Jammu Pigments Limited (GPIL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Godawari Power Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Lahoti from Emkay Global. Thank you, and over to you, sir.

Thanks, Sagar. Good afternoon, everyone, and welcome to Godawari Power Conference Call to discuss the acquisition of Jammu Pigments, which is a metals recycling company. We have with us today Mr. B. L. Agrawal, Chairman and MD of Godawari Power; Vinay Agrawal; Dinesh Gandhi, Executive Director of Godawari Power; and they are joined by Ramesh Agarwal, who is Managing Director of Jammu Pigments. I would also highlight that a presentation was uploaded on the exchanges on 7th of December which could be used as reference material for this call. I would like to now hand over to the management for opening remarks.

Thank you, Amit. Good afternoon, ladies and gentlemen. Thank you for joining the call to discuss the acquisition of Jammu Pigments Limited. The press release on acquisition as well as investor presentation has already been uploaded on stock exchange website as well as on the website of Godawari Power & Ispat Limited. I believe that you have had a chance to review the same. I'll first give you a brief details about the acquisition, post which we will have question-answer session. As you're all aware, GPIL is a fully integrated steel company that operate across with entire steel value chain, beginning from iron ore mining to -- from two captive iron ore mines to production of iron ore pellet and value-added steel products. As a part of diversification into nonferrous metal, GPIL has recently entered into a business of recycling of nonferrous metals by signing a definitive agreement to acquire 51% stake in Jammu Pigments Limited at a cost of INR 255 crores on post money valuation of INR 500 crores approximately on fully diluted basis. GPIL has already completed acquisition of 49% stake in JPL, and balance is to be acquired on compliance of certain conditions precedent to the transaction. Out of INR 255 crores of the acquisition cost, GPIL has infused INR 175 crores for acquiring 35% stake in JPL by way of issue of compulsory convertible preference shares of INR 297 each. 1 CCPS is convertible into 1 equity shares of INR 10 each at a premium of INR 287 per share. Further, GPIL has acquired 14% stake from JPL promoters for a cost of INR 79.52 crores and balance 2% shall be acquired by JPL after compliance of condition precedents. Accordingly, GPIL will have 51% stake in the company and balance will continue to be held by the existing promoters. Out of INR 175 crores of funds infused in to the JPL, INR 75 crores is used for acquiring remaining stake of promoters held in various group companies, associate companies, partnership firms and proprietorship firms. And the balance amount will be used for working capital and future growth plans of the company. The business in proprietorship and partnership firms is transferred to JPL and its subsidiaries on location and synergy basis. JPL will hold 100% stake in all subsidiary companies either directly or indirectly through any of its subsidiary companies. Coming on the business of JPL. JPL is a pioneer in nonferrous metal recycling business, refining and transforming waste to wealth. It has plant spread across Kathua in Jammu and Kashmir and Kota in Rajasthan. It is renowned for its impeccable quality standards in the field of processing and recycling and refining of nonferrous metal. JPL is engaged in recycling of nonferrous metal business with operations covering lead acid batteries, other secondary lead waste material and hazardous industrial waste of nonferrous metals. The company and its subsidiaries are also equipped to process complex mixture of hazardous industrial waste to recover lead, zinc, silver, tin, copper, cadmium, cobalt, antimony, et cetera. JPL's advanced technical expertize enable it to efficiently extract fresh material from waste material, ensuring highly cost-effective operations. It has demonstrated strong financial performance in past with last 3-year CAGR revenue of 28%, EBITDA growth of 38% and PAT growth of 48%. It has a flexible and integrated business model with multiple industrial waste and scrap being sourced across the globe, and it has adopted innovative process, hydro, pyro and other metallurgical processes to recover the material. It has diversified revenue stream as it recycles various metals like lead, copper zinc, et cetera. JPL has also its own fleet of 90 vehicles which is IBA and hazardous waste approved for transportation of raw material and finished products. JPL also enjoys certain tax benefits under J&K industrial policy of state government as well as central government and also engaged in commodity hedging on LME to mitigate the price fluctuation risk. The rationale for acquiring JPL is diversification into nonferrous metal business through recycling of metals, which is low CapEx, high asset turn business. Recycling is a futuristic and emerging business. India being not importer of nonferrous metals. We believe that green and sustainable metal is future, which will give boost to the recycling of nonferrous metals in coming years. There will be also synergy benefits in the form of recycling of zinc residue waste left over in the process of galvanizing products done, undertaken by GPIL at its plant in Raipur. With introduction of BWMR 2022, this recycling industry is expected to see significant boost with reduction in informal sector recycling. JPL has a capacity of almost about 196,000 tonnes as per environmental approvals. The actual production capacity of plant depends on the input material and therefore, present actual volumes are lower. The company is working to optimize and improve the capacity utilization of plant over the period of time. JPL is also in process of expanding the existing recycling capacity and the earmark of CapEx of INR 200 crores for the same. In conclusion, I want to highlight the fact that GPIL's strategic acquisition of majority stake in JPL is aligned with its ESG objective, reinforcing commitments to portfolio diversification and environmental sustainability. This step enhances GPIL's asset base, reduces risk, offers new market opportunity, reflecting company's focus on responsible growth. We are confident this acquisition will foster sustained growth and generate substantial value for all stakeholders. With this, I conclude my opening remarks, and we can now open the floor for question-answer.

