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Nocil Ltd
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Ladies and gentlemen, good day, and welcome to the NOCIL Limited Q4 and FY '22 Earnings Conference Call.
This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict.
[Operator Instructions]. Please note that this call is being recorded. I now hand the conference over to Mr. S. R. Deo, Managing Director from NOCIL Limited. Thank you. Over to you, sir.
Thank you very much. Good afternoon, all participants. A very warm welcome to everybody on the call. Firstly, we welcome Mr. Anand, who has joined NOCIL Board, effective from 2nd of March, as Deputy Managing Director. Mr. Anand comes with a rich experience of over 20 years from BASF Group, and he has handled several critical responsibilities at BASF. Along with Mr. Anand, I have Mr. P. Srinivasan, our Chief Financial Officer; and SGA, our Investor Relations Adviser.
Hope you all have received our investor presentation by now. For those who have not, you can view them on stock exchanges and the company website. I hope you and your loved ones are safe and doing well.
Let me now discuss the period's business highlights. We ended FY '22 with a revenue of INR 1,571 crores, with a growth of 70% that enters a 16% annual growth -- volume growth compared to the previous year. The revenue mix for the year is domestic, 64% and export, 36%.
On a sequential basis, the domestic business for the quarter has shown a marginal growth, while the export [ deviate ] marginally due to logistics and shipping issues. The year saw a production growth of over 34% to align with our strategy of building inventory to make short-term demand spikes and any supply disruptions. NOCIL could pass on the cost increase through appropriate finished goods price increase on a periodic interval. The cost increases were due to the Russian-Ukraine situation, which led to a higher crude oil, benzene prices, the increase in the spread between benzene and its derivatives.
Further, the unforeseen high utility prices of coal, gas and supply chain disruptions on account of COVID disturbances in China, delay in arrival of import parcels and the various logistics issues and also on the impact of input costs.
NOCIL, over the last few years, has been taking various steps to mitigate some of the supply chain disruptions in the form of alternate sourcing, encouraging local supplies to align with Atmanirbhar, reduce dependency on China on various raw materials. In spite of the challenging environment prevailing in the last 2 years, NOCIL has performed well due to integrated value chain, technological strength, wide product range and good marketing network. With these measures, we are happy to inform you that we could outperform our guidance of more than 10% volume growth and more than 50% revenue growth in FY '22 compared to FY '21.
As informed earlier, during our previous call, we continue to pursue to consolidate our position in the global and domestic rubber chemicals market. To meet these objectives in near term, the company has plans to invest in small CapEx programs towards the debottlenecking of capacities of some of the products. Further detailed evaluation on additional CapEx is being carried out. And on finalization, we will inform the investors at large.
On the industry scenario, in FY '22, supply side issues, such as semiconductor chip shortages, and logistic issue impacted OE demand, but tire replacement demand was strong across the product segments. Tire exports were strong fueled by robust demand from key destinations, such as United States and Europe. Domestic demand for tire is, in general, follow the GDP growth pattern, and we, therefore, believe that this growth can be in the region of 7% to 9% in FY '23.
As the demand outlook in the medium term remains favorable, the CapEx plans announced by some of the tire industry presented to us present us an opportunity to participate in the same.
This is from my side. Now I would like to hand over to Mr. P. Srinivasan to give you an update on the financial performance. Thank you very much, and over to Mr. P. Srinivasan.
Thank you, Mr. Deo, Mr. Anand, and good afternoon to everyone. Hope you all are safe and in good health.
To summarize or brief you the results of Q4 FY '22, we registered the highest-ever quarterly revenue of INR 463 crores. And the performance was always on the back of better realization during the quarter, which we indicated in the previous call that we are going to have price hikes.
So some of the financial highlights, let me run through that. The volumes for Q4 FY '22 grew by 34%, taking a base of Q1 FY '20. It means on a base of 100, it is 136 or 135, whereas our sequential quarter volumes were flattish. The [ reasons ] have been explained by Mr. Deo. The volumes for FY '22 grew by 16% as compared to FY '21. And as indicated, Mr. Deo, we have already exceeded the earlier guidance of 10% plus.
Net revenue for Q4 FY '22 stood at INR 463 crores as against INR 389 crores from Q3 FY '22, a sequential growth of 19%. The sales growth was driven by price hikes taken across product segments during the quarter, commensurate with the cost increases and also the change in the product mix. Net revenue from operations for the financial year '22 stood at INR 1,571 crores as against INR 925 crores recorded in FY '21 with a growth 70%.
