Navin Fluorine International Limited (532504) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the business update call for Navin Fluorine International Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Radhesh Welling, Managing Director of Navin Fluorine International Limited. Thank you, and over to you, sir.

Hello, everyone. Good afternoon to you all. This is Radhesh Welling. And I'm joined by Mr. Bansal, the Chief Financial Officer of Navin Fluorine; and Orient Capital, our Investor Relations partner. First of all, thank you very much for being available for this call at such a short notice. This call is to announce that Navin Fluorine Advanced Science Limited, which is a wholly owned subsidiary of Navin Fluorine International Limited, has entered into a multiyear agreement with a large multinational company for manufacture and supply of a key agro-chemical fluoro-intermediate. This agreement is for 5 years and the value of this agreement is approximately INR 800 crores. The project will entail an investment of INR 125 crores, which includes an approximate investment of INR 14 crores for expansion of our effluent treatment plant. This facility will be located in Dahej, which is in the state of Gujarat, and will be funded through a mix of internal accruals and debt. The supplies for these projects are expected to commence by end of FY '23. I have been talking about the framework of 3Ps: product, platform and partnerships. This project follows this framework and will help us strengthen a new partnership opportunity, which I believe would further help us build opportunity pipeline with this important partner. As I have commented before, with these investments in the pipeline, disciplined project execution will be critical and we'll continue to focus on the same. This product is developed by our in-house technical team and is testament to the capabilities of our team in developing complex molecules and scaling them up successfully. So this was a brief introduction of this announcement. Happy to take any questions you might have on this project, investment, et cetera. Thank you.

[Operator Instructions] The first question is from the line of Amar Maurya from AlfAccurate Advisors.

Congratulations for the second long-term contract. A couple of questions from my side. Number one is, I'd like to know, like is this an existing set of products in the agro-chemical for which we had signed a contract? And secondly, I wanted to understand if this is the new customer or the existing set of customers? And third, this multisector, multiproduct plant is also going to come just adjacent to the high-performance segment path so that all the utilities and all are there and you just need to invest on the CapEx related to the product.

Yes. So thank you very much for these questions. So the 3 questions. The first question was related to products. So if you ask -- the question that you were asking was whether this product is an existing product. I assume you're asking about the product in the market and not for Navin Fluorine. So yes, this is an existing product. This product -- the demand for this product is growing significantly. And hence, there is a need expressed by our customer for a new capacity, a new large capacity that needs to be set up for this molecule. This is a customer with whom we had very small relation -- commercial relationship before. We had no long-term agreement, et cetera, with this customer. So as such, it's a relatively new relationship. And as I mentioned, this will be an important partnership for us going forward. And we believe that this important agreement now in place, we will be able to now develop a lot more opportunities with this customer going forward. This particular plant is not exactly a multipurpose plant. It's a plant, which is kind of dedicated for this product. Of course, we can do other molecules also in this particular plant, but this is not strictly a multipurpose plant. But your assumption around the location and sharing of the resources is correct. This will be in Dahej where our HPP plant and MPP plants are coming up. And hence, a lot of infrastructure is going to be shared, for example, utilities, effluent treatment plant, et cetera. The effluent treatment plant needs to be further expanded and modified, for which there is an investment of INR 14 crores that will be required. But otherwise, most of the OSBL infrastructure is going to be shared by this plant with all the other investment that we have already announced before Dahej.

Okay. And sir, globally, how big this molecule size would be at a technical level?

Yes. So we have a very strict confidentiality agreement, because of which we will not be able to give a lot of color around who the customer is or the segment or what the end molecule is or the size of the molecule or the status of the molecule. But given the fact that, as you can imagine, this is a relatively large single molecule agreement. So from that, you can assume that this molecule is expected to be a pretty large molecule. Also, we will be an important supplier for this particular for this particular molecule. But unfortunately, because of the confidentiality agreement that we have with the customer, we will not be able to share a lot of specifics around the molecule.

Okay. Okay. So my point was to understand like since already we have signed one 5-year contract and the molecule size is large enough, can we get a further incremental contract, especially for these molecules and we need to set up a 1 more dedicated plant for this?

So that option exists. Our immediate priority would be to ensure now that we actually get this plant up and running to the full capacity. But your assumption that given the commercial success of this molecule and the growing demand for this molecule in various formulations because, even new formulations as we speak, are getting launched in the market using this particular molecule. There could be a possibility for us to set up another line, but that would be in the future. But right now, our immediate priority would be to ensure that we get this plant up and running as per the schedule.

