GHCL Ltd (NSE: GHCL) Q3 2025 Earnings Call dated Feb. 03, 2025
Corporate Participants:
R.S. Jalan — Managing Director
Raman Chopra — Chief Financial Officer and Executive Director, Finance
Analysts:
Meet Vora — Moderator
Aditya Khetan — Analyst
Nasir Hussain — Analyst
Saket Kapoor — Analyst
Unidentified Participant
Gaurav — Analyst
Janam Gilani — Analyst
Sanjana — Analyst
Vignesh Iyer — Analyst
Khushwant Pahwa — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the GHCL Limited Q3 FY ’25 Earnings Conference Call hosted by Emkay Global Financial Services. As a reminder, all participant lines will remain in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal the operator by pressing star then zero on your touchstone telephone. Please note that this conference is being recorded. I now hand the conference over to Mr Meet Vora from Emkay Global Financial Services. Thank you, and over to you, sir.
Meet Vora — Moderator
Thank you. Good afternoon, everyone. Thank you for joining us on GHCL’s Q3 FY ’25 results conference call. I would like to welcome the management and thank them for giving us this opportunity to host them. We have with us today Mr. Jalan, Managing Director; Mr Raman Chopra, CFO and Executive Director of Finance; Mr Manuj Jain, General Manager, Investor Relations and Finance. Before we begin this call, I would like to point out that some statements made in this call may be forward-looking and a disclaimer to this effect has been included in the earnings presentation shared with you earlier. I shall now hand over the call to the management for your opening remarks. Thank you, and over to you, sir.
R.S. Jalan — Managing Director
Thank you, Meet. Thank you very much. Good afternoon, everyone. Welcome to the GSL earnings conference call for the 3rd-quarter ended 31st December 2024. Our results and the presentations are available on the stock exchange. Along with me, I have Raman, our Executive Director and CFO; and Manu Jain in Finance and Investor Relations.
Q3 had been a healthy operational performance as we delivered in a moderating external environment. Our business approach prioritizes the operational excellence across procurement, production and marketing. We have reported better production volume and have seen better cost-control outcomes following our focus on efficiency. This has transpired into healthy financial performance in Q3.
Let me share a brief perspective on the environment. In India, demand growth for soda ash has been better than the global markets. Concurrently, we have seen higher-volume of cheaper imports coming into India. We expect the domestic demand and pricing scenario to be at bottom and demand should improve going-forward due to the combination of following factors: MIP, minimum import price on soda ash, which will provide price protection from unchecked cheaper import coming into India. The second, imposition of duty on import price of solar glass, boasting domestic production. And the third, growing push for renewable energy, Union Budget has increased allocation towards solar power sector. This has — this help benefit the demand of soda ash, which is in essential for manufacturing solar glass. In the external context, the Western economic faces suppressed demand for soda ash owing to the adverse consumption in spend and poor business sentiments.
China has witnessed strong demand growth of 10% in 2023 and 19% in 11 months of 2024. This has now started to moderate. As a result, prices have been subdued. Through all of this, we continue to focus on our strength in order to deliver optimized performance. We are confident that the GSL is well-positioned for the future and as the industry and economic activity picks up, our performance will further improve. On the growth initiative, our strategic projects are progressing well. We have received environmental clearances for the project. Work on this and our new salt field in Gujarat is underway. These projects will take around three years of completion. Commissioning of both our vacuum salt and the initial bromine project plan, in 2026, it will get completed, which will diversify our product mix.
These programs has been planned to strengthen our ability to deliver a healthy performance in all operating environments and to drive predictable momentum. As always, we are committed to driving shareholders’ value through strategic action and consistent execution of our plan. Thank you for your continued support and confidence in GSL. I will now invite Raman to provide further details on our financial performance.
Raman Chopra — Chief Financial Officer and Executive Director, Finance
Thank you, sir. Good evening, everyone, and a warm welcome to our earnings call for the 3rd-quarter ended 31st December 2024. We have reported strong results on the back of higher utilization, operational excellence and cost-control measures. This has resulted in better margins, higher profitability and a strong and healthy balance sheet. Revenue for the quarter came in at around INR807 crore, which is more or less the same as compared to INR813 crore in the corresponding quarter of the last year and INR810 crores compared to Q2 of this year.
The operating revenue were impacted by cheaper imports into India. EBITDA for the quarter stood at INR259 crore as compared to INR165 crore in Q3 of FY ’24 and INR228 crore of in Q2 of this year. For the quarter, EBITDA margin came in at 32% compared to 20.3% in Q3 of last year and 28.2% in Q2 of FY ’25. Our margins increased due to higher production, operational efficiency, reduction in input costs, resulting in overall lower costs. PAT from continuing operations increased from INR168 crore compared to INR100 crores in corresponding quarter of last year and INR155 crore in Q2 of this year.
