Ladies and gentlemen, good day, and welcome to the Borosil Limited Q4 FY23 earnings conference call, hosted by Monarch Networth Capital. 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 and zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Dani from Monarch Networth Capital. Thank you, and over to you, sir. Yeah, hi. Thank you, Sima. Good afternoon, everyone. On behalf of Monarch Networth Capital, we welcome you to the Q4 FY 2023 call of Borosil Limited. We're delighted to have the senior management of Borosil, represented by Mr. Shreevar Kheruka, Managing Director and CEO; Mr. Anand Sultania, CFO; Mr. Rajesh Kumar Chaudhary, Whole-Time Director; and Mr. Swadhin Padia, General Accounts Manager. I will hand over the call to the management for the opening remarks. Thank you, and over to you, Shreevar. Thanks, Rahul, and Monarch team for hosting this call. Wish everyone a good afternoon. Borosil Limited's board approved the company's financial results for Q4 and FY 2023, the year on May 22, 2023. Our results and an updated presentation have been sent to the stock exchanges and have also been uploaded on the company's website. We are pleased that Borosil has achieved a milestone in its journey last year. Consolidated revenues from operations crossed INR 1,000 crore mark for the very first time as we closed the year, ended March 31, 2023, with a consolidated revenue of INR 1,027 crores. This represents a healthy growth of 22.3% over the previous year. I would like to recognize and thank the great work put in by all members of the Borosil team and, of course, all our stakeholders, including our customers and suppliers and shareholders, not only for the last year, but in the years prior to that has enabled building of a very strong foundation and an execution of a robust strategy that has brought us to this milestone. I'm proud of what the team has achieved, and frankly, we have just begun. There is a lot that lies ahead, and we are very energized for that. During FY 2023, consolidated EBITDA, that is before exceptional and one-time items, including investment income, was INR 138.3 crores, as against INR 168.2 crores in the previous year. The EBITDA margin contracted from 20% in FY 2022 to 13.5% during FY 2023. The income from investments was INR 1.9 crores in FY 2023, as against INR 13.7 crores during the previous year. I will elaborate on the reasons for the decline in operational margins as we discuss the performance of each business division. I can briefly mention now, however, that part of the decline is attributable specifically to the context of the year, financial year 2023, and we expect to see a bounce back to healthier margins in the current year, that is FY 2024. Profit before tax, again, before exceptional and one-time items during FY 2023, was INR 96.7 crores, as compared to INR 133.2 crores during FY 2022. Consolidated PAT during FY 2023 was INR 90.2 crores versus INR 85.2 crores in FY 2022. As we've already discussed in the previous quarters, the exceptional and one-time items pertaining primarily to a provision for a loss of property caused by fire and floods in the previous year and receipt of insurance claims and gains on sale of non-core real estate properties in FY 2023 are the main, you know, differences. Full details are available in the notes accompanying our accounts over the last few quarters. Average operating capital employed in the business, that is, capital employed without the work in progress, without capital work in progress and investments, was INR 558.2 crores. During FY 2023, the company earned an operating profit, again, before exceptional and one-time items and before income from investments of INR 97.1 crores, translating into an annualized operating ROCE of 17.4%. The ROCE is expected to increase in FY 2024 and beyond, with improved profitability as well as ramping up of sales from capacities added during the year, namely the second furnace at Jaipur for Larah, which got commissioned during the first week of January 2023. Coming to our business-wise performance. Borosil's consumer business, comprising glassware products and non-glassware products under the brand Borosil, and its opalware range under the brand Larah, recorded sales of INR 741.8 crores, a growth of 29.5% over FY 2022. Sales of glassware products grew by 21.9%, recording sales of INR 178 crores during the year. Storage products, which had seen them decline during COVID, grew handsomely as workplaces and educational institutions opened up fully. Our non-glassware range turned in a second consecutive year of high growth. During FY 2023, it grew at 46.2%, delivering sales of INR 303.2 crores during this period. We saw good growth across all our ranges and all our channels. Non-glassware sales of the Borosil brand now compromise about 62% of revenue. Our strategy to extend the Borosil brand beyond microwavable products to service various kitchen and serving needs of the Indian household has played out well. It's also a strong testament to the equity of the Borosil brand. Our opalware brand, Larah, achieved sales of INR 260.6 crores, a growth of 18.7% over FY 2022. Although it's important to say here that the growth was constrained owing to non-availability of product during the peak season, that was owing to the repair or the rebuild of the furnace, as well as a delay in the startup of the new production line. During the year, several new SKUs were introduced under Borosil. Many of these, such as cooktops, cookware, accessories, and storage jars, have seen good traction. Our digital marketing initiatives have seen improved efficiency and effectiveness. Organic reach in FY 2023 was 76 million, and over 155 influencers uploaded content on Instagram and YouTube. Content is available across various buckets, such as how-to, tips, recipe hacks, healthy recipes, fitness tips, et cetera. On the field, our decision-making systems implementation has enabled data-based decisions, driving more cross-selling and upselling across our channels. Improved productivity has also enabled the team to increase the outlets