Finolex Industries (NSE:FINPIPE) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Finolex Industries Limited q one FY twenty seven earnings conference call hosted by ICICI Securities 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. I now hand the conference over to Mr. Arun Bait from ICICI Securities. Thank you, and over to you, sir. Thank you, Tanya. On behalf of ICICI Securities, I welcome you all the Q1 FY 'twenty seven post results conference call of Finolex Industries.

0:45 From the management side, we have Mr. Udit Agarwal, our Managing Director and Mr. Chandan Vohima, CFO. Now I hand the call over to Udit. Post which, we'll open the floor to the question and answer. Thank you. Thank you, Arun, and good afternoon, ladies and gentlemen. Welcome to Finolex Industries Earnings Call for Quarter one FY twenty six, twenty twenty seven. We all are very pleased to have you here. I remind everybody that this call may contain certain forward looking statements based on management's current expectations. Actual results may differ. I want to begin by saying that the quarter one of this current financial year was marked by volatility in polymer prices, which became the dominant macro factor for the industry during the quarter.

1:35 Average PVC prices higher year on year at about US8.75 dollars per metric ton in the quarter as compared to about US707 dollars per metric ton average according to the ISIS reports, largely carrying forward the elevated levels seen in the quarter four of FY twenty twenty six as well. However, prices show a sharp intra quarter correction, which triggered a channel destocking and impacted volumes even during what is typically seasonally strong pre monsoon quarter for us. Two regulatory developments, which I would like to also bring to everybody's attention is that the withdrawal of the customs duty exemption on PVC resin prices, which happened during the mid of July and the imposition of the minimum import price for the PVC resin.

2:34 These two developments should help and support some stability in the PVC prices as we go forward. And I think this should also help with the channel inventories, and we look forward to having somewhat improved volume and business momentum over the coming quarters, okay? As we all know that PVC demand in India follows a well established seasonal pattern. Demand peaks in the pre monsoon period, January to May period is the farmers in the agriculture segment prepare for the tariff seasons. And then it starts to moderate a little bit during quarter two, quarter three.

3:20 And then we also again see the impact coming up and back in again in quarter end of quarter two, quarter three because of the rubbish season coming in. With this, I would also like to give a little bit comment about the as we look into the rest of the year, I mean, we are going to remain optimistic, however, with a caution about recovery of the volumes and realization. As the inventories normalize, polymer prices stabilize, headed by the current two developments, which I talked about, the recent customs duty and MIP interventions. We believe that the structural demand drivers continue to remain in place and intact and will continue to underpin the medium term confidence.

4:14 This year, we are also celebrating forty five years of Finolex Pipes and Industries. We remain equally committed to our brand, our distribution partners and the communities which we serve. Thank you for your continued trust and support. I will pass on the floor to Mr. Chandan Verma, who will talk about the numbers on the quarter one FY 'twenty seven performance, and then we will open the floor to question and answers. Over to you, Chandan. Hi. Good afternoon, everyone. So as you know, the number already we have published in our investor presentation and uploaded on the site. Though I want to give you a brief highlight on the numbers, what we have. So overall, sales volume declined by 27% from the corresponding quarter of the last year.

5:01 Total volume, we have registered around 68,000 metric ton during the Q1 FY 'twenty seven. Though we have seen a decline in the revenue by 27%, the overall decline in revenue is moderately moderated by around 15% only. And our total revenue for the Q1 is $8.84 crore compared to INR 143 crore the same quarter of the last year. We have seen a significant and healthy jump in EBITDA by 14% and EBITDA margin improved from 9% to 12%. Current quarter EBITDA stood at INR 107 crore, whereas the last quarter of the same year same quarter of the last year, it was INR 94 crore. PBT is currently there at INR 148 crore and PAT is around INR 107 crore.

