Greetings and welcome to Huhtamäki India Limited's Q2 CY2025 earnings conference call hosted by ICICI Securities. 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Aparajita from ICICI Securities. Thank you, and over to you, ma'am. Good afternoon, everyone. Thank you for joining on Huhtamäki India Limited's Q2 CY2025 results conference call. We Huhtamäki India Limited management on call, represented by Mr. Dhananjay Salunkhe, Managing Director, and Mr. Jagdish Agarwal, Executive Director and CFO. I would like to invite Mr. Dhananjay to initiate with opening remarks, post which he will have the Q&A session. Thank you, and over to you, sir. Thank you. Thank you very much, and good afternoon, everyone, for joining this call. Let me start with our safe harbor statement that today's discussions shall not be forward-looking for any future performances of Huhtamäki India Limited. With this, if I have to take a look at the quarter two performance of Huhtamäki India, the demand situation at the end of the consumer side remained mixed, with urban demand not still fully recovered and rural demand typically driving whatever consumption was in quarter two. There were a few sudden winds, in terms of unseasonal rains, a brief span of summer, and arrival of monsoons a week earlier, and then inflation which takes place. Overall, the demand situation remained slightly subdued, which clearly impacted our performance in terms of top line, where net sales remained lower year on year, as well as slightly lower than quarter on quarter. However, with the various cost control measures, our EBITDA has been higher than year on year and slightly lower than what was in quarter one. Profit before tax, as well as EPS, are also higher, slightly lower. Overall, demand situation is flat. Cost measures are clearly helping us to deliver the results we have been able to do in quarter two 2025. With this opening, may I hand it over to Jagdish, our CFO, to take us through further details in terms of our performance. Thank you, Dhananjay. Good afternoon, everyone. As always, I am pleased to host the Q2 2025 industry call alongside our Managing Director. We'll walk you through the company's financial performance for the quarter and the six months period ending June 2025. We'll share key insights on our progress over the first half of the year. Turning to the financial results for Q2 and H1 2025, our volume for the quarter remained flat compared to Q1 2025. However, it showed a decline on a year-on-year basis. A similar pattern was observed for H1 2025, where volume is slightly lower than its corresponding share of previous year. Revenue for June quarter issued at INR 5.9 billion compared to INR 6.2 billion in Q2 2024, reflecting a 4.7% YOY decrease. On a sequential basis, revenue remained flat when we compare with Q1 2025. For the six months period ending June 2025, total revenue amounted to INR 11.8 billion versus INR 12.1 billion in H1 2024, indicating a modest decline of 2.4%. Now, when we look at the EBITDA for the quarter, it's remaining at INR 490 million, marking a strong YOY growth of 28.7% from INR 383 million in Q2 2024. Comparing to Q1 2025 EBITDA of INR 498 million, this figure was marginally lower by 1%, or I'll say that it's more or less flat over Q1. For H1 2025, EBITDA reached INR 900 million and improved by 13% over INR 874 million in H1 2024, signaling healthy business performance and operating levels. EBIT for the quarter issued at INR 362 million, suggesting a strong YOY growth of 37.4% compared to INR 263 million in Q2 2024. On a sequential basis, it showed a marginal decline of 2.4%. For H1 2025, EBIT came in at INR 733 million versus INR 662 million in H1 2024, reflecting a solid improvement of 10.7%. Like Dhananjay said, when you look at over the past six quarters, we have successfully maintained a range-bound top line despite facing volume pressures. This resilience extends to our bottom line as well. The performance has been notably strong through 2025 except Q1 2024. These outcomes point towards a trending business quality and demonstrate that our strategic market initiatives are beginning to build intrinsic results. From a broader industry perspective, market signals have been mixed. In the first quarter of 2025, which is a March quarter, we observed smaller players gaining traction and driving growth in the food and FTC categories, outpacing larger MNC companies. The muted performance of these large players compared to overall market growth has had a secondary impact on us as well. Now, moving to finance costs, the finance costs declined by 39% on YOY basis, primarily due to partial retirement of GCB in September last year. Surplus funds continue to be prudently deployed in bank deposits and mutual funds, delivering high single-digit returns on that. Profit before tax for the quarter, excluding exception items, is to that of INR 331 million, marking a robust 55% growth over Q2 2024. On a sequential basis, it reflects a slight dip of 2.7%. For the quarter ending June 2025, profit before tax before exception item at INR 672 million, again showing a healthy improvement of 19% over INR 563.4 million in H1 2024. Net profits for the year, after accounting for exception income and taxes, is to that of INR 249 million compared to INR 35 million in Q2 2024 and INR 262 million in Q1 2025. It is worth noting that in Q2 