RSWM Limited (500350) Earnings Call Transcript & Summary

Good day, and welcome to the RSWM Limited Q4 and FY '22 Earnings Conference Call. We have with us today from the management, Mr. Avinash Bhargava, Chief Financial Officer; and Mr. Surender Gupta, AVP, Legal and Company Secretary. [Operator Instructions] Please note that this conference is being recorded. Before we proceed with this call, I would like to take this opportunity to remind everyone about the disclaimer related to this conference call. Today's discussion may be forward-looking in nature based on management's current beliefs and expectations. It must be viewed in conjunction with the risks that our business faces that could cause our future results, performance or achievements that differ significantly from what may be expressed on such forward-looking statements. I now hand the conference over to Mr. Avinash Bhargava for opening remarks. Thank you, and over to you, sir.

Thank you so much. I'm Avinash Bhargava, CFO, RSWM. Now I'll start my conversation with you. Thank you. Good afternoon, and a warm welcome to all our participants in Q4 and annual conference call. I hope you had a chance to look at our investors presentation, which is uploaded on the stock exchange and on our website. Now I would like to start with a brief introduction about RSWM Limited. We are one of the largest manufacturers and exporter of yarn and denim in India. Our yarn segment includes synthetic melange, blended cotton viscose and specialty value-added yarn, which contributes approximately 80% to our revenue. Denim contributes 20%, which includes both spinning and fabric manufacturing. In FY '22, we have commenced into knit business also with an initial investment of INR 80 crores, which will start contributing in FY '23. Now I would like to start with my opening remarks, which is divided into 3 parts. Starting with a brief overview on textile sector then about our yarn and denim segment and finally, key financial highlights for the quarter and full year as well. Let me begin the call by iterating our outlook on industry. Textile industry has been significant rebound and growth in both the markets, domestic as well as exports in financial year '22 after the outbreak of COVID-19. The sector has utilized the opportunity in best possible manner, which can be validated by business increase in both the markets. India's Textile and Apparel exports have surpassed USD 40 billion mark for the first time in FY '22 versus USD 33 billion in FY '21. Industry aims to tax $100 billion by 2030. Huge demand has also resulted into excessive pressure on the logistic, rising freights -- rising freight charges due to shortage of containers, higher coal and cotton prices, which are impacting the sector margins. Continued support from government via various schemes has put sector in better space. China Plus One Strategy has brought focus into Indian market globally. Trade pact with UAE and Australia to allow zero duty access will boost textile sector. The importers have started looking for different suppliers after U.S. passed its law related to ban the imports from Xinjiang region, which accounts for 20% of globally produced cotton, which has helped Indian suppliers to come into picture. Now coming to our yarn business. In financial year '22, we saw good traction in our yarn segment currently due to higher competition and constant pricing pressure is impacting demand of cotton and PC melange. Mills predominantly producing cotton and its brands have shifted the production to other brands, such as PV, PC, poly and viscose 100%. The dyed yarn order position is relatively better in medium and fine counts but continuous support of various schemes by government has helped in enhancing competitive edge of textile value chain, which is giving us confidence that things will normalize in coming quarters. We see far more opportunities for yarn in times to come. Now I take Denim business. We understand strong demand in Q4 and financial year '22 for denims across all markets. Quality of the LNG denim is accepted by well top brands. We are happy to announce that our denim business has turned positive during the quarter, and management has confidence that we will continue to touch milestones with regard to sales numbers despite all challenges to deliver due to capacity constraints. Our order book on denim side continues to remain heavy. Quarter 4 FY '22 quarter, sales for the quarter increased to INR 1,121 crores, up by 34% on a year-to-year basis. Our domestic and export turnover has increased 27% and 47%, respectively, as compared to same quarter last year. EBITDA for the quarter stands INR 142 crores which is 5% higher as compared to the same quarter last year. Our PAT for the quarter stands to INR 110 crores, up by 51% as compared to the same quarter last year. Q4 FY '22 witnessed upsurge in demand backed by strong wedding season and upcoming school uniform season in quarter 1 of FY '23. Now coming to full year performance. In FY '22, RSWM has demonstrated solid execution and showcased the inherent strength of its business model despite several challenges with strong demand, higher realization and better product mix, which helped us in posting its best ever results in FY '22. We delivered highest ever sales in FY '22, which stands at INR 3,817 crores, up by 64% on a year-to-year basis. Export sales recorded for FY '22 stands at INR 1,419 crores, up 88% on a year-to-year basis. EBITDA for FY '22 due from INR 215 crores to INR 464 crores. PAT for FY '22 stands at INR 240 crores versus INR 22 crores of FY 2021, higher by approximately 11x. We have achieved substantial scale-up in revenues barring expansion and profit growth in tough operating environment marked by continuing impact of the global pandemic, geopolitical crisis, inflationary trends and supply chain bottlenecks. We expect the situation to normalize in coming quarters and remain focused on execution and agile to the market opportunities. We, at RSWM, are now ready to take a next leap of growth in our business. On the same line, our Board has approved additional CapEx of INR 315 crores for expanding its spinning capacity at Lodha, Banswara unit by 51,000 spindles to cater higher demand. CapEx announced in quarter 1 of FY '22 of INR 410 crores in expansion of denim fabric, manufacturing capacity, cotton, melange yarn, manufacturing capacity at Kharigram, Gulabpura and modernization and balancing equipment across all units and knitting units are progressing as per schedule. We expect an incremental contribution of around INR 650 crores to INR 700 crores going forward from this capacity addition. For our all shareholders who had supported us in all times, Board has recommended dividend of INR 25 per equity share on face value of INR 10 each for the year ended 31st March '22, the same shall be paid subject to the approval of shareholders. Board has approved the right issue of share capital up to INR 250 crores, which will be used in repayment of long-term debt and augmentation of long-term working capital. With this, I would like to open floor for question and answer session now. Thank you so much.

