IG Petrochemicals Limited (NSE: IGPL) Q1 2026 Earnings Call dated Aug. 14, 2025
Corporate Participants:
Unidentified Speaker
Pramod Bhandari — Chief Financial Officer
Analysts:
Unidentified Participant
Aditya Khetan — Analyst
Riya Mehta — Analyst
Rohit Sinha — Analyst
Chirag Vakharia — Analyst
Chirag Maroo — Analyst
Madhur Rathi` — Analyst
Amit Mehendale — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the IG Petrochemicals Limited Q1FY26 earnings conference call. 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. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your Touchstone phone. Please note that this conference is being recorded. Please note this conference call may contain forward looking statements about the company which are based on the beliefs, opinions and expectations of the company as on date of this call.
These statements are not the guarantees of future performance and involve risk and uncertainties that are difficult to predict. I now hand the conference over to Mr. Pramod Bhandari, CFO from IG Petrochemicals Ltd. Thank you. And over to you, sir.
Pramod Bhandari — Chief Financial Officer
Yeah. Hi. Good afternoon everyone. Thank you for joining us today. On the behalf of IG Petrochemical, we extend a warm welcome. We are also joined by sg our Industrial Relations Advisor. I trust that you all had an. Opportunity to review our financial results and investor presentation which is available on Stoke Exchange as well as the company’s website. We will begin with a brief overview. Of recent industry development, IGP progress in relation to the new projects and followed by operational financial highlights. Over the last few quarters, the global chemical industry has navigated a difficult environment. With the challenges such as the volatile. Crude price, rising trade cost, subdued demand.
From Western market for key chemicals. Many leading Indian chemical manufacturers, especially those with the high export dependence and commodity. Product portfolio or reliance on the raw. Material from Western side say Europe China. Has significantly impacted the uncertainty around the. US Drive has also been added to the pressure on this sector at igpl. We are exceeding. While these external headwinds didn’t directly affect our core operation, given the majority of Our product we are selling in domestic market or within the radius of 200 to 300 and few portions 10 to 15% we are selling in the export market.
However, certain downstream industries will cater to. Catal 2 did have experience of some slowdown. Additionally, our performance this quarter was impacted. Rupee depreciation and compressed margin. That said that IGPL stand on a. Strong foundation renewed renowned for our operating operational efficiency. We are one of the lowest cost. Producer and largest producer of thalic in India. Second largest producer in the world. Over the years we have had built a reputation of excellence in producing high quality thalicondridide and a versatile product used across multiple end industries like paint, plasticizer. Pigments, polymers, coatings, the Domestic demand for. The thalic anhydride is expected to be around 5 lakh to 5 lakh 50,000 tonnes and which is currently growing at between 5 to 6% per annum.
With commissioning of PFI plant, the total. Capacity of IGPL today for thalic standard 2,75,000 tonnes. As a part of diversification as discussed earlier, we have committed 165 crore to set up a green field plasticizer project. With a capacity of around 75,000 tonnes. Which can be extended to 1 lakh ton. This facility will produce a range of. Plasticizer including DOPDI and ptp bdi BT. And will internally consume which resulted into. Internally consumption of 30 to 35,000 ton of thalic. We expect that plant to Commission by December 2025. We are also taking meaningful steps towards.
A sustainable energy economy and setting up the compressed biogas and the pyrolysis plant In Raichu, Karnataka. The CBG plant is currently under implementation while pyrolysis is just in the process. To getting the construction started. The CAPEX of the pyrolysis plant is. Around 16 crore which will convert most type of plastics available in the market into the fuel oil through the chemical recycling. In parallel we are improving our operating. Efficiency and reducing our carbon footprint by integrating the solar power and other renewable energy solutions in our existing facility. We have also initiated the phase replacement. Of conventional fuel through LS which is. The LSF1 diesel with the natural gas at our existing plant.
Looking ahead with these strategic initiatives, our. Expansion into the plasticizer foray to the green chemistry and sustainable driven investments will over up new growth avenue, build new capacity and deepen our customer relationship. Combined with our proven operational excellence they. Will put IGPL in a scalable long term growth trajectory.
Now coming to our financial performance, the. Total revenue stood at 481 crore compared to 594 crore mainly due to the. Lower productions and the sales revenue contribution. For the non selling business standard. In the current quarter Q1FY26 at 35. Crore, gross profit were at 102 crore. EBITDA was 13 crore. Our profitability for the quarter was largely. Impacted because of the 18 crore provision of M2M on our Euro loan which was 15.3 crore included in the other expenses and 2.6 crore 8 crore was. The part of financial charges and then there was some overall compression in the. Margin that has affected the overall financial performance.
