Ganesh Benzoplast Limited (500153) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Ganesh Benzoplast Limited Q3 FY '24 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Priyadarshi Srivastava from Capital Square. Thank you, and over to you, sir.

Thank you. Good evening, everyone. On behalf of Capital Square, I welcome you all for the Q3 FY '24 Ganesh Benzoplast Earnings Call. Today, we have with us Mr. Rishi Pilani, CMD, Ganesh Benzoplast; and Mr. Amar Kabra, CFO. Over to you, sir, for your opening remarks.

Thank you. Good afternoon, everybody. This is Rishi Pilani, and thank you so much for joining us on the Q3 and the 9 months FY '24 conference call. We will initiate the call by taking you through the business highlights for the period under review, after which we will open the forum for question and answers. Now I hand over the call to Mr. Amar Kabra, our GM, Finance and Taxation, to share the 9 months numbers.

Yes. Good afternoon all. So I will start with the standalone numbers. Total revenue for the 9 months financial '24 stood at INR 1,664 million as compared to INR 1,409 million in the same period last year with an increase of 18% Y-to-Y. PAT, net profit after tax for 9 months of FY '24 is INR 444 million as compared to INR 387 million in the same period of last year, with an increase of 15% Y-to-Y. EPS for 9 months for financial year '24 stood at INR 6.64 as compared to INR 6.20 for 9 months of this year with an increase of 7%. Now on consolidated basis, the total revenue for 9 months of financial year '24 stood at INR 3,308 million as compared to INR 2,868 million in the same period of last year, with an increase of 15% Y-to-Y. Net profit after tax for 9 months of financial year '24 is INR 471 million as compared to INR 403 million in the same period of last year, with an increase of 17% Y-to-Y. EPS for 9 months of FY '24 stood at INR 7.04 as compared to INR 6.47 for previous year with an increase of 9%. So with that, I have given the highlights for the results. Now we would like to open the forum for question and answers.

[Operator Instructions] The first question is from the line of [ Meet Mehta ] from Haley Stock Traders.

Sir, I wanted to know, we did a fundraise right now of INR 62.5 crores. So can you explain us what is this fundraise for and where it is going to get utilized?

Yes. See, the fundraise is mainly to put the equity portion of the expansion that we are doing into cryogenics, as you are aware, which we have already announced. So the fundraise primary objective is for that.

So sir, if you can tell more upon to the expansion? So what is the total expansion and what is the time line if you can give us some economics about the project?

So see, roughly, the project cost is about INR 650 crores to INR 700 crores, out of which the equity contribution from GBL is going to be approximately INR 100 crores. And the project time line is, I've already given, we are expected to finish it in about 2 years' time starting March of '24. So it's expected to finish in March of '26, so first quarter of the financial year FY '27. That's when it's expected to complete.

So the entire thing will start or it is going to be in phases? How does the expansion work for this?

No, it starts at one go.

It starts at one-go. Okay. And what sort of revenue margin should we expect from this kind of project?

See, generally these kind of projects run in an EBITDA margin of 80% plus. And currently, we have a guaranteed revenue over the 15-year period of about INR 1,200 crores from one company approximately. And what we are expecting is that this is the minimum guarantee that we have received. And with other customers, we should at least be able to achieve 3 to 4x. But again, these are all projections. So they are not -- we don't have any signed contracts for the balance amounts.

Okay. So basically, these are cryogenic, what do you say, tanks that we are building, which will be used for liquid logistics.

Yes, correct.

Okay. And you also mentioned that you've been allocated 4.5 hectares land for this project for 25 years. And you somewhere mentioned that it's advantage to have that land parcel. So can you explain how does that work? Because is it nonavailability of land or permission or what is the idea behind that?

It's a combination of land, pipeline and the first-mover market. So as you can understand that there are other people who are having some spare land in JNPT, but the spare land is so less that as of now they cannot build any cryogenic tanks on them. And apart from that, you require cryogenic pipelines from the jetty to the terminals for which we are having the approval only. So a combination of these two things gives us a very, very high barrier to entry into this region -- into this, sorry, space of cryogenic in JNPT rather than anybody else.

