Time Technoplast Limited (TIMETECHNO) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Time Technoplast Limited Q2 FY '23 Conference Call hosted by PhillipCapital (India) Private Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vikram Suryavanshi from PhillipCapital (India) Private Limited. Thank you, and over to you, sir.

Thank you, Mike. Good afternoon, and very warm welcome to everyone. Thank you for being on the call of Time Technoplast Limited. We are happy to have the management with us here today for question-and-answer session with the investment community. Management is represented by Mr. Bharat Kumar Vageria, Managing Director; Mr. Raghupathy Thyagarajan, Whole Time Director; Mr. Sandip Modi, Senior Vice President, Accounts and Corporate Planning; Mr. Hemant Soni, Head, Legal and Corporate Affairs. Before we start with the question-and-answer session, we'll have opening comments from the management. Now I hand over the call to Mr. Bharat Vageria for opening comments. Over to you, sir.

I have with me Mr. Raghupathy Thyagarajan.

This is the operator. Sorry to interrupt sir, but the start of your audio was not coming through. So if you could you just repeat the opening once again?

Yes. Thank you, Vikram. Good afternoon to all of you. I have with me Mr. Raghupathy Thyagarajan, Whole-Time Director; Mr. Sandip Modi, Senior Vice President, Accounts and Corporate Planning; Mr. Hemant Soni, Vice President, Legal and Corporate Affairs. We are here essentially to talk about our results for Q2 and half year FY 2023, and outlook for the rest of the year. We are pleased to report a consistent healthy growth this quarter and first half driven by good business performance. The business delivered a healthy revenue growth of 18% in H1 FY '23. Our top priority continue to remain in strengthening the revenue share of value-added product. The value-added products segment grew by 28% year-on-year. However, margin was slightly impacted owing to prevailing geopolitical scenario and challenging macroeconomic environment. Despite a geopolitical scenario and challenging macroeconomic environment, the challenging global scenario, we remain cautiously optimistic about our performance in the future backed by huge demand for our value-added product. We are also pleased to inform that in the last 2 years -- 2.5 years, the number of the shareholders of the company have increased by 300-fold and now reached to more than 1,00,000. So we further like to inform you that Mr. Sanjeev Sharma, who is associated with the company for more than 25 years, have been elevated as a whole time director. He is currently looking after residential, international and also heading the company's north, operations in North and Eastern part of the India. So results are already announced, but I will just walk through some of the key financial and operational highlights. During the Q2 FY '23, corresponding Q2 FY '23 numbers in the -- that also I will give you on a consolidation basis, net sales is INR 2,024 crores as against INR 915 crores from the previous year's same quarter. EBITDA is INR 134 crores as against INR 131 crores. Profit after tax, I can say the same as for the last year, INR 50 crores. Cash profit, INR 92 crores against INR 90 crores. Especially in the Q2 of this year, affected because we all are aware that there is too much cost of the input and duty substantially, which includes foreign exchange has also increased. So there's a little time gap in passing off the prices. That is affecting, but hardly 1.25% abated in terms of the EBITDA margin. Now the key highlights for the quarter compared with the figure, net sales increased by 12%, India 8%, overseas 21%. Volume increased by 9%, India 5%, overseas 17%. EBITDA increased by 2% compared to last year. The EBITDA margin, 13.1% and against 14.3% decreased by 120 basis points which I have explained to you on account of the input cost. It took some time to pass in at a 25 to 30 days gap to the customer and input prices increased because of the too much volatility in the foreign exchange also. Now, HY, if you see the overall comparison of the half year ended FY '23, you will find good growth as far as net sales which stood INR 1,969 crores as against INR 1,670 crores. EBITDA is INR 258 crores as against INR 232 crores. Profit after tax, INR 94 crores as against INR 79 crores. Cash profit, INR 178 crores as against INR 158 crores. So in terms of the half year, we see the net sales increased by 18%, India, 16%, overseas 22%. But overseas, mainly reason as we have a very late to have a presence in U.S. market and in other countries, good business opportunity was there because China business is shifting to the other Asian countries. That is the benefit we are giving it. The volume increased by 11%. So GAAP is little on account of the price increases. India 9%, overseas, 14%. EBITDA increased by 11%, PAT increased by 20%. Half year EBITDA margin is 13.1% as against 13.9%, decreased by 80 basis points. But I'm glad to tell you in the second half, always we get 55% business. So we will definitely try our best to achieve the targeted EBITDA of the current EBITDA and pay it on the current financial year 2022, which company has projected. We are not changing any kind of the guidelines at present because visibility for the second half is looking good. Because India, everybody is committed and India will get a minimum growth of 7%. That is visibility there. So shareholder business, the established product and the value-added product, quarter-on-quarter, value business is increasing, which is value-added product grew by 28% in HY '23 compared to HY '22, mainly because of the CNG project, which you are aware that we have launched in the last 18 months only, and the good opportunity in the period ahead is also there. So, after that value-added product share of the India and overseas business is 64%, 36% as against 68% and 32% FY '22. EBITDA margin India and overseas are in the same range. There is not any much difference in the range 0.3% only, 13.2% and 12.9%. The total PAT is also in spite of too much price has increased in the previous quarter, foreign exchange fluctuation. The debts are in the same range, INR 811 crore as against INR 832 crores, there is reduction of INR 15 crores. The CapEx part is concern is first half incurred INR 108 crores which includes 37 crores towards the capacity expansion, re-engineering automation for the established product and 71 crores towards the value-added product. I recall my call had, in the last conference call, I had mentioned very clearly, companies focusing expansion in value-added product, especially in CNG. Therefore, you will find in the further 2 or 3 quarters value-added expenditure capital expenditure is high because company had to meet certain targeted revenue looking to the present whose demand of the composite products market. So, 1 another thing I would also, like, to update because our valued shareholders and Board has given me the permission for consolidation and restructuring of the overseas business and that process is still on. There is some delay. I can say 30 to 45 days because of the summer vacations, because of the involvement from the many countries in the due diligence process. Still that deal is on, process is on and in a short period I can say short period, means in the current financial year itself, we will try our best to complete the entire deal and you will hear something, good news in the period ahead. So, still project is on, the team is working separately on that deal. Then, I would like to give now a specific -- this floor for the question-and-answer, because I want to give more time to the valued investor. They can get clarification wherever they need it. Thank you.

