Ladies and gentlemen, good day, and welcome to Q4 and FY 2021 earnings conference call of Apcotex Industries Limited. As a reminder, all participant lines will be in the listen-only mode, and there'll be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anuj Sonpal, CEO of Valorem Advisors. Thank you, and over to you, Mr. Sonpal. Thank you. Good afternoon, everyone, and a very warm welcome to you all. I hope everybody's safe and well. My name is Anuj Sonpal from Valorem Advisors. We represent the investor relations for Apcotex Industries Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings conference call for Q4 FY 2021 and the financial year ended 2021. Before we begin, I would like to mention a short cautionary statement. Some of the statements made in today's earnings conference call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's beliefs as well as assumptions made by and information currently available to management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings conference is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. I would now like to introduce you to the management participating with us in today's earnings call. We have with us Mr. Abhiraj Choksey, Managing Director, and Mr. Anand Kumashi, Company Secretary. Without any delay, I request Mr. Anand Kumashi to give his opening remarks. Thank you, and over to you, sir. Thank you, Anuj. Good evening, and welcome everyone to this earnings conference call for the fourth quarter and for the financial year ended 31st March 2021 under review. Along with me in today's earnings call, I have our Managing Director, Mr. Abhiraj Choksey. I hope you had an opportunity to review the financial statements and earnings presentation, which have been circulated and uploaded on the website and on the stock exchanges. To brief you on the financial performance for the fourth quarter of the financial year ended FY 2021, I'm happy to report that this quarter the company has achieved its highest-ever quarterly revenue, EBITDA, and PAT numbers, with export also achieving the highest-ever numbers. The revenue from the operation grew by about 61.7% on a year-on-year basis to around INR 186.9 crores. The operating EBITDA stood at INR 30 crores with EBITDA margins reported at 16.05%, which is an increase of 922 basis points. The net profit stood at INR 22.6 crores, and PAT margin stood at 12.09%, which is an increase of 941 basis points. There was strong demand across most industries. The company scaled up the production and sale of XNB latex, which is used for manufacturing hand gloves from existing plant, with both plants running at near to full capacity. The customer and product mix has been optimized in the quarter with the better procurement of raw materials and implementation of a cost-saving project over the last few months and during the year, which assisted in boosting the margin. The company has filed a fresh petition for anti-dumping against Russia, Japan, France. The hearing has been completed, and final recommendations from DGTR are expected during Q1 FY 2022. On the CapEx front, there has been a delay in commissioning of the construction of a new CapEx for XNB latex for gloves due to delay in obtaining the statutory clearance from the environmental department. For the financial year ended FY 2021, the revenue from the operation stood at INR 540.6 crores, operating EBITDA of INR 68.5 crores, EBITDA margin of 12.61%, which is an increase of 594 basis points. The net profit stood at INR 44.2 crores, and PAT margin stood at 8.18%, which is an increase of 483 basis points. The company declared a final dividend of INR 2 for equity share of INR 2 each for the financial year 2021. With this, I'd like to open the call for question and answers. Thank you. Thank you very much. We will now begin the question and answer session. First question is from the line of Ankit Kanodia from Smart Sync Services. Please go ahead. Thank you for taking my question, and congratulations for a good set of numbers. We have had this discussion over the last two, three quarters. On this metric of EBITDA per ton, I think it would be fair to say that we were on one way up over the last one year or 12 months as we see. On a broad range, if it is possible for you, how much percentage would you ascribe to these aspects, like better product mix, raw material price movements, and customer profile in terms of your EBITDA per ton moving up over the last one year? Thank you. Thanks, Ankit. Because there are a few reasons why this quarter was good, it's very hard to attribute a percentage to each reason. As we mentioned in our opening remarks, there was strong demand. There was scale-up of a new product line. We were able to get to 100% capacity utilization better Optimized customer and product mix, as well as there were certainly tailwinds with lower good raw material buying. Of course, on top of that, savings from some of the projects that we've undertaken over the last couple of years have all come to fruition, and obviously we're maximizing it as we increase capacity. Honestly, very hard for us to attribute to all these four or five points. What I would perhaps, it could help you, is what I can say is besides the fact that, look, raw material prices are volatile, and we had good buying. The rest of them, the team is pretty confident that this is sustainable now going forward. There might be EBITDA margins may vary from industry to industry because as you know, we cater to seven or eight different industries and the fairly well-diversified portfolio that we have now. That may vary from quarter on quarter a little bit. By and large, besides the tailwinds of very strong demand and good raw material buying, the rest of it is fairly sustainable going forward. Sure. Thanks. That helps. Regarding this EBITDA per ton, would it be fair to assume that we are probably near the peak EBITDA per ton, or are we confident that we still have a lot of room to improve going forward? I think obviously it's been a very good quarter for us. There is obviously room to improve as we go along. As we mentioned in our opening remarks, that we are almost at 100% capacity utilization. We are in the course of the next three to six months, also, there will be some amount of debottlenecking that will happen, which will allow us to further improve volumes and therefore EBITDA per ton will also improve because the fixed costs don't increase at that level. We are hoping we can, at