Ladies and gentlemen, good day, and welcome to Deepak Nitrite Limited Q3 FY 2022 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal the 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. Nishid Solanki from CDR. Thank you, and over to you, sir. Thank you. Good afternoon, everyone, and thank you for joining us on Deepak Nitrite's Q3 and nine-month FY 2022 earnings conference call. We have with us today Mr. Maulik Mehta, Executive Director and CEO, Mr. Sanjay Upadhyay, the Director of Finance and CFO, and Mr. Somshekhar Nanda, Deputy CFO. We will begin the call with opening remarks from the management team, followed by an interactive question and answer session. At the outset, I would like to clarify that certain statements made or discussed on the conference call today may be forward-looking in nature, and a disclaimer to this effect has been included in the results presentation shared with you earlier. To begin, Mr. Maulik Mehta will share his views on the operating performance and growth plans of the company, followed by Mr. Sanjay Upadhyay, who shall take us through the financial and segmental performance. The results document has been shared with you earlier and have also been posted on the company's website and stock exchange. I will now invite Mr. Mehta to share his opening comments. Thank you, and over to you, sir. Good afternoon, everyone, and a warm welcome to you on Deepak Nitrite's Q3 and nine-month FY 2022 earnings conference call. I hope everybody is safe, and I hope that everybody is taking due precautions, whether they're working from home or from their offices or in transit. I trust you've had the opportunity to go through our results documents that were shared earlier. I will begin by taking you through the key financial and operational highlights for the period ended December 31 and the key development and strategic approach for the year. Mr. Upadhyay will then present you with financial overview during the period in review. Following that, happy to answer any questions in the open forum. We're currently witnessing the third wave of the pandemic in India, but fortunately, the human impact of the same has not been as severe as the previous waves, especially in terms of fatalities and casualties. Additionally, we continue to take precaution at our facilities and offices to ensure safety and well-being of all of our employees and contract workers. Some of the issues that plagued the second quarter have had some amount of lingering effect in the third quarter as well, especially issues like soaring raw material costs, logistics and supply chain challenges, high costs of fuels like gas, like, furnace oil especially, also coal. However, we see strong demand coming up across segments. Despite the challenging backdrop, the company achieved its highest ever quarterly top-line performance, both on a standalone and on a consolidated basis. Notwithstanding the tumultuous input material condition, particularly with regards to higher raw material costs and spiking utility costs and availability of key raw materials, the company efficiently executed its operating schedule and fulfilled a large part of its supply commitment to ensure reliable and stable supplies to key customers. Deepak Nitrite has been able to pass on hikes in raw material prices to consumers wherever strategically feasible. Overall, we anticipate the demand to continue to stay robust, given that several industries are getting back to pre-COVID production levels, and fundamentally, there is a shift in supply chain to countries including India. Deepak Nitrite's wallet share amongst all customers, strategic and non-strategic, remains robust and on a growing trend. Demonstrating the resilience in our business model, in nine months, our revenue increased by 71% to almost INR 5,000 crores, while PAT grew by 65% to almost INR 800 crores, all on a year-over-year basis. In Q3 FY 2022, on a year-over-year basis, revenues grew by 41% at INR 1,748 crores and PAT expanded by 12% to INR 242 crores. EBITDA in Q3 improved by 11% to INR 378 crores, despite the impact of temporary disruptions, as I mentioned before. By leveraging our experience and competencies in chemicals value chain, we have demonstrated nimbleness to grow without compromising on quality or safety. Our success is a result of our strategy to grow revenues in a balanced manner by diversifying across products, end user segments, customers, and countries. Moving on to performance of strategic business units. Basic intermediates profited from healthy realization gains at price hikes that were undertaken for key products given higher input costs. In nine months, volumes grew by 10%, partially because of brownfield expansions that we were able to achieve. We achieved positive outcomes in this segment despite the temporary disruption. Despite the challenging macroeconomic situation, the company continues to maintain its delivery commitments. Additionally, we expect the BI segment's performance to remain strong in the ensuing period as a result of sustained shift in the global supply chain as well as domestic trends. Fine and Specialty Chemicals performance must be evaluated in view of major logistical constraints. Along with this, the company witnessed higher input costs and in a couple of cases, unavailability at a particular time, because of which delivery schedules got shifted. Due to the nature of contracts, the prices are not always instantly passed on, but with some timeline. The future performance will be driven by our ability to pass on cost increases to our customers, combined with our strong demand trajectory. Performance product segment stands to benefit from demand supply asymmetries. The acceleration in the key intermediate demand is noticeable, leading to an increased realization gain, and OBAs were able to pass on this price increase. Along with this, our integrated approach of having the raw material also internally produced has allowed us to take significant increase in market share, which we hope to remain sustainable. Top line and margins are mirroring this trend, with volume increase standing at a robust 44%. The momentum is expected to continue in the near future as well. DNL is well-placed to capture incremental gains from major sectors such as textiles, papers, and detergent, all of which have in some way or form resumed production at close to pre-COVID levels. Phenolics has demonstrated encouraging results as well, with an average capacity utilization of 117%, attributable to strong demand in India and other key export markets. EBITDA enhanced by 85% to INR 771 crore in the last nine months. I'd like to share one key development here. As you know, we had announced our brownfield expansion of IPA. Glad to share that this has been successfully completed as on December 19, 2021. As a result, our new nameplate capacity for IPA has doubled to 60,000 tons a year. In another key development, EcoVadis, the world's largest and most trusted provider of business sustainability ratings, has bestowed the Silver rating onto Deepak Nitrite with a sustainability ranking of 83 percentile. This has increased from 39 percentile just a year earlier, reaffirming the group's stride towards greater sustainability. To conclude, I'd like to highlight that Deepak Nitrite is well-positioned for growth across a range of initiatives, and our plans for the future are equally exciting. We focus on creating a significant Indian chemical conglomerate with strength in a spectrum of chemistries and the ability to provide clients with customized solutions. All the while, we stay committed to our mission of large scale import substitution to meet global demand and grow our market share. This will strengthen our competitiveness and equip us to enhance market share, resulting in value creation for all our stakeholders, as opined by our Depend on Deepak initiative. Thank you. I'd like to now hand over the call to our CFO, Mr. Sanjay Upadhyay, and take you through the financial performance during the period in review. Thank you, Maulik. Good afternoon, everyone, and thank you for joining us today on this call. I'll walk you through the highlights of the financial results for the quarter and nine months ended December 31, 2021. DNL reported encouraging performance during the period under review despite the ongoing macro challenges. Solid improvement demonstrated in the phenolics business and BI and PP segments also. DNL continued a strong revenue growth during the quarter. It's one of the best. This is attributable to increase in demand and realization of key products. In fact, volatility in the prices of commodities