Ladies and gentlemen, good day, and welcome to the Borosil Renewables Q3 FY 2022 earnings conference call hosted by Axis Capital Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Kevyn Kadakia from Axis Capital Limited. Thank you, and over to you, sir. Thank you, Janice. Good afternoon, everyone. I'm Kevyn Kadakia. I'm part of research for the industrial infrastructure and logistics sectors at Axis Capital. On behalf of Axis, I'm pleased to welcome you all for the Borosil Renewables Q3 FY 2022 earnings conference call. We have with us the management team of Borosil Renewables, which is represented by Mr. P. K. Kheruka, Executive Chairman, Mr. Ashok Jain, Whole-time Director, Mr. Sunil Roongta, CFO, and Mr. Swapnil Walunj, Head of Marketing. We will begin with the opening remarks from Mr. Kheruka, followed by an interactive Q&A session. Thank you, and over to you, sir. Thank you. Good afternoon, and welcome to the Borosil Renewables Q3 FY 2022 investor call. It is a pleasure to be interacting with you once again. The board of Borosil Renewables approved the company's financial results for Q3 FY 2022 on February 8. Our results and an updated presentation have been sent to the stock exchanges and have also been uploaded on the company's website. During the quarter, the company recorded net sales of INR 168.5 crore, an increase of 20% over the corresponding quarter of the previous year. The average factory prices of tempered solar glass during the quarter were about INR 141.5 per sq m per mm as compared to INR 112.9 per sq m per mm during the corresponding quarter in the previous year. Export sales during quarter three FY 2022, including to customers in SEZ, were INR 44.6 crores, comprising 26.5% of the turnover. The company recorded net sales of INR 465.2 crores during the nine months ended December 2021, an increase of 51% over the same period in the previous year, of which exports, including to customers in SEZ, recorded an increase of 84% to INR 131.9 crores from INR 71.6 crores for the previous corresponding period. From the second quarter of the current financial year, we saw inflation in prices of natural gas. Prices of electricity packing materials have been escalating along with a sharp rise in export freight costs. Fortunately, high realizations have more than covered for these cost increases. EBITDA during the quarter, including a subsidy of INR 5.3 crores from the government of Gujarat, was INR 75.5 crores, corresponding to an EBITDA margin of 44.8% as compared to a margin of 38.3% in Q3 FY 2021 and 36.7% in the previous quarter. Higher EBITDA led to an increase in the profit after tax, and the company has recorded a profit after tax of INR 45.7 crores in the quarter. I'm happy to say that the total EBITDA of INR 202 crores earned in the previous year has been matched within the first nine months of the current financial year. While the operations of both our furnaces have been optimal with good output, we are continuing to see strong demand for our products. Increase in installed capacity of renewable energy is high on the priority of the Government of India, which continues to provide a strong thrust to the installation of solar power projects. The Government has announced three major steps underlining its commitment to the establishment of a strong domestic solar manufacturing ecosystem. The first is the announcement of an additional allocation of INR 19,500 crores under the PLI scheme for solar cells and modules, raising the total allocation to a very impressive INR 24,000 crores. The second is the formal announcement of basic customs duty on solar panels at 40% and on solar cells at 25%, effective 1st April 2022. The third is the scheme of approved list of modules and manufacturers introduced some months ago, whereby effectively only Indian manufacturers of solar modules are able to supply to many types of government tenders, which has now been extended to open access and net metering projects as well. As a result, we're expecting that large incremental capacities already announced will now be implemented. Even though 14 GW of solar module manufacturing capacity exists in India, actual production was about 5.5 GW during the financial year 2021. We see installed capacity rising to 50 GW of solar panels within the next three years. This will give a great boost to domestic production of solar equipment in India, causing a major shift away from imports from China to sourcing from domestic manufacturers. Consequently, we expect increased demand for solar glass in India. We are in advanced discussions with many of these manufacturers who are all looking to have a local source of supply for solar glass. Solar power is undergoing a phase of intense expansion. European Union has launched a solar accelerator program to promote production of solar modules in Europe. Solar components are likely to enjoy a sweet spot for the next many years. It is heartening to note that the solar installations in the country have picked up momentum in the current year. The installations in first nine months of FY 2022 have been 9.2 GW, which has matched the earlier best for a full year. This trend is expected to gain further ground, and the level of annual installations is expected to accelerate to significantly higher levels. There's a growing demand from export customers and looking to the expected significant rise in local production of solar modules in major markets. That is to say, Europe and USA, we see an attractive future growth in company's exports. There have been structural shifts in the demand for solar glass on the back of technological changes in solar cells and modules. The module sizes are becoming larger, and there is a growing preference of bifacial modules using two glasses in each module as against one in the case of a conventional module. As a result, there is a shift in favor of thinner glass of two millimeters globally. Borosil is equipped to meet this to a great extent, and is also building significant capacity for such products looking at future growth. The entire global solar PV value chain has been going through a certain amount of volatility in terms of demand, supply and prices. We as a country also are similarly impacted. On one hand, the prices of inputs have risen, and on the other hand, the solar glass export prices from China have declined in the last few months. This is likely to cause some moderation in the margins for the company and also for the competition. However, the demand for solar glass for the company remains high in both domestic and export markets. Moreover, the company is active in examining and reexamining