Okay. Okay. All right. And sir, your Goa terminal is underutilized. Can you explain us how you plan to increase their utilization levels going forward?

See, we are doing different products there and we are expanding our portfolio in Goa. It was a dedicated fuel oil terminal. So we have converted those tanks back to white oil. And now we are doing edible oil, specialized chemicals like EPC. Most recently, we've even started POL products. So we've done motor spirit. We've done HSD. We are doing molasses exports. So we are trying to look at different revenues and we have been fairly successful in attracting new customers.

Okay. What would be the utilization level in Q3?

See, in Q3 we are expecting a chemical tank to be taken up. So I would say it will be upwards of 50% to 60%. That's what our expectation is in Goa.

Okay. And JNPT terminal is 100% utilization.

Yes.

Okay. And Cochin, what is the utilization level?

So Cochin is also upwards of 95%. We have right now won a tender for Cochin terminals from IOC, though the LOI and all has not been issued. So we don't have it in our hand, but we are the L1 bid. So it's -- so we have won that tender. So those tanks will be taken over by IOC for ATF and ethanol for the next 4 years.

Okay. So -- but there is scope of -- because it's already at 90%, 95% you are seeing. So revenue growth...

Yes. We will have to do what we always do is what we call as a replacement strategy. As the current contracts keep running out, we'll -- instead of renewing those, we'll replace them with IOC.

[Operator Instructions] The next question is from the line of Dhruv Mukesh Bajaj from Smart Sync Investment Advisory Service.

Sir, firstly, congratulations on securing amazing joint venture partners. My first question was that since we have earlier guided that we will do a CapEx of around INR 400 crores to INR 500 crores in the LPG terminal space. However, now you are guiding that the CapEx will be around INR 650 crores to INR 700 crores. So can you please explain the divergence? Have you entered into some new venture as well?

No, no. What we are doing is that based on what is going to be the projected demand, we are actually increasing the size of the tankages now because what -- so we want to build a terminal that's way ahead of all the other terminals that are currently existing. And the current ship sizing, which was in the range of 40,000 to 42,000 tonnes is now going up to 50,000 to 55,000 tonnes each year. So we want to be ready for that. So we are increasing the capacity of the terminal also by about 20% to 25%.

Got it, sir. So the terminal that you mean is LST terminal, right? Or LPG terminal?

LPG.

Okay. And sir, what is the revised revenue potential of the respective segments, as you were earlier guiding a INR 200 crore sales mark, assuming a conservative throughput of 3x per month? But now since we have good JV partners and we are increasing the capacity, so can we expect this to improve going forward? And so what will be our share?

See, like I said, these are all forward projections so I don't want to get into them. But see, logically, if you have a terminal that is able to handle the larger ship which gives the lowest shipping price per tonne to any customer, so you would expect that you would be able to pull more volumes and higher throughputs by doing this. And that's the logic behind increasing the terminal size. As you know, BW LPG, they are one of the largest LPG companies in the world today, having more than 250 ships that are carrying LPG all over the world. And they have stock positions in various refineries. So we go by their guidance.

Got it, sir. So it would be too farfetched to assume that we might be able to clock the 7x industry-level throughput that other players crack, right?

I would not like to comment on what we can do, but we would certainly hope to get the maximum throughput out of the terminal.

And sir, now -- okay. And then how is the competitive intensity in the terminal space? Like since Aegis has recently set up a big LST terminal in JNPT port. So that can have a negative impact on our realizations or utilization? Or how is the dynamics like?

See, I can't comment on how that will play out. But all I can say is that they are not setting up an LPG terminal in JNPT.

No, no, I meant LST terminal, liquid storage terminal. So they have recently announced that. So that's what I'm asking.

Yes. See, generally, our terminals being older and having more customer base already established, we have to wait and see how that impact happens. But today, I cannot comment on that. But I'm sure some things will need to be adjusted from our side to ensure that we remain competitive to our customers, and we give them the best services.

Got it, sir. And sir, if I can just squeeze in another question? Then post-COVID, our rentals are rising in double digits in JNPT. So is this likely to continue going forward? Or should we model a conservative 5% to 7% growth mark that you earlier talked about?