5:47 We have a strong liquidity as we continue. We are having INR 2 crore of cash in hand, which we will continue to have in our balance sheet over the present time. The floor is now open for the question. We'll invite question one by one, and we'll address that as soon as possible. Thank you very much. We will now begin the question and answer session. You may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

6:39 The first question is from the line of Shrivan Shah from Duluth Capital. Hi, sir. I have a couple of questions. But before that, couple of data points, so it will help us to ask the relevant questions. So for this quarter, what was the AgriSet, fitting set, CPVC set in the total volume? Current quarter, we have the AgriSet at 69% and fitting share in within the exit 5% and within non exit 25%. And overall, is 15% on a total volume is 11%. Okay. And CPVC share is 7.5%?

7:27 CPVC share for the current quarter is around 7%, yes. Okay. Got it. So now given... I I understand the volume of significant degrowth is is there, which we have seen across the companies who have reported results of Finolex and Supreme also. But in terms of the realization front, our q o q jump is just a 1% versus both the companies who reported... They reported a 79% kind of a q o q jump in in the realization. So just wanted to understand why our realization was not on a a basis or a jump.

8:19 Okay. But on our Q1, Q1 basis, if we have seen our horizon per kg has gone up by 15% with the same quarter of the same year. And our years are also in the same range. So I think we are well within the range of the realization per kg. We do not see off from our other peers. So whoever the data is in the public domain. Okay. No. I'm I'm talking about the... On on on the q o q front particularly because for q o q, the realization is is broadly, if I if I do the math of the the volume, 1.1% Q o Q improvement and then the realization in this quarter versus... I was saying that the other two players who have reported numbers there, it was significantly higher. So I understand the volatility, but in the in the April, there was a there was a a downtick in that. But given the... Maybe the March where we have seen the significant prices up and maybe the pass on would be happening with maybe a ten days or ten days lag. So that may be the reason why the other players were able to do kind of so the improvement, but we haven't. So just wanted to understand, was there any specific reason on that front?

9:37 You're talking about the... For for the entire quarter or March, QF, only? For Q1 versus Q4. Q1 versus Q4. So Q1 versus Q4, definitely. You have seen see, Q4 is the price is a year is the average is a quarter for the average of the quarter, where we have seen the unprecedented increase in the prices of PVC. That has resulted in the unprecedented realization high. But as we move into Q1, as we end up particularly in the month of April, there was a sharp decline in the PVC prices. And the PVC prices have gone, if I need to quote a number, it has gone from 96 to 92, then 82. This is the reason that the prices have gone down per kg. So that is how the realization has been moving from the quarter on quarter one the last year and from the prior year. So it's more about the equal realization within the industry, plus there are quite quite of incentive and discount also here in the sector when we compute our landed price realization net realization per CV. That is how things will work upon.

10:49 However, from the Q1 to quarter on quarter, if you see, from the same quarter of the last year, we are fairly within the range, the range bound that other public domain number we can see. Okay. So now two things. So on the volume and then the now on the realization, and obviously, that will lead to kind of margin also. So first, on the volume, have you started seeing the kind of channel level, the inventory? Because in last fifteen odd days, we have seen a twelve, thirteen rupees per kg price hike in the in the PVC because of MIPE and import duty withdrawal. So have you started seeing the growth on any particular in the July and maybe in the June also, have you ever seen that kind of a growth? Now for full year, how are we looking at on the volume front?

11:46 And realization also given the twelve, thirteen hike, which has happened in last fifteen, twenty days, can we see a soft Q o Q jump in realization in Q2? Yes. Certainly, Shivan, there has been an impact in the market because of the factors which you talked about and also the destocking in the channel. So all these have an impact both on the volume and the revenue on the realization side. And we will see how does it play out over the course of the year. But for now, yes, the minimum floor is set for the PVC price because of the MIP. And so we should see a little better quarter two in terms of these realizations, yes. And also in terms of volume, as you rightly said, post MIPE, the volume has started to pick up. So we have seen a quite good uptick in the volume in the month of July as well.

