DCM Shriram Limited (DCMSHRIRAM) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to DCM Shriram Limited Q3 FY '20 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Siddharth Rangnekar from CDR India. Thank you, and over to you, sir.

Thank you. Good afternoon, and thank you for joining us on DCM Shriram Limited's Quarter 3 and 9M FY '20 Earnings Conference Call. Today, we have with us, Mr. Ajay Shriram, Chairman and Senior Managing Director; Mr. Vikram Shriram, Vice Chairman and Managing Director; Mr. Ajit Shriram, Joint Managing Director; Mr. K.K. Kaul, Whole Time Director; and Mr. J.K. Jain, CFO of the company. We will begin the call with opening remarks from Mr. Ajay Shriram and Mr. Vikram Shriram, following which we will have an interactive question-and-answer session. Kindly note that some of the statements made on today's call could be forward-looking in nature. And a note to that effect has been included in the conference call invite circulated to you. I would now like to invite Mr. Ajay Shriram to give us his views on the performance of the company and the outlook going forward. Over to you, sir.

Thank you, Siddharth. Good afternoon, ladies and gentlemen, and a very warm welcome to this quarter's earning conference call. I will share my thoughts on the developments in our businesses and progress in taking forward our strategic direction. After that, Vikram will take you through the financial highlights. As shared earlier, our strategic business action includes enhancing scale and integration, strengthening cost competitiveness, increasing share of value-added products in our business portfolio and enhancing customer engagement. We have planned initiatives in all these directions while ensuring financial prudence and strengthening our execution capabilities. We have made satisfactory progress in all areas during the quarter. In the sugar business, we commissioned our second distillery, taking the total distillate capacity to 350 kiloliters, 1,000 kiloliters per day. We can now convert the entire molasses produced to ethanol. We have started diverting B-Heavy molasses for producing ethanol at both the distilleries. For the ongoing sugar season, we expect to divert almost 5 lakh to 6 lakh quintals of sugar to ethanol through these routes. The 5,000 tonnes per day crushed -- tonnes crushed per day refined sugar plant commissioned in January 2019, will have full season this year and will provide us value-added sugar. The company is studying options for enhancing scale and value addition in the sugar business, and we will take a view about the same going forward. The chemical business has focused on increasing capacity utilization after enhancing capacity from 1,345 tonnes per day to 1,845 tonnes per day. We have achieved a capacity utilization of about 82% during the quarter. The project to add 700 tonnes per day caustic capacity and 120-megawatt power plant at Bharuch is progressing well. The aluminum chloride business started last year has stabilized. We are planning to progress this further by developing new markets and enhancing scale at the appropriate time. We have also shortlisted a few value-added chemicals and are engaged in time various ends to take some of them forward. The PVC business has added further 40 tonnes per day capacity to take the total capacity to 220 tonnes per day production. This would enable us to convert almost the entire carbide into PVC based on the relative economics of PVC and carbide. We have also commissioned the 66-megawatt new power plant at Kota, which has started operating at partial load. The plant will start operating at full capacity very soon and will replace the old and inefficient 50-megawatt power plants. This would improve our cost competitiveness by lowering the cost of power. Shriram Farm Solutions is now focusing exclusively on value-added agri inputs. It has introduced several differentiated products in the market and plans to accelerate this going forward. The products introduced so far have got good acceptance even in the tough agri input market that is prevailing today. In Bioseed, we decided to exit from Indonesia and Vietnam. The company has executed an agreement to sell to this effect and expect to complete the transaction by March '20. Fenesta is also focusing on expanding the product offerings, enhancing customer service and geographical presence to achieve healthy growth on a sustained basis. I will now share the industry's scenario and developments of some of our key sectors. Chemicals. As you are aware, the Indian caustic prices are fully integrated with global prices. The global caustic prices continue to be soft with a downward bias. The problem is further aggravated because of low-priced exports from some of the Middle East countries. The global caustic supplies continue to be strong due to strong chlorine prices. This has put pressure on global caustic prices. We expect the chlorine demand in India to remain positive. The caustic demand in the country has grown 2% in the current year due to low growth in all consuming sectors. The low growth in demand, increase in imports, and addition to the installed capacity has led to a decline in overall operating rates in India to about 82%, 83% from 84.7% last year. The total capacity in the country went up by 10% in financial year '19 and is expected to go up by about 7.5% more in financial year '20. The imports during 9 months financial year '20 had been 2.31 lakh tonnes versus 2.16 lakh tonnes last year. The domestic manufacturers focused on increasing exports, which went up to 0.53 lakh tonnes in Q3 financial year '20 versus 0.3 lakh tonnes last year and 0.57 lakh tonnes in April to September 2019. We expect the domestic issue realizations to remain soft, primarily driven by soft caustic prices globally. In this situation, we are focusing on increasing capacity utilization through strengthening domestic sales and increasing exports, particularly of caustic flakes. We also expect commissioning of expanded capacities by some of our chlorine consumers, which will help us in achieving higher capacity utilization going forward. The commissioning of our 66-megawatt new power plant in Kota will reduce our power costs and also help in replacing the power grid power purchase. This will help us in improving margins in chemicals and PVC businesses at Kota. Plastics. The domestic PVC industry has seen flat growth this year. The full on monsoon affected PVC pipe demand, in particular, which accounts for 50% of total PVC consumption in India. The domestic PVC prices are moving in line with international prices, which were at 8-month low in November 2019. The prices have been range-bound since then. The global ethylene prices have also been soft because of oversupply. This may keep the PVC prices soft for some time. The carbide prices were lower during Q3, in line with drop in international prices. However, the prices are likely to rebound during next quarter on expectation of improvement in demand. We have commissioned the 40 tonnes per day additional capacity of PVC, which will lead to higher volumes going forward. Sugar. India continues to have big sugar surpluses. Sugar stock as of September 30, 2019, was 14.5 million tonnes. That is approximately 7-month consumption as against the norm of 5 million tonnes, which is 2.5 months consumption. The sugar stocks as of September 2020 are expected to be 10 million tonnes twice the normal level. The production in sugar year 2020 is expected at 26 million tonnes and exports at about 5 million tonnes versus 3.7 million tonnes last year. Also, it is expected that about 1.5 million tonnes will get diverted to ethanol vis-a-vis 0.5 million tonnes last year. The central and state governments need to carry on steps taken by them in the sugar sector. This includes push for exports and ethanol production, particularly from B-Heavy molasses and from sugarcane juice. This will enable the industry to better manage the sugar surplus over the medium to long term. However, with the previous government's 2 recent announcements will have a contrary impact on the industry. First, the government decided to reduce the power tariff, purchase price of power tariff by INR 2 per unit for all existing power purchase agreements. This has severely lowered the profits of the already stressed sugar industry and will discourage further investments in the sector. Secondly, the government decided to reserve for country liquor 18% of all molasses produced by sugar mills. Up to last year, this stipulation was not applicable to captive consumption of molasses by sugar mills and the reservation percentage was 16%. At the time, when central government is promoting production and use of ethanol, such actions send contrary messages. We have contracted 12.3 lakh tonnes of sugar export in the current year. If permitted, the company will work on exporting more sugar in the coming months. We will also maximize the diversion of sugar to ethanol through B-Heavy molasses route. These steps will reduce the working capital requirement also. Agri inputs, which include our SFS business, Bioseed business and fertilizer business. In this agri input sector of SFS and Bioseed, they have seen positive movement in early 2019 with growth in almost all categories. The positive movement in prices of farm produce if continued, will provide support for better performance in Kharif 2020. Both SFS and Bioseed are focusing on product and market developments to benefit from this. The fertilizer industry continues to engage with the government for a national policy framework for this sector. We are hopeful for positive movement in this direction. Fenesta. The real estate sector continues to be challenging. Both the fresh order booking as well as execution of orders already booked remain under stress. The retail household sector is also recording effect of lower discretionary spend. Fenesta has introduced system aluminum windows to expand its product offerings and is also expanding geographical reach to sustain the growth momentum. This concludes my remarks. I will now request Vikram to take you through the financial highlights. Thank you.

