Ladies and gentlemen, good day and welcome to Ganesha Ecosphere Ltd Q1 FY25 Earnings Conference Call hosted by Antique Stockbroking Ltd. 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. Manish Mahawar from Antique Stockbroking. Thank you, and over to you, sir. Thank you, Neera. On behalf of Antique Stockbroking, warm welcome to all the participants on the 1Q FY25 Earnings Call of Ganesha Ecosphere. Today we have Mr. Gopal Agarwal, CFO; Mr. Prashant Khandelwal, Senior Vice President; and Mr. Yash Sharma, Director, Ganesha Ecopet from the management. Now, I would like to hand over the call to Mr. Agarwal for opening remarks, post which we'll open the floor for Q&A. Thank you, and over to Gopalji. Yeah, thanks, Manish, and Antique Stockbroking for hosting us. Good afternoon to all the participants, and I extend a warm welcome to the June 24 quarter earnings on call of Ganesha Ecosphere Ltd. The first quarter of FY25 was having a mixed bag of achievements and challenges. We achieved a tremendous quarterly growth year-on-year basis when Q1 of FY24 was washed out completely due to demand and price meltdown of ASF and NYAN. The impact of this lasted till quarter two of FY24. Turning towards the challenges, the textile industry is still struggling with huge overcapacity and cheap imports from China, which is creating pressure on pricing as well as demand. As per estimate, on average, spinning units in the country are operating at around 65%-70% capacity utilization, while historically, average utilization was around 80%-85%. Under capacity utilization, leaving very little headroom with the players in the industry to absorb any price increase in feedstock. Further, this quarter was witnessed. We witnessed a sudden spike in exports of washed PET flakes to the U.S. and some countries of Europe where PET EPR has been introduced. Because of this unprecedented increase in exports, prices of PET bottle scrap increased by almost 10% during the quarter, particularly in the latter part of the quarter, which could not be forced onto the customers due to suppressed demand within the textile industry. Another big challenge was the multi-fold increase in sea freight due to Chinese demand for containers and ships for the U.S., as well as increased geopolitical tensions in the Middle East, which increased the transportation cost of export deliveries for orders already booked and deliveries were scheduled. All these factors impacted the margins of the GSE business by 150 basis points, though we achieved a higher portion of 28,270 tons with capacity utilization of 106%, which is an increase of 4.5% over last quarter and 1.87% over the corresponding last quarter. We earned EBITDA of ₹24.95 crore as against ₹17.18 crore earned during Q1 FY24, which is an increase of 45.2% on year-on-year basis. However, EBITDA was declined by 10.5% over the last quarter number of ₹27.89 crore due to factors discussed above. We earned net profit of ₹21 crore, which is 2.4 times higher than the Q1 FY24 number of ₹8.67 crore, and is at par with PET numbers of last quarter with savings and interest numbers. In subsidiaries, we achieved a higher EBITDA of ₹22.75 crore, registering a growth of 18% over the last quarter of FY24. The growth is on the back of some capacities which were operational during March 2024, though the pace of ramp-up of our second resin line of rPET granules was slower than our expectations due to some technical factors on the one hand and passing on the price increase in raw materials to the customer after some time gap, generally after a month on the other. Overall, we earned an EBITDA margin of over 24.5% from businesses in our subsidiaries. Going forward, towards other quarters of the current year, the journey seems a little bit uneven for our fiber and yarn business, with the addition of some new capacities in the industry intensifying the competition further and the present political crisis in Bangladesh affecting our exports. However, with the moderation in PET Bottle Scrap prices during August and the expected drop in sea freight from the second fortnight of August 2024, additional costs incurred in Q1 are likely to go away. The third production line of rPET granules has become operational, and the expected production ramp-up by September will improve the earnings. We are having visibility for the uptake of production of all the three lines till December 2024. We are also expecting the production ramp-up in the rPET line and yarn division by December 2024. So, working on subsidiaries are on expected lines, and we are confident that FY25 will deliver excellent results on an overall basis. As regard to our plans for adding further capacities in the rPET segment, we are actively working on it, and hopefully, we will come out with details on it by the time of our next on-call. This is all from my side. We now invite you with your questions which you may have. Thank you. Thank you very much for involving in the question and answer session. Anyone who wishes to ask a question may press star and one on the 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. Participants, you