Finolex Industries (NSE:FINPIPE) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Finolex Industries Limited Q2 FY twenty twenty six twenty seven Conference Call. As a reminder, all participant lines will be in a listen only mode, and there'll be an opportunity for you to ask questions after the presentation concludes. I now hand the conference over to Mr. Arun Bed from ICICI Securities. Thank you, and over to you. Good afternoon, ladies and gentlemen. On behalf of ICI Securities, I welcome you all to the Q2 FY twenty seven post sales conference call of Finolex Industries. From the management side, we have mister Odiqarwal, managing director and mister Chandan Verma, CFO. Now I I hand over the call to Pudip for your opening remarks, and then the floor will open for Q and A. Over to you, Udit.

0:49 Thank you, Arun. Good afternoon, ladies and gentlemen. Welcome to Finolex Industries' earnings call for the second quarter and the half year ended 09/30/2026. We are pleased to have you with us today. May I remind everyone that this call may contain certain forward looking statements based on management's current expectations and the actual results may differ. All figures that we discuss on the call are on a stand alone basis unless we explicitly mention otherwise. Coming to the quarter two FY twenty seventeen performance, the results are available with you. As you might have seen that during the quarter, we had a strong volume recovery with profitability remaining more or less flat due to higher material costs.

1:39 During the quarter, sales volume grew 28% over year on year basis to 83,407 metric tons as channel destocking eased and the PVC prices also kind of stabilized during the quarter. Revenue from the operations grew 28%, which is in line with the volume, and it stood at INR $10.94 crores, mainly driven by the volume growth. PBT, as we said, the profitability remained flattish. PBT during the quarter was at INR 153 crores as against INR 158 crores of quarter two by 2026. Coming to the full half year performance of the current year. For the first half, the strong second quarter is largely made up for the weak first quarter, but not to the full extent.

2:32 And we see that the volume during the first half is 4% lower on a year on year basis. During the first half of FY twenty twenty seven, our volume was 151,106 metric tons as against 157,465 metric tons of the previous years, but this is primarily due to the quarter one lower numbers, which we had. The revenue from operations grew during the first half 4% year on year to $19.78 crores, okay. And this all is primarily due to the quarter two volume growth and also slightly better realizations during the quarter two period. For the full year, our profit before tax PBT rose 6% year on year to INR 300 crores as compared to INR $2.84 crores in the previous year first half.

3:28 On the liquidity front, that continues to remain strong, and we have a net free cash flow of about 2,584 crores as on 09/30/2026. I want to take you through also some of the recent developments, which are taking place in respect to the PVC and the PVC pipes market. One of the several reasons that we saw that the price stabilization at a slightly better level was the introduction of the minimum import price for suspension grade PVC resin. However, the geopolitical developments, as we all are aware, particularly geopolitical developments in West Asia, they continue to remain uncertain.

4:17 And with respect to the raw material supply and also with respect to the PVC supply, but we continue to, as always, monitor them very closely. But it's not only us, it is the industry industry wise topic. On the business environment side, I think we also acquired a lot of disruption in quarter one, driven by the volatility in the prices to a much more stable in quarter two. As far as the PVC pricing is concerned, although there has been an increase, but the volatility was less. And we see that the quarter two volume recovery is happening across the organized industry that was largely driven by restocking by the channel.

5:10 Traditionally, if you look at it, quarter two is normally a softer quarter for us for PVC pipes as agriculture demand moderates due to the monsoon months. However, our volume growth this quarter reflects a recovery from the price less destocking, which happened in the quarter one. If I try to look into the future a little bit, the recovery as we expected last quarter has begun to show in volume in our current months. What is also is that the second half of this year looks like January to May, which is the pre monsoon window, which is seasonally our strongest period in terms of volumes.

5:56 And we enter into the second half of the year with a more normalized channel inventory and a steadier pricing environment. We remain in the midst of all this situation, we remain cautiously optimistic and endeavor will remain focused on our maintaining sustainable margin together with the volume growth over time. Thank you for your continued trust and support. We now open the floor for question and answers. And with me also here is Mr. Chandan Verma, our CFO, to try and answer all the questions. Hi. Good afternoon to all the participants for the new two earning call at the Finolex Industries Limited. We invite all the questions from the participants. You can go ahead, please.

