Ladies and gentlemen, good day and welcome to the Supreme Industries Q1 FY 2023 earnings conference call hosted by DAM Capital. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Aasim Bharde from DAM Capital. Thank you, and over to you, sir. Hey, thanks, Farzan. Good evening and thanks to everyone who have logged into Supreme Industries Q1 results conference call. Today we have the senior leadership of the company present to take us through the results and post which we will have a Q&A session. I would now turn the call to Mr. Taparia for his opening remark. Thank you, and over to you, sir. Thaank you very much, Bharde. Aasim Bharde. Bharde, huh? Aasim. Thank you very much, Mr. Aasim Bharde. I am M.P. Taparia, Managing Director of The Supreme Industries Limited. I, along with my colleagues, Sri P.C. Somani, CFO, and Sri R.J. Saboo, Vice President, Corporate Affairs and Company Secretary, welcome all the participants who are participating in the discussion of the unaudited stand-alone and consolidated financial results for the first quarter ended 30 June 2022. The stand-alone results and the consolidated results are already with you. I'll be brief on company product operating performance and other highlights. The company sold 1 08,922 tons of plastic goods and achieved net product turnover of INR 2,169 crore during the first quarter of the current year against sale of 71,264 tons and net product turnover of INR 1,310 crore in the corresponding quarter of previous year, achieving volume and product value growth of about 53% and 66% respectively. The high volume growth was mainly due to lower base of previous year when business was barely affected due to COVID second wave effect. Total consolidated income and operating profit for the first quarter of the current year amounted to INR 2,211 crore and INR 327 crore as compared to INR 1,346 crore and INR 267 crore for the corresponding quarter of the previous year, recording increase of 64% and 22% respectively. The consolidated profit before tax and profit after tax for the first quarter of the current year amounted to INR 268 crore and INR 214 crore as compared to INR 213 crore and INR 170 crore for the corresponding quarter of the previous year, recording increase of 26%. The business scenario of all the product segments of the company for the quarter ended 30th June 2022, as compared to the corresponding quarter of the previous year, has been as under. Plastic Piping System business grew 65% in volume and 76% in value terms. Packaging Products segment business grew by 12% in volume and 34% in value terms. Industrial Products segment business grew by 36% in volume and Consumer Products segment business grew by 70%. Sorry to interrupt you, sir. This is the operator. Sorry to interrupt you, sir. This is the operator. The audio is breaking from your line. Hello? Yes, sir. Now it is. Can you hear now? Now it is better. Yes. Thank you. Should I repeat again? Yes, sir. Industrial Products segment business grew by 36% in volume and 52% in value terms. Consumer Products segment business grew by 77% in volume and 98% in value terms. The overall turnover of value-added products increased to INR 761 crore during the current quarter as compared to INR 516 crore in the corresponding period of previous year, achieving growth of 47%. The company has cash surplus of INR 533 crore as on 30th June 2022 as against cash surplus of INR 518 crore as on 31st March 2022. Business outlook. The company continued its objective to aggressively grow Plastic Piping System business. The company implementing greenfield expansion, launching new applications and systems and continuing to enlarge its product basket along with brownfield expansion in its existing plants. New unit in Guwahati in Assam has commenced commercial production, and unit at Cuttack & Erode are likely to go in production by September, October 2022. The company has augmented its offering in Plumbing System by introducing PEX plain pipe and PEX composite pipe, which are ideal pipe system to carry hot water. All these initiatives will give required impetus to the division to grow faster and seize the growing business opportunities. The company's olefin Fittings and Electro-fusion fittings have received positive response in Nal Se Jal scheme, which government has committed to implement throughout the country by the year 2024. The business of Cross-Laminated Film product is getting impacted by fierce competition from lookalike products. The thrust in the current year will be in promoting non-tarpaulin application, targeting new customers in existing markets, and making breakthrough in export market where company is still yet to penetrate. The company plans to launch variety of new model and remain focused in the premium range of plastic furniture, which will help in overall growth in this business segment. In Industrial Components division, business conditions are showing signs of gradual improvement. Company expect positive demand scenario in sectors of appliance like washing machine, air conditioner, cooler, refrigerator segment, where it has good presence. Material Handling division has been able to add many new customers all over the country, and we strive to continue enlarge its customer base and product portfolio. In composite LPG cylinder division, LPG orders from existing as well as new customers are encouraging. Supplies against the letter of intent from Indian Oil Corporation have commenced, and existing capacity is running at full capacity. Work on doubling the capacity is progressing smoothly and likely to be operational by November 2022. In Protective Packaging