Ladies and gentlemen, welcome to Borosil Renewables Q for FY 2023 earning conference call hosted by Axis Capital Limited. As a reminder, all participants lines will be in a listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal on the freezer by pressing star and zero on your telephone. Please note that this conference is being recorded. I now hand the conference over to Mr. Jiteen Rushe from Axis Capital. Thank you, over to you, sir. Thank you, Tanvi. On behalf of Axis Capital, I'm pleased to welcome everyone to the Borosil Renewables Q4 an FY23 earnings conference call. We have with us the management team of Borosil Renewables, which is comprised of P. K. Kheruka, Executive Chairman, Mr. Ashok Jain, Non-Executive Director, Mr. Sunil Roongta, Whole-time Director and Chief Financial Officer, and Mr. Niranjan Karpe. We will begin with opening remarks from the management, followed by Q&A. Thank you, and over to you, sir. Good afternoon, welcome to the Borosil Renewables for FY23 investor call. The Board of Borosil Renewables on 21st May, approved the company's financial results for the year, financial year 23 and Quarter Four for the financial year 23. Our results and an updated presentation have been sent to the stock exchanges and have also been uploaded on the company's website. We will discuss the operation of Borosil Renewables on a standalone basis as well as on a consolidated basis. I will also provide you some highlights of the operations in our newly formed acquired overseas properties. During financial year 23, our company recorded a net revenue from operations of INR 688.17 crores, an increase of 6.8% over financial year 22. Sales volumes on a quantitative basis grew by 4.3% as a result of commissioning of new plant, i.e., HG3, from 23rd February 2023. Average selling prices during the year were about INR 136.5 per millimeter, as compared to INR 133.5 per millimeter in financial year 2022, an increase of 2.6%. Export sales during financial year 2023, including to customers in SEZ, were INR 195.25 crores, rising 28.2% of the turnover, an increase of 15.6% over financial year 2022, when it had been INR 171 crores. The direct exports were INR 181.07 crores, which were up from INR 127 crores in financial year 2022. During the last quarter of financial year 2023, the company recorded a net sales of INR 187.54 crores. From a quantitative standpoint, sales volumes were 7.8% higher than those for Quarter 4, financial year 2022. However, the average accepted selling price was lower by about 1.2%. The domestic selling prices were depressed for most of the second half of the year as a result of dumping from China, Malaysia, Vietnam. The landed cost of imports became lower due to a combination of two factors. Firstly, the expiry in August 2022, anti-dumping duty on solar glass imports from China, imposed in August 2017, coupled with a significant drop in international freight rates. Meanwhile, the price of natural gas, solar, packing materials and other commodities had risen considerably. All these factors contributed to a contraction in margins, which are during financial year 2023, including subsidies of INR 9.75 crores from the Government of Gujarat, was INR 176.55 crores, corresponding to an EBITDA margin of 25.7%, which was a steep decline as compared to an EBITDA margin of 41.1% in financial year 2022. During Quarter Four of financial year 2023, EBITDA was at INR 38.02 crores and the margin was 20.3% as against 34.9% in the corresponding quarter in financial year 2022, and 26.7% in Quarter Three, financial year 2023. Rising from increased costs, coupled with lower selling prices which prevailed during this period. Moreover, during this quarter, HG3 had been lit up and fully manned. As such, all expenses were being incurred while there was little corresponding revenue. Lower EBITDA led to a decline in the profit after tax, and the company recorded a profit after tax of INR 80.54 crore, a decrease of 47% over financial year 2022. PAT during Quarter Four, financial year 2023, was INR 11.69 crore, which is a decline of 75% as compared to Quarter Four, financial year 2022, which had been INR 66.6. Ironically, solar glass is the only component in the entire solar photovoltaic value chain, which has no import duties whatsoever. With the expiry of anti-dumping duty on imports of solar glass from China, post 17 August 2022. Imports continue to remain completely exempt from payment of any sort of import duty. While imports are subject to a basic levy of customs duty of 18%, Notification No. 25/1999-Customs, going back to 1999, exempts imports of solar components from payment of customs duty. This is an anachronism, not only because solar glass manufacturing is the most capital intensive component of the solar cell, having the lowest asset turnover ratio, but also because an investigation launched by the Ministry of Commerce as recently as 2022, has found the largest solar glass manufacturers guilty of unfair trade practices, that is