The Supreme Industries Limited (SUPREMEIND) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Supreme Industries Q2 FY '26 Earnings Conference Call hosted by DAM Capital Advisors. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Aasim Bharde from DAM Capital Advisors. Thank you, and over to you, sir.

Thank you, Bhoomika. So good evening to everyone here on the call for Supreme Industries Q2 and H1 FY '26 Results Conference Call. Firstly, I would like to wish everyone a Happy Diwali. From Supreme, we have with us the senior leadership team, as usual, who will discuss and talk about the quarter. And after this, we can open it for all of your questions. Thank you, and over to you, Mr. Taparia.

Good evening, and thank you, Mr. Aasim. I'm M.P. Taparia, Managing Director of the Supreme Industry Limited. I, along with my colleague, Shri P.C. Somani, CFO; and Shri R.J. Saboo, Vice President, Corporate Affairs and Company Secretary, welcome all the participants who are participating in the discussion of the unaudited stand-alone and consolidated financial results for the quarter and half year ended 30th September 2025. The stand-alone results and the consolidated results are already with you. I'll give a brief outlook on company's product operating performance and other highlights. The company sold 338,224 tonnes of plastic goods and achieved net product turnover of INR 4,951 crores during the first half of the current year against sales of 311,912 tonnes and net product turnover of INR 4,848 crore in the corresponding half year of the previous year, achieving volume and product value growth of around 8% and 2%, respectively. The consolidated operating profit and profit after tax for the half year of the current year amounted to INR 656 crores and INR 367 crores compared to INR 772 crores and INR 480 crores respectively for the corresponding period of the previous year, resulting -- decrease of 15% and 24%, respectively. The biggest scenario of all the product segment of the company for the second quarter ended 30th September 2025 as compared to the corresponding quarter of previous year has been as under. Plastic Piping System grew by 17% in volume and 11% in value terms. Packaging and product segment business degrew by 2% in volume and value terms. Industrial Products segment business degrew by 8% in volume and 14% in value terms. Consumer Products segment business grew by 6% in volume and degrew by 1% in value term. The overall turnover of value-added product increased to INR 1,073 crores during the current quarter as compared to INR 907 crores in the corresponding quarter of previous year. The company had net cash surplus of INR 49 crores as on 30th September 2025 as against cash surplus of INR 944 crores as on 31st March 2025. Looking at better prospect in second half of the year and acquisition of Wavin capacity and launching of silent pipe, the Board has declared interim dividend at 550%, that is INR 1 on each equity share of -- INR 2 each against INR 10 on equity share in the previous year. Business outlook. The world economy is going through a low growth phase. This resulted in pressure on crude oil prices. Several new petrochemical plants have gone into production and further additional plants are under construction. Combined effect of these economic developments have put the polymer price range in downward trend. The company believes that this downward trend may subside going forward unless crude oil prices go down drastically. The company operating in various segments of the business. The company has grown 8% in overall volume in the first 6 months of this year. The company expects to grow 12% to 14% volume in this year. Plastic Piping business growth in agriculture application was adversely affected due to early arrival of monsoon. The rains remain active for extended period, which resulted in severe degrowth in plastic piping application in agriculture. Central and state government also provided less money in infrastructure segment related to demand in plastic piping system. This resulted in lower growth in plastic pipe system in first half. Company has grown in first half of this year in plastic pipe system by 11% in volume. The company expects that demand for agro segment will rebound in second half of this year. The company has maintained its volume growth target between 15% to 17% in plastic pipe segment for the current year. The company has successfully completed acquisition of Wavin business. We acquired Wavin's Plastic Pipe business, including 3 manufacturing sites situated in Banmore in Madhya Pradesh, Thimmapur in Telangana, and Neemrana in Rajasthan, having installed capacity of around 71,000 tonnes per annum as a going concern on term style basis effective 1st August 2025. The company has also entered into master technology license agreement with Wavin BV Netherlands and Orbia Group company to access on an exclusive basis for India and other countries all existing technology and other new technology to be developed during the period of 7 years pertaining to plastic piping system for building an infrastructure segment effective from 1st August 2025. The acquisition and licensing would pave the way for the business of the Plastic Piping division to grow in terms of capacity, market reach and system to handle water in an efficient manner. Capacity expansion at various locations for plastic piping business and packaging products are progressing smoothly. Company plans to set up a new unit for material handling of product at newly acquired land in Malanpur in Madhya Pradesh to expand its footprint in Central India shall be taken up in hand in this financial year, along with other greenfield unit at [ Bhiya ] in Jammu for plastic piping division and in Western Maharashtra for protective piping division for which liquid land is in position of the company. Newly installed production equipment for PP Silent Pipe system in technical collaboration with -- have commenced production. Product with the brand -- has been launched in the country overall in this month. Company expanding its capacity and range -- and exploring export market. The company continued to invest and enlarge the product basket in all division and to remain focused on increasing the range of value-added product. Construction work is signed for profile window project is nearing completion. Initial production line equipment has been installed and production trials have commenced. The company expects to launch commercial production in the market during December 2025. Initial focus of the company is to launch the customized window in UP, NCR and Haryana region. The company would plan thereafter for more geographical reach within India with setting up of fabric facility in other part of the country. During the first half of the current year, company has made CapEx outflow of INR 869 crores, including acquisition of Wavin business. The company expect total cash outflow of about INR 1,300 crores towards existing and new capital commitment including acquisition of Wavin business. Entire CapEx shall be funded from internal accrual. All other product division, except Industrial Component division are faring well and envisage moderate growth during the year. The Protective Packaging division is specifically driving its growth plan by increasing its product range and offering for customized solution. The same yielding positive results and paving the way for achieving double-digit volume growth and revenue milestone of INR 1,000 crores for the year. The company started execution of awarded contract for supply of -- 10 kg of composite LPG cylinder to Bharat Petroleum Corporation Limited and 31,000 number of company cylinder from Indian Oil Corporation Limited. The company has also expanded its export market reach and witnessed -- in terms of better capacity utilization. The division has also got its first order of CNG cascade cylinder and expecting repeat order. This is a brief and overall summary for the quarter and half year ended under reference. Thank you for your patience. Now I and my colleague, Shri P.C. Somani and Shri R.J. Saboo are available to reply to various queries by all of you. Thank you very much.

