Balkrishna Industries Ltd
NSE:BALKRISIND
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Balkrishna Industries Ltd
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Good morning, ladies and gentlemen. Welcome to Balkrishna Industries Q1 FY '24 Financial Results Conference Call hosted by IIFL Securities Limited.
This conference call will contain forward-looking statements about the company, which are based on beliefs, opinions and expectations of the company as on the date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. And there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Joseph George from IIFL Securities Limited. Thank you, and over to you, sir.
Thank you, Lizanne. Good morning, everyone. On behalf of IIFL Securities, I welcome you all to the 1Q FY '24 Results Conference Call of Balkrishna Industries. From Balkrishna Industries, we have with us Mr. Rajiv Poddar, Joint Managing Director; Mr. Madhusudan Bajaj, Senior President, Commercial and CFO, along with other members of the senior management team. I'll now hand over the call to Rajiv for his opening remarks, post which we will start the Q&A. Over to you, sir. .
[Operator Instructions]. Over to you, sir.
Good morning. Sorry for that disconnection. Thank you, Joseph. Good morning to everyone, and thank you for joining us today. Along with me, I have Mr. Bajaj, Senior President, Commercial and CFO; Mr. Ravi Joshi, Deputy CFO; Mr. Sushil Mishra, Head Accounts; and SGA, our Investor Relations adviser.
Let me begin with performance updates. Towards the end of June, we faced disruptions on account of Biparjoy cyclone in the state of Gujarat. The operations of the Bhuj plant were suspended from late evening of 13th June. And while operations resumed on June 19th, 2023, it led to a loss of 5 days of production. However, the dispatches were affected for all the plants till June end due to disruptions at Mundra Port. This resulted in lower export volumes in Q1.
The total sales volume for Q1 stood at 67,209 metric tons. Domestic sales stood at 21,012 metric tons. This saw a healthy growth of 19% year-on-year. In Q2, we are faced -- we are facing challenges due to heatwaves and recessionary fears in export market.
On a positive note, the inventory-related challenges across the globe is now unwinding. However, we continue to see momentum in domestic markets. As guided in the previous calls, we estimate a CapEx spend of INR 550 crores to INR 600 crores in the financial year '24. Out of this, routine maintenance CapEx will be INR 250 crores to INR 300 crores.
The balance will be spent towards new product development like rubber tracks, giant solid tires to widen our product basket in the end market, along with higher investments in brand building and marketing efforts, which is required to reach our market share globally of 10%.
This market share aspiration will be reached in the next 4 years post next round of CapEx getting commercialized. With this, I now move on to operational highlights.
Our standalone revenue for the quarter stood at INR 2,115 crores, a degrowth of 22% year-on-year. This includes realized loss on ForEx pertaining to sales of INR 5 crores. For the Q1 FY '24, 45% of sales came from Europe, 31% came from India and 15% came from Americas. The balance came from rest of the world.
In terms of channel contribution, 72% was contributed from Replacement segment, while OEM contributed to 26% with the balance coming from offtake. In terms of category, Agriculture segment contributed 59%, while OTR industrial construction contributed 38%, and the balance came from other segments.
The standalone EBITDA for the quarter was at INR 487 crores with a margin of 23%. Other income for the quarter stood at INR 66 crores. Coming to the net ForEx items. For the quarter, we had net ForEx gain of INR 38 crores, which includes realized gain of INR 5 crores and unrealized sale of INR 30 crores. Profit after tax stood at INR 312 crores for the quarter.
Our gross debt stood at INR 2,861 crores at the end of June 30, '23, of which 75% is relating to working capital debt. Our cash and cash equivalents were at INR 2,245 crores. The Board of Directors have declared a first interim dividend of INR 4 per share.
With this, I conclude my opening remarks and leave the floor open to Q&A.
Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Aditya Jhawar from Investec.
Sir, my first question is overall on volume, we reported a decline, and you alluded that there was an impact on production as well as disruption on the port. But just wanted to check, how is the demand situation? And we had in the past spoken about inventory destocking. So where are we on that? And also lastly, when you look at breakup between agri and OTR, the decline seems to be more steep on the agri side. So overall, if you can comment on the demand environment, sir?
So as I mentioned in my commentary, the challenges for this quarter continue. We are still not out of the woods basically. So we focus challenging times. That said, that if the disruption was not there, that would have given us extra traction and which would have made. So it would not be as low as it is come in this quarter, but the challenges yet continue.
