Ladies and gentlemen, good day and welcome to the Q4 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 star, then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Nupur Jainkunia from Valorem Advisors. Thank you and over to you, ma'am. Thank you. Good afternoon, everyone, and a warm welcome to you all. My name is Nupur Jainkunia 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 fourth quarter and 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 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 the management for their opening remarks. We have with us Mr. Abhiraj Choksey, Vice Chairman and Managing Director, and Mr. Sachin Karwa, Chief Financial Officer of the company. Without any further delay, I request Mr. Sachin Karwa to start with his opening remarks. Thank you and over to you, sir. Thank you, Nupur. Good afternoon, everyone. It is a pleasure to welcome you all to the earnings conference call for the fourth quarter of financial year 2025. I hope you had an opportunity to review the financial statements and earnings presentations, which have been circulated and uploaded on the website and the stock exchanges. Let me provide you with a brief overview of the financial performance for the fourth quarter and financial year 31 March 2025. The operating income for Q4 stood at INR 349 crore, reflecting a year-on-year growth of 12.5%. This performance was supported by highest-ever quarterly volume and export volume, which grew by 15% and 22% respectively on year-on-year basis. EBITDA came at INR 39 crore, marking a robust 23% growth, primarily given the higher volumes and improved capacity utilization. Consequently, the EBITDA margin improved to 11%, up from 10% in Q4 FY 2024 and significantly higher than 7.63% in Q3 FY 2025. Profit after tax stood at INR 17 crore, an increase of 10% on year-on-year and a strong 44.8% growth on a sequential basis. The PAT margin for quarter stood at 4.81%. This performance highlights a positive trend in profitability, supported by operational efficiencies and improved capacity utilization. Now, coming to the financial performance for the year ended 31st March 2025, the revenue from operation increased by 24% on year-on-year basis to INR 1,392 crore. The company achieved strong operational revenue growth. This growth was driven by a 16% rise in overall volume and a 24% increase in export volume, further supported by enhanced product mix and better price realization. EBITDA was at INR 125 crore, which increased by 9.5% on year-on-year basis. EBITDA margin stood at 9%. The profit after tax stood at INR 54 crore, with a PAT margin of 3.89%. Cash profit for the year has increased by INR 10.3 crore to INR 95.6 crore. With this, I open the floor for question and answer session. Thank you. Thank you, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. 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 comes from the line of Dikshant Gupta from Geojit PMS. Please go ahead. Thank you. Good afternoon. So my first question would be, can you provide a mix of the revenue from various sectors like latex and rubber? Overall for the year, I think, yeah, good afternoon, Mr. Gupta. Overall for the year, I think we are at about six, 2/3, a little over 2/3 is the latex segment. Obviously, our last chunk of the growth over the last couple of years has come from the latex segment since the investments were there. So it is about 2/3 latex and 1/3 rubber, approximately. Okay. Going forward, will you be focusing on expanding the latex segment more or the rubber segment more? I think we're making a plan to expand both. In the rubber segment, specifically for NBR, nitrile butadiene rubber. As I've mentioned before, we are sort of waiting on the anti-dumping investigation final conclusions before taking a call and going ahead with it. That project is ready, and we're quite hopeful that we'll be able to expand there. In the latex segment, of course, we would be expanding. What is the capacity utilization, and how much capacity are you planning to add every year? For last year on the NBR side, we were almost at 100%. I want to say about 95%-96% capacity utilization, so close to 100%. On the latex side, for the new Nitrile latex project, we are at about 75% plus now. I am talking about monthly run rate. For the year as a whole, we were lower, of course, but Q4 we were at about 75%-80%, between 75% and 80%. There, we probably have another year or two left, but there margins is an issue. As far as the other latex business is concerned, most of those latexes are manufactured in a Kaloja plant. There we are at about 80%-82% capacity utilization. There again, in the next year and a half, we suspect we will need more capacity. Okay. My next question would be, as the crude oil prices are falling, will it be beneficial to you, and will it improve the margins further? See, historically, we have seen in the short term, it's not so beneficial because when prices fall so sharply, we are left with some inventory, both finished goods and raw materials. That's going to be a challenge really this quarter in Q1 because, as you've seen, that compared to March end to now, crude oil has really fallen around. I think it's about Brent crude is almost $60, a little over that, but around that, versus it was over $80 perhaps a couple of months ago. In the long term, of course, I think we all prefer lower oil prices. It does help. We are more concerned more about the margins. Okay. Okay. My final question would be, are your sales, like as your customer base, diversified or is it dependent on one or two customers? No, not at all. We have a very diversified customer base. In fact, I do not think we have any one customer with more than 2%-3% total sales. Okay. Okay. Thank you so much and all the best. Thank you. Participants, please restrict yourselves to two questions. If you have any more questions, kindly rejoin the queue. The next