Ladies and gentlemen, good day and welcome to the Q2 and FY 2022 earnings conference call of Apcotex Industries Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal for an operator by pressing star and zero on your touchtone telephone. Please note that this conference is being recorded. At this time, I would like to hand the conference over to Mr. Anuj Sonpal, CEO of Valorem Advisors. Thank you, and over to you, sir. Thank you. Good evening, everyone, and a very warm welcome to you all. 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 the second quarter of financial year 2022. 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. Audience is cautioned not to place any undue reliance on these forward-looking statements in making any investment decision. The purpose of today's earnings conference call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. Let me now introduce you to the management of Apcotex Industries Limited participating with us in today's call. We have with us Mr. Abhiraj Choksey, Managing Director, Mr. Anand Kumashi, Company Secretary, and Mr. Sachin Karwa, Chief Financial Officer. Without any further delay, I request Mr. Sachin Karwa 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 second quarter and half year of financial year 2022. Along with me in today's earning call, I have our Managing Director, Mr. Abhiraj Choksey and Mr. Anand Kumashi, the Company Secretary. I hope you had an opportunity to review the financial statement and earning presentation which have been circulated and uploaded on the website and the stock exchanges. To brief you on the financial performance for the second quarter of financial year 2022, we had a strong growth on all financial parameters. The revenue from operations grew by about 88.2% on a year-over-year basis to INR 243.4 crores. The operating EBITDA stood at INR 31.4 crores, with EBITDA margin reported at 12.9%, which is a decrease of 141 basis points year-on-year. The net profit stood at INR 22.2 crore and PAT margin stood at 9.12%, which is an increase of 15 basis points. For the half year of FY 2022, the revenue from operations stood at INR 428.6 crore, which is an increase of 127% year-on-year. With operating EBITDA of INR 60.7 crores, which is a growth of more than 300% year-on-year, and EBITDA margin of 14.16%, which is an increase of 665 basis points. The net profit stood at INR 44.1 crore and PAT margin stood at 10.29%, which is an increase of 765 basis points. From the numbers, you can make out that during this quarter, we have been able to achieve the highest quarterly revenue due to strong volumes and increase in realization. We have also registered highest quarterly export sales of INR 49 crore, contributing to 20% of the overall revenue. Our absolute EBITDA has been highest ever, but EBITDA margin was lower than Q1 due to increase in shipping rates for both import and exports, disruption in certain raw materials, and also an increase in the cost of manufacturing for some products due to significant increase in coal and gas prices. In terms of volume too, we have achieved the highest ever quarterly sales volume, including in exports. On CapEx front, major debottlenecking projects were completed between July and October of 2021 to allow additional 10%-15% growth, and brownfield expansion projects at Taloja and Valia have commenced. Investment in these two projects expected to be INR 180-190 crore over the next four quarters. Also, escalation in CapEx cost is expected on account of commodity price increase. On the NBR anti-dumping, an appeal has been filed in CESTAT for both. With this, I would like to open the call for question and answer session. Thank you. Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Thank you. The 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 good set of numbers. First question is related to the EBITDA margin. Last time we discussed as to 14%-16% is something which we believe that we'll be able to continue. As you mentioned in our opening remarks and also in our presentation that it has been, it has come down mostly due to this shipping rates and other raw material costs. Is it possible or can we, how, with how much lag can we expect this can be passed on to our customers? Or will we take the hit in the upcoming quarters as well? Yeah. Thanks. Thank you, Ankit. Thanks for the question. One thing that wasn't mentioned in the opening remarks is, you know, we've also had compared to Q2 of last year, for example, or even, you know, Q4 or Q1 or, you know, the previous two quarters, the cost of raw materials and therefore also our prices of our goods, finished goods, have increased dramatically. The denominator, for example, if the revenue was only INR 200 crores against INR 243 crores, you'd have seen a, you know, EBITDA margin of, you know, 15%-16% again. Sometimes in our business, you know, depending on the value of what's happening with the raw materials, EBITDA margin is just one of the factors. The other factors Right. Are also EBITDA per ton, and then of course return on capital. Right. We focus more on EBITDA per ton because, you know, sometimes with oil and downstream petrochemicals being so volatile, just one year ago, you know, the same oil price was half, now it's, you know, $85. So similarly, some of our raw materials have also, you know, really skyrocketed. So this has an impact in our kind of business. Right. The denominator changes a lot. We're quite happy with our EBITDA margins. Yes, there have been definitely some pressure on it because of the shipping rates and, you know, energy prices. We've also had a one-time disruption issue in Q2 where, you know, one of our raw