Balkrishna Industries Limited (502355) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Balkrishna Industries Limited Q4 and FY '24 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantee of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rajiv Poddar, Joint Managing Director. Thank you, and over to you, sir.

Thank you, Sejal. Good morning, everyone, and thank you for joining us today. Along with me, I have Mr. Bajaj, our CFO; Mr. Ravi Joshi, our Deputy CFO; Mr. Sushil Mishra, our Head Accounts; and SGA, our Investor Relations Advisers. Let me begin with performance updates. We are glad to report that contrary to our expectation of delays in shipment due to the Red Sea crisis, the business picked up sharply, which led to a double-digit volume growth both year-on-year and Q-on-Q basis. While the cost of logistics has increased, we were able to meet the requirements of end customers who continued to see normalcy in their demand in their end markets. The price of key commodities, infra activity in major economies, the Indian market growth is leading to a positive uptick in our end markets, and the same is reflecting in the sales performance of our company. For the financial year '24, we ended with a sales volume of 292,628 metric tons, which is a minor degrowth from the last year's levels. In the month of March, during the last quarter, income tax authorities conducted search operations at our office premises and manufacturing units. We have fully cooperated with the officials. We will update the stock exchange on the outcome of the above search operation upon receipt of the same from the IT department. We wish to reiterate that the company adheres to high standards of ethical conduct and legal compliance. Coming to the ongoing CapEx, we are working on the advanced carbon black project with a capacity of 30,000 metric tons per annum. The completion of this project at Bhuj is expected in the first half of this financial year. We had also announced the mold manufacturing CapEx. We expect this to be completed in the current quarter. Another update for this quarter is pertaining to the EPR regulations. On 21st July 2022, the Ministry of Environment, Forest and Climate Change issued notice containing regulations on Extended Producer Responsibility for waste tires, which, amongst others, is also applicable to tire manufacturers. The obligation is to be fulfilled by the purchasing certificates from recyclers registered with the Central Pollution Board. As on 31st March '23, the company was unable to reliably estimate its liability due to the lack of infrastructure for the same. Consequently, provision was not made for this obligation. In the current year, the necessary framework has been established, allowing the company to estimate the liability and accordingly, INR 11.25 crores have been provided in the books in the current year, which has been included under the head of other expenses for the current quarter. In line with regulation, calculation for the obligation is based on the domestic revenue for the financial year '20-'21 and financial year '21-'22. With this, I now move on to the operational highlights. For the quarter, our volume stood at 82,085 metric tons, a growth of 13% year-on-year. For financial year '24, volume stood at 292,628 metric tons, a marginal degrowth of 3%. Our stand-alone revenue for the quarter stood at INR 2,697 crores, registering a growth of 16% year-on-year. This includes realized gain on foreign exchange pertaining to the sales of INR 24 crores. For financial year '24, the revenue stood at INR 9,375 crores. This includes realized gain on foreign exchange pertaining to the sales of INR 77 crores. For the last financial year, 47% of our sales came from Europe, 27% from India, 17% from Americas, and balance from Rest of the World. In terms of channel contribution, 71% was contributed from replacement, while OEM contributed to 27%, and the balance came from offtake. In terms of category, agriculture contributed 61%, while OTR, Industrial & Construction contributed 36%, and the balance came from other segments. The stand-alone EBITDA for the quarter was at INR 699 crores, registering a growth of 42% year-on-year period. The margin came at 25.9%. For the financial year, the EBITDA was at INR 2,322 crores, registering a growth of 14%. The financial year margin stood at 24.8%. Other income for the quarter stood at INR 87 crores, while for the financial year, it was INR 275 crores. Profit after tax stood at INR 481 crores for the quarter, registering a growth of 88%. For the whole financial year, PAT came at INR 1,438 crores, a growth of 33% year-on-year. Our CapEx spends for the financial year were INR 1,140 crores. For financial year '25, we expect routine maintenance CapEx, along with some last mile completion spends for the advanced carbon black project and mold manufacturing CapEx, both of which is slated to be completed in the first half of this financial year. Our gross debt was at INR 3,036 crores at the end of 31 March '24. Our cash and cash equivalents were at INR 2,746 crores for the year. Accordingly, we have a net debt of approximately INR 290 crores. Further, I would like to update that in April '24, we have repaid INR 175 crores of long-term debt as per the repayment schedules. The Board of Directors have declared a final dividend of INR 4 per equity share subject to the approval of shareholders at the ensuing AGM. This is in addition to the 3 interim dividends of INR 4 each paid over the year. With this, I conclude my opening remarks and leave the floor open to questions and answers.

