Ladies and gentlemen, good day, and welcome to Borosil Limited Q2 FY 2024 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 then zero on your touchtone phone. Please note that the 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. Good afternoon, everyone. On behalf of Monarch Networth Capital, we're delighted to host the Senior Management of Borosil Limited, represented by Mr. Shreevar Kheruka, Vice Chairman, MD, and CEO, Mr. Rajesh Kumar Chaudhary, Whole-time Director, Mr. Anand Sultania, CFO, and Mr. Balesh Talapady, Vice President, Investor Relations. We will start the call with opening remarks from Mr. Shreevar Kheruka, and then we'll move to Q&A. Thank you, and over to you, Shreevar. Thanks, Rahul and Monarch, for arranging this call. Good afternoon to everyone. The Borosil team is delighted to be communicating with all our investors once more. Borosil Limited's board approved the company's financial results for Q2 and H1 FY 2024 on November 8. Our results and an updated presentation have been sent to the stock exchanges and have also been uploaded to the company's website. Our consolidated revenue from operations during the first half was INR 562.6 crores as against INR 487.6 crores. That is a growth of 15.4% over the same period last year. During the half year, the company achieved a consolidated EBITDA, that is before exceptional and one-time items, of INR 81.1 crores as against INR 71.4 crores last year. The EBITDA margin was 14.4% as against 14.6% in the corresponding period in the previous year. Profit before tax during the first half was INR 41.3 crores as against INR 59.8 crores in the first half last year. Last year, during the first half, we had an insurance claim resulting in an exceptional gain of INR 5.1 crores. Whereas this year, we had a one-time expense of INR 2.8 crores towards due diligence expenses of acquisition opportunities. Also, the investment income is lower by INR, about INR 2.8 crores during this year versus last year as compared. And then also, depreciation and finance costs are higher by about INR 20.3 crores, primarily due to the new opal furnace being commissioned during Q4 FY 2023. During the first half FY 2024, Borosil recorded a consolidated profit after tax of INR 29.9 crores as compared to INR 44.7 crores during the same period last year. Coming to our business-wide performance, Borosil's consumer business, comprising glassware products and non-glassware products under the brand Borosil, and its opalware range under the brand Larah, started with a strong performance with the sales of INR 411.2 crores as against INR 358 crores during the same period last year. That is a growth of 14.8% over H1 FY 2023. Here, I would like to highlight that the sales and growth for H1 FY 2024 compared to H1 FY 2023 should be interpreted in the context of Diwali festival being postponed by one month this year. Sales of glassware products remained flat at INR 88.1 crores as against INR 87.6 crores in H1 FY 2023. Non-glassware products grew by 13.9% to reach a turnover of INR 165.1 crores during H1 FY 2024. We saw good growth across all our ranges and all channels. Non-glassware sales of the Borosil brand now comprise about 65% of revenue. Our opalware brand, Larah, achieved sales of INR 158 crores in H1 FY 2024, a growth of 26% over last year. Borosil's consumer business over the past few years has been substantially de-risked from being primarily in one category, that is microwavable glass products, and we have built successfully three strong pillars, which provide a concrete platform for future sustainable growth. Each of the three verticals of glassware, non-glassware, and opalware have achieved reasonable size, and we are confident to grow all these further as penetration and frequency of use on these categories grow. We continue to introduce new products and designs for everyday use in storing, preparing, cooking, heating, and serving. Our recent introductions include air fryers, hard anodized pressure cookers, opalware lunchboxes and storage containers, cooking gas stoves, chopping boards, and an entire range for chopping. The EBITDA margin for the consumer business was 16.6% as against 13.8% during the first half last year. We have seen a softening of direct costs, including fuel and raw material prices, throughout the first half. We continue to observe rises in the margin as sales rise, and we have operating leverage kick in. Nevertheless, to raise customer awareness and increase brand presence, the customer or company will continue to invest in marketing for both Larah and Borosil. Right now, our main goal is to grow our brand franchise. It is upgrading and converting customers from plastic, melamine, and steel to glass storage and opalware, as well as bringing more people in the category of microwavable goods. We keep bringing in new items to broaden our selection, including portable high-grade steel products and home appliances. We want to establish Borosil and Larah as a go-to brand in the contemporary Indian kitchen for everyday storage, preparation, cooking, heating, and serving needs. Moving on to the scientific products division, net sales during this first half of FY 