Jubilant Ingrevia Limited (JUBLINGREA) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Q3 FY '22 Earnings Conference Call of Jubilant Ingrevia Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Pavleen Singh Taneja, Associate Director, Investor Relations, Jubilant Ingrevia Limited. Thank you, and over to you, sir.

Thank you. Good evening, everyone. Thank you for being with us on our quarter 3 and 9 months FY '22 Earnings Conference Call of Jubilant Ingrevia Limited. I would like to remind you that some of the statements made on the call today could be forward-looking in nature, and a detailed disclaimer in this regard has been included in the press release and results presentation that has been shared on our website. On the call today, we have Mr. Shyam Bhartia, Chairman; Mr. Hari Bhartia, Co-Chairman; Mr. Rajesh Srivastava, CEO and Managing Director; Mr. Prakash Chandra Bisht, CFO, Jubilant Ingrevia Limited; and Mr. Arvind Chokhany, Group CFO. I now invite Mr. Shyam Bhartia to share his comments. Over to you, sir.

Thank you, Pavleen. Good evening, everyone. Welcome to the Q3 FY '22 earnings conference call. We are pleased to announce that in Q3 FY '22, we continue to witness significant growth in our revenue and EBITDA. We are also delighted to declare an interim dividend of INR 2.50 per equity share of INR 1 each of the company amounting to INR 39.8 crores. In our Specialty Chemicals segment, we maintained strong growth across the products, led by growing demand from pharmaceuticals and nutrition customers. In Nutrition & Health Solutions, the demand of the vitamin B3 improved, and we placed higher volumes with improved realizations. In Life Science Chemicals segment, we continued the strong performance with healthy demand in domestic as well as in EU market. Our business team worked closely with the customers and ensured that most of the increase in input cost is passed on and our supply chain team ensured and timely delivery. We are pleased to inform that in Dow Jones Sustainability Index environmental and social governance ESG assessment is called 81 percentile in the global chemical industry and have been ranked among the top 20 chemical companies globally and amongst the top 3 companies in India. We remain excited with the growth opportunities in our businesses and are fully committed to realize that. Our strong new product pipeline developed by our in-house R&D, our technical expertise into various chemistry platforms and long-standing relationship with global pharmaceutical and agrochemical customers is a strong enabler to our growth journey. With our CapEx plans shaping up, we remain in course of doubling the revenue by FY 2026 from the base of FY '21. With this, I now hand over to Rajesh to discuss about the business in detail.

