J.K. Cement Limited (532644) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to J.K. Cement Limited Earnings Conference Call for Quarter and Half Year Ended 30th September 2024, hosted by PhillipCapital India Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vaibhav Agarwal from PhillipCapital India Private Limited. Thank you, and over to you, sir.

Yes. Thank you, Michelle. Good evening, everyone. On behalf of PhillipCapital India Private Limited, we welcome you to the Q2 and H1 FY '25 call of J.K. Cement Limited. On the call, we have with us Mr. Ajay Kumar Saraogi, Deputy Managing Director and CFO; and Mr. Prashant Seth, President, Business Information and Investor Relations. I would like to mention on behalf of J.K. Cement and its management that certain statements that may be made or discussed on today's conference call may be forward-looking statements related to the future developments and which are based on current expectations. These statements are subject to a number of risks, uncertainties and other important factors, which may cause actual developments and results to differ materially from the statements made. J.K. Cement Limited and the management of the company assumes no obligation to publicly alter or update these forward-looking statements, whether as a result of new information or future events or otherwise. I will now hand over the floor to the management of J.K. Cement for their opening remarks, which will be followed by interactive Q&A. Thank you, and over to you, Saraogi sir.

Thank you, Vaibhav. Good evening, and welcome to this Q2 call. The Board of Directors met on 26th of October to review the working for the quarter ended September '24 as well as half year ending September '24. The major highlights of the workings. The net sales for the quarter was INR 2,322 crores as against INR 2,555 crores in the previous quarter, a dip of about 9% and INR 2,476 year-on-year, a dip of about 6%. The operating expenses were lower by 2% at INR 2,119 crores as against INR 2,164 crores the previous quarter and year-on-year flattish INR 2,124 crores. The EBITDA for the quarter was INR 273 crores as against INR 479 crores in the previous quarter, a dip of 43% and INR 447 crores in the previous year, dip of 39%. EBITDA margins was 11.7% for the quarter as against 18.7% in the previous quarter and 18% in the previous year. If we look at profit before tax, it was INR 64 crores as against INR 292 crores and INR 246 crores. And profit after tax was INR 45 crores as against INR 203 crores and INR 179 crores. EPS for the quarter was INR 5.80 as against INR 26.2 and INR 23.1. For the half year, April - September, the net sales were down by 3% at INR 4,877 crores as against INR 5,117 crores. The operating expenses was lower by 1% at INR 4,283 crores as against INR 4,345 crores. The EBITDA was down by 11% at INR 752 crores as against INR 849 crores. Margins was 15.4% as against 16.9%. Profit before tax was INR 355 crores as against INR 454 crores, a dip of 22%. And profit after tax was INR 247 crores as against INR 305 crores, a dip of 19%. The EPS was INR 32.10 as against INR 39.50. As you would have seen, the working for the quarter was not on the expected lines. That was mainly on account of both external and internal factors. External factors was the demand because of the monsoons and the expected demand was not there, and there was pressure on pricing continued. And for internal, there was additional shutdown because of monsoons, and that which resulted in incremental expenses affecting the bottom line. As regards to the project, the 6 million tonne expansion work that's at a good speed, and we are confident that we would be able to commission as per the expected lines either by end of third quarter or beginning of fourth quarter FY '26. If you look at the balance sheet, the gross debt as on 30th September was INR 4,664 crores as against INR 4,592 crores as on March. The cash balance during -- as on 30th September was INR 1,620 crores as against INR 2,011 crores. Net debt was INR 2,582 crores as against INR 3,044 crores. The net debt to EBITDA was 1.6x as against 1.29x, and the net debt to equity was 0.56 as against 0.48. So these are the major highlights. I'll be happy to answer your questions. Thank you.

[Operator Instructions] The first question is from the line of Shravan Shah from Dolat Capital.

Sir, first, on the other expenses for this quarter was how much onetime which we will not be seeing from third quarter onwards because that has impacted profitability a lot?

So there are 2 things which are there affecting which may be classified as onetime. So there would be an incremental onetime expenditures of about INR 30 crores, which is there -- which should not be there in the subsequent quarters. Also in the raw materials because of the shutdown, we had purchased certain clinker. And that clinker quantity should not be there, there could be some marginal clinker which we are -- we have secured for Central India in the month of October. Otherwise, there would be no requirement of any purchase clinker going forward. So these 2 could be the onetime expenditure which if we look at in terms of the value could be anything around INR 45 crores to INR 50 crores could be a onetime impact, which is there in this quarter.