may press star and one to ask a question. First question is from the line of Aakash Jain from Money Curves Analytics. Please go ahead. Hi, good morning. I just have a couple of questions, I think mostly related to the RPSF business. Like you said, because of the EPR norms, there has been more export of PET flakes, which has led to the increase in raw material prices. So, how will this going to remain an issue for us going forward also, right? Because once the EPR norms have been introduced in the US and Europe, this will continue, right? These EPR norms are only going to increase in terms of compliances to EPR. So, I'm just wondering, is the pressure on raw material you see continue to be there? A A little bit up and down, but upward bias on raw material prices, do you see that happening? Thank you. Yes, Mr. Aakash, thank you for the question. Of course, we expect the pricing pressure on the raw materials for the PSF business or PSF business because just now there are the exports of PET flakes, which we don't expect will be a longer phenomenon. But of course, with the introduction of the EPR guidelines from FY25 in the country, there will be pressure on the pricing of raw materials, and so the PSF business will be affected. So, on that front, we are taking a couple of steps. Number one, we are going for the further value-added products into the sort of value-added products where we can increase our margins and to absorb the increase in prices of PET bottle scrap. Number one. Number second, we are also working on some forward integrations in the PSF business where we can make the more value-added and can address the issue. Sir, why are you saying that the export of PET flakes will not be an issue going forward? Because this quarter you said that is an issue, and why will the export not be there in the coming quarters? What is the reason for that thought process? Yeah, I think you can address it very well. Yeah, definitely, definitely. So, definitely, a very good question. So, basically, you see, if you look at the plastic waste management and EPR regulations, the aim of plastic waste management and EPR is that every country should be recycling their waste and should be basically consuming their waste to make rPET and recycle plastics again. That is the design of plastic waste management is to solve every country has to solve their own problems, correct? So, as you've seen that the waste flow, like ultimately the waste flow, which was earlier happening from Europe and U.S. to all other countries, it got subdued, right? It got there were imposed restrictions on the flow of that waste material from here to other countries. So, we think that is going to be a future. In the future also, the likelihood is that the design of brands and the design of PWM is such that it needs to boost every country's own recycling infrastructure. So, currently, they are dependent on flakes from outside because currently they are investing and developing their own collection and recycling and washing line infrastructure, which they are currently still lagging on. They have set up the forward integration capabilities of granulation and all and consumption of the granules. They've started already, but the back end they are still currently investing and developing. So, we expected it's a short-term phenomenon, probably a couple of quarters, years until it's going to happen. But ultimately, every country is going to recycle its own waste and consume its own waste for the packaging regulations. Also to add, there is one more big factor that yes, there is currently a pressure because of the gap in supply and demand, but going forward, the beverage industry in India is growing at 18-20% CAGR itself. The beverage consumption in India is growing at 18-20% CAGR itself. So, the bottle generation is also increasing dramatically as well. On the Warangal side, sir, the RPSF unit in Warangal is now at what capacity utilization? And just an additional question here. We earlier had guided that the Warangal RPSF is more value-added. Sorry, it can't hear you. Voice is not coming clear. I'm audible now? Yes, better. Thank you. Go ahead. Okay, sorry. So, I'm just saying I just wanted to understand on the Warangal RPSF part, what is the capacity utilization we are seeing in Warangal? And I think earlier you guys had said that the RPSF in Warangal is more value-added, so much higher margin than we will have in the standalone business. So, is that something that we are seeing that the Warangal RPSF margins are significantly better than the standalone? Can you guide a little bit on what is happening on RPSF in Warangal? What is the RPSF in the standalone business? Yes, so we are operating at about 80% capacity utilization of RPSF business in Warangal. And we are making the value-added product there. We are making the dyed fiber there, which is much value-added than the normal fibers which we are making at the plants of the Ganesha Ecosphere. So, of course, we are getting the better margins there. Any guidance? Is it like 2%, 3% higher, 1% higher? Just a broad guidance. Yes, yes. So, it is higher by 