DCM Shriram (NSE:DCMSHRIRAM) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the DCMSHRIRAM Limited Q1 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. I now hand the conference over to Mr. Siddharth Ram Nekhar from CDR India. Thank you, and over to you, sir. Thank you, Rayo. Good evening, and welcome to DCMSHRIRAM Limited's Quarter one FY 'twenty seven Earnings Conference Call. Today, we have with us Mr. Jayshiram, Chairman and Senior Managing Director Mr. Ajith Shiram, Joint Managing Director Mr. Ajithya Shiram, Deputy Managing Director and Mr. Amit Agarwal, Group CFO of the company. We shall commence with remarks from Mr. Ajay Shriram and Mr. Ajay Shriram.

0:56 Members of the audience will get an opportunity to ask their queries to the management following these comments during the interactive question and answer session. Before we begin, please note that some of the statements made on today's call could be forward looking in nature, and a note to that effect has been included in the conference call invitation that has been circulated earlier and is also available on the Stock Exchange website. I would now like to invite Mr. Ajai Shriram to give us a brief overview. Over to you, sir. Thank you, Sadat. Good afternoon, ladies and gentlemen, and a very warm welcome to all of you. Thank you for joining us today to discuss the company's performance around the Q1 financial year 'twenty seven results. I shall commence with views on the industry dynamics and our strategic direction, following which, Ajith will share the financial perspective.

1:49 Globally, this quarter was characterized by a complex wait and watch environment. The economic impact of West Asia conflict transmitted rapidly to energy markets and supply chain flows. This is emitting inflationary pressures, cementing expectations for the prolonged higher interest rate environment and tempering global growth. On the domestic front, along with the West Asia conflict, we are navigating rainfall deficits induced by El Nino that resulted in uneven regional distribution across key agriculture zones. This is understandably changing the agriculture pattern, straining rural consumption and placing upward pressure on domestic food inflation.

2:40 While Kharish sowing is attempting a late catch up as July rains improved, the initial lag has created a large void in sowing. However, despite this combination of global friction and climate volatility, the broader Indian economy continues to demonstrate structural resilience. While rural markets face near term pressure, strong urban demand and sustained public infrastructure investment and prudent macroeconomic policies continue to provide a robust anchor for the medium term growth. We navigated this dynamic environment this dynamic quarter by leading into our core strengths of deep value chain integration, stringent cost discipline, digital transformation and execution agility.

3:35 Financial prudence continues to be our better. By maintaining adequate liquidity in our balance sheet, we successfully absorbed commodity shocks. Today, our strong operating cash flows are fully funding our capital investments while preserving our agility to capture organic and inorganic growth opportunities. Our commitment to environment sustainability remains integral to our strategy for future readiness and long term value creation. In line with this commitment, during the quarter, we signed a definitive agreement with Selectica Renewables to source 58 megawatts of peak hybrid renewable energy for our Baruch chemicals complex.

4:24 Upon commissioning, our peak renewable energy capacity across Baruch and Kota is expected to increase to around 176 megawatts, further strengthening our energy security, advancing our decarbonization journey and improving long term cost competitiveness. Now I shall take you through the perspectives of each of our businesses. First is Chemicals. Globally, the chlor alkali industry continued to operate in a challenging environment during the first quarter of financial year 'twenty seven. Geopolitical developments in West Asia led to heightened volatility in energy and freight markets, impacting chemical supply chains and input costs.

5:12 While demand across several end user industries remain resilient, excess capacities in China continue to weigh on international chemical pricing across major chemical value chains. The domestic caustic soda market remained healthy, supported by steady demand from alumina, soaps and deodorants and textile industries. The new Flaker facility commissioned last year has enabled us to actively export part of our caustic soda production, improving market reach. Capacity utilization during the quarter stood at 82%. This will improve further as our downstream projects get commissioned. Hydrogen peroxide continued to face oversupply conditions across parts of Asia despite structurally growing demand from paper, water treatment and electronics industries.

