Ladies and gentlemen, good day, and welcome to the Q1 FY 2023 earnings conference call of Deepak Nitrite Limited, hosted by IIFL Securities Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ranjit Cirumalla from IIFL Securities Limited. Thank you, and over to you, sir. Thank you, Margaret. Good afternoon, everyone, and thank you for joining us on Deepak Nitrite's Q1 FY 2023 earnings conference call. Today, we have with us Mr. Maulik Mehta, Executive Director and CEO; Mr. Sanjay Upadhyay, Director Finance and Group CFO; and Mr. Somsekhar Nanda, CFO. We will begin the call with opening remarks from the management team, followed by an interactive Q&A session. To begin, Mr. Maulik Mehta will share his views on the operating performance and the growth plans of the company, followed by Mr. Sanjay Upadhyay who shall take us through the financial and segmental performance. I now invite Mr. Mehta to share his opening comments. Thank you, and over to you. Members of the management, please unmute your line. We cannot hear you. Am I audible? Yes, you are audible now. You may proceed, sir. Okay. Good afternoon, everybody, and a warm welcome to all of you on Deepak Nitrite's Q1 FY 2023 earnings conference call. At the outset, let me state that the company continues to maintain a high level of production at all its facilities while complying with all regulatory mandates, rules, and safety requirements. The health and well-being of our employees and the community within which we function continues to be of the utmost significance to us. Moving on, our documented results were shared with you earlier, and I hope that you've had the opportunity to glance through them. I will initiate by taking you through the key financial and operational highlights and how we are preparing ourselves for the upcoming year. Mr. Upadhyay will then present to you a more comprehensive financial overview of the period under review. Then we are open to a Q&A session. Our business model continues to be tested with various operational and macroeconomic challenges, and I'm pleased to report that we have emerged stronger and more confident. Increased capacity from incremental investments and sustained demand from end user industries continue to drive growth, both top line and bottom line through the company. The heartening part is we at DNL, almost 40% of our top line has been contracted, and at Phenolics, 20%-25% of the top line has been in contractual agreements. Deepak Nitrite has delivered a resilient performance in Q1 to kick off fiscal 2023 on a positive note. On a consolidated basis, revenues crossed INR 2,000 crore. Specifically, it was INR 2,068 crore, up by 35% year-over-year and 10% quarter-on-quarter. This was achieved despite the Nandesari unit of Deepak Nitrite being unavailable for a meaningful part of the quarter owing to a fire at one of its warehouses. The company exhibited sustained top-line performance despite several other challenges, such as considerable inflation in raw material prices and challenges to their availability, as well as elevated utility and transport costs. In Q1, EBITDA stood at INR 366 crore, translating to an EBITDA margin of 18%. There was a one-off impact from the fire incident. It must be appreciated that we are functioning in a highly dynamic environment with fluctuating crude oil prices, shutdowns of plants in Europe and China, as well as sharp fluctuations in input prices, as well as Forex rates. Deepak remains highly competitive in global and domestic markets. We continue to take several initiatives to lower overall costs and improve manufacturing efficiency in order to structurally elevate profitability. On the operational front, our domestic business revenues stood at INR 1,687 crore in Q1, higher by 46% year-on-year. Export revenues came in at INR 371 crore in Q1. On a consolidated level, domestic to export mix stood at 82%-18%. Our focus on domestic business is to be viewed in the light of high cost and constrained availability of shipping vessels, containers, congestion at ports, and some revisions and protocols in China and Europe due to surges in COVID cases. With respect to segmental performance, revenues in Advanced Intermediates segment increased by 39% to INR 739 crore. In addition to substantial inflation and key input prices, there was extreme exchange rate volatility. Amid global trade volatility, Deepak delivered robust growth for key products. Profitability lagged below sales growth due to two factors: increased commodity prices and a lag in passing on price increases to customers as per contractual agreements. As this normalizes further, margins are expected to improve in this and the following quarters. Deepak Phenolics delivered a remarkable quarter with revenue soaring by 33% to INR 1,338 crores in Q1. In a notable accomplishment, the plant recorded a high average plant utilization rate. Post the commissioning of the CPP and its stabilization, we were able to avoid several incidents of potential plant stoppage, which would have occurred due to power failures in Dahej, industrial areas. In the backdrop of an unstable macroeconomic environment, DPL was able to provide a robust top-line performance driven by volume growth and maintaining the customer's wallet across key products of phenol, acetone, and IPA. Margins were impacted due to normalizing realizations of joint product acetone in relation to the prior period, where pricing was exceptionally high with regards to margin over material. The demand trend continues to be strong in the Indian subcontinent, and the company is well-positioned to realize incremental gains in this segment over a period of time through downstream integration with phenol and acetone derivatives. While we have already explained to you, we are at various stages of project implementation. Out of the projects that we have announced of INR 1,500 crore, which we will start seeing coming in in phased manner over the next 15 months. In addition, three products are in an engineering phase, which means they are past the piloting phase, which will be downstream products of something