2024 were INR 151.4 crores, which is a growth of 16.8% over the same period last year. This includes sales of INR 15.6 crores from the recently acquired process chemistry business of Goel Scientific of about five months. Our scientific products business comprise four product ranges now: laboratory glassware, laboratory instrumentation under the brand LabQuest, primary glass packaging for pharma customers under the brand Klass Pack, and the recently acquired process chemistry business. During H1 FY2024, lab glassware sales were INR 88.2 crores. That is a growth of 6% over last year. LabQuest instrumentation was INR 12.5 crores. That is a growth of 14.7%. However, Klass Pack has a slight decline growth of 0.7% with a sale of INR 35.2 crores, and Goel Scientific, as already mentioned, was INR 15.6 crores. We have identified several strategies to drive long-term sustainable growth in our scientific division. The government's initiative to procure through the Government e-Marketplace is gaining momentum. This channel mitigates receivables risk and could potentially streamline order processing directly from government agencies to Borosil. The expansion into new product categories leverage our expertise in lab glassware and provides cross-selling opportunities. The company is actively expanding its customer base, and we are looking to go into new industries such as food, which have not been traditionally our customers, before. Additionally, we are also establishing an OEM business line to supply critical items to some customers. With these initiatives, Borosil is well positioned to maintain its dominant position in the domestic market. Furthermore, the company is also experiencing healthy export sales growth of lab glass products as well as vials. In lab instrumentation, Borosil Technologies is committed to expanding its product offerings and customer base. Recent advancements include the introduction of a mini pilot lab reactor, bottle top dispenser for hazardous acids, and a range of products catering to nutrition and environment sectors. Leveraging its established customer relationship in the Lab Glassware business, Borosil aims to enhance customer penetration for LabQuest products. Additionally, the team's recent launch of process system has opened doors to new customer segments, including API and bulk drug manufacturers, as well as chemical producers. In the Pharma Packaging business, while we successfully gained through new customer acquisitions, our Q1 results reflected a decrease in revenue on a year-on-year basis from a few existing clients. However, Q2 has grown by 22.8% on a sequential basis. This is a promising sign. We believe going forward, we'll be able to maintain this momentum. However, if you look at the entire H1, we are still slightly lower this year versus last year in the pharma packaging space. Through Klass Pack Limited, our subsidiary, the business purchased 94.73% of the shares in Goel Scientific in FY 2024. With this transaction, Borosil's scientific business will benefit from multiple synergies. It will expand our current product line by adding complementary products that can benefit from our strong sales and distribution network as well as our brand. With the combination of Borosil's R&D capabilities as well as Goel Scientific's specialized glass blowing talent, will allow the company to provide its clients top-notch goods that are created, that are manufactured in India. Deep, deeper market penetration, entry into new markets, improved product offering, and an inventive range of products will allow us to benefit and drive synergies from the merged company. EBITDA margin for scientific products during H1 FY 2024 was 9.4%, which is a substantial decline as compared to 16% in H1 FY 2023. This is mainly driven by the losses we have had in LabQuest as well as in Goel Scientific. And the reasons are slightly different. In the case of LabQuest, we've been investing in growing our technical team and R&D expenses are more than proportionate than the increase of revenues. It's a very nascent business. We are a young company and therefore, it will lose some money as we go through the investment phase. However, as the company grows, LabQuest, the product range increases, these expenses will normalize, and it may take another 1 or 2 years for this to happen. The cost of prototyping will also reduce as a percentage as we scale the business. In Goel Scientific, margins have declined, because of lower sales and higher fixed costs. However, you know, it's the first 5 months that we acquired the business. There are many synergies that are yet to be put into place. And, you know, there will be times that will take some time for the culture adoption to also happen. So we expect, you know, much better results going forward. As far as Klass Pack is concerned, EBITDA margin has declined in this year compared to last year, primarily owing to, again, to lower sales during the period. Gross profit was also lower, owing to increase in direct costs that could not be passed on to customers. However, we see the situation has improved in Q2 compared to Q1, and we should see an even better Q3. And we are speaking with many