Tinna Rubber & Infrastructure (NSE:TINNARUBR) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Tinna Rubber and Infrastructure Limited Q2 and H1 FY 'twenty seven Earnings Conference Call hosted by Co India Advisors. Opportunity for you to ask questions after the presentation concludes. I now hand the conference over to Ms. Tinna Kapoor from Go India Advisors. Thank you, and over to you, ma'am. Thank you,. Good afternoon, everybody, and welcome to TINNARUBR and Infrastructure Limited earnings call to discuss the Q2 and H1 FY twenty seven results. We have on the call mister, joint managing director, mister Kumar, director and chief operating officer, mister Kumar, chief financial officer, and mister Rajashi Datta, business development corporate affairs.

0:58 We must remind you that the discussion on today's call may include certain forward looking statements and must be, therefore, viewed in conjunction with the risks that the company faces. May I now request mister Gaurav Sekri to take you through the company's business outlook and financial highlights, subsequent to which we will open the floor for Q and A. Thank you. And over to you, sir. Thank you, Sana, and good afternoon, everyone. Sana, am I audible okay? Yes, sir. Loud and clear. Thank you. Welcome everyone to TINNARUBR and Infrastructure Limited's Q2 and H1 FY 'twenty seven earnings call. Our results and earnings presentation are available on our website and on the stock exchanges.

1:45 I will cover the strategic updates and then Subodh will take you through our operational and financial performance. H1 FY twenty twenty seven has been a landmark period with profitability at record levels on both stand alone and consolidated basis. In Q2, consolidated revenue grew 31% and PAT grew 45% year on year, reflecting the strength of our business model. Care Ratings also have upgraded our credit rating to Care BBB stable for long term facilities and Care A3 plus for short term facilities. Our 3,500 tonne per annum micronized rubber powder expansion is on track for commissioning in Q3 of FY 'twenty seven.

2:38 It will take our total MRP capacity to 20,000 tonnes per annum, making us the world's largest producer of MRP. At our plant in Gaurale, the tyre peroalosis oil began commercial sales in Q2 and we expect it to stabilize by Q3. We recovered Carbon Black production starts in Q3 and we expect commercial sales to commence in Q4. Our Polymer Composites and Masterbat business more than tripled its revenue to INR27 crores in H1. With 12,000 tonne per annum capacity added at KvaNAR, its capacity is now 18,000 tonnes per annum and we expect the PCMB business to contribute 8% to 10% of the FY27 revenue, which is as per the guidance given earlier this year.

3:41 We have completed INR45 crores of CapEx in H1 out of INR100 crore plant across FY 'twenty seven and FY 'twenty eight, I am pleased to inform that we have completed acquisition of 40 acres of land in Andhra Pradesh for an integrated rubber and plastics recycling complex. We plan to invest approximately INR250 crores over three years at this facility, which will involve tire recycling, plastics recycling, pyrolysis and a recovered carbon black plant at this location. In our Q2 filings, we have informed our shareholders that our Panipat plant land may be acquired by Haryana government, While our representation to the state government is pending against this acquisition, we wish to clarify that if this land is eventually acquired by the state government, our compensation due to us more than offset the book value of this plant.

4:50 Our Tannibar facility is our oldest and smallest of the factories, where we only make crumb rubber and micronized rubber powder. All the plastics recycling facility in North India is not located at this premises. Therefore, to further clarify and as already informed in our Q2 filings, the acquisition of Panipat Land, if it was to happen, will not have any material negative impact on our operations. Internationally, our Oman plant ran at 90% utilization in H1 and its EBITDA margins improved to 11.5% from only 6.4% in FY twenty twenty six.

5:41 In South Africa, Phase one is complete and exports of semi processed materials have begun. The 9,000 tonne per annum crumb line, which is part of our Phase II at South Africa is now under commissioning. This has got delayed by three to four months due to supply chain disruption and some of our equipment getting stuck in The Middle East and was not able to reach South Africa on time. In Saudi Arabia, abroad has been allotted for a 24,000 tonne per annum tire recycling plant. We expect to begin construction in H2 of FY 'twenty seven, of course, subject to the geopolitical situation.

6:35 We have also set up Tinna Rubber, Chile SPA in Santiago to widen our end of life higher sourcing network. I am pleased to inform renewable energy met 40% of our power needs in H1 as our renewable capacity rose from 1.23 megawatt to 4.48 megawatt and the solar power savings have touched approximately INR2.37 crore. We remain focused on our Vision 2029, which is to achieve revenue of INR 1,000 crores, revenue CAGR above 25% and profitability CAGR above 33, EBITDA margins above 18% and ROCE above 30%.

