Ladies and gentlemen, good day. Welcome to the Q1 FY 2024 earnings conference call of Apcotex Industries Limited. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then 0 on your touchtone phone. Please note that this conference is being recorded. At this time, I would like to hand the conference over to Ms. Purvangi Jain from Valorem Advisors. Thank you. Over to you, ma'am. Good afternoon, everyone, and a warm welcome to you all. My name is Purvangi Jain from Valorem Advisors. We represent the investor relations of Apcotex Industries Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the first quarter of the financial year 2024. Before we begin, a quick cautionary statement. Some of the statements made in today's con 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 the 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 call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. Now, I would like to introduce you to the management participating with us in today's earnings call and hand it over to them for opening remarks. We have with us Mr. Abhiraj Choksey, Managing Director, and Mr. Sachin Karwa, Chief Financial Officer. Without any further delay, I request Mr. Sachin Karwa to start with his opening remarks on the financial highlights. Thank you. Thank you, Purvangi. Good afternoon, everyone, and welcome to our earnings call for the first quarter of financial year 2024. I hope you had an opportunity to review the financial statements and earnings presentation, which have been circulated and uploaded on the website and Stock Exchange. First, let me brief you on the financial performance for the first quarter of financial year 2024. For Q1 FY 2024, the revenue from operations stood at INR 278 crores, which witnessed a decline of around 9% on year-on-year basis and increased by about 8% on quarter-on-quarter basis. EBITDA for the quarter was INR 26 crores, which declined by about 48% on year-on-year basis and decreased by about 25% on quarter-on-quarter basis, with EBITDA margin stood at around 9.2%. The net profit stood at INR 12 crores, which declined by about 62% on year-on-year basis and decreased by about 48% on quarter-on-quarter basis, with tax margin stood at 4.36%. In Q1 FY 2024, on the back of new capacity commissioning, we witnessed our highest ever quarterly volume and export volume growth of 22% and 110% respectively on a year-on-year basis, which was led by nitrile latex, carpet, and construction. In spite of 22% increase in volume, revenue from operations fell by 9% due to sharp fall in raw material prices, which led to lower price realization of finished goods. EBITDA margins were affected due to lower margins in NBR and paper binders because of pressure on demand, falling prices, and inventory losses. Tax margins declined due to increasing depreciation and interest costs, only because of new expansion projects commissioned in March 2022. I would like to open the call for question and answer session. Thank you very much. We will now begin the question/answer session. Anyone who wishes to ask a question may press star one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Nirav Jimudia from Anvil. Please go ahead. Yeah, good afternoon, team. I have two questions: Sir, in your opening remarks, you mentioned that we have been able to grow our volumes by close to 110% in the export market on a YOY basis. Even in our annual report, we have been saying that we want to significantly up our exports going forward. Just wanted to understand your thought process, like, when we go and tap the export markets, are there customer approvals which needs to be taken from those customers to whom we are already supplying? Because what we could understand is that we are exporting close to now 45 countries. Those customers would again ask for the approvals from the newer plants which we have set up. How those processes are? I can go to the second question. Yeah. Thank you. Thank you, Nirav. It's a complicated answer, but, yes, in fact, the process has to, I would not say restart from scratch, of course, not at the lab level, but, customers do want to, initially try out, you know, some bulk quantity and then slowly move on. Especially in our nitrile latex for gloves, where the technology, of the new plant is very different from what we were making for the last three, four years, because we were making it in our old plant which was, not necessarily the most ideal way of making nitrile latex, because those reactors and those. . You know, optimized for other products. You know, styrene butadiene latex is styrene acrylic latex is vinyl pyridine latex. Yes, the technology was a little different, so some of our customers did want to, you know, not restock, but wanted to, start the offtake slowly. Starting from March itself, we started, you know, once our plant commissioned and slowly we moved up. We've completely, I'm happy to say, at least as of now, about a couple shut down all production of nitrile latex from the old plant. Everything is being manufactured in the new plant. Obviously, because the approval process takes 3-6 months, typically, you know, we are slowly building up our capacity utilization. As far as our other expansion project in Taloja, where, you know, it's our current products of styrene butadiene latex, styrene acrylic, and so on, it was much quicker. I would say in almost immediately, you know, customers said, you know, the technology was the same, it's just adding new reactors of similar technology. There the customer approval time is maybe even, you know, 1 or 2 months, and they are happy to start. Yes, that's the nature of the business. Whether it's exports or domestic, it's similar. I'm happy to say that this quarter, 31% of our overall sales is from export market. We are still very much an Indian company, you know, for strategic focus. However, you know, many years ago, almost, you know, 7, 8, 10 years ago, we were only at 2 or 3% of sales were exports. We were highly, heavily India-focused. It was a strategic decision that over time, we focus on products and geographies that would allow for strategic exports, tactical and strategic exports, and that's what we have done. For the first time, we have crossed this 30% mark. 31% of our total revenue is almost 1/3, to grow a little bit more and diversify. It's not only in one country, so