Thank you very much. The first question is from the line of Sanjesh Jain from ICICI Securities.

First, I want a clarification. Maulik bhai, you said in your opening remarks that we are looking at a few downstream product s in agrochemicals, moving up in the value chain. Second, you spoke about the new product, which will have application in agro and pharma and probably another for industrial solvent and energy. Can you give us a little bit more color on this product and what is the capex we are looking at, expansion of these products?

Okay. So first of all, thank you for the question. These products will not really have any meaningful capex maybe other than some balancing equipment or something. And most of these will be utilizing assets that we already have in campaigns. So while we have a baseload and a foundation of some intermediates that we make, we have partnered with certain downstream customers where we would run these products as a value-add in certain campaigns. I think every month, there will be a campaign. It will swing between the baseload of products and the higher value-accretive products. Now when we go downstream in Agrochemical Intermediates, here also, the focus is to do it in a very strategic manner because traditionally, we have always focused on making intermediates not really technical. So when we're doing that, we're doing that along with strategic partners. And as far as what I mentioned about the Personal Care, this again it is going to be an asset valorisation; but it is also going to fundamentally add a brand-new chemistry to our product portfolio. Just for the record, this chemistry is one that's called Friedel-Craft.

What chemistry is it?

It's called Friedel -Craft, these are German names. I think that's 2 scientists who created this chemistry many, many years ago, but it has a broad range of applications. And over a period of time, it will actually also feed into the polycarbonate resin as a major application. But right now, the priority focus will be into personal care and pharma.

Very clear. That means because we were running very efficiently our plant, this means we will have more value from the same plant rather than more volume. Is that a fair statement?

So while that answer is yes, I mean, we have a mixture of high-efficiency, continuous operations plants, for example, the phenol plant , the sodium nitrite or the nitrotoluene plant, but we also have a very broad range of batch plants, which are very well instrumented and able to have a very large number of chemistries that we're able to use in those assets. So these are assets, which will be used to make these higher value, relatively smaller volume products. And some of them will include assets such as our fluorination block. Some of them will include assets, which we would otherwise have used for some other chemistries. So the high -efficiency single product plants will continue to run in that manner in order to gain the base load of efficiency. And the other assets, which are batch, will be used to generate higher value, smaller volume, margin - accretive product.

Very clear. Now shifting gear to the standalone business this quarter, I think we had a good run on Agrochemicals sequentially. But if I look at incremental gross profit and incremental revenue, that's only 37%. That says that we are still facing some margin pressure in the underlying core product even in the Q4. When we see the margins have stabilized, are they stab ilizing at a Q4 level or at the Q3 level?

No, neither. Even Q4 is softer than it should be. But I'm not going to give any opinion about what Q1 and Q2 will be because, I mean, literally, on a daily basis, there are news that come out that completely shatter your perception of what would be a norma lized situation. So I would rather say that we're confident about coming back to a normalized number, which is higher than the Q3, obviously, higher than the Q4. But I would say that this will be achieved on the annual number rather than on a base of Q3 or Q4.

That's very helpful. But can you throw some light on what's really happening? It's a demand side issue in China or it's oversupply situation in China? What really is driving a sudden spurt in competition in our product, which till now has been doing quite well even in the worst of the situation in FY24?

So generally, what has happened over the last several years is that there has been a significant overcapacity that has been built in China. Along with that, a lot of the Agrochemical Intermediates that Deepak manufactures has a very large application base across the world, but has been largely dependent on onl y a small handful of customers. Now as these molecules go through a process where there is a patent expiry, the number of customers increases. And for a short period of time, so does the number of potential competitors. So Deepak has been focusing on ensuring that it is building cost leadership as well as ESG leadership. Now there is always going to be a period of time in the middle when you're essentially competing with someone's finished goods inventory. It's easy for Deepak to compete with anybody at a global level when you're talking about manufactured products. But when you're competing with somebody's closing stock, which is depleting at a pretty rapid clip, but you still have the tail end of it there in the market, that competition becomes unable. To be honest, we are actually quite well aligned with a lot of other players who say that the down cycle of agrochemicals is petering over to the end. You have certain players who are forward integrated into the formulation, who are able to tell you that the future is much brighter because they're there with it. We follow suit maybe with a lag of 1 quarter or 2 quarters. But we are well aligned that moving forward, the situation is not as grim as it was in FY24, FY25 with regards to volume recovery as well as over a period of time, price recovery.

