Ladies and gentlemen, good day and welcome to the Ganesha Ecosphere Limited Q4 and FY 2026 earnings conference call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. I now hand the conference call over to Mr. Manish Mahawar from Antique Stock Broking Limited. Thank you, and over to you. Thank you. Good afternoon, everyone. I am pleased to host today's earnings call of Ganesha Ecosphere. We have leadership team represented by Mr. Gopal Agarwal, CFO, Mr. Prashant Khandelwal, Senior Vice President, Mr. Yash Sharma, Director, Ganesha Ecosphere. Without any delay, I would like to invite Mr. Yash Sharma to start with opening comments, post which we will move to Q&A. Take it over to you, Yash. Thanks a lot, Manish. Good afternoon to everyone, and thank you for joining us. We are here today to walk you through our Q4 FY2026 results and highlighting the key operational and financial achievements. We'll share the insights on the broader industry and macroeconomic environment which has shaped our performance currently. The first three quarters were marked by disruptions and uncertainties, particularly around the pending regulation clarity, which created a lot of challenges for us in planning and execution. We are, however, delighted to report that in FY2026, we concluded on a high note, reflecting both the resilience of our business model and the agility of our teams in navigating a challenging environment. Both standalone and subsidiary businesses have performed well during the last quarter. In Q4 FY26, company has made a strong performance with consolidated production numbers of 41,268 tons, which is an increase of 6.45% over Q3 FY26. Sales volumes have also increased to 45,162 metric tons, which is increase of 12.25% over last quarter's sale volume. Company has closed a consolidated top line of INR 423.94 crores, EBITDA of INR 52.35 and bottom line of INR 23.21 crores, registering a growth of 18.7%, 70.4% and 388.6% respectively over the last quarter. Our company has earned an EBITDA margins of 12.35% as against 8.6% during the last quarter. On standalone basis, the company has achieved a production of 28,209 tons and sales volume of 29,234 tons, which is lower by 3% and 6% than the previous quarter numbers. Revenue numbers at INR 260.33 crores are lower by around 4.8%. However, there's an improvement of 125 basis points in the EBITDA margins in the standalone business. Growth in top line as well as in margins were contributed by improved demand, stable prices, as well as liquidation of the inventory. On a year-on-year basis, there is an improvement in production and sale numbers at consolidated level, with production up by about 6.4%, revenue up by 23.1% and EBITDA up by 2.5%. Full year performance is almost at par with FY 2025 numbers in terms of production, sale volume and revenue. EBITDA and profitability were hit adversely due to the weak performance of the first nine months for the reasons discussed earlier. There is a significant improvement in operating cash flow generation, which stood at INR 170 crore, enhancing our ability to fund the future growth internally. Net debt position has been at INR 375 crores, is also at a very comfortable level for us. From a macroeconomic perspective, FY 2027 has started amidst global volatility. The ongoing Middle East conflict has disrupted supply chains and driven up virgin polymer as well as PET scrap prices, creating significant pressure across the textile value chain. This is impacting the demand for manmade fibers and the industry struggling to absorb rapid increase in feedstock prices. The situation will improve drastically upon resolution of the conflict, as the inventory levels across the value chain are at very low critical levels and supply pipeline is almost empty. The wait for India's textile industry revival has become really long, first due to higher U.S. tariffs and now because of the global supply chain disruption in crude and its derivatives. We expect significant turnaround for the industry once the crude prices normalize and the global supply chain revives. The MoEF issued awaited notification on the March 31st, 2026, clearing the smoke over the adoption of rPET granules and reaffirming the mandatory recycled plastic usage targets. This clarity has removed lingering uncertainty and enhanced industry confidence and has provided us with good visibility of demand. Strategically, we have taken decisive steps to strengthen our capacity and product portfolio. We have commissioned a 22.5 KT brownfield expansion of rPET chips at Warangal with ramp up expected by Q2 FY 2027. We are pleased to share that we are also pursuing another 20 and a 0.5 KT expansion and debottlenecking projects to push the installed capacity to nearly 1 lakh tons by FY 2027. We have also decided to drop the Odisha greenfield project for now, which was originally intended to take our aggregate installed capacity to 102,000 metric tons by FY 2027/2028. However, our Warangal facility alone is set to reach nearly 100,000 tons by the end of the current financial year and with much more lower and efficient CapEx. Alongside building this milestone, we are actively planning for future expansions with a strong focus on enhancing utilization levels and boosting the overall productivity of our operations. On the product side, we are having a strong visibility of demand for the rPET granules, during FY 2027, with significant improvement in capacity utilization level of existing as well as enhanced capacities. Our filament yarn has successfully qualified with a leading global textile brand, and we expect to steadily improve utilization rate in this segment