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Edited Transcript of BODALCHEM.NSE earnings conference call or presentation 14-Aug-19 12:00pm GMT

Q1 2020 Bodal Chemicals Ltd Earnings Call

Aug 24, 2019 (Thomson StreetEvents) -- Edited Transcript of Bodal Chemicals Ltd earnings conference call or presentation Wednesday, August 14, 2019 at 12:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Ankit Sureshbhai Patel

Bodal Chemicals Limited - Executive Director

* Mayur Bachubhai Padhya

Bodal Chemicals Limited - CFO

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Conference Call Participants

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* Dipesh Mehta

SBICAP Securities Ltd., Research Division - Information Technology Analyst

* Jatin Damania

Kotak Securities Limited - Research Analyst

* Tanmay Mehta

SBICAP Securities Ltd., Research Division - Research Analyst

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Presentation

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Operator [1]

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Ladies and gentlemen, good day, and welcome to Bodal Chemicals Q1 FY '20 Earnings Conference Call, hosted by SBICAP Securities. (Operators Instructions) Please note that this conference is being recorded.

I now hand the conference over to Mr. Dipesh Mehta from SBICAP Securities. Thank you, and over to you, sir.

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Dipesh Mehta, SBICAP Securities Ltd., Research Division - Information Technology Analyst [2]

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Thank you, Tanvee. Good afternoon, everyone. We at SBICAP Securities are pleased host the First Quarter FY '20 Earnings Conference Call of Bodal Chemicals Ltd. We have with us the senior management team of Bodal Chemicals represented by Mr. Ankit Patel, Executive Director; and Mr. Mayur Padhya, CFO. We will begin the call with opening remarks from management and followed by a Q&A session.

So without much further ado, I would like to hand over the proceedings to Mr. Ankit. Over to you, sir.

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Ankit Sureshbhai Patel, Bodal Chemicals Limited - Executive Director [3]

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Thank you very much, Dipesh. Good evening, everyone. Thank you for joining the Q1 FY '20 Conference call of Bodal Chemicals Ltd. On today's call, I have our CFO, Mr. Mayur Padhya with me as well. I hope all of you have got an opportunity to see our financial results and the analysts presentation filed with the stock exchanges and is also uploaded on our website.

First I will highlight our overall for our business strategy and quarterly performance and detailed financial performance will be taken up by Mayur later on. On the business strategy front, we are gradually moving towards a global Dyestuff player. We have added 18,000 tons per annum Dyestuff capacity in the last 2 years and further expanding it by 24,000 tons per annum over next 2 to 3 years. We have opened up several warehouses and marketing offices in India and overseas as well, which we will be adding further in future as per requirements.

We have completed acquisition of 80% stake at Sener Boya in Turkey, which will be our marketing base for Turkish and surrounding countries. We will be increasing the share of B2C in overall Dyestuff business going ahead. All these efforts will increase Dyestuff's share in total revenues, further integrate our business and leading to stable margins and increase in the profitability in the coming years.

Our Dyestuff capacity expansion over the last 2 years have started bearing fruits with 24% year-on-year growth in Dyestuff production for quarter 1 FY '20. Our VS production was impacted by short-term supply disruption in ethylene oxide during the quarter. Ethylene oxide is produced by only Reliance in India, and there was a less production. The supply has now been normalized since last 15 days. Our total production for quarter 1 FY '20 stood at -- stood flat at 59,985 tons. Our liquid Dyestuff production was more than 350 tons per month during the quarter. We are gradually increasing the production there and see a scope of improvement in near future.

As you are aware, the growth and profitability of Indian corporate has been lowest during FY '20 quarter 1 in the last 3, 4 years. And Bodal is not an exception. The sales price of Vinyl Sulphone has down year-on-year from 225 -- sorry INR 255 to INR 229. Average H-Acid price for the quarter was at INR 414 per kg. Due to slowdown in economies and consumption, our stand-alone total income declined by 8% year-on-year to INR 327 crores.

Our stand-alone EBITDA margins continue to be quite stable due to our integrated model. Our stand-alone PAT for the quarter stood at INR 29 crores, which was impacted by lower revenues and margins. Going ahead, we remain confident of improving revenues and profitability, led by several initiatives which we have taken and we remain confident of long-term growth prospects of the company. Thank you.

And now I would like to request Mayur to take up the financial performance in detail.

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [4]

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Thank you, Mr. Ankit. Good evening to all. On the financial front, our stand-alone total income declined by 8% year-on-year from INR 3,556 million to INR 3,269 million which was impacted by demand slowdown in the economies due to lower consumption. Our stand-alone EBITDA, including other income, stood at INR 524 million in Q1 FY '20. Stand-alone EBITDA margin stood at 16% for the quarter, which was normal due to lower U.S. production and prices compared to last year.

Our finance cost has increased to INR 23 million, mainly due to higher utilization of working capital limits because of higher Dyestuff business. And net profit for the quarter stood at INR 288 million. Our exports stood at INR 1,396 million, and its share in total revenue was at 54% in Q1 FY '20, an improvement of 1% over last year.

On the subsidiary part, SBS posted revenue of INR 270 million, with EBITDA of INR 17 million in Q1 FY '20. We expect restart at SPS should come by end of first half of FY '20. And after that, SPS should contribute to overall profitability. Trion posted loss of INR 26 million in Q1 FY '20, due to lower production and sales. We are constantly working to minimize the losses at Trion. Thank you.

And now I open the floor for questions-and-answer session.

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Questions and Answers

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Operator [1]

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[Operators Instructions) The first question is from the line of Jatin Damania from Kotak Securities.

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Jatin Damania, Kotak Securities Limited - Research Analyst [2]

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Just wanted to take an update in terms of your Dye Intermediates. We had seen that the production has declined because of the lower -- disruption in the raw materials. The scenario was in first quarter, what is the situation right now? Is the production still running low? Or how are the things going to be in near future?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [3]

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So it was only one raw material that is one of the key raw materials for Vinyl Sulphone, that's the only supplier is Reliance. So for almost 2 months, there was a production cut from Reliance's end. So overall industry's production of Vinyl Sulphone has gone down. But after the 15 days, the supply of that raw material has been normalized. So now for Vinyl Sulphone production in the industry has been normalized. And all that of [Dye companies could now get past] that.

