SRF Limited (503806) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the SRF Limited Q3 FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Ankur Periwal from Axis Capital. Thank you, and over to you, sir.

Yes. Thanks, Steve, and good afternoon, everyone, for joining in SRF's Q3 and 9 Months FY '26 Post Results Earnings Call. The management team will be represented by Mr. Ashish Bharat Ram, Chairman and Managing Director. The call will start with a brief management discussion on the earnings performance, followed by an interactive Q&A session. I'll hand over the floor to Nitika for her initial comments, post which we can start the call and the Q&A. Over to you, Nikita. Thank you.

Good evening, everyone, and welcome to SRF Limited's Quarter 3 and 9 Months Financial Year 2026 Results Conference Call. Joining us today is our Chairman and Managing Director, Mr. Ashish Bharat Ram. He will begin by sharing key highlights from our performance, covering developments across our businesses and financial performance. Following his remarks, we will open the floor for a question-and-answer session with him. Please note that any forward-looking statements made during the call are subject to the disclaimer included in the earnings presentation shared earlier. With that, I invite our CMD, Mr. Ashish Bharat Ram, to deliver his opening remarks. Thank you.

Thank you, Nitika. Good evening, everyone, and thank you for joining us today. I trust all of you have had the opportunity to go through our results and the presentation shared with you earlier. As we review our performance for quarter 3 financial year '26, I want to begin by acknowledging the resilience and agility our teams have demonstrated in navigating a dynamic and challenging environment. While the quarter presented its share of headwinds, we remain steadfast in our strategy and confident -- and remain confident about the opportunities ahead. I'm pleased to share that during quarter 3 financial year '26, SRF delivered healthy performance across its key business segments, along with a much improved bottom line. Despite ongoing global uncertainties, our focus on operational excellence, disciplined cost management and innovation helped us maintain steady momentum. Our gross operating revenue grew 6% to INR 3,713 crores and EBIT was up by 23% year-on-year from INR 529 crores to INR 653 crores over the current period last year, reflecting a margin of 18%. PAT expanded by 60% year-on-year to INR 433 crores. Coming to the Chemicals Business. Our Chemicals Business reported a revenue growth of 22%, increasing from INR 1,496 crores in quarter 3 financial year '25 to INR 1,825 crores in quarter 3 financial year '26. This performance was driven by higher refrigerant volumes realizations, while enhanced operational efficiencies across both the Fluorochemicals and Specialty Chemicals segments contributed to the overall performance. In our Specialty Chemicals business, we have significantly enhanced our product mix and achieved notable improvements in operational efficiencies and process innovations over the past year, demonstrating our commitment to long-term competitiveness and sustainability. However, these advancements have not fully reflected in this quarter's financial performance due to persistent pricing pressure from customers, driven largely by rational pricing from Chinese competitors across some of our core product categories. In this scenario, we have consciously chosen to protect our market share and volumes. From our discussions with stakeholders, it is evident that Chinese players are finding it difficult to sustain these price levels, and we believe that this situation is not viable in the long run. When this correction will happen, remains difficult to predict at this stage. We are also witnessing continued deferment in offtake for certain key products by agro majors. Encouragingly, agrochemicals used in crop protection are now showing signs of revival. This, along with a strong pipeline for the coming quarter, gives us the confidence to finish the year on a strong note. Our pipeline for new molecules on the agrochemical side remains extremely robust. In addition, our AI development journey is also progressing as planned, all of which should bode well for the future. Our inroads into the pharma segment are also showing positive traction, both in terms of the number of molecules we are dealing with as well as the number of customers we are developing. In light of this, we are adding a second pharma intermediate plant at an investment of INR 180 crores to come up at our Dahej site, which is expected to be commissioned in the next 8 months. We continue to collaborate with global innovators on complex molecules, reaffirming SRF's R&D leadership in delivering sophisticated solutions. To date, we have applied for a total of 506 patents, including 5 filed during the quarter with 153 patents granted. Additionally, our sourcing initiatives have delivered strong results with the approval of several new raw materials -- raw material suppliers. This further reinforces our supply chain resilience and enhances operational flexibility, supporting our long-term agility. Coming to our Fluorochemicals business, we have delivered a record quarter on all counts. The refrigerant gas segment performed exceptionally well despite this being a traditionally lean season, supported by firm global HFC prices, driven by China's quota-led supply restrictions and steady international demand. The domestic market is also recovering well after a weak first half impacted by prolonged monsoons. Our plants are operating optimally. And with the domestic season about to begin, we are well positioned to meet the expected uptick in demand. This should also help us to maximize our production quota under the Kigali framework. The Government of India's recent imposition of anti-dumping duty on R-134a currently does not impact us as global prices remain above the minimum threshold. Overseas markets, particularly Southeast Asia and the Middle East continue to show healthy growth, helping offset some of the volatility in the U.S. market caused by tariff uncertainty. As the tariff situation evolves, we will be better