Gujarat Fluorochemicals Limited (FLUOROCHEM) Q1 FY23 Earnings Concall Transcript

Gujarat Fluorochemicals Limited (NSE:FLUOROCHEM)  Q1 FY23 Earnings Concall dated Jul. 27, 2022

Analysts:

Nitin Agarwal —

Unidentified Speaker —

Sanjesh Jain — ICICI Securities — Analyst

Ketan Gandhi — Gandhi Securities — Analyst

Rohit Nagraj — Centrum Broking — Analyst

Archit Joshi — B&K Securities — Analyst

Krunal Shah — ENAM Investment — Analyst

Rohan Gupta — Edelweiss — Analyst

Unidentified Participant — — Analyst

Tejas — Nippon India Mutual Fund — Analyst

Viral Shah — Enam Holdings — Analyst

Annand — Individual Investor — Analyst

Vishal Biraia — Max Life Insurance — Analyst

Honsel Thacker — Lalkar Securities — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the Q1 FY 23, Gujarat Fluorochemicals Limited Earnings Conference Call, hosted by DAM Capital Advisors Limited. As a reminder, all participant lines will be in the listen-only mode. And there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions]. Please note that this conference is being recorded.

I now hand the conference over to Mr. Nitin Agarwal from DAM Capital Advisors Limited. Thank you, and over to you, sir.

Nitin Agarwal —

Thank you, Michelle. Good afternoon everyone and a very warm welcome to Gujarat Fluorochemicals Q1 FY 23 Post Results Earnings Call, hosted by DAM Capital Advisors Limited. I thank the Gujarat management for giving us opportunity for hosting the call. I’ll just announce the names of the Gujarat chemical management team and will hand over the call for them to make the opening comments from thereon.

Representing the Gujarat management on the call today, we have Mr. Vivek Jain, Managing Director; Dr. Deepak Kapoor, Chief Executive Officer; Mr VK Soni, Head Projects and New Initiatives; Mr. Manoj Agarwal, Chief Financial Officer; Mr. Vibhu Agarwal, Head-Investor Relations. I hand over the call now to Gujarat Fluorochemicals team to take it forward from here. Please go ahead, sir.

Unidentified Speaker —

Thank you very much, Nitin. On behalf of Gujarat Fluorochemicals Limited, I would like to extend a very warm welcome to all of you. We are happy to inform, that board of directors of Gujarat Fluorochemicals Limited has its board meeting approved the financial results of the company for Q1 FY 23. The financial results, as well as the earnings presentations are uploaded on the website of the stock exchanges, as well as that set of the company. I will take you through this presentation initially. Then we can open the call for any questions that you all might have.

Starting with the financial highlights at the concert level for the quarter ended 30th June, 2022. Constant revenue for the Q1 FY 23 was at one double 34 crores, up by 46% on year-on-year basis. Constant EBITDA for Q1 FY 23 was at 459 crores, up by 80% on year-on-year basis. The EBITDA margin for Q1 FY 23, we’re at 34%, up 6 basis points from 28%. — back for Q1 FY 23 was at 3.3 crores, up 101% on a year-on-year basis.

So this was considered performance at a company level. Now we’d like to take you through the detailed overview of the financial performance during the quarter for each business verticals. Caustic Soda revenue for Q1 FY 23, it stood at 189 crores as compared to 88 crores in Q1 FY 22, up 115%. The Chloromethane’s revenue for Q1 FY 23 stood at when we for as compared to 94 crores in Q1 FY 22 of 9%. — revenue for Q1 FY 23 stood at 196 crores, 196 crores, which was like 93 crores in Q1 FY 22, thus having a growth of 111%.

The — sales for Q1 FY 23, we’re at 379 crores as compared to 320 crores in Q1 FY 22, up 18%. The new Fluoropolymer sales were at 331 crores, up 124% as compared to 148% in same quarter, previous year, Q1 FY 22. — sales was at 38% from 86 crores. — when compared to the same quarter of the previous year Q1 as I think this is. So this was the segmental performance of all the business verticals. As regards to ROC and ROE, ROC is significantly improved from 24.46% to 35.3% and ROE has improved from 20.1% to 27.7% as compared to FY 2020. — The company was actually debt free and the net debt equity ratio stands at 0.29.

On working capital cycle, our continuous efforts have resulted in further reduction of the working capital cycle from 122, the 120 days as on 31st March 2022 to 109 days as on –. As regards to our expansions and capex, we continue to expand and commercialize additional capacities from new fluoropolymers and all our new projects and additional COVID disease as announced earlier are progressing, especially.

So with all these initiatives–with all these initiatives, we’ll offer a sustained business growth with higher margins and will lead to further improvement in the financial performance as seen in the last few quarters, and will continue in future also. So that, ladies and gentleman, is a walk through the presentation, I would like to open this up for any questions that you might have. And then, we’ll, the management team will try to answer all your questions. Thank you.

Questions and Answers:

Operator

Thank you very much. We will now begin the Question-and-Answer session. [Operator Instructions] The first question is from the line of Sanjesh Jain from ICICI Securities, please go ahead.