as well over the next three to six months' time. This milestone particularly significant as it demonstrates the acceptance of our sustainable products by global leaders, paving the way for stronger export potential and long-term relationships. At the same time, we remain cautious on the rPSF in Spun Yarn where demand has slowed due to geopolitical disruptions and the substantial increase in PET scrap prices. We are confident that our diversified portfolio and focus on high growth segments of subsidiaries will continue to drive the momentum. The combination of regulatory clarity, CapEx expansion, product qualification with global brands, and rising industry adoption of our PET products has positioned us strongly for FY 2027 and beyond in achieving sustainable growth targets. With this, we are ready to take the questions which you may have. Thank you everyone. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star 1 on their touch-tone telephone. If you wish to withdraw yourself from the question queue, you may press star 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Meet Gada with Saangi Family Office. Please go ahead. Thank you so much for the opportunity. First of all, I would like to acknowledge the team for having the prudence to switch from this greenfield to brownfield expansion considering the evolving business dynamics. My first question to you is what kind of supply issues have you witnessed in the rPET capacities and licenses being provided by FSSAI from the start of FY 2027? If you could touch upon the demand scenario and the supply-demand gap, how is that seen by the customers? Thanks. See the current FSSAI approved capacity has grown to about 280,000 metric tons as of today. There are also pending FSSAI applications as of today to the tune of about 1.5 lakh metric tons as we speak, which also includes our brownfield expansion as well. As of today, the demand for rPET looks extremely robust and strong as after the mandate has been cleared by the MoEF and again has come out with the final notification. All the global brand owners and national brand owners have shown aggressive interest, and we have had good commitments and interest from them to supply rPET to them for the full year of FY 2027. Thank you. My second question would be how much further brownfield capacity addition or debottlenecking can be done at your Warangal plant? Will it be sufficient to offset the 40,000, 45,000 tons impact due to the shift in strategy? No. We have already put up the line of 22,500 ton. We are putting another line of 22,500 ton, which would be operational by Q4 2027. We are adding the 45,000 additional capacity as well making some debottlenecking. That would be around 10,000 ton. The total capacity would be around 97,000 ton, 98,000 ton. Got it, sir. How has the PET scrap availability been post this war and what kind of extra cost burden do we expect going forward into FY 2027? How does it revise the prices or the realizations of rPET? Really the demand of PET scrap is really very high at the moment because of the several applications including the rPET. That's why the prices of the PET bottle scrap has also increased substantially during the last two months' time. We are working with our buyers at the pass-through mechanism in which we are passing through the increase or decrease in the raw material prices to the buyer. Sir, if you can quantify in terms of what would be the PET scrap prices now and the realizations we are deriving in rPET? Currently the RPET price is in the tune of INR 56, INR 55, INR 56. Got it, sir. Thank you so much for answering my questions. Thank you. The next question comes from the line of Dheeraj Ram with 360 ONE Capital. Please go ahead. Hi, sir. Congratulations for great set of numbers. Few questions from my side. First one is what would be the guidance on EBITDA per kg for standalone business and subsidiary business for FY 2027 and FY 2028? Thank you, Dheeraj. Instead of going for the product-wise EBITDA, we are working on the absolute numbers for the year. We are looking for an EBITDA of about INR 225 crore-INR 250 crore in this year. Okay. Any EBITDA per kg, sir, or specific EBITDA per kg for standalone and subsidiary? Because of the several reasons, we are not working on the product-wise EBITDA. Okay, fine. Sir, any CapEx guidance that you want to say? As per my understanding, you're going to reach almost 90,000 to 100,000 tons in your rPET by end of FY 2027. What would be the CapEx for this entirely brownfield, sir? We have already made the CapEx for this 22,500 line, which is up and operational, and we are waiting for some clearances. For further capacity addition on debottlenecking of about 36,000 tons, it will be around INR 150 crore CapEx will be involved. Okay, got it. This 22,000 finite tons that got operational, is the FSSAI approval completed or that is going on and might commence in Q1 or Q2 FY 2027? We have already applied for the FSSAI approval and we are expecting it, we will get by end of next month. FSSAI approval will be completed by next month, and then we can expect the operation of this plant. Is that right, sir? The line is operational. Only thing is the approvals we are waiting for. Once the approval comes in, the line will be started full-fledged. Got it. Any CapEx plans for FY 2028, sir? We are finalizing the CapEx plan for future, beyond this 1 lakh tons capacity. We are sensing these geopolitical situations and the challenges emanated out of this situation. We'll shortly finalize our expansion for the future expansion plan. Got it. Sir, last question is. One thing we would like to add, this Odisha plant is