With this I will conclude my presentation. And open the floor for the question and answers. Thank you.
Questions and Answers:
operator
Thank you very much. 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 handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Aditya Ketan from SMIF S Institutional Equities. Please go ahead.
Aditya Khetan
Yes, just a couple of questions. Yeah. Sir, during the quarter I believe the volumes are lower. Any particular reason? Sir, like I believe last quarter also there was a shutdown. And this quarter also the volumes optically look lower. Any reason, sir?
Pramod Bhandari
So there was some plan and some. Unplanned shutdown in our existing plant facility that has resulted into the overall lower. Production which was I think around 45. Or less than 45,000 ton. And similarly the sales was also in similar quantity. So typically we are expecting between more than slightly more than 50 on per quarter basis. But this time it was 10% lower.
Aditya Khetan
Got it. So this compression in gross margins is a function of lower volumes coupled with lower spreads.
Pramod Bhandari
So two things. Yeah. First the volume was typically has to. Be around 50,000 which was 10% lower. And second, there was a compression in margin. And third which is the EBITDA mainly impacted because of 18 crore or 18. And a half crore of provision of M2M. As you know that most of our debt which is around 22.5 million is in euro and euro has moved from 92 to 98. So this has resulted that we need. To provide the M2M provision in our. Financial statement for the quarter ended June 26.
Aditya Khetan
Got it. Which we are talking. I believe you had mentioned that it is a Euro loan. And sir, like every now couple of quarters like this number of M2M is coming. So do you attribute this as a one off or it would be a recurring number which would come every now and then as per the currency.
Pramod Bhandari
I think. I think we as a management decided. To dilute probably 50, 60 or 70%. Of our debt from Euro to the rupee currency. Because now the rate in rupees also. Reasonable and being global uncertainty you never know what type of moment between dollar. Euro and rupee will happen. So we will be subsidized in probably. Next month more than 60% of our loan from zero to.
Aditya Khetan
Got it. Going forward.
Pramod Bhandari
Going forward you will not see that much.
Aditya Khetan
Got it. Okay. Okay sir, into the annual report when we check. So this euro loan figure was somewhere around so 230 crore as a total loan out of which so 50 crore was a. Was a payable. So this is coming. It is on this complete amount, this 230crore.
Pramod Bhandari
Let me complete the total debt amount. Is around 227 crore. Out of that the net in the. Balance because we have prepaid certain debt of 1 of the lender 35 crore to net. If you ask me the total debt in the balance sheet on The June. Was 197crore which includes I think except. One loan most of that was in euro. And I think out of 22 million we will be 10 to 15 million. We will be able to convert in next one month.
Aditya Khetan
Okay. Okay. Got it. Okay sir, onto the operational part as I believe so Plastics as a plant is now delayed by three months from the earlier plan. Any sir clue onto the numbers how we are looking at the revenue EBITDA and bottom line for 26.
Pramod Bhandari
Will be. Starting the trial run in August September. But because of some delay in the. Approval from the institute authority it will be starting it now. It will be having a commissioning the operation by December. It is two to three months. But in a big project like that two to three months is normal. It’s subject to the various approvals which. You need to get. We plan that. I think it will be ramped up in January 10th March. You will be able to see a. Good amount of utilization. Beginning from April 26th onwards the overall. Revenue at a peak capacity will be around 1000 crore. Based on the today’s price of the. Various plasticizer which we are planning to. Produce at that level margin is expected between the. I’m talking about the gross margin between 10 to 12%. When I’m saying margin 10 to 12% it imply and indicate that we will be transferring the the Thali can write it at the market price.
Aditya Khetan
Got it. So just one last question. So compared to Q1 like current spreads are they. Are they better like compared to the historical average or are they in similar lines? Sensor, what number are we looking for? FY 2016 EBITDA.
Pramod Bhandari
So I will not like to comment on a beta Specifically it is whatever is the market margin we will be. Having hundred to 120 above. I believe from next quarter onwards we will see 50,000 plus volume every every every quarter. And I think because of the compression. In the overall production for the last one quarter which is the Q1 our. Target for the yearly will be between. 2 like 5 to 2 like 10,000. When I’m saying 2105 to 6,000 will be internal consumption and around 2 lakh. To 2 lakh 5,000 ton will be. The annual sales volume for the phalic. And onto the spreads. But commentary current spreads, how are they like? The spread right now has improved. It was around 100210 for the last. Quarter it has improved between 120 250. But a spreads are moving between hundred and 150 for quite some time. And there is a moment of $2030 every quarter. So you it’s very difficult to pinpoint. But these are the bottom out. It can’t go below below 100. If it go it has to come back most of the plants it will. Be unviable to produce.