6:48 Thank you. We will now begin the question and answer session. Participants who wish to ask a question may press star and one on your touch tone telephone. If you wish to remove yourself from the question queue, you may press star and 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. We have the first question from the line of Sinha from. Please go ahead. Hi, sir. Good evening, and thanks a lot for the opportunity. Just couple of questions from my end. While your volume growth, you said, you know, was led by also restocking a lot, what would be the reason for the reason for margin suppression? While I understand that, you know, you also said that this was not a every quarter, like, this is quite the same, so it would not be product mix is what I guess.

7:41 But why, you know, margins are under pressure despite your, you know, raw material prices increasing and maybe some amount of intake gain? Could you give some color on that? Yeah. Yeah. Good afternoon. So, Neha, as you rightly pointed out, we do... We have registered a volume growth of 28%. We have seen a slight pressure on the margin side. Now what how it happens on the Q1? When you see at the entry of the Q1, when you see the commodity prices has started to go out, go up at the higher direction. At that point in time, we are having, of course, certain inventory at the lower side. That got it right during the Q1, but over the period in time, when we procured our inventory during Q1 and which has got effective consumed during Q2, that is related to the pressure on the margin side. So basically, it's a time lag.

8:30 It happened, as you know, price gets impact immediately, realized gets impact immediately, but there's a lag in the raw material price. So that is the effect we have seen during Q2. Just an extension on the same question. What is the kind of a lag impact that we are seeing in terms of passing on the wrong tool prices? So be it easier on CPUC? So as you know,, the sales price immediately gets affected in the market immediately basis. However, as the margin remained always volatile in terms of our point in booking of raw material prices and when it gets consumed. So our industry works in a different direction where realization will be... Gets impacted immediately. However, the raw material depends upon at what price, at what point in time we are booked into.

9:24 Sure. Understood. And could you just give me your PVC, EDC, and VCM prices for the quarter? Yeah. On an average average basis, basis, the PVC has has been been $7.07 $70.71 $1, and and PVC, PVC, EDC, EDC, and VCM, VCM, $1.04 $55 on international market. Okay. Thanks, sir, and all the best. Thank you. We have the next question from the line of from Dollar Capital. Please go ahead. Hi, sir. Thank you for the opportunity. A couple of things, sir. So first, in the one h, we have a 4% volume or the growth that we have explained that the Q1 loss got, you know, kind of a setup by the two q volume and that channel destocking.

10:17 So given this, and then the last year, q four also was was a significant volume kind of a 1 lakh 2,000 odd ton. So in this scenario, how do we see the volume for full year? See, this year I mean, last year was a different scenario. This year, it is a little bit different scenario. But yes, traditionally, the quarter four is a very strong quarter. Yes. And as I said in the opening remarks, also as we move into the year, we also see this January to May period of a relatively higher demand for us. So we'll see how it plays out. There are too many uncertainties right now in the marketplace.

11:05 On a geopolitical front, what is happening there and you know how the crude prices have been moving up and down so much. So we'll see, but as I said, our endeavor is always a profitable growth and we will continue to drive in that direction. But is it fair given or maybe you can help us with how the October till now Malapar now we are already in November, so October how we have seen. So is it fair to say we can still see a kind of a degrowth, maybe of whatever one or 2% for full year FY 'twenty seven? That's a fair estimate? I I would say October was a relatively good month as compared to the previous years, okay?

11:51 And so if I look at it from today's perspective, if I could take into account the October performance also, then year on year, and slightly on the greener side on a percentage basis, volume growth, yes. And so that is the positive thing. But at the same time, we would not like to raise expectations, yes. So let's see how this quarter goes, but October was good month for sure. Okay. And now in terms of the margin so far, 1H, we are at 11.7%. And previously, we were kind of looking at sub-fifteen level. So how... And because... Why I'm asking is because in terms of the realization also, if you look at from q four onwards, one q two q, it is kind of of, like, this marginal growth versus the kind of the PVC prices, which has increased.

