Bodal Chemicals Limited (524370) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Bodal Chemicals Limited Q2 FY '22 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 guarantees 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. Ankit Patel, Executive Director of Bodal Chemicals Limited. Thank you, and over to you, sir. Mr. Patel, please go ahead.

Okay. We're good to go? Can I start?

Please go ahead.

Okay. Thank you. Thank you very much. Good evening, everybody. On behalf of Bodal Chemicals Limited, I extend a very warm welcome to everyone for joining us on our call today. On this call, we are joined by our CFO, Mr. Mayur Padhya; and SGA, our Investor Relationship advisers. I hope everyone had an opportunity to go through the financial results and the investor presentation, which has been uploaded on the stock exchange and on our company's website. We will give you a quick overview of the recent developments in the chemical industry and our company, and then Mr. Padhya will walk you through the financial performance for the quarter. The industry highlights are manufacturing parts in China have been forced to close and some are closed temporarily due to lack of electricity because of the power outage. China's most industry-like provinces like Jiangsu, Guangxi and Guangdong are the hardest hit. There has been an impact on the global supply chain as well various commodity prices. Around 20%, 25% of China's chemical output is expected to be impacted. Hurricane Ida, which is in the United States recently, has further reduced global supply of bulk chemicals. Due to labor shortages and container shortages, freight and logistic costs have been rising in the recent months. Due to the confluence of the several factors, the global demand is currently being met by a rather limited supply at elevated prices. At Bodal's overview, with over 3 decades of experience, Bodal Chemical Limited, India's largest indicative manufacturer of dyestuff and dye intermediates. In domestic market, our market share today 13% for dyestuff business and 20% for dye intermediate business. In global market, our market share stood at 3% for dyestuff, 6% for dye intermediate business. In today's environment, where Indian suppliers and emerging as preferred partners globally, we have been able to leverage our leadership position. We have meaningful capacity across various products to serve demand of end user industries. Basic chemicals such as sulfuric acid, chlorosulphonic, oleum, Beta Nephthol, Acetanilide and others, which are used as raw materials in the production of dye intermediates as part of our core product portfolio. We are expanding our product market and including dye intermediates derivatives and chlor alkali products, which are applications in pharma, agrochemicals, paper and other industries. We are moving towards a very focused mindset and adding additional capacity across multiple products. This quarter's performance is a consolidated net revenue for the first half FY '22 stood at INR 900 crores, which is highest-ever half-year performance for our company. This growth was primarily driven by rising demand from the end-user industry and structural demand shift due to global supply side tightness. Various events in China and mounting freight costs have disrupted the regular trade and entered into the steep inflationary pressure on key raw materials. We will touch base each business verticals and the recent developments. First of all, dyestuff. End application industries like textile, leather paper, other dyestuff industries have been doing well during the last few quarters. All leading textile companies are having a healthy order book. We have stemmed the demand of dyestuff products. Dyestuff business growth has amplified and registered revenues INR 317 crores in first half, again at INR 143 crores in the first half of last year. In dyestuff, all major products like Reactive Dyes, Acid Dyes, Liquid Dyes have performed well. We foresee this momentum to continue as the textile industry is showing a healthy momentum. Dye Intermediate sector. Being an integrated dyestuff manufacturer, we produce 25 dye intermediate products, and over 40% of these intermediate capacity is captively consumed, resulting in a significant cost advantage for our dyestuff products. Other than our captive consumption, we also sell our dye intermediates in both domestic as well as global markets, and we enjoy a leading position in the total domestic market. This segment also witnessed a healthy trend. Prices of our key products like HSE and vinyl sulfone have moved northwards, especially during the month of September 2021, which will get reflected in Q3 FY '22. In Q2 FY '22, the average prices of vinyl sulfone and acetanilide were around INR 231 per kg for vinyl sulfone, INR 379 per kg for HSE. Dye intermediate business has registered a revenue of INR 314 crores in first half FY '22 against INR 195 crores last year. Basic chemicals. We manufacture a spectrum of basic chemicals like sulfuric acid, chlorosulphonic acid volume, oleum, Beta Nephthol and Acetanilide, which again helps in terms of vertical integration for dye intermediates helping improving profitability of the company. 