Sutlej Textiles and Industries Limited (SUTLEJTEX) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Sutlej Textiles and Industries Limited Q2 FY '22 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Bipeen Valame, CFO and Whole Time Director. Thank you, and over to you, sir.

Thank you, and good afternoon, everyone. I welcome you all to the earnings conference call of Sutlej Textiles and Industries Limited for quarter and half year ended September 2021. And I hope that all of you and your family continue to remain safe. I have with me Mr. Updeep Singh Chatrath, President and CEO of Sutlej Textiles and Industries Limited; and Stellar IR advisers, our investment relationship team. The result presentation has been uploaded on the exchanges, and I hope everyone had an opportunity to look at it. I will take you through financial performance highlights, followed by industrial business insight by Shri. Updeep ji. After seeing a year full of challenges for over last 1 year COVID-19 pandemic, we saw a sharp recovery and revival in the Indian textile industry since last couple of quarters. The opening of economies which continued in quarter 2 FY '22 with increased demand in both domestic and export markets. We witnessed good traction in domestic as well as the export market with realization increasing in both markets. The Yarn business export during the quarter contributed 45% to the sales as compared to 34% in Q2 FY '21. The capacity utilization level stood at around 94%, which has reached pre-COVID levels. We have improvements in utilization levels, both on a year-on-year basis and sequentially on account of improving demand. During the quarter ended September 2021, the company reported consolidated total income of INR 798 crores against INR 473 crores in Q2 FY '21, witnessing a strong growth of 68% year-on-year and growth of 35% sequentially. For H1 FY '22, the consolidated total income stood at INR 1,388 crores against INR 671 crores in H1 FY '21, a growth of 107% year-on-year basis. The consolidated EBITDA during the quarter was INR 107 crores as against INR 25 crores in quarter 2 FY '21, a growth of 330% year-on-year and 41% sequentially compared to Q1 FY '22. The EBITDA margin stood at 13.4% in Q2 FY '22 compared to 4% year-on-year and 12.9% sequentially. EBITDA for H1 FY '22 stood at INR 183 crores as against INR 2 crores in H1 FY '21. Reported consolidated PAT of INR 42 crores as against minus INR 5 crores in Q2 FY '21 and INR 20 crores in Q1 FY '22. During H1 FY '22, PAT stood at INR 62 crores against loss of INR 43 in H1 FY '21. I would also like to highlight, then on the balance sheet side, we have been able to consistently trying to reduce the overall debt. The total debt was INR 841 crores, which is significantly at lower level. Moreover, our gearing, which has been contained below 1 since past few years have further reduced to 0.83x, which is also a historical low level. Lastly, we would like to highlight that presently around 45% of the working capital limits remain unutilized. Therefore, providing the company with adequate liquidity, audits obligation as demand revises. That is all from my side. Now I would like to request Shri. Updeep ji to share business outlook and industry scenario, and then we can open the floor for question and answer. Thank you, and over to Shri. Updeep ji.

