Epigral Limited (EPIGRAL) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the Q2 FY '25 Results Conference Call of Epigral Limited hosted by Emkay Global Financial Services. [Operator Instructions] Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Meet Vora from Emkay Global Financial Services. Thank you, and over to you, Mr. Vora.

Thank you. Good evening, everyone. Thank you for joining us on Epigral Limited's Q2 and FY '25 Results Conference Call. We would like to thank the management for giving us this opportunity to host them. On this call, we are joined with Epigral's management represented by Mr. Maulik Patel, Chairman and Managing Director; Mr. Kaushal Soparkar, Executive Director; Mr. Sanjay Jain, Chief Financial Officer; and Mr. Milind Kotecha, Investor Relations. I would like to invite Mr. Maulik Patel to initiate the proceedings with his opening remarks, post which we will have an interactive Q&A session. Thank you, and over to you, sir.

Thank you, Meet. Good afternoon, everyone, and welcome to the con call of Epigral's quarter 2 FY '25 performance. I believe you had an opportunity to view the earnings presentation that was released earlier yesterday, Saturday. Chemical industry has started improving through a lower pace compared to normal one. We see a good demand at domestic level compared to the global demand. We expect demand scenario to improve from here on, both domestic and global level. In quarter 2 FY '25, we had a sales growth of 32% compared to last year, similar period. And for H1 FY '25, we had the sales growth of 37%, led by volume growth of 17% compared to H1 FY '24. This growth is majorly coming on account of sales volume growth from our value-added derivatives and specialty products. Revenue contribution from derivatives and the specialty business stood at 59% in quarter 2 FY '25 versus 46% in quarter 2 FY '24. Contribution from derivatives and specialty business will further increase as all future CapEx are planned towards this business. In line with that, we are enhancing our CPVC and ECH capacity. And considering the acceptance of our product, market size and the growing demand for both the products, we are excited to double our existing capacity of CPVC and ECH at our existing complex. We are going to add further 75,000 tonnes per annum in CPVC resin to reach the total capacity of 150,000 tonnes per annum, and it will be the largest capacity plant in the world. In ECH, we are going to add another 50,000 tonnes per annum capacity, and it will be the largest capacity plant in India. These additional capacities are expected to get commissioned by H1 of FY '27. Having already built a sizable capacity in these products, we believe that our team will be able to complete this project in the estimated timeline and at optimal CapEx. These projects are expected to contribute in FY '27 onwards. Our strategy to diversify into value-added import substitute products, strengthening our integrated, complex and continuous CapEx for growth is playing well for us to grow more efficiently and creating value for our stakeholders. I now hand over call to Mr. Milind Kotecha, who will take us through the financials.

Thank you, Maulik. Let me take you through the quarterly numbers. So on operational side, capacity utilization of the plant stood in quarter around 83% in quarter 2 FY '25 versus 77% in quarter 2 FY '24. Sales volume grew to 6%, and this was majorly coming from the derivatives and the specialty business. Revenue from the quarter 2 FY '25 increased by 32% to INR 623 crores versus INR 479 crores in Q2 FY '24. This growth is majorly on account of the volume growth coming from the derivatives and specialty business. In Q2 FY '25, revenue contribution from derivatives and specialty business has increased to 59% versus 46% in Q2 FY '24 and 53% in Q1 FY '25. So we are moving in line with our diversification and increasing our contribution revenue from derivatives and specialty. EBITDA grew by 65% to INR 178 crores versus INR 108 crores in Q2 FY '24. This majorly happened on account of increasing utilization and volume contribution from the new projects. EBITDA margins stood at 29% in quarter 2 FY '25 versus 23% in Q2 FY '24. PAT grew by 111%. It's almost doubled to INR 81 crores in Q2 FY '25 versus INR 38 crores in Q2 FY '24. And PAT margin stood at 13% versus 8% in quarter 2 FY '24. Total debt of the company has reduced to INR 895 crores as on 30 September compared to INR 963 crores as on March 31, 2024. Return on capital employed for the trailing 12 months has improved to 24% compared to 21% as on September 30, 2023, on accounts of better volume growth resulting in a growth in EBIT. Hence, here, the capital employed includes the capital work in progress, which is yet to contribute to the total revenue. So if we exclude the capital work in progress, then ROCE stands around 28%. Our net debt-to-EBITDA has improved to 1.4x at the end of September 2024 versus 1.8x at the end of September 2023. The ratio has improved in line with the volume contribution from existing as well as the new projects resulting in a growth in the EBITDA, absolute EBITDA and also a reduction in the total debt of the company. Now if you look at the half yearly numbers, the revenue has grew by 37% to INR 1,285 crores. This is majorly driven by the volume -- sales volume growth of 17% coming majorly from the derivatives and the specialty business. Derivatives and specialty business contributed 56% of the revenue in first half of FY '25 compared to 42% in the first half of last year. CapEx utilization of the plant for the first half of FY '25 stood at 83% versus 74% in first half of FY '24. EBITDA grew by 75% to INR 355 crores, leading to EBITDA margin of 28% compared to 22% in first half of FY '24. PAT grew by 139% to INR 166 crores, and PAT margin stood at 13% versus 7% in first half of FY '24. With this, we can open the floor for the questions.

