Ladies and gentlemen, good day, and welcome to the Q1 FY 2024 earnings conference call of Grasim Industries 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 0 on your touchtone phone. Please note that this conference has been recorded. I now hand the conference over to Mr. Ankit Panchmatia, Head Investor Relations. Thank you, and over to you, sir. Thank you, Jacob. Welcome everyone for joining us today for Grasim's Q1 FY 2024 earnings call. Trust everyone got a chance to look at the financial statements and presentation uploaded on the exchanges and also available on our website. For safe harbor, kindly refer to the cautionary statement highlighted in the last slide of our presentation. Today, we have with us Mr. H.K. Agarwal, Managing Director, and Mr. Pavan Jain, Chief Financial Officer. Also joining the call, we have our leadership team from key businesses. Mr. Himanshu Kapania, Business Head, Paints, Mr. Jayant Dhobley, Business Head, Chemicals, Fashion Yarn, and Insulators, and Mr. Akshay Tharadkar, CEO of Paints Business, and Mr. Jayant Dua, CEO of Caustic. I would now welcome Mr. Pavan Jain for his opening comments, post which we will open for the Q&A. Over to you, sir. Good afternoon, everyone. It is a pleasure to share our quarter one performance with you. First, I would like to give some highlights on the macro environment, and then would cover financial performance of our company for the quarter under discussion. Globally, interest rates hikes continued, with U.S. Fed rates rising in July 2023 by 25 basis points to 5.25-5.50, though RBI seems to have paused the rate hike for the time being. Fed has guided that the future interest rate decisions would depend on inflation data, and the inflation in U.S. is steady. Economy is growing at a faster than expected pace. Consumer sentiments are also indicating positive signs of recovery for second half of calendar 2023. China's expected reopening led demand based on export growth and consumption revival has somewhat disappointed global expectations. The subdued domestic demand recovery has led China's focus on exports to keep the economy growing at desirable levels. As the macro global environment continues to remain volatile, the realizations are impacted across global businesses we operate in, like viscose and chemicals. On the Indian front, we have been on strong footing, and there have been multiple upgrades to GDP estimates. According to RBI, India's Q1 FY 2024 GDP growth is expected to be around 7.9%. Given the current expectations around growth, multiple agencies have pegged their estimates of India reaching the position of third largest nominal GDP by 2030. This is remarkable, given its position of being among top 10 economies in 2010. Given majority of our revenues are from domestic markets, we remain confident of playing an integral part in India's long-term growth story. However, in the near term, global slowdown has directly impacted India's exports of textiles, which degrew for the 12th consecutive month on YOY basis. During June 2023 quarter, textile exports were lower by 10% YOY and 9% QOQ, which has impacted the textile value chain from mills to garment manufacturers. The domestic demand for textiles and apparels is also exhibiting some sluggishness due to delayed festive season, which is in the latter part of the year. Cotton prices have also declined 41% YOY and 4% QOQ, which to an extent impacts the demand for viscose as well. Chemical industry is witnessing similar global demand slowdown impact, which has resulted in higher inventories. Weak demand from end user industries globally, like textiles, packaging, materials, constructions, et cetera, especially in the developed countries, is indicating subdued scenario in second half of calendar 2023. Despite these headwinds, our standalone businesses performance has improved for Q2 consecutively. The improvement was largely driven by strong recovery in viscose business, partly offset by subdued performance in chemical and textile businesses. The YOY performance comparisons are impacted due to unfavorable base impact compared to the peak of cyclicality in Q1 last year in respect of our VSF and chemical business. Our continued focus on costs and improving efficiency, coupled with lower input prices, have resulted in improved performance on QOQ basis. As already shared earlier, we are happy to share that we would be launching our two new businesses in the current financial year. The paints business would commence its commercial offering from Q4 FY 2024. Of the 6 plants, at least 2 or more plants will be commissioned this year. Our long term goal is to be second largest player in the Indian decorative paints market, which is growing at a healthy double-digit pace. We have launched our full-scale B2B e-commerce website this month under the name of Birla Pivot. Birla Pivot is unique experience for MSMEs operating in construction business, giving them one-stop-shop solution from generation of quote to delivery and facilitating financing solutions. The platform is up and running in full scale across regions of Maharashtra, MP, and Delhi. We have onboarded 130+ brands. Going forward, we will also explore private label products in select categories. Initial response to Birla Pivot has been encouraging. On sustainability front, our efforts are well recognized in the industry and value chain. We constantly endeavor to reduce water emission or water consumption and emissions, increase the share of renewable power. This would be driven by process efficiencies, new technology deployment, and investment in the renewable power capacities. We have improved our share of