Ladies and gentlemen, good day, and welcome to the Supreme Industries Limited Q2 FY 2023 earnings conference call hosted by DAM Capital Advisors Limited. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touchtone telephone. 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, thank you, Inba, and good evening, everyone. On behalf of DAM Capital, I would like to welcome all to Supreme Industries Q2 results conference call. Joining us from the company we have Mr. M.P. Taparia, Managing Director, Mr. P.C. Somani, CFO, and Mr. R.J. Saboo, VP Corporate Affairs and Company Secretary. I would now turn the call to Mr. Taparia for his opening remarks. Thank you, and over to you, sir. Thank you, Mr. Aasim, and thank you, and thanks to all the participants. Thank you very much. I'm 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 second quarter and half year ended September 30th, 2022. The stand-alone results and consolidated results are already with you. I will give brief on company product operating performance and other highlights. The company sold 111,803 tons of plastic goods and achieved net product turnover of INR 2,047 crore during the second quarter of the current year against sales of 102,673 tons of plastic goods and net product turnover of INR 1,901 crore in the corresponding quarter of the previous year, achieving volume and product value growth of about 9% and 8% respectively. The company sold 220,725 tons of plastic goods and achieved net product turnover of INR 4,216 crore during the first half of the current year against sales of 173,937 tons and net product turnover of INR 3,211 crore in the corresponding half year of previous year, achieving volume and product value growth of about 27% and 31% respectively. Total consolidated income and operating profit for the second quarter of the current year amounted to INR 2,092 crore and INR 1,166 crore as compared to INR 1,932 crore and INR 350 crore respectively for the corresponding quarter of the previous year, resulting increase of about 8% in consolidated income and decrease about 53% in operating profit. Total consolidated income and operating profit for the half year of the current year amounted to INR 4,303 crore and INR 493 crore as compared to INR 3,279 crore and INR 617 crore respectively for the corresponding period of the previous year, resulting increase of about 31% in consolidated income and decrease about 20% in operating profit. The consolidated profit before tax and profit after tax for the second quarter of the current year amounted to INR 105 crore and INR 82 crore as compared to INR 296 crore and INR 239 crore respectively for the corresponding quarter of the previous year, resulting decrease of 65% and 64% respectively. The consolidated profit before tax and profit after tax for the half year of the current year amounted to INR 373 crore and INR 296 crore as compared to INR 509 crore and INR 399 crore respectively for the corresponding period of the previous year, resulting decrease of 27% and 26% respectively. The business scenario of all the product segments of the company for the second quarter of current year ended September 30, 2022 as compared to the corresponding quarter in the previous year has been as under: Plastic Piping System business grew by 9% in volume and 2% in value terms. Packaging product segment business grew 3% in volume and 18% in value terms. Industrial product segment business grew 19% in volume and 32% in value terms. Consumer product segment business decreased by 8% in volume and grew by 1% in value terms. The Board of Directors has declared interim dividend at 300%, that is INR 6 per share of INR 2 each for the financial year 2022 to 2023. The dividend will be paid to those shareholders whose names stand on the list of members as on the record date, that is November 9, 2022. The overall turnover of value-added product increased to INR 798 crore during the second quarter of current year as compared to INR 758 crore in the corresponding quarter of the previous year, achieving growth of 5%. The company had total cash surplus of INR 493 crore as on September 30, 2022, as well as cash surplus of INR 518 crore as on March 31, 2022. Business outlook. Plastic pipe system business profit was severely affected due to continued fall in PVC resin prices in second quarter, which started with effect from April itself. The company supplying piping system from different polymeric material also other than PVC, which overall resulted in positive outcome in this segment in spite of severe fall in PVC prices. In such difficult business situation, the company's continuous volume growth in second quarter was quite encouraging. With the steep fall in PVC resin price, where PVC prices have dropped by INR 55 per kilo, that is 38% since April of this year, orders gained for large volume growth in second half of the year as the system become very affordable. The company is fully geared to cater to increased demand of product with increased available capacity by greenfield project at three locations starting from July and soon to be operational fully by December this year, and also brownfield expansion of capacities at other locations. The company expects to achieve 25%+ volume growth in this segment for the year compared to last year business. The company introduced Olefin Fit fixed piping system in this division, which was well received. Further new system are going to be launched during third quarter to augment the range offered to the market. The business of cross-laminated film has started showing improved performance with increase in business of made-up product and penetrating in many export markets. The division introduced many new made-up product and was successful in expanding its market reach and making breakthrough in three new export markets. The division expects 10% volume