Ladies and gentlemen, good day and welcome to Q4 FY23 earnings conference call of Oriental Carbon & 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 the 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. 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 is being recorded. I now hand the conference over to Mr. Akshat Goenka, Joint Managing Director of OCCL Limited. Thank you, and over to you, Mr. Goenka. Good afternoon, a very warm welcome to everyone. Along with me, I have Mr. Anurag Jain, CFO, and SGA, our investor relations advisors. We have uploaded our results and investor presentation for the quarter and year ending 31st March 2023 on the stock exchanges and company website. Hope each one of you had a chance to go through the same. I would like to start with a big thank you to all our shareholders for blessing the demerger with near unanimous support. We are very grateful for the same. Despite a challenging year, our revenues grew by 18% to INR 467 crores, with EBITDA at INR 98 crores, a growth of 14%. PAT to INR 44 crores, which is a growth of 9%. For the quarter, revenue stood at INR 104 crores, whereas EBITDA grew by 42% to INR 25 crores. PAT more than doubled to INR 12 crores. This is mainly due to correction in raw material prices and improved efficiencies. The Board of Directors have declared a final dividend of INR seven per equity share of face value INR 10 each of the company. Total dividend for FY 2023 stood at INR 14 per equity share. The automotive industry witnessed a remarkable upswing in 2022-2023, attributed to a surge in economic activity and mobility. Sales of automobiles experienced substantial growth, with most automakers ramping up their supplies. In April 2023, all segments including passenger vehicles, two-wheelers and three-wheelers displayed growth, highlighting the industry's successful transition to BS6 phase II emission norms. According to the data published by SIAM in FY23, passenger vehicle sales increased by 27% year-on-year. Commercial vehicle sale increased by 34% year-on-year. Two-wheeler sale increased by 17%. The demand outlook for commercial vehicles continues to remain robust. Increased economic activity and a resurgence in infrastructure and construction projects have been driving truck sales across various segments. The industry has witnessed improved fleet utilization. There is an anticipation of higher replacement demand. These factors have contributed to overall growth in volumes within the commercial vehicle segments. India has been witnessing an unprecedented economic growth and infrastructure construction is at the heart of this wave. A strong pipeline of upcoming and ongoing projects and large programs are underway across sectors, presenting us now with an never seen before opportunity. The boost in infrastructure activity is further boosting the demand for our products. The Indian tire industry is currently experiencing favorable conditions, benefiting from a combination of robust demand and moderating raw material prices. It is anticipated that the domestic tire industry will witness double-digit growth in the upcoming fiscal year. Exports of tires from India are expected to increase by 15% in ongoing fiscal year, indicating positive prospects for the industry. Many tire makers are planning to accelerate exports by entering in the PCR and truck and bus radial segment. The content of Insoluble Sulphur is about 1.7 times over bias tires and radial, where it improves vehicle efficiency, mileage and life. This should further boost the demand for our company. With this, I'd like to hand over the line to Mr. Anurag Jain to update you on the financial performance of the company. Thank you. Thank you, Akshat. I will take you on through the standalone financials of the company. Total income for Q4 FY 2023 stood at INR 103.7 crores as compared to INR 111 crores in Q4 FY 2022. Stood at INR 467.5 crores in FY 2023, a year-over-year growth of 18%. EBITDA for Q4 FY 2023 stood at INR 25 crores as compared to INR 17.6 crores in Q4 FY 2022, a growth of 42%. EBITDA for FY 2023 stood at INR 19.3 crores as compared to INR 86 crores in FY 2022, a growth of 15%. EBITDA margin stood at 24.1% for Q4 FY 2023 and 21% for FY 2022. Profit after tax for Q4 FY 2023 stood at INR 11.5 crores as compared to INR 4.3 crores in Q4 FY 2022, and stood at INR 43.7 crores in FY 2023 as compared to INR 39.9 crores in FY 2022, a growth of 9% year-on-year. PAT margins stood at 11.1% for Q4 FY 2023 and 9.4% for FY 2023. With this, I would like to open the floor for question and answers. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may enter 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 while asking your questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may enter star and one to ask a question. The first question is from the line of Samarth Singh from TPF Capital. Please go ahead. Yeah, good afternoon. Thanks for the opportunity. Am I audible? Yes. Good afternoon. So we've seen a decent bounce back in demand from in terms of vehicle sales in Europe. At the same time, you know, there's been a sort of a decline in sales in to China. And I think Shikoku mentioned that in their results as well, that they're trying to shift supply out of China into other regions. So if you could just talk about how good the dynamics are playing out for the industry and for. Yeah, you are right. There is a revival and there is an increase in demand for vehicles in India, not necessarily, globally. As far as China is concerned, there has been a decrease in demand, which is now picking up. Still, if you look at it from the level of peak demand, it is lower. It is also coupled with the fact that there has been additions in the capacities in China, which means they have surplus material, and they would like to ship that out of China. As a result, are these things pricing pressure in our regions of, in the regions that we supply to? Prices are seeing a downward trend for two reasons. One, of course, is because the raw material prices have started now normalizing. Therefore the price increase that we witnessed in the last year, when I say last year, I mean, the financial year and Q1 of this year, where it was maintained, they have now started coming down in to align with the lower raw material prices. Further, yes, there is a pressure from China in the Asian countries. Could you give me the freight cost as a percentage of sales for the quarter and for the full year and the same for fuel and power costs as well, please? I cannot give you for fuel and power, but as far as freight cost is concerned, it would be, just give me a moment. It will be around 12%, 12.5%. 