Ladies and gentlemen, good day and welcome to the Supreme Industries Q4 FY22 earnings conference call hosted by DAM Capital Advisors. As a reminder, all participant lines will be in 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. Aasim Bharde from DAM Capital. Thank you, and over to you, sir. Thanks, Tanvi. Good evening, all, and on behalf of DAM Capital Advisors, it is a pleasure having you all on Supreme Industries Q4 results conference call. As usual, we have the senior leadership of the company on this call, and I would hand over the floor to them to take you all to the Q4 results. Thank you, and over to you, gentlemen. Good evening, everyone. I am S.J. Taparia, Executive Director of The Supreme Industries Limited. Every time you interact with Mr. M.P. Taparia, Managing Director of the company, but today he's a little unwell and advised rest, hence myself along with my colleagues, Mr. P.C. Somani, CFO, and Mr. R.J. Saboo, Vice President Corporate Affairs and Company Secretary, welcome all the participants who are participating in the discussion of the audited standalone and consolidated financial results for the quarter and year ended 31st March 2022. The standalone results and the consolidated results are already with you. I will give brief on company's product operating performance and other highlights. The company sold 128,607 metric tons of plastic goods and achieved net product turnover of INR 2,590 crores during the fourth quarter of the current year against sales of 111,238 metric tons of plastic goods and achieved net product turnover of INR 2,049 crores in the corresponding quarter of previous year, achieving volume and product value growth of about 16% and 23% respectively. The company sold 393,908 metric tons of plastic goods and achieved net product turnover of INR 7,625 crore during the year under review against sales of 409,109 metric tons and net product turnover of INR 6,177 crore in the previous year, resulting in volume degrowth of about 4% and product value growth of about 23% respectively. Total consolidated income and operating profit for the fourth quarter of the current year amounted to INR 2,566 crore and INR 461 crore as compared to INR 2,091 crore and INR 580 crore of the corresponding quarter of the previous year, recording increase in consolidated income about 23% and decrease in operating profit about 21%. The consolidated income and operating profit during the year under review amounted to INR 7,793 crores and INR 1,446 crores as compared to INR 6,372 crores and INR 1,430 crores for the previous year, recording increase in consolidated income and operating profits about 22% and 1% respectively. The consolidated profit before tax and profit after tax for the fourth quarter of the current year amounted to INR 409 crores and INR 324 crores as compared to INR 528 crores and INR 450 crores for the corresponding quarter of the previous year, resulting decrease in profit before tax and profit after tax about 23% and 28% respectively. The consolidated profit before tax and profit after tax during the year under review amounted to INR 1,232 crores and INR 968 crores as compared to INR 1,212 crores and INR 978 crores for the previous year, recording increase of about 2% in profit before tax and decrease of about 1% in profit after tax. The business scenario of all the product segments of the company for the year ended 31 March 2022 as compared to the previous year has been as under. Plastic Piping System business degrew by 7% in volume and grew by 23% in value terms. Packaging Products segment business degrew by 1% in volume and grew by 17% in value terms. Industrial Products segment business grew by 16% in volume and 35% in value terms. Consumer Products segment business degrew by 6% in volume and grew by 14% in value terms. The overall turnover of value-added products increased to INR 2,911 crores as compared to INR 2,480 crores in the previous year, achieving growth of 17%. The company has cash surplus funds of INR 518 crores as on 31st March 2022 as against cash surplus fund of INR 759 crores as on 31st March 2021. Considering optimistic business growth potential, the company has incurred CapEx of INR 259 crores during the year under review. The entire CapEx has been incurred towards ramping up the capacities in Plastic Piping System, introduction of new products in various business segments, automation and replacing some old production equipment with new technology machines. The company has also incurred CapEx for increasing captive generation capacity of solar energy, apart from balancing equipment at various locations. The entire CapEx has been funded through internal accruals only. The company has plans to commit CapEx of about INR 700 crores, including carry forward commitment of INR 280 crores at the beginning of the year. The committed proposed CapEx is primarily for to complete and put into operation the ongoing project work at Assam to manufacture PVC pipes and roto and blow molded products. Putting a plastic product complex near Cuttack in Odisha and near Erode in Tamil Nadu, where work is going on in full swing. First phase of both the sites likely to go into production by August, September 2022. To double the capacity of composite LPG cylinders to 1 million pieces per annum at existing site at Halol, Gujarat. Establishing additional capacity to manufacture polyolefin fittings and to put PEX piping system at Jharsuguda. Expanding capacities and product range of its bath fitting products at Puducherry. Adding varieties of new injection molded fitting products in its plastic piping products. To add new models of injection molded furniture, crates, and pallets in the company's range of furniture and material handling products. To increase capacities of