Ladies and gentlemen, good day and welcome to the SRF Limited Q4 and FY 2022 Investor Conference Call hosted by Axis Capital Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ankur Periwal from Axis Capital Limited. Thank you and over to you, sir. Thank you, Faizan. Good afternoon, friends, and welcome to SRF Limited Q4 and FY 2022 post-result earnings conference call. The call will be initiated with a brief management discussion on the earnings performance, followed by an interactive Q&A session. Management team will be represented by Mr. Rahul Jain, President and Chief Financial Officer, SRF Limited. I would like to hand over to Ms. Nitika Dhawan, Head Corporate Communications at SRF, to initiate the proceedings for the con call. Over to you, Nitika. Good afternoon, everyone, and thank you for joining us quarter four and FY 2022 results conference call. We will begin this call with brief opening remarks from our President and CFO, Mr. Rahul Jain. Following which we will open the forum for an interactive question-and-answer session. Before we begin this call, I would like to point out that some statements made in this call may be forward-looking, and a disclaimer to this effect has been included in the earnings presentation shared with you earlier. I will now request Mr. Jain to make his opening remarks. Thank you. Thank you, Nitika, and good afternoon, everyone. I extend a warm welcome to all of you and thank you for joining us here on SRF's Q4 and FY 2022 earnings conference call. I trust you, your families, and colleagues are doing well. I will initiate the call by briefly taking you through the key operational highlights for the period under review, following which we will open the forum for a Q&A session. SRF delivered a robust performance during the period under review, ending fiscal 2022 on a strong note. We achieved notable growth in all our segments, with our chemicals business performing remarkably well. In Q4, gross operating revenue increased by 36% Y-O-Y to INR 3,549 crore. EBITDA grew 46% Y-O-Y to INR 944 crore, translating to an EBITDA margin of 27%. The company's profit after tax increased 59% from INR 381 crore to INR 606 crore in Q4 FY 2022 when compared to corresponding period last year. Even in comparison to our Q3 FY 2022, our profit after tax grew by about 20% to INR 606 crore as compared to INR 506 crore last quarter. Given the persistent challenging macro economic environment, the company has delivered yet another solid performance during the quarter. Moving on to our segmental performances. This chemicals business recorded a strong growth of 36% Y-O-Y to achieve revenues of INR 1,572 crore. Our fluorochemicals business delivered a strong performance on account of higher volumes of refrigerants, blends, and the chloromethanes segment in both domestic and export markets. Our continued focus on growing our exports markets, especially in the U.S., has borne fruit. We are well-placed to seize future opportunities in the U.S. market. During the period, SRF continued to grow its global market share of R-134a pharma grade gas, marketed under the FLORON brand, with presence in India, Bangladesh, Argentina, and Thailand. We have further expanded to new geographies such as Greece and Taiwan and have a healthy order book in the new locations as well. The price of HFCs in both international markets and domestic markets have increased given trade measures imposed internationally and domestically as well. We are of the view that this can continue and further price action will be witnessed. Given the new capacities that cannot be added, that can be added only up till December 2023, SRF is in a position to cater to the growing demand. In the chloromethanes segment, higher sales realizations and optimized product mix helped business perform well. Our capabilities on the backward integration allows us to control our costs as well and propel the business forward. Having said that, some inflationary pressures on prices of key raw materials and utilities, higher CapEx costs on account of commodity price inflation are certain risks that we continue to keep a close watch on. In this segment, I am happy to share that all our CapEx plans are on track. The fluorochemicals business is in the midst of implementing large CapEx, and a few like ETFE and CMS are likely to be commissioned over the next two quarters. I believe that this, along with other projects, will augur well for the growth of the business. Additionally, the board in its meeting yesterday approved a proposal to expand the R22 capacity at Dahej at a cost of approximately INR 30 crore. During the quarter, our Specialty Chemicals business did remarkably well as well. We're driven by strong demand in both domestic and export markets. Our new product portfolio is being enhanced continuously, which also helps cement our client base. In addition, our customers are demanding more and more of the complex molecules that we produce. Which is being met by our robust in-house R&D team, giving SRF an overall edge in the marketplace. During the year, we launched six new products, four in agro and two in pharma. Furthermore, demand for existing products continues to be healthy. We are also seeing traction in the AI space and building our capabilities in this front, and are excited about a couple of AIs that are currently under discussion. On the cost aspect, we have indeed faced certain supply chain challenges in terms of availability and prices of key raw materials. The team has found countermeasures to effectively deal with such challenges, and focused on diversifying raw material supplier base to offset the risks to the supply chain. This, combined with process optimization, assets optimal utilization, and other initiatives to reduce environmental manufacturing costs, has enabled us to lay emphasis on further cost reduction and focus on sustainability. We are pleased to announce that the board has approved a proposal to set up dedicated facilities to produce certain key specialty products at Dahej at an estimated cost of INR 115 crore. We believe the current opportunity, together