Q1 2027 Ganesha Ecosphere Ltd Earnings Call

August 4, 2026

Manish Mahawar: From the management, we have Mr. Gopal Agarwal, CFO, Mr. Prashant Khandelwal, Senior Vice President, and Mr. Yash Sharma, Director, Ganesha Ecosphere on the call. Without any delay, I would like to invite Mr. Yash Sharma to start with opening comment, after which we will move to Q&A. Thank you, and over to you, Yash.

Operator: From the management, we have Mr. Gopal Agarwal, CFO, Mr. Prashant Khandelwal, Senior Vice President, and Mr. Yash Sharma, Director, Ganesha Ecosphere on the call. Without any delay, I would like to invite Mr. Yash Sharma to start with opening comment, after which we will move to Q&A. Thank you, and over to you, Yash.

Speaker #1: From the management: we're Mr. Gopal Agarwal, CFO. Mr. Prashant Khandelwal, Senior Vice President, and Mr. Ishaan Sharma, Director, Ganesha EcoPet, on the call. Without any delay, I would like to invite Mr. Ishaan Sharma to start the talking comment.

Speaker #1: Posts which we will move to Q&A. Thank you, and over to you, Yash.

Speaker #2: Thanks a lot, Manish. And good afternoon to everyone, and we welcome you to our earnings conference call for the first quarter of FY27. We would like to take you through our Q1, FY27 numbers, along with the key developments of our company.

Yash Sharma: Thanks a lot, Manish. Good afternoon to everyone. We welcome you to our earnings conference call for the first quarter of FY27. We would like to take you through our Q1 FY27 numbers, along with the key developments of our company. The first quarter of FY27 has been marked by a complex and rapidly evolving market environment. The global geopolitical developments, particularly the tensions in the Middle East, resulted in a heightened volatility in the crude oil prices as well as the downstream polymer markets. This has had a significant impact on the broader polyester value chain, affecting the demand patterns, the pricing dynamics, as well as the customer procurement decisions across several end-use industries.

Yash Sharma: Thanks a lot, Manish. Good afternoon to everyone. We welcome you to our earnings conference call for the first quarter of FY 2027. We would like to take you through our Q1 FY27 numbers, along with the key developments of our company. The first quarter of FY27 has been marked by a complex and rapidly evolving market environment. The global geopolitical developments, particularly the tensions in the Middle East, resulted in a heightened volatility in the crude oil prices as well as the downstream polymer markets. This has had a significant impact on the broader polyester value chain, affecting the demand patterns, the pricing dynamics, as well as the customer procurement decisions across several end-use industries.

Speaker #2: The first quarter of FY27 has been marked by a complex and rapidly evolving market environment. The global geopolitical developments, particularly the tensions in the Middle East, resulted in a heightened volatility in the crude oil prices as well as the downstream polymer markets.

Speaker #2: This has had a significant impact on the broader polyester value chain, affecting the demand patterns, the pricing dynamics, as well as the customer procurement decisions across several end-use industries.

Speaker #2: Despite continued volatility in the external environment, I am pleased to say that the company has achieved another strong quarter of very strong operational and financial results, and we are hopeful in maintaining the momentum going forward as well.

Yash Sharma: Despite continued volatility in the external environment, I am pleased to say that the company has achieved another quarter of very strong operational and financial results. We are hopeful in maintaining the momentum going forward as well. At the consolidated level, the production reached 42,826 tons, up 3.8% quarter-on-quarter, driven by a strong performance from the subsidiary businesses. However, an 11.2% drop in the sales volume has offset some of the gains, resulting in a flatter top line. Despite this, the EBITDA we have achieved is INR 29.8 crore and the bottom line of INR 29.03 crore have registered a sequential growth of 14.2% and 25.1% respectively. EBITDA margins have improved consequentially to 14.1% from 12.4%, and the PAT margins have improved by 138 basis points. This is a tremendous improvement across all our financial matrices over the corresponding last quarter.

Speaker #2: At the consolidated level, the production reached 42,826 tons, up 3.8% quarter on quarter, driven by a strong performance from the subsidiary businesses. However, a 11.2% drop in the sales volume has offset some of the gains resulting in a flatter top line.

Speaker #2: Despite this, the EBITDA we have achieved is 59.8 crores, and the bottom line of 29.03 crores, and have registered a sequential growth of 14.2% and 25.1% respectively.

Speaker #2: EBITDA margins have improved consequentially to 14.1% from 12.4%, and the PAC margins have improved by 138 basis points. This is a tremendous improvement across all our financial matrices over the corresponding last quarter.

Speaker #2: In the standalone business, there is a slight impact on production volume, though the sales volume down by 13.4% from Q4, FY26, which we also highlighted in the last on-call.

Yash Sharma: In the standalone business, there is a slight impact on production volume, with the sales volume down by 13.4% from Q4 FY26, which we also highlighted in the last con call. This was primarily due to the normalization of the elevated demand experienced in the previous quarter, softer demand from the textile sector. Higher fiber prices prompted downstream customers to defer purchases, which adversely impacted the volumes. Nevertheless, the improved realizations and the margins have more than offset the decline in volumes, resulting in a stronger financial outcome. EBITDA has increased by 13.7% sequentially to INR 23.8 crore. Other income has declined to INR 3.52 crore from INR 9.86 crore due to the discontinuation of the interest income, followed by the conversion of subsidiary loans into equity at the end of the last quarter.

Speaker #2: This was primarily due to the normalization of the elevated demand experienced in the previous quarter, softer demand from the textile sector. Higher fiber prices prompted downstream customers to defer purchases, which adversely impacted the volumes.

Speaker #2: Nevertheless, the improved realizations in the margins have more than offset a decline in volumes, resulting in a stronger financial outcome. EBITDA has increased by 13.7% sequentially to 23.8 crores.

Speaker #2: Other income has declined to 3.52 crores from 9.86 crores due to the discontinuation of the interest income followed by the conversion of subsidiary loans into equity at the end of the last quarter.

Speaker #2: The decline in interest income resulting from the conversion of loans into subsidiaries into equity weighed on the PAC, despite higher standalone EBITDA. On YOY basis, revenue has increased by 18.4%, and EBITDA has increased by 155.9%.

Yash Sharma: The decline in interest income resulting from the conversion of loans in the subsidiaries into equity weighed on the PAT despite higher standalone EBITDA. On YOY basis, revenue has increased by 18.4% and EBITDA has increased by 155.9%. Net profits are up by 79.4%. We are pending the FSSAI approvals for the food grade latest line that we have installed, which is 22,500 tons rPET facility at Warangal. It has already commenced production and is currently catering to the export markets, as well as the domestic non-food applications. Another production line of 2,500 metric tons is underway. With these expansions, company's operating leverage is going to improve substantially and thereby enhancing our ability to sustain and even potentially improve our operating margins. Global uncertainty seems to have been absorbed by the product market and the demand for fiber is also now reviving quite well.

Speaker #2: Net profits are up by 79.4%. We are pending the FSI approvals for the food-grade latest line that we have installed, which is 22,500 tons RPET facility at Warangal.

Speaker #2: It has already commenced production and is currently catering to the export markets as well as the domestic non-food applications. Another production line of 22,500 metric tons is underway, with these expansions companies operating leverage going to improve substantially and thereby enhancing our ability to sustain and even potentially improve other operating margins.

Speaker #2: Global uncertainty seems to have absorbed by the broader market, and the demand of fiber is also now reviving quite well. Going forward, we think our both the standalone, which is textile business as well as the subsidiary businesses, are going to go well and are quite well on track.

Yash Sharma: Going forward, we think both the standalone, which is textile business, as well as the subsidiary businesses are going to go well and are quite well on track. This reinforces our confidence in achieving the targets and guidance shared during our previous calls. Alongside the ongoing brownfield expansions, the company is actively evaluating and planning the future expansion opportunities to sustain our long-term growth trajectory as well. With this, I open the floor for the questions which you may have. Thank you.

Speaker #2: This reinforces our confidence in achieving the targets and guidance shared during our previous calls. Alongside the ongoing brownfield expansions, the company is actively evaluating and planning the future expansion opportunities to sustain our long-term growth trajectory as well.

Speaker #2: With this, I open the floor for the questions which you may have. Thank you.

Speaker #1: Thank you. We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star and 1 on their touchstone telephone.

Manish Mahawar: Thank you. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we wait for a moment while the question queue assembles. The first question comes from the line of Dheeraj Ram from 361 Capital. Please go ahead.

Operator: Thank you. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we wait for a moment while the question queue assembles. The first question comes from the line of Dheeraj Ram from 361 Capital. Please go ahead.

Speaker #1: If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question.

Speaker #1: Ladies and gentlemen, we wait for a moment while the question queue assembles. The first question comes from the line of Dheeraj Ram from 361 Capital.

Speaker #1: Please go ahead.

Dheeraj Ram: Hi, sir. Thank you for taking up the question and congratulations for a great result. A series of questions, sir. Do you expect this case in subsidiary business, which has significantly improved in Q1

Speaker #3: Hi, sir. Thank you for taking up the question and congratulations for a great result. So the series of questions are: do you expect this subsidiary business, which has significantly improved in one Q?

Speaker #2: So Dheeraj, your bias is not clear. It is very, very low.

Yash Sharma: Dheeraj, your voice is not clear. It is very low.

Gopal Agarwal: Dheeraj, your voice is not clear. It is very low.

Speaker #3: Can you hear me, sir? Can you hear me now?

Dheeraj Ram: Can you hear me, sir? Can you hear me now?

Speaker #2: Yeah, yeah, yeah. We can hear you.

Yash Sharma: Yeah. We can hear you.

Gopal Agarwal: Yeah. We can hear you.

Speaker #3: So a series of questions, sir, is: do you feel this EBITDA per kg, the improvement that you have seen in one Q, is going to sustain for FY27?

Dheeraj Ram: A series of questions, sir. Do you feel this EBITDA per kg, the improvement that you have seen in Q1 and Q2 is going to sustain for FY27? Can we expect an EBITDA per kg around INR 22 plus?

Speaker #3: Can we expect an EBITDA per kg around 20 to plus?

Speaker #2: Yeah. So Dheeraj, as we already commented through our with the expansion of brownfield capacity at Warangal, our operating leverage is going to improve substantially and so we are quite hopeful to maintain the EBITDA margins, which we have achieved going forward also.

Yash Sharma: Yeah. Dheeraj, as we already commented with the expansion of our brownfield capacity at Warangal, our operating levers are going to improve substantially. We are quite hopeful to maintain the EBITDA margins, which we have achieved going forward also.

Gopal Agarwal: Yeah. Dheeraj, as we already commented with the expansion of our brownfield capacity at Warangal, our operating levers are going to improve substantially. We are quite hopeful to maintain the EBITDA margins, which we have achieved going forward also.

Speaker #3: Okay. And since we are putting up a capacity of 1 lakh tons, which is an additional about 60,000 odd tons, so do you see any demand softening or do you expect any softer demand post-commissioning or do you feel that the capacities are already booked?

Dheeraj Ram: Okay. Since we are putting up a capacity of 100,000 tons, which is an additional odd 60,000 odd tons. Do you see any demand softening or do you expect any softer demand post-commissioning, or do you feel that the capacities are already booked? How's the customer response for this?