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Jatin Damania, Kotak Securities Limited - Research Analyst [4]

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So that means for the Vinyl Sulphone we might see an impact in the Q2, also? Because July production was -- must be quite lower.

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [5]

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Yes. To some extent, in Q2 also, there will be some effect.

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Jatin Damania, Kotak Securities Limited - Research Analyst [6]

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Sir, because if you look at it, because of this U.S.-China trade war, I mean China was out of the system in last 3, 6 months. And reading a few various media reports, it has seemed that a couple of the Chinese capacity has also come back onstream. So how do you see pricing going on as far as intermediates is concerned?

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Ankit Sureshbhai Patel, Bodal Chemicals Limited - Executive Director [7]

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So as of now -- even though we hear about any new capacities or old capacities coming back in China, there is -- there are no competitive offers of intermediates to the Indian market. So the Vinyl distribution remains the same. And there is no -- not too much of competition that is there, which is coming from China. There's definitely competition within India. Because of this good pace, I'm sure few capacities -- new capacities have come up and some have also expanded. So it was actually the overall slowdown, mainly coming from the textile sector is affecting our sector currently because textile has really slowed down. And overall, also, if you notice, globally and especially in India, also, we feel that overall industrial output has also gone down. This scenario has been I think around for, at least, more than now 2 to 3 months. So I think it's one of those cycles where the production and the demand and supply and all that have been affected.

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Jatin Damania, Kotak Securities Limited - Research Analyst [8]

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Right. But if you look at the -- because I just listening to your counterpart's conference call, they are saying that VS is likely to drop down as low as to INR 180 per kg.

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [9]

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Yes. I mean VS has come down to INR 190 per kg. H-Acid has also come down, it has come down to around 370 levels. They both have corrected here, you are right because I see the prices have come down drastically, that has happened in a short time. But I think still the good thing is that the raw material cycle is also, as you can say, at the lowest level. So the selling price has come down maybe by a healthy percentage, but definitely the raw material cycle is also at the bottom because of the overall demand/supply, overall demand being slow. So I think there will not be a direct effect of that number of -- to the sales and the margin because of the raw materials being available at cheaper rates.

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Jatin Damania, Kotak Securities Limited - Research Analyst [10]

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Can you quantify in terms of the percentage? Because if you look the VS and the H-Acid are down almost 15% to 20% on a sequential basis, which is -- I'm talking about current rate as compared to Q1. So how much the raw material pricing would have been corrected during the same period?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [11]

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It is very difficult to tell because in Vinyl Sulphone we are in 9 different raw materials. In H-Acid, only 1 or 2 are common. And that's a different series of raw materials. And there a number of raw materials are more than 15. So the scenarios are different. And they -- most of them are -- some are not -- but some of them are connected to the global trades. Some of them are connected with the global supply-demand of petrochemicals and some of the refinery chemicals. So they all go through -- they are all connected to different areas. For example, the main raw material for [ethylene] is methylene. Now that is one of the raw material -- byproducts of a steel grant. So there -- the steel productions are -- can make a difference there.

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Jatin Damania, Kotak Securities Limited - Research Analyst [12]

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Okay. So just to (inaudible) because we do need to understand the impact of the fall in the profitability on the stand-alone on the countdown level because since you lose packing the VS at HPS also in the second half. So I wanted to guess profitability and the impact on the overall numbers. Hello?

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Operator [13]

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This is the operator. We have lost connection for the management line. We just want to reconnect.

(technical difficulty)

We have the line from the management connected again.

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Jatin Damania, Kotak Securities Limited - Research Analyst [14]

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Yes. So I just wanted to repeat the question. I just wanted to understand the impact of the volumes of VS because we'll be starting the HPS facility in the second half, and this fall is quite sharp as far as the overall realizing is concerned in just last 14 to 15 days. So how do we see the impact of the change on our stand-alone number as well as consolidated number?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [15]

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So the impact -- the Board has -- I think one of the reasons why the fall has also happened is all the raw materials have also come down. There is also a demand issue in all our raw materials, that's why in all -- most of them have all corrected, and we are also at very bottom prices. Also the reason is that proportionately our intermediates selling price has also come down. So that may be have some effect on the margins of the intermediate sales, but it will not be a complete effect, 15%, 20% of the selling price that has come down. I think it should be marginal, not too much.

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Jatin Damania, Kotak Securities Limited - Research Analyst [16]

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So on the consol that while we reported 13% EBITDA margin, it was actually 100, 200 bps decline, or it will be not that -- that much at level?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [17]

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No. See, the consol level, 13% is because -- see, we have started the trading activity also. And there is the INR 29 crores revenues from trading, whereas the margin is very less. At the same time, at Trion also there is very less margin, rather negative margin. So at the consol level, these 2 impact our debt because of that consolidated EBITDA is lesser. And coming forward to when -- as mentioned by Ankit, right, raw material prices is somewhat -- yes, raw material prices are also down. And that will affect -- maybe affect our top line. Top line should not be affected proportionately. This is what we are feeling at present.

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Jatin Damania, Kotak Securities Limited - Research Analyst [18]

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Okay. And I'll come back to other questions. Just 2 questions. One is can you help us with the profit numbers of [SPS] and the total production and sales volume for Trion?

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Ankit Sureshbhai Patel, Bodal Chemicals Limited - Executive Director [19]

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I'm sorry can you come again, we are getting some voices we are dealing...

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Jatin Damania, Kotak Securities Limited - Research Analyst [20]

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No. No. No, because SPS, you put at 17% of EBITDA, what is that PAT for SPS?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [21]

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The PAT of SPS in the first quarter was almost nil. Because still here, we are producing only H-Acid there. So there was no loss, but it was around breakeven level. But our main compliance were -- we are targeting to starting in a 1-month time. We are -- we were waiting for the tankers to bring the raw supplies from Reliance. Now that our tankers are coming in a couple of weeks. So we are targeting to -- start (inaudible) ready to starts. So once that starts, then we'll definitely start giving some decent margins.