certainly impacted, but we were able to pass on to the customers to a large extent. In the nine months FY 2022, on a consolidated basis, revenues are up by 71% at INR 4,969 crores compared to INR 2,912 crores in nine months FY 2021. EBITDA stood at INR 1,232 crores in nine months FY 2022 compared to INR 800 crores in nine months FY 2021, higher by 53%. PAT expanded by 65% to INR 799 crores. DNL achieved highest year profitability, thanks to favorable contributions from BI, PP, and phenolics SBUs. In Q3 FY 2022, on a consolidated basis, revenues grew by 41% at INR 1,748 crores as compared to INR 240 crores in Q3 FY 2021. On a year-on-year basis, EBITDA grew by 11% to INR 378 crores and INR 340 crores in Q3 FY 2021. Despite the overall increase in input and utility costs, the company's EBITDA growth was strong on an absolute basis. PAT grew by 12% to INR 242 crore. PAT performance remained stable, aided partly by significant reduction in the finance expenses due to the repayment of debt. Moving to our segmental performance. Basic Intermediates reported revenues of INR 862 crore in nine months FY 2022, up 67% from INR 515 crore in nine months FY 2021. EBIT increased by 74% to INR 216 crore with an EBIT margin of 25.1% in nine months FY 2022. The volumes have also improved by 10% in BI segment. Fine and Speciality Chemicals segment revenue increased by 9% to INR 611 crore in nine months FY 2022 as compared to INR 561 crore in nine months FY 2021. EBIT stood at INR 181 crores with EBIT margin of 29.6%. Volumes has been improved by 20% in this segment. PT segment reported revenue growth of 69% to INR 368 crores in nine months FY 2022 versus INR 218 crores in nine months FY 2021. EBIT expanded to INR 59 crores with an EBIT margin of 16%. Volume has been improved by 40%. Phenolics reported a solid performance of revenue expanding by 95% to INR 3,169 crores in the nine months FY 2022. EBIT came at INR 691 crores, higher by 89%, translating to EBIT margin of 21.8%. Volume has been increased by 23%. Lastly, on the balance sheet front, the company's financial position has significantly improved and cash flows are being leveraged to gradually invest into growth projects. Also on releasing debts too. The company prepaid INR 100 crore of project loans during the quarter without any prepayment penalty. With that, I will now request the moderator to open the floor for question and answer session, please. Thank you. Ladies and gentlemen, we will now begin with the question and answer session. Anyone wishing to ask a question may please press star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Nirav Jimudia from Anvil Research. Please go ahead. Good afternoon, sir. Yeah, good afternoon, Nirav. Good afternoon. Sir, I had one question. I want to understand more on the chemistry part. How do we select a particular chemistry? Is it like we are already into some group of products and probably this new chemistry which we have selected helps us in process intensification? A related question to this is when we identify a new chain of products, probably with the newer chemistry, what is the normal size of opportunity we normally evaluate? Okay, I can try to answer this. So first of all, what we do is when we look at adding another chemistry, essentially, let me give you an example. If you know we have announced, you know, recently that we would get into, you know, some level of fluorination and photochlorination. The way that we look at this is we said, okay, our goal is not to target to replace somebody who is in the market, but if there are products where, you know, there are five steps, six steps in order to make the final product. Out of those, say there are four or five steps where we are already in them, like, you know, nitration is something that we are very comfortable with. Reduction via hydrogenation is something we're comfortable with. Diazotization is something that we're comfortable with. Now, there are products which require maybe fluorination as one step, which until now we had not taken up because we didn't have that expertise. We had the other three, and we were fine managing product portfolios which required only those. Today, we are comfortable saying, okay, let's take even the products which require many of the ones that we have, as well as a fluorination or as well as a photochlorination, which is at the end of the day just one particular kind of chlorination with advanced chemicals. Yeah. This is how we have gone about choosing a new product. The second reason that we take while deciding a product is this a process which while we are missing on it right now and we add it, is this a process where it is going to be the significant bulk of the value generation? Is fluorination going to be by far and away the most critical step? If that is so, then we deprioritize it a little bit. If there is an opportunity for us to do it, where fluorination is one of the key steps, but not the step where the significant value is. It could be on nitration, on by-product management of nitration, doing it in a safe manner, ensuring that, you know, the reduction, hydrogenation, distillation, these things are done efficiently. We take it up because we say that fluorination is then just one of the missing pieces, but it is not the most critical piece in the cost structure. Over a period of time, we are confident that we will build as much of a competency on fluorination as we have in others. At that time, we will be fine picking up products where fluorination may be probably the most major component. Today, we will take it in a tentative, calculated manner, add it, and continuing to focus on our other key competencies. Over a period of time, fluorination will also become one of those. At that time, we will again reevaluate what else we can add to the basket. Correct. Sir, if we I hope I've answered your second question as well. This is over and above, Nirav, whatever Maulik said in the chemistry part, but this has to meet our basic parameters on financial terms also. Yes. Rightly said. Because otherwise, whatever chemistry or whatever integration we have, but if it is not making sense, if there is a strong competition, if the pay back period is not within our norms or the growth is not as per the projects, whatever. We will certainly not go ahead with those kind of projects, though we may have strength and though there is a synergy. It depends, you know. One is the chemistry part of it. Yes, we love chemistry. We love our R&D and those things. But commercial sense it must make. Right to win, as Maulik rightly mentioned, has to be there. Otherwise, no point in going ahead with any of the projects. Like Maulik explained about nitrite, but I can tell you about phenolics also, that phenolics may be Whatever we are doing, you know, if a specialty company has a bulk chemical and then it adds a final chemical, a final specialty chemical to the bulk, and it is a forward integration. This is the logic which we are following, meeting all these criteria. Okay? We will go ahead with those projects. Otherwise, no. Correct. Sir, like, since once we decide on a particular chemistry to be a critical part of the value chain of products along with the other chemistries, and let's say that product is probably an import substitution product, so at that point of time, do we assess that it probably, let's say the size of opportunity is INR 1,000 crores and beyond which we doesn't want to foray into it. Is there any critical benchmarks, which The critical benchmark essentially is. I mean, there are various benchmarks, as Mr. Sanjay Upadhyay mentioned. Financial benchmark is one. Yes. With regards to volume, size, and things like that, our priority is not so much with regards to size, although we expect a minimum size. It is also more with regards to the demand CAGR, the growth that we're expecting. Most of the products that we look at getting into, we are seeing that there is a strong possibility towards a low to mid-double digit, low to mid-teen as a year-on-year growth CAGR. This means that even companies which are already, you know, focused on exporting to India from abroad, there will always be a, you know, much higher amount of volume demand over the next three years, four years, than there is today. Okay. If you compound it, that creates a significant opportunity. Opportunity. Correct. Sir, last and second question would be, sir, in your last investor call you mentioned that we have got one order win from a customer which was supposed to start scheduling or getting commissioning from April 2022. Does this new product which we are going to cater is with respect to inculcating these new chemistries which we want to get into? Or probably the, it is related to the older chemistries and new chemistries would take part in a later part of our growth CapEx. Correct. This is on the basis of existing chemistries. However, you know, the new chemistries that we have spoken about will be added on a commercializable basis later on in the financial year. Okay. Thank you. Maybe by fourth quarter, third to fourth quarter of next year. Yeah. Thank you, sir. Thank you for answering the questions in detail. Thank you. All the very best. Thank you very much. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in this conference, we request you to limit your questions to two per participant only. The next question is on the line of Chintan Modi from Haitong Securities. Please go ahead. Yeah, hi, sir. Thank you for the opportunity. I wanted your views on two things. One is at a global level, what kind of capacities are likely to get added in phenol, say, in 2022 and 2023, and which regions are likely to contribute this to largely? Second is with the benzene production globally, do you see there could be some shortage of, I mean, some restrictions on the benzene production over, say, next three-five years, because of various reasons? Like, I believe some of the capacity is also driven through coal. Could there be a, I mean, you know, shortage in the capacity and likely increase in the prices of benzene over a period of time? We don't see any expectation of shortage of benzene because there is also new capacity that is coming online during the year. In the meanwhile, with regards to phenol and acetone, what we do is over a period of time, which is, you know, you gave a very short period of time of, you know, just 2022 and 2023. We start 2023 just in, you know, in a short bit. Point is that at this short period of time, we look at incremental debottlenecking wherever possible by intensifying the existing assets. This will be modest, frankly speaking, but we're confident that, you know, a decent amount is going to be if you're talking about our phenol production. With regards to No, I'm talking about global capacity. India also, worldwide also. No. Global capacity, yes, there are capacities coming up in China. It will be majority of this will be for the captive, you know. In any case, we always believe that phenol is a regional play. When we started also this situation was there, even today also, the situation. I mean, even if something comes, we are not too much worried. Yes, it is coming up in China, but it will be for captive purpose in China. It will be integrated with downstreams. Downstream. Okay. Right. This is something that always happens. I mean, phenol and acetone being a commodity play is normally also considered while integrating it upwards or downwards. Got it. Is this capacity a significant one in, on their existing capacity? I believe China has about 3.3 million tons of capacity currently. China's capacity is so large, and generally speaking, it is domestically consumed that. For example, I'll tell you that China is the world's largest producer of chlor-alkali, caustic soda and chlorine. But it really doesn't matter on the global scale because it is also the largest consumer of chlor-alkali. Similarly, you have phenol and, you know, products like, you know, this, Bisphenol A and things like that. The domestic consumption and the domestic production are both some of the world's largest, if not the largest. Okay. Got it, sir. Thank you, sir. This was very helpful. Sure. Thank you. The next question is from the line of Kumar Saumya from Ambit Capital. Please go ahead. Hello, sir. Good evening. Firstly, my question is. Hi, good evening. Firstly on the Fine Specialty side, Sanjay Sir mentioned that the volume growth in nine months was 20%. Am I right? Sorry, can't hear you very clearly. Sir, Sanjay sir mentioned that the Fine and Specialty nine-month volume growth was around 20%. Am I right or I missed something? Yeah, yeah. Fine and Specialty volume growth for nine months. It has gone up by 20%. 20%, huh? Okay. Yes. Sir, lastly, on the phenol side. Phenol gross margin compression we are seeing in this quarter, so if you could just highlight on this, what are the finer aspects of that? Because, you know, spreads were largely in line with the first quarter, and but the utilization was better and still we are seeing some gross margin compression. No, no. Actually, see phenol margins, both spreads you are seeing and what spreads are actual, there's a big difference, you know. It's a annual compression. If you, even if you see phenol at this level, the capacities and utilization is high, the turnover is high. It's only a question of margin cannot remain at a level which was 30-31%. You know, it has to somewhere settle down. I, we believe this is settling down the margin. Maybe there will be ups and downs, but yes, I mean, there cannot be continuously high margin of 30% in phenol. It, that is not the commodity. I would have said in fine and specialty one part on this which I can give you a range, but phenol is not that. Phenol has a range of- Hello? Hello. Am I audible? Yes, sir. Yeah. Can I just add one point to what Mr. Upadhyay said? That while we are looking at spreads, the other missing component in that is energy cost. Now, phenol, as a, you know, as a starting block intermediate, it has a, you know, reasonably strong component there, which is also the, power cost. Power cost, energy cost, steam cost essentially. Right? In Q3 we saw prices of key utilities go through the roof. Coal prices have doubled, quadrupled in some case, at some period of time. Even over and above that, there was an issue with regards to, availability of the right kinds of coal. Whatever happens is raw material only, you know, take a certain amount of the, what you're looking at as a spread. The aspect there that you're not able to consider in spread is the power cost, and these were formidable. Yes, sir. I was more on the gross margin side. These will affect the gross margin, right? Because the gross margin includes utility overheads. Okay. No, Maulik is considering only on material side, I believe, not the- Yeah. Sanjay sir, it will settle down around 29%. Is that fair assumption? What%? It should settle down at 29% considering the last quarter prices, if the prices are at this level. Could we expect a steady state of 29%? 29% in phenol? Gross margins. I would rather go with an EBITDA percentage of say between 20%-23%. Okay. Okay, got it. Thank you. Okay. Thank you. The next question is from the line of Madhav Marda from FIL. Please go ahead. Yeah. Hi, sir. Good evening, and thanks for your time. My question was similar to a question that was asked earlier. If I look at the global capacity addition for phenol, and I hope I have the right data, you know, like you rightly said, China is expected to add, I think, something like 3.2 million tons of capacity in 2023 and 2024. While I understand you said that China uses a lot of that for its own captive use, because phenol is like a global traded price, can that impact global prices of phenol as these capacities come through? Are my capacity numbers broadly right that China's adding about 3 million tons in the next, in 2023 and 2024 calendar year? No, frankly, it's a very nuanced question that you're asking and difficult to answer. See, at the end of the day, what will always matter is the speed at which phenol comes up, the speed at which the key raw materials come up, and the speed at which the downstream for phenol come up, right? When you will see you know unusually high or low margins is when there is a mismatch between the phenol capacity coming in and the downstream or the upstream capacity coming in. This will happen for a period of time, and then it normalizes again. I don't think that you know if you look at it on an annualized basis, you should not be so concerned. Because generally speaking, as Mr. Upadhyay said, phenol is a regional play. If you look over the last 10 years, you will see that Chinese phenol has really not had a significant impact on the Indian consumption. Even though Deepak came in with its plant only a couple of years ago, it has never really been a big player here. Even though it is a neighbor, and it is the largest capacity worldwide. Okay. In this scenario, prices effectively are like kind of de-linked to Chinese prices, not very integrated. No, no. There's nothing. I mean, of course, you know, this is what, you know, I always say that when China sneezes, the world catches a cold. I would not look at it in that worrisome a manner because there's also a lot