Thank you, Bipeen, and good evening, everyone, and thank you for joining us for this call of Sutlej Textiles, and I hope you all are fine. Indian textile industry, as you would all know, has seen and gone through a positive change in market dynamics and have experienced a recovery after headwinds faced in the past due to COVID-19. A highly buoyant export market and favorable export policy helps sector to revise and emerge even stronger. And today, a lot of optimism prevails for Indian textile and apparel sector on account of strong performance, which was expected over -- and over long run and is expected to be there in the time to come. The global buyers China Plus One strategy that is to de-risk their supply chain from China, riding on India's tremendous strength in textile and spate of government initiatives over the last few months in the sunrise sector are fueling growth and propelling Indian textile and apparel industry to a multiyear growth trajectory. I mean, as our Minister of Textiles and Commerce said in the recent past, it's like rising Phoenix. Even 1% shift of global market share offers India an export opportunity of almost USD 8 billion. And the government initiative to enhance the ease of doing business, generate employment, create market assets and correct sectors weaknesses like lack of scale, boost textile export and ambitious schemes like PLI scheme, for MMS segment, Mega Investment Textile Parks, Mitra scheme and extension of ROS PCL and notification of RoDTEP raised, and different [FTAs] being planned will benefit the entire textile value chain. It will provide a level playing field and enhance India's competitiveness in global export market. As you all know, spinning companies have been witnessing strong demand in yarn business, with the second largest spindle capacity in the world after China, Indian spinners should expect, and on going forward, also, we should expect full utilization of their capacities and superior margins due to robust demand, particularly on account of U.S. and China on the Indian cotton. Indian textile sales have also actually embarked upon aggressive CapEx planning to the tune of 20% to 40% across spinning and garment will continue to drive the current wave of hikes for demand in textiles. Similarly, I mean, the same thing happened with Sutlej. Sutlej being a trusted brand in the yarn industry, we are focusing towards expanding the footprint in terms of home furnishing as well, and we launched this brand, Nesterra, in our home textile segment. And we have also boosted our marketing activities in home textile segment with Nesterra with having advertisement and events. As we are aware building a brand in a cradle process, where in initial years are crucial to build strong foundation, post which we can start to reap the benefits in the near future. The home textile business will enable Sutlej to enter into the next leg of growth, and we are quite bullish on that. As a result, we have also taken onboard one of a very seasonal person to have this home textile division across India and U.S. in American silk mill. And we strongly believe that strong yarn business and uprising home textile business will lead us in Sutlej to deliver robust performance and continue to add value to its stakeholders. I must also acknowledge the effort put in by our team and well guided by our Executive Chairman and the Board that we are able to perform well in this quarter 2, and we have shown good results. I think on the -- if there's any questions then I can answer on the raw material and others. So I'll leave it for the organizers for the question-and-answer session.

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

Congrats on a good set of numbers. My first question is on the man-made yarn side, how was the realization and the raw material cost panned out in the last 2 months, like we've seen some bit of rise in cotton. What is the scenario on the man-made side? How that costs and the realization in the last September, October month?

Thanks, Yash for asking this question. So on the raw material side, if we talk of the man-made fibre. So man-made fibre in the last 2 months, I would say from first September till date has increased, say, from INR 98 to INR 117 per kg. So it is almost you can say INR 22 change towards the higher side. And we have witnessed similarly that there is increase in realization also. The realization, although would not have gone by the same amount, because there is always a lag. And today, we have witnessed a realization of almost INR 20 -- more than INR 18 to INR 20 per kg.

What is the exact quantum of the yarn, what is the absolute number of the yarn realization on man-made side?

On man-made fibre our average realization is to the extent of -- today, the price is ranging in the range of INR 245, our average has been in Q2 INR 249.

So the Q2 price was INR 249, and today it's INR 245?

One was INR 246 , sorry, Q1 was INR 246.

And Q2?

SQ2 is INR 249.

Okay. And currently, that is how much of that?

Currently it is ranging in the range of INR 255.

And sir, what is the major raw material with polyester viscose is it for you?

Yes. For this yarn, it is polyester viscose.

Got it. And so sir, I wanted to understand, you mentioned that about 48% of the business is from yarn, right? If I heard it correctly, the 48% of the revenue -- what percentage of the revenue is from the yarn side?

So in our case the entire yarn as a total segment, we get almost 95% of revenue from yarn. We are basically into spinning. So the home textile business contributes less than 5% at this point in time.

Sure. And what is the mix between cotton and man-made in the yarn -- on the yarn side?

Okay. Now cotton and man-made mix that we -- when we say talk about cotton, we are into Melanges, okay? So those are all blended. So broadly the capacity is 34% to 35% is on Melanges and rest of it is man-made blends.

Got it. So the economics of Melange yarn is similar to the plain cotton yarn or there is some difference in the...