Aditya Khetan
Got it. Thank you sir.
Pramod Bhandari
Thank you.
operator
Thank you sir. The next question is from the line of Riya Mehta from Aequitus. Please go ahead.
Riya Mehta
Thank you so much for the opportunity. Also the first question is in regards to the spreads. So I think last quarter we said that it was around 150 to 200. So what I am guessing is now from 150 to 200 we are something around 100 to 150.
Pramod Bhandari
So typically it’s a function of the. Overall demand supply scenario in the international market. While the domestic demand continue to remain same which is a robust. And we are selling most of our. Product 90% in domestic market. 10% is generally exported. But for IG specifically, first the margin. Was between 110 to $120. The second the volume was low. And third, because of the M2 provision. We have taken that has resulted into the compression in the market. Otherwise it’s a function of demand supply. In the international market. When I am saying 100 to 120. It is the margin in international market. Not for the ig.
Riya Mehta
Right. And so my question was more in terms of our sequential basis. It has fallen from around the ballpark 170 to 125.
Pramod Bhandari
Yeah,
Riya Mehta
got it. My second question is in terms of that if we are guiding for 2, 5 to 210 then on a quarterly basis we will be doing more than 55,000.
Pramod Bhandari
So when I am guiding for 2, 5 to 210 that means we will be having a 2 like 10,000 ton production. 5 to 6,000 ton will go for internal consumption and around 50 plus for the next 3 quarters every month, every quarter.
Riya Mehta
Also we had taken a shutdown on Q4 only. So what happened? Because I think in Q4 we are pretty confident that there will be no shutdown this year. So what happened in Q1?
Pramod Bhandari
Q1 There was some unplanned shutdown and the plant Shut down which we have taken because we are integrating our existing natural gas because we are planning to. Replace the fuel, LSFO and diesel with the natural gas. So there was some integration of that. Pipeline happen in one of the plant. Then we need to take some certain. We are planning to use to replace the existing fossil fuel 80% of existing fossil fuel with the natural gas which will save 5 to 6 crores on employees basis. So that was the reason. There are a lot of technical things. But main reason was the integration on. The pipeline
Riya Mehta
5 to 6 crores and other expense this year annually.
Pramod Bhandari
No, not for this year. It gradually go up in this year but 26, 27 you will see the saving of 5 to 6 crores because the LSFO and the diesel will be replaced at all the points with metrics.
Riya Mehta
And what number of days was the plant shut?
Pramod Bhandari
Plant was sent around around 20 to 22 days.
Riya Mehta
And in terms of demand, how is our situation standing out? Because I of what I eat globally also we are looking at a little. The kind of growth has been a little subdued.
Pramod Bhandari
So if you ask me as such in domestic market I have not seen any impact. We are able to sell the similar. Type of product which was selling historically into the domestic market. When I’m saying domestic market, it includes the domestic players, the SCJ player and the EU players. However, there are some light concerns or you can say the demand which I have seen because of the US uncertainty in the duties as such, IG doesn’t. Have any direct impact because we don’t sell to Europe and US market. We sell to Indian market and generally. Middle east and Turkey, Middle East, UAE and Turkey market.
But some of the downstream players who are selling outside India say in Europe, China, they are rightly right now in uncertain phase because there is no clarity. In terms of the what duty. And even today when the Trump has announced the duty, the product by duty has not been announced. So it will be a product. In chemical Also there are 300 products certain chemicals like in pharma out of 300, 280 was exempted because they believe that as the essential needs.
So similarly in chemical also they need to come back with the list what are the products are exempted, what are. The projects they need to have a duty. So that uncertainty actually may impact some downstream because I think some of the. UPR and the pigments are going to Europe and US particularly. Otherwise in terms of Indian demand, I. Don’T see any problem for the phallic. Perfect and other areas like paints, plasticizers. CPC they all are doing very well.
Riya Mehta
Okay, so paint and plasticizers which form almost around 40 to 50% of our revenue, we don’t see any much impact there, right?
Pramod Bhandari
Not exactly. I will tell you the percentage wise the paint is around around 15 to 20 to 25%. And then plasticizer and UPR and especially. Chemical around 20 to 25%. And balance is the CPC segment which is also 25%. All three segments comprises around 70 to 75%. Balance are all other segments. So as such, in some season, some of the players say plasticizer in the. Rainy season, demand will be low or sorry, paint will be low, plasticizer will be high. In another season, that equilibrium because every seasonal some demand is going up, some size is subdued. So accordingly overall I don’t see any overall impact in the domestic market. In fact, if you ask me, July. August, September is very good in terms of demand.
Riya Mehta
Right.
Pramod Bhandari
Indian demand, global market, we need to. See how it pan out in next one or two months.