Sanjesh Jain — ICICI Securities — Analyst

Yeah, good afternoon, sir. Congratulations on a very strong set of numbers. I got a few questions. First on the PTFB side. PTFB revenue has declined 16% sequentially. I know that you have mentioned in the presentation that there was a lower availability of –. Why was this the issue with the –? We were also adding another (–) plan that is we have –. What has caused the disruption of the –, if you can explain that?

Unidentified Speaker —

Yeah, so San Jain, since you know, as we have mentioned that there was, you know, we have started a 135 production also in the last quarter. And while — yes, we have–we have planned to start up the — line also. But that is something, which has now come out. So it’s– there was some amount of disruption on availability during that period. But from July onwards that client is also in full production now.

Sanjesh Jain — ICICI Securities — Analyst

So what — now up and running?

Unidentified Speaker —

Sorry?–

Sanjesh Jain — ICICI Securities — Analyst

–The –, the (–) is running office operational?

Unidentified Speaker —

Yes, it’s running all right. So we are–

Sanjesh Jain — ICICI Securities — Analyst

The second on the new Fluoropolymer. No, let me first complete our 125. What was the sale of our 125, in terms of volume floor for Q1? And the full year, what is the volume we are looking at?

Unidentified Speaker —

So we don’t provide all the — of our segment revenues. Probably not be willing to be in position to provide you this information.

Sanjesh Jain — ICICI Securities — Analyst

But will it be fair to assume that incremental revenue in the — where it has come in, is largely the benefit of our 125 or there is also a normalization of R22[Phonetic] which was lower in last quarter?

Unidentified Speaker —

Yeah. I think your assumption is right.

Sanjesh Jain — ICICI Securities — Analyst

Got it, got it. On the new Fluoropolymer, so that looks like going all–all off. Can you help us explain what is driving the strong growth in new Fluoropolymer, almost 90% sequential increase? But two things here. One, which are the new capacities in the new Fluoropolymer added? That’s number one. Number two, what is the volume growth or which are the products which is driving the growth–no, don’t give the volume, but some qualitative assumptions–which are the products within the new fluoropolymers which is driving? And how we’re being the pricing in the new fluoropolymers?

Unidentified Speaker —

So this is on the new fluoropolymers–so yes, finished new fluoropolymers. Actually there has been all-round increase in, whether it’s an FKM, PVDF, PFA and to some extent, micro powders also. So there is an all-round increase in these –. There has also been a price improvement, which has taken place in the last quarter that also has contributed to the overall numbers (–). So both volumes and prices have contributed to this increase in —

Unidentified Speaker —

And what is the facilities have been added for the new fluoropolymer in the last quarter or so.

Nitin Agarwal —

During in the last quarter, as you mentioned, we were adding about 300 odd net ore tons of new fluoropolymers and as we have mentioned that we expect to keep on adding more capacities during this financial year.

Unidentified Speaker —

And what is the capacity utilization as we running the new fluoropolymers?

Nitin Agarwal —

So, capacity utilization, would almost be about 75% and we are. And since we are adding more capacity by the end of this financial year, we would expect that on the enhanced capacity will be at about 75% to 80% and the balance the where the balance production will be made up during the next two quarters in the next financial year.

Unidentified Speaker —

Got it, got it. And what is the kind of capacity addition we expect to add beyond this 400 metric tons for this year for new fluoropolymer?

Nitin Agarwal —

So that’s an addition of about additional tons.

Unidentified Speaker —

So basically this year, beyond this floor and that we will add another 400 to 500, is that understanding, right?

Nitin Agarwal —

So, I get it right.

Unidentified Speaker —

So basically, we will add this 12,000 metric ton of capacity on the base of 800,000 metric tons we had last year, rght? So we will reach 20,000 metric ton of capacity by end of FY 23.

Nitin Agarwal —

Yes, by and large. Yes, that’s right.

Unidentified Speaker —

And we expect to have a 75% utilization ballpark there in this capacity. What we’re talking is only for the capacity which was data for last year?

Nitin Agarwal —

No, by the, by the time this new capacity excited by the end of this financial year. At that point of time with the added capacity, we had about 75% capacity utilization.

Unidentified Speaker —

Got it. Sir. Got it. One last question on the core side. Power cost has gone up significantly. Is this expected to come down. Are we seeing the coal prices coming down, how should we think about are we doing anything to control the power cost than any measures we have taken to that we can normalize the power cost?

Nitin Agarwal —

At this point of time. I don’t think there’s anything much that we can do, because as you know, coal still remains at a fairly high price of almost about $125 a metric ton, that is not going down. And of course the pricing is also high that also go down. So I think for the time being at least for the next one is the end of 23-24, we don’t expect much reduction in power cost. Beyond that, we are looking at the possibility. And this is something which is, I cannot share with you the details at this point of time, but we are working on a possibility, which can help us in reducing power cost fairly significantly from the year 2023-24 in the year 23-24 –.

Unidentified Speaker —

Got it. Got it. Very helpful. (–).

Nitin Agarwal —

It is not 23.24, it’s 24.25. So you are telling that benefits, which we are looking at forward Roche will start showing up from FY 25?

Unidentified Speaker —

Pretty good. Yeah, fair enough. 25 actually.

