Navkar Corporation Limited (NAVKARCORP) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q4 FY '20 Earnings Conference Call of Navkar Corporation Limited Conference Call hosted by PhillipCapital (India) Pvt. Ltd. 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 date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] I now hand the conference over to Mr. Vikram Suryavanshi from PhillipCapital (India) Pvt. Ltd. Thank you. And over to you, sir.

Thank you, Stanford. Good afternoon, and very warm welcome to everyone. Thank you for being on the call of Navkar Corporation Limited. From management, we are happy to have with us today Mr. Anish Maheshwari, Chief Financial Officer; and Mr. Shailesh Jha and Mr. Kunal from finance department. Now I hand over the call to Mr. Anish for opening comments. Over to you, sir.

Thank you one more time, PhillipCapital, Vikram for hosting. Good afternoon, and very warm welcome to everyone present on the call. As we all are aware, the last few months has not been very conductive for the economy as a whole, and it all affected to the trade volumes as well. For Navkar, the EXIM volumes have been [indiscernible] while the domestic volumes have been doing well. In spite of these conditions, we have still been able to scale up momentum of the past 3 quarters and the slow growth in the volumes and financial numbers. Now I just wanted to start with the financial update of Q4. Revenue for Q4 '20 is INR 155.3 crores, which is an improvement of 8% on a substantial basis and 19.8% on a Y-o-Y basis. The improvement has been mainly led by the volumes, which has slightly increased by 1.3% as compared to Q3 FY '20 and increased by 8% as compared to Q4 FY '19. The operating profits for Q4 FY '20 has decreased by 17% on a Q-o-Q basis to INR 61.76 crores compared to INR 74.70 crores in Q3 FY '20. The EBITDA for Q4 FY '20 has decreased by 21.3% on Q-o-Q basis to INR 36.77 crores compared to INR 46.60 crores to Q3 FY '20. Now I'm just moving on to the financial subjects for the full year. The revenue for full year 2020 has increased by 17.3% to INR 482 crores due to higher revenue, mainly driven by 14% growth in average realization. The EBITDA comes in at INR 156.2 crores in FY '20 as compared to INR 152.5 crores in FY '19. The EBITDA margin declined for 31.6% in FY '19 to 29.3% for FY '20. The net profit for the company and this year coming to [ INR 45.09 crores ]. On the balance sheet side, we have a gross debt of [ INR 77.40 crores ] with net worth of [ INR 799.24 crores ], translating to gross debt equity of 0.27x Now I just wanted to -- going on the operational updates. We have seen an improvement in the volumes for the quarter. The total volumes being begin 92,987 TEUs in Q4 '20, and it's slightly up 1.3% on Q-o-Q basis and increased by 8% on a Y-o-Y basis. Volumes at Mumbai CFS increased slightly by 2.2% to 59,096 TEUs in Q4 FY '20 from 37,844 in Q3 FY '20, of which 26,096 TEUs were for imports, 33,000 TEUs were for exports. On a Y-o-Y basis, the volumes at Mumbai CFS declined by 7.1% as compared to Q4 FY '19. The volumes at Vapi ICD in Q4 FY '20 were 33,891 TEUs as compared to 33,945 TEUs, a 0.2% decrease by Q-o-Q basis. However, on a Y-o-Y basis, the growth has been 38.9%. The Vapi volumes were mainly driven by the imports volume, which was 21,513 TEUs. Exports were 12,378 TEUs for Q4 FY '20. On the PFT side, the total trains handled for the quarter was 698, which has declined by 18.3% as compared to Q3 FY '20. The main reason behind the decrease is domestic movement at our CFS. Now moving on operational update for the full year. The volume of FY '20 is 3,88,890 TEUs, out of which [ 11,58,320 ] TEUs and ICD at 1,30,528 TEUs. Mumbai CFS handled 1,17,998 TEUs for exports, [ 1,18,561 ] TEUs from imports and 21,761 TEUs for domestic movement. Vapi already handled 40,081 TEUs of exports, [ 80,833 ] TEUs of exports and [indiscernible] domestic movement. Now I just want to -- I will open the floor for the Q&A session.

[Operator Instructions] The first question is from the line of Sachin Kasera from Svan Investments.

Sir, my question was regarding the CapEx. So from what I can see from the reported numbers in the cash flow statement, CapEx this year is close to INR 150 crores.

Sorry?

