Vardhman Textiles Limited analyst Q&A

So my first question we have sp oken of MMS becoming larger portion of the overall pie. How does it alter our competitive dynamics of the country and what are your thoughts on what can help our company to grow and get bigger share of MMS in the coming future, let us say next five to seven years?

Definitely if you look at the world consumption the MMS is much higher than the cotton so it is almost 70% in favor of manmade, 30% cotton whereas the Indian situation is reverse of that we 30% MMS, 70% cotton. We are finding even for the Indian brands or outside whoever are buying 100% cotton I think definitely improvement or there is definitely demand for these blended yarns whether it is mixed with the viscous based or it is mixed with the polyester based. So definitely we have gear ed up ourselves for the demand for the bl end increases. On the spinning side we do not have any issues and we have created those capacities and depending upon because the spindles are almost same , it is formation changes in the preparatory which are required to do the change. So to that extent a t Vardhman there is no challenge to us and we can increase whatever is the blended capacity which comes in or even 100% synthetic manmade fibers are concerned on the spinning side. On the fabric side also I think we are we are definitely improving already have a good experience of blended as well as the manmade fiber production so as far as the blended fabric is c oncerned, not much of a challenge but on 100% manmade definitely there are some companies, some technologi es which specialize on the manmade side. So since as of now there is not really much of demand, but at the same time going forward there could be a possibility. So we started evaluating th ose difference where in case we have to look at 100% manmade based fabrics how do we go on th at? So we are studying it from the revaluation and maybe as the demand grows all studies should be completed. Our experiment should be okay and maybe by the time we find the actual demand start coming in, we will definitely add tho se equipments which can help us in processing the manmade based fabrics more efficiently . We can do it today also on the cotton line . There is absolutely no concern or issue, but I think going forward if 100% manmade increases, we can be equipped ourselves. There is no really a very big time required for the same s o to that extent we have already starting working in evaluating those technologies.

The second question is in the business of spinning and fabric manufacturing besides utilization of facilities and procurement of cotton, what are the key focus areas for the senior management?

I mean of course you mentioned that the first focus was how to utilize the full capacity . The moment you start utilizing full capacity your cost starts coming down. I think we focus as more and more brands are coming to India, people are talking about China plus one so all these brands which comes in, they require a very different service level where they will be requiring different kinds of fabrics and they will be definitely requiring more mix of manmade based products also. So getting to all those change management something they require, all the kind of special orders they require , all the sustainability information and data they require because a ll these brands which comes to India will definitely start looking at better managed compan y for them to go to very, very small companies for every product it would not be possible s o both on the fabric side as well as on the spinning side, they are finding whichever bran ds wants to come, they want to look at one or two sources only where they can depend more on that. Once they start coming in, their requirement of sustainability, equality, different products, different service lines, it is a different ball game altogether for every brand. I think as of now the entire energy is going in whenever these customers are coming in how do we cater to them, how to we understand them, how do we create business model with them. We have to start supplying them products because a lot of these products are today being imported from China. China has manmade products, they are on the blended based products and those are the challenges where the organization is looking at and once these brands are here for longer period of t ime I am sure this will give us lot of opportunity for growth as well.

Sir my last question is, we say that we are the client centric company. What does it mean and how are we different from other companies in the market?

I am sure today everyone has to be a client or a customer related organization , customer centric organization. The only point is there whatever service lines are required, whatever the customer needs, customer demand, how fast can we meet them first hand right . So many times the customer requirement I want products in these many number of days or some there are some urgency, there are some different products which there have, they are sampling requirement. So there is a cross learning from one plant to the other. Yet these are the products and also for our own development and cop ing the customers development. I think the amount of focus being given in Vardhman on the customer related issues, I am not saying the others would not be giving but definitely we feel we definitely give lot of time and energy to that. Second is recognize the customer requirement so there are lots of companies where they have a policy of selling for one month only or maybe on a deal to deal basis. We are open some customer want season pricin g, some customers want to deal to deal basis some customers want a three month pricing some customers want whatever model they require we are trying to fit it into our system, whether for yarn for fabric s o many customer will say I will not change the prod uce pricing during the season. So you give me a six month pricing now s ome of my customers ask me even for yarn nine months pricing so whatever is their requirement which is fitting into their business model, we are trying to look at that we should upgrade and we sho uld be in a position to take that risk and give that product to the customer so that we can fit into that. Third is the customer should not suffer maybe because the quality for example, the quality of cotton has been very bad two years back but it was our decision that we will not let the customer suffer on account of quality. So whatever was the cost we incur that because we find it may be a loss for a year, but if you lose customer confidence, probably you will lose them forever. So at Vardhman we have always been looking at the customer should not suffer. They should be in a position to get what they require and to that extent whatever internal systems, processes or cost is required if we are not in a position to give and neutralize that , we sh ould be in a position to gear that so that the customer continues to remain with Vardhman.