[Operator Instructions] The first question is from the line of Niraj Mansingka from White Pine Investment Management. Please go ahead, sir.

Congrats on the good set of numbers. Sir, just wanted to know why do you need to raise money via rights issue? Just wanted to know your thought on that.

Yes, voice is not clear.

I repeat, why do you need to raise money via the rights issue?

This is to -- this is for repayment of higher interest term loans and for long-term working capital.

Okay. Sir, the reason I'm asking is like, you'd raise money from equity because equity is actually -- your company's return on equity is much, much higher than the cost of debt. So, one, raising money from equity and repaying debt really doesn't make sense when the company is growing and it thinks about the opportunities in the future and then the return ratios also will get [ dented ]. Number 2, you are also paying a dividend INR 25, almost INR 60 crores and shareholders will also pay tax on behalf of that. So, I don't understand logic that you're giving money on the one hand and asking the shareholders to give taxes. On the other hand, you're raising money to pay the debt and long term loans which cost of capital is much, much lower than the cost of equity. So, can you just elaborate how you're thinking on capital allocation?

We, as RSWM, is paying the dividend to the shareholders for rewarding the investment -- rewarding for the investments of shareholders. And secondly, this right issue is also for rewarding our shareholders.

Sir, right issue doesn't reward the shareholders. Shareholders have to give money and then they will have to wait -- the same amount of money gets distributed over a longer -- larger equity. So frankly, [indiscernible] I think doesn't make sense at all to do such corporate action. And how do you think about the return on equity? Do you think that you would get lesser returns in longer term over the debt, then you would raise equity right now? So any thoughts on that side as well?

Can you please repeat this question?

Sir, what happens is when cost of equity generally is 14% on an average and when the company is doing extremely good, the return ratio that you're reporting is in excess of 20% in return of equity. Then raising money from equity to repay debt effectively is like taking money on a 20% and paying money of between 5% and 10%. So, sir, just wanted to know your thought that have you given a thought on that side or you just want to deleverage the balance sheet.

