Ladies and gentlemen, good day and welcome to the Q3 FY 2023 Earnings Conference Call of Grasim Industries. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ankit Panchmatia, Head, Investor Relations. Thank you, and over to you, sir. Thank you, Rutuja. Good afternoon to all the participants joining Grasim Industries Q3 and nine-month FY 2023 earnings call. First and foremost, safe harbors. This conference call may contain certain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and related risks and uncertainties that are difficult to predict. From the management side, we will be hearing from Mr. H.K. Agarwal, Managing Director, and Mr. Pavan Jain, Chief Financial Officer. Also joining the call, we have leadership team from key businesses, Mr. Jayant Dhobley, Business Head and CEO, Chemicals, Fashion Yarn and Insulators, Mr. Jayant Dua, CEO of Chlor-Alkali Business, and Mr. Rakshit Hargave, CEO of Paints. Without taking much time, I hand over the call to Mr. Pavan Jain for his opening remarks, overall financial performance, and brief overview of business performance. Post which, we will open up for the Q&A. Over to you, sir. Thank you, Ankit, and good afternoon, everyone. We welcome you all to our quarter three earnings call. I hope you had a chance to go through our investor presentation and press release uploaded on stock exchanges and company website. The investor presentation gives a comprehensive insight on the company's quarterly results. To start with, I would like to state that financial year 2022, 2023 is a momentous year for us, as the company completed 75 years of its glorious existence. Despite multiple headwinds in the domestic as well as international markets and demand slowdown, this quarter would be three consecutive quarter where our consolidated revenue on trailing 12 months is trending above milestone of INR 1 lakh crore, which could be a prelude to where we would be ending our financial year 2023. The key to this resilient performance is our very diversified business model, which provides much required stability across various business cycles. Over 75 years of its existence, Grasim has been able to build global scale businesses through continuous innovation, investments in capacity building and new high growth opportunities. We have demonstrated revenue and PAT growth of 15% CAGR on consolidated level since FY 2020. At the standalone level, the company has achieved even better growth rate of 18% revenue, PAT revenue and 34% for PAT since 20 CAGR. We are very excited to start new phase of growth journey through our investments in two new high growth businesses that is paints and B2B e-commerce and innovation-led growth in our existing core businesses. Each of these businesses are leading players in their respective segments, which aligns to our strategy to be a market leader in every business we invest or operate in. We constantly work on providing market with new products through innovation and at providing better customer experience and adopting sustainable manufacturing processes. We continue to rethink, revisit and reengineer our manufacturing processes for operational excellence to remain most competitive in respective businesses. Aligning with industry, we are now classifying our Astrochem Advanced Material Business, which is Epoxy Polymers and Curing Agents business as specialty chemicals. In the era where CFOs are rethinking on capital allocation strategies in order to remain agile as well as focus on long-term value, Grasim has well-defined metrics and strong internal ROI benchmarks to assess, evaluate critical and non-critical investments. That our core and established businesses continue to generate free cash flow across business cycles is a testament to be said. We have committed to create large scale new businesses, leveraging our financial strength and consistent cash flow generations. As you are well aware, Grasim is investing in two new high growth businesses, and for that we have announced an INR 10,000 crore allocation to decorative paints business, which would establish us as a strong number two player in terms of capacity once all the capacities are operational by FY 2025 end. Happy to share that paints construction progress, plant construction is progressing well across our 6 sites, which would establish our reach on pan-India level. The brand identity design, advertising, and launch portfolio are progressing as per schedule. The CapEx spend is also progressing on expected lines with total investments of more than INR 1,800 crore till date. Commercial launch is on schedule in Q4 FY 2024 as per plan. For B2B e-commerce plan, we are happy to share while the full-scale rollout is expected from H1 FY 2024 in a phased manner across different geographies, the pilot operations have begun in the current quarter. On the sustainability front, Grasim's strategy has been appreciated by one of the globally recognized ESG expert, that is MSCI, with a rating upgrade by one notch to BBB. The company is committed on its long-term sustainability strategy and have taken various initiatives in this regard across businesses as detailed in our presentation. Coming to operational and financial highlights for the quarter. The consolidated revenue for the quarter is up by 17% YOY at INR 28,638 crore, led by robust revenue growth of both key subsidiaries, UltraTech Cement and Aditya Birla Capital. Consolidated EBITDA at INR 3,834 crore is down by 7%, mainly due to inflationary cost pressures at UltraTech as well as at standalone businesses. Standalone revenues grew by 7% YOY for Q3 