Q1 2027 Kuantum Papers Ltd Earnings Call

August 14, 2026

Speaker #1: Good afternoon, ladies and gentlemen. Welcome to the Kuantum Papers Limited Q1 FY27 earnings conference call. As a reminder, all participant lines will be in listen-only mode.

Operator 3: Good afternoon, ladies and gentlemen. Welcome to the Kuantum Papers Limited Q1 FY27 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the management's opening remarks. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anand Jayaram from SKP Securities Limited. Thank you, and over to you.

Operator: Good afternoon, ladies and gentlemen. Welcome to the Kuantum Papers Limited Q1 FY27 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the management's opening remarks. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anand Jayaram from SKP Securities Limited. Thank you, and over to you.

Speaker #1: There will be an opportunity for you to ask questions after management's opening remarks. Should you need assistance during the conference call, please signal an operator by pressing star, then zero, on your touch-tone phone.

Speaker #1: Please note that this conference is being recorded. I now hand the conference over to Mr. Anant Ajayaram from SKP Securities Limited. Thank you, and over to you.

Speaker #2: Good afternoon, ladies and gentlemen. It's my pleasure to welcome you all, on behalf of Kuantum Papers and SKP Securities, to this financial results conference call.

Anand Jayaram: Good afternoon, ladies and gentlemen. It is my pleasure to welcome you all on behalf of Kuantum Papers and SKP Securities to this financial results conference call. We have with us Mr. Pawan Khaitan, Vice Chairman and Managing Director, Mr. Jagdeep Hira, Whole-time Director and CEO, Operations, Mr. Vikram Kumar Khaitan, Chief Financial Officer, and Ms. Prachi Sharma, Chief Strategy Officer. We will have the opening remarks from the management, followed by the Q&A session. Thank you, and over to you, Pawanji and Vikramji.

[Analyst] (SKP Securities): Good afternoon, ladies and gentlemen. It is my pleasure to welcome you all on behalf of Kuantum Papers and SKP Securities to this financial results conference call. We have with us Mr. Pawan Khaitan, Vice Chairman and Managing Director, Mr. Jagdeep Hira, Whole-time Director and CEO, Operations, Mr. Vikram Kumar Khaitan, Chief Financial Officer, and Ms. Prachi Sharma, Chief Strategy Officer. We will have the opening remarks from the management, followed by the Q&A session. Thank you, and over to you, Pawanji and Vikramji.

Speaker #2: We have with us Mr. Pawan Khetan, Vice Chairman and Managing Director; Mr. Jagdeep Hira, Whole-time Director and CEO—Operations; Mr. Vikram Kumar Khetan, Chief Financial Officer; and Ms. Prachi Sharma, Chief Strategy Officer.

Speaker #2: We will have the opening remarks from the management, followed by the Q&A session. Thank you, and over to you, Pawanji and Vikramji.

Speaker #3: Thank you. Good afternoon, everyone. It's a pleasure to welcome you all to our earnings conference call for the first quarter of the financial year 2027.

Pavan Khaitan: Thank you. Good afternoon, everyone. It is a pleasure to welcome you all to our earnings conference call for the first quarter of financial year 2027. I would like to thank all participants for joining us today. The paper industry saw a healthy demand supported by education, publishing, office consumption, and broader economic activity in the first quarter of the financial year 2027. This enabled the company to sell good volumes in the market and also improve the net sales realization of our products. However, the West Asia conflict intensified cost pressures, particularly across fuel, chemicals, and other raw materials, while also affecting freight and logistics costs. This created a challenging margin environment for paper manufacturers, even as demand conditions improved. Going forward, we believe the key factors for the industry will be the trajectory of raw materials and energy costs, paper realizations, and the competitive intensity from imports.

Speaker #3: I would like to thank all participants for joining us today. The paper industry saw healthy demand, supported by education, publishing, office consumption, and broader economic activity in the first quarter of the financial year 2027.

Speaker #3: This enabled the company to sell good volumes in the market and also improve the net sales realization of our products. However, the West Asia conflict intensified cost pressures, particularly across fuel, chemicals, and other raw materials, while also affecting freight and logistics costs.

Speaker #3: This created a challenging margin environment for paper manufacturers, even as demand conditions improved. Going forward, we believe the key factors for the industry will be the trajectory of raw materials and energy costs, paper realizations, and the competitive intensity from imports.

Speaker #3: While some near-term volatility may persist, we expect demand to remain supportive. We also continue to see opportunities in higher-value paper applications, particularly as customers increasingly look for sustainable alternatives to plastic-based products.

Pavan Khaitan: While some near-term volatility may persist, we expect demand to remain supportive. We also continue to see opportunities in higher value paper applications, particularly as customers increasingly look for sustainable alternatives to plastic-based products. This makes cost efficiency, product differentiation, and a greater focus on value-added products increasingly important for us. Moving to Kuantum's operational performance, the quarter saw several important initiatives across capacity enhancement, product development, and sustainability. We successfully commissioned the DDS double displacement digester system for wood pulping, which will help optimize pulp quality and yield while reducing utility, chemical, and overall pulp costs. We also commissioned an advanced native starch system on paper machine 2 and paper machine 3, aimed at improving paper properties and reducing uncooked starch losses. During the quarter, we installed a state-of-the-art folio ream wrapping machine to automate the wrapping and packaging of high-folio sheets.

Speaker #3: This makes cost efficiency, product differentiation, and a greater focus on value-added products increasingly important for us. Moving to Kuantum's operational performance, the quarter saw several important initiatives across capacity enhancement, product development, and sustainability.

Speaker #3: We successfully commissioned the DDS double-deployment digestive system for wood pulping, which will help optimize pulp quality and yield while reducing utility, chemical, and overall pulp costs.

Speaker #3: We also commissioned an advanced native starch system on paper machine 2 and paper machine 3, aimed at improving paper properties and reducing uncooked starch losses.

Speaker #3: During the quarter, we installed a state-of-the-art folio ream wrapping machine to automate the wrapping and packaging of high-folio sheets. The system has integrated labeling and stacking capabilities, which will enhance packaging efficiency, streamline material handling, and improve the overall operational process of our finishing house.

Pavan Khaitan: The system has integrated labeling and stacking capabilities, which will enhance packaging efficiency, streamline material handling, and improve the overall operational process of our finishing house. Further, paper machine 3 has been shut for the time being for a major rebuild, which will lead to enhanced production capabilities and improved quality in the final product. On the product development front, we successfully produced oil and grease-resistant paper, OGR, for food wrapping and application on our PM2, adding another high-value speciality and sustainable product to our portfolio. On the sustainability front, the company achieved its highest ever quarterly production of 17.28 lakh clonal saplings in our in-house clonal propagation center during the quarter. We also added almost 1,300 acres of social farm forestry, taking the total area under plantation to about 19,650 acres.

Speaker #3: Further, paper machine 3 has been shut down for the time being for a major rebuild, which will lead to enhanced production capabilities and improved quality in the final product.

Speaker #3: On the product development front, we successfully produced oil and grease-resistant (OGR) paper for food and food wrapping applications on our PM2, adding another high-value specialty and sustainable product to our portfolio.

Speaker #3: On the sustainability front, the company achieved its highest-ever quarterly production of 1.728 million clonal saplings in our in-house clonal propagation center during the quarter.

Speaker #3: We also added almost 1,300 acres of social farm forestry, taking the total area under plantation to about 19,650 acres. With that, I would now like to invite our CFO, Vikram Khetan, to share the financial highlights for the period under review.

Pavan Khaitan: With that, I would now like to invite our CFO, Vikram Khaitan, to share the financial highlights for the period under review.

Speaker #4: Thank you, sir, and good afternoon, everyone. Let me now take you through the financial performance for the first quarter of financial year 2027. Despite the macroeconomic challenges, operational income for the quarter is today at INR 304 crore, registering a year-on-year growth of 36%, supported by a 35% year-on-year growth in paper sales volume.

Vikram Kumar Khaitan: Thank you, sir, and good afternoon, everyone. Let me now take you through the financial performance for the first quarter of financial year 2027. Despite the macroeconomic challenges, operational income for the quarter stood at INR 304 crores, registering a year-on-year growth of 36%, supported by a 35% year-on-year growth in paper sales volume. The paper sales volume for the quarter stood at 42,922 metric ton. During the quarter, we were able to command higher NSR in both the domestic and export markets, supported by improved demand. However, the improvement in blended NSR by approximately INR 3,400 per ton was more than offset by an increase in cost of around INR 4,200 per ton on quarter-to-quarter basis, driven by higher raw material, chemical, and fuel prices amid the ongoing West Asia conflict. As a result, EBITDA stood at INR 40 crores, broadly stable year-on-year basis, with EBITDA margin at 13.20%.

Speaker #4: The paper sales volume for the quarter is 42,922 metric tons. During the quarter, we were able to command higher NSR in both the domestic and export markets, supported by improved demand.

Speaker #4: However, the improvement in blended NSR by approximately Rs 3,400 per ton was more than offset by an increase in cost of around Rs 4,200 per ton.

Speaker #4: On a quarter-to-quarter basis, driven by higher raw material, chemical, and fuel prices amid the ongoing West Asia conflict, EBITDA is today at Rs.

Speaker #4: 40 crores, broadly stable year-on-year basis, with EBITDA margin at 13.20%. Profit after tax is today at Rs. 6 crores. With this, we can now begin the question-and-answer session.

Vikram Kumar Khaitan: Profit after tax stood at INR 6 crores. With this, we can now begin the question and answer session.

Speaker #2: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and 1 on their touch-tone telephone.

Operator 3: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, each participant is requested to limit himself or herself to a maximum of two questions. Time permitting, we shall revert for any further questions that you may have that remain unanswered. We take the first question from the line of Jiten Parmar from Aurum Capital. Please go ahead.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, each participant is requested to limit himself or herself to a maximum of two questions. Time permitting, we shall revert for any further questions that you may have that remain unanswered. We take the first question from the line of Jiten Parmar from Aurum Capital. Please go ahead.

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

Speaker #2: Ladies and gentlemen, each participant is requested to limit himself or herself to a maximum of two questions per meeting. We shall revert for any further questions that you may have that remain unanswered.

Speaker #2: We will take the first question from the line of Jithin Parmar from Aurum Capital. Please go ahead.

Speaker #4: Good afternoon, Prabhanji and Vikramji, and the whole Kuantum team. Yes, my question is on the guidance for the current year. Are we maintaining it, or is there new guidance? And what about EBITDA margins?

Jiten Parmar: Good afternoon, Pawanji and Vikramji, and the whole Kuantum team.

Pavan Khaitan: Yes.

Jiten Parmar: My question is on the guidance for current year. Are we maintaining it or what is the new guidance, and what about EBITDA margins? What is it that we think we can achieve?

Speaker #4: What is it that we think we can achieve?