renewable power to 11%, compared to 8% in last financial year. Additionally, we have been recognized as one of the most sustainable organization by two prestigious media publications, that is, The Economic Times and Business World. Now, highlighting some of the key financial parameters of Q1 FY 2024. Consolidated revenue grew by 11% Y-o-Y to INR 31,065 crore this quarter. Revenue from key subsidiaries, UltraTech, Aditya Birla Capital, grew by 17% and 26% respectively. The performance was moderated by degrowth of 14% at standalone level. Consolidated EBITDA de-grew by 5% Y-o-Y to INR 4,981 crore, largely due to softening of realizations at standalone businesses, as well as at UltraTech Cement. Standalone businesses revenue stood at INR 6,238 crore, compared to INR 7,253 crore in the same period previous year. Standalone EBITDA de-grew by 42% Y-o-Y to INR 789 crore compared to INR 1,364 crore. The high base impact from historically high rates of key products, namely VSF and caustic soda, has led to this impact on profitability on Y-o-Y basis. EBITDA for the quarter is also net of pre-operative expenses of new businesses charged to P&L. Globally, viscose is the fastest growing sustainable fiber compared to cotton and polyester. Viscose continues to sequentially recover since Q2 FY 2023, with EBITDA for the quarter at INR 390 crore. Utilization level at 90% was impacted partially by the plant shutdown of almost a month due to fire at our Harihar unit. International caustic prices, the CFR SEA, are on declining trend from October 2022 onwards. The rates were $735 per ton in October 2022, declined to $395 per ton in June 2023, with a correction of 46%. The quarterly average rates during the same period previous year stood at historic high level of $769 per ton, which makes Y-o-Y comparison unviable. High operating rates with missing demand recovery in China led to oversupply, leading to global prices erosion. India imports, albeit a lower base, increased, further adding to the capacity additions from domestic players. Our Chlor-alkali business continues to maintain its market leadership, posting volume growth of 5% Y-o-Y at 292,000 metric tons. The revenue for the quarter de-grew by 21% Y-o-Y to INR 2,146 crore, compared to INR 2,733 crore in Q1 last year. The resulted revenue mix from caustic declined from 61% to 55%, and chlorine derivatives revenue increased from 17% to 20% on Y-o-Y basis. There remains a sharp focus on developing products around chlorine derivatives. Partnership with Lubrizol is in the same direction, whereby the construction of Asia's largest CPVC resin plant at our Vizag unit is expected to commence this year, and it would help to improve captive consumption of chlorine. Post completion of capacity expansion projects, the chlorine integration would be 72% compared to current 61%. The specialty chemicals, which is our epoxy resins business, posted another stable quarter, leading to strong, led by strong demand for specialized products in key user industries. The product mix improvement in favor of specialty products and correction in raw material prices resulted profitability in this segment growing nearly 2 times Y-o-Y. delayed festive season, coupled with elevated flax prices, impacted performance of our linen business in the textile segment, though wool segment performed well. Textile revenue de-grew by 11% YOY to INR 549 crore. Our focus has been to grow iconic brands like Linen Club, Soktas and Giza House. We have been ramping up our retail presence, and the brands are now available at 210 EBOs and over 8,000 MBOs, offering key brands. As we are making large investment in new businesses for next phase of, phase of growth, the net debt as of 30th June 2023, stood at INR 3,515 crore. During this quarter, we have also participated in the preferential allotment by Aditya Birla Capital, wherein we have invested INR 1,000 crore. Excluding our investment in new businesses and the investment in Aditya Birla Capital, our existing businesses continue to generate free cash flows, and we have generated INR 256 crore for the quarter F1 of FY 2024. The board has approved CapEx spending of INR 5,791 crore in FY 2024, including INR 4,283 crore for Paints business. During Q1, we have spent INR 1,380 crore towards CapEx. We now open the floor 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 1 on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star 2. 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 Sumangal Nevatia from Kotak Securities. Please go ahead. Yeah, thank you, sir, for the opportunity. My first question is on the VSF business. Clearly costs are deflating. If you can just detail which all areas we are seeing cost deflation, and also in the coming quarters, as we can see, prices are bit under, under pressure, what all cost, some outlook on the cost for the coming quarters, if you could share? Okay. On the viscose side, obviously, the main cost items where we have seen reduction are pulp prices, caustic prices, and coal prices. All the important input prices have come down compared to last year significantly, and also compared to the last quarter. That is a very positive trend. Looks like the input prices do not have much further room to go down, but we have to see. It all depends on the macro level situation and especially in China. China now is going through a very difficult phase. Today newspapers, everybody read that China is going through deflationary pressure, we have to see how the government and the Chinese economy perform in the coming months, and that will determine the input prices all over the world. The realization also is in the decline