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GHCL Ltd
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Ladies and gentlemen, good day, and welcome to the Q4 FY '20 Results Call of GHCL Limited, hosted by Emkay Global Financial Services. [Operator Instructions] Please note that the conference is being recorded.I would now like to hand the conference over to Mr. Rohit Sinha of Emkay Global. Thank you, and over to you, sir.
Thank you. Good evening, everyone. I would like to welcome the management and thank them for giving us this opportunity. We have with us today, Mr. R.S. Jalan, Managing Director; and Mr. Raman Chopra, CFO and Executive Director, Finance.I would now hand over the call to them for the opening remarks. Over to you, gentlemen.
Thank you, Abhishek. Good evening all of you. It is my pleasure to welcome you all on today's earning call for Q4 FY '20. Raman, our CFO, along with Sunil and Abhishek from finance team joins me in this today's call.I wish safety and health to all of you and your families as we collectively battle the COVID-19 outbreak. This has created unprecedented conditions that further heightened due to nationwide lockdown announced by the government from 22nd March 2020. We have taken due measures to ensure that GHCL, as responsible corporate citizen, abides by the government guidelines. Accordingly, soda ash plant remained close till 19th of April and textile units until first week of May 2020. Though the plant has reopened, however, their operating rates are deeply impacted due to the downstream, demand and availability of labor.Soda ash markets around the world were hugely impacted by COVID-19. Globally, glass, which is largest consuming sector, is the hardest hit as both construction activity and automakers struggled. Container glass got affected on account of lockdowns and consequent demand erosion. Chinese soda ash industry faced closure as it was impacted first, with other geographies reporting production cut. China has started back, though at lower capacity, as demand size continues to struggle, especially from glass segment. Turkey and U.S., which are other major producers are also running at lower rates, facing similar demand erosion issue. In India, the detergent sector, which constitute almost 40% of the total market, saw the fastest revival and has reached to a level of around 80% utilization. However, flat glass remains the most impacted, and indications are that production losses in this segment may be the highest. Currently, the flat glass segment is struggling to start back, though container glass is operating at about 20% level. The chemical and silicate segments are also witnessing a slow start back.On an overall basis, on the demand side, currently, markets are operating at about 55% to 60%, which is expected to progressively grow in the next 2 quarters led by detergent. Glass will remain subdued with only marginal revival in Q2 and then some ramp-up in the last 2 quarters. As per our estimate, Indian industry will see an overall demand reduction of about 12% to 15% compared to last year.Textile was already facing headwinds and COVID outbreak. Both volumes and pricing has come under present. U.S. and Europe are the biggest market for India where COVID has impacted much severely due to which export demand is likely to remain weak for the initial quarters and orders are getting postponed for subsequent quarters. We are watchful for the situation emerging out of these geographies with a regular contact with our customers. With India continued to remain in lockdown for more than 2 months now, with restriction gradually easing out, domestic apparel and home textile industries are expected to witness demand drop over the next 2 quarters.Q1 FY '20 will be severely impacted due to no major operation in April and plants expected to operate at 50% to 60% utilization for the balance period. We, however, believe that the operating level will definitely improve by 15% to 20% by next quarter. We are also currently focused and agile for all the possible option to optimize our production with cost rationalization. It is critical to manage liquidity. And therefore, we are deferring all our CapEx and becoming frugal in committing expenditure. Our low-cost edge and strong operational capabilities makes us confident to sail through these challenging times.Yes, Raman now take you through the financial performance. Thank you.
Thank you very much, Mr. Jalan. Good morning, everyone, and welcome you all in our Q4 FY '20 earnings call. I wish all of you to stay safe and healthy in the current COVID-19 situation.Let me now start with a walk through for the performance for Q4 FY '20. Revenue for the quarter is INR 734 crore as compared to INR 915 crore of Q1 -- Q4 FY '19, down by almost 20%, mainly due to lower selling prices and COVID-19 impact. EBITDA for the quarter is INR 161 crore as compared to INR 241 crore of Q4 FY '19, and it is down by 33%. This drop is largely on account of again lower selling prices in both soda ash and spinning, lockdown impact and onetime markdown of INR 20 crores due to COVID in textiles. Consequently, EBITDA margin for the quarter is 22% as compared to 26% for the same quarter last year. The profit after tax for the quarter is INR 80 crore as compared to INR 119 crore of Q4 FY '19. EPS for the quarter stood at INR 8.16 per share.In the chemicals segment, we have recorded a net soda ash production of 2.5 lakh tonnes during the quarter as compared to 2.59 lakh tonnes in Q4 FY '19, which was mainly due to lockdown impact towards second fortnight of March. Further, due to oversupply and demand slowdown, the soda ash pricing was down by 11% compared to Q4 FY '19. This has led to decline in revenue from INR 607 crore in Q4 FY '19 to INR 519 during the current quarter. EBITDA for the quarter is INR 162 crores in chemicals segment as compared to INR 212 crore in Q4 FY '19, point to a drop in prices and COVID impact. EBITDA margin for the segment has come down to 31% as compared to 35% of the same quarter last year.The textile segment was having improved performance due to home textile, but spinning industry was impacted due to U.S.-China trade war. However, Q4 FY '20 was impacted due to COVID outbreak. Revenue for the quarter is INR 214 crore as compared to INR 308 crore in Q4 FY '20. Revenue is down because of lower prices and COVID impact. EBITDA for the quarter was negative INR 1 crore as compared to INR 29 crore in Q4 FY '19. This is mainly due to ForEx fluctuation and onetime cost considered for the potential markdown on a prudent basis.The ROCE for the quarter is 17%, and ROE is 19%. With our low debt equity ratio and strong cash flows, we are confident to navigate this tough time in a comfortable manner.The house is now open for discussion and questions that you may have. Thank you very much.
[Operator Instructions] The first question is from the line of Suyash Kapoor from Kapoor Company.
Question number one, sir, regarding Page #26, presentation I'm referring. Sir, first, I pray for the good health of all our dignitaries. Sir, I will request by starting my first question that all dignitaries to -- if possible to be present at the AGM, that is our -- we have been -- we are the shareholders of the company. We have met in the previous AGM, Mr. Jalan, our honorable Chairman sir, and Mr. Chopra, and we wish that in the upcoming AGM, if possible, all the gentleman whose photo you have given on Page #26 to be present on the AGM, if it is possible, keeping into account the COVID-19 situation. So this was my first request.Question number two, sir, regarding Page #22, the promoter shareholding. Sir, what is their plan as far as increasing shareholding is concerned?
Suyash, have you finished your question?
No, there are 2, 3. If you say I can give all the questions?
No. If you want, I can answer one by one, then you can raise the question again.
Yes, sir. Please go head, sir, kindly.
