DCM Shriram Limited (DCMSHRIRAM) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to DCM Shriram Limited Q4 FY '20 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Siddharth Rangnekar from CDR India. Thank you, and over to you, Mr. Rangnekar.

Thank you. Good afternoon, and thank you for joining us on DCM Shriram Limited's Quarter 4 and 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; Mr. J.K. Jain, CFO; Mr. Amit Agarwal, CFO designate 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. Before we begin, please 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 earlier. I would now like to invite Mr. Ajay Shriram to give us a brief overview on the company's performance and his views going forward. Over to you, sir.

Thank you, Siddharth. Good afternoon, ladies and gentlemen, and a warm welcome to the company's earnings conference call for quarter 4 and financial year '20. The company recorded satisfactory performance during the tough business environment. The strategic initiatives taken by the company over the period and during this year have all contributed positively to optimize the operations, financial performance and capital employed. We increased the chlor-alkali capacity by 332 tonnes per day, that is about 22%, in April '19, commissioned the 200 kiloliters per day distillery in November '19 and started the 66-megawatt power plant in February '20 to replace old 50-megawatt power plants. These projects added to the turnover and earnings during financial year '20 and will provide benefits for the full year in financial year '21. Simultaneously, we exited the bulk fertilizer trading business fully with the sale of our subsidiary, Shri Ganesh Fertilizers (sic) [ Shri Ganpati Fertilizers ], which makes SSP. We also exited the underperforming hybrid seeds businesses at Vietnam and Indonesia. These steps will help us in more efficient use of capital. In our sugar business, we have contracted to export almost 19 lakh quintals of sugar and diverted almost 5 lakh quintals of sugar to ethanol. These steps helped us reducing working capital requirements by approximately INR 700 crores. In continuation to the strategic path of value addition to businesses through higher integration, the company has decided to enter into the business of country liquor within the ambit of the sugar business. The Board has approved an investment of INR 42.4 crores to set up the country liquor bottling plant with a capacity of 11,000 cases per day at Hariawan, UP, our sugar unit there, as a forward integration of sugar distillery operations. This would also enable stream capacity between ethanol and country liquor. The COVID-19 and the lockdown with effect from March 24 '19 did result in suspension of operations in some of our businesses -- the lockdown with effect on 24th March '20, did result in suspension of operations in some of our businesses. The sugar and bioseed businesses continued normal operations. All other businesses have restarted operations between first week of April and mid-May 2020. Fertilizer and SFS have reached normal levels of operations. Chloro-Vinyl, Fenesta and cement businesses are operating at 50% to 70% capacity. The production is increasing in line with market demand. The prices of some of these products have been soft. We are taking all required steps to protect our facilities and people by adopting the best practices during these difficult times. We have also engaged and worked with the communities to support through them all possible steps. These include donations to government funds, manufacture and distribution of disinfectants and sanitizers, distribution of masks and gloves, spreading awareness and working with the district administrations in supporting their efforts. Now I would like to share with you briefly business-wise developments. Sugar. The Indian sugar balance continues to be in high surplus. Sugar stocks as on September 20, are expected to be approximately 12 million tonnes against normal requirements of 5 million tonnes. COVID-19 has adversely impacted the sugar demand. And if the demand continues to be low, the inventory as on September 20 could be higher. The sugar year 2021 is expected to record higher production than 27 million tonnes expected for sugar year '20. The country is expected to export about 5 million tonnes of sugar in sugar year '20. It is imperative that India continues to increase exports going forward so as to manage sugar surpluses. The ethanol program also requires further push. During sugar year '20, the industry expects to divert approximately 0.75 million tonnes of sugar to ethanol through cane juice or B-Heavy molasses. The overall blending percentage for the country is below 5% so far in this year. In this situation, there is need for more steps by government to enable higher diversion of sugar to ethanol. The overall cane arrears in the country as on May 20 are expected to be approximately INR 20,000 crores, including UP's arrears of about INR 16,000 crores. The governments, therefore, have to continue with existing steps and take some further steps to enable the operations of this critical sector to continue without major disturbances. We completed the cane crushing for sugar year '20 in May '20 with a total cane crush of 598 lakh quintals versus 542 lakh quintals last season, and a recovery of 11.92% in the current year on a comparable basis vis-à-vis 12.09% in the last season. The recovery after factoring in the impact of diversion of sugar through B-Heavy molasses to ethanol was 11.1%. The sugar inventory as on 31st May, '20 is 40.5 lakh quintals versus 45 lakh quintals last year. This could be possible through higher exports and production of B-Heavy molasses into ethanol. The second distillery commissioned in November '19 is working satisfactorily and has strengthened the overall business in all respects. We will work with government for further sugar exports in the coming months and also in the next sugar season. We are also taking all steps to maximize the overall ethanol production and also the B-Heavy ethanol production. We have also decided to set up a country liquor business, as mentioned earlier, for further integration and value addition in the sugar business. This would involve investment by INR 42 crores and could also use up about 5 lakh quintals of molasses each year, which otherwise would have been sold in the market at a very low price. Chemicals. The prices of chlor-alkali have witnessed a significant correction over last year. Financial year '19 witnessed abnormally high prices, which was a result of high global prices as well as restriction on imports last year due to requirements of quality approvals by the Indian authorities. Normalization of imports at a time when domestic capacity was also increasing has led to a sharp decline in prices. The global and domestic prices have started stabilizing before the disturbances relating to COVID-19. Post COVID-19 lockdown, the clear pricing picture is still to emerge. So far, however, the prices are range bound. The domestic production capacity has gone up from 4.28 million tonnes on 31st March, '19 to 4.5 million tonnes in March '20. The capacity may further go up by approximately 10% in financial year '21. The net imports of caustic soda in financial year '20 was 2.08 lakh tonnes versus 0.73 lakh tonnes last year. The domestic caustic prices are now aligned with the international prices. The trends in consuming sectors are mixed so far. The textile sector and the construction-related sectors are seeing slower start post COVID-19 lockdown. This is restricting the capacity utilization in the caustic plants. We are reworking the implementation schedule of expansion of 700 tonnes per day caustic capacity in [ SSE ] Bharuch along with the 500 tonnes per day flaker and a new power plant of 120 megawatts, taking into account the disruption caused by COVID-19. Plastics. The PVC business has recorded lower prices globally as -- and as well as in the Indian markets after COVID-19 disturbances. The prices have come down by approximately USD 1.50 per tonne vis-à-vis pre-COVID levels. The experts expect slower improvement in prices for this item. The prices of carbide, however, are firm and are expected to remain at these levels. With the commissioning of the 66-megawatt power plant at Kota, our cost structure will improve. 40-megawatt additional PVC capacity will also help us in optimizing the relative movements in PVC and carbide prices. Agri inputs. This segment covers our SFS business, Bioseed business and fertilizer businesses. Shriram Farm Solutions, or SFS, is strengthening its focus value-added agri inputs. It is focusing on introducing differentiated and customized agri inputs which can help farmers deal with evolving challenges in agriculture. With forecast of a normal monsoon and positive impetus in the agriculture sector in the country, the business is seeing good growth in Kharif '20 and also going forward. In Bioseed, our efforts to diversify further into other crops is bearing good traction. Strategically, we have exited our Indonesia and Vietnam operations. We continue to focus on India and Philippines. Our product pipeline across corn, cotton, paddy and vegetables is good. This, along with normal monsoons, will auger well for the growth of business in financial year '20 -- '21, sorry. In fertilizers, the government has removed ambiguities in the modified NPS-III urea pricing policy. We are hopeful for positive movements in this direction. However, as a result of COVID-19, the government spending is under stress, which may lead to lower releases of subsidy during financial year '21. Fenesta. The business did well in financial year '20, driven by volumes in retail as well as institutional sales. This was achieved in a tough real estate market. We also launched System Aluminium windows during the year. This will help us in enhancing our customer segments and overall volumes. It will also enable us to meet more needs of our existing customers through a single source. Post COVID-19 lockdown, the business has started well, actually better than the general expectations. We are seeing higher interest from retail as well as from project customers. We are also seeing faster mobilization of construction activities. The business has already achieved over 50% size vis-à-vis pre COVID levels. Due to COVID-19 and the pressure on businesses, we are revisiting our fixed costs at the corporate level as well as the SBU level. We are sure this will help us now and going forward. To sum up, we feel we are strengthening our businesses every year in terms of diversity of revenue profile, competitiveness and consumer value proposition. We are also simultaneously ensuring healthy cash generation and an overall strong balance sheet. With this, I would now like to invite Vikram to take you through the discussions on our financial performance. Thank you. Vikram?

