IG Petrochemicals Limited (NSE: IGPL) Q2 2025 Earnings Call dated Nov. 14, 2024
Corporate Participants:
Pramod Bhandari — Chief Financial Officer
Analysts:
Nirav Jimudia — Analyst
Srinath Sridhar — Analyst
Aditya Khetan — Analyst
Pradeep Rawat — Analyst
Unidentified Participant
Rohit Sinha — Analyst
Naitik Mody — Analyst
Rahul Jagwani — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to IG Petrochemicals Limited Q2 and H1 FY ’25 Earnings Conference Call.
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 risks and uncertainties that are difficult to predict.
As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask question after the presentation concludes. [Operator Instructions]. Please note that this conference is being recorded.
I now hand the conference over to Mr. Pramod Bandari, Chief Financial Officer, IG Petrochemicals Limited. Thank you, and over to you, sir.
Pramod Bhandari — Chief Financial Officer
Thank you very much. Good afternoon, everybody. On this call, we have joined by SGA, our Investor Relation Advisor. I hope that everyone was able to review our financial results and the investor presentation, which were uploaded to the Stock Exchange on our company website.
After providing a quick overview of the recent industry development and IGPL progress, we will proceed to the operational and financial highlights for the quarter and the six months ended September.
Over the last few quarters, the chemical industry has faced several challenges, including the subdued price volatility in the crude markets, rising freight costs, moderate demand from the Western markets for key chemicals. This has softened the performance of many prominent Indian chemical manufacturers, particularly those export to the export market, commodity products are reliant on the raw material from the Europe or China. No company is entirely immune from and we are not exceptional. However, the impact on IGPL is minimal as our primary raw material sources as well as the customers, which is around 80% to 90% are in a range in the domestic market in the range of 200 kilometer to 250 kilometer radius.
Our key product realization remain more or less steady. Additionally, we have observed that there are many European refineries who are struggling and sustaining — to sustain their operations given the current cost price moment environment and slug increased demand for the key products. Though we expect demand of phthalic in India is in the range of 500,000 to 5,50,000 tonnes with an annual growth of around 5% to 6%. The PAN and the OX spread has come back to between the 150 to 200 range, which is the historical average for last five years to 10 years.
In the first half of FY ’25, we have registered a total revenue of around INR1,082 crores with a 15% year-on-year growth. We have seen some sign of recovery in the selected end users industry with a notable [Indecipherable] in demand for the Phthalic Anhydride. IGPL is renowned globally for its efficient Phthalic Anhydride production ranking as one of the second largest producer. This versatile product is essential for various industries like paint, plastics, pigments, polymers, coatings. Post-PA4 commissioning, our total capacity stand at 2,75,000 tonne. Apart from PAN, our product portfolio also include maleic anhydride, benjoic acid, DEP, and other products. We are also on the — plasticizers is also under construction.
For the capex, we would like to highlight two points as our plant strategic company is investing in the greenfield unit at Taloja, Maharashtra to produce various types of plasticizers like DAP, DBP, and other plasticizers. The project is under construction stage and the plant is expected to complete by Q3 FY ’26.
Additionally, the company is also planned to set up the CBG plant that has moved from planning stage to now the design and implementation stage. We have already awarded the contract of EPG to set up the CBG plant and that plant is also expected to come online by the end of December 2025.
Now coming to the financial performance for the quarter ended Q2 FY ’25, the total income stood at INR587 crore, reflecting a growth of 15% year-to-year basis. Revenue contribution from non-Phthalic business stand at 9%, EBITDA was around INR69 crore with a margin of around 11.7%. The financial performance of the company was mainly impacted because of the interim charges we have to provide for the euro loan because we have that most of our debt is in euro and we have to provide the interim charges, which is reflected in the ForEx loss as well as interest loss with the total amount to around INR12 crores, which we have provided because the euro has moved from INR89.6 to around INR93.5. The profit-after-tax stand at INR28 crore for the quarter.
