Time Technoplast (NSE:TIMETECHNO) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Q1 FY 'twenty seven Earnings Conference Call of TIMETECHNOGLAS Limited hosted by Kavira Securities Private Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. I now hand the conference over to mister from Securities. Thank you, and over to you, sir. Thank you. Good evening, ladies and gentlemen. Kaviraj Securities welcome to you all for Q1 FY twenty seven earnings conference call of TIMETECHNO PLUS Limited. We have with us the management team, which is represented by mister Bharat Kumar Vagirya, managing director mister Naveen Jain, old time director technical mister Vishal Anil Jain, nonexecutive director mister Sandeep Modi, senior VP, corporate planning and accounts mister Heman Soni, legal and corporate affairs mister Bhaumin Shah, manager, investor relations.

1:09 Now without any further delay, I hand over the call to Mr. Bharat Kumar Vagirya for his opening remarks, post which we could open the floor for Q and A. Thank you and over to you, sir. Yes. Good afternoon, my esteemed investors, respected members of the Board, valued stakeholders, and thank you, Mr. Abhijit, for the gracious introduction. It is a privilege to address you today as present our financial and operational performance for Q1 FY twenty twenty seven and share our outlook for the remainder of FY twenty twenty seven full year. Update on the current geopolitical situation as we all are aware that global market continue to navigate the geopolitical uncertainties during Q1 FY twenty seven, which started in on February 28, then last quarter March month was there.

2:08 Particularly development in the West Asia and ongoing Russia Ukraine conflict, which is continuing since last three, four years, which contributed to volatility in energy and the raw material markets, which is the main inputs to our 75% product, which is called as the polymer products. The polymer prices witnessed significant movement during the quarter and our predominantly B2B business model established pricing mechanism, enable us to effectively manage input cost fluctuation and to maintain operational stability. Because of B2B business, we are able to pass on price increases to our customer with a time gap of twenty to twenty five days. At the same time, India focused on strengthening energy security, expanding GAP gas infrastructure and accelerating the adoption of the cleaner energy solution continues to create significant opportunity across our portfolio.

3:08 We remain encouraged by the growing momentum in composite based applications supported by the approvals received for Type III and Type IV hydrogen cylinders, ongoing development of higher capacity solutions for hydrogen applications and progress towards the commercialization of 14.2 kilograms composite LPG cylinders, the recent LPG HPCL Swiggy Stormont pilot further validated an advantage of our lightweight composite cylinders for the modern LPG distribution and the last mile delivery application. Supported by the structural growth drivers, our composite product business continued to deliver strong performance and remain one of the key pillars of our long term growth strategy.

4:00 Our Composite Products segment emerged as a key growth driver during the quarter, delivering a growth of above 29%, precisely at this 29.3%, making a significant contribution to overall business performance, supported by sustained demand across our border composite portfolio. Most importantly, our profit after tax registered a growth of 22.2%, underscoring our continued focus on the operational excellence, capacity optimization, cost efficiency, prudent financial management, our disciplined approach towards the controlling finance cost and improving operational leverage continue to strengthen profitability in the shareholders' value creation. We remain highly optimistic about the opportunities ahead, particularly in the composite product segment where the demand momentum continued to be encouraging.

4:55 This is reflected in our robust order book of approximately INR185 crores. In parallel, our value added product portfolio, including IVG composite product continue to witness healthy market acceptance and the sustained growth. Our industrial packaging division has also maintained a steady and consistent performance across the market. Further reinforcing our growth visibility, we are pleased to announce conformed packaging orders of approximately INR 400 crores for the current calendar year, spanning both the domestic and international markets. Two, achievement reaffirms, strengthen of our diversified business portfolio, scalability of our operations and strategic direction we have pursued over the years as industries globally transition towards a cleaner, safer and more sustainable energy and packaging solution, we believe our company is exceptionally well positioned to capitalize on the structural growth opportunities.

6:00 Looking to ahead to the FY 2027 and beyond, we remain committed to accelerate sustaining growth, enhancing opportunity efficiencies, expanding our innovation lead product portfolio and delivering long term value for all our stakeholders. With this, let us move to the detailed review of our financial and operational highlights for the first quarter of the year. I invite you all to join us as take through the key performance, insight and strategic development shaping our future growth journey. The key figures are during the Q1 net sales INR $16.94 crores as against INR $13.54 crores last year same period.

6:46 EBITDA, INR $2.25 crores as against INR 196 crore. PAT after tax is INR 116 crore as against INR 95 crore. The volume increased by 11%, which contribute India 10%, overseas 14%. Net sales increased by 25%, India 30%, overseas 17%. While on this figure, I'll just clarify you my overseas business in the sales revenue for the January, February and March because overseas follow the calendar year. So January, volume, March overseas business and India business April, May and June. Therefore, you have seen the volume difference volume difference and of the overseas and net sales difference is only 3%, but India which is 20% because volume growth is 10, revenue growth is 30%.

