Ladies and gentlemen, good day and welcome to Vardhman Textiles Q1 FY 2027 earnings conference call hosted by 360 ONE Capital Markets. As a reminder, all participant lines will be in the listen -only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Aradhana Jain. Thank you, and over to you, Ma'am. Thank you, Sonia. Good evening, everyone. On behalf of 360 ONE Capital, I welcome all participants and the management of Vardhman Textiles to the 1 Q FY 2027 con call. From the management, we have Mr. Neeraj Jain, Managing Director, Mr. Sushil Jhamb, Director- Raw Materials, Mr. Rajeev Thapar, CFO, and Mr. Varun Malhotra, Head of Finance. Without further ado, I would like to hand over the call to Neeraj sir for his opening remarks, post which we can open the floor for the Q&A session. Thank you, and over to you, sir. Good afternoon, everyone. The results are already out for Vardhman Textiles. There's an improvement in the numbers in terms of percentage as well as the absolute amounts. The major difference, if you look at in the spinning business, there's been some improvement in the yarn prices. Also, partially there has been an advantage in terms of the raw material available earlier and the price increase which happened on the raw material as the yarn prices got adjusted to the new raw material. There's a kind of a partial trading in as well in the raw materials. On the fabric side, the improvement is not to the extent which should have been for two reasons. One, during last year, because of the U.S. tariff, there's been an issue. We missed the sampling of a particular season. As a result of that, during this period, all the U.S. orders did not come to India. We are now, last one month or so, things have started improving, and we are expecting far better business in the next two, three months from the U.S. customers as well. Hopefully the utilization in the fabric business would start improving, though in terms of absolute numbers on the fabric side, we are almost comparable to what we did last year in the first quarter. A little lower than the fourth quarter this year, but we are hoping that this will start improving. Again, in terms of percentage utilization, it was lower because we added a new line also in the month of March, which could not be utilized fully. On the spinning side, the utilization has been full, the margins have been good, the overall demand is also good, which was originally started deriving from China. Our expectation on the various fronts in terms of raw materials, yarn prices, our view is, one, raw material is stabilized in international market in the range of about $0.78-$0.81 per pound. Most of the time, let's say the average $0.80 or so. This is what it was almost comparable when we did the last call also. Except for a few days where the July New York Future was much higher, whereas the December and the next months were inverse, which was a clear signal that the July New York Future may not be sustainable. As of now, there's no inverse situation in any of the months, so there could be a possibility that these levels could be sustained. Two, if you look at the raw material availability across globe. India, the rains behavior has been very different. One, it's El Niño case, so there could be a reduction in the overall rains. Also, the variation in the areas has been huge. One, the rain started a little later. Two, of course, it has picked up in a overall average, but still area to area, this has been different. As of now, the cotton growing, sowing, is almost comparable to the previous period with a gap of only 1% or 2% in our estimate, but we are yet to understand and look at what kind of growth or what kind of crop quality would be there, as there has been very different scenarios of rain in the different areas. Generally, whenever we see these kind of variations, generally there is always some quality concerns, and also the crop size also comes down because of the quality. It is very early to say as of now, and we have to watch it for next maybe two, three, four weeks to get a better estimate and idea of how Indian cotton behaves. Brazil, there has been a reduction in area by about 5%. To that extent, there could be a reduction in the crop there. Australia, there has been a major drop in the crop size. The last year figures were much higher. This year we are expecting to be about 3.5 million bales. Going by the situation of water, maybe the next year could be even much lesser, maybe about 2.5 million bales or so. The next major cotton growing area is U.S.A. The U.S.A. West Texas still they're talking of drought conditions in that area, which means the crop over there can also be affected China announced a designed reduction in their cotton growing areas because they want to concentrate more on the eatables. Practically, if we look at all areas, there is hardly any area which looks like it's going to increase in terms of the cotton. There are signs as of now where the reduction could be there. Based upon this, it's our view that the cotton prices may not come down in a big way, rather may increase only as the consumption across the world are increasing. That's on cotton growth and the production possibilities. Two, this has been a period where lots of uncertainty because of the U.S.