Kiri Industries Limited (532967) Earnings Call Transcript & Summary

Thank you, operator. Good afternoon, everyone, and a warm welcome to you all. My name is Anuj Sonpal from Valorem Advisors. We represent the Investor Relations of Kiri Industries Limited. On behalf of the company and -- I would like to thank you all for participating in the company's earnings conference call for the first quarter of the financial year 2021. Before we begin, I would like to mention a short cautionary statement. Some of the statements made in today's earnings conference call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are made based on management's beliefs as well as assumptions made by and information currently available to management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings conference call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. I would now like to introduce you to the management participating with us in today's earnings call. We have with us Mr. Manish Kiri, Managing Director; Mr. Jayesh Hirani, Senior Manager of Accounts and Finance; Mr. Suresh Gondalia, Company Secretary. Without much delay, I request Mr. Manish Kiri to give his opening remarks. Thank you, and over to you, sir.

Good afternoon, everyone. It's a pleasure to welcome you all to the first quarter of the financial year 2021 earnings conference call. For the ones who are participating for the first time, let me give a brief background about the company. Kiri Industries Limited is one of the largest manufacturers and exporters of diversified range of dyes, dyes intermediates and related chemicals, which include reactive dyes, disperse dyes, intermediates, which are based on aniline and naphthalene, as well as other relevant intermediates. Company has sizable manufacturing facilities of dyes intermediates, dyes and basic chemicals at Padra, Baroda. Majority of its production facilities are located at Baroda and company has strengthened its competitive edge by having fully, vertically integrated facilities in India. Kiri has formed a joint venture with Longsheng of China, and that is Longsheng-Kiri, which is manufacturing of dyes facility located at Baroda, and the financials are part of consolidated results of the company. Let me now brief you through the financial highlights of the quarter. As you know, company has faced lockdown between March and April. These 2 months were end of March till April and part of May also. After which, the plants were allowed to partially operate initially. During May 2020, the company was allowed to fulfill its only export obligations and commitments by operating dyes facility. And then June, the company was allowed to operate all its plants with the normalized operations. So almost, you can say, practically 60 days of this quarter was on the lockdown. For the quarterly performance of the company on stand-alone basis, operational income for the quarter was INR 69 crores, which has declined by 75%. Operational expenses reduced to about 63%. Export sales reduced by about 75%, impacting the revenues from dyes, which are generally exported outside India. Comparative gross margins has reduced by 4.2% on a year-on-year basis, and 9.2% on a quarter-on-quarter basis. EBITDA loss was reported at around INR 21 crore. Net loss after tax reported was INR 31 crore. The average sales realization for dyes intermediates reduced during first quarter 2021 as compared to the last quarter 2020, impacting the revenues of dyes intermediates. Certain types of basic chemicals achieved a little better price realization, increase in revenues of basic chemicals during the quarter. Post unlocking, initially, the sales for high-end quality products with good margins also reduced, and hence, the margins attained were lower because of the product mix change, which attracted lower margin in the quarter as an overall margin. During Quarter 1 2021, EBITDA turned into negative zone, primarily because the company did not cut down salaries and wages. As the company took a conscious decision of taking care of all its employees during -- including blue-collar workers and all other employees, further, the legal and professional fees, which are mainly related to Singapore court case, increased by about 53% in this quarter 2021 compared to the earlier quarter because the trial was ongoing throughout the period in the months of the quarter. So that was the biggest expense, which impacted EBITDA of the company. The financial costs reduced by 22% as compared to corresponding quarter of previous year, mainly because financial charges did not incur due to lack of business in shutdown. Working capital cycle elongated because of lockdown. The amount of receivables, payables and inventory remained almost same as compared to previous quarter. The receivables are slow, especially for export sales. However, we expect the same to be streamlined in the coming 2 or 3 quarters. Since the operational expenses include legal expenses towards continuing litigation in matter of DyStar case in Singapore International Commercial Court as well as Singapore Supreme Court, the cost of litigation in Singapore is fairly high. It has substantially impacted the bottom line of the company in this quarter. Now I will take you through the quarterly performance of the company on a consolidated basis. The operational income for the quarter was around INR 190 crore, which decreased by 70%. EBITDA reported a loss of INR 5 crore and net loss after tax, INR 21 crores. On a consolidated basis, revenue dropped by 70%. Operational expenses dropped by around 63% on a year-on-year basis. On the consolidated basis, the revenues dropped by 70%, again, and expense is up by 63%. The share of profit of associate companies, which basically DyStar for 37.57% of Kiri shares, it accounted INR 37.14 crore of loss, which was INR 26.68 crore profit in the corresponding quarter of the previous year. It is important to highlight that DyStar had earned profits during Quarter 1 2020. If disputed items of exceptional write-downs, exceptional provisioning of expenses and claim during management and administrative fees, guarantee fees, et cetera, are adjusted. So once all this disputed items are adjusted, then DyStar would be in the profitable territory. During the last 5 years, Kiri has been in this agreement and in dispute with substantial amount of exceptional items, write-downs, provisioning expenses, which include the items, which I just mentioned. And details of such disputed items are not currently available for the first quarter 2021. Lastly, with regard to update on the Kiri suit in DyStar, both court proceedings for the valuation pertaining to the final phase of this trial got completed. The trial and hearings were officially over by April 6, then the closing took place and closing submissions took place in the month of May and June. On June 30 and July 1, on these 2 days, oral closing and closing arguments also got completed. And as on July 1, the judgment was reserved by the court. The court can give judgment at any time. We are waiting for the judgment to come. And as soon as the judgment becomes [indiscernible] in SICC, it would be disclosed right away. So right now, it's a waiting period. It's waiting time to obtain judgment from Singapore Court. That's all for Quarter 1 2021. And floor is now open for your questions. I'll be happy to answer. Thank you.

