India Glycols Limited ($500201)

Ladies and gentlemen, good day, and welcome to India Glycols Limited Q4 FY '26 Earnings Conference Call hosted by InCred Equities. 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 guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Nitin Awasthi from InCred Equities. Thank you, and over to you, Mr. Awasthi.

Thank you. Firstly, I would like to thank the management for giving us this opportunity to host the conference call today. From India Glycols management, we have their CEO, Mr. Rupark Sarswat; their CFO, Mr. Anand Singhal, their Head of Liquor Business, Mr. S.K. Shukla; and their Head, Legal and Company Secretary, Mr. Ankur Jain. I would now like to invite Mr. Rupark to initiate the proceedings with his opening remarks, post which we shall open the floor for a Q&A session. Thank you, and over to you, sir.

Yes. Good afternoon, Nitin, and thank you for hosting this call. Also, my apologies for us starting a little late. And I'm also joined with one of our other colleagues, who is Akshay Bansal, who heads the Ennature Biopharma business. And Ankur due to some exigencies is not here. So nevertheless, I think I have a good year to report because we are talking about the annual performance. So as you have probably seen the numbers, we have had gross revenues of INR 9,827 crores, which is up 8.7%. Net revenues of INR 4,211 crores, which is up 11.8%. Now the revenue growth has been led to a large extent by the growth in portable spirits and biofuels, and we will talk about this segment a little bit subsequently. And EBITDA growth from -- EBITDA has been INR 654 crores, which is up 24.5% over last year. And the EBITDA margin itself is up 15.5%, up 162 basis points. And we have seen EBITDA growth more or less across the business. The tickets and segments of portable spirits, biofuels as well as chemicals have driven the margin improvement, particularly led by chemicals and biofuels. At the PAT level, we are posting INR 293 crores, which is up 26.8%. And the PAT margin at 6.9% is also 84 basis points up. So all in all, a strong operating performance and therefore, also resulting in a good increase in profitability. If you look at the quarter, we have a net revenue of INR 976 crores, which is up 13.1% for the same quarter prior year. And in this quarter, all segments have delivered strong growth, and that has resulted in this 13.1% growth for the quarter. In EBITDA terms, it is INR 167 crores, which is up 13.3% and the EBITDA margin at 17.1% is up 5 basis points. Now if you add other income, actually, our EBITDA margin is close to 20% to 20.8%. And the reason I mentioned this is that the most significant part of our other income is actually income from the JV. And why it is not the kind of a once-off income, it is an income which is very much interrelated and integrated with the chemical business. And in a way, we sell to them and the way IBL realizes this profitability is through this steady other income. So in that sense, when you look at the chemicals business, all the business or the quality of the business, it might be good to look at both. And as you would expect, our finance costs have been lower. And all segments, talking about the segments, India reached 20% blending as far as biofuels is concerned, which drove quite a lot of growth, both in terms of profits as well as sales. And as we'll talk later, there is talk about how and whether the government of India can increase the blending to 21% to 22% or even looking at flexi vehicles. In the portable spirits space, we have maintained our market leadership in the markets that we are present. And broadly, as far as IMFL is concerned, we successfully look at implementing the strategy for premiumization and [indiscernible] continues to be the largest selling brand within the country. In chemicals, we've seen a bit of a dip in sales. But having said that, I think we saw a significant uptick in terms of the margin percentages as well as growth in overall margin. Now that's based on some readjustments in the business and letting go of some low-margin businesses, but we continue to focus on higher value-added chemicals. In short, our Performance Chemicals portfolio has started to do well, though it's a smaller part of the overall chemicals business, but our pipeline is strong, and we expect that it will continue to drive good growth in chemicals. In Ennature Biopharma, you will hear later as well. But the top line, by and large, has been stable despite a relatively challenging global and macroeconomic environment as well as cost pressures. But the silver lining is that we've been acquiring new customers and the progress that has been made in terms of launching of branded nutraceuticals, getting more standards and certification, et cetera, is good, and we expect that the business will recover and do well in the times to come. Now as I report this year, I may like to point out that we've had an interesting journey over the last few years. So I talk about some ratios, for example. Our EBITDA ratio in the year FY '22 was 11%. In '23, it became 13%. In '24, it became 14.2%. In '25, it became 13.9%. And in FY '26, it became 16.4%. So whilst if you remember, when we started doing these calls, we spoke about certain challenges that the business had and our strategy to overcome those challenges, both in terms of actions in the marketplace, diversifying our portfolio, taking some cost actions. Of course, we always depend on some headwinds and tailwinds. But by and large, it is a result of a strategic thrust to improve the quality of the business. Similarly, if you look at some of our ratios, our debt-to-equity ratio has gone down from 0.9 to 0.6 this year. Our interest coverage ratio has gone up from 3.7 to 4.13 and if you look at ROCE over the last 3 years, it has gone from 7.7% to 11.9% and RONA has gone up from 7.7% to 11.7%. So I am optimistic, and I think I'm happy to report that we've made progress and we've not -- we've made progress over the years. We made steady progress, and we've made good progress. And the other thing which is talked about, and I must brief you is whether the war has had any impact on us. Well, the short answer for everybody is, yes, but it has had a mixed impact on us. Now the reason it has had mixed impact, probably overall a little positive is that what it has led to, it has led to sharp increases in the crude price and also some availability constraints as far as energy or ethanol is concerned, which means that our relative competitiveness for products which are based on ethanol is somewhat better or significantly better in some cases and which has helped us improve margins a little bit, get market a little bit more. And I will talk about crude price a little bit more subsequently. And as far as exports is concerned, it has impacted us adversely because for big customers like Newpark, where we send our oilfield chemicals largely