Coming to the operating EBITDA parameters. The operating EBITDA for Q4 FY '22 stood at INR 111 crores as against INR 50 crores quarter-on-quarter growth of 121%. For FY '22, the EBITDA is about INR 283 crores as against INR 127 crores in FY '21, a growth of 123% on a year-to-year basis. EBITDA margin for the quarter stood at 24% in Q4 FY '22 as compared to 13% in Q3 FY '22. For FY '22, the overall EBITDA is 18% as against 14% in FY '21. EBITDA margin expanded primarily due to the operating leverage benefits. As we suggested, we have increased our production reach by 34% as compared to the previous year.
On the profit before tax parameters, or the PBT parameters, the PBT for Q4 FY '22 stood at INR 95 crores as compared to INR 40 crores for Q3 FY '22. PBT for the year '22 -- full year '22 stood at INR 240 crores as compared to INR 104 crores in FY '21.
On profit after tax parameters, the profit after tax for Q4 FY '22 stood at INR 68 crores as compared to INR 30 crores in Q3 FY '22. PAT for the financial year, whole year '22 stood at INR 176 crores as against INR 86 crores in FY '21.
With this, we would like to open the floor for the question-and-answer session.
[Operator Instructions] Our first question comes from the line of Nirav Jimudia from Anvil Research.
Congratulations to the team for the good job.
Thank you.
I have 2 questions. So one for Mr. Srinivasan and then one for Mr. Deo. So first to Mr. Srinivasan, sir, if you can just guide us in terms of the total volumes, what we have sold in FY '22, how much is coming from the exports? In terms of volume terms, sir, percentage also would help.
1 minute. We will let you know, just give me a second.
Yes. So -- and sir, you mentioned in your opening remarks that the increase in the realization is -- is a derivative of 2 things: one, price increases and some product mix changes. So if you could just help us explain that. This is because some of the products from our expanded capacity would have been sold for the first time, or some of the products where we have already been selling higher realization products, and those products have been sold more in this quarter and because of which your product mix is showing some higher realization. So if you can just explain that.
The export volumes per se is about -- it has grown by [ 70% ] for a year, and it constitutes roughly maybe 35% to -- 35% of the overall volumes. That's number one.
On number 2, as far as the price realization are concerned, I think we indicated that product mix. So there is a series of events which has happened. You have the input cost going up very substantially from -- more particularly from October '21. So we had to incur that. And largely due to the expanded capacities at Dahej. And with increasing approvals from customers, we could offer more volumes from Dahej. And that resulted in the higher value product mix. So therefore, that answers the price corrections or the revenue parameters.
But sir, the capacities where we have done the expansion, it is safe to assume that probably those products would have been having the higher realization than the existing basket of products, which we were earlier selling from our capacities.
Yes, the weighted average, component has undergone a change because of the higher value bucket is increasing.
Okay. Sir, second question to Mr. Deo. So like in terms of our guidance of hitting the full utilization by September '23, I think if it still holds true, then how we are placed with respect to the validation time from the customers, after which we may start seeing those incremental volumes coming to us?
So basically, I think that outlook that we will reach our volumes by September '23 still holds good, okay. Second thing, I think I mentioned one thing that we have now started looking at first the debottlenecking of the plants. So that -- after that, whatever volumes will come, we will start increasing the volumes through bottlenecking, so which is a really short-term plan. And the long-term plan I have already explained that we are looking at a long-term plan.
Got it. Correct. But sir, normally, when we go to the customers and then we start receiving those approvals for the incremental volumes, where we are currently placed, so like in terms of -- because 2 years have been passed from the time we have probably commercialized those capacities and going to the customers, getting back those validation parameters. So from which quarter we will start seeing those sort of benefits accruing to us?
See, basically, as long as we are debottlenecking the product, it does not require approval. So it's only a capacity increase. So there is no change as far as the approval is concerned. And those debottlenecking work has already started, yes.
Okay. And sir, if you can quantify how much would be the addition through this debottlenecking to our total capacity as and when it will happen? Any indication would help, sir.
Nirav, it will be very difficult to quantify the things because the debottlenecking projects are such that we start realizing it only when the projects are complete. So of course, we have objectives for debottlenecking, so difficult to quantify. And this debottlenecking will happen only for certain products, not for all the products.
Got it, sir. Got it. And sir, lastly, if you can tell us your learnings and improvements over the last 2 years because one was a year in FY '21, where there were demand-led problems, and in FY '22, it was more of a supply-led problems. So if you can just help us understand that what sort of initiatives, which we have taken and which now becomes a permanent to us in terms of either, let's say, process optimization or some sort of backward integration from NOCIL's point of view. If you can just give us some qualitative analysis of that, that would be helpful, sir.