question comes from the line of Aditya Khetan from SMIFS Institution Equities. Please go ahead. Yeah, thank you, sir, for the opportunity. Sir, with the lowering of crude prices, sir, earlier we had seen a trend that whenever crude prices go down, we always book some inventory losses. In this quarter, sir, there have been some benefits on inventory despite crude oil prices declining. How should we look at this, sir? Sir, Q4 was a little strange. Actually, the prices went up between December and February and then came down sharply in March. Overall, you are right. There has been a slight benefit for the quarter, but the sharp decline was in March, April. I do not know if that answers your question, but yeah, there was a slight benefit this time. Generally, we see in a quarter, there is a general sort of increase and then decrease, but we did not have a clear trend this time. We did benefit slightly. Got it. Got it. Okay. Sir, this sequential dip in top line, I believe, sir, our volume from Nitrile latex is improving. Ideally, the price reduction should have happened in the base business, which is why our top line has declined. That's right. Because volumes sequentially are up by just one second. We'll give you the data, but volumes sequentially are, I think, up by 9%. Okay. So the decline is largely dip in the realizations in the base business? Yes, that's right. Okay. Sir, just one last question onto the Nitrile latex. Earlier, sir, we had given a guidance that we would be touching around INR 600 crore of revenue. Is that guidance still intact? Yeah, I think that INR 600 crore, if I recall, was at 80,000 tons. At 50,000 tons, we would be closer to sort of INR 400-INR 450 crore. So what's the investment done so far? We have left a small investment for later, which we would only do if the margins improve. Right now, the Nitrile latex business, we expect to be about somewhere between INR 400-INR 450 crore, depending on the price of the latex. Sir, what would be the top line contribution in SIP? I'm sorry to interrupt, Aditya. Those were two questions. If you have any more, please fall back in the queue. Maybe we can let him complete. Yes, I'd request just to give everyone a chance. I'm sorry, Aditya, but just to give everyone a chance. However, since you started the question, why don't you complete it and we'll close that? Sure, sir. Sir, I was asking on SI25, so what would be the contribution from the Nitrile latex? In terms of revenue? Yes, sir. It's about 14% or so. 14%-15%. Oh, thank you. Thank you. The next question comes from the line of Rudraksh Raheja from ithoughtpms. Please go ahead. Yeah. Thanks for the opportunity. My first question is, sir, could you help us understand what led to this major expansion in gross margins for quarter four of SI25? Can we assume that we have bottomed out and recovery should start from here onward? Yeah, there were a couple of reasons. One is overall, we saw improvement in Nitrile latex margins, which were very low. The second was in general, in Q4, we did see slight improvement in margins across the board as well. One of the reasons was there was some January and February prices went up, and we were able to do some great buying. There certainly has been some benefit to that as well. A combination of two, three reasons. The fourth reason is also volume going up. As volume goes up, margins overall go up as well, EBITDA margins. These are the three, four reasons. Obviously, there has been one big change, which is compared to Q4 and Q1. Coming to the second part of your question, whether that has bottomed out or not. I think, look, that was our hope. Given these tariffs, the U.S. tariffs and the uncertainty around that issue, what we are seeing in the market is a lot of uncertainty from some of our businesses that are more U.S.-focused. For example, we are not directly, we do not have much exposure to the U.S., but indirectly, some of our customers have exposure to the U.S. They export to the U.S., and obviously, they are affected in these uncertain times. Obviously, the duties, except for China, the duties worldwide is now 10% into the U.S. Given the uncertainty, and that could change again in June, right, after 90 days, sorry, in July, after 90 days. I think there is a lot of uncertainty. In Q1, at least, and Q2, perhaps this U.S. situation may create a lot of uncertainty in the world for some of our customers. Directly, so far, at least in Q1, we haven't seen our business affected too much, but the outlook is, the best word I can use is uncertain. Got it, sir. Sir, on the CapEx front, if the current trajectory continues, we will run out of capacity, as we have acknowledged as well. Can you share more details on the CapEx? Yeah, we'll run out of, so we expect that, again, as I said, we'll wait and watch. Of course, we are making multiple plans for further expansion of our current product range, which is NBR, starting butadiene latexes, starting acrylic latexes, and Nitrile latex. We will not be expanding immediately. We'll probably wait a year or two, depending on how the margins play out. The plans are on, and we expect we'll be okay till perhaps middle of next financial year. So we should have enough capacity. Got it. Got it, sir. I'll come back in the queue. We will be sort of informing our investors about our CapEx plans once they are firmed up and approved by the board. Understood. Okay. Thank you. The next question comes from the line of Sani Vishe from Axis Securities. Please go ahead. Yeah. Thank you. Good afternoon, sir. Coming onto the answer that you gave earlier, participants, margin increments are driven by multiple factors. Besides volume, I think that most of the factors are similar. Are we saying that our margins will keep varying depending on external factors, or is there something that we are doing to improve the margins on a steady basis? Sir, so one is, of course, we are growing