least for the following year, we can make do with these debottlenecking exercises that we have taken up and investments that we've taken up. Really after that, we would need significant more capacity in at least a couple of our products, and which is what we're working on in now both our plants. One plant in Valia, we've already announced this project for XNB latex for gloves, which, unfortunately, we've not been able to start the construction, and now it looks like it'll only happen post the monsoons because we're very close to the monsoons. That project is definitely delayed. In Taloja as well, we're at almost 100% capacity utilization, we are going to invest some more, to increase the capacity in Taloja. I will be announcing that perhaps in the next quarter. We're working out the details of that project. Both these projects are now likely to be commissioned only early next financial year. Okay. Thanks. Regarding all the products which we are catering to right now, we are probably number one, two, or three in almost all the segments which we are catering to. We also have a decent market share also. The overall market size as of now currently appears to be a little small. How do we see that growing? I'm talking about domestic market as of now. How do you see export playing a role as we grow over the next say, two, three years, five years? Again, it's very difficult to pinpoint exactly because different industries have different growth rates. Paper and paper board, packaging is growing quite well, growing at higher than GDP growth rate. Similarly, tires is growing at higher than GDP growth rate. We've had some tailwinds on the tire business as well because the government announced some anti-dumping on tires. There was more manufacturing of tires now happening in India versus it being imported from China. That has resulted in demand for our product, our VP latex, or one of our polymers that goes into tires going up. We expect that at least the industries we are in, construction, paper, tire, carpet, auto, we think that all these will grow over the next couple of years, two to three years. However, we are also focused on the export market, and I'm happy to report that in Q4, in fact, we've had our highest export sales, and even in terms of percentages that around 20% of our sales is now export. We do want to diversify in terms of risk, while India will remain for a while will remain our strategic market. And the focus will be here, but we do want to export and diversify for reasons like what's happening now. COVID is raging in India much more than elsewhere, and the uncertainty of what will happen in India over the next two, three months is much more than some of our exports markets. So it gives us a good flexibility to divert sales in case India slows down or we see some issues with the demand in the short term. Right. This last question in terms of the anti-dumping duty, which we have been discussing over a long time now. How confident we are that in the, as we have mentioned that in our presentation, that things will be done in the quarter one? Unfortunately, we had two anti-dumping cases. One was against Korea, that was actually the DGTR recommended an anti-dumping duty. Unfortunately, the Finance Ministry has not notified it. For whatever reason, we are representing there and figuring out how to do that. In the meanwhile, last year, we had also filed against these three or four other countries. We are quite confident that the case is quite strong. As a company, we don't want to rely on duties, whether it's customs duty or an anti-dumping duty. Don't forget, this is only for the NBR business, which is only about 30% of our total sales. Right. While it's significant, these numbers are without any anti-dumping duty. In fact, the anti-dumping duties lapsed in December, and Jan, Feb, March, we were able to do it without any. That's not to say the dumping is not happening. It is happening today. Obviously, we've been able to diversify and make our assets more flexible, and then focus on some other products as and when the margins are difficult. There are some countries that are still dumping. Even till today, still dumping at a quite high margin. We expect that certainly some anti-dumping duties will be levied by DGTR, which falls under the Commerce Ministry. The Finance Ministry is a different thing. I'm not sure. Anyway, in the longer-term frame, don't you think that there should be? Sir, just one sec. I'll request you to come back in the question queue for a follow-up question. Sure. Let him finish. Since he was, I think we'll just finish his anti-dumping matter, if you don't mind. Go ahead and ask your last question, please. Sir, he is out of the queue. Okay, fine. Welcome. The next question is from the line of Parthiv J. from NVS Brokerage. Please go ahead. Yeah. Hi, sir. Yeah, hello. Yeah. I'll just take the gentleman's question forward on the anti-dumping duty. Just wanted to understand, what do you expect once, let's say, anti-dumping duty is in place and everything, what kind of a boost it would give you to the top line, basically? Top line, not really. Frankly, we are still selling. We have to compete, and we'll sell. Certainly, bottom line, we will see a reasonable increase. Again, given where we are in the company, and the way we have adapted, it may not be a significant loss or a significant boost either way. Maybe in terms of percentage points, maybe a one or two percentage points more. That is what I would say. Oh, okay. Perfect. Sounds good. Yeah. It's not a significant amount. Just wanted to understand. Once all the CapEx, whatever you are planning internally, are being streamlined over next, and de-bottlenecking is streamlined over, say, next one or two years, whatever it takes, what kind of a growth in the top line you expect to witness from, say, FY 2023 and onwards? The big fillp will be the new XNB Latex plant that we put up. As we grow, the total top line should go up by about another INR 350 crores-INR 500 crores. It'll not be overnight, but INR 350 crores-INR 500 crores over one or two years. Okay. I just wanted to understand, sir. You explained the previous gentleman also, but just wanted to understand, what is the overall future demand, what you perceive, domestic and even in international market, and what kind of a growth opportunity, what you can see? Look, we think India and our company both are poised. We're at an inflection point. Assuming this COVID