Basically, process optimization is a continuous process. And it's part of our continuous objectives. So this is not an objective which stops anywhere. That -- continuous improvement is a part of the whole game. And as far as the improvements are concerned, I think -- the challenge is still continuing to bring supply chain. But as I mentioned from last [ 18 months ], we have been changing the whole supply strategy and the supply chain security, that is one thing which we have done. As far as the products are concerned, I think about the sales and the sales growth which we have indicated that it's more or less it matches with GDP growth.
But sir, like any sort of examples if you can quantify, like in terms of, let's say, some of the costs, which earlier we will be incurring on a higher scale, has now been optimized and now that could be permanent to us whenever we will grow our volumes to the fullest extent. So if you can just quantify some of those...
I think this is a very, very specific question which you are asking me. And I won't be able to answer this at this forum. The only thing I can give you a very generalized confidence that when we talk of optimization or it is optimization of raw material usage, it's an optimization of energy, which continues to happen to be competitive in the business.
Got it. Got it. And sir, are we looking for any backward integration in terms of any of our products?
Nirav, as I said, we are looking at a long-term view, but I'm not able to share anything with you, okay, as far as backward or forward integration is concerned.
Got it. Got it. Okay, sir, congratulations and all the best for the future, sir.
Our next question comes from the line of Rohit Nagraj with Emkay Global.
Congrats on a stellar Q4 as well as FY '22. Sir, my first question is, we have been -- our performance has been increasing and better in every single quarter, and that is also an element of price increases that we have exercised since October '20. Now in the recent past, again, the input cost inflation has come in. So what are we hearing from our customers in terms of further increase in the prices, both in domestic as well as exports market. And whether they are really -- there is any impact on the volume front that we are experiencing in the recent months or so?
Rohit, Srinivasan here. As far as price correction or price matching is that we actually do the price matching with orders being offered in the marketplace by the competitors to the customers. And you will appreciate that one cannot be different with the entire customer on that front. So I think on the pricing front, we are adjusting our pricing, or we are seeking price corrections based on what the market is offering and according to the cost increases. So that's one part. Second part, we have not seen any -- heard any news on degrowth in volumes as it stands today.
Right, sir. Got it. This is really helpful. Sir, second question is in terms of the competition. So -- how has been the competition from China, both from the domestic imports point of view, or from the exports from Chinese market, given that in the U.S., there have been sanctions on Chinese imports. So how is it -- I mean, your overall perspective, how things have changed over the last 1 year in terms of the customers' perception about importing other than, say, Chinese players? .
These -- on these 2 folds, I would say, we would like to clarify as one. One, before this COVID came in, our market share in India was about 33%, 34%, which we have been communicating in the past that we are about 40%, 42%. So that's the improvement which we have seen. So this is a derisking of China, or there is more of an encouragement to the domestic suppliers, which is good because, a, we had additional capacities to offer, that's one, that's a critical point, and we are nearby surplus next. The second part is, if you see the China Sunsine balance sheet or their annual report, I think they are about 64% domestic, about 35%, 36% of exports. Obviously, the access to U.S. market has become a little expensive because of the duty factor. But when we -- it also has presented us an opportunity for NOCIL to grow in the U.S. market.
Right, sir. Got it. This was really helpful. One, just a quick question on the balance sheet. So this year, what was the CapEx? And given that we will come out with a CapEx update later, what will be the maintenance CapEx for FY '23?
See, this year, we have -- I think if you -- the fixed assets, which will come out in annual report, which I think we are talking about INR 35 crores thereabouts CapEx, that's this year, which includes a lot of residual -- infrastructure projects and some other maintenance CapEx. Maintenance CapEx, one cannot quantify in absolute terms estimate, but it depends on when and even in particular, even happens. So if there is an even happen that requires an replacement, obviously, we'll have to do the replacement. But I think it's not significant. That's what we can say. But I don't think it would be appropriate to quantify that.
Our next question comes from the line of Dikshit Mittal with LIC Mutual Fund.
Sir, my question is in this fourth quarter, is there any element of one-off inventory gains maybe because of higher inventory in the quarter?
Just repeat the question? Sorry, we missed your question.
Yes. Sir, in the margins that were reported, is there any one-off inventory sort of gains? Because I think I see that your inventory has jumped up quite sharply even at the end of quarter. So is there any element of inventory gains there in terms of...