[Operator Instructions] The first question is from the line of Parth Mehta from Vallum Capital.

Just wanted to know what is leading to the pricing pressure in the domestic market for caustic versus the global export markets.

So the domestic caustic soda prices have also kind of bit moved upward direction. So that was something which happened at the end of September. So that will be -- so in line with the global prices, even the domestic prices of the caustic soda has gone up. But that will be reflected majorly in the Q3 and not in Q2.

Okay. And second one is...

Parth, we cannot hear you.

Mr. Parth, please proceed with your next question.

Yes. So when I -- when we look at the Q2 revenue numbers, they have decreased during the quarter. When I compare it Q-on-Q versus our COGS has remained flat, in fact increased marginally. And then...

We cannot hear you clearly. Can you...

Mr. Parth, your line -- please may you use your handset because there is a lot of disturbance from your line.

Yes. Am I audible now?

Yes, it's better.

Yes. So wanted to know, when we look at our Q2 revenue numbers, they have decreased quarter-on-quarter versus our COGS have remained -- look, COGS have remained flat. In fact, they have increased marginally. And then our other expenses has reduced drastically and our net-net EBITDA has remained flat. So is there any cost items that has been shifted from other expenses to COGS? Or is there any product that we used to outsource and put that expenses -- put that in the other expenses and now that we have started making it in-house and then added it in the COGS?

See, as such, there is no change in the COGS and also in the other expense item. It is in the routine course of business, which has happened. So as such there is more change in any accounting practice that we have, which will change things. If the -- if we look at the Q-on-Q, which is quarter-on-quarter, as you said, so that is again the current quarter it's bit -- you can say, the things have improved because of the improvement in the products or the margins in the work that we have sold. So otherwise it's a normal course of thing. It's not anything that we have moved on other expense to COGS.

Okay. So it is more of the other expense? The numbers are -- there's a fall of almost INR 20 crores, INR 21 crores. Is that a one-off?

Yes, it's a one-off kind of thing. It's nothing like any kind of change.

Okay. Okay. And last one, when we look at our volumes Q-on-Q, they have reduced. So any particular reason why there is a fall in volumes and which product would have -- we have seen a fall in the volumes?

So again, in the sales of volume, the other products have remained a bit here and there. But again, at the few specific products, there was a bit slowdown because generally, it's not this -- in this particular season, which is a monsoon, few of the products are in lesser demand. Otherwise, it's in a steady mode. So you will see Q3 in a better position.

Okay.

Compared to Q-on-Q. When we compare Q-on-Q, so that will be in a better position because generally, for a few of the products, Q2 is kind of an off-season.

Okay. And if you could just help me with the utilization for caustic.

Sorry. What about caustic?

Utilizations.

Caustic utilization has been around 75%.

Around 75%.

Yes.

And our chloro -- hydrogen peroxide?

So it is somewhere around 95%, 100%.

The next question is from the line of Nirav Jimudia from Anvil Wealth.

I have 2, 3 questions to ask. So first, you have mentioned in your presentation that our caustic realizations were down Q-on-Q. But when we see the international prices, I think they were predominantly stable, right, in terms of between the quarters. So just wanted to understand from you, like was this fall was more because of the chlorine prices? And if you can also help, like how were the chlorine prices in 2Q of FY '25 versus 1Q of FY '25?

