Please note that this conference is being recorded. I now hand the conference over to Mr. Nishit Solanki from CDR India. Thank you, and over to you, sir. Thank you. Good afternoon, everyone, and thank you for joining us on Aarti Industries Q4 FY 2024 earnings conference call. Today, we are joined by senior members of the management team, including Mr. Rajendra Gogri, Chairman and Managing Director, Mr. Rashesh Gogri, Vice Chairman and Managing Director, and Mr. Chetan Gandhi, Chief Financial Officer. We will commence the call with opening thoughts from Mr. Rajendra Gogri, post which we shall open the forum for Q&A, where the management will be addressing queries of the participants. Just to share our standard disclaimer, certain statements that may be made in today's conference call may be forward-looking in nature, and the disclaimer to this effect has been included in the results presentation that has been shared earlier and also uploaded on stock exchange websites. I would now like to invite Mr. Rajendra Gogri to share his perspectives. Thank you, and over to you, sir. Thank you. Good afternoon, everyone, and welcome to our Q4 and FY 2024 earnings call. I'll take you through our performance insights on industry dynamics and strategic initiatives. Firstly, let me summarize our annual numbers for FY 2024. Revenue came in at INR 7,012 crore, while EBITDA stood at INR 984 crore. Profit after tax was at INR 416 crore. Board has recommended a dividend rupees one per share, that is 20% for FY 2024. We delivered resilient performance during the year, despite severe global pressure emanating from sluggish demand trends globally, leading to slower export trajectory and inventory adjustment. These challenges were further compounded by geopolitical crisis impacting the global supply chain and logistics. Against this backdrop, we have demonstrated a stable performance anchored by our nuanced understanding of market dynamics, combined with cost leadership and differentiated product portfolio. While the overall global macroeconomic environment remains subdued, we witnessed demand recovery and discretionary application catering to dyes, pigments, specialty polymers and additives, among others. Macro concerns related to non-discretionary segments serving certain end user industries still persist. Let me now share the key performance highlights for the quarter under review. Our consolidated revenue increased by 3.5% to INR 1,955 crore in Q4 FY 2024 over previous quarter, Q3 FY 2024. EBITDA, including other income, grew by 5.6% on QOQ basis to INR 283 crore in Q4 FY 2024. EBITDA growth reflected an optimized cost structure driven by higher volume, resulting in improved operating efficiency and favorable product mix. As a result of this performance, we conclude the year with annual EBITDA above INR 984 crore, consistent with the guidance provided in our previous quarter. Profit after tax stood at INR 132 crore in Q4 FY 2024, higher by 6.5% over previous quarter of Q3 FY 2024. Tax performance was in line with operational trajectory and benefited from favorable tax position. Build-up in international cost, interest cost and depreciation aligns with the launch of new capacity scheduled during this year. Performance on QOQ basis was steered by volume growth, planned ramp-up of long-term contracts, and recovery and discretionary portfolio. Our domestic export mix stood at 52%-48%. I'll turn your attention to production highlights for Q4 FY 2024. The production of Nitrotoluene stood at 17,646 metric tons as compared to 18,842 metric tons recorded in the same quarter last year, and 19,580 metric tons in Q3 FY 2024. Meanwhile, Nitrotoluene saw a production of 6,675 metric ton, against 6,130 metric ton last year, and 6,951 metric ton in Q3 FY 2024. Additionally, hydrogenation output stood at 3,389 tons per month in the current period, compared to 3,315 tons per month in the corresponding period last year, and 3,644 tons per month in Q3 FY 2024. I would like to now share some updates on our growth initiatives. We entered a CapEx of over INR 1,280 crore in FY 2024 on project expansion and plan to spend another INR 1,600 crore-INR 1,800 crore in FY 2025. All our growth endeavors are advancing as scheduled, and we foresee the gradual commissioning of several projects within the coming year. This includes acid phase II capacity expansion, specialty chemical block, Ethylation and NT, capacities and asset upgradation, among others. Our chlorotoluene project is also advancing well, with the initial phase projected to commence by FY 2026. Upon completion, this project will cement our distinctive position in global chemical value chain and enhance our performance trajectory. With commissioning of several ongoing projects and anticipated volume ramp-ups in existing products, we continue to maintain our expected EBITDA guidance of INR 1,450 crore-INR 1,700 crore for FY 2025. This outlook is supported by sustained recovery in discretionary segments, emerging indication of revival in the non-discretionary portfolio, and the operating leverage benefits expected to accrue with the increase in volume in FY 2025. To conclude, Aarti Industries not only possess cost competencies and global reach, but also boasts an established R&D framework. As an integrated player and partner of choice, the company's strategic positioning enables it to proactively navigate the dynamic landscape within the industry. We aim to leverage this extensive expertise, maintain a steadfast focus on our values of care, integrity, and excellence, and fortify our position to enhance value for all our stakeholders. With that, I will now request the moderator to commence the Q&A session. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mr. Nishit Solanki. Please go ahead. Mr. Solanki, your line is unmuted. All right. We'll take our first question from the line of Mr. Vivek Rajamani from Morgan Stanley. Please go ahead. Hello, sir. Thank you so much for the presentation. So two questions from my side. Firstly, if you could just give a little bit more color in terms of, you know, why the volume numbers were lower on a QoQ basis. You know, which segments were, I mean, relatively weaker compared to the last quarter, or, and what kind of trends you've been seeing in the quarter so far? So the second question was with respect to your EBITDA guidance, which you've obviously maintained. But just wanted to get a sense in terms of, you know, the trends that you're seeing and in terms of the conversations that you're having with the customers, how confident are you of, you know, achieving something closer to the higher? Or do you think you would rather have to wait to see how the recovery shapes up, before some of these things start to get a bit more clearer? Thank you so much. Yeah. The agrochemical segment is under pressure, so volumes in that segment are getting impacted. Whereas on the discretionary side, dyes, pigments, and other segments, where we are seeing good traction as far as demand is concerned. For FY 2025 guidance, you know, there'll be a lot of factors which will determine, you know, where whether we'll be on the higher end or the lower end. It will be mainly, you know, how the volume grows up, this demand grows up, as well as our commissioning of our projects and the stabilization of those facilities. So as of now, I think we are not able to narrow down the guidance. As we move forward, I think we'll be able to do so in coming quarters, as per the next year's guidance is concerned. I'm sure, sir. Just one quick clarification. The fact that agrochemicals is under pressure is well reflected in the lower nitrotoluene volumes. If I could just clarify, the lower NCB volumes is also purely accumulated, or is there something else as well over here? Yeah. So nitric acid pressure was also there during this quarter. So that has also partially impacted volumes. And some of the N-NCB product also goes in agro and pharma. So that impact was also there. I'm sure, sir. I'll rejoin the queue. Thank you very much. Thank you. The next question is from the line of Rohit Nagraj from Centrum Broking. Please go ahead. Yeah, thanks for the opportunity, and, good to see the sequential recovery. So first question is again on the discretionary and non-discretionary segments. Now, which and all geographies are seeing, positive traction, and which and all geographies are still really under pressure? If you could just, tell us from the exports perspective. Thank you. Yeah. So we make this intermediate going into different geography. And then the finished molecules are then made in whether you know it's mainly in U.S. and Europe as far as agrochemicals are concerned. And then there is export across the globe from that you know? So it'll be difficult you know to what will be the impact on geographical factor as far as agrochemicals are concerned. But overall you know on an annualized basis we had about 11% North America, 6% Europe then 4% China, 3% Japan, and rest of the world, 28%. So that was a kind of a composition, geographical composition, which was you know given in our presentation also. Sure. Sure. Just second question is in terms of the CapEx. So this year we had a slightly lower CapEx of INR 1,300 crore. We had anticipated INR 2,500 crore-INR 3,000 crore of CapEx for two years. Now we have raised it to INR 1,600 crore-INR 1,800 crore for FY 2025. After that, the similar run rate will continue, and in FY 2025, which and all will be the major projects which have got added to this CapEx? Yeah, you know, this is our existing product line, which we say phase I, II, and III. All those projects we expect to get fully commissioned in FY 2025, whereas the acid phase to then isolation expansion at the site and a Nitrotoluene expansion at Jhagadia. And some other specialty chemical debottlenecking some expansion will get commissioned during the FY 2025. And other major spending will be in our new site at Jhagadia, where multipurpose plant and entire chlorotoluene and downstream product plants are being put up. Sure. And FY 2026, similar run rate would be, continue? FY 2026, no, we have not yet fully finalized the numbers. I think that will be maybe in next couple of quarters, we'll be able to give a more clearer guidance on the CapEx for FY 2026. Sure, sir. Thanks and all the best. Thank you. Thank you. Our next question is from the line of Abhijit Akella from Kotak Securities. Please go ahead. Yeah, good afternoon, and thank you. This quarter, we have seen a significant increase in gross margins on a quarter-on-quarter basis, sequentially, I'm saying. But at the same time, there's a, you know, significant increase in the other expenses also, December quarter versus March quarter. So could you please just help us understand what might be driving that? Is it basically the freight cost increases that are being passed on? Yeah, so you're right, Abhijit. The increase in the other expenses is majorly or primarily on account of the freight cost increase, which is passed on to the customer. But in addition to that, the product mix and bit of margin improvement across the existing businesses has also helped in terms of improving the growth margin. Okay. So, this is a good run rate to, for other