Gentlemen, good day, and welcome to the Q2 FY 2025 Earnings Conference Call of Tata Chemicals Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. I now hand the conference over to Mr. Gavin Desa. Thank you, and over to you, sir. Thank you, Sagar. Good day, everyone, and thank you for joining us on Tata Chemicals Q2 and H1 FY '25 earnings conference call. We have with us today Mr. R. Mukundan, the Managing Director and CEO, and Mr. Nandakumar Tirumalai, the Chief Financial Officer. Before we begin, I would like to mention that some of the statements made in today's discussions may be forward-looking in nature and may involve risks and uncertainties. I now invite Mr. Mukundan to begin proceedings of the call. Over to you, Mukundan. Thanks, Gavin. Good evening, and welcome to everyone to our Quarter Two FY 2025 Earnings Call. I'll start the discussion with a brief overview of markets and go on to highlights of the operations. Overall, the demand scenario was balanced both in India and in Middle East. In the U.S. and most of the markets, the container glass demand was down, except in Southern Europe, where I think the demand did improve during the quarter due to higher exports of beverages. In China, the soda ash demand was strong right through up to August, September, and there has been some moderation as we speak, and the higher demand was met largely through some amount of imports into China, which went from the U.S. to China. In August and early September, the supply was fairly stable within India. However, we had increased the imports into India from Iran, Russia and Turkey, and U.S. exports also increased during the quarter, but the increased exports were mainly exports to China and Southeast Asia, and there was a bit of a moderation in the exports to LATAM, which mainly followed through due to the moderation in some of the demand for lithium carbonate markets. Overall, I think the pricing remains stable. We believe the pricing has bottomed out across the markets. In terms of the other products which TCL is in, all the other products saw robust demand and continue to maintain robust pricing and margin mechanism. With respect to revenue, our revenue was up 6% sequentially due to higher volumes, mainly coming out of U.S. Indian volumes were lower, and this was mainly impacted due to very heavy rains, which impacted our operations for almost 10 days. And this led to approx while quarter on quarter, when you look at annually, the number Q2 of 2024 and Q2 of 2025, the numbers are almost same. We were behind our plan a bit, because during the quarter, we also commissioned in around the month of September, all our expansion capacities came on stream, including our boiler, the soda ash capacity, the salt capacity, as well as bicarb capacity. The operation has stabilized now, and we hope from the quarter three onwards, you would see the throughput coming through from India from the expansion. As far as U.S. is concerned, it saw a robust volume, and both domestic and export markets continued to be robust as far as our TCNA operations were concerned. U.K., of course, had lower volumes, and pricing was slightly better. We are running the operations to the best of our ability in terms of ensuring our margin profile is maintained. The pharmaceutical salt plant was commissioned during the quarter. It is going through the first trial. Matter of fact, as we speak, the first salt out of the pharma salt has been produced and will be delivered to the technical market when we qualify from customers during the current quarter. Kenya saw a higher volume and higher prices. Rallis had good performance, normal monsoon and very strong performance in the double-digit growth in the domestic market. In conclusion, we will continue to execute our long-term strategy of expanding the core and focusing on higher volumes and servicing our clients well and making sure we are agile and effective cost right across our operations. But one of the key important parameters for us would be to ensure the second half of the year has much steadier operation. The first half was impacted due to extreme weather in India. Hopefully, the second half will be much better. With this, I hand it over to the moderator for Q&A. 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 phone. 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. Our first question is from the line of Vivek Rajamani from Morgan Stanley. Please go ahead. Hi, sir. Thank you so much for the presentation. Two questions from me. Firstly, just on India, would it be possible to give some more color in terms of, you know, what was driving the miss? I know you mentioned that there were disruptions due to the weather, but if I look at the production and the sales number, the decline does not appear to be extremely steep, but the impact on EBITDA obviously seems to be much larger. So just wanted to understand if you could give some more color in terms of what was going on this quarter, and also if things have normalized as we speak. That was the first question. Yeah, the things have normalized, and I think if you look at the volume numbers, broadly, I would say that about 30,000 tons of soda ash could have been produced more. While the sales are more or less the same when you look at quarter two and quarter two, I would just say this weather impact has added 30,000 tons on soda ash, about 40,000 tons on salt. Most of the other products were okay. The key issue for us has been because of this heavy weather, even the plant was unstable, and there's a cost impact we've had, almost equal to, in our estimation, around INR 40 crores, of which INR 25 crores was on account