Ladies and gentlemen, good day and welcome to Q3 and nine months FY 2021 earnings conference call of Oriental Carbon and Chemicals Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. 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. Akshat Goenka, promoter and Joint Managing Director of Oriental Carbon and Chemicals Limited. Thank you, and over to you, Mr. Goenka. Good afternoon and a very warm welcome to everyone. Along with me, I have Mr. Anurag Jain, our CFO, and SGA, our investor relations advisors. Before we begin, I hope you and your loved ones are safe and doing well in these unprecedented times. I hope you have received our result and investor presentation by now. You can view the same on our company website. I'm happy to report that we have witnessed a healthy pickup in sales momentum post-COVID, a disruption which has helped us to deliver a strong financial and operational performance across all parameters in quarter three FY 2021, with a top line growth of 33% year-on-year and quarter-on-quarter in quarter three. Post the reopening of the economy, the tire industry has witnessed strong demand growth in replacement segment, driven by multiple factors like pent-up demand, shift towards personal mobility, a buoyant rural economy and increasing vehicle utilization trends. Restriction on import of tires, higher demand from road construction, mining and e-commerce segments has further propelled demand. Though it remains to be seen how much of it is due to pent-up demand and how much of the growth is sustainable. We are pleased to inform you that operations at both our plants have attained normalcy and utilization levels have gradually resumed. As indicated on our previous two earnings calls, we envisaged a delay in our CapEx plan on account of shutdown period during the pandemic and unavailability of labor thereafter. However, post the unlocking, work has been progressing well and we expect the phase I of the 5,500 tons insoluble sulphur line and the 42,000 tons per annum sulfuric acid line in Dharuhera to be commissioned by July 2021, which will spur the next level of growth for the company. We are committed towards developing new products and offering customized solutions for our customers. We are long-term suppliers for most of the prominent global and Indian tire companies. We are focused on leveraging our strong execution track record to help us increase our volume share with existing customers. To conclude, this has been a good quarter for us. We expect the sales momentum to sustain going forward. With rising auto and tire capacities domestically and globally in the next decade, we are well positioned to capitalize on the enormous opportunities and expand our market share further. The Indian tire industry is embracing new trends to meet the changing market dynamics. There is growing emphasis on lowering emission levels and enhancing fuel efficiency in vehicles. The onset of BS6 emission norms last year has accelerated the trend towards more efficient radial tires as against traditional bias tires, especially in the LCV and TBR segments, which remain under-penetrated. We expect that with increasing urbanization, penetration of vehicles in rural and urban areas, shift towards radialization and increasing investments in auto and tire industry will in turn increase the insoluble sulphur going ahead. We will be focused on consolidating our dominant position in the Indian market while increasing our penetration into high potential geographies like North America. We are focused on developing high quality insoluble sulphur through continuous investments in technology and R&D. Now I would like to hand over the line to Mr. Anurag Jain to update you on the financial performance of the company. Thank you, Akshat. I will take you all through the standalone financials of the company. Total income for Q3 FY 2021 was up by 33% year-on-year to INR 109 crores as compared to INR 81.9 crores in Q3 FY 2020, driven by recovery in demand post the reopening of the economy. EBITDA for Q3 FY 2021 stood at INR 42.8 crores as compared to INR 24.8 crores in Q3 FY 2020, a growth of 72% year-on-year. Our sustained thrust on cost control and better sales led to operational efficiencies and resulted in strong EBITDA margins for Q3 FY 2021 of 39.3%, up by 900 basis points year-on-year. However, due to upward trend in raw material prices, the next quarter EBITDA margins are expected to be in the early 30s. Going forward, we expect our long-term EBITDA margins to be in the range of 28%-32%. Profit after tax for Q3 FY 2021 stood at INR 28.4 crores as compared to INR 16 crores in Q3 FY 2020, a growth of 78% year-on-year. Our PAT margins for Q3 FY 2021 improved by 60 basis points to 26.1%. To quickly summarize the nine-month numbers, total income for nine months FY 2021 stood at INR 237.8 crores compared to INR 264.7 crores in nine months FY 2020. EBITDA stood at INR 85.3 crores as compared to INR 79.5 crores in nine months FY 2020, a growth of 7% year-on-year. PAT stood at INR 50.2 crores as compared to INR 54.4 crores in nine months FY 2020. With this, I would like to open the floor for questions and answers. 