to the Middle East. That business is largely on hold. I think fundamentally, the business is strong. We continue to work on new products and new application areas, but this has caused some problems. As you also know, as a result of the war, many raw material feedstocks for example, propylene oxide, prices have gone up, availability is a challenge. So it has affected some areas. And as you would imagine, given a sustained situation of war, the demand itself has softened in some areas. So all in all, a mixed impact, but overall, maybe slightly positive given the fact that in the ethanol-based materials, it has improved our competitiveness. Now talking about business performance from an SBU or segment perspective. So in the Chemicals business, we've had a net revenue of INR 1,203 crores, which is down 10% but our EBIT at INR 141 crores is up 12.5%, and our EBIT margins are up to 11.7%. So I spoke about the reasons for the weak sales, but it is a good improvement, both in EBITDA margin as well as overall EBITDA. Now there is -- if you look at EBITDA without adjusting the other income and probably some streamlining that is required in-house, we will start to see that the quality of the Chemicals business is probably going to be better than this going forward. As far as the portable Spirits business is concerned, we posted a top line of INR 1,331 crores, up 14.2% and an EBIT of INR 285 crores, which is up 11.1%. For the Biofuels business, an excellent year with 40.9% growth, delivering a top line of INR 1,470 crores and an EBITDA of INR 115 crores, which is nearly double, which is up 103% and an EBIT margin of 7.8%. Ennature Biopharma, as I mentioned, top line has more or less been similar to last year, but margins have been under pressure, and we'll talk about the actions which we are taking and making good progress on, which should see this business becoming stronger in this year as well as years going forward. For the quarter, the net revenue for Chemicals is up 18.8% at INR 301 crores. The EBIT is at INR 37 crores is up 37.4% and EBIT margins are 12.2%. And this is given some of the factors that I spoke about, the business, in my opinion, will start to look better going forward. In portable Spirits, we posted a top line of INR 306 crores for the quarter, up 7.9%, whereas margins for the quarter was somewhat under pressure, but that was a bit of an odd quarter in the last year at INR 68 crores. Overall, EBIT margins were very good at 2.1%. For biofuels for the quarter, 11.6% growth, posting a top line of INR 305 crores and an EBITDA of INR 30 crores, which is up 90% with an EBIT margin of 9.9%. Biopharma saw a turnaround as far as the top line is concerned with a 24% growth in the last quarter, an EBIT of INR 3 crores, as I said, the margins have continued to be under pressure. Talking about a few other things. I spoke about one of the things that we often talk about, which is the EO price and the ethanol price and the relative price of EO to Reliance's EO price because it impacts several of our businesses. So we saw a period and for the last couple of months, we have been competitive as far as Reliance EO price is concerned. And that is because of rising crude prices and also ample availability of ethanol within India. And we've talked about the ethanol capacity and the fact that we have now a little more than the capacity that biofuel consumes in India. Now the reason I mentioned about this is that I do feel, however, that whilst the petroleum prices or the crude prices may soften, but the crude prices may, and that's my opinion, while it's anybody's guess as to what's going to happen, are expected to stay a bit firm. And the reason I say this is, first of all, the war -- different people have different expectations had lasted a little longer than what most people expected. There has been a significant amount of damage and the damage has been to a number of friends of the U.S. and people who control oil. And I would imagine that one of the ways, to some extent, recover is to keep oil prices somewhat higher. The second reason, in my opinion, is that America also wants to sell oil. You remember Mr. Trump saying drill baby drill in his election campaign, which means that there's a possibility of America wanting the prices to be a little more firmer than they have been. We've seen a period of low crude prices for a period. And they also control Venezuela, to some extent, Iran. So I would imagine that it's not suddenly -- the competitiveness that we kind of [indiscernible] will stay for some more time. I also imagine that some customers would like some diversification in terms of sources, even if it is a smaller percentage of share, we should be able to benefit in some cases. Now the reason I say this is that we have seen a period of lower crude prices. And if you go back before 2021, for a period of 15 years, we were equal or less than [indiscernible]. So I don't know which period to call abnormal, but we did see significantly lower crude prices for a period of time. Related to this is also the ethanol price trends that we monitor, which is important to several of our businesses, chemicals, portable spirits, biofuels because of a number of factors, including freight and others, the imported ethanol prices in India went up quite significantly, whereas the domestic prices have more or less been stable or maybe even saw a bit of a dip. Now given the fact that we have good ethanol capacities in-house, we talked about the 3 strategy and the fact that we have grain molasses based as well as the option to import, it allowed us or it allows us to also use in-house ethanol for our chemicals as an intermediate without worrying too much about excess ethanol capacity. So I think that strategy, which allowed us to kind of tide over some of the difficult times also is helping us right now because we've toned down our imports quite significantly, and we've been able to support our chemicals business to a large extent by ethanol produced in-house. So talking about the segment which is in higher spirits these days, which is essentially portable spirits to start with continue to have a very good year with 14.4% top line growth, as I mentioned, 11.1% EBIT growth and improvement in EBIT margin as well. So we made a strong entry in the CSP business, as we spoke about, and Bubly continues to remain the highest selling brand in India. We've maintained our market leadership position as far as Indian-made Indian liquor is concerned in UP and Uttarakhand, and we launched several new brands, and we'll talk about a little bit. In Uttarakhand, Indian-made Indian liquor, we saw a growth of 21%. In UP, we saw a growth of 11% and despite being in only these territories as far as Indian-made liquor is concerned. And we have done several things to continue to strengthen this exciting business. We've expanded coverage in Western UP with new brands as far as IMIL is