7:42 And that gap is going to be continue because overseas follow the calendar year and India follow the financial year, which is beginning from operating. EBITDA increased by 15%, page increased by 22%. The higher EBITDA growth relative to volume growth demonstrate the company ability to improve profitability through effective pricing, product mix, operational efficiency rather than relying solely on the volume expansion. I'm also pleased to share our overseas subsidiaries have delivered robust performance in Q1 FY 'twenty seven despite ongoing global uncertainty. And I'm given the I have received the commitment from my international team that this growth will be going to continue in the period ahead also. Share of the business, establishment product versus value to product is 25.4% and it is going to be continued. Share of the Indian overseas business is 65 versus 35%, 65% India, 35% overseas.

8:44 And overseas 35% is also de risked in the various countries, 10 countries we have a presence. EBITDA margin in India and overseas almost about 13%. So India is 13.4%, overseas is 13.1%. Rate margin overseas is higher because of the tax provision in India is higher and less tax provision required in the overseas. So, that margin in India is 6.5%, overseas is 7.6%. Net cash from up purchasing activity is INR155 crores in this quarter. Debt net of debt is was reduced by debt reduced by INR90 crores this quarter. Total CapEx incurred during Q1 INR75 crores, which includes INR28 crores to the regular maintenance CapEx.

9:34 Capacity expansion reengineering and automation for a stabilized plant product and INR27 crores to the value based product IBC and composite cylinders. I would like to draw your attention couple of interesting development, which has seen. Most of the things I have given in my earnings presentation, which is loaded on the BSE and NSE side also on the company side. But very quickly, I will go through that. Despite the global war situation, FY twenty six performance target continued to remain strong momentum in Q1 'twenty seven and that is to be continued. The company remains well positioned to sustain growth momentum and not changing any guidelines for the target because growth guidelines, volume growth, I'm talking, revenue growth depending on the prices of the input, which we don't know when the war will be over and the prices will be stabilized.

10:27 But here, volume growth as committed will be above 15%. Sale of the non core assets, I mentioned in my that document also. But again, due to consolidation of product, due to consolidation of the asset, the revised non core asset is INR134 crore spot with realization comments from Q1 and this quarter INR9 crore have been realized. Balance will efforts will continue for realization asset by sale of that particular item. Focus on the MROC, that continued focus will be there to increase 1.75% every year. And in the three years' time, it will reach to 24%, which March 26 was 19%.

11:14 Acquisition update, I had given in my presentation, but here's one small acquisition where the investment was only INR 25 crore completed, equity have been acquired. And now that company, which operates in Dulia, especially for P5 products is already all plants have been made, all clearance have been observed. And from Q2, commercial production will start from that location. Another acquisition, which was announced was a real packaging. Again, I have put up my all financial figures reference to this company in this Board meeting. But again, told me that's what should stabilize, prices should destabilize, then only we'll come to know exactly the volume growth of that company, which is acquired.

12:00 Because M and A growth may be 25% to 30% on account of the prices increase. So when we will come to now the sustainable EBITDA, only the war situation and the prices stabilize because company presents do the business presently do the business 60% export and 40% local business. And that export is also affected in nearby countries, mainly in the Middle East countries where they have export, but other countries, they are continuing. So I have to follow my vote guideline, which again we will see after settlement of the war and normalize of the businesses. Subject to that the composite company also should accept our terms. Otherwise, we will again put in the next Board meeting and we'll take whether this fund, which is lying in the general corporate purpose may be used for the other purpose in the company and other better opportunities available.

12:58 And concluding the product and manufacturing units, which continue as a part of this year, I'm just once again clarify you, the year 2526 and 2627 is a year of consolidation of the product unit and do the capacity requirement after considering the automation. So therefore, these two years' expenses, capital expenses is high, which includes money received under the QIPB plus already projected finance finalized prior to the QIP. So this year, INR 26 crores, 27 crores and INR 25 crores, '26 CapEx will be in the range of around INR $2.50 crores. But later on, subsequent to 2027, CapEx will be the normal CapEx, which will be in the range of INR 200 crores to INR $2.50 crores to capture the 15% growth for at least next three to four years.

13:53 And so then I talk about the CapEx requirement. At the same time, we should see the capacity utilization at present company in India is around 80% and overseas is 85%. And when management planning to achieve growth over 15%, so definitely brownfield and greenfield expansion will be required, therefore, which we are considering the CapEx higher in this period. Green energy conversion of electricity rate, that is continue. As we have mentioned, that energy storage system in India where the solar power is available, we are trying our best wherever in the state we operate and if this facility is available, we are capturing that.

14:40 As per the present estimation, the agreement signed, we were able to save around 12 crore this year on account of the energy solar power, which the agreement have been signed. And this next year, definitely certain new states where this policy is coming, and it will be increased further. Because as per our current estimation, if wherever our company operates the states and all solar that states clearly green power by way of a solar, then we can save more than INR 35 crores. But we have doubt whether certain states will follow these guidelines or not because the surplus power, government power itself is available, so will not allow to the solar power.

