I G Petrochemicals Limited ($500199)

Ladies and gentlemen good day and welcome to the IG Petrochemicals Limited Q4 and FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Pramod Bhandari, CFO at IG Petro Chemicals Limited. Thank you, and over to you, sir.

Good afternoon, everyone. Thank you for joining us today on the behalf of I G Petrochemicals Chemical Limited, I would like to extend a warm welcome to all the participants. They are also joined by SG, our Investor Relations advisers. We trust that everyone has had an opportunity to review our financial results and investor presentation. Both are uploaded our stock exchange and our company website. During today's discussion, we will briefly begin with a quick overview of recent industry development and provide an update on the IGPL progress. This will be followed by the company operational performance and financial highlights for the quarter. During the FY '26, it has been a particularly challenging year for most global and the Indian chemical industry. The sector has to navigate the rising crude prices and volatility in the market condition, higher goal trade and logistic costs, subdued demand from the Western market and ongoing geopolitical tension, especially in the Middle East as a result. The chemical companies that are dependent on the imported raw material and those which have significant exposure to the export into the Western market has been impacted. IGPL is not exception was also impacted in the last 6 to 9 months, because of these challenges. Looking at the current business environment, we continue to remain prospective given the evolving macroeconomic situation, particularly the uncertainty surrounding the West Asian crisis and its potential impact on Indian economy. While ongoing Middle East conflict continue to impact Indian economy in short term, particularly through the energy prices, supply chain and logistics. We expect this disruption to gradually normalize over short and medium term, supporting a more stable industry outflow. This has also resulted into volatility in the key raw material prices, which is [indiscernible] chemical products across the value chain. While there has been some increasing development in addition to the proposed India-U.K. free trade agreement is expected to create new opportunities for the Indian chemical [indiscernible] going forward. Although some downstream segments experienced a complete dip in the demand earlier this year. Current trade show a stable recovery across all key segments. Overall impact on the IGPL was very limited and thanks to our strong localized customer base, wherein we are selling around 80% to 85%. Having majority of our plants in the radius of 200, 300 kilometers of our plants, ensure that logistics efficiency as well as consistent demand stability. Further, while IGPL doesn't directly cater to the Western export market, however, certain downstream sector impacted due to the ongoing crisis [indiscernible] selective exposure to the global demand. For IGPL, I think IGPL continue to remain strong position backed by strong long-standing focus on the operational efficiency cost [indiscernible] we are among as one of the lowest cost today of phthalic anhydride in India. We hold the position of the largest producer in domestic market and second largest globally. Over the year, through continuous improvement and focus execution, IGPL has built a strong manufacturing capability that enable us to deliver a reliable and consistent supply of high-quality products. Phthalic Anhydride continues to play a critical role in Indian industrial value chain. We serve as a key raw material intermediate for most of the plasticizes use in PVC alkyd resin. Including the industrial coatings, UPR and other construction automotive applications. Along with phthalic, we also diversified [indiscernible] including maleic anhydride, benzoic acid, DP [indiscernible] with wide range of industrial industry. We believe that this project gradually see an increased contribution supported by steady growth in demand across respective end user segment. Particularly Q4 performance, our performance during the quarter was primarily impacted because of high raw material prices, along with the steady demand. The price pressure largely impacted overall revenue and margins during the period. For the full year, the demand of phthalic anhydride remained relatively stable. However, the realization across PAN and men continue to remain under pressure due to the prevailing industry environment. Overall, yearly performance was impacted due to the high cost inventory. One Mark-to-Market on account of the Forex. At the same time, during the year, we undertook significant relative expenses, including repayment of the second portion of the roaming and convention most of the given to in view of the political sit. And we take a substantial part of our pending debt. These steps have meaningfully reduced our product [indiscernible] extend and complete sinters. On CapEx front, during the year, we have achieved the mechanical completion of our adoption subject in March. Right now, we are doing the preoperative and operating operations in this and expect it to start that commercial production of the facilities soon. The specific we'll commence with an installed capacity of 75,000 tonnes. The plant in [indiscernible] of plasticizer, including DOP, DINP and DEP. In federal, we also successfully completed the porcelain of our DOP plant during March, which has increased the capacity to around 12,000 tonnes. There will be also -- and you take the medium-term chemist and bring a more sustainable secular economy. As a part of that, we are setting up the big plant, which is under construction right now and expect it to complete by the end of June and July. We produce current center implementation and we bill on track for them. As a part of long-term stability, we continue to focus on improving operational to facility plant through one keep an upgrade and success across facilities, driven where we also increased the integration of solar and other reasonable sources across our operations according to carbon booking reductions on long-term cost optimization. In addition, we also [indiscernible] ship growth mature gains aimed at improving the efficiency and we do emission and supporting long-term optimization. And the global environment continues to remain as thin due to ongoing geopolitical issues, we believe the interest are both silos have been demand, demand of course with the segment has started slowing down. However, we have seen some gradual improvement out in the last one quarter. Pricing of measure product offer to we have bottom out a big spring. Overall, despite easement will make optimistic about the outlook for coming quarters, supported by our strong operational capability and integrated product portfolio, disciplined capital allocation. being well positioned to cater other opportunity. For the quarterly ended, the revenue was INR 530 crores, reflecting a 9% compared to Q2 supported by improved realization and the higher volume. Revenue contribution nonpaid business remains for the quarter is INR 42 crores. Gross profit for the around INR 149 crores, up 10% year-to-year. EBITDA for the quarter was 55%, registering a 38% growth year-to-year. EBITDA margin improved to 14.1% compared to 1% for the last quarter in FY '25. Profit after tax is at INR 37 crores compared to INR 21 crores in Q4 '25, indicating is sharp recovery profitability. For the entire year, the revenue stood at INR 94 crores non-fan business for the entire year was INR 136 crores gross profit was INR 251 crores and EBITDA today on a EBITDA margin of 6.7%. Profit after tax in the losses for the last 9 months was stood at INR 33 crores. timely because of pricing pressure, onetime mark-to-market and the inventory loss which we need to incurred in last 9 months. Going forward, we expect profitability to improve the global in environment expected to be on the line. More than the recommended even INR 5 per share, which is around 50% for the year ended FY '26, which will be subject to the approval of shareholders in ensuing Annual General Meeting. With this, I conclude my presentation and open the floor for questions and answer.