7:29 Part of our vision is also to expand ourselves from eight to 10 locations. I am pleased to inform that we are making good progress on all of these fronts. With this, I hand over to Sumod. Thank you, Varavji, and good afternoon, everyone. Coming on our operational and the financial performance. In H1 FY 'twenty seven, tire crushing volumes grew 30% on year on year basis to 86,000 tonnes. Production of MRP micronized rubber border and reclaimed rubber rise by 19% supported by steady demand from the tire industry. By segment, Infrastructure revenue grew by 38% to INR212 crores despite bitumen supply constraints.

8:22 Industrial segment revenue grew 37% to INR85 crore, which also includes export volume, which has contributed 6% to our total revenue and the export volume growth has been witnessed approx 15%. Consumer segment revenue rose to Rs. 21 crore from Rs. 19 crore on price correction with stable volumes. With steel revenue rise to Rs. 57 crore from Rs. 53 crore also on price correction with stable volumes. Infrastructure and Industrial remain our main growth drivers. On a console basis, Q2 revenue was INR 157 crores, up from INR 140 crores.

9:11 EBITDA grew by 37% to INR29 crores and PAT grew by 45% to INR17 crores. EBITDA margin stood at 18.8 against 18.0% and PAT margin 10.9% against 9.8%. For H1 revenue grew by 25% to INR313 crores while EBITDA grew by 50% to INR63 crores and PAT grew by 60% to INR 38 crores. EBITDA margin stood at 20.4% and PAT margin stood at 12.2%. Profitability moderated from Q1 because of the startup cost, geopolitical uncertainties and subsidiary performances.

10:01 We expect these to normalize as operations scale up. Among subsidiaries, Oman reported PAT of INR 1.3 crores in H1. South Africa and Saudi Arabia combined together recorded a startup loss of around INR 94 lakhs. TP Build Tech had revenue of INR41 crores and EBITDA stood at INR4.7 crores, contributing INR1 crore at the console level. In the best case, it is targeting revenue of INR100 crores by FY27 by raising utilization at Kolkata, expanding nationally and growing its construction system business. It plans to launch next generation self repair products by FY28.

10:50 Our balance sheet also strengthened further. Debt fell to INR111 crore from INR121 crore at the end of FY 'twenty six. Our interest coverage improved to 9.91 from 7.49 and net debt to equity at 0.32%. From FY 'twenty three to FY 'twenty six, our revenue nearly doubled, EBITDA grew by 2.5x and PAT grew by 2.4x and for FY 'twenty seven, we are targeting revenue of around INR700 crores, EBITDA of INR126 crores and PAT of INR70 crores. With that, I open the floor for question and answers. Over to you, moderator.

11:41 Thank you. Thank you very much. Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. Participants are requested to use answers while asking a question. First question is from the line of Ritesh Ashar from Chogun Capital. Am I audible?

12:31 Sir, congratulations on this quarter. We really appreciate the work you're doing in circular economy and appreciate your business. I have a couple of questions today on the business and this quarter. So just give me a moment. So first question is, sir, would like to know your EBITDA margins for this quarter have slightly come off from 18.5%, 19%. And this quarter, they are around 16. So I have a couple of questions around this. Firstly, the PCMB mix has improved from, I think, 3% to 9%, which I think should contribute to better EBITDA margins. And while I understand gross margins have not changed much, the possible factor I'm thinking is the steel revenue, which your presentation says the prices have come down. However, the prices of steel have been progressively increasing from, I think, 800 a ton in October 25 to $300 a ton in September 26.

13:31 So that is one question I have, sir. And Regarding EBITDA margins, our we have always indicated EBITDA margins of about 18% is what we are aiming for, north of 18%, and we have delivered on that. The previous quarter, as a comparison, I think, was a slight aberration. We had a much better quarter margin wise previous quarter because of variety of reasons, some benefit in raw material prices and inventory that we were carrying.

14:23 So those kind of things can happen. But the guidance we have given and I'm pleased to say that we have met those targets is that our business model shows our ability to deliver 18% plus and we are delivering that. So our EBITDA margin even in Q2 is 18% plus. That is point number one. I think two, three positives, which you mentioned, I just want to comment on that. Firstly, on the PCMB business, actually, that business operates at a lower EBITDA margin than our core business, and that's mostly because it's still a new business for us. You see, we are less than a year in the PCMB business. It is still growing, still stabilizing, still a fair bit of money being spent on R and D.