output reach, and we now service well over 20,000 retailers in our network. The EBITDA margin for consumer products was 11.4%, as compared to 16.4% in FY 2022. The decline in EBITDA margin was driven in part by inflation and cost of materials, as well as power and fuel expenses. We had already discussed this during the last call. I can quickly reiterate the reasons. Our product mix has been changing in favor of our non-glassware range of products. Non-glassware, excluding Larah, it compromises 62% of sales, and they have a slightly lower gross margin than the traditional glassware range. However, as I mentioned before, our focus is on return on capital employed. While the gross and EBITDA margins of the non-glassware range is lower, we have not invested in manufacturing facilities for this range. We can therefore earn an acceptable ROC from the non-glassware range, and frankly, I would say it's more than acceptable, it's a good ROC. There are many other benefits which are not quantifiable by this range. The company increased marketing expenses behind both its brands, Borosil and Larah, to increase consumer mindshare and grow the brand digitally. The brands have been actively promoted through influencer marketing campaigns to improve the customer engagement across all categories. Our brand partnerships with Indian Olympic Association and Haryana Steelers have given significant brand upliftment in the hydration category of bottles and flasks. The third point on the reason for the decrease in margin is that in Larah, we, as you're aware, we expanded capacity from 42 to 84 tons per day by putting up an additional furnace. There was some delay in implementing this expansion owing to global supply chain issues, which were beyond our control. At the same time, the older furnace had to go into rebuild in October 2022. As a result, the company could not service a lot of Larah's requirements until the end of quarter three, FY23, through our internal production. In order to ensure continued availability of brand Larah in the market, the company took a decision to procure white products and introduce these in the market with Larah designs and branding. The company obviously suffered significantly on margin in this activity. Moving on to the scientific products division. Net sales during FY 23 were INR 285.3 crores. That is a growth of roughly 7% over FY 22. Our scientific product business comprises three product ranges: lab glassware, lab instrumentation under the brand LabQuest, and primary glass packaging for pharma customers under the brand Klasspack. During FY 23, lab glassware recorded a sales of INR 187.2 crores, which is a very healthy growth of 20% over the previous period, driven by pharmaceutical and institute-based sectors. Borosil maintained its market share of close to 65% in the organized lab glassware market in the country, and is estimated to be a number of times the size of the next largest player. We continue to add more customers and expand the range of solutions we offer to existing customers. We also are developing an OEM business line for supply of critical items to our customers while maintaining the margins in the business. We expect to retain our dominant position in the domestic market, and we also see a good traction in export sales of lab glass products and vials. As part of our strategy to provide a wider range of... Sorry, I'll just go to the next point. The instrumentation business under LabQuest grew by 20.3% in FY 2023 to achieve sales of INR 25.6 crores. We estimate the current addressable market for LabQuest to be about INR 270 crores and growing at 10%-12%. The market is quite fragmented, with no player enjoying, you know, dominance. We are still in the early stages of development of a range of offerings in this business vertical, and therefore, can expand the current addressable market much beyond INR 270 crores. We will focus on increasing the range of solutions that we offer, and at the same time, expanding our customer base. Recent products developed and introduced by the Borosil Technologies team includes pilot lab reactors, bottle top dispensers for hazardous acids, and products in the nutrition and environment categories. We will leverage our existing customer relationships in the lab glassware business to increase the customer penetration for LabQuest. In the context of COVID, Klasspack had two very strong years in FY 2021 and 2022, growing by 36% and 62% respectively. During FY 2023, therefore, we were against a very high base. Sales for Klasspack were impacted for the year as COVID demand dropped off substantially and were INR 72.5 crores. That is a decline of 19% as compared to FY 2022. Almost 18% of the sales in FY 2022 were relating to vials for COVID drugs, obviously, as we all know, this has gone away completely. However, the silver lining for Klasspack is that export sales grew by about 36%, Klasspack continued to add new customers overseas. As part of our strategy to provide a wider range of solutions to our lab glassware customers and to consolidate upon our leadership position in the industry, we have acquired 90.17% of Goel Scientific Glass Works Limited from the majority shareholder of the company. This company has expertise in design, fabrication, and installation of industrial glass process system and laboratory glassware at its two manufacturing facilities at Vadodara, and is one of the leading exporters of processes and components to various countries in the world. The company has a team of expert glassblowers that are skilled at manufacturing borosilicate glass vessels up to a capacity of 500 liters. Its products find wide use in the R&D and production departments of pharmaceutical, defense, agricultural research, and chemical industries. It has built strong relationships with key domestic as well as international OEMs. During the year ended March 2023, it had a turnover of about INR 66 crores. However, to be clear, this acquisition happened post April 1st, and therefore, the accounts do not reflect any revenue or profit from this acquisition. Borosil's SIP