This is to strengthen the balance sheet also. Our debt-equity ratio and fixed asset coverage ratio, DSCR and all will improve after this infusion.

Okay. Sir, I thought your company's -- the cash flows are so strong that you can easily repay all the debt and also continue to do your growth activities. I just thought on the way the performance is coming up.

Yes, definitely. Cash flows of the company are very strong.

So then it doesn't make sense to raise rights issue at all, right? And because -- and repay -- and pay higher dividend dividends because ultimately the same shareholders are giving money to you from one pocket and in the other pocket, they are getting money and they are paying taxes.

Actually, we have planned certain capital expenditure for years to come. And every year, we will pay approximately INR 150 crores. So with this right issue, we will repay the long -- high-cost loans and would use this remaining amount for our long-term working capital requirements.

But if you look at the cash flow from our operation, you have still more than INR 500 crores...

Mr. Mansingka, you may request -- we may request that you return to the question queue for follow-up questions as there are several participants waiting for their turn. Just give me a moment. Next question is from the line of Prerna Jhunjhunwala from Elara Capital.

Congratulations on strong set of numbers, sir. Just wanted to understand the outlook for the year. You have done a very strong year in FY '22. What should we expect for FY '23, given the volatility in raw material prices and the strong cotton prices? So obviously, demand for blended is doing well. So, what kind of growth and margin should we expect for FY '23?

Yes, please. You are talking about?

FY '23. Any guidance that you would like to give on top line growth or margin.

Yes, yes. This -- if the current prices and the profitability both will sustain on the level which we have as of now, we will have around INR 4,500 crores sales in next year with the -- [indiscernible] profits in next year, with the same EBITDA level of 11%, 12%.

Okay. And sir, could you help us understand the CapEx progress across each of the segments that you had announced in FY '22, where they are, when can we expect which quarter, which product will be commissioning to understand how the year will progress for you in terms of new capacity?

These are -- we launched 4 CapEx in last year. First was this melange at Kharigram, 30,000 spindles, then denim sheet dyeing plants [indiscernible] at Lodha -- sorry, Mordi and some 20,000 spindles of denim at Mordi, knitting plants and around INR 50 crores plant for balancing of equipments across all plants. So we have completed this INR 50 crore capital expenditure in 31st March as we planned. And this one -- denim sheet dyeing we have completed on target days. Regarding this denim spinning, melange [ thread ] and knitting, we expect that these will be completed by 30th of June '22. They are delayed by around 90 days just because of delay in electronic equipment, spares and delayed delivery of machines, which has happened in different days from Germany. We have imported some machines, but softwares have not been supplied by them. So without these softwares, we cannot start these machines. That's why there is a delay of 90 days, but it is well in control.

Understood, sir. So sir, knitting plant of INR 50 crores -- and the rest of knitting -- will be done by 30th July, I didn't understand that portion.

Yes. These will start operations in second half -- second quarter of this FY '23.

The knitting plant will actually start in the second quarter, okay. And sir, the CapEx that you announced this quarter of around 51,000 spindles, that will begin when?

The expansion program has been -- has already been announced for this. We have started capital expenditure. We have ordered, we have opened ILCs for import of machinery. This CapEx cost is INR 315 crores, and this will be -- hopefully, this will be completed by 30th of September '23. Hedging all risk of delivery of this machines, we will complete it by 30th of September '23.

So, next year...

In H2 of '23, '24, this will be operational.

Okay. Understood, sir. Sir, my last question is on PLI scheme. You applied for a type 1 scheme of PLI. Could you help us understand what are the products that you are going to cater there? And that's very interesting, and we were positively surprised on MMF bid expansion plan because PLI schemes were new. Sir, just wanted some details on what kind of product line are you looking at and when will those products get established and come into sales?

Prerna, there are certain things which are into consideration and a lot of things have to come from the government side also. So about PLI, we have not firmed up anything as of now. But yes, there are certain things which will take place in coming days.

