Ganesha Ecosphere (NSE:GANECOS) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Ganesha Ecosphere Limited Q2 FY 'twenty seven Earnings Conference Call hosted by Antique Stock Broking. 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 Mr. Manish Mahavar from Antique Stock Broking. Thank you, and over to you, sir. Thank you, moderator. I am pleased to host today's earnings call of Ganesha Ecosphere. From the management, are Mr. Gupala Agrawal, CFO mister Prashant Khandigal, senior vice president, and mister Yash Sharma, director Ganesha Ecosphere, on the call.

0:48 Without any delay, I would like to invite mister Yash Sharma to start with opening comment comment. Thank you, over to you, Yash. Yash, a very good afternoon to everyone, and a very warm welcome to all the participants for joining. So thank you for joining and for your continued interest in Ganesha Ecosphere. I hope all of you have had the opportunity to go through our results as well as the investor presentation. We are pleased to report that another quarter of healthy progress and our performance remaining broadly in line with the direction and the growth strategy that we had outlined at the beginning of the year. Demand remained encouraging across both our legacy as well as subsidiary operations, supporting better volumes and improved revenue performance during this quarter. On a sequential basis, the consolidated revenue has grown by 21.1%, while the standalone revenue has increased by 20.7%.

1:40 On a year on year basis, the consolidated revenue has increased by 41.2%, while the standalone revenue has increased by 22. Overall, in the first half FY 'twenty seven, turnover has increased by 33.7% on the console basis. Consolidated sales volume increased to 49,382 tonnes from 40,132 tonnes during the last quarter. Stand alone sales volume has also grown significantly to 31,800 tonnes from 25,321 megatons achieved during the quarter one. The operating environment, however, has remained quite volatile. During the quarter, both the PET bottles scrap prices as well as the finished product prices have witnessed sharp fluctuations on both the sides, which was primarily driven by movements in crude oil sentiments and polymer markets owing to the ongoing geopolitical developments in the West Asia, resulting in a quite significant volatility across the value chain. Despite these challenges, we have been able to maintain the business momentum and healthy margins.

2:41 Coming to our performance, the stand alone business continued to operate strongly with plant utilization of about 99% during this quarter. The Warrantal facility operated at around 67% utilization during this quarter. Healthy demand and operational efficiency supported the performance despite the volatile raw material environment. From a financial perspective, we have achieved a stand alone EBITDA of INR 24.51 crores and consolidated EBITDA of INR 60.6 crores during Q2 FY 'twenty seven, which is an increase of 200 over the corresponding last quarter. During Q1 FY 'twenty seven, stand alone EBITDA per tonne was INR 9,396 as compared to INR 77.04 during the Q2, and consolidated EBITDA per ton was INR 14,902 as against INR 12,002 and 81 earned during the current quarter. It was mainly due to the inventory gains during Q1 and loss of RPSF production at Varangal unit sales because of the fire incident in the RPSF.

3:40 On the half yearly basis, we achieved consolidated EBITDA of INR120.42 crores as against the INR58.63 crores during the last corresponding FY. We generated operating cash flows of INR56.91 crores during h one FY twenty seven, reflecting the strength of our business model and our continued focus on profitable growth and cash generation. Our fourth annual production line at Warangal unit got the FSSI approvals for food grade applications and has thus become eligible to cater to the growing food grade packaging market. In the... In August 26, we got a setback due to the fire incident of the RPSF division of our Warangal facility. This resulted in the halting of the operations causing production and profitability losses while the fixed cost continued to be incurred. Quantum of loss is still under assessment, though it is adequately covered under insurances.