of unstable operation increased cost because of. And INR 15 crores, the insurance claim, which will be accounted for in the books. It all is part of the EBITDA and the variable cost of the company. Sure, sir. This is really helpful, and I know you mentioned about the insurance claim, so would it be fair to say that the INR 25 crore effectively becomes more normal now that the operations have stabilized? Operations stabilized. In fact, even the INR 15 crore charge we have taken on the. See, the way we account for insurance claim is that we take 75% of the claim as on account, and 25% is actually charged off. Of course, we are fairly hopeful that we'll get the full insurance claim, and that is actually credited when it comes. So 15 represents the charge we have taken, and 25 is also charged off. Overall, about 40-odd crores is the impact in this quarter because of inefficient operations. Sure, sir. Really helpful. And just the second question that I had was, I know you would be getting into the contract discussions for U.S. going into 2025. Just wanted to, you know, if you could give any sense in terms of what kind of discussions you're having for your annual contracts, that'd be very helpful. And also, if you could just give some color in terms of what kind of export pricing you're seeing out of the U.S., right now. Thank you. So in terms of contracts, I think I would rather let them settle, but as I said, the most domestic markets are balanced and there has been. See, in terms of overall performance and long-term performance, we are very bullish about India, bullish about the markets in Americas, as I call it, because I would call it as a mix of both U.S. and Mexico together. And China has been robust all this while, but we do believe that the you know, we don't know the real impact of what is the impact of this government's initiative to continue to keep the demand up domestically. I think in broad sense, what I mentioned is demand is balanced, and the bias is also at the balanced level, neither strong nor weak. We'll wait and watch how the contracting does turn out. We are fairly hopeful that the long-term trends which we have been highlighting continue to move forward. Solar glass demand has continued to be robust. The issue remains in terms of lithium. There's been a bit of softness. The flat glass has been fairly okay. The other chemical demand has been okay. There's been a softness in container demand, which has been more or less taken. All All this softness being taken over by the solar glass demand worldwide. So, really, it is. We remain watchful, and we remain hopeful that the numbers at least would either tend to be where they are or they would bias. But bias. But we are also in the current state of contracting, so I wouldn't want to say anything more. Sure, sir. Thank you so much, and all the very best. Thank you. The next question is from the line of Abhijit Akella from Kotak Securities. Please go ahead. Good evening, and thank you. Just on the standalone operations, just to understand if there was some impact of the, you know, commissioning of the expanded capacities as well, was there any cost impact because of the unabsorbed capacities? And if so, could you please just quantify how much that might have been? No, Abhijit, it won't be big number because, you know, the depreciation will start showing little later, but we have actually ramped up as we speak, to full utilization of the plant. So the additional capacity of two point two five lakh tons of soda ash and bicarb, which is about 140,000 tons and salt. I think more or less we are ramping up, so we haven't faced any additional. The charge will be on the interest side. There are no major changes in the fixed cost or any other cost. Okay, so I mean, when I compare quarter on quarter, the India business EBITDA, it is down by about, I guess INR 90 crore or so, of which we just, kind of broke out INR 40 crore because of the, you know, weather-related factors. I guess there's some loss of volumes as well. But then what explains the rest of the decline in the EBITDA quarter on quarter? In terms of quarter on quarter, which when you look at previous year, broadly, I would say there is a 7,000 tons less, so I think it's about INR 7 crores, and INR 37 crores is on account of cost. That is, that's why I said INR 40 crores, INR 44 crores is the exact number. And there is also because of this unstable plant, there was also impact coming in from other minor products which we have in Mithapur, which is about INR 21 odd crores, which is cement, gypsum, bromine, all put together between last year and this year. But this will be made up during the year. This normally happens when there's heavy rain. There's a dip in the production and it comes back later. Right. Okay. And ramp-up of these expanded capacities, do we expect it to be, you know, vertical in the second half? Can we start running them at pretty much close to full utilization? See, I think, we are, we're speaking almost the second week, and it's fully ramped up as we speak. So it is, I wouldn't say vertical, it is as per our expectation. These are operations we know well, and they've just gone to full utilization. Okay, great. And just one last thing from my side. Any signs of capacity rationalization in soda ash that we are seeing in either Europe or China at this point? And any, you know, deferment of previously announced capacity expansions by any of the major producers worldwide? Thank you so much. The only shift has been. I think there's been a pullback of about, I think, hundred odd thousand tons by Şişecam in the U.S. And there's probably also an addition of hundred