And sir, the margin profile would be similar to the specialty chemical?

That's correct, yes. The margin profile, as well as the return profile on the investment will be similar to our existing businesses. Margin profile will be similar to our specialty business and the return profile will be similar to the one that we have for the company.

Next question is from the line of Abhijit Akella from IIFL Securities.

Congratulations on the deal. Two questions from my side. First was just on this deal win. Just wanted to understand, when you say that this product has been developed in-house by your technical team. Can we understand that basically this is without using the customers' technology package, et cetera, even though it's being developed for a custom manufacturing agreement? And also, are you the sole -- are there vendor to the customer other than the innovator himself? And can the product also be used to make any other derivatives or any adjacent products?

Yes. So on the first question, yes, it has been completely developed by our in-house team. So both the pieces in terms of process development as well as scale up has been handled independently by our team. And post development, there has been some sharing of the knowledge. And as a matter of fact, there are further improvements that have actually happened on the process. All of it was done independently by our teams, both our R&D as well as T&D teams. As I mentioned, indicated earlier, this is a molecule which is already there on the market, which means that there is already a supplier for this molecule. Again, as I mentioned, because of the confidentiality reason, we will not be able to share exactly who the competition is or the geography in which the competition exists. But yes, there is another supplier of this particular molecule. And to your third question related to the downstream derivative of this molecule. So this molecule is currently being used for a particular AI, which then goes into multiple formulations. So currently, our plan is to supply this only to this particular customer. The opportunity exists in the future for us to supply to other customers, but we never do that. If we have an agreement for a molecule, for a customer, we typically tend to do -- even if the agreement allows us the flexibility, we never actually take that. We typically tend to supply our molecule only to that particular customer. We don't typically supply the same molecule to its competitor. Currently, there is no competition. But eventually, when the competition comes up 3 years, 5 years, 7 years down the line, we wouldn't be supplying to the competition. Having said that, though this plant is currently being designed to produce this molecule, we will have the flexibility to use this manufacturing plant to manufacture other potential molecules as well. And as we speak, we are also looking at identifying some other opportunities, which could potentially be mapped in this manufacturing plant.

That's really helpful. And the second question I just had was, one, is similar to this deal announcement, I know we have a pipeline that we continuously keep evaluating. So are there -- in which business units is there potential for further such deal announcements or CapEx announcements in coming quarters? That was one. And then secondly, the specialty chemicals business that we have, the base business that's existing. Just from the normal debottlenecking kind of keep growing 10%, 15% a year, even excluding these incremental deal wins that you're announcing now and then?

So as far as the growth pipeline is concerned, as I have indicated before, we are actually seeing growth opportunities across our BUs. So as you know, we have 5 BUs: inorganic fluorochemical, refrigerant gas, specialty, CRAMS and high-performance products. With an exception of inorganic fluorochemical where we are not actively looking at new opportunities, in all the other 4, we are seeing new opportunities and currently working on them. Within the specialty, and as far as the investments are concerned, as these opportunities reach a stage where we finalize the business case, the operating team first needs to be comfortable with the business case. And then once we are, we will take to the Board. And as the Board approves, we will continue to make these kind of announcements. On the second point, with respect to the specialty business, as you know, we don't typically tend to give any forward-looking guidance. But this is an ongoing exercise where we look to, a, do debottlenecking in our existing plants, and we have multiple plants for specialty in Surat. So we continue to work on these opportunities. Also, we continue to look at new opportunities to be mapped in the MPP plant, which we have already made the announcement for. So that's an ongoing exercise, but it will be difficult to translate that into specific numbers because then that will mean giving a kind of a forward-looking guidance, which I want to avoid at this stage.

The next question is from the line of [ Anubhav Sahu ] from [ Metro Research ].

[indiscernible] So I wanted further elaboration on the deal as such. I mean you mentioned 800 CRLs in the sites, and for the period of 5-year period. So is it an exclusive plant just for the client? Or can we go for any other client industry? And if you can mention the kind of industry we are making, is it going to be funded by clients in some way? And is there any scope of further -- or need of further technology to transfer from the plant?

