DCM Shriram (NSE:DCMSHRIRAM) Q2 2027 Earnings Call

0:01 Ladies and gentlemen, good day, and welcome to DCMSHRIRAM Limited Q2 FY 'twenty seven Earnings Conference Call. As a reminder, all participant lines will be in a 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. Siddharth Rannekar from CDR India. Thank you, and over to you, sir. Thank you, Steve. Good evening, and welcome to DCMSHRIRAM Limited's 's Quarter Two and H1 FY 'twenty seven Earnings Conference Call. Today, we have with us Mr. Ajay Shriram, Chairman and Senior Managing Director Ms. Ajith Shriram, Joint Managing Director Mr. Aditya Shriram, Deputy Managing Director and Mr. Mister Amit Agarwal, group CFO of the company.

0:58 We shall commence with remarks from mister Ajay Shriram and mister Ajith Shriram. 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 available in the stock exchange website. I would now like to invite Mr. Jayshiram 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 Q2 and H1 financial year twenty seven results.

1:51 I will commence with perspectives on the business environment and the strategic updates, post which Vikram will share views on the financial performance. Globally, the second quarter of financial year twenty seven operated against the backdrop of sustained structural friction. We continue to navigate an environment characterized by volatile energy prices, shifting tariff pressures and tighter global liquidity, driven by higher interest rates by major central banks, including the Reserve Bank of India. The geopolitical landscape remains highly complex, demanding active revaluation of supply chains and trade exposures.

2:37 At the same time, digital technologies and artificial intelligence are becoming increasingly important drivers of productivity, innovation and competitiveness. For industrial companies, the opportunity lies in applying these technologies to improve operating reliability, resource efficiency, decision making and customer response. Amidst the global calibration, India's position as a reliable, high growth economic anchor has only strengthened. Q1 financial year 'twenty seven real GDP grew at 7.8% and RBI subsequently projected financial year 'twenty seven real GDP growth at 7.1%, driven by services, private consumption, manufacturing and infrastructure led investments.

3:34 Simultaneously, we faced immediate physical challenges on the ground, particularly within the agricultural and rural sectors driven by El Nino. Reservoir stories also remain below the previous year and the long term average across the country. This will influence agri inputs and rural consumption and roughy cropping conditions over the coming quarters. For us at DCMSHRIRAM, this environment reinforces the value of staying close to what we can control, integrated operations, cost discipline, working capital management, digital execution and calibrated capital allocation. We are translating this strategy into action through several key project announcements.

4:25 First, optimizing cost management and carbon intensity. We are establishing a 40 megawatt peak solar energy plant at Kuta for INR 145 crores and installing filter presses in our cement plant at Kuta for INR 60 crores. Second, driving operational reliability. We are debottlenecking operations at Baruch and Kota to improve energy efficiency of our current operations and increase caustic capacity at a project cost of INR 120 crores. Third, advancing forward integration. We are setting up new lines for manufacture of specialty compounds of PVC, specialty medical grades and diversification into the manufacture of halogen free flame retardant grades of polymer compounds in our JV, Shriram Limited, at a total cost of INR 133 crores.

5:28 Our investment will be up to INR 50 crores as equity into the JV. A conservative approach to our finances remains central of how we run the company. As interest rates remain elevated, our healthy balance sheet, comfortable leverage and adequate liquidity positions us well to manage volatility. Crucially, our growth strategy is intrinsically linked to our sustainability commitments. We are advancing our ESG road map across resource efficiency, energy transition and meaningful community engagement. By embedding these principles within our operational DNA, we are ensuring our business remains agile, responsible and future ready.

6:18 This balanced approach keeps us well placed to pursue organic and inorganic growth opportunities and deliver long term value for our stakeholders. I shall now invite your attention to industry dynamics across our businesses. First is Chemicals. Globally, the Chemicals industry environment remains volatile during the second quarter of financial year 'twenty seven. Unpredictable energy and input costs, along with uneven demand across major manufacturing regions weighed on industry economics. In India, underlying demand remains supported by domestic consumption across textiles, alumina and infrastructure.

