Thank you. Good afternoon, everyone, and a warm welcome to you all.

My name is Purvangi Jain from Valorem Advisors. We represent the Investor Relations of Apcotex Industries Limited.

On behalf of the company, I would like to thank you all for participating in the company's earnings call for the third quarter and nine months of the financial year 2026. Before we begin, a quick cautionary statement.

Some of the statements made in today's concall may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated.

Such statements are based on management's belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions.

The purpose of today's earnings conference call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. Now, I would like to introduce you to the management participating with us in today's earnings call and hand it over to them for their opening remarks.

We have with us Mr. Abhiraj Choksey, Vice Chairman and Managing Director, and Mr.

Vivek Thakur, Chief Financial Officer. Without any delay, I now would like to hand the call over to Mr.

Vivek Thakur for his opening remarks. Thank you, and over to you, sir.

Thank you, Purvangi. Good afternoon, everyone.

It is a pleasure to welcome you all to the earnings conference call for the third quarter and nine months of the financial year 2026. I hope you all had an opportunity to review the financial statements and earning presentation, which have been circulated and uploaded on our website and the stock exchange.

Let me provide you with a brief overview of the financial and operational highlights for the third quarter and nine months. Beginning with the quarter, our total volumes have grown 10% year-on-year.

However, the operating revenue stood at INR 332 crores, which is a decline of 7% year-on-year. Despite the volumes growing 10%, the decline in revenue is because of the overall fall in raw material and consequently finished goods prices.

Operating EBITDA for the quarter increased significantly to INR 44 crores. This compared to 27 crores in quarter three of FY25 represents a very strong year-on-year growth of 61%.

This growth is driven by higher volumes, improved margins, and operational efficiency. The EBITDA margin expanded to 13.12%.

Profit after tax for the quarter was 22 crores, which was up 91% year-on-year. The PAT margin stood at 6.7%.

This reflects very strong profitability and operational efficiency. This quarter we also had an exceptional item, which relates to one-time provision of 4.8 crores in accordance with the new wage code notifications.

We are also pleased to inform that the company continues to remain net cash positive as of 31st December 2025. This demonstrates sustained financial discipline and a good cash generation.

The board has also approved an interim dividend of INR 2.50 per equity share, underscoring our commitment to shareholder returns. Update on anti-dumping duty: if you recall, during September quarter, the Directorate General of Trade Remedies, DGTR, had issued final findings on anti-dumping duty case.

The duty notification from Finance Ministry was expected in December '25. This, however, is not yet notified.

We have started implementation on all previously sanctioned projects for Rs 210 crores. Now coming to the nine months number, the company achieved its highest-ever sales volumes, up 15% year-on-year, and highest-ever export volumes, up 21% year-on-year, which reflects robust success in both domestic and international markets.

The operating revenue stood at 1,044 crores, broadly stable year-on-year, while operating EBITDA has grown 42% year-on-year to 123 crores. The EBITDA margin for this nine-month period is 11.75%.

This was supported by volume growth, better margins, and higher capacity utilization. Profit after tax for the nine months increased by 79% year-on-year to 67 crores.

Profit after tax margin is 6.39%. During this period, company reduced debt by around 94 crores, which highlights very strong cash generation and good financial discipline.

The performance demonstrates the effectiveness of our strategy, which is focused on volume-led growth, margin expansion, and operational efficiency. We are also proud to share that the company has received CII award for top 100 most innovative companies.

This reaffirms our commitment to innovation, technology development, and self-reliance. With this, now I open the floor for question-and-answer session.

Thank you.

Thank you, sir, for the opportunity. Just a couple of questions.

Sir, during this quarter, we have seen overall commodity chemical companies quite struggling because of falling prices of raw materials like styrene, acrylonitrile. Most companies are factoring inventory losses.

On the contrary, sir, our numbers look better. Prices although have declined, but there is more steep decline in prices of raw materials, contributing to EBITDA.