48% basic of the chemicals capacity is captively consumed for dye intermediates production. Thionyl Chloride has witnessed good performance during the period -- quarter and expect the momentum to continue in the second half of this year. Our overall basic chemicals segment contributes around 10% of our total revenue. Chlor alkali business. In Q1 FY '22, we acquired our Rajpura, Punjab unit from Mawana Sugars. The unit produces various chlor alkali products like caustic soda, baking powder, hydrochloric acid, sodium hydroxide, chlorine, sulfuric acid, et cetera. The Indian chlor alkali industry witnessed strong tailwinds for the quarter, and demand for caustic soda, our key product for this unit, continues to remain limited. Caustic soda prices also saw a spike in Q2 FY '22. This unit works on a variable technology, and we have embarked a CapEx of around INR 125 crores for upgradation which will also help in increasing caustic soda capacity to 99,000 tonnes per annum from the current capacity of around 55,000 to 60,000 tonnes per annum. This is a new segment for our business, and year-on-year comparison is not possible, but we are expected to enter into the segment at an opportune time. Overall, our chlor alkali business is flourishing well. We are primarily serving the Northern Gulf of India, where most of the renowned FMCG textile, paper manufactures are located. Our presence in North India has been growing since the acquisition of this unit. And at full capacity, we expect this unit to generate additional revenues of INR 300 crores and EBITDA margins of around 30% to 22%. Benzene derivatives and sulfuric acid. Our Saykha greenfield project is in progress, and we plan to leave it -- we plan to have it operational by Q3 FY '23. Under the benzene downstream products, we will be manufacturing MCB, PNCB, ONCB, MNCB, DNCB, PNA, 2,4-DNCB and MPDSA. There is a capacity of 80,000 tonnes per annum, which are used in pharma and agrochemicals. We will set up for that integrated product change, which will lead to cost efficiency, better productivity and higher margins for the company. We should be able to sell these products to our existing basic chemicals clientele and partly will be used for captive purpose. The capacity of sulfuric acid and derivatives will be 350,000 tonnes per annum, which will include sulfuric acid, Oleum 23%, Oleum 65%, Liquid SO3 and Chloro Sulphonic Acid and SO2. We expect this project to generate additional revenues of around INR 550 crores at optimum levels with EBITDA margin in the range of 15% to 18%. In other developments, production of TCC has been stabilized and has contributed around INR 22 crores, 3% of our total revenues. But due to the limitations in the container availability for this particular product, we are not able to export it at our main target market, U.S. So currently, we have stopped the production at our plant, and when we start exports of this product, we will restart the plant. We are doing business in 45-plus countries and a basket of 200-plus products. This diversification requires intense working capital resource for managing inventory of key raw materials and finished goods, along with large transit time for export markets. In event of supply chain tightness, we prefer to keep inventory in some of our customers' requirement in the left time frame. We have established various trading and marketing subsidiaries to create a stock point and penetrate new geographies and clients. Our Turkey subsidiary, Sen-er Boya, sales dispatches have improved meaningfully. We expect business momentum at this subsidiary to improve further going ahead. Our Bodal China has also performed well and has turned profitable. SPS and Bodal Chemicals Private Limited (sic) [ Bodal Chemicals Trading Private Limited ] has also performed well. In a medium- to long-term view, these subsidiaries will penetrate their respective regions and will bring meaningful business to our company. Our top 3 strategic objectives will be to ramp up our existing capacity, commercialize our vinyl sulfone capacity at UP unit and complete the Saykha and Rajpura project by Q3 FY '23. We have been moving up the value chain and working towards diversifying their business from our core dyestuff and dye intermediate business to other specialty chemical products like benzene derivatives and chlor alkali products. The world is recognized in India as a world-emerging second-largest manufacturing hub, and it is evident that all manufacturing businesses, particularly chemical industries will gain from this. Many Indian chemical businesses have got good opportunities over the last few years. Furthermore, single restrictions in environmental norms have structurally shifted demand to organized players like us. There are meaningful initiatives created by Indian government to reduce India's dependency and launch [indiscernible] to increase capital expenditure by domestic players. Indian chemical company like us is poised for growth, owing to the increasing preference for sustainable partners. Thank you, and now I hand over the call to Mr. Mayur Padhya to walk you through the financial performance.

