Ladies and gentlemen, good day and welcome to SRF Limited Q3 and nine months FY23 earnings conference call hosted by Kotak Securities 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 and 0 on your touchtone phone. I now hand the conference over to Mr. Abhijit Akella from Kotak Securities. Thank you, and over to you, sir. Yeah. Thank you, Tanvi. Ladies and gentlemen, good afternoon, and thank you for joining us on SRF Q3 and nine-month FY23 post results conference call. On behalf of Kotak Securities, it's my pleasure to welcome Mr. Rahul Jain, President and CFO of SRF Limited, to this call. We'll begin the call with opening remarks by management, following which we'll open up the floor for a Q&A session. I would now like to invite Ms. Nitika Dhawan, Head of Corporate Communications at SRF, to take proceedings forward. Thank you, and over to you, Nitika. Good afternoon, everyone, and thank you for joining us on SRF Limited quarter three and nine-month FY23 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 would now like to invite Mr. Jain to make his opening remarks. Thank you, Nitika, and good afternoon, everyone, and thank you for joining us today on SRF Q3 and nine-month earnings conference call. I trust all of you have had the opportunity to go through the our results and the presentation shared with you earlier. I will begin the call by briefly taking you through the key financial and operational highlights for the period under review. Following which we will open the forum for a Q&A session. During the quarter, we have reported a good performance, given the challenging times being faced by some of our businesses. The Technical Textiles and Packaging Films Businesses continued to witness a difficult operating environment, while the Chemical Business performed exceedingly well, both on operating and financial parameters. On a consolidated basis, revenue grew 4% year-on-year to INR 3,470 crore in Q3 FY23. EBIT stood at INR 726 crore, down 9% on a YOY basis, which is largely attributable to the weakness in TTB and the PFB. Profit after tax stood at INR 511 crore in Q3 FY23, up 1% YOY. During the quarter, the board has approved a second interim dividend of INR 3.6 per share, in addition to the first interim dividend of a similar amount declared earlier. This will result in a payout of INR 106.71 crore. Coming to our segmental performance, our chemical business reported robust growth. Revenue grew 23% YOY at INR 1,757 crore in Q3 FY23. Within the chemical segment, our specialty chemical business delivered record performance with the successful addition of new products that received substantial market traction. The ramp-up of the state-of-the-art MPP4 facility at Dahej and strong demand for key products and downstream derivatives. High level of customer engagement with global innovators continues to be our USP as complex and advanced products and AIs remain in focus. Our pharma intermediate plant is also being commissioned and should be ramped up fairly quickly. New CapEx are in line with the projects that we are doing for our key customers. We have now made announcements on capital expenditure in the specialty chemical business over the last 2 quarters that aggregate more than INR 1,000 crore. I am pleased to share that the board has approved another project for setting up a new and dedicated facility to produce an agrochemical intermediate at Dahej at a project cost of INR 110 crore to meet the growing demand of the product in the future. In addition, a new plant building structure at Dahej was approved at a cost of INR 40 crore to meet the future requirements. All these projects are expected to be commissioned over a period of one year. Our customer engagement, execution capability, and operational excellence gives us confidence of the long-term success of the business. Our R&D and scale-up facilities were further augmented, developing a variety of new technologies and platforms to bolster SRF into next level technology to play in the future. Our fluorochemical business registered healthy performance on account of several key factors, including strong traction in the domestic market for refrigerants, continued demand for our Dymel HFA 134a/P pharma grade gas, healthy contributions from Chloromethane, and gradual ramp-up of volumes of the recently commissioned facilities. All of our fluorochemical plants are running well, and full benefit of the recently commercialized Chloromethane plant should be available from next quarter onwards. The Chloromethane plant has been successfully ramped up. Outlook for domestic demand for HFAs remains strong, and we are also witnessing traction from the U.S. market. There is, however, a slight delay in commissioning of the PTFE plant due to certain logistical issues for which we have already put countermeasures in place. I'm also pleased to announce that the board has approved a project to establish a range of specialty fluoropolymers at Dahej at a cost of INR 595 crores. The project seeks to enter into the lucrative PVDF, FEP, and FKM space, which caters to range of industries that include battery, chemical, coating, solar, automotive, and aerospace. With a highly backward integrated value chain, we believe that we will start to cater to the needs of a growing segment. The project is expected to be commissioned in 24 months. In total, we have now announced more than INR 1,700 crores of CapEx over the past 9 months in our chemical businesses, which demonstrates our commitment to invest in the business. At our Dahej site, we have also recently commissioned a new 20 megawatt captive power plant, which should allow us to optimize our energy costs at the site. Our Packaging Films Business reported a revenue of INR 1,203 crores in Q3 FY23. The business faced headwinds with several new lines getting operationalized, both in the BOPET and BOPP film segments in India and overseas. In addition, a decline in global demand, elevated energy costs in Europe adversely impacted our Hungary operations. Surplus supply in the near term are unlikely to get corrected, but we do believe that BOPP will start to witness an improving trend going forward. Energy costs in Europe are also witnessing some softness, and we are hopeful of a better performance in the next quarter, while full benefit of the reduction in energy costs will likely reflect in the next financial year only. Our WAP story, the main contract, and the aluminum foil project is also expected to start during the end of Q2 FY24. The company remains optimistic that Packaging Films Business is well prepared as demand pivots towards global suppliers with multi-locational facilities. Furthermore, the