placed to assess its impact, given the historical importance of the U.S. as a key export destination. Chloromethanes delivered a steady performance through the quarter. In PTFE, we are ramping up capacity and sharpening our focus on value-added products rather than commodity offerings, an ongoing shift that is progressing well with benefits expected to become visible by early next year. Our upcoming projects for new fluoropolymers remain on track. The next-generation refrigerant gases project is also progressing well and will be housed at our new site in Odisha. We have applied for the necessary regulatory clearances for the site, which we hope to receive in the near future. We will share more on this during the annual conference call. The Performance Films and Foil business reported revenue of INR 1,342 crores in quarter 3 financial year '26, a decline of 3% year-on-year but delivering higher EBIT of INR 95 crores when compared to quarter 3 financial year '25 of INR 90 crores, owing to lower volumes of BOPET and BOPP in the domestic market. The impact of GST 2.0 continued into this quarter as FMCG content companies were required to repack and reprint their products. However, from December onwards, we have started seeing signs of recovery in the domestic market for both BOPP and BOPET. In recent weeks, we have also seen some price improvement in BOPET from China, which should bode well for us in the coming months. Our international operations remained stable during the quarter, though seasonal weakness in December reflected in the quarter's numbers. Performance in Thailand and Hungary continued to be affected by sustained competitive pressure from cheaper imports, while South Africa delivered consistently strong results. In aluminum foil, we delivered improved performance during the quarter, driven by higher volumes, while continuing to strengthen our export focus to build a more sustainable, globally balanced business model that is less vulnerable to domestic market volatility. Our continued emphasis on scaling value-added products and advancing sustainable structures, including BiLam, PCR and mono-family film has enhanced our product differentiation and helped to mitigate some of the market pressures. Coming to the status of our new projects, the BOPP capacitor grade and the BOPP-BOPE line are progressing well. Together, these initiatives will bolster overall business performance in the coming quarters and further strengthen SRF's position as a comprehensive one-stop packaging solutions provider. Our Technical Textiles business reported revenue of INR 454 crores in quarter 3 financial year '26, amid a challenging market environment. Belting Fabrics came under pressure due to aggressive Chinese pricing and a decline in demand following reduced conveyor belt exports to the U.S. These factors have weighed on margins despite operational progress. On a positive note, we achieved a significant milestone with the EcoVadis Silver Certification for Sustainability, reaffirming our commitment to responsible and sustainable business practices. In our Other businesses, our Coated Fabrics business, the domestic demand was soft this quarter, especially for Jal Jeevan mission liners, and volumes were impacted by cheaper Chinese imports. We expect demand to remain subdued in the off-season, and we'll focus on tensile and semi-tensile; value-added products to protect margins. In Laminated Fabrics, the withdrawal of minimum import pricing on textile imports has intensified pricing pressure. While we continue to strengthen capabilities, margins are likely to stay under strain. On the finance side, the Board in its meeting today approved a second interim dividend of INR 5 per share, entailing a cash outflow of INR 148.21 crores, this follows the first interim dividend of INR 4 per share declared on July 23, '25. On the financial front, we are seeing benefits from global interest rate reductions. However, our forward positions on rupee-dollar hedges have had a negative impact due to the unprecedented rupee depreciation, something we could not anticipate. While we expect the negative impact from forward covers to stay for a few more quarters, in general, a weak rupee will be extremely favorable for us. During the quarter, we have also recognized an amount of INR 73 crores due to the changes in the definition of wages, post the notification of the new Labor Codes by the Government of India and disclosed the same under exceptional items in the financial results based on FAQs issued by the Ministry of Labor and Employment and guidance provided by the Institute of Chartered Accountants of India. Additionally, based on a favorable order received from [ ITAT ] during the quarter, an amount of INR 99 crores is also being recognized as credit to tax expense. CSR and other updates. In quarter 3 financial year '26, SRF advanced efforts with a strong focus on education and sustainability. Over 200 teachers were trained in digital literacy and STEM initiatives, engaged students through exhibitions and innovation fairs. Our digital bus reached 9 villages, benefiting more than 14,000 learners. Clean and green campus drives and Anganwadi programs promoted health and hygiene with infrastructure support under the PPP model strengthened 9 schools. These initiatives reflect our commitment to holistic community development and empowerment. In quarter 3 financial year '26, SRF received a prestigious recognition at Hurun India Family Business Excellence Award. Our Chairman Emeritus, Mr. Arun Bharat Ram, was honored with the Lifetime Achievement Award celebrating his visionary leadership. This accolade underscores SRF's legacy of excellence, innovation and responsible business practices. To conclude, while this quarter reflects the realities of a volatile global environment, our fundamentals remain strong. We have a robust pipeline, a clear strategy and a committed team driving execution. With our upcoming projects and diversified portfolio, we are confident of delivering sustainable growth and creating long-term value for all stakeholders. Thank you for your continued trust and support. And I would now like to ask the moderator to open the line for the Q&A session.