that DNL and DPL make. They will service the pharma segment. These import substitutes involve a challenging gas liquid reaction and are expected to yield 20%-30% EBITDA with both Indian and non-Indian anchor customers. These products are further expected to bring both top line and bottom line. We will come back to you with more details about these products at an appropriate time. We must mention here in a key development, the company is increasing its capacity for in-house waste treatment as being part of projects under implementation and is expected to result in a decrease in its footprint. It is also going to be increasing its ability to backward integrate so that it is de-risking its own supply chain. Looking forward, we foresee strong growth for India over the medium to long term due to the rising market demand on a global scale. The business is well poised to capitalize on an increasing demand substitution trend across the nation. We will be able to take advantage of this trend attributable to a promising pipeline of products, which also includes solvents like MIBK and MIBC, amongst others, which have already been approved. During the quarter, our teams once again performed splendidly in the midst of a challenging environment, enabling us to maintain our performance momentum through the quarter. The combination of factors is probably as extreme as I have witnessed so far. There's always this question about different engines of Deepak operating at any given time, which boosts our bottom-line numbers. In Q1, we had none of our primary engines firing. This is what we would look at as a pretty challenging situation, which we expect to be very short-term. It has leveraged its manufacturing expertise, world-class facilities, and flexible operations to deliver an efficient performance. This was backed by a robust balance sheet, and I'm proud to announce significant investments to accelerate our growing trajectory. In conclusion, I would like to emphasize that DNL is well-positioned for expansion in a range of aspects. Apart from a noticeable shift in the chemical supply chain from India to other countries including China to other countries, including India, Deepak has the ability to take advantage of the opportunity and its long presence in value chains. The company is an excellent candidate to be one of the leaders of the India chemical manufacturing trend, thanks to its unique product mix and decades of manufacturing experience. This, along with contributions from our expansion plans, will improve our competitiveness and position us to grow market share, generate value for all stakeholders. Following the recent unfortunate incident of the fire at a warehouse in Nandesari, one of our manufacturing sites, all the plants are running at capacity as per permission given by statutory bodies as of July 2022, except sodium nitrite and sodium nitrate, which is currently operating at about 50% capacity. This will move up to 75% by mid-September and is expected to be back to full-scale operations by October. We have always adhered to stringent safety measures, and we regularly conduct audits at facilities. Despite these rigorous practices, these incidents clearly indicate the challenges prevalent in manufacturing and storing hazardous products and inputs and also the high standards of care required in handling such materials. We pride ourselves on a commendable safety record, and we will work to further tighten our processes and protocols wherever possible. Those of you who participated in our virtual AGM on the third of August would be aware of the new directors being appointed to guide us through the next wave of growth. In management changes, Mr. Sanjay Upadhyay, who served as CFO of DNL, is now being elevated to Group CFO. Mr. Upadhyay will now address this forum and take you through the financial performance. Mr. Somsekhar Nanda, who is also on the call, has been designated as Chief Financial Officer for Deepak Nitrite Limited. Thank you, Maulik. Good afternoon, everyone, and thank you for joining us today on Deepak Nitrite's earnings call. I'll walk you through the highlights of the financial results for the quarter ended June 30, 2022. Before we start discussing on the financial numbers, a key development to share with you is the reclassification of business segments as the businesses have undergone a lot of changes over a period of time, whereby interdependence of processes and products have increased. Hence, due to the increasing number of facilities catering to multi-products, integrated production processes, similar economic characteristics of products and business scenario, the company and the chief operating decision maker reviews the group performance in two business segments and distributes resource based on the value generated by these segments. Due to this merger of SBUs, group's operations are now reported under two business segments, Advanced Intermediates and Phenolics, in accordance with Ind AS 108. Now to the business. In Q1 FY 2023, Deepak performed impressively during the quarter despite challenging macro environment, such as escalating expenditures and persistent volatility in prices of major feedstock. Foreign exchange rates also were very volatile during the quarter. On a consolidated basis, revenues grew by 35% to INR 2,068 crore during the quarter under review. EBITDA was INR 366 crore, down by 20%. Given the normalizing spread across the key products, combined with inflationary pressures as well as some operational and logistical challenges, the margin has undoubtedly faced pressure, with the company reporting EBITDA margin of 18% during the quarter. PBT and PAT decreased by 22% to INR 315 crore and INR 235 crore respectively. Key raw material prices continued to rise significantly, which had an influence on the profitability dynamics. For example, the operations were affected by an increase in chlorine costs by 72%, rise in nitric acid by 142%, totaling to INR 16 crore and INR 19 crore respectively. However, we have a formula-based pricing, and these costs are passed on, but there will be some lag