trend, and it depends on the pace of decline. Sometimes, raw material prices decline faster, sometimes, final product prices decline faster, depending on the inventory levels, depending on the macro global sales trend, et cetera, et cetera. These are the scenarios currently going through. On the Chlor-alkali side. Caustic continues to remain- Caustic prices have come down significantly. That helps viscose fiber side, but it again impacts us very badly on the Chlor-alkali bottom line performance. Energy prices, particularly in terms of coal, they have come down recently. That should reflect in our performance in the coming months also, but then it will again depend on the, how severe is the winter, coming winter, and that will determine the coal prices going forward. Okay, sir. I mean, as far as the spot rates are concerned, for the biggest cost items, it is already largely reflected in one key result. When you say there's not much further scope of reduction, or there is some further inventory gains, and you'll see some benefits in the coming quarter? I think this is fairly reflected, already. Yeah, small things will keep moving, so but that will not be very big. For the caustic business, sir, given the pressure on prices, coming quarter, should we expect margins also to trend in line with the price weakness, or there are some offset available else? This is Jayant, Aditya Birla. We believe that Caustic, the way it is trending, you may be at the end phase of further reductions. There could be marginal changes, which are obviously a function of local India movements and how the Indian consumption center moves, but we believe that largely it is... more or less near its bottoming out. But yes, the trend as for this particular quarter will be lower as compared to the average of last quarter, because the exit of last quarter is what we are seeing today as the new stabilization point. Yes, to your question, will there be further margin erosion based on the exit of last quarter? It will be relative to, it will be equivalent to that, but from the average of last quarter, it will be a bit. Understood. Understood. Sir, my second question is with respect to CapEx. For the paints division, should we expect a large part of our INR 10,000 paint CapEx to be concluded by FY 2025, given that, 2024 also is a very significant CapEx as per the presentation? Yeah. Yes, you can assume that. A large part of CapEx will be done by FY 2025. Okay. Sir, the B2B segment venture, it's a very slow CapEx, what we are spending this year. Is there any other indirect way of financing in terms of working capital, et cetera, being absorbed in that business? No, there's no indirect way as of now. I think, in CapEx, see, it is not a CapEx-intensive business. We have, we have spent on the technology side, and of course, we, we'll have to continue to spend on technology. That is, that is all for CapEx. The peak of CapEx will be this, this intensity only in a particular year or coming years, FY 25, 26, we will see further increase in CapEx from what we are spending in FY 24? For the board-approved CapEx numbers, if you look at, this, this is, I think, 1 of the highest spending year, current financial year. For the next financial year, we will have while depending CapEx of paints business. For the next financial year, we will have proposals to go to the board and get board approval, et cetera. For next financial year, it is very difficult to say about the numbers, but, as of now, yeah, this year looks like, CapEx, heavy year. Okay, got it. Thank you so much, sir, and all the best. Thank you. Thank you. The next question is from the line of Nirav Bothra from Anvil Research. Please go ahead. Yeah, good afternoon, sir, and congratulations on very good set. Sir, I have a few questions. One on the chemical side. Sir, if we see our ECU realizations in Q1, they've been far better than the players, other players reported numbers of in the Caustic chlorine division. Just wanted to have your thoughts here that was there any specific reason for our ECU realizations higher than our peers? If you can share your thoughts here. I think the, the reason is that I think tactically we played a couple of moves better than some of our competitors. Okay. From a long term, if you say, was there any, strategic shift? No, I think the one was that our VAP, or what we call as our chlorine derivatives. Yeah. compared to Q4 of last year to Q1 of this year, our volumes have materially gone up. Okay. Other than that, it was, I guess, more day-to-day active management. Correct. Sir, what proportion flax forms in terms of our total sales volumes for the caustic soda division? Because I think it. Flex form to the tune of around 20%-22% of our total caustic lye production. Okay. Has that proportion gone up this quarter? Yes, it has gone up. Not significantly, marginally gone up. Correct. Sir, a related question to this, when we are expanding our caustic soda capacities, does these newer capacities come at a lower power consumption per ton of production? What we have seen for a lot of players that when, when we interacted, they said that it is possible to reduce the per ton consumption of production consumption of power. That and whether it is possible to modify the equipment for the older capacities so that there also there is some, some scope of power reduction. You see, the power reduction in any caustic plant is a function of the generation of the electrolyzers you buy. Correct. If you go towards the generation 5, 6, you will be better off compared to your 4. All our new capacities which are coming, are coming with the latest generation of