Grasim Industries Ltd

NSE:GRASIM

Earnings Call Transcript 2023-Q1

[Operator]

Ladies and gentlemen, good day, and welcome to Q1 FY '23 Earnings Conference Call of Grasim Industries Limited. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Saket Sah, Head of Investor Relations and Head of ESG reporting. Thank you, and over to you, sir.

[Saket Sah, executive]

hello. Good afternoon, everyone. Let me just introduce you to the management team over here. We have Mr. H. K. Agarwal, the Managing Director; we have Mr. Jayant Dhobley, CEO of Global Chemicals and Business Head of VFY and Insulator; Mr. Jayant Dua, CEO of Chemical Division; we have Mr. Rakshit Hargave, CEO of Paints; we have Ms. Ashish Adukia, CFO; and we have Pavan Jain, the incoming CFO of the company.

Let me just pass on the call to Mr. Pavan Jain for his remarks.

[Pavan Jain, executive]

Thank you, Saket. Good afternoon to all the participants. It is my pleasure to speak to you all as the incoming CFO of the company. I've been part of the management team of Grasim for more than 20 years and have handled corporate finance and the risk management and other related matters of the company.

I'll be now closely associated with the investor community. This month marks the completion of 75 years of the company incorporation and more importantly, the worth of our beloved nation. As we start on our next phase of growth journey, the company is well positioned to take a leaf out of permits legacy and reflect the same. As you are aware, the company has sown seeds of the 2 new businesses, namely Paints and B2B e-commerce. I would like to reiterate the newly added Paint business will be an engine of growth to the existing portfolio of businesses.

The B2B e-commerce for -- is, again, a high-growth business with less capital intensity. Both these businesses complement the existing lines of businesses within the Grasim umbrella, catering to large market and adding new set of customers.

We started FY '23 on a very strong note with record EBITDA generation at the consolidated and stand-alone level during the first quarter.

Let me now share some key highlights from our businesses. Our Chlor-Alkali and Textile businesses reported highest ever quarterly EBITDA, driven by better realization and sales volume. The VSF business reported a double-digit growth in sales volume during the quarter on the back of strong domestic demand.

The ongoing expansion in Chemicals business are progressing well, with BBpuram Phase 2 likely to be commissioned by Q4 '23 -- Q4 FY '23 and the epoxy capacity of 123 KTPA at Vilayat will be commissioned by Q1 FY '24. The 50 KTPA ECH capacity, also at Vilayat will get commissioned by Q1 FY '25.

As we had promised in the previous quarter, we are sharing the CapEx spend guidance for FY '23, which stand at INR 3,117 crores for the existing lines of businesses. The CapEx for Paints and B2B will be in addition to this.

In the Paints business, we are currently focused on the timely execution of our capacity. The civil work has commenced at 4 of the total 6 sites.

I'll briefly touch upon the key operational and financial highlights for the quarter. The VSF business reported strong sales volume growth of 10% Q-o-Q and 76% Y-o-Y to 197 KT on back of India-centric demand. We recently commissioned 600 TPD VSF plant at Vilayat has contributed 51 KT to this quarter's sales volume. The global textile demand is currently on the weak footing, given the lockdown imposed in major cities in China and reduced ordering by the U.S. and European retailers.

On the pricing front, the cotton prices peaked in May '22 and have softened thereafter. Just to remind you, the global cotton prices had gone up 2.5 years in the time period of 25 months ending May '22.

The VSF business reported a revenue of INR 3,728 crores and EBITDA of INR 406 crores for Q1 FY '23. The VFY business reported a revenue of INR 583 crores and EBITDA of INR 94 crores for this quarter.

Moving to Chlor-Alkali business. The business reported best quarterly EBITDA, driven by highest ever ECU relation of 53,560 per tonne on the back of multiple tailwinds like strong global caustic soda prices, weak INR and a stable demand environment. The global caustic soda prices averaged higher at $769 per MT in Q1 2023 -- Q1 FY '23 against $719 per MT in Q4 FY '22, driven by factors like supply chain disruption and higher energy prices.

Chlorine relation remained in the negative territory with weakness in certain chlor users industry like dyes and pigments. On the other hand, the demand for our captive chlorine reps increased Y-o-Y by 32% in Q1 FY '23 from 28% in Q1 FY '22 on the back of higher sales of chloromethane and water treatment and other penetration products.

In addition to the captive chlorine integration percentage, we also wish to share the total chlorine integration percentage, including the pipeline sales to our dedicated customers, which trends at 60%.