only the dropping of the location. The plant has not been dropped altogether. The plants are intact. We are adding up the capacities in future also. As of now, we are not going at Odisha. Got it. Last question, sir. This POY/DTY/FDY yarn segment, you have said that last quarter you have onboarded a customer, large one. When can we see offtake starting for them and what is the expected offtake for them? See, basically, yes, we had onboarded the brand owner last quarter, by the end of last quarter itself, beginning of this year itself. Due to this whole geopolitical situation, a lot of challenges came in implementing and commercializing. We have already started the commercialization to a certain extent as of today, and we are in the ramp-up stage already, which will take our total utilizations to a good level going forward in the next three to six months. Okay. Sir, last question is, your standalone segment guidance, do you still maintain it, 9%-10% EBITDA margin, or is there any changes to that guidance? That guidance, basically, some challenges are there as of now because of this geopolitical tensions and global war-like situation, where all the supply chain has been disrupted badly, and this polyester sector being completely linked with the crude oil and its derivative prices. Challenges are there as of now because of the demand. As the downstream products are not well-posed to take on the price increase. They are buying the material, they are just liquidating the inventory. The pipeline is completely empty. Whenever the situation improves and all normalizes, the big demand is certain to come. As of now, the situation is something not very optimistic. Okay. Got it. Fine, sir. Thank you. That's all my questions. All the best for future results. Thank you. The next question comes from the line of Saransh. Please go ahead. Thank you for the opportunity, sir. I hope I'm audible. Yes, sir, you're audible. Yes. Please go ahead. Yeah. Congratulations on a very good set of results, sir. Sir, to the earlier participant, you said that the pipeline is empty and there is liquidation of inventory going on. I just wanted to understand with the intimation coming in by MoEF regarding the percentage of recyclable, it still sustains, right? There are 2 things. The question was about our legacy business. It is for the polyester staple fiber business. It is not for the rPET business. Sir, I am trying to understand for the rPET business, like the intimation still sustains that the companies have to be 40% recyclable. With 280 tons of demand coming in, 280 tons of capacity coming in, how do we see the demand going ahead and how are the things panning up from the customer's end? Have we seen incremental orders or inquiries for the same? Yes, you're absolutely right. Because of the mandate now again reinstated by the MoEF, there is a very high demand in the rPET segment as of today. As of today, we are running at full utilizations of our plant possible, full productivity of the plant possible, and we have increasing interest from the number of players as well as the volumes are growing in the rPET segment for sure. The rPET currently as of today is, we are seeing a very good demand across the industry. Sir, how is the demand-supply situation across the industry? Are we at under supply? Yeah. If you talk about the current situation, definitely we are at an under supply because the industry, if you look at the mandate of 40% which is reinstated for this year, the demand for rPET will be somewhere close to about 4.5-5 lakh tons, against the current supply of about 2.5-2.8 lakh tons. Definitely there is currently a supply-demand gap and the supplies are lower. The whole industry is ramping up the supply slowly to cater to the demand. Is there any ballpark idea, like where will we be at post 2 years from now in the supply position? How many capacities are coming up? As I earlier told also, currently the approved capacity is about 2.8 lakh metric tons from FSSAI, already 1.6 lakh metric tons of applications are already pending with FSSAI. In 2 years' time, I think we will be able to reach a capacity of about 7 to 7.5 lakh tons overall as an industry. Will the demand for rPET increase going ahead with the mandate increasing? Yeah. The target is in improving manner. Currently it is 40%, and it will reach up to 60%. The demand is also expected to be around 9 lakh to 10 lakh ton. Just last thing, it will be fair to assume that the current rPET prices that are prevailing in the industry, that is the peak. See, it is difficult to say. Basically, how rPET prices work is based on the price of the raw material. Whatever bale prices come to, accordingly the rPET prices work out. It works in tandem with the bale prices. Understood, sir. Thank you so much, and all the best. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to answer questions from all participants, please limit your questions to two per participant. The next question comes from the line of Ishan from JM Financial. Please go ahead. Hello, sir. Congratulations for the great set of numbers. Am I audible? Yeah, you are audible. Please go ahead. I understand, sir, the uncertainty and the supply-demand gap right now. Can you please give a specific guidance, if you can, for the FY 2027 or FY 2028, how will the EBITDA margins be or how will the bottom line and the top line grow? Giving any specific number is not possible at this volatile time where the prices are fluctuating like anything. For the long term, we are set to get the top-line growth of 20% plus on CAGR basis. Okay. As the capacity utilizes, the margins are also going to expand, right? Yeah. Got