Okay Sir thank you. Thank you so much for your detailed reply.

Thank you. Next question comes from the line of Resham Jain with DSP Asset Managers. Please go ahead.

Hi Sir good evening. Thanks for giving a clear update on the sector, so I have a couple of questions. The first one is just with respect to let us say upcoming quarters, first half has been single digit margin overall and I presume yarn would have been significantly lower while fabric would be double digit but how do you see based on your current order book and the current cotton in hand margins to behave let us say in near term?

So at least for the current quarter going by the today's situation, I do not think there is likely to be any major change from what we have seen in the first two quarters. Most of the yarn orders today are not beyond one and half months or two months. So I think depending upon how t he prices goes, how the cotton goes, we will have to wait for the fourth quarter number. But going by the current situation, the third quarter is likely to be aligned or in line with the second quarter.

Okay and in terms of margin, how are the margins different between yarn and fabric right now?

So what we mentioned that the yarn will be significantly lower in a single digit and fabric will be med double digits that is where we are.

Okay and in terms of the situation, you mentioned about the inventory situation at the retailer level, but generally mil ls used to keep two to three months of inventory earlier pre COVID and all are you seeing that situation coming back because most of the mills are now keeping yarn for a very less period so is this the new normal?

No the yarn stock with the mills even pre COVID the norm has always been less than one month so in between these yarn stocks increased because the spinners were not in a position to sell otherwise the norm has always been less than one month and even that continues. So if mills are not in position to sell, they may increase it temporarily but effectively at the end of the day they are always looking at inventory to manage within one month maximum.

Okay and Sir generally you have been quite confident about scenario improving over medium to long term and obviously some of our investments we have deferred given the uncertainty in the situation right now and obviously companies which are strong in terms of balance sheet would typically take advantage of these low cycles to either put up capacity or to maybe acquire some companies how are you thinking about it given that your medium to long term kind of expectation is there in terms of improvement?

The way the situation looks to us. One whatever is the demand happening in the worldwide, it is less so this is not really giving us big concern because everyone is in the same boat. It is a matter of time. Interest rates will come down, things will be alright and whosoever is an efficient player, they will survive this period. Some of the weaker players may go out of the business and all good companies will start making good money once this situation is normalized. It may take three months more, it may take six months, nine months, 12 months. So that is really not a big concern to us as of now and we are very confident as the things will start improving, we will also start working well. So there is no issue to that extent. The only concern we as an organization or as industry have as of now, we have an import duty on raw materials in India. In case the Indian raw material continues to be on a higher side because of their duty component then whether the India will be in a position to really be viable on the sp inning side that is nothing to do with the wor ld markets or the demands. That is something to do with India itself, because we are not the only supplier. India is not the only supplier so suppose our cotton is expensive there will be Pakistanis, Vietnamese or Indonesians, will they not get the chance to create capacity and sell in the export market if our raw material is expensive. That is one larger concern where we have to look at as a country how are we competitive which should be in comp arison to the world markets. So that is the second point we have but having said that, I still find there will be lots of opportunities for the Indians spinners also so to that extent, now there are two choices available. One that we keep expanding the ca pacities, but suppose tomorrow whatever I have mentioned if that does not get resolved. So to that extent I think th e spinning margins will always be concern or a question mark. So the second part is that why not to create some infrastructure or some capab ility, some debottlenecking where once these kind of a brand business comes in, you are in a position to cater to that and maybe you reduce the basic product. I think Vardhman strategy is more on the modernization or a de bottlenecking side as of now and we are trying to look at in case we can create those capabilities going forward probably whenever the opportunity comes in we should take advantage of that rather than only expanding the capacity and all our thought process as of now are going into that. Just to give you an idea normally we have a normal modernization in the spinning business, about 100 Crores, 1 40 Crores a year , b ut I am sure this year going by the situation or the opportunities we are looking at, we are creating capabilities where we have increased or enhanced our modernization plans and we might look at it instead of 150 we might spend 300 Crores on the modernization for this year, maybe a similar amount in the next year. So that we create those capabilities if those opportunities come in, we encash that with a better margin rather than just creating a top line numbers only.