7:04 Capacity additions over the last few years have been well absorbed by the markets. However, future capacity additions may create near term supply demand imbalances and put pressure on prices and margins. Given the headwinds, our chlor alkali operations delivered a reasonable performance. Capacity utilization during the quarter stood at 89%. Our flaker capacity provided valuable market flexibility, enabling us to export our caustic production despite disruptions in global supply chain. While caustic prices corrected in line with the global markets, improved chlorine realization partly offset the impact.

7:50 In Hydrozyl Peroxide, higher natural gas prices raised production costs across the industry, which in turn supported firmer product prices. In Advanced Materials, operating rates were higher across product categories as we continue to deepen our market presence. The segment witnessed sharp swings in both product and raw material prices with the steep increase in Q1, followed by an equally sharp correction. This led to liquidation of high cost inventory and temporary deferment of customer demand. These pressures have now largely stabilized, providing a more balanced operating environment going forward. During the quarter, we commissioned the 100 tonnes per day aluminum chloride plant at Baruch, taking the total capacity to two fifty tonnes per day, along with partial commissioning of the calcium chloride plant, taking us to 50% of the plant capacity, that is 133 tonnes per day out of two sixty six tonnes per day. We also commissioned the 68 megawatt hybrid renewable power project at Kota, further strengthening our structural cost competitiveness.

9:08 The 58 megawatt hybrid renewable power project under group captain SPV and Varus is progressing as per schedule. Vinayan. The Middle East conflict kept raw material costs and subsequently PVC prices high. Weak demand weak construction demand going to monsoon and cautious trailer bookings going to higher prices dampened overall demand. The policy support toward introduction of the minimum import price of U. S. Dollars $7.66 per metric ton helped domestic realization and a weaker rupee further supported PVC prices.

9:54 Our PVC volumes and realizations both improved meaningfully. Carbide also performed well with raw carbide production reaching the highest ever level and sales and realization up year on year. Near term PVC prices are likely to remain influenced by energy costs, currency movements, global supply conditions and domestic trade policy measures. Domestic demand should improve after the monsoon. However, global demand may get impacted by housing demand. Sugar and ethanol. The global sugar market is expected to move into a deficit of around 2,600,000,000 metric tonnes in the year 'twenty six, 'twenty seven season compared to a surplus of about 2,100,000 metric tonnes last year.

10:46 Uncertainty of crops in India and Europe and higher diversion of chain to ethanol in Brazil could widen this deficit further. For sugar season 'twenty five, 'twenty six, India is expected to close with a stock of around 3,650,000 metric tons on production of 27,600,000 metric tons after diversion of around 3,100,000 metric tonnes of ethanol, domestic consumption of 28,400,000 metric tonnes and net exports of 650,000 metric tonnes. For the coming season, market estimates point to gross production of around 27,000,000 metric tons with some downside risk. Domestic sugar price is currently around INR 4,800 per printer and is expected to be range bound.

11:39 On the ethanol front, the tender for the 'twenty six, 'twenty seven ethanol supply year includes ethanol made only from sea heavy molasses and ships supply towards grain based feedstocks. Ethanol procurement price of maize based ethanol has been reduced, while that of sea heavy based ethanol has not been revised despite the increase in sugarcane price. With installed capacity of about INR 2,000 crore liters, already well ahead of demand, these developments significantly affect the sugar industry's investments in ethanol. The sugar the policy support with respect to fair share of allocations for sugar based feedstocks and ethanol prices aligned with sugarcane costs are now critical to support the long term viability of the sector.

12:35 Ferresta Building Systems. Ferresta Building Systems sustained its growth momentum, driven by healthy volumes across both retail and project segments despite a volatile real estate market. Margins continue to reflect the changing product mix, upfront investments in scaling our new business platforms and higher input costs. During the quarter, Phase one of aluminum extrusion plant at Kota was commissioned, while the second phase is in the process of installation and commissioning. Work on the wooden doors facility is moving as per schedule. Moving on, the AgriInput business portfolio comprises of Shriram Farm Solutions, fertilizer and bio seed businesses.