growth in this business segment for the year with improved profitability. In Industrial Component division, business conditions are improving, and company expects demand scenario to further improve in sector of home appliance and white goods, which constitute largest part of this business. Material Handling division is continuously expanding its customer base, introducing new product, and also investing in new machines and molds. It will strive to continue enlarge its customer base and product portfolio. Packaging Film division has done well during the first half of the year, where its turnover has grown up from INR 159 crore- INR 206 crore, with improved profitability and 17% volume growth over corresponding period of previous year. There is a steep price correction in polypropylene prices, which is a principal raw material during the second quarter, leading to decrease in volume in the second quarter. This resulted overall an improved volume and profit for full year in this division. In Composite LPG Cylinder division, orders are being received from existing as well as new customers, but unable to participate due to capacity constraint. Existing capacity is running at full capacity and primarily catering to the order received from Indian Oil Corporation Limited. Work on doubling the capacity is progressing and is likely to be operational by December 2022. Polypropylene division is doing good business in its general product, sports goods, yoga mats, and kids' toys. Division is continuously developing and introducing new product for variety of application. Initial feedback from the market is encouraging and expected to drive the profitability for the division going forward. The division continue to develop various customized solution for the various industry and expect good business for the division. Good growth is being witnessed in export market also. Performance Polypropylene 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. Would require to look for expansion opportunities. The company's CapEx plan for the year 2022-2023 of about INR 700 crores, including carryforward commitment of INR 300 crores, is progressing with a little delay from the initial schedule. Entire CapEx shall be funded from internal accrual. The prices of different polymers, particularly for polypropylene, low-density polyethylene, and polyvinyl chloride, have gone down between INR 31 per kilo-INR 65 per kilo since beginning of the year till now. That is a reduction between 21%-38%. Our company is a large end user of PVC resin, which has witnessed the highest fall since October 2022. This sharp reduction resulted in inventory loss, but has made product more affordable. Company expect business condition to improve during second half of the year and remain optimistic in various business segment where it operates. Next, this is brief of our overall summary for the quarter ended under reference. Thank you for your patience. Now, I and my colleagues, Sri P.C. Somani and Sri R.J. Saboo, are available to reply to various queries raised by all of you. Thank you very much. Thank you. Ladies and gentlemen, we will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on the 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. Anyone who has a question may enter star and one. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Sujit Jain from ASK Investment Managers. Please go ahead. Yes, sir. Congratulations on a good set of volume numbers. Is it safe to assume that the decline in gross profit margin entirely accounts for the inventory losses that would have been there in the quarter? Yes, you can safely assume. It's entirely due to the inventory loss suffered not only in PVC, but partly in LDPE and PP. That is about 7%-8% of the sales. That is the falling gross profit margin. As you see, our margins have dropped now. Yeah. Our volumes have gone up and our overall profit has gone down. Yes, I'm saying 8% drop in gross profit margin should be entirely, you know, accounted for by the inventory losses. It could be 8%-10% also. You see, ultimately one cannot precisely count it. Roughly estimate between 8%-10% of the sales from INR 2,000 crore. Right. This guidance of 25% volume growth, is it for the full year volume growth or it is for H2? Because then that means close to 33% growth in the H2 volumes. It is for the plastic piping division for the full year. Last year we sold 273,000 tons, and this year we anticipate to sell 340,000 tons of plastic piping system. Right. Jal Jeevan Mission, you have mentioned the order that you know received. Which kind of pipe will go into that order? Will it be PVC pipe or that will be HDPE pipe? It will be high-density polyethylene pipe. Okay. Sorry? HDPE pipe, yeah. HDPE pipe. The growth that you have clocked in pipes volume this quarter has come mainly from growth. If you can just split the growth between PVC pipes growth YoY and CPVC pipes growth and as well as application. Did it come from plumbing or did it come from agri? No. July, August, September is rainy season. In July, September, the demand for agriculture comes down. It is mostly from housing and infrastructure. Right. Within that PVC and CPVC, if you can, just quantify the growth YoY? We can say that overall our consumption, our sale of plastic piping is around 80% in PVC system and 20% other polymers, which include high-density polyethylene, linear low-density polyethylene, polypropylene, and CPVC. Get that. What would be the growth in CPVC pipes YoY volumes? In quarter-over-quarter we grew, this quarter we grew by 21% and half-yearly we grew by 44%. In CPVC in volumes. I'm tracking volumes. Right. Similar numbers for PVC? I'll calculate the polyethylene number also there. We can calculate, give you. Because PVC January, March, last December I was ready. Major growth we receive 80% in PVC. Sure. One last question, consumer volume is down 7.7% YoY. Is this just a blip or could there be a particular reason why it is affected? 