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Jatin Damania, Kotak Securities Limited - Research Analyst [22]

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And sir, on Trion Chemicals, we are -- coming from last couple of quarters, we are saying that probably we'll achieve a breakeven by end of FY '20, but we it was first half then FY '20. Now I mean, looking at the current scenario, I mean what will be the reality as far as the Trion Chemicals is concerned?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [23]

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Actually, there is some new development there in Trion Chemicals. So we have been producing since now 1 year. And they're having different volumes that we have produced on a monthly basis. There is -- there were also a couple of small safety-related issues. So there is a conclusion from the management that because of a few reasons, there are some technical changes that need to be required because the entire plant was done by Chinese. And the product -- this product is -- we are the first -- our plant is the first plant in India. So there are no experience or technical feasibility to this product and this technology. So what we have concluded after this 1 year of production in different parts is that there are some issues related to safety, and there are some improvements that can be done technically. So we have actually identified another expert who has worked in a similar technology and plant. And we are going to take their help, and we are going to make these changes in the plant. So that we are going to take it up very soon. So we'll be taking, I would say, a shutdown there for some time.

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Jatin Damania, Kotak Securities Limited - Research Analyst [24]

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Right (inaudible). The

(technical difficulty)

products.

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [25]

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Can you repeat that please?

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Jatin Damania, Kotak Securities Limited - Research Analyst [26]

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Is it safe to assume that default financials of this unit will be a loss-making products, Trion?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [27]

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It is a loss-making for us. The -- earlier, the problem was something else, actually. Earlier, the problem was the volatility in the raw materials. So caustic prices went from INR 35 to INR 50. Again, they came down to INR 35, INR 37 levels. I think they went back to INR 45, INR 47 levels. And chlorine also went from negative INR 6 to plus INR 7, INR 8. And the caustic raw materials that we procure from China, where there was also some volatility. So this was the issue when we did the entire trial for 1 year. So there's much of volatility. The product quality was good we had supplied -- we already supplied to some of the largest buyers in the U.S. The product has been approved, but we were not able to continuously produce and ramp up the capacity. So in this 1-year journey, we identified many issues. And now we are to actually -- instead of trying to do a temporarily or on a short-term basis, we need to actually properly fix up all the small issues that we have identified. And the prices of caustic has gone down and it is now expected to be at normal level because all the issues globally that have happened in the quarter affected all of the industry, that are all -- all are been come down and all have been solved. So now I think going further, the product will -- I think will go through less of volatility of raw materials.

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Operator [28]

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[Operators Instructions) The next question is from the line of [Krishan Shah] from Isha Securities.

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Unidentified Analyst, [29]

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In quarter -- your quarter 4 results, you had mentioned that we are going to do a CapEx of roughly INR 1,168 crores over the next 3 years. So what will be a CapEx amount for this year, for FY '20?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [30]

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It has not been fixed yet because the CapEx cycle will probably start somewhere around Diwali. So it will probably have an impact of -- much more in the beginning phase we'll not be making big outflow because it will be related to land development and some of the required payments that we need to do to the [VN and CN] for infrastructure, et cetera. So it is based off the stockpile as of now for this financial year. I think the larger sum of outflows will be from the next financial year only. We will have a better idea in the next quarter -- by next quarter, in the next con call.

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Unidentified Analyst, [31]

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Okay. Okay. And the bifurcation that you had given that you will be borrowing INR 700 crores out of the total INR 1,168 crores. So is this going to be entirely domestic borrowing? Or would there be a portion of foreign borrowings?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [32]

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Mostly, it will be domestic borrowing only. There are some machineries that -- but it's not a very big part of the total CapEx. But there are some machineries that we'll be importing. For that, we can consider some foreign -- some foreign currency loans. But most of it is going to be local currency, in local loans.

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Unidentified Analyst, [33]

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Okay. Okay. And could you just repeat the prices for the H-Acid, Vinyl Sulphone, sulfuric acid, if it is possible, for the quarter 1 and the current prices?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [34]

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Today's price of H-Acid is around INR 370. Vinyl Sulphone is around INR 190 rupees. And sulfuric acid is around INR 6.5.

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Unidentified Analyst, [35]

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INR 6.5?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [36]

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Yes.

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Unidentified Analyst, [37]

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Okay. And what was it in quarter 1? All the 3?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [38]

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Quarter 1, the sulfuric were about the same. There was not too much volatility as of now. And quarter 1 -- H-Acid price was around INR 410 levels. And Vinyl Sulphone was around INR 220 level.

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Unidentified Analyst, [39]

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INR 220. Okay.

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Operator [40]

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[Operators Instructions) The next question is from the line of [Shashan Khalim] from [Rockstead Capital].

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Unidentified Analyst, [41]

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I wanted to know that we are expanding more into Dyestuff, and that is a plan that going ahead, we want to expand in Dyestuff. I wanted to understand that why are we doing CapEx majorly what you've announced in March in caustic soda? What is the proportion of the requirement in Dyestuff -- in Dye Intermediates and Dyestuff?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [42]

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Yes. Caustic soda is actually -- it has been part of our plan for -- now 4 to 5 years. There are a few reasons why the company has decided to go for this strategy. Earlier, we did not go for it because earlier we had a long-term debt, we'd come to CDR, and we're taking a lot of debt. So earlier, in around 2015, '16, we decided to payoff our long-term debts. And then after that we decided -- we still had some 2 or 3 other plans of expansion of Dyestuff and some other plans around Baroda unit. These we wanted to be complete first before going to the larger CapEx and also at the new site. So that now -- then we bought the land for our next phase of growth last year. And then now we have almost gotten the clear exit and we're also dealing with the bank. So I think now we are at the business end of the entire process. And then we are going to start execution of the projects around Diwali. The reason is very simple that one of the main bottlenecks in the industry is chlorine. Now chlorine is -- caustic in India has a very good market.