Just want to know how these numbers are shaping up and what are the benefits we have taken in raw material, which has improved your EBITDA on sequential and on Y-o-Y basis.

Yeah. Thank you.

Thanks, Aditya. This is Abhiraj Choksey.

Thank you, everyone, for joining. To answer your question, Aditya, it has been a challenging quarter, and we have also taken a hit on raw material pricing because of the drop.

Of course, things are changing now. I would say December, Jan onwards, because of the oil price increases and the rupee depreciation, again, prices sort of started moving up quite sharply, but I would say that started towards the end of last quarter, meaning this Q3.

I think we have managed it well in spite of some losses due to these sharp fall in prices at the beginning or first half of the quarter. Our team has managed quite well, and we have managed to hold our prices and taken some advantage of the drop in raw materials, so that's helped us.

As you can see, that in spite of all of that, our operating EBITDA has been better this quarter than, I would say, the last six, seven, eight quarters probably.

Sir, just a follow-up onto this. The main contributor of your EBITDA in this quarter would be the nitrile latex, because earlier that segment was not able to contribute on EBITDA, and now how is the movement in prices and what contribution in EBITDA, or is there any other segment which is contributing like your synthetic latex, any other segment, NBR, which is contributing to EBITDA?

Yeah. Look, as the volumes go up, as I've said before, in our kind of business, as the volumes go up, obviously contribution goes up in terms of total contribution, not percentage, I'm saying.

Of course, in this case, in this quarter, even the percentage has gone up. That automatically increases EBITDA as well.

Besides nitrile latex, which definitely has seen a turnaround in the last six months, not to the extent that we would have hoped, or it's not pre-COVID levels yet, but certainly better than the last couple of years. In addition to that, I think we also had a lot of excess capacity created by us and some of our competitors, or one specific competitor in India.

The paper segment also the margins were very muted for the previous couple of years, I would say, and I would say almost unhealthy levels. They have gone back to sort of reasonably okay levels.

Paper has also helped. To some extent, one or two other segments like construction also has helped.

I think more about rubber, the rubber segment also we have seen a better improvement in margins because we are running at full capacity there. I think as capacity utilization has gone up, we have tried to extract maximum margins.

Customer mix has improved, product mix has improved, all these levers come into play when capacity utilization is sort of at high levels. I would say it's a bunch of things, it's not just one thing.

Sorry, it's a long-winded answer, I know, but it's been a bunch of things along with some of the cost-saving measures that we have taken. Everything is sort of coming together, and it's looking reasonably good this quarter, where we have had EBITDA margins of about 13%.

Got it. Sir, the second question, sir, I remember, sir, one, two years back, you had mentioned the sustainable EBITDA margins could be around 12%, 13%.

Now, in this quarter, we have achieved this to 13%, and you are saying paper segment, construction are still struggling. Suppose if that segment comes back in terms of demand, meaningful come back in demand, do you see further improvement in margins from here on, or we are standing at the peak?

No, I didn't say they were struggling. I think I said that they were struggling, they have done better now this quarter, especially paper is one I'd want to call out.

I think that as volumes go further up, In the next one year, we have capacity utilization, automatically more volume gets added, more contribution gets added, automatically EBITDA goes up, and EBITDA margins will also go up. I think there is still some leeway, of course.

There is a lot of uncertainty in the world, as you can see, and I think we have managed it quite well so far. Of course, in the short term, there can be issues of suddenly runaway prices of raw materials, and certain things could happen in the short term, but as I've said before, that anywhere between 13% to 16%, 12% to 16% is we could margins for us, and I think we'll try and endeavor to do a little bit better than this quarter as well.

Sir, just one last question.

Let him finish one last question, and then we can move on to the next caller. Sorry, Aditya, but we want to give everyone a chance, so.

Yes, sir, thank you

so much.

Yes, sir, my question was on to the anti-dumping duty. You had mentioned that December '25, the government was to notify for the duty.

Sir, we have seen in other chemicals also, whether it is rubber chemicals, soda ash, the Finance Ministry has not imposed the anti-dumping duty, but the DGTR has. In our case also, there is a delay.