The next question is from the line of Nirav Jimudia from Anvil Wealth.

I have 2 questions. So, first is on the commissioning of our nitric acid plant. So when we see the other players in the industry having the capacities of nitric acid, they are integrated in terms of their upstream ammonia, whereas probably we have to purch ase ammonia from outside to support our nitric acid production. So just wanted to have your thoughts here that because we need to purchase it from the outside market, how we would be competitive vis -a-vis those players having their captive ammonia? And also, if you can talk about in terms of the opex difference between us and them over a period of time?

Okay. Nirav, thanks for your question. Just to clarify, look, Deepak Nitrite has been in the business of consuming ammonia now for 54 years. We started off with sodium nitrite, which is a consumer of ammonia. So our ammonia purchasing pipeline, both from domestic as well as international sources is relatively robust, and it can be made more robust with some margi nal investments here and there. So look, we don't compete with manufacturers of nitric acid. Our asset is in place for us to consume internally. So our products that we make, while nitric acid will be made, our products will be downstreams of nitric acid. And those are much higher value in a sense of multiple end applications, domestic and international demand. In fact, in a couple of places, we have tied up a large portion of our production for multiple years with formula - linked pricing, which includes movement of feedstock, for example, ammonia. So moving forward, I don't see us trying to benchmark against nitr ic acid producers who hav e their own ammonia. I look at benchmarking us against nitric acid consumers who purchase their own nitric acid, whereas we will continue to purchase and expand our purchasing policy for ammonia.

So, Nirav, to elaborate, this is a make or buy decision. It has nothing to do with the market. And then secondly, the certainty of supply and through pipeline. These are the major components one has to look at. We are not competing with anybody. We know they will be far superior than us. But assured supply, timeline supply, cost as compared to market will be much lower. Paybacks are better, quite good, in fact. So this is what calls for a make or buy decision, not as compared to how they are doing and what we are doing. How efficiently we are doing is more important. So I hope we have answered your question.

So just one thing here. Last quarter, you mentioned that probably we would have our own storage tanks also for ammonia. So how that is progressing and when that could be commissioned? Because now our nitric acid facilities are getting commissioned in Q2. So if you can share something on that storage tanks, that would be helpful.

So what we've done is we have already made investments and commissioned investments about storage of nitric acid as well as unloading of nitric acid to have a much higher rate of consumption on a steady basis. We have also invested into expanding our stora ge to allow us a greater degree of flexibility and then take that ammonia via pipeline into our consumption sites. I won't say that, that is a significant investment, but that should also be operationalized during the year. To ensure that we have a strategically derisked ammonia sourcing strategy.

Got it. Second question is in terms of the input prices, like some of our major raw materials like toluene, octanol have seen a price corrections from March onwards. So just wanted to have your thoughts here, like have the product prices being adjusted commensurate with the fall in these raw material prices? Or we would have some extra delta left with us to work with? Given the kind of commentary what we have seen in your investor presentation, like you have mentioned that we are seeing a kin d of demand revival in dyes and pigment segment. So if you can relate all this with reference to these raw materials as well as your outlook for DASDA, OBA for FY26?

Sure. So look, Nirav, as you mentioned, there is a price softening of key petrochemicals like benzene and toluene and such. Now because we are intermediates manufacturers, we are also present in multiple parts of the value chain. For example, my OBA prices do not move in line with toluene prices, right. So in some parts of the business, when we have a contractual agreement with customer for an intermediate, we have a formula with a pass -through clause, which may have, in some cases, 1 month. In another case, it is a quarter where there is an adjustment to the price of the product based on quarterly average movements. In other places, it is linked to the market price. So when I'm selling optical brighteners, nobody really asks me about the price of toluene and how its downward revision would improve my OBA prices. So there, it is about being able to secure long -term customer contracts. And as you've mentioned, OBA, we have debottlenecked our optical brightener manufacturing capacity. We've also launched a few new SKUs, including into certain segments where we were originally expecting an extinction threat in that segment. So now our optical brighteners are able to service those applications as well. And we're working very tightly with our key accounts, our customers to increase our wallet share. But we do debottleneck in anticipation and then over the next year, work to see how we can increase our wallet share with them. So this is an ongoing activity. Even this year, we will be able to debottleneck the asset with marginal investment. And our goal is to ensure that we are increasing our wallet share because we have upstream integration and because we have a strong value chain thesis that we are able to give to customers.