6:09 The plant has delivered a healthy operating performance with capacity utilization at around 85%. The advanced materials value chain comprising glycerin to epiglurohydrin to epoxy, including formulations with this mixed market conditions during the quarter. Glycerin markets strengthened, supported by biodiesel linked supply dynamics and improving downstream demand, while epichlorohydrin and epoxy markets experienced volatility owing to feedstock movements and geopolitical developments.

6:54 Our epichlorohydrin and epoxy plants are currently operating at around 70% capacity utilization each, reflecting continuous ramp up and stable operations. Our projects in aluminum chloride and calcium chloride at Barus are in the final stages of decommissioning and commercial production is expected to commence during Q2, further strengthening our downstream chemicals portfolio. The 68 megawatt peak hybrid renewable power project at Ota is currently under commissioning with average power injection of 25 megawatts for the month of July. Our largest chemical site at Guaruz, Gujarat was given the lighthouse recognition by World Economic Forum. It was an honor for us and a testimony of our journey in using digital means for efficient operations.

7:53 There are only two thirty nine companies worldwide and only nine chemical companies in the world with such recognition. With that, the escalation of the Middle East conflict pushed up PVC manufacturing costs as well as prices. To safeguard from rising global prices, the government of India granted a temporary waiver of basic customs duty on PVC, a measure that, combined with strong Chinese imports, led to a surge in imports into India and in turn, weighed on sale of domestic PVC. On the demand side, uptake remains subdued through the quarter, weighed down by labor shortages, heat wave conditions and cautious buying sentiment.

8:41 With the onset of the monsoon, demand is expected to remain soft in Q2 financial year 'twenty seven. Against this backdrop, a sustained pressure on domestic demand and realization, the government has now reinstated the basic custom duty on PVC imports. Additionally, DGFG has notified minimum import price of US$7.66 per metric ton on suspension grade PVC for six months. These measures should support domestic PVC prices and augurize for domestic producers. Sugar and ethanol. The global sugar market is expected to shift into a deficit in the year 'twenty, 'twenty six, 'twenty seven season with demand projected to exceed production by around 700,000 metric tons compared to a surplus of around 2,500,000 metric tons last year.

9:43 Lower production in Thailand and Europe are expected to support global sugar prices. For sugar season 'twenty five, 'twenty six, India is expected to end the season with a closing stock of around 3,750,000 metric tons, supported by production of 27,800,000 metric tons after diversion of around 3,100,000 metric tons per ethanol. Domestic consumption of 28,700,000 metric tons and exports of 750,000 metric tons. Current prices are around INR 4,450 per quintal and are expected to remain firm. On the ethanol front, installed capacity stands around INR 2,000 crore liters, while OMC allocations are around INR $10.60 crore liters, with sugarcane based feedstock accounting for a low 28%.

10:42 Policy developments during the quarter signaled an intention to prepare for blending beyond E 'twenty. While these are useful enabling measures for the industry's long term health, a clear implementation road map, balanced allocation across feedstocks and periodic alignment of ethanol procurement prices with sugarcane costs will remain important. Vanessa Building Systems. Vanessa Building Systems continued to strengthen its position as an integrated building materials solution provider, driven by healthy volumes, growth across both retail and project segments, wider market reach and continued expansion in installed portfolio.

11:30 The business is setting up a facility to manufacture wooden doors. Margins continue to evolve, reflecting the changing product mix and the upfront investments associated with scaling the newer businesses and strengthening the distribution network. Moving on, the agriculture inputs business portfolio comprises of Shriram Farm Solutions, fertilizer and the bioseed businesses. First is Shriram Farm Solutions. The SFS business delivered a moderate growth in the top line in Q1 financial year 'twenty seven over Q1 financial year 'twenty six despite facing multiple headwinds in the current quarter. Performance was impacted by the delayed and efficient onset of the Southwest Monsoon with rainfall remaining significantly below normal across several key agriculture regions that offset the underlying growth potential of the business.

12:30 The crop protection and specialty plant nutrition verticals delivered strong margin expansion despite muted volume growth, supported by better realizations and an improved product mix. As part of our growth strategy, the business strengthens strengthened alliances, lost core varieties from our in house R and D pipeline, reinforcing our innovation led growth agenda and creating a platform for further scale up. In parallel, we rolled out digital marketing campaigns across strategic regions, strengthening farmer outreach and improving farmer improving market penetration.