-Iran war happened and we saw the crude prices touching $100. Of course, it's come down to about $87, $88 as of now. As the crude increased, all the intermediary products increased, and that gave an increase to the Polyester prices, Acrylic prices especially. As a result of that, those prices are much higher than what it used to be pre-war. That's also given some kind of a raw material increase across fibers as a sympathy to those fibers as well. To that extent also, I think there's likelihood that if the prices of acrylic, polyester increases this way, there could be some possibility of increase in cotton demand in the various parts of the world. Considering these, our view is that the prices may not come down in a very big way. Of course, future will tell whether our thoughts were right or wrong. That's our view as of now, going by simply the demand-supply situation, where the supply side is going to be reduced, the demand side is going to be increased. As I mentioned in the last call also, it looks like after three years, this will be a year where the production could be lower than the consumption. This scenario may continue for next two, three years, where we might look at a 2%- 3% drop every year in the cotton crop and maybe 2%- 3% consumption on the cotton side, which means a gap of 3%-4% for next one to two years, which should be good enough to have the reasonably good prices on the cotton. Coming to the Indian cotton, since the New York Future increased from almost $0.67- $0.68 to about $0.80 as of now. Of course, in this period, most part of the quarter was almost in the range of about $0.75, $0.76, $0.78 per pound. The Indian cotton, which was ruling at about INR 55,000 a candy, has also increased to today, the CCI price is close to about INR 64,000. There's been a corresponding increase, whatever is increases happen in New York Future. Along with that, the change in the dollar -rupee, the Indian prices also today are aligned to that. The Indian prices in terms of U.S. cents today will be close to about $0.87- $0.88. If you look at the Cotlook, that's about $0.91-$0. 92. Practically today, there's an alignment in terms of the international prices and the Indian prices, which was a big disadvantage till in the last two years. This last four, five months, things are better to that extent. Another events which are happening on the cotton side, Chinese government started selling the reserve cotton. They are issuing a quota of about 80,000 tons per day. They have sold close to about, I think, about 10 sessions have happened till now, and they are in a position to sell 100% of the cotton, whatever they give as a quota. The average price of that cotton, which is sold in China as of now, is close to about $1.15-$1.16. Even if we reduce the VAT out of that, it'll still be close to more than $1, which means the prices in China are much higher than the prices elsewhere. This gives us a feeling, in case the Chinese mills are getting cotton at $1 +, that means the margin available to them or the today's yarn prices will not be more than $0.65-$0.70 per kg of yarn. That also gives us a feeling, it means they will continue to buy yarn from outside China, be it India, be it Vietnam, be it any country. In our day-to-day experience, starting November, December last year, we are finding the Chinese demand continues to be good, and our feeling is going by this cotton prices, it may continue. The total export of yarn from India used to be about 95 million-97 million kg or less than 100 million kg, which has increased to about 110 million kg as of now. A net increase of about 15 million kg, which is primarily come from China only, and I think this can continue if Chinese cotton prices are in this range. In case India continues to export at 105 million-110 million kg, and this already, as I mentioned, the capacity closure in India was also huge in last three years because of the losses all the spinning mills had. The industry estimate was almost 12 million-13 million spindles got closed permanently, and we still feel that figure is same. There's hardly anything which has been revived in this period. Going by the overall situation, not many projects have been announced even now on the spinning side. Last year, I think the additional capacity or the new capacity had come only about 0.5 million spindles. This year also, if we look at the projects announced till now, it will not be more than 700,000-800,000 spindles in this year also on the expansion side. Of course, a little improvement has happened on the machinery orders by all the machinery manufacturers, but that is more on account of the modernization some of the mills have announced. That's on the spinning side. In terms of the cotton as well as the yarn sales, the ruling prices as of now for the international market on a 30s combed basis is close to about $3.20-$3.30. The Indian prices are also aligned ex-mill basis in India, almost at the same prices plus or minus INR 2-INR 3, which is a normal gap we always find. On the fabric side, we had two issues. One, I mentioned, because of the U.S. tariff, we skipped a particular season on sampling. As a result, those orders did not come to India. Two, on the fabric side also, there's always a lag when we can pass on the yarn prices to the customer. Whenever the prices of yarn goes down, there's an advantage to