And also, globally, it has a very good market. But chlorine is always a pressurized product. So here the strong point for our company that we use a lot of chlorine. We already use a lot of chlorine and we plan to use more chlorine by the time we execute this project. So what we target into -- you have a 50% to 60% capital chlorine consumption. It is a very strong point. So we can -- we, again, continue with our consolidated and integrated models. Though this does not relate directly with the Dyestuff industry, but we do have a good connection, where we are also going to integrate our caustic supply. So for example, in 2017, '18 alone, we spent INR 17 crores more for that cost structure of caustic compared to the previous year. So there's a lot of volatility, plus we use about 100 tons per day of caustic. So that's also around the capacity that we are seeing, therefore, also around 30% to 40% captive usage. Also, there is a product called HCL, hydrochloric acid, that is also produced in this plant. And also, we are one of the largest consumers -- or consumer of that product. So that we use it to produce our Basic Chemicals.

So all these products that are going to be produced in that plant, we've been already using it in our existing business model. So that brings a good integration and caustic, chlorine both are very Basic Chemicals in the chemistry and they both integrate and they are some of the key supplies into many industries. So for example, caustic, the bigger -- big item for textiles, mainly for chemicals, also pesticides. Chlorine also, is a -- is actually Indian chemistry, Indian markets are a bit behind in Chlorine, because chlorine has a lot of consumption, a lot of good value-added consumption across the globe, especially in Europe and U.S. So we feel that chlorine and caustic both will have a good future in India, especially after this situation in last 5 years in China, Indian companies are -- definitely have a good opportunity to set up some good business model and explore some good chemistry. So I think caustic is being some of the commodities which are involved in the manufacturing of most of these products. So we could have a good area to enter.

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Unidentified Analyst, [43]

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Okay. So as you mentioned that near about caustic soda you would require only 33%. You've mentioned INR 300 is the capacity that you want to come up, where INR 100 is the requirement right now, whereas chlorine, I think, it might be also low. But why are we putting like a large sum of INR 700 crores into it? Because I think it's a generic product and people are expanding, right? If we require chlorine, we have other plants in the area who could supply us.

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [44]

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Well, I'll give you an example in chlorine that we use chlorine in iron fluoride. Now with iron fluoride you use -- for 1 [kilo] portion of iron fluoride you use 0.7 kg of chlorine. Now in our cycle, in the last few months, where we have been producing iron fluoride I have bought chlorine at minus INR 1 and also at plus INR 5. So currently, my average price is coming at plus INR 2.5. So there's such a fluctuation. Just few months ago, the a price was plus INR 7. So I want to over this fluctuation and take the advantage of that. It may -- sometimes, the situation maybe the same because it's a -- it has a lot of limitation of storage. Chlorine is an extremely hazardous product where there is a lot of restrictions about storing it. There are also a lot of restrictions about transporting it and using it.

So because of all this -- because of limitations in the storage, no companies are allowed storages of chlorine. So whenever there is some pressure in the market, the prices temporarily moves to zero or minus. But then, again, it comes back to positive. So we want to take advantage of that. And then we'll be using it all by via pipeline. Not all, but at least half of it by pipeline. And same with caustic. So in chlorine, we are already using around 60, 70 tons a day. And what we are trying to do with chlorine is taking it up to around 150, 160 levels. At 300 tons, chlorine will be produced around 240 tons to -- 240 to 250 tons per day. Out of that, we want to use around 150 tons a day, by the time we execute this project.

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Unidentified Analyst, [45]

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Okay. And what is the plan of rest of chlorine and caustic soda that will be accessed for our company?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [46]

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And just one more thing I want to add to your question about the CapEx. The CapEx is -- so this 300 tons per day plant is actually can operate at around 360 also. The 300 is just a -- that's a capacity that will definitely provide us -- are guaranteeing to work at the best economical model, at the best power consumption. But actually, the same plant can operate around 360 also. So that CapEx that we are showing that, at the same CapEx, we can run the plant around 360 level also. So we are excluding that as well because obviously we want to spend the least possible money on the CapEx, and we want to have the excellent capacity. And about the capacities on -- the incoming capacities that are coming up. So obviously, I mean, the industry and these products are -- sometimes they go through different prices. So that is not in our control. When we put up industry, I don't think about 2- or 3- or 4-year picture. So now we have to think about 20-, 30-, 40-year picture.

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Unidentified Analyst, [47]

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Okay. Sir, just to get a sense of it, what is the chlorine amount that we are using right now in tons per day. Right now?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [48]

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Right now the -- on an average, we will be using around 40 to 50 tons. With our existing capacities, we can use about 80, 90 tons. With all the plants that we're going to with chlorine, if they are -- if they run at an optimum level, you can use around 80, 90 tons.

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Unidentified Analyst, [49]

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Sir, this in revenue terms would be how much?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [50]

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Revenue terms. If you take at an average around INR 2,000 per ton also, and if you take 90 tons.

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Unidentified Analyst, [51]

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So that I multiply and I get to -- yes, that's okay.

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [52]

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Around INR 180,000 per day.

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Unidentified Analyst, [53]

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Okay. And so once we -- so I understood the model that you want to backward integrate everything so that there is no raw material fluctuation that happens to you to a larger extent. So then do we expect that these margins of 17% to 18%, which we have kind of been in the range for the last 5 years, can sustain?

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Ankit Sureshbhai Patel, Bodal Chemicals Limited - Executive Director [54]

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They can definitely sustain. They are actually -- if you look at chlor alkali. If you remove -- also, the last year, which was an extraordinary period, if you compare the chlor alkali companies' numbers from 2010, '11 to 2016, which was probably the normal sales. There also, the EBITDA of those companies was around 30% to 35%. So traditionally, chlor alkali business EBITDA is definitely higher than what we already make. So once we start that, it will actually increase our EBITDA, instead of lowering it. And also, one more thing that we want to do is, we cannot identify some other products also, we want to explore some product doing these chemistries, but we cannot do everything at the same time. So that's why we have taken up a large piece of land. So we want to integrate just like our Baroda complex, where we have a captive power plant to basic chemicals to Dyestuff, intermediates to Dyestuff, and all the BTP and everything is all -- it's an entire complex, which is all integrated, which creates a lot of savings for us. So we want to -- again, we want to work on the same theory at (inaudible) complex, it is not going to be just the (inaudible) plant, but in the longer, it is going to have some organic and inorganic products also which will be integrating. We are -- we are not planning to do anything which doesn't integrate with that (inaudible) or the pipeline. So CapEx is also coming right because we are also doing an outsized power plants to support that [coking] plant.

