GHCL (NSE:GHCL) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the GHCL's q two FY twenty seven conference call hosted by MK Global Financial Services Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this call is being recorded. I now hand the conference over to mister from MK Global Financial Services Limited. Thank you, and over to you, sir. Yeah. Thanks. Good afternoon, everyone. I would like to welcome the management and thank them for this opportunity. We have with us today Mr. R. S.

0:46 Jalan, Managing Director and Mr. Raman Chopra, CFO and Executive Director, Finance. I shall now hand over the call to the management for the opening remarks. Over to you, gentlemen. Thank you, GHCL. Thank you very much, GHCL. Good afternoon, ladies and gentlemen. A very warm welcome to the GHCL Q2 FY twenty twenty seven earnings call. Our results and investor presentation has been published and I trust you have an opportunity to review them. Before I turn the quarter, let me share how we think about our business. GHCL is amongst the lowest cost soda ash producer, a position that we have sustained through disciplined operational efficiency and backward integration into key raw materials.

1:40 Our growth initiatives built upon this further. The commissioning of vacuum salt and bromine during the quarter underlies this approach. Let me move on the industry landscape. Globally, the soda ash market remains oversupplied and inventory levels are elevated in certain regions. Demand, however, has held steadily across most user industry And the lithium sector continues to be the clear bright spot with strong momentum. As I have said in the past, the current pricing environment is a continuation of a cycle that has been playing out over the last two years.

2:32 And we expect realization to remain soft over the next few quarters. The conflict in The Middle East continues to disrupt established materials flow while adding cost pressure. Given the surplus production, producers are constrained in passing on some of these costs. Coming to the Indian market, during the quarter, demand from the detergent segment was weak, while glass demand remains stable. Import pressure continues to keep realization soft. Over the medium term, our view on India remains positive. The solar glass capacities under implementation will create a sustained and visible demand opportunity for soda ash.

3:25 On a positive move, the Government of India has imposed a minimum import price on clear float glass for a period of one year to safeguard domestic manufacturers. This should support soda ash demand from domestic glass segment in the coming quarters. Now let me turn to our growth and diversification initiatives. I'm happy to say that during the quarter, we successfully commenced commercial production of our vacuum salt, powered by fresh heat from our soda ash operation. This plant highlights our strategy of extracting maximum value and efficiency from our existing assets. Subsequent to the close of the quarter, we also commenced commercial production of bromine.

4:17 Both these projects marks an important milestone in our diversification journey. Our focus now shifts to optimizing these newly commissioned capacities. We expect the vacuum salt plant to operate at its intended capacity level by the end of FY 2027, while blooming plant will reach its intended capacity by the next financial year. Our backward integration journey continues. We are expanding our existing salt works capacity as well as developing new salt works at Jalajumara, which will be developed in phases. Both these projects will entail an investment of around INR450 crores and will significantly strengthen our raw material availability.

5:13 Our Board has approved a CapEx of INR88 crores for developing the infrastructure of our own railway siding. This will give us better control over the raw material, reduce our dependence on the trucks for the transportation of goods from cuts to our plant and should also lead to the cost saving. On our greenfield project, this is a significant strategic investment and part of our long term goal and we will continue to provide updates as project milestones are achieved. To summarize, our focus through this cycle has been firmly on what is within our control. Disciplined cost structure, operational efficiency, sustain our position as a low cost producer, enabling the swift margin rebound as marketing prices recovers.

6:09 Our next priority is to ramp up value vacuum production as well as the brine to the intended capacity levels. We will continue to execute our pillars with the discipline to make GHCL more diversified, more integrated and more resilient. I would like to thank all our investors and stakeholders for their continued trust in GHCL. I will now hand over the call to Raman to walk through the financial highlights in detail. Thank you. Thank you, sir. Good afternoon, everyone, and a warm welcome to our earnings call for the second quarter and half year ended 09/30/2026. Our performance remains steady. This is a result of our focus on operational excellence, cost control and efficient financial discipline.

6:59 We achieved this despite the global oversupply situation, elevated energy and freight costs and a challenging pricing environment. I'll now walk you through the key financial highlights. Revenue for the quarter came in at INR $8.21 crores compared to INR $7.39 crores in the same quarter of last year and INR798 crore in sequential quarter. This is a growth of 11% year on year and 3% quarter on quarter. EBITDA for the quarter stood at INR202 crore compared to INR175 crore in the same quarter of last year and INR233 crore in the sequential quarter, a growth of 16% on year on year basis. EBITDA margin was 24.7% as compared to 23.7% in Q2 of last year and 29% in Q1 of this year. As we had indicated in our last call, the Q1 margin was supported by higher realization and the benefit of low cost raw material and energy inventories, which were transitioned in nature. In quarter two margins have moderated, reflecting higher energy and raw material costs.