Nitin Agarwal —

Yeah. Got it, got it. Thank you.

Operator

Thank you very much. The next question is from the line of Ketan Gandhi from Gandhi Securities, please go ahead.

Ketan Gandhi — Gandhi Securities — Analyst

Yes, sir. Sir, with regards to our 142B last time last presentation. We have said we are selling from this quarter, so this reference guys have any component of Hartmann 40 to be or we are using it for making BVF?

Nitin Agarwal —

By and large we are it from AGP MNF came from this quarter onwards we will start the exports of 142B to some select customers.

Ketan Gandhi — Gandhi Securities — Analyst

Can you quantify, I mean how many tonnes per month or?

Nitin Agarwal —

No, at this point of time can be difficult for us to quantify it, but we will be exporting that we’re exploring one for it to be as per our business plan and the excess availability over and above our own requirements of 142B which as you know, will keep on expanding because of our expanding expanding production of and PBT.

Ketan Gandhi — Gandhi Securities — Analyst

So, sir. Is it safe to assume that whatever capacity of PBT? We have, we will be consuming our fund 40 to be for the captive use and balance quantity will be selling to the export markets.

Nitin Agarwal —

—

Ketan Gandhi — Gandhi Securities — Analyst

That’s a helpful, sir. And sir, regarding new energy business. Regarding what is our, I mean, how we are geared up for a fix and other products?

Nitin Agarwal —

Yeah, so for IP FCX the battery sold we’ll be completing the project by end of this year and early next year in January. I mean, calendar year January, we’ll be pushing out samples and it takes about few months, three months for validation. So we will start commercializing our IP FCX thereafter. So maybe in the first quarter next year.

Ketan Gandhi — Gandhi Securities — Analyst

Sir, we are planning for a domestic or export purpose or both purpose?

Nitin Agarwal —

At the moment, as you know, domestic is a bit slow. So we’ll start with export and followed with sales in the domestic area which planning that we will get the plant commercialized quality approved batching purposes and after that, I think in the second half of 20, 24-20 in the second half of calendar year 24. The demand from the domestic battery manufacturing will also come up as well as demand from European battery manufacturers.

Ketan Gandhi — Gandhi Securities — Analyst

Fair enough. Sir, with regards to LA FSI are we planning to manufacture ourselves because last research report has been saying that if you add higher percent of the LA FSI in the electrolyte it gives very good quality and it the density of the energy?

Nitin Agarwal —

Yes, you’re right. Actually, at the moment the battery chemistry is predominantly LLP FCX but there are moved towards adding LA FSI, and we are also evaluating gearing towards it by evaluating the technology, etc. And apart from that, there are other additives. Also, which also we are evaluating. As we mentioned last time, we have a very integrated approach for the entire electrolyte.

Ketan Gandhi — Gandhi Securities — Analyst

Sure sir, sir in solar backpedal PVDF how much capacity we are looking at in terms of per square meter or?

Nitin Agarwal —

We are looking at the metric tons because scared depends upon the taken us the microns, so the Micron is less the scale because more and vice versa. So we will start with about 700 metric tons in a year.

Ketan Gandhi — Gandhi Securities — Analyst

Great. And sir Adani building, the new ANEEL, that is around Industries Limited 20 gigawatts of hybrid wind and solar. And if we look at it, then there is ample opportunity for us to tie up with them or supplying with them regarding this solar back panel PVDF, and even they are looking at the membrane, that means production of using the electrolyte with either alkaline method or the PBM model. So what is your view on that?

Unidentified Speaker —

Sir so, actually we have these two projects in new ways, one is the lithium salt, which we discussed. The second is the PEM, the Proton Exchange Membrane which goes, predominantly in the fuel cells and also into the electrolyzers so regarding your question of alkaline versus PEM both will remain in force and for, like for example for transport sector, the fuel cells. It is predominantly whereas for the non-fuel cell sector for transport sector, like for making ammonia and sector. It will be mostly alkaline cell. But the disadvantage or advantage of is that it can start very rapidly compared to longer time required to start alkali I mean are we geared up to supply to Adani if need arises for the previous. We will be, we are talking to them, we have initiated the exercise.

So we will certainly be supplying to them or whosoever is which needs it in the domestic market. So that is one thing for sure. And as far as PJM is concerned, the projection is still above 1.5 years away. We are in the process of developing the technology and we have the starting raw materials for making those. So there is a full scale R&D effort which is going on. Also in conjunction with some of the CFS and we hope that in about a year’s time, we should be able to develop the membrane. And then thereafter will commercialize it, but as the demand for the engage is really going to start from about three years from now when electrolyzers and fuel cells. The production of those starts increasing greatly.

Ketan Gandhi — Gandhi Securities — Analyst

Thank you, sir. Thank you. That’s very helpful Sir, thank you so much.

Operator

Thank you. Ladies and gentlemen. In order to ensure that the management will be able to questions from all participants in the conference please limit your questions to two per participant. Should you have a follow up question please rejoin the queue. Thank you. The next question is from the line of Rohit Nagraj from Centrum Broking. Please go ahead.