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 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 when asking a question. Ladies and gentlemen, we will wait for a moment while the question queue [audio distortion]. The first question is from the line of Riddhesh Gandhi from Discovery Capital. Please go ahead. Hi, congratulations on your numbers. Just a couple of quick questions. Is the higher revenue and profitability that we've observed this quarter driven by actually a pricing increase by higher utilization? How should we be thinking about it, how should we be looking at it going ahead into Q4 and next year? As far as the guidance of Q4 is concerned, Mr. Jain already gave it in his opening remarks, where we are expecting the EBITDA margins to be in the early 30s in Q4. Q3 was, I would say, driven largely by two things. One is optimum capacity utilizations, and secondly, by benign raw material prices which have now started going up drastically. How much would we be at on our existing capacity? Sorry? In terms of capacity utilization, how much would we be on our existing capacity? In quarter three, we were in the 90s. Okay. You would expect that to continue into Q4 as well? I mean, around about that. It's a very dynamic situation. Orders are coming in month to month. The capacity utilization as of now in quarter four is also expected to be good, even though not as high as quarter three. Just to understand for the incremental capacity, which we'll be adding as and when that comes on stream, how long will overall the ramp-up take and would there be operating and leverage benefits as effectively the new plant comes in? How should we think about quantifying it from an EBITDA perspective? There are three ways to look at it. Firstly, obviously, something that one cannot escape is that there will be depreciation and interest that will come across, right? That is an inescapable fact. As far as the EBITDA level is concerned, we expect almost no fixed cost increase on account of the new capacity. It will be very marginal, if any. Operating leverage would obviously be very high. As far as the ramp-up is concerned, from a technical standpoint, it can ramp up very quickly. It all depends on how the sales ramp-up and the allocations come in, which we are working on. It's a bit too soon to say whether it will take a few months or it will take six to nine months, or what it would be. I think it's a bit early to comment on that. T he ramp-up would be based on the sales allocations. Got it. Thanks. I'll get back in queue and all the best. Thank you. Thank you. A reminder to the participants, anyone who wishes to ask a question may press star and one now. The next question is from the line of Aditya Khetan from East India Securities. Please go ahead. Hello, sir, thanks for the opportunity. My first question is on the EBITDA margin. Sir, on a yearly basis, we are witnessing 800 basis point jump in the EBITDA margins, and sequentially the margins has been maintained. If you can give a rough bench on the spreads of sulfur and coating oil insoluble sulphur, so that would be helpful, sir, to understand. What we are looking at today is that roughly about 10%-14% increase in raw material costs overall in Q4 over Q3. Again we think that at least before it stabilizes, there could be some more increase going into Q1 of next year. After that, we feel that the market should stabilize, and it should come down. That is as far as the raw material part is concerned. As far as the margins are concerned, I think we have already said that in Q4 we are expecting our EBITDA margins to be in the early 30s and going forward. Earlier we used to say that our EBITDA margin should be in the late 20s. Now we are saying that it should be between 28% and 32%. Sir, you said that we are witnessing some increase in the raw material cost in Q1 also. Are we also able to negotiate with our clients insoluble sulphur sales prices or the trend is not visible as of? No, the trend is not visible as of now. For the next quarter we can expect some margins to be around 27%-29%. Would that be a fair assumption? No. We have already said in the opening remarks that in quarter four, we expect margins to be in the early 30s. Sir, just would like to know, how is the North America market shaping up right now and what is the opportunity post-lockdown have you witnessed? Is there any improvement in terms of supplying the consignment or there is still some shortage of shipments which is affecting us? What is the market size of North America, what we can target for the next one? Market size of North America is around 40,000 tons. From a technical standpoint, we have seen very good traction in North America and things are progressing. Now we still need to get the actual allocations. The existing supplies that have been going, have been going smoothly even though the freight rates have gone up and availability is a challenge, but we manage. Sir, are we witnessing any new capacities in sort of brownfield coming up for the next three years? Please repeat the question? Are we seeing any new capacities, brownfield expansion coming up by Eastman Chemical or Shikoku Chemicals Japan, any of the competitors expanding their capacity? No, Eastman and Shikoku are not expanding. None of the competitors are expanding you mean? Sunsine Chemicals has announced an expansion. That's the only thing that we are aware of. Sir, what would be the full year tax rate guidance for FY 2021 and consequently