Thank you. Good afternoon, and thank you for joining the call today. I shall take you through the financial highlights for Q3 financial year '20. The net revenues for the quarter at INR 2,195 crores are up 4% year-on-year. Sugar exports, SFS and Fenesta reduced their growth and turnover. Chemicals had volume growth of 11%. The drop of 35% in prices in the quarter led to the chemical revenue degrowing by 22%. PBDIT in Q3 FY '20 at INR 323 crores recorded a decline of 9% year-on-year. SFS, plastics and Fenesta profits grew by 43%, 54% and 20%, respectively. Bioseed registered lower losses. Together, these businesses led to increase of INR 38 crores in the PBDIT that is at INR 103 crores for Q3 '20. Overall, sugar PBDIT is at INR 113 crores versus INR 53 crores in Q3 FY '19. The results of last year included a loss of INR 65 crores related to sugar exports as against INR 6 crores loss in the current quarter. The 150 KLD distillery had 26 days maintenance shutdown in November 2019. Power profits went down consequent to INR 2 per unit reduction in power tariff by UP government. The chemicals PBDIT was down 50% year-on-year at INR 124 crores due to sharp drop in ECU prices. The company has entered into an agreement to sell its subsidiaries in Vietnam and Indonesia. Bioseed subsidies. A loss of INR 14.6 crores is charged to the accounts during the quarter. The finance costs are higher at gross level with higher gross borrowing. The net finance cost after considering the income from investments and subvention by government, both which are appearing as other income are INR 8.6 crores versus INR 1.5 crores last year. The tax rate for the year is expected at 21.8%. The company has decided to continue with the earlier regime of corporate taxation instead of availing the new regime of 22% corporate income tax, after considering the implications regarding carryforward bank credit and income tax exemptions. The PAT for the quarter stood at INR 175 crores as against INR 226 crores in Q3 last year. Let me now also share highlights for a 9-month FY '20 performance. Revenues stood at INR 5,850 crores, marginally down 1% year-on-year. SFS registered 58% growth in sales of value-added inputs at INR 618 crores. Fenesta's revenues grew at 16% to INR 334 crores. Overall, sugar revenues at INR 1,683 crores were down 2% year-on-year. The domestic sugar sales volumes were down 20% year-on-year after the government stipulated sales release mechanism. Power volumes are down 18% year-on-year as sugar season 2018 was an unusually long season, leading to higher power generation in April, June 2018 versus April, June 2019. Chemicals revenues are marginally down 1% year-on-year in spite of ECU going down by 19% year-on-year, made up by volume gains of 18.9% year-on-year. The PBDIT at INR 940 crores versus INR 1,017 crores in 9 months FY '19. SFS, Plastics and Fenesta recorded PBDIT growth of 38%, 33% and 41%, respectively, year-on-year. The total PBDIT of these businesses moved up to INR 221 crores during this period. Overall, sugar PBDIT at INR 242 crores was up 53% year-on-year. Improvement in domestic sugar prices and earnings from distillery contributed to this improvement in earnings. Chemicals PBDIT at INR 553 crores is down 22% year-on-year. Fertilizer PBDIT at INR 15 crores versus INR 58 crores in 9 months FY '19 due to lower volumes and shutdown costs. The plant had a shutdown in April '19, which happens once in every 2 years on a planned basis. The finance costs, net of investment income and interest subvention was at INR 43.4 crores versus last year INR 57.6 crores. Our cash generation remains robust. The cash generation during 9 months was INR 816 crores. Last year, INR 575 crores. Our capital expenditure 9 months stood at INR 523 crores and balance cash generation was to reduce net debt by INR 294 crores. Our balance sheet continues to remain strong. The net debt as on December 31, 2019, is INR 971 crores versus INR 754 crores as on December 31, 2018 and INR 1,265 crores as on March 31, 2019. We do expect this to go up on March 31, 2020, due to the seasonality pattern. The return on capital employed on a trailing 12-month basis, as at December 2019 stood at 22% as compared to 24% for the same period last year. It may come down marginally in March 2020 with capitalization of 200 KLD Distillery 66-megawatt power plant and 40 TPD PVC plant in December '19 to March '20 and only 2 to 4 months of profits accruing within the balance period of this year, while the whole debt would have come on the books. The Board has declared second interim dividend of 210%, taking the total interim dividend for the year to 410%. Last year was also 410%. The total outflow, including taxes with respect to second interim dividend, will be INR 79 crores. That brings me to the end of the financial discussion, and we will be happy to take questions that you may have.

[Operator Instructions] The first question is from the line of Chirag Shah from ICICI Securities.