avenues for cost cutting and making operations more viable at all times. As many of you are aware, Borosil Renewables is currently undertaking a brownfield capacity expansion, a third solar line with a capacity of 550 metric tons to meet the growing demand. This will enhance our capacity from 450 tons per day to 1,000 tons per day. Commercial production from SG-3 is expected to commence in the second quarter FY 2023. Further, the company's board has already approved a further expansion of capacity through solar glass lines four and five in order to raise the capacity from 1,000 tons- 2,000 tons per day. Work on the SG-4 project is expected to commence during the second quarter of CY 2022. Given the lead times required for capacity expansion, this additional capacity can come on stream in the third quarter of CY 2023. With that, I would like to open the floor to questions that you may have. Thank you. Thank you very much. Ladies and gentlemen, we will now begin the Q&A 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 handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Avnish Khara from VT Capital. Please go ahead. Hello. Good afternoon, sir. My first question is regarding the soda ash. As I understand, we had a fixed term contract that ended in December. Going forward, what is the status of how we are going to be procuring soda ash? And do we expect margins to be affected despite higher solar glass prices? I shall ask Mr. Ashok Jain to answer this question. Yeah. Soda ash contract which we had, in fact, has spilled over to the current quarter, which is January to March. Certain quantities were balanced out of the earlier contract, and also we had negotiated certain additional volumes at a slightly lower price compared to the current prices. Impact in the quarter January- March is going to be minimal in that respect. Going forward, from April onwards, the impact will be felt fully, which is like the prices of soda ash have run up by almost 60% in the last couple of months. That is true for all the buyers of soda ash, including our competitors. To that extent, it will impact the costing for all the solar glass manufacturers. That would certainly lead to compression in the margins, in case the selling prices do not expand. All right, sir. My second question is regarding the scenario in India. I think it's the domestic production is not going to be ramping up as quickly since it's just 5.5 GW. Do we expect a transitional slowdown in the solar demand in India as production tries to catch up with the supply? I don't think there is going to be a letup in the demand for solar modules. The question is from where it will be met. The second question is that we do have a manufacturing capacity of 14 GW in the country, which is existing. I don't see that there's any possibility of any reduction in the demand for solar modules or the supply of solar modules in India. In fact, just to add here, in fact, a lot of tenders have already been awarded and a lot of pipeline is already existing for the solar installations. Almost, I'm told, 75 GW of pipeline exists in the country in order to make the installations in next couple of years. In terms of the installations, we see a significant rise, in fact, on the contrary to what your statement is. Now, in the case of module manufacturing capacity also, all the large players who have announced their plans are quickly adding up the capacity. Even the capacities would be a considerable quantity of capacities added in next one year time. There should be a significant increase in the activity of manufacturing and installation both. Right, sir. Sir, if I could just squeeze in one last question. Where do you see solar glass prices in the next couple of quarters? Do you see them tapering off from INR 141, or do you see some kind of rise from here as well? See, this is a very difficult question to answer, which I simply cannot hazard any guess on this matter. Our prices are, you know, dependent on the international prices. What turn they will take is something which is purely speculative. I would not like to hazard any guess on this. Okay. Sure, sir. Thank you so much for answering my question, sir. Thank you. Thank you. The next question is from the line of Devesh from DS Investment. Please go ahead. Yeah. Hi. Good afternoon, sir. Congratulations for good results. Quick questions on the next leg of growth, right? Our capacities, SG- 4 and SG- 5, could you help us understand in terms of the financing or how would these be financed? SG-4, we had planned to finance by way of equity and debt mix. The right mix will be known in a couple of months. In terms of the equity raise, we do have plans to raise equity for SG-4 The exact amount will be known in few months, maybe after April. In terms of SG-5, it is still away, so we will see whether the internal accruals would be sufficient, and we do not have to raise further equity for SG-5. Okay. Got it. In terms of export, even there is a pattern of healthy mix of export growing in each quarter right now closer to 26%. If you can throw some light in terms of medium-term, how do you see this percentage panning out from here? We are confident to maintain this trend of about 28%, including the SEZ exports of solar glass. We could potentially increase the export even beyond this. We have to balance out between the domestic requirement as well as the export market. Just for the information of the participants, the export markets are growing significantly, particularly in Europe, Turkey, and also USA. There is very much buoyancy in those markets in terms of requirement for glass as the module manufacturing activity is significantly rising in those geographies. We do have a good amount of growth prospects in those markets. Great. Just connected question. In last call you indicated that export margins are slightly inferior to what we get in India. Is that still the trend or do you see that improving given the demand is exploding outside India as well? The margins are slightly lower, but they are not very abnormally placed in terms of the comparison. We see that similar trend to continue for some time. Okay. Thank you. That's all from my end. Thank you. Thank you. The next question is from the line of Jinesh Sanghvi from Jinesh Sanghvi & Company. Please go ahead. Yeah. Hi, sir. Couple of things. If you can share the volume numbers this quarter, because if I look at the sequential trend, we have seen the revenue growth of around 5%, wherein the realizations have grown by around 20%. Has there been a dip in terms of volumes this quarter, or is there some slowdown in terms of demand that