Ladies and gentlemen, good day and welcome to the Gujarat Fluorochemicals Q3 FY23 earnings conference call hosted by Batliwala & Karani Securities India Private 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 touch tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Archit Joshi from Batliwala & Karani Securities India Private Limited. Thank you, and over to you, sir. Thank you, and good evening, everyone, and thank you for joining Gujarat Fluorochemicals third quarter FY23 earnings conference call. Thank the management on behalf of B&K Securities for giving us the opportunity to host this call. I'd like to welcome the management of Gujarat Fluorochemicals, represented by Dr. Bir Kapoor, Chief Executive Officer, Mr. B.K. Soni, Head of Projects and New Initiatives, Mr. Manoj Agrawal, Chief Financial Officer, and Mr. Vibhu Agarwal, Head of Investor. Without further ado, I would request Dr. Bir Kapoor to begin with his opening remarks, after which we can have the floor open for a Q&A round. Thank you, over to you, sir. Thank you. Thank you very much, Archit. Good evening, everyone. This is Bir Kapoor. A very warm welcome to all of you on this GFL's quarter three FY23 earning call. The company has announced its quarter three results at its board meeting held today. The results along with earning presentation is available on the stock exchange and also on our website. I will briefly talk about the numbers and then give an update on the business operations and outlook. First of all, I am pleased to report that for the quarter ended December 2022, the company has reported a consolidated revenue of INR 1,418 crores, which is up by 41% year-on-year. The consolidated EBITDA for this period was INR 523 crore, which is up by 66% on year-on-year basis. The EBITDA margin continued to remain healthy, and we were at 37% for this quarter. Consolidated PAT for this quarter was at INR 331 crores, which is up by 64% on year-on-year. Other key financial parameters like return ratios continue to remain strong. The ROCE and ROE improved to 35% and 28% respectively. The net debt-to-equity ratio has reduced to 0.21. GFL is continuing with its journey to deliver strong set of numbers and is building a strong foundation for future growth. We have been consistently delivering growth and value to all our stakeholders. GFL is going through an exciting phase where we are transitioning towards becoming a leading global player in wide range of new fluoropolymers, which are essentially high-end material for advanced applications. While these new range of fluoropolymers provide growth in near term, we are also positioning ourselves to capture the growth from sunrise industries like EV, green hydrogen, semiconductors and 5G networks and other new range applications where fluoropolymer applications are there. We believe these new drivers will ensure sustainable growth in the future. Let me now take you through various business verticals and our performance in these last quarter. As you may have seen in the presentation, for the reporting purposes, we have reclassified our business verticals to bring in more segmental focus on businesses. We have now structured our business along three verticals, namely bulk chemicals, fluorochemicals, and fluoropolymers. We believe these verticals capture the business complexities and cyclical patterns which are similar in nature. As you may have seen, we have clubbed all our fluorochemicals, including refrigerants, in one vertical, while commodities like caustic and MDC into a separate vertical. Due to fungibility of operations and similarity in market scenarios, we have clubbed all fluorochemicals, all fluoropolymers, I'm sorry, in one vertical. Going forward, we'll be sharing with you the performance and value drivers in each of these verticals. To begin with, let me talk about the bulk chemical vertical. This segment has seen a quarter-on-quarter revenue growth of 6%. The plants are running at full capacity. Going forward, the prices are likely to be under pressure due to additional supplies which are coming into the market. In the fluorochemical segment, the price and volumes have remained stable, barring some seasonal impact in refrigerants. While we expect the refrigerant to remain stable, we expect to see growth in this segment in next few quarters as the new fluorochemical plants get stabilized and the production is ramped up post customer product qualifications. The fluoropolymer business has continued to remain stable, with pricing remaining firm, barring some minor impact on volume in last quarter due to holiday season in our major markets. Our investment in fluoropolymers has been progressing well, except for some delays due to delay in equipment supplies. We expect these capacities to result into increased sales in next few quarters as capacity utilization is ramped up and additional qualifications takes place. We expect the demand for the fluoropolymer to be stable as leading legacy players have not expanded and in some cases exiting the overall fluoropolymer markets. The new fluoropolymer market has a positive growth outlook due to emergence of new demands from segments like semiconductors and EV batteries. Let me quickly touch upon our new age industry segment catering to battery chemicals. Our investment in these segments is moving as per the plan. As a first step, we are setting up an initial commercial capacity for LiPF6 to seed the market. This line is expected to come up in the first quarter of FY24, and we expect that it may take few quarters to get through the qualification and approval processes. We have been in touch with major player in this segment, and we see that LiPF6 would continue to be the mainstay of the battery chemical and would be a major part of the ecosystem for the foreseeable future. We intend to expand