[Operator Instructions] Our first question is from the line of Harshit Khadka with RoboCapital.

So sir, congratulations that we did 14% EBITDA margins in Q4 FY '26. So just wanted to understand what kind of margin profile can we see going forward in '27 and '28? Do we have any outlook on that?

So typically, today, we don't want to give any projections for market because the market is volatile, keeping in the geopolitical issues in the market and there's a fluctuation in the raw material prices as well as changing byproduct prices. To avoid giving any product within margins, I won't give -- we'll provide whatever is the market margin. We will be having around $100 to $120 over and above the market margin. That Is because of the operational efficiency as well as the realization from byproduct.

Understood, sir. And sir, where can we track the spread between OX and PAN? Like is there a website?

It's public, like the ICIS website where we conclude the VP margin for the phthalic, maleic box.

And sir, one of our peers is doing a big CapEx in PAN, right, around the area only. So will it have any impact on pricing as a lot of supply will come in? So how do you see that situation?

I think it's already started in last 1 year. So basically, the market correct itself with demand supply equilibration. Right now, the import in India is reduced around 30,000 to 40,000 tonnes per year compared to 120,000 tonnes. So to that extent, we also export around 10% to 15%. Market finds its way and finally equilibrium because it's growing at 5% to 6% every year. In 1 or 2 years, it is expected to be normalized. In India today, we are slightly oversupply because of started similar in last 1 year. But I think in next 1 or 2 years because of the ongoing demand and of our plasticizer project, which will consume annualized basis, 30,000 to 35,000 tonnes of phthalic. It will be creating the equilibrium of matching with the demand and supply.

Okay. Sir, right now...

Harshit, sorry to interrupt. Just to request you to please mute your line when the management is addressing your question due to background sounds.

Okay, sir. Sorry. Sir, my last question is regarding -- just correct me if I'm wrong, our total PAN capacity is more than 275,000, right?

It's exactly 275,000 tonnes.

Okay, sir. Understood. Sir, if someone were to put that kind of capacity right now, what would be the required CapEx he would need?

Roughly INR 3,000 crores.

Our next question comes from the line of Rohit Sinha with Sunidhi Securities.

Congratulations for good set of numbers. A couple of questions from my side. One is obviously, what sort of volume was there for PAN in this quarter and for full year FY '26?

So generally, we don't discuss about the volume on a quarter-to-quarter or year-to-year basis.

Sorry. Any percentage increase?

The volume was typically same for the year, which was in FY '25. FY '26 are more or less same, 1% or 2% here and there. And for the quarter, it was more than 50,000.

Secondly, in terms of price realization as we have seen significant increase in crude prices for PAN and OX also, how much do we consider that the impact has been there in our Q4 number? And how much would be coming in Q1 FY '27 number, if you can highlight on that?

So can you repeat your question? What you want? You wanted to know what is the impact of geopolitical situation in Q4 and Q1?

So price increase, how much price increase benefit we have seen in Q4? And if at all, there would be any price increase benefit in Q1 also?

It's not actually price increase. It's basically the raw material prices have gone up quite significantly because of geopolitical issue, which was hovering at around INR 70, INR 80 has gone up to INR 130, INR 140. So in line with that, the final product price is also required to be increased so as to maintain the margin. So it has started somewhere in March, and it continues. Right now, also the pricing is also at elevated level, so as the crude, naphtha and mixed xylene. So overall, all petroleum product prices has gone up by 30%, 40%. In line with that, the OX and phthalic prices at international level and domestic level has also gone up. So long as price remain elevated, we continue to have the similar type of margin. Plus there are some operating efficiency you are getting some extra product during your operation. So when the prices are lower, you are getting the lower realization. When prices are at elevated level, you are getting the elevated realization for that portion of product.