of downstream production that is coming in. Generally speaking, we expect that phenol and acetone will remain a strong, you know, driver for our profitability moving forward as well. What is more important is that the domestic demand that was there when there was less worry about COVID, hopefully that returns to that form. It's not that it was weak, but we hope that it also continues to build itself. We are also very keenly looking at the results of, you know, auto companies and things like that. Understood. Okay. Thanks so much for that. Thank you. Thank you. We'll move on to the next question. That is on the line of Deepak Saha from Savart. Please go ahead. Hi, thank you for taking my question. My question, first question is regarding the basic intermediate segment. For the nine-month basis it recorded kind of 67% growth in the revenue front. When you look at the volume growth during the same period, it was around 10%. Broadly, the revenue growth is largely on account of the price hikes that we have undertaken in the recent months. There's also some raw material challenges on the supply front. Once this supply side challenge is on the raw material front normalizes, is it a right understanding that we would see volume growth also pick up from the current levels and it would also expand the margins from the current levels? Which is kind of, I think at a complex level because of the higher raw material prices that is prevailing in the market. This is the first question. Okay. Thank you for compressing a long question in a short period of time. What I can tell you is, yes, we had underutilized capacity both in basic intermediates and in specialty chemicals, despite having a very strong order book. There was, you know, at critical times, there was unavailability of important raw materials because suppliers raised force majeure. Therefore, I can also agree that, yes, as long as, you know, volumes of raw materials availability is streamlined, even if there is some modicum of price volatility in the cost of raw materials, we are able to pass it on. The demand remains strong, so does the customer confidence on Deepak. If we are able to see a streamlining of volumes of raw materials, you will certainly see that there is a higher utilization. You're absolutely right in pointing out that the revenue growth was only partially linked to volume growth, and the rest of it was where we were successful in passing on price increases. We expect that, you know, as soon as the raw material situation is stabilized, we should be able to more confidently supply to the customer need. Okay, thank you. My second question is regarding the FSC segment. During the last quarterly con call, we kind of alluded to the fact that going ahead, the underlying contracts and the new contracts that we'd be tying up with would have quarterly pass-through mechanism in order to mitigate the, again, the margin pressures or so that we can also pass on the price hikes that are taking place in the industry. So, is there any, like material development as far as passing through mechanism incorporation is concerned in the contracts or the new contracts that we are going ahead with? See, by and large, what we have is a quarterly pass-through, because what's more important for the customer is, we have to make sure that their confidence is in ensuring that the supply chain, the pipeline is filled up, right? They depend on companies like Deepak because they know that we're healthy, we're robust, we know what we are doing, and we will work to tie up our raw materials so that they will not be affected. They are not averse to passing on cost increases. Let's be very clear. What they are averse to doing is wasting a lot of time nitpicking about, you know, month-on-month price increase and decrease, because they would prefer to focus on growing their end products, which is where we want them to focus as well. Now, in all of this, if there is an absurd amount of raw material price increase, then, you know, we do try to have those conversations, but that is left at the end of the day to the customer. However, what bothers everybody, including Deepak, is when there is unavailability of raw material. I would say at the end of the day that, yes, you know, we have faced a margin compression because of the aforementioned reasons, but the demand is strong, the confidence of our customers on Deepak is strong, and we continue to be bullish about being able to grow market share with pretty much all of our strategic customers. We will be signing more such contracts, which will be essentially medium to long-term, meaning multi-year contracts for our key customers. Thank you. Just one last question, Maulik, if I can pitch in. The FSC segment, year-over-year basis when you look at the revenue numbers, it has recorded a slight decline. I believe it is because of the logistical challenges that are prevailing in the industry, right? Largely there is no issue on the demand front. No issue on the demand front. Of course, logistics does play a role, but now it has become high for such a long time that it has almost become normal at this height. What you saw as the revenue compression is actually also a volume compression. While Mr. Upadhyay's point was right that, you know, we have seen a volume growth compared to the previous year, we also have to keep in mind that the previous year volume itself was lower because of our nationwide lockdown. Also because after the lockdown, there was an insistence from various states and central government that we restrict manpower to 25% or less. At 25% or less, the priority is not on production, it will always be on safety. Keeping those things in mind, we prioritized higher margin products last year, whereas now we have been able to broad base our volume, which was even then affected by raw material availability and to a certain extent, freight availability. Thanks. Thanks, Maulik, for answering all the questions in such detailed manner. Thank you. Appreciate it. All the best for the upcoming quarter. Thank you. Thank you. The next question is from the line of Rohit Nagraj from Emkay Global. Please go ahead. Thanks for the opportunity, sir, and good afternoon. First question is on phenol. Post our commissioning of the downstream products on phenol, how much of phenol will be captively utilized? I understand that at 120% utilization currently we are producing something like 240,000. Out of that, how much will be utilized captively and how much will be for external use? Thank you. To answer your question, these projects, whatever we have announced, in total we want to consume 35%. Abhi, currently what projects we have, it will not consume that high, but there are plans in pipeline, and ultimately we will consume around maybe it is more than 45%, 50% phenol in captive. Today, if you say it will be around 20%-25%. All right, sir. Got it. The second question is your performance products has done DASDA and OBA has done extremely well during Q3. Going into Q4, are we seeing any kind of margins or prices getting contracted or we are seeing the same kind of momentum continuing in Q4? Thank you. It will continue in Q4. See, for the last couple of quarters we have been giving a guidance that volumes have started to recover and we believe that prices will also follow maybe a quarter or so later. We have started seeing that. Today there is a reason, I mean, there's a good robust demand in all the three segments as compared to previous quarters. However, in Q3 there was a slowdown in the demand for textiles because of various reasons that are all well known, things like GST, you know, things like in Gujarat, there was an issue with the local pollution control board and the industry bodies there and things like that. These have all by and large been addressed to some way or another in December, so we have to see how things shape up. However, if I'm comparing to the last few quarters where demand was depressed to a large extent, it has substantially improved from there. What is more, over and above that, I think, you know, customers have, you know, had a significant preference for Deepak because of its integrated approach. This is something that we see more in performance products because, most other, if not all other manufacturers are not as integrated and therefore customers have seen wild swings whenever depending on other suppliers, including in availability of product. All right, sir. Got it. Thanks a lot and best of luck. Thank you. Thank you. The next question is from the line of Nitin from Yes Securities. Please go ahead. Hi. Good evening, Maulik. Good evening, Sanjay