INR 150 crores looks like the CapEx that we have done for this current financial year. So when we started the year, we had mentioned of INR 50 crores. And then I remember in the February conference call, you had upped the guidance to INR 100 crores. What exactly changed in that 1 lakh once that is substantially increased again from INR 100 crores to INR 150 crores?

Volumes [indiscernible] maybe for the [indiscernible], which we have shifted to asset side.

Okay. Can you explain that, sir, a little bit?

So it will be -- my total CapEx, which was last year is around INR 150 crores, as you say. Out of that, INR 75 crores overall moved from [indiscernible]. This was from last year.

No. But sir, when I see the cash flow statement, the figure is [ INR 175 crores ], which is -- which means this is actual cash outflow as far as CapEx is concerned. So can you explain this INR 176 crores of number, sir?

So in this year, if you're asking me, there is a total addition of INR 116 crores. Out of which, as we said, last quarter -- telling last quarter, we'll see the number where we have already been extended TXR activity, which was going on and main -- led by the -- another INR 30 crores, which was [indiscernible] shored up for the railway. The railway [indiscernible], which is coming February and March. And other than that, we have paid for [indiscernible] of capital.

The next question is from the line of [ Nitin Ranjhu from Capstocks ].

My question was regarding the operating margins from quarter-to-quarter. It just kind of dipped close to 10 percentage on a quarter...

So the reason behind all in all will be my export-import mix for this quarter. It is mainly led by, generally, our export and import making around -- exports always in the range of 49% as compared to last quarter, and import was 51%. And this quarter, we have like normally 56% of export and 51% of import. At the same time, if you compare with the Vapi numbers, Vapi was -- last quarter is around 32% was exports, which is -- and imports was 36%. And one more reason I only add over here from operating margin side, until last quarter, our domestic operations were in the range of INR 19.14 crores. In the Q4, out of that INR 155 crores of my total revenue is INR 29.70 crores belongs to the domestic operation. And in domestic operations, there is a less margin compared to...

And also -- but looking at the operating expenses, it has gone up from INR 69 crores to INR 94 crores [indiscernible] the jump.

So that's why I'm telling you the exports, which correlate with the revenue side. So our expense towards the domestic operations is higher than the [indiscernible] operations, led for the total expenditure side. And second, major things, I will add in this side, even more expense -- total expense, which was earlier we are getting 30% off from the toll side on the advance payment of toll after [indiscernible]from January onwards. We'll have to pay entire toll to the [indiscernible] system.

Okay. But...

And another thing I just wanted to add on over here, as in March itself, last 12 or 13 days, there was no such operations. But whatever operations we take from the port to here, we'll have to pay more to the labor side because our general labor cost marginally below -- almost in a total cargo [indiscernible] It's almost in the range of 30%, 35%, which is on move, which is up by around 30% to 32%. That is more real.

Okay. But the number of times, which we have run and also have [ reduced ] from 736 to 801, right, sir?

Yes. [indiscernible] Sir, I can see it in my TEUs data volume and in the same similar range, correct? If I move a cargo by train, the cost is slightly less. But if I do the cargo movement by road, it has always been...

Can you just give us a breakup of this INR 25 crores increase? Is it mainly -- how much was the toll and how much was other expenses?

I'll give you separately. But I'll give you a brief about it. There are certain points, which we have elaborated. There are [indiscernible], like tolls, [indiscernible] last quarter railway, movement was almost in the revenue 100 and -- this is for the 601 compared to the last...

Last quarter was 736.

Yes. So Q3 was almost 736. So my major operations towards the domestic as well as the admin cargo is by road only.

Sure. So because of that, the total expenses went up...

Yes. Railway operations is much cheaper than the road offering.

So because of that, the operating expenses end up by [ INR 20 crores to INR 24 crores ].

Yes. Yes.

I understand. And one more thing, regarding your credit rating report, which I am reading right now. So it says that we have kind of refinanced our debt. So what would be the actual repayment obligation for this year or roughly for next year for FY '21 and '22?

Your voice is not audible. Can you speak...

Sure. Sure, sir. So I was just going through our credit rating report and it says that we have kind of refinanced our debt, long-term debt. What is the actual repayment obligation for this year as well as next year for FY '21 and '22?

So this is just a rationale. It is not yet concluded. It's not a reason. I can tell you, there are 2 or 3 bankers approached to us, and they would like to give us a loan for a longer tenure for our commercial vehicles and equipment, same time, for the next -- as today, my average maturity of this INR 100-odd crores is 4 years. And then they would like to take it for 10 years.