13:17 Fertilizer. The urea business witnessed a sharp increase in natural gas prices following supply disruptions arising from West Asia conflict. We remain focused on improving energy efficiency, maximizing urea production and maintaining strict cost discipline. Going forward, continued geopolitical uncertainties may impact LNG availability and lead to higher subsidy outstanding. Bioseed. Q1 financial year twenty twenty seven has been particularly challenging for the BioSea business as the Kharif season is the main season for this business. The current season has also marked by delayed monsoon, resulting in an overall shortfall of 15% to 20% sowing acreage in an all India basis and much higher in some of its markets.

14:14 This has impacted volumes as well as margins. Further, significantly higher productivity during the seed production season of 'twenty five, 'twenty six, going to favorable climate conditions, are putting pressure on margins as well as leading to higher inventory. I will now request Ajeet to provide the financial perspective. Ajeet, over to you. Thank you. Good evening, everyone. I will now take you through the financial performance for Q1 FY 'twenty seven. Net revenues, net of excise duty for Q1 FY 'twenty seven were at INR 3,564 crores versus INR 3,262 crores in Q1 FY 'twenty six, an increase of 9% year on year.

15:07 PPDIT for Q1 FY 'twenty seven was at INR $3.64 crores versus INR $3.26 crores last an increase of 12% year on year. Chemicals. The business delivered a robust 33% year on year growth in revenue during the quarter. While caustic soda volumes held steady, realizations improved with ECU prices firming up by 7%. The Advanced Materials portfolio spanning the Dysphrin to ECH to epoxy value chain was a meaningful contributor to this top line performance. On profitability, PvDIT rose by 24% to INR $2.74 crores aided by higher volumes and better realizations in the advanced materials, though partially offset by elevated input costs.

16:06 Vinyl capacity utilization stood at 100 for Q1 FY 'twenty seven versus 98% last year. Revenue moderated 10% versus last year as PVC volumes fell 25% year on year despite prices rising 22%. Carbide volumes and prices rose 15% each. Pvd and T improved 88 to INR 43 crores, driven by higher realizations, partially offset by elevated input costs. Sugar and Ethanol. The segment revenues for Q1 FY twenty seven declined 2% year on year.

16:51 Domestic Sugar volumes fell 8% on lower offtake even as realizations improved by 2%. Ethanol volumes were flat, while prices were 4% lower, a result of change in sales mix. PBITA came in at INR 22 crores against negative INR 7 crores last year, largely due to a onetime provision for retrospective ethanol duty of approximately INR 36 crores last year. Sugar inventory stood at INR 20.8 lakh quintils versus INR 27.7 lakh quintils, valued at INR 3,907 per quintil. Fenesta Building Systems. Fenesta Building Systems revenue increased 22% year on year, led by higher volumes across both the project and retail segments.

17:45 On profitability, PvDIT for the quarter grew 13% year on year to INR 40 crores. The contribution from higher volumes was partially offset by a change in product mix, along with higher fixed expenses towards setting up new revenue platforms and elevated marketing expense. The order book, up 4%, continues to be healthy. Shriram Pump Solutions. Shriram Farm Solutions revenue increased 2% year on year to INR $3.57 crores, supported by higher realizations across all verticals, partially offset by lower volumes in the seed and specialty plant nutrient verticals.

18:32 PvDIT for the quarter was higher by 22% at INR 30 crores, led by improved margins across verticals. Fertilizer. The fertilizer revenues for Q1 FY 'twenty seven rose 11% year on year with realizations up 19%, while volumes stayed flat. PPDIT stood at INR 23 crores versus INR 38 crores last year, reflecting better margins from improved energy efficiency. Though the year ago quarter had carried a INR 24 crore onetime retention price gain. Outstanding subsidy on 06/30/2026 was INR $2.92 crores versus INR $2.36 crores last year.