has been seen in this quarter? If you can throw some light on that. Practically there is no dip in the volume, which is significant. In terms of India's requirement, we have to actually account, we have to rather exclude a certain amount of sale which has not reached the customers. There has been reversal of the sales, to the tune of about INR 5 crore or so, on cost basis, and that has led to this kind of situation. On the volume front, we are flat out running full capacity and selling full capacity. As of 31st December 2021, actually, if you look at the finished goods stock in the factory, it was virtually zero. There is no problem from the demand side. We continue to believe that the entire production can be sold without any difficulties. We actually have only about 35% market share in India, which also means that a lot of demand is available for us to service. We only have a constraint on the production side, which will be addressed after we expand the capacities to some extent. Okay. Basically this INR 5 crore reversal on the cost side would kind of get accounted in the Q4 numbers. Is that right? Practically, yes, provided there is no such kind of carry forward at the end of March, which generally we would like to avoid, but it all depends on the situation. Yeah. Last couple of other things. One, if you can share the current realizations of the solar glass prices which is there. On the new capacity, how fast can the new capacity ramp up post-commissioning? We already mentioned about the new capacity coming up in the Q2 of FY 2023, which is July to September 2022. That quarter we'll see the production from current expansion coming up. In terms of the prices, we already said that there have been certain correction, the moderation in the prices. To what extent exactly it will pan out for the entire quarter, we can't commit anything right now, but there is the small decline in the prices. Okay. Sir, on the ramp-up, just wanted to understand, can it be ramped up to 70%-80% immediately, or it would take around five to six months to ramp up and stabilize the capacity? Yeah. In terms of the production, generally we like to operate the furnace at full capacity more or less. One can imagine that for initial couple of months, the capacity utilization could be a little lower, 85% or thereabouts. In a couple of months, one can come to higher capacity. This we already displayed in expansion of SG-2, where we could come up to higher capacity immediately in couple of months, two months or three months. We like to operate it at optimum capacity. Fine, sir. That was helpful. Thanks a lot, sir. Thank you. The next question is from the line of Mohit from DAM Capital. Please go ahead. Yeah. Thanks for the opportunity, sir, and congratulations on a very, very good set of numbers. My question is, when you say that you are tying, you are in talks with the new developers or new solar manufacturing capacities coming up, are you looking at, you know, some kind of volume tie-up? Will there be any price certainty also? That's the first question. In terms of how the prices work in the solar glass market, as you have seen, is based on the month-to-month contracts. It's not annual prices or like that. Generally speaking, the customers also expect the landed cost as a benchmark to be measured or in the same ballpark. That's how it operates. There are some large buyers who are also willing to tie up at some fixed price or some formula which is different than market prices. It will all depend on how negotiation with each of these buyers take place finally. Based on that, we will arrive at the pricing mechanism for each of them. It may not be uniform mechanism. Whether it is cost plus basis or whether it is some standard price or in most of the cases it will be market related price. Sir, my second question is that given that the PLI scheme has been enlarged and the number which you're talking about may be 25-30 GW, is there any plan to ramp up the capacity more than 12.5 GW which is in the sales at this point of time? At this time, I think, we are just thinking of 12.5 GW and no more. Because there are other capacities which have been announced by different players in the country, and we'd like to see what happens with them. For the time being, I think this is it. Thirdly, what is the status of anti-dumping duty from the Chinese solar glass? I think it's expiring this fiscal year, right? Am I right in saying that? Yes, it is coming to an end in July. We have already applied for an extension of the same because there is no change in the circumstance to continue to dump. We are awaiting the result of our application. One more question, sir. Sir, given that our gas requirement will go up, can you just let me know what is the demand requirement at 2,100 TPD? What is the gas requirement in MMSCMD terms? And are you procuring gas in spot markets? Is there any plan to tie up to slightly longer term, given that gas would be a significant cost item for us? We are not buying any significant amount of gas in the export market. We hardly buy any quantity. We have long-term contracts or medium-term contracts with GAIL Limited. We are again negotiating with them for the expansion, that is SG-3, and we should conclude the contract with them in the next couple of months. For SG-4 and 5 also, we will similarly require the gas, which we would like to cover under certain contracts, which would be medium-term, but we restrict our buying in the spot market. With the pricing linked to crude plus some flow, is that the right assumption? There are different basket or different benchmark pre-contracts are available. Generally, they are based on crude, but there are different indexes available, like JKM or oil-related or Henry Hub, which is United States. The different contracts are available. We have a mix of these, so that we reduce the volatility. What is your requirement, full requirement at 2,100 TPD, if I may know? It could be closer to 3 lakh cubic meters per day. Understood, sir. Thank you, sir. Thank you and best of luck. Thank you. Thank you. The next question is from the line of Darshan Manik from LA Consultancy. Please go ahead. Hello, am I audible? Yes. Yes, you are. Yeah. Congratulations on good set of number. Can you just brief about the EBITDA margins? Every quarter there is huge fluctuation in our margins. What is the specific reason for this? EBITDA margins are fluctuating largely because of the mainly because of the selling prices. If you really look at the prices in the first quarter of this financial year, we had good prices, good set of numbers. In the second quarter, the prices