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Solar Industries India Ltd
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Ladies and gentlemen, good day, and welcome to the Solar Industries India Limited Q1 FY '23 Earnings Conference Call hosted by Nirmal Bang Equities Private Limited. [Operator Instructions]. Please note that this conference is being recorded.
I now hand the conference over to Mr. Prasheel Gandhi from Nirmal Bang Equities. Thank you, and over to you, sir.
Thank you, Ranbir, and good morning to all participants. Nirmal Bang Equities welcome you to 1Q FY '23 earnings conference call for Solar Industries India Limited. From the management, we have Mr. Manish Nuwal, CEO and MD; Mr. Suresh Menon, Executive Director; Mr. Moneesh Agarwal, joint CFO; and Ms. Shalinee Manana, joint CFO.
I now hand over the con call to management for opening remarks. Post which, we can take questions from participant. Thank you, and over to you, sir.
Thank you so much, Prasheel. A very good morning, everyone, and welcome to this fiscal first quarter review conference, my name is Aanchal, and I would like to welcome all of you on behalf of Solar Industries India Limited.
On the onset, let me restate, we might make projections or other forward-looking statements regarding future events and about future financial performance in this call. Please remember that such statements are only projections. Actual events or results may differ materially. Our website will be updated with all the relevant information from time to time.
Now I will request MD and CEO, Mr. Manish Nuwal for his opening remarks on company's performance for this quarter. Over to you, sir.
Good morning, everyone. In this challenging environment, where businesses were impacted due to supply chain disruptions amidst Russia and Ukraine conflict and currency volatility, we achieved highest ever quarterly revenue of INR 1,616 crores, a growth of 96% year-on-year. And our net profit is INR 183 crores, a growth of 81% year-on-year.
And our net profit is INR 183 crores, a growth of 81% year-on-year. It demonstrates the real strength of our company. During this quarter, significant increase in revenue was contributed by international businesses and non-CIL India and institutional sectors, which showed a growth of 90% and 180%, respectively. These numbers are the true reflection of our efforts put over the years to nurture overseas business and expand based in non-CIL India Limited customers. Revenue from Defense stands at INR 64 crores, up by 37% year-on-year basis and is likely to start gaining momentum from next quarter.
Our EBITDA margins during the quarter got contracted due to elevated raw material prices and lower realization from one of our key coal customers. The company has taken a strategic decision to invest in North India-based explosive manufacturing company after taking different investments in Skyroot and Zmotion to increase the product portfolio for various high-end applications and increase its geographical footprint to continuously move towards [Foreign Language].
Going forward, high inflation and consequential policy rate tightening measures can impact global demand. However, government trust on building housing and infra, rising coal demand and Atmanirbhar Bharat promoting towards indigenization of defense products will definitely help us to achieve the annual growth guidance which we have given earlier.
Now I will request Aanchal for a quick update on quarterly numbers.
Thank you so much, sir. I guess we are purposely following our motto [Foreign Language]. We are again back with yet another highest quarterly revenue and profits. It gives me immense pleasure in sharing our success journey back to back with our shareholders and potential investors.
We were notable for quarter 1, registering revenues of INR 1,616 crores, up by 96% year-on-year; EBITDA at INR 292 crores, up by 66%; PAT at INR 183 crores, up by 81% year-on-year, demonstrating the strength of our business in a challenging environment as elaborated by our MD.
Now let quickly review the quarter in detail. Explosives. The domestic volume in the quarter increased by 13% our realization for explosives showed a growth of 74%. As such, explosive revenue was up by massive 97% from INR 419 crores to INR 824 crores. Revenue from Initiating System was also up by 20%.
Revenue from our customers. Revenue from CI was up by 76%. Revenue from non-CIL and Institution was up by massive 181%. Revenue from Housing & Infra was up by 83%. Export and Overseas revenue grew by 90%. Defense revenue was up by 37% year-on-year.
