Chaman Lal Setia Exports Ltd. (530307) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Q4 and FY '24 Earnings Conference Call of Chaman Lal Setia Exports Ltd. hosted by Arihant Capital Markets Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Anushka Chitnis from Arihant Capital. Thank you, and over to you.

Thank you. Good morning, everyone, and welcome to the Q4 and FY '24 Earnings Conference Call of Chaman Lal Setia Exports. Today from the management, we have Ms. Shweta Setia, the Executive Director; Mr. Ankit Setia, the Executive Director; and Mr. Rajeev Setia, the Joint Managing Director and CFO. Now without further ado, Shweta madam, I'll hand the conference call over to you.

Good morning, and a warm welcome to all of you in the earnings conference call of Chaman Lal Setia Exports Ltd., where we'll discuss the business and financial performance for quarter 4 and the full year of financial year 2024. With me today is Mr. Rajeev Setia, our Joint Managing Director and CFO; and Mr. Ankit Setia, the Executive Director. Before we begin, I would like to remind everyone that this call may contain forward-looking statements, which are predictions, projections or other estimates of the future events. These statements are based on management's current expectations and involve risks and uncertainties that could cause actual results to differ materially. We hope you have had a chance to review the earnings presentation on stock exchange websites. Fiscal 2024 was marked by repeated business disruptions throughout the year for the industry. Quarter 1 was impacted by cyclones in Gujarat affecting our export further. Following which, in August 2023, the Ministry of Commerce imposed restrictions on Basmati rice exports below USD 1,200 per ton, which impacted few of our shipments of par-boiled rice during September-October 2023. Though it was subsequently relaxed to USD 950 per ton. And finally, the unfortunate conflict in the Red Sea, which has impacted most to the trade routes for exports to U.S.A., Europe, Canada and few regions of the Middle East, leading to a significant increase in transit time from 15-30 days to over 30-60 days for most of our export shipments in Feb-March 2024. Despite all these hurdles, we have been able to maintain a stable revenue of INR 1,356 crores in financial year '24. Notably, quarter 4 financial year '24 revenue rose by 7% year-on-year to INR 384 crores, driven by increased penetration in APAC, Middle East and Africa. Our team actively participated in global food exhibitions like Gulfood in Dubai, which is amongst the best food exhibition across the world. WorldFood Istanbul, AgroExpo Uzbekistan and Indus Food, and currently THAIFEX Thailand. Our team is currently there, where Mr. Vijay Setia, the Chairman of the company; and Mr. Sankesh Setia are already there and traveling globally to meet new as well as our existing customers. Our export volumes, excluding China, grew by a modest 4% during the year to 1.3 lakh metric tons with Asia Pacific, Middle East and Africa contributing over 80%. I would also like to draw your attention to the fact that in other regions, notably in Americas and Europe, our share has almost doubled during this period. The year has also seen a significant growth in sales of our proprietary brand growing by 46% in financial year 2024, contributing to about 10% of overall top line. Our value-added business, including rice suitable for diabetes and brown rice has also gained strong consumer acceptance and double revenues, although the share remains modest at the moment. Our domestic business continues to grow steadily, contributing 11% of revenues during the fiscal. I'm pleased to announce that we achieved our highest-ever yearly operating profit during financial year 2024 despite all the hurdles. Our EBITDA reached INR 162 crores, and margins expanded by 49 bps to 11.9% compared to 11.5% in the previous year. Quarter 4 EBITDA margins were, however, impacted by the significant increase in other expenses, which primarily comprised of freight costs owing to the Red Sea supply chain disruptions. Overall freight costs for most of the routes have grown by more than 3x during the month of Feb-March 2024. The multifold rise in freight costs within a short timeframe has posed a challenge for industry participants to entirely pass on the impact to its customers, particularly because much of our inventory is committed to existing orders. However, over the last 1 month over -- we are observing the stabilization in freight costs and simultaneously, we have largely succeeded in passing on impact to our customers, mirroring a trend we witnessed during the COVID era. Our net profit for the year were INR 116 crores. I'm also pleased to tell you that your company has decided to increase dividend payout this year. Traditionally, we have distributed around 4% to 5% of our annual profits as dividend. Starting this year, we propose to almost double it to 10% to INR 2.25 per share and also ensure that we reward our shareholders with 10% to 15% payout in the years ahead. At Chaman Lal Setia, a strategic focus on profitable growth and secure cash flows, whereas to avoid high-risk territories like Iran and limit exposures in Iraq. Despite industry growth in regions like Iraq, we are consciously not developed in the market in these regions, resulting in relatively lesser volume. However, as a result of this business strategy, we had a healthy and efficient balance sheet for all these years, which continued in financial year 2024, as well as despite a challenging business momentum. Our inventory which stands at INR 499 crores as on March end and comprises majority of our working capital is largely order booked. Our net debt, which stood at INR 108 crores as on March end is already fully repaid as on the today's date, and we believe our cash flows to be significantly positive during quarter 1 and quarter 2 of this fiscal as we liquidate our inventory. Our return indicators continue to stand robust with ROCE at 19% and ROE of 17% for financial year '24. As we move forward with impact of trade route disruptions expected to normalize in the months ahead, we believe both our revenues as well as profitability should rebound and we remain confident of our delivering good performance in the quarters to come. With our robust on-ground execution capability, strong customer relations and increasing distribution reach, we believe we are well-positioned to achieve sustainable growth in the medium to the long term. With this, I would like to open the floor to the question and answers. Thank you.

