Ladies and gentlemen, good day, and welcome to the Q2 FY23 earnings conference call of Borosil Renewables hosted by Axis Capital Limited. As a reminder, all participant lines will be in listen-only mode, and there will be an option for you to ask questions after the presentation concludes. If you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sumit Kishore from Axis Capital. Thank you, and over to you, sir. Thank you, Steven. On behalf of Axis Capital, I'm pleased to welcome you all to the Borosil Renewables Q2 FY 2023 earnings conference call. We have with us the management team of Borosil Renewables, represented by Mr. Ashok Jain, Full-time Director, and Mr. Swapnil Walunj, Head, Marketing. We will begin with the opening remarks from Mr. Jain, followed by an interactive Q&A session. Over to you, sir. Thank you. Good afternoon, and welcome to the Borosil Renewables Q2 FY 2023 investor call. The board of Borosil Renewables approved the company's financial results for Q2 and H1 FY 2023 on November 9. Our results and an updated presentation have been sent through the stock exchanges this evening, and they've also been uploaded on the company's website. We will discuss the operations of Borosil Renewables on a standalone basis. I will thereafter provide you some highlights of the operations in our newly acquired overseas subsidiary. During Q2 FY 2023, the company recorded net revenue from operations of INR 169 crore, a growth of 5% over previous year corresponding quarter. Sales volumes were lower than in Q2 FY 2022 by 11% basis inventory adjustments, though the actual decline was only about 2%, which was attributed to a lower production in September this year. Overall, domestic demand for solar glass has remained strong as the manufacturing of domestic modules has picked up ever since the customs duty on import of modules came into force from April 1, 2022, and the solar installations have gained momentum. The domestic manufacturing of modules and consequently the demand for solar glass was higher by about 25%-30% in Q2 FY 2023. This additional demand has been made currently through Asian imports owing to limited availability of domestic capacity. Market share of Borosil Renewables in domestic volume has consequently come down to about 22%. Export sales during Q2 FY 2023, according to customers we message aid, were INR 47.9 crores, comprising of 28.3% of the turnover. Average prices of solar tempered glass during Q2 FY 2023 were about INR 139 per mm, an increase of over 18% over Q2 FY 2022. Average prices of the patterned glass at the levels prevailing in Q1 FY 2023. However, there has been a change in the status of anti-dumping duty from China. Earlier, the designated authority named as DGTR had extended the validity of ADD on solar glass from China until two years after expiry on 17 August 2022. However, this recommendation was not accepted by the Ministry of Finance. Consequently, there is no ADD on Chinese manufactured solar glass since mid-August. This has rendered the BCD against Malaysia ineffectual as the exporters have shifted the supply base back to China. Borosil Renewables has filed a petition in Gujarat High Court against the decision of the Ministry of Finance, and the matter is listed for hearing on November 11, which is tomorrow. The import of solar glass continues to enjoy an exemption from the payment of Basic Customs Duty because solar modules and cells will be subjected to BCD from April 1, 2022. Meanwhile, prices have declined significantly in September 2022. Apart from the lifting of imposition of ADD on Chinese manufacturers, the lower-than-expected demand in China has led to a drop in FOB prices with a support of 13% export subsidy, despite a global increase in input costs, especially in respect of gas and soda ash. Moreover, there has been a significant drop in freight rates from China as compared to about two months ago. Consequently, landed rates for solar glass imported from China have caused a downward pressure on prices in India. We had to drop our domestic selling prices by an average of about 13% in September 2022 in view of these lower import prices. During Q2 FY 2023, the company earned EBITDA of INR 34.1 crore. The EBITDA margins were at 26.1%. It suffered a decline of over 400 basis points in Q1 FY 2023 and about 1,000 basis points as compared to Q2 FY 2022, owing to cost inflation in raw materials and energy I had mentioned above. I've been mentioning about rise in input costs, mainly natural gas in the last few meetings. The company has been making efforts to reduce the impact in costs by achieving cost savings in raw materials by adjusting mix suitably and in electricity by going for captive power generation to some extent. However, the cost increases combined with reduced selling prices owing to cheaper imports from China are squeezing EBITDA margins to below an expected normalized margin of which we consider of 30%. During Q2 FY 2023, the company earned a profit before tax of INR 32.9 crores. The profit after tax was INR 24.3 crores as compared to INR 34.1 crore during the corresponding quarter in the previous year, which shows a decline of 26%. For the half year ended September 2022, the company booked a revenue of INR 339.2 crores, a growth of 14% over corresponding half year last year. The company earned an EBITDA of INR 94.4 crores, a margin of 28.1%. Profit after