Styrenix Performance Materials Limited (506222) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q1 FY '21 Earnings Conference Call of INEOS Styrolution India Limited. We have with us today from the management of INEOS Styrolution India Limited Mr. Sanjiv Vasudeva, Managing Director; Mr. Sanjeev Madan, Director, Finance; Ms. Amita Mistry, Litigation and Secretarial Officer; and Mr. Abhijaat Sinha, Company Secretary and Head of Legal, India. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Sanjeev Madan. Thank you, and over to you, sir.

Good evening, dear shareholders, investors and analyst fraternity. We welcome you to this earnings call. Your company, INEOS Styrolution India Limited, has declared its results for the quarter ended June 30, 2020, on 13th August 2020. We will brief you about the major highlights of the performance. Regarding quarterly performance, revenue net of GST from operations in current quarter is INR 11,552 lakhs as compared to INR 44,348 lakhs in April to June '19. And INR 35,900 lakhs as in previous quarter. Loss before tax in current quarter stands at INR 3,071 lakhs as compared to profit of INR 1,433 lakhs in April to June '19 and profit of INR 89 lakhs in previous quarter. Regarding the quarterly segment performance, specialty, loss before interest, tax and other unallocable expenditure stands at INR 2,435 lakhs in current quarter as compared to profit of INR 1,333 lakhs in previous quarter. Polystyrene loss before interest tax and other unallocable expenditure is INR 418 lakhs in current quarter as compared to profit of INR 647 lakhs in previous quarter. The company's operation and financial results for the quarter ended June 30, 2020, have been adversely impacted by the outbreak of COVID-19 pandemic and the consequent lookdown announced by the government of India due to which the operations were suspended for part of the quarter. Sales volumes shrunk by 67% as compared to the quarter ended June 30, 2019, and 63% as compared to the quarter ended March 31, 2020. This has primarily resulted in loss before tax amounting to INR 3,070 lakhs in current quarter as compared to profit before tax amounting to INR 1,432 lakhs during the quarter ended June 30, 2019 and profit before tax amounting to INR 888 as compared to the quarter ended March 31, 2020. With a view to ensure minimal disruption with respect to operations, including production and distribution activity, the company has taken several business continuity measures, including working from home, following social distancing, [ loans ] and sanitization of plants, workplaces, et cetera. Since the gradual easing of the lockdown from May 2020 onwards and in line with the various directives of the government, the company's plants have commenced operation in a phased manner in line with the market demand. The COVID-19 prices has caused significant disturbance and slowdown of economic activity. The company has taken various cost-saving initiatives and liquidity measures during this quarter to support its operations. The company has assessed the impact of COVID-19 on its assets, including property, plant and equipment, receivables, inventories, et cetera, and it was concluded that there was no impact on their carrying value as at 30th June 2020. However, the estimate of the impact of COVID-19 may differ from the same ascertained up to the date of approval of these financial results by the Board of Directors based on how the COVID-19 situation evolves over the period of time. The company will continue to monitor changes for any material impact. So this is all about clarifications and detail about our financials for the Q1 2021. We can go forward for the queries for any clarification which are needed. Thank you.

[Operator Instructions] The first question is from the line of Yash Agarwal from JM Financial.

I had a few questions. Firstly, I wanted to know how is the current capacity utilization and demand scenario? That is the first question. Can we return back to normal as of, you can say, end July or the mid-August, the current scenario? The second question was that, currently, how are the spreads in the business? Basically, what is -- how are the raw materials and the finished product prices behaving? Initially, if you can answer these 2 questions, I'll ask a few more questions later.

This is Sanjiv Vasudeva. I'll take your question, yes. So on the first one, on the capacity and demand, we see a very good recovery. We see, in fact, a V-shaped recovery from the month of April. July, I would say we are nearly 90% back. Depending on the industry, automotive industry, 2-wheelers, in particular, is about 90% back to normal level. While the 4-wheeler, I would say, a bit lesser. Household segment is also doing pretty well, at least 75% to 80% back to normal level. And henceforth, our capacity utilization is also on similar levels here. So we see a very good recovery. And the month of July is shaping up very well -- has shaped up very well. As far as the raw material and finished good prices, globally, there was a decline in all raw material and finished good prices driven by oil, and we see a steady recovery over the last 3 months.

And have -- are we on an improving trajectory? Is that a right inference from your comments, the spread in the business?

