Ester Industries (NSE:ESTER) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Q1 FY 'twenty seven Earnings Conference Call of Ester Industries Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to mister Amit Sharma from AdFactors PR. Thank you and over to you sir. Thank you, Sagar. Good afternoon everybody and a very warm welcome to you all. Thank you everyone for participating in the earnings call of Ester Industries Limited for the first quarter ended 06/30/2026.

0:47 On the call today, we have Mr. Vaibhav Jha, CEO Mr. Pradeep Rosteggi, Executive Director, Corporate Affairs and Mr. Saurabh Agrawal, CFO of the company. The management will take us through the operational and financial performance for the quarter, following which we will open the forum for the question and answer session. Before we begin, please note that this conference call may contain forward looking statements about the company, which are based on the beliefs, opinions and expectations of the company as of the date of this call. The statements are not a guarantee for future performance and involve risks and uncertainties that are difficult to predict. I now request Mr. Vahav Jha to take us through the company's performance.

1:35 Thank you and over to you sir. Thank you, Amit. Thank you everyone for joining us today. I will take you through the industry environment and key business developments during the quarter, following which Saurabh will walk you through the financial performance. I would first share with you a short perspective on the industry landscape before I move to company specific key updates. The operating environment for the BOPET film industry continued to improve during Q1 FY 'twenty seven. Global prices of BOPET have seen stability due to tighter trade flows, raw material shortage as well as increase in raw material and freight costs. At the same time, the disruptions and uncertainties caused by imposition of reciprocal and punitive trade tariffs by USA during Q2 and Q3 of FY twenty twenty six have largely moderated, subsequent to rejection of such trade tariffs by the Supreme Court of USA.

2:31 India now enjoys a favorable import tariff scenario for imports into U. S. This has resulted in regaining of lost market share in U. S. Between Q2 and Q4 of FY 'twenty six in this quarter. We continue to see strong structural tailwinds emerging from the circular economy. The implementation of plastic waste management rules and the increasing requirement for the PET and BOPET films, which stipulated post consumer recycled content are creating additional demand opportunities for ARPET and recycled content BOPET films. Amongst the various films and substrates used for the flexible packaging, BOPET film is the only food grade approved substrate and the only substrate which can have sufficient post consumer recycled content to help brands meet their sustainability targets.

3:24 Further, new capacity additions are projected to be moderate and evenly phased out given the volatile scenario experienced by the industry players during last two to three years. Overall, while industry cycles will continue to influence the business, we believe the combination of improving industry discipline, currency and international prices and growing demand for recycled content products provides a more favorable operating environment for the BOPET industry. Sustainable solutions are at the core of ESTER's strategic growth platform. The regulatory environment is becoming increasingly supportive of recycled materials. In India, recycled content requirements under the plastic waste management framework are stipulated to increase progressively.

4:11 For Ester, this creates an opportunity to participate across multiple points of the value chain. Ester has invested in creating recycled PET capacities of 30,000 tonnes per annum. This enables us to produce recycled PET for use as feedstock in the recycled content films. In addition, this gives us a platform to supply best in class bottle grade recycled PET to prestigious brands as well as textile grade and film grade recycled PET to various leading customers. We are also building capabilities to participate in higher value circular applications over time through Elite. Against this backdrop, Ester continues to strategically transform itself into manufacturer of specialty BOPET films and polymers. The consistently increasing volume and proportion of value added specialty products and strong business development pipeline of new products within specialty polymers showcase this key strategic focus.

5:10 Exploring new customers in new market in various other geographies continues to be highest priority. We continue to invest rapidly in R and D to innovate at a rapid pace and fast track our journey to specialty manufacturer. These strategies are aimed at improving realizations, enhancing the overall product mix and importantly, reducing earning volatility arising from the inherent cyclicity in the commodity BOPET film products caused by the demandsupply imbalances from time to time. Now moving on to the key business updates, starting with the Polyester Film segment. In this segment, we delivered a healthy improvement in the performance during the quarter.

5:57 Consolidated film volumes increased 2.7% year on year to INR 22,100 and twenty metric tonnes, while film segment revenue grew by approximately 38% to INR 399.5 crores. The significant difference between volume and revenue growth reflects the improvement in realizations and margins as well as the continued improvement in our product mix. Consolidated capacity utilization also improved to 84% compared with 82% in Q1 FY twenty twenty six, supported by the better market scenario. A particularly encouraging development was the continued growth in our vast films portfolio. VaaS volume increased 23% year on year to 6,368 metric tonnes in this quarter, and their contribution to total film volumes increased to approximately 29% from 24% a year ago.