materials was suddenly not available, and then we had to pick up from the local spot buying market at a much higher price, et cetera. That's a one-time issue. Having said that, I think we're quite happy. Yes, EBITDA margins as a percentage may, you know, fall, but I think if you would just see the, you know, 2/3 of the growth in revenue has been because of overall prices, or realizable values going up. 1/3 is because of volume. We're quite actually satisfied with the numbers. Great. As we discussed last time also, so on EBITDA per ton metric, we would be at the similar level like last quarter? Yes, absolutely. A little bit lower, I would say, than last quarter because of the shipping and energy prices, and that's the lessons frankly we have learned. You know, so far the pass-through has been on raw material fronts because, you know, all these costs have not been significant factors, you know, for us. Now obviously, given the learnings from the last quarter, the next time we negotiate some of our contracts, we will try and build that in as well, which wasn't done. To answer your second question, yes, we will be able to pass this along, but this may take three -six months to pass along with some customers. With some customers we will be able to do it almost immediately. Great. In terms of ApcoBuild, as far as last quarter we have covered Maharashtra, Gujarat and Goa. Have we covered any other state now or we are still- No, we have. Now we are adding Madhya Pradesh, and within Gujarat and within Maharashtra also, we have added further resources and moved to other markets in smaller towns and rural areas. Is it fair to assume FY 2023 could be some significant up in the revenue contribution in terms of ApcoBuild? FY 2022 itself, again, it will still remain a smaller part of Apcotex because overall the company is growing also reasonably well. In fact, this year itself, we are expecting more than 100% growth for that particular ApcoBuild set of products. Great. One last question, if I may. Yeah. Directionally, how do we see our business in terms of the demand? How are we positioning as per the capacity? How do we see the competitive scenario in terms of, specifically in terms of export market? Because now export is becoming a larger portion of our revenue. It is almost about 20% for last two quarters. Right. The demand remains strong. All our customers are reporting you know, strong growth, and the requirements that they're indicating for the next quarter are quite strong, whether it's in India or outside. As far as competition is concerned, look, nothing major has changed. It's the same competition that we had. Of course, there are a lot of things we've done internally as well. We've improved market share by adding more customers within India. We've added more customers outside India. You know, few new applications. All that has resulted in reasonably good volume growth as well. Few internal factors and few external factors. We remain quite optimistic for the next three-six months. What would be the biggest risk you would be watching right now, given everything looks really good at the moment? Yeah, look, overall, you know, everyone's been talking about a heated economy, heated markets, what's happening in China. So I think from a macro perspective, that seems to be, from what we are all reading, a big risk that we all have to watch out for. Companies have to sort of tighten their belts and expect this coming at some point, maybe inflation. But, you know, that's why as a company, we're quite conservative. We ensure that, you know, we have enough cash on the books, you know, we're not overly leveraged, et cetera. The other thing, operationally, of course, shipping raw materials from China, you know, all these remain challenges, and I think that will continue the way it looks for the next six months at least. Okay. Thank you so much. Of course, we have taken some mitigation measures to try and circumvent this. For example, you know, easy thing to do is increase inventories in India. Of course, that will involve higher working capital in inventories, but that's something that I think all companies will have to do. The second is develop vendors outside of China, develop local vendors if possible, wherever possible. In some cases, it's not possible overnight, but we're working with some companies to see whether in a year or two Indian companies can develop certain raw materials that are today not available in India. We are doing a lot of things for the long term. Yes. One last thing is related to our cash flow from operations. When we compare it with last year, it has gone down significantly because of higher inventory and debtors. Is it a one-off thing or you see this extending? The higher inventory and debtors certainly played a part, you know, in this. I don't know if it will be one-off, but if the growth continues to some extent, you know, the cash would be used for working capital for inventory and debtors, yes. Okay. Thank you. Thank you so much. Yes, to answer your question, the steep increase in prices has resulted in this sudden need for extra working capital, which wasn't anticipated. Right. Thank you so much. Yeah. Sure. Thank you, Ankit. Thank you. Reminder to all the participants, to ask a question you may please press star then one on your touchtone telephone. The next question is from the line of Manav Vijay from Deep Financials. Please go ahead. Yes. Thank you very much, sir. A couple of questions from my side. First of all, in last call it was mentioned that you guys are running actually at almost chokablock capacity. The INR 60 crore of addition that you have done in this quarter-on-quarter