the fabric division or vice versa. This was a period where the yarn prices increased sharply, and it always takes some time for us to pass on those prices. Our feeling is, even today we feel almost whatever price increases happened on the yarn side, about 60%-70% could be passed on to the consumers. Still, 20%-30% could not be passed on. But with the volume increase, hopefully those numbers will also be better, where the cost will keep coming down, and probably the margins could be restored. As I mentioned, we are comparable to the first quarter numbers last year, but about 3%-4% lower than the fourth quarters. But going by the current quarter situation, it looks like we are definitely better than the first quarter. In terms of CapEx, most of the CapEx is online. We have started our one biomass boiler in Baddi last week only, and another one in Madhya Pradesh is expected to start maybe in a month or so. And most of the modernizations are completed. And we also started working on the open-end project, with a capacity of about 55 tons-60 tons per day. The construction just started last week, and I am hoping maybe in the next 10 months' time or so, this capacity will also be available. The new site at Dhar, the government is still developing that land. Going by the physical progress of that land, I expect the land will be available to us by December. Once it's available to us, we are in a process of completing our process, what we intend to do, and when we want to start the construction. Hopefully, by the time the land is given to us, we will be ready to start at least our first construction, maybe with the spinning project, and then later on we could add whatever more products we want to add there. In terms of the committed expenditure, most of it is online. Hopefully, with all these boilers coming up and the biomass, there would be cost reduction advantages. We have also invested heavily into the solar power and the wind power. Those advantages also will partially start coming in. Month after month in the next six months, more and more advantages would start coming in. That's what my initial comments on the performance as well as our view on the industry. The rest of the things we can discuss with the question and answers. 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 touchtone 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 Prerna Jhunjhunwala from Elara Capital. Please go ahead. Thank you for the opportunity, sir, and congratulations on good set of numbers. Recovery seen after a long time. Just wanted to understand what will be the order book situation currently in the spinning segment? Normally in the export market, we are always sold for about three months. Domestic will never be more than 45 days. If you look at the last five years' history, this would be the average, 90- 95 days in exports, 45 - 50 days in domestic, we are sold for those many number of days even today also. Okay. Which means the bulk of the improvement in prices that happened in the month of April, May, should be visible in Q2. Is it the right way to look at it? Yeah, that's true. Understood. Sir, second question was on Fabric business. Wanted to understand how is the progress in the new synthetic Fabric business? What is your experience and whether you would be looking at expanding it further? What product segment are you looking at there, and kind of margin profile in that segment that you're looking at? Our first idea is to utilize that capacity. Where sampling is happening for various customers, because these are all products which are new to us, and we are also learning, and we require to do the sampling to give confidence to the customer, because these would mostly be the replacement of imported fabrics. The project started somewhere in February, March, and as of now, we have a capacity of 15 lakh meters per month. Our utilization is about 15%-20% only as of now. I'm happy to share, last one month, we got two big approvals from the two big brands, where the production is starting this month itself, within August itself. I'm hoping that our idea is within next six months, we want to reach at least 70%-80% capacity utilization, which is 20% as of now. This has two aspects of business. One is the basic product, second is the value-added, or where we can say a part of the technical textiles. As of now, starting is only with the basic products, and as we are in a position to utilize that, I'm sure there would be the value addition also started happening. In terms of the first parameters in terms of quality, in terms of acceptability are very good, and I'm happy to share that. Definitely once we make a success of this, because this is one business where I believe India has a huge capacity shortages of this product. Definitely we'll look at it expanding as we are reaching near to the capacity utilizations. Understood, sir. Sir, margins here are margins and ROCE. As per your current experience, do you think the margins are much better or ROCE is much better than your existing Fabric business? Is it equivalent? Prerna, it is too early to say as utilization is only 15%-20%. This is all, again, what kind of products are you in a position to replace from outside market? As the fashion cycle are increasing, everyone wants the delivery on an immediate basis. I'm sure anything