Ladies and gentlemen, good day, and welcome to the Carborundum Universal Q1 FY25 Earnings Conference Call hosted by Kotak Securities Limited. As a reminder, all participant lines will be in 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 the star then zero on your touchtone phone. I now hand the conference over to Mr. Aditya Mongia, Lead Analyst, Industrial Transit Sector. Thank you, and over to you, sir. Thank you, Steve, and welcome everyone to the Q1 FY 25 Earnings Call for Carborundum Universal. Introducing the management we have today with us, Mr. Sridharan Rangarajan, the Managing Director; Mr. Sushil Bendale, the Chief Financial Officer; Mr. G. Chandramouli, Advisor, Investor Relations; and Mr. Dinesh Kumar, Senior Manager of Strategic Planning. We would request the management to make the initial remarks on the results that have gone by, post which we can start with the Q&A session. Mr. Rangarajan and your team, over to you. Thank you. Sure. Good morning. Good morning to all of you. I am Chandramouli. Before we begin, as a practice, I will read out our disclaimer. During this call, we may make certain statements which reflect our outlook for the future or which could be considered as a forward-looking statement. These statements are based on the management's current expectations and are associated with uncertainties, and these are more fully detailed in our annual report, which may cause the actual results to differ. Hence, these statements must be reviewed in conjunction with the risks that company faces. Thank you. Thank you. Good morning, and very happy to meet you all again. Hope all of you are doing fine. There are rains, there are other natural calamities. Hope everyone is safe, and take care of your health. Good morning to all of you. A warm welcome to our first earnings call for the financial year FY 2025. Today I have with me Sushil Bendale, who is our CFO, and G. Chandramouli, the Investor Relations person, and Mr. Dinesh, Head of Strategic Planning. We will begin this call by providing an overview, and then later on, we will have a Q&A from you. Consolidated results, I'll start with. Consolidated sales for Q1 FY 2025 were almost same at INR 1,184 crores compared to Q1 FY 2024. Consolidated abrasives grew at 6.3%, whereas there is a degrowth in ceramics and electrominerals segment by 6% and 9% respectively. On sequential basis, abrasives grew by 3.5%, electrominerals was flat, and ceramics had a degrowth of 4%. PBIT for the quarter degrew by 3.5% to INR 149 crores, with PBIT margin of 12.6% against INR 155 crores in Q1 FY 2024, with a PBIT margin of 13%. This was majorly contributed by abrasives growth at 76%, while ceramics and electrominerals degrew by 20% and 42% respectively. The PBIT margin for abrasives improved significantly from 6% in Q1 FY 2024 to 10% in Q1 of the current financial year. The ceramics margin dropped from 28.2% to 24%, and margin of Electrominerals dropped from 17.7% to 11.4%. Compared with Q4 FY 2024, abrasives margin dropped by 188 basis points, and ceramics by 120 basis points, and Electrominerals by 219 basis points. I will cover this in detail as I make my opening remark. Profit after tax for the quarter was almost flat at INR 113 crore compared to Q1 FY 2024. So there's a degrowth of 16.2% against Q4 FY 2024. Foskor Zirconia delivered profits in Q4 2024, but they incurred losses in Q1 FY 2025. Also, profits from VAW Russia is lower, mainly due to exchange impact. I will cover this again in detail. These two subsidiaries accounted for about INR 17 crore dropped in profit after tax. Standalone. Standalone business grew marginally by 1% to INR 664 crore compared to Q1, as well as Q4 of FY 2024. In comparison to Q1 FY 2024, Abrasives segment grew by 7%, Electro Minerals degrew by 4%, and Ceramics degrew by 6%. On sequential basis, Electro Minerals grew by 5.4%, Abrasives grew by 3.7%, and Ceramics degrew by 1.7%. PBIT for the quarter was at INR 119 crore, representing a degrowth of 2% quarter over quarter and 4% sequentially. The PBIT margin dropped from 18.5% in Q1 FY 2024 to 18% in Q1 of the current financial year. Though the Abrasives margin improved from 15.3% to 17.6%, drop in margin from Electro Minerals and Ceramics segments resulted in drop by 54 basis points. Profit after tax for Q1 FY 2025 was almost flat at INR 93 crores compared to Q1 of the last year, and marginal drop of 1% from Q1 FY 2024. I'll go by business. Abrasives. Consolidated Abrasives revenue for Q1 FY 2025 was INR 552 crores, with growth of 6.3% compared to the same period last year, and a growth of 3.5% sequentially. Standalone business and Rhodius plus AWUKO showed good growth compared to Q1 FY 2024. Whereas the domestic subsidiary, selling abrasives, VAW Russia, showed negative growth. Selling was impacted mainly due to slowdown in domestic agro business, despite their good performance in export. VAW mainly had an exchange impact as their sales was flat in local currency. Standalone abrasives for the quarter, the sales grew 7.3% to INR 303 crore compared to Q1 FY 2024, and 3.7% sequentially. On quarter-over-quarter basis, the growth was majorly driven by industrial and retail segments, whereas the major growth is coming from volume, there the major growth is coming from volume increase. However, there's a single digit degrowth in precision segment, mainly from exports, whereas the domestic market volumes and price remained at similar levels as that of the last year. VAW for the quarter, the sales in local currency grew by 16% compared to Q4 FY 2024, mainly driven by increase in volumes, though sales were flat compared to Q1 of the last year. The drop in volumes was compensated by similar increase in price realization. I'll cover VAW in detail when I go to electrominerals segment. Rhodius. Rhodius in Q1 achieved the net sales of EUR 17.3 million, compared to EUR 15.5 million in Q1 of FY 2024, and EUR 17.1 million in Q4 FY 2024. This represents a 12% growth over the last year, majorly driven by increase in sales to Europe and Americas. There was an increase in volume to an extent of 9%, while