Alkyl Amines Chemicals Limited (506767) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q4 FY '22 Earnings Conference Call of Alkyl Amines Chemicals Limited hosted by HDFC Securities. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Nilesh Ghuge from HDFC Securities Limited. Thank you, and over to you, sir.

Thank you, Shivan. Good afternoon. On behalf of HDFC Securities, I welcome everyone to this Alkyl Amines conference call to discuss the results for the quarter ended March '22. It is a pleasure of having with us top management team from Alkyl Amines represented by Mr. Yogesh Kothari, Chairman and Managing Director; Mr. Kirat Patel, Executive Director; Mr. K.P. Rajagopalan, Corporate Adviser; Mr. Chintamani Thatte, General Manager, Legal and Company Secretary; and Ms. Kanchan Shinde, Chief Financial Officer, Alkyl Amines. Without further ado, I will now hand over the floor to the management for making the opening comments. Over to you, sir.

Thank you, Nilesh. I welcome you all to the investor conference for the quarter -- the fourth quarter of year '22. This was a very challenging year to Alkyl Amines and our figures are showing that. Most of our raw materials and energy input costs went up by a large percentage. We managed to pass some of the increases in our price to our customers, but that was not enough. Things have started looking better with many of the raw materials prices coming down to some [indiscernible]. We have put more capacity on ground for one of our products, that is acetonitrile. We are also in the process of establishing a new large wind plant at Kurkumbh, which would come on stream in the next 9 months. I will ask Mr. Kirat Patel to take over.

Good afternoon, everybody. As Mr. Kothari has said, yes, it's been a challenging year. We have grown on the top line by about 25%, as you have seen year-to-year, and most of that growth has come from price rises. But the price rises have not been sufficient to keep our margins intact because the raw material prices or input prices, including the energy costs like coal and ammonia and all the other raw materials, have gone up considerably, especially in the last 6 months. Fortunately, they have stabilized now. And slowly, we are able to pass on some of these increases on to our customers. Looking forward, we are a little optimistic that the worst is over. However, it's difficult to say because there's a lot of volatility in the market due to the Chinese issues and Ukraine war and all the logistical issues people are facing. With that, I think we can open up the -- this thing to questions from the participants. Nilesh, could you lead that?

[Operator Instructions] The first question is from the line of Karan Khanna from AMBIT Capital.

Sir, my first question is on your gross margins. We've seen last 1 year has been challenging. And now given the uncertainties with crude oil prices remaining at more than $100 a barrel, is it fair to assume that you've seen a similar scenario or a similar sales in around '11, '12, '13, '14? So is it fair to assume that your gross margins also should be closer to the range rates seen in '11 to '14? Or you think that possibly with a lag of 1 or 2 quarters, margins should revert closer to 50-odd percent that we were seeing earlier?

Correct. And the margins, as you see, are stabilizing and probably will increase and improve as we pass on some of the increases in our costs on to customers. The process has begun toward the end of last year and continues. Looking forward, we are not unable to say how much the raw material prices will go up or down. But at the moment, we are optimistic that the margins will improve as we go along.

Sure. And second, we've seen that in your side, you recently announced acetonitrile capacity expansion by around 15,000 tonnes. And also, you've seen your domestic competitor also increasing their acetonitrile capacity by another 15,000 tonnes. So to what extent do you foresee this could possibly impact the realizations for the product?

Well, I can tell you one thing, that acetonitrile is a growing product and I do not foresee any issues in capacity because a lot of things are imported as of now. And it is going to be challenging, but we are very confident that the quality and the service which we have will definitely give us an edge. So we could and we have already established a market, and we have -- we will continue to do better in acetonitrile.

Sure. And lastly, can you give us some sense on what was the volume growth for FY '22 over '21? And now with the new acetonitrile plant getting commissioned, what has been the utilization for the quarter for the new plant? That's my last question.