21 product July-September demand was weak for furniture. Particularly only furniture demand was weak. The prices were falling, so customers were destocking. Our distributors were destocking. Sure, sir. That is it from my side. All the best. Thank you. Thank you. Our next question is from the line of Rahul Agarwal from InCred Capital. Please go ahead. Yeah. Hi, good evening, and season's greetings to everybody at Supreme. Also three questions quickly. Firstly, on the PVC price, so obviously it's down 35% since April. When I see the company realization, they are not down as much. Like, you know, in first half it looks like 11%-12% since April. Is this because of sales mix change or is there any other reason to it? In first quarter there was less sale of plastic PVC piping system and the sale was more of other item. How has that been in second quarter? Second quarter, the sales of Plastic Piping System growth for infrastructure during rainy season, demand come down. I understand. It's basically a function of sales mix, right? The mix change basically led to the realizations falling lesser than what it should be. Is that correct? Yes. It depends on the market situation. We drop the price as per the market situation. Fortunately, in the month of April, May, the demand from the farmers was very good compared to last year. Last year if you recall April, May, the country was affected by COVID second wave, and then affected more in rural area. The demand from retail segment was very weak in last year April and May. This year demand was very robust. When demand is very robust, you are not necessarily required to drop the price to the same extent. Got it, sir. Second question, a clarification on the guidance you gave, 20% volume growth was for the entire company, right? For the entire company, yes. That implies like 100% YoY growth in second half. Is that correct? Because you've done about 170,000 tonnage in first half. Full year 20% is- In first half we showed 222,725 tons. Right. Full year we're talking about INR 4.7 lakh. Correct? 394,000 tons we sold last year. Yes. You calculate 78%, it become 470,000. We expect to sell 250,000 ton in second half. 220,000 in first half, 250,000 second half. Got it, sir. Last question was on inventory loss. Was the inventory also marked down, as of September 2022, or it was only related to sales? No, inventory is also marked down naturally following the accounting principles. I mean, incrementally third quarter, whatever in case if there is further fall, the inventory loss will be restricted to the market price as of September. Is that correct, sir? Yes, you are right. Okay. Thank you so much. I'll come back in the queue. Thank you. Our next question is from the line of Abhishek Ghosh from DSP. Please go ahead. Yeah. Hi, sir. Thanks for the opportunity. Just till last quarter your volume guidance was almost 15%. It's moved up to 20% now. Obviously there is amount of lower PVC prices. In terms of agriculture, housing, infrastructure, any other segment that you're seeing now, you know, the confidence in volume growth is much better, any of these segments? No. We are seeing good growth in furniture also. Furniture, the second quarter was weak. Now we are seeing good. The price will come down dramatically, so the product become more affordable in the lower segment, which will give better volume. The demand from all segment the demand are looking better because the prices of polymer have come down in all the polymers. Okay. Okay. The consumer will now prefer less commercial product. They will like to buy quality product. We are seeing better demand prospect now going forward. Okay. Got that. Sir, any thoughts on agri demand? There's also a short season now. How are you seeing that happening? Because agri has been weak for some time. In light of PVC prices correcting now, how should one expect that? Agri demand going to be superb this year. Sorry, agri demand will be? Will be very good this year. Okay. Okay. For three reasons. Okay. In most of the state, the water dams are filled with water. Secondly, the price has become very affordable. Thirdly, the condition of the crops are extremely good today. Okay. That's helpful, sir. Sir, the other thing is, over FY 2023, you have three greenfield capacities coming through and some brownfield expansions also coming through. In tonnage terms, how much of overall capacity which will get commissioned in FY 2023? Total capacity will be 80,000 tons. This year we'll get benefit of between 30-- 30,000 tons. 80,000 tons of capacity increase and 30,000 tons of sales from that. Is it fair? Yes, because the plant will start one after another now. Okay. Is it fair to assume, sir, that given the polymer price is where it is, that new capacities will be able to ramp up to that 50%-60% utilization in two years' time? Is that a fair assumption? Yeah, it will be better. Now we achieve 65%, I think. Okay. The 65% in two years' time is what the expectation would be from the new capacities which are coming through? Yes. Our effort will be even within one year. No, why you should talk of the pessimistic year, friend? Sure. Sure. We want to do that. It is possible. Okay. Great. Sir, just one last question. Since you have mentioned about this Olefin Fit and all these new range systems that you're coming across, how should one look at the value-added product mix from here on, which is at about 38% for 2Q? Over a medium term, how should one look at the value-added product mix? When this PEX system is value-added, this Olefin Fit is value-added, so many new product what we are adding is value-added. Value-added will go on growing and our sales quantum will also grow. As we anticipate turnover of INR 9,000 crore this