Ladies and gentlemen, good day and welcome to the Gujarat Fluorochemicals Q2 FY23 earnings conference call hosted by Batlivala & Karani Securities India Private Limited. As a reminder, all participant lines will be in the listen-only mode, and there'll 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 and then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Arpit Joshi from Batlivala & Karani Securities India Private Limited. Thank you, and over to you. Thank you. Good evening, everyone. On behalf of the BNK Securities, I welcome you all to the 2Q FY 2023 earnings conference call of Gujarat Fluorochemicals Limited. I would like to thank the management for giving us the opportunity to hold this call. From the management, we have with us today Mr. Vivek Jain, Managing Director, Dr. Bir Kapoor, Chief Executive Officer, Mr. V.K. Soni, Head of Projects and New Initiatives, Mr. Manoj Agrawal, Chief Financial Officer, and Mr. Vibhu Agarwal, Head of Investor Relations. Without further ado, I would now hand over the floor to Mr. Vivek Jain for his opening remarks, after which we can have the floor open for a Q&A round. Thank you, and over to you, sir. Thanks. Thank you very much, BNK team. On behalf of Gujarat Fluorochemicals Limited, I would like to extend a very warm welcome to all of you. We are happy to inform that Board of Directors of Gujarat Fluorochemicals Limited had its board meeting, approved the financial results of the company for the quarter and half year ended 30th September 2022. The financial results were uploaded on the website of the stock exchanges as well as the website of the company. We have also uploaded the earnings presentation for FY 2023. I will take you through this presentation initially, and then we can open the call for any questions that you all might have. Starting with the financial highlights at the consolidated level for the quarter ended 30th September 2022 on YOY basis. The consolidated revenue for Q2 FY 2023 was at INR 1,461 crores, up by 52%. Consolidated EBITDA for Q2 FY 2023 was at INR 536 crores, up by 81%. EBITDA margin for Q2 FY 2023 was 37%, up six basis points on YOY basis. Consolidated PAT for Q2 FY 2023 was at INR 357 crores, up by 74% on YOY basis. If you look through our detailed overview of the financial performance during the quarter for each of the business verticals in which we operate, in Caustic Soda, the Caustic Soda revenue for Q2 FY 2023 stood at INR 189 crore as compared to INR 102 crore in Q2 FY 2022, up 85%. Fluoromethanes revenue for Q2 FY 2023 stood at INR 80 crores as compared to INR 122 crores in Q2 FY 2022, down by 34%. Refrigerant revenue Q2 FY 2023 stood at INR 268 crores, which was at INR 92 crores in Q2 FY 2022, up 191%. PTFE sales for Q2 FY 2023 were at INR 443 crores as compared to INR 360 crores in Q2 FY 2022, up 23%. The new fluoropolymer sales were at INR 341 crores, up 87% as compared to INR 182 crore in the same quarter previous year, that is Q2 FY 2022. The specialty chemical sales is up by 75% from INR 65 crores to INR 114 crores. Similarly, on the ROCE and ROE front, the ROCE is improved from 24.46% to 36.88%, and ROE is improved from 20.10% to 29.05% as compared to FY 2022. On the debt front, company's remains virtually debt-free with a net debt equity ratio at 0.3. The working capital cycle, which got improved significantly during the last quarter, maintained in this quarter also at the same level, you know, of 119 days as compared to 120 days as on 31st March 2022. On the big CapEx and expansion side, the additional capacities commissioned for FKM, PVDF, FEP, PFA during the quarter are under stabilization, and sales are expected to ramp up from Q3 FY 2023 onwards. Similarly, on the specialty chemical front, commissioning of new specialty chemical plants, which were actually originally planned in Q2 FY 2023, got spilled over to Q3 FY 2023. These are now commissioned and expected to gradually ramp up production in upcoming quarters. We expect with all these companies poised to offer a sustained business growth with superior financial performance. With that, ladies and gentlemen, is the walkthrough of the presentation. I would like to open this up for any question that you might have, which we'll try to answer. Thank you. Thank you, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may 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. We have the first question from the line of Sanjesh Jain from ICICI Securities. Please go ahead. Yeah, good afternoon, sir. Thanks for taking my question. A couple of them. First, on the refrigerant gas side, despite 2Q being a very seasonally weak quarter, we see that the revenue growth has been quite strong. I think some of it is R-125, but overall, we thought that this could be more of a softer quarter, but it looks like it has done phenomenally well. Can you help us understand what's driving the growth in the refrigerant gas, even in the very weak seasonal quarter? Is it the shortage of the product? Is it that in seasonally weak quarter, they are getting slightly better pricing than what it will be in the seasonally stronger quarter. What is driving this unusually high growth in HFC? See, Sanjesh, as you know, as far as the main growth is coming from R 125, where we are largely exporting to the U.S., and we have had orders which were, to be executed, during this quarter, which is what we were able to, fully execute. That is the reason why the sales are there. I think that this is, a pattern which will, continue in