Deepak Nitrite Limited (506401) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Deepak Nitrite Limited Q3 FY '22 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Nishid Solanki from CDR. Thank you, and over to you, sir.

Thank you. Good afternoon, everyone, and thank you for joining us on Deepak Nitrite's Q3 and 9 Months FY '22 Earnings Conference Call. We have with us today Mr. Maulik Mehta, Executive Director and CEO; Mr. Sanjay Upadhyay, the Director, Finance and CFO; and Mr. Somsekhar Nanda, Deputy CFO. We will begin the call with opening remarks from the management team followed by an interactive question-and-answer session. At the outset, I would like to clarify that certain statements made or discussed on the conference call today will be forward-looking in nature, and the disclosure to this effect has been included in the results presentation shared with you earlier. To begin, Mr. Maulik Mehta will share his views on the operating performance and growth plans of the company, followed by Mr. Sanjay Upadhyay, who shall take us through the financial and segmental performance. The results documents have been shared with you earlier and have also been posted on the company's website and stock changes. I will now invite Mr. Mehta to share his opening comments. Thank you, and over to you, sir.

Good afternoon, everyone, and a warm welcome to you on Deepak Nitrite's Q3 and 9 Months FY '22 Earnings Conference Call. I hope everybody is safe, and I hope that everybody is taking due precautions whether they're working from home or from their offices or in transit. I trust you had the opportunity to go to our results documents that we shared earlier. I will begin by taking you through the key financial and operational highlights for the period ended December 31 and the key detrimental and strategic approach for the year. Mr. Upadhyay will then present you with financial overview during the period in review. Following that, happy to answer investors in the open forum. We're currently witnessing the third wave of the pandemic in India, but fortunately, the human impact of the same has not been as severe as the previous wave, especially in terms of fatalities and casualties. Additionally, we continue to take precaution at our facilities and offices to ensure safety and well-being of all of our employees and contract workers. Some of the issues that plagued the second quarter have had some amount of lingering effect in third quarter as well, especially issues with sorting raw material costs, logistics and supply chain challenges, high cost of fuels like gas, like furnace oil, especially also coal. However, we see strong demand coming up across segments. Despite the challenging backdrop, the company achieved its highest-ever quarterly top line performance, both on a stand-alone and on a consolidated basis. Notwithstanding the tumultuous input material condition, particularly with regards to higher raw material costs and spiking utility cost and availability of key raw materials, the company efficiently executed its operating schedule and fulfilled a large part of its supply commitment to ensure reliable and stable supplies to key customers. Deepak Nitrite has been able to pass on hikes in raw material prices to consumers wherever strategically feasible. Overall, we anticipate the demand to continue to stay robust, given that several industries are getting back to pre-COVID production level, and fundamentally, there is a shift in supply chain to countries including India. Deepak Nitrite's wallet share amongst all customers, strategic and nonstrategic, remains robust and on a growing trend. Demonstrating the resilience in our business model, in 9 months, our revenue increased by 71% to almost INR 5,000 crores, while PAT grew by 65% to almost INR 800 crores, all on a year-over-year basis. While in Q3 FY '22 on a year-on-year basis, revenues grew by 41% at INR 1,748 crores and PAT expanded by 12% to INR 242 crores. EBITDA in Q3 improved by 11% to INR 378 crores despite the impact of temporary disruptions, as I mentioned before. By leveraging our experience and competencies in chemicals value chain, we have demonstrated nimbleness to grow without compromising on quality or safety. Our success is a result of our strategy to grow revenues in a balanced manner by diversifying across products, end-user segments, customers and countries. Moving on to performance of strategic business units. Basic intermediates profited from healthy realization gains at price hikes that were undertaken for key products, given higher input costs. In 9 months, volumes grew by 10%, partially because of brownfield expansions that we were able to achieve. We achieved positive outcomes in this segment despite the temporary disruption. Despite the challenging macroeconomic situation, the company continues to maintain its delivery commitments. Additionally, we expect the BI segment's performance to remain strong in the ensuing period as a result of sustained shift in the global supply chain as well as domestic trends. Fine & Specialty Chemicals' performance must be evaluated in view of major logistical constraints. Along with this, the company witnessed higher input costs, and in a couple of cases, unavailability at a particular time because of which delivery schedules got shifted. Due to the nature of contracts, the prices are not always instantly passed on but with some time line. The future performance will be driven by our ability to pass on cost increases to our customers, combined with our strong demand trajectory. Performance Products segment stands to benefit from supply -- from demand-supply asymmetries. The acceleration in the key raw material intermediate demand is noticeable, leading to an increased realization gain, and OBAs were able to pass on this price increase. Along with this, our integrated approach of having the raw material also internally produced has allowed us to take significant increase in market share, which we hope to remain sustainable. Top line and margins are mirroring this trend with volume increase standing at a robust 44%. The momentum is expected to continue in the near future as well. P&L is well placed to capture incremental gains from major sectors such as textiles, papers and detergents, all of which have in some way or form resumed production at close to pre-COVID levels. Phenolics has demonstrated encouraging results as well with an average capacity utilization of 117%, attributable to strong demand in India and other key export markets. EBITDA enhanced by 85% to INR 771 crores in the last 9 month. I'd like to share one key development here. As you know, we had announced our brownfield expansion of IPA. I'm glad to share that this has been successfully completed as on December 19, 2021. And as a result, our new nameplate capacity for IPA has doubled to 60,000 tonnes a year. In another key development, EcoVadis, the world's largest and most trusted provider of business sustainability ratings, has bestowed the silver rating to Deepak Nitrite with a sustainability ranking of 83 percentile. This has increased from 39 percentile just a year earlier, reaffirming the group's stride towards greater sustainability. To conclude, I'd like to highlight that Deepak Nitrite is well positioned for growth across a range of initiatives, and our plans for the future are equally exciting. We focus on creating a significant Indian chemical conglomerate with strength in a spectrum of chemistries and the ability to provide clients with customized solutions, all the while, we stay committed to our mission of large-scale import substitution to meet global demand and grow our market share. This will strengthen our competitiveness and equip us to enhance market share, resulting in value creation for all our stakeholders as opined by our Depend on Deepak initiative. Thank you. I'd like to now hand over the call to our CFO, Mr. Sanjay Upadhyay, to address this forum and take you through the financial performance during the period in review.

