Uflex Ltd

NSE:UFLEX

Earnings Call Transcript 2023-Q3

[Operator]

Ladies and gentlemen, good day, and welcome to the UFlex Limited Q3 FY '23 Earnings Conference Call hosted by Dolat Capital Market Private Limited. [Operator Instructions] Please note that this conference is being recorded.I now hand the conference over to Mr. Sachin Bobade from Dolat Capital Markets Private Limited. Thank you, and over to you, sir.

[Sachin Bobade]

Thank you, Lizan. On behalf of Dolat Capital, I welcome you all to the Q3 FY '23 Earnings Conference Call of UFlex Limited. Hope you all and your family members are staying safe and healthy. From the management side, we have with us Mr. Rajesh Bhatia, Group CFO and President; Mr. Anantshree Chaturvedi, CEO, FlexFilms Limited International; Mr. Apoorvashree Chaturvedi, our Director, EU Operations and Sustainability.Now I hand the floor to the management for their opening remarks, and then we would have question-and-answer session. Over to you, sir.

[Rajesh Bhatia, executive]

Good afternoon to all of you, and welcome to Q3 conference call for the earnings for the quarter 3. Overall, this quarter, I'll split into 2 parts. One is India, where we have seen a very strong growth momentum, and the offshore business, which is basically packaging films business where we have seen some softening, and we'll explain you the reasons for the same. And then it can be followed by Q&A.So let's first look at the positive aspects, which is India business where we've seen growth of about, volume overall growth of about 13% this quarter. And the packaging business has seen a growth of about 34%. Of that, the revenue for the business is up about 20%. EBITDA is maintained. And so that basically sums up the India business, where we've seen a strong momentum in the packaging business volume, which comprise of the flexible packaging as well as the aseptic packaging part of our business.And if we come to the consolidated numbers, yes, on a 3-month basis, we -- on a quarterly basis, while the income -- the revenue is almost maintained and it's marginally up by about 0.6% to about INR 3,496 crores. But the EBITDA has suffered to about INR 429 crores without any exchange fluctuation and which we compare with on a Y-o-Y basis, which is down by about 28%. This quarter we've seen unprecedented foreign exchange losses, both on account of devaluation by Egypt by about 22.3% from 27th of October. And also some of the translation and restatement losses, again which are most of -- which are notional because of -- but because we report our numbers in the routine format and translate from all the currencies, so dollar and then from dollar to rupee, we've seen a huge impact of about, aggregating to about INR 236 crores in this quarter. And that's the fine driver for the -- the reason why this quarter's numbers do not look good. Again, I'll say that most of that is notional only, the exchange losses. And we've seen some degrowth in the offshore business largely because of the 2 facts. One, we had forgotten during the COVID period that bottles [indiscernible] normal. And so one that realization, now that COVID is behind us is back to the reality. And normally pre-COVID this period of October to December is always [ soft ] as compared to some of the other quarters. So that realization, that reality check is now sitting in. But this reality check was also accentuated by 2 factors. One is the Russian-Ukraine war, which led to a huge increase in the energy cost for us as well as for the general consumers. And obviously, it hit the consumption as the consumer had to choose between eat and heat. And particularly this winter, their disposable income, they have to realign in terms of the higher energy costs, what the household had to pay. And also the higher EMI if they have taken any loans for housing or otherwise. So there has been a redistribution of the income and some of the discretionary spends have taken a hit and as a reason thereof we've seen some degrowth in the volume.The second reason is also, as [indiscernible] aggressive quality they are trying to combat inflation. We've seen in some of the -- and that has impacted that -- those very aggressive system policies ultimately affect the consumption at some stage or the other. But more than that, I think couple of countries where we are operating, like Nigeria, Egypt and all that, this dollar strength has ultimately led to a huge availability issues with respect to the dollar. And the industries or the businesses which are dependent on the imported raw materials and they sell locally, they were finding it very difficult to pursue dollars for the offshore procurement. Thereby, ultimately, if their volumes are affected and it's a whole chain, so somewhere it had to affect people like us also where if the overall economy is not doing so well, so the consumption also gets affected.Having said that, this is the quarter where we've seen the maximum impact of this lease losses, exchange as well as the -- some of the degrowth in the packaging film business globally. And we foresee that the current quarter will still be better in the Indian operations as compared to the previous quarter. And currently, we are operating at about 130% capacity utilization in our aseptic packaging business in the month of January. And the season has just started. So we see a very strong momentum in that business as well as our flexible packaging business, which in the month of January has reported the highest-ever volume ever. And so these 2 businesses are quite stable, and that's what diversification of the revenue streams in India has been very well demonstrated in this quarter whereby the films business suffered in terms of its profitability, while the other businesses, aseptic packaging, flexible packaging, inks, adhesives, chemicals, cylinders, they've all made up for what was the lower contribution by the franchises.Now offshore business is only a pure packaging films play, and that's where we see, once that business is down for the reasons I already explained. So we were there coupled with the exchange losses, I think that business has not done so well during this quarter as it was being in the previous 6 quarters. And but nothing that we are so worried about. Our market share, everything else, we've taken the opportunity to grow that in the -- in some of our difficult times? And surely, I think another quarter or 2, we'll be back on track in terms of our offshore business. And the India business will continue momentum both in the packaging, flexible packaging as well as in the aseptic packaging and also some of the intermediary businesses, especially the chemicals and cylinders. So that in a nutshell is the theme for the quarter 3 performance.And I think it's quite important to notice that while the industry, if you see all other players also, they reported also a lower number, both for the India as well as the offshore businesses. But that's where UFlex has differentiated from the rest of the players. As the other businesses, related businesses revenue streams has compensated for the loss of revenue and the profitability in the packaging films businesses.No doubt, the packaging films business is the largest for us. And the other businesses are much smaller as compared to this. But wherever we see an opportunity to do better, we'll do that. And we are looking to further debottleneck our existing aseptic packaging business to take it close to 12 billion packs year from the 9 billion packs per year run rate currently at which we are operating. And the order momentum is sort of pretty strong there, both in the domestic market and as well as in the offshore markets for this business.And there has been months where when the India season goes down, earlier there have been situations where your plant capacity utilization drops drastically, especially in the months of August and September onwards. But this year we've done, even in those nonseasonal months also we'll done better because we grew our export markets. And as a result of which now we expect that in the year '23-'24, we will see much of -- not much of seasonality going forward into this business as we ramp up our export market.Even at a 12 billion packs a year market, I would have reasons to believe that we'll have order book to serve the customers. And the market has been pretty good for, both for the flexible packaging as well as for aseptic packaging business. So that's in a nutshell is the key takeaway and -- from UFlex. And we are open to any questions on our performance for the quarter. Thank you.