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Unidentified Analyst, [55]

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Okay. I've got it, sir. And just do -- we don't actually provide right now currently the bifurcation of margins in all the 3 segments. So can we just get a hint of FY '19? What are the margins in Dyestuff, Dye Intermediates and Basic?

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Ankit Sureshbhai Patel, Bodal Chemicals Limited - Executive Director [56]

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See, presently, what we are manufacturing is 3 regions, but this 3 region existing are single and complex. So we are not bifurcating the margins for each division. So that's not possible at present.

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Unidentified Analyst, [57]

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Okay. So I think 50% is still sold outside, right? Like Dye Intermediates, 50% is captive, 50% is sold outside.

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Ankit Sureshbhai Patel, Bodal Chemicals Limited - Executive Director [58]

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Correct.

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Unidentified Analyst, [59]

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So that 50%, okay, we don't calculate margins for that?

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Ankit Sureshbhai Patel, Bodal Chemicals Limited - Executive Director [60]

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Correct. That's why, see, in -- maybe we can believe that also almost 45% to 50% is captive consumption. For the Dye Intermediates, it is also similar in the captive consumption, so we are not calculating a different margin. All that is an integrated total model.

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Unidentified Analyst, [61]

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Okay. But just as a ballpark number, do we feel that Dyestuff has a higher margin compared to the other 2 products because it is the last end of the product line?

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Ankit Sureshbhai Patel, Bodal Chemicals Limited - Executive Director [62]

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So if we compare the last 4, 5 years, then Dyestuff added -- has a standard end product with lower margin compared to Dye Intermediates. But presently, Dye Intermediates is not doing that good. So presently, maybe both have a similar margin, but for us, when we produce Dyestuff, we kept intact the Dye Intermediates margin and then we add the Dyestuff margin.

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Operator [63]

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[Operators Instructions) The next question is from the line of Tanmay Mehta from SBICAP Securities.

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Tanmay Mehta, SBICAP Securities Ltd., Research Division - Research Analyst [64]

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I just wanted to know on the slowdown. If I look at the exports proportion, it has gone up. So could you just give some more color on where the slowdown is? Is it domestic, or how is it? And which -- are we facing some issues in spot contracts or long-term contracts?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [65]

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So it's more of a temporary kind of a slowdown, which has happened in the last, about, 2 months. I think, overall, the problem is with the textile industry. But there's also, I think definitely, the problems are coming from the trade war, where the overall production of Chinese companies that had been affected in their routine today, where the U.S. is a larger consumer, which has implied so many extra tariffs on many of the products. So I think, overall, there's definitely pressure on the Chinese, and it is being noticed everywhere, not only on the chemicals side, but all these other commodities. Commodities also are going through, I think, a lower cycle. So we feel that it's an -- it's just -- it's a phase where I think there's an overall slowdown, in our case, especially in textile, actually, definitely plays the role. If you look at all the Indian textile companies, they are all going through a phase.

I think one of the reasons why textile is going through a slow patch is because they had a good 4 to 5 years' time. And then there has been many new capacities that have come up in the last few years. Many players have expanded. New capacities have come up. So I think that's more of a consolidation time that is going on in the textile industry also.

For our other, and one of the main areas, which is leather, we are the largest manufacturer for leather products. There is also a slowdown in the auto sales globally, not only just in India. I think automobile is -- the automotive sector is also going a bit slow, so I think that's -- that could be one of the reasons why our dyes, Dyestuff that goes into leather is [geographic dye]. So there are a few reasons like that. I think that, all combined, have ended up being production in a bit of a slowdown.

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Tanmay Mehta, SBICAP Securities Ltd., Research Division - Research Analyst [66]

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Okay. And sir, just on the raw materials side. If I see gross margins are down sequentially, so what could be the reason? I mean any particular -- apart from ethylene oxide, how are the raw materials moving? And how are they playing out right now?

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Ankit Sureshbhai Patel, Bodal Chemicals Limited - Executive Director [67]

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So right now, actually, the raw materials are, I would say, most of the raw materials are going through the bottom cycle. So like there are definitely good opportunity to buy some raw materials, maybe try to stock some raw materials in our usual cycles. But then again, the slowdown is there. So you never know. I mean they feel like 5-year bottom or 10-year bottom, but you never know. So -- and we don't want to take any chances, so well, we'll just continue with our routine strategies.

But definitely, the cycles are on the lower side, even coal. Coal is at the lower side. Most of the petrochemicals and then those lean chemicals that we buy, they are also going through the lowest prices. And we get only 10% more than the lowest price in the last 5 years.

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Operator [68]

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(Operator Instructions) The next question is from the line of [Krishan Shah] from Isha Securities.

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Unidentified Analyst, [69]

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Could you just give a sense on how are marketing units' time and opportunities are performing in China and India? And is there any -- I mean has the performance reflected in this year? Or would it take some more time?

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Ankit Sureshbhai Patel, Bodal Chemicals Limited - Executive Director [70]

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So in India, the strategy is very clear, that there is -- there are a couple of brands which do really well in India since many years. They are more than 30 to 40 years old Dyestuff players. They're also the leading Indian players right now. There are also some MNC brands that have been ruling Indian markets. But the MNCs have been losing their stake in Indian markets and also globally. But the Indian -- a couple of larger players have actually done very well in the last 5 years also, and they were able to increase their stake. But we are on the same strategy. We are -- we actually came in really late in the Dyestuff industry because our base -- our history goes back to the -- with the Dye Intermediates. And then we started in mid-2000, we started with the Dyestuff.

So our journey has been very short. I think this short journey will also be what shows our big numbers in the volumes, in the volumes now. What we now target to do is we try to realize the maximum margins in the sales of dyes, which can be achieved by doing some B2C business, which is the normal practice for a couple of the largest players in India.

So we do have a few depots across India. We have what is due to other regions appointed across India. And that has been the journey for more than 4, 5 years now. And our volumes in Indian marketing in the domestic set-up just continues -- have been growing. So that is our long-term target. There also is successful companies in the Dyestuff sector, domestic or international. They have been successful because of the -- because of the growth of developer brands that they were able to create, that were able to put up the distribution set-up that they were able to create.