volumes. That will obviously, as you said, expand margins. There are a few other plans as well to kind of reduce costs, which are ongoing. However, yes, external factors, especially in the Nitrile latex business, which has pulled down the margin overall for the year and for the quarter as well, although there has been an improvement in Q4, there is that external factor. There are external factors right now. Over time, the other external, I do not know if I would call it an external factor, but the whole industry added a lot of capacity just post-COVID. Now, in the last two years, there has not been any major capacity expansion in any of the latex businesses. When the capacity utilization sort of goes to a healthier level, like we, for example, are at 80-82% capacity, we generally find at 80-85% capacity utilization and above, things start improving in terms of margins. I do not know if you would call it an external factor, but that is more of an industry dynamic. If you see our four years' result, we had two years where our EBITDA margins were 15-16%, and in the last two years where the EBITDA margins have been obviously lower, maybe closer to 10%, 10-11%. I would say that industry dynamics are also changing now going forward. The whole post-COVID boom or during post-COVID boom, a lot of capacities were created in Asia. That kind of slowly is sort of petering out, right, the excess capacity. Okay. So that's what I was trying to understand. So sales have improved. I mean, it's not just that the crude prices filter for something like that. So I think we can expect relatively better margins compared to the dip that we had. Sorry, I didn't understand. I'm sorry. It's not very clear though. Okay. So I was trying to say that that's what I was trying to understand, that it's not just the crude prices, but I think in general, the things have improved, and we can be hopeful of more stable margin levels to have, right? Absolutely. Obviously, the crude prices for us, unlike maybe FMCG companies that are using crude as a base or FMCG is the wrong word, but any company where, yeah, where I do not think, okay, let me put it this way. I do not think crude prices in the long term affect us too much. Whether they are up or down, we obviously prefer them lower than higher. In general, it is about the margin between our raw material prices and the finished goods prices. Being a B2B company, we have to move quickly and reduce and increase prices as the raw material prices go up and down. It is really the delta that we focus on. Lastly, if possible, could you share now or later the realizations, average realizations for the whole year? You mean, what do you mean by what exactly? Realization per kg for. We typically don't share those numbers, Mr. Vishay. Okay. Very much so. Thank you. Thank you. The next question comes from the line of Justin Baliya from Clockwise Capital. Please go ahead. Sir, thanks for taking my question. Sir, can you just give us a general performance update on various segments of the business for FY 2025? Specifically, if you could talk about volume and margin trends in the FP latex business, NBR, HSR, and Nitrile latex, and any underlying trends which drove growth or margins in FY 2025 and your prognosis for next year in all the different segments. Okay. As I mentioned earlier, we had about 2/3, let's say 2/3 is latex and 1/3 is the rubber segment. That starts with the easy one. The HSR segment, the margins are sort of steady. Volumes are actually somewhat declined in the year compared to last year, so it's only about 5% of our total business now. It's not a growing business. In fact, it's a degrowing business. We are sort of continuing with the business without investing any funds. That's a little flavor of high styrene rubber. In terms of nitrile rubber, we are at 100%, almost close to 100% capacity utilization for FY 2024, sorry, FY 2025. We will be the same for FY 2026. No new capacity is going to be added. Margins, we are dependent a little bit on international prices, and of course, now there's anti-dumping that we have filed. There also, margins in Q4 were better. Overall, they were steady for the year. On the latex side, where we have, as far as the paper, carpet, construction, for the year, it was definitely more challenging than the previous couple of years. Again, as I mentioned, capacity being added. On top of that, some of our exports were affected, especially in the carpet industry, to Turkey, to Egypt, because of all the war issues in Israel, Israel-Gaza issue. Because of all these issues, carpet was affected. However, overall, for the year, we have seen, as you can see, we have still pushed through growth. Overall, we had a 16% growth in volume, 24% growth in value terms, and for the year. Sixteen percent growth in volume is including Nitrile latex as well, right? Including Nitrile latex, yes, absolutely. Including Nitrile latex. Sir, I am talking about, sir, can you give us numbers only for the FP latex business? How are you? Flag business. We do not give, sort of, each for each segment, we do not give growth numbers. I am just here trying to give you a flavor without, unfortunately, I am not able to give those numbers for sort of obvious reasons because we have different competition for different latexes, and we just do not want to talk about them individually. Got it. Overall, of course, SB latex also, we have, I can talk about overall for the non-Nitrile latex segment, has also grown. I will pull out the growth numbers in a second, but I hope that gives you a little bit of a flavor. In terms of margins, as I said, it has been challenging for paper and carpet for sure compared to the previous year. Construction has been steady. Overall, we have seen cash profit grow by about INR 85 crores to about INR 196 crores So our percentage is about 13%-14%. Sir, your prognosis for next year for FP latex business? Oh, we're quite sorry. 