15:18 So that is one point. And its contribution to our overall business will grow to about 8% to 10% this year. We strongly believe in that business and the niche we have found for ourselves to operate in, and that has a lot of legs to it for growth. Does that answer everything that you had mentioned? Or have I missed something? No, I would like to understand on the steel parts, the it's a small portion, I understand, but would like to understand how that will come that will take place in the next few quarters or years to come? You're asking about the PCMB business, right? No, no, the steel part. Steel? Sorry, steel. The steel craft.

16:07 Yes, yes. So steel, as you know, it is a byproduct that we get when we recycle tires. And the value addition that we do to some part of it is also shaping up nicely. And it will be an important part of our business, but it will always be a case for us to do value addition of a high product of our core business of recycling of tires. Our core activity will remain rubber and tire recycling. Right, sir. So I'll just push back in line. I have a couple of more questions, but I'll take them later. Okay. Thanks. Thank you. Thank you. Next question is from the line of Nikunj Panuchali from Wallfort PMS.

17:13 Hi. Thank you for the opportunity. Sir, on the capacity front in India tire crushing business, we have mentioned that our capacity would be rising to about two lakh 35,000 tonnes. Can you just help me, like, where are we increasing this capacity and what is the timeline? Are we... How are we moving on that timeline? Nikun. Subodh, this is Sai. So like I covered in my the statement, we are almost utilizing around 85% to 90% capacity, whatever the currently installed at across India. And that's the reason we are now expanding further and we have finalized this 40 acre land parcel in the state of Andhra Pradesh that is basically to increase our tire recycling capacity, which will further the downstream product like MRP, reclaim rubber, plastic recycling, CPO.

18:13 Everything will be combined at one common fully integrated complex. So that's where we shall be working on that. And in addition to that, globally, we are also expanding our operations in Saudi Arabia, which will add close to 34,000 tonnes of dry recycling capacity. So that's how we have planned the road map for the next three years. Right. We have mentioned it by FY 'twenty seven. And so that is what my question was that our capacity should increase to two lakh 35,000 by FY '27 end. Saudi Arabia, we have just started. The construction would go on. And other places also, the plant is yet to develop. So what... How are we adding capacity in the current year is what my question is. Yeah. So FY '27 estimated what you are reading, 235,000.

19:05 Yes. We have we are in the mid of starting our construction activities in the Saudi Arabia, which we have added to this one. And that is slightly disturbed because of this West Asia conflict. So that is in pipeline, but the further expansion in India will happen in the completely new greenfield project. Okay. Okay. Yes, that's it from my side. Yes. The The next question is from the line of Ashra Shed from Ventura Securities.

19:56 Please go ahead. Good afternoon, sir. Congratulations for a wonderful set of results this quarter. So we have been performing consistently over past two quarters, and so I wanted to understand what are we doing differently that we can maintain a reasonably stable margin While we see a comparison with other peers in recycling sales, they have took a... They have taken a hit on the margins due to the geopolitics. So wanted to understand that how are we managing sourcing and how is our basically our outlook has changed on the sourcing side of things and how are we managing things on that side? Hi, thank you for your question.

20:44 Varav here. We cannot comment on our competitors. As far as our business is concerned, we have consistently communicated that we have built a unique business model with some differentiated aspects to our business, diversity of geography, the diversity of raw material base, the diversity of customer base, these are the pillars which differentiate us from our competition and which enable us to operate at the margin that we are operating. That is the key to our business. There is no other company in the country, which is operating on a pan India basis.

21:36 There is no other Indian business also which has gone outside India, that's the way we have gone. Our diversity of running various kinds of feedstock and catering to various verticals, that is what sets us apart and we have communicated this over the last four years as our strength and we will continue to build on this strength. I hope this answers your question. Yes, sir. It does. It does. And sir, secondly, I wanted to ask about the progress that is made upon the reclaimed rubber usage in road surfaces. So is there any approval process that we need to show the durability of the road with reclaimed rubber, any test that we need to perform or any regulatory approval process?

22:34 So firstly, clarify, reclaimed rubber does not go in road construction. It is crumb rubber, which is converted into a crumb rubber modifier and that is the additive to bitumen for road construction. So that's point one. And in regards to your question on approvals and consents, rubberized asphalt and crumb rubber modified bitumen is now more than two decades road concept in India. And various tests and validations have already happened. Hundreds and thousands of lane kilometers of roads have been made, which stand as a testament to the effectiveness of this product.