Speaker #3: How's the customer response to this?

Speaker #2: Yeah. So see, as of today, we don't see any demand or issues as such to be honest. We have a very good optimism in the market regarding the regarding optic of our RPET material.

Yash Sharma: Yeah. See, as of today, we don't see any demand or issues as such. To be honest, we have a very good optimism in the market regarding optical fiber cable material. Since the mandate of the government is now there, more and more adoption of ARPANET is constantly increasing. I would say there's still a very high room for the demand to grow from here. As of today we don't see any, to be honest, any challenges in the demand of the ARPANET, because even today, the demand of ARPANET is much higher than the supply.

Speaker #2: Since the mandate of the government is now there, you know, more and more adoption of RPET is constantly increasing. I would say there is still a very high room for the demand to grow from here.

Speaker #2: And as of today, you know, we don't see any to be honest, any challenges in the demand of the RPET because even today the demand of RPET is much higher than the supply.

Speaker #3: Yeah. Got it. And on the standalone side, sir, there is a slight volume degrowth, but that has been offset greatly by improved realization. And then EBITDA per kg has improved to 9 rupees.

Dheeraj Ram: Yeah. Got it. On the standalone side, sir, there is a slight volume decline, but that has been offset greatly by improved realization. EBITDA per kg has improved to INR 9. Do you see this INR 9 to INR 10 EBITDA per kg sustaining for the standalone segment for the entire year?

Speaker #3: Do you see this 9 to 10 rupees EBITDA per kg sustaining for the standalone segment for the entire year?

Speaker #2: So basically, Dheeraj, we have given the guidance about 70 to 80 crores EBITDA for the full year. So basis there, it is around 7 to 8 rupees a kg.

Prashant Khandelwal: Basically, Dheeraj, we have given the guidance of about INR 70 to INR 80 crores EBITDA for the full year. Basis there it is around INR 7 to INR 8 a kg.

Gopal Agarwal: Basically, Dheeraj, we have given the guidance of about INR 70 to INR 80 crores EBITDA for the full year. Basis there it is around INR 7 to INR 8 a kg.

Speaker #3: Got it. And so do you feel any normalization going forward? For the next quarters?

Dheeraj Ram: Got it. Do you feel any normalization going forward for the next quarters?

Speaker #2: So Dheeraj, actually the price volatility are much in case of the raw materials as well as the finished goods prices in our industry. So giving any short-term guidance is actually not feasible or practical.

Prashant Khandelwal: Dheeraj, actually, the price volatility are much in case of the raw materials as well as the finished goods prices in our industry. Giving any short-term guidance is actually not feasible or practical. Going forward, we are quite hopeful to achieve whatever the guidance we have given last quarter for the full FY27. We are quite hopeful to achieve that.

Gopal Agarwal: Dheeraj, actually, the price volatility are much in case of the raw materials as well as the finished goods prices in our industry. Giving any short-term guidance is actually not feasible or practical. Going forward, we are quite hopeful to achieve whatever the guidance we have given last quarter for the full FY27. We are quite hopeful to achieve that.

Speaker #2: But going forward, we are quite hopeful to achieve whatever the guidance we have given the last quarter for the full FY27. So we are quite hopeful to achieve that.

Speaker #3: Got it. Understood. Okay. Let's just last question, sir. If we have not put FSI approvals notification, so for the additional 22,500 tons line, so is the FSI approval done?

Dheeraj Ram: Got it. Understood. Okay. Just last question, sir. You have not put FSSAI approval notification for the additional 22,500 tons line. Is the FSSAI approval done and have you started commercial production?

Speaker #3: And are we have you started commercial production?

Speaker #2: So hi, Prashant Desai. So for this the application has already been submitted with FSSAI long back, once we have done the trial production and all documentary audits have been completed by FSI.

Prashant Khandelwal: Hi, Prashant this side. For this, the application has already been submitted with FSSAI long back once we have done the trial production, and all documentary audits have been completed by FSSAI. Now, only the physical audit is pending, which we are expecting to be completed in this month. By the end of the month, we will certainly get the approval of FSSAI. For the time being, the line is running for export market where FSSAI approval is not required. FSSAI and US FDA approvals already we have for that line. For export and non-food grade, those material are being utilized.

Speaker #2: Now only the physical audit is pending, which we are expecting to be completed in this month. So by the end of the month, we will certainly get the approval of FSSAI.

Speaker #2: And for the time being, the line is running for export market, where FSI approval is not required. FSI and USFDA approvals already we have for that line.

Speaker #2: So for export and non-food grade, those material are being utilized.

Speaker #3: Understood. And just a follow-up question on this. Do we see any similar FSI approval delays or can there be any potential delay for the upcoming lines?

Dheeraj Ram: Understood. Just a follow-up question on this. Do we see any similar FSSAI approval delays, or can there be any potential delay for the upcoming lines?

Speaker #2: No, no. So it is a procedural way to complete this. And during last month, there was a substantial change in FSSAI official including CEO, so that has delayed a little bit of the files moving but now I don't think that there is any issue in approval of this.

Prashant Khandelwal: No, it is a procedural way to complete this. During last month, there was a substantial change in FSSAI official, including CEO. That has delayed a little bit of the files moving. Now I don't think that there is any issue in approval of this. A procedural work of one to one and a half months would be there for every line.

Speaker #2: A procedural work of one and a half one to one and a half month would be there for every line.

Speaker #3: Okay. Got it. Thank you, sir. Thank you. And all the best for your future.

Dheeraj Ram: Okay. Got it. Thank you, sir. Thank you, all the best for your future.

Speaker #2: Thank you. Thank you.

Prashant Khandelwal: Thank you.

Speaker #1: Thank you. We have the next question from the line of Disha from Sapphire Capital. Please go ahead.

Operator: Thank you. We have the next question from the line of Disha from Sapphire Capital. Please go ahead.

Speaker #4: Hello. Am I audible, sir?

[Analyst] (Sapphire Capital): Hello. Am I audible, sir?

Speaker #2: Yes, you are audible.

Prashant Khandelwal: Yes, you are audible.

Speaker #4: Yes, yes. Thank you so much, sir, for this opportunity. Couple of questions. So I think in the previous call we've given a guidance of around 20% plus calor.

[Analyst] (Sapphire Capital): Yes. Thank you so much for this opportunity. Couple of questions. Sir, I think the previous call you had given a guidance of around 20% plus CAGR. You could just break this down into how much of volume growth will we be expecting this year versus the realization growth?

Speaker #4: If you could just break this down into how much of volume growth will we be expecting this year versus the realization growth?

Speaker #2: So I couldn't get can you please come again?

Prashant Khandelwal: Can you please come again?

Speaker #4: Yeah. So this 20%, I think 20% plus growth that we're guided for, for the revenue, how much of this are we expecting for volume and how much of this will be driven by realization for this entire year?

[Analyst] (Sapphire Capital): This 20%, I think 20% plus growth that we guided for in terms of the revenue, how much of this are we expecting for volume, and how much of this will be driven by realization for this entire year?

Speaker #2: So we are expecting it in volume terms.

Prashant Khandelwal: We are expecting it in volume terms.

Speaker #4: Okay. So this 20% growth is entirely volume.

[Analyst] (Sapphire Capital): Okay. This 20% growth is entirely volume.

Speaker #2: Yes, yes.

Prashant Khandelwal: Yes.

Speaker #4: Okay.

[Analyst] (Sapphire Capital): Okay.

Speaker #2: Because in our business, the sales sizes are actually quite volatile. So we measure when we gauge the growth in terms of the volume.

Prashant Khandelwal: Because our business, the sales prices are actually quite volatile. We measure when we gauge the growth in terms of the volumes.

Speaker #4: Okay. Okay. And how should we look at the price growth, sir, for this year? Any if you could provide any sort of broad range.

[Analyst] (Sapphire Capital): Okay. How should we look at the price growth, sir, for this year? You could provide any sort of broad range?

Yash Sharma: See, I think it's very difficult to comment on that because you see our prices are determined by the petrochemical prices, the polymer prices, the feedstock prices. There is a volatility of about 20-odd% from in the last 3 to 6 months timeframe itself. It's really difficult to predict anything on that. It doesn't make any sense.

Speaker #2: See, I think it's very difficult to comment on that because, you see, our prices are determined by the petrochemical prices, the polymer prices, the, you know, each stock prices.

Speaker #2: There is a volatility of about 20%, 20 odd percent from, you know, in the last three to six months time frame itself. So it's, you know, very difficult to, you know, predict anything on that.

Speaker #2: It doesn't make any sense.

Speaker #4: Okay. Okay. But in terms of demand, we're not seeing any problem.

[Analyst] (Sapphire Capital): Okay. In terms of demand, you're not seeing any problem?

Speaker #2: No, no. Demand so obviously, you know, in first quarter we faced a little bit of demand challenges from the textile industry. But now I think that has again come back to, you know, good trajectory.

Yash Sharma: No. Obviously, in Q1, we faced a little bit of demand challenges from the textile industry. Now I think that has again come back to good trajectory and textile industry since the pipeline was really low and empty. Now again, the textile industry is doing quite decently well. Again, the demand is back on track.

Speaker #2: And textile industry since the pipeline was really, really low and empty, now they're again textile industry is going quite decently well. So again, the demand is back on track.

Speaker #4: And the next thing, sir, is also the sourcing. What sort of are you seeing any challenges currently? What will be the current scrap prices, if you could just give me that number?

[Analyst] (Sapphire Capital): The next thing, sir, is on the sourcing. Are you seeing any challenges currently? What will be those current scrap prices, if you could just give me that number?

Speaker #2: So the current scrap prices are in the range of 48 to 50 rupees.

Prashant Khandelwal: The current scrap price is in the range of INR 48 to INR 50.

Gopal Agarwal: The current scrap price is in the range of INR 48 to INR 50.

Speaker #4: Sorry, 48 to 50 rupees, right?

[Analyst] (Sapphire Capital): Sorry, INR 48 to 50, right?

Speaker #2: Yes, yeah.

Prashant Khandelwal: Yeah.

Gopal Agarwal: Yeah.

Speaker #4: And we don't see any challenges in sourcing now?

[Analyst] (Sapphire Capital): We don't see any challenges in sourcing now?

Speaker #2: So basically, we are looking forward delta. So the prices are going up and going down in case of RM as well as finished goods.

Gopal Agarwal: Basically, we are looking for our delta because of the prices going up and going down in case of RMS. We are looking for our delta. That's quite decent.

Speaker #2: But we are looking forward our delta. So that's quite decent.

Speaker #4: Okay. Okay. And sir, what will be the what is the total capex that you plan for this year and what is the capex that you're targeting for the next year?

[Analyst] (Sapphire Capital): Okay. Sir, what is the total CapEx that you planned for this year, what is the CapEx that you're targeting for the next year?

Gopal Agarwal: This year we are going to install another line of 1,500. That is around INR 150 crore CapEx roughly we have planned for that.

Speaker #2: So this year we are going to install another line of 22,500. So that is around 150 crore capex outlays there, planned for that.

Gopal Agarwal: This year we are going to install another line of 1,500. That is around INR 150 crore CapEx roughly we have planned for that.

