Ladies and gentlemen, good day and welcome to the Aarti Industries Q3 FY 2025 earnings conference call. [Operator's Instructions] I now hand the conference over to Mr. Nishid Solanki of CDR India. Thank you, and over to you, sir. Thank you. Good morning, everyone, and thank you for joining us on Aarti Industries Q3 FY25 earnings conference call. Today, we are joined by senior members of the management team, including Mr. Suyog Kotecha, Executive Director and Chief Executive Officer. Mr. Chetan Gandhi, Chief Financial Officer. We will begin the call with an overview on the developments for the quarter, followed by highlights on the financial performance, which would be provided by Mr. Kotecha. Post that, we shall open the forum for Q&A, where the management will be discussing queries of the participants. Just to share a standard disclaimer, certain statements that may be made in today's conference call may be forward-looking in nature, and a disclaimer to this effect has been included in the results presentation, which has been shared earlier and also uploaded on the stock exchange websites. I would now like to invite Mr. Kotecha to share his perspectives. Thank you, and over to you, Mr. Kotecha. Thank you, Nishid. Good morning, everyone, and welcome to our earnings call for Q3. Before I commence, I would like to wish all of you a very successful and happy New Year 2025. I hope you have had an opportunity to review the quarterly presentation that was uploaded on the exchanges over the weekend. Overall, we reported resilient performance with sequential improvement in EBITDA in Q3 FY25. While pricing pressures impacted margins despite strong volume growth, we proactively addressed this through cost efficiencies, product diversification, and geographic expansions. Volumes in the non-energy business grew by 14% YoY and 8% QoQ, while the growth in the energy business came in at a 10% quarter-on-quarter basis. Growth in energy business actually could have been better, but for a large volume bulk shipment, which got spilled over from late December to early January. In the non-energy business, we are seeing a volume-led recovery both on YoY as well as on QoQ basis. However, pricing pressure continues across various product chains, especially in agrochemical intermediates. End-use applications like dyes, pigments, and polymer additives continue to exhibit positive demand trends. We also believe inventory levels for agrochemicals have normalized in most end markets now, and further, in order to diversify our product base and to augment our utilization levels, we are engaged in the development of new products, especially within the ethylation value chain, where we recently expanded our capacity. Additionally, we are also pursuing backward integration into select downstream products to enhance our margin profiles and ensure better control over cost and supply. Polymer and additives continue to be on the recovery path. Despite some uncertainty surrounding 2025 demand due to potential U.S. policy changes, we remain focused on increasing our market share in the global market, especially in the U.S. and Japan for the polymer and additive segment. The pharma business has sustained the positive trajectory following the recovery in FY24. Coming to the energy business, where MMA remains a key part of our product portfolio, we are diversifying our solution offerings and customer base to adapt to the evolving market. The big gasoline to naphtha cracks in Q3 impacted octane-boosting economics. However, we anticipate improvement in Q4. We have also established our bulk shipment capabilities to serve larger clients more efficiently and are expanding our customer base in the U.S., Europe, as well as the Middle East. The broader geographic reach is now helping us mitigate regional slowdowns and is supporting sustainable growth. As indicated in previous communication, the ramp-up of MMA volumes will be gradual but consistent. Our numbers showed healthy improvement in Q3, giving us optimism for the future. We are also focusing on a solution-based approach, leveraging our expertise to optimize performance and positioning MMA as a high-octane fuel additive. These efforts, fueled by our commitment to growth and innovation, will position us well for long-term success in this evolving market. Recently, we also had two other major developments which I would like to highlight. We signed two renewable energy power purchase agreements for solar and hybrid power with CleanMax and Prozeal. With this, AIL's renewable share in total power purchase is expected to exceed 75% by Q1 FY 2027 and will also accrue significant savings in power cost. One of the contracts will start delivering within this calendar year, whereas the second one is expected to start in the Q1 FY 2027 timeframe. The second major development, Re Sustainability and Recycling Private Limited. Aarti Circularity Ltd., the wholly-owned subsidiary of AIL, have joined hands to establish a transformative first-of-its-kind India joint venture company for driving the development of plastic material recycling facilities, which will use advanced chemical recycling technologies. This partnership is committed to achieving a resource recovery capacity of 500 tons per day by 2030 and will focus on chemically recycling the difficult-to-recycle plastic waste materials into niche and high-value chemical compounds which have good demand potential. Coming to financial performance, revenues for the quarter were at INR 2,035 crores, 14% higher on QoQ basis while 8% higher on YoY basis. EBITDA grew by 17% QoQ to INR 236 crores. Growth was primarily led by volumes, operating leverage, and product mix improvements. PAT was reported at INR 46 crores. This was impacted by high finance costs due to Forex mark-to-market loss of INR 23 crores on a long-term ECB loan, arising due to rupee depreciation. It may be noted that this impact is due to the accounting practices, while the actual outflow would happen over a period of nine years. Also, given the fact that the company is a net exporter, the depreciation in rupees should actually benefit the company in the coming quarters. Coming to CapEx and capacity expansion projects, broadly, our capacity expansion items are aligned with the growing market demand. Our projected capital expenditure for FY25 remains unchanged, as we had mentioned in the last quarter, INR 1,359 crores, with over INR 380 crores spent in Q3 and about INR 1,020 crores in the n the nine-month year-to-date time frame. Let me run through the updates in respect of key capacity expansion projects and sort of initiatives. Our nitrotoluene plant expansion from 30 to 45 KTPA got commissioned this quarter. It is expected to yield benefits now in the subsequent quarters. Our expansion of ethylation facility from 8 to 10 KTPA to about 25 to 30 KTPA also got commissioned this quarter. This expansion enhances our ability and flexibility to utilize the overall ethylation capacity for a diverse range of ethylation and propylation-based products, while also enabling the scaling up of production volumes within the nitrotoluene value chain. Ramp-up of both of these capacities will continue through Q4 and going forward. The MMA capacity expansion to 200 KTPA had already been