this portfolio to include other battery chemicals as well. Global automobile market is progressing fast forward towards EV ecosystem, and we are in dialogue with many of the potential battery manufacturer in India as well as overseas. There is no change in the CapEx plan as stated in the last quarter. We are looking at CapEx of around INR 2,500 crores split between this financial year and the next financial year. We may see some upward revision on this plan. However, we'll update you more on the next year's CapEx plan as and when these CapExes get approved. On the advance for the wind capacity, GFL has received INR 623 crores from Inox Wind during the quarter against the advances that GFL had given to IWL for setting up the wind power capacity. The advances have been paid adjusting for the wind power capacity that Inox Wind will be commissioning for GFL. We believe the fluoropolymer will continue to provide a strong growth for next few years. This will be further aided by the growth from the battery chemical segment starting FY25. The work of several years, developing grades, getting customer approvals and qualifications is now paying a rich dividend for us. We are well for strong growth going forward. The overall business environment is in our favor, and I believe we are in a very good spot to be able to participate in the sunrise industries and deliver growth for next several years. With this, I close my opening statement, and I would now like to open the floor for question and answers. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their 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. Our first question is from the line of Sudarshan Padmanabhan with JM Financial Services. Please go ahead. Yeah, thank you for taking my question. My question is to understand a bit more on, you know, the shutdowns that is happening in Europe, primarily with respect to the PFAS. In a way are going to be something like a Europe plus one, you know, for us. I mean, if you can elucidate, I mean, do we have capabilities that is basically built to capture that opportunity? Do we have something which can, you know, do the polymerization without the PFAS? If you can give some color on that, sir. Sure. Sudarshan, I, as I understand, you are referring to one of the European manufacturer which is planning to exit this market. Yes, sir. That's correct. What we believe is, let me give you a little bit about the PFAS. PFAS is a small fluorinated molecule that tend to be bioaccumulative, and it gets into the water streams and human tissues. Fluoropolymers per se, which are long chain molecules, are absolutely safe as they neither dissolve in water, and they are neither mobile nor bioaccumulative because of the large size. Having said that, in the process of manufacturing it, there are certain fluorinated surfactant which are used. I am really proud to announce that GFL has developed technology for the entire portfolio of fluoropolymers without the use of fluorinated polymerization aid. In that respect, Sudarshan, we are very well positioned to face this challenge and it's actually not an issue for the fluoropolymer that is manufactured by us. Sure, sir. My question is, you know, while you talked about, you know, some of the commodity prices coming down, I mean, if I look at our business model, we have one of the best supply chains. I mean, right from, you know, we have a JV for fluoro, you know, fluorspar. You know, if the caustic fluorine prices comes down, I mean, you basically capture it as a lower cost in manufacturing your R-22. If the R-22 price comes down, you can do more of PTFE. If the PTFE is lower, you can, you know, probably make more of PTFE or PFA. Is that understanding right? Even if the commodity prices comes down, you might have a momentary, you know, shift between one segment to another, but largely the price fall should be captured as an input cost benefit to another segment. Would that be a right understanding, sir? Yes. I mean, as you have rightly put, we are completely backward integrated. Okay. For example, for our PTFE fluoropolymer, the raw material is salt, power and methanol. Okay. Most of these, so we are actually insulated from any kind of a commodity price variation in the intermediate parts. I think, your understanding is fine. It's not going to have an impact, either the price rise or price drop in any of the intermediate chemicals. One final question from my side before I get to ask. I split it into two parts of the question. You know, the new capacities are coming in, in the fluoropolymer. I mean, from the current, you know, I mean, currently we are doing about 55% or give, you know, plus or minus. Where do we see this business, say, in three years? Second is with respect to the guarantees. I mean, have the guarantees given to Inox Group basically been purged, or are we in the process on that? Regarding the guarantees, I'll request our CFO, Manoj, can you answer this question? Yeah, sure. See, as you have seen in the opening remarks, we have already received, two-third of the advances, which were paid to the Inox Wind. The balance we will be using for the capacities we will set for the wing. As regards to guarantees, we're also pruning it, started pruning it down. We are well on track to have all the guarantees removed by end of next financial year. It will be also pertinent to note that none of the guarantees has till date got triggered or revoked, invoked. Okay? That answers your questions on the guarantees and the advances. Coming back to your question on the, on the future. We normally don't give any projections for three years. However, all I can tell you right now that going forward, we see, growth from the fluoropolymers where we have made investment in this year, and, we see this to result into a significant growth for the company. Sure, sir. Thanks a lot. I'll join back with you. Thank you. Thank you, Sudarshan. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to one to two per participant. Should you have a follow-up question, we would request you to rejoin the queue. Our next question is from the line of Sanjesh Jain with ICICI Securities. Please go ahead. Good afternoon, sir. Thanks for taking my question. First on the fluoropolymer side, you touched upon the 3M exit and PFAS regulation. I just wanted to understand, to capture this opportunity, which is opening up in the TFE market, are we planning to add more PTFE? Because, it's only 3,000 metric ton of capacity of PTFE what we are talking. The industry of two lakh metric ton is growing at 6% that need to be fed, and there are certain European guys who are exiting. Obviously, we have an upscaling opportunity, but we don't want to leave the opportunity of volume growth. How are we looking at a PTFE expansion apart from the debottleneck what we have already announced? That's number one. Number two is on the LiPF6. Uh, now the prices of LIPF6 has sharply corrected. Uh, uh, does it impact the economical, uh, ROC, uh, with which, uh, we have, uh, embarked on this CapEx? And do we really want to restrict ourself as an LIPF6 player or we are looking at more holistic electrolyte-- uh, electronic solution player? How, how are we placing ourself in the battery chemicals? So these are two of my initial questions. Thank you. Thanks, Sanjesh Jain. Let me come to your first question regarding the exit of the large fluoropolymer producer in Europe. Mm-hmm. PTFE. We have already announced debottlenecking of PTFE capacity,Sanjesh Jain, you know that. What our plan right now is to get the full capacity utilization on PTFE first, what we already have on the plate. Then subsequently look at further debottlenecking or adding more reactor as the demand comes up in these segments. Yeah. PTFE. Okay. As far as the PFE availability is concerned, we already have PFEs available. We do not see any issue in ramping up our capacity. Coming back to the second question, that was related to battery chemicals. I have stated that LiPF6 is a starting point for us to get into this segment. Eventually we would like to get into more chemicals related to battery, which are have synergies with whatever we plan to do. Eventually get into electrolyte and solution like what we talk about. Because that market is still evolving, Sanjesh. As you know, the Indian market will come probably by FY25, and global market is still evolving. We certainly have plans to be have a larger play in this segment. Fair enough, sir. One follow-up on the fluoropolymer. In the new fluoropolymer, we were in a process to expand the capacity from 8,000 metric tons to 18,000 metric tons. One, where are we in that expansion plan? Have we completed the expansion of the entire 18,000 metric tons, what we thought? Number two, what is the utilization rate of the existing fluoropolymer? That will help us understand what is an upside potential from the fluoropolymer business from the existing capacity. Thank you. In terms of the capacity, I mean, we had given a plan of investment in ramping up our capacities on new fluoropolymers. Our plan is progressing well, as I indicated earlier. We are, you know, well poised to go up to 1,400 or 1,500 tons per month, as we indicated earlier. Currently, I can say that we are probably around 12,000 ton plus capacity. Again, in these things, there are two parts, Sanjesh. One is, capacity in place, and second thing is the capacity utilization. I think both are being progressed. I expect that in next couple of quarters in this next financial year, we will be able to get the full benefits of this capacity addition. Can you help us understand in Q3, what was the utilization rate in the new fluoropolymer? It would be difficult for me to give that utilization rate, Sanjesh, because these are depends. One more thing I would like to highlight is that we have been talking about capacity rather loosely in these calls in the past. As you know, the capacity goes up and down depending upon the grade we make. For example, if I make a very highly specialized grade, my capacity can drop as much as by, you know, 65%, 60%. It would be difficult for me to give the capacity utilization. All I can tell you is that, in next financial year, in two quarters we'll be able to, we expect these capacity to be fully utilized. No, sorry, I'm harping on the same thing, but what do you anticipate in terms of when we are running at a full utilization? What is the revenue potential from this new fluoropolymer at the peak of the production capacity? See, normally, let me put it this another way, Sanjesh, because, to get the revenue potential in the right way, I would rather talk about the asset turnover. Okay? Yeah. See, in these capacities where we have no backward integration, you can take asset turnover anywhere between 1.5 to 2.0. Mm. Okay. That's the number I would like to leave with you, to get the full revenue from these capacities. Because these are, because we are already backward integrated in most of the cases, and these are primarily the front-end additions. I expect the asset turnover to be the range of 1.5 to 2.0. what is the capital employed here? We already mentioned that it's this current financial year, it's in the range of… it's around INR 500 odd crores. Okay? You can take INR 500-INR 550, something like that. Okay. Got it. Got it. I think one of the calls earlier. Yeah. Thank you, I got it. Thank you, and best of luck for the coming quarter. Yeah. Thanks, Sanjesh. Thank you so much. Thank you. Thank you. Our next question is from the line of Rohan Gupta with Nuvama. Please go ahead. Hi, good evening. Thanks for the opportunity. Congratulations on good set of number. Sir, just