that's another good thing, you know. At least from a geographical risk perspective, we feel better about the company's sort of current position. Got it. Just to add here, like, when customers approach us, like in terms of from the different geographies, what you mentioned, do they require some high-value added products, which probably they are not able to get from the existing set of vendors to whom they may be getting those products? We have been able to, one, innovate the products, which is also visible in our R&D expenditures, which have been consistently moving up on a YOY basis. Have we developed some products where these products itself is giving us, first, more advantage of tapping those customers to whom earlier we were not supplying? To add that, what we mentioned in some of our previous calls, that with these new capacities, probably our OpEx won't be going up. With this new set of products, probably our per kg realizations can or could move up, which would ultimately flow to our EBITDA per kgs. Look, in some cases, they, you know, we of course, and, you know, we have certain advantages as far as product performance or product quality is concerned. In some cases, we have a geographical advantage, as I've said before. For example, there are a lot of our customers in Africa, the Middle East, you know, in the GCC, that are anyway importing the product from Europe. There in the current context, because of the high energy prices, the costs are higher, the time taken from Europe to come to some of these countries is higher. Service levels, you know, they've not been able to keep up with our kind of service levels, with the talent that we have in India, and by that I mean technical service, helping them with the final performance of their products, visiting often, building a relationship often. You know, there's a combination of reasons why there is a competitive advantage. In some cases, it's not necessarily that product performance or product quality is significantly better, we have been able to develop it, but we have been able to provide other services and that are better than our competitors. It's a combination of both. Got it. Got it. Sir, the second question is on EBITDA. I think, one of the statements in the annual report is that we have significantly upped our sales value, we have increased our distribution network. If you can throw light in terms of the opportunity size for our B2C business, where we are currently, what needs to be done over the next three, four years to up the business from the B2C division significantly? Could it form a significant part of our business forward? Probably the margins there are better, stickiness of the customers are better, with the distribution network, I think we can penetrate more. If you can just explain those lines. Yeah, look, our strategy in the B2C business has been to focus on our strengths, which is polymers. We're backward integrated. A lot of the products for the B2C market that we are focusing on are the polymers that we manufacture and some that we understand, we're outsourcing, and so we have a basket of products. We are slowly building a distribution network. Earlier we were only in Bombay, we moved it to Maharashtra. Now we're in four or five states. Within the four or five states, working with more, you know, distributors to distribute our products. As of now, we are growing organically, and we've been growing at perhaps about, you know, 20% a year for the last few years, barring the, you know, one year in COVID, one and 1/2 year in COVID, which was difficult. We plan to continue to do that. As a total value of the business, it's still a very small percentage of, you know, overall Apcotex revenue. Over time, over 5, 10 years, you know, we expect it to play a more significant role in terms of profitability and then valuation at the right point. Because it's, you know, there the business is a little different from the B2B business. Building takes a while. Building the brand, building distribution networks, takes time. Correct. Correct. Sir, can this business or whether the thought process within the company is that could this business be scaled up to INR 300 crores, INR 400 crores of size within the time limits, what you mentioned upon, or it's too ambitious? Unlikely. No, that is too ambitious. I don't think that will be 300, 400 crores in the next three to four years, frankly. No, I'm not talking about three, four years. I am talking. Oh. the five, 10 years of the time period what you mentioned, where we can-. I mean, frankly, you know, we don't talk about it too much in term because it's an internal, it's a smaller business and for competitive, or proprietary reasons, we are not talking about the numbers of that business. Correct. I think any numbers or, you know, obviously, we are in it because we think it will play a significant role, it to diversify the business. It's a good opportunity. We backward integrated, we understand the market, we hope that it plays a significant role in the, you know, overall business, either in terms of revenue or profit or EBITDA. Okay. That's the endeavor, of course just a. Let's, can we move on, if you don't mind, Nirav? Fine, fine. I'll join back in. For other people. Yeah, give other people an opportunity. Thank you. The next question is from the line of Aditya Khemka from InCred Asset Management. Please go ahead. Yeah, thank you, sir, for the opportunity. My first question was, what was the utilization level we clocked for nitrile latex in first quarter, and what is our target for the full fiscal? For the first quarter, our utilization level was approximate 30%. 