Could you repeat your question?

No, no. What I'm trying to say is that the spread in the business is on an improving trajectory. Is that the right assumption from whatever...

Yes. That will be right assumption.

And so a few more general question about the industry I had. Firstly is, in the presentation, it's written that imports are also something which are [indiscernible]. So are imports really a big threat to us in the near term that -- for the sector and us as a company?

So if you look at the segments that we are in, right, and the specific products that we sell, I'll first talk about ABS. So ABS, 40% of India's demand is imported, yes, in the 35% to 40%, okay? So imports do make a lot of difference for ABS. Predominantly from Korea and from Middle East is where we get the imports. So how they deal with the pricing does have an effect on what happens in India. Similarly -- lesser so in polystyrene. Polystyrene imports are about 10% of the total demand in the country, so the effect is relatively lesser. But we do have very cheap imports coming in from Iran and some of the other countries which really bring our prices down. So they do have an effect on our products.

So are these imports are -- basically, have they been rising or they've been steady at this level? Basically, incrementally, are they seeing -- are these -- are imports seeing market share gains in the ABS market?

I would not say so. I would not say so.

And there is no protection, is it from the government for the domestic industry against these imports?

For polystyrene, we have the DGTR, the Directorate General of Trade Remedies, has given a recommendation. We have been working with them over the last 2 years for putting an antidumping on polystyrene, antidumping duty. The recommendation and the final report has gone to the Ministry of Finance, but the final implementation is still pending. So that's what is happened there on the polystyrene side. For ABS, no such antidumping is there yet. So that -- those are the measures that the government can do if we find very cheap imports coming in.

So are these imports coming in at very cheap prices? Or basically, are they hampering the current profitability of our business?

They do. Because 2%, 3% doesn't matter. If you are 10% below the market price, that really hampers our profitability.

Okay. Sure. And sir, just one last question from my side, which is more of a long-term outlook on the business. Incrementally, we've seen a lot of adverse action against Chinese products. And a lot of global electronic companies and even domestic electronic companies have sort of given the intent to start the production domestically. So would that, over a period of time, be of a big benefit to manufacturers like us of ABS?

Yes, yes, sure. Because we sell into household electronics and consumer electronics segment here. Automotive in India still is a very established industry, right? And in fact, India is a big exporter of 2-wheelers and all. And so we are pretty good -- very well set there. The household segment is where a lot of imports also coming in. And they're making and the initiative and the relations that we have with China lately, I believe it gives a good opportunity for companies to expand their capacity, and henceforth, that will help us in our sales.

So have any -- material inquiries, have they started on the ground? Or it's -- at the moment, it's just more of an exploration stage, these talks by these companies?

Most of the countries are now -- as of now, they are just recovering from the COVID, right? So they are just refilling their inventory and building up stocks for Diwali. I don't think the real effect of making India and all the initiatives and all is there yet. But we have all the hope and we believe that 6 months down the road, some of these initiatives will help as they add new capacity, yes.

Sure. And just final one thing. So the spread improvement would be reflected from the second half of this financial year in our business, right? Is that broadly, directionally, the correct way?

Yes. That would be directionally correct.

[Operator Instructions] The next question is from the line of [ Anush Jain ] from Globe Capital Market.

Sir, can you please give me the breakup of the revenue? I mean, like, how much is auto industry contributes and how much is the household to our revenue?

So we generally do not give exact breakup, but we hold a majority share in automotive. We have more than 50% share in the automotive industry. While in household, we have that [indiscernible] 50% share.

Okay, okay. Sir, like in the past months -- like in June and July, we have seen some very good demand from the auto side, like in 2-wheeler segment, whether it is pent-up demand or so we have to see in the next couple of months. So have we seen that improvement in the month of July also, same improvement that we have seen in the 2-wheeler industry? Did we see that improving in our business also in the month of July?

Yes. We have seen that improvement in the month of July and in August as well.

Okay. And sir, one more thing. I mean, like, the recovery of our business is directly related with the styrene prices, which is -- which are hovering somewhere around INR 70, INR 60 kind of level. So the recovery in our business is directly related with the increase in the price of styrene or not? Or am I taking it wrong?