There is difference because when we say Melange, see if the cotton -- Melange prices are basically go on by a factor, which -- because it is made to order. Normal gray cotton yarn would be even made to stock as well. And there is a direct correlation between the cotton price and immediate impact is seen on the yarn price. Whereas case in Melange, there is always a time lag. Bank would place the order for the garment and the garmentor would place order for the fabric and the fabric maker will place order of the yarn. So that is already there in the pipeline. So the increase in the prices or any impact in the prices takes a little time. So basically, yes, the prices of Melange yarn also move with the raw materials, but there is always a time lag. If a normal yarn would take, say about, 15 days hypothetically, this will take about 40 days.

Sir, last question from my side. Could you also give a trend on the Melange yarn realization of Q1, Q2 and current?

Generally, what happens is that we don't consider Melange as a separate thing, it's a basket, because we are having a different blends and accounts. But of course, the Melange, the final applicability is into the garment like T-shirts. So generally, we see a better realization in Melanges compared to the others. So it could be in the range of, let's say, INR 300 per kg.

And what has been the increase from Q2? So what was it in Q2?

That's what I said that generally, when we are discussing about the yarn prices, we are taking it as a complete basket and not only Melanges price.

So is it fair to assume that the increase in the overall yarn realization from Q2 to currently has been 3% to 4%. Is that fair to assume?

So I would say slightly more than that.

Okay. Okay. Okay. So incrementally, the margins would improve from here? Or would it stay at the current level of 13% to 14%?

So margin in case of Sutlej or any textile company is a function of demand and supply. What we today sit and see is that, you are having able to have the full capacity utilization, as I mentioned that around 94%, and we also see a demand both in domestic and export. As I mentioned in my opening remarks that we have seen a good amount of demand in export. So we expect as the export market also pick up further, we will be having certain pricing power to have the better sector.

[Operator Instructions] The next question is from the line of [Yugan Jaiswal ] from Mittal Analytics.

A couple of questions on the pricing trend again. So given the average realization that you mentioned for man-made fibre, so do you think with the rising cost, the spreads will be maintained going forward?

I would say, yes, because there will be -- we do expect some sort of a correction as well in the fibre prices, in the raw materials from here on. But it won't be the same as it was, say, in Q1 or before. But at the same time, the spread would squeeze a little bit, not too much. So we expect that we should be in the vicinity of this in terms of spread.

Okay. That's helpful, sir. And sir, in terms of cotton, so like you mentioned, a lot of it is from man-made fibre for your case. So, but, how will the cotton pricing impact you? I mean what percentage is just cotton yarn for your case?

See, as Mr. Bipeen Valame said that we have 35 -- around 35% of cotton in our [indiscernible]. So we -- the cotton prices definitely would impact us as well. And in our case, for example, the cotton prices -- increasing cotton price sometimes do impact us positively as well, because of, there is an increase in Melange yarn, so we add more value to that. So, to answer your question, yes, the cotton prices, as per say, do impact our profitability as well. So because it is 35% of our revenues. Just to add here that what we have seen is that if generally the demand, domestic or export remain robust, we are able to pass on the increase in input costs to a large extent, may not be the full, if you have that question.

Okay. Okay. So sir, secondly, like we are seeing the rise in cotton price is substantial between the quarter varying 15%, 20% is the rise in cotton prices. So going forward, how do we see that thing? Do we see cotton prices to -- what is our expectation? Do we expect cotton prices to further go on up from here? Or do we see that the prices might stabilize? What's your take on it?

Yes. So our take on this is very clear that, see, with the season going in, we are now entering the season. We just entered the season for the north cotton. And for the Gujarat cotton, we are just entering the season. And today, if you look at our daily arrivals are in the vicinity of 140,000 to 150,000 bales, and we kept the peak would be in the range of 270,000 to almost 275,000 bales. So, we'll see that now from here onwards, you would have seen that after Diwali, the cotton prices have choppered. So we expect that these cotton prices would stay, I mean, they will not go as low as on the last season. But yes, they'll be corrected and they will stay range bound somewhere in the vicinity of -- this is totally by costing, yes, in the vicinity of, say, 55,000 to 57,000.