[Operator Instructions] The first question comes from the line of Arjun Khanna with Kotak Mutual Funds.

Sir, the first question is on our CapEx outlook. So in light of what's happening globally in terms of dislocation or trade tariffs, et cetera, how do we envisage our CapEx outlook going forward? In the second quarter, we had given guidance of maybe INR 2,200 crores, INR 2,300 crores of CapEx. And if you could give us some sense of how do we see this pan out for FY '27 too?

Yes. Arjun, I think broadly speaking, we seem to be on track for that. A majority of what we are going to be doing is now going to be coming in the new site in Odisha. So I believe that irrespective of whatever volatility we may be seeing on the global front, the transition to the new generation gases is something that is inevitable. And so we will be very much focusing on putting up the 2 plants for our new generation gases. And I think beyond -- besides that, we will obviously have to look at ancillary plants, which will come up with that. We have to take the Board approval for that. But I believe that when we actually get down to it, the first stage of investments in the Odisha site will probably be in the region of INR 1,500 crores to INR 2,000 crores. So in that sense, I think the CapEx for financial year '27 also looks -- remains on a strong wicket.

Sure. So we did see a slight slowdown in FY '25 where we spent roughly INR 1,200-odd crores. So given what's happening globally, you don't believe that to be a reason to attenuate our CapEx going forward?

I mean I think you have to look at it from the perspective that based on the Kigali Amendment if the production and consumption of HFCs is going to come down, which we are seeing happening already. The world will need more of the new generation gases. So irrespective of whatever may happen, the demand for the new generation gases has to be met by somebody. So I think those who are going to be able to develop the technology and put up plants which are CapEx efficient and OpEx efficient are going to have the opportunity to really benefit. And I think that's the play that SRF has going forward.

Sure. Sir, the second question is on -- so in the presentation, we have talked of in Specialty Chemicals, Chinese pricing competition to continue for the near future. At the same time, we have talked of fourth quarter being substantially better for Specialty Chemicals. If you could help us understand, they seem to be slightly dichotomous.

So I think -- I mean, I think we have to just look at it from the perspective that the fourth quarter is based on a lot of deferment that has happened over the quarter 2, quarter 3. So there is a lot of let's say, pent-up POs that have to be delivered in quarter 4. But the second part, which is about whether we are really seeing a big pickup is really where I'm saying that we are not 100% sure. We are still seeing that the Chinese pricing remains a bit of a challenge. But I think like I said in my remarks, if we can -- I personally believe that if we can generate the returns that we are generating in such a subdued market, I'm very optimistic for what lies ahead because I mean, based on whatever we've seen and heard from competitors in China, majority of them struggling at these levels. So I mean, this seems to be the sort of the Chinese way where you come in and bombard the market with volume and low pricing. But at some stage, people also need returns. And I think that's something that will change the environment in China going forward. I mean, as I said again in my opening remarks, the question is not if, but the question is when that will happen.