Speaker #4: And for the next year?

[Analyst] (Sapphire Capital): For the next year?

Speaker #2: Yeah, out of which most of the capex has been done. And part of the capex will be done over the next two to three months.

Gopal Agarwal: Out of which most of the CapEx has been done, and part of the CapEx will be done over the next two, three months.

Speaker #4: Okay. It's done, sir? Hello?

[Analyst] (Sapphire Capital): It is done, sir? Hello?

Speaker #2: Yeah. So most of the capex has been done till now for that line. And some of the capex, the remaining capex will be done in next two to three months.

Gopal Agarwal: Yeah. Most of the CapEx has been done till now for that line. Some of the remaining CapEx will be done in the next two, three months, when the line will come to our place.

Speaker #2: When the line will come to our side.

Speaker #4: Yeah. I was just asking if you could give me the number as to how much we've already spent.

[Analyst] (Sapphire Capital): Yeah, I was just asking if you could give me the number as to how much you've already spent.

Speaker #2: So almost 60% we have already done.

Gopal Agarwal: Almost 60% we have already done.

Speaker #4: Okay. Okay. And for the next year, sir?

[Analyst] (Sapphire Capital): Okay. For the next year, sir?

Speaker #2: Next year we are finalizing the next year expansion plans and we will come back on that.

Gopal Agarwal: Next year, we are finalizing the next year CapEx expense and plans. We will come back on that.

Speaker #4: Okay. Okay. Okay. That is it, sir, from our side. Thank you.

[Analyst] (Sapphire Capital): Okay. That is it, sir, from our side. Thank you.

Speaker #2: Thank you.

Gopal Agarwal: Thank you.

Speaker #1: Thank you. The next question comes from the line of Navneet Saluja D'Souza from Complete Circle Wealth PMS. Please go ahead.

Operator: Thank you. The next question comes from the line of Navneet Saluja D'Souza from Complete Circle Wealth PMS. Please go ahead.

Speaker #4: Thank you for the opportunity. Congratulations to you all for a good operating performance during this quarter. I just wanted to know, are we looking to revisit the guidance that we had given for FY27 in terms of EBITDA of 225 to 250 crore and also if you could give us a mix of it, how much of this would come from legacy and how much would come from subsidiary?

Navneet Saluja D'souza: Thank you for the opportunity. Congratulations to you all for a good operating performance during this quarter. I just wanted to know, are we looking to revisit the guidance that we had given for FY27 in terms of EBITDA of INR 225 to 250 crores? If you could give us a mix of it, how much of this would come from legacy and how much would come from subsidiary?

Gopal Agarwal: Our guidance is intact. We have guided for the INR 225 to 250 crore EBITDA for FY27. That is intact, and out of which, INR 70 to 80 crore will come from our legacy business and the remaining will come from our subsidiary business.

Speaker #2: So our guidance is intact. We have guided for the 225 to 250 crore EBITDA for FY27. So that is intact. And out of which 70, 80 crore will come from our legacy business.

Speaker #2: And the remaining will come from our subsidiary business.

Speaker #4: Okay. So the larger chunk will and will this trend continue in the coming years as well?

Navneet Saluja D'souza: Okay. The larger chunk. Will this trend continue in the coming years as well?

Speaker #2: Yeah. So going forward, the mix would be tilted in favor of the our subsidiary business. So because we are increasing the capacity of our subsidiaries, so the EBITDA margins will be improving in.

Gopal Agarwal: Yeah. Going forward, the mix would be tilted in favor of our subsidiary business. Because we are increasing the capacity of our subsidiaries, the EBITDA margins will be improving.

Navneet Saluja D'souza: Sure.

Gopal Agarwal: Yeah.

Navneet Saluja D'souza: One last question. I think in the previous answers, you all had mentioned that textile demand is getting back on track. On back of that, will Q2 see better volume numbers coming from the legacy business?

Speaker #4: One last question. I think in the previous answer, you all had mentioned that textile demand is getting back on track. On back of that, will Q2 see better volume numbers coming from the legacy business?

Speaker #2: Yes, certainly we are expecting that the better volume in the current quarter.

Gopal Agarwal: Certainly, we are expecting the better volume in the current quarter.

Speaker #4: But are you seeing the trends of that already?

Navneet Saluja D'souza: Are you seeing the trends of that already?

Speaker #2: Yeah. If I start already, yeah.

Gopal Agarwal: Yeah. It has started already. Yeah.

Speaker #4: Okay. Great. Thank you so much.

Navneet Saluja D'souza: Okay, great. Thank you so much.

Speaker #1: Thank you. We have the next question from the line of Dolly Chaudhury from Niveshi. Please go ahead.

Operator: Thank you. We have the next question from the line of Dolly Choudhary from Niveshaay. Please go ahead.

Speaker #4: Hi, sir. Thank you for the opportunity and congratulations on a good set of numbers also. So I had a few questions. First of all, I was trying to understand one thing that I was just seeing that we generally keep two, three months of inventory and please correct me if I'm wrong.

Dolly Choudhary: Hi, sir. Thank you for the opportunity and congratulations on a good set of numbers also. I had a few questions. First of all, I was trying to understand one thing that I was just seeing that we generally keep 2, 3 months of inventory. Please correct me if I am wrong. Did we saw any kind of inventory gain also this quarter? Because the prices went up from January to maybe May, June for this quarter. For Warangal numbers specifically, did we saw any inventory gain?

Speaker #4: So did we saw any kind of inventory gain also this quarter? Because like the prices went up from January to maybe May to May, June for this quarter.

Speaker #4: So for Warangal numbers specifically, did we saw any inventory gain?

Speaker #2: Yes. Yes, Dolly. So basically, there is a very high price volatility during last few months. So certainly we caught some inventory gain also. In these numbers.

Gopal Agarwal: Yes, Dolly. Basically, there is a very high price volatility during last few months. Certainly, we got some inventory gain also in these numbers. The prices are very volatile, and working out any exact number is not possible.

Speaker #2: But the prices are very volatile. And so working out any exact number is not possible.

Speaker #4: So like to mitigate this, are we like are we still maintaining two, three months of inventory or are we still following the same procedure?

Dolly Choudhary: To mitigate this, are we still maintaining 2, 3 months of inventory, or are we still following the same procedure? We may get benefit of this.

Speaker #4: I mean, we may get benefit of this quarter.

Gopal Agarwal: When we are talking about the 2, 3 months inventory, basically it is the finished goods as well as the raw materials both. Both are there. Yes, it is a need of our business, so we have to maintain about 2 and a half months inventory anytime.

Speaker #2: So when we are talking about the two, three months in yeah. So when we are talking about the inventory two, three months, so basically it is a finished goods as well as the rounded both.

Speaker #2: Both are there. So yeah. So it is a need of our business. So we have to maintain the about two, two and a half months inventory.

Speaker #2: Anytime.

Dolly Choudhary: Okay. Any update on approved FSSAI capacities? As you mentioned in your presentation also, 15 lakh demand is there and 40% to 50% recycling demand is coming due to the mandate. Two things I wanted to understand on the first of all, customer side, how much penetration did we saw? I don't think it must have reached 40% yet. Any number on if you can quantify in terms of industry, like maybe 2.5 lakh, 3 lakh demand is coming and what are the approved capacities? If you can highlight that number.

Speaker #4: And sir, any update on approved FSSI capacities as you like mentioned in your presentation also? 15 lakh demand is there and 40 to 50 percent recycling demand is coming due to the mandate.

Speaker #4: So two things I wanted to understand on the first of all, customer side, how much penetration did we saw? Like I don't think it must have reached like 40 percent yet.

Speaker #4: So any number on like if we can quantify like in terms of industry like maybe 2.5 lakh, 3 lakh demand is coming and what are the approved capacities?

Speaker #4: If we can highlight that number.

Speaker #2: Yeah. So see, according to our basic data collection, it's obviously it's not verified or exact data. But the tentative numbers that we have from the market intelligence is that currently we are running at about 20 to 25 percent adoption currently.

Yash Sharma: Yeah. According to our basic data collection, obviously it's not verified or exact data, but the tentative numbers that we have from the market intelligence is that currently we are running at about 20% to 25% adoption currently. That is because obviously the global brands, the global buyers, they are trying to follow the compliances, whereas till the regional players, they are still catching up. Start using more and more rPET. They've just started very slow. I think today the average we are at about as a country is between 20% and 25%. Still, what is happening is that demand and supply today are almost, I would say, kind of at par because the supply today is at about the capacities at about 4.2 lakh tonnes.

Speaker #2: And that is because obviously the global brands, the global buyers, they are trying to follow the compliances. Whereas still the regional players, they are still catching up of start using more and more Arpit.

Speaker #2: They've just started very slow. So I think today the average we are at about as a country is between 20 to 25 percent. So but still, what is happening is that the supplies demand and supply today are almost, I would say, kind of at par because the supply is today is at about the capacity is at about 4.2 lakh tons.

Speaker #2: But obviously, because what happens is that people are not able to run everyone is not able to run the plant so efficiently that we are able to.

Yash Sharma: Obviously, because what happens is that everyone is not able to run the plant so efficiently that we are able to, the actual output doesn't end to be the same number. Right? Because of that, today the demand is like almost kind of matched up.

Speaker #2: And so the actual output doesn't end to be the same number, right? So because of that, today the demand and supply almost kind of matched up.

Dolly Choudhary: Got it, sir. If I'll just kind of try to get an overview like past 1 year, 2 year, like Ganesha as a company, as a moat of that side also that there was a demand-supply gap huge. Current CapEx we did for this year, but for next year in our evaluation stage of CapEx for maybe financial at 2028, 2029, are we still going to expand in rPET only or are we seeing new categories of recycling or other sectors as CapEx also as a company?

Speaker #4: Got it. Got it, sir. So like if I'll just kind of try to get an overview like past one year, two year as a like Ganesha as a company has a mode of that side also that there was a demand supply gap huge.

Speaker #4: So like current capex we did for this year, but for like next year, in our evaluation stage of capex for maybe financial year 28, 29, are we still going to expand in Arpit only or are we seeing new categories of recycling or other sectors as capex also as a company?

Speaker #2: No. For the time being, we are focusing on Arpit business. And but certainly we are looking for other recycling avenues after four years.

Yash Sharma: No. For the time being, we are focusing on rPET business. Certainly, we are looking for other recycling revenues after our go-through for the whole year's timeline.

Gopal Agarwal: No. For the time being, we are focusing on rPET business. Certainly, we are looking for other recycling revenues after our go-through for the whole year's timeline.

Speaker #4: Okay. Okay. Got it, sir. Thank you. That will be all and all the best.

Dolly Choudhary: Okay. Got it, sir. Thank you. That will be all and all the best.

Speaker #1: Thank you. We have the next question from the line of Bharat Gulati, from Dalal and Brocha. Please go ahead.

Operator: Thank you. We have the next question from the line of Bharat Gulati from Dalal & Broacha. Please go ahead.

Speaker #3: Yeah. Hi. Thank you for the opportunity. I just had a question regarding the sequential degrowth we've seen in our subsidiaries volumes what is that is that purely to do with seasonality or is there some other element behind that?