Coming to our cost. Raw materials. Consumption cost increased by massive 127% in absolute terms from INR 469 crores to INR 1,067 crores. Employee cost was increased by 11% from INR 68 crores to INR 75 crores. Other expenses cost has increased by 69% from INR 113 crores to INR 191 crores. The EBITDA margin for the quarter for contraction has been updated by our MD. But in absolute terms, the same grew by 66% from INR 176 crores to INR 292 crores. The interest cost has gone up by 39% in absolute terms from approx INR 10 crores to INR 14 crores. Depreciation has increased from INR 25 crores to INR 31 crores on account of CapEx in the previous year.
The profit before tax stands at INR 247 crores compared to INR 140 crores with a growth of 76% year-on-year. The net profit in absolute terms is up by 81% from INR 101 crore to INR 183 crores approx.
Now we would be happy to take any questions, comments or suggestions that you may have. Over to you, Prasheel. Thank you.
[Operator Instructions] The first question is from the line of Ravi Naredi from Naredi Investments.
Definitely, in this tough time, when geopolitical issues are there, our company really grew in your leadership. First of all, thanks to Moneesh. [Foreign Language]. Sir, out of INR 3,843 crores order book, how can you bifurcate between Defense and non-Defense, sir?
Yes. Clearly, we will give you the breakdown. Currently, the same portfolio is INR 538 crores and rest all in non-Defense.
Rest is non-Defense. And sir, how much raw materials down in quarter 1 in July and how much time lag we need to transfer to consumers?
So definitely, the prices of our key raw material has already started softening. But we have seen lots of ups and down last 1 year. So it is very difficult to give practically and look at what will happen in the Q2. But definitely, if you look at fall in prices of other raw materials, the same thing should come for our raw material as well. And based on that, definitely cost of raw material will go down and realization should go better.
Okay. But my question is how much time lag we need to pass on the price down or up to consumer?
Based on a constant price, definitely, we should get an increase or decrease within the quarter. But this trend is continuously increasing that definitely that like always keep remain, but now if we sense that prices have started softening and should consolidate at these levels, so definitely the lag should finish in next 1 quarter.
Okay. And sir, last question is if special regulation could not pass, how you deal with that situation now?
Special regulation has not been passed. That is already available in a public domain. And we will definitely take care of the impact of being into our businesses as situation goes on.
Next question is from the line of Aniket Mittal from SBI Mutual Funds.
Yes. Sir, two questions on my side. Firstly, just to understand on the gross margins, they dipped pretty sharply. But what component of these gross margins would we see is yet to be passed on in terms of higher prices?
Can you just come back to the question?
So if I look at the gross margin, it's come down to around 34%. So just trying to understand what percentage of this is the impact coming on margins because they've not yet been passed on to the customer?
It's around 2% to 3%, which is still yet to be passed on to the customers.
Right. The other question I had is more on the overseas business. We've seen a very good growth coming in for this quarter. So if you could highlight in terms of what is the traction that you're seeing across geographies, particularly in some of the new geographies that you've ventured such as Tanzania and Ghana, sir.
So as regards overseas efforts which the company has been taking since years, has started reflecting in the numbers. During the 2 years of COVID, the numbers were not reflected. Now all the subsidiaries where we are they are performing well.
In general, what would be the volume growth for your overseas business for this quarter?
Around 15% to 18%.
Next question is from the line of Deepanshu Jain from Hem Securities Limited.
Congratulations for a great set of numbers. My first question is, can you give CapEx guidance for FY '23?
CapEx numbers?
Yes.
We planning the CapEx around INR 400 to INR 450 crore in the current year.
And can you please bifurcate this CapEx guidance into different segments?
When you said in these segment, the overall CapEx for the group as a whole.
Okay. And this number is INR 200 crores to INR 250 crores, right?
It's INR 400 crores to INR 450 crores.
Okay. Okay. Okay. And this is for the whole year FY '23?
Yes.
Okay. And my second question is, this year, revenue has grown by 23% Q-on-Q and 96% Y-o-Y. And PAT has been increased by only 5%. So can you throw some light on this, that why PAT has increased only by 5% as compared to revenue?
