Ester Industries Limited (500136) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Ester Industries Limited Q2 and H1 FY '25 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Gavin Desa from CDR India. Thank you, and over to you, sir.

Thank you, Nirav. Good day, everyone, and a warm welcome to Ester Industries Q2 and H1 FY '25 Analyst and Investor Conference Call. We have with us today Mr. Arvind Singhania, Chairman and CEO; and Mr. Pradeep Kumar Rustagi, Executive Director, Corporate Affairs. We will begin this call with opening remarks from the management, following which we will have the floor open for an interactive Q&A session. Before we begin, I would like to point out that a few statements made in today's discussions may be forward-looking in nature, and a note to this effect was sent in the invite to you earlier. We trust you have had a chance to go through the documents on financial performance. I would now like to invite Mr. Arvind Singhania to make his opening remarks. Over to you.

Thank you, Gavin, and thank you, everyone, for joining us today. I will briefly talk about the key business developments, post which Pradeep will walk you through our financial performance. We are pleased with our performance for the quarter under review, driven by improved operating and financial metrics and a better macro environment for both BOPET Films as well as Specialty Polymers. This is in line with our expectation that we shared with you all in previous calls. We expect H2 to be better than H1 as both the businesses are expected to sustain that momentum. Let me now move on to individual businesses. Starting with Specialty Polymers, Q2 performance was steady on expected lines. We have seen a good pickup in volumes on a year-on-year basis. Demand for our marquee products, namely MB 03 and Innovative PBT, remain buoyant. For the quarter, our overall volume of sales stood at 1,216 metric tons, almost doubled when compared to volume of sales of 599 metric tons achieved in Q2 financial year '24. On half yearly basis, volume stood at 2,198 metric tons compared to 1,125 metric tons achieved in half 1 FY '24. Again, almost 2x on a year-on-year basis. In terms of our key products, MB 03 volume stood at 284 metric tons during Q2 FY '25 as against 179 metric tons during Q2 FY '24. Volume of sales of Innovative PBT for Q2 FY '25 stood at 476 metric tons as against 185 metric tons of Q2 FY '24. Specialty Polymers, as mentioned in the past, is largely an export-oriented business, driving a significant portion of its sales to customers based out of the U.S.A. and China. The end use of these products is mainly for carpet and consumer electronics industry based in U.S.A. From a margin and profitability perspective, the business is largely insulated given the IP protection available for major products. Going forward, we expect H2 to sustain momentum amidst exciting product pipeline and growth visibility. Moving to the Film business now. I'm extremely pleased to report that we are now witnessing an improved demand-supply scenario, which in turn is translating into better pricing and margin environment. Significant new capacities commissioned over the last 2 years resulted in massive oversupply that put pressure on pricing and margins in BOPET business. However, the growth in demand both within India and across the world remain robust on account of growth in application segments, enhanced consumerism and growing GDP. Our volume of sales during the quarter under review was affected by the plant shutdown undertaken for a couple of weeks. Despite lower volume, we were able to achieve improved margins and deliver significantly better profitability, largely owing to improved demand-supply scenario and better product mix. As I have been highlighting, our efforts are directed towards improving our product mix by increasing the share of value-added and specialty products. I'm pleased to share that on a consolidated basis, we have been able to increase the share of value-added product to 29% during the quarter as against 17% in Q2 FY'24. Our wholly owned subsidiary, Ester Filmtech, generated revenue of INR 99 crores with volume of 7,425 metric tons during the quarter. We expect the entity to deliver revenues of approximately INR 375 crores in current fiscal and INR 450 crores to INR 500 crores upon achieving optimal utilization at reasonable price margins during next fiscal. Further, in addition to improving demand-supply environment and better product mix, plastic waste management rules is mandating utilization of minimum 10% recycled content in flexible packaging laminates. Coming into force from 1st of April 2025, it's expected to further increase demand for polyester film with conversion taking place from other subsidiaries to polyester. As regards our JV with Loop Industries, Inc., I'm happy to inform you that it is progressing well. And an entity by the name of Ester Loop Innovative Technologies Private Limited (sic) [ Ester Loop Infinite Technologies Private Limited ] has been incorporated. Teams having members from both Ester and Loop have been formed for implementation of the plan and look after key functions like detail engineering, project setup, raw material procurement planning, financing, et cetera. Our target time line is to commence commercial production in the second quarter of calendar 2027. In summary, we anticipate a significantly better operating and financial performance during the current fiscal as compared to the fiscal gone by. Specialty Polymers highlighted its resilience and potential during the first half. Similarly, the outlook for the Film business on the back of a more stable environment is promising. We are confident that both our SBUs are primed for growth and value creation. The partnership with Loop, a transformative and path-breaking endeavor, is set to drive profitable expansion for the company in the future. That concludes my opening remarks. I now hand over the floor to Pradeep to walk you through our financial performance. Over to you, Pradeep.

