the BOPET exports have gone down by 10% in this quarter versus the Q1. So with more product availability in the domestic market, the markets may take a cut in the margins again. Then again, exports will rise, and then this phenomenon will continue. But the current margins on a more or less on a I think the BOPP margins should be better than what they are. And hopefully, in H2, those margins will be at a Q2 level, which will be great for the industry. Having said that, the demand-supply equilibrium in the PET versus BOPP, BOPP is better. But still, the BOPP prices are lower because [Foreign language]. So PET exports have really jumped from India, which means that the capacity available to cater to the local market is lesser. And that's why the prices have firmed up. [Foreign language]. So export opportunity is always there because India is a much cheaper cost jurisdiction as compared to Europe or America. When India had an overcapacity, so everybody resorted to exporting the product from India and utilizing their capacity. With the result that when that extra capacity from India got absorbed in the overseas market, the margins in India improved. Which means that the overseas market remained at the level because of the large exports from India. Otherwise, the packaging films margins in Europe and America would also have been much higher had India not exported so much of volumes into Europe and America. Small question, and then I'll join the queue, sir. [Foreign language]. So industry [Foreign language] So which will give you in the markets we operate in what are the levels, capacity utilization levels in those markets. And obviously, we see that there is a in the past, we have achieved a much higher peak in those markets. And so which means that today that is being serviced from India at a cheaper cost as compared to what is being produced in those markets or other players. In overseas markets, there was not an irrational capacity addition what we witnessed in India. And that's where somewhere the equilibrium, all the producers from India are trying to maintain the demand-supply equilibrium in India by exporting the product. So if you see slide nine of our presentation, you will find all the answers as to at what capacity utilization levels all plants are operating. Poland and Hungary facilities, Poland especially, which is the PET, we have a capacity utilization currently of last quarter of about 68%, which was in Q1 at about 78%. But in the past, we have achieved almost 100% capacity utilization in that facility itself. USA is more than 100%, so we are doing perfectly well over there. If you see Mexico, we are doing about 85%. But that is not because of any other thing. That is because the plant has some technical issues which are being looked into. In terms of demand of the product in the America's market, I had explained on this call last time also that our combined capacity in Mexico and USA is about 8,000 tons a month, while we've been now selling for this fiscal at least at the rate of about 10,000 tons a month, which means that we are importing the product in those markets from other jurisdictions, especially Nigeria as well as India. Yes, sir. Thank you for the explanation, sir. I'll go through the slide once again and if I can follow up, I'll definitely. Sir, only concluding part was to Mr. Pal, as he also alluded earlier, that the management is taking all steps to create that value for shareholding community, wherein we investors are it is very difficult for investing community to value the company because of various geographies, the type of businesses, and the various subsidiaries there and the exchange complications also. So what steps are management [Foreign language]? So I think the best way, according to me, is to separate your commodity business from value-added business, from your packaging business, which commands a different multiple as compared to your packaging films business, your aseptic business, your chemicals business will command a different premium, and that's also a very substantial business for us. So restructuring may be one way to unlock that value, which is quite common in the corporates that you separate your businesses into separate companies so that each business is much more visible. And the second is that we have now been presenting to you our turnovers, our volumes from each of these businesses, the kind of margins we have in each one of these businesses. So, I think before I will suggest to all the investors who are on the call to look at these details with much more insight and see that what is the value. I think the management idea is that when the businesses have achieved a substantial size and they need to be operated as a separate entity, only then we should look at the restructuring aspects of them. But when they are too much interdependent on each other and all that, then creating so today, yes, we have the separate SBUs. But creating those transferring those SBUs to separate companies will only