Ladies and gentlemen, good day and welcome to the Q1 FY25 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 an operator by pressing the star and zero on your touch-tone 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, and over to you, ma'am. Good evening, 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 2025. Before we begin, a quick cautionary statement. Some of the statements made in today's conference call may be forward-looking in nature. Such forward-looking statements are subject to risk 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. I would like to introduce you to the management participating with us in today's earnings call and hand it over to them for their opening remarks. We have with us Mr. Abhiraj Choksey, Managing Director, and Mr. Sachin Karwa, Chief Financial Officer. Without any delay, I request Mr. Sachin Karwa to start with his opening remarks. Thank you, and over to you, sir. Thank you, Purvangi. Good evening, everybody. It is a pleasure to welcome you all to the earnings conference call for the first quarter of financial year 2025. I hope you had an opportunity to review the financial statements and earnings presentation, which have been circulated and uploaded on the website and the public page. Let me provide you with a brief overview of financial performance for the fourth quarter of financial year 2024. Operating income for the quarter was INR 237 crore, which grew by around 21% year-on-year basis, with increased volumes, product mix, and better price realization. The EBITDA was reported around INR 32 crore and increased approximately 25% year-on-year basis. The EBITDA margin stood at 9.44%. The net profit after tax was at INR 14.8 crore, which grew by 22% on year-on-year basis, and tax margin stood at 4.4%. For operational funds, we achieved an impressive 14% year-on-year volume growth, while the international fund export volume grew by 12% year-on-year. With this now, I open the floor for question and answer sessions. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Ankit Kanodia from SmartSync Services. Please go ahead. Thank you for taking my question, and congratulations on your setup number. So my first question is related to our quarterly revenue run rate. So if I remember correctly, June 2022 quarter was the first quarter where we crossed INR 300 crore. And then we had some industry-related issues, and we had a rough time after that. Now we are back to about INR 300 crore in the last two quarters. Specifically, this quarter, I think we have done the highest quarterly revenue. But if I have to compare June 2022 quarter with this, both in terms of volume and value, if you can provide some more color as to which segments have done well and what in terms of volumes and value, that would be very helpful. That's my first question. Okay. Hi, Ankit. This is Abhiraj Choksey. Thanks for your question. So I don't have the June 2022 quarter numbers directly with me, but if I remember correctly, I mean, if I look at the financial year 2022,2023 and financial year 2021,2022, those years just post-COVID, there were certainly years where there was a lot of pull from the market, a lot of goods being bought that, of course, benefited us as well. And raw material prices, as a result, were higher as well. But going into 2023,2024 also, while the revenue figures may, I think for the whole year, were up only 4%, in 2023,2024 financial year, full year, compared to 2022,2023, our volumes were up by 28%. So 2022, I would not say in terms of revenue, I would say we did fantastically well in last year as well. Q1 of June quarter of FY 2023,2024 compared to the previous year, which I think you are referring to in the June quarter of the previous year, we also had very good growth in volumes. If I recollect, it's 25%-30%. But overall, the raw material prices and therefore the finished goods prices were quite muted. And yeah, margins were definitely under pressure last year and to some extent continued to be even currently for various reasons. So I would say, I think from a revenue and volume perspective, we're quite happy with where we are. And yes, comparing last year is not really fair because of the really muted prices of all our goods. I hope that kind of answers your question. Yeah, yeah. So just one more question related to that. If you can share segment-wise performance as to how all the segments are doing currently compared to, say, June 2023 quarter? Again, I don't. Sorry, but I don't have the June. I mean, we were ready with the last year's figures, but again. No, I'm talking about last year's figure only, June 2023 and June 2024. Sorry, say that again. I'm saying June 2023 quarter versus June 2024 quarter. Not June 2024? You don't want to talk about the June 2024 quarter? Obviously, June 2024 versus June 2023. That is what I'm asking. Oh, you asked June 2022. Earlier, I asked about 2022. Now I'm asking about the performance of different segments. So almost across the board, we have had growth in June quarter, largely led by paper and construction as well as tire cord. So those are the three large ones that, I mean, in terms of growth, those were the highest figures. But overall, it's been a good growth segment in terms of volumes. I think we are up, Sachin, by about 14% this quarter. Yes, we are up by 14%. Yeah. So Q1 against Q1 of last year, volume growth is up by 14%. Is it correct to argue that the margin