13:23 First, Shriram Farm Solutions. The quarter was shaped by one of the weakest monsoons in over a decade, driven by El Nino conditions. Although late season rains helped sowing catch up in the near normal levels, a shortened application window, moisture stress on crop and tighter farmer liquidity kept demand for agricultural inputs selected. The SFS business witnessed a decline in top line in Q2 financial year 'twenty seven compared to Q2 financial year 'twenty six, largely a counter difference in timing of sales of research wheat seed. The portion of the timing related impact may reverse in Q3, subject to crop conditions and channel demand.

14:13 Notwithstanding these conditions, the crop protection vertical registered healthy growth, backed by a differentiated product portfolio and ability to tap weather driven demand. The business introduced four new products, including a promising wheat variety from our in house R and D, while our digital campaigns reached over INR 1.5 crore farmers. Fertilizers. Natural gas prices for the urea business rose further during the quarter as the West Asia conflict continued to disrupt LNG supplies. Plant operations remained stable, and we continue to focus on improving energy efficiency, maximizing urea production and keeping tight control over fixed costs.

15:04 The increase in gas prices has raised the working capital requirement associated with subsidy receivables. Given the high gas prices, the indigenous urea fertilizer subsidy requirement for the year could be higher at INR 1.2 lakh crores versus the year end budget of INR 85,000 crores. Bioseed. The Kharif season remained very challenging for the bioseed business due to a broader climatic pressure, especially in South And Central India. Despite the late recovery in rainfall, acreage under key crops, such as corn, cotton and paddy, stayed below last year's level. This weighed on corn and paddy volumes, while higher input production and logistics costs added to margin pressure.

15:56 Our cotton volumes are better than last year. The margins are also impacted by provision for doubtful debt in India and seed discard in Philippines. We remain focused on portfolio quality, inventory discipline, collections and strengthening our market position ahead of the next planting season. I will now request Vikram to provide the financial perspective. Vikram, over to you. Thank you. Good evening, everyone. I will now take you through the financial highlights of Q2 and H1 FY 'twenty seven. Net revenues, net of excise duty for Q2 FY 'twenty seven were at INR 3,977 crores versus INR 3,272 crores in Q2 FY 'twenty six, an increase of 22% year on year, driven by Chemicals, Vinyl, Fertilizer and Fenesta businesses.

17:04 PPDIT for Q2 FY 'twenty seven was at INR $3.19 crores versus INR $40.08 crores in Q2 FY 'twenty six, mainly due to higher input costs in chemicals and lower earnings in the agri input businesses. The previous year's quarter also included a onetime positive impact of INR 76 crores towards incentive received from the government of Gujarat in the Chemicals business and INR 15.5 crores in Sugar business on account of upward revision of power rates in the last year. Chemicals. The business reported an increase in revenue of 47% year on year.

17:51 Caustic soda volumes were up 2%, while ECU prices were higher by 6%. New products, including hydrogen peroxide, aluminum chloride and glycerin to ECH to epoxy, advanced materials value chain contributed positively towards the top line. The PPDIT for this quarter stood at INR 158 crores against INR $2.54 crores last year, as higher input costs more than offset the benefit of better realization when volumes. Further, last year, there was onetime positive impact of INR 76 crores towards incentives from the government of Gujarat.

18:39 Vinayant. Revenues increased by 20% year on year, driven by higher volumes and realizations in both PVC and carbide. PVC volumes rose 29% and prices 25%, while carbide volumes and prices were up 1516%, respectively. PPDIT was higher at INR 51 crores as compared to INR 12 crores last year, led by better volumes and realizations, partially offset by higher input costs. Sugar and ethanol. Sugar and ethanol business revenue net of excise duty was higher by 10% year on year.

19:26 Domestic sugar prices were up 14%, while volumes were lower by 6%. Ethanol volumes were up by 24%, a timing difference. PVDIT for the segment came in at INR 62 crores as against INR 33 crores last year. In Q2 FY 'twenty six, there was a significant positive impact of INR 15.5 crores on upward on account of upward revision of power tariffs by UPPCL, as mentioned earlier. Finesta Building Systems revenues increased by 22% year on year, with the project vertical leading the growth. PBGIT for the quarter was up 15% at INR 49 crores, although margins were slightly lower.