[Operator]

[Operator Instructions] The first question is from the line of [ Saurab Sharma ], an individual investor.

[Unknown Attendee]

My question was regarding the aseptic packaging and why segmented information for that has not been provided, even though engineering activities has been provided, which is currently at a much smaller scheme than aseptic packaging.

[Rajesh Bhatia, executive]

I think there what we are doing is there we are guided by the account, and thus all the packaging activities and the packaging sales is taken as packaging activity. And engineering is of course a separate activity as required to be reported under the laws of the land. And that's how we will distinguish. But we also shy away from giving you a number on these 2 separately to be a bit confidential information. But we are happy to tell you the plant capacity utilization levels and you know the capacity. So in a way you are -- there is enough information for you to derive as to what kind of growth and the momentum we have in that business.

[Unknown Attendee]

So Bhatiaji profitability becomes a problem. So revenue of course is, one can derive that. But profitability of that 20% EBITDA is something that has been guided earlier, but then there are all kinds of variables that could change. And considering the fact that Sanand plant is a separate stand-alone entity and isn't really enmeshed in the other operations of the company and it having achieved a particular scale right now. So now it's just maybe a pointer maybe for the management to sort of consider going ahead. I understand there is confidentiality involved there. I mean if you could just give a sense of the profitability and that being separate because from your commentary also, it's been referred to as a separate growth driver. If it's a private company, it [indiscernible] private company, it's a separate issue, but for shareholders, minority shareholders, it becomes a bit of an added incentive to sort of invested in the company. So that was my little key thing about the segment information. The second question would be, how does the company plan to sort of take care of the debt situation going ahead. This quarter has been particularly harsh, profitability point of view, from the profitability point of view. So how does the company intend to handle the debt situation going ahead assuming things do not look up for some time? Because I'm sure, in addition to open lines of debt, there are also covenants that are not…

[Rajesh Bhatia, executive]

So can you concile your question? Can you concise your questions itself…

[Unknown Attendee]

So what does the company plan to do about the debt situation going ahead if profitability remains a problem in the near future in terms of debt covenants which are not public right now? So how does the company plan to handle the debt situation? Okay…