declined because the international prices dropped. We had to of course align the prices to to that level. Third quarter again, which is what we are discussing, again the prices moved up, which is closer to the first quarter. There have been significant upside, downside in these prices, which has impacted the EBITDA levels. Because this is a volume business and it is important or the selling prices are very important in terms of the EBITDA numbers, this is impacting to a great extent. Agreed. There would be some range with which we would be working because our cost and everything is passed on. Beyond that point, we would not be looking to expand the margins. I mean, a certain range is fine, but even considering that, the selling price is fixed for a month or so, overall a year, in a year, our margins would be fixed somewhere in the range because at times your selling price would be increasing in another quarter, the cost would be increasing in another quarter. Quarterly margins can be here and there. Overall in a year the margin should not be very much here and there, if my understanding is right. Actually we do not have control on this kind of situation because the prices are depending on the landed prices of imports and our buyers look at those prices. When the prices are low and even though our costs are rising, it's not that the prices we can charge higher prices. Hope you understand what I say. When the prices are rising internationally, there is no reason for us to charge lower prices because a similar thing has not happened when the prices were low and the costs were higher. It all depends on how the prices are behaving in the international market. In international market also, if you see currently the costs are rising for all the solar glass manufacturers even though the prices are moderating. It is not having any direct relationship, so to say. It is more to do with the demand supply, the inventories and all those facts which are also largely connected to the Chinese manufacturers, so to say. You are right that there will be some ballpark number, but there is no control over that number from our side. On the higher side, what would be the margin? I mean, it won't be that the, we would be charging any XYZ amount. On the higher side, what can be the margin expected? On the lower side, what will be the margin which we'll be protecting at any cost? I think this question cannot be replied to your satisfaction probably because Prices have moved by 70% up also, and prices have moved 70% down also. You really can't have any ballpark number for what could be the bandwidth between which the higher margin or lower margin will work. Obviously the overseas We won't be selling our products at a loss, right? Sorry? We won't be selling our product at a loss. There would be something cost plus percentage, which at least we would be expecting when we are selling. I was about to say that the overseas manufacturers also are listed companies, and though they also report their numbers on quarterly basis, and they also have certain costs based on which they price. Obviously they will not like to sell below cost. Similarly, we will also not like to sell below cost. Okay, fine. Thank you. That's it from my side. Thank you. Thank you. Before we take the next question, I would like to remind all participants, if you wish to ask a question, please press star then one on your touchtone telephone. The next question is from the line of Sharang, an individual investor. Please go ahead. Yeah. Thanks for the opportunity. Just would like to know, like, already there is a discussion or news around solar glass recycling. In terms of that, from that perspective, do you have any plan for that, like in future, like, any opportunities for Borosil? At the moment, there is no established process for recycling of solar glass in any significant volume. It's so far a very time-consuming and fastidious process to be followed because all the plastic parts have to be separated, which are stuck to the glass. So far, we are not aware of any proper recycling. The volumes in the country are very, very low. The installations in the country have picked up only last four to five years. When the significant volume is there and the end of the life cycle of the modules is over after 25 years or so, the recycling will start at that point in time. It is still some time away, maybe 15 years away or 10 years away from now when the recycling will happen in a meaningful way. By that time we can expect that some technology of the right economics will come into play, which will be of interest. At that time we will think about it. Having said that, we are keeping our eyes and ears open, and there are certain technologies that we are looking at with interest. Thanks. Say SG-4 and SG-5, that will be planned in the existing land, right? Those are brownfield. Yes. For any, let's say, considering there is a huge plan of government by 2070 now they are talking about everything in renewable energy. Do you have already anything planned for buying more land for additional capacity or beyond SG -5 also, still you have place for additional capacity in the existing land? What is that? I think SG- 5 would take up the existing land, but we might be able to acquire still more land. That's really going so far into the future that any speculation on that is not very meaningful. We continue to evaluate whether to expand, continuously expand in the same location or whether we should also explore any other location in India or elsewhere in terms of our being you know de-risking ourselves from the single location point of view. We'll keep evaluating all those aspects and take appropriate call. Okay. Last question. Apart from glass in the solar space, any other components or any other technology or thing, what is that, wafer or something, any other technology or product you are planning to come up with in future? In Borosil Renewables Limited, at this moment, there's nothing other than solar glass. Okay. Sure. Sorry for asking one more question. Just would like to know, after the Borosil Limited and the Borosil Renewables restructuring and demerger, merger, demerger process, would like to clarify one thing. Is there directly or indirectly anything still with Borosil Limited or it's completely separate and there is no share value relation between both? There is no relation between the two companies except the promoters are same and they continue to hold majority. On the board, the promoters are there. The total management and everything is different. Shareholding-wise, there is no close relationship. There are no meaningful