Kiri Industries Limited (532967) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Q2 FY '23 Earnings Conference Call of Kiri Industries Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Anuj Sonpal. Thank you, and over to you, sir.

Thank you. Good morning, everyone, and a very 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, I'd like to thank you all for participating in the company's earnings call for the second quarter of financial year 2023. Before we begin, let me mention a short cautionary statement. Some of the statements made in today's earnings 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 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 call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. Let me now introduce you to the management participating with us in today's earnings call and hand it over to them for opening remarks. We firstly have with us Mr. Manish Kiri, Managing Director; Mr. Jayesh Hirani, Senior Manager of Accounts and Finance; and Mr. Suresh Gondalia, Company Secretary. I now request Mr. Manish Kiri to start with his opening remarks. Thank you, and over to you, sir.

Good afternoon, everybody. And welcome to the earnings conference call for the second quarter of financial year 2023. I hope you are all keeping safe and well. During Q2 FY '23, the industry experienced very sluggish demand driven by geopolitical tensions due to Russia-Ukraine war for more than 34 weeks. Additionally, China recently announced new COVID zero measures, where in 28 cities are implementing varying degrees of lockdowns, which made global dyes and dyes intermediate products more volatile, impacting growth of the industry. During Q2 FY '23, Kiri Industries Limited attained consolidated sales revenue of INR 242 crores lower by 32% year-on-year basis and EBITDA loss of INR 7 crores. Net loss for Q2 FY '23 was INR 26 crores versus net profit of INR 12 crores in the same period of last financial year. Coming to the H1 numbers, company, I think consolidated sales revenue of INR 519 crores lower by 20% year-on-year basis and EBITDA loss of INR 15 crores. Net loss for Q2 FY '23 was INR 53 crores. Sorry, for the first half versus net profit of INR 19 crores, right, in the same period of last financial year. During the quarter, Kiri attained stand-alone sales revenue of INR 141 crores lower by 47% year-on-year basis and EBITDA loss of INR 32 crores against breakeven in the same period last year. The net loss for the quarter was INR 44 crores as compared to the loss of INR 7 crores last year. For the half year Kiri earned sales revenue of INR 312 crores, lower by 32% year-on-year basis and EBITDA loss of INR 64 crores. Net loss for the first 6 months was INR 72 crores. During the quarter, the prices of raw material, gas and fuel which are increased during the preceding 2 quarters have not reduced during the current quarter, which has impacted margins of all dyes intermediate units of the industry. The high legal costs also impacted margins during the quarter and half year. The payment cycle has also lengthened and inventory churning has decreased as a result of stagnant demand and unstable raw material prices. The company anticipates a smoothing of liquidity over the next few quarters and return to normalcy for the payable cycle over the next 2 to 3 quarters. In the matter of DyStar where Kiri holds 37.57%, the Supreme Court of Singapore has given judgment on July 6, 2022 in SIC4, Kiri has prevailed on the issues of Supreme Court with regards to 19% discount for the lack of marketability and quantum of license fees for the wrongful exploitation of the patent. The Supreme Court had remanded the matter back to Singapore International Commercial Court to give effect to the decisions and to reremind the quantum of license fees based on available evidences submitted by both the parties and for reversal of DLOM. As per the direction of SICC, related submissions from the parties had been completed, and final valuation order is awaited. The Judgment was also reserved. In another appeal against court order of SICC dated 8th December 2021, hearing at Supreme Court of Singapore had been completed on September 16, 2022, and order from the Supreme Court or Singapore is reserved and awaited. In SIC7, Kiri and DyStar had filed appeal against SICC order with regard to preferred supply status to Kiri. SICC had rejected Kiri's claim related to be treated as preferred supply against DyStar vide their order dated September 24, 2021. The hearing of appeal at Supreme Court of Singapore had been completed on 22nd September and order is reserved and awaited. Kiri has been keeping an eye on the world market for the dyes and has been actively taking steps to mitigate challenging market conditions and reduce cash losses. Company is working to ensure that its product mix is optimal in order to boost overall margins, allowing the business to absorb its fixed costs and make a big step forward, actually normalized revenues and EBITDA in the upcoming quarters. As I mentioned, operational margins are currently negative, but we expect it to stand positive once the world market stabilize and the demand increases. With that, I would now like to open the floor for any questions. Thank you.

Thank you very much. We will now begin with questions. [Operator Instructions] We take the first question from the line of [indiscernible] Financial, please go ahead, sir.

