Hi. Good evening, everyone.

I would like to welcome Mr. Laxman Rao, Chairman and Managing Director, and thank him for this opportunity.

I shall now hand over the call to him for the opening remarks. Over to you, sir.

Good afternoon, everybody. Thank you very much for joining in our Q3 results call.

You might have already seen the results published on BSE and NSE, that we have the EBITDA up by almost 20% in the nine months compared to the previous nine months, and sales are up by around 12% in value terms. However, in the Q3 to Q3, the sales volumes are up by 3- 6%, and EBITDA is also up by 14%.

Traditionally, every year Q3 is our weakest quarter, but things started moving up right from January itself. We have more than double-digit growth in January this month, yes, this January.

Order book looks pretty strong for February also. Going forward, I think we will be back to normal level of 12% to 15% volume growth, which is possible in Q2 and Q1 Q4 and Q1.

Going next six months is our busy season, things will be start looking up, and we hope to catch up with the busy demand as we are well geared up in all terms. As I mentioned in my press release, we have completed mostly the consolidation of manufacturing units in Hyderabad, where we used to have five units, and now that's going to be only two units, Unit 1 and 10.

The printing unit is also now accommodated in one of the blocks of Sultanpur, Hyderabad unit. Unit 4, which is a small unit catering mainly to Asian Paints, is also moved to Sultanpur B-Block.

Now the five units are going to be only just two units, already two units are absorbed, but the Unit 4 will be absorbed from March onwards. This will reflect better operational efficiencies, cost controls, reduction in movement of goods, and also personnel.

These impacts will be visible hopefully from next quarter. Also another positive sign is WypGen, with whom we have signed an MoU for developing their product patents and ideas in India for closures and other applications.

We have received the first two component drawings, and designs have been started, and pilot molds will be ready by end of this month. One of them will be ready by end of February, one by March.

Their commercial feasibility will be tested thereafter. Hopefully, by end of Q1, we'll be having commercial molds producing these components for not only European markets, but these products can also be sold to Indian market under our MoU with Wyp.

This is another development. Coming to pharma, we are now have more than 25 clients cleared our premises, audited our premises and cleared them for production.

However, only less than half of them started commercial pickup, and the rest will start in the next coming months, ensuring a good volume growth in the coming quarters for pharma as well. This is the future outlook, and I think more can be discussed over the question-and-answer session.

I put this call back to Anushka to arrange for the question-and-answer session.

Hey, hi. Am I audible?

Yes, yes.

Okay. Hi, thanks for the opportunity.

Sir, the first question is on the MoU that we have signed with WypGen. If you just can speak a little bit about the nature of the product, what we understand...

as far as the industrial side that we have pointed, and if they have anything similar to do with food and lube products, whether leakages are very critical in terms of that we deliver in terms of safety of leakages even in terms of the dust particles. If you can just elaborate a little bit on the nature of the product.

Then secondly, on the MoU signed with Swiggy, do you see that kind of a product more of the churn would be materially higher compared to the churn that we have, say, on the other categories of food? These are the first two questions.

Wyp product details now I can't divulge because under the MoU, we need to develop the molds, establish the product quality before we make any announcement. I can tell you that this product also has applications in India, in our client segments as well.

This is adding quite a bit of a value in terms of application and user-friendliness. Once these products are established and developed, probably by April or May, when we discuss our Q4 results, probably I'll be in a position to throw better light.

I can tell you, these products are extremely user-friendly, adding high value, and they are patented by Wyp. We have the right to use the patent here in India, and we see applications very much welcomed here also in Indian industry.

However, I don't say that this is a hundreds of crores of worth of value, but certainly, it will be tens of crores, which over a period of next one year, we can see its potential.

Got it, sir. Sir, secondly, coming to the overall volume number, at the starting of the year, we were of the view, say, 42 to 45,000 total volume we can achieve.

Nine-month, we are, say, 31,000. Now looking at Q4, when you say growth, say, a little bit of a volume double-digit, is it fair to enough we would be, say, of the guided range of 42 to 45, we would be closer to the lower threshold of the guided range, or you think, since you highlighted the momentum is strong at the starting of the year, that we can have a little bit of a better quarter than expected, and Q4 numbers can be relatively better than what we had in Q1 in terms of volume?

Probably we'll be matching Q1 in the Q4, and we may not be able to cross it. The Q1 was pretty strong.

We had 11,400 tons production and sale in that quarter. Hopefully, we'll match it and bring it to 42.5 thousand is as against 44, 45 what we initially projected.

