Epigral Limited ($EPIGRAL)

Ladies and gentlemen, good day, and welcome to the Epigral Limited Q4 FY '26 Conference Call hosted by Emkay Global Financial Services Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Harsh Shah from Emkay Global Financial Services Limited. Thank you, and over to you, sir.

Thank you. Good afternoon, everyone. Thank you for joining us on Epigral Limited Q4 FY '26 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. Rakesh Agrawal, Chief Financial Officer; and Mr. Milind Kotecha, Investor Relations and Strategy. I would like to invite Mr. Milind Kotecha to initiate the proceedings with his opening remarks, post which we'll have an interactive Q&A session. Thank you, and over to you, sir.

Thank you, Harsh. Good evening, everyone, and welcome to the call to discuss Epigral's quarter 4 and FY '26 performance. I believe you had an opportunity to view the earnings presentation that was released earlier today. If we let's talk about the chemical industry in the last quarter, then quarter 4 was a volatile and a critical quarter. On the positive side, we saw a relief for Indian exporters as the U.S. reduced reciprocal tariffs and China removed its wet export rebates on a few of the chemicals. However, on the escalation in the West Asia disrupted the global supply chains and tightened the availability of key raw materials. This created a mix impact, while some chemical segments faced higher cost and deferred demand, whereas others saw a pricing movement -- benefit from the pricing movement. With cease fire efforts underway, the market is beginning to stabilize. That said, we estimate that even as the conflict ends, it will take time to repair facilities and normalize shipping lines. Hence, pricing movement should be gradual. However, we are positive on the demand growth of India. Now let us discuss on the performance of the company. In quarter 4 FY '26, we achieved highest ever revenue of INR 736 crores, driven by volume growth of 15% quarter-on-quarter and 14% Y-o-Y. We had seen demand pickup from mid of November, and that was continued in the quarter 4 as well. And also major maintenance work was over in quarter 3 FY '26, and hence, caustic soda plant was also running at optimum level, leading to our EBITDA margin has been normalized range of 23% on account of better sweating of the plants and also normalized level of raw material prices. While the West Asia conflict has driven up raw material prices and as well as finished good prices, the impact remained minimal in quarter 4. We expect these inflationary pressures to be reflected in the coming quarters. However, our diversified product portfolio provides resilience. We estimate while certain segments may face headwinds, others are positioned to offset this impact and sustain overall growth trajectory. Our capacity expansion projects of epichlorohydrin and CPVC are progressing on track and within budget. With demand for both the products projected to maintain double-digit CAGR growth over coming years, our enhanced infrastructure is perfectly positioned to capture the India's growing market and hence drive significant top and bottom line growth for the company. With completion of the above CapEx, we would have already created a level of infrastructure for sizable growth from here on. And simultaneously, we are working on new projects as well, so we can have a consistent year-over-year momentum. Our team is optimizing current projects to drive steady growth and deeper integration while deploying capital with discipline to create value for our stakeholders. I now hand over the call to Mr. Rakesh Agrawal, who will take us through the financials.

Thank you, Milind. Let me take you through Q4 numbers. In Q4, we witnessed volume growth of 15% compared to previous quarter, resulting in overall plant utilization above 80%. This resulted in the highest ever revenue of INR 736 crores, a growth of 22% compared to previous quarter. Revenue contribution from derivatives and specialty business stood at 54% compared to 52% in previous quarter. EBITDA increased by 64% to INR 169 crores compared to INR 103 crores in the previous quarter. EBITDA margin improved to 23% on account of normalized level of raw material costs and improving overall utilization of plant. PAT stood at INR 82 crores versus INR 39 crores in previous quarter. PAT margin stood at 11%. Now if we discuss full year, revenue dropped marginally by 1% to INR 2,542 crores on account of drop in volume of around 4% in the year. EBITDA stood at INR 567 crores compared to INR 711 crores in the previous year. EBITDA margin for full year stood at 22%. PAT stood at INR 330 crores (sic) [ INR 333 crores ], which includes onetime benefit of INR 81 crores on account of reduction in deferred tax liability. So if we exclude that, then our PAT will be INR 252 crores compared to INR 357 crores in the previous year. ROCE stood at 16%. If we exclude capital work in progress of INR 451 crores, then our ROCE stood at 17%. Net debt to EBITDA stood at 0.9 as on 31st March '26 compared to 0.7 in the previous year. Our net debt stood at INR 508 crores versus INR 489 crores in the previous year. During the year, we spent around INR 394 crores on the ongoing CapEx, and we have generated around INR 436 crores from the operations. With this, we can now open the floor for questions.