Thank you. Good afternoon, everyone. I will first discuss the highlights of our Q4 financial year '20 results. The revenues during Q4 came in at INR 1,917 crores, higher by 2% year-on-year. The lockdown restrictions in March '19 adversely impacted the turnover by about INR 156 crores, including deferment of INR 67 crores in sales. The business-wise highlights are as follows. Overall, sugar revenues grew 32% year-on-year to INR 838 crores. This follows higher distillery sales, better sugar domestic volumes and realizations for sugar. Distillery volumes increased 83% year-on-year, consequent to the commissioning of our new 200 KLD distillery. Chemicals segment revenues stood 32% lower year-on-year due to the lower ECU realization by 35% year-on-year. Volumes were lower by 4% year-on-year, the COVID effect being 10%. Softer caustic liquid and chlorine prices both have driven ECU realizations lower. Value-added segment of Shriram Farm Solutions reported 22% year-on-year growth in revenues. The bulk fertilizer volume declined as a part of the planned exit strategy. Hence, the net increase in revenues for the division was 2% year-on-year. The COVID-19 effect included loss of chlorine sales -- loss of sales in Chloro-Vinyl of INR 49 crores, Fenesta INR 17 crores and other businesses, INR 23.5 crores. Ethanol sales of INR 67 crores got deferred and likely to be made up in financial year '21. PBDIT in Q4 '20 stood at INR 355 crores lower by 19% year-on-year. That is a reduction of INR 84 crores. The adverse impact of COVID-19 was approximately INR 56 crores, including deferment of INR 25 crores. The main highlights of this are as under. The decline in chlor-alkali product prices adversely impacted the earnings by INR 158 crores. Overall, sugar PBDIT was lower by INR 28 crores year-on-year. The decline was mainly attributable to the following: lower power tariffs by approximately INR 25 crores; and deferment of ethanol sales by approximately INR 25 crores. Fertilizer PBDIT stood at INR 76 crores relative to approximately negative INR 30 crores during same period last year. That is a positive movement of INR 106 crores. INR 91 crores out of this movement relates to provisions for reimbursement of fixed costs by government. We had created a provision of INR 38 crores in Q4 '19 and INR 15 crores during April to December '19 on this account. The total provisions of INR 53 crores were reversed in Q4 '20, consequent to clarifications issued by the government on this subject. Cement recorded profits with better realization and lower costs. Bioseed and SFS have very short season in Q4 and recorded lower losses with increase in turnover. Let me now also share with you the highlights of the performance of the full year ending financial year '20. Revenues came in at INR 767 crores -- INR 7,767 crores versus INR 7,771 crores during '19. COVID-19 impact, as mentioned earlier, being INR 156 crores. Sugar revenue stood 7% higher year-on-year at INR 2,522 crores on account of higher distillery volumes by 23%. Higher sugar exports and higher domestic sugar prices up 8% year-on-year. Lower domestic volumes pulled down the overall growth. Chemicals revenues stood lower by 10% year-on-year to INR 1,725 crores. ECU prices declined by 23% year-on-year, partly mitigated by higher volumes of 13% year-on-year. Turnover of value-added inputs vertical of Shriram Farm Solutions went up by 16% year-on-year. Fenesta was up by 7.5% and Cement by 7%. PBDIT declined by INR 161 crores year-on-year to INR 1,295 crores. PBDIT was impacted positively by additional profits from new capacities commissioned during the year. Chemicals impact of additional production, INR 142 crores; distillery, INR 24 crores; and the cost reduction due to 66 megawatts of power plant, about INR 10 crores. SFS, Fenesta, Cement, Bioseed and Plastics also reported growth in profits. Chemicals PBDIT reduced 35% year-on-year to INR 633 crores in spite of higher volumes as the softer prices had an adverse impact of almost INR 500 crores for the full year. The reduction in power prices in sugar business had an adverse impact of INR [Technical Difficulty]

Requesting participants to please stay online. We've just lost the line for the chairperson. Requesting you all to please stay connected. We'll just have the chairperson reconnected to the conference. Sir, you may please go ahead, your line is reconnected.

No, his line is cut.

Let me reconnect to the chairperson back, please allow me a minute.

Vikram is not audible.

[Operator Instructions] We now have the line for Mr. Vikram Shriram connected. Sir, over to you.