a few numbers, if you can just run us through. Sir, this year we have added significant capacities in PVDF and also in FKM range as well. Sir, if you don't mind in sharing the current running run rate of all these PVDF and FKM, at and with the current utilization levels will be helpful. It would be difficult for me to give the capacity number and running numbers for the obvious reasons. Because, you know, these are particularly for the product segment, these are sensitive numbers for us, particularly for PVDF and FKM. Okay. I would not. Okay, sir. I will not, ask for the further specific, but if you can just give us some sense that, in, adding PTFE, FKM and PFA, all this put together, what is the monthly, production run rate right now, and, what was the number when we started the year, so we can just say that how the benefit will be coming in FY24. If you can just share those number at least. One of the things that we had already indicated in the past that after the full utilization of this capacity, we will be at the 1,500 tons number. Okay. Approximately of the new polymers. Okay? 1,500 tons we will be achieving that number? Right. We have capacities in place. I mean, right now there are two things happening at the same time. One is, we are adding capacity, and second is, utilization of these capacities. When we add the capacity, we also have to qualify the grades and add customers, because these are not commodities like plastics, that I add capacity and I start selling next day. There is a time lag between the putting up the physical capacity and doing the capacity utilization as we go along. As I had indicated that we expect this, whatever the investment that we are making this year, which is this financial year, which is essentially approximately in the range of what we had indicated, INR 1,500 new polymers. I expect to see these capacity getting fully utilized by next 2 quarters or in the next financial years, 2-3 quarters. Just to clarify, you mentioned the fluoropolymers capacity is 1,500 tons per month that we are aiming to achieve, and that will be available for next year, right? Correct. This is what has already been announced. We have indicated that in our earlier calls. Right, sir. If you recall, this number has been-. Yeah. this will be achieved with the CapEx, current CapEx of INR 1,500 crore, which we have planned to invest, right? Correct. Correct. The total CapEx, that was the plan. However, for the new fluoropolymers, this number was not INR 1,600 crore. It was around INR 550 odd crore, as I indicated earlier. Right, sir. sir, second is on our fluorochemical business. though you have changed the grouping, and fluorochemicals, I believe that include both, fluoro specialty chemicals and also the rough gases business, right? Yes. Just wanted to check that, in terms of the specialty chemical business, fluoro specialty, how has been the ramp up? I think that was something. Yes. which was still struggling in terms of the growth. How has been the growth there? Yeah. We had a CapEx plan, which already capacities have been added. The plants are commissioned. Now they are in the process of being ramped up. In some cases, we had two set of investments there. One set of was more towards the backward integration, and second was for the new products. The new product part is now getting qualified. I expect is maybe another quarter or two quarters or so we should be able to get them on board completely. Okay. Coming back to the grouping, the grouping is because these are all falling into the fluorochemicals range. Okay. They are very distinct in their nature, and also in terms of the location and capacity, they are within a certain unit. It makes sense for us to have them put into one category. Just last and I'll come back in queue. When this power plant will be available for use and in terms of commissioning line. Yeah. Yeah. The swing capacity is actually the policy has been already announced, an extension up to 30 of June 2020. We are also in process of getting that EU approval. Once that in place, we expect that by next, first quarter of the next financial year, we should set up this capacity. Okay. It will be 20 megawatt power plant? Yeah. Okay. What will be the wheeling rate here, sir? Wheeling rate. The wheeling factor we assume around 25,000. If you could just share the cost, to us in terms of, what will be our expected cost. We cannot divulge you to the cost because it is factoring because of the PLF factor and the other O&M cost and the location, dealing losses, banking regulations and other things. It will be still cheaper than your conventional energy, lot cheaper than the conventional energy, either from coal or gas. It's cheaper than the normal grid power or our... Right. Sir, what about the guarantees which we had given to the subsidiary, is that also canceled or that stands still and will be only over by end of the year? Yeah. Yeah. Next financial year end. That I have already answered in one of the question which is asked earlier. There will be ending this financial year end, FY23 end, right? Next financial year. We have started putting it down, and it will be fully off by end of next financial year. Okay. Okay. Thank you, sir. Thank you so much. Thank you. Thank you very much. Our next question is from the line of Rohit Nagraj with Centrum Broking. Please go ahead. Yeah. Thanks for the opportunity. first question is again on the wind power project. I understand, when we had invested in 25 megawatt of project, we were expecting about INR 150-175 crores of savings per annum. With this 20 megawatt power plant, next year, I mean, on a yearly basis, what will be the savings that we are expecting now? It will be around INR 4. Saving will be around INR 4 per unit. Yes. In terms of total, if you can give us a number. Just let me