Century Enka Limited ($CENTENKA)

Ladies and gentlemen, good day, and welcome to the Century Enka Limited Q4 and FY '26 Earnings Conference Call hosted by Valorem Advisors. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Purvangi Jain from Valorem Advisors. Thank you, and over to you, ma'am.

Thank you. Good afternoon, everyone, and a very warm welcome to you all. My name is Purvangi Jain from Valorem Advisors. We represent the Investor Relations of Century Enka Limited. On behalf of the company, I would like to thank you all for participating in today's earnings call for the fourth quarter and the financial year ended 2026. Before we begin, let me mention a quick cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's beliefs as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings call is purely to educate and bring awareness about the company's fundamental business and financial period under review. Now let me introduce you to the management participating with us in today's earnings call and hand it over to them for their opening remarks. We have with us Mr. Suresh Sodani, Managing Director; and Mr. Yogesh Shah, Chief Financial Officer. Without any delay, I request Mr. Suresh Sodani to start with his opening remarks. Thank you, and over to you, sir.

Thank you, Purvangi. Good afternoon, everyone, and welcome to our earnings conference call for fourth quarter and financial year ended 2026. I would like to thank our host, Valorem Advisors, for hosting this call. Now let me first brief you on the operational highlights for the quarter under review. We are pleased to report a strong financial quarter marked by healthy growth across revenue and profits, supported by higher sales volume and effective pass-through of raw material cost increases, which together contributed to improved operating margins during the quarter. In our Tyre Cord business, demand remained robust during the quarter, supported by healthy traction across the tractor and 2-wheeler segments, along with continued demand from truck and bus category. The reduction in GST rates on tyres and automobiles also supported demand momentum across the industry. As I mentioned, the sharp increase in raw material prices following the Iran was effectively passed through by transparent discussions with our customers. Importantly, despite the Iran war, we did not witness any production cuts supported by strong relationship with our regular suppliers. Due to continuously changing geopolitical situations, elevated crude oil prices and persistent inflation, we continue to remain cautiously optimistic about demand growth in coming quarters. Meanwhile, NTCF approval process moved to the next stage with commercial sales expected from FY '27. In the Filament Yarn segment, sales volume remained robust during the quarter, accompanied by a healthy reduction in finished goods inventory. The sharp rise in raw material prices following the Iran conflict enabled us to implement price increases across all product lines. Consumption of older, lower-priced raw materials, along with favorable stock valuation further strengthened our margins. New mother yarn project and value-added products continue to support margin improvement. While Chinese import at very low prices persist in commodity products, we are encouraged that the DGTR has issued a favorable antidumping ruling. We now await final notification from Finance Ministry. On the raw material front, Caprolactam chip prices rose sharply in March following the Iran conflict. However, renewable energy of our Bharuch plant has helped in controlling power costs with additional capacity expected to be commissioned in FY '27, further reducing the cost. We continue to maintain a strong focus on efficiency improvement. I now request our CFO, Mr. Yogesh Shah to brief you on financial performance.

Thank you, and good afternoon, everyone. Let me now brief you on the financial results for the fourth quarter and the financial year 2026. For the quarter under review, operating revenue stood at INR 484 crores, registering a growth of 9% year-on-year and a strong sequential growth of 17% quarter-on-quarter. EBITDA for the quarter stood at INR 55 crores, reflecting a sharp increase of 530% year-on-year and a robust growth of 36% quarter-on-quarter. EBITDA margin improved significantly to 11.46%, representing an expansion of 948 basis points year-on-year and 153 basis points quarter-on-quarter. Profit after tax for the quarter stood at around INR 39 crores, registering a substantial growth of 479% year-on-year and 66% quarter-on-quarter. PAT margin improved meaningfully to 8.15%, reflecting an expansion of 662 basis points year-on-year, 239 basis points quarter-on-quarter. Total volume for the quarter grew strongly by 14% year-on-year to 2,711 metric tons. Within this, Reinforcement sales increased significantly by 21% to INR 245 crores, while Filament Yarn sales reported a growth of 3% to INR 229 crores. For the financial year 2026, operating revenue stood at INR 1,705 crores, reflecting a decline of 15% year-on-year. EBITDA for the year stood at INR 148 crores, registering a healthy growth of 29% year-on-year with EBITDA margin improving significantly to 8.67%, reflecting an expansion of 294 basis points. Net profit for the year stood at INR 101 crores, recording a strong growth -- recording a strong growth of 52% year-on-year, while PAT margin improved to 5.91% representing an expansion of 259 basis points. Total volume for the year stood at 73,692 metric tons, reflecting a de-growth of 6% year-on-year. Within this, reinforcement sales stood at INR 816 crores, registering a declining of 15% year-on-year, while Filament Yarn sales were reported at INR 828 crores, reflecting a decrease of 14% year-on-year. With this, we open the floor for questions and answers.