division, business conditions are improving. It has started doing good business in its consumer product, sports goods, yoga mats, pet bed, and toys. Good growth is shown in export market as well. The company expects good business for the division and continue to develop various customized solutions for the user industry. Performance Packaging Film has done well. Exports have also grown and received good response from countries in Middle East, Africa, and Europe. With improved product mix and focus on increasing customer base, the company will soon have all its capacity fully tied up and will look for expansion opportunities. The company remains optimistic in various business segments where it operates. The company's enhanced investment CapEx plan for the year June 2020 to 2023 of about INR 700 crore, including carry-forward commitment of INR 382 crore, is progressing smoothly and shall be funded entirely from internal accrual. The prices of different polymers, particularly polypropylene, low-density polyethylene, and polyvinyl chloride, that is PVC, have gone down between INR 19 per kilo to INR 46 per kilo since beginning of the year till now. That is a reduction between 13%-32%. Your company is large consumer of PVC resin, which has witnessed the sharpest fall since April 2022. This sharp reduction will result in inventory losses, as this price fall will boost demand of company product. Company expects business condition to improve from September 2022 onward and will lead to higher volume growth in Plastic Piping business in the remaining period of the year. This is a brief and overall summary for the quarter and year ended under reference. Thank you for your presence. Now, I and my colleague, Sri P.C. Somani and Sri R.J. Saboo, are available to reply the various queries raised by all of you. 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 touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Reminder to the participants, anyone who wishes to ask a question may press star and one at this time. The first question is from the line of Sujit Jain from ASK Investment Managers. Please go ahead. Since few questions on the industry size in FY 2022, as you can map it, and your market share, as you see. Your take on the differential between the PVC and CPVC, because CPVC has not dropped. Would that impact the demand of CPVC? No, CPVC is used for mostly plumbing application. For plumbing application, as people require a water line which can carry hot water, that is a very different market. It doesn't have much impact on demand. CPVC demand is well-maintained. Even PVC demand has grown very nicely. In the whole country, the demand in the first quarter has gone up by 27% in volume. Our company, the demand has grown up by 55% by volume. Because we are catering to big segment in agricultural market. Last year, due to COVID, in the month of April and May, the agriculture demand got a big beating. This year, agriculture demand was quite okay. In FY 2022, what would be the industry size and your estimated market share? I told you, the industry overall. FY 2022. FY 2022 was degrowth. The country degrowth, our company also is degrowth. In terms of value, what that market would be in FY 2022 and your market share roughly overall in pipes? I don't recall. Immediately you got me. Overall, Plastic Piping market is around INR 40,000 crore. In last two years, there was tremendous fluctuation in prices. It started going up from INR 70 a kilo to INR 160 per kilo. Now, it has come down to INR 94 a kilo. We can talk in this very volatile time more about the quantities. What is your estimated market share now in the industry? My market share? Market share in terms of volume, if you talk? Yeah, in terms of volume. Yeah, the organized sector will be roughly around 15%. Okay. In terms of the new products that you mentioned, the contribution to sales as you see going forward? Okay. Share of new product. No, share of new product. What we are launching this year, that is, we are launching this year only. Earlier years, I don't have immediate reply to give you, but definitely I'll, I can only say that whatever new product we launch in last four or five years, all the product have proved big success. Sure. One last question is on your interview to one of the channels, post the results, you spoke about 15% volume growth. That volume growth you're seeing for pipes or overall plastics? I mean, overall company. For pipes, what is your estimate of growth for FY 2023? Pipe overall will be higher. Okay. Sure. Thank you. Thank you. The next question is from the line of Rahul Agarwal from InCred Capital. Please go ahead. Yeah. Hi, sir. Good evening. Mm-hmm. Just to carry forward the previous participant's question, if I look at what the company sold during April to June 2019, which is, you know, I'm taking you back three years, pre-COVID. On a three-year CAGR basis, we are still lower than what volume we did that point of time. I think, you know, some reference to the media interview you're talking about. Overall, I just need some help to understand fiscal 2023 volume growth. Pipes should be higher than 15% and overall company should be about 15% YoY. Is that the understanding correct? No, I say 15% volume growth of the company as a whole and pipe will be higher than 15%. Fiscal 2023. I'm targeting 2022, 2023, the current year. Okay, sir. Got it. Any guidance you would like to give on the EBITDA per ton? Because, you know, my sense is you did about INR 25 a kg this quarter, which obviously has some kind of inventory loss built in here. Could we model, like, INR 20 a kg, what we did in fiscal 2020? I