tax was INR 54.4 crores, showing a tax margin of 16%. Our 10-megawatt captive power plant with solar plus wind energy through an SPV, in which BRL will be holding 41%, is expected to be commissioned by next month, December 2022, and BRL will be able to use this green power besides reducing the cost of electricity. We are also looking to put up an additional 8-megawatt solar plus wind power plant. The overall demand situation for solar glass continues to look extremely robust, both in India and abroad, and the following measures will strengthen this. In a recent development, the Union government has lowered the project import route that would have helped to supplement the Basic Customs Duty on solar modules and cells by paying lower duties. This move is expected to curb the import of solar cells and modules, and give impetus to domestic manufacturing and consequently demand for solar glass. However, the projects paid out before March 2021 will be exempted from this. The Union Cabinet had earlier approved the second tranche of PLI, Production Linked Incentive Scheme, of INR 19,500 crores. Ministry of New and Renewable Energy, MNRE, has announced guidelines for implementation of this scheme. About additional 65 GW of manufacturing capacity is expected to get benefited from this scheme. The PLI scheme has a component for sourcing of ancillary for PV modules, like solar cells, solar glass, EVA, backsheets, et cetera, locally. This component ensures a higher payout of incentives for local procurement of ancillary. This arrangement will incentivize the module manufacturers to procure solar glass domestically. Global supply chain bottlenecks and heavy rains in Gujarat delayed commissioning of our expansion project. We now expect to commence production from our third furnace, FG3, in December 2022. This will enhance our capacity by 550 tons per day and take it to 1,000 tons per day, equivalent to 6 GW. The company will review the situation and take effective steps for next phase of expansion at an appropriate time in the last quarter of this financial year. The company has, through its overseas subsidiary, acquired 86% of Interfloat Corporation. Sorry for this. I'll repeat it. The company has, through its overseas subsidiary, acquired 86% of Interfloat Corporation and GMB, now both together called as Interfloat Group, and taken control of this. GMB Interfloat's reputation has a reputation of a high quality predictive solar glass, which is expected to strengthen BRL's global market position in the long run. The acquisition adds 300 tons per day to BRL's global capacity and also widens its range of offerings, including varying textures, coating, dimensions, and thickness, and brings the synergies in manufacturing and sales operations in India and Europe. During the nine months of calendar year 2022, the Interfloat Group registered a revenue of EUR 54.7 million with an EBITDA margin of 5%, which was lower than normal due to extremely high energy prices. The demand situation for solar glass continues to look extremely robust in the important overseas markets, that is Europe, USA and Turkey. These three are the hotspots for meeting this requirement. Most nations are trying to raise domestic production of solar cell and module, and also trying to reduce dependence on Southeast Asian countries, which places India in an advantageous position for exports. Our scale for having manufacturing in Europe through Interfloat is to lend along with expanding production in India. With that, I'd like to open the floor for questions that you may have. Thank you. Thank you very much. We will 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 unmute themselves while asking a question. We need to ensure this, and we will wait for a moment while the question queue assembles. The first question is from the line of Mohit Kumar from DAM Capital. Please go ahead. Mr. Mohit Kumar, your line isn't talking. Kindly go ahead with your question, please. Yes, sir. Hi. Good afternoon, sir, and thanks for the opportunity. So my first question is on the EBITDA margin which had declined this quarter. Can we expect those EBITDA margin to go back to the earlier quarter as we go forward? Or do you think, you know, there is some pressure as we in H2 also? You're right, the margins have declined, and this is because of the drop in the selling prices. We are trying to make all of our efforts to bring in savings in raw material batch mixes or coating liquid or other aspects of manufacturing. Besides this, we are also expecting economies of scale after our commissioning of third furnace, which will happen in next month. In this quarter particularly, the margins are going to remain low. Q4 onwards, some improvement can be expected in the margins. These current margins, if you notice, are having partial impact of rate decline because the decline has taken place only in September. Yes, the margins are going to be lower. Yes. Are we seeing signs of more capacity coming up in the domestic side? Are we in discussion with those new capacities? Because we haven't heard, you know, many capacities commissioning as of now. We do expect over in FY 2024 there will be more commissioning. I think commissioning on the domestic side has been pretty low as of now. Yeah, you are right. Actually, there are three plants which are under construction, as per our information. These will add