for the next two years, what can we take a number on that? Our tax payout would be again on MAT for this year and next year also. We'll get the MAT benefit. We can expect around 20%-22%, we can be in that range. We will be paying our taxes on MAT basis this year and next year also. Maybe. Sir, that's it from my side. Thank you. Thank you. The next question is from the line of Pritesh Chheda from Lucky Investment Managers. Please go ahead. Sir, my first question is, the INR 100 crore revenues run rate that we see and we had a similar number in FY 2019. Throughout FY 2019, fair to assume that the existing capacity would largely be fully utilized at the INR 100 crore revenues run rate or would you have any more room to post incremental utilization on these numbers? I think at this INR 100 crore run rate, we are in the 90s. We scaled up more than that or that's usually the I mean, plus, minus here and there can happen, but because at this run rate, we are largely at optimum. There could be obviously 5% here or there more room. Sorry, largely we are at optimum capacity utilization of this INR 100 crore plus run rate for the quarter. My second question is, when the new lines come in, which is the 5,500 tons two lines which you are adding in phase I and phase II. Does it mean that the margins directionally should go higher because of the operating leverage coming up on those lines versus the historic margins that we have? We have already revised our margin guidance upward in this call to 28%-32% from the earlier stated position of 25%-28%. What is the depreciation number which will get added on the entire CapEx in two parts, if you could tell? One second. The CapEx that will come in is around INR 150 crores. Let's see what the depreciation number will be. Just give us one second. Around INR 6 crores. INR 6 crores extra. On the total CapEx? That is annualized. Not on a quarterly. INR 6 crores on the annual. CapEx of INR 115 crores, which you have should do? Right now, INR 150 is coming on, and then the balance INR 60-INR 65 is for the second phase. Thank you. We would request the current participant to please come back in the question queue for any follow-up questions, as we have several participants waiting for their turn. The next question is from the line of Anuj Sharma from Emkay Investments. Please go ahead. Also, we would request the participants to please limit your questions to two per participant. Anuj, you can go ahead, please. Thank you, and congratulations on those set of numbers. My first question is, we are currently 10% of world capacity, and we have slowly inched up and after this expansion of 11,000 will be 11%-12%. Is that a trend when the world demand is growing by 2%-3%? Can we continue to inched up our market share? What is our thought process let's say for five, 10 years down the line? What market share we see we can aspire for? Can you please repeat the question? It wasn't clear. I'm saying that we have gradually, over a period of time, inched our global market share to 10%. After 11,000 ton expansion, we'll be 11%-12% of global market share. In the next five, 10 years, can we see our market share only increasing? What is the global market share we aspire for in the next five to seven years? After these current expansions, how much it could increase by and all is, I think, quite far because even after the current expansions, our capacity would be close to 47,000 tons. If you look at the FY 2020 sales numbers, they would be very low. Very, very low looking compared to 47,000. Even if we go from today to actually selling out 47,000 tons, that is a massive growth rate in the next three to four years. Right now, we're just focused on that. All right. My second question is, in the next, let's suppose 12-18 months, we will see 15% of incremental capacity getting added. How many instances in the past have we seen that this kind of capacity additions have happened, and how has it led to pressure on the realizations? While we have said in the last call it directly won't affect us, but just your thoughts as to how it has behaved historically. Actually, if you look at it, the incremental capacity that is coming on now as a percentage of overall global capacity is much lower than what used to come earlier. In absolute terms, it's the same amount. In percentage terms, it's much lower. I don't think that this incremental capacity on a standalone basis should put any pressure or anything. It's all actually linked to the end market demand. If demand is robust, everything will be fine. Just in continuation to that, see, one of our competitors is we have been very efficient in our CapEx, but our Chinese competitor would be putting up the 30,000 tons at 40% our CapEx cost. Again, with this kind of low CapEx cost, would that hurt the relations? The figure of 40% of our CapEx cost, I don't think that is correct at all. They seem to be putting 30,000 tons at INR 305 crore. Right? Our CapEx is approximately INR 216 for 11,000 tons. 45%-47%, maybe. Maybe less than half. See, I think there is some mistake in the numbers. Secondly, our CapEx includes sulfuric acid plant expansion also. As far as I know, their CapEx does not include the common utility costs. It's not an apple-to-apple comparison if you look at it that way. From INR 215 crores you have to actually remove