Yasho Industries Limited (541167) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q4 and FY '25 earnings conference call of Yasho Industries Limited, organized by MUFG Investor Relations. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Masoom Rateria from MUFG. Thank you, and over to you, ma'am.

Thank you. Good evening, everyone, and thank you for coming to Yasho Industries Q4 and FY '25 business call. Today, we have with us from the management Parag Jhaveri, the Managing Director and CEO; along with Mr. Chirag Shah, the CFO. Before we proceed with the call, I would like to give a small disclaimer that the call may contain certain forward-looking statements, which are based on the business opinions and expectations of the company as on today. A detailed disclaimer has been given in the company's investor presentation. I hope everyone had a chance to go through it, which was uploaded on the stock exchange. Now I would like to hand over the call to Mr. Parag Jhaveri. Over to you, sir.

Good afternoon, and thank you, everyone, for joining us for today's results call for the quarter and year-ended 31st March, 2025. We truly value your continued support and interest in Yasho Industries' performance. As we discuss our financial and operational performance for Q4 and FY '25, I would like to emphasize our unwavering commitment to maximizing the value for our stakeholders. Joining me today is our Chief Financial Officer, Mr. Chirag Shah, who came on board with us on 18th February, 2025. We are pleased to have his insight and leadership as part of our team. I hope all of you have had an opportunity to go through the financial results and investor presentation for Q4 FY '25, which are available on the stock exchanges and our company's website. Our performance has remained stable, marked by year-on-year volume improvement of 20%, which has given a top line of INR 668 crores for the year through enhanced sales volume. Despite facing pricing pressures and volatility in recent quarters, we have successfully mitigated these challenges through a more efficient product mix, resulting in an EBITDA margin of 19% for the quarter, supported by economies of scale. Our gross margin improved significantly to 43.1%, up from 36.9% in the same quarter last year. PAT for the quarter was INR 5 crores During the year, we commenced operations at our new production facility in Pakhajan, currently operating at approximately 50% utilization. We aim to reach 70% utilization by the last quarter of FY '26. We have raised INR 125 crores through the issuance of equity shares on a preferential basis. This new funding we'll strategically invest in promising opportunity within the industrial segment and to reduce long-term debt. In this quarter, our U.S. warehouse became operational in March '25, enhancing our ability to service the U.S. market more efficiently. This is a strategic move to localize supply and improve customer responsiveness. We are also focusing on reducing our debt and bringing the debt-to-EBITDA ratio to 3.5 by FY '26. Let's talk about some of the financial highlights. FY Q4 '25, our revenue from operations for the quarter reached INR 182.8 crores, reflecting an 8% year-on-year growth, largely driven by significant volume expansion. Exports were a key contributor accounting for 67% of our total revenue. We successfully preserved our margin and our focus on effective inventory management, alongside an optimized product mix enabled us to achieve an EBITDA of INR 35.6 crores, resulting in EBITDA margin of 19% for the quarter. In terms of segment-wise contribution, industrial sector represented 85% of the revenue while consumer for 15%. For the year-ended March 2025, our revenue from operations totaled INR 668 crores, reflecting a robust 13% year-on-year increase. EBITDA for the year stood at INR 118 crores yielding an EBITDA margin of 17%. The profit after tax for the year was INR 6 crores, affected due to depreciation and interest of our new Pakhajan plant. Segment-wise, industrial chemicals contributed 83% of total revenue while consumer chemicals contributed 17%. On geographical terms, export around 67% of the total revenue, and domestic market contributed rest. Our outlook. The global economy remains uncertain amid evolving geopolitical tension and policy shift impacting the chemical industry. These uncertainties are expected to drive price volatility across both raw material and finished goods, creating a highly dynamic market environment in 2025. Meanwhile, India is gaining traction as a strategic partner with policy advantage that enhances its position in the global supply chain. With rising global interest in partnering with India significant opportunities are emerging. We are well positioned to capitalize on this evolving landscape. Because of this factor, the company is optimistic about achieving 40% to 50% revenue growth in FY '26, supported by increased capacity utilization, improved logistics and continued focus on high-margin value-added products. In conclusion, FY '26 was a transformative year for us. We laid the foundation for long-term sustainable growth with major investment in infrastructure, global reach and technology. Looking ahead, we will continue to focus on enhancing capacity utilization, driving innovation, improving product mix and optimizing cost, all of which are aligned with our strategic goal of delivering superior shareholders' value. Our commitment to creating a long-term value for our stakeholders, coupled with prudent financial management and strategic initiatives will be instrumental in sustaining our growth in coming years. Thank you again for your continued support and trust in Yasho Industries. We are now happy to take any questions you may have.