basis, are you saying that 1/3 of this has come from the volume growth and 2/3 has come from the pricing? No. I was comparing from Q2 of last year to Q2 of this year. It was not quarter-on-quarter comparison. If you compare quarter-on-quarter, I would say, I mean, I'll have to go back and check on the numbers. Yes, there has been volume growth to the extent of about. Debottlenecking is there. It was there in quarter two, it will come only in H2. No, no. Debottlenecking quarter two also helped because we had four or five projects going on for debottlenecking, all of which got completed between July and October. Literally October meaning as late as last week. Some of the projects were completed in early July, which started, you know, immediately we started sort of utilizing those. I would say a large chunk of it, almost, I think over the next one year, starting from November, we would see at least INR 80-INR 90 crores additional volume because of these debottlenecking projects that we have done starting from November onwards. That started somewhat kicking in between July, August, September, and even now October. For the next one year we can still expect, you know, the 10%-15% growth from the current volume. That means whatever prices that you have of the raw material, as of now, it seems that those prices are still sustaining. I would say in H2, can we assume that actually quarter two becomes a good base to work on, plus whatever growth that you will have from your debottlenecking? In terms of volume, yes. In terms of value, hard to predict, Manav. Frankly, you know, it's prices have gone up substantially over the last, let's say, 12 months. That is, for example, if prices come down, then you could see our revenue coming down or the volumes may go up. We expect volumes to keep going up. Sure. Okay. My next question is actually on the CapEx side. Now you've increased this CapEx amount from, I believe, INR 140- INR 145 crores to around INR 180- INR 190 crores. Last time you had mentioned that apart from the expansion that you will have in Taloja and Valia, in Valia, you will have a second round of expansion where you can increase the capacity by almost 50%, by investing very small sum of money. Now that sales still remains the way it was. This is only because of the increase in raw material prices and everything. This cost has gone up. Yeah. No, not raw material. You mean like, steel. Yeah cement and so on. Yeah. Correct. From this. For the most part, what we were, you know, I mean, when we announced or the earlier costing we had done was back in January, February, and, by the time we got our environmental permission to move in June, to actually build the plant, which we have started building in Valia already, you know, prices had sort of changed dramatically, for steel, cement and other commodities used in construction. This INR 180 crore that we had planned for earlier has gone to about INR 180-INR 190 crore. Okay. The revenue projection from this of INR 500 crore put together from both the projects, Valia and Taloja, that number remains deviated as of now? Yeah. I mean, at current, frankly, that again, that number was you know, a few months ago. If you use the current prices, you know, that number goes to INR 600+ crores because overall the price of our materials or our finished goods have also gone up. My next question would be, so now since you have only started working on this, your CapEx plan, have you been also able to, let's say fix as to how much amount you would be putting in from the internal accrual and how much you would be taking debt? Because why I'm asking this question is that you are already sitting on close to INR 110 crore of cash plus in next 12 months by the time you will finish this project, I believe that you will generate close to INR 100- INR 110, I mean maybe close to INR 100- INR 110 crores, in addition cash. How much debt you intend to take for this expansion? I think, you know, overall this INR 180 -INR 190 crore is for these two projects. In addition to that, we will have some more CapEx coming up for, you know, regular maintenance CapEx, plus, we are also investing in a zero liquid discharge plant in Valia. You know, all that put together would be, you know, somewhere between INR 220 -INR 230 crore, over the next 12-15 months. We are planning to take about half, as debt and the rest from internal accruals. Okay. If I may be allowed to ask one more question, can I? Sorry, yeah, of course. It will depend. We've got a term loan sanction. We may not utilize everything in case, you know, the cash inflow is quite strong. We will see. We have a flexible sort of term loan arrangement that we've made. Okay. Okay, fair enough. Now, you guys are also sitting on a decent amount of, I would say, investments, both in terms of MF equity, and debt and also direct equity. Have you booked any profits in on those investments in last six months considering the way markets are moving? Yes, a few have been booked. I don't have the exact numbers with me, but I would say a large amount still remains unrealized out of, as you said, about INR 100 crores of investments that we have in our books. I don't know exactly, but at least 25%-30% would be unrealized. I'm not sure exactly. Sure. My last question would be on actually on this NBR. Now considering all the factors that are out there in terms of raw material prices, then the supply side issues, then the logistics, I believe you had mentioned in last quarter that the NBR was not positive at the EBITDA level. How was the situation in this quarter? The NBR situation has improved of course compared to, let's say, two years ago, when