completed, positioning us to be the market leader and also increase our share in this high-growth segment. MMA capacity can also be expanded further if required with minor investments, and we will remain agile to market shifts and address that opportunity. Additionally, various projects in Zone 4, our new greenfield site, are being executed in phased manner, and the commissioning is expected gradually through FY26. We are pleased to announce that our new pilot plant at Zone 4 has already begun its commercial operations. It will play a crucial role in fueling new product development and allowing us to innovate and diversify our offerings going forward. Overall, we have room to scale up several production chains without incurring significant CapEx. Higher asset utilization offers a significant upside potential, and we remain focused on achieving scale in each of our value chains to realize gains from operating leverages. As shared in the last meeting, let me reiterate that we are on track and confident to meet our guidance shared for both short-term as well as medium-term. Our focus is on sustainable mid-to-long-term growth, targeting roughly 20%-25% CAGR EBITDA over three to five years' timeframe a nd we continue to leverage R&D to explore new products, seek long-term partnerships, implement our cost improvement initiatives, and target high-growth sectors such as circularity, battery, and electronic chemicals. That will conclude my initial remarks. I will now request the moderator to open the forum for a question-and-answer session. Thank you. Thank you very much. We will now begin the question-and-answer session. [Operators' Instructions]. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from Rohit Nagraj from B&K Securities. Please go ahead. Thanks for the opportunity, and congrats on good volume recovery as well as absolute EBITDA expansion on a sequential basis. Our first question is on MMA. Just to understand, what would be the threshold spreads of gasoline-naphtha or gasoline crude at which MMA becomes more competitive and, at the same time, MTBE becomes more acceptable as a fuel? Thank you. So on MMA front, we had mentioned in the last conference call that anything to where naphtha-gasoline differential remains in two digits, we still have a play. I n the last quarter, actually, the gasoline-naphtha spread still continued to remain under pressure. They were at roughly 9.5 levels, and we were able to still deliver certain volumes to the market. So I guess that is an indication of our competitiveness of this product in the market when it comes to octane boosting. As we are seeing now, we are already seeing improvement in gasoline-naphtha spread, and that should enable the competitiveness of this product against some of the other octane-boosting products even more in the Q4 and the going-forward timeframe. Just a clarification on this. What would be the price differential between MMA and MTBE now? It's ever-evolving. In both products, the price variation is there almost on sort of month-on-month, quarter-on-quarter basis, but roughly you can assume that MMA at any point in time would be roughly 1.8x to 2x of MTBE pricing. My second question is, so we have commissioned the ethylation capacity. How are we going to source the ethylene oxide, and what is the kind of commitment that we have from Reliance in terms of incremental requirements? Your question was on ethylation capacity and? Ethylation capacity. E ffectively, we'll need ethylene oxide, if I'm not wrong, for the capacity to operate. So in terms of sourcing of the same incrementally, how are we placed to get it from Reliance in terms of commitments for the incremental volumes that we'll require? No, I would like to correct you there. We don't need ethylene oxide for our ethylation capacities. We need ethylene, for which we have a pipeline supply, and we have security in terms of supply where we have a long-term contract with our suppliers. That's it from my side. Thanks a lot for answering the questions on all of this. Thank you. Thank you. The next question is from Vivek Rajamani from Morgan Stanley. Please go ahead. Thank you, sir f or the presentation and for the opportunity. Two questions from my end. Firstly, in terms of the pricing pressures that you mentioned, could you give some more color in terms of how it's moved if you compare two quarters back and what you saw in Q3 and potentially what you're seeing quarter to date? That's the first question. O verall, on the pricing pressure, frankly, things haven't evolved significantly. t he overcapacity situation that we have in many of our product chains, especially in China, is a mid-to-long-term problem, and that will take some time to resolve. So no major incremental changes when it comes to quarter-on-quarter movement, especially in some chains like PDA, right, or even for that matter, some of the chains which are linked to NCB and nitrotoluene, where Chinese capacity remains pretty robust. There we continue to face pricing pressure. As you go more downstream on agchem intermediates, again, where the overcapacity situation is quite significant. There also, the pricing pressure remains quite robust. But as I had mentioned in the previous call, w e've got used to the new reality. Based on our competitiveness, we are able to retain or increase market share in many of our value chains, and that's how we are addressing this pricing pressure. As the demand picks up and the capacity utilization at a global level starts getting better, this will go off, and that should enable higher profitability percentage across the portfolio. Thank you, sir. That was very clear. The second question was on MMA. Y ou mentioned that you're focusing on customers in the US, EU, ME, and these various regions. Could you just give some more color in terms of the progress being made in getting some of these larger refineries on board? And just as an extension to that, you mentioned also that you have a bulk shipping capability that you've put in place. So just wanted to better understand, once you have some of these longer-term customers in place and you have these new capabilities, how would that affect your margin profile vis-à-vis the spot margins? And how quickly do you think you'll be able to kind of get some of these benefits going into fiscal 2026? Thank you. T he first part of that question, we have had some successes during last quarter. Our exports to the U.S. have gone up, where we have been able to develop a couple of strategic customers for this product. Y ou guys would be able to see that through our export data anyway. That's one region where we've got success. T he Middle East continues to remain one of the markets, which was the first market which we had scaled up. Our efforts continue to develop European and Southeast Asian markets for this particular product. That's on the overall geography as well as the customer diversification. F rom a pricing point of view, we have better understanding now in terms of what kind of pricing models and what kind of pricing strategies work, which are linked to ultimately downstream economics for refineries and oil and gas traders, and as we evolve those pricing models, the margin profile will also become more stable in the mid-to-long-term kind of