somewhere. Due to the fire at Nandesari facility, the company has estimated and recognized an initial loss of INR 47 crore on account of damage to certain property, plant and equipment and inventory, and has conservatively recognized insurance claim receivable to the extent of aforesaid losses. Further, the company is in process of determining final claim amount of reinstatement of assets based upon estimated costs. The aforementioned losses and corresponding carrying of insurance claim receivables have been presented on net basis under exceptional items in the results for the quarter ended June. Moving to the segmental performance, as Maulik mentioned earlier, our strategic business units have been merged in accordance with Ind AS 108. Due to this merger, the group's operations are now reported under two business segments, Advanced Intermediates and Phenolics. In the Advanced Intermediates segment, revenues increased by 39% to INR 739 crores in Q1 FY 2023 versus INR 532 crores in Q1 FY 2022, while EBITDA margin marginally grew by 2% to INR 149 crores during the quarter under review, despite the current environment and challenging circumstances. Deepak Phenolics delivered a strong performance with revenue soaring to 33%, by INR 1,338 crores in Q1 versus INR 1,003 crores in Q1 FY 2022, while EBITDA stood at INR 217 crores and EBITDA margin came at 16%. Robust demand and high plant utilization helped revenue realization towards phenol and acetone to increase over the period previous year. The company has been able to take advantage of favorable demand patterns for both the products. During the quarter, currency rate was highly volatile, fluctuating by 5.33%, highest being 79 and lowest being 75. In order to lower the risk of foreign exchange volatility, company uses dynamic hedging measures, which resulted in exchange gain of INR 2 crores. Investment of surplus cash and pending deployment into various ongoing projects resulted in gain of INR 5 crore during the quarter. Lastly, on the balance sheet front, the company's financial position has significantly enhanced, and it remains zero debt company. In addition, the company achieved ROCE of 44% in Q1 FY 2023, and its net worth stood at INR 3,573 crore. This sound position of net worth is expected to facilitate leveraging of balance sheet for further expansion in the future. With that, I would now request the moderator to open the forum for question and answer session, please. 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 the 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. Anyone who would like to ask a question, please press star and one at this time. The first question is from the line of Nirav Jimudia from Anvil Research. Please go ahead. Yeah, good afternoon, team. Sir, I have two questions. One is, in the initial remarks, you have mentioned that, we have been setting up the MIBK capacity, and I presume MIBC is the forward integration of MIBK. In the AGM, you have reiterated that, we are planning to put up something around 40,000 tons of MIBK capacity. If you can share your views in terms of how much we are planning to put up the capacities of MIBC, and when these projects are going to get commissioned. Along with it, if you can also share that since we have announced almost INR 700 crores of CapEx for Phenolics, how much these projects would take care of out of our total CapEx of INR 700 crores? Because let's say if this consumes, let's say 50% of our t otal announced CapEx. Are there further products which would be a part of the INR 700 crores, or this would exhaust our INR 700 crores CapEx limit? This is question one. What is INR 700 crore? Okay. Anyway, You have mentioned in the annual report that we are planning to invest INR 700 crore for the Phenolics, for the solvents. Okay. We are investing INR 700 crore for solvents in Phenolics. MIBC out of this, to answer your question, is 8,000 tons. Now, the INR 700 crore comprising of the MIBK, MIBC and other solvents also. Okay. Breakup would be difficult to give because it is set up on a new site, and it includes infrastructure also. You know, when you see certain CapExes, it is, it covers the infrastructure cost also. In totality, we are spending INR 700 crore for this. Okay? Okay. Got it. When these projects will be commissioned, so would it be next year, get the benefits of these projects getting commissioned, or would it be in the year after that? I mentioned in the opening remarks, all the CapExes that we have already announced. Yeah. These will be commissioned, and that includes MIBK, MIBC. They will be commissioned in a phased manner between now and the next 15 months. Okay. Sir, a small clarification on this capacity. Our press release also says that we have been investing almost INR 210 crores in Deepak Chem Tech. Is this for the hydrogenation facility which we were earlier talking about? Actually, Deepak Chem Tech is a vehicle. It's a 100%, 100% owned subsidiary of Deepak Nitrite, wherein the investments are done, including all these, you know. Okay. This is just a capital infusion by Deepak Nitrite for these projects. Got it, sir. Got it. Sir, my second question is, sir, if we see, last three years, we have invested close to INR 820 crores in the business from 2020 -2 022. Some of what is already there, the benefits also we have started getting in terms of the IPA and the captive power plant of 29 MW. Let's say if you can share that out of this INR 820 crores, if we exclude this IPA and CPP, we would have invested something for, the brownfield expansion for our standalone businesses. How much of this benefit of this balanced CapEx, where we have done for the brownfield expansion is already we have accrued, and how much it would be accrued over next one or two years, considering an asset turnover of 2x, which you have mentioned earlier in our calls for our brownfield expansions? In Deepak Nitrite, the brownfield expansions are not included in the total CapEx amounts that we have shared. Okay. Those are done as a natural process, and we don't get into a discussion about the CapEx, amounts and the volume. We