6:55 We consider this shift in mix to be an important indicator of the progress we are making in the business. As the volume and proportion of VAS products increases, our ability to compete in increasingly is increasingly based on product performance, satisfying new application requirements and customer qualifications rather than being driven purely by price. Encouraged by the recent performance and positive outcomes of our strategic focus, we are targeting proportion of vast products at about 50% to 60% over next two to three years. We will, therefore, continue to invest in product development, customer approvals and capabilities to serve more specialized applications. Chip business revenue during the quarter was around INR 5 crores, driven by higher third party sales volume. In this quarter's performance, we saw significant improvement in realizations driven by growth in VAS sales as well as favorable industry dynamics.

7:54 Consolidated film revenue grew by approximately 38% year on year, while the segment delivered around 10% EBIT margin, supported by better throughput and a higher contribution from VAS products. Going forward, our focus will remain on maintaining price discipline, improving utilization and increasing the volume and proportion of VAS products. We believe this will help us improve the overall quality of earnings and build greater resilience in the film business through industry cycles. Now turning to Specialty Polymers. The segment reported consolidated sales volume of seven twenty five metric tonnes during the quarter compared with nine fifty four metric tonnes in Q1 FY twenty twenty six. Consolidated revenue stood at INR32.7 crores compared with INR48.1 crores in the corresponding quarter last year. While the overall volumes and revenue were lower due to demand pressure in one of our high margin specialty products, the profitability of business improved meaningfully with EBIT margin increasing from 31.7 to 45.3%.

9:01 This was primarily driven by a better product mix during the quarter. We continue to focus on optimizing the product mix and expanding the portfolio, while maintaining the healthy margin profile of this business. The growth in Specialty Polymers will be driven by increase in volumes with a mix of high margin specialties as well as mid margin value added products or VAP. The focus on VAP will help us improve operating leverage and cash flows, while also diversifying our business while the growth in high margin specialties will provide the profitability buoyancy. However, given the strength of our business development pipeline, we expect to recover the revenue growth in this business by the end of this financial year. We are targeting growth at a CAGR of 20% over next three to five years in the Specialty Polymers segment.

9:53 Coming to the Art Pet business, consolidated volumes increased 19% year on year to thirteen ninety four metric tonnes, while revenue grew 24% to INR 17.5 crore during the quarter. We continue to see ARPAT as an important part of our broader film strategy as well as an important sustainable solution that we offer to our customers at large. Coming to Ester Film Tech, we saw a meaningful improvement in the business during the quarter. Capacity utilization reached approximately 83%, the highest level achieved so far, while sales volume increased 22.7% year on year to 99,807 metric tons. More importantly, the business is now beginning to demonstrate the better operating leverage that comes with higher capacity utilization.

10:42 The improvement is being supported not only by higher throughput, but also by better production efficiency and a healthier product mix. As we continue to ramp up utilization and increase the contribution from VAS and recycled content products, we see Ester Film Tech becoming an increasingly relevant part of the consolidated business. Our focus will remain on continuing this ramp up, improving the mix and translating the improvement in operating performance into consistent cash generation. I would now like to touch upon Elite, our fifty-fifty joint venture with Loop Industries. We see Elite as strategically different from our existing recycling activities as the objective is to establish a chemical recycling platform for polyester textile waste and enable textile to textile recycling.

11:29 The project is progressing through the engineering phase. The FEED study has been completed by Tata Consulting Engineers and Toyo Engineering India has been appointed for detailed engineering. Land acquisition is also progressing and is expected to conclude within the next two months. The facility is targeted to become operational in CY twenty twenty eight and will use Loop's proprietary depolymerization technology to convert 100% textile waste streams into virgin quality monomers, which will then be polymerized into virgin quality polyester resin. An encouraging development for Elite has been early and regular customer validation. Following Nike's earlier commitment as an anchor customer, our JV partner Loop Industries has now secured a letter of intent from a leading global sports and athletic brand for the potential offtake of up to 15,000 metric ton per year of Loop Pet fiber grade resin annually under a multiyear commercial framework.

12:32 The resin will be supplied from the upcoming manufacturing facility in Gujarat to be operated by Elite, the fifty-fifty joint venture between Ester Industries and Loop Industries. With commitments from these marquee global brands, a substantial portion of the planned capacity is now covered with contracts and LOIs well ahead of commercial startup. We view this as an important validation of both the technology and the market opportunity and it reinforces the growing interest from global brands in circular textile to textile recycled polyester. We will continue to progress the project through the remaining qualification permits, approvals and execution stages in a disciplined manner. Looking ahead, our priorities remain clear. We will continue to focus on sustaining the improvement in film realizations and capacity utilization, increasing the volume and proportion of vast products and expanding the specialty polymers through new products, customers and geographies.