4:31 Restoration activities are progressing as planned, and we expect the affected operations to be reinstated by Q4 FY 'twenty seven. Looking ahead, our growth and expansion plans remain firmly on track. The fifth carpet GANEOS production line is currently under installation and is expected to be commissioned during q four of FY twenty seven. This will further enhance our capacity and strengthen our ability to serve the increasing demand for high quality food grade RPET products. We are also shifting our Kanpur RBSF production line to our Tengna unit to improve the operational efficiencies, optimize costs and create a more integrated manufacturing setup. Overall, we are very encouraged by the performance delivered during the first half of FY twenty twenty seven. Demand fundamentals remain quite healthy. Our expansion projects are progressing as scheduled, and we believe the momentum witnessed during the first half of the year should continue through the remainder of FY 'twenty seven as well. Thank you once again to everyone for joining us today. We will be happy to take any questions now. Thank you.

5:32 Thank you very much. We will now begin the question and answer session. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. First question is from the line of Dheeraj Ram from three sixty one Capital. Congratulations for a good set of numbers. Sir, could you please let me know the current changing demand scenario for our tech and if any new Fossil approved recyclers that have got approval in 2Q?

6:26 Yeah. Sure. Thank you. So the current demand of ARPAT remains quite strong and healthy due to the elevated polymer prices overall currently. Also, now the government mandate of using 40% health intent is definitely in place, and all the players in the industry are looking to follow the mandates. Secondly, yes, definitely, there have been new capacity which has which has come online during the q two. For example, IDBB. IDBB has got the approvals. There's one small player in the Northeast, which has got approval. And our new line has got the approval. And similarly, one more player's new line has got the approval in the Q2 from FSLCI. Understood.

7:12 And second would be, what does this FSSCI approval mean? Currently, we were selling it for non good grade. What was the utilization rate, and what could be the potential implication of this approval on your new line, and what could be numbers turning out to me? Yes. So, basically, when... Once you get the approval, then you are able to supply the output of the line into food contact applications. Until now, we were utilizing that line mostly for our non food grade customers and also for exports since we already had the USFD and extra approvals for the line. So we were mainly focusing on that. Going from now onwards, obviously, since we we will be able to also ramp up the utilization, which we were running for the line four at about...

8:04 Only about 60% before the approval came through. And after that, we've been able to increase the ramp up. Understood. And this last question is, what could be the loss on volume with this fire accident at 100 in the RPS? It is roughly about 200,500 to 3,000 tonnes quarterly basis. Quarterly basis. Understood. Lastly, could you let me know the raw material prices and this crude price or could be a raw material price R and D? Yes. So raw material prices are moving in tandem with the prices of finished goods. So the prices are quite volatile in the market and it is very, very unpredictable what would be the price going ahead.

8:52 But certainly at this point, these are at elevated level. Okay. And since this is an increase in trajectory, can we expect the inventory gains in the quarters coming ahead? Sorry, can you please come again? So since crude tires have ramped up and we had inventory of close to three months, we're holding inventory of close to three months. So could we expect inventory gains in next quarters going ahead? Or has this been weighted out and through the entire quarter? Yes. So we are not expecting any inventory gain going ahead. Although we are having the inventory with us, but the inventory is turning out fast and the prices are also very volatile. So the inventory is about valued at about current prices only.

9:50 Okay, understood. Thank you, sir. All the best for the quarters coming ahead. Thank you. Next question is from the line of Bharat Gulati from Dalal and Brochard Stock Broking. Please go ahead. Yes. Hi. Thanks for the opportunity. Hope I'm audible. Just a few questions on the subsidiary business. Understand quarter on quarter, the utilization has dropped because of the fire incident. Just trying to understand what would our pet's utilization for the lines that were operational during the quarter would have been, if you can quantify that? So so on blended basis, because one one line was started in the in the June itself or so and we got only in this month. So the blended capacity was about 75% to 76% in the last quarter.

10:46 Understood. Understood. And the fourth of Assai approval that, Ganesha, you spoke about, should that immediately start to ramp up from q three? So the ramp up would be in progress right now. Is that the case? And that 60% utilization should reach the 75, 76 blended utilization of the existing ARPAT. Is that the sort of trajectory we are looking at? Yes. Yes. We we are witnessing the volume growth of that line also. Capacity is increasing. Understood. Understood. So so just trying to gauge what sort of a capacity utilization just on the line do we expect to close the year at? And then given that when we restore our operations back in the RPSF line also, what should the blended exit utilization for our facility be? I understand you're adding some new lines. I'm talking about excluding of addition of those new lines on the capacities that have been live throughout the year. What should our expected capacity utilization on that be? And what should a sort of normalized EBITDA per ton on our Varangal operations look like? It's currently between 21 and 22 rupees. So what should that sort of be at? Yeah. Yeah.