[Operator Instructions] We have a question from the line of [ Ravi ], an individual investor. [Operator Instructions]

Yes, all right. Sir, my question is in the investor presentation, Slide #6, the Indian basmati rice exports have grown by about 25% FY '23 to '24. But whereas come to Slide #7 and our company has grown only by about 4%, 5%, 125 to 130 metric tons or whatever. So my question is while the industry seems to be performing very well, our company seems not up to the mark. Is there any particular reason that you want to state? Yes, that's the one question that I had.

I'm Rajeev Setia. I'll be answering your question. Most of our industry people are working in Iran and Iraq. And though there are many unlisted companies and they have very huge exposures with these countries, which are not being paid to them -- I mean they have to ship more to -- it's kind of a revolving going on, and they have held their money. And the company, maybe the principle not to sell to Iran right after when this INR systems have started through UCO Bank, we did 2 shipments, and after that, we stopped business in Iran. And we are -- that's why you see the company is doing well. Even in the Iraq market, even that is almost parallel to them. Again, they are buying on DA basis and then hardly any profitabilities. You have to work with the volumes only nothing more. So we desist from these kind of markets where we can be in a trap. And we work -- now we are in 94 countries as the spread reach multiple buyer. And we -- because I believe the true marker of any business is the profitability, pay to your vendors timely. I make payment in 3 days, 4 days and get 2% discount. And every single year, I adjust account, I make the company debt-free. These are the policies that we don't care if the country's export is going up and going down. Country's export is going up, companies have vanished. So we have sustainability of the business and continued growth and firm growth is the principle. I think I have answered.

We have our next question from the line of Chirag Shah from White Pine. [Operator Instructions]

Yes. Sir, my first question is, so how should we look at your margins? Because in this quarter specially, it has been affected by freight cost, and it is kind of among the lowest in the history as we look at, we have been doing similar margins in the past. So we are kind of lowest in the history. So from here on, how should we look at the improvement? Because freight costs are still where they are, right? They have not started coming down.

I'm Rajeev Setia, I will continue to answer. And Ankit will also -- he may be joining me along with my answers to correct me truly speaking. You see, the -- you are talking about a fall in revenue and volumes also, the volumes are, I think, better. Let's look at the geopolitical situation. The ocean freight, which was $500, $600 has gone up to $4,000 suddenly, not small. And all these countries, entire Europe is affected because all shipment go through Red Sea. And Israel is our one of the biggest importer, and that has also been interrupted because of this. But it's -- all rice is going across Cape Town, Africa. So this is not small things, the world is in trouble. And we are mainly into export, our 90% is exports. We are not in the domestic market the way -- but it's our endeavor, we have to increase, we are trying to do it. But never ever at the cost of losing money, that's the company's principle. This is how we work. These are the temporary things, let's hope the situation improves. And now you see that our customers have also started factoring the cost, whatever the ocean freights have gone up. If they come down in the future, that will be much better; otherwise, they will be absorbed. So these things -- despite all these things, the company is making profit, company is debt-free, that's the achievement here. Thank you.

No, my question was, sir, so you are saying unless the freights come down, our margins will stay in this 7%, 8% range as compared to 12%, 13% that we were operating.