Thank you, Mr. Bhartia. A very good evening to all of you. At the onset, I hope you all and your loved ones are safe and healthy. I would like to welcome you all for joining us for Q3 FY '22 quarterly investor call of Jubilant Ingrevia Limited. It gives me immense pleasure to report a healthy financial and operational performance of Jubilant Ingrevia Limited for the third quarter and the 9 months ended 31st December '21. Revenue during the quarter was INR 1,286 crores, demonstrating a growth of 44% year-on-year, driven by 22% growth in Specialty Chemicals, 37% Nutrition & Health Solutions and 60% in Life Science Chemical business segments. EBITDA during the quarter was at INR 222 crores, up 42% year-on-year, led by significant growth in Nutrition & Health Solutions business and also by Life Science Chemical business segment. We started the quarter with increase in all the input costs. We have tried our best to ensure that most of the increase in all the input costs are duly passed on through improved price realization of our finished products. We continue our focus on debottlenecking of capacities of existing products to meet increased demand of our existing and new customers. We continue our focus on business excellence for continuous improvement in process and cost, using Six Sigma tools and digital insurance. ESG, as briefly highlighted by Mr. Bhartia in his speech, we, at Jubilant Ingrevia, are very proud to mention that our continued focus and efforts on sustainability has also been recognized by prestigious global agency that is S&P Global for Dow Jones Sustainability in their assessment for ESG environment, sustainability and governance. We are pleased to mention that we scored 81 percentile in global chemical industry and have been ranked among top 20% chemical companies globally. And amongst the top 3 clinical companies in India in DJSI, environmental, social and governance score. We have achieved a full score in customer relationship management, environment reporting and social reporting criteria. We also recently received the Economic Times award for being among top Indian companies for sustainability and CSR. The sustainability is always at the core of our business. Our sustainability journey has started since 2003 onwards as Life Science Ingredient business being part of Jubilant Life Sciences Limited corporate sustainability reporting. We are also a signatory of the United Nations Global Impact UNGC and has taken SDG, Sustainable Development Goals targets for 5 years starting from 2019. To further enhance focus on sustainability and to have increased engagement and involvement of employees, we have undertaken various internal initiatives to enhance socioeconomic value for all our stakeholders, while minimizing the environmental footprint of our operations. Now let me take you through the update on all our 3 business segments. Specialty Chemicals. Specialty Chemicals revenue grew by 22% on year-on-year basis, driven by higher volumes across the product segment. We witnessed its strong demand across the end-use segment through pharma sales, share to total revenue grew to 52% from 47% earlier. We witnessed positive tractions from both domestic as well as international customers. EBITDA increased by 28% on year-on-year basis, and EBITDA margin increased at 21.8% versus 20.8% in Q3 FY '21, mainly due to higher volumes and improved realization despite higher input costs. We have also seen good traction of demand of existing products as well as new product inquiry from our CDMO customers. Nutrition & Health Solutions. Nutrition & Health Solutions revenue grew by 37% year-on-year basis. EBITDA grew by 87% on year-on-year basis. EBITDA margin improved at 24.4% versus 17.9% in Q3 FY '21. Margin in the segment was higher on account of higher volumes and improved price realization across all products, including niacinamide as well as in animal health and nutrition business. Animal nutrition business continued making efforts to increase share of specialty premix through various initiatives. In niacinamide, our focus to improve our market share in EU and North America has resulted into enhanced revenue share from both these markets. In Q3 FY '22, we achieved 21% share from North America as against 11% last year and 36% from EU as against 20% last year. Also in niacinamide, our focus on risk segments like food and cosmetics is showing positive results with significant increase in volume in these segments on a year-on-year basis. Life Science Chemicals. We delivered yet another healthy performance in our Life Science Chemicals segment with 50% growth in revenue and 48% growth in EBITDA on a year-on-year basis, along with the healthy margin of 13.9% during the quarter. Revenue growth in the segment was primarily driven by higher price of ethyl acetate and acetic anhydride. Prices improvement was mainly on account of favorable market conditions. Growth in EBITDA margin also was driven by improved product contribution backed by favorable market condition. Life Science Chemicals market condition remained favorable during first half of the quarter, wherein the market conditions started getting normalized during second half of the quarter. Acetic acid prices were highly volatile this quarter on account of supply challenges in China and downstream demand. We maintain domestic market leadership of acetic anhydride and increased market presence in EU, Americas and rest of the world. Demand of ethyl acetate in EU was strong. Domestic demand also remained encouraging across all major sectors. Our value-added product propionic anhydride witnessed a strong demand during the end of the quarter. Growth plans and CapEx. Our Diketene plant is under commissioning now, and we expect to start our commercial production during the current quarter. Our committed growth-related CapEx investment worth INR 450 crores is progressing well. At peak capacity, we expect it to generate additional annual revenue of INR 900 crores to INR 1,000 crores at prevailing prices. These CapExes are food-grade acetic acid which is expected to be in operation during the quarter of April to June 2022. CDMO GMP facility at Bharuch is expected to be in operation during the quarter July to September 2022. Three multipurpose plants are for specialty chemicals expected to be in operation during the quarter July to September 2022. Acetic anhydride plant at Bharuch expected to be in operation during the quarter January to March 2023. Agro Actives Phase 1 is expected to be in operation during the quarter January to March 2023. Outlook. We expect demand of most of our products to remain strong going forward. With this, I now hand over to Prakash to discuss the financials piece.