Bharat Gulati: Yeah. Hi. Thank you for the opportunity. I just had a question regarding the sequential degrowth we've seen in our subsidiaries volumes. Is that purely to do with seasonality or is there some other element behind that?

Speaker #2: No. So there is a very slight decline in volume of subsidiary business. The decline in volume is basically in our legacy business.

Yash Sharma: No. There's a very slight decline in volume of subsidiary business. The decline in volume is basically in our legacy business.

Gopal Agarwal: No. There's a very slight decline in volume of subsidiary business. The decline in volume is basically in our legacy business.

Bharat Gulati: I see there's a 7% decline QOQ on the subsidiary business and the standalone has degrown 13%. Understandable that the degrowth is not significant, but just trying to understand the reason behind it. Is it purely to do with seasonality and what should we expect the run rate going forward on a sequential basis? Do we expect similar sort of volume growth, flattish, or should we see?

Speaker #3: I see there's a 7 percent decline QOQ on the subsidiary business and the standalone has grown degrown 13 percent. So understandable that the degrowth is not significant.

Speaker #3: But just trying to understand the reason behind it. Is it purely to do with seasonality and should we what should we expect the run rate going forward on a sequential basis?

Speaker #3: Do we expect similar sort of volume growth, flattish, or should we see sequentially?

Speaker #2: So that is because of our fiber business and that is because of our fiber business. We are such that prices has gone up really, really high, very, very high.

Yash Sharma: That is because of our fiber business and that is because of in fiber business, we have seen prices has gone up very high. The downstream buyers choose to defer the purchases and that is a one-off I think. It is not persisting. In the current quarter, the sale has revived.

Gopal Agarwal: That is because of our fiber business and that is because of in fiber business, we have seen prices has gone up very high. The downstream buyers choose to defer the purchases and that is a one-off I think. It is not persisting. In the current quarter, the sale has revived.

Speaker #2: So some so the downstream buyers choose to defer the purchases. And so that is the one-off, I think. It is not a persisting. So in the current quarter, the sale has the sale has been revived.

Speaker #3: Got it. Got it. And just can you give a sense of what sort of realization should we go for continue to see within our subsidiary business going forward?

Bharat Gulati: Got it. Just can you give a sense of what sort of realization should we hope or continue to see within our subsidiary business going forward? Should these be similar sort of realizations that we should continue to bake in or do you see them sort of settling down as the supply-demand situation has sort of neutralized now?

Speaker #3: Should these be similar sort of realizations that we should continue to bake in or do you see them sort of settling down as the supply demand situation has sort of neutralized now?

Speaker #2: So see, in this, you should actually not really look at the realization number because again, reiterating what I've said before, the industry is in a very volatile situation right now.

Yash Sharma: See in this, you should actually not really look at the realization number because again, reiterating what I've said before, the industry is in a very volatile situation right now because of the oil prices moving so radically up and down, the polymer prices are also moving radically up and down, which includes our rPET prices, our fiber prices. There's a huge volatility that is happening on a month-on-month or week-on-week basis. I would rather like to reiterate that what we are aiming for is to maintain healthy EBITDA numbers in our both legacy as well as subsidiary businesses. In the subsidiary businesses, we are looking at a much better improved combined EBITDA margin range as we have guided before. We'll be able to meet that or maybe slightly better. That's what we are aiming for rather than for the exact realization number.

Speaker #2: Because of the oil price is moving so radically up and down, the polymer prices are also moving radically up and down, which includes our Arpit prices, our fiber prices.

Speaker #2: There's a huge volatility that is happening on a month-on-month or week-on-week basis. So we would rather I would rather like to re-trade that what we are aiming for is to maintain healthy EBITDA numbers in our both legacy as well as subsidiary businesses.

Speaker #2: In the subsidiary businesses, we are looking at a much better improved combined EBITDA margin range as we have guided before. So we'll be able to meet that or maybe slightly better.

Speaker #2: But that's what we are aiming for rather than for the exact realization number. It can go up, it can go down.

Yash Sharma: It can go up, it can go down.

Speaker #3: So you believe that this sort of EBITDA per kg of 24 rupees on the sub business is something we should continue to maintain going forward?

Bharat Gulati: You believe that this sort of EBITDA per kg of INR 24 on the sub-business is something we should continue to maintain going forward?

Speaker #2: So see, not exactly. We have guided that combined EBITDA level, we are aiming for EBITDA between 16 to 20 at a combined level in the subsidiary business.

Yash Sharma: See, not exactly. We have guided that at combined EBITDA level, we are aiming for EBITDA between 16 to 20 at a combined level in the subsidiary business. That's what we are aiming for in the long term.

Speaker #2: That's what we are aiming for in the long term.

Speaker #3: Got it. Got it. And just can you help understand what sort of utilization levels are we targeting to hit in the Warangal facility by the end of this year?

Bharat Gulati: Got it. Just can you help understand what sort of utilization levels are we targeting to hit in the Warangal facility by the end of this year? Since we are currently at 72%, where do we see that. Obviously, I understand that new capacities would come in. I'm trying to understand on the 64,500 MTPA capacity, where do we see that layout?

Speaker #3: It's currently at 72 percent. So where do we see that? On the obviously, I understand that new capacities would come in. I'm trying to understand on the 64,500 MTPA capacity, where do we see that layout?

Yash Sharma: On overall basis, we are looking at about 85% capacity present by the end of this year.

Speaker #2: So overall, this is on overall basis, we are looking at about 85 percent capacity utilization by the end of this year.

Speaker #3: So this would be at a 1 lakh ton capacity we are looking at about 85 percent?

Bharat Gulati: This would be at a 100,000 ton capacity, we are looking at about 85%?

Speaker #2: No, no, no. So basically, currently, we are having a 64,500 ton capacity. And the one next capacity will come in December, January only. So we are talking about the current capacity.

Yash Sharma: No. Basically, currently we are having a 64,500 in capacity and our next capacity will come in December, January only. We are talking about the current capacity.

Speaker #3: Got it. So about 55,000 tons is where we are hoping to be at in terms of production level. So that we try to say?

Bharat Gulati: Got it. About 55,000 tons is where we are hoping to be at in terms of production level. That's safe to say?

Yash Sharma: Correct.

Bharat Gulati: Got it. That's it from my side. Thanks a lot.

Speaker #3: Got it. Got it. That's it from my side. Thanks a lot.

Speaker #1: Thank you. We have the next question from the line of Avnish Berman from Vaikarya Investment. Please go ahead.

Operator: Thank you. We have the next question from the line of Avnish Burman from Vaikarya Investment. Please go ahead.

Speaker #5: Yeah. Hi. Good afternoon. Thanks for taking my question. Yes, just a couple of questions. One is a follow-up on the previous participant. You mentioned that the current capacity is 4.2 lakh metric ton.

Avnish Burman: Yeah. Hi, good afternoon. Thanks for taking my question. Yash, just a couple of questions. One is a follow-up on the previous participant. You mentioned that the current capacity is 4.2 lakh metric ton. I'm assuming that the nameplate capacity, is that right?

Speaker #5: I'm assuming this is the name plate capacity, is that right?

Speaker #3: Right. Right, Avnish.

Yash Sharma: Right, Avnish.

Speaker #5: Okay. And by FY 27 end, let's say, what is your estimate of how much this name plate capacity can grow up to?

Avnish Burman: Okay. By FY27 end, let's say, what is your estimate of how much this nameplate capacity can grow up to?

Speaker #3: By FY 27 end, we are looking.

Yash Sharma: By FY27 end, we are looking.

Speaker #5: 27. Yeah. By end of this year, it could ramp up to 250,000 tons.

Avnish Burman: By end of this year it would ramp up to 250,000 tons.

Gopal Agarwal: By end of this year it would ramp up to 250,000 tons.

Speaker #3: So total name plate capacity, Avnish, of Arpit between around 5 and a half, 5.2 to 5.5 lakh tons.

Yash Sharma: Total nameplate capacity, Avnish, of rPET between around 5.2 to 5.5 lakh tons.

Speaker #5: 5.5 lakh metric tons. Okay. And when you say that in today's scenario, if the supply and the capacity are matched, this is at a 20 to 25 percent adoption, right?

Avnish Burman: 5.5 lakh metric tons. Okay. When you say that in today's scenario, the supply and the capacity are matched, this is at a 20% to 25% adoption, right?

Speaker #3: Yeah. Against the government mandate of 40 percent. Yeah.

Yash Sharma: Against the government mandate of 40%.

Speaker #5: That's right. So by, again, FY 27, I'm just trying to get an idea about what is the will there be a supply demand mismatch or this will, again, be kind of matched by FY 27?

Avnish Burman: That's right. By, again, FY27, I am just trying to get an idea about will there be a supply-demand mismatch or this will again be kind of matched by FY27 end. In your

Speaker #5: So in your.

Yash Sharma: Avnish, I think now the industry has started maturing quite a bit, and the supply and demand is going to grow quite well hand in hand. At the end of the year, we will see how is the industry really looking to increase the usage of rPET. We are increasingly hearing that from our current customers as well as new customers regarding the expanding demand on a daily basis. I think that now the rPET capacity is coming in and the demand expansion will go hand in hand quite a bit.

Speaker #3: I think now. So yeah, I'll go on. So I think now the industry has started maturing quite a bit. And the supply and demand is going to grow quite well hand in hand.

Speaker #3: At the end of the year, we will see how is the industry really looking to increase the usage of Arpit. So and we are increasingly hearing that from our current customers as well as new customers regarding the expanding demand on a daily basis.

Speaker #3: So I think that now the Arpit capacity is coming in and the demand expansion will go hand in hand quite some quite a bit.

Speaker #3: Yeah.

Speaker #5: Understood. That is clear. One more question about the new line. When you get the SSAI approval, because it's a new line, I'm assuming that the stability batches would be needed, right?

Avnish Burman: Understood. That is clear. One more question about the new line when you get the FSSAI approval. Because it is a new line, I am assuming that the stability batches would be needed, right?

Yash Sharma: The line is already running for export market, so I don't think there would be any issue. The material is well established on the line and as soon as we get the approvals, it is ready for the Indian market as well.

Speaker #2: So the line is already running for export market. So I don't think there would be any issue. It is the material is well established on the line.

Speaker #2: And as soon as we get the approvals, it is ready for the Indian market as well.

Speaker #5: Okay. Okay. So as soon as you get the approval, you can start commercializing for the domestic market. This is what I assume.

Avnish Burman: Okay. As soon as you get the approval, you can start commercializing for the domestic market.

Yash Sharma: Yes.

Avnish Burman: This is what I assume.

Yash Sharma: Yeah.

Speaker #2: Yeah. And I've already been commercialized for export market.

Avnish Burman: It has already been commercialized for export market.

Yash Sharma: It has already been commercialized for export market.

Speaker #3: So the stability is also happened parallelly, Avnish, like along with the SSAI approvals coming in, the stability test also happened already parallelly. And they're already in fact, they're all already complete.

Yash Sharma: The stability also happened parallelly, Avnish. Along with the FSSAI approvals coming in, the stability tests also happened already parallelly and in fact, they're all already complete. We are just awaiting.

Gopal Agarwal: The stability also happened parallelly, Avnish. Along with the FSSAI approvals coming in, the stability tests also happened already parallelly and in fact, they're all already complete. We are just awaiting.