[Operator Instructions] Our first question comes from Vikash Singh from PhillipCapital.

Sir, just wanted to understand we already have a well-defined CapEx program for next 3, 4 years in the ferrous side, still we went into an unchartered territory. So what was the thought process behind it? And how big we would like to make this nonferrous business in future?

See, as I said in my opening remark, recycling is a future. We are already into metal business. We are doing ferrous metal through mining. Now nonferrous metal, you are aware that it is very difficult to get the mine and venture into that kind of production. So recycling is a future. There is a limited amount of material available on the earth and recycling of nonferrous metal has to go a long way. Even a lot of industrial waste is available globally, which can be processed. And therefore, we thought that this is a lucrative opportunity to venture into and diversify the business of the company. So far as the expansion plan of GPIL is concerned, those expansion plans are substantially higher. What we are doing presently out of this acquisition is we have invested INR 255 crores and that is hardly about 7%, 8% of my total net worth and about 25% of my annual profit. So there is -- investment is a smaller investment as compared to the size of the balance sheet, the cash flow of the company and future cash flow requirement. We thought it's proper that it is better to diversify the revenue stream of the company and venture into this business. This is already a profit-making company for last couple of years, the company already has a turnover of more than INR 1,000 crores, EBITDA of INR 80 crores, INR 90 crores. So this fits within the overall objective of GPIL. And we believe that this investment and the acquisition will go in a long way in creating shareholders value.

Understood. Sir, given we don't have much experience in this business, though we have the 51% economic interest, would we will be running this business or the existing management will continue to run the business? And gradually, we will be taking control. So how that thing goes ahead?

Yes, you are right. The business will continue to be run by Ramesh Agarwal-ji, the present MD of the company, who is also present in this call. It will be a joint management hereon. And both of us will continue to expand and grow the business of the company. Ramesh Agarwal-ji has huge experience in this industry. They have been processing the kind of material which nobody else is doing in India and maybe globally, I don't know. And he has a lot of experience. We have an understanding with him. He will continue as Managing Director for a period of 5 years, support and grow the business of the company. And our team will also be there, and we have already joined hands with them in running the day-to-day operations of the company. And despite this, we have right of first refusal for 49% stake he is held -- he is having in the company.

Yes. Yes. I was coming to that, that do we have the option to purchase that the remaining...

Yes, yes, yes, we have a first refusal...

So is there any milestone or the valuation would be defined whenever you decided to purchase the remaining 49%?

No, the timeline is not decided. Valuation is not decided. It will be valued at the particular point of time as and when he decides to offer the share.

Understood. And sir, this INR 200 crores CapEx in JPL. So the money which we are investing, some part would go into this CapEx or this would be entirely funded through the debt taken by the JPL and the internal accrual? So how that goes ahead?

See, as I said in my opening remarks, out of INR 255 crores we have paid for acquisition of 51%, INR 175 crores we have infused in the company. So out of this INR 175 crores, INR 75 crores JPL is paying to the promoters for acquiring the remaining stake in all subsidiary companies as well as proprietary and partnership firms. So that whatever business which was there under the part of Mittal Group is under the one umbrella of JPL. And INR 100 crores will be used for working capital and growth plans of JPL, plus internal accrual of JPL we'll use for expansion plan. And whatever is debt required, we'll raise the appropriate amount of debt in due course of time.