[Operator Instructions] First question comes from the line of [ Angel Kotari ] from [ Low Ball Money Advisers ].

Yes. Can you hear me?

Yes, I can hear you.

Yes. So my question basically was more regarding the certainty of payment from the Longsheng Group. I mean is their balance sheet strong enough to pay us? And I mean any time limit for receiving the money for Longsheng Group after the date of announcement of the [indiscernible]?

Okay. So your first question was regarding ability of Longsheng to pay. Looking at the financials of Longsheng and -- which is a listed company, you can also have a look at them. And having market cap of more than $6 billion, I believe, close to $7 billion. Having strong cash reserves and written earnings Longsheng has definitely financial ability to pay, which has been proven beyond any doubt. So Longsheng is capable to pay Kiri and honor on our court order, which we strongly believe, number one. Now your second question was related to the -- how much time they would be getting to pay. So it depends basically on the court. So whatever time court prescribed in the order, that is the time within which they will have to pay. And the third point, which you try to touch upon was a certainty cost to payment, right? Even within the time frame, what if they don't pay. As soon as the order comes out, the block starts for them to pay us from that date. Even though they go to appeal, doesn't mean that they can leave away with their obligation to pay Kiri. So their obligation to execute buyout would continue to be enforced. And if they do not pay, they would face consequences of the contempt of court. And it is Singapore Court, then -- which will decide what further actions are to be taken in the event of [indiscernible] or in the event of not paying to Kiri.

Okay. But the period of payment will get decided. I mean how much time they're supposed to pay will be decided by the court itself in its order?

Yes. Yes. That would be part of court order as one of the terms of the payment.

Next question comes from the line of [ Torep Soni ] from [ Retail Investors ].

Sir, I have 2 questions. One is any sensitive deadline the court has given that by when the -- I mean beyond when the judgment will not be announced? That is a question number one. Yes?

There is not a specific deadline or any specific time that the Singapore International Court or Supreme Court provides. Based on the practical experience and the time frame, during which usually SICC and Supreme Court gives the judgment. Based on our prior experience also, it takes around 2 to 3 months' time. Even in our prior judgments, it has taken that much of a time. But there is no definitive date. Any time, any date, we can get a message from the court to collect the judgment, and it is up to the judges when to give. So we have to be ready and just waiting for a call, especially our counsels would get a call from the court, and then they will go to collect the judgment. But there is no specific deadline or time line or any specific time frame given by the court.