12:04 So, Varangal, we we are expecting the the optimal capital capital capital capital about 85% of our one... One value net. I'm going ahead. And and, suddenly, we are looking for the EBITDA of $21.22 rupees, which are earning prudently. It would be maintained. Understood. Yeah. And just trying to understand the sequential hit on EBITDA per ton that we saw, that was predominantly because of the RPSS line going out. Right? So shouldn't one that RPSS line come back into our business, it should normalize back to $24.25 rupee per ton, or are we going to see this pull down on a normalized basis to 23... 22% as it is? Yeah. So so it it would be between $22.24 rupees a kg on blended basis.

12:58 Understood. For our subsidiary business, that is? Subsidiary business. Yes. Understood. Understood. Okay. And just on the demand outlook for... As the previous participant question, you know, what's the demand supply sort of mismatch? There's been quite a few approvals from that have taken place during the quarter. So how how much does that demand gap still exist? If you can just throw some broad numbers on the current approved facade facilities and what market share do we hold in that. So the current facade capacity of India is about four point four point two to 4.5 lakh tons approximately, the current the current total approved capacity out of which our approved capacity has now gone to 65,000 tons.

13:48 But what what is happening is that still some, you know, some capacities not able to perform quite good on the operational basis. So the actual utilizations are not as high. The actual utilizations of the, you know, other industry are only lower side. So the data that we have currently on the market share side is that currently the ARPAT sales in the market are somewhere between 25,000 to 50,000 tonnes, also out of which we have a market share of about 5,005 tons on a monthly basis. So roughly about 20%. Understood. But just trying to understand, you know, we've seen pretty... A pretty big consolidation that would have taken place due to the turmoil in the past six months. So hasn't there been some sort of brownfield capacities that have gone or bust that we could take over and sort of continue those operations? Or... I mean, just trying to understand what's the broader perspective of us expanding lines going forward. Should we expect CapEx within our existing facilities or some sort of acquisition of players who already had facilities but aren't in operation anymore?

14:56 So you're seeing, in fact, the opposite has happened. So what has happened since the last six months of political turmoil of geopolitical turmoil is that the polymer... The virgin polymer prices have went quite up. And because of that, the demand for recycled polymers has gone pretty high. So now what has happened because of this is that even the inefficient players, you know, are are now able to actually operate at higher utilizations and, you know, are able to sustain their operations in a quite decent way because there there is a there is a demand for the recycled polymer today because recycled polymer today is at a discount to the virgin polymer prices. And so the broader market demand has increased quite significantly.

15:42 So in fact, the opposite has happened in the last six months. The players have been able to run their lines well. Yes. So we are looking for the capacity expenses and we are already making up the expense on the capacity at Warangal plant, brownfield expenses we are getting out. Yes. Yes. Right. Understood. That's helpful. That's it from my side. Thank you so much. Thank you. Next question is from the line of Deepak Ajmera from El Pro International Limited. Please go ahead. Hello. Yes, you are audible. Please proceed. Yes. I would like to know the current ARPAT volume. How much is the long term contract versus the spot sales? And since the crude prices are too high and given that if the crude prices falls in near term, what kind of EBITDA per kg we are assuming in ARPAT is $20.21 per kg sustainable?

16:53 So our current contracted capacities out of the total production today currently stands at about 85% to 90%. So 85% to 90% of our capacities are currently on a contractual basis in which there will be absolutely no impact of any sudden fall or decrease in the prices. Also, if you're talking about the overall EBITDA, the numbers we are very confident that we'll be able to achieve EBITDAs close to 20 a kg on a sustainable basis. Okay. Got it. And on the new capacity, which came currently, so will you please guide once again what the optimum utilization in ARPAT we can have and what we are targeting in future?