Thank you, and good day, everyone. Thank you for joining us on our Q2 FY '25 earnings call. Let me quickly walk you through our financial performance, post which we can commence the Q&A session. I would like to start with financial performance of Ester Industries. Total income on a stand-alone basis stood at INR 302 crores as against INR 244 crores in the corresponding quarter last year, higher by 24%. The primary reason for the growth is the strong revival in both Specialty Polymers and Film businesses. EBITDA during the quarter under review, including nonoperating income, stood at INR 36 crores as compared to INR 3 crores during Q2 FY '24. In percentage terms, it stood at about 12% as compared to 1% during Q2 FY '24. EBITDA during H1 FY '25 stood at INR 53 crores as compared to INR 15 crores during the corresponding half last year. Coming to financial performance of wholly owned subsidiary, Ester Filmtech. The revenue stood at INR 99 crores as against INR 68 crores in the corresponding quarter last year, higher by 46%. This is the strong revival in Film business. Reported EBITDA during the quarter under review, including nonoperating income, stood at INR 6 crores as compared to negative of INR 3 crores during Q2 FY '24. EBITDA for the Q2 FY '25 would have been INR 15 crores, that is 14%, but for impact of exchange fluctuation and mark-to-market losses on FCL and derivatives availed by Ester Filmtech. EBITDA during H1 FY '24 -- '25 stood at INR 7 crores as compared to negative of INR 6 crores during the corresponding half year last year. The same would have been INR 15 crores but for the impact of exchange fluctuation and MTM on FCL derivative availed by Ester Filmtech. In terms of sales in volumetric terms, Ester Filmtech sold 7,425 metric tons of film during Q2 FY '25. With the pricing and margin trend improving and demand-supply mismatch narrowing, we are confident that Ester Filmtech will contribute positively to the overall growth of the business in coming years due to its low operating cost. We expect the unit to generate revenue by INR 450 crores to INR 500 crores upon achieving optimal utilization by FY '26. On consolidated basis, EBITDA for the quarter stood at INR 43 crores as against negative of INR 0.4 crores generated in Q2 FY '24. On a half yearly basis, we could earn EBITDA of INR 60 crores as compared to INR 9 crores earned during H1 FY '24. EBITDA for the quarter and half year would have been higher by INR 8 crores but for impact of exchange fluctuation and MTM on FCL derivative availed by Ester Filmtech. On consolidated basis, we could earn PAT of INR 3 crores as compared to loss of INR 30 crores incurred during corresponding quarter last year. PAT of INR 3 crores would have been higher by INR 8 crores but for the impact of exchange fluctuation. Liquidity position at consolidated level remains strong as can be seen from the cash flow statement for the half year ended September '24 provided in the investor presentation. Leveraging in terms of net debt EBITDA multiple is also improving with improved operating performance. All our accounts with all the lenders remain in order. In fact, we have repaid installments of some loans ahead of schedule. We are also maintaining more than adequate headroom in working capital credit lines sanctioned to us by banks. For funding JV, Ester Industries has come out with the issue of share warrants through preferential route amounting to INR 175 crores. We have received the requisite approval from both BSE and NSE. 25% of the issue amount, that is INR 43.75 crores, is expected to be received in the next few days from promoters and other independent investors. As stated by Arvind ji, we have confidence in the growth potential and value creation of both our businesses. Specialty Polymer has showcased its growth capabilities, and the Film business is showing improved performance with a positive pricing and margin trend. The robust growth in demand for BOPET film is aiding in balancing the demand-supply dynamics. Our partnership with Loop Industries is [indiscernible] to be a game changer. When operational, it is expected to substantially alter our growth trajectory and profitability. That concludes my opening remarks, and we can now commence the Q&A session.