I'm not sure where I went off. So I'm just taking [Technical Difficulty] Can someone...

We can hear you now. Carry on, Vikram.

Sir, you were explaining the power -- loss due to power rate drop.

By the U.P. State Electricity Board.

Yes. I'm just trying to find...

The impact of power rate drop on the annual profit.

Okay. The reduction in power prices in sugar business had an adverse impact of approximately INR 52 crores. As mentioned earlier, COVID-19 adversely impacted the profits by INR 56 crores. PAT during financial year '20 was at INR 711 crores versus INR 906 crores in financial year '19. The total capital employed net of cash went up by INR 916 crores during the year. The net fixed asset went up by INR 348 crores and net working capital by INR 568 crores. The company could restrict the working capital increase by expeditious export all sugar export quantity, approximately 19 lakh quintals and by diverting over 5 lakh quintals of sugar to ethanol. Both these steps help in reducing working capital by almost INR 700 crores. The higher capital employed of INR 916 crores led to net debt going up by INR 358 crores. The overall net debt at about 1.5x EBITDA is comfortable. The company has cash and cash equivalents of INR 525 -- INR 527 crores, and adequate unutilized working capital limit. It has met all its business, financial and statutory compliances and expects to continue to meet these obligations going forward. We continue to focus on keeping our working capital under control during these times while simultaneously enhancing sales value. We expect that these steps will enable us to have continuous positive cash flows going forward. Thank you. That brings me to the end of my conclusion, financial discussion, and we will be happy to take questions that you may have. Thank you.

[Operator Instructions] We take the first question from the line of Tejas Sheth from Nippon India Mutual Fund.

Just 2 questions. Starting -- I'm happy to see that over last 2, 3 years, the capital allocation strategy of this company has improved substantially where we have invested a good chunk of capital in high-growth segments and cutting down or divesting the segments where we are not seeing much return on the capital. I just wanted to know, going ahead, considering that we have built up a good base of cash generation this year, and I think even going ahead, what would be the capital allocation strategy for next 2 to 3 years?

Thank you. Thank you for asking this question. No, we've actually been always conscious, and we've realized that money is expensive. We realize that the interest meter never stops ticking, no weekends, no holidays, no Republic Day holiday, no Independence Day holiday. So we are conscious of where we spend our money. And we've made -- actually, 2 years ago, I think we shared with all of you, we made a long-term strategic plan of looking at which businesses we want to invest in. And our strategy is to move in that. So we are looking at investing in our chemicals business for growing the existing business as well as the value-added businesses. Similarly, we are looking at growing our Fenesta business. We are looking at growing our sugar and distillery business. We are looking at growing our Shriram Farm Solutions business, carrying that forward. We are seeing what more investment is needed in the research side of our Bioseed business. So I think in terms of capital expenditure, we've got a structured plan where we want to continue growing and investing in a considered wise way without overspending. I think that is the approach we have adopted, and we will continue doing that. Of course, the COVID-19 pandemic, which has affected the whole world as far as the business environment management is concerned, has made us step back a little bit and rework out our strategic timing of the investments we have online. I think that our Board felt is the right thing to do. So we are working on that. But our plans to grow these businesses, as we have talked in the past and what I've shared with you just now, is very much on the agenda.

Yes. So sir, any delay or deferment in the new capacity expansion of chlor-alkali?

Yes. We are working out, reworking the time limit of how it's going to work out. We are discussing with our suppliers. We are discussing the market and seeing the market situation. We'll take a call on that in the next couple of months.

Okay. Okay. Sir, my second question was considering that chlorine is the coproduct or byproduct for -- along with caustic soda, and the current logistics issue is kind of impacting -- would be impacting chlorine dispensation. Is that also impacting our caustic soda manufacturing ramp up post COVID or post lockdown?

Well it is. You see the caustic soda chlorine is an integrated business, and we have to sell both. Caustic soda, we can convert to flakes and store, but chlorine one can't store too much. Good thing is that in our Gujarat factory, approximately 50% of our total chlorine production goes by a direct pipeline supply to 5, 6 different buyers who are on a long-term contract with us. So that gives us a strength of buying, and they have started their production, not at full capacity because their exports to Europe, et cetera, are affected, but they are picking up capacity. So at -- in fact, in Gujarat, we are running today at over 60% the chlor-alkali capacity. In Kota, it's running even higher than that. So there is an impact on chlorine also. Both of them are impacted, but we are expecting over the next 3 to 6 months, production levels should keep going up.

Okay. Sir, follow-up on that only, we were looking to invest on the downstream products of chlorine. I think you also had hired a business head to form up a business plan towards that. Can you just highlight on the status of that?

Sure. So, we -- in fact, that is very much on the agenda to move for value-added businesses in our chemical business. And because of this COVID, it's got a little disrupted in terms of our discussions and the direction we are taking. But this is very much on the agenda. It is on the radar screen. We are working on that quite actively. But I do want to mention, the business head we have taken is not only for this, it is for our entire chemicals division. So the gentleman who joined us, Mr. Shekhar, is looking after entire chemicals business in Bharuch in Gujarat as well as Kota. And overall, he's looking after this, he will include -- this will include the value-added chemicals also.

Okay. Okay. Sir, just last question. How do you see the realization of caustic soda in -- over next 12 to 18 months, considering that the supplies are going to pick up at a higher rate than the demand?

I wish I could answer that question. But let's be real. I think no one can predict prices. As we had mentioned earlier, '19 was an unusual year in terms of prices. International business is down. The corona pandemic impact is across the board, all over the world. So our focus and attention is how do we improve efficiencies, how do we reduce our costs, how do we optimize our supply chains so that our cost is minimum in terms of delivery to the customer, and our cost is minimum in terms of ex-works cost of production. So that is our focus and attention going forward.

We take the next question from the line of Rahul Veera from Abakkus Asset Management.

So sir, since we are delaying this chlor-alkali plant, what will be the outlook for FY '21 and '22 CapEx?

Pardon me?

Sir, since we will be delaying the chlor-alkali plant.

Yes.

So what will be CapEx for FY '21 without the chlor-alkali plant now?

See, one, we still haven't worked out what the exact schedule of this project will be. It may be just playing around with a quarter-to-quarter also. The total investment of this project is INR 1,070 crores. Earlier, we were wanting to do in 2021 and '21, '22 beginning. It may just get deferred by a quarter, 2 quarter, but exact, we will know as and when we finish the schedule.