PAT on the year as a whole has increased by 81% on year-on-year basis.
Yes, ma'am, I'm talking about Q-on-Q. Q-on-Q it has increased by 5% only.
Yes. Q-on-Q, there were 2, 3 factors which have affected that. Last quarter, we had a ForEx gain of around INR 16 crores. And in this quarter, we have a loss of around INR 28 crores. So one was that.
And secondly, the increase in raw materials pricing, as there's always a lag in passing on the prices. So due to these 2 reasons, the same has been affected. The PBT has been affected.
And the third reason is that we had some PAT benefits in last quarter in one of our subsidiaries. So as a result, the PAT in this quarter increased only by 5%.
Okay. Okay. Ma'am, can you repeat that ForEx gain INR 80 crores and ForEx loss INR 28 crores, right?
INR 16 crores was in quarter 4. And in the current quarter, we have a loss of around INR 28 crores. That is the unrealized loss.
Okay. Okay. INR 16 crore, right? 16, 1-6?
1-6. Correct.
[Operator Instructions]. Next question is from the line of Abhijit Mitra from ICICI Securities.
Congrats on a great set of numbers, especially on the overseas side. So on the overseas, can you list out what is the factors which you see playing out over the course of next 1 to 2 years or next 1 year in particular in terms of volumes, which are the newer geographies, which will contribute incrementally, have any new geographies started contributing to volumes this quarter?
And second question which I had is that now the raw material prices have dropped very sharply and probably the impact will be visible in the next couple of quarters, will the -- what will be the normalized overseas margins be when the dust settled in terms of softening raw material prices? Is it safe to assume that will be back to 20%, 21% level? That's all from my side.
Thank you, Abhijit. The first point is that the growth in our overseas business is mainly on account of volume growth, which Shalinee has already shared. That it is around 15% to 18%.
Second reason of growth is that wherever we have invested in last couple of years, has started giving the returns of our investments.
Third, in this quarter, we have not added any new country. But definitely, in the next coming quarters, we will add -- we will finish the plant in Australia. That will start commercial production from the Q3. And we are also likely to start our Indonesia plant from Q3. So those territories will definitely add or help us to increase our revenue further.
As far as your question on falling of raw material prices. So like we have already said that we have assumed some increase in the last couple of quarters, and we are expecting that these prices should soften in the coming quarters.
So based on that, we have given a guidance that we should be able to achieve a target of 30% growth in our revenue. So definitely, 1 half year numbers are over, we will come out with another positive set of guidance for the whole year. And I believe this commodity prices should soften a bit, and that should help the demand to increase, and that will also help us to sustain the current businesses.
Right. A bit of thought on the margins because on the domestic margins, while the absolute percentages might have declined, but on a per tonne level, we see a steady -- relatively steady performance. So I was also thinking on the overseas side, when the dust settles in terms of dropping raw material prices, is it fair to assume that, that 20%, 21%, 22% range of margins in the overseas business will be brought back? That will be the...
In the current quarter, our EBITDA margin is around 18.03% -- 18.05%. And if you remove the factor or the impact of currency loss, then it definitely adds up to almost 1.5% to the bottom line. And if you factor in that, it is already at 19.5%. So definitely, we believe that once prices starts softening, the EBITDA margin should come to the normal range of around 20%, 21%, 22%.
Thank you. Next question is from the line of Aniket Mittal from SBI Mutual Funds.
Just to understand a bit more on the Australian, Indonesia expansion that you're doing. I think you're setting up cartilage and detonator facilities over there. If you could maybe throw some light in terms of capacities that you're building there? And what is the kind of revenue potential that you see from these 2 geographies over the next 5 years?
At the moment, we can share some facts that we are setting up a bulk plant in Australia. And in Indonesia, we have already started detonator manufacturing and initiating system section and likely to finish another sets of products in coming quarters.
As far as start of these 2 ventures are concerned in next 1 or 2 quarters, we will start the commercial production. And as far as future potential of next 3 to 5 years concerned, it is too early to state anything on that side. So we will definitely keep sharing on the progress on these ventures, and we will share the progress report or our prediction or projection out of these ventures.