Thank you, Rajesh. A very good evening to everyone, and thank you for joining us on Q3 FY '22 Quarterly Earnings Conference Call. I would like now highlight the company's financial performance during the quarter ended 31st December '21. I would like you to recall that the Life Science Ingredient business of Jubilant Pharma Limited demerged into Jubilant Ingrevia Limited effective 1st February '21. And in FY '21, our results comprise results fully for payment of operation starting from 1st February 2021. To provide the comprehensive picture of operation of the company on a continuing basis, the results for the previous corresponding period have been presented on pro forma basis in the investor presentation. Previous period financials are derived from the published results relating to discontinued operation of LSI segment of Jubilant Pharmova Limited. The details in this regard are provided in the investor presentation and notes of our published results, and we request you to go through the same. Revenue from operations during the Q3 FY '22 increased to INR 1,286 crores as compared to INR 893 crores in Q3 last year with a growth of 44% on Y-o-Y basis. Similarly, revenue from operations during the 9 months FY '22 was at INR 3,654 crores as compared with INR 2,430 crores in 9 months last year, witnessing a growth of 51%. The EBITDA during the quarter increased to INR 222 crores as compared with INR 157 crores in Q3 FY '21 with a growth of 42% on year-on-year basis. The margins stood at 17.3% Q3 FY '22 against 17.5% in Q3 FY '21. Similarly, EBITDA for 9 months FY '22 was at INR 712 crores as compared with INR 424 crores during the 9 months FY '21, having a growth of 68% as compared to the same period last year. EBITDA margin were at 19.5% during the 9 months FY '22 as compared to 17.6% during the 9 months FY '21, a growth of 191 basis points as compared to the same period last year. Depreciation and amortization expenses during the quarter was at INR 30 crores. Finance cost during the quarter was significantly lower at INR 5 crores versus INR 13 crores in Q3 FY '21, a reduction of 63% Y-o-Y on account of repayment of debt as well as lower interest rates. The tax expense for Q3 FY '22 was higher at INR 58 crores on account of higher profit. The cash tax is expected to remain 17.5% during FY '22. Profit after tax during the quarter was at INR 129 crores as against INR 91 crores in Q3 FY '21, witnessing a growth of 42% Y-o-Y basis. Similarly, PAT for 9 months FY '22 was at INR 408 crores as against INR 221 crores in 9 months, a growth of 85% as compared to the same period last year. The gross debt was reduced to INR 264 crores during the 9 months of FY '22. The gross debt as on 31st December '21 stood at INR 284 crores as against INR 548 crores as on 31st March '21. Similarly, company's net debt stood at INR 230 crores, as on 31st December '21, a reduction of INR 201 crores from 31st March '21. The net debt-to-EBITDA ratio further increased to 0.24x from the earlier level of 0.69x as on 31st March '21, on the basis of trailing 12 months EBITDA. The blended interest rate for Q3 was 0.25% as against 7.01% in Q4 FY '21. The net working capital percentage to turnover and number of days of working capital on the basis of Q3 FY '22 annualized turnover were at 16.5% and 60 days, respectively. The increase in net working capital was primarily driven by higher raw material costs and higher sales price leading to higher value of inventory and debtors and make versus buy of ethanol due to higher import prices. The capital expenditure during the year is expected to be around INR 300 crores. With this, I would like to conclude our opening remarks. We will now be happy to address any questions that we may have.

[Operator Instructions] The first question is from the line of Siddharth from Equirus.

Could you just highlight the impact of the removal of import duty on acetic acid and methanol for Jubilant Ingrevia and the industry?

So in methanol, as you know, the duty has gone down from 5% to 2.5%. And acetic acid, the duty has gone down from 7.5% to 5%. Now this will have impact on our domestic sales mainly on methanol because in acetic acid, we have been saying that most of these prices or duty which goes down, there will be less impact because it will be passed on to customers.

Okay. Got it. Sir, and secondly, in the Nutrition segment, the entire growth or improvement in margins that we have seen in this quarter versus last quarter, was it mainly because of the realization growth or there were some other factors that was driving this?

No. There are 2 reasons. One is that the price realization was better and also the volumes were better in the quarter.

Sir, could you give us a sense of the capacity utilization in the Nutrition segment in terms of how it has moved over the last few quarters?

So capacity utilization in Nutrition segment, as we explained last year, we had current utilization of almost 70%. Now in this quarter, the last quarter, quarter 3, we have utilized to the tune of 80% to 82%.

The next question is from the line of Kaustav Bubna from Rare Enterprises.

Just wanted to understand how sustainable are these realization increases in the Nutrition segment? And could you just speak a little bit about that?

So the price increase in Nutrition segment was mainly on 2 reasons. One is the raw material prices, which has gone up. Secondly, obviously, we have been talking about that nutrition prices in the earlier quarters were lower. So now they are normalizing. So the prices which we are now getting into Q3 -- what we got in Q3 are very much sustainable. So there is no challenge in these prices.