What is your opinion, whether this would be not imposed now, and if it is not imposed, what happens to our expansion plans of NBR?

I kind of mentioned this last time, that we had asked the government for this anti-dumping duty because we felt that the Indian industry needed to be supported. We are the only manufacturers of NBR.

We have not filed any anti-dumping petition for any other products of ours where we have local competition. In this case, we're the only manufacturers of NBR.

If we cannot sustain this plant, India will have no manufacturing of NBR, which I think is a very important synthetic rubber for all several segments, including auto, agri, gas, hoses, several segments, industrial products. We wanted some help from the government, and, of course, the DGTR did agree with us on most fronts, and on several countries, the anti-dumping duty was imposed or was recommended, rather, but has not been notified by the Finance Ministry.

Our expansion plans continue nonetheless. We have found an innovative way to expand our volumes by almost 80%, 90% in a much lower capex amount than what we had initially envisaged two years ago.

The reason why we didn't do it two years ago is because at that time, we were thinking it'd be 200, 250 crores. Now we are able to do it for maybe 130, 140 crores.

We're going to do it for much lower, and we think the ROCEs and the margins even currently, without anti-dumping, will support that. We would have hoped that the government would have supported us further, but the expansion plans continue nonetheless.

To answer your question, I don't know what's going to happen, honestly. We are still, along with the rest of the industry, as you said, it's not just been us, but I would say a majority, about 80% to 90% of the cases in the last three months, have not been notified yet.

We don't know whether that means an outright rejection, we don't know if it's a delay. We do not have communication yet from the Finance Ministry, and we're trying to work through it.

Got it. Thank you, sir.

Thank you.

Thank you.

Are you able to hear me now?

Okay. I'm just getting up.

Now are you able to hear me?

No, first thing I wanted to know about the wind energy. You had invested about a couple of years back, sir, in wind energy.

How is your finance? Is it paying off, that investment?

Or you are able to check out what is the benefit? How much have you financial benefits out of this wind energy project?

You had invested in some wind energy. What is the status, sir, financially is?

I'm not sure what you're referring to, but we have one windmill, which is a small percentage of our total consumption, which is a captive windmill, where we get credit in our Maharashtra factory. That's in Maharashtra, the windmill, of course.

That was more than a decade ago. If you're referring to that, I think maybe about

12 No, I'm not referring to that. I'm referring to about three, four years ago, there was some company, wind energy company, in which you had invested about 3 crores or so.

No, not three, four years ago, this was announced only a couple of quarters ago, where we had taken board approval to invest. That investment will be completed by the end of this financial year, and we should start receiving the credits, that is in Gujarat.

Yes, you're right, that's about 3 and 1/2 crore investment, and we should receive the credits starting from sometime early next year. The exact date is not out yet.

That's not yet started.

Okay. A second thing I wanted to know, your expansion plan, you had said in the last quarter of 2026-2027, you'll be completing your expansion plan, and with that, the turnover would increase around 200 crores.

What is the status of progress? Is it on time, online, or delayed?

We have started the project. Yes, our endeavor is to complete it by the end of the next financial year, which is FY27.

We expect sometime between March, April of the year 2027, around that time. We have three or four three, four different projects ongoing, they will start commissioning slowly from the end of this year to maybe April of next year.

That's on track. We have already started the investment cycle, and the planning, some of the long-lead-item POs have all been done.

Just to correct you, it's not going to be about 200 crores, it's likely to be around 550 to 600 crores that will be added to the top line.

Oh, good. Very well.

Best of luck. Thanks.

My questions are over. I hope in 26-27, the turnover will touch 2,000 crores.

Are you expecting that in 26-27?

Unlikely, honestly speaking, unlikely, because we don't have capacity, and if the prices remain where they are currently, I don't think we'll reach 2,000 crores, but we'll definitely do better than this year, will continue to grow.

Thank you.

Hi, Abhiraj, am I audible?