electrolyzers. You will get a better power cost output compared to the older plants. Correct. On the flip side of it, we have a very robust program of also upgrading our old membranes and electrolyzer, which is a continuous process which happens. Correct. Sir, is the power reduction could be to an extent of 15%-20% with the installation of 6th-generation membranes? Is there any- No, it's not that material. It's not that material, because it's only about, about close to 40 odd units per stack, which you get in a, from one generation to another. Your real power cost reduction comes from how do you do your power buying or your power mix. It's not too material on the electrolyzer, while that's the largest consuming center. Correct. Your power cost saving comes from your power mix. I think that's what it is. I think the material difference that we have on our cost structure is, that today, on an expanded base, 14% of our power mix is on renewable side, which is significantly lower in cost compared to current. Grid cost or the thermal power plant costs. Got it. sir, if you can- On our, as Mr. Agarwal was talking, the coal prices compared, we, I think in our buying, we've done better than the index values of the coal buying. Got it. Our power cost mix is lower than the industry average. Got it. Sir, here, if you can share, what was our average power cost for Q1, and how much savings we could assume, from Q2 onwards? Because last quarter you mentioned that our average power cost was close to INR 7.5 a unit. If you can- If you look at it as far, let me just go through the number. If you look at it from, if you look at it, we are currently at approximately INR 7 odd on power. Okay. That's the way it is, we have to set it. It was at 7.1, it has come down to 7, but in between, the coal prices have actually significantly also, at point of time, gone up. Correct. Today, the biggest change is the way the grids are now increasing their price. Yeah By levying off various assets. Got it. Coal price is lower, power cost is flattish for us. Correct. Sir, second question is on the epoxy side. Last time we mentioned that we are in a range of 15%-17% EBITDA margins for the epoxy business. Had that margins remained the same in Q1 FY 2024 also? If you can share your views in terms of the speciality volumes for our epoxy business. How much they are out of our total sales volume, and your thoughts of venturing into the B2C business for epoxy whenever we'll be keep on ramping those LAR capacities on commissioning, and then later on, going into the value-added products. Thank you so much. Yeah. That was a lot of questions to ask at one point of time. Yeah. I'll answer the last one first. As of now, there is no immediate plan to enter into the B2C market. In fact, many of the large B2C players are our customers, right? Okay. We do big volumes with them. Now, over time, that could change. As and when that changes, we will of course announce it, but as of now, there are no plans. We value all our B2C relationships with globally, marquee customers such as, Henkel, Mapei, Sika, et cetera, et cetera, right? If you look at the actual margins, we are confronted with a situation where we have free trade agreements with many countries, and an inverted duty structure in some of the base epoxy areas. For example, the Korean players like Kukdo, Kumho, et cetera, can supply duty-free into India. At the same time, Europe has removed the GST benefit for epoxy resins. Okay. We have managed to overcome these headwinds by actually increasing our specialty share, the one that you have mentioned. We are particularly strong in the wind sector. Compared to previous quarters, we have improved our specialty margin. I don't think we would like to disclose the exact number of the margin, what I can disclose and confirm what was said earlier by our Chief Financial Officer, Mr. Pavan Jain, is that our profitability of epoxy has significantly improved. We have doubled our quarter-on-quarter basis. I would not like to give the exact number of specialty sales and the segment-wide basis. Got it. You mentioned on a quarter-on-quarter basis, we have doubled our epoxy profitability. Yes. YOY, YOY. Sorry, YOY basis. YOY basis. Okay, sir. Thank you so much, sir. I'll join back in the queue. Thank you. The next question is from the line of Navin Sahadeo from ICICI Securities. Please go ahead. Thank you. Thank you for the opportunity. Very happy to see the sequential improvement in margins despite realisations correcting the way they did. First question on VSF. I think this is again, the second time when we are seeing that globally the prices have gone up a little bit. That's what the presentation says. Our blended realization again, has been a little soft or down rather QOQ. I'm assuming could be the similar reasons like last time because of, let's say, the importing, import duty or anti-dumping duty, I mean, being abolished or some material coming in from other countries, which has led to this impact. The cost, of course, helped us post a significant improvement quarter- on- quarter. My question is that I believe globally there has been a further some drop in prices in July and August. To that an extent, assuming that there is a further fall or a downslide in India prices, will margins hold at these levels because your pulp prices and caustic prices is going down further? You can see some directionally, some pressure on margins in the coming quarters on VSF. Yeah, you have summed up it, almost, correctly. There will be, some, pressure, but it is all very marginal. There are not big movements either way. Yes, prices, international prices have, reduced, since