the, future quarters also. You know, maybe there might be a dip for a month somewhere, but, you know, otherwise, by and large, quarterly performance should be fairly robust. But I- R22, of course, again, July, August, September sales are still not so much down from a seasonal point of view. There is some impact in October, November, December, for sure, but July, August, September is normally, you know, good sales for refrigerants. No, but I think R 125. Now, where are we in terms of capacity utilization in terms of production and sales? Do you think these prices in HFC, particularly R 125 and R 32, are they now stabilizing, going up, or have they shown any sign of weakening at any time now? No, I don't see any signs of weakening. I think they will stabilize at this level now. You know, the prices should remain stable. That at this point of time, that is what I can say. I don't see any substantial upside or downside on these prices. We thought that the R 125 prices went up partly because of significantly higher power costs, freight costs, and all those things. Some of them have already started showing some correction. Are we not seeing some of those benefits getting passed through, or it's purely the demand supply which is driving the prices in the R 125? See, largely demand supply, but also then, you know, customers will also negotiate, always negotiate to try and see that you can bring down your prices given the fact that there might be some reduction in some costs, like logistic costs, et cetera. You know, what you're saying is maybe the difference, it could be ±$1, $1.50, not something significantly more than that. Great. Second question on the new fluoropolymer. Sequentially, it was flattish. While we have added capacity, two questions there. Can you help us with what has been the capacity addition in the new fluoropolymer for this quarter? Yeah. Sorry. Number two is, despite capacity addition, I know we said that we are stabilizing the plant. From Q3 onwards, should it start adding materially to the revenue growth? Yes. From Q3 onwards, maybe from fifteenth November onwards, you know, the two new additional reactors which we are commissioning for FKM would start coming in, and we should see additional sales happening in December. From January quarter onwards, I think the full benefit of that capacity expansion will be evident. What is the capacity we have added in? In FKM we are adding 200 tons per month additional. In PVDF we are adding another 100 tons per month, which will come in line by maybe about January next year. It will be commissioned January next year. There is some additional capacities which we are commissioning in PFA, for which also the product out will be from January onwards. Have you added anything in the first half? Sorry? In the last two quarters, have you added any capacity in FKM, PVDF and PFA? In Q1 and Q2. We had added capacity of almost, I think, about 200 tons in April also, April, May, which you know where you saw that bump up in FKM sales happening from the quarter April to the last quarter. ten ton. Sorry. We were 800 metric tons when we ended FY 2022. No, we were 700 tons, Sanjesh, when we ended that, and we guided that we'll be 1,500 by end of this year. The addition will keep coming through the year. We have added some capacity. Today, we would be at around, say, roughly about 900 or 1,000 tons, adding another 200-300. By end of this year we'll be at 1,500. That is how we should look at it. Got it. From 700, we are already at 900-1,000, and by end of this fiscal year, we should be at 1,500. That's an assumption we should take. Yeah. Close to 1,500. Yeah. Well, give or take, you know, one month here or there, because, you know, there is sometimes always some delay or the other which takes place in commissioning. So give or take one month, I think we should be there. That is what we are targeting. Got it. How have been the real- The ramp up of production and sales from there could happen over the next six months thereafter. No, that's fair. That's fair. We understand that it takes time, say, for stabilization, approval, audit and all. Yes. Yes. Yes. On the realization side. Sir, we request you to kindly come back in the queue for follow up questions. Great. Thank you, sir. Thank you for answering all my questions and best of luck. Sure. Thank you. We have the next question from the line of Harsha from L&T Mutual Fund. Please go ahead. Thank you and good evening, gentlemen. Just two questions from my side. First is on the margin side. Our margin in this quarter also was very impressive. All the prices are also holding up quite nice. Entering H2, where do you see the margins going to? Will it stabilize at 36% or you think with the ramp up of further new capacities, there's still some room before we end the year? See, you know, frankly speaking, it is difficult to say. You know, as we have maintained earlier, we will even with our expanded capacities, etc., which are coming up, we should be able to maintain a margin in excess of 30%. That is for sure. Understood. That is what I had stated even earlier. You know, we were at 31%-32%. I think the, you know, our margins will remain upwards of 30%. Whether that will remain at 36%, whether it go down to 35%, go up to 37%, it's difficult to extrapolate at this point of time. Okay. Just second question from my side. For at least this quarter or this half of the year, can you please help me understand the breakup of our growth, between how much of that was volume