Yes. But sir, can you give me -- give us some comment on the retail on the ground demand? Did it see some growth? Or we are seeing that even the end market demand has been challenging? And where are we specifically on the destocking? How much more we can expect?
So the demand is continuing at the end user. So as I mentioned in my commentary, the unwinding inventory level is going down, I mean, is clearing up, so that's a good sign for us. And that should kick in some demand. But overall challenges continue, and we expect it to be stable at this moment.
Sir, my second question is on the freight increase that we had taken, and we are rolling back. So to what extent it is left decline in ASPs compared to last year? How much of the rollback we should expect in the next few quarters, sir?
No more roll -- I mean we've rolled back the whole freight component in our ASPs. So that has already gone through in the Q4 of last year.
Perfect. And sir, my final question is on the margin target. Other tire companies have reported reasonable gross margin expansion. How should we think about it in our case, considering our product segment is very, very different? But overall, on the raw material side, how should we expect the benefit to flow through?
So difficult to give a number, but we expect a positive outcome.
The next question is from the line of Mumuksh Mandlesha from Anand Rathi.
Conversation on good EBITDA margin performance. Sir, related to heatwave impact on the demand on the agriculture activity globally. Will there be this 1 quarter impact? Or could you see the impact for a few quarters?
So difficult to give an answer now. But as we mentioned, the end-user demand is there. There is inventory clearing out, which has taken place. So these are the positives to say. That said, there is recessionary fears and heatwave impacts, which will be there. So we see demand being a little challenging at the moment. Difficult to give a number as to which quarter or how long the impact will be in Q4.
Right, sir. Sir, Realization the lower this quarter by 1.5% sequentially. So any reason for the -- is it a product mix, sir?
Realization is lower because of the raw material cost trend has gone down, which is why we have passed on benefit to our customers.
Okay. So 1.5% benefit was passed through, right?
Roughly average.
Average may be a little more. But yes, this is the case.
And going ahead, sir, how do you see the relation sir?
For the whole year, as I mentioned in my commentary last time, we expect it to be around 300, 305 on the low side. So that's where we see towards the end of this year.
And this lower relation from current lending mainly because of pass-through or...
Pass-through for raw material prices.
Right, sir. And sir, the volume growth has been very strong, supportive and better availability. What should be the growth for the full year? And how is the deal went in India?
So we are not -- as we mentioned, we are not giving a guidance for this year because we see challenges. So difficult to give a number and where we will end up for the year. We will take it quarter by quarter. And India, as I mentioned, remains strong, and that's a good segment, a good geography for us to focus on, and we are continuing to do so.
[Operator Instructions] The next question is from the line of Raghunandhan from Nuvama Institutional Equities.
Good to see margin at 23%. Sir, on the demand side, the hope has been that demand should improve sequentially. And as we go towards second half of the year, things should improve in terms of agri segment, in terms of Europe region or there could be triggers in terms of Balkrishna gaining market share on the OEM side. So if you can just talk about, we understand that currently, the situation is challenging. But going forward, as we go to second half of the year, where the hope is normalization of demand, what are the triggers which could help the demand trajectory?
Yes, typically, the second half is better than the first half. So we are -- but we're not able to give a number of guidance to where it will be. We are going to wait and watch and take it quarter by quarter to see the impact of weather and recession and other fears, which are pertaining in the market at this stage.
Got it, sir. On the OEM side, company has historically been gaining market share. So would you expect those strengths to continue this year as well?
Yes.
Got it, sir. And my second question, just a couple of clarification. So in Q1, that 5 days production impact and also the impact of not being able to do dispatches at Mundra port. So that benefit should spill over to Q2.
Any quantification as to what was the loss in dispatch because of this temporary issue? And also, if you can put a number, where is the global inventory level currently? And how does it compare with the normal level?
So yes, you're right. We had an impact of 5-day production loss and 10-day dispatch towards the end of the quarter, which will spill over. But that said, please bear in mind, Q2 is always our weakest quarter. So that spillover should get us a part to where we have been in the previous quarter. So that is how we are looking at it.
We give you numbers when we reach the end of this quarter. And as far as the inventory at the global end user distributor dealer level is coming down, and that's that. It's more or less close to normal where it should be.
The next question is from the line of Siddhartha Bera from Nomura.