[Rajesh Bhatia, executive]

So I think the covenants are currently all under control. There are no issues with respect to any covenants. In our European businesses, yes, when we look at the trailing 12 months, we're still fine. We may have some issues on a quarterly number isolation basis. And whenever there are such scenarios, I think the bankers do understand that. And we'll be hopeful that we will get waivers from them because they also understand the situation in the European transaction particularly where the cost of energy has hit us, not only us, but across all the industry. And there is an impact on the consumption because of this. So they are very well supported of if there are any sort of covenants beat. As we said that, we expect that Q2 onwards we will have in the positive growth territory in our offshore business as well. But in case there are situations which prolong for the reasons which are not under our control, I think our entire stakeholders, which are bad lenders, I think they fully understand that this may lead to some breach in the local covenants which they are ready to sort of give us some more time to comply with those.

[Operator]

[Operator Instructions] The next question is from the line of Rushabh Shah from Anubhuti Advisors LLP.

[Rushabh Shah, analyst]

Sir, can you give the exact volume numbers for this quarter?

[Rajesh Bhatia, executive]

Which one?

[Rushabh Shah, analyst]

Actually, the packaging volumes, I think the last quarter, they were 1.5 lakh tonnes.

[Rajesh Bhatia, executive]

No. So this quarter, we did sales volume of close to about 140,000 tonnes.

[Rushabh Shah, analyst]

140,000 tonnes?

[Rajesh Bhatia, executive]

Yes. So that could be approximately 6%, 7% decline on a sequential basis, that would be correct?

[Rajesh Bhatia, executive]

Yes, yes, yes.

[Rushabh Shah, analyst]

Okay, okay. And with respect to our Dharwad project, the BOPET addition of 60,000 tonnes per annum, when can we expect that to come online?

[Rajesh Bhatia, executive]

I think we believe the trial runs are there. We have some situation on account of power over there. We were -- currently, we are on sort of our power which is the self-generated power. The mechanical consumption, I told you, has been completed for some time. The power issue is still getting resolved. But by end of March, 1st week of April or so I think we'll be up and running commercially on that facility.

[Rushabh Shah, analyst]

Sorry, sorry, I missed the number, date, by when?

[Rajesh Bhatia, executive]

End of March or 1st week of April, we'll be up and running, the phase.

[Rushabh Shah, analyst]

Okay. Okay. And just on the finance cost number. I think this quarter sequentially if we see, the finance costs has come in higher by 26%. So can you just revise the mix, that how much came in actually from higher finance cost and if you can share the absolute debt number which is outstanding as of 31 December?

[Rajesh Bhatia, executive]

So I think the debt number as on 31st of December what we have is of -- including working capital and long term, it is of net -- net debt is about INR 4,460 crores.

[Rushabh Shah, analyst]

INR 4,460 crores.

[Rajesh Bhatia, executive]

Yes. The working capital, this includes long-term, this includes working capital, everything, and less of the cash balance what we see.

[Rushabh Shah, analyst]

Okay. Okay. Got it. So we were planning to reduce debt by approximately INR 500 crores during this fiscal. So would that be done in the fourth quarter itself? Or this would go in next fiscal?

[Rajesh Bhatia, executive]

No. So I think you've got it wrong. What we said that there is amortization of the debt which is as per the agreed amortization should yield in the brand. So that is happening on its own on a quarter-to-quarter basis. So that's the number. But as we complete our Dharwad project, as we sort of spend more money on our Panipat project. So you will see that more or less those additional debts will get added on to the debt which has already been repaid. And that's where if you see on a quarter-to-quarter basis, the net increase in the debt is not too much.

[Rushabh Shah, analyst]

Okay. Okay. So do we expect debt to further increase on this level, maybe rough guidance.

[Rajesh Bhatia, executive]

Yes, it will go up slightly by -- will be repayments, will be fresh debt added. So I think based on the current plans that we have, we do not expect any debt -- any substantial numbers to be added on. So what we was added on is almost the same number is what we are looking in terms of amortization payments. So there's nothing any alarming on this account, which will get added on the debt numbers.

[Rushabh Shah, analyst]

Makes sense, makes sense because after Dharwad and Panipat, I believe there are no significant effects coming up except some small recycling plants, correct no?

[Rajesh Bhatia, executive]

Yes, yes, yes.