Thank you. Good evening, everyone. Overall performance of the company has been healthy for the quarter gone by. Our operational facilities are running at pre-COVID level now. This growth is driven by better price and product mix. Let's consider a stand-alone performance. Total revenue for Q2 FY '22 stood at INR 435 crores. EBITDA stood at INR 55 crores in Q2 FY '22. Net profit for the quarter stood at INR 31 crores. Our stand-alone performance for H1 FY '22 is like this. Total revenue for H1 FY '22 stood at INR 829 crores. Performance on year-on-year is not comparable due to nationwide lockdown in Q1 FY '21. EBITDA stood at INR 109 crores in Q2 FY '22. Net profit for H1 stood at INR 61 crores. Consolidated performance is like this. Total revenue stood at INR 472 crores for Q2 FY '22. EBITDA stood at INR 50 crores for Q2 FY '22. Net profit for the quarter stood at INR 24 crores for Q2 FY '22, with growth of 114% year-on-year basis. Turkish lira has been volatile and has impacted our subsidiary, Sen-er Boya. And there is an exchange loss of around INR 2 crores. This impact has been already considered in consolidated financials. Our consolidated financial performance for H1 FY '22 is like this. Total revenue stood at INR 900 crores for H1 FY '22 against this INR 437 crores for H1 FY '21. This includes export of 34% and domestic sale of 66%. EBITDA stood at INR 106 crores in H1 FY '22 against INR 11 crores in the corresponding period of last year. Net profit for the quarter stood at INR 52 crores against a loss of INR 9 crores. H1 FY '22 performance for the key subsidiaries were healthy. SPS posted revenue of INR 51 crore, a growth of 41% year-on-year basis. BCTPL has reported a revenue of INR 4 crore, a growth of 39% year-on-year basis. Sen-er Boya has reported total income of INR 47 crores, a growth of 53% on a year-on-year basis. Total income from China subsidiary was INR 28 crores, growth of INR 484 crores, 84% on a year-on-year basis. Segment-wise performance on a consolidated basis for the H1 FY '22 are as below. Dyestuff revenue stood at INR 317 crores, a growth of 122% on year-on-year basis. Dye intermediate revenue stood at INR 314 crores, a growth of 61% on year-on-year basis. Basic chemical revenue stood at INR 92 crores, a growth of 95%. Chlor alkali division and TCCA revenue stood at INR 102 crores and INR 22 crores for H1 FY '22. Total production volume on a stand-alone basis for H1 FY '22. Dyestuff reported 9,518 metric tons. Dye intermediate reported INR 12,137 metric tons. Basic chemical reported 117,234 metric tons. Chlor alkali stood at 37,803 metric ton, of which caustic soda stood at 27,711 metric ton. TCCA stood at 919 metric ton. Our net debt stood at INR 330 crores for the 30th September 2021, on a consolidated basis. With this, I conclude the presentation and open the floor for further discussion and question answer.

[Operator Instructions] We have the first question from the line of [ Atul Kothari ] from Progwell Securities.

Query is basically in reference with something which you have already said in the opening remarks, but if you could throw some more insight into what is happening in the China and the U.S. chemical market. If you can elaborate more in terms of are there any big major plant shutdown which are happening in U.S. and China? And will this lead to a permanent structural shift? Or will it be only a temporary shift in terms of the demand/supply is concerned?

So in the U.S., because of the hurricane, it was affected. I mean the city of Houston and the Texas area was affected, which is where the majority of the chemical plants and refineries are. But I think by end of November, it is going to be recovered and back on track. But in chlor alkali space, particularly in U.S., there are 2 plants which are old. They have been permanently shut down. So that has created a small gap in terms of production compared to last 3 months ago, 6 months ago. So that is what is happening in the U.S. In China, I think the reason is very different to achieve their carbon footprint target by 2025, I think central-level government has taken over the situation of the carbon generation. And I think that is the main reason why we are restricting manufacturing, which emits a lot of carbon, so where the coal is basically used. And so I think that will -- that should be a target base, which I don't feel is going to ease up at least till March. So in my view, this current quarter and the next quarter is definitely going to have a lot of disturbances from China. And currently, as I said, as I mentioned, 25% production is cut in terms of the chemical plants in China. I think that is likely to continue until about February and March. And for that, it depends on how close they get to their, let's say, 2022 targets because what I believe, earlier, they were not -- province-level governments were not practicing what they were supposed to do to achieve this norm by 2025. So that's why the central-level government had to come into picture and now has taken strict actions. So there may be some disturbances because China is more than 50%-plus consumer of coal globally. And coal is the cheapest way to generate this energy. So they either have to shift or they have to suffer some production loss. So I think it's a transition which cannot just replace or happen in a very short time. So I think for at least, I think, 2, 3 quarters, there will be some disturbance, and there may be some permanent shift and changes also.