FY23 at INR 6,196 crore, and EBITDA stood at INR 580 crore and PAT of INR 267 crore. This quarter witnessed ripple effects of global demand slowdown. As you all know, globally we are dealing with recessionary market conditions because of the prolonged geopolitical issues. Covid induced lockdowns by China added to the challenging situation across the world. While India-centric demand was stable, the overall demand was affected by declining export-led demand across region partners. Putting some context to this, Indian textile exports registered its sixth consecutive degrowth over July to December 2022 time frame. On nine months basis for FY 2023, the industry export in rupee terms has registered a degrowth of 10% YOY. With lifting of Covid-led lockdowns in China and further improvements in the demand sentiments, there are signs of recovery as we speak. However, the volatility and inflationary pressures continue to impact the margins. During the quarter, China continued to operate its plants at utilization rates which were below breakeven levels, impact the realization trends across geographies including India. Viscose industry faced challenges globally, and India was no exception. Our viscose business reported revenue of INR 3,182 crore and EBITDA at INR 63 crore recorded a degrowth of 84% YOY basis. The decline in EBITDA is majorly because of the lower demand due to subdued market conditions in the de-developed economies, inflationary pressures resulting in the cost increase of key imports such as pulp, caustic soda and energy. Further 19% decline in global cotton prices on QOQ basis impacted VSF prices adversely. Grade VSF December 2022 exit prices at $1.53 per kg were down by 15% compared to September exit prices of $1.81. Average prices of fiber for the quarter stood at $1.59 per kg. However, as the current rates are unsustainable for majority of the players, there are signs of bottoming out of the prices. Our VSF sales volume dropped by 3% on YOY basis due to demand slowdown and low price exports by Indonesia to India at zero import duty in India. The viscose filament yarn business reported a stable performance, though volumes were lower by 11% YOY. Improvement in realization more than offset the increase in the costs. The chemical business continued its earning momentum by reporting revenue growth of 10% YOY at INR 2,582 crore, and EBITDA stood at INR 488 crore in Q3 FY 2023. The global supply chain disruptions are now easing up, leading to decline in international caustic prices on YOY basis at $720 per MT CFR ICA in Q3 FY 2022 and $694 per MT in Q3 FY 2023. Our caustic prices increased on QOQ basis by 5%. ECU for Q3 FY23 stood at INR 46,689 per MT, up 10% YOY. Six percent decline on QOQ basis due to higher negative chlorine realizations. Overall, chlorine integration, including pipeline sales to our ancillaries to date 60% for the quarter compared to 56% in the corresponding quarter last year. The textiles business, which constitutes niche sustainable category products primarily in the premium segment, continues to report stable performance. The business reported its highest ever nine month revenue of INR 1,773 crore. Textile business revenue for the current quarter was INR 569 crore, which is higher by 19% on YOY basis, and EBITDA was stable at INR 49 crore for the quarter. Coming to balance sheet, as of 31st December 2022, we made date for the standalone balance sheet was INR 485 crores. Excluding our investments in the high growth new businesses, the existing businesses continue to remain free cash flow. continue to deliver free cash flows. With this, I would like to now hand over the call back to the operator for Q&A. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch tone telephone. If you wish to remove yourself from the question queue, Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Navin Sahadeo from Nuvama Institutional Equities. Please go ahead. Yeah, good evening, sir. Good evening. Yeah. Thank you for the opportunity. Sir, my first question was regarding this VSF. In the press release as well as in the presentation, you've mentioned cheap imports coming in now from Indonesia. Is this a recent phenomenon? As in, if you could just help us understand this, because if I'm not wrong, the anti-dumping duty was removed way back in, I think, August 2021 sometime. Please help me understand if this free trade agreement is anything recent. I'm just trying to understand, because never in the past have you mentioned this factor to be so critical and impacting our realizations. Yeah. Imports from Indonesia started picking up from Q1 of this year. They have now gone to the tune of almost 250 tons per day in Q3. The main reason for this pickup of imports from Indonesia is that their traditional export markets face demand slowdown, and they found India market relatively better. That was one reason. India offers them zero duty because of FTA with India and ASEAN, so they become more competitive in India, so it became double attractive. Yes, this is a situation. The import ADD was removed in August 2021, and after that, they were careful not to start imports immediately, because then post ADD there will be reviews, so they did not want to be caught on the wrong foot. That time the sea freight situation was also working to our advantage because the freight rates were almost 20 cents per kg. Now with the normalization of international supply chain and shipping industry, the freight rates have come down to 5, 6 cents per kg. Okay. That is, also adding the exports from anywhere to India. These are