mix and price enabled 1%. Coming to the bottom line performance, I'm happy to share that Rhodius delivered profit in this quarter as well, and delivered PAT of EUR 0.3 million, compared to the loss after tax of EUR 0.8 million in Q1 of the last year. This was on account of favorable raw material price and improvements in production, performance and volume on a... Sequential basis, there's a marginal drop in profit to an extent of INR 0.3 million, mainly coming from increase in raw material prices and one-time employee payments. AWUKO. Coming to AWUKO's performance, we achieved EUR 3 million in sales for the quarter, which is around 20% better compared to Q1 of the FY 2024, as well as sequentially. The losses after tax has come down from EUR 0.73 million in Q1 to EUR 0.6 million in Q1 of this year. However, the losses has increased from a level of EUR 0.4 million in Q4. As we told earlier, we expect AWUKO to break even at EBITDA level in FY 2025. The small loss of EUR 0.7 million-1 million, we still remain, maintain the same outlook. Americas, there was a small degrowth of 4%, 13% compared to Q4 and Q1 of the last year, mainly impacted due to logistics-related challenges, but I think their program for the full year is intact. I will now cover the bottom line performance of this segment. Consolidated PBIT for the quarter grew significantly by 76% compared to Q1 of the last year. This resulted in margins improving from 6% in Q1 FY 2024 to 10% in Q1 FY 2025. This was mainly due to better performance in standalone, losses coming down in AWUKO and margins moving, better in Rhodius. Standalone PBIT grew by 23.6% to INR 53.4 crores quarter-over-quarter, and margins improved to 17.6% compared to 15.3% during the last year, mainly on account of product mix, softening of input costs, improvement in operational efficiencies and better realization. Sequentially, the PBIT went down by INR 8.2 crores, mainly due to lower profits from Rhodius and AWUKO, which we just covered. Electro Minerals. Consolidated Electro Minerals on a consolidated basis for the quarter delivered similar revenue at INR 381 crores compared to Q4 FY 2024. However, there's a degrowth of 9% compared to Q1 of the last year, mainly coming from VAW and CUMI standalone. I'll be covering more details now. Standalone Electro Minerals, sales for the quarter was INR 789 crore, which represents a growth of 5.4% compared to Q4 of FY 2024, and a degrowth of 4% when compared to Q1 of the last year. There has been good volume growth in aluminas and silicon carbide sequentially and, sorry, both sequentially, and prices remain at similar level. But compared with Q1 of FY 2024, there has been a drop in price realization by 4%-6%, and you would see that the prices have been dropping since the last year, Q1, so that is what this comparison is. So this, but the volumes remained intact, and we are also doing price corrections, and we will get back to normalcy. VAW for the quarter, sales grew by 5% to RUB 2.4 billion against RUB 2.3 billion in Q4 FY 2024 on account of increase in volumes, mainly. Price realizations were flat. Sales were flat compared to Q1 FY 2024. When converted to INR, it shows a downward performance quarter-over-quarter because of strong ruble in Q1 FY 2024, where it was converted at one ruble equivalent to INR 1.01 on an average, whereas it has become weak at 0.92 in Q1 FY 2025. The operations are running well, and there has been significant increase in sales volumes of refractories and abrasives by 28% and 14% respectively. Volume increase in silicon carbide is also very good. Here, I want to highlight that sales volume to export has increased compared to Q4 of FY 2024, as well as compared to Q1 of the last year. On this backdrop, the mix towards export sales volume has increased to 43% compared to 40%. They delivered a profit after tax of INR 287 million in Q1 FY 2025. It gains INR 423 million during the same period of the last year and INR 384 million in Q4 FY 2024. This was mainly due to exchange impact. Operationally, VAW is doing fine. To illustrate, in March 2023, one US dollar was equivalent to INR 77.98. I'm talking March 2023. This became INR 89.29 in June 2023. So when you close the books in June 2023, you would restate your receivables and the book bank balances and probably realizations. This resulted in exchange gain by restating the foreign currency receivable, bank balance, and realizations. However, in March 2024, one US dollar was $1 = INR 92.59. This became INR 85.75 in June 2024. This difference in movement is one of the main factor for the reduction in profit to the extent of INR 20-23 crore, which you will see this in other income drop as well. They continue to be debt free and the outlook remains stable and positive. Now, I move to Foskor Zirconia. For the quarter, the sales volume increased by 12% to 1,050 metric tons compared to Q1 of the last year, and 3% growth sequentially. There is a decrease in price realization. This is the main reason for also the impact in the profitability. So despite maintaining the sales volume, Foscor incurred loss, mainly because of lower realization and product mix. We expect Q2 and rest of the year to be better than this, and the plans for the same are in place. This covered the revenue portion of the Electro Minerals segment. Now, I'll cover the bottom line performance of the segment. Consolidated PBIT for the quarter was INR 43.3 crore, which degrew by 42% compared to Q1 of the last year. The standalone business, VAW and Foscor, delivered lower PBIT than that of the last year. Standalone business was hit by a drop in price realization. This is compared to Q1 of the last year, owing to lower price of, you know, domestic imports. VAW, as explained, 2023 gross reduction in profit was mainly on account of the exchange impact in their books. Foscor profits were impacted with a drop in price and product mix. Combined together, there was a drop of INR 31 crore in PBIT. Standalone PBIT grew by 46% to INR 616 crore compared to Q4 FY 2024, and margins improved from 6.2% to 8.5%. Ceramics. Consolidated