related party transactions, so to say. Sure, sir. Thank you very much, sir. Thank you. All the best for the future. Thank you. Thank you. The next question is from the line of Samir Gandhi from Greenergy Sustainables. Please go ahead. Am I audible? Yes. Yeah. Sir, who will be our top three competitors for the manufacturing of the solar glass in India? Second thing, who are the top five customers by turnover? Well, the answer to the first question is not possible for us to give, because so far nobody has come up. First of all, the person has to come up, he has to be established and become a force in the market, then we can say. That is one thing. The second thing is confidential information. I'm sorry, we cannot pass that on to you. Okay. Sir, in manufacturing of these glasses, how much percentage of the raw material is imported? Are you facing any issues in procuring that, looking at the logistic problems which we have faced in last six months? Bulk of the material is all being sourced domestically. Just some things which are trace chemicals are sometimes imported. I think I would say more than 99%, more than 99.5% of materials are available domestically. Next question is that the panel manufacturers generally give 10% of 10 years of the warranty for the glass or any mechanical part of the solar panel. Whether same warranty is extended by Borosil to the OEM. If so, then how much percentage of just warranty claims are there for last quarter or last year? I don't believe we have received any claims so far. We, we- Sometimes we do, but there is. It's not a question of a delayed claim. By and large, if there's a problem, it happens on the spot and then we deal with the claim as it happens. Just to explain to you, the warranty is actually given by the module manufacturer to the developer or the buyer because he's getting the module certified and he's certifying that so much of output will be there. Glass is only, one of the component which is fitted into the modules or on which the module is being made. To that extent, the fluctuation in the power output from the module can be associated with many products which are other than glass. In terms of our product supply, we only supply the glass to the specification which are agreed with the buyer, and there are no further guarantees. Yes, if there is a breakage or if there is a quality claim, we of course settle the quality claim or breakage in the glass to the satisfaction of the buyer. There is no warranty for 10 years or 25 years from the perspective of glass supply. Okay. One more thing that if Safeguard Duties are not continued beyond the July, then what will be the kind of margin you are expecting? You mean the anti-dumping duty on glass? Yeah. Is it? Yeah, yeah. In a meaningful way, the imports are coming from now Malaysia and Vietnam, less are from China. To a certain extent, of course, the imports come from China. But if the duty is not extended, the imports from China may rise, and that can of course affect our ability to command certain price. To what extent it will happen and whether it will happen or not is hypothetical as of now, because we believe that we have a good case to get the anti-dumping duty extended for a second term. Should it not happen for some reason, then there will be definitely some amount of setback in the prices. Sir, in such a scenario, do you feel that completely depending on only one product like solar panel glass is slightly what we call as difficult for company to plan for the long future? Yeah, we believe that this is a good product where the government is completely focused on solar renewables and solar energy, where the demand is going to rise significantly. We have been trying to achieve economies of scale by expanding our capacity in order to become more and more competitive. In terms of innovations, in terms of whether raw material costs or whether energy costs, we have been trying to economize on all fronts so that our costs are under control. Despite all these uncertainties, what you mentioned about the discontinuance of duty and all, we believe that the margin which we can achieve from this business is quite satisfactory, and that's the reason we continue to remain invested, and we continue to be... We will continue to be investing more money into this business. In DCR panels, sales and manufacturing is supposed to be in India, and mostly DCR panels are made compulsory, as you say. Whether in DCR panels, glass is also made compulsory to be manufactured in India? No, glass, unfortunately, has never been a part of DCR. DCR is only on the module and solar cell. Similarly, the BCD which has come, or Basic Customs Duty which has come is also on solar module and solar cells only. Glass, like any other component of solar module, is left out for whether it is to be sourced locally or imported. We produce a competitive product and price it competitively. We believe that once the expansion of the demand is taking place by way of increasing the module manufacturing activity, the scale will rise for us and other component manufacturers also. The demand itself will actually ensure that we earn good margins. Okay, sir. Thank you. Last question, are you, yourself using some solar power for your factory? We do have a wind power which we had installed some years back, and now we are going to set up a solar and wind hybrid project which will be commissioned in the coming financial year. We will probably shift to close to 25%-30% of the power from our own renewable sources in the forthcoming foreseen future, maybe after October 2022 or so. I think that is the maximum allowed as per the policy. Though we wish that we can consume more power from renewables, there are policy restrictions due to which we will have to be satisfied with that. Okay, sir. Best luck for future, and thanks for giving me an opportunity. Thank you. Thank you. The next question is from the line of Dhiral from Phillip Capital. Please go ahead. Yeah, good afternoon, sir. Thanks for the opportunity. Sir, as you mentioned, in your opening commentary that currently the glass prices has came down, globally, particularly in China. Assuming the price remained, you know, same for the quarter and with the current prices of raw materials, which is there right now, how much impact, you know, we can see on the margin? The impact of raw material prices, as I had mentioned earlier, in the quarter January to March, it will not be significant because our earlier contracts of soda ash are still balanced and the increase will be marginal in that sense. From the perspective of any meaningful or significant contraction