12:45 So so far full year, how now we can look at the volume for our size as a full year? No. So full year, see, Sawan, at this moment, it's too early to say anything because previous industry is surrounded by a lot of uncertainty and volatility. So at this moment, whatever the position we have given during our Q4, the account call, we will continue to say. We will see how the year progresses because it's only the Q1 that we have completed. Let's see how the year progresses, then we'll give any commentary on the full year numbers. And at margin level also, any kind of a guidance that we want to give? No, no, we'll continue with our same last quarter's margin, the anticipation that we have given. So 15% kind of a number that we have said for full year.

13:33 We said some 15%. So 15% around somewhere we will continue to say that if something if everything goes well, then we'll see how the number will look like throughout the year. But it's too early to say anything because that is the volatility also, I mean, global geopolitical situation is still fluctuating. And any inventory loss in Q1? So see, there are inventory losses and inventory gain and loss definitely would be there, but it's true not to report it at this moment. Whatever the gain and loss that is there, that will be utilized over the period of Q1, Q1, Q2 over the period in time. The next question is from the line of Praneeth from SJ Investments.

14:22 Sir, I just wanted one question in terms of volume degrowth. I understand that the market is down and everything, but we have, I think, degrown substantially compared to our peers in the market. Just trying to understand what exactly happened. Sure. I mean, as you know, our dominance or our largest presence in the angry segment, which was more affected than the other, which is the dominant or non angry segment, as you call it. So that's the primary reason what we see it, yes, as part of the reason for lower volumes for us other than the channel, which we talked about in the beginning of the call. Understood, sir. And in terms of expansion, I understand that right now market is off and everything. Do we have any idea of in terms of expanding capacity? Do we have any plan in terms of increasing our plans?

15:17 Yes, yes. So the capacity planning is always done on a long term basis, big to long term basis. So capacity or the CapEx plans do not get impacted by this short term macro macroeconomic environment for us. All of it comes with respect to CapEx and capacity expansions remain in place. No, sir. But so at this point of time, do we have any greenfield or brownfield things we want to do? Because I understand it here right now with that probably plans, we can only cater to largely that green. Our mix is also mostly focused that way. In terms of reducing reliance, are we doing anything in terms of more material like putting plans closer to urban locations or something like that? Yes. So we are expanding capacity, and we are also augmenting capacity via debottlenecking.

16:06 So as we have said in our previous calls also, the capital outlay continues to remain around INR 125 crores to 200 crores range, and that remains intact. Got it, sir. So do we see structurally anything affecting us because on the case on the ground level, it's been noted that Finolex has not been that aggressive compared to other peers. So what do you have to say about it? Because there has been many people who have been saying that on the ground at least. So at this moment, our capacity, see, we have the headroom to grow, right? At the moment, we have the total installed capacity of five twenty million and our last year volume was $333,000,000 only. So still, we have the headroom to grow at a healthy rate of 10% to 12%. So let's the one volume let's our installed capacity get exhausted first Because yes, and apart from that also, Mr. Agarwal has just pointed out, there is a continuous process going on in our organization with respect to debottlenecking, where we remove our old lower capacity extruder and keep adding our higher capacity extruder. So in a way, within the same periphery, the few capacity we keep adding every year rather than announcing a bit in terms of greenfield and brownfield expansion.

17:25 And still, as I have mentioned, we still have the headroom to grow at the early, 10%, 12% over the at least 2028, next to one year, one point five years. Correct. So I understand that headroom to grow. It's just that Adi, because the last few years and like whatever, there's been some at least distress in terms of the Agri segment also. I'm just trying to understand, is there potential that we can go we are actually meaningfully looking for some other segment? Because I know you already have plans in beyond Agri itself, but is it working out is my question. So other sector because the non Agri is a wide area where we are looking into, but not in the other adjacent sector. We are definitely not at the moment looking for adjacent sector. Got it, sir. Understood.

18:10 That's it from my side. So just sorry, one final question. Does the JGM, do we expect any substantial revenue growth from JGM two point zero from September, they expect some substantial rollout? So how does the company see it? See, JJM two point zero for the current financial year, government has announced a layout of INR 67,000 somewhere for past year. Second point is how is the realization, how is the distribution of this. I think in JJM too, they also have a different mechanism of distributing the copper. And as you would know that all of our business is through channels.