some of the factors. Now with the situation, DGTR Commerce Ministry has recommended ADD on Indonesian VSF imports to Finance Ministry. The matter is pending with the Finance Ministry. Finance Ministry has one month to make the final decision. We are actively awaiting the decision from Finance Ministry on this thing. Exactly. That's what my next question was going to be, because I did read about, like, you know, representation being made. What are the chances here, you think of this anti-dumping duty coming back? We have shown the case, and that's why DGTR found it appropriate to recommend the restoration of anti-dumping on Indonesian imports. There was an ADD on imports from China also in the previous five years ADD period. This time China has been ADD on Chinese imports have not been recommended. There is a merit, and we believe that merit should be also considered by Finance Ministry. We never know how the final decision is made because there are many considerations and the value chain also makes representations to Finance Ministry. Very difficult to have any 100% feeling. We are working, trying our best. Sorry, I'm just gonna ask one related question here. When the imports, sir, when come from Indonesia for a base category, let's say the gray standard VSF category, how much is the rate difference? I'm just trying to understand if that becomes, because if the ADD is not levied, then does this become more like a, you know, pain which can stick around for a while then? What is the difference? See, the difference is, like, they will always try to price the imports lower than our domestic price at any time. They know our domestic price, and accordingly they offer their prices because they have to make it attractive. That is their normal thinking. More or less it follows the international prices. They have been trying to get market share in India, they are giving aggressive prices. They have been giving aggressive prices. We have to contend with that and adjust our pricing accordingly. We cannot also lose market share beyond a point to any imports. Certainly. Certainly. My last question on this. These, the exporters there, would be the Lenzing entity because we also have Aditya Birla Group entity there. Just trying to understand, is it the Aditya Birla Group entity which is also exporting or is it largely Lenzing? Thanks. No, it is neither Lenzing nor the Aditya Birla Group entity. There, in Indonesia there are four VSF players, and one of them is Sateri Group, which has large VSF capacity in China as well as in Indonesia. Mostly the imports from Indonesia are coming from Asia Pacific Rayon, which is part of Sateri Group, the Chinese VSF player. Understood. That's really helpful. I have more questions. I'll come back to you. Thank you. Thank you. The next question is from the line of Abhimanyu Kasliwal from Choice India Limited. Please go ahead. Thank you so much. Good evening to the management. Am I audible? Yes, please. Yes, please. Go ahead. Okay. Okay. Thank you. Sir, I really wanted to speak specifically with regards to the paints investments that we are in. I mean, you've done 20%, roughly INR 1,800 crores, INR 1,900 crores, and we are planning to do up to INR 10,000 crores by the end of FY 2024, if I've understood things correctly. Sir, my question. It's 25. No, I. 25. No, I. FY. Sorry, it's a FY. Sorry, it's a slip of tongue. Slip of tongue, sir. Yes. FY 2025. Very, very correct. Now, my point, sir, is that now we are hoping to be the second-largest paint, number two paint player. What kind of revenues and margins are we looking at by 2026, 2027, 2028? I mean, I'm sure internally the company must be having some outlook plan which will, you know, help us also forecast. Any rough idea, any rough numbers if you could provide, that would be very helpful. Thank you for asking this question. You know, I would want to repeat the reply that I gave last time, that while we have our internal plans, which suggests where we'd be in that frame of time, but we would not want to be sharing internal numbers or forecasting anything in advance to the market. Mm-hmm. Obviously internally we have it worked out and there are projections. Fair enough. Fair enough. Since we're hoping like this, if we want to be number, at least you can give a rough idea. Number two player, when are we looking? FY 2028, FY 2029? We know what the number one player makes, and we know what the number three player makes, so we will be able to kind of figure out. What, by what time are you hoping to, and what kind of margins are we hoping to attain by that time when we are number two? You know, like we have said, that we would want to be a profitable company in the near term. The margins will take their own place as per, you know, the market. For me to comment on actual margins and projections as you would understand in terms of revenues would not be the ask for the moment. Okay. I understand, sir. One more question, last question. The B2B e-commerce business, regarding that, if you can provide some kind of numbers. Again, we are only hoping to see what happens in 2024, 2025, 2026. I mean, personally, I've looked upon it as this being like the IndiaMART for B2B. IndiaMART is B2B, but we will be better because we have got a very large network, et cetera. If you could give some guidance on the B2B business. We have given the broad estimates for the total building material market in the country, which is roughly $100 billion. Mm-hmm. Okay. That is the total market size of the building materials in the country. The digital penetration is about less