with recently commissioned and forthcoming capacities, will further boost our market position in both the agro and pharma industries. As we grow our revenues, we plan to continue investments in this segment to sustain healthy growth rates over the next few years. We believe this is commendable owing to a notably higher base, which has witnessed significant growth over the last few years. During the year, the business grew around 30% and registered sales of more than INR 3,100 crore, which is higher than our earlier guidance. We are also fairly confident of a 20% ± growth that we can achieve in FY 2023 as well. Moving on to our packaging films business, which it registered a solid performance during the quarter with growth in sales across domestic and international businesses. The performance was driven largely owing to ramp up in capacities in Hungary and Thailand, which supported volume growth. During the quarter, demand for BOPP and BOPET films remained strong while we continued to prioritize efficiency and cost-effective proper procurement to improve productivity. In addition, our performance was further supported by improving sales growth from value-added products. SRF strengthened its easy-to-do business with PFB tagline and solidified its position as a global industry leader. With over a hundred countries and multi-country, multi-substrate presence, we effectively broadened our footprint. Our sustained focus on quality and delivery parameters has helped us reach a broader and deeper consumer base around the world. In the upcoming quarters, the demand for BOPP films is likely to remain healthy. However, we expect pressure on BOPET margins on account of several new lines that are likely to come up in the future. Here, we believe that we have an edge over our competitors with multi-country presence across the globe. Regarding our recent announcement of foraying into the manufacture of aluminum foil, I am happy to share that we have incorporated SRF Altech Limited as a wholly-owned subsidiary of SRF Limited, and the civil work for construction of this facility will begin soon. Our technical textiles segment achieved healthy revenues on the back of highest ever sales volume from our belting fabrics and polyester industrial yarn segments during the quarter. This contributed to partially offsetting the weak demand of nylon tire cord fabrics. Despite the uncertain market move environment, the business demonstrated promising results as SRF continues to improve its operating efficiencies in the segment. While demand for NTCF have remained weak over the last quarter, we are witnessing some revival in this space going forward. Lastly, in our other business segments, SRF maintains its domestic market leadership position in the coated fabrics business with a focus on improved sourcing initiatives and superior operating performance. Domestic demand that was initially sluggish owing to the order postponement is currently ramping up and likely to firm up significantly. In our laminated fabrics division, SRF retained its pricing and volume leadership, with the facility operating at full capacity in Q4 and reaching its highest quarterly sales record. On the balance sheet front, I am happy to share that we've been able to maintain net debt in similar levels, around INR 2,700 crore when compared to last year. This was despite heavy CapEx investment of close to INR 2,000 crore and higher working capital on account of inventory and receivables build-up, new plant startup and increase in sales. Our capital expenditure plans for the ensuing financial year are also progressing well. We envisage an additional capital allocation in the range of INR 2,500 crore-INR 2,700 crore during FY 2023. Most of these CapExes will be funded through internal accrual and cash generation. While there may be some additional net debt that may be required, it could range only between INR 200 crore-INR 300 crore over FY 2023. Despite the above, our balance sheet remains strong to encash other opportunities that may come through. However, with rising interest rate scenario and continued volatility, interest rate and liquidity management will remain a key area of focus for us. The commitment to CapEx clearly showcases two key metrics. A, our confidence in our businesses and its ongoing strategies. B, the majority of cash flows that have been generated are being reinvested in our future and growth prospects. FY 2022 was a volatile year with geopolitical tensions, COVID impact, supply chain disruptions impacting all aspects of business. In spite of the challenging external environment and dynamic business strategy to counter the same, we maintained a healthy balance sheet position. The same is reflected in reaffirmation of the company's ratings by the rating agencies. During the year, exchange rate volatility remained a key concern, especially in emerging markets. However, prudent hedging and risk management strategies have been put in place to minimize its impact on businesses. At SRF, we lay equal importance to community engagement initiatives and constantly strive to give back to society. During the quarter, SRF collaborated with Election Commission and Child and Women Development departments to conduct voting awareness activities at Dehradun and Greater Noida, encouraging citizens to cast their vote. In addition, we imparted training on digital skills to empower more than 5,000 teachers at five locations. It is also heartening to see our efforts are being appreciated, and SRF Foundation was recently awarded CSR Times Award 2021 in Gold category for its rural education program. To conclude, we are confident about our future growth and market prospects that each of our businesses present. Even in an uncertain global and domestic operating situation, we continue to remain cautiously optimistic. Over the years, we have invested meticulously in building world-class infrastructure and unparalleled R&D capabilities. Given our solid foundation and unmatched capability and resources, we are confident of achieving excellent outcomes, and it is our ongoing endeavor to create sustainable value for all our stakeholders in the future. On that note, I'll conclude my remarks, and would be glad to discuss any questions, comments or suggestions that you may have. I would now like to ask the moderator to open the line for Q&A session. Thank you very much. 