to say, dumping, and have recommended imposition of 63% anti-dumping duty on imports from them. The order seriously skewed against the solar glass industry, where imports of every subsidized Chinese glass are welcomed into India with no imposition of any duties. There is no level playing field for this industry. We have been representing our case to the government recently to enforce the exemption from BCD on imports of solar glass. The solar installation in FY 2023 showed a slightly lower of 12.8 gigawatts in FY 2023, against 13.9 gigawatts in FY 2022. However, overall domestic demand for solar glass will become stronger as demand for Indian-made modules has risen strongly in export markets like USA, together with strong demand in India. The additional demand for glass is being met through higher imports owing to limited availability of domestic manufacturing capacity and then the market share of Borosil Renewables in domestic market currently stood at 19% only in the last quarter of the last of last year. The overall demand situation for solar glass continues to look robust in India, as the domestic module manufacturing capacity are expected to rise to almost 10 gigawatts in the next two or three years, from about 35 gigawatts currently. The actual domestic manufacturing may rise to 35, 40 gigawatts annually, which will increase the demand to 3 times from the present levels over the next two, three years. Commissioning of a 10 megawatt captive power plant of solar plus wind energy being set up through an SPV in which Borosil has 31% shareholding, which was planned in December 2022, was delayed due to delay in approvals from the relevant state authority. I'm happy to share with you that the requisite approvals have now been obtained and the project is commissioned. This is expected to meet about 30% of the company's power demand. This has enabled us to increase the use of green power in our manufacturing, while also reducing the average cost of power. We are also looking to set up an additional 8 megawatts of solar plus wind power, once there is enough clarity on the regulations. I'm happy to share that commercial production from our third furnace, HG3, began from February 2023, taking a product production capacity to 1,000 tons per day, 6 gigawatts, from 450 tons per day, 2.8 gigawatts. Going forward, we shall now be in a position to more than double the sales, servicing a higher customer demand by receiving higher operating leverages. The demand for glass has shifted to higher sizes, where we now have achieved capability. About 55%-60% of the production is already in large sizes. We have recently commissioned facilities to service a higher volume of 2 mm back glass with holes drilled and also grid printing. These are used for a back glass in bifacial solar PV module and has become a major growth area. The recently acquired German solar glass manufacturing plant had additional operating capacity of 300 tons per day to BRL's manufacturing capacity. The plant had been operating at about 95% capacity. However, a cold trial was furnished and checked out from 13th March to 5th May, and the furnace has been brought back into production on 8th May. With a higher capacity of 350 tons, offering operating changes, which will help raise the production aim and achieve energy savings. A portion of the CapEx planned for the processing area is still under implementation, which will help achieve capability to supply larger sized glasses and also enable more efficient operations. An overall CapEx of EUR 34 million will be incurred on this, of which EUR 24 million is being borrowed from banks. I come to the consolidated results for the quarter, which is the first full quarter since acquisition. These results include the operations of the wholly owned subsidiaries abroad. The Interfloat Group registered a revenue of INR 121.79 crores. In this quarter, with an EBITDA of INR 265.12 crores, registering an EBITDA margin of 4.2%. The subsidies have been able to achieve this despite prohibitively low, prohibitively high energy and raw material prices, and also a shutdown of production from 13th March 2023. consolidated net revenue and EBITDA for the quarter four, financial year 2023, stands at INR 309.05 crores and INR 39.08 crores respectively. The energy prices are being corrected gradually. However, on the other hand, the sales pricing has been adjusted downwards in order to maintain competitiveness to the imports. We are witnessing the manufacturing and sourcing from second quarter in the European Union, USA, and Turkey. We see strong demand from Indian operations rising significantly over the next 2, 3 years. We believe that the manufacturing operations in Europe and in India, we are in a strategically advantageous position to meet high demand in the export markets. With that, I would now like to open the floor for questions that you may have. 