Got it. And sir, if you could help us with the PAN-OX spread in Q3 and Q4?

In market, it's between -- I'm not talking about the Jan-Feb particularly. But if you take the average, it's around $150 for Jan, Feb, March. And right now, it is hovering between $150 to $200 in market.

Got it. And sir, last question on the new plasticizer plant as our overall PAN capacity was, you can say, partly under utilized because of the delays in commissioning of plasticizer plant. Now we have completed and I think commissioning this quarter. So overall, what sort of utilization level we should be touching up in plasticizer? Or what kind of utilization would be there for the overall units of our PAN capacity?

So for plasticizer, we completed our mechanical completion in part. Right now, pre-operating activities are going on at plasticizer. We expect to start the production pretty soon once we complete the pre-operating activities. For a year, we believe it's not going to be a very elevated level. We expect between 24,000 to 25,000 tonnes on an annualized basis because now it's only 9 months expected for our plasticizer business for this year. And for phthalic business, apart from what we need to consume internally for DEP and plasticizer, we expect the similar type of volume. So if we consume 15,000 to 16,000 tonnes for our plasticizer business, including DEP, then the 2 lakh tonne plus/minus 2%, 3% for the domestic and the export sales. So volume will remain the same, slightly higher, but that higher will be utilized for the purpose of feedstock for the downstream product.

Our next question is from the line of Riya Mehta with Aequitas Investment.

My first question is in terms of FY '27, how many of our plants out of the 5 will go into maintenance shutdown or catalyst change and for how much duration?

So generally, we have 5 plants. So in a year, you can assume that 2 plants will remain shut. For maintenance shutdown, maintenance shutdown, it is a maintenance shutdown, including changing the catalyst. That is the procedure. Every 3 years, we need to change the catalyst. So 2 is for sure. It may be 3 depend upon the government requirement for volume inspection or some statutory requirement. But minimum 2 will be there for at least 25 to 30 days.

Got it.

So when I give you indication of the volume, it includes the shutdown.

Okay. So 2 lakh is after considering that 2 plants will be shut down for a month or so?.

Yes.

Right's. And after the plasticizer commissioning and you said 15,000 to 16,000 tonnes being diverted to plasticizer division, that will be over and above the 2 lakh volumes which you said?

It's over and above 2 lakh, but that is for plasticizer, including DEP.

Right, right, right. And how are you seeing the availability of OX like we used to take from Reliance is what I remember. Are we taking from imports, et cetera?

Yes, yes. So basically, we are buying right now 50-50 typically. And there is no problem in terms of import because most of the raw material in import is coming from Singapore, Taiwan, Korea, OX. So the state of homegrown is not a challenge because it is not passing through that. However, the challenge is the pricing because the crude oil prices have gone up, all the supporting chemicals, which is coming derivatives of the crude prices has gone up. So as far as availability is concerned, OX availability is not a challenge. It's available in the global market.

Okay. And in terms of demand because I think a lot of chemicals which go into the paint industry, plain and plasticizer industry, we have seen a lot of cost increase and the end user industry has taken almost 2 to 3 price hikes. So how do you anticipate the demand going forward considering lower capacity in the market?

I think you are right because the prices of all chemical and petrochemical products are up by 30% to 40% -- so it is a big challenge. But right now, we see a consistency in the demand. However, some of the downstream industry, which not only use phthalic, they use styrene, they use 2E and others. That price has also gone up, including urea. So overall, the prices of all raw materials for all chemicals has gone up. That resulted into 40%, 50% hike in the final product of various downstream chemicals. So at a certain point, I'm not saying today, but I think 1 or 2 months, a lot of guys have the inventory, they are able to sell the product at a moderate price. But ultimately, the final price has to be reflected in the product based on the raw material. So right now, demand is steady. But I believe if prices remain at elevated level, there will be some correction in the demand, maybe 5%, 7%, 10%, I don't know because up to what extent you can be at higher prices? So the question is right now, I think till March, there was no issue. Even April, May seems to be okay. But if it remains for next 3, 6 months, you can see the moderation because in downstream, not all downstream industries are good to pass on the raw material prices to the final product. Ultimately, it all goes to the consumer. If consumer has the capability to be at that, they are fine. Like in case of paint, they are able to pass on the price, they frequently change the price for final product. But other industries, right now, there is no impact as seen as to March, but you may see if it remains for next 3 to 6 months.

Okay. In terms of inventory, how much inventory do we carry? And how much part of our current higher margins would be attributable to inventory gains?