it. Talking about, sir, the Warangal capacity, as you validated that the Q4 should be 70%-80% utilization. Was it 70%-80%, or what was the number of utilization of your Warangal capacity? Overall, it was 67% at Warangal facilities, but in case of rPET, it was above 85%. Okay. Got it, sir. Thank you so much, sir. Thank you. The next question comes from the line of Darshika Khemka with AV Fincorp. Please go ahead. Hi. Thank you for the opportunity, sir. I had a major question around the yarn segment. Firstly, what is the price of the raw material currently? As far as I remember, earlier you were mentioning that scrap bottle prices used to be in the range of INR 45 per kg. As mentioned in the presentation, you have said that it has increased. What is the quantum of this increase and what is the trend going ahead? Secondly, what would be the impact on the financials of the company going ahead, both in terms of the revenue and the margins and the overall industry situation on the demand shortage? You are right. Currently, the scrap bottle prices have increased. As I told earlier also, it is in the range of Rs. 55, Rs. 56 a kg as of now. Though the trend is now stabilized, so the prices are ruling around that level. In our rPET business, we are able to pass on this price increase to the buyer, so it will not impact the margin. Yes, certainly it will have some impact on our DKC business. Going forward, we are able to manage the things, and we are expecting we will be delivering a good set of numbers despite this increase in the prices. Okay. Do we expect any impact on the revenue considering the demand situation? Yes. The impact on the revenue because the prices are very volatile and very fluctuating, so the revenue numbers are also fluctuating accordingly. Would you be able to probably quantify a number around this? Like an indicative range would also be helpful. Yes, it is different for our different products. Like with fiber, it is in the range of INR 90-INR 200. In the case of rPET, it is around INR 150-INR 120 as of now. In case of the yarn, it is around INR 150-INR 160. It is fluctuating. All right. Can we expect like a 10% negative impact on the yarn segment revenues? It depends how long this global disruptions last. It depends on all because the textile sector is hit by this disruption very badly, particularly in case of India. All right. That's it from me. Thank you so much. Thank you. The next question comes from the line of Dolly Choudhary with Niveshaay. Please go ahead. Hello. Hi, sir. Thank you for the opportunity. I just had 1 question, just a follow-up on a previous participant's question. It was regarding CapEx only. We just mentioned that we're planning for the future CapEx plans. I want to know directionally, you also mentioned that maybe 2 years down the line, the demand supply may match in the industry as new capacities will come. If we are planning for CapEx for after maybe FY 2028, FY 2029, will it be in the same rPET sector or maybe we are planning for new ancillary products going down the line? Because maybe the margins will also not stay competitive when the competition will come. I wanted to get your view on that. Sorry, could you repeat the question? Sorry. I was just taking a follow-up on a previous participant, CapEx plans of our company. Maybe this year we are coming with brownfield expansion that you just mentioned, but maybe two years down the line when demand supply may match in the industry as mandate is already out, and maybe we directionally move in the same product segments only going forward, or we are planning for some new product segment also as new capacities will come in this space? Sure. See, I think as of today, at least for the next 4-5 years, it will take for the rPET industry to grow and settle down at its pace because you see in India, the consumption of beverages and the consumption of PET is also growing at a very good rate. As the consumption and as the usage of PET grows, the demand for rPET is also going to grow, also along with the increasing% of compliance levels. I think that at least for the next 3-5 years, I think the rPET is going to take to reach the level that it stabilizes, the industry really stabilizes that. Also, what is happening is that in rPET currently, the good quality or the high-quality suppliers who are able to sustain the operations at a good level are also very few. Not everyone is able to do that, which really differentiates us from the other suppliers in terms of consistency, quality, and everything. I think we are in a very good position given current scenario in the overall rPET industry development. As of looking at the other products, definitely, I think we are also currently trying to work out on the other different products as well, which will become the growth engine for the company in the future. Okay, sir. The new segments will get clarity more maybe going forward. Right. Yeah. Okay. That was all, sir. Thank you. Thank you. Next question comes from the line of Naeem Patel with Bastion Research. Please go ahead. Yeah. Hi, thank you for this opportunity. I had 2 questions regarding CapEx itself. The first was around considering we have suddenly dropped Odisha project, have we considered setting up plants in states where there are GSAL incentives or any such thought process in the pipeline? Basically, you see, the Odisha project was greenfield project, and it will take one and a half to 2 years' time in installing and get it operational. Instead we went for this brownfield expansion of our Warangal plant. We are able to ramp up the capacity faster and with much lower CapEx. We will