[Operator Instructions] We have the first question on the line of Shalini Duby from Time Technoplast. Can you hear us?

I can hear. Bharat, this is shareholder. [Foreign Language]

Yes, yes. Shalini.

[Foreign Language]

First thing, I would like to hear from you, how it is there might be, in the management, you are mentioning the name of the Time Technoplast. They're the company.

[Foreign Language]

So you are from which company? You represent which company, Shalini?

Time Technoplast .

No, no. We are from Time Technoplast. You represent from this company?

We -- I am not -- I am only a shareholder.

Yes, you are a shareholder. So therefore, because you -- we are -- just I heard that your -- Time Technoplast is holding -- I heard. Now tell me your question.

[Foreign Language]

Yes, it's a good question. In fact, the company has now is the -- apart from last 2 corona years or 2.5 corona period. As mentioned in March 2022, compare this to pre-COVID level business. And now the expansion plan is almost more than around 15% volume growth we will see. And for 15% volume and revenue growth will give the benefit by way of expansion in EBITDA margin. Further, company is adding the new product portfolio as last 18 months. It has included composite product, which comes under the value-added product and good potential is there. In fact, 3 years down the line, the company is looking to the business of, I can say, more than INR 5,000 crores business on consolidation basis. So, which will have a value-added product shares will be increased, because company is more focusing in expansion program. It's already finalized for the composite products. And in addition to that, the LPG gas cylinder which company has rewarded in this current calendar year only in the month of February, the company got the order from IOCL government company and for supply of the 2 years composite cylinder. So, that would also give the margin boost is there. If you ask me company -- because investor and shareholders take the company value and understand in the form of the ROCE. So, my current ROCE which is in the range of 13.5% to 14% which we are targeting. In the next few years' time it should be over 19%. That is the whole target. We are keeping it. That's -- will come 2-way, increase in the EBITDA margin, increase reducing the working input cycle time, because the value-added product need less cycle time. Another thing as far as shareholders is concerned, if you see my resolutions -- company resolution which is already reference to the restructuring and consolidation is already passed by shareholders also and that will give reward to the shareholders. That will give benefit to reduction in the debt. So, many areas company is planning to give the reward to the shareholders and to give the -- benefit that.