mean, that's the pricing, you know, currently happening. Is that correct? There will be inventory loss in the current quarter also. After 23rd June up to today, the PVC prices have dropped again by INR 20 a kilo. When we said overall price have dropped by INR 46 kilo, that is starting from 1st April up to Saturday. That INR 20 drop has happened between 23rd June to Saturday. There will be inventory loss. There will be more inventory loss in the month of July and August. We believe that now the price is, PVC is close to bottom. Coming from September onward, the prices may moderately improve also. Anyway, the demand season also starts. September to March 2023, we expect better business. Got it, sir. Any guidance on EBITDA per kg for the year 2020-2023? EBITDA for the company as such, what I can tell you. EBITDA per kg, we don't. EBITDA per kg we don't take. No problem, sir. For company, what is the guidance? Company, we've given guidance around 15%. Operating margin. Operating profit margin first quarter was 12.24%. For the full year, we anticipate 15% operating margin. Got it, sir. Sir, last question on agri and non-agri sales. Could you help me with the mix, like in terms of piping, how much is agri pipe mix for this quarter? You know, the demand was, you said it was better than last year, obviously. Overall, did we have destocking issues and do you think this should turn around going into the next season? I mean, obviously that starts fourth quarter of 2023. I can say during the month of April, June, the demand for agri market was quite robust. As we told earlier also, the whatever agri pipe we sell, they necessarily don't go to farming area. Many areas for housing also people use agri pipe instead of SWR pipe. Overall percentage we cannot cannot say, but we can say demand side, though it was a high price compared to two year before, the demand for agriculture, agricultural pipe was robust. Okay, sir. Thank you so much. Which resulted into 65% volume growth in this quarter in Plastic Pipe. Got it, sir. Thank you so much. I'll come back in with you. Thank you. The next question is from the line of Achal Lohade from JM Financial. Please go ahead. Yeah. Good evening, sir. Thank you for the opportunity. Sir, just a clarification. You mentioned, you know, 15% volume growth for the company, for Plastic Pipes even higher. Now, if I do a rough math, what you have done in first quarter, this year, it implies a 21% volume growth in rest of the nine months YoY. When you are saying the agri wasn't impacted in fourth quarter and first quarter, how do we assess it, sir? Do Do you think the plumbing growth will be so strong or agri growth will drive this kind of a growth? No. In the current year, the growth was uniform. The growth was nice in agriculture, growth was okay in housing, growth was okay in infrastructure. All the three segments have shown positive growth in this quarter. That is on YoY basis, I presume, sir, right? YoY also, for the full year we anticipate good growth in all the three segments. Got it. Sir, if you could give some indication as to what was the inventory loss in first quarter. Would that be a specific? We will be able to reply you properly in the month of October. We still will suffer inventory loss in this quarter. There was some inventory loss in first quarter. Have I got that understanding right? Yeah, 100% you are right. When the prices are dropping, there's no way not to make loss. That's why you see our margin overall is dropped to 12.24% in first quarter. In spite of 12.24% loss margin in the first quarter, we maintain an operating margin of 15%. Understood. Is it possible to give some clarity on the CPVC demand in terms of how was the volume growth for us? What would be our market share? A broad sense would be of great help, sir. CPVC demand is quite robust. We have increased our market share. We have grown double-digit, and we anticipate to grow double-digit in remaining three quarters. Possible to quantify the market share? Would we be like 20% of the organized market? Well, maybe classified information, but it is more than 20%. Understood. If I may ask on the industry side, what is the aggregate volume for FY 2022 for Plastic Pipes and fittings? It was what? 25%. 27%. First quarter. No, sir, FY 2022. What was the volume in terms of? Would that be 2.5 million tons? Would that be [crosstalk]. Correct. If you could help us with the numbers, sir, would you have that by any chance? FY 2022. There was degrowth and it is misleading. The total sale was 674,000 tons, which was, even in 2021, it was only 89,000 tons. If you compare with year 2019-2020, the first quarter the sale was 900,000 tons, and last year it was 674,000 tons. Compared to 2019-2020, the degrowth was around 25%. Compared to 2019-2020. 2021 was a disaster, which we recall, on 25th March the country was closed. In the year 2021, April, May, June, the plants were all closed, so demand was very weak. Am I clear? I understand that, sir. Thank you so much for your info. Okay. Thank you. The next question is from the line of Kunal Lakhan from CLSA. Please go ahead. Hi, good evening. Sir, on the margin guidance side, you said that in the Q2, you are expecting further inventory losses because in the month of July alone, the PVC prices have dropped like 17% odd. At the same time, you're maintaining 15% guidance for FY 2023. Second half, you're building in, like, you know, margins of upwards of 17% and 18%. Just wanted to understand what will be the drivers of these margins. Are you expecting PVC prices to bounce back to INR 130-INR 140 levels or what are going to be the drivers? We are not