industrial component molding at various locations in view of increased business opportunities. To add necessary equipment at its protective packaging and performance packaging division. To install rooftop solar energy generation plants in various locations. To install balancing equipment at various locations. The entire CapEx and increased working capital requirement shall be funded from internal accruals of the company. Business outlook. The year began on a gloomy note with the second wave of COVID, which affected the economy in general and the rural economy in particular in a very severe way. The first quarter of the year, which normally remains most business-friendly for the company, considering its product profile, witnessed quite a weak demand for most of the product segments of the company. Polymer prices also witnessed relentless upward march, which continued up to middle of November 2021. Subsequently, prices fell quite steeply, especially in PVC resin, which virtually destroyed the demand of plastic pipe systems, albeit temporarily. Even in such extreme adverse circumstances, company maintained a positive outlook for its growth plans. It persisted with its large investment plan with full confidence that business will be quite promising in the year 2022, 2023 and beyond. The company continues its objective to aggressively grow plastic pipe system business, where the company is a leader in the segment as it has the largest portfolio of products, which is being continuously expanded to offer more systems as required to the market it caters to. The government at the center and states have put the priority focus on Jal Jeevan Mission, Swachh Bharat Abhiyan, sanitation, affordable housing and many more such initiatives which all would boost demand for plastic piping products. The company is implementing ground field expansion, launching new application systems and continues to enlarge its product basket from three new manufacturing sites where work is going on in full swing. This will give required impetus to the division to grow faster and recapture the lost business opportunities due to pandemic in last two years. The business of cross-laminated film products was impacted the most due to one of its product, tarpaulin, being seasonal in nature with peak season between April to June. Business also got impacted by fierce competition from lookalike products as well as higher polymer prices, which could not be passed on to the product in appropriate manner. The thrust in the current year will be on promoting non-tarpaulin products, finding new applications, targeting new customers in existing markets and reaching new markets. Company expects the exports to grow further in the current year. Apart from increasing the sale of made-up products, the company has also expanded its capacity to 30,000 metric tons per annum. The company continues to remain a market leader in the premier range of plastic furniture. The company's furniture range is sold on various e-commerce portals and retailers who are being serviced through company's network of 1,306 channel partners. The company has launched its own portal for showcasing to its consumers its wide range of premium products and made it available for them from the comforts of their homes. With economy opening up, the company plans to launch varieties of new models during 2022, 2023, which will help in overall growth in the current year. In industrial component division, the year was marked by huge supply chain issues at all its customers due to shortage of imported material because of shipping and logistic issues, non-availability of containers, shortage of semiconductors, etc. This led to difficult scenario of high demand but no supply. Supply chain was also affected by rising commodity and fuel prices during the year. Business conditions have started improving and looking at positive demand scenario in various sectors of appliances like washing machines, air conditioners, coolers and refrigerators, segments where the company has good presence. The company invested in capacity expansion at various locations. This has started yielding results and will help the division going forward. In material handling division, company has shown good growth in essential commodities, retail industrial sector, fruits and vegetable segment, e-commerce, FMCG, fisheries, jumbo crates, AD segment, and injection and rotomolded pallets and dustbins. The company is highly focused to constantly improve its product quality and the timely delivery of products to its customers. The division has been able to add many new customers all over the country and will strive to continue enlarge its customer base. In composite LPG cylinder division, repeated orders from existing as well as new customers stood testimony to the excellent quality of the current product offering. The company has successfully participated and received letter of intent for supply of 735,186 numbers of 10 kg capacity composite LPG cylinders valuing about INR 170 crore from Indian Oil Corporation Limited, one of the leading government oil marketing company. The volume of business is large, which surpasses the existing installed capacity. The company has taken effective steps to install a new plant on a war footing in the same premises to double the capacity, and the same is likely to be operational by November 2022, which will enable the company to make around 1 million numbers per year. In protective packaging division, business conditions were good, and there was growth in all its application segments, its packaging, insulation and civil. It has also started doing good business in its consumer products, sports goods, yoga mats and kids puzzles and toys. Good growth is shown in export market as well. Buyers have reduced