driven and how much of that was value driven? I don't have the numbers here just now, but do you have the numbers? Sir, it is equal mix of both volumes and we have got relatively number of products. It's fair mix of both volume as well as price growth. We have got good prices in bulk chemicals and good growth in the new polymer and the polymer business. Okay. Basically for this first half we have done a revenue growth of almost 60+%, if I'm not wrong. You think that it is equally divided? Yeah. Sorry, 50% is our revenue growth for first half. You think that is equally divided between volume and value? Yeah. Yeah, volume and value both. Yeah, if you see year-on-year basis, that would not be the right comparison because that 700 tons are coming through the year, which is like commercialized in the first quarter. Correct. Exactly. Actually, that was the reason why I was asking this question to get a better understanding. It's a trend that's gonna follow us, and it will continue to go further up. Understood. Okay, that is it from my side. Thank you and all the best. Thank you. We have the next question from the line of Rohan Gupta from Edelweiss. Please go ahead. Yeah. Hi sir. Good evening, and thanks for the opportunity. A couple of questions. First is on the ref gases from Q1 to Q2. We have seen a remarkable improvement in revenue from almost INR 196 crore to INR 268 crore. It is all in the ramp-up of volume of R125 or we have also benefited any sort of price increase. What is the current utilization of R125, including exports? Yes, of course, there has been a ramp-up of 125 and at this point of time it would probably be at about 70, 75, 80% of capacity utilization. It means that there is further room for improvement in revenues from ref gases only by reaching 200% utilization, right? Yes. Yes. Sir, is there any possibility, given the solid demand environment in R125, and you are also mentioning the solid demand from the export market in U.S., do we have any room for further expansion in R125 in the current? No, I think we have adequate capacity in R125, you know, to cater to the demand which we are seeing in the next year. You know, there is a certain amount of debottlenecking also which is in progress. I think we should be able to meet the demand coming up in the next year. How much is the scope for increasing capacity by debottlenecking further which we are planning? See, it's difficult for me to give you a number, but maybe about 10%-15%. Okay. Sir, in the pricing scenario, you see that remains solid in R125? It appears to at this point of time. I see no, you know, great reasons why the prices will change substantially from here. Sir, do we have also plans to expand our refrigerant gas basket to improve or to cater to some other gases also in blends? We have taken an investment decision to put up a new facility for making of R32 and equivalent capacity for the hydrofluoric acid, which is going to be required for manufacturing this. This is likely to be commissioned by end of first quarter of calendar year 2024. Q1, CY 2024. Yeah. Q4 2023-2024. Okay. Is it right? Sir, any idea on the capacity which you're planning to put in R-32 and the CapEx? Well, currently we are looking at a capacity of 10,000 tons. With the CapEx of? Maybe the CapEx is something which we are still streamlining the numbers, but it should be in the region of about INR 125 crores+. It will be targeting, sir, domestic or export market? Both. Sir, second question is on our fluoro specialty chemicals, where we have seen some slight decline. You had a run rate of INR 119 crore revenue in Q1. This quarter is INR 114. Any particular drop or any delays in some shipments, and how this business vertical is progressing? No, I think it's generally been flat in the last two quarters because, as you mentioned, you know, the new plants which are supposed to be commissioned, there was a delay. Generally speaking, this year, the monsoons in Gujarat have been very severe. A lot of the projects which were getting implemented have got delayed by, you know, one month to four or five months. That unfortunately has been story across the board. Even till a short time back, rains were continuing. That really has disturbed the implementation schedules for many of our projects. The new plants for the new capacities which are coming, which were supposed to have been commissioned in specialty chemical have, as we speak, just now been commissioned. We will see ramp up of this business from these new plants to happen in the next 1-3 quarters. Business growth will start being seen from the specialty chemical segment from this quarter onwards. sir, you are saying that it is constrained by capacity, not from the demand. There is nothing changed in demand. No, no, not capacity. You know, the capacity of new plants which we are putting up, the new investments which we have put up, the plants which were under implementation, because of, you know, because of the monsoon, there have been delays in commissioning. Those plants which were supposed to have been commissioned in the last quarter are actually getting commissioned now in this month. We will see. Otherwise, our capacities, I mean, old capacities are fully utilized. That's what. Yeah, they are by and large fully utilized. Those are for different products. You know, these are for different products. You know, the new capacities we've been talking about are for different products which are now going to be, you know, sort of rolled out. Sir, have you