expenses to trend off of for, the year ahead? So other expenses, I mean, if you look at the fixed overhead, the fixed overhead virtually would not increase substantially, barring some 5%-7% of inflation increase. It will be virtually constant or similar. The other expenses also include the component of variable costs, such as freight, and production charges, production costs, such as effluent treatment or labor also. So that would be linked with volume, but, excluding those variable components, which are linked with volume, the fixed overhead will virtually be similar. Fine. Understood. And, just on the volume front, one was just to understand, you know, the quarter-on-quarter revenue increase this quarter, has it come primarily from the long-term contract you've just signed? Because the production volumes are actually down across all categories. So that is one thing. And then if you could please just also share the PDA volumes for the quarter. Yeah. No, the volumes were our regular volumes as well as long-term contract volumes were also there. And as far as the PDA volumes, PDA was at 523 tons per month. Okay, sir. Thank you so much. I'll come back in the queue for more. Thank you. The next question is from the line of Rohan Gupta from Nomura. Please go ahead. Yeah. Hi, sir, good afternoon. Thanks for the opportunity. Just a couple of questions. First is on the Q1 QoQ sequential growth, though it is encouraging to see the Q1 QoQ growth, but what we had indicated earlier that there is a recovery across the segment and user industry, maybe only except agrochemicals. However, it is still looks muted in terms of volume growth also on Q1 QoQ, and even on the revenues also are quite like Q3 numbers. So just wanted to understand that the sequential recovery, which you are talking about, and the indicated EBITDA target, which we have earlier indicated, I mean, are we on track for that? Because it doesn't seem like the Q4 recovery for our company is so strong to achieve those numbers for FY 2025. Now, as mentioned, you know, agrochemical has remained softer, so that has given the impact of on the volume, as well as some nitric acid issue also had impacted the volumes in Q4. But now that is getting stabilized. And as you know, more volume grow in discretionary segments and also stabilization of on agrochemical side, we'll see that continuous quarter-on-quarter volume increase in FY 2025. But so you mentioned that agrochemical still remains challenging, and that's what you also mentioned in a recent interview, when we see that in the first half, agrochemical still remains challenging. So despite that, you are confident about the volume growth overall for the company, and also if you can reiterate your guidance, what we are looking for FY 2025? Yeah. Agrochemical first half will be challenging, but I think in the second half, I think we should see a good recovery in agrochemical. And also, some of our expansion also will kick in in Q2 and Q3 of this year. So that will also help us in increasing the volumes. Sir, in terms of CapEx number, you mentioned FY 2025, you're looking some INR 1,700 crore-INR 1,800 crore CapEx. Am I right on that? ... Yeah, it was INR 1,500 crore-INR 1,800 crore. Okay. So, if you can just can give further breakup in terms of the overall CapEx, INR 1,500 crore-INR 1,800 crore, and also can give some guidance for FY 2026 CapEx number will be, will it be similar to what FY 2025 and overall INR 3,000 crore-INR 3,500 crore, which you are planning to invest within next two years, the kind-- likely investment of in which segment we will be looking at it, if you can share those numbers. Yeah, you know, this year a substantial portion will be going in our new site expansion. So, you know, and other zone one, two, three expansion will be more on completion of that. So I think more than 50% will be going in our new site. And, as far as FY 2026 is concerned, the numbers have not been fine-tuned, but it will be upward of INR 1,000 crore for sure, but then exact number, you know, we'll have to still fine-tune. Sir, new site, that far, if I remember, that is mainly for the Chlorotoluene, right? So or you have, also identified some other products to be manufactured on the new site also from the existing point of view. There will be a Multipurpose Plant also will be set up there. So there will be, you know, some of the Multipurpose Plant may be linked to some of the existing value chain or Chlorotoluene or some standalone product also. So we'll first time have Multipurpose Plant also on the ground at that location. Okay. So it's not like that the entire 50% expansion on new site will be only for the Chlorotoluene. Some part of that will be existing product basket as well, including MPP? Yes, sir. But this MPP will have, you know, product coming from various, can have products coming from existing line or the Chlorotoluene or the new standalone. Is it possible for you to give a breakup in terms of end-user industry for FY 2024, which had just come, completed? I mean, segmental, like, how much for agrochemical and pharma and/or maybe polymers, if you can give broad breakup. This, agro and pharma were around 35%. And, the, this, discretionary around 65%, I think. 