Okay. Okay. And sir, secondly, in terms of operating margins, if we see some other peers, I think off late with the better realization and good demand utilization, a lot of them have been able to clock in kind of 20% kind of operating margin. While in our case, I think we've just been around 12%, 13%. So do you expect there is more scope for us to catch up? And/or do we still have 12%, 13% is higher range?

So here, I would like to tell you, if you look at the peer comparison, we have to see with the products we are in -- So, in sarcastics, if you look at the peer comparison, so we are almost at the highest EBITDA amongst the peers who are in sarcastic business. 20% plus EBITDA you are talking about, which are predominantly gray cotton spinning companies. If you talk of stand-alone spinning.

Understood. And sir, in terms of utilization, I think Q1 and Q2, we have been on 90% kind of utilization. So going forward for the full year, do you expect some more volume growth to come in? Or in terms of volume, this is the highest that we expect?

See, in Q1, we were in the range of 88%. And in Q2, we are in the range of 94%, 93-point something in the range of 94%. Now here, the utilization is also a function of the lot size. Since we are in value-added and dyed yarn did, the lot size are getting smaller, MOQs are getting smaller for our exporters over the fabric. So I would say utilization in our sort of business in this -- vicinity of this, it could be 94%, 95% as well. There is always scope for improvement. So that is the utilization we are looking at on the value-added yarns.

Got it, sir. And sir, one last question from my end, and then I'll be back in the queue. In terms of demand visibility, how do we function -- I mean, do we have an order book visibility for next couple of quarters or not so much? And whatever the case is, what is the kind of visibility we have at the moment?

See, there are 2 things. One, you're talking about -- when you're talking about visibility, it is a funnel. So confirmed orders we would not like to have for that long in yarn business, especially in value-added yarn. Because the prices are volatile for the raw materials. So the order book at any point of time, it could be in the range of anywhere between, say, 25 to 45 days. In terms of order book, we wouldn't like to have because the volatility in the yarn and raw material prices.

Just to add here. See, we are into these mid-to-orders. So we do a lot of sampling beforehand and we are supplying. So you see our inventory levels and the working capital utilization remains very, very efficient, because we don't create a significant amount of inventory in anticipation.

And also, I would say that visibility is there, but the confirmed order booking. So we have visibility based on various trends. what we have been sold in the past and what is the trend going on in the marketplace even at the consumer level. So we do all that sort of research. So we have visibility, but confirmed order, I mentioned, we take normally in the vicinity of 45 days.

[Operator Instructions] The next question is from the line of Ritesh Poladia from Girik Capital.

Sir, on yarn, as you said, first, gray yarn picked up. How is now value-added yarns doing? Is it already pre-COVID levels or still there is a gap to fill?

I think even in case of value-added yarns, we are riding almost equal to a little bit on the higher side on the pre-COVID level.

Okay. Second, on your green fibre last quarter, there was some anomaly regarding the prices, even though raw material using are quite high. How is that doing now?

In green fibre, we saw a sharp increase in raw material over the last, I would say, in the month October. The bottle prices reached almost INR 61, INR 62 where they peaked. Now it has come down in the range of INR 53, INR 54. So the delta, now is good enough, and this business for us is a profitable business.

Okay. So is it going according to your projected levels or still there would be a catch-up to be?

I think as a date, as we speak, we are on the level what we have projected.

Okay. And because now you already have a green fibre. So does that -- does that impact on your realization of blended and man-made?

Yes, it does. I think it gives an edge in terms of margins, because we can set the quality as it -- where you optimize the quality to our spinning. So I would say we have reached a level of where we have been impacted positively by this investment and overall EBITDA margin of, say, 0.5 to 0.7 as of now. And of course, we would like to do better on that.

