Shri Keshav Cements and Infra Limited (530977) Earnings Call Transcript & Summary

Thank you. Good morning, and thank you on behalf of Kirin Advisors. I welcome you all to the conference call of Shri Keshav Cements and Infra Limited. From the management side, we have Mr. Venkatesh Katwa, Chairman. Now I hand over the call to Mr. Venkatesh. Over to you, sir.

Yes. Good morning, everyone, and I welcome and thank you for joining the conference call for Shri Keshav Cement and Infra Limited. We are delighted to have each one of you here as we explore and discuss the financial performance of quarter 3 of financial year 2024. Before we dive into the details of this quarter, let me offer a brief overview of our company and its robust business model. Shri Keshav and Infra Limited, formerly known as Katwa Udyog Limited, is engaged in manufacturing of cement and solar power generation and distribution in the state of Karnataka. The cement plants are located at Bagalkot district in Karnataka and solar power plants are located at Koppal also in Karnataka. The company supplies cement in North Karnataka, coastal Karnataka, Goa and some southern parts of Maharashtra. The company has a network of over 350 cement distributors, 600 retail sales point and 14 solar power plants -- power consumers. Since April 2018, the company has been meeting 100% of its energy requirement through renewable solar generation. The cement plants of SKCIL are likely to be the only ones in India running 100% on green power energy, resulting in nearly 75% to 80% reduction in the power cost. We are delighted to share positive [ updates ] regarding our ongoing capital expenditure plan aimed at expanding and modernizing our capacity. Anticipating the commencement of trial production that runs from approximately Q3 of this financial year, around July 2024, we are optimistic about the significant boost this will provide to our overall growth trajectory. Our commitment to excellence is reflected in recent accomplishments like -- including recognition from Bureau of Indian Standards for maintaining the highest quality of cement without any product failures over the past 3 years of observation. Furthermore, our strategic CapEx initiatives combined with reduction in raw metal prices and expansion of our solar capacity are aligning favorably, setting the stage for promising growth prospects for the remainder of FY '24 and beyond. Also we are very pleased to announce that the permission has been granted for expansion of the solar plant from the current capacity of 37 megawatts to 40-megawatt peak, contributing to our commitment to sustainable practice and energy efficiency. This development further solidify our position for continued success in the upcoming years. So in third quarter of FY '24, our revenue from operations were primarily driven by cement business constituting around 79.3% of the total. The remaining 20% originated from solar power generation, distribution and some other sources. The increase in both cement and solar capacity is set to not only enhance our top line, but also propel our profitability at an exponential rate. We want to reassure our stakeholders that our comprehensive strategies are firmly in place, ensuring impressive growth in the times ahead. Now let me take you through the performance of Q3 FY '24. In the third quarter of FY '24, Shri Keshav Cements and Infra Limited reported a total income of INR 34.36 crores (sic) [ INR 34.63 crores ]. EBITDA witnessed an increase of 12.47%, reaching INR 11.69 crores while the EBITDA margin expanded to 34.38%, making a substantial rise of 408 basis points. The company achieved a net profit of INR 3.97 crores, resulting in a net profit margin of 11.46% accompanied by a notable increase of 748 basis points. Furthermore, the earnings per share stood at INR 2.52 to demonstrating a remarkable growth of over 117%. These figures indicate a positive trajectory for the company's financial performance in the third quarter. As we anticipate the forthcoming fourth quarter, the optimism at Shri Keshav Cement and Infra Limited is underpinned by a strong Q3 performance and strategic initiatives designed to secure a prominent portion in the industry. The company's consistent growth and financial stability not only reflect past success, but also set the stage for continued prosperity in ever-evolving market landscape. In summary, SKCIL emphasized notable improvements in margins during the third quarter of FY '24. The company reported positive trends, including enhanced EBITDA margin and significant increase in net profit margin. These developments signal a positive trajectory for the company's financial performance in the current quarter. So as we approach the question-and-answer session, I would like to convey my sincere gratitude to all our stakeholders. Your unwavering support and active involvement have been integral to our growth journey, playing a crucial role in our success. We genuinely appreciate the significant contribution each one of you has made. So before I say thank you, one last word I would like to add. All the warrants that were issued in April for -- to raise the funds under a preferential allotment basis have been subscribed. So as of now, there are no outstanding warrants in the balance sheet. And once again, I thank you for your presence. And now I would like to open myself for question and answers. Thank you.