we produce in India for the Indian market, we would be in a position to get some premium also compared to the outside markets. My belief going by the per meter cost of this product, the margin as a percentage of sale as well as a percentage on the capital employed, could be better compared to the existing product lines. That's my feeling as of now. Of course it's a long way. Maybe next six months we will be more sure on that. That's fantastic to share because we were just wondering what is happening on that business and how we are looking at that business. This is a good opportunity. Yeah. Last question is largely on, you've shared on cotton outlook and stuff. Do you see an opportunity to import at current prices for cotton, or would you still wait for the new season to come in? Because we have import duty-free cotton at this point in time. We are evaluating on a daily basis because there are two factors we have to look at. One is that what is the likely price in India, even in the next season once it comes in. The government has already announced 6%-7% increase in the MSP. If I go by the MSP and the procurement by the CCI, practically it looks like the cotton will not be lesser than INR 65,000- INR 66,000, even in the next season also. In case one can get an opportunity to buy imported cotton within this cost today when the duty is free, we're definitely looking at and wherever there's a possibility, we are taking those decisions, not waiting for only the Indian cotton, because in any case we have to buy Indian cotton. Since this is a period where the window is available only for next two, three months, whatever could be done, we are surely looking at even at these prices also. Understood, sir. Thank you. I'll come back for any further questions- Sure. -with you. Thank you. Thank you. The next question is from the line of Awanish Chandra from SMIFS. Please go ahead. Congratulations, management team, a stellar set of numbers. My first question on the margin side. We have done a very strong margin this quarter, and by the looks of it, quarter two, since we must have more cotton inventory at lower cost could be better. What if after quarter two, will this trend of strong margin continue or it will moderate after that? No, surely it will moderate. There's no doubt about the same. My belief is it may not come down to the levels which was there before when we started looking at this increase to happen. Because the industry was passing through a very difficult time last two years. Where the spinning margins have come down to as low as 9%- 10%, where the margin available or the conversion available was only about $0.65 - $0.70. I think, going by the demand continues to be the Chinese demand or the overall demand-supply continues to be better. It can be in the range of about $0.85- $0.90. These kind of numbers, whosoever has whatever inventory they have are at lower prices, that advantage will be there. As those inventories are finishing, definitely there will be some reduction happening, but may not come down to the last two, three years kind of a numbers. That's what I feel as of now. Okay, maybe 100 basis points or 150 basis points moderation or more. I can't say on the numbers, but definitely, I'm saying depending upon what inventory and how the yarn prices goes, lots of uncertainty factors we have to incorporate in. I can only say these numbers have some trading margins, which may not be available once we move to the market prices of cotton unless the yarn prices further increases. To answer, our inventory level today on the cotton side. Sorry? Our inventory level- Sorry, that's something we don't share. Okay, sir. Moving on the technical textile side. This technical textile, whatever capacity we have, it is integrated with our gray fabric capacity, or it is altogether a different line from starting- No, it's a different line. No. Our existing lines are more on where we start from the spinning yarn, and from there we produce the fabric. These are all filament based, so it's altogether a different product. Okay, start to end, it is not connected with anywhere with the cotton lines? No, it's not linked. Yes, customer could be common where they want 100% synthetic materials. This is all 100% synthetic materials. The only commonality could be customers in my view. Okay. Sir, my last question on the new capacity side. Anyway, we are undergoing a huge CapEx and a few things are pending. Now since margin is going up, do we plan to invest, which can give us further capacity, which can lead to top-line growth? Because whatever CapEx we are currently doing is modernization or power side, it will not give much on the top-line growth side. Are we thinking on that line because now we have better margin? Yeah. On the top line, you are right. The top line basically will happen only with whatever unutilized capacity we have on the fabric side, both the cotton fabric as well as the synthetic fabric. That's one, which increase can happen. Two, the new CapEx, which is announced, which will be increasing our production by about 50x- 55 x the open end. That will give us some addition. As I mentioned earlier, the new piece of land which we have taken under PM MITRA Park, I think next three, four, five years we'll have lots of projects we have in our mind and depending upon how