Still, that will be somewhere around 11% volume growth, a bit less than what I anticipated due to extended rainfall in the first, especially in the second quarter.

Got it, sir. Sir, on the pharma side, if you see the traction remains strong, and nine months already we have done, say, ₹25 crore.

Just want to understand the Q3 seasonality trend that we have, does it apply to pharma as well? Given that, 4Q we should go back to the same normal run rate of ₹10 crore, ₹11 crore that we had earlier, and given that, ₹35 crore kind of earlier target that we had, should be achieved?

Yes. We will be achieving ₹35 crore, though we are at around ₹25 crore in the first three quarters.

As you correctly said, Q3 is a dampener for pharma as well. This time it is a little more because of the uncertainty of tariffs from US.

There was some uncertainty of volume pickups from the pharma industry. I think now that it is clarified, it might start picking up really good.

Whether it is done or not, for the Indian market also, winter months are low for EV tubes, which are the major segment which have impacted in Q3. Looking at the strong order book in January, middle of January onwards, we feel we may able to cross or at least reach the figure of ₹35 crore for the full year.

Next year, we kept a target of ₹50 to ₹55 crore. That's again a 40% to 45% of growth on the current year number we have taken.

That will be adding sizeably to the bottom line as well because we are now way above the break-even point.

Got it, sir. Last question before I fall back in the queue.

On the lubes side, if you can call out on the volume side, you are seeing continuous decline. We know this is the space where we have faced some challenges, but any incremental sign as per the discussions that you had with clients of volumes growing a little bit on the higher side, or are including here on?

Just my last question. Thanks for the opportunity, sir.

Lubricants, we are noticing a dip, considerable dip, actually. Even in this quarter, we ended up with a minus 10% volume growth in lubricants.

It's basically because we are not actually participating in the very low-grade lubricant market of DEF lubes, which are mainly urea-based lubricants. Those areas have become very low-cost product range where Mold-Tek is not inclined to keep its capacity.

That's one of the reasons. General trends in lubricant this year is down.

I don't know much about how the lubricant company per se has performed, but due to five to six months of extended monsoon this year, the movement of goods and hence lube consumption has dipped is what the news I have. As whereas the clients like Castrol, we still have growth, positive growth, but there are clients where we have noticed dip in their volumes.

That may be universal for reason. Another reason, as I said, is we're letting go some of the low-end lube opportunities.

Got it, sir. Thank you.

Thanks.

Hello? Hi, sir.

Thanks for taking my question. While you have shared some color around how's the growth trends and shaping up, can you just share more color around as you said that 11% volume growth, but what kind of sales growth we can expect in Q4, and if you can share a further outlook for next year if you are in a position?

That's my first question.

This year we may close the year at ₹870 crore top line. For next year, we certainly have a target to cross ₹1,000 crore.

That is our internal target is to cross ₹1,000 crore comfortably. That's close to 13%, 14% volume growth.

Going by the trends of the Aditya Birla Group, ABG, which has grown around 21% in Q3, we are confident with their Mahad plant also going full steam, we may continue to see a good double-digit growth in Grasim. With the RCP issues with Asian Paints being settled, we also started seeing volumes of Asian Paints picking up from January onwards.

The RCP, they want 40% to 50% recycled plastic in their pails due to the government statutory obligation. We have successfully developed that formula and able to start supplies from December, and in January onwards, it will give them confidence that Mold-Tek will be pioneer or at least one of the first pail manufacturer to meet this statutory compliance.

With that being done, we hope Asian Paints, which is hardly 3%, 4% volume growth, can go into double digits in the next financial year, which will be a big pull for the rest of our other segments, which are all definitely in the double digits, early double digits. We are confident next year also we are aiming 12% to 15% volume growth, and once we achieve that, we may probably cross the benchmark of ₹1,000 crore top line.

This year EBITDA will be, now, for the nine months, it's ₹125 crore, and hopefully, we close this at around ₹170 crore is the target for the current year, up from 144 last year. That's again a 20%, 22% EBITDA growth.

Next year, we will comfortably cross 200 or maybe 215, ₹200 to ₹210 crore EBITDA.

Understood. Thank you for such detailed information.

From EBITDA to PAT, can you share some color around growth, where this operating leverage you are expecting to flow in from EBITDA to PAT level?

In this nine months, we have declared 18% PAT increase, up from ₹44.3 crore in the last nine months to 52.25, and earnings per share also gone up from 13.3 to 15.75. We have healthy growth at PAT level also, which is around 18%, and probably, hopefully next year, it should hit 20% growth.