[Operator Instructions] The first question is from the line of Aman Thadani from Solidarity Investment Managers.

Hello? Am I audible?

Yes.

So my first question is, since Pakhajan, we are operating at 50% utilization on a monthly basis now. So has the higher utilization started getting converted to sales? And have we achieved EBITDA breakeven on a monthly basis at Pakhajan?

As long as the capacity utilization has come, yes, it has achieved almost on sales side in month of March what we anticipated. And we hope that we will be able to increase that sales from Pakhajan in '25,'26. Also, yes, Pakhajan has -- with that utilization, Pakhajan has a breakeven and it has achieved that.

Okay. And just one clarification from your opening comments. So the capacity utilization target for FY '26, is that 70% for the entire year figure? Or is it for just the last quarter of FY '26?

No, 65% to 70% for entire year, not for the last quarter.

Okay. Got it. So sir, just wanted to understand, given the global environment and the challenges that we are facing, what is sort of driving the confidence behind this 70% utilization in FY '26?

That's a good question. See, we were expecting a lot of approvals, a lot of business in last year. We are running behind almost by 2 quarters, but I think we have come to the end of that challenge of approval, getting business. So business started converting into the -- the business intent started converting into the business, actual business. And that gives us confidence to give a policy guideline of achieving the 40%, 50% of top line growth. Also, as I said that India is in a favorable position globally. So we do see a good opportunity there, too.

Understood, sir. And sir, what would be your sense around EBITDA margin at 70% utilization? Or maybe for the blended company in FY '26, if you don't want to split it by 2 facilities?

Well, as of now, we don't want to increase the guideline because there are a lot of uncertainties on the pricing front because of the geopolitical issues. So we still want to maintain between 17% to 19% EBITDA margins for the FY '26.

Got it, sir. And sir, my next question is, as I understand about the business, raw material cost is sort of pass-through in nature in our business. Currently, we are holding higher than usual inventory, and against a large inventory portion, there might be no customer orders. So sir, what is your sense around margin impact if, let's say, the raw material prices or the selling prices were to like decline by 10%?

I didn't get your message clear because there are a lot of noise. Can you just repeat it, if you don't mind? Sorry.

Sure, sir. Sir, am I audible now?

Yes, but there's some disturbance coming from your side. Hello?

Is this better, sir?

Yes, much better.

Okay, sir. Yes. Sorry for that. So sir, as I understand about our business, the raw material costs are sort of usually passed through in our business. So currently, we are holding higher than usual inventory. And what I'm assuming is against a large portion of the inventory, there might be no customer orders. So I wanted to get your sense around margin impact if, let's say, the raw material or the finished goods selling prices were to decline by, let's say, 10%, 15%.

We have done some -- that analysis of 5% up or 5% down how does it impact. But it has a very minor impact. As we have a quarterly pricing with our customer, so we don't see a major impact. We are able to pass on the -- if there's a cost rise or if there's a cost reduction, both the way we are able to pass it on to customer.

Okay. Got it, sir. And sir, just a follow-up question on the inventory. Since it's a bit higher than the past 5 years average, sir, what is sort of the plan of action to get inventories to more normalized levels? And by when do you see the inventory days normalizing to the past averages?