the business goes. There is an intention to put up a capacities in that project, which will give a top-line growth also to the company for next three, four, five years at least. Okay, sir. Thank you very much for answering my question. I will come back in queue. Thank you. Thank you. The next question is from the line of Roshan from Antique Stock Broking. Please go ahead. Thanks a lot for the opportunity and congratulations to you for great set of numbers. Just wanted to understand how are you seeing the demand trends across the domestic and export markets today. Maybe you can just highlight which geographies are seeing the strongest recovery. That's my first question. In terms of garmenting or in terms of export, there seems to be a decent demand, there is not that we are finding it difficult to sell the products. India has a huge advantage, a natural advantage which we got created, thanks to the government of India, where all these FTAs have happened, U.K. and EU. I'm sure there's lots of business which the garmentors or the home textile could do in these countries. Since we supply, we are the textile material supplier to all these different line producers of garment as well as the home textile. I believe next two years is a genuine opportunity available for India to the Indian manufacturers to export to these countries. Already demand as such is good. With these two markets available to us, I'm sure it'll be definitely a much bigger gain for the Indian market, and to that extent, I think all manufacturers, starting from spinning up to the home textile or up to the garmenting will get an advantage. Should get an advantage. In addition to the strong domestic market, which is also improving with the per capita income increasing every year. All right. Just to continue to the reply that you have given. Are you seeing any changes in the customer ordering patterns be it normalized or brands are still following the shorter ordering cycles and cautious inventory management? How are you- A couple of things which are very clearly happening last two, three, four years, and it is actually increasing. One, the fashion cycle is reducing. Everyone wants to have a minimum inventory so that, one, their working capital comes down. Also, the risk of obsolescence comes down. Any customer who is dealing with you wants a delivery of yarn, let's say in 20 days, delivery of fabric in about 44-45 days, delivery of garment in 60-70 days kind of a situation. That cycle will continue to screw and whosoever is in a position to deliver will be a winner. That's one. Two, the market is moving on a much bigger way on the new products. The innovation or the new products development in terms of colors, in terms of variation in the products, is definitely something where the customer is appreciating. Not that 100% product will come from them, but even 5%, 7%, 10% comes from them, and 80%, 90% goes on existing kitty. Again, whosoever has those capabilities will get a first advantage so that that business could move on. Third, the recycling is still in fashion, especially in the export market. The recycled, the yarn or the fabric based out of the recycling, definitely some of the customers, especially the Europeans, are more interested in buying that. Fourth is the green companies. Be it power, be it nobody wants the coal to be used or the fossil fuels have to come down. That's something where the customer may not be giving you any direct advantage, but if you have, it's nice to have. The customer definitely appreciates that and is more willing to work with you in case you are in a position to do that. Fifth is the compliances and the ESG. All your social compliances, and all your, let's say, fair practices with your all stakeholder is very important. Now, look at a situation where customer wants all these, and they will not be in a position to have, let's say, 10, 20, 30 vendors. They want everything to be done by the vendor. Any vendor who has the capacity, who has the muscles to follow the peak of the customers and in a position to deliver all these things, that advantage surely I'm finding, and that's the reason the organized players have some advantage, where all these brands which are coming in and wants all these kind of facilities, their first preference goes to the organized sector. Size, at times we feel size is a disadvantage, but I think this is a time where the size is becoming an advantage, because customer wants all kind of products. They want all the picking to be managed by them. They want everything in a minimum number of days. I think those are the changes which we started looking at last three, four years, and is increasing every year. There's an improvement or an increase of pressure every year on that. Okay. That's very helpful. Final question from my side. You have undertaken of doubling of capacity of the garment from 2.2 million to 4.5 million shirts. Could you elaborate how things are proceeding there in terms of customer tie-up, maybe some quantitative details I can expect that affect on your margin? That would be helpful. Yeah. Yeah. Our existing capacity is only about 7,000 shirts per day, which is too small a capacity. Business is doing well and definitely because we don't sell the product in our own brands, we are just giving it to the customer in terms of their own brands. 