The next question is from the line of Ankur Periwal from Axis Capital.

First question on the AI part. Your commentary suggests volume-led uptick across some of the segments wherein we are seeing some green shoots. My question is more on our thoughts and strategy given that the pricing-led scenario is the way it is, probably it will take some time for it to recover. So is there any enhancement in product specifications that we are doing to address the margin pressure? Or there could be a reset in terms of AI margins over the medium term as we scale up this business?

So in the AI business, the part which goes into dyes, pigments and their associated industries, I think, I had mentioned also in February that from the closing end of Q3 onwards, there has been an improvement. And that improvement was volume -led and eventu ally, it would turn into pricing improvement as well as margin improvement. So I think the volume improvement has persisted. Now we're starting to see some level of margin improvement. Again, all of this is significantly influenced by geopolitics. So I'm cautiously optimistic, but we are seeing along the lines of what we had mentioned in February. Now when it comes to other segments such as Agrochemicals, for us, in a certain group of products, which go into Agrochemicals, we are seeing margin as well as volume improvement, but not in others. The other ones will come maybe towards the end of Q1 or Q2. I'm not sure. And hence, I am not going to give any clarification with regards to the other chemical, which goes into Agrochemicals. What we have done in the meanwhile is, we have seen how to ensure that we are optimizing on the cost front, how we are ensuring that we are able to even go downstream in partnership with certain customers as well as ensure that there is a level of asset fungibility, where we are able to use the same asset to drive production for intermediates, which will go into other applications such as pharma and personal care. Revival is fully realized, we will have more options than we did 1 or 2 years ago because we will have more products commissioned across a broader range as well as we will have gone downstream to be able to have a greater security about the future of these assets.

Sure. And just a follow-up on that. Within AI, is there any specific segment wherein the pricing or the competitive pressure is significantly higher, maybe Fine & Specialty or Basic Chemicals or even DASDA?

So pricing pressure, of course, is significant on products such as DASDA and there is a pricing pressure on a couple of Agrochemicals. In another couple of Agrochemicals, the situation has been on an improving track. I wouldn't say that it is where I would like it to be or where it has been in the last few years, but it is on an improving track.

Okay. Great. And just a second question on our medium -term expansion into phenol acetone downstream. So there was a tech tie-up, which I think was pending on the B PA side. So what's the status there? And from a tech perspective, are we more or less done across the product range that we are looking at? Or there is still more to go?

Oh, bisphenol? BPA?

Yes, bisphenol. Yes.

I think we're at the final leg of concluding all that. The other licenses have already been tied up. Polycarbonates, as we've mentioned earlier, we are in a unique position where the equipment, the license, the final product trademark as well as our anchor customer all happen to be the same name, which gives us a great degree of confidence, not only in servicing the Indian requirement because of our compounding facility that we've already put up. But we've already started servicing the domestic market as well as the anchor customer, which will be located in Europe and will continue to consume product that comes out of this plant. So I think we are well placed with India's growing demand as well as our anchor customers' expected demand.

The next question is from the line of Abhijit Akella from Kotak Securities.

So just a clarification on the Government incentives. So number one, this was for 10 years, so how many more years does it continue for? And if I heard you correctly, you mentioned that there was some accumulation of the incentives this year. So for what period exactly has this INR 161 crore number have been received?

