Triveni Engineering and Industries Ltd
NSE:TRIVENI
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
305.35
507.5
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Triveni Engineering and Industries Ltd
You don't have any saved screeners yet
Ladies and gentlemen, good day and welcome to Triveni Engineering & Industries Limited Q4 and FY '22 Earnings Conference Call.
[Operator Instructions] I now hand the conference over to Mr. Rishab Barar from CDR India. Thank you. And over to you, sir.
Good day, everyone, and a warm welcome to all of you participating in the Triveni Engineering & Industries Limited Q4 and FY '22 earnings conference call. We have with us today on this call. Mr. Tarun Sawhney, Vice Chairman and Managing Director; Mr. Sameer Sinha, CEO, Sugar Business Group, as well as other members of the senior management team.
Before we begin, I would like to mention that some statements made in today's discussion may be forward-looking in nature. And the statement to this effect has been included in the invite, which was sent to everybody earlier. I would like to also emphasize that while this call is open to all invitees, it may not be broadcasted or reproduced in any form or manner.
We will start this call with opening remarks from the management, following an interactive question-and-answer session.
I will now request Mr. Tarun Sawhney to open the call. Over to you, sir.
Rishab, thank you very much. Good afternoon, ladies and gentlemen, and welcome to the Q4 and financial year end fiscal '22 earnings conference call for Triveni Engineering & Industries Limited.
Delighted to be able to speak to you today, the company has delivered extraordinary results at the end of the year. All the businesses have contributed significantly towards the profitability of the company.
Triveni registered the highest ever annual profitability with a PBT increasing by 24.8% year-on-year to INR 574 crores. Profit after tax grew a shade under 44% and stood at INR 424 crores. The Board, in its meeting that ended on Saturday, has declared a final dividend of INR 2 per equity share or 200% for fiscal year '21-'22. If the final dividend is approved, this will take the total dividend for the year up to INR 3.25 per equity share.
The net turnover for the company, however, declined by approximately 8% in fiscal 2002, and also in the current quarter, and this was driven by the sugar segment, where lower sales volumes of 23% and 29% were the main contributing factor in the aforesaid periods. It is important to note that for the sugar year under review, sugar year '22, the company has not exported any sugar this year, whereas in the previous sugar year we did, we had record exports nearing about 185,000 tonnes to 190,000 tonnes, rather substantial amount of sugar was exported at that point in time. The other segments registered an increase in turnover in fiscal '22, in the current -- and as well as in the current quarter.
Turning to the Sugar business. I'm happy to report that the crushing continues at 3 of the 7 sugar units as we speak today. And the total crush as on the 13th of May was 8.2 million tonnes with a gross recovery of 11.67%. The diversion of sugar to ethanol in sugar season '21-'22 is estimated at 93,000 tonnes against 75,000 tonnes in the previous season. The increase in net turnover and profitability for the alcohol business improved by 30% and 48%, respectively, during fiscal '22 and were driven by increasing sales volumes and higher realizations as well as better efficiencies.
The PBIT for the aggregate company -- for the Alcohol and Sugar segments grew by 13% and 14%, respectively. Higher domestic sugar prices of 8% in the current quarter and 7% for the entire year has helped improve sugar operations substantially. In respect to the distillery operations, both sales volumes and higher realization prices have contributed to the increase in profitability.
On the 4th of April 2022, just after the fiscal year ended, the company commenced operations of its new multi-feed distillery at Milak Narayanpur, which has a capacity of 160 kiloliters per day. I'm also happy to report that this facility operated for a few days -- for fortnight on juice, which was the first of the distilleries at Triveni to have utilized juice for the manufacture of ethanol.
The company has now achieved an overall capacity of 520 kiloliters per day as we speak today with the enhancement of operations at the distillery at Sabitgarh, which has increased from 160 KLPD to 200 KLPD.
The highlights of the Engineering business are equally impressive in our opinion. The Engineering business has reported a 12% increase in turnover, driven primarily by the Power Transmission business, in a year that was fraught with challenges and especially a 6-week to 8-week shutdown because of COVID, the Delta variant, as we remember in Q1 of the fiscal year under review.
Both the Power Transmission and the Water business have registered a marked improvement in profitability. The engineering businesses at an aggregate level reported strong revenue growth increase of 16% and 25%, and an increase in profitability of 41% and 2% during the year and the current quarter over corresponding period. The Power Transmission was the key driver with the profitability increasing by 57% year-on-year, which is quite a substantial increase in profitability growth. The turnover of the transmission business also grew at above 40%.
The outstanding order book as of the 31st of March '22 stood at INR 1,734 crores for the combined engineering businesses, a robust improvement from INR 1,078 crores a year before. On the 9th of May '22, the Board of Directors have decided to divest the company's entire shareholding in Triveni Turbines Limited, aggregating to 21.85% of the equity share capital of Triveni Turbines Limited, keeping in mind the objectives of inter alia locking -- unlocking value for stakeholders, the timely monetization of non-core assets, unbundling of businesses and enabling the long-term succession planning and facilitation of focused management of the company. The proceeds from the disinvestment of equity shares of Triveni Turbines Limited are intended to be utilized for the growth and expansion for the businesses, as well as for rewarding shareholders of the company in compliance with applicable law, subject, of course, to receipt of any approvals that may be relevant.
Turning to the financial position of the company. The revenue for operations in the quarter under review, Q4, improved year-on-year by 0.3% to INR 1,192 crores and the EBITDA margin also grew by 1.7% to INR 177.66 crores. The total debt of the company as of the 31st of March is INR 1,503 crores against INR 944 crores as on March 31, 2021, the previous year. It comprises of term loans of INR 396 crores and almost all loans are with interest subvention or at heavily subsidized rates of interest. The total debt as on the 31st of March is higher than the previous corresponding year due to higher sugar inventory levels with the company.
Having said that, as you all know during the course of this fiscal year, the debt rating by ICRA has been improved. And as a result, the overall cost of funds stood at 5% for fiscal '22 compared to 6.05% in the previous fiscal year.
I'd like to now spend a few minutes talking to you about the agriculture, sugar and distillery and separately the engineering business segments individual performance.
Turning to the Sugar business. For the sugar season ending at 31st of March, the crush stood at 6.61 million tonnes versus 6.9 million tonnes in the previous year, so a shade lower. The recovery too was slightly lower at a gross level of 11.57%, which we believe is one of the highest in the state of the Uttar Pradesh. It was 11.7% in the previous year. And therefore, this year's performance for the sugar crushing season was 11 basis points, down. Now this was due to rains, unseasonal rains that we experienced in October, which, as you will all recall, resulted in a late start to the sugar season. It was very unfortunate.