2024, included exceptional income, net of taxes, it was INR 227 million, primarily arising from the recognition of sale of the remaining two land parcels in Thane. Earnings per share for the quarter, after accounting for exception items, is to that of INR 7.30 for H1 2025. Net profit was INR 511 million compared to INR 646 million in H1 2024. Consequently, EPS for the half year is to that of INR 6.76 per share. Coming to the company shares and liquidity position, the shares to equity ratio remains well within comparable levels, with the external commercial borrowing of INR 1 billion representing the sole debt of the company. Liquidity continues to be strong, supported by tangible and utilized credit lines that remain fully available to us. While the overall working capital situation is stable, the position as of June 2025 was less favorable compared to March 2025 and June 2024. This was primarily driven by an increase in revenue since receivable during the quarter. In conclusion, Huhtamäki India Limited remains a test force in its commitment to driving opportunities that enable us to enhance performance across the board. Our world-class operations program is a key enabler in this journey, supporting candidate improvement and excellence. It continues to hold the highest estimate of quarter's audience, stay focused on technology-driven innovation, and pursue value realization through sustained customer engagement. Our investment in security and sustainable packaging solutions has aimed at positioning Huhtamäki India as a partner to us in this evolving landscape. We found that these efforts will strengthen our competitive edge over the long term and support our goal of delivering responsible and profitable growth. Thank you. Thank you for your continuous trust, support, and investment in Huhtamäki India Limited. Thank you. With that, I hand over to Aparajita for question and answers. I mean, you shared about the operational challenge, and how do we really look at sustainability as one of our key strategies to really connect with the customer and the overall ecosystem? I think let me also connect with a bit on three core areas on how Huhtamäki's continues to focus on safety and CSR. As you see, you have seen in our annual report of 2024-2025, as well as the first half of this year, our safety record has been significantly improved over the last two to three years. Our team continues to focus on safety in the first half of the year, where total incident rates have been significantly reduced. Also, the fire ignition points as well have been significantly reduced. There is a good focus on training in terms of safety, not only to our employees but also to contractors and the nearby communities. The same thing goes for the CSR work. In 2025, we are expected to sign the SBTi targets, which will be aligned with the 2023 goals for our scope 1 and scope 2 reduction. We are also having various projects on electrical and electricity power reduction, water conservation, and overall wastage reduction, which will ultimately help reduce the risks overall and protect mother earth. I think thanks to Jagdish for elaborately discussing the quarter two performance. We can now take our questions. Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone phone. 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, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, we would request you to rejoin the queue. We will wait for a moment while the question queue assembles. The first question comes from the line of [Dhruv Nimani] from Niveza Investments. Please go ahead. Hello, sir. Thank you for the opportunity. I would like to know what was the Bluel oop contribution in the revenue of the current quarter? Bluel oop, yeah, you can take it. It continues into the similar range of what we had in the first quarter. We are trading somewhere between INR 27- INR 30 per share. Okay. Yeah. What was the cost measures or the reason for increasing the EBITDA margin in this quarter? We definitely, during the last few industry calls when we are taking, we are working on the operating efficiencies. That definitely is something that's one thing. Second is that we are working to improve the leads. Both factors are healthy, like internal and external focus. Both factors are helping us to improve the bottom line. Okay. Sir, I had a last question. Would it be possible in the coming next two years to reduce the margin of the parent company, Huhtamäki like they do a margin of around 14%- 15%? No. You know that as a policy, we don't talk about forward-looking indications or anything. The thing is that we would like to improve performance, and that is going to be a priority for us. Okay. Sir, I had a request that we are actually a CAC-free fund. We generally visit the facility of the company. Is it possible to do a facility visit? I think we generally don't take into an individual or this kind of arrangement head-on. That is a reason the investment colleagues that we would like to assist. At least in management, as at this point of time, we are really not thinking of that type to arrange a facility management or any investment calls like that on those sites. Okay. Thank you, sir. Thank you. The next question comes from the line of Rajak umar Vaidyanathan from RK Investments. Please go ahead. Yeah, good afternoon. Am I audible? Yeah. Yes. Yes, sir. Yeah. Good