2%-3% higher than the normal business. Okay. So, just one last question. So, in rPET, clearly the uptake has been great, and I think we are already talking about adding more capacity, which is as per expectation, right? We all knew that the bottle-to-bottle business will do very well. The disappointment has been on the filament yarn part. So, the ramp-up over there is clearly being a challenge. So, can you also a little bit allude to what challenges we are seeing? Because ideally, it's only one line, and we should have really seen good ramp-up and full capacity utilization by now. So, can you throw a little bit of light on what are the challenges and what do you see in the next few quarters how filament yarn will play out? So, Aakash, unfortunately, the textile industry is not doing well. It is under tremendous pressure, the textile industry. And so, the ramp-up of this line is very, very slow, and it is not as per the expected lines. So, we are now expecting we will be getting the optimum production by the summer quarter. So, in the next two quarters, we are expecting it to be online. So, sorry for an additional part. I think earlier, I think my understanding at least used to be that the end consumer, which is the garment manufacturers, are going to recycled filament yarn more as a value-add, right? As a value proposition to their end customer, and there is more like a replacement to the natural yarn they may be using. So, I understand the overall demand issue, but the replacement of filament yarn or recycled filament yarn with natural yarn should have been a phenomenon that should have continued, right? So, yes, you can address it. So, yes, yes. Let me explain. So, it's not a replacement of natural yarns, but it's a replacement of virgin polyester yarns, basically. Now, you please understand that virgin polyester yarns, filament yarns are very, very cheaper compared to recycled filament yarns. Recycled filament yarns, the cost is approximately 25%-30% higher than compared to virgin polyester yarns because of the... And you know, like so, recycled filament yarns are very, very premium products. Now, the brands who have to use recycled filament yarns have to use because of they are having some product lines which are made only from filament yarns and not spun yarns or RPSF, basically. And that is where these sports and application brands basically are looking at using recycled. but because of the tremendous pressure on the textile industry on an overall basis, the adoption and the switch has been much, much slower than we thought of. And they are currently doing the projects to take it to the final stages. All of that is parallelly going on, but at the same time, the adoption has been much, much slower only because of the economical reasons and the overall factors affecting the textile business in a much greater sense other than the other things. They do have their current strategic sustainability goals to start using these materials. It's just that the adoption is going slower. It has to come online sooner or later. Thank you very much. Participants, you may press star and one to ask the question. Next question is from the line of Bhavya Gandhi from Dalal & Broacha Stock Broking. Please go ahead. Yeah, hi. Thank you for the opportunity. So, a couple of questions from my end. One, if you can tell me about the effective capacity that you have because you mentioned the nameplate capacity that is closer to 196,000. But what was the effective capacity for the current quarter? Yes, so the effective capacity when we talk about we are having the capacity of 108,000 tons of all the products in our Ganesha Ecosphere. And in Warangal, we are having capacity of about 28,000 tons. Right. So, that is the nameplate capacity, right? But the capacity that you are currently using? Yeah, so all the capacity is being used. So, all the plants have been operational now. So, now the entire capacity is being used. Okay, so say for example, right? So, the capacity utilization is different level for the different products, but all the capacities are operational now. So, let me ask you in another way. If you can give product-wise capacity utilization for the Warangal plant, say rPET, filament yarn, and RPSY, if you can give separately. So, basically, for internal reasons, we give the capacity utilization at consolidated level of the Warangal plant. But Warangal plant is subsidiary, right? So, that gets consolidated with the traditional business. So, if you can give only for the Warangal plant, if not product-wise. Yeah. So, you see, in June quarter, the capacity of only 64,000 was operational and not the 78,000. The 14,000 line was operational from it started from July 1st. So, it is in the current quarter. So, out of 64,000 production, we are roughly using the 55% capacity utilization. Okay, 55% capacity. Yeah, now that helps. Yeah, perfect. And sir, if you can tell more about the washed flakes because washed flakes are getting exported, but we procure PET bottles, right? So, our pricing has to be different because we individually procure PET bottles and get it converted to