timeframe, and in Q3, as I mentioned, despite a significantly lower gasoline-naphtha spread, we were able to produce and push out more material compared to Q2. T hat is what is giving us confidence that the growth potential for this product remains pretty robust. However, at the same time, I do want to highlight that given the nature of the business, it does take time to crack new markets and new customers. That's where we are saying that the ramp-up in the overall volume will be gradual and not a one-off event. Great. Just one small clarification. The capability on the bulk shipping, that would come through from Q4, correct? It wasn't there significantly in Q3. No, in Q3 itself, we have done some bulk shipments. So the capability got established. Of course, it's getting optimized as we speak. As we do more and more such bulk shipments, our ability to optimize the overall supply chain cost. The product does require very special capabilities to enable sort of long-distance bulk shipments. And we are optimizing on that capability, which will reduce our operating cost of doing these bulk shipments. And that benefit might come in Q4 and onwards timeframe, but the capability itself got established in the Q3 itself. Sure, sir. Thank you so much and all the very best. Thank you. Thank you. Next question is from Abhijit Akella from Kotak Securities. Please go ahead. Good morning and thank you so much. So on the plastic recycling project we have announced a short while back, with 500 tons per day of peak capacity, could you please help us understand what sort of revenue and maybe EBITDA margin potential this might entail? Ov erall, on the Re Aarti Private Limited, a JV between RESL and Aarti Circularity, let me do a step back first. In the last couple of calls, we had stated our intent from a long-term strategy point of view to focus on certain strategic bets. C ircularity was one such theme. T hat's the context in which Aarti Circularity Limited got established, and it's a 100% owned subsidiary of AIL. For Aarti Circularity Limited, as an entity, we are looking at multiple opportunities in sustainability, circularity, and recycling space. One of the most promising opportunities was advanced chemical recycling of plastic waste. T hat is where we thought a partnership made a lot of sense, and the JV with RESL got established. The JV just got incorporated one week back. JV is in the process of establishing its own business plan and coming up with concrete numbers. From an aspiration point of view, both partners have stated their aspiration to complete 100 TPD in the first 18-month timeframe and 500 TPD by 2030. T he exact revenue potential and profitability potential, we would come back at a later stage as the JV does its own business planning exercise. The only point I will make is, from an opportunity size point of view, it's huge, right? If you look at the amount of plastic waste that gets generated in the country, we are talking about hundreds of KTs, right, per month. Just at a Hyderabad facility, which RESL operates, t hey handle anywhere between 8,000 to 10,000 tons per day of waste. And even if you take 10%-12% conservative plastic in that, we are talking about 800-1,000 tons per day of plastic waste getting aggregated on a daily basis at one site itself. And they have these sites across the country, across international locations. O pportunity point of view, we remain very excited. We are focused on making the technology work. There is no at-scale player today in the country which does plastic waste recycling using chemical recycling technology. And we are focused on getting that technology proven. And once it's proven, then the scale-up happens in a modular kind of fashion. So Abhijit, I'm not giving you the exact top line, bottom line number at this stage. But as the JV completes its business planning exercise over the course of the next few months and fine-tunes the technology, we'll come back with more details. Thank you. My other question was on the financials. The gross margin seemed to be significantly lower on a sequential basis, but offset by a decline in other expenses, quite a sharp decline, and in that context, I was just wondering, you've articulated this cost optimization plan in your presentation, INR 100 to 150 crores, INR 150 to 200 crores, sorry, so just wondering how much of that is already done and how much is still left to be done in the context of the numbers we are seeing. We continue to remain on track in terms of our overall fixed as well as variable cost reduction plans. W e are kind of 30%-40% there in terms of that journey. I t still remains a lot of work to be done, but we are confident of completing that exercise, as I had mentioned in the last call, in the next sort of 12-18 months kind of timeframe. That's on the cost initiative. On the gross margin, I just want to highlight that given-- there are large volume shipments now, and some of them also get sort of flipped from one quarter to another quarter. So rather than looking at quarterly gross margin level, I would ideally encourage to look at sort of at least a nine-month or a longer-term timeframe margin average numbers. They are better indicative of business performance and one additional issue which was peculiar to Q3 was in Q2, because our MMA volumes had dropped quite significantly, there was certain buildup of aniline, which is a key raw material for MMA, which happened at a relatively higher cost, which got liquidated in Q3, so that also had a partial impact on gross margins, but in an overall sense, I f you look at nine-month gross margin levels, they are potentially a better indicator of a company's business performance versus quarterly gross margin numbers. T hank you. O ne last thing, if I may. T he specialty chemicals project and the Zone 4 greenfield that you've been articulating, if it's possible to share any further color on these in terms of product category or addressable market size, how easy it is for us to capture that market. That would really help us understand or appreciate the opportunity a little bit better. Thank you so much. Zone 4, as you mentioned, this is now sort of advanced stages of execution, and we'll get commissioned. There are multiple blocks within Zone 4, and they will get gradually commissioned over the course of the next 12 to 15 months. The first block of pilot plant already got commissioned. The next block, which will get commissioned, is actually a multi-purpose plant and a calcium chloride plant. Then the remaining blocks, which are dominantly in the chlorotoluene value chain, will get commissioned till sort of Q1 FY 2027 kind of timeframe. If you look at the potential product portfolio in that zone, broadly, it's focusing on three value chains. One is the chlorotoluene value ch ains, the dichlorotoluene value chains, and toluene photochlorination value chains. T hese three value chains, we have a roughly product portfolio of anywhere between 25-30 products because we will go significantly downstream compared to restricting ourselves at a base molecule level itself. So we have a product portfolio of roughly 25-30 products, which will cater to predominantly, t hree end markets: agro, pharma, and dyes. These are the three large end markets which we are targeting