Riya Mehta
Right? Right. Also our peers have also reported losses. So I suppose this was an account of reduction in crude prices. And do we see the spreads increasing from around 100, 120 to say 150?
Pramod Bhandari
I think spread is already coming up. Next quarter I expect it has to. Be between 120 to 150. I think I’m not worried about that much about the spread because overall it has to come above 150. Because generally for most of the players. Below 150 it will not make commercial sense to produce. IG because of operational efficiency by product. Are able to do that. But in general it has to be above 150 in between average has to be around 200.
Riya Mehta
Are you seeing any cut down of production capacity by peers because of loss making or deep bread levels?
Pramod Bhandari
So production capacity I think, I don’t think because India has a demand of 5 lectern 5 to 550 IG produce right now around 2 lectern and other. Players also provide around 150 to 180. And then one player is also producing. Around 7080 which goes more in for the consumption. Even at that India is importing. If you look at the overall import in India, it is 16,410 last quarter. That means still India is importing 50. To 60,000 rental every year. So demanding India is not impacted. However, if we are not able to produce at optimal capacity, import will happen in India.
Riya Mehta
Exactly. So my point was at the current threat levels when the domestic players apart from IG who has a operational efficiency are not able to are making losses. And do we see them taking similar production cards or maintenance shutdown earlier to. You know reduce the volume.
Pramod Bhandari
So let me correct. IG is not making losses because of operation. It is because of. Because of 18 crore mpm that also we are correcting in next probably one month. Next one month you will see. You will not find after that there. Is any MPO charges. Right. Because. Because of global uncertainty. I don’t want to comment on the base. I’m talking about IG office. Of course the margins are compressed. But even at that margin we can make good money if we have a good volume. If our five plants are operating which. We expect from September October it will. Be five plants are operating at similar margin. We will make around annualized 100 crore plus current margin which is the lowest point. We expect margin to improve. Then our profitability will also improve accordingly.
Riya Mehta
Of course, of course. I was talking a consolidation in the industry with the supply going down.
Pramod Bhandari
I think already there are three players only there is no other player. So I think industry already consolidated in that sense.
Riya Mehta
I’ll get back to you for further questions. Thank you so much.
operator
Thank you ma’a m. The next question is from the line of Rohit Sinha from Sunidi Securities. Please go ahead.
Rohit Sinha
Yeah. Hi sir. Thank you for taking my question. One is on the. On the other expenses. As you mentioned that there is M2M adjustment. Apart from that I think power cost is also in our other expenses. Oh. How much was the power cost last quarter and in this quarter if you Can mention.
Pramod Bhandari
I will give you energy cost. I don’t have a separate breakup of the power cost. Energy cost for the last quarter was 16 crore. This quarter it was 17. So this increase as since as you have mentioned that plant was shut down and that. That. That is not having direct impact because. It’S a link with the lsfo. And this and the shutdown has no. Direct impact on the. On the energy cost. Because it remains in the range of 60 to 61 crore annualized basis for last so many quarters.
Rohit Sinha
Okay. Okay.
Pramod Bhandari
It had an impact on repair and maintenance last quarter when it was 12. Now today then current quarter it was 6 to 7 crore which is in line.
Rohit Sinha
Okay. Got it. Got it. And in on this power side only or energy cost only. Any. Any PL plan to reduce this in terms of adding renewable source or something to down the power source.
Pramod Bhandari
So there are two points. First whatever is the power consumption I think 75 to 80% is the announced waste you energy which is used 10 to 20% power in the External which is the government power use of LSFO and the diesel which we are using. And that is the cost in which you are seeing it now from that also we are started the solar power long back. Two years. Two years back we started the solar. Power plant of course for a small quantity. Now we are increasing that capacity. Second we are inducting the natural gas in our all the plants which has started for the last quarter and probably. Next one year you will see the ramp up. So the cost of energy which is coming today around 60 crore. You will see a saving of around 10% or slightly higher than that because the replacement of natural gas with the lsfo.
Rohit Sinha
Okay, okay. And secondly on the overall profitability side, I mean I was just looking at the quarterly trend what we are making around. I mean if we make 50,000 plus kind of volumes and. And with a decent spread we end up somewhere around 40, 45 crore kind of EBITDA this quarter. If we add back that 18 crore adjustments we would be in. In that similar range. But going forward, I mean in case the. I mean we are not able to achieve these 40 core kind of run rate in the EBITDA front are we. Are we in a.
In a. In a position to look for the CAPEX plan which we are planned for all these plasticizer or compressed gas thing. Would there be any increase in the dead side further in case. I mean. I mean I was just looking at the capital requirement. Maybe if we are not achieving to that kind of profitability angle.