20:19 This was due to the change in product mix, elevated input costs and higher fixed expenses for setting up new revenue platforms for the future. Shriram Farm Solutions revenues declined by 10% year on year due to lower volumes across the seed and specialty nutrition verticals. PBDIT for the quarter was lower at INR78 crores as against INR106 crores last year. Fertilizer revenues were up by 40% year on year, led by realizations, which were higher by 46%, reflecting higher gas prices. PBDIT increased by 25% to INR 25 crores, driven by better margins on account of higher gas rates and improved efficiencies.

21:15 Outstanding fertilizer subsidy was INR $4.46 crores on September 30 as against INR 187 crores last year. Bioseed. The Bioseed revenue was lower for the quarter and half year as severe El Nino conditions weakened demand across the industry. PVDIT for the quarter stood at negative INR 41 crores against negative INR 7 crores last year. The decline reflects lower volumes, which increased the burden of fixed expenses, along with higher provisions for our doubtful debts in India and seed discards in Philippines. At an overall level, the company's net debt is at INR $9.17 crores as on 09/30/2026, as against INR $7.73 crores as on 09/30/2025.

22:14 Return on capital employed for September 2026 came in at 12% compared with 15% last year. The Board announced an interim dividend of 200%, amounting to INR 62.38 crores. With several of our key projects including aluminum chloride, calcium chloride, aluminum extrusion facility in Finasteride, Kota renewable power project now fully or partially commissioned, our priority is to ramp them up efficiently and capture the full benefits of integration across our various value chains. Sustainability remains central to this journey. Our growing renewable energy capacity is strengthening our energy security, advancing our decarbonization goals and improving long term cost competitiveness.

23:10 That concludes my opening remarks, and I request the moderator to please open the forum for questions and answers. Thank you very much. Thank you, sir. We will now begin with a question and answer session. Our first question comes from the line of Ria Mehta with Equitas Investments.

24:23 Please go ahead. Thank you so much for joining the opportunity, and congrats on the first and last call. Just wanted to understand on the chemical division, which is caustic and other non caustic chemicals. We've seen more margin pressure, and you mentioned that there's input pressure. So could you explain the breakup of this negative margins on on a BIOS basis, a decline? Even adjusted for the exceptional items, there is a decline. Just wanted to understand what constitutes. Yeah. So we have... In the chemical business across the board, whether we look at the new chemistry that we got into as well as the new products that we I mean the existing lines of business, which we expanded. So what has really happened is that the cost of production has in this quarter, the cost of production has gone up in the range of about 6% to 8% across the chemistries.

25:30 And selling price has come off in the range of around 4% to 6%. So effectively, the margins have got impacted all across, except one or two smaller products. But for larger products, it is not impacted. The only product which is differently done better is hydrogen peroxide because there, our hydrogen is in house and the prices went up because of the gas prices. That was dealing. For rest of the products, that's how the margins have come down. Could you help me with the specific raw material prices, which have increased in the cost of production? Because as I understand, the major cost of production is powered for us, and we have entire length of power for costing division with the PPA time. So where is the incremental cost of production coming from? And in which particular chemical and if you can go into specifics of that?

26:26 So it will, again, vary on the product. What you said is, right, power is the key raw material. And there, the coal prices have gone up significantly, and they're still going up, right? So probably we keep seeing the impact of higher costs, but that cost is primarily impacting our caustic business because that's where the energy intensity is high. Whereas, for example, in case of epiglurohydrin and the downstream of epiglurohydrin, there, the glycerin prices for lamps, they're quite volatile. So in the last quarter, we were consuming high cost glycerin. Now they have come down. So it's pretty volatile given the West Asia crisis, the freight and all that is so disrupted that it's very difficult to say how the prices will move. But yes, each the chemistry has a different cost curve and the key cost drivers.