Sir, again, on this heatwave indications, which you have given. Generally, has it already led to sort of the pull from the channel being lower in the current quarter? You have already started seeing that? Or this is more your expectation is that some of these will lead to a slower pickup than what we had expected?
Yes, we have started seeing the impact, and that's what we are highlighting it.
Okay. Okay. And second is, in general, given that we had this inventory benefit in terms of the raw material not fully visible yet. So current quarter inventory levels, are the current reflection of whatever the commodity prices are? Or do you think there can be some more benefit depending on wherever the commodities are right now?
No, the shares come and the raw material prices we are expecting now is stable.
It is likely to step up from current levels.?
Stable, stable.
Okay, okay. Got it. So you don't see any more further commodity benefit coming up in the coming quarters based on the current commodity prices?
Yes, correct.
Okay. Got it. And sir, any color on this demand. By when shall we start expecting some recovery on the volume side going back to that 75,000, 80,000? Will it happen by the end of this year? Or do you think it may be longer given your understanding of the ground level demand?
We can't put a date to it. We would like it to come as soon as possible. We are ready from an infrastructure point of view to cater to that. But we'll wait and watch. I think we'll give you guidance quarter by quarter as to what visibility we see, but difficult to put a number by benefit.
But sir, weakness is more on agri or OTR side? Where -- which segment do you think is witnessing more softness?
All over, both the segments.
Okay, okay. And this weather pattern changing of heatwaves and all, how does this impact demand generally for the how much? So replacement, I would have hoped that it would have been quite stable. So generally, with heatwaves, how does the demand pattern gets impacted?
It affects the end user because he's not able to do his agricultural work because the soil has become so hot. So it affects the crop. It affects the income. So we're also forecasting and seeing where to be. So difficult to do this process of work that we would have normally done because it has an impact on the crop that he would grow.
The next question is from the line of Pramod Amthe from Incred Capital.
Sir, first one is with regard to the end market. So what is the pricing competitive scenario because the slowdown seems to be surprising everybody. So is there a discipline happening by the competition or they are desperate to right out on. And related to saying is, has the freight unwinding in the ASPs complete now? Or do you feel there is some to passed on to normalize?
So yes, in [ manoeuvres ], there is a little slowness there, always be some rational movements. So we are competing at it. And at the moment, we are able to negate it. So we hope to continue to do the same in the coming years, coming quarters also.
As I mentioned that towards the end of the towards the end of the year, our Realization may drop to levels of 300, 305, the ASPs. That is an indication that the pass-on of both raw material and of the pricing competition was would maybe come bring it down to that. But that's where we estimate it to be.
And the second one is with regard to the interest cost. So if I look at your annual report Page #125, you clearly call out for capitalized interest cost for last year was almost INR 20 crores in spite of the making of leading to INR 40-odd crores. So it seems like you are capitalizing 1/3 of the interest cost. Can you give what is this for? Because our understanding was you were running such a big cash and you have a lot of loan is in the working capital. So is it you have taken on for the plant and hence you are capitalizing it? And what is the capitalized cost interest in the first quarter?
Yes. So it's not prorate what is being capitalized. The only capitalized portion is related to the long-term ECB, which is taken for the CapEx. And the amount keeps changing depending on the accounting principle.
So would you quantify what is for first quarter when you had done an expense of INR 20 crores. What is the capitalized amount?
It's hardly 8% to 10% of it.
So last year, it looks like 30%?
Yes, it was. It depends on the running exchange rate, actually. So it keeps changing.
The next question is from the line of Mayur from Asian Markets Securities.
So just trying to understand at one point, you mentioned that the benefit of commodity you expect to remain stable at going forward. And you also mentioned that you've taken a price cut. So you passed on this benefit. So is it that you're looking at steady gross margins as a function and that is why you've taken the price cut? Or this is really from a competitive angle that you want to maintain the volumes and that is why the price cut?
It's a mix of both.
So as far as competition is concerned, should we read it that this is more competition coming from China because we still don't know whether China has kind of normalized or what is really the status in the European market as such?
It's coming from across the globe, not China alone.
Okay. So what we're trying to read is that while at one point, you've said that realization could actually come off, you're also maintaining that you will still be able to close the year at 23% plus EBITDA margins?
Yes, we are quite confident of that.
The next question is from the line of Jinesh Gandhi from Motilal Oswal Financial Services.
A couple of clarifications. One is, if I recollect, we had indicated that we still had some high...