business will derive several synergies with this acquisition. It will add a complementary product portfolio to Borosil's existing range, that can leverage Borosil's brand and strong sales and distribution networks. Borosil's R&D capabilities, together with Goel Scientific's specialized glassblowing skills, will enable the company to provide its customers with world-class products that are made in India. The combined operations are expected to provide deeper market penetration, entry into new markets, enhanced product offering, as well as a larger and innovative range of products. Overall, the EBITDA margin for scientific products during FY 2023 was 18.1%, as compared to 22.6% in FY 2022. Margins in scientific glassware has shown some improvement in line with the growth of the business. The drop in the decrease in EBITDA on account of two reasons: One is the lower margins, I would say, the higher product development costs in the LabQuest business and the lower margins in the Klasspack business. In LabQuest, more than proportionate cost increases have been attributed owing to higher staff costs for research and development, as we've been scaling dramatically the technical team. The main reason we are investing in the future, to develop new products, to ensure that we can address a larger market that's currently addressed. Borosil Technology is still a nascent business, and the subsidiary is in an investment phase, and therefore is currently incurring losses as a result of all these investments in R&D. As this business scales, these costs will get normalized, and we expect that this may take somewhere in the range of one to three years. The cost of prototyping will also reduce as a percentage as we scale the business. While the business is suffering losses, we believe it's very good investments for future growth and profit. In Klasspack, EBITDA margins declined as compared to last year, owing to lower sales during the period. Additionally, gross profit was low, owing to steep increase in cost of materials and power that could not be passed on to customers. We also had higher process rejection, as we continued to raise the bar on specifications and automated camera-based quality control, and implement further automation, such as development of offline printing. These initiatives are expected to improve productivity after the initial cost during trials and stabilization of the system. Coming to balance sheet. As of 31st March, company had a net cash reserve of about INR 90.4 crores. During Q4, the company commissioned a new furnace for opal glass production under Larah. We have an operating capacity of 84 tons per day, which at full capacity utilization, could service an annual turnover of about INR 440 crores for the Larah brand. The new borosilicate presser facility of 25 tons per day in Jaipur is estimated to be commissioned as planned in Q2 of FY 2024. Over the last year or so, we have shared plans for CapEx investments for enhancement of production capacity to reduce reliance on unpredictable supply chains in a changing geopolitical environment. Some of the projects have been implemented, and others are underway. We anticipate that FY 2024 may entail an overall outlay of INR 200 crores. This is a part of the total CapEx, which has already been shared with you all. The key projects include the new presser furnace, the solar park to reduce our electricity costs in the consumer division, as well as capacity enhancement for the scientific business, and investments to make new products in LabQuest. Coming to our business outlook, we continue to remain very optimistic about the medium-term opportunity in the consumer business. There may be intermittent periods of modest growth with some conservatism by consumers. However, the longer-term tailwinds are expected to support strong growth in our categories. We will focus on innovating new product offerings, customer experiences, and efficiencies across our go-to-market channels, as well as in our supply chain, and investing in reinforcing our brand equity. In the scientific business, we will leverage our leadership position in lab glassware to deliver steady growth, and at the same time, provide platform for growth of the instrumentation business under LabQuest and primary packaging under Klasspack. The acquisition of Goel Scientific not only adds about INR 66 crores to the revenue base, but also brings with it new customer relationships in India and overseas. In the midterm, for this business, we expect revenue to grow in the double digits, although it's early to share the CAGR growths, at least until we see let's say, some action on the ground. And maybe in the H2 of this year, we can share our projections of growth of CAGR for Goel Scientific, as well as Borosil for Goel Scientific, in a more defined manner.... Borosil is complete, committed to implementing a structured program for ESG. High priority areas include management of waste, water, greenhouse gas emissions, and energy, as well as recyclable materials for packaging and data and customer privacy. Over the next few quarters, we will disclose quantifiable targets and transparently report our performance again. We had earlier announced plans to restructure the business of the company into two separate listed entities via a component scheme of arrangement. The scheme has received approvals for the equity shareholders and creditors, and has filed an appeal as per process with the NCLT for approval of the scheme. The petition has been admitted for a final hearing. The appointed date for the scheme is 1st April 2022, and we anticipate at this moment, that the entire process should be completed by August 2023. We will keep you informed of the progress in this regard. Sorry for the lengthy remarks, but, with that, I would like to throw the floor open to questions. Thank you very much, sir. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Thank you. We take our first question from the line of Mr. Rahul Dani. Please go ahead, sir. Yeah, congratulations, Shiva, on a strong set of numbers in Q4, and congrats on the Goel acquisition as well. Shiva, just, you know, if you could throw some light on the Goel acquisition, you know, what would be the addressable market size it would cater to, and how quickly can we integrate this to Borosil standard? Yeah, Rahul, that's a good question. As far as the addressable market, our initial estimates is that it's about INR 1,500 crores, globally, a market size. I would say in India, this market is growing disproportionately because of higher R&D spends in India across pharmaceutical and defense, and even the, you know, pharmaceutical includes APIs, in those sectors. We, you know, I think, we acquired this business with the anticipation that we should be able to double the revenues. The question is in what period? You know, could it be four years? I think four years, we should be able to double. Can we do it in three years? That would be probably, you know, a better, let's say, a stretched target, but, you know, maybe we could manage that. As far as, look, Goel was, is a smaller company, so it does not have many of the systems and processes as Borosil does. In order to manage the business, we have to put in a lot of those systems and processes. You know, that also includes upgrading the, or training of talent, which are already residing within the organization. That's something that we've already started. For example, we have, you know, implemented ACP there within a couple of months of acquisition. It's early stages, but I think that, you know, that gives more transparent access to data. Of the sales team integration, the sourcing integration, all of this is likely to be six months at least. The benefit is it's very close, you know, in Vadodara, it's very close to our plant. In Bharuch, the customers are fairly common, so people know us. The team is very good of Goel Scientific, there's a wide acceptance of us that we can add value to that organization. As with any acquisition, it will take some time for integration, I believe it's a very, very strong, you know, there's a very strong chance of success for us. Sure. That's great. On the consumer division, you know, we've performed exceedingly well in terms of our top line growth. How do you see the growth going forward, you know, with the new furnace also coming on stream, and also, you know, once we back integrate into the Borosil glass? What kind of growth do you envisage in this division? Okay. Look, frankly, the, as already shared earlier, that typically, you know, the, when you start a new furnace, it's like a step, we just double our capacity, but it's not possible to double the sales on day one. We had given, you know, a general target that in two to three years we should be able to sell the production of the furnace. Obviously, our internal target is to sell it faster. As I see it, while the market has shown some signs of slowdown in the last few months, I think with inflation having dramatically gone away, across the board, I do believe that this year we should end up, you know, selling at least 60%, 70%, 80% of that new production line, and by next year, we should sell the entire amount. That would therefore be able to justify the capital that we've invested there. There are many channels that we have not been able to service before. Okay, another point is, you know, in the past, with just one furnace, we could not have a premiumization play. Now in Larah, we have added new product ranges at a premium price, you know, 15%, 20% more premium. Of course, they have high quality. Those are things we can do, and we can build that part of the business out. There will be many synergies with the second furnace. Obviously, like I said before, with any high CapEx, the first year is always a bit painful because you've spent the CapEx, your OC is dropped and you know, till you achieve a high degree of capacity realization. We are well aware of that, and we are in that period now, so we just have to grind through it. Sure, Shiva. Thank you so much, and all the best. Thank you, sir. We take the next question from the line of Aditi Bhatted from Niveshaay. Please go ahead. Hello? Hello. Yes, please go ahead. Hi, good afternoon. I wanted to have a clarity on the CapEx thing. You already mentioned that one of the consumer wear facility will be the presser facility will be operational by quarter two, right? Could you please specify for the backward integration of the tubing furnace also, which was kept on hold till the last quarter? Yeah, I know. Frankly, this has been a, because I mean, I'm not at liberty to disclose all the, you know, activities happening there. There are some other, you know, developments which I could share maybe by next quarter. There's unfortunate delay there. We are very much committed on the, on having the tubing production, and I'm sure that that will happen. Although that's not factored in the INR 200 crores of CapEx that I shared, that will happen this year. Okay. Okay, I got it. Next thing, regarding the vials and ampoules, CapEx, is it, I mean, is it in line with our plan? Yeah, yeah. Frankly, it's absolutely in line. I think we would have the finish. We have already, you know, committed the CapEx. We are waiting for deliveries of the equipment, and whatever is getting delivered will be installed by the end of this year. It is as per the earlier projected numbers. Okay. Okay, the new capacity of opalware, could you specify the of the capacity utilization for this month, for the last quarter? Last quarter. I believe it was operational for only a month or so during the last quarter, right? No, it's we started in Jan. Right. It was operative almost three entire months. First week of January, it started. Okay. I'll just give me one second to calculate. Yeah. I'll just come back to you. If you have any other question, I'll answer that, and let me jump back. No, I just wanted to see, like, if we can achieve around 80%-90% utilization in the current year. INR 70 crores last quarter. Sixty-four. Look, as far as the sales are concerned, I just checked. Okay. We would have achieved about 30-35% capacity realization in