So caustic soda, what you said is true. It is partly because of the chlorine impact that we have in India compared to the global market. So that is where it has been down. So chlorine, if we look at the last quarter, it would have been somewhere around negative of around INR 4,000, and this quarter it could be somewhere around INR 6,000, INR 7,000 negative.

Correct. And sir, when we see the per kg margins for our caustic soda business, like there was something like -- if you compare the ECU, there was a fall of close to around INR 2.5, INR 3, if we see on a sequential basis. But when we compare our cost in terms of energy cost, because now we have an entire captive power plant also running for our caustic soda business. So have we seen some sort of cost savings there, which would have negated ECU realization to an extent of INR 2, INR 2.5? If you can share your thoughts here.

So in caustic, what you said is true. I mean, to have our own captive power plant, that definitely helps in terms of rationalizing the cost. But again, in -- since beginning, since 2009, when we started our plant, we have our own captive power plant. So we are optimized in terms of the cost of production since beginning. So it's not that suddenly something has come up. But yes, we have also entered into 18.34 megawatt of wind-solar hybrid power plant, which helps us to reduce our overall cost for the cost that we were -- we are getting from the grid. So to that extent, yes, we have got the benefit in this year, fully.

Got it. And you also mentioned that by the end of September, we have seen some sort of price increases in caustic. If you can just quantify like in terms of the quarterly prices of caustic what we have realized and how much we have seen the price increases or possibly? What sort of price increases the industry would have taken?

So caustic soda prices have gone up in line with the global market. But again, at the same time, the chlorine as we were discussing what it was earlier and what it is right now in a situation, so the ECU, which is a down the line number has moved up marginally up. So the last quarter, the -- I mean, Q2, the ECU was around INR 26,000, considering the price, which has gone up and the chlorine, which has further gone down in terms of negative, the ECU goes around INR 30,000, INR 31,000.

Got it. Got it. Sir, second question is on the chlorine production. So I think if we do some calculation based on our chlorine production of close to around 850 TPD currently, if you can help us understand like how much we use internally, how much is our pipeline sales and how much we sell in the spot market?

So we say capital consumption that we have as of now as we have expanded our PVC capacity has come. So Q2, we were consuming consumption was around 70%. That has gone up to 79% at conduction. And there is 21%, which we still sell in the market short on us. And as we are -- have further announced to enter into expanding CPVC and ECH capacity, we are targeting this to further go up to consume captive -- consume chlorine more captivity.

So this capture doesn't include the pipeline sales, right?

It includes the pipeline customers. So yes.

Correct. Sir, does the pricing for those pipeline customers also are on the similar lines on how we sell in the spot market? Or the pricing is slightly different in terms of the contact with the customers?

Ex-plant, the pricing of the -- more or less, most of the players, I think the chlorine price is similar.

Got it. Sir, last bit from my side, like if you can share your thought process about the total market size of chlorine in Gujarat currently, like how it is played in, how the players are currently expanding. So how do you see eventually not today. But let's say, about 2, 2, 5 because a lot of other players were also expanded the capacity around Gujarat. So if you can share your thought process about the market size of chlorine in Gujarat and how do you see that industry growing so that the rest of the players are selling their extra for doesn't put a pressure on your caustic prices?

So I think the caustic soda is -- Indian caustic industry, chlor-alkali industry is driven by the caustic soda because of lack of propylene in India. And then mainly because of the PVC production. So definitely, going forward as the country is going at 7.5%, 8%, definitely, our caustic demand is also, I think, going in the same speed. So definitely, demand of caustic is going to go up in the chlorine derivative people need to find a way to utilize the chlorine internally. So that's why we are expanding CPVC and ECH. And I think overall and after commissioning of both the project, the 21% -- at the 75% running capacity, we are selling 21% in the outside in the market. That will almost become, I think, only 10% in the market after we commission both the project.

Got it. Got it. And sir, any idea about the market size of chlorine in Gujarat?

It's a very unorganized market. So it is difficult to make out exact demand and supply. But definitely major industry is a downstream chemical industry and depends on the sector. The market situation keeps changing. Depend on the agrochemical market that is the major one. So all derivatives and intermediate manufacturers, their demand supplies also keep changing. So everything never it is running on the peak normally. Depends on the cycle of the industry, it is keep changing. So it is very well diversified. It is not focused on one particular industry in India, other than -- if you see, other than PVC application, I think, it's very well diversifying. So many different application and the end use, including the water treatment also.