Okay. And another question is, sir, we -- our -- this quarter is badly hit because of the COVID. So are we expecting the -- I mean, is there a pipeline of order was already there, and we could not be able to execute due to this coronavirus? And will those -- the lost revenue, which is there in this quarter will be proportionately increase in the rest of the quarter, we are -- rest of the coming quarters. Will that be the situation or that gone quarter lost revenue is lost?

Well, let me start with the pending orders which you -- the order book which you referred to in your first question, right? And the order book was most canceled because the moment pandemic started and the uncertainties in the market in terms of requirements, in terms of prices, because everything was going down. Almost entire industry's order book, and our order book was all canceled at that time. And this was a period around March, April and part of May. So whatever we started on dispatching, it is mainly coming from June month. And the revenue, which you see in the books is also coming from the month of June. And month of June to INR 260 crore only in 1 month was not so bad, to be honest with you, which we were happy about. But these are all new orders. These are all new demands, which are coming from various countries and also domestically. For the current quarter, your second question for the quarter, which is going on right now and the next quarter, we expect that recovery would come. How fast that recovery comes would depend on how fast the demand and how fast the lockdowns in other countries are open up and opening up actually. So we are now seeing month-on-month improvements. And we expect that in the current quarter and next quarter, we should have a quite decent recovery. Now to go back to the normalized operation, which means that the operations, which we used to have pre-lockdown with a revenue of close to INR 270 crore to INR 300 crore a quarter to come back to the kind of revenue. Based on current forecast, we don't foresee it to happen by December end. In case if it happens, we can only expect and be hopeful optimistically to happen in the last quarter of this financial year. And we don't foresee it to come before December. As a normalized quarter pre-lockdown or normalized business pre-lockdown that we had. So that is optimistically maybe beginning of 2021. Or if not, we will have -- and wait until next financial year, when we have absolute normalized demand, and absolute normalized operations in terms of the performance.

[Operator Instructions] We have a question from the line of [ Rajesh Chan ]. He's an individual investor.

Yes. My question relates to the quantum of the valuation that we expect from DyStar case because I believe it based on July 2018 financials. But we must have worked out some range as to what will be the expectation in terms of the resolution in terms of the quantum of money that you can expect.

Okay. Thank you for the question, Rajesh. The -- with regards to July 3, 2018, which is the valuation date, and in no uncertainty, the court has already given the view that whatever post-July 2018 events would not affect the valuation of Kiri. And whatever is the valuation as on that date would be the valuation that Kiri is to receive. So just for your information that Longsheng also tried to apply and to influence court and try to request or to consider COVID-19 pandemic-related valuation update, which means that they wanted to basically reduce valuation in 2 days' time, but court dismissed their application and court denied, clearly not to consider pandemic or any other events after July 2018, to influence Kiri's valuation. So that is very important decision by the court. So as of July 2018, whatever is a number, that is a number Kiri is to receive. Now a specific number, which you referred to or a range which you referred to, as the matter is still [ subsidized ] and the court is in the process of deciding the number, it would be speculative for me to indicate any number to you. But if you look at -- till July 3, 2018, even in July -- even in 2018, which was the year, a full financial year DyStar made post exceptional items and distributed items close to more other than $140 million profit after tax. Before that, since 2014, it has made every year almost more than $100 million profit after tax. So $100 million profit after tax is the established track record, and the number which DyStar has already proven till the valuation date. And not only that, all the other IPs and 1,700 patents and was largest network. So those are the soft assets, and those are the soft business features DyStar has. So if you have any [ MNC ] with such a profitability and if you look at their public domain valuations as on July 2018, you would be able to come up with a fairly decent number if you ask about it. And you are more expert in valuation than us to figure out what value that company can expect. And we have full faith in the court of Singapore that whatever number they decide, it would be a fair number. And we believe that we will have a fair decision from the court when it comes. Till now, with our experience of last 5, 6 years, we have received all fairness. Every decision court has ordered has been fair. And we have been quite pleasant with that. So let's hope that we get a fair number, and let's hope that it comes at any time.

