EPL Limited (500135) Earnings Call Transcript & Summary

Thank you, Rahman. On behalf of Antique Stockbroking, I would like to welcome all the participants on the call of Essel Propack. From the management, we have Mr. Sudhanshu Vats, MD and CEO; Mr. M. R. Ramasamy, COO; Mr. Parag Shah, CFO; and Mr. Amit Jain, Head, Corporate Finance; Mr. Suresh Savaliya, Head Legal and Company Secretary, Mr. Deepak Ganjoo, Regional Vice President, AMESA; and Mr. Ashok Vashisht, Regional Finance Controller, AMESA, on the call. Without further ado, I would like to hand over the call to Mr. Vats for opening remarks. Over to you, Mr. Vats.

Thank you, Manish. Good evening, ladies and gentlemen. Thank you for your time, and thank you for joining this call. I hope you are safe. Your friends and family are staying safe and staying healthy. It is indeed my privilege and pleasure to share with you the quarter 1 FY '21 results of Essel Propack. We have delivered a very good quarter. We've delivered a revenue growth of 17.7%, with better product mix and operating leverage coupled with optimized cost and a very, very close watch on cost, we managed to grow the EBITDA at 35%. This 35% EBITDA growth translates into 19.8% EBITDA margin in Q1 FY '21 and is a 260 bps improvement on EBITDA from previous period, same time previous year. Our PAT growth, excluding exceptional items, has grown -- has -- is 113.6%. So we more than doubled PAT in this period, increasing our earnings per share from INR 0.90 to INR 1.92. We managed to reduce our net debt from INR 511 crore to INR 248.2 crore. So focus on capital efficiency yielding results has driven our return on capital employed from 15.7% in Q1 FY '20 to now 19.9% in Q1 FY '21. So it is a substantial 421 bps growth over the same period last year. Importantly, it's also sequentially a handsome growth in return on capital employed, which is now closer to 20% at 19.9%. If I was to describe our quarter to you in 2 words, I would use 2 important words: disciplined and determined. We've been disciplined to imagine boldly, to think of new result, to think of competitive gains in these tough times, and we've been determined to drive performance with dedication, with execution day after day, and with our plants and everyone across the world working tirelessly to deliver these results. I was to talk about the -- all our 20 plants have been operational. We proactively work to ensure that we have the best standard operating procedures. And I'm happy to share with you that in some cases, the SOPs used by us are being used as a role model for industries in and around in the cluster in which we operate. We've actually also worked on, and I spoke to you briefly about this in the last investor call in May, on launch of a new category of hand sanitizers. And I am proud to share with you that we've made very good progress. We now have partnered with 50 brands, 50-plus brands actually, across the world, both multinational brands and local brands and are not -- and are confident of delivering the pipeline, which we have spoken to you last time of 150 million tubes. We've commercialized a large portion of it in quarter 1 itself. In management through all this period, what we've done is actually used 3 things: communication, very clear feedback mechanism and clearing the path. So if I could use -- so it was basically a crisis committee constituted which made -- which had all the senior members, many of them are around this call with you today. And we would do this regularly. So it's about communicating. It is about continuously getting feedback and clearing the path wherever necessary for our teams to be able to deliver. Our emphasis on cost management need not be underlined again. You are aware of the Project Phoenix we started last year. We are continuing that. The Phase 2 of Project Phoenix is now running very effectively across all our plants across the world. Overall, our liquidity management position is very strong as well with our gross cash position at INR 3,101 million or INR 310 crores at the end of June 2020. The new focus on capital efficiency is leading to reduction in net debt. And I think that is a phenomena we will continue to focus on this area as we continue to drive market-leading revenue growth. So this is something which we'll continue to do. At this moment now, let me -- allow me to take some time and talk to you through the 4 pillars we have emphasized on achieving our mission. And let me start with the first pillar and share the progress with you on quarter 1 FY '21 for all these pillars. So let me first start with the first pillar: the accelerated growth in Personal Care. So if you look at it, we've -- in the last 10 years, we've delivered a CAGR of 15.9% in our Personal Care categories, which include beauty and cosmetics. It includes pharma. It includes parts of food and even home and art kind of categories, which are part of it. Slowly, but surely, we've been opening new categories. The latest one to be opened in this space is hand sanitizer, which I spoke to you about, and we are pursuing some others as we go forward. So in this quarter, we delivered a 21.2% growth in this category. So after a CAGR of about 16% over the last 10 years up until FY 2020, this quarter has started well in this space as well with a growth of 21.2%. This has led to the contribution of this category now standing at 49% at the end of quarter 1 FY '21. This is really happening. If you remember from the last call, we had gone to 45% in FY '20 from 43% in FY '19. So I'm delighted to share this number with you. Having said that, I think these are COVID times. So as we go through the year, we are committed to improving this number to over 45% of FY '20. 