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 touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Reminder to the participants, anyone who wishes to ask a question may press star and one at this time. The first question is from the line of Rohit Nagraj from Emkay Global. Please go ahead. Yeah, thanks for the opportunity, and good afternoon to all. First question is on the packaging film business segment. You indicated that, on BOPET, we may feel some pressure in terms of margins because of the new lines coming up. Just wanted your perspective, given that there is volatility in polymer prices currently because of high crude prices, will there be any impact on the demand side? Given that the. Sorry to interrupt you. I am unable to hear you clearly. Could you lift the handset and talk? Yes. Is it better? Yes, much better, Rohit. Thank you. Yes. I was talking about packaging film business, that given that there is a crude related volatility, is there any demand impact? Given that the post-COVID demand is now normalizing, are there any, you know, indications that demand is relatively stabilizing and probably may have impact because of the higher pricing environment? Thank you. Thanks, Rohit, for your question and thank you for understanding. The point that you make in terms of volatility on crude, certainly there is some volatility on crude. I think what we've been able to do, Rohit, is take strategic sourcing decisions. We have taken multiple positions in terms of where we are from our key raw material perspective, PTA and MEG for our BOPET films and PP resin for our BOPP films. We've taken multiple initiatives on that side. Yes, there is some volatility. Again, I think the market does price the films based on the delta of the basic raw material. I don't think that is too much of a worry. The second question that you have raised is with respect to the pricing or the demand for PET and PP films. Luckily on that side also we've seen strong demand coming in. There is some normalization that had happened post, let's say the COVID high that we saw in 2020. I think that's pretty much passed. All of that is now coming in fairly on a consistent basis. We are seeing in the domestic market anywhere between 8%-10% or slightly higher than that in terms of the demand increase that is happening. Internationally also we are seeing a pretty decent increase in demand. I don't think demand is an issue. Yes, pricing, logistics and some of those might be a small issue, but we are tackling. All right. Got it. This is really helpful. The second question is again on the technical textile business. Now, in Q1 and Q2, we had an EBIT run rate of almost INR 130 crores. There was some volume contraction in Q3. In your comments, you also again said that NTCF had some issues in Q4. Given the normalized volumes, run rate of INR 130 crores, quarterly run rate of INR 130 crores is sustainable. I understand that because of the volatility in caprolactam prices, the percentage, EBIT margins could vary, you know, but the absolute run rate, should it be, say INR 130 crores when the normalized volumes again come back? Thank you. I don't understand the INR 130 crore number, Rohit. My sense is you are talking about the EBITDA rather than talking about EBIT, which is the one that is published. In Q1 and Q2, I'm talking about the EBIT numbers that we give, segmental EBIT. Rohit Nagraj, the point to make is, yes, to a certain extent there has been some renegotiation that has happened in terms of our customer contracting. Some of that is currently going on. Even in Q1 last year, I had told you that some of those contracting has happened, which is annual. We are working on some of the other contracts for the next financial year also. INR 130 crore, purely as a number, it will be difficult for me to be able to comment whether that can be a good run rate to achieve. But I can certainly tell you that from an overall perspective, we see demand to be higher on the NTCF side. We see certain cost measures that we are taking on the production side, which will probably lead to better EBIT margins and overall better EBIT numbers going forward. Now, whether that will be INR 30 crore, INR 130 crore or INR 100 crore or INR 91 crore, which is last quarter, I can't really comment on that. I think there is a fairly good understanding that between, let's say INR 100 crore-INR 120 crore we should be able to achieve overall. Right. Got it, sir. Just one last clarification. Last year our net debt has been constant on a year-on-year basis, but the interest cost has reduced. What is your, you know, reason for that? And what would be the average cost of interest for FY 2023, if you have any view on that? Thank you. Rohit, wherever we were from an FY 2022 perspective, I believe with the international interest rates rising, with Indian domestic interest rates also likely to rise, I think anywhere between 30 basis points-50 basis points there could be an overall impact on us on a year as a whole. Our endeavor will be to minimize that impact by doing appropriate interventions at the appropriate point in time. Certainly, we are not out of the market. There will be some impact of the increased interest rates that we will see across domestic and international markets. Sure. Thank you so much and best of luck. That was really good. Thank you. Thank you. The next question is from the line of Sanjesh Jain from ICICI Securities. Please go ahead. Rahul Jain, good afternoon and congratulations on an exceptional performance. Few questions. First, on the specialty chem, in our presentation we have said that we have lined up the new products for the upcoming MPP 4, and this year we have launched six new projects. What is the number of new product launches we are anticipating for FY 2023? Considering that we are starting