[Operator Instructions] The first question is from the line of Jinesh Gandhi from AMBIT Capital.

Congrats, Rajiv, for very good performance. A couple of questions from my side. One is, can you talk about the demand environment? You talked about fourth quarter seeing a recovery contrary to the expectation. So have we started the process of inventory buildup that has started now? And what is the outlook for FY '25?

So the channel inventory is now rebuilding and it is being maintained at same levels. As far as the outlook for the year, it's too early to give any guidance or any -- because of the geopolitical scenario that is happening across the world.

Okay. But at least we should not be seeing any material decline from where we are today. Would that be a fair assumption?

As of today, visibly, there is no reason for seeing that.

Right. And secondly, with respect to this quarter, we have seen several movements in our cost and realization side. So margins obviously have improved on Q-o-Q basis. But can you talk about the kind of price increases which we took in this quarter vis-a-vis third quarter and kind of cost inflation which we saw both on RM and on the freight side, that will be helpful?

So we are evaluating a price increase. We are waiting and watching in the marketplace. So we will be taking a price increase, but when and how much we are yet deciding? We haven't yet taken a call on that.

We haven't taken any price hike in fourth quarter?

No.

Okay. Okay. And what was the cost inflation on the RM side in this quarter, the natural rubber inflation along with other commodities?

So in the coming quarter, we see INR 1 or INR 2 increase in the total cost of the raw material.

And in fourth quarter?

Coming quarter I'm talking about.

No, my question is for the fourth quarter. Yes, from 3Q to 4Q, what kind of increase we saw?

Last quarter price was INR 152 per kg.

You mean fourth quarter?

Overall basket of the raw material cost was INR 152 per kg.

For the fourth quarter, right?

Yes.

And 3Q would be what? About INR 148, INR 149, or lower?

It was about INR 149, INR 150, so a marginal increase in Q4. And similar marginal increase we are expecting in Q1 as well.

The next question is from the line of Arjun Khanna from Kotak Mutual Funds.

Sir, the first question is regarding EPR. In terms of percentage of sales, where do we expect this number to settle up in terms of domestic sales?

The current year, for '23-'24, it will be 100% of our domestic, which needs to be completed in Y plus 2 basis.

Right, sir. No, I meant as a cost. So some of our peers have brought out cost of maybe 1.2% of domestic revenues, or maybe 1.4%.

So it will be less than 1% because what we could achieve this time is closer to INR 2.5 per kg. And as and when there will be more recyclers, price may settle down.

Right. So the fair range would be maybe INR 1 to INR 2 a kilo. Would that be the right understanding?

At this juncture, maybe closer to INR 2 is the right estimate.

Right, sir. Sir, the second question is regarding our CapEx outlook. While you did mention the mold facility with 30,000 tonnes of specialty black coming through. But in terms of our CapEx layout for this year, what is our outlook in terms of spends, because we spent almost INR 1,100 crores in FY '24?

Between INR 500 crores to INR 600 crores.

Right. So the way things are moving, we would probably be a net cash company at the end of this fiscal. Are there thoughts on increasing the dividend policy, et cetera?

So as it looks like, yes, we should be a cash-positive company. Regarding the dividend policy, I think the Board has to decide. And whatever they decide, we will proceed as per that.

The next question is from the line of Mumuksh Mandlesha from Anand Rathi Institutional Equities.

Congratulations on good results, sir.

Sorry, your voice is not audible, sir.

Is it better, sir, now?

Yes, sir.

Just on the freight rate, sir. So we are able to pass on all the freight cost impact to the dealers, distributors there, sir?

We have been able to pass on some of it, mainly the surcharge part, which is about 50% of the freight increase.

Okay. So there will be any impact next quarter also incrementally?

No, we don't see that. We don't see...

Okay. Got it. Got it. Sir, on the currency rate, sir, what is the currency rate for Q4 and what are you expecting for FY '25?