7,000 shirts is a capacity which is really minuscule from any customer's perspective. We get two advantages with our garmenting. One, we are in a position to have the development which comes from the customer side also, which helps us in our both fabric as well as our spinning stage. Two, there are some niches which can be definitely created in this business. Our feeling was that the kind of cost structure we have only on 7,000 shirts, too small for any customer to be served to. I think as first step was why not to increase it to double at least, make it a viable unit. Today, our costs are much higher, so the margins are much less. Our feeling is once we are doubling this capacity, there's hardly any overhead cost which will be increased. I'm sure then we could look at the margin in this business on a standalone basis so that a future decision could be taken whether we really want to go a big way into this business or not. Okay. Thanks a lot for the detailed answer. I'll join back. Thank you. Thank you. The next question is from the line of Shirish Pardeshi from Motilal Oswal. Please go ahead. Hi, Neeraj. Good evening. Thank you for the opportunity, and congratulations. Sir, with the previous participant question, with 4.5 million shirts capacity, what will be the peak revenue we will get at 100%? Close to about INR 300 crore-INR 350 crore. This will be fully operational end of March 2027 or will be quarter one 2028? No, June 2027. One year from now. Seven to eight months generally, I feel because lots of workers are required to be trained, by the time we take full advantage of actual utilization, it could be one year from today. Current set of customers you said is primarily domestic or it is international also? No, it's a mixture. We do about 30% exports, 70% would be the domestic brands. Okay. That's helpful. In terms of our product segment, when I look at, yarn is 69%. I was more curious, what kind of China export happens in this? China, let's say from the Indian market, if India is doing about 105 million- 108 million kg per month, China is buying typically about 30%. Okay. Our TP, it will be about 20%- 25% to Chinese. Whatever we export, yeah. Whatever export comes there. The yarn we have three segments, export, domestic, and captive. All these three segments are practically 1/3, 1/3, 1/3 of the yarn we produce. One-third, 33% goes to, which means about 7%-8% of my total production goes to China. Okay, got it. The reason why I'm asking, because if you think China is going to buy, I'm sure next six months you will have definitely a visibility for your yarn requirement from China. Yeah. Is this [cycle], the kind of growth you have envisaged in quarter one will continue for at least next two, three quarters? In terms of yarn demand sizes, it can, hopefully. The only difference in the margins should be depending upon when your old cotton finishes and when the new cotton you start consuming. That's the gap which can come in. Otherwise, in terms of the top line or the sales, I think seems to be visible as of now for at least next three to four months time. Okay. When you say 1/3 is China, who are the other two countries which have shown this kind of resilience? China and Bangladesh are practically taking 60% of yarn from India. Okay. Just last question on INR 3,600 crore CapEx what we are planning, what can come and which are the segments which you are deploying in FY 2027 and which will go to FY 2028? Most of this CapEx, I think only about INR 800 crore-INR 900 crore will go to the next year. Remaining will be completed, is already completed or will get completed within this year. Okay. Out of this, majority has been modernization and the power where all the power projects will be completed in next three months' time. Most of the modernization is completed. It's one open-end project and some more modernization, which can go to the first quarter next year. Other than that, everything will get completed within this financial year. What will be total CapEx for Dhar from land to building and machinery? For the financial year? Yeah. FY 2027. You're talking for Dhar? Yeah. The entire project Dhar, PM MITRA Park show project from what you're trying to- Whatever Capex has been announced, this does not take any expenditure on Dhar as of now. Okay. Dhar project is still under consideration? It's still under consideration. We're waiting for the land to be available to us because the government has to give us power, and we are expecting the power to be available not before June 27. We don't want to take a chance because it can further get delayed. I think we'll start construction only once we are very clear, because our construction and the project implementation will take up about 10-12 months' time. We'll start it only once we have a more visibility that the government is clear that they'll be in a position to give us power on this time. All right. Got it. Okay. Last question on the margin of, I think we have spoken much about it, but where do you think margin is going to be resilient? Cotton prices, obviously you would have some cover, but I'm asking this question not from till December, but post-December, because right now the cotton sowing is also less. The El Niño effect, we are not sure what will happen. In that context, do you think this