Mold-Tek Packaging Limited (533080) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Mold-Tek Packaging Limited Q1 FY '27 Earnings Conference Call hosted by Emkay Global Financial Services Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rajesh Kumar from Emkay Global Financial Services Limited. Thank you, and over to you, sir.

Good evening, everyone. I would like to welcome Mr. J. Lakshman Rao, Chairman and Managing Director, and also thank you for this opportunity. I shall now hand over the call to him for the opening remarks. Over to you, sir.

Good afternoon, gentlemen. Thank you very much for your interest in our company's quarterly results conference call. I'm glad to inform you that we have made a historical quarter. The turnover crossed INR 300 crores, partially helped by increased raw material costs. However, one of the most important points here is the per kg EBITDA has shot up to INR 46.7 per kg, which is historically around INR 40, INR 42 was the best in the last several years. So this is a good turnaround because of the increase in sales in Pharma and Food and FMCG, which are high value-add products and also mainly driven by the consolidation efforts we have taken up in bringing down the number of units in Hyderabad to only 2 units from 5 units earlier. So this consolidation and improved sales of high-margin products has enhanced our EBITDA margins considerably in spite of the economic disturbance all around the globe due to the war situation. So that's fairly a good quarter where in spite of the price hike, we could successfully pass on the raw material price hike to all the clients. And with the internal efficiencies and consolidation, we could improve our profit margins considerably. This is briefly the introduction, and I hope we can discuss more on question and answers. Over to you, operator.

[Operator Instructions] We take the first question from the line of [ Divyanj ] from [indiscernible] Asset Managers.

So my first question is, over the last few years, the company has diversified beyond decorative paints. And looking ahead, what would be the ideal revenue mix across -- what portion will be except our decorative paints over the next few years?

It is currently value-wise 46%, but volume-wise, is around 50%, Paint alone. And probably it will start stabilizing around there or it might come down to 40% over the next 2, 3 years because of the increase in Food and FMCG and Qpacks is much sharper than and Pharma are much sharper than growth in Paints. So I hope in 3, 4 years, Paints as a segment might contribute around 40% from current 50%.

Okay. And any other segment in which we are looking to enter?

Yes, we are already growing in food now. Food is now contributing to almost 24%. And if you consider Qpacks also, it is around 28%, 29% of the products are sold in Food. Pharma is only 2% in terms of weight, that is volume, but about 3.5% in the overall sales. So these numbers will shoot up rapidly, like, say, 40%, 50% CAGR for next 3, 4 years. And Food and FMCG might grow at least around 18% to 20% CAGR. So whereas the Paint might grow around 8% to 10% currently, it is 10%. So at that rate, Paint will slowly lose the share from 51% currently to probably 40% in the next 3, 4 years.

Okay. And could you help us understand like what percent of incremental revenue this quarter comes from new customer or any addition?

New customers, several customers have been added in Food and Pharma, not one or two. In Paint, of course, it's a more mature market where we have the top brands with us for last several decades, I can say. So in the Paint and Roofs, there's not much of new additions. But in the Food and FMCG and in Pharma, there are several clients. I can't list. There will be more than 10, 20 clients added in this quarter.

Okay. And in percentage terms, can you give like in Food and Pharma, how much came from new customers?

Percentage terms, probably if you can send a mail, we'll reply to you. There may be 3% to 5%. But overall, Food and [indiscernible] growth is 24.2%, which is considerably much better than what it was in the last 2, 3 years.

We take the next question from the line of Dipak Saha from Ashika Institutional Equities.

Sir, just a couple of questions. First, on the volume side, if you can help us understand the 6% growth. Is it because we apply new selective approach as far as the current market conditions are concerned? Is this the reason that the volume growth was relatively low? And second, on the EBITDA per kg side, how sustainable this number is, because one part is obviously, Lube has come down and mix has changed. But if you can share some color and attribute the reasons behind this EBITDA per kg improvement. These are the first two questions.