through these 25-30 products. We have reduced product mix significantly compared to what was originally envisaged two years back. And in that context, now the domestic export split of that product portfolio is expected to get revised. We have a higher domestic target, sort of 60/40 kind of a split when it comes to domestic export because many of these products are currently imported in the country. There is no other large player who manufactures these products, especially as we go more downstream of chlorotoluene and Dichlorotoluene. The overall configuration of that zone itself, we have made it in such a way where it's kind of fungible and flexible. So our total capability to produce in terms of number of products would be far higher, but we could select the product depending on the margin profile and the demand profile at a particular given timeframe. So the overall zone kind of becomes a little bit multi-purpose kind of an asset. So the product end market and the domestic export ratio will keep varying. But broadly speaking, given all the changes made in the configuration of the zone, we feel pretty confident of achieving commercial utilization in the first one, one-and-a-half-year kind of time frame. Thank you. That's very helpful. I'll come back in the queue for more. Thank you. Next question is from Aditya Khetan from SMIFS Institutional Equities. Please go ahead. T hank you, sir, for the opportunity. So just a couple of questions. Sir, first is onto the nitrotoluene. Sir, volumes have declined both on YoY and on quarter-on-quarter basis. Any particular reason, sir? W e were going through the commissioning exercise. And because this was a brownfield expansion and not a greenfield expansion, we had to manage the shutdown of the asset accordingly. T hat has some impact on the capacity utilization numbers that you're seeing for Q3 specifically. As we move forward into Q4, you will definitely see a ramp-up in the NT chain capacity utilization numbers. T he agrochemical side, you had mentioned that the pricing pressure still persists. If you can highlight, sir, how much percentage of the product portfolio we are having competition from China or which segment like in agrochemicals only we are witnessing erosion of margins? B ack in the situation, it's potentially aggravated. O ur segmental portfolio, you also have now domestic export split across most of our business segments. And in that context, if you see energy business, for example, it's more of a market development exercise rather than a competition with China. So that's part of the portfolio is a different challenge compared to a pricing pressure from China. Ag, yes, especially both global as well as a domestic market, we do end up competing with China given their significant capacity over there. T he dyes and pigments, printing inks market, 75% of our market actually comes in the domestic market. Only 25% is export. Even within that, now with Heubach getting acquired by an Indian entity, we expect our share of the domestic market to go up for that particular end market where our ability to compete with China is much, much better. Pharmaceuticals, 99% is domestic. Though the pricing sometimes does get linked to import parity pricing from China, but still from a management of customers and an overall market dynamic point of view, we are relatively better positioned. Polymer and additives is one segment where we do end up competing with China head-on because 85% of our business in that segment comes from exports. So the entire dichlorobenzene chain and the PDA chain where bulk of the volume ends up going to Western markets, especially in the U.S. and Japan. That's where we do face pressure from China. But there also, we have established certain strategies to counter that pressure. T hat is one segment where we are exposed to Chinese competition quite significantly. I hope that covers broadly the five segments which cover more than 90% of our product portfolio. Got it. Sir, onto the CapEx figures also. So we have reduced it from INR 1,200 crores to around 1,000 crores. So which are the areas like we had so cut the CapEx? We haven't reduced the CapEx number so INR 1,000 crore number that I talked about, INR 1,020 crore is for 9 months. O verall year, we are retaining exactly the same guidance as we had talked about last time, which is INR 1,300 to 1,500 crores. We will end up spending that amount of CapEx. so there is no one particular area where we have optimized on the CapEx. Zone 4 reconfiguration that we have done, we still maintain the overall CapEx guidance for Zone 4. There are certain deep bottlenecking initiatives internally within our existing manufacturing sites where we have put relatively higher hurdle rates right now. and because of that, there might be some optimization on the CapEx front. but broadly, the number remains what we had committed to in the earlier quarter conference calls, which is INR 1,300-INR 1,500 crores for this financial year. Got it. T he PNCB business segment. Sir, we have heard from the government that they have banned low-quality imports and domestic low-quality also of paracetamol. So does this give a fillip to our PNCB business higher volume growth or higher margins in any sense? I t's a very robust domestic market, which is continuing to grow in sort of strong double digits. As I said, in that segment, 99% of our product goes into domestic market. And any initiative that government takes to strengthen our downstream customers will definitely help us both from demand and margin standpoint. It's globally competitive on a net basis. As a country, we are an importer in PNCB. The country does import a decent quantity of PNCB every year. In t hat context, the pricing does get set to some extent linked to import parity. But as a segment, your initial hypothesis is right that both the demand as well as margin profile remains quite robust in that segment. B anning of imports of paracetamol, so that should definitely benefit PNCB. So we are expecting some higher volume growth. Earlier, we had grown by almost around 10% to 12%. So with this move, you think this growth can accelerate to 15% to 20%? I ndia, again, as a country, is also a net exporter for not only PNCB but also for downstream chain, right, to the likes of PAP and paracetamol. W hat you are characterizing there may not fully reflect into that story. If we had been import-dependent on a downstream chain, then that could have given a significant boost. But as a country, because we have significant downstream capacity and we also do a decent amount of exports for both PAP and paracetamol, that will not have a very significant impact. From our point of view, i f you look at our capacity utilization levels, then we are roughly around 75-odd% kind of capacity utilization numbers for NCB. And in the coming financial year, we expect to ramp that up to 80% plus kind of levels. That's the kind of volume growth we are seeing in that value chain. Got it. Sir, just one last question. Sir, onto the MMA business, we know that the spreads have fallen to some depressed levels. So we are witnessing a recovery. Sir, post the normalization, so whenever the spreads will come by first half of 2026, you see any further levers or fundamental changes which