I think it should become by the September quarter.

The next question is from the line of Ashwini Agarwal from Demeter Advisors.

Congratulations on getting Pakhajan up to 50%. So could you give us some color on the kind of contracts that you are now processing at Pakhajan because these were supposed to be large global customers and barely 4 or 5 orders would fill up the entire Pakhajan from what I understood? If you can give some color as to what kind of client? Is this one of those large orders? Or is this a series of smaller orders? What kind of orders are these?

Well, we have certain large long-term supply orders, but orders comes every quarter-on-quarter, not one go. So yes, there are a few orders, a few customers who have come on board, which need a large quantity on a regular basis. And there are some customers who have been added who are negotiating every quarterly. So that is both way. There's very few which is a spot customer. But our focus is to work with the large committed customers, and that is what's now getting converted into reality.

And what -- is a large proportion of Pakhajan output going to the U.S., if I may ask?

No, it goes across the globe. So it's not only U.S.

Okay. And sir, you've opened this warehouse in the U.S., which means that you will be doing a stock and sale method of selling. So in this situation where some tariff imposition is quite likely, what is your sense -- I mean, how much of it would you be able to pass on as a cost? How much of it would you need to absorb? Any thoughts?

Well, as you know that U.S. don't produce all the chemistry. So the chemistry which they don't produce, we are able to pass it on or some of the basis. We said that we just started our relationship, so we are already charging with the lower side of our thing. So we don't -- we generally pass it on to customers. And so far, we have seen that customers are accepting our new U.S. prices. Some segment customers, we are seeing they are just wait and watch. They also want to see the overall U.S. economy, how they perform. So someone has a little bit slowed down and some are doing very good. So there's a mixture of -- mixed message we are getting from there.

Okay. And sir, last question on a consol basis, what percentage of the revenue in March '25 would have come from the United States?

About -- gross level combined revenue must be about in the 20% to 22%.

Congratulations again.

The next question is from the line of Karan from Keynote Capital.

So my first question is, what is the current status of approvals from your customers' customers? Are they expected to come in, in Q1? Or is there any change or delay in the time line?

So already they are already there in place. That's why we are giving you the guidance of utilization of 70% on -- 60% to 70% on FY '26 basis.

Okay. Understood. And the next one is what will be the current blended realization for our products on a company level?

I think -- you are talking in the per kilo? Or what you are asking? See, we -- our gross margins are in the range of about 42%, blended gross margin is.

Realization, revenue per kg or revenue per ton?

Per kg should be about INR 400 kilo average pricing, somewhere in that range, 3-something, 400.

Okay. Understood. And lastly, if you can provide the guidance on what will be the gross debt position for FY '26?

We have already given the target of 40% to 50% growth for FY '26 from the current base.

Gross debt, debt position for FY '26.

Gross debt, gross -- see, we -- our current debt is in the range of about INR 470 crores, okay, current debt. We expect that to come down to somewhere in the range of about INR 450.

[Operator Instructions] So the next question is from the line of Sarvesh Gupta from Maximal Capital.

Sir, on the related question to the earlier participant on the U.S. tariffs, so how should we think about this business because this is like 20%, 25% of our overall revenues? Were we expecting this percentage to go up significantly upon full operationalization of Pakhajan? Or was it expected initially to be at the same level? And secondly, I mean, is China also a major supplier to the U.S. market? Or -- because most likely the Chinese tariff should not be lower than Indian. So will we get any benefit? Or how do we assess this situation, sir?

I have already made a comment that India is in a favorable position to do business globally, and we do see some traction on that side. I can't quantify how much that will really relate to in FY '26. So that will be difficult. It's too premature to make a comment. We are just beginning of the crisis, and let's see how the crisis unfolds.

But is China a major supplier as well to the U.S. for the kind of chemicals we are planning to manufacture in Pakhajan?