year, the value-added percentage also will grow now. Value-added volume will grow. Okay. Got it. Okay, sir. Thank you so much for answering my questions. We'll come back and talk to you. Thank you so much. Thank you. Our next question is from the line of Bhargav Buddhadev from Kotak Mutual Fund. Please go ahead. Yeah, good evening team and congrats on good volume performance in a difficult environment. Sir, my first question is it possible to share how has been the industry doing in the first half or maybe in the second quarter, especially given that channel has been sitting on a very lean inventory. This will give us some sense in terms of how the organized players are doing. I can give the overall picture that Reliance has given us information that last year the country consumed 2.73 million tons of PVC. This year they anticipate the country may consume 3.26 million tons, They expect the country may reach the level of 2019-2020. 2019-2020, our company sold 299,000 tons plastic pipe system. This year we anticipate to sell 340,000 tons plastic piping system. We anticipate that compared to 2019-2020, we may grow by around 13% in volume compared to 2019-2020, which is far better than the growth in the country. Which means our market share, once we achieve this percentage what we have, tell it to everybody, our market share will increase this year. Okay. Very well explained, sir. This is very helpful. Second, sir, is it possible to share how has been the performance of the Silpaulin business, and is it still being classified under the value-added category? Silpaulin value-added category for sure, and now our focus more is on export, increasing export and also on better product. Silpaulin business is a seasonal product. Value-added product we sell throughout the year, so that is the volume we are focusing more. There because they are value-added require more fabrication capability, so our realization of the film also goes up. We anticipate better profit also and better volume this year. Sir, how has been the situation of those copy products which had come in the markets? Have they got exposed and is there sort of price increase in them? Yeah. They are exposed. Now the product at current on kilo basis. Oh. 150 kilo basis. Earlier they was wanting to sell on meter and fit basis, like what we were selling. Now they came back to selling on kilo basis. This should help us in terms of improving our pricing power in this segment. Which is your judgment. Okay. Sir, lastly, is it possible to share any update on the succession plan, if any? Thank you very much. Okay, sir. Thank you. Thank you. Our next question is from the line of Venkatesh Balasubramanian from Axis Capital. Please go ahead. Yes, sir. I had a few questions. I'm sorry. If you're in a bit of mode, can you answer and connect? I had a few questions. The first thing being, sir, you had mentioned that at the end of the second quarter you will actually tell us and quantify what was the quantum of the inventory loss. Is it possible to share what was the inventory loss in the first half, and what was the inventory loss in the current quarter? That is the first question. Very difficult. We may take all material together, our inventory loss may be around INR 250 crore, between INR 200-INR 250 crore. You said INR 250 crore for the first half, correct? First half between INR 200 crore-INR 250 crore. INR 200-INR 250 crores. Okay. What about the second quarter of the current year? Second quarter was a larger portion because it was lean season and prices dropped more sharply in second quarter. Yeah. It started from the middle of June and continued up to 1st of October. We had more severe loss in the second quarter. Second quarter could be almost INR 160 crore-INR 180 crore, correct? Am I correct? No, very difficult to say. Very difficult to say. Okay. Okay, sir. Overall, we can say your overall correct inventory loss will be right thing to tell only in the month of April next year. Okay. Okay, understood. Now the second question. Okay, for next fiscal we can't say. Okay. The next question which I had was, I guess management was on TV, post the results, and had given a guidance. Volume growth guidance we already know, but I was just reconfirming that you mentioned that this year you can do INR 9,000 crore of revenues and 12%-12.5% EBITDA margin. Am I correct? Yeah. Very correct. You have correctly. Yeah. Okay. Lastly, one small, tiny little question. Your other expenses in the quarter have gone up quarter-on-quarter by INR 16 crore and your power and fuel expenses have gone up by INR 9 crore. Can you please explain why this quarter-on-quarter increase has happened in these two items? Power and fuel because of the volume. If you look at the volume, what we produced. If you are looking at volume sold, if you look at volume produced from first quarter to second quarter, about 14% higher volume we have produced. Okay. This is just volume related. There is nothing where prices have gone up or something. Especially, I'm asking on the other expenses side. Other expenses, you see, that certain orders of what you get from the elevated prices, the freight component, because many of the orders now we are getting on low delivered prices, so your revenue becomes higher, but then your cost of freight comes as a part of expenses. Okay. Majorly two heads only, freights and the higher capacity, where we are now focusing and consciously incurring more expenditure. Okay. Understood, sir. Thank you for these replies and all the very best for a great second half. Thank you. Thank you. Our next question is from the line of Sonali Salgaonkar from Jefferies. Please go ahead. Thank you for the opportunity. My first question is regarding the current demand scenario, especially in construction or real estate. You did mention that you expect agri demand outlook