[Operator Instructions] We will take the first question from the line of Krishna Modi from Pinterest Capital.

Firstly, sir, congratulations on a good set of numbers. And so my question was regarding the PTCF scale-up and the renewable energy expansion, which are both due in FY '27. So I wanted to understand what is the total CapEx budget for FY '27 and FY '28?

So I understand you're asking for the CapEx budget, is it? Is it right?

Yes, for the CapEx budget of the both renewable energy expansion as well as the PTCF scale up that we are planning.

So renewable energy, we participate through a third-party captive arrangement -- group captive arrangement. We contribute only to 26% of the equity of the project. So that amount is very small. It will be less than under INR 10 crores in total, depending on the total breakup between capital equity and the debt for the project. So that is the model that we had used earlier, and that would continue for the expansion for the second hybrid project also. As far as other projects are concerned, we are expecting a total CapEx outlay of about over INR 100 crores, primarily going into value-added products, expansion of mother yarn project capacity and also for various reduction of our power consumption as well as reduction of waste for improvement of our operating margins and efficiency. We are also spending a significant amount in improving our fire-related risk post our fire risk at Bharuch because these are old plants. So based on the external fire audits, we have taken up a good amount of budget to do some reconfiguration of our machineries to reduce the risk of fire, particularly in the old, lay out plants.

Okay. Got it. So with respect to that, currently, what is our capital deployed in this project?

So in the Phase 1, we had spent about INR 8.5 crores as our equity contribution to the hybrid project, which on total was about 16 megawatts in installed capacity, about 15 megawatts. And we, on an average, get about 6 to 7 megawatts per year depending on the weather and other conditions. And this will be in the similar lines for the Phase 2 as well.

Okay. And when are we expecting this number to be reflected...

So in the second half, H2 of FY '27, we expect this to commission because progress has already started in terms of ordering of the equipment and acquisition of land and other project-related activities. So we expect it to start in H2, most likely in quarter 3.

Okay. Got it. And is there any better margin expectations that we are guiding for H2 then?

We do not give any forward-looking statements in terms of margins or business results. But yes, it will definitely reduce our power rates -- but since there are so many variables, including the demand and geopolitical situation, anyway, it has become more a quarter-on-quarter kind of forecast or I mean, planning because the entire situation has become extremely volatile because of more external factors, which are mostly out of our control.

We will take the next question from the line of Jiten Parmar from Aurum Capital.

Congratulations on a good set of numbers. So my first question is, can you break that up the EBITDA margins? How much of it is due to inventory gains and how much of it is due to -- so if you can quantify that a bit?

We'll not be able to give that breakup because of competitive reasons. But the reason for mentioning that is that our focus is always on reducing inventory in terms of -- in highly volatile situation, particularly in NFI segment where the prices correct more on the spot prices of raw materials. So the purpose of highlighting that is that since we are in a situation where the prices significantly went up in March, we have taken conscious calls and efforts to reduce the inventory.

Okay. So you mentioned this INR 100 crores CapEx. Now that is for FY '27 or is for -- what is the period for this CapEx?

FY '27. We intend to spend that in over FY '27.

Okay. Okay. And we have significant balance basically in investments, about more than INR 400 crores. Now if the CapEx is only INR 100 crores, has the Board thought about doing something with that cash basically maybe by buyback or you enhance dividend. Dividend I saw is only -- it's less than 25% of the earnings. So have we thought of other ways of basically enhancing shareholder value?