So first one, you said the presence of all the dignitaries or all the directors on the Board to be on the AGM. Yes, I would wish that. And probably this time, as the situation looks like, this time the AGM will be on Webex on the -- not on the physical AGM. So probably every board member will be present on that platform. We have tentatively set the date of the AGM on 6th of July. And hopefully, everyone will be presenting there.Coming back to the point number two, I think on the promoter holding, I have been answering this question for a long period of time. That probably, this is the right questions for the promoters. We, as a management, does not have a role to play in that -- in the promoters' holding.
Okay. Sir, second question is regarding our research and development cost as compared to total revenue. So if you can throw some light on it?
Suyash, our research and development cost at this point of time is not very significant as compared to our revenue. Because if you look at the basket of the product, what we have, if you look at the chemical, though we have a small team of people to look at the various process improvements or the -- and those kind of things, the cost optimization and things like that. But we don't see any major possibility of a new product development into the soda ash space. On the home textile, surely, as you have been noticing for last 2, 3 quarters, you will see that. A lot of innovative products has been launched. But we are not booking those expenditures into the research and development. That expenditure goes into the normal expenditures.
Sir, on the fixed cost expense side, sir, what is our fixed cost? If you take soda ash and home textile separately, what are our fixed costs on a monthly basis?
If you look at the numbers, the numbers are in front of you, probably you can pick up the numbers from there. And if any further details you required on the fixed cost, we can have an off-line discussion on that.
Right, sir. And sir, I think that the advantage of raw material -- lower raw material -- benign raw material prices have been percolated in the numbers. So seeing the demand destruction has been clarified by your presentation in soda ash, how are you seeing the raw material trends being?
Very important question. And before I answer this question, let me slightly take you the number which Raman has presented. Though when we compare this number of chemical vis-à-vis the same quarter last year, you will see that there is a margin drop of around 4% against 35% of the EBITDA margin in Q4 '19 versus Q4 '20, the margin was 31%. However, if you compare the similar margin vis-à-vis Q3 '20, you will find slightly there is an improvement into the margin. And this is primarily because of, though, on one side the realization has gone down, but the cost has also gone down.Keeping that in mind, my suggestion is in the next quarter, which is Q1 FY '21, you will see that on one side, this is a marginal drop in the prices of soda ash again. However, overall, the gross margin on soda ash will be slightly on the better side because the raw material price has been slightly on the lower side. However, because of the capacity utilization, EBITDA margin may be impacted because the other cost -- fixed costs remain. So our focus at this point of the time is, Suyash, is more on to look at the cost, both variable cost as well as the fixed cost.And just to inform here to the participants that on a prudent basis, management has taken a salary cut at the senior-most level, ranging from 30% to 10%. However, 92% of the people has not been impacted, but 8% of the people, which are in the senior management, we have taken the salary cut, just to control the cost. And similar excise has been done in other costs as well.
Congratulations on taking -- leading from the very front, sir. Sir, I was coming to the price trend, sir. If you could give some idea -- color on price trends and the December to the March quarter and then the trend currently prevailing in the soda ash market?
Yes. If you look at December '19 -- December '19 quarter, I have given that in that call itself that there will be approximately around 4% to 5% price drop will be there. However, still, we will be able to maintain margin. I think that has become reality in March quarter. My estimation -- of course, as you know that the industry has just open up 20 days back, gradually, things are shaping up. We -- at this point of time, very clearly, we cannot say that. But I don't see too much reduction in the prices. But even if 2%, 3% reduction of the prices will be there, that will definitely be compensated from the cost of raw material.
Okay. Last point on this expansion part, sir. So we were talking about this greenfield expansion of 5 million going forward for which land was also acquired. What is the status on the same? How are we going to proceed there, sir?
See, first of all, I wish that it should be 5 million. It is not 5 million. It is 500,000 because the Indian total demand itself is around 4 million. So the greenfield project, which we were talking about was 0.5 million. Obviously, because of this new COVID situation, the entire plan will get postponed. And like I said in my presentation that at this point of the time, cash preservation is going to be most important. And therefore, probably the project of the greenfield project will definitely take little longer time. In the long run, yes, that project will be completely viable. But probably, it will get delayed at least by 1 year, 1.5 years. We will review this position after this year how to go about it, depending upon how the situation shape up.
[Operator Instructions] The next question is from the line of Rajeev Agrawal from DoorDarshi Advisors.
The first question is, given the very cautious commentary that we are giving, both on soda ash and textile, can you give some guidance, especially in Q1, what should one expect for Q1, just so that we have a better sense of what to expect?
See, like I said, Rajeev, that in current situation, the plant of chemical is roughly around running at around 55% to 60%. And the run rate of demand is also in that same range. Our expectation is in the month of June as well the situation will continue to be in the same way, maybe 5%, 7% higher from here. So probably, for the Q1, my understanding is, you can see a kind of a scenario in the chemical, where demand or the production range will be in the around of 55% to 60% kind of a thing. Of course, that will have some impact on overall EBITDA. But in terms of gross margin, margins will be better, but because of the low run rate, EBITDA margin should be in the -- should come down by around 4% to 5%. This is what my initial guess. Of course, very -- at this point, a lot of uncertainty is there. But this is what my best judgment will be there at this point of time.When it come to the textile side, as we all know, the major market for both spinning as well as for home textiles because the spinning has somewhere linked with the garments or the apparel for the home textile, so this segment will have a slightly longer-term impact probably. You will not see a very healthy number in the Q1. Q1 and Q2, my understanding where the challenge in the textile will be slightly bigger. But Q3 and Q4 things should significantly improve. This is what my guess at this point of a time.
That's very helpful. Would you say that for textile, we will be EBITDA positive, just to get a sense? Or will it be sort of the breakeven? Like what is your expectation there for the textile?
At this point of a time, Rajeev, it will be very difficult for me to talk something number. But we are trying our best in that range of -- like you've said -- just give a second to me, if I can give you my sense on this number, which broadly, we have kind of a chalk down. Probably, I would say that EBITDA will be in a range amount of the kind of a -- is breakeven kind of a thing.
Got it. Got it. Now we also had a domestic player, a new domestic player come in with a 0.5 million capacity. And obviously, they were scaling it up gradually. What is the status on that player? How much have they scaled up? And how much additional capacity of soda ash do you think they will begin in financial '21?
See, Rajeev, if you look at the new player which has come in, last year, they produced something around 250,000 tonnes, okay? Probably my sense is this year, they will not be producing more than this. Reason is, like I said in my -- this thing, overall, the total, there will be demand reduction of around 12% to 15%. Everybody, including all the players, will require to be kind of a scale down. Currently, like if you look at like we are running at 55%, 60%. Similarly, those people -- the new players also is running something in the same range. So I don't see there will be a major increase in the production during this -- the year 2021. '21 -- '21. 2021, yes.