8:09 Profit before the tax before exceptional item for the quarter came in at INR172 crore compared to INR145 crore in the same quarter of last year and INR204 crore in Q1 of this year, a growth of 19% year on year. PAT for the quarter stood at INR127 crore compared to INR107 crore in the same quarter of last year and INR151 crore in Q1 of this year. That for the last quarter is after adjusting for an exceptional item exceptional gain of INR40 crores net of taxes arising from one time settlement done by ESO Trust. For the half year, revenue is INR1619 crore compared to INR1562 crore in half one of last year, a growth of 4%. EBITDA grew by 9% to INR435 crore and EBITDA margin improved to 26.9% as compared to 25.6% in half one of last year. PAT for the half year stood at INR $2.78 crore compared to INR $2.52 crore in half one of last year. And this is after adjusting the exceptional gain of INR 40 crore as mentioned above.

9:16 For the half year end, we had a total cash flow generation of INR360 crore. Of this, we spent INR68 crore towards on CapEx and INR110 crore towards the dividend payment and around INR13 crores on the repayment of borrowing, while working capital increased by around INR217 crores. This resulted in a net cash outflow of INR48 crores for the half year. The increase in working capital was primarily on account of higher inventory and train receivers amid supply chain disruptions. In a period of extreme volatility, this reflects the strength of our balance sheet and our commitment to shareholders and our disciplined capital allocation approach. We closed the half year with a net cash surplus of more than INR $10.70 crores. This financial agility supports our strategic CapEx execution, including our salt works and railway siding projects and provides significant growth headroom. With this, I conclude my comments and would now request the moderator to open the forum for questions and answers. Thank you very much.

10:18 Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question, may press star and one on the touchtone telephone. If you wish to remove yourself on the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, please wait for a moment while the question queue assembles. The first question is from the line of Ansh from Capital One. Please proceed. Hello, sir. May help you?

11:07 Yes. Yes.. Yes, sir. Sir, congratulations on a great set of numbers. I just wanted to get some update on the greenfield capacity we are building. So where are we on the acquisition end of it now? Yes, Ashish, in terms of the greenfield, I would say that as you remember in the past also we have said that there are certain land acquisition which are pending, okay, and certain approvals relating to the land is pending with the government. At this point of the time, I would not say that a very significant improvement has happened in that, but yes, some improvement has happened. And hopefully, the way we look at in the next few months, some positives will happen in that. Okay, sir. So sir, given that we get some approvals in the next few months, there is some positive momentum in the next few months, in how much time would you be able to set up the entire capacity and to take it up to a optimum utilization level, sir?

12:07 See, Ashish, if you look at the day we start with the G0 date, probably this will take around three, three point five years of kind of a period of that completely setting up the entire project, okay? And in terms of after that, I don't think it will take longer time, maybe around a year time to kind of stabilize the project, because we have a significant experience. So I don't see any learning kind of a loss or learning period gap between the execution of the plant to the optimum utilization. So, mostly from three zero to four point five years or four point five years. Is that the current? I think you are right on that.

12:53 Okay, sir. And sir, how is the demand and how is the demand feedback right now? And what are the spreads we are currently working with? Let me give you a slightly bigger picture in terms of which can kind of address your question also. Overall, globally, as I mentioned in my opening remarks, the oversupply situation is there, which is primarily led by the China. China new capacity has been added. However, on the other side, because of certain sectors like particularly the real estate sector as well as the solar sector, the demand which was around 18% in twenty twenty four December calendar year has been flattish in the twenty five percent and this flattish continues in this quarter as well in this six months also, I would say eight months also August.

13:48 The second factor position is the synthetic plant in China, particularly the solvent based plant are running below the cost, operating at a below the cost. Now how that will play out in a slightly medium terms of how these plants will rebalance their supply has to be seen, okay? But a significant amount of software plants are running at a below the cost. Now coming back to the second side, which is your other than the China, I would say globally, soda has demands are almost like on the stable and flattish kind of a thing. Some regions, it is slightly higher, some regions slightly lower. Overall, demand is flattish in the global arena.

14:38 But when it comes to India, the situation is slightly different. In India, last year the demand growth was around 9%. The first six months the demand growth is only 1% plus. This is primarily because of the geopolitical situation, lot of industry has not been able to operate at a full capacity. Second, the way the solar glass investment was projected to be implemented, that got delayed also. So in the first six months, the demand growth has not been as anticipated. However, next year, our assessment is the solar glass investments will play out fully. Today, glass capacity is almost around 15 gigawatts, which consumes I'm talking about to September 26, which will go up to 35 gigawatts in the next six months' time.