Speaker #3: So, I think the guidance clearly is positive. We are a bit ahead with the commissioning of our last machine in our upgradation program, which is our PM3. That is going to be coming on stream within this month, in about a week or so.

Pavan Khaitan: I think the guidance clearly is positive. We are upbeat that with the commissioning of our last machine on our upgradation program, which is our PM3, that is going to be coming on stream within this month, in about a week or so. With that, having completed the entire upgradation program, we are going to be syncing all our operations and verticals in close coordination with each other, thereby getting the benefits of overall syncing of our operations. And obviously, overall profitability is likely to increase. On our EBITDA margins, I should say that even if things go along the way they are, we should be reaching closer to about at least between 16% to 18% by the year end.

Speaker #3: With that, having completed the entire upgradation program, we are going to be syncing all our operations and verticals in close coordination with each other, thereby getting the benefits of overall syncing of our operations and, obviously, overall profitabilities likely to increase.

Speaker #3: On our EBITDA margins, I should say that even if things go along the way they are, we should be reaching closer to at least between 16% to 18% by the year-end.

Speaker #4: Okay. And what about that? What will it be? I mean, I think major capex is over, so what will be the peak debt, and what will be the debt reduction guidance over the next three years?

Jiten Parmar: Okay. And what about debt? I think major CapEx is over, so what will be the peak debt, and what will be the debt reduction guidance over the next three years?

Speaker #3: So, we said peak debt—we are currently looking at about ₹760 or ₹770 crore maximum. And we have repayments of about ₹170–175 crore for the next two to three years.

Pavan Khaitan: Peak debt, we are currently looking at about INR 760 or INR 770 crores maximum, and we have repayments of about INR 170, INR 175 crores for the next two to three years. By the next three years, we will be at a very manageable level of debt under INR 300 crores. It is going to gradually keep reducing over the next one to three years.

Speaker #3: And by the next three years, we will be at very, very manageable levels of debt—under ₹300 crores. It's going to gradually keep reducing over the next one, two, three years.

Speaker #4: And what about the raw material sources—the split between waste and wood—if you can quantify that?

Jiten Parmar: What about the raw material sources, the split between waste and wood, if you can quantify that?

Speaker #3: So we have a mix of two pulps that we use, which is almost 50-50 percent in content—50 percent is agro pulp, and 50 percent is wood pulp.

Pavan Khaitan: We have a mix of two pulps that we use, which is almost 50/50% in content. 50% is agro pulp, 50% is wood pulp. Sourcing for that is primarily all within the state of Punjab or neighboring states. Raw material sourcing is not an issue for us other than the vagaries of pricing. Sometimes it is wavered, but availability is not an issue at all for us.

Speaker #3: Sourcing for that is primarily all in within the state of Punjab or neighboring states. So raw material sourcing is not an issue for us, other than the vagaries of, sort of, pricing—sometimes it's wavered.

Speaker #3: But availability is not an issue at all for us.

Speaker #4: Perfect. And if you can throw some light on my final question, if you may, please allow. If you can throw some light on what is the situation with imports right now?

Jiten Parmar: Perfect. If you can throw some light on, my final question, if you may please allow. If you can throw some light on what is the situation with imports right now. With yuan depreciating, appreciating so much, what is the situation of imports? Has the import intensity reduced? Price-wise, is there any difference or landed imports are at similar prices or something? If you can throw some more light on this, that will be great.

Speaker #4: Are that you know, with Iran depreciating, appreciating so much, what is the situation of imports? I mean, has the import intensity reduced? And price-wise, is there any difference, or are landed imports at similar prices or something?

Speaker #4: If you can throw some more light on this, that would be great.

Speaker #3: So what we are observing is a diminishing trend in imports, which is a positive for the industry. Largely, it's due to the challenges that the world is witnessing in terms of shipping costs, container availability, and logistics costs.

Pavan Khaitan: What we are observing is a diminishing trend in imports, which is a good positive for the industry. Largely it is the challenge that the world is witnessing in terms of shipping costs, container availability, and logistic costs. I think primary reason is shipping, and that is leading to this situation of diminishing imports into India. Pricing is again, very stable. They are not reducing from last periods. That again is a positive, and I do not see too much competition staring at us from imports of material in the future.

Speaker #3: So, I think the primary reason is shipping, and that is leading to this situation of diminishing imports into India. Pricing is, again, very stable; they are not reducing from last period.

Speaker #3: So that, again, is a positive. And I don't see too much competition staring at us from imports of material in the future.

Speaker #4: Perfect. I wish you all the best. You have gone on a bold program of revamping the whole machinery and also increasing the capacity.

Jiten Parmar: Perfect. I wish you all the best. You have gone on a bold program of revamping the whole machinery and also increasing the capacity, so I wish you all the best. Thank you, sir.

Speaker #4: So I wish you all the best. Thank you so much.

Speaker #3: Thank you. Thank you. Thank you so much.

Pavan Khaitan: Thank you. Thank you so much.

Speaker #2: Thank you. We will take the next question from the line of Madhav Chavar from SKP Securities. Please go ahead.

Operator 3: Thank you. We take the next question from the line of Madhav Jawade from SKP Securities. Please go ahead.

Operator: Thank you. We take the next question from the line of Madhav Jawade from SKP Securities. Please go ahead.

Speaker #5: Hi, sir. Thank you for the opportunity. So, my first question is on the pulp capacity that was about to come. Now, you mentioned that wood capacity has come in, but what about the agro capacity, which is about to come?

Madhav Jawade: Hi, sir. Thank you for the opportunity. My first question is on the pulp capacity that was about to come. You mentioned that wood capacity has come in, but what about the agro capacity which is about to come?

[Analyst] (SKP Securities): Hi, sir. Thank you for the opportunity. My first question is on the pulp capacity that was about to come. You mentioned that wood capacity has come in, but what about the agro capacity which is about to come?

Speaker #3: So our pulping capacities—we are at a level of about 200 tons each for agro and wood. And that is consistent with our paper production capacities as well.

Pavan Khaitan: Our pulping capacities, we are at a level of about 200 tons each of agro and wood, and that is consistent with our even paper production capacity. That is all that we will need to run all our four machines adequately. They are already in place.

Speaker #3: That's all that we will need to run all our four machines adequately. They are already in place. Pulping capacity, I'm thinking, is already in place.

Madhav Jawade: Okay.

[Analyst] (SKP Securities): Okay.

Pavan Khaitan: Pulping capacity.

Madhav Jawade: And-

[Analyst] (SKP Securities): And-

Pavan Khaitan: Pulping, they are already in place.

Speaker #5: Yeah. Oh, okay. And what about the EC clearance? Did you get the EC clearance for the PM3 machine upgradation?

Madhav Jawade: Yeah. Okay. What about the EC clearance? Did you get the EC clearance for the PM3 machine upgradation?

[Analyst] (SKP Securities): Yeah. Okay. What about the EC clearance? Did you get the EC clearance for the PM3 machine upgradation?

Speaker #3: No, that's already been filed, and we are expecting that very, very shortly.

Pavan Khaitan: No, that has already been filed, and we are awaiting that very shortly.

Speaker #5: Okay. And so the raw material cost, for example, chemical cost and all, had gone up quite significantly during the war. So, has the chemical cost corrected, along with any other major chemicals or other raw materials that you use?

Madhav Jawade: Okay. The raw material cost, for example, chemical cost and all, had gone up quite significantly during the war. Has the chemical cost rested along with any other major chemical or other raw material that you use?

[Analyst] (SKP Securities): Okay. The raw material cost, for example, chemical cost and all, had gone up quite significantly during the war. Has the chemical cost rested along with any other major chemical or other raw material that you use?

Speaker #3: So, there was an interesting sort of trend here that we saw. The escalation was primarily due to the West Asia conflict, and as you would reckon, we did see instances of the war being declared as over. We actually saw those prices coming down for a while before they shot up again once the trend of de-escalation and the war was over.

Pavan Khaitan: There was an interesting sort of trend here that we saw. The escalation was primarily due to the West Asia conflict. As you would reckon, we did see instances of the war getting declared as over, and we actually saw those prices coming down for a while before they start shooting up again once the trending of the de-escalation and war was over. They quite remained in tune with the situation of the war. As it currently stands, they are higher than they were in Q4. I guess

Speaker #3: So they have quite remained in tune with the situation of the war. As it currently stands, they are higher than they were in Q4. But I guess they've kind of stabilized at these levels.

Jagdeep Hira: They've kind of stabilized at these levels, and we don't see any further rise in the prices of these chemicals and inputs going forward.

Pavan Khaitan: They've kind of stabilized at these levels, and we don't see any further rise in the prices of these chemicals and inputs going forward.

Speaker #3: And I don't see any further rise in the prices of these chemicals and inputs going forward.

Speaker #5: And, sir, a lot of capex has been done on upgrading the value-added segment of paper, right? So will that help in, let's say, realization per ton and EBITDA per ton?

Madhav Jawade: And sir, so a lot of CapEx has been done on upgrading the value-added segments of the paper. Right. So, will that help in, let's say, realization per ton and EBITDA per ton?

[Analyst] (SKP Securities): And sir, so a lot of CapEx has been done on upgrading the value-added segments of the paper. Right. So, will that help in, let's say, realization per ton and EBITDA per ton?

Speaker #4: Yes, for sure. We have already taken the commercial runs as well. Initially, it was mentioned that we have produced OGR also. And we are looking at the specialty grade where we can get more than 20% EBITDA on that particular quality.

Jagdeep Hira: Yes, for sure. We already have taken the commercial runs also. Initially, it was told that we have produced OGR also, and we are looking on the specialty grade where we can get +20% EBITDA on the particular quality.

Speaker #5: And how much realization can we expect? Incremental realization?

Madhav Jawade: And how much realization can we expect, incremental realization?

[Analyst] (SKP Securities): And how much realization can we expect, incremental realization?

Jagdeep Hira: On the top line?

Speaker #4: On the top line, if we say,

Speaker #5: Yeah, on the top line.

Madhav Jawade: Yeah, on the top line.

[Analyst] (SKP Securities): Yeah, on the top line.

Speaker #4: Yes, we are targeting around 5 to 6 percent initially, moving forward for the next few years. That will serve as a base creation for this year.

Jagdeep Hira: Yeah, we target around 5% to 6% initially, moving forward for the next years. That will be a base creation for this year, and then we will be more moving into a specialty grade of paper.

Speaker #4: And then we'll be moving more into a specialty grade of paper.

Speaker #5: So, right now, last year in Q1, it was around 70 rupees per kg. So you're saying 5 percent from 70 rupees?

Madhav Jawade: So right now, last year was around Q1 was around INR 70 per kg. So you are saying 5% from INR 70?

[Analyst] (SKP Securities): So right now, last year was around Q1 was around INR 70 per kg. So you are saying 5% from INR 70?

Speaker #4: That was on the top line, I said. Five percent will come from the specialty grades of paper.

Jagdeep Hira: That was on the top line, I said. 5% will come from the specialty grades of paper.