Okay, sir. And sir, are there any companies, especially in the Southeast Asian region, who are expanding their capacity in our line of products?

So in dyestuff and dye intermediate business, there is no aggressive plan from any of the leading companies. There is no any major capacity that is coming up. In chlor alkali, there are 3 plants that are coming up here in Gujarat. So the yes, there's a joint venture between NALCO and GACL that is coming up, I think, around December. There is an expansion by Meghmani that's coming up and resulting in expansion by [indiscernible]. There are 3 plants coming up in Gujarat in chlor alkali. In sulfuric acid, there are no plants right now other than our plant at [ Saykha ] near the ridge. As far as Far East countries are concerned, there are 3 big players. One is Everlight, another one is [ Kipco ] and the third one is Olin. So they were grown in the time when India and China were competing for dye intermediates. So they were able to get a good price from China or India. But now things are different. So they are day-by-day becoming weaker than what they were performing earlier. So we don't feel that they can expand. But down the line, say, within a few years or so, we can envision that their capacity is reduced or -- which we have also feel in some of the companies like Rifa. Rifa was a big company in Korea. Initially, they were producing dyestuff, but later on because of this competition they have stopped production of dyestuff. And they are now importing dyestuff from India. So we feel that there is no possibility that they can expand, in particular, our product of dyestuff in Far East countries.

Okay. Sir, but you mentioned that there are a few capacities which are coming up in India by Meghmani and others. So how is that going to affect the demand/supply scenario?

There may be some temporary -- no pressure, but I don't think because -- I mean if you look at the last 5 years, there has always been capacities that have come up almost every year. So I don't feel that there's going to be too much of a disturbance. Plus with China's production cut, chlor alkali plants mostly are dependent on thermal coal plants, power plants. So in China, coal, being a problem, using coal to reduce the carbon is a problem. So I think chlor alkali is definitely affected big time in China at the moment. So I think that's going to -- and again, China is more than 50%-plus production of chlor alkali products in the world. So I think that is also going to help. So I think at least for 2 quarters, the chlor alkali products are supposed to be strong in terms of good prices. So I think it can be -- this phase, when the new -- 2, 3 new plants are coming, it can be diluted with the good demand. And I think with all this upcoming growth in agrochemical space, general chemicals space, specialty chemicals, pharmaceutical, chlorine and caustic, they go into all these spaces. So I think with this aggressive growth coming in India, especially in Gujarat, I think these capacities should be okay. I don't think this would affect the market too much.

Okay. And sir, also can you please elaborate as to what was the capacity utilization of our caustic soda plant for Q2 and H1, both?

So look, because the capacity is old and the technology is old, we are already in the process of upgrading the technology and also expanding the capacity. So we have some limitation right now, and the utilization as per the nameplate capacity is around 70%. But as for the current plant status, I think we're running it at 90%. And going into next year, we are targeting to increase it by around 60%, 70% more for productive number. Currently, we are going at the rate of around INR 200 crores to INR 220 crores of turnover when the prices are normal. Right now, the prices are more than double of the normal prices. And so at next year, in the normal scenario, we are expecting around INR 325 crores of turnover from that unit.

Okay. So sir, in terms of capacity utilization, can you tell me the percentages of our FY '22 as far as caustic soda is concerned?

It's around 70% for capacity.

Okay. And sir, just one last question. Sir, because of the spike which we saw in the spot price, so did the Punjab unit basically, as you had stated earlier, has it turned profitable?

Yes. So currently, it is definitely profitable. Because of the old technology, our raw material cost is very high, which is power. So -- but because of the extraordinary prices, which are almost double than maybe 3 months, 4 months back prices. So it's definitely very profitable right at the moment, and we are expecting for this ongoing quarter and the next quarter for Punjab to pay some good margins for us.

[Operator Instructions] We have the next question from the line of Saket Kapoor from Kapoor & Company.

As you were explaining the exorbitant rise in the prices of caustic soda, sir, in dollar terms, can you give some understanding what the prices were prevailing and what they currently are? And therefore, this month or the month of October, how the trends have behaved, sir? What we exited September quarter? And how is the trend as on to date or any near time?