The Advanced Materials business reported a sequential improvement in financial performance on the back of better realization and some easing of cost pressure. As highlighted earlier, the company reported strong quarter 1 FY '23 financial performance, driven by multiple factors despite cost pressure. The consolidated revenue for the quarter are up 41% Y-o-Y to INR 28,042 crores and EBITDA is up by 10% Y-o-Y to INR 5,233 crores. While at the stand-alone level, revenue is up by 23 -- 93% Y-o-Y, INR 7,253 crores and EBITDA is up by 69% Y-o-Y at INR 1,364 crores.

On the ESG front, the company is working in a focused manner and making continuous progress. The company has adopted Task Force on Climate-related Financial Disclosures, that is TCFD framework, in FY '22 to reflect its commitment to improve the quality of ESG disclosures. Taking cognizance of our ESG-related work, which is in line with the global standards, the company has been included in the FTSE4Good Index.

I would like to reiterate that given our strong balance sheet and strong portfolio mix of cash flow businesses, we are well positioned to harness the potential of our new businesses.

I would like to wish you a very happy independence day in advance. And now I hand over back to the operator for Q&A.

[Operator]

[Operator Instructions] We have a first question from the line of Nirav Jimudia from Anvil Research.

[Nirav Jimudia, analyst]

Congratulations on a very good set of numbers. So I have 2, 3 related questions on VSF and then one on chemicals. So I'll start with VSF. Sir, in your presentation, you have mentioned that China VSF prices have improved almost 14% sequentially. So they are on spot basis. So just wanted to understand, because our blended realization this quarter for the VSF division has also improved by almost INR 10 a kilo, if you can share how much of this price increase in the China or in the international market is already being captured this quarter. And further to that, whether you have taken any price hikes in Q2 as well. So this is one.

Second, on the VSF side is, sir, whenever we will operate our capacities at the optimum level at around 8,24,000 tonnes, how much pulp is already integrated? And how much we are more planning to integrate, if you can share your thought process on the same?

Sir, third question on the VSF side is our specialty volumes is down sequentially. So last quarter, we did something around 44,750 this quarter, our specialty volumes is almost around 37,500. So any particular reason for the same? Has the premiums narrowed down and we decided to switch towards more of the grape VSF production? So these are the 3 questions on the VSF side.

[Hari Agarwal, executive]

First question on price increase in China in the Q1 and also a corresponding increase in our India realization also. So yes, these are related to some extent because VSF is an international product and all the markets are connected in many ways, China being the largest producer and consumer of VSF has a big influence on the international prices. So we'll have to be in line with what is happening in the VSF market.

Now since end of last quarter, probably one in June itself, the price has started correcting in China also. So if you are monitoring them, you will notice that VSF prices have softened in China also. In here, we have to adjust a little bit but not to the same extent because we also don't increase to the same extent as price increase happens in China. So that was on the prices.

And also the cotton prices have influenced on the all other fiber prices. So cotton prices in forward have come down significantly, and they will also have some influence on the VSF demand and price to some extent, not that large, but because VSF price did not increase in the same risk proportion as cotton prices.

Move to specialty volume. Yes, there was some reduction in the month -- in the first quarter compared to previous quarter. To some extent, some products are seasonal. So that one is one aspect. Second, to some extent, we had more demand for standard VSF in India. So we adjusted our product mix to cater to the India demand.

And in the international market, there were some more competitive situation, not some demand adjustment of inventory adjustment at our customers place. So in the export market of specialty, there was some reduction in the volume. So this was on the specialty things.

And in the coming -- going forward, there will be some adjustment period because now recessionary fears are prevailing in Europe. And with the cotton uncertainty and volatility, the international retail and brands are sitting on used inventory because of supply chain disturbance. And they are now trying to optimize their inventory levels and optimizing the orders also to the new orders to the leverage. So this adjustment period will last this quarter and got up some [indiscernible]. So we have to sit through this adjustment period, and then the normal sales should return to the value chain in textile industry. That is on the specialty. What was your third question?

[Nirav Jimudia, analyst]

Pulp integration.

[Hari Agarwal, executive]

So we are now almost 35% integrated with our captive, and we have lined up a long-term supply arrangement with our regular suppliers. We have also developed some new sources. And there were some disturbance in the pulp supply because of the force majeure reason at one of our supplier's plants, there was a fire. And at another place, there was serious flooding, severe flooding and storm. So there was some disturbance in the [ night ], but now things are getting back to normal. So we will -- we are working in the long term how to increase this pulp integration, but this is a long-term issue, and clearly, we are fine with the current arrangement.

