Ladies and gentlemen, good day and welcome to Balrampur Chini Mills Limited conference call. 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Jency Varghese from CDR India. Thank you, and over to you, ma'am. Good afternoon, everyone, and thank you for joining us today on this call to discuss Balrampur Chini Mills update on the PLA project and the capital raising initiative. We have with us today Mr. Vivek Saraogi, Chairman and Managing Director of Balrampur Chini Mills, Ms. Avantika Saraogi, Executive Director, and Mr. Pramod Patwari, Chief Financial Officer of the company. We will begin the call with brief opening remarks from the management, following which we will have the forum open for the question- and- answer session. Before we proceed, I would like to remind everyone that certain statements made in today's call may be forward-looking in nature. Accordingly, please note that the company is currently in a silent period. We request that you refrain from asking questions related to the quarterly business performance and limit your questions to the current development. With that, I would now like to invite Mr. Saraogi to deliver his opening remarks. Thank you, and over to you, sir. Good afternoon, everyone, and thank you for joining us on this call today. We thought, you know, in our genre of transparency to connect with all of you post the board meeting held on 23rd to share an update on the PLA project, the investment around it, and the associated financing initiatives approved at the meeting. At a broader level, these decisions reflect the direction in which we are taking the business and the way we are positioning ourselves for the next phase. PLA project is a key strategic initiative for us and forms an important part of our efforts to build a more growth-oriented business with attractive opportunities emerging around the value chain. As the project has progressed through implementation and detailed review, we have taken stock of the updated capital requirement and adjacent opportunities around it. Let me first cover the PLA project itself. As disclosed, there has been a cost overrun of INR 230 crore, taking the project cost to INR 3,080 crore from INR 2,850 crore. The revision primarily is on account of key construction material, global supply chain disruptions, forex movement, and certain refinements in engineering and design owing to the final 90% engineering and review modeling. Alongside the PLA project, we have identified an attractive opportunity to create value chain around its byproduct. Together with this, people take advantage of the situation and suppliers also, you know, in the gap of giving material on time, say there's an overrun and a little more cost gets into that. Alongside the PLA project, we have identified an attractive opportunity to create value chain around its byproduct. As part of this approach, board has approved the Lacto Gypsum processing plant at Kumbhi. This facility will convert lacto gypsum, which is a synthetic and eco-friendly byproduct generated during the PLA manufacturing process into gypsum boards, a scalable and commercially attractive production segment. The proposed plant has an investment outlay of INR 160 crores and is expected to have a capacity of 76 lakh boards per annum, with commercial production starting in 18 months. We see this as a highly compelling initiative with multiple benefits. It enables us to monetize our byproduct, enhance overall efficiency, and create an incremental revenue stream. At the same time, it reinforces our sustainability agenda by embedding circular economic principles into our operation. This synergizes with our, you know, initiatives of converting our kind of waste into value-added products. To support these initiatives, the board has approved a preferential allotment of equity shares- worth approximately INR 450 crore at the SEBI price of INR 483, which was the SEBI price on that day. In addition, the board has approved an enabling resolution for raising debentures of INR 200 crore. This is just part of the financing because if you're going in for a big project, you need to do something through debentures. This should provide us the financial flexibility required to execute our expansion plans while maintaining our balance sheet discipline. We'd like to highlight that continued participation from the promoters in the fundraise will keep our stake, the family stake at the 43%. If you see, we have put in 43% of INR 450 crore, which is about INR 193 crore, which is exactly synergetic with our existing stake. We believe this reflects the promoters' continued confidence in the company's growth strategy and long-term value potential of these projects. What I'd like to also add is, non-disposal of gypsum can also lead to a bit of a pollution issue. Our ability to dispose of gypsum with our interaction with cement plants showed limited interest, very poor pricing and limited offtake. Not getting into a position where earlier we in the 1990s, we got into with bagasse, where we had to sell bagasse for free because there was no disposal, and we were India's first sugar factory to get into the cogeneration project, which yielded us rich dividends down the line and stopped us from getting blackmailed. This initiative also has that theme embedded in