ceramics for the quarter degrew by 6% to INR 270 crore, quarter-over-quarter, and 4% compared to Q4 FY 2024. The drop was mainly from standalone business, as engineered ceramics segment is yet to recover, as well as some refractory orders are getting delayed. Standalone ceramics, the refractory wear ceramics and metallized cylinders business combined together grew 17% compared to Q1 of FY 2024, and 1.4% compared to Q4 FY 2024. The degrowth in engineered ceramics, overall ceramic segment resulted in a degrowth of 6.2% to INR 217 crore. I think, I will also cover this in a minute later, but I'll wait for that. Subsidiaries in America registered good growth quarter-over-quarter and sequentially, whereas Australian subsidiary was flat compared to Q1 of the last year. I'll now cover the consolidated PBIT for the quarter was INR 65 crore, representing a degrowth of 9% compared to Q4 of the last year. This resulted in margin declining from 25.2% in Q4 FY 2024 to 24% in Q1 FY 2025. This was mainly due to a drop in margins of standalone business to 22.7% by 83 basis points, and margins dropped in Australian subsidiaries. The drop in margins of standalone was mainly on account of mix between Industrial Ceramics and Refractories product mix, within and also the product mix within the Industrial Ceramics. I will come back again, but I, I request, our CFO, Sushil, to cover, the financials in detail. Thank you, sir. So first I'll talk about the consolidated PBIT margin. For the quarter, consolidated PBIT margin was at 12.6%, compared to 13% in Q1 of FY 2024. This was majorly contributed by better performance in Abrasives. Abrasives margins actually improved from 6% to 10%. While Ceramics margins declined from 28.2% to 24%, and Electro Minerals margins declined from 17.7% to 11.4%. Now, I'll talk about the standalone. For the quarter, standalone PBIT margin was at 18%, compared to 18.5% during the same period last year. Abrasives margins improved from 15.3% to 17.6%. Ceramics margins declined from 26.9% to 22.7%, and Electro Minerals margins declined from 11.6% to 8.5%. Now, I'll talk about the abrasives, abrasives segment. Consolidated PBIT margins for the quarter improved from 6% to 10%, mainly contributed by standalone abrasives business margins, increasing from 15.3% to 17.6%. And this was on the back of better realizations, improved operational efficiencies, losses coming down in Awuco, and margins moving from negative to positive for ODS. Now, Electro Minerals. For the quarter, at a consolidated level, PBIT margin has decreased from 17.7% during same period last year, to 11.4% in the current financial year. Standalone business, VAW and Foskor delivered lower PBIT than that of last year. Standalone business was primarily hit due to drop in price realizations, by almost 4%-6%, due to low price pressure owing to lower price imports. VAW, primarily because of the exchange impact, as was explained earlier, and Foskor, due to drop in price realizations and product mix. But combined together, there was a drop of INR 31 crore in PBIT, but standalone PBIT grew by 46% to INR 16 crore compared to Q4 FY 2024, and margins improved from 6.2% to 8.5%. Now, ceramics. For the quarter, consolidated PBIT margins declined from 28.2% in Q1 FY 2024 to 24%. Standalone margins also decreased from 26.9% to 22.7%. The drop in margins of standalone was primarily on account of mix between industrial ceramics and refractories, and the product mix within the industrial ceramics business. VAW delivered better margins, while QMI America and Australia had lower margins than the same period last year. Now, coming to the debt position, there was no debt in our standalone books, and total debt at a consolidated basis was at INR 112 crores at the end of Q1 FY 2025, compared to INR 113 crores at the end of FY 2024, and INR 178 crores at the end of Q1 FY 2024. The debt-to-equity ratio was at 0.03 at a consolidated level. Now, CapEx. During Q1 of FY 2025, our CapEx investment was INR 63 crores at a consolidated level. ROCE, for the quarter, return on capital employed at a consolidated level is 16.9%, compared to 19.7% during the same period last year. At a standalone level, it is at 20% compared to 22.6. For consolidated businesses, ROCE in Q1 FY25 for abrasives improved from 9.4% to 15.5%, while ceramics has declined from 54.6% to 41.5%, and Electrominerals also decreased from 31.9% to 17.8%.... For the standalone businesses, ROCE for Q1 FY25 for abrasives has improved from 44.8% to 45.4%, while ceramics and Electrominerals have decreased. Now I request Mr. Sridharan to take you through the next section, which talks about our future outlook. Right. Thank you. Thank you, Sushil. We talked about the guidance for FY 2025 last time. I will comment on what we communicated earlier and what we expect, considering the Q1 performance. We communicated fully a consolidated sales growth could be 9%-11%, and consolidated sales could be INR 5,100-5,200 crores. We are confident of delivering the same. We expect the growth of 11%-12% in abrasives, 12%-14% in ceramics, as told earlier. We remind the same stands for electrominerals as well, a growth of 5%-6%. Abrasives India growth would be 9%-11%, as communicated earlier. Rhodius is doing fine against what we planned. We are confident of delivering growth of 10%, what we communicated earlier. AWUKO delivered in Q1 FY25 plan, and we are confident of delivering what we communicated during our last call, a growth of INR 8 million-INR 10 million over FY24. Industrial ceramics, we still hold the growth projection of 13%-15% in the segment, driven by India and Americas and Australia. Australia in Q1 FY24 was marginally below the same period last year, but it's a very small percentage. Q2 is also expected to be on similar line. Growth in the second half of the year would be better, which will result in marginal growth in FY25 against FY24, what we told earlier. This is based on the their order books as well as the projections that we have from some of the key customers. The factory, we are confident of delivering growth around 12%-13% over