So Q4 was INR 90 euro hedge rate. And for the next year, we expect INR 92.

Okay. Sir, on EPR regulation, any impact was taken in for last year? I mean, this year, INR 11 crores, there was also an impact for last year, for FY '23. So any impact of that, sir?

We have already taken this INR 11 crores for '22-'23.

In fact, when you say, is it related to price to the customer or in the book?

In the book. I mean, there was 2-year impact, right, for the EPR regulations?

If you see my notes, in my speech, I had mentioned, it is for both the years.

Both the years. Okay. Got it, sir. And just lastly, on the carbon black sales, sir, what was the revenue for this quarter and full year, sir?

So it is about -- approximately about 7% of our revenue is from carbon black.

The next question is from the line of Raghunandhan N. L. from Nuvama Institutional Equities.

Congratulations team for a wonderful set of numbers. Rajiv, sir, as you started off saying on Q4, numbers are extremely strong, even 82,000 metric tons, absolute term also, it's a very strong number. And growth has mainly come in agri and Americas, which have seen higher growth than other categories. If you can talk a bit about how you're seeing the recovery in demand in underlying market, you are continuing to see market share gains, and how the restocking with dealers are panning out.

So thank you for the message. I think as we've been saying, Americas is something that we've been focusing on. And that's where the jump has -- the hard work that we've been doing over there is sort of coming back and benefiting us. As far as the demand goes, as I mentioned in my thing, the demand is returning to normalcy. But there is a lot of uncertainty due to geopolitical situation. And hence, it is difficult to make a call for the whole year. At the moment, the demand seems to be holding up.

Got it, sir. And in your earlier comment when you said that there shouldn't be a decline from the current level, you were referring to the Q4 level, right? We should be able to hold on to that level of performance or even better going ahead?

For the full year, full year number. So full year number of 292 metric tons.

Got it. And on the carbon black side, for FY '25, with the capacity also going up, what is the kind of growth you are expecting?

So from 1,70,000 metric tons, it will be to 2,00,000 metric tons.

Got it. That is helpful. And as you're contemplating a price hike, would it be fair to assume that the freight cost to revenue, which is around 8%, that should reduce going ahead? So going forward, margins should see an uptick from the current level, maybe towards 27%, 28%. Would that be possible for FY '25 or '26?

No, no. So I think the price hike has been taken more to -- as we are predicting -- I mean, we are looking at some raw material inflation increase, so to cover that, and the freight increase, to cover that.

[Operator Instructions] The next question is from the line of Siddhartha Bera from Nuvama (sic) [ Nomura ].

Sir, my first question is on the volume side. Basically, if I look at India also for this year, we have done very well in terms of growth, while the industry has not grown as much on the OE side. So some thoughts there, what is driving that? And is it more than led by the placement ROE or any color if you can give here?

For the Indian markets, it is a replacement market growth and some market share gains. So it's a combination of both.

Okay. So do you think this is likely to sustain in the coming year, or there is more scope to gain market share? And what will be the market share right now?

Market share right now would be between 7% to 10%. It is difficult to put an exact number. And we are hoping to sustain that. And as I already mentioned in my earlier notes also that India is going to be a focus market for us.

Okay. Okay. So largely, the double-digit type of growth, we should continue to expect in the coming year as well for the Indian market. Would that be correct?

I can't put a number to the percentage of growth. But yes, India will overall continue to grow.

Okay. Okay. And sir, second question is on the pricing side. Again, if you look at sequentially, Q4, there has been about a 3% increase. So this is basically the pass-on of the freight cost or we said that you did not take any significant price hike. So I just wanted to understand a bit more because of mix or the pass on of the freight cost.

So it's the pass-on of the freight cost as well as some product mix improvement, which -- I mean, it's a product mix -- so it's a combination of multiple things, basically, pass-through of freight cost share, also better hedge rates, and the product mix. So a combination of all these 3 have impacted in this.

Okay. Got it. Sir, lastly, in terms of pricing, how much are you planning to sort of take in the current or coming quarters to offset most of the commodity cost?

We are working on that. We haven't taken a call on what is the exact number, but we are working on that.

The next question is from the line of Abhishek Jain from AlfAccurate Advisors Private Limited.