15:35 The full utilization of that will happen, yes, six months' time because the way the plans of the consumers are getting established. This 15 gigawatt of the solar will go to 35 gigawatt. And this 35 gigawatt will ultimately translate into a significant portion of the production demand of solar demand in 2728. This alone will add around 5%, 4% to 5% of the extra overall demand growth in the soda ash next year. The second, this what you call the if you look at the longer term demand growth of soda ash in India has been in the range of around 4% to 5%. If I put together both, I personally believe that 27%, '28 the demand growth of soda ash will be very healthy.

16:27 We can move Right, by the end the sir. So we can maybe go towards back to the 9% to 10% growth that we did last year? Seems like. Like, I've just given you the number. Seems like. Okay, sir. And sir, regarding the imports, which are currently coming into India, you specified that there was around 72 to 73,000 tons in the last quarter. Has there been is there been the same amount this quarter as well? Has there been some dip in the imports? No, almost on the same level, Ashish. If you look at I'll just give you slightly bigger picture also. Last year, the total demand or the total import of the soda was around 9 plus lakhs, okay. But if I split this into two parts, first half of the last year versus the second half of last year and the first half of this year.

17:20 First half in the last year was five lakh tonnes. This quarter this happens second half of the last year was four lakh tonnes. And this six months of this year is also four lakh tonnes. Broadly I'm just giving you the number, right. Those numbers are almost in the last one year has been kind of a it's balance means same number of the imports are happening. But the same thing which is kind of a will make up for the 2728 some of the geographical soda ash import, which are coming from like Iran, Russia and some of the other countries has kind of a taper down and likely to be not getting again importing to the Indian territory, particularly like I said three countries.

18:11 So this will next year will play out to be more of a import coming only from three major countries, U. S, Turkey and China. So probably that some kind of a consolidation in the import, which are more fragmented to six countries will get consolidated to the three countries. And frankly, the Go ahead, sir. Go ahead. No, no, please go ahead, sir. No, basically, what I was saying is that this will also help to kind of a in the stabilization of the prices also, because some of the synthetic producer in the other part of the region also like China have said, even as per our information, your other countries also, they are now restricting their kind of pricing for the market. And probably, I would say that some improvements in import pricing will also happen in the next year.

19:09 So, are we expecting any import duties or anything from the government tended towards these imports or is there any discussion right now with the government as such? See, Ashish, unless something happens, it is very difficult to kind of predict what will happen. But yes, this is in the public domain that safeguard these quantitative restrictions are under consideration of the government. How that is So going to has there been any advancement in those talks or has there been any kind of movement there? This is matter, it is still with the, what you call, DGTD, DGTR. And let's see how this quarter something should kind of some developments would happen in this quarter.

20:01 Okay sir, thank you. That is it from my side sir. Thank you, Ashish. Thank you. Before we take the next question, we would like to remind participants that you may press star and 1 to ask a question. The next question is from the line of Blue from Capital. Please proceed. Am I audible? Yes, Blue. You are. For the new CapEx that is highlighted in the PPT, what are the timeline for commissioning and the expected EBITDA for the same? See, as I said, Dhruv, that there are three or four significant investment which is there. In terms of your, what you call your vacuum salt and the bromine, like we have said, this has already been one has been capitalized, vacuum salt has been capitalized in the September and then bromine will get capitalized in this year, of course the production has just started.

21:00 But in addition to that, there are two significant investments, which are kind of should be highlighted. One is the Jarajumara, where I think I would say that it will take two to three years of time to kind of completely optimize that. The second is the Greenfield, which I have already mentioned that it will take some time from the zero date and CapEx also will require some kind of a later investment to the Greenfield project. In addition to that, our Board has just approved a kind of a railway siding or railway siding in nearby location of our plant. This is more of a improving our reliability on the raw material. Of course, the cost advantage will also be there, but that will significantly improve our kind of reliability of the raw material because of this truck and all the geopolitical and things like that. So these are I think these are the three.

22:00 And if you're talking about GHRA, GHMRA? Sorry, this another investment, which is your Salt Capacity Utilization, as I have been mentioning in the past also, this is a process which I've been doing for last two years. I think it will take another two years more, but improvement of the return from this capital started accruing at this point of time also and continue to because we are doing in a phases basis. And the project is like we are strengthening our capital sulphide to improve because of this all your seasonal rain and what you call weather conditions and all those things. This will help us to kind of improve our productivity, overall yield of the sulphide and where we are talking about almost around three lakh tonnes of extra salt production, some has been achieved and some will be achieving in the next two years of time.