around INR 30 crores-INR 35 crores which is for sulfuric acid. insoluble sulphur we would be at INR 180 crores. All right. That's better. All right. I'll come back for later questions. Thank you. Thank you. The next question is from the line of Anubhav Rawat from Monarch Networth Capital. Please go ahead. Hi, good afternoon, sir. Just couple of questions. Sir, given the supply insoluble sulphur, what is our plan for this phase II? I mean, will it start immediately after phase I? What is your thought process on that front? I think we have another six months to decide because this is getting commissioned in July. The earliest we would start is July. I think today we do not need to decide or commit anything. Let us see how the next six months pans out, and this level of demand continues or increases or subsides. July would be the right moment to actually even start considering a call. We can start at a day's notice. The day we want to start, next day we can actually start off. There is no pre-work required. In July we will decide. Understood, sir. Sir, for this quarter, can you give us the split between the domestic and export revenue? Just give me one minute. About 60% has been export and 40% has been domestic. Fair enough, sir. Sir, just on our gross debt and cash on books, what would be that right now? What would be the? Gross debt and cash on books, sir. Gross debt we are expecting by end of March as of January 1st. As of January 1st. The total borrowing that we are looking at is about INR 163 crores as on December 31st. No, no. December 31st it's not INR 160. In long-term. Including long-term. Including working capital. This includes working capital borrowing also. INR 163 is the total borrowing, out of which around INR 40 will be working capital. The investment would be around INR 283 crores. Sorry, total. I'm so sorry. INR 150 crores. Sorry, sir, I didn't get. 150 is what? INR 150 crore is the total investment. This includes cash on books and your investment, right? This is the investment. This cash on book is higher. The cash on books plus investment is higher, INR 150 crores. INR 150 includes both, investment as well as cash. Perfect, sir. Thank you. I'll come back in the queue. Thanks. Thank you. The next question is from the line of Shashank Kanodia from ICICI Securities. Please go ahead. Good afternoon, sir, and congratulations for the good set of numbers. I have two sets of questions. The first one, you aspire to attain some 10% market share in the North American market. Could you please guide us what is the market share now, and are we on track for achieving next two to three years? We are certainly on track to hit 10% plus market share in North America in the next two to three years. Our current market share remains in single digits. Roughly 5%-7% odd, sir? No, less than 5%. Secondly, can you help us with the sulfuric acid prices for the quarter and sequential movement? I think there should be good amount of gains arising out of rising sulfuric acid prices as well to us. Any color that you can share? Sure, sir. I think prices are very dynamic, they usually change with the change in the sulfur prices. For example, now since the sulfur prices have started going up, the sulfuric acid prices have started going up. There is nothing fixed about sulfuric acid price. It varies with the sulfur prices. Sir, in Q3 versus Q2 of last quarter, were the prices more robust in terms of like 1.5x, 2x? Q3 was more than Q2, yes. Sir, any color in terms of what quantum increase? Was it 50% more or 100% more? I will tell you later. I'll just get the quantum, and I will tell you later. It will be off the line. I will tell you the exact percentage increase. Sir, lastly, on the phase II insoluble sulphur, sir, at max, we'll commission it by end of FY 2023 or it can even go beyond that? This one is coming in July 2021. I would say the earliest it would commission is December 2023. You said end of FY 2023, right? 2021, 2022. December 2022 is the earliest it would commission. That is the earliest. That is not the latest, because we would need 16, 17 months from when we start off, and we will not start off before July, August at the earliest. Right. Fine, sir. Understood. I'll wait for the. To answer your question, they were higher by about 30%. 30%. Sure, sir. Thank you so much. Thank you. The next question is from the line of Nitin Gandhi from KIFS Trade Capital. Please go ahead. Thanks for taking my question. For phase I, due to current environment and lockdown, do you see some asset turn changing for you at a peak level? No, because I think the cost is still in control. Okay, how much is peak revenue is possible with current price? Peak revenue with the current capacity? Sorry, can you repeat peak revenue again? Peak revenue for the phase I expansion, expanded capacity. Expanded capacity, peak revenue should be around INR 65 crore-INR 70 crore. That will be coming at a margin of 28%-30%, right? EBITDA margin. 