35%, 65% kind of a number, was there between discretionary and non-discretionary. This Discretionary, where we still continue to see the strong growth, or otherwise, Agro only can see the recovery in second half? Yes. Yes. Thanks, sir. I'll come back to you for any follow-up question. Thank you. Thank you. The next question is from the line of Ankur Periwal from Axis Capital. Please go ahead. Yeah, hi, sir. Thanks for the opportunity. First question on working capital side. If you can highlight while, you know, on receivables we have seen a absolute reduction, but inventory and overall, you know, working capital in terms of number of days remains slightly higher. So your thoughts there in terms of outlook. So on the working capital on inventory, there were a couple of products which was to be shipped out in March, and it just got shipped out in April, so some matter related to that. Otherwise, it should be higher. Secondly, when you're looking at the day comparison, I would request you to look at the numbers with always the quarterly revenues and not the annual revenues, because the average pricing for the second half was a bit more than what was there in the first half on the input and couple of other input cost components. Sure. Sure, sir. Secondly, on the CapEx side, while we did mention INR 1,500 crore-INR 1,800 crore, and if I hear you right in the opening remarks, you did mention some bit of this CapEx will be for revamp of the existing project. So just any broad thoughts in terms of what could be the potential revenue that we are looking at here, and, you know, how much of this CapEx will be going into replenishment? No, CapEx basically is our the second ethylation block and Nitrotoluene, which is an ongoing CapEx, and Acid phase II and some specialty chemical blocks. So they are, you know, ongoing expansion for our current product range. So, you know, that is where the major volume increase will happen in this year and also in further volume increase will happen in FY 2026 also from this existing product line at our current locations. Sure. Sir, let me rephrase my question. Whatever CapEx we are doing, INR 1,500 crore-INR 1,800 crore FY 2025, all of this will be productive CapEx, either in terms of revenue or in terms of backward integration benefit? Yeah, virtually, I think, you know. Except some normal, maintenance CapEx, but this is not a significant. Sure. Sir, lastly, on the nitric acid part, you did allude it to, you know, shortfall of the supply there and hence slightly slower volume growth. If I remember it right, we had signed up a longer term contract there, right, for nitric acid supplies. So if you can just, you know, share your comments, why the disruption in supply, and how do you see that playing out? Yeah. Actually, our supplier is putting up a larger facility, and that will come up in FY 2026. So currently we are getting the material from their existing sites, and we have a contract, so accordingly, you know, we could get a good volume. But still, you know, overall there was some disruption. We get a partial impact. Okay. So FY 2025 will further see disruption or possible disruption because of this supply issue, or, how do you put, how do you see that? Yeah, the suppliers' major expansion is going to come in FY 2026. So, you know, FY 2025, but some other nitric acid capacities may come up in India. That's what, you know, also is expected. So that kind of can mitigate some sort of any disruption happening. Sure. So 2026 onwards, it should be fairly, you know, straightforward in terms of supply. Yes. Okay, great, sir. That's it from my side. Thank you, and all the best. Thank you. The next question is from the line of Archit Joshi from B&K Securities. Please go ahead. Hi, sir. Thanks for taking my question. I have a couple. So first one, just the way we have kind of given a guidance for FY 2025, the lower end and the higher end of the EBITDA guidance band, would you be able to venture a number with respect to the peak EBITDA that we can achieve from the existing assets that we have, excluding, you know, the upcoming CapExs in Chlorotoluene and the multipurpose plant? Could there be a range that you can guide? Yeah, I think, another additional, you know, 10%-15% should be possible. So more towards, you know, INR 2,000 crore kind of a number should be possible, from existing, with ongoing existing, location expansion. Sure, sir. Thanks for that. So my second one was with respect to the NT and the ethylation plant. I think both of them are going to be key contributors to both the contracts that we have recently gotten into. Would you be able to share the highlights of what we did with those two contracts in FY 2024? If you can substantiate that. Also, with the commissioning of these two facilities in FY 2025, for which the CapEx is ongoing, would the entire volume can be assumed to be diverted towards these two new projects that we have signed? So was just trying to understand how the volumes will shape up with the new facility commissioning one. Thank you. Yeah, with this second contract, which was announced out of the two, which was INR 1,500 crore for the next four years, so that is not connected to ethylation and those product line. But the first one, which was an agrochemical intermediate, that is coming from that Nitrotoluene and ethylation line. So there, you know, we expect increase in sales from that in this year, partly, and the next year onwards, it will get give a full year impact. But the first one, INR 1,500 crore, I think is an ongoing, so you know, that already the ramp up has taken place. Sure, sir. Just the one wherein I was trying to understand how much from these two contracts, I mean, the first contract size was close to INR 1,500 crore, your second contract, and the first one was close to INR 330 crore. How much would have we done in FY 2024? FY 2024, I think it was below 100, as the micro chemical impact had taken place. But this year we expect, you know, more around 250 or so. For the second