Sir, this is Sanjay. Sir, I have few questions. Just have few questions. I think last year, you had a sugar production of 6.6 lakh tonnes, and you mentioned that there would be somewhere around 0.5 lakh tonnes of sacrifice with respect to ethanol. So is it the right number, 0.5 lakh tonnes, which we have mentioned? Or it could be more than that?

5 lakh quintal.

And sir, so one thing you have mentioned on an industry level that there would be 1.5 million tonnes of divergence at the industry level. But what I understand that the first contract, which has been done with the OMCs has somewhere around 170 crore liters, and out of that, if I'm not wrong, there will be 10 crore through sugarcane juice and around 50 crore for the B-Heavy. Now if I just take that number, then the sacrifice come somewhere around 0.6 million tonne and -- but you mentioned 1.5 million tonnes. So how this number for -- you see?

So basically, in the first tender, the ethanol that's been offered is 11 crore liters sugarcane juice, 62 crore liters from B-Heavy, 80 crore liters from C and 5 crore liters from other raw materials. And this is only the first tender. So the second round of tender will close in early February. And there will be a third round sometime in April or May. So we still have 2 more rounds to go to offer more ethanol for supply in this year.

So you expect there will be more millers will be doing B-Heavy?

Yes.

And what about DCM? I mean, are we like fully doing B-Heavy in both the plants? Or like we are doing some C-Heavy and some B-Heavy?

See, between our core brands, we have made a balance of doing B-Heavy and C because we can't store too much of B-Heavy in the offseason. So in that case, for ensuring that the distilleries run at full capacity in the offseason, we have to use C molasses. So we are producing in a balanced way between B and C to optimize the full utilization of our 2 distilleries.

Okay, okay. And sir, in terms of recovery rate, what I could see from your presentation that your recovery rates are down by 1%, and whereas the sacrifice towards B-Heavy is just 0.7%. So on a like-to-like basis, the recovery rates are down this season?

The recovery is partly down this season because we started a week earlier, #1. #2, between 1.5% to 1.6% of the sugar is diverted to higher B-Heavy. So on an overall basis, also our recovery is down compared to last year.

But is it the trend across the state? Or it's just for our mills?

This is the trend across, I mean, across the state. In fact, in West UP, there was a back period of -- I mean, recovery a couple of weeks ago because there were prolonged rains.

Right, right. So sir, in that respect only one thing that the ISMA's estimate of U.P. sugar production at 11.8 million tonnes and Maharashtra sugar production at 5.5 million tonnes. How do you see these numbers? You think that there will be further reduction from these numbers means and production will be much lower than this? Or how do you see that?

I think, overall, this number seems to be okay. However, there is industry meeting in the 3rd week of February, so then we will get to know the numbers from the other states where people from the other states participate, and we will have some more accuracy.

Okay, okay. And so just 2 more questions on the export and expansion, what you mentioned. You mentioned 1.3 lakh tonnes of exports. Is there any additional exports we'll be asking from the government?

Yes. So basically, the government wants to export 6 million tonnes of sugar. Out of 6 million, I think we anticipate about 5 million tonnes should be physically exported. And many millers are not coming forward for exports. So in about a month's time, we anticipate that the government will offer the unsold lot or unoffered sugar exports to the people who are physically exporting. So we have also given our preference for exports, and we do hope that the government does the allocation quickly.

So what is the quantity you have asked for?

We have asked for anything between 50,000 tonne to 1 lakh tonne, but let's see what government allots that -- it will depend on that.

Okay, okay. Sir, considering the divergence towards B-Heavy and this additional export and the export, how much inventory reduction will happen from March '19 to March '20? You have some sense -- and now you probably have a sense of the monthly sale quota for Jan and probably Feb also?

For our company?

Yes, yes, sir.

No, I don't think we are expecting a reduction. We are saying we should not increase because like Ajay said, we had started crush earlier. So there is no reduction expected, but we shouldn't increase.

Right, right. And sir...

And also -- sorry, and also the 5,000-tonne refinery was commissioned in January last year, so that has begun production from early November so that will also increase -- add to the production.

Right. Right. So is there any other expansion on the distillery site?

No, we don't have any plan to expand on the distillery site. However, while producing from B-Heavy molasses, there is a higher output, which comes out, #1. #2, once our new plant stabilizes, we'll see how to debottleneck the plant going forward.

Right. And you're not -- expect to do anything from the sugarcane juice?

Not yet.

The next question is from the line of [ Saket Kapoor ] from Kapoor & Company.

Congratulations on this -- the vivid description that is being provided in the presentation and the time you are taking to explain everything, it's really commendable job. Sir, the first point is sir, regarding the power tariff revision so sir, in absolute terms, so what has been the change, the INR 2 reduction?

At an average level, about INR 1.7 per unit.

No, how much it translates into a lower profit? I'm talking in absolute number.

About INR 45 crores a year. INR 45 crores a year.

Lower profit of INR 45 crores.

INR 45 crores will be the difference. And sir, if we take the sugar segment breakup sir, how much will it be from the ethanol? And how much will be from the cogeneration, sir?

See, we had explained that last time also. Since there is a lot of transfer pricing involved here, we don't have separate profit. It's better to look at integrated profits of the sector.

Just to -- just want a better understanding sir, is sugar on a stand-alone making profit? Or sir, it is the cogeneration that normally that is contributing to the bottom line in [indiscernible]?

Which is what we are saying, we are looking at it as an integrated business and not individual segments because the objective is to utilize all the byproducts and generate returns maximum.

Okay. [Foreign Language] sir. And sir, now coming to the point about sir, this Himachal Pradesh project, the power project sir, just if you could delve more about it, sir. I think our subsidy vision is on infrastructure -- this project was canceled. So what are its implication, sir?

Since the project has been canceled, we are now asking government to refund whatever money we have deposited and whatever costs we have incurred. So there is clause for arbitration, which is what we have asked the government to appoint the arbitrator. And if the government doesn't do, we will approach the court for the same.

And how much is the amount, sir?

The amount that we deposited was INR 22 crores, but that's all provided. We are not carrying forward as a metric.

Okay. Demonetization we have already taken?

Yes.

Okay. Because if we look at the Himachal Pradesh power website, they have in their report mentioned that the -- as per the MOE of NCC, developer is not responding. I'm talking about the Chatru project of 126 megawatts. And that they have given the date of concurrence at 15/1/2015, wherein they have written that EC recommended by EAC on 24/2/2015, letter will be given that the government mentioned, and they have mentioned the word developer is not responding. So that was my point. [Foreign Language]. Where do we stand here when the government on their part is themselves informing that we have not responded?