Sure. The other question was actually a bit more on the coal side. So if I look domestically, I think what's happening is we're seeing a large amount of increase in production coming in not just from the likes of Coal India and SCCL, but a lot of these capital and commercial coal blocks are also coming through. If you look at the data, I think some of these mines have overtaken SCCL as well. So when you look at that piece of the segment, is there any sort of increased demand that you see coming for your explosives from some of the captives and commercial coal blocks?
Yes, sir. I think the coal production in this year is posed for an increased growth coming from the government sectors like Coal India, Singareni and also from the private sector. We have seen the first quarter the private sectors have done and have grown well as far as coal production is concerned. So going forward, I think the demand from this coal sector will be increasing for the year. And it poses well for us from the explosive side.
Are there any sort of tenders that you're seeing from many of these captive and commercial coal works coming in for your explosives?
In this year, we don't see. Probably in the next year, we will see coming in. And the private sectors, they come in on and off as the period for the tendering comes up.
Okay. Just one question on the Defense front, I think on the Pinaka Mark-1 and as far as the tests that have done, I think, earlier this year. If you could just highlight in terms of tests that have been done in the RFPs on that front, how do you look at coming out for Pinaka Mark-1?
Pinaka tests are in the final legs. So once that test of all the products are over, we'll come up with further details.
Next question is from the line of Chirag Muchhala from Centrum Broking. Mr. Chirag your line is unmuted. Please go ahead with the question.
Hello.
Yes, please go ahead.
Yes. So sir, I was asking that you made a comment that the ammonium and the ammonium nitrate prices have started to soften in the month of July. So is it possible by how much percentage the prices have declined?
So in the quarter 1, the prices had actually increased from the previous quarter by almost 10%, 11%. And in the Q2, we are expecting that it should go down by 10% to 15%.
Okay. Okay, sir. Second question is on the RECL acquisition. So I mean, sir, have we taken over the full company or have we taken a minority stake in that company?
No, we have taken a strategic decision to invest in this company and the final due diligence will shoot over in another couple of months, and then we will announce the fine details of the deal.
Okay. So sir, is it possible to share any license capacity or the revenue that this form is doing or the likely transaction revenue?
We will share all these details once the deal is completed.
Next question is from the line of Rohan Gupta from Edelweiss.
Congratulations on such a strong set of number in such a challenging environment. Congrats to entire team. Sir, a couple of questions from my side. One is on this softening raw material prices. So we have seen that definitely, on a Y-on-Y basis, AM prices have been constantly going up. And even in Q1 also, it has gone up from Q4, as you mentioned, roughly 10%. But despite this sharp rise in prices, input prices, we have been broadly maintaining our EBITDA margins in terms of percentage.
Still we are at close to 18% to 19%, if adjust for the ForEx, you are close to 20%. Just wanted to understand, sir, when the raw material prices will start softening and if they go back to the previous level, so do you see that our margin profile will remain same at 20% kind of margins? Or you see that it is going to stabilize at a much higher margins of 25% or 27% range?
Because right now, whatever the price increase which we have seen, we have seen that is also going -- or is helping us in EBITDA growth also in line with the top line growth. So just wanted to understand that the scenario when the raw material prices will start softening.
Yes. As you said, and Manishji even said like next quarter, around 10% to 15% softening should be there in raw material prices. So once there is a stability in the prices, we see the margin sustain at around 20% to 22%.
Okay. So it means that with the falling raw material prices and sustaining margins and 20% to 22%, probably we may see a flattish kind of EBITDA growth despite volume-led growth because it seemed that our EBITDA per tonne has improved significantly in the entire rising price scenario, isn't it?
Rohan, we will answer to this question in the same fashion what we did. But based on our guidance, we maintain that we are expecting 22%, 20% EBITDA margin for this year. And that is also depends on the prior commodity prices. So at the current elevated raw material prices, we expect that 18%, 19% is a sustainable margin level.