Next is from Abhilasha D. Satale from Monarch.

Congratulations for a good set of numbers. So, I have a couple of questions in regard with the overall margin of the company. So this quarter, our gross margin is in the range of 41% and -- which is gone down from the 46%. So I understand now the new raw material cost has kicked in and because of that, we are witnessing reduced freight. So how much of it of the rise we have already passed on to the customers? And what do we expect our gross margin to pan out over a period of time, like, say, in the second quarter or in H2, if you give us some highlights in terms of what do you think the spreads are likely to be?

You can see that the margins will not be as good as these were in Q4 of '21, '22. But yes, in Q1, this will be satisfactory and the margins are there. As far as the spread is concerned, this will be reduced because of higher raw material costs.

So in Q1, we will see gross margin...

There is a pressure on prices because of increase in raw material costs.

Right, right. So in Q1, we will see gross margin further going down from this 41%?

Yes, if the current prices -- current prices of current level of prices of raw material as well as this sales price will continue, it will be satisfactory. But if we will not be able to recover the sales prices even after this reducing the sale prices, then this will go down, obviously.

Okay. Sir, can you say some price levels, what were they in the Q4 and what are they, like, say, in terms of finished goods and raw material, what were the average price in Q4 FY '22? And what are they currently?

Are you asking for this average sales realization?

Yes, yes, right. Average sales realization and raw material price.

We'll talk about these separately. Let me discuss this about raw material prices and when compared with raw material -- cotton only, first, we will compare the cotton. If we will compare the cotton prices from April '21 to April '22, which is almost higher than the 100%. So the prices of cotton is increased from -- if we -- we'll talk about cotton are INR 43,000 crores per candy. And now it's INR 86,000 per candy, you can say $90,000 per candy for particular type of cotton. And if we will ask about this Shankar-6 type of cotton, it was of INR 48,000 per candy and now it is INR 98,000 for candy. So it is more than 100% -- increase is more than 100% in cotton prices. If we will compare this cotton price from April '20, '21 and '22, per kg of raw material prices, I would like to mention, cotton prices in April '20, it was INR 111 per kilogram. And then in April '21, it was INR 133 per kilogram. Now it is INR 241 per kg of raw material prices. If we'll will talk about VSF per kg, it was INR 72 per kg in April '20; April '21, it was INR 94 per kg; and then in April '22, it is INR 120 per kg. If we'll talk about VSF, it was INR 168 per kg in April '20, and then April '21, it was INR 171 per kg and now it is INR 180 per kg. So in case of VSF only, the price increase is not as much as in cotton and PSF.

Right, right. Sir, and can you also tell the yarn prices like cotton yarn as well as blended yarn for the similar period so that we will just gauge the spread?

Okay. Spread kind of things is different and vary to -- vary from count to count and industry to industry. So we cannot discuss about spread.

Okay. Sir, is count yarn...

You can discuss about EBITDA, business-wise EBITDA we can discuss, but about the spread, we cannot discuss here because it differs from count to count and industry to industry. And being this confidential data from industry to industry, we cannot discuss this spread here. We can discuss about EBITDA.

Fine -- so sir, we have done around 12% margin in the current year. And the Q4 margin was higher last year. And this year, it is in the range of 12.5% or so. So going forward, for FY '23, what kind of EBITDA margin is sustainable according to you because now the raw material price has also changed and some of -- some part of it we have passed on to the customers.

If we will discuss about this EBITDA margin -- in current year, the EBITDA margin of yarn was around 14%. And in case of melange yarn, it was about 18% to 19%. And if we will talk about entire RSWM, it was about 12%. Given the prices of raw materials and sales price, if these are sustainable, we will be able to maintain this 12% in coming year also.

Okay. Okay. Fine. Fine. And just regarding the CapEx part, how much CapEx like we have planned in FY '23?