49% number of this quarter may or may not be the number we continue as we go forward. So our commitment to improving our product mix to balancing and strengthening our portfolio and growing personal care is steadfast. As a matter of fact, I'm delighted with the number we've delivered in this quarter, but I'm equally conscious of pointing out to you that these are COVID times and some categories may have got affected a little bit more than the others. So therefore, I wouldn't take this quarter number as cast in stone. I think in terms of our progress on Personal Care across regions, I think it has been very good. I think we've grown very rapidly in East Asia Pacific, China. China has seen a very strong V-shape recovery. So overall performance in China has been very good. But at the same time, I think our Personal Care growth there has been stupendous. Against a 21% CAGR in the last 3 years in this category, we've delivered a growth of 90.8%, almost doubling this in this period. I think our growth in Americas has been about 30.6% in this quarter, ahead of the CAGR we've delivered in the previous 3 years. And in Europe, that growth has been 37.3% against 19% CAGR, which we delivered in the previous 3 quarters. So I think as you will hear more from me on Europe, Europe has delivered a very strong performance, both on revenue, but more importantly, on margin expansion. I think the growth in AMESA has been muted. But if you were to look at our growth versus some of the key competitors, and more importantly, some of the FMCG companies who declared their results in India, and we've seen 3 or 4 results already coming out, I would say that we continue to motor, and we will make progress as we go forward. So good progress on Personal Care, now contributing 49% in this quarter and accelerated growth across regions. I think the second pillar is continued leadership in Oral Care. And I think on this pillar, again, you would remember that we've delivered a 10.1% CAGR through FY '11 to FY '20, about 10 years CAGR of 10%. Even in this quarter, when I must say Oral category has been under pressure, on account of India particularly where we have a very strong presence in Oral Care, but also on travel tubes, on sample tubes, where there is a large component of Oral Care in these categories. Despite that, we've managed to deliver a growth of 10.4% in quarter 1 FY '21. So we are delighted with this. We continue to strengthen our position in Oral Care. We are basically -- you are aware, we are a market leader across key markets. We are continuing to strengthen our long-term relationship with customers. We are working through product and process innovation on sustainability, and you'll hear from me on that as well a little bit. We continue to remain agile. So our wallet share gains are growing with marquee customers, and we've shown considerable resilience against COVID-19 impact in this category and across regions. And I would like to single out AMESA where we've done a very, very good job in this place. I think the first lever, which we've spoken to you earlier, which is an important pillar of our mission is improved performance in Europe. I am absolutely delighted to share the performance which Europe has delivered. So first of all, the revenue growth of Europe in this quarter, which we spoke about have been stupendous. We've delivered a revenue growth of over 30%. We spoke about that. It's been Personal Care growth of 37% and Oral Care growth of 19%. So strong growth in Europe. Because of the accelerated Personal Care growth, the percentage contribution of Personal Care in Europe has gone from 64% in FY '20 in that geography to 70% in Q1 FY '21. We -- all our efforts which we put in, in the last couple of years are now yielding results. We strengthened our front-end organization. We've improved considerably our pipeline development process, our investment in capabilities and flexibilities and agility has really big dividend in accelerated growth in Europe and particularly our ability to open new categories in these tough times. The other important feature is that while doing all of this, we managed to expand our margin. So at Q1 FY '21, our margin stands at 15%. This is almost a 500 bps improvement over a year-ago period, but it's also about a 220 bps improvement against our FY '20 number. So our journey on strong growth and EBITDA margin improvement in Europe is truly there, and we are basically confident on building on this. So the Europe performance is indeed, in these times, being very, very heartening. And this is a very, very strong green in terms of our pillars. Finally, I think on industry leadership in eco-friendly solutions, we've always talked about it. We are committed to sustainability. And we are doing more and more work in this area. I must say Platina, which is -- has been fully recyclable laminate, is now successfully recognized by APR. We've also got a Green Maple Leaf, which is in Personal Care. That has also been recognized by APR. Etain tube which are on reuse are now being used by Oral Care global major. So with also the heartening fee, which I wanted to share in this -- as the news in this period with you is that we've now commercialized many of these between Oral Care and Personal Care across geographies and across some large marquee customers. So I think with this, I think I would like to once again end on the 2 words I talked about, which is disciplined and determined. We are disciplined, and we will bring in the power of disciplined creativity to find newer ways to grow. We are committed to grow and you would be -- you would -- I'm sure all of you around the table will appreciate the 17% growth we've already delivered in quarter 1, and we are well on our way to deliver a good year. We are determined to seize these opportunities with full determination one day at a time, one relationship at a time with results that is totally unmatched. So thank you, ladies and gentlemen, disciplined and determined Essel Propack.