Got it. And did we request government around the ADD? And especially on soda ash, has there been any new development on that?
Yes, Rajeev, very, very valid point. Frankly speaking, today morning itself, we had a webinar with the commerce department of government of India. And we are pushing for many of the support for that as well as for some of the consuming industries. Like as you know, the glass industry is really severely facing burnt of constructions and automobile. Today, we had a very fruitful discussion with the government officials, where we are pushing for few things. One, we are pushing for ADD, which we have filed and early implementation of the ADD. We have also filed a subsidy application against Turkey. We have also filed a safeguard application to the government. Along with that, we are also pushing for the government for some kind of restrictions either on the import or some kind of a tax on the import on certain base. Because definitely, as you rightly said, some kind of -- because if the demand going down by 12% to 15%, it will be imperative for the government to look at the support to the domestic enterprises. And they are very considerate, I would say that, of course, as you know that the government takes little time. But hopefully, things should be in place soon.
[Operator Instructions] The next question is from the line of [ Aman Seti ], individual investor.
My question pertains to the soda ash and textile industry outlook as well as the sodium bicarbonate. How does the management view the demand recovery going forward and even some color on EBITDA per tonne in this year as well as the coming next year? Along with that, I wanted to clarify the soda ash sales and production volumes this year versus the last year.
Just to answer your questions in terms of the overview of the soda ash as well as the textile, as I said in my initial comments, currently, the run rate of soda ash is around 55% to 60%, which we gradually ramp up. Second quarter, probably, you'd see 10% to 15% higher, and the third quarter and fourth quarter, it should be in the round 80%, 90% kind of a thing. Overall, if you look at the year as a whole of 2021, we are estimating that the demand will be in the range of around 88% -- 85% to 88% of the demand, which has happened in the last year. This is the overview of soda ash.In terms of the price, as I said, we expect that the prices should be slightly lower, but not too much significant. And to that extent, the raw material prices should also go down. The margin -- gross margin through the same range as we have achieved in the last quarter, FY '20.Coming back to the textile, as I said, first 2 quarters, textile per se, overall as a industry, we definitely see a challenge. Currently, our textile plants are running at around 50%. And some issue other than the demand side, even the labor availability also is an issue in the textile piece. Having said that, my estimation is the first 2 quarters will be challenging in the segment. But next -- last 2 quarters should be much better than the first 2 quarters. How the numbers will shape out, it is very difficult at this point of the time because you know the situation. How the U.S. opens up, how much the demand comes because this is not a normal situation. We cannot predict beyond a point. Have I left any questions, which I need to answer?
Yes. Soda ash, sales and production volumes, sir.
If you look at the soda ash volume, we can give you soda ash volume, what we have achieved FY '19 versus FY '20 which is roughly around 200 -- roughly around -- if I look at the year as a whole, we have achieved roughly around 1 million tonne. I think GHCL has first time touched 1 million tonne production against last year of 931,000. That means almost around 70,000 to 75,000 tonne, which we expanded last year. If you remember, FY '19, we got almost around 80% of that, had this impact of COVID-19 has not happened in the last 2 weeks of the March, probably these numbers could have been in the range of around 90,000 tonnes.
Specifically, on the Q4 FY '19, the soda ash sales production this year presentation is showing 2.59 -- last year's presentation is 2.59. And this year, it is showing 2.49.
I will just clarify -- I will clarify, yes. I will clarify that. You know what we were doing was that we were showing the internal consumption, which is for producing soda ash, you need to consume some soda ash for the various processes. Earlier, what we were showing is, we were showing the gross production as internal consumption was being shown at a cost. Now what we did is, we have removed it, and we have not -- whatever the sellable production that is only getting reported. And just to give you the numbers, against the 2.49 of the production of Q4 '19, in this quarter, the production is 2.41. 8,000 tonnes is shortfall. That is primarily, as I said, because of the last 2 weeks of March '20 because it is lockdown, we have to taper down the production. And from 28th of March, the complete plants were shut down.
The next question is from the line of Andrey Purushottam from Cogito Advisors.
This is actually Sangeeta Purushottam. My question was that given that soda ash is an import substitute, have we seen a substantial -- the part which was of the market which was being met through import, have we seen a substantial drop in the imports? And is that in any way likely to benefit the domestic industry?Second question was that with this whole turmoil, are there any inefficient capacities either in India or abroad that you expect to shut down so that which may lead to the existing players gaining share as we go along?
See, first of all, let me give you the data for last year. Last year, the total import into India was around 940,000 tonnes, which is roughly around 23%, 24% of the total demand of -- total demand of India, which is quite significant, right? Going forward, my understanding is, the import is going to stay. Now -- import will continue. However, what is happening is now globally, like China, which is the largest, I would say, producer in the world of -- out of the 70 million of the total production worldwide, 30 million, roughly around 28 million to 30 million, just produced only in China. Because their demand is stepping down, they're also reducing the production. So they are trying to balance.The moment they produce more and they want to dump in some other countries, they have 2 threats: One, their price realization will be impacted and which will impact their margins; and similarly, they can have a challenge of anti-dumping or the government protection because you know in this -- because it is COVID-19 lot of globalization issues are getting postponed and the people are going into the -- countries are going into a protectionism situation in the country wise. So every country, producing countries, they are trying to balance their demand and supply, not trying to dump too much of material into the other markets.Turkey, if you look at, they produce something around, if I take both the plants put together, they are roughly around 6 million tonnes. They're also -- and they are exporting a large sum of that money. They're also trying to cut their production. I personally feel that this demand supply balancing will play in a reasonable manner, which will not lead to a kind of a dumping from one country to another country. That is -- which is going to be safe.
Okay. Okay. All right. And are all the existing producers that we are affected by, which is domestic as well as from the countries that India imports, are all of them likely to survive?
See it's very early to say -- speak about the global players; very, very difficult at this point of time because we are not aware about how the situation pans out in their countries. But in India, all the players are very strong. And I don't think any challenge in their survival.
Next question is from the line of Jatin Damania from Kotak Securities.
Imports, you've already clarified 940,000 tonnes of import ash come in India in FY '20, and you see the import trend continue. Do we think that the domestic capacity will further moderate, like you said 55%, 60% will be operating in the first quarter? And if the situation doesn't ramp up as you are expecting, do we see that the same situation continues in the second quarter also?
Not really. I don't see that situation because you see that if the demand is coming down, obviously, the import will also come down. And one more thing I just want to highlight, in the import, the -- primary the imports which are coming in the -- on the dense side, which is used in the glass segment, okay? And the hardest hit is the glass segment. So obviously the import numbers will also come down. So I don't see any major threat on the projections which I've just said to you happening.