Sir, because of the Red Sea issues, there was inventory building in the last quarter. So just wanted to understand that how much inventory lies at a channel level right now, and what is the normal level.

So it's at the desired levels, the normal levels, which is about close to 40 to 45 days.

Okay. And what is the outlook for this quarter volume growth? Will this inventory acceleration continue?

No, we can't comment on this quarter. We are yet going through it. So we won't be able to comment on that.

Okay. And sir, in advanced carbon project that is expected to commission in the first quarter FY '25, sir, just wanted to understand what kind of the revenue and the margin would be in this particular segment.

So for the margin, initially it could be 200 to 300 basis points more for that extra 30,000 over the routine carbon black.

The next question is from the line of Pramod Amthe from InCred Equities.

So first one is, if I have to analyze this quarter tonnage, it's already at around 330,000, right? So looking at your balance sheet strength and the end markets coming back...

If you analyze this year, what is the question, I missed the numbers there.

Sorry, sir?

No, I think you said 330,000, but from where are you getting that number?

So 80,000, which you have made in the tonnage for this quarter, if I multiply by 4, on an annual basis...

As I mentioned in my earlier commentary that go by the number of 292,000, and we will look for going from there. So I'm not sure if this math that you are putting in would -- it's too early to comment on which way the markets would react, looking at the geopolitical scenario. So I just wanted to check that.

Sure. But you don't think it's time to relook at your capacity for the next 3- or 4-year basis?

No. For the next couple of years, we are okay. And as I mentioned in my commentary last quarter that we have sufficient land bank and everything, so smaller downfield projects, we can set up projects quickly as and when required. So 12 to 15 months should be a good enough time frame to set up new capacity.

Sir, the second one is with regard to our advanced carbon black project. This is a new of its kind per se. So can you give some indication how is the ASP in this project versus your traditional 1,70,000 in the project? And what are the type of customers and also inquiries which you are getting, which you will be fulfilling over the next 1-year period?

It's too early to give any comment on that. But basically, we'll be looking at paint, ink, print. So those kind of users. It would be 20% to 30% higher. But as we go through the journey, we will be able to give you more clarity on that.

Okay. And also, would you be able to comment any new sizes you will be introducing in the next 2 years for that to expand your addressable market in terms of both agri and industrial?

No, that's an ongoing project. So we keep on adding new product ranges to the SKU basket as and when we go. So it's not a new thing for us. It's a very routine matter for us to keep on adding that.

The next question is from the line of Basudeb Banerjee from ICICI Securities.

Congrats for the great set of numbers. A few questions. One, definitely, outlook for the year to give in advance seems tough in this geopolitical environment. So even if you give us some idea that almost half of Q1 is over and you said 82,000 is not led by any channel inventory addition, it was pure function of retail demand. So how first half of this quarter is panning out if you can give some color? Is it more or less in line with retail demand in Q4?

Sorry, sir, but I can't comment on this ongoing quarter.

Sure. Second thing is the new products which you are showcasing like those Tracks and the larger dia tires. So how they are scaling up or what is the time line now? Do you think that they will add to the revenue substantially?

So they're going through the various testing phases. They are moving up closer and closer to normal production. So in the next 2 to 3 years, they should become a part of routine production.

Sure. And last question is, if I look at last couple of years, or even last 1 year, where India volume mix used to be 15%, that has moved up to 25%, 30% or even more than 30% in select quarters. So there has been a huge change in India volume mix altogether. And per kg metrics has only improved. So broadly, one can assume that India volume mix is not diluting overall margin. So specifically, how should one look at that you are established players for more than decades and India opportunity is coming into your numbers after so many years on a larger-scale basis. So on a strategic basis, how should one think that, why so late, or what has changed in the market making you realize to target that market on a serious note?

Sir, nothing is late or anything. It's just, earlier when -- it's a journey. So when we didn't have capacity, we could not address a certain segment, and that's what we had mentioned that the add-on of capacity at Bhuj. We've got some new capacity available and which we are going to use for Indian market. So that was one. Number two, also as we go through the Indian journey, it is in the last few years that Indian markets have become more machine-driven, more automated, earlier being more disorganized. So those things are -- looking at that factors is what forced us to look at India as a market, and that's why we focused on it, and we are getting the results.

