DCW Limited (DCW) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q3 FY '25 DCW Limited Conference Call hosted by Arihant Capital. [Operator Instructions] I now hand the conference over to Ms. Kunjal Agarwal. Thank you, and over to you, ma'am.

Hello, and good afternoon to everyone. On behalf of Arihant Capital Markets, I thank you all for joining into Q3 FY '25 Earnings Conference Call of DCW Limited. Today from the management, we have Mr. Saatvik Jain, President; Mr. Amitabh Gupta, CEO; Mr. Sudarshan Ganapathy, COO; and Mr. Pradipto Mukherjee, CFO. So without any further delay, I would hand over the call to Mr. Saatvik Jain for his opening remarks. Over to you, sir.

Thank you. Good afternoon, everyone, and welcome to DCW's earnings call for the third quarter of financial year 2025. I hope you all had the opportunity to review our earnings presentation and financial results, which have been uploaded to the exchanges and to our website. The global chemical industry continues to navigate a challenging environment marked by geopolitical uncertainties, sluggish demand and pricing pressures across various segments. India, in particular, has faced significant headwinds due to an influx of lower-cost imports from China. The Chinese chemical industry operating at underutilized capacities has led to aggressive exports, keeping global chemical prices under pressure. India, lacking protective trade measures in certain segments has become a key dumping ground for various Chinese chemicals causing significant pricing distress. That said, towards the end of Q3, we saw the Chinese government rolling out stimulus measures aimed at reviving its domestic economy, including supporting local governments and infrastructure projects. Over time, this is expected to increase China's internal consumption and ease some of the export pressures that have been impacting global chemical markets. However, in the near term, the pricing pain due to Chinese imports remains a significant challenge for domestic manufacturers. On the policy front, while provisional antidumping duty on PVC was recommended by the Ministry of Commerce in October, its implementation by the Ministry of Finance remains pending. This delay has resulted in continued dumping of PVC into the Indian market, further depressing prices in Q4. However, we continue to remain optimistic that the government will support the domestic industry from these unfair trade practices with the duty implementation in the near future. Looking at the export market, demand for synthetic rutile remains sluggish throughout 2025, impacting both volumes and pricing. However, we have seen some improvement in Q4 with volumes picking up, albeit at lower realizations. Encouragingly, the outlook for FY '26 appears to be more positive as the global market conditions gradually improve. Amidst these industry-wide challenges, DCW has remained resilient, focusing on execution, operational efficiencies and strategic growth initiatives. Let me now walk you through our key performance highlights for the quarter. Despite weak global demand and pricing pressures, our capacity utilizations improved across all product segments with PVC and C-PVC operating at full capacity. For quarter 3, we achieved an overall capacity utilization above 80% across all our product categories. This is a testament to our strong operational execution and market positioning. While realizations of most of our products remained under pressure, our revenue from operations grew by 19% year-on-year, driven by volume growth across our portfolio. Specialty chemicals, which continue to be the backbone of our growth strategy, remained stable and provided the much needed margin consistency. This segment achieved its highest ever sales during the first 9 months of this fiscal. On the profitability front, we saw a turnaround in our EBITDA margin, both sequentially and year-on-year. This was backed by marginal improvements in our commodity business as well as strong volume growth in our specialty chemicals. Our specialty segment has been the key driver of bottom line stability, contributing to a 42% increase in EBITDA year-on-year. On our capital expenditure, we remain committed to our long-term strategy, balancing expansion with financial prudence. Our alternative energy project is near completion with the first phase expected to be operational by end of this month and second phase by the end of March. This initiative is expected to bring significant cost efficiencies and enhance our sustainability efforts. Our C-PVC expansion project, which we announced in our previous earnings call, is progressing well. Construction is underway, and we remain committed to commission the first phase by September of this year. Our strategic focus on scaling our specialty chemicals business while optimizing our commodity operations is delivering results. With increased capacities and strong demand outlook, we expect this segment to drive our future earnings stability. We are also executing our strategy of growth alongside debt reduction. Our long-term debt continues to decline year-on-year even as we add significant new volumes in our specialty business. This disciplined capital allocation is expected to enhance our bottom line through an improved margin profile and lower financing costs. Looking ahead, we remain cautiously optimistic. While pricing pressures persist, the early signs of demand recovery in select segments and the structural improvements that we have made over the past few quarters provide confidence in our long-term trajectory. Despite the ongoing challenges, we have taken proactive steps to strengthen our business fundamentals, ensuring we emerge stronger as the market stabilizes. With that, I request our CFO, Pradipto Mukherjee, to take you through our financials in detail. Over to you.