margin may not have deteriorated to the 11% level what we have seen in past, or will be in the range of about 13%- 13.5%? I'm not saying guidance, but I'm saying direction. My view is, as I mentioned earlier also, we came down to 10%- 11%, which was really a kind of a desperate situation. My belief, 13%- 14% could be the right way of looking at it, which could be, if we convert it into the margins available per kg of yarn, will give us a conversion of about $0.80, $0.85, $0.90. Okay. Got it. Really helpful, sir. Thank you. Yeah. Thank you. The next question is from the line of Falguni Dutta from Mansarovar Financials. Please go ahead. Yeah, good afternoon, sir. Sir, what were the cotton yarn spreads for us for Q1? Cotton yarn spread in this period, I'm not saying for me, normally it is always calculated on the market prices of cotton and the market prices of yarn. In this period, it was ranging about $0.90 per kg of yarn. Okay. This is like spot cotton and spot yarn, if you compare, that was $0.90 per pound? Correct. Per kg. Sorry, yeah, per kg. Yeah. Okay. You think, broadly, it should be in that $0.85-$0.90 per kg range only? Yeah. Historically, it's been in the range of about $0.85 to about $1, except last two, three years, where it came down to $0.60, $0.65, $0.70 for Indian market. Okay. Okay, sir. Thank you. That's all from my side. Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. Reminder for all participants, please press star and one to ask a question. The next question is from the line of Anil Kumar Sharma, an individual investor. Please go ahead. Sir, congrats for the good set of numbers. Sir, my question is regarding where do you see your company for in the next five years? Number one. Number two, our return on capital employed or return on equity is on very lower side. Anything, any guidance you don't give that I know, how it can be increased, the return on capital and return on equity? Where do you see our company in the next five years? Next five years, as I mentioned, we are hoping as the opportunity would be there in India Because of all these FTAs and the Indian consumption increasing, there could be a possibility that we might look at some of the bigger projects in Dhar as the government is also promising the major growth to happen in these kind of areas. I don't have exactly Because there's lots of ideas in our mind, which I'm hoping we'll be implementing in next two to three years' time. Definitely it could be good in terms of the overall top line. How is ROCE looking? The ROCE basically has two factors. One, the return on capital employed for the business side. Second is, we have lots of investments available to us, which were kept as future expansion possibilities, where that money is available with the company. If you look at the return on business side, it's still reasonably okay. I believe in case we are in a position or whenever the right opportunity comes in, the company invest in a bigger way, which we intend to whenever there's a right time. To that extent, the trading stocks comes down and the return on capital employed, that's the only way it would improve. Okay, we can expect in the next two, three years it can improve to a reasonable level. No, I'm not saying two, three years, definitely five years is a period where my personal belief, yes, it could be. Okay, thanks. Thank you. Thank you. The next question is from the line of Prerna Jhunjhunwala from Elara Capital. Please go ahead. I just wanted to understand, in between China was not buying from India enough. Recently they started buying. What could be the reason? Are they focusing on cotton yarn, cotton businesses to a larger extent? No. They started looking at, I think they are still very strong on the garmenting side. Whatever was a thought that people are looking at China Plus One or they'll look at China to be removed, that's not the case. The kind of capacities they have, I think they'll continue to dominate. My thoughts are, one, as the government announced there, that they want to reduce the cotton sowing areas, which means they are too dependent upon the import cotton more and more in future, two. The costs are increasing there, especially in the South China, which was originally where there are lots of industrialization is there. Of course, the new area they're trying to develop is this Xinjiang area. There are lots of capacity which already got shut down or maybe the cost over there have increased in a big way. I think they might have to look at how do they replace the capacities or they reduce the capacities. The cotton prices are there with a $1 + and the rest of the world, the cotton prices are in the range of about $0.89, $0.90. 