[Rushabh Shah, analyst]

Okay. Perfect. Sir, just last one question. So any guidance on the margin front? Maybe going ahead, maybe next 1 or 2 quarters are challenging, but any broad long-term margin guidance that you can share with that?

[Rajesh Bhatia, executive]

Difficult at this stage. I think we have to see the Q4, especially in terms of offshore business. India also there has been some extra capacity which has come. So it's finding its place in the market. So the market is readjusting itself. I think, see, the next quarter, I will not see any huge impact of some of these on the margins except that some of the exchange losses and all, that may not lead to that magnitude. Having said that, I think the Q4 will set the tone for the FY '24, and that's a better time to give you guidance for FY '24. The first and the foremost is that we should look to recover the lost volume. While we know that the overall volumes have shunned, I think the guidance from the top management is to sort of strengthen the market share. UFlex is much stronger, whether financially or otherwise in terms of gaining and retaining the market shares in whichever markets we are. So the present momentum is that whatever are the numbers that we have lost in this quarter for the volumes, I think we can make up for that and then look for as to what should be our margins, as to how do the margins settle in each of the territories that we operate in. So currently, I'll abstain from giving any guidance because -- but I can tell you that the January month has been -- or the mid -- after middle of February it's been much better than the last quarter in terms of the numbers.

[Rushabh Shah, analyst]

Okay. So any color on current OpEx spreads? Have those remained at the same level as of 3Q? Or there is some improvement?

[Rajesh Bhatia, executive]

No, it's at the same level.

[Operator]

[Operator Instructions] The next question is from the line of Kaushik Poddar from KB Capital Markets Pvt Limited.

[Kaushik Poddar, analyst]

In your BOPP and BOPET there is a good amount of capacity that has come. So will that not result in margin reduction even next year also?

[Rajesh Bhatia, executive]

I don't think so there's any more room left to reduce the margin in both of them. I think whatever is the demand side is there, people will look to realign their production because if the market is of size X, you produce 1.3X. That's not going to better absorb this because you produce and you sell cheaper and all that. So I think the margins have hit the lowest level in the Q2, in the Q3, And here on it's only positive developments that we are expecting on the margin side, it's not in Q4, definitely in Q1.

[Kaushik Poddar, analyst]

So can we take it the 13% margin, if you leave aside this exchange loss, that is the bottom-most margin we can expect from you?

[Rajesh Bhatia, executive]

I think if we take out the exchange loss for the 9 months period, we are at about 14.5% for the 9-month period. So I think for the year as a whole also, we should be slightly better than this. But next year, I think we'll be able to give you any guidance only after what we see, what we do in Q4, only then we'll be able to guide. But for the 9-month period, it's a 14.5% EBITDA margin, excluding any exchange losses. But if you see EBITDA after the exchange, yes, it is about 13.1% for the 9 months period.

[Kaushik Poddar, analyst]

Okay. Okay. So 14% is the bottom-most we can expect, a normal level?

[Rajesh Bhatia, executive]

Yes.

[Kaushik Poddar, analyst]

I mean at worst we can expect 14% EBITDA margin?

[Rajesh Bhatia, executive]

No, EBITDA for the quarter is lower. EBITDA for this quarter obviously is lower as compared to the first 2 quarters. So [indiscernible] we were to replicate our performance, what we had in this quarter itself. So we are looking at an EBITDA of about say INR 2,100 crores for the year as a whole, with the top line of this -- so about 13.8% or so. So there'll be -- that's what it looks like without any exchange, negative or positive, whatever they…

[Kaushik Poddar, analyst]

Okay. And when is this expansion of your aseptic packaging to 12 billion units going to take this?

[Rajesh Bhatia, executive]

That will take time. So not in this season, definitely in the next season we have.

[Kaushik Poddar, analyst]

But currently your run rate is 9 billion units, is it, on a monthly basis -- on a yearly basis, on an annualized basis?

[Rajesh Bhatia, executive]

So that's based on more or less 45 days of operations in the calendar 2023.

[Kaushik Poddar, analyst]

Okay. And this drop for this, the paper-based drop for this Tetra Paks, have you been able to make it, operationalize it?

[Rajesh Bhatia, executive]

Yes. So those challenges are taken care of. And there is no effect of that on the business.

[Operator]

[Operator Instructions] The next question is from the line of Chirag Singhal from First Water Capital.