Got it. Now, sir, if I look at from the grey cement perspective, so 1H, we have done close to 2.1% volume growth, and we are looking at 10% for this year. So now how we look at for full year, how much we are looking at?

So yes, we were looking at 10% overall and even now in H1, the growth is only nominal. Even though we are expecting a good demand, we would see that we should be closing anything around with a growth of about 6% to 7%.

And in terms of the realization for grey cement was actually Q-o-Q, if I'm just looking at the numbers, it is 0.8% up whereas for white it is 3% down. So for both the things, just wanted to understand because for other companies, we have seen 2% plus kind up Q-o-Q decline in realization. So is there anything -- even if you can specify the incentive that how much we have booked in this quarter, so that will help. And also how the prices are there in the October month now?

So as far as realization is concerned, one, since we had lower volumes, so we cut down sales in certain non-so remunerative areas which normally we could have done. So one, that was -- some volumes were cut in the low retention areas in some non-trade segments. because we did not have sufficient volume available, especially in the south also. And there has been a marginal increase in the premium product sale also. So all these factors has resulted that though the prices was under pressure, but on an average with the mix, we are not seeing any fall in the realization per ton.

And now how we look at the prices in the October month versus a 2Q average?

So Q2 average marginally up. But we have to really see this is -- I mean whatever some prices had increased, but not across, but in the North and all. So marginally up as compared to average of Q2 but we have to see how we are able to increase upon some more pricing in coming days post-Diwali maybe.

[Operator Instructions] We take the next question from the line of Amit Murarka from Axis Bank.

The while the one-off expenses are well explained in the quarter, like some of our other operating revenue was also there, I believe, which was on the higher side. Also, could you talk about like in South, you have an extended maintenance shutdown. So how has it improved your efficiency or what was that extended shutdown taken for?

So in case of the other operating expenses, we had got a onetime subsidy, which has come from Central India. So that subsidy is included in the onetime. So that -- it was realized and got in this quarter. So that is reflected.

Okay. And also the South extended shutdown, like could you just maybe talk a bit more about it as to what was it for and how that improved your efficiency or any cost metric?

See what has happened in the South, we had planned a shutdown of about 45 days, which also included some modification to be carried on so that we are able to -- we were saying that with the usage of AFR, the scale output was becoming -- had lowered. So we wanted to do certain modifications in the cyclone so that we are able to, a, maintain a high usage of AFR and have, in fact, improve -- get more clinker and maybe some additional clinker. So while doing so, and there was -- I mean the rain, there was a continuous rain which disrupted the working and the overall shutdown was for about 70 days. So because of that extended shutdown of about 25 days, we were forced to even be in the market and not lose the trade market, we had to even purchase lot of clinker to feed in over the market. So that -- so extended shutdown has been not been -- on the cost front, it is not something substantially higher. But it is -- that has resulted in some additional for the period, the clinker, which we had to buy from the market. So that resulted in loss of contribution, which is reflected, which could be a onetime. The incremental cost was not that high. That was only about INR 10 crores to INR 12 crores in this South plant.

Sure. And also lastly, the kcal costs have gone up on a Q-o-Q basis. Why would that be?

The kilo calorie cost has gone up during this quarter because one, the AFR cost has increased. So we are seeing that there is a fall in the fuel pricing, marginal fall. But the usage of AFR supply, the AFR cost has increased, whatever contracted quantities which we had. Now we have, again, renegotiating actually, AFR pricing is also linked to the fuel pricing. So what they do, they always link it to the fuel pricing. Now with the softening of fuel prices, we need to -- we are, again, renegotiating the gap to be maintained between the price of AFR versus fuel otherwise, it would not be economical to use AFR and make all the effort of using the AFR.

Okay. So it's mainly because of AFR costs going up, right? I mean the petcoke cost has gone down in the quarter?

Yes, yes, [indiscernible] the petcoke prices.

[Operator Instructions] The next question is from Pathanjali Srinivasan from Sundaram Mutual Fund.

I wanted to understand how much a unit cost of production can go down by in the next couple of quarters? Because I think from last quarter's base to this quarter, the number has gone up like quite a bit. So I think it's up almost INR 450 per tonne.