We also had flooding, vast flooding at one of our sugar factories at Milak Narayanpur, where water was released from the dams in the Himalayas. And therefore, this led to a delayed start to the season. However, catch up in terms of recoveries has been extremely good. I'm personally very proud of the achievements in performance that we've had across the 7 sugar units.
As you know, and we've mentioned in the investor statement, for the sugar season compared to the previous one, we expect approximately 20 basis points. And we can even narrow it down to potentially 21 basis points, a decline year-on-year, which is very much the best-in-class and standard. And frankly speaking given the massive heat wave that has occurred over North India and in Uttar Pradesh starting off in March and through the month of April, the performance is certainly much better than our expectations and a vast improvement on the state.
So as of the 31st of March, while Triveni Engineering's performance year-on-year was down 11 basis points, the states average was down 60 basis points. So that just gives you a kind of flavor in terms of the improvement in performance.
The lower sales volume that has happened over the course of Q4, and of the year is primarily due to lower monthly allocations, and it is also due to lower exports. Domestically lower sales allocations as you can understand were naturally going to be lower when Maharashtra -- mills in Maharashtra and Karnataka crushed more and produced more sugar. And therefore, on a proportional basis, we received slightly lower quotas month-on-month.
The sugar inventory as of the 31st of March '22 was 51.49 lakhs, so 51.5 lakh quintals, of which 40% of the sugar that remained was refined, which of course attract a significantly improved and higher realization. It was valued at INR 32.7 per kilo. Whereas in the previous year, the stocks as on 31st of March 2021 were 47.5 lakh quintals or substantially lower, 4 lakh quintals lower and that was valued at approximately INR 30 rupees per kilo.
The co-generation operations, which includes our incidental co-generation achieved external sales of INR 62.3 crores during fiscal '22, which is slightly lower than the INR 68.3 crores in fiscal '21, and primarily due to the lower operating days. And as I mentioned, we had a later start for the sugar season this year because of the rains.
Looking at the industry scenario. During sugar season '21-'22, the sugarcane area has increased by 3% year-on-year, and this has been reported by the various agricultural departments. The major increase has been witnessed in Maharashtra and Karnataka, with a slight increase in Andhra Pradesh and Telangana due to good rainfall in the Southwest, of course the reservoirs having handful of water supply.
I'd like to pause for a minute and tell you about very current feedback. This particular planting season, the reports that are coming in, indicate that the increase in cane area for the country should be about 1.5 odd percent. However, we have been very successful in our campaign, which continues to date. And we hope that for Triveni, we will achieve an 8% higher planting, which will equate to a 5% higher area under cane. As you know, the area under cane includes ratooning plant. Ratoon is the previous seasons plant crop as well. And this would be a record in our books for many years.
Turning back to the nation, considering an opening stock of 8.2 billion metric tons on the 1st of October '21, we estimated domestic consumption at Triveni is 27.7 million metric tons including the pipeline. And sugar exports will enhance to at least 9.5 million metric tons. And therefore, the closing balance on the 31st of September is expected to be a record 6.6 million metric tons, which is the lowest it has been for several years now, and that in my opinion points to a very healthy sugarcane price as we enter into the large holiday season, which is really -- which would be the month of October 2022. Our projection for this quarter and the next quarter is a slow movement upward in terms of sugar price and realizations as the remainder of the sugar exports take place and as we have -- as the summer demand for sugar then follows through into the holiday season demand for sugar.
Turning to the ethanol business. The oil marketing companies have so far allocated 425 crore liters of ethanol for supply in this year. The ethanol as you know is December through November, and this is against the requirement of 459 crore liters to meet the 10% blending target. The average blending percentage in the country as of the 24th of April stood at 9.82% to broadly speaking, 10%, which is I think a great set of congratulations go out to the policy makers and to the various departments in the government to ensure that we are meeting this ambitious target.
We are of course, on track to advance towards 20% EBP levels by 2025. Of course, that target has been reduced from 2030 by the Honorable Prime Minister. And I think we are certainly on our way to be able to achieve this target and beyond. There has been talk, as you know about flex-fuel technology and flex-fuel cars, and those things are very much underway. And that would lead to a far more robust system, where the next points on discussion will have to be around pure ethanol, whether it'd be the 100 or the 85 or the like.
Turning to the international sugar scenario, the prospects for the 2023 season now indicate a balanced market. When I had spoken to previously, we were looking at approximately 3 million tonnes of deficit globally. However, there has been an enhancement of numbers coming primarily from India and also from Thailand, and from a couple of other countries. But India, and then Thailand are primarily responsible for the elimination of the sugar surplus. Yet, we see this in Brazil, there is more diversion towards ethanol, sugarcane towards ethanol, which bodes very well for the next sugar year and as we go into it. It also has been a part of the reason why we've had resilience in the market as far as raw and white sugar is concerned. The prices have withheld quite nicely over this fairly rocky period that has been influenced by also to global parameters by all sorts of global parameters over the last 6 weeks to 8 weeks.
As I mentioned, Thailand. Thailand, the Thai crop has been increased very recently to upwards to 11.5 million tonnes. It was previously forecasted 10.3 million metric tons. Global sugar prices have just softened a touch and now trade -- on the 13th of May traded at $0.197 per pound for raws and $537.7 tonnes -- dollars per tonne for whites.
Our alcohol business had a slight reduction in terms of the production, and this was due to 2 shutdowns that happened due to NGT -- I'm sorry for the Commission for Air Quality that happened, influencing the NCR area. However, those were then relaxed, and we've gone back to full levels of production. Having said that, our sales volumes for quarter-on-quarter increased quite dramatically, by 24%.
The highest sales volume and realizations actually for the company. Ethanol produced from B-heavy molasses instituted 83% and 93% of sales volume in the current year and current quarter, against 55% and 99% in the corresponding periods of the previous year. The company has under its Alcoholic Beverages vertical started producing Indian Made Indian Liquor towards the end of Q3 fiscal '21, at its bottling facility in the premises of our existing distillery plant at Muzaffarnagar. This is a forward integration of the business. As a result, fiscal '22 performance is not directly comparable with fiscal '21 performance because it's been clubbed together.