So I mean, the discussions at the Board are mainly at growth, and we intend to utilize this cash for growth of the business in current and possibly also into the new segments. It could be within textiles or otherwise also, but it is being evaluated as such. So as and when any project of large CapEx is evaluated and gets passed at the Board level, then we will revert to that. But the discussion is more towards adding -- one is to make the business model more sustainable by reducing our costs and making investments which are long term, both in terms of our, for example, purchase of power or reducing our own power consumptions, improving our safety, but also looking at new product lines, which are either in line with our technical textiles current reinforcement portfolio -- so I mean, this point has come up multiple times regarding the buyback, and it has been duly conveyed both at -- after the investor call as well as during the AGM and Board in its own I mean, we will take a decision based on the merits and other matters. But the discussion is on growth and how to make the company sustainable even under adverse external circumstances.

Okay. So my final question is, so it's good to note that company is thinking on growth. That is always good for shareholders, too. Now so we have a CapEx outlay for INR 100 crores for FY '27. Have we thought beyond that? I mean, is there any plans which have kind of are on the drawing table or crystallized for, let's say, FY '28 and onwards?

Yes. So these are all being evaluated. As I said, we can share only what is approved by the Board. And yes, that is being evaluated, it is being discussed. And we see opportunities in certain segments where we can grow and also change the profile of the company from the current segment. So it is being evaluated, being discussed. But once it is completely cleared by the Board, we will definitely share it with -- through the stock exchange as well as in the investor calls.

We will take the next question from the line of Vipulkumar Shah from Sumangal Investments.

Congratulations for a good set of numbers. So the result of this quarter was mainly due to our old inventory of raw material of caprolactam and this quarter results are likely to be adversely affected due to rise in caprolactam prices. So what is your comment on that, sir?

So actually, if you look at the volumes, sales volume compared to even quarter 3, where our performance has improved, the quarter 4 volume, sales volume are significantly higher. So sales volume is one of the main driver of the better performance in this quarter, which has been aided by some consumption of old price raw materials. But without the volume growth, we would not have been able to encash even these possibilities of encashing the low cost and the higher prices in our sales prices. So I think it is mainly due to the higher volumes and duly aided by some low-cost consumption of raw materials.

No. But those low-cost raw material consumption must have exhausted and now you must have started using higher price inventory. So...

That will happen.

So margin will be under pressure in this quarter? I'm not asking for numbers. I'm asking for a directional view, sir.

See, I mean, we have been normally talking of an operating margin of about 6% to 8%. But given our focus on reducing cost and also reducing our power rates through hybrid power and renewable power, we now feel that depending on the external scenarios and demand, our operating margin could be in the range of 7% to 10%. We are -- we cannot give a specific number for any quarter. But we have actually -- we feel that we have improved our chances of improving the operating margins from what we used to convey in our earlier earnings call.

So you mean to say delta for operating margin has moved higher if all other things remain constant, sir?

Yes. It should help us, in fact, in a more normalized scenario, it should help the company to generate better margins.

And what type of power cost reduction we should expect once all these renewable energy projects are coming on stream?

I can give you an estimate of our current -- for the FY '26, our renewable content on the total power consumption was about 36%. Post our increase, I mean, the commissioning of additional renewable power, it should go up to about 48% -- so that gain would start reflecting. I cannot give it in terms of value, but I think that would give a good estimate that it will increase by almost 12% -- I mean, percentage it is much higher, but 12% of the total power consumption.

We will take the next question from the line of Maitri Shah from Sapphire Capital.

Sorry for the basic questions, are new to the company. So currently, we are working in the nylon yarn and the NTCF vertical. Is that correct?

Yes. And also we have entering -- made an entry into the polyester segment through polyester tyre cord fabric, which is under approval. And we also sell polyester industrial yarn to certain segments using the polyester industrial yarn.

And when do you expect the facility of PTCF to be operational in FY '27? And also, if you could guide me with the CapEx of this facility and the capacity that we are adding in this facility?

This is already operational. So we are currently manufacturing and selling polyester industrial yarn. But the main purpose of putting up this facility was to manufacture polyester tyre cord fabric. And since it's a new product and also goes into passenger car tyres, it goes through a rigorous and long approval process by the tyre companies. So we have moved ahead on that process, and we have made progress during the last quarter. We are hopeful that the commercial sales would start in FY '27, most likely in second half of FY '27. We have spent close to INR 100 crores on this project, and this was commissioned about 2.5, 2 years back, where the process of getting the products and other things has already started. And FY '27 is when we expect that the commercial sales should start.