Understood, sir. My question is that the court may have also asked you to share what valuation you are deriving in terms of expectations by your own CAs or valuation team. So is there a number for clarity purposes that you are expecting from them in respect of what the court may ultimately decide?

Yes. See, the -- just to give you more insight, there were 2 valuers appointed, okay? And both the valuers were appointed from each side. So Kiri appointed a valuer, which was independent valuer. And Longsheng also appointed independent valuer from their side. And both the independent valuers' duty was to report to the court, right? So that responsibility was to the court and not to the company, okay? So that means that whatever valuation submitted to the court by both the valuers is a part of the court's internal confidential information. That is not to be disclosed by either party. So when you ask me what Kiri's appointed valuer has indicated, what number -- of course, we are aware of that number. But those number are within the confidential part of court's documents and which are not accessible by anyone in the public domain, but only for the courts fair trial and decision, right? So for that purpose, we are not supposed to disclose that number what was submitted by the independent valuer appointed by -- committed to the court because we are not to disclose that number. And I'm sorry -- because it's part of our confidentiality to maintain till the judgment comes out from the court.

I understand that, and I agree with you. And just that I've been a very long-term investor, so there's a lot of confusion in the clarity was something that everybody was speaking, instead of speculating, right? So -- but I can understand where you're coming from. And I agree with you that if something is in the court domain, it is something that you can't disclose.

Yes. And we hope that the judgment comes even tomorrow. We'll be very pleased if our counsels would get a call tomorrow, and to be fair, it is up to the court. I mean the judgment is resolved and we can comment and we deliver it any time. So the earlier is the matter for all the investors and shareholders to know the number and to know what amount company is going to receive.

Next question comes from the line of [ Nau Shad ] from [ Systematics ].

Two, three questions, sir. First of all, quickly, if you can share the prices of vinyl sulfone and adjusted in this quarter versus same quarter last year?

Yes. See, the price of vinyl sulfone right now is hovering around INR 150, INR 155. And which was at a similar level last quarter. And this price is probably the lowest price in last 10 years, as I remember, or even more than that. So we are almost at the bottom of the price. The price of [ adjusted ], which is currently around INR 345 to INR 350. The last quarter was also around INR 335, INR 340. So I would say even as adjusted price is at a similar level in this quarter compared to last quarter. Of course, these prices are much lower compared to the average prices, which we realized last year. So these are some of the lowest prices, [ Nau Shad ], which are prevailing in the market now. And not only from India, but the prices are also at the lowest level coming from China. So for example, vinyl sulfone price from China is also around $2.10. And adjusted price is lowest to the extent of $4.4, $4.3 sometimes coming from China. So Chinese are also under pressure. And they are also floating quite low prices to the markets outside China.

Okay. So is it purely because of the demand slowdown? Or is it something to do with the raw material prices has also gone down. So there might not be much impact on the overall spread, but a realization looks lower.

Well, the overall -- both the effects are there. Raw material prices are also down. And some of the raw material prices are also historically low. That is one area. And the second is the prices are proportionately lower side with a higher percentage, which is beyond the raw material-related reduction, is also driven by low demand. For example, the prices, which we see at INR 1 50, INR 1 55 level. If only consider the raw material reduction, it should have been at INR 1 75, INR 1 80, right? So we have another impact of INR 15, INR 20, both in adjusted as well as in vinyl sulfone, which is driven out of the lower demand.

Okay. And what is the trend now currently? And how do you see this? Because I believe this is -- these prices are not very difficult for us to survive at this level of your realization. So how do you see that...

I mean if you look at these prices and because the raw material prices are down, dyes prices also follow the same pattern. So the dyes prices are down. I foresee that if the demand picks up in this quarter or before the end of this quarter, and knowing that the prices are some of the lowest in years and years, everyone expects, including us, that the prices would move on the positive side. The moment some demand comes up, the moment the sparking of requirements within India as well as outside India, prices would go positive from current levels. We don't see much room for the prices to go further down from here. Manufacturers, and I believe that people would prefer to scale down their operation or stop their plants if the prices go further down.

Yes. So at this level, how much margin you must be making at EBITDA level, sir?