the last quarter. Okay ... of the new furnace. Obviously, keep in mind, January to March is always the lowest month. January to April, I would say, are lowest. When you start production in first week of January, it also takes a little bit of time to stabilize, so there are some operating losses. Okay. I would, I think, you know, 80% may be stretched, but I already indicated that 60%, 70%, I think we should achieve that kind of capacity realization. That's our initial estimate, understanding current orders and current, you know, output. Correct. Okay. Okay, thank you, sir. I'll come back in line then. Sure. Thank you. We take the next question from the line of Jasdeep Walia from Clockvine. Please go ahead, sir. Hi, Shiva. Shiva, the consumer glassware business has been reporting lackluster numbers in the last few quarters. In this quarter also, the growth, YOY growth in sales is only some 8%. I believe you took some price cuts in December, but still the growth doesn't seem to have come back to, let's say, 15%-20% kind of number, which you always aim for. What's the reason for that? Yeah, Jasdeep, you're right. Actually, we did take some price cuts. The issue is, frankly, that the price increase there has been significant over the last two years. Very frankly, the product is outpriced in many areas, and I believe that with our new, our own production coming, we will be able to offer a significant price advantage to customers. We will definitely get that market back, you know, enable to enable switching from plastic to glass, which is really the main challenge. If I had to outline a challenge for the organization in our consumer division, this is specifically the number 1 challenge we have. How we perform on this when our new production comes, will really drive, you know, a lot of our, let's say, profitability. This is a key space to watch out for. You're right, it's a concern point at the moment for us also. Got it. With your manufacturing facility coming online in Q3, how much further price cut can you take? I think another 15%, 20% is something we can reduce. Without compromising our OC target of 24%. On the manufacturing investment? Yes. Got it. Got it. Also, how have the exports grown in the scientific division in FY 23? Yeah, that actually, I didn't mention the percentage, but I think the growth was more than 40%. 50%. Almost 50% growth in exports in scientific division. Very good, very good growth. Is it because of the low base, or if even if you adjust the base? I mean, frankly, it was a low base, but, so I, but I think our scientific division out of 285 crores, 50 crores is exports, including Klasspack. Got it. What was the export number in FY 20? I believe it was INR 32-33 crores, if I'm not mistaken. Okay. Got it. How? You mean FY 22, right? FY 22 versus FY 20. FY 20. I thought FY 20 would be, you know. FY 20 it would be maybe INR 10, 12, 15 crores. I don't want to say anything which is wrong, I'll come back to you on that. I know FY 22 was INR 32 crores, and FY 23 was INR 15 crores. Got it. Got it. What's the prognosis for exports in FY 2024? I mean, I don't think we'll go 50% as we did last year, but I think high double digits, you know, high teens is something we should aim for. Got it. Got it. What's the outlook for Klasspack? In the opening remarks, you mentioned you are making further quality investments? Yes. into manufacturing. I believe this was done, you know, earlier as well, where you improved the quality systems of the company. Why this second round of investments for quality? We have two plants in Klasspack, Plant One, Plant Two. Plant Two, we had done it earlier, and now we have done it in Plant One also. Okay? That was the main reason. The clear thing is that earlier there were customers who were able to accept a certain level of quality. I'm not saying the quality is bad, I'm just saying now it's pharma. Earlier, we used to call it pharma and pharma plus, okay? Now everybody wants pharma plus. In order to give pharma plus to everybody, we have to upgrade the quality specs, which we have now done in both the plants. Frankly, the entire pharma market, and I'm sure you've seen this in the various reports of pharma companies, whether it's Sun Pharma or any other large player, are struggling with their export sales to the U.S. with various issues. Because we supply to them, we are directly impacted. I think Klasspack is likely to still see a tough period till those issues are sorted. From our discussions with pharma companies, they expect things to improve towards the end of this calendar year. These are all hypotheses. Like I said, Klasspack will improve disproportionately because of the export sales. Because of the quality improvements, we've been able to dramatically increase exports in Klasspack as well, and though that comes at much better margins. We're really focusing on how to ramp up sales there in that business, and we're getting good results. Got it. It will be a drag, I think, on our scientific division in this year as well. What kind of growth rate, do you think, you know, is possible at Klasspack for FY 24? I think maybe 10, 12%. Got it. Got it. Total export one. FY 20, our export sales for, I think it was INR 17. Okay. which is now 15. Got it. Yeah. This, the export number includes Klasspack as well? Yes, that's right. Got it. That's all from my side. Thank you. Thanks. Thank you, sir. The next question is from the line of Disha Seth from Anvil Research and Stocks. Please go ahead, sir. Yes, good afternoon, sir. I wanted to check that how we are expanding our retail network. Currently, we are at around 20,000. Where are we going, more into tier 1, or we are expanding more into tier two, three? If you can throw some light. Frankly, we are not, you know, wherever there is, let's call it, you know, holes or gaps in the market, there, of course, we're adding retailers. Our main strategy is more cross-selling and upselling, which means the 20,000 retail counters that we have, 20,000, 22,000, whatever the number is, the goal here is to selling more of our products. We have, you