I've spoken about the new distillery at Milak Narayanpur, District Rampur, which has been commissioned on the 4th of April '22. The company has also announced its operations at Sabitgarh upwards to 200 KLPD from 160 KLPD. The additional grain-based facility of 60 KLPD, which is being set up at our Alco Chemical Complex in Muzaffarnagar will be commissioned within the first quarter of this year, within the next few weeks, as we had forecast and spoken to you. And this will take the distillery capacity of the company up to 580 KLPD. So further expansions that have already been declared and I have spoken to you about it of distillation capacity are waiting the necessary statutory clearances and we're on track for enhancing our capacity to 660 KLPD by July '22, through our plan of low capital cost and incidental expansion and some debottlenecking.
Turning very quickly to our engineering businesses. Looking first at our Power Transmission business, we've had record revenues and profitability in fiscal '22. The revenue growth was witnessed across all business segments and in export markets, and this was despite a 7-week to 8-week shutdown that we had due to the Delta variant in the first quarter of the last fiscal year. The higher profitability was primarily due to overall cost control and operating leverage, which stemmed from higher revenues.
The outstanding order book as on the 31st of March stood at INR 221 crores, which included some long duration orders of INR 111 crores, the difference between which we hope to be able to execute in a short period of time, potentially 6 months to 7 months. The Board has approved a CapEx of INR 80 crores for the Power Transmission business, which is primarily for a new factory, which will be established in Mysore, plant and machinery and equipment, and this should be complete by March '23.
Turning quickly to the Water business. Water business has also achieved fantastic set of numbers. And on a consolidated basis, which includes our SPV at Mathura, this was awarded and of course, at Pali, we have achieved a 25% growth in revenues in the quarter under review. The profitability is higher due to better cost control and a very efficient project execution as things done to normalcy. And as I had mentioned in previous quarters, we were waiting for these COVID lockdowns to abate. And once they have abated, business has gone back to normal, the availability of manpower has not been in question, et cetera, we've been able to execute projects with great speed and the impact of that is shown on our financial statements.
The company is expecting robust order booking in fiscal '23, and it is well-placed in certain bids that are being currently evaluated. The outstanding order book on 31st of March stood at INR 1,513 crores, which included INR 940 crores towards O&M, which are over a longer period of time.
Before I turn to the outlook for the sugar business and engineering business, I do want to mention that the Board in its meeting last week, has also sanctioned INR 130 crores of investment in our sugar business. And this will be taking place at our factories in Khatauli, Deoband and Sabitgarh and is scheduled to be complete by October '22. The primary purpose of this investment is modernization, which includes the improvement of processes, equating to a reduction in losses at these plants. It also will ensure that we achieve higher crush rates at all these factories well within our registered capacities.
In addition, there is investment we've included in terms of improving the quality of sugar, where Deoband factory will be converted into a refined plant, and we will be doubling the output of the pharmaceutical plant at our sugar factory in Sabitgarh.
I'd like to briefly touch upon the outlook of the sugar business and the engineering businesses. It is estimated as I had mentioned that for this sugar year, sugar year '22, we will be approximately 20 basis points to 21 basis points lower in terms of gross recovery compared to previous year. And this is primarily due to the late start to the factories and the massive heat wave that we've had. Very unprecedented weather conditions or weather patterns that we've had this year.
However, Uttar Pradesh being one of the most productive sugar growing areas, we expect much higher sugarcane availability for Triveni and a much higher crush as we go into the sugar season '23, and this has been primarily due to the very successful planting campaign, which will translate as we hope to a much better drawl in the coming season.
I had mentioned that we will end this sugar year with inventories just higher than 6 million metric tons in the country, and it is our belief that we will see equally robust sugar pricing going forward with slight improvements in pricing over the next few months going through the holiday season in October, November of this calendar year.
Turning to the Engineering business. The Power Transmission business has clearly indicated that the domestic economy has shown great signs of growth and through our increased order book. However, it is not just the domestic economy, we've received excellent orders from global OEMs as well and we're seeing excellent growth in those businesses, which we hope to capitalize on as we move forward into fiscal '23.
The growth domestically has primarily been due to capital expenditure in power, steel, refineries in oil and gas, fertilizer, cement, sugar and mining. These are the primary areas where we've seen substantial order booking.
Turning to the Water business. The company, as I mentioned, has participated in a significant number of tenders, a lot of which are pending finalization and we anticipate in the next few quarters, we will be having the finalization and the conclusion all of those contracts and the endeavor of course, is that we are successful in many of them. We're well positioned with respect to our past bids that we expect to be finalized over the next few quarters.
The demand of course, for water in the country has expanded quite dramatically. The crisis is not just domestic, but it is also global, frankly speaking. Water is seriously undervalued and with proper incentives that are now being put into place, we expect a robust ecosystem to exist domestically and internationally. The reason I mentioned internationally is as you know, we won an order in the Maldives in the last fiscal year. And we're certainly looking at a few other markets to be able to execute our Water business orders in South Asia and Southeast Asia.
Thank you very much. I'd now like to open the floor for some questions.
[Operator Instructions] The first question is from the line of Sanjay Manyal from ICICI Securities.
Just have few questions. One is on the distillery capacity. I believe, once your capacity get commissioned, the full capacity get commissioned, you would be able to produce approximately 22 crore liters of ethanol. And given the fact that the area under the sugarcane is increasing significantly and simultaneously you are expecting higher planting. So isn't the fact that your capacities are below par in terms of distillery given the fact that country level productions are also going higher. So won't it be required to sort of increase the capacities of ethanol even further from here?
Excellent question. So let me take it one by one. You see the capacity number that you're looking at depends on what your feedstock is. With respect to B-heavy molasses, we believe we have ample capacity and extra additional capacity after winning with the 660 KLPD. We also with the 660 KLPD have some capacity to be able to process cane juice during this season. However, the economics of juice are something that is still under question. I anticipate that moving into the next molasses, the next ethanol year, they may very well be indications by the government to enhance and to support the conversion of juice directly to sugar -- sorry, to ethanol. But until that happens, I think this is something that we would be happy to sort of wait and watch. But we do have ample capacity at this particular point in time to be able to process our B-heavy molasses.
So just one follow-up on that. I think your -- what I understand, we have not also exported anything. So exports has not been done. And even the juice route, you mentioned that you will not be able to sort of take it more prominently. What I believe, isn't it like betting more on the sugar prices, which at this point in time looks that there will not be any runaway price movement as far as sugar is concerned?