On the half-year ended total revenue stand at INR1,182 crore, a growth of 10% year-to-year basis. Revenue contribution for the six months ended is INR92 crores, which is 8% of the total revenue. Gross profit margin has improved by 300 basis points. EBITDA for HY1 came at INR140 crores with operating margin of 11.9% and profit-after-tax is around INR64 crores for first half. As of September 2024, our company maintained a net debt-free position with a strong balance sheet and cash flow by prioritizing our long-term growth. We believe that we will build a solid foundation for our future. We have increased our capacity. We are well-prepared to seize the emerging opportunity, including the rising domestic demand. Additionally, we’ll continue to expand our product offering, which will help us to build a sustainable growth-based portfolio and widen our capability to serve the paint [Phonetic] industry.
With this, I would like to conclude my presentation and open the floor for question-and-answers. Thank you.
Questions and Answers:
Pramod Bhandari
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions]. The first question is from the line of Nirav Jimudia from Anvil Wealth. Please go ahead.
Nirav Jimudia
Yes, sir, thanks for the opportunity. Sir, I have three questions to ask. So first is on the volume numbers for Q2. I think predominantly we were in the range of 45,000 tonnes to 48,000 tonnes of volume on a quarterly basis. So has that volumes ramped up during Q2? And if you can also share how are the things looking up for Q3 and Q4 in terms of the overall volumes?
Pramod Bhandari
So as indicated last time, we are in the range of around 48,000 tonnes for the last quarter and we are expected to have about 50,000 tonnes for the next quarter and probably after that, we will be touching 55,000 tonne. So, for the guidance which we have given earlier for the entire year, the volume is expected to be between 2 lakh tonnes to 210,000 tonne for the current year and expect it to be around 2,30,000 tonnes to 2,50,000 tonnes for the next year.
Nirav Jimudia
Got it. And sir, was there any catalyst change happen during this quarter for any of our tonnes?
Pramod Bhandari
No, there was no change in catalyst, but there was some disruption happen in one of the units for eight days to 10 days. Catalyst change is expected probably next quarter. Management is yet to take the final call for that same. But every year, we need to change catalyst in one or two plants because every three years you need to change. So for this year, we have already taken the shutdown once for the last six months and we are expected to take probably one shutdown in next six months.
Nirav Jimudia
Got it. Got it, sir. Sir, secondly, in our earlier discussion, you were mentioning that the newly commissioned tonne could be lower in terms of the overall opex cost. I think something close to around $20, $30 as compared to the prior portals what we have been currently having at a single location. So just wanted to understand from you, like is there any chance of or any scope of opex reduction in the earlier four tonnes or are we undertaking any projects there?
Pramod Bhandari
I understood that. There are two three things which is happening is first, since all plant has similar locations. So all the infrastructure like the power utilities teams are commonly shared including the manpower. So overall cost compared to the four-plant plan will be lowered by $20 to $30 on overall individual number. On overall basis, it will be $10 to $15 per tonne.
Second, we are implementing a lot of initiatives like we are planning to replace the FO which we are using to restart any plant that will be replaced with the natural gas. We have already given the order for implementation. So probably ’26-’27 you will see there is an impact because there is a price gap of around 15% to 20% compared to the fuel oil or LFFO we are using compared to natural gas. Secondly, we already implemented the solar power plant for our warehouse and other things. So that has reduced the overall power cost for some portion of the power through which we are generating solar power. We are evaluating to expand it. Earlier the policy for the solar power was the government was giving you a fixed return for solar power, which you are generating. However now the policy for last few years back it has changed the total power unit you are consuming. Out of that the total unit you are generating are reduced and then you are getting the advantage of the current unit rate. We are paying INR9 to INR10 per unit. Earlier the advantage was INR2.50. Now we are getting the advantage INR9 for any other natural resources-based power we are generating. So that has already been implemented. The balance will increase that capacity by 50% to 100% under evolution. That is a good move for the industry. If you are able to generate the power from other material renewable resources and it is using your cost for your overall power for the current rate that it is beneficial for the industry.
Nirav Jimudia
Okay. So, sir, you mentioned that FO2 natural gas could happen in FY ’26-’27. What sort of annual benefit could accrue to us once these are fully operational? And given the current difference of 20% between both the fuels.