Speaker #3: So we are just awaiting.

Speaker #5: Understood. And you have no idea about the timelines of SSAI approval or did you mention it in the call? I might have missed it.

Avnish Burman: Understood. You have no idea about the timelines of FSSAI approval or did you mention it in the call? I might have missed it.

Speaker #2: So it must be done in this month only because initial stage of documentary audit has been done as per SSAI. So I think the final physical audit has to happen for this line, which should be planned in this one month.

Yash Sharma: It must be done in this month only because initial stage of documentary audit has been done as per FSSAI. I think the final physical audit has to happen for this line which should be planned in this one month and post that, we should get the final approval. We are expecting this month only.

Speaker #2: And after post that, we should get the final approval. So we are expecting this month only.

Speaker #5: Understood. And last question, Gopal ji, this subsidiary sales volume of 14,800, can you just break it down into B2B and filament yarn? I'm just trying to see whether a major ramp-up in filament yarn volumes has taken place or not.

Avnish Burman: Understood. Last question, Gopalji, this subsidiary sales volume of 14,800, can you just break it down into rPET and filament yarn? I'm just trying to see whether a major ramp-up in filament yarn volumes has taken place or not.

Speaker #2: So Avnish, basically, we don't give the breakup of the volume because of the word strategic reasons.

Yash Sharma: Avnish, basically we don't give the breakup of the volume because of our strategic reasons.

Speaker #5: Okay. Okay. That's fine. So fair to assume that there's improvement in EBITDA per kg to 24 rupees is not really driven by filament yarn ramp-up, but more driven by inventory gain.

Avnish Burman: Okay. That's fine. Fair to assume that this improvement in EBITDA of INR 24 is, let's say, not really driven by filament yarn ramp-up, but more driven by inventory gains?

Yash Sharma: It is because of both.

Speaker #2: It is because of both.

Speaker #5: Okay. Okay. Understood. Thanks. I'll get back into it.

Avnish Burman: Okay. Understood. Thanks. I'll get back if required.

Speaker #2: Thank you.

Yash Sharma: Thank you.

Speaker #1: Thank you. The next question comes from the line of Harsh Vedani from India Capital. Please go ahead.

Operator: Thank you. The next question comes from the line of Harsh Vardhani from India Capital. Please go ahead.

Speaker #3: Hi sir. Congratulations on good set of results. Sir, just wanted to get your perspective on long-term goals for Arpit. What are the long-term aspirations in terms of Arpit and how much what is your three-year outlook on Arpit and what is the possible market share that we can corner?

Harsh Vardhani: Hi, sir. Congratulations on good set of results. Sir, just wanted to get your perspective on long-term goal for rPET. What are the long-term aspirations in terms of rPET, what is your 3-year outlook on rPET, and what is the possible market share that we can corner?

Speaker #2: So see, in long-term planning perspective, we what we are foreseeing is that the industry of the Arpit capacity, the industry of Arpit is going to grow to about 10 lakh tons by 2030.

Yash Sharma: See, in long-term planning perspective, what we are foreseeing is that the industry of the rPET capacity, the industry of rPET is going to grow to about 10 lakh tons by 2030. We are targeting to capture around 25% market share of that market.

Speaker #2: And we are targeting to capture around 25 percent market share of that capacity, of that market.

Speaker #3: Understood. And how has been the offtake for the other subsidiary businesses that is Arpit filament yarn and RTSF?

Harsh Vardhani: Understood, sir. Sir, how has been the off-take for the other subsidiary businesses, that is rPET filament yarn and RPSF?

Speaker #2: So see, RTSF businesses, we are already quite mature in that. We already have a capacity very high capacity in the over 1,000 millitons in RTSF.

Yash Sharma: See, RPSF business, we are already quite mature in that. We already have a very high capacity-

Harsh Vardhani: Understood

Yash Sharma: of over 100,000 metric tons in RPSF. Currently we are not planning to grow that capacity as such. I think it's quite good today in the mature market. That would probably grow at about a standard 3%, 4% to 5% growth according to the industry demand. Dynamics of what we are doing in the other is we are investing and we are building a more wider basket and value-added functional fibers portfolio increasingly in our product basket to improve the value addition and the realization and the net margins of the product we are selling today out there in the market today. That's what we are working on in the RPSF as well as the filament segment.

Speaker #2: So currently, we are not planning to grow that capacity as such. I think it's quite good today in the mature market. That would probably grow at about a very standard 3, 4, 4 to 5 percent growth according to the industry demand.

Speaker #2: Dynamics, what we are doing is rather is we are investing and we are building a more wider basket. And value-added functional fibers portfolio increasingly in our product basket to improve the value addition and the realization and the net margins of the product that we are selling today out there in the market today.

Speaker #2: So that's what we are working on in the RPSF as well as the filament segment.

Speaker #3: Understood, sir. Thank you. Thank you very much, sir. All the best.

Harsh Vardhani: Understood, sir. Thank you. Thank you very much, sir. All the best.

Speaker #5: Thank you, Harsh.

Yash Sharma: Thank you, Harsh.

Speaker #1: Thank you. The next question comes from the line of Nikhil Gupta from Vayu Capital. Please go ahead.

Operator: Thank you. The next question comes from the line of Nikhil Gupta from Vayu Capital. Please go ahead.

Speaker #3: Thank you for the opportunity. I hope I'm loud and clear. My first question is on I think in the last call, there was a guidance of around 2,500 crores peak revenue from the Warangar facility.

Nikhil Gupta: Thank you for the opportunity. I hope I'm loud and clear.

Yash Sharma: Yeah.

Nikhil Gupta: My first question is on, I think in the last call, there was a guidance of around INR 2,500 crores peak revenue from the Warangal facility.

Yash Sharma: Basically, for this year, this guidance was for the next FY28 for the consolidated numbers, INR 2,300 to 2,500 crore.

Speaker #2: So basically, we for this year, we this guidance was for the next FY 28 for the consolidated numbers. 2,300 to 2,500 crore.

Gopal Agarwal: Basically, for this year, this guidance was for the next FY28 for the consolidated numbers, INR 2,300 to 2,500 crore.

Speaker #3: Sorry, I missed your line, but still, my question was, are we targeting fiscal year we are targeting this particular peak revenue, and what is current share in this quarter?

Nikhil Gupta: Sorry, I missed your line. Still, my question was, which fiscal year we are targeting this particular peak revenue, and what is current sales in this quarter?

Speaker #2: So for this part of current financial year, we have given the guidance of about 1,700, 1,800 crore consolidated turnover. So we are already on the track.

Yash Sharma: For the current financial year, we have given the guidance of about INR 1,700 to 1,800 crore consolidated turnover. We are already on the track.

Gopal Agarwal: For the current financial year, we have given the guidance of about INR 1,700 to 1,800 crore consolidated turnover. We are already on the track.

Speaker #3: Okay. My next question is on that you I think in the previous participant's question, you answered that we are looking to recycle other material as well in future.

Nikhil Gupta: Okay. My next question is on, that you, I think in the previous participant's question you answered that we are looking to recycle other materials as well in future. Can you please throw some light what we are considering and what's the basic discussion happening on that front?

Speaker #3: Can you please throw some light what we are considering and what's the basic discussion happening on that front?

Yash Sharma: See, we are working on a couple of materials. For example, we are working on polyolefin recycling already. We are trying to establish some niche products and markets for that. Yeah, that's the current project that we are already working on. Going forward, we are looking at various other materials as well.

Speaker #2: So see, we are working on a couple of materials. For example, we are working on polyolefin recycling already. We are trying to establish some niche products and markets for that.

Speaker #2: So yeah, that's the current project that we are already working on. Going forward, we are looking at various other materials as well.

Nikhil Gupta: Right. My last question is, this may be a naive thing, let's consider this a hypothetical scenario. Let's say in future we have a different technology of material with, let's say, polyester or plastic. Some percentage like we are seeing in petrol. How our current lines are ensured, how our current technologies ensure that we will be still able to recycle the same. A minor change in the raw material.

Speaker #3: Right. My last question is maybe this may be a nice thing, but just let's say let's consider this a hypothetical scenario. Let's say we in future, we have a mixture we have a different technology of material with, let's say, and polyester or plastic be a percentage of percentage of some percentage like we are seeing in petrol.

Speaker #3: So how are current lines are insured? How are current technology is ensured that we will be still able to recycle the same minor change in the raw material?

Speaker #2: Yeah. How you are expecting the raw material to be changed? Because you see, the polymer chain is different. It is not that you can change it easily.

Yash Sharma: How you are expecting the raw material to be changed, you see the polymer chain is different. It is not that you can change it easily. I am not getting your correct question.

Speaker #2: So I am not getting your correct question.

Speaker #3: Yeah. I know.

Nikhil Gupta: Yeah. I know.

Speaker #2: See, polymer are polymers are very different in their nature. You cannot do that. You can mix the HGP with the PET and make a bottle out of it.

Yash Sharma: Polymers are very different in their nature. You cannot do that. You can mix a HDPE with a PET and make a bottle out of it. It's not possible. It's not technologically possible itself. The polymer, whenever the polymers are used, they are used as a prime material in itself to make whatever packaging you have to make from that. Our lines are designed for recycling PET as a material. Obviously, there are modified forms of PET, like PBT, like PTT. They can be recycled very easily because they follow in the same family. I mean, yes, I don't know how to exactly answer your question.

Speaker #2: It's not possible. It's not technologically possible itself. So the polymer whenever the polymers are used, they are used in as a material in itself to make the whatever packaging you have to make from that.

Speaker #2: So and our lines are designed for recycling PET as a material. Obviously, there are modified forms of PET like PBT, like PTT. They can be recycled very easily.

Speaker #2: Because they follow in the same family. I mean, yes, that's I don't know how to exactly answer your question.

Speaker #3: Yeah. That's fine. I got your perspective. Thank you so much.

Nikhil Gupta: That's fine. I got your perspective. Thank you so much.

Speaker #1: Thank you. The next question comes from the line of Dhirendra Kumar Patro from Spark EMS. Please go ahead.

Operator: Thank you. The next question comes from the line of Dhirendra Kumar Patro from Spark EMS. Please go ahead.

Speaker #3: Please go ahead. Hi, sir. First of all, congratulations for a good set of.

Dhirendra Kumar: Hi, sir. First of all, congratulations for a good set of

Dhirendra Kumar Patro: Hi, sir. First of all, congratulations for a good set of

Operator: Sorry to interrupt, sir. As your voice is very low, may I please request you to use a handset?

Speaker #1: Sorry to interrupt, sir. As your voice is very low, may I please request you to use a handset?

Speaker #3: Yeah. So congratulations, sir, for a good set of numbers. So my first question, would be on the yarn side. So last quarter, we had guided that we have tied up with a customer on the yarn side.

Dhirendra Kumar: Yeah. Congratulations, sir, for a good set of numbers. My first question would be on the yarn side. Last quarter we had guided that we have tied up with a customer on the yarn side, and we were ramping up with that customer. How is it going now? Are we seeing any slowdown there, or is it going as per our expectations?