is taking a hit mainly because of the glove segment, where probably we are getting good volumes, but the margin is getting hit? Yeah, for sure. That is one of the reasons. But as you would see, compared to Q4, in terms of overall EBITDA per ton, I think we have done a little better than Q4 of last year. And compared to Q1 of last year also, if you see, our margins are certainly better, right? Again, Sachin, if you can correct me if I'm wrong, but. No, you are right. Absolutely. So compared to. EBITDA is up by 23%. Yes. Yeah. You're saying something, Sachin. Yeah, no. So implementing to what you were saying. Right. Okay. So would it again fair to argue that we are close to bottom in terms of margin, which we are trading at right now, 9% EBITDA margin? Yes. I mean, difficult to exactly predict, of course, but there are two, as I always said, there are two numbers. One is EBITDA percentage margin, there's EBITDA per ton. So EBITDA per ton is, of course, better in this quarter compared to Q4 of last year as well as Q1 of last year. EBITDA percentage is around 10%. So there, of course, last year, the overall price revenue or prices per goods were lower, so that helped us in terms of percentage. But both are important numbers, of course. And as I've said before, look, I do think that the margins for this business can be 14%, 15%, 14%, 15%, 16%. We have achieved that in the past. And as the volumes grow, that should happen again in the future. Of course, the glove segment is pulling it down. A couple of other segments also, we have built capacity. Some of our competitors have built capacity. That is, in the short term, all sort of industries go through this cycle. I think the chemical industry is going through a cycle of lower margins. I would not say terrible margins, but lower margins in general for most chemical companies that I've been watching. So I think we are in the same boat. Yeah. One last question related to ApcoBuild. Any color you want to highlight on that? How is it going this quarter? Yeah. I mean, it continues to do well. I think in terms of quarterly, again, we've grown at double digits. Perhaps I don't remember the exact number, but about 12%-14% is what I recall we've grown at for the quarter. Yeah. Sir, one question not related to the result. Our Q4 presentation was very detailed, and it was very useful for us. Any reason why you kept a very short presentation for Q1? In what way? Detailed? Like what specific? You talked about different products which you have, process, your strengths, your basically future strategy, CapEx-related details. It was a 2024. A lot of it is quarter-over-quarter, doesn't change. Since it was the annual presentation, we perhaps have given more details, of course. That's the only reason. Because a lot of these things quarter-over-quarter doesn't involve us. Perhaps nothing much to add therefore. It's a shorter presentation for this quarter. Yeah. That's it from my side. I'll come back in the Q4 questions. Thank you so much. Thank you. Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. Ladies and gentlemen, if you wish to ask a question, you may press star and one. The next question is from the line of Chandpal Singh, an individual investor. Please go ahead. Hello. Am I audible? Hello. Yes, sir. Yes, sir. Go ahead. You're audible. Hi, Abhiraj. This is Chandpal. Abhiraj, my question is regarding ApcoBuild. What advantages do we have in case of ApcoBuild products in the market? Look, I've said this before that we are focusing on certain niche products where we have certain advantages. For example, we're backward integrated in some polymer products. And then we're building, or we have built a product range around those products that we really have an advantage of. And we're focusing on the states that we understand well and are closer to us. So we are in four or five, five or six states that we're growing further in and deepening our reach. Thank you. Can I know how many competitors of these products are there in the market in India who can make these products? Look, you're talking about the construction chemical B2C segment, right? Yes, yes, yes. Look, the B2C segment has lots of different kinds of products from solids to powders to liquids, grouts, all kinds of seals, all kinds of products, tiling, adhesives, and so on. So I mean, there are hundreds and hundreds of different companies and many companies as well competing. Different companies have been focusing on their own strategy. Some companies are focusing in certain states. Some companies are focusing on the retail segment. Some companies are focusing on the B2B segment. Some are with the government and infrastructure segment. Similarly, some companies are focusing on waterproofing only. We are largely a waterproofing. Our strength is waterproofing. So I think it would be wise for you to sort of learn more about this industry through sort of there are a few industry handbooks and so on that you can look at. Okay. Okay. Thank you. Thank you. And Abhiraj, some light on the Valia project, how it's performing? Yeah. I mean, look, Valia, you're talking about the Valia acquisition overall that eight years ago or? Not acquisition, the new project that you started last year. Yeah. The new project that was on, so again, just to recall, there were two projects that we invested in last year. About INR 150 crores in Valia, INR 150-INR 160 crores in Valia for the gloves