Hello?

Yes. Shalini.

[Foreign Language]

13.1%.

[Foreign Language] 8.9% quarter-on-quarter and -- hello?

Yes, EBITDA margin [Foreign Language]

[Foreign Language]

You are talking, Shalini, about the EBITDA margin, which is 13.1%. Company got target achievement [Foreign Language] 14.2%. [Foreign Language] EBITDA margin.

[Foreign Language]

Order book. [Foreign Language]

[Foreign Language]

[Foreign Language] We have to follow the industry norms. [Foreign Language].

[Foreign Language].

Yes.

[Foreign Language] hello?

Yes. Yes.

[Foreign Language]

[Foreign Language] They have to exit that time. So we can't comment on that. But there's -- I given in my opening remark comments, [Foreign Language] The educated people know very well the business growth of the company. [Foreign Language]

We have the next question on the line of Vikram Suryavanshi .

Basically, can you share about how is the progress on CNG CapEx? And probably, we have seen our order book is more or less around INR 250 crores. So how is the traction in new order for CNG? So if you can give an idea on that?

Yes, right Suryavanshi. As you are concerned with order book, because we are not taking the fresh order because whatever capacity we have, we are executing the old orders which were taken. And we also would like to take the fresh orders on the increased prices. And further, as far as visibility is concerned, as you did in the first half, we did almost INR 60 crores business. Balance second half will be more because we have just completed 1 small line again. But the major CapEx, which I have said in the last quarter that we are committed already, where company will invest around INR 130 crores to CNG project. So in the next 3 years' time, can get the revenue of more than INR 700 crores. So we are on that line only. But again, the automotive line will take some time in the delivery period. Therefore, the small way expansion, mini expansion in our portfolio is going on. And so that we can complete our -- at least fulfill the market demand which we have. As far as CNG is concerned, there is no problem in booking of the orders. We can do the booking of INR 1,000 crores if we want today. But we also don't want to commit for the longer period at the current prices. Because we would like to sustain our EBITDA margin in the range of 18% to 20%. So when the CapEx expansion comes, we will do the booking. Otherwise, during that period, whatever my monthly therefore, you must have seen my order booking is almost the same in the lines of INR 225 crores to INR 250 crores. We are continuing because whatever supply we are doing, the similar quantity we take against order that we can execute the faster. So we are just focusing on value-added products, especially LPG and CX expansion is on radar and that we will do on time.

Okay. Got it. And you touched up on this margin. There is a bit amount of impact on the margin. And in terms of ForEx impact as well as the delay in passing on some of the costs. So how does the margin scenario looks given that there is also talk about the slowdown in global, particularly U.S., Europe? And how is basically industry in terms of demand outlook and probably you can give slightly more idea about impact of this ForEx as well as the raw material on the margin going ahead?

Yes. I think your concern is right. But again, I'm telling you my overseas business has grown by 21%, because we are the leader in 7 countries out of the 10 countries. So, I don't think I have not seen any kind of the downward in that region. And EBITDA margin, which is specific this quarter, 2 have been affected, because sudden jump in the foreign exchange, which was going on 81%, 82% and suddenly went up to [ 83.40% ]. So, we take time in the passing otherwise our 92% business is B2B, industry business. Any price increases there, we pass on to them. So, whatever margin and EBITDA margin we lost in this quarter, we will gain in the second half of the current financial year. And, in addition I would tell you, we have no projects in Europe. Because Europe slowdown is even -- whatever slowed down, Europe, many factories have closed down, anything. But we see also that the good opportunities, so we can supply some of the -- our packaging product from the Asian countries to the other countries, including Europe also we can supply. Because Europe production is affected because of the energy cost is very high there. But that is not sustainable to anywhere 300%, 400% energy cost is hiked there already.

All right. And the currency impact would be around say 50, 60 basis points or higher than that?