Sorry, Mr. Gandhi. We can't hear you very -- if you're on speaker, we request you to come up. This is coming muffled.
Is it better now?
Yes.
Yes. So on the RM cost benefit side, if I recollect, we had indicated that there was some high-cost inventory, which was still getting carried in 1Q. So in that context, I'm not expecting any further RM cost benefit. Can you just touch upon that? How do we -- I mean, how one should see that?
So high cost inventory almost adjusted now. And now the current inventory material we have is at the current cost only, and we expect stable prices now onwards.
So the 1Q level of gross margins is what we should expect, but for any changes going forward, but for any changes in RM going forward?
Yes, we look to sustain at this.
Okay. Okay. And second question pertains to the CapEx guidance which we have given. So in that, we are also talking about investment towards marketing side. So is this over and above what we do normally through P&L or this is part of that?
Part of that, part of that.
Okay. Okay. And lastly, with respect to immediate quarter, second quarter, Will there be some benefit of the dispatches, which could not happen the 10-day dispatch loss, which we talked about. Would that be done in 2Q? Or it may not happen because to control the inventory on the ground, we may defer that?
It will happen in Q2.
It will happen 2Q. And then that can take 2Q should be slightly stronger than what otherwise could have been?
As I mentioned earlier, sir, that Q2 is always our weakest quarter. So you have to put that factor also and the demand is challenging. So put those 2 factors and then add the spillover. So don't -- it's not going to be a normal quarter plus the add-on so we have to account for both these factors.
Yes. I mean, obviously, 2Q is seasonally the case. That is very well appreciated.
Yes. Because even in the domestic market in we are hit with monsoon and everything. So all those also come into factor. So it means put both the numbers together to get to the real event.
That's a fair point. And lastly, if I take a step back and get a broader margin on margin guidance of 26% to 28%, and given that we are now at about 23%, including the full benefit of RM. How do we see between 3 to 5 percentage point accretion to margin over medium term coming from operating leverage results is obviously one part. But beyond that, what else should be enabling that margin expansion to our normalized range?
So I think the biggest driver would be volume growth because that would bring in a lot of efficiency with that. And then along with that, you'll have your hedge rates and other operating factors which will come in. And part of that will be linked to product mix also.
Right. The product mix going in favor of OTR....
Realization.
The next question is from the line of Basudeb Banerjee from ICICI Securities.
One, sequentially, other expenses to freight cost were lower. Other than volume decline...
We can't hear you. Please, can you be off speaker?
Yes, am I audible?
Yes, much better. Thank you.
Yes. I'm saying other than freight expenses, other expense line item was lower sequentially. Is it purely due to lower volume or ad marketing expenses or port or something there?
So basically, lower volumes and lower freight rates. So the marketing expenses and all are stable. That's not contributed to that.
Sure. Understood. Second question, sir, rest not futuristic, but inventory levels have followed in the target export markets. But if you can give a qualitative idea how the retail sales of your portfolio has been happening so for last 3 quarters?
So at the retail level, there is destocking. And as I mentioned, that destocking has now reached a level -- normalized level. So that is the positive side. But difficult to put a number. And there, we will end up panels. That's very difficult at this point.
No, no, no, no. What I meant is end customer offtake from your distributors and ground consumption level, how has the volumes have been in last 3 quarters?
That has been stable. So that has been stable. And because of that, there has been destocking. Levels have come back. The stocking levels are at normal conditions because the end level demand is yet holding up.
Next question, sir. If I look at even your realization at....
You're not -- you're breaking up.
Am I audible?
A little bit better.
To understand if I look at 26% plus margin and 305, 310 per kg, which means EBITDA per kg of almost INR 80. And historically, if I see your portfolio EBITDA for Q3, highest has been somewhere around INR 78, and in general, close to INR 70 or below that. So what qualitative thing one should look at in the longer run that you picked up on our improving?
As I mentioned earlier, better -- I mean, the biggest driver will be volume growth followed by better hedge rates and also product mix and all these factors coming together will get us there.
Sure. And lastly, what's the hedge rate for FY '24, '25?
INR 87, INR 88 currently for the whole year.
This fiscal?
Sorry?
FY '24?
'24 is INR 87, INR 88 for the whole of the year.
The next question is from the line of Rishi Vora from Kotak Securities.
Sir, first, on the commodity itself, we have seen crude prices running by almost 15% over the last 1 to 2 months. So if the prices sustain at these levels, do you expect any headwinds to come through in 3Q or 4Q?