Yes. Yes. So there are 3 questions you asked. On the first point, is the plant exclusive. The plant is going to be designed for this particular molecule, but it is not exclusive. We can -- because these are -- some of these are standard processes. And hence -- for the standard unit operations. And hence, we will have the flexibility at a later stage to map other molecules in this manufacturing plant as well. But our initial focus, obviously, would be to, a, design this plan for this specific molecule and get this plant up and running. So to your question, no, this is not -- we don't have exclusivity in that sense. The second point was related to funding. As we have mentioned that this project is going to be funded through a mix of internal accruals and debt. There is no upfront funding from the customer. Your third question, related to technology transfer. We don't envisage any technology transfer from the customer to us. We've independently developed the technology from the chemistry point of view as well as have engineering capabilities to be able to scale the project up.

Okay. Okay. That's great. And sir, if you can give some broad idea on the pipeline of molecules in the agro-chemical space because we are now increasingly seeing that you are mentioning to either multipurpose or dedicated plants. So can you give some idea how -- what we can foresee in coming quarters, the coming years on the sale. And will the land, which we have in Dahej would be substance for such kind of deals in time to come?

Yes. So it will be tough for me to give you exact numbers. But I think we currently are working on a number of opportunities. And I think your question is specifically pertaining to specialty business. So we are working on opportunities within the agro segment. We also are working on opportunities in the pharma segment. And we are actually seeing a lot of opportunities now coming up in the non-pharma, non-agro segment. So we currently are working on opportunities in each of these. Some of these obviously will translate into us incubating these opportunities in Surat through some of the debottlenecking projects in the future. Some of these we could probably decide to map in our MPP, which has already been announced, or where there is a further scope of expansion, or some of these could lead to setting up of dedicated plants like the one that we are just making an announcement for.

Okay. Okay. And is it a fair [ understanding ] that this present deal is an outcome of a [ switch ] you are trying to roll out through to the facility? Which we're trying to experiment and see if the is a better threshold and it will go for a plant for that molecule?

Yes. So I think the molecule that we currently have for specialty, our R&D facility is in Surat. Our piloting is in Surat. So typically, what we do is we do the complete R&D work in Surat. We complete the piloting work in Surat. We run the initial campaign in Surat. And once successful, then we look for opportunities and depending on the scale, we -- at that point, we can decide if we should do that in Surat or if we should do that in the new facility in Dahej. You had earlier also asked a question related to land, and I forgot to respond to that question. At this point in time, we have ample land available in Dahej for further expansion and to set up further new plants, et cetera, because it's a pretty large land that the land bank that we have in Dahej. And the advantage there, obviously, will be that all the OSBL, all the utility, et cetera, will be shared. Having said that, we have also started looking at a possible acquisition of a new piece of land in and around Dahej. But currently, we have ample scope for further expansion in our existing land in Dahej.

Next question is from the line of [ Shantal Darika ] from Equirus.

First question, is this product from the existing products that we had announced in last year, December '20? So is this one of those products which have been ramped up to a dedicated plant?

No, no, it's not.

Okay, got it. So this is a different set of products, which was we had an existing relationship with the customer, and we would be ramping up the product for the customer?

Yes. So first of all, this product is different from the ones that we were going to map in the NTP, for which the investment was announced in December 2020. Also, this partnership is different from the ones for which we are making investment in the NPP. So both of these are different. As I mentioned earlier, we actually completed the R&D work, did the piloting and did the initial campaigning from Surat. But as far as the commercial supply will only happen from this plant in Dahej post the plant readiness.

So sir, then is it fair to assume that even you still have an opportunity where we could announce another dedicated plant as and when the 5 molecules start ramping up globally?

Yes. So there, as I indicated earlier, our initial focus would be to ensure that we commission the plant on time, successfully run the molecules in that plant. And the current indication that we have on the commercial future of the molecule tells us that at least a few of those 5 molecules should hopefully successfully scale up wherein they would need independent investment. But we are a few years away from that decision point.

Next question is from the line of Surya Patra from PhillipCapital.

Congratulations for the multiyear contract. Sir, my question is that do you see any kind of a change in the demand pattern for, let's say, the coordinated compound that you have been supplying, either for agro or pharma in the post-COVID period?

So I think there are 2 ways of looking at it, right? So one is have the number of inquiries increased? Clearly, the answer is yes. Have the number of opportunities that we qualify and work on -- so these are basically qualified opportunities? The answer is no. We continue to be very selective in terms of opportunities that we pick to work on. And this is a question obviously that we ask ourselves if do we have a right to play and win and sustain. So there, the answer is no. We've always seen because our focus is to ensure that we work with select partners on select opportunities. And there, we actually saw a pretty robust demand prior to COVID, and we continue to see pretty robust demand now across the segments. So across pharma, agro and the other segments that we continue to look at.