emerge at the stage where the interdependence of the businesses are much lesser. And typically, a packaging and a packaging film, flexible packaging and packaging films business, which has packaging films as its raw materials, I think those linkages will have to come down pretty sort of drastically. Again, some of the other initiatives which we had taken earlier, and I had shared with you that listing our offshore subsidiary in Dubai, in NYSE, and so some of those initiatives, again, we will when the markets have not been there for the last couple of years for those initiatives to be implemented. But we'll surely implement those. And that is the low-hanging fruit that if you can list your offshore subsidiary. And when we were talking to our bankers on that, the valuation offered by them were much more than India valuations. So obviously, the India valuations would have got adjusted looking at the offshore business valuations. So we'll do that. Be cognizant of that step, including carving out each one of the business. But let's first be of a substantial size. As a first step, we can look to list our offshore subsidiaries to increase the shareholders' value. Yes. Thank you, sir. I'll join the queue. Thank you very much. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants present in the conference, please limit your questions to two per participant. The next question is from the line of Yash Dedhia from Maximal Capital. Please go ahead. Hello, sir. Thank you for the opportunity. Am I audible? Yeah, yeah. You are audible. You are. About the US, I wanted to know, after the recent political change in the US, how do we foresee the market developing over there for us? You're talking about the U.S. markets or? U.S. markets, sir. So we are very upbeat about the US markets with all the focus of the new government as we hear from the media and all that, that US should get back to its core manufacturing also and stop importing the products from China and other jurisdictions. So I think we could also be doing very well in the American markets, as I said, that we already have product licensing over there. So we'll surely look at more revenues coming from those markets, and it does need to grow in those markets as well. We'll take those decisions at an appropriate time. I had said in the last call also that this 2,000-2,500 tons deficit in the US markets, which in the Americas, of course, not only US, in the Americas cannot be left like that over a very long period of time. At an appropriate stage, we would love to ensure that this deficit is met by way of producing these products in the local markets only. But today, because there is a surplus capacity in India, and we are optimizing our overall company's plant utilizations, feeding the products to those markets. But on an overall basis, that's the second largest market globally after Europe, America. And we are, whether Trump or somebody else, I think one thing is certain that U.S., given its dominant position in terms of consumption, will remain so. And that augurs well for every business, including us. Yes, sir. Understood. In terms of overseas, sir, the prices of BOPET and BOPP in overseas market, how are they shaping up? As I had said, that there is a competition from cheaper imports into the U.S. from India. So the prices are sort of being under check. But as the India market will start to ease in terms of its demand-supply situations, the market will be the prices will be better. Given the fact that we are already operating at more than 100% capacity in those markets currently, despite the margin pressure, the prices pressure being there, that itself speaks volumes that we are competitive in the markets. And obviously, as a U.S. manufacturer, over the product coming from India, you definitely get a premium over there. But to the extent of the current premiums, no. I think there is a scope for them to improve. And it will improve over the next six months to a year's time or so. Because India market growth being at about 10%-12%, that itself will mean that your propensity to export will keep on decreasing. Yeah. Understood, sir. Thank you. Thank you for the opportunity. Thank you very much. The next question is from the line of Chirag Singhal from First Water Fund. Please go ahead. Thanks for the opportunity. So I wanted to ask you regarding the CapEx. So in Q2, it's mentioned that you have incurred total CapEx of INR 348.8 crores, and there is a breakup given. So it's mentioned that INR 122.4 crores is spent towards machinery and maintenance activities. So if I remember correctly, I think INR 100 to INR 150 crores per year used to be our maintenance CapEx every year. So was there any run-up during the quarter? And for the full year, what is the total CapEx guidance? And if you can provide the split between growth and maintenance. I think as of now, what we have on the CapEx side is already disclosed to you that what we spent on each one of those projects. The two projects out of those four, actually three out of those four, which are being completed in the current financial year itself. There is about $18 million to be spent on our Beijing Flex Facility project. There is about $1 million, $2 million to be spent on our project for the CPP facility in Mexico. And then in Sanand, also, I think maybe another INR 50-odd crores would be remaining to be spent in terms of the existing projects which we are completing this year. Then there is this $126 million, which we have to spend on aseptic packaging, which will happen largely in FY 2026. So if you see the growth in that debt from March to September, this being to the tune of about INR 200 crores, while we have spent in H1 CAPEX of how much we've spent on H1 CAPEX? 