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 your 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, you may enter star and one to ask a question. We will wait for a moment to add the question to your phone, please. First question is from the line of Jigar Shah, from JSG Investments. Please, go ahead. Good afternoon, sir, and thanks for the opportunity. First question is that, since we have 1,000 GT of capacity right now, and we can keep up to 60 solar module capacity, and India in the next 2-3 years will have 100+ kilowatts of solar module manufacturing capacity. Does this give us comfort that our current capacity and upcoming generated capacity of capacity can be sold off in domestic market itself? Yes, gives us a lot of comfort, provided the government does not make any further changes in its policy for solar modules in India. Okay, sir. Got it. The second question is that over the last two years, I see the realizations of solar has almost been stable, like around 150. What are margins are significantly correct. Is it because of elimination of DTC or the duties, or what is the reason our margins are staying while the realizations are staying the same? See, the cost of invoices gone up significantly, nearly by 60%, 70% in the last calendar year. On the other side, of course, selling prices did decline because of the absence of any anti-dumping duty with effect from August of 2017. 2022. Sorry, 2022. What we see here is actually an overall price, which is steady over a long period of time. We had certain contracts at older prices, and some which got executed at those prices. For all these various reasons, we see that the prices were a bit higher, but we did register a decline in the last quarter. Okay. What will be the current realization for solar glass? It's slightly lower. Okay, sir. Yeah. If you can give a number? We couldn't be right to put any number as of now, but it's slightly lower. Okay. Okay, got it. After a while, CapEx planning for FY 25, India plus Europe. We just completed our CapEx in Europe. We spent about a significant amount of money there to rebuild our furnace. As I mentioned in my talk, it's about 350 tons a day now, from 300 tons a day. The furnace will go another 5 years at least. We spent money there, and of course, we spend money here. At the moment, I do not see any special CapEx going in during the current year, other than routine maintenance CapEx. Got it, sir. sir, actually, for the next year, the 300 tons capacity we are planning in calendar year 25. Yeah. How much CapEx will be required for that? We are taking a pause as of now because we have just completed a large expansion. From 400 to frequency, we have moved to 1,360. We will be reviewing this in the next quarters and so on, we'll figure out which whether to go for a development return or what the project should be, and we will come back to you after that. Okay. Got it. The question is that, we had a tough year in Germany due to energy prices, etc., which has also impacted our margins over there. Has the situation normalized in Germany? If yes, then how much margins can we expect from Germany plant in normalized situation? There are 2 sources of energy that we use in Germany. One is natural gas, and the other is electrical power. The prices of natural gas have stabilized significantly to what they were before the war started. To that extent, it gives us some comfort that the prices are stabilized. However, the cost of electrical power is just very high. That, I believe, is based to a large extent on natural gas, and therefore, I would imagine that the price should be coming down in the foreseeable future. In that time, I would say that power prices still remain high. I see that the working this year would definitely be better, more, you know, more improved as compared to last year, which was quite a disastrous year, frankly. Okay, sir, got it. In general, in the normal situation, can you make, around 25% margin is what you make in India and Germany? That would be difficult to make in any overseas operations, particularly Europe and Germany. We believe that 10%-15% will be normal margin for that business area. Understood. Understood. Thanks a lot, sir. All the best for the coming years. Thank you. Thank you. If you wish to ask any questions, please enter star followed by one on your phone. The next question is from the line of Anshab Khan, Institutional Investor. Please go ahead. Hi, Sarina. Congrats for your acquisitions. It seems like I have, you know, a few questions from the acquisitions part. It's like, how are you planning to, like, you know, fund this in acquisition and CapEx plans going forward? Is there any chance of equity dilution going ahead? We already funded the acquisition and the money, and now we are entering CapEx. This is EUR 34 million, and out of that, EUR 24 million is being covered from banks, which is already tied up. The remaining money is funded from internal approvals of the company. There is no dilution chance going forward? There is no plan for that, particular thing. Whenever we have more CapEx, plan for