concerned. IGL has maintained the leadership position in UP. So our leadership position has been amongst the top 2 and very close for a long period of time. We have increased our coverage in the state with almost 10 new stations. We've introduced 7 new brands in the market to the new stations. And as per the government policy, also added the 100 ml SKU in the market, and we're getting a good response. We've also opened 42 company-operated warehouses in UP, which will continue to drive this business. For IMFL in UP, we've successfully introduced Amrut Prestige whiskey in dealer segment and sold 61,000 cases so far. We've introduced Bunty Vodka, Dera and Cranberry flavor in the middle of this year. We've achieved a 66% growth in Amrut's MaQintosh whiskey. Overall, a 30% growth in IMFL volumes for the year, successfully launched Amazing Vodka Jamun flavor, which is Bunty Vodka in Q1 as well. We've also successfully launched Dhurandar whiskey in the regular category. Similarly, talking about our initiatives in Uttarakhand, Amazing Vodka achieved a 21% market share against an 18% market share last year. Amazing whiskey in Uttarakhand secured a 76% growth, and we also introduced Amrut Prestige whiskey in the middle of this year. In Bunty Vodka, we saw 122% growth, and we have continued to maintain our leadership position in the regular whiskey category with Soulmate Black. We've successfully introduced Amazing Jamus, Bunty Jamun and Cranberry. And these, I think, will continue to drive growth in these segments, both in UP and Uttarakhand. And other than that, of course, as you know, our growth is also coming from new areas like CSD and paramilatry, which you'll hear more about a little later. So Raju, would you like to talk about [indiscernible]. As I have already spoken about biofuels, I will not come to the numbers once again, except that in general, the government's policy of 20% blending was finished ahead of schedule, which was initially scheduled for 2030. Now we have somewhat excess capacity in ethanol, which we all know. And there are discussions with increasing talk about securing India's energy, reducing ForEx outflows of probably increasing it beyond 20%. So you can increase a few percentage points beyond 20% depends upon the government's policy decision. The other thing that has been talked about is in a selective manner going to flexi vehicles, which operate at 85% plus. Now as some of you may know or most of you may know, there is an operating range for ethanol. You can't linearly go from 20% to 85%. There is a wide range, broadly between 30 and 85%, which is a no operating range for various reasons. So both these may help further pull up demand for biofuel. But having said that, I think if India continues to remain a high-volume, cost-effective producer of ethanol. There are a number of other outlets for ethanol, including ethanol-based chemicals. And similarly, we saw good sales growth in our ENA business, which is extra neutral alcohol. Now dual flexibility, as you know, that we can produce ethanol from grain and molasses has helped us with optimizing our cost as well as offering people different feedstock-based ENA. Our domestic volumes are stable, and we also see steady demand from IMFL, pharma, [indiscernible] as well as the packaging that we do for Bacardi. Now we keep a track of our margins and a few factors which affect our margins for the biofuels business include the price, of course, which has more or less been steady. The good thing has been that the grain prices have been somewhat stable, in fact, a little lower than what we saw earlier last year. And there is increasing acceptability of TDGS, which is a protein byproduct, which means that the profitability in the biofuels business, as you see, has also improved. Now these are questions which many of you over the years continue to ask, which was about growth in biofuels as well as how we sustain the profitability in biofuel. And we continue to at least have an opinion that the policy, by and large, is not a short-term policy, is a long-term policy, and there is enough thought that the government has given to make sure that the industry is sustained with reasonable margins at the least. So while from time to time, the profitability varies, but remember, it never became red. And by and large, there were adjustments in the market either due to a natural adjustment or because of price adjustments that the government did and the profitability of the industry has remained healthy. Now talking about chemicals, we have spoken about the numbers. In short, the story in chemicals is that we continue to see very good growth in Performance Chemicals, although it is a relatively smaller segment as of now. And we are quite confident that, that growth is going to stay for the years to come and drive growth as far as chemicals is concerned. So we've spoken to you in the past about carbon smart materials. We continue to build that business. We continue to build the business in oilfield chemicals, working with several global majors like BASF, Newpark and now even some others. We continue to work with big majors like Dove, L'Oreal. We spoke about bio-based mine. We had a slow start, but we did mention to you that IVL became the first manufacturer of a green bio-based mine for certain applications. And our first customer, we are proud to say, is L'Oreal with whom we also did some co-development over the last 2 or 3 years, and we've started commercial supplies for them. There are a number of new products that we are working on, which includes diabetic esters for foundries, [indiscernible], certain products for the personal care space and the flavors and fragrances space. Our glycols did well. We saw some growth in the glycol space, and we've maintained our market in Southeast Asia despite the challenges. I don't even think that I should talk about those as separate challenges right now because the Reliance MEG, we don't compete with. I think the point here is that the niche customers have continued to buy glycol from us and have continued to grow. Then coming to Ennature Biopharma. We spoke about the numbers in terms of growth being steady in terms of top line, a nominal degrowth is what we saw. However, margins being under pressure. So the Q4 revenue performance saw a strong comeback, as I mentioned, driven by sustained increase in thycoluicicide prices, recovery of the nicotine business and strong nutraceutical numbers. We've strengthened our branded nutraceuticals portfolio to global certifications, clean packed ingredient launches. And we expect that the business will come back given the actions that we are doing in the times to come, both in terms of volume as well as profitability. And my colleague, Akshay, will be here to answer or talk about this business a little more. Now allow me to take a pause as I request my colleague, Mr. Singhal, to take you through the financials.