Thank you, Maulik. Good afternoon, everyone, and thank you for joining us today on this call. I'll walk you through the highlights of the financial results for the quarter and 9 months ended December 31, 2021. DNL reported an encouraging performance during the period under review despite the ongoing macro challenges. Solid improvement demonstrated in the Phenolics business and BI and PP segments also. DNL continued a strong revenue growth during the quarter. It's one of the best. This is attributable to increase in demand and realization of key products. In fact, we were -- the volatility in the prices of commodities certainly impacted but we were able to pass on to the customers to a large extent. In the 9 months FY '22 on a consolidated basis, revenues are up by 71% at INR 4,969 crores compared to previous INR 2,912 crores in 9 months FY '21. EBITDA stood at INR 1,232 crores in 9 months FY '22 compared to INR 800 crores in 9 months FY '21, higher by 53%. PAT expanded by 65% to INR 799 crores. DNL achieved highest ever profitability thanks to favorable contributions from BI, PP and Phenolics as views. In Q3, FY '22 on a consolidated basis, revenues grew by 41% at INR 1,748 crores as compared to INR 1,240 crores in Q3 FY '21. On a year-on-year basis, EBITDA grew by 11% to INR 378 crores and INR 340 crores in Q3 FY '21. Despite the overall increase in input and high utility cost, the company's EBITDA growth was strong on an absolute basis. PAT grew by 12% to INR 242 crores. PAT performance remained stable, aided partly by significant reduction in the finance expenses due to a repayment of debt. Moving to our segmental performance. Basic Intermediates reported revenue of INR 862 crores in 9 months FY '22, up 67% from INR 515 crores in 9 months FY '21. EBIT increased by 74% to INR 216 crores with an EBIT margin of 25.1% in 9 months FY '22. The volumes have also improved by 10% in BI segment. Fine & Specialty Chemicals segment, revenue increased by 9% to INR 611 crores in 9 months FY '22 as compared to INR 561 crores in 9 months FY '21. EBIT stood at INR 181 crores with EBIT margin of 29.6%. Volume has been improved by 20% in this segment. PP segment reported revenue growth of 69% to INR 368 crores during 9 months FY '22 versus INR 218 crores in 9 months FY '21. EBIT expanded to INR 59 crores with an EBIT margin of 16%. Volume has been improved by 40%. Phenolics reported a solid performance by only expanding by 95% to INR 3,169 crores in 9 months FY '22. EBIT came at INR 691 crores, higher by 89% translating to EBIT margin of 21.8%. Volume has been increased by 23%. Lastly, on the balance sheet front, the company's financial position has significantly improved, and cash flows are being leveraged to gradually invest into growth projects, also on reducing dates too. The company prepaid INR 100 crores of project loans during the quarter without any prepayment penalty. With that, I would now request the moderator to open the formal question-and-answer session, please.

[Operator Instructions] The first question is from the line of Nirav Jimudia from Anvil Research.

Sir, I had one question. Sir, I want to understand more on the chemistry part. So how do we select a particular chemistry? So is it like we are already into some group of products and probably this new chemistry which we have selected helps us in process intensification? And a related question to this is when we identify a new chain of products, probably with the newer chemistry, what is the normal size of opportunity we normally evaluate?

Okay. I can try to answer this. So first of all, what we do is when we look at adding another chemistry, essentially -- let me give you an example. We have announced recently that we would get into some level of fluorination and photochlorination. The way that we look at this is we said, okay, our goal is not to target to replace somebody who is in the market. But if there are products where there are 5 steps, 6 steps in order to make the final product. And out of those, say there are 4 or 5 steps where we are already in them, like nitration is something that we're very comfortable with, reduction via hydrogenation is something we're comfortable with, [ digitization ] is something that we're comfortable with. Now there are products which require maybe chlorination as one step which until now we had not taken up because we didn't have that expertise. But we had the other 3, and we were fine managing product portfolios, which required only those. Today, we're comfortable saying, okay, let's take even the products which require many of the ones that we have as well as a fluorination or as well as a photochlorination, which is at the end of the day just one particular kind of chlorination with advanced chemicals. So this is how we have gone about choosing a new product. The second reason that we take while deciding a product is, is this a process which -- while we are missing on it right now, and we add it, is this a process where it is going to be the significant bulk of the value generation? Is fluorination going to be, by far and away, the most critical step? If that is so, then we deprioritize it a little bit. If there is an opportunity for us to do it where fluorination is one of the key steps but not the step where the significant value is, it could be on nitration, on byproduct management of nitration, doing it in a safe manner, ensuring that the reduction, hydrogenation distillation these things are done efficiently. Then we take it up because we say that fluorination is there just one of the missing pieces, but it is not the most critical piece in the cost structure. And over a period of time, we're confident that we will build as much of a competency on fluorination as we have in others. And at that time, we will be fine picking up products where fluorination may be probably the most major component, but today, we will take it in a tentative calculated manner, adding it and continuing to focus on our other key competency. And over a period of time, fluorination will also become one of those. And at that time, we will again reevaluate what else we can add to the basket. Sanjay will answer your second question as well.

But this is over a level an event or even more exciting the chemistry part, but this has to make our basic parameters on the financial terms also because, otherwise, whatever chemistry or whatever integration we have, but if it is not making sense if there is a strong competition, if the payback will be done within our norms or the growth on growth is for the projects or whatever, then we will certainly not go with those kind of projects, though we may have strengthened though there is a synergy. So it depends. One is the chemistry part of it. Yes, we love chemistry. We love our R&D, those things, but commercial sense it must make. And right to win as Maulik rightly mentioned, has to be there. Otherwise, no point in going ahead with any of the projects. Like Maulik explained about nitrite, but I can tell you about Phenolics also that Phenolics may be, whatever we are doing is a philosophy company has of bulk chemical, and then it has a final chemical -- final specialty chemical to the bulk, and it is a forward integration. This is the logic which we are following meeting all these criterias, okay, then we will go ahead with those projects. Otherwise, no.

Got it. And sir, like since -- once we decide on a particular chemistry to be a critical part of the value chain of products along with the chemistries, and let's say that product is probably an import substitution product, so at that point of time, do we access that debt probably? Let's say the size of opportunity is INR 1,000 crores and beyond which it doesn't want to fall into it. So is there any critical benchmarks to take...