12% growth in latex. No, no. Yeah, 12% growth in cash profit. And you're asking about non-Nitrile latex, if you have that available. We don't really give a prognosis or a guidance for the following year. But yeah, for SB latex, we are quite bullish that we have a very strong market share. We are number one in that segment in India. We're growing well exports. As long as the India growth story continues and we are able to continue to grow and export, there also we expect good growth. Obviously, it will not be like Nitrile latex because we are Nitrile latex, we just started a couple of years ago, but we expect good growth there as well. Got it, sir. Even in the non-Nitrile latex segments, we have grown at about 8-10%. Okay. Volumes. Volumes, yeah. Got it. Probably a little bit more. Sir, in the Nitrile latex business, you were on the view of. Sorry to interrupt, Justin. You're done with your two questions. Could you please fall back in the queue if you have any more? Sure. Okay. Thank you. The next question comes from the line of Raman Kerti from Sequent Investments. Please go ahead. Hello, sir. Can you hear me? Yes. Go ahead, Mr. Raman. Sir, I just have two questions. One with respect to the guidance for the coming year. What sort of volume growth are we expecting in terms of the latex and rubber segment? Secondly, are we expecting any further price margin improvement driven by the declining crude oil prices? As a policy, we don't give guidance. As I mentioned, in the rubber segment, we do not expect growth because we don't have capacity this year. We will try and improve our margins in the rubber segment if possible. On the latex segment, of course, we expect growth. We have runway. We will push. Again, we don't give specific guidance in terms of growth for specific segments or even as a company as a whole. With respect to the rubber segment, are we adding capacity in this year? We will be deciding in the next three to four months, I suspect. Okay. Sir, the other thing is I want to understand. See, this quarter, we had a bit of the operating margin has improved from 8% to 11% on a quarter-on-quarter basis. You said it was because of better price realization. At the same time, you said the inventory which you have is of a higher crude, was basically when the crude price was higher. When will the impact of lower crude price be impacting on the company level? See, as I said, again, I'm repeating that lower crude prices do not necessarily mean it's great for the company. Lower crude prices, once they're steady, if it remains steady, it does help, of course, from a working capital angle, customers, or also from a pricing angle, it helps a little bit. While they are falling, as we have seen in the last couple of months, it's actually a little bit not great for the company because we are forced to sort of reduce finished goods prices very quickly, and we may be stuck with some higher-cost raw materials or finished goods. Of course, we try and manage it as best we can, but sometimes what we've seen historically, we are sort of sometimes a quarter or so can be affected with these kinds of sharp movements as we have seen. is not just crude, it is more than crude. The raw materials we specifically buy, which are petrochemicals, which are downstream crude. Even if crude goes down by 20%, it does not necessarily mean that our raw materials will go down by 20%. In fact, some raw materials have gone down by 10-15%. Some have gone down by 25-30%. I hope that answers your question. Yes, sir. Only one last question. It's on the part of price realization. What is the realization per ton with respect to latex and rubber for FY 2025? Again, we don't give sort of per kg numbers, as I told the previous caller as well. All right. Thank you. Thank you. The next question comes from the line of T. K. Pandya, an individual investor. Please go ahead. Good afternoon. Thank you for taking my questions. Firstly, I would like to know that you have quoted that acquired 26% of shares from Opero Voyo Nirmala, and this company is a special purpose vehicle and has no business operations. What prompted you to take this line of going in for wind power generation? Because wind power generation production is very erratic and shutdowns are very frequent. You have a power purchase agreement, and your power purchase agreement, have you safeguarded yourself from any of these regimes of wind energy production? Yeah. Thank you for your question. This is specifically for the Gujarat plant where we, or Gujarat facility, where we are investing in a hybrid power project. It is not only wind. Whatever power is generated, we get a credit in the consumption of our Gujarat plant. It is a Gujarat government scheme to promote renewable energy. Obviously, the payback and the savings from this project are quite lucrative, and that is the reason. More than that, and over and above that, more than the savings and the commercial aspect of it, we are also, from an ESG perspective, sort of moving at least 60%-70% of our current consumption, 65%-70% of our current power consumption in our Gujarat plant to renewable energy. Therefore, reducing our greenhouse gas emissions. I can just agree the cost of green energy, wind power or hybrid, whatever you are saying, as compared to the conventional cost of power from conventional sources, how much is the difference? How much profit or how much savings would you be able to make? It's a significant difference, Mr. Pandya. It will result in reasonably good savings for the Valia Plant. It's at least quite a—I mean, I don't have the exact numbers with me, but it's a significant saving. Do you think your investment of 3.27 tons is worth it? You will not regret it? Yes, sir. Definitely. Okay. The second question is your current liabilities and non-current liabilities total is about INR 184 crore. So where have you utilized this borrowing? The