Okay. So most of the 25% growth rate, 24%, 25% growth rate on the top line has been largely due to price, almost 2/3 to 70% has been price and the rest has been volume. As far as acetonitrile is concerned, we have the plan in the last quarter of the last year, January to March. And slowly, it is being ramped up. Looking forward, we think between the 2 plants, we will probably hit 60% to 70% of utilization of our capacity, and we are hoping to push it to even further because there is a market out there. But it is, of course, as you can appreciate, that introducing a new plant, new market, and it takes a little time. So we hope to get to the 60%, 70% capacity utilization, both plants put together.

The next question is from the line of [ Rajiv Rupani ], an individual investor.

My first question is regarding the price of acetonitrile. What is the price per kg right now? And you still answer this when I'll ask my follow-up question?

The price of acetonitrile is varying between INR 250 to INR 280, and it depends also on how much imports have come in and how much stocks are there. But it is varying in that rate.

Okay. And sir, 3, 4 years back, the price used to be INR 120 a kg, and then there was a demand, so it shot up to INR 300 to INR 400 a kg. So do you -- with Balaji also adding a new plant. And so do you see that the price of ACN going down below INR 200 a kg?

It's always possible if there is more supply than the demand, it could happen. And also there are imports also, so there is always a possibility. But then you have to see at what rate you can operate that. And what is your cost of production and how you manage your plant?

Okay. And one more question. If the prices of ACN dropped, do we have capabilities to produce tetrahydrofuran?

We don't make tetrahydrofuran.

Okay. And I have another question. You have -- in last con call, you have said that you would be doing a CapEx for higher amine. So could you tell us what products exactly you will be launching in going forward? And what new specialty chemicals will you be producing?

So we have to think about a large plant at Kurkumbh for making ethylamines and our capacity will be quite high compared to whatever capacities are there. And our existing plants also, we have technologies to change them over to other revenues. So we do not foresee any issues as far as our plants are concerned.

The next question is from the line of [ Manish Kumar ], an individual investor.

My only question is about the market share as we've seen our other competitors, the domestic competitor. So you've done the volume about -- the sales volume about 34%. And we've done almost kind of 11%. Is there any market share growth? That's the only question I have.

Sorry, can you repeat the question, please, slowly?

Yes, sure. My only question is about the market share. Is there any market share loss because our other competitor, the domestic competitor have done the volume about 34% up. And we've only done 10%, 11%.

I think -- is one of the products which we do not manufacture is what is really -- and our coproducer. We do not make [indiscernible], which is what has, to a large extent, helped our co-producer.

Okay. So there is no market share loss at all in our acetonitrile and other amines product?

Sorry, what is the question? Hello?

Sir, it seems like we lost connection for the current participant. [Operator Instructions] The next question is from the line of Senthilkumar from JOINDRE CAPITAL.

Can you please give the breakup of other expenses for the full year? Because it has increased significantly in the fourth quarter.

Yes. The other expenses includes our power, water, fuel. And in the fuel and power, as you all know, that the energy costs have substantially increased over the last 6 months, I mean, in fact, the last 3 months, much more. Coal, which we use for heating, has almost tripled from what it used to be a year ago. So that is the large extent where the other expense is about. The rest of it has not really changed that much. It is power, water, fuel, which you see has significantly changed the other expenses.

[Operator Instructions] The next question is from the line of [ Rajiv Rupani ] from -- an individual investor.

You had said a competitor produces DMF. So I would like to ask, do we have capabilities to produce DMF? And please let us know.

Currently, we do not have the capability, but we have the process, and at some stage, we may do it. Before that, we will be adding some more methylamine capacity because dimethylamine is needed for making DMF, and that is what is going to be needed in the future. So we are -- at the same time, we will be planning a new methylamine plant maybe 2 years down the line.

Okay. And what is our current methylamine capacity? And how much are we adding?

Methylamines, we have -- methylamine, currently, we are about -- no, we are about [ 75 tonnes ], so we are looking at, yes, about 22,000 tonnes a year, 20,000 to 22,000 probably. And we are looking to increase that to about 35,000 tonnes.

Okay. And any other new specialty chemicals in the pipeline, apart from methylamine?

Yes, there are a few. But currently, we are not disclosing those names. Once we are at a stage where we can disclose it, we will come back to you. But they are at the development stage and at the premarketing stage. So once they become, to an extent where we can start producing, we will be coming in the market.