Two critical benchmark essentially is one. I mean, there are various benchmarks. Mr. Upadhyay mentioned, financial benchmark is one. Yes, with regards to volume size and things like that, our priority is not so much with regards to size, although we expect a minimum size, but it is also more with regards to the demand CAGR, the growth that we're expecting. Most of the products that we look at getting into, we are seeing that there is a strong possibility towards a low- to mid-double digit -- low to mid-teens as a year-on-year growth CAGR. So this means that even companies which are already focused on exporting to India from abroad, there will always be a much higher amount of volume demand over the next 3 years, 4 years than there is today. If you compound it, that creates a significant opportunity.

And sir, last and second question would be, sir, in your last investor call, you mentioned that we have got one order win from a customer which was supposed to start scheduling or getting commissioned from April 2022. So does this new product which we are going to cater is with respect to inculcating these new chemistries, which we want to get into or probably the -- it is related to the older chemistries, and new chemistries would take part in a later part of our growth CapEx?

Correct. So this is on the basis of existing chemistries. However, the new chemistries that we have spoken about will be added on a commercializable basis later on in the financial year.

Maybe by fourth quarter -- third to fourth quarter of next year.

[Operator Instructions] The next question is from the line of Chintan Modi from Haitong Securities.

Sir, I wanted your views on 2 things. One is at a global level. What kind of capacities are likely to get added in [ single, ] say, in 2022 and '23, and which regions are likely to contribute this to largely? And second is with the benzene production globally. Do you see there could be some shortage of -- I mean, some of the restrictions on benzene production over, say, next 3 to 5 years because of various reasons, like I believe some of the capacity is also driven through coal? So could there be a [indiscernible] or shortage on the capacity and likely increase in the prices of benzene over [indiscernible]?

We don't see any expectation of shortage of benzene because there is also new capacity that is coming online during the year. In the meanwhile, with regards to Phenol and Acetone, what we do is, over a period of time, which is you gave a very short period of time also just '22 and '23. We'll start '23 just in a short bit. But point is that, at this short period of time, we look at incremental debottlenecking wherever possible by intensifying the existing assets. So this will be modest, frankly speaking, but we're confident that a decent amount is going to be -- if you're talking about all Phenol production, with regards to benzene, you've got [indiscernible] also, worldwide also.

No, global capacity, yes, there are capacities coming up in China, but it will be major of this will be for the captive use. And in any case, we always believe that, that is a regional play. When we started also the situation was this. Even today also the situation. So I mean even if something comes, we are not too much worried. But yes, it is coming up in China, but it will be for captive purpose in China.

So it will be integrated with downstreams.

Downstream?

Therefore this is something that always happens. I mean, Phenol and Acetone being a commodity play is normally also considered while integrating it upwards or downward.

Got it. And is this capacity a significant one on their existing capacity? I believe China has about 3.3 million tonnes of capacity currently.

Not significant...

Capacity is so large, and generally speaking, it is domestically consumed that -- for example, I'll tell you that China is the world's largest producer of chlor-alkali, caustic soda and chlorine, but it really doesn't matter on the global scale because it is also the largest consumer of chlor-alkali. Similarly, you have Phenol and products like there's butanol there and things like that, but the domestic consumption and the domestic production are both some of the world's largest, if not the largest.

The next question is from the line of Kumar Saumya from AMBIT Capital.

Firstly on the specific side, as just you mentioned that the volume was 9 months was 20%, am I right?

Sorry, I can't hear you very clearly, please.

Sir, Sanjay sir mentioned that the finance specialty 9-month volume growth was around 20%. So am I right or I missed something?

Yes. Yes.

Finance specialty volume growth for 9 months.

That has gone up by 20%.

20%, okay. And sir, lastly, on the Phenol side, Phenol gross margin compression you have seen in this quarter. So if you could just highlight on this, what are the final aspects of that because spreads were largely in line with the first quarter, but the utilization was better, and still we're seeing some gross margin compression.

No, no, no. Actually, see, Phenol margins, what space you are seeing and what's the actual, there's a big difference. So say Phenol compression, if you -- even if you see Phenol at this level, capacity utilization is high, the turnover is high. It's only a question of margin cannot remain at a level which was 30%, 31%. It has to somewhere settle down. So we believe this is settling down the margin. And maybe there will be ups and downs. But yes, I mean, there cannot be continuously high margin of 30% in Phenol in that is not the commodity. I would have stayed in finance specialty, one part on this [indiscernible] but Phenol is not there. Hello?

Hello?

Am I audible?

Yes, sir.

Yes. So...

Can I just add 1 point to what Mr. Upadhyay said, that while we're looking at spreads, the other missing component in that is energy cost. Now Phenol, as a starting block intermediate, has a reasonably strong component there, which has also the power cost, power cost, energy cost, steam cost essentially, right? And in Q3, we saw prices of key utilities go through the roof. Coal prices have doubled, quadrupled in some case at some period of time. Then even over and above that, there was an issue with regards to availability of the right kind of coal. So whatever happens is raw materials only take a certain amount of the -- what you're looking at as a spread. The aspect there that you're not able to consider in spread is the power cost, steam cost. And these were formidable.

Yes, sir. But I just want to move on the gross margin side.

These will affect the gross margin, right, because the gross margin includes utility overheads.

No, Maulik, he's concerning only on material side, I believe, not the -- Yes.

So Sanjay sir, it will settle down around 29%. Is that fair?

What percent?

It should settle down at 29% considering the last quarter prices if the prices are at that level. So could we expect a steady state of 29%.

29% in Phenol?

Gross margins.

I would rather go with an EBITDA percentage of, say, between 20% to 23%.

The next question is from the line of Madhav Marda from FIL.

My question is [indiscernible] to a question that was asked earlier. So if you look at the global capacity addition for Phenol, and I hope I have the right data, like [ Mr. Modi ] said China is expected to add, I think, something like 3 million, 3.2 million tonnes of capacity in 2023 and 2024. While I understand you said that China uses a lot of that for its own captive use, but -- thus because Phenol is like global credit price, can that impact over price of Phenol as these capacities come through? And are my capacity numbers broadly right? China is adding about 3 million tonnes in 2023/2024 calendar year?

No. Frankly, it's a very nuanced question that you're asking and difficult to answer. But see, at the end of the day, what will always matter is the speed at which Phenol comes up, the speed at which the key raw materials come up and the speed at which the downstream for Phenol come up, right? So when you will see unusually high or low margins is when there is a mismatch between the Phenol capacity coming and the downstream or the upstream capacity coming in. This will happen. This will happen for a period of time, and then it normalizes again. So I don't think that -- if you look at it on an annualized basis, you should not be so concerned because, generally speaking, as Mr. Upadhyay has said, Phenol is regional play. If you look over the last 10 years, you will see that Chinese Phenol has really not had a significant impact on the Indian consumption. Even though Deepak came in with its plant only a couple of years ago, it has never really been a big player here, even though it is a neighbor, and it has the largest capacity worldwide.