Good afternoon. Since most of the financials have already been covered, I will only give -- I will cover 3 points. One point is that the company has prepaid almost about INR 804 crores in this quarter, which has been funded by INR 467 crores through equity, which we did in November '25 and rest of the funds has been put in through the cash flow. So this INR 804 crores includes the long-term debt, the working capital and the short-term loans, causing us or rather resulting INR 20 crores saving in the interest cost, which is already there in the results. Number two, there are so many queries relating to the dividend showing in the consolidated results. Just to update that the accounting standard 28 do not allow us to show the dividend as income. The amount of INR 38.38 crores, which we have received from our JV Clariant has been adjusted against the investment which is there. Third point that there was a plant shutdown for the change of the catalyst from 17th March till 2nd April. So this has also resulted the reduction in the production as well as some sales. Apart from this, most of the results has already been covered by Mr. Rupark, and that's all. I don't want to rather take more time, and I would like you to raise your questions. Thank you.

Sir, should we start the Q&A session now?

Yes, you can.

[Operator Instructions] The first question is from the line of Pradhuamn Laddha from Omni Securities.

Am I audible?

Yes, you are audible.

Sir, my question was firstly on the plant shutdown, which you talked about. How was our business disturbed due to this? Can you throw some more light on it?

Yes. So we take shutdowns for 2 reasons. One is generally for catalyst changeovers, which takes some time, which is required roughly in 1.5 years. Now the way the business gets impacted by that is that we are a continuous plant. So we also make ethylene oxide, which we sell to, for example, the Clariant joint venture. So which means that, that business, to some extent gets affected to the extent that they cannot build up stock. And obviously, sometimes there are new orders for which we've not planned and the -- the other thing is that it also impacts -- it has not impacted our MEG business, but it impacts some other businesses like glypholicers or specialty surfactants, et cetera, which you can't stock up too much in advance. So that's how it impacts us.

Okay. Okay, sir. Secondly, sir, on the portable spirits segment, the EBIT is down Q-o-Q. We say we are continuously moving towards premiumization. So sir, first question is what is the split between country liquor and IMFL? And how do you see it going forward? Also, what would be the EBIT margins for, say, FY '27 or going forward for this segment?

Okay. Thank you for the question. Approximately 25% of the pie is towards IMFL, and this is approximately 75% is towards Indian-made liquor. But we are making definite -- we have definite focus to improve the IMFL part of it without losing focus of the IMFL with the result that we are -- now I will like to tell you what are the steps we are taking for increasing the IMFL segment, particularly premium segment. First of all, we take satisfaction in mentioning that 2 of our key brands that is Soulmate whiskey, which is a [indiscernible] and also Zumba Lemon, which is very popular in the market, have been introduced in the CSD, and we have already started supplies in the entire country. For the benefit of those who are not very much familiar with CSD details, this is a lifetime registration and which is obtained after a lot of screenings by the armed forces because it is meant for the consumption of the military. So this is one. And also a third brand of ours that is Zumba Black which is the mainstay business of the rum of the military also has cleared the preliminary screening committee, CSD, we call it, which consists of the entire Board of the administration of CSD. In the principal, they have accepted our third brand also. Of course, final Board approval will be awaited. It will take a little time, but this is also very positive news. Now our growth, as our CEO rightly said, has been very strong in the IMFL, particularly premium segment, and we expect to continue to grow rapidly in the IMFL premium segment. Now how this is possible is in 2 ways. The first point is that we are taking more geographical coverage. We started with Kerala market. We are very cautious about giving credit. So our first focus is on the corporate-led markets in particular, where the money is secure and we can -- because the working capital required for IMFL is very high. So we want to go steadily and -- but with very firm grounding. So Kerala has given us very good response. We introduced our new Kerala brandy in Kerala. And we used the French blend, which took us a lot of time. A lot of research was done. We don't introduce brands off the cuff. We do a lot of research and then we do it both internally and externally. So we -- the brand is well accepted in the market. Then we have started business in our other states. And very soon, we will be doing in Andhra and other markets like Rajasthan. So one is geographical coverage, and second is with new brands. As our CEO rightly said, we have introduced brands like Jamun and Cranberry, which are in demand or if I may use the word, which are in vogue. So because of we being a tropical country and Jamun and Cranberry are well accepted. We have 2 more brands in the offing, but for obvious reasons, we cannot disclose at this stage. But very soon, they will see the light of the day. So both geographically as well as new brands will stem the growth to high double digits. And we expect to consolidate our position in the markets like Delhi, UP, Uttarakhand, Kerala and other markets very soon. Most important is that our -- we have in-built capacity. See, as opposed to competition, if I may say, we have an inherent advantage where we do not use even 1 liter of ENA for our brands, and we have enough in-built capacity to use our ENA. For the benefit of you may not be aware, our ENA goes to top companies like top multinational companies, including Radico and Tilak Nagar and Diageo Pernord. So there is no reason why we -- our brand -- and Bacardi, which is our partner since over 15 years. So there is no reason why we should not be able to make our brands as good or better than competition. So our ingredients are good. Our -- we have laid the foundation of our new brands. And I'm sure in times to come, we will have a very strong growth, double-digit growth. So any other questions?