with a new MPP, will it be a considerable jump over FY 2022? To answer your question, MPP 4 versus new products may not be the right correlation to do. MPP 4, we are looking to ensure that it gets full in terms of what products we are doing. There are five or six products that we can do in the MPP 4. We are looking to ensure that all of those we are able to do from day one or as soon as the plant gets stabilized. With respect to new products, Sanjesh, the question should be different in terms of what are you looking at doing from a new product perspective. This year, FY 2022, we have done almost six new products from a launch perspective. I think the run rate should be similar or higher in FY 2023 also. I don't think there is a need to link it to MPP 4. Okay. Irrespective of MPP, we will be launching the product. Yes, please. Okay. No, that's fair. That's fair. Second, on the refrigerant gas, for FY 2022, what was the utilization rate for us for particularly HFC? With this INR 30 crores of debottlenecking CapEx of R22, how much more capacity we'll be able to adding in there? Roughly speaking, across HFC, 77%-85% would have been the overall utilization. Even Q1 was slightly tight to what we saw. There were certain technical things that we had also witnessed. All of that is now past us. We are now running at full capacity for almost all of our HFCs. The second question that you've asked in terms of R22, I think the debottlenecking that we are doing with this INR 30 crore CapEx is roughly in the range of about 2,500 tons-3,000 tons per annum, largely captive in nature, is what we are looking at. Okay. For the MSC use mostly you're telling, non-MSC use. Non-MSC uses, which could be same or also internal consumption. Got it. It is fair to assume that for next year we have enough capacity as a whole in the ref gas to grow, even on the HFC side because of the weaker first half in FY 2022. That is the right way to think, right? Most certainly. We have, let's say, additional capacity available. We had also commissioned in December a new plant for our HFCs. All of that has happened. Therefore, there will be more capacity available to utilize in FY 2023 than it was in FY 2022. Fair enough. Last question from my side. We have given a guidance of INR 2,500 crore-INR 2,700 crore for FY 2023 CapEx. Can you help us with the breakup for this CapEx? Number two, why a separate company for Altech? To address first INR 2,500 crore-INR 2,700 crore, I think roughly in the range of about INR 1,700 crore-INR 1,800 crore would be the chemicals business. Roughly within that, I think INR 1,100 crore-INR 1,200 crore is fluoro, and the balance is specialty. Some of those that are running as well as some of those that are in progress. The other largely is the PIY and the technical textiles, the belting and the value chain CapEx that we are doing, plus some other CapExes with respect to the packaging film business and Altech as well as the BOPP line that will come up in July. That's more or less the breakup of the INR 2,500 crore-INR 2,700 crore. Also, I can tell you today, given where we are, we believe those CapExes that have been sanctioned and approved and are currently running are probably in the range of INR 2,300 crores-INR 2,400 crores. Therefore, we are giving you a number of INR 2,500 crores- INR 2,700 crores because there will be new CapExes that will get sanctioned during this financial year, so that, we will have to incur money on it. This is the cash spend that I am talking about. The second question that you have asked is Altech. Again, two things, Sanjesh. There are certain tax positions that we are also creating with Altech. The manufacturing company tax positions are in the range, I think till December, till March of 2024. If you are setting up your new manufacturing company, you are allowed a certain differential tax regime, so that's a positive. We are looking to expand this business to a very large extent. We believe it can become a significant substrate within our packaging film business. Therefore, with those two things in mind, we have set it up as a new company. I hope it explains it, Sanjesh. Very clear, sir. Very clear. Thanks for all the answers and best of luck for the coming quarter, sir. Thank you. Thank you. The next question is from the line of Amar Mourya from AlfAccurate Advisors. Please go ahead. Sir, thanks a lot for the opportunity, Rahul Jain. My first question is basically on the specialty chemical. You indicated that this year as a whole we did INR 3,100 crores kind of a revenue. Does this include the chlorinated chemical part, or this is excluding only the, pure specialty? What chlorinated chemical are you talking about? Basically, MEG or That is it included into this? Jain. Hello? No, Amar, I think there is a confusion. We don't do any MEG. This is purely Specialty Chemicals that I'm talking about. Total turnover of the chemical business being INR 5,200 crores roughly for the year FY 2022, out of which roughly, let's say INR 3,100 crore is Specialty, which effectively means that the total turnover is 60% Specialty, 40% Fluorochemicals, which includes refrigerant gases and industrial solvents. Basically that is what I'm trying to understand. Industrial solvent is not part of this. INR 3,100 crore is a pure specialty, fluoro specialty chemical, right? Absolutely. Okay. Industrial chemical is always a part of the Fluorochemical business, which is the ref gas plus industrial solvents. Okay, got that. Got it. Secondly, sir, you know, in terms of the guidance we are talking about, 20% growth rate. What I'm trying to understand is that, you know, now given that, you know, the kind of new orders your competitors are getting, so is that the intensity for you also in the specialty fluorochemical business is increasing largely from the agrochemical perspective? I would end up saying, Amar, that there is pretty good traction for us from the AI space, agrochemical space, and even the pharma teams have been strengthened to meet the growth requirements for the Specialty Chemicals business. You've seen us invest significantly. Almost