expansion, that time we'll be raising it. Okay, thank you. My second question, you know, you think there is an anti-dumping duty request for government. Have you gotten a response from their side? Is it positive or, like, can we expect anything in future? Anti-dumping duty has been discontinued from 17th August, 2022. Though Piyush Goyal recommended, but Nirmala Sitharaman declined it, so there is no anti-dumping duty. That chapter is over. If we want the anti-dumping duties to come into play, we will have to file the application again for every country like China, Vietnam, and Malaysia, and then the entire process will be run, which may run up to 1 year or so, after which one can expect anti-dumping duty. If I correct me if I'm wrong, like, in my understanding, I heard, like, you know, we are already filing an application for that's not the case or, you know, are we still in the process? We had filed the application for continuation of anti-dumping duty against China, which was expiring in August 2022. The DGTR analyzed everything. They held the entire process, and after that, they recommended anti-dumping duty continuous over two years. Nirmala Sitharaman declined it. That matter is over now. If we want to invoke anti-dumping duty on any of those countries, we need to file fresh application now. Okay. Thanks, sir. We're looking forward for, you know, your profits, margin increase. Thanks for taking my questions. Thank you. Thank you. The next question is from Nikhil Abhyankar, from ICICI Securities. Please go ahead. thank you for taking my question, please. My first question is, what is the share of solar glass in the total cost of the module? It actually depends on which kind of module you are talking about. If it is conventional module, where you use glass in the front and, back sheet, module with back sheet at the back side, it would be 8-9%. If it is a bifacial, it might be 15% also. Okay. If it is a bifacial. My second question will be among the PLI winners, who will be ramping up their module facilities, so what portion of them are actually into bifacial module manufacturing? Basically, all the solar cells now being available are bifacially charged. You could eventually make bifacial modules from every cell available now, but it all depends on what kind of applications and what kind of projects you are doing. If you talk about international scenario, like China, already almost 45, 50% in bifacial modules, but it is yet to be followed in the same way in India and Europe. Gradually it will move higher up in the bifacial modules as we go along, because earlier the equipment were not capable of making bifacial module in India and also in Europe, but now they are changing the equipment and gradually they increase, there will be increase in the bifacial module. Sir, are we in talks with us to get into any kind of a long-term flat contract? Actually, we, most of these are our customers already, and those who are not, also we are in touch with them. The contracts, practically have not worked so far, like long-term contracts, but supplier arrangements on a monthly basis are there, and we hope to continue like that, because the price, there is no contract basically, and price is something which nobody wants to pre-fix because of the changing situation. Because solar glass prices keep changing, every component price keeps changing, and the dynamics of profitability keep shifting from here and there in the module industry. Nobody wants to have a fixed price. Basically, all the people who are going to have module capacity will require glass, and as the domestic value added is there, they will be getting higher PLI. Obviously, it will be interesting for them to buy locally. They are not looking to set up their own glass processing facility? Well, Adani and Reliance are looking to set up their own capacities, and also maybe like Shriram Electricals might look at setting up the capacity. Other than these, we have not heard any other player looking at adding a glass capacity. Okay. Just a final question, so what is the difference in realization for export and domestic? Export realization is higher than domestic realization by. I did not get you. Can you repeat? Export realization is higher compared to domestic realization by about 10%-12%. 10%. Okay, that's all from my side. Thank you, The next question is from the line of Santosh Kacharia, Individual Investor. Please go ahead. Santhosh, your line has been unmuted. Please switch to your question. This is with regard to inventories and logistics. 