12.5% for the year, and for the quarter? For the year it will be around there. This also included a period, where the freight costs were remarkably higher, because of the global issues. For this quarter that just ended, what would be the freight cost? Normally it should be, just give me a minute. It used to be around 6%-7% or up there. Normally it should be around 6%-7%. Okay. What was it for the year? What was the split between, I mean, split between export and domestic? Well, that figure, we do not have and we do not share. Our market share in the total domestic demand was around 55%. Sorry, your, the market share for, domestic market share was 55%. Yes. Yeah. Okay. I mean, in the annual report you share your exports and your domestic data. Yes. Yes. Yes, I'm sorry. We do. I misunderstood your question. I don't have that figure readily available with me. I will come back to you with that later. If I can just on our debt, could you give me the breakup of working capital versus term loan and what we expect the net debt to be? Sorry, I didn't get your question. Can you run me the split between working capital and term loan and the total debt, please? My long-term borrowing was about INR 104 crores, and my working capital was around INR 55 crores, and the total borrowing was INR 159 crores. You expect by September, the long term to come down to INR 50 crores, which is less. Am I right about that or have you lost me? You, yes, you understood correct that by September we are expecting it, the long term to come down to around INR 50 crores. Got it. My last question. I think sometime a couple of years ago you had given us a demand for Insoluble Sulphur per region. Do you have an updated numbers now? In North America, Europe, India. No, we do not. We do not have the latest report with us. Though we have our own ideas, we would rather wait for the report to come and then share it with you. What would be the, just the domestic demand, what is that, roughly? The domestic demand should be around 25,000 tons. 25. Okay. It's still domestically a two-player market, right? Sorry? Domestically, it's still a two-player market. I can't hear you clearly. The domestic Indian market, Are there essentially two suppliers of mineral oils in the market? No, it's no longer a two-player market. It's no longer two player market. Okay. Yes. That's all. all. Thank you. Thank you. Sorry. Sorry. Sorry. There was a question about the split in the domestic and export. In total, about 51% of the revenue was from export. If you talk about only Insoluble Sulphur, then about 58% from exports. Thank you. Yes, thank you. A reminder to all the participants, you may enter star and one to ask a question. The next question is from the line of Gunjan Singh from CCIPL. Please go ahead. Hi, sir. Thank you for giving me this opportunity. I have a couple of questions. What are the volumes for Q4 FY 2023, and how do they compare to the same period last year? Volumes numbers we do not share, sorry, I cannot give you those numbers. As far as comparison with the last year is same. Last year is same. It was lower. Sales volume was lower. Okay. volumes in FY 2023 are higher. No. The volume in FY23 are in the same range as FY22. Okay. For Q4, are they higher or similar to Q4 FY 2022? They are lower for FY 2023 than FY 2022. Okay. They are lower for FY 23. For Q4? For Q, for the year. No, no. For the year they are the same. That's what he's. No, I thought for the year. First you asked for the year, I said they are, for the year they are the same. For Q4 they are lower. All right. Can you give us an idea about the realizations currently? No, it's very difficult because they are, the current realizations are still settling down, so it's very difficult. Of course, they have come down, that is for sure. Basically because of reduction in raw material prices and other things. Realizations have come down. To give you an exact this thing is difficult. Can you give me a broad range, I mean, realizations currently as compared to, say, the same period last year or, quarter-on-quarter? Lower. Going forward, do we expect the realizations to stabilize or do we see them going down? What is the trend currently? Realizations would be a factor of many things. It is a factor of the exchange rate, it is a factor of the raw material prices, it's a factor of competition, right? What we more constructively look at are the margins. Correct. I mean, what kind of margins do we see in FY 2024? Do we see the current margins to be the bottom? I mean, or do we see some growth. The redemption will be to be in the same ballpark of margins that we are facing. All right. I mean, we should expect about 20% margins in FY 2024 as well. No. When we say margins, we mean margins over variable cost and not the EBITDA margins. We will have one advantage this year and that is the freight rates being lower. That could play as a buffer. All right. In terms of EBITDA margins, I mean, what kind of margins can we expect in FY 2024? I mean, do we expect improvement? If the volumes go up, then obviously the, with the variable margins remaining same, the EBITDA margins should improve. All right. All