27:27 Also, the last question remain for the technical decision. What were the incremental depreciation and account of the new work of plant which have been commissioned going forward? Incremental? Quant... Depreciation. See, in the half year, the incremental depreciation for the quarter, for example, the incremental depreciation was about the total increase that you saw in depreciation, 10 came from the chemical business. Going forward, I don't think it will be very significant, at least in rest of the year, given the fact that most of the projects have been capitalized. So there will be some increase because calcium chloride and aluminum chloride got capitalized in Q2, but nothing very significant increase because of that.

28:15 Got it. Coming to the PVC demand, so we've been listening to call the supreme and all those companies, and they're mentioning the whole demand destruction from there and reducing the volume guidance. With this kind of pricing for PVC, what are the current prices currently? What is the trend going forward? And what do you see of this demand? So, see, the current prices of the PVC are in the range... The domestic prices are in the range of around, 95,000 to INR lakh a tonne. So those are the kind of prices currently prevailing for PVC. What was the next question? I just wanted to understand the demand side of it with the current PVT rising. They've been so high. I think the last cycle of the people around 90,000, and we are getting... We saw past that peak. I just wanted to understand how the demand is turning up.

29:15 See, demand is because as was mentioned in the remarks as well, that the demand will start picking up now that the monsoons are over. So Q3 and Q4 are good season for PVC. But we're not seeing one we are not a very large producer of PVC. So we are not seeing any challenge. We are producing 100% of our capacity, A little more than that Right. And the demand is good for us. Got it. And do you see the China dumping happening again considering that the prices have been above MIPN with the oversupply still being in China, but they will be starting to dump in again. So as I mentioned in my opening remarks, we already have a MIP of $766 plus there's an import duty also.

30:14 So with that, the prices today, we expect it to be quite stable. Okay. Congratulations on that. My last question is on the sugar division. So I just wanted to understand, which is the mandate of the heavy, how much crude liters of ethanol can we make from sugar from the heavy? And second was for the major division. As a current newer rate notified by the government, what is the kind of con breakeven cost we are looking at? And since con is also increasing, will we be going for midday? So, see, with the...

31:00 In terms of allocation, in terms of what we can manufacture, so our total capacity to manufacture is in the range of around 15 crores to INR 16 crores. Out of it, almost 50% is based on the molasses and 50% is based on grain. Now as far as the maize prices, small base maize price coming down and the maize price is still going up, so there will be shrinkage of margins. So we will try to optimize the FCI based rice ethanol is what we'll try to optimize to whatever extent we get the allocation of FCI rice. So that's what our strategy will be. But it's very dynamic. See, frankly, given we feel that the feedstock is gonna be a challenge for ethanol this year. So let's see how it pans out. It be very dynamic.

31:55 And we would be able to easily manufacturing support eight to nine... Eight lakh eight liter from. Right? Yeah. Yeah. We should be. Got it. As a service in order book was a little separate this time. Was it a function of some particular? So, see, I I think for Finister now, order book, unless it is a significant fall, order book is becoming... It's not so relevant because what happens is that project businesses become almost like 45% of the business. And that is what can cause some bit of volatility in the orders. So one day, you have a large order and then the order book looks big. Maybe two quarters down the line, that order book might change because that order was only there and some of the other orders get executed.

32:49 So I think but it's still a very healthy order book. We don't see any challenge. So is it continuing as new products? Yes. Sequentially, it is better. That is one. And obviously, there are new products, which are facade is gaining ground, aluminum windows are gaining ground, extrusion has been commissioned, that will also gain ground. So I think that has been our strategy to build platforms so that the growth is balanced and doesn't get impacted by one kind of or one category of product. By last quarter, we'll also be doing wooden doors. Right. Right. Right. Category also, which will add to the portfolio. I think Panista has been fantastic for us and going forward looking forward to seeing better numbers.

33:35 Thank you. That was my question. I'll get back in queue for further questions. Thank you. Thank you. The next question comes from the line of Jayanam Gilani with Fund Investments. Most of my questions have been answered. Just one question was that could you give an update on the demodule process as we are planning? Advanced. So see, demodule process is on. The management is working on it. As I had mentioned in the previous interaction as well that given the complexity of the organization being legacy organization, these businesses are quite interlinked.