Rohit Nagraj — Centrum Broking — Analyst

Yeah, thanks for the opportunity. And congrats on a very strong set of numbers, sir. Just first question, given that the numbers have been phenomenal. During the quarter. can we expect that this is the base level at which we will be able to operate incrementally given that there are multiple capacity expansions, which are happening and ongoing and from a sequential basis, on a quarter-to-quarter basis. Performance overall should be improving from Q2, Q3, Q4 onwards. Is that the base assumption that we can make? Thank you.

Unidentified Speaker —

You are asking too many questions about the future. As you know, is not always very predictable, but yes basically basically since we are making additional investments on various fronts, we certainly expect the revenues and profitability to keep on improving right.

Rohit Nagraj — Centrum Broking — Analyst

Got it. Sir, Sir. Second question is, particularly on the spec chem, so what has changed during the quarter. And why there has been a serious increase in the performance on a sequential basis or their order backlogs, which have been executed during the quarter and we expect that this particular kind of performance is sustainable or there is any kind of seasonality, which may affect incrementally? Thank you.

Unidentified Speaker —

But your question was really related to specialty chemicals.I think I think you’re partly, right, because the growth is seen because the last quarter was subdued one reason because of the incidents. So there were some orders and also the new plants, the capacity that we had planned or at the various stages of commissioning. Those are yielding results now. So we expect this to continue. Right, right.

Rohit Nagraj — Centrum Broking — Analyst

Sir, just one last clarification on the wind power project. So last quarter we had indicated that 20 megawatt is likely to be commissioned in July. If you can tell us what is the status for the same so that will be commissioned during this quarter.

Unidentified Speaker —

There has been a delay of one or two month, but it’s about the commissioning activities are going on and we are very hopeful that by the end of this quarter, those will be commissioned some effect from the benefit from this wind power project will start trickling from Q3 onwards. Is that a right assumption. Yeah, that’s right.

Rohit Nagraj — Centrum Broking — Analyst

Thank you so much, sir. I’ll come back in the queue, and best of luck,

Operator

Thank you. The next question is from the line of Archit Joshi from B&K Securities. Please go ahead.

Archit Joshi — B&K Securities — Analyst

Thank you, sir. And congrats on a good set of numbers. My first question is on if you can broadly the structure of the industry at this point in time, if you’re seeing any imbalances in supply demand equilibrium given that PFC spreads continue to be quite strong. Any comments on that would be helpful. Thank you.

Unidentified Speaker —

The PTSD demand continues to be strong as far as we are concerned, because as you know over a period of time, we have spent a lot of time, energy and efforts to develop large amount in large number of grades which are required in different applications across different applications and as you know we export almost about 75% of our is exported to Europe and US where these applications are required. So what, there is a continued growth in these applications.

Demand is coming in and and sufficient amount of capacity doesn’t exist the supplies are not coming in from the established legacy suppliers as a result of which we have been able to fill our capacities and we have moved more and more towards these grades, which are now required in Europe and US in different demanding applications. And this has also given us a certain amount of sort of I would say pricing power because we have been able to step in to meet the demand short the shortage between demand and supply Sir. What I was trying to understand is, how sustainable is this the supply shortage situation that we are seeing what’s exactly happening on that front.

Archit Joshi — B&K Securities — Analyst

Because we understand that a few months back, we had we had a whole lot of shutdowns in China from the energy control launch is that, is that what is anything into supply shortage and how long would this think that this can go on. Given the fact that China it’s known to have the highest capacity. So what’s what through on that, Sir?

Unidentified Speaker —

Not really because as I mentioned, we have spent time and energy and effort to develop a June, number of grades which go into different applications, the Chinese are not present in most of the grade at least in the western markets. So we don’t see their presence there at all. Even despite supply disruptions which might be happening production disruption, we might have been happening in China last two, three years but even prior to that, we have not seen Chinese participating in those kinds of applications and the demand for those applications and the demand from those applications is only growing understood..

Archit Joshi — B&K Securities — Analyst

Another question on the integrated approach that you spoke off a bit earlier on the Ellipsis front, we understand we are making great on manufacturing that is an iPSC in that there could be certain additives, but in your interactions with some of your customers have you understood. Anything on this front that are looking for a more packaged solution of an entire which also involves the solution, how is the supply chain. So on that front. Our customers are only looking for a particular chemical or the entire so that they can integrate their operation?

Unidentified Speaker —

Yes, yes. Customers would prefer. If you can’t supply them everything, but that is unlikely to happen. I don’t see any company is will be in a position to supply all the various ingredients, which are going to be required. So we have picked in chosen those which we think will give us where we will have an advantage and where the requirements are going to be sufficiently large for us to participate in that market. The second thing is that till now most of this production is centered in China and I think as we all know there is a very, very strong move for a China plus one strategy. So with all these battery plants which are slated to come up in the US and Europe.

They would certainly and from interactions which we’ve had with customers now, and which are ongoing, there is strong interest for those potential customers to enter into some kind of a supply arrangement with us, so we are seeing very strong market developing once the initial product, the products are qualified fully and the battery capacity starts coming up both in Europe, US and India. It’s probably going to happen. Almost at the same time from middle of calendar year 2024 onwards. Understood, sir. Thanks for your elaborate clarification.