Sir. Last 2 conference call, I participated sir, you remember, Suresh?

Please go ahead.

Actually, the Supreme Court case in September, we can expected a complete decision, but -- okay. I'm not asking a doubt. You can expect any time delay, what is the reason?

I think, see -- we have been quite actually following up on the final number and the final judgment from SICC, and as I mentioned in my speech, all the submissions got completed on August 29. And we are expecting that at least in a month or 2, the judgment should come from SICC. But somehow, maybe due to their internal court process the delay happened and we continue to await. Now it has already been more than 2 months, actually 2.5 months by this time, from the submissions, which got completed on August 29th. So we hope that any day, anytime the final judgment has to come from SICC regarding the valuation number. So let's hope that it is announced from the Court on any day.

Actually, sir, it is -- voluntary -- not delaying the court, it is...

I think it's a generalized delay in court, and there is no particular or specific reason for the delay. Neither court give any further instructions to submit anything more, right? So it was only the general delay that the court is experiencing and we are experiencing for the same. So there's nothing specific reason that has caused this delay.

Sir, you can -- any -- not a legal action, but any take -- delay of so much time. You can take any action to write the -- ourself any rights in -- taken the action to delay the -- this issue? Chances is there. Any action taken at SICC?

You mean we write to the court that's -- that's what you are asking? Or?

Yes, Sir.

Based on the protocol now the regional councils of Kiri or the legal counsels of Senda once the -- once the judgment is reserved, there is no system to follow up, okay? So we just need to wait and keep patience till the judgment comes. There is no process of filing anything to follow up on the judgments which are already reserved. So I think we have no choice but to keep patience and it is actually testing your patience, our patience, everybody's patience. There is no procedure to write to the court once the judgment is reserved.

Actually, your legal panel is there in Kiri, but your panel or what time expected, any day or anytime -- it's unexpected -- sorry -- you are also waiting?

Yes, any day, everybody is waiting any day.

Sir, actually, okay, DyStar is, okay. But in the standalone, Kiri will give a turnaround performance, how much time take, sir. It is only defend -- Kiri continue loss-making in stand-alone. Without DyStar, after DyStar court judgment is completed, you can get the money. After stand-alone Kiri financially turnaround, how much time take? You can take any steps to individually stand alone, you can grow?

Right, right. See -- right, see we -- very correct questions, actually. And even before the DyStar comes stand-alone has to turn around and stand-alone has been impacted due to several reasons, market dynamics, one reason; our continuing heavy legal expenses is second reason; and third reason is high volatility in the prices of input raw materials, correct? So these are broadly speaking, 3 reasons impacting our financials. But we are working continuously to improve and hopefully, in the next quarter or 2, you will see a turnaround because we are rationalizing a lot of products. We may discontinue certain product temporally. We may change certain products temporarily. We may reduce our costs in terms of employees, which is happening as we speak. So we are trying to make certain changes to reduce the losses and to breakeven as soon as possible, even before it has nothing to do with the DyStar proceed funds. This we have to do anyway. And if you look at the consolidated EBITDA, as I mentioned even in last quarter also because the raw materials go to long term Kiri and then the group company sells to the customers, which is consolidated into Kiri. And if you look at that level, EBITDA losses is INR 7 crores. So we will shortly breathe in next quarter, you will see that it is not there. We are working on it right now. So we would do it even before that.

Before judgment?

Before the DyStar funds come.

Sir, actually, Kiri after DyStar amount received, DyStar -- you are not depended any Kiri products in DyStar business tie-up after...

Kiri is not sending any products to DyStar as on today also.

As on today. Sir, any legal expenses in further chances?

No legal actions further, no cases further. I think once this judgment is out, there is no pending legal actions or there is any other actions related to minority operation and buyout. There is no further legal proceedings left, nothing now. It's only to realize the post the order or whenever it is, but that's the only legal action which will take place going forward is pertaining to enforcing the order.

Answer -- one small doubt sir, it is not a company issue. But generally, I can talk to market. So many investors in Kiri -- in social media rumors, Kiri is some play with DyStar case -- FPI is already -- which have taken 10 rupees or 20 rupees share, we can sold it any mutual fund is not interested to take investment in Kiri? And just it is a social media rumor but you cannot misunderstand. Just I am asking as an investor. What is -- that issues you can just clarify the your side please can -- don't misunderstand, please give the reply.