afternoon, sir. Thanks for the opportunity. A few questions. First, on this margin performance, I understand that the top line is kind of anemic in terms of the growth. Can you assume that this margin will be kind of maintained or it will only improve from now on? Even in the metrics, Raja, if you have seen to the previous questions, we have enforced on the metrics that we are working on lots of things. Another program we spoke in part that we are working on efficiency improvement. Voice of our preferences is driving our efficiency improvement head-on. We are looking at each and every cost, and we are looking at all the possible opportunities. We are working on that. At the same time, we are looking into the quality of business. We are focusing on both. Now, when it comes to comment on future, it's very difficult because we generally don't do that. At least we can talk about that our focus on that varieties to improve the business quality. Yeah, I understand that. May I ask you for any guidance? My only question is what if the margin is kind of in the backbench, you know, because I think the last two quarters you're kind of meeting good margins. It's only the question of growth, which is kind of dependent on the FMCG and other players in the industry. Given that, I'm asking whether the margins will improve from now on without giving any particular guidance. Yeah. It depends on many factors. That's really very difficult to give a very clear answer on that. It depends on we don't know how the commodity prices are going to move, right? There are a lot of geopolitical issues that are going on. There are different types of sectors that are going on. It's great from all that, giving an indication also which directions it will go. As you speak and talk about it as a management, what are the priorities we are working on? Our priorities are set to continue to improve and evolve. That is where we are working. Okay. Got it, sir. The recent AGM of GlaxoSmithKline Pharmaceuticals they mentioned that they are moving from aluminum to laminate tubes completely. Would that be a tailwind for it? Are you getting any kind of feelers like that from the customers that you are working with? If a market expands, it definitely is going to help all of us who are a part of the flexible packaging industry. That's what we believe. The question is on the tubes and the laminate. Essentially, look, we do not discuss any particular customer name, so that we will avoid. At the same time, the main point you asked was basically there is a trend. Yes, there is a trend of moving from aluminum to laminate tubes, typically we call plastic base. There is a trend, and definitely that helps with the industry players like us. Okay. Sir, is that a tailwind that will show up in the short-term, medium term, or is it more a long-term opportunity? I would say, look, as Jagdish indicated, we normally do not use this time-based or exact one, but we have this portfolio of a tube laminate in our product portfolio. Clearly, that is one of the focus areas and eventually, it shall add up. Yeah. Sir, in one of your previous calls, you mentioned that some of the MNC companies operating in India, they are not following what they are following in other geographies in terms of, you know, the sustainable packaging solutions. Any update on that? Have you seen more compliance coming now? If you can take a little color on that. I do not remember vividly that we said they are not following. The point is possibly there is an early adaptation of certain sustainable packaging trends in certain other countries because of the evolution of the regulatory landscape in those territories. Essentially, all our customers are following these, the regulations which are basically applicable to them in their respective countries which they play. That is the observation. Overall, if you see in India, even when it comes to the regulatory, this one around recyclable or sustainable packaging, yet it's not yet mandated. Because it is not mandated, most of the even FMCG players, whether India or global multinationals, are basically aligning their commitment according to the regulations. That's the comment we will have on this. Okay. Okay. Lastly, sir, on this tubing packaging, the Polylactic Acid, when you see this competition, you could pick on that? I think this was also discussed in the last call. PLA-based films will also form one of the input materials for us as it is, let's say, recyclable film which we produce now, which we call Bluel oop film or MDO film, high-barrier films, PET, PP, and so on. For us, all these developments act as a vehicle to further our journey towards sustainable packaging. Thank you, sir. Sir, are you targeting growth in? Sorry to interrupt, Rajak umar, sir. May you follow up for the remaining questions? There are several more people waiting. Sure, yes, thank you. The next question comes from the line of Rohan from Golden Money Investments. Please go ahead. Yes, sir. I wanted to just confirm that in the coming five or six years, seven years, Huhtamäki is primarily focusing on flexible packaging solutions, sir? Yes, clearly yes. Okay, sir. Thank you. The next question comes from the line of Sukhbir Singh from SMIFS Institutional Equities. Please go ahead. Good afternoon, sir, and thank you for the opportunity. Sir, my first question is on the pricing of BOPP. India is