Archit Joshi — B&K Securities — Analyst

That’s it from my side, the thank you

Operator

The next question is from the line of ENAM Investment please. I’m sorry. The next question is from the line of Krunal Shah from ENAM Investment, okay go ahead.

Krunal Shah — ENAM Investment — Analyst

Yeah. Hello, sir. Congrats on a very great set of numbers. Two questions, one, is what are the key applications that are driving the demand for FKM currently?

Unidentified Speaker —

For what,? Will you see, you might know, FKM is largely used in the auto industry and there is, of course, a very strong industrial segment also. We are seeing demand growth in both these (–) and across geographies. Whether it’s the US, Europe, China, even China, Japan, and of course in India. So there is strong demand growth, and of course, automobiles are also becoming more compact. And they have to be more environmentally, environmentally friendly. In the sense that the emissions (–) control stringently. This is also requiring a larger component of FKM in the cars. So, so as a result of all this, we are seeing huge growth in demand.

The other thing also, which has happened of course is that you know, we have developed again FKM we’ve developed maybe about 20-25 grades over the last few years which has (–) just about every application again in FKM and that is the reason why we have been able to now diversify our customer base across geographies. Another element of the course, which has come to our advantage is the fact that we are now vertically integrated and we have our own raw materials, which is the starting (–) which again up now largely has been available from China where there are (–) disruptions in supplies and availability and all these three factors have combined to give us a very very strong healthy offtake from (–).

Krunal Shah — ENAM Investment — Analyst

Are we (–) China also?

Unidentified Speaker —

Yes, some grades (–). There are some grades that are required in batteries and these are new grades that have been developed in order to make the battery safer in use. So for the ceiling requirements in those batteries, we have started now supplying certain high-end grade equipment to China also, and we hope we are hoping that application will keep on going because China is a huge battery production capability.

Krunal Shah — ENAM Investment — Analyst

Great, great. And one last question. You said that there is BTC the legacy suppliers are currently short on supply orders supplying lesser volumes, what are the key reasons for that Sir?

Unidentified Speaker —

Well, the key reasons are they’ve not added capacity, because they are not adding capacity because for a couple of reasons, one is the environment, because of very, very strict environmental control. The costs, the capex, which are required for putting up capacities are very, very large. Second, raw material availability is also a major issue there. So, for these reasons, they have been, practically no increase in any capacity in the last few years.

Krunal Shah — ENAM Investment — Analyst

Got it, got it. Great, thank you so much, sir. Thank you.

Operator

Thank you. The next question is from the line of Rohan Gupta from Edelweiss. Please go ahead.

Rohan Gupta — Edelweiss — Analyst

Hi, sir, good evening, and congratulations on the (–) number okay. A couple of questions. The first is on our PFT limitation (–) requirements, you mentioned that our PTSD revenues in the current quarter have been lower than the Q4, and it is primarily because of the limited availability of PAP which I understand that PAP (–). Value added PTSD and other grades of PTSD, is that right sir?

Unidentified Speaker —

And also we have started production of our 125 which on our technology is on the DFU route.

Rohan Gupta — Edelweiss — Analyst

Okay, so we are, we are utilizing this PAP to ARGON 2.5 and other grades of PTSD, I mean PBBF and the in all those

Unidentified Speaker —

No, no (–) doesn’t require (–)that is made from VGS starting monomer, which is based on 140 (–).

Rohan Gupta — Edelweiss — Analyst

Okay. So it won’t micro powder sir, other ways of PTSD right?

Unidentified Speaker —

Micro powder it goes into PDUFA.

Rohan Gupta — Edelweiss — Analyst

Okay, for this (–), you’ll see that will remain the limitation unless we increased the capacity of VAT and we keep on moving to our 125 and other (–)

Unidentified Speaker —

So we, as we just mentioned, we have taken after the — in line (–) in line and from this quarter onwards, we should not face the problem of unavailability of — for the requirements for the, for the requirements in different product categories, including (–).

Rohan Gupta — Edelweiss — Analyst

I think is on the solid utilization, which you have seen the refrigerant gases how do you see that digitalization because what we heard is that the licenses have (–) and the current quarter onwards and from the current month onwards. So how do you see the utilization across the bank (–)

Unidentified Speaker —

I don’t think there is going to be any impact on realizations, even in the next two quarters

Rohan Gupta — Edelweiss — Analyst

I will afterward come back in the queue, Sir we have seen the solid demand coming from the FDA and the higher acceptability of the product. We have already mentioned that by end of the year we all knew picking up more than sort of capacity utilization and across the chain of (–) value added. Do we have already plans in place to meet the growing requirement of (–)

Unidentified Speaker —

We are continuously expanding our capacities. We are adding new capacities and additional capacities which will keep on coming. We will keep on getting into production in the next few quarters.

Rohan Gupta — Edelweiss — Analyst

— plans, if you can mention that what we see that can be an investment of entire fluoropolymer and — given the solid demand from right now, how much do you think that this capability we have and how much investment in this segment can absorb over next 12 months?