Speaker #5: Okay. Okay.

Madhav Jawade: Okay.

[Analyst] (SKP Securities): Okay.

Speaker #4: Because realizing in this market what NSR will be, sustaining is a bit tough. But again, at the EBITDA level on the particular quality we are aiming for, we're talking about 20%.

Jagdeep Hira: Because realizing in this market what NSR will be sustaining is a bit tough.

Jagdeep Hira: But again, the EBITDA level on the particular quality we are aiming above 20%.

Speaker #5: Okay, got it. And one last question: on the raw material side, do you see any price correction in wood and wheat straw?

Madhav Jawade: Okay, got it. One last question. On the raw material side, do you see any price correction on the wood and wheat straw?

[Analyst] (SKP Securities): Okay, got it. One last question. On the raw material side, do you see any price correction on the wood and wheat straw?

Speaker #4: Yeah, wheat straw seems to be coming down. And we see, for the next quarter also, as of now, it's a bit stable or lesser, I would say.

Jagdeep Hira: Yeah. Wheat straw seems to be coming down, and we see the next quarter also. As of now, it is a bit stable or lesser, I would say. Going forward, it will come down.

Speaker #4: But going forward, it will come down, and we have the infrastructure created where we can store the bulk of the agro raw material.

Madhav Jawade: Okay, thank you.

[Analyst] (SKP Securities): Okay, thank you.

Jagdeep Hira: We have the infrastructure created where we can store the bulk of the agro raw material.

Speaker #5: Okay, sir. Thank you. That's it from my end.

Madhav Jawade: Okay, sir. Thank you. That is from my end.

[Analyst] (SKP Securities): Okay, sir. Thank you. That is from my end.

Speaker #4: Thank you.

Jagdeep Hira: Thank you.

Speaker #2: Thank you. We take the next question from the line of Rajesh Bhandari from Nakoda Engineers. Please go ahead.

Operator 3: Thank you. We take the next question from the line of Rajesh Bhandari from Nakoda Engineers. Please go ahead.

Operator: Thank you. We take the next question from the line of Rajesh Bhandari from Nakoda Engineers. Please go ahead.

Speaker #6: Good afternoon, sir.

Rajesh Bhandari: Good afternoon, sir.

Speaker #4: Good afternoon.

Jagdeep Hira: Good afternoon.

Speaker #6: Yeah, Kuantum as such has a very good name in the market, but my only worry from the point of view of the shareholder is that somehow the profits are getting eaten up in terms of interest.

Pavan Khaitan: Yeah. Kuantum as such has a very good name in the market.

Rajesh Bhandari: My only worry from the point of view of a shareholder is that somehow the profits are getting eaten up in terms of interest, and our debt is very, very high. When can we expect that debt reduces and the profit also goes up and interest comes down?

Speaker #6: And that is very, very high. When can we expect that debt reduces and the profit also goes up and interest comes down? And connected with that, what can we expect our turnover by 2028 and 2030?

Jagdeep Hira: Yeah

Pavan Khaitan: Yeah

Rajesh Bhandari: Connected with that, what can we expect our turnover by 2028 and 2030?

Speaker #6: Yeah, sure. The debt will come down gradually in the next two to three years. As the earlier sponsor mentioned, during '26-'27, we have a debt repayment liability of around ₹170 crore.

Jagdeep Hira: Yeah, sure. The debt will come down gradually in next 2 to 3 years. As earlier, Pansir told that during 2026, 2027, we have a debt repayment liability of around INR 170 crore. But in next 2 to 3 years, it will gradually come down, and the peak debt will be around INR 300 to 350 crore in next 3 years.

Speaker #6: But in the next two to three years, it will gradually come down. And the big debt will be around ₹300 to ₹350 crore in the next three years.

Speaker #6: So I would add here that I would add here that this is a step that we took for charting out a growth prospect for ourselves.

Pavan Khaitan: I would add here that this is a step that we took for charting out a growth prospect for ourselves. If you don't take debt, you don't grow. If you want to grow, you have to take debt, and you have to bite that bullet for some time. We have to allow all our investments to bear fruition. Once they start giving the returns, as and how the debt repayment happens, the interest cost will keep coming down and thereby allowing us to retain our profits. Yeah, I agree with you, sir. From INR 1,000 crores, you said it is INR 330 crores. In how many years we can expect?

Speaker #6: If you don't take debt, you don't grow. If you want to grow, you have to take debt, and you have to bite that bullet for some time.

Speaker #6: We have to allow all our investments to bear fruition. And once they start giving returns, as and how the debt repayment happens, the interest cost will keep coming down.

Speaker #6: And thereby allowing us to retain our profits.

Speaker #5: Yeah, I agree with you, sir. From 1,000 crores, you said it is 330 crores. In how many years can we expect this?

Jagdeep Hira: Debt. Every year you take about INR 175 crores reduction in debt.

Speaker #6: Debt.

Speaker #4: So every year, you take about ₹175 crore reduction in debt.

Speaker #5: Okay. Every year 175.

Rajesh Bhandari: Okay, every year 175?

Speaker #4: Yes. And this is the there is a possibility of even prepaying if we are able to generate higher than expected profits for which the situation is positive.

Jagdeep Hira: Yes.

Rajesh Bhandari: Okay.

Jagdeep Hira: There is a possibility of even prepaying if we are able to generate higher than expected profits, for which the situation is positive. We can prepay and get our debt level reduced earlier than later.

Speaker #4: We can prepay and get our debt level reduced earlier rather than later.

Speaker #5: But sir, our yearly turnover is approximately ₹1,200 crore.

Rajesh Bhandari: Our yearly turnover is approximately INR 1,200 crore.

Speaker #4: Yes.

Jagdeep Hira: Yes.

Speaker #5: Out of that, and 18 percent you are saying EBITDA. Will we be able to reduce by ₹175 crore per year?

Rajesh Bhandari: Out of that, 18% you are saying EBITDA.

Jagdeep Hira: Right.

Rajesh Bhandari: Will we be able to reduce by INR 175 crore per year?

Speaker #4: No, 1,200 is the current top line. We are expecting this to grow between 1,400 to 1,500 crores. So even if it's 18 to 20 percent EBITDA, we should be getting an EBITDA of close to 300 crores generating that kind of EBITDA every year.

Jagdeep Hira: No, INR 1,200 is the current top line.

Rajesh Bhandari: Yeah.

Rajesh Bhandari: We are expecting this to grow between INR 1,400 to INR 1,500 crores.

Jagdeep Hira: Even if it is 18% to 20% EBITDA, we should be getting an EBITDA of close to INR 300 crores, generating that kind of EBITDA every year.

Speaker #4: And enough to take care of our debt and interest repayment liability.

Jagdeep Hira: Enough to take care of our debt and interest repayment liability.

Speaker #5: Okay. Fourteen hundred to fifteen hundred crores by next year, or in this year itself?

Rajesh Bhandari: Okay. INR 1,400 to INR 1,500 crore by next year, or in this year itself?

Speaker #4: This next year, for sure, 1,400 to 1,500. This year will be 1,300 crores plus.

Jagdeep Hira: Next year, for sure, INR 1,400 to INR 1,500. This year will be INR 1,300 crores plus.

Speaker #5: Okay. Okay, sir.

Rajesh Bhandari: Okay. Okay, sir.

Speaker #4: Yes.

Jagdeep Hira: Yes.

Speaker #5: Thank you. Thank you.

Rajesh Bhandari: Thank you.

Speaker #4: Okay. Thank you.

Jagdeep Hira: Thank you.

Speaker #2: Thank you. We will take the next question from the line of Anu Padak from Anand Rathi Shares and Stock Brokers Limited. Please go ahead.

Operator 3: Thank you. We take the next question from the line of Anu Padak from Anand Rathi Share and Stock Brokers Limited. Please go ahead.

Operator: Thank you. We take the next question from the line of Anu Padak from Anand Rathi Share and Stock Brokers Limited. Please go ahead.

Speaker #7: Yeah. Good afternoon, sir. So my first question is, our average paper realization is relatively flat on a year-over-year basis in Q1 FY27, despite an 11% increase in Chinese BHKP prices and a weakening of the rupee by another 11% in Q1?

Anu Padak: Yeah. Good afternoon, sir. My first question is, our average paper realization is relatively flat on a year-over-year basis in Q1 FY27, despite an 11% increase in the Chinese BHKP prices and weakening of rupee another 11% in Q1. Can you please provide some color and reason for the same?

Anu Parakh: Yeah. Good afternoon, sir. My first question is, our average paper realization is relatively flat on a year-over-year basis in Q1 FY27, despite an 11% increase in the Chinese BHKP prices and weakening of rupee another 11% in Q1. Can you please provide some color and reason for the same?

Speaker #7: So, can you please provide some color on the reason for—or the reason for the same?

Speaker #4: So I think I would beg to differ that our pricing is flat. Our NSR has increased by about ₹3,400 per ton in Q1, as compared to the related period.

Pavan Khaitan: I think I would beg to differ that our pricing is flat. Our NSR has increased by about INR 3,400 per ton in Q1 as compared to a related period. Does that answer your question?

Speaker #4: Does that answer your question?

Anu Padak: Sir, prices are flat on a year-over-year basis.

Anu Parakh: Sir, prices are flat on a year-over-year basis.

Speaker #7: So, prices are flat on a year-over-year basis.

Speaker #4: So, if you're comparing it with Q4 last year, on a YOY basis, it is around 4,000 more. NSR is 4,000 more on a YOY basis.

Pavan Khaitan: So if you are comparing it with Q4, is it?

Anu Padak: YOY, last year same period.

Anu Parakh: YOY, last year same period.

Pavan Khaitan: Last year same. On YOY basis, it is around 4,000 more. NSR is more 4,000 on YOY basis.

Anu Padak: Okay.

Anu Parakh: Okay.

Anu Padak: Over last quarter, it is 5% plus, and YOY basis, it is around 7% plus.

Vikram Kumar Khaitan: Over last quarter, it is 5% plus, and YOY basis, it is around 7% plus.

Speaker #4: Last quarter is 5 percent plus, and on a year-over-year basis, it's around 7 percent plus.

Speaker #7: Understood. Sir, what should be the ideal paper realization, as per you, assuming the Chinese prices settle at $550 to $600 per ton over the medium term and the rupee remains at the 95 level?

Anu Padak: I understand. Sir, what should be the ideal paper realization as per you, assuming the Chinese price is settling at $550 to $600 per ton over the medium term, and rupee remains at the 95 level?

Anu Parakh: I understand. Sir, what should be the ideal paper realization as per you, assuming the Chinese price is settling at $550 to $600 per ton over the medium term, and rupee remains at the 95 level?

Speaker #4: So, I think every product is not comparable to the kind of imports that the country is doing from China. We have our own product profile.