also witnessed any increased traction in your fluoro specialty chemical business given the crisis which you are seeing in Europe related to energy? Not really. We have not yet seen anything substantial for that reason in the fluoro specialty business. In fluoropolymer? Well, fluoropolymer also, I mean, the demand of course continues to be good, but that has yet not been impacted by anything which is happening in Europe. As I mentioned earlier, we have a diverse, you know, we are across diverse geographies. What happens is if particular geography is slightly down, we have seen that we have the ability to make that up in the other geographies. We can push more quantities in other geographies, and this has been the case up to now. Even if there is some you know, weakening in demand in a particular geography, we hope that we will be able to more than overcome it by shifting products to other geography. But we have a very wide variety. One, you know, the range of products as well as the customers. We have a very diverse portfolio of customers. For us to you know sort of shift some quantity from one geography to the other is practically feasible. Thank you, sir. Will come back and give for follow-up. Thank you. Thank you. We have the next question from the line of Aman Vij from Astute Investment Management. Please go ahead. Yeah. Good afternoon, sir. My first question is on the new age fluoropolymers. If you can talk about the number of customers we are engaged currently with PVDF battery grade and PFA semiconductor grade, as well as when can we see some revenues coming from these two new products? You know, both in all our fluoropolymers, we have multiple customers. You know, at this point of time, for me to give an offhand reply on how many customers we have in each segment is going to be difficult. Coming to EV grade, battery grade, you know, as we have mentioned that, you know, the grades have been developed, the grades have been sent for qualification to certain customers in South Asia and one or two laboratories in India as well as in Western Europe. The process of, you know, it is a fairly lengthy process of evaluation and testing and evaluation, which is currently ongoing. We expect that in the January-March quarter, we should be getting feedback from some of the customers to whom test samples have already been sent. We can perhaps start commercial business from the second half of 2023, after the qualifications are over. For semiconductor grade PFA? Semiconductor, there will be a range for various applications of PFA. We are again for the semiconductor range. Our samples have been sent to customers for their approval. We have done our own internal checks, and we find that the quality is meeting their requirements. Typically in situations like this, if there is some quality parameter deviation which is noticed by our customers, they point it out to us. That is something which we then work on at our plant to rectify that and send the samples back again. It's a bit of a back and forth which takes place. I think PFA in the next 1-2 quarters, we should be able to have qualifications for applications in semiconductor also. Just now, even for other applications, the demand is very strong in PFA. Sure, sir. My next question is if you can update us on the solar film plant as well as LiPF6. LiPF6 plant is currently under construction. As we have said, we are expecting by, again, first quarter of the next financial year, which is April, May, June, that plant should be commissioned, and we'll be able to send samples across to customers for their approval. Once that happens, then we can start commercial production. The plant is under implementation at this point of time. Solar film? We are hoping that mechanically the plant should be commissioned by February next year. The solar film plant also, if you can talk about. The solar film facility will be ready by June next year. Sure. The final question I have is on the realizations of FKM, PFA and PVDF, if you can talk about the same currently? Well, you know, the realizations continue at this point of time. We have to see what happens in the next few quarters. You know, that's, I mean, it's difficult for me to say at this point of time again, what will be the scenario. I think at FKM the demand is fairly strong for our products. You know, I've been mentioning that we have developed so many grades of the PFA now, which have been completely qualified by diverse customers in Europe and U.S. and even in Japan, of course, also in India. You know, the demand is, that is, demand continues to be strong. We don't have too much of an issue on the pricing at this point of time. PVDF also, the demand is strong, and we hope that by the time we commission our second reactor, which will happen in January, we will have enough qualified customers to quickly ramp up the capacity utilization of that reactor also. Prices more or less. Any range you can give of these three products, sir? Range of these prices over the last one quarter. FKM would be, say about, $28-$31, $32. PVDF would be a similar range, about $30, $28-$30. PFA would be something like about $33, $33-$35. Sure, sir. That helps. This is it from my side. Thank you. Thank you. We have the next question from the line of Garvit Goel from InvesQ Research. Please go ahead. Hello. Good evening, sir. Am I audible? Yes. Okay. Awesome. My first question is, for last 5 quarters, it is great to see there is a continuous growth in the top line and operating profit margins