Indo Rama Synthetics (India) (NSE:INDORAMA) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Indo Rama Synthetics (India) Limited Q2 H1 FY 'twenty seven Earnings Conference Call. 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. Ashok Yadav, company secretary and compliance officer, INDORAMA Synthetics Limited. Thank you, and over to you, sir. Thank you. Good afternoon, ladies and gentlemen. I welcome you all to our earnings conference call to discuss the company's Q2 and H1 FY 'twenty seven performance.

0:55 Joining me today are Sri Ombarkas Loyaji, Chairman and Managing Director Mr. Vishal Loya, Executive Director and Mr. Umesh Kumarabhagar, Chief Commercial and Financial Officer of the company. It is a pleasure to reconnect with all of you. We appreciate your continued interest in the company, and thank you for taking the time to join us for this interaction. We look forward to continuing similar interaction through regular earnings calls and sharing updates on our performance, business priorities and progress. Before we begin, please note that some statements made during today's call may be forward looking and are subject to risks and uncertainties. Actual results may differ materially from those expressed or implied.

1:44 Please refer to our investor presentation and other disclosures available on the company's website for further details. With that, I now hand over the call to our Chairman and Managing Director, Mr. Onprakas Mowei, to share his opening remarks over to Chairman, sir. Thank you, Asaf. Good afternoon, everyone, and a very warm welcome to the earning conference call of Indo Rama Synthetics (India Limited. I thank you all for joining us to discuss our performance for quarter two and half one financial year 'twenty seven. Let me begin with a brief introduction.

2:31 We are part of Indo Rama Ventures, a high end headquarters global sustainable chemical company with an integrated presence across the country. As one of the world's leading pet producers and recyclers, the group brings considerable scale, technical expertise, global process know how and establish customer relationships across packaging, fiber and specific chemicals. In part of this global platform, providing Indo Rama Synthetics with access to technological capabilities, internal best practices, tactical collaboration and global market insights, strengthening our competitive position and supporting our focus on operational excellence, product development and sustainable long term growth.

3:19 Further talking about Indo Rama Synthetics, we carry a legacy of forty years with a diverse portfolio of comprising polyester staple fiber, yarn, textured yarn, polyester tips and bottle gate PD revenue. Though this portfolio, we serve a diversified B2B customer base, including the nonwoven manufacturers, heavy levers and meters and perform bottle and packaging manufacturers. These customers convert our products into materials used across apparel, home furnishing, hygiene, automotive, industrial textiles and packaging. Our customer reach spends 19 straight and union factories in India with export to 28 countries, contributing 5.59% of our total operating revenue.

4:10 This presence across domestic and residential market allow us to serve multiple industry and reduce the dependence on any single end use segment. Supporting this customer base is our integrated manufacturing facility at Motiburi, Nayanagpur. We are one of the India's leading integrated coalitional manufacturers with capacity of 6.72 lakh tonnes per annum, including 2.31 lakh tonnes of polystyrene fiber, 1.7 lakh tonnes of draw textured yarn and 2.28 lakh tonnes of water grade PC resin. The facility is supported by 71.08 megawatt of backup capacity power facility and a sanctioned discount load of 51 megawatt, providing power supply flexibility for plant operations.

4:59 As per our manufacturing process, we also draw our technology from partners, including Chemtech, Orlycon, PEGIN, Toivo, VMware, etcetera. Over the years, we have continued to invest in our manufacturing capabilities and program our product portfolio. This investment has saved our recent operation journey and laid the foundation for the next stage of growth. I now invite our Executive Director, Mr. Rama Dhawya, to take you through yearly our operating progress and opportunity ahead. Over to you, Mr. Rama. Thank you. Thank you, Mr. Chairman, and good afternoon, everybody. Let me begin with our investment journey, which provides the context for our current performance.

5:50 FY 'twenty three and FY 'twenty four were periods of significant investment and operational transition. We invested approximately INR $6.28 crores during these two years to expand our manufacturing capabilities and diversify our product portfolio. During 2023, we completed three important additions. In February, we increased polyester chip production capacity from seventeen forty three to nineteen twenty tonnes per day through debottlenecking. In June, we commenced commercial production of bottle grade PET resin with a capacity of 2.28 lakh tonnes per annum. Around the same time, our subsidiary commenced 39 additional DDI machines, textured machines, taking its total installed textured yarn capacity to 175 to 175 lakh tonnes per annum.