For nine-month period ended 31st December 2024, we generated INR556 crores in cash profit-after-tax. Out of this, we have spent around INR240 crores on capex, around INR114 crores on dividend to the shareholders, around INR82 crores towards the payment — repayment of loans, while working capital released around INR20 crores. We are a debt-free company with cash and investments with our cash and investments stood at around INR1,036 crores and a net cash surplus of INR920 crore as of — as at the end-of-the quarter.
With this, I conclude my comments and would now request the moderator to open the forum for questions-and-answers. Thank you. hello are you there?
Questions and Answers:
Operator
Hi sir hello. Yes, sir. Sorry. All right. So ladies and gentlemen, we will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use your handsets while asking a question. Ladies and gentlemen, we request you to restrict to two questions per participant and rejoin the question queue. Thank you. One moment please. While we poll for questions. The first question comes from the line of Aditya Khetan from Smith Institutional Equities. Please go-ahead. Yeah, hello, sir, and thanks for the opportunity. Sir, my first question was onto the soda ash side. As there is an imposition of MIP into the — so domestic soda ash market. Sir, if you can help us understand out-of-the total imports, how much imports like were — were below the MIP? And with this imposition, you think like the pricing itself will come up or the imports quantum also can go down?
R.S. Jalan
Yes, Arik, you had two questions. One is that whether any import which was coming are below the MIP price, number-one. Number two, whether this will help to improve the price or that will improve the quantum of reduction into the import of the volume. See, at this point of a time, our understanding is that definitely this MIP will help to kind of down the import volume. And this will be getting reflected in next maybe one or two months because some of the import which has already been kind of contracted. Some of the country from where these volumes are coming cheaper than MIP prices will definitely get kind of a reduce. I personally believe that improvement in the price may take a little longer time, but the volume benefit should start accruing going-forward maybe in a month or two.
Aditya Khetan
And sir, how much proportion of the total imports were below the MIP earlier?
R.S. Jalan
We don’t have — Adity, at this point, we don’t have a data that whether the volume was kind of below the MIP price, how much volume was there because these prices were very volatile and therefore, it is very difficult to predict that how much volume was there below the MIP price. But benefit which we will be getting because of this MIP, the price will get stabilized now.
Aditya Khetan
Sure. Sir, onto the numbers, if we look so this quarter improvement in your gross margins and the EBITDA margins is largely led by the reduction in the raw-material prices only. Any idea, sir, like which is the major raw-material like I believe salt is the major raw-material? And if there are others like so which raw-material has seen a big dip in this quarter.
R.S. Jalan
See, Adity, there are two — three or three reasons for this improvement in the margin. One is that if you look at quarter-on-quarter, I mean, as compared to the last quarter to this quarter. One is the volume of production has gone up. That’s number-one. Second is, it’s not the price of the — of the raw-material PC, all our operational efficiency, which we have been able to build. So it is not a question of price reduction in the raw materials, it’s primarily because of the efficiency of the operation. And the various measures which we have taken in improving our cost-efficiency.
Aditya Khetan
Okay. But sir, the volume jump is not reflected in the top-line. I believe top-line is subdued only when we look on Y-o-Y and on quarter-on-quarter basis. But the raw materials definitely like there is some change which has happened. Is it largely because the improvement in the product mix, you mean to say like the product mix towards sodium carbonate has improved by carbonate and that is why it has improved.
R.S. Jalan
No, Adity like I said, if the volume of production goes up, obviously, the efficiency and the other measures which we have taken for improvement into the efficiency has led to the reduction in the cost. However, the volume, as you rightly said, volume quarter-to-quarter small variation will be there and volume has not dropped also. This is primarily because of the cost-reduction measures, the margin has improved.
Aditya Khetan
Got it. Just one last question on to the bromine business. Sir, we are maintaining from the salt — from this — so from the recently-acquired salt parcel, that would be completely used for captive and what is the outlook onto the bromine business for the next two years?
R.S. Jalan
Yeah. At this point of a time, we have a — the process of the new land which has been allotted to us. The work has started on the survey side and it will take around three years of time to get completed that project. And this will primarily be used for our captive consumption. The number two, you said bromine outlook. See bromine at this point over-time, our is setup, which is a very small volume of approximately around 2,500 to 2,800 tonnes, which will start by September, October. We are in the process of marketing out those products and obviously, we will be selling to the — mostly into the export market.
Aditya Khetan
Got it, sir. Thank you, sir. Thank you.
Operator
Thank you. The next question comes from the line of Nasir Hussein from Research Advisors Private Limited. Please go-ahead.