Okay. So currently, what's the repayment obligation after you stand right now?

So my average maturity today is 4 years, and my loan is almost in a range of INR 230-odd crores for that term rate. So it will be INR 100 crores each year.

INR 100 crores each year. And if I may ask about the CapEx for next year, will there be a similar CapEx for the next year?

So not yet. I'm not in a position to tell you today. But I can tell you, it will be in the range of almost INR 250 crores for the whole year if there is certain requirement. Today, we are not seeing any requirement, not yet. We have get any kind of a [indiscernible]. It may be in a range of INR 40 crores to INR 50 crores for the whole year, which is a recurring CapEx.

And one last question, if I may. So this -- so what's with the total expenses? Will it be recurring on a quarter-on-quarter basis, but lower? And what is...

I just wanted to explain you what happens, our movement towards Vapi and our movement towards CFS to port, port to CFS and CFS to ICD and ICD to [indiscernible]. And other than that, we have a movement for the [indiscernible] operating also with the party's final destination. Correct. And then we have -- and what happens, we used to take the toll on a discounted rate because we are bringing them the advance tolls. Correct. But after past date, from January onwards, after past date, we'll have -- we will pay on a passive basis, which is similar for the annual. There's no discount...

Okay. So this would be recurring? In a sense, it will be recurring? And how much would that be on a quarterly basis?

That's why I'm telling you this, it will be quarter-on-quarter as well slightly in a higher side, tightening, it may be incurred around 2% to 3% of our cost.

Okay. 2% to 3% of the total operating expenses.

[Operator Instructions] The next question is from the line of Deepak Poddar from Sapphire Capital.

Now my first understanding, like you mentioned, the 20% revenue coming from the domestic operation. So -- and plus the fast tag, which resulted in lower margins. So just wanted to understand, going forward, is that the new normal in terms of the margins? So how do you see your margin profile? And my second query is on your growth profile. How is the COVID situation impacting your growth profile going forward in the year?

So first, I just wanted to give you the answer of your first question. That [indiscernible] take, like this is not only the fast tag [indiscernible] or not only the domestic space. [indiscernible] the other things, which led the operating expenses to be high. It's really the export-import mix, which is getting [indiscernible]. Secondly, I'd like to view on the CapEx side, it is definitely added like 50% operating cost. But as I told you, the railway and the road mix. Over the last quarter, I had in my operation the same line of use, which is [ 383 ] trains. And this quarter, we had 600 trains. So definitely, trains -- if I give a movement in most [indiscernible] train, then it will be definitely in the quantity side. Secondly, the question, which you have told me about the profit situation. Right now, I'm honestly not in a position to tell you for next 1 or 2 quarter what will begin to happen. Last quarter, in June quarter, we have the operational data from the port side, and there was operations to port side. So the pipeline in port side also as well as port side, the operation was going on not in a positive side. But definitely, operations was on. Second major thing, which will be impacted to us is the ground rent, which was [indiscernible] modification and that they've told us to not taking any ground rent until start of May on the same containers, okay, which was impact -- the impact started from 23rd of March. That also impact my margins. So going forward, if you'll ask me for the next couple of quarters, it is really a difficult time for the whole country as a view. So we will definitely come back to you on rent after the quarter. But definitely, there is no movement from 15th of June to 15th of July. After that, only new vessels will be in operating side.

You mentioned no movements on 15th of June to 15th of July.

So movement is -- the movement, which we have right now, is 15th of June, which was -- because the metals was coming from the -- other than other destinations [indiscernible]. But from 15th of June, the pendency towards port is very less. Their job pendency is very less, which means [indiscernible] 15th of July, there'll be very slight movement. But after 15th July, we are hoping that the movement will be again on the same time.

Okay. [indiscernible] Can you give us a rough idea then what sort of utilization level you might be running at for the last 2, 3 months? It might not be optimal, but some understanding on the utilization level.

Until March, sir?

Sorry, sir?

Are you asking about until March?

No, the last 2, 3 months, like second -- since April -- April, May, June.

So right now, I don't have any hedging figures with me. But I think hedges in March was very -- March was good. But after April, May, it was borderline. June was slightly good.

April, May, I missed your point. April, May or did you...

April, May was average. There was nothing like that. There's no movement. From 23rd March to 31st March, there was no movement. There was no movement from the other side. We are taking cargo from the port. But from seas, there was no movement. There was no single revenue from the operation. And gradually in 14th -- 13th of -- after 14th of April, [indiscernible] average. June was good.