30% +, minus, somewhere around there. Obviously, every quarter we or every month rather, we are looking to increase that. We hope by the end of the fourth, by the fourth quarter, we would be at, you know, 70%, 80% capacity utilization for that quarter. The average for the fiscal may be only 40%, 50%, but I must say that in the first quarter itself, we've exceeded it, both for nitrile latex as well as for our other products, you know, where we had built capacity, recipe latex and for paper, carpet, construction, textile, and so on. We're quite happy, and we are most plants are at about, I think, 30% or so. Correct me if I'm wrong, but it's around 25%-30%, right? Yes, 25%-30%. Yeah. Okay. Okay. Sir, sir, we have taken also inventory losses into this quarter, the complete impact that has been taken away and the in terms of per kilo margins, can we take a call that we are standing at the bottom or there is more room for inventory losses or things can go wrong and there could be further downside into the per kilo margin? I'm glad you asked that question. There are 2, 3 reasons, you know. I mean, I, exactly about a year ago, it was the other way around it, a perfect storm. About a year ago, you know, there were a lot of tailwinds. There was because of the supply chain disruption, the issues with China, you know, freight rates were very high. As Apcotex is a company, because 50% of our products are import, you know, imported, the competition only, we benefited from that. Now, sort of... Prices were going up still, raw petrochemical and finished goods prices. Now we're in a, so to speak, this quarter at least, where we have seen raw material prices crash. Frankly, earlier, Q4 and Q3, we had a lot of stock that we had overbought, you know, raw materials at that time because of supply chain issues. Beginning of Q1, we had pretty much exhausted all of that, and we had sort of normal levels of inventory, but the drop, for some reason, has been so sharp and so unexpected in the last quarter, that even with regular stock, we've had to, you know, bear with these inventory losses. To answer your question, yes, it continues into Q2. I think from what I... It's little bit recent, but in the next last week or 10 days, I would say things have seemed to have bottomed out, but I think it's too early to say. We have to wait for another couple of weeks. You know, it was still dropping as of July. It's difficult to predict when. If you were to ask me, in my opinion, there's not much left to go below. It's really some of our petrochemical raw materials are at the lowest that I have seen in many years. You know, even some of them below COVID, if you believe it or not, when the first COVID wave hit. It's unbelievable. Got it. Got it. Sir, just one last question. Sir, considering our nitrile latex business, when it runs at full utilization level, and since this product is majorly for catering the export market, this mix of 30% of exports, how much this can shift at peak utilization when nitrile latex will run? Can this go to around 45%-50%? Yeah. Over the next five years, you know, obviously, we are going to grow the domestic market as well, where we have high market share in all our products. That will grow at some place. We are adding new products for the domestic market as well. Yes, we think, you know, with nitrile latex and some of the other products that we are pushing, you know, we're still pushing with some customers. There, at the peak, I think we had worked about 40%-45% of our overall sales should come from export. ... Got it, sir. Thank it, sir. That will be four, five years later. Okay. Thank you, sir. Thank you. Before we take the next question, I'd like to remind all participants to please limit your question to two per participant. You may come back in the question queue if you have a follow-up. The next question is from the line of Bhavya Sonawala from Samaasa Capital. Please go ahead. Yeah. Thank you for the opportunity. Hope I'm audible. Yes, absolutely. Go ahead, Bhavya. Yeah. Basically, I mean, just looking at our customer and competitor commentary that, you know, Top Glove has closed 17 factories centrally, and Synthomer also had a kind of guidance that nothing is getting better in at least one or two quarter in terms of inventory pile up. How are we seeing the situation right now? What is our, you know, take on the current market? If you can just throw some light on it, please. No, I mean, I think very similar. As of now, at least for the next 1 or 2 quarters for nitrile latex, it doesn't look like margins are going to improve. However, as you can see, some of the capacities that were added. At least the glove capacities, there is some shutdown happening. Hopefully with, you know, start again normalizing at some point, things should return. I know from the way we are looking at it, is that our nitrile latex margins are well below pre-COVID levels, with 1/4 of pre-COVID levels. When I say margins, contribution margins, at the gross margin level. Obviously, like 1/10 of what they were during COVID levels. Let's assume that's negative. Also compared to our other products, you know, they're much lower. At some point it has to correct. Supply-demand will correct itself. Unfortunately, we came in at a time, our plant, new plant came in at a time when, you know, the market is at the bottom. It has been for the last 6, 8 months or more, and it's expected to be, as you said, from the commentary that some of our customers, like Top Gloves and others, have been giving and some of our competitors as well. I don't think we have any different view. Our focus is, though, focus on since our capacities are quite small, you know, 50,000 tonnes, and we're already doing, as I said, about 30% in the first quarter of commissioning the plant, which I think is a fantastic job that the team has done. We hope to continue to improve that focus on improving our capacity utilization, our market share, and at the time when it turns, you know, we'll be there. We'll be there in the market. There are a lot of opportunities, not only in Southeast Asia and with some of the big customers, but in South Asia, in Sri Lanka, India, some opportunities have arisen with specialty products in the West, in Turkey, Europe. We are now focusing, not only on Southeast Asia, but other markets as well. Okay, understood, sir. That was very helpful. Just one more, one more question that I had was, is the medical glove market growing irrespective of what's happening on the inventory side? Is there any decline or it's growing at a lenient level, if you can have any sense on that? The way to think about growth is the way. I mean, I'm ignoring 20, 21, 22, right? Calendar year 20, 21, 22, because that was a blip. All medical, whether it was gloves or masks or everything else, you know, demand was through the roof. Obviously, compared to those numbers, you can't count growth. If you look at 2019 and then try and draw a line. Yeah, absolutely. All, at least for gloves, I can tell you, there are 2. One is that, you know, the