Oh, I can't say not that much because we pass on to them. If 125 basis points is down, that is on account of the 2 reasons. You can say the 50 basis points on account of maybe foreign exchange. That's hardly worked out around INR 6 crores something or on account of raw material prices which had sudden increases in the month of August and September, which has now started slowing down. So, that benefit also will come back in this quarter. Because we have passed on now whatever increase is there, because certain customers -- for the customer, we do all the quarterly pricing with them. So, that benefit will come back to us in this quarter.

We have the next question from the line of [ Prema Banda ] from BSM.

Am I audible?

Yes, you are audible, but it is low. If you can come closer to the mic.

Yes. Can you clarify what kind of business will be left after overseas is sold out with the current reorganization? What revenues --how revenues will be affected after [indiscernible]...

No, I could not hear your question.

If you could repeat the question, Prema and come off the speaker phone because the audio is very, very low.

Hello?

Yes.

This is better, yes.

Is it better now?

Yes.

Yes. My question is around this reorganization that you are doing. What is the revenue will be left with the Indian company after the reorganization, you are selling out of international business, and if you can give clarification?

That is again, to my -- it depends because we have a presence in 10 overseas country. We are discussing with the party to sell the entire galaxy, entire overseas businesses with the majority shareholding and we can do the part of the area also, because it's all -- 10 countries different. So I think that's when we will finalize our deal. We will definitely come and explain to you. But as overseas my business -- current business is almost around 35% is overseas business we are doing in the 10 countries today in scenario. And I can say other words I have almost around 40% in Middle East we have; around 25% in these countries we have, Asian countries, Spanish countries, and we have around 15% business in U.S.A.

[Operator Instructions] We have the next question from the line of [ Jenish Gada ] from -- an individual investor.

Any update and progress on the -- one of our foreign unit sale? As in last quarter, management highlighted that they have appointed a big banker for the sale of the unit. And by when we expect to sell the unit? And what is management expecting the proceed -- amount of proceed to be received? And where will the proceeds be used? Where -- it will be used in capacity expansion or working capital? Or it will be given back to the shareholders?

I'll tell you, you are right because it was to be completed in this, it will be completed in the current financial year only. It is showing as you are right that we have appointed advisers to this -- handling this transaction with JPMorgan and E&Y is handling it. But at the same time, we also would like to evaluating the valuation. So, my advisers are in touch with them and they would like to encash the good value in spite of current whatever global scenario is ongoing. But then as far as this unit of these funds are concerned, we have already got the approval from the board that it'll be used for the partly repayment of the debt, partly for the value-added product expansion especially LPG, CNG and hydrogen cylinder and partly with benefit to the shareholders, that 3 things are there. Then the transaction will be completed. Definitely we'll update how the benefits of the shareholders are coming. That's the time will be decided. You know the benefit of giving the shareholders are many reasons, buy back, dividend, special dividends. There are so many ways to give to the benefit of the shareholders.

So is management confident that the same will be completed in current financial year itself?

I can say -- probably percentage terms, I can say, yes. 80%, yes.

Okay. And the reason for the sale of that unit?

In fact, somebody from investor side was also suggesting because we have a lot of things to do in India. As we have a process in 10 countries where my EBITDA margin in the range of 12% to 13%, but we do a lot of investment in my composite product where the EBITDA margin is 18% to 20%. So we would like to substitute business from 13% EBITDA level to the 18% to 20% EBITDA level, so that return on capital can be increased and company can achieve the ROCE of -- in the next 3 years' time of 20%. There is -- a large demand is there.

We have the next question from the line of Anchal Kansal from Green Portfolio. Anchal, can you hear us? No response. We'll move on to the next question. We have the next question from the line of Hitesh Taunk from ICICIdirect.

Sir, I have a few questions. I'll start with the Pipe segment first. We have seen good traction in the piping business from this quarter onwards. And that was a good improvement also. So what is the outlook in that segment, sir? I mean -- and what is the order book? And what is the outlook? Because that segment was -- remained laggard from the few years, right?

Yes. So should I answer first this question then you'll ask? Or again, you give me your questions. So I will answer you all the questions together.