Okay. And 15th June to 15th July, I know you mentioned, it will be on the lower side.

Yes. Because the movement from the quarter it's about CFS ICD also. But we weren't having such [indiscernible] on the job with us for the next 2 or 3 weeks.

Okay. Okay. Fair enough. Fair enough. Understood. Fair enough. And then on the final query like -- so is there any changes in the next 2 years, 40% EBITDA margin that you were kind of looking at? So any kind of comments you want to make on that, sir, like...

I'm not -- honestly, I am not in any position to give any kind of comment on the profit side. First, the target, I just want to add on that side and just compliment to the management of Navkar as they are giving high to their entire team. In this situation also, there is no single money cut that have done for any of the employees. And also, we give incentivized to those employees that were coming from operations in the COVID situation. So this is a good complement for the benefits that have come.

[Operator Instructions] The next question is from the line of [ Anita Bicil ] from -- an investor.

Just wanted to have some guidance on the deleveraging process because I think that we have been getting guidance that overall debt level shall be reducing, but this is not exactly happening. Right now also, I believe that overall debt is roughly around INR 470 crores. And every year, I understand the CapEx is also like whatever the guidance has been -- is being given, yet actually overshooting that significantly. So looking at the cash flow statement, I was seeing that there's an actual cash outflow of roughly INR 176 crores for CapEx. So sir, just wanted to understand how are we looking at deleveraging exactly and...

Just last year, there was activities towards the railway side, which we have already been said on last call also. We have [ 13, 23 ] in the last quarter. Other than that, we made [indiscernible] activity, which was required for the operations. Then there are certain things which was definitely moving and improving margins in that operation. And that is shown in our numbers also. If you see my [indiscernible] business number they're slightly on a positive side in the applications space. But going forward, there is no further CapEx towards the -- which I had already told in last quarter call also. For this year, there is no specific CapEx on the railway as well as the ICD side, not even in the PFT side. And there's no question after the COVID situation, there's no further CapEx on the -- yes, I can tell you there's a recurring CapEx which we require for the -- improving our efficiency, that they'll be in a range of 2% to 2.5% of the EBITDA, which will then lead around INR 40 crores to INR 50 crores maximum.

So sir, this year, then we will be looking at deleveraging of INR 100 crores like -- or like INR 50 crores, you're saying that at least like net of INR 50 crores reduction in debt by end of March '21?

Yes. Definitely INR 50 crores.

And just wanted to ask, sir, so out of like total debt is how much, INR 470 crore? How much of that is bank debt? And how much of that is shareholders' loan?

It's from promoter's loan, which is the rate of INR 83 crores.

INR 23 crores, you were saying?

INR 83 crores. INR 83 crores.

INR 83 crores. Sir, what was the average interest cost on both the bank debt and the promoter loan?

Promoter loan is [indiscernible] totally.

Okay.

Although we are making no [ provision ] on the balance sheet for the NDS purpose, but there is no interest rate to the promoters since the reduction of the loan. First thing, secondly, the bank loan has averaged in the range of 9.5% to 9.75%.

Okay. So sir, there has been no reduction in like interest cost like because in the last...

Yes. We have proposed to banks. We are already investing with bankers. So that may definitely in the 50 basis point to 1%, that may be definite side.

Right. Right. Right. Sir, this is the last question. So end of March '21, what overall debt level you would be looking at? Some guidance on that, so from...

It may be in the range of -- including our promoter's loans, in the range of [ INR 125 crores ].

[Operator Instructions] The next question is from the line of Jayakanth Kasthuri from Way2Wealth.

Sir, in terms of receivables, when I see it year-on-year, it has increased. Sir, do you find some kind of stress right now in Q1 and later on passing over to little in the second half of Q2 -- first half of Q2? And the other one is in terms of now that you have seen that diesel prices have increased since last 20, 21 days. So do you see that impact to be there in Q1 and the first half of Q2? Sir, and other part is I missed out on your domestic numbers. So if you can give me that numbers.

So domestic numbers in value-wise, last quarter...

No. No, number-wise. TEUs, TEUs, yes.

Hmm?

TEUs. In TEUs.

So we are not converting on TEUs. Domestic is operations based on -- from last 2 quarters, we will see, we are not converting in TEUs because domestic operations are all different now. So not domestic.