So such kind of social media rumors are nonfactual. They are false and which is nothing to do with the facts. Okay? So these are not only incorrect. These are baseless and nothing -- no truth related to the actually.

Okay. Sir, you can also eagerly waiting, please best wishes to receive the as early as...

Yes, we will also eagerly wait. Thank you. Thank you.

So can you expect much time, sir, any day, anytime -- you can at least you -- November month ending will complete? Chances is there?

Anytime...

Mr. Suresh, I'm sorry to interrupt, sir. May we request you to get onto the question queue as we have other participants waiting. We take the next question from the line of Mr. V.P. Rajesh from Banyan Capital Advisors.

Manish Ji, just clarifying your comments on the Singapore case, you are saying that the DLOM and the patent issues will be sorted out anytime. Is that correct? And then there are a couple of other court cases which are also pending?

No. The -- for the valuation-related judgment which Supreme Court ordered in our favor and overturn on 2 points, as you rightly said, DLOM and the patent license fee. So that judgment would come at any day, anytime right now. They're from SICC, giving the effect to the Supreme Court's decision. Now that's the main judgment. Besides that, there were 2 other cases, which got concluded again in the Supreme Court in appeal. One was related to the legal cost. If you look at the previous judgments there was a legal cost-related judgment of $8.11 million plus interest. And the other party went -- Senda went to appeal against that. That matter and that hearing also got concluded in September, judgment is reserved and awaited right now. There was a third side case. So these are side cases. There was a third side case which again went also to appeal from Kiri side, where these was a side case Kiri filed against DyStar not Senda about not treating Kiri as a preferred supplier and defaulting the [indiscernible] arrangement. So that was earlier 2 years for though ordered against Kiri and that was dismissed and Kiri went to appeal against the order with the Supreme Court. That case -- that side case also got completed in September and the judgment is now reserved and awaited. So even side cases are completed in Supreme Court now.

I understand. And I think in the last con call, you said that because of the DLOM ruling coming in our favor, we should get approximately $600 million from Senda, is that correct or that figure has changed?

No, that is correct. That is correct. DLOM number is very clear in the courts, documents, DLOM is very clear in the earlier judgment even if you read the judgment of June 2021, you will see the DLOM number. And that would be completely reversed. So there is no debate on DLOM. The only number which SICC had to decide was pre-patent license fee number. And the submission which got completed on August 29th was only pertaining to the patent license fee and nothing else. And that number was having a range from $1 million, which was awarded earlier and overturned by Supreme Court. And another number from Kiri side was $40 million. So now it's up to the court to divide and pitch any number between $1 million and $40 million and whichever number they pick then it would be more than $600 anyway.

So $600 million is just for the valuation of our stake plus the patent fee that could come anywhere between $1 million to $40 million?

Yes, yes. So whatever number its upto -- that is to decide, and that would be the number in addition to $600 million, correct.

Understood. Okay. And then on the business front, you had been slowly ramping up your plans on the Specialty Chemicals side. So any update on that front?

Yes. See, we -- unfortunately, we tried to add several products. We try to even -- first phase of our specialty intermediates are already operational, somehow we entered into a phase where market has not been supporting. And that we see on the results fronts. And I think the ultimate dependency on textile is affecting by chain effect on the demand side. Just to give you some numbers. Usually, India exports every month reactive dyes to the tune of 18,000 to 20,000 tonnes. And last 4 months, the numbers indicate only 10,000 and 10,500. So we are running at 50% demand, and that is affecting our fixed cost per unit. And that is what we are trying to address on immediate basis currently. So even though our facilities are operational, even though we have certain products which could be now adding more margins to us, but due to market flatness, and the price issue, we are not able to get fruits. But let's hope that things change in the next quarter or 2.

So is the expectation that your profitability has now bottomed out at least at the EBITDA level. And at the consol level, in Q3 and Q4, we should see positive EBITDA numbers?

Absolutely. You will see the -- now we are bottoming out, and you would see the change, which will be happening at a better level on consol level as well as stand-alone. Again, please take in mind that even in this quarter also our -- and the earlier quarters, our running legal expenses are ranging somewhere between INR 14 crores to INR 18 crores, right? When you add that on consol basis, you will have profit instead of INR 7 crore loss. But unfortunately, those legal expenses would continue if we -- this quarter, it would be lower. But once we enter into enforcement phase, again, they are going to be there, maybe slightly lower number, but we will see the continuity of legal expenses.