So we generally carry an inventory of around 10 to 15 days. But since the prices are very elevated level, so we wish to operate our plant 3 to 4 plants and wanted to offload all our inventory or wanted to operate on a minimum inventory because if the matter settle, then there are chances the price will correct by 30% to 40% or maybe 10%, 20% because I don't think now crude going back to $60 is near-term possibility in the next 6 to 9 months. But we wanted to operate at a minimum level so that whatever we are buying, we are able to process and sell it. So that in case there is any correction in price, we have the minimum impact. And what was the second question?

No. I just wanted to understand how much of inventory gains would we have got this quarter because...

I think I will not pinpoint it whatever the losses we have on account of inventory in 9 months that are fully covered.

Got it. Got it. And my last question is in terms of maleic. Have we seen maleic prices gone up because of the entire Middle East scenario and it is now higher than phthalic?

No. It has gone up in line with the raw material prices. However, it has corrected also. So it is not as elevated as phthalic. However, the price from a normal -- typically, if you look at the maleic for last 1 year, $800, $900, it has reached around $650 to $700. It has gone down to $1,200, $1,300 again come back to $1,000, $1,100 because there is an ample supply available in the market from China. And still, it remains below the phthalic prices.

Okay. And just last question in terms of spreads. You said that 150 was Jan, Feb, March. Could you help me with what would be the spread in terms of March, April and May?

I don't have it ready but it is hovering around 150 to 200.

150 to 200. And in terms of our cost prices like coal and energy price, et cetera, would also increase. So for us, can you quantify how much would be the cost increase out of all these?

So the energy which we are using 85% to 90% is the waste heat energy which we are using. So around 10% energy we use outside, which includes the government electricity, which includes the fuel oil and which includes the diesel. Diesel is very small than LSFO. So for that portion of 10%, the prices are up by 30% to 40% because LSFO fuel oil is a public price. Diesel is a public price. So from that low of Jan, Feb, the prices are up by 20%, 30%. But that is the part of the 10% of our usage because 90% is the wasted energy out of that 10% portion, some portion of the fuel prices are up by 20% to 30%, which is LSFO and diesel.

Our next question comes from the line of [ Trushant Jani ] with Money Bee.

Sir, Manan here. You mentioned that the imports have reduced. You are talking in the current market right now? They have reduced than what they were due to the supply disruption? Or you're talking about KLJ plant coming up?

No, no, no. I'm talking about Jan, Feb, March. It is slightly reduced in Jan and Feb. We don't have a data from March because government stopped publishing all import-export data effective March onwards. So no chemical price import-export data is available from 31st March or maybe 1st March onwards. We have a data for Jan, Feb to typically slightly go down compared to the last quarter.

Okay. Understood. And on the spreads part, after a long time, the spreads have finally improved to $150, $200. Now you are saying that if the price remains so elevated, then there is a possibility of demand contracting by maybe 8% to 10%. Then in that sort of a scenario, do you think these spreads will sustain? Or there could be pressure in the spreads?

If you ask me, the spread at $200 is actually a reflection of the higher prices. Suppose you need to make 10%. When the prices are $1,000, you need to make $100, 8% to 10%. When prices is $1,500, you need $150 to make 10%. So in terms of percentage margin remains the same. In absolute terms, it has gone up. But it has gone up in line with the raw material. In percentage, it remains 10% to 12%.

I understand. What I'm trying to understand is that if there is a contraction in the demand because there has been large capacity which are added by the competitor, by us as well.

I don't think demand is impacted because of the existing capacity because that capacity is in place for last 1 year.

No. I would think that is consumer demand but because of the global scenario...

However, elevated prices may have some impact if it remains elevated for the next 1 year. Exactly, I don't know how much it will be because some of the industries are able to pass on the increased raw material prices to consumer. Some of the industries are not able to pass on. So in that case, they will be operating at not 80%, maybe 60%, 40%, 50%. That all depends upon the type of industry you are catering to. We supply to almost, I think, more than 20 industries, paint, plastic segment, PPC, agrochemical, specialty chemical. Everybody is using silicon in a different way. So in some of the cases, we have seen that there is a moderation in the capacity utilization. Right now, the situation in the chemical segment is they are producing and buying the raw material only to the extent they need to sell. That's on type inventory.

Yes. Also, I was reading that due to lower realizations in OX, the refiners were shifting to PX. So is that a scenario that is playing out in the current market? And would that impact availability of OX in general?

I don't think so because PX and OX prices are almost in the similar range for last 2 years, 3 years. So both the prices has gone up in line with the feedstock cost. However, OX, PX is played out in the last 4, 5 years. In last 2 years, I think OX and PX prices are similarly in the same range. So however, when you say that when government is stressing to all refiners to produce more LPG and gasoline, then there will be some impact. But typically, India is only supplied by the rice and balance is imported. And outside market, there is no such impact. OX is easily available in international market. Prices are elevated.

Okay. Understood. Also, the planned shutdowns that you will be taking in which quarter are we planning to take these shutdowns?

So right now, it's under planning. But generally, in third or fourth quarter, typically, we take the shutdowns. Right now it's on the plan. The date is not finalized. It will be finalized based on the overall preparation as well as the demand-supply scenario and the inventory scenario.