their dependency on China and exploring opportunities in India. The company expects good business for the division in the coming years. Performance packaging film, being part of intermediary to essential product category, has done well, particularly in dairy and oil industry. Continued efforts to develop new products will help the division grow better and add more value-added products in its fold. Exports have shown positive growth and received good response from countries in Middle East, Africa and Europe. Other markets are now being explored in parts of Europe and USA. With improved product mix and focus on increasing customer base, the company expects to achieve volume and value growth in this business in the current year. Most of the business segments are now showing improved demand prospects. The company continues with its investment plans vigorously. The company envisages good business growth opportunities in all its segments going forward as the impact of pandemic has ebbed and several initiatives are being taken by the government to put the country on higher growth path. This is brief and overall summary for the quarter and year ended under reference. Thank you for your patience. Now, I and my colleague, Mr. P.C. Somani and Mr. R.J. Saboo, are available to reply to your various queries raised by all of you. Thank you. Thank you. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and 1 on their touch-tone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Rahul Agarwal from InCred Capital. Please go ahead. Yeah. Thank you and good evening. Congratulations. You know, I'm very happy to see a great recovery from what we saw during October to December. Just one second, hold on, please. We are unable to hear you. Sir, if you can proceed with your question now. Yeah. Sorry, can I go ahead? Yes. Yes, sir. Thank you. Sir, congratulations and very happy to see a great recovery from what we saw during October to December. A few questions from my side. Firstly, on the gross margins, if I just look at the net revenue reported minus the, you know, cost of goods sold, which is basically the cost of raw materials, it looks like the number are weaker on a quarter-on-quarter basis. You know, it's gone down to almost 28%. Any specific reason? I mean, did we have some inventory losses here, that is why the gross margin has gone down or is purely because the mix? That's my first question. You are comparing with the last corresponding quarter, isn't it? No, I'm comparing with the sequential quarter, October to December 2021 to this, to the fourth quarter of April, you know, 2022. Yeah. Ultimately the price of raw material, which is volatile, is making the impact. Of course, the product mix continuously remains changing. Otherwise there is no reason. Okay, because the normalized levels, you know, generally are about 34-35%. Obviously PVC went up and hence we came down. Could you give some sense as in how should we look at this number going forward? Let's say next six months at least, you know, based on assuming that the PVC resin prices remains flat as where they are currently. The normalized level, I think if you look at the year as a whole, then you can see whatever we have received this year would be on an average the normalized level. Instead of a quarter level, you should just compare the things as the year as a whole. That's 31%, right? Yes. Okay. That should stay similar? Correct. Okay, got it. Secondly, sir, if you could just make us understand some color on how the demand side of, you know, the situation, both on the plumbing side as well as on the agriculture side? You know, could help us understand what is happening on the ground. Could you give some sense on what to expect over the next six months, purely from a demand angle? We believe the demand to be much higher compared to previous years. As I said, the various government schemes as well as the housing sector, that all will grow. There is a good prospect for growth in our piping division. And how- Apart from the new products which we'll be introducing and material available from different locations also will add to the growth of the business. Also demand scenario is quite positive. The year has just started, but since we are continuing our local expansion in the greenfield projects, so we have got optimism the overall scenario. Moreover, the PVC prices are showing a downward trend. The lower PVC prices definitely gives boost to the demand, so which will be healthy, and we expect prices to remain in the range bound, which will help the market to grow. With that, Rahul, I may add here, like, we are also, like, increasing our presence in more cities, and, like, we are also increasing the number of retailers, so this also should give an impact. Like, new products or new applications are also being developed. Like, there is a plan for introduction of about 280 products in the year going, in the current year. This will support the existing growth actually. Got it, sir. Basically we de-grew on volume for pipes about 7% this year. Obviously the base is very low. Would you put a, you know, hard guess here that we should be like upwards of 20% on volume purely because the base is distorted for fiscal 2023? Would you agree to that? Overall minimum, I think 15% volume. Minimum 15%. We are very conservative in our approach. We expect minimum 15% volume growth. That's for pipes, right, sir? Piping division as a company also as a whole. Okay. We expect good growth. I mean, minimum of 15%. Got it, sir. Lastly, could you throw some more color on the agriculture demand, what is really happening? Because, you know, last two seasons were very bad. I think we also get about, you know, 1/3 of our pipe business from agriculture. Anything on that, sir, please? That's