China is everywhere. China has every -- every product China produces. It's nothing which China don't make it. So I don't have too much insight about the China presence or not on that side, but there must be Chinese producers. There are producers which we see them in non-American markets, so there has to be in the U.S. market, too. I won't surprise.

Okay. Okay. And secondly, sir, this inventory has gone up a lot. I mean, if you can share some more color. I mean, what was the requirement to raise it significantly by almost INR 130 crores in this financial year?

Sorry, what was...

Inventory has almost doubled, sir, Y-o-Y. So...

Yes, inventory has gone up because we need to produce certain quantity to get approved at customer and they need manufacturing data. They need actual data, not something. So to validate the product at customer, we need to produce a larger volume, and that's the reason inventory has gone up. And we are expecting the inventory to come down into the natural time by September.

Okay. And sir, finally, on the pricing of both the RM and the finished goods. So I guess these had come down not just for low chemicals, but in general in the chemical industry. And are -- but are you seeing some sort of pricing go up going forward? Or do you expect the pricing to remain at the lower level that we have been seeing in the last few quarters?

At the moment, we see the price subdued. We don't see a significant increase in any prices. Sometimes we see increase in India also. But globally, we have not seeing that trend yet. So our projection is only based on the current prices, not any upward or any revision on that. So whatever projection we are giving you today is based on the current market price.

We'll take the next question from the line of Manan Shah from Moneybee.

Congratulations on achieving 50% at Pakhajan. My question was relating to our raw material sourcing. What is our dependence -- or what is our domestic procurement versus the imported for the Pakhajan facility? And in the imported part, what is the reliance on China?

A good question. You want the specific pie, right? So for specific [ percent ], almost 70% is domestic, 30% is import. And of that 30% pie, maybe 10%, 15% comes from China.

Okay. So even this 10%, 15%, we can source it from other locations if need be, right?

Yes and no.

The next question is from the line of Prathamesh Dhiwar from Tiger Assets.

Yes, sir, just one question on the debt side. So as we have given the visibility for FY '26, so just wanted to know what will be the debt levels in '27 and '28.

Well, I have not -- honestly not done work on '27 and '28 as of now. We just began -- we have finished our budgeting for '26. So '27 should be in the range of about INR 400 crores. That kind of repayment schedule will be there for us to repay the loans. So anyway, that was the data. Of '27, I can't give you. If you want more credible information, just drop an email and Chirag bhai will be able to give all the information on that.

The next question is from the line of Anirudh Shetty from Solidarity Advisors Private Limited.

Just some follow-up questions from my end. So in our guidance, do you think we can hit our full utilization of, say, 90% in Q4 FY '26?

I think so. If we hit 90%, then only we will achieve 70% as an overall.

Okay. And do you see possibilities -- you mentioned that our EBITDA margin band is 17% to 19%. But in Q4 FY '25 despite Pakhajan being only at -- not even 50% utilization for the full year, we are still hitting 19% EBITDA margin. So in 2026, we should see more fixed cost absorption. So what is the possibility of doing actually higher EBITDA margin compared to your band of 17% to 19%?

Let me be more cautious approach rather than taking a highly overconfident approach. So we want to remain firmly on grounded, not to give a wrong guidance which cannot be fulfilled. So achievable guidance on a longer term with the current market situation and current geopolitical situation, it's wiser to give 17% to 19%. If we see that we are able to pull out all kind of things and we would be able to improvise, we will revise our guidance by the midyear. But for the beginning of the year, I want to be cautious. I don't want to go highly into that overdrive.

Got it. And our inventory, you answered the question about it improving. I just wanted to understand the inventory that's there today of, say, INR 260 crores, is that -- is it -- the buildup, was it finished goods or was it work-in-progress? What was the nature of that?

It's more of a work-in-process and finished goods, both. More of finished goods I can say that rather than work-in-process.

Okay. And the nature of these finished goods, is it largely customer specific? Or is it fungible across customers and...