Yes. Volume growth is tempered a bit because of drop in Lube segment. Lube segment has dropped by 17% -- it's mainly because of base oil unavailability with a couple of private companies who could not -- due to the war in Iran, their base oil procurements have been affected, which impacted their sales and volumes and which in turn affected our sales in Lube segment. So Lube being almost 17% to 20% of our sales, a 17% drop has impacted almost directly 3% to the volume growth. So the 6% volume growth, what we achieved would have been 9% had even Lube remained at the same level. So Lube is an -- the disappointing performance this quarter, which is beyond our hands because of the input problems of base oil to the -- some of the private players. So they could not get the oils in time. And in turn, we lost the volumes. So that is about the volume growth. But I also told you in the last quarter, as Pharma growth is 38%, but it won't reflect too much on the volume because they are lightweight containers, lightweight components. So on the volume side, it will now -- anything around 10% is a great volume growth given the war scenario. But what I'm very glad about is the EBITDA growth that has been achieved through consolidation of our units and improved efficiencies and a little bit better capacity utilization compared to the last financial year. So all these three are long term in nature. And as you asked, we are bullish that we may be able to cross our projected INR 42, INR 43 EBITDA for the year marginally. Maybe we are now aiming at INR 44, INR 45 for the full year.

Got it, sir. So the way to look at it is that incremental Y-o-Y EBITDA per kg growth would more normalize from INR 46 that we have seen in the current quarter in Q2, Q3, Q4, we would have a little bit of a normalized growth on the EBITDA per kg side compared to last year. Is that the right way to look?

It will be better than last year, certainly because Q2 and Q3 of last year, it was below INR 40, but we are aiming still at around INR 45 this year because the cost advantages and the consolidation benefits will continue to accrue. And we have other areas of automation, which we have started recently, which will also start contributing in a couple of quarters. So things are looking brighter because productions what have been done are long term in nature. Consolidation of units is a onetime thing, but its benefit will last forever. That's why we are confident -- increase in Food and FMCG and Pharma, we are confident to sustain momentum in the EBITDA.

Got it. Sir, one last question on the Paint side, 11% volume growth, 30% revenue growth. This 20% value growth that we have secured, if you can just share some color? Is it more one-off or this is looking sustainable? How should we look at volume and value growth going ahead on the Paint side?

This 31% growth rate in paint and 10% in volume is basically eaten away by the raw material price rise. So the sustainability of this will depend again on the raw material movement. If the raw material stabilizes or comes down, this gap will slowly come down. So whatever -- what you should appreciate is company could immediately get the price rise due to the war, the raw material shot up from INR 110, INR 105 range to almost INR 155. So the company could get that money with quick timeframes from the clients and able to sustain or enhance our EBITDA. Otherwise, we would have seen EBITDA affected. So this shows the relation what we have with our top clients in the Paint or Lube or even Food industry and also the confidence they have on Mold-Tek. So we are able to pass on the price rise as and when the price rise happened and able to sustain our margins, rather improve our margins.

We take the next question from the line of Raj Shah from [indiscernible] AMC.

My first question is on our Qpacks volumes. So they have come down sharply, growing at close to 20% last quarter to 2%. So what was the reason for the same? And secondly, in terms of -- and secondly, on Pharma also, I mean, on a quarter-on-quarter basis, our volumes are up like 2%, 3%. So how do you see this ramping up? And in terms of our target of close to INR 55 crores of revenue from Pharma. So I mean, what kind of growth do you see in the next couple of quarters?

Yes. In fact, the price -- the rise in -- sorry, the growth is only 2%, mainly because Qpacks is a little price-sensitive segment. It is mainly used for edible oil and cashew and edible oil industry has been under stress because of the increased freight costs and oil prices on one side. And with such a shot up of raw material price from INR 100 level to INR 150, they were a little instant to increase their sales and volumes. So that is one of the major reasons. Even companies which have moved into our Square Packs have gone back to tin or other forms of packaging tentatively. And that is one of the reasons why Qpacks is a little -- growth is disappointing. But now we set up our Qpacks facility at North, which has started adding numbers and also in South in Cheyyar. So we hope that coming quarters, we'll see double-digit growth in Qpacks again. That is your first question. Coming to the second question, Pharma, we reached 41% growth, which is a sizable growth compared to last year Q1. Even in the volume terms, it is a 38% growth, which I'm sure you will appreciate is a big jump given the scenario. And at this stage, we already have about a quarterly projection of INR 11 crores to INR 12 crores, which can go up to INR 14 crores, INR 15 crores towards the end of the year. So we are still looking at a INR 50 crores, INR 55 crores target for our Pharma, so which will be like almost a 50% growth over the last year number, INR 34 crores, what we achieved. So in Pharma, we are definitely on a strong wicket. And we also have plans to get into ophthalmic range of products for which trial models are completed and commercial models may take another 5 to 6 months to arrive. So hopefully, from beginning of next calendar year, we'll be entering into that. And we also are looking at other medical devices like dosing pens for which we are looking at ways to shorten the development period, but no firm plans as of today. But certainly, that is another product we'll be landing in, in the next financial year.