current liability is on two fronts. The total borrowing was, one was used for the project that we invested in two years ago, where almost more than INR 200 crore were invested into expansion projects. The second is gone, obviously, to fund the working capital. Our total, as of March 31st 2025, the long-term liabilities would be—or not long-term, total borrowings would be about INR 185 crore. That is what I said. Just INR 185 crore is very high as compared to your profit is only around about INR 50 crore or so. INR 51 crore. How much is it? One second. Long-term, INR 54 crore. Net profit is INR 54 crore. Your net profit. If we take about more than three years to square off this borrowing? See, some of it is term loans. Against that, we have debtors as well. Sorry, some of it is working capital loan. The working capital loan is probably more than half of this, and the term loan is probably a little less than half now. We do not see it. In fact, on the contrary, I think our balance sheet is extremely healthy. We also have cash in the books of about INR 100 crore that we have kept for future sort of opportunities or immediate opportunities. I beg to differ, but I think our balance sheet is one of the healthiest that you would see. Okay. No discussion on that. Lastly, you— Sorry to interrupt, Mr. Pandya. You're done with your two questions. One second. Just one second, please. The margins at the end of the financial year, profit margins, earlier you had about between 10% and 15%. Now it has, in the last quarter, it was 4.8%. When do you expect your profit margins to come around 10% profit margins? As I mentioned that in the last couple of years, there have been some internal challenges and some external challenges, which in the year FY2022 and FY2023, obviously, we had better margins compared to the last couple of years. We expect that in the next year or two, things should turn around as capacity utilization goes up across the industry. I think things should turn around. Of course, there are certain uncertainties right now with the tariffs from the U.S. I think that's the main issue right now. Of course, the India-Pakistan situation, I don't want to comment because it's too recent and no one knows how that will play out. For now, the tariffs is the big issue and how it affects us and the customers and the economy as a whole. Overall, we obviously expect the margins to improve over time. Okay. Thank you so much. Thank you, sir. Oh yeah. The next question comes from the line of Rohit from IThought PMS. Please go ahead. Good afternoon, sir. Am I audible? Yeah. Go ahead, Rohit. Yeah. Yeah. Okay. So most of the questions have been answered. Just two questions again. So sir, I think historically, we've been talking about, so Nitrile latex, when we envisioned this project, it was higher margins, and of course, the situations have changed post-COVID. However, I think in general, you've spoken about improving your overall margin band from, let's say, around the peak margin that I can see that you have done around 14%-15% during the good years of COVID. But I think you've talked about the normalized margins being around 14%-15% going on from here, of course, say for these tough periods. So I just wanted to get your comments around that, how confident you are. I'm not saying this year, this quarter. I mean, I'm not talking about the immediate quarters. I just wanted to understand from you, if I look at the last probably 10 to 12 years of your historical numbers, the highest margin that you've done is during the COVID years. Now, you've been saying that those will be your normalized margins, and probably you have a—if you get some good years, then probably it will go even higher. Maybe if you can just help us understand what gives you that confidence. I'm not talking about the current times. I understand these are tough times and there is overcapacity and we are all trying to get the way out of it. If you can just maybe help us understand that. Look, it's not fair to compare 10-12 years because the company was very different 10-12 years ago when we were probably a INR 400 crore company. Now we're a INR 1,400 crore company. One is we are achieving scale slowly but surely, right? We are going closer and closer to global scale. For example, our Apco Build and latex and Apco Acrylic latex plants are now global scale, I would say. Obviously, what has happened is because of the COVID year boom, a post-COVID boom between 2021 and 2023, a lot of capacity was added. That typically does not happen in this industry. It gets added slowly. I think the whole industry was running at full capacity very quickly in that 2020- 2023 period. Quickly, a lot of capacity got added, which typically does not happen. Therefore, when that normalizes, we expect margins of those products to go back to normal. Nitrile latex, because it's used in medical gloves mostly, even more capacity than normal was added. I mean, more capacity was added in the last two years in Nitrile latex than the previous 10-15 years. It's really been a very unusual period in terms of capacity addition. As the capacity utilization normalizes, we expect the margins to normalize at about 14%-15% now. Had it been 7-8 years ago, IThought Exchange may not have been able to achieve those margins because we were subscale. Therefore, the confidence that we can do this. We would have to, of course, increase margins for NBR, for all our products as well, and introduce some higher sort of value-add products. All that helps overall. I think even in—let me put it this way. Even in years that have been very challenging, we have achieved margins of about, for the last two years, close to around 10%, right? This is when Nitrile latex is pulling our margin down for the company as a whole. Without Nitrile latex, we would have had maybe 11%-12% margins, 2% more. Around, let's say, 12% margins, I am told. That is not