issue, and we assumed that three to six months ago, and maybe that was a wrong assumption. Frankly, when I say we, I meant as a country, as a whole, we thought it was over. Luckily, as a company, we decided to sort of build our assets to be more flexible over the last six months, and we continue to do that and invest for the next three to six months. We see great growth opportunities in most of the industries we are in. In India, even though we have high market share, all these industries are growing at a reasonable clip now. In 1920, we saw it was a difficult year for a few months. At least in the last six months, we've seen really good growth rates in India. As you know, because of the specialized nature of our products, where there are only one or zero companies manufacturing similar products in India, we think we'll continue to grow at the rate of these industries, which is paper, construction. When I say paper, it's largely packaging. Packaging, construction, tires, and all these are growing quite well. Auto. Auto is one thing that has been up and down, by and large, the Indian market is growing well. In exports, we are at a very low market share, the opportunities are very large. It's up to us to take advantage of those opportunities and really work out some of the issues, whether it's logistics, convincing customers, which takes longer sometimes in exports. Okay. We are quite bullish about it for the next three to five years. Okay. You're bullish about next two to five years, yeah? Yeah. Okay, perfect. Thank you so much. In terms of demand- Best of luck for the upcoming quarters. Thank you very much. Thank you so much, sir. Thank you. A request to all the participants, please restrict your question per participant. The next question is from the line of Farokh from Avestha Fund Management. Please go ahead. Yeah. Hi, Abhiraj and Anand. Congratulations on the really stellar numbers, and I think it's a good validation of all of your efforts over the last couple of years. Thank you. Thanks, Farokh. Yeah. I just had a couple of questions. Firstly, on the margins. I think the last time we had these margins was in March of 2018. It's been a gap of some time before we saw this level of margin. At that time, if you look at the gross margin, the gross margin today is significantly higher, I think about 350, 400 basis points higher than what it was at that point in time. Yet that increase in gross margin hasn't translated into the EBITDA margin. Now I'm talking about 2018, March and today. The EBITDA margin is up maybe 100 basis points or a little more than 100 basis points relative to the much sharper increase in the gross margin. If you could just explain that difference, and while explaining it, if you could give a sense of, and I think you alluded to it in the previous participant question, also of the cyclicality of this margin that we can sort of hope to deal with going forward. Yeah. I assume you're talking about Q4, you're talking about quarter-on-quarter numbers, right? No, yeah, quarter-on-quarter Q4 of 2018 was that one set of high margin numbers that we saw. Again, in this quarter, we've done well, and we've got reasonably high margins again. Right. A couple of things. One is that, at least compared to FY 2018 versus FY 2021 Q4, in terms of overall quality of the EBITDA margins, I think the team is quite confident of carrying on with the quality of these margins. In the sense, what I mean by that is we feel confident at that point, maybe there was. Of course, there were tailwinds in Q4 of this year as well, and there were at that time as well in raw material buying, et cetera. We still feel confident of doing about 14%-15%, even quarter on quarter. There may be, as I've told you, in our business, sometimes, it does drop to even lower than that. As long as through the year, we have 14%, 15% margins, and we feel that going forward, we feel reasonably comfortable to be able to do that, given where we are with our current business. Now, I'll have to look at the numbers, and frankly, I have not compared Q4 of FY 2018 with Q4 of FY 2020, and we'll come back to you. If you say that the gross margins were much higher this time around versus Q4 of last year, and yet EBITDA margins were not as high as they should be, one of the things I can think of is we have had some fixed costs, some repair works, a lot of things in the last three, four months that we've had to do, which we couldn't do from March to October, or March to November, I would say, just because of COVID. A lot of higher fixed costs have come in into Q4 and may be continuing into Q1 as well. That may have been the reason for EBITDA margins not going up as much as the gross margins. As I said, this is just something I am venturing a guess, but I would have to look at the detailed numbers. Okay, great. Also, you mentioned the delay in XNBR. Also, I think in the presentation, you have a slide which shows 3x- 5X of asset turns. On incremental investments, am I to understand that on incremental investment, we should look at that range of 3x- 5X of asset turns? Specifically with regard to the XNBR project, now that we are talking about the first quarter of the next financial year, is that again a time that we sort of feel good that we will be able to deliver by that point in time? On the NBR expansion, if indeed we do see the anti-dumping come through, then again, is that a sort of focus area, and will we be looking again at the larger size of project that we've spoken of in the past? Right. Yes, the first question is 3x-5x turnover is for this new XNB latex plant. We would be targeting that. In fact, with current prices, we're looking at about 4x ± a little bit more. The second question was on the timeline of the project. Look, we are ready. We're ready to go. It's quite unfortunate that it's taking very long, and I mentioned that at the I think you had asked that question last time. Absolutely You asked me what the risk was, if I recall correctly, and I said, look, one of the risks in this business or what we're trying to do in expansion is really the only risk that I can foresee is just this environmental clearance is not coming on time. Unfortunately, because of COVID, now we're not even able to visit these offices personally. That's causing a delay. Other than that, we are ready to go. We finished detailed designing of the project. We feel very confident that as soon as we have it, we will start construction in October, and