And sir, lastly, your outlook on acetic acid prices?

Acetic acid, as far as the year, had a lot of problems. Last year, [indiscernible] substantially really affected us. Now it seems they are starting to stabilize, but still we see that on the higher side compared to what it used to be a year ago.

So what is it currently? And going forward, do you expect it to come down?

Yes. Currently, it is around INR 60 -- INR 65, INR 70, in that range per kilogram.

Okay. And going forward, what's the outlook?

That is difficult to predict this now, but I hope it remains in this range at least for now.

It has gone up to over INR 90, and it has been as low as INR 35. So it's been very volatile in the last 1.5 years.

The next question is from the line of Harsh Shah from Marcellus Investment Managers.

My question was regarding capital expenditure. So in Q2, we had guided for a CapEx of around INR 170 crores to INR 200 crores for the full year of FY '22. However, we have ended up spending around INR 250 crores of CapEx. So have you done -- have you preponed our CapEx of FY '23 to FY '22? Or is there some other reason?

It's a combination of 2 things. One is we have been slightly ahead of schedule in our implementation. And also prices have gone up, steel, cement, all the inputs have gone up. It's a combination of both. So we spent about INR 240 crores against the target at about INR 210 crores. And going forward in the next year, we hope to spend maybe about INR 300 crores.

Okay. And my second question is...

Further escalation in prices does not happen, and we are able to implement our projects within budgets.

Okay. And my second question was regarding the Kurkumbh CapEx. So we are doing almost INR 350 crores of CapEx for around 13,000, 14,000 tonnes of methylamine capacity. So are we planning to do something else as well at this -- for this CapEx because this CapEx seems to be a bit -- a little bit on the higher side, given the 15,000 tonnes capacity of methylamine?

It's not 15,000 tonnes, it's 35,000 tonnes.

So we are setting up 35,000 incremental?

Yes. 100 to 125 tonnes a day.

The next question is from the line of Reena Shah from Elara Capital.

Sir, I wanted to know that [indiscernible] products, because what our investment is majority of the products like acetonitrile, ethylamine, methylamine, these are the products where prices are driven by market forces. So how -- in which products do you think you can actually pass on these higher prices of raw materials to customers and that can improve your margins?

See, almost everything is market-driven. However, the issue is that the market is set up by all the producers and the competitors. And all of us, as it happens, have the same or similar cost structure given that our technologies are similar. So sooner or later, the price is settled to a level which is acceptable to the market. Yes, once in a while, if somebody becomes a little more aggressive, a new player comes in. There is a temporary setback. But otherwise, the market play itself takes care of the margins and these things. Sometimes there is an overhang, sometimes there is a shortage. So you do have the margins going up and down. But by and large, because all the competitors have similar technologies or similar exposure to their cost structures, the market forces prevail.

Okay. Okay. And sir, one more question. What are the capacity additions that have come in last year? And what are expected to come in terms of volumes in next year?

Last year, the capacity expansion has been on acetonitrile, which got commissioned towards the end of the third quarter. And actually, the production started in the last quarter. That was acetyl -- it's an 18,000 tonne plant in Dahej making acetonitrile. The next year, we hope to commission towards the last quarter of '22 or the first quarter of '23, '24 a methylamine plant of about 30,000, 35,000 tonnes, as we just mentioned earlier. There are a few smaller other capital expenditures, which are what we might call expansions to our existing range wherever we find a little tightness in the capacities.

Okay. Sir, we see that there are a lot of companies which are going on very specialized chemicals wherein they can actually drive the margins and dictate the prices. So are you looking for something on those lines? Or you are looking only for those products which are right now in your portfolio?

We are largely in the business of what we call intermediates. Between the are not commodities and we are not working by performance or specialty chemicals which are sold. But we have a few products which are unique, and there we are able to set, of course, within reason prices which are comparable. But yes, by and large, what we would define our company into an intermediates company rather than a performance chemicals company.

The next question is from the line of Bhardev from Kotak Mutual Fund.