15:26 But that we will update quarter on quarter, which are the states coming up for the solar energy. So then every time the best judgment can be taken. Product update, like hydrogen Type three, Type four, power exchanger and issue 10 batteries for power sectors, Then it's already developed another product development, higher capacity of two fifty and three fifty liters cylinder for CNG, casket operation, hydrogen operation that will make our product more competitive. And as we get the approval, we will be update to the market. We expect in the next ninety days, some of the approvals will be in hand so that we can reduce and our product will be more cost advantage compared to other available products.

16:18 In spite of additional benefits available for composite products, lighter weight and long shelf life. Update on the LPG cylinders. Yes, we have updated time to time. And once again, because some of the new investor, you are not aware about how the requirement of LPG cylinder in India, I just would like to update. In current positions also around the 32.6 crore active connections are here in India because most of the 70% backward rural sector is still people are using the LPG cylinders. And further 50 crore cylinders are in circulation. And it currently this government is offering five kilograms, 10 kilograms cylinders and for commercial applications, bigger size like 15 kilograms, 26 kilograms.

17:09 And as you have seen recent development, which has happened, especially which we have updated also recent company received the order for 140,000 cylinders from HVCL further immediately. HVCL has tied up with the Swiggy Stromat for the delivery, immediate delivery. And we all are aware that e commerce delivery day by day is increasing. Nobody has a time to go to the collection centers and give the cylinders and get back. But if you are getting within ten minutes, fifteen minutes, it's 10 delivery, which will increase the business of the LPG cylinder. So it's a good development as well as LPG cylinder and this development is going to be continued by the other oil and gas distribution companies also like Indian Oil, then BPCL, all companies going to be have that following the other suppliers of the gas.

18:10 Then some of the specific products like CNG, higher capacity, 50, three fifty, I mentioned to you, going to get the approval that will reduce the cost of the product and it will be more saving products for the end user. Then further, as far as higher exchange rate, yes, very good market companies first focusing on the oil marketing company, refinery company where the 800,000 units are required, product is ready now and it is now commercial under discussion. And you will hear the good volume of the business in the second half of this year. Then composite air receiver tank, again, it's the OEM business, which every air receiver tank used in the electrical vehicle, all types of the buses and the trucks need air receiver tank. So company has developed in house air receiver tank, which is cost competitive compared to currently available MS tank receiver tank. So it will give the lightweight advantage to all the OEM who are the bus manufacturers and the truck manufacturers. And for your information, I want to update every trucks or buses need three to four tanks in one vehicle, whether it's electric, whether diesel or the petrol.

19:30 So very large requirement in the sector and that company has developed enough by using existing composite technology available. Then we have a subsidiary company PowerBuild, already four products in the previous year, which is developed, electric car batteries, power sector batteries and another data center area batteries, which is very large market. So initially, our agreement has been tied up with the Monbat company in Europe, who is the battery manufacturers of the data center batteries. And we all are aware that how the business data center is increasing in India because there is a major business expansion where the battery storage energy storage equipment will be required there. So it's a good opportunity in that energy storage space.

20:22 And that company is currently doing its business in the range of 125 crores, but projecting over 30% growth year on year for at least next three years. And where will be the EBITDA substantially expansion will be there, which currently 12% and targeting to reach 15% in the next two years' time. Then project related, yes, we have given in our earnings presentation what was top line. As I mentioned to you, the year twenty fivetwenty six and twenty sixtwenty seven is the year of the consolidation of units in the product. Therefore, in the year, this twenty fivetwenty six company completed fully automatic plant that near Moray for the composite products and which again some of the investor hiring and then can tell to their friends also who are the investor or they would like to visit the plant. The company is organizing visiting to the plants in the Western area, especially this Moray plant with the automatic plant, fully automatic plant and all the most of the equipment imported only plant is commensurate the production and that is able to see and plant schedule on twenty one and twenty two August, which is called Friday and Saturday, if I wrong.

21:39 Yes, Friday and Saturday. So any interested investor stroke, their friends would like to visit the plant, they can register their name, so logistic arrangement will be carried out. So Marai plant completed another that the green recycling Greenfield recycling plant completed, that's also wholly owned subsidiary of Time Technoplast name of the company is Time Ecotec Limited, that also will be under unit visit during the visit of twenty first and twenty second schedule. Then another place called brownfield automation IBC facility, fully automatic plant in Silvata.

22:27 Phase one completed. Phase two is under implementation. So Phase one where we will see the automation by using the robotic technology and similar automation will be carried out at other locations also in India and overseas. Then further, we have done the Gomburi Pundi near Sinai. The pipe production facility separately have been installed and operational already so that existing spare space can be utilized and expansion of the ground build for the packaging because market demand is good as far as Southern regions are there. Then we have completed in overseas also Georgia in The U. S. A, but the good demand is there. And I'm glad to tell you, U. S. Capital utilization is above 90%.