[Nirav Jimudia, analyst]

Okay. So sir, based on what you just mentioned, is it safe to assume that probably out of the CNY 1,800 price increase, which have happened in China and probably some corrections over there. Some portion or maximum portion of that is already being captured in Q1, and probably we haven't taken any price hike after our Q1 numbers.

[Hari Agarwal, executive]

Yes. Look, it doesn't happen exactly RMB 1,800 in China. So we have also exact corresponding thing. It doesn't work out like this. But more or less, like we cannot expect price increase in the current environment because, in China, the correction is quite serious.

[Nirav Jimudia, analyst]

Got it. Sir, one more question on the VSF side is in the presentation in the opening slide. You have mentioned that we are debottlenecking our VSF capacities and we intend to spend something around INR 587 crores. So from 8,24,000 tonnes, which is our current capacity, how much addition we are intending to plan? And how much time it will take to complete this debottlenecking?

[Hari Agarwal, executive]

So this entire amount is not for the debottlenecking. Most of it is part of the residual CapEx commitment for our [indiscernible] expansion, which has already happened and stabilized. And in July, we achieved 100% of the nameplate capacity for the expansion. But there are some commitments, which are not directly related with the fiber production, but ancillaries like environment-related items or gas recoveries, et cetera, they are pending. So I think almost INR 350 crores or INR 400 crores is on those accounts.

And the debottlenecking is a small, very light, capital-light thing. And we expect to get something around 80 TPD or investment of about INR 200 crores or so. So this is not made on the debottlenecking. And production also is not expected to increase a lot. This is our normal thing. We keep doing these things whenever we can find opportunity to improve production from existing assets. We try to maximize that. No, this is not going to be a big game changer like expansion.

[Nirav Jimudia, analyst]

Got it. If one last question, if I can ask on chemical side and then again, I'll join back on the queue. Sir, our annual report mentioned that we are planning to add something around 390 megawatts of renewal capacities for our Chemical business. So similarly, if you can say or explain that whenever we will hit the peak production for our Chemical business, predominantly caustic side, how are mix of power would look like, let's say, in terms of our own captive thermal, in terms of our own captive renewables? And how much then we have to be reliant on the outside power for sufficing our power requirements?

[Jayant Dua, executive]

Okay. So I think what we mentioned with our long-term plan where, as you know, in renewables, we really have to look at from an aspect of majority of regulatory aspect, which are still unfolding. Desired output, yes, we are looking at reaching renewables to somewhere around 30% of our total requirement.

Now the mix will continuously keep on changing as the regulatory environment unfolds in front of us. So I think it will be very difficult for us today to really quantify what will be the final mix. I think maybe over the next 2 or 3 quarters as the regulatory environment becomes more clearer in terms of how renewable play will happen, then we will be able to get a much clearer picture on that. But from a desire aspect, we spend about 30% of what we are looking at.

[Nirav Jimudia, analyst]

30% by 2025.

[Jayant Dua, executive]

Again, I'm not getting into a time frame. The reason is, very clearly, it will be all a function of how regulations come across. Post regulation, then you have to look at it from how you want to complete the whole picture. So it might be 2025, it could be 2030, it could be '27. I think we'll keep the time frame very nebulous as of now.

[Ashish Adukia, executive]

As the target, we've taken that we would like to achieve it to at 30% by '25.

[Operator]

We have our next question from the line of Navin Sahadeo from Edelweiss Securities.

[Navin Sahadeo, analyst]

Yes. And once again, congratulations on such a record-high profitability. My questions were about the margins as we see at least in the near-term perspective. So as you said, prices have been trending down. So if I just look at some of the VSF prices in China from RMB 15,500, they have gone down to almost RMB 14,500 or so. especially off later in from, let's say, mid-July to now as we speak. But we don't see that kind of a similar decline in the pulp spot prices. So I just wanted to understand that is it fair to say, at least from a near-term perspective, that the peak margins are probably behind? And at least for the next 1, 2 quarters, VSF may see some sort of softness in the margins.

[Hari Agarwal, executive]

So yes, [indiscernible] on the international prices of VSF. You've got on at RMB 14,500 and RMB 15,500.

[Operator]

Sir, I'm sorry to interrupt, but the volume is a little low.