it. Now I'd request the moderator, and we'd be very happy to answer your questions. Thank you very much, sir. Ladies and gentlemen, we will now begin with the question- and- answer session. Anyone who wishes to ask questions may please press star and one on their touchtone phone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. You may please press star and one to ask questions. The first question is from the line of Prashant Biyani from Elara Capital. Please go ahead. Yeah. Thank you for the opportunity. Sir, what would be the rationale for this equity capital raise so closer to the commercial timeline of the project? You would have already tied up with finances and leverage is also not that heavy on the balance sheet. Yeah. I believe this question exists in the mind of many of our equity investors. Just let me give you some perspective. A, this is a 5% dilution. B, we are participating, so it's not that there is a, you know, thought of lowering the promoter stake. C, the ability to run business, to maintain rating, to maintain the, y ou know, we are almost getting our finance today at 6.75, and to ensure no ratios are disrupted. The idea was to raise this capital because there is an INR 390 crore outlay, as you can see, 230 plus 160. Plus we have the sugar season coming up, and we see our ability to purchase more cane, et cetera, beyond time. To ensure liquidity, to ensure rating, to ensure no banker says that, you know, you violated some ratios, et cetera, we thought that this would be a very prudent measure. Okay. Sir, can you give some cost dynamics for the Lacto Gypsum plant? I mean, how much is the output of lacto gypsum when you make one unit of PLA? For this plant which will make gypsum board, how much could be the revenue potential as well as indicative margins if you would have budgeted the same? Yeah. Pramod. Prashant, for 80,000 tons of PLA, we are expecting lacto gypsum in the region of around INR 1.16 lakh tons to INR 1.2 lakh tons. This has a revenue, annual revenue potential of around INR 150-odd crore. Sir, how many tons or how many units of lacto gypsum make one unit of gypsum board or, I mean, equivalent from input-output ratio? This INR 1.16 lakh tons of gypsum will result into around INR 63 lakh pieces of board. That's annual capacity. INR 63 lakh pieces of board. Sir, how much would be the margins for this business? At least what you're penciling in? Margins, we are expecting a payback period of around five years. Five years? Yeah. Um, sir- Sorry. Yeah. Continue, sir. Yeah. With the current disruption, I believe, since we started looking at this project, the board prices, what we have factored in, has moved up 25% higher already because of this West Asia crisis. That's just the current development. Raw material is ours. Sir. We don't need to rely on anybody. Right. Sir, we have investment in NBFC also. Would we be willing to offload some or full part of it, which we own eventually to delever our balance sheet? Definitely. Eventually, yes, 100%. Any timeline and tentative valuation would you be looking at? Uh, the- While we have a history of past transaction at which the stake transfer happened. You're meaning the Solar plant, isn't it? No. The history you're talking about is this one. There are two parts to Auxilo's dilution. One is a dilution done to run the business. That is the capital requirement of the business itself. Two- Yeah. The last dilution was done at about INR 3,200 crore. Around 3,000. Around INR 3,000-odd crore market cap of Auxilo. That was the last valuation available. Currently, yes, we, as I've told you, I've answered your question. The timing and et cetera are not fair to answer now. Yes, we are, in the you know, positively inclined towards answering your question in the affirmative. Right. Okay, sir. That's it from my side. Thank you so much. Thank you, Prashant. Thank you. The next question is from the line of Shailesh Kanani from AM Sec. Please go ahead. Good afternoon, everyone, and thanks for giving me this opportunity. First of all, congratulations on the equity fundraiser after a long time to the whole Balrampur team. Sir, I have few questions. First one is on the PLA project. Now, the cost has escalated by INR 230 crores, and you have given the reasons that the engineering changes and supply chain issues. Are these modifications fundamentally altering any yield or efficiency of the plant? Minor tweakings always will lead to it. Yes, you are right, but it's impossible to be able to quantify all that today. Everything has been done. Some part is towards improving the engineering. A lot of it is foreign exchange also. One could not have booked the machinery which is to come in. EUR moved from 95-110, Pramod, am I right? 90-110. 90-110. That's not in my hand. I could not have booked the machinery which is to come as per RBI laws and told. That is one major part. To this shipping cost, this crude, these ships not coming around Hormuz and Cape, you know, Cape of Good Hope, local transportation. You know, the biggest consignment, just to give you a figure, is costing me INR 9 crore to transport a column or a part of the machinery. There are two such consignments. It takes four months. People at this point of time, I have to complete the project, and there are some costs which are probably a little higher than what it should be. Some are genuine. 