Okay. On cotton -- cotton crop, yesterday, government announced some money infusion to the CCI for cotton procurement. So even after that, do you believe that cotton prices would remain stable?

I feel with more arrivals coming on and with the seasonal, we will see that the cotton prices would stabilize as range bound. I don't think there is -- there will be too much drop in the cotton on prices, but yes, we are still on the higher side as we speak today.

Sure. Sir, in cash flow statement, there is a INR 26 crores CapEx. So is this a maintenance CapEx or modernization...

Yes, it's a de-bottlenecking in maintenance CapEx.

So this -- about INR 50 crores, INR 60 crores is our maintenance from de-bottlenecking some -- modernization CapEx or what?

Yes, I would say a range of around 70 to 75.

70 to 75. Sir, when do we hear about the next CapEx plans for the Sutlej? Or you would have still wait for market to improve?

So. See, generally, what happens is that this maintenance and de-bottlenecking CapEx is required, as you know, we are running 4,20,000 spindles, so that is required. But any major CapEx, right now, it is only under the discussion. And we are watching that how as we right -- as you rightly said, that how the price movement and the demand supply situation emerge.

Sure. Sir, is there any capital infusion happened in the American Silk Mill this six months?

So American Silk Mill capital infusion, what we did is that, there was some increase in our investment in American Silk Mill, it's not really major, I would say, $1.8 million not more.

So now what's the total investment in American Silk Mill? Is it above INR 50 crore?

Yes. You're right.

Okay. And sir, what's happening with the American Silk Mill, I think even if I do the console and stand-alone home-textile business, it's just an INR 8 crores difference. So what's happening with the American Silk Mill?

So in American Silk Mill, what's happening is that -- in the opening paragraph, Mr. Updeep Ji mentioned that we have now appointed a CEO, who will be looking after the home-textile as the complete division. That is the India operation and U.S. operation to get -- to drive better synergy. Point number two, that we are already, as we mentioned that we have launched Nesterra, so we want to see a white labeling of Nesterra in United States and abroad, where we see a better realization. One of the things which actually hit the performance is the logistic issue in U.S., you might have heard that there is a lot of discussion going on. Currently, U.S. is facing a huge container shortage and the shortage of the drivers to run those big container trucks. So what is happening is that even though there is a decent order book in hand, since the material is not reaching in time from China and India and even European countries. The sale could not pick up, which we expect to get stabilized in this quarter and going forward.

Okay. What would be the run rate of American Silk Mill before you acquired right now?

When we acquired the run rate -- and currently, it will not be exactly comparable because of the 2 reasons, because last year, almost like 18 months is a big watch because of the COVID-19. And as the recovery started happening, the new issue of this container and the logistics, which has been hit to U.S. So I would say when we acquired, the turnover was -- the run rate was almost $800,000 per month, so almost 9.5 million to 9.6 million, which we expect that to some extent catch up to happen in quarter 3 and quarter 4, but it will take some time to come back to the original level because of some logistic issue and also synergistic benefit, which we are expecting to come out.

So can we have INR 100 crore revenue of American Silk Mills in FY '23?

Yes. I would say that would be a reasonable expectation. We are -- actually, we are putting a higher benchmark, but I would say that should be -- yes, we are actually targeting that kind of situation going forward.

And Nesterra is recently launched -- of this INR 30 crores -- INR 31 crores of stand-alone home textile revenue, it won't be meaningful? Or is there a good portion out of Nesterra?

So Nesterra, actually, we launched in the month of September and October just before the Diwali. So the reflection in number we will see in quarter 4, I would say, part of it. But meaningful discussion can happen in next year once we see a good traction, really what as Updeep Ji mentioned, we just started with some hoarding and some direct marketing efforts at various locations. What the positive feedback we are getting is that customers liked the collection, the design, and we are also expect that we will -- it will give us some better pricing forward, going forward.