we can deliver it in six to eight months. We're targeting for Q1 of next year now. As I said, we are also not only in Gujarat, but we are also looking at a smaller expansion in Taloja for current set of products because we are running at 100% capacity utilization. For that also, we have applied to the Maharashtra Pollution Control Board for permission. As I said, I'll talk about that only in the next quarter once we have a little bit of details on those numbers. Both these we want to do in the first or want to complete in the first quarter of next year, ideally. We feel very confident that we can do it given this one permission that we need, or both these permissions that we need from each state. Your third question on NBR, certainly it's on the card. In fact, it is part of this permission that we would need. Anti-dumping is one aspect of it, and it's certainly on the card. As I said, we have sort of kept it on hold because there's a lot of opportunity right now elsewhere as well. We are looking to sort of conservatively grow, and we'll take that call in the next few months on doubling our NBR capacity. Right. Related to that, what is our net debt position or net cash position as of the end of the fourth quarter? I think the balance sheet has been published, I think from that you will see that we only have about INR 7, 8 crores of long-term debt, and we are barely utilizing our working capital limits. I would say we have close to zero debt, and we do have cash in the books of about INR 80, 90 crores, at the current market value. I think we are, of course, net cash right now, and we are waiting to deploy it, frankly. Thank you. Quite a healthy balance sheet. I request Farokh sir to come back in the question queue. I request to all the participants, please restrict to two questions per participant. If time permits, please come back in the question queue for a follow-up question. The next question is from the line of Nikhil Chawdhary from KRIIS Portfolio. Please go ahead. Yeah, sir. Thank you for the opportunity, and congrats on a great set of numbers. Sir, I have just one question. Probably last time, same time during the year, we saw COVID first wave, and now we are seeing wave two. Just wanted to understand the demand from industries, how was it last year vis-a-vis how we are seeing it this year? Is industry more prepared? Just wanted to get a sense on that perspective so as to assess the demand going forward. Last year was very different from this year's wave. In the sense last year, I would say COVID was barely in India at this time, right? It was just a lockdown that caused all the disruption. This time around, at least as far as manufacturing is concerned, there is no government-mandated lockdown. Yes, the COVID wave is a lot more intense. The demand of certain industries is certainly going to be impacted. Difficult to say how much. I think anyone can give you numbers. No one really knows what will happen. Certainly, auto is something that could be affected, we feel. Some of the other, like tires, which is largely linked to commercial vehicles. Commercial vehicle movement has not really reduced much. Similarly, packaging is doing well. The glove industry, that is the newer product that we have, is in fact doing much better because of COVID in India and worldwide. Difficult to say what's going to happen to the demand, but it's a very different type of wave this time than it was, let's say, or different type of situation than it was one year ago. At least from a supply point of view, we feel confident that it won't be an issue at our end. We will be able to continue to running our plants as we have been for the last few months. Even through this COVID second wave, we continue to run it. Yeah, I'm not sure about the demand and what will happen in different industries. Got it, sir. Sir, last thing on my side is just wanted to understand with this entering of gloves division and all, probably we are making our revenue more stable going forward. Is my understanding correct? Probably the demand from the auto, the building material segment tend to be volatile and goes along with the cycles. Probably going forward as and when we do the gloves, CapEx is on stream. Can we expect certain stability in the revenue going forward? To some extent, yeah, because every time we introduce a new pillar, we call it pillars. We have now different pillars. We have paper board, construction, carpet, a lot of specialty products that go into various applications in the latex side. We have auto, we have non-auto for our synthetic NBR. We focus too much on auto, but that's only 1/3 of the Indian market, frankly, for NBR. There is rice rolls, there's industrial applications. We've added this glove product for the medical gloves industry, and obviously that will give us another pillar. As I said, we have tried to make our assets more flexible. Having said that, there will always be some amount of variability quarter on quarter or month on month, but we feel pretty confident of doing reasonable set of numbers going forward, and the company is more well-positioned in terms of where we are. Qualitatively, we're in a much healthier position than it was, let's say a year or two ago. Got it, sir. Thank you, sir. I wish you all the luck and that's it from my side. Thank you. Thank you. The next question is from the line of Ankit Kanodia from Smart Sync Services. Please go ahead. Ankit, may I request you to unmute your line from your side and go ahead with your question. Ankit Kanodia, we are unable to hear you. May I request you to unmute your line from your side and go ahead with your question. Can you hear me now? Yes, sir. Sorry. Thank you for the follow-up. It was regarding the anti-dumping duty. Sir, please let me understand. Maybe my understanding of this is not very clear. What I wanted to understand is, over the long-term frame, is it right to assume that we should be willing to work with this dumping thing because we can't always think of getting the help from the anti-dumping duty because that is something which is out of our control, right? Absolutely. I agree. Our contention has been, and this is what we have been telling DGTR or the Commerce Ministry as well, is that today we are manufacturers of NBR in India, and we just wanted some time, but from a scale perspective, we are much smaller than some of our global competitors or a couple of our global competitors. In India, if we want to be