19:20 Bioseed. The Bioseed segment saw revenue decline of 26% year on year, largely owing to delayed rainfall, which led to reduced demand during the quarter. PPDIT for Q1 FY 'twenty seven came in at a negative INR 9 crores as against a positive INR 42 crores last year on account of lower volume in corn and honey, along with lower margins in cotton. The company's fat stood at INR $6.93 crores. This includes a onetime tax adjustment of INR $4.74 crores related to earlier years and INR 79 crores on account of sale of surplus land and stake sale to former JV in the polymer compounding business with U. S.-based TechnoreFX Limited.

20:16 Excluding these onetime items, that was INR 147 crores, an increase of 28% over last year. The company's net debt is INR $16.49 crores as on 06/30/2026, as against $14.81 crores as on 06/30/2025. Return on capital employed for June 2026 came in slightly improved at INR 13.6 crores 30.6% as compared to 30.2 for June 2025. As our major growth investment transition from execution to operations, our focus is shifting towards maximizing asset utilization, delivering value integration value chain integration and driving operational excellence.

21:10 Supported by a strong balance sheet, healthy liquidity and disciplined capital allocation, we are well positioned to navigate an evolving global environment as well as to explore growth opportunities in areas of core, adjusted as well as new businesses. That concludes my opening remarks, and I request the moderator to please open the forum for the Q and A session. Thank you. Sure. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and 1 on the touch tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking questions.

21:58 Ladies and gentlemen, we will wait for a moment while the question is assembled. Participants who wish to ask questions, please press star and 1. The first question is from Prateek Solya from Dollar Capital. Please go ahead.

22:50 Yeah. Hi. Hi, sir. Thanks for the opportunity. Just a couple of questions. Firstly, on the caustic soda, sir, we've seen the prices are now normalizing. So what is your expectation for this quarter and for maybe for the near term, maybe for FY 'twenty seven? How do you see the prices moving? And what is the chlorine prices currently? I'm sure it's negative, but how much is that, if you could help us understand that. Yes. Thank you. So actually, commenting on the prices going forward is normally quite difficult because the factors there are so many factors that go into determining the price, including the global situation, which is quite unpredictable, especially today with the geopolitical situation.

23:41 So we normally don't make forward looking statements, but we do expect the prices current ECU was in the range of just below INR 30,000. So we expect it to be in this range or higher. As for the chlorine price, currently, it's in the minus INR 7,000, minus INR 8,000 range. Okay. Sure. And just secondly, on your IT business, so you briefly mentioned about, you know, your performance in a performance in the SFS. But I think your performance has been pretty decent considering the overall demand environment and also your peers also. So if you could just help understand on the SFS part, your profitability is higher despite a flattish top line.

24:29 And now if the monsoons are looking good, at least for July, we had a good monsoon. So, you know, if monsoon remains strong in August and September, so how do you how do you see this profitability shaping up for for this Khari season? And what is the reason driving this kind of numbers? I think in SFS, two, three things have been the focus area for the management. One is in terms of our pharma reach, it's been very strong. Second is our R and D activities are leading to newer products, which give better value to the pharma. So they are also happy to buy the product and carry it forward. And third is, I think that we've actually been able to over the years build up some credibility with the market.

25:16 And they know that if Shriram Farm Solutions offer something, it will be good for the farming community. So I think across the board that way it's a good situation. Our R and D focus is now the key issue, which is going to be a major driver going forward, where there's a lot of stress on the management side. Regarding the issue of how the future is going to hold or regarding the monsoon, as you were saying, you're right, July has been good. But if one sees the map of India, it has been good in pockets. It has not been across the board. That is a big challenge. And in the last couple of months, rain in some areas have been quite low because of which the sowing of crops has been pretty low by almost 15%, 20% has been lower sowing, which means that the demand is also a little low. And we really don't know based on the projection of El Nino, what's going to happen in August, September.