every quarter, we are sanctioning new plants. There is INR 115 crore CapEx that we have recently sanctioned. The MPP 4 is also something that is coming up very soon, and we are looking to take that up. The PIP, which is a pharma intermediate plant, is also something that we have recently done, and we are working on putting that up, probably in the next six to eight months. All of those are in good shape. We are facing, let's say, a bit of a demand positive from the agrochemical side. That's something that I believe is a positive. The other thing also is that, the number that I told you, 20% plus minus, is also based on my current order book, my current positioning. We are starting the year, and those variables are there. Again, I go back last year when we were talking about a 15%-20% growth. You've seen us deliver a much better number even this year. Based on our current performance, based on our current order book, we are kind of projecting this growth going forward. I am hopeful that we will be able to beat the number again. Okay. Okay. That is what I wanted to understand from you. Thanks a lot, sir. Thanks a lot. Thank you. Thank you. Yeah. Thank you. The next question is from the line of Ankur Periwal from Axis Capital. Please go ahead. Yeah. Hi, sir. Thanks for the opportunity. First question on the Specialty Chemicals side and partly, you know, you agreed, you just answered. You know the growth. Could you be a bit louder? I'm kind of unable to hear you. Sorry. The 20%+ growth guidance that we are giving in, and I'm putting in context, you know, earlier we had mentioned that pharma business should be, you know, increasing in terms of overall contribution, within Specialty Chemicals. And the six product launches that you talked about, is the growth largely driven by the existing products, either in agro or pharma, or the newer ones also will be a bigger contributor here? Well, Ankur, I would say it this way, that there are new products that we've launched over the last 12 months, 18 months. All of those are witnessing a great traction, large demand. There are new products that are, therefore I would call them as growth that is being driven by new products. Also from a perspective. When I look at it from an overall perspective, existing products and more complex products like the P32, P35, all of that is also growing. I would typically say that it is driven by both the sides rather than just one. Sure. Pharma will be growing faster here, given the contribution of pharma is expected to rise. Should. Sure. Sir, second question on the overall chemical business margin here and you know, given the RM volatility that we are seeing, the pass-through there. Any comments there? I would say you are right, Ankur, that there is a small issue in terms of the fact that Specialty Chemicals business is a contracted business. I would say we have kind of passed through about 20%-30% of some of our increased costs through to our customers. Over the next, let's say, 6-12 months, we believe this number can go to 60%-75% in terms of the pass-through of costs. That will certainly come through. Again, I think it's the contract, it's the long-term relationship that we are more worried about or, more concerned about for it to get maintained. Some small adjustments that we need to make from a margin perspective, we are pretty much happy to do. Sure, sir. Just a clarification. If I look at our, let's say, H2 margin, wherein the ref gas pricing, the efficiencies there have helped the chemical business margin per se. We were give or take 20%-22% in the first half, which increased to around 30% in the second half. Will it be fair to say, given the gradual RM pass-through and given the longer term, you know, relations there, broadly on a full year basis, we should be sustaining these numbers? It is pretty much possible, Ankur. Q4 margins are roughly in the range of 30%-32% as I look at it. Q3 was about 29%, so there is a delta there. From overall chemicals business perspective, I think we can look at better margins going forward as well. Sure. That's helpful. Sir, just one clarification. On the ref gas side, you said for the full year, we are operating at 75-odd% utilization. Got that number right? 70%-75% depending on gas to gas. Sure. There is a volume uptick there, apart from the 15%. Positive Capacity which comes in. Great, sir. That's, that is helpful. I'll get back into the queue. Thank you. Thank you, Ankur. The next question is from the line of Kumar Saumya from Ambit Capital. Please go ahead. Yeah. Hi, sir. Good evening. Somewhat, most of the questions have been answered, so just a couple of data points. What was contribution of refrigerant in the overall chemical segment? Contribution of refrigerant in the overall chemical segment? I would have to calculate it. It's not a data point that I have readily available with me. My sense is, it would be probably around INR 1,400 crore-INR 1,500 crore. Okay. Into overall 3,200. If you want to calculate it like that, 1,500 divided by 3,200, say about 30%. Okay. Sir, what was India's contribution from the, in the packaging segment, sir? How much did India's capacity contributed in the packaging revenue? You have the standalone numbers, look at them. Okay. It's in there. Yeah, yeah. Got it. Sir, thank you. That is all. Thank you. Thank you. The next question is from the line of Madhav Marda from Fidelity International. Please go ahead. Yeah. Hi, sir. Good afternoon. Thank you so much for your time once again. I just wanted to understand that our CapEx number, you know, I think last year we were doing about INR 1,500 crore-INR 2,000 crore. It's been up this year. How much of that is an impact just of higher steel and cement prices, et cetera, which is impacting our CapEx investments here? Very, very difficult question to answer. What I can tell you that steel prices have risen very, very significantly. Stainless steel, PBDs, cement to a very low extent, but more from a, let's say, when I look at it, the chemicals or exotic materials, those prices have gone up very, very significantly. I would tend