Sure. A few quarters back, there was something that some Italian designer teams has been appointed for the domestic home textile business for exports. When do we see the pickup happening in the home textile business from India?

I think we see this in the first quarter of the coming year. We would see a good traction also happening in our export business from India.

So would you like to give some targets?

Pardon?

Would you like to give some target for FY '23, FY '24 for domestic home textile business?

I think, generally, we don't give the futuristic numbers and the targets. But all efforts are in the right direction, and we see some kind of visibility and momentum happening after this Diwali festival. We expect that traction to continue going forward.

Sir, I do appreciate that you don't give your guidance. It's just because since 10 years, we're struggling in the home textile business and just to boost some investor confidence if you're giving some targets or the aspirational targets for next 5 years, it would help appreciate us this business because I think in 10 years, if I see cumulative basis, Sutlej Textile would have lost money in the home textile business.

Yes, what you say is right. But there are 2 different things we have to realize. One is that when surplus 10 years history of this home textile business, if you see, we were in suiting. And when we implemented that project, actually, it was not the adequate capacity, because suiting business is driven by the large capacity. We shifted to home textile and basically to upholstery curtains, maybe 3 to 4 years back. And 4 years, we tried to create our own. Initial 2 years also, we were having the Birla takeover under the name. So we were actually not branding it. And this business require a branding and the management team. Last 2 years, I would say that we have a management team, the right kind of a designer. Now we are having the CEO who should look after the entire business. So your point is valid. What we are saying is that our wish is that we create at least a INR 500 crore business, which will contribute at least to 7.5% to 10% of Sutlej top line going forward. Going forward, but of course, this business, as you know, is having a longer gestation period and takes time to create a brand and have your identification and get better margin. But to be very -- being honest that we have -- all our efforts are on that direction and something which we probably might have missed or something which we have achieved. We are very positive and bullish on this business because we believe in going forward, they should add to decent number in terms of EBITDA margin.

So this INR 500 crores would be in 2, 3 years or a longer time frame?

No, that is what the internal target of at least 3 to 4 years' time frame, we expect that to happen. But as you know that we require a certain amount of, at least, a base impact by crossing certain numbers threshold so that we can see a better growth trajectory.

And for those INR 500 crores, any substantial investment needed? Or you are okay with the current infrastructure?

More or less, we are fine with the current infrastructure. Of course, some capital investment may be required to -- if we decide to add certain product profile. And if we don't have a specific machine for it. But largely, it should be driven by the branding and marketing efforts, what we are right now putting.

So rather than the hard infrastructure, you need that soft issues like marketing and distribution happening. Is my understanding right?

Also in certain adjacent categories we have to get in to achieve that. So those categories could be, I mean, within the living room, so for that, we might need some investment, but it's too early to say how much we would be needing that.

[Operator Instructions] The next question is from the line of Sagar Shah from SK Analytics.

First of all, congratulations, sir, for a good set of numbers actually because of maybe the CapEx that you have done for the last 5 years, you are having the fruits maybe going on actually right now?

Thank you very much.

Yes. So sir, my first question was that almost you can say in our yarn business of the top line, the kind of revenue that you have generated in this quarter. I can't see actually this kind of revenue has been generated even in the last, maybe you can say, 3 or 4 years because of various reasons, because of lack of demand and our economy was down and many other reasons. So going forward, as we all are expecting to -- economy to -- our Indian economy to progress well in the next -- at least in the next 2, 3 years. So you, first of all, do you expect the yarn demand to actually continue at this pace for the next at least 2, 3 years?

I would say, yes, see basically there are a couple of things. One, the demand overall; and second, India's competitive position in that world textile trade. And I would say the demand is going to grow to some extent, at the same time, the Indian textile competitiveness is also going to grow, because the initiatives being taken by the government in terms of encouraging exports. We have seen in the last quarter, our export has grown from the first quarter to the extent of almost 56%. I am very bullish on this that in the next couple of years that textile demand, yarn demand from India for at least for value-added is going to grow. And these 2 years would be good for us.