And going forward, like everybody is expecting that there will be a softening of commodity prices due to various factors, either it is recession or some other factors. So we also are expecting that prices should start softening. Based on that, we are saying that we expect 20%, 22% is the reasonable margin. Whether you convert it in the value terms or percent, that's -- we cannot answer to that.
Fine. Sir, second question is on you mentioned that our Indonesia facility where we are planning to put in detonator facilities and some other value-added product baskets. So I understand, so far now, these products we were manufacturing in India and were primarily supplied in India and also probably being exported from India itself.
So any particular reason that we are setting the facilities -- setting of the facilities for these value-added products in Asia? Are there any cost advantage? Or any other particular reason that this Indonesia is a market we have chosen for those value added rather than India, for ramping up the production facilities in all this value-added product market?
So like we have already shared in previous investor calls that we are entering into that market with some reasons. First reason is to when you are present in a particular country, definitely, your reach to the customer is always better instead of supplying from India to Indonesia. So based on that, we have decided to invest in that country.
Second is that once we are there, definitely supply chain-related hurdles, which has started coming in the last couple of years. Every country wants to have the manufacturing base in a particular country. Indonesia is a big market. Looking at that potential we have decided to set up the manufacturing base in Indonesia.
Okay. And sir, in our international markets operations, so definitely this year focus will be on Indonesian, Australia and ramping up the facilities, are we in the process of identifying any other geography over next 1 year or 2 year in the near term for further expansion or focus will continue to remain on existing geographies only?
No. At the moment, our focus is to increase revenues from our existing facility. And once these are over, then definitely, we will look for the new geographies.
Right, sir. And just last bit on Defense. We are seeing close to INR 40 crores kind of revenue coming from the Defense in the current quarter. Just wanted to understand, sir, we have this multimode hand grenade revenues already in place. So do you see that -- is there any seasonality because that kind of order of INR 450 crores to INR 500 crores for community for the next 2 years, so will it come on a quarterly basis? Or you see that there is lumpiness in some quarter garnering more revenues and some quarter being impacted as far as this business is concerned, in Defense?
We have given a guidance of reaching or crossing INR 400 crores in this financial year. And in this quarter, we have already done INR 64 crores, which is up by 37%. And we have already mentioned that from next quarter, there will be more momentum in sales of Defense products. So in products like which goes for the defense application is not the season which impact the demand and supply. There are various other factors related to supply chain, product chain qualification. So there are n numbers of factors that impact some ups and down.
So based on that, we are saying that from next quarter, there will be more momentum towards sales of Defense products. And we are confident that in the whole year, we should be able to reach to our target of INR 400 crores from Defense sales products.
[Operator Instructions] The next question is from the line of Pratik Mukasdar from RNL Investments.
Manish, congratulations on a fantastic set of numbers to you and the team. Sorry, is your initial address of first 5, 10 minutes. So I would just request you to can you just brief of what led to such a great result? Number one. Number two, how did you manage the raw material inflation which happened in April, May, June? And now that prices are falling off, how would you take -- how would it affect us when the prices were up and now when they are coming down?
Also, one last point, what are the business segments which you are seeing really great traction, which can be a big growth driver for us other than Defense?
We have already answered to most of your questions, but still, we will reiterate those factors. First is, there is a volume growth of around 13% in India and around 18% -- 15% to 18% in overseas market. And there is definitely price rise in most of the products. That has led to a growth of almost 96% in this quarter.
Second point is that the prices of raw material has definitely increased a lot in the last 9 months. And we have lots of contracts with our local suppliers and we procure raw material on spot basis also. So there is always a mix of some percentage on spot basis and some percentage on contract basis. And most of our customers finish good prices are linked to those raw material prices.
But there is always a lag between raw material increase and the finished good sales price increase. So those lags always keep coming when prices are going up, we are losing. When prices will fall, we may gain out of that fall.
If you look at the another point what you'll say on that how we will maintain in future, so similarly, we are anticipating there will be some falling prices. So our inventory level has to be reduced. So we are doing that.