retain our ability to be world-class suppliers. As our demand grows, we maintain our wallet share and, try to see how we can get more wallet share. Any brownfield expansion at Deepak Nitrite is, in addition to this. Okay. Let's say if we exclude those IPA and the captive power projects, where was this balance amount being spent into? If you can give some understanding, sir, that would be very helpful. There was land that about INR 150 crores that was spent. Okay. As mentioned earlier, between the captive power plant and the IPA, we spent a total of about INR 300 crore. Okay. There were others which were brownfield, which have been between, mostly in Deepak Nitrite. Okay. Which have had, you know, something between about INR 80 crores-INR 100 crores. There is always, you know, incremental CapEx that is in Deepak Phenolics to maintain a high degree of operational uptime. Okay. Sir, last question, if you may allow me. Sir, we have also mentioned in the AGM that, we are going to increase our, Phenolics capacity by 25%, probably which will come up in next year. Is it safe to assume that probably the cost of this debottlenecking would be, equal to the depreciation what we have been incurring on a yearly basis, or the cost could be slightly higher than that? I mean, there is no correlation between depreciation and the investment. Yeah. What I was trying to gauge is in terms of how much CapEx we are trying, because our annual depreciation is anywhere between INR 180 crores-INR 200 crores. I was just trying to get an understanding about the amount we are intending. Yeah. We asked you that question, but then, it's not nowhere near INR 180 crores-INR 200 crores. Okay. Don't worry on that. Okay? Yeah. Is it safe to assume that the amount would be lesser than that, sir? Yes. Okay. Thanks a lot for answering the questions in detail, and all the best, sir. Thank you. Thank you, Nirav. Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all participants, we would request you to please limit your question to two at a time. Should you have a follow-up question, you may rejoin the queue. Thank you. The next question is from the line of Levin Shah from ValueQuest Investment Advisors. Please go ahead. Yeah. Thanks for the opportunity, sir. Sir, my question is, we have put in the presentation as well that the input cost for lot of our raw materials have gone up substantially. Now, how do we see the situation post Q1 and whatever the cost pass-through that we would have done? Do we see that for the rest of the year, you know, the margins would improve from here on? The largest raw material purchases that we make as a group are into petrochemical, benzene, toluene, propylene, and those saw a significant spike in Q1. They've reached numbers which, I mean, in recent memory, they have never reached. They have already started to soften in line with prices of crude that we are seeing. While there is a pass-through, we will start to see some benefits of that moving forward. Anyways, the margin hopefully will start to strengthen in the near to medium term because we're seeing a decrease in the price of raw materials. In Deepak Nitrite on a standalone basis, we also consume a large amount of ammonia and nitric acid, which is based on ammonia. This has just as much seen a significant spike along with caustic prices. I think that this is not expected to be a long-term situation. This is current mismatch between supply and demand, which is expected to normalize over a period of time. Nonetheless, the company is also taking various steps to ensure that over a period of time, it increases its ability to, you know, have some level of self-sufficiency. Customers have been very, very supportive in that sense. We have not really lost market share despite these high and temporary increases in raw material. We continue to be key suppliers to all of our customers in these downstreams. Understood. Sir, my second question is on Phenol. At the AGM, you had mentioned that your capacity now stands at around 250,000 tons, and you are planning to expand this capacity further. What would be the quantum of expansion and the kind of CapEx that you would be spending on it? This was already asked. Basically, while the capacity does stand at now 250,000 tons. This is part of the process. Our original capacity was less than that and, you know, taking it to 250,000 tons, and then further on, you know, adding maybe about 15,000 tons-20,000 tons over and above that will be done in, you know, in short course, and maybe over the next quarter or two quarters. Any further increase will be done over a period of the next year or so. Right. We target by perhaps the end of FY 2024 to be about 50% over the original plant capacity of 2 lakhs. Understood. Sir, the CapEx on this, since it's a brownfield expansion, would be not that significant. Not a lot at all. Sure. Understood. Thank you, sir. Time's up. Thank you. Thank you. The next question is on the line of Isha Agarwal from VP Capital. Please go ahead. Yeah. Thank you for the opportunity. Sorry to interrupt you, Ms. Agarwal. Your voice is not very clear. I would request you to come on the handset mode. Yeah. Thank you for the opportunity. My question is, since you are projecting that the prices of raw materials further soften from here on, so do we see the risk of inventory loss? And also, how do we procure our inventory? Like, for how many days do we keep the inventory for raw materials? This is dependent on products and dependent on how we see the macroeconomic environment shaping up. For example, when the prices of raw materials were low, we targeted every external tanks that we could in order to carry high levels of inventory of raw materials. In such an environment where the raw materials are high but coming down, then the goal is to see how little expensive raw material you can carry because you're expecting it to be much better. Now, this is true whether it is Deepak Nitrite or Deepak Phenolics. What I can also share is that while prices for petrochemicals are you know coming down, ammonia, nitric acid, caustic lye, which are