Okay. And with the capacity, how do you see the scale-up kind of happening? So these approval processes are different for different OEMs? Or are we just a bit of color on how we are getting the orders on this side.

So the capacity is about 4 kt per annum. And currently, we utilize to almost 75% to 80% based on the demand from the industrial yarn segment. This also -- industrial yarn segment was impacted by the QCO order. There was a quality control order on polyester, which was removed during the year. So that has some impact on the volumes. But as I said, the main purpose is to manufacture one, the polyester tyre cord fabric and evaluate opportunities of other technical textiles that we can get into, which use polyester as a raw material.

Okay. And this facility, these products will be higher in value and with better margins coming in. And you also alluded to you are adding more capacity in the mother yarn and more value-added products. So going forward, any sort of targets you have on the revenue growth side and also how you see the margins kind of scaling up like a medium-term target 2 to 3 years down the line?

We -- since we do not give any forward-looking statements, I cannot comment on the top line growth. But as I mentioned in the earlier question, we expect the margin range depending on other variables of demand, external conditions and other things to be in the range of 7% to 10% operating margin.

Okay. And what sort of volumes if you could mention you're targeting for FY '27?

We would ideally want to have repeat our Q4 plus volumes, but this is all dependent on so many external factors. But the focus is to keep on utilizing maximum capacities and that also improves our margin because it helps in better spreading of our fixed costs.

And these capacities are fungible, so your value-added products and the non-value-added products can be kind of utilize the same capacity? Or do we have a specific capacity for just the value-added products? And if you could help me out with the utilization over there?

No. Actually, when we say value-added products, actually, this is adding value to our commodity products, which face significant competition mainly from China imports. So actually, I mean, obviously, they are fungible that if we do not get additional revenue, additional contribution over the additional cost that we spend on converting the commodity products. So we can -- we have an option not to make the value-added product, and we can continue to sell the commodity product. But our experience is that normally, these value-added products have less volatility, less competition from imports. And these are more specific to the customer requirement. So normally, I mean, almost -- most of the time, our margins on value-added product is better. So we expect and we would continue to invest and convert almost entirely the commodity products that we sell in the market and get into more value-added products and also products which give a distinct benefit to the customer. So, ultimately, if the customer is able to realize value for his, I mean, fabric or finished products, that translates to better margin and better volumes for these products. So that is working very closely with the customer. We operated at about 80% for the year in terms of capacity utilization. In the quarter 4, it was about 85%.

And could you help me with what percentage of sales currently is coming from your value-added products? And how much the margin differential you have over the commodity products when you kind of sell the value-added products?

Since we report all -- I mean, in the single segment, I will not be able to give volumes. But on an average, about 20% additional margin we realize over the -- after the additional cost that we do in converting this into value-added products.

We'll take the next follow-up question from the line of Vipulkumar Shah from Sumangal Investments.

Where are we in this journey for polyester tyre cord certification?

Approval certificate -- are you asking approval or...

Yes, yes, approval. Yes.

There are 4 stages which -- I mean, 3 or 4 stages before the commercial approval, we have moved to the Stage 2. And what the tyre companies do is that once they give a clearance to the base product, then they take products and make tyres out of it. Those tyres are tested over a period and multiple test goes on. So those -- that process has already started. So the next would be to take it to a larger volume of supply before the commercial supply, convert it into more tyres. And again, the tyres would be tested through multiple tests that the tyre companies do. And thereafter, it will move to a commercial sales.

So out of 92,000 tonnes capacity, what is the capacity for this polyester tyre cord, sir? And do polyester tyre cord has higher margins as compared to our commodity products?

So as I mentioned, our current capacity is about 4 kt, 4,000 tonnes per annum.

Only 4,000.

Yes, yes. We just entered into this segment about 2.5 years back, 3 years back, you can say. We are just -- because we were only into nylon and the usage of polyester and nylon are different. Nylon basically goes into tractor, 2- and 3-wheelers and partially into truck and bus segment, whereas polyester mainly goes into the passenger car tyres. And passenger car tyre segments, that's the reason that it is also taking a larger time is because the safety protocols and the approval process are even more stringent compared to other tyres. So that -- and margins are expected to be similar. But the purpose of getting into it is because the passenger car, you have seen that vehicle sales, 4-wheelers, personal vehicles are growing. And with the growing middle class, we expect that the demand for passenger cars and passenger-related products like passenger tyres would grow and which would translate into higher growth for the reinforcements for the passenger car.