in the margins, we don't foresee a significant drop, but there will be some impact. On the selling price also there will be certain amount of impact, which I already mentioned that prices are fluctuating almost every 10 days. We cannot have a certain sense that by end of March, what will be the net realization, which will be whether plus or minus or how much minus. What is the reason for such a volatility in the pricing? As you said, it is fluctuating every 10 days. Basically, what we believe is that the Chinese manufacturers or the Chinese-owned companies, which are set up in other geographies like Malaysia and Vietnam, they all operate based on certain comfort of keeping inventories and certain level of infrastructure where they have to keep the inventories. In case the inventories rise beyond control, they try to liquidate the stocks at a lesser price, which creates the ripples in the market in terms of the price fluctuation. Of course, the expansion plans of those companies or the demand supply situation could be additional features why this stock is fluctuating like this. This whole demand supply scenario in a nutshell why the prices fluctuate so much. Okay. Lastly, what could be the peak debt that you are comfortable with, you know, by the time our SG-5 comes? As an internal policy of the company or the management, we would like to restrict our debt to 2x of EBITDA. Okay. Lastly, what is the contribution of the thinner glass or bifacial glass from the overall revenue? When you say thinner glass, we call thinner glasses 2 mm, 2.5 mm and 2.8 mm, which comprise nearly 30% of our portfolio. Whether it goes in the conventional or bifacial module, we are not much controlling that, but this is a thinner glass portfolio which is at 30%. The share of 2 mm is going to go up in this or it is going to be more than 30% going forward because the thinner glass demand is going up. It commands the higher prices also, or the prices remain same? Yes, it has a better per millimeter price, per square meter price because the output is also slightly impacted in terms of the yield and the cost with that becomes a little higher. Still the margins are relatively better in the thinner glass. Okay. Thank you so much. Mr. Dhiral, does that answer your question? Yes. Yes. Thank you so much. Thank you. The next question is from the line of Devesh from DS Investment. Please go ahead. Yeah, hi. Thank you for the follow-up. Just wanted to get some sense on the cost part, right? Because once we have SG-3 coming up, which is more than doubling the capacity, could you help us understand in terms of operational efficiency or any internal metric like cost per ton or something, how you see that improving? And if you were to sort of take it a little longer term when all the duties and those do exist, do you have a sense that we are getting to a more steady state level playing field against Chinese or those players? Just qualitative, quantitative, any thoughts would be helpful. In terms of the expansions, we will certainly accrue certain economies of scale because the overheads and the wage cost which will be spread over the larger production will definitely help us to expand our margins, EBITDA margins. Whether it will be 2% or 3% or 4% that we have to see, but one can say between 2%-4% accretion in the margins could take place on account of at least this scale. I think one should look at that. What was your other question? Yeah. Just if you were to zoom out a little longer term horizon, I know that this is a little hypothetical, but if you're comfortable answering, let's say these anti-dumping duties and all those eventually when we have SG-3, SG-4, SG-5 in place. Your line is not very audible. Okay. I'll try to join back in. Yeah. Thank you. The next question is from the line of Tariq Hussain from Greenwoods Capital. Please go ahead. Hi. Thank you for the opportunity. I just have one question. We have seen demand for bifacial modules increasing in China and other places. I just wanted to get a sense if you see the same demand in India and how is it impacting the demand scenario at your end. In India so far, there was not much demand for the bifacial or thinner glass of 2 mm, but it is now catching up and all the large manufacturers in India, maybe 10 of them are there, large manufacturers. Everybody is talking of big sized modules which are currently in fashion and also the thinner glass. We believe that we will soon catch up on the bifacial module trend. To what extent it will penetrate, we have to see in next one or two years. But the demand for the thinner glass and larger size and for bifacial module is going to grow significantly worldwide, and India will also be in the similar, similarly. Okay. Thank you. That's it from me. All the best for the next quarter. Thank you. Thank you. The next question is from the line of Anuj Upadhyay from HDFC Securities. Please go ahead. Yeah. Hi. Thanks for the opportunity, sir. Sorry, sir, I joined a bit late, so you probably would have answered this question, but still I want to have a clarification. One thing, sir, could you just mention what kind of premium does 2 mm glass have compared to the other thicker glass module over here? You also mentioned that the margin across the 2 mm glass is much better. If you can just give a ballpark figure, you know, of the premium which it has over the conventional one. In the Indian context, the 2 mm glass demand is virtually not there as of now. It has just started. How it will be priced, we will see, as we go along. In terms of the international markets, the prices are higher by close to 25%-30% compared to the normal 3.2 mm glass. 