This is for the nine-month period, hopefully, for the full year, we'll be in a position to reach somewhere around ₹70, ₹75 crore, ₹73 to ₹75 crore PAT, up from 60 last year. That's around 20% PAT growth, similar to EBITDA growth.

Similar growth we can anticipate for next financial year also, as well.

Understood. You are saying that similar 20% growth we can expect for both for this year as well as next year at the PAT level?

Is that-

Yes. Correct.

Got it. Can you share some color around the capex that you would be closing this year?

Are there any changes in your guidance as you stated earlier, and capex for if you have any estimation for next year?

Yes. We have made our budgets during the last month for the next financial year.

The good news is the capex is going to come down considerably next year because all greenfield projects are more or less completed, but for a little bit work at Mahad. Next year, the major expansion will be in pharma, wherein we anticipate to spend at least around ₹25 crore, and we may enter into a couple of new products like eye droppers and maybe nasal droppers towards the end of the year, nasal sprays.

These two products already eye droppers is in a pilot mold development stage, but the project will be out only in the second half of '26-'27. Towards the end of the year, we hope to enter into nasal sprays based on our market research if there is a positive demand gap.

For ophthalmic, we are definitely going ahead. Already pilot molds are under development.

As we go forward, pharma will at least keep growing at least around 30% thereafter, after we hit ₹50, ₹55 crore next year. Thereafter, we have a target of 30% to 35% volume growth coming from pharma.

Very heartening thing is majority of our clients who have started buying commercial are very happy with our quality and timely supplies, and a couple of them are even asking us to set up warehouses near their plants to enhance our business. These trends give me a lot of confidence that we can become a reasonably big player in pharma in the next two to three years' time.

Understood. Can you just repeat the capex rupee spend?

I didn't tell that. Last year capex was ₹140 crore.

This year it will be close to ₹120 crore, and next year target is ₹80 to ₹85 crore.

This year will be at 140, and next year is 80 to 8-

No, no, no. Last year was 140.

This year it is closing at around 120, and for next year, the target is ₹80 to ₹85 crore.

Understood. Got it.

Thank you, sir. That I'll move back to the Q&A.

Yeah.

Hi, sir. Thanks for the opportunity.

The first question on ABG in paints, in the last earnings call, you mentioned that I think in 1H, we have done around 2,900 tons of volumes, broadly 30% of the total paints volume, and you guided for around 6,500 tons by end of the year, full-year number. Where are we after nine months?

What's the number in broadly 3Q? Because you mentioned about some 21% growth in this quarter, ABG, but broadly tonnage-wise, where do we stand?

ABG, this quarter was around 1,480 tons, and so far, it is around 4,400 tons, and we hope to hit the 6,000 mark by end of this year.

Sure. The 10,000-ton capacity that we mentioned about ABG, this includes even the Mahad one, or it is only the existing two?

Including Mahad.

It's including Mahad, right? Okay.

Yeah. Currently, this year, we may be utilizing only 60% of that capacity, and we hope next year onwards it will be above 70.

Sure, sure. Since you'll be moving ABG to Mahad, have we got some indication from Asian Paints also?

Because you mentioned the RCP thing, but apart from that, the volume, Satara plant was underutilized for quite some time earlier. Do you expect that the ramp-up from Asian Paints will be far stronger from maybe upcoming quarters once we move the production for ABG to Mahad?

Once that RCP issue has been resolved, the numbers started going up, and we could develop a recipe which is adopting 40% RCP, which is the government statutory compliance. Thereafter, we are now seeing the numbers moving up, and we hope we will gain a double-digit growth in Asian Paints in the coming year.

Sure. Any possibility for market share gain is there because you said you are the only player who has cracked that formula?

No, no, no. It's not necessarily.

The others also will be simultaneously cracking that recipe because obviously the suppliers will go to all the manufacturers, hence it will be a couple of weeks plus or minus. It won't be a great advantage as such.

Once this particular thing has been done, we are confident that we will get back our old percentage.

Okay. The capex for Mahad broadly, out of ₹80, ₹85 crore, how much would be for Mahad, broadly?

No, Mahad is hardly anything because already those machinery have been installed at Satara. What is happening there is only the shed and auxiliary equipment worth around maximum ₹5 crore.

The other plants' tool room itself, replacement of molds itself around ₹20, ₹25 crore for every year. Injection molding machines worth around ₹9 crore are planned for all the plants put together, especially for north plant, where we are seeing a good traction for our thin wall and Q-Packs.