Pramod Bhandari
Annual advantage because you are aware that most of the power which we use in our plant is the steam generated through the process. So there is very minimum power we use but on annualized basis for the FO2 replacement of the gas we expect between INR4 crore to INR6 crore of annual advantage in the savings. Similarly, for the power plant of the solar power base, we expect minimum INR1 crore or INR2 crore of saving annualized basis.
Nirav Jimudia
Okay, so you also touched upon the user industries like paint, plasticizer, pigment. So if you can share your views in terms of the consumption of Phthalic between these major three sectors like paint, plasticizer, and pigment? And how do you see the thing shaping up over H2 in terms of these three demand areas?
Pramod Bhandari
So the majority of the three components, the same plasticizer, and the PPC they are the major three, which are consuming around 40% to 50% of the overall. Paint is around 20%. PPC is also 20% to 25%. Plasticizer is between 10% to 15%. These are the three main. Apart from that we are selling it to the specialty chemicals, the UPR, and other things. The UPR is the one segment, which was actually two years back around comprised 2% to 5%. Now it’s around 10 to 15%. So we have seen the demand growth in specialty chemical and the EPR segment. Balance all areas are steady around same type of range which we have indicated.
Nirav Jimudia
Got it. And the last from my side is in second quarter we have reported non-Phthalic revenue of 52 crore. So what was for Maleic and benzoic acid put together?
Pramod Bhandari
I think it is because the plant capacity was around 45,000 tonnes to 50,000 tonnes. So the plant was150 tonnes, which has been produced from revenue is around INR15 crore to 16 crore. INR20 crore to 25 crore is for the DP. Balance is for other income and other products.
Nirav Jimudia
Got it, sir. Thank you so much sir and wish you all the best.
Pramod Bhandari
Thank you.
Operator
Thank you very much. [Operator Instructions]. The next question is from the line of Aditya Khetan from SMIFS Institutional Equities. Please go ahead. I’m so sorry, the line for the participant seems to be disconnected. The next question is from the line of Srinath Sridhar. Please go ahead.
Srinath Sridhar
Good afternoon sir. My first question is what was the average realization?
Pramod Bhandari
Hello.
Srinath Sridhar
Yeah. My first question is what was the average realization of Maleic in Q2?
Pramod Bhandari
Specifically, we don’t comment about the specific product realization but in general, the realization ranges between 95% to 105%
Srinath Sridhar
Okay. In September, last two weeks of September, the PAN and OX spread had narrowed to almost $90 per.
Pramod Bhandari
Your voice, please. Can you repeat again because your voice is not clear.
Srinath Sridhar
Is it better now?
Pramod Bhandari
Yeah.
Srinath Sridhar
Yeah. So wanted to know what the average PAN OX spread is in October and November so far because in September it had dropped to $85, $90 per tonne in the last two weeks.
Pramod Bhandari
So what happened is. So for the last quarter ended September, which is July, August, September the margin is between 150 to 200 or 100 to 200. However, there was a complete decline in the OX prices which is followed by the OX and the PAN. So when there is a declining market then generally what happens is margin although good but you are impacted because you continue to carry the inventory and the price are continuously going down. So that has impacted your inventory valuation and the overall dilution for the product. The margin compared to the June quarter has actually improved.
If you look at the gross margin level, the margin has improved but the inventory and other things has also impacted your profitability. So your specific question answer is the margin was very thin into the market, which was around $50 to $100 to $110 for last quarter. This quarter it has improved average around $150 to $170.
But you can’t look at margin on a margin standalone business you need to look at along with the declining trade and the inventory.
Srinath Sridhar
Right.
Pramod Bhandari
So I’m still not able to get your voice here.
Srinath Sridhar
I’m asking you in October, has the spread still remained at $150, or has it come down?
Pramod Bhandari
In fact, spread is good. If you ask me for last week, three months, and even the current quarter the spread is good. It is between $150 to $200 which is the historical average spread is good.
But once the prices of OX and the PAN settle then you will be able to realize the full potential of that spread.