business remains focused on operational efficiencies initiatives to mitigate volatility in this segment. Moving on to our Technical Textiles Business, we reported revenue of INR 426 crores in Q3 FY23 versus INR 538 crores in Q3 FY22. The segment witnessed a subdued performance during the quarter owing to weak demand for nylon tire cord fabric and polyester industrial yarn. The company anticipates an uptick in the medium term based on customer interaction. Belting fabric segment continues to do well. In our other segment, revenue stood at INR 92 crores in Q3 FY23. Both the coated and laminated fabric businesses met expectations in a challenging external environment. The weak rupee also led to recognition of a forex loss of INR 15 crores during the quarter. We believe that some of this should unwind over the next quarter. Given that SRF is a net exporter, a weaker rupee should aid to our overall profitability. We also witnessed increased interest outflow during the quarter from INR 29 crores corresponding period last year to INR 62 crores during Q3 FY23. This is largely due to the current interest rate scenario prevailing both globally and locally. The Fed has remained steadfast in its interest rate increase cycle and so has been the RBI. Some of the interest amount can be attributed to larger borrowing profile, majority of the same is due to the increased interest rates that we have witnessed. You would also have noticed a recognition of a MAT credit previously written off now being recognized. The company has recognized a MAT credit of INR 52 crores during Q3 FY23, and additionally INR 22 crores will be recognized in Q4 FY23. This has been necessitated due to the expected shift to the new regime in FY24 from an SRF standalone perspective. I am pleased to share that during the quarter, SRF received multiple awards across its businesses and functions. SRF's chemical facility in Dhari, Rajasthan was awarded the Bhamashah Award for contributing to education and infrastructure development of government schools in Alwar, Rajasthan. SRF's Packaging Films Business won the IAQ Quality Sustainability Award from the International Academy for Quality, and our fluorochemical business unit in Thailand was honored with the Best Supplier Award by Toshiba. SRF continues to grow and evolve its businesses in a purpose-driven way. I am pleased to share that our CSR wing, the SRF Foundation, launched Smart Shiksha Digital Bus in 3 locations, namely Kashipur in Uttarakhand, Bharuch in Gujarat, and Mewat in Haryana during this quarter. In our constant endeavor to promote Indian arts and culture, we organized a two-day Indian classical music concert, namely Smaran, to honor the birth centenary of Padma Vibhushan, Ustad Ali Akbar Khan Sahab in New Delhi. To summarize, SRF has demonstrated resilience in the face of external challenges in the packaging and technical textile segments, with performance in our chemical business being a notable highlight. The company's ability to overcome headwinds is a testament to its strong foundation, its infrastructure, well-developed R&D capabilities, and investments in opportunities across various segments. We believe our solid multi-business model will withstand external challenges and create sustainable value for all stakeholders going forward. On that note, I'll conclude my remarks and will 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 the 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. The first question is on the line of Rohit Nagraj from Centrum Broking. Please go ahead. Yeah. Thanks for the opportunity, and congrats on Specialty Chemicals' performance. First question is on PTFE. You indicated that it's been delayed. What are the timelines that we are looking at in terms of commissioning and then probably in terms of the optimal utilization of the facility? Thank you. Rohit, thank you for your question. We believe, either by the end of Q4 this financial year or early next quarter, probably very early in April, we should be commissioning the plant. From a ramp-up perspective, I think we are in fairly good shape to be able to ramp it up. Certain customers that we are already starting to speak with. We believe in the next six months we should be able to ramp it up very, very swiftly. All right. got it. second question is on the Packaging Films Business. During the first nine months on a year-on-year basis, have you seen a volume increase or is it flattish volumes and time, the prices have been the impact on the margins? I would say, Rohit, that the new facilities that we have commissioned have actually led to higher volumes when we compare it to corresponding period last year, nine months. Therefore, when you look at it, our overall sales on a nine monthly basis in the Packaging Films Business have been kind of higher when we compare it. About INR 3,300 crores to about INR 4,000 crores in the nine-month period is what we have witnessed. Largely, I think it is volume driven because majority of the, let's say, when we think about it from a margin perspective, that has come down. Also when you look at it from a utilization perspective, I think, we've been fairly good in terms of overall utilization. Q3 utilizations would have ranged within 80-85%, and that's the situation, Rohit. Okay. While Q3 would have been a negative because of the fact that there is the higher energy costs that are prevailing on that. All right. Got it. Thanks a lot. Yeah. Thanks a lot, and that was all, sir. Thank you. The next question is from the line of Sanjesh Jain from ICICI Securities. Please go ahead. Good afternoon, Rahulji. Thanks for taking the question. First off, continuing with the packaging film. In our presentation, we have mentioned that we are also seeing some demand tapering down. It is fair to assume that the spread contraction, what we are seeing in the market is a combination of both excess supply and demand weakness. Will it be a fair assumption? It's a fair assumption. I think the comment in the presentation was more referring to Q3 as such, while not in terms of saying that the overall demand, when you look at it on an annualized basis, that is coming down. Let's say from a pure quarter-on-quarter inventory, the stocking and certain other things happening, that's the situation that we saw, just pure quarter-on-quarter suggestion. No, it is nothing. It's just a transitory one quarter kind of an impact, right? That's right. From a demand perspective. From a supply demand perspective, supply still outstrips demand to a very large extent. That's the comment you would have seen in the overall packaging film commentary as well. Got it. Second question in the