6:44 While these investments strengthened our manufacturing base, the commissioning and stabilization period coincided with challenging market conditions, coupled with QCO imposition then on PTA and MEG, along with end products, PSM and POI. Subdued demand, pressure on realizations, comparative imports and geopolitical disruptions affected the business. Higher borrowings and finance costs also weighed in on profitability. Capacity utilization stood at 58% in FY 'twenty three and declined to 55% in FY 'twenty four. In FY 'twenty five, we shifted our focus towards stabilizing these facilities and getting more from the expanded asset base.

7:33 We worked on production efficiency, cost control and ramp up of our pet resin and textured yarn capabilities. Growth CapEx in this year moderated to approximately INR 20 crores, while utilization recovered to 58%. As the new facilities began contributing and market conditions improved, we returned to profitability. Building on this recovery, capacity utilization increased to 68% in FY 'twenty six compared to 58% in FY 'twenty five, while growth CapEx moderated in this year to around INR 5 crores. Our priority was to improve output from the investments already made and strengthen operating performance.

8:19 This progress has continued in FY 'twenty seven with further improvement in profitability, including in Q2. Pet resin and value added textured yarn are contributing alongside our established polyester products. Better utilization, operating efficiencies and cost discipline have supported this performance, reflecting the progress made in stabilizing operations and improving our product mix. Alongside this operational progress, we remain mindful of the external environment geopolitical uncertainties, particularly in Bastasia, continues to pose risk to energy and petrochemical supply chains, disruptions around key shipping routes, including state of hormones, is affecting raw material availability, freight and insurance cost.

9:12 Movement in crude oil prices, PTA and energy cost and exchange rates also require growth retention. We continue to manage procurement and inventories carefully with a focus on serving our customers' reliability. Beyond domestic demand, the India U. K. Trade agreement, which came into force in July 2026, creates opportunity for our downstream textile customers. Looking ahead, implementation of the India EU FDA and progress towards a bilateral trade agreement with The U. S. Could further improve export opportunities subject to final terms and approvals. Over time, better access to these markets could support demand across the textile energy chain, including for polycy fiber and yarn.

10:01 On the raw material side, investment in domestic PTA capacity is another positive development. Indian oil, 1,200,000 tonnes per annum project at Paradeep and 1,250,000 tonnes per annum facility at Mangalore could broaden domestic sourcing options as production becomes available and stabilizes. This could reduce exposure to import related shipping disruptions and lead times. While the benefits will depend on supply reliability and competitive pricing, a stronger domestic raw material base would support the industry long term competitiveness in enhancing domestic and export markets. Against this background, our next investment is focused on specialty products.

10:53 Our Board has approved approximately INR 200 crores of additional investment across the company and its wholly owned subsidiary, Indo Rama Ventures, Yance Private Limited. This is a fresh investment separate from the investments done earlier. The projects will expand into specialty filament and specialty fiber production at Bugibudi in the same complex complementing the existing portfolio. Commercial operations are expected within calendar year 'twenty seven with funding through combination of term loans and internal accruals. Based on the current estimates, we expect around 15% growth in top line because of this investment and a 20% growth in EBITDA because of this investment with a payback of less than two years, subject to execution, ramp up and market conditions.

11:54 Our focus going forward is clear, to improve utilization of existing facilities, maintain cost and reduce cost and financial discipline and execute the specialty expansion in a timely manner. Coming to our financial performance. The progress I have outlined is reflected in our Q2 results. Total income grew 10% year on year. EBITDA increased by 46.4% and profit after tax rose by 201.8%. For H1 FY 'twenty seven, profitability improved despite lower total income due to supply chain issues, alongside stronger operating cash flow and reduced net debt.

12:44 Now Umehji will take you through the financial performance in greater detail. I would like to thank our customers, employees, suppliers, lenders, shareholders for their continued support. With this, I now hand over the mic to Uveshi. Thank you very much. Thank you, Vishal, sir. Good afternoon, everyone. I will take you through our consolidated financial performance for Q2 and H1 FY 'twenty seven. Let me begin with Q2. Total income increased 10% year on year to $13.44 crore compared with INR $12.22 crore in Q2 FY 'twenty six. EBITDA increased 46.4% to INR 117.7 crore compared with INR 80.4 crore in the corresponding quarter last year. EBITDA margin expanded by two twenty basis points to 8.8% from 6.6%, supported by improved product contribution and continued attention to operating efficiency and costs.