Okay. Okay. Sir, so prices effectively are like kind of dealing to Chinese prices not very [indiscernible].

No, no, there's nothing that is -- I mean, of course, what I always say that when China sneezes, the world catches a cold, but I do -- I would not look at it in that worrisome a manner because there's also a lot of downstream production that is coming in. So generally speaking, we expect that Phenol and Acetone will remain strong drivers for our profitability moving forward as well. And what is more important is that the domestic demand that was there when there was less worry about COVID, hopefully, that returns to that form. It's not that it was weak, but we hope that it also continues to build itself. So we're also very clearly looking at results of auto companies and things like that.

We'll move onto the next question. That is from the line of Dipak Saha from Savart.

My first question is regarding the Basic Intermediates segment. And for the 9-month basis, it recorded kind of 67% growth in the revenue front, and when you look at the volume growth during the same period, it was around 10%. So broadly the revenue growth is largely on account of the price hikes that we have undertaken in the recent months. So -- and there's also some raw material challenges on the supply front. So once the supply side challenges on the raw material front normalizes, is it a right understanding that we'd see volume growth also pick up from the current levels, and it would also expand the margins from the current levels, which is kind of, I think, at that compressed level because of the higher raw material prices that is still in the market? This is the first question.

Okay. Thank you for compressing long question in a short period of time. But what I can tell you is, yes, we had underutilized capacity, both in basic intermediates and in specialty chemicals despite having a very strong order book. And there was -- at critical times, there was an availability of important raw materials because suppliers raise force majeures. And therefore, I can also agree that, yes, as long as volumes of raw materials are -- availability is streamlined even if there is some modicum of price volatility in the cost of raw materials, we're able to pass it on. The demand remains strong. So does the customer confidence on Deepak. So if we're able to see a streamlining of volumes of raw materials, you will certainly see that there is a higher utilization. You're absolutely right in pointing out that the revenue growth was only partially linked to volume growth. And the rest of it was where we were successful in passing on price increases. We expect that as soon as the raw material situation is stabilized, we should be able to more confidently supply to the customer need.

Okay. My second question is regarding the FSC segment, during the last quarterly con call, we kind of alluded to the fact that going ahead, the underlying contracts and the new contracts that we'll be tying up with we would have quarterly pass-through mechanism in order to mitigate the -- in the margin pressures are so that we can also pass on the price hikes that are taking place in the industry. So is there any material development as far as passing through mechanism incorporation is concerned in the contracts or the new contracts that we're going ahead with?

See by and large what we have is quarterly pass-through because what's more important for the customer is we have to make sure that their confidence is in ensuring that the supply chain, the pipeline is filled up, right? They depend on companies like Deepak because they know that we're healthy, we're robust. We know what we're doing. And we will work to tie up our raw materials so that they will not be affected. They are not averse to passing on cost increases. Let's be very clear. What they are averse to doing is wasting a lot of time nitpicking about month-on-month prices increase and decrease because they would prefer to focus on growing their end products, which is where we want them to focus as well. Now in all of this, if there is an absurd amount of raw material price increase, then we do try to have those conversations, but that is left at the end of the day to the customer. However, what bothers everybody, including Deepak, is when there is unavailability of raw materials. So I would say, at the end of the day that, yes, we have faced a margin compression because of the aforementioned reasons. But our -- the demand is strong. The confidence of our customers on Deepak is strong, and we continue to be bullish about being able to grow market share with pretty much all of our strategic customers. And we will be signing more such contract, which will be essentially medium to long term, meaning multiyear contracts for key customers.

Okay. Just this last question, Maulik, if I can pitch in. The FSC segment, a year-on-year basis, when you look at the revenue numbers, it has recorded a slight decline. I believe, is it because of the logistical challenges that is prevailing in the industry, largely, there's no issue on the demand front?

No issue on the demand front. Of course, logistics that player role, but now it has become high for such a long time that it has almost become normal at the site. But what you saw as the revenue compression is actually also a volume compression. While Mr. Upadhyay's point was right that we have seen a volume growth compared to the previous year, we also have to keep in mind that the previous year volume itself was lower because of our nationwide lockdown and also because, after the lockdown, there was an insistence from various state and central governments that we restrict manpower to 25% or less. And at 25% or less, the priority is not on production. It was always on safety. So keeping those things in mind, we prioritize higher-margin products last year. Whereas now we have been able to broad base our volumes, which were even then affected by raw material availability and to a certain extent freight availability.

The next question is from the line of Rohit Nagraj from Emkay Global.

Sir, first question is on Phenol. So post our conditioning of the downstream products on Phenol, how much of Phenol will be captive-ly utilized? I understand that at 130% utilization currently, we are producing something like 241,000. Out of that, how much will we utilize capital and how much will be for [indiscernible].

So to answer your question, which projects whatever we have announced, in total, we want to continue on 30%, 35%. We are -- currently, what projects we have, it will not consume that high, but there are plans in pipeline. And ultimately, we will consume around maybe it is more than 40%, 45%, 50% Phenol in captive. So today, if you say it will be around 20% or 25%.

Right, sir. Got it. Sir, the second question is performance products are done DASDA and then BI has been done extremely [indiscernible] during Q3. Going into Q4, are we seeing any signs against prices being contracted? Or are we seeing the same kind of momentum continuing in Q4?

It will continue in Q4. See, for the last couple of quarters, we have been giving a guidance that volumes have started to recover, and we believe that prices will also follow, maybe a quarter or so later. So we have started seeing that. And today, there is a -- I mean, there's a good, robust demand in all the 3 segments as compared to previous quarters. However, in Q3, there was a slowdown in the demand for textiles because of various reasons that are all well known, things like GST, things like in Gujarat, there was an issue with the local pollution control board and the industry bodies there and things like that. So these have all by and large been addressed to some way or another in December. So we have to see how things shape up. However, if I'm comparing to the last few quarters where demand was depressed to a large extent, it has substantially improved from there. What is more over and above that, I think customers have had a significant preference for Deepak because of its integrated approach. So this is something that we see more in Performance Products because most other if not all other manufacturers are not as integrated, and therefore, customers have seen wild swings when we're depending on other suppliers, including an availability of product.