to be very good this year, but what about construction? What are the, you know, initial feelers you are getting from the industry right now? Agri demand is very robust. Got it. Both in rural and, as well as urban? They all live, they all require house. Okay, fair enough. Secondly, could you help us understand what is the PVC trend from the fourth of October, how much it has fallen, how much do you expect it to fall further? If you do expect some lingering impact of inventory losses in Q3 as well, and where do you expect them to stabilize? I have two main questions, madam. As I must tell you that last month the PVC prices have fallen by INR 7. Last month, this month, October. They have fallen by INR 7 and company gave linkage to quantity offtake, a INR 2-INR 4 scheme also. Now the prices have dropped, if I consider their scheme also, the prices have dropped by INR 61 since April 1 and as on today. INR 61 price have dropped. Such a big drop that I can't say the price will not drop, but it may drop maybe INR 3, INR 4, INR 5. After INR 61 drop, I can't say it cannot become three. It is already gone up from INR 140- INR 79. Got it. Worst case earlier was INR 70, so worst case it may drop by further INR 9 also in the month of November, then December. It's not much room now to drop. Got it, sir. Sir, my third question is could you help us with your segment-wise capacities right now? You did mention 80,000 metric tons is what you expect as new capacity in FY 2023. Sir, I'm just- Yeah. Yeah, go ahead, sir, please. Yes, please continue. Right. You did mention 30,000. I'm just a bit confused about that 30,000 piece. 30,000 because the capacity has come one after another. The plant at Patalganga may start by end of December. Plant at Igatpuri may properly start by end of November. We may get three month or four month production. That's why you cannot get more than 30,000 than this year. Okay. Yeah, for this year only. Okay. Got it. Sir, segment-wise capacities, please. Capacity for the FY 2023 you want? Yes, sir. For Plastic Piping System, it will be close to INR 580,000. For industrial product, it will be close to INR 83,000. For packaging products, it will be INR 90,000. Consumer product, INR 30,000. Thank you, sir. That's it from my end. Thank you. Our next question is from the line of Sneha Talreja from Edelweiss. Please go ahead. Good evening, sir, and thanks a lot for the opportunity. Just two questions from my end. Firstly, you spoke about packaging in the Cross-Laminated division, where you may have spoken about 10% sort of a guidance for your growth. Is it only for the Cross-Laminated unit or is it for the complete packaging division that you have as a whole? That was the first one. Because of cost reduction. Okay. Any guidance for the composite packaging also, or should we assume it as like 20% of the entire company now? Complete. I gave you just now. Packaging segment as a whole. Now, you can count similarly. We'll come back to you. We'll calculate, come back to you. Sure, sir. Secondly, as you were saying, you know PVC prices are almost at the bottom is what you are seeing. Has the channel already started picking up inventory due to which we have seen, you know, much better volumes than, you know, what we were expecting in Q2? Or is it Repeat the question. Please re-read it again. Sorry, Sneha Talreja. Please read the question again. I was asking since you were mentioning that PVC prices have already fallen so much and they're almost at the bottom, have the distributors started picking up inventory again? Are we seeing pickup in the inventory levels or are we still at the bottom end? I think we can better reply only in the month of January, because this month was a month of festival. Earlier it was Dussehra, then Diwali, and yesterday was Chhath Puja. All the big festival are over now. Now the remaining five months, the big festival are Pongal and Holi, but they didn't affect the business. We can tell you only by end of November or now we will be meeting only in January, then we can tell you the demand. Normally the common sense I can say that now stockists will start building inventory properly. By business sense. Not common sense, business sense. Understood, sir. Understood. Sir, last one. I actually missed out the numbers for the CPVC volume growth. Can you repeat that again for Q2 as well as H1? Q2 was 21% versus nil. It was 44%. Understood, sir. Thanks. Thanks a lot, sir, and all the very best. Thank you. Before we take the next question, we'd like to request participants to please limit your questions to two per participant. Time permitting, you may come back in the queue for a follow-up question. 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. My first question was, you know, in terms of the correction in the PVC price, if you could elaborate a little bit as to the, you know, if it was passed on, was there a significant lag during the second quarter? No significant lag. We dropped the price immediately. Okay. You know, what I was curious about, if you look at the QoQ decline in the average PVC price, it's somewhere around 25%. In our case, the drop seems to be just 10%-11%. This is for plastic pipe product. Just wanted to check if there is a significant change in the product mix compared to first quarter. No significant change. Now, depending on the particular market situation. Now, we say that our prices are completely. The whole benefit of price reduction has gone to the market. Now, we can declare today all the entire benefit is going to the market. Right. No, sir, what I was trying to understand is in terms of the average realization, for the quarter, for the plastic pipe division, it's declined about 11%, compared to first quarter. As compared to a 24%-25% drop in the PVC resin price. You know, the decline in the realization is lower than the PVC