So remand is low currently, all commodity. So we don't expect much changes in the current prices of the raw materials.
Understood. And on the competitive intensity side, a lot of the domestic players are focusing on OHT segment. Well, obviously, BKT over the last 2 decades have done exceedingly well. So how are you seeing the competitive intensity currently from the domestic player itself? And is the competitive intensity increasing, what are we doing to, let's say, offset the impact of these?
So when we are paying to arena huge market and big opportunity, we are focused on that. We have about 5% to 6% of the global share. So there is a 94%, 95% market yet available. And we are focusing on that in our product basket and in our category of premium players. So that's where our focus is, and that's what we are trying to do.
The next question is from the line of Mohit Jain from [ Tara Capital Partners ].
Yes. My question was related to the previous question, which is the impact of oil prices. Now you said that the commodity prices are stable, and you expect them to the margins to move in line with operating leverage. But just if you can talk about the impact of oil prices because they've moved up the last quarter net by almost 25% in the last 1 month.
So as we told that globally, the demand is low of the tire segment. So the raw material prices are not likely to go up from here, but so it is likely to be stable for the rest of the year. That's what we understand.
Understood. So then it's fair to say that in the very near term, volumes remain the main or the only levers for margins to improve?
And then also on the hedging, you said that the hedging will help your hedging levels were at INR 87 currently euro is at INR 90. So the hedges will be slightly out of the money right now?
Correct. Because earlier, when euro was INR 80, that time also hedging as a continuous process. So once it is going up, then we will be getting the benefit of that. So it is slide here and there. But for the full year, 87, 88 is the level we will be spending at 87, 88.
The next question is from the line of Ashutosh Tiwari from Equirus Securities.
Sorry, I am a bit later. First question, other income is very high in this quarter, INR 66 crores. Any one-off in that?
So there is a mark-to-market impact in that on ForEx in the treasury.
How much is that in mark to market? Like generally, gently going ahead, what should we assume on a quarterly basis other income sort of thing?
I don't have the exact number with me, but it's about INR 50 crores, INR 55 crores, in that range.
Okay, okay. And out of this 21,000 India volumes you mentioned for the quarter, what would the split between agriculture and OTR?
I don't have the breakup for the Indian market. But it's the overall company-wise, I can give you the breakup. We are at -- one second. We are at...
I know from PPT, we have the data. That's okay.
You also breakup geography-wise. So I don't have that number.
Generally, this quarter was mainly agriculture that was picked up in India. Or it is also a concession as did well?
All over, both our segments, yes.
Okay. And what is the gross debt as of June?
[ INR 2,850 ].
Lastly, on the Realization part. You mentioned INR 300 to INR 305 per kg. But that also includes Carbon Black is probably ramping up now. So even despite the fact that your Carbon Black plant will come up and it's growing in sales, do you expect this kind of fall Realizations?
So we expect that there will be some part, that is the lower limit we have here.
Okay. And what is the Utilization level of current Carbon Black plant of 170,000, 1.7 lakh tons. What is the Utilization level?
Rent prices are rolling at INR 102 to INR 104 a day.
Utilization level of that carbon black plant?
Around, you can say, 85%, 90%.
The next question is from the line of Rajat from Incred AMC.
So most of my questions have been answered. Just one thing, sir. You said that the current market share is 5% to 6%, and that your goal is to achieve 10% market share in the next 4 to 5 years. So I just wanted to understand that would be like more than doubling on your sales from current levels. So incrementally, how much more capacity would you need for -- to achieve this 10% market share? And what do you think would be the expected CapEx spend?
So as I mentioned in my commentary that this will be 4 to -- within 4 years. I mean, 4 years after the next CapEx cycle. And that is where it will get us. So once we do the CapEx planning on, we will make the announcement. And after which come online, it will be 4 years.
All right. Okay. And one more thing, sir. So the employee expenses seem to have slightly declined on a Y-o-Y basis from INR 107 crores last year, INR 105 crores this year. So have we not taken any employee raises for this year? And is it expected to come later part of this year?
So this is because of the volumes, sir. Volumes are low. So it is like proportionately has been reduced.
Okay. So we have a lot of contractual labors. Are you, pardon my ignorance, but...
Majority contractual labors.
The next question is from the line of Abhishek from Dolat Capital.
Sir, you have around 3,200 SKUs. So how much SKUs do you have in the OTR segment? And if you can throw some more light on the new business within OTR segment in overseas and India?