are happening which could improve the spreads or it will only come to the normalized level? T he spread of downstream sectors are linked to a variety of factors which are frankly beyond AI's domain. We are talking about gasoline-naphtha spread, which has its own dynamics linked to the refinery market globally and to a large extent geopolitics as well. What we remain focused on is to ensure that we are able to place the volumes irrespective of the market situation. Of course, the market situation does have a significant impact on both demand and margin. But given our penetration levels when it comes to overall octane booster market globally, especially compared to some of the other octane boosters, our penetration levels are significantly low. So our first and primary focus remains on how do we get more customers, how do we penetrate into more regions, and how do we create multiple business models to serve these new customers and new geography. That will remain our primary focus. What is giving us confidence increasingly is that even in a suppressed market, we are able to place volumes to a decent degree. And that's what is giving us optimism that we should be able to ramp up our capacity utilization numbers over the course of the next few quarters. Sir, just one clarification on CapEx. Sir, you said that INR 1,200 crores. But in the presentation, I believe, sir, it is mentioned INR 1,000 crores for 2026 complete versus for FY 2025, it is around INR 1,300 crores. Just a clarification. You mentioned INR 1,200 crores for 2026 also. T he CapEx for this year, the 9-month CapEx is around INR 1,020 crores for nine months financial year 2025. We are on track in terms of the guidance given of around INR 1,300-INR 1,500 crores of CapEx in this financial year, which is FY25. As we got FY26, the CapEx would be a number which will be a bit lower than INR 1,000 crores. So that is how the CapEx numbers are going to be there. I guess this clarifies the question. Okay, sir. Thank you. Next question is from Arun Prasath from Avendus Spark. Please go ahead. Good morning. Thanks for the opportunity. Sir, my first question is on your long-term guidance of INR 1,800 crores EBITDA. Can you just approximately indicate what is the equivalent revenue for this INR 1,800 crores EBITDA? The equivalent revenue, t op line for this corresponding to this EBITDA. T hat number of EBITDA is based on EBITDA assumption of 14% to 15%, right, so you can back-calculate the revenue on the basis of that, and Arun has mentioned previously, we like to focus on absolute EBITDA and not necessarily give revenue guidance because the bulk of our raw materials are linked to crude, right? Benzene, aniline, which are two of our largest raw materials. The pricing is linked to crude, and depending on how crude behaves, o ur top line can vary significantly, and that's where our intention always is to talk about absolute EBITDA rupees crore where we have a lot more control versus talking about top line. The reason I'm asking is for this kind of INR 1,500 crores in EBITDA margin. And obviously, our overall gross expenses will be close to INR 9,000 to 10,000 crores. So the asset terms come to be around 1 to 1.2. So is this the normalized asset terms on which we'll be working for the future projects as well? A s a management, we are focused on improving ROCE, not necessarily. A sset turns is one of the metrics, but w hat we look at more and continue to sort of have initiatives to improve our ROIC number and ROCE numbers. As we have indicated in our mid-term guidance, our objective is to hit 14% to 15% kind of ROIC and ROCE numbers. W e remain quite confident of hitting those numbers in our three-year plan. If asset terms remain the same and margins also remain the same, then expansion in ROCE won't be coming. So something has to give, right, to get better ROCEs? I f you look at the overall asset block point of view, a fter the Zone 4 commissioning from next year onwards, our actual CapEx will see tapering of numbers, right? We are at INR 1,300 to 1,500 crores right now. We'll go down to INR 1,000 crores next year, and CapEx subsequent to that will be linked to the growth opportunities that we are pursuing. But on an existing product portfolio, there is a tapering of CapEx. At the same time, a lot of the growth, both in top line and bottom line, a significant chunk of that is coming from existing assets. So if you put all of that together, we feel based on our bottom-up plan that we have put together for the next three years, 14% to 15% kind of ROCE numbers on an EBITDA of INR 1,800 to 2,200 is doable. Understood. My second question is more on the near term or on the tariffs for a joint date. If I missed, can you please help explain? Within our portfolio, who will be the, I mean, which category or which products or which chemistry will be the winners or losers in the account for these tariffs? Because there will be winners because we will be competitive more against these countries against which we are just putting tariffs. There will be losers because these countries will be dumping those products which they couldn't sell to us, and they will be dumping somewhere in the other export markets. So how should we look at this overall scenario with respect to our portfolio? Y ou yourself answered this question, Arun, partially, t he scenario is mixed. I t's very early to have a definitive perspective. W e are still looking at the evolving market landscape and how these tariffs play out in the global market. At a very superficial level, if you look at it, b roadly, two of our segments, polymer and additives as a segment where we have significant exposure to the US market c ould ideally see tailwind because there we compete against China for most of our products going into the US market. T he second is agrochem, where some of the intermediates like S-Metolachlor, Dicamba, where we are a major supplier of those agrochem intermediates, could see some tailwind because they are also one of the prominent end markets is the U.S. No t only tariffs, but also regulatory levers could also play a role in terms of growth of these end agrochem molecules. But as we say that, if you do sort of peel the onion two, three levels deeper, t here will be repercussions of these tariff barriers onto other markets. The competition intensity in other markets may increase as people try to push their capacity. And that could have implications when it comes to pricing and margins in some of the other markets. Also, how people react to U.S. tariffs itself could have an impact on the overall demand profile within the U.S. market. So on a superficial level, that's what I could answer at this stage. All of us need to wait and watch to see how the overall scenario plays out to really ascertain the impact of the latest initiatives taken by the U.S. government. Understood. Finally, on Rupee depreciation, if Rupee were to depreciate further, we should be on a Rupee basis, we should be seeing higher realization, or this will get somehow discounted on the pricing itself? Is the demand good enough to realize this dollar strengthening now? I'll answer the question on two fronts. One, in general, Rupee depreciation from a long-term business growth point of view is beneficial for AI, given