See, whatever we are doing, we are always striving to get the maximum revenue per tonne out of the tanks. So changing the product mix, changing the customer base, all these things we are continuously striving for. But all things being equal, like I've always guided, that in a current -- in a business like LST, 5% to 10% is a fair assumption that you should be able to achieve.

The next question is from the line of [ Yogesh Bathia ] from Sequent Investment.

Sir, there was a proposal for demerger of the chemical business. Is it still under process? What is the status of that?

Yes. See, that proposal is already -- is under process, number one. Number two, the thing is that matter is subjudiced due to a court case that we are having. So for me to give time lines is becoming difficult. But in the meanwhile what we have done, just so that you know that what we have done is that we have put the entire chemical business into a 100% owned subsidiary of GBL. Along with the creditors, the sales purchase, all the things are now 100% subsidiary, so that whenever this order gets out of the port, we can -- it will not take as much time to get the demerger executed because separate balance sheets already exist now.

The next question is from the line of Parth Kotak from Alpha Plus Capital.

Congrats to you and your team for a decent set of numbers. Sir, one -- sir, just a couple of questions. One, you talked about the project cost being INR 650 crores to INR 700 crores. How much debt are we planning to take in the project?

So we are targeting right now equity debt mix of about 30 to -- 30-70.

Okay. So equity of 30 and debt of 70.

Yes, yes. But all these are long-term debts, they are running over 15, 20 years. And the way we structured the transaction is that we have a minimum guarantee from our partners to service the debt and something more than that. So we are not worried about the debt hitting the balance sheets.

Fair, fair point. And sir, secondly, you mentioned about the capacity being bigger than earlier projected. If I'm not wrong, we had projected a capacity of 48,000 tonnes. We've revised this number and taken it upwards. Is that the right understanding?

Correct. So we are looking at somewhere between now 55,000 to 60,000 tonnes.

The next question is from the line of Gaurav Agrawal from Nine One Capital.

Congratulations on decent set of numbers. Sir, you are -- so sir, I wanted to check your plans like for -- we are currently undertaking this large CapEx. Do you have plans to get into some other things like hydrogen which comes under cryogenic, or you mean to say you can be in the storage of cryogenic products? What are the other products that you have in mind or other projects that you have in mind?

So we are constantly looking at projects. So obviously right now, we are exploring other cryogenic expansions like there is a possibility of the propylene, ammonia, all these. So we are looking at everything. But as soon as we have something concrete, we'll definitely inform our investors and stakeholders.

Okay. And sir, in terms of your capital commitment now that the project size has increased. So what will be the capital commitment from our side over the next 2 years in terms of cash flow?

So like I said, it's going to be about INR 100 crores.

Okay. And a similar kind of thing will come from BW Confidence and the remaining will be debt?

Yes.

The next question is from the line of Ram Tavva from ExcelIR.

So regarding this JNPT, that there is a new space that has been added up for 11-acre area, so what are the strategies that are in place to fully maximize the utilization of that entire space? And how much time it would take in the future for that?

So part of the land has already been utilized by the new chemical tank expansion, which was commissioned in July of this year -- last year. And the balance will be utilized for the LPG expansion. So after that, there won't be any spare land available.

Okay. So we are considering this demerger of this LST division, the infrastructure division. So what strategies and opportunities are in place related to the future business opportunities, ensuring its long-term success and scalability?

See, very simple that while we have this project coming in which, if all goes well, should have a very, very significant impact on your revenue and profit margins within 2 years to 2.5 years' time. Apart from that, we are looking at other organic and inorganic plays on how to increase capacities or utilizations. So like you said -- like I explained, like we have locked in a tender with IOC, though the LOI is not issued yet, but we are hopeful to get it soon since we are L1 for the next 4 years of ethanol and ATF tanks. So what these do is they lock in our revenues and profits, and we look to grow with that. Apart from this, we are looking at other ports in which we can expand, and that activity goes on completely independent of these two things. But we are looking at how to expand our growth in this -- in the LST field.

Okay. Sir, how strict is the competition when it comes to other ports to acquire the land parcels? How stiff is the competition, sir?