are also consistent. Can you please summarize the key drivers behind the same and how these drivers look like to continue in the medium term, say, next 1-2 years from now? My concern is to ask this question because I simply want to know, as our bulk chemicals has been significant contributor, and in last 2 quarters there is a significant growth in ref gas as well. This growth, and we know that, there has been a rally in caustic soda prices as well. Can you please explain the future viability of this growth that we saw in last 5 quarters? Well, in terms of volumes, our growth is going to come up largely from polymers, fluoropolymers, which is, you know, mainly from the new fluoropolymers and from the battery chemicals, which we start commissioning from the first quarter of the next financial year from April, May, June. Once that is where the real growth in the future will come. The other, of course, is the fluoropolymers. Other fluoropolymers will continue to grow because they find utilization, you know, there are multiple uses of different fluoropolymers in the entire EV battery ecosystem. Later on, of course, you know, in the electrolyzer hydrogen fuel ecosystem also. Okay, that's good. Sir, what is our top line and bottom line guidance for next 2-3 years? How operating margins going to shape up for the same period? I'm sorry, won't be able to give that. You know, we normally don't give futuristic guidance. Okay, understood. Sir, you were talking about some R32. What is the size of opportunities and how we are looking at this thing? No, I just mentioned that we are putting up a 10,000-ton plant, and we hope in the next, after the plant is commissioned, in a year or two, we should be able to get it to full capacity utilization. You were mentioning that it will be commissioned by the end of financial 2023. Yes. 2023-2024. Yeah. Maybe by March 2024. Yeah. Okay. Understood. March 2024, you are saying? Yeah, March 2024. Okay. Yeah. Understood. Okay. Understood. Thank you, sir. Thank you. That's all. Okay. Thank you. We have the next question from the line of Nitin Agarwal from DAM Capital. Please go ahead. Hi, sir. Thanks for taking my question. Just on the new fluoropolymer business, on a QOQ basis, is it fair to assume the volumes have been flat on a QOQ basis in terms of our sales? Yes, because the fact that we were not able to commission new capacity in time to be able to build up volumes in the July-September quarter. Sir, you know, on the capacity that we've already installed and commissioned, are we operating closer to peak capacity in those installed capacity, commissioned capacity, the new fluoropolymers? Yeah. By and large, above 75%-80% capacity in the last quarter again, because since we were in the process of commissioning these new additional capacities in PVDF and FKM, there was a shutdown which had to be taken for our backward integration plant, which is VDF plant, for hooking up. That has been done. That shutdown which was necessary for hooking up has been done. Now as soon as these capacities get commissioned in this quarter, as I mentioned a few minutes back, in about 200 additional tons from end of November onwards this year, and PVDF from January of next year, we should see these additional volumes kicking in. Okay. Sir, secondly on, does the ref gas sales component also include some sales of R-142b gases also? Sorry? The ref gas, does it include R-142b gas sales also? Are we doing some of that third-party sales also? No, that doesn't include anything on R-142b. Sir, is there a plan incrementally to do that, going forward? See, this is something which we constantly evaluate. We look at both our own internal requirements and internal availability. Our first priority is to ensure that we have enough R-142b available for our own internal capital consumption, which is for FKM as well as PVDF. In both these two areas, we are expanding capacity, as I just mentioned. You know, after those capacity expansions are over, which will be during this quarter and January next year, we will then have to see what is the quantum of R-142b which will be available for our surplus for sale outside. If the prices are good, then only we will sell. Otherwise, we will not sell. Okay. Thank you. Thank you. Participants are requested to kindly restrict your questions to two per participant. We have the next question from the line of Vivek Gautam from GS Investments. Please go ahead. Yeah. Congratulations on good set of numbers consistently coming after one quarter after the other. Sir, a few question was, your sister company, Inox Wind, told me you had extended loans and other things. Some positive figure is happening in that particular wind energy sector so as to and the IPOs are coming out will help, will it help in reducing our old loans and related party transactions would also come to full stop? Yeah. I think on this issue, I stated a number of times, by March, by the end of this financial year, most of the related party transactions will be completely dealt with. And as you rightly mentioned, there is an IPO which is coming up in Inox Green, and the promoters have also committed to something about, you know, INR 800 crore into Inox Wind, essentially for repaying the loan which has been taken from GFL. By end of this financial year, the intention is to completely square off all these transactions. Sir, what has been the impact of the current Ukraine war, Russia war, positive or negative for us? Export getting impacted, freight costs also