[Operator Instructions] the first question is from the line of Shravan Shah from Dolat Capital.

Sir, a couple of questions. So first, I just wanted to understand, can you provide the Wavin volume in Q2?

In volume, we sold 3,000 tonnes. We acquired in August. We got 2 months, August and September. So we were settling the old account only also. So around 3,000 tonnes totally, we sold.

Okay. And yes. So for full year, we were previously looking at around 30,000-odd tonnes. So will that number remain same?

Number remains same. But now as we have just started properly only from October, we believe this year, the sale may be around 20,000 tonnes in the 8 months.

Okay. So now, sir, considering the overall particularly the piping volume, so 11-odd percent that we have done in the 1H. So to achieve 15%, 17% for full year, we need to have around 20% kind of a growth in the second half. So have we started seeing that kind of a momentum in the October itself?

You have seen in the second quarter, we have grown by 17%. In first quarter, we have grown less due to segment got beating. But second quarter, we have grown already by 17%. So we are very confident. Now that rains have subsided and reservoirs are full with water, the agriculture market is going to come in a big way from November onwards.

Yes. So actually, my question is on that part only. So this quarter, so if you look at the Q-o-Q piping realization, which has gone up by close to 11-odd percent. And given that, let's say, ADD maybe, let's say, come from the 1st November itself, where we are looking at INR 4, INR 5 per kg PVC price hike. So in that scenario, sir, 2 things. One is, is there any product specific changes? And that's why in the second quarter, piping realization has gone up by significantly 11-odd percent. And now if the ADD comes and, let's say, INR 5 hike is there from 1st November, so how one can look at the realization for the third quarter?

I can't talk about ADD -- I can't talk anything about ADD. Volume, we will grow between 15% to 17%. In second quarter, volume-wise, we have grown by 17%. So we are fully aware of our responsibility. When we say 15% to 17% volume growth, which means second half, the volume should be higher than 17%. Then only we can attain 15%.

Got it. And lastly, sir, on the margin front, EBITDA margin front. So in 1H, we have done 12.3-odd percent. So last time, we were saying that around 14.5% to 15.5% kind of EBITDA margin for this year. So is there any change? And if not, then we need to have a 17% to 19% kind of EBITDA margin in the second half to achieve this number?

Generally in our business second half is better because first half, the 3 months of any season, the demand goes down, the margins are under pressure. And the raw material price is higher, already so much, there's not much scope now raw material price to fall unless the crude price goes down drastically.

Got it, sir. No, no, I understand. Even if, let's say, the prices remain stable, then also still we believe that we can see a 3%, 4% kind of EBITDA margin improvement from currently 12.3% to 17%, 16%.