28%-30% is the overall, 28%-32% is the guidance for the company as a whole. For this expanded capacity, it will be comparatively higher, right? Y ou should not look at it that way. Theoretically, what you're saying is right. Okay. Thanks. Thank you. The next question is from the line of Dhruvam from HDFC Fund. Please go ahead. Thank you so much. Just one question, all others are answered. On the tax rate, you mentioned that you will be under MAT for the next two years. That effectively means about 18%, right? Yes, that will be the payout. Correct. Why I'm confused is because prior to FY 2020, you were paying about 27%, 28% effective rate, which was well above then MAT rate. Has something changed that you are in this revised low rate now? No, we have never paid above the MAT rate. The P&L obviously reflects the different picture. P&L is the provision that we made, which is on the actual rates, and then the difference gets adjusted in the deferred tax. Deferred tax. Okay. Yes. The effective P&L rate will be around 25%, and the cash tax will be around 18%, is it? Yes. Got it. That's good. Thank you so much. The next question is from the line of Kunal Mehta from Vallum Capital Advisors. Please go ahead. Thank you very much for the opportunity. My first question, I just want to understand the margin bracket which we are guiding for now is 28%-32%. When I look at historical margins, we've been somewhere in the range of 26%-28%. By giving this margin guidance with the next year or two, are we specifically seeing that this sort of capacity utilization which we are running at, which is running to the superior margin? Of course, you have your spreads which is in a favorable domain. This sort of capacity utilization, we would continue to do so in the next year quarters and sometime. I'm excluding the new capacity, but just from the base capacity, this utilization should continue for us to earn this level of margin, 20%-32%. Even historically, our margins have been around these figures. We have been guiding on lower margins, which is what we always do. The actual achievement has been higher. Okay, sir. Kunal, can I just double check for you, do you have any specific figure that you're referring to? I was looking at the historical, January and quarter margins, and I could see that in most quarters or maybe in most years, we have ranged somewhere around 27%, 28%. That's been the trajectory which we have, which we've been on. If your question is that, is the 28%- 32% guidance we are giving dependent on capacity utilization being robust, then the answer is yes. Naturally, it is dependent on capacity utilization being robust. Okay. Yeah. That is what I wanted to understand. Dependent on capacity utilization, actually. Correct. Secondly, just wanted to understand this new 5,500 tons capacity. Last time when we saw the capacity coming up at Mundra, similar size, I think it took us 18 months to, but even the 24 months to build it, use it to full scale. This capacity of 5,500 in phase I, do you expect it to be used in a similar timeframe? At least 15-18 months for it to reach full 5,500 tons? Two differences. Last time when that capacity came in, we were instantly hit by a global downturn in the auto market in 2019, and then 2020 was a COVID year. It would not be a like-to-like comparison. Also as a percentage of increase in capacity, this one would be lower than the times it has come on to Mundra. I would expect it to be much better than the ramp-up in Mundra. Understood, sir. This last question from my end. I was looking insoluble sulphur prices, and I think this quarter I saw, as we reached the end of last quarter, in around December. Last week, I think the prices had started to fall off sharply, I'm talking about the finished product prices. While the raw material prices actually were starting to be, as you mentioned also, that they were on the higher side as compared to other quarters, we were able to get good inventory at a cheaper price. Just want to understand, this margin guidance which you have given for the Q4 is also including the lower finished product prices also, right? That's correct, because in quarter three, EBITDA margins are close to 40%, and we are guiding for in Q4 for them to be in the low 30s%. We factored that in. Got it, sir. Thank you very much. All the best for the earnings. Thank you. The next question is from the line of Pritesh Chheda from Lucky Investment Managers. Please go ahead. Sir, what is the net supply chain globally that we will see post the addition from your side and Sunsine and some capacity reductions which were supposed to happen over the next two years? No, please. I didn't understand the question. I said what should be the net global supply change which will insoluble sulphur post the capacity increase of 11,000 tons that we have planned and 30,000 tons that China Sunsine has planned, and there were few expected closures of old capacity. I would say the net increase would be around 20,000. 