That is causing our confidence to go up to capture the north market. There is injection molding enhancement of capacity in Panipat, not for ABG, but mainly for the sake of Q-Packs and food and FMCG products.

Around ₹25 to ₹30 crore will go towards pharma. That is why the next year capex could be controlled within ₹80 to ₹85 crore.

Sure. Last question from my side.

Since you mentioned Panipat FNF facility, where are we in terms of the client engagement there? Because have we finalized any client there for Q-Pack and-

Yeah. Not one, not one.

We have at least 8 to 10 clients already started buying from us, and in this season, we expect it to go up to 25 to 30 clients in both Q-Pack and thin wall put together. We are expecting that numbers to double in this coming season.

Any categories which you would like to highlight, if not names?

All the categories, be it confectionery, be it yogurts, ice creams, protein powder, edible oils, cashews, basmati rice, in the case of Q-Pack. There are several ghee, all these features.

We are introducing to start with six thin-wall products immediately and another six by June-July. That is for the festival season.

There'll be 24 molds, that is 12 sets, operating in the north by June, which is currently four sets. There'll be a huge increase in the food and FMCG in that segment, I am expecting.

Already we are seeing a very good trend in Q-Pack sales, which are established six, seven months ago. You all know that thin wall started only in September-October, so that also is picking up, and we see a good improvement in the coming season.

Okay. The element of seasonality will be relatively lower, right, from Panipat FNF?

Not necessarily. Again, Q3 will continue to be our least season, because all the consumption of paint, you name it, or sweets, or ice creams, they all come down in winter.

Generally, Q3 continues to be our weakest quarter. Next weakest will be Q2, but this year it was pretty little worse than previous growth rates because of extended rains.

Otherwise, Q2 also would be moderately good. Always Q3 is the worst quarter, and that is over now.

Hopefully, next three quarters, we will be seeing a good volume rise.

Okay. Sorry, Sultanpur capacity utilization as far as FNF, broadly, would be 50%, 60% or lower?

It is around 60% now, and it will go up. It has to go up now because all the machinery have been erected in one premises.

There'll be fungibility in case of some machines are idle. Easily molds can be put on, and then other products can be produced.

This gives a lot of fungibility and better capacity utilization at Sultanpur.

Sure. Thank you so much, and all the best.

Thank you.

Hello, sir. Am I audible?

Yeah.

Thank you for the opportunity, sir. Just one question.

Once all the greenfield plants are up and all the factories are running, what would be the peak revenue potential?

With the current machinery and plant itself, we can reach 1,200, ₹1,250 crore. What happens is the capacity utilization won't be steady beyond 75%.

Typically, beyond 75, 80, you will tend to have mismatch of jars and caps, and typically, in injection molding, anything above 75 is excellent. I can safely say with the machines that are currently there, ₹1,000 crore can be reached.

We are adding 21 more machines in the next three months and first six months of next financial year. That will further add another 10% to 12% of the capacity.

That means up to 1,150 to ₹1,200 crore, ₹1,200 crore you can easily say is possible with the existing and planned machines.

Okay. Sir, you mentioned about injection- Sorry?

In injection molding-

Sorry? Hello?

Sir. I'm saying you mentioned that around 75% plus is a very good number for injection molding, just wanted to understand what kind of difficulty do manufacturers face to scale up utility beyond 75 in injection molding?

Yeah. What happens is the product mix won't be perfectly matching your machinery capacities, and jars and lids are not completely fungible.

Manufacturing a lid on a jar machine will be not viable. You can do it, but it is expensive and won't give the yield.

Sometimes you may have to use a bigger machine for a smaller component, thereby capacity utilization effectively will come down. That is where anything above 75% injection mold capacity is considered good.

Also, you don't use the entire machine's capacity. For example, a machine is rated to produce 1,200 grams component, you may produce from 700 to 1,200.

Effectively, your output volume will not be as good as your capacity. Sometimes the width of the mold or depth of the mold component is different, then you need to use a bigger machine, but you get a lower productivity.

All this makes in injection molding capacity utilization anything above 75% is a very good deal.

Okay. In pharma, what would be the ideal capacity utilization level?

Same. Again, there also injection molding and IBM machines are used.

IBM is injection blow molding machine. There also you have similar limitations.

Anything above 75% is a good utilization.

Okay. Fine, sir.

Got it. Thank you.

All the best.

Hello, sir. Sir, thank you for the opportunity, sir.

Just one question, this is regarding the MoU that we have signed with Swiggy. Sir, can you just talk a bit more about it, what is the incremental opportunity that we get from here, and also what kind of margins can we expect from here?