At this level, you are almost near your breakeven, you'd be hardly making 3% to 5% EBITDA at this kind of prices.

Okay. So it's still EBITDA positive or the prices are at a EBITDA positive level?

Yes, it is still EBITDA positive level, correct.

Okay. And we were in a purchase of doing some CapEx to do some automization to reduce our employee costs? And I just wanted your update on that. And if you can get into more details, how these things are going to benefit to us and quantitively, how much will this benefit in terms overall employee costs and margins?

Yes. Say, for example, we would be complete all our process automation, which we had already started more than a month back by August end. So by the end of this month, we will be finishing that. And that would reduce now final our headcount of labor requirement by close to 30%, right? And it will not cost -- it will not save too much of cost, but it would reduce our dependency on labor. On a quarterly basis, it would hardly help us to reduce by 50 lakhs on our salary basis or even less than that 40 lakhs to 50 lakhs. But on dependency, we would be less dependent, number one. Number two, our efficiency would improve. With this process automation and some of the areas of the plants, we would be more efficient compared to our earlier times, right? And with more efficiency, we hope that we will have better productivity. Our plant capacities because all these changes are happening mainly in intermediate facilities and not in the dyes facilities. So in integrated facilities, we don't see much expansion on capacity because capacity is going to remain the same. But our efficiency, our downtime, that will help us overall on -- to have better output. So if we get even 2%, 3%, 4% better output every year, utilizing existing capacity, actually, it will help us to improve our margins a little bit.

Okay. Lastly, can you quantify how much we spent in this quarter in terms of our legal and professional fees towards the court case?

Well, if you look at our net loss on a stand-alone basis, if we had not incurred this legal cost, it would have been half. I mean that would give you the indication.

Next question comes from the line of [ Ashish Agarwal ] from [ Madi Capital ].

Yes, most of my questions have already been responded to, just a couple of them. One is, I noticed an exchange filing last month about shutdown of a production facility. What is the current status? And if it's operational, at what capacity utilization are you operating at?

Well, we are still operating at less than 50%, yes, right now. And you must have seen the recent announcement where we shut down due to certain environmental severing measures. I think you might have looked at that announcement, okay? So that is also getting over now. And from this week, we will increase -- we'll restart our plant probably. We'll give you the confirmation on the stock exchange once done, but we are hopeful. And throughout this quarter, we expect to be, on an average basis, more than 50% utilization, right? So we hope that we are at least breakeven or a little more in this quarter in the current situation. This is an optimistic view, as you see, and we will try our best to achieve that. And let's see how we are able to match up.

Sure. Sure. Appreciate that. Also a clarification question, all the legal expenses that have been incurred, even the ones after July '18, for the court order will be reimbursed by Longsheng. Is that understanding that?

Yes. Yes, they are all being paid -- have to be paid by Longsheng. And all cost expenses till July, till July 3, 2018, are already been quantified. And they are in the process to submit claims. So it can happen anytime, as we speak. But even post July 3, 2018, expenses will also have to be paid by them. Correct.

So the reimbursement of these legal costs, is there maybe a different time line from the overall settlement?

Well, this will be a separate process where court has already ordered SICC. Supreme Court has already upheld a judgment, right? So after submission of our total records with all the backup documents and everything, court is going to then decide on that. And SICC judge would be there. And we were told by the counsel that it is fairly quick because it's only the number, which is going to be approved, agreed on certain SEC criteria by them. And it can go really fast because then there is no separate -- basically, process is to be made. But it just follow the guidelines of what gets qualified and what doesn't get qualified out of our all claims that we make. But it may take few months [indiscernible], yes, for court 2 process.

[Operator Instructions] Next question comes from the line of [ Pishar Jaju ] from [ Title Mindset ].

Am I audible? Yes, greetings, sir. Sir, first of all, my first question was more regarding the last few years, the profit which has been entitled from DyStar. So from the last year from 2018, will the profit be inculcated in our balance sheet? And the second question was more sort of on the future outlook, which we discussed in the last quarterly con call. So you were more sort of inclined towards starting the manufacturing of aniline? And just want to know how your updates are going on the next capital expansion part? And where are you planning to expand in the future?