Okay. Okay. And sir, lastly, which of our business segment other than defenses you think is gaining strong traction?
No, no significant section is coming from the coal market. The coal mining is definitely going up in the country. A lot of experts have said in the past couple of years that there will be no growth in coal mining, but we have seen that there's a growth, and we are expecting the same growth momentum to continue in the next couple of years. So that will definitely help the company to give the more volume towards the coming years.
Congratulations.
Thank you.
Next question is from the line of Saurabh Jain from Astute Investment Management.
Sir. Very interesting half. Am I audible?
Yes, yes.
So actually the first call that I'm attending and some of my questions seem basic and yes, I'd be happy to finish with you offline. So just wanted to check sir, that you talked about guidance for the future. And on growth, I just wanted to understand for the next 3 to 5 years, would you like to give any sort of guidance of volume growth that you were expecting from the business?
In the last quarterly call, we have said that after giving strong numbers in FY '22, we have again given a guidance of 30% rise in this financial year also. And going forward, next couple of years, we are expecting that we should be able to grow at least 20%, and that's quite visible looking at various business growth opportunities for our companies.
Sure. And you should take this at 20% on a value basis, sir, or on volume basis?
No, I'm saying it on a value basis because already there is a lot of price rise has already happened in the last, couple of -- especially in the last 3, 4 quarters. So definitely, value increase will be difficult. But we are expecting that there can be some minor corrections on annual basis. But mostly, the growth will come from volume, around 15% volume growth or 4%, 5% value growth [ price rise ]. We are expecting 20% sales rise on next couple of years.
Sure. Because I was not able hear consensus that you said that in this quarter, you've grown your volume at 13% in India and overseas is about 15% to 18%, but our revenue has grown by 96%, so is it all due to variable pricing, which is prices are higher or we are selling higher priced products?
Yes, most of that is basically [indiscernible] 15% to 16% volume growth and balance is from price rise. And if you look at different sales also, it has increased by almost 37%. So all these factors have led to a price or the sales rise of almost 96%.
Sure. But this price rise is obviously something which is temporary or it may go down also?
That is quite obvious.
And sir, this global base you're talking about. What would be primarily the growth drivers for the future because again, I might be asking some very basic question. But from what I understand, your Industrial Explosives business is 96% of your business and only 4% is Defense. So what might be driving this growth in the future?
We are expecting that sales from Defense should reach to almost 20% in the next couple of years and balance will come from Explosives from Indian market and overseas markets.
Got it. Okay. And you mentioned -- INR 64 crores is the turnover that we have from Defense in this quarter which is 4%. So any specific products, sir, that on your website? What has contributed to the Defense revenue in this quarter?
We normally, as a company policy, don't give a breakup on a product-wise sales, especially for Defense products. So you have to go by the total revenue from Defense, which is INR 64 crores.
Right. Okay. And sir, just also what is the current capacity utilization of our plants all put together?
We have already shared a couple of times that. We, as a company, have variety of products, different SKUs and terms of the weights are also different, something is in tonnage, kgs, meters, so it is difficult to give capacity utilization as a specifically product-wise to the investor at this stage. Mostly there are seasonal capacity also there.
It doesn't give the right reflection if you compare our industry with other industry, which always works on capacity utilization like cement or steel. It is difficult to compare on that factor explosives with other sections.
Got it. And the cycle clarity of first kind of business there on explosives and with few years, and anything you'd like to say on that?
Please repeat again.
The business that we are in, is it very cyclical?
Definitely. Our industry depends on the volumes goes up and down based on a season rather than cyclical, like in the monsoon period, sales goes down. And when the monsoon is over, demand start picking up. The same like construction market.
Okay. Okay. And another participant touched on this part about investing in Indonesia and Australia when we have actually been exporting from India itself. So any numbers as to how much of money investing for which plant in Indonesia as well as in Australia?
Can we have a separate detailed call with you after this investor conference call? Where everybody is listening to us and everybody spending their valuable time. We can have the call directly with you? Is it okay for you?
That would be great. I'll take this offline.