1 mm 1 sq m basis. The cost is also slightly, I mean, higher compared to manufacturing 3.2. Margins are better. What exactly is the number? I cannot really talk to you on this line. The profitability in making thinner glass is definitely better. Okay. Fair point, sir. Do we export 2 mm as on date? Yeah, we do export 2 mm. Okay. You mentioned that probably it could be in the range of 20%-25% of our total portfolio. Or- That also includes 2.5 mm and 2.8 mm. A significant amount of this thinner glass portfolio, what we have is 2.8 mm, and that goes all of it is going in domestic market. From the perspective of what is the share of 2 mm and what is the export, that is not very high. It will be about a couple of percentage, 3%, 4%. Fair enough, sir. You mentioned this could go closer to 30% going ahead, considering the international and domestic demand. Yes. That's what the projections by various agencies show, that bifacial modules will cross 30% of the overall installation. It has already happened in China, and it is also catching up in India and other geographies, including, say, USA and Europe. Got it, sir. Lastly, sir, just a follow-up on the PLI scheme. Now we are seeing, you know, many local manufacturers are now planning to expand their existing capacity and also many new players who have planned up a huge capacity in the solar manufacturing. I mean, can you just throw some highlight whether they would be manufacturing the glasses as well, or it's only a particular equipment that is the wafer cells and modules is what these guys are targeting? Reason why I ask is they are not venturing into the glass side, that probably would be a much higher beneficiary to this scheme. Just a clarification on this, sir. It is entirely at the discretion of each of the manufacturer to set up and integrate the or do the backward integration to the extent they will like to. Generally speaking, in the Chinese market or other international markets, the glass production has been with a different set of people, and module and cell manufacturing has been with a different set. In India- Exactly, sir. In India, some people have taken that kind of call to produce solar glass also internally, more particularly because significant capacity is not available in India. The market is not mature to that extent as in China. Also they would like to restrict, or like to rather ensure that their supply chain is not disrupted because of the dependence on the imports and all these geo, the geopolitical situation. They have taken the call to install certain capacity for their captive consumption. Now, whether one will do or everybody will do is for every individual company to make that kind of decision. What we know is that only two companies have so far discussed this kind of situation. The rest of the people are still looking at glass suppliers for the glass supplies. Fair enough, sir. That's helpful. Thank you. Yeah. Thank you. The next question is from the line of Dhruv Kashyap, an individual investor. Please go ahead. Yeah. Good afternoon, Pradeep ji, and let me begin by thanking you for the excellent stewardship that you provided to the group over the last few years and especially in these tough times. Thanks a lot for that. Thank you. My first question to you, sir, is that just looking at the landscape in terms of its opportunities and threats, everybody and their grandfather is talking solar and investing in solar and getting into solar. If I was to flip that around and look at it from a threat perception, especially as bigger and bigger conglomerates get into the entire chain, would not too many people start sort of fully integrating, putting up their own glass units over a period of time? Because some of these guys would be big, they could also start arm twisting the government in terms of saying that we need a lot more glass than is being manufactured, so remove any kind of protection and let us buy from outside, which will be harmful to us. Thirdly also that as we know that, while 25 and 40 BCD and all is on the module, etc., but on the glass, other than the countervailing duty of 9% from Malaysia and maybe a bit from China, even from Vietnam, we are not protected. Is there, I'm just trying to, you know, play a devil's advocate, but is there a cause for significant concern in terms of our growth prospects as a glass manufacturer, although solar will be booming? The answer is simple on that. You see, until the 9th of March 2021, there was no kind of duty or tariff barrier on the entry of solar glass from Malaysia. Malaysia has a large production of solar glass, and they could easily service a lot of the requirement of the Indian manufacturers as and when required. When they were there without any, you know, goods were sort of entering the country without any hindrance. We posted our most interesting result. That was for the quarter ended March 2021, which if you notice, we did well in that quarter. The fact is that while, I mean, you know, the question of competition is open-ended. We faced competition. I mean, I've personally been in the business for 50 years. I've had competition all the time. I understand how to fight competition, and we do it. I'm not really worried about it. Let's put it that way. Okay. That's good to know. Second question, sir, is more on the expansion. Now, you know, I think the first time we raised money was in December 2020 for SG-3. Right. We pretty much had most board approvals and, or let's say, internal approvals for SG4 in place starting 2021. Yeah. My understanding is that, if we raised money in December 2020, and if we are likely to see SG-3 come up on stream between July, August, September, it's roughly a 18+ month lead time. Yeah. Earlier, if you saw the chart on progressive expansion of capacity, it was always leading towards Q2 of FY 2023 or Q2 of FY 2024. Now it's more Q3. Given that we haven't even started the process, let's say if we start in April, May, would we not be looking at the next one only towards the end of 2023 and the subsequent one towards the end of 2024? If there is so much of interest in the solar sector and there's an advantage of getting in first and sort of building scale so that everybody has to come to us later, why is it that we are taking longer than anticipated on SG-4? See, we have to balance many things. One of the things we have to balance is also our risk appetite. There's a set amount of, you know, risk that we are prepared to take. Beyond that, it's not safe for the organization and for the investors, for everybody. We can only take measured steps, and I think, we are doing well on that. To answer your question about the time that we took, I'd like to say that, our second furnace that we did, we had lit the furnace in under 14 months, and that was a remarkable achievement. I don't know if anybody in India has ever done that. The reason we've taken longer on this furnace was it's a completely new furnace. It's much larger than anything that has been done before. Therefore, there's a lot to be done in the design aspects of that thing. Agreed. The other thing which has caused a lot of delay in this particular SG-3 is COVID. We faced COVID twice, you know, once, first wave, second wave. The first wave actually came up only in August, September of 2020. It didn't come up in April or May. We faced two waves of COVID, you know, within, I would say less than nine months of each other between the tapering off of one and the starting of the next. These things did set back, you know, procurement and stuff like that for a bit. We are on track now, and the chances are that SG-4 