certainly go for the other locations and plant. We are discussing internally. We are also watching the geopolitical situation, as well we are working with our suppliers for the suitable locations. We will finalize the same. Understood. Yeah. Just to clarify, I'm talking about in the longer term, as you have said in the previous participant's question as well, that rPET industry will take 5 to 6 years to normalize. Do you see that in longer term, recycling plants have to set up their facility next to packaging companies or brands? Have we ourselves considered doing some form of JV with bottle plants? We are working on several permutations and combinations, including the JV, including the putting up the plant nearer to our market. We are working on various alternatives. Understood. Okay. Yeah, that's all from my side. Thank you. The next question comes from the line of Ankur Gulati with Genuity Capital. Please go ahead. During Q4 for rPET, your average realization as per disclosed number is INR 103 per kg. Is that correct? Yes, it's correct. Your EBITDA per kg is roughly INR 19.80. Just want to confirm the numbers. Sir, your voice is very low. Can you please come a little closer? Your EBITDA per kg is INR 19.80 for Q4 recycled PET. Is that correct? Okay. Yes. For the subsidiary business, it is correct for subsidiary business. Yes. Yes. Perfect. Can you give me the exact capacity for recycled, which was active in Q4? For our PET business, the capacity which we can sell to external parties, not the backward integration tonnage but end product capacity. Yes. About end capacity, in which segment you are asking? We are having 3 segments. We are having the yarn, we are having the fiber, we are having the rPET. rPET, sir. rPET. Currently we are having the capacity of 64,500. Out of 42,000 is up and operational. 2,500 is waiting for the approval from FSSAI. We are adding further capacity of around 36,000 tons with adding bottlenecking as well as the new lines. It would be around 100,000 tons by the end of this year, and this is entirely for the outside sale. Sir, sorry, just one clarification. Maybe I don't know the details, but if your rPET is 45,000, then the subsidiary sale was 15,900. What else gets classified in subsidiary tonnage? No. It is the installed capacity, and the actual capacity [Non-English content] was much lower. Because of the disruptions over the opaqueness of the regulations and all those things. We could not sell the much quantum in the first three quarters. No. Sir, 45,000 is annual capacity. In one quarter, this quarter we did 16,000, roughly. Which means annual should be 60- Sorry. I'm sorry. There are other products also. There is fiber, there is yarn, other products also. We roughly sold about 11,000 tons of the rPET. Can you give me the other fiber and other third product also? It is not 16,000 ton. Sir, 16,000 tons is your. Gopal sir, in last quarter, we did a good sale of even a stock also. We released the stock in last quarter for rPET. Yes, that's correct. Our overall sale was 45,000 tons. Yes, sir. Consolidated sale was 45,000 tons. Including 29,000 tons from the rPET, 16,000 tons is for our subsidiary businesses, which includes the yarn, fiber, and rPET. Sir, jo subsidiary ka 15,900 hai usmein rPET, fiber aur yarn ka split de sakte hain kya tonnage mein? 11,000. To be very precise, it was around about INR 11,500. Rest is the fiber and yarn. Fair enough. [Non-English content] Steady state [Non-English content] Tonnage wise. [Non-English content] Woh Q2 [Non-English content] Q2 [Non-English content]. W e are expecting we will get the approval by end of this next month, June. [Non-English content] Yes, we produce about 8,500 ton. Extra, right? [Non-English content] inr 220 crore - INR 250 crore EBITDA guidance [Non-English content] for standalone business and subsidiaries [Non-English content]? Basically, it is not possible for us to give the product wise tonnage, but overall it would be around 150,000 ton. 150 of which, sir? 150,000 tons - 160,000 tons [Non-English content] total sale. [Non-English content] Yes. [Non-English content] My bad. It is around 180,000 tons-200,000 tons. It is around 200,000 tons. My bad. Let's say 10% [Non-English content] standalone business [Non-English content]. Subsidiary [Non-English content]. Yes. Okay. [Non-English content] 47,000 which means FY 2027 [Non-English content] 65,000-70,000 tons [Non-English content] Is it correct? [Non-English content]. 180,000 ton-200,000 tons [Non-English content]. [Non-English content] standalone sale [Non-English content] 100,000 tons [Non-English content]. Almost 100,000 ton-105,000 ton. [Non-English content] expectation. Yes. [Non-English content] Correct? Correct. Okay. Thank you. Thank you. The next question comes from the line of Chirag Jain with Spark Capital. Please go ahead. Hello. Namaste. Yeah. Thanks for the opportunity and congrats on good results. My first question is, sir, despite reaching around 85% utilization and subsidiary 85, 67% international margins are 19, 20% for 4Q. It hasn't reached the 24% level that we used to clock in FY 2025. Any color on that? Sir, your voice is very low. Your voice is not clear. Okay. I'll repeat my question. Yeah. I was asking, our utilization level in subsidiary is 67% for Q4, right? Sorry, for FY 2026. Our margins are 19%-20%. If I look back, it was 24% level that we used to clock in FY 2025. Any color on that? Is this the new normal, 19%-20% or there is a scope for expansion? Yes. Earlier it was at 25%-26% but the volume was very low at that time and so it has come down. Okay. Volume has come down. I was asking if 19%-20% is the