22:59 Thank you, sir. That was really helpful. Second part of my question was expected EBITDA for this project. See, if you look at like six months data in front of you have, I have already given an indication that this year is likely to be almost I would say that similar to the last year 2026, the way we look at the business at this point of time or maybe slightly better than that. And so far the new project, which is your you call your vacuum salt and bromine, that EBITDA will be get added to the those numbers. The The next question is from the line of Rohit Sana from Sunibi Securities.

24:08 Please proceed. Yeah. Thank you for taking my question, sir. So first question is on the soda ash pricing side. How we are seeing the trend going forward as we already have seen, I would say, terms of crude derivative chemical products prices have increased significantly in the last few months. And because of that, most of the companies are reporting higher higher or even the highest ever drop top line growth just because of the better relation largely. So still our soda ash is... I mean, relations are still on the lower side. What would be the factors where we would see pricing moving upward as we... I think we are still operating at optimum utilization level. So the volume growth is not going to be a significant from here onwards, but it is the pricing thing should drive the growth. But when it is going to happen and how this should take shape? I wanted your thoughts on that.

25:16 I can understand that ultimately the pricing which has not in our control, okay. And how means you just want to understand that how the pricing will look like in the future. In this current geopolitical situation, it is predicting anything will be very difficult, but let me give you some slightly different picture, which probably may help you to kind of understand the economics of this thing. See, overall in last ten years, our EBITDA margin was in the range of around 29%, 30% average I'm talking about, ten years average. Today, are operating at 25%. The gap between these two numbers are 4% to 5%, right.

26:06 This how this will play out 25% to 30%, we don't know right now. Like I said, China with running below the cost, most of the solvent process, even some of the other players also in the globe are running below the cost. Against that, we are on a margin of 25% EBITDA. This is primarily led by our focus on the cost initiative, which we over the period of time, we have done a very significant amount of course benefit on that. And because of that, we have been able to maintain this kind of EBITDA margin from 29%, 30% to 25% margin. The moment this economics of which I said just now, the way we look at going forward is some rebalancing will take place.

26:53 So definitely as soon as this happens, which is not in our control, but the moment it happens, we will be able to bridge this gap into the margin. Our major strength is more on which is in our control. And we have over a period of time done a very significant amount of cost optimization in that process, which really helped us to kind of build the gap between the realization and this thing. One just one more update is just recently yesterday or yesterday only, small increase in the soda ash pricing we have taken, very small price we have taken in the soda ash. I just wanted to kind of also kind of let you all know that this quarter of third quarter, have two one is that we have an annual shutdown, which will reduce our production in the third quarter.

27:56 Second, as I mentioned in the first quarter call also, first quarter we had a significant advantage of inventory cost of the raw material, which to some extent has tapered down in quarter two. This will further tapered down in the quarter three and therefore, the third quarter number would be lower than the quarter two. However, that number will be at least better than the same quarter last year. Next, year as a whole, as I mentioned in my opening also, year as a whole, we believe our number will be either same of last year or slightly better and this will further get added by the incremental EBITDA of the vacuum salt and the bromine.

28:50 And this entire picture of 27%, 28% will be better than what it is 26%, 27%. I don't whether I've been able to answer your question. Got it, sir. Got it. Got it. And secondly, on the bromine and vacuum salt side, how has been the overall performance as of now? And are we looking at expanding the capacity in the bromine segment going forward? I mean, what kind of market dynamics is there? If look at at this point of the time, we have just started as I mentioned to you. As we have just started as I mentioned to you that in the quarter two, the vacuum salt had just started, which is hardly 5% of the capital utilization.

29:48 Hopefully in the next quarter, it should be in the range of around 50% to 60%. And I think in the quarter four, it should be around 80%. This is what the way we look at. Similarly for the bromine, I would say that we are starting the quarter of three, which is the current quarter, where we expect around 40% to 50% of the utilization should happen this quarter and this can go up to around 7075% in the next quarter. Full utilization of this to the optimum level will happen, both these projects will be happening in the next year. In terms of that capacity expansion on the current location, no, this is the optimum capacity which we have been able to pull. The balance new capacity will come into the new field, which is your GHGARAJUMRA, that will take two to three years of time, as I mentioned to you.

30:41 Okay. Okay. And given the elevated prices, I mean, how we are looking at the margins for the bromine segment also? I mean, would that be in the range of that 20%? Or this slightly lower? This will be slightly higher than the this margin on the bromine will be around 40 plus and the number margin will be in that range. Okay. Got it. So I mean, currently no change in our margin estimates from earlier what we are projecting? I don't think so. Can you confirm one last question?