So if you can talk about a little more of this enforcement process, what will it look like? Because once the Supreme Court has given the judgments, Senda has to pay up, right? So if you can just give us more color on what do you expect, how it to unfold?

I -- see the way the process will follow is once the final number is announced and given by SICC, there would be certain time, and there is a 21 days notice that we would need to issue, the legal, for the recovery of the amount, okay? So that will happen immediately as soon as the result is out. And Senda is supposed to honor the judgment as early as possible within 21 days. And if it is not honored, then we will have to go back to court and then we will have to -- we will have to induct and request call to intervene in the enforcement.

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

Yes. So my first question was basically around China. So what would be our dependency in terms of percentage in imports as well as exports to China?

Right. See, currently, exports to China is very, very minimum. And it is next to nothing. While import dependency on China on certain products are still there. To give you an average at least 20% to 25% of the requirements of raw materials continue to be coming from China, being served from China as on today. So that dependency is continuing on certain products. There are areas in which on the finished product sales also, we have competition from China. And for example, prices of [indiscernible] today has been drastically reduced in China and some other intermediates also drastically reduced China. And that is putting backward pressure on Indian producers to match those prices and that's how even the global prices due to the competition has gone down to bottom. So to the extent that those are nonprofit-making and certain loss generating price levels have come. Unfortunately, due to lack of demand and excess supply we have reached to this level.

And sir, I assume that the raw material would be coming through sea route, so from which ports -- if like we only operate through Shanghai Port or it's like which ports did we operate through?

There are several ports. One is Shanghai and then another port where we get a lot of material is Ningbo, so it's also coming from Ningbo and one more port. I think there are -- Tianjin is also there [ cyanuric fluoride ] and certain raw materials are coming from Tianjin. So there are several ports we import from China. Fortunately, freights have come down. So sea freight from China have been reduced, and they are almost half compared to the peak levels that we experienced earlier. Certain [indiscernible] naphthalene derivatives still China dependency is there. And [indiscernible] and its derivatives still China dependencies is continuing.

And sir, lastly on the China factor basically. So in October, there was news on closing of this ports because of COVID, and recently some ports have reopened and the traffic has risen. So is this -- have they reopened, like what is the current status as of now?

I think -- so there was a lot of hitch-up and disruption when Shanghai was closed, if you remember a few months back, right? And then certain goods were diverted from other ports. But now it's moving out and getting regularized. So situation is much better now from Chinese port operations compared to what was a month or 2 back. So yes, it has improved significantly now. Earlier, after placing orders we were estimating at least 2.5, 3 months now, we can expect material to come in 1.5 months, 1 month to 1.5 month. So it is coming on track actually.

Sure. But there is still some delay in the transit.

There is some delay. And sometimes transit [ boards ] cause delays to the extent of 20 days, 25 days. Things like that. So those transit problems are still continuing.

And sir, lastly, on the raw material front. So there has been -- the price correction in commodities. So -- when will we see the benefit of the decline in commodity prices for us?

The major commodity prices, which we depend on are the prices, for example, related to caustic soda. I mean, the caustic prices reduced from INR 70 to INR 60, but comparatively still much higher. Similarly, prices of sulfur went down to INR 8 and then increased back to INR 16 INR 17. Soda has reduced from peak of INR 46 to INR 36, INR 37, but still continue to be at a higher level. So those commodity prices, which relate to our business have not -- are not crashed actually, have been still continuing at a relatively high level.

Okay. So, sir, this INR 8 to INR 16 [indiscernible] prices and caustic soda, this you are comparing between Q2 and current quarter?

These are -- these have increased from Q2 to the current quarters, et cetera.

[Operator Instructions] We'll take the next question from the line of Mr. Namit Mehta from KC Capital.

So first is I know that you have hired a few new people for the new projects over the last couple of years. Are these people stay in the organization? And if yes, what are they doing as we wait for the [indiscernible]?

They are still there in the organization. They are still working on several project analysis. So they are still there. They are still there. And everyone is waiting for the funds to realize from Singapore. I think implementation of the next phase of projects would wait, and they are working on, for example, various fronts. So they are working on environment clearances, for example. They are working on technology evaluations and technology tie-ups. They are working on further reducing capital investments on each projects what can be done. So all the paper work and the clearance work is going on, but not the implementation of the project side.