quality of healthcare and the awareness of personal protective equipment in Asia is really almost at the bottom. That only can go up. In America and Europe, yes, it's a mature market, that's growing. That's, I'm talking about gloves overall, but within gloves also there's natural latex gloves and nitrile gloves. Because of the availability issues, uncertainty of availability, plus the protein allergies in the West, you know, issues around those things, the market is moving from natural latex gloves to nitrile latex gloves. It has been moving for the last many years, 7, 8, 10 years, but that continues to move. As a result of which, nitrile latex gloves are growing at a faster clip than overall, you know, other PPE markets. We continue to remain bullish. All reports show that, you know, growth over a 10-year for nitrile gloves worldwide. Okay, understood, sir. Will we stick to the INR 200 crore guidance on new capacity? Sorry, what is that INR 200 crore number? No, I'm saying we expected, I think INR 200 cores from new capacity coming in this year. In terms of revenue? In terms of... Pardon? In terms of revenue, you're talking about? Revenue. Revenue, yeah. Sorry. Yeah. Well, look, I don't want to give annual guidance. Yes, we have certain targets. Overall, we are looking at about, you know, INR 600-700 crores from the investment revenue base. Okay. At a 100% capacity utilization. Got it. Thank you. Thank you. Before we take the next question, a reminder to the participants to please limit your question to 2 per participant only. The next question is from the line of Aditya from Securities Investment Management. Please go ahead. Yeah. Hi, sir. Thanks for the opportunity. If you could quantify the inventory loss for this quarter? Yeah, I mean, I would say, you know, I think we would have lost about almost or around 3% EBITDA because of the inventory losses this quarter. Okay, got it, sir. What was the QOQ decline in the raw material prices for us? Good question. Of course, as you know, we have multiple raw materials. I am just trying to find you those data, but for the quarter, I would say between March and June, depending on the raw materials, anywhere between 10% and 30%. Some of our one of our major ones was almost 30% across over the quarter. If you take a 4 month, including July, it's even more. In, you know, 18% and just 40%-45% or something like that. It's a big drop. It's one of the biggest drops we've ever seen in such a short period of time, in 1/4. It has happened in the past as well, but it's very, very, very rare. While we have, you know, what we look at as regular stock gains and losses, maybe ±1% here or there, this has been obviously much steeper than what would be our sort of average or normal. Got it. Any specific reason why we are seeing such a sharp decrease? Because the crude has remained stable for the last one to two quarters. Any particular reason? Absolutely. We were surprised as well. There are a couple of reasons. One is at least in from March, it was frankly for us also internally, we didn't expect this kind of drop because we thought, you know, post-COVID, the prices had already come down a little and stabilized for some, for one or two quarters. Then suddenly to see this happening after March, especially when crude was around the same, you know, it's been around $70-$80 for the last 3-4 months. One reason is China. They're saying China, post-COVID, you know, the kind of pull that was expected has not happened. As a result of which, these commodities that we buy, at least for us, our petrochemicals, and I can't speak for every, but I hear a lot of them also, because of China's slowdown, that was unexpected and therefore, there's been a sharp drop. Then, of course, it moves in. That also has had an impact, you know, on, on the demand of, for these raw materials. As a result of which, sudden crash has happened. Okay, sir. If you could just help us explain what is happening in the NBR market. Are we seeing higher imports from the players in South Korea? Yeah, look, we are seeing imports as well. NBR is a little bit of a cyclical commodity market. Unlike our latex products, which are, you know, not easy to store, not easy to transport, with NBR, you can store anywhere, you know, it's a synthetic rubber, you can store it for six months, one year. What we have seen is because prices, raw material prices have come down, there is also destocking happening, which typically doesn't happen in latex products, but in rubber products, that can happen. Because they run at very low inventory, there is an amount of destocking. Therefore, demand itself has been pretty poor in China, in India. When I say demand, I don't mean final consumption demand, I mean selling, or buying of the product right now for the last 2, 3 months. That's turning now in Q2. We see it turning now going forward because it's kind of bottomed out. Sometimes it's a, you know, prices are coming down, demand reduces, therefore, prices are coming down. That cycle continues for 2, 3 months till it kind of bottoms out, you know. Volumes and margins have been quite challenging for NBR in the last quarter, for sure. Got it, sir. Sir, and, what is happening in the synthetic latex business, excluding the nitrile latex for the domestic market? You have mentioned that we are seeing some weakness in the paper segment. If you could just elaborate, what is happening over there? Look, I think weakness in the sense, there has been not much this quarter. We have not grown in the paper segment. That's what we mean by demand. We have added capacity, our competitor has added capacity, so there is a little bit of, you know, market share, sort of grappling going on. As a result of it, margins in paper especially, have been a little lower. I don't think the weak demand has not resulted in lower volume. Whereas the other segments, construction, carpet, textiles, we have seen growth in volume, both domestic... That's, that's the nuance. I mean, there the business is going reasonably well. Besides the stock or inventory losses that we've had, there's no major issue. Got it, sir. Just one last question? In the annual report, you have mentioned that you have completed a rebranding exercise to effectively communicate what Apcotex stands for. If you could just specify what is this rebranding exercise? A