144% of inventory is there, indicate how much inventory and raw materials are on this? Sunil, can you respond on this? Yes, sir. You want to come back? In the meantime, we can continue with another question. Yeah, this is with, another, talking of minimum results. The power fuel was last INR 34.44 crores. Why in summer time? Now we are running third furnace as well, which is a large furnace of 550 ton per day. We need to have more power fuel consumption. From 450 ton, we have reached 1,000 ton consumption, obviously it will require power and fuel. It has not reflected in your turnover because your production has gone up from February eighth time. The revenue should be the. Yes, the production, commercial production has begun on 23rd February. Virtually 1 month production is happening, has happened in March, there has been some build in the inventory as well, which is why the ratio is not appearing the same. actually, what are your policy to put a margin between solar or, the inventory, but the books are not reflected like that? There are two things. One is that India impact is there, large impact is there of, you know, booking an invoice but not delivered to the customer. That's a large impact already. Plus, there were some buildup in the inventory as well, because initially when you start producing, you don't get 100% right material. One is to see sort of one month, two months or so before it can sell everything. just in, just this time, that 144% of inventory, how much is normal, wrong? All the raw materials and profit loss are writing on the raw material. Yeah, okay. Out of INR 174 crore inventory, sir, INR 74 crore inventory is raw material. Yeah. The rest inventory of, work in progress, stock, testing material, and select. Yeah, have you invoiced out of your inventory? Have you invoiced anything? The books are not yet. INR 36 crore around. In INR 36 crore, we have sold, but we have not other things yet, right? INR 36 crore is yet. Otherwise, profit has been much more than that, even. Yes. Thank you. Thank you. Thank you. The next question is from the line of Rishabh Shah from Dalal & Broacha. Please go ahead. Thank you so much for giving me the opportunity to ask a few questions to the management. I have few questions regarding the company. Will the management can tell me or have a brief idea about what will be the realization number for 1 mm glass that is imported from China, in India? Yeah, we obviously have idea about what prices the goods come in India, and in case the goods are sold by us, taking benchmark of import prices. Obviously we need to know that. Each and every buyer has different pricing. On an average basis, the goods, if you were to ask me on a per millimeter basis, it will be about INR 110-INR 115 per millimeter. Okay. Thank you. My next question would be regarding for the third furnace. The third furnace would be a dual furnace. If you know, the dual furnace where in the previous conference calls or in previous investor presentation, it was mentioned that it's run on furnace oil and on the diesel. Will that be a dual furnace? Yes. It'll be a multi-fuel furnace. It can be run on different sources of energy. It could be natural gas, could be furnace oil, diesel, LDO, diesel, LPG. Okay. Yeah. Now, my next question would be regarding the number of days for the production of the glass, which is your capacity is 1,350 TPD. For on yearly basis, if I want to calculate on a yearly basis, for how many days shall I take to the calculation for yearly basis of the production? ... You get the entire full year, but generally 20% would be downtime for the roller change and other things. So generally 330 days is what one can take. 330 days, which I heard? 330. 330 days. Okay. Okay. Also, can you please give me an update for the ADD by the government, which on ADD, that is going to be imposed on China by the government. Is there any update on that? I wish I would love to give you that update. This is completely beyond our scope. We have been trying very hard, and we are hopeful that we should succeed because we have very good reason for our request for grant of Basic Customs Duty. At least it's not anti-dumping duty. It's a question of when the government will get up and take notice. Okay. Okay, sir, thank you. Also, I just have one question regarding the 67 gigawatts of production, which was reported as of FY 23. Do we contribute 100% to it? Do the solar glass contribute 100% to it? No, no, not at all. No. This installation can be by way of domestically manufactured modules or by imported modules. A large portion of the installations in the past have been with the imported modules, it will be correct to say that it is made in India or like that, and we contribute for the module making. Domestic module manufacturing, of course, is going up now. As we speak, the domestic modules, maybe about 25% of the installation currently happening. Okay. Okay, thank you, sir. Sir, also, I would like to ask that, can you please tell me how much would be the export volume, if you can give me some guidance towards that? Exports are about 25% of the volume. 