the last year. They have a very strong order book, and there are some delays in scheduling the order. That is what is having some seasonality issues, but it would happen. Electro Minerals is expected to deliver similar performance over the last year in ruble terms. This is what we have planned and what we communicate. Growth from standalone business is expected to be in line with our plan. For Foskor, though Q1 FY 21 was impacted, we expect coming quarters to be better. We expect good growth over the last year, but some shortfall from the plan. On bottom line, we are confident of delivering what we communicated earlier. A consolidated PBIT margin to improve by 20 basis points to 30 basis points, this is what we communicated. We expect similar numbers. Consolidated abrasive margin to improve by another 100 basis points in FY 2025. We still hold the same. Ceramics margin should be similar as that of FY 2024. Electrominerals, 20-30 basis points improvement in FY 2025. On CapEx side, we are confident of spending INR 350 crores. We spent INR 63 crores. So by and large, I would say, you know, Q1, the top line and profitability are in line with the last year. It's better than our internal business plan. We expect the second half to be better. All the projects that we plan to execute are in line, and we are confident of what we guided the last call. Thank you, and we'll open up for Q&A. 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 touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Amit Anwani from PL Capital. Please go ahead. Hi, sir. Thanks for taking my question. First question is on VAW. So you need highlighted that, kind of flattish volumes, we are expecting. Just wanted to understand, I think we were talking about debottlenecking, and I recollect the utilizations were also 85%+. Just wanted to understand, is there any scope for debottlenecking? What is the capacity utilizations? And, is there any constraint now with respect to volumes in the coming quarters and years from VAW? Thank you, Amit. I think VAW is doing fine. Capacity utilizations, mainly the silicon carbide, is very much on full capacity utilization. The debottlenecking program is happening, and it will come on place. But I think, when I said flat, is largely is a function of comparative to the quarters that we are comparing. I think, given the circumstances, given what, you know, they are all going through that, I think they are doing fine. We expect capacities will be augmented in time, over the next year. Sure. Second, sir, wanted to have an update on the Chinese dumping impact. You alluded in the previous quarters also in abrasives. I think we were facing issues with respect to the retail abrasive, and there was a strategy that we'd like to enhance the distribution channel. And there was some competition from the other paint companies. So just wanted to have an understanding how the quarter was in abrasives with respect to the Chinese and competition and local competition, and also electrominerals on alumina, where we were facing the realization issues. So if you could elaborate on these points, yeah. Well, I think, as we communicated in my opening remark, the abrasives segments are doing fine, and I think the growth rate is also compared to what is happening with the competition we have, tracking better. Our programs of strategy are coming in place, and it is paying dividends. We feel that, you know, the pricing pressure from, you know, China would continue for some time, but I don't think it is going to be for long. In terms of the aluminas, you know, if you look at the trend from Q1 of the last year, it continued to fall, I think, because of the competition. We see some correction. In fact, Chinese prices have started going up. Starting next quarter, we are also putting up the price, and we think that there would be a reversal in the price happening in electrominerals. Sure, sir. Lastly, few other companies who are exporting are highlighting the container availability issue and logistics issue witnessed this quarter. So do you see that? So first of all, any impact you see, and will that be any risk to our export shipments because of this for this year? Thank you. Yeah. I think it's a two-way issue, both in imports as well as in export. This logistics issue, availability of containers, as well as the freight movement, have been impacted, and I think all of us are going through this issue. Sometimes it causes delay, sometimes it causes higher freight costs. In all these combinations we are facing, and we are working with the customers as well as with the logistic agency to see how do we address this, and this is across. Are we factoring in some bit of it in our growth guidance? I have already factored in whatever I have told. Sure, sir. Thank you. Thanks for taking my questions. All the best. Thank you. Thank you. The next question is from the line of Ravi Swaminathan from Spark Capital Advisors. Please go ahead. Hi, sir, thanks for taking my question. My first question is with respect to the Ceramics and Refractories business. You had mentioned that this quarter's decline had been because of the Engineered Ceramics but loss of business from that single customer and Refractories also slowing down a bit. Just wanted to check with you, is there a bottoming out that is happening with respect to that business from that single customer? And why there's been a weakness with respect to Refractories? Is it more related to election-related issues or something of that sort? Yeah. I think Q1 of the last year was also a high peak as far as you know the customer that we are talking about. But since then, you know, the company has picked up. We feel that Q2 onwards this pickup will happen, and we have factored in whatever guideline that I have shared sometime back now, considers all this, and we are confident of delivering a higher growth in ceramics. Based on the interactions with customers and order book, we feel that we will do that. As far as the refractory, no impact due to elections, but obviously certain customers' inspection, because