couple of things we have done. You know, it's been seven years since we acquired Omi. Modified the logo a little bit. We have defined our values in our company. We have started social media marketing, which we were not doing earlier. Please, I'd encourage all of you to follow us on LinkedIn. Apcotex has a page, and we're quite active now on LinkedIn, which we weren't earlier. That's what we mean. Rebranding and sort of social media campaign. We have, you know, revamped our brochure. I'd encourage all of you to sort of, you know, support us and follow us. Sure, sir. Thank you. That was helpful. I'll join back in, bye. Thank you. The next question is from the line of Viral Shah from PhillipCapital. Please, go ahead. Yeah, good afternoon, sir. Thanks for the opportunity. Sir, I wanted to know how our contract, you know, works with our customers. Is it like a monthly contract or a quarterly contract? Whatever raw material, you know, price fall, which we have seen, are we going to benefit from that? No, on the contrary, we're not benefiting from it because we have two types of pricing. One is formula pricing, which is based on, which is based on some published rates of raw materials. Sachin, can, what percentage, about 25-30% are on formula price customers, from what I recall? [crosstalk] Yes. 20, yeah, 20%-30%. Yeah. Around sort of monthly spot pricing. What typically happens is when, you know, there's weakness in the market and prices are falling, we're forced to correct our prices on the first of every month, because that's the industry norm. Typically, on the first of every month, you know, all us and all our competitors issue our pricing lists for the month. We are still stuck with some amount of high-cost material, you know, raw material and finished goods, because we have to work with some kind of inventory. That's where the inventory losses come in, and that's been the problem this quarter. It doesn't benefit us. Where it benefits us is when things start going up and then we may have some stock gains also. Typically, as I said, look, stock gains and stock losses generally doesn't make a difference of more than 1% a quarter, you know. In this quarter itself, you had a pretty large hit with up to about 3%, because the drop has been very sharp and constant over a period of 3 months. Sometimes we see a drop for 1 month and then, you know, flattening out or rising also in the third month. Okay. Between March and June. Okay, whatever, you know, drop in the prices, what we have seen that we have to compulsory pass on to the customer. Absolutely. Okay. Okay. Lastly, on the CapEx part, whatever CapEx we have done till date, what will drive the next leg of growth in the company, sir? As of now, we have just completed a CapEx of INR 100 crores over the last year or two. We're more in the consolidation phase, and what we have is enough for the next couple of years. We're just consolidating right now, watching our, you know, cash flows, debt levels. In the meanwhile, we have completed the detailed engineering and budgeting for expanding our NBR business. Detail engineering, we're trying to see, now we're working at sort of advanced stages to see how we can reduce the CapEx cost and investment cost. At the same time, you know, there is enough work going on in terms of selling this additional capacity that we've just invested in. One area of growth is the NBR business. The second area of growth is as and when the nitrile latex market turns in terms of margins, you know, at a minimal investment, we can further ex- volumes by about 60%. That's another area. The third area is, of course, growing with our current set of businesses, and we can always invest again in our, you know, expanding our current set of businesses. The fourth is we are looking at new products, new opportunities, which are very different from, you know, our current set of products. At the right time, as and when we have something concrete... Thank you. Thank you, Abhiraj. Thank you. The next question is from the line of Aditya Khemka from SMIFS Institutional Equities. Please go ahead. Thank you, sir. One follow. Sir, my question was, this 30% utilization figure, which you had given for this first quarter, this is on a capacity of 85,000, right? This is on an annual capacity. Yes. The quarterly capacity is one-fourth that, so let's say about 21,000, and then 30% of that. Yeah. Despite we have started one of the big project of nitrile latex, our employee cost has, on quarter-over-quarter basis, has declined by 4%. There should be a rise in employee cost, considering we have started taking the volumes and numbers into our financials. Why that has declined? I think one reason, Sachin perhaps can answer this better, but one reason is in Q4 of last year, you know, a lot of our bonuses and variable pay was sort of included in that. I would have to go back and check. Other than that, I don't see any reason for decline. Don't forget, we had already recruited all these people, obviously, before the plant started. The only thing I can think of is a variable pay component, which generally hits the March quarter, which it doesn't hit the Q1 quarter. Sachin, anything else I'm missing why it would decline? No. No, perfect. I think that's the reason. Yeah. You might have recruited them early, but you will account for the numbers when you have started accounting for the volumes, right? Sorry, we'll have to check. What do you mean account for the numbers? They had already joined us, so they were part of the employee cost anyway. Yeah. Yeah. Okay. Some of them, at that point, were working. Because the plant had not started, they were working in our other current plant, those kinds of things. I mean, it's been going on for the previous 6, 8 months. They were part of the employee cost. I mean, that's the only thing I can think of. There may have been sometimes we also have some provisions made that are written back or something, but that might be minor, I don't think, but it's not a big issue. Yeah. Got it. Got it. Sir, currently, sir, what the issue with the chemical industry, what we are facing, is the weakness in demand into U.S. and Europe. Out of our total exports, sir, how much will U.S. and Europe will contribute to the total exports, sir? What is the outlook currently like, what we are experiencing? Sachin, would you