Okay, okay, okay. Fair point, sir. And sir, current -- I understand the volumes would not be there, but current ECU realizations will be around the -- similar to last quarter, Q4?

It's difficult to give numbers because right now the prices are changing every day. The focus is on volume increase. These are changing very fast. But the global price are still range-bound as we -- as CMD mentioned in his opening remarks. They are still hovering within the range only.

Right. And sir, I think, there was a large capacity that was going to come near Gandhidham by Kutch Chemicals, for the chlor-alkali. Has it started, sir?

Yes, that started in March, April, 500 tonnes per day.

Okay. Okay. So there will be some pressure on the realizations then going in the next 1 or 2 quarters?

Yes. Right now, capacity is not an issue. Everyone is operating at 60% only. So more capacity or less is not making a difference on this.

[Operator Instructions] We take the next question from the line of Anand Bhavnani from Unifi Capital.

Sir, I have 2 questions. First one was on sugar business. Sugar business has seen some impact. You mentioned in the opening remarks, INR 25 crores of less power sales, INR 25 crores due to delayed of offtake of ethanol. Margins in this quarter, therefore, year-on-year are like down significantly. Last year, we had PBIT margins of 36%, now it's 23%. So for next 12 to 18 months, what's your sense of this segment? Do you anticipate any quick turnaround or it will be a while? What's your opinion?

Ajit, J.K.? Ajit?

So see, the margin here is an issue of product mix. We have made very heavy exports during Q4. That's one is affecting the overall margin. Also, we did almost entire ethanol on B-Heavy molasses which has lower margin compared to C. So instead of comparing it on a quarter-to-quarter basis, will be good to look at yearly margin figures for your calculations or for making any judgment.

Sure. So if I were to now look at from yearly perspective, you mentioned that for caustic, 2019 was a great year, and then from middle of 2019, the prices started falling. So if I were to do a similar comparison for sugar, how would you place FY '20 in terms of the performance? Was it a normal year, was it above normal? And how should we think of FY '21?

So as far as sugar price is concerned, I would say this is supported by government policy. So it was almost normal kind of thing in terms of sugar price. Ethanol is again a regulated commodity and power is also a regulated commodity. So we don't see any significant outward -- output price movement unless government changes its policy framework. The other significant sector is the cane price, which government still has to decide what cane price they will have for next year. So those 2 factors will decide what the margins will be going forward.

Okay. And sir, you mentioned...

In addition, the margin was probably affected also because of B-Heavy molasses, which has lower margin compared to normal C molasses in this particular quarter.

Okay. Okay. And sir, in terms of capital allocation, you gave us a qualitative sense that we'll be focusing on chemicals, Fenesta, sugar and distillery and bioseeds. So if you can quantify a bit like over the next couple of years, what kind of ballpark CapEx do you see for each of these segments?

J.K.?

See, I don't think it is done like that. There are proposals which are continuously and are steady, depending upon how mature a proposal is and how attractive a proposal is at a point of time, it is taken upon that basis. But what CMD has stated is that these are the growth areas. Some of them are capital intensive, some of them are not. I mean like Bioseed or Fenesta are not very high capital intensive. They are more operating expense intensive. The main CapEx happens in chemicals and sugar only. So there's no fixed ratio. We will take it up depending upon the merit of the project at a point of time. But all these are growth areas is what CMD has indicated to you.

Sure. So sir, in terms of capital allocation, do you have an internal quantitative metric that you follow, IRR or payback or ROCE, which you can...

So there are 2 things we have said earlier also that one, we keep our debt-to-EBITDA at around 1.5 and not to grow in any case beyond 2 even in emergency. So that's one thing which guides the investment allocation. The second part is we have a hurdle rate. We look at, at least at project stage a hurdle rate of over 20%, but sometimes you do for strategic reasons, a little lower hurdle rate investment also. But as far as possible, we look for more than 20%.

So this 20%, the IRR rate that you're talking, is it?

It is ROCE. ROCE.

[Operator Instructions] We take the next question from the line of Pratik Tholiya from Elara Capital.

Sir, just wanted to understand on the caustic soda and chlorine part. You said your capacities are already closer to 60% in Gujarat and even higher in Kota.

Correct.

Sir, based on your discussion with your end customers, and you mentioned a lot of them are -- have a long term supply. How soon are you -- are they saying that they are able to ramp up their utilizations to the pre-COVID level so that our capacity can also go up to that? -- So what -- are they talking of any sort of time lines or looking at any sort of a quarterly run rate or anything on that front?

We've had lot of discussions and continuously keep interfacing with our customers. I think it's very difficult to give such a concrete time line because besides the domestic market, we are also working on exporting our products on caustic soda flakes. One is seeing how that can help, that will also help us in terms of moving further. Or chlorine market, how to expand further geographically. So we are continuously working on improving capacities and balancing out the realizations. I think it's an ongoing exercise. And I think as the economy in general, in India and outside India pick up, I think this industry too will pick up. As I mentioned earlier, we do feel in the next 3 to 6 months, we should be in a much better operating capacity than what we are today.

Better would mean somewhere around -- closer to 75% sort of? Based on the current scenario, I mean, if you're -- the way things are normalizing or the relaxations that we are seeing today, if things only improve from here, do you think 75% we can achieve by, say, third quarter?

Look, I'll be honest with you. I think we are hoping we come to 75%, 80% in about 3 to 6 months. But it depends so much on the world economy. It depends so much on the world economy and how India's economy moves forward. But we should be 75% to 80%, 3 to 6 months from now, yes.

Sure, sure. Okay. Got it. And also for CapEx, you said that there is some deferment. So other than that, we have only 1 CapEx that is of the country liquor, right, which is the confirmed CapEx for this year?

Yes, and the normal CapEx, that's all.

That is the maintenance capital. That would be how much, sir?

It is anywhere between INR 125 to INR 150, but because of present situation, we are still reviewing it and trying to see what can be minimized there.

Okay. Sure. Understood. And sir, what is the thought process in the agri business. This year, we are expecting a normal monsoon, and there's a lot of buoyancy in the agri sector, a lot of government reforms have also been announced. We've also been rationalizing on the product. So what is the strategy over there in terms of new launches and whether it's the seeds part or the other -- the farm solution part? Where do we see our business now going forward after you have cut the tail and lot of loss-making segments are out?

J.K. J.K.?