Well, competition is there but, I mean, there are opportunities for, like I said, either buying out existing players or to get new land and set up new terminals. So those opportunities have not gone. But yes, competition is always there and that's fine. I mean, all the ports that we are operating at today, whether it be JNPT, Goa, Cochin, there are other competing terminals. And we are proud to say that we have probably fairly well placed in spite of all the competition around us. Customer retention and in terms of revenue per tonne, I think we are doing fairly well.

Okay. Okay. And in terms of the government initiatives, they're building new ports as part of Gati Shakti and other initiatives. So how do you see the future for this, sir? I mean, like Adani and some of these new ports that have been getting built, do you get the opportunities over there as well?

See, like -- again, I mean, we are exploring everything. We already through our subsidiary, ILSL. We are already in, what you call, the multi-modal mode of operation by rail. We have already developed expertise of setting up liquid sidings with tanks along the railways. So we always look for opportunities where we can expand in those areas also. Unfortunately, I don't have anything very concrete right now to tell you on a call. But if your question is that are there opportunities? The answer is yes. Are we having the technical financial know-how to exploit them? Again, the answer is yes. And are we actively pursuing those? Again, the answer is yes.

Awesome. And how would this rental yields in the future, assume that we get a new land parcel, right? So how will be the rental yields will be at par with what we have been getting? Because these contracts, what you have with the current land parcels is maybe 10-year old, 15-year world, the prices what you would be paying would be different from now. So can we expect the same kind of rental yields, give or take?

See, whenever there is a renewal of a lease from a port, obviously, the rentals from the port will get revised upwards to reflect current market pricing. So if that's your question, then yes, they will get revised. But they are not -- the lease rental is not such a huge contributor to the overall cost structure of your system. But yes, it has a potential to have some impact.

Okay. And that will be passed to the customers as well because they are increasing 5% to 8% rental every year. So I think that's going to be passed.

Yes, it will be a combination. See, nothing will be only impacting GBL, right? So if in a port, if the lease rentals go up, it's something that sooner or later all the terminals will end up paying, maybe 1 year here or there. So the impact has to get transferred to the customers directly, indirectly, whichever way.

The next question is from the line of [ Rohit Singh ] from [ Invest Analysis ].

Just to understand the things in a better way, can you put some color on the outlook near to midterm, putting some color on the kind of growth we are looking from here on? And what are the underlying factors that will play out?

See, like right now from our current operations, like I said, we have this steady 5% to 10% growth. I mean, we are lucky we've been doing the right things and we have been achieving double digits high, close to 15% to 20% growth. But 5% to 10% is something that we expect. 20% is something that we strive for. So from -- for a near to midterm basis, what you can look at is that from the current numbers, that's what we should expect. Going forward, with the LPG project kicking in, the cryogenic projects kicking in, you would expect that you should see a significant jump in these numbers in multiples. And that is what we are trying to achieve, and we'll probably come to know more. But that's the midterm and future outlook for now, if you can see.

Sir, when you say midterm, so by when do you expect this LPG and cryogenic expansion plan to ramp up?

About 2 to 2.5 years.

And till then, we are expecting a growth of 5% to 10%, right?

Yes.

Okay. And sir, secondly, on your margin side. So if I look at your numbers in FY '23, we did 40% OPM. Before that, we were in the range of 25% to 30% OPM. So what is the reason for the substantial growth in OPM and what is the sustainable margin going ahead?

See, you can see the numbers, 9-month number. So this is a combination of your rental income as well as your EPC business deals. So on rental income, you are getting a fixed EBITDA of around 50% to 55%. And overall EBITDA, you are getting 50%. So with a growth of 8% to 10%, I think that will continue.

So these kind of margins are sustainable is what you are saying, right?

Yes, yes.

40% OPM is sustainable. Okay. And sir, lastly, on the CapEx side. So can you put a number to the CapEx, what we are doing towards the LPG or cryogenic side?

Yes, as explained by Rishi, it's between INR 650 crores to INR 700 crores, that's the CapEx for LPG.

And what will be the mode of finance?

It's a combination of debt and equity. Debt will be around 70% and equity is around 30% of the entire cost.

The next question is from the line of Sarvesh Gupta from Maximal Capital.