customers who have potentially large order volumes, and we hope these should kick in in the next quarter or two. Coming to CapEx, the new Goel Scientific pressware facility of 25 tons per day in Jaipur is estimated to be commissioned in Q4 FY 2024, in the early part of Q4 FY 2024. Coming to other corporate action. In previous communications, we detailed our intention to reorganize the company's operations into two distinct entities which are both traded on the stock exchange through a comprehensive arrangement scheme. The appointed date for that scheme is first April, 2022. We are very pleased to inform you that the NCLT Mumbai bench by this order has sanctioned the composite scheme on second November, 2023, and we have received a certified copy of this order on sixth November, 2023. As a next step, we need to file a certified copy of NCLT order with our registrar of companies to make the scheme effective, and we believe the listing of Borosil Scientific will happen sometime in the month of January, 2024. We continue to be very optimistic about both the consumer and scientific businesses' medium term prospects. Even though there may be occasionally slow growth along with cautious consumer behavior, we expect strong growth in our industries due to positive long-term tailwinds. Our main priorities will be expanding our customer base, launching cutting-edge new items, and streamlining our supply chain as well as marketing channels. We will continue to make investments to bolster our brand's visibility. To guarantee steady growth in the scientific sector, we intend to leverage our dominant position in lab glassware. Our goals are to increase our pharma packaging offerings through Klass Pack, and support the growth of instrumentation industry through LabQuest, mainly import substitution, and we endeavor to hit double-digit revenue growth for this business in the medium term. With that, I'd like to throw the floor open to questions. Thank you. Thank you very much. We'll now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Rahul Dani from Monarch Networth Capital. Please go ahead. Yeah, Shreevar, thank you for your detailed explanation and the conversation of the set of numbers. Shreevar, just coming to consumer, you know, Diwali has been shifted this year. So how do you see the overall demand trend? I believe in today's interview you were saying some slowdown, you're seeing some kind of slowdown. So just wanted to get some understanding as to how do you see the demand conditions in the consumer side of the business, and how do you see the margins sustaining in this division? Yeah. So look, when I say a slowdown, frankly, we had, given last couple of years, we had expected a growth to be higher than what we are seeing. So that's in that context, I would say there is a slowdown compared to expectations. However, I think we've done fairly well. If you look at even the first six months, we've had a growth of roughly 15%-16% on the consumer side of the business. And if I look at what's happening in the market with other listed players, you know, we, you know, we, we may be slightly better off than them. That being said, there's definitely, even at Diwali time, there's been, the, the momentum has been not as expected. And it's hard to really know what the reason is, but I see that there is some pressure on sales. Maybe it's the opening up of the market, a lot more opportunity available for customers to buy many more goods than in the last couple of years because of COVID, supply chains were in trouble. So now that's all gone away. So maybe that's what it is. I'm not quite sure. Margins, I don't see... Yeah, margins will continue improving as we have, as I already mentioned, operating leverage, you know, has started kicking in, and as we grow our sales, even though at a slightly lower pace than what we had, you know, internally thought, the operating leverage will continue to kick in and margins will keep growing. So I'm not so concerned about margins, frankly. Sure. And just on your opalware division, you know, what kind of capacity utilization have you reached? And also, we're hearing Cello is also setting up a new capacity for opalware. So do you see enough demand for opalware, or do you see some kind of pricing pressure to also to come in o palware? Well, I mean, as far as our capacity utilization is concerned, on the opal side of the business, our I think we'd be closer to 75%-80% now, okay? Which is quite good, and we hope that we can come... You know, you really, the business starts making a lot of profit in the last 20% of sales. So we hope we can achieve that in the coming year. Which is, I mean, even this number is quite good because we doubled our capacity in the last year. So as we close the year, if we achieve 75% even, I think that would be very attractive from a, from a, you know, performance perspective, and I hope we can do that for this year. Next year we should tend closer to the 100% level. As far as competition is concerned, there's obviously, there's obviously competition, but I'm not sure that the pricing is coming from other opal players or whether it's coming from other product categories, you know, such