Okay. And sir, particularly on the CRAMS side, the way that we have been focusing more on the pharma requirements to fulfill the pharma requirements. So do we see any kind of CRAMS as kind of supply potential -- agri as well in the current time frame, whether there is a kind of extension to any extent is the China plus one kind of story, sure in the agri side as well.

No, so what do you mean by CRAMS like? Because if you're talking about like a contract manufacturing kind of an opportunity, even this particular opportunity could be labeled as a contract manufacturing opportunity.

My question is because that you mentioned the profit -- or the profit profile of this arrangement is similar to that of specialty chemical may not be like CRAMS?

No. So I mentioned that our overall profit profile and the return profile is similar to our businesses. And as I have indicated before, our overall profitability profile across the businesses doesn't really vary significantly. I mean, quarter-to-quarter, there could be a variation. But overall, if you look at it on an aggregate basis, they're relatively same, especially if you look at it from the operating margin perspective.

Okay. Okay. Just last question, sir, in terms of the ramp-up post capacity creation for this dedicated contract. So it would be kind of uniform across those 5-year period? Or it will be staggered in the first year, possibly, then subsequently, it would be uniform?

So in the initial year, there will obviously be a certain learning curve as we ramp up the molecule. But once that is done, we expect it to be relatively uniform.

The next question is from the line of Jignesh Kamani from GMO & Company.

Just a follow up on the ramp-up plan. As you mentioned that it is existing molecule and the capacity is [ significant ] for the incremental demand. So from the first year, assuming maybe after 5 to 6 months into stabilizing, you're able to reach your, I guess, the full year potential or will the demand for the molecule increase, we will see increase in the demand from plant?

No. So as I indicated earlier, in the first year, there will be certain ramp-up that will happen because of both from the technical as well as commercial things. But from Year 2 onwards, we expect that the demand to remain pretty steady.

Understood. And incremental demand for the clients will be, you can say, as each year [ modest ] demand will be growing. The incremental demand, we will be buying from another vendor or doing in-house to support the incremental demand part, right?

Incremental demand for the customer you are talking about?

Exactly.

So there are 2 things. One is the incremental demand because, as I said, the demand for the molecule is expected to grow significantly and because of which the customer is keen on this. And also, the customer is actually looking at -- currently, as I said, the customer is also manufacturing this molecule. So customer is actually also once day get certain comfort with our ability to scale up and establish this molecule, they're actually looking to reduce their own in-house manufacturing and move that to us. Because of which, from Year 2 onwards, we expect that the demand for the molecule to remain steady, which will basically consume our entire capacity. And actually, there's a possibility to further expand the capacity.

Understood. Second thing, as you mentioned that entire technology has been developed in-house. Sir, any idea on the how is the cost of manufacturing because synthesis growth and manufacturing might be different from the customer in-house manufacturing or the other vendors, which you mentioned. So will you be in line within the customer in-house manufacturing or a vendor will be much more attractive on the manufacturing costs?

Stop for me to comment on that because I wouldn't know their in-house manufacturing costs.

Understood. And last question, in the second quarter, you mentioned that you are in [ escrow ] dialogue with one customer for the [indiscernible] plant. And this time machine was finalized. So this is a same contract which you finally got, or there is a separate contract and business going?

Sorry. Which commentary are you referring to? Is this the one...

Second quarter, 20 days ago when you hosted the conference call.

That's correct. That's correct. Ideally, we would have probably liked to make the announcement that time itself, but the agreement was not signed then. And hence, ideally, I would have actually liked to announce it during that call itself. So you're absolutely right. That's the one that I had indicated.

Next question is from the line of Ranjit Cirumalla from Batlivala & Karani Securities.

Congratulations on this new deal signed. I have a couple of questions. The first is just kind of [indiscernible] why 5-, why not 10-year contract? And the second one you have said you would be making a additional investment in the effluent treatment. So just wanted to understand a bit more on that. Is it to just announce the capacity of the current effluent, or it is going to require an additional equipment or the technology to kind of a trade plan that we are likely to generate from this particular product?

Yes. So as I mentioned in my opening commentary, as far as the effluent treatment plant is concerned, some amount of that is to expand, but more of it is to actually modify. So there are certain steps that we are taking for reduction at source itself. So for that, there will be certain more equipment that we'll be required to invest in. As far as your first question, why 5 years and why not 10 years. In the given market condition, it's tough for our customer also to project a 10-year scenario. And from our perspective as well, given the opportunities that we are seeing, we felt that it might not be prudent on our part to commit to more than 5 years because tomorrow, we might find a completely new opportunity, which is a lot more profitable than the existing one. So we should at least have that opportunity to use the similar assets for better opportunity, better profit. So it works both ways. And hence, we decided to keep it limited to 5 years. From the customer side, because of the visibility. From our side, profit -- from a profitability perspective.