large you know consumption, they remain at you know multi-year highs. We are expecting... I mean, before prices start to come down, you have to start seeing prices plateau. Mm-hmm. This is what we are, you know, starting to look at. We have to see how the environment develops. Do we see any possibilities of inventory losses from here on? No, we don't see any inventory losses. Okay. My third question is, can you please help me understand the industry for the solvents, like, particularly the products that we're entering into, the MIBK and MIBC. What is the demand and, what is the growth that we can project from your Can you please repeat the question? The demand is significant, right? It will continue to grow because, you know, world over, methanol and acetone are largely consumed as feedstocks in solvents. In India, which is a unique situation, phenol and acetone are consumed, you know, in segments like things like pharma, laminates and construction and those things. That also means that all of these solvents are currently imported into India. The import volumes are significant. What we are looking at putting up, you know, a 44,000-ton capacity with 8,000 tons of MIBC will, you know, very easily be consumed by the Indian demand. Over a period of time, like we did with phenol, we would see how we can look at debottlenecking. We genuinely see no problem in supporting the Indian supply customers. Also, along with the fact that there are no other domestic manufacturers of the same. This is for MIBC. Even the other solvents that we are looking into as downstreams of phenol and acetone are actually entirely imported today with, I think, 5%-10% growth CAGR expected in consumption. Okay. Thank you so much. Thank you. The next question is from the line of Rohan Gupta from Edelweiss. Please go ahead. Yeah, hi, sir. Good afternoon. A couple of questions. First is on our CapEx, which we had talked about yesterday during our AGM in polycarbonate, that is forward integration in phenol. Just want to understand that how much you think that there is a further investment opportunity in polycarbonate or even some more phenol derivatives which we have been talking about. Definitely that one plant we have already announced. But what I want to understand that how much investment potential we see over next four to six quarters or eight quarters we can put in this phenol derivatives, including polycarbonate. See, polycarbonate today, there is currently an import of about 2 lakh tons into India, right? This is expected to grow. As I mentioned, Rohan, world over, phenol and acetone are largely consumed into the polycarbonate segment. India imports all its polycarbonate. Over a period of time, over the next few years, having a meaningful presence in India to cater to domestic demand would have, I think roughly about between INR 5,000 crores-INR 7,000 crores as a total expected investment over you know a few years. I think this kind of consumption, which is currently standing at about 2 lakh tons, we expect it to become stronger because of a lot of government initiatives also that are taking place, and also frankly because polycarbonates are generally. Consumption of polycarbonates is generally linked to growth in GDP of a country. As we go from being a developing to a middle income country, we will see an increased consumption of this domestically anyways. Rohan. How much capacity we are initially planning for Polycarbonate, sir? How much initial capacity? 20,000 tons. 200,000 tons. We won't get into the capacity that I'm just sharing with you what currently India's import is. See, this is something that is not going to happen as an investment and commissioning overnight, right? While we are speaking with technology providers, while we're working internally also to see what we can fine-tune, we will see how the growth trend is in India. We will right-size our plants. We made this mistake when we put up phenol, because when we put up the plant expecting a CAGR of 6%, 7%-8%, which was what consultants told us, we estimated that at 2 lakh tons, we would be roughly about 65% of the domestic consumption. Now, today at 2.5 lakh, we are 55% of the domestic consumption, right? This, you know, call it, you know, ensuring that we take the right opportunity at the right time, or call it good luck or, you know, bad planning or whatever, but we've learned not to go with an assumption of growth, especially when growth is picking up because of various interventions in India and worldwide. We will ensure that we put up world-class facilities, looking at the current demand of 2 lakh tons. Moving forward, we see how this grows, and then we have the right capacity. Sir, some clarification. What you mentioned, the INR 5,000 crore-INR 7,000 crore kind of investment is only related to only polycarbonate which can happen, or you are talking about complete downstream of phenol? Rohan, that's what I was trying to explain. This should not be seen in isolation. That's a potential investment what we can have. Polycarbonate will again, I mean, it's a total downstream what we are talking. That has been our our strategy, and we have been discussing about it for quite some time. Phenol downstream going up to polycarbonate, this is how we will go. The whole stream, whole this thing will require around INR 6,500 crore-INR 7,000 crore based on current estimation. Right. I'll just add to that, you know, Deepak looks at making as many of his sites vertically integrated as possible. There will be plenty of avenues in this investment to start manufacturing products which may be part of the chain but may not necessarily go into polycarbonate at intermediate levels. This also does not include investments that Deepak Nitrite will be making for its own products. There is a good pipeline of product and good opportunity for Nitrite, Phenolics and other subsidiaries to grow. Okay. Sir, also a little bit more about your MIBK and MIBC. You mentioned that actually you are planning 8,000 tons kind of capacities initially to start with, and if you can give some sense on the entire Indian market and how we also reach the export market? 