Sir, my first question is, if I look at your gross loss in the last 5 years, it has almost tripled. And we are looking at another 50% increase in our gross loss over the next couple of years. Just wanted to know from a fundamental perspective that is this entire CapEx which we are going to incur going to get consumed in the domestic market to improve substitution? Or are we also looking at an export market opening up big time for us?

The expenditure is on capital expansion of our capacity. Normally, we have seen that about 20% of our sales are international and about 80% are domestic. Perhaps that ratio may move a little more towards export going over, but not significantly, I don't think. But largely, it's on the growth of the market. That's what we are trying to catch up with. And sometimes, we are just behind the growth and sometimes we are ahead of the growth. But by and large, there is growth in the market.

And fair to say that most of our domestic competitors' expanded capacity will also get consummated in the domestic market?

No, both of us have -- I think both have a mix of export and domestic. Different products, and we have an overlap of about maybe 40% in each other's product ranges. So -- but given that we added some products which he's not in and he's in some products which we are not in, the competition is in about 40% to 50% of our sales top line. And both of us have exports and domestic sales.

Because, sir, the fear is that the commonality between both is now sort of -- meaning earlier the commonality was not that high. Now the commonality is sort of rising by the day. And if both the companies are looking at selling this much in the domestic market, then is there a fear that there could be some price wars in order to get your capacity utilized or you don't envisage that kind of a scenario?

It is always a possibility. It has -- there have been periods of time when there has been an overhang of capacity, and there have been periods of time when both of us have been behind the curve and there has been a shortage. But this is part of business and it's a cycle. Sometimes we are ahead, sometimes we are behind. And don't forget, there's a third player also, RCF.

Sir, is RCF also adding a lot of capacity?

No, they're not adding capacity, but they are still a significant player in the methylamines market. And they do overlap some of their products with -- more with Balaji than with us.

Lastly, sir, many congrats just to see our senior management team also expanding. So given that you guys have done very well, so good to see the senior management team has expanded, sir. Well done.

Thank you.

The next question is from the line of Dhruv Muchhal from HDFC Asset Management.

Sir, just to clarify, the methane capacity was expanded in FY '21, where, I believe, taken from 30,000 to 46,000 tonnes. That was already done in FY '21, if I remember, right?

Yes, you're right.

Okay. And so broadly, sir, across capacities, what would be the utilization in FY '22 be, excluding the acetonitrile new expansion, I believe that was only last quarter?

You're talking about methylamine, right?

Across chain. So methyl, methylamine, acetonitrile.

They are very differently placed, each of, them because acetonitrile, we've just expanded the capacity. So obviously, there's a lot of headroom. In methylamine, we have expanded 1 year, 1.5 years ago in Dahej. And that is likely to be used up next year. So we'll be probably using some part of the Patalganga plant. If you remember, we have a plant in Patalganga, which is a swing plant between ethyl and methyl, and we'll probably be using the methyl plant. And maybe 2 years, as Mr. Kothari just mentioned, 2 years, 3 years down the line, we will need another methylamines plant. That leaves us with ethylamines, which we have just mentioned that we are expanding that capacity because we feel we are reaching the limits of it by the end of this year. So we will be expanding the capacity at the end of this year, which hopefully will last -- that capacity will last us for another 5 years at least.

Sure, sir. And sir, currently, methyl will be probably, what, 80%, 85% utilized. Ethyl will be somewhere in the range of 90%. And acetonitrile, except the new expansion, is largely fully utilized?

Before the expansion, it was fully utilized.

For FY '22?

Yes.

And sir, secondly, the next was on the ethyl expansion. Now that's a significant expansion, the 30,000 tonnes that you mentioned. So how does this process work? Is it a batch process? Is it a continuous process that you have to run the full 30,000 at one go? Or I mean, that flexibility is available for you?

It's a continuous process, but you can run it in campaigns. Like you can run -- when you start a plant, you run it for, say, 20 days of the month. Then you wait for the inventory to go and start again 20 days later. So it's kind of a combination of continuous -- and well not exactly [ from batch ], it's continuous but in campaigns.

Got it. So at the time it runs to the full extent, but you have the flexibility to run it for 15, 20 to manage the...