right, sir. That's all from my side. Thank you. Thank you. We have a follow-up question from Samarth Singh from TPF Capital. Please go ahead. Yeah, thanks for the follow-up. I just want a clarification. I just want to add to your earlier question when you asked about two-player market or more. The balanced players that have come in have majorly taken a market share from import. Our market share has only come down a little bit. Their main impact they have had is on the pricing. Got it. Okay. I appreciate that. Actually, to confirm this number. Total sales in the chemicals business was INR 465 crores for the year, and you said 58% of that is exports. Is that right? No. When I said the 38%, that was for Insoluble Sulphur itself, not for the chemical business. Right? Okay. Okay. Okay. Okay. You are, of course, you're I'm just trying to reconcile these numbers. For last year, our domestic sales were about INR 220 crores and about INR 160 crores of exports. This year we have done exports of... Could you give me the export number out of the 465? I'm just trying to see the difference between. Can you repeat the last year's number, please. Can you repeat the last year's number? Domestic was INR 223 crores of sales and exports is INR 163 crores for a total of INR 386 crores of top line. That is where I'm a little perplexed because my numbers are INR 181.7 crores from domestic and INR 196.4 crores from exports in total, totaling to a revenue of INR 378.14 crores last year. Okay. Okay. Standalone had a total revenue of INR 380. Is that correct? Yeah. Our total revenue standalone was INR 378.14 crores. Got it. Okay. Okay. Fine. For this year, could you just read those numbers for this year as well? Sorry. Could you give me the same numbers for this year as well? This year. This year my domestic sale would be INR 225 crores, including Sulphuric Acid, and export sales will be INR 332 crores, INR 331.8 crores to be exact, and INR 224.99 crores to domestic. Okay. Excellent. Thank you. Akshat, one question on, I guess, the post demerger, residual investment business. Have you know, is there any more clarity that you can provide minority shareholders on what your plan there is? A follow-up to that would also be, I think you would have an investment in Duncan Engineering as well. Like you've done this very fair demerger of the chemicals business, would there be a sort of demerger of the engineering business as well sometime in the future? I just want to reiterate your two questions. First question is, what is the investment business going to be up to? Second question, I didn't understand. Something to with Duncan you asked. I think the investment business would also have, I think a 50% stake in Duncan, which is Duncan Engineering. Would there be at some point, I mean, not in the immediate future, but at some point, would there be a demerger of that as well, where minority shareholders might become direct shareholders of Duncan? No, I don't think right now there is any discussion or debate on what we are going to do in the future with Duncan. I would say I think it's a fair assumption that, yeah, Duncan would be part of the, of the investment entity. With regards to what the investment business is gonna be up to, I think it would be too premature right now to make any kind of specific comments on that. We already have been doing some trading. There's a bunch of investments that we keep declaring in the annual report. Those are all indicators as to, you know, what that business is doing. Of course, there are other opportunities and all that are also being explored. I think the right time to discuss on this would be the post demerger. Got you. Just one last question. What would be the, assuming you don't do any more growth CapEx, in this year, what would be the maintenance CapEx? As far as maintenance CapEx is concerned, we do have growth CapEx, improvement CapEx, and maintenance CapEx, because we are doing some, one big project this year to further go on our sustainability journey as well as a cost, saving journey. Including that and including the old carry forward CapEx that we had that has not yet hit the balance sheet, it could be in the range of INR 14-15 crores. 14-15, right. The plain simple maintenance CapEx for company as a whole, I don't see it being more than INR 5 crores. INR 5-7 crores is the general range that I would say, is maintenance CapEx for all the plants together. You know, every year we keep doing, other projects which help us in our margins and all of those kinds of things. Got you. Both our plants, the feedstock for both the plants is natural gas, right? I didn't get the question. The feedstock for both our plants is natural gas or do we use solar as well? Anurag will better. You are saying feedstock for both the plants means Sulphuric Acid and Insoluble Sulphur both, right? No, I mean, I mean Mundra and Barmer. Feedstocks are the same. Which is natural gas. Yeah, absolutely. Yes. We are at one place we have pipe natural gas that is in Dharuhera, while in Mundra now we have started using propane. We will sometimes use LDO also. Majorly we have depicted propane. I would say that we have the ability to use all kinds of feedstock at both the plants. Then it's basically a decision from sustainability, commercial and all of those things. Would that be a potential driver given that gas prices come off, would that be a potential driver of margins, this year as well? This is something which has happened last year itself. There is a mix. The potential driver of margins is coming from the projects we have taken to improve our efficiencies. He's saying has gas prices further come down, so is that. The gas prices have further come down, yes, and it will help. When we said that we are hopeful of sustaining the margins this year, that is a component that we have considered. Okay. Thank you so much. Thank you. The next question is from the line