[Operator Instructions] The first question is from the line of Trilok Agarwal from Birla Sun Life.

Congratulations on a wonderful quarter. And I must say you guys -- to the whole team, particularly to get this kind of execution in a very tough quarter is very commendable. A couple of questions I had. One is, if you could just share some thoughts on what drives -- what drove such strong revenue. And obviously, I would assume that margin -- I mean, profitability is a function of cost leverage, if you can throw some light on that region. And also in context of health and hygiene, particularly in Asia, and I'm sure you must have been seeing this trend across the world picking up, do you see -- do you think the acceleration towards higher salience to sales will be much faster than we already envisaged?

So could I -- I request you to repeat the second part of the question, please, for...

Yes. So I'm saying given the pandemic for the health and hygiene sort of categories across the world might see an acceleration in growth and adoption, correct? So in that context, do we see our salience to sales of Personal Care much faster than originally sort of internal plans?

Yes. So I think let me quickly address the question and then open it up for Ram to comment on it further. So I think in terms of -- if you see our growth, you are absolutely right. These are really good growth. I think what has led to this growth is I would say 3 fundamental things. The first is a well-balanced and a rich category portfolio. I think it can also be a portfolio which runs into different categories. And in times like this, it is very, very helpful. Majority of our portfolio is also at the staple end of the business. A stable business, a stable business, as they say. So that is helpful, absolutely without doubt. I think the second piece, which has been very helpful in the time like this is our geographic spread and our presence across the world. And therefore, we've seen performance -- actually, performance from across. But I think the severe lockdown, which India saw in April and May, and I must say, India has recovered very well in June. I think we've delivered double-digit growth in India as well in June. But I think our geographic portfolio allowed us to balance these things and bring the growth out. And third and most importantly is, I think, the management team and our agility and innovation. And I think what we demonstrated in this period, specifically with the launch of hand sanitizer which we've spoken about, and to be able to get 50-plus brand in the market in a period of 3 months, I think is commendable. So I think those are the 3 key reasons for growth that we've delivered. We continue to work on costs, and I would ask Ram to comment a little bit more on it. So I won't let that -- let there be any duplication. Let me quickly go to the third part of your question, which is on hygiene, health and hygiene. You are right, health and hygiene as a trend is a secular northward trend. It is a habit, which is what is called one of those sticky habits and is likely something which will continue, in my opinion, even after the pandemic has gone to some extent. And to that extent, you are right, that I think it will allow us to accelerate and to participate in categories -- some of the newer categories, which we've either opened up or which we will see opportunities in. So you are absolutely right. We will continue to motor in this zone as we go forward. Ram, if you would like to add on this one?

As said [indiscernible]...

Just one more question, if you can -- sorry. Just as a follow-up over the first one itself. In Asia Pacific, again, just to get this clear, the growth is mainly a function of salience of Personal Care improving significantly this quarter? Or is that a meaningful client share or in case -- is there something else that we can read on this, in Asia Pacific, I am talking about particularly?

Yes. So in Asia Pacific as well, it's not -- see, I think there has been wallet share gain, which I think we should -- we will -- we'll be there across. There has also been growth in health and hygiene as you spoke about. I think at the same time, there have been growth in Oral Care. So I think as I told you, for the world and even in Asia Pacific, so I think, therefore, we basically managed to grow each. So it's not one pillar that we are standing on, we managed to grow this considerably. So I think you're right, especially if you look at China or Asia Pacific. If you meant Asia Pacific, China, I think we've seen a very healthy growth in Oral Care also. Ram, please continue.