price. Plastic pipe doesn't contain only PVC, Achal. It's got polyethylene pipe, linear low-density polyethylene. It has got polypropylene pipe, polyolefin pipe system. It has got CPVC pipe system. There are many systems that go into plastic pipe system. It is not only PVC system. Right. Okay. You mean it's to do with the product mix, that the drop in the realization is not as much as the PVC price realization decline. Is that a fair assessment? Our plastic piping system is not 100% only PVC system. Got it. Sir, second question was, you know, in terms of the guidance, what you mentioned is 12.5%, 12%-12.5% EBITDA margin for the full year, as compared to first half, we have achieved about somewhere around 9.7%, which implies a 15%, kind of a number for the second half. I was just curious, you know, in terms of the margins, given second half will be more agri-heavy, period compared to first half, would that have, similar margins the way it is for plumbing business, sir? We give you a calculation, no? We are not making only plastic piping system. We make many product. When we told 12%-12.5%, this is for the entire company. Understood. I'll come back in the queue, sir. Thank you so much. Thank you. Our next question is from the line of Rushabh Shah from Anubhuti Advisors. Please go ahead. Thank you for the opportunity. Sir, my question was pertaining to our other listed entity, Supreme Petrochem. Can you give some operational highlights on the same, and again, I think, volume guidance for this entire FY 2023? No, basically, we are glad to inform that our four plans to increase our capacity of polystyrene and also revamping our EPS capacity, they are all very well established. We are all waiting for consent to operate from Government of Maharashtra. We are also expanding our capacity at Manali plant. Overall, 120,000 tons of polystyrene and expanded polystyrene capacity will be ready to start running from month of November this year. Next month only, subject to getting the department's consent to operate. Because once you move detailed project, first you require the permission from Maharashtra Pollution Control Board consent to establish. Based on the permission, then you go ahead to establish the capacity. After the capacity is established, then we approach them again to give us consent to operate. Some of the meetings did not take place due to festival in this month. We hope sometime the meeting will take place next week, next month, and then we'll get consent to operate from them. Our capacity will go up by around 10,000 tons per month from both the plants together. EPS plant is also shaping up well. Our EPS plant are going quite well, and our product are very well received. We are already selling our volume, not only Indian market, but we are exporting also. There's a big fall in the price of styrene monomer on year-over-year basis, which has resulted in erosion of profit in the second quarter. Otherwise, business conditions are looking quite favorable. Okay. Until now, we are almost running at 100% capacity, so incremental volume will only be possible once the new capacity come online. Am I correct, no? You are right. Okay. Just secondly, on the polystyrene prices, so we believe recently there has been, I think, a correction in the prices alongside crude prices. How are the prices currently trending? No, nothing to do with the crude. We don't make polystyrene from crude. We make from a styrene monomer. Styrene monomer, absolutely correct. How are the prices? Price has dropped. Our prices dropped, so we drop the price. Okay. Are currently any new capacities coming online in other countries? Just wanted to check on how the whole scenario is working on polystyrene prices. We can ship. We will take reasonable margin and we have no problem. Indian market is also growing, we have no problem. Okay. Second half we can expect again, I think margins to normalize, and maybe we can see the 1 Q level margins again from second half, no? Margins are normal. The price of styrene dropped from $1,500 in the month of June to $950. Okay. One week before. Okay. In third week of October, price had dropped to $950 from $1,500 in the month of June. When price will drop, accordingly we drop the price of polystyrene also. Understood. Currently prices are in the north of somewhere $900, correct? No, not $900 now. Today is around $1,000. Mr. Shah, may be requested to return to the queue. There are several participants waiting for their turn, sir. Perfect. Thank you for the opportunity. We'll take our next question from the line of Utkarsh Nopany from Haitong Securities. Please go ahead. Yeah. Hi, good evening, sir. First thing on the pipe volume front, we have guided that we are expecting our pipe segment volume to grow at 25% rate for FY 2023. This implies that our pipe segment volume is likely to grow at around 4.5% CAGR in the second half of FY 2023 over its second half of FY 2019. Just wanted to understand from you, sir, why we are expecting such muted pipe volume growth for the second half of FY 2023, sir. When we are expecting a pretty positive demand outlook from both agri and the plumbing side, sir. Second half to half is comparing. Last year second half, how much we had? Sir, I'm comparing second half of FY 2019 versus second half of FY 2023, sir. FY 2019, we can't say. We can't say. We don't know that. I can't say FY 2019 today. I'm not ready with the FY 2019. Overall, we say we'll grow 25%+. Okay, sir. Sir, second question is on the margin front. Like if we see our packaging segment margin, we're at a multi-year low level in this quarter. Just what's your sense on the guidance front for the second half of FY 2023 and FY 2024, what kind of a margin we are looking at for the packaging segment, sir? You mean margin, [inaudible]? Margin. Packaging. First half, there was a price erosion in LDPE