13:51 Finance costs declined to INR $2.29 crore from INR 33.6 crore. Profitable tax increased to 01.8% to INR 74.1 crore compared with INR 24.6 crore in Q2 FY 'twenty six. Paid margin improved to 5.5% from 2%. Moving to our excellent performance. Total income stood at INR 2,284 crore compared with INR 2,531 crore in H1 Expert Analytics, a decline of 9.7% due to supply chain issues mainly. Despite lower total income, EBITDA increased 24.9 to INR 225.7 crore compared with INR 180.7 crore. EBITDA margin expanded by two eighty basis points to 9.9% from 7.1%.

14:39 Finance cost reduced to INR 58.4 crore from INR 62.6 crore. Profit after tax increased 78.3% to INR 137.8 crore compared with INR 77.3 crore in actual FY six. Fate margin improved to 6% from 3.1%. Cash generation was another important feature of our actual performance. Net cash from operating activities stood at INR 28.5 crore compared with approximately INR 92 crore in H1 FY 'twenty six. Our balance sheet also strengthened during H1. Net debt declined to approximately INR $8.52 crore as of September 30 compared with $11.13 crore at the end of FY 'twenty six, a reduction of 23.5%, while debt recruiting improved to INR 1.7 from INR 2.18 times.

15:26 Returns also improved. On a trailing twelve month basis, return on equity stood at 38.2% compared with 36.85% at the end of FY 'twenty six, while return on capital employed increased to 27% from 20.34%. As the Chairman sir outlined, the proposed INR 200 crores facility expansion is an additional planned investment. Alongside excluding this project, our financial priorities remain disciplined, working with the management, healthy cash generation and careful management of borrowings. Overall, Q2 delivered growth in total income and a stronger increase in earnings. For H1, we improved profitability despite lower total income while generating stronger operating cash flow and reducing leverage. That is all from my end. We'll now be happy to take over your questions.

16:11 Moderator, please open the floor for the question and answer session. Thank you. We will now begin with the question and answer session. Participants are requested to use handsets when asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Himanshu Bisani with Pinpoint X Capital. Please go ahead.

17:30 Himanshu, please unmute your line in case if you're on mute and go ahead with your question. Since there's no response from the participant, we move to the next part... Participant. That's Dave Mehta with Unique PMS. Please go ahead. Hello? Dave, please go ahead. Yeah. Am am I audible? Yes. Hello. So just wanted to check the spreads currently. How are they looking like? And have they increased Y o Y? And are we seeing that they'll sustain for less than next quarter and the following quarter?

18:28 No. Spats were there around in the last Sir, I'm sorry to interrupt. Your voice is breaking up. Please come a little closer to the microphone. Okay. So, actually, it was because in the last six months, it is 9.9% and more than in the next two quarters. Sorry, sir. I did not get you. Your voice was breaking. I think some problem. Sir, sir, I'm sorry to interrupt you. You're not you're not audible.

19:19 No? Yes, sir. Please go ahead. Yes. EBITDA margin of last six months were 9.9%. I we hope that, yes, it will be maintained in the quarter. We don't see any big change. Any pressure from Chinese imports? Actually, let me give you the background. Like today, our currency is up compared to China. And China is also out of the business. So there is no much coming from China now, which was there a year or two years back. Going forward, I don't see much competition coming from China.

20:05 So Yes, sir. So my question was on China's imports. And also, sir, if you can mention, the crude price has been on an increase. So our finished products, end price has also increased. So just wanted to get an insight if we are able to pass on the price to our end customers, or we are seeing a drop in volume as of now? Coming back on Chinese imports, actually now China is gradually is getting out of the commodity business and so the completion from China is not much there. And because the currency devaluation in the last one point five years, compared to Chinese yuan, which was INR 12, at least INR 25, today is INR 14.5.

21:00 So now Chinese competition is getting away and going forward, I don't see much Chinese competition and our margin may be maintained. Coming on the crude prices, the two prices is 115 today and whatever the increase has been there, we have been able to pass on to the customer. And that is why today we can see our margin has gone to 9.9% in the last half. And going forward, we see that we'll be able to maintain these margins and we don't see much pressure coming on the volume also because earlier in the last six months the volume was lower because of supply chain, which is now is fine and we don't see any impact coming on the supply chain in the time we were maintained in Middle East.