We don't have any customer-specific inventory. We have all the standard quality, what we supply across the floor. We don't make customer specific.

Got it. And by September, when things normalize, do you think you can hit your -- in the past, it has been 70 to 80 days of inventory that you all hold. Is that something you all can get to, say, by September or by the end of the year?

That is what we are expecting to achieve in the longer run. We have to achieve that for better management of the cash flow. Otherwise, if we sell that, we need to borrow and we don't want to borrow any money. We want to reduce our debt. We'll be working hard towards that, to maintaining, ensuring the inventory levels are well within the limits.

We'll take our next question from the line of Manan Shah from Moneybee.

In the press release, you also hinted towards some marginal capacity expansion for some products where you're seeing good growth opportunity. So is this for the Pakhajan plant and the existing products?

It will be for Pakhajan plant. Yes, it will be for Pakhajan plant. We do see some good traction in some of our products where we built up the capacity, and we see a good forecast and a good opportunity. So we decided to do some incremental capacity expansion.

So what will be the CapEx outlay for this year?

This year, we have said about within INR 75 crores to INR 100 crores.

And this will be primarily for new capacity at Pakhajan?

No, something also will go for the R&D facility.

Okay. And for the existing sales for Pakhajan, what percent would be to OEM and what percentage would be to aftermarket?

We don't have any OEM customer as of today.

So the entire sale has gone towards aftermarket only?

I can't comment at what -- where my customers are sitting. If they have OEM, I have no idea.

The next question is from the line of Shubham Jhawar from Dexter Capital.

Am I audible?

Yes, you are.

Yes. Sir, my first question is on the gross margins. This year, we have seen the gross margins improve quite a bit to 43% compared to 37% last year and the year before that as well. So are, sir -- are these gross margins sustainable going forward? Or what are the gross margins that we should expect on a sustainable basis?

Sustainable should be about 40% to 42%, okay? That's -- 40% should be a more reasonable margin. One should look at it as a long run business. There are certain products -- sometimes you get opportunity, a specific product portfolio runs -- a niche product that gives you a spike in the margin. But otherwise, in the long run, working 40% is the right one.

All right. And sir, my second question -- apologies for the repeated question on inventory. I just wanted to understand a bit more specifically. In November of 2024 when we spoke on our earnings call of quarter 2 of FY '25, we were expecting that we would be hitting our working capital days of 100, 110 by March of this year. But currently, our working capital is more than 200 days, right? And like you mentioned that our -- the extended inventory is due to the products that we have to keep for customers' approval. So sir, my understanding is that the customers' approval will be ongoing for FY '26 as well, right, because our Pakhajan would be commencing like more than 50% to 60% of utilization. So sir, like how confident are we that we would be able to do normal inventories by September of this year?

Yes, we are very, very much confident to achieve that because a lot of business which is now going -- started coming in which is going to take care of my inventory. And that's what I can say that we are very, very confident that by September inventory level will come down drastically. Yes, 110 is our target. 110, 115 days as an overall control should be targetable, should be achievable by FY '26 definitely.

We'll take our next question from the line of Ashwini Agarwal from Demeter Advisors.

Sir, 2 questions. One is with this U.S. dollar volatility and U.S. dollar having weakened against all global currencies and oil prices falling at the same time, how do these moving parts have an impact on your profitability or your pricing?

Anirudh, that's -- first thing is that we have a lot of natural hedge. Our exports are a little bit higher than the imports, not much, about 5%, 10% higher than the imports. So that gives a lot of comfort on the volatility. We do hedge time to time, as for our ForEx advisers when they see the right moment. So I can say that we have been taking care. Our CFO himself put his personal attention day in and day out on the ForEx side because as you said that we are -- and as we are very much heavily dependent on ForEx volatility. It does -- if we don't take care, it will impact our profitability. So yes, we do take care of it very minorly on that. And somehow we are able to navigate it and we have not lost money or we have not lost an opportunity due to this ForEx volatility.