23:20 It is already mentioned in the IRC guidelines on where and how it has to be used. So it is not really needing any more validations or certifications. All that data is is already there. Okay. Got it, sir. And the new plan that we have acquired, so can you give us a basic outline of the product mix or is that still not confirmed yet? So we have acquired land, not a plant. That land has been acquired in Andhra Pradesh and it is to build a new greenfield facility And our plan is to undertake tire recycling both for manufacturing of crumb rubber and derived products as well as for the tire pyrolysis and our regenerated carbon back plant.

24:18 And it will also house our PCMB business, which is the polymer composites and masterbatches. And within this 40 acres, we will also set up a facility for our Construction Chemicals business, because we are not yet present in the South and the intention is to also take the TP building business in South and on this location. Okay, sir. Fair enough. Got it. Thank you for answering my question and good luck for the future. You're welcome. Thank you. Thank you. The next question is from the line of Tinna Rubber from three sixty one Capital.

25:15 Could you please let me know how much is the ETR income I'm sorry to interrupt you, mister Ram. Can you please speak a bit louder? Sure. Can you hear me now? Yes. Yes. Speak to me. Sure. Sir, can you let me know how much is the EPR income generated during Q2? INR 4.6 crores odd crores. Okay. And could you help me with the last quarter's number, sir, if you don't mind? Approximately 6.7 crores. Got it. And my second question is the Saudi land of 24,000 tonnes, which is expected to start construction by the end of this calendar year, do we are we on track? Or do we see any slight delay in this?

26:05 See, the Saudi land is around 13,000 square meters, and it's for a setting up of a plant of 24,000 tons capacity. We are good to go, actually. We are just waiting for the situation there to stabilize to some extent. Like I said, the land is already allotted. We know who the contractors will be. We have not yet made any advances or released any payment. We thought it prudent to wait and see for things to settle and that is what we are doing there. Waiting and watching, we have at least one person permanently based there now to give us first hand information of what's happening on the ground. But we are yet to release any advances or work orders for the construction of the facility simply because of wanting to wait and understand the local situation a bit better.

27:12 Understood. And on this Panipat plant, the way the state government of Haryana wants to acquire, So if that is going to happen, then where do we plan to ship this machinery? If you can help us understand how long it will take. Sure. So Panipat facility, as I mentioned in my opening comments, is our oldest facility. It was set up way back in mid-2000s. And all the equipment and the plant, etcetera, is fully depreciated. It's our smallest facility where we are only making chrome rubber and MRP. We do not do reclaim there, we do not do any other activity. Also the entire plastics business, which is recycling business based in North India is not on this premise, it is at different locations.

28:07 So we do not expect any major disruption to our work. It's a very small plant. I think within three to four months, we can move it, shift it and continue with our operations. But like I said, we are continuing to represent to the state government on this topic because it's a running factory and land they have expressed need to take also for industrial purposes. In our view, it actually does not make any sense why you would take a running factory growing people for industrial purposes. If it was for some general and public infrastructure, we can understand. So we are confident that we can convince them. If not, then it is, like I said, it's a very small factory, less than two acres.

29:01 We can move it very, very quickly. Understood. Understood. Got it. And just last question, how do you see this recovered Carbon Black scaling up? I know, I guess, in the last con call, you have told about T2 and RCD contributing to 7% to 10% of top line. Does this still hold? Or if you can please correct me on this number? So on the PCMP business, we are very bullish on it. I think we are applying our historical knowledge of thermoplastic rubber compound, etcetera, that we have within our group into leveraging in this business as well as our knowledge of recycling of tires. There is some benefit of those learnings also which we can apply to this business.

29:57 We think this has tremendous opportunity and growth. There are various mandates now in place on mandatory use of recycled plastics that is giving tailwind to this business. And we intend to already as expressed, we will take it to South India to the new facility we've acquired. So it's clearly going to be a very important part of what we do. And I'm confident that we will achieve our target of it being about 8% to 10% of our total business in FY 'twenty seven. Understood. And just last question, if I may. Your it's a nation state, I understand, but this Andhra Pradesh facility, how what is the expected asset terms that we are looking at?

30:44 Sorry, which facility are you asking for? The Andhra Pradesh facility that is about to come up. I know it's early stage, but if you can guide us on the asset terms and broad based numbers. It can be exactly in line with our current ratios because whatever we are doing already, this is just doing more of that. So it will be CapEx to sales ratio is about 3x. Okay, understood. Thank you. Thank you, sir. Thank you. The next question is from the line of Mihir Bhora from Macquarie Securities. Please go ahead. Yeah. Hi. Thank you for taking my question.