26:12 We sincerely hope that the rain is not going to be too short. But in case we do get balanced rain or adequate rain, it will be a very positive step, not only for the industry, but for the economy and for the farmers. Most important for the farmers, they are the ones getting shortchanged by not having the monsoon coming in properly. So to be honest, it's very difficult to give a projection of how things will evolve because of the external parameters. But our efforts and focus is very strong in terms of making sure we are supplying good products, new products and have a good relationship with the entire farming community to provide the right products. Sure, sir. Got that. Sir, on the sugar business, so we've seen almost three point five years, four years that there is no price hike on the ethanol side.

27:06 You also mentioned about INR 2,000 crores of installed capacity. How do you see the profitability now moving in this segment? And are we now... Is this going to divert more on the grain side instead of, you know, diversion of sugar? Of course, because not sugar prices are also far more remunerative. So, you know, will we be operating more on more ethanol plants on maize and keeping sugar for the actual sales? Prateek, I think we have a defined capacity for grain, right, where we can go up to two sixty Kt for grain. So we will optimize wherever we get better margins. And it is very dynamic because currently, the margins in Hello? And all Yes, sir. Yes, sir. Yeah. So I think currently, the margins in mid and all are good.

28:10 And therefore, it makes sense to optimize green base to whatever extent up to two sixty. But then it will depend how it pans out, what the government policies are. But then we don't plan to grow our capacity in any case. Okay. Understood. And, sir, I'm just on this tax, there's a 400 odd crores of tax. We also received some deferred tax has to do there. But it's only one time I'm guessing. And what was the... This whole thing about... I mean, why did you have this? This is essentially... There was a difference in the way we were... The paying tax or filing our returns and in our books of accounts, there was a difference. There was some additional gain that we were factoring in when we were filing our tax returns.

29:04 However, since that gain was not determined, we were not taking into books of accounts. Now when there's a positive from ITAT is when we decided that we should take it into a books of account. So it's for a period of, like, almost six years. And this is cash. This is future cash because this is all matted of INR $3.76 crores. And we will get it over a period of time. And what's happening as a result of that, the two significant changes. One, we moved from last year, 35% tax bracket to 25% tax bracket. On top of the 25% tax bracket, we've got this math. So effectively for, let's say, anywhere between five to ten years, at least five, I can see in the foreseeable future, my tax rate will be effective tax rate will be 19% or tax outlook will be 19%.

29:57 Okay. Got it. That's helpful. So we can get them around 90 odd percent as your effective tax for at least five years? In terms of the tax outflow, although in our income or in a P and L still reflect at 25%, our cash outflow will be 19%. 19%. Rising math. Yeah. Oh, understood. Understood. So that's it from my side. Thank you so much, and wish you all the very best. Thank you. Thank you. Before we take the next question, a reminder to participants that you may press The next question is from Abhinav Bhardwara from Acquitat Investments. Yes. So my first question was regarding the sugar business.

30:47 I just wanted to understand, I know it's difficult to predict, but the next year crushing outlook and does this harvest also get impacted by Reen's sugar harvest? So, I don't know if it's early to really talk about given the way the monsoon is progressing. It is too early to predict what the next year's gain harvest will look like. And what do you think the current prices are around $44.50? Do you think it could be at that price or it could reach somewhere higher considering the deficit? We expect it to... You know, it's it's a bit the same, it should be found Okay. For next couple of months. Yeah.

31:33 Okay. And next is regarding the urea business. So since the global urea prices have risen a lot and recently, again, the warrants were down. So what is your outlook on urea and any outlook on urea and margins in that business? See, in India, any urea manufacturer is governed by the Fertilizer Industry Coordination Committee rules of Ministry of Fertilizers. So we are there where they come in and look at the details of all our elements of cost and then they will draw at a particular return. So frankly, the international prices do affect India as an economy because instead of buying urea, which was, let's say, delivered at $450 $500 per tonne, two months ago, it reached $900 a tonne.

32:22 So the total subsidy amount government has to allocate for fertilizer jumps up dramatically. But for domestic manufacturers, I must complement the government where they have been quite up to date in terms of ensuring that the subsidy, which is paid to the farmer through the Indian industry, that they are paying the industry quite on time. So any international price will not really affect the domestic industry. There can be an issue sometimes of cash flow because of the higher gas prices. But that's really a pass through again based on government policy. So otherwise, domestic industry is not really impacted by the high international urea prices. The next question is from Shriram, who is an Investor.