Yes.

And start-stop is not an issue in terms of operating -- a significant issue, I believe, somewhat, but...

It's not.

Sure. And sir, the last thing was -- so the acetonitrile product that we had, I mean, we have spoken about it earlier. So there was not much competition here. Some imports were coming, but it's a product which find application in growing segments. So my thing was, I mean, as the costs are rising, I understand the lag between the price increase and the cost increase and the price increase. But otherwise, is there any other reason why the cost increase should not reflect any price increase and you manage and you maintain your per kg margin or your percentage margin? I mean, what I'm trying to understand, is there a competing product to acetonitrile on price where people want to shift to the other alternate product because it is cheaper and which probably holds a cap on pricing?

Not really because acetonitrile has known properties and usefulness, which is increasing now in more uses also. It was also used in this vaccine production, which was there. And the new uses are going up. In fact, there's a new plant coming up in Germany where they need around 30,000 tonnes capacity, which should come on stream after 2 years. This is done by [indiscernible]. But they will be doing it from a acetonitrile route, where acetonitrile is a byproduct. So the quality of the way we manufacture, we manufacture from acetic acid and ammonia, while that is definitely a much -- our technology is much cleaner, if we call it, because really speaking, there are no side products. So it's all getting recirculated within the system, hardly anything goes out. So this is something which is very positive for our plant -- our company. And many of the international players also use our type of products. And since now, we have 2 locations where we make acetonitrile. It gives you more confidence to the customers that they can get their material from 2 different locations. So that's why we are very positive on acetonitrile.

Right, sir. So basically, to be sure, there is no ultimate product because of price which can influence the demand? It's pure -- its own individual demand-supply package, which drives its price?

Yes. This is to the best of my knowledge because it's used mainly as a solvent, and there could be some more expensive solvents also which can it replace it. But I will not say anything is directly competing with acetonitrile.

The next question is from the line of Nirav Jimudia from Anvil Research.

Sir, like what you have guided in terms of the expansion for retail, I mean, so based on our current capacity, how much would be the capacity additions we would see over next 2 years, one, from methylamine and probably when we would set up those methylamines new plants? So what sort of capacity increases, which we are looking on our current base capacity?

So you are looking at -- just -- I'm talking only about the amines part, not the derivatives or the specialties or anything. The amines part, you're looking at something like about 30% increase with this ethylamines plant. The 2 years down the line, the methylamines, 2 or 3 years down the line when we set up the methylamines plant, they haven't yet finalized what kind of capacity it is. But it will again be in that not less than 150 tonnes a day, so not less than 45,000 tonnes. So another 30% increase is likely to happen then.

But that 30% is after the addition of this 30%, what we would add for the methylamine?

Exactly. So today, it was, say, 100,000 tonnes, ethylamines would add 30,000, so it will become 130,000. And then it would add another 145,000 tons. So it became 175,000. From where we stand, you're looking at something like a 75,000 -- a 75% increase over a 3-year period looking forward. And that should take us reasonably comfortably over the next 5 to 7 years if the market keeps growing.

Got it, got it. So basically, we can safely see a volume growth of 15% to 17% coming on for Alkyl Amines for next 4 to 5 years, depending on some of the years where the volumes could be lesser or some of the years where the volumes would be higher based on the demand-supply dynamics.

I will leave you there. We have always managed that 10% to 15% increase in this thing. And I think looking forward, I don't see -- of course, given all the nightmares that our customers are having with the Chinese intermediates they use, sometimes it's difficult to keep the volumes up. But looking forward, I think all that will get sorted out. Sooner or later, people will sort it out. It's already settling down and people will find alternate sources and move on.

Got it. And sir, this methylamine expansion would be coming up into Dahej only? Or would we require a new land altogether for this expansion? So that would be altogether a new setup of methylamines single location, another plant, or would be in combination with our existing plant?

No, I think we'll have to look for some more land because along with methylamine, we'll put up some other plants also. So definitely, we're already looking for some land. So maybe in the next 6 months or a year's time, we'll have lots of land which will be secured for us.