a lot of this is also dependent on their project execution, timelines and inspection of the product. So there are some delays, and based on that, some invoices could not happen in Q1. But given their strong order book, that what we are seeing, we feel that together we will deliver the guidelines we have communicated. Understood. And, if you could talk more about the any progresses with respect to some of the special and specific areas that we are, we are looking at, like high purity silicon carbide. Last call you had mentioned that, you'll be adding, per month, 6 tons. And similarly, graphene, synthetic graphite. If you can talk about incrementally what has happened in these segments in the past 3 months. And over a 3-5-year period, cumulatively, any ballpark numbers in terms of revenue and profitability that can pan out in these subsegments? So the progress is going well as per the timeline, as far as the HPSIC project is concerned. And I think we are tracking to the timeline, and I think as we communicated earlier, this would serve both semiconductor and technical ceramics market, and we are tracking to the timeline and schedule, so we should be fine with that. We are also fine with the, you know, the project execution in industrial ceramics as far as the semiconductor ceramics. That project is on, and I think we have started the CapEx program for that. Similarly, also the CapEx program for the defense side is also on. So all these programs, whatever we communicated, is very much in line and progressing as per our internal schedule. And we feel that those should be coming along as per our internal guidelines. High-purity silicon carbide, any top line that we can kind of think of over the next 2, 3 years? So this, 6, 6 tons per month would translate to roughly around 70 tons per annum, and the realizations are like 25-30 times more than the existing silicon carbide realization. So it's like, if we put a rough math, it comes to around INR 20, 20, 25 crores of revenue. So is that the kind of fair assumption in terms of overall revenue potential that is there in the near term, the next two, three years for this business? So, thank you for taking effort to do some calculation, Ravi. We would come back and share with the larger team as and when we are ready with the project, and then some progress we are making in that direction. It would be a better job at that point in time for us to communicate. Understood. And any progress on Graphene, Synthetic Graphite? What are the potentials there? Graphene, as we said that I think, we are working on, multiple areas. Bio packaging and then the car detailing, are the two areas. Other than that, we are also working on rubber and cement and a few coatings. These are the areas that we are currently working on. The progress is good, and I think, as I communicated in the last call, this will be small, incremental, but over time, we will build that capability. I think allow us, a reasonable time, and I think this would become a good, reasonable business as we progress. Give us some time. I mean, this would be a 3-5-year window, but it will, it should happen. Okay. Any addressable market size for graphene itself in India or abroad? Any number that you have in mind, sir? These are all good market size. We are looking at the opportunity set in multiple areas are really good. Hence, we feel, you know... And also it gives us an advantage, competitive advantage in our core product as well. So hence, together, we feel that it is, these are all good bets to make, and that is why we are taking it. Okay. Yeah. Thank you. Thank you. Thank you. Thank you. The next question is from the line of Harshit Patel from Equirus Securities. Please go ahead. Thank you very much for the opportunity, sir. So firstly, on the clean energy piece of the business, you have earlier indicated that we were in discussion with multiple other players as well, mainly in the developed countries, to get the approvals, getting trials done, et cetera. Has there been any meaningful progress on that? Have we started getting some revenues from any of these customers? So, in the sector that we are serving, this is on the solid oxide fuel cells. We are working with the biggest person in that field, and there are others are very, very small and picking up. I'm not sure where you got this information that, you know, we are working with multiple people, et cetera. So this is a program where, you know, our concentration is only on, this single customer. But I think what we are working on is diversification in semiconductor fab equipment-based ceramics. This is one clear area. We have got significant approvals, and we are also getting orders on that direction, and that is why we are making an investment in separate capacity. That, I think, will one track, and also the defense and aerospace is another track. These are the two tracks. The third track is going to be on electronic semiconductors. This is, sorry, electronic ceramics. That is one track we have working on. I think shortly we will also make few capacity investments for that. So these things will help us to diversify and grow in newer and also meaningful market size areas. Understood. Sir, just a follow-up to that, even your annual report mentions that a lot of new product development is happening in the armored vehicle protection. You also just mentioned the same, and you have also done commercialization to a significant scale. So could you give some flavor in terms of whether this is for domestic market or for exports, the size of this business, and who are the competitors that we compete with over here? So to start with, it will be for domestic market, and then as we start completing, you know, and also making the domestic market satisfied, we will work on the export market. The market size is quite large, and in fact, we are playing in a very niche area, so I think, we, we will make an investment in CapEx to the tune of about, say, INR 30-40 crores. So that's the CapEx program that we are looking at. The revenues, et cetera, as we mature, we will share. Understood. Sir, just