33:16 Please go ahead. Hello. Yes. Please go ahead. Can you hear Yes. Yes. Our focus is what do you see the vision of our company for the next five years, right? Where is the focus area of the company? Is it mainly chemical business or the other segments also? Because majority of our EBITDA is coming from chemical business and vinyl business. So what is the plan, what is the plan company wants to do? See, I mean, a macro level, as we mentioned before, as a group, our objective is to grow consistently over a period of time. We have invested a lot in terms of growing each of our businesses, except two, which is urea and cement.

34:08 All our other businesses, we've invested money to grow them on a periodic basis based on the market demand. Secondly, our focus is very strong on value added businesses, like we've done in our chemical business, where we've got into epichlorohydrin, hydrogen peroxide, now epoxy, we're looking at aluminum chloride, etcetera. So we want to get into the value added business, that's part of our strategy. That's the second part, which will continue growing. Third, we've also been looking at how do we sort of give strength and growth to our business by where possible buying or taking a shareholding in companies which are affiliated to our businesses, either as supplier or as a buyer. So for instance, you are aware, in October last year, we bought epoxy factory in Gujarat to add value to our chemical business.

35:03 In our Fenesta business, we've already taken a shareholding percentage in a company called DNV, who make the metal parts for the hinges and handles, etcetera, etcetera, for our business. We've already done that over there. So we are continuously looking at growing our businesses across the board. And we are optimistic on the Indian economy. We are bullish that with our population, with the awareness of the youth and social media, the aspirations of our people, we are bullish on the Indian economy, and we'll continue growing at the rate like we've done over the last many years. Being in commodities, there are ups and downs, that's part of the business cycle. But our job as management is to be cost competitive, be world class in our manufacturing process and costs and have a happy customer.

35:53 So that's what we are focusing on. In terms of cost of production, are you can you disclose it, what is the price of the power you are buying currently, like for caustic soda all those things? Because that represents whether you are the lowest cost producer or the medium cost producer, because so many new capacities are going to come up like from Relay and Pradhani Group. We are planning for the caustic and PVC businesses. So how do you see the land in that area? Are they in the middle or are they in lowest cost? We are amongst the lowest cost producers and we continue to work on seeing that how do we further reduce costs.

36:39 See for us, essentially, the key cost for our chemicals and vinyl business. And if you see the trend of last few years, we have had in 2019, we came up with a new power plant. In 2024, 2025, we again had a 120 megawatt new coal based power plant, which was more efficient, and we would close down our inefficient plant. And now we're looking at 176 megawatt of renewable energy, a part of it, more than half of it is already coming. So it's like a continuous journey where we keep making our cost per cost more and more efficient and best in the industry. That's where we are. Can you disclose what is the cost of cover for us per kilowatt hour? Different for different sets for renewable different. So I don't think it is right to give and for each location is different.

37:33 So I don't think it is right to give a single number. We're very on each product and each location and each source. No, no, mainly for caustic business? Yes. So there also there are multiple costs depending on the source and the location. Okay. What is the plan for further utilization of chlorate because that is like reducing our EBITDA a lot. The easier realizations are lower for us. So is there any bigger plan like Excuse me. Could you kindly repeat the question before get it? Yes, sure, sure, sure. But what is the further plan of utilizing the chloride, which comes out of this caustic business? What is the bigger PVC plant, because yes, chlorine.

38:21 Because PVC plant further utilize it to 50% something like that? Yes. So you're absolutely right that chlorine integration is very crucial for the business, for the chemicals business, especially in the Indian context. And over the last few years, we have actually strategically increased significantly our chlorine integration. So after the current projects are completed of aluminum chloride, calcium chloride, etcetera, we would have almost 50% of our chlorine will be captively consumed. And in addition to that, we have strong partnerships with our customers through pipelines in our Baruch location.