Dhirendra Kumar Patro: Yeah. Congratulations, sir, for a good set of numbers. My first question would be on the yarn side. Last quarter we had guided that we have tied up with a customer on the yarn side, and we were ramping up with that customer. How is it going now? Are we seeing any slowdown there, or is it going as per our expectations?

Speaker #3: And we were ramping up with that customer. So how is it going now? We are seeing any slowdown there, or is it going as per our expectations?

Speaker #2: Yeah, it is going strong. Basically, there was a disruption due to the whole petrochemical industry situation. And a huge volatility in the prices and everything.

Yash Sharma: Yeah, it is going strong. Basically, there was a disruption due to the whole petrochemical industry situation and a huge volatility in the prices and everything. The whole supply chain was a little bit in disarray, but it's going good as we have planned, and we are slowly ramping up the volumes.

Speaker #2: So the whole supply chain was a little bit in disarray. But it's going good as we have planned. And we are slowly ramping up the volumes.

Speaker #3: Okay. And my second question would be on the difference between the virgin pet and arpit prices. Can you let me know the prices which is going on now?

Dhirendra Kumar: Okay. My second question would be on the difference between the virgin PET and rPET prices. Can you let me know the prices which is going on now?

Dhirendra Kumar Patro: Okay. My second question would be on the difference between the virgin PET and rPET prices. Can you let me know the prices which is going on now?

Speaker #2: So as of today, the difference between arpit and vpet is somewhere between 5 to 10 percent.

Yash Sharma: As of today, the difference between rPET and VPET is somewhere between 5% to 10%.

Speaker #3: So arpit is.

Dhirendra Kumar: rPET is.

Dhirendra Kumar Patro: rPET is.

Speaker #2: It's very volatile. It's very volatile. See, it's very volatile. Last year, last month, the prices almost matched there was no difference in the price.

Yash Sharma: It's very volatile. See, it's very volatile. Last month, the prices almost matched. There was no difference in the price. This month, there is a difference of about 5% to 7%. It's in a very volatile state. It's changing on a weekly basis. I don't know what to say.

Speaker #2: This month, there is a difference of about 5 to 7 percent. So it's in a very volatile state. It's changing on a weekly basis.

Speaker #2: I don't know what to say.

Speaker #3: So basically, what is happening that the polymer prices because of the crude, it's changing daily basis, almost on daily basis. So you see, one day, the crude is 80, another day is 95, and another day a third day it is 92.

Gopal Agarwal: Basically, what is happening is that the polymer prices, because of the crude, is changing on a daily basis, almost on a daily basis. You see one day the crude is at another day it's $95, and a third day it is at $92. It is like that.

Speaker #3: So it is like that. Okay. So arpit is 10 rupees expensive, more expensive than the virgin pet. That is what you are saying now?

Dhirendra Kumar: Okay. rPET is INR 10 more expensive than the virgin PET. That is what you are saying now?

Dhirendra Kumar Patro: Okay. rPET is INR 10 more expensive than the virgin PET. That is what you are saying now?

Speaker #2: No, no. Currently, for the last three months, on an average, arpit has been cheaper by 5 to 10 rupees than vpet in the last three months.

Yash Sharma: No, currently, for the last three months, on an average, rPET has been cheaper by INR 5 to INR 10 than VPET, in the last three months.

Speaker #3: Okay. Okay. My third question would be on the inventory. So in this quarter, we have caught that inventory gains because of two to three months of inventory for inventory which that we are holding.

Dhirendra Kumar: Okay. My third question would be on the inventory. In this quarter, we have got that inventory gains

Dhirendra Kumar Patro: Okay. My third question would be on the inventory. In this quarter, we have got that inventory gains

Yash Sharma: Because of two to three months of inventory, super inventory which that we are holding. Considering now crude is cooling down a bit. Once crude goes to $70 or $80, we can see in Q2 or Q3 this high cost of inventory hitting us in our margins. Is that assumption correct?

Dhirendra Kumar Patro: Because of two to three months of inventory, super inventory which that we are holding. Considering now crude is cooling down a bit. Once crude goes to $70 or $80, we can see in Q2 or Q3 this high cost of inventory hitting us in our margins. Is that assumption correct?

Speaker #3: So considering now crude is cooling down a bit, so once crude goes to 70 or 80 dollars, so we can see in two Q or three Q, this high cost of inventory hitting us in our margins.

Speaker #3: Is there an assumption correct?

Speaker #2: No. So we don't expect that because when there is any very sharp fall or fall or the uptake in the prices, only then we have some inventory gain or inventory losses.

Gopal Agarwal: No. We don't expect that because when there is any very sharp fall or the uptick in the prices, only then we have some inventory gain or inventory losses. When the situation is normal, when every day there is some fluctuation, we don't expect any inventory gain or loss in that sense. It is very minor.

Speaker #2: But when the normal, so when every day there is some fluctuation, so we don't expect any inventory gain or loss in that sense. It is very, very minor.

Speaker #3: So see, what really happens in the normal course of business is that we buy at every level and we sell at every level. That's what happens in the general course of business.

Yash Sharma: See, what really happens in the normal course of business is that we buy at every level and we sell at every level. That's what happens in the normal course of business when you talk about textile. In case of subsidiaries like filaments or rPET, what happens is we have formulas which does averaging. Averaging of the last month inventory and the prices are determined by the average cost of the inventory. Every month inventory cost is basically passed on to the consumer. It's only textile where it's all spot, where what the strategy that we follow is we buy at every price and we sell at every price, and we try to match and maintain the delta. That's how it works.

Speaker #3: When you talk about textile, in case of subsidiaries like filaments or arpit, what happens is we have a we have formulas which does averaging averaging of the last month's inventory.

Speaker #3: And the price is determined by the average cost of the inventory. So every month of inventory cost is basically passed on to the consumer.

Speaker #3: So it's only textile where it's all spot where what the strategy that we follow is we buy at every price and we sell at every price and then we try to match and maintain the delta.

Speaker #3: That's how it works.

Speaker #2: Only in case when there is a very sharp uptake or downturn, yeah, in the prices, only then it impacts us.

Gopal Agarwal: Only in case when there is a very sharp uptick or-

Yash Sharma: Downtick

Gopal Agarwal: downturn, yeah, in the prices. Only then it impacts us.

Speaker #3: Correct. Okay. Okay. Got it. Thank you.

Yash Sharma: Correct.

Gopal Agarwal: Okay. Got it. Thank you.

Speaker #1: Thank you. The next question comes from the line of Pritesh Cheda from Lucky Investment. Please go ahead.

Operator: Thank you. The next question comes from the line of Pritesh Chheda from Lucky Investment. Please go ahead.

Speaker #3: Sir, can you tell us when exactly are the arpit capacities coming in which quarter and from the current 64,000 tons, you are adding another 60, right?

Pritesh Chheda: Sir, can you tell us when exactly are the rPET capacities coming, in which quarters? From the current 64,000 tons, you are adding another 60, right?

Gopal Agarwal: No. We are adding 22,500 fresh capacity and we are making some debottlenecking, making total capacity to 100,000 tons. Currently it is around 65,000 tons and the 35,000 will come.

Speaker #2: No. So we are adding 22,500 thread capacity and we are making some de-bottlenecking making total capacity to 100,000 tons. So currently, it is around 65,000 tons and another 35,000 will come.

Speaker #3: And when will these come? If you can tell us.

Pritesh Chheda: When will these come, if you can tell us?

Speaker #2: So that would be available by December, January.

Gopal Agarwal: That would be available by December, January.

Speaker #3: Okay. So basically, in quarter four, you will have the expanded the entire incremental 40,000 ton expanded capacity of 36,000.

Pritesh Chheda: Okay. Basically in Q4 you will have the entire incremental 40,000 ton expanded capacity of 36,000 only.

Speaker #2: So in case of our new capacity of 22,500 tons, certainly we have to get the approval from the FSAI. So it depends on the FSAI approval.

Gopal Agarwal: In case of our new capacity of total 2,500 tons, certainly we have to get the approval from the FSSAI. It depends on the FSSAI approval, we will be making the full March quarter or will be starting from the April.

Speaker #2: We will be making the full March quarter or we'll be starting from the April.

Speaker #3: Okay. So 22,000 is brownfield. Okay. Which will come maybe in quarter one. Of next year. And 14, 13, 14,000 ton is de-bottlenecking. Which will come in quarter three.

Pritesh Chheda: Okay. 22,000 tons is brownfield which will come maybe in Q1 of next year and 13,000, 14,000 tons is debottlenecking, which will come in Q3.

Gopal Agarwal: Yes.

Pritesh Chheda: Q4.

Speaker #2: So 10,12,000 ton 10 to 12,000 ton will be confirmed. Which will be available as soon as it is completed. There we don't we don't need any FSAI approval in that case.

Gopal Agarwal: 10,000 to 12,000 tons will be coming from debottlenecking which will be available as soon as it is completed. Here we don't need any FSSAI approval in that case.

Speaker #3: Okay. And in the 10 lakh tons of 2030, that is assumed at 40% mandate or at what mandate that 10 lakh ton demand is?

Pritesh Chheda: Okay. In that 10 lakh tons of 2030, that is assumed at 40% mandate or at what mandate that 10 lakh tons demand is assumed?

Yash Sharma: 50% mandate. That's a 50% mandate.

Speaker #2: 50, 50, 50% mandate. That's a 50% mandate.

Pritesh Chheda: 50%. Industry's capacity today at 280,000 tons, is it fully utilized or what is it?

Speaker #3: 50%. And industries capacity today at 2,80,000 ton is it fully utilized or what is it?

Yash Sharma: Sir, the current capacity is 4.2 lakh tons.

Speaker #2: So the current capacity industry capacity is 4.2 lakh tons. And actual output is not obviously not that high. Actual output is much lower.

Gopal Agarwal: Actual output

Yash Sharma: Actual output is obviously not that high. Actual output is much lower.

Pritesh Chheda: What is the mandate agreed to by the players?

Speaker #3: And what is the mandate adhered to in by the players?

Pritesh Chheda: What is the mandate agreed to by the players?

Yash Sharma: Sorry, the mandate capacity requirement as of today is somewhere between five and a half to 6 lakh tons.

Speaker #2: Sorry. The mandate capacity requirement as of today is somewhere between 5.5 to 6 lakh tons.

Speaker #3: And at what mandate that is also at 40% mandate?

Pritesh Chheda: At what mandate? That is also at 40% mandate?

Yash Sharma: 40%, yeah.

Speaker #2: 40, 40%. Yeah.

Speaker #3: Okay. So mandate is 40. Capacity needed is 5 plus. Capacity today is 420. But capacity used is less than 420. Which means the mandate is not fully implemented.

Pritesh Chheda: Okay. Mandate is 40, capacity needed is five plus, capacity today is 420, but capacity used is less than 420, which means the mandate is not fully implemented.

Speaker #2: Correct. It's not I mean, the people are not using as much as the mandate should be.

Yash Sharma: Correct. The people are not using as much as the mandate should be.

Speaker #3: Okay. Okay. Gotcha.

Pritesh Chheda: Okay. Got it.

Speaker #1: Thank you. We have the next question from the line. Of Naeem Patel from Bastion Research. Please go ahead.

Operator: Thank you. We have the next question from the line of Naeem Patel from Bastion Research. Please go ahead.