31:29 And congrats on the good set of numbers, sir. So just one clarification question here. Broadly, what I understand is in terms of our raw material, which we source from outside, freight is a very important part of it. And currently, if we see the freight prices have been moving, like, where... Is... The move has been very steep. So how does the price mechanism work here? Are we able to pass on the prices to the end customers, Or is there some kind of a lag here? Can you just explain, throw some color on to the pricing mechanism here with the customer? Sure. I think we have, as a company, done quite well in passing on the extra cost to us, to our customers and for customers, this has become even more compelling. The recycle rubber, use of recycled rubber materials has become even more compelling than it was because just as we are facing the brunt of high energy prices, prices of natural rubber, synthetic rubber have also shot up. So tire companies or any rubber industry is finding even more merit to use recycled rubber products and that is just the reality of things at the moment. So yes, we have had higher costs and more erratic logistics over the last

33:01 four to five months, but the very high energy prices, very high natural material prices such as natural rubber, etcetera, have also assisted us where our customers continue to see a lot of merit in using more of our products and paying our desired price. Okay. Got it, sir. And like for like first half has been very strong in terms of margins also we have managed well. So second half expectation also continues to be the same or are we seeing some kind of inflation due to with the second half can be on lighter side related to first half in terms of margins? See, we have consistently maintained and delivered EBITDA margins of 18%.

33:48 I see that to be achievable as a guidance, irrespective of what is happening on these external circumstances and factors, I feel we should be able to maintain 18% run. 50 bps, 100 bps up or down can always happen. That is hard to predict. Sure. And sir, lastly, on your Chile investment, like what would be the total amount of investment going there? And what is our rationale behind going into those markets? Please allow us to come back to you with more details on that over the next few months. We see a compelling opportunity.

34:35 We are confident that we will do something very interesting there. But I would like to give you more details of that over the next few months, once we have a better handle on it. Sure. Okay. Thank you. The next question is from the line of Krish Jain from Napha Asset Managers. First of all, congratulations on a good Q2 and first half, and I hope this performance continues. So just wanted some clarity on the capacity. If I'm not wrong, the FY twenty six India capacity was a 185,000 tonnes per annum, and you plan on increasing it just to two thirty five. And if I'm not... Just correct me if I'm wrong here, but right now, even in h two... After h two, the capacity is still one eighty five. So we wanted to get a breakup of this extra 50,000 tons per annum as to where you are planning to increase this and what kind of products are you adding?

35:38 Or is it rather say that you're adding capacity in these products? So hi, this is Subodh here. See, the total capacity, we have given a guidance of 250,000 tonnes by FY 'twenty seven. But the India capacity is currently at around 185,000 tonnes and Oman additional 15,000 tonnes make it to total 200,000 tonnes of installed capacity. Going forward, like we have in mid of setting up our plant in Saudi Arabia, which will be having close to 24,000 tonnes, plus some debottlenecking and the new fresh investment what we are planning for the Pantara. This all will take us to the planned capacity in the coming years.

36:32 But that's for the coming years where Andhra capacity additions will start maybe a bit later, maybe But from FY '8 or 'twenty if I refer to Page 11 of your PPT, the India capacity, what you're expecting is two thirty five. So the extra 50,000 tons per annum, just wanted to get an understanding what kind of capacity are you adding. Just in the short on this. I mean, six months. Even excluding the Saudi capacity of 24,000, that's still another 26,000 tonnes per annum, if you could give a break up of that, please. Gaurav here. I think the clarity that we can give you on this today is that we have done some debottlenecking at our existing plants to add maybe 10,000 tonnes 15,000 tonnes of capacity.

37:23 I don't think we are getting to 235 without setting up a new plant. We were counting on Saudi to have happened till now, but that is delayed for obvious reasons. South Africa, I believe, will touch about 10,000 tonnes recycling in this financial year itself. So that is an addition to the overall capacity. But Saudi is delayed. We should have already been building Saudi had these troubles in Middle East not happened since February of this year. And I think what we are now doing is since our most of our land is fully exhausted and built in West And South And North India.

38:13 That is why this new premises of 40 acres that we bought, which is much, much larger than any of our facilities. Our single largest facility right now is in 15 acres of land, whereas we are now taking 40 acres to build capacity here. So that is where the work will begin and we expect to begin and break ground as early as November. Yes. Sure. That answers my question. Another question I had regarding the future CapEx after FY '27. You've planned for $2.50 crores from under Pradesh and another 100 crores... Sorry, 50 crores if I'm not wrong. So that's 300 crores. Just wanted to get an understanding of how it will be funded, whether it will be through debt or you're raising money or it will be through internal approvals.