No, it's not a gain. It's not a gain. I think it's a buildup of inventory because our production rates were higher than the sales rate. So obviously, inventory buildup will be there and which Mr. Deo alluded at, it's more to participate any mid short-term demand spikes or supply chain disruptions.
So sir, that means the 50% gross margin that we reported. So that means these are sustained right, unless there is some disruptions globally?
If there is no disruption, I think it's okay.
Okay. Because earlier you have alluded to the factor because now realizations have gone up. So percentage margins may not touch 50%, so that was the understanding, but still you have achieved that in this quarter...
Just to clarify, it's a turn -- basically, what we are giving a guidance is that when in a high cost regime, what you're more looking at is whether your costs are getting covered. That's what we should look at. We are not supposed to look at 40% margin, 50% margin because -- and per kg realization -- per kg is what we look at what is the value back to the system. That's what we are interested. We are not interested in the percentage. So just to illustrate, if 100 goes to 200, and we have a 40% margin, 40%, you are only -- 40 on 100 is 40% and 40 on 200% is 20%. So what we are looking at is maintaining that 40 per kg, that's very important. And that's what we have been doing. And depending on how the market offers, we get that corrections.
Okay. So even on, sir, per kg basis, I think I see that [indiscernible] because if I see per kg, I think in Q4, you have hit it on EBITDA level, I think, INR 70. So just wanted to understand is this sustainable going forward next 1 to 2 years?
It's difficult to predict in this uncertain environment because there are so many challenges, et cetera. So I mean it would be very nice if one can predict a clear thing. But I think it's too premature or I think it's not appropriate to even give a long-term call on that.
Right. And sir, lastly, what is the utilization level currently?
More than 70%. I think may be nearing 75%.
Our next question comes from the line of Bhargav Buddhadev with Kotak.
Congratulations for a good set of performance. Sir, recently, DGTR has recommended antidumping duty on export of 3 products, whether it is TDQ, PVI and CBS originating from China, even Russia. Any comments on this whether this can go through in terms of approvals from the central government?
We have made our presentation for the central government. We are awaiting the decisions. So it's -- we cannot predict because if you see the last 1.5 years, there have been far too many reductions. So that's given the -- we'd like to keep our fingers crossed.
And would it be fair to say that these 3 products would account to about 25% of NOCIL's revenues?
It depends on situation, but I think it's a significant revenue, but not extremely very high, a significant revenue.
Okay. And lastly, sir, what we understand is the prices of aniline have started correcting since the last couple of months on MIBK as well. Do you see this trend sustaining? Or do you think this is just an aberration?
I think it's very difficult to comment on this situation, whether it's going to be stable or this is an aberration because if you really see the oil prices are volatile, the oil supplies are volatile. So I think it's a difficult situation to say whether these prices will remain stable or they will go up or go down.
And lastly, given that Mr. Anand has come from BASF, would this objective be also to sort of improve the mix or possibly do some diversification or will continue with our core offerings?
No, I think -- his designation is Deputy Managing Director. So basically, he will look at the overall business and the overall business objectives. Okay. And whatever are the objectives set for him, he will carry forward those.
Our next question comes from the line of Aditya Khetan with SMIFS Limited.
Sir, my first question is on the raw material price front. So has the complete raw material price rise has been passed on in this quarter? Or can we expect some more price hikes going right to compensate the increasing raw material prices?
Aditya, I think what we have indicated to you for the whole year, we have managed to pass on the cost increases in the form of appropriate price corrections. So that's true. Going forward, what will happen and what is likely to happen, I think that's too long call to take. As we go along, as we announced in Q1, we will be in a better position to take a call. And -- the point is so long that the cost increase is there, we are trying to push for a price increase. And it also depends on how the competitors are also reacting to the same. So it's a situation of what you are experiencing and what the market is offering. So it's a combination of both. So as far as Q3, Q4, I think everything has been passed on.
Okay. Okay. Sir, second question, sir, the volume growth has been -- has almost been flattish for this quarter, and there was a dip of 9% on Y-o-Y basis. So the newer capacity hasn't been able to ramp up in this quarter? Or what could be the reason here? For this quarter specifically?
I think beginning of this quarter, we had this Omicron COVID variant. So there were logistics issues and the COVID issue. So therefore, there were some disruptions thereabout. What we could -- if you have heard the call, Mr. Deo alluded that the domestic market grew marginally. Unfortunately, in the export market, we couldn't -- we had to regroup because of the logistic issues.