know, six separate product ranges, and these 20,000 retail outlets do not all of them stock all our product ranges. First goal is to increase the penetration of more product ranges across these existing outlets. Second is, that within each product range, they should have more SKUs. Frankly, that's more the focus rather than increasing the number. The number will increase, that's organically, but we are not having some, you know, some very aggressive scheme to increase the absolute number of retail outlets. More plan to increase the depth of the retailer rather than. Exactly. Exactly. In non-glassware, which are the main top-selling products for us? Because it is growing Sorry, could you-? In non-glassware, which are the top-selling products? They are growing very at a very high growth rate. Look, our general range of flasks, you know, I don't want to specifically call out any specific SKU, but I can tell you our flasks have done very well. Our OTGs, our, you know, sandwich makers, then our server, there's our steel server, serving items. Frankly, it's been a very, I would say, widespread growth. It's not that any one item has contributed, like, say, disproportionately large absolute numbers to growth, and that's what gives me a lot of confidence. It's not like a one-hit wonder, you know, it's a very broad-based growth. It's not just growth in one channel, it's also growth across channels. Not only is the or the non-glassware products are doing well across the board in terms of the SKUs, but also across the channels. Thank you. It shows a sustainable growth. Okay. This INR 750 turnover, which we achieved this year, what can we expect in coming two years, considering our new Larah capacity and the new furnace capacity, which will help in our pricing difference? Frankly, that's a good question. We have always projected a 20% kind of growth number year-on-year. For consumer? Yeah, for consumer. I guess your question is for consumer, so I'm just... Yes, yes. Refer to that. The 20% growth is something that we have projected. Would we like it to be 25? Would we like it to be 30? Yes, absolutely. We would like that we hit the 30s, in the 30s for the next couple of years. For the sake of your, you know, projections, I think to be on the safe side, because, you know, anything that goes wrong in one month also dramatically impacts the growth. No, I was just thinking we would reduce prices of our glassware products, so that would not impact the estimated growth rate. That way, I was just asking. I don't think, because our volume growth has to be much more than the reduction. For example, if you reduce price by 15%, volume growth has to be at least 35%-45% in terms of quantity, then only it makes sense to reduce the volume by the price by 15%. I would still stick to that number between 20% and 30%. Sure, sure. Sir, one more question on... this is a little long term. Once we are done with the CapEx for FY 2024, and we believe there will be no major CapEx going forward, what do you plan with the cash flow? Would you plan to reward the shareholders or any other plans in that regard? Right now we are in T20 mode, I can't plan for a test right now. I frankly don't have an answer to that question. I want to focus on executing for this year, the team is totally, you know, focused on that. This year and next year are very critical for us, that we absorb all this large CapEx we have done, really, we have not thought of what happens the year after. I'm not going to be able to answer your question at this stage. It depends on the opportunity. It depends on how we do in the next couple of years. Only then can I. Okay, you're open to the inorganic acquisition, too? Yeah, absolutely. Okay. In general. If our profits go up, then automatically shareholders get rewarded one way or the other. Correct. That, that's the way we can reward them, and if we just focus on that, then. You know, we have seen in the last 10 years, as we have grown, more and more opportunities have just popped up, which were not- Yeah. -which you could never anticipate. I expect same thing will happen, but so I don't want to get defocused. Let's just focus on the next two years, on implementation of the CapEx and, you know, then achieving full capacity realization, so. Sure, sure. Sir, just the last one, and few years back, we had this AIF of real estate, which is, I think, sold now. Any other non-core assets left to sold or we are clear with that? About INR 20 crores is there, which frankly, you know, these are legacy investments and, will be sold in due, next year or two, I think we should be able to liquidate all of it. Okay, sir. There's nothing stressed. I don't think there's anything, you know, any trouble there. Okay. We should recover everything, yeah. Okay, sir. Thank you. All the best for you. Thank you. Thank you. The next question is from the line of Mr. Mano Vijay from The Financial Consultants. Please go ahead, sir. Thank you very much, sir, for the opportunity. I just want to, so now considering the fact that this year our Larah becomes operational, the second furnace, and you have mentioned it multiple times in the earlier calls that the operating leverage from, I would say from that furnace is very high if you run that furnace at around 70% capital, let's say 100% utilization. Now, this year you are saying that you will run that furnace around 70%. If you happen to do that, in that case, the margins for this year, FY 2024, would be, let's say, what you have done in this year of around 14%-15%, or you'll be close to FY 2022 margins of around 17%? I think we should cross FY 2022 margins. Okay, fair enough. This is helpful. Second, sir, regarding this, so regarding the acquisition that you have done of goel Scientific, I just wanted to understand the synergy of this business with actually a BTL. Now, considering the fact that you are developing equipment and actually instruments in that part of the business, and goel Scientific actually provides solutions rather than your products. If you can just talk about this synergy, because I believe that you