Abhijit, I mentioned that on accrual basis, INR 60 crore to INR 70 crore is the accrual every year. This is till December 2028. Okay. But then you make further investment, you further qualify for these incentives. So when we are considering the larger projects, we fall into a mega project scheme where the schemes are again better. And for such incentives and these things will continue there also. But on current results, what Government does is that they release 80% and 20% is withhold until they do the final verification and certifies that. So that was completed last year. So we got current year as well as the accumulation of past year of 20%. But henceforth, it will be INR 60 crore to INR 70 crore on an accrual basis, for the existing investment.

Right. Just to clarify, so is it fair to assume that out of this INR 160 crore, maybe INR 60 crore or INR 70 crore would have pertained to FY25 and the rest would have pertained to the previous years?

Yes, this is fair.

While we make this happen, obviously, they will have their own period of time. So that will be accrued separately because they will be separate investments.

Yes, sure. And I guess the commissioning for that would be basically from fiscal 2028 onwards or thereabouts, right?

Yes.

Correct.

Correct. Okay. Got it. The other question I had was just on the normalized margin outlook. While I understand that for the next couple of quarters, it's very difficult to hazard a guess. But when you're alluding to a more normalized level from a full year basis, is there some rough range you could point us to for the 2 segments regarding where margins could end up normalizing in each of them?

I think it is probably not the right time to be able to answer that. We believe that the normalized margins should be higher than what they are right now. Whether that happens in 1 quarter or 2 quarters or 3 quarters, I don't know. But we're confident abou t an annualized margin, which is higher. So perhaps we see how the situation plays itself out, there will be pockets of opportunity even in the short term, it might look disproportionately higher than it should be. But I just hastened to say that it doesn't mean that Q1 and Q2 will be low and Q3 and Q4 will be high. So we are positioned in a place where we are able to take opportunities and those opportunities may be short or medium term in nature. They may be long term in nature. So we will r emain agile, and we will always ensure that we are giving a high degree of transparency to investors.

Just a couple of clarifications on phenol. I know last quarter was a difficult one because you had mentioned the perfect storm. Given that you've been able to run the plants a lot better in this quarter, just wanted to get a sense if we've been able to recoup the market share that we lost last quarter to imports and possibly increased it because we obviously expanded our capacities. And as an extension, I think you had mentioned that you will see some relief from the import pressures after March. Just wante d to get back to see if that has been happening as you were guiding in the previous quarter?

Yes, yes. You are right in this, Vivek. Of course, we are not losing any market share, it remains intact; in fact, it's growing. We go on debottlenecking capacities and the market a bsorbs whatever we are selling. We don't see any pressure on market share as such. Q4 did face some pressure from raw material pricing, but Q1 — though Maulik has told me not to hazard a guess, but I’ll still hazard a guess — Q1 is much better for phenol compared to Q4 , as raw material prices are returning, cracks are going back to earlier levels. So I can say, things are in place. We are able to sell in the market, whatever volumes we are supplying to the market and cracks are also getting improved cracks. So see, whenever we talk about something, we'll have to see the Deepak Nitrite product portfoli o. Fra nkly, we are into domestic 83%. Domestic market is growing. Domestic market is stable and though there will be some pressure here and there in one of the quarters, but overall, domestic markets are doing reasonably well. Exports, we are facing pressure, maybe somewhere because of the export dynamics, what we are facing outside geopolitical situation in this. So phenol, so far domestically, we don't see much of a pressure on that, which is a large r section of our business. When we talk about AI and all these things, there also, if you see it's not that there is a pressure on product volumes or anything. It's only because of some concerns on this, but that is also now more or less getting in a stable situation now, it will fu rther improve from here. I mean whatever we have seen up till now, I think we have seen the bottom, that’s all I can say. Future looks very bright, not that and with all the commissioning in a phased manner, we are very confident we'll go on because it's already done. I mean nitric acid has already started, the CNA part of it. So, with all these factors, we expect a very good year ahead, and various steps have been taken to support this. This R&D and small, small things, which Maulik was highlighting, we must realize how are we differentiating our product, how the efficiencies are getting improved , like nitric acid equation, the supply starts from pipeline. And many things are done internally because see, the external environment remains external, but we are doing so many things here. So I see a good year and next year we will be further better because of steps what we are taking. I'm not talking about the global uncertainty, what is happening. But by and large, things are in control from our side. We don't see much of an issue in running our plant operations and the commissioning of the plant. So I'm very optimistic about this, though cautiously optimistic, that's the right word Maulik has used. But yes, I mean, this year should be better than last year because we have seen the bottom, which I feel.