up to close to 1,000 tons per day when they get commissioned. All the plants have got slightly delayed because of the conditions of rains and other things and also delays in supply from the vendors and all. We believe these plants will get commissioned sometime during the next calendar year. These plants together with our 1,000-ton capacity will still be short of the demand in the country. Any color on the input prices, soda ash and gas. Are you seeing some easing of the raw material inflation or the prices are staying where they are right now? In terms of the gas prices, you know, it has linkage to the Ukraine-Russia conflict. Unless there is some relief there, the prices may not come down substantially. There has been some softening in the oil prices. Again, it has gone back to $99 and all, so there is not much change happening there. In terms of the soda ash prices, there has been small correction. Largely speaking, there may not be a significant drop in the price in next calendar, because the new capacity which are coming up for soda ash production will probably get commissioned only in 2024. We may not expect much relief in these two inputs. Understood, sir. Thank you. Understood. Okay, thank you. Thank you. A reminder to the participants, anyone who wishes to ask any question may press star and one at this time. The next question is from the line of Naitik Parekh from InCred Capital. Please go ahead. Yeah, hi. Thanks for taking the question. After the price reduction that we have done in September, what would be the price difference between Borosil and the China imports? As you would know, the prices in India are actually led by what kind of prices are prevailing in China and rather than landed cost of imports. All our customers benchmark it against the import landed cost of solar glass. Since it has gone down, the domestic prices also have gone down. There is a certain amount of premium which we command from being a local producer because of certain benefits which they expect from us, like inventories, working capital, just-in-time and flexibility in ordering and many other benefits. There is some premium which we get as a local manufacturer. That premium is slightly higher today as compared to past, but we have to adjust for taxes downwards because of the lower prices. What would that premium be? Well, in past it used to be on an average 5% or so. Currently it may be about 10%. Okay, got it. You mentioned the margins could be lower. You know, if we assume the September prices to continue, you know, are we looking at like 15% kind of margin range? Or, you know, assuming the September current prices continue, how should we think about margins? While it is not easy to predict the margin like that because the prices keep changing depending on the demand supply scenario, particularly in the Chinese solar manufacturing. We already see certain strengthening in the prices as we speak. We cannot be sure of what will the margins it will finally be in the next quarter. It will be hard for me to comment on the 15% or whatever number you are saying. Got it. How much is the price cut that you took, you know, after the China duty stopped like mid-August, September? What is the price cut from our earlier pricing? 10%-13% was the general cut which we had to go through because of the pricing. We are also trying to optimize on many aspects. Net-net, what will be the margin is difficult to predict right now. Also I mentioned about the scale benefits which will accrue once we commission the plant next month. It is a mix of every situation, and it cannot be just to consider the present price alone. Okay. Thank you. Thank you. A reminder to the participants, anyone who wishes to ask a question may press star and one at this time. Next question is from the line of [Anurag Kamani] from Purnartha Investment. Please go ahead. Hello, sir. Thank you for the opportunity. My question was, with regards to the inventory. I see that the inventory has increased by 57%, as compared to March 2022. Is it from [closing the inventory]? Yes, inventory basically we maintain a very little inventory in the form of finished goods or work in progress. Because of India's accounting practices which have to be adopted, there is certain fluctuation which is shown. In terms of the closing the inventory, there could be some inventory which is dispatched to the clients, but it is not recorded as a sale, and it is added back to the inventory. That's how the inventory may keep fluctuating on quarter to quarter basis, depending on the how much sales have taken place in the last few days of the month. Practically, there is no much inventory in the company. Okay, thank you. That answers my question. Thank you. A reminder to the participants, anyone who wishes to ask a question may press star and one at this time. Next question is from the line of Sharon, an individual investor. Please go ahead. Look, thanks for the opportunity. My question is in the last release note of acquisition of companies in Germany, there is a mention about that helps you to do the other products and technology. Are there a plan to make any other products like apart from solar in Germany or in India in future? Can you be clear about that? The mention was regarding various product categories or segments being serviced from Germany or India. We will obviously get certain synergies in both the