have it? My sense is not more than 10-15% is Europe and U.S. for us. That's why, as you can see, we have seen a 22% volume growth overall. Our exports have in fact grown by 110%. Frankly, we have not seen any after the company. You are right, you're right, U.S. and Europe. Especially Europe, I would say more than the U.S. Europe has definitely seen a tough, you know, few months in terms of volume demand, and that's what I hear for other companies. Ours is not significant amount. It's I think less than 10%. Sachin, do you have the number with you ready, or? I need to check, but, yeah, it is in the range of 5%-10%. Yeah, that's what I would venture a guess, Aditya. Thank you, sir. Thank you. Thank you. The next question is from the line of Ankit Kanodia from Smart Sync Services. Please go ahead. Thank you. I just wanted to know, what is the% of our revenue from NBR today? Roughly, if you know exactly. I mean, look, I don't have today, meaning for the quarter, we don't give quarterly numbers. I can tell you broadly. Obviously, this quarter there's been a change come from, not NBR, from other latexes, nitrile latex and other, SB latex for carpet construction and so on. I would say about, probably around 30%. I know, +- 2%. I would have to look the exact number. In the last year, same quarter, we were at the same level, 30%-35%. I was expecting it to come down. Yeah, yeah. It may be 35% last year, 30% now. And uh, given the. I don't know the exact number. Okay, no problem. Given the growth we are seeing in the other segment, how do we see our product mix going forward, say, in the next couple of quarters or maybe three, four quarters down the line? If you can give some broad guidance. Chunk of the growth is gonna come from the latex products, nitrile latex, and styrene butadiene latex, styrene acrylic latexes, and so on. Growth is gonna come from there. Even NBR, we are expecting a growth because we have done some debottlenecking recently. Which I had not announced earlier, but to the extent of another, 15%-20%, we should be able to. We are working out the exact numbers because we were able to free up a lot of the capacity since nitrile latex now has moved into its own new plant. At both the sites, we have some extra capacity for the other products. We're working out those exact numbers. The large chunk of the growth will come from the latex product and minor from NBR. Related to NBR, as in, do we see any dumping risk anytime now? Sorry. Sorry, can you repeat? Do we see any dumping risk here in India, which we faced in 2019? Yeah, absolutely. Absolutely. It's that risk is always there because it's, you know, as I said, it's store product. China is really the main consumer of NBR. Anytime we see China demand slowing down, we see dumping. Dumping, meaning much lower margins. When I define dumping, it's much lower prices or margins than the average that you would see over a period of 5, 7 years. It happens from various countries, you know, from mainly Korea, Russia, those are the two. Sometimes China, but we don't. Yeah. Last question is related to asset, I find it very difficult to foresee what kind of asset turn we may have in FY 2024 and maybe FY 2025. Can you give them some broad guidance? Maybe not exact number, but some broad guidance. FY 2022 was six times, and then it has fallen 50% from there in FY 2023. Any guidance? Look, anytime you commission a new project from a balance sheet perspective, and in our case, you know, we had pension for many years. Till FY 2022, all our assets were, you know, were pretty much written down or, you know, lower, and suddenly you have this large chunk of INR 200-250 crores coming in in one year, as a result of which. The volume hasn't picked up that much, and therefore, asset turn is lower in that one shot. Same thing happened with ROC, for example, ROC numbers. When you look at asset turn numbers and ROC numbers of our company or any other company, where there is a sudden large made in 1 year, you will see that the following 1 or 2 years, numbers like asset turn and ROC will be lower, and then over the period of 4, 5 years, 3-4 years, it will go back to, you know, the original level. Yeah, that's my. I don't have a guidance for this year. I mean, on a longer term perspective, you expect it to go towards 5 to 6 times? 5 times. Yeah, absolutely. Now, 6 times may have also been, you know, towards the end of our, or that's at the end of our, not end of the CapEx. How do I put it? Just before the start of our CapEx cycle, it was. A lot of our assets were anyway depreciated to a large extent. We did not have major investments in the last 4, 5 years, 6 also may have been too high, but yeah, at least 5. 4-5, we expect it to go back to. Yeah. One last question regarding EBITDA per ton. I know that you don't disclose the exact number, but directionally, if you can just let us know where we were one year from now, where we are today, and directionally, how do we see. Yeah, it's much lower. It's much lower for three or four reasons I've given. I'll repeat them again. One is the inventory losses for this quarter. The second is overall margins in NBR, especially NBR, have been very low. Number three, the growth that has come from nitrile latex is done. Number four, the tailwinds that we had one year ago are gone now. You know, they're not there. They haven't been there in Q3 and Q4 of last year as well. Q1 and Q2, we had them. As I said, the freight advantage that we had for our competitors products that were imported. As a result of which, EBITDA per ton is probably, you know, maybe half. It's similar, you know, our EBITDA has fallen by 45%, EBITDA percentage. EBITDA per ton has also fallen by around the similar number. Okay. Okay. That's it for my time. Thank you so much. Yeah. Thank you. Thank you. The next question is from the line of Tej Kumar Pandya from Ganesh Stocks. Please go ahead. Well, good afternoon, Mr. Tej. Good afternoon, Mr. Pandya. Actually, first thing is I'm thoroughly disappointed. The finance cost and your depreciation and amortization cost from the last quarter has increased tremendously. Finance cost has gone up from INR 58 lakhs to INR 363 lakhs, and the amortization has gone up from INR 468 lakhs to INR 738 lakhs. Why so much of depreciation, increase in depreciation and finance cost? Mr. Pandya, in fact, I don't