sustainable margin, there is no expansion from here? Yes, we hope so, sir. Okay. Another question I have is, as you said, I'm sorry to interrupt. Chirag, I would request you to please use your handset. Okay. Standalone utilization level will go down, like, sir, you just said, and so margins will also be getting down for next one to quarters? No. Utilization level will go up. It is not going down. For standalone. It will go up. Yeah. Standalone, it is almost 100% level. Okay. There may be some downtrend there because of the current situation. Okay. Long term, basically, we would be doing it at 100%. Okay. Margins will also get impacted for few quarters because of whatever is happening. Yes, for standalone business, yes. Okay. Thank you so much. That was my question. Thank you. The next question comes from the line of Parth Agarwal with Bastion Research. Please go ahead. Hi, thank you for the opportunity. I have just a couple of questions. One was considering that our rPET prices would be much cheaper than virgin PET. Is that understanding correct? Hello? Yes, sir. Yes. Yes. Mm-hmm. Currently if you look at, the rPET prices are slightly lower than the virgin PET prices, correct? Got it. This is after accounting for the price increase of PET scrap, which is at ₹55 kg. Right? Right. Considering that we have done INR 19, INR 20 per kg EBITDA in the subsidiary business, and considering we are already running at almost full year utilization in the rPET chips business, what is the kind of EBITDA per kg we are looking at right now? It is a blended EBITDA and we are looking for to maintain the EBITDA. It is a blended EBITDA for our subsidiary business and we are looking for to maintain the same. Yeah. Same quarter last year, we were at ₹20 per kg. Is that the number which does not look achievable right now? Yes. With that since the margins have come down. Got it. Okay. Secondly, just last question. Considering our brownfield expansion that we're doing in FY 2027 and existing capacity, what is the peak revenue potential that we can achieve from our current capacity, assuming that we are running at optimal utilization? With the total plant capacity at Warangal, we are looking for a top line about INR 23,000-INR 25,000 crore. Okay, got it. That is all from my side. Thank you so much. The next question comes from the line of Bharat Gulati with Dalal & Broacha Stock Broking. Please go ahead. Yeah, hi. Thank you for the opportunity. I just had a question. I couldn't understand when you say that capacities after this 22,500 expansion will go to 100,000. The math sits at 87,000. Can the 13,000 delta be explained? I'm just not able to understand that. We are making some debottlenecking at the plant. Some additional capacity is being choked, that capacity will be released. About 10,000 tons capacity will be released because of that debottlenecking. Sir, would it be fair to say that 42,000, only 32,000 is currently utilizable? Is that what you're trying to say? Yes. Okay. Got that. Just trying to understand the gross margins for the subsidiary, that's taken a sharp hit year-on-year. Do we see this be a new base for the gross margins or can we see that recovery of 45% coming back in terms of subsidiary gross margins? Yeah. Subsidiary gross margins basically depends on the raw material prices and the sales prices. Basically, it is a completely pass-through mechanism as of now. In the last year it was disrupted. Most of the time it was spot sales. That's why it was higher. Just trying to understand, should we consider this as the new base for FY 2027 or should this revive back to the 45% gross margin levels? Yeah. Yes, please. I think the right way to look at it is not from the gross margin, but rather the EBITDA levels. How our business is structured is that across both textiles as well as packaging, our gross EBITDAs or the conversions are sort of basically how it operates in. The gross margins might change depending on the price levels of the feedstock and the finished product. The conversions or the EBITDAs are what stays more consistent. The right way to look at it from the EBITDA point of view. Yeah. Let me put it in that way. Should this be the new base for EBITDA for FY 2027 and from here we should see a sequential uptick, or should the YoY numbers, should the FY 2025 kind of EBITDA start to show back in our numbers? No. We are looking for the EBITDA which we have earned in the Q4. Just to understand, should we see an uptick in it sequentially, or should this be the base for FY 2027? In terms of absolute numbers, obviously there will be uptick as more capacity comes online and the utilization improves. No, I mean per kg. Yeah, that should be very similar. Got it. Just in terms of cash flows, we've generated about 120 OCF to EBITDA, 120%. Should this kind of cash flow conversion continue? What has caused this huge cash flow improvement in terms of conversion? Yeah. We are trying to manage our working capital operations very efficiently. Our target is to get at least 70%-80% of the EBITDA to convert into cash flow. This year, we got some release of our subsidies, so this cash flow is better. Going forward also, we are looking for 70%-80% conversion of the EBITDA into cash flow. Okay. That's very helpful, sir. Thank you. That's all from my side. Thank you. The next question comes from the line of Harshh Saraswat with Srujan Alpha Capital. Please go ahead. Hi. Am I audible? Yes, please. Hello. Sir, I wanted to ask if you could establish what was the situation without EPR norms and what it will be after EPR has been implemented. Asking from a long-term perspective of 2 to 3 years at