31:30 Given the kind of cash generation we are building in the product side and still the new plants, the the plant is way too distant. So aren't we still looking at something beyond... I mean, some new project or something where we can scale up in a better way? Any new projects we are thoughtful of or could work out on? Let me kind of slightly give you our thoughts on that. First and foremost, like I mentioned, Jarajumra and other projects around 500 crores kind of the capital allocation, are trying to achieve, right?

32:24 Which capital allocation will be there, point number one. Second, as you know that last year, out of our total cash generation, 80% we have returned to the shareholders. 79% to 80% of the shareholders are capital we have returned to the shareholders. The third is, I mentioned in the earlier calls also, we have looked many of the opportunity in the inorganic growth also. But we are little cautious of that because of the geopolitical situations, we are little cautious on selecting some of the inorganic piece. Because once you enter into this kind of a piece, you have to be kind of have a kind of expertise of that or the second is, you have to be a long term player. So keeping that into mind, we have tried many of the things, but we have not been we have been able to kind of come to a definitive, what you call, action point on that, but that possibility we are continuously exploring that.

33:24 Fair enough. That's it from my side, sir. Thank you and best of luck. Happy New Year to all of you guys. Thank you, Rohit, and happy to all to you as well. Thank you. The next question is from the line of from Kapoor and Company. Please proceed. Yeah. Ramansak, and I hope I'm audible to all of you. Yes. I can hear you loud and clear. Yes, sir. Thank thank you, sir. Just to reiterate what you just replied to the earlier participant that q three, we will face some more pressure on the... On our on our margins. However, because of the price hike, which you just alluded to, which we have taken, our our EBITDA would be higher than the... Or higher than what we reported for the previous year quarter three. That understanding is correct, sir?

34:22 I think, sir. Patrick, your understanding is correct. Okay. Sir, secondly, your consumers were also in one of the call, one of the solar gas manufacturer did alluded to the fact that soda prices were up for them for by 10% for quarter quarter two. So was there any significant... Mean, this this... The the kind of 10% price hike that happened for this quarter, the the quarter which we are reporting? Remember that when he is talking about that price increase, he is talking about more from the perspective of what was the, what you call normal pricing, which was in the month of February, March, okay. In February, March, two, I would say that this period of time, probably yes, around 7% to 8% price increase has happened.

35:15 And probably this could be 9% for him, maybe because of the supply chain costs and all those things, But yes, 7% price increase had happened if you look at the same quarter last year versus this quarter. And if you look at September sorry, March 26 also, probably I would say that similar range of price increase happened. But this has got kind of to some extent or to a great extent, it has got adjusted by the raw materials and the supply chain disturbance and all those things. Correct, sir. Sir, now coming to the CapEx part of the story, when you mentioned about our firstly, coming to the two congratulations for this commissioning of both the vacuum salt and bromine, I think so we were slightly delayed on on some aspect, maybe the the heating problem.

36:05 But when we look at the CapEx spent on the same, I think so that totals to around some $303,125 or $33.26 odd crore. $1.95, we have to spend for the salt and $1.20 for the Brahmin project. That is 315 crore. Whereas the peak revenue alluded by you is at $1.40 crore. So if you could just explain to us how is it the infrastructure cost or whenever we scale up, how is it asset tool turnover multiplier effect will get into place? First and foremost, both the projects put together, probably the number will be in the range of around INR 180 crores.

36:58 Second. Right number 12. Around INR 168 crores to INR 170 crores kind of a number will be there. And broadly the EBITDA on that as I mentioned to you 40 plus kind of a margin will be there. If you look at in terms of the CapEx versus the return on that, typically you find that the return ROC is very, very good on that. 20% plus ROC. So, my basic understanding was on an investment of... On a on a CapEx of 315, the the asset... I mean, the revenue generation is to the tune of one sixty. That is 50%. That understanding is correct. Is is this the infrastructure cost that has gone into play and when we scale it up that the margins will improve further or this is how the math work for both by vacuum and bromine? Means total investment of $3.15, peak revenue of $1.60.

37:53 See see, the the business which you are operating, Satya, like soda is also you can look at. Your asset turnover in soda is also different than other industries, right? Way in this business of bean and salt, okay, because the salt cost in the vacuum salt is what, very significant cost. Okay. So the overall, what you are doing is you are converting the solar based solar salt to the vacuum salt by using the waste energy, right. And therefore, the excess turnover is going to be obviously the salt cost is higher. So, keeping that into mind, the revenues are going to be definitely lower than the CapEx in terms of percentage.