FY '23, we have planned INR 315 crores for 51,000 spindles plant at Lodha. The Board has approved recently.

Okay. And how will it be funded?

This will be funded by term loans from the bankers.

Okay. entire -- like there will be term loan and there will be some part which will -- you will fund it through internal accruals. So what is that ratio?

80% will be funded and 20% will be our equity.

Okay. Okay. And sir, you said that through right issue, you will reduce the debt, which is a high-cost debt. So how much it is? And what is the cost of that debt in percentage terms?

That debt is around INR 170 crores to INR 180 crores, maybe INR 170 crores, maybe INR 180 crores. If the -- all the processes of right issue are completed well in time, this will be around INR 155 crores to INR 170 crores. If this will be delayed in maybe INR 160 crores, repayment of that high-cost debt and it will be in the range of around 8% to 8.5%.

Okay. Okay. And then rest of the debt, either it is working capital or term loan, which we will raise for the current -- this expansion of INR 350 crores (sic) [ INR 315 crores ], then what is the cost of debt for that amount?

It is a very, very good question. This is for about 7.25% to 7.5%. And without the state subsidy. And with the state subsidy, this is lesser then.

Okay. So 7.5% is without state subsidy. So I mean, bankers are giving loan at 7.5% in the current scenario to the textile firm maybe because of the good cash flows and...

Our loan [ percent ] is 7.5%.

Okay. That's a very good rate bankers are offering to textile companies. I think it is one of the lowest, which we would have had in the history. Okay, fine. And with state subsidies and it will be in the range of, I think, 2.5%, right?

You can say -- because we will be able to take the state subsidies only on the TUF enabled machines, which remains about 50% to 65% of the total cost of the project.

Next question is from the line of Mr. Vikram Dalal from DAM Capital.

Sir, when you are highlighting your margins, yarn segment at 14%, and melange at 18%, 19%, why the corporate margin comes down to 12%? And what further steps you're taking to improve the margins between the corporate's margin and the yarn margin?

We sold out one brand Mayur. And in that, there was a normal loss of around INR 9 crores and closure loss of around INR 9 crores, INR 18 crores loss was there in FY '21, '22. Because of that, it closed to 12% -- because this was negative and impacted the overall [ infra ] of the company.

Sir, given that this loss will not be there and our company will have a higher turnover because of new capacity additions, our margins should healthily improved, right, sir? Why you are guiding it will fall down?

It may be more than 12%, but we are -- we have taken this 12% with very rationale sides. It may be 12% to 14%. But from safer side, we are saying that it will be 12%.

Understood, sir. Understood, sir. Sir, then with regard to turnover, currently, you're doing INR 1,125 crores. If you annualize that itself come to INR 4,500 crores, then you added CapEx also. So ideally, this year turnover should cross INR 5,000 crores sir?

No. This -- the INR 3,817 crores is...

No, you look at Q4 turnover. Q4 is at normal...

Q4 was exceptionally very good because of higher price realization in case of cotton yarn and INR 3,817 crores turnover was at highest level of prices. If we maintain this sale price of either PV, either viscose, either cotton or PC, any kind of yarn -- if we -- if the prices are sustainable, then this turnover will be INR 3,817 crores. And with these expansions of INR 410 crores, which are going to be completed in '22, '23 only. With this investment of about INR 410 crores, this will add around INR 650 crores to INR 700 crores in next year. So if the prices are sustainable the -- and the top line will be INR 4,500 crores next year.

Sir, going for a 3- to 5-year period, what is the growth rate you are targeting as a company, sir?

After 5 years, you can expect INR 5,500 crores plus or 6 -- you can say, INR 6,000 crores top line.

After 5 years, sir?

After 5 years.

Sir, then this is hardly any growth rate, sir.

We have announced all capital expenditures till 30th September '23. There are certain projects also which are in pipeline. These will be ended, we will update you in forthcoming investors call.

Okay. Sir, this yarn project, how much turnover will be there for us?

In?