23:15 Companies currently operating in the five states and further six states are under implementation. Before end of the year, that plant will be finalized because company is looking after on the build to sit to premises on the ready basis. So that will give the more opportunity or increase our presence in U. S. A. Then further, as I mentioned to you, 2627 is again year of consolidation unit and the product. Therefore, very aggressive plans have been taken. Therefore, the CapEx I mentioned to you will be in the range of INR $3.50 crores. And thereafter, the CapEx will be in the range of INR 200 crores to INR $2.50 crores, which includes maintenance CapEx of 100 crores, considering the size of the business and to capture the 15% growth.

24:07 So project of 2027 includes in Gujarat Sanan, where company has already submitted, but plans is under approval. And in Odisha, again, as the government allotted land and the plants have been submitted for the buildings as rains will be over, construction activity will be starting. Chiploon, Maharashtra, looking after the infra development and the chemical zone is in Chiploo, Maharashtra packaging products and PE products will be there. The Northern Southern Region expansion of the EcoTech recycling has the commitment given for the QIP funds, which will be invested further and is similar to Western Region plant, which already my investor will be able to see during their visit.

24:56 Then Saudi Arabia plant is there, building almost will be completed in the next month's time. Then depending on the war situation, the machinery will be commissioned and demand is already there. And some of the consolidation of the existing unit in The Saudi or further expansion will be carried down with 100% ownership of the TIMETECHNOBLAST. Growth drivers segment wise, major segment packaging, yes, we consider growth of 11% to 13% in this year, whole year and that is going to continue. Composite product growth estimation over 25% to 30%, focus is completely there, which has higher margins also, then only the ROCE and EBITDA margin will be improved.

25:43 P5, yes, considered more than 20% to 25% growth. Most of the business P5 carried out almost, I can say, in the first half, 4035% to 40% business in the first half always and 60% to 65% business in the second half, considering the government guidelines, government project. And the last quarter always in the PE pipe business is very high because otherwise nobody if the EPC contractor don't complete their project, government levy the delayed charges from them and delayed project charges. Other products, 10 to 12%, all combined put together, considering growth of over 15%.

26:31 When I'm highlighting on the volume growth at the same time, I'm very sure investor would like to understand the volume growth will be 50% and what will be the EBITDA and paid growth. I'm very clear considering the automation, considering the power cost savings, considering manpower cost reduction on account of the automation. I'm very clear when the growth volume growth will be 15% and definitely EBITDA growth will be 19% to 20% and paid growth will be 23% to 24% considering the debt repayment already carried out and the company considering the operational cash flow from the operating activity and the commitment provided already towards the debt obligation.

27:19 And further already company has considered a CapEx plan of INR $3.50 crores this year. So absolute EBITDA, as I mentioned to you, relating to volume growth. So percentage for the time being, till the barge decision improve, don't see the percentage of the EBITDA because prices are uncertain. And EBITDA growth drivers, very clear increase in efficiency, consolidation of products and units, manpower cost saving, finance cost saving and realization of non core assets, which is already identified as the consolidation of product and unit is going to be parallelly disposable action will also be taken.

28:09 Now I know that I have taken too much time of you. So remaining time, I would like to open for the question and answer for the specific, which I have not covered and which is not covered in my earnings presentation, which is quite detailed submitted to the BSE and NSE and available on the site also. One my request considering your time shot, if any my investor have asked one question, others should listen properly. They should not repeat the same question, right? Thanking you. Thank you very much. We will now begin the question and answer session. If you wish to remove yourself from the question queue, you may press star and two.

28:59 Participants are requested to use handsets while asking a question. Ladies and gentlemen, you will paid for a moment while the question queue assembles. The first question is from the line of Kumar Saurabh from Scientific Investing. Please go ahead. Hello, Are you audible? Yeah. Just a minute. Let me reduce the voice. Yes. Sir, my question is on the working capital days. In last two years, it looks like our working capital days have deteriorated and cash flow growth is also has been stagnant. So will it change? That is one. And second, once we are done with this high CapEx cycle, I think the kind of growth we are adding, we should be doing INR 600 crores, 700 crores of cash flows. So how do you plan to utilize because you have done excellent demonstration sir and congratulations on good set of number. We are almost getting debt free and we'll be generating more cash. So do we have some inorganic growth strategy in plan in next two, three months we start filing up cash? These are two questions.

30:07 Yes. So I think you have a good question, but we are little conservative. First question is right, the washing facility, but you know the statutory requirement for the green energy we have to use, especially the packaging product. Now in India, packaging product is almost if you total packaging product is almost 75%. But packaging product, which we divided in two parts, India and overseas and India, we have a 50%. So I consider in my overall revenue around 35% is the packaging business. And out of that packaging business, we have to use 30% recycled material. And that also government has given certain exemption, the product which have already exported, no you are required to compliance and product which is going in the food and pharma companies also not required. If I consider washing line, that is again, even I need to pay cash buying material from the secondary market to my agent to arrange the inputs for me because I don't buy that material on the credit I have to take the cash immediately by money transferring their account. The market will get the material, that material will come to my recycling plant with a statutory requirement.