Would it be say a F&F kind of a margins, or it would be like a paint kind of a margin?

Which one? You're talking about Wyp?

Swiggy, sir. Swiggy.

Sorry?

Swiggy, sir. Swiggy MoU that we have done.

Oh, Swiggy. Swiggy will be similar to our food and FMCG margins.

Basically, they are buying restaurant packs and food packs for their brands which they promote. They've put us as a preferred vendor for packaging products.

They will be directing their restaurants and partners to buy the packs from Mold-Tek. We have been selected as a preferred vendor for Swiggy restaurants.

That will be similar to our restaurant packs, that is food and FMCG EBITDA, which is around ₹70 to ₹80 per kg.

Any volume estimate or assumption that you can have for this, 500 tons or so for the next year?

Volume, next year, again, we are hoping to do around 12% to 14% volume growth. That's why from ₹870 crore, we are hoping we'll be crossing the ₹1,000 crore benchmark.

Okay. I was looking more from the Swiggy perspective, what incremental volumes can come from Swiggy.

Oh, Swiggy, I can't say now because it's just a very recent MoU. They have to spread the news, and some of the restaurants have to be contacted, and it will be like one more client.

I don't think it will be a very huge addition unless we see it for next couple of quarters. I can't comment on it.

The reach will be very big, and this will enable us to reach more and more restaurants and food delivery partners more rapidly. We have to wait and see.

Just it was done a month ago, 15, 20 days ago.

Okay. Thank you so much.

Hi, sir. Thank you for taking my question.

You talked about the decline in lubricant segment. How much of that is sort of cyclical and should come back next year?

How should we look at volumes in the lubricant segment for FY27?

See, actually, I missed one point when I answered that question. Here I want to add it.

One of the reasons why we have a drop in the lubes segment is we lost the tender for BPCL. BPCL tender was completed last year, and this year BPCL tender has not come in our favor.

That is one of the reasons why there is a decline in the lube numbers, especially in this quarter, because till last year second quarter, few months ago, the tender has been completed, and we couldn't get the tender for the current year. That is one of the reasons for the lube drop.

I think overall nine months, the drop is not as steep as 10%. It is somewhere around 6%, 7%, I guess.

Hopefully, next year, we should come back to at least recover this loss because we have added Veedol recently, and they started picking up volumes for last couple of months. It may not be as big as BPCL, but to some extent, it can fill up the gap.

Understood. Can you talk a little bit about the competitive intensity in general and specifically in the food segment?

See, as I mentioned to you in the last couple of quarters ago, there is a competitive activity in IML segment now. With our variety of robots and huge range of product and multi-locational supply, we are in a position to retain most of our clients, and we even add several of them in this current year.

Last year, we suffered the shortage of printing capacity, which we have completely eliminated by adding quite a bit of capacity in printing and lamination, which has now become handy and enabling us to deliver goods in time, which has again gained the confidence of even smaller and mid-sized companies. The growth is again back to mid-teens.

Going forward, with the north coming into production full swing, we'll be sure of mid-teen growth in food and FMCG. While Q-Pack is continue to grow around 25% to 30%, basically because the court cases we have put on competitors copying our patented design have bearing fruit.

Recently, High Court bench has given a order in our favor, stopping three of our competitors who have infringed our patented model.

Understood. Lastly, it'll be very helpful if you can share what is the EBITDA per kg for the different segments, just a rough sense?

I think I've been sharing that. For the paint and pails and even Q-Packs, it is in the region of around ₹30 to ₹35, and food and FMCG, it's close to ₹70 to ₹80, and pharma, it's about 120 to ₹140 depending upon the product range.

Lubricants will be higher than 30 to 35, right?

A little better than paints.

Okay. All right.

Thank you, and all the best.

Thank you.

Thank you for the opportunity. Sir, my first question is related to the paint segment.

What will be the volume growth in paint segment ex-ABG?

Overall growth is 10.3%. In that, ABG alone has contributed about 21%, that is around 250 tons.

ABG has contributed 21% of the 50%, no?

Sir, if you could provide the volume of ABG in last year?

It is about 1,480. So 250 means about 5%, out of the 10% growth, 5, 5.5% growth has come from ABG.

Rest is from Asian Paints and others.

Sir, second question is related to the same. Will the RCP, which would be added into the raw material for us, would lead to decrease in EBITDA per kg in paint segment?

No. What will happen is RCP will be purchased at a little lesser price, and the same benefit will be passed on to the client, it will not impact our EBITDA at all.