facing shortage. Sir, how is the pricing going on for BOPP? Okay. I mean, this is a very targeted question, but we are seeing definitely some increase in BOPP prices in the first half of the year as compared to the previous half of the year, previous means even H1 2024 or H2 2024. There is a comparative increase in, I would say, in double digits. Okay, sir. For my second question, on tube laminates, can you please give some light? What will be the percentage share in our product portfolio? Is it low single digit, high single digit, double digit? How much is it? A nice color on it. Possibly somewhere around high single digit. High single digit. Okay, sir. My third question is on the export of our product portfolio. Like, is there any increase in the export things? Export share in our revenue. How is the readiness? I think the percentage, typically, we have around 30%, 32%. 1/3 comes from export. I think that remains range bound. Okay, sir. My next question is on the debt repayment. On CY20 27, we are planning for the gross debt repayment. Is that maintained, or have we changed the schedule for it? We have mentioned that fixed view, like 2027. Around 2027. Okay, sir. Sir, like a second on the low-cost reaction, on the low-cost plans, reducing the cost structure. For electricity and power, like are we, what are the metrics for it? Are we looking for installation of new solar plants or like how will we target that? We are exploring all possible options available to us, including from energy intensity to sustainable farmers that will help with the carbon emission as well as that help on the productivity. We are exploring all possible options. Okay. Okay, sir. Got it. Thank you so much, sir. Thank you. The next question comes from the line of Mehul from RWE. Please go ahead. Hello. May I ask you a few questions? One is just relating to varying CapEx plans and what is the current utilization? I assume we have done some CapEx work for converting some of the lines for Bluel oop. With the current assets, how much more revenue can we generate? Are there any plans for CapEx? The second question is in terms of this Bluel oop. I understand that there are other players also who have or can possibly introduce a mono-material packaging film. Is that any potential competition for us, or do we still have edge over others in this segment? Thank you. I think two questions in one. First of all, we have invested definitely in the innovation in terms of our Blue Loop. Our current focus is to clearly utilize those assets for the purpose which is intended. There is a good practice, and we are carefully evaluating. I think there is a clarity in terms of how Huhtamäki looks at the investments now, with certain changes happening at the center. One of the important focus areas is capital allocations. This capital expenditure requirement, as well as the plans, are getting discussed internally for wherever there is a better opportunity in terms of ROIs or ROCs that would be taken up. At this moment, there are certain capital expenditures done already in the last couple of years, and the focus is to basically use them for a betterment. Okay. The second question is regarding that monopolymer films by competitors. Yeah, that's good. Again, a good question. Possibly, I have to go back to maybe three or four conference calls ago, explaining in very detail that what we are offering is actually, you know, like a four-pronged approach to the sustainable packaging solution. Those are not only in terms of mono-material, but it is also polyolefin-based, PP-based, paper-based. We call it Power of Three. They are functional, they are affordable, and they are basically more simple. All the Power of Three in one, and then multiple offers with a very high demanding structure, high-barrier structure. We have multiple value propositions to be given to our customers. I think we have definitely, first of all, from a timing perspective, as Huhtamäki India Limited overall, as a flexible segment, we have invested in five locations. That means we have a geographical possibility to service our customers anywhere in the world they want. Second, in terms of the stability and the, you know, recruitment availability and available capacities, we are clearly ahead of anyone. That is what we want to really capitalize on. Okay, sir. Just on the last, kind of continues from that, since we have this particular capability here and partially linked to the exports question, since the adoption of these kind of products is much higher in some of the more developed markets compared to India, is there a likelihood of a growing trend of sourcing from India for Bluel oop? This is a good point. That is the reason why we are having this as a global approach for Bluel oop. Structures we are developing are more standard in nature, more based on functionalities, and there are opportunities. As I said, we have also 30%-32% of our share coming in from exports. Wherever we are serving current, there are definitely opportunities emerging. Also, certain areas in that we are taking help from certain other investments. For example, as I said, we have a paper-based product, and these are seen as valuable in the customers in India. We have wet chemistry investments done outside of India, particularly in Southeast Asia and in Europe, and we are actually sourcing the input from them. Actually, it's