No. You're taking it correctly because the raw material prices do affect the profitability. For example, polystyrene is nothing but 95% styrene, right? So you buy low and sell high, right? You'll make money. You buy high and sell low, you will lose money, right? So -- but it's very difficult for us to generally predict and gamble when to buy and when not to buy. So we have a very linear purchase, right, depending on our sales. So we don't speculate on prices going up and down in general. And we buy based on the demand, and we sell accordingly.

And sir, my next -- last question is for the Moxi plant, which we said in the month of November that -- December, it will be commenced. So it has been operationalized, right?

Yes. The Moxi plant has been operationalized, and the capacity is being utilized.

The capacity is being utilized. So is it safe to assume that we are working from some 80% kind of capacity utilization, is it?

Yes. It would be safe to assume that. We are in line with the market demand and the recovery that we are seeing in the market.

[Operator Instructions] The next question is from the line of Jigar Mistry from Buoyant Capital.

Yes. My question is on the ABS imports. So sir, you suggested almost 40% of India's demand is met via imports. Now assuming that the raw material prices would be similar for most of the [indiscernible]. Then what allows a lot of this Korean LG, for example, to come in and export this level? Is it just the economies of scale that they are much larger than the Indian players? Or it is there better converters? How do you see then -- for the course of the next few years, do you see this trend sort of reducing in absence of any sort of dumping measure?

So on the ABS imports, one of the key raw materials for ABS is styrene, right? And the second big raw material is acrylonitrile followed by rubber. Now a lot of these producers in Korea and even in the Middle East stay backward integrated, and that's where we have the advantage. For example, styrene, no one manufactures styrene in India. So we have to improve the styrene and pay duties. While the producers in Korea and in Middle East, right, they're backward integrated into styrene. And also, they have big economies of scale. Hence, they can produce material a bit cheaper. And generally, we're seeing their prices to be equal or lower than our prices, like I mentioned earlier, so which kind of drags your profitability down. So that's how the real effect of import services there on profitability.

And sir, would you say that given how many number of sort of products that exist and how just in time the inventory is managed, this number of 40% should see a downward bias over the next few years?

So currently the -- so currently no one adds capacity, right? In India, the imports will not go down. Because if demand is there, someone has to fill the demand, right? So the best thing for us is use our capacity and allocate it to the most profitable customers. So imports should only go down when you have enough capacity in India and capacity that are added only when it makes business sense for us to -- and we have the right kind of margins, longer term, to support return on investment. So that's something that we have been contemplating, but no decision has been made yet.

[Operator Instructions] The next question is from the line of Lakshmi Narayan from ICICI Mutual Fund.

Yes. The -- you import styrene, and because of which, prices may not be competitive, right? Now what is the way forward? Is this going to be the thing? Or is it at some point in time, there will be some internal procurement of styrene? Or can you just help me understand that bit?

So styrene is made in big petrochemical plants, right, which are pretty big plants. And like in India, the demand of styrene is about, I'll say, between 800,000 and 900,000 tons. So that will entail a very, very big plant, and someone has to make that investment in India. So I don't see any investment of styrene coming by any of the major petrochemical players in the foreseeable few years. Even if they make an announcement, it will be at least 3 years -- 3 to 5 years by the time the construction of the plant happens. So we have heard of [ Reliance ], but we'll have to see how some of these capacities really come out in the market or not. So till the time that happens, all styrene, not just for us, for our competitors and for other chemical industries that use styrene, have to be imported.

Got it. And there has been a mishap at LG. Is that making some changes or dislocation in the market for us?

I didn't catch your question completely. Is your question…

No. There is a…

a demand in the market, right?

Yes. Is there a competing -- direct competing product, which is made by LG. Now that is the capacity, I don't know, if it's going to come back or is this like on hold. What benefits or whatever we would actually get? And also for the market in general, who's substituting that capacity?

Yes. So leaving aside LG, we have 2 local players for polystyrene. That's us and Supreme, and we are seeing the benefit of LG not being there. We have seen some of their customers, traditional customers who have come to us, so we are in a good position from that perspective.

[indiscernible] who else other?

INEOS Styrolution, us.

Okay. So the [indiscernible] supreme and -- okay, okay. And where there any number on what is the total tonnage requirement of ABS and the polystyrene? And how -- what is actually has gone out of the system?