fluoro specialty side of the business. Appreciate the details you have given. Specialty or Specialty Chemical Business? Fluoro Specialty. Specialty fluoro Fluoropolymers. Specialty fluoropolymers. You are talking about the new capacity. PFM and, yeah, FEP we said. Can you share further detail in terms of capacity, if you can? As well as one clarification. This entire process will be free of PFAS kind of a product. Is that the right thing to understand? From an overall capacity, I'm unable to share similarly the capacity, but overall capacity should be in the range of 4,500 tons or so when you look at it in a total perspective. In terms of saying whether the process is PSA OA free, I think the technology that we will be using will be PSA OA free. Okay. Okay. Fair enough. My last question, it's a bookkeeping, so on the Forex loss, what we have incurred INR 15 crore, it is more to do with the receivables and payables. Is that the right assumption, right? What flows through- What happens, Sanjay, is there are certain types of liabilities that I always have on my book which flow through the P&L and the restatement, the weaker rupee will lead to a negative in that sense, and therefore there will be a negative in the profit and loss account because of the liability restatement that happens. With respect, the other pieces in it will always be the receivables and payables that we have. To a certain extent, the hedges that we have created over a long period of time, which have always been a positive for us. Because of the sudden depreciation, it is a small negative that also flows through the P&L. Is it fair to assume a lot of it is just a book entry and not a cash loss, right? Majority of it should be, yes. Got it. Thank you, Rahulji, and best of luck for the coming quarters. Thank you. Thank you. The next question is from the line of Vishnu Kumar from Spark Capital. Please go ahead. Good evening, sir, and thanks for your time. Firstly, on the chemicals business, good results on the margin front. Any thoughts as to which segment has done well for you with the Ref-gas or spectrum? Because we have seen a QOQ increase in the margin. Some thoughts on this. Again, I would, I would say that the Ref-gas segment has done decently well. There has been no erosion. It's been slight positive. The majority of this has played out in the Specialty Chemicals space, and that's something that we believe is the one that has aided our margin for the quarter. Sir, in this spectrum, again, within this, is it through any raw material or any pricing or margin increase or new product launches that is feeding this kind of a growth, this kind of? It is a combination of all of those. To a certain extent, I would say there is a pricing benefit that has come in. If you remember in the last calls also I said that some of our Specialty Chemicals business is contracted in nature, as some of those contracts have got renewed. There is a pricing benefit that has come in. To a certain extent we've seen weakness in some of the key raw material prices also. That's also created some benefit. That's how we would look at it. It's a combination of all. Yes, there are a couple of new products that have been launched which have also given a positive in that sense. Broadly, in the next couple of quarters, this EBIT margin level should sustain or any thoughts? I think, purely just going by the number in terms of whether the overall margin should sustain, I think we have a fairly good visibility over the next one or two quarters that we should be able to sustain this. You have to also understand that we don't look at it from a pure quarter-on-quarter perspective, right? We said that in the chemical business, the intent is to go into more high value-added products, both in the Specialty Chemicals space and the fluorochemical space. When we look at it, and to a certain extent, the fluorochemical business has also some seasonality that play out in it. Now, when we look at it from a nine-month perspective, again, you would see that the overall margin has expanded. When you look at it Q-on-Q, be it comparative of corresponding period last year or the previous quarter, again, there has been an expansion. My sense is we can sustain this going forward, but businesses remain dynamic, Vishnu, and they will keep going through some business cycles. As of now, looks pretty much in good shape. Got it, sir. Just wanted to understand, what are the new plants that will come live over the next three, four quarters? Broadly, if you could just give us some thoughts on the plants that are going to come live across various segments. Let me just talk about the Specialty Chemicals first. The ones that will come in probably are the TIP, the TO1, the recent announcements that we have made for 2 or 3 products that will be there. We will have on the fluorochemical side, the TH1 and TH2, which is the SSG production that will come on stream. We have the TO1 that will come on stream. We have the water CapEx that we were doing that will come on stream. There will be the dedicated P38 plant that will come on stream. Multiple. Again, I think we've given timelines on each of the projects from when they are coming on stream. Got it, sir. Finally, one question on the Packaging Films Business. Are we seeing some energy cost normalizing? Should we see some reprieve on that for the next 2 quarters in your international segment? Again, I have said that in the initial commentary also. I think we are seeing some normalization in terms of energy cost in Hungary coming in. However, these are not significant from a Q on Q perspective. We believe, as we go through that journey, next year is when we will see significant benefit of that coming in. Sir, any rough margin trends you think this business will settle down at least- Not really. Can we be able to give you a% margin trend. What as a generic thing, what I can tell you is wherever we are today from a quarter-on-quarter perspective, we should be executing better, and next year should be even better than this. Got it, sir. Thank you and all the best. Thank you. Thank you. The next question is from the line of Surya Patra from Phillip Capital. Please go ahead. Yeah, thanks for the opportunity, sir. Sir, the first question is on the, core chemical or the specialty chemical business, EBIT margin increase. Sir, is it, in the current financial year, we have seen a kind of a much improved margin scenario compared to the historical period. Whether it is due to largely because of the improved product mix to downstream and, the Active Ingredients rather than the initial compounds. If it is so, could you also share what would be the