No. See, this quarter is the exception because of low volume. And so the cost has gone up when you use your inventory, the inventory cost is much higher because it contains an element of its costs. So as per the account so all that affects the overall cost of the goods. But if you compare with the normal, as we said, if we look at Q1 cost. So sequentially, the cost should be reducing I think with the fuel prices softening and all, we should see an impact of about INR 50 coming up in each of the remaining 2 quarters.

Okay. And then -- so Q1 FY '25, it was INR 4,800. So you're saying Q3, Q4, it can drop by INR 50 a tonne?

By about INR 100 a tonne.

Yes. So it can get you around INR 4,700 , is that correct?

Yes.

Okay. Sir, and any region wise, could you give us some color on what the demand was. Any region where demand was not as good as we expected or it was better than what we had expected during the quarter?

So demand. See, the demand slip was not so much felt in the Central India. There was a dip in demand definitely in the north and the southern part.

[Operator Instructions] The next question is from Ritesh Shah from Investec Capital.

A couple of questions. Sir, first is, any update on Toshali, specifically, I'm looking at the limestone long-term supply agreements that we were looking with the government, that's the first question. The second question is on the paint business.

So in paint business, what would you like to know? What was the question on the paint business?

So sir, where are we on the paints business right now, the revenue number and the EBITDA number for the quarter? And how are we looking at the ramp-up of the paints business? And the third is we have indicated a number of INR 150 to INR 200 per tonne of cost savings for '25, '26. Where are we on that journey? These are the 3 broader questions, sir.

Okay. So on the Toshali, we are -- actually, we recently had a meeting with the CM also, our MD and we had -- because of the change of that so whatever had been discussed earlier, I mean we had to really, in a way, start afresh. So we had a meeting and we had discussed with him and for a long-term arrangement which -- and we had a meeting with the Chief Secretary also. And I think we should get their proposal whatever we have submitted, their response sometime in the month of December. Also, so we're hopeful. So let's see, once we get that, we would be able to take a call going forward. So once long-term agreement -- see, one is that given indication cost with the whole thing, the finalization of this will definitely take some time. But at least it will help us in formulating our strategy for entering into these and at what time -- what is the time frame because as such, we are also -- I mean the only thing is that we want to have -- we want to form up the arrangement of limestone. So that's the opportunity for entry to east is there. But immediately, we are not going to start that we are clear until we will take a final call where to go for the next investment once we are about to complete the 6 million tonne expansion. So at this stage, the only thing is to conclude the tie-up for the limestone, which is for entry in the East, right? As far as the paint is concerned, yes, we are, we have done in the -- yes, Prashant?

Yes, our turnover in this quarter was INR 53 crores. And six months is INR 117 crores, and the EBITDA loss for the 6 months is INR 25 crores.

So that's the scale of paint business?

Yes. So this is the same. Now as we see October is the main season month, so as we are about the -- we have done a record sale in this month. And as we had a guideline that we should be closing the year somewhere between INR 250 crores to INR 300 crores as a top line, so we are confident that we would be in that region on the top line. Our expected loss for the whole year was around INR 40 crores. So we should be within that range only. And next year, we have a plan as a ramp-up. Next year, we have a plan of about INR 400 crores top line, INR 400 crores to INR 450 crores. And INR 600 crores by FY '27 where we should be having a breakeven.

And on the cost side?

So on the cost side, we had 3, 4 levers and the -- one was on the logistics. So we are working towards that. And I think we have already been able to factor in about INR 22 of logistics savings. And we expect that by March, our exit should be around INR 45 to INR 50 in case of logistics. We are already in advanced stage for certain more agreements for green power. And with the other lever, one was on increase in the AFR. So we are working towards that. I mean we are -- with the South, we would be able to further increase our AFR consumption. With the stabilization now of Panna, we should be able to start AFR consumption at Panna also. So these were the major 3 areas where we expected the cost savings. So I think that will gradually come up and should be visible. So I think if we look at an exit by FY '25, we should definitely have an exit of between to INR 60 INR 75 -- INR 60, which is a saving, which would have accrued, we should be seeing that saving in FY '26 and other savings will come in FY '26, which will pile up to INR 150 to INR 200.

[Operator Instructions] The next question is from the line of Navin Sahadeo from ICICI Securities.

Sir, before I ask a question, just a clarification on the previous question. EBITDA loss you said for the first half was INR 25 crores. So how much was that in Q2?

Pardon? I said the EBITDA loss for the business...

In Q2, it is INR 15 crores.

In Q2, it is INR 15 crores and first half?

H1 is INR 25 crores.