Okay. Okay. Understood. And also, you mentioned that overall, the prices are elevated. So from a long-term medium prices, how much elevated are these prices are?

So typically, prices remain in the range of INR 90 to INR 110. And in COVID period, it has gone up to INR 125, INR 126, which is the peak. Today, the peak is -- or normal price between INR 150 to INR 160. Now INR 140 to INR 150. So from COVID peak, it is already up by 30%. It is not the case of OX and PX. Across all chemicals, it has gone up. Because the crude cost has gone up, simple.

[Operator Instructions] Our next question is from the line of Gunit Singh with Countercyclical Investments Private Limited.

So in Q4, the PAN-OX spreads were about $100 to $150 in the market, right?

Correct.

So what were our company spreads in Q4?

So I think if you can calculate it because the raw material minus this, we typically make $100, $120 over and above the market.

So basically, I mean, what are the key drivers because of which we make $100 above the market?

One is the operating efficiency, which we operate and we get the extra production because of the yield. Second, we have a byproduct called maleic, which we are generating from the wash water. The maleic is coming from the wash water of phthalic. And since it is coming from the byproduct -- it is coming as a byproduct. So whatever is the sale is the EBITDA. There is no conversion cost or something because there is no material required. Third is the benzoic acid. So if you take the -- put together all 3, it will give us the advantage of typically $100 to $120.

Got it. That makes sense. So how much -- what volumes of PAN was internally consumed in FY '26?

PAN is produced. OX is consumed.

So we use PAN to make some downstream products, right?

DEP, yes.

So how much of it was internally consumed in FY '26 volume?

Just a minute. I will look into it. So for DEP, we have consumed the PAN. We have produced some around 4,500 to 5,000 tonnes.

Got it. So basically, 1 tonne of DEP production requires 1 tonne of PAN. Is that a fair understanding?

Not exactly. 1 tonne of DP require around 0.7 tonne of PAN.

Got it. So my second question would be regarding the plasticizer plant. So for FY '27, realistically, what kind of revenue potential and what kind of utilization can we expect? And realistically, what kind of EBITDA margins can we expect on a lower end?

I think margin, I would not like to comment. Typically, I can guide you that whatever is the market margin, we'll be making $100 to $120 over and above that. For the year, I think we will remain in the same range of around 2 lakh tonnes, which is being sold in the domestic market, 10,000 to 15,000 tonnes will be manufactured, but it will be internally used for plasticizer and the DEP production.

Got it. And sir, in terms of revenue potential from the plasticizer plant for FY '27?

Yes. So if you take around 20,000 to 25,000 tonnes of production, so you can roughly say between 250 plus/minus 5%, 200 to 250, you can say that. It all depends upon when we start the production. And once we started the production, then we'll be able to access the market because capacity is already there in the system. We need to ramp up and look at the market how we can ramp up because today, all the raw material prices are very elevated level. So we have started the pre-operating activity and really waiting for stabilization in the market before getting into the full production.

Got it. So by when do you expect this to happen? And have we -- I mean, what steps are we taking to get customers for the plasticizer given that the market is already very covered?

I think demand of the plasticizer is there in the domestic market. And all the players which are there, they are selling. And in fact, there are very little import of plasticizers. We are able to get into the market, and there are some of the products like DIN, there is a very good demand because all cable companies are using that product. Similarly, it's a commodity product. If you have a better pricing, you can sell in the market. Selling is not a challenge.

Got it. And in terms of DEP, we have added 12,000 metric tons, right?

No, we increased the capacity from 8,000, 8,400 tonnes to 12,000 tonnes, the bottleneck. DEP is there for last 2, 3 years since '22, last 4 years. We were operating at around 7,000 to 8,000 tonnes. Now we have debottleneckand increased the capacity by 50% to 12,000 tonnes.

Got it. And so given all these initiatives, would you like to give a guidance in terms of top line and bottom line for FY '27, which we can realistically expect?

I can give you top line, but the challenge is that at today's price, the top line looks to be very heavy. If the prices remain what it is today, you will see a top line much higher than what you have seen in the last 1 year. So I think it's better for me to give the guidance in terms of quantity. 2 lakh tonnes is what we are planning to sell in the market for phthalic and 20,000 to 25,000 tonnes in the plasticizer and around 8,000 tonnes for the DEP. If prices remain elevated, it will be INR 2,500 plus. If prices moderate, it will between INR 2,000 to INR 2,200. It all depends on the final pricing.

[Operator Instructions] Our next question comes from the line of Renuka with First Water Capital.

So I just had a couple of queries with regards to the volume growth that you have given. So despite the fifth plant getting commissioned, we are expecting a flattish volume for FY '27 as well. So whatever extra that we are -- will be manufacturing from PA-5 will be internally consumed for the plasticizer plant?

Correct. In keeping in view the 2 shutdowns or 3 shutdown we are planning.

Okay. And can you quantify how much will we produce in the fourth quarter?