only in PVC pipe business, dear friend. We are in eight segments of business. This is seasonal period of all those segments, and the polymer prices have not only fallen in PVC, they have fallen in PP, and they have fallen in polythene. They have fallen in polystyrene. In certain products we'll be able to improve our operating margin. This is a business optimism, what your business forecast we are making you for not only Plastic Piping business. It is forecast we made for the company. No, I get it, but your Plastic Piping products, I know, contribute the bulk of your top line and EBITDA. Agreed, but the 12.25% is too low. Sure. Secondly, just wanted to understand, you know, on the volume growth side also, on the 15% volume growth, you expect agri, housing, and industrials to continue to grow in the rest of the year as well. I mean, just wanted to understand what is the cause of this optimism because we've seen subdued growth in the last three, four years. So this sudden pickup in the optimism, just wanted to understand what is the sentiment on ground. Now the COVID is behind. I don't think COVID is that much lethal. The CapEx cycle is started. Exports are better. The monsoon is better. The food grain sowing is going in a big way. We anticipate that the inflation is now peaked out. Inflation is only going to come down going forward. There's no reason to be pessimistic for anything. Economy is in fine shape. We believe. Sure. Economy is in fine shape, so demand will be better from all segments. Sure. Sure. Thank you so much, and all the best. Thank you. The next question is from the line of Bhargav Buddhadev from Kotak Mutual Fund. Please go ahead. Yeah, good afternoon, sir, and thank you for the opportunity. Sir, my first question is on the Cross-Laminated Film business. Is it possible to quantify how has this business done, and what are we doing to get our margins back on track? We will be getting our margin back by increasing business of value-added product and by increasing business in export market. We are glad to share with you that we are added three more countries in this year first quarter. We are putting more resources to reach more countries in the world market. Today, the company is reaching in 28 countries in the world. Even in Latin America, our goods are going. Europe, we are exporting. So many countries we are exporting. We want to increase more and more share of business coming from export market. Export we sell mostly non-tarpaulin product, where we get better margin. It's very labor-intensive product, a specialized product for special segments. We are seeing every month improved business in those segments. Our mattress business is also growing very nicely, and we are increasing the range of mattress business. We're told that lookalike product, it is difficult, is causing competition, but we are hearing many failure reports of lookalike product. We are even more optimistic of our Cross-Laminated Film business going forward. Sir, how big would be the exports now for us in this product? What kind of margins would we be making in the export business? Volume we can talk only when we close the year, but it is definitely far better than last year. Sir, on export revenue, any quantification this quarter? How has been the exports? What is the amount of exports? Revenue, we can check and inform. I don't have the number immediately with me, that, what is the value of export, what we made. Okay. Sorry, I don't have immediately with me. Volume we sold, and we are getting better price. Sure. Secondly, in terms of the Pipe business, how is the channel inventory? Would it be fair to say it's at all-time low levels? In fact, it is very, very low levels. I More getting very good. Sorry to interrupt you, sir. The audio, there's a disturbance coming. Many times we get this query from 20% of low inventory. Sorry to interrupt you, sir. The line is not clear from your line. Please check. I don't know. I am with my phone on speaker. Now can you hear me? No, sir, we cannot hear your audio. I don't know. We are able to speak very, very clearly. Yeah, now it is better, sir. Thank you. Now better? Yes, sir. Yes, sir. We can hear you. Yeah, please. Yes, sir. If you can comment on the channel inventory. Channel inventory in Piping is quite low. With continuous prices falling, they are very scared. I think they are completely hand-to-mouth on many items they have stock out. When the trend changes, they'll get tremendous surge of orders with our Piping company. By that time, we'll be starting the three new locations. What we started as two locations will start in September, October. With more volume available and we can service customers further better. Sir, my last question is, how are the margins in your composite cylinder business when we get to full utilization? The composite cylinder made very good money last month when we are running the plant fully. By November this year we will be reaching capacity of 1 million pieces per year. That should improve margin further, starting from January, February, March. December, January, February, March, we expect margin to further improve. Is this a value-added product for us? Yes. It is value-added product. Okay, sir. Thank you very much and all the very best. Thank you. The next question is from the line of Shailesh Raja from B&K Securities. Please go ahead. Yeah, thanks for the opportunity, sir. My questions are pertaining to Supreme Petrochem. Sir, Russia's polystyrene capacity production in FY 2020 was closer to 5.5 lakh tons. Due to the EU and U.S. sanctions against Russia, what is the expected export opportunity for Supreme Petrochem? With the widening demand-supply, how fast we can ramp up the new polystyrene and EPS capacity, sir, which is going to commission from September month? That new plant of 80,000 tons will be in operation from September. 