21:53 Got it, sir. And when you mentioned that there are multiple PTA plants coming in India from Gale, IOCL, and I guess a larger plant from Reliance. So what is the approximate EBITDA per kg savings we are expecting from these plants? Have we... Do we have any estimates for the same? At the moment, I think they are still to come in next year, '27 and '28. But there is definitely India is importing around 2,500,000 tons of PGS. And these plants together are 5,500,000 tons. So this will take care of the domestic demand as well as some surplus or increasing demand. So definitely, we see improvement in the margin and we must get because when we are importing, definitely we may see 2% or 3% gain coming out of that.

22:49 Two or 3% percentage terms. Okay. Okay. Yes. And, sir, fine... And the final question, we have entered into some... As a JV with GRN tech... GRN chemicals in China. So what is that JV about? And let's say the recycled chip, which the GRN will sell, what is the cost differential between chip and our chip? No. This is not not for Indo Rama, generally. Okay. So this is Indo Rama Ventures. Correct? Yes. Yes. Definitely. Got it. So do you have any insight on what would be the differential between a virgin PET chip and textile to textile recycled chip?

23:42 You're talking about PET recycled chips? Yeah. Yeah. Yeah. Actually, earlier, if you see beginning of the year, the recycled chips were selling around eight to 10 higher than that. But with the raw material increase in the last six, eight months, the virgin chip prices have gone up by 30, 40. So at the moment, these cycles will cheaper. So once the prices comes or raw material comes down, our margin pricing will further come down, this will definitely help the the market to contribute. But, sir, this recycling chip which which you are mentioning is water to textile. Right?

24:29 Yes. Yes. Water to water. Okay. Okay. Okay. Yeah. Fair enough. I'll get back in the queue. Right. Okay. Thank you. The next question comes from the line of with Pinpoint X Capital. Please go ahead. Yeah. Good afternoon, sir, and congratulations for the great result. So firstly, I would want to know what is the current capacity utilization? And say on the current capacity, what is the maximum revenue we can generate? Actually, revenue is really very difficult to say like today, the raw material prices are 14 to 15% higher. So ultimately, revenue will depend on like last year we have generated INR 5,000 crores.

25:16 So as we have generated INR25000 crores, so this is a bottom. So maybe next year, if the prices remain high and with the growth in capsidized license, definitely we'll revenue will be much higher. This year also will be exceeding last year's turnover in spite of the first quarter we grew. Okay. So in terms of volume, sir, what was the growth? We can just talk of volume growth. Last year, what was the volume we did? What is the volume we are expecting this year and for next year? Actually, last year we have done a volume of around 475,000 tons. And this year and the first quarter and the second quarter was impacted.

26:01 So we still see a volume of around let's say around maybe four lakh tonnes. Okay. And so we come back to that four seventy five plus in the next year. In the next year. And so that would be how much that would be the maximum capacity we can utilize or we can go further than that? At the moment, this is a minimum what I'm talking about. But with the growth coming in and with the raw material availability, like today, if I say, our export used to be 15%, 20%, which has come down. But next year with the raw material availability increasing domestically and the price increase competitive, India also may be exporting more, but with this agreement coming in, the demand will also go up. So definitely our volume also will be going up next year definitely.

26:55 It is very difficult at the moment because of these prices to say how much, but definitely it will be higher. Secondly, actually, we are operating the factory plant only at 60%. Filament and fiber, we are operating at 100%. But plastic plants we are not running fully, that's why the volume are lower. And we are trying to see that how we can increase the packaging production. So that will increase the volume. As I told you that with the fact sheet prices coming down and the recycle prices will be higher, maybe it will help us next year to increase the volume in the fact sheet also. Got it. And sir, you're talking of a new expansion that we are doing of INR 200 crores and the payback being ten, say, two years. So then if we think in those terms, that would mean like an incremental EBITDA of more than INR 100 crores per year. And I think this year, we are at a rate of, say, $2.50 crores EBITDA or slightly higher. So that means almost a 40% increase in EBITDA we can think of per year once the new CapEx comes online?

