Lords Chloro Alkali (NSE:LORDSCHLO) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Lords Chloro Alkali Limited q two and h one FY twenty seven earnings 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 mister Smith Patel from AirFactors PR. Thank you, and over to you. Thank you. Good afternoon, everyone. Thank you for joining us on q two one h one FY twenty seven earnings conference call of Lords Chloro Alkali Limited.

0:46 We have with us today mister Madhav Di, executive director, who will take you through company's operational and financial performance for the quarter and half year ended 09/30/2020. Before we begin, I would like to remind everyone that certain statements made during today's discussion may be forward looking in nature and may involve risk and uncertainties. A detailed statement in this regard is available in Q2 and H1 FY 'twenty seven results presentation uploaded on the stock exchanges and on the company's website. I now hand over the call to Mr. Madhav Di to begin the proceedings. Thank you, and over to you, sir. Hi. Thanks, Smedes. Good afternoon, everyone. Thank you for joining us on Q2 H1 twenty seven earnings conference call of Lords Chloro. I have a small speech prepared, after which we can go into Q and A. So I'll just take you through first what we believe our results was and a little bit of the analysis of the results. So we entered FY 'twenty seven with a continued focus on strengthening our performance and especially improving our cost efficiencies.

1:49 In H1 FY 'twenty seven, we reported strong numbers similar to H1 'twenty six, even though there was significantly lower product realizations. Caustic soda lye has been under pressure for the last quarter, as you may be aware. So even though there were lower product realizations, we've managed to give similar numbers, as primarily because of the improvement in our cost efficiencies. One of the more later development during this quarter was that we have also sanctioned and commissioned 21 megawatt DC solar captive power with BEST. In total, our captive and group captive renewable energy has now increased to 47 megawatt DC. That constitutes around 40 of our total power is now coming from renewable sources, which is very likely the highest in any caustic soda manufacturing plant in India and even maybe around the world.

2:49 It's one of the higher end ones. So it would make us significantly low cost of green caustic soda to about 47%, 40% of our total energy needs. That has also meant that our power grid rate has reduced significantly, which the grid rate is at about 8.3, whereas captive power comes at about INR 2 and group captive power comes at about INR 4.5. So that is where the cost efficiencies are showing and coming through that even in lower realizations, we're doing significantly better than what you would expect us to be doing. It also means even though we're in commodity chemicals, the intent is to try to rationalize our EBITDAs such that there's not big swings basis the realizations of caustic soda, and we're able to always deliver profitability come what may in terms of realizations of caustic soda.

3:47 Our manufacturing unit in Alba, Rajasthan also allows for us, because it's on 84 acres, allows for us to expand within this. And we're, as you're aware, having $3.15 crore CapEx plan, of which approximately 150 crore was completed last year. Another INR 165 crore will be completed by July of next year at the latest. Now I just want to take you through a bit of the numbers, although you have all the numbers available with you. The total income stood at about INR 115 crores, which is highest revenue that we have done in comparison to last quarter sorry, quarter FY quarter '2 FY 'twenty six, which was at about INR 100 crores, means a year on year growth of about 14%.

4:37 And that too on lower realizations, this is primarily because we were able to produce and sell far more caustic soda in terms of volumes as well as the improvement in realizations of chlorinated paraffin wax. In terms of volumes, we did about 23,000 tonnes of caustic soda lye as opposed to 21,000 if you compare Q2 FY 'twenty seven versus Q2 FY 'twenty six. Now for the first half, as I mentioned, total income was similar to H1 FY 'twenty six, which is INR222 crore this year versus INR201 crore this year, last year. That INR20 crore is a marginal jump in terms of realization and is primarily due to the volumes. We will get a significant jump subsequent to the expansion plan that are yet to be commissioned, which will be happening around July of next year at most, primarily March and at most July.