my last question. Thank you. The demand is now good, because the demand basically November demand was very badly affected. Since then up to now demand is reasonable. We last year, April, May, June also, because of pandemic, things were not good. We expect agricultural demands to grow much better. Got it, sir. Thank you so much, and wish a very healthy recovery to Mr. M.P. Taparia as well. Thank you. I'll come back in the queue. Thank you. Thank you. The next question is from the line of Sumit Jain from ASK Investment Managers. Please go ahead. Sir, just wanted to check the competitive positioning. You typically give the number for the full year in terms of PVC consumption for the industry vis-à-vis Supreme. If you can give that number. No. In fact, the all-India data is still not available. May take some more time. Would you believe that you would have not de-grown more than the industry? PVC consumption. No, I don't think so. We have not. We'll have to check. We'll get back to you. Data are not ready yet, not available as yet. We'll get back to you. Similar data for CPVC? CPVC we have grown, the industry has also grown. Well, this is, well, not to be sure, the CPVC there has been a growth. Okay. Market share this year? The industry also has grown, but I don't have ready figures for CPVC. Sure. What is the current differential between PVC and CPVC pricing? Will be almost 35%-40%. CPVC is higher by PVC. If you can give the absolute prices for both currently? It should be INR 150. You see, ultimately it is a PVC piping system. It keeps on fluctuating. Pipe and fitting together. Right. The combination of systems would make a difference, but from the PVC, CPVC about 30-35% higher. Right. You're saying 150, and then 40% over that would be CPVC pricing currently. Yeah, the prices are so. I mean, what we talk on first April, price will be different. There is so much volatility and the trend, downward trend in the PVC prices and also CPVC. The CPVC availability was an issue, but now there is no issue. There is more availability from China. That's why more PVC is coming in the country from China. Chinese business is slow, so there is good availability of raw material. Earlier, PVC as well as CPVC, both availability was also an issue. Right. Because of logistics and overall shortages. Sure. You face certain issues which you had alluded to in the last quarterly con call in CPVC. Have they been sorted out in terms of supply chain? Yeah, it has been improved. Now we are getting improved supplies, and proper volume has been tied up for this financial year for CPVC. Sure. One more question. It actually affected last year because of non-availability of CPVC. Your suppliers are typically from, which place? Kaneka, Sekisui? Kaneka. We get from Kaneka. Sure. Thank you so much. Thank you. The next question is from the line of Mr. Achal Lohade from JM Financial. Please go ahead. Yeah. Good afternoon, sir. Thank you for the opportunity. My first question is, you know, in terms of the pricing, you said PVC availability has improved. There could be slight moderation, further moderation in PVC resin price. What I wanted to check, A, how is the channel inventory, and B, does that also mean there would be impact on the primary sales from the company to the dealer distributor? In our case, channel inventory does not remain a longer one. Yes, with the year-end and the prices being moderate, there could be some inventory with the channel, but not only fast-moving items. In general, you say, you can say channel inventory is very normalized. Since the prices have started softening, which will be made available to them also. I was just coming to the next question, sir. We saw a INR 6 reduction in the PVC resin price. Has it already been passed on to the channel or only part of that is passed on? The resin passed on to the channel, and prices should go down further, or for whatever indications are available. That will boost the demand with the lower prices. The new bookings, what you are getting, is showing that landed price will be much lower than what it is today, but the material will come maybe in July or thereafter. Overall, there is a softening attitude towards PVC prices. This is because of China, as you had mentioned. Because of China. Mainly because of China. Understood. Sir, if you could help us with the capacity as of March 2022 and the utilization for FY 2022 for each of the segment, please. For March 2022, the capacity is close to 725,000 metric tons. Okay. The breakup of that is Plastic Piping, about 525. Okay. Industrial Products, close to 80,000. Okay. Building Products, about INR 90 thousand. Consumer Products, about INR 30 thousand. Understood. Your utilization in terms of the likely capacity by March 2023 for each of the segments, sir? March 2023, you see our capacity which is right now only crystallizing into place. We should somewhere reach about close to 8,000. 800. 