2.1. Oh, H1. Just one moment. I'll give you the answer. Yeah. 629 crores in total H1 CAPEX. So I think, as I had said earlier also, our existing commitment amortization is about INR 1,000 crores a year, which we are doing. And new CAPEX is being done. New debt is being taken for that. But in the absence of any large ticket CAPEX, including this one, so a large part of this $18 million plus $2 million plus INR 50 crores in Sanand is coming to an end in this year. So the next year, when we get into, I think there'll be not more than $80 million of the CAPEX, what you need to carry to the next financial year. Is that okay? Yeah, got it, so basically, INR 1,000 crores per year for this year and next year based on the ongoing projects. Yes. Correct? Yeah, and so out of this, how much would be the maintenance CAPEX? What is the maintenance CAPEX? Maintenance CapEx could be about INR 200-odd crores. 200-odd crores. Okay. So on an annual basis, it will still be around 200-odd crores. Because I asked you because in Q2, the number seemed very high. Let's actually see. Let's say, I'll put it like that. Some of the CAPEX, which is not incremental, like adding some of the balancing machines and all that also, forms part of the maintenance CAPEX only. Okay. Okay. So secondly, what I wanted to know from you is regarding the overseas business. So if we look at these spreads in overseas, as in if you look at the EBITDA margins, then there is no improvement on a QOQ basis. Now, if we look at the Indian data, then clearly the industry spreads and prices have gone up significantly on a sequential basis. So you said that in overseas, it is because of the dumping mainly coming from India. Did I get that right? Yeah. So as I said, overseas margins could be better. But because currently there is Indian exporters are exporting a lot to Europe as well as America, so their prices are under a sort of check. So is that the Q2 trend is continuing even in the current quarter, or you have seen some increase in the prices in your overseas operations? Q3 also, we are more or less at the same number. So despite this, do you believe that we'll be able to do that INR 2,000 crores plus EBITDA that you've added for the full year, or there will be some change in this? No, I think so we will get that because that number was we were predicating that number on the basis of our Mexico CPP line coming into play, our PET chips in Egypt coming into play in November earlier, but now it has been delayed a bit. And our incremental Sanand capacity coming into play, for which, as I said, that on a Q and Q basis in Q4 will be 20% higher sales volume in that. So existing business plus, as I said, Q2, Q3 may have been BOPET margins are 20% higher over Q2. And the lag impact of what we had in Q2 for the packaging business, that will also be gone by. We'll have higher capacity available for the Sanand for Q4. The PET chips capacity will come into play, which will give you the savings, which may not give you a very large turnover unless you want to sell outside, but it will give you a saving in terms of your raw material costs. So INR 2,000 crores is pretty much in sight. Got it. Okay. That's good. If there are normal day clothes, so [Foreign language]. Correct. Got it. Got it. That would be it from my end. Thank you. Thank you very much. The next question is from the line of Kaushik Poddar from KB Capital Markets Private Limited. Please go ahead. Yeah, just a minute. Let me get off the speaker just a minute. Yeah. See, is there any other CAPEX planned other than the last one that you had announced for the Uflex aseptic packaging in Egypt? Will there be anything more? Because we see that newer and newer CAPEX come up unexpectedly, I guess. So is there at least a temporary pause after that? Mr. Kaushik, sorry to interrupt you, but your voice isn't clear. I request you to please repeat your question. Yeah. See, the last CAPEX we have announced is for the expansion of aseptic packaging in Egypt. Is there any other because is there any other CAPEX that is on the table? No, sir. As of now, there is nothing which is on the table, which is approved by the board and announced by us. Having said that, as I said earlier as well, that in the U.S. market, there is a clear gap today between what