Okay. So you want me to question -- present all the questions. So, okay. That's…

Yes. Yes. I think I will give you all the questions answered together. Yes. Pipe business, I got it.

Okay. And the second question is from the LPG front, sir.

Yes.

Sir, what was the volume -- export volume for the LPG cylinder for this quarter? And have we seen -- I mean, I believe my calculation says that we have seen a significant drop in the export volume because we are diverting significant volume to domestic companies only.

Yes.

So, is there any significant loss of business from the export point of view? This is my second question.

Yes. And?

My third question is, sir you were saying that you are seeing significant growth in the second half. My -- I mean, according to my calculation, the second half revenue will be going to grow, according to your estimate, 21% which is, significantly higher than our historical growth rate. What is going to drive this kind of revenue growth? I know that value input categories going at a -- on higher teens, but I also know that the established product which is a significant revenue contributor in the topline is growing at about 10% to 11%. So, what kind of growth are you seeing in these 2 segments going further? And my last question is that you're seeing a 14.5% kind of margin on a full year basis. That means nearly 14.5% or say 120, 130 basis point jump from here on. So, that will flow from Q3 onwards? Because we know that there would be a kind of volatility in the PVC prices. So, that will flow from Q3 onwards? Or will it be from Q4 onwards? So, these are my questions. I will come in the queue if I have more.

Yes, Hitesh. I think your all questions are good to understand, as you have asked me the pipe business, you know that last 2.5 years was affected, especially in this rainy season also, it is affected. But pipe business now, as per the government, has also increased that infra spending, and now good value of the tenders has come out in the market. So, we have also taken up the good, I can say now, today onwards even I can say from October onwards I am booked till March. So, good order booking as far as pipes are concerned. So, for all of the year pipe business we have kept the target of over INR 200 crores maybe around INR 220 crores or something. So we are going to achieve it because in the first half we achieved INR 100 crores. But definitely, the balance of visibility is there. And prices are also now come down to the reasonable level, I can say reasonable the prices which have increased in the last 9 months, maybe 15% to 20% prices were up. So after October, it started slowing down. So, if I recall you know that when you are in the PVC market, PVC prices went up to $1,600 and now went down to up to $700 again. But there is a substantial -- we are not in that sector at all. So, PVC is much affected in the market, but we are in some kind of a special product. In special product prices, there is no much volatility. It is in the range of 15% to 20%. So, as far as pipe business is concerned, as I mentioned in my previous call and we're also looking into capacity, we can do the pipe business of almost around INR 400 crores with my existing investment. That, we can see the visibility in the next year. Because as this year, the COVID-level business was done in March 22. This rainy season in India is affected -- many still in the last month also, we had many areas, there is still rainy season ongoing. But now the execution have been started. So I think as per the pipe business, we should increase by almost 20%, 25% every year. For example, we are expecting to close around INR 220 crores this year, then further we can expect around INR 300 crores next year. And at the same time, you know very well we have said many times, we are not going to do new expansion in the pipe business till we achieve 90% capacity utilization, right? Now, you've asked me the LPG. Yes, LPG local supply had been started, we used to supply 80% locally and 20% export, but especially in the last quarter in India, rainy season was there is the many states which has affected delivery system of the Indian Oil Corporation. Therefore, this opportunity, what it is, we exported. Much more quantity, in particular, last quarter increased to 40% and localized supplied 60% only. But again, export order we execute, we take the order and always take time to supply in the next 4 to 5 months' time. Considering the present situation, availability of the containers in the environment, and my customers are giving me adequate time for supply in their country. So, as far as LPG is concerned, my utilization, definitely, we are estimating around 85% that is going to be maintained this year also. Now, second have you asked me about the EBITDA margin which is 13.1% and H1 '23 we achieved 13.1%. Yes, all my guideline for all of the year is 14.2%. So, therefore, in the balanced second half, we have to get the EBITDA margin increase by around 1% and that is sustainable and achievable. Because last month, the last quarter, too much volatility in the polymer prices, too volatility in the foreign exchange, resulting it took time to pass on to the customer. So, we have already pass on that prices. And this particular, like I say, the Q4 -- Q3 and Q4, as first half we did 45% business, Q3 we do around 26%, 27% business and the last quarter is 30% business. So, still we are not changing our guidelines, we are extremely strict on our guidelines to achieve EBITDA margin in the range of 14%. It should surpass to 14%. And the PAT margin again, little will be affected on account of the interest cost, which is increased by the RBI, but we will able to maintain that also because in the next 6 months' time, we are targeting to improve our working capital cycle time. Whatever cost increase is there, bet we'll able to save in the improving the working capital cycle time. I hope I answered all your questions. Hitesh?