[Operator Instructions] The first question is from the line of Krushna Parekh from Dolat Capital.

My first question is, what are the present contributions for BOPET? And where do you see them progressing over the next year?

The current value additions that we have is about INR 45 per kg for 12 micron film.

Over PTN energy?

Over PTN energy. It's expected to be in the same ballpark going forward as well.

Okay. Second is, what is the maximum utilizations can we achieve at Ester Filmtech?

When, in what period?

In next year?

Next year will be substantially better than this year. If we talk about FY '26, I think we should be in the range of about 75% to 80%, maybe even 85%. And H2, we could be 65% to 70%, H2 of this fiscal.

Okay. Got it. Got it. And what will be the annual revenues and margins do you foresee from our Loop JV?

Sorry, say again?

Annual revenues and margins do we foresee from our Loop JV?

No, no, no. Please understand the JV is a completely separate company, right? So in the Loop JV, the JV company is -- the capital expenditure is in the range of about $165 million, which is about INR 1,450 crores. We expect revenues to be in the same region, say, about INR 1,500 crores. And the EBITDA margins will be in the region of about 35%.

Okay. And what are the competing technologies available?

As of now, we don't see any technology which is ready to be deployed commercially globally.

Next question is from the line of Jatin Damania from SVAN Investments.

So sir, in your opening remarks, you alluded that there is an oversupply in the BOPET market. But despite that oversupply, we have seen a significant improvement in our spreads across both the businesses. So can you help us understand what is the demand-supply scenario that we are seeing as compared to the past year? And how shall we foresee going ahead?

So as far as the Specialty Polymer business is concerned, there is no oversupply. It was a demand problem arising of the recessionary situation in the U.S., which has changed. Now the demand has picked up. So there is no oversupply in the Specialty Polymer business. The oversupply was only in the polyester film business, which over the last 2 years has improved substantially. Now the demand-supply has closed quite a bit. And I think in the next 12 to 18 months, this will be completely balanced.

Yes. But in the last con call, we indicated that the demand-supply has narrowed down to almost 15,000 tonnes on a monthly basis. So like-to-like basis, if one wants to compare it, so what is the number right now?

Yes. So right now, the demand-supply gap would be in the region of about 15%, 20% max.

So that should continue to remain at the same level only?

No, no, no. It will keep improving because the demand is going to continue to grow while there are no new major capacities expected. The demand-supply will become better and better over the period of time.

There are 2 triggers. One is the continuous growth in demand in the domestic market, which is expected to be in the 11% to 13% range and the global demand at about 6%. And then from 1st April onwards, the plastic waste management rule is likely to trigger a spurt in demand.

Okay. So now the demand -- since there is no new incremental supply that is going to hit in bauxite as of now and with the demand improving by probably a higher single digit globally, don't we expect the spreads over MEG and PTA to improve from INR 45 a kg that what we reported in the last quarter?

See, please understand this is domestic demand. This is domestic supply. Globally, the situation is different because a lot of capacities are coming up in China. And the global demand-supply is going to take a little bit longer, but it is not going to affect our domestic demand-supply. So the domestic will be very good, but the pricing of the export market is not going to be that lucrative as it used to be before. But we expect on a -- just to be a little bit more prudent, we don't expect our margins to go up substantially over the existing INR 45 or INR 50.

Okay. So once you walk with the numbers...

[Foreign Language]

Yes, you're saying something on the import numbers.

No, no, no.

No, no, sir, you are saying something on the imports.

No, no, no, nothing. That is nothing.

So now when you say that on the specialty, we don't see any problem, but the demand now suddenly has improved. But since our specialty doesn't have any competition and margins are also protected, despite that and improvement in the book, we have seen a decline in Specialty Polymer business margin on a sequential basis. So what was the reason for that?