RCP currently is available at the lesser price than our current raw materials?

Of course. More than at least 10% to 15% cheaper.

That's one of the reasons why we were not so competitive because we could not effectively use 40%. Now with the new recipe, we are able to do that.

Got it. Fair enough, sir.

Sir, my next question is related to the food and FMCG segment. Just wanted some understanding related to once the printing capacity came into picture last quarter, what has actually restricted us for growing at more than 15, 20, 15 percentage in this particular quarter?

This time it is around 11% growth in food and FMCG, 54% in bulk packs. Put together, it is close to around 12% volume growth.

Q-Pack we grew at 25%. The food and FMCG also is a tepid quarter, Q3, but Q4 looks pretty strong.

Already in January, we found it's more than 17%, 18% growth we achieved. Going forward, the season starts for ice creams and yogurts as summer picks up in March onwards.

Right from February, we expect a takeoff in thin-wall sales.

Sir, I guess there is some issue related to the numbers that you have said. The growth in Q-Pack was around 34 percentage for the quarter YoY basis.

You have specified-

Quarter you're talking, I'm talking about nine months.

Okay. My bad.

Okay. Got it, sir.

Got it. Next question is related to the labor law cost that you included in employee benefits.

Was the entire cost included for this quarter itself, or it is going to be an incremental cost which would be coming in the next few quarters?

No, that external employee costs are already absorbed. There's no extra coming up.

It will be for full year.

One-time effect has been put in employee expenses?

It has been already taken.

Going forward, can I expect that going forward in the employee cost would be comparatively lesser than current quarter?

Yes, maybe. Comparatively will be lesser because this quarter absorbed a little bit extra provisions of the previous two quarters.

Going forward, it may marginally come down.

Fair enough. Fair enough.

Sir, just for the understanding perspective, we have signed an MoU with Swiggy, generally the containers, the plastic containers, would require significant volume from the client perspective. Just wanted to understand, within this MoU, have been there any kind of talk that they are asking you to set up certain plant and machinery into certain parts of the geography of India?

No, at current level, they are also not very clear how the volumes pick up. Maybe in future, once the volumes really pick up, our north plant, our west plant is also equipped with capability to produce thin-wall products.

What mainly they will be looking at is restaurant packs, and in that, we are actually introducing some more variants in this March-April. Probably as their volumes grow up, and if they really want to have capacities, we have plants across India now.

Additional capacities or molds can be created, and production can be effectively made from those various. I think I would wait for a quarter to comment on this.

Fair enough. Sir, one last question from my side.

In the oil business, we used to do annual volumes of about 9,500 to 10,000 MT. Current if I look at the run rate, which is around 1,800, it has significantly dropped from that levels to almost 7,000 to 8,000.

After losing BPCL-

Sorry, what you said 9,500 is what?

We used to have an annual run rate in MT for oil business around 9,000 to 10,000. Quarterly run rate of 2,400 to 2,500.

Oh, you mean the edible oil part of Q-Pack sale?

No, no, sir. The oil, which is included in the lubes one, the lubes.

Oh, lubes you're talking about, okay.

Yes, yes. Lubes our volumes-

Lubes is now currently per quarter, this quarter, we have 1,800 around 1,800 tons. That means about 7,000 already in nine months, we did 6,900 tons.

After losing BPCL after Q2, what kind of run rate should we expect? It would be around in 2,000, we would be doing around 8,000 volume strong lubes for the next year?

We'll be somewhere around 8,000 tons for lubes, that's all.

Got it. Got it.

Sir, last question, are we seeing a pickup in volumes from ex-ABG in paints segment in high single to low double digit now?

I would say from last just one month onwards, we are seeing good numbers from Asian Paints, which are more than 10%. From Berger and Nerolac, we have maybe 5%, 6% kind of growth.

There is an indication from Berger that they may move into some of the IML packs. If they do that, probably there also we can expect a double-digit growth.

Fair enough. Thank you so much, sir.

That's it from my side.

Hello. Thank you, sir, for taking my question again.

You said that we lost a tender to BPCL this year. Can you highlight any particular reasons for that?

Was the price a main reason for that?

Price is the only reason, because we don't want to go below a certain threshold of profitability and pricing. There may be some couple of aggressive bidders who wanted to go at a lower price.

That is the reason.

Are we seeing similar competitiveness in other tenders and contracts from other companies?

No, only from BPCL, because these are government tenders. Now today, more or less, our government lubricant sales have become zero, not even Indian Oil, not even their other lube oil companies, none of them are buying from us, HPCL, BPCL.