34:32 And we don't want to roll out a scheme, which we might have to make modifications later on. We try to filter that and now we are in a pretty advanced stage. So we hope to get it to the board very soon. Okay. So we can expect that in two to three quarters, right, in q one FY twenty eight, would that be a good time line? Yes. That's what we are targeting. Thank you. Thank you. Getting it to the portal. Thank you. The next question comes from the line of Rajakumar Vedinathan with RK Investment. Please go ahead.

35:28 Sir, I have two questions. The first one is on the Vinyl segment. So I see that the PVC realizations have gone up quarter on quarter, and even your revenues have gone up, but there has been pressure on your margins. The PVDIT margins are almost 21.9%, we're sorry, 22% something in the previous quarter. So just wondering what is the outlook for this segment? So see, one, as far as my information goes and then information that we provided, the margins have improved significantly in both year on year as well as quarter on quarter because the product prices have improved. Yes, the costs have also gone up, but then the increase in relations is more than the increase in cost. That is point number one.

36:18 Going forward, it's difficult to say, although we are hopeful on the prices being formed, as we mentioned in the Chairman's speech as well, that there is minimum import price, which should keep the business healthy. But what happens to the energy prices because energy is almost 60% to 70% of the cost of production. Now that is one issue. But what we are doing as a process is also that, see, these are momentary that energy prices have gone up and things like that. But what we are doing is getting more and more of renewable energy, which will like almost the entire renewable energy in Kota, which we were looking at almost average 32, 33 megawatt, that is about to get fully commissioned. Part was commissioned, part is about to get commissioned in maybe next few days.

37:12 So all those steps have been taken to optimize or reduce our cost of production. But still, coal still forms the majority of the cost and the cost of that is going up. So let's see what happens. Hopefully, it should be good. Okay. So any possibility of margins improving or it will be maintained at current levels? It will all be a function of how the price moves from here. If it remain at this level, then the margin should widely come down. If it goes up, then probably, yes. Okay. Okay. And the second question is on the sugar segment. So I heard the Chairman, sir, talking about the overall outlook for the country as a whole. So I just want to know for DCM per se, what is the production that you are targeting? And how much reduction are if you can give some color on, we saw in last year, how much you are expecting?

38:10 So it's a little too early. We haven't even started crushing. We will be starting crushing in for some of our mills in the first week of November. So it's a little too early. Although if we look at the India scenario and as well as scenario in UP, obviously, India scenario is that the gain availability will be low given that there has been drought in drought like conditions in Maharashtra and Karnataka, which has impacted the cane. And in UP, there have been recent rains in the month of September because of which there have been lodging of cane. So that can also impact. But then, let's see, in our region, how it works out because it's very within U. P. Also will be region to region. So probably we'll get to know in next two months' time, two, three months' time as to how it matches. Okay.

39:01 And is it fair to assume that there will be pressure on both the cane crush volume as well as on the recovery rates? So it's too early to comment. It's all it depends I mean, it also depends on what the fog is like in the winters. That will impact the recovery. So as the climate progresses, what is the sunlight and all that will impact the recovery. Okay, sir. Thank you so much. Thank you. Thank The next question comes from the line of Saket Kapoor with Kapoor and Co. Please go ahead.

39:49 Yes. I understood that. Am modeling? Hi, Scott. Yes. Firstly, in terms of the caustic soda price trends, what have been the current how are the current markets shaping up for quarter realization? Think there was a change post the first quarter. But in our DCU realization are the ones which we have given about that shows an increase. So can you explain how the price trend has been? Other question was pertaining to aluminum chloride realization, how this product price realization is shaping up and what is our current utilization level? Yes.

40:36 So see, what we have given in our investor presentation is the ECU. What we were talking about is that the caustic prices have come down. However, the ECU is a mix of caustic and chlorine. So the chlorine prices have actually been the negative chlorine prices, which were in Q1 around INR 8,000. I don't have the exact number, but ballpark around INR 8,000. In Q2, they came down to around INR 5,000. And Negative five now they are further lower, so less than negative 5,000. So that has been the reason why it got offset. Okay. And pertaining to the aluminum chloride realization set and and the volume?