39:08 Sure. So, Anra, the INR $2.50 crores, we have... It's it's going to be over three years. So we have sufficient time, I think, to decide on the fundraise or how the CapEx will be funded. And we have all options open. Fortunately, we have a very strong balance sheet. So we are comfortable to explore various options, and we'll decide over the next six months from our year. As a final question from my side. You mentioned that even TP Build Tech facilities are included in this INR $2.50 crore CapEx since it won't exactly reflect in our balance sheet. I just wanted to get an understanding how much is the split for Tinna Rubber and TP Build Tech in this $2.50 crore?

40:01 I... I'm sorry. There was a little audio disturbance. Can you repeat your question? Sir, yeah. As I was saying, since Tinna is an associate, the CapEx near Tinna Rubber won't reflect in our balance sheet in Tinna Rubber. So just wanted to get the split of the $2.50 crores under Pradesh plant. How much is the CapEx for Tinna Rubber and how much is the CapEx for Tinna This $2.50 crores is exclusively Tinna Rubber. Oh, okay. Perfect. Okay. That's all from my side. Wishing you all the best for the future. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants, we will request to please limit your question to two per participant.

40:50 The next question is from the line of from 3A Capital Services. Please go ahead. Hello. Am I audible? Yes. You are. Please go ahead. Yeah. Thank you for the opportunity, and congratulation to the team for delivering good set of numbers. Couple of questions, sir. In your annual report investor presentation, you have constantly mentioned that recovered Carbon Black would be one of the fastest growing products. And there are other players in India as well that are expanding in this product. So could you please throw some light on this product and margin profile for the same? The regenerated carbon black is a very interesting material, which is basically substituting use of virgin carbon black and it has tremendous opportunities, whether it is in the tire industry or other alternate industries.

41:47 Therefore, because of the diversity of applications, is an exciting product to get into. We expect the overall tire paralysis and the RCB business to operate at similar margin profile as our core business, which is around 18% EBITDA. Great to hear that, sir. And one last question, what could be the revenue potential of PCMB business at peak utilization? PCMB business, we are it's very dynamic. For me to give you a number will be too premature. We had given an outlook early this year that our top line from the PCMP business will be approximately INR70 crores and we believe we'll get very close to that in this financial year.

42:46 And next year, we will expand this business to do about INR125 crores at least. That is what we are working towards. Okay, sir. Thank you and all the best for the future. Thank you. Thank you. Next question is from the line of Sandeep Pukarna from Equitry Capital. Please go ahead. Sir, could you help us understand that TINNAR's current average procurement cost per tonne of domestic as well as imported end of the life tires, including the landed cost breakup of imports? See, we And how the company manages sorry, yes. Yes. No, we don't get into this kind of detail on open calls.

43:35 We consider it sensitive to Yes. Our Not interested. Could you help us understand the margin for the TPO, Recurred Carbon Black and Reclaim, if you can? As answered earlier, the margin EBITDA margin profile of the pyrolysis, is the CPU and the RCP business will be along the lines of about 18% as our current businesses. Okay. But it's a gross product wise guidance you cannot provide, category wise? Product wise, it is hard to give you because both are the end products from the same process. Okay.

44:21 Okay. Got it. Thank you. Thank you. Participants are requested to please limit your question to two per participant. The next question is from the line of Javedan Sari from Capital. Please go ahead. Hello. Good afternoon. Thank you for taking my question. So my question is on recovered carbon lag. Could you please elaborate on the key issues affecting sales and customer acceptance? Because as per my knowledge, there is a less demand on the supply side of RCD. Is it primary in customer... In customer... Same thing with input tire quality or feedstock, like finished product parameters that contain moisture and ash content also? So can you please elaborate this?

45:10 See, RCB, there are various parameters to the regenerative carbon black and every type and spec of RCB will have a certain application. The highest and the most purest form of RCB will be used by the tire industry. But even if there are depending on applications, there are different spec RCB applications for other kind of products. Maybe I also would like to add here, Javed, for the tire industry, it always remain a sustainable raw material, which will partially replace the virgin carbon black. But there are many applications in the plastic, in the non tire segment like rubber mat industry, like, you know, the must match industry, etcetera, wherein RCB can go... Conveyor belt industry wherein RCB can go in a very good quantum without, you compromising on the end results.