28:07 Not 40% because this year will be EBITDA maybe like in the first half, we have two twenty five. So this year definitely we'll have 400 plus. So definitely this 100 gross EBITDA in 2020, but this will be '28, '29. Got it. Got it. Got it. Got it. And sir, about the INDORAMA group, like, I mean, we have their expertise and their backing. And I'm sure they are not here just to run, say, a 2,000 odd crore market cap company. Like, I'm sure they must be having a lot of plans for the medium term. So I mean anything on what we're thinking about how we can make this like a bigger company?

28:58 At the moment, I think this two zero four expenses we are doing, but looking actually what we are seeing the demand going up with this agreement plus availability of raw material definitely will help this industry to grow. If I let me brief you that today Indo Rama after Rama is the only integrated player. Like there are no other players, mostly they are in filament yams. We have the filament yams, we have the fiber as well as we have the back kits. So we have spoke to growing all the three areas. And other important point, which is very important that today, cotton is already stagnant. Last thirty years, cotton area has not grown. Cotton production in India also last seven years is stagnant.

29:45 This year, India will be importing highest amount of cotton. So now whole growth of the gold to service 140 gross domestic operation with the agreement of EU and U. S, definitely the growth will be there, like government is targeting from 140,000,000,074 billion dollars textile industry to grow to $350,000,000,000 Export from $38,000,000,000 to 100,000,000,000 So to take all these things in mind and that is why all these PPA producers have decided to implement 5,400,000 tons of additional capacity. Like today, we have only 6,500,000 tons for all these years. And today, can understand, if 5,500,000 tons investment is made by Yale IOC and Reliance, it means they are seeing definitely a big growth in this industry.

30:35 So that is where we see the lot of scope for this industry to grow further from here. And we Indo Rama, I think, integrated players can take good advantage. Okay. So sir, once you have more clarity, say, there's so much PTA production coming in. And we like you said, we are running at 100% capacity on the polyester side. We have some capacity left on the red chip side, but on the polyester side, we are 100% full. So can we think of some expansion coming online here as well with the better availability of PTH chips? Actually, let us see that next year once this PTH subsidy comes and this oil prices also what happens in The Middle East. After that, I think we'll have a most clearer picture. So we can give a much clearer thing, maybe once the midlisting stabilizes and the oil prices are corrected.

31:34 Okay, sir. Thanks a lot, sir. And best of luck. The next question comes from the line of Niraj Khandelwal with NMDT Family Office. Please go ahead. Yeah. Yes, sir. My question was on the current prices and the current utilization of the in our subsidiary. How's how's it been trending across, which is there? Currently, the yam prices like what all we are not one with one product. We have different quality of yams. And all the prices are one can say that in the range of INR 125 to INR 150,160. So and the capacity is licensed as we discussed that we are now ramping up the whole production on PSF and TOI and PC chips we are running at 60%, but gradually we will see that how to ramp it up 200%.

32:37 So if I understand it correctly, the prices are on a upward trend, which is there and they are likely to mistake that way or how is it like going to be? No. At the moment, as a margin, what you can see is that last half, whatever the raw material increase has been there, 40%, 45%, we have been able to pass on to the customers and some margin improvement also. So gradually when the prices comes down, that will definitely help us to maintain the margins. Okay. And is there any time lag between the raw material price increase and the finished product prices, which is there? And how much normally the raw material inventory we keep across? Is it like two months, three months, which is there? No, not two, three months. We keep it at maybe fifteen days to a month or four point five months.

33:27 Not thirty days plus minus you can say. And that is only maybe between ten days and passing on the roundtable prices, not much. Okay. So basically, all our contracts are basically based on the current market price. They are not, like, basically a long contract at a fixed price, which is if understand it correctly. Yes. It is on the market price. Very well priced. Okay. I think that's it from me. Thank you. Thank you. The next question comes from the line of Rajesh with CP Investment. Please go ahead. Hello. Hello, Rajesh.

34:17 Please go ahead. Historically, sir, INDORAMA's prior to what we have been seeing has been fluctuated between profit and losses over two to three year periods. So where does management believe the company stands in the current polyester cycle? And what has structurally changed in the business to make the current profitability more sustainable through the next downturn? Let me explain. If you see, we were profitable in 'twenty two. 2023 and 2024 we made this investment of INR600 crores to ramp up and plus the debottlenecking has been done and some as a plant was there and some improvement has been done.