And sir, softer crude oil, how does that impact?

Crude oil has no impact. Somehow when the -- it's more of a demand-supply than the crude oil in today's -- in current scenario. We have seen some prices going up and some prices down purely due to the demand-supply, okay? So crude oil don't have much impact. Because of that, no prices change. Nobody is impacting the -- if the price has to go up, they give you 10 reason to go down. Also they give you multiple reasons that, look, we are not able to justify the sustainable operations, the breakeven is not there. So we buy commodity. We don't have much control on that, against which we sell the specialty.

Okay. And sir, the other question I had was that in your earlier comment, you mentioned that the INR 75 crores to INR 100 crores CapEx this year, a large part would go towards R&D, if I heard you correctly. So should I assume that the capacity expansion that you were planning for Pakhajan is not on the agenda for fiscal '26 and it will happen later? Would that be a right interpretation?

No, that I didn't say. I said that of INR 100 crores, something will go for R&D. Definitely, there will be -- some capacity expansion will be happening at Pakhajan, because Vapi, we don't have any room there, except we only do the product mix change. That's the only best thing. So Pakhajan will be -- utilize the entire CapEx. Part of it will be for R&D, but the major part will go towards the CapEx for increase the capacity.

So will the capacity -- you had all these -- sort of your existing shed can take up at least 50%, 70% more capacity. Would this money be enough to fill that entire thing out?

Not entire -- we are not filling entire spare capacity in our existing building. So after even that, there some space will be left, luckily for us. So yes, 2 buildings are capable enough to pull out '26. In '27, we'll think about the additional building if we see further opportunity.

[Operator Instructions] The next question is from the line of Varun from Skaniva Capital.

I think in the first quarter of FY '25, we've spoken about 3 or 4 new products which is having an addressable market size of around INR 5,000 crores. So I just wanted to know any work on these new products and just an update on it.

We did talk about that. And for that -- out of that 5 products, 4 product line capacity we have already installed. Fifth product we are working on it still, work-in-progress. And that could be the product which we'll bring it on line with the reset CapEx.

Okay. Okay. And with the Phase 1 of Pakhajan, we've utilized only like 10% of our big land holdings. So after finishing the Phase 2 expansion also at Pakhajan probably in FY '27, what percentage of land would be used when we finish our Phase 2?

It's about 50% of the land. Not 10%, 50% of the land we are utilizing, okay? And the current capacity, we are going to do it in an existing building. So '27, we have not given thought yet how much we're going to expand. What is the cash flow and how we're going to raise fund, everything to come in the future. So it's too premature to talk about Phase 2 today.

The next question is from the line of Shaurya Punyani from Arjav Capital Partners.

Am I audible?

Yes.

Sir, just one question. So you are targeting around 40%, 50% growth this year. So can we continue this momentum like in FY '27 also?

I think so. We are very much confident about that.

So from where this additional growth is, sir?

There will be enough space for further growth, too. And as we are also looking for new CapEx, so that will only kick in '27, not in '26. So CapEx will be completed by early Q4 of FY '26. So the impact will be seen only in FY '27.

The next question is from the line of Majid from TradeWalk Research.

I'm audible?

Yes, Majid.

Yes, sir. Sir, my first question, sir, so the CapEx is going to come live without FY '27, right?

Yes, impact will come only in Q1 of FY '27.

Okay, sir. So post that, like what is the possibility of the fixed asset returns that could be? Can it increase -- maintain the same momentum of 3 to 4x fixed asset returns? Or like...

See, we have spent a lot of money on our infrastructure CapEx. So of INR 480 crores, we have spent almost INR 240 crores on infrastructure CapEx. So that will take a while. So at least we expect 3x returns only by FY '27, not before that. Earliest could be FY '27, earliest. Or it could roll out to FY '28.