18:56 So all of our channel partners participate in this. And so we do not have a direct major or direct correlation of the GGM impact or any other for that matter, the other infrastructure related is on to our whole volume. Yes. Because as I said, all the sales are through channel. But yes, as the money gets distributed from the government funds, that will certainly have an overall impact on the demand. But in terms of allocation, is it in terms of the share quantum of value, is it higher than JTM 1.0 for JTM 2.0 for piping, at least for the segments we cater to? I think on an overall basis, it is not higher than GGM-one.

19:49 Okay. So in terms of value also? Yes, in terms of the value I'm talking about. I think I don't have to remember the GGM one number on the top of my head, but I know that GGM two is about 67,000 crores, and it is lower than GGM one. For piping, I'm more specific to piping. That is the overall number. Right? So piping, do we have any specific insights? No. I don't think I can add anything more to than what I have already said. Got it. Understood. Thank you, sir. That's it for me, sir. Thank you. Before we take the next question, we would like to remind the participants that you may press star and one to ask a question.

20:40 The next question is from the line of Neha Talreja from Nuwama. Please go ahead. Hi. Good evening, sir, and thanks a lot for the opportunities. Couple of questions from my end. Firstly, with respect to, again, your volume growth, which has been substantially lower than peers, not only this particular quarter, but even if I look at quarter four now, what are your thoughts on market share loss? Because if you look at the industry level numbers also, think industry would have de grown around 8% to 10 odd percent versus our de growth would be much higher in volume terms. So what are our thoughts here? How do we expect to gain back this market share?

21:29 Thanks, Sasnaya, for the question. I just want to bring to everybody that if we look at FY full year FY 2026 and the top five reporting companies who report their volumes, yes. And on that basis, our share for the full year FY 2022 was about for the full year FY 2026 was about 22%, okay? It's and when we look at market share, we should look at it over a longer period of time and not on a quarter to quarter basis. But we do not have the numbers from all the reporting companies for the quarter one. As yet, I think one or two are still to report their numbers. But I don't see any change in the market market share.

22:22 Yeah. Even for the quarter one as compared to full year FY '26. Okay. So let me just put it this way. If I look at top six companies and if I compare that data from FY '23 to '26, our market share used to be 27, which has come down now to about 22 odd percent. This is just top six, not even thinking about industry level growth and all. How would we say that, and what are plans to basically, you know, get back is all I'm trying to understand. So there is a constant push in terms of increasing penetration in the market, increasing our presence in the underrepresented areas. And that's what there's been a push from our side to increase to improve our volumes, yes.

23:15 There are few segments of the market where we are not present, yes, where other over some of our competitors are present. So that also have to take you have to also take into perspective when calculating the overall market shares. So I think to better understand the question and the underlying dynamics, we have to look at absolute like to like. Finolex Industries is a pure play PVC pipes and fittings producers, where other producers also have a larger share of other polymers into their portfolio. So that could also be a factor which will... Which might have an impact on the numbers the way they are looked at.

24:05 Understood. That was helpful. The second question is regarding PVC prices now that they are on upward trend. What sort of a volume rebound can we see? And more importantly, out of the total PVC price increase that you've seen in this last one month, how much of it is passed on to the end user at this point of time? So, Sneha, you have seen this upward trend as you rightly said in the prices of PVC in the market. And I think largely, hardly barring INR or 2, I think most of the thing has been passed on to the customer at this moment, talking on today's date. Understood. And how is the demand after the price increases that we've seen? Yes, yes. So demand is quite as I have mentioning, July was quite good volume pickup that we have seen. And since it's the sixth or seventh days of August only, but the numbers are looking in the right direction.