The next question is from the line of Rohit Sinha from Sunidhi Securities.

Congratulations on the numbers. Sir, so a couple of questions from my side. One is, as we are expanding our ECH and CPVC, and other players are also expanding into this space. So just wanted to know what kind of outlook we have and what kind of demand growth we are expecting in both the segments down the line in next 2 years?

So, both the products, CPVC and ECH, both are growing almost at double digit in India. If you see all the epoxy manufacturers, they are already expanded, almost doubled down their capacity. Even new players are also expanding their capacity of epoxy resin. I think in last 3 years, the ECH demand has gone up almost double in India or going to probably next 1 year, once the optimum level, all the epoxy resin manufacturing capacity will run. Other than the unorganized sectors, which is also buying epichlorohydrin as a raw material for other applications also. That is also growing at double digit. So we are expecting this market is growing double digit, and I think it will lead to a very high potential, and that's why we are the first ones right now in the epichlorohydrin in manufacturing. So we thought we would like to take a call to double the size of the plant to, we are forecasting, I think, 2 years down the line, again, the supply-demand gap will come in the ECH sector.

Okay. And for CPVC?

And the CPVC also, everybody is expanding, everybody is adding their capacities. People are present in North, they are adding capacity in South, people are in East, they are adding capacity on West. So North, South, East, West, all India, pan-India, people are expanding their capacity of the pipe manufacturing. And there are new players are also coming to enter like Sintex's like companies. They are also coming into India. So they are also going to expand the CPVC business along with other pipe also. So we are expecting good demand in coming years, and it will grow in the similar speed or higher speed in the next 2 years' or 3 years' time.

Okay. And our ECH capacity is running at what utilization.

Currently, we are running almost 85% capacity, yes.

Okay. And the realization for all these CPVC, ECH, apart from caustic, I think all have remained flattish or slightly negative for this quarter?

So in quarter 2, I think, it is slightly -- yes, it's almost the same for the derivatives segment, I think almost same marginal changes, not major changes in terms of realization, yes.

Okay. And in the caustic side, you have mentioned that we are operation at around 75% right now. So for second half, a lot of companies in the chemical space also are indicating for a better demand outlook for H2. So just wanted to understand that whether our utilization level are expected to touch or cross 80% plus or would it be in the similar range for the coming quarter as well? And what kind of, right now, capacities are operating in India? Because we heard that few capacities went for shutdown maybe on the maintenance side only, but there has been some shutdowns also, which has helped in this price increase. So how to see that angle?

Yes. So we are expecting good demand in quarter 3 compared to quarter 2 in terms of caustic and in terms of the chlorine utilization also, because as Milind has mentioned that some of the derivatives, which is not in very high demand in terms of the monsoon season. So I think we are expecting good demand in quarter 3. So definitely, our plant will run. As you rightly said, that will run more than 80% capacity in terms of the quarter 3.

Okay. Okay. And one last question is, I mean, just apart from this CPVC and ECH expansion, what we are -- are we may be looking at any other opportunities?

Yes. Now I think, almost we have captively consumed almost 90% of our chlorine in terms of the ECH and CPVC and other application also, in the chloromethane also and the pipeline customers also. So we are only going to sell 10% of the chlorine in the market. And definitely, 2 years back already we have announced that we have taken a land of almost close to 100 acres. So there, in that, we are going to start a new value can. But still, we are under evaluation. Probably by end of March, we are able to discuss more about that value chain.

Just to add to that, so the new land will have all together a new chemistry. And again, it will be kind of an import substitute product. So that's where we are looking for similarly what we have done in a CPVC and ECH kind of a thing.

The next question is from the line of Meet Bhatt from Alembic Pharmaceutical.

So sir, I just wanted to understand what is the market environment and how is demand supply trend working in the market because we are facing realizing pressure for all of our products? So this one view I want to know from you. And the second part is, where the capacities lie in terms of our products, which are putting pricing pressure for our products.