And sir, out of the CapEx of INR 100 crores for FY '27, what portion would be allocated towards renewable power? And what should be used for capacity expansion? And what would be the capacity after this INR 100 crore CapEx?

So capacity would go up by about 2 Kt on the -- about 2.5 Kt, you can say, for the project that would get commissioned. Others are mostly adding value. So the capacity will not go up, but the value addition will go up. And then there is investments in reducing our consumptions, power consumption, power rate, safety. So all that would not add to the capacity, but would add to operational gains as well as efficiency improvements and reducing our cost of production.

So the ballpark figure, which you gave, 7% to 10% margin is after all these initiatives are taken into consideration, right?

Yes, yes. So they will not come from day 1. So part of them would get translated into Q3 and Q4. And based on success of other things, we are expecting, it should -- by end of this year, we should be able to -- I mean, end of FY '27, our margins should improve based on the initiatives that we are taking on reducing our costs.

And sir, last question, when we are sitting on so much cash, means why we are not going ahead with a major expansion? Is market not large enough to absorb the expanded capacity? So what is the rationale behind it?

No. See, these are more technical products. And as I said, we made an investment in polyester tyre cord, and it has taken 3 years to get into a stage where we expect commercial sales. So we have to evaluate projects which, first of all, have growth potential in India. Second, are effectively able to compete against imports from China. And third, I have growth potential for looking at the India growth story. So we are evaluating projects and we could -- I mean, once it goes through a process of internal evaluation and approval and approval of the Board, we could come up with either during the year or maybe later part, I mean, somewhere later on with some larger projects, but these are still at an evaluation stage.

So last question. Out of our volume of 73,692 tonnes, what should be the commodity volume and what should be the value-added products?

I mean when we say commodity products, basically, they are in the nylon filament yarn segment. And that would constitute a very small -- I mean, about maybe 20% to 25%. Let me just -- one second. So around maybe 15% to 20%.

Rest all is value-added products, right, sir?

See, when we say the tyre cord fabric, that's already -- it's a highly technical product. So when we say commodity product where the competition intensity is high, that we classify as a commodity product. Where the competition intensity is low and margins are better, we treat them as a value-added product. So that's the kind of internal definition we follow. And that's when I'm saying this 15% to 20%, that's the volume which is vulnerable to imports as well as lower margins.

We will take the next question from the line of Amit Kumar from Determined.

I hope you can hear me. So just one bookkeeping question to begin with this polyester industrial yarn that you sell, which bucket does this revenue get booked in? Part of the yarn segment?

It goes under the yarn. -- yarns are all yarns. We don't differentiate now since we are making both nylon and polyester. All kinds of yarn go in the yarn sales value that we reflect and reinforcement means where it goes as a reinforcement in the fabric form.

Okay. See, the only reason which I'm asking is that while your reinforcement segment has seen a pretty sharp jump in revenue, but your yarn segment has been fairly flattish on a Y-o-Y basis revenue, I'm saying. And obviously, I mean, raw material prices there would have also sort of gone up. So this price hike that we have seen is principally in the reinforcement segment and not so much in the yarn segment?

No, no. It has been in both the segments. Sometimes what happens is the order position that is on both because this happened in more towards in the middle of March, and it is not I mean it continues in -- so it could have a -- I mean, in some cases, the reflection would come early and in other cases. So I think it is more to do with the timing of what is on the books at what orders have been booked and because whatever we have booked at rates before we increase the prices, that we have to honor and we have honored always we do that. And so that part would more reflect -- only partially it would have reflected in one segment and in more quantities in the other segment.

So would it be -- just to sort of clarify, it would be fair to say that prices would have sort of continued to increase going into 1Q as well? Actually, both raw material as well as finished product prices, the new...

It is still very volatile.

Would be on higher side...