Full year, it will be around INR 40 crores?

About INR 40 crores.

Sir, my first question was with respect to the TSR rate. So I think previous quarter and as per your presentation, I'm saying that there was a decent jump towards end of '24 and further it increased in Q1. But in Q2, this has dropped sharply to 13%.

So see, you would see that Q2 being a maintenance period for all the kilns. So that has resulted in a sharp decline.

And secondly, Navin, there is 1 more factor. Actually, earlier, we were covering only 9 plants out of the 13. Now we have got the SBTi approval for covering all the 13 plants. So this data is actually revised for the 13 plants now. That is also a reason for the reduction. So all the new plants are at it now in this.

So Panna was actually not included. And if you look at AFR usage in Panna the Indian coal usage that is the plant which uses a least number -- least volume of AFR. So the thermal substitution is the minimum, and it has actually -- the journey has started now after the first -- I think at Panna was to ensure the full stabilization of the plant. And this quarter, the Panna kiln -- because see nowadays, yes, monsoon is there, but the monsoon -- the type, the typical type is that you have very excessive rain for a few number of days. That actually -- that is something which really disturbs the entire thing. So one -- as we say onetime loss, even in Panna, though declining was due in the month of October, from end September and which is now there. But this excessive rain has -- when the kiln was closer to the shutdown, it did have an effect on the kiln and we had to run the kiln at a very low output for almost a month. And also in between, we had to close kiln for 2 days, 1 day. So during the quarter, the availability of the kiln was also less. The kiln ran at normal output only for 1/3 of the month and that reduced output for balance period. So all that has also resulted -- affected the cost factor, the other things and all the summer substitution and everything got disrupted because of this [indiscernible] working during the quarter.

Fair point. Understood. My second question was on the new announcement on 2 coal block auctions, which you have won. So if you could give more details as to when are these mines you're expecting it to like come into production? What benefits that 1 can expect from this? Or is this more like securing...

No, no, it is a long-term benefit. It is going to give us substantial benefits going forward. So we have 2 -- won 2 coal blocks, one at Shahdol and one at Mahan, both in Madhya Pradesh. So Shahdol -- the first block is a smaller block, which is not -- that block, we have to work from the beginning. We have already done the -- vesting agreement has been done. And now we have the full team on board for the block, and we have initiated a plan to start work at the -- to do the mining lease -- the mining evaluation and everything, procurement of land so that we are able to -- though the time frame driven by the government for commissioning the block is by FY '29 but we are targeting at least 1 year or 15 months earlier. So that is the status for the block. The second block, which is already partially developed and which is a bigger block that we are in the process and within the month of November, we should be having the entire agreement with the government and we are already -- we have made out an action plan for what to be done. So immediately after the agreement, the site would be handed over to us and we should be able to start work at the site. And we feel that -- we are planning that maybe that time line will know once we go to the site, but we plan maybe in 30 months we are able to commission this block. This commissioning of these both the old blocks is going to, one, secure our fuel, especially for the Central India, which is dependent on linkage fuel and domestic fuel that is the old. And the fuel cost would be far, far cheaper but today, we are getting a linkage fuel at about INR 1.50 to INR 1.60 per 100 GCV -- NCV. This would come at a much lower around INR 1, max outer limit INR 1.10.

Interesting. So this can -- even if not now at least 3 years down the line...

Yes, yes. So many companies, I mean if we look at in the region, everybody has a whole block. So we are fairly at a disadvantage on that concern. So we will not be at a disadvantage as compared to the competition. And maybe if that fuel works out, we are also working out. We can also feed whether we can get some volumes to the northern plants also because it makes the business sense. So we have options. The central plant definitely where we have north line 2 is coming up where the major expansion is there. So if we secure fuel over there at a very good price.

Sorry, the last comment. You said second line north?

No, sorry. I said the second line of Panna where we are already doing 2 expansions are there. So that will have about -- that will become at a single location, the largest point for us, over 20,000 tonnes of clinker.

Understood. If I can just slip in one last question. What is the now the game plan for the paints business, J.K. Maxx? Because now we are already seeing advertisement of J.K Maxx Paints on Pan-India news channels as such. So if you could, first of all, just give us at how many touch points are there, how many dealers we have as of now? And what is the game plan so that you can get a broader perspective about the paint business? And does this mean that since the advertisements and these are coming up, there could be a further cost to it in terms of branding and et cetera?