31:29 But I don't think that will disturb our anywhere working capital cycle time. I'm coming out very important thing, working at the cycle time prior to what situation you see the December 2025, working at the cycle time reached 200, which was disturbed at the time of the COVID period, and we have kept our target to reach the working of the cycle time of ninety days. How ninety days we consider? Very clear. Seventy days is on account of the receivables. Sixty five days is on account of the inventories that is called one hundred and thirty five days, forty five days is on account of the creditors we minus. Then the balance ninety days is our working of the cycle time we ourselves has kept the target.

32:15 In the last quarter of March twenty six, it is disturbed because of the raw material prices increased by 40, almost 25% to 30% suddenly in the March because of the West Asia war. So that therefore, working of the cycle time increased to one hundred and fifteen days, which now you see already in this quarter where some prices have stabilized, okay, fighting reached to one hundred and ten one hundred and ten days. Days. Reducing. So again, you will see in the next quarter, it will further reduce. We are targeting ourselves at the end of the year, it should reach to around 100, come back to the original, which was in December. But yes, you asked me the three years down the line or two years down the line, definitely my target is ninety days.

33:07 Now you are right. You are asking when company has a cash from the surplus fund, to do? Very clear. When anybody is giving me the fund, once I made the repayment of the debt, what to use this money. You know very well, most of the company and I have always followed my guidelines of the valued investor. We have certain large mutual funds out there. We will take the guidelines of the Board and our valued investor and we'll do the investment years if any opportunity arise where I can increase my more ROCE, where the good value of the business we are getting it, then definitely the organic and inorganic growth, both are open for us.

33:53 But yes, if a company surplus fund, it is funds are for the investor funds and funds of the promoters for their share of the holdings only. Yes, because we can also see that for the possibility as time required to buy back the shares of the company at the right time. So that will also give the enhanced value to the my valued investor. But yes, we have to follow the certain guidelines of the SEBI stock exchange, what is the time line when we can do the buyback. So definitely, 'twenty seven onwards, definitely we can consider this as fact. Further, company focus to increase the return, whatever profit earnings, paid earnings are there, certain payout ratio also will increase.

34:40 So I also invest in the opportunity to see the other options available. At the same time, I'm telling you, we have discussed yesterday in Board meetings also and further going to discuss in the upcoming Board meeting because we have come across so many other things also where that products fitted in the company's guidelines because from what I have experienced in these nine polymer products, polymer buying nationally, internationally across the 10 countries experience. So what other opportunity where company can gain good value of the return of the money and that also possibility will explore in the period ahead. So yes, as you are worried, we are also worried once when company don't have a fund, people have a problem. When the company has more funds, then also the problem multiply because you have a funds, you have to invest it and give the return.

35:39 So definitely we will take the majority advice from our investors and the Board and do the best interest of the Board. You got my answer? Yes. Thanks for the detailed answer, sir. And thanks for the great execution. Wish you all the best. And I would love to be part of the plant visit. I'll reach out to the IIT. You for the Thank you. Sir. The next question is from the line of Karan from Guardian Capital Partners. Sir, last quarter, you had indicated that the follow-up price increase pass through would happen over the coming months. So I want to understand how much of that has been passed on to the customers and if there's still a meaningful amount left to be passed on?

36:27 No, I'm just very clear to tell you what is our pricing system. Because most of the I can say 70% to 75% customer, just for example, I'm telling you April May and June month, there was an increase, no downward was there. Only the downward started from July only. And July also, know, this local manufacturers prices change either Monday or Thursday. Why they do Monday? Because Friday, they used to receive the ICE's report, the internal reports. And on Wednesday, they used to receive the plate report. These are the two reports which these polymer manufacturers follow. So certain time, they see the market conditions, see their input cost and they do their changing.

37:19 But we don't change our weekly pricing. We do our pricing with our customer once in a month. And most of the customer has chosen the date between eight to twelve of next month. So whatever prices changes taken place in the for example in the month of July will be effective in the month of August. August changes means between 800 to 1,200 up to first 100 to 800 with that will continue as per the old pricing only. Whatever prices changes will come between 800 to 1,200, most of the customer finalize prices based on the July prices and the business will be confirmed. Because every person need every day. Packaging is a basic product for most of my customer.

38:06 And one thing I'm telling you, packaging is hardly 6% to 7% of their cost. That is not their main cost. That is one of the packaging is cost for their product. So with the time rate of if you sum up the three months, there will not be any difference in the pricing. And whatever prices increase, major price increase was taken in the month of March and April, which everything has been passed on, nothing is there. And that is I'm talking relating to packaging products, which is 75% of total revenue and 75% business also in the two part, around 37% business is India and 37% business is in overseas manufacturing location.