Fourth quarter, generally, we avoid giving pinpoint but it was more than 50,000.

Sorry, can you repeat that? More than 50,000?

You are talking about sales of production? Production was more than 50,000 tonnes.

Right. And on the sales part?

More than 52,000 tonnes.

Okay. And given like you gave a guidance of roughly INR 200 crores, INR 250 crores, but at the current spread, what would be the EBITDA that we can expect in FY '27? And additionally, earlier you had said at optimum utilization, both these will add INR 1,000 crores of revenue. So when would that be possible? Like when is that optimum utilization possible?

So for current year, the optimum utilization is not possible. We will be at around 20,000 to 25,000 tonnes for the plasticizer business. Similarly for the PA plant also. So '27, '28 you can see the optimum that once we start the plasticizes assess the market able to sell the product. And then in line with that, we are planning to start the full-fledged production. So basically, $1,000 crores is a revenue number of $1,100 crores for put together plasticizer we'll be able to see when we operate at 70%, 80% of these plants.

Okay. Got it. And on the EBITDA part, given current spreads, how much can we expect?

I don't want to comment on EBITDA specifically for keeping in 1 or 2 quarters. I think rather than I give the guidance for EBITDA and the PAT, it's better I give the guidance, whatever the market margin we make $100 to $120 crores over and above because it's very difficult to predict the market in our business.

Our next question is from the line of Aditya with Securities Investment Management.

Sir, you mentioned that the current spread is around $150 to $200 now. What were the average spreads for FY '26?

Sorry, can you repeat? I'm not getting your voice. You are talking about the spread in FY '26? Between $100 to $150.

Okay. And sir, this increase in spreads now, do you think major factor was because of supply disruptions or the players were not able to supply the product, which led to increase in spreads?

I think the reason is in 2 parts. First, the slightly supply from the international market because no petrochemical products are being produced much. Second, the price of the raw material has gone up. So I mentioned if you are selling at $1,000, at 10% you're making $100. When you're selling at $1,500, at 10% you are making $150. So at elevated prices, historically, margins remain high.

And sir, how much of PAN supply comes from the Middle East?

Middle East don't produce anything. India export is coming from China, Taiwan and Korea. Middle East is not producing. In fact, we are exporting 10% to 15% of our product to the Middle East.

And now sir, pigment industry is one of the key users of PAN. So how is that industry doing?

They are doing okay because not only the phthalic production, phthalic prices have gone up, but also other raw materials required for the pigment industry has also gone up. So ultimately, it's elevated prices of all the raw material for pigment industry. So right now, they are able to pass on some of the prices, but we need to see next 3 to 6 months if the prices remain at an elevated level, how much they will be able to pass on to the consumers. And the challenges of the urea also, they need the urea as a raw material, which is not available in sufficient quantity in the domestic market.

Okay. And sir, does India have import duty on PAN?

No. Import duty -- sorry, OX there is no import duty. On PAN, there is import duty in selected countries, different duties. It's duty from antidumping duty.

And what is the rate of duty? And I think this was supposed to end in FY '26, right, in 2026?

It was supposed to end in August '26. Commerce Ministry has recommended for 2 countries the duty for $40 China and Korea $140 for next 5 years. It's recommended by Finance Ministry -- recommended by Commerce Ministry yet to be approved and notified by Finance Ministry.

Okay. And now lastly, we are expected to do 25, 000 to 30,000 in plasticizer this year. Would this plan be that this year in that kind of utilization?

Actually, plan is 75,000 tonnes. So on 25,000, we will be at 32%, 33%.

Right. So in the first year of operations, would that facility be breaking even or we will be making losses?

It will be depending upon what price making the selling because raw materials are 35% to 40%. And based on today's prices of plasticizers, it will be easily breaking even because right now, the plasticizer prices are at elevated levels.

Got it. And what is the revenue contribution from maleic from this year?

From maleic, this year the contribution was around -- for the quarter, it was INR 15 crores.

And for the full year?

Full year, it was INR 55 crores.

Okay. And what kind of size have we seen in maleic prices in the last 3, 4 months?

Maleic prices have gone up in international market by 15% to 20%, again come back and corrected by 5%, 10%. So right now, it is at an elevated level, but it is ranging between $1,000 to $1,100.

Sir, this increase in prices, this would benefit us going forward, right? Because this would directly flow into our EBITDA because this a byproduct for us?

Correct, correct. It will be directly reflecting EBITDA. But compared phthalic, still it is 25% to 30% lower. It has gone up. It was actually hovering around $700, $800 for 2 years. It has gone down to $650 to $670. In last 2 months, it has gone to up to $1,100, now hovering around $1,100.

Our next question comes from the line of [ Majid Ahamed ] with PinPointX Capital.

My first question is I want to know about the [indiscernible]. How much revenue are we looking?

So right now, we are in the process of completion. We will be producing around 1,500 tonnes in annual capacity. And once it is completed, we expect around INR 25 crores to INR 28 crores at peak capacity revenue.