not only exporting from us, but we are also utilizing our other Huhtamäki sites or regions to get help where we don't have capabilities. That is the good benefit that we are getting as a whole Huhtamäki presence as a global company. Great, okay, sir. Hello, sir. There was a small question earlier. Was that with the current capacity that we have, any approximate range of revenue? I mean, there are very ballpark revenue that we can achieve, you know, another 20%, 30%, 40% from here without further CapEx. Even a rough estimate will be fine, sir. These are, again, numbers. Typically, look, I think we have been pretty open about it. Capacity of valuations, etc., are really a very number which can give a misleading picture. What I can only say is that there are opportunities. You will see that's a good proposition with Huhtamäki India. We have multiple geographical locations. We have a very good, stable supply chain, and global reach. With all these three, using these three critical strengths that we have, we have a capability to actually service the requirements of our customers. With productivity improvements, with the flexible opportunities to have a flexible outsourcing network sales by, which typically are in very good positions to actually manage the demand upsides, which comes in particular in the right opportunities. Got it. Thank you very much, sir, for all the replies. Wishing you all the best. Thank you. Thank you. The next question comes from the line of Ashok B Jain from Ayush Capital. Please go ahead. Hello, Ashok, sir. You're on unmute mode. You can go ahead. As there is no response from the participant, we will move towards the next question. The next question comes from the line of Lakshmi Narayan from Tunga Investments. Please go ahead. Thank you. If you're looking at a slightly longer term, from 2019 to 2024, our domestic revenues actually declined. Whereas when you look at some of our clients' price in, for example, Unilever, their packaging costs or expenses actually went up, which is kind of underwhelming for a company of our nature. How do you attribute this particular thing when it actually has declined? Is it an internal issue or an external issue? It's a good question. When we talk about overall value chain and the companies which operate in the market where the rate of commoditization is particularly high, innovation takes time. Typically, we innovate in terms of substance, in terms of the aesthetics and all. It's very difficult to get these IP rights and all. We operate in a spectrum where we are the, I would say, we are the innovation leader. At the same time, the rate of commoditization is very high. That's where the, I would say, challenge, which is external. If you go back, I think you covered the period of 2019 to 2024, whereas I would go back nearly another 10 years before, where access to the technology within India was limited. That's where Huhtamäki was pioneer, or I would say, early, or so two companies which actually emerged as a one. We were pioneers. Now, with the access of technology and then low entry barrier, markets have been fragmented. Flexible packaging market has been fragmented. That has an impact, definitely, on us. That's definitely an external challenge where generally FMCG companies have grown in the volume. Their focus is more on meeting the price points, smaller SKUs. That has actually increased the complexity for a client like us. As I said, one side, we use this as a strength that we have a vast geographical presence. We service multiple types of customers from multiple locations, multiple products. That's a strength. Sometimes, at the same time, it acts also as a weakness because then it becomes a very complex company. That is where possibly we are looking at now that we want to become more agile in order to service our customers even better. That is why if you see in 2023, we took measure in terms of certain plants we closed in 2023 so that we can repurpose our resources, focus on the categories which are having larger opportunities for us. Clearly, like I said, we are really strong in certain high-barrier structures. That is what the strategic position we have taken. That has impacted from an internal point of view. That is, I would say, strategic positioning that we want to focus on high-value business or product niche. That is where our continuous focus is. We may have lost certain volumes at the low end. The future focus is basically to play in the areas where we have a higher possibility and opportunity to win. Thank you so much. I think the follow-up, I just want to understand in this period, what is the, you know, how do you define your product of value as a commodity and how that mix has actually changed? Where do you think this mix would actually work better? I also see that a lot of your customers are going for a reverse auction kind of a thing where they are extremely busy about the cost and they actually make it very deflationary in terms of your revenue tools that are available. These two questions in terms of how is this particular value-added for commodity mix changing over time? What has been a trend of our products? What percentage of our revenue is coming from reverse auction? How have you come out of these things, reverse auction, or that's the norm of the day that things are actually deflationary in nature for you both in terms