as, like I said, bone china or melamine. I think the pricing pressure is there across all categories and not specific to any one player that you may have mentioned here. Our new capacity, I think whatever they have come up with has already been announced a while ago, and I don't think there's anything new further over that, which at least my information is that. Sure. Just the last question from my side. In the scientific division, the profitability has improved. How do you see this for the year, for the full year? What kind of margins can we expect in the scientific division? See, the scientific division, there are basically three drags of profit there. One has been LabQuest, and that is mainly more investment driven. And that—okay, to put it another way, if when we say set up a new CapEx on our consumer side, we're spending INR 200 crores, INR 300 crores, INR 400 crores on CapEx, and then that just goes into your gross block. In the scientific division, that's not the case. You're putting in the same kind of thought process and new product, except you're not putting it in plant and machinery, you're putting it in way of people and knowledge. So it doesn't show, you can't put it, you can't write it off as CapEx. But the fact is that you're just building capability, which is the same thing like putting up a new furnace. You're building capability. But unfortunately, the accounting standards aside, that you have to write it off. So, that is a drag on the PNL for sure, in the short term, as far as LabQuest is concerned. However, on the flip side, when you get through that period and you are able to leverage that knowledge you've built, and you're able to sell those products at some scale, then suddenly the margins look very good because you don't have, you have no cross blocks, so your return on capital starts looking very interesting. So that is one big drag for growth of our profit margin there, on the scientific side. The other one, like I said before, is that Goel Scientific, we acquired the company. There are certain challenges in terms of cultural integration and in terms of, let's say, improving sales, driving synergies, which I think, you know, will take some time, which is the case with any acquisition, and that in the initial period, has also dragged our profit down. And on Klass Pack, I think there it's more a business issue, which we need to solve for, which is lower, pharma packaging demand. So out of the three, two issues are well within our control. Pharma packaging demand is not really within our control. So the first two issues, I think, will help us rebound and in fact, surpass our original, let's say, you know, whatever our steady state margins were, we should be able to really surpass them. In the next, I don't know about next six months, but definitely in the next eighteen months, I think that should happen. Scientific business is something which is a very attractive business from a, you know, cash flow and from a steady state, return on capital employed perspective. Disruption is also lower here, so it's a very good defensive business, and we will continue growing that business to the best we can. And I think the margin profile, like I said, will bounce back to the norm, if not higher than the norm, once these two issues that I've highlighted come under control. Sure. Thank you, and all the best. Thanks. Thank you. The next question is from the line of Priyank from Vallum Capital. Please go ahead. Yeah, hi. Thanks for the opportunity, sir, and many congratulations for scaling up the opalware side of your capacity. If you can highlight how the growth in the markets within domestic and exports has been, how has the growth been over there? And which channel you have seen the most aggression coming up with your new sales, new capacity getting consumed? Look, I think for us, we are primarily a domestic player. Of course, we are exports, and we do sell in various markets globally. But I would say 90% of our revenues comes from domestic. So while we are trying to scale up our export business, the numbers are not as big, and as, you know, worth discussing at the moment. But on the domestic side, we have seen growth actually across virtually all channels, whether it's trade or large format retail. You know, large format retail was very badly impacted for many years, last three, four years. So right from COVID, then, you know, some changes in the industry with the leading players shutting down or, you know, going into bankruptcy. So we've seen some bounce back there. Even e-commerce, of course, has been strong. So I would say it's fairly broad-based growth on the opalware side, and that's the reason we have been able to consume you know some amount of our capacity that we a reasonable amount of capacity that we've added. Also, I would say it's driven you know we've introduced some new products which have also helped. So overall, I'm quite satisfied. Like I said, if the market had been a little bit better, I think it would have been you know it would have just given us a little bit extra edge. But unfortunately, that's not been the case yet. But we know we are always here to continue trying, and I'm