12:47 So how do we see the 3Q in terms of the at price level, then on coming to the margin level for next the second half and then ultimately the full year, how one can look at the margin? So as far as the PVC pricing is concerned, the minimum import price is still mid of January or third week of January. So as far as the full quarter, quarter three is concerned, we don't see massive price erosion. In the PVC prices, if we look at the domestic demand supply, that's also slightly constrained. So at this moment, as we stand today, I don't see any reason that there should be a huge downside on the PVC prices, okay?

13:35 And probably Chandan can comment a little bit more on the margin situation because he has better clarity on the cost. Yes. So Sawan, just to give you reiterate our earlier commitment, where we have seen roughly around 14, INR 15 per kg of EBITDA margin for a year as the whole we have estimated. And we are continuing to remain our target remains same, and we are on track. So on a year full year basis, we are expecting EBITDA margin roughly around INR 15 per kg on an average. Okay. 15 rupees per kg. But in terms of the percentage, if we have to look because that also Percentage depends on on It depends on the premium. It depends on the prices of the resin and the cost also. So more or less, 14% to 15%, 15% around kind of EBITDA margin here as a whole we are expecting. Six months ended roughly around, we are having a 12.5 something kind of thing, but here as a whole, 12.5% to 1314% somewhere around we'll be ending up.

14:36 Should be. Okay. And then just a data point in terms of the CPVC's there, fitting fare, and for q two? So q two 8% generally remain the CPVC volume share in our overall volume, and fitting share roughly goes around 7% around. Okay. And agree, sir? Agree. So agree, nonagree, we are at the 50... Sixty forty around. Agree and nonagree, sixty forty for the q two. Okay. So fitting, sir, has came off from 11% in q one to 7% in q two. Overall this is I'm talking about on a six.

15:23 Yeah. Yeah. Okay. I... I'm specifically asking for the q two. So all the numbers that you said right now, that is for one f or q two? So sixty forty, eighty eighty to non degree is a q two, and 8% CPVC volume is for the q two. Okay. And the fitting Total pipe and fitting this year for the q two is 12% on a overall... Total volume. 12%. Okay. Okay. Last is, sir, about one on on the same in terms of the case, I understand the the same for last many, many quarters. We we keep on saying the same thing in terms of this close to 2,584 crore. How we will be... Because we are not even doing a much CapEx also. This one h also, we have done just the $36.37 odd crore.

16:16 So if you can reiterate when when we will be going for a CapEx or expansion plans or or in terms of the, I understand it is a board decision, but still the huge cash is is there. So something will be will be there in terms of rewarding to the shareholders or the... Our stand will remain the same. The board will decide, and therefore maybe next couple of quarters will remain the same answer. Go ahead. Yes, sir. So definitely, overall decision will come to the board... Come from the board. But having said that, in terms of your question regarding the CapEx, so increase here also, we have roughly planned for a CapEx of INR 150 odd crore. This include more or less routine CapEx. And as we have been talking about, this will be go for the further debottlenecking the process. So so that that we are on, so $1.54 plus or CapEx spending is pipeline during the current FY '27.

17:18 Okay. Okay. Got it. Thank you, sir. Thank you. Participants who wish to ask a question may press star and one on your touch tone telephone. We have the next question from the line of Nirav from GC. Please go ahead. Hello, sir. Is my voice audible, sir? Yep. Yes, Nirav. Yes. Can hear you. Sir, I have one question with regards to Outlook. Sir, what we are seeing is that there is a few shortage of water and alumina effect seems to be picking up, and our business is heavily dependent on agri. So in light of this scenario, do you see a scenario wherein demand getting impacted? Because part of are by by multiple state governments are are being are being giving... Are being given relief by state governments.

18:08 So situation on ground seems to be really very, very tough. In light of this scenario, how do you see the demand panning out in h two and especially for the agri related agri related portfolio? Thank you very much. No. Thanks, sir. I mean, your observation and your information is is there. I mean we all see this. We also see that the full impact of Alnino also has not been has come in as yet. It is expected that sometime in November onwards, we'll see the impact and the water availability and the situation which you talked about. Particularly in some states is is a little difficult. Yeah. So it has two effects. Yeah. Sorry.