We told them our EBITDA margin for the full year will be between 14.5% to 15%.

Okay. Okay. Got it. Got it. And lastly, sir, in terms of now that we have a debt also versus the cash, which has significantly now has reduced with the Wavin acquisition and the CapEx that we have -- are planning. So on the full year basis, how one can look at in terms of the debt level and also similarly for the finance cost?

We have no debt level. We have no debt. We will not have any debt.

Sir, on the gross front, we have INR 240-odd crore debt. But given the CapEx is there, do we believe that the debt level will -- again will come down at a gross level...

The gross level, whatever debt we have taken is very temporary in nature, it's short term. By end of December, this will also go away. And once we look at the full year, March '26, we'll be having a reasonable cash surplus in hand because there won't be much pressure on the CapEx payment now.

[Operator Instructions] the next question comes from the line of Sneha Talreja from Nuvama.

Just wanted to understand on the margins front, while we have seen quarter-on-quarter improvement in realizations, even our gross margins have improved, we've seen a fall in EBITDA margins. What would be the impact of Wavin losses that we would have seen this particular quarter?

At operating level, Wavin does not give any negative margins. They are plus only.

And what about inventory loss? Have we seen any inventory loss this particular quarter?

This was the first half. Overall, in the company, there is an inventory loss because raw material prices have fallen, that is not only PVC, CPVC, polyethylene, all the prices dropping. So maybe inventory loss in the first half may be around INR 50 crores to INR 60 crores each.

Understood. Any other insight that you would want to give because of which EBITDA margins are lower on a quarter-on-quarter basis, leaving apart the depreciation impact because you've added substantial capacity in this particular quarter?

No, no. Because of the lower volume than the anticipated, that's why the fixed cost, which otherwise regulated on the larger volume remained a portion on the lower volume. There's no specific reason for lower margin. And that's how we are anticipating good margins in the second half and overall margin for the year should remain between 14.5% to 15% at operating level.

And sir, could you speak about the demand on ground? You have mentioned in the agri part in the infrastructure side that we could read in the press release, how is the demand in general...

We deal mostly in agriculture and housing. The demand is going to look quite robust. Infrastructure, even today, whatever demand is coming, they are not related to our pipe demand. We hope that now the range of subsidized infrastructure demand may come. We need to watch. We are not a big player in infrastructure market.

Understood. But on the plumbing side, you continue to see demand being robust.

Yes, on plumbing side, yes.

Plumbing side, we expect robust demand in second half.

Understood. And lastly, in case we can get some CapEx breakup, you have done substantial CapEx in the current quarter, leaving apart even Wavin's, which are the product segments where we have added capacity substantially?

Window profile is around INR 200 crores. Then in silent pipe system, we invested around INR 80 crores. Last segment, new segment going to be joining in our company.

The next question comes from the line of Keshav Lahoti from HDFC Securities.

Sir, I want to understand on Wavin. So as you said, Wavin hasn't been profitable this quarter. So when do we think the Wavin margins will be in line with company's margin? And what steps are you taking? Because earlier Wavin was loss-making. So what steps you are taking to possibly ramp up its operation and...

Wavin price list has been changed to our price list. Wavin has regular margin just like us from November. They have gotten the various costs, staff costs and the ground cost. We curtailed many of the costs.

Volume improvement.

Volume improvement...

Understood. Got it. As the Wavin sale is ramping up, can you tell the direct impact? And secondly, you plan to rebrand Wavin under Supreme, some of its sales. How are you planning going forward?

Along with the Wavin asset, we've got 120 sales team member in our company. We've got 266 new distributor and dealers. So somewhere where our reach has proven, we got distributor and dealer and our sales force has been strengthened by addition of 120 numbers...

Okay. Got it. As you -- one last question from my side. As you highlighted, INR 50 crores, INR 60 crores is the inventory loss in H1. So this was the same number in Q1. So possibly Q2 won't be having any inventory loss element. Is this understanding right? And secondly, still Q2 margin looks very subpar, 12.4%.

Very difficult to say some product we might have gained something. But I think we believe that whatever inventory loss was there, it is already behind us.

Got it. So what I'm trying to understand, still this quarter, your EBITDA margin is 12.4%, while year-on-year, the margin in Q2 FY '25 was 14% in spite of inventory loss. So if we adjust for inventory...