The next question is from the line of Nitin from Yes Securities.

Sir, my first question is regarding the CapEx. So how much of CapEx have we incurred in 9 months? And also, at the end of the second quarter in the call, we have mentioned that we'll be spending about INR 700 crores in downstream in all plant and a little bit more on brownfield expansions. So is there a revision in that plan in light of the QIP approval that we announced in December last year? So that was the first question.

No, so this -- whatever we have announced that stands, won't change. QIP, see we have definite plans. I will not be able to tell you much about that because we are under that, what is that you call -- we can't tell much about the projects in future, but yes, there are definite plans. Once we are through, we cover all processes, and then we'll come up with -- see, today, when these questions are raised about these margins, I mean, there are every segment and every product, which is not contingent all begins because since all the products are integrated, now if you have a higher-margin bulk chemical, you will have a lower margin in Fine & Specialty if nobody notices the improvement in performance products, which is significantly high, where it consumes a higher -- this bulk chemical also. So this is all ultimately what we are saying that, yes, products are doing well. There could be 1 quarter in here and there. But ultimately, if you see now in Q4, you will have a better margin as compared to this, so it happens. And there are -- so there are downstreams definitely planned, as I explained earlier also. Our overall endeavor is to consume Phenol captively and Acetone. Acetone, we've already done. There are definite plans, and that's why this QIP. One, the plan is for Phenol [indiscernible] for Deepak Nitrite also. And we are -- I mean the resolution is for INR 2,000 crores. How much raise is a different thing, but [indiscernible] an average resolution is for INR 2,000 crores. And we have significant cash generated also in the business. So with all this, you can see what -- I mean, the Deepak Nitrite, as it stands today, will have its strongest balance sheet ever, and then that enables us to do whatever we want. And then it will be fundamentally a very, very strong company, which will go up to the next level. To answer pinpointed question will be difficult today because we are not supposed to divulge so much of information.

Understood, sir. Sir, that's fair, and that's very well answered. Sir, my second question was with respect to the downstream Phenol capacity that we have already spoken about. So as you had given us a sense around Phenol market size and like how much our capacity would be in terms of like percentage. So can you give us some sense around the downstream Phenol market and like how the market stands today in terms of size? How much of this is imported in over there? And how much import placement would our capacity bring in whenever the downstream capacity comes?

It's not one product only. There are several products. I can't tell you about each and every product, but these are an import substitute. That much I can tell you. Okay, but then there are several products. So it can vary from product to product. It's very difficult to explain to you on this call how it will be.

Right, sir. So that means then I will come down perhaps and meet you to understand.

Yes, of course. But not now because this is not the right period to do. Once we are through with our QIP announcement and I mean through the process is done.

Certainly, sir. And lastly, if I may push in one more, so you did allude to basically a positive anomaly in the DASDA prices, which have helped us in the OBA and Performance Products segment. So is this anomaly similar to what we had seen earlier in this segment? And how long do we foresee that is going to continue?

Cannot -- it will not be like -- let me answer it, Maulik. It will not be like last time what it was. Okay. But yes, it will continue for some time but not for long, cannot. But then the PP segment part sales doing well, you see the volume growth there. OBA is doing well. OBA, you're absorbing the increased price and then doing it. So there are many positives in all segments.

[Operator Instructions] The next question is from the line of Levin Shah from ValueQuest Investment Advisors Private Limited.

Sir, again, my question is on the small segment. So what we have seen last 3 quarters when the prices go up the last 3 or 4 quarters actually, the prices of Phenol have been quite robust, and that is always visible in our top line as well, but our margins, like you explained, have been slightly volatile. And this quarter, we have had impacts because of the power cost and even on the raw material side. So now going forward, with our capacities now operating at like very good utilizing levels, how do you see this sequentially? The costs, are they going down? And will we see better profitability going forward?

See, one major -- I won't say major, but next quarter, you'll have power plant, of course, running. So that saves energy cost we were talking. But then for that, coal also has to go down. But unfortunately, coal will resolve. But otherwise, that is along to give you that benefit. So that is the straight CapEx, which will give the return. Rest all, I mean, it's up to us to utilize our capacities and how further we can improve the capacity because, margin being margin, it's not in our current sense -- we are not too much worried about this, somebody asked about China capacity and somebody, that happens. That is a part of, in China, visa product where capacity will come up. So margins will go and up and up, but we'll control our production cost. We'll see that our volumes are high, and we are able to sell to the maximum. Unfortunately, today, there is one more relevant, which has come up is the freight element. So the exporting of Phenol is becoming costly. But that is helping us also because the people are not able to import phenol to that extent. So these are all the gains which I mean any commodity product will have so not too much worried about this. And I don't think this is a bad margin what we have. It will further go up because with the power plant and this. But the range of the margin, you can't take 29%, 30%, 35%. That will be too high for a commodity. So it will be remaining -- maybe the range should be in the 20% to 23% up to 31% maximum.

Right. Sir, and on this -- so now that we are operating at 115%, 120% kind of utilization and also our downstream products may take some time where we will utilize, let's say, 35%, 40% of our products, so going forward on the revenue side or at least the volume side, we may be flat for the next few quarters. Is that understanding right?

No. That may not be right.

So there is a scope for further volume growth?

Yes. Yes. And there is always a scope. I mean, who knew that we can produce up to 115%, 117%, 120%? Nobody.

Sir, and my last question is on this Fine & Specialty segment. So like you have been always just talking about the margin last year that we had were obviously not sustainable. And that is what we have seen this time around with a different kind of headwinds that we have faced. But now moving forward from a medium-term perspective with the kind of pass-through that we are talking about, do we see that margins improving from here? And what kind of margins will be sustainable for this segment?

See, I have always maintained that the 35% to 40% range is the fair range for Fine & Specialty. I still stick to it. This quarter, it is low, maybe around 29% to 30%. But it is certainly, certainly that range is doable. You will see it much better again improved Q4. So I'm not too much worried about -- these quarterly gains in our kinds of products, we cannot have this kind of [ total ] margin that 29, 32, no, it's not possible because somewhere -- and today, the market's so volatile and disruptions in the prices. We have -- we cannot let go market as raw material costs are high. We have to produce and continue, and market share has to go up. That's the whole idea here. So somewhere the disruption is also playing, but I still stick to my target that it will be somewhere around 35% to 37%.