17:47 Capacity utilization is about 85% in case of our pit. Effective 85%. It is quite difficult to achieve the capacity of license because of the product mix which are currently being sold in the market. So can we say that this 80% utilization, we can have it in the Q4 or Q3 in this year? Yes. We are working on the debottlenecking, some debottlenecking. So we are expecting by the end of this financing, where we would be able to go by 90%. Got it. And any greenfield plans for our new capacities and which plan was dropped from Odisha?

18:37 Yes. So we are working on that certain plan, and I think we would be able to come to the investors and stocks in public in this quarter itself. Got it. Thank you. Thank you. Next question is from the line of Harsh Vidani from India Capital. Please go ahead. Sir, congratulations for the good side of results. I just wanted to know that now that, like you said, some approvals have come through in this quarter. But is it fair to say that the quality supply remains constrained and we would be able to maintain the current margins?

19:27 Yes, definitely, Harsh. So what is happening is that now even the industry is realizing the difference in the polymer quality being supplied by different players. Are obviously, So we are only performing pretty well on that side. And after the demand for our process is going higher and higher, and in fact, we are constrained by our capacity right now and not by the supplier. So we think that definitely we will be able to perform much better than than the, you know, than the industry overall. So so, sir, is it fair to assume that the that the that the ramp up of the new line that came in would have been very quick as soon as we got the approval? Yes. Yes. Yes. Yes. In fact in fact, in just a period of a month's time, we have been able to, you know, achieve very high utilizations. Yeah. Yeah. So, yeah, we are already utilizing the capacity about 60 capacity utilization was already there of this line where we are we are the are utilizing the material for non food application.

20:31 So there would be some ramp up in the capacity utilization after the approval. Understood. Understood. And sir, so by what what is the expected volume increase for food grade now on a quarterly basis? So quarterly basis, it is around 1,500 to 2,000 ton. Got it. Then and then we also... We we we also have another line coming in in January. So that would that would... Like this like this line prior to approval, we'll be able to operate for non food grade applications. Right? Correct. Correct. Correct. Understood.

21:18 And sir, one last question from my side, sir. Is it fair to assume that the cost of the fire incident will be contained in the have been contained till in this quarter and there would be no more cost implication? So basically, there are two implications out there. One is we are we are losing the EBITDA margins which we are earning on the PSF. So the production is completely halted and so we are losing the EBITDA on that. And further, we are incurring the preceptances, this quarter of this PRPSF because of the closing of the closing. So they are double impact as of now. Thank you.

22:09 Next question is from the line of Costa Bugna from Kamana Holdings. Please go ahead. Yes. I'm fairly new to this company. So if you could explain, so when crude prices go up, you're getting an advantage over the substitute product, right, virgin pet, right? But what's happening with your margins at the same time? So could you explain your raw material stocking base and the contracts you have in terms of cost push with your customers, if you could explain that? And also if you could explain if crude comes down drastically, hypothetically, then how does that affect your demand from here on? So those points, please.

23:06 Yes. So basically, definitely, the increase in food prices and the increase in the virgin polymer prices has increased the demand of recycled products. But on the other side, the prices of finished goods has in case of fiber, the entire series for sale. So definitely, the prices have increased of finished product. But at the same time, prices of scrap has also gone up to that extent. So basically, we are maintaining the EBITDA, but there is not any increase in the EBITDA margin. And in case of our ARPAD business, we our 85, 95 capacity is a contracted prices. So there, our margins are fixed. Yes. So their margins are so if their margins are fixed, means that your gross margins would I mean, if the pricing is fixed, in this environment, even though you're getting higher demand because of substitution, your gross margin would fall, right?