Sir, my second question is on the improvements and the learnings probably in this challenging last 2 years or so. And some of the years, we had the demand-led problem, some of the years where the supply-led problems based on the global supply logistics challenges. So we have been moving time and again in terms of reducing our cost of production either through process optimization or, let's say, through product innovation. So I just wanted to ask, when we had set up our first acetonitrile plant and the learnings whereby we operated at 100%. So would this plant be an example in terms of some more improvements happening on the input output side or, let's say, some of the process innovations, which has helped us to make some sustainable amount of improvements over the next 4, 5 years? If you can just explain your thought process on the same.

We have done it in our existing plant. We have been right from the beginning because the plant -- I mean, the overall design was developed within our R&D. And from pilot plant stage to putting up a plant and over a period of time, we have been changing a lot of process conditions and going on improving the process. That has helped us in overall means of our raw materials as well as energy consumption. So we are at a stage where we are producing acetonitrile at a very competitive rate. Our new plant has been designed for this [indiscernible].

Correct, correct. Sir, is it safe to assume that based on your process optimization, whatever then the cost of production for the expanded plant would be lesser than the existing capacity for acetonitrile?

Yes. In short, yes.

And sir, lastly, I would like to ask in terms of our user industry. So we were predominantly into pharma, agri, which predominantly contributes 70%, 75% of our volume. So has the mix changed towards more from agro side from last 2 to 3 years given the kind of challenges what you have seen globally in terms of less material being available for agro intermediates and the growth for which we are seeing on that side, sir? So anything the mix has changed over last 1.5, 2 years in terms of our revenue combination?

It is not significantly because there is always a new product coming up in agro also, which is always -- I mean, some of them do need [indiscernible]. So if you lose some, you gain some. Maybe a couple of percentage points here and there, but nothing significant to say that there is a trend in the other direction.

Got it. Got it. And sir, lastly, if I can just touch upon some of the things. I think predominantly ethylamines also goes in the production of rubber chemicals and existing one of the players also done the expansion of the same. So probably this new plant would help us to cater to the expansion of our end-user customer? Or would there be some another user industries and the demand drivers because of which we are setting up such a bigger plant?

So that would definitely -- I mean, our existing [indiscernible] customers, they will definitely be buying from us. But it's not significant from point of view of capacity. And it will definitely help us. And overall, I think -- so capacity is, whether they've already expanded or they will be coming up now, is to be seen. And they are, of course, doing better mainly because of things happening in China also, and a lot of the rubber industry, the tire industry and all has started doing extremely well in India. So our requirement is also going up because of that.

The next question is from the line of Nilesh Ghuge from HDFC Securities.

Sir, you always mentioned that your Kurkumbh plant is fungible and you can switch from methylamine to ethylamine and ethylamine and back to methylamine. So can you guide us on how -- the difference between the process conditions, we are very close? Or what I understand is methylamines and ethylamines, the process conditions or pressure temperature are quite different, and they are -- I mean so how you manage that, the plant -- at plant level? I mean how much time it takes to switch from one product to another product? Can you just elaborate on this?

Yes. We don't have methylamines. We have methane only, ethylamines. And other than that, as part of the existing plants, we have quantified in a manner by which we can do a swing, sometimes make ethylamines, sometimes make methylamines and also sometimes isopropylamine, too. So we -- this is our in-house technology, you can call it, and we have been very successful in that. We also used to make diethylamines also. And of course, we make the triethylamine. So that is continuing -- I mean, methylamine is stuck in between, but that's a good opportunity we may start also.

Okay. And do we have to make modifications in the plant in terms of pipelines and some base addition or et cetera, et cetera?

Yes. We have to have a proper reactor besides, again, on the catalysts. But from methylamine, the catalyst is different than for the other amines. It's a matter of lining up the thing, and there is a campaign. Between campaigns, there is a process, which takes about 5 to 6 days to line up, to clean up, then line up the plants and to make alternate products. Equipment are meant specifically for one, some equipment are meant for the other, and a large number of equipment are common to both.

Okay. Okay. And how you manage the temperature and pressure, sir? Because normally, the reactors require different pressure when you operate ethylamines plant.