46:17 Okay. Yes. Okay. That is from my side. Thank you. Next question is from the line of Aryan Droshi from Divita Investments. Please go ahead. Yes. Can you hear me? Yes. Yes. Go ahead, please. Yes. So congratulations on great set of results. My question was on H1 FY 'twenty seven. The tire process rose 28%, right, to about 92,000 tonnes. But the revenue, excluding the TCNP, was only 18%. So new per ton fell about 8%, right, about 33,000 to 30,000. So my question was, what did it fall and is a price drop or a product mix change? I believe what you're referring to is because of the product mix change, which in our case, because we get to so many sectors and different kind of product categories, it can happen.

47:16 Understood. Understood. And the second question on the geopolitical situation, like crude is about, like, 114 and the freight costs are also high. What has happened to your waste tire cost per tonne in Q2 against the Q1? And how much of the tires do you import? And can you pass any increase on the customer? See, we use a prudent mix of domestic and imported tires, that's one. Second, we have multiple origins from where we source tires. So it has, I think, assisted us. This diversity has helped us to manage our costs better. And what was your last question? Yes. My last question was, like how much tie on to your import or can you pass any increase on to the customers?

48:06 Yes, we've able to we've taken some price increases in the last few months and customers have accepted it and given to us. We are operating at optimal capacity utilization. We are also carrying very low inventory. So that's a sign in itself that we have been successfully been able to pass on the price increase to our customers. Perfect. And one last question on the Pyrolysis. I'm sorry if it's asked before, but Pyrolysis oil started in Q2, right? And in July, you started 7% to 10% FY 'twenty seven revenue coming from this business. That is at 70 crores. So my question was what was in a pyrolysis oil revenue in Q2? And which tire companies have approved your recovered carbon black? Like two questions on this. I don't have the specific number offhand.

49:02 I can e mail it to you. If you write to our IR and get in touch with us, we can send you that information. And is that seven to 10% target? I'm very, very sorry to interrupt. May I request you to please rejoin the queue? We have Yeah. Yeah. It's okay. For the call. Yeah. Okay. Thank you. Next question is from the line of Narendra from Equinova. Please go ahead. Am I audible? Yes, Narendra. Please go ahead. Yeah. Thanks for the opportunity, and congratulations on a great set of numbers. So following up on one of the previous participant's question regarding the pyrolysis feedstock. Right? So as per my reading, imported feedstock in pyrolysis is banned. So is my reading correct, or has there been a change in policy? No, you're right. As of today, for pyrolysis business, imported feedstock is not permitted.

49:59 Okay. So we have the relevant domestic procurement, right? That's correct. Okay. Okay. And sir, the pyrolysis segment, are we planning to add more capacity to this or we are happy with where we are right now? We will add a pyrolysis and RCP plant in our new land that we've acquired in Andhra Pradesh. Okay. So sir, what is the current capacity and what would be the capacity over there, if you could draw some light? New capacities, it is too early to tell you what size we will add, but our current plant, pyrolysis plant and further downstream products is 100 tonnes per day.

50:59 Thank you. The next question is from the line of Sumit, an individual investor. Please go ahead. Yes. Hello, I'm on. Yes, Sumit. Please go ahead. Sir, is it regarding the pricing difference between the recycled carbon lag versus the carbon lag being sold by companies like PCDL? Of the difference, is there any benefit for the individual tire manufacturers? Hi, Sumit. So the name you have just mentioned was PCBL. PCBL among the largest virgin carbon back manufacturer, Recovered carbon pack is basically derived out of the end of life tires, which is a sustainable raw material, which is a part of the sustainability goal of these tire companies, not only tire companies, now there are many applications wherein the regenerated carbon pack can partially or a great amount of the percentage in certain application can be adopted.

52:02 And parallelly, it also extends the cost saving to the user. Yes, right. So is there any pricing difference I want to ask regarding that? There is. Is. See, virgin carbon black pricing is completely driven by the crude oil pricing, whereas this being a sustainable raw material is having quite stable pricing, not that much of fluctuation, and it is at least 30%, 35% cheaper than the virgin carbon pack as of now. Okay, sir. Sure. Got it. Thank you. Thank you.

52:53 Next question is from the line of Ashwini Nagar, an individual investor. Please go ahead. Yeah. Good evening. First of all, let me congratulate the management. I've been following your investor presentations for the last many quarters, and the way which you transparency and clarity present is really worth congratulating. I have two two questions. One is, if I got your guidance right, you have said you will do 700 crores this year, EBITDA $1.20, and VAT 70. And you have already done 361 and 36. That is one question. And second is how much of seasonality is there in your business and the right way to compare your result is to see quarter on quarter or year on year?