BPCL was the last to go. We let it go.

Actually, in fact, we may start adding another private sector vendor. Last year we added Veedol.

This year, one more client is in the final stage. Their CEO also visited our plant recently.

If that happens positively, probably next quarter onwards, we may have one more private sector lube company joining our list.

What kind of growth are you seeing in this segment for next one year or two years down the line? Or are we seeing it-

I would rather think it will be more stagnant, or growth of the private sector lube companies can be related to Mold-Tek, because now I don't think in future also we may able to compete or get into that kind of price war. Probably we will stay out of it unless we get an opportunity.

Having said that, I would be neutral on lube growth. It will get again back to 2% to 3% annual growth.

That is what is common with the private players.

Understood. Just following up on my previous question around PAT and EBITDA growth.

You told that the PAT will be in line with EBITDA around 20% levels only. We are now expecting the depreciation would also be on similar levels as it is right now, around 20%, 25%.

When can we see depreciation coming off, or will it stay at similar levels, or as you said that capex will be significantly low next year, another year after that, can depreciation come off, or will it be around at similar levels only?

I think another couple of years, the depreciation levels will be high because of the huge capex we did in the last four years. It may taper down now because next year it will be around ₹80 crore.

I think in future, it will be equivalent to depreciation, which is almost ₹70 crore, ₹65, ₹70 crore per annum. At the current level, it is around ₹15 lakh crore per quarter, around 60.

I think it's peaking up now. It may stay around that level or maybe a little higher for next one year, and then it will start coming down or at least equal to stay at this level.

Once we reach there, the PAT growth will be better than EBITDA growth, probably. Instead of 20%, if EBITDA grows 20%, the PAT might grow around 25%.

No, obviously, if your depreciation comes off, and if that comes off at let's say two years down the line, then we can see a higher PAT versus EBITDA. Just one last question.

Can you share utilization levels of your current capacity in totality and across segments as well?

As I mentioned, our overall capacity utilization is around 67%, I think, in Q3. It is less than 70, for sure.

One second, let me tell you. It is now down to around 62.5%.

It was 74 in Q1. It fell down to 62.5 in the last two quarters.

Hopefully, in Q4, it will cross 70 plus. Next year, due to increased utilization of all ABG facilities and north thin-wall and Q-Pack, we hopefully stay above 70 for the next full year.

Understood. Thank you, sir.

That was my last question.

Thank you for the opportunity. Am I audible?

Yeah.

Hi, sir. Sir, I have two questions.

My first question is regarding this MoU which we have signed with WypGen. Could you just elaborate what is the commercial arrangement in this MoU, and let's say what is the margin profile of this safety caps and closures?

When do we expect the revenue to flow through in our P&L from this arrangement? Is it mostly related to, let's say, pharma segment of this caps and closures?

That's my first question.

No, it is mainly to chemicals, lubricants, oils, high-end chemicals, also lubricants. It is nothing much to do with pharma.

Maybe pharma chemicals, what you call it, ingredients may use it, but not for pharma application. It is also used in lubricants.

These caps and spouts are high value-added products. I guess at least the range of EBITDA will be in the range of 80 to 100 or can be better.

The volume pickup will be progressive. It's not happen overnight because developmental time is longer.

Their patents need to be developed first into pilot molds, and once the pilot mold samples are approved, we have to go for commercial molds. The first two products started pilot mold development.

End of this month, one product will be out, and second month, probably end of March, we'll have both the products, which are related products, they will be ready by end of March. Once we start marketing effort by Wyp from April, probably its commercial volumes can only go out in Q2.

From Q2 is the numbers start coming in. By end of the year, we can see or at least in the Q4 Q3, Q4, we can see some numbers adding in few crores.

That will be the beginning. Once the relation is established, and they gain confidence on us, they have several products to offer, and we are also eager to do it because they are very challenging products, also good value-added products.

Even in Indian application, under the MoU we are allowed to sell them in India by paying them some small amount. That enable us to explore the Indian lube market or Indian chemical market, where some of them are still importing some of the closures, not in huge volumes, but it's picking up in India.

If it's in lubes, the volumes are tremendous. There is a good opportunity, but it is a little time-taking.

Value add, it is pretty good value add.

Okay. The EBITDA per kg you said it's between ₹80 to ₹100 per kg, correct?

At least.

Okay. Sir, I just wanted to understand as of now, then how much of this product are import dependent, and how much is catered through domestic manufacturer?

Who will be our competitor here, let's say, from a local manufacturing point of view?