So I think sugar prices at this particular point in time are fairly healthy and fairly robust at this time, well above INR 35, as you know. Now the company has not exported any sugar because it has been unviable. In the years where there was an export subsidy and there were quotas given to each and every factory, there was commercial sense to be able to do it. In Uttar Pradesh, especially because we get much higher premiumization and much higher value for our sugar, we were not in a position to be able to competitively export sugar. The opportunity cost was too great and therefore, we decided not to export sugar during this part of the sugar.
Now going forward, when you're looking at -- your comment is, are you directly reliant on sugarcane prices? Well, we are happy to review and we have constantly reviewed that we had applied for many potential distilleries and we will continue to explore it. But until the Board makes a decision for any enhancement of distillery capacity, we can't really come back to you and talk about that. It's not that we won't be exploring it from time-to-time.
Today, as far as juice is concerned for an existing distillery that has been set up, it makes sense to have some capacity for juice. But to setup standalone distilleries for juice still requires an enhancement of your price -- of your ethanol price from juice. And therefore, as a result, it is our view that having the sugar, especially the quantum of refined sugar and sugar that we have, it really makes more sense from profitability's perspective.
Okay. Just one more thing. On the -- I'll ask these 2 questions at the same time. Given the fact where inventory levels are somewhere around 5.2 lakh tonnes, means by when we will we exhaust the current season inventory? And secondly, on the Triveni Turbines divestment is concerned, where -- specifically if you can mention, where you will be utilizing the money? Because what I understand, your cost of debt is still far below, means almost 5% or below. Then can it be assumed that the entire amount or the maximum amount will be utilized for the dividend payment?
Let me answer the first part of your question, and I anticipate that the sugar that we have with us, you've got the absolute figures on your fingertips, will be exhausted by us by November end, potentially first week of December. That would be the very outside. Very much in line with the amount of stocks that exist in the country. So that is my estimation as far as the sales of this sugar by November end hopefully would be our target. And I anticipate that we will start sugar factories earlier this year compared to last year.
For the second part of your question, I will hand over to our company secretary, Ms. Geeta Bhalla.
So balance part of the receipt will be used for rewarding the shareholders of the company in compliance with various applicable laws and subject to the receipt of approvals. So this is what we proposed to do.
[Operator Instructions] The next question is from the line of Pratik from Systematix Group.
Sir, just a couple of questions. Firstly, this INR 130 crores CapEx that you're doing on modernization of your sugar plants, does that also increase your crushing capacities at these plants or the crushing capacity remains the same?
So excellent question. The permissible crushing capacity remains the same, of course. However, our daily crushing capacity will certainly enhance at these 3 factories. So we'd expect to crush much more on a daily basis, well within our authorized permissible limits.
Okay. So means that surplus or the additional gain that you're expecting because of higher harvesting and better yields, that we'll be able to finish that crushing well before the actual season ends and there should not be any drop in the yields recovery rates at our end?
No. We will be crushing at a higher rate, but our permissible -- what we are crushing at today is slightly below the permissible, the declared crushing capacity. And with this modernization, we could certainly be touching our crushable rates. So within the same period of time, we will crush more cane at better efficiencies and lower losses.
Got that. And sir secondly, if I see your Q4 distillery numbers, the realization that you've reported for the distillery segment in this quarter is actually slightly below last quarter -- sorry, Q4 of last year. Does that mean that you have done more of B-heavy in this quarter? Or what has been the mix that has led to this lower realization?
So let me put it this way. The number over there would be on par with it, it probably is not the right number. It could be about INR 56.60, that's #1. Second is because of the start of the IMIL segment, which is the country liquor segment, we are manufacturing more of ENA. Now as you understand, we are utilizing more of our levy molasses and transferring ENA to our country liquor business at controlled prices. That's impacted the realization in this quarter versus last quarter.
Okay. So if this IMIL would have not been there, the realization would have been better than March?
Higher. Yes.
The next question is from the line of Kaustubh Pawaskar from Sharekhan by BNP Paribas.
My question is on your distillery business where your capacity will be around 22 crores liter. So my question is that in FY '23, what will be your utilization rate and whether it will further improve in FY '24?
That's right. You would notice that we started our Milak Narayanpur distillery in early April, and our Muzaffarnagar distillery is expected to come in a few weeks, all within this quarter. So therefore -- but they will take a little bit of time to stabilize. So therefore, as per the last Board meeting, where we had mentioned that possibly in FY '23, we might be ending at somewhere around 18 crore liters, give or take a little more. But we will go to 22 crore liters definitely in FY '24 with these capacities.
Right, sir. Right. And second question is on the capital expenditure. So as I understand that you would be doing around INR 250 crores kind of a CapEx this year. And one is for the modernization, and other is for the Engineering business. So what was the CapEx in FY '22 you did for the Distillery business and whether there would be any add-on in CapEx for Distillery in current year?
I'm sorry, just repeat the last portion of your question, if you don't mind.
Yes. So Distillery business, how much was the capital expenditure done in FY '22, and whether there is any add-on CapEx which needs to be done in the current fiscal FY '23?
Right. The approved CapEx, the largest portion of it was in -- was under process in the last year. In terms of recognition, the bulk of it is -- it's going to happen in this fiscal year. So if we're looking at revenue recognition -- if you're taking about recognition, the recognition will happen in this year, as the distilleries have been commissioned. The first one on the 4th April, the next one will also be in this quarter. And therefore, all of it is happening in this fiscal year. However, in terms of expense, the broadest portion -- the budgets remain the same. There is no enhancement of the distillery budget, if that is what you're alluding to.
As far as the sugar and engineering CapEx, it's not INR 250 crores, it's INR 210 crores -- INR 150 crores -- sorry, INR 130 crores plus INR 80 crores, which is INR 210 crores. And that is going to be spent in this fiscal year.
The next question is from the line of Pratiksha Daftari from Aequitas Investments.
My first question was grain-based addition that we are anticipating in this quarter, given that the input prices have gone up for grain-based distilleries, how do we look at profitability for this capacity and how do we look at mix of B-heavy, C-heavy grain base and juice for the year?
So there are 2 parts to the question. So regarding the first portion of the increase in grain prices, now one of the distilleries at Muzaffarnagar is primarily for portable, which is ENA. And therefore, there is a pass-through of the grain pricing, the pricing of ENA has already moved up significantly, and we expect further increase in that price.