My question, Abhiraj, there was in the last con-call, last year

Sorry, I just

Is

Yeah. Abhiraj, in the last year calls, there was a duty that US had imposed on Chinese gloves for 100%.

It was supposed to happen two times, it was 50% last year and 50% was supposed to happen in January this year. Has that gone through?

Yes, I believe that's now in place. Yes, it's been imposed from January '26.

Okay. What's our utilization in our nitrile latex plant right now?

I would say for the YTD, we are at about 70%, 75%, around that much. The imposition of Chinese duty has definitely helped some of our customers in Southeast Asia and South Asia, and therefore we can see that our utilization rates have also gone up.

We've continued to do that, and I think by next year, we'll be at sort of full utilization. We'll be at full utilization run rate at some point next year, yeah.

Okay. Our clients primarily are Malaysians, or have we added any other new clients as well from any other new

No, all over Southeast Asia. I would say Malaysia, Thailand, Indonesia, Vietnam, Sri Lanka, India.

India also has now quite a few glove manufacturers that have increased their capacities and are doing reasonably well. All over Southeast Asia and South Asia.

Bangladesh as well has one or two players, so.

That's great to hear.

We're also exporting to Turkey. I would say six or seven countries mainly.

Great to hear. Sir, my next question was that post this new expansion at Valia, would we be left with spare land for further expansion, or if in future we might have to then go for a new greenfield with land?

I think we will have some more land, depending on what we want to expand in. We will have some spare land.

Okay. I have one other question.

Can I ask that one as well?

Sure, go ahead.

Yeah. I was reading on a product called super absorbent polymers, which is found in powdered form, used in basically female hygiene products.

In our emulsion polymer chemistry, does that product fit in, or this is something totally different from what we do?

I think it's completely different from what we do. I know it's been a product that's been of interest to many people, but yeah, it's a different from what we do.

Means in future, probably can we go into this product? Is there

We have not evaluated in detail, but technology-wise, it's quite far from what we do. Now that you mention it, I'll look into it again.

Not in our chemistry probably right now.

Yeah. Oh, thanks.

Thank you.

Thank you very much.

Hello, am I audible?

Yes. Go ahead, Mr.

Singh. Yes, you're audible.

Abhiraj, any views on the raw material security that you might be looking in the future?

If you can expand on that, what do you mean? Sorry, I didn't understand.

Actually, the business is quite volatile because of the raw materials prices are going up and down. Any views or any efforts by the company to get the raw material security or backward or forward integration?

Okay. See, backward integration, we are not able to do with our major raw materials because they are petrochemicals, which are part of sort of big petrochemical plants or refining plants.

As far as security is concerned in general, there is for all our raw materials, even though styrene and acrylonitrile are not available in India currently, there is imports coming in from countries close by. While there can be some short-term hitches, like currently we are facing that in styrene, where a couple of plants, large plants that supply into India, have gone down together.

One was a planned shutdown, one is an unplanned shutdown, there are some shortages, but short-term shortages are there, but otherwise, most of these raw materials that we have have enough capacity for our requirements, and in general, long-term, we don't expect any issue. There can be short-term issues as far as security is concerned, security of raw materials.

The other question you asked is on raw material price volatility. Now, that's here to stay, that's been going on for now 15, 20 years.

I joined the business more than 20 years ago, and I've seen many cycles where prices have been from plus, minus, 100%. That we have continued to manage, and we manage it quite well.

We're able to pass along the prices if the raw material prices go up, and we are also forced to sometimes reduce our prices when prices come down drastically. That's part of the game, and quarter-on-quarter, those kinds of pluses and minuses do happen in margin.

Okay. Any views on Apcobuild?

No, continues to do okay. This year has been more challenging for us because we had a few years of good growth.

It's still a small part of our business, as I continue to say every time. This year has been a little bit more challenging for us.