Okay. Great. And just wanted to get an update on the supply situation on global acetic acid plants. Now with this third wave of COVID, has there been further supply disruptions? Or how do you see the price of this commodity move in now?

Specifically on acetic acid, as you may have noticed that the supply situations have been better during the end of the quarter. And that is the reason you could see that the prices are getting softer in acetic acid. So supply situation of acetic acid is not a challenge. In fact, there is a capacity which has started in China, which was not running for long time. So that is releasing some pressure on acetic acid availability. So that's not a challenge. The availability of acetic acid is not a challenge.

So this capacity is going to start in China has started and the third wave hasn't impacted that basically?

No. Third wave actually has not impacted any business. So I don't think the only challenge people have faced is on logistics. Because of third wave, there has been stronger control operated by the government in different countries on import consignments, that has put pressure on logistics. That could have made some impacts on delays in material, but demand side, there was hardly any impact on demand side for any of our products.

The next question is from the line of Rahul Veera from Abakkus.

Sir, just a question on the nutrition side. You've got good volumes in the European and the North American region. But do you think it's more like a one-off where supplies were not able to manage the supply chain and were not able to reach the clients and we were able to do it? Or is it more like a sustainable long-term relationship with a client that helped us?

So the volume increase which we have bought which is not for us that we have got some market mix is not obviously completed. Actually, this is a long version, which we are doing for the MIS segment and for gifting customers going to new markets and that is actually letting us have more volume. In fact, we have plans to go further volume in niacinamide and niacin because this is the product where we have global leadership, both on cost and availability. So obviously, volume increase is on our target. And quarter-on-quarter, we target to increase volume.

Sir, just to understand in terms of the import duty reduction for the China capacity coming even the end prices of ethyl acetate or acetic anhydride come down. So spreads will broadly remain the same, right?

So that is why I said that there will not be much impact or not too much positive scenario with respect to this duty down. But yes, it will make us more competitive as against import, isn't it? So that will make definitely a better situation of realization for us. So there will be a positive impact. I'm not saying, but not everything will be passed on or we will be saving the money on that, but there will be a positive scenario, yes.

Sir, in the Diketene plant, this is about to commission now in this quarter?

Yes.

We will have to -- to make a similar plant open, which are already existing or is it going to new plant completely?

So as I have been saying this for many calls now that, as you know, in India, the demand is already very high, and customers are currently importing. So for us, it's not difficult to get the business of Diketene products. So basically, customers are waiting for the plant to start, and we have some waiting orders to be serviced. So selling this point of volume, which we are having in Phase 1 is not at all a savings.

Sir, how much have you spent for [indiscernible] plant?

How much we have spent? We can't give you a specific number because, remember, this is not something which we have built from a very, very green field. We have our own infrastructure utility. This plan has been built in our Gajraula facility. So it's pretty difficult to give you a specific number of investment details.

The next question is from the line of Ranvir Singh from Sunidhi Securities.

Sir, on CapEx side, that I think going toward every quarter, we have one facility getting operational. So just if you could give the breakup of CapEx of that 4 or 5 projects we have?

I think it is given in my speak also you have in presentation also. So you want the CapEx value divided into these projects?

Yes, yes, yes. So INR 450 crore CapEx.

Yes. I mean that is something which is difficult to give at this point of time. I mean so what we can only tell you is these 5 CapExes, we have approved, which is of the value of about INR 450 crores. And as we said, one is coming in the quarter 1 of next year and 2 will be coming in the quarter 2 and 1 will be in -- 2 will be in the quarter 1 of next to next year. So basically, this specific number on CapEx will be difficult to be given.

So just wanted to understand which of these facilities is actually bigger one. So that -- because all facility, obviously, what I assume would not be an equal -- will not recur equal quantum. If you could just give that which one is a bigger one so that, that will give some perspective of what's going forward in that…

So what I can tell you, what I can tell you roughly that all the CapExes, which are being coming in the next year, they are going to generate a revenue of INR 900 crores to INR 1,000 crores. So again, it will be difficult to give you the numbers that how much CDMO will bring and how much for aggregate will bring.

Okay. Fine. And again, on Nutrition business, I think you answered some queries that volume is also likely to against the -- so uptick will continue. So again, we need to do CapEx for this facility because 80%, 85% capacity utilization we are reaching to so yes?