25:03 Understood. Understood. Thanks, team, and all the very best. Thank you. Thank you. The next question is from the line of Denali from Jefferies. Please go ahead. Sir, my first question is again on the volume. Actually, I understand that agri price is about 70% of your mix. So could you help us understand of the volume decline of 27%, how much was the decline in agri versus plumbing? So we have seen both the overall total volume de growth is 27%. So if you compare our volume from the Q1 of current year versus last year of the same quarter, the agri has declined by 27% and non agri is around 24%.

25:51 So both are in the same more or the same direction. Understand. Sir, it would be really helpful if you could help us understand the month by month very approximate volume trends. The reason I'm asking is because we saw maximum amount of volatility of PVC in April. So of the 27% for the quarter, how much was the degrowth in April, May and June? That would be very helpful. I don't I think Chandan will have the exact numbers, he will comment on that. But as you rightly said, April was the month where there was maximum volatility. And so April was the out of the three months, April was the lowest volume month.

26:39 And then we saw the pickup rate in the month of May, yes. And June was like a normal month, I would say, yes. I I would... Yes. So this is what the trend that we as Mr. Agarwal actually pointed out, April was quite a small performance in May and June fairly in the way that things would have been there. And July, as I mentioned, it's a quite good number. That's it. But Chandan, sir, do we have the numbers for April? At this moment, don't have. We can reach out separately, then we can discuss. At this moment, am not Andy is not with me immediately month on month. Generally, I report the number on a quarter on quarter basis. Sir, is it fair to assume that May and June was a growth and April was a degrowth or even May was a degrowth?

27:28 No. No. No. May was a growth. May was a growth. So May and June were growth and April was a degrowth. Yeah. All right. Hello? Yes. Ahead, please. Yes. Thank you. So my second question is, obviously, 27% volume decline means a lot of weak operating leverage. But our margins have surprised quite positively. I understand you talked about the better realizations. But having said that, the lower margin agri is still about 70% of our mix. So sir, how should we look at the margins? What in your view has supported? Is there any element of inventory gain that you would like to talk about?

28:17 So whatever the operating performance we have seen, this is largely the top line driven. So fair the cost wise as we have the more or less cost remain range bound, but the bottom line contribution largely came from the top line only. That's it. So with the top line, in the sense, the volume was quite weak. I'm just trying to understand what could have supported our 300 bps year on year margin improvement despite a weaker or rather a sharply sharp decline in volumes? You see, if the cost will remain very down and we will see realization good realization during the current quarter, so then the things will definitely get calculated down to the EBITDA level. Right, sir. So my next question is channel inventory.

29:05 As of now, what is the scenario of the channel inventory? Is it normal, below normal? And could you quantify that in a number of days, if possible, please? Last part is the third part of your question is the easiest part, so I'll take it first. It's very hard to quantify the number, how many days of inventory is there, okay? But yes, there's been quite a lot of stocking, which has happened in the month of July because the expectation was that the prices will go up and which have gone up, okay? I would say that, henceforth, the demand would be more like stable, okay, because we have a minimum floor set for the pricing. So the volatility part should get somewhat moderated, okay?

30:00 And if there is a stability, that also has a steady impact on the demand. The demand remains pretty stable and channel also do not want to stop too much more than what is required in the market. So, first, does it mean that the channel inventory is normal right now, almost normal? Yes. I mean, it's near normal, I would say. There is still some room. There is still some room, but would expect the situation continues to remain like this, we will be reaching that stage not too far away. Got it. And lastly, if you could help us with a few data points on PVC, EDC, BCM and the spread for Q1 this year, Q1 last year? And if possible, how it stands right now?

30:57 So PVC for the Q1 current year is $866 and PVC EDC spread is around $500.05 $01 And same for the last quarter of the first quarter of the last year, $6.98 was the PVC prices and spread was $522 And as latest current, so $7.95 is the PVC prices and the spread between the PVC, it is around $4.90. Understand. So for the spreads year on year have marginally gone down, right, $5.22 to $50.01? Yes. Alright. Alright, sir. That's it from my end. Thank you. Thank you so much, Finale. Thank you. The next question is from the line of Anuparak from Anandrati.