project and another INR 50 crores in Taloja to expand our current product lines of Styrene Butadiene and other latexes. The gloves project, in terms of volumes, is not an issue. We've done reasonably well. We are now confident of by now, we had expected to get to close to 100% capacity utilization, but we are at about 50%-60% capacity utilization. We can go more, but the margins were very low. So we were only focusing on certain customers. So going forward, we do expect capacity utilization to be in the range of 50%-70% for the next couple of quarters. So from a revenue perspective and a sales perspective, it's gone well. But from a margin perspective, given what happened post-COVID, there was a huge additional capacity of or additional inventory of gloves that was created, a lot of additional capacities of gloves and nitrile latex that was added all over the world, especially in Asia, actually, largely in Asia, as a result of which margins have been very muted, and therefore, I would say, yeah. Is the project EBITDA positive or not? Gloves project. No, it's about EBITDA neutral, I would say. Some quarters negative, some quarters positive, but overall, EBITDA sort of zero EBITDA neutral, yeah. But EBITDA break-even, rather, is the better word. Okay. Thank you, Abhiraj. Thank you. Thanks for. But we do expect I mean, we're seeing some green shoots. I mentioned it last quarter also. We saw initially some green shoots, and Q1 was slightly better than Q4 of last year. But Q2 is expected to be even better. We're seeing capacity utilizations go up, even though they're nowhere close to what they were pre-COVID. Prices of gloves go up. So we are seeing better traction in the glove industry. Some of the glove manufacturers, some of our customers who were in the red have sort of started making some profits in the last few months. So some good signs are there, but it may be a little early to expect immediate turnaround. Okay. Okay. Thank you. Thanks a lot. Thank you. The next question is from the line of Nikhil from SIMPL. Please go ahead. Yeah. Hi. Good afternoon. Am I audible? Yes. Go ahead, Nikhil. Yeah. Hi. Hi, Abhiraj. Congrats on a good volume growth, which we have seen. One question. You mentioned during the call that our volume growth was 14%. So rest is the price increase. So is it because of RM increase, or is it because of the natural price increase for the products? If you can just highlight that. Yeah. I think RM increase, of course, had a significant part to play in that. Yes. Okay. And on the capacity utilization, because what we've seen is during this whole last six quarters, while the prices have been weak, we've done a good job on the volume growth. So versus last year and today, how would our capacity utilization be at different plant levels? Yeah. So I'll explain to you in three different plant levels. One is our in FY 2022,2023, we were at full capacity utilization for our current plant capacities then. We added two plants, one in Valia, one in Taloja. The Valia plant was largely for nitrile latex for gloves. And that is now running at about 50% capacity utilization, about a year after we have commissioned it. And we expect over the next one or two quarters to move to 65%, 60%. As far as the Taloja plant is concerned, the additional capacity that we created, there we are running last quarter at about 70% capacity utilization. And we expect to go to 100% over the next one year, one year to 15 months. Okay. Last question from my side. See, the pain point had been on the gloves. If you can just talk about the global, how are you looking at the overall scenario, and what's your reading of how things are playing out now? Yeah. I just mentioned to the previous call, but I'll kind of repeat it again, that I think the glove industry things have improved in the last few months. I'm talking about the glove industry, but because from what we see, some of the glove manufacturers have improved their selling prices, improved their volumes. From the red, they've moved to at least making some profits. However, a lot of capacities have been added. Now the issue is both glove capacities and latex capacities have been added, especially in China. So as a result of it, overall, the capacity utilization is still quite low. Therefore, margins are quite muted for both the glove industry as well as us, the raw materials, which is nitrile latex gloves. We expect that to keep improving as time goes along. And we expect in the next few quarters, margins to keep improving. We are focusing, as I said, on volumes. Last year, we had a 28% growth. On On the back of that, we have had an additional 14% growth in Q1 of this year. So if you just compare us to one and a half years ago, we have grown by in terms of volumes, we are like 40%-45% higher than where we were just a year and a half ago. Okay. And just lastly, see, there was a point on latex Chinese presence and the capacity which they have added. Are you hearing any capacity shutdowns, or are they sustaining at these prices? And an additional point, see, what I understand is that U.S. has also put some duties on Chinese gloves and all, which most people are talking about should help the non-Chinese players. So how does it impact us as a supplier of latex? Yeah. So look, as a latex supplier for us, the main market is Southeast Asia, India, Sri Lanka, and South Asia, basically. So obviously, the duty is going to come in