So it's part of the technology. I mean, your plants are designed to take care of various temperatures and various pressures. So I don't think there is any issues in that.

The next question is from the line of Jaiveer Shekhawat from AMBIT Capital.

Sir, firstly, in terms of the CapEx that you could be doing 2, 3 years out, the agreed capacity expansion, what could be the estimated CapEx for that? And are you likely going to fund it via internal accruals only?

Well, we can only look forward towards maybe next year and a little bit to a year after. We do have plans beyond that, but they are still not formed. But looking at the next year and the year after, we are planning to do it through internal approvals mainly. Of course, there will be some periods, maybe 3 to 6 months, where we may have to dip into our working capital limits. But at the moment, we don't think we'll be taking any term debt in -- for the planned capital expenditure over the next 2 years.

Sure. That's helpful, sir. And secondly, we have also seen your competitors significantly expand capacities across newer product lines, which would be a DMC or a DMF and ethylamine as well to diversify away from some key parts. Now what is Alkyl thinking about in terms of either focusing on the key products where you have competency? Or are you also looking to go beyond them? So what could be your future plans regarding that? And if you could also highlight any of the few new products you might have introduced over the last few years that today form a sizable portion of your revenues, apart from the key products that you already have?

Well, acetonitrile was a new product which has made a sizable part of our revenue that was introduced about 4 years ago, 5 years ago. Significantly, it was -- of course, trial runs were about 7, 8 years ago. But significantly, we expanded capacity about 4 years ago. We have a product called diethylhydroxylamine, which is also a significant product. The dimethylaminopropylamine, which is also a significant product. And we have products like [indiscernible]. And there are some specialty products, which are that larger volume, maybe a few hundred tonnes per annum and they contribute significantly.

So sir, apart from acetonitrile, are there any other products which have a capacity of over, say, 15,000 tonnes per annum? Let's say, apart from the DMAHCL as well.

So DMAHCL, methylamines, acetonitrile are all over 10,000, 15,000 tonnes.

I understand that, but apart from these?

Apart from these 4, there are no -- they not only come close.

A few thousand tonnes, but just below 10,000. [ Dimethylaminopropylamine ] will be probably be [indiscernible]. So there are a few which are significant, not as big as acetonitrile or methylamines, but significant.

The next question is from the line of Reena Shah from Elara Capital.

Sir, I just wanted to ask. Since you have seen a significant increase in power and fuel cost, are you looking to set up some renewable energy like solar plant or something along those lines?

We do already have a solar plant. Yes, we are adding some more capacity in the solar plant. But that will not bring down the costs significantly. The main issue is, of course, the coal price, which is -- which has jumped in the last 6 months a lot. And we only offset that over a period of -- in a short time is [indiscernible]. There is 2 ways to reduce our energy cost. One is, of course, as I wonder about, enhancing our solar power generation capacity, which we are doing. In the next 3 months, there will be another 2 megawatts added. And perhaps a little later in the year, for the [indiscernible], we will have maybe another 2 megawatts. But along with that, we also are increasing our turbine generations of electricity within the sites because we use the coal to create steam at high pressure and then use it -- use that with extracted steam to make electricity. So that's another additional source of electricity. Unfortunately, the -- I mean, as it happens, the power costs and the fuel costs, they are always balancing.

Sir, what could be the percentage of your power and fuel cost as percentage of revenue?

Would be 200, so about 14%, I think power or fuel, 13% to 14%. It was down to about 8%, 9%, and now it's increased.

[Operator Instructions] The next question is from the line of Shanti Patel from Shanti Patel Investment Advisors.

Looking to your expansion plans, et cetera, is it safe to assume that in next 3 years, our profit and turnover will double?

Yes, hopefully. Yes, I mean, that's our plan and our hopes that we will manage it.

The next question is from the line of Nikhil Jain from Galaxy International.

Sir, any new products that we are looking to introduce now? Let's say, so any significant new products, which we have completed R&D and kind of trial runs and looking to introduce in FY '23?

Yes. We have several products in the pipeline, but we will be only sort of talking about it only once they become commercial. At this stage, we would not like to disclose that.