I think a lot of competition has also come into the construction chemicals segment recently. We are in a few geographies, the growth hasn't been as great as previously, but we continue to sort of push through it and focus on the margins there, and there we are backward integrated into the polymers, so that's where it's the additional margin that we get by supplying directly to a few regions in Western and Central India, so that's what we're focusing on.

Okay. Thanks, thanks a lot.

Hi. Thanks for the opportunity, sir, and congratulations, great set.

Sir, I wanted to get a qualitative outlook on different industries that we are supplying our products, like you mentioned paper is coming back, and so what's your outlook on other industries, maybe nitrile latex, glove suppliers, or whatever else where we supply our products?

I think, see, the paper industry is still going through a tough time, because the Indian paper industry is facing a lot of dumping from what I understand. Their margins are under pressure compared to the last couple of years is what I understand from our customers.

What I meant was that our latex margins, which were very low, have improved a bit because our capacity utilization has gone up, and the extra capacities that were created at the same time are now at a higher capacity utilization level. That's what I meant.

Rest, construction continues to boom in India for us. Carpet and textiles has been one industry that actually been a degrowth for us.

I should have mentioned that earlier, it's a good question. Carpet, textiles, and tyre, all three industries, we have seen a slight degrowth in volumes in this last quarter, and I think even for the nine months period, it's flat, mainly because of these tariffs from the US.

A lot of the carpet manufacturers, not only in India, but in the Middle East, have also been affected by these US tariffs and the uncertainty around them. Similarly with textiles and tyres, we see the same thing.

Gloves continues to do well for us. The US imposing the duty on Chinese gloves has helped some of our customers in Southeast Asia and South Asia.

That's been a good for us. Overall, the glove industry continues to grow, obviously.

It's a essential medical product. I think that will continue to grow at 7%, 8% year-on-year especially for nitrile gloves, at least 7%, 8%, if not 10%, 12%.

I hope that gives you a flavor of the different industries.

Definitely. Do you see the demand-supply situation getting better in nitrile latex?

I think, look, there is still, globally, an overcapacity. China, especially, has created a lot of overcapacity.

We could see some Chinese latex now come out and come into East Asia or Southeast Asia, which was not happening earlier. Even so far, we have not seen that much, but it could happen.

I think that will still take a couple of years for it to go back to sort of pre-COVID levels in terms of 80%, 90% capacity utilization levels. Maybe there'll be some consolidation, some capacities may even shut down which are not viable, the old ones.

Recently, in the last one year, one capacity in Malaysia, for example, was shut down from what we heard, old plant, not commercially viable, 25-year-old plant, I think it was now. That could happen, and then margins could improve even further quickly, but I think it's still overcapacity, and it may take another couple of years.

At least right now, the margins have improved for sure for nitrile latex and the gloves from what I understand, from what they were in '23 and in '24 and in '25.

Understood. Sir, you also said

Mr. Raheja, you can finish your last question since you started, I think we'll allow.

Thanks. You mentioned that we have done better on the rubber side as well, if I'm not wrong.

Could you provide more details on that?

I think, look, after sort of the pandemic, we had a couple of good years, and then the margins were again depressed. Now I think margins are a little bit better, that's what I meant, compared to the last couple of years, slightly better.

Overall, as I said, we're still hoping for an anti-dumping duty to be notified because it's been recommended, and there was a detailed investigation over a period of one year. The DGTR did agree with us on most countries, except one.

They did recommend a reasonably good anti-dumping duty to support us for five years. We're not asking for it forever, but at least some support for five years to support an industry which is essential for India.

Things are better, for sure, in the last three, four months. Thank you.

Yes, hi. Thank you for giving me the opportunity.

Congratulations on a very strong performance. Abhiraj, just one request and a suggestion.

If you could maybe more regularly disclose utilization across lines or geography and volume numbers, because it will really help us appreciate if the business is moving in the right direction. What I mean is that

I think I'm getting the gist of the question, but it definitely is not clear, very clear.

Sorry, is this better?

Yes, I think so. Go ahead.