24:11 No. Basically, so we are adding the context of cost raw material prices plus yield plus fixed conversion cost. So whatever the raw material the raw material fluctuations are there, it is passed on to the buyer. Is it instantly passed on? It is with the lag of one month. So it is Q plus it is one plus one. So current month prices are 5% to next month. Okay. And how long are these contracts? Because so that your client doesn't try to negotiate if the prices have gone up? Or what is the bargaining power of your customer basically if your raw material prices go up like in this situation today?

24:59 So no. So the contract first of all, the contracts are annual, so they are one year long. Secondly, there is no negotiation that happens on the formula pricing because that's what has been agreed on in terms of the pricing. And there... Obviously, you'll you'll see it's it's just a lag of one month. So, definitely, you know, what happens is by the end of the year, it all gets averaged or it all gets neutralized any which ways, you know, automatically. So there is no there is no such negotiation that happened, honestly, on the on the contract formal pricing. And just last point on this. Sorry to interrupt, mister. May we please request you to rejoin the queue, sir, for the follow-up question? Thank you. Next question is from the line of Deepak D from Sundaram Mutual Fund. Please go ahead.

25:48 You for the opportunity. Am I audible? Yes. Please proceed. Sir, congratulations on delivering a good set of number. So sir, my first question is on volumes. So if I look at our stand alone business, so this quarter, we are almost looking at a 32,000 sort of run rate in tonnage basis and a 25% Q o Q growth. Just wanted to understand what changed in this quarter for the volume to jump show sharply in Q o Q basis? And how should we think about this run rate going into H2? So Deepak, the demand was the sale volume was quite low in first quarter and second quarter of this calendar year.

26:33 So there is some pent up demand also in Q3. And we also liquid our inventory. So we are looking for the normal demand would be there going forward. Okay. So would it be fair to assume that the regular 29,000 to 30,000 volume, which we used to clock earlier, that should continue into H2? Yes, yes. Because we are also liquidated most of our stock now. It. Got it. The would be INR 28,000 crores, 29,000 crores quarterly basis. Got it. And sir, secondly, on EBITDA per tonnage basis. So despite all the challenges in the raw material front, we are still clocking somewhere around INR 7 to 8 per kg, right, in our stand alone business. So would it be fair to assume that this sort of run rate would be maintained going forward, let's say, in H2 and also next fiscal?

27:32 Yes. You are very right. There is a lot of fluctuations and variation in the prices of raw material. But ultimately, on average basis, we are able to maintain the EBITDA margins of 7 to INR per kg in its own business. We look forward to maintain it in coming quarters also. Okay. And sir, it would be very helpful if you could just call out what is the current price difference between RPSF and virgin PSF and also R PIT and virgin PET. Just wanted to understand from trend perspective, how is it looking at, let's say, two months back and current? So the RPSF prices are currently... So it's very volatile. You have to understand, first of all, you know, you're taking the current numbers.

28:20 There should not be any benchmark at that. So the current RPSF prices are in the range of 112 to 110 to 114 per kg, whereas the VPSF prices are in the range of INR 150 a kg. And on the other side, in our PET, the current RPSF prices are at about INR 150 a kg, and V PET prices are at about INR 140 to INR 145 per kg. Okay. But it's very but it's very volatile and very fluctuating. So, you know, I mean, definitely, it's gonna change. So You know? So the... Yeah. Yeah. I understand. But that that's what is surprising because, generally, I had an understanding that, PET based price has its own supply demand factor. Somehow, this crude prices are also impacting this. I think it is because of the demand shift, which you might be incurring, and hence, the PET based prices are also going up as people are looking for substitution. Is that the right understanding? Exactly.

29:13 Exactly. You are absolutely right. Yes. That's what happens. Okay. Okay. Got it. And one last question. So we have been maintaining our EBITDA guidance. I understand that EBITDA per ton guidance is a little bit tricky depending on a lot of factors. So do we still maintain that INR $2.25 crore to INR $2.30 crore EBITDA guidance for 'twenty seven? Or do you feel that since this SASHAI approval has come through and your volume mix will also go towards the higher margin product now in H2 that we can surpass this INR $2.30 crore EBITDA in FY 'twenty nine itself? Yes. So we have given the guidance of INR $2.25 crores to INR $2.50 crores. And so we are expecting it to the higher end of the EBITDA like close to INR $2.35 crores to $2.40 crores.