in 2026. While the U.S. has announced it, it doesn't get implemented till 2026. I forget the exact month, but it's at least one year and a half to two away. Having said that, at some point towards the end of 2025 or next year, obviously, people will start moving back towards Southeast Asian suppliers versus Chinese suppliers, given the high duty that the U.S. has imposed on Chinese gloves. So that will help us, help our customers, and therefore help us, but it's a little while away. The second question you asked, whether there were some capacities that are being closed down, and yes, that's also true. One of the manufacturers of nitrile latex has already shut down one of their old plants in Malaysia recently, in the last few months. Another Japanese player has announced that in 2026, they are going to shut down their nitrile latex. Again, old capacity, perhaps the costs were not suiting them in terms of their cost curve. The older plants are shutting down. However, we have not heard of any shutdown in China because a lot of the plants are brand new as well, right, like ours in the last couple of years. There's no additional capacity coming. Thanks a lot for the sure. Thanks a lot. I'll call back in a bit. Thank you. Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Ankit Kanodia from SmartSync Services. Please go ahead. Thank you for allowing the call. If I look at our asset turnover, also, it is probably at all-time lows. I've never seen in the last seven-eight years we've been seeing that kind of low in terms of asset turnover. And based on what you just shared with the previous participants also, so as we expect the volumes to increase, can we expect this to rise up to 4x or 5x? Right now, we are 2.3x. Yeah. Yeah. Absolutely. Because look, when you first invest, and that's true of asset turnover, return on capital, because our company has taken up a substantial CapEx last year, obviously, that INR 200-INR 250 crores has got added literally overnight. So the denominator has gone up overnight. So therefore, asset turnover has dropped overnight. Now, over time, two things happen. One is the assets depreciate, so the overall assets come down in terms of the denominator reduces, and the volumes will keep going up as we move towards 100% capacity utilization. So again, asset turnover will go back up to four and five. Thank you so much. That was very good. Thanks. Thank you. A reminder to all participants that you may press star and one to ask a question. Ladies and gentlemen, if you wish to ask a question to the management, you may press star and one. The next question is from the line of Om Prakash, an individual investor. Please go ahead. [Foreign language] [Foreign language [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] Thank you .Thank you. A reminder to all participants that you may press star and one to ask a question. Ladies and gentlemen, if you wish to ask a question, you may press star and one. The next question is from the line of Manav Vijay from MV Investments. Please go ahead. Yes. Thank you very much. I'll just ask a few questions from my side. So first, if you can just tell us the volume growth on a quarter-over-quarter basis, because 14% I believe is on the YoY. You mean Q4 against Q1? Correct. Okay. Sachin, would you have that? Yeah. It's almost flat. We are almost 0.3%-0.4% growth. It's flat volume growth compared to Q4. Okay. So that means whatever, let's say, 7%-8% difference that you have, let's say compared to last year YoY or even quarter-on-quarter, that is all price-driven at the current? No. Quarter-over-quarter, yes. YoY, no. Quarter-over-quarter, it's all price-driven. Year-over-year, it's 14% on volume and the rest on price. Correct. Okay. Okay. Second thing, Abhiraj, in last few weeks or I would say months, we have been hearing about the availability of containers and also these freight rates, again, playing havoc. So is that also impacting your exports as well? Because exports for you form a decent part of total top line now. Yeah. You're absolutely right, Manav. Good question. And it has become a bigger challenge. Of course, it started a few months ago, but certainly in the last quarter, we would have at least another 2%-3% higher sales or higher volume sales had it not been for these delays in export consignments. A lot of our consignments that were going to Malaysia or Thailand actually got rerouted because of the huge congestion in Singapore got rerouted to Shanghai, and then we had to come back. So everything was delayed. It is a challenge for sure. We're trying to work through it. 30% of our sales continues to be export even in Q1. So at least we didn't lose out on it. In fact, we grew our export sales in Q1 also. It is a challenge, but I mean, it's a short to medium-term challenge because what we have done is, of course, we've got approvals and all these new customers. We're continuing to do business with them. These kinds of issues do cause delays. But a lot of the countries that we export to are also importing, whether it's from India or it's from another country. So it's a global phenomenon, right? right now, whether you're importing from Europe or importing from China or any other country or Korea. I think it's a challenge that all companies will face. We've seen that impact our margins as well to some extent because we've had to absorb some of those late costs. Of course, we try and pass it along