So probably, it will be right to assume that the India farm machinery or industrial machinery, where such large tires are required, that market is maturing where your product requirement is also improving and that is helping you to make a larger volume here.

Yes. Currently, it is improving. Good government policies, development of infrastructure and all are all helping in this sector.

The next question is from the line of Sonal Gupta from HSBC Mutual Fund.

Congrats on a good set of numbers. I mean, my question has sort of been answered. I mean just going back to the question on capacity addition. I mean, the next set of capacity addition, you still see as a smaller brownfield capacity addition of 30,000, 40,000 tonnes, or I mean like...

Yes. Yes, that's what. I mean, at this stage, we are envisaging smaller brownfield capacity addition.

Okay. And just in terms of the carbon black, could you sort of indicate -- I mean, like what sort of contribution would this business -- I mean would the margins in this business be similar to the overall or would it be like much lower than that?

Marginally lower.

The next question is from the line of [ Disha Sheth] from Anvil Research.

Sir, I wanted to check, from 170, how much we have carbon black capacity? How much is used for our operations and how much is sellable to others?

Approximately 50% is used in-house and approximately 50% is sold.

And sir, because of this facility, you mentioned something 200 bps to 300 bps margin, I didn't get that point, when someone asked about the carbon black. How much is the...

The question that was asked to me was with the advanced carbon back coming, how much difference in -- addition in margin would come because of the specialty carbon versus regular carbon. So I answered in connection to that.

Okay. So on our overall company, you see at least 200 bps to 300 bps margin improvement?

No, no, no. Only for that additional 30,000 tonnes of additional specialty carbon. For that particular, we will get 200 to 300 basis points more compared to the 170,000 tonnes of regular carbon. Overall, it is too small a number to have an impact.

Correct. I agree. And sir, that 82,000, which we are doing right now, volume, do we think we can maintain that? Or we see a growth over that?

No, as I have mentioned, my guidance given is over the 292,000, which is for the whole year, not on a particular quarter. And so we should look at the 292,000 and we are looking at the growth from there.

Okay. And sir, you mentioned in the opening remarks that the margins for the next quarter should be around 2%, 3%, because of the raw material increase, right, 2%, 3% impact?

No, I don't think I mentioned anything like that. I'm not sure from where you got that.

He said, INR 150 was the average for this quarter, INR 152. For Q1, what was the average if we have the inventory there?

That is the raw material price, ma'am. It was not percentage. Per kg price that he has mentioned. My colleague has mentioned price per kg.

The next question is from the line of Chirag Maroo from Keynote Capital.

Sir, I have three questions. One is on carbon black. The advanced carbon black capacity that we are adding is for the purpose that we already have good demand coming from that product from the client side, right?

So advanced carbon, we have not yet started. We are going to establish the plant in the first half. So after that, we'll have to see how the market responds.

So actually, the thought was, the reason why we were adding the advanced carbon black was that already we were expecting that we would see good capacity utilization from the first year itself, and it was based on the demand. Else, I don't know the reason why we're adding advanced carbon black capacity. Could you just highlight me that once what was the reason to add this capacity then?

So our existing customers, who are using our regular carbon, they need the advanced carbon. And looking into the performance of our regular carbon, some of the customers requested that we should start this one because it has a good demand. So this is why we have started this one.

What kind of gross block asset turns we can expect on this capacity?

Of advanced carbon or of tire or what...

Of advanced carbon black.

INR 300 crores to INR 350 crores.

Okay. Sir, my next question is related to nonagri tires. Sir, I just wanted to understand what are our perspectives and our visions related to penetrating into this market? And what are the steps that we are taking to increase our market share?

So we are working on that. It's a process where our tires going, they are performing, they're testing. So it's an ongoing process. So we are working on that. If you see, initially, we used to be at about 70%, 75% of agri. That has come down to 67-odd percent -- 61%, but on a higher turnover. So agri is also doing. And our other sector has gone to 36%, industrial construction OTR of a higher enhanced turnover. So that is already giving you the results if you look at it on a stand-alone basis tonnage-wise.

Right, sir. Any particular target that we have set for like 5 year process, that this is the kind of size we want to achieve in terms of volume for industrial and construction?

So our vision is to be, in the next 5 years, 10% market share of the entire basket of off-highway tire manufacturing. Currently, we are about 5% to 6%.