than 2% currently. Okay? The market opportunity is big. Let's say if the, over the period of next two, three years, the market, the digital penetration grows to, let's say, 10%, then the digital or e-commerce business will be about $10 billion. Okay. That is the market opportunity. How fast we are able to penetrate and since this is a new business for us, of course we have the required ecosystem available, but then it will depend upon how it pans out. If you look at the three years opportunity, which is about $10 billion, you can estimate what could be our share kind of thing. Understood. Understood. Sir, from your end, would you like to tell us something to incrementally understand the outlook or the opportunity better for the paints or for the e-commerce business? Anything additional if you could tell us, that will be very helpful, sir. I think this is not the right time to come out with our numbers, et cetera. As we reach the launching time and we are actually in the market with our products and with our platform, et cetera, everything, that will be the time possibly we can share some guidance for the numbers. Sir, are you getting any kind of feedback from the market in terms of what we are working towards? Any kind of, positive sentiments or so forth, so on and so forth? No, no. See, we of course, we are in the market. We do take the feedback from the channel partners in both these kind of businesses. That the required preparatory work is being done for both of these businesses. We do take the feedback from the marketplaces as to what is required to make these businesses successful in medium to long term. Sir, we just leave it at that, as the outlook is positive and we are working towards it. Am I correct in my reading, sir? Yes. Okay, thank you so much. Wish you all the best. Thank you. The next question is from the line of Nirav Jimudia from Anvil Research. Please go ahead. Yeah, good afternoon team. Sir, first of all, I would like to applaud the good disclosures on the new PPT on the chloro derivative segment. I think a lot of disclosures which earlier was not there, thanks for that. I have two questions to ask. One on the fiber side and one on the chemical. First on the fiber side. Like this quarter we have seen a volume of roughly around 153,000 tons, and if we see the specialty volumes, they were around 30,000. If you can just walk us through like what could be the utilization levels going forward. Because last quarter you already guided that this quarter would be subdued volumes. When can we see again the pickup in the VSF volumes? One. Second, sir, on the specialty fiber side, when can we see reach those 45,000 tons of volumes which you used to do earlier? It is safe to assume that whatever the profits, EBITDA profits you have reported this quarter is predominantly from the VFI and probably VSF would have made the losses. If that is the case, probably has the premium between our specialty VSF and the gray VSF have also shrinked in this quarter because of which, even on the same amount of specialty volume sequentially, we would have reported the losses on the VSF side. Okay. Thank you very much. First question is, when will the capacity utilization or volumes pick up? As we reported, Q3, our capacity utilization was 72%, 71, 72%. Yeah. The market took turn for worse in Q2, too, and we produced more than we could sell. There was inventory build-up in Q2. In Q3 we had the inventory reduction to some extent. Got it. Now we are seeing some signs of demand revival. We do not know how sustainable it will be, but we are definitely seeing a pickup in our sales volume. Two, three things have happened. One, DGTR has made a recommendation to Finance Ministry for the ADT. Although it is not a final decision, but the market people apprehend that it might happen, so they also want to avoid imports. Ministry of Textiles has come up with the Indian standard for VSF on imports on entire VSF in India. Okay. That Quality Control Order will be effective from end of March. That has also a kind of put some dampener on the imports. These are temporary measures. The basic demand the textile industry seems to believe that the fiber has bottomed out. That's why the buying has started again. Q4, we believe that capacity utilization should be in mid-eighties or high eighties. Okay. On the specialty volume, the volume got impacted because most of the specialty goes for export finally from even Indian value chain, the derivative spinning or fabric. Since the market in Europe and the U.K. and U.S.A. was impacted badly because of brands were saddled with high inventory. Yeah. That segment got impacted, much severely. That will take some time. Specialty volume pickup will be little bit slower than the pickup in gray volume. Okay. On the margins, during this quarter our margin on specialty volume was better than gray, better than past, partly because the gray prices went down too much. Correct. With the pickup in the volume, the gray prices should also pick up in due course, then the margins will come back to normal. Actually this quarter, the specialty margin over gray was much better than normal. Correct. Sir, it's safe to assume that then the VSF business would have reported the losses this quarter. Yeah, yeah. We have made it in our communication also that VSF business reported a marginal negative EBITDA. Okay. Mostly this profit is because of VFI business. VFI business was much more stable because there was no such aggressive export from any country. Mostly VFI comes from China and it is much stable and the prices are