800,000. The major capacity usually is the plastic piping only. Okay. Understood. Just last- Five hundred- Yeah. Five hundred and twenty-five to five hundred and eighty-five, five hundred and ninety. Okay. Understood. Just last question, sir. In terms of the value-added products, the definition is basically 17% plus margins, right? Yes. EBITDA margin, yes. EBITDA margin 17%. If I look at FY21 fourth quarter, you know, we had a significant inventory gain. Part of the PVC products, pipe products also would have been classified as part of value-added products, right? Is that fair assumption? No. Principally, no. Because you see, ultimately AG pipes, in spite of the inventory gain, they will not go to the high availability. Certain category are, which are there, which are not classified as a value-added product. The AG pipes will not fall into that kind of system. Right. Okay. Just a clarification in terms of the agri mix, how much would that be for the fourth quarter or for the full year, sir? These are the basic, especially you can't really make it out which type is going for agri, which type going for plumbing. I know. Ballpark, like is it upwards of 30%? Is it less than 20%? Any number, ballpark number, if you could help us, sir. In terms of value, it could be around 28%-30%. Got it. Great, sir. Thank you so much. I will come back in the queue. Thank you. Thank you. The next question is from the line of Bhargav Buddhadev from Kotak. Please go ahead. Yeah, good afternoon, team, and congrats on a good volume recovery. My first question is, you alluded to the fact that the inventory situation, raw material availability situation is improving and also prices are likely to fall. What was the reason for this increase in inventory as on the balance sheet date we see almost INR 500 crore increase in inventory? Yeah. April to June is a peak season for most of our product, particularly the Silpaulin and the plastic piping. Right. We have to gear up for that seasonal demand. Okay. In anticipation of the strong demand, we built up on inventory. It's not just for safety reasons, right? Yeah, yeah. Okay. Understood. Secondly, would it be possible to share how has been the performance on volumes for the cross-laminated films and the CPVC business in the fourth quarter? We don't share those data now. Okay. Has there been a growth in CPVC or it's on? Yeah, I think Sakharer mentioned CPVC. We have grown definitely. Country has also grown. We also have grown. Okay. In terms of free cash flow generation, if you look at for the full year, it has been sort of fairly negligible, led by a rise in working capital. So the INR 700-odd crore CapEx, which we are planning to sort of incur in FY 2023, are we also looking at funding the same through internal accruals, or we'll resort to taking debt for this? Whole CapEx will be funded from internal accruals. This weak cash flow generation is only transient in nature, right? It will come back. Working capital which has been deployed now, one is the increased price of the polymers. Right. Right. One is the inventory for the peak season. It will not be a permanent deployment that way. Okay. Okay. It will get released in due course. Maybe by September we should see significant improvement in cash generation. In any case, our own generation will be sufficient to meet even the present requirement of the CapEx and working capital. Okay. Understood. And lastly, in the press release you mentioned increased focus on this non-tarpaulin product. Can you elaborate a bit on this? There are various made-up products for different applications. Whether a scooter cover or various product covers, those are the made-up products, what we call. For different applications, for different products we are developing, and there is good demand for those. Okay. Understood. Thank you very much and all the very best. Thank you. Thank you. The next question is from the line of Sonali from Jefferies. Please go ahead. Thank you for the opportunity. One clarification regarding CapEx. You are guiding for INR 700 crore in FY 2023, and most of that is towards expansion in piping. Is this correct? Piping as well as expansion in cylinder, as we mentioned also. There are various. The piping of course will be the major portion. Other than piping also on various other divisions, project works. This is the- What could be the number of the CapEx that we should look in FY 2024? I mean, considering that INR 700 crore is in FY 2023, are we likely to expand, you know, substantially in FY 2024 as well? For FY24, so not yet planned up that way. It is our three greenfield projects, the Assam, Odisha, and Erode, Tamil Nadu. There will be for the composite cylinder substantial sum of INR 50-60 crore for expansion of cylinder capacity, plus these 3 greenfield projects and the various other ongoing projects or brownfield expansion of various capacities, then adding new product range. Various molds in different divisions that is required. Protective packaging division also. Plus improving in terms of energy efficiency or solar energy. All told, the INR 700 crore includes all mixed CapEx. That will be piping. Piping system will take the maximum. Got it, sir. My second question is regarding CPVC. Now, in the past few quarters, we have seen very good growth in your CPVC segment. Could you share an update as to how was the growth this quarter? CPVC, we only can say we have grown. We have grown well. I can say that. Got it, sir. Lastly, would you be able to quantify the inventory loss that we could have incurred in piping system in Q4 because of the volatility in PVC? No. Quantification has become very difficult. Even when the prices are rising also you cannot pass on immediately. You see, last year whatever we have quantified first was just it was not the inventory loss or inventory gain for the change of prices, but we could realize additional gain because the low cost material was in hand. We already covered the material, imported material with low cost, which that's why that material could be used for production. But in running business it's very difficult to quantify because prices move every week. Got it, sir. In the running there is a gain, there is a loss. It's very difficult to quantify. Last year it was clear-cut, inventory gain. That's how the additional, which was shared earlier also of around INR 180 crore or INR 200 crore. Yeah. Which company gained because of inventory? Prices remain one way. Last year after August, the price remained one way only. This year it is all across, sir. Got it, sir. From first of April, what is the cumulative decline in PVC? INR 