washed flakes. So, in terms of raw material, how has it impacted with respect to washed flakes? If you can explain the entire trajectory, how it works. So, basically, the washed flakes is produced from the PET bottle scrap. We are buying the PET bottle scrap and we are processing and washing it. And then we are making the PET flakes which are used in our production line for making the final products. So, what is being is the PET bottle scrap is converted into washed PET flakes and that are being exported. So, the raw material is same for the washed flakes being exported and the raw material which we are using. So, are we seeing increase in PET price procurement? That is what I want to understand. Yes, yes, yes, yes. So, the PET procurement prices have increased because of that. How much is it possible to quantify in terms of percentage? Maybe last quarter, what was differential? Last quarter, it was by about 10%, the input cost was increased. Okay, okay. And that similar range has been seen at washed flakes level also? PET as well as washed flakes level? This increase. Because of the washed flakes, because they were getting the good prices from exports of washed flakes, so they bought it at higher prices. Okay, and do we export washed flakes? No, no. We have the capacity. We do entire captive consumption. Okay, captive consumption. Okay, sir. And about the. We don't have the spare capacity for making exports or selling it. Okay, okay. And has the procurement prices improved after? Because you mentioned in the PPT that prices have now stabilized in August. Yes, yes, yes, so what happened is now as the sea freight has increased multi-fold, so the cost of PET washed flakes has also increased, and so the exports have come down. Okay. Got it. The pressure has been released on the feedstock now. So, is it back to normal level? Minus 10%? The increment of 10% is now again getting subsidized? I mean. It may or may not, but certainly, it has started to come down. Okay, it has started to come down. And also, with respect to on-ground situation of EPR, are you seeing that the inquiries are increasing? Because I know that we've been working with beverage companies, but beyond that, any other companies have also started procuring from us? And if you can name a few of the clientele that we have who started procuring from us. Yes, yes, surely. So, a couple of more FMCG brands have also started using now. Although the volumes are basically the PET rPET consumption in the beverage segment is the highest. So, they are going to be ultimately the biggest customers for us. But FMCG segment has also now started using. So, there are a little bit of quantities, 10%-15% that we are now supplying to FMCG segment as well. Okay. Can you quantify in terms of number? If not in terms of names, how many customers are procuring from us? Around 10 to 12 different converters we are now supplying for FMCG segment. Okay, got it. And with respect to further CapEx, as, because EPR is going to get kicked in from 1st April. So, have we thought of any further CapEx? And are we in the process of announcing any further CapEx? Yeah, so we are working on the extension plan in that segment. And as I covered in my opening remarks, hopefully, we will come out with a complete plan by next phone call. Thanks, Gopal. Yeah. Okay, that's it. I'll get back in the queue. Thank you so much. Thank you. Thank you. Participants, you may press star and one to ask the question. Ladies and gentlemen, you may press star and one to ask the question. Next question is from the line of Pradeep Singh from Finterest Capital. Please go ahead. Hello, sir. Good. Pradeep, sorry, you're not audible. Hello, sir. Can you hear me? A little better. Go ahead. Hello. So can you guide us on high-value products across HDPE, LDPE, and PET? You are focusing on high-value products. Pradeep, we are into PET bottles. PET bottles. And we are not into the HDPE and PP. But your presentation, sir, you have disclosed that you are focusing on the high-value products. So can you guide us on this? High-value products is in our product range itself. Okay. So you can give this idea how can you okay into this product and all that? So, your voice is not clear, Pradeep. Hello. Pradeep, can you speak to the handset if you don't mind? You have expansion plans in regard to this value-added product. Can you brief something related to that product and what are the revenue guidance for FY25? Yeah, so value-added products, we are talking about the forward integration in the fiber business itself. So where fiber is used in the technical and non-woven textiles. So we are studying on some of the products in the technical and non-woven textile where good value addition can be made for fiber, and we can put it in our company, in our expansion plan. Okay. So what are your focusing features in revenue guidance, something? Yeah, so we are expecting a revenue of about INR 1,500-1,600 crore this year. Pradeep, you're not audible. Need to know response? We move on to the next participant. Next question is from the line of Manas Thakkar from MD Advisors. Please go