Second, there are 2 options within the grain ethanol. The first option is that you buy damaged grain from the market who's prices have gone up, and -- but you get a much lower ethanol price from that. And the second one is to go to FCI godowns and get a rate which is about INR 3.95, say, INR 4 higher than the other damaged grain prices. And therefore, we are looking at that option, and we would be -- in this month itself, we would be getting our orders for Milak Narayanpur distillery on grain and procuring grain from FCI.
In the meanwhile, there have been lot of representations from the industry bodies, which represent the grain test studies to the government for an enhancement of rates of grain ethanol.
Your second question was about how do we view the current ethanol pricing in terms of the feedstock which is available. Like the last time, we continue to hold that B-heavy molasses remains the most viable and despite the grain taken or not with an increased feedstock pricing, it would still be #2, followed by cane juice pricing. This is for setting up of new distilleries primarily on cane. If anybody has a surplus capacity, obviously, he will continue cane juice.
Okay. And what was the transfer price for molasses in this quarter?
See, the transfer prices are based on -- are based on market dynamics. And let me say, in this quarter, the price to the distillery was about INR 1,050, in excess of that. The price at which distillery consume B molasses was INR 1,050 plus.
Okay. And this quarter, we've seen employee costs go up significantly. Is there anything material to note here?
No, there isn't anything here to not. This would be with the -- there is of course -- there's nothing untoward to note. Of course, there is a wastewater negotiation that happens and gets reflected from time to time a few years on. And this increase reflects past dues for the wastewater negotiations, because that carries with it a few years of back to use. And that is the number that you have noticed.
Okay. And what is the cost of production for sugar in the quarter vis-a-vis last quarter -- last year same quarter?
It is effectively the increase in grain price, the INR 250. Broadly speaking, that's for Triveni.
The next question is from the line of Rajesh Majumdar from B&K Securities.
So I had a question on the blending rate specific to UP. While it is well known that the India -- Pan India blending rate is just close to 10%, what would be the blending rate in UP? And the second question, which is an added question, is that a large part of the ethanol expansion is happening with the UP mills this year. So if you look at the diversion of 3.4 million tonnes to 6 million tonnes, probably the bulk of it will be happening in UP itself this year and that too a large -- some part of it is juice-based. So given these dynamics, will it be a challenge to sell the entire amount of ethanol this year itself, or it goes to -- like go into 2 to 3 year kind of thing? I hope you got my question, what I'm trying to ask.
No, I've understood your question perfectly. So I have some difference of opinion in terms of your numbers. And let me start with that. I believe that 3.4 million tonnes is the number that we're anticipating for this year's diversion of sugar towards ethanol. For next year, I don't think...
Yes, sugar year. I'm talking about the financial year.
For next year, it is anticipated to be 4.5 million metric tons of diversion. Broadly speaking, since the factories shut down, even the bulk of Uttar Pradesh starts to shutting down, most of our diversion happens in the fiscal year in any case. Not all of it, some of it does continue of course into the month of April. But by and large, the expectation is that that number is the same. So I anticipate it to only increase up to 4.5 million tonnes, on track for 6 million tonnes and potentially 6 million tonnes plus by 2025. By 2025, there is a very good chance that we would be doing more than 6 million tonnes. But next year, I think a reasonable number, given the distilleries that have been announced and that will be commissioned next year or rather this year, in this fiscal year, I anticipate only a diversion of 4.5 million tonnes.
Now with respect to Uttar Pradesh, Uttar Pradesh is buying alcohol at a higher percentage, but certainly blending at 10%. The excess, of course, is going to be supplied to outside the states, etc. The purpose of the government's discussions over the last few months has been acutely on this subject that you have certain pockets of larger ethanol production. And as far as ethanol that is produced from sugarcane or its byproducts, it's going to be Uttar Pradesh, it is going to be Maharashtra, it's going to be Karnataka. This alcohol has to be exported, and it is for consumption within a 12-month time span.
The demand is there. The demand is a pan country demand. The question that you're really asking is, is there a problem in terms of transportation of ethanol to other depots in other states across the country? And my answer to that is that is the only way that we're going to achieve higher blending target, and that is a distinct -- that is something that will happen and we'll see it happen in the next alcohol year.
Okay. So you don't perceive any challenges on these numbers, given the fact that you'll see that the alcohol be transferred to the other states. So I think there's a related question here. I mean, you talked about the grain dynamics. I mean, does the freight of the alcohol to be transported from UP to a state like say Assam come into play in the calculation of the grain-based alcohol which we're talking about? And if that comes into play and the grain dynamics are looking better, in that case, will the grain greater equation be more viable for some other players?
I didn't understand your question. But the point is that grain-based distilleries setting up in Bihar and West Bengal would be far better positioned to supply to Assam. That's point #1. And there are definitely deficit states. Also, what the government is doing or the OMCs are doing is that they are trying to put up aggregate depots where you aggregate within a state, let's say within UP and similar stations in other states, wherein you aggregate these -- this ethanol and then transport it by rail roads, which are trains and containerized freights to the deficit states. That makes it much easier and also reduces the turnaround time as well as the number of vehicles required for transporting this ethanol to far off states.
But the answer to your question is within the State of Uttar Pradesh, ethanol made from grain or made from sugarcane will have the same amount of transportation allowance by the OMCs.
And just to add to that, we must remember that for our Milak Narayanpur distillery, we have signed up by a bipartite agreement with the OMCs, which allows the preferential offtake from our distillery of 50% of our capacity. So preferential means -- it does not mean in terms of rates, but in terms of the offtake, prioritizing the offtake.
Which OMC is this? Can that be shared?
It's all the 3 OMCs, the government OMCs.
Sir, and just one question, if I can squeeze in on the sugar side. We are hearing from ISMA that there is a panel which has been noted to talk about sugarcane farmers to choose buyers. So this is against the normal catchment area concept that we're familiar with the UP. Is that a possibility in the future, because at some stage, the sugar production will fall so much from the few larger players in UP, that is maybe a bit of a lopsided equation between Maharashtra and UP in terms of sugar and alcohol?
No, I think you're jumping ahead of the gun. This was an article that came out a few days ago, and the agency in question was CACP, not ISMA, #1, which is a Commission of Agricultural Costs and Prices. ISMA being the agency for the Association for the -- private sector association for Indian sugar millers. And again, this is something that came about as a potential recommendation from that body. This is certainly nothing that ISMA is talking about. I'm happy to share my personal views with you offline rather than take up time on this call on the impact of that. But let me say it is nowhere near as dire. It is nowhere near as dire as what you're contemplating. I don't think it will happen. #1, I don't think it will happen. But even if it were to, it isn't certainly not that dire.