sure we will be able to consume the entire capacity in the next, like I said before, by next year. Perfect. Sir, our ground channel checks do suggest that market leader also has a large capacity unutilized, and they have been aggressive in the modern trade. But when you say the competition and consumer having more choices available now, have you seen any significant change in the industry competitive landscape, as well as if you can allude more on the price changes within bone china, melamine? Are they hurting more, or is it the industry themselves having more supply is having a higher competition, or there is no change as such? I mean, look, at the margins, there may be something plus, minus in some specific markets or in some specific product, but broadly, I don't see any substantial changes in the industry itself. Yes, I do believe that this year there has been higher unorganized players in general, in all spaces. And therefore, there has been competition more from the unorganized sector. That's my belief. I don't have any data, frankly, to back it, but just anecdotal kind of points I'm sharing with you. And that has been more of a challenge versus our direct competitors, you know, doing anything on pricing. I don't believe that. They're all very, I would say, responsible players, and they are, they're all very organized. And you know, I believe that they continue acting in that fashion. I don't see that as a stress at the moment. Perfect. And, sir, just on the clarification, when we say your capacity is 84 tons per day, which roughly adds to 30,000 tons, this would be a nameplate capacity, right? How much of the capacity or the production that we can have at the optimal level? If you can help us with that. About 80% of that. 80% of that. 80% would be an optimal level? Yes. In the existing plant, do we have any further space to add further any furnace? Or once this comes for a shutdown or maintenance, we will have to go for a greenfield, right? In case we want to add a further capacity. So our— In the same plant, our third furnace for borosilicate glass is coming, so that is already coming at the same plant. And that also, we are putting our 25 ton per day plant. We can increase it to 42 tons, okay, in the same plant. But yes, beyond that third furnace, to put a fourth one, we have to... If the trade-offs of that, then that may have to be at a different location. That, and that's true. There is land available. There's land available. We could also buy, put it there, but even strategically, we may wish to put it somewhere else. Right. And that's applicable for opalware division also? That's right. That's because, yeah, the opalware and the glass pressware, both are in Jaipur, in the same plant. Got it. Sir, if you can help us, how much would be our loose sales within the opalware category? And, how many new designs do we generally come up in a year, if you can help us on the opalware side? I'm sorry, I don't understand. What does loose sales mean? I'm saying a non-set dinner set, which is sold. There would be a plates which are sold in a standalone basis. I mean, loose packets which are also getting sold. Do we have any segment sales over there? I don't think we have anything, anything of any nature like that. That's, I mean, we could be selling whiteware, which is, I don't know if that's what you mean by looseware, but whiteware is sold, which is just without a design, but it's sold in proper packaging and everything. So, I'm not sure what you mean by looseware, but we are selling. I would say even whiteware sales are very low for us. Mainly, we are selling dinner sets and gift sets, per se. Got it. How many new designs do you plan to introduce every year? I mean, it depends on customer, you know, feedback, but we have, I would say, you know, at least 20, 30 designs every six months come out, at least, maybe more. Got it. Got it. Got it. And just last question on how has been the Diwali sales while we have been into this month, if you can help us with that? So I believe I already addressed the point that the sales have not been... I mean, you look at the first, you look at the first 2 quarters, and sales have been, more or less in line with that. Maybe there's been some bump up for Diwali, but I can't say it's been, it's been a bumper Diwali, nor can I say it's been a disaster. So it's, it's going okay. It's going okay. I obviously can't share exact numbers with you. Got it. Got it. Thanks a lot for answering all the questions. Thanks. Thank you. The next question is from the line of Pratik from Girik Capital. Please go ahead. Yeah. Hello, yeah, this is Dhaval Shah from Girik Capital. Nice to see the ramp-up that's happening in the opalware. So my question is on the balance sheet front. The first being the investment, there is a markdown of around INR 4 crore as compared to March, and there is also an expansion in the working capital. So, if you could help us understand, what is that? Is it seasonal or what is it? Yeah. As far as working capital is very clear, there's, it's a seasonal thing. Because end of September would, you know, would be the highest level of working capital. And that also is mostly