ahead. Hello. Good afternoon, sir. Thanks for the opportunity. Sir, I just wanted to ask about the operating margins. Will it be sustainable throughout the year of around 14%-15% on consolidated basis? Yes, we are expecting it will be on sustainable basis. This Bangladesh issue which is going on right now, so won't it negatively impact our exports and the margins which are usually coming from there? Actually, we are expecting the sea freight which has been increased multi-fold in the last one quarter, they will be rationalized from this month itself. And so our exports will be remunerative going further. And of course, we are having some concerns in Bangladesh because unless and until the scenario is not clear there, our export will be impacted to Bangladesh. Okay, okay, okay. Understood. Thank you. Thank you. Next question is from the line of Naman Parmar from Niveshaay Investment Advisory. Please go ahead. Yeah, thanks for the opportunity. First question is regarding what new product pipeline are there in HDPE and PET, etc.? Naman, we are not into HDPE, etc. Okay. Not on HDPE. Yeah, we are primarily a PET player. So our main raw material is PET, and we are making the products which is made from the PET. Okay, from PET. Okay. And all the raw material prices are fully passed on to the consumer? Yeah, so in case of B2B granules, rPET granules, of course, yeah, it is passed on. There will be some lag of time, say one month. And in case of PSF, generally, we are able to pass it on to the customer. But given some change in the scenario just now because of the exports of the PET flakes, etc., the alternate use is there. And also, the downturn in the textile industry, we could not pass on the increase in raw material prices to the customers in PSF segment for this quarter. Okay. Thank you. Naman, sorry to interrupt you. I'll request you to come back for a follow-up, please. Yeah, okay. Thank you. Next question is from the line of Himanshu Dugar from Safe Gains Financial Advisors. Please go ahead. Yeah, hi. Thanks for the opportunity. Sir, we next ask about the price inflation for the rPET, specifically the rPET recycle, the plastic that you're sourcing. I just wanted to understand the realization, how do they move in line with the increase in rPET inflation? Because you would also be passing on the price inflation, right? I mean, obviously, you said that some of it is already coming down. But are you looking at some pricing action as well here? Yeah, so Himanshu, there was till now the PET bottle scrap having only one application. That is for making the recycled PSF. So recycled, whenever there was a variation in the prices or the changes in the prices of our PSF, we are able to pass it down to the raw material suppliers. So we are managing it very well. But now, as the things have, the alternate use of the PET flakes has emerged, especially after the EPR guidelines, the use of PET bottle would be in B2B segment also. And also, there is a short-term phenomenon of this PET bottle flakes export. So these two alternate uses have emerged, which are putting the pressure on the price of the raw material. And because the textile industry is not in good shape, so we are feeling some pressure on pricing front. Sorry, did you say that PET bottles are getting exported as well from India? Then that would be a decline in domestic supply for you, right, of raw material? No, this is not like that. But as the exports have started, so the alternative consumption has developed for the PET bottle. And so as they were getting the better prices from export markets, so they bought the PET bottles at higher rates. Understood. So now that most of these countries are, especially the developed market, are having more and more focus on EPR guidelines, this is going to become a phenomenon where when we were able to source some of the raw material cheaply, that thing is almost now gone. And even domestically, there could be some amount of RM inflation, which will be sustainable as well, right? I mean, this is not something that is a temporary inflation spike in prices, and it will once again come down. So when things kind of sustainably go up, I mean, the RM inflation kind of becomes. There's a new normal in the RM cost for you. In that situation, and especially now that textile continues too. You can't say how long it will be like this, but it continues to be benign. Do you see, especially for the next three, four quarters, some kind of margin pressure building up? Or do you think that can be handled without the passing on of some inflation? So yes, would you please answer the question? Yeah, sure, sure. So basically, you see, first of all, this increase in raw material prices, first of all, it has been temporary only. Again, currently, as we speak, from the past couple of weeks, we have seen that they've started to go down, the downfall has started. So currently, what is happening is that there are a lot of new balances being formed between bottle to bottle, between bottle to flake, as an export alternative, and bottle to fiber. So new balances are currently being created. And so there might