The typical demand for polystyrene would be -- I mean this was -- this been the last 6 months have been pretty bad, right? So in a decent year, it used to be like 250,000 tons demand. And this year probably the demand has gone down by 30%, right, at least. So virtually, the quarter has been write off. And LG has about 70,000 tons they were selling in the market to our understanding. So if that kind of capacity goes away, with 30% of the capacity going away so that's pretty substantial in terms of the market opportunity.

And what are the steps you take to ensure that your business is slightly more predictable? And I say, predictable, not only in terms of raw material, but also in terms of clients, right, which is -- could be derisking. It could be just managing the whole thing. Because if you look at over the last couple of years, we are negative in terms of our profit after tax.

So we have played -- we play in various segments, where automotive is a key segment for us, right? And historically, automotive has been a segment which has been value growth, not just for us, but for the country in general, okay? And we continue to bank on that segment. Unfortunately, last 2 years, that segment has not been doing pretty well, as you would know, automotive, down 15% to 20%. So that is surely has an effect on our profitability. Out of 1 of the 2 years, we suffered a lot of inventory losses when the crude oil prices and the styrene prices dropped dramatically. So those are more of inventory valuation, et cetera, than the [ true ] underlying business was still doing pretty all right. And these kind of unfortunate things happen because you cannot -- we have a long supply chain, but we cannot predict the market price. None of us could predict that the oil would go down into in a negative territory, right, 3 months back, but it happens. So those kind of factors could play a role which affect our business. But from a segment perspective, I think we are very well placed, and we continue to focus on our Triple Shift strategy. We have identified segments like household and automotive are very key for our growth from the long term.

Got it. And one last question from my side is that when you actually supply, to whom -- who is your immediate customer? Is it the guys who actually make the moldings and then supply to the automotive, just to get a sense of how the inventory is set?

Yes. That's correct. We supply to a lot of molders, right, who supply to the OEMs.

The next question is from the line of Parth Adhiya from B&K Securities.

The one thing that I believe that there's another ABS combining capacity that has been coming up in India. So that is one of the -- by one our competitors. So what would be the demand/supply dynamics post that? And what impact does it have in imports side as also our market share? So that is one thing I wanted to know.

Yes. What specific company you're talking about for ABS?

I'm talking about Supreme Petrochemical.

Yes. We have heard the same that they're coming out with the [indiscernible] with some ABS capacity, but we're not sure how far they are and what progress they have made. Also, we're not sure of what kind of capacity they are talking about, so we have to wait and see as and when it happens.

Okay. But for example, if they come up with something around 80,000-, 100,000-ton capacity, what would be the demand and supply scenario be like? Basically, firstly, what is the current demand in India? And what would be the demand/supply scenario be like if that kind of capacity comes up?

Like I said, 40% of the capacity -- the demand in India is imported, right? So that would help fill up that import capacity.

And what is the current demand of ABS in India in tonnage?

So last year, it was about 270,280 kts, ABS. This year, you would just make it down by 30%, I would say.

Okay. And that is because of first quarter impact. On normal cases, it would be -- and at what rate in the normal year would it be growing, ABS demand in India?

About 8% to 10%.

8% to 10%, okay.

[Operator Instructions] The next question is from the line of Yash Agarwal from JM Financial.

Yes. So just a few more questions. Basically, I want to understand, are we doing anything to -- basically to have some antidumping duty on ABS, especially with the new -- allegedly, the new supply from Supreme up? So is there any works in the industry that know some application to the government to impose antidumping duties?

So there are some primary considerations going on. And as and when it happens, we'll make it public.

And sir, is there is like basically -- at the moment, the supply of ABS in India can make the demand of 60,000 to 70,000 is it? So that is the reason why we are importing. Is that correct?

Correct. The capacity in India between us and the local competitor is lesser than the total demand of polystyrene.

So what will be the total capacity in India at the moment, sir?

So the total capacity, about 150 to 180 kt.

Okay. And lastly, sir, on the spreads again. So are the spreads, at the moment, back to levels that we saw last year or they yet below that or they are better than that?

They are at least back to the similar of last year.

The next question is from the line of [ Krunal Shah ], an individual investor.

Sir, my question is regarding the business Petroleum [indiscernible] business, which our parent company has acquired. Do you think we can expect some products from this [indiscernible] to go through [indiscernible] service in India in the future?

No. We will not be dealing with those products in INEOS Styrolution.

[Operator Instructions] The next question is from the line of Lakshmi Narayan from ICICI Mutual Fund.