35:02 And now that's why the result if you see these are eight quarters running is profitable. And now as the cost optimization has been done and the plant is running quite well and that's why we are taking this INR200 crores further investment. And we don't see actually earlier, we have anti dumping duty on PPA and MEE always also. And then in the last two, two point five years back, India put QCO on India on China. So the actually raw material prices went up and that is why Government of India decided that no energy and PPA will be under anti dumping duty to protect the domestic industry. If you recall in 2021 budget itself, it is the first time PCA anti duty was withdrawn in the budget.

35:52 In the paragraph, the Government of India said, normally we will be protecting domestic industry by putting anti dumping duty, but to promote textile industry and withdrawing the PTA anti dumping duty. And that is actually industry has been suffering for ten years because of anti dumping duty on MEG and PTA was put up and import could not come and domestic supply was not there. That's why industry growth has not taken place and not lot of investment has taken place. And now if you see the advantage coming today, there is no much capacity in the pipeline. Demand will be increasing because of this agreement where our duty, which is 10% to 15% in U. Also.

36:38 And our competitive disadvantage was there with Bangladesh and Vietnam. Everyone talks about Bangladesh and Vietnam. They have got an advantage twenty years back for LBC countries, which is going away in November next month itself. So suddenly, these two or three things coming together on polyester industry, you have anti dumping duty, withdrawn, no no anti dumping duty, no PCO, textile agreement coming in place and PPA plant coming in place. And China and Vietnam is becoming uncompleted. So suddenly all this advantage and that is why today we see a demand and otherwise in a normal situation, we will not have been able to pass this raw material in the figure of 50%.

37:27 As this situation is there, that's why we could pass on and going forward, the price will be corrected. And bottom, as they know crop, they are worldwide and it's not growing, cotton prices will not go down. It can only go up. So that's the thing what we see going forward, I don't see any much challenge to the industrial industry and Indo Rama going forward. And we may have a better base going forward. This is my view. Thank you. Thank you, sir. The next question comes from the line of Lakshmi Narayan with K. Sema Wealth. Please go ahead., am I audible?

38:15 Yes. You are. Yes. Yes. Sir, with the CapEx going in, sir, I just wanted to understand, like, how your business product portfolio changes in two years, sir. Could you just give some light on it, sir? No. Business portfolio remains the same. We'll continue to produce The contribution the contribution of the draw textured yarn, will will will it be increasing or it will be remaining at the 30, 35 percentage, sir? No, that remains the same. Only we are making some specialty YAM and fiber by this investment of INR 200 crores, which will add some of the capacity which are we are not producing and that will enlarge our basket of supply to the customers.

39:01 Sir, it's only for captive, is it? Not that we will supply to the market. All the new products will go to the market. Understood. Sir, could you also give me the margins for your products, sir, which were in the sense, like, how much it would be? Like last week, some month was 9.9%. So you can just base that from here with the raw materials coming in domestically, raw material price coming down, cotton competition going away, that will definitely help to improve some margin going forward. Yeah. Yeah. That I understood, sir. I just want to understand, like, which is a high margin product in your portfolio? Like, would it be, like, synthetic yarn or, like, pet... Petitions?

39:50 Just wanted to have a thought. Understood, sir. Sir, last question, you were talking about this EU and the FDA and other FDA coming in, are you in talks with the customers in EUs for like to get this supply forward? Actually, if I give you a background of earlier, we used to export 20% to 25% of our products, which in the last six months has come down to 6%.

40:38 So it's been because of the domestic demand, which has gone up and we find that more regulated domestically, we have been doing it. Plus we have to import raw material from China and then to produce and export are becoming uncompleted. But now with the domestic availability of PPA, definitely if we were able to export 25% earlier with the agreement now in place where our duties will be lower, this we may target to go back to 20%, 25%. So basically... The margins will also be higher, sir. Sorry to interrupt. Margins will be higher for export, is it? Actually, actually our margins are earlier used to be higher. At the moment, that is not higher. But once our raw material availability will increase, we may also get higher margins in the DGI export. But China is becoming uncompetitive.