inventory, frankly. Yeah. At the end of September, inventory would be at the highest point, because Diwali is in November. Right. So that there's no. If you compare September to September last year, there would be some change, but not that material. Coming to the markdown, this I'll let my CFO answer this question. Sure. The markdown on the investment is temporary. I think we... That would get- Sorry for the interruption, sir. Can you please come closer to the speaker? Your voice is very low. Am I audible now? Yes, sir. Little loud. Yeah. Can you hear me now? Yes, sir. Yeah, better. The markdown on the investment is a temporary markdown in a real estate fund, basically, where we had invested maybe about 7-8 years back, and we believe this markdown should go away in the next 3-6 months. Okay. So you will - So we are marked up again, is what you mean? Yeah, I mean, I think, we have spoken to the fund manager. I think it's temporary in nature, and we should, we should again be able to mark up basically this by the end of this year. Okay, okay. This other current assets has gone up from INR 33 crores - INR 58 crore. What is it, what is leading to this increase compared to March? This is primarily on account of our GST credits, because we have done a lot of CapEx now, and we have accumulated a lot of GST credits. It's primarily because of that. Okay, okay. How do we see the debt on the books currently and going forward, you know, post the demerger? How will the debt be on the consumer side of the business and the pharma side of the business? So the overall debt on the business as on thirtieth September is about INR 215 crores, and we have about INR 90 crores of cash. So net debt is about INR 125 crores. The borrowing will be primarily on the consumer business. Okay, okay. And so on the CapEx front, how are we placed for this year and the next year on the consumer side? I think most of our CapEx is done this year. I think maybe about INR 30-INR 40 crore is left for this year, which is primarily because of the borosilicate furnace. Right. Next year, as far as the project is concerned, we don't have any CapEx. It will be all the maintenance CapEx for this year. Maintenance CapEx. Okay, okay. So that would be, roughly, equal to the depreciation amount? Broadly. Broadly. Okay, fine. So now we did around INR 130 crore purchase of planting machinery and another 30-40 crore will be spent in the current year. And we paid around 20-23 crore towards the purchase of the at the acquisition. And the entire payment is done, right, for the acquisition? Uh, yes. Okay, there is nothing further pending. Okay, okay. Okay, so then our debt should be then, should be this peak number, right? INR 215 crore. I don't think that we need to take further debt. Okay, okay. From at least a 1-year perspective, this should be the number. Okay, okay, okay. Okay, thank you. Thank you for answering the question. Thank you. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Manav Vijay from Deep Financial Consultants. Please go ahead. Yes, thank you very much, sir. Sir, I just want to ask you, first of all, if you can tell us, so of the, of the roughly INR 190 crore of CWIP that is standing in the books as of now, so some, I believe, would be for the pressware, which you already mentioned will become operational in quarter four. If I heard correctly, sir, pressware was roughly INR 100 crore of CapEx. Rest is INR 90 crore stands for what? Okay, again, yeah. So, so the overall CWIP includes, basically one is your borosilicate, as, as you rightly said, and then there is a solar project, which is a 6.5 MW solar project that we are doing in the state of Rajasthan. So that CapEx is around INR 40 crore. So that, that is also something which is a part of the CWIP, and, that will be, that, that has been just been commissioned in, in, as we speak. Okay. And this 6.5 MW will help you to have what kind of saving in your power cost? Maybe approximately, about maybe INR 6-7 crores a year. INR 6-7 crore a year. Okay. And this pressware will become operational in quarter four. What about the borosilicate CapEx? When that will become operational? Yeah. So that will be... so the project will be commissioned somewhere in January 2024, and this is where we will capitalize this entire project once the commercial production is increased. Okay. Pressware is a borosilicate. That's the same thing. Yeah, pressware is a borosilicate. That's right. Okay. And cubic project anyways, is as of now is on a back burner? That's right. That's right. Okay, perfect. My next question is, sir, as of now, on a roughly INR 650-INR 660 crore of your gross block, we are doing. So we have roughly around INR 64 crore kind of a depreciation, which is roughly 10%. Now, within this year, another roughly INR 200 crore will get added to the gross block. So we move up roughly INR 850-INR 860 crore. So next year, would be around INR 90 crore of depreciation. Would that be a safe number to work with? No, sorry, how have you arrived at the INR 90 crore number? So basically, as of now, we have around INR 660 crore of gross block. Okay? Approximately INR 200 crore will get added to the gross block in this year. That