No, no. I said the margins may -- this ocean freight may come or may not come down also, we don't know how long they will keep on the high spree, but because they have been factored by us as well as our buyer. Because if anything goes up, ultimately, it has to be factored within the price as a buyer, as a seller. But this geo -- these wars and all these things are very, very dangerous part. We have to -- we had to stop our shipments for almost fortnight. I mean, we were scared to ship to this part and we slow down and then when we realized everything is normal, then we shipped. So these kind of total helpless and I mean it's nothing to do with our confidence. And our competitors to compare, most of the people are in domestic market and here we realize we have to go for domestic business some part. My teams are running around that -- from that day onwards, our teams are running in all India to find good distributor and resume local marketing.

Chirag-ji?

Ankit, you please continue.

Chirag-ji, my voice audible?

Yes, yes, audible.

Okay. You are comparing quarter-on-quarter, you can look at the full year versus full year, there is improvement in terms of profitability.

No, that I have seen. But if you look at...

Coming back to the quarter, see, what has happened is the freights have gone up, number one, in this particular quarter, right? Even the inland haulage part has gone up.

Yes, yes, I'm listening, hello?

So what I'm trying to tell you is that, see, there are 2, 3 important things which have happened in this quarter. Number one, inland haulage has gone up. Because of the Red Sea issues, instead of sending cargo directly to the port, we started using, I mean, in-house staffing because of which inland haulage has gone up. This is one reason. Second reason, the freights also have gone up. So for example, 9-month ending freight, what was total paid, let's say, INR 10 crores. And in the last quarter, again, INR 10 crores was paid. So you can see yourself how much freight has gone by, the ocean freight. And the third factor, I would say that when you are closing your balance sheet, you're taking your -- the value of your stock, you either take your cost price or you take your net realizable value, whichever is lower. So Chaman Lal Setia has taken its cost price. And if you compare it with the industry, I think we've taken it at the lowest level. So future is going to be bright.

No. Okay. So let me first -- so what I'm trying to understand here is between you -- so if I compare you with, say, the garment exporters, who 70%, 80% is exports for them. So what I'm trying to understand is that will you able -- when you renegotiate your contracts, so when that renegotiation sets in and this will be passed on to the customer, or these are tough times, some part will always be shared by you and some parts will be absorbed by the customers. So going back to that 12%, 13% margin range...

Normally, all the expenses are charged from the customer. When we calculate our sale price, all the expenses are charged from the customer, and they are put in the cost, sale cost, sale price.

Yes, yes. No, what I'm trying to understand,, sir, if I -- but I'm still not able...

No, no. Ankit, let me explain clearly, the question is a little different. The point is due to Red Sea issue and this war of Israel and that Iran, suddenly from very low level, $500 to $700 to $1,000, the ocean freight went up to $5,000, $4,000. Now the question is we have already sold CIF. You see, I have been -- my team, logistics team is sitting here in corporate office. So you see, we had been in touch with all the customers. Some of the customers, they are very nice. They're clean people. We told them we have sold to you and you are yet to share. You can absorb this cost, and they agreed, you see. And that didn't hit our profitability. And some of the people they wanted to share, we had to share also ocean freight and it hit us also. And some of the stupid people, they were such, you sold us, we don't care. All kind of customers are in the world. So we have to carry the burden of everyone. But now the situation is fine because these are all new deals, current deals or they're settled deals. So it's fine. I think, gentlemen, your question is answered here.

We have our next question from the line of Tushar Vaidya (sic) [ Tushar Vasuja ] from Yogya Capital.

Okay. Sir, my question is a quarter or 2 back, you actually said that branded sales will comprise 30% of your top line in a year or 2. So are we still on track for that?

Ankit, please answer.

What is your name, please?

Actually, my name is Tushar Vasuja, the operator got it wrong.

Okay. Tushar-ji, so currently, we are doing about INR 400 crores of revenue every quarter. And we are planning to increase 3 new packing units in Karnal. And these are really big packing units with the capacity of twice to thrice of what our current packing unit is achieving. So I expect within the next 18 months, we can do from INR 400 crores revenue to about INR 600 crores, INR 650 crores revenue in a quarter. Regarding your question about branded sales, we are working very hard. And what we promised, it is going to be achieved.

Okay, sir. So my follow-up question on that is like what's our visibility in modern trade right now? Like what are the channels that we're using for modern trade?

Sir, as you can see from our revenue, our main target is exports. We don't -- we are not targeting India. So I'll give you an example. Our registered brand, Mithas, has started doing very well in Saudi Arabia. We were selling 100 to 150 tons per month, now we are achieving 300 to 350 tons. So there...