Maybe raw material cost at lower rate or maybe sell more value-added item. Value-added item with higher margin. So very difficult to just quantify like that.

[Operator Instructions] the next question comes from the line of Vipul Kumar Shah from Sumangal Investments.

Why consolidated margin -- consolidated net profit is INR 30 crores lower than the stand-alone profit? Any particular reason?

No, the stand-alone profit, we have the income from dividend from Supreme Petrochem, which was INR 43 crores in this half year, whereas consolidated, that goes away and the share of profit comes from the consolidated results.

Okay. So none of the subsidiaries are making losses, right?

Yes, none.

[Operator Instructions] The next question comes from the line of Shravan Shah from Dolat Capital.

Sir, can you tell us with now 71,000 Wavin, our piping capacity is how much? And by end of this year, it will grow to how much?

Our capacity by end of March '26 would be 1 million plus. In piping system, I'm talking. For the company as a whole, it will be 1.2 million plus.

Okay. Okay. Got it. Got it. And in terms of this quarter, specifically in terms of the -- you have any broader sense in terms of the -- whatever the growth that we have achieved on the volume front in the piping, will you help us in terms of the CPVC and the PVC or specifically CPVC growth was how much? And with Wavin -- and going forward, is there a broad -- any idea how the CPVC volume growth looks like?

CPVC growth in first half has gone up by 26% in volume.

For us.

For our company we are talking. We talk about our company only.

Yes. No. I mean for industry would be a much lower number then.

Industry I have no idea. Supreme Industries growth is 26% in first half.

Yes. Got it. Got it, sir. I got the point. I was just trying to understand whether we have gained the market share or not on the CPVC front.

I have no idea, but I believe this is my conjecture our market share must have gone up.

Got it. Because that may be the reason why the Q-o-Q plumbing realization has significantly increased. Maybe this quarter, we could have a higher share of the CPVC in the overall piping volume and that may be the reason the Q-o-Q realization, which is 11-odd percent increase. So that's the -- why I was trying to understand.

But there is my assessment.

And another, sir, in terms of last time, we have said that the JJM, so currently, how much broader our receivables are there? Is there any improvement on the JJM in terms of the government releasing funds?

Outstanding 17 days of the share.

Sorry, sir?

17 days, the share remain outstanding. 17 days of share.

Okay. But we are not seeing any improvement there?

17 days, we are quite happy -- 17 days is quite low.

Okay. And sir, whatever the slightly lower reduction in the volume guidance, so leaving the plumbing, the 3 segments. So this is particularly from the industrial, that's why we are seeing a lower volume guidance?

We have given a 17% volume guidance. Now we are repeating same thing.

12% to 15%, I think...

This is what we told in April. This is what we are saying today in October. There is no change.

No, sir, I think last time we were looking at 14%, 15% overall. And now we are looking at 12% to 14%. So is the industrial segment is the reason and that's why we are seeing or giving a 1% or 2% lower.

The volume is very low, volume is very low -- 15% to 17%, and we are maintaining same percentage today.

Okay. Okay. Okay. And sir, any broader idea that this quarter in terms of overall the entire plastic, pipe and pumping volume growth would be how much for the industry?

We could say we already stated for the year. For the quarter, we...

We have no idea. We can.

And for the industry for full year would be of 8%, 9%, that's the fair number?

Maybe -- but we need to realize the industry has been better positioned to reply to you.

The next question comes from the line of Kumar Saumya from AMBIT Capital.

Sir, just one question. If you could just give a little more clarity on the margin as to what should be the annual number -- annual margin we should be looking at? And what is the number that you think should be deliverable at least in the FY '26.

Annual turnover should be between INR 11,000 crores to INR 11,500 crores and our operating margin should be between 14.5% to 15%. Hello?

Sir? Am I audible?

Am I audible? I told you we anticipate our annual turnover between INR 11,000 crores to INR 11,500 crores. And we expect our operating margin overall for the year will be between 14.5% to 15%.

Got it. Got it. And sir, what is the CapEx that we are looking at from the second half perspective?

We believe overall CapEx should be around INR 1,300 crores. But depending how we are able to order -- book the order as we are negotiating. In first half, we paid INR 869 crores CapEx outflow. And as my colleague has told you, we will be having a reasonable good cash surplus on 1st of April 2026.

The next question comes from the line of Raman KV from Sequent Investments.