Good afternoon, everybody, and welcome to the earnings call. The revenue for the quarter gone by stood at INR 474 crores as against INR 398 crores in quarter 3 of last fiscal. That's an improvement by 19% Y-o-Y. The EBITDA for the quarter also stood at INR 62-odd crores versus INR 23 crores -- INR 24 crores in quarter 3 of -- over quarter 3 of FY '24, an increase by 160%. The revenue increase was predominantly driven by the specialty segment, both C-PVC and SIOP with the commercialization of the CapEx in quarter 4 of FY '24 and quarter 1 of FY '25, respectively. The other factors were export sales of synthetic rutile which finally saw some uptick, and we could conclude a sales of above 8 Kt for the quarter. The EBITDA for the quarter from specialty segment grew almost 50% and clocked at INR 48 crores. The commodity segment for the quarter had an EBITDA of INR 14 crores versus a loss in the last fiscal. The major savings on the commodity EBITDA was from PVC due to positive VCM PVC spread and also from the caustic where the realizations improved by 12% in quarter 3. Margin expansion was witnessed for the quarter, and it stood at 13% against 6% in quarter 3 of last fiscal. On a Q-o-Q basis, the revenue was 3% down at INR 474 crores, while caustic division clocked on higher revenues on back of higher synthetic rutile sales, PVC and C-PVC divisions were affected due to lower volumes in both the segments. This was also coupled by lower realizations of C-PVC by 7%. The EBITDA for the quarter stood at INR 61.8 crores, which was around 49% higher than the last quarter, which stood at INR 41.5 crores, while the specialty segment remained steady at INR 47.6 crores across both the quarters, the stream was in the commodity segment, which clocked a INR 14.2 crores profit as against a loss of INR 6 crores in the last quarter. This was, again, driven by the caustic prices increase by 11% and a better VCM PVC spread. On our 9-month Y-o-Y, the company's revenue stood at INR 1,462 crores, which is a 17% uptick from INR 1,250 crores. EBITDA stood at INR 155 crores, up from INR 125 crores, an improvement by 24%. The increase in the EBITDA from specialty grew to INR 143 crores in the 9 months, up by 62% from INR 88 crores in 9 months of last year. While the commodity EBITDA declined to INR 12 crores from INR 37 crores last year, majorly due to caustic division wherein there was a severe price correction in synthetic rutile by 32%. And the caustic prices more or less remained flat with a negative bias. Interest cost for the quarter stood at INR 16.25 crores, which is showing a gradual declining trend, with our scheduled repayment of term borrowings. The quarterly interest was lower by 10% Y-o-Y basis and 12% Q-o-Q basis. Term lending has been reducing and has reached a level of INR 400 crores, reduction of INR 410 crores in March '24 despite an INR 80 crores of fresh borrowings to support the C-PVC -- ongoing C-PVC business. The depreciation more or less remains same, inched a bit higher because of the capitalization of the C-PVC and SIOP CapEx has concluded in quarter 4 and quarter 1, respectively. The PBT for quarter 3 and 9 months stood at INR 20 crores and INR 28 crores, respectively. The company, both at the quarter level and 9-month level, has shown a significant increase in the profit before tax. The Y-o-Y quarter 3, there was a loss of INR 17 crores last quarter, which now clocked a profit of INR 20 crores. And at the 9-month level, more or less, it was breakeven last year, now we have concluded a PBT of INR 28 crores. The contribution from specialty along with the reduction in the interest cost has significantly benefited the PBT of the company, thereby the profit allocable to all our shareholders. Thank you. With this, we can have the floor open for question and answers.

[Operator Instructions] We have the first question of the line of Pujan Shah from Molecule Ventures.