1.5 m onths from today. Up to June, we were not able to meet the domestic demand. Okay. July is slow season, so demand definitely we started now exporting back. We may be exporting 4,000-5,000 tons monthly. We are already present in more than 100 countries. Mm-hmm. Are pretty well accepted, and we are enjoying good demand in export market. Okay. How fast we can pull this capacity, sir, new capacity? New capacity may not be able to sell completely domestically. Whatever we cannot sell domestically, we'll put in export market. Sir, we can fill in two years, sir? Sorry? We can fill the capacity in two years? We should not take two years. Depends how the economy moves on the consumer appliance side. Our majority goods go to consumer appliance. Okay, sir. With inflation getting peaked out, with good monsoon, we believe the demand should be better from the festival season. We start from September. Okay, sir. My second question is, due to this, global demand supply mismatch, is it possible for Supreme Petrochem to have mix of both, fixed pricing contract and spot contract with customers so as to reduce the volatility in the business, sir? We are very alert how to procure our raw material. Mm-hmm. With the complete track of the global situation, we are very large customer to buy our raw material. We get the best possible terms. Okay. Sir, last year you did sales volume of 2.73 lakh. What was the volume in 1Q and what's the expected volume growth this year, sir, FY 2023? Sorry, okay. In the first quarter. Yes, sir. We sold polystyrene. What the overall volume may be. Not the immediate number with me. As I told you, we sold out the plant fully. Okay, sir. Just, one last question, sir. Sir, can you share how is the current spread, for the company? Overall, in first quarter we sold 70,480 tons. Okay. Overall, we sold 70,480 tons. All the polystyrene and especially polystyrene compound and expanded polystyrene combined, we sold 70,500 tons. Okay. This is including XPS, sir? Including SPC and including EPS. Okay. One last question. How is the current spread, sir, for the company? Current? Spread. Hello? Yeah, current spread, sir. I'm not clear what you are asking. Current what? Current spread, styrene monomer and polystyrene spread. Current spread, styrene price went down little bit, so we also dropped price of polystyrene. Okay. All the polymer prices are dropping. The polystyrene one is a polymer only. Yeah. The prices are dropping and styrene monomer price also dropping. Okay, sir. Thank you, sir. Thank you. The next question is from the line of Sneha Talreja from Edelweiss Securities. Please go ahead. Hello? Line for current participant has got disconnected. We'll move on to the next question. Please. From the line of Rajesh Kumar Ravi from HDFC Securities. Please go ahead. Hello. The current participant has left the question queue. We'll move on to the next question from the line of Ritesh Shah from Investec. Hi, sir. Thanks for the opportunity. Couple of questions. One is. Where do we source our PVC and CPVC resins from, and what is the sort of inventory days that we usually maintain? That's the first question. The PVC we source from local producer, that is Reliance Industries and MPlast. We also import from many countries of the world. We source locally and internationally. CPVC we source from Kaneka and many other suppliers. Inventory days that you usually maintain? Inventory days, this year is our inventory low. Inventory days. Inventory days we have to maintain to run our plant fully. What the demand is there, we are obliged to keep the goods available to meet the demand. We have 9,000 SKUs, so inventory will be always there in the company. Okay. Inventory will be there of raw material, inventory will be there of finished goods. Right. Sir, inventory days, basically will it be upwards of two months for PVC, CPVC, or would it be lower, sir? 30 days-45 days, depending upon the season and the time. It will be between 30 days-45 days, both put together. Okay. No, that's helpful. Second question is on new product launches. Just saw the presentation. Can you give some color on Electro-fusion fittings, PP compression fittings and AquaKraft bath fittings? What sort of opportunity do you see over here? Our bath fitting was very well accepted. We anticipate 100% growth in business in this year. Our Electro-fusion fitting and compression molded fitting has been very well accepted for Nal se Jal scheme. We are selling every month good quantity. We are increasing the range also. Our hose will start production very shortly in Guwahati in the month of August. Our conduit electrical system with pipe and fittings will be in operation from November this year. Industrial valve will be also in operation by November this year. We are introducing five new system and two already went into production. Rest will go in next three, four months. Sorry to interrupt, sir. The audio, the line is not clear. Please check. Not clear? No, sir, it's not. Not clear, sir. I am very close to the speaker. Not clear? Now it is clear, sir. Thank you. Okay. I repeat again, our electrical conduit system, that is pipe and fittings, should be in market by November. Our hose will be in market from next month. Our Electro-fusion fitting and olefin Fittings are already in the market. Industrial valve will be in the market by November this year. All the system, starting from now up to