Okay. And sir, on the pricing front, as you said, that we will see further 3% to 4% price reduction, assuming that the -- because the demand continues to grow, I mean, what we have seen because of the lower value trading, probably which used to the higher content of the soda ash. If that demand ramp up, is it feasible to see that the prices that we have reported in this current quarter minus 3% will be sustainable for the long term? Or is there -- we see a further risk to it? Because other than [ not giving ] significant improvement on the container glass also in the month of May?
See, 2 things, Jatin. First is that, as you rightly said, detergent side, we are seeing a ramp-up in the demand because of the value detergents are getting more sold wherever the soda ash consumption is on the higher side. That's why I said very quickly, the entire April the production or the sale of detergent or the production of detergent quite low. But very quickly, this has ramped up, and now it has come to the level of 80%. And we see very quickly, this is going to around 100%.In terms of the -- if I look at the glass, and I separate the glass into 2 parts, one is the flat glass and one is the container glass. Now the way the -- now opening up is happening, government has started opening the markets and things like that, we see that reasonably container glass demand will come in. So we don't see a major reason that container glass demand will not come in. But flat glass, as I said in my initial comments, flat glass will take some time because of the construction, because of the migrant labor issues or the labor availability plus the automobile. These are the 2 areas, which will take some longer time, and probably this will lead to kind of a slightly longer time than we required for the flat glass to ramp up. That's why I've given kind of the -- my estimation that overall in this 2021, the demand should be lower by around 12% to 15%.
Yes. And sir, [ R.S. ] can help us in classifying the bifurcation into, what is the proportion, which goes to a detergent, glass, I mean, whether it's flat or container?
Yes. If you look at the total soda ash demand, roughly around 40% goes into the detergent. Glass, all put together, all 3 glasses, one is the flat glass, container glass and bangles and other small, small things, this put together around 29%. Out of this 29%, roughly, you can say 10% will be in the range of -- will be in the flat glass, roughly around 12% to 13% in the container glass. You can say -- and roughly around 2%, 3% will be in the other bangles and things like that. Chemical, which is again a very largest segment, around 21%. And this 21% is also gradually ramping up. There also, we don't see a slow recovery. We see a pretty fast recovery going forward in this segment. So reasonably, my understanding is the demand ramp-up will happen in the second quarter. And surely in the third and fourth quarter, significant improvements will be there in the demand, barring flat glass.
[Operator Instructions] The next question is from the line of Sachin Kasera from Svan Investment.
I had a couple of questions on textiles. One is this INR 10 crores write-off in U.S. subsidiary, can extend what exactly is this?
Yes. Sachin ji, surely we would like to explain you. Very valid questions. Raman, can you explain this point?
Yes. Basically, what has happened is, as you must have seen, there has been a overall impact due to COVID and which has impacted the textile industry, both India as well as overseas. And our large exposure is on the -- in the U.S. market where there has been severe impact of that. So on a prudent basis, what we have decided because in the overseas entities, we have been making investment in our overseas subsidiary, which is catering to some of the customers as well as the dot-com business in the U.S.A. There, there has been losses, if you see in the consolidated accounts. So now to have a real valuation, we thought that this is the right time we should recognize the impact of that investment, which we have made in that subsidiary. And on a prudent basis, we have taken -- we've got a valuation done. And on a prudent basis, we have taken a knockoff of INR 10 crores out of INR 35 crores, which we have invested there, number one. And in addition to that, we have done one more knockoff on a prudent basis in textile is a INR 20 crore onetime knockoff due to COVID impact. And these are all write-downs. There is no cash outflow as of now. This is done to -- based on the prudent accounting norms.
I just want to add -- Sachin ji, just I want to add what Raman said, I just want to highlight. At this point of time, it is not that we have started getting a demand from the consumer that we need to reduce the prices and things like that. That is not. But however, what we thought is that the way we see the business and the way we see the situation going forward, we thought it is prudent at this point of a time that whatever the inventory we have, we should take kind of a provision on that. Therefore, this INR 20 crore provision we have taken. And this INR 10 crores we have taken in the investment write-off primarily because as Raman rightly said, the investment which we made in our subsidiary, and there is a lot in that subsidiary. So we thought that it is prudent at this point of time that we should take to make the account more logical from the point of view.
From the valuation aspect.
From the valuation aspect, yes.
So basically, there's a total INR 30 crores write-off in textiles, INR 10 crores is below EBITDA, which is the write-off of the subsidiary. And this INR 20 crores, which is above EBITDA. So sir, this INR 20 crores which is above EBITDA is netted out from revenue? Or it is in raw material? Or it is part of some other expenditure? If you could just tell little bit on that.
It is in the cost. It is in the raw material cost.
Raw material cost, okay. Secondly sir, as you mentioned that for textile, it is going to be a little more challenging, at least for the next 2 quarters. And we already announced a scheme of demerger. So do you think that there could be some problem in that in the sense because the unit will be not doing well and maybe hardly EBITDA breakeven and the net debt will get transferred? So the bankers could have some objection to the demerger, in the sense, as of now because of the huge cash flow in soda ash, debt servicing is not an issue at all for us. But once it is demerger and if the texture is not doing well, then debt servicing of the textile unit could be an issue, and hence, the banker could have some objection to the demerger scheme?
See personally, my believe is we are definitely committed to this demerger. And like because of this COVID, we have not been able to properly go and represent to the banks. But my personal belief is that we are reasonably confident that we will be able to do this demerger. Maybe some challenge could be raised by the banker. But totally because of the overall our situation in the chemical and textile, probably we will be able to convince the bankers to accept this proposal.
And secondly, sir, may I add here?
Yes.
When we talked about this EBITDA dent, that is only we are talking about in the first quarter, that it will be kind of a neutral or breakeven EBITDA in the first quarter. We are not talking about that the EBITDA will be for the year as a whole, for a year as a whole, we'll have significant EBITDA positive.
Okay. Okay. Sir, second question, you mentioned that the top management has taken some pay cuts and all. So one, if you could quantify what is the type of saving the company could have from that? And apart from this, what are the other initiatives that the company has taken in terms of reducing fixed costs? And if you could quantify, that would be very helpful.
Sachin, it's a very, very valid question. First, initial my numbers for this salary cut which you have, roughly around INR 10 crore impact on the year as a whole. And this was only kind of a process by which we thought that some, what you call, led by example should be there. Similarly on the fixed cost, there are a lot of like on the recruitment, we have completely frozen, no recruitment. Even if some people are going, leaving, we are not replacing those people. Complete freeze on the -- complete ban on the travel at this point of time.Similarly, on other overheads, we are renegotiating all the contracts what we have on the fixed costs on the -- either on the -- on security or any cost, fixed cost. So every cost wherever we have, we are giving a relook at and critically examine what is a possibility in that. This is on the fixed. Similarly, on the interest side, there also we are very aggressively working like the last loan which we have taken by 7%. Interest cost as well as overhead, everywhere, we are focusing. Even the wages, we are -- there also, we are looking at to kind of reduce the number of people required particularly in the textile side. Everywhere there is a possibility there, we are reducing the cost.In terms of the -- if I look at the major cost, which is our gross cost of the raw material cost, so many initiatives we have taken of usage of the cheaper raw material in the soda ash production. Even on the textile side, the renegotiating the yarn prices with the -- from the vendors. Even packing materials. Everywhere, wherever there is opportunity, we are looking at every cost. There's a complete team focused on all the cost, and day to day, they are seeing to reduce the cost.