25% of the volume. Okay, sir. Thank you. Thank you very much for answering these questions, and I hope the company prospers in future. Thank you very much. Thank you for your question. Thank you. The next question is from the line of Sagar Sanghvi from ADD Capital. Please go ahead. Yeah, thanks for the opportunity, sir. I have two sets of questions. One on the volume front. Sir, I think, 50 tons per day, what is the full utilization that you've been looking at in terms of square meters? Next, in utilization, what kind of volume should be looking at in terms of square meters or any volume metrics that you can help me understand so that we can model a PNL, that is one. Two, on the raw material front, how should we look at raw material prices going ahead in terms of solar sizes? Do we have the contracts for the solar, the half annual contracts, and even on the other raw materials like power and fuel? On the production side or turnover side, one benchmark which I would give that if you were to run both the plants to capacity like India and Germany, the turnover one which one can expect could be about INR 1,800-1,900 crore per annum. Right. I understand. That is also, like, a particular realization for the square meter or something like that? Yeah. That's the reason I've given you a band of INR 1,800 crore-INR 1,900 crore, depending on what the price would be and what the volume we can expect. In terms of the quantity, if you were to ask me, from Indian operations, one can expect about 5 crore square meters 0.2 millimeter. Okay. The German operations, about 1.1 crore square meters. 1 2 millimeter. Okay. on the, Regarding your other question on the cost and prices, we do have supply contracts for solar for this calendar year. These, this time the contracts is on linked to benchmark of quarterly pricing. Should there be any changes in the quarterly pricing, it will be applicable to us from the next quarter. The price in this quarter. With a lag effect. With a lag effect, yes. Got it. For power and fuel, like power, of course, is, like this form, and, now we of course have our own power, and, fuel we buy from the government-owned companies and natural gas coming from GAIL. what would be the margin, should we be looking at? Is it 22% margin or will it be a normalized 15%-16% kind of margin or a consolidated number? Our margins in last 3 years have not been below 20%, so it is not right to assume 15% margin. We expect margins to be between 20%-25%, generally. On a consolidated, not international? Stand alone, stand alone, I'm saying. No, my question was on the consolidated. On international operations, we see margins to be between 10%-15%. One can do the calculations. Got it, sir. Okay, thank you. Thank you very much. Thank you. Next question is from the line of Anil Chopra. An institutional investor. Please go ahead. Yeah, I'm from the institution. I'm from investor, not an individual. Earlier, sir, you mentioned about the market share, domestic market share declining from 19%. Can we talk about the number on the export? I mean, what share do we have? I know China has a major rate there. Any market share which you can throw out or how come together? There are different markets in which we have different market shares. It is not uniform like in the market. Of course, we can discuss about the market share, and we may not have complete idea about the market as well. Like we are- Okay. For our German operations, we know that we have a large market share there. Our German company is holding almost 60%-65% of the market in Europe. We have another 10-12% there, so that market share we enjoy there. In Turkey, maybe about again 10-15%. In USA, we are hardly there, maybe 1% or 2%. Okay. This export which we are doing is largely targeted to the European region or Europe and Turkey. It's Europe and Turkey. Going ahead, considering the fact, you know, that domestic consumption is going to be inside, what would be our strategy in the export versus consumption versus largely we are in the export market or how does that happen? We maintain our focus on the export market, subject to the limitation of growth there sometimes. Of course, we'll have to increase our presence in the domestic market as we grow the volumes, because the demand and volume manufacturing activity in India is growing very fast as compared to other countries, other markets. Maybe after one or two years, U.S. will become another growth area. As of now, we concentrate on Turkey, Europe and India. Okay. Sorry if I'm running a bit late, but based on the three core production and sales volume, you want to say the competition among the domestic and export sales, I mean, in comparison? The sales volume has gone up by about 5, 7, 8% in the quarter, led by the commissioning of SG-3, but it has not got a full operational as of now. We started only from 23rd February. From the current quarter, the impact will come in a major way. It will show a right picture. Okay. Right, and export and domestic mix? where it was about 25, 26% in export in the last quarter. The last quarter. Our earlier agreements on the start in December 23, and we have not entered into a new contract. How much is the elevated price compared to this report? We are still waiting for the right level of the prices for a new contract, but in the meantime, we are