operations. Some products which are being made available from German plant currently, which are not being made available from India will be possible to do that. All those things will be implemented in due course. In terms of the technology also, like in India, we have very high throughput. We produce at much faster speed and all, which we try to implement there after assessing the situation, and that will increase the productivity at that plant level. All those synergies are what we have discussed which continue to be our focus. Okay. Can you name the products apart from glass? What are the products you are planning to develop in near future? Product remains the same, solar glass only, but there are various segments which are not, or which are serviced from there or here, which may not be the case at the other location. There are say coating, coatings or say two side coated glass or various glasses, but for the same segment. Okay, sure. We will essentially be in the same product ranges. Segments could be added, or new products for those segments could be developed at the other location, taking advantage of the synergies. Yeah. Recently I was listening to the interviews of GFCL and Tata Chemicals, and next couple of years they are very confident about the high price of soda ash. Is that going to affect your Borosil Renewables? Will you be able to pass on the price to your end customers and maintain the margin levels? Or will that impact your margin going forward? Can you throw some light on that? Well, as I said, the new capacity will come into operation only later, maybe in 2024 towards the end or like that. The market for soda ash is certainly going to remain tight. To that extent we don't expect relief in soda ash prices or rather too much relief. In the case of all the players of soda ash, solar glass or glass manufacturing, the prices are same. Soda ash is a global commodity. Whether I produce or my competitors produce in India or abroad, they have to pay more or less similar prices. We will have to see how the demand supply situation on the glass, solar glass front takes place, which will be a better pointer to look at in terms of the pricing and pricing power, whether we'll be able to pass on or not. In terms of the soda ash price, we don't see much relief coming in. Okay. There was a QIP plan and it was approved by the board earlier. I understand that is not happened. Will it happen in near term or what is the plan on that front for fundraising? That approval which shareholders gave in the last previous AGM has expired in this AGM. That was over. Now we have taken permission for another fundraise of INR 1,000 crore recently in the last AGM. We will be doing this fundraise as and when it is necessary for the next phase of expansion. We will be on the lookout for an opportunity, appropriate time to raise the funds and use for the next round of expansion. Okay. The last question about Germany. There are energy prices very high. When your acquisition will get complete and when you start the operation and how will the energy costs going to affect you and when do you see the energy costs coming down in Europe? Yeah. Can you explain that? Position is 86% shareholding is already acquired. We are in control of the company as we speak. We have started to take active interest in the management of the company. Yes, the gas prices or energy prices has been a moot point of this particular situation. Because of the Russia and Ukraine war, the situation is remained under the strain. Now, what we believe is that energy prices will stabilize over a period or rather on a downward trend over a period of time. There are some positive signals from the government in Germany that energy prices will be capped for the industry and for the households. With those capped prices, we feel that decent margins can be earned by the company. Should there be a challenge in getting those prices, we will have to seek higher prices from the customers. Last year, we have supported the domestic local manufacturing to pay higher prices because of the higher gas prices and higher electricity prices. To the extent the prices to remain high this year, we will have to depend on customers to pay a little higher than normal price. Sure. Okay. Thanks. Thanks for your time, and I appreciate your courageous decision of acquisition in Europe for the future growth and being transparent for all the issues during acquisition. Thanks for the opportunity and all the best for future. Thank you so much. Thank you. The next question is from the line of Sumit Kishore from Axis Capital. Please go ahead. Just two questions from me. First, what proportion of your exports are to locations with the anti-dumping against China? How competitive are you really in areas where there is no duty? Well, we used to have 20% or thereabout for export out of our revenue. Currently it is higher because there has been better prices in export markets and local prices have decreased from September, as we all know, because of the anti-dumping having gone. There is one position. Then in terms of the anti-dumping duties against China, there is anti-dumping duty in Europe and also in Turkey. Just against Malaysia and Vietnam, there are no anti-dumping duties in any of the countries like Turkey or Europe or USA for that matter. We are competing with China, Malaysia and Vietnam as a combined