Sir, my -- am I audible, sir?

Yes.

My last question was about our second half revenue growth, which you are guiding nearly 21% over the last year. Generally, we have not grown in such a fast pace historically. So is it -- and also, we are in the process of hiving off some of the business also. So what is going to drive the second half revenue so far?

No, I'm telling you. Whatever I'm talking to you, I'm not considering today, because still, business is in our hand, so whenever the dilution will come out, that will give the effect how much impact will come that only after completing the transaction. I'm talking about apple-to-apple comparison. As far as this year is concerned, in the first half, we achieved revenue growth of 18%, and definitely the second half, we will achieve more than 20%. Considering that composite CNG product, which we are estimating revenue of over and around 130 to 150 crores, which in the first half, we did 60 crore, because just -- we have completed the 1 line in the last quarter. So that will give me the supply of my additional composite disk gaskets, CNG gasket. So when after my expansion I mentioned to you next year, definitely we can project composite business, both put together maybe around more than 500 crores with the CNG and LPG. Because by the time, we will complete our expansion of the, I will able to use my at least 4 to 5 months of the expansion product also in CNG in next year, in '23-'24. What I'm quite sure, as against the last year turnover of INR 3,653 crores, we are expecting over INR 4,000 crore business and that is visibility is there considering the order book and the demand which is ongoing. Because we have seen my overseas business is not affected much. We are growing here over 20% and that is continuing to -- continue. We will grow.

Okay, sir. I mean, just as sake of clarification. For the first half of FY '23, you have reported around INR 144 crores of revenue from the composite cylinder.

Yes.

And what kind of visibility do you have for the full year, sir, for this year?

Full year in the around of INR 340 crores to INR 350 crores.

Okay. INR 340 crores and INR 350 crores. And for FY '24, sir?

'24, it's too early to say, but I -- definitely, you can see the growth of more than 20%. I'm not considering any LPG expansion, currently because I know that -- because currently, we can't do the expansion based on the only 1 Indian customer, when the other 2 gas distribution companies, right, BPCL and HPCL will come, we can definitely plan for expansion. And still [indiscernible] not that has not yet -- on thing, yes we are talking based on the Indian Oil, getting the response. Indian Oil Corporation, wherever they have supplied the cylinder. The good demand is coming up from the user side, because considering the advantage of using the LPG cylinder.

Sir, I'm sorry, sir. I missed the growth guidance for FY '24. Can repeat that one?

Yes. In '23, for composite cylinder LPG and CNG together, as I mentioned to you, I am expecting business of INR 350 crores, right? LPG and CNG both. In the next year, definitely, we can expect more than INR 500 crores. Conservatively, you can note down INR 500 crores next year.

We have the next question from the line of [ Harsh Beria ], an Investor.

Am I audible?

Yes. Harsh.

Congrats for the good state of results. Very good to see the growth...

So you are telling right. I appreciate your concern. But as a promoter, I'm not happy because my EBITDA is down by 1%. But these are not -- beyond our control, so we could not. But we will try to achieve that. Thank you for appreciating again.

But also with all the raw material price increase, you have maintained EBITDA margin, which is not at all bad. So congrats for that.

Yes.

My question is towards the LPG cylinder capacity expansion. I think our competitor, Supreme Industries, has recently announced that they will be doubling their LPG cylinder capacity in the composite -- LPG composite cylinder capacity by December 2022. So are we seeing different trends in demand if we have put out our expansion plans on hold?

No, no. I just -- my partner, Mr. Raghupathy, will answer you this query because...