13:30 At the same time, we will continue to scale our ARPAT capabilities and integrate them more closely with BOPET film business while progressing elite in a disciplined manner towards its targeted commissioning in calendar year 2028. With that, I hand over to Saurabh to take you through the financial performance. Over to you, Saurabh. Thank you, Vaibhav, and good afternoon, everyone. Let me take you through the financial performance for the quarter, after which we will open the floor for questions. I will begin with the stand alone performance of Ester Industries. Stand alone total income for quarter one FY 'twenty seven increased 22% on year on year basis to INR 3 and 47.7 crores compared with INR 284.9 crores in quarter one FY twenty twenty six.

14:16 The improvement was primarily driven by the film segment where higher relations, better capacity utilization and an improved product mix supported the revenue growth. Stand alone EBITDA increased 25.2% on a year on year basis to INR 40 crores, with EBITDA margin improving to 11.5% from 11.2% in the corresponding quarter. Profit after tax increased 50.5% to INR 14.5 crores compared to INR 9.6 crores in quarter one FY twenty twenty six, resulting in an improvement in PAT margin from 3.4% to 4.2%. Overall, the stand alone business delivered improvement across revenue, operating profitability and the bottom line. Coming to EsterFimtech, our 100% subsidiary, the quarter marked a significant improvement in the financial performance of business. Sales volume increased 22.7% year on year to INR 9,807 metric tons, while the total income increased 62.7% to INR 159.6 crore.

15:18 EBITDA improved to INR 19.5 crore compared to with a loss of INR 2.7 crores in quarter one FY twenty twenty six, resulting in an EBITDA margin of 12.2. PAT also turned positive at INR 4.7 crores compared with a loss of INR 16.5 crores in the corresponding quarter last year. As Wabam mentioned earlier, capacity utilization in Vopet Film in the Ester Industries stood at 85%. Capacity utilization in Ester Film Tech reached approximately 83%, which is the highest level so far. This resulted in a consolidated capacity crisis standing at 84%. Coming to the consolidated performance of the company. Consolidated total income increased 27.4% year on year to 441.9 crores compared with INR 346.9 crores in quarter one FY twenty six.

16:09 Consolidated EBITDA increased 103.4% to INR 58.9 crores with EBITDA margin expanding to 13.3% from 88.3% in the corresponding quarter. Profit after tax turned positive at INR 18.6 crore compared with a loss of INR 7.2 crore in quarter one FY twenty six. PAT margin stood at 4.2%. The improvement in consolidated profitability was broad based with all businesses, including polyester chips, polyester film, specialty polymer, ARPAT contributing meaningfully to the operating profit. Through Polyester Film segment remained the principal contributor. Within the Film segment, consolidated revenue increased approximately 38% year on year to INR 3 and 99.4 crores, while segment EBIT increased significantly to INR 39.1 crore from INR 6.9 crore in quarter one FY twenty twenty six.

17:02 Consequently, EBIT margin improved to 9.8% from 2.4%. Film volumes increased 2.7% year on year to 22,120 metric tons, while asset volumes increased 19% to thirteen ninety four metric tons. Specialty Polymer SBU also continued to demonstrate the strength of its business model. While volumes and revenue were lower year on year, segment EBIT stood at INR 14.8 crores with EBIT margin improving significantly to 45.3% from 31.7%. This reflects the continued strength of Specialty Polymer business and its contribution to the overall quality of earnings. As on 06/30/2026, the gross total debt of the company was INR $7.22 crores and liquidity of INR $2.36 crores.

17:54 The company aims to gradually deleverage in the coming years by paring a debt on an overall basis. Overall, the company has demonstrated resilient operational progress with enhanced margin and profitability during the quarter and setting the stage for improved profitability in the coming quarters. This concludes our opening remarks. We can now commence the question and answer session. Thank you. Thank you very much. We will now begin with a question and answer session. Anyone who wishes to ask a question may press star and then 1 on your touch tone phone. If you wish to remove yourself from the question queue, you may press star and then 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

18:42 Again, to register for a question, you may press star and then one now. Your first question comes from the line of Shlop Patel with Zenflow Finance. Please go ahead. Hi. Am I audible? Yes. Yeah. Firstly, congratulations on good set of results. I just wanted to know that can we maintain similar run rate for the rest of three quarters? And were there any one off gains in this quarter? Yes. Thanks for that question, Shloop. So yes, as you must have seen in the financial statements, there is another income component.

19:32 Other than that, I think the industry structure is quite favorable to us on the BOPET film industry side. We are seeing very stable and reasonably priced global markets. We are seeing that there are enough opportunities to place volume profitably in India as well as across the world. And we are also seeing opportunities to be at a sustained higher volumes compared to our past quarters because of the current supply demand balance in the industry. So all these give us confidence that we should have sustainable good earnings going forward, not only for the next three quarters, but I would go on to say for next six to eight quarters.