[Operator Instructions] Our first question is from the line of [ Yeshwanti from Kojin Investment ].

Yes. This is [ Yeshwanti from Kojin Investment ]. Congratulations, sir, for a very good set of numbers.

[ Yeshwanti ], ma'am? Sorry to interrupt. Your voice is sounding soft. Can you speak loudly?

Yes. Can you hear me better?

Yes, yes.

We hear better, yes.

So congratulations, sir, for a very good set of numbers. I just have one question with regarding our profitability and our revenue. This is a post-monsoon period where normally cement uptick we can see. So just wanted to understand why our sales for the Q3 were flat as compared to the year-on-year growth. And secondly, we posted around -- a margin of around 34%-plus. So what has contributed to this 34%? What has contributed from the operational efficiency and what has contributed from the softening on the raw material prices as you mentioned in your opening remarks? And whether these margins are sustainable?

Sure. So your question is regarding the growth in Q3 as well as why was there enhanced profitability or EBITDA based on what impacted. So if you look at...

Yes. Flat top line growth.

Correct. So typically, when you look at the top line by itself, even though the growth has been almost flat, but dispatches have grown and most of the dispatches what we have done in this quarter have been typically ex plant basis, which means that normally the management of the company is trying to reduce the dispatches on the delivered basis and relying mainly on ex plant basis. Now this will have a specific advantage like the transportation cost is loaded onto the dealer, of course, with certain discount on the pricing. Even though our quantity and capacity utilization has reached 76% because of the lower -- not exactly lower realization, because of, to a large extent, avoiding the transportation, the top line has appeared very flat, which is why you will see that your margins have increased drastically. In theory, if we were to do the same logistic like what we did in Q3 FY '23, the top line would have been a little higher. But the main contributor to the profit margin and the EBITDA has been the reduction of prices in the petroleum coke. And that seems to continue to go down for this quarter 2. And hopefully, with that trajectory showing no adverse price change, the profitability and the EBITDA is likely to continue in the positive direction. Thank you.

Yes. And sir, can you please explain me this ex plant? Does it mean that you are at least dispatching it from the plant, something like that?

So what typically -- so typically, what happens is when we dispatch cement to the end consumer, depending on the trade and commerce dealings, our competition, what is going on, a lot of times we also offer to deliver it to their doorstep. Of course, there is an increased price realization with that. But a lot of times, the company may not realize the entire cost or we'll not be able to entire pass on the cost of logistics to the consumer. But as and when we try to avoid more of delivering the goods to the customer, we eventually slowly get rid of the additional incremental transportation cost, which is why you will see that even though sales have grown, in reality net realization also has grown, but it's still showing a top line flight because some of the logistic costs also have reduced.

Okay. Sir, in the 34%-plus margin, how much has been contributed from solar? And what is the cement margin for you, if you can bifurcate?

So are you talking about EBITDA?

Yes, sir.

So EBITDA has been a healthy growth this quarter. Like this quarter, EBITDA is around INR 460. This was about INR 155 in Q3 of FY '23. This healthy growth is mainly because of reduction in fuel prices and is likely to continue. In fact, the entire last year, the cement EBITDA generated around INR 60 entire year, whereas industries has achieved about INR 850 to INR 900. However, we achieved very less only because of inefficient utilization of fuel and power, which is what is being corrected in the CapEx now. So with INR 60 the entire year, this year, we are able to achieve INR 250 for 9 months and almost INR 460 per metric ton in Q3.

That is the cement, right? And what is -- what about solar EBITDA? How -- what was the percentage over there as we are also looking EBITDA...

EBITDA you mean? Sure, sure. So solar EBITDA typically is around about INR 33 crores to INR 34 crores over the entire year. So over the quarter, out of around INR 11.7 crores EBITDA, almost INR 8 crores is contributed by solar. The balance is contributed by cement.

So the enhancement in the EBITDA margin is because of very good EBITDA from the solar cost efficiency, what we have seen as with the pet coke price coming down and also the strategies we played with the ex plant deliveries. Am I understanding it correct, sir?

Yes, yes. Mainly because of ex plant delivery, the top line has -- appears to have reduced in spite of increased dispatches only because, to a large extent, the logistic costs have been absorbed by the end customers. But EBITDA margin has increased drastically because of reduction of fuel cost. But there is no reduction in consumption. So they are 2 different things. Consumption has remained inefficient as it is. Even the power consumption is inefficient. But since the price of solar -- sorry, fuel has gone down, that has impacted the EBITDA. So this CapEx, what we will be doing, we will be addressing the issue of consumption itself.