Okay. So sir, on a quarterly basis, if the volumes are flat, so the 19% growth in revenue was led by the realization growth only. So has there been a good change in the product mix like -- so previously, like we were having roughly around 25% of the value-added product portfolio. So has that gone up in this quarter because there has been a sharp jump in realization, considering on the value-added product side that might have gone up?
Yes, I think we -- in the first question asked, we specifically addressed the point that during this quarter, we had -- the high-value products -- their proportion to the overall sales must be as much higher as compared to overall weighted average selling prices. And that's where the overall realization went up. It's a product mix, combination of product mix, some improvement in specialty chemicals, not significant, but there it had also a role to play.
Okay. Okay. So considering the specialty -- so the value-added product mix might have gone up. So we can consider so roughly around 45% to 50% gross margins would be sustainable considering the value-added portfolio has gone up and specialty could be much lower as of now?
We have always been communicating that the specialty applications product revenue is about 25% of the overall revenue. And we still feel that we are around the similar range for the quarter. As far as the valuation percentage, we would not like to comment on that because it's not appropriate to get into that particular because of the challenges what we are seeing today and the way market has evolved over the last 2 years.
Okay. Sir, just one last question from my side. Sir, on the debottlenecking of capacity. So what would be the CapEx figure, if you can share that?
I think those CapEx are pretty marginal, even though we -- I can't give us a number to it, but they are not really high.
Okay. So roughly around INR 20 crores, INR 30 crores, can we assume like so the maintenance CapEx only that we can allude to the...
I think -- forget about assumption. We would not like to share those details, please.
Our next question comes from the line of Utsav Mehta with Edelweiss AMC.
Sir, you may have answered this earlier, but I may have missed it. This quarter, I've noticed that the EBITDA per tonne is almost -- EBITDA per kg is almost INR 800. Just wanted to understand, and we've obviously got some benefit of older inventory. So what -- just wanted to understand where this number will settle at? Would I -- should I be looking at the full year number of approximately INR 500, INR 550 going ahead? Or will INR 800 be the new norm?
Gentleman, I don't know which is your reference worksheet or to which you're saying INR 800 per kg, I wish -- per tonne, is it INR 800 per kg or tonne?
Kg.
Kg. No, I think none of our price realization is INR 800 per kg lever over EBITDA. I think somewhere, some miscommunication there. Please rectify your file numbers.
Okay. So sir, let me rephrase that then. We've done INR 111 crores of EBITDA on 136 million millimetric tonnes from the volume, correct? So Will this, whatever this number be sustainable going ahead? Or should I be looking into full year numbers?
Gentleman, that is index form, 136 is index form. You're converting it into some tonnes or kg. I don't know how.
Okay. Okay. My apologies, sir. My mistake.
Our next question comes from the line of Prakash Kapadia with Anived Portfolio Managers.
Yes, I have 2 questions. If I look at the annual cash flow, despite a bad growth of 99% in FY '22, operating cash flows actually decreased from INR 94 crores to INR 29 crores. And we've seen inventory, which is more than double, receivables are up. So if you could give us some sense how much of this is to price increase? Is it some change in working capital in terms of domestic or export side of the business? And when do we see operating cash flow growing in line with the profitability growth.
Gentleman, when a business's like the level of activity increases, obviously, the working capital requirement goes -- grows in proportion to the level of activity. As far as the number of days operating cycle for working capital, as far as NOCIL is concerned, it still continues to remain similar to what was prevailing last year in number of days cycle. But however the input cost parameters have increased, the pricing parameters have increased, therefore, the working capital deployment is much higher.
And you have an inflationary trend, when your input cost goes up by 100%, what can we do? You are supposed to keep that for stock, so that the value of the stock goes up, maybe not in the volume terms. Obviously, we had some inventory buildup, as Mr. Deo explained about the production rate going up by 34%. That's the reason that -- that is an additional inventory, which is a conscious call, which the company has taken.
So you're saying this is more because of the input side, not really in terms of business mix or some pent-up demand, which we intend to fulfill or some supply chain disruption, which we feel could happen. I was just trying to understand, obviously, with the increase, it would increase as we've grown our sales also, but the increase [indiscernible]. So I was just trying to understand the qualitative flavor on the...
Okay. On the debtors, the number of days continues to remain the same. The value has changed because if you're looking at last year INR 924 crores (sic) [ INR 925 ] crores and to this year 1,571 crores, the debtors will obviously increase. As far as inventory is concerned, in so far as raw materials are concerned, depends on the bookings, and we have seen the bookings have more or less remained similar, except the value of the booking has gone up. As far as finished goods is concerned, we have consciously built up the inventory, which is early visible in the financial results that it is INR 88 crores or INR 89 crores build up inventories there.