likely be a little bit of ups and downs in terms of the raw material pricing and all of that. But we think that historically, we have been able to pass on this delta to our consumers, to our clients, customers. And I think it's going to be the same in the future as well. So, textile, why this quarter we were not able to pass on? Because of the pressure in the textile industry overall in general. There was a big price and demand pressure which was mounting up and was affecting the trades happening. So that was the reason it did not happen this quarter. But we think that in the long-term, longer-term vision, it should get normalized as it has before also. Ultimately, waste has to be recycled. Otherwise, there's no other use really. So the cost of collecting and cost of recycling the waste has to be absorbed by the industry. In the longer term, it's bound to happen. That's what we think. Okay. Great. Thanks for that answer. Just one small data point, just a quick ask. Like you said, the correction in the last two weeks. So if you could, I think earlier said that there is a 10% quarter-on-quarter jump that you saw in the RM cost. So is that, I mean, is there a similar amount of correction that you already witnessed, or do you think that could happen coming months? Sorry, Dugar, I couldn't get you. Your voice was not audible. Sorry, is it better now? Yeah. Yeah. I was asking, I think something that you mentioned during the call that overall, you have seen broadly 10% kind of hike in the raw material prices. But in this month, you have seen some kind of moderation as well. Is that back to the level that was in, say, 4Q24, or we are still somewhere above the range? Yeah, so as I answered earlier also, the prices have started to come down. But it depends upon the demand of the PET bottles, whether it will be come down by 10% or it will be in between. But certainly, the prices have started to moderate. Got it. Great. Thank you so much. Thank you. Next question is from the line of Bhavya Gandhi from Dalal & Broacha, please go ahead. Yeah, hi. Thank you for the second opportunity. Sir, one, with respect to INR 1,600 crore of revenue guidance, if we were to achieve that, what sort of capacity utilization do we need for Warangal plant for the full year? And what sort of realizations are we looking at so that we can achieve the INR 1,500-INR 1,600 crore revenue guidance? Yeah, so the revenue, the incremental revenue will come from the Warangal plant only because the substantial capacity has been put up there, and the capacity utilization is increasing, so the turnover is increasing. Yeah, I get it, sir. But what sort of capacity utilization you will require to achieve that INR 1,600 crores of revenue for the full year? Yeah, so that is about 85% capacity utilization. Okay. At 85% capacity utilization, you'll be able to achieve INR 1,600 crores of revenue on a full consolidated basis, right? That's it? Yes, yes. Right, right, right. And with respect to EPR, who would be the final authority monitoring the EPR getting implemented? Is it the state, I mean, the State Pollution Control Board or the central boards? And who is going to look at the enforcement and? I think Prashant can reply it very well. So for implementing the EPR guidelines, the issuing authority is MOEF, Ministry of Environment and Forest. And the implementing authority would be CPCB, Central Pollution Control Board. They have to monitor. So every manufacturer or brand owner and recycler has to submit quarterly data with CPCB portal for their consumption of virgin PET, RPET, and for recycler, the total quantity they have produced and supplied to whom. So the whole system will be monitored by Central Pollution Control Board, CPCB. Great. If it is not implemented, then they will take action accordingly. Okay. And sir, are we seeing participation from the players? I mean, on CPCB, I understand a lot of people have registered. But are you seeing that the data is getting updated? And I mean, I just want some ground-level feedback as to implementation of this. Most of the brand owners, the big manufacturers, the converters, and the manufacturers of the polymer have already registered there, and they are submitting their data. There may be slow registration process for the very small converter and user of the PET because it has been framed in such a manner that even if a manufacturer of virgin PET cannot or an importer of virgin PET cannot sell their material to any unregistered person. So they have to submit all the data. So it is the owners and the manufacturers. And manufacturers, you can see there are very few manufacturers of virgin PET and importers. So it is going to be implemented very fast. Okay. Got it. And sir, last thing, can we use the rPET flakes and granules for any other purpose, like any other types of plastics? Or is it only for PET bottles that the sole purpose? Or can we use it for any other sort of plastics also? Already, we are using PET flakes for textiles. Textiles, it is being used since long. Now, due to the regulation, the RPET granules consumption in PET bottles has started. It is