Can I ask one more question? So basically, if you look at the numbers, I mean if you look at a scenario whereby large number of companies are expanding in alcohol so much, so these companies will be selling much less sugar from -- as to what they were selling earlier in terms of the quotas. So where will that sugar come from in UP? Basic question.
There is plenty of production. UP produces much more sugar than it certainly consumes, and the quantity of sugar being produced by the nation, despite diversion to alcohol, despite exports, is substantial. And therefore, there is no -- the scenario that you're talking about the shortage is certainly not foreseen, not in UP, not in any other part of the country.
Okay. I was talking only about UP actually. Is there going to be a lopsided scenario by which Maharashtra and Karnataka will be surplus in sugar and UP will be deficit in sugar, that kind of a scenario?
Absolutely, no.
[Operator Instructions] The next question is from the line of Yash Agarwal from JM Financial Services.
Congrats on a good set of numbers. So I had a question with respect to the sugar industry. So this sugar season, obviously, we've had 9 million tonnes, 9.5 million tonnes of possible exports. And that's why we've been able to reduce the sugar inventories. The question is, our next sugar season with only an additional million tonne that you spoke about being diverted to ethanol, export figure of about 7 million tonne to 8 million tonne would be needed for the industry to be at parity in terms of inventory. Now isn't that little concerning, or are we thinking little to ahead in terms of the outlook for sugar prices come the next calendar year?
Okay. Excellent question. I don't think it's a cause of concern and here's why, okay. Firstly, your mathematics is spot on. Post-COVID, we're seeing a further increase in terms of consumption. You must factor that in as well. There has been a big jump in consumption ever since COVID has abated. And I think that that would continue, perhaps not with the energy that the jump that has happened this year, but it will certainly improve and go above 28 million tonnes in the next sugar year. That's point one to consider. The second, of course, is that there'll be 1 million tonne extra that will be diverted towards ethanol. However, we will still have -- we've had record planting. The question that comes to, what is the yield? And here the rainfall and weather patterns will play a very, very big role.
Now last year, the weather patterns, especially across Central India and portions of South India, were ideal. In fact, never have been seen before in the last 2 decades. And therefore, the yields were extraordinary weather-based, really. And you had, as a consequence, a lot of sugarcane that has been produced in Maharashtra and say North Karnataka. That has contributed to this rise.
Now next year, it can happen, it can't happen. IMDB is currently forecasting a normal monsoon. So even if you assume that you will have excellent output in terms of sugarcane, you will need to have a robust export program. The message as far as Krishi Bhawan, the Ministry of Food is concerned, is that they are happy with the industry going ahead and exporting as much as they like. In fact, if you remember, there was an article that came out somewhere towards the end of March, which questioned there was some commentary to that question whether the government will either pass any negative commentary or any type of comment on the total quantum of sugar that will be exported from India.
And there were some concerns at least for 2 or 3 days until the Ministry of Food came out with a statement and clarified that they had no such targets, and they were happy with the export program continuing. While we didn't announce the target, the client that the total quantum of exports that needed to take place was something that was not an issue to the government.
Now moving into next year, especially as we're now into the second half of this sugar year, we're seeing that export contracts will continue. We've already surpassed 8.4 million tonnes of contracted value. And I suspect that we will certainly touch and achieve total exports of 9.5 million tonnes. It could even be a little bit higher, but from a conservative perspective, we have forecast 9.5 million tonnes of export.
I do believe that during this period, we will enter into aggressive contracts for the next sugar year. The news that is coming out from other parts of the world, especially Brazil, which is the real -- which is the largest exporter of sugar into global markets is a massive diversion, a most significant increase in diversion of sugar towards the ethanol program. India will certainly benefit.
The other thing is that India has been in export markets for the last -- the question is India have to export sugar, you're right. The second part of the question that I'm asking or rather answering is that where will now that sugar go, if India is to export 6 million tonnes, 7 million tonnes next year? A, I think it is achievable. And the reason why it's achievable is because we have found homes. India has been exporting consistently sugar for the last few years to Sri Lanka, to Bangladesh, to Afghanistan, even Iran. We've been exporting to the west in terms of the Middle East and through the Middle East across East Africa. We have also been exporting large quantums of sugar to Indonesia and to Myanmar. So we have found homes for export of our sugar.
The movement in freight, the hikes and shortages in freight have really helped us in our export campaign. And I think a lot of these buyers in these countries are spot buyers. So the challenge of course in terms of entering into long-term contracts with nations far away is something that is a bit more frightening than entering into a contract with India, where the supply could be at least 30 to 40 days short term in terms of physical delivery. And that's why I believe that not only will India export, but India will export to the same old markets, where Indian sugar has found a home.
Got it. Sure. Secondly, someone spoke about the increase in raw material costs for grains. Now I believe there is some bit of hike announced in the grain-based ethanol prices as well. What is the derivative benefit that the sugar ethanol domestic could get? So can there be a price increase in ethanol for us also? And if there is no price increase in ethanol, would it make sense for us to convert to ENA and gain benefit of the higher realization? So is that something in the right direction that we're thinking?
So you asked a very complicated question actually. The fact of the matter is, we at Triveni, are manufacturers of ethanol, those from sugar and its byproducts, molasses, as well as grain. So we're on both sides. Now while great -- right now no price has gone up. There's only been one declared price for everything. The grain prices have enhanced, and there was somebody else who asked the question and my colleague answered it about what our strategy is. Grain procured from the Food Corporation of India is already sold at a standard price. That price is not -- that price has not gone up. And neither has the price of ethanol that is made from FCI grain. So yes, basically, the lower prices of split grain that is bought from other markets and mandis, that price of course has certainly gone up. But our focus is on grain that is purchased from the FCI. Now that's answering part of your question.
The other question of your question is, should you -- how does that impact? How does the movement in grain, and any possible enhancement in ethanol manufactured from grain impact ethanol manufactured from sugar? Yes, of course, if one goes up, it negatively impacts the other. That is certainly there. We will make sure that we will move towards a scenario where we can -- we're ambivalent to the raw material. So our distillery in Milak Narayanpur for example is a dual feed distillery. It can use molasses and juice on one side. It can also use grain on the other side. And that type of movement -- and we really pretty much led the way as far as that is concerned on such a large scale. And that type of movement is what gives you optionality and flexibility, whereas you only then look at your bottom line in making these decisions.
[Operator Instructions] The next question is from the line of Mr. Resham Jain from DSP Investment Managers.