Okay. Got it. And just one further question on the capital allocation side here, 2 parts. One, any further thought on the dividend/buyback post proceeds. Any sense on the quantum that you would like to distribute. And then as a correlating to that more sort of macro level question on capital allocation here, where you've historically deployed a few hundred crore in operational business. Now you're going to get INR 5000 crores potentially through the quarter odd -- you've talked about levering up on that as well. So maybe INR 6,000 crores, INR 8,000 crores so what sort of gives you the confidence of deploying such large sums of money when that's not really been the case historically.

Right, see the first -- we never had this kind of money historically, right? So there was never need historically. Historically, we have been in the business of dyes and intermediates and we do not intend to deploy these funds into the current business because it is not required besides INR 100 crores, INR 200 crores of working capital, there is no further deployment would be made in dyes and intermediates industry because it is not needed. So entire chunk of money for future projects would be of a different scale of a different size. And it would make sense to have and create, as I repeatedly said earlier, we are at different platform for Kiri. So it would be a transformative platform. And with that, there is no prior experience. But the team which would be deployed, the new management bandwidth for these projects, which would be hired would have a lot of experience to implement, run and operate this size of businesses. So we have aspirations to do that. And hence, coming to your first question, we would deploy a majority of the funds in projects phase-wise. It's not like we will start 3, 4 different projects at a time but we would be slowly meticularly and prudently deploy funds for the larger projects for the larger size of businesses in future. And some portion would again given back to shareholders, either dividend or buyback. Now what could be that quantum again, is not decided yet. But as soon as the number comes out, we will deliberate and definitely, the Board will decide that number. So I'm not able to give you a specific number, but yes, there will be a number to it in anyway.

Okay. And just to -- sort of understand in a little bit more, given the profile the new businesses will be pretty different from the existing business, why not sort of return a larger portion to investors and reinvestment through non-listed entities or independent entries. Why do that within the fame of Kiri, given that they're going to be businesses in different industries, not necessarily linked to the core dyes business?

Right. So the way we structure those new investments through new subsidiaries and the separate value creations can take this. We see this the fundamental reason to ramp up and to change the platform of Kiri with this one -- once in a lifetime opportunity is for the benefit of shareholders. We would be entering into the projects that would be giving us much better return than what the financial securities or others would earn for the company. So we would do these projects only if we see the return on investment and return on equity for the shareholders are substantially better than the other options. And if we see that the return on equity or return on investment are not high, we may decide otherwise to give back. It all depends on what kind of returns we are able to generate to the shareholders with this chunk of money.

Okay, sir. And then last question, since...

May we request you to return to the question queue, sir. We have many participants waiting. We'll take the next question from the line of Mr. Nishant Maheshwari, fellow investors, please go ahead sir.

My question is related with the -- my question is related to [indiscernible] respect to [indiscernible] where the court has -- where SICC has allowed earlier [indiscernible] method. So in [indiscernible] what is the value which we have seen from the court with respect to the valuation? Is it in the range of $40 million so $591 million plus $40 million is the total value which we have [indiscernible] $631 million.

Yes. So if you look at that para in which the DLOM specific number is mentioned, correct? So you add that to $480...

DLOM is not to displace because if we had DLOM around, it comes to $591 million. And when we talk about this O288 notional fees, what is the valuation which we have seen from the court?

Right. So we -- our side number in the court was $40 million. Court earlier awarded was $1 million, which Supreme Court has reversed and reverted back to SICC to decide between any number between $1 million to $40 million. So as you rightly said, whatever number judges decide between $1 million to $40 million based on the existing evidences before the court. And whatever numbers that the court finds appropriate, that number would be added to that. And that would be the -- that is the range on between $1 million to $40 million, correct.

$1 million to $40 million, okay. Sir, what is the role of the company in Mauritius? We have incorporated in 2009, a company called Kiri International Mauritius Limited. So it was named as a dependent company [indiscernible] when I checked in SICC side. So what is the role of this company and what is the present status of this company?

That company was closed in 2012, okay? And it was opened in 2009 to acquire DyStar through Mauritius step-down subsidiary of Singapore. So in 2009, Kiri Holdings Singapore was formed, which was then changed to DyStar Global Holding and original idea was to have a step-down subsidiary in Mauritius. And then Mauritius acquired DyStar entities in 2010. So that was the intent. It was opened in 2009 but then the Singapore entity is acquired DyStar directly from Germany. So it was not required and then 2012 that entity was closed, but one share was there during that time. And that is the reason that you see that name during the acquisition time appearing in the court documents.