Okay. So you said there is less consumption. So whatever we [indiscernible] we cannot predict, agree?

No, I could not hear the question. Come again?

You said that there is less consumption of the power. So I believe that is one whatever we generated from the solar that has been less consumed. Am I understanding it correct?

Correct. Even though we are consuming the power from our solar plant 100%, what could -- what inefficiently we are utilizing -- for example, let's say, we are consuming about 110 units per ton of cement, whereas the industry has reached around 60 units. So with our CapEx, so ultimately, that 50 units, what we are consuming here could have been better sold outside and generated profit, which is not happening right now.

Utilization is much higher as compared to the industry. I was thinking it other way that we are not able to sell it to the grid. Okay, I understood.

Yes, yes. We are still able to sell it. But of course, we could sell more had we had a very efficient power.

Yes, I understand. And we recently increased our solar by around 2 megawatts. So what was the spend on it? And in future, like in FY '25 or end '26, do we have any plan to enhance it further? And if yes, what is the CapEx for the same?

Solar, right?

Right.

So solar as of now, we have 37 megawatt capacity. As we speak, we are adding another 3 megawatt. So final paperwork to place order is going on. And the CapEx for this is around INR 8.5 crores to INR 9 crores, which will be contributed by the supplier by the way of long-term payment. So there is no cash outflow as such with this project right now. However, for the long term, once the CapEx of cement is completed and running smoothly, of course, company will look at adding solar capacity, which has been -- the management has got a very good experience in setting up the power plant, and it has been showing to be a very good vertical. So yes, there are plans. As of now, no capacity or anything of that sort is finalized, but the management is on the way of adding more solar capacity after cement plant has stabilized completely.

Okay. And even if you wanted to go for an expansion, I believe there won't be those incentives available, which we had initially. So I believe there are no incentives available on the government side. So you are going ahead any incentive, but the demand is very high.

So even though there are no incentives available, if we have to sell the power outside, what is happening is once we expand or -- once this new 1 million ton commission happens in July, so existing power, what we are using, what we could have sold we will start consuming it ourselves. So it will make sense to add another plant from which we will consume capital for which the incentives do continue. Because of capital consumptions, there are no additional cross-subsidy charges or other charges which otherwise would happen if we were to sell the power. So in that scenario, what would happen is the existing plant, which still carries the incentives will be free again to sell the power outside with government-led incentives. And the new power plant or solar power project will be utilized to consume the power in-house.

Okay. And sir, if you can just give me the outlook how the price increment has been in the Karnataka for the quarter we concluded and the current scenario?

The pricing -- as of now, the pricing it has softened a little bit in January. But still, typically, election, preelection, we would have expected a dip, but I don't see it happening so far. So January has been strong and till now has been looking good. So I'm hoping that apart from a minor price correction, there's no significant change in the ensuing quarters.

Our next question is from the line of [ Ananya Swaminath from C Square ].

I wanted to know, despite the favorable post-monsoon season, our sales were flat compared to Y-o-Y. Can you explain on it?

You're talking about Q3, right?

Yes.

So there has been increase in the dispatches from 65,000 to around 69,000 tons in Q3. However, like I explained earlier, the net realization reduced not on account of reduction in prices, but on account of the company reducing the logistic expenses. So typically, what used to happen in the past was, say, like for some percentage of the dispatches were done with the delivery model, which means that the goods were delivered at the customer's point by which the logistic cost was absorbed by the company. And of course, you could not have transferred the entire 100% logistic cost to the customer. But now that has reduced, which means that the logistic cost has not added to our top line, which is why it appears to show that the realization has gone down. But in reality, the realization -- naked cement price has gone up because of which, again, your EBITDA and profit margin also has gone up. So technically, even though it's looking flat, but we have also reduced the cost to a large extent in the logistic area.

Okay. And sir, how is our dealership network?

The dealership network is intact over almost 500 to 600 retail points. There has -- Q3 has been very robust. Q4 is already beginning to continue that trajectory what we've seen in Q3. Technically, Q4 generally is a little slower than Q3, but we have not seen any dip this quarter as of yet. And hopefully, we'll continue with a strong. And our dealers network, we are engaging in more marketing activities. Eventually, when we have this new capacity online, we should be able to sell 1 billion tons. So that's the preparation management is already involved in.