we filed the anti-dumping cases. It still remains a concern because there are times when, you know, when prices or margins are very low and times when margins are a little better. Overall, I'd say we have done a lot of things in the last year or two to reduce our costs, improve efficiencies, done some more work on it, and as of now we are quite comfortable with the NBR business. I don't want to talk too much about it because it's still in. We've filed an appeal and it's still in the courts. If you don't mind, I don't want to reveal too much right now on this front. That's okay. My last question is, would actually be on this only. The appeal that you have filed, so what generally is the success rates, I would say at this, at this CESTAT? Because, because like the case, in case of Supreme Court, when you file a review petition, the success rate is almost zero. So what, so if you can, I mean, let's say share, This is not a review petition. This is not at all a review petition. Yeah, I understand. Because the anti-dumping duties were actually levied on both cases for us, one against Korea and one against two other countries. It was not notified by another ministry of the government. Correct. We are just asking for fair representation. Not just only us, by the way. There are, you know, a dozen other companies that have filed the same CESTAT appeal and so we are working together to do this. Sure. Okay. Thank you and all the best. This is kind of unprecedented, you know. It's never been done before, so I don't have a question to, I mean, a specific number that what is the probability. I don't know. I know it's not, I mean, you know, I don't think it'll be zero, otherwise, you know, so many companies would not sort of have filed the appeal. Sure. Thank you. All the best. Thank you. Thank you. Thanks, Manav Vijay. Thank you. A reminder to all the participants, to ask a question, you may please press star and one on your touch-tone telephone. The next question is from the line of Rupesh Tatia from Intelsense Capital. Please go ahead. Hello. Hello, sir. Congratulations on the good set of numbers. Thank you. Yeah. My question to you now is, when I look at the business structurally now, you are able to export now, you know, 20% and you're giving a very good, you know, outlook. Bank growth is very strong, you're seeing demand. Then dumping got renewed in December. It's been three quarters and you know, you're able to compete. Margins have held up pretty well. So can you maybe, you know, throw more color on this business transformation, how sustainable it is? And will our competitive position continue to improve going forward? In you know, our chosen products. Maybe there are some products where we cannot compete, but in our chosen products, our competitive position will keep improving. So can you please give some color? Yeah, absolutely. You know, one of the few things in the last year or two that's happened is, besides of course increasing volumes and working on a better product and customer mix, we've also made our plants extremely flexible. Luckily, the company has now, you know, seven or eight good legs to stand on different industries. Of course, 80% are in India, so we are still very much India-focused. Over the next two to three years, we expect geographic diversity also to kick in, and maybe 35%-40% of our sales would be exports at that point. We feel quite confident that going forward as well, given that with our growth and as we are growing and in the chemical business, what does happen is, you know, every ton or every kg that you sell more, the percentage growth in top line and the percentage growth in bottom line is disproportionately higher than the percentage growth in top line. We expect that to continue. Since we are expanding in the same facilities, our fixed costs are, of course, much better controlled. We want to do that, keep growing in the same markets that we are in today. We've added the glove industry recently, and we are looking at a few other products, but that would come in, you know, after a couple of years. We'll see. We feel quite confident. Okay. Few follow-ups. One, I mean, in terms of specifically competitiveness, can you, I mean, give more color that we have, you know, done some R&D, improved processes, or we've figured out some way to run plant really to the full, or we have found some product where, you know, we can get 5%-10% more realization and sell the rest into market. I mean, how has our competitiveness? Maybe if you can give some examples, you know? As I said, one of the things we've done is made our assets more flexible. Earlier, what used to happen is that, you know, we had certain reactors for certain products and so, for example, only supplying to the paper industry, only supplying to the tire industry. Now in case, let's say, you know, one industry is not going through a great period, you know, four or five months, we're able to very quickly utilize the same asset to make something else. That's a competitive advantage. I don't think many companies around the world can do that. In addition to that, of course, there are a lot of things we've done on the R&D side as well, whether it's cost reduction, improving products to have certain products that are approved at certain customers where no other competitor is approved in. You know, that's an ongoing sort of challenge and that's an ongoing thing that we do. Of course, we don't reveal a lot of that because we believe that's a proprietary sort of competitive advantage and, you know, we don't wanna talk too much about that. Okay. Then for this, you know, 35%-40% exports aspiration. This will be higher margin