force because Malaysian and Vietnam production is also owned by the Chinese major players only. We are effectively dealing with them in that sense without any anti-dumping duty because exports are coming from Malaysia and Vietnam. Almost 95% of our exports are to Europe and Turkey. Only about 5% maybe to other countries. In those countries like the USA, there is no import duty against China. This is the situation. Europe and Turkey both have anti-dumping duty against China? Yes, they have. Against Malaysia and Vietnam, they don't have. Right. The next question is related to after removal of anti-dumping duty on imports from China in India, what is the net value proposition, you know, for your customers in India bought from Borosil Renewables versus imported from China? What is the, you know, pricing differential or the, you know, any other value that the customer would see from buying from Borosil? Can you quantify that? Yeah. Value proposition is of a local supplier and supply chain related local value addition, which is quite important in this industry because there is a very high working capital involvement in module making industry, if you know. Solar glass is only about 10% of the module. They like to have assured supply source, which is for this 10% which can affect or disrupt their manufacturing for the manufacturing line for the entire value chain. They would like to have an assured local supply. This is what we offer from India. We offer benefit in terms of working capital or flexibility in ordering smaller orders to immediate delivery like situation. Also on the payment terms, there will be certain relaxation in India as compared to imports. All those benefits are the ones which local buyer expects from a local manufacturer, which is why he's prepared to buy locally and also pays a little higher. In terms of the future, growth potential, like PLI scheme, I've mentioned that, the scheme provides for additional incentive to buy modules manufactured for local use of local producers, locally produced items. There could be additional incentive for them to buy locally. These are the things which I feel would support local manufacturing of these items. Thank you, sir. Okay. Thank you. The next question is from the line of Anuj Upadhyay from HDFC Securities. Please go ahead. Yeah, hi. Thanks for the opportunity. You mentioned about the duty imposition zero from the China team. Could you mention the timeline, sir? Until when this duty is imposed and when it will come for renegotiation? You ask for Europe, is that it? Right. In Europe, anti-dumping duty is applicable till 2035. Okay. Secondly, sir, is there any support for the local glass manufacturing sector, like why have a DCR requirement here where a local manufacturer gets support from the local authority? Is there any incentive for the local manufacturer there? Well, there is no direct incentive to promote local manufacturing or use of solar glass, for that matter. Now the government, European Union, has decided that they want to have higher amount of installation. That means their solar energy program is going to accelerate further, which is necessary for them because they are trying to replace the use of gas for the production of electricity to solar energy. They can get the power for the residences and office space by producing from renewable sources like solar power instead of converting gas to electricity and supplying that. They want to reduce the dependence on gas sources. In that context, they want to increase the installation to 60 GW per annum. The European Union also mentioned that they would like to produce 35 GW of local manufacturing, like modules and cells and other things. Once that is done, the demand for domestic production or domestic consumption of solar glass will go up. Being present as a local producer in Europe now, through the Interfloat acquisition, we will get an advantage of our presence there and trying to get this additional demand in our favor from, whether from India or from Germany. That will be the benefit by being a local producer. In terms of any incentives or any local content requirement, there is nothing for the solar glass. Fine, sir. Sir, a few questions related to your balance sheet. Sir, our non-current assets, other non-current assets have gone up significantly. So has some of CWIP. Could you just highlight the reason for the same? The non-current assets, I think the CWIP changes are something which are there, isn't it? Sorry. Yes, sir. If it is CWIP, then it is the expansion project. That's a very big number. And I- Can you please elaborate what are the reasons the balance sheet increased? Fine, fine. In the meanwhile, sir, you mentioned that the 40 tons per day, I mean, the 500 tons per day of our third phase of capacity expansion will now be get commissioned by December. Am I right, sir? Yes. Yes. Yes, you're right. Fine, sir. Just a clarification that other non-current assets. That's it from my end. Yeah, yeah, I'll come back to you on that. Thank you. Next question from the line of Jivan Patwa from IIFL AMC. Please go ahead. Hi, sir. Firstly, can you update on what is the impact of gas leakage at Interfloat, is it still there, and what are the costs for that? Yeah. Gas leakage has actually happened on 22nd July this year. Immediately the furnace design supplier and the insurance company and the relevant like