to say that it depends on project to project, but commodity price inflation is probably having an impact of anywhere between 8%-15% on our projects on an overall basis. When I'm talking about this is not just. See, the point, Madhav, is that those CapExes that we have had sanctioned one year ago, one and a half years ago, have had that kind of impact. Those that we are sanctioning now are effectively taking into account all of those price inflations that have come in. Right. It's a very difficult question to answer, but, yeah, my sense is anywhere between 8%-15%. Got it. Understood. Secondly, on the chemical margins, I think you indicated that if I understood right, we can maintain these margins for FY 2023. The 2H margins, they can sort of remain here. If I would have been a predicting man, I would have given you the exact number, but yeah, in that range we could. Okay. Got it. Sir, the refrigerant gas demand supply environment continues to remain healthy, I'm assuming, currently, in the world. Absolutely. Both domestically as well as internationally. Okay. We have little material to sell. Understood. Okay, sir. Thank you so much. Thank you. Thank you. The next question is from the line of Surya Patra from PhillipCapital. Please go ahead. Yeah. Congrats for the great set of numbers, sir. Thank you, Surya. Just, one question on the refrigerant gas side. Recently your government has announced policies about restricting the imports as well as restricting the exports of HFCs. How should one think whether it is a beneficial effect for us? Because while export was considered to be a faster growing vertical for us, while in the domestic side, the rising market share and the import substitution was an opportunity. Both put together, how should one really look at and, what is the implication on us? To be very frank, I think, Surya, the way it works is that as you move into a more regulated regime, these are the first and initial steps the government takes. Because, from an international perspective, they have to report in terms of what are the consumption that you are having, what is the import that you do, what is the consumption from a refrigeration perspective, emission perspective, and a non-emission perspective. This is something that happened through CFC cycles, HCFC cycles, and now HFC cycles. Standard move. But from our perspective, I think it is beneficial because export, we are the only ones in the country that manufacture HFCs, so we have the ability to get the appropriate licenses and do the export. That's not a problem. In fact, I think restricting that Altech also allows also effectively puts a lid on most misclassified imports that come in, and therefore that's also a positive. Nothing of our doing, but overall basis, I believe it's a positive. Sure, sir. The second question is on the fluorochemicals. See, last year we have seen the expansion-led growth as well as the price support, which it helped us deliver stronger growth both at the revenue level, at the EBITDA level, and similarly in the PAT levels. Surya, I am unable to get your question. Could you repeat, please? Last year, FY 2022, financial performance was supported by two things. One is the expansion, obviously, across segments, as well as the price, strong pricing situation. Going ahead, generally, sir, I'm asking for all the businesses, because the similar price trend that we have been witnessing. Going ahead, if the prices are likely to remain flat-ish or, to some extent, subsiding, then along with that, the whatever CapEx expansion plans that is going on. Considering those, what is the likely growth indication that one should have, and what implication on the overall margin scenario that SRF would be looking at? It's a complicated question to answer, Surya. I know, sir. Because you cannot answer it from a company as a whole perspective. Each segment behaves separately depending upon some of the, let's say, the margins coming or let's say the prices coming down or commodity price inflation that we have talked about coming down, there will be some impact in terms of our sales prices, which will also lead to some of the impact in terms of our costs coming down. Logistics, power, raw materials, caprolactam, be it for that matter, fluorspar. All of those will also come down. My sense is we can still sustain margins. We can still do a good job in terms of the overall position of the company. Yes, there may be some better positions to be able to take from a CapEx perspective and some of those CapEx costs that have kind of gone up a bit coming down. We may be in a position to announce more CapEx as some of these high elements start to percolate or come down. Hopefully, that should be the way to look at it. Very complex to answer from a company-wide perspective. Each business behaves separately or differently because given the nature and size and conditions. Okay. I hope it explains. Yeah. Yes, sir. Certainly complex situation. On the Specialty Chemicals side, sir, if I just can have a sense, last year's performance of 30% growth, I think that was an excellent performance and it has been back to back. Whether the price-led growth is also a kind of an important factor here. With what led growth? Price led. Specialty Chemicals business has had some price benefits, but I think the margins would have been better had commodity prices or raw material prices remained lower than what we had assumed. Yes, to a certain extent, I would say we've passed on some of the commodity price increase, but probably less of it, and over FY 2023, some of that will also happen. Okay. Sir, just one. It's not price related, but more of volume. Yes, sir. Just one clarification on the Specialty Chemicals business side. Whether on the gross profit side, it's kind of around 80% margin scenario. Can't comment, Surya. Okay. Just one. Just a product business to business. Sorry to again, I don't go into contribution positions because that's. Yes. Sure, sir. Just one question. This is the operator. Sorry to interrupt you, Mr. Patra. May we request that you return to the question queue for follow-up questions. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, we would request you to rejoin the question queue. The next question is from the line of Atul Tiwari from Citigroup. Please go ahead. Yes, sir. Just one question on the capacities in the two key businesses. Could you just update us on the total refrigerant gas capacity and total packaging film capacity as of now, and how these are broadly increasing over next two years? Oh, Atul, I have told you so many times. You want it again? Sir, you keep on expanding capacity all the time, so it's difficult to keep a track with your kind of growth. Hello. Just one second. Roughly speaking, the capacity for packaging films is roughly about 310,000 tons per year, out of which 60,000 tons of BOPP is also coming in. The total capacity that we will have will probably by the end of this year become 370,000 tons. Okay, sir. That's packaging. Yes, Atul, please. Yeah, on the ref gas side, sir, same numbers. R32, we have a total of about 14,000 tons, 13,000 tons-14,000 tons. R134a is roughly about 20,000 tons. There is the swing plant also that's there, so it can be ±4,000 tons. R125 is about 7,000 tons. R22 saleable with both Hazira and Bhiwadi is roughly in the range of 17,500. Probably also another 25,000 tons for total for R22. That's how the capacity there. Okay, sir. Thanks. Thanks. Thank you. The next question is from the line of Sumant Kumar from Motilal Oswal. Please go ahead. Yeah, Rahulji. You said the H2 margin is going to sustain for a specialty chemical and polymer segment. Going by the overall FY 2022 margin for chemical and polymer is coming around 26.7%. Can you talk about the next couple of year margin sustainability of the chemical and polymer business, rough idea? Sumant, can I interrupt you? Yeah. Polymer segment. Chemical business is. There is no polymer left here. Correct your. Sorry. Yeah. Now ask your question. My question is the overall chemical business, we have a 26.7% EBIT margin, and you are saying the H2 margin of 30.8% is going to sustain in FY 2022-2023. My question is, for next two year, what is the range of margin for chemical business? Sumant, that's called blue sky gazing. I believe we can sustain these margins, but if you want to ask about FY 2023, I will probably be able to give you a better picture than FY 2024, 2025, 2026. Because again, business is dynamic. We are coming up with new products on a continuous basis. There is a large set of capitalization that will be done. All of that is going to happen. My sense is we can sustain these margins on existing products, but those that come through will probably start at lower base and take it up going forward. That's how it will pan out. Given what we are seeing today in terms of the traction, we certainly believe margins are sustainable. Thank you, Mr. Kumar. May we request that you return to the question queue for follow-up questions. Thank you. The next question is from the line of Nitin Agarwal from DAM Capital. Please go ahead. Thank you for taking the question and congratulations on the fantastic set of numbers. Sir, on the refrigerant gas business, you mentioned that we're running right at peak capacity. Sir, now when you look through the next few quarters, is the growth gonna be incrementally volume driven, or is there any volume growth possibility, or is it gonna be largely pricing-driven growth from here on? From the base I said that, we are currently at peak capacity. I was talking more like April, May. Rather than the available capacity from an FY 2023 perspective. When you compare FY 2023- FY 2022, we will certainly have additional capacity that will come through, because as I said during the call as well, the total efficiency in terms of capacity available versus utilization would have been in the range of 70%-75%. So yes, there is additional capacity available. We also have the FY, the 15,000-ton HFC plant that is coming in, but probably towards the end of this fiscal. That will also add to additional capacity. 2023 Thirty-two. Thirty-two. Thank you. We'll take the next question from the line of Abhijit Akella from Kotak Securities. Please go ahead. Yeah. Good afternoon, Rahul Jain. Congrats on great set of numbers. Thanks for taking. Thank you, Abhijit. Just two from my side. First one was on the raw material cost pressure in the fluoro specialties business. You know, if it's possible to share any sense of roughly how much that might have impacted margins in Q4. You know, can we, as you mentioned, you expect to see at least 60%-70% recovery of that in the next, you know, couple of quarters. Can we expect that to improve the margins for this? Over the year, Abhijit, my sense is roughly about INR 30 crore-INR 35 crore could have been the number in terms of had we been able to pass on all the costs. In terms of EBITDA from a Specialty Chemicals business perspective. Hopefully that is one of the reasons we are saying that we could be better off in terms of when we negotiate new contracts with the customers, which is also giving us that positive. Abhijit? Yes, that's very helpful, sir. Thank you. The second question I had was with regard to the refrigerant market scenario. You know, you spoke a little bit about the factors that have led to this sharp increase in prices over the course of the last, you know, year or two quarters. If you could just, you know, help us understand your perspective on how all these drivers are shaping up at this point in time. Are they still? Does everything still remain the way it was? You know, what changes are you seeing, if any, at the margin? Thank you so much. For three things, Abhijit. I think these factors that I have spoken about are not one time factors that we are looking at. These are more in the nature of let's say sustained positions that the regulators have created. I don't see some of these going away. The bigger part here, Abhijit, also is that there are no new capacities that are getting added. India is probably the only one who can add capacities till December 2023. Other than that, China, there are no new capacities that can be added. To