[Hari Agarwal, executive]

So you are very up-to-date on the international VSF prices. And yes, so this is the reality, and we cannot go against the tide. So this time, pulp prices are important. Pulp prices are not reducing in the accent. But we believe that if the VSF market show so much of softness and pulp prices also will have to adjust, it's a matter of time.

And there have been some different regions for pulp market like supply-related issues or more. There were some force majeure situations at major merchant pulp suppliers. And as they get resolved and the VSF market softness, then pulp prices should also respond to some extent.

But here, other things are -- other than pulp also, there have been other inputs, which have gone up very high, like caustic, sulfur, coal. And those are in the adjustment mode, to some extent, like sulfur prices have come down. Coal prices are also trending down. So margins will remain under pressure. It will not be same like we enjoyed in some favorable quarters. But yes, this adjustment has to play out.

[Navin Sahadeo, analyst]

Fair, and I appreciate it. But for chemicals then, because your press release also says like June exit, that $6.50versus the average of $7.60-odd, which we recorded for the quarter. So similar trend in chemicals also of a sequential margin decline is expected or there, the cost relief is probably much more, and hence, the decline in margins may not be that severe. How should we look at those, sir?

[Jayant Dua, executive]

This is Jayant. I think in -- particularly in the chlor-alkali being electrolyzers, we are largely dependent on power as our largest source of cost. So -- and while we have seen on the fuel side, energy prices getting soft, particularly on the crude side. We haven't seen that material change yet on the coal. The expectation is as talking about how the world is moving along, we could see that. So that will have a material gain on our cost side front on us.

On the international front, I think there is a little bit of -- the entire prices, which shot up had a couple of global events of the Ukraine, the entire supply chain becoming very, very distorted and tight and also the COVID impact in China. Our COVID impact in China is reduced. China started producing a lot more material and starting giving it to international market.

And yes, you're right, at this point of time, currently, we are seeing a declining trend in the international market. But the volatility is so much that at this point of time, I think it's been very difficult to predict on the caustic side, what would could be the margin decline for the quarter. The trend looks that it will be tapering downwards, but to quantify becomes a very difficult challenge at this point of time.

[Navin Sahadeo, analyst]

Yes, appreciate it, sir. Just my last question on the CapEx bit. Two parts to it. Of course, you've given a very nice breakup to the overall CapEx, total that we're planning to spend this year is over INR 3,100-odd crores. How much should we pencil in, including paints as well as the B2B e-commerce for '23 and '24?

[Ashish Adukia, executive]

So we are not -- it's very difficult for a paint project -- ongoing project to give year-by-year guidance because it depends on difference at what stage it is, right? There is land acquisition and followed by environmental clearance. The new order for equipment, a lot of equipments are actually imported. So there's lead time to that. So -- and the spend on that is generally dependent on -- and these are big spends, right? So if something spills over to next year, it will be a wrong guidance to give.

So we are -- we've given you a guidance of INR 10,000 crores of project cost for paints and likewise for B2B as well as the total cost. So it'll be spread over that period, right? Until now, we have spent about, as we've mentioned, INR 825 crores until June end. At quarter 1, it was INR 212 crores. And if you see quarter-on-quarter figure, it's not obviously evenly spread. So it's difficult to say what that breakup would be. But of course, it will be -- from now on, it will be front loaded because we've started ordering for equipment, et cetera. The construction has started in full swing in almost 4 sites.

[Navin Sahadeo, analyst]

Okay. But safe to assume that a chunk of it, like regardless of the guidance, but a significant chunk may come in per se, let's say, second half of '23 and '24?

[Ashish Adukia, executive]

Absolutely right. I think that it's good to assume because of -- given our target that we've given for commissioning of the capacities.

[Operator]

[Operator Instructions] We have a next question from the line of Prateek Kumar from Jefferies.

[Prateek Kumar, analyst]

My first question is on VSF segment. We have operated utilized capacity at close to 95% this quarter. So is it something like we -- like, let's say -- I mean -- and we mentioned that in June, we operated 100%. So a next leg of -- I mean major expansion in terms of brownfield, I'm not talking about debottlenecking, but a major brownfield expansion may be lined up again in parallel with the paying CapEx, which we're already executing?

[Ashish Adukia, executive]

You're talking about caustic expansion?

[Prateek Kumar, analyst]

VSF expansion.

[Hari Agarwal, executive]

Yes. We would love to do that, Prateek. But for the time being, that is not immediately on the drawing board. So we have to see and the same, we have to optimize and balance CapEx, debt-to-equity, debt-to-EBITDA and other new businesses. And this is a capital allocation challenge on strategy, so yes. But sure, we are aware of this situation and we are continuing to develop our market. And at the appropriate time, definitely, we will draw the plans.