Naeem Patel: Hi. Thank you for this opportunity and congratulations on good set of numbers. My question is around the legacy business. In the earlier calls as well you had mentioned that you were looking towards the textile to textile conversion, basically shifting away from rPET because rPET but the PET bottle scraps because the rPET industry is volatile and the scrap bottle price is also volatile. We had ventured into textile as an alternative. Is that what we are still looking towards or has the plan shifted?

Speaker #3: Yeah. Hi. Thank you for this opportunity and congratulations on a good set of numbers. So my question is around the legacy business. So in the earlier calls as well, you had mentioned that we were looking towards the textile to textile conversion, basically shifting away from arpit because arpit not sorry, arpit, but the pad bottle scraps because the industry arpit industry is volatile in the scrap bottle price is also volatile.

Speaker #3: So we had ventured into textile as a as an alternative. So is that what we are still looking towards or is the plan has the plan shifted?

Speaker #2: So in the last call, we discussed we have started to use some textile waste. That is the post-industrial waste here. So we have already started yes to consume 20, 25 percent of the industrial waste textile industrial waste.

Gopal Agarwal: In the last call we discussed we have started to use some textile waste. There is the post-industrial waste there. We have already started to consume 25% of the textile industrial waste.

Speaker #3: Understood. And what challenges do we have using textile waste compared to pad bottle scraps when implementing that as a raw material?

Naeem Patel: Understood. What challenges do we have using textile waste compared to PET bottle scraps when implementing that as a raw material?

Speaker #2: So you see, there are some necessary technical changes required in the plant and process and that are very well taken care in most of the lines.

Prashant Khandelwal: There are some necessary technical changes required in the plant and process, and that are very well taken care in most of the lines. Whenever you are changing raw material from one set to another set, yes, some technical things have to be modified, and it has been done.

Speaker #2: So whenever you are changing raw material from one set to another set, yes, some technical things have to be modified and it has been done.

Speaker #3: And in the present technology, textile waste cannot be used beyond a certain number. Certain percentage.

Yash Sharma: In the present technology, textile waste cannot be used beyond a certain number, certain percentage.

Speaker #2: Could you be able to quantify it? So it would be quite difficult to quantify it, but yes, we are presuming up to 50, 55 percent average must be okay.

Naeem Patel: Could you be able to quantify?

Prashant Khandelwal: It will be quite difficult to quantify, but yes, we are presuming up to 50%, 55% average must be okay. For some product, it depends on product to product. In some product, you can go beyond 50%. In some product, you can consume only 20%, 25%. It all depends on the product, what you are making.

Speaker #2: For some products, it depends on product to product. In some product, you can go beyond 50%. In some product, you can consume only 20, 25 percent.

Speaker #2: So it all depends on the product what you are making.

Speaker #3: Understood. But we are assuming that in the long run, when arpit and EPR mandates take requirement mandate up to 60% and the volatility might inflate or elevate the scrap bottle prices, these measures would insulate the legacy business up to a certain extent.

Naeem Patel: Understood. We are assuming that, in the long run when rPET and EPR mandate takes the requirement mandate up to 60% and the volatility might inflate or elevate the scrap bottle prices, these measures would insulate the legacy business up to a certain extent. Is that the correct way to look at?

Speaker #3: Is that a correct way to look at?

Speaker #2: So you see, with the there is an incremental growth in consumption of PT bottles as well. So and the maximum maximum arpit mandate is up to 60%.

Prashant Khandelwal: You see, with that, there is an incremental growth in consumption of PET bottles as well. The maximum rPET mandate is up to 60%. Rest 40% would be available for this textile business, number one. With the incremental consumption of PET bottles, the total volume available for both recycling would be higher. In recycling textiles now, the new capacities would not come. They are not coming. Somewhere it will be a trade-off.

Speaker #2: So rest 40% would be available for this textile business, number one. And with the incremental consumption of PT bottles, the total volume available for both recycling would be higher.

Speaker #2: And in recycle textiles, now the new capacities would not come. They are not coming. That is where so somewhere it will be a trade-off.

Speaker #3: Yeah. Trade-off will come index to three years. The trade-off will come.

Yash Sharma: Yeah. Trade-off will come. In next two, three years, the trade-off will come.

Prashant Khandelwal: Everything will be.

Speaker #2: Everything will be.

Speaker #3: And both the industry will co-exist.

Yash Sharma: Both the industry will co-exist.

Speaker #2: Correct.

Prashant Khandelwal: Correct.

Speaker #3: Yeah. Understood. Understood. And just one last question. I think in the past calls as well, you had mentioned that the Kanpur facility we were experimenting with recycled HDPE as well.

Yash Sharma: Yeah.

Naeem Patel: Understood. Just one last question, I think. In the past calls as well, you had mentioned that the Kanpur facility, you were experimenting with recycled HDPE as well. Is there any development going on towards that?

Speaker #3: So is there any development going on towards that?

Speaker #2: So it is still under progress. We are working on some other recycling process as well apart from HDPE and polyolefins. So we'll update this once it is finalized.

Prashant Khandelwal: It is still under progress. We are working on some other recycling process as well, apart from HDPE and polyolefins. We'll update this once it is finalized.

Speaker #3: Understood. Understood. That's all from my side. On the good side of things. Thank you.

Naeem Patel: Understood. That's all from my side. Rest on the quarter. Thank you.

Speaker #1: Thank you. The next question comes from the line of Shubham Thorad from Perpetual Capital Advisors. Please go ahead.

Operator: Thank you. The next question comes from the line of Shubham Thorat from Perpetual Capital Advisors. Please go ahead.

Shubham Thorat: Thanks for the opportunity.

Speaker #2: Yeah. Thanks for the opportunity.

Operator: Sorry to interrupt, sir. As your voice is very low, may I please request you to use a handset?

Speaker #1: Sorry to interrupt, sir. As your voice is very low, may I please request you to use a handset?

Speaker #2: Yeah. Am I audible now?

Shubham Thorat: Yeah. Am I audible now?

Speaker #1: No, sir. Yet there is a lot of disturbance in your voice.

Operator: No, sir. There is a lot of disturbance in your voice.

Speaker #2: Hello. Is it better now?

Shubham Thorat: Hello. Is it better now?

Speaker #1: Yes. Please go ahead.

Operator: Yes, please go ahead.

Speaker #2: Yeah. So thank you for the opportunity. I just wanted to know what is our current working capital cycle and how are we expecting that to fare for this financial year?

Shubham Thorat: Yeah. Thank you for the opportunity. I just wanted to know what is our current working capital cycle, and how are we expecting that to fare for this financial year?

Speaker #2: So in case of a legacy business, the working capital cycle is about 75 to 90 days and in case of a new businesses, the subsidiary business is 45 to 50 days.

Yash Sharma: In case of our legacy business, the working capital cycle is about 75 to 90 days. In case of our new businesses, the subsidiary business is 45 to 50 days.

Speaker #3: Oh, sorry. And I just wanted to know the so I just joined our call late. So I might have missed your comments around CapEx.

Shubham Thorat: Okay, got it. I just joined our call late, so I might have missed your comments around CapEx. Just wanted an overview around what CapEx plans are currently undergoing and what kind of capacity you are targeting to build with that.

Speaker #3: So just wanted an overview around what CapEx plans are currently undergoing and what kind of capacity we are targeting to build with that.

Yash Sharma: Yeah. See, basically as going forward, as we have already detailed out, we are already working on debottlenecking and brownfield capacity expansion. We are going to increase our rPET capacity from current 65,000 tons to about 100,000 tons by next year. That's already on way and well on track on time for us to execute faster. Going forward, the next phase of expansion, we are already working on quite closely, quite substantially, and pretty soon we'll be finalizing the next year's plans.

Speaker #2: So yeah, see, basically going forward, as we have already detailed out, we are already working on deep bottle making and brownfield capacity expansion. So we are going to increase the arpit capacity from current 65,000 tonnes to about 100,000 tonnes by next year.

Speaker #2: That's already in on way and well on track on time. For us to execute faster, and going forward, the next phase of expansion, we are already working on quite closely quite substantially.

Speaker #2: And I'm pretty soon we'll be finalizing the next year's plans.

Speaker #3: And just one final clarification. You mentioned that we are trying to enter into a new recycled product after arpit. I just missed that product name.

Shubham Thorat: Just one final clarification. You mentioned that we are trying to enter into a new recycled product after rPET. I just missed that product name, if you can just reiterate.

Speaker #3: If you can just reiterate.

Speaker #2: So I think we have already we have already answered this. This question. So the product name, I just missed that. So currently we are working on polyolefins recycling.

Yash Sharma: I think we have already answered this question.

Shubham Thorat: Yeah. The product name, I just missed that.

Yash Sharma: Currently we are working on polyolefins recycling.

Speaker #3: Oh, got it. Thank you so much. That's it from me.

Shubham Thorat: Okay, got it. Thank you so much. That's it from my end.

Speaker #1: Thank you. We have the next question from the line of Dolly Chaudhary from Niveshi. Please go ahead.

Operator: Thank you. We have the next question from the line of Dolly Choudhary from Niveshaay. Please go ahead.

Dolly Choudhary: Hi, sir. Thank you for taking the follow-up question. Sir, as we have guided for 20% volume growth this year, and we have like I wanted to understand that are we getting new clients in the domestic side or the current customers are only increasing sourcing from us?

Speaker #4: Hi, sir. Thank you for taking the follow-up question. So sir, as we have guided for 20% volume growth this year and we have so I wanted to understand that we are we getting new clients in the domestic side or the current customers are only increasing sourcing from us?

Speaker #2: Yeah. Yeah. So both are increasing. Dolly, we have I mean, the current customers have also increased the volumes and as well as we have onboarded new customers as well who have started now using arpit at some extent.

Yash Sharma: Yeah. Both are increasing, Dolly. I mean, the current customers have also increased the volumes and as well as we have onboarded new customers as well, who have started now using rPET at some extent. It's both.

Speaker #2: So it's both.

Dolly Choudhary: Can we name the clients?

Speaker #4: Can we leave the call?

Yash Sharma: Can you see that volumes are also Sorry, what again?

Speaker #2: Can you see that volumes are also sorry, what again?

Dolly Choudhary: Which clients have you onboarded, if you can name.

Speaker #4: Which clients have you onboarded? If you can name them.

Speaker #2: See, I'm not comfortable taking the names, to be honest, publicly here.

Yash Sharma: I'm not comfortable taking the names, to be honest, publicly here.

Speaker #4: Okay. Okay. And sir, in like an export market, which geography are we exporting to currently and how are we seeing traction there as well?

Dolly Choudhary: Okay. Sir, like in export market, which geography are we exporting to currently and how are we seeing traction there as well?

Speaker #2: Yeah. So we see we regularly work with different geographies like the US market, like the Middle East market, mostly. And both of them we are already working with from since the last two and a half years.

Yash Sharma: Yeah. We regularly work with different geographies like the US market, like the Middle East market, mostly, and both of them we are already working with since the last two and a half years.

Speaker #4: So like are we also onboarding new clients on export side?

Dolly Choudhary: Are we also onboarding new clients on export side?

Yash Sharma: Yeah, definitely.