I think we will also check it out, but we've been very much in touch with the state government and our lenders are on record with them on what is the status. And as Mr. J.K. Jain mentioned, we are already -- we've asked them to appoint an arbitrator. So we are in communication with them.

Correct, sir. Sir, coming to your PVC and the caustic soda segment, sir, especially, sir, for the caustic soda, sir, the data which you shared for the import and the export one, there was only a bump up in export for the last quarter, if I'm not wrong. Sir, generally, what has happened that there has been a sea change in the pricing over the year? What has attributed to it, sir?

Actually, the international price of caustic soda is the lowest we've seen in the last 15 years. I think it's the geopolitics, it's the economics and many kind in the international -- the growth trends of many countries outside. The prices are really the lowest we ever had. So that is what is impacting the Indian industry also. And the consumption also is not moving because a lot of the aluminum people, they're getting different quality alumina, where the requirement to caustic soda also fluctuates between 50 kg per tonne and alumina to 200 kg per tonne of alumina. So I think that variation also reduces the consumption of caustic. So because of that, there is tremendous pressure on the pricing for all manufacturers in India and actually, all over the world the prices have come down quite a bit. It's now delivered is about $250, $260, which was running normally in the range of $350, $400. It's now come down quite dramatically.

[Operator Instructions] The next question is from the line of Riju Dalui from Quantum Securities.

Sir, my question is that, I think we are at around 80% capacity utilization for caustic soda.

Correct.

What is your like expectation for the Q4 and beyond, like, for H1? Because the aluminum demand is -- it's not there in the industry. So what is your view on that?

So our view is that the prices will be under pressure. We think it's not going to fall too much more, but there is pressure on the prices. But with the commissioning of the 66-megawatt plant at Kota, our production in Kota has also gone up by approximately 70 to 80 tonne a day, which we want to keep it up. And -- but this has led to a cost reduction because this power cost is much lower than when you are buying from the State electricity board. So that's given us the advantage on the cost side, but our attempt is going to be to increase our production volumes so that we are able to at least reduce our share of fixed costs over a larger production base. So that is our strategy going forward.

Okay, sir. So sir, what -- I can understand that Y-o-Y for Q3, your volume growth for caustic soda was 11%. So this trend will continue for, say, the next 1 year? Or like it will further increase? Volume growth?

It's difficult to say in commodities because there are new capacities getting added in this quarter and then next year. It will depend on what overall demand goes up. I don't think we will be able to give a future estimate on this.

Okay, okay. Sure, sir. And sir, one clarification for this -- that chlorine side. So how was the -- our relation for chlorine this quarter? And I think it's been one month for the Q4, so how is that chlorine relation?

It's almost breakeven, sometimes 1,000 negative, sometimes 1,000 positive, but it's fairly stable around there.

Okay. So it's in the positive side?

It's negative, positive both, it keeps fluctuating between that, it's never steady.

Okay, okay, okay. Got it. And sir, any update or like any expectation from the government side that like in next 2 years, we will have a good amount of capacity addition in domestic markets. So any expectation from government side in imposing of import duty for caustic soda?

I think the industry is studying this matter and seeing what it is. Is there dumping going on because the prices have fallen so dramatically? So I think it's going to be a little study, which is ongoing by the Alkali Manufacturers Association. They're looking at what can be done.

Okay, okay, okay. Got it. And sir, you said earlier that you are looking to expand some kind of value-added chemical going forward. So which kind of chemical you are looking for like to invest further?

We actually have got a team working on this. We have 3, 4 different products, which are under evaluation study right now. So unless we are able to get a clarity and take a view and take it to the Board, we are not in a position to share because we are looking at various issues. This is a long-term business for us. Our objective is to get into value-added products in the chemical line and expand and grow it over the next 5, 10, 15, 20 years. So we are studying various products and we will definitely come to you when they are more concrete on what we're getting into.

Okay. So it would be different from caustic soda value chain or like our chlor-alkali value chain or like new product, it will be -- you were -- want to be venturing into that?

No, it's going to be a value-added product for caustic or chlorine, 1 of the 2.

Okay, okay. So chlorine downstream product, you will invest?

We are looking at it. Yes, you're right.

Yes. And sir, in Bioseed business, if I look at the Bioseed business for -- the business profitability for the last couple of years, so that business is not actually adding much value. So what is your view on that business? And how you are looking at the future of this business?

So Bioseed business actually got affected when the cotton price control came in, which led to our inability to introduce new products and cotton volumes went down. The environment on cotton price hasn't changed much, so that's the reason why it hasn't registered any growth either if there has been no introduction of new technology or new product. What we are doing is we are now building a portfolio of non-cotton products, which is called seeds and paddy. This is a little longer-term game. It takes time to develop the product in the market. Our expectation is as the non-cotton business develops, this business should start performing well over medium term.

Okay. Okay, got it, sir. So for these strategies are, like, when we can see some kind of a result for -- from this business, like, say, from FY '21, '22, any guidelines on this?

So see, like I just said, we don't give any future estimates. But yes, we do expect it to build up relatively well in medium-term of 3, 4 years.

Okay. So by that time, if cotton prices are in the same range so that -- we can expect the same kind of performance?

I didn't follow your question.

Okay. So, I'm saying that, like, if cotton prices will remain in the same range. So then like Bioseed business will perform in the similar range, like, what we have seen in the last 4, 5 years.

Yes.

No, I think this is case -- what I’ve mentioned is that we are expanding the range of products, which we're selling in Bioseed besides cotton by getting into other types of seeds, vegetable seeds and other season seeds, et cetera, et cetera. So we're looking at expanding the range to move away from cotton by reducing the percentage of cotton. So we're looking at other products also. So that should add to our growth going forward.

Okay. But that itself will take around 2 to 3 years' time?

It will postpone results, yes, but it will start showing some results over a period.

So we have a strong R&D, and the R&D is already working on many of these products. So they are being sort of tried and then injected in the market on a continuous basis. So we expect it to grow over the next couple of years.

Okay, okay, okay. So the result may come, like -- the small part of the result may come from next year onwards. That may not affect the current financial result but the result will come from next year. That we can now say?

Possible.

The next question is from the line of Aman Sonthalia from AK Securities.

Sir, my question is that next year, we expect a bumper sugar production again. So how do you foresee the next year future of sugar industry?