as well, but it takes time sometimes. So yes, but on the flip side, it may in the medium term also help some of our businesses like NBR because since we are the only manufacturer of NBR in the country, NBR coming into India, the freight rates are also high now. So we'll see how that plays out, but I mean, in the long run, it's not such a big issue. We've seen it during COVID as well, right? It was much worse at that time in 2021, I would say. Correct. So that was my second question. So if the exports are a challenge, so I believe the same thing applies even to import as well. So even on the import side, are you seeing any kind of ease for you or not, specifically on the NBR side? We're seeing some amount, but not significant yet. I think just in the last month or two, month, month and a half, I would say it's become really difficult now, almost going back towards the difficulty in getting earlier, the rates went up, but availability was still not a problem. I would say only in the last month, we're seeing availability is also a problem. So we'll have to wait and watch for a month or two, and maybe things will take care of itself. I'm not sure. Hard to predict when. Look, but on the flip side, raw materials is also a problem, right? We have had to now, again, go back to higher raw material inventory norms, especially for imported raw materials. So I think we're waiting and watching. Not really 100% sure of how it will impact the company. Short term, there might be some positive and some negative impacts. I think in the long term, it's okay this happens from time to time. Okay. Last question from my side. So in your annual report, you mentioned that the estimated capacity in Valia will, so we're actually increasing from 50,000-80,000 tons. So has that decision taken, or you are still, let's say, waiting for things to improve before you execute the second phase? No. 100%, we're not taking any decision. Given the margins where they are, I think we'll wait for some time. In fact, what we're thinking of doing is we expect our capacity in Taloja to be completely utilized by the end of next year. So we may actually use that space where we had left some space for the additional capacity for nitrile latex. We may actually use it to manufacture our current styrene butadiene and other current latex products. Okay. That decision will be taken in the next three-six months, and we'll keep you posted. Okay. But the earlier thought process of converting some of the existing latex capacity to the other latex that you made, that process, so I would say that thought process, as of now, is not in a working mode? I mean, it's still an option. We haven't decided yet. As I said, we have enough excess capacity of styrene butadiene and latex capacity in Taloja. So I think in the next three-six months, we'll take a call. Sure. Thank you and all the best. Thanks, Manav. Thank you. The next question is from the line of Rohit from ithought PMS. Please go ahead. Good afternoon, sir. Sir, my question was that in this quarter, could you share the split between the sales from nitrile latex and non-nitrile latex segment? We don't typically give this data by, but I can actually, Sachin, do you have broadly revenue percentage numbers for nitrile latex versus non-nitrile latex? But I mean, my guess would be nitrile latex would be about 10%-15%, around 10%-15% of the total sales, maybe even less, around 10%. Yeah. Okay. Got it. Sure, sir. So my question was, I mean, you mentioned that nitrile latex has been obviously going through a tough period and is now closer to breakeven or slightly below breakeven. But even if I look at the non-nitrile latex, it has been a traditional business. There also, I think, margins have still not come back to, let's say, 13%-14%. Is that a fair assessment, or am I reading it wrong? Yeah. I think there are two other areas of business where margins have sort of come down. Mainly, one is on paper. The latex we make for paper, and that's because both us and BASF have added more or our competitor has added more capacity over the last year or two. So that we are going through a cycle, I think things will improve. The other is NBR. Over the last year, 14, 15 months, we've seen NBR margins being lower than what we have seen in the past, what I would say is the average over the last six, seven years. So that's been another challenge. And I think the main reason for that is China. Because of the China slowdown, which is the largest NBR consumer, two reasons actually. China slowdown being the largest NBR consumer. So a lot of the exports going into China or China imports have sort of made its way into India. And the other reason is also Russia. The Russia NBR, which used to largely go to Europe because of the sanctions, are now finding its way towards Asia. So I think there's a little bit of a glut of NBR in the Asian region causing the margins to be muted. However, since we are the only manufacturer in India, we continue to run at 100% capacity utilization for this NBR business. But margins have been lower than the average, I would say, over the previous seven years that we have run this business. Got it. So that's very useful. Those are two other reasons why margins are a little lower in the rest of the business. Got it. And after Nitrile Latex, you— But I just wanted to—no, let me finish the question. Sorry, Sachin. But I just wanted to say that, look, these cycles