I think just one request. If you could perhaps give us some more details on volume and utilizations, I think it will help us appreciate which direction the business is going in, because obviously, a long-term stated objective has been 13% to 15% margin, something that you've said multiple times, you've restated a few times, and given the volatility of, I guess, the end commodity and the raw material, it's far more important for us to look at the spread than the percentages.

We can't do that if we don't have the volume numbers. If you could maybe consider, in whichever way, given the competitive landscape, whatever you all are comfortable disclosing, I think it then gives us a far better idea that really should be margin-accretive.

Nitrile latex, let's say, is a unfortunate event that otherwise should have been very profitable, but is not. You did allude to that outside of nitrile latex, last quarter, we were already at mid-teen kind of margins, if I remember correctly.

This will just help us understand where the business is going, when the leverage sort of kicks in, and what we should expect. Otherwise, I guess all other questions have been answered.

I do hope you would consider doing this.

Sure. Saurabh, fair question, and honestly, as a company, we try to be as transparent as possible, but as I've said again before, that we try and balance out revealing all numbers because there's also something that we also have to worry about competitive information we are providing to competitors through this very transparent dealings with investors and analysts.

That is actually counterproductive in the long run. The reason why we don't give volume numbers, specific volume tonnage numbers, is because we are in so many different industrial segments, and it could happen then, once you go down that rabbit hole of revealing volumes, then it's easily decodable for some of our competitors.

I'm being very honest here. We do provide volume growth overall, because we do want to give the investors and analysts the flavor of, for example, this quarter, the revenue growth, if you were just to see the revenue growth from the numbers, it's flat.

We've actually grown in volumes. For first nine months, we've grown at 15%, but the revenue has been flat.

That's the kind of flavor that we do provide. As far as capacity utilization is concerned, I think we've been quite transparent, but noted, and what we'll do is, perhaps, Vivek, in your opening remarks or in the investor presentations, maybe we can give a flavor of the capacity utilization of the various product lines.

Yes, that will be helpful. At least it gives us a handle, like I said, because, exactly like you said, it feels like the business is in much better shape than it was, let's say, two quarters ago, but something that doesn't come out in the presentation or in the speech.

This will be highly appreciated.

Noted, thank you. Just to answer your question, for NBR, we had 100% capacity utilization.

We have been now for the whole year. For nitrile latex, we're at about 70 70%, 75% capacity utilization, 75% perhaps, closer to that, for YTD, I would say, the numbers.

For the other products, which is construction, carpet, paper, textiles, it's all one plant, and overall there also, we're at about 85%, 87% capacity utilization. For nitrile latex and for other synthetic latex products, we have one at least one year of growth left, and then obviously, the new capacity will come on stream.

NBR, we're already out of capacity, but that capacity won't come on stream for another year. I think those are the three main product lines.

We also have a separate tyre cord, which is almost at, again, 85%, 90% capacity utilization. That's a little bit of a swing plant we can use it.

Just broadly, we're at very high capacity utilization levels currently. We have one year of growth left in the latex side, and then we'll have new capacity come on soon.

Great. Just then sort of addition to that: so this does mean that you can further optimize on clients on slightly higher margins or better terms of business, just given that now we are running at pretty close to full up, right?

That's something that will be the endeavor for the next 15 months.

We have the option to do that, yeah. We would have next year for sure.

Awesome.

Thank you.

Yes, thank you. Yeah.

Hi, sir. Thank you for the opportunity.

I just have a couple of bookkeeping questions. One is on the interest part.

I can see the interest has dropped significantly this quarter, what is our expectation and what is the reason behind this? Secondly, on what is our expected tax for the year?

Okay. May I request Vivek to take these questions?

Vivek, on interest and tax, please.

Basically on interest, at the beginning, we mentioned that the year has been good from a profitability point of view, good cash generation. That cash, which is generated from out of profitability plus the working capital release, that has been used for repayment of some of the borrowings.

The borrowings have come down. Also, the interest rates have fallen, and we have been able to negotiate better rates from the banks.