end of June. Mm-hmm. We also have to follow that trend in India also. There is some reduction in the raw material prices also. Okay. Everything moves. There are so many moving parts, and we have a pipeline in the transit of raw materials and all these things. There will be small difference, whatever way it takes. Yes. Largely, can we say that this is now the bottom? I mean, give, give or take few basis points here or there, but these margins are largely bottomed out. Is it a safe thing to say? We would like to think so. You never know, there are always surprises from China or sometimes Europe. Like, the things change so fast. Within one month, things can change, the global sentiment can change. Anything happens has its effect on everything. Largely, yes, you are right. Sure. Just on this, since you mentioned China and the global factors, and recently there were some news articles about spinning mills, like, seeing some shutdown or temporary closure in Tamil Nadu or the textile hubs. Does that impact our volume outlook in any way? See, globally, textile markets are not doing great, including in India, and not just in viscose, but across all the kind, all kinds of products, all kind of things, whether it is cotton or polyester or linen or viscose. It's a global trend, and exports from India have also declined, Q-on-Q also and Y-on-Y also. Correct. Everything is under a little bit of a slowdown. Sure. There can be some hit on volumes, is what you say from the current quarter, like, we did a pretty healthy utilization of 90% plus. Are we expecting some fall? We are trying our best to maintain the volume and also try to get more volume in export markets. Okay. We, we try to maintain our volume as best as possible. Understood. My second question was then on the chemicals business. Is there a delay in the CapEx of Chlor-alkali commissioning? I think the capacity increased from 1.3 to 1.5, which earlier was guided as Q3 2024. I think in the latest presentation says Q1 2025. There is actually, I mean, there's not a significant delay. There is about a delay because of the monsoon and all, which has been factored in there. The CapEx are going as per the plan. These capacities will come by, Q1 2025, could be Q4, exit 2024. There has been a fair amount of monsoon delay which has got into the system. Understood. Since the specialty chemicals is just around the corner to double, I believe, capacity, 123 further getting added, I think, Q2 2024, again, as, as we speak, probably. What kind of delta can we expect, broadly, if you can get some sense, how should we pencil in the commissioning of the specialty chemical segment? When you say delta, you are asking me about the revenue ramp-up curve? Some, some guidance as to like revenue will help broadly. Look, we will be doubling our capacity. As you can imagine, these are all batch process units, right? There are multiple underlying SKUs that need to be tested, qualified, et cetera. A typical ramp-up curve from start of commissioning to reaching full, let's say, operational capacity after all the qualification steps is done, is around 12 months, let us say. You can assume that we will make incremental steps of 20-25% per quarter over a year period. In a worst case situation, it could become Q5. That, that would be a good underlying assumption. Understood. On, and just on this margins front, similar to VSF, here also, prices, current spot prices are lower versus the previous quarter, I believe cost is also, some, some probably steam left to get that. Here also, should we see margin stabilization or directionally, some pressure can come? Margin, margin profile won't significantly change. Of course, I think at that point, I have to say that, when a new factory comes on, we are more likely to increase our share of base resin as compared to specialty, so the product mix will change. Sure. The inherent margin profile of the business will not change. We drive our business by spread over raw materials in this particular type of business. Sometimes there may be a time lag because of timing of purchase versus timing of sales, but that, that time lag also rarely exceeds the quarter, given the length of our supply chain. The margin profile won't change. The product mix will change because the newer capacities will probably first be consumed in base resin before we restore our base resin to specialty mix. Understood. Just 1 last question. In the initial comments, Pavan sir said that, the performance is net of the pre-operative expenses of these new, new businesses. Just wanted to understand what kind of impact is there because of the B2B business or even the paint that we have probably started some trial runs, as I know. What kind of impact are we seeing since the last one to two quarter to help us understand that these numbers are with including the impact of these pre-operative expenses? Not very significant numbers, I mean, but, yeah. I think we are not separately disclosing these numbers. Okay. These numbers are not very significant considering our overall numbers. Understood. Understood. Fair. That's it from my side. I'll come back in case I have more questions. Thank you so much. Thank you. The next question is from the line of Prateek Kumar from Jefferies. Please go ahead. Yeah. Good evening, sir. My first question is on VSF business. From the product mix of domestic versus exports, which are mentioned, it appears that domestic business was much weaker on a year-on-year basis versus international. Is there dumping from, from of the Southeast Asian countries increased significantly because of global environment, or how, how should we see