90% are genuine. 10% is a bit of blackmail. One has to succumb to that in order to complete the plant with precision. Shipping cost, inland transport cost, currency fluctuation, revision of prices of some existing contracts. We have put in fixed price contracts and that we try to keep to a minimum. Lastly, some minor engineering and et cetera for the 90% modeling, which just throws up some new maybe valves, pipelines, kind of things. Combination of all. Fair enough. With project being so closer in terms of completion and operational, say six to nine months. Can we expect this is the final kind of revision in project cost and there will- Yes. No more further increase in cost irrespective of macro environment? Yes, because, Pramod, our machinery is largely coming. Yeah, that should be it. Thank you, Vivek. Sir, my second question was related to the UP bioplastic policy where they are giving 50% capital subsidy. Even if this upward revision, that would be kind of eligible for the same, right? A very good question, pertinent question. The document, the policy document does not curtail your investment. Yes, therefore, what you said is absolutely correct. Fair enough. Thanks, Vivek. My third question was with respect to the gypsum boards, what we are planning to do. I was reading sometime, somewhere that it requires fillers and reinforcements. Are we planning to utilize the bagasse ash or bagasse fiber for production of this? Do we have that excess? No, that does not. It's not required at all. It requires paper and gypsum. That's it. Okay. There will not be any further utilization from the byproduct from the sugar mills as such? No, only in terms of utilities like steam and power will go. Which will be accounted for in the project revenue. I mean, sorry, in the expense. Fair enough. Just to answer your question. Yeah. Just to answer the question, how we work in Balrampur, and I guess in any prudent company, is if you see our three divisions, Sugar, Ethanol, and Power, there is a transfer pricing for everything. Then you get your segmental revenue and segmental profitability. When Pramod has spoken to you about a five-year payback and which may substantially decrease with the current raise in the board prices, each utility used here, whether it is steam, anything, is accounted as an expense here and a revenue in the PLA plant. Right, Pramod? Fair enough. Just last question from my side on this, continuing with this point. Will these boards that we'll be making, will be positioning themselves as a commodity alternative or, some kind of, we have a leverage with respect to, bio-based or some recycled content in it, so we can kind of target the premium ESG or green building, something like that? Is it possible? This is not any such at this point of time. In the future. a good thought, like It is definitely replacing mined material. In that case, it is, of course, a very much more eco-friendly way. To attribute value based on that, I don't know if you'll get more value, but definitely. More acceptable. The eco-friendly tag is definitely there with it. Yeah, because this is our product. Yeah. There's no mining involved. Yeah. All other board is made from mining. That's a good point. That's a good thought. We have the most numbers people we can get on to later, since it's 18 months away. Very good. Thanks a lot, sir. Thanks a lot for answering all the questions. Best of luck, sir. Thank you. Thank you. The next question is from the line of Nishita from Crown Capital. Please go ahead. Yes. Hello, am I audible? Yes. Yes, ma'am. Please proceed. Yes. I actually just had a follow-up question on a previous participant's questions. I just wanted to understand that our PLA capacity, so you mentioned that on the 80,000 tons of PLA capacity, we can expect around INR 1.16 lakh tons of lacto gypsum. Right? Yes. From the INR 1.16 lakh of lacto gypsum, we can have around INR 63 lakh pieces of gypsum boards. Yes. The revenue potential that you mentioned of INR 150 crore, that is from the 63 lakh pieces of gypsum board per annum. Is that understanding correct? Yes. Yes. Okay. Got it. I just wanted to understand what the revenue potential is from our PLA project. The whole PLA project? That's already been told. Yes. Got it. Nothing has changed. Nothing has changed. The PLA project, everything remains the same. This is a value addition to a by-product which is like, if not added, waste. Okay. Understood. Thank you so much. Thank you. A reminder to all the participants that you may please press star and one to ask questions. The next question is from the line of Riya Bhatia from CNBC-TV18. Please go ahead. Yes, sir. I just wanted to understand the breakdown of the preferential issue of INR 450 crores. Where exactly will this be used? Because I believe INR 160 crores will be for this lacto gypsum plant and INR 230 crores for the PLA plant, right? The balance will be on account of corporate general purposes. Okay. Understood. The PLA plant commissioning, does that remain on track for quarter three? Yes. Yes, absolutely. Okay. Understood. That's a tough job, but we're leaving no stone unturned. As things go, it looks absolutely viable. Okay. All right, sir. Sir, I just wanted to understand