[Operator Instructions] The next question is from the line of Madhav Marda from Fidelity Investments.
I just wanted to understand, you said that demand could be down 15% approx for the year. But our gross margins could still be better. So I mean you're saying basically industry might not fight for market share, they're going to be more disciplined. Is that what the outlook is?
You see, in a difficult time, definitely self discipline will be very, very important. But this is what my understanding is that everybody understands because everybody has fixed costs and everything. Everybody will understand that no point of fighting for the market at this point of time. And like I said, second quarter onwards, improvement will start, third and fourth quarter normalcy will come. So I don't see at this point of time, there'll be grab for the market share, my understanding.
All right. And sir, with the rupee depreciating, aren't imports sitting, I mean, disadvantaged? So we should probably be gaining on them, right? But you're saying that imports could just stay at the same level? As domestic producers, do we also have big cost which is linked to U.S. dollar, is it? Or what's happening there?
No, you're right. Two things. One, on the rupee depreciation, definitely, that becomes -- the import becomes very costly, becomes costly. And so surely, that will have some advantage for the domestic player. Even frankly speaking here, one thing also I am noticing at this point of a time, even the consumers, they are reluctant to import because there is so much uncertainty into the market that they don't want to commit for a long period because if you want to import, you have to at least plan for 2, 3 months. So that is also one of the reason because of which probably the imports should definitely have some challenge. Coming -- I will come to the second point what you said about the cost. Yes, like our energy is primarily come in coal, which is coming from outside India. There, definitely, the cost will go up.
Okay. Okay. So that would be for all the soda ash producers in India, right, which would have this cost linked to dollar-based coal, is it? Or people are looking to sort of [ distributors ]?
Mostly, I would say this will have an impact on all. Maybe some percentage here and there, but mostly, it will be to everyone.
Okay. Got it. And sir, if the antidumping duty does come in, could that mean -- I mean we don't know what quantum it comes in at, but could that mean that imports sort of go away in a big way? That could be possible, right? And we just sort of ramp up and go to 100%? Or how would that work?
No, if the import -- if the antidumping duty comes, definitely that will help the domestic industry because that will definitely have the import parity where the import parity will be -- or the import cost will be higher. And this will definitely have an advantage to the domestic player because then they will be able to -- and import will come down and domestic players will be able to ramp up their production. Surely that will be helpful.
Any time line on this antidumping duty, you think, by when a decision could be made? Any idea?
Very difficult at this point of a time to commit a time line, but we are very vigorously pursuing. As I said in the call, today morning itself, we had a call with the commerce ministry. We are pushing from our side for the government to further have a decision on this.
The next question is from the line of Resham Jain from DSP Investment Managers.
Yes. Sir, couple of questions. So focusing on textiles, we have seen this cotton prices continuously coming down in the domestic market. It started with around INR 40,000 per candy. And I think now it is closer to INR 32,000, INR 33,000 also. So this provision which we have taken this quarter, around INR 20 crores, how much of it is because of the cotton price fall?
You see, very rightly you said in terms of the cotton prices, has gone down from INR 40,000 to around INR 33,000, 35 -- INR 34,000 candy. And surely, we have certain coverage of the cotton, but not 100%, but we have certain coverage of the cotton. While taking this number of INR 20 crores, we have not looked at item by item. On a total basis, we have taken the entire inventory of cotton, we have taken inventory of finished goods, we have taken inventory of home textile. Everything put together, we thought that it is on a prudent basis is INR 20 crores, which frankly speaking, we believe is reasonably okay we have provided.
But sir, this is the -- what percentage of the total -- this is basically the inventory which we you carrying at all the stages within the company, including the yarn business. Is it fair to assume that?
Yes. But primarily, the focus on more on -- more towards the home textiles because the markdown and all those things are being -- primarily being concerned from the home textiles. So the major focus on INR 20 crore is more towards the home textile.
Okay. And because by March, prices were not down to this extent, it has further come down in this quarter actually, from April and till now. In yarn business, do you expect to take MTM loss on the cotton that you are carrying?
Yes, surely there will be because whatever the cotton we have covered up to March, surely there will be an MTM loss. That's why I said, this number when we have taken this INR 20 crore where the major portion, obviously, is from the home textile, but still some portion of the yarn will also -- yarn means cotton will also be there. And my understanding is, our coverage is not as high as that we have covered for the whole year, and therefore, there'll be a huge loss on the cotton, we don't see that.
Okay. Okay. Understood that. And sir, my second question is on the customers side in the home textile business. What we are seeing from the results which are coming from the U.S. companies is that the large box retailers like Walmart, Target, Costco, they are actually doing much better, while the smaller departmental stores are closed and they are not doing well. So how are we placed on the home textiles side in terms of the kind of clients which we are having because some clients, I presume, might have good traction, while some clients may not have. So if you can give some color on what's happening in the U.S. market, that would help us?
Very rightly, you said that the 3 retailers, probably, they are reasonably doing well during this lockdown, target, Walmart and Costco. Obviously, these are the 3 players because of the food items into their stores, general merchandise in their stores, they have remained open, and they are doing better than other players. All other players in like your discount stores or other brick-and-mortar stores, they all had problem. Our clientele more is -- we are not present in these 3 customers; Walmart, Target and Costco. So our presence is more towards the other segment of the market, like your Kohl's, Bed Bath & Beyond or in Europe like -- Sainsbury's is one customer, which is in the first category, which is your -- so that way, some Europe customers are in that first category, but major portion of the U.S. market, we are more towards the other retailers.
So overall, the kind of traction which we see, the similar will not be applicable to GHCL, is that what you are saying basically?
Yes. If the situation remains the same way where -- what you just said, that only these 3 players remain -- because see, after the lockdown being opened and once all these stores get opened, the scenario will be different. In the lockdown, these 3 people are doing better. So my understanding is, once the lockdown is over and people start opening, this advantage to these 3 players probably will narrow down.
And just sir, one final bookkeeping question. The debt of -- the total debt which we are having, total debt, how much will be soda ash and how much is the textiles?
Broadly -- Raman, can you answer this question?
Let me just open the data. Yes.
Or I can answer, no problem.