business than domestic or it will be similar or lower? Do you have some sense on that? Well, we hope it would be a little higher margin business. It's for the medical glove industry, which as you know, even pre-COVID was growing in double digits. There are only five or six suppliers around the world for this nitrile latex product, and we have developed it over the last few years. Now we're selling reasonably large quantities from our current plant, and the plant in Valia is largely catered for nitrile latex. The expansion in Taloja that we're doing is a multipurpose latex plant, which we can make both nitrile and other products as well, our current latex products. We do expect that, obviously, you know, the margins as of today are at least good, and we hope that will continue into next year, even if the COVID, you know, if COVID is behind us, largely behind us. With some of the, you know, export expected growth, do you see some of these volume, you know, getting converted or some of the growth coming from, you know, a committed volume contract with a committed margin, from a customer perspective? Do you see our relationship with customers getting stronger to that kind of level over the next three to five years? That would be our endeavor, of course, with some of the large customers. We are already doing that with some customers in India and one or two customers abroad as well. In fact, more than one or a handful of customers abroad as well. We would at least want even our new plant, at least 50%-60% of our sales to be exactly what you mentioned. You know, contract sales, you know, with pass through sort of pricing and reasonably good fixed margins. Okay. Sir, one data-driven question. Can you give volumes for Q1 and Q2 per ton, and if you can split them also? I'm sorry. As a policy, we don't give volume numbers. Capacity utilization, roughly what utilization we are at? Yeah. The capacity utilization, at least till Q2, we are at almost full capacity utilization both in Taloja and This is debottlenecked capacity? Without debottlenecked capacity. As I said, the debottlenecking capacity has come on stream slowly over the last four months. Some of it will actually hit in Q3 and Q4. Q3 onwards, I would say. All the debottlenecking projects are now complete as of October, sort of 20th or so. Yes, even with the debottlenecking projects, whatever we could do, we are running at close to 100% capacity utilization. There are still some products, you know, where we are not completely able to make the plant absolutely flexible. I would say, you know, 95%-97% capacity utilization is what we are working at. This, till the brownfield CapEx comes online or something, product mix and maybe some more debottlenecking. These are the two top-line growth enablers. Yes, for the next one year. We expect the brownfield projects to be on stream by, within sort of a year from today. Okay. The last question is for this brownfield CapEx, do you see any risks that could delay it by, you know, significant? Apart from here and there is only time, but, you know, a significant delay of three-four- I mean, of course, look, given and unless like something like, you know, a third wave or very strong third wave or something happens and, you know, supplies from our vendors is delayed. That would be the only reason. Otherwise, we've already gone and placed all our sort of long lead item orders. We have started construction in Valia and in fact done a pretty good job in the last two-three months. Taloja construction is likely to start in Diwali in about 10-15 days. We don't see any reason for sort of major disruption now barring, you know, COVID or something that comes out of left field. Okay. For any new products you are working on or they will come in next two, three years from- Right now I think we are of course internally working on many products, but in the next two years, I would say the growth engine is you know both these expansion projects that we are doing for nitrile latex as well as for our current products. After that you know we'll wait and see how the NBR business plays out over the next six-eight months and take a call on doubling our NBR capacity. So our work is quite cut out for the next two years. After that you know there are some opportunities that we are looking at some internal and products that we are working on which would provide the next sort of phase of growth for Apcotex. In addition, of course, we are all, you know, always with our current product range, there is always new applications within each product range. Just to give you an example, we're in construction, you know, we're supplying for waterproofing. Now, suddenly, you know, there's a demand for products in technical textiles and geotextiles. Now, it's just, it's a related field within construction because they're used for construction projects, but within that, it's a different application. That kind of R&D is, you know, always happening for new sub applications within the broad, you know, industry of, let's say, construction or carpet or textiles or paper. Okay. Thank you. Thank you so much for answering all my questions. Thank you. Thank you very much. Thank you. The next question is from the line of Nikhil from Perpetual Investment Advisors. Please go ahead. Hi, Abhiraj and team. Congrats on a good set of numbers. My first question is a follow-up on your earlier comments on focus on EBITDA per ton. While I understand that you may be doing this to maintain stability and high visibility for your profitability, and if this works in a rising product price scenario, how do you manage this on the contrary? Same. Exactly the same. We focus on EBITDA per