Raju, can I just add to you? Yes. So just to share some data with you. UP is one of the largest beer market, where for IMFL, if I'm not wrong, Manish correct me. Our top line growth last year was 25%. That's it. So a lot of our IMFL growth is coming from IMFL, which is a relatively premium part of potable spirits. Now the broad number that I have for UP, for example, while Indian-made Indian liquor is 52% to 65% of the value, but it is 52% -- sorry, in terms of volume, but 52% of volume. IMFL on the other hand, is about 16% of the volume, but about 34% of the value. So if you see in value terms, it starts to approach right now slightly more than 1/3, but half of the market share. And my understanding is that while the medium and economy brands over there have grown close to between 4% to 7% but the premium brands of IMFL have grown in higher double-digit number percentages. Now I have a number. I don't know what the exact one, so I'm refraining from quoting it. Now if you see what our strategy is and why we think we should be successful in these markets that we are focusing on, for example, Delhi, UP, Utakhand, which are the first market that we're focusing on is. As Raju said, we are very strong in terms of high-quality ethanol manufacturing. As you know, we are also the first company ever to start doing third-party bottling for Bacardi. In addition to that, I think the fact that we've got a strong base in terms of Indian-made Indian liquor is a good way for us to make our presence felt and graduate some of our customers. In addition, I think our approvals in CSD as well as paramilitary, we think would be growth drivers. And the traction that we are seeing with the inorganic growth in terms of acquisition of Amrut brand is also good, which allows us to state with some confidence that we will continue to drive premiumization in our portfolio, which will not only drive growth but also make the business richer in terms of margins.

Yes. If I may just add and supplement to what our CEO said, see, now we are -- we are poised for growth because now we've got the entire range of brands. Our Soulmate whiskey, which is our brand is a million brand. We have got our Vodka, which is amazing vodka with various flavors, including Cranberry and Jamun, which are doing very well, which are a challenger brand to the leader brand. We have got our Zumba Lemon, which is again #2 brand in that segment. And now -- we have also -- now it is in public domain, so I can clearly say that we've got -- in a few states of the north, we have got the distribution rights of our Amrut luxury malls, which are all famous and loved all over the world. There was unmet demand for these brands. So it is slightly more than distribution. But for obvious reasons, I cannot disclose, but we have got the entire range now. So when our sales guy goes, he has a regular range brand up to the single malts. The future is in premiumization. So we are in a good position to attend to the needs of all sectors.

Like since the IMFL portfolio is growing, do you see the margin to be north of 22%, if I'm not wrong?

22% EBIT margin.

Sorry, can you repeat your question?

For the portable Spirits segment, do you see the EBIT margins to be north of 22% for the IMFL segment or the portable Spirits segment?

For the portable Spirits segment, I think I have already shared the number, which for Q4 was 22% the EBIT margin. Now I think the point that we've made is we've made certain assumptions in terms of ethanol, the growing market premiumization as well as strength of IVL. So I would imagine that there is no reason for us to believe that we should be able to maintain these margins and for the effort that we put in it, even try and improve it.

The next question is from the line of Saket Kapoor from Kapoor Company.

Congratulations first to the team, sir, for posting a good set of numbers. I hope I'm audible. Firstly, if we look at our numbers in the segment part, the BSPC segment performance [Foreign Language]. So if you could just give us some understanding on the factors that has led to the revenue going down? And how should this segment shape up in the coming year? What are our preparations? So some color on the same.

Saket, thank you, and thank you for your nice kind words. Just give me a second, Saket. I wanted some -- so first of all, it will be slightly incorrect to say that the performance has been muted. I think top line growth has been muted.

Yes, sir.