So right now, shares are held with Kiri Industries India or with the subsidiary?

Kiri India.

Kiri India, okay. So what is the cash level of DyStar and the value of associated companies? Are they comfortable in honoring the judgment?

Yes, the cash level of DyStar based on our understanding by end of December would be more than $500 million, and there are no bank loans in DyStar.

This is the operator, so the connection for... So we take the next question from the line of Mr. Purav Shah from [indiscernible].

My question has to do with the project that we're looking at is the new capital that we are expecting. Just wanted to understand, are there any reasons we are looking at such a wide range of projects and sort of concentrating on maybe 1 or 2 because it is unprecedented to see success in so many projects simultaneously under one roof?

You are absolutely right. We are looking at number of projects and evaluating a number of options. It's not 1 or 2, so we still not decided which projects we will commence and which project we would select. There is a separate committee, the Board has formed and that committee will review the projects when time comes and make prudent decisions where to invest and which projects to invest in. So we are still at the evaluation side, and we are evaluating a number of projects. The separate project teams are evaluating the large number of options and not limited to few projects.

Okay. But just following up on that, like if, let's say, you like 5 projects, is there a limit to the number of new ventures will be looking at like 1, 2, 5 how many ever it could be? Or is it open as of now that how many of the projects we like that are feasible that we go ahead with?

You see that we are open with which projects and it could not be 1 or 2. It should be multiple, so we diversify our risk. But we choose a project which makes the best business sense and which has the best earning potentials for the shareholders.

Okay. And just another question on your balance sheet, the payer -- does the trade payables keep going up. So is there any reason that it's now close to INR 300 crores, that number is increasing quarter-on-quarter?

So if you recall, company had an obligation by September and to pay INR 68 crores, okay, it was the pre-settle guide and that has become -- that has gone now. So some of the working capital funds were utilized to pay the pre-settle liabilities and all the ARP loans, which have been there in the company since last almost 7, 8 years, all have been repaid. So we are, from that sense, completely out of that bad debt.

Okay. So next, in the coming few quarters, this should drastically improve, right, then, right?

Yes, it will improve.

Take the next question from the line of Mr. Jay Bathija from JV Investments.

Sir, my question is repeated to last quarter only. So we have been expecting the [indiscernible] and the company's business to improve, but some how we are always giving the same replies as we will improve from next quarter or something or just some environmental changes. But when can we expect that to be seen in the results? When can we see the results are profitable for the company?

Let me put it this way. Currently, the market situation and the dynamics of dyes and intermediate industries are uncertain, right? So when we are hopeful and when we give you a positive outlook, it is based on certain improvement assumptions. But to be honest with you, the markets continue to remain uncertain. And as you can see, the entire export of dyes from India is at half level, correct? Now in such a scenario, you can understand that even the textile sector has been doing -- slow and not well domestically. So we hope and we try to make certain changes internally to improve the numbers and to improve the bottom line. But top line, whether we would be improved or not it is still uncertain. Right? So you said very rightly, but unfortunately, from operations side, the reality is uncertain. Now the second part of your question about the court judgments. And as I mentioned before, once the judgment is reserved in Singapore courts, there is no specific time line that it would be announced or given. So as on today, we have 3 reserved judgment sitting in Singapore Supreme Court as well as International Commercial Court, but we can only hope that it will come in a reasonable time. And based on that hope we give you guidance that it should come. But the fact and the reality is it can come maybe today after our call is over or it cannot come even for next one month or so, which I have neither idea nor visibility. Nor our counsels and lawyers have any idea of when it would come, right? But we can only make a statement based on the expectations. Now if you look at certain judgments of the July onwards or August onwards in the International Court, they have come. Certain judgments were -- but our judgment has not come at. Now -- so that's the reason that we wish to give you a good news. But somehow the system and the judiciary is testing our patience.

And my second question is, we have a lot of time like to decide what all project we want, so have you shortlisted any 2 or 3 projects or still the company is under survey to shortlist any project?

Companies will continue to survey and it is best interest of the company to continue to survey till we have visibility of the funds. Right? Anything will be freezed now. And after 1 or 2 years, when the implementation starts and if the market changes, you should not be retrospectively regretting your decision. So that is the reason that we would continue to evaluate rather than biasing ourselves to 1 or 2 specific projects. And then we will make a decision at an appropriate time. And as I mentioned, there is a separate committee created under Board and which will continue to review all the projects that the management evaluate.