odd thousand tons by some debottlenecking in other parts. So it's almost like, you know, it is neither positive nor negative. It's just balanced it out in this quarter. We are watching very carefully. Thank you so much. All the best. Thank you. Our next question is from the line of Ankur Periwal from Axis Capital. Please go ahead. Yeah, hi, sir. Thanks for the opportunity. First question on the China demand. You know, last quarter, we did mention that while China demand is healthy, there is some volatility. And this quarter, you again mentioned that till August, September, things were good, and probably October is slightly weak. Any signs there to look at? And especially, you know, given the stimulus that the government has given there. It is still early days, but any on-ground feedback, if you can share. We actually haven't seen any major reduction. Whatever moderation we've seen in the lithium market has been more or less taken up by the solar glass market. However, we do believe in the second half, some of the supplies which were constrained in China may be coming on stream, which is why we are saying it probably is going to tend to more balanced situation. The U.S. exporters did end up exporting to China, sending shipments. I really would say that if those new capacities stabilize and are available for domestic market, there'll be less room for imports. Okay, great. And second question on the U.S. side. Now, there has been an improvement in volumes as well. Is it led by the domestic factors, the domestic market there, or more by export? And secondly, on the QoQ improvement on margins as well in U.S., if you can shed some light there. So as far as U.S. is concerned, because of operational issues and other issues, we in India and other places did postpone our shutdown, which would have come in the month of September to October. While that is one part of the story, I think they generally are producing much better than in the past, and that trend is likely to continue. There will be one shutdown in the month in this quarter as well as next quarter. Overall, we expect to be ahead of last year in terms of overall volume. That is our plan, and we'll continue to ensure that our operations run well. You know, many of these operations, as the production continues to run at peak load, the effective cost of operation also comes down, which improves the margin. Sure, sir. And, the margins that we have seen on the exports, U.S. export side, has that recouped or we are still running at, you know, those lower margins? I think our view is that the pricing, at least going forward, it's bottomed out, so it can't get worse from here. Okay, great. Good to hear that. Thank you, sir, and all the best. Thanks. Thank you. The next question is from the line of S. Ramesh, from Nirmal Bang Equities. Please go ahead. Thank you and good evening. The first thought is on the India cost increase, if you were to work backwards on the volume you have lost, it's about $30 a ton to look at your average production per quarter. So once you stabilize your plant, will you be able to see this sort of improvement in margins in India of the order of $30 a ton? Yeah. I think more or less, you see, out of the overall cost increase, which you have incurred, which is about, you're saying $30, I'm saying INR 2,000. Let me use the Indian norm. Yeah. Of which I think 1,500 will certainly recover. The 500, I think will stick there, and that is at least our line of sight to the next two quarters. Yeah, and on the new capacities, are you able to place the entire increase in production of 2.25 lakh of soda ash and a hundred and forty thousand of bicarb on a monthly or quarterly basis? Or will that take time in terms of placement? We don't anticipate by the time we finish this quarter or the beginning of next quarter, we will have any issues with this. Obviously, we are in the process of making sure we are able to place the product, and market demand has not been an issue in India. Okay. So in U.K., we still see the bottom line in the red. So when do you think U.K. can turn around in terms of profits at the bottom line? Yeah, I think the U.K. has had a bit of a wobble this quarter, mainly on because of negative spark spreads. This has continued because of high wind energy. We also wheel power into the grid, and these were done at margins which were fairly challenged. And we are hopeful that by the time we finish the third quarter, we should be out of this problem. Okay. So one last sort of thought. When you talk about margin stabilizing, if there is further increase in China, you know, recently increased capacity, do you still think that based on that incremental supply within China, the prices will have bottomed out, or will that cause some more volatility or downside to prices? I think most people are. They export, they're exporting at cost or below cost. So I think we don't believe that there is any headroom for further unless some people are sitting on inventory and there's a distressed sale, which we haven't seen. I think this is right about where the bottom, because we've tested the whole thing. Entire quarter has remained more or less steady. Thank you very much, and wish you all the best. Thank you. The next question is from the line of Saurabh Jain from HSBC. Please go ahead. Yeah, thank you for the opportunity. My question is, again, on the India business. You're saying that you would be able to kind of, you know, ramp up your capacity, I mean, fully utilize your capacity, the new capacity, easily over the next two quarters. And then there's a news piece which highlights that, you know, the Indian peers have requested for