5:35 Our EBITDA of H1 FY 'twenty six has registered a growth of about 10.36%, which is also significant. On the operational front, the volumes of caustic soda, as I mentioned, are above 9% over 9% year on year. And CPW is over actually 40% in terms of volumes. So we've done a much significant growth in chlorinated paraffin wax. It is a new product for us, and we've been producing it for only a year, year and a half. So we've significantly managed to get our products sold in the market. Power and fuel expenses is something where we are trying to do our cost expense savings. So for example, if you see fuel power and fuel expenses declined to INR37.79 crores despite the increase in sales of caustic soda and the production of caustic soda from INR42 crores in just the previous quarter. So a quarter on quarter sorry, my mistake, yes, on quarter, INR5 crore reduction in power cost.

6:37 This may actually increase coming next quarter. So we're doing well on that. Employee benefits have increased. This this includes the value... This includes, for example, the delay... The... Give me a moment. Sorry. High incentives and the variable employee benefits that we have over here. The PBT has largely remained the same, about 28 crores for the first half of this year versus last year. I and I repeat myself, but it's even though it's due to much lower realizations, we've done fairly the same even though the cost of solar realizations were much lower. The commissioning of the additional Cocaptor solar plant in September marks an important step because that will bring us to about 40% of our power coming from renewable sources and increase the power cost significantly.

7:36 We remain focused on capacity expansion, downstream integration plans and the planned expansion of caustic soda and CPW. We are committed on the time lines that we had originally envisaged. And thank you for all the investors and analysts for their continued support and engagement with the company. And we are now open to any questions that you may have. Thank you very much. We will now begin the question and answer session. Right. Anyone who wishes to ask a question, may press 1 on their touch tone telephone. If you wish to remove yourself from the question queue, you may press 2. Participants are requested to use handsets while asking a question.

8:24 Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Prisha Shah from Shah Family Office. Please go ahead. Hi, sir. Good afternoon. Hi. Good afternoon. Hello. Sir, I have a couple of questions. So firstly, starting with, you know, looking ahead of where do you vision Lords Chloro being there over the next five years, specifically in the terms of, you say, scale of operations and the product mix. So can you please put some color on that? Yeah. Sure. I think I would like to start by saying next year itself, we are expecting to do a realization of at least INR $5.50 crores. That's primarily going to come from the expansion in caustic soda.

9:18 And going forward, within this, because we are only if we're up and running with our new plant by July, we'll only have nine months of sales and possibly within the same capacity about 550 to 600 crores is the revenue that we expect with the current CapEx plan that's already ongoing. Besides this, post July, our entire CapEx plan of 315 crores will be complete, which means any new cash flow that is generated by this business subsequent to July, which we expect to be at least INR 15 crores to INR 20 crores EBITDA on the more basic level that we're able to do even with these lower realizations, we'll have at least a free cash flow of 80 odd crores to invest in other chemicals that we may seem appropriate at that time. What that means is that the growth will only grow much significantly quicker subsequent to the expansion plans being completed.

10:13 Now what do we... Where do we see ourselves in five years? Where we see ourselves in five years is that we are not just a commodity chemical player. We already view ourselves as just not a commodity chemical player. 20, 25% of our income now comes from chlorinated paraffin wax, which we intend on increasing to a more significant level. Secondly, we have very large renewable assets on our books as... In comparison to other companies, which primarily do group capital structures in terms of getting renewable energy, their power cost landed about 4.5 rupees on on that front. Whereas because a significant portion of our assets, solar assets are on are on our books, our cost of power is significantly lower at about INR 2 to a certain extent.

11:00 So we are actually far more than what we believe the market perceives us to be, which is just a commodity chemical player. We're a commodity chemical player with 25% income coming from chlorinated paraffin wax and large renewable assets on our books. Besides that, what we intend on growing to be in... Within the next five years is a much more diversified chemical company and definitely more towards specialty chemicals. We we see ourselves having the appropriate cash flow available with us starting from July of next year to be able to diversify significantly into any specialty chemical that we may seem fit. And we are in the research phase of identifying such chemicals that may be appropriate, and we'll be able to announce something maybe later in the future by the time something comes through.