So see, there are 2 parts, Pratik, here. One is Bioseed side and second is SFS. SFS has a wider portfolio and it has launched several products in crop care chemicals as well as growth nutrients over the period. Bioseed, unfortunately, hasn't launched very significant except in vegetable, tomato and some corn because of the last year being a little tight agriculturally, so they haven't tried several new products. Also because of the issue for approval of new technology, there, launch of new product is a little less than what we would like it to be. Now both these businesses, in any case, during April-May have reported better sales and better collection. Part of it could also be a preponement of sales because of the fear that farmers have about lockdown, there is a feeling that they are preponing all the purchases. So the critical thing will be what happens in June and July. If the sales carries on with this trend, I think we will register good growth. If it is actually a preponement and June-July sales drop, then of course, the growth will be less.

Got it. Sir, just lastly, I forgot to ask. Sir, what would be the closing prices during the quarter, Q4? And what is it currently, sir?

See, current price, Pratik, as I said, is difficult to give right now because it is changing every day. We won't be able to give you the current prices. As far as Q4 ECUs are concerned, they were roughly same as Q3. There was not much change. Individually, also they were roughly the same level.

Okay. Sir, but if you give some color on, today, we are already on the 9th of June, so almost 2 months of the quarter and 1 week of this month has also gone, almost 9 months have gone. Sir, average color on what is the sense on the prices what you are seeing?

You know the past policy. We don't share the data in between the quarter. It is only done at the quarter end.

Sir, I'm not asking you specific numbers, but just it is in the similar trajectory of going up, down, some color on that?

Pratik, we won't like to deal with the price situation more than what CMD has already said in his remarks.

We take the next question from the line of Vivek Ramakrishnan from DSP Mutual Fund.

Sir, sorry, we're all like a bit of a stuck record regarding CapEx, and that's because there are so many ifs and buts in businesses today. Sugar prices are down, fertilizer subsidy, we don't know when it will come and chlor-alkali is volatile. So that's why the CapEx becomes very important. In terms of a certain quantum, you've guided that debt-to-EBITDA will be max at 2x, even if there's an emergency, but it's already at 1.5x and this year looks tough. And then there is this NUP 2015 related CapEx, it is -- which has to be incurred if the government dictates. So could you just give us a flavor on what is necessary CapEx and what you will defer so that you'll maintain a debt-to-EBITDA below 2.5 -- 2.0.

J.K.?

So see, CapEx is only 1 item which you manage when you have to manage the fund flow. There are several other levers, which we are working on, CMD and VCMD indicated that through our aggressive exports and shifting of B-Heavy, we have managed or we have been able to reduce the working capital requirement by INR 700 crores, which is not a small sum. So it's not only CapEx, which will help us in managing the debt-to-EBITDA level, it is also the cost side, which helps in increasing EBITDA and also the CapEx. Now we already said that the only sanctioned project right now is the Bharuch expansion, which is INR 1,070 crore, which we are reworking out when should we take up and that will be dependent on -- I mean, this financing aspect will be one of the factors which will be considered. The only other project that we have announced, a small project of this country liquor thing, so there is no significant CapEx, which is planned other than this. So CapEx is already bare minimum. I think we will work on improving EBITDA and manage working capital so that we remain within this norm that we have just specified.

That's very helpful. In terms of -- just 1 question on this NUP 2015 fertilizer. Do you have to do any CapEx regarding that per the NSD norms? Or there's nothing which is slated for that?

I don't think the NUP -- I'm not fully updated, has NUP been announced?

We are not undertaking any significant CapEx for meeting NUP requirements.

We take the next question from the line of Pritesh Chheda from Lucky Investment.

Sir, I'm just confirming the chlor-alkali CapEx per tonne if we have to do now is about INR 25,000 to INR 27,000 per tonne. Is that number correct? And when you said 20% ROCE is my target ROCE, so at the current ECU realization and the current EBIT that I see of about INR 9 or INR 10 per tonne -- or per kg, does that 20% ROCE target meets at the current [Technical Difficulty]? That's my question.

So just wanted to clarify that this INR 1,070 crore, I think CMD had mentioned also, includes 700 TPD chlor-alkali capacity, it includes 120-megawatt power plant and a 500 tonne per day flaker per plant additionally. So you can't -- the composition of this particular product varies at different stages. You won't be able to compare the CapEx of -- at different stages because of this reason. So we don't require 120-megawatt only for 700. It will meet the captive power requirement of the earlier expansion also. So that's how this 120-megawatt has been derived. Is not only for this 700 tonnes per day. But I think our internal benchmarks only gives us that whatever expenditure we are going to incur is amongst the most efficient and competitive in the industry.

The second part of that, there is a cost reduction element in that also, as J.K. mentioned, because it replaces borrowed power with own captive power to the extent of part of the existing capacity.

So in the INR 1,070 crore, the additional expenditure is basically the power side, right?

Power and 500 tonnes per day flaker plant.

Flaker. Okay. Okay. Okay. And at the current ECU realization, which is -- looks like some 26,000, 27,000 and the current EBIT, which looks like some 9,000 to 10,000, if you put a CapEx now, does it justify your 20% ROCE or it won't justify the 20% ROCE in the current ECU?

See, there are 2 factors why we don't have the latest calculations based on today's ECU. But obviously, in a commodity, you can't take the bottom of the cycle for a CapEx decision; neither can you take the top of the cycle for CapEx decision. So it is done on the basis of an average sort of thing. But my sense is that even at 26,000, 27,000, it should be very close to about 18%, 20%.

Okay. And I was...

Just looking forward 18 months, that's the implementation time.

And I want to just clarify the CapEx for FY '21. Now the CapEx for FY '21 as of now is just the maintenance CapEx of INR 150 crores. Is that correct?

And the country liquor project of INR 42 crores that we have announced, plus depending upon the completion schedule that we freeze for INR 1,070 crore project, some CapEx for tying up equipments will have to be incurred, which may not be very significant, but it will still be there.

Okay. So even if you start your -- so this 700 TPD in your opinion now should be pushed to FY '23 as commercialization?

I think we -- let's complete our review. We will share the schedule with them at the earliest.

And just -- I was just looking at your -- do you mind sharing what were the sugar volumes sold for FY '20? And what was the caustic, the ECU -- the chemicals volume sold?

So we have -- I think in our presentation, all those details are there, but I can give you the sugar sales volume. Domestic was 50.9 lakh quintal vis-à-vis 55 lakh quintal last year, and export was 12.7 lakh -- 12.79 lakh quintals as far as sugar is concerned. As far as chemicals is concerned, our sales volume was 5.25 lakh tonne.