18:53 It has two effects. One is that the... On the demand side, wherein you say that you move water from a... To the place where it is available to the place where it is needed. So there would be an increased demand of the pipe. But at the same time, there is also a little constraint on the farmer income. However, if we look at some of the other agri input indicators, for example, if we look at the tractor new tractor bookings, which is up like 14%, 15% in major agri area. If you look at the two wheeler bookings, the rural two wheeler bookings, that's also a little bit on the higher side as compared to the previous years.

19:44 So that also gives a little bit of positive indicator to us that, yes, while there is a constraint in the market with respect to monsoon effects, but should not have such a big impact from a cash availability point of view. And that's why I was saying in the earlier responding to the earlier question also, not giving you very firm indicator because all these volatility, although on the raw material side, but also on the demand supply, there's a little bit of uncertainty how everything will pan out. So yes, the situation is like this. So we'll keep in watch on this. Thank you very much. Thank you. Participants who wish to ask a question may press star and one on your touch tone telephone.

20:34 We have the next question from the line of Ritesh Shah from Investec India. Please go ahead. Hi, sir. Thanks for the opportunity. Sir, would it be possible for you to highlight what is our piping and capacity right now? And where do we see this number, say, end of this year and end of next year? So we are... Ritesh, our total capacity stands out to be 5 lakh 20,000. This include pipe and fitting also. So fitting would be how much out of this 5.2? Fitting would be roughly around 95,000 roughly. And how much is outsourced besides this? Out of the out of open fitting requirement, only smaller portion comes out from our our, you know, capacity. This comes from the...

21:23 So our third party sources. So roughly, for 3,000 is the total generally we produce in a year. So out of... In house, it roughly comes out to be in house, and you want to separate from the subcon and in house both or what? Yes, sir. I just want to bifurcate it. So 5.2 is piping. How much is fitting? You indicated 95. 95 is captive? $5.20 include pipe and fitting both, number one. Correct. It includes fitting as well. So out of that Correct. Fitting capacity comes out to be 40 kt. House. Kt also, the thing comes out to be 60,000 or something.

22:09 Around 60,000. Okay. This helps. And, sir, how should we look at this number over next two years? How will this increase? Yeah. At this moment, see, we are having a sufficient headroom to complete because we have a current currently, we are at the 67%, 68% utilization level. Right? So we have sufficient headroom for the current year and next year both. So we are comfortably we are good good with the current capacity. Right. And, sir, you indicated $1.50 crores of CapEx for FY '27. What exactly is the end use? So, Rizvi, see, as you know, we we always keep talking our earlier call also, but there are a lot of debottlenecking exercises going on the company, where the low capacity extruder will keep moving and it will get replaced with the higher capacity extruder.

23:01 So this additional capacity, if anything will come out to be, it will definitely come out after the next year towards the end of the next year. And rest of the... Out of one fifty, rest of the... Is the routine CapEx that we are... Maintenance CapEx is there. Sure. Sir, my second question is on balance sheet. Is there any monetization which is still remaining with respect to land, or is it all done? No. No. So monetization in terms of the... We have the land. We the land parcel. We have the land parcel. In Mutter, we have the land parcel in. So monetization, whatever required to be done, which was the ideal plant in Q4 that is done in the two years back. At this moment, we don't have any plan to get into this monetization of the existing land capacity.

23:49 Perfect. And, sir, last question, you indicated margins at 14 to 15%. This is... I would presume it's for the full year. Yeah. Is that assumption? Right? Yeah. Yeah. Full year. Full year. Yep. So... Yeah. So then what is it that will drive the margins in the second half? Like, are we taking a call on the product mix or PVC pricing, inventory gains? How should we better appreciate this? Yeah. So, Vijay, actually, you'll see you'll see this year also our mix of every non weekly has gone up. Right? So currently, the current quarter, we are at the 60% level of average nonagree. As the ratio of nonagree will go in our overall portfolio and product mix, the realization the per kg margin and overall margin will go up. So that is how we are looking into the scenario at this moment. Perfect. And, sir, just last question.