No, I totally agree. One thing that we have learned from last year is that maybe we need to have a much sharper messaging about when we do our regular shutdowns for cleaning and maintenance because when we announced it, we announced also the period of time that we will have a shutdown as well as the fact that we would have inventory. But I think a lot of traders because of the country's large dependence on Deepak, which has served them well, they anticipated for whatever reason that we may extend our shutdown or they wanted to derisk themselves. So we had much more of an import coming in, in the end of October, early November to compensate for a perceived extended shutdown, w hich never actually took place. We were, in fact, able to start back up at a shorter notice along with larger asset available capacity debottlenecking also. So our increased capacity came head-to-head with an increase in imports. I think maybe we can learn from this, improve our communication strategy that we put out to ensure that this kind of situation gets avoided because at the end of the day, our customers just want to feel secure about the availability given the face of uncertainty in geopolitics.

The next question is from the line of Arun Prasath from Avendus Spark.

So first, Maulik, just coming back to the technology part on our phenol polycarbonate integrated project. You said bisphenol is in the final stages, but have we finalized for the new phenol acetone complex? Or is the technology licenses finalized or we are just continuing with the existing one that we have?

I won't answer that question. I'll just say that it has been finalized.

Okay. All right. And also , you said that from the polycarbonate project, the anchor customers' expected demand is very healthy. So, can you indicate what percentage of our overall polycarbonate capacity this anchor customers expected demand would represent?

I know I'm saying this a second time to the same gentlemen. I won't answer that question as well. Frankly, that is part of the discussion that we are having. And if I answer that question, I'm giving away any leverage. So we are in conversations and what we are telling strategic partners is that once we have commissioned their interest in working with us is well noted, and we are happy to be their partner of choice because we're able to service them with technologically trademark products. If they can help us debottleneck fast and further expand capacity quickly, then we will be able to service them faster. So leave us with that little bit of leverage for negotiation. But rest assured that our first priority is to ensure that our anchor customers as well as the domestic market are both well served.

Okay. All right. So that's fine. On the compounding facility you spoke about, when do we get to see some kind of revenue traction from this facility? Is it this year, next year? What stage are we in, I know you mentioned that you have sent feelers to the customers, but are we in a stage where we can confidently go and sell and book revenue in this? And what is our aspiration in the next 2, 3 quarters or in the medium term?

No. So just think of this as an R&D center. Now it is able to make in terms of the total throughput, much larger than what you would expect very often in an R&D center, sometimes even larger than a standalone plant. But it is still to be considered as an R &D center. We have generated revenues already in the last year, we will extend that this year. But these are all to be considered as in a chemical, what you would look at it as a PO for a piloted product. So when you're talking to customers and you're scaling up your production in order to give them confidence that these are plant representative samples, right? And that's what they pay for. When you send them a lab sample, they don't pay for that. But when you send them a pilot sample, a larger volume, multiple SKUs that they do pay for. But still, I would consider them as R&D projects to build customer confidence. Moving forward, as we're able to have them do their extended testing in multiple environments, temperature, conductivity, those other things, then they will expand into full -fledged business SKUs. So we've already started seeing value. We've already starte d engaging with customer ’s long-term contracts, but these are still pilot products.

The response what we have got from our customers is very encouraging. Product is getting acceptance. Frankly, this is field marketing, what we are doing to ensure that when we come up with phenol plant, and we are ready with this facility also on a larger scale, so again, I mean, back-to-back, we have integrated facility of compounding also. And the idea is that next phenol plant will be consumed captively rather main product in the market.

And this is a change for our strategy because the traditional thing that Deepak would do would just be to manufacture the resin and sell the resin. Now while we will do that, we will also ensure that we are selling compounds, which are made using that resin and other smaller raw materials, which have significantly higher price as well as margin, but have a significant approval cycle. So we are starting that approval cycle earlier before the PC plant comes up so that we can then reduce the amount of resin that we sell in the market and increase the amount of compound that we sell.