We do hope that this entire issue of diversion of B-Heavy converting ethanol, and also, there are some trials going on of cane juice into ethanol. And certainly, a large number of ethanol factories are still coming up. So once this is commissioned, a larger proportion of sucrose gets transferred to ethanol. That's one. And second is that we do hope that the government comes up with another export policy by which exports can happen from India to the other parts of the world.

Okay, sir. Sir, my next question is that there are some mills in Karnataka, which are not making B-Heavy or sugar, but directly, they are making ethanol from the sugarcane. So what is the economics of that at the current prevailing ethanol prices?

Actually, there are a large number of mills in Karnataka and Maharashtra, which have very low quantum of cane. So I'm really not certain about whether they're actually making ethanol from cane juice or sugar. I mean, I'm not up to date on this front.

And in any case, the cane price system, et cetera, varies from state to state; therefore, the economies will also vary state to state.

Okay. And sir, what about in U.P. as we are sacrificing sugar for B-Heavy molasses. So what is the arbitrage price of ethanol compared to sugar?

The breakeven price is anywhere between INR 32, INR 33 of sugar actually. It makes sense to produce ethanol if sugar price is below this.

The next question is from the line of Sachin Kasera from Svan Investments.

Just one question regarding new power plant that has got commissioned. From what I understand, we already had a captive power plant at Kota. So this will supplement it? Or is it that this being a more efficient plant will gradually reduce the production from the old power plant?

In Kota complex, we, at the moment, actually got 5 power plants. So -- and they've been put up at different periods of time. So what our plan now is going to be that with this commissioning of the 66-megawatt new plant, which is a much more efficient plant compared to the other, we're going to decommission 3 plants: one is a 50 megawatt, one is of 10 megawatt and a third one of 10 megawatts. We are going to decommission these 3, which are older plants, less efficient plants, and we've added 66 megawatts in that place. So that gives us additional 16 megawatts of power, which should give us additional production of caustic soda and we have enough power available to maximize manufacturing of all our products. So we are actually going to decommission 3 old power plants.

So sir, what would be the cost per production difference between this 50-megawatt power plant that you'll be retiring versus this new...

About INR 0.80, INR 0.90 per unit of power.

INR 0.80 to INR 0.90, okay. Secondly, sir, this farm solution business has shown a lot of promise. I know that we have been quite bullish on the long-term potential of the company. Finally, it started to show good numbers. So is this sort of -- it's a trend change that we are seeing from here? Structurally, we can see this business doing well for the next 3, 4 years, if you could give some comments on that?

No, I think as mentioned in our talk -- in our speech earlier that we had the businesses of SSP, MAP, DOP over the last couple of years. We have closed those businesses. We have got out of that trading business. Because we found in that business, our return on capital employed was running from plus 2% to minus 15%. So we thought it better not to sink funds into a business that doesn't make sense, so we got out of that. Our focus is to get on to value-added products, where we actually are looking at the seed sector quite actively, independently, and we got a research outlet proceeds also in Ludhiana. Plus we are looking at other seeds, which we're getting. We are looking at the value-added fertilizers, we're looking at top-gear chemicals. So there's a whole range of products because the farmers' requirement of inputs is very varied. And of course, we are also simultaneously selling our Shriram Urea fertilizer through our Farm Solutions division. So they're looking at new products all the way.

So sir, these products -- value-added products you mentioned, these again are basically products we trade in? Or what is the type of sourcing arrangement we have and, eventually, we look at manufacturing them?

We are, at the moment, in trading with such seeds, where we are growing some seeds also. But I think basically, down the line, we are evaluating various options on how we can get into back-end if necessary, does that make sense or not. So these are studies, which are being done at the moment.

It's just that a little more than trading in the sense that we are developing differentiated products and getting it manufactured for us. So we don't have manufacturing facility, but these are products being manufactured specifically for us.

Okay. So we have a lot of value-added income from development of that product. That is why we're getting that extra margin. It's not...

Yes.

And are we also looking in terms of getting into the agrochemical side in this part of the business, sir?

We are studying various options of what all we can look at. But the focus is on these 3, 4 verticals within Shriram Farm Solutions and work is going on in all directions.

Sure. Sir, on this Fenesta side, how are the things -- is it that you're starting to see some sense of stabilization on the real estate side and things should gradually improve? Or they are still very, very tough on the real estate side?

I think the real estate sector, everyone is aware is undergoing a very, very severe stress. It is the retail sector that is standing Fenesta in good stead. We are the market leaders in the country and it is the retail sector that's keeping the growth and the bottom line going. Whenever the developer sector or the project sector picks up, then things will really see a different complexion altogether. Right now that is very, very subdued. What used to be a 70:30 ratio projects versus retail is now probably a 70:30 ratio, 80:20 ratio, the other way now, retail versus projects. So whenever projects comes back, plus the new products of aluminum system, aluminum, et cetera, that are being introduced. All this will broaden the range and enlarge the market going forward. So we are thinking to pick up in the future as and when the project picks up. In the meantime, we are planning to grow our business in retail with the system aluminum and uPVC and select -- selection of those. So the growth plans are continuous.

Sure. And sir, on the sugar side, are we now fully integrated in terms of molasses and bagasse? Or we still have sort of surplus left, in the sense, we can look at adding some capacities going forward?

No, on molasses side, we are fully integrated. On bagasse side, in one of our factories, we still don't have captive power for export, the rest, 3, are fully integrated.

Okay. And sir, can you give us some sense on what is going to be the CapEx for FY '21?

We have a sanctioned project of INR 1,070 crores in chlor-alkali business, which is capacity expansion as well as power plant that we are putting up. So that's the major project, which will get commissioned -- is supposed to be commissioned in first quarter '21 -- first quarter '22, sorry. So that will take major expenditure next year.

The next question is from the line of Chirag Singhal from First Water Fund.

Sir, I just wanted to know, you mentioned that the exports from Middle East have increased. And if I just go through your last con call, I saw that there was a huge increase in the imports. But on a 9-month number, if you see then there is only 7% kind of increase Y-o-Y basis. So going forward, do you see any huge increase in imports amid this Middle East exports going up?

There is -- Middle Eastern material is coming from Iran, from Qatar and a couple of other countries. And Iran is under a lot of pressure. They have very heavy stocks. So their exports -- sale prices are very low, so that is what is putting pressure now. And also, as was mentioned earlier, domestic production has gone up of caustic soda truly in the country. So both these factors combined are having an impact on the prices.