have been talking about expanding BTL for quite some time, and considering that goel requires a lot of equipments as well, apart from the blown glass that those guys make. What is the synergy between these two parts of the business? That's a good question. Look, as far as goel is concerned, they have traditionally been supplying products, and actually they've been trying to do solutions. They've done some solutions, but mostly products. Now, just to explain it for in layman language, imagine you have a reactor in which you're having a chemical reaction of, say, 20 liters or 50 liters. You need to see the reaction, therefore, it's a glass vessel, and there are many, many different glass components. Now, when you, the particular scientist or the production guy who's overseeing this, he's also monitoring the pressure, he's monitoring temperature, he's monitoring the flow. There are various things they are monitoring of that reaction. What goel has been doing is supplying the glassware. What BTL is very good at automation and of the whole the process control, PLC, the process logic control system. By marrying the two, the PLC and the glass, then you provide a solution, okay? Where you can go to the end customer and say, "You want to do this particular reaction, you know, you want to purify nitric acid, or you want to, you know, that there are, there's bromine recovery, and there's many other processes that you want to do this. We have a full solution for you, where not only will you get the components, you will also get the control systems to control this whole process, and that is the big synergy. Then you play alongside the global players, because no one in India is doing this. There are a few global majors such as QVF. Radley is another company. These two companies do this, and there are a couple of others also, but there are maybe three or four guys globally, and they sell their products at very, very nice premiums because they give the whole solution. No one in India does it, and we'd be the first. That's really the main synergy if we can achieve it. Sir, in that case, so the INR 270 crore addressable market that you talked about in BTL and the INR 1,500 crores market that you talked about in goel, how these two markets expand for you? Frankly, the INR 270 crores is different. That doesn't include the process system part of it. Yeah. INR 1,500 crores process system globally. Today, goel Scientific has a turnover of INR 66 crores, okay? I believe we can address it. If we are able to marry these two, then the entire INR 1,500 crore global market becomes accessible to us, okay? That would, you know, enable... Given the cost of production of these products, especially the blownware, 500 liter flask and so on, is highly manual in nature. Our costs are definitely better or lower than what anyone else in the globe can do, including in China. Therefore, we should be able to then grab a disproportionate share of that market. Obviously, it's not so easy. It's not a cost-driven market. The market is driven more from your credibility and from, you know, customer references, all of which take a long time. By just, by putting this together in the next three months, that INR 1,500 crore market will get 50% market share, and we can go it from INR 66 crores to INR 700 crores. I'm saying in principle, that entire market gets addressable globally, but it will take time to actually address it, because, like I said, people have to be confident, and typically, you know, they have to be dependent on an Indian supplier. If something breaks, you know, we have to make sure the supply chain is able to service that and the whole equipment is not shut down because of some small breakage in some corner of the unit. We have to solve all those problems, but in principle, that becomes addressable for us. Okay. like the way you had checked. Sorry to interrupt you, Mr. Mano, may we request you to join the question queue, sir, as we have several participants waiting for their turn? Sure. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit your question to two per participant. Should you have a follow-up question, we request you to rejoin the question queue. We take the next question from the line of Lokesh Maru from Nippon India Mutual Fund. Please go ahead, sir. Thank you. Congratulations, sir, on healthy set of numbers this quarter. My question is more around the fastest moving categories within our segments that we work in, that is, Larah. Two questions on that side. Number one, what kind of on the new furnace that we have just started to work on, what kind of sustainable or steady-state ROCEs do we envisage, and at what margin would that be? That is first question. Second question is, we have seen quite some bit of moderation when we talk about the kitchenware category. There are no parallels, just when we talk about kitchenware, the leader within the space would have degrown like 12% or so last quarter. What is the kind of demand momentum that you envisage or that you are seeing on ground, let's say, not just last quarter, but in the month of April and May? Thanks. Look, as far as giving you April and May, I think it's not correct for me to give you any current numbers. I can tell you that kitchenware, one of our strengths of Borosil is the fact that we are highly diversified in our product range. Yes, there is some, you know, slackness of demand. In general, we have seen this in the last quarter also, in some categories, but other categories are more than made up for it. Our diversity of product allows us to kind of, you know, hedge, even in one, any one category is low. I'm not too worried, and whatever growth numbers- Hello? Sir, you may go ahead. I'm sorry for the disturbance. I'm saying that I don't expect there should be much change in our projected growth numbers, in spite of any one part of the market being a little bit weaker than anticipated. Coming to the first question on Larah, we've always indicated that our ROC, you know, our target is between 18%-24%. We would like to hit the 24% ROC number. That, I think our expansion should allow us to do that once we hit a certain level of capacity utilization, which, while we are sure of doing it next year, we hope that we can do it in this year itself. Margins, operating leverage has already been discussed, and the second one is will give us, you know, at least 3-4% operating leverage. That, that's the answer to that. What is our, for Larah per se, what is our salience of e-com versus GT as such? I'm sorry, I don't share that number. We don't share our channel numbers. It is, uh, quite, uh- I'm sorry to interrupt you, Mr. Maru. May we request you to join the question queue, sir? Sure, sure. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address all the questions, please limit your question to one per participant. The next question is from the line of Mr. Pranay Roop from BCMPL. Please go ahead, sir. Hey, good afternoon to all. Am I audible? Yes, please. Great. My question is regarding the consumer glassware division, and this is in context with the impending backward integration facility that will come in Q2. Currently, we are at around 40-45 CR quarterly sales run rate. If we remain at the same run rate, theoretically, let's say we clock 45-50 CR for the next Q4, even after the furnace comes in, what sort of margins can we clock in this segment then versus the current steady-state level pre-furnace? You're talking about glassware, I guess? Glassware, yes. Yes, yes. Just to give you some context, If we assume 28% as Larah margins and 5%-7% as non-glass margins, we get to around 12%-15% as consumer glass, steady-state margins. Is this a fair estimate? Where can this 12%-15% grow at the same top line after the furnace? I would say the glassware, look, the glassware margins should be similar to Larah margins in the future. Similar to Larah. Yeah. In that range, I mean, maybe ± 5% of that. It's early days. A lot of it will depend. Again, I've repeatedly said this. I think some participants asked this question before, that our glassware production capacity is going to be almost three to four times of our current sales in terms of tonnage. In order to have a healthy margin, the capacity utilization is the key driver. If I was to project 100%, just theoretically, 100% capacity utilization, the glassware margin would at least be same as Larah, if not better even. Okay? The key question and the key challenge for us is, can we increase that particular glassware sale by 3-4 x? If we achieve that, then that would mean a dramatic improvement in our blended margins of the consumer division. That's really the bet we are taking, that we can do it. Whether we can do it or not is the, you know, this question will only be answered over the next, I would say, 18 months. I'm just trying to understand, have you done any internal math, or have you done any calculations around, basically, do you have a break-even capacity, basically, what it has to utilize, to, you know, break even for that furnace? Break even, we will definitely achieve. The break even will not be an issue. We will achieve break even virtually from day one itself. That is not a concern for us. Okay, basically, inventory losses is not a concern, affecting gross margins. Yeah. I don't think that should happen. Okay. And my next question is, and again, it's linked to the same thing. In FY 2024 and 2025, on your consumer glass segment, what sort of utilizations are you building in? Like, and again, this is linked to the pace at which you can reach 100% utilization. Like, what drives this, and where are you at? Impossible to answer this question because we are building out our teams, and obviously, we would like to achieve that 100% utilization in 2-3 years, okay? If you assume September 1, 2024, just for the sake of argument, that we start our production, sorry, September 1, 2023, as we start our production, I think if we can achieve full utilization in the year 2025-2026, that would be a very good achievement. You know, first year, 40%, second year, 70%, and third year, 100%. This is, I mean, this is just one way to. It's very theoretical, this point, and, you know, it depends on the NPD that we do. It depends on how we improve our export sales. That would play a big role in this, initially, at least. How we improve our channel coverage, you know, how, what pricing we can offer our customers to switch from plastic to glass. These are big questions which are unanswered, and this is, like I said, the number one challenge for our consumer division. Got it, sir. One last data-related question. In the last quarter, what was the incremental sales and the incremental operating cost from the new Larah furnace? I'm just trying to understand how much. I don't have the data. Right. Hard to answer this question right off the bat. We can discuss this offline, separately. Got it. Sure. Thanks a lot. Thank you. Ladies and gentlemen, that was the last question for the day. I would now like to hand the conference over to the management for closing comments. Great. Well, I, thanks, all, for your healthy participation in this in this call, during this call. Just to wind up or to round up, I'm very, very excited about what happened in the last year. While margins have fallen, I think the long-term story is very much intact. There are clear attributable reasons for the decrease in margins, both on consumer and scientific side. We are building a business for decades and not for quarters, so and not even for years. I'm not so, you know, worried about that. I expect that with our team, we are on the right path. That's my, you know, personal assessment, and we will continue doing what we do. I'm sure we'll make lots of mistakes along the way, so please bear with us. Overall, I think we will achieve our objectives. That is a ROC, which is in excess of 20%, you know, somewhere around 24%. Scientific division growth of 10%-12% and consumer division growth of about 20%, over the long term, medium to long term. Thank you for all your support, and see you next quarter. Thank you. On behalf of Monarch Networth Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.