Understood. Yes, sir, quarterly ups and downs, we understand, and that is what is beyond our control to some extent...

And somewhere I feel our business model is such, which it should be appreciated by the market that we have 3 segments as our own creation. Otherwise, I -- if you see the overall margin has gone down by 3% of EBITDA. It's not going down significantly. But because somewhere performance is doing well, Fine & Specialty has gone down, but bulk is doing well. So ultimately, the whole idea is better to present a picture which is integrated other than -- because each product flows into other segments. Everywhere, you will find that there's a margin event in that. So to come up to that particular -- like [ PMT ] prices, for example, is significantly high, which is absorbed by our caustic price is high, which is a bulk [indiscernible] which is absorbed by Fine & Specialty. Sodium nitrite is consumed in Fine & Specialty. So those things are which are -- it should be understood and appreciated in totality rather than getting into a segment, and overall impact is how much? This is where our business model.

Yes. No, I think that is well appreciated, and that thing has kept us going and even our performance in PP over the medium to longer term as we have gained from our fully integrated model, so no denying of that. Those are my questions.

The next question is from the line of Anil Bhandari from HEM Securities.

Sir, just a few questions. First, I just wanted to know that, overall, is everybody talking so much about margins, just a general question, that if we have in a segment thing that because if one margin's high, the other margins are low, but still we had a 5% dented margins if we talk about an integrated level. So I wanted some clarity on overall levels at some 27% in previous -- Y-o-Y basis, there 22% EBITDA margin roughly. And also [indiscernible] has been talking about more of downstream products. And still, it won't be all a commodity play because we are planning to have more value-added downstream that they're still coming in. So won't we have -- won't they be high-margin products?

Yes, I'll answer the first question first. You're right that there has been a dent, but as I have alluded to before, that is largely because of -- as I mentioned, we are able to absorb raw material cost increases, sometimes with a lag a quarter. And that's normal. That's fine. What is difficult to be able to absorb is unavailability of raw material from time to time. And that was exacerbated in the case of Q3 because we were unable to get the raw materials owing to force majeures waved by some of our suppliers. Now as the situation normalizes and material movement is available, we remain confident. But what happens at the end of the day when you're talking about a company which has a significant amount of its value coming from CapEx intensification of its existing plants. If they're not able to run the plant because of unavailability of raw material, then that will affect the average margin. There's no question about it. Also, you will find in some cases that when we talk about margin, we talk about margins on a normalized basis that we expect final specialty to have 35% to 40% margin on a normalized basis. Now in that interim period, if for whatever reason, things like energy costs suddenly shoot up and then they come down, they do affect the bottom line, but they affect the bottom line in a way where it is not a sensible thing to pass on because it went up, it came down, it got normalized, situation is normal. And therefore, what is more important is keeping the strategic customer supplied with your key products that they require so that they can grow. Now you will see that, yes, there was a dent, but you will see, by and large, that one should not look at a single quarter in its isolation. These have happened. You will find that most companies that were involved in the production of commodity chemicals like chlor-alkali, they will do well in Q3. Is that going to be an expected situation around the year? No. Just the same. For us also, you will have a situation where there was a margin compression because of unbelievable volatility in material and, therefore, an underutilization. This is something that we don't hope will continue. There's no reason to expect it to continue. But once in a while, it happens, and we take it in stride. Now with regards to the question about Phenol, yes, you're right, not all of the downstreams that we would get into will be commodities. There will be others which are "advanced intermediates," and they will have higher margins. So by and large, as a balance, you will perhaps see a change in the flavor of the business moving forward in the Phenolic side. But let's be clear that when Mr. Upadhyay is talking about the margins, it is the margins of the products that are currently being manufactured by us. So moving forward, we may see an improvement to -- the extent of improvement, we don't know because, at the end of the day, it will always remain a blend of high volume and low volume with higher margin.

Okay. Okay. Got it. So just one last question. Could you just give us a glimpse and a flavor of the market share in each of the segments?

Each of the segment, also very difficult to answer, but I think by and large, for all of our products, maybe with 1 exception here or there -- 1 or 2 exceptions, we're the largest player for that product or in the top-3 largest players for that product by and large, worldwide to our target audience. Now for example, sodium nitrite, you will have capacities. I mean, China by itself is maybe 5, 6, 7x the size of Deepak, right, in terms of its -- but that's not our target market. So we don't sell to that market. The markets where we sell, we are dominant players in terms of wallet share and capacity. Correct me, Mr. Upadhyay? Is there any that we are not in this position?

Most of the products would be around 70%, 75% and nitrite would be 80% maybe. So I think that's -- wherever we are having high market share. And we don't let our market share that is for sure.

And one good thing that is happening is India as a market in terms of demand is also growing very rapidly. So the demand CAGR that you see in the domestic market has grown substantially in many of the segments that we are in. There will be occasional contractions because of unexpected events like COVID. But as a general trend, I think we should all be proud of the kind of investments that the segments across the board are making in India, international players as well as Indian players, many of them are announced CapEx, many of them are in the process of commissioning their previously owned CapEx. So India is the right place for growth even for companies like Deepak, especially for companies like Deepak.

[Operator Instructions] The next question is from the line of [ Manish Jain from Mani Life Advisory Services ].

My only question is that what has been the volume growth across segments compared to the previous quarter?

I think we've mentioned, right?

Previous quarter, I think it will be able to tell -- let me get back to you on this each because it varies from product to product, okay?

Yes, I'll call him later. If you drop an e-mail to me, I'll touch base with you. I'll call him later.

The next question is from the line of Rohan Gupta from Edelweiss.

Sir, [indiscernible] business. So we have seen that definitely there has been some marginal pressure has been on spreads in Phenol, but on a quarter-on-quarter basis, there has been sharp decline in EBIT from our Phenol business while we have been running our plant at maximum utilization, you mentioned almost 115% plus and also probably benefiting from the IPA. So is there any one-off or higher raw material costs probably which has impacted the Phenol profitability in the current quarter because that's not likely getting reflected in the spreads which are available?

Utilities, steam costs coming from high-priced coal. That is one of the major ones. We do see that there are -- I mean, you see propylene price. This is also there, but this will anyway get reflected in some way or form. But most important at the end of the day has been the cost of utilities. And freight costs have been an ongoing perpetrator in many cases. Nowadays, even domestic material movement, look at the price of petrol and diesel.

So it's not really spread? Sorry, sir, you go ahead.