Okay understood and Sir last one is on capex this year what are the plans . You mentioned 300 Crores for modernization, but is there any other capex other than that?

There are some small projects within spinning which is being considered under evaluation and I hope once if we are in a position to start implementing that it could be maybe another 100, 150 or 200 Crores, but not really any very very big project as of now. So I feel the typical capex for the spinning maybe about 300, 350 Crores because even if we start taking some project this year, th e expenditure will not be there and maybe another about 100 odd Crores for the fabric business so the totality could be 350, 400 Crores.

Okay nothing on renewable power in terms of capex.

Actually in case of Vardhman Textiles we have already entered into a n agreement with Renew Power Company for supply of solar and wind power t o our MP unit which is spinning mill so partial power will be supplied through this project and implementation of the same is expected in the next 15 to 18 months. So that is already tied up project and otherwise also we are exploring the opportunities to expand the solar and wind power where we can see that our renewal power composition may be improved within the overall energy consumption in the company.

The first part which Rajeev mentioned it is through the SPV where our contribution will be very less so in terms of our capex, it may not be directly into our company, but it will be by S PV so it may not be appearing directly into our books because we will be holding only 26% equity in that company. We are considering some other projects. We a re yet to take a final view whether that happens by way of SPV or it is a direct investment in the company. So all those options are there, but definitely we are evaluating seriously to create a bigger capacity which I am sure next maybe two, three months we should be in a position to take a final view on that.

Okay great Sir. Thank you and all the best.

Thank you. Next question comes from the line of Avnish Chandra with Smith. Please go ahead.

Thank you very much for this opportunity. Sir in the initial remark you have touched upon all the points very briefly, but still continuing the discussion on the margins that if I look at your 10 years performance or even five year performance and even I exclude 24% while a marg in and give 20% margin still even bad ugly whatever may be the situation we used to do 13-14% all the time so last four quarter performance was way below. So is there any structural change you are seeing and that is the reason we are not even able to make 12-13% because that was the norm even in the bad years of 10 years. So looking at such a long data and hitting 9% below margin still does not add so any structural change you are really seeing in the market for the margin perspective?

No. There is no structural change at all. This is only since the demand is not there because of very high inflation in US and Europe, where the priorities have changed as of now. Gas prices are very very high. Those are the issues and concerns, interest rates who have see interest rates of 5.5% in US in last 20 years. Nobody has seen that. So I think those are the issues and concerns where this concerns are started coming in. I think now most of the time we are hearing or we feel that the interest rate increase may not happen in USA or maybe there could be one or two tranches which can happen and after that once the inflation is under control, their interest rates starts coming down, gas prices should normalize so by that time I think the thing will c hange. But as o f now, since the problems are much bigger over there or are very different over there, which are the biggest consumption centers in the world so that is where these issues are coming in. The overall demand of textile product is less and if the demand is le ss to that extent, I do not think anyone will be in position to make money because it is not only Vardhaman or India, most part of the textile industry in the entire world is passing through the same time.

Okay understood. So there is no is sue in this structure it is just a current situation and Sir one bookkeeping thing, how much cotton in entry currently we are having.

So the India cotton season ends on 30 th of September where anyone or everyone in the system will have a bare minimum quantity. So maybe because the season ends and the new season starts in so we also are in a similar situation where it is the change of the season and I think typical inventory may not be more than 30-40 days in the factory as of now. Of course we started buying as the new arrivals have started coming in a nd maybe next two, three months we should be in a position to build it up.

Okay and Sir one last thing, continuing the discussion of modernization you have talked about. So we are n ot going to focus on higher t onnage rather than your focus will be on product mix because when you say modernization, it is not increasing the output but change the product profile is that correct?

So there are a couple of things in the modern ization which we look at. One is the product profile change, two, sometimes because of the higher speeds, some of the machinery will be in position to give you a better output also, three, many a times there is one bottleneck machine because of which you cannot increase the overall production so if you are in a position to improve upon that the overall production can improve and maybe there are couple of modernization which are directly linked with the pay backs in terms of the improvement or consumption im provement in the electricity or compressed air etc., so there maybe some of the modernization happens because you require to be better in terms of safety etc. So there are different parameters to look at that and when I say the total modernization, all the se are a part of that and depending upon the opportunity, we will keep taking those things.

Okay but as such yet no plan to increase the capacity or whatever 12 lakh capacity.