of Jignesh Sapra from Shah Investments. Please go ahead. Good afternoon, sir. My first question is how is the current demand outlook in domestic market and the exports market, especially in Europe? As far as the domestic market is concerned, we expect that the demand to grow in the domestic market in the range of about 8%-10% for overall Insoluble Sulphur, which is based on the projected demand of the tire industry as well as the increase in the Insoluble Sulphur consumption. As far as Europe is concerned, the demand continues to be muted on account of high prices of freight, on account of the geopolitical situation of the Ukraine-Russian war and overall depressive sentiment of the economy. The demand continues to be muted in Europe. Understood, sir. sir, how do you see the demand supply dynamics for Insoluble Sulphur in the next two to three years? If everything remains stable, we are still hopeful that the demand for Insoluble Sulphur should grow in the range of 3% ± globally per annum. Understood. Also do you see our market share increasing going ahead? Well, that is our endeavor to increase the global market share, and we are looking towards it. Understood. I think that is it from my side. Thank you so much. Thank you. Ladies and gentlemen, if you wish to ask more questions, you may enter star followed by one on your phone. The next question is from the line of Aditi Sawant from ADM Advisors. Please go ahead. Yeah, hi. Thank you so much for the opportunity. My first question is that, what are the steps you have taken, you know, to improve our efficiency? Second one is, are we planning CapEx for Insoluble Sulphur in the future? As far as the steps for improving the efficiency is concerned, we do take steps at wherever we find the opportunities through our R&D and technical team. It's a continuous process. It will be difficult to point out one step, but this is a continuous process. As far as the expansion, the next step of expansion is concerned, we are looking for confirmation from the market for increased volumes. Once we are certain of the utilization of the volumes that we have currently, we will immediately go for expansion for which everything is ready. Civil work is mostly done. Okay. Have you identified any products for that? No, the expansion, currently what we are talking about is Insoluble Sulphur only. We have expanded on a two-phase expansion basis where majority of the utilities and civil expenditure happens in the first phase in order to save overall costs. The second phase will be at less than 50% cost of the first phase. Okay. Because it's more cost side. Okay. Okay. Got it, sir. Thank you so much, and all the best for the upcoming quarters. Thank you. The next question is from the line of Rishab Soni from Soni Investments. Please go ahead. Hi, sir. Thank you for the opportunity. I have two questions. Firstly, what are our penetration levels in U.S. and China currently, and where do we see it in next few years? Also, have you added new tire customers? In China, our penetration level is next to none. As far as America is concerned, we have started penetrating there. By the end of the year we are hopeful of adding a lot more quantities. That's our focus, one of the focus. Yes, we are adding, and in the process of adding more customer and customer plants. That is where we see our growth coming from. Okay. Got it, sir. If you're expecting me to comment on the volumes and utilization for the quarter and the full year. Can you ask the question again, please? Could you comment on the volumes and utilization for the quarter and the full year? We do not give those figures. As I commented earlier, we do not give the volume figures because of the competitive environment. I have already commented that capacity utilization or the volume would be the right thing, not the capacity utilization, because we had an extension last year. The volumes for the year were on the same level as they were for the last year. For the quarter, they were a bit lower than the last year, but for the year they were the same as the last year. Okay, thank you. That's all from my side. Yeah. Thank you. Participants, if you wish to ask any questions, please enter star followed by one on your phone. The next question is from the line of Harsh Shah from Tophill Investments. Please go ahead. Hello, sir. Yes. Sir, I have two questions for you. If you can give some commentary on how business is going on in Europe since it's 50% plus contributor to overall business. It is now 40% contributor to our overall business. I think that figure is wrong, though it was a very significant and continues to be a very significant part of our export market. I have already touched upon the subject of consumption in Europe, which continues to be subdued, affected by recession-like atmosphere there, the Russian-Ukraine war, and also high prices of fuel, which have now started coming down but still remain higher than usual. Okay, sir. Also one more question. For quarter four, our EBITDA margins have been 17.6% around. Can you throw some light on the same? Well, in October, in Q4 in fact our contributions were much better than the Q4 of last year. That is why even when I say that, we have sold less and yet our profit has been better than Q4 last year. The EBITDA margins are a product of your profitability as well as of your top line. The reason that EBITDA was because of higher selling price on account of higher raw material costs. Our overall profitability was better on account of EBITDA margins, mainly from exports. Because of lower input costs. Okay, sir. Thank you. Thank you. As there are no further questions, I would now like to hand the conference over to 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 reach in to our advisors or IR advisors. Thank you once again. Thank you. On behalf of Oriental Carbon & Chemicals Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.