Yes, sir. The total debt of INR 1,240 crores, the chemical side is around INR 770 crores and the textile is around INR 470 crores. And then we have a net debt. On the net debt side, because we had almost INR 90 crore in balance with us, cash balance with us as on March 31, inorganic chemicals had around INR 665 crores and the textile is around INR 460 crore.
The next question is from the line of Riddhesh Gandhi from Discovery Capital.
Just a couple of quick questions. When you said that there is a slight reduction in prices of soda ash, is this in rupee terms or in dollar terms?
So as I said, it will be in rupee terms because -- yes, it be in rupee terms. But not very significant, Mr. Gandhi. It will not be very significant, as I said, it's not very significant.
I guess, I guess. And so effectively speaking, obviously, the near term, you would see the impact being slightly higher because a lot of the consuming industries aren't consuming. Do you expect this to maybe normalized by, let's say, Q3, Q4?
Certainly. Like I said, the first quarter will have -- impact will be slightly on the larger side. Gradually, this will taper down. The demand will start improving in the second quarter. And I think the third and fourth quarter, things should be normal.
Okay. Got it. Understood. And the other question was that -- is that, given that effectively it's an expensive commodity to, effectively speaking, import and the overall percentage of imports is reasonably high, wouldn't [ it impact ] our ability to [ I mean ], environment where overall...
I'm sorry to interrupt, Riddhesh. Your voice is breaking, we couldn't hear you correctly.
Sure. You can hear me now?
Yes.
Sure. So the question was like, given effectively, it's an expensive commodity to actually import, wouldn't you expect all of the reduction in demand effectively to be the importers to take the hit on that?
Well, Mr. Gandhi, probably, I think what you are saying probably will be possible if some antidumping duty comes into place. Because you see -- because globally also the demand is coming down. So the global players also at this point of a time would not like to significantly exit from the Indian market. Because strategic reason also like U.S., if you look at in the current import, the major portion comes from U.S. and Turkey. And these are the 2 countries which almost accounts for more than 50% of the total imports. And for the strategic reason for them not to significantly exit from the Indian market unless they have been pushed because of the -- this, because of the import -- antidumping duty and things like that. The import will come down, but not to the extent that they will completely exit from the market.
Got it. Got it. And the last question was on the write-off of the INR 20 crores, which we have taken above the EBITDA line. So effectively, on this front, we are just being extra prudent, and we don't expect any incremental in the write-offs to happen in the coming year?
Yes. Mr. Gandhi, as you know that we have always been conservative in our approach when we look at our accounting part. Because if you remember, last quarter, the MEIS, the benefit, though that matter was not yet decided, but on a prudent basis, we have removed that from our balance sheet. Similarly, what we thought that there's a likely chance that some markdown may be required by the customers. On a prudent basis, we have taken that. Now at this point of a time, we think that this is reasonably okay. But as you never know that how the situation moves. But we are generally being conservative in our approach of accounting the -- or taking the -- taking care of the cost. I hope I've been able to answer your question, Mr. Gandhi.
[Operator Instructions] The next question is from the line of Sumant Kumar from Motilal Oswal Financial Services.
So my question is regarding soda ash. So what is the mix of your contract and spot sales mix for soda ash?
See, generally, out of the total demand, I would say that around 20%, which is more a 20%, 25% kind of it will be in the contracting demand. Balance 70%, 75% will be in the range of around on a spot basis.
Okay. So if the -- what is the pricing strategy for this contractual basis? How do we price? In the quarterly basis or annual basis?
No, it all depends on the customer, too. There are some customers where the annual contracting is there. There are some customers where it is on a 6-monthly basis. And even some of the customers where they're quarterly basis. But major, it is 6 months and 1 year.
And this is across the industry, the contractual percentage is vary across player to player?
Yes, I think this will vary player to player, but not very significantly, I would say. Because suppose if customer, this is a business, the large players, they generally contract with all the 2 or 3 players, okay? And when they have a contractual obligation, they take the same contracting for all the players. To suppose for Hindustan Lever, they will always go for buying from all the producers. And the contracting conditions are the same. So therefore, I would say, not much difference between the various players in the contracting percentage. But yes, some 10% here and there could be possible.
What is the debt repayment in FY '21?
See, if you look at the debt -- you are talking about debt repayments in FY '21?
Yes.
Raman, you have the data?
Around INR 160 crores.
Total -- for the whole year, right?
Yes. For the whole year.
Let me highlight here that in the last year, we have reduced our debt by INR 137 crores and today, we have in the balance sheet roughly around INR 100 crores cash to preserve the cash for the unprecedented COVID situation.
The next question is from the line of Rohit Nagraj from Sunidhi Securities.
Yes. Sir, in terms of inventory levels, what is the current inventory in the system and will that have any impact on the subsequent demand for the quarter and going ahead?
No. Like I said, if you look at this soda ash, we don't see any impact because of the inventory write-down. But on the home textile, I've said already, we have taken a prudent provision of around INR 20 crores. So I don't see any major impact of the inventory in the subsequent quarters.
I was talking about the soda ash inventory in the overall system because as far as last quarter was gone by, you were expecting the domestic inventory levels will reduce in FY '21. So have they gone up during the last 3 months because maybe the demand was relatively weak for us, sir?
See, in terms of the inventory as on March 31, 2020, versus the inventory today, I don't see any major reduction in the inventory.
Okay. Okay. Sir, second question is in terms of the CapEx for FY '21 are associated, we hope you are undergoing reduction in the CapEx. So what is the ballpark number that we are looking at?
At this point of a time, I don't have a ready answer to this because, like I said, we're reviewing all the cost -- all the CapEx, and we are deferring the CapEx where ever it is -- can be deferred. So probably the number will not be very significant. However, whatever the cost which we have already committed and the projects under consideration, that will continue.
Okay. So what would be the maintenance CapEx? I mean because, as you said, they will be deferring all the expansion CapEx, so maintenance CapEx for both the segments approximately?
At this point of a time, I don't think because, as I said, the projections, we have not been able to make the projections and therefore, at this point of a time for me to commit any number on the maintenance side. Maybe the Q1 call when we have, by that time we will have more certainty. We will come back to you with the specific number.
The next question is from the line of Prerna Jhunjhunwala from B&K Securities.
Sir, wanted to understand the capacity utilization separately between spinning and home textile segment?
See, if you look at today, frankly speaking, spinning is roughly around -- running at around 50% to 60%. And the home textile, because of the labor issues, it is fluctuating. So roughly around 40% is the number, but is fluctuating, these numbers.
And sir, in spinning, which, like domestic is driving the demand to 50% to 60%? Or is it export-driven demand? And similarly with home textiles, would like to understand how is the order book position for the segment because as most of the stores that we are catering to, as you said in the previous -- to a previous person that most of the demand is catered to -- most of the supply is to departmental stores. So those stores are actually closed. So what is driving that 40% capacity utilization, I would like to understand that.