of volume as well as pricing? Yeah. You are right. Thanks for picking it out later. I missed out on that. Good that you added that. One, I think from a market point of view, the rate of commoditization increased. It has been actually accentuated because of the adoption of a reverse auction by our overall ecosystem. It actually limits our play, whereas it has been used by our esteemed customers for the value discovery. I would say it is going to remain there. That's where companies like us need to focus more on innovation, focus on creating more and more value propositions, which actually resonates with our customers. They value that. I think two pointers from that. What are the value additions we consider? Like recyclable products. The ecosystem which uses them, the benefit not only on the high-barrier properties so that they can increase their shelf life, but also how that product is end-consumed. When the product is end-consumed, how it is getting collected and circled back to the recyclable. Then the reduction of their own plastic consumption. Co-creating certain innovations along with our customers. Working with them to help them also to look at the global pictures and create products along with us, which can actually help them. That's the overall value chain or creation what we continue to work with our customers. Okay, next question. Okay, next question. That's the value-added and the reverse auction in your overall revenue point? We don't really, not done that way because reverse auctions are, I just can't put that number, but it's becoming more and more prominent, I would say. On the domestic, if I may just ask, what is that which you actually give to traditional players like Unilever and Dabur? What is the mix you actually give to new-age companies? I think product innovation and just actually value more in new-age companies like D2C. Any mix on that, traditional S&P versus the new-age companies for you in domestic and how it has changed in the last two years? That's where I think your margin of catch-up can actually happen. You are touching a very important point, like the large S&P players and the digital only or D2C. I would say the packaging requirements typically remain the same in the sense because product and products are almost the same. What is different is basically the response time and the reactive responsiveness from the point of view of both players. I think now it is also converging because even large S&P players are also clearly focusing on the digital platforms and the direct to the consumers and so on. At this moment, we don't really differentiate from that, okay, this is FMCG and this is D2C also. For us, it's at the end of the day structure. Got it. Thank you, sir. I'll join the queue. Continue. The next question comes from the line of Rohan from Golden Money Investments. Please go ahead. Yes, sir. Sir, is there any big CapEx for the coming five to seven years? The second question is, as you know, the adoption for our product is basically comparatively very small as of today. Do you think it's going to increase and then it's going to increase? When you talk about CapEx for the next five to seven years, it's very, very difficult for anyone to estimate what is going to happen tomorrow. We can't put a number, Rohan, very honestly, on that. What will happen in the next five to seven years from CapEx point or checking out if we're seeing growth and what we are focusing here? What was your second question, Rohan? Yes, the second was about the adoption of our product, which is the single-layer plastic one. Actually, as you see today, the response from the customer is basically in a slower phase. Do you think about increasing this in the coming years? If you can see numbers basically after two years, three years, it's good. I believe it could improve. In time to come, the reason is that government is also focusing to come out with a lot of limitation rules and regulations, focusing towards more sustainable solutions. I'm sure recyclable materials are going to get traction from that in time to come. Yes, sir. Basically, Basically, yes, fine. Thank you. Thank you. The next question comes from the line of Rajak umar Vaidyanathan from RK Investments. As there is no response from this participant, we will move towards the next question. The next question comes from the line of Ashok B Jain from Ayush Capital. Please go ahead. Hello. Yeah, am I audible? Yes, yes, you are. Thank you. Thank you. Thanks for the opportunity. First of all, sir, congrats on getting a very good profit. That is almost 200 basis points more than last year's ROI. Big congrats, sir. Sir, my question is on inventory provision. Our company has made a provision of INR 9.39 crore for inventory provision as shown in the cash flow statement. I want to understand why this was necessary. Inventory provision? Yeah. In the cash flow statement, we have stated INR 9.39 crores, and that is INR 9 crore INR 39 lakhs is shown as inventory provision for this H1 cash flow statement. Because if they add this to profit, our profit grows by another 150 basis points for Q2. One moment. Let me just have a look there. Okay, please have a look at it. Yeah, you're asking the cash flow, right? Yeah, cash flow, yeah. Yeah. Inventory provisions, you know, normally it's very much related to what we have, and it depends on the aging and all. It