The yarn project, which you announced, how much turnover it will add?

It will be around INR 500 crores.

Next question is from the line of Mr. Pramod Jain from Rising Sun. Please, go ahead.

I would like to understand the inventory levels and the order book situation, particularly because our understanding is lot of mills in the South India started closing down or facing issues because of the higher cost of raw materials. So I would like to understand what is your order book situation and to what extent is the raw material covered?

Our sold position in dyed yarn is up to 15th of July or you can say 31st of July -- in other yarn also more or less same position is there.

And order book, sir?

Pardon?

Sir, to what extent -- do we have the orders for next 3 months, 4 months?

Yes. We have orders for next 3 months. I'm saying that till 31st July we have the orders.

Okay. Sir, I would like to continue with what Mansingka said. Just looking at your numbers, your net debt is INR 1,100 crores, your net worth is around INR 1,000 crores. So you have a debt-to-equity of 1.1, which is a very comfortable kind of thing. And especially in textile, where the rate of interest you said your high cost of loan is around 8.5%, and you want to repay 8.5%, which is very low in terms of cost of capital, if you look at it. The point which I wanted to understand is your return on capital employed a 16%, return on equity is 27%, but delta is there because of the cost of debt, which is relatively lower. Now you want to repay this debt, obviously, your return on equity will fall down and you're paying the low-cost debt with -- by taking high-cost equity. The rationale doesn't make sense because if we look at it, it's a INR 1,000 crore company and you're raising INR 250-odd crores, which is approximately 25% of new capital, which will be issued. So it's a high amount of new capital issue which will happen, and this will further bring down your return on equity. So it will be detrimental to the shareholders, not actually benefit for the shareholders.

You can -- if you have that kind of question, we can explain, you can write a separate email to us. We can...

Yes, because I couldn't find -- it is very difficult to digest the fact that why is the right issue is taking place to repay of debt at around 8.5% rate of interest.

We'll explain you the rationale about this separately, you can write a mail to us.

Yes. As a shareholder, I would have been very happy if the promoter would have put in money as a -- or a QIP would have been taken place rather than a right issue at this kind of market situation. Anyway, sir, we will write a separate mail to you and looking forward for your reply, sir.

Next question is from the line of Mr. Raj Nahar from Mili Consultants.

Congratulations for excellent numbers. My first question is regarding the subsidy on the loan which you stated Rajasthan government is giving. So on your -- this CapEx of INR 400-odd crores and INR 300-odd crores, are we entitled to get that 5% subsidy?

Yes. Yes.

So you can raise the full amount whatever is needed by way of loan or there is some requirement that...

No, no. we can raise only up to 80%.

80%. Okay. Okay. So then the cost of borrowing comes down drastically because your net debt -- net rate interest will be just 2.5% to 3.5%, correct?

Yes. So it will be around 3%, 3.5% only, rate of interest for this. Effective rate of interest will be this only.

So that's a phenomenal thing actually for the textile industry if you can get long-term debt. And this -- what is the duration of the debt basically? State government subsidy fives for how many years?

They have 2 kind of facilities in Rajasthan. I think your company is trying to get this special customized package. Without special customized package, the investment subsidy is 6% of 5 years. Your company is trying for either increasing rate of subsidy or increasing period. Otherwise, this is the minimum 6% for 5 years is okay for all these projects. This is all approved by government. We are trying for more.

Okay. And my second question is about your captive power plant, in the sense that are you getting the coal from the linkage or from the Coal India or you're buying or importing?

We are importing and buying. We are not able to get...

And you don't have the grid power because now the cost of generating power will be above INR 15 or so.

As of now, we are -- as of now, we are buying the power from energy -- this state electricity boards.

So you're not operating your power plant currently.

We are -- these operators -- these power plants are partially -- operating partially. Not fully.

Okay. And you have some solar power also...

Yes, we have solar power plants also.

Like what is the megawatt or kilowatt you have?