Understood. Sir, just one last question on the hedging part, since we are dealing with the high-value items like zinc and lead. Basically, while extracting from the basically scrap, you probably would not know the exact quantum of the lead and zinc which probably would be extractable. So how did you hedge basically in a forward context in the LME so that you actually fixes up the margin and don't run into a risk of losing money?

Ramesh-ji, sir [Foreign Language]?

Sorry to interrupt sir, we are not able to hear you clearly.

Yes, yes. See, we are the physical hedger. And whatever -- whenever we purchase any material, we do know how much is the lead content, how much is the content of the metal in the purchase. So immediately, we hedge it. And nothing we keep unhedged on our account. 100% hedging, keeping our margin intact.

Understood, sir. Understood. So that answers most of my questions. I'll come back in the queue, if I have further questions.

[Operator Instructions] The next question comes from Manav Gogia from YES Securities India Limited.

Dinesh-ji, wanted to know, like you have mentioned that currently the utilization rates are quite less in terms of output. So also JPL is going for capacity expansion. So can you just give me a brief about what are the reasons behind the lower production volumes? And what bottlenecks are the company -- is the company currently facing?

No, see Manav, it is like this, the capacities which we have given in our presentation is based on the whatever approvals they have. Now we are doing a detailed diligence on that and trying to find out the bottlenecks that wherever there are bottlenecks to improve the capacity utilization, the CapEx will be done in that. And number two, the production in this plant -- [Foreign Language]

I'll explain. I'll explain.

[Foreign Language]

See basically, we are the recycler, and the machine capacity is based on the input, not on the output. And the output depends on the metal available in the input. So sometimes TCs remain same, how we are buying content into LME minus treatment charges. So we are getting the treatment charges fully and rather being low toxicity, we are getting higher treatment done. So it depends on the input what we are using out. So our capacities, we are running all the plants at full capacity, not at a lower capacity. The thing is production is not there because the input is containing lower content of the metal. And volume of the recycling is going to increase every day because as Mr. Dinesh mentioned in the opening remarks that [Technical Difficulty] only by recycling. And recycling generation is too high but now it is not an issue for [Technical Difficulty].

So sir, could you repeat the last part? I mean, your voice broke down quite a bit over there. I couldn't get you.

I mentioned that the output depends always on the input quality material, means how much content in the input. Suppose we purchase higher input material, then production capacity will be full because capacity is based on the highest possible input. And our treatments charges -- how we are buying that content into LME minus treatment charges. So treatment charge is always intact with us. And availability is ample because the generation is increasing day by day. Consumption is increasing, that's why recycling is increasing.

See, Manav, as Ramesh-ji has explained, the output depends on the quality of input material. Because input material, you are feeding is 100 tonne into a kiln furnace and say lead or the zinc is 20%. Then the production will be 20%, but your input capacity is 100. So therefore, the utilization -- it looks quite low utilization, but all plants are operating at full capacity.

Sure, sure. That was very well explained. Sir, just one more thing. Any debottlenecking CapEx taken will be up and above the INR 200 crores? Or is it already accounted for in the INR 200 crores?

We have presently earmarked INR 200 crores. We are studying it, the entire operations of the company. And wherever we feel that there is a debottlenecking required, that much of CapEx will be done.

Okay. So any idea on what that number could be? Or are we still in the early stages of...?

We are in the early stage. We are still in this early stage.

Manav, sir, you have any other follow-up questions?

Yes, I wanted to know, like for the debottleneck activities, the CapEx that you're going to be incurring, are we still in early stages of determining what the CapEx amount is going to be? Or is there any ballpark figure that the company has in mind?

No. But as I said, we have earmarked INR 200 crores for the CapEx. We are trying to find out wherever there is a debottlenecking, the decision will be taken. And if some amount is to be tweaked plus/minus, then we'll do it as required in the business.

Sure, sure.

But the amount is not yet determined.

Next question comes from Amit Lahoti from Emkay Global.

So scrap procurement is a critical process in recycling business. So if you can give a breakup in terms of how much scrap you procure from OEMs? How much you import? And how much from the unorganized players in the market. If any percentage breakup that you could give will be helpful.

Ramesh-ji?

Our most of the raw materials, 95% is from smelters and primary functions of the metal because in the [Technical Difficulty] but in the ore there is a small quantity of cadmium, antimony, copper, nickel, cobalt, many metals. So that left out things we are buying and we are processing and first time we have done it for Hindustan Zinc in 2013. And we were processing almost 80,000 tonnes for them. And similarly, another smelter is also doing the same thing, and cobalt smelters is also doing the same thing. So every smelter generates this type of things because they only extract primary metal, rest of the metal either they'll use or they can extract from alkaline heat or something like that.