know if you were in our con call, the last con call that we had, where I, where I had mentioned that please expect higher depreciation and finance costs for going forward. Simple reason is that we have commissioned two projects worth about more than INR 200 crores in the month of March, or around Feb, March, in Q4 of last year. Therefore, the depreciation of those projects and the loan that was taken, to partly finance the, those projects, all those start hitting the PNL from Q1 of this year. You can expect depreciation and interest this going forward for the next few years, next few quarters, to be at these levels. Of course, as we repay the loan from next year, interest rate, interest amount will come down, but depreciation will be high for a few quarters. This should help you in increasing your turnover from INR 1,000 crore a year to something about INR 1,500 crores. Is that fair? Yes. Absolutely. Our turnover, as I explained to one of the previous callers, and our volumes have gone up by 22%. As a result of the decline in raw material prices, overall, our realizations have come down by 30%. Therefore, it looks like our turnover has come down by 9%, which is true, but please don't look at our turnover only in terms of... You know, that will correct depending on our raw material prices and the business that we are in, where there is a huge volatility in turnover. Oh. Thank you so much. I hope that turnover and top line and bottom line will increase and help your shareholders will gain from it, from all your. Absolutely. Our endeavor is always to increase our bottom line. Top line will depend on what's happening with the raw material prices and the oil prices. B ut. Bottom line is more important. Absolutely. Bottom line is more important. That on, based on that, we get our dividend. Yes, absolutely, Mr. Pandya. Thank you. Thank you for that. Thank you. Thank you. The next question is from the line of Aditya from Securities Investment Management. Before that, I'd like to remind participants, if you have a question, please press star then 1. Thank you. Yeah, hi, sir. Thanks for the follow-up. In March quarter, we had a revenue of INR 255 crores, which was coming from our old facilities. Considering average 15% realization drop, we would have done INR 220 crores from old facilities. Would that mean we would have done around INR 55-60 crores coming from our new facilities? Would that be a correct understanding? I... Sorry, but I don't have the Q4 versus Q1 numbers with me right now. Yeah, it will be very similar, Aditya, because, you know, I, from what I recall, our volumes across the last were pretty much flat, because we were running at 100% capacity utilization for all of last year. Between Q1 and Q4 of FY23. In FY, in Q1 of FY24, we have gone up by 22% volume terms compared to Q1 of last year, corresponding quarter of last year. Sachin, would you have this number with you? What's our percentage growth compared to Q4? I mean, I would assume it's about the same, maybe a little higher or 24%. Sachin, are you there? Do you have it? Hello. Yes, I can hear you now. Yeah. for the increase in terms of... Sorry. What's the increase in terms of volume compared to Q4? It's in the same range. Same range. Yeah, that's what I thought. Yeah, it's in the same range. Okay. What I was trying to get at, was the revenue from our new facilities around INR 55-60 crores in this quarter? Let's talk in%. As we said, it's about the same. I don't have the numbers in front of me, and sorry about that, but I know it's a 20, 25% growth in volume. Sure. The new facility in Taloja, where our capacity is 30,000, we could have expanded that capacity, but we are waiting for some environmental clearing. Have we received the same? Sorry, say that again. Our Taloja facility. Yes. It was 30,000 metric tons for the nitrile latex, but we converted it to synthetic latex. We could have expanded that capacity by, I think, around 20,000-25,000 tons, but we are waiting for some environmental clearance for the same. No, no. It was about 10,000... Initially, when we invested, it was 10,000 tons of nitrile latex. When we realized the latex market was going to be challenging for a few quarters, and the demand for our current product really took us by surprise, especially exports. Therefore, we converted that facility while we were investing in a project last year to also manufacture our current products with styrene butadiene latex, styrene acrylic latex, and a capacity of about 35,000 tons. 10,000 became 35,000 tons. You are right, we had a permission to make up to 10,000 tons, which is what we have done for the in Q1. We expect the final to go above 10,000 tons. We expect that to happen in the next couple of months. We have been running that at about 10,000 tons full capacity, which is about 25%-30% capacity utilization, which is what we mentioned in the earlier. Is that clear? Got it, sir. Complicated, but I hope it's clear. Yeah, I got it, sir. Thanks. Thanks. Thank you. The next question is from the line Aatman Shah, an individual investor. Please go ahead. Yeah, hi, Abhiraj. My question is related to investments of shares which you have in your portfolio. Isn't it the right time to usually keep selling everything with the market also at an all-time high and we can use the money to reduce the debt or use it for more strategic purpose? I know. Sorry, Aatman, you were saying something, your last part of the Quest-. I can't hear you anymore. Yeah. Hello. Yeah. My question was related to the investments of shares, which you have in your in the balance sheet. With the stock market also at its all-time high and isn't it a good time to maybe gradually reduce the portfolio and use the money for your next leg of expansion, as well as use it to reduce the debt? Look, we debate this very often as well. There are a couple of ways to look at it. The way we have looked at it is, number one, we don't time the market. I mean, we never know. Our treasury is something that we keep on the side, and we invested about 70%-75% is equity, and about 25%-30% is debt, depending on, you know, obviously, recently there's been a run-up, so equity percentage has gone up. We will keep making those tweaks in terms of debt-equity ratio for our treasury. We have specifically taken a call to keep some amount in treasury. Today, the value