38:54 And for packaging business, all we see is same, whether in India and overseas because customer profile is also same. Even my many customers, more than 50 customers who are international customers, they are buying in India as well as buying in other countries. So we follow the same practice. And other manufacturers internationally also follow the same practice of the monthly pricing. Because when you are in food cost, it's at 70%, which is linked to the polymer prices, nobody can afford increased prices. And similar policy, customer ask because we have experience and is available that when the prices were down, we similarly pass on. For example, in the month of July, prices are down by three times INR 10, INR 9 and INR $4.23 polymer prices were down. But at the same time, we you and we all know very well, again, war started.

39:52 Once they agreed for the signing of the MoU, MoU signed. But again, it is reversed back. Then again, it started increasing and almost INR 6 further increased. So INR 10 plus 9 plus INR $4.23, INR 6 increase. So net INR 17 will be passed on in the current one to them. And similar, I'm getting this price decrease from my local manufacturers also. And when we do the buying from the overseas also, we are keeping in the mind what is the exchange rate, what is the current rate scenario. We always keep the contingency of 2% to 3% in our pricing system. So that will not affect our EBITDA margin in terms of the absolute figure. 5% other products, where we carry the inventory, I mentioned in my last call also, the critical product, high value product where EBITDA margin is in the range of 18% like in composite product, we carry the inventory for the six months because you we all are aware of that. Russia, Ukraine war has created uncertainty, but at the same time, because most of the composite product and service to the government and semi government companies and big corporates, where I have to give the timely delivery like credit inventory for the more than six months, so I can give them service on time.

41:14 And these orders also on the fixed pricing system also I cannot get the increase or decrease, but I carry the inventory based on that we do the costing. And most of the composite products, my input cost is also fixed for the twelve months. So I'm getting my input cost accordingly. So there is no affected will be the EBITDA margin. Right? Understood. Yes. Thanks a lot for the detailed answer. Sir, my second question is on PE pipe. You continue to maintain a healthy growth outlook, yet the q one volumes were relatively subdued. So was there a timing issue related to a project execution, or should we expect the growth to be tilted towards the second half of the third week? No, still I agree with you because I'm happy to tell you that today morning also I reviewed the business concerning the how the rains are coming in the each part of the regions of India.

42:11 And I'm pleased to tell you, I have received my from a PE department extra dividend. The good demand is there in the month of now August and September. Almost I will able to use my 75% of my capacity in these two months. So yes, so as far as first quarter, yes, the demand was slow a little and not only the because of the there was no any other reason except the price increases substantially, which government has not given a price increase to the EPC contractor and the EPC contractor wanted product, but we have not supplied wherever we could get the business with the price increase because we also don't when our product input cost itself is at 70% and EBITDA margin in the range of 10% to 12% and the price increase by 30%, who has told us and in which school we studied that we should have brought the loss and supply to the fulfillment of the commitment.

43:12 That's very clear. We should get the pricing case. We are willing to supply. We have a capacity. So first quarter business is affected. But second quarter as only one month, last month is only completed and remaining two months I'm quite hopeful we'll able to achieve our target. And the overall growth more than 20% in a year, which is projected, we are going to get it orders are in NAND, confirmed orders are in NAND, but price, yes. And we accept the prices are going to be reasonable in the period ahead, considering the all two things. Government also has to compromise and will be required to give the market conditions required to give them an increase to the EPC contractor because very thin margin EPC contractor also work.

44:04 If government need infrastructure development, government need the some foreigners should come to India, their interactivity has to be increased, what is immaterial. You have seen that now. The chips in the other short term, which is affecting the electronic business. Now government is supporting, government is giving the benefits to the each of the industry and they are expanding each of the state for the chips industry, which is basic requirement in the electronic segment. Otherwise, entire industry will be affected. So government definitely will support to the EPC contractor. And currently, even price comes to the reasonable, but certain states or certain area where the rains are ongoing, they cannot do the layout of pipe in that line. And pipes are used for the various segments for water management, cement management, and then power duct line all. But yes, if you ask me, I've seen the trend also in the first half normally 35% business, in the balance half 65% business as far as P pipes are concerned.

45:08 And that's based on that we are working out. Understood. Thanks a lot for that explanation. That was it from my side. All the best. Thank you. Thank you. Ladies and gentlemen, you are restricted to restrict your question to one per participant. The next question comes from the line of Aryan from Equities Investments. Please go ahead. Hi, sir. Congratulations for the question. Hi, Aryan. Thank you. Yeah. Just wanted to understand that because of the increase in crude prices, we saw our gross margins fall a bit. So for our company, what would be the ideal level of crude where our margins will be the highest? I tell you, if I you see the absolute EBITDA per ton, okay, don't see the percentage terms.