Sure, sir. And the other question, we have all of these investments at Dahej land. So cumulatively, I think it's more than INR 900 crores or somewhere around INR 900 crores at Dahej hand. So from the land perspective, would it be occupying the 50%, 60% of the existing plant? Or what is that ratio? And second, how comfortable would you be taking up more such projects or the thought process would be to at least kind of execute this and through the capability and then going for an additional project? So we will continue to scout for opportunities and the execution. How are you thinking on these lines?

Yes. So I'll answer your first question. But the second question, I didn't understand. What exactly do you mean by that?

Yes, the second question was we now have 3 projects on hand: HPP, MPP and now this dedicated. I wanted to get an idea about the future opportunities. So we are seeing a lot of opportunities. The thought process would be to execute them and then to our capabilities, work simultaneously on more and more opportunities, and then the execution would take its own time? So just your thoughts, please.

Yes, yes. No, I'll respond to that. See, this is an important question, and this is something that I have actually commented on earlier as well. So this is a process -- this is actually a continuous process. At the same time, it's very difficult for us to make a number of announcements at the same time because then there's execution risk. So typically, what we do is we phase these projects. Typically, they basically are phased with a gap of about 6 to 9 months. So that -- because when you talk about the project, it has to follow a certain course, right? You basically do process development, then piloting, then the scale up, then the design, then basic engineering, detail engineering, project execution, commissioning, et cetera. So we ensure that we don't have a lot of projects at one stage in that cycle. So as the project moves from one stage to another stage, then we actually bring more projects in that particular stage. So that is how we typically phase the project. So yes, of course, we don't have to wait for one project to commission before we start the other projects. But we typically -- it won't happen that we have a number of projects starting at the same time or commissioning at the same time. So that phasing is very important. So we are working on other projects, which are at various stage within that time line today. As far as the land is concerned, it will be difficult to put ratio -- I mean, give ratio because it will not really give you the right picture because, as you can imagine, some of these investments that we do on that piece of land are onetime investments. So for example, when we set up our administrative building, when we set up our QA/QC building, when you set up an R&D building when we set up an ETP facility, when we set up, let's say, a captive power plant, those are all onetime investment. And those take a considerable amount of the land is actually occupied by those investments. But those are investments which are shared by multiple facilities. Having said that, because it's a pretty large piece of land, we have ample scope still available for new plants to be set up in the existing -- in that particular facility, which will then share that OSBL or the infrastructure with all the existing facilities.

Yes, sir. But you also alluded to kind of looking out of a new land parcel, so that's why the question whether you would be soon be running out of land at this facility, and that's why we kind of started to look at the new acquiring land vessels.

So if you look at Dahej land, the land that we have, we had acquired the land many, many years before we even started working on the first project. So it's always important that you have that process going on so that -- we don't want to find ourselves in a situation that we start that process only after tapping this entire land because when you're doing that, the timing of this one becomes very important. And hence, we've basically started looking for the new piece of land. It doesn't mean that we require that new piece of land in the next 2 years or 3 years or something because once we acquired that land, we will have to again invest in the OSBL, et cetera, which will again take some time, et cetera. So as a preemptive strategy, we have actually started looking at that piece of land. But at least for the next 2 to 3 years, we believe the projects that we will -- we are working on or we'll be announcing, our existing facility in Dahej will be sufficient for -- to absorb those new investments.

Yes. And the final bit, you also alluded the non-agri and non-pharma business opportunities. So can we share a bit of more light on that, that would be helpful.

Yes, those are -- as I have mentioned earlier also, those are into what we call the specialty material kind of segment, and that is a whole basket in there. They're looking at composite material. We are looking at a number of segments there. So we don't have any specific segment there, which has scaled to the level of agro and pharma. And hence, we are just putting that into one bucket called -- and we call that industrial. But there are a number of segments that fall into that particular category.

Next question is from the line of Rohit Nagraj from Emkay Global.

Congrats on the contract. So the first question is regarding this contract. So how much time was taken for development of this product, basically, Dahej over the other vendor. And so what is the benefit from the customer point of view to give this particular contract to us instead of the existing vendor? And do we have any take-or-pay agreement to secure ourselves?