20,000. If you include Sorry, our 11, Sunsine's 30, and the reduction of the Japanese plant of Eastman's, then net increase is around 20,000. That's about 6% of total demand as of now. My second question is, sir, when is the phase I going to get commercially operational, which was initiated from quarter one of 2022? July, that's what we're targeting. That's what we expecting. It's on track, right? Yes. My last question is, sir, sulfuric acid as a percent of our revenue should be how much? Ballpark, if you could help us do that. Yeah, we'll just tell you. One second. It should be about 6%-8%. Okay. Lastly, you said INR 70 crore is 6%-8% currently. Now. After the going forward or now? [crosstalk] After the blue line comes up if that also ramps up well, it would be higher. No problem. This 42,000 of sulfuric acid will also come in phases, right? No. This entire thing is coming now in July. Okay. sulfuric is coming immediately. Yes, it is part of the upfront CapEx. The two CapEx is put together, what should be the peak revenue based on the realizations which are as of now? When you mentioned INR 70 crore is peak revenue, phase I. phase I, phase II put together should be what revenue, sir? phase I, we have already said it should be around INR 70 crores. If you take phase I and phase II, it should be around INR 125 crore out. Sulfuric acids. INR 10 crore or so. INR 135 crores. Roughly INR 135 crores. 135 crore, the entire CapEx revenue, right? INR 135 includes everything? INR 135 turnover should include. Everything. Okay. Thank you very much, sir. Thank you. The next question is from the line of Anuj Sharma from Emkay Investment. Please go ahead. Thank you again. Sir, we keep hearing about new product insoluble sulphur now. are these products more incremental in nature or once in a while we can have one revolutionary product which can have significant efficiency enhancement, or it's mostly incremental? It's mostly incremental. Just in a matter of three years, what proportion of revenues could come from new product launches? Eventually the market starts moving towards it, so it's very difficult to predict how soon market will move, when it will move. It just happens. It's very difficult to predict it like this. Sir, on your subsidiary, Duncan Engineering, congratulations. It has been a good turnaround and been profitable. Do we have plans for new segments within Duncan or it will pretty much remain a steady ship as it is now? Sorry, please repeat the question. I'm saying, you've done well with Duncan in terms of its turnaround over a period of time. Do we have any plans to introduce new products or it will remain a steady ship as it is now? Last few years was in the turnaround. Now we've actually beefed up our top management team there, and now the focus for that company is now going to be growth. That's what we are embarking on now and that's what we're going to attempt to do. It will be existing products or some new areas you're looking at? I would say it would be improved versions of existing products as well as complementary products that we don't have in our portfolio that can go to the same set of customers, which our competitors are already in. The missing products in our portfolio are now going to be attempted to be added, and that's how the growth is expected to come. My last question is, we had indicated in the past that new capacities will primarily cater to under-penetrated companies and geographies. In terms of tie-ups, while if it was existing relationship it would have been easier, but any update on any new customer or geography you've been able to tie up for this coming up or upcoming facility or capacities? Thank you. We are still in talks. Since it has not been concluded, it would not be fair for me to say that or give details on it. We are getting good traction. All right, sir. All the best. Thank you. Thanks. Thank you. The next question is from the line of Samarth Singh from TBS Capital. Please go ahead. Thank you for the opportunity. Two questions. First one is, we are planning on moving to gas at Mundra. Has that happened already? It's going to happen from May. From May. What is the expected savings in that? The expected savings are in the range of INR 1 crore - INR 1.5 crores. Okay, great. Second question, out of the CapEx for phase I, how much have you spent already as of December 31st? Around INR 100. Okay, great. Thanks very much. Thank you. Thank you. The next question is from the line of Nikhil Upadhyay from Security Investment. Please go ahead. Sorry. I just want to come back to one question because the earlier participant's question was very relevant because we also had another question earlier that asked for our cash and debt position as of December 31st. Just want to highlight that that cash and debt position is after already spending INR 100 crore out of INR 150 that is earmarked for this. Just wanted to highlight that. Thank you. Please go ahead with your question. Thanks for the opportunity and congrats on good set of numbers. Sir, my question is on the overall demand supply economics, and sorry if this question or related has been discussed because I joined the call late. If you look at our company, like last five or six years, our CapEx expansion has been at a much aggressive pace. Parallelly, if we look at some of the other companies in the rubber chemical space, they've also done the CapEx and have seen a significant shift from this China plus one which has helped them ramp up the capacities quite significantly. Would you say the ramp-up of the new capacities which we are putting could be much faster than what we have seen earlier? Are you getting any flow through or benefits of the global thing which people are talking of? If you can share any thoughts. I certainly expect the ramp-up of this capacity to be quicker than the ramp-up of our capacities that have happened in Mundra. As regards to your question on the Chinese angle, no, simply because the Chinese are not really big players in this market globally. Therefore, the