The next question is from the line of Sujit Jain from ASK Investment Manager.
Yes, sir. This is Sujit. And one question is on our billing in overseas subsidiaries. Is it in dollar terms for most of the subsidiaries?
In some subsidiaries, we have dollar billing. And in some, we have local currency billing, and they're proportionate billing in respective subsidiaries also.
But in the main subsidiaries, key subsidiaries, how is the billing like in which currency? So for example, Turkey, Tanzania, the main contributors to the overseas sales.
It's been proportionate. Yes.
Okay. And we had kind of indicated and guided for FY '23 and Australia and South Africa will start making money even at the PAT level. How is our progress on that?
We had said that in our last calls that we will be having profit, at the EBITDA level, we had said that. And Australia will be starting in the third quarter. So we feel that in next year, we should be at profit level.
So from third quarter -- from Q3 onwards, Australia should be PAT positive?
Australia commercial production will start from third quarter.
Okay. And South Africa will be PAT positive when?
By next year.
So on a run rate basis beginning of the year or somewhere in H2?
Yes, maybe the beginning of the year, between that.
Next question is from the line of Ravi Naredi from Naredi Investments.
Any other country defense need we are thinking along with India?
Currently, nothing as such.
How many?
Currently, nothing as such. Currently...
Okay, nothing as such. And usually, how much net profit margin we got from Defense?
For us, we are into explosives, whether it's commercial or defense explosives. So we speak -- margin-seeking company and all the full range of baskets of products for defense as well as explosive.
So we can't bifurcate between defense and [indiscernible]?
Yes. As a matter of policy of the company, we did not give bifurcation.
Okay. And sir, the last question, ma'am, is 13% quantity led growth is there in quarter 1. So for whole year, how much quantity led growth we are planning this year?
Around 15%.
Thank you. Next question is from the line of Arun Subramanian from [indiscernible].
Just wanted to know the amount of ForEx loss and why that happened, if you can just explain again?
Yes. The ForEx loss for the quarter stands at around INR 28 crore since our company operates in many countries. So if we see Turkey -- Turkish lira has depreciated by around 91% on a year-on-year basis. Similarly, we had depreciations in Ghana, then we had depreciations in Australia, South Africa. So as a result, the unrealized ForEx losses have come.
Understood. And is it recoverable over time or because of the hedge or it is like a kind of a cash loss, which is like done with...
It's unrealized losses currently.
So it can be recovered back?
Yes.
And sir, my last question is that when you were giving this guidance of growth for this yes as well as the subsequent year, and we're also talking about both price as well as volume-led growth, considering that your raw materials can be very volatile, what could be the reason why you were looking at a consistent 4%, 5% kind of a price hike even in the forecasted period of financial year '24 and beyond?
This is as regards commodity never stays stable. So as per our experience of last so many years, we are giving the guidance.
Understood. Understood. And in terms of your growth, as you say, that difference is something which will be growing a lot more than your overall revenue. Similarly, will exports be growing much more than your domestic revenue or domestic will be the main growth driver?
So we talk on business as a whole for the current year on the whole year, we have given a guidance of around 30% on the top line.
No, I understand. What I wanted to understand is that in terms of growth prospects, which are the areas where you are going to see far higher growth than the overall industry, is it exports? It is drone, defense, the core domestic mining related business, which are really going to be the better growth driver or prospects in coming years?
We do not give a detailed bifurcation on each customer-wise or product-wise detail. But for us, the business as a whole will grow with the percentages we have said as, like, for the current year, we have said 30% and going forward, maybe 20% year-on-year.
Next question is from the line of Manish Mahawar from Antique Stockbroking.
Shalinee, can it possible to share a revenue impact of ForEx loss in the overseas subsidiary? Because INR 28 crore is an EBITDA loss, right?
Yes. For the buy-up, a year-on-year basis around INR 162 crores, if we see, if we keep the currency constant as regards -- as on last quarter of FY '22, so around INR 162 crores on the revenue part.