Speaker #2: Yeah. Yeah. Definitely. Definitely. Definitely.

Speaker #4: And what would be current contribution from export business?

Dolly Choudhary: What would be current contribution from export business?

Speaker #2: See, it keeps on changing basically because of the geopolitical uncertainties, the ocean freight being so volatile. It keeps on changing on a month-on-month basis.

Yash Sharma: It keeps on changing basically because of the geopolitical uncertainties, the ocean freight being so volatile. It keeps on changing on a month-on-month basis. On an average, I think we are able to do 10%, but it keeps on really changing. Sometimes it's 15, sometimes it's 20, sometimes it's even less to five, because there are so much uncertainties and volatility in the freights and sea fares as well.

Speaker #2: On an average, I think we are able to do 10%. But it keeps on really changing. Sometimes it's 15, sometimes it's 20, sometimes it's even less to 5 because there's so much uncertainties and volatility in the freights and sea fares as well.

Speaker #4: So like as a company, are we seeing this portion to increase? Are we targeting aggressively or?

Dolly Choudhary: As a company, are we seeing this portion to increase? Are we targeting aggressively or

Speaker #2: See, we are working to develop see, we are working to develop more and more markets and more and more customers for our product. And obviously, we try to tilt towards the market which where we are able to achieve better numbers economically, financially, right?

Yash Sharma: See, we are working to develop more and more markets and more and more customers for our product. Obviously, we try to tilt towards the market where we are able to achieve better numbers economically, financially, right? We obviously try to maintain both the markets. Obviously, we tilt the volume slightly towards the one where it's more attractive. That's how we work.

Speaker #2: So but we are obviously we obviously try to maintain both the markets. Obviously, we tilt the volume slightly towards the one where it's more attractive.

Speaker #2: That's how we work.

Dolly Choudhary: Got it. Thank you.

Speaker #4: Got it. Got it. Thank you.

Speaker #1: Thank you. We have the next question from the line of Dheeraj Ram from 361 Capital. Please go ahead.

Operator: Thank you. We have the next question from the line of Dheeraj Ram from 360 ONE. Please go ahead.

Speaker #3: Thank you for taking up the follow-up, sir. This alternative feedstock of textile waste do we see any cost savings when we shift from bales to textile waste?

Dheeraj Ram: Thank you for taking up the follow-up, sir. This alternative feedstock of textile waste, do we see any cost savings when we shift from bales to textile waste?

Speaker #2: Yes. Yes. Definitely. There is a little cost saving when we obviously use textile waste materials of different, different qualities. But see, obviously, there is those textile waste, they cannot be used directly.

Yash Sharma: Yes, definitely, there is a little cost saving when we obviously use textile waste materials of different qualities. See, obviously, those textile waste they cannot be used directly. They have to undergo a certain process transformation or process change to be able to include it in our production process. Definitely it does offset some part of the cost when we use more and more of that.

Speaker #2: They have to undergo a certain process transformation or process change to be able to include it in our production process. But definitely, it does offset some part of the cost when we use more and more of that.

Speaker #3: Got it. So currently, what is the percentage of textile waste that we use and what could be this next after next two, three years?

Dheeraj Ram: Got it. Great. Currently, what is the percentage of textile waste that we use and what could be this next 2, up to next 2, 3 years?

Yash Sharma: Currently there are about 20% to 25% we are able to use textile waste, on average.

Speaker #2: Currently, there's about 20, 25 percent we are able to use textile waste average on an average.

Speaker #3: Okay. And we plan to ramp it up, sir, in next two, to three years?

Dheeraj Ram: Okay. We plan to ramp it up, sir, in next two to three years?

Yash Sharma: Of course we are planning for to ramp up, but as we have discussed earlier also, it depends on the products we are making. Product to product, the ratio is different. Certainly, we are trying to expand, but it is very difficult to give any specific numbers.

Speaker #2: Of course. Of course. We are planning for to ramp up. But as we have discussed earlier also, it depends on the products we are making.

Speaker #2: So product to product, the ratio is different. So certainly, we are trying to expand. But it is very difficult to give any specific numbers.

Speaker #3: Understood. And the last question is, do you have any update on the new land that you were looking for for the future capacity expansion beyond FY28?

Dheeraj Ram: Understood. The last question is, do you have any update on the new land that you were looking for the future capacity expansion beyond FY28?

Speaker #2: Yeah. So we are finalizing our expansion plans. So accordingly, we will work on the land and all those things.

Yash Sharma: Yeah. We are finalizing our expansion plans. Accordingly, we will work on the land and all those things.

Speaker #3: Okay. Okay. Sure. Thank you, sir. Thank you.

Dheeraj Ram: Okay. Sure. Thank you, sir.

Operator: Thank you. The next question comes from the line of Bharat Gulati from Dalal & Broacha. Please go ahead.

Speaker #1: Thank you. The next question comes from the line of Bharat Gulati from Dalal and Brocha. Please go ahead.

Speaker #2: Yeah. Hi. Thank you for the follow-up. I just had a question regarding to my previous one relating to volumes. So just trying to understand that the sort of volume on the subsidiary business that we've done for the past two quarters, which is in the range of 15 to 16,000, should that be the run rate going forward?

Bharat Gulati: Yeah, hi. Thank you for the follow-up. I just had a question regarding to my previous one relating to volumes. Just trying to understand that the sort of volume that on the subsidiary business that we've done for the past, which is in the range of 15 to 16,000, should that be the run rate going forward? Just trying to understand, have we sequentially sort of hit a peak in terms of volumes or do we see this sequentially further improving?

Speaker #2: Just trying to understand, have we sequentially sort of hit a peak in terms of volumes or do we see the sequentially further improving?

Speaker #3: Yeah. So we are looking for the sequential improvement in the volume.

Yash Sharma: Yeah. We are looking for the sequential improvement in the volume.

Speaker #2: See, because the fourth arpit line currently is not fully utilized as of yet. Overall, we are at about 72% utilization levels in the subsidiary, which we are looking to take it to around 85% levels in the coming months.

Yash Sharma: Because the fourth rPET line currently is not fully utilized as of yet. Overall, we are at about 72% utilization levels in the subsidiary, which we are looking to take it to around 85% levels in the coming months.

Bharat Gulati: Got it. It would be fair to say that, let's say a 16,000 sort of volume run rate on the Warangal facility is roughly 80% and 82% utilization. From that Q4 number, we shouldn't be significantly seeing any growth, would that be fair to say?

Speaker #3: Got it. But it would be fair to say that let's say a 16,000 sort of volume run rate on the Varangal facility is roughly 80, 82 percent utilization.

Speaker #3: So from that Q4 number, we shouldn't be significantly seeing any growth or sequence. Would that be fair to say?

Speaker #2: Yeah. So basically, in Q4, there were some pent-up demands. So we are having the inventory which was cleared at that time. So the production level was much lower.

Yash Sharma: Yeah. Basically, in Q4, there was some pent-up demand. We are having the inventory which was cleared at that time. The proportion level was much lower. If you compare the proportions, we have achieved a decent increase in proportion level in our subsidiary business. The volume is same because whatever we have produced, we have sold. We don't have that much inventory with us in subsidiary.

Speaker #2: So if you compare the production, so we have achieved a decent increase in production level in our subsidiary business. But the volume is same because whatever we have produced, we have sold.

Speaker #2: We don't have that much inventory with us in subsidiary.

Speaker #3: Got it. Got it. And just on competition, are we seeing any sort of threats? Are we seeing some sort of market share that has been taken away or intensifying in terms of pricing pressures?

Bharat Gulati: Got it. Just on competition, are we seeing any sort of threats? Are we seeing some sort of market share that has been taken away or intensifying in terms of pricing pressures? Also earlier you spoke about the supply-demand mismatch sort of now evening out. How do we read that through for FY28 and how do we take that into consideration when planning CapEx?

Speaker #3: And also, you spoke earlier, you spoke about the supply-demand mismatch sort of now evening out. So how do we read that through for FY28?

Speaker #3: And yeah. And how do we take that into consideration when planning Capex?

Speaker #2: So see, you are definitely right. I think the competitive pressure which was to come has already came last year to us on us. And last year was particularly a difficult year because one, there was competitive pressure intensity as a lot of new plants came online.

Yash Sharma: See, you are definitely right. I think the competitive pressure which was to come has already come last year on us.

Yash Sharma: The last year was particularly difficult year because one, there was competitive pressure intensity as a lot of new plants came online, as well as the demand went really low as there was a lot of confusion regarding the industry, the mandate and everything. Now, since the industry has started using more and more rPET and the utilizations have gone really up, we are in fact facing more and more increasing demands. Obviously because the level of capability, the consistency, the supply security that we are able to provide, it is difficult for a small recycler to provide that to the global brand owners. From that sense of and point of view, we are increasingly facing much higher demand today than our capacity that we can serve the customers.

Speaker #2: As well as the demand went really, really low as there was a lot of confusion regarding the industry, the mandate, and everything. Now, since the industry has started using more and more arpit, and the utilizations have gone really up, we are in fact facing more and more increasing demands obviously because the level of capability we consistency, the supply security that we are able to provide, it's difficult for a small recycler to provide that to the global grand owners.

Speaker #2: So in that from that sense of and point of view, we are increasingly facing much higher demand today than our capacity that we can serve the customers.

Speaker #2: And that was the major reason for us to convert our greenfield project to groundfield project so that we can cater to the demand immediately.

Yash Sharma: That was a major reason for us to convert our greenfield project to brownfield project so that we can cater to the demand immediately. In fact now more so than ever, we are in a much more better competitive position in the industry.

Speaker #2: So in fact, now more so than ever, we are in a much more better competitive position in the industry.

Speaker #3: So yeah. Should it be fair to say that we are a number one supplier for all of our customers or are we in certain customers or second tier vendor also?

Bharat Gulati: Yeah, should it be fair to say that we are a number one supplier for all of our customers or are we in certain customers a tier 2 vendor also?

Speaker #2: So if you talk about the global brand owners, the majorly all the global brand owners and the biggest volume ones, in terms of the size, I don't want to take any names here.

Yash Sharma: If you talk about the global brand owners, majorly all the global brand owners and the biggest volume ones in terms of the size, I don't want to take any names here, we have the highest market share with respect to rPET suppliers.

Speaker #2: We have the highest market share with respect to our pet suppliers.

Speaker #3: Got it. Got it. That's helpful. Thank you.

Bharat Gulati: Got it. That's helpful. Thanks a lot.

Speaker #1: Thank you. We'll take that as the last question. And I would now like to hand the conference over to the management for closing comments.

Operator: Thank you. We'll take that as the last question. I would now like to hand the conference over to the management for closing comments. Thank you, and over to you.

Speaker #1: Thank you and over to you.

Speaker #2: Yeah. Thank you. Thank you, the entire executive team joins me in thanking you for your valuable perspective and support. We remain fully focused on driving operational excellence and capturing the clear opportunities ahead of us.

Gopal Agarwal: Yeah. Thank you. Thank you. The entire executive team joins me in thanking you for your valuable perspective and support. We remain fully focused on driving operational excellence and capturing the clear opportunities ahead of us. Thank you.

Speaker #2: Thank you.

Operator: Thank you. On behalf of Antique Stock Broking Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.

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