Nasir Hussain
Hello. Am I audible?
Operator
Yes,. Please go-ahead.
Nasir Hussain
Yeah. Hi, sir. Thank you for taking my question. I just have two questions. One is, could you help me with the EBITDA per ton for this quarter and capacity utilization?
R.S. Jalan
So, broadly we are almost 95%, 97% kind of a utilization. And EBITDA per ton, we don’t have a specific number of EBITDA per ton. We have given the number on the basis of — on the percentage of EBITDA, same.
Nasir Hussain
Okay. All right, sir. Another question is that since we are already maxing out our current capacity, when can we expect to further expansion or is there any plan for debottlenecking?
R.S. Jalan
Yes, the plants are already there. Like I said, blomine project is there, the vacuum salt project is there. In terms of the soda ash also, we are trying to maximize the volume if it is possible. The team is working on that. And hopefully something will come out of that. And as soon as it comes out, we will report back to the shareholders.
Nasir Hussain
Okay. Thank you. That’s it from my side.
Operator
Thank you. The next question comes from the line of Saket Kapoor from Kapoor; Company. Please go-ahead.
Saket Kapoor
Sir, in your presentation, you have alluded to the key drivers going ahead, growth drivers. If you could dwell more further into the same, what are they and how are they going to improve the EBITDA in the long-run? Presentation, page number 12, you have spoken about vacuum salt, bromine project, the greenfield project and the raw salt production. If you could just spare a minute and explain the benefits which with the company and organization would derive going ahead in the near-future.
R.S. Jalan
See, Sake, as you rightly said, the vacuum salt and the bromine project, we have already explained in the earlier calls as well that these are the two value drivers which are in the near-future. And particularly if you look at the vacuum salt, we are generally going to produce this vacuum salt from a waste energy. That means the conversion cost of that where lot of energy is required will not be there. The margins are reasonably good in that. So-far as the bromine project is concerned, that also work has started. That also on the existing location, which is kind of I would say is the trying to take gold out-of-the existing processes. So that project also will add to the kind of a good EBITDA margin or addition to the total value. Of course, the greenfield and the raw oil production is a slightly longer-term view and that will happen in next three years of time. And all put together, definitely this will improve the margin of overall business margin will improve. How much it will all depend on when it gets executed and how much kind of a market situation at the time. All these things will get added, but definitely this will give you a better basket of the product and this will also add some additional margin to the business.
Saket Kapoor
But for vacuum salt and the bromine project just to conclude for this part, for vacuum salt, the — that will get commissioned for FY ’25, ’26 itself or both these projects will also benefit in FY ’26.
R.S. Jalan
No, this all both the projects will get commissioned in ’25, ’26, one will be approximately around July and the second one approximately around September.
Saket Kapoor
July 25 and September ’25.
R.S. Jalan
Yes. Correct.
Saket Kapoor
Sir, and when you were mentioning about the efficiencies that have been factored into our numbers and the improved EBITDA, so firstly, sir, these are the permanent efficiencies that we have built into the system or there’s any one-off because we see our other income also contributing significantly on a Q-on-Q basis, it has gone up from INR17 crores to INR29 crores. So this is I think the treasury operation, yeah.
R.S. Jalan
Yeah, you are right on that. Let me explain two points. One, like I said, the cost initiatives, lot of work has been done and you know that last couple of years, the way the management has worked on the cost efficiencies. That is definitely giving us a benefit on the — overall our margins, okay. And that journey or the sustainability of those cost initiatives will be permanent in nature. In terms of the other income, as you rightly said, other income has two components, one is the — what you call one, it’s an office in the — in what you call-in Mumbai we had that we have sold that has added to a 1% on the EBITDA margin. So that’s a one-time. The second is your treasury income and that is also added. Treasury income will be more like a kind of — it will continue for the time-being till the new greenfield project comes in. So maybe you can say 1% of the other income, which is a one-time can be — can be can be lower on this. But other cost initiatives will continue. How much that will get translated into the margin and how the market dynamics will be there in the coming quarters that we have to watch out. You know the volatility in the market overall. But our execution and our initiative on the — on the efficiencies will continue.
Saket Kapoor
Sorry, just to conclude, sir, for the Mumbai office, what have been — how much have we realized and what have been the gain?
R.S. Jalan
See, there was a small office, which I think around INR8 crore to INR9 crore kind of a number we have got what you call benefit out of that, right, Aman? Right. Approximately around.
Saket Kapoor
INR8 crores we have realized out-of-the same.
R.S. Jalan
No, no, INR8 crores is the benefit we got.