[Operator Instructions] The first question comes from the line of Priyank Chheda from Vallum Capital.

Great performance. First question on what was the realized ECU for the quarter for which we have achieved this performance on the caustic soda? And what's the current trending ECU? And you made a comment that you think that the supply chains will remain disrupted for long. So what does it mean for the caustic soda players like us? What can be the elongated ECU that we should think of it along with -- if you can touch upon the prices of other derivatives where we are involved, how has they moved and how are they moving in the current quarter? That's first question.

Yes. Thank you, Priyank. So see, current quarter, quarter 4, we have ended with the ECU of around INR 30,000. And that has been there. And in quarter currently, the ECU because of the war situation had gone up, like caustic soda prices have increased by almost 30%, 35% compared to what it was before war. Then -- but because of the bit cool down as well, the price has also come down. So current ECU would be ranging somewhere around kind of -- INR 37,000 kind of thing. And considering the war situation, what we witnessed is that the whole cycle of the chemical segment, starting from crude to chemicals has been upset, even the shipping line has been upset. And also on the shipping lines, things are not moving, I mean, smoothly. And also the war which is going on, there is no clarity whether how things will be moving smoothly. So considering the situations stabilize as well, like if there is a pause in the current situation, then also it will take at least 4 to 5 months of time for things to stabilize for the realizations of all the products to come down. So that's what we are expecting. And again, in the other derivatives as well, we see the prices have gone up in line with the raw material prices. And again, it depends on how the things shape up in the war situation, that will ultimately translate this. But again, considering how generally things -- I mean, even if it ends, it will take time to stabilize and it's not going to happen in an immediate basis.

Got it. So if I have to just reflect back on past 9 months performance and this quarter has been significantly way better than the past 9 months. If you can just summarize what has been the key problems that we faced in last 9 months? How are we shaping up as this quarter goes by in terms of, say, utilizations of caustic soda, we went down to a level which did not make unit economics. And now when the utilizations have picked up, what is the current utilization for each of the products as well as if you can just briefly touch upon what went wrong in -- or say, maybe what were the headwinds in last 9 months and what are the current tailwinds that we are witnessing in this going quarter?

So see, Priyank, if you look at like the full year performance of the company, the first half of the company, we were down in terms of volume because of the 2 things. One, we were having a major maintenance that generally happens once in a year. So that maintenance was over from October onwards. And also because of the prolonged monsoon plus there was too much volatility into the PVC, which is the raw material for CPVC, the demand was a bit impacted. But again, once the monsoon ended in October, we saw a demand pickup from mid of November in CPVC as well. And also on the caustic soda side, the major maintenance was done. So the plant that we were running at 67%, 70% utilization levels after the November has been running in the range of 78% to 83%, 85% utilization levels. So that's where you can say quarter 4, I mean, even from mid of November, we were running at optimum for both -- I mean, the whole plant put together. And even the quarter 4 has been the optimum in terms of all the plant capacity utilization. So currently, things are on the optimum side, and we expect FY '27 to be on a better side, and we will have a volume growth. So that's what we are expecting for FY '27.

Got it. So the quarter 4 becomes a new normal as things were to do with respect to internal to Epigral?

Yes, you can think that way, Priyank. But see, the thing is war is still there. And definitely, it impacts in some of the other way. It's our product basket mix where we have set of chemicals in both the segments, and that's where we are more resilient even in this situation. So definitely, it looks good. But if the war does not escalate and it does not impact too much into the key raw materials, then we are confident. But again, we will have to factor in the -- not too much -- I mean, we will have to factor in the war impact as well. So that is something which is not very clear to anyone.