one, the INR 1,500 crore one? That is running at, on a regular basis, actually. Understood, sir. Thank you. Thanks a lot, and all the best. Thank you. The next question is from the line of Rishi Kothari from Pi Square Investments. Please go ahead. Yes, good afternoon, everyone. Thank you so much for the opportunity. So, my question was more related to as, more or less it is already been addressed as- Rishi Kothari, your voice is sounding muffled. May we request you use the handset mode, please? Yes. Am I audible now? Yes. Hello. Please go ahead. Yes. So yeah. Thank you, thank you so much for the opportunity. My, anyways, question was more or less addressed on that segment front, but I just wanted to get an idea as to what exactly other industries that you are looking to diversify in, for example, in terms of chemical. Are there any some attractions in terms of other industries that you're looking at to diversify our product? Other than the chemical industry? No, in chemical industry itself, in terms of segment. Let's say you are into agrochemicals and, dye in the segment and all that. So in terms of segment diversification. So basically, we are very well diversified on agro pharmas and dyes, pigments, energy sector and all. In addition to that, you know, we are looking at the sunrise sectors, you know, which are more also going in yeah, this battery storages and all that, you know, or circularity of chemicals or biochemistry and all that. So that is the another sector which we are looking at it. But, as of now, you know, we have not started investing in any of them yet, but they are on our radar and also at various developmental stages. So we'll be going into those product line also in the coming years. Okay. Yeah, got it, sir. Thank you, thank you sir. Thank you, thank you so much for your question. Thank you. The next question is from the line of Surya Patra, from PhillipCapital (India) Private Limited. Please go ahead. Yeah, thanks for the opportunity, sir. Sir, my first question is on the this MEA and the nitro toluene capacity, which is likely to be commissioning this year. So could you share what is the exact timeline that you are anticipating, and any progress on that in terms of the the contract with any customer for those product that you have already signed or anything on that front? If you can give some clarity about it. So that will be our looking at Q2 of FY 2025, the commissioning for, you know, both Nitro Toluene and the downstream. Okay. Some of the volumes are tied up for those products. So, so that means the utilization and the demand visibility about those facilities are, that is there, and, if it is, it is coming from which segment, if you can share, sir? It's mainly, you know, agrochemical segment. This utilization blocks are mainly going into agro. Okay. Okay. So these are also of the kind of a downstream product, where the margin visibility would be more than 25%? Yeah, I know. If you take it from base molecule, yeah, it will be of those kind. Okay. Okay. My second question was about the margin trend for the value-added product, what you have been indicating, sir. So like, 25%-30% kind of margin for the downstream product that you have been talking. So, given the, say, from the initial time period when you have started talking about it, from that particular point, we have seen significant changes in the cycle. The prices, let's say, have moved down significantly and now started recovering and all that. So the up cycle, down cycle, both we have played out from that initial point, but still you are maintaining your margin expectation in the similar way. So what is... Where from that confidence coming? Is it because of the spread generally what you enjoy on those products, so that is why you are confident about maintaining the margins of beyond 25 for the downstream product, or it is something else that you are getting confidence from? No, then we have a basket of products, you know. So some of the products, you know, there may be, pressures. So on an average, you know, these value-added products, will give, you know, 25%-30% range, Mm. as a EBITDA margin. Yeah. Okay. So just an extended one to this only. This R&D initiatives, what you have taken, let's say, with a deeper focus on the product development and research and development. So, you have set up your Navi Mumbai plant, Navi Mumbai R&D center in FY 2021. And, I think now already two to three year is already passed. So what is the kind of progress on that front, and what achievement that you have seen from those initiatives? And what is the now R&D spend per annum? If you can give some clarity and some future visibility out of those initiatives, that would be really helpful. Yes, the entire Chlorotoluene range, you know, that is all in-house, because we'll be adding a lot of new chemistry in that, you know. Photochemistry, Nitrilation, Hydrolysis, and some Grignard Chemistry, and. So a lot of different chemistries, the products will be coming up in this entire Chlorotoluene range and also in Multipurpose Plants. So all those products, R&D has been done in-house from this new R&D center. In addition to that, also, I mentioned on this sunrise sector. Mm. There also, we are in touch with global major companies as well as startups for developing newer product back-end manufacturing and development- Mm. - for them also. So those R&D also is happening. Okay. So, this is the point that I wanted to understand. So basically, like, the collaborative research aspects with the customer, potential customer for the new product opportunities. So generally, when we are talking about multipurpose