38:41 But, look at the return on capital. Return on capital is more than around 20%. Correct. And turning to now the salt capacity expansion. Now as mentioned in your Slide number 12, we are raising the capacity salt capacity from six lakhs to 8.5 lakhs with post commissioning of the thing, what would be our captive requirement? I mean, what percentage we will reach in terms of our captive requirement? Yes, Sachinji, our total requirement at this point of time is roughly around 80 lakhs, roughly 80. If I put together this two lakh tons of the vacuum salt also around 20 lakh tons. So this eight lakh you can just or 8.5 lakh you just can multiply the percentage, which is roughly around 40%.

39:29 Okay. So, continuation to the same, as and when we scale up the Zara Zumara toll free, this will get compensated when it gets in percentage will significantly move up. That is what that's what profit will be. Yes, yes. That's right, 100% right. And this railway line, which we have gotten approval from the Board will also help us to kind of secure our raw material from that area from that location to our current location. Correct, sir. And just secondly, I think both the projects have been now commercialized. Paramount sir, what would be the quarterly or the annual incremental depreciation from both the projects?

40:20 See, normally, these projects have a long life, so around 5% to 6% incremental depreciation. So maybe on INR $3.15 crore, INR $3.20 crore, we'll have around INR 15 crore, 20 crore incremental depreciation every year on these two projects. Then other projects, we had built the depreciation will start on those. But on these two, probably around INR 15 crores to INR 17 crores kind of additional depreciation number. Jalanjit, you have very well mentioned that we have around INR 5,400 worth of CapEx program, But we are accruing good cash the current... Even in the current environment, and our our net cash surplus of around 1,100... Closer to 1,100 crores.

41:06 So taking into account our we have already upped our dividend distribution from 15% to 25%. So what that can investors anticipate in terms of returning cash to your investors since the greenfield project still looks a part distance. And given the type of realizations currently we are having at sitting at the bottom of the commodity cycle, I think so. But can can investors look forward for further cash to be returned to them in the form of whatever best suitable way it it should be? I think the one year would be down.

41:51 We did a buyback at valuation significantly higher to what the market is ascribing as today. So what is your thought process on the sale? It's a both for the history, yes. Sir. Said, Satin Ji, if you look at the history, in the last couple of years, we have done three buybacks, not one. This clearly indicates our desire to kind of optimize the cash reward to the shareholders. Like you said, dividend also we have scaled up. The point in our management is very clear. We want we don't want to sit on the idle on the cash, okay. Last year, we have 79% to 80% of the cash generation has been distributed to the shareholders.

42:39 So depending upon how the things go in the next six months or nine months, how the greenfield projects get safer, how does the CapEx requirement, some new opportunity comes in support, like somebody was asking about inorganic growth and things like that. Probably, depending upon those things, we will take a kind of a judicious decision of allocation of the capital between the growth and the shareholders. Right, sir. You have explained yourself, but just to explain or rather correct me on this point, when you say that we distribute 80% of the cash generated for the year, sir, actually, my understanding is whenever you are contemplating an opportunity of buyback, it is the accumulated cash on the books and the network part that plays into account in in deciding.

43:31 And it is only that for that year, we are distributing that amount that's worked out. So when we say that we have distributed 80% of this year profit, is that understanding... My understanding correct that this is the accrued cash. If if we decide today to go for a buyback or if we are sitting on a cash of thousand crore and our CapEx is $3.50 crore two years down the line. It is not that the 400 crore that we are accruing for this year will lead to the buyback payout, Manesh. Correct me on this fact that you have been explaining to us many times. The number the way you are explaining is different than what the way number I'm explaining, okay. And basically what saying is any company, you need to have some capital to kind of look at any opportunity which comes in your way.

44:21 But don't accumulate the capital beyond the point, okay. And therefore, start looking at opportunity growth on the one side or other side the rewarding business. Do you agree that we have done three buyback in the last, I would say seven, eight years? Yes, sir. I have been the beneficiary of the sale. Yes. So if you are the beneficiary of that, so let's believe that we will go with the same approach in the going forward also. Okay. And lastly, Ramadan, on the other income part, there is a deduction by INR 10 odd crores. So was there any one off item that was reflected in the June quarter or wherein we have reported INR 24 crore as other income, this quarter it is INR 13 crore?

45:07 See, last quarter we realized we did sell some bonds to move into other areas, corporate bonds, as you know, the way the interest costs are rising. So we realized some gain, therefore, there was a higher income. This quarter there was a M2M dent, big M2M dent because of that this is an unrealized thing which has been accounted for. On a quarterly basis, you'll have on a every quarter we'll have probably INR 14 crores to 15 crores kind of interest numbers or trading income number, which will be there. So it's just an accounting of accounting for M2M impact this quarter actually. Okay. If I can say, Saket, yes, I would say slightly differently. Same number, but what Raman said, the quarterly run rate of the treasury income is around INR 10 crores to INR 12 crore, okay.