investigation and kind of imposing anti-dumping duty on soda ash in India. So, can you give some thoughts around that? And also highlight what is the, you know, size of injury that you're expecting, you know, what... If it comes through, then what could be the benefit on the realization margins with the ADD? Thank you. See, the investigation is being done by DGTR and the Ministry of Commerce. I think we will let that process continue. It's a quasi-judicial process, so I would not want to make a comment on it. It has been taken up suo moto on the basis of certain imports mainly coming from Iran and Russia and also partly from parts which we have not seen. So, I think they will look at a fair margin, and we'll settle at a fair margin. We will submit the data to them. It is usually a very clear mathematical process. I think that's what we'll go through. Yeah. So I'm not wanting to hazard any piece here, because we are in the process. We would make our submissions. I'm pretty sure the exporters from Russia or Iran will also make their submissions, and we will see what the outcome is. But we are very hopeful that the unreasonable pricing, which is usually done at cost or below cost, which should not be, will be looked at by the government to make sure there are enough safeguards there. That's. Thank you. That's helpful. And also, if you can also highlight how is the Mongolia capacity kind of, you know, doing? What is the utilization over there? There were quality issues with that production. Any changes over there? So this is what I mentioned, that in case that capacity is fully absorbed and those issues stabilize, I think the imports will tend to moderate into China, so we have to watch for that. And it's mainly that that has played a big role in the increase the exports into China. So we will see how that progresses. Usually, my own estimate is when anybody starts a new plant, they should stabilize it within, you know, ninety days or maximum. So it will happen at some point. For example, for us, it took about 10 or 15 days to get it stabilized, but sometimes it lasts longer, but it's never been more than this. Okay, but wasn't this capacity already live in last quarter? That's right. That's right. I think that it is not about quantity. I think there are some issues about some quality issues which also should get sorted out in normal course. You know, this is a process which everybody undergoes. So I would reckon that this should come in at some point of time. Which is why I was highlighting that there could be a moderation in China imports, because at some point, this will come in. Understood. My next question is, how would you see your Silica and Nutraceutical segments kind of doing over the next three years? You know, we understand there is some plan of capacity expansion for Silica, but, you know, any views or thoughts when do you expect this business to turn a bit positive and go really big in size, and in what timeframe? I think as part of the presentation, I've already highlighted that we are adding 60,000 tons of Silica business, at which point of time this is likely to be having a run rate of about INR 500-odd crore in revenue. And this project will get a formal approval, I think, somewhere in this quarter. And it will be three modules of 20,000 tons each. Currently, we have only 10,000 ton capacity plant, and we have perfectly got products which are being approved by most of the tire customers. We are, as you know, we had a food line and a tire line of 5,000 tons each, where we, during the quarter, in fact, we shut down the food line to convert that completely to tire line so that we cater to tire customers. Going forward, this 60,000 ton will be a pure tire grade Silica, which the execution time is about in a phased manner, about 24-36 months. The first 20,000 ton stream will come in close to 24 months, and each one will come six months separated by six months, so that by 36 months, we should be right up to 60,000 ton. It's about two to three years away, but at the end of that, it'll be at least INR 500 crores. India's potential, our own view of our own potential is to add at least another 150,000 tons. So this is almost a INR 2,000 odd crore business. But our first step is to move from the current revenue basis to at least INR 500 crores. When you achieve that ton rate, are you confident you will be achieving profitability in that business? Yes. The basic point is that, you know, for our expanded capacity, see, the issue is most of these are now brownfield, they are not greenfield, so there is not a big increase in fixed costs. So the entire contribution with part, almost 80% of that will move into the bottom line. That's really the benefit we are seeing in all these efforts we are putting in, including the one we've done in kaolin, soda ash, salt, and also in Silica when it gets executed. The next phase of soda ash expansion also is underway, which also will go for formal approval, and we will come back to you. But we already highlighted the next phase is 0.316 of soda ash and another 2.3 lakh tons of salt. Two hundred and thirty thousand tons of salt. That's part of the PowerPoint which we did circulate. Yeah, sure. Thank you so much and all the best. Thank you. The next question is from the line of Sumant Kumar from Motilal Oswal. Please go ahead. Yeah, hi, sir. Can you talk about the capacity expansion, what we were talking about earlier for U.S.? US capacity. Sorry, can you repeat the question? The U.S. capacity expansion plan. U.S. capacity expansion plan, I said our plan is to add 400,000 tons, and that is pretty much on schedule. We are working our way through all