24:36 Are we witnessing any tailwinds with respect to Nalsigil? The reason I ask is government has already disbursed 7,700 crores. It's it's not a big number, but it's a it's a decent enough number. So are we directly or indirectly benefiting benefiting out of it, or do we see any trickle that we will see benefits possibly, say, three months, six months out? See, if you look at the total outlay which government had and out of it, what has been released is a is a smaller sum. Okay? Yes. Yeah. So it also depends on the... How much... How the states are doing. So... And and you know that we do not have any direct business. We do all our business through channel partners.

25:27 Okay? So it is difficult for us to say what is the direct impact of this on our business. But certainly, if there is more funds which are released by the state and the central governments, that will have an overall impact on the on the demand. Sure. Thank you so much. All the very best. I'll join back the queue. Thank you. Thank you for your questions. Thank you. Participants who wish to ask a question may press star and one on your touch tone telephone. As there are no further questions from the participants, I now hand the conference over to the management for closing comments. Alright. We have one question from mister Desha from Investec. Please go ahead.

26:28 Yeah. Hi, sir. Thanks for the opportunity. Sir, how should we look at the cash on books by when will we decide on what to do of the cash? Hi. Thanks for the question. As we've been saying in our previous calls also, I mean, is a decision which is a board decision and board will decide when and in what form and shape we want to deal with the cash available. Right now, there is no such decision. This whatever we have continues to remain invested into different instruments, and that's our position as of now. No timeline is yet decided. Board will decide that. You. Sure. Thank you so much. I'm sorry to your question.

27:19 Yeah. Thank you. We have a next question from the line of from Systematics Group. Please go ahead. Good afternoon, sir. Wanted to check our utilization levels in both the the pipe and fitting and the resin business. If we look at it overall, I would say the pipes... The overall utilization is about closer to 70%, 68, I think, just to be very precise, yeah, during the quarter. Resin is would be slightly different because you know that we've got two lines for resin production, one is on EDC and one is on VCM. So VCM line traditionally remains nonoperational due to our non availability of raw material during monsoon, which is not a situation this year only, but this is the structural it happens year on year. It is structural in nature. So, otherwise, our utilization for the resin has been full.

28:23 But it is primarily more on the on the pipes and fitting size... Side that we have a different utilizations depending on the plant location and this, but overall, about 68% as I mentioned. Got it. And any thoughts on expanding the network in regions where we are within the opportunity life, but we are slower in both regions. So that our utilization of the plant Yes. Definitely. We can agree. Sometimes, there's a constraint for in this direction to increase market penetration and to have a better representation in underrepresented areas or underserved areas from the Finolex brand perspective. So that's a constraint effort.

29:11 But that's not calculating in the high utilization. I mean, that needs to be if that that is the case, if we are in the I mean, I would also like to say that year on year, also, there is a capacity addition, which is happening, which I mean, you're alluding to a little earlier, that year on year, we keep doing the debottlenecking of this. And that's why we are in a situation like this. And here also, you have to look at the capacity slightly differently. There is always there is an imprint capacity and you produce pipes and fittings of different forms and shapes and sizes. Right? So when you do change over, there is also a capacity loss. Got it. Okay. And what is the internal? And operational aspects into the perspective.

30:00 Yeah. Right. Got it. Got it. And what's the yield we are getting on the investment which we are currently holding? Tell me. The fees on the investment. Roughly around 7.5 to 8% on our portfolio level. Okay. Got it. Has there been appreciation of the land value which we were holding since we disposed of them? Can we have a picture on that front? And what is being used as there at at this point of time? Is there any transaction which is happening on the related party funds in other group entities of the group on that land part? Actually, we do not get into the need of retail prior transaction.

30:45 Other than the non go with the directors, you know, there is no separate such cancel related prior transaction which can impact the operation of the company. No. Why why I was asking so is since we are not monetizing that cash in the sense you... Either through inorganic growth opportunities or reward to shareholders, I mean, that cash has been lying on books since long. So what was the need at that point of time to part of with that lease for land and not keep it with us for better the monetization going ahead? Definitely. Sorry. So we actually received a three year old event that you are trying trying to bring on the current quarter. So No. I'm trying to bring the I'm trying to bring the No. We have has not been utilized. Same time, definitely, the board has given the direction to go ahead with the monetization. That's why the reason has been taken. Three years, four years back. Correct.