lastly, on PLUSS, two years ago, I think the plan was to break even in FY 2024. However, that has not happened. I think we have still incurred losses last year. So what is the trajectory here in terms of revenues, margins, break even, et cetera? Also, depreciation seems to be quite high, both in PLUSS as well as in Rhodius. So the current run rates will sustain in the foreseeable future, or do we expect this depreciation to come down? So, as far as PLUSS is concerned, we have been making profit in the last two quarters, and I think they're a really encouraging order book we have, and definitely we are expecting, you know, break even and better performance this year. And I think you are, when you talk about depreciation, you are talking about probably the intangible write-offs. Perhaps that's what- Yes, sir. Correct. Yes, sir. Right. I think, this will taper down. As far as Rhodius is concerned, it should taper down after three years. So, I mean, three years after FY 2025, so it should taper down, and, I feel that at this point in time, Rhodius is making profit even after the PPA adjustment, so we feel they are tracking to the program. Both PLUSS and Rhodius is in good shape. Understood. Sir, just lastly, on the tax rate. The tax rate at the subsidiary level seems to be very high for this particular quarter. Is there any specific reason for that? Also, going forward, what would be the blended tax rate for us at the subsidiary level? That would be my last question. So I think for your keen, inquisitive eyes, I think you have done a very good analysis. I think the tax rate is higher, largely because the deferred tax benefit is not taken in, in Foskor. Hence, you know, that is taking this tax rate higher. I feel that the broadly, the overall company's tax rate should be in the range of 28%-30%. You know, that should be the broad level we should look at it. Understood. Thank you very much for answering my questions, and all the best. Thank you. Thank you. Thank you. The next question is from the line of Bhoomika Nair from DAM Capital. Please go ahead. Yeah. Good morning, sir. Yes, Bhumika. Yes, sir. So you highlighted, you know, new areas such as HPSIC, defense and aerospace, SOFC, electronic ceramics, et cetera. While I understand we might not be able to outline a revenue guidance kind of a number, but can you talk a little bit about what is the addressable TAM out here, how this market is growing, and who are the players that are there, what is the competition like, as such in this market? So if you can just talk a little more in terms of the TAM, which will help us to kind of at least understand where we could possibly grow to. So I think, I talked about, you know, at least four different things. Mm. I think, as far as the semiconductor and aerospace and defense, we should start seeing the benefit flowing in, in a year's time. As far as the electronic, ceramic business is concerned, we need to put up some capacities. My guess is that in an 18 months to 24 months, it should start happening. HPSIC, as I said, we should start seeing this benefit in FY 2026 onwards, we should start seeing this. That's the broad timeline I can talk. No, sir, I was basically trying to understand the market size and how large is this, and what is it growing at over more like a two-three-year timeframe? Right. When it scales up, how large can this possibly get, you know, from that perspective? Absolutely. So we will, we will share this, Bhoomika, I think at, an appropriate time. Once these are in place, I think, we feel these are quite, an interesting size that we are looking at and interesting opportunity for us. This is part of our long-term strategy program, and, so definitely we will share as we mature into this. Sure. So the second question is in terms of the Ceramics segment, which has, the Engineered Ceramics is, you know, impacted the performance over the last few quarters. Mm. Since, you know, we are kind of recovering and, you know, you think this is kind of coming to a bottom, you know, where do we see the growth really playing out and, you know, how do margins come back to 26% plus kind of levels out here? I think that is already factored into the overall guidance that when I talked about, we considered, the specific Engineered Ceramics mix getting changed- Mm. This is part of our margin guidance that I talked about, overall ceramics. I think give us three more quarters, you should see that end of the year, we will be similar to the guidance that we have given, and it will start stabilizing that. I think that is what I would share. And that also the customer with whom we are working is also showing us, you know, the signs of their order intakes and other things are getting better. We will get better, is what our current discussion tells us. So we should get back to the broad guidance that we shared, you know, in the last quarter, which I repeated now. End of this year, we should see this one happening. So the blips in, in this quarter, et cetera, please don't skip this. I mean, it is a reality, but I think we will get back. Okay. Sure. So the last thing is on Rhodius and AWUKO. You know, we're seeing a turnaround, we're seeing improvement. You know, when do we start seeing improvement in terms of the, you know, margins actually moving towards, you know, high single digit levels? How is the... And if you can also comment about the demand, while obviously we're working on a lot of cost efficiencies, which is driving the improvement in margins, but if you can also touch upon the demand aspect in the European markets where they cater to. So, I think, we shared that, there is a quarter-over-quarter of roughly about 12% growth, in Rhodius and 20% in AWUKO. Predominantly, growth is coming from the volume side of it. So we see that, the demands are slightly better, and the effort that we are putting is also getting better, so it is a combination of both. The margin getting better, right now, is a lot of the efficiency factor, as you rightly pointed it out. When we guided, I think couple of quarters back, we talked about, you