Yes. As we explained, you have -- we have seen a V-shaped occurring in China, especially after the COVID hit them in the last quarter of the last year -- last financial year, right? So we saw that recovery quick. But we were continuously working on a lot of brands, both in Oral Care as well as on Personal Care, especially hair care products. Those have taken up really well. So we have improved our wallet share with the existing customers. We have also added customers in the region, similarly in Europe as well as in Americas. Unfortunately, India got hit in April. So you will see -- you would have seen really a muted growth in revenue in India, whereas others have grown then. So one good thing that -- as a company, because of this Phoenix 1 and Phoenix 2, is our ability to control our expenses in relation to the volume and the growth. So we are doing many projects. The projects are very structurally strong in terms of usage of materials to reduce wastages, in terms of improved utilization of equipments and in terms of number of people that we employ across geographies. So everything has worked very well and so you'll see margins are growing too.

[Operator Instructions] We take the next question from the line of Kishan Gupta from CD Equisearch.

Congratulations on a great set of numbers, firstly. And I had 2 questions, sir. First is what sort of interdependencies are there between the 4 segments?

Yes. And do you want to say your second question also?

All right, sir. And sir, you said that do not take these numbers in stone as far as first quarter is concerned. So can you give us a flavor without giving any sort of guidance, but if you can give us a flavor as to what sort of expectations do you have as management as the year progresses?

Okay. Thank you. So I think, first of all, let me tell you my comment on not to take it -- not to take these cast in stone was a very limited point on the 49% Personal Care because last year -- we have been every year inching up, and we are committed to inching that up. We have moved it from 43% to 45% in FY '20. We are committed to moving that up further in FY '21. I'm not sure the Q1 number will be fully representative of quarter 1 of FY '21. So that was the limited point actually on that one. We've delivered a very good quarter 1. We remain optimistic as we go forward. It is a tough environment. But we remain optimistic with the virtual cycle we set in, in terms of wallet share gains, in terms of new categories, which we've just opened up, in terms of the cost benefits and advantages, which should continue to flow through because that has become almost like a -- it's become habit, and it's a good habit. So I think -- so that discipline should continue. So therefore, we are seeing this, but it's a very tough environment, which I don't need to underline to all of you guys out here. So I think that's the -- that's on your second question. On the first one, I think the interdependency on 4 segments I think is a very good question. I can see there is interdependency in -- actually many areas. So there is interdependencies or advantages, you could call it, or scale, you could call it. It comes into play in the -- in basically web and films. And therefore, our backward integration is really helpful because it's not that you prepare -- 1 film comes from 1 place and another from another. That doesn't happen. There is, of course, scale benefit, which comes in manufacturing excellence and management of cost in that place. So there is interdependency to that stage, to that extent, and of course, there is interdependency from the point of view of customers because many customers play in many of these categories we are playing in. So therefore, you have a bigger share of wallet of the customer and your ability to therefore deliver better experience and a better service to that customer goes up. So I think you're not -- so there is clearly advantages of that interdependency and capability to play the word interdependently which you've used. But I'd like to call it a balanced and a strengthened -- and a strategically balanced and strong portfolio.

The next question is from Gauri Sharma from Roha Asset Managers.

Congrats on a good set of numbers. I just had one question. Mainly, it was on the 2 segments, Personal Care and Oral Care. So could you just give us the margins for those? And if you could just provide us with an idea about how health and hygiene is looking to be in the next few quarters? That would be very helpful.

We don't share margins at the individual category level. And therefore, it will not be appropriate for me to share that number with you. However, I will ask Parag Shah to comment on this one. On health and hygiene, Gauri, like some of your -- a person before you, I think the first gentlemen asked, I think we think it is a category which will continue to grow. It's a sticky trend. So I think -- and that is good news, and we are well-positioned to basically take advantage or grow with this trend.

Thank you, Sudhanshu. You see, our adjusted EBITDA was 20.3%, and the reported EBITDA is 19.8%. So if you look at the same margins in Q1 of last year, that was 17.2%. So clearly, there is a significant increase in the margins. Further, this improvement in margins has been across all our regions, particularly EAP, which has a margin of 27%; Americas, 17%; and Europe, which Sudhanshu mentioned earlier, 15%. So therefore, this improvement in margin is something that is driven by our growth, both in Oral care and in Personal Care. We did say that our Personal Care grew by 21.2%. Oral Care also grew by 10.4%. And we have explained earlier in our commentaries and calls that Personal Care ASPs are 1.5 to 3x the ASPs in Oral Care. And therefore, yes, product mix does help improve margins. So that -- I hope that sort of answers your question.