share of this, derivative product or downstream products or the Active Ingredients product share in the overall chemical business? Surya, the answer to that question is absolutely right when we say that the product mix has been better. We are producing a larger set of derivatives. We are doing change. We are bringing in new products that have given us the benefit. SS-20, a couple of other products have also come in. That's creating the positive. The second question was whether you think it is sustainable or not. I think it is pretty much there in terms of sustainability. Again, you have to also understand that fact is that we are continuously investing. Like I said in the initial commentary also, more than INR 1,000 crores of CapEx is what we've announced over last 2 quarters, right? Our timelines of execution of these CapExes are probably about 10 months to 12 months, right? When we look at it from that perspective, I think growth positions that we are taking in the business are fairly significant, and a majority of these are based on customer discussions, customer contracts that are coming. That's how we are looking at it, rather than just the mix that you're talking about. Okay. Simultaneously, sir, if I link this same question to the Refrigerant Gases. This quarter generally, seasonally, it should be a much weaker quarter in the overall year. Sequentially also if we see the margin improvement, considering that there is no low contribution from the Refrigerant Gases, which was benefited by the price rises. Considering that, the performance here looks really good for the core chemical business in terms of margin performance. Next quarter we will be going into the peak season of the Refrigerant Gases and the continued performance in the core chemicals. Could other support the margin performance going ahead? Is the understanding correct, sir? I can only answer that in one word, Surya. Correct. Okay. Thank you, sir. My second question, sir. Ref-gas, whether there is a year-over-year growth in terms of export for the quarter? Surya, we don't look at it from a YOY perspective. It is the annual number that we have to look at. When we look at it from an annual volume perspective, I think there has been growth in the HFC space as well as in the Chloromethane space, given that we have recently commissioned the plant. The point to make also is that the Chloromethane plant got commissioned somewhere in the middle of Q3. Full benefit of the Chloromethane plant on the volume will come through in Q4 as well as when we look at it from an annualized perspective the year as a whole. That's how we would look at it, Surya. Sure, sir. Just last one question, sir. Regards the fluoropolymer that you have announced and the earlier fluoropolymer story that we had earlier indicated. Now 2 developments or 3. On a futuristic basis, your thought process about the fluoropolymer and how integratedly that you want to play it, and what would be the kinds of thought process about customer acquisition, market coverage, cost efficiency? From all this angle, if you can share some brief view about it, that would be really helpful. Surya, 2 or 3 things to point out here. First, the PTFE, which is the earlier fluoropolymer that you have talked about, is going to get commissioned very soon, and I alluded to that during the earlier part of the comment. Probably end of Q4 or early Q1 next year, we will have PTFE up and running. We believe, we are in a good situation to be able to ramp that up on a very, very fast basis. That's the positive. What we were looking at it strategically was the fluoropolymer space overall. Given our ability in terms of execution of the projects, in terms of our technological capability going backward and integrating that, to key raw materials for PVDF, VCM and subsequently, various other positions that we are taking on it, we think there is a large positive that we can create on that side. Customer acquisition, the specific question that you asked, is probably still some way down the line. While we have already started work on that side, the first thing to be able to do is to be able to supply the product. Once you have that product in place, only then you can talk about customer acquisition. That's how we would look at it, Surya. Sure, sir. Okay. Thank you, sir. Thanks a lot. Thank you. Thank you. Participants, we request you to please limit your questions to 2 per participant. Should you have any follow-up questions, you may join the queue back. The next question is from the line of Jessica from Nuvama. Please go ahead. Hi sir, Rohan here, from Nuvama. Sir, couple of questions, sir. First is on your new CapEx on specialty chemical. Roughly we have done some INR 1,700 crore total chemical CapEx announcement in last 9 months. Recently when we visited our plant, I think that one thing which came very strongly that our capabilities to deliver the CapEx part and shortening the overall CapEx commissioning time frame, which earlier used to be close to 18 months plus. Now we are confident in delivering in almost in a year's time. Do we expect that all this CapEx benefit will be visible over next 12 months or which will be prominently benefiting in FY24? Again, Rohan, I think it is a journey. Those that were announced in Q1, right? Have already will probably get commissioned by the end of Q1 next year or Q2 next year. Again, 8-10 months projects. Again, I think we will continue to engage with the stock exchange to tell you where the positive is. Some of the future year growth, which is FY24, will always be driven by the new projects that will get capitalized during the year. I don't believe the entire INR 750 will come in. When you look at it from an overall perspective, a majority of that should hit some part of, let's say H1, H2 in FY 2024 is what we would look at. I think the key projects that are getting commercialized or capitalized in FY 2024, which will even benefit, will be the pharma intermediate plant, the PTFE plant, CMS, which was commissioned only in November. There are about 2 or 3 HFC projects that will get commercialized in FY 2024. All of those will certainly hit Q4, will hit FY 2024. I think we have to look at it from a more longer-term perspective rather than just quarter-on-quarter perspective alone. Sure, sir. That we understand. Sir, secondly, on our HFC volumes, you have mentioned that in the domestic market you have seen a strong demand. Surprisingly, sir, this is a weak quarter, I mean, as far as the ref gases uses are concerned. How we are looking at this HFC volume, which has seen a good traction in domestic market? It is primarily driven by the import replacement, or