6. Okay. Got it, sir. Yeah. That's it from my side. Thank you. The next question is from the line of Abhishek Ghosh from DSP Mutual Fund. Please go ahead. Hi, sir. Thanks for the opportunity. Just wanted to understand the recovery in the pipe volumes that you have seen in fourth quarter, is it largely to do with agri coming back, which has been absent for some time, or is it like Nal Se Jal, those kind of mission kind of coming out? Some color. This will be helpful, sir. Yeah. I can only say that in the month of March we have the highest dispatches in overall PVC piping system. Would like to avoid giving breakup. Okay. The highest ever dispatches is I can share for the month of March. Okay. We have very robust demand and good growth in all the piping segment, whether it is CPVC, whether it is agri, whether it is plumbing or all types of products in the piping division. Got that. Sir, even with the typically we see when the PVC prices kind of correct, you see channel destocking happening. That is something you're not seeing in the month of April, and similar momentum is gonna continue. Sorry. Sorry, can you repeat, please? In the month of April, we have seen about a INR 6 per kg kind of a price drop in PVC. Yeah. Typically there's a tendency for the channel to kind of destock, right, when in an anticipation of lower PVC prices. That is something that you're not seeing. I'm seeing the demand momentum continues to be robust in April as well, is what I was trying to understand. Yeah. Demand is reasonably good in the month of April also. Going forward, there's not much inventory in the channel, so there should be continuous buying in the system. Got that. Lower prices certainly will increase the demand. See, going in this there could be certain losses, but that is, that gets covered. This is a part of the business. At the present, yes, the raw material prices, especially for PVC, would be low. Got it. Offers what you are getting for imports. This is lower offer. The other thing is in the composite LPG cylinder part of the business, what will be the total overall capital employed and what can be the peak revenues out of that in maybe whenever you complete this expansion? You see the expansion which we mentioned about INR 55 crore-INR 60 crore another CapEx and the capacity will be doubled. Once the full capacity is in place, that it could be a revenue about INR 200-INR 250 crores per annum. Oh, got it. Sir, the other thing is in the packaging segment, if we look at it, while your margins have kind of come back on a sequential basis, it's kinda swiftly recovered, but there seems to be an element of lower growth. Is it because you took the price hikes and you could pass it on because of the increase in polymer prices, you had to face competition? Some color there will be helpful in the packaging part of the business. Well, in packaging the prices, passing on of the prices takes some time. As you said that, you know, volume degrowth that affected. Overall margins were lower, but you certainly pass on the prices, but the lag is little longer this time. For different products it is, different, but ultimately prices do get passed on. Okay. Is that, you know, the endeavor is to get into those non-tarpaulin part of the segment to be able to cater to since the price points have become a lot higher, you also want to have products at lower price points to be able to tackle competition or offset the impact of competition. Is that the thought process? No, Tarpaulin, certainly we would be there for those who want good quality product. Because there are so many new entrants and like that. By and large, nobody's quality matches to our quality. Because of the lower price, that's the resistance. We can compete to a certain extent, but otherwise stay away from the participation for these low price products and try to develop more products which gives the proper value addition. Got it. Sir, just one last clarification. You've mentioned the CapEx of almost about 259-odd crore, but when I glanced through your cash flow statement, the purchase of property, plant and equipment, it's close to INR 469 crore. Yes. What's the You see, look at the balance sheet, which I think you have not gone through it, but INR 258 crore is the actual addition which has gone into production or which has been capitalized. There's a CWIP of INR 156 crore as on thirty-first March 2022. There's a capital commitment orders already made of INR 280 crore. Even for those orders you have to make the payment, certain part of the payment in advance. Oh. Last set of capital goods which were there, about INR 127 crore, they have been paid off, and we have very nominal, because it's around INR 34-40 crore of the creditors now. Got it. The whole CapEx measure is output towards these capital goods. Sir, just to understand, the total INR 700 crore that you have mentioned is the CapEx for FY 2023 broadly. Including the INR 280 crore rupees which is carry over this year. Yes. I'm saying total cash outflow will be lesser, is my limited point. Yeah. Obviously. It's broadly INR 1,000 crore over the last two years. FY 2022 and 2023 combined will be total cash outflow, INR 1,000 crore. Yeah, that's right. Okay. Got that. Thank you so much, sir, and wish you all the best. Thank you so much. Thank you. I request all the participants to restrict their questions to two per participant. We'll move on to the next participant. We have a question from the line of Sneha Talreja from Edelweiss Securities. Please go ahead. Good evening, sir, and thanks a lot for the opportunity. Just one question from my end, from the plastic pipe business firstly. Last quarter also we had some amount of inventory losses. This quarter also you contributed. There are some inventory losses. What could