Sir. Thanks for the opportunity. My first question is regarding the CapEx. How much of CapEx have we incurred in nine months? And also, at the end of the second quarter in the call, we have mentioned that we'll be spending about INR 700 crore in a downstream phenol plant and a little bit more on Dahej expansions. Is there a revision in that plan in light of the QIP approval that we announced in December last year? That's the first question. No. This, whatever we have announced that then or change. QIP, see, we have definite plans. I will not be able to tell you much about the planning because we are under that, what is that you call? We can't ever tell much about the projects in future. Yes, there are definite plans. Once we are through with our all processes and then we'll come up with the. See, today, when these questions are raised, you know, about these margins and things, there are every segment and every product. This is where the confusion all begins because since all the products are integrated, now if you have a higher margin bulk chemical, you will have a lower margin in Fine and Specialty. If nobody notices the improvement in performance products which is significantly high, where it consumes higher this bulk chemical also. This is all ultimately what we are saying, that yes, products are doing well. There could be one quarter here and there, but ultimately if you see now again Q4, you will have a better margin as compared to this. It happens. There are for phenol also there are downstreams definitely planned, as I explained earlier also. Our overall endeavor is to consume phenol captively and acetone. Acetone we have already doubled. There are different plans and that's why this QIP. What the plan is for phenol as well as our plan is for Deepak Nitrite also. We are, I mean, the resolution is for INR 2,000 crore. How much we raise is a different thing, but, the total leverage resolution is for INR 2,000 crore. We have significant cash generated also in the business. With all this, you can see what I mean. The Deepak Nitrite as it stands today will have a strongest balance sheet ever, you know. Then that enables us to do whatever we want, and then it will be fundamentally a very, very strong company which will go up to the next level. Right, sir. Answering pinpointed questions will be difficult today because we are not supposed to dilute so much information. Understood, sir. That's fair, and that's very well answered. Sir, my second question was with respect to the downstream phenol capacity that we have already spoken about. As you had given us a sense around phenol market size and like, you know, how much our capacity would be in terms of like, you know, percentage. Can you give us some sense around the downstream phenol market and like, you know, how the market stands today in terms of size? How much is this import dependence over there? And how much import replacement would our capacity bring in whenever the downstream capacity comes? There is. It's not one product only, no. There are several products. I can't tell you about each and every product. These are all import substitute. That much I can tell you. Okay. There are several products, so it will vary from product to product. It's very difficult to explain to you on this call how it will be. Right, sir. That means then I will come down perhaps and meet you and understand. That makes more sense. Of course. Not now, because this is not the right period to do. Once we are through. Right. With our QIP announcement and I mean, through the processes, then. Sure. Certainly, sir. Lastly, if I may push in one more. You did allude to basically a positive anomaly in the DAZSA prices, which have helped us in the OVA and performance product segment. Is this anomaly similar to what we had seen earlier in this segment? How long do we foresee that this is going to continue? Uh, it cannot be- Just forward looking. Sorry. Let me answer more in depth. It will not be like last time what it was. Mm-hmm. Okay. Yes, it will continue for some time, but not for long. It cannot. Understood. Okay. PP segment per se is doing well. You see the volume growth there. OBA is doing well. OBA is absorbing DASDA increased price and then doing well. There are many positives in all the segments. Understood, sir. Great, sir. Thanks for answering all the questions, sir. All the best to you for the fourth quarter. Thank you. The next financial year. Yeah. Yeah. Thank you. Thank you. A reminder to the participants. We request you to limit your questions to two per participant only. The next question is from the line of Levin Shah from ValueQuest Investment Advisors Private Limited. Please go ahead. Thank you, sir, for the opportunity. Sir, again, my question is on the phenol segment. What we have seen last three quarters when the prices of phenol... Last three or four quarters actually, the prices of phenol have been quite robust, and that is what is visible in our top line as well. Our margins, like you explained, have been slightly volatile. This quarter we have had impact because of the power costs and even the, on the raw material side. Now, going forward with our capacities now operating at like very good utilization levels, how do you see this sequentially, the costs, are they going down and will we see better profitability going forward? See, I won't say major, but one next quarter you will have power plant of course running. That saves the energy cost we were talking. Then for that coal also has to go down. Unfortunately coal is also up. Otherwise that is only going to give you that benefit, you know. That is the straight CapEx which will give the return. Rest all, I mean, it's up to us to utilize our capacities and how we further we can improve on the capacities. Because margin being margin, it's not in our control. In the sense, we are not too much worried about this. Somebody asked about China capacity and somebody that happens, you know. That is a part of in phenol. These are products where capacity will come up. Margins will go up and up, but we will control our production costs. We'll see that our volumes are high and we are able to sell to the maximum. Unfortunately, today there is one more element which has come up, is the freight element. The exporting of phenol is becoming costly. But that is helping us also because the people are not able to import phenol also to that extent. These are all the games which any commodity product will have. Not too much worried about this. I don't think this is a bad margin what we have. It will further go up because with the power plant and this. But the range of the margin, you can't take 29%, 30%, 35%. That'll be too high for a commodity. Okay? It will be remaining, maybe the range should be in the range of 20-23, up to 24 maximum. Right. Understood. Sir, on this also now that we are operating at 115%-120% kind of utilization, and also our downstream products may take some time where we will utilize, let's say 35%-40% of our production. Going forward, the on the revenue side or the, at least the volume side, we may be flat for next few quarters. Is that understanding right? No, that may not be right. There is a scope for further volume growth as well. Yes, yes. I mean, there is always a scope. I mean, who knew that, who thought we can produce up to 115, 117, 130%? Nobody. Sir, my last question is on this Fine and Specialty segment. Like, you have been always just talking about the margins last year that we had were obviously not sustainable. Mm-hmm. That is what we have seen this time around with a different kind of headwinds that we have faced. Now going forward from medium-term perspective, with the kind of pass-through that we are talking about, do we see that margins improving from here? What kind of margins would be sustainable for this segment? See, I have always maintained that the 35%-40% range is a fair range for Fine and Specialty. I still stick to it. This quarter it is low, maybe around 29%-30%. It is certainly that range is doable. You will see a much better again improved Q4. I am not too much worried about. These quarterly gains, no, this in all kinds of products, one cannot have this kind of pakka margin, the 29, 30, 32. No, it's not possible. Because somewhere, some and today the market is so volatile and disruptions in the prices. We cannot let go market because raw material costs are high. We have to produce and continue, and market share has to go up. That's the whole idea here. Somewhere the disruption is also playing, but I still stick to my target that it will be somewhere around 35%-37%. Understood. Yes, sir, quarterly, the ups