we are taking market share from the unorganized market in the domestic market. How this domestic demand is- Actually, there is no unorganized market here. There is either us or imports on that side. On the domestic side, I think the growth we are looking at is that the domestic auto manufacturing segment has grown about 22% over the current quarter when we look at it. That's the market growth that is giving us that demand. Even the ROC segment has grown about 40% over the current period, corresponding period last year. That's where the domestic demand is coming in. We also believe that there is very strong traction in the domestic position on the refrigerant gases for Q4 and Q1 as well. That's something that we believe is going to be a much larger positive one. It is basically the entire market itself has grown significantly, that is helping us to grow in the domestic market. Correct. When you're talking only about Q3. From an overall perspective, I think we have a position from an overall perspective at a very large market share from in the Indian market. Fine, sir. Thank you. Thank you. The next question is from the line of Vivek Rajamani from Morgan Stanley. Please go ahead. Hi, sir. Thank you so much for the presentation. 2 questions from my side. Firstly, you did touch upon this before, but if you could just comment on the operating rates that you've seen across your different segments in this quarter. Maybe just for Hungary, if you can just talk about how you're running the plant, since January, that'll really help, sir. Okay. I didn't understand the first part of the question. Operating rate is what you said? Operating rates for your different segments. Operating rates. Vivek, I think, when we look at it from a technical textile perspective, probably in the range of about 65%-70% from an overall MTP of positioning, melting is pretty much full in terms of the capacity that we have. On the packaging film side, about 80%-82% is the operating position on that. This is also including Hungary in that sense. When I look at purely Hungary is probably operating at 40%-50% in terms of the operating rate on the Hungary side. On the fluorochemical piece, all the plants are running very well. While there is some piece that would have been obviously inventorized for future sale, but the plant, even the new CMS plant is running very well. On the Specialty Chemicals, again, I think pretty much full on operating efficiencies in the plant. MTP by design will have some spare capacity available. Even the MTP4, we are very happy with the way it is starting to ramp up. That's what I would probably put through. Yeah, that's the operating rate. Got it, sir. Very, very helpful. Just a clarification, sir. On Hungary, would it be fair to say they're still at 40-45% in this current quarter? Between 40%-50%. Got it, sir. Thank you so much. Sir, secondly, just on, you know, from a strategic standpoint on the CapEx, just if you could give some color in terms of your new investments? Will it now be focused more on some of these new applications like fluoropolymers going forward? Or will agrochemicals continue to be the bigger focus as has been the case for you guys? Yeah. Again, I think that what you are looking at, Vivek, is from a timing perspective. I think when you look at the investment that we are making in the specialty chemical side, the investment typically would cost between, for a smaller plant, INR 75-125 crores on an aggregate, 300-350 MTP plant. While when we look at it from a fluorochemical perspective, investments are larger. Right? Again, I am not differentiating between whether we are only doing this or that. I think given the opportunity that we are seeing, both in the fluorochemical space as well as the spec end space, we are happy to invest if we are getting our appropriate IRRs there. Understood, sir. I'll just get back into queue. Thank you so much for your time. Thank you. Thank you. The next question is from the line of Madhav Marda from Fidelity International. Please go ahead. Yeah. Good afternoon. Thank you so much for your time once again. I just want to understand the kind of business that SRF is targeting in the global agrochemical market. Is it fair to say that we are targeting a lot of pipeline molecules of innovator customers? Is that also the kind of market that we're going after, which could kind of help drive growth over the medium term in this space? Again, we've always said this, Madhav, that, our key customer set are global innovators. Right? When we look at it, their pipeline becomes an important element for us. As also the, let's say, expansion of their existing products becomes an important element for us. When you say that we are targeting that, yes, that's probably the way to look at it as well. Understood. What about the pharma business? How is that scaling up in terms of sort of our pipeline getting closer to commercialization? I think you did mention one product was commercialized in the pharma space. When we say commercialized, Madhav, what it really means is that a commercial lot has been supplied. Right? It will ramp up over a period of time. Again, I would say it's a journey. It's not something that happens overnight. Again, we've always said this, don't look at it on a quarter-on-quarter basis. Understood. Okay. Thank you. Thank you. The next question is from the line of Arjun Khanna from Kotak Mahindra Asset Management. Please go ahead. Sir, thank you for taking my question, and congratulations. Good set of numbers on the chemical side. Just to understand a little bit on the tax rate. You did in the presentation allude to the MAT credit and moving to the new regime. If I look at the consolidated tax rate for FY22 and FY21, I see 25.5%. Is it a correct understanding that the consolidated tax- Arjun, I've always said this. Whenever you are looking at tax rate, when you start to look at it on a consolidated basis, it creates a very volatile picture. The best thing to do when you are looking at tax rate is look at standalone numbers. That's how you should look at it. When you, I would typically say that the utilization of the MAT credit, which was previously written off, some portion of that, about INR 52 crores, has been accounted for in this year, this quarter. INR 22 crores will get accounted for in the next quarter as well because that's how the accounting standards are structured. They don't allow you to take it immediately. Whenever you are saying that there is a possibility of recognizing it has to flow through the effective tax rate, that's how it happens. From a guidance perspective, I think, the way our numbers are structured today, the way