Yes. So it is still very volatile. Yes, it significantly jumped by end of March because there was a complete lack of clarity on availability of material. I think that became a kind of a panic thing whether the raw materials would be available at the entire value chain. So everybody had a panic whether for us also, it was there whether we could continue with our production or there would be a disruption. Similarly, it happened to the -- our customers and similarly to the raw materials for our suppliers. So the entire value chain was under a kind of uncertainty when we closed this month.

Sir, I understand that. What I'm basically trying to understand is the present situation. So obviously, now you're basically saying that the availability of material is not an issue anymore. That question is settled raw material is basically flowing through to you and I presume to other companies as well, hopefully. But there is still a pricing question that raw material prices have gone up quite a lot. You had -- for some time, you had low price inventory, but now I presume you would not have. So the question is that have the end product prices also sort of reflected the higher raw material prices in April, May?

Yes. As I mentioned, we have been able to pass through the increases. And where -- I mean, very rarely where we thought that either the segment or the customer is not able to pass, we have said that we are not able to produce for them because that kind of sudden increases cannot be absorbed in our books. So the pass-through to a large extent -- which started in March has continued based on the pricing of raw materials, which prevailed in the -- up to, I mean, April and May.

We will take the next question from the line of Chandresh Malpani from Niveshaay.

Sir, first question is on the PTCF market size, if you can help us understand the size of the market in metric tons?

So I mean, there is no absolutely, I would to say, authentic number. But in our estimate, the market size is close to 25 kt. And most of it, almost 80% to 85% -- 80% of it is imported.

Okay. And sir, second question is on the volume growth for the quarter because you have mentioned in your remarks as well that due to GST rate cuts, there was a good demand for the replacement side. So maybe this quarter would have shown some volume growth on that side? And how are you seeing this trend of GST rate cut? I guess, this could moderate, right?

Actually, GST cut came in middle of Q3, and we immediately saw -- if you see the Q3 numbers also improved compared to Q2 mainly because of the growth and good traction mainly from the tyre demand -- tyre side. So that fully played out in Q4 and even before the Iran war and even in March since we did not have to cut production, the traction and demand post GST cut continued. And as I mentioned, the mainly the growth driver, the outliers were tractor segment and the 2- and 3-wheelers. And tractor segment was on back of a very good monsoon in last year, so which gave -- if you have seen the tractor sales numbers, they were at all-time high in FY '26, in terms of both OEMs and I mean, even exports. So that, I think, was a key driver. Even the 2-wheeler sales crossed the pre-COVID level retail sales volume. And there was -- so now going forward, we expect that it could be slightly -- the growth may not be to the same extent. But one of the key -- I mean, variable or something which we are keeping track of is how does the monsoon and the crops come out in terms of its impact on Indian GDP because that will be a key for this demand to continue in these two segments because both of them, whether it was 2-wheelers or tractor was again driven from the rural demand. And rural growth is the key to continue on that. Other factors being since our segment -- I mean, one of the large consumption also goes in the truck and bus, overall volume growth continues in terms of capacity expansions of the other industries and the truck demand continues to be good. It could have some compensation for lower demand in the other segments.

Okay. Okay. Got it. And sir, last question is on the -- when you mentioned about the nylon filament yarn antidumping duty part. So you also mentioned that your segment is not quite affected because we are in value-added side. But let's say, other duty comes in. So how much favorable that thing would be for us on the realizations maybe? And secondly, if you can also highlight what would be the quantum of imports that would go down?

Currently, on an aggregate basis, about between 20% to 25% of domestic demand is being met from imports, and the imports are mainly from China. The antidumping duty once it comes, I mean, we are hopeful that Finance Ministry would notify it. It would have an impact on the sentiments and the pricing of the entire -- all the products in NFI. So since, as I mentioned earlier, we actually convert our own base products or the commodity products to value-added products. So when the base product goes up, the value-added product prices also go up, and that would have a favorable impact on our financials and I mean, financials for the domestic industry overall. And I'm not able to quantify that because first of all, it is not still to be notified, and we don't know how China or any other country would react to that post, if at all -- I mean, if it gets implemented and notified, what kind of imports reduce or what kind of price changes happen post the notification of antidumping duty.

Okay. But let's say, the FOB value as of like before the duty scenario and current domestic, what would be the differential in percentage, if you can put it out?