My first question would be on the C-PVC side. So on the CapEx front, if we look on the historical side, the initial CapEx, what we have spent is around INR 3 lakh per TPA. And now what we have been spending for the additional 30,000 capacity is around INR 140 crores, which comes around 46,000. So do we -- already we have a land parcel in Sahupuram So is it the initial CapEx would be much higher in the upfront -- the next upcoming capacity would be lower? And what would be the on an average CapEx for each TPA if we wanted to understand?

No, we cannot really differentiate. When we put the plan for the first time, there's a lot of utilities which has been factored for the future expansion. So you have to segregate what has been the CapEx that we have done on the utilities because that will support even the expansion, which has supported the first phase, what we did now, and the second phase, what we are doing. Also, partly, we will have the utilities, which are already we have spent money on that. That's why you will see on paper, the CapEx for the further round of expansion is lower than what we have spent in the first phase. Also, the first phase also had a compounding capacity which we are not going to add in the second and third phase because we have the capacity available.

Additionally, to answer, I think last time we had given our CapEx figure of INR 125-odd crores, which was doubling of our C-PVC capacity from 10,000 tonnes to 20,000 tonnes and also debottlenecking of SIOP. Now we have announced -- our last announcement is for INR 140 crores from taking 20 Kt to 50 Kt. So I think if you see the investments what we have done, I mean just concluded CapEx, the next CapEx, what we have announced is more cost-effective from a capital per tonne off of C-PVC.

Got it. But in the initial phase, so we have a tie-up with Arkema, right? So is that agreement is a royalty agreement? What was the initial -- is that agreement still prevailing? Or is it now -- like what was the agreement with them?

The last -- the first agreement was on a onetime technology transfer agreement, which has the guarantees in place for 10 years. So as we talk now, we have the guarantee for the product quality for the first phase. The subsequent expansions, we have a royalty mode basis. There is a technology transfer fees, which has been kept at the lower side, and we have a royalty payment based on the product that we are going to sell. So the model is slightly different because in the Arkema side, they were not open for a royalty agreement so we have to pay upfront technology transfer agreement.

As of now, what would be the percentage of royalty we have been paying to them?

I don't think we can divulge that at this juncture.

And sir, on the soda ash part, so if you look into it, we have a machine impairment, which was impacting our sales and the profitability. So now if we like -- if that was been expected in Q4, so do we feel that in the coming years, in next 1 to 2 years, we'll achieve the same margins which we have been doing, like around -- roughly around 12%, 15% range, so what's your thought on that because even a few companies are also coming with their capacities as well as the global demand-supply dynamics are also impacting. So how we have been looking at this division, soda ash?

See, soda ash, we have been presently operating at around 80% to 85% capacity for the last 9 months, and we will continue to do so for quarter 4 as well. We would have our machinery in place to support 100% production and sale going forward from end of quarter 1, okay? So that's one part of the question. The second piece is that we would at a full steady state as our internal assumption goes, would do an EBIT of 18% to 20% at current prices. So industry has also been talking with the government in terms of supports, pricing supports or there has been a PIP -- MIP, which has also come in on the minimum imports into the country. I think they're leisuring with the government, which is going on to have a support mechanism for the current prices, if not better after the institution of ADD. So we think that the margin of 20% is quite achievable for when we do the full production, and we hope to achieve that in next year.

Sir, coming on the caustic soda and synthetic rutile. So understanding the part, can you just segregate because -- so recently, we have seen uptick in the caustic soda and Chinese prices are very firm in terms of saying that in the realization. While -- what was the impact of synthetic rutile which has been contributing? And what could be the margin in synthetic rutile as of now?

Well, it's Amitabh Gupta here. On the synthetic rutile front, we passed to a very bad pace, but things are much, much better for the year, '25, '26. We have been able to book orders more or less to the extent of our current production, and the prices are much better than what we were able to achieve during the year '24, '25. So I think synthetic rutile business is going to be much better next year as compared to last year -- as compared to this year.

And secondly, just to address your point that we have also done a positive EBITDA for the quarter, backed by increasing prices of caustic. And that has turned the segment from loss -- EBITDA loss to an EBITDA positive. We've done a INR 7 crore of EBITDA positive for the quarter.

But sir, as you have rightly said that synthetic rutile, we got that order book and we also get 2 years demand visibility. So what would be the EBITDA margin we could achieve in the synthetic rutile excluding caustic soda because we understand the variability of caustic soda?