So we don't give the breakup segment-wise. So I don't have for the SKUs.
So if you can throw some more light on the new business in the OTR segment in overseas and India .
I mean that's a normal continued process. So we can give you -- I mean, as I said, that's roughly the OTR contributed about 38% of our business, and that continues to grow.
And as you had mentioned that you are looking for the 50% mix from the OTR segment. So where do you see potential opportunity for BKT, which all the markets you are looking for targeting.
Globally, all across the globe. We are targeting everywhere wherever we can get our -- get the sales going. So not one particular geography.
Okay. And this quarter, domestic business growth was very much a strong. Have you win any new business in domestic market and...
What was your question? Have I done what in domestic?
Domestic business, growth was very much strong. So have you won the new business in domestic market? And just wanted to know what is the replacement versus OEMs in domestic?
We don't give individual geography breakup. But yes, we have won new business in India, and that's where it's reflecting in the numbers.
So this run rate will be sustainable in the coming quarters because of this new business mean?
Yes. Yes. But only, as I mentioned in my comment earlier, that the numbers will be sustainable over the long term. quarter may be a little up or down because of the weather because this is both because of the weather and rain. Both agri and construction activities are generally slower. So if you count that the rest of the business should sustain at these levels in the other quarters.
The next question is from the line of Devvrat Jhunjhunwala from [indiscernible] Capital.
You mentioned the gross debt of INR 2,850 crores. Is there any plan to restructure or repay this debt over the next financial year or beyond?
So the short-term borrowing is -- the working capital is getting adjusted as per the business. And long term, as per the repayment schedule, we will be repaying that will be as other schedule given by the -- when we took the loan. So we do not see any issue in the repayments, and we are following that.
The next question is from the line of Garvit Goel from Invest Analytics.
So my question is on demand outlook side only. Like, you mentioned India is doing well, but European Medical is showing the problem. So my question is on the recessionary fear. You mentioned the reason for it. So it is more in the Europe side or in the Americas side? And further, it is more towards the agri segment side or the OTR side?
It is in both the geographies and both the segments, both the recession fears are in both U.S. and -- I mean Americas and Europe and in both the sectors segment agri and OTR.
Understood. And sir, secondly, we are doing CapEx. But like you mentioned, these major geographies are facing the problem. So does that mean the CapEx is mainly for India? Or would then the things will be improving 1 year time?
So I mean the CapEx is done for across the world. We don't intend -- I mean, we don't see that these issues will continue for long term. So when those markets come, we will be able to cater to them. And also, these are new products. So we'll be opening new areas for -- of revenue for the company.
Understood, sir. And lastly, sir, are you seeing any program in the terms of like rising imports into India from the other geographies?
Not for us at this moment.
Ladies and gentlemen, we'll be taking the last question. That is from the line of [ Disha Seth ] from Annual Wealth.
I just wanted to ask that as India is growing very nicely, so going forward our margins as we -- India doesn't have that high margins as an export market. So if you can give some guidance how our margins have shaped up in coming 2 years as India has grown faster?
I mean for the vetting of utilization of capacity, so margins should sustain at similar levels. There will be marginal lower margins for domestic. But overall, it will be at that level.
Okay. Great. And sir, last question. I wanted to check when you said Q2 will have spillover, but it will be similar level to last Q2 or last Q1, because FY '23 Q2 like last year, it had a very good result. We had like 83,000 of volumes and 2,700 of sales. So when you said it will be on similar level, it will be on Q1, similar level of Q2 because of the challenges?
I don't want to speculate a number. Let's wait for the quarter to get over, and then we can comment on the number because we don't want to have speculative numbers given.
No. Not in terms of -- I'm not asking any numbers. But when you say it will be on similar levels, so it would be on a Q1 similar trend. That's what I'm trying to understand.
More or less similar to Q1.
And sir, how much would be the loss of production in Q1 itself, which has gone by because of that 5 days in Mundra port?
Roughly 4,000 to 5,000 metric tons.
Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. Joseph George for his closing comments.
Thank you. That brings us to the end of the call. I will hand over the call to Rajiv, sir, for concluding remarks, if any.
No, I just wanted to thank everybody for taking all the time and hearing us. Thank you for your support, as always. Thank you.
Thank you.
Thank you, members of the management team. Ladies and gentlemen, on behalf of IIFL Securities Limited, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.