calculate it out. Around 6. Sorry. Around INR 40 crore. INR 40 crore per annum. Hello? Yeah, yeah. Okay. Thank you. sir, the second question is on the PVDF film. I understand last time we had indicated that the plant will be commissioned by sometimes July 2023. commercial supplies will start maybe 4-6 months post that. if you can just tell us what is the status for the same. We are on track with that plan, Rohit. We are still holding on to that date. We will be. Our plans would be mechanical complete by that time frame and start production. Sure. Thanks a lot and best of luck, sir. I'll come back in the queue. Thank you very much. Our next question is from the line of Chetan Gandhi with Gandhi Securities. Please go ahead. Sir, I have two questions. One is in last call, Vivek Ji said something about saving a lot of cost in the power, but he did not divulge it. Any concrete plan has happened on that? Yeah, we are, yes, Chetan, we are already working on it. Still it's not finalized yet. We expect to finalize in next few months. We'll let you know where we expect to have a saving in the power costs. Okay. Not finalized yet. We are still working on that, Chetan. Sure, sir. Sir, I believe, there are only, few, very few, I mean, or, total there were, four players as far as, semiconductor-grade PFA is concerned. three of them is out, so another three player. How we are geared up to take that, forward in term PFA in a semiconductor, grade? Because we have a lot of markets in Japan and USA both. Japan, we are getting the premium valuation. Yes, Chetan. Excellent Excellent opportunity for us, and I'll request Tony sir. You're very right. PFA is an excellent opportunity. Semiconductor is a requirement of each country because of strategic reasons. We are also gearing ourselves. First of all, the monomer, TFE, we have adequate availability. We are also expanding our capacity by adding a couple of more PFA reactors. We are also going to develop these new grades for high purity semi applications. Sir, in terms of timeline, how we can see the first batch out for the commercial sales? I can, 3 quarters, we should be seeing the start of semis. Actually, in semis also there are different grades, high purity, ultra-high purity. Depending on that, we will be steadily moving towards the ultra-high purity grades. Sure, sir. Sir, PVDF backsheet panel, we were to commercialize that in coming financial year. Are we on track on that or there is some delay? No. As you just mentioned, the PVDF film will be commissioned in July in this year, 2023. Okay. Sir, that PVDF film capacity is part of that 1,500 per annum new polymer capacity or it is we have to count it separately? Yeah, it is part of that. Part of that. All right, sir. I have some more questions. I'll jump in the queue. Sure. Thanks. Thanks. Thank you. Our next question is from the line of Anand Jain, individual investor. Please go ahead. Thanks for the opportunity, sir, and congratulations on a very good set of numbers. My question is more in terms of, you know, what we see here on, in, on PVDFs and LiPF6 in China. Currently, LiPF6 prices have fallen significantly and similar thing is happening in PVDF battery grade prices. My question is that, you know, in other fluoro, if you, A, if you can give the number of grades roughly per fluoropolymer wise, which kind of tells us that, you know, these are not commoditized. Secondly, when I look at Tinci, what Tinci has done is that it has actually contracted out a lot of capacity of LiPF6 and other battery chemicals. You know, they use lithium carbonate as a base price and then, you know, they have some kind of formula on top of that. How are we looking to work through, you know, these kind of grades where large capacities have come up and, you know, the prices fluctuate significantly? Basically you are right. The lithium, the LiPF6 prices were higher earlier and now they have corrected. Actually, our margins will not get impacted because we already started with the lower capacities after reasonable studies. Lower, I mean, lower cap prices. In fact, the prices we considered are much lower than even the corrected prices, our margins will not get impacted at all. About the issue of Tinci Materials you mentioned, yes, of course, it's a new age chemical, and there are different technologies, and one of the technology Tinci Materials is using, they are still, we understand, working on this. There are, according to our information, there are some issues and, while we are going for the process which is adopted by bulk of the LiPF6 manufacturers globally. My question was more in terms of, you know, contracting out capacities with lithium carbonate as acting as a pass-through kind of a pricing mechanism so that we are not exposed to the vagaries of the market. Are we also looking at that? There are different arrangements for tying up the lithium. We are working on all these arrangements, and very soon we'll be having a long-term strategic arrangement in place. Great, sir. My second question is we were supposed to get SPM capacities in the last quarter. If you could give me if are those capacities on stream and, when can we see, you know, numbers coming out from those capacities? See, as I indicated earlier, the capacities are coming up as of now, but we cannot give the exact capacities as of now, whatever has come up. The ramp up of the capacity utilization is in place. We are as far as the investment and setting up the reactor, I think we are on track and we are ending up the capacities, as I indicated earlier. Great. one last question, if I can squeeze in. for R-142b, is the only application, is to like getting into fluoropolymers or is the R-142b has any other applications on the refrigerant gas side? I don't think there's any refrigerant application. R-142b is mainly used as raw