So you are right. You are right. We had done the debottlenecking last year. We are doing a debottlenecking again in a couple of quarters for this plant. And we also have -- we have announced in our investor presentation that we are further going to expand capacity of our vitamin B3. If you go through our investor presentation, we have already announced. So you are very right. We have to increase capacity going forward. We have been doing it continuously. So right from the day we started, we're continuously increasing capacity by debottlenecking and adding the capacity in last 2, 3 years. And we have plans to further add capacities in next 1 year. And again, in the next 2 years. So this is a continuous exercise, which we keep doing based on the demand which we see going up.

Okay. And lastly, so for as full year, can we expect similar kind of EBITDA margin for the full year or what we have achieved in 9 months?

See, this is something which is becoming -- we've become a little nervous to commit that because committing margin becomes very difficult. So what we can only tell you the demand is stable. We are seeing strong demand. I think we don't see any challenge right now. The availability is not an issue. So I don't see there is a challenge in becoming business growth. Only thing is difficult to give you a scenario or a commitment on margin side.

The next question is from the line of Rohan Gupta from Edelweiss Financial Services.

Sir, a couple of questions. The first is on with commissioning of Diketene -- with Diketene plant, which we are planning to commission in the current quarter. There has been a customer response in terms of product development, we must have got some products approved from them. So I also wanted to know how fast we can escalate this plant in terms of utilization level going forward?

So as I have mentioned earlier also, this Phase 1, as you know, we are building up 6,000 tonne capacity. It should be ready very soon. And we are very confident that in the fastest period of time, we should be in a position to sell the volume.

So the product approvals and everything are in place and maybe that's 6,000 tonnes were roughly close to INR 300 crores to try to keep around this kind of revenue potential in my guess. Can we achieve it by end of FY '23, sir?

I don't know where do you get this INR 300 crore revenue, but I can only tell you 6,000 tonnes we will be in a position to sell within a year's time, definitely.

Okay. Sir, second question is on this Life Sciences business. So I understand the current quarter, spreads have been better in ethyl acetate and anhydride which is both on Q-on-Q basis. While the raw material acetic acid prices were stable, but we have seen some improvement in the product prices, but that is not getting reflected in the profitability from Life Sciences. So is there the benefit has yet to come? Or despite the spread being better in Q3, any particular reason that why it's not reflected in the current quarter?

I don't understand what is the meaning of the spread you are saying because in Q3, we are in a position to get volumes both in ethyl acetate and anhydride and also the prices have been better. So I don't know what you're highlighting. Can you please clarify what you're asking?

Sir, in Q3, we have seen that the acetic acid which is a key raw material, the prices of that was a similar level what it was in Q2, while ethyl acetate and anhydride prices have gone up in Q3, even when we -- during our Q2 con call, we were highlighting that probably the Life Sciences business profitability is likely to improve or the margins to improve going forward. But in terms of absolute number, the current quarter is similar to what we had in Q2. So just wanted to understand that any particular reason that why this business -- Life Sciences business profitability has been remained at the same as it was in Q2?

Okay. Understood. So basically, what you are saying is right, acetic acid more or less was same, not same. It was a little lower than Q2 on an average basis because it started with a high price in the quarter beginning, but later, it went down. So it was a little lower price. Now during the quarter, the prices of ethyl acetate and anhydride was normal. This is not very high in the quarter 3. In quarter 2, also, it was the normal price. Quarter 1, you are right, there was some positive impact on prices because of market condition. So quarter 3 was more or less normal demand, except for ethyl acetate, we had some good tightening in export market. So I don't think we were expecting very high prices during the quarter 3. We had expected the similar prices, and we achieved that.

Okay. Sir, next question is, once again, going back on the previous question. You mentioned that INR 250 crores to INR 300 crores is the full revenue potential from Diketene at 6,000 tonnes is probably not the right estimates which I have. Sir, can you just share that at the full utilization of the 6,000 tonnes Phase 1 plant in Diketene, what can the new potential one can expect from that, sir?

Yes. So what we had said earlier that our both Phase 1, Phase 2 are Diketene should give us the revenue of close to INR 300 crores. You are right. But that is Phase 1 and Phase 2. So Phase 1 is INR 6,000 crores. Phase 2 will be additional INR 2,000 crores, which is a value-added product further, right. So that is the value addition which we will bring in Phase 2. So that's the total, not in Phase 1.