20:24 Okay. That helps. And another question, just wanted to know about our goal for next two to three years. As you said that now the cyclicality has moved away and the industry is improving now. And once you mentioned that our with our existing facilities, we can generate some INR 2,000 to INR 2,000 of revenue with our business segments. And just wanted to understand that which segments will drive these revenues and how will margins come up in next two to three years as our product mix from value that products will increase a lot and also our existing capacities will get utilized. Yeah. So it... You have answered the quest... Question in your question itself. So this increase in the revenue will be driven by multiple factors. So one is the price itself.

21:13 Like I said, that we are expecting that the global prices to hold at a higher level than what we have seen in the last two, three years. So that itself is going to lead to improvement in revenue. Other than that, capacity utilization is going to improve not only in films, but also in specialty polymers going forward as well as ARPET. Third, the as the share of specialty products increase in our product mix, these specialty products are usually much higher priced than the commodity products. So as the proportion increases, it will automatically lead to increase in the revenue because of the increase in the high priced sales that we would be doing.

22:08 The fourth factor which is playing out is that as we march towards operational excellence, we are able to run the plants more efficiently and are able to derive more tonnage out of the same asset class that we have. So even that is going to lead to better production and better sales volume. And all of these put together are going to result in increasingly improved top line. Okay. So is it fair to assume that in next two to three years, we can achieve that target of 2,000 crores to 2,200 crores? Yeah. I think we are steadily marching towards that, and we should definitely be hitting there in next two to three years.

22:54 Okay. Thanks. I'll get back to the queue. Thank you. Participants to ask a question, you may press star and one now. Your next question comes from the line of Saransh Gupta with Swan Investments. Please go ahead. Thank you for the opportunity, sir. I hope I'm audible. Yes, Saransh. Yeah. Congratulations on a decent set of quarters. Sir, I have few questions. First of all, I just wanted a ground reality on the China anti involution policy that they have implemented. Like, have the imports declined? And is that leading is that benefiting us in price goals? Okay. So let me address this question.

23:40 So see, in general, what has happened is that the global price situation has improved simply because the trade flows are restricted right now, right? And what we are seeing is that this set of factors which are playing are going to sustain. So multiple factors are leading to stability in the prices that we are seeing right now globally and also in India. In India, specifically, if you see, there has been hardly any capacity addition in last couple of years. The capacity addition, I would say, has lagged the demand growth. And we see this trend lasting for next two to three years.

24:27 So especially in the local market, we see the demand supply balance being strong. And similarly, in global market, we see enough opportunity for Indian manufacturers to place their volumes profitably. Understood, sir. Sir, and what were the spreads last quarter? So spreads last quarter were in the range of 28 to 30. When I say spread, I mean VA, value add over raw material for 12 micron film. Understood. So for the base BOPET film of 12 micron, the spreads would be around INR 7 to 8 for last quarter. No, I take 28 to INR 30 for 12 micron corona commodity film.

25:18 And sir, we have charged a higher premium of around 20 to 25 rupees on the value added. Right? Yes. So value add products range from, you know, range from 25 rupees to much, much higher levels because it's a mix. So the more specialized the product, the more value add we are able to get out of it. So there are offline quoted products which command higher premium, much higher than the normal value added products. Understood, sir. So sir, with this China anti involution policy, will it be fair to assume that these spreads can sustain for the year end? See, like I told you that we are very positive that for next six to eight quarters, the global and domestic supply demand balance is going to hold.

26:14 And I think that is going to give us some respite and is going to keep the margin steady. Understood, sir. So sir, I just wanted to understand, like currently, value added contribution in this quarter was 29%, which has been highest since the implementation. So what can the contribution be by the year end? Is it gonna be in the similar levels? Like, are aiming for 50 to 60 in the next two, three years. So... But I just wanted to understand, like, with exports being opened up for US as well, so what can be the contribution by the year end? See, we are seeing up to 35% contribution of VAS product out of our own up to the overall portfolio by the quarter end, I mean, in the exact quarter.

27:04 Understood, sir. Sir, just one more question. Like in this quarter, our RFET volumes declined sequentially. So I just wanted to understand like what led to that decline. See, this is a temporary, I would say, slowdown because what you are seeing is external sales. And the external sales had to take a hit because the demand internal demand for ARPET in our packaging films increased. But we see that the situation should change in in this the quarter towards in September of this quarter, and this trend will be more visible in the quarter of October to December, wherein you will see a much larger ARPAT volumes being sold externally.

27:57 Understood. Sir, just one last question, then I'll come back in the queue. Sir, with an Elite project being operational in the calendar year '28 and by in the next two months, we'll have the land buy with us. So I just wanted to understand that there are other competitors as well who are getting into the same segment of textile to textile recycling, and they have already set up the capacity. So will we be a bit late, or will there be a competition by the time we are ready with the capacity? See, first of all, the market for this type of product is very large, and the demand is very high. So the space is there for many, many players. Number two, the technology is fundamentally different.