So we are there. We are already successful doing it. It's already been a few years now. So that's for the India part. China, it's too early to call. We started very recently. We are going to start selling some materials very soon. We plan to maybe start with some of the commodities which are probably easier to start with. But for China, we don't have a clear strategy as of now because we also procure a lot of materials from China. So the idea to have our presence in China was to explore the profitabilities because of the slowdown there, because we feel that the industry will not come back aggressively again in China. So what we feel is that there may be an opportunity to supply to the Chinese companies because, again, China has, in fact, the largest textile market in the world. So that was the idea. And it's too soon. But -- so it's a multipurpose company that we have opened that we know which can help us to source chemicals and also explore the marketing possibilities there. But so -- but we are planning to sell and start some sales in China very soon of Dyestuff.

And Turkey was a very strategic call because Turkey, again, is one of the largest textile processing hubs in the world. And it's the way we market, where we have been working for more than now 12, 15 years. We earlier had an idea to open up our own subsidiary and start selling in Turkey and surrounding markets. But the company that we have taken a stake in, Sener Boya, we have been working with them for more than 10 years, and interestingly, their next generation was not interested too much into this business. And since we are -- we share a great relationship with them for many years. This was just a coincidence where they said that we can try some joint venture or something.

So that's how the entire idea came up. So our idea was they are already without any manufacturing of their own supply or any kind of supply from India or China. The company has been doing very decent in Turkey for many years. So we've gone with a strategy where we think we'll go above stakes, 80% stakes, but they are going to be remaining present with the company. They want to help us for fulfill this. They're going to make sure that they are around. And we expect that there is triggered trade in that country and surrounding countries. But I think the biggest plus point really, we'll be able to add volumes very easily because we have our own Dyestuff and not just Dyestuff, but it's going to be coming from the most integrated Dyestuff company. So we'll have all our support of the largest range of Dyestuff with all the raw materials in terms of its profitability.

So I think that will be a very strong model for us, where the expertise of our other partners, like this partner, will be there and who will help us achieve more and more volumes. And our manufacturing model is going to support that. So I think that will become -- I think we are targeting around 25% growth annually starting from next quarter. So I think that should yield some good results in the coming future.

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Operator [71]

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(Operator Instructions) We have a follow-up question from the line of [Krishan Shah] from Isha Securities.

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Unidentified Analyst, [72]

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I had a question. So what would be our incremental revenues post the entire CapEx in the next 3 years? I mean like what's the ratio of incremental revenues to the total CapEx that we are doing?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [73]

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So that is, again, difficult to tell because the prices of all the chemicals have been too volatile from today's prices, INR 28, INR 29, the 2.5 months, the 1.5 months back, I think, we'll get INR 45 per kg.

So it's very difficult to tell, but obviously -- and we are not supporting if the exact capacity is also what we put out. But what we are targeting is that it's going to be at least about double for -- in about 4 years', 5 years' time. Once that's not in the -- executed and it's earning the optimum capacity, it should happen in around 3 years from now. We should have about -- the parallel here also is that the nicer capacity is here in Bodal. We are also going to add subsidiaries, and some sales should come from Turkey, some -- and also the addition of the newest plant at SPS. So all this put together, we are targeting double digits.

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Unidentified Analyst, [74]

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Okay. So double the sales of what you have achieved in FY '19?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [75]

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Yes. FY '19, we forgot. Maybe this quarter we're going to. Sorry, really. But yes, something like that. Yes.

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Unidentified Analyst, [76]

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Okay. Okay. And sir, you mentioned in an earlier answer that you had to do some land acquisition for further expansion. So where was it? And what was the size of the land?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [77]

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The size of the land is close to 5 lakh meters. It falls into an area we call Saykha. And that is neighboring the area here of Dahej. And it also falls into the area, the region called PCPIR. So that entire region has been identified and got it -- got the clearance from MoEF, the Ministry of Environment and Forest. So it is specifically -- the specific purpose from the government is to develop the entire region, which is around 70 square kilometers, is only for the chemicals and petrochemicals purpose. So they have already got the clearance. And so we have -- what I need to say is we've got the land that's probably in the best possible location in India.

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Unidentified Analyst, [78]

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Okay. Okay, okay. And one more question. What is the proportion of textile sales out of our total sales section and automobile?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [79]

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So our total sales in Dyestuff, what we do is around 45% sales come from our Dyestuff, and out of which, about 15% would be through leather dyes. But there's no automobiles, but it is -- it's any application that goes into leather. So about 10% to 15% would be in the leather application, and again, about 15%, 20% to the textile.

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Operator [80]

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The next question is from the line of [Shashank Palen] from [Roxford Capital].

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Unidentified Analyst, [81]

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I just wanted to know, seeing the current numbers of Q1, I could see that Dyestuff still has a lower capacity of near about 60%. We've done an expansion in last year or so. So when do you feel that this will rise? Like when could we reach the higher level of utilization there?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [82]

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So we are continuously putting efforts for that. So to support that, to support our manufacturing capacity's expansion, we are continuously adding more and more marketing incentives as well. So I think the setup that we've got there in Turkey, I think that will definitely give a big boost. Domestically also, we are adding source. These are backside processes. So the optimum level utilization is not more than 75%, 80%. So we are already at not a bad level. But obviously, the continued capacity that you will see, at least about 70%.

And also, parallelly, it's actually more of a continuous process for us for at least the next 3 to 4 years, where we will keep on adding the capacities and we'll keep on adding the marketing strength as well. Fortunately, where our target would be to add more capacities in 3 to 4 years, and then ultimate number, whatever we have, we will try to achieve that about 75%, 80% utilization of that number in about 3 to 4 years of time. So we are working on both parallels.

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Unidentified Analyst, [83]

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Okay. And we had completed a CapEx of Trion Chloride of 36 TPA. So that deal you want to start, what is the update on that?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [84]

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The update is that in the last -- that has already been started. And in the last conference, I had mentioned that we were only running at a lower level of around 30%, 40%, which was required for our captive usage. But now what we are doing is we've already jacked up the capacity a little bit, and we have started selling in the market also from this month.

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Unidentified Analyst, [85]

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Okay. So this will -- this is an intermediate to Vinyl Sulphone. So the margins of Dye Intermediates should increase based on this fact?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [86]

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Yes, it will definitely help.