Sure. We've seen that in ref gas, so let's hope it happens in other segments. Sir, at the same time, just a continuation, you've talked of early signs of Chinese increase across petrochemicals for the Performance Films segment. So in terms of BOPP, BOPET, are we seeing expansion in margins?

So I think the Chinese part was linked more to the BOPET, Arjun. Clearly, in BOPET, we have seen that there seemed to be some sort of instruction that was sort of given to the industry from, let's say, authorities in China that they need to look at becoming more profitable rather than just producing. So the mandate that was given was to cut back on capacity by 20% and that happened in December. And as a result, we've already seen some increase in pricing. The mandate also says that post the Lunar New Year, the Lunar holidays, they are supposed to cut back further on the capacity. Let's wait and see what happens in that. If that actually happens, then I guess we will see further expansion in the margins.

Sir, this is part of that anti-involution drive?

Correct. Correct.

The next question comes from the line of Jason Soans with IDBI Capital.

Sir, my first question just pertains to -- I mean, you did say that you're expecting a good pickup on ag chem side in Q4. Just wanted to know what gives us the confidence for this? And are we seeing some enhanced order visibility for our key products here?

Yes. I think it's -- I mean, like I said, I mean, when you have a subdued Q2, Q3, a lot of it is just pent-up POs that customers wanted delivery from -- in this year. I mean, I think everybody is going through this phase but nobody wants extra inventory on December 31. So, I guess, it's a lot of this thing. We saw the same trend last year also if you look at our numbers. And it's the same thing where we've already bought POs, which we have to basically act upon in quarter 4.

Sure, sure. And just sir, just in relation to that, I mean, of course, inventory in the channel must be at reasonable levels. So any particular reason for the deferment of this key ag chem products, which you have mentioned?

Yes. I think -- I mean, it's very difficult to quite comment on this. I think my hypothesis, if you ask me, is just that supply chain challenges eased out tremendously after COVID. So -- when we saw the boom in the COVID years, I mean, there were massive supply chain challenges. And it would take people months to get their inventory and so on. And I think in today's context, they know that if suppliers have to get around to doing it, it should not take very long to do it. So I think it's just a comfort of knowing that material will be available.

Sure. Sure, sir. And just finally, sir, just wanted to understand, I mean, you've penciled in a CapEx of INR 180 crores for the pharma -- for the second pharma plant. Just if you could give us some more color, sir, on -- because ag chems have been -- is our main stay in the chemicals, the Specialty Chemicals part of it. So just wanted to -- more color on this, like what opportunities are we exactly seeing on the ground for this? And how much can we scale it up?

Yes. So Jason, if you -- I mean, we have always mentioned or always maintained that we will continue to grow agro, but we also want to derisk from agro. And I think a great example of why we want to do that is precisely because of what we are seeing happening -- we've seen happened over the last 2 years that agro cycles can be quite vicious in their own way. So it's not that by any means we are saying that we are not going to grow agro, we want to keep growing in agro, but we also want to derisk. And I think that's really why the pharma story was something that we are building on. And I think you guys are more experienced interacting with pharma companies across the nation that pharma is a much tougher nut to crack. And I think it's just taken us a long time to crack. But today, we are starting to see a lot of visibility in terms of the molecules we have. So I think the number of molecules we are working on has gone up dramatically. The number of customers with whom we are dealing have also gone up. And I think there is a fundamental confidence that what we have today is capacity in our pharma intermediate plant, number one, is not ample for us to take care of what lies ahead. And again, as an entrepreneur, as a businessman, you need to take calls in advance rather than wait to be reactive. I think you have to be proactive if you fundamentally believe that there is an opportunity that lies ahead. And I think that's something that we are starting to see.

The next question comes from the line of Vivek Rajamani with Morgan Stanley.

Just sir, with respect to your opening remarks when you mentioned about the tariffs, could you just give us a sense of what is the impact that you've seen for this quarter, whether by way of volumes or whether you've had to change some geographic locations? And just in terms of customer conversations, are you seeing any sort of impact from this?