Congratulations on the good set of numbers. Regarding this JV, the capital infusion of equity will be done by us, but the debt about 70% odd of the INR 600 crores will be done from our end or from the JVs end.

It will be done from the JV end.

Okay. So it will be combined debt?

Yes.

Okay. And what is the minimum throughput which is guaranteed from the Confidence BW JV?

It's over a period of 15 years, it's about INR 1,100 crores or INR 1,200 crores.

Okay. And per throughput, what is the revenue usually?

See, general rentals in the market range between INR 1,200 to INR 1,400 per tonne and throughput is about 50,000 to 55,000 tonnes.

Okay. Okay. Got it. And about the 18,000 KL capacities, which was going to be live from Q4, what's the status on that?

No, that capacity was live in Q3 itself.

Okay. It was live in this quarter as well. Then why there is no sequential growth as such?

See, as on date, the capacity started in somewhere in October. So obviously, it will take some time, one month is the gap. So capacity gives the total revenue of around INR 10 crores in a year. So for 2 months, it's a INR 2 crores. So I think that is already incorporated in that result.

Okay. So going forward, we can assume that full 3 months will reap the benefit of this additional capacity?

Yes.

The next question is from the line of [ Darshil Jhaveri ] from Crown Capital.

Congratulations on a great set of numbers. Sir, a lot of my questions have been answered. Just wanted to -- sorry, sir for just making you repeat the answer. Minimum throughput, what did we say, sir, I could not catch hold of it, sorry, I came late so?

So over a period of 15 years is between INR 1,100 crores to INR 1,200 crores.

And sir, that I think is the -- our part of it or is a combined JV?

No, it is -- throughput is something that the our partners are guaranteeing to us.

Okay. Sir, I just wanted to know in terms of our expansions that we are doing of INR 650 crores to INR 700 crores, what kind of an assets turn would we be able to convert then?

Sorry, Darshil, your voice is not very clear. I'm not able to...

Just a second, sir. I hope, sir, my voice is better right now?

Now it's better. Now it's better.

Yes, sorry for that. So I just wanted to just get a sense of if you're investing around INR 700 crores in our expansion, so what kind of an asset turn do we expect? Like we could do how much -- because of this equity, how much potential revenue from it?

See, like I have already explained in our earlier calls, we would ideally like to be at a space upwards of about INR 200 crores of revenue a year. That's what would be our minimum target. But like I said, these are all future projections. So we will only come to know once the tank farm is built and commissioned. But that is based on a market analysis by us, that is something that should be achievable.

Okay, okay. So that's -- and sir, I just wanted to know, sir, as you have also done our EPC, so any kind of traction that we see out there, right, for any other tenders or something that we are applying for?

See, Darshil, I have always maintained that EPC is not our core business. We use EPC only as a strategic arm to expand our core business that is LST. So helping out customers who are requiring expansion in their plants, which in turn leads to a better business for us or expanding capabilities of some of our customers so that they can store a different type of product at our end. So these are the things we focus on, or if we want to develop relations with a new customer or something. So that is where our EPC division is used for. So we are not going out in the market and trying to bid and get projects. Our core focus is our EPC -- sorry, our LST division and the functioning of that. So we like to keep ourself on the core focused.

Okay, okay. Yes. And just one final question, sir, with the new expansion, if it would be, we will be able to maintain higher, so will that somewhere because it might be at the lower cost that we will be offering to our client, will our margins be similar to what we are doing right now, around 50%? Or would that be just some -- what would be the color on that?

No. So you are asking about LPG, right?

Yes.

Yes. So generally LPG terminals operate at about anywhere close to 80% margins.

80% margins Okay. Okay. Sorry, just to clarify, these margins, you're talking about EBITDA, right?

Yes.

Yes, that's EBITDA.

The next question is from the line of [ Gagandeep ] from Nvest Analytics Advisors LLP.

Sir, what kind of margins will be there after the expansion in LPG and cryogenic expansion?

See, like I just now answered, we are expecting that generally these terminals run at about 80% EBITDA margins.

LPG and cryogenic expansion, which you are talking about after 2.5 years?

Yes.

Understood, sir. And can you elaborate on the role that we are going to play as our economy shifting towards the hydrogen? So can you put some color on that, spend a few minutes on that?