projections are, was to do longer term projections when we are looking at tax rates. We believe we will shift into the new regime next year, which means that we will be probably at an ETR on a standalone perspective, at about 25%. The global rate will actually be much lower than that. Sure. We'll definitely, probably be lower than that 25%, going forward. Yeah, Arjun. I go back to the same point. Look at standalone. I can give you guidance on that, and that's what I've done. Sure. Sure. Just to refresh, in terms of Hungary and Thailand, what would the tax rates be? Hungary is a very low tax rate, practically nonexistent, 2-2.5% is where it is on an ETR perspective. Thailand is probably in the range of about 25% on an 20% on an overall basis. There is a very large tax holiday based on the investments that we've done. That's how Thailand will pan out. South Africa is now in normal tax rate, which is about 27%. Again, you would have some previous year losses that will come through. They will be allowed to be used. There will be certain positions that we've taken. That's why I'm, that's why I don't give you a consolidated tax position. I therefore give you the standalone one, which is more easier to understand. Sure. Perfect. No, this helps a lot. My next question is in terms of U.S. HFC sales. In the last quarter call, we mentioned we'd probably do booking in the third quarter for the fourth quarter onwards, HFC sales in the U.S. Any update in terms of outlook? Yeah. Again, I think, We said that the US market, a majority of the sales into the US market will pan out in Q4. We have good traction on that side, Arjun. Sure. The new CapEx is on stream for the HFCs. Would that be within expected timelines? Oh, I didn't catch that. Could you repeat, please? We are undergoing a CapEx expansion for HFCs also. Would that be in the timeline as we envisaged? Yes. As of now, we believe September is when it should come out. Perfect. Thank you so much for your time. Thank you. Thank you. The next question is from the line of Tanveer Singh from Nuvama Wealth. Please go ahead. Yeah. Thank you for taking my question. Question related to the textile and the packaging business. Volumes are there. Just wanted to understand that, we have, you know, significant resources invested there, and oversupply in PFB and BOPET is unlikely to ease in the next 2, 3 years. How do you think it will be? Correct. It will do well. Yeah. Even in an oversupply situation, whether it's the. I understand that the volume would be difficult to, you know, ramp. Pricing, how we are going to play with the pricing or, you know, volume entry over there? Tanvir, I'm sorry. I failed to understand the question. Could you please repeat? No, I wanted to know that now spread has already come down significantly. Whether it's the pricing where we will be playing there by reducing the price or we can, you know, even having the same price, we can increase the volume going for that on the basis of our customer demand. Conversion margin is a function of the price. Right? Because there is excess supply available in the market today, Tanvir, we are seeing a reduction in conversion margin that is happening. Again, to a certain extent, this business is commoditized. This business has a supply situation that is there in the market today, especially in BOPET. We believe that while there will be some negatives around it, we should be better off given our customer contracts, given our value-added product profile, given our R&D capability, and given our position with some of our key customers. While the industry will go through, let's say to a certain extent an extended lull, BOPP should still do better than the trend. That's how we are looking at it. Your question with respect to can we play with the price? It's not really relevant. There is a certain market price that you are dealing with. If the market price has come down, your conversion margin also has come down. Okay. Can you indicate what is your spread currently in, BOPET segment? Not really. The spreads are pretty localized. From an India perspective or a Thailand perspective or a South Africa perspective, each one will have a different kind of spread, whether it is exporting or domestic market. Very different positions to play around from that. Even if I aggregate up the spread and give you a single BOPET spread, that would really not be the right thing to do. Okay. Okay. Secondly, in previous segments, the growth we see in Q3 or even in nine months, how much of this is attributable to MPP4 ramp-up? Not very significant. MPP4 is the something that we commissioned only in Q3. While there are a couple of products that we have sold, the full ramp-up of MPP4 will come through in Q4 as well as FY24. I would not attribute very significant change in terms of, let's say, the revenue growth of 23% that we've seen over corresponding period last year to just on MPP4. MPP4 is a good positive, but not only the positive that's there. Okay. Like before, you know, addressing on pharma intermediates currently we have started with. Can you give any, you know, guidance, consider how much end products we are likely to have? Or any existing product which we've already started with, so whether, the ramp-up, how the ramp-up is going to happen with that existing product? The PIT plant is not been commissioned as of now. We have said in the commentary as well, Vineet, that the PIT plant is in the process of getting commissioned. What we believe is that we will ramp it up very, very fast. That's what we have said. Okay. Okay, understood. Understood. Yeah. Yeah, Yeah, that's it from my side. Thank you. Thank you. The next question is from the line of Abhijit Akella from Kotak Securities. Please go ahead. Thank you so much. Rahul, just a couple of clarification that I was looking to see. One is with regard to the new CapEx on the specialty fluoropolymers. While you've indicated the capacity roughly, is there a broad, you know, revenue and margin profile kind of outlook that you could share with us? Roughly speaking, I think we have roughly about a 25%-28% IRR positioning on this one. Probably about a 4-year payback that we believe we can generate. To be able to give you, let's say, stable scale sales or current positioning on it is very difficult. I think it should be similar to the chemical business, say between 0.8-1.2, is what we believe will pan out on this one. I think it is also important to understand, Abhijit, that this is a strategic investment that we are saying that we will do. We believe that this will allow us to cater to the large fluorocarbon space in total, rather than just be on the fluoro, let's