material for VDF and then that range of polymers. Great. Thank you. I will come back in the queue. It used to be there earlier because it's essentially it's a refrigerant. ODS. Now because of its ODS, it is part of the banned substance now. It's only used as a raw material right now, not as a refrigerant. Thank you, sir. Our next question is from the line of Nikhil with JM Family Office. Please go ahead. Yeah. Hi. You know, this was regarding your comment which you made that you'll be gradually transitioning to the new non-fluorinated surfactant technology, which, you know, takes away the risk of any kind of regulatory action. I just wanted to understand, you know, for the entire capacity, by when will this transition, you know, happen? Will this be only for some part of the capacity or the entire production will move to the new technology? Yeah, we already have technology in place, and we are slowly going to change, and we expect this transition to be complete by the end of this calendar year. Okay, next, fourth quarter, by December 23. I mean, it's around that time because there are, because these are changed, step by step, and the grades are qualified as we go along. We have the technology. We have the know-how, how to do it. Understood. Just to be sure, would this technology be unique to, you know, to you or? It's proprietary to us. It's a patented technology for us. I'll request Mr. Soni to add on to this one. You see, actually, as Dr. Kapoor mentioned, we are the first company, globally to announce this technology. After a lot of in-house development, we have perfected this technology. Five years. Almost five year time it took us. We have been working on it for quite some time now. Now we have reached the point where we have started, implementing it and rolling it out. Once you transition to this, that takes away any kind of risk of any, you know, if at all the regulatory authorities ban any of these products, that it takes away that entire risk. Is that right? Yes, 100%. Entirely it takes away because these are non-fluorinated. Perfect. Okay. Perfect. Great. Thank you so much. Thank you. Our next question is from the line of Garvit Goyal with Nuvama Research. Please go ahead. Hello. good evening. Am I audible? Yeah, we can hear you, Garvit. Please carry on. My question is on what are your current development from this Nafion, or we can say PEM membrane side that is going into the hydrogen? Is there any development or is there any? Hello? Yes, we are developing the proton exchange membrane, PEM, for both the application. There is a fuel cell as well as electrolyzers. It will take us about one year to have the product out. The progress at the moment, I must mention, is quite satisfactory, and we should have the initial samples ready for sampling quite soon in maybe one or two quarters. Okay. Sir, you are not giving guidance for long term, but is there any estimated top line for FY23 that you are targeting internally? As you know, the focus is presently on EV and hydrogen, green hydrogen, although in the news it is still yet to see actual capacity on the ground. But in any case, we are getting ready for it. No, actually, I was asking, what is your internal target for top line, for FY23? In any case, it is difficult. It is little early in India. Sorry. Actually, I think there's some confusion. I am asking for the overall top line for GFL by the end of FY23. Hey, normally, Garvit, we don't give top line guidance. Because what we have been saying all along that we are looking at 20%-25% growth every year. That what we have been taking as a targets going forward. Okay. That's all from my side, sir. Thank you very much and all the best for future. Thank you. Our next question is from the line of Nitin Agarwal with DAM Capital. Please go ahead. Sir, thanks for taking my question, sir. Just continuing on the PFAS free, PTFE, business that we talked about. In your assessment, you know, as this market transitions to a PFAS free market and with our capabilities on this making this product, I mean, how do you see the, in terms of Qualitatively, how can the market in your assessment can change? Does it become a more value-added market? Does the realization, per ton overall for the market changes meaningfully, versus where it is right now? Even from a competitive perspective, do you see a significant reduction even further from the number of players who are out there? See, see that we have to see how this market evolves and how regulatory systems, you know, or restrictions come in place. We are very well positioned, and the way we see our differentiation is both, in volume as well as the price. Okay. Because, as some of the players who do not have this capability may fall out, so there will be an opportunity for others to come in, obviously. We are very well positioned at this point of time. Yes, I mean, that point is absolutely taken. I was just trying to understand if, you know, this, does the transition mean that the overall value per ton for the PTFE market goes up in the future? You know, does it from a realization perspective and from a profitability perspective? In the short term, you know, as we are transitioning, it's an sort of on a platform which is on the environment and sustainability. It will as the more pressures built in, I think it will see a differentiation, but not at this point of time. That's reasonable. Eventually we expect the pricing to go up as the players are phased out because of the pressures. At this point of time, it is beginning to happen as you see and, but on the ground, when these capacities go out, then we will see a bigger impact on the pricing. Just secondly, you know, in terms of, you know, the demand scenario that you're seeing for FKM and PVDF, I mean, the other demand supply dynamics. I mean, if you can just sort of give