Understood. Secondly, on your finance cost, we have seen a sharp increase on a quarter-on-quarter basis, close to 20%. So what is the reason? I mean, last quarter, I think we have said that we'll not be increasing debt from here on. So what was the reason for the increase in finance costs?

See, increased finance cost is two reasons. One is the raw material cost goes up, our working capital needs go up. So on that -- on a higher volume of material cost, we will be paying the interest to the bankers. So overall working capital, the raw material cost has shot up, if you compare it to last year, fourth quarter is INR 97 average price it is INR 130. So almost 35%, there is a jump in the raw material cost. So our raw material inventory costs and carrying costs also will go up accordingly. So that is one of the major reasons why the interest has gone up. It's not because of term loans. Term loans also, of course, are there, but not to the extent of this much difference. This 20% rise, what you see there compared to the Q4, 20% rise is mainly due to the cost of raw materials and goods, which shot up in the [indiscernible] period. So that has to be -- that is the reason for the increase in finance cost.

Sir, lastly, just on Vibe, is there any update in terms of JV? I mean when do we see volumes...

We have developed three products now, which they have got applied for patent. And another six products -- 3 products which constitutes 6 components are also getting on to the pilot stage, probably in the next 2 months, they will also be ready. And together, they want to go for -- they already applied for IP for these 3 products. And another 2 products also they want to go for IP. And they are already taking the call on IP expenditure and marketing efforts. And even they have agreed to participate in the new [ mold car ] to the tune of $50,000. So all this as well. But as I said, it is a long call. Probably towards the third quarter, we'll be starting some commercial products for Vibe.

Any target for this year in...

Probably a couple of crores we may do in the last quarter because these products are very high-value add. They are even better than or at least equal to Pharma products in terms of EBITDA. So once they are launched, the volumes also can shoot up. And probably next financial year, we'll certainly see decent numbers coming from.

We take the next question from the line of CA Kaushil Sharma from Equinox Capital Venture Private Limited.

I just wanted to understand that you selected that you have passed one the prices [indiscernible] quarter-on-quarter [indiscernible] and your revenue growth is around 46.6% but your gross profit has grown around 12% and EBITDA has grown 16%. So there is some cost absorption. So there is drop in gross margin from 46.60% to 41.31%. So what is reason of this?

If you notice, our EBITDA shot up by 12%, which is a very big jump from INR 40.7 per kg to INR 46.7 compared to the last full year. So that is a very considerable achievement. The price -- the revenue rise looks high because of the inflationary trend in the raw material, which we could successfully collect. Otherwise, it would have impacted our EBITDA per kg. So EBITDA per kg has gone up because of the efficiencies and consolidation what we had taken up in the last financial year. So these are the reasons, and we could effectively pass on the price rise of raw material from -- if you notice the raw material cost, it was INR 97 in the Q4 for the full year, INR 107 in Q4, becomes INR 130 now. So the revenue growth is partly due to the inflationary raw material price. But the proof of the pudding is EBITDA growth. So EBITDA growing by almost INR 6 over the last year number, is a big relief or proof that our efficiencies and consolidation are adding to the bottom line.

Could you please explain what kind of value-added products in Pharma that we are going to launch or planning to launch [indiscernible] ?

Yes. Currently, we have 3 set of products. You know that bottles and caps, variety of caps. We have EV [indiscernible], and canisters. And now currently, we are working on some other products, including dosing pens wherein IP requirement is there. So we are trying to work-out with a suitable IP holders who will be able to give us the IP rights and able to bring the product here in India. So that will cut our development time from 3 years to 1 year and enable us to get into this business within a year's time. Even some imports can be done during this period to do the market seeding. So that's why we are going -- so that is one product wherein we are putting efforts. We are also looking at semiconductor trays. That will be a little longer short because by the time semiconductors and chips are made in India, they will be needing a lot of packaging support. And this packaging is very high end if you -- I mean, accuracy and high-end raw material requirement, understanding of the technology is very much needed. So that is one very high-end value-add product we want to look into in the coming years.

So what kind of margin...

EBITDA margin, it could be very high, something like INR 150, INR 200, I guess, we are still having basic data. And that again depends upon the capacity utilization, but it will be at least double that of Pharma is my guess because the material used, the dimensional accuracy required and temperature characters, all that are very demanding. It is a step ahead of Pharma. So there are very few players in the entire world who are doing this. But Taiwan and Korea are the main countries. Of course, China also, there are suppliers with a good technology. We are trying to find some good technology partner to enter into this. That is a little longer shot. But pens is one area where we are focusing now and hope to get into that business in a year's time.