to be used for our packaging material, low-density polyethylene, where the price has dropped very substantially. There was a component of inventory loss also. Now the price has stabilized. You're not saying immediately to compare yours. Sir, earlier we were doing around 18%-20% down. 12.5%. Pardon, sir? Overall, we anticipate profit of the company this year between 12%-12.5%. Sir, we got that point. Sir, for the packaging segment specifically, can we expect our margin to improve back to, again to 18%-20%, which we were doing earlier, sir, once the resin price is stabilized? I mean 18%-20% in packaging, sir. Earlier when Silpaulin was there. No, sir. Silpaulin. Polystyrene was not, but the overall packaging. It should be between 15%-17%. Ultimately, market competition is increasing. Whatever price hikes have taken place in the past, you cannot restore everything to get to the normal level. Okay. Sir, like at a company level, we earlier guided two quarters back that we are looking at a 16% EBITDA margin on a steady-state basis. Once the resin prices stabilizes, can we look at maintaining 16% EBITDA margin at a company level, say, from FY 2024 onward? We thought 15%, if I remember. 15%-15.5% we told you in the month of April, I think. Yes. Next year onwards. What we are asking next year onwards is when we can think of the next year. Next year. First, let us work for this year, sir, please. Okay. Sir, lastly, on the CapEx front, we have spent INR 237 crore in the first half. How much amount we are planning to spend in the second half, sir? From the cash flow point of view, INR 237 crore is the cash outflow which we have made this year. Yes. Similar cash flow, around INR 250 crore in the second half from the cash flow point of view. Okay. Thanks a lot, sir. Thank you. Our next question is from the line of Rajesh Kumar Ravi from HDFC Securities. Please go ahead. Yeah. Hi, sir. Good evening. Am I audible? Yeah, you are very audible. Yes, please. Yeah. Sir, you mentioned early in the call that the inventory losses is close to 10% of INR 2,000 crore and, you know, which I assume was for Q2. While later in the call you mentioned the INR 200 crore inventory loss is for the H1. Could you rectify please? Later on, I mentioned between INR 200 crore and INR 250 crore. It is very difficult to quantify this precisely. That's why the answer was given in the range between INR 200 crore and INR 250 crore. No, but you mentioned 10% of INR 2,000 crore, so that was pertaining to second quarter. Is that understanding right? Yes, yes. Right. If I look between Q1 and Q2, you know, March end to June end, June end to September end, the price fall between these two points is close to INR 25-INR 30 in each of the quarters. If in second quarter on a INR 25 - In second quarter, apart from the exceptional losses, we have to also mark down the inventory to the market price. No, in Q1 you did not do it. Q1, there was no discount. There was a sufficient gap between the cost and the selling price. Okay. That's why. Okay. Majority of the losses come into Q2. Majority of the losses come into Q2. Number's okay. Now, you mentioned that we have seen INR 8 further fall in October from September end. There was INR 7 drop in the prices and the company gave a scheme of INR 2-INR 3, INR 2-INR 4. I cannot give the INR 3-INR 4 reduction, but INR 7 was a fall in the price itself. Okay. You got full INR 4 scheme. That drop is INR 11 in the month of October. If prices do not pick up, would we be having further losses, you know, to the tune of 2%-3% of top line in this quarter? Definitely, you can't forecast so many things, but we have given a forecast that we will earn 12%-12.5%. No, no, that is okay. I will take him, sir. I'm just seeing on if the situation remains status quo, then 2%-3%. No, there is no risk of them to go up again. Okay, sir. Secondly, on the realization trend, if I look at on a quarter-on-quarter basis, while the resins, pipes realization have fallen around 11%, the other segments have reported just, 2%-3% realization drop, Q-on-Q. Could you explain that? Because resin prices that have fallen broadly in a similar range across the other segments. It's the product mix. Like in industrial product, the composite segment is doing very well. Okay. Similarly, the consumer product, we are doing more and more business of the value item. It's the product mix of the respective division which is holding on to the overall realization. Okay. Earlier in the call you were giving the breakup segment. Could you repeat the segmental capacity breakup September end? This is the 80,000 expansion. What will be the segmental capacity at March end? I have given March end capacity also, segmental, what I've given. Plastic, I think I have given 580,000 because, as of March 2023, which would be after the other two plants which are there will go in operation. Okay. Industrial products, INR 83,000. INR 83. Okay. Packaging products, 90,000. In Kandla port, 30,000. This is a 60,000 increase only versus FY 2022, which is what I have, 5,254 + 6. Actually, what has happened, certain capacity we have transferred from our Ratnagiri, Maharashtra plant to Gujarat. We are comparing the whole additional capacities. Okay. Yeah. There it will be INR 65,000. You are expecting 50% incremental, you know, 50% of the volume from these capacities to be affected in this year itself? If 60,000 increase and 30,000 volume contribution from these capacities. Capacity of Maharashtra plant was already in operation. Okay. I'm sorry to interrupt, Mr. Rajesh Kumar Ravi. Could you please return to the queue? There are several participants waiting for their turn, sir. Sure, sure. Appreciate it. Thank you. We'll take our next question from the line of Ritesh Shah from Investec. Please go ahead. Yeah. Hi, sir. Thanks for the opportunity. Sir, two questions. First, can