29:59 Okay, okay, sir. Very helpful, sir. Thank you and all the best. Thank you. Next question is from the line of Suraj Malu from Katamaran Ventures. Sir, from the presentation, if we just look at CY 'twenty nine or FY 'thirty, India paid bottle numbers, which is supposed to go to 23 lakh tonnes rate. And if we consider the 80% recycling target, the industry can be around 18 lakh tonnes. So do we target like 20% of that capacity, which will be around 3.5 lakhs roughly by FY 'thirty for our? So we are looking for the output demand would be around 1,000,000 ton of the overall demand, overall.

30:54 So we are looking for 25% market share on that capacity on the demand of 1,000,000 ton. Got it. And sir, for that, what is the amount of CapEx that we'll need? Like right now, after the current line five, I believe we'll go roughly to 90,000 to go to like, let's say, 2.5 lakhs. What is the CapEx that we'll need to do? And will that happen entirely in Varangal? No. So we are not going to incur any further CapEx in the Varangal. So the we would be having around 100,000 capacity in Warangal. So we would be we are looking for our putting up the capacities in some other place, like either in the Northern India or some other place. Got it. And will that be, like like, 500,000 crore equivalent?

31:43 Or Yeah. So for for roughly for 50,000 capacity, the capacity will be around 300 crore. $25,050,000. Got it, sir. Sir, then if I may ask one last question, like, the EBITDA per kg at that scale, like, when we are at 2 lakh or 2.5 lakh, the EBITDA per kg, assuming we have approval, that will be like $24.25 rupees or will it be 22, sorry, 20 to 22 rupees? Yes. So we are having the guidance of 20 to 20... Between 20 to 22 rupees. In between INR $22.22 crores is a kg, yes. Thank you very much, sir.

32:32 Thank you. Next question is from the line of Subham Agarwal from Berman Capital. Please go ahead. Hi, sir. Thank you for the opportunity. I had two questions. Sir, one is the RPSS line, which got impacted in due to firing accident. When is that expected to come back online? So, basically, the the line is... Basically, with the OEM the OEM supply... The OEM got the... These are only in the in the current month, and they visited the plant last... In the last week. And so they are addressing the loss and what is the repayable, what is to be replaced. So we are expecting by the end of February, March, we would be able to restore the line depending upon the procurement time of the imported equipment from the OEM.

33:26 Understood, sir. And the specialty for this quarter, what was your output for just ARPC? That's a total total cost and volume is about 15,500 ton, including the PSF and the and the. But, specifically, can you give for if that's possible? So basically, we are giving that blended numbers. Understood. Understood. Thank you for answering my questions. Thank you. Next question is from the line of Bhavya Gandhi from Bajaj Alternate Investment Management Limited. Please proceed. Yes. Hi. Thanks for the opportunity and congratulations, Yash, as well as Gopal, you have a good set of numbers.

34:15 Sir, my question is regarding the global opportunity. Let's assume that if there if at all there is a supply demand mismatch in the country, which are the countries globally who have already this RPT regulation in place as a backup? Just wanted to understand. And are we allowed to export? Is there any restrictions on the exports? Yeah. So, Ganesha, currently, some states in The US and also Europe has already already has the mandatory regulations. A lot of countries currently, you know, have developed and are targeting to start the mandate pretty soon to someone, some country in 2028, some countries in January 2030. So it's a it's a global phenomenon that is taking place, number one. Number two, yes, we are... Obviously, we are allowed to export since we are US FDNS certified. We are allowed to export to multiple countries. Just that for the for the for the specific country, you have to take the, you know, the the food safety regulators approval before you are able to supply.