Ankit, let -- his question was for modern trade. Let us -- let me a little bit explain here. The online Maharani is available on JioMart, in Amazon and others also. But the quantum is limited. And now we are -- they have -- because the business is gradually growing not faster, they have given us some options to put stock in their warehouses, Jio or Amazon, they want stock in their warehouses. Once it will be -- the registrations are going on because we have to enter in our GST number also. These things are going on quickly. And once they have stocked, and I believe at least online modern trade business will be there. And once that is there, demand is there, there is a possibility of negotiating with the different modern trade people hopefully. Thank you.

Recently, we have appointed distributors in Indonesia. We have appointed distributors in Philippines, right? And as I have told before also, there's more profitability when we're exporting our own brand. So I'm focusing on that, if that part can be increased.

Okay, sir, that's very helpful. If I can just squeeze in one more question. Can you give any update on U.K. FDA talks?

Chacha, you want to say something?

Yes. FDA talks are not only going in U.S.A., it's in the Europe also, already it's completed in U.A.E. So the only part which I have to see for the Europe and U.K. is, right now, there is EUR 175 duty on polished consumable rice. And if you sell them raw material brown rice, they reprocess over there, then the duty is hardly anything. It's very little. So let's see if our rice is covered as a duty-free, both rice brown as well as the polished rice. So the possibility of business is immense in entire Europe, not 1 country, all 27 countries along with U.K.

Okay, sir. So any updates or any -- you are the industry experts, so I'm asking you this, like when will this be passed on? When would this be completed?

This is gentlemen, within the governments. And you see the government is very keen to -- the best part of this government is they are very keen to enter into free trade agreements with most of the countries in the world. That's a very good sign for us, not only rice, other industries also. Thank you.

Next question is from the line of Madhur Rathi from Counter Cyclical PMS.

Sir, in the free trade scenario, what I understood is we have made some contacts on CIF basis. Some of the customers, they didn't passed on -- like didn't took the cost. So that's why our margins were hit this quarter. But in last quarter, you had guided by most of our orders from 4th Feb onwards will be on FOB basis. Sir, so going forward, can we expect the margins to go into the steady state of 11% to 14% EBITDA range?

You see -- I'm Rajeev Setia here and Ankit can also tell better because he is into really marketing and he travels all around and Sankesh, these 2 brothers travel around the world, so they can better tell. But you see, as I told earlier, these things are totally unknown. Most of the customers cooperate. Most of the customers cooperate, few don't cooperate. This happens not in -- in every industry. Ankit, you can tell further.

I personally believe that for a rice company, the year ending stock in our case was around INR 500 crores, how do you value it, determines the profitability of the last quarter. And like I said, it can be either the formula whichever one is focused, either cost side or net realizable value.

Ankit, let me explain this thing because this was my prerogative because stock valuation, I checked everything. You see there is one cost price. Cost price can be higher and realization revenue can come down also some time. Realization value can be up and can come down. As on 31st, whatever despite -- though we had sold at the higher prices, we know we had forward bookings. But the valuation as on the date as per law, as per rules has to be at the lower value if it is low, if the realization value is lower than the cost, then you have to value at the lower cost. That is what we did. Whereas I know, in the subsequent period, they have sold at the higher price, obviously, the profit will be good in the ensuing quarter. So we have been very fair on this issue because company don't want...

Sir, I understand what you're saying that for our inventory basis that our inventory has increased and going forward, we'll have some benefits of that. Sir, my question was the freight rate that impacted, the INR 10 crores that was the freight expenses for this quarter versus the INR 10 crores for the whole year 9 months. Sir, so going forward, are all our contracts on FOB basis so that we won't have this hit again? So that is my question.

No, no, no. Contracts are -- we always ship on CIF basis. The reason being I don't prefer FOB. FOB, there is one big difference between FOB and CIF, in the FOB shipment, insurance has to be covered by the foreign buyer. Hello?

No, sir, I'm...

Yes, the insurance has to be covered by the foreign buyer and let's assume there is 100% loss to the consignment and the buyer doesn't -- he has not paid anything or paid 5%, 10% with us. It does not comes up. So what do we do? I mean, we -- that is our loss I'm chasing legally, we go and pay -- he has to pay first and then apply for the claim. For the unpaid he cannot go for the claim, foreign buyer. So he -- because why should we take pains, he stayed in his mind maybe tomorrow, I don't get the claim from the insurance company. There is an objection so that's why for the safety purpose we always go for CIF. Sometimes it's done at FOB but at the point of shipment it is CIF. It's always CIF. I cover my insurance up to destination.