So what has come out as a notification talks of between -- about $0.70 to -- I mean, depending on the product and the country, it is varying from -- about $0.20 to $0.80. So it will have a multiple -- I mean -- so it is fair to assume that it's about between 10% to 30% of current FOB value, and that could be the impact on the prices.

We will take the next follow-up question from the line of Jiten Parmar from Aurum Capital.

So my question is, what is exports as a percentage of our revenue? And subsequent to this, how much of our raw material is imported? The reason I'm asking this question is basically that there has been a devaluation of the rupee against the yuan by 20% and by the dollar -- and for the dollar by 10% in the last 1 year. So I want to gauge whether we are a beneficiary or we are negatively impacted.

I mean it is difficult to give that whether we are beneficiary or otherwise because both the raw materials and the finished good prices correct to the exchange rates. It is only sometimes the timing difference. So both are -- because whether it is nylon tyre cord fabric or yarn, the pricing has -- the imported imports of either the finished goods or raw material has an impact on the finished good pricing. So it's difficult to say whether it is positive or not, but weakening of rupee against dollar and slight strengthening of yuan against dollar actually should be favorable because it makes the Chinese imports into India, particularly the value the finished goods more costlier. We also import major majority of our raw materials from China. I mean, also from other countries, but China is one of the major supplier of the raw materials. We also get our raw material from one of the domestic suppliers. But again, it is pegged with the exchange rate. So that anyway gets captured in the cost of both raw materials and the finished goods.

Yes. So if you can answer how much is the percentage of exports out of the total revenue?

That's about 4% to 5% is our exports. And -- but we are focusing on increasing our exports, particularly of the value-added filament yarn.

Okay. Okay. And one thing I want to talk about from the risk perspective, one of the risks I see is basically radialization. How does that affect us? Because that would affect basically our NTCF demand? Or how much -- can you throw some color on it basically?

So radialization has moved to a close -- I mean, as per reports from ATMA is about 60% is now -- has moved to 60% of the total demand in truck and bus segment. Radialization impacts only the truck and bus segment. It does not impact the tractor or the 2-wheeler segment because -- there it is still -- nylon is the reinforcement. So -- and it has not been increasing at the rate it used to be about maybe 4 years back, it was -- about 4 to 5 years back, it was 55. It moved to sharply to 58% about 2 to 3 years back. And now it has -- the increase -- the radialization percentage increase is now not that sharp. Second, so we are not seeing a significant rise in the percentage of radialization of truck and bus segment. Second, since the tractor and the 2-wheeler segments are growing, what we have seen in the previous year when the volumes were also high and there would be -- so that is expected to cover up if any radialization reduces the demand from the -- for the nylon as a reinforcement. So we expect -- what radialization has done is that the overall growth of nylon as a reinforcement in the tyre segment is not growing significantly. We expect only marginal growth of maximum 1% to 2%. But we also do not expect a significant fall now since it is now reaching a level where normally it is more stabilized.

We will take the next follow-up question from the line of Vipulkumar Shah from Sumangal Investments.

Just one clarification, sir. You said 15% to 20% of our volume is commodity. But when I see your Slide #6, your yarn segment and Reinforcement segment revenue are almost matching. So in yarn segment also, we have 2 type of products. One is value-added and one is commodity?

I said it is only in the yarn segment. We do not consider our reinforcement as commodity because these are technical products. The entry barrier is very high in getting into these products.

No, no. So your yarn segment is -- this sales is INR 8,280 million and reinforcement is INR 8,162 million. So it is almost matching 50-50, whereas you said that commodity part of the business is 15% to 20%. So what I am missing here, sir?

No, no. So 15% to 20% of the total is the commodity business, which is only housed in the yarn segment.

So in the yarn segment also, we have 2 type of products. One is commodity and one is specialty?

Correct.

Thank you very much, ladies and gentlemen, we'll take that as the last question. I now hand the conference back to the management for the closing comments. Thank you, and over to you, sir.

Thank you, everyone, for joining our earnings call. I hope we were able to give the answer to your queries, and I hope those were to your satisfaction. If you have any further questions or would like to know more about the company, please reach out to our Investor Relations Manager at Valorem Advisors. Thank you.

Thank you, members of the management. On behalf of Valorem Advisors, we conclude this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.