[Operator Instructions] We take the next question from the line of Mr. Kalpesh Varma.

Last year same quarter earnings con call, I asked you when the promoters are going to increase their stake in the company. You mentioned that very soon, already one year has past. So why the delays, whether this price is not favorable for the promoter or what?

It all depends on where promoters can have excess of funds, Kalpesh bhai, right? So promoters have been very keen even today also to increase it. But it all depends on how promoters are able to arrange and infuse funds, right? So that is where the delay has happened. But again, the intention and the eagerness continue to be increase stake as soon as we can.

Okay. And next one is that during quarter 3, quarter 4 con call in FY '21, you said that one Senda goes into the appeal for the SICC order, you will ask the court for part portion of the amount to be transferred to the court, something like that was in narrative, what happened on that portion?

Sorry, I didn't understand your question.

During the SICC order in 3rd, June 2021; before that, you were saying that when Senda goes to the appeal for this main case, [ $483 million], which was awarded. You said that you will ask the court for the part portion of the buyout money to be transferred to the court or escrow like that for the guarantee for purpose.

Yes, yes. So see, after -- see what happened after that, average June 2021, there were 2 things which happened. One is to go and file an appeal in the Supreme Court and second was to get a stay on the enforcement of June 21 order, correct? And Senda has not been able to -- has not secured a stay. On the SICC order of June 21. So technically, Senda is running in continuous default since June 21, because not being able to secure a stay. Now Kiri wanted Senda to give some money, put some escrows and without them -- without that, the stay should not be granted and that never happens. So they could never secure stay. And even today, they are technically running default for more than 1 year and 3 months.

Okay.

Right? Now the appeal was admitted -- an appeal admission was a different process and Supreme Court of Singapore did admit the appeal being one of the large -- and one of the bigger cases running in Singapore High Court and Supreme -- and the International Court. But eventually, today, because they're not able to secure stay, Kiri can claim that they have the content of court, because of not being able to honor for such a long time.

Okay. So any assurance has been taken from the Senda that they will make the payment as soon as now the SICC gives the judgment in 21 days?

No, there is no time line or there is a statutory recovery time line of 21 days. Okay? So 21 days is a legal -- general time line, and that is a practice that we will have to follow.

So after that, you're sure that you have to go for the enforcement order?

Yes. Up to them. So if they don't pay in 21 days, then we have to start the enforcement process.

So post enforcement order, how much time line you are expecting within which the payment will be received?

Well, that depends on the court, how much time court gives them. So the way the process usually follow is a court will take control. And then depending on hearing them, court will then decide what would be the time to be given or not to be given any time. It depends on that.

Next question from the line of Mr. Dharmendra Jakhodia, Individual Investor.

We are an investor in our company from like 8 to 10 years. Now the only question arises because the promoter holding is only 27% and if you are expecting such a big amount from Singapore Court, why don't the promoters start buying from the market so that the investors get the confidence. Any plan on that?

Well, as I mentioned, we are always keen to increase our stake, and you will see in future, but I cannot commit you on any timelines, number one. Number 2, buying from the market by promoters also depends on the funds availability with promoters, correct? And currently, that is not there. So that is the reason that promoters -- and promoters buying from the market or promoters increasing their stake, right, may is work in progress. And at appropriate time, you will see what happens. I cannot give you any specific answer right now. But only thing I can say is that promoter is extremely keen and very much having interest to increase their stake.

Because as an investor, we should have some confidence because we always see that INR 12 when the FCCB was converted and there is always a fear that FPI will sold off the entire stake and the investors will not get any money out of it.

It depends on the holders, right? And if they sell they sell. So it's not been as companies control or anybody.

Yes, I agree with you because we are only concerned that the promoters are...

Right. So in respective of the stake of the promoters, the...

I'm sorry to interrupt, sir, I think we lost the connection for Mr. Dharmendra. We'll take the next question from the line of Mr. Rohit, Individual Investor.

Recently, there have been a certain investors who have been systematically selling the shares daily. Has the management have tried to have a call with them to understand why are they leaving stake in the company and are continuously selling the shares?

No, there is no discussion. There has been no discussion neither the company or the management has approached them, and I don't think that is effective. I think whoever wants to buy, whoever wants to sell is their own decisions. We do not intend to interfere in that.

Okay. Okay. And sir, can we expect to be profitable for the financial year '23 on a consolidated level?