31:47 Please go ahead. Yeah. Hi, sir. So you said that the nonagri pipe volume declined by 24%, whereas... So what could be the reason for this steep decline? Because we see that the other pipe companies have not seen such kind of decline in Q1? So if you see in terms of the peer competitive, the non executive segment, also have more or less declined by the I think, around 18% to 20%, if I'm not wrong, in terms of totality. And the pricing, the volume demand generally is driven by two factors. One is the price and second is the demand anticipation in the market, price anticipation in the market.

32:38 So in the both scenario, as the thing has prices, we have seen the volatility for the agri and the same prices that holds good also for the non agri as well. So the prices, that's why we have seen the because of the in anticipation of the price volatility, volume of the non agri is also in the same direction as we have seen in the agri sector. Okay. And, sir, for PIPE, what was the price difference compared to Supreme for, say, two, three years back, and what is the difference now? See, it's really hard to define that in exact terms, but more or less, we are 10 to 12%. I think we are pricey in in in market. Just a ballpark number, not exact number.

33:33 And this is also driven by the commodity prices here. So so no player would be too far away from the market benchmarks, These are on the positive side or on the negative side. Sir, next on the margin guidance, you are giving us some 15% kind of a margin guidance. Whereas in an environment where the raising prices are falling and the volumes are also declining, we have delivered 12% kind of margin. So why are we underwriting on that front? So as we have just mentioned, we have continued to hold back whatever we have seen in the Q4. And Q1 is because we have seen too many volatility during the current quarter. So we'll remain our guidance remains same, what we have given the sub-fifteen kind of thing during our Q4 on call. So let's see how the quarter progresses over the period because there are a lot of geo vertical scenario and uncertainty that grounds our PVC industry.

34:45 So let's move for another quarter, then we'll see whether this need to be revised or not. At this moment, we are holding back whatever we are seeing. Thank you. Thank you. The next question is from the line of Rahul Shah from PL Capital. Please go ahead. Yeah. Hi, sir. Am I audible enough? Yeah. Yeah. Yeah. Just two questions from my end. So could you please provide some color on the gross margin performance? Like, if you see the sequentially, the PVC spread has got declined, yet our gross margin got expanded. So what are the factors driving the margin expansion?

35:32 So as I've just mentioned, so that if the prices of material will remain range bound and we'll see a growth in the realization, then definitely that will contribute to the gross margin. And on the second the second is if I had missed out some data points, can you please repeat the spread of PVC BCM for the quarter one FY twenty six and '27? For q one twenty six, the spread was PVC. This is five twenty two. And current quarter, q one FY twenty seven, the spread is 501. No, sir. I I just want PVC to VCM spread. PVC to VCM. Right? Okay. So q one last year, it was one sixty three, and currently, it's one twenty two, Q1 'twenty seven.

36:28 Okay, sir. Thanks. That's all from my side. Thanks. Thank you. The next question is from the line of Shrivan Shah from Dollar Capital. Please go ahead. Hi, sir. Sorry, sir, again, coming to the volume front. Sir, is it possible to maybe directionally quantify the July volume growth? Will it be a kind of a 15%, 20% kind of a number? So ultimately, what I'm trying to understand for full year, can we see a degrowth or not? That's the one I'm trying because if the as you've mentioned, the April was kind of a washout, May and June was a growth, and July, obviously, should be a better growth. If that's the case, then can can can we see a kind of 15% kind of a growth in Q2 itself so that we have some fair bit of understanding what kind of a volume for full year can we look at? Or maybe the other way is, can we see a flattish or a degrowth for the full year?

37:43 Shavan, I would say that July was the best month of this four months this year. And at this moment, as Chandan also earlier mentioned, it's very difficult to say that the full year guidance because volatility has been too much in the quarter one. And if we see that what is happening in quarter two, and then probably we would be in a better position to give a more realistic guidance for the full year. It's just past one quarter and which was also so much of uncertainty, volatility. I would not like to make some forecasts based on just one quarter one quarter developments.