Okay. And my second question is how much EBITDA per kg the business is generating?

[Technical Difficulty].

Sir, I'm sorry, but I couldn't hear clearly, if you can say it again.

We have a fixed formula to determine the profit around 10% of the EBITDA.

Okay. 10% of the EBITDA. Okay, fair enough. And if I could squeeze in one more question. Like could you talk about GST incentive available to the business?

GST available in the Jammu and Kashmir, yes it is available. Any amount [Technical Difficulty]

Really sorry to interrupt, Ramesh sir, your voice is coming very feeble. If you are using the speaker mode, may I request to use the handset mode, please?

Yes. Normally, whatever GST we are paying in the cash, we are getting a refund from government, and interest subvention of 5% on the working capital and electricity is very cheap, INR 3.80 per unit in the Jammu and Kashmir. Like that many benefits available in Jammu and Kashmir.

Sir, can you give some quantification in terms of amount in crores, how much GST credit you got, for example, in FY '24, if you can give that number.

'24 in Jammu Pigments, we have major 2, 3 -- means almost 50% turnover we have in Jammu and Kashmir. So quantum is around INR 35 crores.

[Operator Instructions] The next question comes from Jash from Dalal & Broacha.

Sir, we mentioned that INR 200 crores will be the CapEx. So any further CapEx requirements for any of the plants at Jammu Pigments?

No. As of now, we have not worked out. Whatever we have planned, we have given in our presentation. And we are in the process of identifying that what could be the bottlenecks in terms of increasing the capacity utilization, to that extent, we will make some changes in the CapEx plan going forward.

Okay. And this investment does not hinder any of our organic CapEx plans, right?

Yes, yes. It doesn't hinder our organic growth plans.

And on the organic front sir, so where are we on the mining approval and the steel approval -- steel plant approval?

We will take those questions separately. This call is exclusively to discuss Jammu Pigments only.

[Operator Instructions] The next question comes from Aditya Welekar from Axis Securities.

Just one question from my side. If you can quantify the synergy by acquisition of this Jammu Pigments to GPIL.

No, in terms of what, quantification?

Is there any synergy by this acquisition of Jammu Pigments?

No, no. That would not be more than INR 150 crores of the turnover of Jammu Pigments.

[Operator Instructions] The next question comes from Nilesh Gandhi from Metadesign.

Congratulations, sir, because it would -- congratulations on identifying a very rosy and sunrise sector of recyclability. As an civil architect, I think it is the best thing to be done, and recycling is like gold of the future. Coming to that, just wanted to understand how did you arrive at the valuation of INR 500 crores? And if you could just -- I heard INR 1,000 crores was turnover for the Pigments with an EBITDA of INR 90 crores. Is that correct? Or if you would just throw some light as to how did you arrive at this INR 500 crore valuation?

No, INR 500 crores valuation, there is no formula. This is with mutual discussion and negotiation.

Okay. But there would be some guidelines as to how many times EBITDA or how many times turnover. What is the turnover of Pigments?

Jammu Pigments is close to about INR 1,000 crores.

INR 1,000 crores turnover, but if the turnover is INR 1,000 crores and EBITDA is INR 90 crores, so it is almost a 10% EBITDA.

Yes. 8%, 9% EBITDA margin. 8%, 9% EBITDA margin.

And that would add so -- to our like GPIL balance sheet...

No, no. If you want to work out on the PE basis, it is closer to 14, 15x PE.

Okay. Okay. So on our top line, it adds, say, around -- will it add INR 500 crores to GPIL's top line?

No, once it becomes 51%, the entire turnover will be added to GPIL turnover. EBITDA will be added to GPIL EBITDA. And after profit, there will be a minority interest calculation. So that's how the consolidation is done as per IndAS accounting norm.

Okay. Okay. [Foreign Language] in this business, entry barrier [Foreign Language] is it -- how easy it is for competition-wise, it is good that we have entered now. But from the environmental norms, permissions, [Foreign Language], how are we placed? How is Pigments placed? And how difficult it is for the competition to enter into this business?

Ramesh-ji, [Foreign Language].