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Unidentified Analyst, [87]

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Okay, sir. And an update on Trion, our subsidiary, that is still loss-making. So until Caustic Soda comes in, it would possibly be still loss-making?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [88]

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No, I don't think that it requires its own Caustic Soda and chlorine. If we have that in-house available, then it can definitely help because of -- so we can avoid the volatility. That was the issue. Now I think that the Caustic and chlorine prices will be normalized for some time because there are no global issues around the [chloride] industry. Well, I don't think any extraordinary price increase will happen for at least the next 2 to 3 years. So now I think it's not a bad time to have the production of the [PCP], which is a product in crown chemicals. But because of that -- because of this improvement that we want to do, I think we'll have to pause again in that. And then once we are ready with the plant again, we want to start and then roll these new operations and smooth our fears as well. And I think then once we do that and raise up the capacity, raise up the production, then we'll be able to, I think, complete the breakeven levels and some good margins also easily.

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Operator [89]

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(Operator Instructions) The next question is from the line of [Ashok Shah] from [LSE].

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Unidentified Analyst, [90]

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Sir, my question is regarding we are going for a CapEx in the Caustic Soda and chlorine as a raw material stabilizer for us. Sir, there are news that -- or some rumors that antidumping duties are expected to take place or the manufacturer are demanding. So in that, I guess, when the import from the China is more -- or the price is lower than our product production costs, then is it going to affect us in the future as a raw material we are making as a solution for the future?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [91]

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As far as my information is there, I don't think there's any antidumping development that is going around there. I mean antidumping requirement is there only if the local manufacturers are making a loss or they are facing any pressure from the materials coming from outside. Now if you look at throughout the industry in the last 2 years, they have been making bumped-up margins, and also currently, they are making decent margins. So I think nobody, none of the manufacturers would actually defer any antidumping duty. And even if they try, I think the government will never give it to them because I think from the kind of margins lots of companies have been earning, not only last year, but more than 5, 6 years now, I think the antidumping is out of the question.

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Unidentified Analyst, [92]

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So currently, what is the Caustic rate and chlorine rate because you told earlier that it was a minus INR 2, INR 5 a kg. So it's a very wide fluctuation which is taking place in chlorine and simultaneously, maybe in Caustic rate also.

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [93]

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So Caustic, current Caustic price is around INR 28. And chlorine fluctuates. Yes, it definitely fluctuates between minus INR 2, INR 3 to plus INR 2, INR 3. So what we usually do is we just take 0 or plus INR 1 as an average. And what is actually -- if there is actually less fluctuations when if you're a large consumer, then there is definitely very less fluctuation.

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Unidentified Analyst, [94]

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So chlorine -- Caustic has come up, down from INR 45, more than a 1-year dip?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [95]

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I think just 2 months back, it was around INR 45.

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Unidentified Analyst, [96]

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INR 45. So there is a wide fluctuation. So how will we be able to adjust chlorine...

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [97]

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INR 45 was not a realistic price. What you need to understand is that the costing of the entire Caustic-chlorine production is not more than INR 80, INR 90. So even at INR 28, it's a very good margin. At INR 45, it was just a magical period where there was a specific shutdown that happened in growth, which is the second-biggest market. Because of the technology upgradation from the U.N., they had to upgrade immediately. So many plants went for a shutdown. And also, the U.S.' biggest market is in Houston. 2 years ago, there was a big flood there. So for 6 to 8 months, those industries also were topped. Putting this now together, there was a big, big supply cut for more than 8 to 10 months. So because of that, this entire 1.5-, 2-year period, where the prices went from -- earlier, the level of these prices used to be between INR 25 to INR 30 levels, which are normal levels and decent margin levels. But then in the last 1.5 to 2 years, the prices have been more than, I would say, average is around INR 38, INR 40. And because of all this, plants are being shut down in the U.S. and Europe.

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Unidentified Analyst, [98]

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So there is also a need to change up this catalyst or the environment...

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [99]

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Actually, it's the technology. Earlier, it used to be maturity technology, which was not environment-friendly. And then they were compulsory, forced to change it to a method-based technology, which is more environmental-friendly.

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Unidentified Analyst, [100]

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So we are setting up the UHEDENORA technology, De Nora?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [101]

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Yes. You can say -- we are not sure because there is also an option of Japanese technology and a British technology. So there are 3 options in the world right now. One is UHEDENORA, which is UHDENORA and thyssenkrupp, which is in German, when combined, have a company which is thyssenkrupp-UNDENORA company. So that is one option. Second option is there is a company called Asahi Kasei in Japan. They are also doing some primary sources in India. And the third option is [T Uhde], which is the biggest company in Europe. So we are still exploring. We'll be -- we're taking that call at the last moment only because they are all very competitive and very much approved and very good technologies.

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Operator [102]

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The next question is from the line of [Krishan Shah] from Isha Securities.

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Unidentified Analyst, [103]

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Sir, so INR 700 crores of debt we might take. So what would be the peak debt? I mean currently, it's at roughly INR 100 crores, if I'm not wrong. What will be our peak debt? And what is the cost of debt currently?

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Ankit Sureshbhai Patel, Bodal Chemicals Limited - Executive Director [104]

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I think currently, a INR 100 crore debt is mainly from foreign currency debt. That's the PCFC, packing credit in foreign currency. And whatever rupee loan we need to take, that cost us about 9% and PCFC cost was about 3% at present. So blended, not more than 6% also. And the peak debt, what you are saying, so presently, INR 100 crores of working capital. We may need to add another INR 100 crores, so INR 200 crores working capital and another INR 700 crores from debt. So at one point of time, it may reach to, say, INR 850 crores or INR 900 crores.

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Unidentified Analyst, [105]

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Okay. Okay, okay. And Thionyl Chloride, so how -- currently, what is our utilization? And could you just give us a price trend, like quarter 1 this year versus last year and the current price?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [106]

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So in the quarter, also had a very much volatile cycle in the last 1, 1.5 years with the prices of Thionyl Chloride that had gone up to around the INR 40 level. Last quarter, the price was around INR 20. And this ongoing quarter, the current price is around INR 16. So the...