[Prateek Kumar, analyst]

And in general, like you operated like -- I mean, you operated like 95%. And for the full year, we should assume now, we should have like 95% utilization for VSF capacity of 24,000 for the segment?

[Hari Agarwal, executive]

Yes, we would love to do that, but there may be some in between headwinds like we had this pulp supply situation, which affected production at some of our plants for a few days or week or something like that. But barring such unforeseen situations or some severe marketing because we are living in such volatile conditions. So if things remain normal, then yes, we have been always operating in high 90s or like above 90s. So that is our attempt and target for sure.

[Prateek Kumar, analyst]

Sure, sir. And on CapEx, one more follow-up. So like we have given for paint, INR 10,000 crores, B2B at INR 2,000 crores. But for other ongoing businesses, I mean you mentioned that there's a capital allocation question. But over FY '23 to '25, what kind of CapEx, which we may want to do over FY '23, '25? And maybe what is the kind of net debt to EBITDA we may want to have as an...

[Hari Agarwal, executive]

[indiscernible] of other particular business, your question.

[Rakshit Hargave, executive]

Other than paints -- you're talking of other than paints and B2B.

[Prateek Kumar, analyst]

No. So I mean, frankly, I mean, while FY '23 CapEx number was not announced until now in terms of -- because it was not approved as was suggested in last call. But it appears like with high to us at least. So like stand-alone CapEx, FCC over next 3 years, besides the CapEx on paints and B2B, what kind of CapEx which we might be doing over, I mean, like VSF, Chemical and other businesses?

[Ashish Adukia, executive]

Sure. I think let me first explain the CapEx that we've given out for this year, okay? I think in terms of guidance, we'll continue to give the annual CapEx rather than trying to get next 2-, 3-year guidance. But you asked about this year's guidance now. Mr. H. K. Agarwal had highlighted the 3 categories of CapEx that we have in VSF, which is debottlenecking a small portion, the spillover of Vilayat expansion and then the balance is modernization and maintenance CapEx. The modernization and maintenance CapEx also includes some of the projects that we are going to take up, which are not going to be annual every day recurring CapEx. It will be onetime.

For example, in the past, we have talked about carbon absorption plant, et cetera, to be put up in all our 4 sites of VSF. So those are large CapEx, but that does not record after once it has been put. So therefore, that figure is slightly on the higher side.

In chemicals, you have 8 sites. And in all those sites, you keep putting up either chlor-alkali which we have announced, then there are a projects ,chloromethane, et cetera, that we have already announced.

Then the third is power. Both renewable as well as in some places where it is critical, you need to put up something to enhance the capacity. So we are doing that. So those are the 3 categories in the main strategic CapEx and then there is maintenance CapEx. So these are the things that are forming part of this INR 3,000-odd crores that you've seen.

[Prateek Kumar, analyst]

And annual maintenance CapEx, how much?

[Ashish Adukia, executive]

See, I think it will be -- it varies. Like I said, that environment-related CapEx can be -- may not be recurring once you put up a particular type of equipment, but somewhere around 1,500 to 1,500, that range you can assume for Grasim.

[Prateek Kumar, analyst]

So I mean, just for -- I mean, it's a question on this. I mean we are anticipating a very large CapEx in FY '24 for paints because we are assuming that in FY '25, we should launch a product. And we have like 1,000, 1,500 basic CapEx, which we should have anyway. So next year also, pretty much we should have like a INR 6,000 crores kind of CapEx or Grasim stand-alone operations.

[Ashish Adukia, executive]

No, early for us to comment. When the Board approves the numbers, we'll definitely share with you. Directionally, yes, there will be large paints CapEx next year along with other CapEx.

[Operator]

[Operator Instructions] We have a question from the line of Bharat Sheth from Quest Investment Advisors Private Limited.

[Bharat Sheth, analyst]

Sir, first question is on taking on this VFY -- VSI -- sorry, VSF margin, which in this quarter, value-added product was relatively low. And you said that one of the factors was also softer seasonality -- softer. So going higher with -- if we improve this value-added product, so how much can it I mean, give support to our profitability?

[Hari Agarwal, executive]

We have accounts for roughly 20% of our total sales in this quarter. And will -- our attempt is to always increase the volume and percentage share in our total product mix. And that's normally, on an average, on a premium in terms of pricing about 12% to 15% over normal standards.