we have a significant export exposure. From a business standpoint, Rupee depreciation definitely helps us. The second part of that question is what's also important is the relative depreciation against China, right? W e don't have to necessarily look at only INR/USD depreciation, but we also have to look at relatively Chinese currency depreciation versus INR. And that is where the real competitive advantage comes around. We are sort of closely evaluating both. F rom a USD point of view, we have actually depreciated, and that will help the business going forward. If you look at relative depreciation of Chinese currency, then the depreciation quantity is actually a lot smaller, which means the Chinese have also depreciated their currency. And given especially now the tariff issues that have got launched into the last few days, we have to closely look out for how Chinese currency behaves over the course of the next few months, t hat will potentially ascertain how much it will sort of benefit or not benefit AIL. Understood. Thanks for answering all the questions. All the best. Thank you. Thank you. [Operator's Instructions]. The next question is from Surya Narayan Patra from PhillipCapital India. Please go ahead. Thanks for this opportunity. M y first question is on the base business, excluding of the MMA. I n the base business, we have seen, obviously, there is a kind of pricing pressure and all that, and a consistent drag in the recent quarters. But the recent month data points indicating, obviously, there is an improvement. But if you can give some sense of what is happening there in the base business, what is the kind of volume value mix changing? And also within that, how qualitatively the product mix changing? And how should one think going ahead about it? So if you can give some sense, that would be helpful, sir. So on the base business, Surya, the pricing levels have stabilized, right? As I had mentioned the last quarter, potentially, they obviously remain at a level which we do not like, but at least they have stabilized. And now what we are doing is trying to get the volume gains back, which is helping improve the base business portfolio. As we get our asset utilizations up and volumes back, we are also able to optimize the product mix to ensure that we are diverting capacity where we are expecting better margin profiles. And that will start to play out in the next few months. For example, in ethylation, where we have 25-30 KTPA capacity, we have the ability to produce a variety of ethylation and propylation-based products. As the base utilization levels, once we are able to reach a certain level, then we start playing the product mix game, which is where we are able to optimize profitability much better. The same scenario will get repeated across value chains. Our first priority is to get the utilization to a certain respectable levels. Once we start hitting that, then try and optimize product mix to ensure that we are further able to optimize on the margins from a product mix point of view. The base pricing upgrades itself, t hey will come when they come, right? As the demand in the overall global market catches up with the capacity, at that point in time, the base pricing upgrades itself will come. We are not banking on it right now. T hat means in a way, the gross margin pressure, what we have been seeing so far, at least even if the price remains at these levels, because of the improving product mix, we are going to see an uptick definitely in the subsequent quarters? Ideally, yes. S econd point is on the MMA business, though. So you have said a couple of things. You said that there was a bulk shipment that has been delayed and deferred to the following quarter. That is one. And despite that, this quarter volume number is one of the best so far in MMA export is concerned. And also, simultaneously, you have indicated about new customers getting added to this business. So then going ahead, and this quarter also witnessed the spreads, lower spreads between the naphtha a nd the [Inaudible] gasoline. Gi ven all these things, it looks like that the next following quarters, obviously, there is a seasonal uptick that we will see, but much beyond that seasonal uptick that we should see in terms of the volume and the overall business in MMA. Am I right saying, sir? Two clarifications. One, if you're looking at the capacity and utilization trend chart that we now provide as part of our analyst presentation, it talks about production numbers, not about sales numbers, right? So when we said that one of the bulk shipments got delayed from late December to early Jan, however, that volume will be captured in the production numbers shown in that slide because they have production numbers, not sales numbers. That's one clarification. The second part of your question, yes. As we see stabilization or improvement in gasoline-naphtha trend, ideally, it should encourage more and more customers to try out our product or people who are sort of using our product, increase the volume in terms of usage of this product. That remains our focus area. At the same time, we want to be transparent in communicating that the gasoline-naphtha spreads that we saw post-starting of the Russia-Ukraine war for 18 to 24 months kind of time frame were unusually high, right? W e don't expect the market to go back to these levels of gasoline-naphtha spread. If you look at the last 10-year, last 15-year historical average gasoline-naphtha spread numbers, then that is potentially a more indicative of where the market could stabilize. Our objective is to make this business work and thrive at those gasoline-naphtha differentials as well. O ne last bookkeeping data point, the same question. See, can you give what is the overall export number for the quarter and in the previous quarter, sir? You want the export number for the company as a whole? Yes. T he data point that we have been sharing. So last quarter also that I missed it. So if you can share the last 2 quarters. Yes, so export for this quarter was roughly around half. It was almost around INR 1,000-odd crores? This is INR 1,000 crores that I should take, sir? Yeah, for the quarter. Okay. F or the previous quarter, it was fairly a similar number. Despite the MMA seeing a kind of quite a spike this quarter, our export numbers are remaining same. Is that right? Yes. Thank you. I would just again reiterate tha t he kind of shipments we are doing on MMA front are very large value shipments. And that's why I'm again highlighting that the bulk parcel shifting from December to January does tweak this number quite significantly. Surya, I just want to recorrect one number. On the last quarter, the export numbers were roughly around INR 900 crores, and this quarter around INR 1,009 crores, just to be clear. Thanks very much. Wish you all the best. Thank you. Next question is from Kumar Saumya from Ambit Capital. Please go ahead. G ood afternoon. Just a couple of questions from my side. In the recycling business, do we have any indication to what is the capital commitment that we will be putting in that JV? Sorry, can you please repeat your question? I s there any indication to what is the capital commitment that we will be putting in that JV with that JV partner? For the