No. So I will answer the second question first. The branding cost and all as we said, it's part of INR 600 -- 600 crores, which we have committed to the paints business. That is even -- and we would like the paint business, so there is no further commitment beyond INR 600 crores. And the total plan of -- from a journey of close to INR 300 crores this fiscal and to INR 600 crores by FY '27 is all part of this INR 600 crores. And -- where by which time the business should become self-sufficient. So that is the plan. For any further clarification, you let me know.

[Operator Instructions] We'll take the next question from the line of Abhishek Poddar from HDFC Mutual Fund.

Just 1 regarding the white cement, we have seen realization falling in the last few quarters. How is the market there? Can you talk about the competitive landscape there? How the margins are doing and where do you see the bottoming out?

The paint manufacturers, especially Asian Paint continues to be very aggressive as far as Putty is concerned. And the deepen realization is only on account of the Putty -- realization dip in Putty. So we -- though there has been some correction, I think -- I mean we were thinking earlier that in last year March that it has already bottomed out. But also onslaught by Asian continues. However, I mean, after recent -- in July after announcing some increase in the paint pricing they also increased some pricing, they agree, but still some hidden discounts and other things do continue. We feel that this may have bottomed out, but it continues -- the Putty field continues to be very, very competitive. And Asian Paint with all that they have already taken the #1 position in the Putty field. They have become the largest player of though they don't have any production facilities but they are still the largest seller of Putty with the market share of close to about 30% as against 24% for Birla and 22% for us. So that is the position for the Putty. We are continuing -- I mean there is a growth for us year-on-year. But we are not able to match the growth of -- which is there by Asian Paint, even -- not even Ultratech or nobody, none of the other Putty players are -- even some paint manufacturers, though they are growing, but they are not growing at the pace which Asian Paint is going in terms of Putty.

Understood. This is very helpful. Sir, just one question on more. How do you think volumes here? Like it is 1.7% last year. Should we think about growth this year? And if you can give some guidance at how the industry is growing in this?

So if we look at the Putty should be growing at about 8% to 9% -- should go about 8% to 9% this year. And we are trying to work when we see that we grow at least 5%, though our internal target is definitely much higher. But as of what it looks to anything between 5% to 6% should be our growth numbers.

Understood. And just 1 last question. On the grey cement side, are you already seeing some green shoots in demand? If you can talk about how the season is -- October is and how do you expect post...

October is definitely much better than what the September is. But some of the government spending, I mean, that has to really come in full fledge and I think that should come from November onwards.

The next question is from Raghav Malik from Jefferies.

I just wanted to check on the CapEx target for the year. Is it -- are you still retaining the same target of INR 1,800 crores, INR 2,000 crores given that it's not INR 500-odd crores in the first half?

Projects are on the stream, and we are maintaining the CapEx targets.

The next question is from Prateek Kumar from Jefferies.

My first question is on your profitability, you said that realizations benefited from maneuvering of markets during this quarter. So next quarter, it could normalize like versus industry peers, your realization trend versus other peers?

So next quarter, it should match with the industry, but suppose the industry shows a growth of 3% over the quarter and there is no debt, so that will not be there. We have to then compare the situation vis à vis first quarter and where the industry is standing vis à vis first quarter in this quarter in Q3, and we'll be at par with that.

Okay. So we'll have a lower realization growth, but will that be offset by better cost performance Q-on-Q?

There will be definite cost performance, there will be definitely improvement in volumes. But now with increased volumes, we will be catering to all the segments because on our long term, we cannot -- on medium or long term, we cannot afford to lose any segments if we are to maintain the volume growth. In Q2, we do not have the volume because of the maintenance.

One of the large peers talked about realization improvement to the tune of 200 per tonne is going to EBITDA per tonne. So is that kind of improvement, which we should also look at?

We will be at part with the industry. One, this realization, it will not be that the top players show that realization and we don't show it. If the prices improve, we will be at par, we will not be behind any producer.

And then last question on October volumes. So because of let's say, timing changes, it will still be a decline year-on-year for the volumes for the month?

No. Actually, I think we should be showing a growth year-on-year.

The next question is from the line of Rajesh Ravi from HDFC Securities.

First question pertains to your CapEx. You already spent INR 1,400 crores on consol basis. So -- and you're saying that INR 2,000 crores is the annual target for April '25. So are we looking at second half to be so well on the CapEx?

No. We have spent INR 750 crores till now out of the target of INR 1,800 crores, INR 1,900 crores.