Saket Kapoor
A profit. Right. Okay. Okay, sir. And although it is — it is evident that the cost efficiencies for which we are working perpetually have started — we have started reaping benefit. But when we look at the power and fuel water expenses line-item, there are — there is fluctuations in the same. If our volumes have remained flat Q-on-Q, what explains this increase
R.S. Jalan
Number has to be looked at from the production perspective? Production in this quarter has gone up.
Saket Kapoor
Okay. So that is — we are carrying inventory currently then, sir, because the volume purchase — the inventory side has gone up. That is understanding is correct?
R.S. Jalan
Yes. Okay, sir. And lastly, sir, did you have — a second. I will join the queue again. Okay.
Operator
Thank you. The next question comes from the line of from. Please go-ahead.
Unidentified Participant
Yeah, hi. Good afternoon and thank you for taking my question. And sir, what I wanted to understand is that you know our greenfield soda ash project will I think, commission in about five to six years, right? Is that correct?
R.S. Jalan
No, it’s three years.
Unidentified Participant
Three years. Okay. And raw salt will be in three years also?
R.S. Jalan
Yes.
Unidentified Participant
Okay. So for the next three years, therefore, our volume growth drivers are going to be any debottlenecking that we do in our existing capacity plus the vacuum salt and the bromine projects, right?
R.S. Jalan
Yes.
Unidentified Participant
Okay. So sir, is there any indication you could give as to how much is — you know, let’s leave the debottlenecking aside because that may be difficult to predict immediately, but how much is the vacuum salt and bromine likely to add to our EBITDA were to be commissioned fully?
R.S. Jalan
See, our understanding at this point of a time is that the bromine and the bromine will give us approximately around 40% to 50% EBITDA margin, the revenue of the bromine. Okay. And the revenue will be in the range of around INR60 crore, broadly, I’m just give INR50 crore to INR60 crore kind of a number.
Unidentified Participant
INR50 crores to INR60 crores per annum or per quarter.
R.S. Jalan
No, no, per annum. We say small volume, 2,800 tonnes. We are talking about only for this existing 2,800 tonnes what we are planning to produce in the current year ’25, ’26 will give approximate around INR100 crore INR120 crores once the fully operational — operations are being established around INR100 crore, INR120 crores and the EBITDA will be in the range of around 30% to 40% on this volume/
Unidentified Participant
30% to 40%. Okay. So that means roughly we’re looking at, say, maybe INR35 — say INR40 crores coming in from the vacuum salt project and maybe about INR20 crores INR25 crores coming in from the bromine project.
R.S. Jalan
I think so. Yes,
Unidentified Participant
So that means our — our growth in our profits is really going to be dependent on the price increases that happen in the soda ash, right? Largely. Okay. And sir, compared to where we were a year-ago and two years ago, if our prices of soda ash are say 100 today, what was the price a year-ago and what was it about two years ago?
R.S. Jalan
See,, if I can say in terms of the soda occupancies, you’re talking about this little bit medium-term, let me give you some perspective of how do we look at this business and how the margin has been — been over a period of last many years. Yeah, first and foremost, EBITDA per ton has been growing every year-by year, except maybe in last one or two years because of the volatility in 2022, ’23, because of that abnormal situation, the EBITDA percentage of EBITDA per ton was significantly higher. But if you look at FY ’22 versus FY ’24, we are significantly higher in terms of the absolute EBITDA and even it — in terms of the percentage of EBITDA also. In FY ’22, our EBITDA was approximately around INR740 crores. Hopefully, has given the number. In FY ’24, it was INR900 crores. Okay. And so actually — and if you look at FY ’21, it was INR400 — roughly around — I’m giving again numbers roughly around INR500 crores. So INR500 crores to INR750 crores and then to INR900 crores. That’s where the number — if I remove this FY ’23, which was an abnormal period, this is the way the number has gone. Right. I hope I’m clear on this.
Unidentified Participant
Yeah, yeah. So sir, here there was also some element of volume growth that you would have seen, right, in these — in this period. My question is that now we are at about 90% 95% capacity utilization. So whatever volume growth we get from here will be — cannot be very large, right, because we’re going to try to get back from brownfield expansion or efficiencies, et-cetera. So it’s likely to be, I’m just guessing maybe 2%, 3%, 4% or under 5%. So our key issue — a key driver and given the fact that we have seen pricing pressure on our soda ash also, would it be fair to say that our main driver will now be a recovery in soda ash prices.
R.S. Jalan
Ma’am, there will be two possibilities and there are two-ways — two points where the recovery will happen. One, as you rightly said, recovery in the pricing of the soda ash, which likely should happen because the overall globally the way the pricing at this point of a time is there will not be a long-term sustainable prices. That’s number-one. But the second, which is again very important, which is in our hand, which we have been driving for over a period of time, like you have seen in this quarter also, there was a kind of a significant cost optimization and that will be another area of kind of expanding your margin per ton as a the percentage of margins.