Not in a bigger way in any case as of now.

Okay Sir. Thank you very much. All the best.

Thank you. Next question comes from the line of Prerna Jhunjhunwala with Elara Capital. Please go ahead.

Thank you for the opportunity. I just wanted to understand you wer e holding lesser quantity of cotton at the end of last year and there was a lot of volatility of cotton prices in the last three to four months given your balance sheet, you would have procured cotton at lower prices. Then what restricts little better marg in than last quarter? I just wanted to understand from that perspective.

The cotton prices have started coming down in last two to three weeks only because before that the cotton prices were in the range of Rs. 62, 63, 64,000 a candy only. It is only last 2 -3 weeks where the prices are coming down to Rs. 57, 58,000 a candy and again we have just started buying because still the arrival is only 100,000 ba les a day. The overall consumption in India is also about 80, 85,000 bales so the best possi bility for the mills to add is only about 15 to 18,000 bales if everyone is buying on a one day basis, maybe some of the spinners may not be buying so some other mills can actually build up some more inventory. So it is only the starting of the season. The prices have come down only now and also whatever the prices drop happen in India, I think the yarn prices for the last six months are continuously going down only. So even if the cotton prices comes down in India because the New York future has come down, so the overall yarn prices are also reducing. So the possibility of margin improvement even with the lower cotton prices is not looking like it as of now.

With increase in fabric capacity utilization, we should see some better margins?

Fabric yes, the spinning is still a significant part of the company, so unless the spinning improves, the overall margins may not improve significantly.

Okay so Sir what should be the sustainable margin in the spinning i ndustry given that import duty does not go away on cotton for a longer time and do we continue to report such weak margins because that is one of the main hindrances for a better operational performance?

No, there are three factors to this. On e is import duty that is only one of these factors. So if you look at today's cotton prices, international and today Indian prices, there is no disadvantage to the Indian spinner as of now even if there is an import duty so that is not impacting as of now . The impact today is more coming from the lesser demand , unless the demand improves and that demand will definitely improve New York future also and in case New York future is at 85 -90 cents, then the Indian concerns will not be there of MSV . I think all three things are related purely the import duty on cotton today is not hurting us. It is demand which is hurting us the most as of now and whenever that improves, I am sure the demand improves the cotton prices internationally will also improve and once that happens, the Indian prices are also aligned to that so to that extent, I think there is no disadvantage. So it is very difficult to say it is only because of the import duty, the prices of cotton in India is higher and the numbers are not sustainable , no. Today the biggest concern is coming from the demand side.

Okay a nd if I want to understand a longer term picture for Vardhman from three years perspective how should we look at this company from growth or margin perspective from a t hree to five year perspective, I am trying to understand.

We have lots of plans which we are prepared but at the same time we are a very very conservative company and we are always looking at that whatever we have we should be in a position to sustain it, pass through, all kind of difficult times successfully . Going by this kind of situation now let us look at another situation the MS P in I ndia Rs.7020 as of now which is equivalent to Rs.57,000 per candy which is equivalent to 86 -87 cents of co tton tomorrow New York future goes down to 70 cents our cotton will not come down to below that. We will not be in a position to import because of the import duty so which means will be on a very very higher side so our concerns and questions are only that unless there is a clarity because if the import duty is not there then there is no issue. We will also import at lower prices but we cannot import because there is a duty. We cannot buy in India at lower prices because there is MSP so whether in these conditions one should expand in a big way so better to wait so better to wait for a year or two till the time we get a clarity on the thought process what the thought process uh in terms of the economics of this industry and once we are clear that whatever pl ans we have and implementing that will not take us much of a time it is more of a clarity required on as a country our competitiveness that is a debate we are having so to that extent we are we do not intend to really spend huge amount and creating a trouble for company at a later stage or else we get really a very nice plant at a dir t cheap price so where you are in a position to take risk so there is nothing as of non cost but if something like that comes in we take a call on that.

Understood Sir. Sir what are the plans in fabric business given that we have crossed 80% utilization and the demand in woven fabric is improving now.

So fabric is the first time where we have started utilizing at least not even 80% we are crossi ng even 90%, 95% also I will say. The first time since this line was implemented just before we are in a position to utilize our 100% or most of the capacity want to sustain it for a couple of months and once we are in a position to see the sustainability definitely we look at expanding that business or maybe adding something over there rather on a manmade side or something like this so I am sure rather than the spinning I think it may look at an opportunity where something could be coming in where maybe we will wait for next couple of months so whether this demand is sustainable or not and we will take a fresh view after.