know, EBIT margin, in Rhodius, et cetera, getting better, would take about 3-4 years. This is what we said that, and we are still maintaining that stance, and I think they would get back to the earlier levels of margins that they were delivering. I mean, we need to back off the PPA, because that's an internal one, and it will drop off after three years. So I feel that they should get back to their normal level of margin by then. So that's what I feel. Sure, sir. Thank you so much. All the best. Thank you. Thank you. Thank you. Hello? Hello? No, no, it's not on. Hello? No, the instrument is on, but I'm not sure whether we should turn it off, because otherwise there's some issue. Let me check. The next question is on the line of Mohit Pandey. Please go ahead. Yeah, good morning, sir. Thank you for the opportunity. I hope I'm audible. Yes, Mohit. There was some gap in between, but we, we are now able to listen, yes. Sure, sir. The first question is on Electrominerals. So, sir, when we are maintaining the full year guidance for revenue, so if you could elaborate on what are the assumptions on the price hike and volume there for Electrominerals for the balance year? Mohit, I think we did talk about this last time also. We are not sharing this in specific about price and volume. This is overall, total percentage is what we are gaining. It's a combination of one, the standalone growth, Foskor growth, compared to the last year, because for one quarter, they had a sorry, Q2 and Q3 of last year, they had an impact, which I think they would come back, which is consistently then they are doing thousand times plus, including this quarter. So combination of all that is what we gated as an overall growth rate for the Electro Minerals, which we, we are reiterating that we'll be maintaining that. Okay. Sure, sir. Sir, secondly, so I think you indicated that some of the pricing pressures are easing in Electro Minerals. So, wanted to understand what, if any, kind of impact that has for the abrasives margins, since that was the raw material there. So, we feel that we should pass on this price increases back to the market, but there could be some timing difference arising out of that. So that, I think we should be able to manage it, is what our current feeling is. Okay, sir. So thirdly, on the different ceramics for the armored vehicles. So if you could elaborate if our offerings are substituting some of the existing ceramics that are being used, or these are completely new innovative offerings, so that would be very helpful. Yes. So this is for two different types. One is body armor and then the vehicle. These are the two areas that our focus is on. Currently, these are imported into India. This will be import substitution programs. Understood, sir. Sir, okay, sir, and is there any benefit you're deriving from the import substitution list that the government puts out on the defense side from time to time, or that this is not a part of those lists? There's no benefit that we are working with any government program. Okay. But our, our existing competitiveness and capability is getting recognized because the government of India took a call that they will not do import of products, and they will be self-reliant. That gives us Atmanirbhar Bharat, gives us this boost. Understood, sir. Sir, last question. I think you explained this, but I could not get this. On the other income, why is there such a fall? I could not understand earlier. Yes. So I think we explained to you earlier, is that last year, that is Q1 FY 2024, our Russian business will restate their receivables in dollar and euro terms based on what they closed as 31st March 2023. And the exchange difference then versus now is what is causing this problem. I will repeat what I said. In March 2023, 1 USD was equivalent to 77.98 RUB, and in June 2023 it became 89.29 RUB, so this resulted in a gain. Now, the same two period, if you have to compare it in 2024, that is March 2024, it was 1 USD is equal to 92.59 RUB, but it went down to 85.75 RUB in June 2024, and that is what is the swing that has caused. I mean, this is a difference you are seeing it in other income as well. Okay, sir. Okay, so it will possibly have some impact in the coming quarters also, because of the exchange variation on the other income? When I looked at some four years of number, that FY 2023 was an exceptional year. And to go through this, it will take eight quarters, which probably we are in the last leg of that quarter, and I hope next year, next quarter onwards, it should not have this kind of a wide swing. Okay, sir. Okay, sir, and very last question: so how big would our R&D team be now, because we're doing so many initiatives? If it is possible to share that? I think it was... I think we did share this in our annual report. Offhand, I don't remember. I will check that. 50, 50+ employees on that, but I think in the next call, I will definitely share this in this. Thank you so much. Thank you, and wish you all the best. Thank you. Thank you. Thank you. you. The next question is from the line of Aditya Mongia from Kotak Securities Limited. Please go ahead. Well, hello, everyone. So a few questions from my side. Firstly, on the Abrasives part, if I focus on the standalone business, there's broadly been close to 10%-11% growth over the last two years in Q1. Could you kind of and we do understand that you're gaining back share on this- Sorry, Aditya, could you repeat that question, please? Sorry, I missed your point. Sure. Absolutely. Sure. So the question is, on the demand environment in the Abrasives segment on the standalone side. Yeah. There's been about 10%-11% growth on a two-year basis in this segment. Right. We do understand that certain strategies are starting to play out. But at a very market level, it appears to be that the demand isn't as robust. Could you give us some more sense of what is driving the numbers for you and potentially the market down? So, I think, honestly, I think, the market is growing well, is our reading, because of many factors. The kind of infrastructure investment that, you know, it