Sir, we proceed to the next question. It's from the line of Rohan Gupta from Edelweiss.

Sir, first question is on this sugar country liquor investment, which you have made. So I just wanted to understand that we have been talking on a forward integration in our ethanol business. Just want to understand that how much forward integration we are willing to take ahead in this country liquor business going forward. And though it currently looks like a small investment of INR 40 crore, INR 45 crore, I just want to understand that what kind of thought process and what kind of investment over the next 2 to 3 years, we believe that we will be able to make in this business?

Ajit, do you want to?

Yes. So basically, Rohan, over here, this investment of INR 42 crores is in 2 phases, INR 33 crores is in Phase 1 and INR 9 crores is in Phase 2, and that will perhaps be in the year 2022. So the power integration, which you're talking about, at this point of time, we're only envisaging making country liquor. However, I mean, going forward, I mean, the business team will need to come out with any other kind of forward integration that we would like to do after a couple of years.

So as of now, this is the investment restriction. Because I understand that earlier, we had planned that we'll restrict ourselves until the ethanol because that will give us the complete backward as well as forward integration. It seems now that, I mean, we are getting ambitious in terms of now moving ahead with the country liquor. So I understand that it probably gives us the choice of either making ethanol or country liquor probably wherever the margins will be higher. I just wanted to understand that -- the thought process there.

I'll just clarify this a little further. There are certain obligations which sugar manufacturers have to supply their -- I mean, molasses to country liquor manufacturers at a discount. So to be able to capture that value, we have decided to go ahead with the country liquor manufacturing ourselves, so that we don't lose that value of molasses by selling it under obligation at a discount.

Okay. That's fine. Sir, second question on this caustic soda plants, on chlor-alkali plant. Sir, what is the breakeven utilization for us in our chlor-alkali plant? I mean at 60% utilization right now, are we breaking even? Or if you just can give that number?

It is positive at PBDIT level, Rohan.

Yes, we are breaking even at the EBITDA level.

At 60% utilization.

Pardon me?

At 60% utilization currently with the current realization of ECU...

Yes, we are positive at PBDIT level.

PBDIT, I mean, EBITDA level?

Yes.

Yes.

Okay. Okay. At the current ECU realization, right, sir?

Absolutely, sir. Absolutely, Rohan babu.

Okay. Sir, on this PVC prices, we have seen that we have taken from December onward, there has been increase in PVC realization for us as far as the DCM is concerned. But global prices have -- PVC have not actually gone up. So is there any -- just a very temporary blip, which we are seeing in a PVC realization for our company? Or it's -- it's mainly because of the currency depreciation and all in some other ways that we have been able to benefit?

[Technical Difficulty] current...

J.K., 1 minute. J.K., just wait. K.K., why don't you answer that? K.K.?

Yes. Yes, you're right. There has been a little higher realization because the custom duties today are at around 10%. But generally, we have been -- the prices in India ruling at -- in comparison to the imported prices only. And we sometimes realize a little better premium because of the difficulties in logistics. And there's also been some benefit because of the exchange rate, the benefit that we are getting. So -- and currently, if you say the present prices, there is a little disruption in the global supply chains also. So the entire imported demand, we are importing almost 60% of our requirement in the country. So there's a little restriction in the imports today. So that's helping the domestic production also, though the consumptions are much lower at this point of time.

Okay. Sir, there was initially, I think that recently there was talks also of imposing additional 15% duty on many chemicals. I think PVC was also part of that. Have there any been further development or any industry representations on that, that talks about the further imposition of any additional duty on chemicals?

It's still under consideration by the government. So we're not sure how it's going to take shape. Yes, industry has been kind of working with the government on this. But we're not -- nothing has been decided as of now.

Okay. Sir, just last question from my side. Sir, this is more on the specialty chemicals. You have almost been focusing on -- sorry, you have been looking at the forward integration on our chemical business, so basically chlorine-based derivative. You have already hired Mr. Shekhar and I believe that the road map, which will be much clear now. I just want to understand, sir, in a post-COVID environment, there is a fair amount of, I would say, the expected change is expected from China and how the world is dependent on China for many chemicals. It's been now 3 months also of the COVID environment. I just want to understand do you see the chemical business for you, especially the forward integrated business on the chlorine-based derivatives and all is going to change significantly or has been positively beneficiary of this COVID environment or the China -- I mean, how the world is reacting against China now and talking about reducing the sourcing from China. Do you see that it has positively impacted your business or your future plans, which you wanted to invest in forward integration of the chlorine business chain? And any update if you'd like to share on that?

See, I'll be -- our approach what I mentioned earlier is we get into the business for the long term. At the moment, the things are very fluid and uncertain. But we go on the fundamentals of the growth of particular industries, the customer base, the needs and the forward outlook of what is the demand supplier situation likely to be. So our view on our value-added chemicals is still very much on. It is on the agenda. We are studying the various issues. Yes, because of COVID, we have had to revisit and re-question some of the issues. But that does not mean we will not go in. We do plan to go in and go in that direction because we get into business for the long haul. It's not for 1 year, 2 years, but we are in there for the next 10 years and 20 years. And then we get into that and then you continuously keep adding businesses and value, so you keep growing it as a business. So long-term point of view, we will get into this regardless of what is the situation today.

Sir, actually, my question was on other way around. I'm not saying that we'll not get in. I'm just saying that have we become even more aggressive or the opportunities -- opportunities have even increased more now in the current scenario. That's what I was looking from that angle.

Frankly speaking, to be honest with you, unfortunately, we do not seem to have increased much in what we are looking at because we also are looking around. But because these value-added businesses have their own status vis-à-vis society and vis-à-vis the future outlook of the business. But we are with our eyes open, and we'll see whatever we can get.

We take the next question from the line of Saket Kapoor from Kapoor & Company.

Sir, firstly, about this 500 tonne per day capacity coming up in the state of Gujarat, who is the manufacturer, sir, the new capacity?

Kutch Chemical. Kutch Chemical.

Kutch Chemical, yes.

And this is a greenfield project?

No, they are already into some chemical businesses. They were not in caustic soda. So for caustic, it's a new business for them, yes.

Okay, sir. And sir, how old are our plants? I mean, I think so there is a filament change that happens to improve -- that improves the productivity from around 15% to 20%. So sir, are any -- that kind of CapEx is due? And, I mean, what is the thought process on that? The change in filaments?

Filament in what business are you talking about?