11:54 I hope that answers your question. Yes, sir. That answers my questions... Question very well. So I have one more question. Thanks for the elaborate answer, though. So I just wanted to understand, is the company evaluating any acquisitions or strategic partnerships, you know, to accelerate the growth going ahead, or the focus will only remain on the organic expansion? What are the other avenues of inorganic growth are you looking for? We are very much looking into expansions through strategic expansions and or acquisitions. Actually, what I mentioned earlier is that because we're going to have about 80 odd... Crore of free cash flow, any expansion or acquisition is open to us. Because let's say if I have 80 crores of free cash flow available, I can take, let's say, at least on on a 30% equity basis, a 200 crore loan and acquire about a $2.50 to 300 crore company on a comfortable basis, on a very comfortable debt to equity basis.

13:00 So we are looking at that. And for that matter, we are employing a company which does our research and development. Because we are a smaller company, we can't do it on our own channel, but we do employ a company that does many research studies for us on various companies as well as various products. But we are unable to identify so and keep our head down only until we have our CapEx plans completed. As I mentioned, this 315 CapEx plan will come... 315 crore CapEx plan will end in July. Subsequent to which, we are doing a study prior to which, but subsequent to which, we'll be able to commit to a certain type of expansion or acquisition very likely in this phase of specialty chemicals so that we can diversify away from the commodity chemical cycle.

13:48 Although we already have diversified away from the commodity chemical cycle, if you see the other competitors on our scale, we are doing significantly better in terms of EBITDA and profit, primarily because we've invested so heavily in our renewable assets. So so I hope that answers your question. Yes, sir. That answers all my questions. These were my only questions. Thank you so much. Thank you. Thank you. Next question is from the line of Saket Kapoor from Kapoor and Company. Please go ahead. Yeah. I know. Just hope I'm audible. Yes, please. Thank you. Yes. Yes, sir. Thank you, sir. And and I hope, sir, Ajay is also in the call, sir? Not yet, actually. He's had some traffic issue.

14:34 He's not on the call yet, but if you have any questions, we... For him specifically, we can always add him. Yeah. Yeah. We can always get you connected at another point. Okay. Okay. Firstly, I was just trying to understand since he has been an industry veteran, what what are the key current dynamics of the caustic soda industry? I think so, particularly, he had been... India has been net exporter in the recent past for for caustic soda. And Right. After chlorine negative, that has also declined significantly. Right. Right. We are in a we are we are in a region, sir, Chloro Limited because of the other players. But I was just trying to get some sense realization and negative dynamic play industry And second question, sir, September quarter number compare The realizations have moved up. But when I say... And even on the savings of power and fuel, the profitability is down by around 4 to 5 crores.

15:39 So Right. Right. Volume June and September and realize So so after your team questions, I'll I'll start by your first question. And if I miss something, you can interject in the middle also. I can respond then. Okay. Question 6,000,000 India production that is about 6,000,000. We have become a net exporter. Reliance is likely to come next year. From 6,000,000, we'll go up to 8,000,000. And Adani will also come the year after, we'll go up to about 10,000,000. Now every year, we have at least a growth of about 5% year on year in terms of production, in terms of consumption as well. So very likely, that should be able to take into account the two productions that are going to come from that perspective.

16:30 And besides that, a lot of European capacity is also shutting down and Reliance and Adani, whenever they do come next year or next to next year, they are also setting up depots in Europe to be able to sell caustic soda. And especially with this European and UK EU FTE is happening, it will open up the markets for us in a more significant manner in Europe and UK. So we are not too concerned with the new expansions that are coming in. India is a net exporter and will remain to be a net exporter. And in the grand scheme of things, 100,000,000 is approximately the total caustic soda production and consumption worldwide, which is also growing at 5%, which means every year, 5,000,000 tons of production or... Sorry. My mistake. Consumption is being added.