So before this issue in terms of this power cut in China, the prices for caustic were around INR 28,000 per ton. So that is around $370 per ton. This is something of the international market. And since the power cuts in the last couple of months, the current prices are around INR 70,000. So that is around $933. So it's almost gone 2.7 to 2.8x in the span of 2 months. And like I said, 25% production is -- cut in China overall on this particular industry where the power is a raw material and majority of the plants in China are based on coal. So I think this has affected bigtime. And also, the coal prices were also very high until last week. So that also affected the caustic to go up by about almost 100%. But even at this rise in the input prices, still, the margins are very, very good.

So you said $370 to $933. This is the trajectory.

Before this power cut in China and -- versus today's price.

Right. Sir, if we take -- when we look at your presentation, first of all, [indiscernible], a well-elaborated presentation, sir. And thank you for that. When we look at your Slide 22, wherein in the manufacturing value chain, sir, if I've understood it correctly, this caustic soda is also going to be your raw material going forward as has been the SMB. So currently, sir, are we -- before this acquisition, this acquisition was aligned, but because of this captive to be vertically integrated? That was the main reason as we see in the input materials slide that caustic soda and chlorine are the raw materials for this, I think, on chemicals and not -- if I understood the flow chart correctly.

So caustic soda and chlorine are definitely a couple of the main raw materials for us. Chlorine is definitely a regional product, so we don't intend to send chlorine from Punjab to Gujarat. But caustic is a product where we can send it to our Gujarat plants and use -- create this integration model. But until now -- it's only been 6 months, and until now, we have not done that. We do have another [ ascetic ] plant in North India and UP, and we are about to start our vinyl sulfone plant there. So that unit -- for that unit, it will be captively used. So whatever the unit requires, it will be used. But for Gujarat, until now, we are comfortably selling it in the Northern Indian market. So we don't bring it here. But if there's any shortage or if there is any abnormal pricing uncertainty, we can always bring the product from Punjab to Gujarat.

When we look at the input material piechart, there are 3 elements which are in-house part of those. And there are others, the one like Sulphur, Aniline, naphthalene, PNCB, caustic soda and chlorine, and also water, these are all dependent on the external ones. So sir, how have the prices of other components of sulfur, Aniline and others have behaved? And how have those affected our margins of the basic chemicals and the value chain thereafter?

So other than chlorine and water, so sulfur, aniline, naphthalene, PNCB and caustic soda, I think everywhere, the prices have gone up by at least 50% or more. But luckily for us, we are able to pass on this whatever input to our finished good prices because our intermediate space has a direct competition with Chinese companies, which again, also has been affected. So we are able to pass on all these input increase, and we are able to -- for example, we are able to pass it on into making basic chemicals. And we are able to pass it on into making dye intermediates. So that is why the dye intermediate prices, H Acid and vinyl sulfone as the main products, they are also about 25% of our total revenue. So those 2 products, also the prices have increased. So vinyl sulphone prices are now INR 400 per kg. H Acid is around INR 600 per kg. So they have also increased with the increase in the input price.

Sir, but when we look at your revenue for September quarter and compare it with June, the escalation is in the tune of only 10%. So the benefit of the increase in your top line will be fully translated for the December quarter when there is significant change in what the revenues from operation has been because of these changes in the finished and the raw material prices?

I think there will be a substantial increase in terms of top and bottom line for the December quarter versus June or September quarter.

Right. Because when we look at your -- if you continue, you continue please.

So until about September, I think scenario was quite normal. So all the input prices -- as well as the input prices were in normal range, but in September, this all started happening. So we will have the highest effect on October and November months. And it is likely -- at the moment, I feel that it is likely to continue until about February, March. So I think it's ongoing in the next quarter. It should be much, much better in terms of top and bottom line versus the first 2 quarters of the year.

Okay, sir. And sir, if you could give me some sense why the September quarter PBT levels were lower than the June numbers, although there was an increase in the top line. But that did not come insulated with the bottom line. So if you could explain, there has been reduction in terms of...

Yes, you are correct. Our consol profit is lower when we compare to first quarter number. So this is mainly because of -- from the -- when we compare the prices of particularly sulfur and coal, that the prices were -- started increasing in second quarter, so at the initial month of second quarter the profit was a bit lower. And at the subsidiary level, SPS processors, which is a remote plant for us, and for that, we are required to do logistic cost higher compared with our Gujarat plant. So that plant, we are required to stop production because the finished good prices were lower than the cost of production for some time in the second quarter. So the initial month, particularly July, was not good for the subsidiary companies as well as Bodal. That's why this effect was there. But since -- post 15th of September, the prices have started increasing at raw material as well as finished good level. So that's why things are better, we see in the current quarter as well as we could conclude second quarter as a satisfactory quarter.