Yes. So see, basically, ammonia is one of the basic ways of carrying hydrogen. So we are -- we have -- we are looking at what we can do, like I said before, in the liquid gases field. So yes, ammonia is one of the tankages that we are looking at, which is ultimately transforming into also hydrogen. But that's -- we don't have a concrete contract or anything with us yet, but we are actively pursuing that opportunity.

The next question is from the line of [ Naitik Mohata ] from Sequent Investment.

Most of my questions have been answered. Just a couple of clarifications here. So there are 3 different terminals that we have. So is it fair to assume that the revenue generation would also be linked to the different capacity as well as utilization levels? Or is that the product mix in one of the terminals or the other makes a huge difference with respect to that?

You're right. I mean, the same type of tank with the similar type of capacity may have different yields depending on location. So like as of now what we are observing is that JNPT gives us the highest yield per tonne of installed capacity.

Right, sir. Sir, would it be possible to give us sort of a tilt or a ballpark figure like how much of the total liquid storage revenue comes out of JNPT?

Yes, it would be close to 90%.

Okay, okay. So sir, just trying to understand that apart from the new terminal that we are planning that will come out 2 years down the line, until that we have, the levels for our growth would be prudent product mix change from the management among these terminals or any inorganic opportunity that comes up like the product change that we are probably planning for Cochin for the IOC contract?

Yes. So that's one of the ways we are doing it. But yes, we are looking at inorganic opportunities also. But as of now, we don't have anything concrete to commit on.

Okay. Sir, could you give any ballpark size what kind of capacity we are planning for any inorganic opportunity?

No, see, it all depends on what is available in the market. So obviously, we are open to any type of capacity. But as of now, like I said, we have some discussions going on but there is no concrete thing. So to give a number is too premature at this stage.

Okay. Also sir, for a new project, we would be putting up that equity and we have raised funds for that. So now from here on, do we need no funds or do we plan to raise more funds through a pref or anything like that?

See, all this depends on how other opportunities pan out along with this. If you're asking for this project, per se, do I need more equity? No.

The next question is from the line of Naysar Parikh from Native Capital.

The first one was, we know the impact and that we've been allocated the additional land at JNPT, are we using the -- is the entire land being used for this LPG project? Or what percentage of that we'll be using? And...

Yes. So already explained by Rishi, so I'm repeating again. So out of 11 hectares, 4.5 hectares is already used for our chemical tanks. And balance land, we are using for our upcoming LPG. So that is the combination.

So after that LPG project will not have any spare land left, right?

Yes. As on date, there is no further land in JNPT.

Okay. And in JNPT, what would be your market share? If you just look at the LST terminals that you have today, what would be your market share as of date in JNPT?

Are you asking in terms of the total liquid third-party volume being moved in JNPT?

Yes.

So that would be close to about 60%.

Okay. Got it. And since over 90% of your revenues is from JNPT, how do we look at future growth in terms of -- you spoke about it, but just adding new parts or getting newer ports or something? Is there scope? Is there a potential? At what stage are we on discussions on that? Can you throw some light on that?

See, I can just tell you that, yes, we are looking at new ports, new opportunities. The discussions range at various stages from just the initial site visit to actual layouts being discussed as to what can be built in the particular land that are available. So it's that range of discussions that's happening.

Okay. Got it. And just the last question on the Goa terminal, right? I think you did mention, but by when do you think would see that also starting to actually have better utilization? How should we think about that because that's obviously underutilized?

See, first of all, Goa capacity is less than 7% to 8% of our overall installed capacity, number one. Number two, at Goa, you have to understand that Goa is not, per se, a very strong industrial region. It's a tourist region. So we are developing other products, like I said last year for the first time, we developed molasses there. This year, for the first time, we did POL, diesel and petrol handling there. So we are developing new products, which can cater to the region. But for me to give a firm time lines to when we are expecting these is very difficult.

Got it. And just -- sorry, one last. When we look at the margins, we are obviously -- in the LST side where we 56, 57, Aegis, for example, seems upwards of 65, 68 on the LST side. What do you think is driving that? Is it only product or location or what? And is there scope for us to improve margins?