53:46 Hello, Mr. Nagar. Firstly, thank you for your kind comments. We appreciate it very much. In regards to your question one, we are maintaining our top line guidance of around INR700 crores. We are confident we'll achieve it. We are more or less halfway there. In regards to the EBITDA and PAT also, we are on target. We always aspire to keep maintain EBITDA margins at 18% plus. We hope to have at least a 10% PAT conversion. So we are on target on that. Regarding seasonality, our business does tend to or one part of our business is impacted during Q2 usually because monsoons tend to impact the infra business and because road construction and those kind of works tends to slow down during Q2, so there is some impact.

54:53 Usually, some impact again on the same business happens in Q4 when it is excessively cold. But otherwise, all our other verticals are not so impacted. So I think you can look at us as a business quarter on quarter surely and even in terms of this growth year on year is good parameter. We look at our business also on that basis. Okay. Thank you and all the best for your future. Thank you. Thank you. The next question is from the line of Satish Ashar from Shogun Capital. Please go ahead. Sir, last two questions from my end. One is on the CapEx.

55:45 So as you mentioned in the presentation, $2.50 crores are to be invested in Andhra Pradesh for further capacity expansion. Just to revalidate, your Vision 2029 is INR1000 crores revenue. So this obviously excludes what we're going to spend in Andhra Pradesh, right? No, not necessarily. We expect to start work on Andhra as early as next month, we will break ground. And while we will not complete this CapEx cycle of INR $2.50 crores within the next one, two years, but certainly, as the different modules get commissioned and they start, they will begin contributing. So I'm I'm fully expecting Andhra to give an important contribution to Vision '29. So, sir, thank you for that. How much would we have to spend in order to get the additional? So say, this year, are going to be at INR700 crores, which is FY 'twenty seven, and we are spending another INR50 crores apart from the INR250 crores in Andhra Pradesh. So I would like to understand if Andhra will be fully invested and to be fully yielding revenue, what is the revenue potential then of TINNAR?

56:54 See, we I do expect that we will incur a CapEx of about INR100 crores in Andhra within 'twenty seven and 'twenty eight. And that INR100 crores of CapEx, usually in our case, asset to sales ratio is 3x, 2.5x to 3x. So that's another INR $2.50 crores to INR 300 crores contribution to our top line. I hope that answers your question. So actually, I'm not sure because we also have Saudi coming up. We have I think Saudi and South Africa both coming up. So I think they will also be contributing to the revenues. And we are spending, I think, about INR 1,500 crores there as well. So if you were to take 2.5x, 3x, that should also add another INR 300 crores of revenues.

57:41 So that's what I wanted to understand, sir. What is so for 'twenty nine, do we have to how much more are we spending in order to get the INR1000 crores of top line? See, for us, the asset to sales ratio is about 2.5x to 3x. As we have mentioned and I think you have also taken note that we have another 50, which is going to be spent immediately. We have another we will end up spending at least INR100 crores, I think, in Andhra within FY 2728 as well. So all combined to get to 1,000 by FY 2029 is very much in our reach. Oman, we will not do any more CapEx, we are done.

58:30 That plant is running nicely optimally. We don't intend to invest any more money in Oman. But Saudi Arabia will take an investment of about INR 25 odd crores. Okay. So what I would expect I mean, what I think is possible would be INR 29 crores would be a little over INR1000 crores, not just baseline INR1000 is what we are saying, right? Could be... But you see, you're looking one, two years ahead, to be 5% or 10% plus or minus is always possible. And we would rather be conservative than give you we have maybe INR 1,200 crores and then deliver 1,000 You know what I mean? Absolutely. Absolutely, absolutely. Sir, one final question from my end. So this quarter, we've had some higher other expenses as well as employee. So just want to understand what's the change quarter on quarter? I understand you said there were some startup costs in the new ventures.

59:27 But employees, if you could get a sense? See, we are expenses are always front ended to get the organization future ready, etcetera. So I think we are growing at a clip of about 20% to 30% annually. So one has to gear up and get ready for some of these projects late in advance. That's point number one. So we have been hiring some great talent to help us get there. And that will temporarily show maybe some higher costs. Aside from that, in Q2, we also provided for the performance bonus in the company. So that could also be showing a higher number. It could be because of that.

1:00:16 Sir. Got it. Wish you luck for your vision, and I hope it comes true, sir. Good luck. Thank you. Thank you so much. Thank you. Ladies and gentlemen, as that was the last question for today, I now hand the conference over to management for closing comments. Thank you, everyone, for joining us today. For any further information, please contact our Investor Relations team at Go India Advisors. Thank you all for your continued support. Wish you a wonderful day. Thank you. Thank you. Ladies and gentlemen, on behalf of Go India Advisors, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.