Right. Whereas we've seen growth in absolute EBITDA as well as EBITDA margins -- EBIT margin. Now since we can discuss EBITDA separately, our EBITDA performance is much better. Now there is some need for streamlining of certain costs, et cetera, which will also result in that. Yes, we lost some top line essentially because of loss of some markets like licolesers, okay? And also some top line loss in cat. Now the reason why we saw some drop in sales of businesses like licolesers is that we had a much lower cost material available from China, for example, and some of the other variants, which are like propylene or propylene-based glycol, which gathered some of our market. Now some of our degrowth actually also came from the EO offtake by the joint venture. And one of the challenges here was a large delta between Reliance and IEO price. Now to some extent, not to some extent. Right now, to a large extent, that has been adjusted. And we believe that the huge delta that we saw for a period of 1.5, 2 years, hopefully, in my opinion, may be a thing of the past, and we should see much better competitiveness on that front as well. We've seen good growth in terms of glycol. We've seen excellent growth in terms of performance chemicals. We've seen in terms of value itself is up 40% and contribution is up 40-plus percent. And we are hoping that I'm not projecting, but we are hoping for in excess of doubling this business this year and maybe continue -- if we continue to do our projects well, continue to maintain that momentum for years to come. In gases, the reason we see -- saw a top line decline was that in the year before, we saw extremely high argon prices. And argon is something which is very volatile. There was a shortage in India, partly because of steel plants, partly because of increased consumption and putting up of electronic plants, et cetera. And while -- so that also led to some top line decline in gases. And some of our smaller business, which we were selling as to some of our customers here, which wasn't particularly high margin, again, for the reasons of competitiveness with clients, we could not do last year. So going forward, what we see based on the actions that we are taking, not -- in terms of -- may be a little here and there in terms of [indiscernible]. Our quality of business will continue to improve. Our bid of portfolio will continue to improve. The people that we are engaging with are good end customers, that will continue to improve. And for the year at least, we see that we should have improved profitability and also top line growth. And beyond that, we are working on quite a number of projects. I think some of them which you are aware of, and I will take them as we start materializing, which have a huge upside potential as well. And I'll leave it at saying that it is potential because we need to make them happen. But since you ask me as to what the future of the chemicals business is, I am cautiously -- or I'm kind of cautiously optimistic for the immediate term or rather optimistic, but I'm bullish based on the actions that we are taking that this business will continue to build. And as we're getting a little more focus on this business, you will find that this business actually shows up better than what it may be getting seen right now.

The NSU segment, I think so that will add to your growth because some CapEx was done and we were doing some commercial pilot plant also and some sales had also happened earlier last quarter. [Foreign Language] where are we in terms of that? And sir, secondly, sir, currently, are all our plants running at optimum level because generally, we also see that revenue decline is attributable to maintenance or a shutdown. So are things at optimum level?

No, as I said, there are -- I have the numbers in front of me. We saw the value decline in glycol ether. We saw a value decline in gases. And we saw value decline in terms of the [indiscernible]. Now the shutdown does directly impact the that we sell because of 15, 20 days, there is no supply to the JV, right? Most of the sales that we book under long-term sales to the JV is actually upside, which is completely stopped during the shutdown. So yes, that's a contributing factor as well.

Okay. And -- but sir, till then with the shutdown, our JV's contribution to the profitability was significantly higher on a Q-on-Q basis. So do we have any one-off or what has led to this -- the jump to INR 13 crores. However, on an annual basis, number flat, INR 46.42 crores versus INR 46.4 crores. How should the performance of then the JV shaping up? And sir, as per I think the JV, we have 51-49% ratio. So going ahead, how are we going to monetize as per the terms, if you could just give some more color?

Saket, you always come up with difficult questions for me, but I will try and answer. So the JV performance is not only reflected by how many they buy from us. And direct supply in a particular month is not a reflection on the total turnover of the JV from the year, neither is the profitability. Now the JV, if you look at the JV performance and by and large, JV performance has improved by improvement in mix and also improvement in certain imported traded materials that they get from Clariant. And when we get back when we plow back the profit from the joint venture, it is a sum total of all of that. Yes, going forward, if the volumes also pick up for the JV and we don't have a shutdown, we expect that the ENA volumes will also contribute to growth and they will contribute to the growth in my opinion. So JV [Foreign Language].

[Foreign Language]

[Foreign Language] the fourth quarter, the JV 49%, which we have taken into consolidated results, that will continue. So this year, which you are seeing that INR 46.42 was the income from the JV or share of net profit from the JV, I think that will improve drastically. And as I have already told that in '28-'29, we are going to sell out 24% more equity as per the agreement. So depending upon the agreement and whatever, that will give us a very handsome amount, which will again be utilized for the payment of the term loan and making this company as a debt-free. So in '28-'29, I'm hopeful that the chemicals will be totally debt free.

Very good to hear that. And sir, the finance cost number is one of, I think, the lowest number posted by the company. So the finance team added by you have done good job. [Foreign Language] how should -- what should be in terms of finance cost going ahead?

Saket, again, I covered in the beginning itself that we have prepaid INR 800 crores and the promoter funding was only INR 467 crores. So INR 333 crores has been funded from the internal accrual. So whatever you are saying that run rate will continue and will continue to reduce our interest cost in the years to come. Although there is the normal repayment of the term loan also, but we will continue to prepay some of the high-cost debt. So you'll see those numbers in the first quarter and onwards in the '26, '27.

These are consistent number. And what is the current maturity [Foreign Language]?