maintained. Yes, your assessment is right. Q4 hopefully should be better than Q3 for VSF also. Got it. Sir, my second question is on the chemicals part. Like if you see our power integration for the caustic soda business. If you can share about this quarter that what was the mix like? How much was captive? How much was through grid? How much was the renewable share out of our total power bucket in Q3 FY 2023? Hello? Hello? Ladies and gentlemen, please stay connected. The line of the management got disconnected. Ladies and gentlemen, thank you for patiently holding. The management line is reconnected. Over to you, sir. Sir, on the power mix, if you can share your update on- Yeah. Just for a moment, if you can give your, you know, ask the question again, I think. Yeah. The moment you started we lost you and there was a disconnection. No, no problem, sir. Sir, just wanted to understand on the caustic soda business. What was the mix of power in Q3? Like, how much we got through our captive generation, how much was through grid, and what was the renewable share in Q3 FY 2023 out of our total power? Let's say out of our total power, if you look at it and if you look at the guidance which is being given in the press note also. Mm-hmm. By the end of FY 2025 we will be at 27% of our total mix. Correct. Total requirement. I'm not talking about a quarter because, you know, you should look at the holistic picture rather than just looking at a quarter number. Yeah. If you look at it from, if you go back a year, we were hardly 1%-2% mix on a lower base, which will go to 27% by FY25 on a much larger base of 1.5 million ton caustic. Correct. What we are doing is our carbon footprint rather than going up with our capacity is actually coming down. At this point of time, I think we've already commissioned our Karnataka unit, which is running at about 75%-80% on green power. Our Gujarat units will go up to about 30% on green energy, followed by a couple of projects which are already being done. Overall, taking us to, I don't recall the exact number of units it will be, but it will be close to 100 MW of renewable power by FY 2025 we'll be actually using over there. Correct. Total requirement will be about 400 a little plus, so 100-odd MW will be of renewables. Correct. Sir, a related question on the chlorine derivative side. I think we have mentioned some of the capacities also over there. Like out of, current capacity of 891,000 tons, what were the utilization levels in FY 2022 and in 9 months of FY 2023, if you can share? Yeah. Capacity utilization actually varies. Okay. I think when you talk about chlorine derivatives and, you know, I think it's a good idea that you ask this question. You see, they cut across multiple segments. There is an industrial segment, there is a water segment, there's a disinfection segment, there is a pharma segment, there is an agro segment, and there is- Correct. segment. Each of these segments have a different growth rate, particularly with respect to their market. With the China COVID situation and the slowdown in Europe, couple of segments have actually taken a larger hit as compared to the others. If I talk at a broad number. Yeah. I think our overall capacity utilization will be approximately 75%-76% on the, all the total put together. When you look at some of the, you know, different segmental related, like if you look at the pharma segment. Mm-hmm. The products which fit into that, the capacity utilization will be well into 85%. Got it. If you look at the dyestuff segment, which is related. Will be much lower. Will be much lower. Overall about 74%, 75%. It is kind of flattish. We have not lost anything compared to last year. Yeah, I think the whole textile chain segment, which has gone down into a negative growth rate, has not let us grow beyond a point of time. We've kept kind of kept it flat. Correct. This 273,000 tons of incremental capacities we are putting up, that predominantly includes ECH, MCA, and CTC, right? Rest of the products doesn't qualify under this 273,000 tons of volumes. The products which will come under INR 271,000 is right. Of course, you're at the ECH. You're also at MFAA. You are also talking about CTC, which is at Gujarat, and you're also talking about the new facility of chloromethanes and CTC at one of our units in South India. Correct. Correct. This MCA would be predominantly that food grade MCA we will be producing. Pharma grade. Okay, pharma grade. All those technology tie-ups and everything is done with, right? Yes. See, a large part of pharma base is already a customer with multiple products. Correct. We will have to go through a product qualification route every time because they have their own regulations. Once the plant starts producing, we will start going there. We don't see any challenge either in terms of our quality or in the process of getting the approval. Necessary timelines will obviously take this because that's the process which you have to go through. Correct. All this, so epichlorohydrin would, when it would be commissioned? You have mentioned a timeline of Q4 FY 2026. For all of these three products, if you can share just the timeline in terms of, the capacities coming up, that would be helpful, sir. Epichlorohydrin is a 50 KT plant which will come up by the end of FY 2024. Okay. 2025. Again, why I'm giving a band because there is a China factor which gets. Yeah. On and a European factor which gets dependent on it because the supply chains, while they've improved significantly, the factory working, particularly in Europe and China, is