And in the first 6 months last year, there was pretty low import because there was this requirement of BIS approval. It's only towards the end of second quarter, people started getting BIS approval there. So there was not that much import in the last year, or first 4, 5 months.

Right. So if we exclude the impact of BIS, then actually, the imports have gone up substantially?

Correct, correct.

Yes.

Right. So -- okay. Another question, sir, you mentioned right now the prices are hovering around $250 to $260 a tonne. And I'm seeing the presentation, it mentioned $316 a tonne as of December, CFR Southeast Asia. So this $250 to $260 per tonne, you are -- are you saying that the prices have declined from $316 to this level in the current month? Or...

There was a contract which came in from Iran, and that one contract prices were very low.

Which was around $250 a tonne?

$265 or $270 or something like that.

Okay. But generally -- but the general price in the international market is still around $300 to $320 a tonne?

No. It's a little around $300, sub $300.

Sub $300, okay. Sir, last question, just on the aluminum side. You mentioned that there are different grades of alumina. As in aluminum, producers are using different grades of alumina, which has different -- different requirement for caustic soda. So right now, we are seeing that in the aluminum industry, the aluminum producers -- like the secondary market is exponentially growing vis-a-vis the primary market, as in the aluminum scrap is increasingly used to manufacture aluminum. So are we actually seeing that in our volumes? Because right now, you mentioned that the volumes have increased, which has actually supported the margins. But going forward, do you see any problem for the volumes?

I think, unfortunately, the growth of the caustic industry last season was just -- last year was just about 2%. Our people are feeling that going forward, the export should come back to 5%, 6% growth. And the Government of India -- the industry is working with government also to see how we can get better prices as well as simultaneously, we are expecting next couple of quarters, economy also to pick up, so demand should also pick up. So that should help in terms of little higher demand coming in. And India is working very actively on exporting flakes and lime. They're studying both these factors. So all these combined, it's a continuous ongoing effort to see what all can be done to get a better domestic realization for majority of their products, and how do we sort of get a better average realization for everything. So I think it's an ongoing activity. I think it's not a one-off, one-on. It's an ongoing thing, which keep changing from time to time.

The next question is from the line of Harshal Shah, an individual investor.

Just wanted to know...

Hello?

Hello.

Yes, yes, please go ahead.

Yes, sorry. Just had a quick question on PVC. Is there any plans for expansion on the PVC business going forward, considering a lot of these PVC pipe manufacturers are setting up huge expansion plans, and there could be steady demand?

As we mentioned earlier, we have just commissioned, 2 months back, the expansion of PVC. So we are now at 220 tonnes a day. So we just commissioned that just about 2 months ago.

Okay. And other than the recent commissioning, has it just -- has it been running at close to full capacity?

Yes, yes, yes. We actually balance out between PVC -- manufacturing PVC or selling calcium carbide because we work out what is a better netback on the cost of power. So based on that we take a view and swing between PVC and carbide.

The next question is from the line of Navneet Dahiya, an individual investor.

I wanted your guidance on capacity additions in FY '21 and FY '22 in the caustic soda business. You mentioned [Technical Difficulty] this year, so what's it for the next 2 years?

To the best of our knowledge, no major capacity addition announcement has been done for FY '21. But FY '22, we are coming up with 700-tonne plant and GACL has also announced equal addition. Whether it will happen in that year or not, we will have to wait and see basically.

So cumulatively, it should be about 12%, yours and GACL's?

So 1.5% would mean about 5 lakh tonne, which is about 11%, 12%, yes.

Okay. What is the breakeven price, sir? In December, I think your realization was at about INR 23,954 for your caustic soda. What is the breakeven price at which people will stop making money?

PBDIT costs, I think, for people who have captive power because a lot will depend on what is the power cost for different people. But us, it should be anywhere between INR 18,000 to INR 20,000 at PBDIT level.

Okay. And the current prevailing [Technical Difficulty] much?

Pardon me?

The current prevailing domestic price would be how much in rupee terms?

You yourself said December it was INR 23,500.

I said right now, basically, right now. Is it for the...?

So right now, we don't know right now. We'll come to know at the month end what has been that month's price, so right now we don't know.

Okay. What is your debt guidance for FY '21? Are we looking at similar levels of debt or increase or decrease, so given that new CapEx is also coming in?

See we have said that we will keep our debt between 1.5 to 2x EBITDA, so we will maintain within that now.

Okay...

Your voice is breaking.

Is it better now?

Yes, please go ahead.

So our debt level, we have said that we will maintain between 1.5x to 2x EBITDA, in between that.

I understand. Okay, lastly, on your farm solutions business, this is in addition to what one of the previous participants had asked. So there is a sharp increase in your turnover as well as profitability in Q3. You did INR 62 crores of EBIT in Q3 versus, what, INR 47 crores or INR 41 crores in the entire FY '18 and FY '19. So how should we look at this business going forward? As in, is this the trend that we should look at? Or is there some one-offs in this quarter? How should we look at while projecting your farm solutions?

See, there is no one-off in this quarter. But I think you should -- we would just like to highlight, these are seasonal businesses. So it's not that you can multiply any quarter by 4 and say that would be the yearly number. This is the period when all the rabi inputs principally, seed, et cetera, gets sold, right? So it would be better to look at year as a whole rather than individual quarter being representative and take that as the base for other quarters.

The next question is from the line of [ Saket Kapoor ] from Kapoor Company.

Sir, I was unfortunate that call disconnected. I heard half of the reply about that alumina mix use of caustic soda. So sir, currently, how have -- has this ratio changed? How has the consumption pattern changed in percentage terms? Has there been a big deviation that has happened in the conditions...?

Sorry, can you repeat the question?

Sir, I was -- sir, you were explaining me that different aluminum producers have started -- there is a big variation between the users of caustic soda. So has that resulted in a big deviation, I mean, a divergent in the consumption pattern for caustic soda?

There has been a swing. There has been a swing, I don't know the figure exactly. Aluminum [Foreign Language], but yes, because of the quality of alumina, the requirement of caustic goes up and down.

Okay. And this is likely to deteriorate going [Foreign Language] technological disruption [Foreign Language] is that going into it? Or...

So that depends on what sort of material -- that depends on what sort of material the aluminum manufacturers get.

Right. Sir, if you could give the idea, sir, what kind of -- what will be the quantum of projects that we capitalize in quarter 4, sir?

Pardon me?