say, fluorochemical space. That's how we are looking at it. Therefore, we believe this is a strategic call that we are taking to get into fluoropolymers. Understood. That's helpful, sir. Just on the CapEx for this year and next year, we are still on track for our INR 3,000 crore+ numbers for this year, I presume. Any broad number for next year? That is three years. Yeah. Next year as well, should we assume a similar kind of number? Again, Abhijit Akella, I will probably be able to give you better clarity on the number going forward in the next call because there is work going on in terms of what is going to be the CapEx fee. Given where our current CapEx announcements are, right, we believe anywhere between INR 2,000 crores or let's say about INR 2,500 crores of CapEx fees are already on the ground. Right? Some of it will get incurred in FY24, and some will probably like the new fluoropolymer CapEx is a 2-year CapEx. Right? Some of that will get incurred in FY25 as well. From a visibility perspective, we believe INR 2,200-2,500 crores is pretty much well doable. INR 2,800-30,000 crores is what we should be targeting going forward as well. Got it. Got it. One last quick thing. Last quarter, you had told us that for Specialty Chemicals, you do expect to do better than the 20% revenue growth guidance you had provided at the beginning of the year. Any further updates you would like to make to, you know, that guidance? Abhijit, you've seen my 9-month number. You are putting me on a spot. To be very frank about it, I think there is significant traction that we have generated in nine months in the fluoro, in the Specialty Chemicals business space. The next question I do know that you are going to ask me what is your target for next year. Again, I'll give you better clarity on that next quarter. Yeah, that 20% number is far out of the window for FY23. Okay. Thank you so much. I'll get back into you. Thanks. Thank you, Abhijit. Thank you. The next question is from the line of Keyur Pandya from ICICI Prudential Life Insurance Company Limited. Please go ahead. Thanks for the opportunity. Sir, the question is on the two new products that we are starting. First, the aluminum foil and second is PTFE. Since both the products are new in our portfolio. Basically just want to understand what would the peak utilization or peak revenue or asset turn, and from that peak should we assume 20%-30% kind of utilization in FY24 since they are, I mean, since it's new for us? Both are different animals. Aluminum foil is the packaging film, let's say, substrate within the business, positioning that we have. Therefore, the kind of rates that we've seen in the packaging film space and specifically on aluminum foil would probably be 1.75 to 2 times our asset terms. All of that does depend on the market pricing of some of these products. Mm. PTFE should also typically be following a similar to a chemical business positioning in terms of the overall revenue. Given the current rates of PTFE, I think the peak revenues that it could get to is 1.25-1.3 of the overall cost of the project. On the whether everything will hit through FY24. Both of these are kind of coming up in September. The rated capacity availability of these is only about 4 to 5, 6 months. Aluminum foil should be faster. PTFE will come in April and therefore 6 months in terms of the product approvals and that cycle should take, and therefore typically be available for a 6-month period in the FY24 as well from a full utilization perspective. Understood. Understood. Sir, thanks a lot, and all the very best. Thank you. Thank you. Thank you. The next question is on the line of Ranjit from IIFL Securities. Please go ahead. Yeah. Hi, sir. Thanks for giving me the opportunity. The question is on the chemical business. The 9 months performance that we have seen. Would you like to call out some trends, historically what we have seen the exports has been a bit heavy on the fluorochemicals and the Specialty Chemicals. Of late we are also seeing some traction in the domestic market for both these segments. Just wanted to get a sense from you how these trends are shaping up and what is the likely trend to be in the future. Again, when you look at the Specialty Chemicals business, Ranjit, we've seen H2 to be always heavier than H1, right? Again, you of all people know the fact that fluorochemicals business, especially the Ref-gas space, there is a seasonality that does play out. From a trending perspective, we believe that we have good traction on the fluorochemicals business and the Ref-gas side. Market is looking very positive for us. The domestic demand is very significantly positive. Despite a low, let's say seasonally weaker quarter Q3, Q4 should performing as it has already. I think Q4 should give us very large traction in FY23. Again, from an FY24 perspective, the seasonality play in the fluorochemicals space will remain. Q1 should do well, again, that seasonality trend does play out. In the Specialty Chemicals space as our new plants get capitalized, new plants get commercialized, PIP does well. There is large traction that we are seeing from an overall sales perspective in the Specialty Chemicals play as well. Ranjit? Yeah. Thank you, sir. More on the export versus domestic, the traction is likely to be equal? In the Specialty Chemicals play or the Fluorochemicals side? Specialty Chemicals. See, again, Specialty Chemicals Business in itself is focused on export. Largely the new projects that are commissioned are being commissioned are also export focused. To that extent, the focus remains on exports. The positioning that we are creating in the Specialty Chemicals space is also largely exports. That's how it should play out, Ranjit. Okay, sir. That's helpful. Thank you. The second question, in the opening commentary you did talk about a variety of technologies and platforms in the Specialty Chemicals space. Just wanted a bit more granularity on that front. I know this might be a bit more technical, but would be helpful to us. Thank you. Ranjit, if you want to get into the technological piece of it, I will have to get an expert to talk to you about it. I'm not the expert here. Maybe we can come back to you in terms of what we are talking about on that. Sure, sir. That would be very helpful. Thank you. Thank you. The next question is from the line of Shaleen from UBS. Please go ahead. Hello. Yeah, Shaleen. Hi, sir. Yeah, congratulations on a good set of numbers. Thank you. Sir, more of a hypothetical question, if you can answer. Sir, with our Specialty Chemicals getting benefited, with, you know, the cost of production going up in Europe. This case is giving