38:37 But at least July, whatever the growth, will it be a kind of mid teens kind of a growth that we are witnessing, some understanding on that will help us. So July was a good number, but it is not quantified at this moment. As we are seeing, we have seen a good growth in the month of July, but let us not get into the quantification at this moment, Shabal. Okay. And in terms of though for last many times, we are saying that agree, nonagree, fifty fifty, we want to achieve. But looking at this this quarter, obviously, 69%, do we think, Marla, do we have internal any kind of a early number that we want to do at least 2%, 2334% kind of improvement from agreed to non agreed kind of a thing because I don't see anything broadly happening there.

39:39 So if you look at our last couple of years, so last year, our agri versus non agri was 63% and agri. The year before was 67%. So there's been a constant improvement in terms of share of our business in agri and non agri, so better portfolio balanced in terms of the market segments. And I think we'll continue to have that directional approach, which we have always been saying that we want to have a more balanced portfolio in the market segments which we operate in. So as we said in the case of market share also, and so I would say here also in the case of the segments in which we have every one quarter is not a representative number for a longer period of time.

40:34 True. But sir, given the kind of INR 2,636 crore cash, there also we are not even finalizing how we will be distribute to the shareholders. So at least, while even we are not finalizing in terms of the growth plan, maybe we are very less in terms of the CPVC, which is a kind of a high price, high margin. Why we are not even thinking to deploy some money there. So at least it will help us in terms of the growth and also better realization and better margin. See the investment into the business for the current portfolio organic is always there.

41:23 We'll continue we are continuing to invest into the business and we'll continue to invest into the business to support the growth across all sectors, whether it is UPVC or CPVC, yes. The second part of your question is which is this case that all these investments, the largest scale investments I'm talking about are guided by the Board. And the Board has to take a call when is the right time to do with this strong cash. And whether it is giving back to the shareholders, whether it is investing into large scale investments. So that's a constant discussion with the Board. And since we are guided by the Board in this matter, so as soon as there is some decision, I think we would be happy to announce.

42:20 Sir, that's the main thing because this cash is piling up. So we are not even saying that distribute the 100%, but even 500,700 or even 1,000 crore, if we can already, if we would have invested in, let's say, expansion of the CPVC plant there or the capacity, it would have helped. And even till now, even right now also, we are even not even planning to deploy or start. Otherwise, how, when we will can start seeing the kind of a overall because and that will ultimately help us to reduce our once the CPBCs there keep on rising. So unless we start how we will we'll receive 7%, 8% kind of a CPBC, that too in our volume is there. I don't know if I look at the entire industry and against that our CPBC volume, maybe even that would be a lesser than 5%.

43:25 So why not we are even thinking that to have at least 10%, 15%, 20% kind of a share in CPVC. For that, we need to expand the capacity for that. We need the money. That money is there, but we are not even thinking for last many years, it is already there. So just to bring one point, we have enough CPVC extrusion capacity. So for manufacturing of pipes, we have enough CPVC extrusion capacity to support the growth of CPVC segment, okay? So if that is the question, so that's what our response would be. If you also look at the overall share of CPVC in the entire PVC market, which is around 7%, 8%.

44:21 Our estimation is that about 7%, 8% is the total CPVC in the pipe segment. And this is the same share which we also have. So we are also moving along with the industry. The next question is from the line of Haina Voora from DAM Capital. Please go ahead. Yeah. Hi, sir. Thank you for the opportunity.

45:06 Just one question. We did speak a lot on the margins for this quarter. I assume you said the costs remain reasonable. Are you trying to say that we had some low cost inventory from the previous quarter, at least liquidated during this quarter and that's how the margins have come up? Two things we'll have to keep in mind, Haina, that we have the have the certain cost advantage in terms of our being a backward integrated there. So whereas the others, they are growing the raw materials actually from the market, the core raw material, we are a one step back where we procure the raw material for the manufacture resin. And that depends upon at what point in time we have to book our procurement at consignment.