28:42 And what we will be able to do is we will be able to process low cost feedstock, which cannot be processed by our competitor technologies. And that is the differentiator for us and which is going to bring in the required economies and is going to create a much larger appeal for our customers. So just to expand on this factor a little bit more, the competitor technologies usually look for textile waste, which do not... Which which are close to 100% polyester.

29:28 And there is a difficulty in processing when there is a blend along with polyester. And if you look at any practical textile waste, it is always a blend of polyester, whereas our technology can manage any kind of blend with any kind of color, pigment, dyes and give out virgin like virgin like quality. Also, the majority of this technology is far, far higher than our competing technologies in most cases. You know, Loop has been working on this technology for a long period of time, for more than ten years. They have scaled up to a small scale plant in Canada, where all the practical textile waste has been processed, all possible combination has been checked.

30:27 And not only by us as a joint venture partner, but also by these customers who are going ahead and giving large volume contracts to us one point five years ahead of the planned commissioning. So the majority definitely is at a different scale. And therefore, the I would say, the production confidence in terms of being able to process the waste and hitting the rated capacity is much higher in our case. And the economics are much more I would say we are more confident about economics in our case than the competing technologies.

31:12 And there is another point. We are targeting to park all our volumes coming out from the Elite project outside of India. We are not sure or we are not aware of the marketing strategy of the competitor. But for us, the entire production is going to be exported. Understood, sir. So it will just to close it up, so it will be a good assumption that we'll also have a better premium to the market at that moment when we are available with the rest. Absolutely. Thank you, sir. I'll join back back again. All the best. Thank you. The next question comes from the line of Raj Shah with Fident AMC. Please go ahead.

31:59 Oh, hey. Thank you for the opportunity. So I wanted to understand from a two to three year view, how do you see the ARPAT volumes? And now we have that... We have a 28,010 capacity. Over the next two to three years, do we plan to reach optimal utilization of and revenues of INR 200 crores INR 400 crores? And what can be the margins of those business? See, I think let me clarify about our part. So the major logic of investing in ARPAT for us was in house consumption. However, we saw a demand for high quality ARPAT in the market, which was very which was not being fulfilled by many of the existing players. And therefore, we thought of utilizing that opportunity to make bottle grade ARPAT and other film and textile grade ARPAT.

32:54 But that is, to be honest, more of a secondary objective for us. Our objective is to derive value with our in house consumption. Having said that, I think the right measure of knowing how we are doing with respect to ARPET would be the value generated by ARPET through external as well as internal utilization external sales as well as internal utilization. So let me tell you that giving you approximate numbers right now, we are producing any much larger volumes than what we were producing last year, and we are extremely confident that we will hit more than 100% of the rated capacity by the exit quarter of this financial year.

33:43 So a lot of it won't be visible in the financial statement because it would be used internally, but a large part will be observed in the external sales. But like I said, the logic for us is the internal consumption as much as the external sales. Understood. And on specialty polymers, we saw margins up close to 1213% on a year on year basis. So any these margins are just remember like we gave because the value added share is increasing? Or what could be the fully added kind of margins for the five gs, assuming I mean the private scale will done? Yeah. See, right now, the share of VAP is at a much smaller scale because we have built a pipeline and this pipeline takes And some time to therefore, the influence of mid margin VAP is not too apparent. But you are right, as we go forward, we are going to see some moderation of the percentage margins, right? Because the mid margin is going to pull down the high specialty margins a little bit in percentage terms.

34:57 But because of the improving operating leverage, we are going to see better financials in terms of EBITDA or EBIT because we are essentially just improving the capacity utilization and improving the operating leverage. But I think we should focus more on the absolute top line growth as well as absolute EBITDA growth and EBIT growth. Understood. And lastly, in terms of debt repayment, so what is the targeted debt repayment for this year? And for the Elite also, would we require any additional debt? So this year, the debt repayment target is around 100 crores.

35:44 And as far as Elite is concerned, as you are aware that it's a separate project other than ESTER. It's a joint venture between Loop Indus... Loop Indices Canada and ESTER. So there is going to be additional debt, which will be raised in the JV company, not in Ester balance sheet. And it will not be consolidated with Ester because it's a fifty-fifty JV. Correct. Correct. Understood. Understood. And in Exofta JV, there is no major CapEx for FY 'twenty three. Sorry. Can you repeat the question? Ex of the JV, there is no major CapEx for FY twenty seven in the stand alone and volume? No. No. No. So apart from our sustenance and maintenance CapEx, we are not turning any major CapEx. Understood. Okay. Thank you so much.