Okay. Okay.

So from last 2 quarters, you could see, we are not -- we're not converting into TEU the diesel.

Okay.

So we are giving you the value numbers only. And secondly, as I told, there's definitely a diesel hike and the effect are operating profit itself, but we are trying to convert to the -- our existing customers' fee as this is not the time where -- pose the risk we can take. We can give a delivery after we can take the recovery in price. So we have passed it on right now also. Secondly, as I told, on the business side, we are seeing that operations will be going on and the better service definitely. Earlier, it was having 40 to 45 [ days ], it is now 60 days, but there's no problem with the data [indiscernible] our receivables is on an -- but this situation also, until March, May, our receivables was almost in the range of INR 69 crores, INR 70 crores, now INR 80 crores, INR 81 crores. It's only INR 10 crores until we implement it better. But the payment is coming from those people also. Yes. Definitely, there is slightly delay, 10 to 15 days [indiscernible] delay. But there is no problem with the receivable.

[Operator Instructions] The next question is from the line of [ Abit Amid ], an investor.

Can you hear me now?

Yes, we can.

Yes. Actually, I wanted to know about the operation expenses. Going forward, looking at diesel prices again going high, any [ data ] you can give us? Do you know? Right now, we're at almost 60% to 65% EBITDA levels, right? The expenses has gone up so much. So going -- a couple of quarters going forward, any idea?

Yes. I can tell you for a couple of quarters, there may be challenges because everybody knows the driver and the labor issues are there. So right now, I'm more focused on the execution of the [ 4% ]. Secondly, getting the business, I'll say, because -- and just to add you on this question [indiscernible], we add some of around 25 to 30 parties anew in this COVID pandemic situation. Whoever is working with other parties, like shipping line, also are working with me. So our main target today is maybe not focus on the profit side just to capture those parties who are not working with me. So there are certain parties with those -- we are having a [ lot ] of contracts. If the COVID situation remain, continue for next 1 or 2 quarters, we're not definitely getting those benefits. But yes, I definitely tell you for next couple of quarters, there may be challenges from the driver side, labor side. Diesel price is also high. So that will definitely impact our operating margin. But after that, it will gradually improve.

Yes. But we are still seeing some kind of growth in volumes as well and we'll still be looking at that.

Pardon?

Is there a possibility that we see any growth in volumes in number?

Right now, we are not in the position to tell about that because over and all, almost 1 and 2.5 month from last -- after the 23rd of March, operations are going down. There is no such export. There is -- all of the factories were closed, that will definitely impact after this quarter.

Sure. So luckily, I think domestic is just working for us right now then. A lot of revenue we must be getting in the domestic.

Yes. Domestic is going on, sir. Domestic operations, we are doing quite well.

All right. So from the fourth quarter from last year, if we compare to the first quarter and the second quarter coming forward, do we see growth in domestic volumes?

Yes. Definitely.

The next question is from the line of Prateek Kumar from Antique Stockbroking.

Sir, firstly, on this number of trains. So why the number of trains handled was lower this quarter versus like volumes were similar in EXIM segment?

So the reason behind that is basically, the [indiscernible] railway was not available until 15th of February.

Railways are not available.

Yes. After that, after 20th March, it was available. So main impact was -- in the railway operations was just in the March month.

But the road -- but we understand that rail was doing better all this while or is doing better all this while with...

It's what we said in the domestic segment. If you'll see my numbers also, last quarter compared to this quarter, I think domestic volumes was good.

Okay. So does that change in rail mix also impact margins?

Yes. The main margin less because of that on EBITDA. Because last quarter, we did trains of 783 -- 236, which is in this quarter, 601 only. We think that way, 18% to 19%.

So lower rail mix is also an impact on margins there ?

Yes. So from this quarter onwards, if it grow better on the railway side, that will definitely change in the [ NIM ].

Right. And sir, just a related question to previous participant's question. So on the INR 176 crore of CapEx in this year. So out of this, INR 40 crore, INR 50 crore is maintenance CapEx. Two trains, which we had for the year, would have probably INR 30 crore CapEx.

And just to add in there, that last quarter, my total CapEx in March '20 was additionally INR 170 crores. Out of that, [indiscernible], which was made from the last year. And this year, we took the trains in trade, then TSR activity we did, as told on the last call also, was an increase around INR 35 crores to INR 40 crores, then...

Pardon. How much crores?

INR 35 crores to INR 40 crores. And when train...