ton, and if even if, let's say, if it was instead of INR 243 crores, if our revenue had been INR 100 crores, we would still aim for the similar EBITDA per ton. You would not see the EBITDA numbers flinching. You know, you would still be around INR 30 crores EBITDA. You would of course ask me why my margins are 30%. That can happen from time to time. Going forward, it you know, if for example, oil prices fall drastically, then that could happen. Okay. I think sort of Percentage margin. Sorry, just to complete my thought. This percentage margin is just one parameter that we should look at. To me and to our business, the more important parameter is EBITDA per ton or gross contribution per ton. Of course, finally, return on capital, which you know, is the most important thing eventually. Yeah. We have to play, you know, we have to balance all these things out. Not to mention competition, you know, that we would love to increase prices, but you know, we have to do it strategically and after giving it a lot of thought. I was actually asking from that point where in a declining pricing scenario, it is more or less related to the supply-demand imbalance being more on the side of supply. I sort of asked that maybe the EBITDA per ton declines in that scenario. It may be marginally. Maybe. Overall, as I said, we try and peg a number that we want for EBITDA per ton and, you know, to achieve the right returns for our shareholders and on the assets that we have. We of course try and keep a watch on the EBITDA percentage margin, of course, but more importantly EBITDA per ton. Fair enough. Also related on ApcoBuild, let's say five years down the line, do you see this division contributing significantly to the business? Well, we hope so. Of course, it will depend on how big ApcoBuild is as a whole and how big we can grow it. In terms of growth, of course, it's still a small part of our business. I do hope that it will become a significant part. That's why we're working on it. We have a separate team, you know, completely separate from Apcotex that is working on this product, and we are focusing on our strengths. We are not trying to compete with some of the, you know, large construction chemical players. We know what our strengths are. Strengths are in polymers. We have built our brand around polymers and waterproofing, and we will continue to do that going forward. Okay. Can you sort of give a guidance on maybe, how much percentage of the business do you see coming from this? Again, I know that it's very difficult to say that, but any, yes. No, I mean, of course our endeavor is, you know, we wouldn't if we can't get it to about 10%-15%, you know, that ideally we would love to do that. That's what we're working towards. It will take some time. Okay. The two large downstream projects that you're working on now, do they both come, I mean, commercialize at the same time, or does the Taloja project happen earlier than Valia? No, we expect the Valia project to happen a little earlier than Taloja. The Taloja, we haven't started construction yet. We start construction this month in the month of November. It will be in Q2 of next year. Both will come on stream by Q2 of next year. Okay. Can we expect, on the profitability front, at least the business to be, you know, continuing at the same rate, at least at, given the current volumes? Sorry, just to clarify, I meant Q2 of next financial year, yeah, not Q2 of next calendar year. So I'm talking about the sort of August, September time period. Yes, you know, your profitability, as I've said in our business, you know, there are times when, you know, sudden crash happens, and there is a quarter- on- quarter, you know, a quarter that's bad. So there will be some kind of volatility quarter- on- quarter. But if you look at a longer period, one year or two years and so on, you know, given all that we have done over the last one year, given that now, you know, over four quarters we have had sustainable margins, sustainable EBITDA, which have been of course much better than the previous two years. We believe that will continue and, you know, hopefully even do better than that. Sure. Just one last question. Again, it comes to the first question that I asked. We never get advantage of the rising or declining pricing environment in the raw material then, if we are always focused on targeting a particular EBITDA per ton? Well, sometimes we do, but as I said, we're focused on targeting a particular EBITDA per ton. Sometimes we can take advantage of that, so there'll be some quarters when you have a little higher EBITDA per ton than your target. Some quarters in a declining sort of price trend, you may have a lower EBITDA per ton. Therefore, you know, you have to look at the average over a period of a few quarters. That could happen. Okay. One last question, sorry to add this. You acquired OMNOVA Latex in 2016. Again, the product line is sort of value-added than your existing at that time, the existing product portfolio. Now you're getting into nitrile latex, which again is value-added. Can we expect the next few products in the next couple of years, which you're already working on, to be much more value-added? Look, we as a strategy, obviously we don't want to go down a path where, you know, there are a lot of players. We look at things that are hard to do, and we want to do them extremely well, if not the best in class in the world. At least have a really high quality product which is in the top two or three. The second is, you know, it has to be less competition intensity. You know, we would not get into a lower value-add product range, which is, you know, anyone can make. Just