that? The VSF imports are not happening much currently, but what is happening is the lot of viscose yarn is coming from China at a very low prices, and that is affecting the profitability of our customers big way, and that is creating pressure on everyone. This is all because China consumption is less than the production of viscose fiber yarn and all that thing. China exports are also low to the West, U.S. and Europe. These are all trade flows happening. As such, VSF imports are not very high. Because yarn is getting a bit more, so we are not able to push our product to, fiber product to our yarn customers, and that's why the domestic demand seems weaker, now. Domestic demand is anyway weaker, even without this much import. That import also then dampen prices of yarn and the profitability of spinners. They, they evaluate which fiber to run, which product is profitable at that level. Okay. Other question is on new, new businesses. Can you highlight how is the traction in the paint services business which you have started with your, I think, employees or friends and family in the painting segment? How is the initial traction, and what is exactly you are doing there? Yeah. The painting services business that we have started is a trial service where we are addressing painting services solutions within friends and families of Aditya Birla Group. Obviously, this is to develop and improve on certain Standard Operating Procedures that we have developed. As we know that we don't have our products right now, we are using products from the market. This is to develop better SOPs and prepare service teams for the future. And your CapEx this year, this year your CapEx in this paint is INR 4,200 crore, over INR 2,600 crore, which for last year. So remaining is only, I guess, around INR 3,000 crore in this segment. So all of it is expected to get incurred in FY 2025, or some of it is like, more, more like working capital related expenditure, so it can, it may come as an operating kind of CapEx later in the FY 2026 or 2027? No, the overall CapEx spend till 30th June is INR 3,638 crore. That's the right number, I think you are having a different number. No, I mean. Cumulative. Cumulative spend as we painted INR 3,200 crore. INR 3,600. INR 3,600 crore, yes. INR 4,283 crore planned for this year. Balance of the INR 10,000 crore- In 2025. Will be spent in 2025. Some small amount may still be like the, the performance guarantees, like payments, et cetera, that may go to FY 2026, but largely everything will be spent by FY 2025. Okay, on B to- B2B e-commerce, now we have started this portal on this quarter. Like initial expectation, what will be our gross revenues and the like the kind of take rate revenues which we are looking at in this segment? Will this segment be reported segm- separately in our earnings? How should we look at it? Not will not require separate disclosure considering the overall number. But we'll, and it, it... Because this year, I think, only Q2 we will have the full-scale business on the B2B segment. So as far as separate disclosure of revenue, et cetera, is required, we will go by the numbers for the year, whether it will require separate disclosure or not. But the, the, for the current year, we will have full scale operations only for Q2 kind of Q2 plus 1, 1 month or something like that. The segment would have like gross revenue, which will be get reported or just, our take, from the gross revenue? No, no. Gross revenue, gross revenue, because the model is that- Ladies and gentlemen, we've lost the line for the management. Please stay connected as we connect them. Ladies and gentlemen, thank you for being on hold. We have the line for the management reconnected now. Mr. Kumar, you may proceed with your question. Thank you. Yeah, I was asking, so we will be reporting gross revenue in this segment, and not the net revenue which we get as a take rate, for the B2B commerce segment? No, we will report the gross revenue because the billing is by drafting to the customers. Can you mention in your opening remarks, we are looking at some private label products also in this segment. Can you elaborate on this, like, like you're looking at manufacturing contract management of tiles, et cetera? We are still in the, I mean, not in the state of final disclosures in this regard. We are exploring in different product categories, private label business. I think once we reach to the finalities, we will come out with the disclosures. And last- The idea of telling about this is that we, we will be looking at private label manufacturing, and the idea is that that should help us in augmenting the margins. Right. The last question on your debt, you have like INR 3,500 crore debt as of Q1 2024. What is the peak debt we should look at in FY 2024-2025, with the conclusion of paint CapEx? Sorry, 25 you are asking? About 10,004. 