the clearances. We expect to get all the clearances by March of next year, and then the execution will start. In the meantime, we are also continuing with our design engineering work so that we can be ready when we can press the button. We are also trying out various other logistic capacities, the capacities needed for input materials, including supplies of utility, everything. So all that is being under work, and it'll probably hit a formal go button once we get the regulatory clearances, we expect somewhere around March. Can you talk about the Kenya capacity expansion, what we are hearing from the news? The Kenya capacity is gonna be a modular capacity because we are trying out for the first time electric calcination, which is much lower in carbon intensity. It's a green process, and that implementation is already underway. It'll happen modularly. So we're first testing it out, and then the overall modular capacity expanded in about 36 months will be another 300,000 tons out of Kenya. Incremental, three lakh capacity, right? Three lakh capacity in Kenya, and about 400,000 in U.S., and 320 in India. So all put together 1,000,000 ton across these three states. What is the timeline to what we are going to complete this? Most of them would be done in about, I think, approximately 30 to 36 months. Three years? Yeah. Okay. Thank you. Thank you. A request to all the participants, please restrict your questions to two per participant. If you have any follow-up questions, you can rejoin the queue. The next question is from the line of Saket Kapoor from Kapoor & Company. Please go ahead. Yeah. Namaskar, sir, and thank you for the opportunity. Sir, if you could just highlight to provide us some key inputs of this international soda ash conference that was during the first week or rather the ninth, 10th, and 11th of this month, and we were one of the participants. What were the key pillars and if you could just throw some light on the same? Yeah, I think broadly the three, four key points, which at least I understood because I did not participate in that, and we tend not to participate because of our own view of antitrust regulations. Our sales, some people from our sales team had gone. Clearly the view is that the long-term demand trend for the soda ash business is on a positive trend because it plays into sustainability theme. The key issue is gonna be, while the demand is on a positive trend, the customers are gonna demand a low carbon footprint for soda ash. So we have to pivot our electricity utilities over a period of time to renewable, and also find solutions for the replacement of coke with electrics and other forms of calcination. I mentioned to you the first place we are trying it out is in Kenya, and most companies are trying different routes. And the second piece is that there is a continued view that while some of the sectors have seen a bit of a softness, especially in lithium. The long-term trend is positive, and the capacity expansion now, bulk of it, opportunity would lie either in U.S. or in India, because these are the places which are now most attractive for capacity expansion. In U.S. in terms of natural capacity and India in terms of synthetic. Sir, if you could provide us with the net debt numbers, and we have also find that the freight costs are higher. So is it because of the increased tonnage or the Red Sea issue that we have higher freight cost? The forwarding, the freight and forwarding charges. On the net debt number, it's there on slide number four. It's up by INR 43 crores in the last one year time, and stands at INR 5190 crores, as of last month ending. INR 5190 crores. Okay? What are our current maturities, sir, for this year? This year, not much. Majority is happening in 2026, 2027. Okay. Yeah. Second question is what? Freight, I think, if you look at freight and forwarding charges, is almost flat sequentially. Mm. There's not much of a change. And there is certainly an impact of what you mentioned, so some of the freight markets have certainly increased in rates. But sequentially, there's no increase. Thank you. Ladies and gentlemen, we would take that as our last question for today. I would now like to hand the conference over to the management for closing comments. Thank you all for attending this earnings call. And as I mentioned, we are clearly focused on delivering our annual commitment. And this quarter was a bit wobbly, especially coming out of the heavy impact of heavy rains in Indian operations, as well as the negative spark spreads which we had in U.K. Hopefully we'll address these going forward in terms of delivering a much better Q2, much steadier Q2 in India and all parts of the world. And in terms of the strategy, our strategy continues to remain to kind of expand our core business across geographies, ensure that we focus on operational excellence and servicing our customers well. We will also soon see our growth in the new areas, which we spoke about in Silica especially. Hopefully the turnaround in Rallis subsidiary has also begun well, and we hope to continue the positive momentum there, too. Thank you all, and see you in the next quarter, and happy festive season. I just wanted to say that broadly we continue to get the same kind of, let's say, vision and overall future approach, which our Chairman Emeritus always gave us. His counsel and his guidance will continue to guide this company forward. We all pay homage to him in this quarter. And the best way of paying homage to him will be to deliver the outcomes which we've all spoken about. Thank you. Thank you. On behalf of Tata Chemicals Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.