45:59 I mentioned to you, 15% volume growth, 19% EBITDA growth and 23% to 24% paid growth. Now I have seen in my life of forty years the polymer prices changes, whether it's a downward or upward. First time it was happened in two thousand and eight, two nine, Lehman Brothers prices, when the prices were $1,300 per tonne, but the dollar rate was INR50. Today dollar is INR100 around INR96, INR97. Then the prices again in the four months came back to the INR1000 level. Similarly, things have been in the COVID period when the prices reached to $700 then again come after that in 2022, 2023 come back to $1,000 to $1,200 and the same is continuing since last three to four years.

46:50 Reasonable level of the polymer next three years visible considering the capacity expansion by the large companies in India by the petrochemical products and considering the expansion plant nearby countries, mainly in The Middle East. And in addition to that, The USA expansion and Korea expansion for the local manufacturers. And I also used to read many reports, polymer markets reports India and international both. So reasonable polymer prices in terms of the polymer is considered $1,100 to $1,300 $900 is also not correct. People will not make the money. Similarly, if you ask me the oil prices, reasonable price, it's $70 between $70 to $80 is a reasonable price per barrel for that. And that will able to sustain the polymer prices $1,100 to $12.50 dollars Because I understand from many petrochemical companies, part of the producing oil per barrel is $55 So they also make certain money then only.

48:02 Again, certain company who buy the oil, crack the oil and make the polymer. Certain companies buy the ethylene from ethylene, they make the polyethylene products. Polyethylene product means the polymer products. Certain company buy the polypropylene. So every company do not put their own petrochemical complex because petrochemical complex very cost high. Then you should have a complete very big size of the lands and investment is also very large. So many companies buy directly from ethylene and nectopolymer. So I give your answer, the reasonable price of the oil is between $70 to $80 not $100 I have seen $125 long back in the COVID period. But again, if the polymer prices were I have seen $600 in my life and maximum $1,800 But does not mean that today, for example, when the oil price is $60 and polymer price is $1,000 and when the oil is to $120 then polymer will reach to $2,000 I have not seen at all. It's not proportionately increased.

49:14 Again demand supply gap available to each country. As I mentioned to you, reasonable oil prices 70 to 80 and the polymer prices ranging from 1,100 to $12.50, the reasonable price, where all people are happy packaging cost will be reasonable cost. And we will able to maintain our margin EBITDA in the range of 14% to 15.5%. Sir. Understood. Yes. Thank you very much for holding. Yes. Thank you. The next question is from the line of Rohit Puresh from Samadva Investments. Please go ahead. Good evening, Thank you for the opportunity. Sir, I had a couple of questions. First, on the LPG cylinders, how much for FY 'twenty six will be domestic and how much will be exports?

50:07 Normally, will find domestic and export will be almost fifty-fifty. And I have you were asking me for '26, high '26, that data have been provided at time. Currently, I don't have that figure. But normally, we consider because my capacity is currently 1,400,000 cylinder considering the different sizes of the LPG cylinder. We do different sizes, means five kilograms, 10 kilograms, 15 kilograms, 26 kilograms. We can maximum can produce 12.5 lakh cylinders in a year. But this year, yes, in the Q1 figure is already given to you. And it is depending how much export order because it is in our hand. We have some something in our hand. If the exporters are there, party want, we can delay it also if local requirement is more because we have to see in which month they should arrive it, we can take some direct vessel, we can take some indirect vessel and give the servicing to the customer.

51:12 But normal when we take the order, we consider almost 50% to 60% to first the local make in India to support the local industry, local OEM market and balance 40% we used to do the export. Understood. Sir, within the 50% domestic market, how much will be PSU versus non PSU? It is entirely PSU. All companies are currently, no, no. We are not supplying to non PSU. Long back, we have supplied to some of the confidential petroleum company. Some we have given to the Reliance, that's all. They are reusing back and completing it. Otherwise, no, everything is PSU only. Understood. Thank you so much, sir. All the very best. Thank you. Yeah. Thank you.

52:00 Thank you. The next question is from the line of Devam from Arteco Asset Management. Please go ahead. Yeah. Hello, sir. Sir, I wanted to confirm the level of debt, the cost of debt and the exact working capital at the end of q one. What would be the one off working capital level in the numbers right now? And finally, given the INR $3.42 crores of unutilized QRP proceeds, our other income should be much higher than what it is even if it be completed around 5.5% to 6%. So what is the reason for the difference over there? Let me see that. You asked some relating to bigger question, but I'm very roughly I know my cost of the fund. 8.5% is cost of the fund is there. And another, you asked me about INR $3.40 crore FD is there. Yes, FD is given there because I have required to give put the money, which unutilized money for the QIP portion is kept under that. And I'm getting the interest income over there and the interest income have been netted.

53:07 So that will not come under the other income because the third of the is already considered in by the net interest income. So with this company other income, it's hardly other income, other income, how much other income is there, then you own account with the rent or something which you receive, That will be how much other income is there in the Q1? Let me see that. How much other income is there? Crore other income in the first quarter, which is mainly on account of the rental income because certain premises which company is owing and given on the rentals including the mold and machinery given on the rental, which were not utilized by the company.