Unidentified Speaker —

So, actually, we had given those numbers in the last presentation, but maybe just amplify that further for we see it just now. So the year-ended March 22. Our gross capital was about 4300 crores and every quarter this year we plan to add about 300 crores, so about 1150 crores in the whole year. In the last quarter. Up to June. We added 300 crores and this 1200 crore the breakup is about a broad breakup is about 400 crores four new fluoropolymers about 300 crores in specialty including battery chemicals and in Special Chemicals like BDC represent gases 300 crores and wind energy and miscellaneous infrastructure, about 150 crores. So, this totals about 11.5 crores.

Rohan Gupta — Edelweiss — Analyst

Okay, that is part of the current year FY 23 —

Unidentified Speaker —

Yes, please. And for next year. We have projected about 1,000 crores like that remains as what it was earlier, so it could possibly go up by another 200, 250 crores.

Rohan Gupta — Edelweiss — Analyst

I’m surrounded by a requirement from the inside, you mentioned that that has begun, we may expect some were coming the by end of this year if you can just mention that the, — the players with whom we are competing in the international market. In the global market, because you mentioned that the domestic demand from battery remains syndicate and focus is more on the exports so, sir when we are giving, we are dealing with problems and getting the product sampling to those customers. We got the customers we have the, we are competing..–

Unidentified Participant — — Analyst

And we are not able to be are not in a position to disclose the customer’s name names, but these will be customers in China, Korea, Japan, and some in Europe. We are also sending. We have said, we are also, we will also be sending sample quantities to the potential Indian battery manufacturers who will have the capability of testing and analyzing our quality and comparing it to what is their specified quality.

Rohan Gupta — Edelweiss — Analyst

I think that. Thank you

Operator

The next question is from the line of Tejas from Nippon India Mutual Fund. Please go ahead.

Tejas — Nippon India Mutual Fund — Analyst

Good evening, sir. So, on the new polymers’ fluoropolymers, you mentioned that there a price uptake. So, if you can just tell us that on quarter-on-quarter, what will be the price range increase across these products?

Unidentified Speaker —

That’s very, very difficult to estimate that will all depend upon the demand-supply situation Which is, however, [multiple speakers] announcing offshoring on our Q4 I almost for Q1 over Q4 the Phase Q1 over Q4. It is in double-digit numbers but I won’t be able to give you an exact number at this.

Tejas — Nippon India Mutual Fund — Analyst

Okay. So, sir. In this newest program we mainly come compete with European players. Right. Unlike in very sign up. So, if the cost increase in euro for the energy domestic change. We will continue to benefit on these higher realized going up?

Unidentified Speaker —

Well, we hope to, as I mentioned, it’s more, not from the point of view is cost push in Europe, but it also from the point of view that availability of material is not there. And given the fact that we have now developed– so a large number of grades for various applications within FKM usage also it’s difficult for any. It’s difficult for more, no more supplies coming in to displace us. So, from that point of view, we feel that we have a fairly good position in the market and as a result of which we hope that we will be able to sustain our prices.

Tejas — Nippon India Mutual Fund — Analyst

Okay What’s the 27% of the market share on volume comps.

Unidentified Speaker —

By the time our new capacities come up maybe by the end of the year. It could well be about 10%, 10% of the world market.

Tejas — Nippon India Mutual Fund — Analyst

Okay, sir. On the battery chemicals, how is the product approval cycle. I mean is it something which is very long or with the plan commissioning the sales can be made?

Unidentified Speaker —

Yeah, so in the chemicals, it could take three to four months after we start supplying commercial samples and then polymers, it could well take about six to eight months.

Tejas — Nippon India Mutual Fund — Analyst

Okay, thanks. Thank you.

Operator

Thank you. The next question is from the line of [–] from HDFC Mutual Fund. Please go ahead.

Unidentified Participant — — Analyst

Yes, sir. Thank you so much, sir. Our [–} capacity is around 5,000 tons. Is that right?

Unidentified Speaker —

That’s what I had mentioned last time.

Unidentified Participant — — Analyst

Okay. And sir, with this TSC expansion Line three we should be– is it fair to say the PTFE expansion, plus the 25 candidate decent capacities, then?

Unidentified Speaker —

Yes, absolutely. And of course, there are some other polymers also which are made from TSC like PFA and micro powders which as and when the demand for that increase we should be able to cater to that requirement.

Unidentified Participant — — Analyst

All right. So, the TSC expansion handles our upcoming expansion in PTFE plus the 25 plus probably some of the other, some of the other fluoropolymers?

Unidentified Speaker —

Right.

Unidentified Participant — — Analyst

And sir, this quarter, is it fair to assume from a PVD FN FKM we were fairly integrated for our 1.42. I mean the numbers reflect the 40 to benefit the backward integration benefit?

Unidentified Speaker —

Yes, because we have stopped importing any the one for to be.

Unidentified Participant — — Analyst

So, this is for [–]. Got it. And sir, lastly, can you give the capacity utilization for PTFE for this quarter?

Unidentified Speaker —

So, almost 85%, 85%.