45:55 Last quarter, it was a kind of abnormal income because this has got accrued because we have liquidated some of their bonds. Okay. Yes, sir. I hope I'm clear. Yes, yes, sir. It is clear. And lastly, the CWIC part also, sir, with the commissioning of, I think so, the the roaming of late in the month of, I think, so October. I think so one... There was some CapEx we would request some pipeline part also. I think so in two calls earlier, correct me there also. Where are we, sir, in terms of that pipeline installation? And coming to the greenfield assets, sir, what is our current preparation?

46:41 I think once this land acquisition issue and the environment for the realizations and other impact improve, how are... Where are we, sir, in terms of from that ground, the zero number to the first bag being produced? See, strategy first and foremost the infrastructure pipeline, which you said, hopefully by year end this will get capitalized. That project is under implementation that will get capitalized during this year. On the Greenfield project, as I mentioned to some of the other stakeholders that the project will take around three, three point five years to implement from the zero date. Now obviously any production will happen after three point five years from the zero date.

47:30 And after that some time will require to kind of a stabilization of that process, right. So obviously, the benefit of that will start happening after that period of time. And obviously, the capital allocation or the capital expenditure will also be during this three point five years, where most of the investment will happen in the last two years of because first one point five years will be more of a civil and all those things, capital advances and all those things, but major expenditure will happen in the last two years of the project. In fact, with the inflationary trends, the type of inflation that has been built over last two, three years, the cost of setting up the project must have also be and we need to revisit that number also or we stick to our previous number of INR 3,500 crores odd crores?

48:21 Satoshi, I think we have said in the past also, a year back we have done revisited that number and we have come to the number where we have said around for the 1,100,000 tonne, we have spoken about the number. And for the 500,000 tonne, the number which we gave was? Around 4,200 crores. INR 4,200 crores of the number we have given. And subsequently, we have not revisited the number, but I personally believe that not very significant change would happen. I think in the meantime, some what you call government large government has also completed some investment promotion benefits. So probably that should net off if any interest rates happen to that. So the moment we start with the GHCL Limited immediately or before that, once we are we will be able to revisit that number and see that any major changes had there or not, the report to the shareholders.

49:16 And the CapEx will be back ended, when we commiserate it, it will be in the I have mentioned that strategy that it will happen in the back end only, major portion will happen in the back end only. And lastly, sir, the benefits of this pipeline project, can you explain what are the what is the purpose of this pipeline and how are we going to cost efficiency or on what aspect are we doing it? No, no. See, strategy, this is purely an infrastructure requirement and you don't assume any kind of a return on this. This is an infrastructure requirement. For our existing facility also? Yes, yes, yes. Because you know that the soda ash capacity, have increased from five lakhs to 12 lakh tonnes, but the pipeline and all those things remain the same. So this needs to be upgraded.

50:04 Okay. And this plant shutdown, we will be well prepared to meet our requirement and service our customers? I don't think that's an issue that we have in inventory. Okay, sir. And very small point just to conclude. For both these products, Vacuum, Salt as well as Gromine, have we articulated the stage two of the CapEx? Or first, we want to understand further on the bromine chemistry and and then go for more investment and also for the vacuum prod? Because in your presentation, you have mentioned about what kind of target TAM we have for both vacuum salt being 5,000 crore and also for bromine being, I think, to some 50,050 ton requirement for the domestic industry.

50:54 So we... Have we aligned what we will be in 2030 for both this vacuum salt contribution and bromine also or still in later stage? No, no, I think, Raghuraj, as you like, first we would like to both these projects get stabilized. In the meantime, internally, we are working on that And at the appropriate time, we will share with you. Thank you. The next question is from the line of from FWC. Please proceed. Yes. Hello. Am I audible?

51:41 Yes,. You are. Yes. Just two things I wanted clarity on. You mentioned that within the current quarter, that is q three, you have taken some price increases. So could you quantify that sequentially? What is the price increase that you have seen? It is roughly around 2%. 1.5%. It's a very small 1.5 to This two is sequentially Q3 or Q2? Two two two, q three. Yes. Okay. And with respect to the annual shutdown that you have mentioned, could you quantify what is the number of days or the projected production loss you have estimated or for this quarter?

52:31 See, when you look at generally we produce around a lakh of tons, broadly I'm just giving you 90,200 of a lakh of ton in month, okay. And this could be in the range of around, I would say, around 7% to 10% kind of a loss. Monthly, not for the month. I'm talking about 7% to 10% of the monthly loss. Okay. Okay. No. So for the quarter, how many days is it being shut for? Any number over there? No. Number is not important, Renuka. Basically, in the year as a whole, the total loss of the production because of the shutdown, because plant doesn't get shutdown completely. Plant just partially reduced what you call production to take a lot of maintenance requirement of the and some of the legal requirements of the plant.