Mix of these two factors have led to a reduction in finance cost. I would say 75% of the reduction in interest cost is through the reduction in borrowings, the rest is all interest rate-related.

On the second question of yours on the tax, we expect a effective tax rate of about 27%, 28% for the year.

Got it. That's great.

Thank you.

Also to add that obviously, look, we will now for the new projects, we will be raising more sort of long-term debt for this project. Partly, it will be through internal accruals, but we will be raising some debt.

Now interest costs may go up also in the sort of next year.

Of course, but that will move with the debt levels, right? In terms of the effective interest rate also, I think this should be a comfortable level.

Right. Just to add to Vivek, we're also net debt-free, so, in fact, we have reasonable amount of excess cash right now in the books, which we will be deploying for these new capex projects, of course.

Okay. The working capital may increase towards the end of year, right, or does it tend to be similar?

Yeah. That's another thing that's helped, is overall raw material prices in the last six months have been quite low,

lowest

we have seen in three years. That's again started to move up, I think our working capital utilization will also go up, I think, in the next three, four months.

Understood. Perfect.

Thank you.

Hi, Abhiraj. Thanks for the follow-up.

My question was

on nitrile latex. You mentioned this year, sorry, in FY27, we'll get 100% utilization, and if I go back to pre-COVID, this was a business where we had big plans.

Now that the market is shifting, and we are a very small player in the global market, considering the global size is huge and we are not even 1% of the capacity, are there now renewed thinkings on expanding capacity in the nitrile side?

Just to clarify, first of all, I mentioned NBR, which is NBR solid rubber, we had 100% capacity utilization. For nitrile latex, we still have some capacity left, and I expect that at some point next year, we will hit a run rate of full capacity utilization.

For the year, we will have to see how that goes. As far as additional capacities concerned, as I mentioned to one of the previous callers, look, globally there is a lot of overcapacity, it doesn't make sense to add capacity right now, maybe in a couple of years, and we have left some space for that.

Unfortunately, the margins currently don't justify additional capacity at this stage.

My question was that only: if the pricing comes back, how soon can that new capacity kick in, since you had

plans? No, once pricing comes back and once the decision is taken, I think it'll take us take us about 9 to 10 months.

Really, the long lead time will be just certain equipments, specifically reactors, which take that long, 8, 9, 10 otherwise civil structure, everything is ready, we don't, we don't need that much. It would depend on how long some of these long lead time equipments take.

I suspect 9, 10 months.

Okay. Our current capacity is 50,000 tonnes a year, right?

About 48 to depending on, yeah, 48 to 50,000, correct.

How much can that expand by?

Just to answer the last question, how much can we expand that by: we can probably expand it by about 50%, 50%

to 60%. Great.

Yeah. Thanks, that was helpful.

We will have to rework the cost at the time we take the decision and see if it justifies doing it. We will see at that time.

As I mentioned earlier, that we have taken certain assets from the nitrile latex plant towards this new synthetic latex that we are developing in Valia. It's going to get a little complicated going forward, which I don't want to get into now.

As and when we take the decision to expand, I'll let you know. I seriously doubt that will happen in the next year or two.

Okay. Thank you, sir.

Yeah. Thanks for the opportunity again, sir.

I wanted to get a sense on the EBITDA margin trend. This is the highest that we have done in last 11, 12 quarters, this 13%.

Generally, we believe 13% to 16% is what we should do in the normal course of the business. Do you see this 13% sustaining going forward?

What kind of risks that you still foresee in the market that we could fall behind again?

No, honestly, I'm so sorry, but I couldn't hear the question properly. I think I've got the gist, but if you can repeat the question, please.

I think this is the highest that we have done in last 11, 12 quarters, this 13%, and generally, we believe 13% to 16% is what we should do in the normal course of the business. Do you see this 13% sustaining going forward?

What kind of risks you still foresee out there that would make us fall behind that number?

Look, I think given the the current where we are currently, I don't see any reason why EBITDA overall EBITDA should reduce. One thing that could happen is, like what's happening now is suddenly the raw material prices, are going up by 20%, 30%, very quickly, in which case we focus on EBITDA per ton.