31:37 Correct. So But since then, sir, board has not taken any decision on the funds which is lying on the balance sheet, and investor or analysts have been frequently asking, and you have been, I mean, the board has been mentioning that we will take a call at the same time. Some clarity should be given on the utilization of the fund. Either if there is no such need, why not reward this back to the shareholder? I mean, the promoter will also get rewarded. The minority will also get rewarded Is the limited point you can plan to make? No. Certainly, I mean, board has to take a call on this. And as you rightly said that every some of the shareholders has to be rewarded. But if you look at our dividends also, we have been paying also very healthy dividends. Shareholders are also getting rewarded that way. But yes, point taken on your I mean, I... Internally, there should be some deadline within seven months or one year, we should pick on something.

32:33 Either growth opportunity or the reward is shareholder. Special reward. Not the regular reward, special reward. Thank you. Yeah. Thank you. Thank you. We have the next question from the line of Asim from TAM Capital. Please go ahead. Yeah. Hi. So just one question. So, of course, I'm just looking at your volume growth and revenue growth. Both are around 27 odd percent y o y for q two. Now this... The growth are... The... Both the growth numbers are mirroring each other despite the fact that PVC prices also would be up around 15 to 20%, at least on a y o y basis, I look at it then... At a rupee level. Yet the... So I think the revenue growth should have been higher if volume growth is 27, 28%.

33:24 So what could explain that? Why are they two at the same level? Is there a mixed thing that you want to call out, is there something else? Ashin, so as you rightly pointed out, the wins are currently in spite of the increase in the PVC prices, our revenue more or less becoming flat. Two reason of it. First of all, your point... You pointed out product mix differently. This is one of the scenario where in our case, the agreed share of every growth is higher than the nonexistent during the current Q2. Number one, and there are a lot of schemes and discount we run-in the market. So definitely, the increase in the PVC prices always get compensated with the scheme and discount that we run-in the market. So it's the impact of both the things. It's the one with the product mix and channel schemes and marketing initiatives that we take.

34:16 Would the incentives thing be a larger explanation for this? Because I would assume that at least the agri, nonagri mix, Roughly $60.40 was the case even in q two FY twenty six, if I'm not mistaken. No. No. No. It was a How much was it? It was $56.44. Pretty much around the same level. Right? So that's why I was thinking that is the... So what would have dragged the realization? Or would it be the incentives thing where you would have focused more on volumes? Would that be a real reason? No. So, Ashim, so one is that the overall volume we're facing more or less in line with the last year's corresponding quarter of the... Q two of the last year. However, as we we have been using the... In absolute term and in terms of the product mix, the things always goes into the into different direction, as you see in terms of 3% system, number one. Number two, yes, there are some which can be known to be competitiveness to be the to gain the market competitiveness, we have to develop schemes and that is there in the Q2 as well, which was there in line with the Q1 also. It was there in Q1 and both the Q2 as well.

35:32 Would this also have had an impact at your EBITDA margin level or would that be mostly your high cost inventory reason that you gave earlier? Largely. Because your margins are down 400 bps. Yeah. So largely, on a full year basis, a half year basis, our EBITDA margin in line with the last year for six months. So it's largely on account of raw material prices largely. Actually, I was just looking at the q two q two level, but... I I get the point. Okay. Thanks from... That's what... That's it from my side. Thank you. We have the next question from the line of from Investec India. Please go ahead. Yeah. Hi, sir. A quick one. So DGTR has recommended CVD on PVC from China. How are you reading into this?

36:21 Oh, this is... DGTR has recommended now Ministry of Finance to comment on it. Okay? But I think if... We do not know what would be the final decision, but if it happens, it's probably would replace the MIP. Sir, MIP, as per you, how much is it? $84.85 rupees per kg? No. MIPE is MIPE is that it is CIF price, which is $767 per metric ton. So any imports Yes. So on are not allowed. And the CBD, which you are talking about, is only, I think, only on the China region. One particular country. Correct.