continue, and we see that we've seen this in the past. When When capacities are added for a year or two, margins are at an all-time low, and then not all-time low, but they get lower, and then they go higher up. And as that capacity utilization and total volumes go up, the margins will go up in this wave fashion. So this is what I suspect. So earlier, we used to be in the 6%-10% range. Now we're in the 10%-15% range. And so we'll perhaps, over the next four, five years, I expect that you'd see us at the 13%-17% range. This is how I think things will happen as long as we keep growing and growing at a reasonable margin. Yeah. We can move to the next question. Okay. The next question is from the line of Karan. Please go ahead. Hi. Thank you for the opportunity. This is Karan from Asian Market Securities. Abhiraj, just some clarification. This 14% volume growth YoY. So in this quarter, we'll have NBR latex contribution as well. So can I have a like-for-like comparison Q1 to Q1 ex-NBR? I don't have that with me, but I would suspect that, I mean, overall, do you have these numbers, Sachin, with you? Not including export nitrile latex, right? Not including nitrile latex, what the growth was for, I think it'll be similar, right? Yeah. Because it's almost in the same range. Yeah. Same range. Okay. Okay. And Abhiraj, any clarity on the NBR CapEx? It's on the. No clarity. Unfortunately, while we were going to take a decision last year, the margins have been, as I just mentioned to the previous caller, the margins have been challenging for two reasons: with Russia NBR as well as overall Chinese slowdown. So at this stage, I don't think it justifies for us to make an investment in NBR. I think if we see some longer-term viability, we'll look into it. It's still not a bad investment, but I just feel like, or we feel as a board as well and senior management of our team feels that there could be better opportunities to invest in. So we're just waiting and watching. We are at 100% capacity utilization. We would love to grow, and given the Atmanirbhar Bharat of the government, this would really help India also with reducing the imports of NBR because even currently, around 70 or more than 70% of NBR is being imported in the country. So we would love to do that, but given the current CapEx costs, it was not working out to be viable. I think in the next year or so, we'll see if it makes sense. Right. Right. I've got one more question. Do I go ahead or I apologize you? No, go ahead. Finish your question if you want. While we've seen selling prices move up quarter-on-quarter while the volume growth was flat, so in this 9.5%, what percentage could be the inventory gain if at all? Sorry, can you repeat the question? I'm not sure if I understood it. I'm saying while the volume growth was flat QOQ, there were price increases. So correct to assume we have some inventory gains in the quarter and hence this 9.5% kind of margin profile? No, I mean, the margins are very similar compared to last quarter, so there has been no inventory gain as such. Okay. Cool. Thank you. That's good. Nothing significant. Yeah. Thank you. Thank you. The next question is from the line of Jasdeep Walia from Clockvine Capital. Please go ahead. Hi, sir. Thanks for taking my question. Sir, could you give us your thoughts on the demand-supply balance in nitrile latex you see going forward? So, I would guess the higher inventory situation in this product would have been taken care of. So, can we expect the growth to accelerate from here? And mentioned we should that result into better margins going forward? Yeah. Look, I think there's two things, right? One is the inventory of gloves and inventory of latex. Inventory of latex is not ever a problem. You can't store latex for very long. It's difficult. It's 50%-55% water and so on. So the issue was with inventory of gloves, which, as you said, is directly said is from all reports being utilized or come to an end now. Now the issue is mainly the additional capacity of gloves and latex that was put up. And so the capacity utilization at maybe 50%-60% is what we are hearing. As it goes, but the market growth is still there, double-digit market growth for gloves and therefore latex. So as it goes up to 75%-80%, again, margins should look fairly healthy is what we think. Your economics should be independent of the capacity utilization of the industry, right? The volumes of Nitrile Latex gloves are growing, which means demand for Nitrile Latex is growing, which should—that's the variable that should impact you rather than the capacity utilization of the glove manufacturer. Well, there are two things, right? So one is the volumes and the revenue. And you're right. Volume revenue is totally up to us. We have a small capacity compared to the global capacity of Nitrile Latex, and that should not be a problem. The issue is margins. So when an industry is running at a low capacity utilization, automatically margins are muted because buyers are able to negotiate harder, right? And sellers are wanting to sell their capacities. So the margins is what is the main issue with lower capacity utilization. Got it, sir. And have you seen some fresh competition in nitrile latex? In a sense, newer companies which have put large capacities in nitrile latex. I'm talking about the latex, not the gloves. Yeah. No, it's generally been the players, at least out of China—not including