8,000 tons of MIBC and 40,000 tons or so of MIBK. Okay. Looking at the Indian markets and what is the size and potential and also are we looking at export opportunities in these? Yeah, yeah. We look at all opportunities, but primarily we are seeing a high degree of import substitution here and now. This is the current Indian requirement. As and when I mean, see, last two years, we have also taken opportunity to export Phenol when we felt that there was value in doing that. It is not like we are averse to it, but we already see a local and present opportunity. Thank you. I would request Mr. Gupta to join us, please, for follow-up questions. Request participants to please submit your questions two at a time. The next question is from the line of Saurabh Kapadia from Asian Markets Securities. Please go ahead. Thank you for the opportunity. Sir, if in the initial remark you mentioned about three products. Just can you give more color in terms of, you know, end user industry and whether those products will be, you know, manufactured in the existing setup or in the new setup? Yeah. These are products which are downstreams of Deepak Nitrite's existing products and Deepak Phenolics' existing products. They will be manufactured in you know sites that we already have, including the newly acquired site at Dahej. They are largely catering to the pharma segment, and they are I mean they utilize this very technically challenging gas liquid reaction as compared to the other standard processes that are there everywhere else in the world. They are highly efficient, very low footprint in terms of energy and water cost, and very very efficient in terms of any by-product that is generated. Over and above this, as I mentioned, we are targeting something like between 10%, 20%- 30% EBITDA, and these are import substitute products. Is this a contractual product and we are the, you know, second supplier or something like- These we'll have anchor customers. We won't get into discussions right now about contractual agreements and this that, but we will have anchor customers. Okay. The second question is on the expansion on the chlorination, photochlorination side. You know, if you can provide, you know, some more color in terms of the products and, maybe the industry and, you know, also on the plant commissioning timeline. Yeah, sure. To answer your last question first, you know, the plant commissioning will be over the next 15 months, but it'll be less than that. I think for these plants, it'll be over the next 10 months or so. Nonetheless, with regards to products that we are getting out first, these are products where there is already an existing market, including the Deepak Nitrite. Part of it will be self-consumed, and part of it will be sold outside. This is actually photochlorination. The way that we are doing it is an extremely tricky and challenging process which requires a very high degree of technical competence. Along with that, we have also the chlorination setups that we had, that we're putting in. These are what you would call up-engineered setups. While they can manufacture the base, the products that we are tying up immediately, they also have the capability to manufacture far more complex molecules which require very different environment, whether it is in kind of pressure or temperature or material construction. Between these and you know unit processes that we are putting up in Dahej, whether it is you know processes like diazotization or nitration or reduction, which we are already competent in, there are actually a range of molecules that we are getting into by considering these as platform technologies. We've made these plants relatively multipurpose. We are starting off by consuming partially the output as well as selling it in the market. We are working with customers in order to supply them smaller, higher value of intermediates using these plant processes. Okay. Just last clarification on the, you know, insurance claim side. Have we accounted anything, a lot of profit amount in the current quarter? No, we have not. Okay. Thank you. All the best. Thank you. The next question is from the line of Rohit Nagraj from Centrum Broking. Please go ahead. Yeah. Thanks for the opportunity. First question is, in terms of the new segment, Advanced Intermediates, is it possible for us to give what would the volume growth on a year-on-year basis? Actually, this is not a new segment. This all we had three segments, but it was creating a lot of confusion because our products are such that it's fine. It's our own integrated products. The chemistries are similar, so over a period of time, the plants are also multi-product plants. It was creating more concern. We have merged those two segments into one segment, which is called Advanced Intermediates. Right. Just wondered out of this 33% year-on-year growth on the aggregated segment, what was the volume growth on a year-on-year basis, if possible? Volume growth would not have been substantial in Q1. Maybe Q1, there was an incident of fire. Exactly. I mean, our top line certainly has grown. I mean, for this quarter we were impacted because of the fire incident. One of our larger sites was not operational for pretty much the entirety of one month and some in. We have some impact of fire, because Deepak Nitrite is not running at full capacity. As Maulik explained in his speech. Right. Effectively, the entire growth has come because of the pricing, which has improved over the last one year. Pretty much. Yes. Right. Now, sir, the second question is, just again harping on the project. We have indicated INR 1,500 crore projects over FY 2023 and FY 2024, out of which you've already explained INR 700 crores in Deepak Phenolics for solvents. About INR 200 crores in Deepak Chem Tech, which has already been invested. Out of the rest, say INR 600 crores, where all this will go? I mean, partly it will go into brownfield expansion of Deepak Phenolics. What will be the other part, which will go into other segments, sub-segments? Thank you. It has various CapExes in that. One