The next question is from Percy Panthaki from IIFL.

I have only one question. If -- this China growth, it's a stupendous growth of some 90% in the Personal Care division. If you can just break it up a little more granularly in terms of drivers, how much of it is completely new categories? How much is it existing categories but new customers? How much is it cross-selling to existing customers in new SKUs? And how much of it is wallet share increase? I mean, don't -- I don't expect exact numbers, but any kind of flavor that you can give on this would be helpful. And if you can do the same thing for the Europe top line growth also. That's it.

Yes. So suffice to say, you, yourself partly answered your question, which is that it will be -- it is -- we do not share, and it will be inappropriate for us to be able to give that kind of granularity here at this moment. But suffice to say, let me tell you a more -- to try and give you a picture and therefore, hopefully, a little bit more color as to how things would be. So if you look at China, I think what we managed to do is we manage to, like across the world, we've opened up a new category. So yes, there is a new category in this growth, which is hand sanitizers. But let me also quickly add to you that the growth in China, net of that new category, is also very handsome. So I think, therefore, that's the first part. So therefore, yes, there is a new category, but there is a very, very handsome growth in the existing categories as well. I think as Ram was speaking in response to an earlier question, we've added wallet share. We've added new customers. We've actually done innovations, and we've opened up new tube types like dual tube in this period. So I think there is a combination of everything which has gone in. I think broadly speaking, the same is true for Europe. So yes, even in Europe's growth, which you saw, which are basically, there is a new category, and that new category is again there, again, it's hand sanitizer, which is a new category. But even in Europe, what we managed to do is to improve our wallet share with certain customers. We've managed to get new customers. And I think it's the agility and our go-to-market strengthened organization's ability to convert some of these things to basically, first, get to develop, get the business. And then our supply chain's ability now, which has become more agile and definitely competitively more agile in a geography like Europe, has managed to deliver this speed. So I think that's how it is. That's how I would respond to this.

So just one clarification here, Sudhanshu, just wanted to understand if any of the sales this quarter in these 2 geographies are sort of due to bunching up of orders or any one-off exceptional? Or would you say that the quarterly sales that we have clocked here is a sustainable number for the remaining quarters?

So I think good question again. There isn't any word, bunching up of anything. So there is absolutely nothing of that sort. So it's not that there is basically anything of that has happened. But is there -- could there be a small impact in the -- in our global -- in our consolidated numbers and maybe even in these 2 geographies on a slight stocking up mentality which was there in COVID times? The answer is yes. But my sense is there is nothing over, and there could be a little bit of it because that was a mentality which was there through and through, from consumers, to customers, to supply chain, to even manufacturers. So there is a little bit of that, that may have happened, but the trend is definitive, and a lot of this is something which we can treat as -- would be something which is -- which we should be able to carry forward as we go forward.

The next question is from the line of Sanjay Bembalkar from Canara Robeco Asset Management.

Really commendable performance in the current situation. So one question from my side. On the competitive intensity going ahead, do you think the change -- in the current context, there will be change in the competitive intensity going ahead and we'll get much more opportunities to gain market share or wallet share going ahead? And outlook on the competitive intensity would be great.

So Sanjay, it's a good question, but I can tell you my broad understanding in this space. So yes, we believe that strong will get stronger. Packaging as an industry is a highly fragmented industry, very, very highly fragmented industry. So there would be opportunities for consolidation and there could be some consolidation as we go forward. If you -- this is a broad industry trend, I'm telling you. Now again, if you were to look at very specifically Essel Propack, I think we've delivered very good results. We are strong. We've got a strong balance sheet. And I will be honest in saying that, yes, we are being approached. There are targets which we could look at, but we will evaluate them for -- on merit and depending on what it is. And beyond this, I cannot say anything at this moment. But yes, from a secular trend, will there be a bit more consolidation with strong get stronger? I think the answer is yes. And hopefully, we should benefit from it.

The next question is from the line of Ankit Merchant from Reliance Securities.

Congratulations on good set of numbers. Can you shed some light on the American market? And how is that going to perform over the next few quarters?

Can you repeat the question? You meant Americas as a geography?

Yes, yes, yes.