Okay. So regarding your first point, see, today, all the CapEx plans, especially for this year, they have been put on hold, okay. So we are not going to incur any further CapEx. In whatever we had, we had to complete as related to especially intermediate plant, which I referred to in our last conference call, we are going to finish that part, which is not going to incur as major investment. It would be very smaller. But besides that, all other CapEx plants are on hold till March 2021. And post that, we will see what to do as far as company's CapEx is concerned. Regarding DyStar's profit post July 3, 2018, Kiri is not entitled to receive, even though Kiri is consolidating in balance sheet, as long as Kiri remains shareholder of DyStar. So statutorily we are bound and we are obligated to consolidate. So we are consolidating. But Kiri is not beneficiary to that profit. Only Kiri is going to receive is the sales proceeds under court order ForEx exchange to Longsheng under court order as on the valuation dated July 3, 2018. Besides that, post that date, Kiri will not receive any part of profit. Any court orders Kiri has already requested, would be the interest where the interest would be awarded by the court as per Kiri's request from the date of the filing of the petition, which is June 2015 or from the judgment date whatever court decides, and if court awards interest to Kiri. Then from that specific date, which court decides, Kiri will receive interest on the entire valuation amount, okay? When the transaction gets completed until the date Longsheng pays to Kiri. So the maximum we can get qualified for. So the court order would be the interest.

Okay. So interest has been still under consideration, interest part, right?

Yes. Yes. And if court considers it and awards it, it would be part of the court order, which we will receive.

Okay. And can we get some more like in the last quarter, you say the company was planning on to expand some other sector as well because dye and pigments -- dye subsector has been in a hampered manner in the last coming quarters due to COVID. So has company come to any conclusion that's where we are planning to expand in the coming quarter or coming year or so, like after March 2020 -- 2021, then we are likely -- is likely to get some receivables from the DyStar case. So has the company plan where to expand sort of or we would continue with the dye subsector?

No. I think, as I mentioned last time, whatever proceeds that the company received out of Singapore, right, would not be invested into dyes and intermediates. They would be invested in areas, which are different from dyes and intermediates and within the chemical space. That's the overall decision already reached by the court. And whatever Kiri earns from its existing business as and when required, Kiri will continue to invest in dyes business from its own earnings line business, right? Singapore proceeds. That demarcation is very clear by the Board of the company, right? Now in chemical sectors, in which areas, which products and where it would invest is not crystallized yet. It would depend on the amount, how much Kiri is to receive, right? It would also depend on which project is the best feasible, achievable and which projects will earn the maximum return to the company. So there are a number of projects being analyzed. A lot of feasibility studies have been prepared since last 2 years. And then we'll make a prudent decision once we have clarity on what kind of amount we are getting.

Yes. Yes. Okay. And one -- another thing, can you please share in the coming quarters as they are hampered with the working capital management. So in the coming quarters, will we be requiring working capital borrowings from the bank? Or our cash flow will be sustainable enough to cover the working capital for the next quarter as well?

So current cash as per the current working, we will continue to survive based on our own cash management. Yes. We have not borrowed from anyone, and there is no working capital lines that the company uses for many banks, right? So there are no interest-bearing debt on the books of the company. And as per the current plants, we'll manage from our own working capital and try to manage with the existing resources that we have in the company.

Next question comes from the line of [ Karan Ramesh ] from Ashika Group.

Yes. I had a question regarding the legal expenses that you had spoken about before. So there is, of course, the main valuation that is going on about Kiri's minority operation. So for that, we will receive -- we will be -- DyStar will pay for the legal cost. But what about the other minor cases, if you could elaborate whether we will have to pay for the legal cost. So that will be paid by Senda or DyStar?

Well, for the -- say, for example, for the side as you are referring to, and the legal cost pertaining to side cases. The simple rule is that whoever loses the case, we'll have to pay the other party. And the same rule applies here, too. To give you an example, when Kiri was -- when the order was made in favor of DyStar, awarding DyStar $675,000, right? Court also awarded Kiri to pay around $200,000 plus legal fees to DyStar, okay? So court will decide on these side issues, whoever is a losing party would need to pay how much to the winning party. But all this would be maybe in the range of thousands in dollars and probably not in millions in dollars.