In the caustic soda segment, sir?

I think you're talking about membrane, which is used in the electrolyzer.

Right, sir. Right sir, I'm wrong in expressing it.

It is very clear we move with the latest world-class technology and we continuously keep upgrading. And that is part of our philosophy. So today, our cost -- our efficiencies and costs are comparable on a world-class scale. So we are continuously upgrading. So we are not looking at any onetime change of anything. It's an ongoing process to be world-class at whatever we do.

Okay. Sir, coming to the point right now on the -- this country liquor segment part. I mean, don't you think that there is a bit of more overcrowding that all sugar manufacturers, just to take -- is -- they're taking advantage of the molasses being sold to the chemical industry is the only reason that is pushing people like you and other sugar manufacturers also to move into the country liquor and making the space a bit overcrowded and overcapacity?

Ajit?

Yes. I think in this country liquor segment, the level of transparency in the state of Uttar Pradesh has increased dramatically in the last 3 or 4 years. So taking that into account as well as taking into account the value loss by selling the molasses at a much cheaper price to noncountry liquor -- I mean, to country liquor manufacturers, if you don't make it yourself, we decided to move ahead in the segment.

Sir, could you quantify the delta, sir? At what rate -- you can quantify the delta, sir? At what rate are we selling to this manufacturer? And what are we going to realize out of the country liquor sale?

So we sell at about INR 120 a quintal. The equivalent value through country liquor could be anywhere between INR 400 to INR 500 a liter -- per quintal.

INR 400 to INR 500?

Yes.

Okay. Okay. Sir, and a couple of more questions, sir. So firstly about the subsidiary sale of SG PPL (sic) [ SGFL. ] Sir, what has been the realization? And how has this subsidiary contributed to the top line and bottom line for the last year, SPL (sic) [ SGFL ]?

So SGFL's turnover used to be, I think, about INR 30 crores or so and as far as profit is concerned, it was a loss-making entity for pretty long. EBITDA loss used to be about INR 2.5 crores or so on a continuous basis. So that's why we have been looking for exiting this particular thing for quite some time.

And sir, whom have you sold to and what is the realization value?

So all this has been communicated to the stock exchange...

I'll go to the stock exchange, no issue for that. And coming to the urea business part, sir. Sir, currently, sir, I mean, urea is a regulated segment and the issue of the subsidy and all, there is a flip-flop now also from every government. So sir, what is allowing us to keep this business in our vertical? I mean, what value addition are you finding in going through the urea business?

J.K.?

Well -- yes, yes, there are problems in this business, but this is also part of our agri business. There are cash flow problems here, but we only hope that going forward, the subsidy outstanding would reduce because this business is still a very important part of our agri segment.

And sir, for this Hariyali Kisaan Bazaar part, sir, could you explain to us how this fits into? And then what exactly is the business model here? It is generating good revenue and -- but not contributing to the bottom line. What exactly are we doing here, if you could elaborate here?

J.K.?

So see this Hariyali Kisaan, we had started sometime 15, 20 years ago as a rural retail business selling agri inputs and other products. It also used to have petrol pumps selling diesel and petrol under BPCL alliance. So we were dealers of BPCL. Now in 2012, we discontinued the entire Hariyali business and we are in -- we have exited everything else, except this BPCL petrol pump, which takes a little time to transfer the dealerships, et cetera, and sell off the properties. So right now, we are in that process where we are continuously reducing and transferring the dealership and selling the property. It's not a business we are pursuing as such.

Okay. So this turnover of INR 200 around, I think, sir, if I'm not wrong, is mainly on...

Is mainly the petrol and diesel outlets that we still have, which also we want to exit at the earliest.

So what is the proceed we are expecting, sir, when we would be exiting it?

So see, I think total book value, which is mark-to-market every year is, I think, about INR 55 crores to INR 60 crores for the properties that we own. So based on the latest estimate, we should be able to realize that much value.

Right, sir. Sir, one very small observation. Sir, the effort the team is giving, the presentation and all, everything is top-notch and I think so much above the industry level from the -- if you take your peer comparison also. But sir, we find that the -- there is some disconnect, which the management is having with the investing community, I'm referring to the mutual fund, the PMS guys. Because in the shareholding pattern, we find around only 1% of our equity being held in the mutual fund fraternity, whereas that our EBITDA -- our EBITDA to the market share is like around 3.5x or 4 if my calculations are not wrong. So I think, sir, our engagement in different verticals are definitely not giving the right valuation to the company? And what is the thought process, sir, of the management behind it? Because, sir, you people are continuing with buybacks, you are very liberal in giving dividend, you are continuing with the con call, so every good work is being done to enhance value. But where is the difference, sir? Why is that -- this is not actually translating into the market capitalization?

So we can have a discussion with you and take your inputs, and we will also be discussing with other experts and see what more we can do.

Right, sir. And last point was about this Turnstone Investments Limited. Are they, in the sense -- I mean, the overseas corporate bodies which are shareholders, Stepan Holding Limited, they are holding 4.5%. Sir, are they any technology partner or in some of the others who have invested in the company?

They're very long shareholders. I think they are holding it since almost 20, 25 years. I won't know more than that.

Right, sir. And overall, sir, the -- earlier, the bank used to go for stress test for all organization. Now the country and every business is going through COVID test. So sir, going through what the circumstances are, how confident are you, sir, that the steps that we have taken, there will be a sustainability in the revenue going forward also? The way we have navigated earlier, how confident are you, sir, that things are much under your control that whenever the sentiment and the production -- I mean, the utilizing levels improve, the benefits will start flowing back?

So I think the best will be wait for a month. We are having a rating reviews by all the rating agencies. We are rated by CRISIL and ICRA, that itself will speak. But we as management are very confident about the sustainability and the financial and business strength of the company. We don't see any challenge on that account.

Country level, sir, are they down? On the sugar inventory level, if you could speak something as of now?

Sugar inventory, we have indicated in the opening remarks also for 31st March and 31st May. 31st May is about 40 lakh quintal.

For us, sir?

Pardon me?

For us, sir, for the company?

Yes, yes, 40 lakh quintal is for us only. For the country, it is in million tonnes.

Okay, sir. So it is now 40 lakh tonne as on May?

40 lakh quintal on 31st -- quintal not tonne.

Okay. And what it was for March?

I think it was about 45.

We take the next question from the line of Divya Jain from ICICI Mutual Fund.