17:17 So the the two plants that are going to come up will will very likely be taken care by those things and considering that Europe is more more so shutting down their capacities in China, it's relatively stable. So we're not... So so in terms of production consumption, India and worldwide seeming comfortable at the moment. So sorry. That was your first question with regards to that. I believe... What was your second question exactly again? Sorry. The chlorine part of the story, sir. How will the chlorine data isn't behaving for your reason also and I think so for entire industry? Right. So right now, we are still at about between negative two thousand two zero in terms of chlorine in Algar, which is significantly better than the Gujarat region.

18:05 That's primarily because you mentioned, let's say, Hawaii either come competitors and so we are able to get better realizations for chlorine. Now negative 2,000 to zero is actually significantly better than what it has been in the past. Gujarat is still relatively at about negative 5,000. So chlorine realizations, although have improved from negative 4,000, 4,500 in our region to between negative 2,000. And, you know, basically, as in when the alliance and the Dhani come in, they're going to be making PVC. What would happen invariably is that all their chlorine will go into PVC, and it would mean that the chlorine market over time will improve. Like, if you see The US market, chlorine and caustic are equal players and equal members of their sales. Whereas in Indian caustic soda market, chlorine is a big laggard because the chlorine market is yet to develop in India, which is very likely going to develop over time. So other than current between last quarter and this quarter, chlorine realizations have improved significantly, whereas caustic realizations have decreased significantly between last quarter and this quarter. Last quarter, there was a jump basis to war between US and Iran.

19:22 All commodities had gone up in pricing, whereas as and when the war is seeming to be consistent and long term, the commodity market has factored it in and fallen. So that... That's what's happened in caustic soda lie as well. Okay. Sir, volume and realization to compare if we if we are looking at the decline in profitability q on q. Mhmm. So if you could just explain to us what has led to this decline. Right. I think employee cost is is quarter Whereas power and fuel reduction significant there. Even on top of that, realization profit lower by $4.05 crores... 5 crores to that.

20:07 Right. Right. So cost of raw material consumed has gone up by about 6 crores. If you see last quarter, 30 crores versus 36 crores. That has been the the biggest issue, and that is also because of... Primarily because of chlorinated paraffin wax. Basically, paraffin oil. Because of the war, paraffin oil, sulfuric acid and these kind of chemicals have gone up significantly. And it's not likely that these prices remain elevated indefinitely. But for the moment, where we've we've lost out is the cost of raw material consumed. That is primarily done. So so that is one major issue. Employee benefits, basically, we have our incentives given on a on a not on a quarterly basis, but on a half yearly basis.

21:01 If we convert to a quarterly basis, and it's variable in terms of EBITDA and profitability as well. Sorry, my mistake, it's only related on EBITDA. So that's where INR 1 crore 20 lakhs has gone there, INR 6 crore has gone there. So whatever benefit that we've done in power and fuel has a significant has gone away in cost of raw material consumed, where the power and fuel charges will still go down, but this cost of material will also go down. So we do expect significantly better results going forward. This was actually a very tough quarter. And if you are seeing the market, you might see that other competitors who are at our scale and their performance versus us. Sir, what was the? So we have... We did about 23,300 tons in this quarter of sales.

21:55 This is the highest sales in terms of volume of pro caustic soda lite as opposed to about, we did in Q1, nineteen thousand nine hundred and fifty three. Okay. And and what were the realizations for the first quarter and the second quarter? The issue, if it is, that could be better number I don't have the issue available with me at the moment. You'll have to because my c... CFO would have prepared those. I don't have the exact ECU available with me in the moment, but we can connect after the call, and I can have that shared with you through my CFO. Okay. But when we look... Then the... So the amount of purposes, chlorine added, that is the value added part, And that chlorine consumption captive requirement. So currently, what is the percentage of captive chlorine that we are using and how much we have to sell in open market?

22:46 Roughly about days or about days or time open market consumption. CPW was put actually for a captive chlorine use case. And of late cap, CPW is actually doing really well for us because of this paraffin oil cost increase, even the price of CPW has increased significantly. So although it was initially planned as something where we could use our chlorine so that we don't have to sell negative in the market, it is actually turning out to be, in this specific scenario, a benefit to us. But that that does not play for the second quarter. That means when I... We have It will play more so in this quarter coming up.