35:15 So that that is something that you have to do. Otherwise, you are absolutely allowed to supply to any country which works. So Got it. And at the bottler level, if you can quantify how much percentage of compliance are they fulfilling because this year mandates around 40%. So if you can just throw some light at the large bottlers or the beverage companies, what is the average complaint that they are following percentage wise at least? I think it's very difficult to exactly, you know, give the numbers because we obviously, we don't have access to such information offer. But but they are trying to, you know, go as high, you know, provided they are getting the quality material feedstock. The problem today is that they are not able to get that much amount of quality feedstock market from the industry.

36:03 And that is why, you know, they're they're they're getting sort of blocked by that. What what we hear from the industry experts is that the current rate is somewhere between around 25% for the current for the current year totally. They are trying to increase, but obviously, there is a big challenge in availability of high quality product feedstock. Got it. Fair enough. And thank you so much, and all the best for you. Yes. Thank you. Thank you. Next question is from the line of Norman Maheshwari from Surgeon Alpha Capital. Please go ahead. Yes. Hi. Am I audible? Yes. Please proceed. Yeah. Congratulations on a good set of numbers. Just wanted to get a clarity.

36:51 Addressing to recent participants, you just said that the approved capacity for India right now is somewhere around 4.2 lakhs to 4.5 lakhs metric ton. And the current demand is 30,000 metric ton, which implies a total demand of three lakh 60,000 metric ton per annum. So has the situation changed from changed from... Let me... Earlier said that the approved capacity is less and the demand is more to now the approved capacity being higher and the demand less. So please please understand please understand that the 30,000 demand is not a demand number. It's the actual sale number. The demand today is much, much more higher than that, probably more than even two x. The problem is that the material is not available for sale. So that's that's how the the numbers are, you know, getting blocked today.

37:45 Okay. And so And Sir, what is the gap actually? Is it because these facilities are not able to run at these optimum levels? So There's some quality difference. So you you take it like this. All the brand owners have not started to utilize the... To use the mandatory consumption of our pet, not the industry as a whole. So so most... Though some of the brand owner has started. So the actual demand is basically, yeah, outweighs the numbers of available quantity. But certainly, the demand would be higher when the entire industry would be utilized starting utilizing the market. Okay. And can you give me some light on the filament and operations at Varangal facility? How is it... How is that turning out? What is the revenue contribution or something on those lines?

38:42 So it is definitely improving. You know? We have... You know, we are slowly ramping up the new customers' demands and also in develop... Also in process of doing, you know, approvals for a couple of more customers as well. So it's it's increasing slowly. It will take, you know, probably some more time to get it to its optimum utilizations. We would not be, you know, disclosing product wise details, to be honest. So separately, we'll be working with that that numbers. Okay. So just one last follow-up on this. So as this Filament yarn contribution ramps up, do we see margins moving to a higher percentage going forward? Yes. So when we will be utilizing the upstream capacity, so certainly, it will add up the EBITDA, overall EBITDA.

39:33 All right. Thanks so much. Thank you. Next follow-up question is from the line of Deepak Ajmera from Elpro International Limited. Please proceed. Hello. Yes, please go ahead. As you mentioned that we have a contract for yearly basis, when is the next renewal period? So it is happening currently in December. In December. How confident are we in getting the again the renewal ones? Because many players are now moving with the some other players also like Varun has their own partner with someone and now other organized there are also thinking for the same. So in the span of one, two years, how do you think this?

40:29 And do you think that we are capable or we can partner with someone like Coca Cola or other players? So see, we are more than confident of getting the contracts, number one. Number two, even though a lot of players are there, coming up definitely, yes. But the number one, you know, quality output and as well as utilizations, you know, currently, it's it's... The, you know, the the market needs much more higher amount of than what is available today. Also, have very good, you know, rapport and relationships with a lot of brand owners, global brand owners, not just one or two or three, but we're working with a lot of brand owners now and, you know, have been able to, you know, really demonstrate Ganesha as a very strategic supplier. So we're very confident that we'll be able to lock in the contract even for the new line as well.