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Unidentified Analyst, [107]

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INR 16?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [108]

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1-6.

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Unidentified Analyst, [109]

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Okay. Yes. 1-6. Okay.

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [110]

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So traditionally also, if you remove the extraordinary phase of plus 1 year, then the prices used to be in the range of around INR 13 to INR 16 only. So that is a normal price. You know the companies are in normal margins. And we are also considering -- we also -- we always consider those normalized prices only. But again, the chemical industry has been going through so much of volatility, so we keep hearing about prices doubling up and all that. But this was a kind of comeback to around the INR 16 level, which is still a good, decent margin level. So we are currently operating at around 50% to 60%. The only reason why we assume we could have easily operated more, there's no issue in the plant or the quality of product. The only reason was the prices were, in the last few months, were coming down. And we did not want to be the aggressive entrant in the marketing. That would have affected the price to crash.

So we wanted to control the prices. At the time, it was already in the market as well because it's not the main [commerce] who has Sulphone, which is the biggest product for us. Now any raw material going down for us can bring down the Vinyl Sulphone price also, so we are always in the interest of all the raw material prices being a bit strong.

So Thionyl Chloride was in our control. So we are strategically moving into the marketing of that. So we have now started selling Thionyl Chloride since last -- about 30 to 45 days. And we are now increasing the volumes also. So setting is not a problem there. We just want to make sure that it doesn't affect the price too much.

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Unidentified Analyst, [111]

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Okay. Okay. And how much of this is actively used, of the total production?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [112]

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So the plant capacity is around 3,000 tons per month. Our captive consumption is around 30%.

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Unidentified Analyst, [113]

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30%?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [114]

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That is going to grow a little bit more because once we start the SPS manufacturing plant, it will increase.

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Unidentified Analyst, [115]

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Okay. Okay. And sir, on the chlor alkali expansion, could you quantify the cost savings that we expect, like a ballpark figure? Or maybe margin expansion, what could it be?

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [116]

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So again, it is the problem of a fluctuated price. It depends on what the -- which price you take. So for example, FY '18, we had kind of INR 18 crores, which is more only in the purchase of Caustic Soda. So if the -- let's say, the price -- if that price is there, then you know it would be what we thinking at least about, now the volumes are also -- the volumes that we use have also gone up. So maybe INR 25 crores we can still within a year.

So it all depends on the price. We also use a lot of chlorine. We also plan to do that here. We also are going to have a common utility, mainly the power plant. So it will bring in not just the savings from captives of the Caustic Soda, also I think, what I feel is, the market is going to remain good. It may go through a lower cycle, some pressurized cycle in maybe 1 year, 1 or 2 years. But I think that nobody can actually figure that out. So I cannot decide that. But what I feel is because of some insights, because it went through a brief phase, new capacities will come up. So it's done maybe in some pressures.

But I think the best part and the most important part for chlor alkali is, it is not just a domestic product, it has a lot of connection in the international market also because what we witnessed in the last 2 years is that because of the U.S. and Europe shutdowns, the entire global companies, other industries had a bump on time. What happened is in -- between 2014 to 2018, China received around 50% of the cost residues of Caustic and chlorine. And that has only grown 4%. So what happened was, 20 years back, Caustic-chlorine in China's presence was only around 10% in the world. And last 4 years', 5 years' time, they have only grown at 4%. So the biggest player in the world, the largest capacity holder, is not growing because the reason is that now these kind of industries are not very favorable there. It also requires power plants -- it actually requires a power plant based on coal, which is the cheapest form of energy for power plants.

Now there are a lot of limitations to use coal. They are actually not giving clearances to coal-based power plants. So even if China wants to have any aggressive growth in the future, that is not going to be a very competitive growth. So what we understand is that the biggest -- the biggest player in the chlor alkali industry on the global map has not grown in the last 4 to 5 years. And that is not going to grow. So the opportunity definitely is good. And also, India, definitely, has a good opportunity, not only to grow in the chemicals sector, but also in the pesticides sector, where the Caustic is sold in large volumes. And also pharma is also doing well, where Caustic supply is possible there. Also, textile is one of the largest consumers, which is going through a slow cycle right now, but it is not multi-combinations.

So India definitely has a good advantage in chlor alkali in the next 10, 15 years. So we want to Caustic to remain as one of the key products. So we want to have those in our portfolio and take advantage of those next 10, 15 years of the golden period that we see coming for the Indian industry -- chemical industry.

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Unidentified Analyst, [117]

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Okay. Okay. So sir, if you could just summarize your, I mean, your outlook for FY '20, like how would it pan out, how do we expect it to pan out? Like the finished goods prices might contract and raw material prices contract so margins could improve, something like that, on that length.

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [118]

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So margins can improve from other areas. Our feeling is that prices will definitely come down, that's for sure. But the good thing is the raw materials are also coming down. What I am hoping for, that some of the positives that, say, that is going to happen this year is one is going to be the CS processors we now have on that one plant. So when that is there, then it will definitely give us some profit and also some revenues. Second would be our Dyestuff utilization should increase. Third is Sener Boya, which we've acquired a stake in Turkey, which is already an operational company. It has good revenues already. That should also start contributing to our revenues and our profit margin. Also, Thionyl Chloride is now rolling, operating at around 50%. We already finally started selling in the market. So we should get the margins there also. And our power plant has also started last year. There also, we have -- we were able to identify some of the practices that we were doing, and we are in the process of improving it. So some improvement should come from there also.

So overall, through our finished goods prices, we -- they are precedent right now. We may go through some lower cycle also for some more months. It can happen. But because of our integration, because of our recent projects that we have done, basically the recent integration of plants that we've added, that should definitely help us to somewhat maintain our recent EBITDA numbers. And if things get back to normal there, we can definitely do our routine 18% to 20% EBITDA.

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Operator [119]

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As there are no further questions, I now hand the conference over to Mayur Padhya for closing comments.

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Mayur Bachubhai Padhya, Bodal Chemicals Limited - CFO [120]

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Thank you very much for participating. Thank you.

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Operator [121]

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Thank you. On behalf of SBICAP Securities, we conclude this conference. Thank you for joining us, and you may now disconnect your lines.