23:33 Okay. Then price revision would be there. The realizations will move up for fifty days. That is what you are They they... They're roughly the same, but we... We're able to get paraffin oil at a better price As... When the war started versus now, the paraffin oil pricing is a little better at the moment. And, also, we had booked in a lot of paraffin oil contracts at a at a cheaper rate to which that... And large quantities. So we we got lucky over there that we had booked in large quantities. Okay. And what are the... Their EBITDA margin for TPW? So they they actually really go up and down. EBITDA margin is strong, but it really depends on the time. Time. And EBITDA margins was not necessarily why, as you know yourself, that they were not necessarily why we were going after CPW. CPW, the market of CPW is very much available in New Delhi and the Northern or North Of India, and we are very close to that market. So one, the market availability and second, chlorine usage was the primary thing. But the EBITDA margin goes from 0% to 10% to even 20% depending on your acquisition, the paraffin oil price as well as the CPW price. So it's, again, quite high fluctuation in terms of EBITDA margins.

24:50 Okay. And then lastly, sir, have a number. Long term debt is at around 120 I'm so sorry to interrupt, sir. If you would please rekindle queue. Very good, ma'am. I will. Thank Thank you so much. And by the way, if you have any questions after, please feel free to connect. If you don't have the time to Yeah. Ladies and gentlemen, a reminder to all the participants, if you wish to ask a question, please press 1. Next question is from the line of Movin Shah from. Please go ahead. Hi, sir. A very good afternoon, and thank you for the opportunity, Vin. So I just have a few questions on your caustic soda side. Given the cheaper imports cheaper imports by the many players outside, So what is the company's pricing strategy in this current market?

25:41 So in terms of caustic soda, the realization has actually improved since last quarter. Last quarter is maybe the worst quarter in terms of cost six sort of realization in a very long time. So despite that, we managed to give similar numbers to what we had in last... H one last year, the realization have brought. But in subsequent to this quarter, which has gone by, the realizations have improved. Where we are in Rajasthan, actually, we have an advantage of being away from the main competitive market of Gujarat as well as being away from the ports. So how caustic soda is priced, it's priced at the import export price at par with the rest of the world. And then, for example, if at the port or in Gujarat, caustic soda cost 32,000, 33,000 in Algar or in the North, it will cost roughly about $3,637,000.

26:33 That is the difference between the freight from Gujarat to the Northern India. As the competition is less, so our pricing strategy is always whatever the rate is in the world or whatever the rate is in Gujarat, plus around $45,000, the cost that it takes for them to come to sell in the North Of India. So the price... That is our exact pricing strategy. Okay. Okay. That was really, really helpful for me to understand. And one last question from my side. I just want to know your... On the what will be the key drivers for your products and volume growth in the next, let's say, two to three years? Can you repeat that? Sorry, I missed that. What would be the key drivers for your caustic soda demand and the volume growth for the next two to three years? How will this demand come in and how will we cater to it?

27:21 Right. So as I mentioned earlier, we have about 300 tonnes of production right now. In July onwards, we'll be about three sixty tonnes. Not only that, we have about, within the three sixty tonnes, about 100 tonnes of flakes. Flakes is a product which can be sold on trucks as opposed to tankers. It can reach much further, and the fleet cost of flakes is much lower as you can imagine. Flakes is 100% caustic soda flakes as opposed to lye, which is a liquid 47%, which means 53% of the liquid in the tanker is water, 47 is caustic soda. So volumes growth from our front as a company can happen significantly in caustic soda flakes. It would allow for us to be able to sell anywhere around India at a much cheaper fraction and potentially even export, something that we don't do at the moment.

28:14 In terms of volume growth, besides the fact that we are at only about 300, three sixty tonnes, we intend to take this company to about 500 tonnes of caustic soda, including flakes. And besides that, go into specialty chemicals, as I mentioned earlier on this call, that is going to be our primary focus to be able to diversify away from the commodity cycles. Although, as I mentioned earlier, we have significantly taken away from the commodity cycles by improving our cost efficiencies significantly. Okay. Okay. That's it from us. Thank you for the guidance given. Thanks a lot. Thank you. Thank you. And again, join the queue. Thank you. Please. Thank you. Next question is from the line of Shruti Sharma from Sharatha Family Office. Please go ahead. Hello.