Well, on consolidated level, profitability will be there. By the end of the year.

Lastly, one in general comment as an investor I have with respect to Kiri is, so generally, as a shareholder investor, any [indiscernible] positive movements, even if there is a rumor that something is going to happen. But for Kiri there is no rumor, there is 100% surety that Kiri India will receive huge amount of money within one day or within one year. Actually, I do not see that positive moment from the shareholders. I don't know what is missing, but I think management should try to understand probably something is missing, some management -- or there is definitely something missing that even after 100% surety that we are going to receive such a huge amount shareholders do not see that positivity.

I think I can only make assessment what you can make. And one of the reasons these investors and even us also as a management and the company expected since 2015 beginning to get the Singapore court issues that resolved in 2 to 3 years. And it has been now 8 years. From 2023 beginning onwards, we will be entering into a 9 years of legal battle, correct? Now this 9 years and the extended delays after delays then the one hearing, then the COVID and then the appeals and then the side cases. You see -- so 9 years have tested everyone's patience. And because of that, I think there is a market perception where it would come and when the company will have the next phase of growth in which year when, when 9 years have passed. So there's always a negative feeling about it. I think that is what is affecting the share price. If you ask me honestly, that is what I can interpret. And it is rightfully so because -- but when -- so the market would naturally think that let us believe when the money comes, correct? Now as of today, do I know that the money will come in December, no. Now do I know that the money will come one year from now, no. I don't know, correct? Do I know that the long stand would honor the judgment or not, I have no [indiscernible] intend to judgment [indiscernible] judgment or not. So with all these uncertainties, the market and shareholders perception would be not incorrect saying that let us see what actual results comes in and out of 9 years legal battle. And we ourselves were thinking that well by 2018, all the cases would be over and will have penality of the judgment and out of this legal mess, then 2019, 2020, it should definitely happen. The legal counsel say that it is out of limit which would be able to go through the court process, 2021 also past and we are ending now 2022. So see, that's where the basically patience run out, correct?

Okay, sir. Lastly...

We request you to rejoin the question queue. [Operator Instructions]. We take the next question from the line of Mr. Pramod Kataria, Individual Investor.

I have a question -- there is a follow-up question. Now as we are saying that your court battle has been going on for 9 years. I'm also been invested in your company since 2014, '15. Now everyone is aware, now it's a fact that the company is going to receive INR 5,000 plus crores. Okay? Stage-by-stage SICC then -- what do you call the appeals and a lot of things happened and their valuations -- it took a lot of time. Now its a fact, no one can deny them the company is going to receive INR 5,000-plus crores.

Absolutely. Absolutely.

Then why no one is interested, it would have been like some other group like [indiscernible] or any -- by that matter, any big valuation metrics and revaluation would have happened. But no one has interested in industries at the moment, whether -- have you not done anything like to improve the perception or -- like whatever it has to be done by the promotor group only that to give the confidence and lot of things, INR 5,000 crores, INR 2,500 crores is the market cap for the company. INR 5,000 crores, we are going to receive the amount. The book value itself will go about [ INR 1,100 ] -- right now, the book value is at INR 496. The book value will be [ INR 1,100 ] why no one is interested?

I think the same question I have what you have, correct? So I have no clue and no idea of why the shareholders do not want to put in. I am aware of what is happening, and you are also educated well enough. You also know that the cases have been completed. Supreme Court hearings have been completed. Numbers are getting crystalized. Maybe $10 million, $20 million plus/minus but broadly, the numbers are there, but still the enough interest has not been generated. All these information which you have all in public domain, right? And repeatedly, whenever we interact with the investors community or the analyst community, as we have explained again and again, and all evidences are there in public domain. So still, if the valuation doesn't come and our valuations remain under value, that's only the market can explain. As a promoter and the management, I wish that the value as it come same as you. After knowing all these things, as educated investor, how you know but somehow it is not there, which is reality as on today.

Mr. Pramod?

Think we lost him.

I think we lost his line, sir. All right. Ladies and gentlemen, that was the last question for the day. I would now like to hand the conference over to Mr. Anuj Sonpal for closing comments. Please go ahead, sir.

Management will make the closing comments. Manish, all over to you.

I thank all of you for sparing your time and for participating in today's call. I'll discuss with you next quarter, hopefully, with better numbers and better results. We'll see you next quarter. All the best. Keep well. Thank you very much.

Thank you, everyone. On behalf of ResearchBytes that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.