41:30 I don't have the exact number here. Again, as I said, aluminum chloride is one is a small part of the business. And the reason why aluminum chloride is there is to support the caustic utilization. And caustic utilization has actually gone up. If you see our utilization vis a vis same period last year, cost utilization was around 79%, 80%. And this year or this quarter, the utilization was 88%. So that shows the success of having aluminum chloride plant, which has helped utilization along with the market development activities as well. Also the aluminum chloride prices are closely linked to the aluminum prices. So there is a correlation there. So if the cost, which is aluminum for us is a cost, if that goes up, then the aluminum chloride prices also don't move up. There may be a bit of a lag. So the margin depends on the prices, of course, but they are reasonable.

42:31 Right. And currently, what is our captive consumption of chlorine? And what is the road map ahead with that, say, two years down the line, what would be the captive number likely? So for us, actually, we have two locations, just again, Baruch and Kota. So in Baruch, after all our projects are commissioned, we expect to have a 45% captive consumption of chlorine. And quota, it will be in the range of 62%. But additionally, what is a big strength for us, especially in Baruch, is that we have a number of customers or partners who have grown with us over the last thirty years.

43:20 So they are our pipeline customers, and they consume approximately 27% as well. So if we put those together, it will be in the range of 70% between captive and pipeline customers for us. Correct, sir. And just to take into account cost of soda prices, how has the the the price trend been the realization for first quarter versus the second quarter? What what have been the actual decline of the import parity prices? If you can give a number to the team? And the second question, I think, addition to it is that, have we heard or seen any announcement from a big player like Gratian giving, outlining their strategy that they would be they would be not selling any further clothing into the market over a period of time and creating that ecosystem wherein entire clothing would be... It's like they are the largest player.

44:22 I I... So correct me here. I have have heard from them and they did, but I'm not confirmable. So would like to have your thought process of how the largest player is... Thought planning is regarding clothing consumption completely self consumption by then in times ahead? So to your first question, actually, what we look at is the ECU price, which is the combination of the caustic price and the chlorine price. And I think we've already shared earlier in the call call that caustic prices have been a rate bound, but chlorine prices have moved up. They were more negative. Now they are less negative or closer to zero. So overall, ECU prices have improved.

45:09 Of course, our costs have also gone up because it's linked with energy and energy costs have gone up overall. So that's up to your first point. We will not be able to comment on any competitor or any other player's strategy. That would not be fair for us to say. But our focus is always that how can we remain competitive, leveraging optimizing our cost structure, focusing on intelligent integration, so that we remain robust even in the down cycles and we enjoy the up cycles that are there. Right. And last point on the same, sir, what would be the import number for the nine months for the six months of cost for the country?

45:59 How much has been imported? Think we may not have the country's import numbers right now directly with us. But if you can reach out to our team, they'll be able to share those numbers subsequently. Okay. Lastly, big corporate out there are also contemplating huge capacity for both so for cost share, I think so, the largest corporate in the country. So how will that change the entire ecosystem going ahead with with players like us who who are selling cost... Caustic soda and their their main attraction would be the Florian realization for the PVT integration. So what is the current customer of the management in terms of those big investment coming in the sector and our preparation for the sale?

46:57 Yes. So there have been announcements of two large capacities coming into the market over the next couple of years. And I think as we said earlier, our focus is continuously on how do we optimize our cost structures. There can be at times in the industry some demand supply mismatches, and we've seen that in the past decades as well from time to time. But overall, we feel that the India story is very robust. And if we take a three year and five year time horizon, we expect the industry to continue to perform well. While there is caustic capacity coming in, at least there will be no surplus chlorine coming into the market because that will all be integrated into PVC by the two large new capacities coming in.

47:47 So I think we will have to see how it evolves. But these are also linked to global prices of caustic and PVC. So we feel in a medium to long term time horizon, these capacities will get absorbed and the demand will continue to grow. Yes. Thank you. And of course, we have exports also as a strong lever now. Yes, sir. I was alluding to that point, mean, net of import and export, how much we imported in the country. But anyway, I'll take it offline. Thank you, sir. Look, we are now as a country, we are now a net exporter. We used to be a net importer some years back, but now we are a net exporter as a country.