Unidentified Participant
Right, right, right. No, that I appreciate. And I think congratulations to your team that you’ve been doing this consistently year-after year. So I do understand that. What I was trying to understand was that, see, from an external environment point-of-view, if, say, the volumes recover hugely in soda ash, we may not be able to participate completely because we are kind of maxed out on our capacity, right? So what benefits us from any improvement in the external environment is really the pricing yes, is that?
R.S. Jalan
Very right. Yeah.
Unidentified Participant
Okay. And when prices go up, does that also lead to a commensurate increase in raw-material prices?
R.S. Jalan
No, these are not the two interrelated things. Cost has a different, what do you call different equation and the pricing of soda ash is a different equation. Right. Okay. If I say two things like one of the understanding what we have is that today the Chinese soda ash prices are below the cost of production of China. So this gives some kind of understanding that the recovery in the soda ice prices should happen. And the benefit to us will definitely come of course, in terms of the volume, it will not come, but — but in the overall margin definitely this will happen.
Unidentified Participant
Right. And sir, what about the imports from Turkey and to remain sort of subdued, right? And that’s where a lot of the imports were also happening. So how do you see the scenario from those markets?
R.S. Jalan
See, our understanding at this point of a time is that the — at this point of time, the imports are happening in a major way. And as I mentioned in my opening remarks, this MIP definitely will put a kind of a roadblock on the larger volume. Of course, the volumes will come in coming in. But overall, if the global soda ice prices because of China, Asia kind of a, 40% 45% of the volume, right? China has a kind of some recovery into the pricing, definitely that will have an impact on the global pricing and that will help us.
Unidentified Participant
Okay. Thank you. Thank you very much.
Operator
Thank you. The next question comes from the line of Gaurav from Capital Farming Consultants. Please go-ahead.
Gaurav
Thank you for giving me an opportunity. I hope my voice is audible.
R.S. Jalan
Thank you. Yes,. We can hear you loud and clear.
Gaurav
Thanks a lot for confirmation. So just building on the last question that ma’am was asking. So if we say that the current of ongoing prices in the Chinese market is far below the cost of production. And as a supplier, as a manufacturer, you also feel that the ongoing prices are not sustainable in the medium-to-long term. So just a hypothetical question just to get a sense of the expectation. And as a producer, what do you think that the sustainable prices could be vis-a-vis the ongoing prices? That is my first question, if you can help
R.S. Jalan
So Gaurav, I don’t think I’ll be able to answer these questions in a rightful manner because the hypothetical question is not — I would be restrained to kind of answer that question. But like I said, hopefully the things should start recovering because the overall one scenario in India, as I mentioned, the demand growth likely in ’25, ’26 should be significantly higher because of the flow — your solar glass consumption will increase. So overall demand in India will in — should increase significantly. And even in the globally, since the soda ash are being sold at this point of a time is below the cost in China, that should also lead to kind of some increase in the pricing, but how much I don’t think we will be in a position to answer that.
Gaurav
No worries. Thanks a lot. So my second question is, since we are — most of our production is being sold-in domestic market only, right? And now MIP in-place, right? So based on your study, based on your study how much more market-share we can gain because now since you are saying that MIP being in-place, probability of imports in our country would go down, right, and there will be a — there might be an opportunity that we might gain the market-share. So what is our current market-share and to what level it can go up.
R.S. Jalan
Gaurav, as you rightly said, our volumes are not going to go up and therefore the market cannot increase. Market sales will remain almost same.
Gaurav
Okay. Okay. So volume-wise, you are saying our market-share wise due to this MIP, no much benefit is expected to us. Only benefit that we can expect is that increase in price, right?
R.S. Jalan
Right.
Gaurav
That’s great. Last question from my side. Since we have expanded our capacity of sodium bicarbonate from 60,000 tonne per annum to 120,000 ton per annum in last financial year. So in current financial year reported nine months numbers, what would be the revenue contribution from sodium bicarbonate capacity in terms of percentage.
R.S. Jalan
Right, you said our numbers will be likely to be around 100,000 this year in terms of the volume.
Gaurav
In terms of last year?
R.S. Jalan
I don’t have an easy number right now. One 10th, around 10%, 9%. 9% to 10%.
Gaurav
9% to 10%. Okay. If the last one, just to understand in the emerging applications, we have also mentioned that the battery manufacturing for electrical vehicles, but we have seen that most of the electrical vehicle batteries are around the lithium-ion technology only, right? So any major development of research that is happening or the — which gives us a promising a maybe say somewhere down the line one year, two-year, three-year down the line that which can boost consumption of soda ash in a significant manner and any such thing you have heard about and you would like to share with the investors and analysts on this call. Am I audible?