We have 26.11 megawatts, which is planned to 30 megawatt for the near future.

Okay. Okay. And consider definitely [indiscernible] specifically lot of shareholder is very, very unhappy or uncomfortable so take up the matter, sir.

[Operator Instructions] The next question is from the line of Manish Dhariwal from Fiducia Capital Advisors Private Limited. Please go ahead.

Sorry, in fact, we noticed that the company's performance is improving consistently on a quarter-on-quarter basis. Now -- so -- and then the company is also consistently expanding, in fact, increasing CapEx and seeing as to how they are positioned in the market basically improves. The areas that the company has identified are like denim and yarn. Yarn which is a core strength of the company. And my question basically is to understand that how is the competitive strength of the company increasing in this period so that the company's expansion programs do not hurt it when the cycle changes? Because, sir, textile, we know is a cyclical industry. So all the CapEx that we do today, it also has to generate commensurate cash flows. Now I can understand that the way to protect the company, you are looking at raising equity money. But sir, raising equity money has its own cost. So my basic question is to understand the competitive strength that the company has developed so that it is capable to handle the downturn, which will surely come.

Your question is very right. We have internal risk sensitivity analysis system within the company. And we review all management decisions periodically. And you can rest assure that all whatever expansion programs are there, all kinds of risk mitigation plans are there in place because RSWM is known to be a very vast product mix type of company. They can produce any kind of blend, any kind of yarn. So we have the capacity to shift from one product to another product within the yarn. So based on that, we do ship this product -- production of products based on the demand of the particular product. Let us take one example of this cotton demand and cotton yarn prices, we -- at some of the locations, we have a started PC, which has good demand in the market. And at the same time, we have the dyeing facilities at different locations. And whenever this demand of yarn -- gray yarn will get reduced, we focus on this dyed yarn and whenever this dyed yarn demand is lower then we can start generating the profits from gray yarn. So there is no risk in RSWM as we understand.

Right, sir. Right, sir. Sir, just to take it forward. Now sir, Mayur Suitings and Mayur branded product and then if you also have a related garmenting business as well. Now that was also very, very strong business, and it was one of the leading brands in the country. However, we actually find that the company actually has incurred a loss upon sale. One is that you sell and you make money, like which is a good idea. But then we actually got rid of the brand literally and paid also. So now that -- see we've had that kind of a situation once, right? Now Denim is a business which a lot of companies have tried and they have not made money. It has actually become lower than commoditized. You have companies like Raymond and you have so many South based companies and like we ourselves, we've also had a tough time. Now you have further putting money in this. And sir, what we're doing is that now, sir, now if I just look at the financials for this year -- so our PAT for financial year '22 has been INR 239 crores plus depreciation of INR 113 crores. So it takes us to about INR 350 crores plus. Now so INR 350 crores is a net profit that we are going to be making this year. And our total CapEx is also about INR 750 crores. Now in this scenario. So I would -- again, as my fellow investors and analysts have said that there's a diluting equity and that too also a significant level. To basically strengthen the company, sir, may not be the most judicious of the idea. So I would also request that the company should basically relook at the whole structure and the plan that is made. And we believe that given the way this company is performing in this cycle so far, it is like really generating very, very good profitability. So we should basically conserve our equity capital and build on it. So that is what my limited point would be.

In fact, I could not get your question, but you may write on my e-mail ID, and I will answer.

Right sir, I will do that, sir, I will.

Thank you. As there are no questions, I would now like to hand the conference over to Mr. Avinash Bhargava from RSWM Limited for closing comments.

Thank you. Thank you so much, all of the investors on the con call. And our company is very hopeful to get better performance in '22/'23 also as we did in '21/'22. Thank you so much to all. Whosoever could not raise the question on this con call, may write to my e-mail ID, which is well there in on investors presentation slide. So thank you so much. Thank you so much to all.

Thank you. On behalf of RSWM Limited. That concludes this conference. Thank you for joining us, and you may now disconnect your lines.