my mind, prices will remain here or get firmed up only. Thank you. That is how we are looking at it. Obviously, there can be. See again, the world is today very hot with inflation, right? As this inflation comes down, there may be some demand negatives that come through. If that happens, there will be a negative, but I don't see that happening in current scenario. Thank you so much, Rahul. Thank you. Ladies and gentlemen, please limit your questions to one per participant. Should you have a follow-up question, we would request you to rejoin the question queue. Next question is from the line of Arjun Khanna from Kotak. Please go ahead. Thank you for taking the question and congratulations. Great set of numbers, sir. Thank you, Arjun. Arjun, if you could just unmute and talk. Yes. Since it's just one question, I'll just ask it. It's on the fluoropolymer side. Essentially on the PTFE plant, are we on schedule? We had earlier talked of maybe getting the plant on stream by September, October, November of this calendar year. The second part to this question is for the R22 expansion of INR 30 crore. I assume that would be for TFE, which we're using in PTFE. If you could just talk about it, what are our capacities and potentially how do you see the fluoropolymer business shape up? Thank you. Arjun, long question. I understand that the question is regarding when does PTFE start up. I think it is October 2022 when we are looking to get the PTFE start up done. With respect to R22, when we were doing our overall balance in terms of saleable material, the market demand for non-emissive uses also from our own captive consumption, not just for PTFE or TFE perspective, but also from the specialty chemicals business, we found that there was a small gap. The INR 30 crore CapEx is largely a reactor where the downstream is available for us to be able to increase the R22 capacity. I'm not sure if I've been able to answer the full question that you had. Hopefully. Sir, just one more. In terms of the fluoropolymer or in terms of PTFE. Initially you are talking of 6,000 tons. I just want to understand, is the utility, et cetera, capable of doing more, if you have probably a phase two maybe or three years down the line? Arjun, maybe we speak separately. I am not able to hear you very well. It's just very muffled. Mr. Khanna, please use the handset. Sir. Thank you, sir. Thank you. We'll move on to the next question from the line of Ranjit from IIFL. Please go ahead. Yeah. Hi, sir. Thank you for taking my question and congratulations on a good set of numbers. The question is on the Specialty side. In the past, we have been a bit conservative and have been alluding that the base is increasing, and the growth has to be kind of tapering off. Despite the 30% growth, we are still confident enough to give a 20% growth guidance. Just wanted to understand where are you getting this confidence from? Second bit of question would be on that now it's already at INR 3,100 crore of Specialty revenues. As the base kind of gets increasing, how do we see diversification into this particular segment? I understand that we are getting a bit more into pharma and becoming a bit aggressive. Agri and pharma, are we looking at any new age segments to diversify this particular segment? Thank you. Ranjit, I am a bit confused as to how to answer your question. When I tell you 15%-20%, you are disappointed. When today I'm telling you 20% I am very confident of, you are saying, "Where is the confidence coming from?" I am a bit disappointed with the question, Ranjit, but let me still try and answer it. The fact is what we've looked at in terms of being able to answer your question is what is our current order book? What are the new products that we have launched over the last 12-18 months in terms of the traction that they are building, and how are we looking at existing product and expansions? The MPP 4, which is scheduled to get commissioned very, very soon. We are fairly confident of building that up and getting it to peak capacity very, very soon. All of those things are a positive from our side, which is giving us the confidence. Hopefully, given where the business is, we should be able to do a better job even than what I've talked about. That's where the confidence is coming from. You are absolutely right when you say that there is good traction in pharma that we are witnessing. Yes, that's true. We are also looking at and are very excited about a couple of AIs that we are working on. Hopefully, that should also come on stream and we should be able to bring that up as some of our key products for the future as well. That's how the confidence is coming in, Ranjit. Maybe we speak separately about the confidence issue that you are facing. Sure, sir. My question was more like the comment was largely that, one should also see this 20% growth on a more conservative side. I hope I have answered it appropriately, Ranjit. Sure, sir. Thank you. The second part was more on the diversification front. In addition to pharma and agri, are you also looking at any other businesses? I said this multiple times, Ranjit. Yes, there are a couple of projects that are going on, but their current position is in such a nascent state that I don't want to talk about and let's say, get your hopes up high. Thank you, Mr. Ranjit. May we request that you return to the question queue for follow-up question? Sir, should we take more questions? I think the time's up, so I think it's time for closing remarks. Thank you. Over to you, sir, for closing comments. Thank you. I hope we've been able to answer all your questions. I wish each one of you remain safe and healthy. If you have any further questions, we would be happy to be of assistance. We hope to have your valuable support on a continued basis as we move ahead. On behalf of the management, I once again thank you for taking the time to join us on this call. Thank you very much, everyone. Thank you. Ladies and gentlemen, on behalf of Axis Capital Limited, that concludes this conference call. Thank you for joining us and you may now disconnect your lines.