INR 162 crore on revenue and INR 28 crore on EBITDA, is that right? Okay. And in terms of -- can it possible to share the ammonium nitrate average realization for us for this quarter versus the last quarter -- last -- this quarter, basically?
So as we've said if we see that the sales price for this quarter as compared to previous quarter has gone up by around 15%.
15, 1-5 or 5-0?
1-5.
1-5. Can it possible to share absolute per tonne realization or cost?
We'll share it -- we can take call later and then share it.
Okay. And after the first quarter average price to now July. As July, we've seen a correction, what is the correction, absolute correction in percentage to happen in ammonia nitrate at price for us?
As Manishji has said, we're expecting a softening of around 10% to 15% in the second quarter.
Second quarter. Okay, I understand. And the same correction, we have seen to other raw mat as well like the ATM where we are backward integrated and we are internal plant as well.
Overall basis -- on the overall basis of all overall raw materials of the company.
Okay. On the raw mat again, in terms of -- because some of the raw mat [indiscernible] or emulsifier, the way we are backward integrated, does it mean at the last maybe 3 or 4 quarters, particularly last 2 quarters, that we have benefited in terms of the backward integration of some of the raw mat apart from ammonia nitrate?
Yes, whatever efforts we have been taking since we are here not have been afflicted in the numbers.
Okay. And in terms of one of the comments made by Manishji in the opening remarks, right, in EBITDA impact, there was a 3, 2 or 3 factors, he said one is the high raw mat. And one of the factor -- and secondly, the ForEx, and last point, he said mentioned, I think, some lower margins or price as one of the coal customers. Can you elaborate in that front? What is that the exact meaning, one of the coal customer?
Generally what happens, we have contractual terms some customers and some are spot customers. So as per the formula, the price of the finished goods are determined. So it's not necessary that proportionate rise can be full 100% can be considered. So as a result, gross margins got hit.
Okay. So basically this is just the 3 months rolling over price items, right? So we have on a coal side. That is the right thing? I have to understand maybe the impact will be comparable in the second quarter of this year. Is that correct?
Correct. The lag is there, you're correct. For the quarter, the lag is there. Secondly, as I said it's not possible to pass on 100% price rise because there are some fixed elements also.
Okay. Understand. And in terms of lastly -- in terms of a Defense revenue any perspective, right, we have seen a good growth in this quarter. So this is also some pricing growth impact will also be there in the Defense revenue as well. And also the annual revenue guidance one that Manishji highlighted INR 400-odd crores of revenue, we are also considering this -- this is a purely, I believe there is some volume growth as well as the price impact would also be giving that number, right? So what could be the price and volume growth in terms of this annual guidance perspective?
For Defense, there is a bifurcation of volume or price rise. The Defense as we said that current we have an order book of INR 538 crores. So orders keep coming as and when the customer -- as per the requirements of as and when customers requirement. So that captures -- that is the revenue that Manishji has captured while giving that currently we'll cross around INR 400 crores.
Okay. But the pricing element is also there, right? In that where the raw mat cost definitely will up in the Defense part as well.
Now that is as for the contraction terms with them.
The next question is from the line of Sujit Jain from ASK Investment Manager.
Just wanted to check with you this 30% guidance, revenue guidance for FY '23. Though it is difficult to predict broadly, if you can split between value increase and volume increase.
We had spoken on that. We said the current year we're expecting a volume growth of around 15%, and balance should be constrained.
Okay. And on the previous question, that is on our minds as well, in Defense contracts, these would be fixed contract or there is some variation clause for the RM because the RM has fluctuated so early?
So it depends on contract-to-contract basis.
Looking at our margins, one believes that we are kind of protected there in 1 way or the other.
So look, as long as they have been speaking for us, the company, as a whole, we consider full basket of products with explosives as well as defense explosives. So the margin is on full basket.
Thank you. Due to time constraints, we have reached the end of question-and-answer session. I would now like to hand the conference over to the management for closing comments.
Thank you so much to all the participants. We expect a similar kind of dedication and participation from our investors in all the conferences coming ahead. Thank you.
On behalf of Nirmal Bang Equities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.