Pramod Bhandari
I think I’m not worried about that because profitability if you. If you. If you remove the M2M charges for the timing. Overall company is making a cash flow for the last. Like let me give you example of last year. Last year The PETA was 112 and. Depression was 65 crore. So we have made around cash flow of 170 to 180 crore last year. We expect this year it has to be better. But it all depends upon how we. Wrap up the capacity of plasticizer and how we are operating our plants. Plants are world class.
Demand is there in the market for 70, 80% of our product. 20% is the export or eventually in October it will go to plasticizer. If we operate at a full capacity. I am talking about all five plants including plasticizer. We will be having a revenue between 3200 to 3300 crores. At that level. At that level, even if. Even if say conservatively our ebitda move. Between 12 to 18% or 20%. Even at 12% it will have a. 400 crore of EBITDA. Even if you take 10% it has 320 crore. So the challenge is happening is three front. When you are saying looking at this this particular quarter.
First the margin was compressed. The second point was the Malik prices is also continue to remain low. 830 to 840 which is supposed to be thousand plus. Third point the volume was lower. And fourth which is most important point is all the expenditure. All the expenditure of five plants like depreciation 16 crore is for the five plants. It is there. All expenditures like employee expenditures, the the repair, maintenance expenditure. All expenditures are put for five plants. Right. We are operating less than four. So that has also impacted the profitability. If volume improve and margins slightly improve everything will be fine in terms of profitability.
Rohit Sinha
Got it? Yeah. Okay. So and. And just 3,000. 3,200 top line which you are talking about. So this is when we are operating full for our pipe plant and plasticizer which I think would be in 28. Because, plus 26.
Pramod Bhandari
27. Not 28. 26.
Rohit Sinha
Okay. Okay. So FY27 still we are holding on to that 3,000 plus top line.
Pramod Bhandari
Yeah. Yeah. It will be 3,000 plus. Otherwise the plasticization will not be operating. You need to operate run consistently to feed to 70% of Swedish requirement of classified.
Rohit Sinha
Got it. That’s it from my side sir. Thank you. And all the rest.
operator
Thank you sir. The next question is from the line of Renuka from first Water Capital. Please go ahead.
Unidentified Participant
Hello sir. Thank you for the opportunity. So just on the other expense side again if I see on a year on year basis it has increased by about 20 crores. So like Q1FY25 it was 47 which has gone to 68 this quarter. So 15 crores is attributable to the mark to market loss. What is the balance? And given the fact that this cost will not be there going forward. Plus we have far cost saving. So will this run rate go back to the 45 crores quarterly.
Pramod Bhandari
So typically it is 45 crore only even for this quarter. Particularly the repair and maintenance. I will give you the breakup. Employee cost Last quarter was 26 crore. This quarter it was 24 crore. Energy cost last quarter was 16 crore. This quarter was 17 crore. Repayment maintenance cost last quarter was 12 crore. This quarter 7 crore. Sales cost is 11 crore. 10 crore. The only changes happen in the foreign exchange. Because foreign exchange in the last quarter 6.65. This quarter is a 15.31 crore. As an MPM we have provided in the other expenditure and the 2.65 crore. Is on the interest expenses. So the expenses of other expenses which you are looking at which include the mtm that’s why it looks slightly off out of way. Otherwise generally all expenditures are similar. There is no change except the last quarter when the repair maintenance was higher because typically 7 to 8 crore was a quarterly run rate. Last quarter was 12. So everything is in line. I think M2M which we are targeting. To sort out in next one quarter. Probably next quarter onwards you will not. See the wild changes because of this. M to M charges.
Unidentified Participant
Okay. And just on the CBG plant and other expansions if you can just give some detail as to how much capex and revenue we are projecting once they commission.
Pramod Bhandari
So CBG we are expending around 30. To 32 crore net of GSE around 29 crore. CBG the construction is already started. It is expected to complete by April 2026. It is expected to generate around 1 to 1 revenue. Like 30 to 33 crore will be the revenue 30 to 32 crore. And in all the projects which we are undertaking our criteria is IRR has. To be more than 15%. In this case also it has to be more than that. In CBG I think we already signed. Up with the supplier of the raw.
Material to produce and given the supply and in terms of the final product. It is a buyback arrangement by the government company hdbp, IOC and gil this type of companies. So that will add typically in terms of revenue around 30 crore. And paralysis project We I have completed. The basic and detailed engineering which is undergoing for last two months. Probably in next month, September onwards we. Will start the construction. It is also expected to complete in. A similar line with the appraisal 2026. So April 26 say June which is the ramping up.