Unidentified Participant — — Analyst

Sir, I thought this quarter would be a bit lower, because you had diverted some volumes to–

Unidentified Speaker —

Yeah. So that’s the reason why 85%. Otherwise, we have been running pretty capacity is close to close to about full capacity utilization of 100% 90 – 95%.

Unidentified Participant — — Analyst

Sure sir. And sir, one small request, if you have a lot of capacity addition, is happening across the portfolio. So, if it is possible, if you can give in your presentation, what are the capacities when are they likely to come. It will help us in our understanding and also in our modeling purpose?

Unidentified Speaker —

We’re trying to do it, but you know we circumspect of putting in too much information–

Unidentified Participant — — Analyst

On a broad level, for example, the PTFE category, the fluoropolymer category overall number. How much is the quantum that is probably getting added that will help us–

Unidentified Speaker —

Just inform from that in the new fluoropolymers capacities by the end of this financial year, all combined would be somewhere around 1500 tons, which is up from about similar tons, which was there last year. We are adding almost about 800 tonnes in various new fluoropolymers PTFE of course we are running as, as I’ve said that we have been running all close to 90-95% we’re using full capacity and we are now in. We are, we are working on debottlenecking our PTFE capacities by maybe about 20% to 25% in the next six months. By the end of this financial year.

Unidentified Participant — — Analyst

Sure. That’s very helpful. Sir, thank you so much.

Operator

Thank you. The next question is from the line of Viral Shah from Enam Holdings. Please go ahead.

Viral Shah — Enam Holdings — Analyst

Yes, thank you for the opportunity and congratulations on a very strong set of numbers, sir. My first question is just a clarification, you said that you’ve expanded your TSC capacity, so what would the capacity now we after this expansion.

Unidentified Speaker —

I’m not going to disclose the capacity numbers but yes, this capacity. I mean there is a significant increase in TSC capacity.

Viral Shah — Enam Holdings — Analyst

Okay. Sir. Secondly, on the numbers for your subsidiary and I get the right these numbers from subtracting the consol numbers minus the standalone numbers. It seems subsidiary profitability has meaningfully improved during the quarter. So is there something to read into it. Or what was the reason behind this?

Operator

Sir, we cannot hear you.

Unidentified Speaker —

So, there is nothing much to read in there into this because whenever you sell through subsidiaries, there is a huge transit gap the goods when it’s from India and utility retail there, there is some inventories, which we keep for the demand for the serving to the customer there. So, whenever there is a price increase or movement favorable price movement that gets reflected into the sales from LLC engineer, but otherwise they will have a normal trading margin, which will be there.

Viral Shah — Enam Holdings — Analyst

Okay. Okay. Okay, sir. 3rd question was on caustic, you mentioned in the presentation that there were some price upticks that you saw during the quarter compared to the quarter four. So, would it be possible to share what was your realization for caustic in Q1 and how are you looking at that number and going in the coming quarters

Unidentified Speaker —

Just one moment. So, April, May, June, there has been a marginal increase in caustic soda prices.

Viral Shah — Enam Holdings — Analyst

So, would that be around 50-55 rupees of realization or even higher?

Unidentified Speaker —

So around. If you look at our consolidated you see it’s about 50-51 rupees.

Viral Shah — Enam Holdings — Analyst

Okay. Okay. Okay, thanks. And finally, the last question, sir, on wind power side, sir,

You did guide that’s the 20 megawatt would likely be installed by Q2 end sir. Is there any status on the remaining 100 megawatt which was to be installed?

Unidentified Speaker —

As of now, the policy has not been announced by the state government and so far as kept as wind is concerned. So, we will have to wait till such time that that announcement is made and you know that the policy is defined. But as we have mentioned earlier, by the end of this year. To the extent that there is unfulfilled Obligations I when will return back the money to.

Viral Shah — Enam Holdings — Analyst

Is there any timeline to when the money will be refunded?

Unidentified Speaker —

By the end of this financial year.

Viral Shah — Enam Holdings — Analyst

Okay. And the same would hold true for corporate guarantees as well?

Unidentified Speaker —

Largely, they are largely they will also slip off as we are raising. We are raising funds also that will enable them to reduce substantially the external debt which will, which will then resolve them to follow fall off of Gallo.

Viral Shah — Enam Holdings — Analyst

Sure. Thank you so much for the clarification.

Operator

The next question is from the line of Annand an Individual Investor. Please go ahead.

Annand — Individual Investor — Analyst

Thanks for the opportunity. Sir and congratulations on a great set of numbers. If I were to look at Gujarat Lauro from the last 10 years business, which used to be commodity has now projects.[Technical Issues].

Operator

Mr Anand.. Can you please repeat your question? I think can join cannot yet, I believe we have lost the line of Mr Anand in the meanwhile. We’ll take the next participant, whose name is Vishal Biraia from Max Life Insurance.. Please go ahead.

Vishal Biraia — Max Life Insurance — Analyst

Hello, sir. The battery chemicals two commissioned end of this calendar year somewhere in November, 22 was your earlier guidance and now is it delayed by about six segments.

Unidentified Speaker —

No, no, it’s not been delayed by six segments we never said them that is going to be commissioned by the end of this calendar year, maybe, give or take one or three months this can always happen in large chemical plants of. So it’s only that commercial production. It will take about types, which months thereafter, because it takes a month or two-time or even after the plant is commissioned for the stabilization and then we, then the process, which has to be followed to get the samples approval from different customers, which could take about three odd months, three, Four months.