41:28 Taiwan has 100%. Vietnam also is becoming uncompetitive. Because today, is depending on actually, if you see these two countries, Vietnam and Bangladesh, Bangladesh are importing a lot of products from India and then converting it to government and exporting. Vietnam is doing it from China. And now they have advantage of duty, which now with this agreement, we have advantage of 10% coming from the government. That will create domestic demand much, much higher, which we don't know how much effect will be there, Maybe in the next year, we'll be able to talk more in that manner. But at the moment, that is to happen. Understood, sir. That's it from my side. Yes. Thank you. Thank you. The next question comes from the line of Anj Kymawat with Capital One. Please go ahead.

42:20 Hi, sir. Am I audible? Yes. Yes, yes. Yes, sir. I just wanted to know more about the specialty project which is coming, the specialty filament yarn and the fibers. So are we going to be doing or anything of that sort? In what way is it going to be special? Yes. Yes. We'll be able to put light on that? Yes. So your question exactly is what, sir? I'm trying to understand in what way are we... When you see a specialty filament and specialty fiber, can you just try to explain as to what does that mean? What is the specialty aspect to it? And in what capacity are we building that plant? Sure. So it is basically we are putting extruders extruders on on some of our machines. That's not the only one to make different kinds of yarn, which includes which includes colored yarns.

43:20 So cadionic and. Correct?. All all types of all types of element. Okay. In fiber, we also again putting extruder in a line. We have one line fiber line, which is closed down for a long time. Now we are planning to restart that with extruders to make any kind of fiber, which we don't make right now. Because right now, we have a large CP process. So we cannot make small, small lots of specialty products. With the extruder, we can. Okay. Understood, sir. And any... Those extruders, any capacity will be putting for that? Yeah.

44:06 In filament in filament, it will be around 115, 20 tons per day. Okay. Which will... We will we will convert our we will convert our products to to to specialty for that 120 tons per day. Okay. And there will be another filament specialty, which will be around 70 tons per day. But that's, again, that's that's different machines altogether. That will be an addition to a product basket. And fiber, like I said, the closed line is restarting, including all the fiber.

44:53 Okay, sir. And another question is regarding... So recently, there was a news where we was asking for zero duty on POI and FDY and the textured... Texturized one. So is there any... Like, what would that do to your filament pricing in India don't see change coming because already our raw material PPA is 5% and fiber is also 5%. So if all the duties come to zero, so it will be more beneficial to us because raw material also will come to zero. But I don't see that is happening. The demand from the industry side is always will be there because today the prices has gone up. So these prices which has gone up now because of this Middle East war did not continue to be ever.

45:42 So once the prices comes around, the demand will go away. And this is only 5% we have today and the duty is only 5%. On the other hand, I think some of the players are asking to increase the duty from five to 10 So some this will tell you, but I don't see any change coming on the duty side. But if that comes down, RamTel also will come down. So in that way, that will not have any impact. Okay, sir. Understood. And sir, would our sourcing dynamic also change when IOCL commission their capacity in the country? So by end of December twenty six, so would our sourcing dynamics also change? It's a good question what you're asking. And this is the question I have been actually today we have some disadvantage being Nagpur, which is in Central India compared to the plants in Gulsa.

46:41 But with these two plants coming in, the disadvantage which we have will go away. Because when the plant of IOC coming in, and there is no market in Eastern India, we have hydrochemicals, which is making PPA and then IOC coming with no market in that area, we are the nearest customer to IOC. So in that way definitely we'll have advantage compared to Gujarat industry. And with Mangalore also today, whatever the price they will be supplying to Gujarat, they will be supplying to us. So together we see definitely a bigger advantage coming after these two plants coming in. And once the Reliance plant comes in, Gujarat will be self sufficient.

47:28 And then when Lorenzo plant will be definitely looking at us to supply. So looking through all this, we definitely see some advantage coming to us. How much is very difficult to say. But that advantage would be on the logistic side of it, if that's the correct assumption? Advantage on? On the logistics side, on the freight and transport side of it. That's right. Because that is very important. Like today, if I save 2%, it makes a big difference. Okay. Could we be saving 1.5 to 2% on the freight cost then? Let us hope. Let's hope once we come in, we'll know the exact situation. But once actually today when we are importing and the domestic people are pricing the product based on imported land base.