One last question on the unit economics again. given the energy cost is one of the key raw material costs, the caustic soda players, say, around 50%, 55% and that energy escalation leads to caustic soda prices going up. When it comes to Epigral and for industry, can you throw upon a comparable with respect to how much would be the green or renewable energy share within our energy source? And how are we insulated versus, say, a global escalations in their energy mix versus, say, Indian industry players?

See, in that way, energy cost has also gone up because of the war. So that has also gone up in the range of around 15%. But again, in caustic soda, if you see, it's also the supply chain, which is a bit impacted globally because of the crude impact where the ethylene is not available and the PVC plants are running at lower utilizations, and that's where it impacts the caustic soda production as well. So it's a combination of things which is driving the prices. So that is not just one thing. And in terms of like what we see in terms of caustic soda, as I said, the war is still there or the issues are still there. So it will take time for us to -- for it to stabilize. And in terms of like green solar energy in our total production -- in total power consumption, it is currently somewhere around 8% to 9% Epigral and as we are further expanding into the further addition of wind solar of around 19.5 megawatts. So once that commissions and reaches at optimum level, then around 15% of our power requirement will be coming from the wind solar hybrid power plant.

And what would be this number for, say, the industry, Indian industry caustic soda players?

I would not have that number on hand, but that scheme -- this is a scheme, very good scheme from the government of Gujarat and many other states have implied. So I guess every company is trying to take a benefit of it. So right now, it will be on the lower side, but I'm sure that down the line, the usage of this will definitely increase.

Anything lastly on, say, FY '27 as you start, what would be your broader guidance in terms of volume growth aspirations and we are looking ahead for the capacity additions also in the following 6 months. What can be a peak EBITDA North Star target that we can think of it as per the prices that are prevailing. Any thoughts on this?

See, I would avoid giving any number. But in terms of volume growth, we are targeting around 10% to 12% of volume growth from here on. And definitely, considering the growth expectations from the various products that we are into, barring the war does not impact too much, we are confident to grow with the volume growth of 10% to 12%. And so that is what I can guide. I mean I can -- I won't be able to guide much better than that. But yes, on that basis, definitely, FY '27 looks much better than FY '26 based on that because the volume growth, that 10% will be from the capacities of like higher-value products compared to what we are going into. So that will drive the value growth as well.

May I add one more element on this. Just on the chlorine consumption, what would be the internal chlorine consumption that would go -- that would reach as a percentage after the -- what is the current mix and what would this reach after the expansion?

Current chlorine captive consumption is around 75%. And as we are commissioning our ECH and CPVC capacity in the quarter 2 of FY '27, and it will run at lower utilizations initially because it will take time to ramp up that facility. So maybe in FY '28, once we kind of reach to the optimum utilization levels at that point of time, we expect this 75% chlorine captive consumption to reach around 90%, 95% captive.

Wonderful. All the best.

Thank you, Priyank.

The next question comes from the line of Nipun Sharma from VLS Finance.

Can you please confirm if my audio is clear on your end?

Yes, it is clear.

Okay. So congratulations on a good revenue growth for this quarter. My first question being on the CVC facility that I believe it has been commissioned in March 2026, I believe so. So what are your plans for the CVC products? I mean, what would be your target customers? What would be your target market? And if you are planning to have a brownfield capacity expansion for the same existing facility and as well as the competitive landscape. So would you please comment upon that?

You're talking about the CPVC or chlorotoluenes?

Chlorotoluenes.

Yes. So chlorotoluenes, we commissioned in March 2025. And you can say we have passed through -- I mean, in terms of the process of getting approvals and testings from the customer side. And that's where the capacity or you can say the revenue increase on a month-on-month basis. And so that's where we are targeting for. So FY '27, we'll see a sizable contribution from the chlorotoluenes. And further as we go in FY '28, we should be able to reach optimum utilization levels. This majorly goes into the agrochemical and pharmaceutical segment. So basically, the companies who are into specialty chemicals and making the final product for the agrochemicals, we sell to them. So it has been -- you can say we have passed through the approval process and all the testing process. So now it's the time to ramp up in terms of -- because here, the volume will increase staggerely. It's not going to increase in one chunk. So that's what we have witnessed already in the quarter 4, and we expect that to happen in the quarter 1 as well, quarter 1 -- I mean, from quarter 1 as well. So FY '27 should be contributing a sizable number. Maybe once the 1 or 2 quarter goes, we might be able to give you a number of that once we have that sizable number into the P&L.