takes up to around INR 850-INR 860 crore. We have INR 16 crore of depreciation in this quarter. On an annual basis, it becomes INR 64 crore, so approximately 10% of your current gross block. Yeah. Now, when you add INR 200 crore further to it. So 10% depreciation on that as well for the next year. So INR 85 crore-INR 90 crore, is that a safe number to work for depreciation? Yeah, you can assume the numbers for now. Yeah, broadly, you're right. Yeah. Okay, perfect. My last question is, sir, if you can also tell us the tax rate for this year and next year? 25%. We have a 25% tax rate for this year and next year. Twenty-five? Twenty-five, yeah. Okay. Thank you, and all the best. Thank you. The next question is from the line of Aditi Bhattad from Niveshaay. Please go ahead. Hello. Yes, ma'am, please go ahead. Hi, good afternoon, sir, and congratulations for the set of results in 42. So I wanted to understand in the Klass Pack division, we have already completed the capacity expansion, the investment in the capacity expansion, and, we don't see any further, demand from domestic market in Klass Pack, is it? Or are we targeting on some export, demand for the same? Yeah, look, export sales have been growing quite well in Klass Pack. Unfortunately, they've been hidden by the domestic reduction in sales. So, domestic market for injectables has slowed down. In fact, two of our main customers have had challenges, one with U.S. FDA kind of issues, and the other has moved their product to BPCO product, which means that they want a lower cost option. And that's the reason we have, you know, we've had some reversals there. So we are looking at other customers, and we continue to kind of try and find alternative, you know, usages for our product, both domestically and in exports. And, yeah, unfortunately, we've done a lot of CapEx, but our capacity utilization is very, very low at the moment. Sir, from the current facility, what would be the capacity utilization for Klass Pack? Are we utilizing it completely or even that is underutilized? No, no. Actually, the CapEx is already deployed, so now the capacity, the capacity has gone up, and we would be utilizing less than 50% of our capacity at the moment. That's including your CapEx, right? Yes. Maybe around 40. Okay. Yeah, that's the issue. Okay. Okay, okay, I got it. And how do you see the export market for opalware? Because, we were targeting a good export, demand for opalware from Europe and other areas also. So do we see, so is it in line with our expectations? Yeah, yeah. So exports, as I already mentioned earlier, is roughly 10% of our business, and it's growing at the same rate as the domestic business, meaning that 10% share has been protected. And we have been focusing more on domestic market in principle because we get higher realizations there. But exports also, we've been trying to grow our brand in the Middle East. You know, we've got good traction there. And in some parts of Europe, as you mentioned, we are selling as an OEM. And the demand is growing well, but I can't say that we are, you know, looking to sell a large chunk of our capacity. It will be in the range of 10%-15% only in the export market. Okay, okay. Yeah. Thank you so much for now, I'll get back in touch. Thank you. Thank you. The next question is from the line of Hitesh from Kotak Capital. Please go ahead. Hi, thanks for the opportunity. Sir, could you give some more details on what is happening in Goel Scientific? When do we expect the integration to be complete? And, by when do you see a break even, and also what is the steady state margin that probably we can have from this vertical? The Goel Scientific is, you know, and we acquired the company end of April, early May. It's been about five months or six months since we acquired the business. There are many things that we need to put in there. For example, SAP, we have deployed SAP there to get the information flow to be on a, you know, daily basis. There are things which are there. There are basic things in terms of, you know, the sales processes, the production processes. All of it takes time. While moving from one culture to another culture, it just takes its own time. There's a lot of training is being done to the people. So, my view is integration will take another six more months to get this into the same kind of setup that we have here at Borosil. As far as the margin profile, it's actually quite attractive. So if you see the gross margins are good. The problem is that there's a lot of the leverage we need to get in terms of the product and selling. There's a lot of opportunity which is not being captured yet. For example, the sales team doesn't exist on the east of the country. We want to expand sales in the east. Even in the south of the country, we need to improve our sales in Hyderabad. It's a market where there is a lot of potential. So, on all fronts, whether it be sales, whether it be operations, whether it be procurement even, there are challenges which we are addressing, but we have to take the team along. There's a training aspect associated with it. There's a culture aspect associated with it. So I think six months is what it will take.