Okay. So it's not even the legal cost that you have paid for the side cases, it's just a small proportion of your total legal expenses?

Yes. And those would be paid by the losing party. So for example, if Kiri has launched a counterclaim on DyStar and if Kiri wins counterclaim, for that portion, DyStar will have to pay to Kiri, for Kiri's legal costs. And same applies vice versa.

Next, we have [ Diral Shah ] from [ Pellet Capital ].

Sir, there is a significant difference in EBITDA margin in stand-alone as well as consolidated results. So what product enjoy high EBITDA margin in JV? And what are those margins?

Well, JV has 3 product ranges, so if you talk about JV. And Kiri also has certain products stand-alone business also, which has high-end products and -- which fetches more margins. While in JV, also, for example, there are total ranges, which are based on flooring chemistry, it makes high-end better margin. Indigo is also there in JV, which makes comparatively better margin. In Kiri, certain stand-alone business, certain intermediates. And those are the intermediates, which are high-value intermediates. For example, ranging from INR 700 a kilo to INR 1,500 a kilo, if I see is better margins. Quantities are small and lower quantities for those. So these are the products of different categories in both JV as stand-alone and also in stand-alone, which generates comparatively better margin than the other generic products either dyes or intermediates applies for both.

Okay. And sir, in our multipurpose plant, what are the list of the 26 products, can I get the list of the product?

There are certain derivatives in those such as [ aniline ] derivatives, some of those derivatives are, again, aniline derivatives, crystalline derivatives. But I mean specific products, we may not be able to give. But those ranges are the ranges, which I am mentioning. And so many of those products are Chinese replacements, by the way.

Yes. So is there a potential demand after this if situation normalize? And what are the expected margin on this product?

Yes. We can give some guidelines on expected margins of the products once this -- let us say, non-COVID situation where normalized operations are in which our new intermediate specialty intermediate plant would produce at least would generate at least 20% EBITDA margin. So that kind of product mix has been there. And it will be replacement of Chinese imports. So these 2 key parameters are there, which will help us to overall boost our bottom line.

So do you feel there will be sufficient demand after the COVID situation normalized?

I think 2021 onwards, we would have sufficient demand, we believe so. And so -- but again, uncertainties, I know as well as you know. Now if the vaccine and the sentiments comes faster, improves better, then recovery would be faster, right? If the sector is not because I see a lot of at least 60% to 70% of performance of dyes and intermediates is linked with textile. So heavy dependency on textile. So if textile improves, that again helps. So all are interlinked and interconnected on how recovery comes. So we may try to be optimistic, but only time will tell how things will recover.

Okay. And sir, lastly, sir, whatever amount we realized from DyStar, are we going to pay any onetime dividend or anything for minority shareholders?

Yes, that is also under discussion, of course.

Next we have [ Kalpesh Varma ], who is an individual investor.

I have one question regarding the key share in the DyStar profit, which is total of INR 870 crore for the last 7 years, FY '14 to FY '20. So are we not going to receive this? Or this is the amount apart from the valuation figure that we are going to receive?

So you see, whatever Kiri's portion of the profit of DyStar was never been paid to carry till date, nothing, right? So that -- so whatever profit earned has already retained in DyStar. So DyStar's valuation will take that into effect. So what we will get is the valuation and the price which will incorporate all the factors of DyStar's financials. And one of those factors also include the retained profit, which has not been dividended out to their shareholders, right? So which would be part of it. So as a business valuation, whatever value that has been decided by the court, we will get that value and that price for selling share in the court order. We would not get a profit separately and the valuation number separately. It would be all one number, which is a valuation number.

Okay, sir. Sir, another thing is that you said that till July 3, 2018, the legal cost has been quantified. Can you disclose the amount?

That has been worked out by the company, which would be submitted to the court, it would be claimed in the court. And once the claim is launched, definitely, we will inform you.

Okay, sir. Sir, another question is that, once the valuation amount is being disclosed. So the interest component that is we are going to receive it from 2018 of July or from the original case, that is from 2015?