Congratulations. I think unlocking shareholders' value has been demand since quite a lot -- quite some time. I think this has been a good decision overall. So congrats on that. Very few companies have been able to unlock value like this. So that's first one. Second is, on various CapEx which you're doing now, the INR 130 crores sugar CapEx and then INR 80 crore in the Engineering business. And I think after this divestment, you may further invest in various businesses. How do you see the kind of payback or the return ratios in all these businesses? If you can just give a sense on, let's say, this INR 130 crores and INR 80 crores, how are you looking at the return ratios from these investments? That's the only question from my side.
I'll hand this question over to our Company Secretary to answer.
Yes. So as far as compensating the -- rewarding the shareholders, we'll definitely consider at the appropriate time, subject to the relevant approval. The proceeds of -- for rewarding the shareholders of the company in compliance with applicable laws. So at this point of time, it is difficult to say how much, but it -- as the Board will approve, we will be able to...
Sorry. My question was not that. My question was this CapExes which you're doing, like INR 130 crore CapEx in the sugar business, INR 80 crore in the engineering business, what kind of return expectations one should have from these investments?
I'm sorry, I misunderstood your question. I think, at Triveni, we certainly look at double-digit returns and payback within 4 years to 4.5 years. So we're looking at -- in fact, for these investments, we're looking at less than 3 years payback with values higher, around about 20% to 21%.
The next question is from the line of Nagendra from Growthx Capital.
So just wanted to understand this government quota thing. You mentioned that lower allocation to the company was the primary reason for the lower volume. So in case government keep allotting a lower quota, it will be a challenge for the company to maintain the sugar revenue going forward? Or is there any other mechanism Company has to deal with this allocation problem?
Let me answer that before we come to your next question. It's a function of total amount of sugar we produced in the country, and it's year-on-year because it's always comparable. So you yourself are comparing 2 data points of this year versus the year before. In the year before, Uttar Pradesh produced a lot of sugar. The country produced relatively lower quantums. And therefore, Uttar Pradesh's share and Triveni's share within Uttar Pradesh was thereby higher and we received a certain allocation of quota to meet consumption. This year, while consumption has gone up, production has gone up much, much more. And the production has gone up much more in 2 states, Maharashtra and Karnataka primarily. And therefore, they have received a proportionately higher share of allocation. Consequently, Uttar Pradesh and Triveni has received slightly lower, although our production is -- has been very, very good this year as well.
Going forward, I think this scenario won't change. I mean, I find it highly unlikely that there's going to be another scenario where Uttar Pradesh suddenly feels under greater pressure in future years. So I think the possibility is much greater than our quota, especially with our enhanced crushing etc., that we're forecasting. Our quotas will improve as we go forward into the next fiscal in Triveni, not the other way around.
Okay, understood. Sir, one more question on the policy regarding -- is there any cap by the government, so a company can divert only a limited amount of sugar to distillery or is it free decision by the company we can take whatever the amount it wants to divert for the distillery production?
Well, the company has to set up a distillery that can absorb the capacity. But once established, you can divert as much of your rated capacity to ethanol.
So there is no bound from government, right?
No, there isn't.
Yes, just a small question on the realized margins of the distillery side. So the primary reason that transfer price is up, primarily the reason for the lower margin in current quarter, or is there some other reason also?
So well, it's not comparable. As I mentioned in my opening remarks, the profitability of this quarter and year is not directly comparable to the previous year for 2 reasons. The first one, of course, is a higher transfer price from sugar to the molasses to the distillery segment. And the second one, of course, is the inclusion of Indian-made Indian liquor within our distillery segment, which is of course at a much more reduced price. The price of alcohol is a far lower price, and therefore that equates it. If you take out the IMIL, you would see a healthy increase in terms of the sales realization of spirits year-on-year.
So what was the revenue contribution this quarter from IMIL?
It was about INR 12.5 crores of sales.
Okay. I think it is close to last quarter, right? Okay.
[Operator Instructions] The next question is from the line of [ Shailesh Kanani ] from Centrum Broking Limited.
Sir, I had a question on the debt level. As I see, sharp move on the short-term borrowings and there has been increase in inventories, as you rightly mentioned. There has been some reduction in trade payables as well. So can you throw some light on this and going ahead, how this should pan out?
Yes. The increase in overall debt levels, especially working capital, is only on account of the higher inventories that we have this year at the end of this fiscal year versus the last quarter or the better comparable would be March 31, 2021. And that is what's accounted for the increase. The debt levels and the interest rates are very much under control. As we sell up the sugar, of course, the working capital levels will substantially decline. And I think if we're able to evacuate our sugar in a timely manner, you will see these net debt levels and working capital levels decline rather substantially.
Okay. And on trade payables, we have seen...
There's also one small issue that I would like you to also consider that this year, we have, Triveni has paid its farmers 100% absolutely on time. And that's been a very important factor. The previous year, there was a lot of uncertainty and there were a few delays with respect to cane price payment. And therefore, the cash flow levels were -- sorry, the debt levels were slightly lower in the previous year versus this year. This year, of course, it is primarily because we have cleared 100% of our cane price payment on time.
Is it just respect to lower cane availability in the State of UP that we have taken the step to shorten the period of payment to farmers?
No, not at all. It's been the ability for the company to pay. I think our farmers are very happy giving it to us. Even in years past where there has been a little bit of competition here or there, we found that our farmers are much more than happy because of our track record and the work that we've done with our farmers to always supply cane to us. So that's not a concern of ours really at an operating level. But this year, the company received fantastic quantums of cane and has the ability to pay. And therefore, completely cleared all of its cane price payments well within the prescribed limits.
Okay. So basically -- I just wanted to understand. So basically, our cane crush outgo for the next year, that is FY '23, might be slightly on the higher side because of this -- because ultimately our sales, that is the sugar realization and the volume, it depends upon the quotas. So it would be, as you rightly said, it would be on the staggered way. So outgo would be slightly higher than FY '22. Is that a reasonable estimate, sir?
Sir, it will remain at the same level as last year, because this year includes some interest of -- because of some tax -- interest on tax is also there of INR 5.5 crores or something like that, which will not be there in '22, '23.