See in spinning, the major focus is more both on export as well as the -- because Bangladesh is one of the major market and even Europe because that -- Europe is also opening up. So we have focused on the European market as well as the domestic market. All put together in the spinning, the combination of this export as well as the domestic market, this is driving to this utilization. On the home textile front, as you very rightly said, at this point of a time, the demand fluctuation is there. But what we have seen is that in the initial, beginning of the year when some of the customers which have kind of postponed their supplies, now in the anticipation that the stores are going to open, they've started reviving those canceled or the postponement orders. I think because of this, we see some improvement in the demand coming to us. Because of that, the orders are coming from the export market.
So this capacity utilization is order-driven and not in anticipation of?
No, no, no. In the home textile, we cannot afford to have order -- I mean anticipation. We always do on this thing. But let me clarify this point. Again, in the home textile, this percentage, which I said to you, 40%, it's fluctuating quite a bit. Some time it's 20%, sometimes it's 50%, depending upon -- so this is the current -- how the things will shape up in the next few weeks or next 2 months as we see it.
The next question is from the line of Avinash Nahata from Aditya Birla Capital.
My question is regarding the gross margin per tonne and EBITDA per tonne. So if I were to ask you for the last, let's say, 3 years, for a period of 5 to 6 months on a stretch and where you're operating at a near optimum capacity, so what has been the range of gross margin and EBITDA per tonne on the higher side and lower side?
We'll not -- sorry, we will not be able to share with you the EBITDA per tonne because of obvious reasons. And if any specific number is required, we can always look at an offline call. I can give you kind of the EBITDA margin percentage, okay? You must have seen that the margin is ranging from 28% to roughly around 35%. FY '19 -- Q4 '19, our margin was around 35%, EBITDA margin. Whereas in this quarter, the EBITDA margin was 31%. And if I take a slightly longer period, as you asked for the quarter-by-quarter, it ranged from 27% to 30% to 32% to 35% in the last year. And then it started tapering down, and it had gone to as low as around 29%. And now it is again, is around 31%. So it is ranging between 27%, 28% to 32%, 33%. If I take year to the whole, because let me also clarify, this margin percentage do fluctuates quarter-by-quarter. But if you look at in terms of the year as a whole, last year, our margin was roughly around 31%, and this year also, the margin is around 31%, overall, means 0.5% here and there.
Okay. So give me a sense on pricing since January till date for this calendar year '20. Where were the prices sometime in January when actually Chinese had problem with manufacturing? And what was some time in between when the consumers like Europe and U.S. have problems, and sometime now, May, when the recovery has started?
See, I can give you a broader number on this thing again. In terms of realizations, if you look at year as a whole, first give you the year as a whole, it had gone down, in FY '19 versus FY '20, the prices had gone down by 2%. However, if you look at the number today, vis-à-vis the FY -- Q4 '19, the realization had gone down by 11%, huge drop. It was approximately in the range of around INR 21,000 in Q4 '19, whereas now it is in the range of around INR 18,500. So that's why, it's roughly around 11% drop in the sales realization during this. During this year, every quarter, the price drop was there. And if you remember the last call which I had, I have indicated that in the January-March quarter, there will be roughly around 4% to 5% drop, and that has happened. I can just again give you Q3 '19, sorry, Q3 '20. The number was roughly around INR 9,400, now it is roughly around INR 18,500. So that range of 5% drop had been noticed in the Q3 versus Q4. I don't know whether I've been able to answer your question.
Yes. So you're saying that across FY '20, it was an almost linear INR 500 a quarter fall ever since Q1, Q2 through Q4 -- into Q4. And where are the prices now?
I would not say that. In the first 2 quarters, the drop was not that significant. The drop has started in the third quarter and the fourth quarter. Raman?
Yes, absolutely right. And as you have rightly said, for the year as a whole, FY '20 versus FY '19, the drop is only 2%.
Yes. So that is in average realization basis. So what are the prices now?
As I said, it is not very significantly different than Q4 '20 but yes, 2%, 3% drop is expected because just market has opened, things will shape up. So maybe 2%, 3% further drop from Q4 versus Q1 '21, you can see some 3% drop again. But still, I want to again highlight, this drop will definitely be duly compensated by the cost reduction as well.
The next question is from the line of Ayush Mittal from Mittal Analytics.
Sir, it's very appreciable to see that we have been able to maintain our margins despite the price fall and all those things. However, when we see the stock price and what has happened in the market, there has been a lot of value destruction because the promoter holding was less and it was pledged. And earlier participant had also asked this question. Are there any thoughts to strengthen this part? Because this has been a big negative part of our company.
Let me clarify first this point. Promoter has not pledged, if I'm -- my understanding, I'm not fully familiar, but Raman can comment on this. But promoter has not pledged and there was no sale of the promoter shares. Raman, is my understanding is correct or something?
Absolutely correct.
In between, there was an open market transaction, in which some shares were sold.
No, there was nothing relating to promoters.
That is number one. Second is that you must have seen that some small -- even small buying, promotor has done some small buying, whatever I see from the enclosed report, the promoter has bought some, little bit volume on that. In terms of their increasing the holding, like I said in my earlier question also, that is not our jurisdiction as the management. Our jurisdiction is primarily on how do I run the plant, how do we take care of our bottom line. And I think there our responsibility lies, and we'll continue to do our job on that area.
Yes, sir. Sir, so given this concern, which has been and the low valuation the stock is, isn't it a more prudent thing that all the CapEx should be deferred for next 2, 3 years. And the cash flow should be used to make higher payouts and do buybacks?
You see in this year itself, if you look at, we have done one buyback, okay? And we have done earlier also one buyback. So surely, we are looking at this potential. But there is a restriction from the SEBI that from one buyback to the another buyback, there's a time gap is required, okay? So surely, that is a priority area for us. And whenever the opportunity comes, surely, we are going to encash that opportunity of creating value for the -- for our shareholders.
To add to what you just said, this year alone, we have -- there is a payout to the stockholders by around INR 158 crores in form of dividend and buyback.
Yes, sir. I appreciate that. But given the low valuation that the stock is, I believe this has to be further accelerated going forward as and when the longer this disconnect remains, given our performance.
I totally -- we totally agree with you, sure.
Surely, we will do that.
And rather than going for growth, this should be more prioritized.
Surely. We will -- see, always understand one thing, which is very important. The ship on which we, all of us we are riding, the growth of that ship is also very, very essential.
It's important.
Yes. Because if the ship doesn't grow, probably that will not be right. But yes, a prudent mix of a reward to the shareholders, a payout, along with the debt. You see last year, we made a profit of -- a cash profit of INR 520 crores after the tax. Out of the INR 520 crores, how did we kind of allocated. On one side, we reduced the debt by INR 137 crore. We paid around INR 158 crores for the shareholders. And we also did the CapEx of around INR 237 crores. We have done a fine optimization between these 3 things. Going forward, like I said, the way we look at, probably the priority to the payout can be given slightly more.