29:00 Thank you for the opportunity. So my first question is once the 47 MWDC renewable energy portfolio is fully operational, what proportion of the company's total power requirement is expected to meet to renewable energy, and is the target of approximately 40% still on track? Yes. That's right. So subsequent to the starting of this, which started in late September, early October, we are now at about 40% of all energy consumed through renewable sources. So very much on track and now we are meeting that target. So now all our consumption, 40% is through renewables. The intent is to be in the next two years at about 70 to 80% renewable, actually. So we have those targets on as well. And as in when those contracts are finalized, they'll be available for...

29:53 We'll be obviously giving it to BSE and SE once those contracts are finalized. But within two to three years at most, we'll be at about 70% to 80% renewable. Okay. And sir, can you please provide an update on 10 MW wind solar hybrid project, particularly regarding its current status and expected timeline for commencing power generation? Right. Again, I just want to say that when I say I will be at 70, 80% of power consumption through renewable sources, that's primarily because Rajasthan allows for this policy at the moment. The other states in India do not allow for people to get to this amount of renewable level. In Rajasthan, two acts of contract demand is allowed in renewable. And so this is a forward looking statement I have to mention. If the laws allow for us to do this, they do at the moment, we'll be at 70 to 80% in the next two to three years. Unless there is any other change in law in Rajasthan because there are no other states that allow for this to happen right now. Second, you asked about the 10 megawatt continent project. That is online, and we are already receiving power from last year on this basis and very much part of our results already.

31:04 Okay. That was all from my side. Thank you. Thank you so much, sir. Thank you. Thank you. Next question is from the line of Shalin Shah from Shah Family Office. Please go ahead. Yes. Hi. Thank you for the opportunity. So my first question would be like how does company plan to utilize the battery energy storage system to optimize power procurement and, you know, manage energy cost and, you know, ensure a reliable power supply to the company? Right. So for the moment, we only have about 1.25 or 1.5 megawatt of battery. It is very... It's small and actually quite insignificant, and that's primarily because the law mandates for us to have this. Besides that, we don't have much battery, and this battery will not have any real consequential meaningful difference on our results or on our consumption of renewable power.

32:04 So so this is this is not gonna play a major role for us, actually, not at the moment at least. But is company planning to, you know, implement best in future? Or Yeah. So in this one project, we have about 1.45, 1.5 megawatt of BES. I can get the exact number later. BES is not so significant in Rajasthan at the moment because why? Rajasthan's policies only say that you need 5% BES for your for your renewable power, which we are mandating by setting up whatever BEST is minimum required. Because, Mari, banking, I at this time, we don't need a very large quantity of BEST. BEST is not a significant generator of electricity. It's actually just a store.

32:49 So it's not required unless the state mandates for you to have the BEST. We are able to consume the power that we generate on the go. So we're not too concerned with having a significant amount of BEST at the moment. And we assume that BEST pricing over time will fall as it does with all things. So we will not invest heavily in BEST until we find that it... There is a significant use case for that. Okay. And, sir, second question would be, like, like, what will... What is the time line to, you know, increase the caustic soda from 300 to 500 ton, as you said before? So we... From 300, we'll be at three sixty tons by July of next year, as I mentioned, between March and July of next year will be from 300 to three sixty. Subsequent to that, only one very large electrolyzer, about 120 to 140 tons will take us directly to 500 tons.