and downs we understand, and that is what is beyond our control to some extent. Somewhere I think the. on a medium-term perspective. Our business model is such which should be appreciated by the market, that we have three segments is our own creation. Otherwise, if you see the overall margin has gone down by 3% of EBITDA. It's not gone down significantly. The performance outside of Fine and Specialty is doing well, Fine and Specialty has gone down, but bulk is doing well. Ultimately, the whole idea is better to present a picture which is integrated other than. Because each product flows into other segment. Everywhere you will find that there is a margin element in that. To come up with that particular, like, PNT prices, for example, is significantly high, which is absorbed by, or caustic price is high, which is a bulk commodity, which is absorbed by Fine and Specialty. Sodium nitrite is consumed in Fine and Specialty. Those things are, which are, I mean, it should be understood and appreciated in a totality rather than getting into a segment. Overall impact is how much. This is where our business model. Yeah. Yeah. No, I think that is well appreciated, and that thing has kept us going. Even our performance, if you see, over a medium to longer term, has. This we have gained from our fully integrated model, so no denying of that. Great, sir. Yeah. Thank you. Those were my questions. Thank you, and all the best. Thank you. Thank you. The next question is from the line of Tanvi Bhandari from Hem Securities. Please go ahead. Hello, sir. Just a few questions. First, I just wanted to know that, you know, overall, is everybody talking so much about margins? Just a general question. Like, if we have an inter-segment thing that because of one margin is high, the other margins are low, but still we had a 5% dented margins if we talk about the integrated level. I wanted some clarity on an overall level that from 27%, in previous year-over-year basis, we are at 22% EBITDA margins roughly. Also, as we're talking about more of downstream products, and still it won't be all a commodity play because we are planning to have more value-added, derivatives, downstream derivatives coming in. Won't we have, won't there be high-margin products? Yeah. I'll answer the first question first. You're right that there has been a dent. As I have alluded to before, that is largely because of As I mentioned, you know, we are able to absorb raw material cost increases, sometimes with a lag of a quarter, and that's normal, that's fine. What is difficult to be able to absorb is unavailability of raw materials from time to time. That was, you know, exacerbated in the case of Q3, because we were unable to get the raw materials owing to force majeure raised by some of our suppliers. Now, as the situation normalizes, as material movement is available, we remain confident. What happens at the end of the day when you're talking about a company which has a significant amount of its value coming from, you know, high CapEx intensification of its existing plants. If they're not able to run the plant because of unavailability of a raw material, then that will affect the average margin. There's no question about it. Also, you will find in some cases that, you know, when we talk about margin, we talk about margins on a normalized basis, that we expect Fine and Specialty to have a 35%-40% margin on a normalized basis. Now, in that interim period, if for whatever reason, things like energy costs suddenly shoot up and then they come down, they do affect the bottom line, but they affect the bottom line in a way where it is not a sensible thing to pass on. Because it went up, it came down, it got normalized, situation is normal, and therefore what is more important is keeping the strategic customer supplied with your key products that they require so that they can grow. Now, you will see that, yes, there was a dent, but you will see by and large that one should not look at a single quarter in its isolation. These have happened. You will find that most companies that were involved in the production of, you know, commodity chemicals like chlor-alkali, they will do well in Q3. Is that going to be an expected situation around the year? No. Just the same. For us also, you will have a situation where there was a margin compression because of unbelievable volatility in key materials and therefore an utilization. This is something that we don't hope will continue. There's no reason to expect it to continue, but once in a while it happens, and we take it in stride. Now, with regards to the question about phenol. Yes, you're right. Not all of the downstreams that we would get into will be commodities. There will be others which are quote-unquote advanced intermediates, and they will have higher margins. By and large, as a balance, you will perhaps see a change in the flavor of the business moving forward in the phenolic side. Let's be clear that when Mr. Upadhyay is talking about the margins, it is the margins of the products that are currently being manufactured by us. Moving forward, we may see the extent of improvement. We don't know, because at the end of the day, it will always remain a blend of high volume and low volume with higher margin. Okay, got it. Just one last question. Could you just give us a glimpse and a flavor of the market share in each of the segments? In each of the segment, also very difficult to answer, but I think by and large, for all of our products, maybe with one exception here or there, one or two exceptions, we are, we're the largest player for that product or in the top three largest players for that product, by and large worldwide to our target audience. Now, for example, sodium nitrite, you will have capacities. I mean, China by itself is maybe five, six, seven times the size of Deepak, right? In terms of its. But that's not our target market. So we don't sell to that market. The markets where we sell, we are dominant players in terms of wallet share and capacity. Correct, Mr. Upadhyay? Is there any product that we are not in this position? Most of the products would be around 70-75%. Even the nitrite would be 80% maybe. I think that's. Wherever we are, we are having high market share, and we don't let go of market share. Absolutely. That is for sure. One good thing that is happening is, you know, India as a, as a market in terms of demand is also growing very rapidly. The demand CAGR that you see in the domestic market has grown substantially in many of the segments that we are in. There will be occasional contractions because of unexpected events like COVID. As a general trend, I think we should all be proud of the kind of investment that the segments across the board are making in India. International players as well as Indian players, many of them have announced CapExes, many of them are in the process of commissioning their previously announced CapExes. India is the right place for growth, even for companies like Deepak. Especially for companies like Deepak. Thank you. Got it. Ladies and gentlemen, due to time constraint, we request you to limit your questions to one per participant only. The next question is from the line of Manish Jain from Moneylife Advisory Services. Please go ahead. Yeah, thanks for the opportunity. My only question is that what has been the volume growth across segments compared to the previous quarter? I think we've mentioned, right? Previous quarter, I think we've been able to our investors that Somsekhar Nanda will get back to you on this, each quarter, because it varies from product to product. Okay. Yeah. I will call you back later. Yeah. Drop an email to me, I will touch base with you. Okay. Okay. Thank you. Thank you. Thank you. The next question is from the line of Rohan Gupta from Edelweiss. Please go ahead. Yeah, hi sir. Good evening. Question is on our phenolic business. We have seen that definitely there has been some marginal pressure on spreads in phenol, but on a quarter-on-quarter basis, there has been a sharp decline in EBIT from our phenol business, while we have been running our plant at maximum utilization, you mentioned almost 115%+, and also probably benefiting from the IPA. Is there any one-off or high raw material cost probably which has impacted the phenol profitability in the current quarter? Because that's not quite getting reflected in the spreads which are available. Utilities. Steam costs coming from high-priced coal. That is one of the major one. We do see that there are, I mean, you see propylene price, this is also there, but this will anyway get reflected in some way or form. Most important at