This year, we have a liability -- normal liability of about INR 268 crores, which is, say, in ether, it is INR 168 crores and INR 100 crores in chemicals. We will prepay -- sorry, pay. And apart from this, we will try to make some of the prepayments also.

Two points on the RM part, sir. How are currently the grain prices for our bioethanol segment shaping up and the availability of the same? And if I remember correctly, sir, earlier when we had this shutdown and all, we had also realized some sale of some silver also because of some catalyst change, if I remember, twice or thrice, we have done that. How has that benefited us, sir, in terms of our reportable number for this quarter?

I will cover the silver and grain will be covered by the CEO, sir. So silver sale during the year -- during the shutdown was INR 98 crores we got out of the silver sales. While the purchase price of the silver was INR 51 and since we have not provided the consumption of the catalysts, which we are doing every month, so basically, there is no profit on the silver. So that's why that has not been shown.

Yes, so Saket, as I mentioned earlier, there is adequate stock of grain. And the grain prices have been stable. And if I may just state to you, in the middle of last year, grain prices were running close to INR 24 a kilo. And then in the last quarter of last year, they were running close to between INR 21 and INR 22 or INR 21 plus/minus. And the good thing was that the started to fetch a better price. My opinion is it is because there is greater acceptability of this protein source in the world. And also, you see a distinct shift in terms of the feedstocks which are being used to produce ethanol. If you go back to, say, 2019, 2020, out of 173 in terms of ethanol, C-heavy molasses and B-heavy molasses were contributing to 43% and 39%, respectively and sugarcane 9% and damaged sugarcane only 9%. So grain was contributing only about 9% of the total 100% of ethanol production. Now come to '25-'26, grain is contributing 27% plus 46%, which is close to 70-plus percent of -- 70% of ethanol production is coming from grain. There also a very interesting shift has happened. So what was initially largely being serviced by damaged food grain and FCI rice and it was 0 in '29,-- '20, 46% is being covered by maize. So I think there is a part of the policy initiative by the government realizing that we need to diversify in terms of the feedstocks of -- for ethanol production. There is also increasingly maize being used. We believe that there will be several things being done on this front. First of all, it's a ideal crop, which can be grown in many parts of the country, even in somewhat dryer climatic zones. And also, there is ample scope for improving the productivity of grain. I do not know if it will be speculative. But one of the things which could cause a significant jump in maize productivity, for example, which makes the U.S. quite an efficient producer of ethanol is the introduction of genetically modified maize specifically for ethanol. Now I'm not making this as a projection. These are some of the things which may going forward, significantly improve the productivity and efficiency of biofuel production in India.

Right. If I may just add one more point and join the queue is about the Ennature Biopharma, I think so that segment also the profitability has improved. So -- and also in your presentation, sir, the outlook is mentioned that the segment is expected to perform well in future on account of good customer addition, volume growth and price realization. So if you could just throw some more color and when will this segment achieve sir, earlier EBITDA higher profitability post [Foreign Language]. I think the environment has changed significantly [Foreign Language] product profile. How is this segment going to perform?

So Saket, this is Akshay here. So basically, the segment was originally -- the division was originally dependent on one of the products, which has the highs and downs of the price in terms of the total contribution to the net margin and as well as the top line. But as a company, what we have done in the last 3 years, we have diversified the business. So the more focus has come to the highly growing product -- growing market in nutraceuticals, which is basically the branded nutraceutical segment. And we have invested very significantly on some of the clinicals for the highly growing indications of women's health and some other indications. So already, we have completed some of these studies in last 1 year, and there are a couple of more studies which is ongoing, and that is likely to be completed by this financial year. And then we have a target focus on multi-geography presence in terms of -- right now, we already have a strong presence in Asia Pacific, but we are also trying to get hold of U.S. market, which is the one of the biggest markets. And then we also have opened our office very recently for us to have that trajectory and momentum in U.S. So this is broadly in terms of Ennature Biopharma. We are on the right trajectory. We are investing in high-growth component in terms of -- both in terms of our manufacturing capability and also the customer acquisition in various markets. And so we'll continue to remain in that. So I hope that answers your question.

On on the profitability front, can you give more color how will the profitability shape? I think the last time because of some products and some new plants were also commissioned because of which the realizations were down and so were the profits. So our key products and to some key product of nicotine and all, wherein one of your competitor also came up with a new unit, and that has put pressure on the realization. So how will that product profile shape up?

See for us, the nicotine business is we are diversifying into more of a value-added customer. We are trying to add a couple of customers which are long-term short. So broadly, if you look at where we started this business, we had some of the customers which are from the commodity side. But again, they are volume-based driven customers, and that has given a good top line. But strategically, we have taken a very strategic shift in the last 3 years for us to shift to more value-added customers to sustain for the long-term growth and to contribute on the profitability. So this is broadly in terms of nicotine. I mean, I would say the business right now is in the focus. But in terms of the EBITDA improvement, we may not see the significant improvement in this financial year. But definitely, the investment and the growth and the customer acquisition, what we are doing right now is going to contribute towards more of EBITDA and the profitability of the particular Ennature Biopharma segment.

And thanks to the Board for the interim dividend that has already been paid to the investors and that too on the higher side, so thank you for looking after the shareholders.

[Operator Instructions] We'll take the next question from the line of Balasubramanian from Arihant Capital.