Okay understood Sir. Thank you Sir and the all the best.

Thank you. Next question comes from the line of Rahul Soni with ICICI Bank Limited. Please go ahead.

Hello. Yes thanks for giving me the opportunity. Sir I would request you to throw some light on the overall utilization level for the spinning industry and also if you can provide some insigh t on the utilization level at the SME level.

So our estimate and there is no industry related data which is available, but we keep doing surveys, we keep talking to our vendors, we keep talking to the various customers of the different stakeholders in the industry. Our feeling is on the spinning side, it is almost 90% spinning utilization is as of now there but having said that, whosoever is a vulnerable player especially the SME, the utilizations have started coming down. There are lots of com panies which have started stopping on a Sunday or maybe the partial capacity 10 , 15, 20% has been reduced so most of the good managed companies, large one they are running 100% utilization and the SM Es or the more vulnerable or financial weak players the utilization will be surely much more so we estimate as of now the spinning utilization could be in the range of maybe about 85 to 90% in India.

On overall basis.

Okay Sir second question on your modernization, so wi ll there be any impact on the margins or post the modernization of the plants.

Immediately no, it is only you are creating the capabilities so if they differentiated or better product from them so as I mentioned again, there are some moderniza tion which is happening only because of the quality plant. So the new machines are coming with the better technology and if you want to continue your preference from the customer side, you might have to change those things even if the profitability is not there. Our modernization includes the debottlenecking, the modernization includes where you have a direct payback. The modernization includes where you have a safety issue. The modernization also includes where you have a preference from the customer so all these four, five factors are considered where we are spending money so that even after 56 , 57 years old company customers should not have a disadvantage of working with someone whose technology is not to demand.

Sir one last question. S ir what are the factors which affect the spread between the cotton and cotton yarn apart from those up down in the cotton prices?

No only demand and supply. The yarn demand is good the spread will improve or vice versa. Only and only demand supply nothing more than that.

Is there any range which is considered healthy for the spinning industry?

So the industry has always been talking of healthy margins at $1 spread which as of now most of the industry is working with 50 cents to 70 cents spread.

Okay Sir thank you.

Thank you. Next question comes from the line of Amit Khetan with Laburnum Capital. Please go ahead.

Hi good evening and thank you for the opportunity. Sir if you could just share w hat was the realized cotton yarn spread for us for the last quarter and where is it currently?

So I can give you the purchase number it will not be more than 50 to 60 cents and the current spread is also like the same.

Is my understanding correct that just getting back to the path of normalized spreads of 90 to 100 cents that is just a matter of demand and nothing else?

Okay and you talked about the industry utilization India at 85 to 90%, would t hat be a similar utilization for global yarn industry?

Almost same.

Okay a lright. And lastly is my understanding correct that the import duty is an issue for the industry only when the global cotton prices are below the MSP?

Not really. That is surely an issue when it happens but let us look at the last year, the last year cotton prices international was not low than the India, but the entire chain came to know the import cannot be done and the overall crop was brought in such a way, I mean generally if you look at the Indian cotton season, the crop will start somewhere in October and by March the 90% crop will be over. But since the entire chain understood that the import cannot happen, so they calibrated the entire ar rival of cotton and the old cotton kept coming till September against February or March as the farmer was bringing in only what is required on a daily basis, so they never allowed the mills to increase the stock and the prices kept remaining very very high, so it is not only when the New York future comes down, but under normal circumstances once you know the crop is less or you know that we can calibrate the cotton arrival so that mills could not make the stock so that issue is also there. Tomorrow if the situation comes in where our crop comes down to let us say 295 lake bales our consumption is 310 so irrespective of where the New York future is will not be in a position to run the mills. So how will we work on this.

Next question comes from the line of Sarath Kumar with Value Research. Please go ahead.

Okay s o thanks for providing this opportunity. Most of my questions have already been answered, but I have a question more related on the strategical level so if you're looking at t he cotton prices and the demand supply scenarios and the impact that on the margins what strategically is the company is trying to do so that they can either safeguard itself from this volatile situation with new product mix or more market development scenario.

So it is not only that what we are thinking that what should we do in terms of product mix is basically a demand and supply. And I feel as the cotton prices keeps going up in the markets, the more and more brands as I have mentioned earl ier also will keep moving to the blended yarns. And we are also looking at very carefully wherever we are finding that this is a segment where the demand is increasing or improving we are creating those infrastructure, those capabilities and we are just moving our product mix to match so that we are not lagging behind anywhere. So all these modernization, debottlenecking I am sharing is also part of that where we have to keep investing so that whatever opportunity looks like in the product makes changes. We are in a position to gear up ourselves.