shift would not impact us because they are not there to be shifted out of, if you know what I mean. Secondly, sir, if we understand the CapEx plans, I think you and China Sunsine have plans of any new CapEx. Other than these two, anyone else is planning to put new capacities in? No. If that's the case, would you say that there is a lot more room for realizations to go up if the demand-supply is equally balanced or if the market is tough? Right now, there is a lot of excess capacity in the market. First, demand needs to come up a lot. Okay. Fine. Thanks a lot, sir. Thank you. The next question is from the line of Anubhav Rawat from Monarch Networth Capital. Please go ahead. Sir, last call we had this discussion on our investment in AIF. Just wanted to, sir, ask what will be the total investments from our side, and for how long will this money be locked in, sir? The total investments as on December 31st that have already been done in these AIFs for durations anywhere from an average duration of five years would be around INR 20 crores-INR 22 crores. The committed figure would be higher, as you would know, the money is taken in stages. Any idea on the total amount? Would it be INR 50 crores, INR 100 crores? The committed amount, as of today, would be around INR 50 crore, but this amount will be taken over the next two, three years. W e continue to make commitments as and when good opportunities arise. Fair enough, sir. Just one last question. Sir, this peak revenue that you said from phase I are roughly around INR 65 crore-INR 70 crore. You are saying from phase II it will be the double of that. Are we not accounting for the revenue from sulfuric acid? Pardon me if I'm getting the math wrong here. When we are giving this guidance, we have assumed the lower price of sulfuric acid going forward, and that is why we've taken that spot. Yes, what you are saying is right. If the sulfuric acid price remains the same, then our guidance would be around INR 145 crores. Understood. Thank you. All the best. Thank you. The next question is from the line of Nitin Gandhi from KIFS Trade Capital. Please go ahead. Thanks for taking my question. For phase II, any amount is spent? In this INR 150 crore, there are a lot of common things. That is why if you notice in INR 215 crore, INR 150 is coming in phase I and only INR 65 is coming in phase II. All the common activities are part of this INR 150. You said INR 100 crore is spent, so it should be- INR 100 is spent out of INR 150. Okay, phase II is nothing. How much is the debt apportioned for that out of INR 163? Sorry. How much is the- The ratio is 2:1. 2:1. 2:1. [audio distortion] is internal accruals and INR 2 crore is debt. Out of current debt of INR 163, INR 40 is for the working capital and approximately INR 67 is for the phase I, right? Correct. When you said that the demand supply No. One second. On December 31st, INR 67 would not be for the phase I. Out of that would be around INR 65. We picked up some of that balancing thing in January after the project costs are finalized. As of December 31st, only around INR 55 would be from phase I. Which will peak out to somewhere around INR 100 crore by completion time, right? Yeah. Second question is, when you said that there's a global demand-supply mismatch and demand needs to go up to meet the excess supply. What is that difference at this point of time? No, I don't have the exact figures of this. Just a guess estimate, whether it is 15 or 20 or a little more than that. I don't want to speculate. I was just trying to equate with the additional supply coming of 24/7. I don't want to get into this conversation. Is it possible to get it at later date? If possible, I'll be grateful. It will be very helpful. This is available in lot of public domains, so you can try and get it. Listening from you will be of more intelligent guess. I know. Thank you very much. Thank you. The next question is from the line of Abhisar Jain from Monarch AIF. Please go ahead. Hi, sir. Congratulations for the good set of numbers. Sir, just wanted to get a sense from you on the capital allocation going forward, considering now for the next two years, the CapEx plan is limited to whatever announced, and we expected to have a strong cash flow, and we are almost net cash positive now. Can we expect a higher return of capital either in the form of dividends or buyback? Would that be the way? You seem to have some other plans for capital allocation going forward? No, we have no other plans for capital allocation going forward. There is nothing else that we are looking at spending money on. W hat you’re saying could be a logical next step, which we would do at the appropriate time. We will go to rewarding of the shareholders in some way or form or the other. Okay, sir. Understood. That's it from my side, sir. Thank you and best of luck. Thank you. The next question is from the line of Kunal Mehta from Vallum Capital Advisors. Please go ahead. Sir, thank you very much for the follow-up. Just wanted to confirm the math, actually. INR 215 crore investment is for the entire 11,000 tons capacity and 42,000 tons of sulfuric acid plant. Out of which INR 150 crore is for the phase I and the rest of the INR 65 would be for the phase II. That would be the right way to look at it or- Yes, that's the correct way