Okay. And how has been our working capital cycle?

It has been consistent. The inventory days also is in a path. And there's no significant change in either debtors or receivables. Everything has been almost similar to what it has been previously.

Okay. And about expansion, on full utilization of our expanded capacity, what is the likely turnover you expect?

So let's say, if I had 80%, if you're talking about 1 million tons, so with inflationary trends, even if you get the realization of 5,000, you're talking about around INR 370 to INR 430 top line.

[Operator Instructions] Our next question is from the line of [ Ritika Jain from HNI ].

Yes. Sir, can you throw some light on firm's deployment plan of recent fundraising?

Sure. So company successfully raised the funds almost INR 46 crores from preferential allotment and balance INR 3 crores we have raised through the bank. All together has been -- currently is being deployed towards CapEx of this 1 million ton plant. So as of now, the company has -- out of INR 80 crores, the company has drawn up INR 35 crores. INR 45 crores is yet to be drawn. Since most of the payments happened at the time of commissioning, next couple of -- next quarter, company will be drawing another INR 25 crores to INR 30 crores. So technically, the entire INR 125 crores, almost INR 100 crores will be utilized by the end of Q1 of FY '25. That's how it is looking so far. The prices have not escalated. So almost 90% of the purchases have been placed, which means that there's no scope of any ill effects of any kind of price escalation. So based on what we had anticipated, the project is going extremely smooth and is expected to be commissioned on time.

Okay, okay. Got it. Sir, where is the planned expansion of solar capacity? And when can we expect this increase to be implemented?

So the first expansion of 3 megawatts, in fact, we are going to be placing the order in the next week or so. So once that happens -- they are already finalized on the supplier. So once that happens, our target is around April 2024. That is 3 months down the line, we should have 20 megawatts.

Our next question is from the line of [ Himani from Suraj Enterprises ].

Am I audible?

Yes, ma'am. Yes, ma'am.

Sir, my question is your future growth strategies outlook for Q4 FY '24. Can you provide insight into the specific benefits and impact we anticipate from expanding our solar plant capacity to 40 MWP, particularly in terms of subsidiary and energy efficiency.

Definitely. So you want to know the benefits on why we are expanding another 3 megawatts, right?

Yes.

So first, the major advantage is the low capital cost because the existing transformers, transmission lines, bulk of the -- almost 20% to 30% of the capital cost has already been incurred. So what we are typically doing is we are enhancing the DC capacity to accommodate even the existing electrical equipment capacity. So with this low capital investment, the generation will be in proportion to the 3 megawatt what we will be adding, say, about 40 lakh to 45 lakh units per year. This will obviously mean that till we do the commissioning, this additional 40 lakh units will be sold in the open market, just like how we are doing right now, and additional revenue is generated. And around -- with almost 45 lakh units, the company will add almost another about INR 2 crores, INR 2.5 crores EBITDA only by solar. So that's what we're looking at right now.

[Operator Instructions] Our next question is from the line of [ Yeshwanti from Kojin Investments ].

Sir, I just want to understand like how -- or how is the demand scenario in Karnataka? Are any major projects coming up and infrastructure and how you see -- hello? Hello?

Okay. There's cross-talk. So you were asking how the cement demand looking up? And are there any new capacity being added in the vicinity?

[indiscernible]

Sorry. I mean, I couldn't get the second question. I think there was some cross-talk, so I could not hear the second part. I can address the cement demand part.

Yes sir, that is what I am asking, like how the demand is looking. So any major infrastructure or a housing project is coming up, there are a lot of stats from the government on the infrastructure. So anything is planned for the Karnataka belt where we have our major projects. Did you hear my questions, sir?

Yes, yes. Now I could get your complete question. So like business question. So typically, like post-monsoon demand is always on the high and Q3 and Q4 are -- generally, Q3 and Q4 tend to be very good with Q3 doing the best. So Q1 and then eventually continue to [ leave ] Q1. So as of now, the cement demand is showing robust growth. We expected some dip due to ongoing elections. But luckily, so far, no such dip is observed. And typically in Karnataka, what we are noticing is some of the projects, which had stopped immediately after the local election, they have picked up. So maybe expected to have a favorable opinion. So overall, the housing sector is intact. The government infrastructure spending is intact. In fact, we have seen cement price softening very heavily on other parts of India. On our side, too, there has been some correction, but it doesn't look like it will be such a major correction what we have seen in other places. So yes, the cement demand is robust as of now and is expected to continue in Q4, too. At the same time, the price of fuel also has been reducing. So it appears to be a good quarter so far.