first year, both partners put together have committed INR 100 crores, INR 50 crores each into the joint venture. T his will be the capacity that you are indicating that you will be doing in the next 18 months? Yes. S econdly, the Zone 4 expansion, are we sticking to a similar outlay, like INR 15 billion for phase I, and then we'll be coming up with a 45 KT capacity? So are we holding on to that earlier guidance, or have we changed that internally? No, sir. I answered this partly in one of the previous questions. T he entire Zone 1 reconfiguration that we have done, W e have built the ability to produce. I n the earlier presentations, you would have seen we had a phase I product and phase II products. Phase I were mostly chlorotoluene and downstream, and phase II were actually dichlorotoluenes and downstream products. What we have done is, within the existing CapEx, we have built in flexibility and ability to produce both of these chains in one go, right? So that means the absolute capacity of individual molecules might go down, but our flexibility to produce any of the OCT, PCT downstream, or DCT downstream product is there in the existing CapEx itself, which allows us to select the products where the margin profile is best. That's how we are planning to scale up and commercialize Zone 4, treat it more like a flexible multipurpose block versus a dedicated chemistry block, because given the market volatility, it gives us a lot of flexibility to optimize the utilization levels as well as margins. L astly, a bookkeeping question. How much of our ECB loan is unhedged? I would have an exposure of around $140 million, which will be majorly unhedged. This is something which will have a repayment of almost around nine years. Got it. Thank you, sir. That will be helpful. Thank you. Next question is from Jignesh Kamani from Nippon Mutual Fund. Please go ahead. Just on the MMA side, as you mentioned a little bit, our Qo Q volume growth is around 10%, while if you take our production data, volume growth was close to around 78%. So around 65%-70% deviation is purely because of the bulk shipment which moved in early January, or we are building up inventory also for the upcoming good demand? No, we are building inventory as well. So it's a combination of delaying shipment as well as build-up of inventory of final products. Understood. So can you help how is the, you can say, production volume growth YoY on nine months? On a 9-month basis, if you look at MMA, at least at the production level, we were roughly at 59 KT for the previous financial year versus this year, first nine months, we are roughly at 88 KT. So that is the kind of growth we are seeing from a production point of view. Understood. Thanks a lot. Thank you. Next question is from Nitesh Dhoot from Dolat Capital. Please go ahead. Nitesh. T hanks for the opportunity. W ith regards to your Prozeal SPV investment, so here, Aarti Industries is transacting with a company where Mr. Gogri, the promoter of Aarti Industries, has a pre-existing interest. I f you could just clarify how much is the promoter's stake in Prozeal Green Energy and any specific reasons why Aarti Industries couldn't directly have an investment in Prozeal Green Energy instead of Mr. Gogri having an investment? T hese two are separate matters. W hat we are doing as Aarti Industries Limited is we are looking at group captive opportunities to purchase renewable power compared to the power that we are currently purchasing from the grid. And for that, a formal process was run for both solar as well as hybrid. T he both parties, CleanMax and Prozeal, were selected based on that formal process, wherever we got the least rate in terms of INR per kilowatt-hour over a 15 t o 20 year kind of supply agreement. I would not comment on Mr. Gogri's personal investments at this stage. But the only thing I can tell at this point in time, it's a competitive process run to select the partners for group captive projects. And that's the outcome of it. The supply that is going to come from CleanMax Hybrid Group Captive is going to be significantly larger. T he supply that's going to come from Prozeal is dominantly solar, which will also come in a much faster time frame within this calendar year itself. And both projects put together will deliver significant cost savings to AIL as part of their power cost saving initiatives. All right. Thank you. Thank you. Next question is from Pratik Oza from Systematix. Please go ahead. Thank you for the opportunity. I just wanted to understand what's our hedging policy. And given that the rupee is depreciating and it might depreciate further, so the MTM loss which we saw of INR 23 crores, can we extend the same amount of number in Q4? On the hedging policy, i f you look at it, we are a net exporter. Our export is almost around INR 4,000-plus crores every year. One of the ways to look at hedges from a long-term perspective is that you keep some part of the liability open. Unfortunately, the accounting principle prevails, which says that the benefit which you get on the export over a longer period of time is not to be recognized. However, in case of the liabilities, the variation has to be accounted on the date it happens or it prevails, which is where it is. From a structural perspective, the rupee depreciation, despite keeping an ECB open, will benefit us over a long-term perspective. There will be a quarter-on-quarter depending on how the rupee depreciates; there will be some benefit available in the top line in which you could be visible. As regards to the second question in terms of the impact which could come in the subsequent quarter, yeah, I mean, we've seen December quarter ending at a rate of 85, 60, 265 or something. We will have to see in terms of at what rate the quarter, the March quarter, will end. So the open exposure of around $130 million will be kind of revaluated or revalued based on the delta differential between the December and March quarter. And the appropriate accounting treatment for that will be done. It's more of a practice which will be followed, which has been followed year after year, and which will continue to be there. Thank you. Next question is from Bhavin Soni from Anand Rathi. Please go ahead I just wanted some light on the gross margin. So how much would be the effect of our inventory build-up, and how much would be the effect of if we have taken any pricing hit on MMA for pushing volume? Because there is some pricing adjustment strategy mentioned in the PPT. Both of these are linked to each other. M ore representative gross margin numbers is potentially in the range of 13% odd kind of a EBITDA margin. And that correspondingly is sort of getting converted into gross margin numbers. But difficult to segregate the impact because both are linked with each other. I guess in Q4, you'll get a much better handle of the gross margin numbers as the inventory impact of aniline is taken care of in the Q3. L astly, just from an industry perspective, if you could just highlight on global capacities in MMA and MTBE, and would MMA going forward take much share from MTBE or no? Both are frankly not comparable. MTBE, we are talking about, if my understanding is right, more than 30 million tons of global capacity versus MMA global capacity