Sir, I joined the call a little late. I just want to understand there has been a big increase in the inventory levels. So can you give the reason why there is an increase in the inventory levels? And going ahead, if we are converting this inventory to our revenue in the coming quarters, will there be an impact on the margins? Because my understanding is we will sell this inventory at a lower level.

No, we will price the inventory realization value only. And we believe that the polymer price will come close to bottom only unless the crude price goes down dramatically. The crude price go down a very low level. But today, prices are hovering between $62 to $65 Brent oil. If we go to $55, then we may have another inventory loss. But we are too smart to predict about the crude oil price going forward. But this is quite a low price of crude oil, which is prevalent today in our country, in the world actually, a very low price. So people don't anticipate. If it goes very low, then exploration will come down. And then there will be shortage -- there may be a shortage of crude oil later on going forward.

No, I just want to understand what's the primary reason for increase in the inventory levels?

A good business in second half.

Okay. The business was good in the second half.

We have good capacity and good prospect for second half. And this is our business experience of many years and second half always better than first half.

The next question comes from the line of Utkarsh Nopany from company BOB Capital Markets.

Sir, my first question is regarding the pipe segment margin. So if we see our pipe segment EBIT margin was down by roughly 250 bps on a Y-o-Y basis. Despite we have seen a pretty good volume growth of 17% in this quarter. Our share of value-added product has also gone up quite sharply, say, which was earlier 40%, now it has gone up to 45%. And what we understand that last year, we booked an inventory loss of INR 40 crores. And whereas this year, we have not seen any inventory loss in September quarter. So can you please, sir, help us understand what is the reason for the margin contraction in the pipe segment?

In first half, we lost around INR 60 crores...

We have booked INR 50 crores to INR 60 crores inventory loss in June quarter only. And so if we are saying that we have booked INR 50 crores, INR 60 crores inventory in the first half, that means that there was no inventory loss in the September quarter?

Second quarter, there was too much rain. So the prices have to come down. This was a straight season. Second quarter is a straight season period due to pipe demand get affected due to rainy season. The second quarter margin will always low, but we can give the off-season discount to the customer.

And there was an extended rainfall also.

No, sir. Like my reason was that like we have not seen any negative operating leverage. We have seen positive operating leverage benefit only because our volume was up 17% and our realization on the quarter-on-quarter was up pretty sharply. But fine, sir, I will just take it offline, sir, from you. Sir, my second question was...

You are looking at EBIT margin, EBIT Wavin coming into fold from August onwards, the depreciation has increased definitely.

Okay.

So that's why the EBIT margin would be impacted.

Okay. Okay. Got it, sir. Sir, my second question is on the Industrial and Packaging segment volume. So what we have seen that the Industrial segment volume was down even on a weak base of last year. And even Packaging segment volume also came under pressure in September quarter. So what could be the reason for the same?

Industrial, in my opening remarks, I said all our division worked well, except Industrial Component division. The demand from our customers who are making the primary product in the market, the demand was low in the second quarter. Packaging segment demand -- is going to have a good growth this year. We informed that Packaging division business will grow by double digit this year and may reach INR 1,000 crores this year, which is a significant achievement for the company. Plastic and piping division, the division which is going to reach INR 1,000 crores -- in the company.

The next question comes from the line of Navid Virani from Bastion Research.

So I have a couple of questions regarding Wavin. So we see that when we have acquired Wavin, we have also acquired some technology with it. So the first question, which I want to ask is when do we expect these acquired technologies to start benefiting our Piping segment?

We have told that we have entered into license that have several technologies in the portfolio. We have to decide which technology we want to take -- given to us, we are studying, we are developing on the market first of the product and then only we will enter into an agreement to acquire any technology. Once we acquire any technology license, we will inform all our partner immediately. As on today, we have still not started negotiation for acquiring any technology. We have got a license from them that we have authority on exclusive basis to acquire any of the technology which is in the portfolio, which will decide when we meet in January, we may be able to drill down on some technology and then we will inform to everybody.

Sure. Next up, I wanted to understand the overall outlook of the business, let's say, in 3 to 5 years in terms of exports. So from what I'm able to understand right now, the export as a percentage of our total business today is very small. So how are we planning to build those -- the exports business? And what can be the contribution of exports, let's say, 3, 5 years down the line? Is there any target which we are working with?

The only thing earlier, we were exporting only through our Dubai office. Now we have put more resources based in India also. We're opening another market. So we are very optimistic that our export business will go on growing quarter after quarter. Percentage, I can't say. We wanted to reach even 5%. As on today, we are less than 3% of our turnover. Our aim is to increase the target of export as much as possible. In India, generally, there is too many constraint on boosting export of plastic product, but they are now being handled by the government, central government, state government also very effectively. So we hope that export will start growing quarter after quarter from now.