still not back to 100% in some of the engineering goods. Okay. Okay? That's what's going to happen on the epichlorohydrin. We expect that by the end of middle of the next financial year, MFAA will be fully operational. Okay. We are looking at CTC coming up in FY 2025 because we have to take the regulatory approvals before we even start the construction practice. What will the capacity? Mr. Mehdumir requested to please return the queue. We have participants waiting for their turn. Okay. Thank you. The next question is from the line of Pratik from Jefferies. Please go ahead. Hello. Good evening, sir. My first question is VSF business. We talked about imports. I'm sorry to interrupt you, Mr. Pratik. We are unable to hear you, sir. Your voice is breaking a lot. Hello. Yeah, can you hear me? Your voice is breaking, sir, in between. Yeah, go ahead, Pratik. You mentioned about this increase in imports from Indonesia. What would be the total import mix in VSF now for in overall market? Import mix in the overall market, is about 15%. That has remained largely similar numbers. Basically, we are not like letting go our volumes by reducing pricing. Yeah. The market mix has largely remained similar. Yeah. If we allow the imports to come unrestricted, then there are a lot of other complications from the business point of view. We have to take a calibrated decision on pricing, on how much to do and how much customers we can sacrifice for time being. On production. This quarter, the production seems lower, while the work here is higher on absolute basis. Next quarter, as we say that, production will increase, I mean, utilization will increase by around 10%-15%. Sales can be lower as the inventory gets managed and still be 10% down YOY. With the production, we will increase the production only if we are able to sell. We are not going to produce just for building up the inventory. Okay. A material increase over quarter-on-quarter in terms of volume. That also implies that we are looking of like we had taken a maybe a INR 15 rupees cut in pricing last quarter. We could be like reintroducing better prices in this quarter. Pricing is a dynamic thing. We normally follow monthly pricing, but it is in line with the international price and the various factors like what is the landed cost, what is the offer for imports, et cetera, et cetera. Exchange rate also plays a factor. There are some other business factors like what is the yarn price internationally, yarn price in India, et cetera, et cetera. Pricing is a dynamic thing. Normally international price has been stable off lately, so we believe that prices should remain stable for remaining part of the quarter. Okay. Sir, what would be the VSF segment revenue and EBITDA for the quarter? I cannot give you specific numbers for this thing, but I believe that it will be better than Q3. Because the volume will be better. Even if at the same price, the revenue will be better. EBITDA should be better because there will be some operational leverage and, then, some raw material costs also are trending downwards. The long inventory pipeline. Yeah, there will be some positive effect on the cost side also. No, sir. Sorry. I meant VSF segment revenue and EBITDA for third quarter. VSF revenue and EBITDA for third quarter. Oh, okay. VSI EBITDA for the third quarter is, See, I think we don't have VF, VSI separately numbers. You can connect with Ankit. As we have said, the, in the press release, if you go through, the, VSF EBITDA for the quarter was negative. Overall, for the segment, we are positive EBITDA. VSI has given the good numbers offsetting the loss of VSF also. Right. Okay. Sir, on CapEx, we were targeting, including paint CapEx, around INR 5,000-INR 6,000 crore kind of CapEx for this year. We have, in presentation we mentioned around only INR 1,400 or so which have incurred till now for extra paint. What is the target now this year, FY 23, including paint? For other than paints, we have given the numbers for nine months, which are about INR 1,400 crore. We expect maybe around INR 1,000 crore, another INR 1,000 crore in Q4, which includes some large lined up CapEx outflows, for example, land at Vizag, et cetera. Other than paints, the expectation is that some part of the CapEx outflow budget for the current year may spill over to the next year. For the paints, just For paints, our executions are as per plan. It's just that, we realized that some of the materials that we had probably budgeted were coming in a bit too soon. We have just timed the order accordingly so that we get them at the right time. Otherwise, there is no change. What is the CapEx number for FY23 for paint? It is very difficult to give exact, but roughly you can estimate maybe about INR 500 crore in Q4 for paints. How much? INR 500 crores? Yes, yes. In Q4. Q4. Q4. Total cumulative CapEx for the company in standalone business is INR 2,500 plus INR 1,500 or so, INR 1,000 crores, that is the number? Total should be about INR 2,000 crores. INR 2,500 crore. paint INR 2,000 crore maybe INR 2,200 crore, so in the other businesses. Yeah, INR 2,500. Thank you. The next question is from the line of Mudit Agarwal from Motilal Oswal Financial Services. Please go ahead. Good evening, sir. My first question is related to the tax adjustment because of opting the new tax regime. Can you just tell us the effective tax rate for this quarter? Hello? Just give us a minute. Now, yeah. Can you please repeat your question, Mr. Mudit? Yeah. I just want to know the effective tax rate for this quarter because we have opted for the new tax regime