self-sufficient, and I think we would all agree that in India we would want to be self-sufficient. We just wanted some time to be able to invest more money and double our capacity so that we reach somewhat, at least by doubling our capacity, we'll be at somewhat global scale. Still not very huge global scale, but still somewhat global scale. Right now, 70%-75% of NBR is being imported into India, and the remaining Apcotex is catering to. We wanted to double our capacity and be able to cater to about 50%-60% of the current market, which is growing anyway. Right. That was the idea. You're absolutely right. As we grow, as we become double, our cost per ton will come down, EBITDA margin would improve, and it'll just give us a little bit of time. You're absolutely right. In any business, you do want to be cost competitive without any duty. Why only anti-dumping? Even without customs duty. We are very clear on that we're quite competitive as far as cost is concerned, but to be as competitive as some of our global peers, we need to double our capacity, and we need some time and some breathing space, and that's what we are asking for anti-dumping duty for another five years. Just to speak about a scenario wherein even if this anti-dumping duty doesn't come in our favor, whatever changes which we have done in our business life, we have focused a lot more on the gloves latex part. Can we believe that in the next two years, we'll be able to slowly build up our capacity in the NBR and we'll be in much better position, even if this anti-dumping duty never comes, then also we'll be able to As I said, the decision on whether to double or not has not been taken. If the anti-dumping comes, then for sure the comfort factor that the board and the management has will be much more that we have five years to invest and recoup some of our investment. Okay. The other thing will come about is, do we spend the same amount in funds on this product, or do we spend those funds on other products, and maybe those are better opportunities and better return. It'll come down to that. Obviously, we feel there's a great opportunity where we only have 25%-30% of the market share in India. We feel that we are well-positioned to be the number one supplier in India for NBR. Right. It is a good opportunity as well. Got it. Our CapEx will be determined by this anti-dumping duty, if I got it correct. Our further CapEx on NBR, right? Yes. Let me put it this way. If the anti-dumping comes, it will definitely give us the confidence to go ahead with it right away. If it doesn't come, then we would reconsider. We may still go ahead with it. We don't know. Okay. Thank you so much. Okay. Thank you very much. Ladies and gentlemen, you may press star one to ask a question. The next question is on the line of Harsh Bhatia from Emkay Global Financial Services. Please go ahead. Yeah, thank you for the opportunity, and congrats on the great set of numbers. Just to highlight, what would be the projected budget for CapEx in FY 2022, given that we have shifted the XNBR latex project into, I think, FY 2023, if I'm not wrong. Thanks. No. We hope to start that project as soon as the monsoon is over, and we hope the next three to four months we'll get this environmental permissions that we need. It's a good question. We are looking at a significant amount of CapEx happening in the current financial year. Assuming that does come through, obviously a large chunk of the CapEx, that project is likely to be about INR 100-110 crores now. It would be over FY 2022 and early FY23. In addition to that, there is a maintenance CapEx every year that we're seeing is about INR 10-15 crores now, maybe. This year we may invest more. We're looking at a new project in Taloja to enhance capacity there. As I said, that's something that we'll announce shortly. We are looking at, in my estimate, somewhere between INR 100 crore-INR 150 crore in FY 2022 if all goes well. That's really helpful. Just to address it from another point of view. If you were earlier seeing some sort of revenue potential from this project that we were supposed to put up, how much do you think has been deferred into FY 2023? I'm talking specifically from the gloves project. Well, the entire thing would be deferred, right? We are not going to be ready with the project by FY 2022. Yeah, I mean quantifiable, if that's possible. We expect about around INR 350 crores-INR 400 crores revenue once the plant starts. Of course, it's not going to be overnight. Once the plant starts, it takes time to build up the sale. At full capacity, it's about INR 350 crores-INR 400 crores. Got you. Thanks. Just one last question from my end. Did we face any supply chain issues, both on the procurement as well as sales side? Yeah, fantastic question. Yeah, absolutely. That's been a real challenge, I would say. Fortunately, our company has managed it quite well. Some of our competitors really had major problems on supply chain. We have also had some challenges. We had delayed material because of Suez Canal issue. We've had, obviously recently, one or two months, COVID has hit some of our customers or our customer's customers in some cases, where they've had to shut their plants. You might have heard some of the auto companies already announcing reasonably long plant shutdowns. How that's going to affect demand in the next two to three months remains an uncertainty. Yes, that is a risk and that is an uncertainty going forward because of the COVID situation in India. On the raw material side, things are improving. Compared to, let's say, three, four months ago, it's definitely improving because for the rest of the world where imports were coming from, there the cases are well in control now and COVID is well in control. We don't expect a major issue in raw materials going forward. Right. Any commentary on ApcoBuild? It's going well, actually. As I said, it's a small part of our business. I've always said so, and we'll have a note on it in our annual report this year. It's going well. It's still a very small part of our business. That's why we don't really focus on it. It's a profitable part of our business. It's a small brand that we have started a few years ago, and we have actively grown it, and it's a good profitable brand, but it's still a small part. It's regional. It's in the western region. We're focused on that, and we're growing it slowly. Thank you, Abhiraj, and wishing you the best. That's it from me. Thank you. Thank