We have a capacity of almost 1.4 million cylinder capacity. And of course, I would say that when you hear about the capacity expansion of the other player, you may also check up their capacity, that the first phase of their installed capacity was much lower. If I can recollect, it was about 500,000 cylinders or so. So, even if they increase it, though it is not the platform for me to comment on it, but then they have to go for an expansion basically, because their current install capacity of 500,000 cylinders is inadequate to meet the required demand right now. So we have carried on that expansion part of it. But even after that expansion, my installed capacity will still be higher than what they will have post their expansion.

Okay. That makes sense. So our installed capacity is 1.4 million, but you have mentioned in the past the actual realizable capacity due to different product sizes is about 1 million.

Yes, you're right. You're right. Because...

Yes, there are multiple sizes of cylinders. And when you are catering to different markets, obviously, the sizes -- the product requirements are in different, different sizes. And that is why it cuts down utilization. But now with the bigger orders like Indian Oil Corporation, et cetera, coming, which is limited to 1 side and that win millions. So obviously, we are in a position to then better the utilization of the capacity as well. So that probably, you can see some difference as well going forward.

Perfect. I saw in the -- in our presentation this time, you mentioned that we are targeting or we are looking for aftermarket sales for our CNG on both applications? Can you talk about, like, the current state of development in that segment?

Yes, that's a huge market, because at the moment what we are currently doing the CNG capacity that we have is only filling up the supply chain part of it whereas in the -- CNG is required to be transferred from the mother station to the daughter station in the form of gaskets. Ultimately, these gases that are pended at the daughter stations or at other retail outlets will have to find their way into the automotive vehicles. Most of -- not all the automotive vehicles today in India are all using steel cylinders, and which are obviously very heavy in weight. The shift from steel cylinder to type 4 cylinder will bring about an 80% reduction in the weight of the cylinder. So, it's a project which is being carried out by us, we are working with some OEMs already and it's a little long-term process in terms of an OEM approval. But when it comes to aftermarket, they are more eager and ready to switch over, which we will do it when we have the expanded capacity available to us. And there we are also focusing on, not only for the gaskets, but also for the aftermarket which will mean a different size for automotive vehicles as well. So, that will be a little different size and a little different internal technology as well and that will also be rolled out as we come out with the expansion.

We have the next question from the line of Khushal Jain from Khushal Jain & Company.

Sir, I want to know what is the sale consideration your market value of overseas affairs?

We can't comment on the market value.

Assessment. Assessment.

We can't comment on the market value. Because we can't comment before completion of this transactions in sensitivity as far concerned but we will do the best. We have appointed, I can say, the global best valuer JPMorgan and E&Y, and their suggestion, we will accept it. And because we have -- we may sell in the part or full. That is depending on how the price we are getting it. And we are not selling the entire business of the countries. We will do some majority tech sell, and the balance we will continue. So you will come to know very shortly. There is not much time is there.

How much time do you take now for getting done this transaction?

I think this transaction, as I mentioned, I think you were on the call -- earlier held or not, but I mentioned very clearly this financial year itself, it will be completed.

Okay, sir. My second question is a technical question.

Yes. Yes.

Composite cylinder of LPG. I think so this weather -- Indian weather is supporting that product [Foreign Language]. I think so.

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

Okay, sir. And I want to know the CNG. CNG is a very wonderful product. I have run the CNG plant in Bhopal so I have faced so many problem for getting the CNG gasket [Foreign Language].

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

Okay. Okay. Okay. [Foreign Language]

[Foreign Language]

Yes, sir. My last question is what is the full year revenue? And what is the full year PAT?

Full year revenue [Foreign Language].

Yes, yes, yes. I want to know what is the full year revenue.

[Foreign Language].

Okay, sir. Wonderful. What will be the PAT, sir? [Foreign Language]

[Foreign Language]?

Profit after tax.

[Foreign Language]

We have the next question from the line of from Bhagyesh Kagalkar from HDFC Mutual Fund.