The next question is from the line of Srinivas Seshadri from Mirabilis.
The first question pertains to your value-added products within the Chemicals segment. If you can just break up, of the INR 2,200-roughly crore of the Chemicals segment, how much comes from the sodium bicarb salt and the other value-added products, maybe some split between them, sir? And how they are growing and maybe what is the strategy to grow the value-added product market, sir? That is the first question.
Very valid question you raised about the sodium bicarbonate. Sodium bicarbonate, if you look at 2 years back and now, almost we have added a capacity of something around 60% to 70%. However, if you look at in terms of the percentage of the overall, the percentage of sodium bicarbonate is not very significant because we produce 1 million tonne of soda ash, whereas that we produce something around 60,000 tonnes. So the percentage, if you calculate, it comes to only 6%. When it comes -- but definitely, once we are seeing the sodium bicarbonate, which is now being also used as a clearing agent for all fruits and vegetables, the demand growth is likely to happen in the sodium bicarbonate, and we are ready for the growth in that business. But in terms of -- if you look at the percentage, still it will take a long time to have a significant percentage of -- percentage in the total revenue of the sodium bicarbonate. When it comes to the other salts which you said, salts, which is another division we have, which is, again, a very small division in our total scheme of things. And I don't think that will also add up to a very significant percentage of salt business to the overall turnover of the GHCL or for the soda ash division.
Got it, sir. And there, what is the go-forward strategy over 2, 3 years? Because I mean, ultimately, the core business is very capital intensive to very good margins, et cetera. While the downstream business may require some upfront working capital and other investments, but maybe over the long term, can be a good kind of a cash flow generator, which can offset the capital requirement. So how is the management thinking on those lines from a long-range planning perspective? That was the second part of the question, sir. And also...
Very valid question. Yes, go ahead. Go ahead.
Yes. And just -- I'll just finish with my question, so that you can respond. On the demerger side, if I understood correctly, about INR 700 crores is the attributable debt which will go to the chemical part of the business? Just wanted confirmation on that. And also whether after the demerger, will there be any kind of a related balance sheet funding arrangement between the 2 divisions, anything of that sort? Or will they financially operate very independently with each other? I mean that's all my questions are, sir.
Very right. Very, very valid question. First, let me tell you, in terms of the sodium bicarbonate, I told you, depending upon the demand, we will keep on adding the capacity in the sodium bicarbonate. In terms of the other consumer products, where we have salt and southern based manufacturing hub, and we have certain other products where we market those products like honey and spices, we are growing that business. In terms of the percentage if you look at, the percentage are very healthy of growth. However, in the overall percentage, that percentage is very, very low. We are not committing a large capital on building the brand for those products. We are trying to see that, that business grows at their own. So whatever the cash generates -- they generate and maybe small portion of support from us, they gradually grow that. So we don't have any major aggressive plan of building that brand for a big volume, no, we don't have, honestly. Our focus will be more to utilize the cash, like the previous question has been asked, how do we create a value by better payout, by better reduction of the debt and things like that. Now coming back to the second point which you said, after the demerger, we are clear in our mind on 2 things. The -- after the demerger, both the entities run completely independently. There is no baggage to each other in terms of the funding and things like that. In terms of the debt, how much debt will get transferred to the demerged company will entirely depend at the time when the merger gets impacted. At the time, whatever the debt is there on that balance sheet on that -- on the textile business, that will get transferred. That number, depending upon when this approval takes place, may change. Raman, you would like to add anything to this?
No, absolutely right. See, what basically you asked is, whether the debt of INR 700 crores will go to the Chemical business. As I said, as on March 31, the debt was around INR 665 crore. So whatever will be the debt on chemical will remain in chemical and whatever debt is there in textile, that will go in the textile as and when the approval takes place. And there will not -- they will be absolutely independently run. There will not be any financial arrangement to support that textile business.
Because see, the purpose of this demerger is also one of them, that every business has to expand their own feet.
The last question is from the line of Sarvesh Gupta from Maximal Capital.
We can't hear you, Sarvesh.
Sorry to interrupt. Sarvesh, we would request you to come off speaker. We are unable to hear you.
Yes. Is it better now?
Yes.
Much better.
Okay. So first question, sir, is that, your competitor had also posted their financials. Now for Q4 FY '20, if I compare Q4 to Q4, I'm seeing similar sort of a revenue drop in the range of 15%, 20%. And I'm referring to Soda Ash business. But the kind of drop that we had in our profitability seems to be much more steep compared to the competitor, which has largely been able to maintain the absolute level of EBITDA. So I wanted to get your comments on that and then I'll post another question.
Of course, we have not yet done a comparison -- deep comparison of what exactly has happened. But broader comparison what we have done, because see, my competition also had various other segment also, right? So if I look at the chemical, which is representing us, their margin -- EBIT margin has also dropped by 31%. And whereas our margin has dropped, EBIT level, I'm talking about, by 27%, EBIT I'm talking, absolute EBIT. Our EBIT margin has dropped by 5%, and their EBIT margin has also dropped by 5%. We are at 27%, whereas they are at 23%. This number could be wrong because like I told you, this is our initial comparison which we did. So I don't see that there is a kind of too much gap between their performance and our performance. We are still a margin leader, and we continue to be a margin leader.
Understood, sir. And secondly, on the -- again, if I take the full year for FY '21, now if the antidumping duty does not come, is the understanding right that our volumes can drop by around 12% to 15% in the same range as the drop in the overall consumption? Or will we be able to garner more market share?
No. I think if the antidumping does not come, I think probably everybody has to take this burnt of 12% to 15%. And you are right that we also -- and you see, today, in the first quarter itself, you will see a drop in the overall -- in our overall percentage because they are currently running at only 60%, right? And we estimate that the next month also will be in the same range, 60%, 70% kind of a range. So these 2 months or 3 months because April is also gone because without any production in the month of -- small production in the month of April. All these 3 months put together, probably some drop you will see in this 3 months itself. So this 12% to 15% -- just to kind of a conclusion, I would say that 12% to 15% burnt will be there to everyone.
Due to time constraints, I now hand the conference over to the management for closing comments.
Thank you very much to every participant. A lot of valid questions. And like I've always been saying, your questions definitely gives us a lot of outlook, which gives us an opportunity of looking at the business slightly differently. As our endeavor is, we always try to give you the answer which is, we believe, is the right answer and try to get learned from you people to improve on our performance going forward. Thank you for participation and the guidance.
Thank you. On behalf of Emkay Global Financial Services, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
Thank you very much. Thanks. Thanks, everybody.