Pavan Khaitan: I think every product is not comparable to the kind of imports that the country is doing from China. We have our own product profile, and everything cannot be correlated to the Chinese import price per se. The fact is that we have been able to create a big marketing strength for ourselves, locationally, position-wise, our sort of depth of market. Because of that, we are able to realize a better price for ourselves as compared to others in the industry. Currently, we are at about INR 68,000, INR 69,000 per ton level. Ideally, going forward, sensing of how the market is growing and the kind of positive sentiment that we are getting, our price increase is likely to touch and reach about INR 72,000 to INR 75,000 level in the next four to six months.

Speaker #4: And everything cannot be correlated to the Chinese import price per se. The fact is that we've been able to create a big marketing strength for ourselves.

Speaker #4: Locationally, position-wise, our sort of depth of market—so because of that, we are able to realize a better price for ourselves as compared to others in the industry.

Speaker #4: So currently, we are at about 68,000–69,000 rupees per ton level. Ideally, going forward, sensing how the market is growing and the kind of positivity, that positive sentiment that we are getting, our price increase is likely to touch and reach about 72,000 to 75,000 rupees level.

Speaker #4: In the next four to six months.

Speaker #7: Okay. Sir, on the matrix side, the segment has been severely impacted due to the inverted duty structure post-GST rate change last year. Do you see any possibility that the government is likely to do any rectification in the GST rate or provide some form of protection to the domestic mills in the coming months?

Anu Padak: Okay. Sir, on the maplitho side, the segment has been severely impacted due to inverted duty structure post GST rate change last year. Do you see any possibility that the government is likely to do any rectification on the GST rate or provide some form of protection to the domestic mills in the coming months?

Anu Parakh: Okay. Sir, on the maplitho side, the segment has been severely impacted due to inverted duty structure post GST rate change last year. Do you see any possibility that the government is likely to do any rectification on the GST rate or provide some form of protection to the domestic mills in the coming months?

Pavan Khaitan: No, I am afraid the government is quite strong in their conviction by sort of having implemented that. I think the industry has to move forward. The fact is that this implication is only and only if you are producing and selling paper for notebook segment. We, at Kuantum, we have taken a conscious call to reduce, if not eliminate, over a period of time, our foray and marketing of notebook paper. That impact will be negligible for us. Even for the product that we have sold for notebook in the last six months, we have added on the loss of GST that we have had on such production. We have been very clear on charging our customers for the loss that has been incurred by us. In real terms, it is not really a complexity here.

Speaker #4: I'm afraid the government is quite strong in their conviction by having implemented that. I think the industry has to move forward. The fact is that this implication is only if you are producing and selling paper for the notebook segment.

Speaker #4: So, we at Quantum have taken a conscious call to reduce, if not eliminate over a period of time, our foray and marketing of notebook paper.

Speaker #4: So that impact will be negligible for us. And even for the product that we have sold for notebook in the last six months, we have added on the loss of GST that we've had on this such production.

Speaker #4: And we've been very, very clear on charging our customers for the loss that has been incurred by us. So in real terms, it's not really a complexity here.

Speaker #4: And if the fact is that, if we are strong enough to charge our customers the loss that we are incurring, it happens to be a win-win case for both.

Pavan Khaitan: If we are strong enough to charge our customers the loss that we are incurring, it happens to be a win-win case for both.

Speaker #7: Understood. So you said that the realization has gone down to ₹68 per kg. Have the paper prices corrected in Q2 FY27, as the realizations were around ₹71 per kg in Q1?

Anu Padak: Understood. Sir, you said that the realization has gone down to INR 68 per kg. So whether the paper prices have corrected in Q2 FY2027 as the realizations were around INR 71 per kg in Q1?

Anu Parakh: Understood. Sir, you said that the realization has gone down to INR 68 per kg. So whether the paper prices have corrected in Q2 FY2027 as the realizations were around INR 71 per kg in Q1?

Speaker #4: Well, I don't know where you're getting your figures from. I won't say they've gone down to 68. They've come up to 68 from a level of 66 or even 64.

Pavan Khaitan: Well, I don't know where are you getting your figures from. I won't say they've gone down to 68. They've come up to 68 from a level of 66 or even 64.

Operator 2: Okay.

Anu Parakh: Okay.

Speaker #4: So I think some.

Pavan Khaitan: I think some-

Anu Padak: Lastly.

Anu Parakh: Lastly.

Speaker #7: Last year?

Speaker #4: Yes.

Anu Padak: Yes.

Pavan Khaitan: Yes.

Speaker #7: Yeah, last year on the imports, in any country—like the USA, Australia, South Korea—there are import tariffs on paper imports from China and Indonesia.

Anu Padak: Yeah. Lastly, on the imports, many countries like US, Australia, South Korea have import tariffs on paper imports from China and Indonesia. So why have we not yet filed a case with DGFT to initiate any investigation on ADD or CVD on copier or on maplitho paper till date?

Anu Parakh: Yeah. Lastly, on the imports, many countries like US, Australia, South Korea have import tariffs on paper imports from China and Indonesia. So why have we not yet filed a case with DGFT to initiate any investigation on ADD or CVD on copier or on maplitho paper till date?

Speaker #7: So why have we not yet filed the case with DGFT to initiate any investigation on ADD or CVD on copier and maplitho paper till date?

Speaker #4: We have. We have already done that. We are already in close coordination with the government, where our applications for anti-dumping duty and anti-subsidy duty have already been filed.

Pavan Khaitan: We have already done that. We are already in close coordination with the government, where our applications for anti-dumping duty and anti-subsidy duty has already been filed, and it is being keenly being looked at by the government. We are very hopeful that we will get some positive feedback from them and something favorable should be implemented.

Speaker #4: And it is being keenly looked at by the government. We are very hopeful that we will get some positive feedback from them, and something favorable should be implemented.

Anu Padak: Okay, sir. Thank you.

Anu Parakh: Okay, sir. Thank you.

Speaker #4: So, this actually arose, all right.

Anu Padak: This actually arose. All right.

Pavan Khaitan: This actually arose. All right.

Speaker #7: Yes.

Anu Padak: Yes.

Anu Parakh: Yes.

Speaker #2: Thank you. We will take the next question from the line of Apurva Anil Sharma from Raj Capital. Please go ahead.

Operator 3: Thank you. We take the next question from the line of Apurva Anil Sharma from Raas Capital. Please go ahead.

Operator: Thank you. We take the next question from the line of Apurva Anil Sharma from Raas Capital. Please go ahead.

Speaker #6: Hi. Am I audible?

Apurva Sharma: Hi, am I audible?

Speaker #4: Yes, please go ahead.

Pavan Khaitan: Yes, please go ahead.

Speaker #6: Yes, thank you so much, sir, for that question. My first question is in regards to: could you shed a little light on your volume growth for this quarter?

Apurva Sharma: Yes. Thank you so much, sir, for the question. My first question is in regards to, can you throw some little light about your volume growth for this quarter?

Speaker #4: For this quarter—which is Q2 or Q1— which one are you asking?

Pavan Khaitan: For this quarter, which is Q2 or Q1? Which one are you asking?

Speaker #6: Q1. Q1. Q1.

Apurva Sharma: Q1.

Speaker #4: Q1, we've seen growth because, frankly, last year in Q1, we had a shutdown of one of our machines, and that was for upgradation purposes.

Pavan Khaitan: Q1 we have seen a growth because, frankly, last year Q1, we had a shutdown of one of our machines, for upgradation purposes, and that led to a kind of notional loss of production. As against even Q4 of last year, we have increased our production slightly, and that is largely due to efficiency of our machines getting better. We are now with the upgradation of our last fourth machine, which is PM3, which is underway, and that is getting commissioned within this month. We should see a bump up in our production and sales volumes going forward.

Speaker #4: And that led to a kind of notional loss of production, but as against even Q4 of last year, we have increased our production slightly.

Speaker #4: And that is largely due to the efficiency of our machines getting better. We are now upgrading our last, fourth machine, which is PM3, and that process is underway.

Speaker #4: And that is getting commissioned within this month. We should see a bump-up in our production and sales volumes going forward.

Speaker #6: Okay, thank you so much. Sir, another question: I just wanted to understand the landscape about the ADD so far that has been implemented by the government.

Apurva Sharma: Okay. Thank you so much. Sir, another question. I just wanted to understand the landscape about the ADD so far that has been implemented by the government. One on decor paper and one recently on the Virgin Multi-Layer Paperboard. Both these are basis the GSM in the ADD, right? One is from 40 to 130, and the virgin one is from 140 to 450. Going forward, we are working very closely with the government in getting the new set of ADDs. Would the new ADDs cover the GSM that Kuantum Papers is selling right now?

Speaker #6: One on decor paper, and one, recently, on the virgin multi-layer paperboard. Now, both of these are based on the GSM in the ADD, right? One is from 40 to 130, and the virgin one is from 140 to 150.

Speaker #6: Now, going forward, if we are working very closely with the government in getting the new set of ADDs, would the new ADDs cover the GSM that Kuantum is selling right now?

Speaker #4: Oh, yes, for sure. So what we filed is in the writing and printing paper segment, and that clearly covers all GSMs that Kuantum is making.

Pavan Khaitan: Oh, yes, for sure. What we filed is in the writing and printing paper segment, and that clearly covers all GSMs that Kuantum Papers is making. It is covering all GSMs between 40 and 140.

Speaker #4: It is covering all GSMs between 40 and 140.

Speaker #6: Okay. And when and if this thing comes, it stays for a period of five years. Am I right?

Apurva Sharma: Okay. When and if this thing comes, it stays for the time period of 5 years. Am I right?

Speaker #4: That's yes. That's what we're expecting.

Pavan Khaitan: Yes, that's what we're expecting.

Speaker #6: All right. And sir, then last quarter, you had indicated about the realization going back to ₹69,000 to ₹71,000 per ton. Are we still aligned with that?

Apurva Sharma: Okay. And sir, in last quarter, you had indicated about the realization going back to INR 69,000 to INR 71,000 per ton.

Apurva Sharma: Are we still online, aligned with that?

Speaker #4: Yes. Yes, yes. We are maintaining those realizations.

Pavan Khaitan: Yes. We are maintaining those realizations.

Speaker #6: Thank you so much for that question, and all the best.

Apurva Sharma: Thank you so much for the question, and all the best.

Speaker #4: All right. Thank you.

Pavan Khaitan: All right. Thank you.

Speaker #2: Thank you. We take the next question from the line of Arjun Vinay Tambe from AllRiver Crest. Please go ahead.

Operator 3: Thank you. We take the next question from the line of Arjun Vinay Tambe from Auriva Crest. Please go ahead.

Operator: Thank you. We take the next question from the line of Arjun Vinay Tambe from Auriva Crest. Please go ahead.

Speaker #6: Hello. Am I audible?

Arjun Vinay Tambe: Hello, am I audible?

[Analyst]: Hello, am I audible?

Speaker #4: Yes, please.

Pavan Khaitan: Yes, please.