Okay. Got it, sir. Sir, just a final question, sir. What is our outlook for FY '25, either in terms of volume or in terms of revenue, as well as where do we see this margin going forward?

Ankit, please answer.

I'm sorry, your voice was not audible, can you please repeat?

Yes, sir, yes I said I wanted to understand what is your outlook for FY '25, either in terms of revenue or volume growth that we are looking at as well as the margin where we see going -- with all these uncertainties going forward so where do we see our margins as well as the revenue going forward?

Okay. You can see last 2 financial years, we've been doing INR 1,400 crores annually, revenue, right? So of course, the future also is going to be similar. Like I said, I am planning to add 3 more packing minutes. And these -- one packing unit is equivalent of 2, 3 packing units what I'm running right now. So I expect to achieve at least a revenue of INR 2,000 crores per annum in the future, in the near future. This is my planning.

Okay. And for the margin front?

See, our style is what you can see in the past, we are normally working between a margin of 10% to 15%. So that should be continued.

We have our next question from the line of [ Yash Sanghavi ], an individual investor.

So first thing I wanted to know an update on the spices business that Ankit sir or Rajeev sir mentioned 2 to 3 quarters back.

Chacha?

Sir, Rajeev Setia here. This apart from 3 new units for rice coming up in Karnal, one is already in Gandhidham. There will be 2 in the ensuing season because 1 is being commissioned. You see because once we will have our own complete plant and machinery, at liberty to do any business because the Gujarat has all -- many products. Gujarat has many spices. We will not go for the -- I mean, the complete after grinding and all that package. We will go for the wholesale business of those things because our many customers can buy, that is a future idea. That's a future idea. Once -- because of the cyclone my -- that warehouse, which I had on west within the company, the roof had gone off. So it's delayed for a long period. So once that is ready, then there is a possibility. We'll definitely explore the possibility, this economically, eventually both things are not as simple there. [Foreign Language] enough possibility is there. You have to have money, there are people to buy.

Next question is from the line of Anuj Sharma from M3 Investment.

Yes. So sir, one point is when you look at your export volumes, going forward, do we expect the existing -- what can be the opportunity within the existing set of customers? And what is the opportunity we'll be expecting for new people to join in our business or in our relationships? That's question number one.

Ankit, answer, please.

So from my experience, I have seen that the customers, they grow themselves, it's like an organic growth of 5% to 7% annually. This is what I've seen with our customers. And you can -- the retention with the customers is very strong. Like we have customers we are dealing from last 30 years, 25 years like that. So organic growth is coming with them. And then we have a full department in the company. It is called new buyer development department, where continuously, these 7, 8 ladies, sales coordinators, they are looking up for new customers all over the world. So they are using data. My brother, myself, we are traveling all over the world for these food shows and meeting customers. We are getting all data to them. So they are continuously getting us new customers. If I give you an example, in the last quarter itself, maybe 25 new customers were added to Chaman Lal Setia. And like I said before also, I'm adding 3 new plants. So currently, we are -- I mean, we are running at a very high efficiency of 80% to 85% of our current infrastructure. I'm trying to increase that. We are trying to increase it. So once it goes up, you will see bigger revenues each quarter. So the effect can come by year-end. This is what I -- this is what is the planning.

And right now, Mr. Vijay Setia and Sankesh both are in THAIFEX exhibition because Thailand is equally big exporter of rice. Sometimes they are up from India, sometimes India is up. So a lot of customers from all parts of the world come to Thailand for buying rice and most of them are in Basmati also, some get interested in that rice. So we have just 2 -- I think, apart from our company, there is one another small company, not listed but they are participating. So it's a good opportunity. You always find the opportunities. Thank you.

Yes, I have two more points. One is, if I look at export sales, FY '20 to '22, we were in the range of in terms of volume, 100,000 tons. And then from '23, '24, we inched up to 125,000, 130,000. Now again, do we see a period of stability? And how do we look at what is -- because we're still very small in the overall market. So let's suppose 3, 5 years down the line, what is the volume which we target in terms of metric tons? That's point number two.

Ankit, answer.

Like you said, we are small. On what basis have you said that?