coming down, any impact? What is the opportunity size and growth rate in the next two, three, four years, sir? Thank you. To some extent, it has helped in caustic soda where, because of higher energy prices in Europe, there is an export demand which has come up. It has helped us in shoring up caustic soda prices. As far as polymers are concerned, at this point of time, it's a bit too early for us to say anything. As I mentioned, even the U.S. market and the domestic market, of course, are doing well, and also the Japanese market. If there is some slowdown which comes up in Europe, that slack can be picked up by the other geographies at this point of time. Unless, of course, every geography is impacted by a recession or something, then I suppose I can't say anything. As it looks like, if there is some impact and, you know, there's been talk about recessionary concerns in Europe, if that hopefully that impact could be mitigated by growth in our other geographies. The opportunity size and expected growth rate in the next few years, sir, if you have a few words. you know, as already been mentioned, we are expanding our capacities on new fluoropolymers in FKM, PVDF, PFA, et cetera. These will provide future growth possibilities. As the EV battery manufacturing commences in India, Europe and U.S., I think that will be a very big opportunity for us to sell our EV battery grade PVDF, as well as other fluoropolymers also which are required in the entire battery ecosystem. Okay, sir. Thank you. Keep up the good work, sir. Yeah, sorry. Thank you. Hello? Yeah. We have the next question from the line of Dhruv from Newbury Capital. Please go ahead. Hi, good evening. Thanks for the opportunity. Two questions. About PTFE and FKM global supply scenario, have you seen that, have you come across that there is a supply shortage in these two categories? Because I have come across two documents indicating automotive are getting force majeure from the suppliers in the Europe region. How is the supply scenario in these two fluoropolymers? There have been some supply constraints in U.S. and Europe for reasons of raw material disruptions. Despite that, the fact that our sales are robust is also because of the fact that there's not too much, in fact, barely any new capacity which has come up in Europe and U.S. for PTFE and FKM. The growth which is taking place is the one which is also creating some supply imbalance. We will be able to capture that supply imbalance if we have that variance at our end, right? Yes, that's right. That is why we are investing in additional CapExes. Understood. Second question is about cash flow conversion. I understand that we are going through CapEx and the measure of the funds will be blocked into the inventories. What's the PAT to CFO conversion that we internally track, and at what level we will be able to take it further? Sorry, your question is not clear. Can you repeat, please? PAT to CFO conversion, at what level do we track it internally and at what level we would like to have it? sir, see, currently we don't have any specific target on free cash flow versus PAT because normally we are in a growth phase and our working capital quantitatively will increase as soon as the growth increases on the sales front. Similarly, we have got number of CapEx targets. We have to see that. So- Based on that, our free cash flow will be fully utilized in either feeding the own working capital or the CapEx requirement. By and large, what we are trying to ensure is that all our future growth takes place from our internal generation and not by external debt. Understood. That's great. To the extent that there is room for us to grow, put in new CapExes, we will continue to use our cash generation for that purpose. Understood, sir. That's great to hear. That's it from my side. Thank you. Thank you. We have the next question from the line of Anand Jain, an individual investor. Please go ahead. Congratulations on a great set of numbers, sir, and thanks for the opportunity. My first question is, around two quarters back in the call, you had indicated that, you know, we are going to make a few changes which should actually result in large power cost savings for us in FY 2024. You did not give more details about that, but would you be able to share some details in terms of the quantum of saving that we are looking at? What mechanisms are we going to use to do that? See, at this point of time, again, we are freezing our alternative supply arrangements. You know, I would not like to talk much about it at this point of time till that has actually been done. That is progressing very well. As I mentioned, after maybe about, once we have completed that in 18 months' time, we will have that additional power coming in, which will be at a fairly far more reduced prices than what we are paying at this point of time, either to the grid or for our own captive generation. Okay. The question is more like, you know, is it like internal heat recovery or is it going to be like renewable? No, I think we are tying up for additional power through a different source. Okay. It will significantly reduce our power costs. The second question is, you know, in terms of fluoropolymer capacity, you said that by FY 2023 end, we would have 1,500 tons of specialty fluoropolymer capacity. How do you think this will ramp up by FY 2024? I think it'll take about 12 months for all those capacity to be completely utilized. No. In the sense that new capacity addition by FY24 and between 20- I'm