Speaker #6: Hi, sir. So मुझे बस एक ही था कि last concall में आपने guidance दिया था 1,400 to 1,500 FY27 के लिए, और अभी आप बोल रहे हो 1,300 plus.

Arjun Vinay Tambe: Yes, sir. I just had one question. In the last con call, you gave guidance of 1,400 to 1,500 for FY27. Now you are saying 1,300 plus, right?

[Analyst]: Yes, sir. I just had one question. In the last con call, you gave guidance of 1,400 to 1,500 for FY27. Now you are saying 1,300 plus, right?

Speaker #6: Right? So अभी 1,300 plus के हिसाब से अगर EBITDA अगर 18 to 20% भी रखा, तो 240 to 260 crores आ रहा है. All right?

Arjun Vinay Tambe: Now according to 1,300 plus, even if we keep EBITDA at 18% to 20%, it comes to INR 240 crores to INR 260 crores. Correct?

[Analyst]: Now according to 1,300 plus, even if we keep EBITDA at 18% to 20%, it comes to INR 240 crores to INR 260 crores. Correct?

Pavan Khaitan: Correct.

Speaker #6: So, आपने ₹300 crores बोला. And उसमें से फिर ₹175 crores of prepayment would be done. Right? So, वो match नहीं हो रहा. And so, आपने ये concall में guidance revise किया है या क्या हुआ है वो?

Arjun Vinay Tambe: You said INR 300 crores, and out of that INR 175 crores of prepayment would be done, right?

[Analyst]: You said INR 300 crores, and out of that INR 175 crores of prepayment would be done, right?

Arjun Vinay Tambe: That is not matching. Have you revised the guidance in this con call, or what happened? There is a little gap between 1,400, 1,500 and 1,300. Please explain that.

[Analyst]: That is not matching. Have you revised the guidance in this con call, or what happened? There is a little gap between 1,400, 1,500 and 1,300. Please explain that.

Speaker #6: 14, 1,500 और 1,300 में थोड़ा gap है, वो please explain कीजिए.

Speaker #4: What has happened is that the earlier guidance was based on a certain sales realization that we were expecting. Those are not staying at that level.

Pavan Khaitan: What has happened is that the earlier guidance was basis a certain sales realization that we were expecting. Those are not staying at that level. They are running below those expected levels. Even furthermore, EBITDA margins are further getting strained by the increased cost of operation due to the West Asia crisis. Nobody could have imagined a war starting in a part of the world and impacting pricing here in India. But the fact is it is happening. Nobody could have imagined such a situation. All this is collaterals, and which is impacting EBITDA margins at present. But nonetheless, we are looking at figures as they are, and they are conservative figures. We are still ensuring that we take care of all our repayment liabilities on both interest and term loan, even in this very competitive timeline.

Speaker #4: They are running below those expected levels. Furthermore, EBITDA margins are getting further strained by the increased cost of operations due to the West Asia crisis.

Speaker #4: Nobody could have imagined a war starting in a part of the world and impacting pricing here in India. But the fact is, it is happening.

Speaker #4: So, nobody could have imagined such a situation. All this is collateral, and it is impacting EBITDA margins at present. Nonetheless, we are looking at the figures as they are.

Speaker #4: And they are conservative figures. We are still ensuring that we take care of all our repayment liabilities, on both interest and term loan, even in this very, very competitive timeline.

Speaker #6: All right. And one more thing. आपने AI integration के बारे में बोला था आपके production manufacturing process में. And that would be done in around FY28.

Arjun Vinay Tambe: All right. One more thing. You talked about AI integration in your production manufacturing process, and that would be done in around FY28, right?

[Analyst]: All right. One more thing. You talked about AI integration in your production manufacturing process, and that would be done in around FY28, right?

Speaker #6: Right?

Speaker #4: Sure. Sure.

Pavan Khaitan: Sure.

Arjun Vinay Tambe: Is that still in the trajectory?

Speaker #6: So, वो अभी भी trajectory में है? मतलब सब?

[Analyst]: Is that still in the trajectory?

Pavan Khaitan: Yes, that's a continuous process that is continually being looked at, continually being done, executed, and improved upon. That's a long-term kind of contract that we have engaged with our supplier, and that is how, as I mentioned earlier, by March 2028, we will be concluding this exercise and getting the relevant returns.

Speaker #4: Yes, that's a continuous process that is continually being looked at, continually being done, executed, and improved upon. That's a long-term kind of contract that we have engaged with our supplier.

Speaker #4: And that is how, as I mentioned earlier, by March 28 we will be concluding this exercise and getting the relevant returns.

Speaker #6: So, incrementally, what would be the OPEX reduction from it?

Arjun Vinay Tambe: Incrementally, what would be the OpEx reduction from it?

[Analyst]: Incrementally, what would be the OpEx reduction from it?

Speaker #4: We could target between 4 to 5 percent additions or reductions in costs.

Pavan Khaitan: We could target between 4% to 5% additions in or reductions in costs.

Arjun Vinay Tambe: Okay. Just one last question. Your product segmentation. In the last quarter, you had mentioned around 25% to 30% of your entire revenue was contributed by specialty needs.

[Analyst]: Okay. Just one last question. Your product segmentation. In the last quarter, you had mentioned around 25% to 30% of your entire revenue was contributed by specialty needs.

Speaker #6: Alright. Okay. And just one last question—product segmentation. In the last quarter, you had mentioned around 25% to 30% of your entire revenue was contributed by specialty needs.

Speaker #6: Right?

Speaker #4: Right.

Pavan Khaitan: Right.

Speaker #6: So, अभी भी उतना ही contribution है? बड़ा है? कम हुआ है? क्या है?

Arjun Vinay Tambe: अभी भी उतना ही contribution है, बड़ा है, कम हुआ है, क्या हाल है?

[Analyst]: अभी भी उतना ही contribution है, बड़ा है, कम हुआ है, क्या हाल है?

Speaker #4: We are working towards reaching that target right now. Our contribution from specialty paper is just under 20 percent—it's about 18 or 19 percent. But we will surely be making our efforts to reach that level of 30 percent.

Pavan Khaitan: We are working towards reaching that target. Right now our contribution from specialty paper is just under 20%. It is about 18-19%, but we will surely be making our efforts to reach that level of 30%.

Speaker #6: All right. All right. और last week में आपके एक competitor ने results post किए. और उनके EBITDA margins बढ़ गए थे, मतलब year on year.

Arjun Vinay Tambe: All right. Last week आपके एक competitor ने results post किए but उनके EBITDA margins बढ़ गए थे year-on-year और हमारे थोड़े घट गए. What would be the main reason? The West Asia crisis or any other reason?

[Analyst]: All right. Last week आपके एक competitor ने results post किए but उनके EBITDA margins बढ़ गए थे year-on-year और हमारे थोड़े घट गए. What would be the main reason? The West Asia crisis or any other reason?

Speaker #6: और हमारे थोड़े घट गए. So, what would be the main reason? The West Asia crisis? Or any other?

Speaker #4: No. So, I would assume that the West Asia crisis has impacted everybody uniformly. For us, we are located in a state where our raw material input cost has risen a little abnormally.

Pavan Khaitan: No. I would assume that the West Asia crisis has impacted everybody uniformly. For us, we are located in a state where our raw material input cost has risen a little abnormally, and that is impacting only the operators in Punjab, and which is where we are facing a competitive landscape on our procurement of raw material costs. I think over a period of time, we are already seeing a gradual reduction in these costs of procurement, and over a period of time, they should level out.

Speaker #4: And that is impacting only the operators in Punjab, which is where we are facing a competitive landscape in our procurement of raw material costs.

Speaker #4: So but I think over a period of time, we are already seeing a reduction gradual reduction in these cost of procurement. And over a period of time, they should level out.

Speaker #6: Okay, thank you so much. That was all from me, sir. All the best.

Arjun Vinay Tambe: Okay. Thank you so much. That was all from my side. All the best.

[Analyst]: Okay. Thank you so much. That was all from my side. All the best.

Speaker #4: Okay.

Pavan Khaitan: Okay. Thank you.

Speaker #2: Thank you. Participants, if you wish to ask a question, please press star and one. We will take the next question from the line of Moksh Ranka from Auram Capital.

Operator 3: Thank you. Participants, if you wish to ask a question, please press star and one. We take the next question from the line of Moksh Ranka from Aurum Capital. Please go ahead.

Operator: Thank you. Participants, if you wish to ask a question, please press star and one. We take the next question from the line of Moksh Ranka from Aurum Capital. Please go ahead.

Speaker #2: Please go ahead.

Speaker #6: Hello. I wanted to ask, what would be our fleet turnover when all our plants are running, based on current realization? And also, what would be the peak turnover based on realizations we had in, like, '23?

Moksh Ranka: Hello. I wanted to ask, what would be our peak turnover when all our plants are running based on current realization? Also, what would be the peak turnover based on realization we had in FY23?

Speaker #6: 2000 FY 23.

Pavan Khaitan: Well, very extremely interesting question, I must say. On current realizations, we should target between INR 1,400 crore to INR 1,500 crore turnover. Based on realizations of 2023, we will cross INR 1,800 crore.

Speaker #4: Well, very extremely interesting question, I must say. On current realizations, we should target about between 1,400 to 1,500 crore turnover. And based on realizations of '23, we will cross 1,800.

Speaker #6: Okay. And that is based on all your four plants running at peak capacity?

Moksh Ranka: Okay. That is based on all your four plants running at peak capacity?

Speaker #4: Yes.

Pavan Khaitan: Yes.

Speaker #6: Okay, okay. So, FY27, we should be able to run all our plants at full capacity, right?

Moksh Ranka: Okay. So, by FY27, we should be able to run all our plants at full capacity, right?

Speaker #4: Yes. So, post the commissioning of our fourth machine, which is now happening within this month, we will be running our entire plant at peak capacity.

Pavan Khaitan: Yes. Post the commissioning of our fourth machine, which is now happening within this month, we will be running our entire plant at peak capacity.

Speaker #6: Okay. Okay. Okay. That's it from us. Thanks. Thanks a lot.

Moksh Ranka: Okay. That is it from my side. Thanks a lot.

Pavan Khaitan: Yes.

Speaker #4: Thank you.

Operator 3: Thank you. We take the next question from the line of Madhav Jawade from SKP Securities. Please go ahead.

Operator: Thank you. We take the next question from the line of Madhav Jawade from SKP Securities. Please go ahead.

Speaker #2: Thank you. We take the next question from the line of Madhav Javar from SKP Securities. Please go ahead.

Madhav Jawade: Hi, sir. You mentioned earlier in the call that you are targeting-

[Analyst] (SKP Securities): Hi, sir. You mentioned earlier in the call that you are targeting-

Speaker #7: I'm showing also, so you mentioned earlier in the call that you are targeting ₹1,500 crore.

Operator 3: I am sorry to interrupt you there, but your audio is muffled out. Could you please repeat your answer?

Operator: I am sorry to interrupt you there, but your audio is muffled out. Could you please repeat your answer?