Very simple. Actually, in this quarter, we got a one-off business of a product in the domestic market at very, very low margins. It is a one-off business. We decided to take it very seriously [Foreign Language]. So we took that business. This is not going to be repeated again. So actually, you will see a slight dip in the revenue also in the coming quarter because this business will not come back. And the drop in margin was because of this. And because this will not be sold again, the margin percentage will go back up in the next quarter.

So that means to say that sequentially in third quarter and fourth quarter, our revenue will dip with a lower volume, but our margin will improve. Is it fair to assume?

Exactly. Exactly. Yes, the revenue will be slightly lower than Q2, but the margin percentage will go back to 37%, 38%.

And in terms of the Loop, now we have indicated in the next 18 months, we'll be commencing the production. So just wanted to understand. How much we have spent till date on the same?

Right now, we haven't spent much at all. The company has just been formed. And now the funding will start, and now the next step will be -- we've already given the engineering contract to Tata Consulting (sic) [ Tata Consultancy ]. So the expenditures are now going to begin. Nothing has happened till now.

So for '25 and '26, what should we assume as far as the CapEx on the Loop business?

Sorry, say again?

For '25 and '26 for the remaining half of this fiscal -- for the next fiscal, what should be the CapEx for the Loop?

See, the CapEx for Loop is $165 million, which is about INR 1,450 crores. And this will be spent over a period between now and June '27.

Yes, sir, I agree. But I mean in terms of the spending -- actual spending, I mean, are we going to spend a major portion in the latter half of the -- I mean, towards the coming...

The major portion will be spent after third quarter of next year.

Next question is from the line of Aman Kumar Sonthalia from AK Securities.

Yes, sir. What are the chances that the government will implement this recycling by 1st of April 2025?

It's already notified.

It's notified. But is there any chances that they will change the dates again?

I cannot read the government's mind. I don't think so because if they had to give extension, they would have already done it by now. Now only 4 months are left. I don't think now there is any -- the chances of it getting extension is low, I would say, in my opinion. But it's the government. Anything can happen. But we doubt that it will happen because this is now -- sustainability is a very strong requirement everywhere across the world. And even India has made commitments and our Prime Minister is so clear about it that the sustainability project will not be postponed anymore.

So what are the chances that it will improve the demand of the BOPET?

We feel so because I have said this before. Polyester film is the only substrate which can offer material with recycled content. BOPP, it's not possible.

Right, sir. And sir, a lot of companies are setting up plants overseas. So what are the benefits they are getting instead of setting up a plant in India?

Which products are you talking about? People are setting up...

Operating BOPP like SRF, like Polyplex, like Uflex, they are setting up plant outside India.

No, no, no. I think you got your information wrong. No more new lines are coming up by any of these companies except for one line by SRF, which is setting up in India, BOPP. No new polyester expansion by any Indian company has been announced right now.

SRF is also BOPP.

And SRF is also BOPP in India, not BOPET.

Not BOPET. And sir, what is the current spread at the moment? Previous quarter, it was INR 45. And what is the spread currently in the month of November?

About INR 45, INR 47, INR 48 right now.

And it's quite stable here?

Yes.

Next question is from the line of Saket Kapoor from Kapoor & Company.

Thank you for a very detailed investor presentation and also the description given there in the time-by-line explanation. It is clear maximum question, sir. We hope the continuity of quality of presentation to continue and kudos to the team. Sir, first, when we look at your capital work in progress...

Saket, sorry to interrupt you. We are losing you.

Sir, I was looking at the closing -- capital work in progress closing balance of INR 85 crores. If you could just provide the breakup of the same since for this quarter, it is only INR 18 crores that is in the purchase of property, plant and equipment. So if you could just provide the breakup and when -- where is this money being spent.

INR 85 crores, I don't know where...

I don't know where you got this number from.

Yes, I'm giving you the number, sir. This is in the consolidated statement of account for the balance sheet. The capital work in -- sorry, sir. I'm wrong. That's the closing...

We have placed an order for an extruder to be installed in Hyderabad for recycling of the PET for which advance has been given. If you look at the consolidated balance sheet...

It is INR 85 crores, yes.