goes through. Second is the kind of, you know, the spend that happens on, building construction, you know, residential and commercial complexes, bridges, roads, all these leads to, you know, a lot of, abrasive need. The second driver is the industrial need as well. You know, that is also, you know, requiring a lot of the abrasive need. So when we feel that, you know, these combined, all these factors, I think, with the industrial activity growing in India, coupled with the future investment that the programs that the Government of India is projecting and the GDP growth, at least 7%+, is being looked at, obviously the market size, being large, our own assessment is about INR 10,000 crore+ is the market size, should grow, quite reasonably well. So hence, we feel that this is what we are looking at. Understood. The second question that I had was that you talked about the pricing pressure from the Chinese, from an import perspective, I think on the electrominerals side, and the fact that won't last for very long. Is that based on early signs that you are seeing, or let's say, are you kind of lobbying with the government for having some kind of duty to import? What gives you that confidence, is what I'm trying to engage over here. Lobbying with the government is we are continuing, we are continuing that process. But I think what we are seeing the reality is that in some products, I, I'm not an expert on China, don't hold me for that, but I think we see that, you know, the prices they are putting up at this point in time. We don't know what exactly is the reason for that, because probably they have already bottomed out. The way they have put up the price down in the past might be hurting them, could be hurting the cash flows. All that could happen, and hence, there could be a reversal on that. This is what we think. Understood. These are the last few questions from my side. Firstly, on Foskor, profit last quarter and then a loss. I think, is it something just volatility not concerning, or how do you think through the situation over there? Absolutely. Volatility concerns us. I mean, this is a great concern for us. One is. See, what I am looking at positively is that they are able to deliver 1,000 tons. That's, that's number one. Mm. And number two is, what caused them this time, this problem is, the first factor is that they could not buy raw material because their working capital facility was not there, which is probably is a self-inflicted wound, and they have to re-sell some of the work in progress, and that cost them, you know, significant sum of money, which is probably shouldn't have happened. I mean, that's something I feel it is not the right thing to do. The second factor is, I think, is the price fall. The price fall is a combination of mix between Z450 and Z3 product. Mm. We feel that the Z450 should pick up, which is, which is our sweet spot, and I think it should happen. So yes, to answer your question, I feel that, you know, it really the, the fluctuation really hurts us, but we are confident that they would get back. Sure. Last question from my side. Maybe this emanates from a discussion that, at least, at least I had with you maybe more than a year back. What would be the key capability gaps, in your portfolio? If anywhere in you would want to focus a lot more, like we've seen Awuko, we've seen Rhodius. But if you were to be thinking through from a 3-5-year perspective, are there meaningful capability gaps, and can we kind of organically do something about it, or would we have to rely on inorganic measures, to move forward? And that will be my last question. Yeah. I think, I'll just combine this with the earlier question Mohit asked. I'll, I'll respond to that as well. The total R&D headcount is about 103 technical professionals, 26 PhDs we have at this point in time. And we have collectively filed 156 patents and 403 papers as this R&D team. But I think we need to do quite a lot. So we are taking a relook at the R&D support and augmenting the R&D at all the four divisions, which I think is a current program that I am keenly looking at, is to revamp this and support, you know, how do we invest more in that? and that could be a combination of many things, augmenting here, tying up, centers abroad, making sure that we even, be willing to work outside of, you know, India, work on this, are some of the areas would help us to augment and supplement the current capability that we have. And, that would probably help us, in the long run. We are currently working on a long-term strategy going up to 2030. Clearly, this is one area where we need to invest in. We are working on that. In next three months, we will have a program of, you know, what are all the things that we need to do, like, you know, how should we revamp our structure in, abrasives, ceramics, in the electrominerals side? You know, all that is part of that, perhaps, also answers your question. That does. Thank you for the color. All the very best. Those are my questions. Steve, if you could check, if there are no more questions, we can bring this conference to a close. Yes, sir, there are no more questions for today. I would like to hand the conference over to the management for their closing comments. So thank you. I think, as I said, Q1, you know, we have, similar to the last year, both in top line and bottom line. Cash flows are good, balance sheet is good. Programs, whatever we started working on, we are well on trajectory. Happy to note that the abrasives domestic, you know, growth as well as margins are decent and starts paying off. I feel that, the overall guidance that we talked about for the full year still we hold. Give us a couple of quarters more to see, and then you will start seeing this. ceramics as a whole, I think the second half will be better. So by and large, I feel that, this is a year where broadly we'll be in line with what we are looking at. Of course, when we meet next quarter, we will share more. Thank you, and thanks a lot for all your support. Bye. On behalf of Kotak Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.