Okay. Sir, then what about the working capital days? Is the working capital days going to remain the same? Or will there be increase? Any...

Right now, working capital days are very high due to the high inventory, which we intend to bring it down by end of FY '26 by 110 days, 115 days. That's our target.

110 to 120 days?

110 to 115 days, somewhere in that range.

Sir, what about the CapEx guidance you are looking going forward? Any sort of additional CapEx or...

FY '27 you're talking about? Or FY '26 you're talking?

'26, sir. '26 and '27.

FY '26, I already said we are doing CapEx of INR 75 crores to INR 100 crores this year.

INR 75 crores to INR 100 crores, okay.

Yes.

Okay, sir. And what about -- like any -- finally, my last question is about what about the volume and value growth? Any sort of improvement can be there of...

We have given guidance for 40% to 50% increase in the revenue and plant utilization at 60% to 70% at Pakhajan. So at a company level also, it will be more than 70%.

Okay. So majorly it comes from volume...

Yes, obviously, the growth will come from volume only. If the volume grows, generally the revenue will grow.

We'll take our next question from the line of Sarvesh Gupta from Maximal Capital.

Sir, just one more question on this year's CapEx.

Too low. Can you -- a little bit loud.

Hello?

Yes.

Yes. Sir, one question on this year's plant CapEx, which you mentioned is INR 75 crores to INR 100 crores. And so, sir, since this is coming in Pakhajan, and as you mentioned, this is already excluding infra CapEx, we have put in INR 240 crores, and this is coming under existing shed. So even if it is INR 75 crores to INR 100 crores, it should be a major expansion, right? I mean why are we calling this as a minor expansion?

We are also going to our create our R&D facility there, and that will take a chunk of money. So at least 13%, 14% of that money will go towards R&D.

Okay. And in capacity terms, sir, how much approximately we'll be...

We are not going to give you the overall capacity. We will always give guidance on the revenue side rather than the capacity of installed capacity. So hence -- and you must have observed that this year in our investor presentation also we have removed the capacity chart. So we are not comfortable to give you the capacity what we have rather we will be more happy to talk about the revenue side and also performance side.

Okay. This -- 40%, 50% is going to R&D out of this, you're saying?

I said 30%, 40%. I didn't say 40%, 50%. 30%, 40%.

30%, 40%, okay, sir.

Ladies and gentlemen, in interest of time, we'll take our last question from the line of Manan Shah from Moneybee.

Sir, you mentioned that you're looking at a CapEx of roughly INR 75 crores to INR 100 crores. And on the debt side also, you mentioned that you're looking to close the year around INR 450 crores to INR 470 crores sort of debt. That would mean that you would need roughly INR 200 crores of cash flow. But the numbers that we are talking, I believe we'll generate maybe close to INR 160 crores sort of an EBITDA, and the debt servicing, we would need roughly INR 50 crores. So that would leave you only with around INR 110 crores of cash flow.

Why we need INR 200 crores? Manan, I don't think we need INR 200 crores. We...

Sir, CapEx you mentioned around INR 75 crores to INR 100 crores and current debt on our books is around INR 550 crores.

INR 470 crores.

Sorry, sir?

Okay, okay. Okay. Now we are talking about the banking. Okay, yes. Okay, fine. See, what we are looking at the -- we will not require -- once the stock level comes down, our working capital requirement will go down and that will release a lot of cash from there.

But sir, on an expanded sale, if I assume you come down in terms of days to 110 days, your absolute inventory requirement will still be near INR 240 crores, INR 250 crores.

That's what we -- less than INR 200 crores it will come.

Okay. So you are expecting to release around INR 40 crores from inventory?

Yes.

Thank you. Ladies and gentlemen, this was our last question. I would now like to hand the conference over to the management for closing comments.

Thank you very much, everyone, to join for today's call, and we look forward to seeing you guys in the next quarter. Thank you. Have a good day.

Thank you. On behalf of Yasho Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.