such a great year. Once capacity, we should go back to 14%-15%. That is what I see. Very clear. Thank you. Sir, just one more question. Given you mentioned that we will probably run out of capacity probably sometime next year, I mean, financial year, and you are deliberating on capacity expansion, and you said that we are now in many products, we are a player of scale. Given that the margins are not great across the board, given the capacity increases and general realization being down, would that not impair our margin recovery as a company? Just wanted to get your view. Sorry, I didn't understand the question. Why would it impair margin recovery? Because of? I mean, you're putting more capacity, I mean, more supply coming in. But because you are a player of a decent scale for all these products now, would it not impact? In excess supply scenario, you're putting more supply is what my question is. What I'm saying is, yes. Look, again, I'm just trying to mention what happened two years ago was we came in with a capacity, and our competitors came in with capacity. As a result of which, a lot of capacity was added. Now we will, of course, now I think it'll be sort of normal capacity expansion going forward. It will not be in the sort of post-COVID capacity gold rush, as we called it. Now it's going to be sort of more measured capacity increase for what we need. Because if we don't increase capacity, that's also an issue, right? Obviously, one eye is going to be a return on capital. Whatever additional capacity we do set up, we will want to utilize that capacity also in two to three years. We would want to do it at a cost where our return on capital is quite healthy. As a company, we look at 20%-25%. We target at least 25% return on capital. As long as we are convinced that there is a high probability of that happening, we will invest. We will consider that. Can I ask you one more question if it's okay? Sure. Go ahead. I think, sir, you mentioned in the last couple of calls about the tariff issue probably helping you given there will be tariffs on Chinese gloves exports. Given the current situation, there are only the tariffs on, largely the tariffs on China, and other tariffs are not at that rate. How is the situation now evolving for you guys, especially your customers' attention? Obviously, the difference between last time and this time is that last time, it was specifically—I mean, last time when we met in January, it was specifically on Chinese gloves that the U.S. had imposed 50% duty starting January 1st. Now, what changed dramatically was in early April is that tariffs were announced across the board and then reverted back. Now, obviously, only China has more than 100—I do not even know the number anymore. It keeps changing. More than 100% tariffs on all products, from what I understand. As a result of it, of course, the Chinese glove industry has been affected. What we are seeing is that what we are hearing from our customers is that now China is—it is not viable for them to supply to the U.S. They're coming to all Europe and Asia and other parts of the—they're seeing more Chinese gloves hit those markets. Similarly, on the latex as well, because their overall glove—what I understand, glove industry has been affected in China, they have excess latex. That's also coming out of China, and we are seeing it in some markets. It's a little early to say because all this started only in March, April, or April, rather, after April when the tariffs were increased even further. So far, no direct impact on us. We have to wait and watch. For example, some of our customers who are in Sri Lanka, Indonesia, Malaysia, they are not sure what their duties will be when they export into America two months later, right? There is a lot of uncertainty. People are basically holding off on building big inventories or sending big parcels to the U.S. Got it. Got it. Thank you very much, sir. All the very best for the study. Uncertain. Really don't know how it'll play out. So far, I can tell you this—at least so far, this quarter, which is almost half of the quarter is done, our business, our volumes have not been affected. We are still pushing through, and it's all okay. Sounds looking okay so far. The outlook is uncertain. It could change at a short notice, right, depending on what happens. Sure. Thank you, sir. All the very best for this week. Thank you. Thank you. The next question comes from the line of Sushni Hansura, an individual investor. Please go ahead. Hello. Yeah. Go ahead, Sushni. Yes. Thank you, sir, for the opportunity. My first question is, any updates on Apco Build? No, actually, it has been a little bit of a challenging year this year. I think overall, the Indian market that Apco Build is on entirely for the Indian market and more for the sort of Western and Central region. We have seen growth, slight growth, but we do not—as I said, it is still a small part of our business, so we do not really report on it. Okay. What exactly are the triggers for our Nitrile latex segment to grow, which could potentially lead to higher margins overall? Sorry, I didn't understand the question. Can you repeat? What exactly are the triggers for our Nitrile latex segment to grow, which could potentially lead to higher margins overall? Yeah. So in terms of volumes, and we are perfectly on track. Our original thought was that we would reach 100% capacity utilization within two years. I would say we have a run rate now of about 80%. So we are a little bit short on that. That is also because the margins have been very low. We are only focusing on customers where we are getting at least some margin. There, I think we're just waiting for the whole industry to kind of turn because the capacity utilization in the industry really became very low with so much capacity added and then post-COVID demand going down as well. Now the demand is back to kind of pre-COVID