should not take as long as SG-3 did. Would it be safe to say, sir, that SG-4 work is happening and fundraise et cetera should happen soon, and it should not take 18-20 months, so maybe on stream will happen faster? More importantly, are we looking for a fundraise sometime in the next one or two or three months, or is it going to be longer? We cannot say the exact timeline for fundraise, but fundraise will definitely be done in the first half of next financial year, which is from, say, April to September. That much we can commit. In terms of the possibility to come faster, the fourth furnace will be more or less identical to the third furnace. In the third furnace we had done a lot of changes in the design. It was a large furnace, and different set of equipment have been used. Or larger diameter things have been used from that perspective. But the fourth furnace will be or the equipment will be exactly duplicated. There will not be any time consumed on the you know designing the things and all, and the orders will be just repetitive. It should be done faster. On a conservative basis, we have put the dates, but we would like to do it faster than what we commit actually. Just to close this point, sir, just for my clarity, if you're saying that we do the work starting April to September? Yeah. If we are still putting a Q2 of FY 2023-2024 as the timeline, which means that even if we delay our fundraise or our work start to August, September, we still feel confident of landing it in 12 months from then on to hold on to Q2 of 2023-2024? Hypothetically, if there are no further drawbacks along the way. You see, we like to be conservative, that's why we're saying in the event that we do start in April 2022, we should be in production in 18 months. I mean, that's what we'd like to say. There's no joy in overpromising. I think 18 months is a good time for any glass factory, and I think that's a good one. We can always try to advance it, you know. It might happen also, but that's speculative frankly. Bottom line is that the fundraise and all activities internally and externally should start in April to September to be able to target September of next year kind of on stream. The question of fundraising, one can also take in debt. One can take term debt. Yeah. start the SG-4. It's not necessary that we go for a fundraise. We would like to do it, but, as I said before, that this is a subject of careful consideration, and we have good advisors for financing. We take their advice and so on. That's why we are not able to put the finger on exactly when and in what way we will do this. It's frankly speaking open. The moment we do it and the moment we decide, we clearly have to go public. That goes without saying. Yeah. Principally speaking, you're working backwards to say that you're still targeting Q2 of FY 2023-2024, so hence working backwards by when do you have to take a decision. Correct? I mean, principally speaking, that would make sense. Yeah, yeah, you're right. Prabir, my last question if I can squeeze one in, and this is the one I love asking you always since you are an absolute expert in this sector. See, currently solar and renewables are still being used largely for power generation. Yeah. Right? Or electricity in layman's terms. To me, the application is a lot more. Okay. For example, what role can solar or renewables play in the electrification of vehicles, locomotives? I don't know what else we can do. There would be B2B applications, there would be B2C applications well beyond just electricity. Have we as a company looked at these and are we seriously evaluating some in prototype stage or in some shape or form to sort of act on beyond just electricity? To answer your question, see, the thing is this, that, our specialization is in glass making, okay? We are making glass now. What happens here is that, we foresee that there would be an opportunity to have small panels for sort of portable solar power. If you have a mobile phone, maybe you just need a small solar power the size of your laptop or smaller, where you put it out in the sun and just allow that to charge your phone or maybe your computer. A lot of mobile power in the sense of, you know, perhaps cooking a small induction heater or something of that sort. Now, we are limited to supplying a small sized glass. The actual panel and the other device, somebody else would make. We are not in that, and therefore I cannot say that we can, you know, how people would take it forward. If people want glass of smaller sizes, larger sizes, we are ready to give it to them, and then they do what they must with it. Sir, just to understand this well, if for example there is a way to use solar to power automotive or there is a way to solar to power cooking or solar to power locomotive. Yeah. if the application or the apparatus or the module is being developed by someone Yeah. We can at least do the prototyping of the glass at our end to be ready to supply to any such use case. Very correct. We can work on the glass that somebody would need for a special application. In fact, people come to us from time to time. We express our interest, and then they back off. The point is that we are ready to work on glass anytime. For you it's not a very long process. I mean, you can just quickly prototype it and get into production if required if there's such a use. Depends on what the nature of the glass is. I cannot say really if what shape, size he wants, et cetera. Can we have more discussion offline? Yeah. Because this is a call. For investors. Respectfully, I would suggest we can talk about this separately, you know, and I'd be happy to answer your questions. Sure. Thank you so much, Pradeep, and thanks once again for the excellent stuff that you and Shreevar have been doing for both the companies. Thank you so much. My pleasure. Thank you. Thank you very much, ladies and gentlemen. Due to paucity of time, we take that as the last question for today. I would now like to hand the conference over to the management for their closing comments. I'd like to thank my team in Borosil for the wonderful work that they do. We are proud of our team, and we are proud of the work they do. We are proud of our investors for their faith in us, and we are proud of all stakeholders, our customers who repose their faith in us. Together, I hope that we are taking large steps towards making India Atmanirbhar, and we hope to continue to serve you better as time goes by. Thank you very much. Thank you very much. On behalf of Axis Capital Limited, we conclude today's conference. Thank you all for joining. You may now disconnect your lines.