to give you an example, for example, NBR, you know, only we are the only manufacturers in India. Nitrile latex, we are the only manufacturers in India. All our other products, Styrene-butadiene latex, Vinyl pyridine latex, we have maybe, you know, one competitor in India. Even from a global point of view, all these products have, you know, very few players worldwide. Since a lot of them, except NBR, of course, you know, it's 50% water, it's more of a regional business around, you know, this part of the world. We continue to look for products like this and develop products like this, and that's what we're focusing on in R&D as well. Understood. Thank you for this, and wish you a happy Diwali to the entire team. Thank you, [audio distortion]. Wish you the same, Nikhil. Thank you. Thank you. Reminder to all the participants to ask a question, you may please press star and one. Participants to ask a question, you may please press star and one on your touchtone telephone. The next question is from the line of Karan from Ambit. Please go ahead. Hi, sir. Thank you for the opportunity. Sir, just wanted to understand how is our revenue mix shaping up, you know. A year back we were at 50/50 from latex and from synthetic rubber. Is it changed drastically or how do you guide in for next two years? Latex is a little bit more now than earlier because, you know, most of our growth, there has been growth in rubber as well, but a larger part of our growth over the last year has been in latex. The debottlenecking exercise taken have been on the latex side. Of course, with the new investments that are coming up in both plants are also latex investments. Obviously latex will become a larger part of the portfolio for some time. Then again, when we double our NBR business, you know, again, you know, that percentage will change. Over the next two years, we expect latex to be a higher percentage of our business, maybe even as high as 70%-75%. Then once we double NBR, you know, that may come down. That's the sort of step jump depending on, you know, our expansion plan. Right. That was helpful. Sir, sorry, now it's quite some time that, you know, we are awaiting some CapEx on the NBR. Is it solely to do with the anti-dumping duty or something else, sir? I think. No, no, it's nothing to do with the anti-dumping duty because we do believe that to be competitive and, you know, our plant size is quite small for NBR compared to global standards. By doubling it, we would become an average size plant, not even the largest, you know. We are committed to doubling our NBR capacity. It was just a question of, you know, how many projects we wanted to take on at the same time. Since we already have two projects at both our plants, you know, we thought we would sort of be a little bit conservative and prudent and take it one step at a time. We're committed to increasing our NBR capacity as well. Right. Any concrete plans will be shared in the upcoming call? Not in the upcoming call, but perhaps sometime in 2022, maybe in about six months or so, six-nine months, we'll share some plans. The plans are ready, frankly. You know, we are ready with it. We have the technology, we have the entire costing done. We'll have to redo the costing depending on the, you know, CapEx, the costs at that time. We remain committed. We do believe in the long term. It's a good business. It's not as high growth a business as, let's say, Nitrile latex or SB latex or some of the products we are in, globally. You know, some of the reason is EV, you know, the EV impact, et cetera. We remain committed, and we're gonna do it at some point or the other. We'll take a final call, of course, in six-nine months. Right. I will let you know. Right. Great. Just also recently we've acquired a smaller company with an 8% market share in NBR. So, like, is it integrated fully now? How do you plan to take it sizable in terms of profitability-wise? Historically we've seen- Maybe I'm mistaken. We acquired this company five years ago, which included the NBR business. No, the recent 8% market share in the market last quarter, you mentioned we acquired a small industry, small company in the domestic market. No, no acquisition in the last quarter. Sorry, there's some misunderstanding. Okay. Someone was gonna shut down NBR operation in the domestic market, and we were eyeing to, like, take over. Okay. No. Not in the domestic market. There is some announcement that one of our global competitors has made that they may not be in the NBR business from, you know, next year. Okay. I did not announce it. I don't know, maybe not at least in this call. That may result in, you know, obviously one less competitor in the Indian market. Since NBR, we are largely a domestic player. We're not exporting currently. Right. Got it. Thank you. That's it from my end. Okay. Thanks. Thank you. The next question is from the line of Ankit Kanodia from Smart Sync Services. Please go ahead. My question is related to when we look at the export market. Can you name a few competitors, some formidable competitors with whom we are competing at the moment? Yeah, I mean, look, in the export market we have different products, and for each product we have different competitors. I mean, you can Google- Top two, three competitors, you know. You know, I would just prefer not to name competitors or anything. You can easily Google it. This is, you know, easily on the web. You can Google the top SB latex manufacturers in the world or in Europe and Asia, and then for Nitrile latex, the same thing. There's not very many. So you will be able to find the names. Yeah. If my understanding is correct, so our competitiveness would