going already in textiles and then the bottles. Bottles, textiles. So basically, there are different kinds of polymers, and each kind of polymer has its own set of properties. So one cannot mix one with another. So that cannot be used in HDPE or PP applications like that. That is what I was looking for. Got it, sir. Perfect. Yeah. Thank you so much. That's it from my end. Good. Good. Good. Good. Good. Good. Thank you. Thank you. Participants, you may press star and one to ask a question. Next question is from the line of Aakash Jain from Money Curves Analytics. Please go ahead. Yeah. Thank you. Just one follow-up question. So I think we are very smartly looking at doing forward integration and doing more value-add in the RPSF business because in times to come with PET and EPR becoming more and more significant percentage-wise in India, maybe the raw material pressure will continue on RPSF business. I just want to understand how long the journey do you see that, and is there significant CapEx that will be involved in the forward integration on the RPSF side? Yes. So basically, you see, for RPSF value-added products, we are planning to consume the RPSF in-house. For RPSF, there will be reshuffling of the raw material mixing. So right now, we have more percentage of RPET flakes consumption, PET flakes consumption in making RPSF. But going forward, we are also increasing the uses or consumption of the textile waste as a raw material for our RPSF. So this exercise we are doing on the raw material front. As well as for having a larger value chain, we are also working for converting this RPSF in value-added products. So we are looking at several segments where we can consume our RPSF in-house and increase the total value chain. So it is very at this level, it would be very difficult to give you a number, a ballpark figure for the investment required. But yes, as and when we are taking decisions, we will let you know about these all things. This textile usage in the value chain for RPSF, is that a pilot we are running? Because this is something that we have just first time I'm hearing it. I think earlier in our conversation, you had mentioned that finally, textile should cater to textile and PET bottle should cater to PET bottles, right? That was the long-term that is what the solution is. But on the textile side, are we running a pilot on using? Okay. We are already doing some in-house discussion, R&D, etc. It is at very initial level. Concrete path has not been finally the plan. So far, we are in the identification process of the project and the products which we can put up. We will come out with the details once we finalize it or some clarity comes to us. No worries. Thank you so much. Thank you. Participants, you may press star and one to ask a question. Next question is from the line of Kaustubh Shanbhag from KOIS Invest. Please go ahead. Hello. Thank you. So I had a question on the bottle-to-bottle capacity. So we came across an article where Varun Beverages was partnering up with Indorama Ventures for their recycled PET requirement. And there are other capacities also coming out from different players. So do you see that as a challenge to ramp up your capacity? And do you see that as competition increases, it would be difficult to get a larger share from these brands? So you see, with the regulations kicking from the next year, next financial year, there is a huge demand you're going to generate. No single supplier can feed it. Certainly, a number of suppliers are coming up with their capacities and plant. Indorama is one of them. We are not much worried about the capacities which are going to be put up because we know we cannot. We are having only capacity as of now, 42,000 tons. We are going to work on adding some further capacities. That will not be sufficient for the industry itself. Certainly, some other players will come in. I mean, the guidance was that they will use their full captive requirements from that partnership. Is that the case, or that is not the case? I mean, what is the ground feedback that you have or ground intelligence you have? So basically, no, not really. So you are right that they have launched that partnership, JV, to build up their plant. And they are currently building up the plant. But we don't see, first of all, the consumption that they're having is also growing at a very high speed. And they currently have finalized only one plant, which will be also operational by the end of next year. And even after that, it takes approximately 6 months to 10 months to get approvals from Food Safety Authority and everything else. And then add on top the layer, the extra complicated layer of collection of post-consumer waste from India, which is also very complicated and not easy to do. So we think that we are going to be always at a much ahead of all the other players that are currently coming in. Anyways, the current partnership that they have, they only have access to 50% of the capacity that Indorama is going to set up. So only 50% access is what Varun Beverages currently has. So we don't think that it's going to deter us in scaling