us a chance to move up the value chain. Is this a right hypothesis? To a very large extent, the way we should look at it, Shaleen, is that while cost of production, purely that piece is transitory. It could come down in the future, given where energy prices are now coming down, too, in Europe. I think the thought process of the customers and the innovators is more important here in terms of saying that we want to outsource more. I think that as a trend is playing out, where we are getting the benefit of that. Cost of production going up today is probably more transitory, Shaleen. No, I agree with you. That could be a triggering point, and I, agree with you that it's maybe a triggering point, but that's giving us an opportunity to move up the value chain and hence better reflection in our margin. Sorry, sir. Okay, thank you. Satyen, earlier, sir, I got dropped off in between. Not sure if you have answered already. Any plans on the price. The voice is kind of cracking. Could you just get the phone to your close to you so that it is easier? Shaleen, if you're using earphones, please use a handset instead. Okay. Is it better? I just moved to the channel. Yeah. Yeah. One more thing. I don't know if you have already answered this question, because I got dropped off in between. On the pricing of refrigerant gas. Like, any color that how is it shaping up for you? Because we are entering into a strong season or we are already into a strong season. Yes. I mean, unfortunately, I can't talk about just the pricing of refrigerant gas for the future. There are contracts that we are doing. There are positions that we are creating on that side. It always happens that when there is excess demand and lower supply, prices do go up. Very difficult to be able to comment whether generically the prices will keep going up in Q4 or Q1 FY24. That's very difficult to be able to comment on it. Yes, I think the way we look at it, I think the pricing should remain strong, oth from a domestic and an export market. As we stand today, pricing is quite strong. Forward looking, so we don't say much, Shaleen. Okay. Okay. Okay. All right, sir. Okay, sir. That's it from my side then. Thank you so much. Thank you. The next question is from the line of Resham Jain from DSP Investment Managers. Please go ahead. Hi. Good evening. My question is on the agrochemical PE end market for us. Few of the global companies have mentioned about slightly high level of inventory. Are you seeing any inventory, you know, that kind of situation for your kind, your products for like in the near term or no such issues for us? Not really, Resham. I think what we've seen is good traction from customers. We've not had a position where some of the customers have ended up either deferring or to changing their contracts or orders. That's remained for us. I've not seen a position where let's say that some of the orders have got deferred or delayed because of the customer having large inventories. Not as of now, Resham. Okay. inventory days remains in Specialty Chemicals specifically, similar to or normalized level? No, That's a different question. The first question that you have asked was whether we are seeing at, let's say, higher inventory levels at customer end and therefore, a higher position where it is getting deferred. That's not happening. The second question that you are asking is my inventory levels. Again, some of the products that we do are also in batch, and therefore to a certain extent, we have to kind of inventorize it when the next sales process comes in. There could be some changes, but overall, we believe that when we look at it from a year as a whole perspective, year-ending perspective, I think we should be in fairly good shape in terms of our working capital management, even in the Specialty Chemicals business. Okay. Great, sir. Thank you. All the best. Thank you. The next question is from the line of Tejas Sheth from Nippon India. Please go ahead. Tejas, your voice is not clear. Tejas, are you able to hear me? Tejas, we've not been able to hear your question. Tejas, are you able to hear me? As there is no response, we'll move to the next question from the line of Nitin Tiwari from Yes Securities. Please go ahead. Good evening, Karan. Thanks for the opportunity. My question is related to the chemicals business. Is it possible to give us a bifurcation of, fluorochemicals and Specialty Chemicals? That's one. Secondly, a bifurcation of growth in terms of growth from pricing and volume. Nitin, unfortunately, we do that only from an annualized basis. On a quarter-on-quarter or a, or a nine-month to nine-month period, we don't differentiate between, and we don't give the numbers out for, second versus fluorochem. That we don't do. You, I will give you the numbers for the year as a whole, post-March end. Sir, any broad indication is possible, if not exact numbers? No, we don't do that, Nitin. Sorry. All right, sir. Secondly, sir, on, you already answered on the guidance bit that, so I'll let you know I won't ask that question. Next on the contract terms and durations, do you see any changes in terms of the contract terms and duration post the regular change in the cost of production and the volatility of raw material prices that you've been simply observed in the past few quarters? With your clients, are you observing any change in the duration of contracts that you are entering into? Are you talking about the Specialty Chemicals Business, Nitin? Yes. Yes, sir. Contract positions are typically one to three years, depending on the product that you are making. If it is a CDMO kind of a position or a CMO kind of a position, you would typically get a two to three-year contract. As you go out and ensure that the product is a more longer term commitment that the customer has made, you will then kind of get into annual contracts. That's how it works, Nitin. Sure, sir. That's it. Thanks. Change in terms of what was happening earlier and what is happening now. That remains the same. There is no change as such in terms of, these terms. Not really. The positioning of that remains similar. Sure, sir. Thank you so much, sir. That's all from my end. Thank you very much. Due to time constraint, that was the last question for today. I now hand the conference over to management for closing remarks. Yeah. Thank you so much everyone for getting on the call. I hope we've been able to answer some of your questions. I wish that each one of you to continue to 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. Bye-bye. Thank you. On behalf of Kotak Securities, I conclude this conference. Thank you for joining us. You may now disconnect your lines.