some thoughts, you know, some qualitative thoughts on how you're seeing, the demand and supply dynamics in both of these products. Is supply catching up in either or in both of them, or, is there a marked difference, in the demand supply dynamics in either, in either of the two categories at this point of time, or in, as you see it happening over the next couple of years? Which categories are you referring to, Nitin, please? FKM and PVDF. In terms of the, demand supply as of now, you know, the market, again, are segmented because in PVDF there's a batteries market and there's a non-batteries market. Okay. They have their own set of dynamics. We see the overall, market sentiments to be positive in these because again, these are not commodity. These are very specialized product which are grade-wise. Supply also we need to look at, from that perspective because we have to see, China versus non-China, et cetera, et cetera. Okay. The last question on your on your battery chemical business, sir, what are the milestones that one we should be sort of tracking in the business, you know, over the next, say, two, three years from a GFL perspective? The first milestone is commissioning the LiPF6, and then the next milestone is having it validated. We hope to achieve both these milestones by the last quarter of this calendar year. After that, the next milestones are of course to keep pace with the growing market as well as to add more battery chemicals. These are the broad milestones. Sir, for PVDF for the battery grade which was there and what's the milestone we should track for that? The PVDF battery grade, we are much more advanced because the product is under advanced stages of approvals. Maybe in one or two quarters we would have the business starting. Okay. Sir, lastly on that, do we need to create specific capacities for this battery grade PVDF or we've got our current capacities of Gen start, we can use them for commercial manufacturing as well the approvals come through? No, actually we have a very limited capacity, which was for basically non-battery grades. For battery grades we would be adding capacities. As the market builds up, we have planned to keep on substantially adding reactors. The monomer side we have adequate capacities, considering the market already we expect to come in. We had taken, some capacities, you know, out of 1,500 that we talked about into the battery grade as well. Okay. As the market evolves for the EV battery, we can add in more reactors going forward because on the backward side we have adequate capacities. It's, it's only as the market grows up, we only need to do the front-ending. Okay. Thank you very much. We are there actually completely. Thank you. Our next question is from the line of Aman Vij with Astute Investment Management. Please go ahead. Good evening, sir. My first question is on the refrigerant side. If you can talk about, we have both class two refrigerants and class three refrigerants, and with this protocols coming in. Are we allowed to add capacity or is it dependent on some kind of quotas? If you can explain that. Also for, say, R22, are the companies allowed to add capacity if they don't sell it in the market, but if they want to backward integrate? If you can just explain all those things that is happening in both class two and class three refrigerants. For R22, the class two refrigerant, we are allowed to add capacity only for a feedstock use and not for MSF use at all. For class three we have HFCs, we are allowed to put up capacity only up to a certain time, which is the first quarter of 2024. We till that time any player can add. Pardon? For the raw material use, I think this is allowed to be added. Yes. Yes. There's no restriction per se. Yeah. For feedstock use, there is no restriction. There's no restriction. Even in developed countries? No, actually the ozone rules are varying from country to country, but according to us it is the same. It should be the same. Okay. you talked about till, first quarter of, I think CY 2024, or is it FY 2024? By 32, come up, well before that. Okay. There is no limit to what companies can add? Yeah. No. No. Not really. Sure, sir. My next question is on the fluoropolymer side. If you can talk about the number of grades we have in total and in, say, PVDF, FKM and PTFE specifically. Because this helps in understanding how much grades we have to cater to the market. Number of grades. It's difficult to see that, say that number, but the number can be 100 or over 100 numbers. Okay. Because there are, grades keep evolving based on the customer, but so it's over 100. 100 is combined, sir, including everything? Yes, exactly. For new fluoropolymers, roughly, I'm okay with rough number also. What is this number? We have put all the fluoropolymers in one vertical, that's the number. Maybe even higher, some around, you know, give or take 15%-20%. Sure, sir. Just one clarification. You mentioned by Q2 FY24. That means in the next three quarters we expect full ramp up of 1,500 tons per month capacity. Is my understanding correct? What will happen is that our capacity would be completely in place by then. The full utilization in terms of the sales coming from them, I think would probably be, we are looking at maybe by March 2024 roughly. Yeah, that's what it is. Okay. Complete. We'll be seeing a growth in the coming financial year, which is primarily coming from this capacity that is being added. Out of the INR 1,250 crore of CapEx which you have lined up for FY24, how much is for this new fluoropolymer in that? INR 100 odd crores, INR 500 crores, INR 550 crores at least. No, no. For, that was for this year, FY23. I'm talking about next year. Is it same, INR 500 crore-INR 600 crore, or will it be a bigger chunk next year? We have still not given yet how our CapEx is going to be in