in the current quarter. What was the effective tax rate for the Q2 quarter? The tax rate is to be calculated not for the quarter but for the full year. Okay? The provision has to be made based on the effective tax rate likely for the full year. For this quarter, if you look at the numbers in the results, we have in fact reversed provisions made in the previous quarter. Okay. Okay? sir, yeah. There is a reversal of tax provision in this quarter. Okay. Can you quantify how much is the reversal because of the new regime? The new regime tax rate is 35.17%. Broadly, the effective tax rate for the full year is likely to be around that level. Okay. Okay. Understand. Sir, second question. Can you throw some light on the key input costs in VSF business, mainly pulp? How it is trending now, and if any correction we have seen, when the same will be reflected in our cost? I want to understand the time lag of these benefits. Thank you. The pulp is a long delivery item because we have to import pulp from South Africa, Canada and Sweden. It takes about 60 days shipment, and then we have continuous shipment. Because of this, capacity utilization was lower, we had pulp already on the in the pipeline, which we could not stop. There is some inventory built up. Of lately, since October, the pulp prices have shown some declining trend. We have, for the time being, a situation of pulp inventory with relatively higher cost. This will get processed by end of this quarter, hopefully. Prices have shown some declines, but of last two, three weeks they have been stable around $900 per ton. Our purchasing long-term formula also used to be priced based on previous quarter. When the pulp prices were rising, we would have advantage because that price will take effect after three months. In the declining trend, it works against us. We have changed this formula from the previous quarter to the previous month. From January, our price is what based on, invoicing is based on what was the price in the previous month, that is December, say, for example. Now, the new supplies are coming at the previous month's price, so that will be more current. I hope this answers your question. Yeah. Yeah, got it. Thank you, sir. That's it from my side. Thank you. Participants are requested to please limit your questions to two per participant. The next question is from the line of Ajit Motwani from Pinpoint Asset Management. Please go ahead. Good evening, sir. Just wanted to know in terms of operating rates for China, Chinese players, have they not started improving in the sense that, you just had, you know, end of Chinese New Year and, you know, the markets have opened up there. Have you seen, you know, viscose operating rates for China improving of late? And, you know, Yeah. The realization. You would say operating rate has gone down as low as 56%-57%. Now they are operating at about 65%. Yes, there is an improvement, partly after Chinese New Year and after the COVID restrictions have been removed. There seems to be better offtake in China for VSF, and that is supported by this increase in the operating rate. Have the prices started moving up for the viscose? Marginally, very, very small way they moved up. Now they are very, like they are just stable. It's not moving very rapidly or not moving very substantially. Very, very marginal. They are stable around the 13,000 RMB. If I look at the way you're saying, you know, the prices are stable or, you know, like your presentation highlights that our, or let's say, you know, the rates are still 4% lower than the quarterly average and the benefit of RMA is yet to come in. The benefit that we'll see in margins will largely be driven by higher volumes, which is operating leverage, right? For the next couple of quarters. We, yes, our margins will mostly be driven by the selling price and the input costs, not so much by the volume. Sure. Got it. Secondly, I was looking at our CapEx numbers, you know, ex paints we are, you know, about INR 1,800 odd crores yet to be spent. You know, say about INR 2,000 crore there. On the paints business, you know, you had mentioned about INR 1,800 crores spent from the INR 10,000 crore number. That's also like INR 8,200 crores. Total, you know, the two businesses put together is about INR 10,000 crores. For FY 2024, is it fair to assume that, you know, given the fact that we are looking at starting our plants by FY 2025 on the paint side, half of this INR 10,000 crores will be the targeted CapEx number for FY 2024? Yes, for FY 2024 the CapEx spend would be more substantial, inching towards a total of INR 10,000, but not towards that. You could expect a number in the range of INR 4,000-INR 4,500. INR 2,500. Okay. Yeah. Thank you. I know, you know, our standalone EBITDA is subdued today, you know, at INR 500 crore. We were like a lot better a couple of quarters ahead. You know, given the kind of trajectory you're looking at, you know, of cash flows from the standalone business, what sort of peak debt we should look at for the standalone business? The, you know, the slide mentions today is about INR 500 crore net debt is what we have, we are at in December. How should the debt move over next, say, 6-8 quarters? See, it will all depend upon the existing businesses' performance over the next 6 to 8 quarters. The large CapEx plans we would do the borrowing for, especially for the paints business. As we have shared earlier also, our target is to keep net debt to EBITDA level below 3.5 kind of numbers. We have committed the CapEx and how the existing businesses perform over next six to