Synthetic rutile, historic margins has been in the north of 20%, okay? So there has been some demand disruption in the last year and the year under review, which has led to a decrease in our overall profitability. But this is a one-off operation. I feel that going forward, we will be having that sort of a margin for this product, what has been the last 10 years average. However, we don't expect a V-shaped recovery. Recovery would be gradual. We're first securing our contracts with the customers on the long term and the pricing would only be reviewed based on the market prices prevailing.

And my bookkeeping question would be on the debt side. Sir, if you look the total debt cost is around -- cost of debt is around 14%, 15%, while our cost of debt, what we have been saying, in con call is 10%, 11%. So I'm not able to understand, so is that a differential due to -- we are looking at the end mark or what's the difference?

No, there is some working capital leverage. So when you are considering our term lending balance outstanding versus the interest cost, that will not match because of a couple of reasons. We operate on our working capital lending, which is basically non-fund base to support our purchase for VCM, which is important. Apart from that, since we have been maintaining a very healthy cash level in the balance sheet, around INR 175 crores, we chose to keep that in the balance sheet. We are running a working capital borrowing line as well for -- to address uncertain situation. And that's exactly where the interest is a bit high. But if you see, on a yearly level or a 9-month level, the interest cost has been gradually coming down.

So as our repayment terms is around almost INR 100 crores to INR 130 crores in the coming years.

Yes.

So will we be debt-free in the...

In 2.5 years' time.

Yes, yes, yes. Nice, sir. And last question on the SIOP division. So if we look at the industry, can you just give a broad idea on the total India market size and the global and -- because we have been the Asia's largest capacity out there and we have been dominant -- have a dominant position. So we wanted to understand how the demand dynamics work in this special segment?

Well, SIOP is an open demand it's in the vicinity of about 20,000 to 25,000 tonnes a year, our of which we are selling almost 9,000 tonnes to 10,000 tonnes. Our major sales are in the U.S. market, which is a very good and steady market for us. And more or less, whatever is our production capacity, we are doing that. And now we are embarking on putting on the micronization plant, which will increase our sales and also will be a big value addition to the product. The price of this micronized product is almost 30% to 35% more than the normal price.

So total, if you look at the global, what could be the demand, total global demand and supply?

Global demand is very difficult for us to predict because China, all said and done is a major producer in the country -- in the world. And to get the data from them is impossible. So see, we have been supplying to a few leading customers in the U.S., and we have a long-term tie-up with them. India market, it's basically we operate at 2 colors, which is red and yellow. So there will be a different volume which is taken for the overall synthetic SIOP. But for red and yellow, as I told that in India, it is around 25,000 tonnes, of which around 40% we are capturing as a company. For the U.S., there are a couple of customers with whom we have a long-term association, and we don't see any reduction in the volume there, rather we can expect some increase in volumes.

Yes. And one more thing I would like to add, maybe the volumes may not be very big, but we are introducing the black iron oxide, orange and brown in the market now. So our range is increasing. And of course, red has number of shares, yellow has number of shares, which we have got now.

And sir, regarding the tie-up with the Rockwood Pigments, still it's prevailing or what is the currently -- what's the agreement...

Rockwood does not exist anymore. Rockwood sold it to Huntsman, Huntsman sold it to Venator. So the things have changed hell of a lot. So Rockwood doesn't exist anymore in this business.

Okay. So we have -- we don't have any long-term agreement with Rockwood? As of now supplying -- we are not supplying to Rockwood, right?

There's nothing like Rockwood anymore.

And sir, do we feel a sustainable margin of 30%, 35% EBIT margins in SIOP for next 2 years?

So I think it's very difficult, sir, to give up margin call for us given the geopolitics which has been playing out. We are hopeful that we will be able to maintain the margin of 30% to 35%, both in SIOP and our C-PVC segment.

We have the next question from the line of [ Morgan Koushik ] from Trinetra Capital.

Sir, my first question is regarding -- like we are supplying into U.S. markets in the exports, like how much percentage of revenue comes from U.S. markets? And is there any impact from tariffs?

Practically 40% to 45% of our production goes in the U.S. market. And so forth, Mr. Trump has not announced any tariff on India. But I think...