you very much. Thank you. The next question is from the line of Saurabh Shroff from QRC Investments. Please go ahead. Yeah. Hi. Congratulations, Abhiraj and team. A couple of questions from my side. I think in the last call, we had mentioned that we were undertaking a small debottlenecking of about 10%-15% which should come on stream in May or June of this year. That's right. Which is the current time. Has that come through? If that has, what does that do in terms of the capacities that you now have, given that you're running at 100% utilization? I'm just trying to understand the volume growth potentially. You're right, absolutely. This will be done in Q4, where it will be completed in Q4. As exactly what you said, we'll have around 5%-10% more. Sorry, in Q1. It will be completed in Q1, and we'll have 5%-10% more from the debottlenecking. Of course, the kind of demand that we saw in the last four, five months, it caught us by surprise and we're happy. We're pleasantly surprised. For the year, of course, if you will look at FY 2022 versus FY 2021 numbers, of course, they will be much better because the first three to four months of the financial year 2021 was very tough because of lockdowns. Obviously, things will be much better. Quarter-wise, we have very little headroom right now, and it will come through these debottlenecking exercises. After that, it will be through these two projects. One is this latex project that we're looking at in Valia, XNB Latex. We're looking at a latex project in Taloja as well, which will help us to some extent increase capacity in Taloja as well. That, as I said, it's a little premature to announce, but I will perhaps hopefully make that announcement in the next quarter. In addition to that, NBR Line 2, which is the big project to double our NBR capacity, which decision we have not taken, but hopefully we'll take it in the next three to six months. Abhiraj, in fact, my next question was that for it to be a viable size, what is the minimum size that you think you need, forget whether the duty comes or not. You said that for us to be sort of globally competitive, you think that we need to double our size. But let's say that- No, sorry, just to correct you, not double our size, but double our NBR production. Yeah, NBR. Yeah. NBR from 21 to 40, let's say. Yeah. Is that the minimum plant size or addition that you think, line size that you need to do to make it cost competitive rather than doing it piecemeal, two, three, five? Exactly. Okay. Exactly. That's helpful. Secondly, just sort of looking at the full year numbers, we have sort of other expenses line item because we don't have the breakup yet. The annual report's not out. We've seen other expenses sort of go up from INR 75-76 crores, which was the case in, say, FY 2019 or FY 2020, to about INR 90 crores this year. Is there any sort of one-off in this? Like you mentioned that maybe you took some sort of repairs or maintenance work which was extra in October, November, or even some of it in this quarter. I'm just wondering if some of it is not going to get repeated because that is sort of one line which seems to have hurt the EBITDA jump this year. I think Farokh asked that question, and maybe that is part of the answer I'm just trying to understand, if you could quantify that, if indeed that is a one-off. Well, one, and I am not sure of these numbers exactly. Again, I will have to look at the details, but obviously our volumes have been higher in the last six months, at least the last two quarters. Therefore, I don't know if the utility costs, like power and fuel, water, and so on, obviously, if that's part of it or not. Obviously that has gone up. In addition to that, yes, we certainly had some one-off expenses that we could not take up between March and October, and therefore they've come in the last three, four months, I would say. Also, remember FY 2019-2020. I know. I will finish there. I know you're comparing financial year. Even in financial year 2019-2020, it was a difficult year for us in terms of margins falling. Dumping was very high at that time for NBR. We had held off on some expenses, which then we approved in the last few months. Yes, there are some one-off expenses for sure, but I would have to go back and look at the details. Frankly, I don't know these numbers exactly what you're saying. If you can send us a small email, then we can clarify this. Sure. One final thing from my side. Gloves is sort of a relatively new pillar, as you said, that we've started. Just to get a sense, over the last three to five years, anything other than that has been a new sort of product, either innovation or a launch for us or a geography. This one big change we are seeing is this 20% in the current quarter being exports. Anything else that is sort of a relatively newer business for us, which has the room to sort of ramp up other than gloves or rather latex for gloves? Well, our current businesses as well, we have obviously introduced new products. We don't talk about it because it's different grades in the same product line, which has also allowed us to grow. We've added new customers both in India and abroad. Of course, this gloves is a new industry that we're focused on. If you see the last five years, one is we made this acquisition of the Omnova plant and the Valia plant. In addition to that, we added products in Valia, we've added products in Taloja. We have expanded our geography, and this new pillar of gloves. We've done multiple things. Okay. The main export markets were for this quarter in particular? Southeast Asia and the Middle East remain our main export markets. We also export into Europe and as far as America and everywhere else, but a large chunk of the business comes from these two geographies, Southeast Asia, Middle East, North Africa. Thank you very much, and wish you all the best for the. Thank you very much. Stay safe. Thank you. Thank you. The next question is from the line of Karan from Asian Markets Securities. Please go ahead. Hi, sir. Thank you for the opportunity. Thank you, Karan. Sir, just wanted to understand the pricing differential between our NBR product and what is there on the imports from Korea. What quantum of duty are we expecting this time? Look there is no pricing differential in that sense. Because we have to compete with whatever they price and whatever they dump, whether it's Korea, Russia, China, wherever it's coming from. We have to somewhat compete, but obviously we think that the price and DGTR for the Korean case, they recommended a dumping duty in terms of fiber to convert it into percentage of between 3% and 25% for to Korea, depending on the supplier. 