be the incremental reason because of which we have seen quarter-on-quarter margins declining for this segment? Is it more of agri volumes or would you like to highlight that the concept of inventory losses in this particular quarter would be higher? No, there won't be any inventory losses during this quarter as such. The reason of lower margin is there is because the product mix. In October, December, the business was very weak for plastic piping. We have lost the volume, lot of volume in that quarter. When the volume has recovered, so definitely volume recovery is there with the agri pipe section. Despite all the CPVC sales this quarter coming up, agri pipe sales being higher has led to, you know, margin fall? Yes. Yes. You are right. That's the product mix change. Got it, sir. Secondly, I just wanted to check on the packaging segment. There too again, you know, you are mentioning that you would be now focusing on the non-tarpaulin based business. If we understand, the tarpaulin based business was the premium segment where the margins used to be upwards of, you know, more than 20 odd%. With non-tarpaulin business now being the focus or where, you know, you launch product, what could be the margin trajectory of the business in the coming years? And any outlook on the volumes in this particular segment, how could we see the volume shaping up? Volume is very low compared to tarpaulin product business, so it's only a direction which we are studying. Yeah, apart from tarpaulin, now we'll be focusing on the non-tarpaulin. To avoid the fierce competition or to have some less dependence on the tarpaulin itself. Because going forward still tarpaulin will be a major business in this, that segment. Got it. The trajectory of the margins of newer businesses would be lower than tarpaulin. Is the understanding correct there? Better than tarpaulin. It will be far better than tarpaulin. It will be better. Okay. Understood, sir. Thanks a lot, sir, and all the very best. Thank you. The next question is from the line of Shailesh S from BNK Securities. Please go ahead. Yeah, thanks for the opportunity, sir. Sir, my questions are pertaining to Supreme Petrochem. Shall I go ahead? Yes. Sir, what will be the contribution of Russia in global polystyrene market supplies, and what is the Russian polystyrene exposed to global markets? Can you give us some color? Also, do you expect, given the market tightening, this PS and the SM spread to remain at this elevated level, sir, for near to medium term? Well, see, about the Russian thing, I may not be able to tell you, but overall, Supreme Petrochem was the best performance last year. The volume growth in overall volume was 16.7%. Plants have also run with full capacity. Overall margins are also good. Company made the highest ever EBITDA, and on top of it, company also reduced the capital. I mean, they are the main highlights of Supreme Petrochem. That 10 INR share, 6 INR shares were returned. 6 INR per share were returned to the shareholders. The equity capital reduced now to INR 37.6 crores of Supreme Petrochem. Any idea of Russia impact? Russia impact, I said I will not be able to. The Indian market is doing well. See, appliances are doing very well, especially the air conditioners, and there are good volume growth planned by various AC companies because of this PLI scheme which government has started. All the air conditioner people have got registration in that. Supreme Petrochem expects good business growth from refrigerator business. Otherwise also, because of the high logistic cost, the imported materials were not cheaper. Supreme and Supreme Petrochem material was always in demand. In fact, demand was more than the supply which could be catered to by the company. Okay. That was useful, sir. In tonnage terms, we are almost doubling the capacity, including the ABS. By when do you think we can reach the full utilization level, sir, and what are all the key drivers? Also, sir, today the exports is zero. How much you are targeting in next 2-3 years? Exports are very good demand. Exports will be there because domestic demand was more. In the first quarter when domestic demand was less last year, that's why exports were better. Because the domestic demand was very robust and companies started getting materials for the local consumption. The company is expanding the capacity in all their different products. The company has total CapEx plan of INR 1,270 crores starting from last year for next three years till 2025. Company is planning to come into mass ABS of 1.4 lakh tons, and polystyrene capacity also, effective capacity will be increased to 3 lakh tons. This is the overall growth plans of Supreme Petrochem. Okay. One last question, sir. Can you please share full year product-wise volumes, sir, for GPPS, EPS, XPS and SMMA in FY22 full year? That will not. We will not share. They are classified information, and to be honest, that is not really available at present with me. Okay, sir. Thank you, sir. That was very helpful. Thanks. Thank you. The next question is from the line of Chirag Lodaya from ValueQuest. Please go ahead. Yeah, congratulations on good uptake in overall volumes. My first question was on margins. What should be the sustainable margins in plastic pipe division? Last year there was one-off gain, and we recorded 20% kind of EBIT margin. Now, going ahead, what one should expect? Yeah. With the present prices, you see, polymer prices play a role in the margins. Assuming the present prices remain the same level where they are, then about 15%-15.5% should be the operating margin. Prices are already at elevated levels that way. Right. Sir, my second question was on overall volume decline. Last year you saw around 7% volume decline. If you can help us understand, is