Okay. Sir, do you expect the prices to remain under pressure for some more time as compared to the other parts of the country?

Do I expect what?

The prices -- cement prices to be under pressure in Karnataka on -- as compared to the other part of the country?

To a lesser extent, not to that extent what other parts of the country have seen. Somehow there has been some corrections, but not significant to impact any kind of bottom line significantly. So whatever correction is happening is commensurate with the corrections in the cost of fuel. So overall, I don't see a significant impact or any kind of negative impact happening in Karnataka region. We have not seen that, in short.

Sir, my question is, do we expect this slow -- I mean, the lower cement price to persist even for a few more periods, few more months?

Yes, this quarter, whatever we have seen so far, it will continue this quarter, but it is not significant is what I mentioned. So most likely, even if there is a dip, it is going to be happening until election and maybe a quarter after elections. But as of now, we have not seen that pressure happening here, not significantly. And I don't expect it to be there any severe pressure happening this quarter. If it had to happen, it should have happened by now.

Okay. So we expect that it will remain moreover at the same level for the current quarter, slightly expected to improve in the first quarter of the next year, but then the next quarter will be the monsoon period, right, sir?

Correct. So Q3 was a good quarter. Q4, a little correction, not significant as expected. And again, Q1 final year will be similar to Q4. And then, of course, Q2 of next year is going to be a monsoon quarter.

Our next question is from the line of Prathamesh Dhiwar from Tiger Asset.

Sir, just wanted to know on the volume side, can you give us how much our volumes has grown Y-o-Y for the quarter?

So volume-wise for 9 months, we have grown only 2%. And we will be expecting to touch at least 5% growth in volumes for the year-end. That is mainly because we lost significantly on Q1 and Q2. So Q3 this year has been our 76% utilization. And Q4 could be a little better based on what is happening so far. So technically, in FY '23, there was 2,26,000 tons was the dispatch quantity and we have already reached 1,98,000 for 9 months and -- or up to January. So we will be expecting the range of 240,000 to 245,000 tons for FY '24.

Okay, okay. And sir, I think in your last call, you told you are going to plan to enter into new markets like Pune and Bangalore. So any update on that?

So we would not be interested to look at that so immediately because once the commission happens or trial production happens in July, August, maybe in the Q1 of next financial we will begin to look at outside markets like Pune, Bangalore and other areas. So right now, the only planning is going on. So as of now, no actionable work has been done.

Okay. And sir, post our 1 million ton expansion, how are we looking at the revenue or the volume guidance for FY '25 and what will be the EBITDA per ton? I recall you also invest -- doing CapEx in the energy thing.

Sure. So our, luckily, EBITDA for this year has grown from INR 60 last year to INR 250 for 9-month period and INR 460 per ton of cement EBITDA only for Q3. So this year is going to be in the same range, like what we see, INR 400 to INR 500 range because unless there is an increase in fuel price, we are expecting to keep this EBITDA range. But once the expansion happens, we're expecting around INR 800 to INR 1,000 EBITDA just like other cement plants. So taking that into account, assuming that first half year goes with the old EBITDA and the next half year goes with the new EBITDA, on average, we are expecting an EBITDA of around INR 600 to INR 650 per ton. With that, at around 50% or 55% capacity utilization of the full capacity, we are talking of EBITDA around INR 65 crores to INR 70 crores to INR 75 crores and EBITDA per ton to be in the range of INR 650 per metric ton. But the next year, when we have the entire new capacity with the new fuel consumption pattern, we are expecting the EBITDA to reach around INR 900 to INR 1000 or maybe even better because the current prices have -- fuel prices have come down. So at least INR 1,000 is what we are safely targeting, assuming the same prices will continue.

Okay. Sir, sorry, if I didn't understood it earlier like I want to know on the sales front. So the major reason for the volume -- for the revenue -- flat revenue was because of volumes, right?

Yes.

Our next question is from the line of Urmi from Robo Capital.

Am I audible?

Yes, ma'am.

Yes, Urmi.

I just wanted to ask what are the utilization levels you are looking for FY '26?

So based on projections standard, we have taken around 65% in FY '26 and around 70% FY '27 onwards. So FY '25, we are targeting around 50% to 55% on the whole capacity. So around 500,000 to 550,000 tons sales is what we are targeting next financial year.