Okay. Okay. So basically, as in the next 2 years, if you see the demand growing and you're already capacity utilization is around 92%. So going ahead, do you think that for incremental demand, your capacity is sufficient or do you need to bring up new capacities onboard?

Good question. In this, what happens, we have to maneuver the product mix. Even if our spindle remains the same, the product mix, the yarn count going -- going finer, having different blend. Now in the times of COVID, for example, in quarter 1 and quarter 2 of this fiscal, we -- I mean, because of some low demand in domestic in Q1, we could serve the export market because we could immediately change our product mix in terms of blend and in terms of count. So even if we are able to maintain the capacity utilization to the level of, say, 94%, 95%. With the sales spindle, we are -- we should be able to meet some of the demand. But going forward, if we need to put up a capacity, that can also be answered at that point of time.

Okay. So basically, you can alter your capacity to bring in the -- to bring up the sufficient demand actually?

Basically, we have to be in the market for the product, what the market needs. So we should have that flexibility and we should be able to maneuver our production in a way that we are able to give that product.

Correct. Exactly.

So that flexibility we have created in our operations. So that is something which our teams at the operational level achieved during this COVID period. And we have demonstrated that in Q2 and Q1 of this fiscal year.

Definitely, sir. My second question, sir, was on margins. As we have got out -- recycled staple fibre project actually successfully. So going ahead, because of the de-bottlenecking, and we have already spent INR 27 crores in this quarter also, which was in the cash flow. So going ahead, do you see our margins improving from around 12% EBITDA to high levels?

I feel that, yes, we should be able to improve, as you would have seen that in this quarter also our margin is above 12%. So we should be able to improve these margins, by way of, again, coming to the changing the blend or the account or the product mix as the market needs.

Okay. But on the gross level or just because of the lower cost of raw materials, do you think that would suffice any changes in your gross margin or that sort? Will it help?

See, as I said earlier on, that we are expecting that at least 0.5% and EBITDA level, say, about 1% of the gross margin. If we are able to improve, we should be able to do that.

Okay. Okay. Sure. Then my last question, sir, was on the home-textile business. Home-textile business, can you say that if we are bringing in some -- in the new products upholstery and the curtains business, so which would be our dedicated clients? What kind of dedicated -- what would be our dedicated clients towards this business if we are seeing improvement in vision in the American Silk Mills actually?

What you said, the dedicated plant?

Clients, clients.

Yes. See -- first and foremost in this business is that we have to synergize between the 2 entities. Now we have created one entity as home-textile. So American silk mills is a front-end for certain price range in the market in the U.S. and the goods are to be made in India. So this synergy is very important for this business, and that would justify our acquisition of that brand. So that is one we see what is happening, and we are quite bullish on that, that this is going to give us good results, number one. Number two, since we have lost new collections. So this business is basically repeat business. So once we have more repeat business, you get better margin and you get better traction in the market as well. So now we are seeing with the launch of new collections, we are increasing our repeat business day-by-day. So these 2 factors are going to help in addition to the new collection being launched. So we are getting good traction for whatever collections have been launched in Nesterra so far in last 2, 3 months. So we see to build on, and we expect to build on this brand going forward, in next 2 to 3 years.

Okay. So based on the product portfolio, you're bullish in that?

Right.

[Operator Instructions] There are no further questions. I now hand the conference over to the management for their closing comments. Over to you, sir.

Thank you. And thank you, ladies and gentlemen, for taking time off to attend this call. And I also thank to the participants who have asked very relevant and probing questions, and I appreciate that. And we do hope, and I can assure you that our management team is focused on this right from -- I mean each of the team members across Sutlej is quite focused and [indiscernible] about this company and this industry going forward. And we would definitely like to have better results and good conversation in the next call. Thank you very much, and stay safe.

Thank you. Ladies and gentlemen, on behalf of Sutlej Textiles and Industries Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.