25 you are asking, 24? Yeah, during the CapEx of paint business. What is the peak debt we should look at versus INR 3,500 crore for 1 Q? The peak debt, it will depend upon, I mean, how the existing businesses flow cash flow. See, CapEx part is certain, of course, but, the, the debt requirement will be dependent upon how the cash flows, are coming from the existing businesses. Of course, it looks like whatever CapEx requirement is there, at least we will have to meet that largely by the borrowing only. Like, I assume it would be somewhere in the range of INR 8,000-10,000 crore, on the- Yeah, peak of the debt, it could, gross debt could be that kind of level. Again, as I told you, the, the numbers will depend on how the cash flows are generated by the existing businesses. Net debt, of course, will be lower. Net debt will be, we, we continue to hold about INR 3,000 crore plus as cash surplus, so net debt, of course, will be lower. Right. Thank you, sir. These are my questions and all the best. Thank you. Thank you. The next question is from the line of Vipulkumar Shah from Sumangal Investments. Please go ahead. Hi, sir. Thanks for the opportunity. What will be our paint capacity at the end of this year when first phase of that business gets built? We have announced a total capacity of 1.3 billion liters. By the end of this financial year, we will have a target of 3 units operational. The total capacity of those 3 units put together would be approximately 630 million liters. That is the full scale capacity. Okay, sir. Thank you. Thank you. Bye-bye. Thank you. The next question is from the line of Shyam Sundar Sriram from Franklin Templeton. Please go ahead. Hi, sir. Good evening. Thanks for taking my question. For the first question is on this Lubrizol CPVC plant per se. You did mention about it in your opening remarks. We have signed about 1 lakh metric ton of CPVC capacities that should begin by in this 2023. This INR 708 crore of chemicals CapEx, does that include the CapEx for Lubrizol, or that would come later? If so, how much one should expect per se there, any sense if you can provide there? This is, so when if you looked at when we made the Lubrizol announcement, first 2 corrections. 1 is that the plant startup will happen in this financial year. Plant construction. Construction will start up. It's not plant startup. Yeah, yeah, sure, sure. Yeah. Yeah. Which means construction will come to an end by FY 2025, middle to end. The second part was, if you looked at the announcement when we did with Lubrizol, this is a zero CapEx investment for Grasim, and the entire, I'll say 100% investment is being done by Lubrizol. There is no CapEx impact on Grasim balance sheet due to this particular plant coming up at the site. Oh, understood. Understood. Understood. This is essentially an operational, so Grasim will lend their operational capabilities and provide the products here? Absolutely. Yeah. We'll supply the chlorine to them by pipeline, and we will do the operations for- Operation management for them, as well as the entire CapEx sales is their responsibility, it does not impact us. Okay. We are actually protected from the vagaries of the market in this operation. Understood. Understood. Understood. Therefore, the, you'll be compensated for the OpEx costs, essentially, I mean? We'll be compensated. We will not get into the disclosures of that cost. We'll be compensated to the OpEx costs plus our management fees, operation management fees. Understood. Understood. That's helpful. Sir, are there any more such products in the pipeline? How do we see the evolution here, per se? This is the first one which is being attempted, and I think as we proceed ahead, it will evolve as we go along. Today, very difficult to say anything beyond this. Understood. Understood. Thank you, sir. Thank you for that. Sir, the other point is on capital allocation. We had invested in Aditya Birla Capital sometime back in June. Now, just wanted to know, are there any such investments planned in the, in our holdings per se, over the next two years? Any perspective that you can share on the capital allocation? As the, the all the financial services sector is doing very well currently. The, the capital requirement was higher at Aditya Birla Capital also. That is how we have done this INR 3,000 crore equity raising in Aditya Birla Capital. We are of the view that for the time being, at least for next two, three years, that should meet their requirement. I mean, as of now, there is no other plan other than whatever we have already invested INR 1,000 crore. Understood. Understood. No other plan, as in, no other, outside of the whatever CapEx that we have outlined, nothing else outside that in the, from our visibility perspective? Yes. Yes. Okay. Okay, okay. Thank you, sir. That's it. I, I'll fall back in the queue. Thank you very much, and best wishes. Thanks. Thank you. The next question is from the line of Mudit Aggarwal from Motilal Oswal Financial Services. Please go ahead. Hi, good evening, sir. My first question is on the, like, the brands and retail preferences are changing towards more on the sustainable product side. How we are collaborating with us on the product development and innovation? I assume you are referring to the viscose? Yes, yes. Yeah. Yeah. There are a lot of work is happening on the sustainability, especially circularity, where the used garments or pre-consumer waste are converted back into textile, usable textile. We have developed our capabilities for both mechanical recycling as well as chemical recycling of used textiles or industrial textile waste. We are also working very closely with some international brands, where we use such raw material along with our virgin raw material and supply the final fiber, which has almost 30% recycled content. These are initial stages for this trend, and we are well equipped to participate in this one as the things will develop. India is going to play important role in the entire international global textile value chain. This is, I think, very encouraging for Indian textile value chain also. Okay. Okay. Sir, just 1 bookkeeping question on that, tax side. This quarter tax rate comes out around 11.3%. Is there any adjustment, or what was the effective tax rate for the quarter? Effective tax rate is 12%, considering our exemptions, whatever we have. We have already shifted to the new tax regime, and this is the, I think, tax rate