is brownfield, of course, debottlenecking of Deepak Phenolics. It has backward integration of Deepak Nitrite's few of the products. There are some debottlenecking capacity expansion. As explained in our speech, we are creating value out of waste. There is a CapEx on that also. It comprises of several CapExes which will be. In fact from next quarter or maybe quarter after that, you'll start seeing the numbers and results of each one delivering on whatever we have said. You know, the bottom line and this you will see from Q3 onwards, that each quarter we will have some project commissioned there out of this INR 1,500 crores. Right. Got it. Just one clarification. In the initial remarks you mentioned, in Phenolics, 25% of volumes are contracted and, in other businesses, 40% of volumes are contracted. Is that right? In case of nitrite, about 40%. Value, not the volume. Yeah. Because when you say volume, it comprises of several products. It's the value which is contracted. Okay. It is on value basis. Yes. Yeah. Right. Thanks a lot, sir, and best of luck. Yeah, thank you. Thank you. The next question is from the line of Nevil Vora from Axis Capital. Please go ahead. Opportunity. Just, two, three clarifications. One is on, we are saying that we are proposing to add new capacities of our key raw materials. Which raw materials are these and whether they'll be in Phenolics or they'll be in Nitrite? We don't go into those details. What I said is that we are ensuring that between upstream integration and downstream integration, we have investments, as I mentioned, in both, where we will be looking at de-risking part of our supply. We continue to be present in the market as customers, and we see what we can do to de-risk ourselves internally as well. Sure. On the brownfield expansion of select products, these will be phenol, nitric acid on 25%, which we are saying, they are also in our Nitrite section as well as in sodium nitrite, sodium nitrate? Yeah, yeah, both. It is in sodium nitrite also. Okay. One last question. Since we are seeing that our sodium nitrite and sodium nitrate capacities are operating at, you know, 50% capacity right now, I feel the downstream of this might be going in our fine and specialty chemicals classification. Is that segment as well affected and that will also see a gradual ramp-up in next two to three quarters? How does this go? In that, other segments will not be impacted. We'll ensure that other segments run as per the requirement and as per the capacity. That won't be affected. Sure. Thanks. That's all from my side. Thank you. The next question is from the line of Krishan Parwani from JM Financial, please go ahead. Yeah. Thanks for the opportunity. I have two questions. One is, that you need roughly about 8,000 tons of MIBK for 8,000 tons of MIBC, more or less. External MIBK could be 30,000 tons. Is that correct? MIBK is 40,000 tons. MIBC is 8,000 tons. These are all external sales, you are saying? No, we have to check on it. This is This is a capacity built up and as Mr. Upadhyay and Mr. Maulik said, these are all import substitute products, so there will be all market sales. No, I meant is that to make 8,000 tons of MIBC, you would need 8,000 tons of MIBK. Yes, yes. Correct. If your capacity is 40,000 tons of MIBK, then external sales at, let's say, 100% utilization could be 32,000 tons for MIBK. Is that correct? Okay, fair enough. Thank you. The second question is on the other products in that Phenolics scene. Are you also planning BPA and ethylene glycol? Or, and what about BPA and cyclohexane? Until we tie everything up and we announce it would not be prudent for us to discuss specifics about products which have not yet been announced. Just to follow up on that, sir, is that so whatever INR 700 crore CapEx that you're mentioning would be coming over, let's say, next 15 months? The other products are not part of this CapEx, or are they part of this INR 700 crores? Beyond what we have said is not a part of this CapEx, because we already said whatever CapEx we have already, and it's lined up. Okay. Fair enough. Thank you so much. Thank you so much, and wish you all the best. Thank you. Thank you. The next question is from the line of Nikunj Somani from Fortune Capital. Please go ahead. Yeah. Thank you for the opportunity. I have two, three questions. First, my question is about the market size of Phenol and how it is growing. You're asking about Phenol? Yes. Yes, Phenol. Okay. There is a separate answer to that with regards to India and a separate answer with regards to the world. In India, which is largely dictated by, you know, end segments like construction, infrastructure, pharma, auto, there is certainly, you know, the visibility of a reasonable, demand resurgence because the last couple of years were, more uncertain with, you know, things like COVID and, you know, global uncertainties. In India, by and large, there is generally a slightly improved, temperament. That said, worldwide, there is, you know, because of what is happening in Europe, for example, you know, intermittent, COVID outbreaks in China, there is certainly a disturbance that is taking place. Now, what happens in India doesn't really it cannot just be handled by what happens in India because there is a significant import as well. As there is a gap sometimes where the producer, the production capacity, the effective production capacity is more than the effective consumption, you will have prices that may be on a declining trend for a period of time. If you see that there is a higher demand than production because of, again, a mismatch, then you will see an increasing price trend. One way or another, this will come to India. It is certainly a little bit mitigated because of, you know, things like the dollar rupee hedge or the amount of time that it takes to travel from wherever in the world to India, you know, all of those things. Those are the areas where Deepak, along with its operational expertise, is able to take advantage of. Nonetheless, this is one of those points where we are seeing such volatility globally that whatever answer