Srinath Sridhar
How do you see the trend going forward, sir from here for the next six months?
Pramod Bhandari
I think I generally don’t comment for future but as of now looking at the market and the demand spread seem to be stable. There is a good demand in the market between 510,000 tonnes to 550,000 tonnes and all the other segments of downstream, which were not doing well probably from December to May and June are recovered well and they are doing very well. When I’m saying downstream segment include paying plasticizer, pigment, paint, especially chemical, they have recorded not compared to the first six months of January from now June to upcoming.
Srinath Sridhar
Okay. And last question is what is the amount of inputs that is coming from other Phthalic? Is there any dumping going on in India from China and stuff?
Pramod Bhandari
So, you will not say the dumping but import discontinued to happen in India. The last quarter imports got around 15,600 tons to India.
Srinath Sridhar
Okay. And has it seen an inclining trend or a declining trend?
Pramod Bhandari
So I think in April and June then one more player. Plasticizer has started their production. Then the import which was typically 25,000 to 30,000 has declined to less than 10,000. Now it is ranging between 12,000 to 15,000.
Srinath Sridhar
Okay. Thank you.
Operator
Thank you very much. [Operator Instructions] The next question is from the line of Aditya Khetan from SMIFS Institutional Equities. Please go ahead.
Aditya Khetan
Yeah, thank you, sir, for the opportunity. Sir, my first question is onto the volumes part. The last quarter you had mentioned that there was a shutdown because of which the quarterly volumes were around 46,000 tonnes if I remember it correctly. So for this quarter, ideally it should have been around 52,000 tonnes from the base capacity. Adding on to the PSI could have been around 3,000 tonnes to 4,000 tonnes additional. So 55,000 tonnes. I understand that. But we were not able to utilize the capacity for our existing units properly because of some other issues happening at the plant. It was around 48,000 tonnes. We expect the next quarter will be between 50,000 tonnes to 52,000 tonnes and then we can expect between 52,000 tonnes to 56,000 tonnes. We are still. If you look at the overall capacity utilization size, we are between three, three and a half to four plant operationalized. Total capacity right now utilized somewhere some little bit change in catalyst, somewhere there is some requirements from the government side for the inspection of boiler. So right now we are operating on an average four plants. So that’s why you are not able to see the full reflection of PFI and the PFI will be reflected. Then your capacity utilization will be between 53,000 tonnes to 55,000 tonnes. We are still 10% below that, 10% to 15%. Okay. So all these five plants, when are we expecting this to come on stream, like by Q4? Generally, by Q4 working three sets for catalyst. Sometimes Q4, Q3 is when we expect for some inspection. So something is going on a continuous basis for the statutory requirement. We believe by ’26, ’27 you will be able to see the full operational of all five plants, ’25, ’26, sorry. Okay. But on sequential basis also like we have witnessed the improvement in spread for the [Indecipherable] generated. I believe so now these levels of spreads would be very comfortable when we look. One, two, three quarters back we were standing at a loss in terms of EBITDA. Now we have read a sizable like chunk of around INR60 crore, INR65 crore of EBITDA. So sir, how sustainable you see these numbers in the coming quarter? What are you expecting?
Pramod Bhandari
This number is sustainable easily. But that is on still the 75% of the volume, volume has to go to 90% to 95%. As I mentioned, the total capacity is 75%. If you take 90% of volume has to be idle when all plants are operating between 240,000 tonnes to 250,000 tonnes. That means if you divide it by four it has to be around 55,000 tonnes to 60,000 tonnes at optimal capacity relationship of all five plants. So we are still far away from around 20% to 25% on that. So that is one part. One is the improvement in the overall operations for the increase in volume.
Second, the margin is I think is visible. Okay. But if we will see the continuous demand from the downstream segment we can see further improvement in the market.
Aditya Khetan
Perfect. Also sir, in your opening comments you had mentioned that the realization has been quite steady. But now with the crude oil prices declining have you seen any sort of decline into the Phthalic and the Maleic and sizes also as of now? And what are you expecting for second half?