the next financial year. What we expect is that this will be lower than this year, okay, going forward. I don't think we have given a break up yet of next year's CapEx yet. Sir, final question. Sir talked about the pricing of, couple of products as of today. What are the pricing for, PFA, FKM, PVDF... Sorry, we cannot give the pricing of individual products. All I can tell you is, they are stable from last few quarters. We are not seeing any significant change or drop in these prices. PVDF has corrected, right? Significantly. PVDF has corrected again, in different segments. Again, that's why the, one of the reason I'm hesitating to talk about prices because they, there's a grade-to-grade variations. Okay. As far as we are concerned, we are not seeing a very significant drop in PVDF prices yet. And for- There are some particular grades, in particular segment where these corrections happened, which you may be referring to. On portfolio level-wise for next. For us, it has not changed much, quarter-on-quarter. You're not seeing it today also, any correction? Not much. Not much. Sure, sir. Thank you. These are the questions from my side. Thanks. Thank you. Our next question is from the line of Vikas Mistry with Moonshot Ventures. Please go ahead. Thank you for giving the opportunity. Sir, my question is onlithium hexafluorophosphate. We see that the chemistry used is not so complex, but sourcing is the main competitive advantage. Can you elaborate in that key what will be our competitive advantage in battery electrolytes Yeah. Yeah. Competitive advantage is, first of all the market. We would have a good market in the domestic, I mean in the, in India. The second advantage would be the sourcing, the backward integration. Most of the materials other than lithium carbonate, which unfortunately is not made in India, but not mined in India, everything else we would be making in-house, so that would give us a cost. Okay. If there is some chemistry, that changes in this direction, then the capacities will be fungible or not? Already the cap for 1 or 2 salts the capacity is fungible. There is a different chemistry for for EV and different chemistry for energy storage system, so the capacities can be fungible. Depending upon Because it's a new age chemical, so we have to add 1 or 2 other salts or additives considering the future in mind. LiPF6 would continue to be the main dominant salt in the years to come. Okay. Sir, can I understand what is the possible market we're trying to address from that electrolyte side of it? The addressable market depends upon the gigawatt hour of EV transition which happens in any country and overall in the globe. Range from 3,500 gigawatt hour to 7,000 gigawatt hour. Depending on that and roughly depending on the chemistry, because chemistry-wise also there's a wide variation in LiPF6 requirement. Broadly, if you take a number ranging from 100 to 120 metric ton per gigawatt hour, and depending upon what you assume for gigawatt hour, you can work out the market. Okay. Sir, my next question is slightly vague, but I want to understand about the grades in PVDF and FKM. How many grades which have industry structure is more of a oligopolistic kind of industry structure, their validation is quite high. Can you give the number from... Our assessment seems like that over 70% of the grades are having more value-added material, their competition is quite less. I'm sorry, I didn't really understand your question. I think as far as the grades are concerned, that difficult for us to give grades, number of grades and. There are large number of grades in each of these segments, depending upon applications. These grades are, sort of, tailor-made to a particular application and particular processing systems. Okay. So- Sir, Sorry to interrupt, sir. My question is actually. You're trying to get to. Sir, sorry to interrupt. My question is how many grades where the industry structure is more oligopolistic, we have less competition. I want to infer that how money of the grades, percentages of grades we sell, which has, very less competition. In most of the cases where we operate, we are operating in a very specialized grades. We are not competition per se. Because there is a. See, one thing happens in fluoropolymers is once, let's say, a grade is. Let's talk about FKM used for a fuel tube, okay? Once it's qualified and accepted, then there's a lot of stickiness because there's no. Because the numbers. These grades are not changed quickly. Plus qualification time is high, and also at the same time there's a stickiness to it. Okay? There are. And so there's a long run process of qualification. Then slowly the volumes are ramped up as OEM gains more confidence in our grade, and then they remain sticky to us. That's the process actually. Okay? It's not that I go to a customer with list of my grades and they give an offer to us. Okay? Mm-hmm. That's why you may see certain volumes in China or outside, wherever, but those volumes have very little meaning because it depends on the kind of grade and kind of the customer base and applications they are present in. Okay. Thank you, sir. That's good to hear. Thank you so much. Thank you. I now hand the conference over to the management for closing remarks. Over to you, sir. First of all, thank you very much. Thanks for participating in this call, and thanks for showing interest in GFL. We really appreciate your question and your areas in which you are interested in. In case of any further questions, if some of you have not been able to ask questions, I would request you to connect with our Investor Relations, and we will try to answer your questions to the best of our capability. With this, I would like to thank you all. Thank you. On behalf of Batlivala & Karani Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.