Yes. So I'll say a few words, then I'll ask Ram to comment on this more as well. See, so Americas as a geography, it has also done well in this period. I think the period is quarter 1 FY '21. But this -- the pandemic is there everywhere. It is there in United States as well. And as a matter of fact, if you look at all of Americas, North and South together, Brazil is also very severely affected, as we can see from the numbers. So the impact is there. The impact is on certain subcategories such things like travel tubes, sampler tubes. But I think as we go forward, as a management, we are geared up to seeing where the opportunity is, as I was telling you, and to see how do we mitigate if there are any losses. So I think that's the way we will continue to drive that. And I think there are opportunities as well which will open up. So -- and I think hand sanitizers in tube as a trend is slightly delayed in U.S. So it wasn't as pronounced as it was in other parts of the world. But I think there also, it is slowly coming. It was more bottled there. So that is, to some extent, somewhat good news for us. And we'll see as it goes forward. Ram, if I could request you to add more insight, please?

Yes. In Americas, as you have seen, we have grown slightly better than normal CAGR in the last 3 years. But one different insight of certain sizes like travel packs in Oral Care are not picking up because of COVID reasons. But there are -- pipeline is very, very strong. We explained to you in last 2 quarters call, we explained that we have won a large -- we had treatment contract in U.S. That's getting -- ramping up. We will see as goes along, that revenue will come in U.S. We are also creating a lot of new customers -- customer wins, which will start happening -- which has happened. But the actual execution will start happening as we go now. Yes, we feel very strong about Americas, too.

Sure. And just one question related to EAP. So we have seen a very strong EBITDA margin. So can we expect this to continue going ahead as well?

So you have seen a very good EBITDA margin. But like I was saying in the context of something else, I think this period is -- this last quarter is a little atypical. I would take that number. But one thing I wouldn't do if I was sitting in your shoes, is to blindly, pardon me for that word, extrapolate that. So I think our growth is we will continue to strengthen our EBITDA margin. But I think in this period, because of the mix, some of the places, the mix improvement on the margin maybe accentuated. So just to put it in perspective. So if you would look at some of the areas where Oral Care may -- Oral Care may have -- got affected a lot, you would know that, and Parag has spoken to it many times, that our margins are much better than Personal Care compared to Oral Care. So I think if Oral Care got affected in certain geographies a little bit more and it's going to bounce back, then the mix effect may sort of yield a slightly different number. But I think the point is that, yes, the margin improvement is there. There will be strong margins going forward. Is that exactly the number I would extrapolate? I would. I think that's what I would keep saying for this.

[Operator Instructions] The next question is from the line of Saurabh Patwa from HDFC Mutual Fund.

I just wanted to understand 2 things. One is how much could we see, in this EAP region specifically, the COVID virus effect a quarter before? So is it possible as a part of a demand which we have seen now could be -- which could have been like -- would have been part of Q1 -- calendar year first quarter? And the second question which I wanted to understood, with the COVID pricing falling and like now stabilizing at a lower level than last year, HDPE prices, et cetera, have also fallen. So how much of this has been passed on or I think that's -- I'm trying to understand the impact of the price reduction, if at all, anything. Has it already been taken care or will we be seeing it in coming quarters?

So let me take the first question, and I will ask Ram and Parag to comment on the second one. I think on the first question on EAP growth. And I think you know that there was COVID in quarter 1 calendar or quarter 4 fiscal. And is there a bit of carryforward of that into quarter 1 FY '21 or quarter 2 fiscal? The answer is, yes, there is a little bit of carryforward. It will be incorrect for me to say that there is no carryforward. That will be a wrong statement to make. But if you look at our revenue growth of 45.6% in quarter 1 FY '21 in EAP, even if I was to take a little bit of that carryforward, I would be delivering maybe 70% of this growth still. I'm saying, therefore, even then, it is a very, very robust growth, to answer your question. So I think the growth is really robust. Yes, indeed, in 1 or 2 customers, there could be and there is indeed a little bit of carryforward, which is there. On the price, may I -- Ram, if I -- if you would comment and then, Parag, if you could comment?

The pass-through is with a time lag. We have contractual customers. We passed the prices based on an agreement. Last quarter, prices will be an -- effective prices used for this quarter, right? So yes, that's natural. That keeps happening. But on the price trend, crude oil prices are not directly correlatable linearly to polymer prices, right? Polymer prices will mostly depend upon also demand supply cap, right? Now because of COVID, there are many companies that have scaled down their operations. Some plants have been taken because the price has dropped so much and they have low margin. So most of the polymer -- there are a lot of -- supply side corrections have already happened, and we see prices stable or growing. It's not dropping further on the polymer side. So that...

Year-on-year, how much...