Typically, what is the approval cycle in months? Is it 24 months, 36 months?

For some products, it can go from 6 months to other products in things like medical devices and all that, it can go to even 36 months. They're obviously much, much higher value. And because of that, there is a very strict regulation and control. So I mean, we've been working with potential customers in multiple segments including EVs, including switches, including furniture as well as medical devices.

So what I understand is some of these approvals needs to also come from the customer's customer. Is it the right way to think? Because 36 months is too long.

No, it is not as long , see, we look at it from a different perspective. 36 months for something, which is going to be around helping people in difficult situations where things cannot be repaired easily. And these will last with the customer, the consumer for decades. 36 months is a fair thing and the Government India as well as states, they've been very supportive. I would not put too much worry into the fact that something takes 36 months. It takes it because it will be there as a consistent business for decades to be.

The next question is from the line of Kumar Saumya from Ambit Capital.

Just a couple of questions. On the compounding facility, is it the same capacity that we had indicated earlier? Or has there been any changes there?

Okay. And, any indication on what is the revenue that we have booked this fiscal from the compounding facility?

No, I won't answer that question right now because it depends on what products get accepted, when the same customer expects maybe different SKUs for separate registration or approvals, those things. So we are working together with multiple customers and mu ltiple segments. So yes, it's too early.

Sanjay, sir, if you could just give us an indication what is the cash capex for this fiscal?

This fiscal, it won't be that high because we are almost at the verge of completion of all our earlier capexes. This should be in the range of INR 1,200 crore to INR 1,500 crore out of whatever we have announced, that INR 8,500 crore plus the residual of the earlier. So out of around say INR 9,000 crore, INR 9,500 crore, our cash capex for this year should be around INR 1,500 crore.

The next question is from the line of Aditi Loharuka from CD Equisearch.

I would like to know that how much is not so modest capex justified in the light of uncertainties in global trade in general and chemical industry, in particular?

Capex justification, are you asking?

Yes, sir.

What I mentioned just now?

No, in general, I think.

I don't know if you're asking about the capex approvals what we have got from the Board about INR 8,500 capex, these are all well thought of strategy and well -integrated business strategies. Going backward, going forward, like compounding, like nitric acid, like polycarbonate. So , I mean, market remains what it is. But how resilient business you are creating is very relevant in this situation. If you have to answer the question on this, we can answer it confidently, we have that backward in tegration, forward integration and all kind of efficienc ies in place. So capex justification, in any case, this capex is going to take time. It's by December 2027, we'll be ready. I don't see much of a problem in taking these capex decisions, whatever we have taken. I can understand if we are entering into some other, but these are all very well-known sort of strategies what we are following.

I'll just add one point to that, and I say this with unequivocally, I think that Deepak Nitrite has the best investment thesis in the chemical industry in India. Across the segments, across the company sizes, the investment thesis that Deepak has is attrac ting interest across the globe. So there's no question about the fact that we have made the right decisions. Now sometimes you do have project delays, and those are regrettable. And we have to work hard to see how we can always keep on improving on those fronts. But if you're asking about why we are investing, what we are investing in, I think that you will have a remarkable resilience moving forward and we are exactly where we need to be in order to take the best advantage of the geopolitical global situation. Yes, we have a large neighbor in China, but that does not change the fact that India has significant headroom to grow and Deepak has made the right choices for investment.

At the right time also.

Yes.

That's very important—at what point in time you make decisions matters. Delayed decisions do not help. If you have a strategy, it's crucial to make timely decisions, and we have done so, following the right execution philosophy.

Okay. So, what is your strategy to handle trade uncertainties in near term?

That's a whole separate question, and it cannot be answered over an investor con -call. Our strategy involves working with our internal operations. It works with external customers, and it works to see how to make certain assets fungible to be able to apply to multiple applications. Beyond this point, trade uncertainty is a fact of life, which we should be poised to take advantage of as well.