November, will be in the market. Bath fitting, what I told, that it is very well accepted now, and this year we anticipate 100% growth in business compared to last year. Sir, this is very useful. If I may, have a follow-up question. Sir, what is the size of opportunity that we are targeting, for, say, industrial valves or Electro-fusion fittings or conduits that you indicated? I can only say that all will be very valid product. Okay. Sir, can this be INR 100 crore+ segment? Market size very difficult to calculate, but whatever will be the market size, we will go on building capacity to build the demand. Right, sir, if I put it the other way, can either of these variables or new products be INR 100 crore+ in two years? INR 100 crore+, 100%, INR 100 crore+ will be there in most of the product, even in one year after they go into production. After they go into production, INR 100 crore will be the business of each of the segment in one year. Okay. Sir, this is helpful. Thank you so much, and wish you good luck. Thank you. The next question is from the line of Venkatesh Balasubramanian from Axis Capital. Please go ahead. Yeah. Thanks for this opportunity. If I go back to this inventory loss issue, you mentioned that if you didn't have inventory losses in the first quarter, your margins would have been 15%. Is it correct? I don't know, but inventory loss was there in first quarter, inventory loss will be there in second quarter also. No, but what I don't understand is why don't you know how much was the inventory loss? Otherwise, how are you making the accounts? If there was no inventory loss, the margin could have been better than 12%. Okay. Now, at a different level, when you are pricing products across various plastic products which you make, pipes and everything else, how do you actually think about pricing? Let's say your raw material, is it like you think that I need to make a certain margin on these products and you price? Or is it like you think that if my cost is X, I need to make INR 10 or INR 15 per kg more? How do you think about pricing? Different product, different pricing policy. Hello? Yeah. Okay. How do you think about it in the Piping side? Piping side, the prices are dropped next day. Okay. That means that you are thinking of it in terms of per kg only. Am I correct, sir? There were many, many years of calculation. What is the method of our calculation, that is our own classified information. Okay. Simply, I think we drop it next day. No, one of the questions which was asked by one of the earlier participants was, again, you know, it was on EBITDA per kg. I mean, I know you said you don't track it that way, but just to highlight, till FY 2020, your EBITDA per kg was around INR 20 per kg for the last four or five years. It was largely constant. It was INR 20, INR 19, INR 21 like that. On an average, INR 20 till FY 2020. This jumped to INR 31 in. I corrected it. I don't think it was constant. In last two years, there were inflated profit due to inventory gain. The prices are going up, so we had much more profit in the year 2021 and 2021, 2022. Over the next couple of years, once, as you said, PVC prices are close to the bottom. By second quarter, most of the inventory losses would have gone. On a steady state basis, do you think the EBITDA per kg will go back to 20 INR per kg? We have not checked EBITDA per kg, so I can't comment, you see. Okay. Okay. I can't comment EBITDA per kg, please. Okay. Thank you, sir. The last, the other question is on Supreme Petrochem. I think from 1st July of the current year, there is a ban on single-use plastics and quite a lot of products are made of polystyrene in the single-use plastics. Do you think that, you know, whatever EBITDA margins you had, FY 2021 of 21% and FY 2022 18% in the first quarter also, EBITDA margins was on the higher side in Supreme Petrochem. It was almost 17%. Do you think this can actually correct sharply, or is it like you can hold these 16%-17% margin in Supreme Petrochem? It has nothing to do with the single-use plastic, because single-use plastic was a very small percentage of our sale. The margin was better due to higher freight rate for goods coming to India. Now the freight rate has started dropping, so definitely the margin will shrink now. Okay. Thank you very much, sir. All the very best for the future. Thank you. Thank you. The next question is from the line of Jiten Doshi from Enam Asset Management. Please go ahead. Taparia ji, good afternoon. I had just two questions. One was on the CapEx. You're incurring a very strong CapEx of INR 700 crore, as you have indicated in your presentation this year. Would this be a recurring feature? That means, can we expect every year you will be spending about INR 700 crore going forward? Depends. This year we have committed to you earlier in our AGM also that we may spend INR 300 crore+ every year, next two years also on Piping system. Okay. This year there was an additional investment of INR 50 crore on plumbing, on the composite cylinder. This may not be required next year. Right. I can assume that again, INR 700 crore, you are saying INR 300 crore-INR 350 crore next year onwards. Next year onward also in Piping, definitely we'll invest. Overall for the company? Overall, the company may be not less than INR 500 crores. Okay. All right. Taparia ji, you mentioned that there was a destocking. You expect restocking to happen in Q3, or it'll happen continuously between Q3 and Q4? Destocking last year or this year? No, this year, whatever destocking that has taken place, would you see restocking happening in quarter three or quarter four? No, destocking