using major part of our operations to furnace oil, which is cheaper than the market-related gas as of now. The market-related gas prices also have come down, but they are still way above furnace oil prices. When they are almost at same level, we'll like to enter into contracts. Fine. like in Europe, even in India, we are using. Sorry, say again? Likewise in our European operation, even in domestic market, we are using that same method. In Europe, we are using completely natural gas and oxygen and like that. There's no use of furnace oil in European operation. In India, almost about 18% to 20% is the utilization of gas, and rest is furnace oil. That's the mix right now in India, but as when the prices of gas are right, we will again shift back to gas. Right. With the commissioning of our first part time, any rough figure you can mention how much are we saving in power plant? Or how much we could save with the commissioning of the SG-3. We hope to save about, INR 35-40 lakhs per month. Okay. Lastly, sir, your opening remarks, you mentioned about we are rethinking on the strategy of setting up SG-4 and SG-5. When we had a discussion on this expansion, we had mentioned all our clients, we do have a contract with them to supply. Some of them are going for the expansion down and manufacturing. Reasons to relook at the strategy, actually, the demand side increase now, actually, with people, as I said. We are currently in the process of stabilizing our expansion, because after having expanded from 450 tons to 1,350 tons, we need to take a pause, and we cannot be in a hurry. Similarly, there are other aspects like on the duty front, there is no clarity as of now, and we cannot change the revenue and not the bottom line. We would not like to sacrifice too much on the bottom line and just chase the growth. We will take the call at opportune time when to, when to bring money for the next expansion. Sir, lastly, sir, this will be, possibly decide to go ahead with the expansion next quarter. How much time will it take for, will it be the same timeline or there will be some kind of problem? Yeah, it takes about 15 to 18 months anyway. Whenever we take the call from there, it can be another 18 months we can take. Thank you, sir. Thanks for asking the question. Thank you. The next question is from the line of Sushant Sharma from Dalal & Broacha. Please go ahead. Hello. Thank you very much for taking my questions again. One of the questions which I have is for the backward integration that the company had given the guidance for soda ash and natural gas. Are there any updates on the backward integration for that? We do not have any such plans. We have never given guidance to get into backward integration of these products. I think you feel your mistakes. Okay. Also, I'll just have one question regarding, are there any differentiation in the quality of glass that is produced by us and the glass which are imported from China, Vietnam, and Malaysia? Generally, the quality is same. However, our quality, there are some differences in composition, which gives our glass longevity, which we do because we believe in making a better product. Okay. Okay, sir, thank you very much. Thank you for having me on the conference call. Thank you. Thank you. Thank you. Next, if you wish to ask any questions, you have to star and one. The next question is from the line of Chris Chen, and the Institutional Investor. Please go ahead. Hi, good afternoon. My question is pertaining to the capital allocation policy. In the absence of in the ongoing year, what will be the capital allocation policy regarding the free cash flows? We are continuously innovating and continuously looking at various opportunities in the, in the business. We have recently started R&D center also in Pune, with an objective to develop products or come up with some measures and all. Whatever post-selling measures are there, they may not require large CapEx. In case we are able to come up with some new products, new ideas, we will discuss that, and then we can, we can come back with the plans to do any CapEx from there. In the, in the meantime, the small CapEx or middle CapEx will continue to do. My question was, whether the free cash flow that we generate this year, whether we will save it for the CapEx that is upcoming, in next year, or whether we will use it to reduce the debt or a possible dividend payout. What are the management's thinking on this? I think we will take the call at appropriate time. Right now, we are not in a hurry to decide on that. Our next expansion may not be very late as well. Maybe the, for most probability, the cash flow will be used for next CapEx cycle. We'll have to take a call when we reach that level. Thank you. I have just one more follow-up question. Earlier our exports were very high margin products for us. Now that we have a European factory, where is the material which we are producing in Europe is being sold, versus where were we exporting from the Indian manufacturing