least. I can understand the short-term volatility in the prices and everything, but what would be the long-term play here? Last year basically what had happened, although the regulation was there, but last year in between, in June basically, the government had come out with a draft notification that they would be delaying or basically giving carry forward of the current year's mandate to the future years. Because of that, what had happened was that last year, you can say it was as good as no mandate being there and the consumers, the brand owners had started delaying the usage of the rPET content because of which our expired contracts did not renew and the offtake of the rPET took a major hit. Since this year starting itself again, since the clarity has started coming in, the brand owners had started off taking the material from the year beginning itself and since after in March end when the regulatory clarity again came through, we are seeing a very good increase in the demand going forward and I think we'll be able to utilize our full capacities going forward with good set of numbers for our rPET business. Overall the sentiment would have changed positively in a much larger way now, right? Yeah, absolutely. That's why we were able to have a very good sale numbers in the first quarter as well. Also, could you quantify the current virgin PET versus rPET spread and how was it in March and has it declined after that or is it at the same prices or it has gone up? What is it? In fact, today because of the geopolitical conditions, the virgin prices are slightly higher than the rPET prices. Today the spread which used to be earlier at around plus INR 10, between INR 10-INR 12.50 between rPET and VPET, today it's about minus INR 5 between rPET and VPET. Okay. Can you quantify per kg if it is possible? Yeah, per kg. Basically the virgin prices today are in the range of INR 125-INR 130, whereas the rPET prices are in the range of INR 118-INR 125. Okay. Got it. On the demand side, brand offtake has started. There is no issues from that part, right? Correct. Okay. Overall I think the industry is looking up for next two, three years where your demand will definitely outpace the supply. That is what I'm trying to gauge. Correct. Absolutely. Yeah, we think so that will happen. Yeah. Okay. Thank you so much and all the best for the future. The next question comes from the line of Yash Anand. Please go ahead. Hi, I hope I'm audible. Hello? Yes, sir, you're audible. Please go ahead. Yeah. Congratulations on a good set of numbers, sir. Sir, my question was, at peak utilization, what asset turns do you expect in rPET granules? Secondly, ROE and ROC range should investors underwrite for the rPET CapEx once stabilized? What should be the ROE and ROC range should investors underwrite for the rPET CapEx once it is stabilized? The asset turn is about 1.25 to 1.30, 1.35, it is like that. 1.25 times-1.35 times of the CapEx. Overall, Warangal business, on long-term basis, we are looking for the ROC about 17%-18%. Okay. This will be higher when the MoEF regulation that is now 30%-40% will scale up to 50%-60%, right? No, it will not depend on the regulation quantum targets, but it will depend on our capacities and the utilization of the capacities. Going forward for this meeting, this demand front, you will be expanding your capacity and the asset turn on that would be, sir, if you can give any idea? The asset turn is in the range of 1.25 times-1.35 times, 1.40 times. Okay. Thank you so much. The next question comes from the line of Kunal Bhatia with Dalal & Broacha Stock Broking Limited. Please go ahead. Yeah. Hi, sir. Thanks for the opportunity, and congrats on a good set of numbers. Most of my questions have been answered. Just wanted to know, sir, in considering the current demand and supply mismatch, especially in case of the rPET business, for the next year, considering that few capacity ramp-up would come in, what is the maximum kind of volume we could achieve for FY 2027? As we have mentioned earlier, our total volume would be in the range of 180 tons-200,000 tons. Hello? Sorry, sir. 180 to- So- Sorry. Yes, you were telling a company? No, sorry, I was just supplying. The total volume we are looking at for the next year, for the current year will be between 180,000-200,000 metric tons of total volume. The rPET capacity would be about 100,000 metric tons, and we expect that we'll be able to achieve somewhere around 85,000 tons of volume for this year. Not for this year, because the capacity will come in phases. Yeah. This will be for next year. Yeah. Okay. I was just trying to understand what would be the best-case scenario in terms of the volume that we could deliver for FY 2027, considering the demand-supply mismatch in the industry per se. As we have told you, it is 180,000-200,000 tons. It is a range in which we will deliver the quantum quantity this year overall. Okay. Fine, sir. Thank you. Thank you. The next question comes from the line of Chaitanya Gadia with ANG Group. Please go ahead. Hi, am I audible? Yes, sir. Yeah. Okay. My question is that the future capacities that are coming, do you enter into a pre-capacity tie-up with the customers? If yes, then at some pre-agreed prices or some pre-agreed commercials? Sorry, could you repeat? The new capacities that are coming up, which will come online this year, do we go for pre-booking of capacities with the clients on some commercial arrangements? Not like pre-booking. How it happens is that, as the new capacities come online, we get the approvals from the brand owners, and then the utilization starts right away. Yes, we have ongoing