The next question is from the line of Sanjay Kushwaha, an individual investor.

My question is, the polycarbonate and BPA products comes from petrochemicals and may face more regulation in future. As the world moves toward greener and safer materials, how are you planning to manage this transition?

To be honest, the world is moving towards greener solutions and that is a wonderful thing that companies around the world are doing. But the interesting thing is that the product that will come out of these systems will be required to house these cleaner a nd greener processes. When you have an electric vehicle, the polycarbonate that is used to manufacture the electric vehicle and to house the battery of the electric vehicle is also as required as the source of the fuel. So let me just give you this kind of assurance that moving forward, products such as polycarbonates will have different end users, but will be just as much of interest to the downstream customers who are also engaging in improving their sustainability. So it will be a slightly different SKU, but the core product will remain the same and in part a different physical property based on the requirement. So we may not manufacture more internal combustion cars and the polycarbonate resin that would be used for that compound will be the same polycarbonate resin, which is used for a compound, which makes an EV.

The next question is from the line of Huseain Bharuchwala from Carnelian Capital.

Just one point. So after the debottlenecking, what is our capacity, you would say, on the phenol plant?

I think we should have stopped much earlier answering questions about capacity because one thing that has happened is because of that, then you have licensers saying, "Oh, you know what, now if you're running it at that capacity, please pay us license fees for that." So yes, we are consistently ensuring that we have the asset debottleneck ed. Our focus is to ensure that we maintain and grow the domestic market share. So with the current capacity, we will continue to find ways to optimize further. And which we've also signed up for greenfield plant because we are seeing that we will soon, not right now, but soon maybe over the next 6, 8 months, reach the kind of ceiling that we can expect from this asset. So we need to work quickly to see that we have corresponding greenfield asset, whi ch will service the polycarbonate assets as well as the market.

The next question is from the line of Meet Vora from Emkay Global.

I have just 2 bookkeeping questions. First one is that what would be the accounting treatment for this Government incentive income? Will we be doing this consistently on a cash basis or on an accrual basis, as this INR 60 crore, INR 70 crore of income is more or less certain that we are planning to accrue every year going forward.

You have to leave something for me and the auditors as well, right? If I answer your question here, my auditor might raise it later. I understand the dilemma, but we’ll take a call. Let me also discuss it with the auditors.

Sure. And just secondly, on the interest cost every quarter or year that we can work with, as I see that there's been a debt increase to around INR 1,000 crore by the end of March this year. So if you can give some indication over there?

Frankly, we have about INR 900 crore in cash lying with us, so our net debt is minimal. This borrowing was done primarily to ensure smooth cash flows. Secondly, we’re also putting pressure on our team—our previous habit of borrowing had completely gone. So now the focus is on whether we have strong negotiation skills: are we getting the best rates, the best opportunities, like the 14-year term loan? These aspects are being tested here, even if only in a smaller way. I could repay this loan today—there’s hardly any debt to speak of. But this borrowing was done for the new company we started, DCTL. So this is what we have done. But frankly, I have no pressure on debt at all.

Correct. Because gross interest cost ideally should be in sync with that INR 1,000 crore. That's why I was asking, but I understood your point.

And also there, it will be in other income, right. So the net interest also will be hardly anything. And then it gets capitalized also. I mean there are several factors here, hence it's a bookkeeping question.

The next question is follow-up from the line of Arun Prasath from Avendus Spark.

I was asking about the capital work in progress, INR 1,600 crore we have in our books as of March 2025. So apart from the long-term projects, can you just help us understand what portion of this is getting commercialized in Q2 and Q3?

So, all the projects, what we had earlier announced for INR 2,000 crore, INR 2,200 crore are getting commissioned in the current year. This balance will be whatever we are spending, say, phenol technology or the polycarbonate technology and this gets spilled over to the next years. But other all earlier announcements are getting completed by this year.

So majority of this will be capitalized this year?

Yes.

As there are no further questions from the participants, I now hand the conference over to management for closing comments.

Thank you all for joining this call. In case you have any further questions, our team can answer that. Thanks once again for joining this call.

Thank you.

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