All the permissions and approvals are in place. And as far as entrance of [Technical Difficulty] is very difficult because we need to process all the metals, all metals. Such with a huge capacity, the approval, it will be not 1 year, 2 years it's a big 5, 6 years. [Foreign Language] almost 7 years to reach [Technical Difficulty] they started 5,000 tonnes and at our level, we started feeding every part in the facility, it took 8 years to build the [Technical Difficulty].

Sorry to interrupt. Sir, we were losing your audio once again.

Yes, it's a long journey because we started in 2013 so 5,000 tonnes capacity in Hindustan Zinc and we all were at a war level and it took 8 years to build 80,000 tonnes capacity. So like that -- and not only it's 1 metal, it is 7, 8 metals to be extracted separately, and we need to use hydro, pyro, bleaching, solvent extraction when it comes to this many, many process are involved. Technology is also a bottleneck, big bottleneck because all the processes are developed by us. Some are own or some are built as per requirement.

[Foreign Language] first-generation entrepreneur, sir?

Yes, sir. Yes.

[Foreign Language] are there any patents possibility?

Yes, we filed 2, 3 patents, and we are likely to get approval very soon.

[Operator Instructions] The next question comes from Sunil Jain from Nirmal Bang Securities Private Limited.

Sir, my question relates to source of raw material, where from your sourcing domestic, international and even if domestic then who are all supplier, means you collect it from traders or how you collect it?

No, I got it. We are sourcing the material, mostly from the smelter of the metals, all smelters, domestically as well as international also.

Smelter in the sense lead...

Yes, lead, zinc, copper, all the smelters.

So the supplier will be Hindustan Zinc for you?

Hindustan Zinc and like other smelters.

Okay. Sir, what is the composition domestic and international?

Composition, right now, it is almost 50-50.

Okay. So when it is coming from Hindustan Zinc, then the raw material will be of a standard quality, not very far from any particular quality?

No, it is a residue. Normally always the raw material is fixed, means ore is fixed for every smelter. So that composition continues the same almost. But differs from smelter to smelter.

Okay. And a second question, Dinesh-ji, for you, whether we will be consolidating it as a JV or it will be a line-by-line consolidation.

No, it will be consolidated as JV, in the sense subsidiary company.

JV in the sense, you will be consolidating just profit or...

No, no, no. We will be consolidating line by line item in subsidiary company, because this will be subsidiary of GPIL, not in December quarter but from March quarter onwards, this will be consolidated line to line in a subsidiary company.

The next question comes from [ Jinesh Shah ], an individual investor.

Many, many congratulations to GPIL team. Sir, I could see from the presentation, the EBITDA is close to around 7%. So is there any range we have set to increase the EBITDA from 7% to, let's say, 10% to 12%? And what are those process improvements we are planning for?

Sir, process improvement, [Foreign Language] year-to-year.

The second question is on the capacity addition. Although we have mentioned from category-wise, what is the capacity we are going to add but [Foreign Language] and why this timeline is for 2 years? I mean this also I want to understand why we cannot complete this capacity expansion in 12 to 14 months from now?

[Foreign Language]

[Foreign Language] brownfield expansion [Foreign Language] greenfield expansion, [Foreign Language]?

[Foreign Language] brownfield [Foreign Language] target timeline is FY '27. So [Foreign Language]

[Foreign Language]?

[Foreign Language]

Okay. And if you are -- although the management has said that the current capacity utilization is full, but what we can achieve the maximum revenue from the current...

[Foreign Language] Ramesh-ji, [Foreign Language] current capacity [Foreign Language] plus JPL 2 [Foreign Language]?

Sir, at present Jammu Pigments turnover is INR 1,200 crores, and we are adding 1 more unit in next 2, 3 months. After that, our volume for per annum will increase around INR 400 crores. So we are sure that it will certainly go by INR 1,700 crores and bottom line will also be around INR 125 crores EBITDA. And as you mentioned the priority wise, in the priority wise, it's not like copper, zinc, lead plant, it's like hydro, pyro and electrolysis like this plant. So initially, we'll proposing because pyro, because pyro is short now. After that, we'll be going for hydro plant and like that. So it's like a sweet making machine. So [Foreign Language] chemical process.

[Operator Instructions] The next question comes from [ Sri Krishna Agarwal ], an individual investor.