But on the half yearly balance sheet cash flow statement, consol cash flow, it is INR 1,400, I was referring to that number.

Okay. But I think we can clarify the number. And we'll checkup because the number -- what is included, we will clarify that because the actual expenditure is around INR 750 crores, INR 800 crores -- INR 750 crores which is the CapEx. What any other thing is -- I mean in the cash flow, it is showing. But -- and all other expenditure is as per the plan because there, there is nothing new has happened. So we still continue to -- on the project is as per the schedule. So we continue to spend on the project in the same manner. So I don't think so -- and whatever other expenditure, which we have done on the normal CapEx and all, they are special, there's nothing.

Okay. And second, on the volume growth, see first half, your grey volume is flattish and white volume we have seen 5% decline. We are maintaining 10% volume growth for the grey business for full year. So are you confident in the second half, we'll be able to deliver 20% volume growth in the grey cement business and similarly for white and Putty, I suppose you've guided 5% growth against 5% decline. So second half, a 10% growth, is it -- do you see green shoots good enough to support that volume numbers?

So in grey, as I said earlier, that our numbers, we should be anything between 6% to 7%. We are talking about anything be it -- that's the numbers. And in case of white, there is no negative growth. I mean the white -- if you look at the volume numbers, when it is not -- I mean the total number, it is year-on-year, its -- sales is -- it's about 3% growth.

6 months -- I am referring to 6-month numbers.

Even 6 months it is higher. Yes, we have a combined number of 786,000 tonnes, as against 761,000 tons 6 months last year. And cash flow also, I am looking the consolidated cash outflow on the CapEx is INR 745 crores. Where did you get the number of INR 1,400 crores.

I'll check my number.

Yes. You please check both the numbers, right? Business volume, this everything.

Okay. If I could just chip in 1 last question. You mentioned that you are looking at INR 50 to INR 60 savings through logistics and another similar amount of savings you were looking for the inching up of green power say, right?

Yes, yes. On use of AF, use of alternate fuel.

Alternate fuel. So basically FY '25 and '26, total INR 150-odd you're looking over the next 2 years, '25, '26, so it will be equally split between both the year, the savings?

What I said, we should see an exit of about INR 60 in March.

Okay. On cumulative INR 60 in this year?

So -- yes. So we should see a broadly INR 60 exiting sometime in March and maybe balance we should see in FY '26.

INR 90-odd you're looking at for FY '26?

Yes, yes.

The next question is from the line of Shravan Shah from Dolat Capital.

Sir, just couple of data points. So blended mix for this quarter and roadrail mix was how much?

Yes. The railroad was -- it was -- rail was only 9%.

Okay. And blender mix?

70%.

Okay. And sir, about this quarter, how much was the incentive that we have booked?

It is INR 58 crores.

Okay. And for all the 6 million tonne expansion. So previously, we said that December '25, next December, we will be starting. So that time line remains intact? Or any update there?

By December '25, so 1st quarter in the last quarter. End of third quarter, beginning of fourth quarter should be the commissioning.

Okay. Got it. And also, is it possible to share the fuel mix for this quarter? How much was the petcoke, imported coal and...

Yes. By heat petcoke was around 75%. And balance is the alternate fuel and the imported.

Got it. And sir, is it fair to say that this quarter, let's say, at a consol level, if we look at 11.1% kind of EBITDA margin. So the white cement or, let's say, whatever way we can look at the grey margin would be much, much lower and white is still higher than this blended average?

You have to arrive at that number yourself. We are not sharing as we...

No, directionally, just trying to understand because as you mentioned that the Putty, significant competition is there. So just trying to see whether that margin also has also come off differently there also.

So I would -- what I would say, yes, when the grey business margins would be marginally lower in this quarter as compared to the white.

All the best and Happy Diwali, sir.

Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Vaibhav Agarwal for closing comments. Over to you, sir.

Yes. Thank you. On behalf of PhillipCapital India Private Limited, we thank the participants for joining the call, and thank you very much, sir, for giving us the opportunity to host the call. Thank you. Michelle, you may now conclude the call. And we wish you all a very Happy Diwali, and a very Happy Dhanteras.

Thank you, everyone, for joining and wish you a Happy Dhanteras and Happy Diwali.

Thank you.

Ladies and gentlemen, on behalf of PhillipCapital India Private Limited, that concludes this conference. We thank you for joining us, and you may now disconnect your lines.