And what kind of capacity are we putting for these pens and...

So currently the capacity requirements are shooting up in India, not only for diabetics, but also for semaglutide and other products that are expected to move into disposable pens. So once that volumes come up, the volumes in this country or even exports to the African and other countries can be of sizable numbers. So we are still at the [indiscernible] stage now, depending upon the plans, it could be 1 million tonnes per month will be the minimum capacity we'll be starting with.

And this revenue will come from the next financial year, right, as you said?

Yes. It will take at least 1 year to get the validations and clearances from clients. If any tie-up happens with a couple of foreign suppliers we are working with. In that case, probably some imports can be done in this year itself. Otherwise, it will take at least a year to get into that business.

We take the next question from the line of Shirish Pardeshi from Motilal Oswal.

I just wanted to check a few things. This quarter, our Lubes volumes were lower. And because of that, our EBITDA has shot up to INR 46.5. What I'm trying to understand, if you can give me a number, what is the Lube quarter 1 EBITDA per kg? And in future, once Lubes order comes back, will this EBITDA looks like towards INR 45 or will be lower than that?

Lube as it is not a bad contributor. It is averaged somewhere around INR 35 to INR 40 level. Yes, Lube coming down is not the reason for improving the EBITDA. Improving the EBITDA is mainly due to consolidation of our units, which has reduced overheads, wastage, interunit transfers and rejections, which were happening in printing, especially because our printing units were spread in three locations. Now we brought them under one roof in Sultanpur. And also a couple of units closure reduced our overheads considerably, right from power cost to the supervisory and managerial staff. They could be used elsewhere or we let go some of the people. So the overheads have come down considerably. Interunit transfers have come down and wastes and rejection rates have come down. So these are long term in nature. So that is why we are confident about a consistent EBITDA growth in the current year in spite of moderate volume growth. And you must appreciate that in spite of the war situation all around, other than Lubes, all our other segments have done well, especially Pharma and Food and FMCG grown by 38% and 24%, respectively, and Paint by 10.8%, which is a fairly good number. So only Lubes are down due to the base oil disruption in a couple of our clients' locations. They could not get the base oil because of their dependency on Middle East. And of course, Qpacks, as I explained, is a price-sensitive market, edible oil and cashew users. And so they were a little hit when the raw material shot up by INR 50 per kg. But they are coming back now. We are seeing the trend is returning for at least a modest 10% growth in Q2.

Okay. My second question, our core business, Paint has grown about 11% and Food and Fmcg has grown 26%. However, there could be ablation because quarter 1 overall volume growth was about 6%. Now in this setup, how we should think about the full year volume growth because I think the core business will continue to grow at that speed. So I just want to understand, is this price is now settled and the growth looks better in second half forward?

Yes. For volume growth, as I said last time, we are aiming at 10% to 12%. Even today, I still feel 10% is possible because in spite of the war, we are very -- the clients are sticky with us and rather some more clients who left us are coming back because they know Mold-Tek can afford to maintain the material, produce at good efficiency and ensure supplies in time. So when any disturbance is there in the markets or general atmosphere around, they will fall back more on Mold-Tek. And the trend of IML adoption in paint industry is growing because the leader they have started using more and more IML brands, and Aditya Birla also using major -- more than 25%, 30% of their paints in IML. The trend is spreading into the lower players also. And they are coming back to us and hopefully, paint and -- Paints, especially, we will see a double-digit growth for the full year. If Paint remains at that level, if Lubes even come back to a 0 level of growth, Food and Pharma will pull up the numbers to make sure we are at 10% volume growth at least for the year. What you should appreciate is Pharma, the numbers are in weight-wise, they're very less compared to Paints. So even if growth is 10%, it's equivalent to a growth of 15% volume if Pharma is growing at 40%, which I think the trend is already in line with that. So now more than volume, I would look at -- one is definitely volume up to even 9%, 10% volume growth is equivalent to 14%, 15% of the past volume growth. And EBITDA growth of INR 5 we achieved INR 6, in fact, for the -- compared to the last year full year at INR 40.7, we did INR 46.7 is mainly due to the consolidation and efficiencies and better capacity utilization, which will be long term in nature. So that's why I'm confident this year, we'll be crossing our target of INR 42, INR 43 we set for the full year.

Okay. That's really helpful. My last question, have we taken any further price increases or passed on any raw material increases in the month of July?