My first question on the debt side, any further debt reduction plan is there in the coming year?

Mr. Balasubramanian, your audio is not clear. There is a background noise. Please repeat the question, sir.

Yes. Sir, on the debt profile side, is there any plan to further reduction in the coming year? And right now, it's around INR 25 crores, INR 26 crores kind of per quarter on the interest cost side, whether this rate will continue in the coming quarter? And what is the average borrowing cost right now, sir? If you could possible share the debt breakup all 3 segments?

I have already given this answer that we are rather in the process of reducing the debt. There is a liability of INR 268 crores for the year '26, '27, which we will pay. Apart from this, yes, as per the cash flow, we will target the prepayment. As such, there is no -- nothing has been written in the paper that much of -- how much we will pay, but yes. And the second thing, what you are saying that INR 25 crores, INR 26 crores per quarter that we will reduce. Okay. And if you want the debt profile, I will give you the debt profile of all the 3 units, which is in process, and I will share with you.

Okay, sir. Sir, second question is on the scheme of arrangement submitted by NCLT. I think the hearing is expected 21st of May. Is there any expected time line for the completion of demerger?

21st May, we are hopeful that we will get the order for the demerger of the division. And another hope is that in first 10 days of June, we will get the order. So once we get the order, we will start working for filing that in ROC and the other matters, which is related to it.

We'll take the next question from the line of Varun Mehta from Wealth Link Investment.

Am I audible?

Yes.

Sir, I just have a question on the balance sheet side. Basically, this year, we have done around about INR 830 crores of capital expenditure. And that also in last 6 months, it has gone from about INR 600 crores in the last 6 months. Can you just throw some light on, sir, where have we invested this money?

Actually, there are 2 distilleries largely, which are the main capital expenditure. One is the grain distillery in Gorakhpur and one is the grain distillery in Kashipur. So basically, out of whatever amount you are saying, say, about INR 400 crores is out of these 2 distilleries capitalization. And apart from this, we have some more CapEx, which is not a major amount and that has been completed. So this is what is the amount which we have spent on the CapEx.

Okay. And sir, secondly, on the debt side, we have repaid around INR 800 crores, but net debt from last year is only down by INR 220 crores. So will our interest cost remain at INR 45 crores or it will go slightly higher?

No. Our interest cost will be remaining about INR 25 crores range. Actually, you are not able to see the reduction because we have reduced our cash credit limits, okay? So some of the amount which has been repaid against the long-term loan, that is visible. But the amount which we have paid out of the cash credit limit, that is not visible.

The next question is from the line of Aakash Gupta, an individual investor.

I hope I'm audible. First question I have on portable Spirits segment. So I think you answered this in the beginning of the call as some other participant asked. I missed that. If you could just repeat what percentage of our total revenue of portable spirits comes from IMFL? And within this, what percentage is [indiscernible]?

IMFL revenue. Can you repeat the second question, please, Aakash?

Am I audible now?

Yes.

So what I'm asking is out of total portable spirit revenue, what percentage comes from IMFL? And within that, what percentage comes from Amrut?

So Akash, the total revenue percentage, whatever we have declared, it is around 31% of the total portable section. And Amrut share likely to be around 5% to 6% out of it, not much.

Okay. 31% you said, right?

Yes.

If I remember correctly, last year, it was around mid-teens, 16%, 17%. So are we saying that our IMFL has doubled?

So I think this has been already answered by our CEO that we are now shifting from our regular segment to the premium segment. So the revenue percentage is increasing in the IMFL, and we are aspiring to shift more percentage by introducing more premium brands in future.

Okay. My second question is, sir, Bacardi [indiscernible], I think that directly...

I'm sorry to interrupt you. Your voice is breaking. Can you come in the network area, please?

How is it now?

Please continue.

Yes. What I'm asking is, sir, the bottling that we do for Bacardi, I think that directly flows into our margin, right, for portable segment. So excluding that, what is our margin on portable spirits EBITDA margin?

So this Bacardi business is for the -- like their low proof and high proof brands. The major portion belongs to the low-proof brands like Breezer and all. So there we are only charging the filling cost from them. And since this directly gives the revenue to us in liquor segment, but it comes under the miscellaneous income segment, not in the sales revenue.

Right. So excluding that, what will be our margins for portable segment, portable spirits?

This wouldn't be a greater percentage in this. This could be hardly 2% or 3% of the total portable revenues.

My suggestion is Akash, if you can send an e-mail and we can revert with more precise detail in terms of breakup, et cetera, if required, have a separate discussion. And we will speak separately if required.

Ladies and gentlemen, that was the last question for today. I now hand the conference over to Rupark, sir, for closing comments. Thank you, and over to you, sir.

Yes, Ashish, let me thank you all on behalf of my colleagues here for turning up for this conference and also giving us your time and a lot of interest in our business. A big thank you to Saket for all the interest that he gives good suggestions, and he was still waiting to come back in the queue. So Saket, I'm sure we can have a discussion on your questions. But on that note, all of you have a good evening, good day, and we look forward to seeing you again. Thank you for your time. Thank you very much.

Thank you very much.

Thank you. Thank you, members of the management. On behalf of InCred Equities, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.