The coming quarters, what would be the value of projects that will be capitalized? Any more projects are going to be capitalized in the Q4?

Yes, we are capitalizing the power plant of 66-megawatt, which is about INR 250 crores.

Okay. And that will result in an additional depreciation of 5% of the value?

Yes, on an annualized basis, 5%, so which means for a quarter, about INR 2 crores, INR 3 crores.

Right. Sir, could you explain, sir, what is the reason for the pledge of shares by promoters, sir?

No, no, there is no pledge of shares. It has already been informed to the stock exchange and to the investors that there is no pledge. All the loan agreements of all the companies put a non-disposable clause that you can't do anything to change the control. So what we have informed to the stock exchange is that this kind of clause exists in our agreements also. Whereby if there is any change in control, it has to be done with the permission of lenders, but there is no pledge otherwise.

But sir, when we look at the shareholding pattern, the number of shares pledged or otherwise encumbered shows their promoter holdings being encumbered at 7 crores 95 lakh shares. So there's a -- this is a non-disposal agreement, but still, these are to the lenders only, the shares.

So that's what I am explaining, the non-disposal is in that form that the lenders of the company put this condition that if the promoters want to change control, it has to be done with their permission.

Okay. And sir, no drawing limit or drawing power or anything has been done on account of the value of the shares?

Sorry?

There's no pledge.

There's no pledge. So...

Okay. There's no pledge, so there's no question of...

The shares are absolutely clean.

So -- and this clause that I'm saying exists in all companies, which avail loans of limits from the banks, that if there is a change in control at any stage, it has to be done with the permission of the consortium or lender.

Okay. Sir, just technical understanding, sir, so as the sugarcane juice started production of ethanol, what will happen to the molasses in that case? I'm not an industry person. That -- if it is directly done, then the molasses part will also be -- is there any change in the quantum of molasses generated? Or what happens there?

There won't be any molasses generated.

No, if you take the cane juice to ethanol, there will be no molasses left.

There's no sugar, there's no molasses. There's only ethanol.

Okay. Sir, but in that case, then the molasses quantity will fall, the commitment which the government has asked for, the U.P. government of 18%.

Yes, you're right. Absolutely.

You're right. The sugar and molasses both will go.

Yes, there'll be lower production. There'll be lower sugar and molasses production. There'll be 0 molasses production, 0 sugar production. And cane juice goes directly to make ethanol.

Okay. So if that happens, then it will be hit on the people who are dependent on the molasses industry?

No, that depends on our own economics. It's our decision not on someone else's. We have to decide what we want to do with our juice, what we want to do with B-Heavy, what we want to do with this.

Consuming factor of molasses...

No, no, I'm saying, frankly, from that point of view, we are as if it is saying that we can consume our own entire molasses on ourselves, ourselves. We don't need to sell it outside in any case because of our distilleries. We have 2 distilleries of 350,000 liters per day capacity, which can consume the entire molasses manufactured by us, so we don't need to sell molasses outside to anyone.

Right, sir. And -- well one more point, sir. When we see that the nature of the various varieties of business we are doing that we -- if we divide it into the 2 major categories, Chloro-Vinyl, if they are complementing each other with chlorine being the byproduct from the caustic soda and then we going for carbide or PVC depending upon market conditions. Sugar, the other sectors, the distillery, the cogeneration gets articulated, but how can, sir -- how is the farm solutions, Bioseed and fertilizer, gel with the business vertical? Just wanted to understand, sir, if there can be an idea of value creation by having separate entities altogether? Or it's not in the annual?

We are not evaluating any halving off or separation of the business right now, we want to keep it together.

Because sir, that is, I think, one of the reasons that we are getting a very low enterprise value also. If we take the price earning ratio also, there has been the decrease of commodity also, but it was a suggestion. And, sir, secondly, on the fertilizer front, sir, urea has been a business, sir, where it has been extremely difficult for private payers, even what private -- public sector companies are also not being making money, and there's a lot of money being stuck with the government agency. So what has been our rationale to continue this urea business for us? How is this complementing to us, sir?

See it is, one, still giving some profits. Secondly, we are also discussing with the government about the new policy for urea. Depending what comes out of that, we'll get to know better what is the situation of the urea industry. And we are an agri inputs company, so urea is one of the products, along with 15 other products, which we are selling to the farmer. So we can provide a basket of products to the farmer. So as of now, we are running with the urea business also. As I mentioned earlier that there is a discussion on the new policy for urea, which we should get to know in a couple of months' time, hopefully, then we'll see. But urea has been a business with us for the last 50 years. Our fertilizer plant was set up in 1969, and it's still working well since then. So we are in the business right now.

Right, sir. And, sir, additionally, we have seen -- you have very well explained to us that the farm solutions and the Bioseed are seasonal in nature. So generally, the last quarter does not contribute. This segment will not be contributing to the bottom line in any way, so this will be the way things will happen this year also? There will be no change? The seasonality factor will be in place for the fourth quarter?

Fourth quarter is a pretty short quarter, small quarter for these businesses. So turnover will be much less if that's what you are...

But sugar contributes substantially.

Okay. So, sir, there will be addition from the sugar. Sir, since the crushing will be over and [ seasonality ] will be there on that front?

Yes, yes.

Right, sir. It's a good trend that you're giving -- continuously giving interim dividend, sir. This shows your attitude towards minority shareholders like us. And great job, sir. So sir, over ending, we will be expecting a muted sentiment only if you're willing since you have very well-articulated that the prices of the major products -- chemical products are still hovering lower levels, so there won't be any big deviation as such. And our plants will be running above the utilization levels of what we have done for the quarter. That should be the -- sum up the...

Yes, that's the benefit of the capitalization and capital expenditures, which got commissioned, ethanol and power and PVC between December and January. The benefits will start flowing in mainly from the next quarter going forward. The benefits of the capital expenditure will start reflecting in the coming quarter and then in the full next year.

Sir, one point was missing in my -- I am just repeating it. Sir, U.P. government has upped the -- your -- the molasses contribution towards the alcohol industry for the greater tax generation. So if the sugar mills start deciding to go directly to make ethanol from the sugarcane juice itself then there would be a dent on the tax collection in terms of the IMFL that goes from the molasses. So how will this equation work out? In one way, government is asking different people -- producers to come up -- to produce ethanol directly from sugarcane juice. And on the other side, they are trying to garner more revenue from -- selling more -- allocating more molasses to the liquor industry. How will this -- both points gel together, sir?