Okay. Sure. And what would be the optimum capacity utilization for the chlorotoluenes facility?

So optimum would be in the range of 70%, 75% utilization level, which we expect to reach in FY '28.

Okay. And my next question being for -- as I've seen in your FY '26 revenue growth, it was a little bit of a degrowth because of a 4% sales volume degrowth in FY '26, I believe. And I think it is majorly on account of first half of FY '26 due to some factors, including the unfavorable monsoon conditions, which impacted the sales of ECH as well as CPVC. So could you think so that if such unfavorable monsoon condition happens in the future, so how would you mitigate such risk? Because it is also known that 2026 is going to be a major year for El Niño as well as -- or even if the unfavorable monsoon condition repeats in any upcoming years like it did last year. So how would you mitigate such a risk?

See, what you said is true for the last year, but it was not just because of the monsoon. There were many things in last year, which were impacting the raw material prices, which were ultimately impacting the final -- I mean, the finished good prices as well. So you were seeing that last year, there was antidumping duty and BIS were expected in the PVC. So because of that, there were volatility in the prices, plus prices of the PVC was also dropping, which were impacting the CPVC prices. And also the real estate market was a bit subdued, I mean, post the election of 2024. So all these things have now end because there is a clarity on the ADD, there is clarity on BIS monsoon has ended and also the real estate market has picked up after that. So it's not just one particular thing. And generally also, Q1 and Q2 will be a quarter where it's a monsoon, so demand for that product it will be lesser compared to what it will be in Q3 and Q4. So -- but considering just one factor, it will not impact to an extent what we saw in FY '26. So that's where we are confident that FY '27 should be better than FY '26 in terms of the volume.

Okay. Okay. And one question being that could you please provide the average price realizations for your products for hydrogen peroxide, CPVC and ECH as compared to last quarter, I mean, third quarter of FY '26?

It's difficult to give all the numbers together. Maybe we can take this off-line.

Okay. Sure, sure. Best of luck for your future endeavors.

Thank you.

The next question comes from the line of [ Kiran Naik from Modi Fincap ].

Sir can we expect revenue for '27 5% better than '26?

Sorry, FY '27?

'27 revenue growth, 5% better than '26 revenue growth?

Can you tell me what is 5%? I mean I didn't get it.

Better '26 revenue growth, can we expect for '27 5% better revenue growth than '26?

See, FY '26 -- FY '27 because see the FY '26 year put together, our chlor-alkali production was impacted, even the CPVC was impacted because of the muted season. So that's where we see that revenue -- I mean, the volume growth will come in FY '27 based on FY '26, and that's why we are expecting the growth to add to the value growth as well.

And EBITDA margin also the same level for '27?

I would defer giving any guidance on the EBITDA margins. But what we have achieved so far, we would be maintaining in that range.

The next question comes from the line of [ Rakesh Nair ], an individual investor.

This is [ Rakesh ].

I'm sorry to interrupt, [ Rakesh ]. You're not quite audible. Could you be a little louder, please?

Is it audible?

Yes. Yes, [ Rakesh ].

Congratulations for the good set of numbers. And my question is like can we expect further growth in next quarter and coming quarters? And what is the impact of this U.S./Israel/Iran war on our company revenues in future?

See, the war situation is there. And because of that, there is an escalation in raw material prices as well as finished good prices. So that's where we are -- so that's where we think even in that basis, we will have a bit of a volume growth in FY '27, unless the war escalates too much and it disrupts the market all put together in terms of demand. So otherwise, if we consider -- does not consider that situation, then we can expect a volume growth in the range of 10% to 12% in FY '27, and that will eventually drive the value growth. And it's always better to see things on a year put together basis rather than seeing quarter-on-quarter because one particular quarter or 2 quarters, there might be an off-season for a few products, and there might be an off-season for another products. So it's always better to look at a year as a put together rather than looking quarter-on-quarter.

Okay. And what is the trend of PVC prices in upcoming months?