Okay. I just wanted to clear that in the previous calls, you said that you would be able to sell the full capacity of 1 million tons. Is that achievable by FY '26?

No, there must be some misunderstanding because our projections, we have put it at 50% to 55% next financial year and 65% is the following financial year and around 70% after that. So our cement plant India operate at around, on average, about 75%, 80% capacity all over India. So for projection's sake, we are targeting about 75% to 80%, 2, 3 years down the line. [ So the money is always going to be tied ] and the CapEx designed based on almost 330 days working [ 24/7 ].

Our next question is from the line of [ Manan ], an individual investor.

And congratulations on the good set of numbers, sir. I just wanted to understand that once our expansion is done, right, so will we have to market for our products or like that 1 million ton of capacity, which we will be generating will -- like, I mean, is there enough of the demand in the market so that the supply will be done easily?

Absolutely, [ Manan ]. So in the areas that we are located in, there's in the vicinity of just about 250 kilometers, I think, almost 10 million to 15 million tons of cement is being sold per month. So I think so -- the capacity of 1 million ton is still miniscule in cement standards. For a small plant like ours, it should not be a major challenge at all. If we had about maybe 2 million or 5 million tons capacity, there is a certain need to worry because cement is one product where you cannot sell it very far off from the manufacturing location because of low value to weight kind of product. But yes, to answer your question, management is very confident that we will be able to deploy 80% or 90% of our capacity without very, very significant efforts. Of course, we have to increase our market base. We have to increase our geographical area. But that is all it takes. Otherwise, cement consumption is poised to grow in the country. By 2028, almost 800 tons is expected to be the rated capacity with current about 450 million to 500 million tons. So 300 million tons is expected to be added in the next 4 to 5 years and 1 million tons should not be a significant capacity for us to sell.

Okay. And second question would be that now, as you just said, we are doing on the ex plant model basis, right? So are we going to continue this with the ex plant model? Or we might shift to delivery model again?

It typically depends on the market sentiment. So if there is -- if it is typically a biased market, then, again, we have to provide this extra services of delivery. But it is -- I mean, even if we do the delivery, we record most of the cost in the pricing. Of course, not all the costs. So management is trying to push as much as possible where ex plant is possible. So it all -- to answer your question, that is the direction the management wants to go, but eventually it depends on how the consumer wants it to be delivered. Overall, our net realization will continue to improve, what we know as naked cement value.

Okay. And can you please give the production and sales volume for this quarter, third quarter?

So sales volume is 68,600 tons compared to 65,000 tons in FY '23, Q3. And the -- you want only the cement sales?

Yes, yes, the cement sales volume.

Cement sales, okay, let me just pull up that figure. Out of -- almost 80% has come from cement sales, so let's say, approximately [ 34 into 0.79 ], so around INR 27 crores has come from cement sale and balance coming from solar and some other minor other income.

Okay. Understood. And as we have -- I mean, in the previous con call, the company guided for around INR 300-something-odd crores for FY '27. So is that achievable? Are we still on that same track?

Absolutely achievable. For FY '27 yes, definitely achievable.

Our next question is from the line of Prathamesh Dhiwar from Tiger asset.

Sir, just a follow-up. I think you told about INR 600 of EBITDA per ton. So is it for the FY '25?

Yes.

Okay. And the INR 900 will be after expansion, for FY '26? Okay.

INR 650, I average it basically. So currently, it is about, say, for the first half year, it is going to be around INR 400, INR 450. And the next half year, it is going to be around INR 900, INR 950. Average is INR 650. And next financial year, which is FY '26, we are targeting INR 900 to INR 1,000 directly. Because by then, the entire plant would be new, the fuel and power efficiency would have been achieved.

Okay. And sir, the INR 300 crores guidance for FY '27 that you have given, will it be achievable from that 1 million capacity? Or will you be increasing more? Or any plans for that?

I think it is a conservative estimate that we have done. So let's say, at 1 million tons, even at 65% production in FY '27, we're talking about 65% also if we take the thing at around -- so it is still showing about INR 330 crores to INR 340 crores top line. So we have given you the most conservative estimates.

Thank you. Ladies and gentlemen, that was the last question for the day. I now hand the conference over to Ms. Vaishnavi Ambokar for closing comments.

[indiscernible] If you have any queries, you can write us at researchatkirinadvisors.com. Once again, thank you, everyone, for joining the conference call. Thank you.

Thank you. Bye-bye.

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