largely be based on our low cost compared to them, right? Not really. Of course, costing has a big part to it, but competitiveness is also having the right product for the right customer. That's one of the things we've done much better than our competitor, is actually finding customized products for our customers. Number two, providing the right technical service and the right service, which a lot of our competitors don't do, especially in the Indian market. Of course, no question about it, and having it at a cost that is extremely competitive. I think as we grow, our overall cost per ton keeps becoming lower because, you know, the fixed costs in this kind of business don't grow as fast, as long as we're able to grow faster than the fixed costs, you know. Fixed cost per ton keeps going down. Sir, can you give some ballpark figure as to what is the differential between the costs, your cost and your competitor, foreign competitor's cost? Any ballpark difference numbers? I mean, we do benchmark from time to time, but as I said, again, our business is not one. It's not one product. We have four or five different product ranges. For each of them, you know, we compete with somebody different. So it's hard for me to give you one number. Okay. Sir, can you just elaborate more on the technical services which you provide apart from the product? What kind of services do you do? Yeah. For example, you know, I mean, when we are basically taking monomers, manufacturing polymers, and then going to. For example, a customer of ours who's into auto components, I'm just giving an example. We are supplying our polymer to him, or to them, and also going and making sure that it runs well and it's running at their factory at the lowest possible cost. Because there are other raw materials that go in as well. We've developed teams, separate teams for each of our industry segments, whether it's rubber, whether it's gloves, whether it's paper, construction. We really understand the application well and how best to do it in their environment. That's the kind of technical service that we provide. I think customers appreciate that. We have, you know, a very high level of customer engagement on the technical front. Otherwise, it's just talking about pricing and highly commoditizing. These services are on time at the time of sale or also after sales? At the time of sale, of course, at the time of sale we have to, because to get approvals we have to be there. Even after that, you know, our technical service teams, whenever they have a problem troubleshooting, we have a full-fledged technical services lab, different labs set up for all of these applications. A lot of our customers don't have the equipment we do, especially some of the smaller ones. They're sending their samples for us to test, you know, here in our lab, and then we give them feedback on how to improve their product for their customers. That's what I mean by technical service. Great. Thanks, sir. Thanks. Bye. Thanks. Thank you. The next question is from the line of Amit Choudhary from Avod Foods LLP. Please go ahead. Hi. I wanted to ask you the investment that we have of INR 110-INR 120 crore with us. Why don't we use them as buyback of our own shares? Well, for absolute reasons. One is that we were holding on to these investments for two reasons. One is, of course, this CapEx that, you know, this CapEx cycle that has come out that happens every two, three years. Second reason is there are always inorganic growth opportunities we are looking for, so to have some kind of war chest, however, you know, small or big is always good. The third is that, you know, in our kind of business, we are in quite a volatile raw material sort of business. Having a little cash on the books always helps. We have seen in the past, I mean, as early as or as late as last year when COVID hit us, and of course that is for all companies, I would say many companies. Having that little cash in the books is the kind of, you know, financial prudence that we've always followed. These are the three reasons why we have kept cash in the books. I don't think it's a significant amount of cash. I mean, of course it seems like INR 100 crore is a significant amount of cash, but in terms of if you see for the CapEx that we're doing and potential acquisitions that we could have, at least having some amount to put down is good. Okay, great. Any potential acquisitions inorganic you are looking at right now or in pipeline? Look, we are always exploring. We would only do it if it makes strategic sense. Having said that, even if we were, I would, you know, not be at liberty to sort of reveal anything we're working on till it's concrete. Okay. Great. Thank you. Yeah. Thank you. Thank you. Reminder to all the participants, to ask a question you may please press star and one. Anyone who wishes to ask a question, you please press star and one. Ladies and gentlemen, this was the last question for today. I now hand the conference over to the management for their closing comments. Over to you, sir. I'd like to thank everyone for participating and, you know, coming in again. I would like to wish everyone a very happy Diwali and, happy New Year and of course, a safe New Year. Let's hope that, you know, that COVID is sort of on its way towards the end, and we don't have any third and fourth waves over the next year. Everyone please stay safe and look forward to interacting with all of you in Q3. Thank you. Thank you very much, members of the management. Ladies and gentlemen, on behalf of Apcotex Industries Limited, that concludes this conference call. Thank you for joining us and you may now disconnect your lines.