Okay. So large part of the revenue being value added or probably margin accretive? Phase 2 will be more profitable than Q1.

I would say that not large part, more or less, it's revenue from both because there the volumes are less, but the value is high. Here, the volumes are large, value will be low. So more ones, it will be equal bifurcation, right, in terms of revenue. But in terms of, of course, the profitability, value-added should get better.

Great. Sir, we're almost achieving almost a but free balance sheet by end of this year. You've already retained a substantial part of large debt -- I mean, long-term debt in the current quarter. With the solid cash flow generation and probably our CapEx will be short of the cash flows, which will be generating. Sir, any thought process further in terms of CapEx plan or increasing this current CapEx guidance because of the cash flow generation will be pretty healthy?

Yes. So in the last call also, we have mentioned that we have a very strong pipeline of almost 34 products -- new products, which we are planning to launch in the next 3 to 5 years. So we are in the process of going through our long-term planning during this month, in the month of February. And post that, maybe sometimes in the next call, we will see if we have to make some additional announcement of further CapExes for those new products to be launched. So I think we will come back soon on the future investment plan, you are right.

The next question is from the line of Sunil Kothari from Unique Portfolio Management Service.

Congratulations for good numbers. Sir, my question is I would like to understand from compared to, say, last 1, 2 or 3 years, the way opposite is opening up for people like you who are having a very long-term experience of this field. I mean across the globe, having a very major customer clients long-term relationships. And the way we are investing, you are -- do you think that this opportunity is increasingly becoming a very possible and feasible to grow faster and you may be growing faster than what you are thinking or whatever your objective is? Would you like to say something on opportunity available, China plus one strategy, import subscription from 2, 3 Ps point of view?

In a nutshell, I would say you are right that our opportunity of growth is tremendous. And the positive part is that we are ready with the new product pipeline and our very strong financial position. Now these 2 things gives us edge over anybody else to make the future investment and growth plans very positively. And you are very right that our growth could be faster than what we have invested and also within the announcement.

And sir, my second question is looking at or every new project, I think we continuously talking about integration, backward integration [ and trends when you listen ]. So would you like to comment on the possibility of EBITDA margin, which is sustainable, not this Life Science segment sometime 20% sometime 14%? But is that as a whole, this 20% plus minus EBITDA margin over a year or 2 or maybe 3, is a base limit one should understand? Or there is a possibility of crossing that number is over there?

If you see our spread of revenue, I think the current revenue spread mostly is coming -- 55% comes from Life Science Chemicals and 45% comes from Nutrition and Specialty Chemicals. Going forward, after 1 year or let's say, during this next 1 year will these CapExes will start coming up, most of our new products will be added up to the Specialty Chemicals and higher value-added products. So obviously, our revenue product mix will change. And the moment revenue product mix changes towards higher revenue percentages on specialty and nutrition, you are absolutely right, our margins should start firming up, and we should be in a position to deliver consistent margin 20-plus, which you are expecting. And obviously, all this will happen based on all the new CapExes and they'll start coming, we'll start selling. So we are expecting the same thing. Even in the last couple of calls, we have mentioned the same thing that our -- most of the new CapExes are on value added. They are going to give us better margins. So obviously, our overall margin situation will little bit safeguarded in terms of fluctuations in Life Science Chemicals.

Sir, my last question is looking at the opportunity and the preparedness we are already having, which are the major challenges or which are the major area on which you as a top manager focus on and want to overcome like which are the area which you would think that we can further improve upon internally?

So number one is the efficiency -- continuous improvement on efficiency. Number 2, ensure that all the new projects comes on time. Number 3, make sure that your people's pipeline is well baked and you ensure your top performer and all the critical people are there with you. And obviously, your relationship with customer and market reach all these 54 things which are our top focus, so give us the growth opportunity which we are talking.

The next question is from the line of Malay Sameer from Breakthroughs In Stock.