37:06 Yeah. And MIPE is for all. Respect That's right. Okay. But is there any probability of MIPE being reinstated? Like, is the industry case strong enough? I don't know if... Let's say, the case is always strong enough at this moment. Yeah. But it is up to the government to decide whether they want to have two tariff barriers. One is MIP and the other is CBD, at least on some country. Sure. And, sir, would it be possible for you to give spot pricing for EDC ethylene and BCM? It's a... Pricing have been doing a little bit of Yo Yo over the past few few weeks. At this moment, it seems to be pretty much on the higher side. Okay?

38:05 So for example, EDC could be depending on the region and the availability, could be anywhere between $450 to $500 probably. VCM would be like $900 to $950 Italy more like $1,200 $11.50 dollars to $1,200 depending on the availability, the day you book it, how you are able to get the shipments. Because of this, all this situation, geopolitical, the shipping rates have really changed dramatically over time. And so what is also very surprising is that as far as India is concerned, US looks more competitive despite long distance. Sure. That's right. And, sir, will our average procurement cost, say, for q three be lower than spot?

38:54 Like, are we covered for the entire quarter? I would say more or less, yes. Which procurement cost will be lower than spot? No. We are covered for the for the quarter in terms of raw material requirements. But it will be below the spot pricing. Right? I don't know. Tell me you have a better handle on the number. Yeah. In line of the... In in... This will be in line with the... Our current inventory pricing, Finolex. Sir, I'm asking the average procurement for for the ships that we would have already unloaded, the pricing will be lower than what you indicated on spot basis for ADC pin and VCM. Right?

39:44 No. That's what I'm saying. That will be in line with our existing inventory cost, not the lower one, more or less in line with the existing inventory price that we are having. So we have not seen much spike in the price at this moment. Whatever the price that we booked in the... During our last, it is in line with it. Slightly increasing, definitely, yes, not slightly increasing, but more or less in line. Perfect. This is very helpful. Thank you so much, sir. Thank you. Thank you. Participants who wish to ask a question may press star and one on your touch tone telephone. We have the next question from the line of Pankaj from. Please go ahead. Yes. So thanks for taking my question. Sir, in terms of supply chain, raw material supply chain, so has changed due to the Pankaj, your voice is not very clear. Can you repeat the question, please?

40:38 Pankaj, if you come closer to the microphone, let me help. Yeah. That's Pankaj, can you hear us? So in terms of supply chain, from where are we posting your... Has that changed due to this meeting to war? If you can help us with that. Yeah. Of course. I mean, the situation in Middle East has impacted supply chain for all petrochemical crude oil, petrochemicals and downstream. So we are also also impacted, but the teams have done excellent work in reestablishing the supply chain from other parts so that our production is not impacted. And what is our total domestic sourcing?

41:24 Sorry. Total? Domestic sourcing, sir, of. I didn't quite get the question. Hello. What... So what is our domestic sourcing in terms of ADC or VCM? ADC, VCM is 100% imported into India. Oh, okay. Okay. Thank you. You. We have the next question from the line of Asim from DAM Capital. Please go ahead. Yeah. I just missed on the PVC, VCM spread for q two. How much was the number? Pardon? PVC, VDC spread q two for $55. VCM, sir, not EDC.

42:12 $171. That's... $1.71 is the spread between TV and VCM. Okay. Yeah. Based on based on ICIS international prices as they quote Southeast Asia. Okay. But that is the average for q two. Right? Not the current? Average. Average. Average for q two. Yeah. Okay. Okay. Thanks. That's it from my side. Thank you. Participants who wish to ask a question may press star and one on your touch tone telephone. Participants who wish to ask a question may press star and one on your touch tone telephone. As we have no further questions, I would now like to hand the conference over to the management for closing comments.

43:13 Thank you all for participating in this and taking interest in the company's numbers. I look forward to your continued interest in our company and continue to invest. I look forward to also coming back to all of you with our quarter three results. Thank you very much for participation. Thank you all for your continued interest in the Finolex Industries Limited. We'll be looking forward to you meeting in near term next quarter as well. Thank you so much. Thank you. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.