discussions with a lot of customers to ramp up the supply of the products to them for the year. Okay, got it. One last question. The legacy business of ours, do you think it's going to eat up some margins of ours and cash flows from the rPET business as a whole? Yeah. On short-term, there might be some impact, but on the long-term, it will not be eating up the profits of our overall business. Considering that, we have given the guidance of over INR 225 crore-INR 250 crore EBITDA for this year. Okay. Thank you. Thank you. The next question comes from the line of Vibhor Talreja with [Mesh Amplifier]. Please go ahead. Hi, thank you for the opportunity. Sir, the rPET business benefit of margins because of this inverted spread would only be visible for 10, 15, 20 days or maximum a month in the March numbers. This would have only increased. While we have done INR 50, 52 crores EBITDA, the Q1 EBITDA should be significantly more given the spread is now significantly more in favor of rPET. Is that the right way to think of it? Not really. How it works is that our rPET pricing depends on the bale prices. How we work with our customers is that we have an understanding of supplying the rPET volume and the price with the bale price conversion cost. It is kind of not dependent on the virgin price. Yes, what does happen is that when the virgin prices stay at the higher side, the overall demand is slightly higher, but it doesn't impact much on the price of the rPET really. Okay. That's clear. The second question is more on the rPSF side, where the pricing is at a discount to the virgin PSF. Even there, again, given that the PSF has increased so much, there should be a volume push for our rPSF side? Am I missing something because I heard that the 100% capacity utilization in standalone may not remain the same, and there may be margin pressure on that business. Yeah, currently there is a pressure on the prices because of the increase in the feedstock prices, and the textile industry is not in a position to absorb the cost because of the demand is lower at downstream products. Understood, sir. The increase in price of PSF vis-a-vis rPSF must be even higher, right? Yes. The prices has increased. The prices has increased of rPSF also in tandem with the virgin PSF. Industry is not in a position to absorb the price hike, and so the demand has come down. Demand expectation, I understand, but the margin should not be a pressure in rPSF, right? Our raw material pricing has only increased 20%. If the demand shrinks then we have to cut down our production to some extent. It affects the ultimately bottom line. That's very fair. Thank you so much. Thank you. The next question comes from the line of Deepak Ajmera with IGE India. Please go ahead. Hello. With increase in the virgin PET price, are we in a position to increase our conversion margin going forward? It doesn't really work like that, sir. It works on a very long-term understanding with the customers. We have been working on a very similar understanding for a long time, so it really works like that. See, the virgin fluctuation, whether it is up or whether it is down, it keeps on changing throughout the year. We cannot really bet on what the crude oil prices are going to be 1 month or 15 days or 2, 3 months down the line. What we work on is very ethical and a transparent mechanism for the rPET linked to its raw material, rather than the crude. Okay. Because of the policy push now, on the demand side, the earlier offtake was not there, and now you have a good visibility of offtake. Why we are canceling that Odisha project when you see the demand visibility is there? Sir, basically, the demand visibility is definitely there. We are basically now wanting to change our expansion plans more strategically to a more strategic location than Odisha. We will be finalizing our expansion plans going forward. As you know, this whole geopolitical tensions calm down and we get more better clarity from our customers as to the strategic location of the expansion should be. We are now currently going forward because any new greenfield project, the capacity actually comes alive 1.5, 2 years down the line and not immediately. That was the reason that we shifted it to brownfield expansion so that we could get our capacities live much more faster. Okay. Apart from brownfield, anything have you planned for the, as you said, faster capacity expansion? Brownfield has a limitation only. Yes, sir, we are already currently right now in the discussions of finalizing our future expansion plans. I think he's asking for the brownfield. Brownfield, we have already planned, and as we have told, we are going to increase the capacity by about 97,000-100,000 tons by the end of this year. Yeah. My question was on the greenfield beyond brownfield, because that has a limitation. You can't expand beyond certain capacity on brownfield. Yeah. Definitely for greenfield project, it takes a much longer time for establishing the unit and operationalize the plant. Okay. Thank you. Thank you so much. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments. Yeah. Thank you. As we conclude today's discussion, we want to thank each of you for your continued trust. Despite challenges in the macro environment, we have delivered resilient performance and positioned ourselves for sustainable growth. On behalf of the entire leadership, we extend our gratitude for your engagement and support. Together, we look forward to building an even stronger and sustainable future. Thank you. Thank you once again. Thank you. On behalf of Antique Stock Broking Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.