we sell and what we produce. So as and when the management may take its view that we need to have because that gap, which is 2,000-2,500 tons today, in two years' time, expect that gap may be 3,000-3,500-odd tons. So you will have to take a call in terms of producing it locally. So that is one area where I see that as and when there's a management and the board's call to take that, that we need to produce this locally rather than importing it from other jurisdictions. That is one thing which I find that is a low-hanging fruit. Other than that, I really don't think so. But having said that, we keep on looking at opportunities in terms of where we can get a good project in the existing lines of business and all that. But I don't think so there is any other than that possible in the packaging films. So there are three businesses only: the packaging films, the flexible packaging, and aseptic packaging. The packaging films business, as of now, except for this gap in America, looks pretty full. There are scopes for improving the existing capacity utilizations in Europe, in Nigeria, in Dubai, in Egypt. So the focus is on that because there is a capacity, existing capacity available, which you will always give the first priority to use that to the hilt. The next one is aseptic, where we are already announced. So the total capacity is going to be about 24 billion bags, of which currently we'll be selling about from India in Q4 at a run rate of about 10 billion bags. So FY 26, we'll see as to what extent we can utilize that capacity from there. But clearly, having shown the intent to increase that capacity from 12 to 24 billion bags, there is work to be done over the next few years in terms of absorbing and utilizing that capacity. Then our third large SBU is flexible packaging, in which we don't have any international plans at all, as I've said many more times. And currently, we don't have any other plans to expand in India also in that. Okay. And can we expect an EBITDA margin of 13%-14% in the second half? EBITDA margins for Q2, I think we are targeting about. 13.2? Odd%, between 13%-13.5%. That is for Q3. It's for Q3. No, I'm talking about H2. Okay. H2. Yes, yes, yeah, yeah, yeah, yeah. So we are targeting 13%-13.5%. Let's see. Okay. Thanks a lot. Okay. Thank you very much. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to one per participant. The next question is from the line of Marshall, who is an individual investor. Please go ahead. Yeah. Bhatia sir, I have made some analysis on the finance cost and the exchange losses. So this is a very important question for the finance and health of our organization. See, since we are operating in some hyperinflation economy like Mexico and Nigeria, especially Nigeria, wherein the economy of the country is also going to be worse because of the oil prices went from $85 per barrel to now $72. So you can see that in the Q1 of FY25, the Naira has devalued by 17.5%, and in Q2, devalued by 9%, and again, till now, devalued by 2%. So totally 28% devalued. In Mexico, in Q1, devalued by 10.6%, in Q2, 7.3%, and now 4%, only 22% devalued. So what I can see is that in the last one and a half years, we have lost about almost INR 1,100 crore only in the exchange losses. So what our management is doing to contain this loss? Otherwise, on the one end, EBITDA looks very fine, but that entire EBITDA is eaten by the finance cost and the exchange losses. This is number one. So how to mitigate these losses of exchange losses, number one? And since these two, even Egypt is also like passing through some trouble, but their exchange rate is a little bit stabilized. So more concern is in Mexico and Nigeria, and you are further expanding in Mexico. So how these losses will be contained? Because it can be contained only by having high margin from their product or from South America, number one. Number two, in the finance cost, again, we are spending how much? We already spent about INR 900 crore we spent in the last one and a half year. So our entire profit is gone away, and we are now having net debt of INR 5,900 crore. So ours is only one big packaging company, which is having such a high net debt. So there is very urgent need to inject the funds. And nowadays, for example, every company is launching QIP. So why don't our management seriously consider to have either preferential allotment or QIP launch so that some 2, 3, 4,000 crore is injected into the company, and the company should be made relatively half debt should be released so that the finance cost can come down. And whatever share payment we have, it is being eaten regularly by the finance cost, and on the top, these exchange losses. And these exchange losses are not going to be reduced in the near future because of the economic situation, especially of Mexico and then Nigeria. Please. Okay. Thank you, sir. Thank you for this extensive question. Must compliment you [Foreign language] in terms of the losses of the currency and all that. But sir, I'll only ask you one