See, we have not seen the EBITDA of Aegis. But I think we have maintained the constant EBITDA of around 55%, at least from rental business. On overall basis, you will see the reduction in the EBITDA. But for rental, 55% to 57% is our margin.

[Operator Instructions] Next follow-up question is from the line of Dhruv Mukesh Bajaj from Smart Sync Investment Advisor service.

Sir, can you please help us understand...

Sir, you're not audible. Can you speak louder?

Am I audible now?

Yes.

Yes. Sir, I was just asking that if you can help us understand the new JV development with BW Confidence where we are planning to develop LPG import infrastructure since you already have one JV for LPG terminal in JNPT? So is this other JV a new venture or segment that we are planning to explore it in future?

I'm not sure. So the JV with BW LPG and Confidence is going to develop the import infrastructure at the port and the storage together because storage....

Sorry. Sir, in the investor presentation, we have mentioned 2 subsidiaries. One is GBC LPG Private Limited and one is BW Confidence Enterprise Limited. So that's why I was confused, like why these...

No. So there is no BW -- so BW and Confidence together have formed a company which will be the JV partner with Ganesh Benzoplast.

Got it, sir. That helps, sir. And then when will our existing lease on the JNPT, Cochin and Goa port end since we got this land pretty cheaply in the past?

Yes. So there are various periods that are coming up in the next 5 to 10 years when these will expire.

So once we renew the lease, so I know this will be very forward-looking in nature, but do we expect that even if you buy the land at current levels we will still be able to generate the similar types of returns on capital that we used to generate? That is something that will naturally go down a little?

See, it's all the way to look at that your rental yields are also going up every year and the percentage of your cost that comes out as lease is a relatively small percentage of your overall costs. So when you combine these 2, that your top line is growing by, let's say, by 10%, and -- but your cost -- a small portion of your cost even doubles, so that's a 55% EBITDA margin.

And then we can maintain that. It's not...

Got it, sir. That is very helpful. And if I can just squeeze in one last question. I wanted to understand that since you have any strong CapEx opportunities in the existing ventures and we are actually diluting our equity base by raising funds from external shareholders to do this CapEx, so can you please guide us as to why are we venturing into something like EV leasing, as you mentioned in your annual report or it's in all, where our stake is already your penalty 26% and where we don't have a major competency as such.

No. So I don't agree about the competency part. We have basically established ourselves as a chemical manufacturer in 1986. And manufacturing ethanol is a very, very relatively simple distillation process, a fermentation, distillation process. So technologically, there is no lack of competency in that. Plus, you have to understand that as a company, we all need to and all companies need to start focusing on green initiatives, sustainable growth. And that -- from that perspective, the company needs to also look at what are the future opportunities in greenfield and how we can link them to us. So like for example, if we are the largest exporters, one of the largest exports of molasses happens from our terminals. So we know the molasses sourcing and molasses buyers very well. So -- and the raw material for ethanol in the plant is molasses. So having leveraged that partnership to go into a green energy segment and then leveraging that partnership to start molasses in Goa. So we are -- so while you may be looking at ethanol as one segment, we look at it as an overall complementary part of GBL LST division.

Got it. That is very helpful. And sir, sorry, I just meant that since we're making very good returns on equity in the existing division, so why are we diversifying that? But I understand your point.

The next question is from the line of Piyush Kumar from Mint Investments Limited.

Congratulations for a good set of numbers. My question is, what are the growth -- figures for growth in revenue and bottom line for the next 2 years till the CapEx is operational and the capacity utilization JNPT and Cochin are at higher level?

Yes. So currently, we are making a rental income of around INR 150 crores, INR 155 crores for a year. And as explained, we are seeing escalation of around 8% to 10% in rental kind of business. JNPT, we're operating at 100%, but still there is a chance of more revenue from JNPT in terms of product change and modulation of the tanks, height increase, et cetera. So there is a further scope of, you can say, around 3%,4%. Goa, as explained, we are already running at 40%, 50%. So there is a chance that next year or maybe in the next 6 months, we will achieve at least 70%, 75% in Goa. So that will contribute some more amount. Cochin, already we are running at 95%. So you can take assumption of around 12% to 13% cumulative as a growth from the existing business, and the major jump you'll see from the LPG only after 2 years.