See, what you said is true. I mean, there is a bit impact in the realizations, but that is marginally plus and minus. But considering the CapEx that we have done so far that is contributing in terms of the volume growth that we have seen like first half of FY '25, we have seen a sales volume growth of 17%. So that is something which is driving the growth that we have. And plus the realizations that we are seeing is at the kind of a bottom level. Again, where it will go up, that is to anyone's guess. But whenever that happens, that will be an additional benefit. So overall, industry is moving up. Whatever we are seeing is the bottom of situation, things might improve from hereon. The pace might be different for different set of application industries. But we believe that considering the industries that to whom we are serving and the CapEx and the capacities that we have, we would have a volume growth. And that will ultimately drive the value growth because the volume growth that will be coming from the high-value products compared to our earlier products. So that will ultimately drive the value growth as well in the coming years.

Okay. And second was there any discussion or update on chlorotoluene value chain products we are coming up with?

Yes. So chlorotoluene project, we have 3 blocks. So we have started commissioning one by one each block. The first block, we have commissioned. The second block we are going to commission probably in this quarter. And the last block, we will commission in the last quarter. So probably fully commissioned will be done in the quarter 4.

Quarter 4 of this year?

Yes, yes.

What about the ECH?

Yes.

Okay. And the third was just a bookkeeping question. What is the volume growth for this quarter?

So volume growth for this quarter is around 6%.

6% is Y-o-Y or Q-o-Q?

Y-o-Y.

So I'm asking about Q-o-Q.

It is flat.

The next question is from the line of Vinay from PP Ventures.

I have a couple of questions mainly on the CPVC industry. Recently, the Commerce Ministry had announced an anti-dumping duty measure on suspension PVC import. This is yet to be finalized by the Finance Ministry. But this is the kind of PVC we use for our CPVC production? And how do you think it will effect us? Hello. Hello. Can you hear me?

Yes. Can you repeat your question?

Recently, the Commerce Ministry has announced an antidumping measure on suspension PVC imports. This is yet to be finalized by the Finance Committee. But is this kind of PVC the use for us to production, how do you think it will affect us?

Yes, suspension PVC we use in our CPVC production. And this is very special PVC, which is not manufactured in India so people are not manufacturing in India. And we are importing. So yes, there will be impact of anti-tau of PVC on the PVC pricing as well going forward.

Okay. So I have heard in investor calls of DCW and also understand that Reliance is planning to start their own CPVC production and announced a capacity increase. And DCW uses their own PVC for CPVC production. So when you say this is not available in India, how does Reliance and DCW manage the same?

See, so far, we know it is not manufactured in India. So we don't know about future it will start manufacturing or not.

Okay. So, we also talked about you having a major capacity addition. We also know Lubrizol is adding capacities, Reliance is in the line. DCW is also adding capacities. So, by the year 2027, do you think the pipe demand will catch up to the amount of capacity increases? Or what percentage of capacity addition do you think we'll be at?

So considering the growth in the CPVC market, we expect the demand to reach around 330,000 or 350,000 once we commission our plant, which will be in FY '27. So still, even after that, India will be a net importer of CPVC, somewhere around 100,000 or 110,000 kind of a CPVC regime.

Wow, that's good to hear. Recently, you sort the 35 KT compound plant for CPVC. What percentage utilization are we at for this compounding plant?

So the CPVC commissioned in June, we have made our product it is under trial with various players. At few levels, it has been approved. At few levels, it is still at the testing phase. So I guess it will start contributing a sizable way from the Q4 onwards.

Okay. Recently, there has been extension in CPVC anti-dumping duty. Has that affected our realization prices at all? Because last quarter, the realization seems to be status quo.

Yes. So currently also, the realization has been status in the same range.

Same range. What percentage for CPVC capacity to utilize last quarter?

It has been around 70%, at least 70%.

[Operator Instructions] The next question is from the line of Bobby from Falcon.

On Chlorotoluene could you elaborate a bit on whether these capacity is for domestic use or for exports?

Mr. Bobby, may I request you to please speak a little louder or use your handset while asking a question?

Yes. I'm using the handset. All right. So for Chlorotoluene, are you going to be using the capacity for exports or for domestic use?

So our major -- our planning to use domestically is all specialty chemical companies who are growing in India for the agrochemicals or the pharmaceutical intermediate. And with some portion, we will export to Europe region to start with. So definitely, on a longer term, definitely, our focus is going to be India in a specialty coming up.