So CPVC prices had gone up in line with the PVC prices. So again, considering current situation, how things are, it will go in line with it -- the CPVC prices will go along with the PVC prices. Again, there also it's too much volatility in the PVC prices. So it's difficult to give any specific number as of now.

The next question comes from the line of Resham Jain from VVD Asset Managers.

Congratulations on good set of numbers. So I had a couple of questions. So the first one is with respect to the overall profitability in this quarter. So what I've understood is that there has been a good price increase in the month of March. And is there inventory gains also sitting in this quarter's profit, given that you might already have inventory and prices have gone post that versus the current spreads, which you might be enjoying?

Yes. So thank you, Resham. So what you said is true. But again, see, the prices had started escalating over a period of time once the war was announced and then the things started going up. But if you see on a quarter 4 basis, then in 1 or 2 products and that too might be for last 5 or 10 days, we would have got the benefit of a higher price because for every product, you have some set of -- I mean, the contracts or you can say order placed in starting of the month. So if you actually put together -- I mean, if you remove the marginal benefit, quarter 4 has not received any -- much of the benefit in terms of escalation of the prices because this was announced around 20th February or starting of the March, whereas you -- I mean, one would have already booked the orders for that month. So barring some sort of the very spot or like 1 week ahead of orders, it's not impacting. So that's why you see the ECU of caustic soda has been around INR 30,000. And all other products also, it's marginally here and there, nothing major movement. So whatever Q4 numbers happening, it's not majorly because of the escalation prices of the war. Escalation in the prices of the war will be reflected in the quarter 1 -- so again, because of the product basket that we are into where 60% of our product basket is something which is -- goes into the basic things and where the demand is still intact even at the elevated prices. So we are better off compared to the situation that -- and again, there is a 40% of our product basket where the elevated price is a bit of restricting the demand. So there, the volume will be a bit lower. So the balance -- so because of this product basket or you can see the mix of products that we have, we are more better off compared to being into the product basket where the demand directly gets impacted when the prices goes up. So to put it short, the price increase because of war will be majorly reflected in Q1 and not in Q4. And considering current spreads also, it is almost normalized situation because of the, you can say, volatility, any increase in the raw material prices is passed on to the finished good prices and because -- and also, we are also being cautious in terms of wherever the order is -- has to be placed. So that way, we are being cautious and not hurrying too much in terms of where we would land up in a inventory loss kind of thing.

Understood. Understood. Clear. And the second part is the overall volume, are you seeing any -- as you mentioned just now also, but overall volume, how you are seeing from the Indian market as well as on the export side?

Company put together, we hardly have around 4% to 5% of exports and that too to the Europe. So -- and again, on the domestic side, as I said, there are a set of chemicals where the demand is intact even at the elevated prices because it goes almost into everything. There are set of products where the volumes will be low because the inventory cost has gone up, that has pushed the finished good prices. So that's where even everyone is cautious, including us and even our customers are cautious. So that's where you can say there will be kind of a -- April was a bit of a quarter where there was a volume a bit low compared to what it was in a normal case. Otherwise, as the things have better off compared to what it was at the starting of the April, we see the growth is picking up from the May onwards. But again, as the time goes, it will be better because time is too uncertain to confirm on anything in terms of how things will be going.

Understood. One final one is with respect to chlorotoluenes. What is the current utilization level? And given that this product is imported largely because of rupee/dollar and all, are you seeing any positive traction in chlorotoluenes?

So chlorotoluenes, as with -- as I conveyed earlier in the con-call, it is this year put together has been a year where almost you can say, 7 to 8 months has been gone in terms of getting approvals and testing with the customers. Now we see the volume pickup in terms of the -- from the customers. But again, here, the demand pickup will be gradual. So if we look at FY '26, the volume has been almost lower to give any number. So I guess FY '27 will be a year where we will have a sizable contribution and the plant should be somewhere around 40%. But again, it will be difficult to give an absolute utilization level as of now because it was very miniscule. Maybe once we cross half of this FY '27, it will be better to give some sort of a good number or give us a sizable number. And in terms of...

And because of -- yes, yes, sorry. Sorry, go ahead, sir.

So yes, Resham, your second question, I missed it.

Yes. Yes. No, you were answering about the demand conditions. Given that rupee/dollar and all import substitution, it would have been better off, right, last 6 months on the traction side for chlorotoluenes?