houses? Material produced in Germany is getting sold almost 100% into European market only. Whereas we have been exporting to Europe, Turkey, USA, MENA country, and all the areas where the demand is there. That's how it is being looked at. Currently also, we continue to export material from India to European market because there is a higher demand of glass, which the German plant cannot completely meet. Okay, I understand. None of our exports are being sacrificed because of this European glass, right? No, because they contribute only 60% of the market, and there is room available for other players to buy. We will continue to export. Understood. That's all from my side. Thank you. The next question is from the line of Chetan Gindodia. Please go ahead. You get your question, please unmute your line and proceed with your question. Thank you for taking my question. My first question would be on on the Europe business. I will say the plant has, which is actually German plant until now. What would be the first share from the European plant in terms of this year, probably? What is your on the backlog? You said utilization level can be at 20% plus at all, and there is going to be room for huge scope in the European market. Can we see any guidance for the European business from the German plant? We can probably expect a turnover of over INR 550 crore-INR 600 crore from that plant. The margin would be like, 15%, 20%? It can 10%-15% inter margin. Okay. Is this high end as a typical or we can earn a little more? Well, we have just rebuilt the furnace, and we will have to increase the production, bring in efficiency and all. It could be slightly better, but this is what we normally expect when we start the production. As we go along, we'll try to more improve our production over there. What will be the future exports to the location with DC, I think, China? How competitive are we in those areas? Like, probably I know that your main exposure in Europe and Central Europe. How are we competing with China and everything? Even something we see that. In both these markets, we are encompassing DC with China, but there is no antidumping duty against Malaysia and Vietnam, who happens to be the largest leader to these two geographically one here. We have to compete with them. These entities are also like Chinese companies? Yeah, they are Chinese company. Yeah, that's it from my side, completion and all that. Thank you. We have a follow-up question on the line of Ashish Jain and additional press. Please go ahead. One question. In the earlier calls, we have suggested that a 1,000 TPD plant would help generate 1,200 crores of revenue, which could be true 1.2x asset term. In the previous question, you suggested that a 2-3x plant could generate 500 crores of revenue, which is much higher asset terms. Would you say the European plants are much better in terms of efficiency and productivity? No. In fact, the prices in Europe are higher, compared to what they are in India. It can generate a better profit as well, because there are a lot of markets which they sell, like greenhouse or biofuel markets, which are paying higher amount there. In Indian context, we have to compete with China, and our prices remain lower. That also is another factor in India. Okay. sir, regarding Indian manufacturing plant, 1.2 times asset term is still an ideal situation. Is that a 1.5? 1.2 asset term is, because our is a greenfield, a brownfield expansion here, and we have set up the old plants, like 2010, 2019 and all. If it was a new plant to be set up in India, the asset term will not be like that. It will be mostly 28, 5, or like that. In Indian context, for our company, we can say it will be 1.2 times, but if you were to really look at any greenfield plant, it will be much less than 1. Okay. That's very helpful. Thank you so much. Thank you. As there are no further questions, I would now like to have the conference over to management for closing comments. Thank you very much for your questions. These have been, they reveal the interest that investors are taking in the stock and in the operations of the company. I can only assure investors that we continue to remain alive to the situation, and we are constantly working towards making products have a higher realization. We are also working constantly to maximize production and also to keep our costs at the lowest possible level. I do want to inform people that what we have done now is we have installed a very modern, very sophisticated plant, and it just takes time to tune it up and to get the maximum output from this. we're hard at work, and we are seeing results every week, I think, keep getting better. We are quite confident that in time, we should be able to cover all the points that need to be covered, and we should be able to have a very efficient production from the total operation. Thank you. Thank you. On behalf of Axis Capital Limited, that concludes this conference. Thank you for joining us, and you may now disconnect.