So -- but still it will take time. It is not that we can increase that volume of shares overnight. It is a very slow process because approvals by the brands and then value chain and all these things. And there is a competition. It is not that it helps us without any competition. So it's a long process, and we have been working on developing our reps. And this is -- directionally, we will continue to increase that. So the effect will be slow, but it will be slower on the study.

[Bharat Sheth, analyst]

Okay. But to some extent, I mean, in quarter-over-quarter, this quarter, particularly our volume was low vis-a-vis Q4. So again, to last year, normal this year, there will be some addition will be there?

[Hari Agarwal, executive]

Yes, this year, we are seeing a lot of volatility in international markets where also like from Grasim point of view, almost 50% domestic, 50% export-oriented and international markets are seeing more headwinds in overall textile business. So difficult to say the specific things that how much will be the increase or what will be the volume this year.

[Bharat Sheth, analyst]

Okay. Sir, and coming on the chlorine -- I mean, chemical side. In chlor-alkali, we said that prices are declining. But I understand this year -- I mean in this quarter, our captive consumption has increased, so chlorine which you used to contribute a little negative margin. So how do we see this quarterly -- I mean from [ taxing ] for the current year?

[Jayant Dua, executive]

Chlorine [ integration ] are caustic integration is largely our internal consumption is in caustic side. Chlorine is all, which is either used in our own labs or producing hydrochloric acid or sent to our ancillary or sent out to the market. And growing at this point of time is trending on negative has been for the last 2 or 3 quarters now. And interestingly, our chlorine integration, if I look at as a sum total of all three is 60-odd percent today and 40% is what we call as the merchant sale of chlorine.

So on chlorine prices, you've got segments like pigments and dye stuff, which are impacted because of the European situation where a large export happens. Also, there are -- so there are some positives, which happened in some industries. So pulp and paper has gone up because of the school opening, where pigment and dyes went down. Water seasonality is there. So in monsoon, you will see large, more of sanitization product sales go up. Post monsoons, they start coming down.

So that's a continuous business operation cycle. But currently, I think the way we look at it is 60% chlorine integration internal, 40% is merchant sale. Currently, chlorine is running negative. And the trend is at the moment that it continues to run negative because of the entire chlorine demand, which probably needs to pick up more than what it is today.

[Operator]

We have a next question from the line of [ Vihang Subramanian ] from Saba Capital.

[Unknown Analyst]

Apologies if it's been asked before. I just got disconnected in the middle. So on the paint side of the business, just wanted to understand on a broad strategy perspective, what would be the strategy there? Like -- because, I mean, given that we have already 2 large incumbents, like would our strategy be based on pricing?

[Ashish Adukia, executive]

Rakshit, you're on the call. Would you like to take it?

[Rakshit Hargave, executive]

Yes. Yes. I'm on the call, and I would like to answer that. Obviously, when we have thought to enter this market, we have a specific plan. But you would appreciate that at the moment, we would not want to share anything about it. And it is confidential, but the team is obviously confidently working on it. I hope that is...

[Unknown Analyst]

Got it. I mean, any details you could give, which would be like...

[Rakshit Hargave, executive]

No, I would really want to avoid any forward-looking statement on our strategy in terms of what we are going to do to keep it very proper. But obviously, we have a plan and it is well put out.

[Unknown Analyst]

Sure. And just from a time line perspective, like if I understand correctly, FY '25 is when we would be looking at some kind of revenues come through, is it?

[Rakshit Hargave, executive]

Yes. Like we disclosed last time, the last quarter of next FY.

[Unknown Analyst]

All right. So 4Q FY '24, then, okay.

[Rakshit Hargave, executive]

Yes.

[Operator]

[Operator Instructions] I would now like to hand the conference over to Mr. Ashish Adukia for closing comments. Over to you, sir.

[Ashish Adukia, executive]

Yes. Sure. Before the closing part, I just want to clarify one comment I mentioned on renewable. So renewable, our target is 25% by FY '30 and not 30% by FY '25. So apologies for that confusion.

So this is my last call. And as I hand over to Pavan, I wish him all the luck. I've had great 3 years. We did some good strategic improvements. We launched -- not launched, but we incubated the paints. We sold fertilizers. We have -- we are in the process of incubating B2B e-commerce. We've stepped up the dividend. So hopefully, we've made you happy. And we're always here to listen to you and see how we can improve and address your concerns. So thanks a lot.

[Operator]

On behalf of Grasim Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.