thing. When you are in India, [Foreign language]? [Foreign language]. [Foreign language]? No. [Foreign language]. [Foreign language] Dollar mein. Because like my friend has been in the CIS country before, so I know that like wherever there is hyperinflation economy, even the local citizen, whenever they get salary, they immediately convert to dollar. [Foreign language] [Foreign language]. [Foreign language] terms of [Foreign language] w hat I'm saying? Mr. Marshall, may I request you to please ask your question offline? We need to move on to the next participant. But this is a very important question. This is the most important question, ma'am, like so far anybody has asked the question. And so Bhatia sir, my question is that like if the company makes some QIP, at least the finance cost can be released at least to some extent or to 50%. Sir, you are very right there. [Foreign language] we were ready to file our prospectus with NYSE. But last minute [Foreign language]. [Foreign language]. [Foreign language]. [Foreign language]. India is very India is not giving us the right value currently. [Foreign language] India prices will obviously reflect those revised valuations. [Foreign language]. So like you cannot go for at least in the next two years until the exchange rate stabilizes. [Foreign language]. [Foreign language] [Foreign language] They are important markets for us, we are a long-term player in this. It's the same situation [Foreign language]. [Foreign language] [Foreign language]. But when I look at my local balance sheet, Naira [Foreign language]. Sir, we are not citizen of Nigeria, we are citizen of India, so we need to get ultimately into dollars. [Foreign language] by doing some better hedging derivatives. [Foreign language]. They are notional losses only, they are not, they are only translation losses, सर. [Foreign language]. So that is the real loss whenever we dispose of the entity. So the point I'm drawing is that if we can increase the margin or the gross profit from the products of Nigeria, Mexico, Egypt, then at least [Foreign language] exchange loss [Foreign language]. Some action must be taken because sir, [Foreign language] at least if the promoter can make some preferential allotment or some money is injected in the company, at least our finance cost, which is the real output, can be reduced. [Foreign language]. [Foreign language]. Thank you very much. A reminder to the participants to limit your questions to one per participant in order to ensure that the management is able to address questions from all the participants in the conference. The next question is from the line of Aman Kumar Sonthalia from AK Securities. Please go ahead. Sir, we have developed some very high-value BOPP treated film in Hungary. So can you throw some light on this product and how it can scale up and what is the value addition in this product? Sir, I think, if you can hear, we will have to connect offline on this to give you more perspective, where I can take my technical people also. And you know, but [Foreign language]. But we are happy to share details with all this offline. Sir, flexible business [Foreign language] margin-wise and growth-wise? Sir, flexible packaging [Foreign language]. That is a steady state business for us, where we are neither growing nor shrinking. We are only trying to improve our product profile to more of pouching, less of roll form, where the margins are higher. So we are not, you know, you would have seen over the quarters, the volumes in that business are closer to about 20,000 tons a quarter. So we are not, we don't have a surplus capacity, much surplus capacity, and we are not planning any further capacity to take that business forward. Having said that [Foreign language] तो ये local market में बहुत cutthroat competition है. Some of our large customers, I will not name them, when they work in India market and they work in the world markets, their behavior, things with respect to onboarding vendor based on just the pricing is very much different. So these large customers will never onboard, you know, a vendor who is, you know, not a renowned name in the converting industry and all that. But somehow, you know, in India, their behavior is different. It's more price-sensitive market, so that is why the competition in some of the products is much more. So we are looking to realign our portfolio in that business, both domestic and in the export market. You will not see much volume gain and all that over there. We are only saying [Foreign language]. Sir, I should be not focusing more on value-addition. [Foreign language] Absolutely right. You know, we had 2022 and 2023 as the best, one of the best years for the packaging films industry. जहां पे, and you know, during those years, each and everything was selling. So जब when everything and each and everything is selling and that too at a good price and all that, your focus is what? Your focus is to increase the throughput so that you can produce and sell as much as