remains significantly less than 1 million tons, right? D ifficult to compare them. MTBE has been around for decades and very well-established product to be used as octane booster versus MMA is a challenger and recently started in the last few years. Both have their own pros and cons. But given the penetration level and the recency that we have on the MMA, we feel confident of scaling up that business over the next few years. Thank you. Thank you. Next question is from the line of Ankur Bhadekar from ULJK Financial Services. Please go ahead. Thank you for the opportunity. So a couple of questions from my side. My first question was, we are seeing a good volume growth in nitrochlorobenzene. So is this volume improvement mainly due to better nitric acid availability, or is it the result of a structural increase in demand? No, it's a combination of both. W e do face nitric acid supply challenges given the kind of supply portfolio that we have in the country. But I would say the increase that you're seeing is a combination of both: increased reliability as well as increased demand from downstream segments. W e discussed this in some of the previous questions. One of the major downstream use of NCB, especially PNCB, is into paracetamol. And as the consumption in that segment goes up, the demand for PNCB in the domestic market also goes up. M y second question was, how complex are the products that we are going to manufacture in the fluorochemical space in terms of number of reactions or process chemistry or R&D? If you could provide some light on that part. Difficult to answer the question at a generic level. T he only thing I can say is that all of our new product developments that are happening, they are relatively complex, which involve at least four to six chemistry steps before we reach the final product step, right? F rom starting with a bulk product like an NCB or a DCB or a PDA or NT, which is what we call sort of bulk chemicals, from that four to five reaction steps downstream is where we are doing most of our new product developments. What would be the margin profile of those products on average? Can you give some ballpark number? Again, it would vary product by product, right? The multiple we're talking about 25 to 30 different products. So it is difficult to generalize the answer. I n general, as you have more steps in terms of reaction steps, as we go through the manufacturing process, the margin profile should ideally improve and look better than bulk chemicals. That's it from me. Thank you so much. Thank you. Next question is from Kushal from Shah Securities. Please go ahead. Thank you for the opportunity. My question is in terms of what is the solution profile of monomethyl aniline, firstly. And secondly, in the last phone call, we talked about we are also providing a solution-oriented business in these particular molecules. So could you explain what is the kind of solution we provide to our customers and how difficult it is to replicate that solution for some other players? T he solution varies depending on the nature of the customer. In some cases, it could be supply chain complexities, ability to handle large volume cargoes over a large distance while maintaining the quality of the product. In some cases, it could be a formulation for a specific customer depending on their sort of product portfolio available and what properties they are looking to meet in their end cargoes. T he nature of the solution we provide varies depending on the customers that we are targeting. Thank you for the answer. M y second question was on what kind of pollution profile does monomethyl aniline have? Does it increase the pollution of the fuel? And also, could you compare it with the other kind of octane boosters that are available in the market? As a customer, why would I use monomethyl aniline over some other octane boosters? What are the benefits of it? F rom a pollution profile, there is no adverse impact on our customer. And usually, this product is blended at less than 1-2% in the final fuel component. So the overall impact is significantly lower. The true USP of this product is the higher octane number, right? So we are talking about octane number, which is in a 400-plus kind of a range versus a conventional gasoline will typically have around in the range of 90-odd numbers. And that is the USP of this product because of which we are able to create different solution profiles for our customers. Thanks for the answer. I have heard that certain geographies have banned this kind of product. D o we anticipate that current positions where we export it can ban it in future? No, we do not anticipate that. That is also a little bit misunderstood in the global market. Sometimes the ban is also linked to ability to handle the products, right? A s we educate more and more countries, port operators, and customers on how to handle this product, we are able to scale up usage of this product. The fact is the countries like the US or the countries like in the Middle East are able to use this product, suggest that the product is commercially deployable in most of the gasoline cargoes globally. I'm thankful for the answers. That was a very deep explanation. Thank you. Thank you. Next question is from Abhijit Akella from Kotak Securities. Please go ahead. T hank you so much for the follow-up. Just a couple of quick bookkeeping questions. One is on the net debt number for the end of the December quarter, if you could please share that. And second, on the tax rate, given we've had kind of a tax benefit throughout the year, what sort of number should we work with for fiscal 2025 as well as 2026? So tax rate, I'll take the tax rate question first. The tax rate in this year, considering a lot of projects are getting commercialized and there will be some IT depreciation benefit, will continue to remain the way it is current. So it will be marginal negative kind of or closer to zero. Next year, it should be in more like a low single-digit kind of stuff, at least at this point of time, that's what I've been studying. On the debt numbers, we are fairly similar to around INR 3,600 crores of debt, broadly around that on that debt basis. That was INR 3,300 crore, right? Currently at INR3,600 crore. INR 3,600 crore. Thank you so much, sir. All the best. Thank you very much. That was the last question. I would now like to hand the conference back to the management team for closing comments. Thank you. Thank you, everyone, for taking your time to join us on this conference call. T he company is much stronger with renewed vigor on excellence, innovation, passion, and determination. As a global partner of choice, which is our vision, we will continue to serve and expand our robust client base while ensuring sustained value creation for our shareholders by optimizing our assets and venturing into newer business opportunities. I hope we've been able to address all of your queries. If you have any further questions, feel free to contact our investor relations team, and we will do our best to address them. We look forward to connecting with all of you again in the next quarter. Thank you. Thank you once again. Thank you very much. On behalf of Aarti Industries Limited, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.