From July onward you can see a addition of revenue of between 40 to 45 crore on account of the CBG and paralysis. In the paralysis project various types of. Plasticizers are converted into the methane gases and they are converted into the fuel. Oil which will be sold into the industry. It is basically the green venture to. Enter into the green side. We see a lot of opportunity and. Growth going forward in the CBG projects. This is the first trial project which we are setting up. Once this is set up, we are having a plan to set up another 4 to 5.
Unidentified Participant
Got it. So just to sum up from CBG and parallel top line you are expecting 40 to 45 crores correct?
Pramod Bhandari
On full full year annualized basis Right.
Unidentified Participant
And how much will that add in the bottom line?
Pramod Bhandari
Bottom line it will be adding between 8 to 10%. So right now will not commit. But you can assume it will between. 5 to 6 crore.
Unidentified Participant
Okay. Thank you sir. That’s awesome. I said I’ll join back with you.
Pramod Bhandari
Thank you.
operator
Thank you ma’. Am. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants participants in the conference call, Please limit your question to two per participant. The next question is from the line of Yash Naik from Kamakya Wealth Management Private Limited. Please go ahead.
Unidentified Participant
Yeah. Thank you for the opportunity. So what is the current level of pan input and have the have recent. Capacity addition by the competitor resulting in the oversupply situation in the market.
Pramod Bhandari
Typically the pen is imported in India between on a quarterly basis around 13 to 15,000 ton. Last quarter also there was a import of similar nature. And that is happening continuously post starting. Off the new production facility by another competitor. So you need to understand that generally. India has the duty anti independent duty and the basic custom duty. And we have BIS standard source to enable to not to allow the. Known compliant elegant guided into the country which. Is for the health. But there are certain lineage given by. The government in terms if you are. 100% UU, you can buy the product and sell it. You don’t need to comply with the. Duty and you don’t need to comply with the BIS test. In that case the 100% you guys prefer to buy in case there is. An opportunity from the international market. So even if India is self sufficient almost slightly higher than capacity than the Indian demand. Still there will be overall import in Indian market. Because some of the place still feel. That they need to import. Of course they carry the risk of forex trade, insurance, logistics, transportation, others. But still they import. So India for import you can assume it’s 50 to 60,000 ton. Which import will there when you assuming. Import you need to also consider that IG also export around 10 to 15% of their product. So net net export from India and import from India network will become zero.
Unidentified Participant
Okay. And sir with the auto xylene spread. Under the pressure and main price is about 20% yo by lower how do you see the spread trending in the. Next couple of quarters?
Pramod Bhandari
The gross margin for the last quarter. Was 20 to 27%. This quarter it was 19%. So there is a direct erosion of around 7 to 8% on the gross margin. The main reason was the decline in the margin. It’s an overall international market where the margin is driven by the demand and. Supply and I think it has also. Been backed because of the uncertainty in. The global market because of the tariff and other things. China put some duty on the downstream segment. Europe was in trouble around one year. Back because of the gas prices then. US is now playing the different tactics. So I think we need to wait probably one or two quarters before we. See the good uptick in the market margin. The margin is basically the sector of demand supply and that will be settled when there is a stability in the global market. Continuous fight is going on now Terry. War is going on. So all the players who are into the downstream productions or the production of various chemical and chemistry, the mindset, the production process as well as the incremental production to supply expansion everything got impacted because of these uncertainties in the market.
Unidentified Participant
Yeah, that’s it from my end. If I have any I will join Milt.
Pramod Bhandari
Sure.
operator
Thank you sir. The next question is from the line of Chirag Vicaria from Budharani Finance. Please go ahead.
Chirag Vakharia
Yeah, good afternoon sir. Wanted to just. I missed that number. Current spread is at what level sir?
Pramod Bhandari
Between 100, 220 in the market.
Chirag Vakharia
So secondly on the debt that you have said sir you are saying that you have around 220 crore debt, right?
Pramod Bhandari
Correct.
Chirag Vakharia
And. And how much is foreign debt?
Pramod Bhandari
Foreign debt is 188 crore.
Chirag Vakharia
And from this how much are you converting it to the rupee denominator?
Pramod Bhandari
I think first target is hundred crore. Okay. And then 50.
Chirag Vakharia
This will happen in this financial year FY26.
Pramod Bhandari
Yeah, yeah. I think 50 will be by September and then by December.
Chirag Vakharia
Okay. So 150 will get converted. Right.
Chirag Vakharia
Between 130 to 140.
Chirag Vakharia
130 to 140.
Pramod Bhandari
Because balance one debt is very cheap. Which is 0.7% or 1.1% under ECA facility which we don’t want to convert it.
Chirag Vakharia
Okay, okay.