Mr. Koushik, please keep your line on mute. [indiscernible] line.

Yes. So far, Mr. Trump has not announced any specific tariffs for India and not this product. So I think with this 10% increase in the tariff for China should help us a bit, but then later, only the time will tell. But frankly, we don't envisage any drop in the business in the U.S. because these are the long-term commitments, which we have got. And things should be steady as far as U.S. markets are concerned.

Sir, like C-PVC, C-PVC prices are coming down after doing the antidumping duties and all few countries, like where right now, like the major imports coming from any other countries apart from China and U.S.?

Imports are coming from Japan, Thailand, U.S.A. So imports from those countries have not really stopped because even when the duty was in place on China and Korea, imports are coming from Thailand, Japan and U.S.A., and which is still continuing to come because that volume, we will have to break, but that will take some time.

When we can expect normalcy, sir?

Normalcy, you see you are saying only one side because that's also a drop in the input price because prices are reduced because there is also a reduction in your input cost, which is PVC. So technically, if you see our margins have more or less remained the same between the last quarter and this quarter despite the prices going down because the input cost also has gone down.

Sir, on the CapEx side, C-PVC Phase 3 expansions, like what kind of asset turn we can expect, what kind of utilizations, like ramp-up we can expect?

So we have announced a 30 Kt increase in our C-PVC capacity, that too in phases. The first phase what we are undertaking is the -- from 20,000 tonnes to 40,000 tonnes. That's around 20,000 tonnes increase in our production and consequently sales. The market is there, obviously, to place these volumes. However, the pricing, as we discussed, was under pressure. And we are hopeful that from each -- from quarter 3 of next fiscal, we'll be gradually placing the volumes.

[Operator Instructions] We have the next question of the line of [ Parag Patel ], an individual investor.

So given all is going we should be seeing a C-PVC, right? Could you please reiterate whether it is a trend primarily driven by demand fluctuation or losing in competition from peers? Because already other peers are aggressively expanding. So what will be the demand outlook for the C-PVC? Additionally, for C-PVC becomes [indiscernible] C-PVC prices is negative increase of PVC?

I'm not able to hear you, boss. Can you please speak slowly and a bit clearly, please?

Okay, sure. So every call that C-PVC price is weak again. So C-PVC price decision is mainly driven by demand fluctuation or competition, aggressive pricing by the competitors?

Okay. I'll pause it there. It is a combination of both, number one. Number two, C-PVC prices are going down because PVC prices are also going down. So that's why I have been saying that the overall margin has more or less remained the same. And there is also a demand weakness in the construction sector because as a product, PVC pipes and C-PVC pipes tend to go in tandem. So there has been a decline in the PVC, C-PVC demand in the construction sector, which has had some impact on the demand. Having said that, it is not that the prices -- so you drop the price and you will sell. So the prices move in tandem with the PVC price with a lag. So that will continue. Tomorrow if the PVC prices go up, even C-PVC prices will go up. So on the usage side, what I'm trying to say is that higher availability will also result in higher demand coming. So there will not be a problem which we have seen in all the products. In fact, when Reliance came with their PVC capacity, the capacity was much more than the demand. But over the years, that demand opened up and it got consumed. So we don't see any problem in taking the product, be it our capacity or be it any other new capacity coming. There will be a lag for the demand to catch up, but availability will definitely improve the demand.

So could you please tell us what is the realization of the C-PVC right now for us?

C-PVC is around INR 130.

Okay. So going forward, we can see the deterioration in price and then the linkage of the PVC and C-PVC? Like many Chinese players are selling their C-PVC of 10,000 to 15,000 per tonne. So demand outlook will be similar to the India going forward? Or there will be any...

Just let me try and answer and address your question in a different way. See the ADD which has come in C-PVC is basically a fixed duty structure, unlike the previous antidumping duty, which was a fixed price structure. So when we say that it is a fixed duty structure, if the PVC prices go down, the prices of C-PVC will also go down but the spread will be available because of the ADD being there. Now secondly is the internal requirement of the country has gone with slow because the construction sector is working with lower. That has further had a bit of an impact in the C-PVC. The total volumes, requirement in the country on a steady state is much higher than we and our peer in India put together. It is still an import substitution product. So either on the demand side or on the margin side, we don't see an impact further then what is prevailing as of now. However, the situation being very dynamic, things may undergo a change, but our visibility and our understanding says the margin will be more or less protected, and there will be taker for our entire volumes. So as of now in the coming couple of years, we don't see things to deteriorate so far as C-PVC is concerned.