48:35 Okay. So with the current, you are not just in cost... I'm sorry to interrupt, Mr. Sakeem. I'll join back to you. Okay. Yes, yes. Thank you so much. Thank you. The next question comes from the line of Ratpal Modi, an individual investor. Please go ahead. Yes, sir. Good evening, sir. I wanted to request you about this chlorine in house consumption so that we can get rid of this minus price and all that. So I request you to look into the opportunities as far as possible practical. Yes. I think we've already shared earlier in the call that between our captive consumption and our pipeline customers who are our trusted partners, we have approximately 70% of the capacity of the chlorine capacity that is integrated.

49:38 We also have some tie ups through some arrangements with other customers in the region. So we feel quite confident that compared to a few years back, we are now we have a healthy level of chlorine integration. And so we think we are in a better position now. Great, sir. The other thing I wanted to know, in 2027, 2028, can we expect the turnover of INR 20,000 crores, sir, consolidated turnover? Giving our expansion and what are we saying and all that we are doing, at least 20,000 crores we will reach? See, we generally avoid giving forward looking statements. We are continuing to invest in growth. As you would have seen in last three, four years, we've invested close to about INR 4,500 crores.

50:29 And the pipeline is still there. We would like to invest more. So we'll continue to grow, but giving the exact number is a little difficult at this stage. Okay. Okay, sir. Thank you. Thank you. Thank you. We have a follow-up question. It's from the line of Riya Mehta with Equitas Investments. Please go ahead. Abhinav Desai. My question was regarding how much of our power cost is backward integrated? How much of our? Power cost. Captive, captive, backward integrated. Yes. So our entire power is captive.

51:15 We don't source except yes, largely we don't source any power from the grid. So either it is coal based or it is renewable. I know renewable also our target is in next one year, out of a total power requirement around onethree should be coming from renewable. Okay. And what is the current share of renewables? Current share, I think at peak level, we had about 107 megawatt. Our out of our total requirement of excluding sugar, I'm saying, the coal based part today is about three forty five megawatts. Out of that, 100 and about 107 peak is already there.

52:01 And we're planning to add another 70 to 80 megawatt. And... Yeah. So if you could remember, how much is savings as percentage of renewable when you switch and use higher? So when you say savings, I mean, renewable is always given the kind of coal prices, it will be a function of that. But yes, all these investments have returns on investment in excess of 20%, 25%. Okay. My last question is regarding value seed. So is it a multiyear use seed? Let's say, tariff was bad, we can use the same seed in the next tariff, or do we need to write it off completely? See, the seeds like what we are present in, the the large volume seeds and bio seeds, we are in cotton, corn and paddy.

52:55 So all these seeds have... Especially cotton has a life of almost four to five years, five years actually. And the other seeds have a life of two to three years. Okay. And what was the quantum of the write off which we took regarding inventory in Philippines? So this was in in in Philippines. We we took a write off about about 12 crores for the half year. 12. 12 crores. Yeah. Okay. Yeah. And what about India? India, it was more of provision on the the doubtful debts, especially some of the debts which were on the supplies to the government. There as per the company policy, they are not bad actually, but we have accounting policy under which we make provisions after a particular aging. So we've done that provisioning.

53:50 Hopefully, we'll recover that money. What was the amount? The amount in this quarter was about INR 7 crores to 8 crores. Thank you. That's it from me. You. Thank you. Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments. Thank you.

54:36 Ladies and gentlemen, thank you for joining us on our earnings conference call. The operating environment remains challenging, shaped by geopolitical uncertainty, volatile energy costs and evolving policy framework. We remain confident of India's long term growth potential and resilience of our diversified businesses. As our recent investments get ramped up, our focus is on disciplined execution, operational excellence and building the agility to respond quickly to changing conditions. We continue to use and implement digital technologies to improve productivity, sharpen decision making and deepen our engagement with customers.

55:22 Thank you very much once again for your continued trust and support. Goodbye. Thank you, sir. On behalf of DCMSHRIRAM Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.