So there are advances for extruders. And then there are certain capital work in progress related to modifications in our existing Khatima plant. So there is a continuous polymerization plant we're revamping. There is an offline coater for which advance has been given, which is -- we have 3 coaters. There is an advance given for fourth coater for producing value-added films. So it is not for expansion of existing capacity. It's for downstream value-added products and to take advantage of the plastic waste management rule, which is kicking from 1st April '25.

Correct, sir. So when are we going to capitalize these and the benefit will start...

Most likely by June of '25.

June '25. And sir, you mentioned that for this...

These are imported machines. There are machines which are under construction. So it will take about that much time.

Okay. So these are -- this will add to our margins going ahead?

We have always maintained that we are going to focus on building up or increasing the volume of VAS products. So these are the actions to achieve that objective.

Okay. What was our sales mix, sir, in this -- for the first half in terms of the value-added unit-wise?

Consolidated basis, we have 29% of our volume has been in value-added and specialty products. 29% on a consolidated basis. Standalone [indiscernible] 33%.

Correct, sir. And with the implementation of these modifications, what are we eyeing in terms of the contribution to rise to?

40% to 45%.

Come again, sir?

40% to 45%.

40% to 45%. And this will be apparent for the next financial year, sir?

No. The extruder will start up sometime in July -- June, July. So I think we'll miss one quarter next year. And then we'll also have to see how the ramp-up happens for the demand for film recycled content. But we expect it to be -- we have a substantial number next year itself.

Next question is from the line of [ Ritu Kumari ] from [ Emkay ] Investment Managers.

So I have 2 questions. The first one is, what are the new products in Specialty Polymer which you believe could do well? And the second one is, where do you see the business, the Specialty Polymer business, in the next 3 years, both in terms of revenue and margins?

Okay. So I'll give you an answer to that. As far as our existing Specialty Polymer business is concerned, we expect it to grow by about 25% to 30% year-on-year. And some new products are in the pipeline, which are -- some of which are under trials and qualifications with customers. 1 or 2 qualifications have already been achieved. I will refrain from talking about the exact product right now because of confidentiality, but that's the kind of business growth we expect from Specialty Polymers over the next few years. Apart from that, once the Loop project is commissioned, we will get to -- we'll be doing tolling for the Loop project to the extent of about 50,000 tonnes per year, which will give Ester a major boost in the Specialty Polymers business.

Conversion of certain material into polymers on job work basis.

That will be a substantial volume of 50,000 tonnes starting around June or July of '27.

June or July. Okay. Yes. That's helpful.

Next question is from the line of [ Surender B. ], an individual investor.

Congratulations for very good results. Congrats to Mr. Singhania, especially. Sir, my question is that regarding in the stand-alone balance sheet, the top line and in consolidated top line, the difference is not reflecting about sales of Ester Filmtech. That is INR 99 crores. Can you just elaborate that point?

So there is -- in consolidation, there is a certain amount of sales made by Ester Industries of polyester chips to Ester Filmtech. So when you consolidate the accounts of 2 companies, the intercompany transactions are eliminated. So the sales made by Ester Industries to Ester Filmtech was about INR 75 crores, which has been eliminated.

Okay, sir. Sir, number -- another point is that, sir, have you any identified location for our JV project?

Yes, in Gujarat. It will be in Gujarat.

In Gujarat. And sir, what I'm saying is that regarding this Specialty Polymer business, now in the presentation, you are showing only 2 items. There is PBT and one more, the MB 003 (sic) [ MB03 ]. Is there any more items that is under our sales?

You see, we have only mentioned 2 because these are the biggest. There are many other products which are smaller volumes. So we haven't -- because if I start mentioning all the products, it will take -- it doesn't make any sense. So we just mentioned 2 of our major products. Apart from that, we have 5 or 6 other products which are being sold but in smaller volume. And there are 2 or 3 other products which are under qualification right now, which are new products.

[Operator Instructions] Next question is from the line of Aditya Vora from Share India Securities.

Congrats on a great set of numbers. Sir, I have 2 questions. One is we export -- the Specialty Polymer business, I think majority of it is exported. So are we facing any issues in terms of logistics costs going up or the logistical delays?