How much, sir?

INR 25 crores to INR 30 crores, depending on the pricing.

INR 25 crores to INR 30 crores?

Yes. Basically 1:1.5 ratio on CapEx.

How do you see the PAN realization especially -- going forward, how do you see the PAN realization coming forward?

Sorry, can you repeat your question?

How do you see the PAN realization?

PAN realization remains good. If the prices of the raw material is high, PAN is expected to be having a better realization between $1,400 to $1,500 right now, it is hovering around $1,400 to $1,500. So if the raw material prices remain high, PAN prices will remain high.

Sorry to interrupt, sir, but you are not clearly audible at the moment.

[indiscernible] Sir, I'm asking on PAN, how do you see to be ending this year? Have you transitioned in [indiscernible]?

So PAN is actually is different industry. PAN is used in a different percentage. I will give you an example. Like for plasticizer, it is between 35% to 40% PAN is being used. The other industry, for UPR, it is 15% to 16%, paints is 10% to 15%, polyester is 8% to 9%, CPC is 6%, . So in different downstream industry, PAN is being used in different proportions. I see it as the plasticizer. So balance industry where it is used between 5% to 10%, it doesn't have that much of impact because there are other raw materials which are much higher in terms of the pricing, which we need to cater into and pass on to the consumer. So I think PAN, majority is used basically in the plasticizer by 35% to 40%. So that price they are able to transfer that will be depend upon what price they are able to sell the raw material remains high, final product price has remained high to maintain the similar margin. For other industry, I have not seen that much of impact because PAN the impact is very small because very small quantity is being used compared to the other chemical like styrene, and all that. Their pricing will decide about the final product prices of the final product of these industries. Here, the PAN impact is very low.

[indiscernible]

So basically, there is no direct correlation between the crude and PAN because the value crude goes to naphtha, naphtha through go reformat goes to mid-xylene, mid-xylene is converted into PAN, which goes to base xylene converted oil goes, which goes to P. So direct, there is no correlation. Of course, 0.6% to 0.7%. But directionally, whenever the crude price goes up, OS goes up and OS goes up, PS goes up. Directionally, you're right, but you can't pinpoint the absolute correlation in terms of if it goes INR 100, it will go to INR 60, INR 70, INR 80, INR 50, there is no direct correlation. If you take average, it becomes 0.6. But sometimes we have seen the crude prices going up, naphtha prices going down. So right now, the oil prices are behaving in a very different way than what it was historically. But typically, historically, it has 0.6 it's correlated but 0.7.

Sir, finally, just want to understand by FY '27 or '28, how do you see PAN and non PAN?

So we expect PAN to be between 220 to 230. And when I say 220 to 230 is what we are to sell 200 to 250 will be used in the plasticizes and the DEP and we expect plastic to come around 60,000 to 75,000 tonnes. And DEP is around 10,000 to 12,000 tonnes. So overall, if you optimally utilize all the plants, including 5 phase DEP and plasticizer, we expect to have INR 3,000 crores to INR 3,200 crores of revenue.

INR 3,000 crores goes to revenue?

That I am talking about not only elevated prices, but normalized price scenario. So now the prices are high. It may be much more higher than INR 3,000 crores. But we should not take these prices as a model for forever. So whenever price is moderate, $1,000 to $1,100 for phthalic and all that, at that rate, we will be able to touch INR 3,000 crores.

[Operator Instructions] Our next question is a question from Riya Mehta with Aequitas Investment.

Just wanted to understand the current quarter, if I'm doing 50,000 tonnes and if I have my company margin of around $250, I'm not able to understand the math for the gross profit. Could you help me with that?

No, no, no. There is no -- we never mentioned about $250. $150 -- actually for Jan, Febit was $100 to $150. In March, it's $150 to $200. And there was some recovery. We had a loss of around INR 20 crores, INR 25 crores in 9 months on account of inventory, which we are also able to recover. If you put all 3 together, to get it. So the gross margin for the company for the last quarter was around INR 148 crores. INR 148 crores, you can convert it into the dollar and then you divide it with the quantity, you will able to get it, which will be $100 higher than the margin because of byproduct inclusion of byproduct and yield.

Okay. Got it. And in terms of non-phthalic, what we have around INR 160 crores, how do you see that number shaping for us because considering the entire amount will come to EBITDA? Just wanted to understand your sense on it which is the current situation.

So actually, not the entire amount, the amount which link with the mic and will come to entire amount will not come because DEP gross margin is 10% to 15%. That will come to EBITDA. The other products will have a plasticizer, which we are going to start very soon. That contribution, you can see between INR 200 crores to INR 250 crores, but that is not all coming into EBITDA. That will be the revenue from other products. So for next year, when we are talking about, we see between INR 300 crores to INR 350 crores of the revenue coming from plasticizer, maleic, benzoic acid and DEP.

Got it. And out of that, maleic and benzoic acid is something which goes close directly to EBITDA?