It's a very big spread. There's no doubt on that because of higher utility rates and then even propylene input rates are also high. So that high in the sense, though we are having a decent margin, we are talking about -- but yes, the raw input cost was high for the quarter.

Okay. So sir, this high utility cost definitely continues with the rising coal prices. So do we see that this kind of pressure in terms of spread -- I mean, in terms of lower profitability in Phenol business will continue?

No, of course not. Why it should [indiscernible] because phenol prices are also going up. It's not coming to -- we didn't say -- because ultimately, if coal price remains at this level, whatever price it is, so then the market, it sets the price. So it's a question of a matter of time then. In raw materials prices, in fact, if it is impacting for the quarter because [indiscernible] and the rates are high, if it is going to remain -- this crude has gone up. So there is somewhere it has impacted the propylene price also. So Phenol, then we'll have to go out. No ultimately -- again, I repeat that if you're expecting a margin of 20% to 30%, that's all going to tell you something which is not sustainable. But yes, renewable margin, certainly, anybody can pass on and be it.

Okay. And sir, in Fine & Specialty Chemicals business, you were mentioning that, in the presentation, you have also mentioned that definitely, there has been some lag in terms of passing it on to the end customer. So I understand that we are an integrated business model, and that's pretty helpful that higher profitability from one segment compensates probably the lower profitability from other business. But in Fine & Specialty Chemicals, we -- in last 2 to 3 quarters, we have also commercialized more products, and the revenues have picked up significantly and the higher operating leverage, our specialty chemical margin should go up. So is it that because of the lag in terms of passing on the raw material increase that is taking some time in terms of margin expansion with our customer?

That is true.

Sorry, just to direct you, there has been no new capacity in Fine & Specialty that got commissioned in the last quarters. That is not -- I mean, we have announced that there is expansion. There is investment in all of the segments. There's no doubt about it. That said, in the last 2 quarters, there has not been any new debottlenecking that has been commissioned. The increase that you see in volume is because, last year, the volume was low. And this year, we are right now seeing, at least in Q3, we have seen a somewhat lower volume than our capacity because we did not have the key raw materials on time. These situations have improved. And we do hope to recover a good amount of the cost increase now moving forward, which what happened in Q3. You cannot ask for a recovery for production that you didn't do and material you didn't dispatch. But nonetheless, we do anticipate that Q4, the situation is -- with raw material availability is much, much more palatable than it was in Q3. Let's see how things unfold.

But Q4, again, I said earlier, Q4 will be better for these segments as compared to Q3. Q3 was not bad. I don't know why [indiscernible] Q4 will be better.

The next question is from the line of Nitin Agarwal from DAM Capital.

Just a quick one on the Fine & Specialty Chemicals. How many products are we looking to add over the next 2 years, sir?

I can't answer that because, right now -- no, there are actually -- it's not a small number. That is for sure. And one of the reasons why we haven't announced the names of products that we are going to get into when we announce the chlorochemistry as well as photochlorination is because it provides us a platform for a larger permutation combination of products. Many of these will actually be tied up with customers for the medium term. So difficult to answer, but certainly, it is going to be an interesting number. Specialty Chemicals, as a segment even for us, is turning out to be a very attractive play, even in terms of the kinds of engagements that we are getting into with existing customers for new molecules and new customers for new molecules.

If I can just push you a little bit on that. So in terms of timeline, by when do we see the impact of the substantial new product additions or platform additions coming through in our numbers?

So on commercializing at least many of those molecules, that will be at the later end of the next financial year. So between December and February is when we will start to move material out, and therefore, we'll see some impact coming in Q4 of next year. That's when you will start seeing the value coming in. In the meanwhile, there are brownfield expansions, which we have already announced, and those are also with long-term agreements that are tied up, but those are for existing chemistries, products that we currently do manufacture.

Sorry to interrupt, Mr. Agarwal. Sir, we request that you return to the question queue. There are participants waiting for their turn. The next question is from the line of Saurabh from Asian Markets Securities.

So if I inferred your comment correctly, so we are looking at debottlenecking in the Phenol plant as well?

We always look at debottlenecking in the Phenol plant.

So what kind of incremental capital can -- incremental volume we can add and by what time line?

These are all very -- but yes, we will -- we are certainly working on this because, in this plant itself, when we say 2 lakh tonnes capacity, today, we are producing [ 117% ]. It is likely to -- it will go up with our further small and sound debottlenecking in this. But I mean, to give you exact number is not possible now.

And something which we've mentioned before is, for us, it's the plant is designed in such a way because this is what we had. This is the money we had. This is the land we had is that it has been developed and commissioned in an extremely tight and efficient manner. So that means that it is not just the capacity of Phenol that has to -- I mean, that can be improved. It has to be every single piece of the jigsaw. Just to give you one example, our -- the cost of diesel that we pay for in order to move our material to the customers, that itself on a monthly basis is INR 15 crores. This is the cost of the diesel for the trucks and the tankers that we have that get our material to our customers. This is what you would look at as on an annualized basis, the bottom line of a small chemical company. This is just the diesel cost, right? So at the end of the day, all of these things have to move lockstep. And we've been able to demonstrate that very well in the last year or 2 years. No reason to believe that we will not continue to do that. We have very strong systems and processes in place. So as we debottleneck, we will also debottleneck our supply chain. And end-to-end, we will see -- we'll continue to see value coming in from every part of it.

Okay. Just one more on the material side, so...

Sorry to interrupt you Mr. Saurabh. Sir, may we request that you return to the question queue. The next question is from the line of Rushabh Shah from Anubhuti Advisors.

Sir, first question is basically on the substantial rise in other expenses during the quarter on a sequential basis. If I understand, is this because of higher freight cost or some case if I'm missing?

Are there expenses, we are comparing 9 months how it is -- what you are comparing?

So sequentially. So last quarter, as per your PSC filing, it was INR 72 crores. And this quarter, it is roughly INR 100 crores.

I don't remember. But then it must be with some element of expenses net of also against the income of, I don't know, INR 72 crores and INR 100 crores, you are saying so -- there was an expense -- Som, can you get back on this?

Can you repeat the question, Rushabh?

Yes. As of the quarter ending September '21, the other expenses were INR 72 crores. It has substantially gone up to INR 101 crores this quarter around. So any exceptional item it was, or it wasn't just reflecting the higher freight and energy cost?

So it is largely has freight and domestic as well as ocean trade. And because it...