See, whatever happens in the month, we pass it on in the next month. So if July, the prices have come down in the beginning. And again, last 2 weeks, they have gone up. And now today, they're back to INR 145, INR 146 compared to the peak of INR 155 they reached in the end of March. So again, the price is rising, but we don't know if the war comes to an end, I'm sure it will come down to INR 120, INR 125 at least.

Yes, I understand. The reason why I'm asking because you also eliminated the in-house printing levels. So there is a cost lever also sitting there and there is a margin lever also sitting there. So I was just saying that 46%, you're saying 43%, 44%, but I would expect the margin to remain stable at the same level at 18.5%, 19%.

I hope so.

We take the next question from the line of Chirag from Keynote Capital.

Sir, my first question is related to the price pass on that we are talking about. Tomorrow, if the price reduces, will it be fair to assume that our gross profit per kg would still remain in the range of INR 100?

Gross profit per kg at INR 100, where are you seeing that?

Calculating -- dividing gross profit by the volume -- because this is the entire pass on cost, right? If we are passing on -- if there is a price increase in raw material is about INR 30 from INR 100 to INR 130, and we are selling at INR 150. So it increases by INR 30. It's INR 180 -- increase from INR 150 to INR 180 due to which by [indiscernible], we look that the margins are down. However, on unit economic basis, the realization is still better.

Yes, yes. That's why I always encourage people to look at the EBITDA per kg, which is a correct sign of profitability in our line of business because the raw material is a variable which is not in our control. And the price goes up or down, we pass it on to the client in the following month. So that is still happening. So tomorrow, if the prices come down, it will come down and the percentage looks higher. But if you look at the absolute figure, EBITDA per kg, that is what matters. And that's where we have -- I'm very happy that we got almost 12% jump compared to the last year's number in spite of the war situation and in spite of the Lubes being impacted due to war. So this is through consolidation and efficiencies, which are long term and permanent in nature.

Right. Got it. Sir, second question that we are talking about the Lubes as a segment. If I'm not wrong, in Q2, we lost a big client in last year Q2, which led to a normalized rate of 1,800 to 2,000 metric tonne volume on a quarterly basis. So one thing is that it is still a normalized level? Second, I wanted to know was if the Qpacks segment's volume normalizes, which wasn't any growth because of the competitive intensity it has, that is the reason why you're talking that the EBITDA per kg, which is around INR 46 will come down to about INR 40 to INR 45 as a range.

Yes, yes. Because not only that, when the capacity utilization remains at the same level or maybe a little less, automatically EBITDA per kg will come down. So I'm sure that Lubes will compensate this quarter. They're not -- if not fully back, they're improved a lot. Maybe they made some alternative arrangements of the base oil. So a couple of clients who are impacted during the war are now back into market in terms of quantities. And we hope Lubes will get back into shape in this quarter. So that will overall reduce the -- I mean, improve the capacity utilization at the 75% level. If that happens, again, we may reflect on similar set of EBITDA per kg. Otherwise, probably marginal reduction here and there. But overall, yearly projection of INR 42 which I gave last -- at the end of last year will certainly be surpassed in this year.

Right. So next question is related to the new lines that we are getting into, the ophthalmic and looking to get into the dosage pens too. I wanted to understand what kind of size this industry has? And like even when we started to get into Pharma, the quality requirement that the plastic products should not mix with the ingredient, maybe the capsule or something else, we face that issue to bring up to that quality. Similarly, I guess that this is similar for the dosage pens because there is an API liquid API included in that, right? So just wanted to understand the learning that would be required. And as you're saying that once the IP -- we will get the IP done, the timeframe can reduce from 3 years to 1 year. Just wanted to have a ballpark view of how you are looking at this?

No, what I'm saying is in case we find a partner who is willing to share his IP and the validation data, which is like a tech support or a tech understanding, then the timelines can come down from 3 years to 1 year itself because then the testing already some of the suppliers abroad, we are in touch with. They already are in Indian market at various levels of testing. So if we tie-up with them, things can go faster like a few months or next 1 year. But if that fails and we have to come out with our own design and IP, it will certainly take 2 to 3 years. So at this stage, it's too early to comment, but we are on a track to see both options.

[indiscernible] the new plant machine for this?

No, that we already have the land. So we'll be needing at least 50,000, 60,000 square feet of area to start with, and that will be around INR 10 crores investment. And the machinery to start with would be also in the region of around INR 10 crores to INR 15 crores. So minimum INR 25 crores to INR 30 crores minimum plant size is required in the beginning and which need to be ramped up depending upon the growth in the business. But the pricing and EBITDA margins are double -- more than double that of regular Pharma products.