levels and a little higher. All the inventories that were in this, sort of the glove inventories, have been utilized, that additional gloves produced during those COVID years. We are seeing a lot of capacity utilization, idle capacity utilization. When that turns, margins will go up. That's the main trigger. Okay. What about fed cost update? I'm sorry to interrupt you. I'm done with the actual questions. Let us finish one question. Okay. Sorry, go ahead. Yeah. I was asking about freight cost update. Freight cost? Or reduced or? Sorry. Were you talking about freight cost, ocean freight? Yeah. Ocean freight has been definitely better. They have reduced over time. Some pockets still remain a little higher than what we would like, especially to the Middle East and Turkey and so on. Middle East meaning, sorry, Egypt. Anywhere we have to pass through this Suez Canal, even Europe, those costs remain high because some ships are going around South Africa now. Overall, I would say freight cost is not so much of an issue now, except for the markets in carpet, mainly, which is Turkey, Egypt, that area, Saudi. Okay. Okay. Thank you, sir. Okay. Thank you. The next question comes from the line of Himali Gandhi, an individual investor. Please go ahead. Go ahead. Hi, sir. Can you hear me? Yes. We can hear you. Thank you for taking my question. I wanted to ask that currently, exports contribute 30% to our revenue. Given the current scenario, how do you see that turning out ahead? What would be the headwind and tailwind we could see? In exports? Yeah. Yeah. In exports. Okay. So currently, we're at about 1/3, 32%-33%. 32% of our total turnover is exports. Honestly, for us, it's not so much about exports, domestic. Obviously, over time, since we are very strong in the domestic market for most of our products that we are in, the real big driver for growth is exports. We do expect it to go above 40% over the next couple of years. There is no major headwind, I would say, because we're focusing more on regional exports. Southeast Asia, Middle East, Middle East, North Africa, South America, these regions are probably 2/3 of our total exports and remaining in other parts of the globe. Headwinds, it's mainly this overall global capacity addition that has happened in Nitrile latex and some in other latexes as well, other synthetic latexes. That's the main headwind. Otherwise, we don't see much of an issue. Okay. Okay. This is another one question. On a broader basis, can you give us the industry-wise revenue segmentation? We cater to seven industries. Yeah. So approximately, the rubber, we are at about 1/3. It's about 30%. 32-33% is the rubber industry. Tires is probably another 10% or so. And then largely, we have paper, construction, carpet, textiles, which would be all around 15% each. 15% paper, 15% construction, 15% carpet and textiles put together. I may be missing one. And Nitrile latex, of course, is another 15%. I mean, may not exactly add up to 100%, but gives you a little bit of a flavor. Okay. Can I do one more question? Sure. Yeah. Thank you. If a geopolitical issue turns favorable, would we be able to capitalize it in the short term? Can we do CapEx within a few months, or would it take more than a year to do CapEx, and you would be able to have benefits of CapEx-led growth? How will it go? I did not perhaps understand your question fully, but correct me if I am wrong, you are asking geopolitical issues. Is there any benefit that we can take out of this? Are you specifically asking about China? If the current scenario somehow turns favorable, will we be able to capitalize it in the short term? Yeah. In the short term, certainly, because we have, for the latex side, we have capacity on both Nitrile latex and our other synthetic latexes. It's the question for next year. We expect that the capacity will be ready by the time we really need it. In case, as you said, suddenly, if there is a certain demand this year and we get some 25%-30% growth suddenly, then yes, we will not be able to capitalize on the volumes, but we'll take advantage and try and improve margins in that case. Honestly, given the current geopolitical environment, I don't think that's going to happen. There is not a lot of stuff that's looking great. Okay. Okay. Thank you so much, sir. Thank you. Thank you. The next question comes from the line of Ankit Kanodia from Zen Nivesh Advisors. Please go ahead. Yes. Thank you for taking my question and congratulations on refilling for that number given the external environment. Most of my questions have already been answered. Just a couple of ones. Number one is, in one of the questions, you said that you had a difficult year for Apco Build. Can you just throw some more light as to what happened there? Difficult year in the sense that we have been used to 18%-20% or maybe more growth earlier. This year, the growth is in single digits. I just mean from that point of view, it was not such a great year. Because the previous sort of many years, six, seven, eight years, we've had good growth. We've just seen the Indian sort of construction chemical space has been crowded. The growth hasn't been there. I think you can see that in the other sort of allied building material segments as well. I just thought I think that's not such an issue. Got it. I think we started this somewhere in 2017. Even after eight years, if it forms less than 5% of our or maybe lower single digit to our revenue, do not you think we are growing this much lesser than what we would have liked? Yeah. I mean, look, we are obviously, we could have done better. We can do better. As I said, it is more of a downstream play. We have a few of the main raw materials. We are trying to capture the downstream margin. We are quite happy with the way things are progressing. This could have been better, of course, and we would have preferred to be a bigger business than it has. It is still a