It's only sales and administration...

Largely logistics and because of the larger volume that you had carried, the impact of this also is in these numbers.

So basically, our -- we are reiterating our margin guidance for all the segments. We are not cutting anywhere that our margins may go down going ahead?

No, no, we are not saying that.

Okay. And then just last one question on the Phenol, basically...

Sorry to interrupt Mr. Shah. Sir, we request that you return to the question queue. There are participants waiting for their turn. The next question is from the line of Julie Mehta from Mount Intra Finance.

So I just wanted to get back to our plan of including photochlorination and fluorination. So these chemistries are really complex to crack, if I'm not wrong. So I just wanted to know like what is the expected target? And by when do we think we'll be making any development on this front and also if we have any specialized personnel for this segment?

So Maulik, you just mentioned -- sorry, okay, go ahead, Maulik.

No, no. It's okay. Mr. Upadhyay and I both have mentioned that it will -- the capacities will come online towards the end of the third or beginning of the fourth quarter of next year. Of course, we have people who have a fair degree or a higher degree in fact, of competency. The chemistry themselves are complicated, but -- I mean, there are several chemistries that we are currently already doing which are complicated. So anything which is new will always feel a little bit complicated. And I think there has been a [indiscernible] created by a lot of people that these chemistries are more complicated than normal. What is important to keep in mind is material handling and safety. Now that is something that we, of course, are going to pay extra attention to. There's no doubt about it. Material handling and safety at the end of the day is important. But this is not something that is new to us. We have various products in our basket which require a lot of safety and material handling. And we have -- this is our bread and butter. We know this. And we are responsible for ensuring that everything that's in the company is able to work in a safe and secure manner. That's our job. So we continue to hold ourselves to a high standard in terms of safety and in terms of material handling. So we've had a fair degree of confidence internally. Otherwise, we would have announced these projects a long time ago. What we had to do first is, yes, we were successful at the lab and the pilot level. We were successful at ensuring that these things are clear to us. But over and above that, we had to work to ensure that raw materials were secured, that we got the right people on board so that it was not just extending our current sales, but we got people on board who had a good degree of experience in handling these kinds of chemicals. And then once we have these things tied up, that was when we made the announcement that we are investing in this. So yes, it is important. And yes, we are aware.

And we have a good team of people also available...

The next question is from the line of [ Arvind ], an individual investor.

Am I audible?

Yes.

Sir, just first wanted to follow up. Can you just indicate the kind of product reach and market expansion that you have done over the last 2 years? Because given your high market share in your target area and the kind of growth that you have achieved, is it a function of new product addition, or is it a function of market expansion also? If you can share some more light over the last 3 years, what have been the key driver and how to look ahead?

Both. So we have expanded capacities in many of our products. We have also seen that the domestic market -- even the markets that we're in, forget domestic, why do I keep talking only about domestic, they themselves -- our customers have seen healthy demand for their products which consume Deepak products. So as their requirements increase and our wallet shares stay the same or increase, we also find that our products are in higher demand with existing customers and new customers that come in. Now for example, we have made investments, like I mentioned earlier, in sodium nitrite. And even with the increased production that we commissioned in October, just a couple of months ago, our market share in this domestic market has increased, but it has increased marginally and that is because the domestic market itself has increased, right? And a lot of our customers have invested in downstream in their own capacities. Similarly, if we look at, say, agrochemicals, we are seeing a boost trend with regards to demand for Deepak's products. So whether this is in Europe, whether this is in India, whether this is in the U.S., there has been an increase in demand. And in many cases, the customers have actually increased Deepak's wallet share because we've been able to demonstrate sustainability of supply pipeline.

So I was asking 75% kind of market share...

Mr. [ Arvind ].

So 75% kind of market share is something which is you can't expand beyond that, right? It's not a fair assumption to assume that it can go up to 100%...

The size of the market remains the same. Because if the size of the market increases, then you're talking about 75% of an increased market.

Like Phenol, for example, to elaborate, if you can Maulik, see Phenol when we entered the market, we were at 60%, 65%. Market has expanded so much that we are now at 55%, 60%. So I mean, the market is growing enough opportunity available.

We're at 55%. We're at a lower market share with a higher product output compared to what we had originally envisaged of 100%. They were far in excess of 100% and still we have a lower market share.

The next question is from the line of Rushabh Shah from Anubhuti Advisors.

Sir, my just last question was on the Phenol part. So basically, the revenue decline which we saw this quarter around was, any impact on account of antidumping duty, which was revoked last time? I just wanted to understand the reason of the decline in revenues?

No, there is no impact of antidumping duty for that, absolutely no.

The only time we remember this is when some investor remind us that, oh, you remember that antidumping duty. It didn't affect our regular business.

Okay. Okay. Okay. So as is there any volume decline this quarter around versus the last quarter?

In what product?

In terms of Phenol, the overall volume, did we see volume decline sequentially?

There was a reduction of around but marginal, not much, maybe 3,000, 4,000 tonnes.

Okay. And just on the last basic chemicals, the issue with the vendor and has largely been resolved right [Foreign Language]?

Sorry, issue of?

The issue in the basic chemicals, the issue which we were facing at one of our vendors and has that been resolved now?

With chemicals, we're not aware of this.

What is the issue vendors side...

No, no, the force majeure, which we saw at one of our vendors...

That is not in Phenolics. That is in Deepak's Nitrite...

Basic chemical.

Yes. So the situation, certainly, the force majeure got removed. Now that is normalized as we speak. Every quarter has thrown up some interesting surprise or another, which was earlier amortized. It was not amortized. But the force majeure was lifted towards the end of December.

Ladies and gentlemen, that is the last question. I now hand the conference over to the management for the closing comments.

Thank you all. Thank you so much for joining this call. In case you need any further clarification, please write to us. Our Investor Relations team will give a certainly to you all. Thank you, once again.

Yes. Thank you from my side as well. Please, everybody stay safe. I know that there is a tendency to disregard this wave as something which is not as significant or severe, but it is going to be significant or severe to people who are immune compromised and always aware that, as a country, we have a young population, and that means that a young population might have a lot of people who are not as vaccinated as many of us are. So please take care. Please stay safe. Please ensure that your family is safe and look forward to talking to many of you in the near to medium term.

Bye, everyone.

Bye. Thanks very much. Thank you, everybody.

Thank you. Ladies and gentlemen, on behalf of Deepak Nitrite Limited, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.