53:28 And that I've given you the number around 7% to 10 kind of a number will be there in the production loss. Sorry, it will be roughly if you look at the year as a whole quarter as a whole, it will be around 4%, roughly around 3% to 4%. 3% to 4% for if I did look at the quarter as a whole, right? Correct. Okay. Okay. Got it. Got it. That was my question. Thank you. Thank you, Rami. Thank you. The next question is from the line of from MK Global. Please proceed. Mister, you may proceed. Yes, sir. You may proceed with your question.

54:34 Hello, Gagun. Sir, you may proceed with your question. Yeah. Yeah. Yeah. Yeah. So so this... My question is about the... This greenfield... This soda ash project. So so project cost about 6,800 crore. That... That's what mentioned. So so your presentation mentions that India at about 2.5 to three lakhs ton of the demand every year. So I think this 1,100,000 ton of this project, that's for the full year of growth. So would management plan or build a Phase one only or bring in the partner tie up or offtake before committing for the next phase, sir? That's my question. See, first and foremost, GHCL, let me clarify a little bit. The total, as you rightly said, total plant is 1,100,000 tonne. In the Phase one, we have been talking about zero five million tonne.

55:27 When I Sarkis asked me, I have given you that number of INR 4,200 crores was primarily on the 500,000 ton. But as you rightly say, overall, the project which we want to implement there is 1,100,000 ton, which will cost me INR6800 crores to INR7000 crores. Second, this project will envisage a kind of a period, as I mentioned to you, three to four years, okay. Now every year demand growth is 2.5 lakh tonnes. By the time this project gets commissioned, there will be a million tonnes of extra demand in any case in the market. So therefore, I don't see any major demand difficulty into the business. But today, the demand of Indian demand is around 4,500,000 tonnes.

56:17 Okay. And the way I just said, if I look at next three, four years, even a conservative number of 5%, though as I said, solar will lead us a kind of a significant growth in the next year, but still if I take 5% kind of a number, you require two, 2,500,000 tonnes two and two point five lakh tonnes of the solar demand every year, which is around 1,000,000 tons in next four, five years. So demand, I don't have to tie up with someone in the supply, selling in the domestic market or the nearby natural market of export, it will be possible. So we can assume safely that in two years or three years within that time frame, if the ramp up goes as per plan, so might be you are willing for the... Or planning for the next phase of growth. At least initially, you will start planning for it. That that assumption Yes.

57:16 Yes.. Yeah. Yeah. Yeah. That's that's from my end, sir. That's that's from. Yeah. Thank you, sir. Thank you. Thank you. That was the last question for the day. I now hand the conference over to the management for the closing comments. Over to you, sir. Thank you, Sulti. Thank you very much. As we have been always saying, what is in our control, we are delivering on that, which is the cost efficiency. We are the lowest cost producers and our journey towards the further optimizing our cost is in continuation and we would always like to be a lower cost producer so that whenever this market situation improves, our margin significantly improves as I have highlighted in the course of the discussion.

58:10 On a long term basis, the soda ash EBITDA margin used to be around 30% on a ten year average, whereas still today in spite of such a difficult market, in spite of the oversupply situation globally, we are maintaining EBITDA margin of 25%. This has been possible only because of the way we have operated the business and the way we are focused on that our extent of cost of what you call lowest cost producers. Significant amount of work on that. This journey will continue, point number one. Second, we personally believe the way the geopolitical situation is there, the way your overall global demand supply situation is there and the way major of the most of the synthetic soda producers in the globe are running below the cost. I think going forward things would look better and we will be the beneficiary of that scenario.

59:15 Third, our growth journey, two projects has already been commissioned. Our journey towards the salt that Jarrah Jomura is on the way. Our optimization of other areas like your current location, we are working on that. On terms of the Greenfield project, yes, some hiccup is there on some of the what you call land acquisition and approval of the government in terms of, of course, all those environmental clearances all other has been in our place. Even so therefore, things the ones these issues are getting resolved that journey of the growth will also continue on that. So we are very thoughtfully collaborating our shareholders with us as well as our growth journey and optimizing the, what you call resource allocation in a manner so that optimum utilization can happen.

1:00:17 In the last, we see you all very happy Diwali and prosperous New Year, next year. We're looking forward to having a continuous support of yours in the years to come. Thank you very much. Thank you. On behalf of MK Global Financial Services Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.