Okay. Fair enough. Sir, second part of my question was similar to what earlier participant has asked about, overall sugar production in India. So whole structural change in the industry has come with respect to declining inventory levels. Now I get you on the front that consumption is going from 26 million tonnes to 27 million tonnes this year and expect it to go to 28 million tonnes, which is in line with the long-term average of the volume growth. But as we know that Indian cost of production is far higher than our competitors in Brazil or Thailand. So, in a scenario where there are no external factors which help the Indian sugar, be it [indiscernible] issue or be it any external geographic problems of war has brought opportunity for the Indian sugar. So in that case, this year...
Sorry to interrupt you, but your voice is breaking. May I request you to come in a better reception area?
Yes. Is it better now?
Yes.
Yes. So basically, what I'm trying to say is that in case we do not have any external factors that aid Indian sugar exports, how do we see the scenario? Do we expect government to intervene? We know that they can't provide exports subsidy. Do we have any other tools at their disposal to help the sugar industry? I just wanted to know that, your belief.
Well, I think the government has all the tools. But besides subsidy, of course, things are -- things are limited. We do, as you know, have a quota system in place, which has worked very, very effectively. We also have an MSP in place by the central government. So if your concern is, will domestic prices tank if India is unable to export and if there are any exigencies in global markets? Well, you have 2 very important thresholds that will not be crossed. The first one being the quota system. And the second one being the MSP that is established by the Government of India. They're 2 very important things. And that gives us a tremendous amount of confidence as far as domestic sugar pricing is concerned. And we have tested them, and they have remained unbreached, frankly speaking, over the last few years since it has been implemented. So it has been tried and tested.
Now as far as Indian exports are concerned, I think from time to time, these questions do come about, yes, there was a great deal of argument about WTO compliances etc., etc. and that subject is still ongoing. However, there can certainly be ways for the government to assist in the future, if required. As of now, the government felt that India could export sugar competitively into global markets, which is why you're asking the question what will happen if India can't export competitively?
I think there are multiple things that can happen in terms of assistance in evacuating Indian sugar, and that we'll have to see from time to time. I don't want to present any hypothetical scenarios at this point in time, but I certainly don't think all the arrows are out of the -- have been show with the bow.
The next question is from the line of [ Vignesh Iyer ], an individual investor.
Congratulations on good set of numbers, in spite of the challenging circumstance. I just wanted to -- I've got 2 questions. First one is related to the water business. So if I can recollect, in Q3, we had posted somewhat a margin of around 15% of EBIT in Q3 FY '22, which has now come down to 8%, 8.5%. So I just wanted to know in -- overall, what is the kind of EBIT margin can we expect in water projects?
So we don't give future numbers as far as future guidance as far as numbers is concerned. However, I would encourage you to look year-on-year performance on the margin levels and profitability rather quarter-on-quarter because in each and every quarter, the revenue recognition is such that it could have slightly higher margin and slightly lower margins. What is more reflective is the growth in terms of the annual performance of the business, which has -- as you've seen, has been quite robust.
Okay, fine. Another question I had is, so when I went to this presentation, sugar, we have 51 lakh quintals inventory average of INR 32.7 per kg. Can you give me what is the spot rate of sugar as of now?
INR 35 per kilo for range [indiscernible]
Okay. And you are expecting to rise slightly over the period of next 2 quarters, right?
That is our internal estimation. Yes.
The next question is from the line of Harsh Maheshwari from Systematix Group.
My question is related to Triveni Turbine shares, 2, 3 questions. You told that you will sell the stock in next 6 months or by 31st March 2023 at INR 172 on the stock exchange. That's minimum price of INR 171. So if price is not there of INR 171, how will you be able to execute the lock date?
Floor price which has been fixed by the Board for the promoter is INR 171. And the time limit has been given up to March 31, 2023. So we will see at the appropriate time and we hope to -- but this is a binding contract, and we will continue with this at INR 171.
Yes. My query is very specific. You mentioned that you will not sell -- your floor price will be INR 171 and you will execute at the stock exchange. So the issue is that, obviously, you have mentioned that it would be after 6 months of the approval from the -- in the AGM and March 31, 2023, whichever is later. So if INR 171 -- price is higher than INR 171, there is no issue, you can always execute the exchange. But if price is lower than INR 171, how you are able to comply with that? Then in that case, you would have to go off market, while you are seeking for a approval to do it at the exchange, number one.
Number two, you also mentioned in your AGM notice Page 7 that the promoter who is buying inter se, they would do it from their personal finances, as well as they may do a monetization of some of the shares that are held by them in the company, company means Triveni Engineering. So is the promoter also going to sell some Triveni Engineering shares to acquire Triveni Turbines? These are my 2 specific queries.
Yes. So as we have mentioned in the explanatory statement that promoter may sell their shares in Triveni Engineering to buy the stake in the Triveni Turbine Limited by way of inter se transfer.
Regarding your second question, this floor price is INR 171 minimum price and promoter will acquire the share, that minimum price has been given by the Board is INR 171, which is based on the fair valuation. And this is the minimum price and outer time limit is March 31, 2023. So we'll see at the appropriate time if we are able to do it, and Board will reconsider it if required.
And is there any time frame for managing stake sale of around 7%?
Sorry, I couldn't get you. Can you just repeat?
Is there any time frame that you've set up for stake sale besides the promoter buying other stake sale of around 10% to 11%, is there any timeframe, or both the transaction will happen simultaneously?
So at present, there is no time frame, but we are expecting that it will happen at the similar time. This is what we are expecting.
I think we will come back to you in the offline because still I think the transaction how to happen if it is less than INR 171 after 6 months, we don't have a -- got a proper answer for that. So for that, we will talk to you separately.
Yes, offline, we can take up this question.
Thank you. I now hand the conference over to the management for closing comments.
Ladies and gentlemen, thank you very much for joining us in -- I suspect this is a record call for us, well beyond the 1-hour limit, discussing the performance of fiscal '22. Thank you very much for joining us this afternoon.
Let me conclude by saying that I think we're poised extremely well in both our business segments of sugar agriculture and engineering. All the various verticals are poised for significant growth. Within sugar, we're looking at an advancement of sugar price. Within our distillery segment, we're looking at capacities coming on stream and giving us higher revenues and profitability.
Within the power transmission business, we're looking to grow from strength to strength to further record revenues and profitability with expanded role in other geographies and global markets. And within our water business, we're anticipating the conclusion of water tenders that we have been waiting and anticipating through this COVID period and are focused that we will be successful in those tenders. So I hope that when we get back to you over the next few quarters, we're able to provide even better news on all these factors. Thank you very much for taking the time this afternoon. Good bye.
Thank you very much. On behalf of Triveni Engineering Industries Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.