it more to do with Agri demand being weak or non-Agri also seeing similar kind of decline? Principally due to Agri. Okay. April to June first quarter last year was a washout from agri point of view. November also. November. for Agri. Okay. Is it fair to assume if we exclude Agri then we would have grown overall? Yes. How are the demand trends for Agri, sir, this year? Do we expect to recover pre-COVID volumes of Agri or it is still far-fetched? No, we'll definitely recover. We will recover. Sir, 15% kind of volume growth guidance which you have given, it's just 5% above pre-COVID level. Number doesn't add up. I mean, because on one side non-Agri is doing good, you know, volumes are going up. In Agri, if you are able to recover pre-COVID also, your volume growth should be much, much higher than what you would have achieved in, say, FY 2019, FY 2020. FY 2020 we have achieved 300,000. FY 2019, 2020. Correct. We have achieved 300,000 metric ton plastic pipe. This year we have achieved 274,000. Correct. Sir, 15% growth is just INR 3.15 lakh. If I compare with FY 2020, then it is just looking 5% higher. Yes. Let us achieve, because there is a minimum 50%. What we have given is a minimum we expect. Besides, there is a product mix change also, no? By this time we'll have that tank business also which is going to be growing on a bigger scale. It's a mix of the products also which is. Right. These higher prices you are seeing now, agri demand coming up, so that is the key thing I just wanted to better understand. It's just beginning of the year. Let's see how the quarter goes. When we talk in July we'll be better placed. Oh, okay, sir. Okay. Thank you and all the best. Thank you. The next question is from the line of participant. We will close the call at five o'clock. Reminder to participants to restrict their questions to two per participant. The next question is from the line of Naitik Mohata from Sequent Investments. Please go ahead. Yeah, thank you and a very good afternoon. Just a couple of questions on my side toward the cylinder business. What is the kind of traction that we are seeing for the cylinder business? Are there any new tenders that are getting issued by OMCs or gas companies, or have you applied for any? Just a light on that. Sorry. Traction on cylinder business. Cylinder. Sorry, can you repeat your question, please? Yeah, I would just like, can you just throw a light on traction on the LPG cylinder business? Well, the cylinder business, as informed to you, Indian Oil Corporation has decided to launch, or they have already launched, composite cylinders, and they have sent. They are being sent all over India. They have made a soft launch, but they will, once the reasonable volume reaches at all the places, then they will start campaigning, and they are very committed for using this. I would say the other companies are watching the performance of this, and my gut feel is that other companies also will have to come in composite cylinders. It's a question of time when they come, and that's why we are expanding our capacities. Even to meet IOC requirement alone, whatever they have projected, we need to have capacity for this. Okay. Thank you. What are the kind of EBITDA margins that we see from this project? It is a value-added product. Somewhere around 15%? It will be over and above 17%. That is our definition of value-added product. Okay. Can this business, in future turn from B2B towards B2C as well? No, no, it cannot come to B. Our customer have to be gas marketing people, especially for domestic use. You cannot sell to anybody. We don't have a gas bottling plant. We don't fill the gas. It's just a container for filling of the gas. So there are private bottlers also. They should also come. Some very, I would say, few bottlers have started with small quantities, private bottlers in India. Mainly the oil marketing companies, there are three government companies, IOC, HPCL and BPCL. Out of these three, IOC enjoys 50% capacity, and other two have 25% each of the total household domestic, for domestic use LPG. Okay. Thank you. That was very helpful. Yeah. Thank you. The next question is from the line of Hemang Kotadia from Anvil. Please go ahead. Hello. Yes, please. Yeah, yeah. Yeah, congratulations on the volume recovery. I just wanted to know in absolute terms, operating profit per plastic piping. That is around 30 INR per kg. How do you see that number? Suppose PVC price will remain at around this level. What will the number look like for FY 2023? Because percentage margin is not actually a proper way to assess the company actually. Just wanted to shed some light on the operating profit per kg or PBIT per kg for PVC piping. Yeah, it depends upon the product mix. I think the same question was asked earlier also, and what we have given guidance, the overall number for the year, which is INR 30-31 per kg, that should be maintained and it can be improved depend upon the change in product mix. Okay. Thank you, sir. Thank you. Due to time constraint, this was the last question. I now hand over to the management for closing comments. Thanks. Thank you, everyone. Thank you very much. For your patience. For your intelligent questions. Well, wish everyone that this current year is good for all of us. All this pandemic should be behind and geopolitical situation hopefully should come to an end, the confusion of war should come to an end, so that Indian business should be on good growth path. With the present dynamic leadership, we are very optimistic for good growth for Indian business and including for our both companies. Thank you. Thank you. Thank you very much. On behalf of DAM Capital Advisors Limited, we conclude this conference. Thank you for joining us, and you may now disconnect your lines.