Operator
Yes you are audible
Gaurav
Okay I’m not sure if I was able to able to convey to the management or management is on all.
Operator
Give me one moment. I’ll have a check on that. Ladies and gentlemen, we have lost the line of the management. Please stay connected while I rejoin the management. Ladies and gentlemen, we have the management reconnected. Gaurav, if you can please ask your question once again. Thank you.
Gaurav
Yeah. Yeah, sure. Thanks a lot. So sir, I was asking like emerging applications, we have mentioned that soda ash is also being used in battery manufacturing for electrical vehicles. But most of the batteries used in electrical vehicles, specifically in India are around lithium-ion technology. So any major development or research that you have heard about, which can boost significant consumption of soda ash in electrical batteries in maybe one year, two years, three year down the line?
R.S. Jalan
So you got a two of the I would say that the two things I would like to comment on this. One, this lithium iron major consumption will be globally. India, at this point of a time, we don’t see any major thing. But however, this time in the Government of India, the budget, they did announce some incentive for the lithium iron battery. How that will pan-out, we have to see that. But if the lithium-ion batteries consumption globally improved significantly, that will also help in it better whatever demand-supply balance globally and that will have an ultimately impact on the what you call the benefit to the Indians producer as well.
Operator
Thank you. The next question comes from the line of Janum Galani from Swan Investments. Please go-ahead. Hi, sir. Thanks for this opportunity. Sorry, I joined the call a bit late. So pardon me if my questions are repetitive. So what was the volume sold during this quarter in terms of growth?
R.S. Jalan
See, we normally don’t give the number of the volumes sold and we only give the revenue and
Janam Gilani
Yeah, but sir, in terms of the year-on-year that in terms of year-on-year, if you look at our revenue per se which was which we reported or more for that. So just the point. Hello.
R.S. Jalan
Yeah, I’m saying this number — these numbers are almost flat. That’s the point I’m trying to say. The revenue numbers are flat.
Janam Gilani
Yes. So numbers are flat in terms of quarter-on-quarter. So — or probably if you look on the year-on-year also, we are down by INR27 crore INR30 odd crores. So can you help us in understand whether this — I mean decline in the revenue by INR30 odd crores is largely due to volume or it was a bit of a realization.
R.S. Jalan
Primarily because of realization, broad, but primarily in the realization.
Janam Gilani
So volume has — volume has largely remained flat.
R.S. Jalan
Yes.
Janam Gilani
Now with the MIP in-place and the new segment of the soda ash consumables coming up in-place, how do you see a volume growth going from the current level?
R.S. Jalan
So obviously, in this quarter some improvements should happen, but as yet to be kind of the impact of this MIP and will take few maybe one or two months. And after that definitely some improvements will happen in the volume. However, we have a limited volume. So therefore cannot be a very significant improvement in the volume.
Janam Gilani
But sir with this back to 20%, 30% margin, is this margin a sustainable margin for us now or we can see some pressure here as well?
R.S. Jalan
See, depending upon the volatility, you know the volatility in the market. Our efforts are there on the — on the what you call cost optimization that we are doing very nicely and that journey will continue. Marginal here and there margin can happen on a quarter-to-quarter basis. But in the longer-term, if you look at, definitely these margins should improve.
Janam Gilani
And sir, any update on the greenfield capex as to when do we expect it to commence operations?
R.S. Jalan
We have started the initial work on the capex after the environmental clearance has been received and the things will progress now.
Janam Gilani
Okay, sir. Thank you.
Operator
Thank you. The next question comes from the line of Sanjana from FWC. Please go-ahead.
Sanjana
Hello, sir. Thank you for taking my question. So tentatively, our completion date for the greenfield project is somewhere around Feb or March of 2028. Can you give us a capex schedule till then? Like what will be our annual capex numbers?
R.S. Jalan
At this point of a time, I will not have the answer on this. But in the overall in three years of time, the approximately the number will be in and that will be largely in the ’27, ’26, ’27 and ’27 ’28, the major portion. I would say 80% the volume will be — the number will be coming from that. I come out? Absolutely. 80% will be coming from that is on that number. The number in the ’25, ’26 will be in the range of around INR300 crores.
Sanjana
Okay. Okay. Understood. Sir, one more question I had on the. Is the government exploring an extension for this — for the NIC considering that it was announced for such a short period of time?
R.S. Jalan
See, generally what happens they announce for a period of time and then you have to apply for another extension. Generally you get that expensive
Sanjana
Okay, so when do we have to apply for this extension?
R.S. Jalan
After maybe 2, 3 months, because this period is up to June, so we have to apply maybe in April, April-May.
Sanjana
Okay, understood. Thank you, sir. Thank you.