Noted, noted. And the Packaging segment, is it right to assume that the Packaging segment will lead the charge as far as export business is concerned?

Plastic piping and packaging both.

The next question comes from the line of Mehul from NMV Securities.

Yes. So my question was looking at -- so Wavin India turnover was INR 1,000 crores in FY '24.

I'm sorry to interrupt Mr. your voice is not audible. Can you please speak in a more network area?

Is it audible now?

Still muffled.

I already said some improvement.

Yes. I was just asking that...

I'm sorry to interrupt. But can you please speak through a handset?

Yes. So I was just saying that Wavin's turnover for FY '24 was INR 1,000 crores. So if I assume the similar turnover in FY '25 and the capacity is around INR 73,000 crores -- 73,000 metric tonnes. So realization per metric tonne is around INR 1.35 lakhs, so which is broadly similar for Supreme Industry as well. But if I see this, the Supreme Industry is currently trading around INR 50,000 crores. And if I divide it by the capacity which currently Supreme Industry have, which is 8.70 lakh metric tonnes. So Supreme Industry is trading around INR 5.74 lakh per metric tonnes, whereas the company, the Wavin you bought, it's around INR 41,000 per metric tonne. So why is it so discount you have bought Wavin?

Mehul, I think your understanding is wrong of the subject. Wavin turnover, what you're looking for FY '24 was inclusive of their tank business, which they have divested in '24, '25. So the pipe turnover of -- piping turnover, what we have acquired was less than INR 600 crores.

Earlier, Wavin turnover was along with the westridge turnover...

The next question comes from the line of Vandit Shah from Abakkus Asset Management LLP.

Sir, I just had one question. How is the inventory levels currently with the dealers? Is it normal or still we are waiting for a restocking of inventory?

As per us, it may be lower than normal.

And do you believe that with the restocking might happen in the October -- in the November month before the ADD comes in or in November, December months?

So without ADD also, they have to start buying as when the peak season time. From November to May, the demand remains robust of plastic and piping division. So they have to maintain and service their customers.

The next question comes from the line of Karan Bhatelia from Asian Markets Securities.

Sir, in the first quarter, we mentioned that we executed our PE piping order for gas applications. So you want to throw any light with respect to the FY '26, '27 visibility on revenue?

Now we have GEV approval for our fitting also. So now we are the only company who is able to supply pipe and fitting both from the same company. So we are very optimistic now that going forward, we will be able to meet the requirement of several gas company, pipe and fitting together. The schedule was issued in last week only. So we can talk better when we reach in the month of January, but we expect growing business. Business is not going to be very large, but it's a prestigious business, and this can help us to serve the community better.

What can be the market for this piping...

Comparing to our business of INR 8,000 crores, INR 9,000 crores of plastic piping, this can be a large business. This might be below INR 50 crores.

Right. And sir, any update on the greenfield facilities for the plastic piping over the next 2 years?

Plastic piping, next 2 years, I'm not aware today. But we hope that we -- growing better than the country. We told earlier also the country grow 2% more than GDP. We must grow 2%, 3% more than the country. We...

Last time we were awaiting land approvals at Bihar and Jammu.

Jammu, we have still not started. Land is in our position. Bihar also in our position. Jammu also in our position. But where we still not started any manufacturing activity. First, we will take up to put the plant at Bihar and Jammu will come later. We hope that all the capacity should be up and running in 2028 beginning first quarter -- 2027 first half.

The next question comes from the line of Vipul Kumar Shah from Sumangal Investments.

Are we required to pay any royalty to the Huawei for using their technology?

Whenever we acquire technology, we have to pay them royalty.

Sorry, sir?

Whenever we acquire a new technology from them, then all the technology turnover, we have to pay them royalty.

But on this 71,000 tonnes of capacity, we will not be paying any royalty, right?

We already paid them INR 260 crores.

Okay. And sir, since we have very little cash left, what is your CapEx guidance for next year, sir?

Next year, CapEx will tell you in [ April ].

[Operator Instructions] As there are no further questions, I would now like to hand the conference over to the management for closing comments.

We thank you very much for a very intelligent questions, and we hope that we have satisfied all the questions raised by our partners. Thank you very much.

Thank you, everyone.

Thank you, everyone.

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