And you just mentioned we've seen capacity utilization improved. So I think 75% was the number, which you just highlighted, right, from 70% last year?
70%, 75% -- somewhere between 70% and 75%. I don't have the exact number, but 70% and 75%.
Our next question comes from the line of Saurabh with AMSEC.
Sir, my first question is on exports. So if you can give more color in terms of the geography where we are seeing the growth coming in? And also, if you can share the geography-wise mix or the top 2 or 3 geography avenues still exports the largest quantity?
Sir, we export to 3 regions, basically Asia, Europe and Americas. And Americas, we have expanded from an index level of 100 to 300 in the last 3 years. .
Okay. So in Asia, would it be -- should assume that the growth will be muted, while Europe and Americas would have grown largely? Because if you see the China Sunsine commented -- their comment is they are in the market share in Asia, while in Europe and Americas, they are not able to do that. So probably -- mostly you would have benefited out of that?
If you recollect all our investor calls, what we've been communicating in the last 2 years, we have been communicating with the basic fact that most of the customers with whom we are in discussions are indicating that they want NOCIL to be a global player instead of a regional player. So to that extent, additional businesses are coming. We are seeing additional business coming to us from Europe and America in the last 2 years.
And therefore, the Asian market share has come down from quarters [indiscernible].
Okay. Sir, my second question is on our guidance of full utilization by September '23. So that means we should grow at least 12% to 13% volume over next 2 to 3 years. So given the domestic market will go at 7% to 9% higher market, so should we assume that NOCIL will capture more market share or the growth will largely come from the export -- maybe 20% kind of growth from exports?
See opportunity wherever it arises, we will encash that. That's the key part. Obviously, we are prepared for export revenue basket share going up from 36% to 40% in overall scheme of things, on the expanded volumes basically.
Okay. And sir, you mentioned the logistic cost impacted the export volume in Q4. So how is the situation right now? So has it normalized or still we are facing some challenges?
They are -- there is continuous challenges, challenging environment. I don't think it has improved that way, but we are trying our best to mitigate to the best possible extent. And availability is an issue of the containers and shipping vessels on time. That's the key thing.
Okay. And sir, lastly, on the realization. So Q4, we have seen a good jump in realization. But have the prices started softening in Q1 given some softness in our raw material [ batch ]?
We would not like to comment on that.
Next question comes from the line of Pavan Kumar with RatnaTraya Capital.
Sir, I just wanted to understand most of your contracts with your customers, are they on a half-yearly basis or yearly basis? And how frequently can these price hikes be taken?
It's on a quarterly basis.
Our next question comes from the line of [ Deep Master ] with One-Up Financial Consultants.
I just wanted to get some sense on your expectations for volume in the coming year. We've seen that the export mix has improved. So clearly, your export volumes are picking up. And like you mentioned earlier, there was some impact of offtake on due to a sort of Omicron at the beginning of the quarter? And also you have sort of started drawing up plans for debottlenecking. So that gives me a hint that maybe you are expecting volumes to pick up quite nicely this coming year. So I just wanted to get some sense from you on when we can start to see those step jump increases in volume that we've been expecting?
Our guidance remains the same. So we are working towards that. That's number one. And September '23, which is what we said, we would like to use -- achieve 100% utilization, and we are still working on the path towards that.
Okay. And just another question, if I can try my luck. I just wanted to get some sense from you on -- we've seen a great performance from you on the EBITDA side. Again, a step jump on EBITDA versus the run rate that we've seen in the previous quarters of FY '22. Any sense you can give us on how much of this is sustainable because our mix has improved? So if sort of prices remain stable and we continue to kind of maintain the profitability that we aspire to maintain on a per kg basis, how much of this EBITDA can sustain? Like is it maybe 70%, 75% of the EBITDA we've seen? Is that sustainable?
See, gentleman, I think we have already given a message that the future is a little difficult to predict. The way -- in the short term, the way things are operating because of the various challenges, which is being experienced at the, say, Europe, China and other parts of the world. So I mean one cannot put a number, specific number to give you guidance. Although we aspire to grow further because our dream is to achieve 100% utilization at September '23. So if we are able to fulfill actually that dream, I think everything falls in place.