36:31 Thank you. Your next question comes from the line of Charcit Malu with Genuity Capital. Please go ahead. Hi, sir. Thanks a lot for the. Sir, can you give me the split of other income, like, the the 10 crores? So the other income basically comprises of our income from our investments, and and as you know that we have got a total cash available with us in plus of 200 crores. That is number one. Second, the other income also comprises of the favorable gains on the foreign exchange, which we have got, which was a negative last... In the last quarter. Okay. Like and just if you can give the guidance for FY 'twenty seven and FY 'twenty, that is revenue EBITDA impact.

37:20 Can you repeat the question? I'm sorry, the line is a little disturbed. Can you give the guidance for FY 'twenty seven and FY 'twenty eight of revenue EBITDA impact? So I think what we can say is that we are looking at sustainable growth in revenues and our profitability. But at this point in time, we would just hold back from giving very firm guidance on the specific revenue and EBITDA numbers. Okay. Okay. Thank you., does that answer all your questions? Yeah. Yeah. That's it. Thank you. Thank you.

38:07 We remind all the participants, if you wish to register for a question, you may press star and then 1. Your next question comes from the line of with Kapoor Company. Please go ahead. Yeah., sir.. Yeah. Yeah. Yes, sir. Yeah. Sir, firstly, coming to the other income part,, you mentioned this is out of the treasury operation. So can you elaborate more since we are also on a net of... I mean, how do these income got generated? And what is the ForEx exchange benefit included into it? Yes. So the other income, Saket, if you remember, in the last quarter, there was a pressure on the other income in terms of negative foreign exchange loss as well as we also had some negative return on our mutual fund investments in the last quarter. And in this quarter, we have a positive return on the investment as well as a a favorable gain on a foreign exchange because of which the other income is looking on a higher side.

39:11 But again, this is a onetime gain on a sustainable basis. You're not going to see this high number on a quarter on quarter basis. Yes. Yes. Yes. Can you give the split of the same? How much was the foreign exchange contribution and and the treasury? And since we are having debt, what is our book size currently for mutual funds we have invested into? The total book size for mutual funds is around 60 crores, and the total FD that we have right now is more than INR 160 crores. If you remember, yeah. I will I will explain you. So if you remember, Takaji, we have already raised money for the purpose of equity contribution in our joint venture. Right? So there was share warrant which the company has raised, and we have already got the money in our bank account.

40:03 And so the primary driver for our other income is mainly because of the interest on that piece. Okay. Okay. Do you have the split, sir? How much was from the treasury and and the interest... The FD interest? I mean, I just wanted 9.8 split between Forex, Treasury, and ForEx and the treasury part. Yeah. Yeah. So if you want, I can give you a overall split. So on treasury, it was around 3 crores, and interest on FD and other investments is around 2 and 3.5 crores. And then there's certain other income... The foreign exchange gain is around one CR, and then there are balance other income. Okay. And, sir, we are saying that we have 100 crore repayment repayment for this year. So what is the current net debt number and what will be the closing balance for the year? Expected closing balance? Yes.

41:00 So our gross debt is 720 crore, which is going to come down by INR 100 crores by the end of the year. We will have a gross debt of INR $6.20 crores. And the current cash and cash balance, which we have right now, INR $2.35 crores. Okay. So net debt number, you can... We we can keep this $2.30 will be remaining or... So a part of this... So as I told you, $1.40 crores out of this... Before the JV. So as and when we invest in the JV, this liquidity will go away. So around 100 crores is what will the sustainable liquidity that we will have. Okay. Correct. And sir, you were mentioning that further capacity addition I think so. Lastly, the one of your competitors in the BOPP segment added BOPP slim capacity last year or I think for this year itself. So taking into account the current dynamics, there is no further lines that are coming up on the current financial year. That is what the understanding should be?

42:13 Yes. So Sakiri, what I had said was that there has been very few capacity additions and the capacity additions have lagged the demand growth. So what I mean is demand growth has been more than the capacity addition. So two lines have come up in last one point five years, but the growth has been far more than the capacity that they brought on Teams. We are expecting another two to three lines coming up in next one point five, two years. But again, if you look net net, the supply demand balance is going to only tighten because there is a very strong Bofet demand growth happening in India, and we are seeing some green shoots in Europe also, mainly because of the plastic waste management rules in India, which is leading to the brand switching over from other substrate to BOPET to meet their sustainability targets. And a similar trend has very early to say, but we are seeing some green shoots of something similar happening in Europe as well.

43:20 So that is why the demand growth in India, at least, is at a much higher level than the capacity addition. So that, do you have the number of for the entire industry for geometrically what is the installed capacity for BOPET and the current utilization level for the industry? The total capacity should be around 1,350,000 tonnes. And the operating rate is well in around, let's say, 85% or so because a lot of it is also exported out of India. And right now, the way trade flows are lined up, Indian manufacturers are going to see enough opportunity to keep sustained levels of profitable exports.