So did I hear it right that the total requirement of ABS in India is around 270 kton, which around 180 kton approximately is already in India. Is that correct? 270 and 180?

That's correct.

Okay. Now the same number for polystyrene, you mentioned the total demand in India is 250 kton?

That was the demand last year, correct.

Okay. And is there [Audio Gap] in polystyrene in India?

Sorry, is there what? I could not…

Is there an import of polystyrene because, the ABS, you mentioned that 40% is imported. Polystyrene, what percentage is imported?

About 10%, about 25 kt.

Okay, okay. And your -- you talked about 2 things, which is in your revenues, right? So around 74% is ABS and 26% is actually polystyrene, right? Now in ABS, what kind of client concentration you would have?

We sell to the automotive market, household electronics, and we also sell to distributors. So we have clients across various segments.

Okay. Is there anything like one client is more than 5% of your revenue or 10% of the revenue? How does this work?

We do have some big accounts. But generally, we don't disclose the name of our customers.

I'm just trying to get a sense of -- in ABS, let's say, the top 10 clients would be what percentage of your...

We do not disclose that. But we do have, as any business would have, good, healthy top, right, 10 customers, and -- but we do have a good spread of customers as well to balance it out.

Got it. And you also mentioned that the spread creates a problem when you actually sell because there is always a volatility. Now from a business metric point of view, what is one thing which you actually track? Is it the gross margin or the operating margin per kilogram? Is that how you look at it? Or what is your business metric of the valuation of profitability, as a CEO, you would look at?

We look at both. We look at -- of course, being a listed company, we look at our refinery profitability, but we also look at our underlying business, right, in terms of -- without the inventory and the CoSi effect. So we look at both. We look at the margins. And so we have various metrics, right? Number one metric as a company for us is safety, then, of course, we are looking at top line revenue and profitability, which is -- could drive both for margins and from the volumes. So -- but generally speaking, gross margin is the key metric.

Okay. As in gross margin realization per kilogram -- I mean, per grammage, right? That's the right way to do because...

That's correct.

And is it accepted that the price fluctuations is actually carried to the customer and consumer because there is a lead time to procure material and the time in which you actually -- the customer place an order with you. And there is a fluctuation, and there is, as you said, it is suboptimal for you import. So how do you manage -- bring that predictability of your -- of this particular metric you're trying to target, which is gross margin per kilogram?

Okay. So we do have formula pricing, which is fixed with the key OEMs, okay, wherein the margins are kind of based on the raw material, okay, wherein conversion cost element that is given. So that kind of helps and we have a good blend of good customers with fixed contract with the formula pricing and the spot kind of price, which we may do. So based on that mix of customers, we manage our profitability.

Now is it better for you, I mean, because of -- you're looking at multiple cycles, what serves you better? Do you like to have a spot pricing? Or do you want to be like a complete pass-through that you are just processing if you want?

We need a good blend of both. We need both because many times you can't predict their times, and you are better off just selling it in the open market, right? And at times, when you have -- when you are better off selling to OEMs. So you need both.

And is that mix of -- question is, what is the mix of OEM and the spot market selling in general? And does that also fluctuate?

We don't disclose those numbers, but we have a good balance.

So that keeps fluctuating because you take a call on whether to sell in the spot or sell in the OEM market. Do you actually do it quite balanced?

We balance it out, yes, generally.

The next question is from the line of [ Romit Ramesh ], an individual investor.

I just actually wanted to know where you see growth coming from? Do you see the steady-state growth coming from auto? Or do you see growth coming from your other industries?

So we have -- we see growth across all industries. Short term, we are seeing a good rebound in all industries. Long term, I would say auto will grow in India, for sure, right, maybe 2-wheelers a bit more than 4-wheelers because people prefer -- because of COVID, people prefer not to take much transportation and prefer individual mode of transportation. But -- and overall, more importantly, leaving aside the segments like auto or household or toys and other ones which may get affected because of what happened with China and the imports, the per-capita consumption of plastics in India is much lower than some of the other countries, right? It's about 10 to 12 s versus 40 kgs in China and versus 80 to 100 kgs in the U.S., right? So we'll see plastics replacing some of the other materials and the use of plastic improving overall in the country and which will drive the ABS demand across all segments, right? Some segment, there were years where automotive grew at 25%, right? And they will be -- the household electronics will grow by 20%, 30%, and they're driven by the rural demand. There will be years where some restrictions that they have for imports for some specific type of electronics or toys or goods and all which will spur the demand of some other segments. So -- but in general, we see a good growth. We can assume 8% to 10% kind of growth for the polystyrene industry.