45:52 So that's how the dynamic keeps playing in our case, which is quite different from the other player in the industry. So that is how the... We are getting certain question over there. Understood, sir. Okay, sir. That was my only question. Thank you. Thank you. You. The next follow-up question is from the line of Anuparak from Arangradi. Please go ahead. Yes, sir. So in the last call, we indicated about the VCM sourcing. So are we facing any issues in terms of availability or we were able to diversify those supply chain? The VCM availability continues to remain limited because of this issue in Middle East, okay?

46:45 And the one of the challenges with VCM is that it requires a specialized logistics. And so and with the feedstock also going to the in the Northeast Asia, where most of the material in India comes from is also constrained, okay? So overall availability of BCM is also limited. It's not as freely available as it was in the previous years, And this also has an impact on availability of BCM for us. The Middle East producers continue to remain under force majeure.

47:32 And wherever and where we had major contracts. And but to give also tell you that we were, in any case, not importing VCM during the four months from end of May till end of September because our jetty in Ratnagiri is a fair weather jetty. So during this monsoon period, we in any case, in a normal year also, we were not importing VCM. Okay. And the last question is what is the expected capacity utilization of the PVC plant for the remaining nine months of FY 'twenty seven?

48:20 PVC, we continue to produce in Ratnagiri. Yes. As you all would know, like we have two lines, one is based on EDC, one is based on VCM. So EDC line, we continue to produce without any interruption. Hello? Hello? Yeah. So from the... Yes, sir. So, sir, what about the VCM line? No. As I said, in VCM line, in any case, during the month of monsoons, we do not produce because we cannot import VCM during this time because of our jetty limitations.

49:10 And it's a difficult product to transport. So it's also not like that, that we can import it at any other port and bring it to refinery. So during these four months, in any year, we are not producing PVC with the VCM line. But sir, what about H2 FY 'twenty seven for VCM? Our efforts to secure the VCM supply chain are ongoing, and we expect that the situation in Middle East should also get better with all this, but situation remains also a little unpredictable there. It depends on the availability of VCM, competitive VCM, okay? Because one of the questions which was also asked is the spread of PVC, VCM.

50:02 So that's also a factor which we also have to keep into perspective. Thank you, sir. Thank you. The next question is from the line of Arun Ved from ICICI Securities. Please go ahead. I said just one clarification. Based on whatever you've seen in July and the trends in the near term, do you think for the first half of this financial year, will we at least be flat Y o Y? Arun, as we have just mentioned, Q July was a good number. So we are hopeful that flattish not flat, a slight plus Y o Y basis, we can expect. But still, the August and September, we need to see how the volume comes. But since the July only in anticipation of the July sorry, in as per the performance of July, if we continue to go that indefinitely, we can see such a plus number.

51:13 The next follow-up question is from the line of from Dollar Capital. Sir, last on the other income, this 75 odd so it was lower for the some there. So now this number is kind of sustainable. So on a full year basis, can we kind of look at INR 300 odd crore kind of other income? No, no, Nish, the one you have to keep in mind because this is purely driven by the bond yield scenario in the market. And these are the mark to market gain loss, not the realized gain loss. So as the bond yield is, we'll have the stable bond yield, then the number will remain in the range bound. But if we see a quite volatility in the bond yield because of a lot of factors in place while designing the yield of our portfolio.

52:11 So if the bond yield will remain in bound, then the number will definitely come. Otherwise, this is a simply purely a mark to market gain loss, not the exactly realized gain loss. Gainloss. As there are no further questions from the participants, I now hand the conference over to the management for closing comments. Thanks for the interesting discussions, yes. And a lot of questions around growth, around market shares. So I just would like to comment that our endeavor will remain focused and to be able to deliver sustained margins over time.

53:02 And with that, I would like to say thanks. Thanks to everybody for your continuous trust and support. Look forward to interacting with you all next quarter. Yes. Thank you so much to all of you for your continuous support and confidence in the Finolex industry. Thank you so much from my side as well. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.