44:10 Okay. Now sir, coming to the Specialty Polymers part, correctly, yes, you mentioned that our revenue guidance is 20% to 25% for this year and or you are committing on the margin side? I missed your comment. Sorry. Sorry. Go ahead, Saketji. Yes. I will do it. Yes. So Saketji, what we were saying was that we are seeing a 20% CAGR over next three to five years. We are not seeing it for this year, mainly because we are seeing some demand pressure on one of our high specialty products. But having looked at the other pipeline products that we have and the way market is set up, we are extremely confident that we should be gaining the lost demand in terms of sales of other products by the exit quarter of this year. And then going forward, we should be hitting 20% plus CAGR.

45:20 So sir, just to understand for that, on a top line of INR 180 crore for the last financial year, we did INR $32.33 crores for the first quarter, and then you are saying that there is some demand issue going going there. So what is in the likelihood, this is going to be a flat year then for the specialty polymers with normalized margins going ahead? Or because these margins are also, I think, because of some product mix advantage that we got these extra nominal margins of 4040% and above. So if you would just explain to us where are we heading? Right. Right. Sure. So see, what we are seeing is that we are going to be at least at a flat or, get a single digit growth in this financial year because a lot of our pipeline is going to mature in the second half of the year, especially towards the last quarter.

46:14 So we will see improvement in top line as we go through the year, especially as we go into deep into the second half of the year. But going into the next financial year, we are going to see good CAGR revenue growth and profitability growth. And like I mentioned that our focus is on improving the operating leverage here. So while you might see some normalization in EBIT percentage, EBITDA percentage, but absolute number of EBITDA and EBIT should start growing significantly starting from next financial year. Okay. Just to model it, the last year to the margin, especially for the market, we will be able to match those numbers or to grow or we can expect some growth there, right? So last year Yes. Was So it would be either we will be yeah. So what we are seeing is that we should be able to match and probably clock some single digit growth by the time we finish the year.

47:23 In margins also? Yes. Because VAP VAP products have larger volume, though the margin might be lower, but volumes are larger. Right, sir. Sir, and Sorry to interrupt, sir. We request you to return. Yeah. Yeah. Yeah, sir. I would Thank you. Your next question comes from the line of Amit Kumar with Determined Investment. Please go ahead. Yeah. Thank you so much, sir. Can you hear me? Yes. Yes. Yeah. Okay. My first question is, you know, with respect to, you know, raw material sourcing. So there are two parts to it. One is that, you know, how are you looking at the availability scenario right now?

48:10 And second sort of related question is that a few projects on PPA, MEG, energy sort of coming in India as well, IOC, RIL, few projects in the pipeline, slightly delayed what I need to understand, but something is coming, some capacity is coming in India itself this year. So have you tied up with any of these players, any of this capacity just to sort of localize your raw material in future and maybe a little bit protection from the kind of volatility that have seen in the past. So we have long term contracts, and we are sourcing all our requirement of PT and MEG locally.

48:57 Okay. So we have long term contract with the the suppliers of PT and ET, which ensures that we generally don't run short of the requirement that we have. As far as the new capacities are concerned, nothing is going to be up and running before December of this year. And the annual context that we have, they are January to December. As in when the...... This year you can maybe... Sorry. Yeah. Yeah. This is what I'm coming to. So we are already in discussion with Gail, which is the likely to start by end of this calendar. And the Indian oil will take some more time to start. Reliance is still some time away. On the MEG, there is no new capacity coming up, but all our requirement is getting met from the existing supply because polystyrene is not a large consumer of PT and MEG, unlike the PET resin or yarn.

49:51 So we have our raw material tied up, which is getting reflected in the operations of the first quarter, where we did not lose any production because of the availability issues. All right. Understood, sir. So my second question is just if you can sort of give us an update on the PWM case management rules. What is the current sort of situation? And so our sort of understanding is that, you know, although the government has sort of implemented those rules, but it's not clear, you know, whether there is, you know, complete, you know, acceptability of those rules, you know, at the industry level. I mean, there is a little bit of flexibility which is available on, you know, how much of ARTIC you need to sort of use now and how much you can sort of do and you can sort of catch up later or stuff like that. So can you just sort of explain what is the current sort of status of the implementation of the rules basically in terms of what is there on paper and what is the situation on the ground, please?

50:59 Yes, sure. See, we need to differentiate on two aspects of the question that you are asking. One is the usage of ARPAT in the laminates due to PWMR. And second is what the brands are doing to be better prepared for stricter enforcement of this PWMR. So the recycled content in the films, you are right that the enforcement is yet to be done. But we work with leading brands who are not going to be noncompliant with these rules, whether the government is strict with the enforcement or not. And this is where the major pull for the recycled PET based film is coming from.