Vishal Biraia — Max Life Insurance — Analyst

Right, okay. Yeah. And what would be the primary products that these particular three plants will make one. We will be Ellipsis apart from that, what that what [–]

Unidentified Speaker —

Basically as I said, it is an integrated complex. We start with the lithium fluoride PS5 LLP Essex and also go on to make the electrolyte. So these are the products.

Vishal Biraia — Max Life Insurance — Analyst

Okay. Okay. And so once to commission the plant. You will send the products to the customers where we would already be in touch with for. Yes, absolutely been commercial orders book. And the last question is, what is the capacity of this plant. How many times So starting with the prototype capacity and as the capacity of EV vehicles growing in India and abroad will be augmenting the capacity.

Unidentified Speaker —

So to start off with, have a capacity of almost about 2000 ton which we, which will perhaps be utilized in the next two years. And after that as battery capacity has come up in all the geographies. Then we intend to substantially augment the capacity.

Vishal Biraia — Max Life Insurance — Analyst

Okay. Thank you very much. Thank you. The next question is from the line of Anand an Individual Investor. Please go ahead.

Annand — Individual Investor — Analyst

Congratulations on a great set of numbers, sir. Thanks for the opportunity. My question is that you know if I were to look at company in last 10 years we were basically into commodities at some point of time with caustic and contributing to the largest amount. Then we move to PTSD and going ahead and then of course fluoropolymers and strategy campus came in going ahead in next two years or three years, what do you think would be key growth drivers. And how do you see our company’s business in next two, three years in terms of product the key growth drivers.

Unidentified Speaker —

Both be chemicals and fluoropolymer chemicals the various kind of chemicals which are going to be utilized in batteries, as we say, and this will see is going to be a huge growth driver for the company and, both in terms of revenues. In terms of capex in terms of profitability and of course the polymers, which go into batteries into hydrogen fuel cells and hybrids. So those will, those will be the drivers of future growth.

Annand — Individual Investor — Analyst

So like just sticking I guess two, three years from example this year. Looking at what our projections are for the sort of volume as acting specialties romance Polymer segment sales can be a 2000 crore business by the end of this year. So can we do, we see similar kind of opportunity in CF6 and let’s say two years from now.

Unidentified Speaker —

Yeah, certainly, I think it’s not larger certainly similar kinds of opportunities. I think it will be probably be larger over the next five years in developing into a fairly significant uses of that acute care movies.

Annand — Individual Investor — Analyst

The second question that I have is that, how has the sampling for PVD used in battery going on. Have you started supplying for that? And last question on EdF, what’s the status of back films for solar. Project

Unidentified Speaker —

So the… As we mentioned last time, the grades are under development. Somebody has had been developed, which have now been sent to potential customers and for us to get full back on approvals could take maybe able to see Four months. And in case there is any gap, which still remains that will then we will work towards filling that gap and hopefully, we should be able to then start commercial supplies of PBT for the Patrick categories. It could take a process of about Four months, Four to five months before we start commercial supplies, but as of now, we have, we have received favorable response grades which are, which are similar. We have been able to develop grids, which are similar to what is available in the market and we have, we are very, very confident that in the next few months, we should have our first few approvals and visual allow us to start commercial supplies.

Annand — Individual Investor — Analyst

And on solar batteries?

Unidentified Speaker —

The PVD film, which goes to the solar battery. The project is under commissioning and should be commercialized in the first quarter next financial year.

Annand — Individual Investor — Analyst

Okay, great. Sir. Thank you.

Operator

The next question is from the line of Honsel Thacker from Lalkar Securities, please go ahead.

Honsel Thacker — Lalkar Securities — Analyst

Yeah, hi, sir. Congratulations on a great set of numbers. Just a follow-up on a previous question, so I’m assuming that, I mean if the state policy is favorable to us. Is there a possibility that we might absorb the entire wind energy capacity.

Unidentified Speaker —

There is a possibility, but we’ll have to watch and see we see. Let’s see how in what form the policy comes and if it is something which is definitely going to yield very strong results, then we will, we will certainly look at maybe enhancing adding more capacities over and above what we are currently. But I think we’ll have to wait and see what is the final shape of the volumes.

Honsel Thacker — Lalkar Securities — Analyst

Okay. The reason why I was asking is given the current state of the power and fuel cost, it may actually be advantageous which is why I was inquiring.

Unidentified Speaker —

That is very, very clear. That is very, very clear. There is a huge delta been driven energy, power and fossil fuel-based power that is quite clear, but we have to see what form the policy actually comes great sir. It’s very helpful, thank you and congratulations, sir. Thank you, ladies and gentlemen. As that was the last question for today. I would now like to hand the conference over to the management for closing comments. We’d like to thank you for your interest in the company. We look forward distribution on these earning update.

Honsel Thacker — Lalkar Securities — Analyst

Thank you very much.

Operator

Thank you very much. Once again thank you on behalf of DAM Capital Advisors Limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.