Speaker #2: But your audio is muffled. Could you please go ahead and answer?

Speaker #4: Sorry to come again. Go ahead, please.

Madhav Jawade: Sorry. To come again.

Pavan Khaitan: Sorry. To come again.

Arjun Vinay Tambe: Hello.

[Analyst] (SKP Securities): Hello.

Madhav Jawade: Go ahead, please.

Pavan Khaitan: Go ahead, please.

Speaker #7: Yes. So, earlier in the call, you mentioned 15 to 18 percent of EBITDA that you are targeting. When can we expect to reach that kind of EBITDA margin? In which quarter can we expect it?

Arjun Vinay Tambe: Yeah. Earlier in the call, you mentioned 16% to 18% of EBITDA you are targeting. So right now, which quarter can we expect that kind of EBITDA revenue?

[Analyst] (SKP Securities): Yeah. Earlier in the call, you mentioned 16% to 18% of EBITDA you are targeting. So right now, which quarter can we expect that kind of EBITDA revenue?

Speaker #4: I think Q3 onwards, because even in Q2 we are still undergoing expansion and modernization. Some of our machines are closed, and some of our boilers are undergoing maintenance.

Pavan Khaitan: I think Q3 onwards, because even in Q2 we are undergoing expansion, modernization, some of our machines are closed, some of our boilers are getting maintenance. So Q2 would not be the right time. Q3 onwards, we will see the operations at full efficiency, and that is when these kind of margins should be visible.

Speaker #4: So, Q2 would not be the right time. From Q3 onwards, we will see the operations at full efficiency, and that's when these kinds of margins should be visible.

Speaker #7: Okay, that's it from me. Thank you.

Arjun Vinay Tambe: Okay. That is it from my end. Thank you.

[Analyst] (SKP Securities): Okay. That is it from my end. Thank you.

Operator 3: Thank you. We take the next question from the line of Shayan Khan, an individual investor. Please go ahead.

Operator: Thank you. We take the next question from the line of Shayan Khan, an individual investor. Please go ahead.

Speaker #2: Thank you. We will take the next question from the line of Shayan Khan, an individual investor. Please go ahead.

Speaker #7: Hello. Yeah, so I just have one question. Could you help me break down the significant growth in other income this quarter? Specifically, what is segmentally driving that increase?

Shayan Khan: Hello. Yeah, I just have one question. Could you help me break down the significant growth in other income this quarter? What is exactly driving that increase?

Speaker #4: That is due to sale of plantations and escape sales. So, in a way, they are all operational related. All the other income that we generate is as part of the operations.

Pavan Khaitan: It is due to sale of plantations and scrap sales.

Shayan Khan: Okay.

Pavan Khaitan: So in a way, they are all operational related. All the other income that we generate is as part of the operation. If we add that to our EBITDA margin, which it should, we actually get an EBITDA margin of 14.4%.

Speaker #4: And if we add that to our EBITDA margin, which it should, we actually get an EBITDA margin of 14.4%.

Speaker #7: Okay. Understood. Thank you.

Shayan Khan: Okay, understood. Thank you.

Speaker #2: Thank you. Participants who wish to ask a question, please press star and one. We will take the next question from Arjun Vinay Tambe from Auriva Crest.

Operator 3: Thank you. Participants who wish to ask a question, please press star and one. We take the next question from the line of Arjun Vinay Tambe from Auriva Crest. Please go ahead.

Operator: Thank you. Participants who wish to ask a question, please press star and one. We take the next question from the line of Arjun Vinay Tambe from Auriva Crest. Please go ahead.

Speaker #2: Please go ahead.

Speaker #6: Thank you for my chance, sir. Just a ballpark figure — FY29 or FY30 तक, what should be the range of our revenue at peak capacity and at the realizations you expect?

Arjun Vinay Tambe: Thank you for my chance. Sir, just a ballpark figure. FY29 or FY30 tak what should be the range of our revenue at peak capacity and at the realization what you expect?

[Analyst]: Thank you for my chance. Sir, just a ballpark figure. FY29 or FY30 tak what should be the range of our revenue at peak capacity and at the realization what you expect?

Speaker #4: I think a good conservative figure would be about ₹1,500 crores top line and a ₹300 to ₹350 crore EBITDA.

Pavan Khaitan: I think a good conservative figure would be about INR 1,500 crores top line and a INR 300 to 350 crore EBITDA.

Speaker #6: FY 30?

Arjun Vinay Tambe: FY30?

[Analyst]: FY30?

Speaker #4: Yes, as I'm saying, very conservatively. I mean, if the market is helpful and we see an average pricing of about ₹75 per kilo, or ₹75,000 per ton, it could be closer to ₹1,600 or ₹1,650 crores.

Pavan Khaitan: Yes.

Arjun Vinay Tambe: All right.

[Analyst]: All right.

Pavan Khaitan: That's something very conservatively. If the market is helpful and we see an average of pricing of about INR 75 a kilo or INR 75,000 a ton, it could be closer to INR 1,600 or INR 1,650 crores.

Speaker #6: All right. But in the last phone call, you mentioned that by FY28 it will go up to 1,600 or 1,700. And now you are saying that by FY30, 1,500 conservatively.

Arjun Vinay Tambe: All right. Last con call, you mentioned that by FY28 it will go up to 1,600, 1,700. Now you are saying that by FY30, 1,500 conservatively.

[Analyst]: All right. Last con call, you mentioned that by FY28 it will go up to 1,600, 1,700. Now you are saying that by FY30, 1,500 conservatively.

Speaker #6: So, I still stand by that.

Pavan Khaitan: Yes.

Arjun Vinay Tambe: So-

[Analyst]: So-

Speaker #4: Yes, I still stand by that. In our last phone call, we had thought the downturn had petered out and we would see a surge in our pricing, which unfortunately hasn't happened because of a couple of things.

Pavan Khaitan: I still stand by that. In our last con call, we had thought that the downturn had teetered out and we would see a surge in our pricing, which unfortunately hasn't happened because of a couple of things. The environment has not been favorable, but I'm sure by that time, by 2028 or 2029 FY, even now I'm saying that INR 1,500 is a conservative figure based on current pricing. But if the pricing goes up, which it should, being a commodity cycle, and it should see the improvement happening, we could reach between INR 1,600 to INR 1,650 crore as well.

Speaker #4: The environment has not been favorable. But I’m sure by that time, by FY ’28 or ’29—even now, I’m saying that 1,500 is a conservative figure based on current pricing.

Speaker #4: But if the pricing goes up, which it should, being a commodity cycle, and we should see the improvement happening, we could reach between ₹1,600 to ₹1,650 crore as well.

Arjun Vinay Tambe: Do you believe that the industry has bottomed out in terms of input cost, or is it still to bottom out?

Speaker #6: Achha. So, do you believe that the industry has bottomed out in terms of input costs, or is it still to bottom out?

[Analyst]: Do you believe that the industry has bottomed out in terms of input cost, or is it still to bottom out?

Speaker #4: Well, input costs actually are on the rise, so they haven't really bottomed out. The price line, I would say, has bottomed out.

Pavan Khaitan: Well, input costs actually are on a rise, so they haven't really bottomed out. Price line, I would say, has bottomed out. We are

Speaker #6: Bottomed out. Bottomed out. In terms of our margins, like it says, नीचे नहीं जाएगा. And all we can say is an uptick.

Arjun Vinay Tambe: Bottomed out in terms of our margins, like and all we can see is an uptick.

[Analyst]: Bottomed out in terms of our margins, like and all we can see is an uptick.

Speaker #4: Yes, yes. We are positive about that sentiment. We are looking at uptrends happening on our margin, and that should clearly show an upward trend.

Pavan Khaitan: Yes, we are positive about that sentiment. We are looking at uptrends happening on our margin, and that should clearly show an upward trend.

Speaker #6: Okay, thank you so much. That's all from us. All the best.

Arjun Vinay Tambe: Okay. Thank you so much. That is all from my end. All the best.

[Analyst]: Okay. Thank you so much. That is all from my end. All the best.

Speaker #4: Thank you.

Speaker #2: Thank you. Participants, a reminder: if you wish to ask a question, please press star, then one. We will take the next question from the line of Rohan Choksi from Ras Capital.

Pavan Khaitan: Thank you.

Operator 3: Thank you. Participants, a reminder. If you wish to ask a question, please press star and one. We take the next question from the line of Rohan Choksi from Raas Capital. Please go ahead.

Operator: Thank you. Participants, a reminder. If you wish to ask a question, please press star and one. We take the next question from the line of Rohan Choksi from Raas Capital. Please go ahead.

Speaker #2: Please go ahead.

Speaker #6: Hi, sir. Yes, am I audible?

Rohan Choksi: Hi, sir. Yes. Am I audible?

Speaker #4: Yes. Please go ahead.

Pavan Khaitan: Yes, please go ahead.

Speaker #6: Yes, sir. So you cited a 4,200-ton cost increase against a 3,100 MSR gain. So, how much of that 4,200 is from the West Asia war specifically?

Rohan Choksi: Yes, sir. You cited a 4,200 ton cost increase against the 3,400 NSR gain. How much of that 4,000 is from the West Asia war, specifically like fuel, chemical versus wood and all that? Can that gap be passed through?

Speaker #6: Like, do you use chemical versus wood and all that? And can that gap be passed through?

Speaker #4: So I would say about 50-odd percent of the increased cost is due to the West Asia crisis. The rest of it is more local, depending on the state in which we are operating and the cost of raw materials that we are procuring.

Pavan Khaitan: Well, I would say about 50-odd percent of the increased cost is due to the West Asia crisis. Rest of it is more local, depending on the state in which we are operating and the cost of raw materials that we are procuring, that has seen a price rise in this quarter. The question of passing it on, there is no direct correlation between increased costs and increased selling price. But yes, the fact is that out of the 4,200 which has increased as cost, 3,400 has been passed on by way of increase in our pricing, if you see quarter to quarter.

Speaker #4: That has seen a price rise in this quarter. And regarding the question of passing it on, there is no direct correlation between increased costs and increased selling price.

Speaker #4: But yes, the fact is that out of the 4,200—which has increased as cost—3,400 has been passed on by way of increase in our pricing, if you see quarter to quarter.

Speaker #6: Right, sir. Okay. Also, you said in the peak capacity, you said all four plants will be up and running at full capacity.

Rohan Choksi: Right, sir. Okay. You said in the peak capacity, you said all the four plants will be up and running on peak capacity.

Speaker #4: Yes.

Pavan Khaitan: Yes.

Speaker #6: And if we even take the realization, then wouldn't the revenues be much more than 1,600 or even 1,800? Sir, first of all, what is peak capacity?

Rohan Choksi: If we even take the renovation, then wouldn't the revenues be much more than INR 1,600 or even INR 1,800? Sir, first of all, what is peak capacity? Is it 80% or

Speaker #6: Like, is it 80 percent or...?