what led to this increase in the cost for the PLA plant, INR 230 crores. Was it largely because of the West Asia crisis? Yeah. I think if you had joined the call, I have already laid down all the points. Okay. All right, sir. Okay. Thank you. Thank you. The next question is from the line of Vikram Suryavanshi from PhillipCapital India Private Limited. Please go ahead. Yeah. Good afternoon, sir. Just on, Yes This lacto gypsum, how is the sales will be done? Will it require the sales distribution channel, or is it like a commodity where we can focus on sales, but only it will be sold to the dealers directly just to get some sales from the distribution side of the gypsum board? We are working on the sales strategy. In time to come, we will We'll finalize. We'll lay it out ahead there. We will have to- It's just the beginning. Yeah. We are evaluating a few options. Yeah. It's 18 months down the line. Yes. We are confident. We've taken a broad stroke understanding, we'll get to it. Okay. Got it, sir. Thank you. We are already tracking the prices, as you can see. Thank you. The next question is from the line of Bharat Sheth from Quest Investment Advisors Private Limited. Please go ahead. Hi, sir. Thanks for the opportunity. Sir, pardon my ignorance. If you can run through the whole, I mean, with this PLA plant and this gypsum plant, how, I mean, once gypsum plant, where a lot of, I mean, output of PLA will be used as a raw material and cost. Is there any change in the payback time, or it still remains five years? It remains the same. It remains same. No change. There is no change at all. Let me explain to everyone. The way bagasse comes out when you run a sugar factory, that bagasse is either fed into the boiler for cogeneration, which you sell power, or you can sell bagasse to paper manufacturers. Correct. This is the way gypsum will come out. Either you dispose, throw, give to cement at dirt rate, dirt cheap rates with a huge volume staring at your head, or we have taken this call to convert. Correct. Sir, you also said some of the Sugar plant, I mean, output will be used in PLA, so and which will be the cost for PLA plant. How that can really will benefit to Sugar plant, existing Sugar business? There is no sugar plant, I said. I said out of the PLA plant, the capacity of the boiler, let's say is 100 ton and 2 tons is needed in this process. That 2 ton steam used to make board will be the cost of the board factory, let's say, and 2 ton, therefore, will be revenue of the PLA factory. I understand, sir. When we are going ahead with converting ethanol into PLA, so that economics, if you can explain, sir, I'll be grateful. There is no ethanol converted into PLA. So- Converting sugar into- Sugar is converted into PLA. Story over for sugar factory. Yeah. If you can give some economics on that part, broader economics. Actually, we can take this question offline because for the rest of the audience, we have explained this at least five times. Great. Thank you and all the best. Thank you. The next question is from the line of Prashant Biyani from Elara Capital. Please go ahead. Sir, for marketing of these gypsum boards, would you rather be like an outsourced manufacturer for already existing branded company like Gyproc or anyone, or you would want to take it with your own brand? Actually, this is what we also tried to answer before. We are evaluating our options. Give us some time, Prashant. We'll go for the best one that comes to us slightly closer to the date of commission. Once we set up the plant, like three to six months into the game plan, we'll start searching and we already contacting people. We will do what is best for the company, Prashant. We don't want to sort of get into some big time branding expense and all. Yes, we'll do what is best for the company. Yeah, actually, those companies have a portfolio to offer to the dealers, which we would not have. I get your stance. I'm aligned, but too early now, Prashant. Too early. Right. Just one last thing on this. Would the U.P. market be enough for this or we would have to go pan-India? No, I think pan-India. North. North would be enough. Okay, sir. Thank you. Yeah. We'll get to the marketing, let's say six, nine months. Six months, nine months, we'll give some idea. Sure. Thanks. Thank you. Ladies and gentlemen, that was the last question. I would now like to hand the conference over to the management for closing comments. Thank you and over to you, sir. Thank you and, all the best. Any other questions offline can be answered. I hope we have been able to answer everything, and you can call us for anything you so need again. Basically, it is to give you The idea of today's call is to give you a broad construct and understanding so that every, all the investors are on the same page as far as the knowledge sharing goes. You know, people don't need to get into any kind of speculation and/or understanding, and nobody has a preferential understanding. That is the reason for our taking this time out and giving this brief to all of you. Thank you, and thank you to all the shareholders for being with us as always. Thank you, everyone. Thank you. Thank you, sir. Thank you, members of the management. On behalf of Balrampur Chini Mills, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.