doesn't mean that the provisions, quite what we normally do, is going to have an impact. It's a normal part and parcel of this. It's not something out of the order or extraordinary. Actually, this money is deducted from net profit, I suppose. Right. We will have an impact on the profitability, yes. Yeah, why it was necessary, that is something that has become so absolute that it was required to be written off, or can be recovered with money in the future? A lot of provisions happen, which are like aging dates, formula we apply on that. It depends on our inventory. It depends on the inventory. There's a different aging package as per policy, and as per those policies, you have to create provisions. It depends when you are going to dispose of this material, what kind of value you are going to create, what kind of recovery you are going to have. Those items, when we do the transaction for this inventory, these are accounting provisions. Okay. Sir, any idea whether this provision roll-up provision was done for Q2 or it was for a roll-up for Q1 or H1? It's an H1. This is a six-month provision which we are looking into. This is six months. Any more provisions required as of now? No, I mean, you know, it's a very successful thing. Whenever you have inventory evaluations end of the quarter, and we feel that there is a need to do that, we don't probably compile another inventory that we need to have end of September. We We either do a provision or there will be a need to do a provision also. We do evaluations for inventory end of every quarter. The main point is we are always consistent with our policies, and we don't do any exception, which is actually also audited. Okay. Sir, at this point of time, just for H1, regarding this inventory also, we have one of the highest levels of inventory. That is for a period in INR 310 crore. Any particular reason that because of businesses expanding or the prices might go up, sir? No, I think it's a mix of many things. You're right that inventory levels have gone up drastically end of June. Partly to answer your questions also, that inventory levels are going up. Yes, some inventories are old that require provisions, so that you see in there. Certain raw materials are highly selling, and sometimes it makes sense that you hold some inventories so in any business company in the future you can address that. When you talk about certain raw materials, especially when you talk about coal, you see happening for raw material companies, and then there are the items including import from China and all. When you import from Europe, there are lead times that we see. It depends. Time to time, certain cost of inventory will be what kind of order book you have. Sometimes it goes up. Sometimes it comes down. Definitely, yes, end of June, it looks high. We are working to put a right focus on that. By the end of this year, we can have a decent inventory level. Okay, sir. It was very helpful, sir. Thank you so much, and best of luck. Thank you. Thank you. Thank you. The next question comes from the line of Lakshmi Narayan from Tunga Investments. Please go ahead. Two questions. One is that how seasonal our revenues and margins are? Is there like a second half is better than the first half? The reason I'm asking is the last two quarters have been pretty strong in terms of gross margins and energy costs. Is there any seasonality attached to it? I would say generally, you know, there are some upsides and downfalls. It's more or less something goes up, something goes down. For example, in the first half, let's say in corporate too, typically summers, so beverages would be kind of slightly up. So is the hair care. In the second half, hair care probably goes down. Ice creams go down. We could see some upside on food sites or a seeds segment and so on because it starts kind of monsoon-related activities. Third quarter, fourth quarter, we could see some festival-related demand upside. First quarter, typically some. You know, you have a good mix of the business coming from various product categories and related industries. I would say we are having equal opportunities in all the quarters. Is there like, I mean, has things got stabilized in terms of margins for us? Can you repeat? Have things got stabilized for us from a margin point? Because if you look at the last 30 quarters, there has been a lot of fluctuations in margins, in gross margin, EBITDA level, and so on. Can we assume that things have got a little more stabilized looking at the performance of the last two quarters? In a way, yes. Again, it's not objectivity is there. It depends on the commodity prices. The moment we are going for a high inflation situation, that probably has some lag impact on the profitability. Maybe let me add probably to Jagdish's answer. Look, we are in a new world, which is called BANI, right? Binary, anxious, nonlinear, and incomprehensible. You know what today makes sense. I'm not sure it will make sense a few weeks or a few one quarter later. I think what current focus is basically what are we doing good, double down on that and continue doing. I'm going to give you a second question. In terms of our exports, while domestic in the last five years have actually come down, your exports have actually been fairly secure. What do you think about exports? Is it something that is decided outside your purview, that is a global