Pramod Bhandari
But we will have some protection in. Terms of the hedging for that debt also. But right now all the debt which. We have in euro we are trying. To convert this pressure on spread.
Chirag Vakharia
What do you attribute this to in.
Pramod Bhandari
This quarter but geopolitical global uncertainty because global demand has to be stabilized for that. Because whatever is the global margin we get $120 number. So I think the Ukraine war, US policy for this plus China retaliations against that plus Indian and US relations, everything together. So many uncertainties are going on that. Has impacted the overall demand supply which. I believe has now improved. July Agnes. I have seen better improvement even in. Domestic market demand is much better in July Agra September. So I think we need to wait for three to six months before the global market settle on that side and any.
Chirag Vakharia
Any thoughts, any dumping happening?
Pramod Bhandari
Dumping I will not say but some of the players continue to import because. You don’t need to have BIC standards and other follow so you can import. Under the scheme and there you need to export your product. So the duty or the the BI. Extended is not applicable for certain player.
Chirag Vakharia
Okay sir. Thank you.
operator
Thank you sir. The next question is from the line of Shiv Patel from Scoop Investment. Please go ahead.
Unidentified Participant
I am audible.
Pramod Bhandari
Yeah.
operator
Yes sir.
Unidentified Participant
There’s your plasticizer plant produce only the 4 plasticizer you mentioned or it is. Flexible to produce other plasticizer as well.
Pramod Bhandari
So I have not got your question. Can you please repeat it?
Unidentified Participant
My question on plasticizer side. Does your plasticizer plant produce only four plasticizers you mentioned or it is flexible to produce other plasticizer as well?
Pramod Bhandari
It is flexible to produce other procedures.
Unidentified Participant
Yes. Means can produce other categories. Yes.
Pramod Bhandari
Yeah. I have just given you top four. It can. It will actually simulate.
Unidentified Participant
Okay.
Pramod Bhandari
And we are already producing for last two years.
Unidentified Participant
And are you looking to expand your plasticizer portfolio beyond current for you mentioned in coming years?
Pramod Bhandari
I think that I will not be. Able to comment it right now. Let first practices start then we discuss about it.
Unidentified Participant
Okay. And so is there any oversupply in market because of one of.
operator
May we request that you return to the question queue for follow up?
Unidentified Participant
Okay.
operator
Yeah. Thank you sir. The next question is from the line of Chirag from Keynote Capitals. Please go ahead.
Chirag Maroo
Yes, thank you for the opportunity. Most of my questions are answered just one question that we have almost one and a half months in the. In the Q2 down. What kind of spreads are we looking at currently? Is it 120?
Pramod Bhandari
Only 120. 250.
Chirag Maroo
Okay, so second thing I wanted to understand generally when. When we reach a spread of 100 we have seen internationally multiple plants have shut down. This was the case in FY24. Is that the case? Is it the case that is happening right now Also are we seeing any. Shutdown taking place right now?
Pramod Bhandari
I think right now it is not.Because of that but also because of lot of geopolitical issues already plants are. Operating at a lower capacity. So they are operating at lower capacity. The overall demand scenario has impacted because so many geopolitical. Some downstream indices are impacted because uncertainty in the duties. So as such we have not heard anything about the shutdown of plant. Of course there is a repair, maintenance and all that that is going on. As usual somebody extended that. But you will never know why it is extended. So that may be the reason. As such we have not seen because right now it has gone to 120. Now it has again giving up for the 120 to 150.
Chirag Maroo
Fair enough. And so are we expecting any catalyst change in the next couple of quarters?
Pramod Bhandari
So I think every year we will have one or two. This year we already had it for the next year we need to plan. It out Right now company has not planned that. So technical team will plan. Generally in a year we will have two because we have five planned. And every three year need to change the catalyst. So every year you will have two sundown assume.
Chirag Maroo
Right? Right. Perfect. And so last question from my side that the kind of guidance that you have given about thousand crores per stop line are this on current nitride prices or. Or it is. It is on. Or it is on a normalized levels.
Pramod Bhandari
No. At current market price of thalik we. Are expected to have a 2,200 crore of revenue which is there at the last year. If you operate four plants, if you add five plants then you have a. Revenue of 2700 crore which is 500 crore added. Plus if you add the plasticizer of. The 950 crore out of that you need to reduce the phalic of 450 crore. Then 500 crore net net will be added on plasticizer. So that’s why I say that if we have operate five plants including plasticizer. We will have a revenue between 3000 to 3200.
Chirag Maroo
Fair enough. With the kind of catalyst change and. The kind of prices which are in.
Pramod Bhandari
Line with the current market price.
Chirag Maroo
Perfect. Perfect. That is it. From my head. Thank you so much sir.