39:12 So there's direct pipelines and also we've done some tie ups with customers in the region as well. So if we add those also, then almost 85% of our chlorine will be tied up once all these projects are commissioned. Thank you. Shriram, for further questions, we request you to rejoin the queue as there are several participants waiting later. We'll take the next question from Subankaraja from SKS Capital. Please go ahead. Hi. Thanks for the opportunity. Just first question is for instance. Finista, I mean, order intake for the quarter was just 4%. Is that slightly on the lower end of what we expected? And what is the growth outlook of this business?

40:04 Could you kindly repeat the question, please? Can you please speak from the so you can avoid that, yes? Sorry, I missed you, Puneet. Okay. No, I'm asking about Finista, order intake for the quarter was just 4%. Is that slightly on the lower side? Or is that what we expected around that level? And secondly, what is the growth outlook of this business? So see, this business has seen robust growth last year as well as in the current quarter. And we believe the robust growth will continue. The total order book is close to about 1,000 crores, if I put altogether.

40:51 So I think it is pretty robust in terms of growth. Yes, you can say it is even on the lower side, lower than what we would have expected, but it's also because of the West Asia crisis. There are people who are delaying some bit of their decisions. But we feel very strongly about the business. It is growing. It is setting up new platforms to ensure that we're not depending only on just one kind of a business to grow overall. Okay. I missed the initial comments. Why has the overall debt level gone up in this quarter? Why has? The overall gross borrowing has gone up. So it has not gone up this quarter.

41:38 That was a comparison for the entire year from June 25 to June 26. And over this period, we have done two acquisitions adding up to close to about INR $4.50 crores. On top of that, there has been CapEx of close to around INR 1,000 crores. So that is the reason why debt levels went up. But there are debt to EBITDA is close to about INR 1.1. So now we don't have any CapEx coming up, right? I mean not announced anything yet. Whatever ongoing CapEx is happening is happening. Yes. Amit, so finally, I mean, where do you see this overall net borrowing by the end of the financial year?

42:27 It should be around similar levels, not a significant reduction because we do have CapEx of around INR 1,000 crores this year. And yes, there will be some reduction by about INR 200 odd crores probably. But it will all depend how the sugar season pans out, how much is inventory. So there are multiple factors. But what we ensure, Shivankar, is that our debt to EBITDA doesn't reach 1.5. So we are more governed by that so that the financials remain healthy because having some optimal debt also means that we're not growing in the right direction. And our credit rating at this level of debt also is AA plus.

43:31 The next question is from Sandeep Bed, who is an Individual Investor. I wanted to understand the status of the demerger plan, which you had announced a few quarters back. Yes. So as a group and as we've discussed with our Board, we are clear that we do want to work with the demerger reorganization of the businesses. Having multiple SKUs within the business, there are certain issues which have to be sorted out. So we are working on that very actively. But we are clear, we will move ahead with the demerger. It's difficult to give a time frame right now because of the internal work which is going on. But we are definitely moving on it quite aggressively.

44:21 Does one expect this to certify in this financial year? The process itself takes time. But our objective is, yes, we make the application to the government in this financial year. Okay. Secondly, I wanted to ask about the Bio Seed business, which has been significantly impacted due to the delayed monsoons. Now that monsoon has been decent in the month of July, do you expect some recovery in this business in the second quarter? The large part of it is lost. I mean, the monsoon has been decent in the month of July. But as we mentioned, as Chairman mentioned in his opening remarks as well, that is patchy. And in our region where we sell our products or products are suitable for that region, there, the showing has been lower than 15%, 20%.

45:15 So overall, Monsoon might have recovered some a little bit, but still it has been very patchy, excessive in some places, still dry in a lot of places. Well, that was the last question. I would now like to hand the conference over to the management team for closing comments. Thanks. Ladies and gentlemen, thank you for your participation in our earnings conference call. Even as the global landscape has become more complex and unpredictable, our conviction in India's growth story and in the strength of our businesses remains unwavering.

46:11 In these turbulent times, resilience has become an essential competitive advantage. We are also leveraging digital technologies to enhance productivity, strengthen decision making and improve customer engagement. Thank you once again for your continued trust and support. Goodbye. Thank you very much. With that, we conclude today's conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines. Thank you.