I give you right now may turn out to be absolutely not true just two months or two weeks from now. Yeah. Got it. My second question is about how you choose your new products and what is your new product line other than the one you announced in AGM? Let's start with the ones that I announced. Yeah. Yeah. We are seeing from both Deepak Nitrite, Deepak Phenolics, an opportunity to go both upstream and downstream, which we are exercising. We've announced already INR 1,500 crore of ongoing projects. In addition, we have also today announced that we are, you know, we are on the engineering stage of, you know, molecules that will be consumed in the pharma space, import substitutes and, you know, which will have a 20%-30% EBITDA. Sure. Any more, on this, whether it is with regards to CapEx and top line and all of those things, it is slightly premature, but we will definitely get back to you at the right time. Thank you. I would request Mr. Somani to rejoin the queue for follow-up questions. Anyone who would like to ask a question, you may press star and one. The next question is from the line of Deepak Mehta, an individual investor. Please go ahead. Yes. Hello. Good Good morning, sir. Thanks for the opportunity and great set of numbers. Sir, my question is around due to this European energy crisis, do you see this trend will benefit our company? Sorry to interrupt you, Mr. Mehta. Your voice is breaking up. We cannot hear you very clearly. Hello? Yeah. Yes, sir. Yeah. Due to this European energy crisis, do you see any benefits for our company in the short term and long term? If there is any, you know, demand shift from Europe to India and it's getting benefit for our company products and demand there. See, that's a very ephemeral question. If I'm being very honest, while there are opportunities, there are certain things about Europe which one has to appreciate that while energy costs are extremely high, they're also facing a severe drought situation, which is making it difficult to move our products within Europe through its existing waterways. Over and above that, there is generally speaking an expectation that this will at least continue over the next three to five months because of its own energy crisis. While one can construe opportunities out of this in the short term, it's prudent to you know take advantage when advantage is there, but not expect that this means that tomorrow the European chemical industry is done. No, it has its own challenges. It is doing its best to work through them. As and when there are opportunities, we certainly are seeing an increase in inquiries. Yeah, we will play our cards right from that perspective to ensure that we take the best value both for the existing markets that we have. Over and above that, if there is any additional demand coming from customers who would otherwise have consumed European feedstock. You also have to keep in mind that if European feedstock is affected, so may European consumption. At the moment, we are continuing to see, you know, satisfactory commentary coming from our customers even in Europe, but it is a dynamic situation. As of right now, we will, you know, continue to feel encouraged, but it's a wait and watch. Thank you. The question is on hold till we join the queue. The next question is from the line of Shubham Ajmera, an individual investor. Please go ahead. Shubham Ajmera, an individual investor. Please go ahead with your question. Hello. Am I audible? Yes, you are. Yeah. I just wanted to have any update on the QIP, like when we'll be planning to raise the money and the segment in which we'll be utilizing those money? QIP, we just had an equity resolution because of the market conditions and thus we are, I mean, we will launch as and when required. Frankly, today it is not required, and today, I mean, market conditions are also not very favorable. We'll have to wait for some time. Okay. My second question is on the exceptional line items in our P&L during Q1. Is my understanding right that we booked the loss due to fire of INR 47.20 crore in exceptional item, and we also recognized the income with the same amount. Our net impact is nil in the exceptional item. That is the right understanding, yes. We have booked the extent, what we have written off as a part of insurance claim. Our claim is on reinstated value as well as we hold a LOP policy also, but that is not yet recognized. As and when claim progresses or there is any further development, we'll see what to do. I think the survey of insurance company is still ongoing, so have you received any confirmation for this INR 47.20 crore as well, like, since we have recorded this as an income as well? Of course. I mean, confirmation in the sense that there is a policy existing. It's a contractual business. Survey is already going on. Based on whatever information they give us, we have rebooked the income. Thank you. We'll take one last question, which is from the line of Rohan Gupta from Edelweiss. Please go ahead. Yeah, hi, sir. Thanks a lot for the follow-up. Sir, just couple of very quick questions. One is on the current spread. We have seen that the Phenol prices have continuously coming down while the Benzene has yet not started correcting. I think that in month of June, there was a significant pressure on margin. Do you see that this may impact our Phenol business profitability in the Q2 and in near term? Rohan, can I ask you to get in touch with Mr. Somsekhar Nanda. He will explain to you separately. He has a hard speech that you won't understand anyway. Okay. Second, just second question on this. If only there is any question, you can further ask Mr. Nanda, that will be better. Okay, sir. Thank you. Right, Rohan. I'll be in touch with you. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments. Thank you all for joining this call. For any further questions in this, you can address this to our investor communications or Mr. Somsekhar Nanda. They will be answering whatever questions you have and clarifying. Thanks so much. Thank you. On behalf of IIFL Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.