Just wanted to know this INR 200 crore capacity -- the CapEx you're making only in Jammu and Kashmir or to your Rajasthan unit also? Because you have mentioned in the Page 8 of your presentation that you will be getting the incentives from the Jammu and Kashmir government. So is this INR 200 crores fully eligible for all the incentives? This is my first question. Next question is regarding the -- your capacity utilization, you have mentioned that the bottleneck is that the capacity is as per the input, not as per the output. So my question is then when we are getting the raw material from the standards of suppliers like Hindustan Zinc's and all these things. So others must be getting from that source also. So why our revenue is much lesser than other our competition, whereas their capacity is lesser than us, like Pondy, they have 159,000 tonnes and the revenue is INR 1,616 crores, whereas our capacity is 196,572 tonnes whereas -- and the revenue is INR 1,174 crores only. So that is my question.

I will reply that we are planning for Rajasthan investment also. In Rajasthan also certain subsidies are available like Dinesh sir mentioned and the GST refund. And as regards to Pondy and our competition, they are totally different line. Although one common line is the lead recycling. Apart from that, we are recycling all the metals and whereas Pondy is recycling only lead and that too from only batteries 90% and our battery raw material is hardly 5%. 95% is the industrial residual waste. So you can compare apple to apple not by this.

Okay. Okay. That was mentioned in the presentation, that's why I have asked it. So I have one suggestion for the company that Gravita is coming up with the QIP of INR 2,200 and the Pondy is coming for INR 980. So they have a good plan to raise the fund. So my suggestion is that GPIL is a good banner under which we can raise further funds for the further expansion of the company, and it will go because GPIL is a net debt free company and that I hope that they will maintain that status.

So you're right. But we'll elevate -- we'll take your suggestion and we'll deliberate on this whether to fund -- raise fund it because we can't raise funds from the market at JPL level, we have to raise funds and we have to raise it GPIL level. So we'll deliberate on this issue.

[Operator Instructions] The next follow-up question comes from Manav Gogia from YES Securities India Limited.

Sir, one question is on the ESG front. Usually, lead acid battery recycling is a dangerous process, exposing the employee's health to several diseases. Just wanted to know what precautions are taken on that front for the employees? And second, that are there any additional approvals, which the company requires when it comes to processing lead as a scrap material? So can you just give me a brief on that?

[Technical Difficulty]

[Foreign Language]

There is a SOP, standard operating procedure led down by Central Pollution Control Board. So accordingly, we have to provide everything to the employee, then only they give the clearance on renewal and import permission for raw material and run the unit. So all these are in place. And every 3 months, we need to test, blood test, lead content test, everything.

And sir, sir, like these tests take place on a regular basis? Or is it like...

They are on a regular basis. Every quarter there is a -- it's prescribed already in the operating procedure, there is a standard procedure, every 6 months, what to do, every 3 months what to do. Who are exposure to the lead, they are every few months, who are in office they are once a year like that.

Okay, okay. Sir, just one question. I think this was already asked earlier. This was on the EBITDA margin front, right? Currently, we are doing roughly 7%. And as per your comments, you are targeting a 10% and then a step by step growth towards doubling from out over here. Is that a fair assumption?

Doubling is not fair. I think, 7%, 8% to 10% is correct. We're focusing on 10% EBITDA, that is correct, by improving the process, by improving the -- our knowledge like this.

Sure. And sir, barring the scrap procurement, what would be the major cost centers which this business model would incur?

Basic cost is fuel and electricity.

Yes, certain chemicals.

Okay. And the chemical requirement is done like domestically, right?

Yes, yes, domestically. Domestically.

[Operator Instructions] The next question comes from Nilesh Gandhi from Metadesign.

Just one follow-up I wanted to have, which was -- like I was just looking at -- I understand that we are -- but still into the recycling business [Foreign Language] so is there a possibility that we graduate because ultimately, it's a recycling business. [Foreign Language] is there a chance that we reach to that levels of higher margins because this is standard manufacturing process, 10% EBITDA and is there a possibility there?

[Foreign Language]

Sir, more than 50%, 60% margin [Foreign Language] Eco Echo [Foreign Language] I don't know what this, but [Foreign Language]...

[Foreign Language]

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

Ladies and gentlemen, thank you for joining this call. We hope that we have been to answer all your questions. If you still have some questions [Technical Difficulty] you can reach out to our Investor Relations team, and we'll be happy to answer the same. Thank you very much, and with this we conclude this call. Thank you very much. Thank you, everyone.

Thank you. Thank you. Thank you, everyone.

Thank you. Thank you, everyone. On behalf of Godawari Power, that concludes this conference. Thank you for joining us. You may now disconnect your lines.