Yes, definitely. See, basically, chlorotoluenes is something which majorly goes into the agrochemical and the pharmaceutical segment. So we were seeing kind of a bit uptick from the January in terms of the orders. It was increasing. But current uncertainty, which is there because of the war situation, that has impacted a bit in terms of volumes. So it's not a normal month, which we were already witnessing in January, February and March. But again, as things are cooling it off, at least for the time being, that we expect the volume growth to happen from the May onwards again.

Okay, perfect. All the best.

Thank you.

The next question comes from the line of [ Shubhanshu from Sharma & Family ].

Hello, am I audible?

Yes.

Yes.

Yes. So my first question will be around the new chemistry. Has it been delayed indefinitely now?

Sorry, I didn't get you.

There was supposed to be a new green chemistry being planned, right? Is this now delayed indefinitely? Or what is the state? I haven't heard anything on this.

So you're asking about the expansions that we are planning, right?

No, you were mentioning a new green chemistry you were planning into, right? I think we have been talking it about in some quarters. It was supposed to happen in last financial year, but there hasn't been any announcement till now.

So see, not any green chemistry. In CapEx, what we are doing is we are already doubling our capacity of CPVC and ECH. So that is expected to get commissioned in the quarter 2 of FY '27. And we are working on the new chemistry to further -- for further expansion. So that is under process with the management. And once it is freezed, we will be announcing that maybe in a couple of months.

Okay. Because this, I think, has been under discussion for quite some time, the new chemistry that we're planning, and we haven't heard about it. It has been more than a year. So like why is this taking so long?

There is no green chemistry as such we are talking.

Greenfield. Sorry, okay. Greenfield, I think that there is a confusion. You're planning a new greenfield project, correct?

Understood. Understood. Understood. So you are talking about the new land that we are planning for in terms of the CapEx. So yes, that is still under evaluation because we -- earlier, we were targeting around -- I mean, we were evaluating many projects. Out of that, we have selected a few, I mean, one of them, and then we are further doing due diligence on that. And so once that is done, we will definitely announce. But it is going to take time because it's a big project. So we are not going to be in a hurry to just to announce it for the sake of it.

Okay. So when can we expect it? Is it -- will it be announced this year, next year? Or no, we cannot comment on it?

So we -- this will be announced this year as -- this year only because, see, we are always -- if you look at our history as well, we have always done a CapEx. And once that CapEx is almost on the verge of completion, we announced the next one. So we go step by step in a gradually in terms of announcing and completing the projects. So we are on that stage. So definitely, I'm sure that we will be fitting on something and announcing this year so that we can have a consistent growth beyond FY '29, FY '30 onwards.

Sure. On the CPVC and ECH capacity, so once it is commissioned, how will the ramp-up look like? Like what can be the expected utilization levels by, let's say, the end of this FY -- Q4 '27?

So one -- we'll be commissioned in Q2. So the ramp-up will be gradual. It will start maybe around 15%, 20% and then gradually every quarter that capacity utilization should go up. And maybe in FY '28, we should be able to reach at optimum utilization levels.

So when you say optimum, what is that number around 80% or no?

Yes. So for like CPVC, it will be around 75% and for ECH, it will be around 80%.

Okay. And I think you mentioned that for quarter 4, '26, this quarter, both CPVC and ECH were running at optimum capacity. So were they running at this much only 75% to 80%?

Yes, it will be somewhere around -- so it will be somewhere around optimum levels, so around 65%, 70% and 80% kind of things.

That's nice to hear. I think last quarter, it was 50%, it has gone up quite a bit. What was the realization for ECH this last quarter, Q4?

So realization for ECH has also increased compared to what it was in Q3, but marginally, not like too much.

Okay. And I think I'm hearing chloromethanes had gone quite a bit up. Is that true? Or especially I think chloroform, I've been hearing a lot.

So that was in line with all the products. Every product has gone up. It's not just one particular chloromethanes. Every product realization has gone up in line with the raw material prices. But that was majorly visible in quarter 1 and not in quarter 4.

So I've been hearing like 50% there's been hike. Is that the correct range or no?

Yes, it would be around that.