the end of the day has been the cost of utilities. Freight costs have been an ongoing perpetrator in many cases. Nowadays, even domestic material movement, look at the price of petrol and diesel. Sorry, sir. You go ahead. It's very impacted. No, no doubt in that because of higher utility rates and then even propylene, the input rates are also high. You know, it's so that high in the sense, though we are having a decent margin, I mean, we are talking about. Yes, the raw input cost was high, you know, for the quarter. Okay. Sir, this high utility cost definitely continues with the rising coal prices. Do we see that this kind of pressure in terms of spread, or, I mean, in terms of lower profitability in phenol business will continue? No, of course not. Why should it continue? Because phenol prices are also going up. It's not going to remain same. Because ultimately, well, if coal price remains at this level, whatever price it is, then the market will have to absorb the price. It's a question of matter of time then. Raw material prices, I mean, in fact, if it is impacting for a quarter because LPG rates and the rates are high, if it is going to remain because crude has gone up, so there is somewhere it has impacted the propylene price also. Phenol then will have to go up. Ultimately, I mean, again, I repeat that if you are expecting a margin of 20% or 30%, that's not going to. That is something which is not sustainable. Yes, reasonable margin, certainly. Anybody can pass on and get. Okay. Sir, in Fine and Specialty Chemicals business, you are mentioning that in the presentation you have also mentioned that definitely there has been some lag in terms of passing it on to the end customer. I understand that we are an integrated business model, and that's pretty helpful. That one higher profitability from one segment compensates probably the lower profitability from other business. In Fine and Specialty Chemicals, we have in last two-three quarters we have also commercialized more products and the revenues have picked up significantly. That with the higher operating leverage, our specialty chemical margin should go up. Is it that because of the lag in terms of passing on the raw material increase that is taking some time in terms of margin expansion with our customer? Sorry, just to correct you. That is true. There has been no new capacity in Fine and Specialty that got commissioned in the last two quarters. That is not. I mean, we have announced that there is expansion. There is investment in all of the segments, there's no doubt about it. That said, in the last two quarters, there has not been any new debottlenecking that has been commissioned. The increase that you see in volume is because last year the volume was low. This year we are right now seeing, at least in Q3, we have seen a somewhat lower volume than our capacity because we did not have the key raw materials on time. The situations have improved, and we do hope to recover a good amount of the cost increase now moving forward, which is what happened in Q3. You cannot ask for a recovery for production that you didn't do and material you didn't dispatch. Nonetheless, we do anticipate that Q4 with raw material availability is much, much more palatable than it was in Q3. Let's see how things unfold. Q4, again, I said earlier, Q4 will be better for these segments as compared to Q3. Q3 was also not bad. I don't know why people are. Q4 will be better. Thank you. The next question is from the line of Nitin Agarwal from DAM Capital. Please go ahead. Hi, sir. Thanks. I just have a quick one on the Fine and Specialty Chemicals. How many products are we looking to add over the next two years, sir? Can't answer that because right now. No, there are actually it's not a small number. That is for sure. One of the reasons why we haven't announced the names of products that we are going to get into when we announced, you know, chlorochemistry as well as photochlorination is because it provides us a platform for a larger permutation combination of products. Many of these will actually be tied up with customers for the medium term. Difficult to answer, but certainly it is going to be an interesting number. Speciality chemicals as a segment even for us is turning out to be a very attractive play, even in terms of the kind of engagements that we are getting into with existing customers for new molecules and new customers for new molecules. That's it. More like if I can just push you a little bit on that. So in terms of timelines, by when do we see the impact of the substantial new product additions or platform additions coming through in our numbers? On commercializing the at least many of those molecules, that will be at the later end of the next financial year. Between December and February is when we will start to move material out, and therefore we'll see some impact coming in Q4 of next year. That's when you will start seeing the value coming in. In the meanwhile, there are brownfield expansions which we have already announced, and those are also with long-term agreements that are tied up, but those are for existing chemistries and products that we currently do manufacture. if I can, you know, what Sorry to interrupt, Mr. Agarwal. Sir, may we request that you return to the question queue? There are participants waiting for their turn. Sure. Thank you. Thank you. The next question is from the line of Saurabh from Asian Markets Securities. Please go ahead. Thank you for the opportunity. If I inferred your comment correctly, so we are looking at debottlenecking in the phenol plant as well? We always look at. We know. debottlenecking in the phenol plant. What kind of incremental capacity we can know, incremental volume we can add and by what timeline? These are all very important. Yes, we will. We are certainly working on this because, in this plant itself, when we say 2 lakh tons capacity, today we are producing 117%. Mm-hmm. It will go up with our further small debottlenecking in this. But I think to give you exact number is not possible now. These are numbers. Something which we've mentioned before is for us it's, you know, because the plant is designed in such a way because this is what we had, this is the money we had, this is the land we had, is that it has been developed and commissioned in an extremely tight and efficient manner. That means that it is not just the capacity of phenol that has to, I mean, that can be improved. It has to be every single piece of the jigsaw. All right. Just to give you one example, our the cost of diesel that we pay for in order to move our material to the customers, that itself on a monthly basis is INR 15 crores. This is the cost of the diesel for the trucks and the tankers that we have that get our material to our customers. This is what you would look at as on an annualized basis, the bottom line of a small chemical company. This is just the diesel cost, right? At the end of the day, all of these things have to move lockstep, and we've been able to demonstrate that very well in the last you know year, two years. No reason to believe that we will not continue to do that. We have very strong systems and processes in place. As we debottleneck, we will also debottleneck our supply chain. End to end, we will see. We'll continue to see value coming in from every part of it. Okay. Just one more on the raw material side. Sorry to interrupt, Mr. Saurabh. Okay. Sir, may we request that you return to the question queue? Uh. Thank you. The next question is from the line of Rushabh Shah from Anubhuti Advisors. Please go ahead. Thank you for the opportunity. First question is basically on the substantial rise in other expenses during the quarter on a sequential basis. If I understand, is this because of higher freight cost or something, if I'm missing? Other expenses, we are comparing nine months or how it is, what we are comparing? Sequentially, last quarter, as per your BSE filing, it was INR 72 crore, and this quarter it is roughly INR 100 crore. I don't remember. It must be with some element of expenses net of also against the income of, I don't know, INR 72 and INR 100 you are saying. There was an expense, some payment. Was I confused? Sir, sorry, sir. Can you please repeat the question, Rushabh? Yes. As of Sep quarter ending September 2021, the other expenses were INR 72 crores. It has substantially gone up to INR 101 crores this quarter around. Any exceptional item it was, or was it just reflecting the higher freight and energy costs? It is largely, yes. Largely has higher freight and domestic as well as ocean freight. Because of the- Okay. Logistics only. Sales