Speaker #4: No, we are calculating everything at 100 percent. But the fact is that in a paper machine, it cannot operate all 365 days. The normal working in a paper machine, one gets is about 330 days' working, because you have to take machine downtime for changing of consumables—which is wire part, press part, clothings, and so on and so forth.

Pavan Khaitan: No. We are calculating everything at 100%. But the fact is that in a paper machine, it cannot operate all 365 days. The normal working in a paper machine one gets is about 330 days working because you have to take machine downtime for changing of consumables, which is wire part, press part, clothings, and so on and so forth. So normal downtime, which is planned downtime is occurring, and that contributes for about 35 days in a year. So that effectively reduces the output of the operation. Then depending on the GSM that we get for our orders, that helps decide what the actual output is. So taking everything into consideration, that is why I'm saying that on a conservative basis, we should touch levels of INR 1,500 crores top-line revenue.

Speaker #4: So, normal downtime, which is planned downtime, is occurring, and that contributes for about 35 days in a year. So that effectively reduces the output of the operation.

Speaker #4: And then, depending on the GSM that we get for the orders, that helps decide what the actual output is. So, taking everything into consideration, that is why I'm saying that on a conservative basis, we should touch levels of ₹1,500 crore top-line revenue.

Speaker #4: And in case there are reasonable trends in market pricing, which certainly there are signs for, we should touch between ₹1,600 to ₹1,650 crore.

Pavan Khaitan: In case there are reasonable trendings on market pricing, which certainly there are signs for, we should touch between INR 1,600 to INR 1,650 crores.

Speaker #6: Got it, sir. And sir, right now the specialty is 20 to 22 percent. And I was just reading a Christine's report that said that writing and paper demand is only 1 to 3 percent CAGR up to financial year '23.

Rohan Choksi: Got it, sir. And sir, right now the specialty is 20% to 22%. I was just reading a CRISIL report that said that writing and paper demand is only 1% to 3% CAGR up to fiscal year 2030.

Speaker #6: So do we have any plans of increasing into packaging specialty, which is actually growing at 6 to 8 percent? And a lot of them have ADD and support from the government as well.

Rohan Choksi: Do we have any plans of increasing in the packaging specialty, which are actually growing at 6% to 8%? A lot of them have EV and support from the government as well, as opposed to writing in paper.

Speaker #6: As opposed to writing and paper, because it clearly has so much on the capex. Will this move towards specialty and packaging, or should we be doing that?

Pavan Khaitan: Yes, that clearly is a.

Rohan Choksi: Because it spends so much on the CapEx.

Rohan Choksi: Will this move towards specialty and packaging, or should we be doing that?

Speaker #4: Yes, strategically, we are doing that, as our CEO said. We are looking at increasing our specialty content by about 5 percent or so.

Pavan Khaitan: Yes. Strategically, we are doing that. As our CEO said, we are looking at increasing our specialty content by about 5% or so. We will move up that ladder. We are targeting reaching 30% of our production as specialty. But I would say that, having remained in the writing printing segment, we have actually created a good mark for ourselves, so we cannot really write off that entire segment clearly. We have maintained a good, strong position for ourselves. We are producing very effectively and reducing our cost of operation, and have already gained a huge positive mark in the market for all our writing printing products. So it is a legacy which has been born out of years and years of work and cannot just evaporate overnight.

Speaker #4: So, we will move up that ladder. We are targeting reaching 30% of our production as specialty. But I would say that, having remained in the writing and printing segment, we have actually created a good mark for ourselves.

Speaker #4: So, we cannot really write off that entire segment clearly. We have maintained a good, strong position for ourselves. We are producing very effectively and reducing our cost of operation.

Speaker #4: And we have already gained a huge positive mark in the market for all our writing and printing products. So, it's a legacy which has been born out of years and years of work and cannot just evaporate overnight.

Speaker #6: Got it, sir. Yeah, thank you. That's okay.

Rohan Choksi: Got it, sir. Thank you.

Speaker #2: Thank you. We will take the next question from the line of Anant Mundra from My Temple Capital. Please go ahead.

Operator 3: Thank you. We take the next question from the line of Anand Mundra from Mytemple Capital. Please go ahead.

Operator: Thank you. We take the next question from the line of Anand Mundra from Mytemple Capital. Please go ahead.

Speaker #6: Hello. Thank you for the opportunity. Sir, I just wanted to get a sense of how the prices of wheat straw are behaving right now. Have they cooled off?

Anand Mundra: Hello. Thank you for the opportunity. Sir, just wanted to get a sense on how the prices of wheat straw are behaving right now. Have they cooled off?

Anant Mundra: Hello. Thank you for the opportunity. Sir, just wanted to get a sense on how the prices of wheat straw are behaving right now. Have they cooled off?

Speaker #4: Yes, we are clearly seeing signs of them coming down. And I think the impacts will be more visible in the next month or so, because of alternate fodder materials. Please understand that wheat straw is mainly the mainstay—wheat straw is used as fodder for cattle in the state of Punjab and neighboring states.

Pavan Khaitan: Yes. We are clearly seeing signs of them coming down, and I think the impacts will be more visible in the next month or so, because alternate fodder materials. Please understand that the mainstay of wheat straw is used as fodder for cattle in the state of Punjab and neighboring states. Wheat straw being consumed by the pulp and paper industry is a very small part of it. There will be alternate material available as fodder in the shape of rice straw and corn cob. Once those materials come in by, let's say, month of September and October, the force on wheat straw will evaporate, will come down, and that we should see the leveling out of pricing in the commodity of wheat straw.

Speaker #4: Wheat straw being consumed by the pulp and paper industry is a very small part of it. So there will be alternate material available as fodder in the shape of rice straw and corn cobs.

Speaker #4: Once those materials come in by, let's say, the months of September and October, the force on wheat straw will evaporate—will come down. And then we should see the leveling out of pricing in the commodity of wheat straw.

Speaker #6: All right. But as on date, the things I mean, as on date, how things stand, the wheat straw prices are still higher. And they continue to be at the same level as in Q1?

Anand Mundra: All right. But as on date, how things stand, the wheat straw prices are still higher, and they continue to be at the same level as in Q1?

Anant Mundra: All right. But as on date, how things stand, the wheat straw prices are still higher, and they continue to be at the same level as in Q1?

Speaker #4: No, they have come down. We are engaging with our suppliers and aggregators to see how we can moderate these prices, and we have been successful.

Pavan Khaitan: No, they have come down. We are engaging with our suppliers and aggregators to see how we can moderate this pricing, and we have been successful. We are seeing a reduction in wheat straw procurement prices for ourselves in Q2 versus Q1.

Speaker #4: And we are seeing a reduction in wheat straw procurement prices for ourselves in Q2 versus Q1.

Speaker #6: All right. All right. So you mentioned that the price pressure—half of it was due to an increase in local raw material prices. Were you referring specifically to wheat straw only?

Anand Mundra: All right. So you mentioned that the price pressure, half of it was due to increase in local raw material prices. Were you referring to specifically wheat straw only?

Anant Mundra: All right. So you mentioned that the price pressure, half of it was due to increase in local raw material prices. Were you referring to specifically wheat straw only?

Speaker #4: Yes, the local content has been attributed to wheat straw.

Pavan Khaitan: Yes. The local content has been attributed to by wheat straw.

Speaker #6: All right. All right. And sir, one final question was on, how so—while our paper capacity is going up, our file capacity, at least in the presentation, continues to stay at 365 TPD.

Anand Mundra: All right. Sir, one final question was on while our paper capacity is going up, our pulp capacity is, at least in the presentation, it continues to stay at 365 TPD. Is there also going to be an increase there, or we are going to rely on bought out pulp for the increased paper capacity?

Anant Mundra: All right. Sir, one final question was on while our paper capacity is going up, our pulp capacity is, at least in the presentation, it continues to stay at 365 TPD. Is there also going to be an increase there, or we are going to rely on bought out pulp for the increased paper capacity?

Speaker #6: So, is there also going to be an increase there, or are we going to rely on bought-out pulp for the increased paper capacity?

Speaker #4: So pulp capacity will increase to about 410 to 415 tons per day, and that's all that we will require to produce the relevant quantities of paper.

Pavan Khaitan: Pulp capacity will increase to about 410, 415 tons per day, and that's all that we will require to produce the relevant quantities of paper, because almost 150 to 180 tons of filler will be used to manufacture our paper. Rest, about 40 to 50 tons per day will be the imported pulp content, which is actually something which is required for the better stability and a better product quality for our paper. The kind of segment that we are in, it will be very helpful to have that kind of volumes getting used by using imported wood pulp.

Speaker #4: Because almost 150 to 180 tons of filler will be used to manufacture our paper, and the rest—about 40 to 50 tons per day—will be the imported pulp content, which is actually something that is required for better stability and better product quality for our paper and the kind of segment that we are in.

Speaker #4: It will be very helpful to have that kind of volume getting used by using imported wood pulp.

Speaker #6: All right, all right. Got it, sir. That's it from my end. Thank you.

Anand Mundra: All right. Got it, sir. That's it from my end. Thank you.

Anant Mundra: All right. Got it, sir. That's it from my end. Thank you.

Speaker #4: Okay.

Pavan Khaitan: Good.

Speaker #2: Thank you. Participants, if you wish to ask a question, please press star and one. We will take the next question from the line of Utkarsh Nopani from Ananthwati Shares and Stock Brokers Limited.

Operator 3: Thank you. Participants, if you wish to ask a question, please press star and one. We take the next question from the line of Utkarsh Nopani from Anand Rathi Share and Stock Brokers Limited. Please go ahead.

Operator: Thank you. Participants, if you wish to ask a question, please press star and one. We take the next question from the line of Utkarsh Nopani from Anand Rathi Share and Stock Brokers Limited. Please go ahead.

Speaker #2: Please go ahead.

Utkarsh Nopani: Good morning, sir. My first question is regarding the paper price movement in the September quarter. We believe that September quarter is a seasonally big quarter for the printing and writing paper segment. Just wanted a sense from you whether the industry has seen any correction in the paper prices in this quarter versus June quarter or any discounts have gone up in September quarter period.

Utkarsh Nopany: Good morning, sir. My first question is regarding the paper price movement in the September quarter. We believe that September quarter is a seasonally big quarter for the printing and writing paper segment. Just wanted a sense from you whether the industry has seen any correction in the paper prices in this quarter versus June quarter or any discounts have gone up in September quarter period.

Speaker #6: Hello. Good afternoon, sir. My first question is regarding the paper price movement in the September quarter. We believe that the September quarter is a seasonally strong quarter for the printing and writing paper segment.

Speaker #6: So, just wanted a sense from you whether the industry has seen any correction in paper prices in this quarter versus the June quarter, or if any discounts have gone up in the September quarter period?

Speaker #4: So I would like to sort of slightly make another statement that September is not a good quarter for the paper industry. September, in fact, the Q2 is amongst the leanest part of the years the leanest quarter for the industry.