For this, INR 30 crores as well?

INR 30 crores, train. INR 30 crores to INR 40 crores -- almost INR 40 crores for the TSR activity, INR 10 crores for the CTO license. Last year, we replaced our like vehicle. If you see my numbers for vehicles [indiscernible], which is now almost [ thousand ]. The 93 trailers also we add last year.

So how much was CapEx on vehicles?

CapEx for trailers?

Vehicles. Vehicles. I mean vehicles.

I will give you the exact numbers. Wait. It is in the range of INR 27 crores, INR 28 crores.

Okay. And maintenance CapEx is around of this -- of around [ INR 50 crores ].

So altogether, if we take that number, so maintenance CapEx is an average of the total block, correct? And maybe sometimes there may be a lag, it may be a little bit of high effect. So we are taking average of 2%. It may be 1% sometimes. It may be 2.5%. Sometimes, it may be 3%. It all depends on the vehicle condition and other yard conditions.

The next question is from the line of [indiscernible] from JNJ Holdings.

Sir, can you just tell me what is your total debt? Because I was just seeing your blocks, you have long term, which is about over INR 410; short term, which is about INR 67. And there is other financial liability, probably that add about INR 70 crores, INR 75 crores, right? The total debt it was around INR 550 crores, sir?

If we'll include that, then I will give you the breakup of the entire block, you'll then write it down, then that -- those will take the bank debt plus the promoter loan plus the potential allotment plus the COD of the company, which is altogether INR 550 crores, okay? And out of which, INR 67 crores in FTC.

Sorry, sir. 60?

INR 67 crores in FTC...

Okay.

INR 105 crore is the promoter loan.

Okay.

The INR 377 crore is right from that.

Fair enough. Sir, so you gave a number that your debt going forward will go down to INR 425 crores. So...

Including...

Okay.

Yes.

So including that would be about INR 500 crores.

It's a INR 450 crores right now. So I'm telling you that in the range of INR 425 maybe for the next year because we are taking the volume performance. So it will be definitely June last of the total debt number. We'll be gradually get that 6 months' time, and that we are going to reach up to INR 25 crores to INR 30 crores of...

Perfect.

After that, there's CapEx...

Okay. So sir, if I just do some back-of-the-envelope calculation. So basically, this year, you are expecting maybe the same type of year as FY '20 because you're expecting about INR 50 crores, INR 60 crores in your either profit after tax and plus your deferred tax and add your depreciation, which is about INR 45 crore, INR 50 crore. So -- and you want to utilize that INR 50 crores for the repayment. So basically, you're expecting a same year as FY '20?

Yes, sir. I am expecting the same because until now there is -- I can tell you, the operating side, there is a problem, correct? Operations side that we're on.

Right.

So the hit which we have already been taken in this quarter will be coming up with the numbers flow out after [ one-off -- from one-off ] 45 days, correct? And actually, we will see for this coming quarter, July 15, I'm looking -- until July 15, I'm looking something in the low side. But after that, they may pick up. And September after, second half will be [ low ] results. There's no demand today. But after that, it is not going like that only.

Right, right, right. Things will improve our share going ahead?

Yes. So there may be marginal decline definitely. There is -- I'm not telling you because today, there is no situation to tell anything about the [indiscernible] in the rate which we -- which we'll have to take to in this quarter of June, that will be coming on after that, only it will be a number to deal what we'll be doing in this coming couple of quarters.

The next question is from the line of Nishant Shah from Dolat Capital.

Yes. I just wondered, do you know -- will there be any price hikes in the second half of the year or will there be a pass on?

Pardon?

Will there be any price hikes in the second half of the year?

There is a slight probability in that side.

Okay.

It will all depend on the demand. Right now, there is no demand so we won't have any kind of, what, price hike. So operations is going on. Until now, there is not much impact on the operation. Profitability will definitely impact, but operations are going on.

Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. Vikram Suryavanshi for closing comments.

We thank the management of Navkar Corporation for giving us an opportunity to host the call and taking time out for interacting with the stakeholders. Thank you all for being on the call. Thank you, sir.

Thank you. Thank you so much, everyone. Thank you, everybody, for joining the call. And I hope we have the number for all the queries and inquiries.

Thank you, everyone.

Thank you very much, sir. Ladies and gentlemen, on behalf of PhillipCapital (India) Pvt. Ltd., that concludes this conference. Thank you for joining us and you may now disconnect your lines.