Congratulations, Mr. Srivastava for having a super 9-month period in FY '22. Congratulations to the management team. And I would also like to thank you for being very transparent in giving the details for margins and revenue and guidance for all your 3 segments. My question here is something to do with macro issues. I would assume that FY '22 was a very strong year for us. One, because we've moved forward in terms of making superior products. And secondly, because the supply from the Chinese market was restricted. Now if I were to look at future on a very high base that we are expected to be doing in FY '22, do you have, number one, any guidance for us as to the kind of growth in all the 3 segments put together that you would do in FY '23 onwards? That's the first question. And the second question I would have is, if I were to play a devil's advocate and see that some of the capacities which were restricted in China in FY '22, if they were to be getting released in FY '23, then what is the plan B for the company to defend its margins? And when I talk of margins, I don't talk of margins in percentage, but margins in absolute terms.

Okay. So it's a very lengthy question, but what I've understood, let me try to answer your question. First of all, be very clear that FY '22 though was a very difficult year for Chinese, but if you look at our product segment, it is not that we have got something very positive because of the China impact. What we are definitely getting positive because of China impact is for the future, not for the current. So all future projects which are coming up now are actually towards positive for us. So to say that FY '22 was the best and future will not be the better, I don't buy that, particularly for our kind of products. Because in our case, we are going to see better futures because all the new products we are talking, the demand will be better, the competition from China, we are trying to see that, that should not be as high as we have been facing earlier because now the customers are also positive towards sourcing from India. So I think the future is going to be better than FY '22. I don't see there is any challenge there. Hope I have answered your questions.

Yes. That's a very big comfort.

[Operator Instructions] The next question is from the line of Suhrid Deorah from Paladin Capital.

I just wanted to ask if you can share volume data for each of the segments?

You are asking volume growth or you're asking…

Volume data, like volumes sold.

Volumes sold is very difficult to give you a product value.

And you can give us segment-wise, you can lump it up together, so then we can figure out average realizations and average margins and so on?

I think it will be good, we can talk separately. We can give you some indication of volume, if it's okay. We don't have that exactly number what we're talking.

The next question is from the line of Prakash Kapadia from Anived Portfolio Management Service.

I had a couple of questions. Given what we are witnessing as demand currently and what we are working in terms of new product pipeline, and given the cash flows what we are generating, isn't there a possibility and a probability to double our revenues much faster than FY '26 because we can do incremental CapEx, we can cross-sell to some of our existing customers, so some thoughts on that? And second, for us, what kind of asset turn range should we look at? Obviously, it's a function of end product prices also. So is to the right range, 2.5, the upper range, if you could comment on that, that would be helpful?

The first question. If you see our statement, we say we want to double the revenue from the base of FY '21. Now we didn't know that the raw material prices will go up so sharply, right? If the raw material prices remains at the level they are today, you are right that our revenue doubles can happen faster than what we have come, that's the number one. Number 2, I think the question you have asked on -- can you repeat the question number 2, please?

Yes. From an asset turn perspective…

Yes, asset turn, we have said earlier also that most of our products, which we are talking are specialty and nutrition in the new plant and new investment. We will be close to 2 asset turns, which we have said earlier.

Okay. Two seems the benchmark. And if the demand scenario continues of what we have seen currently and the end product drivers remain. Is it fair to say '25 we could double revenues on the current capacity?

So you want my commitment, but I can only say…

No, I'm looking at the direction. I'm just trying to understand.

No, direction, yes, direction I said to you that since the prices are higher, we don't know what is going to happen to the prices of raw material. But if they remain as of today, I said earlier, we should be faster than we have committed. I already said it.

And also the new product pipeline or incremental CapEx. So today, obviously, we are planning based on a certain capacity demand scenario and a certain CapEx given the cash flows, which we'll generate incremental CapEx can lead to faster revenues is what I was trying to understand.

You are very right. What we are going to do is that when we do our long-term exercise this month, we will also review that and come back to you with a clear statement with both new investment plan as well as our revised estimate of revenue growth. We will come back to you.

Sure. That will be very helpful. And as I see the PPT, we've declared an interim dividend. So if you could comment on our dividend payout policy?

Prakash?

Yes. So our dividend payout policy, Prakash, is already given also on our website, broadly, if you will see that we consider both external factors as well as the internal factors, while deciding a dividend. So on the internal factors, so we see that what are the growth projects that are going, what is the cash flow situation. And on the external factors, we see the overall environment. And having said that, we also look at a certain part of our profits, which needs to get distributed. So based on all these factors, the distribution of the real difficult has been taken. And since we had a good year this year, we were generating good profits. So therefore, the board has kindly approved an interim dividend.