Got it. And the one more question is, so the total capacity in India is around 200,000 to -- 200,000, 250,000 tons is the total demand in India. The capacity is around 180,000 tons, correct?

That's what we are aware of based on what public data which you are seeing of our competitors and what we have published.

And you don't think there's going to be any more capacity expansion going forward to bridge this demand supply, especially from you or your competitors?

Like a gentleman said, Supreme is looking at adding ABS capacity, but we'll have to wait and see how that shapes up.

So if there's any capacity created, also this won't depress prices, right, because there is a substantial gap between demand and import, right?

That's correct.

[Operator Instructions] The next question is a follow-up from the line of Lakshmi Narayan from ICICI Mutual Fund.

Yes. I see that you're actually having CapEx quite regularly, right? So for example, last year, there was a CapEx and even the previous year. So if you can just help me understand what you do. And I mean what is the valuation you would actually bring by this capacity expansion? And what is the way forward for the next 5 to 10 years on this?

Okay. So on the CapEx side, most of the CapEx last year was spent on the Moxi project. I'm not sure which year you -- are you referring to. Because over the last 2 years, we've been working predominantly on the Moxi project. And in addition to that, we generally have -- we have pretty high safety standards, unlike some of the competitors. And we do need an amount of CapEx to keep our plants safe and upgrading our plants, so some CapEx is needed to run our plants and for the general maintenance and all. So yes, so depending on the year, so…

So for example, last year, I mean, specific close to around INR 86 crores of CapEx. And the previous year, we had almost INR 100 crores of CapEx, right?

Yes, yes. That's predominantly, like I said, in the last 2 years, we've been working with Moxi, which started in December 2019, increment of 35,000 tons capacity.

Okay. Now what is the way forward? Like, I mean, this capacity, what's the annual capital expenditure you would incur going forward? Of course, there was this maintenance CapEx and the upgradation Capex, which are very essential. How much that would be? And what are the -- in the future, where do you want to add capacity?

We do not disclose all our CapEx numbers beforehand. But generally, we use some CapEx for regular maintenance and upgrading of our facilities. The big CapEx comes only when we have incremental capacity addition, which happened 2 years -- in the last 2 years when we added the capacity in Moxi.

So I'm just saying, in general, what is the maintenance and upgrade CapEx? Broadly, what range it is for us to get a sense of it?

We do not disclose exact numbers on that.

Got it. What is the value addition you actually do, which is going to be much better than what you did earlier? Because your raw material you procure from other places, right? So how are you going to improve your -- the value addition component in India? Any thoughts on that?

So we have a multiple range of products. And being a local supplier, you do have an advantage of you can serve the customers, right? So service is a big value and which we can charge the customer. Inside that, we have flexibility of making multiple products create colors combination, right? While imports can in force. Typically, you would import in bulk. It could be very standard they create color. So would do both these things help us with getting better prices in the market than a typical imported full commodity kind of material. So leaving aside that, we have R&D center in our facility, and they continue to come up and being close to the customers with a big sales force here. You keep working with the customers on their needs and different product weeks for the future and which helps us in listening to the customer and work with your R&D and come up with the next-generation products to fit them.

Got it. So this new capacity, which has come up in December 2019, right? What part it is actually addressing now which was not addressed earlier?

So this was the capacity which was needed for us to grow, yes. And so the compounding capacity for us and which can help serve the customer from a volume perspective, service perspective.

Got it. Got it. So essentially, compacting is what we would actually focus on, right? So you would actually scale up the compacting facility over a period of time.

Yes, the compounding, correct.

And this -- the capacity, which you said is around 35k, how much you can actually stretch the capacity there? Is it even actually go like 2x there? Or if you want to actually do it -- or is it in such a way that you should actually have multiple capacities across India? How does it work?

Well, you keep adding capacity based on what you need. So we went from 65 to 100 kt, and we will go higher depending on what margins we get in the market.

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

Hi. Thanks to all the participants for joining the call and showing your interest in our company's business. We value your participation, and we'll be glad to hear you at our next earnings call. Thanks, and have a nice day.

Thank you, ladies and gentlemen. On behalf of INEOS Styrolution India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.