So there are 3 questions you asked. On the timeline, this entire thing took approximately about 9 to 12 months from R&D to piloting to qualification, et cetera, et cetera, and then getting the agreement in place. Now when you talked about competitive advantage versus the other player, I would rather not comment on that because that again gets into some of the areas of the confidentiality. But if you ask me our specific value proposition, I think it's primarily because, a, we have actually handled this kind of complex chemistries before. And two, we are completely backward integrated. So that's point number two. The third question you asked related to take-or-pay. Yes, we have a take-or-pay not for the entire volume. So we have decided on a certain minimum CAM. If the volume falls below that, which is approximately about 75%, 80% of the total volume, then there is a -- a take-or-pay clause comes into play.

All right. Got it, sir. Sir, the second question in terms of the time lines for the existing projects under execution. So if I'm not wrong, the HPP with CapEx of about INR 400 crores will come in Q1 FY '23. NPP, the CapEx of about INR 195 crores will come again in Q1 FY '23. This new contract, with a CapEx of about INR 125 crores, will come in Q4 FY '23. And if I'm not wrong, we have also indicated INR 90 crore CapEx for the range in terms of the infra development. So is this all? Is this entire CapEx going to come in the next 1 to 1.5 years, is that accurate?

That's correct. So your assumption on HPP is correct. On MPP, we mentioned H1 of FY '23. So we had mentioned end of Q1, beginning Q2 FY '23 is when we will commission the plant. As far as this project is concerned, we have said that by end FY '23, we will be commissioning this plant. And on various numbers that you talked about, there's one piece that you missed out, was on the captive power plant. All the other numbers are accurate.

All right. And just one on HPP...

Mr. Nagraj, could we maybe please request you to queue for you follow-up questions?

Sure.

[Operator Instructions] Next question is from the line of Nitin Agarwal from DAM Capital.

Sir, in this...

Mr. Agarwal, your voice is very feeble. Can you speak a bit loud? Hello, Mr. Agarwal?

Hello.

Yes, please go ahead.

Okay, sorry. Sir, on this contract, adjusting from a client coming to you perspective, I mean how does -- there are multiple vendors operating in agro-chemical, fluorochemical like agro-chemical pieces, plus there is China, this ecosystem in China. In your assessment, what is essentially a swing in client decisions in terms of choosing vendors between the different players in India? And is there -- you're seeing -- are you seeing definitive move from a client side to diversify away from China to derisk from China from a supply perspective in the decision-making?

Yes. So typically, the molecules that we work on or the molecules that we select, also the molecule that customers select us for. Typically, we have seen 2 or 3 criteria: a, the specific chemistries that they look at of Navin Fluorine for, are the ones that we focus on, are typically very complex chemistries involving fluorination. Of course, they require other chemistries as well, but the core is around fluorination. And hence, they come to us or we tend to select these kinds of opportunities. Second is there is some engineering skill sets required for scale up of these opportunities. And third, in a number of cases, we actually have the building block. So we have the opportunity to backward integrate. And hence, there is this risk mitigation piece because the molecule is manufactured in India for the starting raw material. If the vendor is dependent on China, it doesn't really translate to a true risk mitigation part. So those are typically the 3 criteria for which a customer looks at Navin Fluorine and similarly, the opportunities that we typically select. What are the other questions, sorry?

[indiscernible] this whole derisking away from China, is this also helping in terms of higher inquiries for you and a more stronger business sentiment in general?

Yes. So as I mentioned earlier, is it translating into more number of inquiries, volume of inquiries? Yes. But if you ask me with respect to quality of inquiries or the quality of opportunities that we go after? It remains the same as it was before. Even -- or before this COVID [ season ] also the quality of the opportunities were quite robust, and we continue to be very selective -- we selectively pick opportunities to work on. So there, qualitatively, it continues to remain the same. Volume obviously has grown.

We will take our last question, which is from the line of Alisha Mahawla from Envision Capital.

My questions have been answered.

I now hand the conference over to Mr. Welling for closing comments. Over to you, sir.

Yes. Thank you. Thank you very much, everyone. Again, thank you for being available for this call at such a short notice. I hope I was able to answer questions that you had related to this specific investment. If you have any more questions, please contact our Investor Relations partner, Orient Capital, and we'd be happy to answer any more questions you might have. Thank you very much, and have a good day. Bye-bye.

Thank you very much, sir. Ladies and gentlemen, on behalf of Navin Fluorine International Limited, that concludes today's conference. Thank you all for joining us, and you may now disconnect your lines.