Okay. So chloromethanes is like -- is it the highest product line that has gone? Or is there something else also where there is like price inflation or is this the highest one?

Every product has seen an increase in price in line with the raw material prices. So it's not one specific product which has gone up. Every product, the price has gone up in line with the raw material prices.

So I'm trying to gauge a certain, let's say, percentage jump, let's say, top line number we might expect. What could it be like 20%, 15%? Or how is that average number looking out for us?

See, as I said earlier, we can expect a volume growth of around 10% in the FY '27. Now in terms of value growth, it will be difficult to give you any kind of specific guidance. We would avoid that.

What about for this quarter, Q1, right? You already have some idea on the current prices. Will that be a fair assumption 15% to 20% top line growth for Q1 FY '27?

See, [ Shubhanshu ], as I said earlier, we would avoid giving any guidance in terms of giving numbers on quarter-on-quarter or even on the year-on-year basis.

Sure. Yes. I have one question on chlorine consumption. I think you mentioned that internal consumption, which will reach 95%, 90% by FY '28 when all things are running at optimal capacity. So is it entirely internal consumption with respect to Epigral or -- when you say 95% consumption?

That is a combination of internal as well as the pipeline customers.

Okay. So will we expand the caustic soda capacity to have more chlorine in future or that will not be needed?

As of now, we have not that in plan. And if required, we might. But as of now, we don't have that in planning to increase the capacity.

Okay. Got it. And I think one last question on the interest cost that I see. On the previous calls, we have guided, I think, for INR 45 crores, INR 50 crores for the entire year. It is significantly higher at INR 72 crores. What will be the reason for the entire year that it's considerably higher? Also, I think the debt was repaid a little bit, so should have been a little bit lower. So like what's the main reason behind it?

So it was majorly because of one of the loan that where we had a mark-to-market impact. So it's just a mark-to-market impact, which has been there in the interest cost put together. Otherwise, what you said is true, the debt has gone down. So in line with that, the interest cost will be low, but it's just mark-to-market impact because of the loan that we had taken where we have a foreign exchange derivative.

Okay. Okay. Can you expand a little bit on that? We -- how are we exposed to it? Like I want to understand in which other micro environments will this interest cost go up in the future? Is it because of the INR depreciation? Or why is that happening?

No, it's an INR depreciation. So our currency, if you look at since last 1.5, 2 years' time, it has depreciated more than generally what it happens in the historically. Historically, it has depreciated by around 3% or 2.5%. But since last 1.5 years, because of many global reasons, it has depreciated more. So that is the reason because of which we have to take mark-to-market impact.

So we have borrowings in foreign currency, that is why it is happening? That's the primary reason?

Yes, it's an instrument where it is -- the derivative swap has been done in terms of foreign exchange. So that's where it has been there. So it's a mark-to-market as of now.

So anything we do it -- can be done to prevent this from happening in the future? Or this can again happen in future if INR depreciates similarly?

See, we are doing our -- I mean, our finance team definitely takes care of it, and they are looking at avenues to mitigate that. So we are working on that, and we'll be finding a solution for that. But again, it's not something major. It's a mark-to-market impact. And even if the currency depreciates from here like in the range of 2% to 3%, then it's not going to impact too much.

Yes. I just wanted to understand like when these environments happen, like this happened like this year it depreciated more. I just wanted to get some idea that there will be an impact on the finance cost. But when you're saying that this should not be happening at this level in future, right? Let's say, the currency depreciates by 10%, but we are seeing a 35% increase in our finance cost. So we might want to look into it.

Yes. So we have considered when we take such products, we have evaluated based on that, where we can reduce the cost of finance. But again, there is too much volatility in the currency, no one had expected. But we understand that and definitely, we'll take care of that.

That's it from my side.

Sorry?

Yes, that was my last question.

Thank you.

Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for the closing remarks.

So in conclusion, I would like to convey that we are moving in line with our strategy and our expansion plans and diversification in terms of multiproduct catering various industries, we are targeting consistent growth. I would like to thank you all for joining us here today. Please feel free to reach our IR if there are any unanswered questions. Thank you again for participation.

Thank you, sir. Ladies and gentlemen, on behalf of Emkay Global Financial Services Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.