plants, MPPs, custom manufacturing opportunities and value-added products in the specialty chemical, all that, so generally, these projects are backed by ready contracts with the innovator or something like that. So here, as you are saying that you have already started working on those fronts, so any progress in terms of alliances that you have already seen, but possibly when the commercial opportunity will be fructifying, then you'll be announcing? So anything on these fronts, sir? Yeah, you know, various products are at different levels, you know. Some at R&D, some where we supply pilot quantities and all that, you know. So different projects are at a different stages. And we see good opportunities on those as going forward, you know. So those product line, it will be not China plus one, it is, India first, because this newer product line, the customers might prefer India as a source as a priority. Okay, so- We see a good opportunity, you know, on tying up with those kind of businesses. Sure, sir. Just last one question from my side, sir. In fact, since the, if we see the FY 2024 performance, in the domestic market, obviously, we have seen an 11% decline, while, supported by the contra- supply contract, exports are positive. But in terms of the volume, so I think if the prices, we know that, see, large part of our the domestic sales would be, may not be, towards the downstream product, it could be the, the initial value chain-based product. Still, we have seen revenue declining by 11% only, while prices have corrected significantly. So that means whether we have seen a volume growth in the domestic market for FY 2024? No, actually, the price also depends on the raw material. If you see the second half, the raw material prices of benzene and all were higher. Mm, yes. So, that also kind of gives an impact on the when we talk about the sales number. So some of that increase is because of the raw material price increase also. Okay. But, whether any concern that is there about the domestic market in terms of volume progression or decline, sir? No, ultimately, no. Even the sector-wise, you know, it is basically a global impact, because as we may have mentioned earlier also, a lot of our products, which are going in domestic, ultimately end up being, exported. So it is a global market, you know, on a back end, which is giving the impact. So domestic consumption for it, it will be only around 25%. Rest will be direct or indirect export. Oh, okay. Okay, so domestic may not have that relevancy there. Sure, sir. Yeah. Yeah, thank you. Thanks a lot. Wish you all the best. Thank you. The next question is from the line of Sabyasachi Mukerji from Bajaj Finserv Asset Management. Please go ahead. Yeah, hi. Thanks for the opportunity, sir. My first question is, you know, this morning, on TV interview, you mentioned about, 20%-30% volume growth for FY 2025, versus, I believe in the last call, Q3 earnings call, you mentioned somewhere around 20% volume growth. So, question A is: What gives you confidence on, you know, let's say, upping the range from 20%- 20%, 20%- 30%? And, second question is, from which quarter do we see this growth coming? Because Q4, we saw, you know, weak, tepid volumes. So Q, Q1 is again, I think, will be on the similar lines, or do we see volume uptick from Q1 onwards only? Yeah. Actually, our earlier guidance was 20%-25% in the last phone call, so that we have increased to 20%-30% as a range. And the volume growth will happen from this Q1 FY 2025 itself; we expect the volume to grow. And quarter-on-quarter, you know, we expect volume to grow this year. Okay. And Q2 onwards, when the new projects gets commissioned, the volume growth will be far superior than what we are witnessing now. Is that a- Yeah. - right assumption? Yes, yes, yes. From Q2 onwards, this new project also. So second half volume growth will be substantially more. Okay. Okay, that's good to hear. Chetan bhai, I have a question for you. You mentioned, and there was a mention in the presentation as well, that the increased freight cost during quarter four due to HD disruption, you know, had caused some effect. So if I look at Q3 to Q4, the other expenses have gone up by 19%, almost, INR 268 crore-INR 319 crore. And whereas we had a 7% decline on sequential volume decline. Could you quantify what was the impact the freight cost this quarter? So the freight cost increase gets substantially passed on to the customer. The volume decline is only for those few select products. For certain products, for example, like, nitrotoluene also, we've also... Or PDA, we do have volume increase. So we've got a very large product basket, and there has been volume increase across some of the other products, as well. No, but still, I mean, what kind of freight cost was... I mean, increased freight cost that we ended up paying, I mean, INR 50 crore is a, is a large number, right? I mean, from Q3 to Q4, if I just look at the absolute delta in other expenses. Yeah. So the freight cost increase is something which we have to bear, and we pass it on to the customer. Okay. Okay. So- Sorry, you were saying something? Yeah, yeah. So on a value basis, the component is relatively smaller if I look at comparing it to a turnover, and it gets passed on to the customer, as a part of the... Like, similar to other input costs, this also gets passed on to the customer. Okay. And you also mentioned there is some, you know, if I, if I look at the other expense bucket, the fixed overheads, generally, quarter-on-quarter basis, would remain largely similar. And, on a year-on-year basis, it will follow some inflationary growth. Out of this total, let's say INR 260 crore-INR 300 crore of quarterly other expense, what would be the fixed overheads? What, what, what portion would be fixed and what portion is variable, broadly? So the variable component would be somewhere in the range of around 40%-45% kind of stuff. I would still have to look up some numbers, but yeah, it could be around that. 40%-50% could be variable. So it's not just the freight, there will be a lot of other component which is linked to production, which could be there, like treatment and other things. Okay. Thank you. That's all from my side. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please restrict your questions to two per participant. If you have a follow-up question, you can rejoin the queue. The next question is from the line of Nitin Agarwal from DAM Capital. Please go ahead. Sir, thank you. My question, the two questions. One is, A, on the newer projects which are there, that you're talking about launching FY 2026 onwards. So these are largely oriented for import substitution or these are gonna be primarily export products? Yeah, little of both, import substitution as well as export. So more towards, you know, 50/50 kind of a thing. Okay. Sir, with respect to whatever has been happening in China in terms of increased capacities, especially on the agricultural side of intermediates and AIs, I mean, does any of these calculations change for you, or any of the business case has changed for any of these products, especially from export perspective? Not significantly, no. Okay. And so lastly, although you touched upon it, for the INR 1,450 crore-INR 1,700 crore EBITDA guidance that you gave for next year, this should be what? A back-ended guidance in the sense we'll see much, much stronger H2 and H1. And what would the split be, like, 40-60, 30-70? How should we look at that? Yeah, I think it will be more 40-45 and 55-60. Okay. Thank you. Thank you. The next question is from the line of Aditya Khetan from SMIFS Institutional Equities. Please go ahead. Yeah, thank you, sir, for the opportunity. So first question is on to the agrochemical demand outlook. As you had mentioned that for this quarter also, the, so the demand has been lower only. And, sir, we are standing into, like, May and June, of this calendar year. So you are expecting, like, demand will remain muted for this calendar year complete, or like, improvement is expected, from, also from next quarter? Yeah, basically, it will be generally this is already product specific, you know. So, some of the demand we will pick up in this quarter, next quarter and all. And some of them which are annual kind of a thing, where the demand pickup will be more happening in calendar year 2025. So it'll become more product specific, but by, you know, end of the year, things should get normal. So calendar year 2025 should be near normal for all the products. Okay. Sir, onto the nitric acid, so supply disruption issue. Sir, is it possible to quantify how much volumes has been impacted because of this, of this nitric acid issue? Absolutely, it will be difficult, but like, you know, this Nitrotoluene and all, we have seen some decline and all, you know. So that is where, you know, some impact was seen. Okay. Sir, so my last question is onto the Dicamba intermediates. Sir, is it possible to give out the revenue figure for FY 2024? And what is the utilization level also this can operated on? The same, you know, that demand for that agro is struggling. So, the hydrogenation part is where we can utilize, but the last part, which is more of a dedicated plant, there not been a very significant volume for this quarter. Okay. Thank you, sir. Thank you. The next question is from the line of Siddharth Gadekar from Equirius. Please go ahead. Hi, sir. So first on the MMP contract, which we had announced in January, the INR 6,000 crore contract, can you just quantify how much revenue have been booked in FY 2024, and how much incremental revenues is he expecting in FY 2025? It has started from the calendar quarter, so the entire FY 2024 will be difficult to get the number in that time. But first quarter, the impact has started coming in. Incrementally, how much revenue should we expect from this contract on a YoY basis? YoY basis, 50%-60% at least. Okay. From the second contract, what was the contribution in FY 2024? Below INR 100 crore. Okay, cool. Because the subsequent impact of the demand came up. In FY 2025, do we expect it to go to INR 300 crore or it will be below INR 300 crore? I think it will be more towards around INR 250 crore for FY 2025. ... Okay. So got it. Thank you. And just lastly, for Chetan Bhai, so what should be the tax rate that we should work with for FY 2025 and FY 2026? Tax rate for FY 2025, FY 2026, I believe it should be around 15%, maybe around 12%-15% or 20%-16% kind of stuff. Okay, good. Thank you. Thank you. The next question is from the line of Rohit Sinha from Sunidhi Securities. Please go ahead. Yeah, thank you for taking my question, sir. As we are seeing, price realization are down significantly, so once we see any significant improvement there, so how we will be seeing the price negotiation with our customers? Basically, how are the contracts aligned, including our long-term as well as the short-term contracts? Certainly, all the long-term contract, you know, we have structured pricing in place. Whereas, contract, you know, which are more of a quarterly basis, orders which are more on quarterly basis, there, you know, the prices may have some inherent movement, also, up and down side. But on long-term contract are