fire department, everybody was alarmed with this situation. This fire was brought under control within next 24 hours. The whole repair of the furnace was carried out while the furnace was hot. All those things have been done, and by 22nd, 23rd of August, the furnace was recommissioned. The production has resumed there from that day. The furnace is operating at full capacity as of now. Now, when you do a whole repair of a furnace, the life or the remaining life of the furnace cannot be expected to be very long, and proper whole repair has to be done. When we are taking stock of the situation there, and we will plan for a full repair of furnace in the next calendar, in the beginning of next calendar. At that time the furnace will be shut down for repair for two months, and then we do the recommission. What will be the cost of that approx? Well, only for related to cold repair, it will not be a large cost. It may be about EUR 2.5 million-EUR 3 million. But there will be certain changes which we'd like to make in the equipment and production lines. Because now the glass sizes have increased, as it has happened around the world. We were building capabilities, taking advantage of this situation of cold repair to change certain equipment or to enlarge the size of those equipment, in order to service the renewable requirement of large pane glasses. There is a certain expense on that as well, which should be much larger than this EUR 2.5 million. We are just taking current estimates for that, and then we'll be taking up that project around that time, maybe in the first quarter of next calendar year. Okay. Sir, on the Interfloat acquisition, the whole deal structure has everything changed. Can you just highlight what these changes are and what is the valuation of the whole entity and our roadmap to increase this to 100%? Okay. Last binding deal which we had signed was for 100% acquisition of shares. We were to issue shares to multiple investors for EUR 22.5 million and to create cash EUR 13 million. Also shares 50% EBITDA for three years, calendar year 2024, 2025 and 2026. After this leakage and also the more serious situation on the gas front, we had virtually put a deadlock on the transaction and that led to renegotiation. The sellers realized that to stick to that deal may not be feasible. They gave a certain revised offer, which was accepted by us. The revised offer like this, there are two shareholders in the company. There were two shareholders in the company. One has held 86%, another was holding 14%. The person holding 86% has moved out completely, and the other one holding 14% has remained there in the ownership. Now the deal which has finally happened is of 86% shares, and for that we have paid EUR 2.5 million to the outgoing shareholder. There have been certain other expenses which have been incurred. Also the EBIT sharing, which was at 50% earlier, has been brought down to 20% to the outgoing shareholder. The continuing shareholder will have a call option after three years. For the pricing for that is not determined yet? Pricing will be based on the multiple is determined at 7x EBITDA, and EBITDA will be accessible as per the then prevailing EBITDA. Okay. That's all from my side, sir. Thank you. Okay. Thank you. The next question is from the line of Harsh Lakshmi, an individual investor. Please go ahead. Hello. Good evening, sir. Am I audible? Yes, sir. As you discussed, company will be adding more than double production capacities. From economies of scale perspective, you will be gaining something in terms of production cost. Will you be able to quantify this in terms of percentage? Yeah, absolutely. There will be definitely a scale benefit which will accrue to the company and which will translate to cost reduction in terms of per unit cost. As it happened in the last expansion, we have saved about 3%-4% in the cost, which is what we expect to do around this time. We are expecting similar cost savings. Okay, sir. Thank you. That's all from my side. Thank you. Thank you. A reminder to the participants, anyone who wishes to ask a question, press star and one. The next question is from the line of Lavanya from UBS. Please go ahead. Hi, sir. Thank you for the opportunity. I wanted to check on similar way how you have highlighted how in India, domestic manufacturers are preferred over imports. What are the reasons for someone to prefer domestic manufacturer over importing? Can you just help a similar analogy? If someone in Europe would they prefer importing from India, Malaysia or Vietnam? How does it make any difference for them to import from any of these three locations? Yeah. This local manufacturing advantage is being used positively for all the module manufacturers or in this value chain, because for the reasons which I had mentioned sometime back, in the form of supply chain logistics robustness and, I mean, they want an assured supply. They are having advantage of local manufacturers offering working capital advantage and other things. Similar kind of situations prevail from Europe also. The customers there are able to pay a little higher price to the local manufacturer as compared to imports. Another positive thing for India is that now for last 2.5 years, the European and American markets are generally looking at China plus one strategy. They are rather trying to discourage imports from China and rather shift