51:48 Also, all brands, big and small, are gradually switching, not gradually, but rather rapidly switching from other substrate to polyester film substrate so that they can keep the laminates ready. And in case there is a tighter scrutiny from the government and the compliance is enforced even more strictly, they can rapidly switch to ARPAT content based films, Right? So this is leading to increase in BOPET film demand much beyond what the usual growth that we used to see. So I hope I was able to give you a perspective on the question that you asked. Yes. Yes. Very much so. Thank you so much. Yeah. All right. Thanks.

52:36 Thank you. Your next question comes from the line of B. Surinder, an individual investor. Please go ahead. Hello. Good evening. Good evening. Thank you for my taking question. So my question is on RSAT capacity. Sir, what is our rated capacity? Our our rated capacity should be somewhere in the range of 28,000 tonnes. So, sir, what question is, what is the time line to achieve that? So see, like I explained that we are already running at a very high throughput. It is not very apparent in the financial reports because a lot of it is being used internally as part of as a raw material for our films, right? So but we should be going beyond the capacity utilization by the exit quarter of this financial year. So we should be producing more than the rated capacity. That's that's what we are seeing.

53:36 Sir, one more question is that Is there any backward integration for our Telangana plant? So right now, you can call the recycled PET extruder, which we have put there as backward integrated backward integration. But if you mean if we have EP unit, then we don't have anything localized there. But we are feeding Hyderabad from our in house capacity of raw materials in Khatima. So that way to that extent, majority of Hyderabad's raw material requirements are catered in house. So, one more question on our specialized polymer.

54:27 So, any new invention of that? So yes, so I think this year also we filed a few patents on new products. So invention is a way of life for us in this specialty polymer. The challenge is on the gestation period, which is very, very high for such novel inventions. But we continue to invest very heavily in R and D, and we continue to see lot of patent worthy invention and many trade secrets which we don't patent because we don't want the competitors to know about those invention. But innovation is quite evident in this business. Sir, one last question. So we have this is regarding even sun control films and pain protection films, which is now very coming in the market.

55:22 Is there any plan to manufacture or something like that? So we are looking at various products, and from time to time, we take those decisions. And right now, we don't have any news on this front for you. Okay. Thank you very much, sir. Thank you. The next question comes from the line of. Please go ahead. Yeah. Yeah. Thank you. Thank you, sir. What update? As you were mentioning that major major of the is being consumed internally that is the captive use. So, how are they how are these being accretive to our margins? If you if you can give some color of how these consumption leads to... For is there is a bit of story is there, but margin contribution from raw material market use See, the... Because we are making in house, we are able to capture the margins which we would have typically paid to an external supplier with, right? So to that extent, the margin is credited internally.

56:39 It is also most of the times and majority of the times cheaper than the virgin raw material. So that also gets accrued. You said, it's not what is the arbitrage from purchasing purchasing your raw material or chips from outside and using the iPad internally. Sir, we would like to avoid answering specific numbers. No issues there. Correct, sir. I got your point. Competition chip yoga. So for that... Sir. So for spread, you mentioned that commodity we made 28 to 30 rupees for quarter one. So currently, how are... What what is the outlook on this Brexit? Any color you can share?

57:27 Yes. So it is similar. It is holding, and we are seeing resilience in this kind of years in the in our commodity fields. The utilizations for... I'll just ask... Okay. You can only then again on the part two... Yeah. Yeah. Two two more questions are there for us. I apologize, sir, but we would be able to take this as a We are closing the phone. Due to time. That's that's correct, sir. Sir, eight point Sir, Sir, no point update update schedule and succession planning work transfer of shares any comment or you can take the feedback from him.

58:24 And what I was asking earlier, we'll interrupt the level quarter quarter two increment That was my question, which I was asking at that time. Yes. So quarter two from a capacity utilization is looking better than the previous quarter. From Q1? Yes, from Q1. And you want to answer the next Sagir, just in terms of rating, the review is already in progress, and we expect that the rating review will be completed by the end of this month. And coming to the succession and ownership, both are two different things. Both are two different days. We already manage professionally, and what he has transferred to his son is that in their internal family matter.

59:19 Thank you and all the best to the team, sir. Thank you. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to Mr. Ray Bhav Cha for closing comments. Over to you, sir. I would like to thank all our stakeholders, partners and team members for their continued support, and thank you all for participating in this call. We are pleased with the strong start to FY 'twenty seven, and we are quite optimistic that we will do well during the year and see even better performance during succeeding quarters. For further queries, please reach out to our IR partners at faster. Thank you. Thank you. Thank you. Thank you all the members of the management. On behalf of ESTER Industries, that concludes this conference.

1:00:06 Thank you everyone for joining us, and you may now disconnect your lines. Thank you.