talking of new capacity addition, maybe, up to 12 months. I mean, it will be a ramp-up process. You know, we'll. Maybe, perhaps, by the end of the financial year, we hope that the entire incremental capacity will be converting into sales. No, I mean, creating new capacity in FY 2024, not the ramping up. Ramping up is very clear that FY 2023 capacities will ramp up in FY 2024. Creating new capacities in FY 2024 for specialty fluoropolymers. Most of this new capacity increase is likely to come in from two quarters. One is the debottlenecking of the PTFE capacity, which is currently on cards. Secondly is additional, the you know capacity which we'll be putting up for PVDF for use by EV battery manufacturers. That real demand is going to start coming from beginning of 2025, from January 2025, by which time we will put up additional capacities during the calendar year 2024 to cope with that additional demand which will come in from 2025. There will be additional increase in capacities. There'll be a debottlenecking which is going to take place in our PTFE plants. That will increase further capacities, and we will be putting up some additional capacities in PFA. What is this additional capacity going to be? In PFA, maybe by March 2024. Can you just repeat the capacity, additional capacity in PFA and PVDF that we're looking to put up in- By March 2024 we'll put up additional capacities of PFA. We will put up additional capacities of PVDF. Sorry? The quantum in terms of tonnage. Like, we'll end up 2015, 2023 with 1,500 tons. In 2024, what will we end up with? We by end of March 2024 expect to double the capacity of PFA. Okay, sir. Like this INR 1500 will go to INR 3000, if I get it right? Yes. Oh, okay. 3,000 tons per annum or per month? No, no, it's not 3,000. It'll be about 2,400 tons. No, that is only for PFA. I'm asking overall for all the fluoropolymers. PVDF will be much larger. Actually, PVDF we have to watch and see how the progress by commissioning of new battery capacity is there. Whether we put up, how much reactors we put up in 2024 will be dependent upon that. That is a continuous process. We will keep on putting up additional capacities of PVDF. The more, you know, as we see demand coming up, we'll keep on putting more reactors because in any case, the backward integration piece is all done. The putting up PVDF capacity is modular. We, in six months' time we can put up, you know, a reactor. Depending upon how the battery manufacturers commission their capacity, we'll keep on adding more capacity for PVDF. Great, sir. One last just minute squeeze in, which is like, you know, sir, looking at all this, we are currently doing this, everything in our integrated complex. Do you think that, you know, we are looking to have plans for a much larger CapEx and in a new complex altogether. Do we have any plans of similar nature? We plan to do it. You know, the future expansion which will take place will have to be done in a new complex because, you know, we will be soon running out of land in our, you know, in our current new complex. We are already in the process of selecting and finalizing additional land where we will house our, you know, CapExes coming up in the future years. Great, sir. Thank you and all the best. Thank you. Thank you. We have the next question from the line of Rohit Nagaraj from Centrum Broking. Please go ahead. Yeah. Hi. Sir, first question is in terms of Q3. So is there any seasonality factor due to holidays in Europe and US and that might impact, you know, some demand for some of the products which are going to that geography? Thank you. Yes, it could. I mean, yeah, because you know, the December month typically in Europe and U.S. is muted. We are, you know, traditionally, you know, the October, November, December quarter is a bit slower than other quarters. You know, the pace of business starts picking up till again typically from January quarter onwards. All right. Sir, second question is in terms of the CapExes. As I understand, earlier we had guided for LiPF6 by Q4 of, I mean, end of 2022, but now it's got delayed by a few months. Across the board, are the delays primarily because of the heavy rains in Gujarat and that's why some of the CapEx which was there earlier planned for this year has got shifted to next year? Yes. That's right. All right. Sir, just one last clarification on the wind power project. I understand last quarter we had indicated that 20 megawatts will be commissioned in Q2. Any progress on that? Yeah, yeah. We have already sought certain permissions which are underway. We expect in this quarter we'll have those permissions. We are trying to put, we have you know sort of there's been a change in plan. We are putting up this addition, this new capacity we are talking about in an EOU, because putting it up in an EOU gives us certain advantages, both in flexibility of using the power as well as some indirect cost benefits. That process of getting the EOU clearance is on. There again, you know, as it so happens, there are delays in getting the governmental approvals, but we hope that shortly we should be able to get that. Before the end of the year, in any case, all that will be commissioned. All right, sir. Got it. Thank you a lot for all the answers and best of luck, sir. Thank you. Thank you. We have the next question on the line of Mihir, an investor. Please go ahead. This is the operator. Can you hear us? Yeah, we can. Mihir, you can go ahead and ask a question. I think Mihir is not there. We can