eight quarters, that will be resulting the actual net debt to EBITDA. Thank you. The next question is from the line of Ronald Siyoni from Sharekhan Limited. Please go ahead. Good afternoon, sir. Thank you for the opportunity. I had just one question with respect to cotton and VSF prices like, since I think from Q4 of FY 2021, we had seen, you know, run-up in cotton prices, which eventually after more than a year it came down. During the same time, we had also seen flattish VSF prices. Now, cotton prices when had reacted negatively, there was a direct correlation with respect to, you know, falling of VSF prices. If you know, can explain the reasons behind the same. There were different reasons with respect to cotton moving up and also now different reasons from for VSF prices to come down rather than, you know, cotton prices getting corrected. Just wanted to know more about this correlation for the past, two years. The cotton and VSF prices are not correlated with a very high coefficient. When the cotton prices went to, say $3.5, VSF price did not go in that direction so much. Yeah. It was kind of flattish or, it went up, but very marginally. Even when the cotton prices crashed 40% since its peak, VSF prices have not crashed to that extent. Yes, the direction most of the time is similar, but the extent of movements are much different. We can safely assume that there's not much correlation to be seen in the future also we should expect from both these prices. Yeah. I'm saying this thing based on, say 10 years, data analysis. The correlation is not very high. Okay. Okay. Thank you very much. Correlation, but it is not very high. Right, sir. Thank you very much. Thank you. The next question is from the line of Navin Sahadeo from Nuvama Institutional Equity. Please go ahead. Thank you for the opportunity, follow-up opportunity. Sir, my question in VSF, of course, globally there has always been a cycle like, you know, the peak and trough, and I think I'm sure we've seen it all. In the Indian context, you've always had this monopoly advantage. We could still like, you know, price it better or bargain better with all the spinners. With this Indonesian imports now coming in, I think the monopoly situation has got challenged. Is it fair to say that until unless the government acts in terms of some sort of an anti-dumping duty, which is what the presentation already is, until that happens, is it fair to say that now, like you know, the margins may not be as superior as in the past, but may more like range bound and lot dependent on the global, demand supply? Will that be a fair assessment of this historically monopoly business? I want to challenge your some statement that we have been monopoly. See, what is the meaning of monopoly? We have to understand it better. Just being one producer doesn't mean that it is monopoly because imports were always open. Even when there is a ADD, it doesn't mean that people cannot import. People can always import and even especially for export things the ADD or even basic custom duty is not applicable. There is so much overcapacity in countries like Indonesia or China. China is sitting on 35% capacity overhang. Indonesia is sitting on almost 100% capacity overhang over their respective domestic demand and domestic capacity. They were always free to import, export and Indian spinners were free to import, and they were importing also. Even when ADD was there, our prices were never unfair because then there is always a thing that the full value chain has to survive and prosper. In the last 10 years from say 2012 to 2021, when this 10 years there was ADD in India on VSF imports. The domestic value chain, spinners, the weavers, they grew almost three times. If the prices were monopolistic or unreasonable, the value chain would not have grown. We rather invested in the development of value chain and grew the pie. I would like you to correct your understanding about the VSF and Grasim being the only producer in India. We have more responsibility because we are the only producer in India for this important raw material. Please. No, absolutely, yes. Deliberate your understanding about our thing. If you need some more information, please let us connect one on one. We will share with you. This is what we have shared with the Commerce Ministry, with the Textile Ministry. Because even for this application of ADD there was so much hue and cry from vested interest importers of that Grasim is monopolistic. We proved to the satisfaction of Commerce Ministry, Textile Ministry in front of the textile value chain of those people who were talking like this. They agreed and admitted that, yes, Grasim has been most responsible player in textile industry in India. Completely appreciate your point and more than happy to connect on this front. Thanks so much for the detailed answer. Just two small questions. Other income, sequentially or compared to like, you know, past quarters, is slightly on the higher side at INR 103 crore despite, like you know, decrease in the treasury, per se. Is there any one-off in the other income per se or that also is probably the wrong way to look at it? No, there's no any one-off kind of thing. It is largely because of the higher yields from the treasury, income. Of course the treasury size is also little higher compared to Q3 last year. There is no one-off item, any special one-off item. Thank you. Ladies and gentlemen, due to time constraints, that was the last question. Thank you, senior management. On behalf of Grasim, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.