Perfect. And sir, third, I wanted to understand, again on the industrial and construction tires per se only. Like what is the added advantage that the customer tries to look at when they try to get this product from the tire manufacturers? Like why is it on a particular basis? Is this only the pricing point that we try to attract the client from, like having 10% to 15% discount from the peers? Or is it the quality of the product and the...

It is only quality. We do not sell on price. We only sell on quality. Also, the customer is looking for quality, because they understand that people can sell at cheaper price, but eventually its cost per kilometer or cost per operating hour is what they calculate. And that is where BKT is able to prove its quality and prove valuable to the end user. That's why they are coming and asking for our products.

The next question is from the line of Tej Patel from Niveshaay.

Congratulations on good set of numbers. So my first question is, what are the current prices for carbon black, and what is the current demand-supply scenario in the country given major companies are doing huge CapEx? So is there any risk of oversupply in the industry which can affect the margins? That's the first question.

Okay. So current prices are rolling around INR 102 per kg. And currently, yes, India per se, if you talk, then the production is more than the capacity, and imports also come and export is also there. But looking into the demand globally, I think we would be able to sell because our product is being approved by all tire majors and we can easily sell even if we expand upon.

So you don't see any impact on margin because of oversupply also?

No, no.

Okay. And sir, pardon me if this question sounds repetitive, because my line got dropped in between. So sir, you said around INR 11 crores you have charged to the P&L for the EPR for the last 2 years, right? So then how much are we anticipating for the next year? And what is the current pricing for these credits?

Approximately INR 15 crores will be there for the next year.

The next question is from the line of [ Peter ] from LIC Mutual Funds.

I just wanted to ask one question. Some of the European manufacturers have stated that they had to reduce production because of the geopolitical tensions and freight issues. So has our company been a beneficiary in terms of having more sales because of this issue?

Difficult to exactly pin out, but yes, I mean as the numbers are saying, there has been some -- it's been a good set of numbers for the quarter driven by growth. So somewhere we must have gained something from that, but difficult to put exact number to that.

Okay. And given that they are not fully out of that issue that they faced, and furthermore, newer sanctions in and around by their regional governments make some raw materials that they procure, making it a higher cost affair, do you think that on the pricing front, they will be challenged, so companies like us who import into that region will continue to benefit on that front as well?

Yes, yes, yes.

The next question is from the line of Siddhartha Bera from Nomura.

Thanks for the follow-up, sir. Sir, I missed the commodity cost increase which you are seeing for the first quarter. What was that?

INR 1 to INR 2 per kg.

Okay. Okay. Because, sir, if you look at the global rubber prices, they have jumped quite a bit in the last 2 quarters. So is it that you are not seeing that sort of increase for you or...

So some channel inventory is also there for us. Because we are importer, so there is some transit material, so that is why impact is lesser.

Okay. Okay. Okay. So it will get reflected more later, probably in quarter 2...

After quarter 2.

Okay. Got it. And sir, globally also, on the replacement side, commentary from many players have been quite muted. Are you also seeing similar type of trend for you? Or according to yourself, on the replacement side, globally, like Europe or U.S., the demand is much stronger and you are confident of the growth sustaining?

So we are talking about it being stable for us.

The next question is from the line of Jinesh Gandhi from AMBIT Capital.

With respect to this EPR provisioning. So obviously, I mean, India has come up with this regulation now, but I'm presuming for Europe and U.S., you'd be already meeting with the regulations and providing for that already in our P&L. Is that the correct understanding or that also can come in...

They are already there, and we are already complying with that for the last couple of years. It is being done by our channel partners, and they are taking care of it.

Okay, so it's taken care by channel partners. Okay, second question pertains to margins. So obviously, the near term, you talked about there are pressures on the commodity side. But if I look at the full financial year FY '25 from where we are today, what are the factors we are looking at in terms of positives and negatives from margin evolution perspective?

We expect to maintain year-end margins for the whole year.

Full year FY '25 margins should be maintained?

Yes. Yes.

Ladies and gentlemen, we will take that as the last question. I would now like to hand the conference over to the management for closing comments.

Thank you, everybody, for attending and taking time out. We will see you all next quarter. Take care.

On behalf of Balkrishna Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.