Yes. So I think it's a bit of a mixed bag. I mean everybody is -- instead of committing to larger volumes of what they want to pick up, everybody is literally picking up volumes from a month-to-month perspective. So I think in the past, when we used to do a lot of our ref gas trades, we would look at doing an annual contract. So first of all, we've got to be clear that our R-134a does not fall under the tariffs. So in R-134a we have been able to do long-term contracts, and we've been -- that's a relationship that has not got affected with the tariffs. But R32 is -- does fall under the tariffs. And so instead of doing long-term contracts with some of the customers we had, everybody is sort of doing a wait and watch, and it's more transactional than relationship oriented. And I think when you're sort of looking at a big animal like the U.S., you always want to be clear of what's the sort of volume you need to keep aside for the U.S. and then play with the other markets. And here, we are having to play with the other markets and then see what comes out from the U.S. And within the U.S., also, everybody is talking about the fact that even if you ship something today, we have no idea what the tariffs will be by the time they get to us. So I think all that uncertainty just makes people more sort of averse. So people are -- I'm not saying they're not buying. They are buying but buying with a lot of, let's say, trepidation and buying literally what they need to without really sort of, I would say, running the business the way they want to. In our Packaging business, yes, we've had to play around in a sense that we have moved some of the U.S. business to our plant from Thailand. So we are doing some of that from Thailand. But that's not an ideal situation because we were always more comfortable servicing from here. Freight rates from Thailand to the U.S. are substantially higher than the freight rates from India. So we do lose on some of these other costs that we would not have lost earlier on.

Sure, sir, that was very, very helpful. I just wanted to follow up, any comments on the ag chem part of the business?

To be honest with you, I think I've already said whatever I had to on the ag chem, there's really not much I can add. I mean, like I said, we have to wait and watch. Our internal strategy is to keep our pipeline as robust as we can. It is more robust today than it was earlier. We have a lot of AIs in the pipeline. We have to wait for them to be registered with the customers. So I think it's just a question of being patient because I mean, I genuinely believe the cycle has to turn. It cannot remain the way it is. And until then, we will keep working on our cost efficiencies and making sure that we don't lose market share to any of the -- to our competitors.

Very clear. Just one small bookkeeping question for me. If you could just have the domestic and the export mix for your ref gas business, that would be really helpful.

Yes, I think maybe you can connect to the IR team separately. And I think we'll get them to share that with you.

The next question comes from the line of Abhijit Akella with Kotak Securities.

So first of all, on the Specialty Chemicals business, would it be possible to just share the revenue growth that we've seen in the first 9 months of the year?

I think our policy is that we don't differentiate between fluorochemicals and specialties, Abhijit. So that's not something that we can share.

Probably, Abhijit, maybe we'll be able to talk about more on this in the annual conference call where we just talk about between SCB and FCB separately.

Okay, sure. The other thing was just on the Chemical segment margins. There seems to be some quarter-on-quarter moderation sequentially, about 170, 180 basis points sequentially. So just what might be the reason for that? Is it primarily coming from specialty chems or something else? Could it be a tariff...

No, no, I think it's coming definitely from Specialty Chem. I said that the Specialty Chem business has had a more challenging time. So it has come from that. But I think I'm sure that you'll see -- we'll see a better performance in quarter 4.

Okay. As far as R32 is concerned in terms of sharing the tariff impact with customers and any sort of broad outline of how discussions are shaping up?

Yes. So I think, like I said, it goes literally, I mean, consignment to consignment. So depending on how it's happening, we normally work with the price range, saying that if for any reason the 25% gets canceled, the price will be X. If the 25% additional tariff remains, it will be Y. And then if there is a moderation in the base 25%, which we have on India, then we will talk about the pricing. But there is obviously a trust factor that is also involved when we actually do the final -- when we do the final pricing, but obviously, nothing has changed in the last 6 months.

Got it. No, that's really helpful. And just one last thing. R32 our capacity, I believe, is somewhere in the range of 27,000, 28,000 tonnes at present. Are there any thoughts that we could divert some of our capacity from the other HFCs, be it 134a or 125 towards R32 sometime in the future?

So all I can say at this stage is, I would rather not talk about what our capacity is or not. I think that's something that we believe is something that will be an important -- it's part of our important strategy to create a baseline. So what our capabilities are and not, I would rather keep quiet about it at this stage.

The next question comes from the line of Surya Narayan Patra with PhillipCapital.

My first question is on the EU carbon tax, what you have indicated in the presentation. So in what way that we are likely to have impact, whether the ref gas business or even the specialty chemical exports will see some kind of impact because of this? Which got implemented from the 1st January by Europeans, I think.