happened in first quarter. Destocking will happen immediately when the price goes up. Okay. If the price does not go up and stays flat. Can I complete the reply to your question here, sir? Right. Right. We believe the drop will be complete by end of August. Okay. Restocking may start from September only. Okay. How many tons do you believe? Right. In the restocking, you'd be able to sell what, 30,000 tons-40,000 tons additional? We sold in the month of March 41,000 tons. Okay. The restocking could be in that range. Depends. I can't predict, but I give you a past example. In the month of March 2022, company sold 41,000 tons Plastic Piping System. Okay. You believe that sort of growth can, once things stabilize, we can go back to that sort of a growth trajectory? I'm not committing 41,000 tons. We are committing. That's- That we will have growth of more than 15% by volume in Plastic Piping System. Okay. Sir, how are you looking at competitive pressures? How are you looking at competition in terms of pricing, new product innovations, et cetera? How are you looking at competition right now? India is a big market. We are enjoying best position. We have a largest range. We have a very strong distributor network, and still we have to reach many, many part of the country. In your view, sir, long-term sustainable growth should be between 15% and 20% volume-wise? Volume-wise, I can't commit 15%, but 10%, yes, we can commit. 10%-12% normal volume growth. 10%-12%, this is a variation because the previous year was very weak. Mm-hmm. Going forward, we definitely anticipate volume growth between 10%-12%. Okay. In our Plastic Piping System. That was very useful. Thank you so much, and wishing you all the best, Taparia ji. Thank you very much for your kind wishes. Thank you. The next question is from the line of Sujit Jain from ASK Investment Managers. Please go ahead. Thank you for the opportunity again. Sir, just to the previous question, you know, rightly explained how the operating profit per ton jumped in FY 2021 and 2022. Does that eventually revert back to the mean of close to INR 20 a kg, as the prices stabilize? We have no idea, so how can I give any number? Which we don't know, we can't give any numbers. We've got, as I told you, 9,000 SKUs. Each SKU got separate profit per kilo. Okay. What proportion each SKU will sell, very difficult to forecast. Now that value added is going up for Supreme, the operating profit per ton structurally gets elevated? Value added is going up, not only in Plastic Piping. As we already told that composite cylinder 100% value added. In our Cross-Laminated Film, major portion is value added. Which segment will grow, what way, no, we can't say. Overall, value-added product business will grow. In the first quarter, that is April-June, we had an overall growth of value-added items from INR 515 crore to INR 760 crore, in April-June also. Hello? Sure. Sure. In April, June, it was a very bad, poor quarter. Even then, we had a value growth from INR 515 crore to INR 760 crore. Fantastic. The value-added product growth will continue. Surely. Is it safe to assume that we would have had an inventory loss of close to INR 55 crore-INR 60 crore in Q1 FY 2023? I can't put the number. As I told you, we will try to calculate properly in the month of October. Inventory loss is obvious. When the prices are dropping at such a severe drop, and we say we don't lose money, then we are misleading. When we told you earlier that we keep around 45 days inventory to supply, maintain our supply chain, then we are supposed to suffer inventory loss, which we hope to recover also going forward. Right. We have seen the cycle in polymer prices. This is nothing new for us. It goes down also. When it goes too much down also, it start going up. Right. Just to get this right, you said the restocking will start happening from Q3 onwards, that is September, October onwards, which means even in - That will require in Q2 only. End of Q2 you said, right? I said at the end of this quarter. We believe from September there'll be restocking. Right. Even Q2, the industry faces prospects of inventory losses? There will be inventory loss in this quarter. Right. Q1, Q2 inventory losses, yet you say for the full year, 15% operating profit margin is possible. Which means H2 margins would be really strong. [15% basis] lower. Normally nowadays we are getting around 17%. Sorry, I didn't get that. Normally, we aim to get 17% operating margin. When we say 15%, means we are going to lose margin by 200 basis points. Sure, I get that. If you aim to earn 17% profit margin, then what is your definition of value-added products now? Value-added product is only where we earn 17%. Whatever product we earn 17%, we count as value added. Just now you said is that nowadays we aim for 17% margin for the full company. We aim to get 17% operating margin. Normally we don't get, we may get around 16%-16.5%. Right. Sir, one last question. What was the size in terms of the volumes for the entire industry, FY 2022? Overall industry volume? Overall industry volume, in your estimate, Piping industry. Plastic Piping. FY 2022. I don't have the number. I can't say. Number we don't know. Overall the market was weak last year for the whole country. We had a decline of around 5%-6% by volume. Right, Taparia ji. Thank you so much, and all the best. Thank you. Thank you. The next question is from the line of Vipul Kumar Anopchand Shah from Sumangal Investment. Please go ahead. Hi, sir. Just a clarification. This Guwahati plant is for Plastic Piping or it is electrical conduit? It will make electrical conduit also. On the same