No. So what I meant was we have INR 111 crores of EBITDA for the quarter. I was just trying to get a sense of on a quarterly basis, how much of this is sort of sustainable if our volumes sustain, if prices remain stable. In fact, if you take off the sort of benefit of some price pass-through that we would have seen on low-cost inventory, so how much would be sort of sustainable on a sustainable basis if our spreads are sort of maintained?
See, I think we would like to give this clarification more at the end of Q1 results because today is still an uncertain environment. So it's too much on our part to comment on that.
Our next question comes from the line of Nitesh Dhoot with Prabhudas Lilladher.
Congratulations for a good set of numbers. So my first question is how do we see the demand environment in India and particularly now the key markets globally for FY '23? I mean in the context that one of our Chinese [indiscernible]...
Gentleman, I am sorry to interrupt you, we are not able to hear you properly, please.
Sir, is it any better?
Okay, somewhat better.
Okay. So sir, what I was asking is how do we see the demand environment in India and in our other key markets, in light of the commentary of China Sunsine, who indicated that they'll be able to increase volumes despite the slower demand in China on account of multiple factors, like repeated lockdowns, et cetera. So I mean, can that imply some bit of increase in competitive intensity and margin compression in markets of China? So I mean, your thoughts on the same.
We would not like to address the near-term challenges right now because there are -- it's too fluid a situation. But what we are looking at as a medium term to long term. We still see a lot of opportunities for us to grow. And there are enough opportunities, which we are seeing in the horizon that will come on our site, and we hope to encash the same.
Sure. Okay. So my next question is on NOCIL's average realization. If I just compare that with China Sunsine's blended realization [indiscernible] insoluble sulfur. What I see is NOCIL is 20%, 25% higher than China Sunsine historically. So what would be the reason for the same? If you could just help me understand, is it largely product mix? Or is there any other reason for the same?
There are 2 things. When you are comparing a China Sunsine realization vis-à-vis NOCIL. Yes, NOCIL has the specialty application product, which is constituting 25% of the revenue. So obviously, that has a different value realization as compared to the conventional things. So therefore, the weighted average undergo the change. Secondly, in NOCIL, about 65% of the business is done domestically, which is having a duty layer of, say, 7.5% plus other 7% to 10%. So the blended realization per kg vis-a-vis China Sunsine should be on a higher side. We don't know what is the extent, which number you are referring to, which number you are referring for NOCIL. We cannot comment on that. But what we can say, generally, we should be on the higher side.
Sure. That's helpful, sir. And just one last, if I may. You explained on the working capital side on inventory and receivable days. If I can just ask you about the payable days, which were lower for FY '22, something around 50 days versus 57 days year-on-year. So if you could just give some comment that.
I think we need to get into that. I think I don't know the exact working. But I don't think some payables are changed drastically. Yes, maybe the sourcing point may have undergone a change, and therefore, the payment terms may be a little tighter as compared to the original one. So that -- it's a combination of various sourcing. So we'll look into that and get back to you in case there is any deviation. But I don't think that there's a major deviation.
Our next question comes from the line of Anubhav with [ Macro Research ].
A couple of questions. One is, sir, on the capacity front. If I understand well, so the spare capacity we have is of the order of 30,000 tonnes, right? And in light of that want to understand the rationale for debottlenecking, is it for specific grades of products?
Basically, this debottlenecking is being done for certain products. It's not across the range. So as we see the growth of certain products, we want to be ahead of the market so that we should be consistently supplying the product as the demand grows.
And secondly, on the volume growth front, I mean, though you have kind of answered that you are maintaining the guidance as September '23 is concerned. I wanted to understand if you have -- if you can provide any visibility on the step-up in volume growth. Is it probably -- is it more a visibility on the clients' validation, which is a little uncertain at this time? How do you see?
I think as we have been consistently saying that with the current uncertainty in the marketplace, it's very difficult to give certain guidance on volume growth. But as we have been emphasizing from last 2 years and what we have seen in the results that our emphasis is always on volume growth. And as we have been saying that we are pretty confident that by '23 September, we should have 90%, 95% capacity utilization.
Okay. Okay. And sir, last question is on the raw material sourcing and particularly for aniline. If you could specify what is the supply mix we are having, I mean, which countries we are sourcing and how we are managing the risk on that, sir?
I think I have made it very clear that what we have done in the last 2 years is to ensure the supply security, 2 things we have done. First thing is more buying from the domestic market so that it gives a boost to the domestic market. And second thing is we have scattered the sourcing, not only aniline, for many of the products to ensure -- to reduce the risk of sourcing only from China.