Yes, the global export market right is huge. And then a couple of the...

India exports around -- see, India is exporting around 4.3 million tons of rice, out of which 2 million goes to only 2, 3 countries. We are not even exporting in those 2, 3 countries. So in terms of what we are doing and the kind of customer base we have and the kind of countries we are doing in, I believe we are big and the model is absolutely different from our competitors.

Okay. All right. So if you can elaborate, let's suppose 5, 7 years down the line, what is the export volume we have in our mind in terms of the opportunity?

See, the point is to have a revenue where you are making money, your payments are coming on time. I hope you agree on that.

Yes, absolutely.

Right? So this is the same model we are following from last 5, 7, 10 years, and this, of course, will be followed in the future also to get customers who are good paymasters, who are giving us a good margin. And that is why we are increasing our packing units so that our sales can be done on time, delivery can be faster and new customers, which we are getting in our company, more can be added. This is the plan. So I expect in next 18 months, the revenue should touch INR 2,000 crores per annum.

All right. All right. And one observation to Rajeev-ji, see our dividend payout has inched up, right? I think we used to hover around 4%, 5%, and we have moved it to 10%, so that's a good sign. I hope we will continue the trend on an upward trajectory so that at least we match a reasonable payout and that's a good sign. A good sign.

In the speech, Shweta, has already told 10% to 15%, and let's hope we continue with that. We grow -- it all depends upon the business and business, the way we are doing, it should run safe all along because in the industry, many mishaps have happened. But our way of working is such we continue to earn, continue to grow. And if everything continues to grow, this will also grow, don't worry. We have made up a mind because company is sitting on a very high cash. So we decided that it's a little unethical on the part of company to pay smaller dividend, so we changed our mind. Some -- people like you suggested us in the conferences, and we followed that.

Absolutely. So...

I would like to add, this financial year, this full year was a very challenging year, I would say. And this was in terms of buying raw material and procurement and selling it was -- I would say, it was like a rollercoaster. Like I said last time also, first, white rice was banned, broken rice was banned, par-boiled, there was a duty put 20%. And then on basmati, first, there was a minimum export price of $1,200, then reduced to $950. So I mean, so many things have happened this year, right? Stock prices went down. But you can see the company has performed very well. If you take into account the full year performance, it is better than even last year.

I would add here also, the company has been going for its buying spree very calculated. Every new kind of question what we are buying, there is a corresponding sale or not. If the sale is there with the proper profitability is there or not. Only then I was permitting buying, and this is what every weekly or two times weekly, Ankit and me were discussing. Ankit [Foreign Language] and they did it. Great job they did.

We'll take our next question from the line of [ Raju Basani ], an individual investor. As there is no response, we'll move to our next question from the line of [ Adi ], an Individual Investor. Since there is no response, we'll move on to the next question from the line of Chirag Shah from White Pine.

Sorry to harp again on the earlier question on this freight cost. So what we're trying to understand is from when does the new contract setting for you so that it becomes the business as usual, okay? Because you still have the backlog of orders where because your contracts have CIF and customers, some of the customers may still not be willing to share the burden or accept the burden. But as you enter into newer contracts today or those will be assuming the newer freight rate, correct? So generally, what is the lead lag cycle? It's a 1-quarter lead lag cycle. It's a 2-quarter lead lag cycle for you for this freight cost issue that adjusted completely? That is the question that I was trying to understand. Yes, how is the business cycle?

I will briefly explain because I want others who also ask because there must be other people in the queue. Very simple arithmetic, when the price motion rate goes up very high, let's say, it is $7,000, $8,000, $10,000, I'm talking about corona period. Canada, it was $1,550 went to $12,000. So we were always selling that FOB price, we were fixing the price of FOB and ship CIF, so the actual ocean freight. We are negotiating the buyer, this is the freight, if acceptable to you, give us consent and we send you the contract. You see how we have to do them in a very large ocean freight. And we have faced that period also. That's over now. This geopolitical problems have again, the prices have gone up, is the cost of companies -- shipping companies, sometimes, they use this time for their advantage also we know obviously. So now this is in the business, if I have sold CIF, customer will say give me, you have sold me but the group sanctioner, they share. Some of that say totally, it's none of your fault, and there are some greedy people that try to take that, but we notice them and we try to factor into our subsequent prices to get better prices to recover our losses. Also these things happen, these are business principles. And yes, these things are happening due to geopolitical problem, we can't help it, but still company is growing.