Okay. So is it like minimum 30% of PAT post CapEx or 40%? Is there some range, which we can look into?

So as a range, I'm not committing you as a number, but if you see our history of our -- as to our Jubilant Life Sciences and currently what we are doing as Ingrevia, you will definitely find the pattern.

The next question is from the line of Alisha from Envision Capital.

Just wanted to understand, firstly, with respect to your Specialty Chemicals business, can you explain the reason for the growth on Q-on-Q basis from last quarter to this quarter?

So one is that some of the product demand has increased, and we have done some debottlenecking of capacity. And our existing products volume requirement also have increased. And the third is the pricing, which has been better. So these are the 3 key reasons for our growth in Specialty Chemicals.

And the next question is across segments, is it possible for you to share the volume and the realization growth?

We don't have number. And so maybe as we said earlier, we can talk separately. We can give you some indication.

Sure. And sir, just one last question. What I understand from the presentation is that Phase 2 of Diketene is expected by end of '24, where the Phase 1 is expected to be utilized in '23. Why such a large gap in onstreaming the second phase when we noted the earlier capacity which is to be utilized much sooner?

No, I don't think we have said Phase 2 will come end up '24. We said once we start Phase 1, we will immediately commit Phase 2. So I don't think it will be as said it will take 2 years. So we will -- as soon as we start Phase 1, within 2 or 3 months, we will commit Phase 2. And we should be ready in 3 to 4 quarters of the committing.

It is mentioned on Slide 32 of your presentation and hence the question, but…

So we will check that. We will check that, maybe some typo error there. We will check that.

The next question is from the line of Pritesh Vora from Mission Holdings.

My question is more of a larger question, sir, that considering China plus 1 strategy whenever we talk about any chemical company. So are we specializing a particular chemistry or a process for our growth? We have seen numerous industries and numerous companies specializing on line of chemicals, and they've grown back of that. So what is our overall strategy to grow our business?

So Pritesh, if you have followed us, we have very strong platform chemistry where we have been working for last 40, 45 years. Let me take you through some of them. So we are one of the very large producers of acetic anhydride, which is a green raw material-based product, and we are globally #2. Now here, we have been working for 45 years in this chemistry platform, and we have become #2 in the world. Now we are also having other products like pyridine. Pyridine derivative, we have almost 35 pyridine derivatives, which we are selling to global markets. So all these products are very niche, which we have been selling for last 40, 45 years in the global market, and we have been adding chemistry platform year after year. And some of these chemistry platforms are the technology which we are using to produce our products are very niche, they are not done by many companies in the world. So whether it is pyridine derivatives, whether it is acetic anhydride chemistry, hardly 3, 4 companies are there in the world. And like vitamin B3, we are #2 in the world, and there are hardly 4, 5 producers in the world. So we are not a company which are going to get the growth with China plus because of some new inquiries coming from customers. We have our own strong product platform based on our own double up the technologies, and we are the global cost position and integration. And with that, we have been growing continuously for many years, and we have plans to grow in future. So it is large just China plus looking at the new inquiries for our customer and then look for the growth. We have a very set plan. I have stated earlier also in the call, we have new products, pipeline, which we have been working for many years using various technologies and the chemistries, which are required by global customers and not done by many companies in the world.

So I fully understand, sir, and we are investor in your company, so I fully understood. My question was the largest point of view that why can't we just go after this opportunity, say, Diketene family or something like that? Why we wait for further? Why can't we specialize and go after some selected molecules and increase our business for a period of time?

We are doing that. We are doing that, but please appreciate that looking at the facility take a little bit of time. And also, it's easy to say that we want to go after this, but then put up the capacity, make a quality product, sell it to the customers in a satisfactory way, takes a little bit of time. But as we have demonstrated in the past that wherever we enter in the product, we will take global positions very fast. So as far as speed is concerned, you don't have to get worried. Will we catch up the speed as soon as we feel confident in that product, we will move fast, fastest we will move. You are very right. So not that we are waiting for something. As soon as we launch, we will go after the volumes. That's not a problem.

I now hand the conference over to the management for closing comments.

We thank you all for joining us. If you have any additional questions, both Rajesh and Prakash will be happy to take it further. Thank you.

Thank you very much. On behalf of Jubilant Ingrevia Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.

Thank you.