Okay. And particularly for aniline, what is the dependence on, say, China or Asia?
No, I think aniline also we get from different sources. But again, we are dependent on the domestic source.
Our next question comes from the line of [ Sandeep Dev ], an investor.
Congratulations on very good set of numbers. Sir, you had mentioned that you took a price hike in the Jan to March quarter, which resulted in higher realization. I just wanted to know for the April to June quarter, have the prices again been hiked? Or they are more or less the same as the Jan to March quarter?
I think we will not be able to comment on this because as we have been saying from last one hour that this situation is very, very volatile in terms of raw material, raw material availability, pricing. So we will not be able to comment on this.
Okay. Secondly, as you mentioned that the capacity utilization is between 70% and 75%, and you are targeting close to 100% by September '23, which is 18 months away from the March quarter. So that would translate into an annualized volume growth of about 20%. I understand that markets are volatile and things can be different, but does it mean that you are targeting 20% kind of volume growth when you're looking at close to 100% utilization by September '23?
Gentleman, if we are able to achieve 100% by September '23 of that, it is automatic and it's a backward calculation. Its a [indiscernible] to grow up to 100% or 95% plus in September '23. So obviously, this is a resultant number. So what we are looking is the final destination where we want to be. And that plan we have already mentioned. And this -- it may be fluctuate quarter-by-quarter due to the uncertainties. But yes, we have a goal that we would like to achieve that and stand by that.
Our next question comes from the line of Amar Mourya with AlfAccurate Advisors.
Our next question comes from the line of [ Rushabh Shah ] with RS Capital.
Sir, you mentioned that on the antidumping duty, you're expecting some approvals. So when can we expect any outcome from that?
Gentleman, we never said -- we said it is in the process. We are not sure whether we'll get approval. It will be notified or not, we are not sure. We have given our representation to the central government. It is up to them to take the judgment.
Okay. And the second thing that this year, we have -- the value growth has been significant. So going forward, maybe 1, 1.5 years down the line, if prices normalize, how much of the value growth will be able to capture? And how much you'll have to pass on? If you could give color on that.
Gentleman, I ask you a counterquestion. Can you predict oil prices? None of us can get predict oil prices. So I think it's too much -- there are too many uncertainties and challenges. As we go along, we will give you the guidance. But today, it's a fluid situation. I think we have been -- we said in the previous questions that we would like to give more clarity somewhere at the end of Q1 call.
Okay. And the consolidated numbers, the other expenses are INR 100 crores. How much of that is fixed in nature? if you have any breakup in that.
Right now, we don't have right now with me, but it's a sizable amount. I think once the annual report comes, probably, we will be in a better position to judge then, maybe in a month's time we'll have annual report.
Our next question comes from the line of Arpit Shah with Stallion Asset.
Congratulation on good set of numbers. I just wanted an idea the antidumping duty, which has been done by U.S. on Chinese imports. So what is the situation there? What kind of demand we plan to foresee on that?
Gentleman, I did not -- we did not follow your question, please.
Am I audible?
Yes, tell me.
Yes. There's 1 antidumping -- yes, there's 1 antidumping duty, which has been imposed by U.S. on Chinese imports of rubber chemicals. So I just wanted to know what kind of situation -- what kind of demand NOCIL can fulfill or NOCIL is present there to take over some of these demand?
I think we just answered to this question some time back. On an index level of 100, we have already moved to 300 in the U.S. market. But you rightly said, we presented an opportunity, we have participated in that, and we intend to grow further and consolidate our position there.
So what is the volume market over there, in U.S.?
We don't have specific numbers, but in rubber consumption, they are about 9% of the [indiscernible], I guess.
9% of consumption globally?
[indiscernible], but large part of the U.S. is supplied by Europe.
Okay. Okay. And what share China would have in that [ import ]? Any idea on that?
We don't have any idea on that because we don't have any data on the same with us.
And U.S., as a percentage of exports for us would be standing at what percentage?
That's a business sensitive issue. We would not like to disclose that.
Thank you. Ladies and gentlemen, due to time constraint, that was the last question for the day. I would now like to hand over the conference to Mr. S. R. Deo, Managing Director, for closing comments.
Thank you. I take this opportunity to thank everyone for joining the call. I hope we have been able to address all your queries. For any further information, kindly contact NOCIL or Strategic Growth Adviser or Investor Relationship Adviser. We request all of you to be safe under the given circumstances. Thank you very much.
Thank you. On behalf of NOCIL Limited, that concludes this conference. Thank you for joining us, and now you may disconnect your lines.