No, no, no. Currently, there is nobody in India making this or using it in a big way.

Even in the lubricant industry, our competitors are current competitors. This product what we are developing, once the details are completely out, and we are able to demonstrate its capability, it will be definitely a different ball game in terms of its functionality, and which may give us good growth back in lubricant industry also if it is adopted by them.

Okay. Sir, one final question on cost item.

This quarter, we have seen that other expenses saw a sharp decline of 8% QoQ. Just wanted to understand what led to this.

Is it one-off or is it more sustainable number going forward? To say in terms of operation efficiency.

These are definitely due to operational efficiencies. You'll be keep seeing it improving.

What do you mean by other expenses? Ramu, can you help me with that?

Why did other expenses come down, he's saying? See, some power incentives or rebates we got, that's one.

That might have brought down the other expenses. As I said, once the units are consolidated, the inter-unit transfers will come down considerably.

That's also are classified under other expenses.

Okay.

We are also going for solar. More and more solar plants have been getting operational at all the units.

Hopefully, by June-July, most of our units will come under solar power, which will also save us power cost.

Yeah. Thank you, sir, and all the best.

Thank you.

Hey, just one question on what would be the mix for IML and non-IML for the quarter?

It's around 75% IML and HTL, labeled containers. 25% is non-IML, plain or screen printing.

Got it. Thank you.

Thanks a lot, operator and sir. Sir, just one question that I see that we've been giving dividends for the past three, four years, maybe around ₹15, ₹20 crore per year.

Which is around 0.4%, 0.5% in terms of dividend yield. If the same dividend was directed to repayment of interest cost, maybe we would have saved ₹5, ₹6 crore in interest cost annually.

That would have added 1%, 1.2% to RoE. Can you just once explain the rationale and trade-off between paying dividend and repayment of debt?

Because I think shareholders might be a little happier with repayment of debt so that free cash flow and return on equity is better for us.

Yes, we have taken that suggestion from various investors, not only individual investors, but also funds. If you notice, the dividend outflow has come down considerably in the last three years and to safeguard the RoE and also to reduce the debt.

The similar trend will continue in future, too.

Fine. Got it, sir.

Thank you.

Thank you for the opportunity again, sir. Just one question.

Since last eight quarters, ex-pharma, if I'm able to see all the three segments, food, Q-Packs, paints, and lubes, what I'm able to see is that our realization or revenue per kg is on a declining trend. This quarter it is at the lowest of the last eight quarters.

Just wanted to understand is there any kind of raw material cost passing taking place, or is it because of the competition that is happening?

See, there is a reduction in the overall cost per kg. I agree with you in the last few quarters.

If you look at our raw material cost, the mix is also coming down. The raw material cost in Q1 was ₹94 per kg, has come down to 86.67 now, almost ₹8.

The sale price has come down by around ₹9. That delta is hardly ₹1.

In Q1, generally our food and FMCG will be highest as a percentage of sale compared to Q2 and Q3. Whatever is the raw material recipe cost come down, we are generally passing it on to the clients to stay competitive.

We are not going beyond into our own means to reduce our profitability. Otherwise, we can't sustain growth in EBITDA per kg.

If you look at the EBITDA per kg, last year nine months, it was 37.6, and this year nine months, it is last year full year is 37.6, and this year nine months is 40.24. That's a clean ₹3.5, ₹2.5 increase in the EBITDA per kg.

That shows the company's ability to sustain its margins in spite of competition.

Sir, I totally agree to the point that our EBITDA per kg is remaining constant and in an upward trajectory. If I'm not wrong, in the last conference call, you have mentioned that you have facing some kind of a competitive intensity in the food segment.

It is a follow-up question, ma'am.

Yeah. The definitely competition in all the fields is increasing.

There's no doubt about it. Our ability to retain the clients comes with our timely supplies rather than pricing.

Because most of the food and FMCG companies are seasonal demand in nature, and they want in-season good service from the suppliers of packaging products. There they can't bet on anybody who has two or three robots and running few product range when compared to Mold-Tek with more than 120 robots and 200 injection molding machines in 10 plants across India.

Definitely our ability to service them is much better, but for last year when our printing capacities have been somewhat misplanned. Going forward, we may very rarely lose a client.

We certainly lose here and there, but we are able to add much faster also.

Thank you so much, sir, for the-

Yeah.

Thank you very much for all the participants actively participating in our third quarter results investor meet. I also thank Emkay Global for arranging this call, and also thanks to Anushka.

You all have a great day. Bye.

Thank you.