3%-4% was for one supplier and for another supplier was upwards of 20%. I think it was 20%-23%. According to us, look, a fair duty. Again, it would depend from country to country. Some countries, I think the fair duty would be 20%, some countries, the fair duty would be 10%. That's up to the DGTR to decide, but we think somewhere around 10% and 20%, depending on country is definitely required. Right. Thanks for that. Also on the margins, if I have to remove the inventory gains, what could be the sustainable margin maybe you can provide for Q4 or for the full year FY 2021? Look, I've always said that if we implement our strategy well, and we have done that quite well in the last one or two quarters, around a 14%, 15% margin on average is definitely doable. We of course have done better than that in Q4. We expect that for the year as well, there will be some ups and downs, some hits and misses, but we hope to do in the mid-teens, sustainably. Right. Thank you. That was helpful. I'll get back to the queue. Thank you. The next question. Thank you. is from the line of Dhiral from PhillipCapital. Please go ahead. Yeah, good afternoon, sir, and thanks for the opportunity. Sir, as you earlier said that you are working at almost 100% capacity, and maybe you are doing some kind of a debottlenecking. Do you feel that in FY 2022, we will be doing a double-digit kind of a growth? Volume growth? FY 2022 compared to FY 2021 we'll be definitely doing a more than double-digit don't forget, for the first three months of the year, we were shut for the first two months, and our first quarter was really We had a lot of challenges. You know our first quarter numbers. That has helped. Of course, if you compare quarter four, we were working at almost 100% capacity utilization. Quarter-on-quarter compared to quarter four, we have a little headroom to grow. Okay. Compared to FY 2021, our numbers will definitely be much better. Okay. Sir, when you're talking about the CapEx, what kind of incremental ROE, ROC you are looking after that? Look, as a company, we wouldn't make any CapEx investment if it were not 20%-25% ROCE. Obviously, we would want to do better than that. Okay. Got your point, sir. That's it from my side. All the best, sir. Thank you. Thank you. The next question is from the line of Sameer Dalal from Natverlal & Sons Stockbrokers Private Limited. Please go ahead. Yeah. Hi, Abhiraj. Hi, Sameer. Two questions. The first one is, you mentioned that our growth rate will be that based on certain industries growing at what percent. Is there any sort of breakup you can share in what percentage of your sales of products go to which industry? I think we've mentioned that. I can tell you now, approximately 20% is paper and paper board, which is a large chunk of that is packaging. Some of it is for paper applications as well, but a large chunk of it is for packaging. Another 10% or so is the tire industry. Another 10% is construction. Another 10%-15% is carpet and specialty product. Footwear is again another about 10%-12% now. We have auto, which is about maybe 15%, and a range of other rubber applications, which is another 15%, 20%. I don't know. That approximately adds up to about 9,500, I think. I hope that gives you a sense. That's more or less of what we want. So it's a fairly- Certain growth rates on both industries. Exactly. It's a fairly equal distribution. I mean, fairly, I would not say equal, but diversified distribution, and we're not Compared to, let's say, six, seven years ago, when we were highly skewed to the paper and footwear industry, that's definitely come down. Sure. The dependence on the industry. The second question has to go around this NBR plant that you're talking about, where you're wanting this anti-dumping duty. Is it that plant right now is delivering fast, significantly lower ROEs and ROCEs than the rest of the business and putting a drag on the overall margins? Is that fair to assume? If that is the case, and you feel that the operational efficiencies that come through if you double up would help you get the higher ROEs, ROCEs, then why not still go ahead with it, unless the ROEs are really, really bad? I'm just trying to understand what's happening on that. No, you're right. Number one, what's happened with the NBR businesses, there have been years and quarters where the ROE has been very good, and then there's been 2019-2020, where we saw that the ROEs were largely dragged down, or the results of the company were largely dragged down due to NBR. As a result of which, we've done a couple of things. One is Luckily, we've had a few cost-saving projects that we've implemented, which has definitely helped improve the NBR margins with or without dumping. Number two, we have made our plant more flexible to actually make other products from the same plant. For example, the XNB latex for gloves, we've been able to make it in the same reactors where we make the nitrile rubber, the first part of the nitrile rubber process. We've made our plants more flexible. To your point, and that's a decision we have not taken, with or without anti-dumping, it may still be worth it to go ahead and do that expansion. The only question is: do we use those funds for NBR or can we utilize those funds better for some other opportunity? It'll come down to that. It perhaps may not come down to whether the ROE of the NBR plant is viable or not. The answer may be yes, it may be, especially when you double and especially when you reduce your cost per ton by doubling and you get economies of scale. It will be a question of where we want to spend our funds, where we want to invest our funds. What kind of cost would that NBR plant be? We have estimated around INR 180 crores right now, so it's a fairly large investment. It is a large investment. Exactly. I hope you understand now why we have a little bit of a concern. Yeah, that's what I was trying to, which you've explained very well. Thanks a lot. Sure. If I have anything more, I'll definitely be in touch with you. Good going, guys. Keep it up. Thank you very much. Thank you. The next question is from the line of Ankan Jain, a shareholder. Please go ahead. Good evening. Good evening. Congratulations on good set of numbers. Thank you, Mr. Jain. Yeah. Hope you