China. Outside of China, it's largely been players that have already been established, and they have created additional capacity. So there have not been new players that have got into this business. As far as China is concerned, I think a couple of glove manufacturers integrate sort of did a backward integration project when their glove demand was so high, and they were running short of material. So they decided, or China decided to, or some of the large players decided to make sure that they were at least largely not dependent on imports for nitrile latex. So that's how in China, capacities were definitely created. Does China remain a net importer of this product, or? Yes. They still remain the net importer. Got it, sir. Got it. So you don't see any international conflict in? Mr. Jasdeep, could you? Let him finish if there's one more question. Jasdeep can finish. Go ahead, Jasdeep. Broadly, what I've got is that broadly, you don't expect much improvement in the margins in this business going forward. No. That's not what we're saying. We're saying margins will improve slowly. In fact, we're already seeing margins in Q1 have been marginally better than Q4, for example. We expect Q2 to be marginally better than Q1. Now, whether they'll go back to the pre-COVID levels or when they will go back to the pre-COVID levels is where we are not sure. Got it. This is a spiny question on your CapEx plans for fiscal year 2025. Yes. So as of now, the main CapEx that we have so far that we have approved have been either projects that are going to help us cut operating costs or maintenance projects. Those are the two main things that we have done. But we have a couple of other projects that we're looking at. One is a complete overhaul of our R&D center, so that will require some CapEx, and we're planning to build a new R&D building and invest in our R&D. I know it's a little bit counterproductive and not counterintuitive, but we think this is a great time to invest in R&D, and we have a great set of people, and we've built our team, so to speak, over the last year, year and a half under a new chief of R&D. But we think that given that the company is 40 years old, we have two R&D centers. We want to consolidate a little bit and have a new building in one of our facilities in Taloja, in our facility in Taloja itself. So that's going to be one investment that's going to be made. I will announce it at the right time in terms of the value and how much we're going to invest. And the second investment, which we will announce again in the next three-six months, is additional investment for our Styrene Butadiene latex products because we expect that capacity to be utilized by end of next year. So we will have to start working on that because the lead time is typically a year to complete that project. Got it, sir. Thank you. Thank you. Thank you. Thank you. The you. The next question is from the line of Sukhbir Singh from SMIFS Limited. Please go ahead. Thank you, sir, for the opportunity. My first question is, sir, is there any anti-dumping duty applied by the Indian players for the NBR? There is not. In the current context, there is no anti-dumping duty that's applicable. Okay. Okay. Sir, and sir, for the ApcoBuild business, what is the contribution of in the revenue? Again, something that we don't talk about, but it's quite small in terms of revenue. Can I assume? As in when it gets a little significant, we will, of course, report it. Okay. Okay, sir. Thank you so much. Thank you. Thank you. As there are no further questions from the participants, I would now like to hand the conference over to the management for their closing comments. Sachin, would you like to take the closing comment? Yeah. S thank you, Mr. Ram, and Mr. John. Sorry to interrupt, sir. There's a question in the queue. It's from the line of Avinash Nahata from Parami Financial Services. Please go ahead. Yeah. Hi. Thanks for the opportunity. What does steep hike in natural rubber prices do to our products if it happens within a short period of time? That's my question. Nowadays, I don't think there is any large impact either way because we don't really compete with natural rubber at all in any of our products. If at all, sometimes we do find that on the latex side because natural rubber also includes natural latex, right? On the latex side, there are some applications that can move from natural latex to synthetic latex, and that's when Styrene Butadiene Latex comes in. So there can be an advantage depending on the relative pricing, but it has to be significant and long-term for those customers to move completely. So they typically see if they estimate the next six months, natural latex prices are going to be 20% higher than synthetic latex prices. That's when they will move. So it may have a marginal advantage to us if natural latex prices are higher. Natural rubber, not so much. Not so much of an impact. Okay. I mean, how fast they can switch between the two products you spoke about, synthetic latex and natural latex? Yeah. They can switch. I mean, it doesn't take time, but sometimes the whole process needs to be changed. Again, the formulations need to be changed. So people wouldn't do it typically for a couple of months. Okay. Yeah. Thanks. Thank you. Thank you, Avinash. Was that the last question? Yes, sir. That was the last question for today. You can go ahead with your closing comments. Thank you very much.