Mr. Surya, could you please repeat your question and can you use your handset please?

I am audible, right? I was asking about the EU carbon tax, which has got implemented from the 1st January. And I think we have mentioned that also in our presentation. So whether it is the ref gas business that we are talking about having seen some kind of impact because of this or even the specialty chemical export also likely to have some impact?

Yes. So I mean we don't do any ref gas business in Europe at the moment. So there's no impact on the ref gas business at all. There is a potential impact on aluminum foil business, but very honestly speaking, I think with where the cost of manufacturing in Europe is, we don't see that to be a risk. I think we just flagged it because it is something that has got notified. Having said that, I think I believe that there is some talk that under the India-EU FTA, there is going to be talk about the CBAM as well. So I think we just need to wait and watch. It's nothing that is of any significant nature at the moment.

Sure, sir. Second question was about the pharma intermediate business. See in fact, we have been seeing some challenge for the agri intermediate or agri supplies specialty chemicals. But pharma, it seems that, okay, it has been very steady and -- but if you can talk something about it, what is the progress on that side? What is the mix right now in terms of the -- within the specialty chemical business and our outlook and what are the kind of general CapEx that we are trying to build up for the pharma intermediate business going ahead given the view that you have provided just some time before?

So I think, I mean, at the moment, broadly speaking, the pharma business maybe in the region of maybe close to 10% of our total business. And we always said that we want this to go to at least 20% of our share. Again, with the perspective that we want to grow agro, but grow pharma at a faster pace. And like I mentioned in one of the earlier questions, I think we are starting to see the momentum on the pharma side, and that's really why we're going with this pharma intermediate plant #2 is because we feel that we now need the -- we need that plant based on the number of molecules, et cetera, we're working on. I'm not saying that we are going to get to 20% overnight, but I think we're clearly on the track to start moving in that direction.

Sure. Just last one point, sir, on the CapEx front, see, is there a need for expanding capacity within HFC before you create capacity for the new generation gas?

I don't think we are -- I mean if anybody is expanding HFC capacity right now, I mean, they have to have a reason to do it because I don't think that under Kigali Amendment we can.

Okay. Sure. Okay.

The next question comes from the line of Mahima Rathod with Tiger Assets.

Am I audible?

Are you speaking to the speaker phone or from the handset?

Yes. Am I audible, sir?

Yes, better.

Yes. Okay.

Okay. So sir, my question is, what is the current demand versus supply situation in the fluorochemicals market in terms of capacity?

I'am not -- in what context is the question, fluorochemicals is a very broad word.

Sir, R32.

R32, the domestic demand is -- I mean our analysis says probably in the region of probably 17,000, 18,000 tonnes is the domestic demand, not more than that. And capacity, I think each -- you can -- I mean, capacity is substantially more than that, and that's why I think everybody is exporting as well. But over time, as the Indian demand grows, obviously, the perspective would be that we would reduce our exports and start selling more in India.

Okay. Okay, sir. That's helpful. Sir, the next question is with new players in the fluoro space, how do we foresee the impact of R32 prices over the next 6 to 12 months? And what is the risk of price softening as competition increases?

See, again, the whole -- I mean, the question or the premise is that competition will increase, but the question to really ask is competition can only come in for '27. For '28 onwards, competition can only be based on the baseline of '24, '25, '26. So if you've not had production in '24, '25, '26, you're not going to have any baseline for '28 going forward. So if somebody sets up capacity, they may be able to sell whatever capacity they have in '27, but they're not going to get any quota from 1st Jan '28. So I mean, what will happen then, I don't know because it will obviously go to the quota, will go to the people who are producing at the moment. So -- and in the short term, I think we all have to remember that the big daddy in the room is really China. So as long as China keeps prices at the levels that it keeps at, then prices should remain stable, firm. And again, I mean, all that we've seen in terms of data is over the last 3 months, there have been absolutely negligible imports from China. The tendency in the past used to be that in the off-season, which is from October to December, China would obviously export a lot of material, which would then come into India pre the summer season. But this year, there have been no imports from China in the last 3 months, like I said, very, very negligible imports. So I think broadly speaking, the demand-supply situation in India should remain fairly firm in the short term as well.