to Indian exporters. In terms of both, like our presence in Europe as a local producer and our being able to supply goods from India, we are in a good position to increase our presence in export in Europe. Oh, got it, sir. That's the reason I wanted to check if it's I mean, China plus one, would they prefer Vietnam or Malaysia or India was my question. Like, would they consider Malaysia and Vietnam are also like some Chinese players and give a benefit to India? Yeah, certainly your question is very, very well mentioned that Chinese manufacturers only have set up those Malaysian and Vietnam plants. These are basically Chinese companies only, and they do not consider them as a separate operation, unlike India or like that. That means India gets the preference, even over Malaysia and Vietnam. Got it. Thank you. One more question. I understand the third plant is going to come online December this year. Any timeline that you are looking for the fourth furnace, which we have envisaged. Any timeline there? Yes. We will be observing the outcome of this expansion in the month of December. During next month, by end of next month, we will have certain feeling about it. In terms of our capacity expansion, board has already approved a plan for 1,100-ton furnace. We will be launching of that plant in the next quarter, that is, Q1 of FY 2023. We will have to plan for fundraising and other things and then proceed with the plan. In the meantime, we will also make an effort to get certain relief on ADD or customs duty so that our margins will be better and taxes will be lower. Got it. Can we assume that two years from now is the timeline that you're looking at? If you start on the funding next quarter, three years from there or? Whenever we start to place orders and we are ready with the, say, funding plan, from there, it will take 18 months. You can assume 1.5-2 years' time from now minimum. Minimum 1.5 years, maximum two years is what we feel. Okay. Got it. Similar to my earlier question, I mean, just a continuation that the cost benefits like the operating leverage with increasing capacity. Now it's almost like the third furnace; it will be doubling the capacity. Is it right that 3%-4% will be the operating leverage material to get? Just wanted to clarify my understanding. Yeah, yeah. Our estimate that we will have about 3% operating leverage. Got it. Thank you, sir. Thanks. Thank you and all with this. Thanks for this. Thank you. Yeah. Thank you. The next question is from the line of Santosh Pataria, an individual investor. Please go ahead. Thanks for the opportunity, sir. I wanted to know what is the selling price of glass at present. Selling price of glass? Yeah, in India. Selling price, average selling price we have just mentioned it was about INR 139 for the quarter. Okay. Thank you. Thank you. A reminder to the participants, anyone who wishes to ask a question, can press star and one and then zero. As there are no further questions, I hand the conference over to Mr. Sumit Kishore. Over to you, sir. Just one follow-up. You mentioned that in hot repairs, they reduce the life of the furnace, and you have to do a cold repair. Would there be a disruption, when you do that? And what would be the duration of that disruption? Of course, when you do a cold repair, you cool down the entire furnace and you take out all the refractory blocks and replace with new blocks. There will be complete disruption of the production at that point in time. You can of course run your post-production equipment like tempering and all, but for that you need glass. You can buy solar glass from somewhere, and when you can sell it and supply to your customers. What we are essentially trying to do is to. Our plant is getting commissioned in India in December. When the plant there is down, in January season for cold repair, we will be supplying goods from India to those customers so that they are not starved of the material. That's how we'll be managing it. During the cold repair of course there will not be glass available from GMB plant in Germany. Okay. Typically, what is the duration of cold repair? It is estimated at 60 days, but we are counting 90 days from the start of restart of the production after the cold repair, total 90 days. Okay. You will be planning this cold repairs, you know, at what time? Currently we are thinking about February, but our team is assessing. They are right now in the GNB plant, and they are assessing the situation. Once we have a complete view from the point of view of availability of materials to the repair and all, the necessary things can be put in place. Also from the customer's angle, we have to look at their being satisfied on the aspect of BRL or Borosil supplying glass to them. Our sales team also interacting with the customers. Those things will be considered at the top level and then a decision will be taken. Got it. Thank you so much, sir. There are no further questions at this point. Would you like to make some closing remarks? Yeah. Thank you all for participating in this investor call. It has been very excellent session, I suppose. We look forward interacting with all the participants once again for the next quarter. Thank you. Thank you. Ladies and gentlemen, on behalf of Axis Capital, that concludes this conference. We thank you all for joining us, and you may now disconnect your lines. Thank you. Bye-bye.