Pramod Bhandari
Thank you.
operator
Thank you sir. The next question is from the line of Madhur Rathi from Counter Cyclical Investments. Please go ahead.
Madhur Rathi`
Sir. Thank you for the opportunity. Sure. Some of the database that we follow. Sir, there has been a 10 15% decline in palette prices in China. So is this new answer that seems that the auto oxygen prices are stagnant. But thalit prices have declined by 10 15%. So would that mean that the spreads. Are going to increase even decline?
Pramod Bhandari
That is the reason the margin got impacted. The last quarter the Gross margin was 27%. This quarter it is 19.2%. 7 to 8% is a direct impact on the margin because of the raw material prices. And the Thali price.
Madhur Rathi`
answer is that the. So is that also the case for this quarter? Because it seems that prices have declined from 7,000 RMB to 6,200 RMB.
Pramod Bhandari
Right now the prices in the market.Is going between 90 to $93 for Thalic and around 80 to 81 is. Also dryly right now there is a. Slightly improvement compared to the last quarter. And that I’m talking about only July. July and half of the August. I think next 45 days we decide. What will the overall margin. If it remains same it will be better off than the last quarter current quarter.
Madhur Rathi`
Got it sir. Sir, my next question was on the plasticizer. Sir, would we be the lowest cost producer of plasticizer once we begin our production versus KLJ and other competitors.
Pramod Bhandari
So I will not say the lowest cost producer because we are setting up. Only the small capacity of 75,000 ton. We will have some inherent advantage because we are producing phalic and in that case the pricing of the thalic will be competitively lower because you don’t need to pack, you don’t need to transport it so that advantage will be there. But I will not say that we. Are lowest cost producer Because KLG also has the green in house thalik but. We will be very competitive.
Madhur Rathi`
Got it? And so this would have a 5. To 10% net margin. Incremental net margin on the 500 crore or that additional revenue that will get right.
Pramod Bhandari
That gross is 10 to 12 and. Net we are planning it move between 3 to 10% so you never know. But right now it is between 5 to 6. So margin keep on changing some product. Have 7, 8% somewhere 12, 13%. It depends upon which product you are. Producing and what is the margin at. That point of time.
Madhur Rathi`
So that was from mental. Thank you so much and all the rest.
Madhur Rathi`
Thank you.
operator
Thank you sir, the next question is from the line of Amit Mehendale from RoboCapital. Please go ahead.
Amit Mehendale
Thank you. Thanks for the opportunity. So my first question is on the. Plastic as a plan. Do we see that Q1 of next. Year which is Q1 26. We’ll have the plant scaled up fully. So that it does about, you know 900,000. The accepted revenue that we have we’ll start from 2.6.
Pramod Bhandari
So I mentioned last quarter also December. We are planning to commission. Then it will be trial run for probably two to three months. Then we start the production. So we don’t expect to reach 100% but it will be between 50 to. 60% for sure for the 26, 27.
Amit Mehendale
So what revenue are we? Is it?
Pramod Bhandari
Because once you start the commercial production. You ramp up quarter to Quarter basis it may be hundred percent, it may be ninety percent. But general guidance we given is fifty to sixty percent in the first year of production. Generally all plants if you look at they start with 50, 60. Then they reach 70, 80. And then they read 90 95.
Amit Mehendale
Correct.
Pramod Bhandari
You may. You may overreach. But for the purpose of guidance we. Are remain in line with what industry standard is.
Amit Mehendale
Right? Sure sir. The next question. Net debt. What would be the net debt? Just in for cash.
Pramod Bhandari
Net debt is zero because the cash on the balance sheet was around 300. Right now it’s 270. Which will be further added by 2030 crore. Very soon it is. Net debt is zero because debt is 227 which is further prepaid. And now right now is 197 against. The cash of 250 to 270.
Amit Mehendale
And the last question is on the imports. So for the imported products you know versus our what will be the difference in the pricing?
Pramod Bhandari
So assets no difference in the pricing except the freight transportation and the duty. If it at all levied which is the only difference. 2 to 3%. Otherwise it’s a competitive market price. And generally our pricing for most of. The customers are in line with the imported parity.
Amit Mehendale
That’s it from my end. Thank you very much.
operator
Thank you sir. Ladies and gentlemen, due to interest of time that was the last question for today. I now hand the conference over to Pramod sir for closing comments.
Pramod Bhandari
Thank you very much everyone for joining the call. We appreciate your time and showing interest in our company. In case you have any other questions please contact SG our investment advisor. You can send the mail to us. Thank you. Thank you very much.
operator
Thank you. On behalf of IG Petrochemicals limited that concludes this conference call. Thank you for joining us. And you may now disconnect your lines.