Okay. Got it, sir. And what is the update on the merger of chemical and LST division?

See, it's already under process but it's not yet finalized due to the court case going on. And once it will be resolved, then we are ready with the base. We already created the base for the demerger. Just we are waiting for the order and we'll get the demerger order from the court and field test it.

So what time you're expecting to get the order, any estimation?

See, in India, fighting of the court cases and all these things, there is no fixed time line for all such things. But we are trying a little bit to get it resolved as soon as possible.

The next question is from the line of [ Pratik Bhandari ] from Art Ventures.

So I had one query regarding the CapEx that you stated regarding INR 650-odd crores. Is it the combined CapEx for the LPG terminal and the cryogenic tanks?

It's -- LPG is only cryogenic project. So that is for LPG. You call either LPG or cryogenic, that is one and the same.

Okay. Okay. And you stated that you would be doing this through 70% debt and 30% equity.

Yes, that is the approx.

So that 30% of equity, that comes around about INR 180 crores, INR 200-odd crores. Is it coming from the fundraise that you did recently?

Yes, part amount has come from the fundraise and part, obviously, we will fund from our internal accruals and all.

The next question is from the line of [ Yogesh Bhatia ] from Sequent Investments.

Sir, all my questions are answered. I just want to know what is the rental revenue that we are making from Cochin terminal right now? And after the new contract, how much do we expect to -- expect that to go up?

See, I cannot give the exact number in terms of rupees. But yes, Cochin -- overall contribution of Cochin around 7% of the total rental. 90% is of JNPT and 3% is of Goa. So that is the approx combination. And with the new contract, obviously, it will give something more out of the existing.

The next question is from the line of [ Vikas Mistry ] from [ Moonford Ventures ].

I have a couple of questions. When you say that you have a minimum throughput of maybe INR 1,100 crores for 15 years and a revenue of INR 200 crores on this JNPT station, so what is the minimum level that is granted as revenue comes out to be lesser than INR 80 crores, around INR 80 crores? Is that right understanding?

Yes, you're right. Like I said, that is just a minimum guarantee. That's not the full potential of the terminal.

My -- I was trying to think only a minimum part because for maybe a couple of years, you might not ramp up at full capacity. And what is your outlook for ramping up to the full capacity and how many in years can we say?

Well, like I said, see, our partners are the biggest handlers of LPG in the world as on date. And their outlook basically has made us increase the capacity of the terminal by 25%. So you can take a judgment from that, that when our partners who are investing along with us are expecting that bigger ships will call in bigger numbers at the terminal. I mean, that itself is a good enough indication of what is expected to happen.

Okay. Okay. One of my other apprehensions that I think this consortium of 3 companies and 2 companies BW and Confidence are trying to infuse only INR 80 crores. So I didn't understand that they are infusing INR 80 crores and you are infusing INR 650 crores. How it works out?

You misunderstood that. There is -- they are not infusing INR 80 crores. They are -- the equity participation will be in the level of equity and the debt will be raised externally.

Okay. Okay. I understood that. And my final question is that from 70% debt, how we are planning to get funds from which sources, some green sources outside India, within India? What is our strategy for raising 70% on debt?

Sorry, can you please repeat the question?

I want to understand, sir, we are raising substantiate amount of debt for this LPG terminal. For that, we need a lower cost of funds. So for that, what is your strategy to tap in overseas market or to get it from within India itself?

No. See, the way the debt has been structured is that the minimum guarantee from our partners will cover any debt repayments. So the debt structure has been made in such a manner that along with the interest also, you will not have any trouble in servicing the debt.

Thank you very much. Due to interest of time, that will be the last question. Participants who did not get a chance to get -- who did not get opportunity can get in touch with management later. I would now like to hand the conference over to management for closing comments.

Thank you. I would like to thank everybody for listening to our third quarter 9-month update investor call and request all to be in touch, especially if anybody didn't get a chance to answer -- ask any questions or have any follow-up questions. We remain available to answer all and give you -- and make it happen. So thank you so much.

Thank you. Thank you, all.

On behalf of Ganesh Benzoplast Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.