You could see the percentage margin come down, but overall EBITDA, PBT, ROCE being quite healthy. We look at as a company Oh, as a company, we don't only look at EBITDA percentage margins, we look at EBITDA per ton and ROCE is very important for us.

As long as ROCE is healthy, sometimes we're okay with EBITDA percentage margins falling. For example, oil was at 60, now it's become 70, let's say it goes to 90.

That means oil if oil goes to 90, there's a increase of 50% in raw material prices. We're not sure if we'll get a 50% increase in finished goods prices to keep the EBITDA the same, it may be less.

The EBITDA percentage may reduce, but ROCE will still remain strong. Overall, we're quite positive of that at least in the next year, year and a half, till new capacity comes on stream, and we have limited capacity, we're able to take the advantage of, picking and choosing the right customers with high higher margins, with good payment terms, and payment performance.

I think I I don't see any reason. Of course, other risks could be again, if the anti-dumping doesn't come through, and suddenly, there could be some dumping of rubber products.

For latex, it's a little harder, but for rubber products, that could happen. There are, of course, inherent risks.

Again, in the annual report, if you see, there are certain risks that we look at. All those factors are there.

Raw material risks in terms of sometimes raw materials not available and our plant is shut for some time, you know. All these kinds of risks are there, of course, but they are I think low-probability risks at this point that we see.

Understood. Sir, thank you for the detailed answer.

Sure. Thanks.

I think we're almost done with an hour, if there are no further questions

Is there anyone in the question queue now?

Thank you, sir, for the follow-up.

Sir, my

question is on to the per ton, per kg, like you mentioned to earlier participant. Sir, if you can give some flavor how has that been fared over the last three to four years, and are we nearing that range of 15 rupees I think we have said quite a few years back?

How are we standing in terms of per kg today?

Honestly, I am not able to give you the exact number. I certainly don't have numbers from the last three, four years in front of me, but overall, as I said, it's gone to reasonably healthy levels, perhaps not as high as what we had in FY22, '23, but reasonably healthy levels.

With the volumes going up, I think we're quite comfortable with these margins, and of course, endeavor will be to improve these further.

Got it. Sir, just one question on Apcobuild.

For how serious are we to build this business, because we have seen no material contribution to top line. Do you think to work on such a smaller business, which has no meaningful scale for us, should we focus our energies towards this sort of business or focus on the core businesses, like your latexes and all?

As I've told you before, our strategy for the Apcobuild business has been a little different. It is actually quite related to the core business.

I would not say that it's very far from the core business. We are focusing on mostly products that we are manufacturing and is where we have technical expertise.

We do have some outsourced products as well in our product range. Really, the focus has been to capture the additional margins that anyway, we're supplying to some of the customers that have a brand.

The endeavor has been to capture that additional margin, and while we may not see it on the top line as being significant, but it's reasonably healthy bottom line, and it's still a small percentage of the bottom line as well, but we're capturing that additional contribution at a lower cost. I think we will continue the business.

Whether we choose to invest large amounts and become a large player in that, that I agree that it's something that's not our focus or chosen not to focus on it right now. We'll continue to manage and grow this business.

Got it, sir. Sir, just one last question: sir, is there any plans to forward integrate to make gloves also, because we are into latex and directly we should manufacture gloves and export it to the global markets?

Any thought of an understanding on this?

No, we had considered it earlier. We said first let's focus on manufacturing latex and get that right.

As I mentioned earlier also, given the current entire glove industry and the glove supply chain, including latex, there's so much additional capacity at this stage, it doesn't make sense to add more capacity

both in latex and gloves.

Maybe at a future date if it makes sense, yeah.

Got it, sir. Thank you, sir.

Thank you.

Thank you, everyone, for joining us in this Q3 conference call. We look forward to seeing you at the end of the financial year.

Happy New Year to everyone, and thank you once again for joining us.