Pavan Khaitan: Well, I would like to sort of slightly make another statement that September is not a good quarter for the paper industry. September, in fact, the Q2 is amongst the leanest part of the years, the leanest quarter for the industry. It's only post September, which is October onwards, that the industry starts looking up as it starts preparing for the new education year of the next financial year. But having said that, our pricing has remained stable. We haven't seen any downward impact on pricing of our product, and it's in good stead for us.

Speaker #4: It's only post-September, which is October onwards, that the industry starts looking up as it starts preparing for the new education year of the next financial year.

Speaker #4: But having said that, our pricing has remained stable. We haven't seen any downward impact on the pricing of our product, and it's in good stead for us.

Utkarsh Nopani: Okay. The prices have remained flat on a Q1Q basis despite a weak demand in the September quarter. Is that the correct understanding?

Utkarsh Nopany: Okay. The prices have remained flat on a Q1Q basis despite a weak demand in the September quarter. Is that the correct understanding?

Speaker #6: Okay. So the prices have remained flat on a Q1, Q2 basis, despite weak demand in the September quarter. Is that the correct understanding?

Speaker #6: Okay. And sir, if you can give some sense of what would be the imported paper price of copier and Maplitho near the port area at present, if you can give some sense?

Pavan Khaitan: Yes.

Utkarsh Nopani: Okay.

Utkarsh Nopany: Okay.

Pavan Khaitan: Yes.

Utkarsh Nopani: And sir, if you can give some sense of what will be the imported paper price of copier and maplitho near port area at present, if you can give some sense.

Utkarsh Nopany: And sir, if you can give some sense of what will be the imported paper price of copier and maplitho near port area at present, if you can give some sense.

Speaker #4: So imported prices are currently trending between $610 and $620 per ton.

Pavan Khaitan: Sir, imported price, we are currently seeing trending between $610 and $620 per ton.

Speaker #6: Okay. And sir, yes, sir.

Utkarsh Nopani: Okay. And sir,

Utkarsh Nopany: Okay. And sir,

Pavan Khaitan: Volumes.

Utkarsh Nopani: Yes, sir. Sorry.

Utkarsh Nopany: Yes, sir. Sorry.

Speaker #4: The volumes are not large enough to create any kind of negative impact.

Pavan Khaitan: Volumes are not large enough to create any kind of negative impact.

Speaker #6: And sir, what has been the change in the timber price in Q1, on both Q1, Q2, and Q5 basis for you? And what would be your outlook for timber price over the next, say, 12 to 18 month period?

Utkarsh Nopani: And sir, what has been the change in the timber price in Q1 on both Q1Q and year-over-year basis for you and what would be your outlook for timber price over the next 12 to 18-month period?

Utkarsh Nopany: And sir, what has been the change in the timber price in Q1 on both Q1Q and year-over-year basis for you and what would be your outlook for timber price over the next 12 to 18-month period?

Speaker #4: So, I think we have a positive trend on timber prices, as in, they are largely remaining stable, if not reducing by about 5 to 6 percent.

Pavan Khaitan: I think we have a positive trend on timber price, as in they are largely remaining stable, if not reducing by about 5% to 6%. That is what we see going forward also with the kind of social forestry programs even that we are conducting. We are helping regenerate and regrow the availability of timber in our area through our clonal saplings initiative that we are doing. So are we seeing that even other players are doing similar instances and helping grow the timber availability in our area.

Speaker #4: And that is what we see going forward also, with the kind of social forestry programs—even that we are conducting—we are helping regenerate and regrow the availability of timber in our area.

Speaker #4: Through our clonal saplings initiative that we are doing, we are seeing that even other players are doing similar initiatives and helping grow the timber availability in our area.

Speaker #6: Okay, so sir, timber prices are not likely to correct, say, over the medium term. They are likely to remain stable only.

Utkarsh Nopani: In case of timber, prices are not likely to correct. Say, over medium term, it is likely to remain stable only?

Utkarsh Nopany: In case of timber, prices are not likely to correct. Say, over medium term, it is likely to remain stable only?

Speaker #4: I think yes. This is the kind of price line, give or take a few percentage points here or there. This is the kind of price line that we see going forward.

Pavan Khaitan: I think yes, this is the kind of price line, give or take a few percentage points here or there. This is the kind of price line that we see going forward because handling costs, labor costs, transportation costs, that is something which is increasing. So even if the basic price of timber reduces, which it will, it will be offset by increased labor and transportation costs.

Speaker #4: Because handling costs, labor costs, transportation costs, that is something which is increasing. So even if the basic price of timber reduces, which it will, it will be offset by increased labor and transportation costs.

Speaker #6: Okay. And sir, lastly, how is the paper inventory in the channel, that is, with the dealer? Is it at a normal level, below normal, or above normal at the moment?

Utkarsh Nopani: Okay. Lastly, how would be the paper inventory in the channel, that is with dealers, is it at normal level, below normal, or above normal level at the moment?

Utkarsh Nopany: Okay. Lastly, how would be the paper inventory in the channel, that is with dealers, is it at normal level, below normal, or above normal level at the moment?

Speaker #4: So, my personal opinion is that there is a slack there. The volumes being stored by dealers are minimal now. Pipelines are relatively empty.

Pavan Khaitan: My personal opinion is that there is a slack there. The volumes as being stored by dealers is minimal now. Pipelines are relatively empty which suggest that there is likely going to be a surge towards a surge of demand in paper and which is likely to impact our pricing also positively.

Speaker #4: And which suggests that there is likely going to be a surge towards a surge of demand in paper, and which is likely to impact our pricing also positively.

Utkarsh Nopani: Okay. Thanks a lot, sir.

Utkarsh Nopany: Okay. Thanks a lot, sir.

Speaker #6: Okay. Thanks a lot, sir.

Speaker #4: Yeah. Thank you.

Pavan Khaitan: Yeah. Thank you.

Speaker #2: Thank you. We will take the next question from the line of Arjun Vinay Tambe from Auriva Crest. Please go ahead.

Operator 3: Thank you. We take the next question from the line of Arjun Vinay Tambe from Auriva Crest. Please go ahead.

Operator: Thank you. We take the next question from the line of Arjun Vinay Tambe from Auriva Crest. Please go ahead.

Speaker #5: Hi, sir. Last time I mentioned that you are coming up with two seedlings, P29 and E2. So, would you please just shed some light on that?

Arjun Vinay Tambe: Hi, sir. Last conference mention you had that you are coming up with two seedlings, P29 and E2. Would you please just shed some light on that? A follow up on that is, how would that incrementally affect our P&L statement?

[Analyst]: Hi, sir. Last conference mention you had that you are coming up with two seedlings, P29 and E2. Would you please just shed some light on that? A follow up on that is, how would that incrementally affect our P&L statement?

Speaker #5: And a follow-up on that is, how would that incrementally affect our P&L statement?

Speaker #4: So we are looking at these high-yielding, high-growth varieties of saplings, and we are seeing an encouraging trend in terms of offtake. The fact is that we are able to sell whatever saplings we create.

Pavan Khaitan: We are looking at these high-yielding, high-growth varieties of saplings, and we are seeing an encouraging trend in terms of offtake. The fact is that we are being able to sell whatever saplings we create, and it is seeing an encouraging trend. In fact, our target is from the current level of about 40 lakh saplings every year. We are planning to achieve 1 crore saplings every year in the next three to four years. It is on an encouraging and growth path, and we see that getting established very positively for us.

Speaker #4: And it is seeing an encouraging trend. In fact, our target is to increase from the current level of about 40-odd lakh saplings every year.

Speaker #4: We are planning to achieve planting one crore saplings every year over the next three to four years, so it's on an encouraging and growth path.

Speaker #4: And we see that getting established very, very positively for us.

Speaker #5: Okay, that's great. But incrementally, हमारे P&L में how would that affect? So?

Arjun Vinay Tambe: Okay. That is great. But incrementally in our P&L, how would that affect?

[Analyst]: Okay. That is great. But incrementally in our P&L, how would that affect?

Pavan Khaitan: Yes, it is going to add to the other income or lateral income for us. But we do not really want to budget that too much because our mainstay is paper. Whatever comes through that is going to be an added bonus and

Speaker #4: Yes, it's going to add to the sort of other income or sort of lateral income for us. But we don't really want to budget that too much because our mainstay is paper.

Speaker #4: Whatever comes through, that is going to be an added bonus. And—

Speaker #3: I will add to that. Just for us, we don't look at it as a revenue stream per se. The idea is to grow seeds of social farm forestry.

Prachi Sharma: I will just add to that. For us, we do not look at it as a revenue stream per se. The idea is to grow seeds of social farm forestry.

Speaker #3: So, what it really will help us with in the future is it will help us reduce the cost of procurement of wood. We should not look at it as a top-line item.

Prachi Sharma: All right.

Prachi Sharma: What it really will help us in the future is it will help us reduce the cost of procurement of wood. We should not look at it as the top-line item, but something that will help us secure our wood requirement in the future. When supply goes up and we become wood positive, that means that our overall cost of procurement of wood will go down. It is a future-looking sustainability exercise rather than a pure revenue play right now.

Speaker #3: But something that will help us secure our wood requirement in the future. And when supply goes up and we become wood positive, that means our overall cost of procurement of wood will go down.

Speaker #3: So, it's a future-looking sustainability exercise rather than a pure revenue play right now.

Speaker #5: All right, all right. Amazing. Thank you so much.

Arjun Vinay Tambe: All right. Amazing. Thank you so much.

[Analyst]: All right. Amazing. Thank you so much.

Speaker #2: Thank you. That was the last question in the queue. As there are no further questions, I would now like to hand the conference over to Mr. Pawan Kaithan for closing remarks.

Operator 3: Thank you. That was the last question in the queue. As there are no further questions, I would now like to hand the conference over to Mr. Pawan Khaitan for closing remarks.

Operator: Thank you. That was the last question in the queue. As there are no further questions, I would now like to hand the conference over to Mr. Pawan Khaitan for closing remarks.

Speaker #4: Thank you all for participating in this earnings conference call. I hope we were able to answer your questions satisfactorily and, at the same time, offer insights into our business.

Pavan Khaitan: Thank you all for participating in this earnings conference call. I hope we were able to answer your questions satisfactorily and at the same time offer insights into our business. If you have any further questions or would like to know more about the company, please reach out to our investor relations managers at Barwym Advisors. Thank you and wishing you all a great day ahead.

Speaker #4: If you have any further questions or would like to know more about the company, please reach out to our Investor Relations Managers at Valorum Advisors.

Speaker #4: Thank you, and wishing you all a great day ahead.

Speaker #2: Thank you, sir. On behalf of SKP Securities Limited, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.

Operator 3: Thank you, sir. On behalf of SKP Securities Limited, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your line.

Operator: Thank you, sir. On behalf of SKP Securities Limited, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your line.

Prachi Sharma: Thank you.

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