So right now, the -- so your end segment is agriculture and pharmaceuticals, correct? So right now, where are you getting Chlorotoluene from?

They're getting it from Japan. They are getting it from China, Japan, and some portion is coming from Europe also.

All right. So when you sell your plant, are you going to be competitive with these countries given they are operating at a much larger scale?

Yes. We believe we are domestically available. It is much easier for our customers also. And all the products, majority of the products are in the liquid phase. So there is not easy to transport in terms of the -- when the quantum is increasing for the customers. So yes, it is much easier to -- for our customers to proper from the domestically compared to the import.

So when your capacity comes on stream, do you expect them to switch over to you in your current suppliers?

Yes. It will take time. It is not going to do overnight because the customer also need to -- I think it will take time to build the confidence between the supplier and the customer. So gradually, it will increase the volume. So we are expecting once we commission fully in quarter 4. It will take minimum 3 to 6 months time to approve each and every customer through a desired level. Definitely small orders, we can get in the initial first quarter, but the actual volume will pick up in the second quarter of next year.

Right. So it's pretty much the same situation you had for ECH correct? So for ECH, at this point, what can is sold domestically versus exports?

Yes, yes. I think it is -- you are right. We had a similar situation in ECH.

How much are you selling domestically right now for ECH?

We are selling also 80% in domestic and 20% for the export.

All right. So it took some time for you to scale up to the domestic customers, correct? Initially, you're a lot and then you gradually got customers?

Yes. And I think it is -- the volume is increasing in India, and all the players are expanding. And not only the epoxy resin, but the other application people are also expanding and consumption of ECH is growing in other -- in smaller application as well. So because it is good time to expand. And yes, our long-term planning is to sell maximum in the domestic and then around 20% for the export market.

Understand. So for one, is it a technologically complex process? How come you are the first 1 to set up the manufacture?

Yes, it is. It is not easily manufactured because there are so many number of products in the chlorotoluene value. It is not a 1 product like epichlorohydrin or the CPVC. It's very complex. And get it up to each and every process, each and every molecule and the isomer balance, yes, it is bit complex.

Right. So do you have a technology partner for this? Or are you doing it alone?

No. We have -- in some products, we have a tech product. Some of the products, we are doing in-house. It's a mix. it's a whole -- it's a 10 to 15 different value chain, different products in the entire value chain.

So Lanxess is the global leader here, right? Do you think your poly will be on par with Lanxess?

Which quality will be?

Will it be at par with Lanxess, the German company that manufactures Chlorotoluene?

Yes. So I think the 10 products or 15 products, which we are planning to manufacture out of only, I think a couple of products is manufactured by Lanxess. So yes, it is going to be at par with Lanxess, yes. So for any product right now, I think we have to be on par with the best product, which is available in the market. Otherwise, it is difficult to spend. So it is the mandatory requirement for any kind of manufacturing once we enter, yes.

I understand. So for CPVC, who is the technology partner?

CPVC, it is not a 1 particular technology partner. It is a different kind of it's mainly -- it's not a technology in the process. It is a lot of equipment, a lot of engineering. It is also -- so we took the help of different consultants also with the commissioning of the CPVC and the technology. And we also take the help of some of the equipment supplier also.

Okay. So originally, the understanding was when a few years back that CPVC are very technologically advanced compound and only a few people could manufacture. But now seems a lot of players are manufacturing here?

Yes. People are not manufacturing, a lot of people wanted to manufacture. So yes, you are right, it is -- earlier, it is still. It is a very complex process. In terms of the engineering, it is very complex. In terms of the corrosiveness, it is highly corrosive. And in terms of the customer also, in terms of application, you need to have a lot of interest of case of the application also. So it is not that easy to manufacture CPVC, yes. It looks very simple. Once you see the chemical process or chemical formula. But it's very difficult to take approval of the customers also, along with the specification and other applications. So it's a complicated process. It is not just once you commission and you can establish the customers very easily.

I understand. And you have all the talent in-house, given our sources. So all the engineers are in-house employed by Epigral?

Yes, yes, yes. That is our strength.

The next question is from the line of Rahil Shah from Crown Capital.

Yes, just one question. So I was going through the Q1 con calls. And I believe you had said that you expect revenue to be in the region of INR 2,500 crores to INR 2,600 crores with a PAT of INR 300 crores, INR 350 crores. So do you still think you can achieve numbers in the current situation, the change in pricing and everything?