[Chirag Singhal, analyst]

So first question is on the Asepto. So you mentioned that you're increasing the capacity from 9 to 12 million bags in, from the next season. But given the growth that you have posted in Asepto, in a post commissioning of the second line, even this new 3 billion that may run out in the next 1 to 2 years. So are you already instituting any expansion plans in terms of brownfield, greenfield for the Asepto division?

[Rajesh Bhatia, executive]

Nothing on the anvil as of now. So right now, what we are concentrating is on the low-hanging fruits. And the lowest hanging is that if you can do from 9 to 12 without any substantial investment, I think that's the way to go. Nothing firmed up on any subsequent green or brownfield expansion as of now.

[Chirag Singhal, analyst]

Okay. And what about the margins? In the past, you have mentioned that Asepto trended roughly about 20% to 25% of EBITDA margin. So going forward also…

[Rajesh Bhatia, executive]

-- about 20% or so, 20%?

[Chirag Singhal, analyst]

So 20% is a sustainable margin going forward?

[Rajesh Bhatia, executive]

Yes. It looks like there will be bits and -- ups and downs, season versus non-season, but a blended average of 20% would be a good estimate.

[Chirag Singhal, analyst]

Okay. Okay. Right. Sir, my next question is on the interest cost. So interest cost, especially if I look at the concern on the stand-alone, that has gone up substantially. So it is INR 40 crores in the previous quarter, which has gone to roughly INR 65 crores in the Q3. So is this because of the higher cost of debt? Because I think most of your expansion in the overseas has been commissioned. None of the expansion would have been commissioned in Q3. So is this because of the cost of debt going up?

[Rajesh Bhatia, executive]

Both factors. One is the cost of debt has gone up, especially if you look at Nigeria, where we had -- it's almost doubled, the cost of debt. When we look at even the dollar-denominated or euro-denominated debt, there -- while we the spread is fixed, but the SOFR or other benchmarks have gone up. So first is that. And second is we commissioned the CPP facility in Dharwad, we commissioned the CPP in Dubai as well. So those 2 extra capacity is coming on stream and wherever there was a CapEx related, those things having come on stream. So that interest cost has been added. But a very large part of the increase this quarter has been on account of Nigeria increasing its interest rate substantially. So on an overall level, if you can give the cost of debt that we can work with for the coming fiscal in the Indian business as well as in the overseas business, what will be the cost of debt?

[Rajesh Bhatia, executive]

So if you see current quarter on a consolidated basis, our debt is INR 133 crores. So if we -- divided by 4,500 [indiscernible] so it's about 12%. And India debt rates have also gone up. There also there is some impact, but because we have not added any substantial debt in India. So India number is INR 45 crores this quarter. Last quarter was INR 41 crores. A year before it was INR 40 crores. So the impact is not much in the India business because that number there itself is not very substantial. So -- but in India, whatever is the impact of the debt, that may be largely because of the increases we've seen in the last 2 quarters? And the CPP at Dharwad coming into the commercial production and that number adding to the interest cost.

[Chirag Singhal, analyst]

Okay. This INR 500 crores of debt that you mentioned, this is the net debt, not the gross debt?

[Rajesh Bhatia, executive]

This is the net debt.

[Chirag Singhal, analyst]

Okay. Okay. All right. And how are you looking at spreads in especially in the overseas operations? Because as far as I understand, most of the BOPET capacities that have come up is mainly in China and India especially. So are you seeing like stronger spreads in the overseas operations? And do you feel that it has bottomed out and you're already seeing some sort of an improvement in the coming quarters?

[Rajesh Bhatia, executive]

I think that's what I said to begin with, looks like that Q3 was the worst. A lot of factors came together to -- so I'll have to use the word probably the entire universe conspired to reduce the margin. We had raw material costs going down. Obviously you carry some inventory all the time. So there are inventory losses which are built into this. The raw material prices came down, so did the finished goods prices, the consumption came down that led to the price, still more pricing pressures. So I think everything, that extra capacity came on, came on soon and people all -- everybody vying in for the reduced shelf space. So all that has happened in the Q3. And probably, that's what I said earlier. The worst seems to be over. And Q4 and Q2, Q1 onwards, we look for better volumes as well as the margins, both in India as well as offshore.

[Chirag Singhal, analyst]

Okay. All right. So one last question before I join back in the queue. This INR 30 crores of total ForEx impact, which we saw in Q3, so was this still notional impact? Or I mean, was this like a noncash loss?