we'll have considering the AMT deduction for the dividend income, et cetera. That is the expected tax rate for the current year. Okay. Good. Thank you, sir. That's it from my side. Thank you. The next question is on the line of Nirav Bothra from Anvil Research. Please go ahead. Thanks for the opportunity again, sir. The one question on the pulp prices. Last quarter, our average pulp prices were close to $900 a ton. If you can share it for this quarter, and what are the current rates for the pulp coming to us in Q2 end? Pulp prices, traditionally, dissolving grade pulp prices are normally expressed in terms of ACF reports. ACF reports pulp prices every week. Currently, the hardwood, dissolving grade pulp prices are at $840. Okay. Softwood dissolving grade pulp is $850. There has been some reduction compared to previous months, and this is the current price. What was the average for Q1 FY 2024, sir? Well, see, we have our formula for procurement of pulp, where we use the previous month's pulp price for shipments. Okay. These things, when there is a long, shipment time. It's a, like a continuous thing. I will not be able to give you average figure for the quarter for purchasing. It will be very similar to the moving trend of, average of the previous month. Got it, sir. Sir, 1 question on the chemical side. If you can share, like, out of our total caustic sales, is there any proportion of contractual sales into there also, like, out of, let's say, whatever we sell in the domestic market, what is the mix in terms of our contractual and the spot sales? If you look at it, our entire flake sale is spot sale. That's straightaway about 20, 22%-25%, which is totally spot. Flakes is entirely there. Okay. On the caustic side, if you look at it, approximately, I would say our contractual sales will be a larger proportion to be around, of around 60%. On the liquid side, the balance 40 would be a combination of monthly contracts and spot contracts. If I were to look at, at the entire business level, you would say our contracts to contractual would be a ratio of 60/40. Correct. Some, some proportion of higher ECU could be because of this contractual arrangements also, which... Clearly, the flakes and the contractual. Got it. Some of the long-term contracts are, they are 6 months, so they are factored in for the various, whatever the market allows it to factor. Got it. Sir, a last question from my side is on the amount of power what we purchase from the grid, because you mentioned that the, that grid power has become costlier for most of the players in the industry. If you can share how much is the power that we purchase from the grid for our total Chemicals division? I think you got it, I think you didn't read it right. I said the green power is cheaper than the grid power today. Okay. It's not more expensive. Actually, green power also comes through the grid, but they are back-to-back contracts by which we work. Our today, green power is 14%. Our overall, our own thermal power plants, which run, give us approximately 40 odd%, and the balance is what we are buying from grid. Sir, last question, if you allow. What is our capacity utilization for the WAPS division? Because I think we have some close to 891,000 tons of capacity there. Top capacity utilization hovers between depending upon seasonality, because WAPS sometimes are actually have a large seasonality factor. For example, in the monsoon season, the polyaluminium chloride liquid sells much more, whereas CPW, chlorinated paraffin wax, which goes largely into construction, comes down. If I were to look at a weighted average annually, we are somewhere we operate between 73%-75%. That's where we are. Got it, sir. Thank you so much, and wishing you all the best. Thank you. Thank you. you. The next question is from the line of Ronald Siyoni from Sharekhan Limited. Please go ahead. Thank you, sir, for taking my question. Sir, I wanted to just ask about, about your market share, in the wake of, if there's no antidumping duty, then, if the competitors, are increasing the capacities, how do we remain confident of maintaining our market share? Which business you are talking about, Ronald? About West Coast business. Yeah. Currently, we have a market share of close to 95% because the imports are not taking place because BIS has introduced a quality control order. The major sources of imports, like Indonesia and China, are not able to export. But- Mm-hmm. We do plan to, we do expect to maintain our market share at high level even when this phase is gone. This will again depend on the competitiveness and the relationship with the prices and services and all of that. Mm-hmm. Okay. In terms of your, Lyocell investments, how, how, what kind of, if you can elaborate on, what kind of CapEx would you, you would incur, say, on the capacities on point and basis, or what kind of returns you are expecting, at the current, current rate of realizations in Lyocell? Which investment you are talking? In Lyocell capacities. We are not making any new, big new investment in Lyocell capacities immediately. We have existing Lyocell capacities, where we have done debottlenecking of existing lines with a very minimal CapEx. Those lines are working well, and the prices are quite stable and in line with the general market trend for all the fibers. They are working well. We will inform the market when we have plans finalized and approved for the new capacity action. Okay. Okay. Thank you very much, and best of luck. Thank you. Thank you. Due to time constraints, this was the last question. On behalf of Grasim Industries, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.