Mostly. 90%, 95%, yes.

And how much have the MAN prices gone up?

MAN prices, in international market, it was actually in Jan -- till Jan, it was $650 to $700. In April, it has grown as high as $1,100, $1,150 right now hovering around $1,000.

Okay. This is despite China dumping, right?

I think I'm talking about international price. I'm not talking about the overall price. It's international price.

Okay. Just to get a sense on China dumping scenario with us understanding that demand might be impacted in the mid to near term, what kind of dumping are you currently seeing? And just in case of phthalic, what have you seen...

China is not dumping. They are selling products in the international market. We call dumping when they try to sell below market prices. They are selling in line with the market prices because there is extra capacity, they are flooding the entire world with their product. And since their cost of production is low and they work on a marginal cost, the other companies are not able to match their prices. So I will not say dumping. It is the way of looking at the thing. But right now, I think China has a capacity until they get into BDO, PBT, PPAT. Until then, that excess capacity will there you heard that one of the biggest player, Huntsman has shut down their plant in Germany. Right now, they are operating 5 plants. They are operating 3 out of that 2 in U.S. for maleic anhydride. So they continue to do so. And we believe that in Germany and Europe, China is putting so much of maleic so they shutdown their facility. So China continue to remain a dominant force in maleic probably next 2 to 3 years.

And in terms of phthalic, after the shutdown, do we see that the oversupply scenario will reduce?

I don't think India is oversupply. If everybody is operating at 70%, 80%, there is no oversupply. But when we assume everybody is operating at 100% and not exporting, then there will be because we are also 10% to 15% we are exporting in the export market. India is having import, India is having export and everybody is operating at a moderate level. So it's fine. In 1 or 2 years when the demand grow at 5%, again, you will see there is a deficit in India of phthalic, say, '28, '29. So I think it's a demand-supply scenario will automatically create equilibrium over the period of time.

Our next question is a follow-up from Trushant Jani with Money Bee.

Sir, my question was with the fifth plant commissioning and given the current improved spreads, why aren't you thinking of exporting the incremental surplus capacity that is there over and above what would be required for phthalic anhydride?

So you can think of that. And you are thinking we are not operating plant. We are actually operating plant when we are talking about 2 lakh tonnes and 16,000 tonnes. So what we plan based on what is the domestic consumption, what is our export market, we sell 10% to 50% export and what is the internal condition. When I'm giving a guidance of 2 lakh tonnes, then it is wrong to assume we are not operating 5 plants.

No. But sir, when we did not have this fifth plant, we were still managing to do around 2 lakh tonnes, right?

Yes, yes, yes. So right now, when we operate, there will be 1 or 2 plant shutdown. Given that plant will be shut down, 4 plants will be operating. And from fourth plant, we will be exporting, we are supplying it to the plasticizer and selling in the domestic market also. It can be higher.

When we hire coal plants, when we had 4 plants, even that time, there would have been shutdowns. And despite that, we were managing to do around 2 lakh tonnes. Now with the fifth plant and with the shutdowns, it's incremental that we are able to manage is only it's 10% to 15% more?

Yes, it's all depend upon the cost benefit. Generally, we wanted to have the full capacity of all the plants when we have 80% to 90% utilization of plasticizer. We don't want to have a scenario where we need to compete with the China and other players in export market. Plasticizer is a domestic game. If plasticizer go to say, 50,000, 60,000, 70,000 tonnes, you see automatically see all plants will be operating.

But sir, even if you -- I mean, it's not a very large capacity.

I think it's better for me to remain conservative while giving the projection. It will be reflected in the results. I don't want to be over optimistic today in my projection.

Sure. And sir, any of the end user industry of phthalic, are you seeing anywhere a better demand because of all this? Or that is not the case in any of the downstream use case?

If you believe that Indian consumers are not price sensitive at 60% higher prices, they will be happy to buy, I don't think so. But some of the industries are able to transfer the price like paints are able to do, specialty chemicals are able to pass on the price. Some are able to do, some are not able to do. And believe me, apart from plasticizers, where phthalic is 30% to 35%, all other industries is 5% to 10%. So it's not about phthalic, it's about the other products which is being used as we operate.

Ladies and gentlemen, due to time constraints, we will take that as our last question for today. I would now like to hand the conference over to the management for closing comments. Over to you, sir.

Thank you very much, everyone, for joining the call. We appreciate your time, showing your interest in the company. I have only one comment. India is growing at a steady pace at GDP 6%, 6.5%. Phthalic is a big raw material or intermediate, which is required for all chemicals, which is linked with the direct infrastructure of the company. We believe the demand continue to grow. Right now, there are some hiccups because of the elevated prices of the final product. But over the period of time, next 6 to 9 months, things will normalize, then we see the demand growing at between 6% to 8%. And we believe with plasticizer in place, we will have very good earnings potential as well as the capacity utilization going forward. Thank you very much. Bye.

Thank you. On behalf of I G Petrochemicals Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.