33:43 The time line, I can't commit to at the moment. Would be forward looking for me to commit, but the investment required for another 140 tonnes would be another INR 140 crores to 150 crores. Now that investment can either go into increasing our caustic soda production or it can go to significantly diversifying into specialty chemicals. We are yet to take that call as to which comes first. As we're... As I mentioned, we're comparing different companies, different products at the moment. Although our data numbers are quite strong on cost and shorter line, we may choose to diversify to only diversify away from the quality chemical cycle. Okay. So I can't commit a timeline. Sorry. Okay. Because of because of the... Because they're still doing an analysis as to which way to go, specialty chemical or commodity chemicals and expansion in... So so depending on whichever comes first, the other will come, but it'll come on a later stage.

34:39 That's all. Okay. And, sir, would it be funded through internal approvals or, you know, of 100 sort of thing for you guys? So, actually, we are very well poised to do any of those. We have the option of equity, debt and internal accruals. So I'll start by each of them. Internal accruals will be available to us July onwards as our CapEx plan completes. July onwards, we'll have at least about INR 80 odd crore of free cash flow to be invest investable in any business that we may seem fit, whether specialty or commodity. Second, debt. We are in a fairly good debt to equity level. We are well serviceable debt to EBITDA is also strong. The banks are very, very supportive to us. So we are able to get more debt, but we may not necessarily choose to be over leveraged either.

35:30 The third is equity because we, as promoters, have 75%, 74.75, I'm not exactly sure exactly the exact, but 74 something odd percent, it means that we can definitely leverage this equity to be able to significantly improve improve our chances of making a big investment into a new company or any other acquisition that we may see being fit. So we have all three options actually available to us at this point. And I find that this point is a very big inflection point for this company going forward because all our expansions, all our reduction in power costs, are aligning at a time where we can really put our next best forward foot forward. Okay, sir.

36:17 Thank you, sir, for answering my question. Was really helpful. Thank you. Thank you. Next question is from the line of Rajat Shah, an individual investor. Please go ahead. Sir, I just wanted to ask a couple of questions with respect to remuneration policies, if we have anything specified. So from a fixed point of view, there have been some concerns with respect to a percentage... The remuneration as a percentage of the profits. So if you could just elaborate a little bit because it would help clarify the optics.

37:04 Right. Right. Right. So, basically, there there have been remuneration policies that have been approved by the shareholders and the board members. The the... Earlier, it was it was... The policy was 4%, 5%, 6%. Now what we've changed it is we've captured at 4%, actually. So so what the optics in terms of earlier, which was that it was increasing to a level that may not be appropriate, we have tried to cap it to some extent. And in that sense, we have in the next financial year capped it to about 4%. I'm I'm I'm... I I believe that that's... That is an appropriate thing to have done seeing that our profitability has grown significantly between when Aditi and I have meaningfully joined the operations. If you see our company's trajectory from 2022 to now, the company has totally changed. And that's primarily because of my work in Ajiji's work. But, understandably, now that the trajectory has changed and the profitability has increased a lot, we are wanting to reduce these sort of incentives that may be due on those betas and profitability.

38:16 So we are in the process of reducing it and actually have done so, actually. Okay. Great. And if you could just elaborate a little bit with respect to how is the... How is it structured in the form of of fixed versus... Since there has been a change in the policy? How is it with respect to fixed pay as well as the incentive with respect to performance? If the... I can have the exact exact remuneration policy available to use after the call. Just we can connect. I don't have it exactly with me, but I can tell you on the call itself that it has reduced. And going forward, the the bonus payable on... As a part of the revenue has reduced significantly.

39:01 So so so... But I can have the exact policy available to you provided that it's appropriate for me to do so. The board has already approved this. Okay, sir. Thank you. That's fine. Thank you. Thank you. Ladies and gentlemen, we will take that as the last question for today. I would now like to hand the conference back to the management for closing comments. Thank you, everyone, and thank you for tuning in. And if you have any questions pertaining to whatever we have missed out on, please connect with Smith. Smith from AdFactors is the first point of contact for any questions that we may have. Any answers that I gave with regards to the fact that the CFO will connect with you later or provide, please feel free to do so, and we'll provide all details as necessary.

39:54 And thank you for joining us on the call, and thank you for... To Smith for coordinating this call. Thank you very much, sir. On behalf of Lords Chloro Alkali Limited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your line.