extruder, you can make electrical conduit. It will have a flexibility to manufacture both Plastic Pipe as well as electrical conduit, depending on the demand. Electrical conduit and also Plastic Pipe only. PVC pipe only. Okay. Okay. In Guwahati, we will be making PVC pipe and polyethylene pipe, both. Okay, sir. We are going to make furniture, we are going to make rotomolded tank, we are going to make blow-molded tank. We are making five variety of product there. All can be manufactured on one line or, I mean. There are several lines. It's a big plant, you see. Okay. Because we are not putting [audio distortion] for one machine. Okay, sir. Thank you. Thank you. The next question is from the line of Akhil Parekh from Centrum Broking. Please go ahead. Hi. Hello. Yeah, Akhil. Yeah. Thanks for the opportunity, sir. My first question on the PVC prices. The decline in the prices, is it largely because of the increasing contribution from the Chinese imports? Principally because the prices went sky high, so demand started shrinking. New capacity also came up. The freight rate started coming down from the peak level. I give you example, the freight from China to India went up from $60 to $210. Now they come down to $130. All factor combined together, along with the interest rate going up, Chinese economy going slow due to COVID restriction. China has huge surplus. China incidentally produce 50% of world PVC resin. Out of 45 million tons, 22 million tons PVC resin produced in China. If China has got low demand, their export increase to 250,000 tons monthly. India was getting big share, around 80,000 tons-90,000 tons per month, and they were dropping price every weekly. Along with China, Southeast Asia, Japan, they all started dropping the price. Okay, would it be fair to say now Chinese imports would be the largest contributor to us, like, in terms of PVC imports? In the country, largest share is of China. Okay. During pre-pandemic time, was it Taiwan and South Korea? During pre-pandemic days, there was anti-dumping duty on China. Okay. Anti-dumping duty five-year period got over in second half February this year. Correct. Once anti-dumping was removed, then China became competitive to participate in Indian market. Got it, sir. The second question was the CPVC prices. You mentioned for PVC we are at INR 95 per kg. Would you be able to highlight what are the current CPVC prices and what is the difference between- CPVC prices are higher level. They're up to $22,200-$2,300 per ton. They're not made in India. Correct. They are imported, so this is the U.S. dollar price I can tell you, then calculation depends on the rupee- dollar rate. Got it. Has the differential widened significantly in last two years between PVC and CPVC? Because the commentary which we used to hear that PVC and CPVC prices are more or less same in say FY 2019 and 2020. That is incidentally last year only. PVC prices are always very low compared to CPVC. Okay. Got it, sir. My final question is on the counterfeit products in the Cross-Laminated Films, and we keep hearing from the channel partners or our market surveys that, you know, the unbranded players are kind of undercutting us on the prices and the quality. This issue has been there for last three, four years, especially once we lost the, I mean, the patent expired for us basically. This UV lighting. I think many players have lost money. They are giving very poor quality. They got very bad name, many players out of them. We believe their business is shrinking and even they are no competition to us. They sell on kilo basis. Mm-hmm. We sell on square fee t basis. Their pricing, our pricing very different. Correct. Are there any steps we are taking to basically, kind of, correct the situation? The product doesn't last. Consumers decide what, really what product to buy. Silpaulin is the best known brand in the country for tarpaulin. We are very proud of our product. Our product is best, second to none in the country. Got it. The market share will be INR 500 crore-INR 600 crore, the Cross-Laminated Film business? I mean the market, Market share of tarpaulin market is huge market, where people generally use very low quality product. We sell for a special application. Correct. No market share. Market share is not applicable to this business. Okay. Got it. We sell for various applications where there's no alternative film available. Ours is the best film for that particular application in the country. Got it. Okay, that's all from my side, and best wishes for coming quarters. Thank you. The next question is from the line of Vipul Kumar Anopchand Shah from Sumangal Investment. Please go ahead. Sir, just curious to know why we are not going for backward integration, I mean, in manufacturing of PVC resins. PVC resin requires very low cost energy. Even Reliance company, they started for backward integration, a big plant in Abu Dhabi to make the raw material there, EDC. Then they're importing EDC from Abu Dhabi to India. Okay. The feedstock is a big issue. Okay, sir. Thank you. Yeah. Thank you. As there are no further questions from the participants, I would now like to hand the conference over to the management for closing comments. [audio distortion]. We thank you very much for all very intelligent question. Myself and my colleagues, P.C. Somani ji and R.J. Saboo, are very thankful to the various questions raised by all our investor friends. We thank them all very much. Thank you. Thank you, everyone. Thank you. Thank you. Ladies and gentlemen, on behalf of DAM Capital, that concludes this conference call. Thank you for joining us, and you may now disconnect your.