Kiri's demand was from June 2015. That is what Kiri presented to the court, right? And the interest rate in Singapore is a fixed interest rate, which is 5.33%.

5.33%. Yes.

Right. So we have demanded, not necessarily the court would consider, right? So finally, it is up to the court to decide, whether from the judgment date or whether from the date of the rate. So that would be known when the judgment comes out.

Our next question comes from the line of [ Erik Sahni ]. He's an individual investor.

Am I audible?

Yes. Yes, I can hear you. Please go ahead.

Okay. Sure. Sure. Manish, I have a question relating to this valuation amount only -- I mean in continuation to the earlier question-and-answer given by you. So you said that once the SICC gives the judgment then DyStar or -- we will get the money, irrespective of the fact that they still have appeal right against the valuation amount. So legally speaking, in the context of judicial system, what happens is if you have a right of appeal, then generally, you get the stay on making those payments because otherwise, it will frustrate the entire purpose of having the appeal right. So what are your thoughts in terms of -- because you said that, that would be contempt of court if they don't immediately pay the amount, even if they will appeal right.

Yes, I understand your point. Now when the SICC order is out, most of which the appeal is made in the Supreme Court, correct? And appeal doesn't mean the automatic stay on the SICC order. Okay. So there is a separate state to be taken. And according to our counsel's advice, they would not and they might not get that stay being the third appeal in the case. So there are indications from our counsel that our right of enforcement of order would continue even though they would appeal. And the same thing had happened in the last judgment also. So for example, when the July 3, 2018 judgment came, right, they appealed in the Supreme Court. And the stay was not granted to stop the valuation proceedings. So even though Supreme Court appeal was made after July 3, 2018, valuation process continued in SICC.

Yes. But Manish, I think continuing the valuation proceeding is a different ballgame than making the payment because -- the entire decimally. And if for example, if I ever appeal right, and I made the payment to you, and the appeal is admitted before the Supreme Court, then my entire appeal right is frustrated because I have made you -- I haven't paid the amount, and I'm still fighting for that amount. So do you think that, I'm not able to get the logic that why would they get if the appeal is [indiscernible] then why would we not get the stake?

So based on a very varied question you asked, but based on our discussion with the counsel, the logic which comes is that the order is made by the SICC. The order exists and the order is enforceable to pay to Kiri unless that order reverse by appeal. So if order is not reversed by appeal, which means that the liabilities continue to stay. So unless and until they are successful in reversing the order from the Supreme Court doesn't imply them not to pay their obligation. That is where it is coming from. So I understand you are very valid point but the way we have been explained by the counsel that our right of recovery and the enforcement of the order doesn't go away with filing the appeal. Right, unless appeal court gives a separate stay. That yes. Now I'm giving a separate stay on SICC. And there is -- so one is an appeal application, and then there has to be a stay application, which is implication. Unless and until that stay application is granted by Supreme Court, enforcement rights continue to exists.

Surely. But I think once if the file appeal, we will surely find the stay application also? And if Supreme Court admits the appeal, then Supreme Court will definitely give the stay to them. Otherwise, I don't think so admitting appeal will serve any purpose there. I think we are --

Well, so let us say, in the stay application. If Supreme Court still -- well, we can allow a stay, right? But Kiri is saying that you pay security first payout amount put in the extra account. Give some commitment to the court, isn't it?

Sure. That can happen anyway because they may be as the order that was based on deposit amount or...

Yes. So state -- if the state granted, court has the right to demand something against it, isn't it? And Kiri has a right to present also, why not to grant stay in that case.

Absolutely. That's a valid point. I think what can say that you deposit amount in escrow account. Some partial amount so that your seriousness about the appeal is displayed. You are not just stretching.

Yes. So you are -- you should not be, I mean, appeal only just to basically misuse the process. And just past time, that should not be there isn't it?

Thank you, [ Mr. Tani ]. Due to time constraint, that was the last question for the day. I now hand the conference over to management for closing comments. Over to you.

Thank you all for participating in today's call. All the best to all of you, be safe, be healthy and see you for the next quarter results. Thank you. Bye.