41:26 Okay. Got it. Thank you. Thank you. Next follow-up question is from the line of Bharat Gulati from Galal and Brochastop Broking. Please proceed. Yes. Hi. Thanks for the follow-up. Just a question on our capacity. You know, we spoke... We've spoken in previous earnings calls and in presentations that we're taking our capacities to a lakh. What's the CapEx plan beyond that? Can you give a broad sense of what are we planning beyond the one lakh RPT granules going to? And where would that CapEx take place? Any sort of broad timeline if you can give a sense of when would the additional capacity beyond one lakh ton start to come in at least in the at least in the production phase, if not in, you know, the ramp?

42:13 Like, I mean, when will they be online? So so it is it is it is taking about twelve months to fifteen months time to go on in the new capacities. So so I think we would be looking for the new CapEx as soon as we finalize it. Understood. Understood. But, I mean, just some sort of broad understanding of how much CapEx would it be in terms of, you know, capacities. Just some broad number to go by, and I understand you've given the twelve to fifteen month time line. So that would basically make us stand that by end of FY '29, only those capacities would come in broadly. So if you can just give some sense of how much would that additional capacity be?

43:02 So for as I told for 50,000 additional capacity, it would be around the CapEx would be around $2.50 crores to $207,100 crores. Got it. So should we expect about one lakh 50,000 tons of ARPAG granules by the end of FY '28? That would be a fair thing to say? We are we are working, and, hopefully, it will be delivered by the end of FY '27. Sorry. FY '28. Yeah. Understood. Yes. Got it. Got it, sir. Okay. Thank you. Thank you. Next follow-up question is from the line of Suraj Malu from Credit Amaran Ventures. Please go ahead. Thank you, sir. Sir, who would be the top two to three customers, anchor customers when, let's say, we have two, two and a half lakh capacity, like three, four years down the line?

44:01 So you see the the pet market in India is structured in a in a specific way where, you know, there are, let's say, global organized brand owners like Coke, Pepsi, and many others in in, you know, in the beverage and also FMC. So, obviously, they will be the... They will make up... So this... I would say this global brand owners would make up almost 70 to 80% of our market share. These Google brand names are around 25 currently in the Indian market in context, and the rest 20, 30% will be the local regional players for us. Got it. And, sir, then since you would since you have relations with these global customers, are you thinking of any big exports? So yes, are definitely on the market.

44:48 It really depends on how the economics and how the deals work out. You know, currently due to the geopolitical, we are still doing exports, but the quantity has gone down. The volume has gone down because of the, you know, the freight impact and higher demand and higher prices in India. So obviously, we are there on the market and, you know, we are able to deliver, you know, as we as we are able to go forward. So it's it's gonna definitely... It's gonna depend on how the Indian, you know, landscape looks like. Got it, sir. Thank you very much. Thank you. Next question is from the line of Direndra Kumar Petro from Spark BMS. Please proceed. Hi. This is. So congrats on a good set of numbers. I just had one question to... For. So, yes, we have seen that the promoter level pledge has been increasing since last three, four quarters.

45:46 And in the last quarter itself, it has gone up significantly, like, 4%. So any update on that whether this will be halted or it will be decreased in some timeline regarding that. Can you help me on that? Yes. Ganesha, the the the plate was... Because of the... Some funds were owned by the promoters for... It can work on their warrants last year. Can work on their warranty. So, basically, the pledge has been increased because of this... Is falling the prices of c s... C s. So we have to meet up the... And make up the more mortgage and to cover the soft fall in the... As far as falling prices.

46:34 Okay. Got it. And any timeline for repayment of that? Yeah. So I think we we... It it would be coming down by by... From from next next month. Okay. Thank you. Thank you. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to the management for the closing comments. Yes. Thank you. Thank you, everyone, for your time, your questions and your continued support. Ganesha Ecosphere, we remain focused on executing our extensive plan, strengthening our operational performance and creating long term value for all stakeholders. We appreciate your continued confidence in the company and look forward to interacting with you again next quarter. Thank you. Thank you very much.

47:25 Have a great day. Thank you very much, sir. On behalf of Antic Stock Broking, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.