Right. And for this ophthalmic product that we are talking about, for that, we can make it on the same assets that we have today with others?

Yes. ophthalmic, we don't need any special level of safety or ambience. Our current facility where we are now already taken up construction of 25,000 square feet area, which will be completed in 6 months time. So that is where we'll be setting up the ophthalmic range. The new land, which we acquired a year ago will be kept for devices. It is mainly pens and some other -- there are some more devices under consideration, but it will be too early to comment. We are working on feasibility and market demand. But let me assure you, Mold-Tek is now focused on Pharma and diagnostics in a big way and devices in a big way. And coming forward in the years or quarters, if not quarters, years, there will be certainly more focus and growth in those -- in that segment. It's a huge potential area, and we're just touching the tip of it. So we have a long way to go.

Right. Just last question from my side, sir. Generally, after reaching a 75% capacity utilization, we generally look for new capacity addition. We are currently at about 77,000 MTPA. If you could just highlight what kind of...

67,000 MTPA. Our total capacity is 67,000 MTPA.

Correct. 67,000 MTPA. Right. So what are we looking at for the -- by the end of the year, what are we looking at capacity and down the line about 2 years down the line or 3 years down the line, how you are looking at it?

Yes, there will be certainly at least 10% to 12% capacity addition every year. That is to capture the growth and better utilization at 3 units, which are Cheyyar, Panipat and Mahad. This is where we are now trying to focus by enhancing the product range there. For example, in Panipat, we already started test marketing our thin-wall products with 4 machines last year, and the response is pretty good. Already goods worth of around INR 70 lakhs to INR 1 crores are being sold every month. And now we are doubling that from this month, August onwards to catch up for the festive season. So hopefully, North Panipat unit will be utilized better in Food and FMCG, Qpacks, already Qpacks, we are selling more than INR 1 crore, INR 1.5 crore worth of Qpacks from Panipat in this last 6 months. So whenever there is ups and downs in the Paint demand, there will be fungibility with the Qpacks. So same thing we are doing at Cheyyar. Now a set of molds are going to Cheyyar for Qpacks and that -- and also paint industry molds, which will enable us to use the capacities in those -- in that unit also better. So our focus now is utilizing this capacity from 75% to probably 78% or even 80% in the coming years. And apart from that, create another 8% to 10% of capacity to catch up with the growth.

We take the next question from the line of Bhargav Buddhadev from Ambit Asset Management.

Congratulations on a good set of numbers. Sir, my first question is that is it fair to say that we would have seen some volume decline. Obviously, because of elevated RM prices, there might be de-stocking. But now with crude coming off, is it fair to say that we can, in the ensuing quarters, see volume growth coming back in Paints?

Paint, actually, we have 10.8% in spite of the severe conditions what we are experiencing. The main culprit is Lubes. That is where I explained 17% dip compared to the Q1 last year.

So I'm talking about volume growth, volume growth.

Yes, yes. Even volume growth in paint is 10.8%. The Lubes was minus 17%. So that is where our volume growth has been stunted to some extent. Otherwise, it would have been close to 9%, 9.5%. So the 17% dip in Lube is the culprit for our volumes being moderately less compared to what it used to be. And once the war situation becomes normal, even now I think Lubes, they have formed some alternative arrangements of base oil so that their sales will come back to normal. And hopefully, in the coming quarters also, we'll be able to achieve double-digit growth given our growth patterns in Food and Qpacks and Panipat and Cheyyar capacities are being improving, utilization being improving. We are aiming double-digit growth in the coming quarters.

Secondly, sir, with Asian Paints also increasing the IML share and within that, Mold-Tek is also now seeing incremental business given that our capabilities are far superior. Is it fair to assume that within Asian Paints, our gross profit per kg as well as EBITDA per kg should sort of increase from here on?

Yes, yes. It is increasing because their volumes have increased, capacity utilization is improving. the molds and machines are being kept on battery use. I can't size -- I mean, I can't tell you the exact number, but we have a very good growth in Asian Paints in this quarter.

And their IML share is rising. Is that fair understanding?

Yes. IML share is also rising, and their volume growth is very considerably high. It used to be down in the previous couple of years, started positive from last quarter, that is Q4. And this quarter is one of the best growth numbers.

And this 10% volume growth in Paints, which we have seen in the first quarter, maybe in the next 9 months, it should only accelerate. Is that a good understanding?