and administration. The larger logistics and because of the larger volume that we have carried, the impact of this also is in the numbers. Basically we are reiterating our margin guidance for all the segments. We are not cutting anywhere that our margins may go down going ahead. No, no, we are not saying that. Okay. Sir, just last one question on the spin-off, basically- Sorry to interrupt, Mr. Shah. Sir, may we request that you return to the question queue? There are participants waiting for their turn. Sure. Thank you. The next question is in the line of Julie Mehta from Mount Intra Finance. Please go ahead. Yeah. Hi, sir. Thank you for taking my question. I just wanted to get back to our plan of entering photochlorination and fluorination. These chemistries are really complex to crack, if I'm not wrong. I just wanted to know, like what is the expected target and by when do we think we'll be making any development on this front? And also if we have any specialized personnel for this segment. If you can- Maulik just mentioned. Sorry. Okay, go ahead, Maulik. No, it's okay. Mr. Upadhyay and I both have mentioned that the capacities will come online towards the end of the third or beginning of the fourth quarter of next year. Of course, we have people who have a fair degree or high degree in fact of competency. The chemistries themselves are complicated, but I mean, there are several chemistries that we are currently already doing which are complicated. Anything which is new is always going to feel a little bit complicated. I think there has been a hullabaloo created by a lot of people that these chemistries are more complicated than normal. What is important to keep in mind is material handling and safety. Now, that is something that we of course are going to pay extra attention to. There's no doubt about it. Material handling and safety at the end of the day is important. You know, this is not something that is new to us. We have various products in our basket which require a lot of safety and material handling, and this is our bread and butter. We know this, and we are responsible for ensuring that every single person in the company is able to work in a safe and secure manner. That's our job. We continue to hold ourselves to a high standard in terms of safety and in terms of material handling. You know, we've had a fair degree of confidence internally. Otherwise, we would have announced these projects a long time ago. What we had to do first is, yes, we were successful at the lab and the pilot level. We were successful at ensuring that all of these things are clear to us. Over and above that, we had to work to ensure that raw materials were secured, that we got the right people on board so that it was not just extending our current selves, but we got people on board who had a good degree of experience in handling these kinds of chemicals. Once we had these things tied up, that is when we made the announcement that we are investing in this. Yes, it is important and yes, we are aware. Okay. We have a good team of people also available. Yes. Yeah. Yeah. Okay, I get it, sir. Thank you so much. Yes. Thank you. The next question is on the line of Arvind, an individual investor. Please go ahead. Hello. Arvind, your line is unmuted. Please go ahead. I'm audible? Yeah, thank you. Just two questions. One is a follow-up. Can you just indicate the kind of product reach and market expansion that you have done over the last few years? Because given your high market share in your target area and the kind of growth that you have achieved, is it a function of new product additions or is it a function of market reach expansion also? If you can shed some more light over the last three years, what has been the key driver and how to look ahead? Both. We have expanded capacities in many of our products. We have also seen that the domestic market, even the markets that we are in, forget domestic. Why do I keep talking only about domestic? Our customers have seen a healthy demand for their products which consume Deepak's products. As their requirements increase and our wallet share stays the same or increase, we also find that our products are in higher demand with existing customers and new customers that come in. Now, for example, we have made investments, like I mentioned earlier, in sodium nitrite. Even with the increased production that we commissioned in October, just a couple of months ago, our market share in the domestic market has increased, but it has increased marginally. That is because the domestic market itself has increased. Right. A lot of our customers have invested in downstream in their own capacities. Similarly, if we look at, say, agrochemicals, we are seeing a bullish trend with regards to demand for Deepak's products. Whether this is in Europe, whether this is in India, whether this is in the U.S., there has been an increase in demand. In many cases, the customers have actually increased their wallet Deepak's wallet share because we've been able to demonstrate sustainability of supply pipeline. I was asking the 75% kind of market share. Mr. Right. Just 75% kind of market share is something which is you can't expand beyond that, right? It's not a fair assumption to assume that it can go up to 100%. That's not Assumption. The market The size of the market remains the same. Because if the size of the market increases, then you are talking about 75% of an increased market. Okay. Fair point. Thank you very much. Thank you. Like phenol for example, to elaborate, if you tell Maulik Mehta. See, phenol, when we entered the market, we were at 65%. Market has expanded so much that we are now at 55%-60%. I mean, the market is growing. There is enough opportunity available. We are at 55%. We are at a lower market share with a higher product output compared to what we had originally envisaged of 100%. We were far in excess of 100% and still we are at a lower market share. Thank you. The next question is on the line of Rushabh Shah from Anubhuti Advisors. Please go ahead. Thanks for the opportunity again. Sir, my just last question was on the phenol part. Basically the revenue decline which we saw this quarter around was any impact on account of anti-dumping duty which was revoked last time? I just wanted to understand the reason of the decline in revenues. No, there is no impact of anti-dumping duty for that. No, absolutely no. That is. The only time we remember this is when some investor reminds us that, "Oh, you remember that anti-dumping duty? Yes. It doesn't affect our regular business. Okay. Was there any volume decline this quarter around versus the last quarter? In what product? In terms of phenol, the overall volume, did we see a volume decline sequentially? There was a reduction of around, but marginal, not much. Maybe 3,000-4,000 tons. Okay. Just on the last basic chemicals, the issue at the vendor end has largely been resolved, right now? Sorry, issue of? The issue which we were facing at one of our vendor's end, has that been resolved now? Basic chemicals? We are not aware of this. What is the issue faced at vendors? The force majeure which we saw at one of our vendor's end. That is not in phenolics. That is in Deepak Nitrite. Basic chemical. Yes. The situation certainly the force majeure got removed. Now that is normalized as we speak. Every quarter has thrown up some interesting surprise or another, which was earlier envisaged. This was not envisaged. The force majeure was lifted towards the end of December. Thank you. Ladies and gentlemen, that is the last question. I now hand the conference over to the management for the closing comments. Thank you all. Thank you so much for joining this call. In case you need any further clarification, please write to us. Our investor relations team will respond certainly to you all. Thank you once again. Yes, thank you from my side as well. Please everybody stay safe. I know that there is a tendency to, you know, disregard this, wave as something which is not as significant or severe. You know, it is going to be significant or severe to people who, you know, immune compromised. Always aware that, you know, as a country we have a young population, and that means that a young population might have a lot of people who are not as vaccinated as many of us are. Please take care. Please stay safe. Please ensure that your family is safe. Look forward to talking to many of you in the near to medium term. Bye everyone. Bye. Thanks very much. Thank you everybody. Thank you. Thank you. Ladies and gentlemen, on behalf of Deepak Nitrite Limited, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.