decide? Therefore, the exports can actually go up or down, or is it in your control? It's very much in our control. Rohan, it's not the common relationship we are having. We do manage the relationships. We do both. Yes, definitely. Being a part of global companies, we take a lot of support from them on relationships side, on other aspects. We are taking it very much within our control. Got it. Last year, if I look at it, the software and expense reinvestment charges jumped from around INR 17.5 crore to around INR 35 crore, INR 36 crore. Is it a one-off, or do you think this will actually remain at that INR 36.5 crore, INR 37 crore level? I think when we talk about the first half of this year, it is going to remain in that. It's not kind of a one-time thing. It will remain fairly stable. As for things, we are leaders and we are the pioneers in packaging, right? You talk about this volatility, etc. What is our plan of action? Do we, you know, as leaders, you know, we should have some way to iron out these volatilities, either by hedging or tuning our products or having focus on multiple things, right? When do you think as an organization you will actually be that trend so that you are not the. Maybe move towards your next question as there are several. I just wanted to finish this question. I just want to understand your point of view on that, sir. How do you intend to? Maybe we can give you a quick answer to that. Volatility is going to be there. I don't think that we can address all. Yes, it is still possible in the area, especially when we talk about CapEx and all. We do take care of QA and all. When you talk about a commodity, it's very difficult. As a policy, we don't break into that arena. We have to deal with that as and when it comes. I think so far, our expansion is not to catch up on that. Going forward also, we are going to just focus on more of the things we talk about. hedging and all is after time. I'm a commodity. We plan it back up, but we're not really thinking on addressing all volatility by way of hed ging. Got it. Thank you both. Okay. Thank you. The next question comes from the line of Rajak umar Vaidyanathan from RK Investments. Please go ahead. Yeah. Sir, thanks for the follow-up. Sir, my question was on the BOPP film price increases. Is it a tailwind or a headwind for us? Price increases is a headwind, right? Headwind because, you know. Yeah, because we don't sell. Okay. I believe there is a big shortage in the market. Are we importing it now or are we sourcing it locally? We are working locally. Okay. Sir, the second question is on the pet food segment. If you can give any colors, do you see any upside? There's a competition. What is the competition? Yeah. Pet food is really one of the very good upcoming growth opportunities for the companies which are actually in that field. We are seeing that this industry, as you actually pet care or pet food industry, is growing very well. As Huhtamäki globally, we are one of the leaders in this area, pet food products, because they have very high and demanding barrier structural properties. Here also, we are using that expertise to engage with our customers. We are seeing packs and oil volumes and the industry is still evolving. There is definitely a good opportunity, clearly. What is the confidence you have from the segment? Is it a significant number? For India, it's small but growing. Okay. Okay. Lastly, one housekeeping question, sir, on the cash flow since somebody asked this question. I see that number is in the negative. It's more on inventory gain we booked in the first half. Is that the correct assessment? It's an inventory gain of almost INR 10 crore that we booked in the first half. Yeah, please go ahead, sir. I'm saying there are different motives in the stack so that we are right or false at the same time. Last year, which is the only. Go ahead with your question. Yeah, did a certain crore inventory gain, yeah? We just found that we're right or false. I mean, we're not getting into the discussion of the overall impact of inventory because we have provision gains and then we're right or false. The overall impact will be the same. Yeah, because I see a number of INR 93.9 million. That's the reason, I think. Yeah. Yeah. Sir, and there is also a INR 2 crore derivative gain booked. If you can also comment on that. Is it something to do with the ECB or? No, it is more towards the hedging what we do on our FX exposure. Estimated to us. ECB is into INR, excluding to dollars or U.S. dollars. Okay. Got it. Thank you so much. Thank you. Thank you. I think we are close to the end. Ladies and gentlemen, in the interest of time, that was the last question. I would now like to hand the conference over to the management for closing comments. Thank you. Over to you, sir. Okay. Yeah. I think a very interesting and engaging conversation. While we do take questions, I would say keep asking these questions because while we are answering these, some of them, there are definitely some discoveries. Thank you, Jagdish. You are taking very, you know, notes good so we can actually exchange later on. I appreciate everyone asking these questions and keeping us engaged. We continue to engage with all of you. Thank you for your cooperation. Thank you. Thank you. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us. You will now disconnect your lines. Thank you.