53:54 And in the whole of the year, what you will see Sir, that is last year was the INR 9 crore, right? Whole of the year was INR 9 crore. So on that, just understanding that what you mentioned that actually if we just reverse all the debt that is around INR $5.46 crore based on the ratios given in the quarterly update. So if it is 5.6 crores of debt and the cost is 8.5%, then after netting of a QLP proceeds, let's say, 6% or five and a half percent sort of quarterly number, INR16 crores finance cost does not tally up. So is that interest, what are the other components of finance cost you can just... No, I think I will explain you this. I understanding am you. You know the major cost which is coming even I have mentioned in my last call also, even company pay off entire debt, no any outstanding is there on account of debt and company there are no any cost of the funds.

54:57 Even though there is a certain non fund based facilities, which is called the bank guarantees, import cost, documentation cost, export documentation cost, which is going to be continue because I have to continue have attention of the banks. Normally, the banks went into the facility. For example, I need a 1,000 crores facility on account of the bank guarantees, on account of the documentation, LG facilities like that. Then you know that every bank charge some kind of the 05% to 0.75, it is called the product. The renewal fee need to be paid, okay. So I mentioned that and company most of the composite product we are servicing to the government companies and semi government companies and multinational companies, even in some of the packaging product also, which is company has working on the tender with system need to provide the guarantee, bank guarantee. So utilization of the guarantee limit in the range of INR400 crores to INR500 crores need to be given.

56:02 And if the 5% value of the guarantee or 10% in certain cases, which is to be for two years or three years, performance guarantees to be given. So, 30 crores to INR 35 crores facility on account of the non fund based cost is going to be continue, number one. Number two, we have a debt free as a company overall. But if I will see the country by differently, certain countries have a facilities available, I'm continuing. Certain countries have a cash plus available. So they use their surplus cash or buying on the merchant of cash basis and selling the material. I can't transfer the inter country fund available on every fortnight or every month like that. So the running cost INR35 crores to INR40 crores on account of the non fund, known fund based facility cost plus the renewable cost of the facilities will continue in the range of INR35 crores to crores as against INR100 crores, which were there the cost of the finance cost two years back last year, INR2425 crores and INR25 crores, INR25 INR25 that part and trend is very much appreciated, and that is also understood from the annual report. No, I think if you need to be digital working, I welcome you. You can come with and understand with my Chief Finance Officer about this entire transaction. We have a detailed... Just what is the if just one part, what

57:32 is the one off capital working capital level? Because I think there is non fund based difference that seems to have increased. So the one off working capital level seems to have gone up. That should moderate in the next two quarters. Is that the right understanding? No, I could not get you first thing what you want. I have mentioned you about the working capital cycle of 115, which was in March. Then which is reduced to one hundred and five days, which is currently company is keeping target of ninety days, working at the cycle time. I'll work out with that explained to you seventy days receivables, sixty five days inventories and forty five days creditors in the net ninety days is the company target. Now certain things working capital part is depending on the state in the whole month take place. You are very well aware that always you can't compare and one another thing I would like to tell you, in first quarter company used to do 22% business, second quarter 24%, third quarter 26% and last quarter 28%.

58:37 That's way 100% business whole projected carried out. In other words, the first half 45%, 44% to 45% and second half 55% to 54%, it still takes place. Exact working at currently I don't have available, how much working April, how much term loan, but yes, overall figure is available and from that the working can be possible. Last quarter interest and this quarter interest multiplied by companies having fund cost of 8.75% in India, 6.5% overseas and the borrowing internationally and India put together different I can say almost it's 70% to 3070% borrowings in India and 30% borrowings are overseas.

59:23 This is a way of the working. So exactly working you want to understand, you are welcome and understand from my office. You can send the time and accordingly they will devote the time and you can understand. Exactly working how the interest has been worked out for this quarter. You, sir. Yes. Thank you. Thank you. Ladies and gentlemen, due to time concerns, we will take that as the last question. I now hand the conference over to Mr. Bharat Kumar, Vagaria for closing comments. Thank you very much. It means I'm very happy that most of the valued investor has got required information in my detailed investor presentation, which is voted on the site. Otherwise, I was thinking that with a lot of caution in the quarter one considering the ongoing war and understand the company profile.

1:00:15 Once again, I would like to thank for hearing the management comments on that. Again, I'm assuring as far as there is no any change in the growth guidance, margin guidance and the paid guidance for the next three years because everything is online, all the commitments provided, we assure you to fulfill and return to the investors which have been assured. And we are the fully compliant of all the guidance and the rules and regulations of the exchanges, whichever are required to fulfill that. Thank you very much once again. On behalf of Covera Security, that concludes this conference. Thank you for joining us and you may now disconnect your lines.