you detail our incremental product pipeline? There are several new launches. If you can specifically cite some details. One is on Biofloc, second is PEX, and the third is basically the Plastic Piping System. So that's the first question. What is first one? Biofloc. Sir, Biofloc. Biofloc, we have dropped. Okay. Sir, any particular reason? Remember we told you we have made a soft launch just to test the market, and we felt the product is not adding value to the customer. We sold only 11 pieces of Biofloc that time, and then now we don't sell the product. Thank you. We'll take our next question from the line of Chirag Lodaya from ValueQuest. Please go ahead. Yeah. Thank you for the opportunity. I just have one question. Sir, I just wanted to know, what is the reason of, you know, PVC prices going down further? Earlier, you know, the reason was a lot of dumping from China. But what we are hearing currently is, you know, lot of shipment for December delivery from U.S., are, you know, coming at much lower prices. Just wanted to get your sense what exactly is happening in, you know, global market. There are two reasons. Basically, there's a big drop in demand in housing construction in U.S. due to continuous increase in interest cost. The government of U.S. is very concerned about the inflation, so Fed is going on increasing the rate of interest. They may increase rate of interest again on second, and that is the reason the housing demand is poor. Around 80% of PVC by way of pipe or profile or cable are consumed in housing requirement. If the housing demand goes down and there's a huge increase in the price of caustic soda, because of that, they are able to get chlorine at a negative price, and that enables them to make PVC at a very low cost and sell the excess capacity to world market. Today the lowest cost supplier is USA, and because of them only the price has dropped much more than what was expected earlier. Thank you. We'll take our next question from the line of Mohammed, an individual investor. Mr. Mohammed, your line is unmuted. Could you please go ahead with your question? Hello? You may ask your question, sir. Sir, this is regarding Supreme Petrochem. Once the consent to operate comes, by when can we ramp up the capacity to, like, full utilization that is right now for the existing capacity? No, we're not clear. We are Supreme Petrochem, but you ask question to Supreme Petrochem, which is Nayyar, please. Okay. Thank you. Our next question is from the line of Vipul Shah from Sumangal Investments. Please go ahead. Hi, sir. Can you give more information regarding this PEX pipes? What are its applications and what is the value addition we are getting as compared to normal PVC pipe? PEX pipe is quite expensive pipe system for carrying hot water. It's far better than CPVC pipe system, but much more expensive than CP system. PEX material is also very expensive. So can you quantify how expensive it is as compared to CPVC? 70%-80% more. 70%-80% more than CPVC. Right, sir? Yeah. But for any bathroom size, it will cost 70%-80% more. Okay, sir. Okay, thank you. Thank you. Our next question is from the line of Karan Bhatelia from Asian Markets Securities. Please go ahead. Hi. Thank you for the opportunity. Sir, while we've seen a sharp decline in the PVC prices in last six months, how is the pricing behavior in CPVC market? CPVC market is holding steady as on today. Hello? They are holding steady as on today. For last six months, what was the increase approximately? No, they remain steady. There are no increase also. They are holding steady. The outlook there is stable or we can see some correction on this? Sorry? For the coming year, we expect some correction in CPVC or we expect them to be stable? That is a polymer. I can't give a forecast like that. All right. Okay. Thank you. That's it. Bye-bye. Thank you. Our next question is from the line of Ritesh Shah from Investec. Please go ahead. Um- My question was pertaining to the new product launches. I think you touched upon Biofloc and you touched upon PEX. Any incremental color on bath division, basically, how much is the segment doing right now? What are the targets? That was my question. Our bath division is doing very well. We classify information how much we are selling. Our business is picking up very much. We would have 230 varieties in bath fitting range, and we are adding more and more variety. Okay. Sir, my second question was, just from understanding standpoint, when we say packaging industrial and consumer products, what are the kind of polymers that we process over here? Is it largely HDPE and LDPE or other polymers also over here? Other polymer also which are very expensive polymers are added to the poly filling. Sir, I didn't get the answer. I could not understand. I could not understand. We are adding some other polymer also along with the poly filling. Sir, my question was, if you look at HDPE and LDPE prices, on a sequential basis, it has declined by 17% and 18%. But if you look at the realization decline, it is +7% in industrial versus -4% and -12% in packaging. We have done actually very well on the product realization. Is it more to do with the mix of polymers or is it more to do with the product mix change on a sequential basis? It goes to both the reason. Product mix and mix of polymers. Okay. Fine, sir. Thank you so much. I'll be in touch with you. Thank you. Ladies and gentlemen, that was the last question. I now hand the floor back to the management for closing comments. Over to you, sir. We thank all the participants for their very analytical question. We thank all of them. Thank you all very much, and wish you very happy, healthy and prosperous New Year. Thank you very much. Thank you. Ladies and gentlemen, on behalf of DAM Capital Advisors Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.