I missed the point about this SPS processor, I think so there is some amalgamation also, I will come to that later. But if you could explain once more, sir, the line got broken. That SPS processor, how is it integrated? And what was the problem due to which -- bottlenecks due to which it was not fast on, sir? I missed your point. Come again.

See, last con call, we have said that we will start production of vinyl sulphone in the second quarter itself. But because of some nonavailability from reliance on the ethylene oxide, one of the raw material for this product. So because of that, this SPS processors couldn't perform the way it has a potential once we start production for vinyl sulphone as well as H acid. And another thing is that SPS processors is a remote plant when we compare it with our other Gujarat plant. It is located in UP, and it is required to source some of the raw material from Gujarat. So it is required to pay some additional logistics cost, which has made it comparatively nonviable when we compare it with the Gujarat plant. So that's why that plant has not performed well. And because of that, as I mentioned, our consolidated Q2 number is not as good as Q1's number.

About the amalgamation, sir, can you dwell something about it? What is the rationale? And the dilution also in equity, 1% promoted and nonpromoted that -- if you could explain the rationale expand and what would that bring to the table for the company.

See, we acquired about 70% stake in this plant with the intention to set up vinyl sulphone plant at the same site because we were -- main stand-alone HSE plant is not profitable all the time. But once we have a vinyl sulphone plant along with this plant, then our economy will be better. And the reason why this is like this is some of the effluent of HSE can be consumed as a raw material in vinyl sulfone, and vice versa, some of the raw materials -- some of the effluent of vinyl sulphone can be consumed as raw material in HSE. So when we combine both this product at the single location, our overall treatment cost, which is a significant one, reduces. And now we are at the verge of starting of vinyl sulphone plant. So even if we consider prices which were prevailing a quarter before, then HSE has the potential to do about INR 100 crores turnover and addition of vinyl sulphone can add another INR 100 crores. So at the normal price, it can contribute about INR 200 crores, but the profitability, which was there in INR 100 crores would be later. But when we have both this plan, then INR 200 crores, total profitability will improve. So we can see good time for the company is going ahead. So we were considering to acquire this 30% stake. And we could finalize this with our partner, and that's why we are amalgamating this with the company. There is some nominal INR 10 crores loss in this SPS processor as well as income tax. So we'll get some benefit of tax saving also by doing this amalgamation. So overall, as you know, we are now becoming stronger as far as dyestuff is concerned. We are increasing our dyestuff production. So at that time, if we have in our -- and all this product of dye intermediate, that will further strengthen our business model.

On the -- just to conclude, on the total, the top line contribution would be to the tune of INR 300 crores. That is including both HSE and vinyl sulphone? Or are the prices are much higher to the tune of that? And so there will be no cash outgo. There's only with the shares that will be issued to the -- of the balance 30%.

Correct. So if we consider current prices, then turnover can be about INR 300 crores. But if we consider the normal time, then on also, it will be more than INR 200 crores turnover. Top line should be there from that unit.

Okay. And margin, sir?

Margin should be somewhat lower than the plant what we have in Gujarat, but it should definitely be better than 10% that we can definitely target. Even in normal time, presently, it's much better. But even if things are normal, then also we can target. And for your another question, yes, there is no cash outflow. It will be only equity swap. And going for equity swap is the reason that we have already committed for our CapEx at our new site, Saykha, the sulfuric acid and benzene downstream product,as well as upgradation of our Punjab unit. So we have already committed CapEx. So we do not want to further outflow of our cash, so that's why we are going for this.

Sir, the total CapEx, can you please mention what is the total CapEx outlined? How much has been spent? What is in the annual? And what is the time line of this completion?

We were considering about INR 670 crores of cash outflow for this both unit. And out of that, we have already spent INR 150 crores for this acquisition. And another about INR 50 crores, we have already spent from our internal accrual for both of this. About INR 200 crore of outflow, we have taken about INR 116 crores of loan -- from the loan from the bank. So at the rough first stage, we can say that another INR 425 crores to INR 450 crores of outflow will be there, and it will be in current year as well as in the next year.