Good evening Sir. My question is as you mentioned that C AI has given a guideline regarding lower c otton yield so in case cotton yield remains on the lower side and considering import restriction, cotton prices may go up and in case Indian cotton prices further goes up and international cotton prices remains at the same level, so again th e spread between India cotton and international cotton may further expand. So what is your outlook on this regard?

As I mentioned, we still feel because the different industries have done the different surveys and we still feel the crop is not less than 320 la kh bales as of now, which should be sufficient to take care of us. I do not know the basis how they have come to th is figure of 295 lak h bales so the Ministry of Agriculture does their own service and their report is likely to come maybe in next two weeks or so. So I think that is a much more authentic figures where they take the ground realities and what is happening on the crop side. Let us wait for that and look at what happens but in any case if the crop is less and the import restrictions are not reduc ed, I mean the similar situation had happened two years also back and at that stage our crop was less. At that stage the Government of India allowed the import duty free import also for a period of three months or so. So maybe the government has to take a view once they know that the crop size is less and consumption is higher, imports cannot happen, they will have to take a view and they may allow which they did two years back. So we will have to only request the government that if the crop is less, consumptions are higher so this is a situation they will have to decide what they want to do with industry.

Thank you. Next question comes from the line of Amit Kumar from Determined Investment. Please go ahead.

Yes thank you. Sir just o ne question you talked quite a bit in terms of weak demand, so one of the opportunities that opened up for us is the UAE and Australia, F TAS essentially. So any thoughts on that, I mean is there possibility of these markets becoming a bigger sort of consu mer for Indian yarn and fabrics specifically with respect to the company as well, any sort of agreements that you are sort of seeing on the back of these FTAS.

All these FTAS which are being done definitely it is a big support to the country but having said that, most of these agreements whether let us say Australia, they will be buying only the garment so to that extent India has to gear up for the g armenting for the home textile and those products because these guys are not going to do the garmenting in Australia. So for all these spinners in India, it will be an indirect demand where if the increase happens on the garmenting side on home textile, we are in a position to supply yarn to the Indian counterparts who will be in turn exporting to these countries. But all these advantages will come only in the medium term because once these FDAS happen all these companies have to work with their own supply chain arrangement with India. They will have to look at the quality products. They will have look at the entire trust system which they want to create or the ecosystem they want to create. So medium term all these FDAS are a big advantage but if you are talking about immediate something will happen, no because these guys will keep buying from where the y are buying. They start looking at one by one product where they will come to India . They look at the quality . They look at the logistics. They look at the supply chain arrangement and slowly if things goes well they will keep building those capacities in India. Suddenly if something will happen in six months to one year time, no. I do not think that is likely to happen because even if there is an opportunity the customer would not change immediately unless they have comfort of buying from India.

Thank you. Due to time constraints, we have reached the end of question and answer session. I would now like to hand the conference over to Neeraj Jain for closing comments.

So I think as I mentioned of course there are issues, challenges wh ich we have explained and I am sure the entire industry is passing through the same. Having said that whatever internally are the opportunities in terms of improving efficiencies, reducing cost, finding opportunities, finding new customers I think the organization is really, really working hard. And for us the definite one advantage is that our weaving division has started doing well which will give us some support in this kind of a time to pass through this difficult time. Of course spinning being the larg est business we have to look at how it improves and maybe it is a matter of time one things start improving. In the meantime as I mentioned earlier also that whatever are the opportunit ies are possible, opportunities in terms of debottlenecking or product mix changes or the machinery improvements or the customer delight, we are working on that also. So that even if by the time the good period comes in we should be in a position to take advantage of that rather at that stage also we are not in position to su pply to them, so t hank you very much to all for you for showing patience to us in this kind of a difficult time. But in terms of our financials, management, thought process strategy and working on the different strategies the entire management is working r eally, really day in and day out to see how we pass through this difficult time. And I am sure the good time will also be available very soon so thanks for being a part of our call and anyone has got anything which is left because of the time constraint to day our investor desk could be contacted where we can fix up specific call where we can reply. So thank you very much to all of you.

Thank you. On behalf of Batli vala & Karani Securities India Private Limited that concludes this conference. Thank you for joining us. You may now disconnect your lines.