to look at it. Out of this INR 150 crores for phase I, you have spent INR 100 crores. Correct. The second thing I wanted to understand is that based on the current level of price visibility we have. We are guiding for a combined revenue from this whole investment of INR 215 crores, the revenue to be around INR 135 crores-140 crores. Just wanted to understand from a business case perspective, this makes sense for us because, as you mentioned, this new capacity will not entail any overhead costs, right? Not the whole of the gross margin, but a significant portion of the gross margin will come down as an EBITDA margin for this project. I mean, that's the way to look at it. Otherwise, this asset turn on this INR 215 crore investment, INR 140 crore revenue. Is that the way to look at it, sir, from a return on capital perspective? Yes. That will work. That would be the way to look at it. You're absolutely right. That's how the return on capital would be calculated in this. To put it very bluntly, a greenfield expansion makes no sense with the current industry structure and the pricing. A greenfield expansion for anybody, let alone us, anybody globally cannot expand greenfield because it makes no financial sense. Got it. Effectively, with the capacity, industrial capacity is such a level that the demand has to come up a lot for the prices to actually improve and make new sense. That is why I have confidence that no further capacity expansion is going to insoluble sulphur because a greenfield capacity expansion makes absolutely zero sense for anybody, even whether it is Sunsine or XYZ, anybody. Nobody's going to do a standalone greenfield expansion of insoluble sulphur. Got it, sir. Thank you very much. Thank you. The next question is from the line of Dhruvam from HDFC Fund. Please go ahead. Just one clarification. This INR 140 is on the incremental 11,000 tons. Would it be fair to say the existing capacity is also a bit underutilized, not the Q3 number, probably if you're working from the full year number or FY 2020 base? Yes, because the full year number would be severely underutilized. Full year number for us would be severely underutilized, the capacity. Even the FY 2020, if I see, the revenues were down, that would indicate there was some volume probably pressure. FY 2020 also was severe underutilization of capacity. Got it. That would not be the right base. This is INR 140 plus some additional from the utilization of existing capacities, right? That is the broader understanding. The only reason we got into this INR 140 and all because these are the questions that come up. I understand. I got that point. [crosstalk] That's not the right way to look at it. I agree with you. It is not the right way to look at it and do it that way. [crosstalk] Perfect. Thank you so much. Thank you. The next question is from the line of Anubhav Rawat from Monarch Networth Capital. Please go ahead. Just final question from my side, sir. What would be our cost of debt for this new CapEx that we are taking? It should be between 7%-7.5%. 7%-7.5%. Okay. Perfect, sir. Thank you. Thanks a lot. Thank you. The next question is from the line of Nitin Gandhi from KIFS Trade Capital. Please go ahead. It was the same question Anubhav asked it. Is there any repricing which you are looking for, thanks to your rating upgrade or anything which you have in that? This is even for the project, right? This is for the new project, and it takes into consideration our ratings. In current scenario, we are not looking for any repricing in the short term. Let us see how the whole industry pans out, but not in the short term. Okay, thanks. All the best. Thank you. The next question is from the line of Sunny Ahuja, an individual investor. Please go ahead. Hi. I have a question regarding the participation of the institutions. What are we looking at in terms of equity and free float? Mr. Ahuja, we would request you to come off speaker. Okay, one second. Yes. I'm audible now? Yes. To improve the institutional participation, are we looking at any steps, since the equity and the free float is pretty small at the moment. I just wanted to know if we are looking in that direction? No, I didn't understand the question. Please repeat. I'm audible, right? Yeah. I just wanted to, from the shareholder's point of view, in order to improve the institutional participation, are we looking at any steps? Since our equity and free float is pretty small at the moment, so are we looking at any steps to augment that so that maybe larger FIIs and institutions would maybe be able to participate in a better way? We keep thinking about what are the different options and evaluating them. If you ask me, is something imminent, the answer is no. We constantly keep looking at what could be different ways and best things to do. Thank you. Due to time constraints, that was the last question. I would now like to hand the conference over to the management for closing comments. I take this opportunity to thank everyone for joining on the call. I hope we have been able to address all your queries. For any further information, kindly reach out to us or Strategic Growth Advisors or investor relation advisor. Thank you once again. Thank you. Thank you. On behalf of Oriental Carbon and Chemicals Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.