It was -- the logistics costs had gone up, but our Specialty Polymer is done on FOB basis. So it really doesn't matter. Everything is a pass-through. If the freight rates go up, it gets passed through. If they come down, it gets to them. So we supply on FOB basis.

Right. Right. And sir, secondly, I was looking at your margins. Your commodity margins are at -- the polyester margin are at 8% in this quarter. I mean logically, how do we see that over the next 2, 3 quarters? I mean you mentioned that you are at INR 45 per kg in terms of gross spreads. But because in COVID, we did up to 20%, 22% EBITDA margin. I understand that is not going to come back. But I mean how do we see margin ramping up going ahead?

No. So like you rightly said, and I said it before, the margins we saw during COVID period, we don't expect them to come back, at least not in the near future or the medium-term future. And I think the margins we have today of INR 45, INR 48 are, in any case, very, very healthy margins. And for the moment, we don't expect these margins to improve any further. The margins are expected to remain at the same level. Only thing that will happen is that capacity utilization will keep improving between now and the next -- literally quarter-on-quarter.

And that will result into an improved margin.

And that will result into improved profitability.

Right. Right. So basically, the polyester business, operating leverage will play an important role, and the margin expansion could come from your Specialty Polymer business, right?

Yes. But please understand, they are 2 separate businesses, Aditya. Because the Specialty Polymers business will keep growing in volume, and polyester film business will also keep growing on volume because the capacity utilization will keep improving. But the margin per kilo will not -- is not expected to improve in polyester film business.

Next question is from the line of Yash Dedhia from Maximal Capital.

I joined in a little late, so my question could be repetitive. Sir, I just wanted to know industry-wide update on the polyester business. So any capacity which is going to come in near to medium term?

No. I mean we have one line which has already started up a month, 2 months ago. And apart from that, the next line is expected to start up only in early '26. So -- and by that time, the demand is going to grow substantially. With the current demand growth, we will need 2 lines every year, 2 new lines every year, '26 onwards. Otherwise, there will be a shortage.

And so in industry, you are saying that the new line which is going to come is now going to come in FY '26?

Yes, late '25 or early '26. I'm not sure, but somewhere there.

And is it substantial?

Sorry?

Is it substantial?

Sorry, I can't understand.

Is it -- the new line which is going to come, is it huge?

No, no, same size. That will all be of same size.

44,000 tonnes per annum capacity.

Okay. So this line you are talking about, for us or for the industry?

I'm sorry, your question is not -- I'm not understanding your question.

This line you are talking about, is it for us or for the industry?

It's not for us. Somebody else is putting it up.

We are not expanding.

We are not expanding anymore in our capacity.

Understood. Understood. And then I'm not able to comprehend why we don't foresee any rise in margin when the consumption is going to go up and the new capacity is not going to come.

There is still excess supply over demand.

Understood. Understood. But then that gap between demand and supply is also narrowing down?

It is narrowing. It is not finished.

Correct. So margins which were there 6 months ago and margins which are there now have improved?

Sorry, I can't understand your question. What is your question? I am really unable to comprehend your question.

No, no. So margins which were there 6 months ago and margins which are there right now have improved?

Yes.

Yes. That has been the case even when the supply was more than the demand?

What is the question? Again, I'm not able to understand your question.

No. I'm just not able to comprehend why the margins would stay where they are and only the capacity utilization will improve. I mean the capacity utilization was never the constraint 6 months ago as well.

That's what I'm trying to explain. It is our projection that they will remain stable. Actually, if they go up, we don't know. But as of now, we expect it to remain stable.

Okay. And sir, in our specialty -- mix of specialty products in the polyester business. So how do we see it improving?

See, Pradeep just mentioned a short while ago. I don't know if you were there on the line. Right now, we are doing about 30% value-added products, which by -- I think by March of '26, we should be at about 40%, 45%.

Okay. And the margin for this business is sustainable irrespective of the commodity prices?

Yes, largely.

And what is the delta?

Various products have different...

On an average for us, what would be the delta, say, for the key products?