Right. But we have several in the pipeline, right?

Yes.

Okay. And just a very small question, sir. So when do we anticipate our EBITDA margin to go back to, let's say, the mid-20s range that you guided earlier?

I hope as soon as possible. But if the costs of raw materials come down a little bit, then it won't go up, plus the cost of energy that is coal comes down significantly. Then we are very confident we can bring up the EBITDA to a very decent level.

Right. But sir, we are not passing it on to the customer. So let's say, over the last 2 quarters, I think we are taking a hit ourselves. But when do we expect that to pass to the customers, at least partially, so that...

No, we are trying to do that. But we cannot just pass on complete increase, otherwise they will get into issues. And then we have competition from imports also. So we have to be very careful how much we can pass it on.

The next question is from the line of Anurag Patil from Roha Asset Management.

Sir, can you share what is the total installed capacity across 3 sites, Dahej, Patalganga and Kurkumbh separately?

As I mentioned earlier about the amines because the amines capacity may be about, say, 90,000 to 100,000 tonnes, and by the end of the year, we'll add another 30,000 tonnes. And going forward 2, 3 years down the line, another 45,000 tonnes. So currently, it would be that. The other products are a little more difficult to -- because they are multiproduct campaigns, which run -- sometimes they are at 10 tonnes a day and sometimes they are 40 tonnes a day. So depending what the market, the capacities kind of swing. So that's difficult. But acetonitrile being a single product plant, yes, the capacity, as you said, is between 28,000 to 30,000 tonnes, both plants together.

So sir, can you share just the installed capacity of each of these 3 sites, only total?

No, that may be difficult because there are difference in Kurkumbh, 12 plants; in Dahej, there are 3 plants; in Patalganga, there are 3 plants, so -- and all different. So it's a bit difficult to share the capacities across.

The next question is from the line of [ Rajiv Rupani ], an individual investor.

Sir, in your con call just now you mentioned there is an overlap of 40% of the products between Balaji and Alkyl. So I would like to know which products Alkyl makes which Balaji does not make? To name a few, the main products?

The ones that we make and Balaji doesn't make, from the amines, isopropylamine, butylamine, ethylhexylamine, cyclohexylamine, these are the amines, which we make that he doesn't make, mainly in the amines. In the derivatives, we have a few like diethylhydroxylamine, DPR, DMAPA, a number of other things that we made, he doesn't make. And the reverse is also true. He makes DMF, NMP, DEA, which we don't make. So there are a range of products which he's into and what we are into. And sometimes, it's very significant for -- almost 40% to 50% of his turnover is coming from products we don't even make.

Okay. And my last question is ACN. Now Balaji has said that their new 15,000 tonnes per annum will have a new technology and where they are able to withstand higher acid prices. So I would like to know our new ACN plant, is -- will their clients be better than our plant in technology?

We don't know what their technology is. We can't comment. It could be, you never know.

Okay. And how much -- what is the consumption of India of ACN? Because our capacity will now be 30,000 tonnes and their capacity will be about 24,000 tonnes. So your comments on this after their expansion?

Yes. The capacity today -- I mean, the demand today in India is about close to 30,000 tonnes, between 25,000 and 30,000 tonnes. So -- but we are -- at least we are exporting. And I don't think Balaji has started exporting yet, but perhaps he is planning to do that. I don't know.

The next question is from the line of Shanti Patel from Shanti Patel Investment Advisors.

Sir, whether we are protected by government of India having import duty on products which we are manufacturing. And...

Yes, there's only one product where we have duty protection, which is isopropylamine, mono-isopropylamine. And that is also only against the Chinese, 3 Chinese suppliers. There's only one product.

As there are no further questions, I now hand the conference over to the management for the closing comments. Over to you, sir.

So I thank everybody for listening to us patiently. And I hope we have been able to answer your queries in a reasonable way and responsible way. I hope you will be happy with our performance in future. And we are very confident that we'll be doing in a more positive way on now onwards. Thank you.

Thank you.

Ladies and gentlemen, on behalf of HDFC Securities, that concludes this conference. We thank you all for joining us, and you may now disconnect your lines.