So is there any quality differentiation than our peers, like our quality is better for the C-PVC than our peers, we have any edge for C-PVC like that in the peers case?

We really will not be able to comment on our competitors' quality. What we can say is that we, as an organization or manufacturer, both of PVCs as well as C-PVC, which should give us a better edge compared to our competitor.

[Operator Instructions] We have the next from the line of Morgan Koushik from Trinetra Capital.

Sir, cash position is INR 175 crores as of Q3. Like what about the debt position? And also can you share our working capital side for this quarter and net payable receivables?

So our long-term debt or the term lending, as I told you, have come down sub INR 400 crores. It is around INR 395-odd crores with our scheduled repayments being on INR 130-odd to be paid. I think in 2, 2.5 years' time, we will be able to pay off the legacy debt. The debt which has been recently taken to support the C-PVC CapEx will have a 5-year window. That's a 5-year tenor debt which has been taken. On the working capital side, we have followed a discipline of having 80% of borrowings, I mean, fund-based borrowings to the FDs, 3 FDs what we have, and we are following that discipline quite comfortably. And third is we have some working capital nonfund-based, which are LCs, which are rotation on a part of our sundry creditors.

Sir, what about that working capital days in terms of is there any increase on inventories?

So our inventories, more or less, remain the same. Our inventory days, see, historically, as an organization, our DSO, I mean, days sales outstanding, is roughly 13 to 14 days at the organization level. Our creditor is around 90 to 100 days. Our inventory was going up in terms of days because of the export volumes we were unable to place for synthetic rutile predominantly. That, for the last quarter, first time, we had -- did a sale of the 8,000 tonnes, which is equal to our production. So on an inventory days, it would be maintained at a quarter-on-quarter level, and we hope that from next year onwards, the inventory days will also go down.

Sir, this renewable power projects, like how much cost savings we can expect in terms of operational side?

See, when we calculated when we got into the project, it was looking very promising because the coal prices at that point in time was very high, wherein we got into the project, the investment roughly would be around INR 25 crores to INR 30 crores. And we expected at that point in time for the savings to come at an annual level of north of INR 50 crores. I think now we anticipate the savings in the current price -- the blended prices of power to be at around INR 35 crores to INR 40 crores.

Sir, just Sahupuram facility has provided logistical advantages for exports, and if you could share what kind of like cost savings or synergies we are getting from this facility?

So I think we have our all-weather port out there, and that only helps to avail the sea route in transporting our materials like caustic and all the export materials. But having said that, if you are on our other side of the -- on the extreme side, that also has a challenge in terms of reaching up to -- I mean your sales would be limited on to the nearby customers. If you have to reach up to other customers, you have to pay more freight. So all in all, it gets balanced out in a way. But we obviously have that advantage of the Tuticorin port, which helps us use that sea route for exports and as well as imports.

Sir, any planned strategic partnerships or acquisitions in the pipeline?

Not at the moment, I think we are obviously evaluating an opportunity. But as of now, no. The expansions which have been announced are keeping us busy till at least next year. I think we would get into our drawing board for next level of growth somewhere early next year, next fiscal year. Maybe H1 of next fiscal, we could start forming up something for the next 5 years.

Sir, we are the INR 175 crore cash like is there any plan to utilize on future growth?

Obviously, that is one of the reasons we are trying to repay the debt, as I told you in 2 years' time, all the legacy debt will go off. We are also borrowing lower term loan than our repayment because if you know, we have made an announcement to do a CapEx of INR 140 crores, but I've gone ahead is the market to fund only INR 80 crores of that, balance will be from internal accruals. And having said that, our repayment is also INR 130 crores -- INR 125 crores, INR 130 crores. That means we are reducing the debt and also enhancing our capacities. That's what Mr. Saatvik Jain also told. We're trying to grow but also deleverage ourselves together. And that culminates in a point of time when our debt more or less at FY '27 level goes down to negligible amount on the term lending side. And we try and maintain the cash which is there in the balance sheet, which gives us opportunity for a bigger CapEx. But as of now, we've not called out up anything as an organization.