So I'll give you just the proportion in the volume and the value. So like 30% of the value-added products have given us 45% of the contribution in the sales. So that gives you an idea of what kind of margin could be there in value-added and specialty products. It ranges from INR 50 to INR 120 also.

Understood, sir. Understood. And sir, one last question. I just wanted to know that there are several players in this industry and everyone is having different capacity utilization. So for example, some of our competitors are running on optimum utilization. Some of our competitors are running, say, maybe around 50%, 60% as well. So going ahead, do we see an excessive ramp-up in the capacity utilization from those players and somewhere...

I don't know where you're getting the capacity utilization number of individual companies. We don't have it.

No, no, not all the companies, but a few players who are listed at least.

I don't know. I don't know. I can't predict the capacity utilization of my competitors.

We can share our numbers.

We can share our numbers. I can't talk about others.

Next question is from the line of Saket Kapoor from Kapoor & Company.

Yes, sir. Sir, can you provide me with the net debt number on a consol basis? And also what are our current maturities?

Yes. So the term debt in Ester Industries, interest bearing is about INR 181 crores. Ester Filmtech, it is INR 350 crores. So total INR 530 crores. Working capital, both the companies put together is INR 197 crores. That makes it about INR 725 crores or INR 730 crores of debt. But we have net cash of about INR 74 crores in the balance sheet. So we have net debt of INR 650 crores. And the repayment obligation going forward from next year onwards would be about INR 35 crores in Ester Industries and about INR 50 crores in Ester Filmtech. So the repayment per year on a consolidated basis would be about INR 80 crores.

Right, sir. And for this Loop JV part, sir, what would be the ratio of investment? How much will be invested by Ester and then our partner?

Equal. Equal. It's a 50-50 joint venture, and both of us will be investing about INR 250 crores each in equity.

Okay. And when will be the first tranche of money will be made available, sir? When we will be drawing that -- investing our money? INR 250 crores will be at one go itself?

No, no, no. So it will be done over a period of next...

As per requirement.

As per requirement, we'll keep on investing. The first tranche of investment that we expect to make is in the second half of November.

November '25?

In the second half of November.

This month.

This month.

This month. Okay. This month itself. And what would be the amount, sir?

The first investment by Ester and by Loop into the JV will be made in this month, between 15th and 30th of November. And we expect the first tranche of investment will be between INR 25 crores and INR 30 crores each.

Okay. And for the raw material mix, if you could give me the trend for this MEG and the PTA prices?

PTA and MEG, both are quite stable. In international terms, dollar terms, 700 is the range for PTA. 550 is the range for MEG. On a per kg basis, currently, the PTA is about INR 75 and MEG is about INR 55.

Next question is from the line of [ Surender B. ], individual investor.

[Foreign Language] sourcing of raw material will be from where?

All the raw material is scrap, polyester scrap.

Of all kinds.

Of all kinds. So it will be bottle scrap. It will be textile scrap. The whole project is based on sustainability. It will be able to consume scrap and make it into virgin quality material.

Will that amount of [indiscernible] available right now?

Yes, yes, yes. We've done a survey already, and there is already material available.

[Foreign Language] Specialty Polymers.

Yes. We are shifting the Specialty Polymer from Khatima. We are going to be shifting it right next to the joint venture because we are going to be tolling and doing job work of such a huge volume, 50,000 tonnes per year, it doesn't make sense to transport 50,000 tonnes from Gujarat to the North and bringing it all the way back when everything has to be exported. So it is cheaper for us to shift the entire operation from Khatima and locate it right next to the JV company.

Especially polymer operation.

Only Specialty Polymer operations.

[Foreign Language] Sir, is it viable?

Please, understand. Hyderabad has film business.

[Foreign Language] I'm seeing raw material [indiscernible].

[Foreign Language] Because we have capacity available and marginal cost [indiscernible] is it's viable. And major portion of the chips that we need at Hyderabad are purchased from Gujarat mills suppliers. [Foreign Language]

As there are no further questions, I will now hand the conference over to the management for closing comments.

Thank you very much for joining us for the investors' call for Q2 FY '25, and we look forward to seeing you for the next Q3 call in January. Thank you.

Thank you. Thank you.

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