48:18 And today we are not able to compete on some area with China. And that's why some of the question was coming, will the China will be dumping in India. So once the domestic availability will be getting raw materials at the same price as China, we'll become more competitive in exporting our product. And that's why demand will also increase. Because we have to service not only export, like Vietnam and Bangladesh, they don't have big domestic market. India luckily has 140 crore large domestic market. And after China, India is the only country which is integrated in the whole supply chain, making from refinery to naphtha to perjury to PTA and MEG. Neither Vietnam makes it, neither Bangladesh makes it.

49:03 Apart from China, we are the only one, but unfortunately, India could not take advantage. But now I think in 2007 onwards, I think India also will be taking advantage and it may be a good base for synthetic industry to grow. And it will help to create jobs because today's biggest problem is jobs. And government of India, that's why we have target of taking extra industry from $174,000,000,000 to $350,000,000,000 to create jobs coming out of agriculture. Yes, sir. Yes. Okay. And, sir, do we have any plans to go towards the end product? So the weaving or as we know, one of our brands also does spandex. One of our sister companies also does spandex.

49:49 So Spend that we are making with company, but we don't have plan to go for fabrics at the moment. No plans to go for the. Correct? And if you could specify, do we sell any raw material to our sister concern as such? So for the solution facility with that... Absolutely worldwide. So that's why sourcing from Thailand or Indonesia or from Europe and MEG from The U. S. We have a plant. So we have advantage of sourcing the product from our sister companies. No, no, What I meant was, do we sell anything to the pandemic facility, which is... We buy actually. We don't sell. On the other hand, actually, some of the product, which these 200 crores investment we are making, some of the products we are importing and selling.

50:36 So with that we are are buying from them. Okay. Okay, sir. Thank you, sir. That will be my question. Thank you. The next question comes from the line of Dev Meta with Unique PMS. Please go ahead. Yes. Am I audible? Yes. Yes, Dev. Yeah. So just wanted to get a direction with the PTA plants coming in. And as you mentioned that China is phasing out in a way with the polyester chips and EUFT and American bilateral trade agreement coming in place. So do we see double digit EBITDA margins going ahead, let's say, for FY 'twenty eight, FY 'twenty nine, like 11%, 12%?

51:33 Definitely from 9.9%, definitely we target on double digit. It could not go down. We are going to the but always because always if people have not seen for last five, seven years, so people are septic about this industry. But going forward, I definitely see this is all these changes happening, it will definitely help the industry. Otherwise, why somebody will invest? Like today, you must have seen IOC. Announced to put three lakh tons of capacity at an investment of INR 5,000 crores. So today INR 5,000 crores, if they invest, the interest cost itself will be at INR 300 crores plus depreciation. It means they have to have INR 500 crores only for 3 lakhs. So if this sort of investment can and at the moment, they know we have 5,500,000 tons of PTA coming in, but we don't have any polyester gas in pipeline because the margins were not there. Unless the double digit margins will be there, nobody is going to invest.

52:35 So margin has to go up for new investment to come. Fair enough. And for any huge greenfield polyester capacity, two to two and a half years time is a fair amount for. Right? Not not less than three years. Three to four years because environment nowadays is very, very important. This industry needs environment clear, then we need lot of water, electricity, several electricity supply. So all that and today, at the moment already, we are seeing shortage of electricity in India and new data centers coming in, especially also becoming tight. So going forward, I think getting land itself is a challenge. So looking at that and at the moment, first of all, unless our margins are facing policy industry, then only somebody can invest INR 2.0.

53:29 Is anybody interested today to put INR 2.3 and 1.0 in a policy industry with all these questions? Fair enough. So just a final question, sir. Apart from huge capacity, are we seeing any other big capacity like that? So nothing is not huge. It's a very small capacity. But there is no... That's why I'm saying they know capacity in pipeline. At the moment, they know capacity in Once the margin improves, the capacity may come in. But that will take three to four years, not before 2020. Okay. So that's it from my side. Thank you so much. Okay. Thank you. Ladies and gentlemen, due to time constraints, we would take that as the last question for today. I would now like to hand the conference over to mister Ashok Yadav for the closing remarks.

54:31 Thank you, Chairman, sir, Vishal sir and Udesha. We share your insights. I would like to thank all the participants for joining us today and for your interest in INDORAMA Synthetics (India). We look forward to staying connected and updating you on our performance in the coming quarter. If you have any further query, please feel free to contact us. Thank you very much for joining today. Thank you, sir. Ladies and gentlemen, on behalf of Indo Rama Synthetics (India) Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.