Sir, I have seen most of the companies in Q3 who all are in exporting to other countries, they're facing our ForEx loses. And how we are managing our product side? Is there any MTM losses out there?

Yes, there are because the ForEx -- the INR devalued significantly over the last 1 month and all of a sudden, to be precise. But there -- so we -- for us, as an organization, while we try to cover up our imports, we keep the exports open. But having said that, the ForEx, there will be ForEx loss, but since we are on to import substitution as a company, especially in PVC, C-PVC, the devaluation of dollars, obviously will play operationally better for us. But the import price parity of our FG, the prices of our FG will also go up to do an import price parity. So on FX, you may find a loss, but at an overall profitability level, the valuation of dollar will not impact us because we are either exporting or an import substitution.

We have the next question of the line of Pujan Shah from Molecule Ventures.

So sir, on the recent CapEx of C-PVC, so what is your debt cost as of now for the CapEx?

I beg your pardon. I could not get your question.

Yes, yes, sure. Just hold it. So we took a borrowing of roughly around INR 70 crores for C-PVC CapEx, right? So yes, so what could be the debt cost as of now? What is the cost of borrowing?

The cost of borrowing. Weighted average cost of all term having put together will be 9.5%.

9.5%.

I mean, anything between a 25 basis points, here and there.

Yes. Got it. Sir, could you just state all the realizations for each segment, excluding C-PVC because we know currently, the C-PVC is realization is INR 130? Other than that, can you just state down the caustic and all that realization ECU specific?

So again, I mean, just to let you know, sir, that most of the commodity product prices are available in the market domain. We would obviously refrain from being very specific into the net realizations unless you insist because of -- I mean, because I think that would be the only thing what we would like to reserve. You can drop us a mail for any specific request, we'll see how well we can comfort you.

Sure, sir. Sure. And sir, just understanding on one part on your -- so on the INR 125 crores of CapEx, what we have done for the -- so what would be the spend on debottlenecking of SIOP?

What would be the, what?

So what would be debottlenecking CapEx spend for SIOP?

We've not spread out that because -- the linked utilities for that. But if I have to put a number on it, it would be around INR 30 crores, INR 35-odd crores. But that specific, we cannot give it to you, because there are certain interlinkage utilities, which we have also built in that CapEx.

And sir, any incremental country we have been focusing because in the previous call also, we have been focusing on newer countries for exports?

So we are still focusing on Europe as a country where we can get in. I think our CEO, Mr. Amitabh Gupta also told that certain developments to our SIOP product, which we are planning to do, which gives us a very good opportunity to explore the U.S. market with our SIOP product.

And frankly, we are spreading our wings to the African market for the SIOP, okay? And Europe, well, the things continue to be pretty bad as far as the economy is concerned. But then like Southeast Asia and Middle East and Africa, these are the places, and I think we will have a reasonable presence in these markets during the course of the next year.

And just last question on the SIOP would be on the micronization part. So if we understand -- so our current -- so our current capacity of -- on competition side, do we have any already set up plans by the competitors? Or we are the initial one to set up this micronization plant? And what -- is it more on a cost paying benefit or more on the product quality side?

No, no. Quality-wise, it is a final product, okay? The dispersion is much better in this product. And that's why the paint industry, in some of their formulations, they prefer the micronized product. Right now in India, an Indian manufacturer, they have -- they don't have any micronized product. But like international brands like Linetec, they have a micronized product. And I think this will add up to our bottom line as well as our volumes.

Okay, sir. And any outline of CapEx on that spend for -- first that is micronization or?

Nothing significant in terms of the previous expenditures what we have done, but it's bit premature, sir, to comment on that. But nothing significant that we can assure you.

Thank you. [Operator Instructions] As there are no further questions, I would now like to hand the conference over to the management for closing comments.

Thank you, everyone, for joining the call today, and hope we've been able to answer your questions. If there's anything further, you can reach out to our Investor Relations managers for any further clarifications. Thank you.

Thank you. On behalf of DCW Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.