[Rajesh Bhatia, executive]

I think most of it is noncash loss. So there are, like Egypt devalued its currency twice in the last 12 months. So that INR 85 crore, INR 84 crore impact is taken as an exceptional item. But the impact on the currency on account of 2 reasons [indiscernible] one is the translation losses when you work in a particular country in the local currency and then you convert that into dollar and then from that dollar to rupee to your reporting currency. So those kind of things are mostly notional in nature because your effective currency remains local currency. And you have the surpluses there which you keep on reinvesting there in those markets. Or Egypt's kind of a devaluation ultimately helps you also because any devaluation largely means while it has an impact of a shorter tenor on your number. But it insulates you from any onslaught of imports into that, imports into that country. So I think we're not too worried about because we work in all these countries. So -- and we have that -- we have to take those currency fluctuations into our side because we simply can't work in the dollar. Like in India, you can't sell to a customer based on the -- in the dollar value. And so is Egypt, so in Mexico, so is Nigeria [indiscernible]. But if you convert those numbers back into the dollars, obviously the [indiscernible] from a different [indiscernible]. But most of this would be, a substantial part of this is notional only.

[Operator]

[Operator Instructions] We'll move on to the next question that is from the line of Abhimanyu Rathore from [ KC Advisors ].

[Abhimanyu Rathore, analyst]

So my question is on the aseptic packaging business. Sir, given the growth that the business division is registering and the margin profile, I just wanted to understand that, is there any internal discussion on delisting the business as a separate entity or a subsidiary? Or what are the plans for the division going ahead?

[Rajesh Bhatia, executive]

I think given the current size of the business, we don't think that there'll be any opportunity here to keep, to separate this business. We will surely look at the markets for the next couple of years. And if there are any capacity expansions that we announced, to ensure that we gain, we look forward to strengthening our position in India as well as the kind of impetus we've got in the overseas markets. So at that point in time, when it becomes really a substantial business, yes, they may be thought. But if you ask me, really, at this stage, no, there's no way that you will consider separating this business.

[Operator]

[Operator Instructions] The next question is from the line of Rushabh Shah from Anubhuti Advisors LLP.

[Rushabh Shah, analyst]

Yes. So any update with respect to listing of our overseas subsidiaries?

[Rajesh Bhatia, executive]

Okay. So I think we've been in touch with our bankers, and currently there does not seem to be any opportunity. But going forward, in Q3 of the calendar FY '23, we'll again reassess the situation. That remains on cards for us. And with that, we've done a lot of work in the past. The audits or other things, we've done enough. And as and when there is an opportunity, we will surely look at those markets, but Q3 is the earliest. When I said Q3 is '24, FY '24 is what I mean with that.

[Rushabh Shah, analyst]

Okay. Quarter 3 FY '24?

[Rajesh Bhatia, executive]

Yes, quarter 3 of FY '24.

[Operator]

[Operator Instructions] There are no further questions. I now hand the conference over to the management for the closing comments.

[Rajesh Bhatia, executive]

Okay. Thanks, everybody, for being on the call. And [indiscernible] surprised by what happened in Q3 in terms of the packaging films business, especially overseas. And fortunate that because of the diversified nature of the business, elsewhere the business was strong. There are exchange losses which are not in our control. And there are transmission losses as well as the losses when you convert the liability from a certain currency into the reporting currency, which is rupee, which are again mostly the notional losses. So I don't sort of -- I look at this quarter's performance from a positive perspective indeed, looking at packaging business, flexible packaging, which has not been doing well in the few years. Aseptic packaging business, which is breaking the barriers. And as we look at finding opportunities from the existing plant as to how do we increase and utilize the plant more to deliver more. Through the offshore markets, where aseptic business is now making a good stronghold so that the nonseasonable -- when there is nonseason in India, we're still able to utilize the plants fully. So there have been more positives. There have been negatives, which are more market-driven, and situations arising out of the aggressive U.S. Fed policy as well as the Russia-Ukraine conflict. And which we have reasons to believe that [indiscernible] another quarter even those numbers will be back on the track. That's what in a nutshell is the Q3 about and the guidance for the Q4. Beyond that, currently we are not in a position to sort of give you any further insight. We can only say that in terms of the business that India business is insulated from the rest of the world currently. And we'll continue to do so for the Q4 as well as for the FY '24 as well.

[Sachin Bobade]

Thank you, sir.

[Rajesh Bhatia, executive]

Thank you. Thanks, everybody on the call.

[Operator]

Thank you. Ladies and gentlemen, on behalf of Dolat Capital Market Private Limited, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.