of our treasury is INR 100 crore against the term loan that we have of about INR 125. We can immediately make the term loan close to zero and use our entire treasury. What we have found in the past is, you know, having some amount of a treasury fund is important, because there are times when, you know, even let's say, if you want to expand immediately into some other area, you know, banks will fund us only to a certain percentage. Some of the others have our internal accruals and our savings. For that reason, or sometimes there's an acquisition opportunity where you really have to put the money down on the table immediately. As a result of this, INR 100 crores in our current context of the company, total market capitalization, total revenue is, we feel a fair amount. At the right time, if we feel the treasury amount is much more than we would need, then we will tweak it, and we did. In the last few quarters, some of the treasury for some of our CapEx investments. Largely, we want to keep that strategically, and since we are long-term investors, we are not touching it. We try and maintain this ratio of about, you know, 70, 30 equity to equity and debt. Okay. Okay, fine. That's been the philosophy. Okay, okay. We don't time the market. We don't try and get in. No, no, my question was not about, more about timing. I'm saying, like, now that you've done this step, I'm sorry to good, why don't you come out of it? Not now that you have, like, you have a major X done, and you have a it also, and you spoke about next leg of expansion also, right? Three or four areas. That money not invested in the shares and just keep it liquid. Of course, repay a little bit debt will be more strategic and will be more helpful, right? There are different views, different investment philosophy. But yeah, at the right time, as and when we will do that, absolutely. If we require this, when we decide to go ahead with expansion or if there is an acquisition opportunity, we will use this cash immediately for it. Right. Okay, perfect. Yeah. I've also given an example, I don't know if you were there in my previous calls. One of the reasons why we seven years ago, when we acquired, you know, this plant or this company, one of the reasons was the company that was selling the, you know, selling, wanted to see if we had cash in hand. Okay. Okay. We said we did, and we literally closed the deal in 2 weeks because of that opportunity. Some of the other people who are eyeing that business could not because of that reason. Okay. Okay. There are strategic advantages which are hard to, you know, quantify in a year of but if you look at a long-term basis now, that investment has given us, you know, multiples of return, you know? Okay. We could only do that because we had the treasury at that time. Okay, fine. Yeah. Okay. Thank you. Yeah. Thank you very much, Aatman. Thank you. Yes. The next question is from the line of Parth Jhamtani from Anvil. Please go ahead. Yeah. Thanks for the opportunity again, sir. I just wanted to understand, like you mentioned, that exports form 31% of our total sales in one Q. If you can disclose the volume terms, like in terms of volumes, how it was. The breakup in terms of our domestic volumes as well as the export volumes in Q1. Domestic and export volumes. Export volumes overall, so we don't give volume numbers, as I said many times in the past. Yeah. Yeah, export volumes have grown by 110%. I think mentioned that in his opening remarks as well. That's fine. That I understand. In terms of our overall mix, let's say if we have sold 100 tons in Q1, which forms INR 278 crores of sales, how was the volume breakup in terms of the export as well as the domestic? Was export 22% in terms of the overall volumes which contributed. Okay. We have given 21%. 31% is in value terms. You want it in volume terms, what is the%? Okay, got it. We ready with you, what is it in terms of volume terms,% of revenue or% of total volume? Sorry, not% of revenue. Yeah. Okay. Okay. I can tell you, actually. Hang on, it's about one second. Sachin, you have that number, but I think it's about 35. Volume. Yeah. Is it? Yes. Yeah. Yeah. Yeah. Hello. Yeah, in volume terms, it's a little higher, 34%-35%. Okay. If you can share for FY 2023 as a whole, that would be very helpful, sir. You're asking difficult questions. Okay, I know I have all these numbers. Okay. FY 2023. FY 2023 would have been about 23. I mean, I think from what I recall, value terms, it was about 20%, 21%. Correct. Volume terms would have been 2, 3, 4% higher. 2, 3% higher. 24, 20%. Yeah. Got it. Again, I'm mentioning a guess, but this is what I get. Yeah. You have the numbers. Just a rough figure. Yeah, it's a rough figure, because the volume is a little bit higher than the value. Let's put it that way, generally, because of the product mix. Correct. Of export. Why I ask is, let's say if our volumes also are going in the export market with some higher realizations, that would probably take us our overall sales to 40%-45%, at that point of time, because then realizations depends upon our raw material prices also. It's better to track volumes rather than percentage sales. Yeah. at that point of time. Sure. Yeah. Okay. Thank you. Okay. Thank you. Thank you very much. Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference back to the management for any closing remarks. Thank you, everyone, for joining the Q1 conference call of Apcotex Industries Limited. We look forward to again seeing you in Q2. Just to summarize, I want to mention it's been a difficult quarter for us on 2, 3 fronts. Raw material price, sharply resulting in inventory losses, margins in some of our products, also falling sharply, irrespective of the raw material prices coming down. In general, it's been difficult, especially in NBR and to some extent in the paper industry as well, where we supply our binders or polymers there. In the long term, we continue to, you know, work on our targets. The silver lining is, of course, the 22% growth in volume. We're focusing on volumes and market share and increasing our geographic breadth and depth with each customer, and we look forward to seeing you again in Q2 now. Thank you. Thank you very much. On behalf of Apcotex Industries Limited, we conclude today's conference. Thank you all for joining. You may now disconnect your lines.