more generally on, around a year plus basis. Okay. And on all these short-term contracts, basically, when they are due for negotiations, I mean, on- They're quarterly basis, you know. Generally, short term will be quarterly basis, and long term will be multi-year. Some contract may happen on an annual basis also, but they are very limited relatively. Okay. Okay. And secondly, just a clarification on this, Deepak Fertilisers contract. So I think, that was close to INR 8,000 crore contract, for the span of 20 years when it was announced. So which I guess we were assuming that it, it would be equally distributed to this 20 years, so maybe we can say INR 400 crore kind of annual revenue. Since you are mentioning that, there is some disruption and only after FY 2026 we will see, smooth volume there. So does that mean that there could be more than, let's say, INR 400+ crore kind of annual revenue only by FY post FY 2026, or it would be a max kind of revenue annually where INR 400 crore or INR 450 crore, or it can fluctuate as per our demand also? Yeah, obviously, it will be fluctuating with demand. The supply side, you know, the major expansion is expected- Sorry to interrupt. The line for the management has been dropped. Please stay connected while we reconnect the management back. Ladies and gentlemen, we have the management line reconnected. So please go ahead. Yeah, and the nitric acid also, once their capacity comes up, you know, then it will also help us in whenever, you know, our ramp up takes place. So it will be kind of a ramp up also in the turnover for that side also. That's it from my side, sir. Thank you. Thank you. The next question is from the line of Simran Bhatia from Global Securities. Please go ahead. Yeah, thank you for giving me the opportunity. Sir, I just want to understand what will be your debt profile, means what will be the, you know, debt reduction going forward in the upcoming year? And second, how you see the EBITDA margin trend, not for FY 2025, but for, you know, next couple of years, like, you know, 2026, 2027, for, for next, till 2026, 2027. Will you see the, you know, margins coming back to 20%+ in the upcoming years? So on the debt, as you're aware, there has been significant CapEx project which are underway. So debt reduction from the overall basis, I don't think so, would be there. Yeah, we are trying to optimize the working capital. I guess that is also visible over the last couple of years' performances, where the working capital days have been reducing. Plus, debt as a number is also a function as to how the working capital and the cost related to working capital, such as the input and other cost, prevail. So on an absolute basis, I'm not expecting debt numbers to reduce. There's the effort in terms of optimizing the working capital days, which could potentially provide some optimization of debt, but the debt will still continue to be... It will be a bit higher than what it is currently right now. Okay. So when we are seeing the, you know, margins coming back to 20% or 22%+, in, you know, FY 2025, it's not possible it seems, but any guidance for the coming two or three years down the line? As we had mentioned earlier that, you know, chlorotoluene range, you know, these are more value-added products, so structurally there the EBITDA margin is higher. So with those products coming in line on a weighted average basis, combined EBITDA also, as a percentage, will increase from FY 2026, FY 2027 onwards. ... Okay, done. Thank you, sir. Thank you, and all the best! Thank you. The next question is from the line of Abhijit Akella from Kotak Securities. Please go ahead. Yeah, thank you so much for the follow-up, sir. Just on the clarification on the MMA long-term contract. So if I recall correctly, last quarter you had indicated we expected about INR 900 crore for FY 2024 from that contract, ramping up to INR 1,300 crore in FY 2025. So just to check whether that is still the number we should work with, or has there been any deviation from that? I think that's what kind of a number matched also. We said 50%-60% increase. Yeah. I think that's what it mentions, yeah. Okay. This is only under the contract, or we have done some sales of the product outside of the contract also, which is not included within this INR 900 crore? Yeah, we sell to the, other customers also, in that sense, so there'll be volume increases for other customers also. Okay. Okay. Got it, sir. Thank you so much. Have a good day. Thank you. The next question is from the line of Rohit Nagraj from Centrum Broking. Please go ahead. Yeah, thanks for the follow-up. Just one question. What would be the cost of debt currently and next year? Is it expected to be in the similar lines? The cost of debt should be around 8% or so, 7.5%-8%. It depends on the combination of different products. From next year perspective, I believe the interest rates have largely peaked out, while I'm not expecting interest rate to sharpen down or reduce significantly sharply in this year. I believe the cost of debt should fairly remain similar. Sure. Thank you, and best of luck. Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for closing comments. Thank you, everyone, for taking out the time to join us on our Q4 FY 2024 earnings conference call. Hope we have addressed all your queries. If you have any further questions, please feel free to contact our investor relations team and we will address them. We look forward to connecting with all of you again in the next quarter. Thank you once again. Thank you. On behalf of Aarti Industries Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.