profitable business on its own. We run it like a standalone P&L, and it is a good, small, profitable business. Got it. My second question, sir, is slightly longer term. If I could look at how we have grown and how we have basically added more products, added more geographies, and also added, I mean, reduced the customer concentration risk over the years, what I have generally observed is that your business has achieved scale also, and inherently, the margins, ethical margins have also increased over the years. Even though in between, there have been periods when margins have been very high and then they are very low. Is my understanding correct when I see that in the last two years and the margins? We are closer to the bottom rate in the next two years, two, three years from here. We should see both from margin and asset term perspective. The number should go up. I'm not asking for any definite number, but. Can you repeat the last part you said from a margin and what perspective? Asset terms. Even if asset terms also sometimes become more than 8, sometimes it comes down to 2, 3. That is a very wide range of asset terms which we see in the business from a customer perspective. Obviously, as I said, what happened in 2023, 2024 was unusual because a lot of assets added more than INR 200 crore of assets literally in one quarter. Therefore, the asset turn fell. Obviously, as the capacity is used up, the asset turnover goes up again. Whenever I look at ROCE of the company or asset turn, I think you have to, at least I look at it for any company, not just my company. For any company, you cannot look at it as, at least I do not look at it as in one point in time, but an average over a period of five to seven years. That gives a better flavor. As far as margin is concerned, again, the same issue, right? There's a lot of capacity that was added in that FY 2023-2024 period for us and for the industry as a whole, which is the main reason why EBITDA margins are lower. But as a business, we are definitely much stronger now in terms of scale, in terms of, as you said, geography, in terms of industry coverage. We're not dependent on any one industry. Therefore, the downside is quite well protected. Earlier, our margins were between, I remember many years, I mean, 15-20 years ago, margins would be between 3% and 8%, depending on good years and bad years. Now what we are looking at is 10%-15% between good years and bad years. I think over time, that will keep improving as we scale up more and more. Thank you so much, sir. That's really helpful. Another question. Thank you. The next question comes from the line of Rudraksh Raheja from ithoughtpms. Please go ahead. Thank you again. Yeah. Go ahead, Rudraksh. Could you tell us about your day-to-day payment plan, if you have any? We do not have. As I mentioned to the previous caller, we had one long-term loan that we had taken for about INR 125 crore for the projects that we did. We are paying it back as per the schedule. We expect. Go ahead, Sachin. Sachin will give you a flavor of that, I think. We have already repaid a year of term loan installments. In the next three years, we will close the loan. It is a four-year period in which the loan will get closed. I honestly think it is not a big deal. We have INR 100 crore of cash against our term loan, which is also currently, what, INR 95 crore or something? About INR 100 crore. Against the term loan, we already have that cash. The rest of the borrowing is just working capital borrowing. If you see, for a INR 1,400 crore company, working capital borrowing is about INR 80 crore, which is less than a month of working capital. We are very sort of, in fact, we have got feedback from some of our board members that we are being too conservative and we should have more debt. Okay. Okay. Sir, in terms of the latex product, sometime back when we expanded our capacity, you mentioned that another player in the industry also expanded at the same time. That's why prices crashed. Specific to that. I don't think the margins were affected because we wanted to, everyone's holding on to market share or trying to improve market share. It happens. It's just that also don't forget that post-COVID, that huge jump in 2021, which no one was expecting. In fact, if you remember calendar year 2020, everyone was so worried about COVID and what would happen to businesses. Suddenly in calendar year 2021, what we saw was a huge pull from the market as people were sitting at home and ordering goods. All manufacturing went up. In 2021 and 2022 and parts of 2023, we were running at 100% capacity license. Those two, three years, everyone panicked that we didn't have enough capacity. When I say we, I mean the manufacturing industry as a whole and our industry in latex and these products. We built more capacity than we perhaps needed to at that time, thinking that it will be used up quickly. In our case, we have been conservative. We have been very good at using it up. I think we have done a good job overall. That unusual period has gone away now. Now people are a lot, I think companies are going to be a lot more measured about adding capacity. True, sir. Are margins coming back there? They will. Capacities we have built, that is true. They will. They have to. Because to invest further, you need a healthy return on capital, so you need healthy margins, right? Otherwise, no investment will happen. Got it, sir. Got it. Okay. Good. Thank you. Thank you, Rudraj. Thanks. Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for the closing remarks. Thank you, everyone, for joining us on the Q4 and financial year 2025 conference call. We look forward to seeing you in the new financial year now for the Q1 results in July. Thank you very much for your time. Thank you, sir. Ladies and gentlemen, on behalf of Apcotex Industries Limited, that concludes this conference. You may now disconnect your lines.