move ahead. We have the next question on the line of Dhaval Shah from Girik Capital. Please go ahead. Yeah. Hello. Congratulations on the great numbers and, you know, the great visibility of growth going forward. Just one question. A couple of quarters back, you know, one of the conference call you mentioned about, you know, R32 being a commodity kind of product and, you know, as a company we were not planning to get into it, you know, the manufacturing side. While now we have announced this 10,000 tons capacity. What has changed, you know, our thought process towards this product? See the one, you know, we have done more extensive study in R32 because it has a very, very low GWP. The longevity of this and the growth in demand across geographies, again, especially India. Of course, India, this is going to be, at this point of time, the main substitution for R22. That's one. There is, it seems to be a lot of demand in the Middle East, which will be for R-410A, which requires both R32 and R125. Other than that, some of the other geographies also like the U.S., et cetera, they will also continue to use R32 for a longer period of time, simply for this reason that it is a very low GWP. It is if they have to keep to the GWP targets, it's easier for them to use more of R32 and curb the use of some other refrigerants where the GWP is higher. For all these reasons, we see that there is a growth potential there, and that is the reason why we have that it will also help us in in supporting our R125 business. Understood. Great. And sir, second question is, you know, you mentioned about, you know, EBITDA margin visibility to some participant. You said, 30% plus. So, is my understanding correct? So over, you know, medium to long term, you feel, our company will maintain its margins at like 30% EBITDA minimum? Is that understanding correct? Well, that is what we expect. You know, who can predict the future? No, absolutely. Down the line, what happens is something which is not predictable. We reasonably expect that we should be able to maintain this level of margins, given the portfolio of our products. Okay. Because what has happened is that, you know, you know, like one, two other, you know, especially the chemical companies like ours, you know, pre-pandemic and post pandemic, you know, the margin trajectory has completely changed. You know, as investors, it always keeps us guessing, you know, where could be the peak margins. I think, you know, this sort of visibility, you know, from your side about 30% EBITDA base will really help us. Yeah, that, you know, the point, as I mentioned, we think that with our portfolio of products and our product range, we would expect and, you know, the margins which are there in our business, we would expect that we should be able to keep to a 30% EBITDA margin. It's also not very easy. There are barriers to entry into our business, and it takes a long time to build, you know, this business, this customer base, get this qualification. We have a reasonable hope that we will be able to maintain this margin. Some of our, you know, the new expansions which are taking place again are in areas where we expect the margins to be better. You know, those are more, you know, sort of, new age kind of industries. Mm-hmm. We are hopeful that we will be able to maintain this level of margins. Okay. Sir, in terms of our, you know, we have a great integration, you know, across different chemicals. Now, which would be those key raw material, you know, might worry you in terms of its availability, in terms of, you know, for you to give a final product price to your consumer. You know, that raw material can act as a very large variable input. you know, as you know, with our integration, that is one of the primary reasons why we are so integrated and why we keep on even with new products which come up, we look at integration, is to ensure that we are in control of our raw materials, critical raw materials. All right. Going forward also that will remain. So there might be periods of time where we are dependent upon outside purchase. But once we are able to, you know, sort of, build the capacities for those critical raw materials, our dependence on, outside supplies keeps on reducing. So this is what we are doing even at this point of time. For instance, we are putting up a VDC plant basically as a backward integration for our entire, you know, R-142b, business. So once that is commissioned, you know, our dependence upon external supplies reduces. Okay. Sir, lithium carbonate. On our own or maybe at least a significant part is captively produced so that we are only, you know, marginally dependent upon buying from third parties. Okay. We also were in a discussion with parties for long term arrangement of lithium carbonate. Yes. Yeah. Are we already into it or what is it? Yeah. That process is on. This takes time. The process of tying up is on. There is a very strong focus on that. I think in the next few quarters, we should be able to tie up some long term supply sources for lithium. Before our big demand starts coming up, we would have tied up. Thank you. That was the last question. I would now like to hand it over to the management for closing comments. Thank you. We would like to thank you, all the participants for their interest in the company, and we look forward for their continued participation. Thank you very much, all the participants. Thank you. On behalf of Batlivala and Karani Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.