So considering the volume growth that we have right now, we will be winning that line only.

And what is volume growth? Can you just reiterate?

Sorry?

What kind growth do you expect in the second half or for the full year?

So I can see the second half will be better than the first half. Let me put it that way rather than giving you a specific number.

Okay. And the margins you expect to be in the range of 24%, 25% for the full year, EBITDA margins?

Sorry, I didn't get you.

The EBITDA margins, do you think will be in the range of 24%, 25% for the full year?

Yes. So we believe that we have put together, we will be having a margin of 25%. So in the first half, we had an EBITDA margin of 28%. But on a conservative side, we can take around 24%, 25% margin.

The next question is from the line of Rohit Sinha from Sunidhi Securities.

Yes. Sorry, my line got dropped. So maybe this question was already asked. Just one thing on the export side. So for ECH, how much was the export, and the total overall export was how much for this quarter?

So 20% is the export and 80% is domestic so 25%, 75% you can say that, yes, for this quarter.

25%, 75% is for complete business, right?

Yes.

And for ECH only?

For the ECH. It was 25, 75 was for the ECH. Company put together the export is in the range of around 19% kind of thing.

Okay. And when we are looking at this expansion of ECH, so this 25% would be similar or we expect a higher number on that side?

Considering the growth in the Indian market, we think that majorly, it will be consumed in India only. So we are putting the additional capacity considering the growth that we are going to see in the Indian market. So major in India. But again, time will tell.

Okay. Okay. I think the first half FY '27 on this case would be operational, CPVC and ECH?

Yes. So we expect in the first half of FY '27 both the capacities will be commissioned, which will again as it will be commissioned, we will take them to ramp up. So it will contribute partially in FY '27, and we expect it to run optimal in FY '28.

Great. And again, when looking at our cost margin, which sealing around 38% in the U.S. for 25% whole-year a number of quite conservative. And we can easily put together, I think, 27% to 28% kind margin would be definitely possible as we are anticipating a better number for second half. So I know in conservative were, I mean, keeping the rate number is there, but I think 27% to 28% kind of margin should be definitely possible?

So Rohit, what you said is true. The first half, we have done 28% kind of margin. And we said in a normal situation, we can be in the range of around 25% to 27%. But when I say 25%, it is for this year, it is for next year. So we are putting it that way. But what you said is also to first half, we are at 27%, so then it will be definitely on a higher side come '25. But if you ask me if you're asking for a guidance kind of things, then we would like to stick to 25% margin.

The next question is from the line of from Sanket Baheti from GeeCee Holdings.

I had a lot of questions. Of the INR 780 crores of CapEx that we plan to put, what would be the CapEx split for the 75,000 metric tonne of CPVC cost we are in?

Sorry, we missed the question. Can you repeat, sorry?

So of the INR 7 crores of CapEx that we are planning to put, what would be the cost of CapEx for 75,000 metric tonne of CPVC?

So it's a INR 780 crores for both CPVC and ECH. And also in line with that, we are spending the amount on the basic infras well. So that's why we are not giving the taxation of the CapEx.

Okay. And would it be possible to quantify the impact of provisional antidumping duty of PVC resin that we might face, you could increase in pricing?

Yes. So see, generally, what we have seen in the past also, our realizations of the products has moved in line with the raw material costs. So if there is an impact on the raw material prices, then it will be reflected in the realization as well. So we tend to mention what we had done in the past.

Okay. And would you be able to help us with the selling price for CPVC currently, for the realization of CPVC currently?

Sorry, realization of what?

CPVC.

So that is what it was in last quarter as well. It has been around that only needed 23% here and there. So no major difference as such.

We will take that as a last question. I now hand the conference over to the management of further closing comments.

Good evening, everyone. In conclusion, I would like to convey that we are moving in line with our strategy through our expansion plans and diversification in terms of multiproduct catering whereas industry. we are targeting consistent growth. And I would like to thank you all of you for joining us here today. Please feel free to reach our IR if there are any unanswered questions. Thank you, everyone, for your participation.

Thank you very much, sir. On behalf of Emkay Global Financial Services, that concludes this conference. Thank you for joining us. You may now disconnect your lines.