Sir, this composite cylinder. Okay, where we established ourselves with IOC and others for the set up mission of Government of India, the gas mission essentially, that we are selling very important gaskets for the whole system essentially. Of late, there have been concerning reports that CNG may witness a slowdown. CNG prices have gone up because of the overseas issues basically. So I think the company can be fuel agnostic, which it is if you see automotive components. You're already making rain flaps and the interior tanks, et cetera. Some of the OEs whom we're talking are doing something on the EV front also, be it 2-wheeler or 4-wheeler essentially. So what is the thought process that also some products are being made, battery cover or something like that essentially?

Yes, there are a couple of products in addition to what we have already put on the public domain which are under development, and they are all related to some of the new technology that is available with us. Commercial vehicle, which is also growing very -- is witnessing a healthy robust growth. We are also working with leading commercial vehicle manufacturers for replacing a lot of their metal parts to plastic and composite. I'm not at liberty to disclose this -- the details but then I can assure you these are also changes that are continuing to happen to take care of good part of the demand generation that we will witness, so that is going to be there for sure. I agree the concern with regard to the CNG prices being increasing that is of course looks at the face of it, situation but we need to understand that when we look at CNG and diesel, or for the matter, even petrol, even when you have the same prices on a liter to liter basis, which currently is under the inflamed situations as well, even then CNG has a 40% additional mileage that is available. So at any point of time, even if the prices of the fuel CNG is on par with diesel, which is at status today, the buyer or the user of the CNG can still witness 40% extra mileage and that is a reason as to why it is the driving force from a user's perspective. And of course, the government has given all the necessary initiatives to ensure that there's a wider availability of CNG, because we all know that the CNG, the a less polluting fuel. And they all are kind of committed to the Paris protocol earlier one, and now it's COP27 being held in Egypt. So we're all going in that direction. We as a company are prepared to take care of the emerging situation, gas situation that will come in. We are ready with the current fuel of today that is CNG and our investment that we are also doing will also take care of the fact that we will be prepared for tomorrow with our cylinders for hydrogen. So, we are taking care of every component of demand that we can envisage today.

Our next question comes from the line of Anchal Kansal from Green Portfolio.

Yes. Anchal, please go ahead.

Yes, sir. Sir, am I audible.

Yes. You are audible now.

Sir, in the previous quarter you told that your subsidiary, NED Energy, received orders from Tesla worth INR 100 crores. Sir, what is the timeline of the supply. And since Tesla is a big name, are you in talks with any other players as well?

You are talking about the energy storage devices, right? Tesla Power USA who has placed the order to one of the subsidiary company, NED Energy, right?

Yes. You are really right.

As given the order for 100 crores which is to be supplied in a year time. So the supply has already started and some -- because that involve various types of batteries, which we are doing -- develop for him out of our existing product portfolio. And you must have seen the various advertisement given by Tesla Power also in the paper. They are working like a model. They are -- they would like to give -- they buy the batteries from us and they will be on the rentals to the end users on the full battery charge with them. So I think that is a good business we are expecting and the same order we are continuing and execution is on already.

And sir, we are in talks with any major players? Other major players?

Other major players in what? In the battery segment?

Yes, sir.

So battery segment, you know very well that my NED Energy, we are in the battery segment of the telecom tower, solar, railway signals, inverter and industrial batteries, we do manufacture. We are not in the automotive sector batteries. And you know automotive sector batteries are other, Exide, Amara Raja. They are there in auto, and they are in these other batteries also. They are producing.

Okay sir, got it. Sir, also in the composite cylinder segment, when can we expect orders from HPCL and BPCL? So the next question is whenever you release the tenders, are you prepared for the same in terms of capacity?

Yes. Mostly, they would be the similar capacities in terms of the size of the cylinder because today, most of these oil companies, whatever we have seen in the diesel cylinder perspective also everywhere in the market, the 14.2 kilo cylinder. So I guess we would -- they will also adopt the same size.

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

Thank you very much to my all existing and prospective valued investors. And as I mentioned in my call, we are definitely going to add better than the present what we achieved, because it is good. As India is the country where we are expecting the good volume growth, looking at the growth where we have our own consumption. Once again, thank you to my all valued investors and participants in this call.

Thank you. On behalf of PhillipCapital (India) Private Limited, that concludes the conference call. Thank you for joining us, and now you may disconnect your lines.