Operator
Thank you. The next question comes from the line of Vignesh Iyer from Sequent Investments. Please go-ahead.
Vignesh Iyer
Thank you for the opportunity, sir. I wanted to understand what percentage of limestone and salt are we backward integrated for the soda ash specially as of now, what percentage is backward integrated and what percentage do we procure from outside.
R.S. Jalan
See, if you look at the salt, it is around 30%, we are backward integrated and once this green — the new land which has been allotted, that number will significantly go up. In terms of the limestone, I would say it is probably around maybe 20%, approximately around, 20% 25%.
Vignesh Iyer
Okay. And when does this new — I mean salt capacity start again, when would the new thought start? And how much percentage of our older capacity — I mean older facility of soda as well as 12 lakh ton would be catered to from the new capacity.
R.S. Jalan
So as per at this point of the time, our understanding is that approximately around another around 30%, 35% of the current capacity will get feed up from the — from the new salt field and the balance will go to the new soda ace plant, which we are putting into the salt in the sketch area okay.
Vignesh Iyer
And for Limestone, do we have a long-term contract to procure it or is it on a — how is it having the arrangement with the supplier?
R.S. Jalan
It generally happen on a year-to-year basis.
Vignesh Iyer
Okay. Okay, sir. Fine, sir. That’s all from my side. Thank you.
Operator
Thank you. Ladies and gentlemen, we have the next question from the line of Kushwan Paha from KPAC. Please go-ahead.
Khushwant Pahwa
Yeah, hi. Thanks for the opportunity. Am I audible? Yeah. So I have a couple of questions. The first is around cost optimization. I see margin improvements quarter-on-quarter happening because of cost optimization and that’s good to see. I just wanted to understand that if I keep the price fluctuation aside, purely from a cost optimization perspective, do you think we’ll continue to see benefits flowing through in the quarters ahead or are we largely there in terms of the journey where we wanted to reach? So that’s my first question. Just some trajectory on what more on cost optimization you can see over the next two to three to four quarters.
R.S. Jalan
Sure. See, first and foremost,, giving a number will be very difficult because this is a journey which
Khushwant Pahwa
Is not the exact numbers, but I’m saying generally are we there in terms of — I mean, whatever the management aspiration was, are we there largely or we are midway through? Just some perspective.
R.S. Jalan
So, our inspiration changes every year. Once we achieve one milestone, we go to another milestone and we keep on shifting our goalpost on the higher side and this journey will continue. And you must-have seen in the last many quarters that has been delivered by the management and that is where our strength sees. And that strength we are — we are leveraging to the maximum extent and we’ll continue to have that.
Khushwant Pahwa
Understood. So you say that current level of margins, keeping the price fluctuations aside are maintainable.
R.S. Jalan
It should be.
Khushwant Pahwa
All right. My second question is, I remember the last conference call, you had mentioned that as the expansionary monetary policy cycle starts, there should be some improvement in the prices that we should see. I’m not asking for any quantums. I don’t want any specific guidance there. But in your experience, we have seen US embark on the expansion of the monetary policies cycle. There have been rate cuts. So in your opinion, typically, how much lag is there before we start seeing some improvements in pricing. And again, I don’t want any numbers. I’m just saying in terms of timelines, you know, what is what is your thought process broadly?
R.S. Jalan
No,, as you know that the way that overall the world is such a volatile scenario at this point over-time. And you have seen in a couple of policy decisions which has happened in the recent past after the leadership change into the US, how that will shape up into the global market, it is very, very kind of unpredictable at this point over-time. But as I said, logically, it looks to be that once the demand scenario improves overall and since the ultimately the business makes sense only when you have a margin — or you have a margin or your prices are not lower than prices are not lower than the prices are lower than the cost. Like in China, I said that the people are selling at this point of a time, lower than the cost. So this leads to kind of a belief that some improvement will happen. How much it will happen and when it will happen, it is very difficult at this point of a time to kind of guess on that.
Khushwant Pahwa
Understood. Understood. If I can just ask one more question, you know. In terms of our cost of production vis-a-vis China, how much of you know, purely from a cost of production perspective, how much — how much does it vary in India vis-a-vis China? I mean, do they have a significant advantage over us in terms of the cost of production?
R.S. Jalan
Krishant, I’d like to put the two kind of a process of production. One is the natural soda ad. Natural soda ash are in terms of the cost of production, they are cheaper, whereas the synthetic soda ads in China, particularly, there are two what we call processes. One is the how process and one is the solvary process. How process are — are costlier than the process at this point of the time because there is pricing of the ammonium chloride, which is a fertilizer is much below and therefore, the net soda ash cost is much higher. We — as India, as you said China, our costs are very significantly competitive in terms of China. That means we are not — they don’t have any major advantage in terms of their cost of production in the process.