So this is the dichotomy, which was there in the opening remarks also, that the 2 things which the central -- the state government has done: one is cutting the price of cogenerated power and second is increasing this allocation of 18% molasses for country liquor. This is contrary to what the central government wants to do, that is increasing the ethanol production.

Right, sir. So this is a dichotomy that needs to be resolved from their end only. But any major changes we have to do in our distillery from which the cane juice can be directly converted into ethanol? Any...

No.

No. Then what stops us, sir, from directly consuming juice to ethanol? What is the delta that I want to understand, that is allowing us to go for first molasses and then into ethanol?

So we have just commissioned our second distillery. We are new into manufacturing ethanol from B-Heavy. There are some other people who are older in the distillery business. They're experimenting with cane juice. We want to see how their, I mean, outcome is, and then we will take a call going down the road.

The next question is from the line of Yash Kapoor from Kapoor & Company.

Sir, on analyzing our company, in the due course of time, is there any plan for getting shareholder value in form of demerger? There are so many businesses.

We just replied that we are not looking at separation of any business or halving off to any company.

Okay. No, you just sold out your Indonesia -- the subsidiary, which you've given in your...

Selling out is separate.

You're right, we just sold off, which is not a very large component. But yes, we wanted to exit those businesses, we sold it out.

Okay. Sir, if I compare your company with Rallis India, if we compare these 2 companies, our company commands a lesser P/E ratio as compared to such company, which are totally farm-based company, farmer-specific company. Is there any specific reason, sir, why market is not giving us that type of premium?

I thought you would be able to answer that better, why are you not giving premium.

I agree with you, sir, but some way -- maybe one of the reasons is maybe the high promoter shareholding in pledge in spite of low finance costs.

There is no pledge, we just explained.

We just explained that also.

There is 0 pledge. Just to clarify to you, I want to make it very clear, we have not pledged, not pledged a single share of the promoter shareholding to anyone. There are no shares pledged at all.

But in the disclosure, some -- it has been shown, that's why this question was...

We just explained, it's a bank's requirement.

See, we just explained this that as a part of company taking loans from banks, we put a condition that any change in the control or management has to be done with the approval of those lenders. So as per the new definition of SEBI, this amounts to creating -- what is it called, other restrictions -- otherwise encumberment. It says, SEBI asked us to disclose pledge and otherwise encumberment on the share, so this amounts to an otherwise encumberment, that's why this disclosure has been done. And we have filed a clarification also with the stock exchange, which is available explaining this particular problem.

Okay, sir. Sir, one thing regarding Himachal Pradesh project, that which -- you have been given a note on it. If you can give more clarification, is there any amount we have invested that they have canceled -- the government has canceled? If you can throw some light on it?

Yes, so you're right. We had invested about INR 22 crores, INR 23 crores as the initial premium. Government has canceled the project because it was not viable. Government also agrees that it is not viable in its present shape. So we are now requesting government to refund that particular amount, for which we have asked as per the contract for an arbitrator to be appointed. So that process is going on for appointment of arbitration.

How hopeful are we? Should we take, as per prudence accounting policy, some provision on it? Will it be prudent?

That has already been fully provided, sir.

Okay. You've provided it. Sir, lastly, if you can throw some light on this one policy, which we are seeing in various good corporates, like DCM Shriram is a very respected corporate Shriram group. Similarly, this one concept I want to compare with Kirloskar Group. Now whatever power they are generating, they want to be net power-free. Like the concept of net debt-free. Are we in this regard planning? Why I say so, sir, I'm from Kolkata, one of the companies like ITC, they command a very high premium. To go straight back to my first question where I asked about low premium, sir, these are certain factors where if we work on for 4 or 5 years, if we have vision, then I think our P/E can very well expand to twice what we are today. We are today commanding a P/E of 7 to 8, whereas our profitability is very high. And one of the gentlemen also asked about a very low enterprise value, which has been commanded. In fact, in the market, the amount of net profit, which you are generating hardly listed company -- in the listed companies, sir, very few companies are command -- have been able to earn such a handsome amount. So that's why this suggestion has been made. Are we planning in this regard that we are going to be a net debt-free basis, say, suppose by 5 years or 7 years down the line? And the net power surplus, say, suppose 7 years or 8 years down the line, are we thinking in that regard?

You're talking about green power or...?

Sir, the total carbon, which we are consuming and the total green energy we are exporting or we are -- rather we are producing, the net equation is that we are net carbon positive or energy positive.

They're actually generating green power and there is surplus in green power. Their own consumption as well as -- it will be nonrenewable sources of ours. But our power requirement is very high. Their power requirement is very...

Yes, I'll just clarify. You can be net power exporter, net water exporter, you can be net on these provided: One, what's your source of generation. Secondly, what is your capital requirements? In our case, at Kota, our requirement of power as of today is approximately 155 megawatts. In Gujarat factory, we already generate 120 megawatts. We are putting up another 120-megawatt coal-based power plant, so that we can then totally, in Gujarat, produce about, what, 2,000 tonnes per day of caustic soda. So this net power issue does not come into our case because for us, power is a raw material. Without power, we cannot manufacture any products. What we are very conscious about is ensuring that the emission standards we are adhering to are well within the standards laid down by the government, so that it is the most efficient power plant on a world scale. That is our approach. But our approach is, because our raw material, which is power, is needed by us, we have to generate power from coal and bagasse.

Okay. No, I appreciate it. In fact, my submission was in the regard of ESG, that is environment...

Sorry?

I Hello. I think he's logged out.

Yes. The lines of the current participant has dropped off. We'll be taking the last question. That is from the line of Aman Sonthalia from AK Securities. The line for Aman Sonthalia also has dropped off. And that was the last question. Sir, would you like to add any closing remarks?

Yes, yes. Ladies and gentlemen, we thank you for your participation in our Q3 and 9 months financial year '20 earnings conference call. We have outlined the strategic direction and the steps being pursued for the same. As we achieve our milestones through these initiatives, we are confident of sustained overall growth in financial performance underlined by a stronger business, enhanced cost competitiveness, multiple earning streams and stronger balance sheet. We are simultaneously adopting contemporary technologies and engagement tools, and upgrading our processes and practices to strengthen our value proposition to the customers and deepen the employee engagement within the company. Once again, we'd like to thank you for joining us today on the conference call. Goodbye.

Thank you. Ladies and gentlemen, on behalf of DCM Shriram Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.