Sir, one question regarding the caustic soda space. So there will be many other players who have been like -- could be weak players compared to us. So in this tough scenario, do you have seen anybody going out of the business?

Pardon me, I'm sorry, we couldn't hear you clearly. Could you kindly repeat the question?

So I'm basically trying to understand, considering the caustic soda has been in tough times because of the realization. So have you seen any player going out of business, the weaker players?

No. I think caustic soda is a commodity. And if you see the last 5-year, 7-year cycle, prices go up and down, that's part of the business. As of now, we are not seeing anyone going out of the business, even though prices are a little lower than what they've been averaging. But I think that depends player to player and how long this sustains and what is the sort of future outlook each one takes. So I -- we've not heard of anyone which is stopping operations.

Okay. And second thing, sir, on the client base we have for caustic, so I understand it's more of textile and construction. So is any other venture which is open to us or it will be concentrated to textile and also construction?

You are talking about in terms of…

[indiscernible]

J.K., one minute.

Basically, I'm talking our suppliers of caustic. So who we supply the caustic?

No, no, no. I think that -- we -- in fact in the reports, we said -- we have mentioned that textile and construction is under pressure. That is -- paper is also under pressure. But we are supplying our caustic soda, chlorine. Caustic goes to a lot of aluminum manufacturers, a lot of soap manufacturers, lot of other industries. Similarly, chlorine goes to a lot of value-added chemical people for water purification, et cetera, et cetera. So we have a very wide range of customers who buy caustic soda and chlorine from us, and we are not restricted to only 1 or 2 industry buyers.

And sir, what would be the top 5 customers contributing in the caustic? Like just on percentage term to help.

No, that would be very difficult to give. I don't know, J.K., can you -- do you have the top 5 customers?

No, I don't have the percentage, but we don't have any such concentration of customers where top 5 will contribute 60% or 70%, not like that. It's pretty well dispersed set of customers.

We take the next question from the line of Arushi Chaplot from First Water Advisors.

I just wanted to know the scenario of imports for caustic soda for the last quarter? And what were the general prices and from where all the imports were done?

I don't know. J.K., would you be doing the import prices of caustic soda?

So the prices, the import happens at global prices. The Southeast Asia prices had been running at about $300 CFR for quite some time. I mean, plus/minus 5% or 7%, that's the general price. The general import into India happens from Japan and Korea on the eastern side, and from Iran on western port. So these are the 2 places from where the imports happen predominantly.

We take the next question from the line of Sumant Kumar from Motilal Oswal.

So my question is regarding the power and power and fuel cost. So could you please tell us what is the coal cost currently? What is the inventory? And what level you have bought for the next quarter?

Coal?

Yes.

I don't know that J.K. has the price of coal. I don't have the price.

See, there are 2, 3 observations, Sumant, we can make. One is that the coal prices have been on the softer side over a period. As you know, in Bharuch, we are importing coal. The imported coal has been on softer side. If I remember correctly, I think fuel cost will be roughly INR 1.10 to INR 1.12 per kilo -- per 1,000 kilocalorie, and you use roughly 3,000 kilocalorie into 1 unit of power. So that's the broad metrics of the cost. Kota will be a little higher because Kota, we use domestic coal that may be about INR 0.05, INR 0.10 higher than this.

So why is the power and fuel cost lower in this quarter? And what is going to be in couple of quarters because there is a lot of volatility in the fuel prices.

No. Coal prices, of course, over the last 2 quarters or 3 quarters have been pretty steady, marginally soft only. So there is not that much volatility in power cost.

Okay. And talking about overall industry revival, you discussed textile, paper, and others, which industry is going to drive your business from 60% to 75%, couple of co-industry?

That we think -- we are talking about chlor-alkali industry, is it?

Yes, yes, yes.

One sec. I'll be honest. We don't look at 1 industry or 2 industries. We are supplying to 8 to 10 different industries, so all of them have to start picking up. And I think the government also wants all industries to pick up and start moving to take the entire economy forward, not 1 or 2 industries. Specifically, today, paper is under a lot of trouble because all schools, colleges, offices, everything is closed. So once that starts picking up, paper will also pick up. So we are looking at a large range of industries where we are supplying, and as the economy moves up to help them financially and otherwise move up, we'll also get the benefit of that.

We take the next question from the line of Anand Bhavnani from Unifi Capital.

Just wanted to understand, with respect to our Hariyali Kisaan revenues, you mentioned it is also fuel retailing. Did I understand it correctly?

Yes.

So we -- I've seen that the EBIT losses have widened in FY '20. So can you help us understand the reasons for the same?

So see, what -- there are 2 items which come there. One is the revenue and the EBITDA, which happens through fuel sales. The second is whatever properties we are holding, and I mentioned that we are wanting to sell all those properties, whatever is the profit and loss in any year through sale of those properties, that also gets reflected as Hariyali's profit and loss. So the quarter-to-quarter movement must have been primarily in those profit or loss from property sales.

Sir, in India, broadly over the last 4, 5, 6 years, property rates, either would have been stable or appreciated single digit like inflation, so how can we end up losing money selling property?

Anand, country property appreciates…

Sir, [Foreign Language]

No, every year, we are making an assessment of the entire property through independent set of valuers. The property condition in rural actually is worse than even urban. All of you know that in last year or before last year, the rural was the one which was suffering the most. So the property transactions is very difficult to conduct in rural.

Okay. So sir, what would be the loss in the property versus the gain in the fuel sales. Can you give us a split up? What's the EBIT gain from the fuel sales?

If you think it is very material, we can get into that. To me, the overall number must be very small in Hariyali Kisaan Bazaar overall. But if you feel it is very material, you can contact us. We will give you all the details.

Well ladies and gentlemen, that was the last question for today. I would now like to hand the conference back to the management for their closing comments. Over to you, all.

Thank you. Ladies and gentlemen, we thank you for your participation in our Q4 and financial year '20 earning conference call. The present pandemic has emerged as a common challenge for mankind. And as a responsible corporate, we are focused presently on rendering all the help we can while simultaneously resuming normalized operations. We're also working on utilizing the learnings of this period to further strengthen our operations, including customer engagements, operating practices, supply chain, cost structures, working capital cycle, et cetera, on a sustained basis. Through our growth initiatives, efforts will be on further strengthening efficiencies, augmenting capacities and developing a stronger value-added profile within our offering. We are confident of a sustained growth over the medium term. Once again, we would like to thank you for taking time out and joining us today. Thank you.

Thank you. On behalf of DCM Shriram Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.