Khushwant Pahwa
Understood. Thank you. Thank you so much, sir and wish you all the best.
Operator
Thank you, sir. Thank you. And the next question comes from the line of Saket Kapoor from Kapoor; Company. Please go-ahead.
Saket Kapoor
Thank you, sir, once again for the opportunity, sir as mentioned in our presentation also and earlier alluded also that the global market for soda ash grows at a rate of 2.5% to 3%. That is a — that is generating incremental demand of 2 million ton metric ton per year. So sir, currently, what kind of global capacity addition globally are we looking into the various geographies who are the major players?
R.S. Jalan
Secondly, the new global capacity has almost came in, like you know the plant has came in. In China and other soda ice plant has also come in. We are not seeing a very significant amount of new investment coming in near-future. Of course, in the longer-term, some of the plants have been announced in the US and hopefully, I think that will kind of lead to some new expos, but that will take few years of time. So it is not likely to happen in one or two years.
Saket Kapoor
Okay. And sir, your presentation also speaks about the capacities getting reorganized in Europe. So there will be some capacity that will be off the table because of the high-cost. So that is — it will be a balanced market going ahead or maybe a deficit market also, sir. If the demand outlook was
R.S. Jalan
Just hope,, that happens.
Saket Kapoor
Okay. And sir, as you mentioned that MIP part being imposed on soda ash, there is also some duty protection for solar glasses, I think so. So that is also going to be some anti-dumption duty for textured tempered coated and uncoated glasses from China and Vietnam was also imposed in the month of December for another six months.
R.S. Jalan
The second is two development has happened on this class. As you rightly said, there is anti-dumping duty on China and the Vietnam and that is very significantly higher and that will definitely give a much better leeway to the solar producers in India. And that’s the reason we see a good amount of growth in the ’25, ’26. And in terms of — earlier there was no — basic duty was removed on the import of solar glass that has been reimposed a few months back and that will also — the overall solar glass environment in India has been significantly improved and that will definitely improve the soda ash consumption going-forward.
Saket Kapoor
Just to — just to conclude on the point of solar glass production, you earlier also alluded in 2024 also that a lot of capacity are in the anvil from the large corporate who are trying to set-up big solar alliance in the country. So where are we, sir, in terms of this incremental demand that was envisaged from them where are we in midst of their capacity coming up, thereby boosting the demand and then the ecosystem getting a boost in terms of pricing.
R.S. Jalan
So these are happening as per the plan, and hopefully, you will see that the benefit of that will be coming in the next few years.
Saket Kapoor
Okay. And lastly, sir, this INR250 crore capex for the field work, sir, if you could just explain how is — this is because of — this is for the raw-material security that you alluded earlier to and also for the bromine project or what is the significance of this INR350 crore capex for the salt wheelk and when are we going to spend this money, sir?
R.S. Jalan
Second, this is for the new salt fill, which we have been allotted. This amount is only for that and that will get spent over a period of next three years.
Saket Kapoor
And that will be catering to our requirement for salt or for the pertaining to which projects are the new one or the existing soda ash facility.
R.S. Jalan
So this is this salt will be consumed for both the locations for the location right, sir.
Saket Kapoor
And thank you, sir, once again for elaborating and answering to our question, sir. So just to conclude that the EBITDA jump which we have seen Q-on-Q, even excluding the other income impact, these numbers on the consistent environment and the factors that contributed to it are looking sustainable going ahead. And quarter-four being a very strong quarter in terms of demand and the signaly also a good quarter. A reasonable understanding it can — that the investors can take into account that these EBITDA number are sustainable for at least for the near-future?
R.S. Jalan
Second, I very clearly articulated this that ours, we are working towards the cost optimization or on the efficiency improvement. In terms of the volatility in this current market scenario, it will be very difficult to predict what is the sustainable margin will be there going-forward. And in the longer-term, I have already said the things are looking better.
Saket Kapoor
That’s correct, sir. Thank you and all the best to the team, sir.
Operator
Thank you. Thank you. Ladies and gentlemen, that was the last question and we conclude the question-and-answer session. I now hand the conference over to the management for their closing comments.
R.S. Jalan
Thank you. Oh, thank you very much. Thank you very much to all of — all the my shareholders and the participants into this call. And we draw a lot of strength from our investors and our journey towards the cost optimization will continue and we will ensure that our executions are being done and appropriate way and create value for our shareholders. That’s the endeavor of the management and we will try and deliver on this day-in, day-out. Thank you very much for participation.
Operator
Thank you. On behalf of Emkay Global Financial Services, that concludes this conference. Thank you for joining us and you may now disconnect your lines.