possible. It's not only me, it's everybody else in the industry did that. 2024 was a slightly difficult year after Russia-Ukraine crisis. And after the raw material prices corrected sharply in FY24 because of the supply chain stabilizing. And that brought in a lot of stock losses. Because after raw material prices, different jurisdictions [Foreign language] [Foreign language]. Both India and overseas. Polyplex, Jindal Poly, Jindal Poly का तो नहीं आता है. SRF, you can see everybody's profile. Everybody has done better performance in Q2 versus Q1 and in Q1 versus Q4 of FY2024. Now having said that, this is the time when we said we started that exercise in FY2024, where I said that we were looking to the value-added, more value-added products. In the years to come, surely we are oriented towards that. As you see, much higher, you know, throughput of the value-added products in FY26 and beyond. Sir, one last question. Sir, [Foreign language]? [Foreign language] Sir, and neither there is a mindset of that sort. The mindset is grow, streamline, go for better value-added products and improve your margins, distinguish yourself from the normal, you know, industry products and give, you know, option to the customers for the higher value-added products. [Foreign language]. But और कोई ऐसा mindset नहीं है सर. It's all growth-oriented and revenue maximization and profit maximization के लिए. Okay, sir, thank you. Thank you very much. The next question is from the line of Saket Kapoor from Kapoor Company. Please go ahead. [Foreign language]? Sir, this decline, the only reason for this decline is the capital investments that have been made. You know, like we have, sir, in April we have in India the flexibles plan that we started, which we have in Russia the CPP facility plan that we started, and one and a half something else will be which we have at March end which commissioned, those projects, whose Q1 was the first month of that child birth, Q2 is the second month of that child birth. So these like will stabilize at a higher capacity utilization. Sir, interest cost so this doesn't see that your capacity utilization currently 35% is, 50% is. That then 100% of capacity according to it comes and hits your P&L. So as and when those projects, those investments which have been made, are utilizing a higher capacity utilization level, so obviously your EBITDA will become higher, which will offset the higher interest cost. The only difference is when you set up a project, complete a project, the interest cost comes and hits you on the day one of 100% of the capacity, and your capacity utilization gradually only goes up. So that mismatch will always remain, unless the accounting policies allow that as much as your capacity utilization is, that much interest you take to P&L and the rest of the interest you hide in asset, capital asset. But that unfortunately that is not, so that hits you on day one. [Foreign language] on the higher side. Interest [Foreign language]. Yes sir, the impact of depreciation comes after interest because depreciation is for a much longer period of time, so its impact comes over 20 years. But the incremental impact is much less. It's not like that, no, there is also impact this quarter. There is additional depreciation, but the impact of interest is more because normal depreciation, wherever you go in any territory, depending on the useful life of assets, comes 4%-5% annually. In the interest section, minimum 10% comes, year. We are getting more than 10% because you know, currently like local interest rates in Egypt, local interest rates in Nigeria, in India it's 9-10%, but in some of the other territories are also higher. [Foreign language]? [Foreign language] Other expenses, other expenses Q1-Q2 [Foreign language]. [Foreign language] [Foreign language]? [Foreign language]. Average cost of borrowing should be around 10%. 10%. You mention 10% sir? Yes, sir. [Foreign language]? Our current rating is double A minus, long-term rating s double A minus CRISIL, and short-term rating is P1+, which is the highest level of rating. [Foreign language]. Thank you, sir. And outlook of our rating is stable. [Foreign language] We are not, we are unable to value the company correctly because of these factors only. So we should work it out sir. And sir, [Foreign language] Do we have them as an IR and consultant? Ernst and Young ka. They do the internal process audit for all our businesses, all our units. Okay, and [Foreign language]? [Foreign language]. [Foreign language], and all the best sir. Thank you very much. As there are no further questions, I would now like to hand the conference over to the management for closing comments. Thank you ladies and gentlemen for the engaging question. We will soon have the transcript of this call on our website www.uflexlimited.com. We look forward to speaking to you again in the coming quarters. Thank you and have a great day. Thank you very much, sir. On behalf of Dolat Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.