10%-12% increase for them is a huge cost. I think rather than looking at a basic yarn, because they're very strong on the garmenting, they're very strong on the fabric finishing. Could be possibility as a part of their strategy that rather than looking at producing yarn, why not to import yarn, at least the first leg is over, convert it into finished fabric, and this also reduces the risk of Xinjiang cotton, which is again banned by many countries, especially the U.S.A. Whenever they are buying the local yarn, there's always a challenge and a concern whether it is made out of the Xinjiang cotton or not. When the yarn is coming from India or Vietnam, at least that risk is over for them. I think this could be what I feel. Genuinely, they may look at rather than looking at taking a risk when the final garment shipments happen, and then in the testing you find, "Oh, there's something happened at a local level," why not import the yarn and then export the garments? This is sustainable in your opinion going forward as well, like this Chinese sourcing from India? Looks like. Okay. sir, anywhere spindle addition is happening in the world or is it that India is the only country which is adding spindles? A very interesting question. If you look at China, there's some spinning is being added in Xinjiang area, more than that, they are stopping it elsewhere. The net, there's hardly any increase in China. From a peak of about 116 million- 117 million spindles, they are down to about 84 million- 85 million spindles as of now. If you look at Indonesia, they have reduced, they're not adding. Look at Vietnam, almost saturation is there, they're not adding. Look at Turkey, in a very bad condition, and they slowly they have to reduce their capacities only. Look at Bangladesh, they are not adding anything. The only one country where some small increase may happen is either Egypt or India as of now. Of course, tomorrow people are talking of Africa to develop and those things, if that happens. As of now, I don't think any part of the existing clusters of spinning is increasing other than the India or Egypt as of now. That is positive for margins in a longer term in your opinion, or the moment the margins start coming in, there would be increase in capacity. What is your take on the long-term profitability of the spinning business? Should be. My only concern has always been the cotton availability at the right prices. Now with the government allowing us for four months, we are still requesting government to give us a more visibility on a sustainable basis. If you look at last 15, 20, and these two years, three years also, the spinning margins have come down, not because of the demand side, but only because our raw material was much more expensive compared to the rest of the world. In case our raw materials are aligned to the world markets, I don't think really in terms of competition, there would be a really big issue for India to compete. Understood, sir. Thank you, sir, and all the best. Thank you. The next question is from the line of Monish Ghodke from HDFC Mutual Fund. Please go ahead. Yes. Thank you for the opportunity. Sir, just one question. What kind of opportunity do you see in recycled cotton yarn? With the cotton prices being firm, and I believe lot of cotton will not be getting recycled. Technology-wise, in the medium term, is it feasible and at a larger scale, is it feasible in terms of ROCE and in terms of pricing? If you look at the model, it is nothing to do with the ROCE or with the availability of cotton. Basically, all these ideas started from Europe, where they wanted to reduce the consumption or a dumping of the material to save the Earth. This is the passion they had, and that's what is happening. In terms of cost parameters, in terms of return on capital employed, or in terms of availability of fiber or spinning of fiber, there's a dramatic improvement happened in last two, three years. Today, up to 30%-40% recycled fiber with the virgin fibers on the ring also is possible. We are doing it very regularly. In any case, through the open-end, it is possible to do even more than that also. I think rather than the return on capital employed, the idea was how do we reduce the land filling which is happening because of the garmenting. That's what the thought was. My belief, this may continue for a few years, till the time we reach a saturation on that also. Technology-wise Technology-wise, it's okay. Mechanical recycling is there. People are talking of now the chemical recycling also. There's lots of experimentation is going on, but as far as cotton is concerned, mechanical recycling is reasonably good and sufficient capacity is already available in the system. Okay. Thank you. Participants who wish to ask a question, please press star and one. Reminder for all participants, please press star and one to ask a question. As there are no further questions from the participants, I now hand the conference over to the management for closing comments. Thank you, and over to you. Thank you all the investing community who's been with us for last so many years. Whatever are the results, we try to give our opinion as honestly as we can. Of course, there could be difference opinion. There could be things can go in a different way because it's all dynamic work. Going by the situation, as of now, it looks like things have improved in India for most of the textile players. With all these FTAs and the opportunities available for future, we definitely see far better times in the times to come. Of course, as I mentioned, this trading may not be there, but definitely going by the overall opportunities, we feel it could be a right time for India for next couple of years to show the demonstration that the growth could be there in this industry. Thank you very much. On behalf of 360 ONE Capital Markets, that concludes this conference. Thank you for joining us, and you may now disconnect your line.