and your staff all are safe and are taking care. Well, so far, thank you. Yeah, we've had a lot of COVID cases in the plant. Thank you for asking, but we've had quite a few COVID cases in the company, but fortunately, everyone has recovered without any serious disease. Unfortunately, we've had a few family members of our employees who unfortunately we lost, but none of our employees so far. Okay. It is nice to know that. Sir, I have two, three questions. One is on this CapEx part where you have planned three different CapExes. One is de-bottlenecking at Taloja plant. Second is the gloves project at Valia. Of course, proposed, it is still not approved for the NBR project again at Valia. That's right. The fourth one I've alluded to today is additional capacity in Taloja, but I will be giving details of that project only perhaps in the next quarter con call. What I wanted to know was, once we are done through all these projects, will we have sufficient space for future expansion at both the locations? You mean after these projects for more expansion? Yes. We may. We'll have to see how things work out once we've implemented it, because one of the other things we're cognizant of is also not just putting up a plant, but the logistics required for moving material, both incoming raw material and outgoing finished goods. It is going to get more difficult after all these projects are implemented. Yes, from that point of view, we've also started thinking of a third location for our long-term growth, which is four to five years down the road. Okay, fair enough. The second thing I want to know was, some years back, we had made some products for the paints industry. Unfortunately, at that time, it was found out that the margins were not remunerative and there was severe competition also. Is it remained same even now? What we did is, we are by the way, still supplying to the paint industry. It comes under the specialty portfolio, what we call it. We're only supplying some specialty product to the paint industry where we have a certain edge and where we are getting the margins that we feel are healthy and sustainable to grow in that business. Yes, as a strategy, we tried it out. We felt the margin. We have a range of products we had developed, which we can still manufacture any time. I think there was a lot of competition in that industry, we decided to sort of take it a little slow and only focus on certain products. Okay. That means it has remained, even now, severe competition is there. Yes. Okay. Next about this carpet industry where we had developed exclusive products for the Gulf region. I think it was more than eight to nine years back we had done, that time the potential given was around INR 800 crores. If you see the export part, you have said that around 20%, we should also include gloves. I don't have how much percentage of our revenue goes to the carpet industry. Even on a thumb rule, if I take 10% also, that works out to be less than INR 60 crores. INR 60 crores out of INR 800 crore potential that time is still less than 10%. Is there any particular reason why we are not going aggressive there? No, actually, we have done a very good job, and we are one of the key suppliers. You're right, it's a very big market. It may be even much more than INR 800 crores now. I'll have to rework it now. As I said, look, strategically, India. What's happening is there are only a handful, I would say less than in single digits, less than 10 big customers for the carpet industry. The competitive pressures there and the margin were much lower than some of the other customers, industries, geographies. While we continue to do business there, and anytime we want, we can increase the sale as well. It's a question of where the margins are more lucrative. Especially in a time like this when we are working at 100% capacity utilization, one of the things I mentioned was better product and customer mix or optimized product and customer mix. We optimize that. What is strategic, and we focus on those customers, but we may not want to grow significantly in those customers. There are also payment issues and all those other things that we have to worry about. Given all that, we've continued to focus on that, but we may not have aspirations to become number one in that geography for that industry. Okay. My last question is, see, you had mentioned about having implemented the flexibility in the production in both the plants at Valia and Taloja. Does that include even for this HSR rubber, where we have around 7,000 metric tons of capacity? Yeah. That's correct. So that- That's correct. Okay. That also we can make the other latex or other products based on the demand. No. Sorry. I meant HSR, we are able to make in both locations, but due to the nature of the reactors that we have, as of now, we can only make HSR from those reactors. We are looking at replacing a couple and making it more flexible, so we may do that. As of now, we can make HSR in both our plants, but those specific plants are not that flexible as of now. We're trying to make them more flexible. Yeah. Okay. Sorry, if I could squeeze in last question. Sure. We supply this VP latex to the tire industry. That's right. That can be used even for the radial tire? No. It mostly goes into bias tires as far as India truck and bus is concerned. For passenger cars, it goes into passenger and two-wheelers, we can use it in all tires. They choose across the board. For passenger, you meant to say even the radial tires also? Yes. Other than us, do we have any local manufacturer for this product? I'm pretty sure you can do the research. Google will tell you all those answers. Okay then. Okay. Okay. Thank you very much, and all the best. Thank you very much. Yeah. Thank you very much. Ladies and gentlemen, due to time constraint, that will be the last question for today. I will now hand the conference over to the management for closing comments. Thank you. Thank you very much, Nirav. Thank you to everyone for participating and taking the time out to come to our Q4 con call. We look forward to seeing you all at the end of Q1. We all hope that it will be a better year for all of us. I know it started off very difficult for India. We can hope and pray that we can come out of it. By the time we meet next time, hopefully, the situation is much better. Thank you very much. Thank you very much. On behalf of Apcotex Industries Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.