and maintaining our position as a market leader in the industry. Yes. Thank you for the explanation. Thank you. Next question is from the line of Varun, individual investor. Please go ahead. Hi. Congratulations on the good set of numbers. Just quick one question. The PET-to-PET recycling line that we started in March, what's the capacity utilization of that? And you mentioned there's some delay in ramp-up of that line. So what is that regarding? And when do we expect it to ramp up properly? Yeah. So whenever we put any new line, so the ramp-up takes some time. So I think we would be able to get the optimum production level in this quarter itself. Okay. And what about the third line? The third line is started in 1st of July. It will take one quarter. We are expecting the ramp-up would be by end of September. Okay, and so let's say by the end of this year, what kind of utilization do we expect from these three lines? Like, 42,000 is the capacity, right? We are targeting more than 90% utilization of the. By the end of this year? Yeah, yeah. What should be the revenue that would translate into 90% utilization? So the total overall revenue growth, the revenue which we have informed is about INR 1,500-INR 1,600 crores we receive. So INR 1,000 crores is from the legacy business and INR 500-INR 600 crores from the subsidiaries. Okay. Thank you. That's it from my end. Thank you. Next question is from the line of Krishna Grewal, individual investor. Please go ahead. Hello. Hi, Krishna. Hi, am I audible? Hi. Yeah, yeah. Yeah. So see, I have a question on the new foray that we are in the R&D stage, let's say HDPE, LDPE. And for HDPE, I remember that about two to three years back, also we had started a small production at Kanpur plant. But then we focused on the PET side. And as I was seeing, there are some listed players as well in HDPE. They are getting about 15% EBITDA margin. So what are your thoughts on this? And as the EPR quality comes, it would come in the whole plastic chain, not only in the PET. So what sort do you want? I think Prashant can, sorry. Yeah. Hello, Prashant? Hello. Hello. Prashant, is it you? Prashant? Prashant, sir? Hello. Hello. Hello. Yes. Am I audible? Yes, sir. You're audible. Yes. Okay. Okay. So Okay. So Okay. So basically, for HDPE, PP, we have done a small plant at Kanpur. And we are still exploring the products to be made because the biggest issue with the HDPE, PP is the supply chain. The supply chain of HDPE, PP waste scrap is still not developed. And there is a lot of different mix of material available because every cosmetics and the consumer product packaging is different. And to make a quality product there is very difficult, number one. And number two, the odor is also a big problem for HDPE and PP. So still, we are working and doing a lot of R&D in that segment. But yes, we are trying to find the right technology which can create a product which can be used by these big consumer products companies for their packaging. Okay. And are we looking at the chemical recycling side because recently there have been many developments and the new technologies coming up, and many players are putting up capacities as well? So what's your view on the chemical recycling? Yes, we are having discussions with some of the technological suppliers for chemical recycling. It is at very initial stage. Once anything formalized, we will let you know. Yeah. So the chemical recycling as of now is very costly, and it's not a viable technology. And it's very nascent stage. So we are keeping tabs with the technology, and we are having the discussions also with the technology suppliers. But so far, we are not satisfied with the performance of this technology. So as and when it is available on the large-scale commercial level, so definitely, we'll go for it. Okay. So that's the view that I wanted to share that in the battery recycling. So they get a lot of HDPE as well. So they are doing good in the HDPE plastic that they get from the batteries, and margins are good because they are having already a good sourcing for the lead-acid battery. So that kind of supply chain can we also explore, or we can partner with someone to increase their plastic side, and they would do the battery side. It's something that sort of thing we can explore. Certainly, we are having these things in our mind. But right now, our key focus is on the PET recycling. So definitely, we have started some pilots, but we are not much focused on this HDPE and PP. But definitely, once we will ramp up our required capacities in the PET line, PET segment, we will look for the other segments. Okay. Thank you so much for your time. Thank you very much. As there are no further questions, I'll now hand the conference to the management for closing comments. Thank you. Thank you, Manish. Thanks to all the participants for dropping by. Hope to see you soon for our next quarter earnings calls. And thanks again to Antique for having us here. Thank you very much to all the participants. Thank you. Thank you very much. On behalf of Antique Stockbroking, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.