Pramod Bhandari
So I mentioned that there was a continuous declining trend from the last quarter, which has impacted in terms of the inventory and other valuations. However, the margin continues to remain good. But when there is a decline in rate then the customer has to wait and watch for the prices to stabilize and you are continuously manufacturing plant. You need to carry the inventory and then you have some impact on the inventory valuation. When the prices are stabilized you are able to achieve your optimum potential for the profitability. Now the prices have stabilized and if we continue to have that similar margin we see a good profit.
Aditya Khetan
Got it. My last question is on to the non-Phthalic business. So in first half we have done almost around INR90 crore of top line from the non-selling business. If we analyze it somewhere around INR170 crore to INR180 crore should be done by the company. But this figure again would be you can say a high of the last four years because 170 crore of the non-Phthalic business we have done in 2023. So what is driving this growth into the non-Phthalic business at a time when the Maleic Anhydride prices are still below the PAN prices?
Pramod Bhandari
Yeah, so the reason is very simple. First, we are fully utilizing our DEP capacity. DEP right now is around at INR25 crore, INR24 crore to INR25 crore on a quarterly basis. So that is the one segment which has come up to optimum capacity utilization. Second, we are in the range of INR15 crore to 16 crore for the Maleic. However, if you ask me is it the level right? No, because there are two reasons for that. We expect Maleic at INR25 crore per quarter but right now it is INR15 crore. There are two reasons. First is the quantity because they are on and off operationalize around 3.5 plants to four plants compared to five plants. So one is the quantity because if you are not operating all the plant’s Maleic quantity will be lower.
Second the price of the Maleic is 20% lower than Phthalic. Typically the Phthalic is between INR1,000 crore to INR1050 crore. Historically Maleic has to be 1,250. But right now the Maleic is between INR800 crore to INR850 crore. So these two reasons have kept the Maleic’s potential revenue from INR25 crore to INR15 crore. So INR15 crore, if you analyze INR60 crore, ideally it has to be INR100 crore. So that is the second reason.
So today when we are talking about we have INR25 crore of the optimum utilization of DBP, INR25 cror, INR15 crore is Maleic, which can probably go up to INR20 crore to INR25 crore if there is a correction in the pricing. Improvement in the pricing and overall improvement and other income also added to that because of the INR7 crore to INR8 crore on account of the other income and some other trading. The drawback, the sales of [Indecipherable], export incentive all put together is putting into the other. So the key component is Maleic and DEP. Okay. Got it, sir. Suppose, sir, if the malic and added business comes to the normalized level what you’re paying of 25 crore. So adding Maleic, DEP, and the other income. So we are talking of INR65 crore per quarter from the non-Phthalic business. So that means somewhere around INR220 crore of top line from the non-Phthalic business. Yes.
Aditya Khetan
Historically, sir, like in FY ’23 we had touched only INR170 crore. I think that time the Maleic business has been normalized and DEP also was running at, you can see near optimum level.
Pramod Bhandari
But the book has recently touched the optimum level. It was between INR10 crore to INR12 crore. So now it is INR25 crore. And the Maleic at that time was generating from the three plants. Now we have five plants. Volume has to pick up for the Phthalic then the Maleic sale quantity will improve and price. So peak potential of Maleic and DEP is INR200 crore.
Aditya Khetan
Got it. Sir, one last question. If I can squeeze in. So the volume guidance of PAN what you have given of 2,10,000 tonnes. How much would be? Yeah. So, sir, how much would be the internal consumption for DEP?
Pramod Bhandari
So this is except internal consumption. That means internal consumption of the DEP is required around 30,000 tonnes. Of 8,000 tonnes, we are consuming around 2,500 tonnes. So that is excluding because when I’m doing guidance for two to 10, this is actual sale of select to outside world.
Aditya Khetan
Got it. Thank you, sir.
Pramod Bhandari
Thank you.
Operator
Thank you very much. [Operator Instructions] The next question is from the line of Pradeep Rawat from Yogya Capital. Please go ahead.
Pradeep Rawat
Yeah. Good afternoon and thank you for taking my question. So I have one question. So, sir, you witnessed some kind of inventory losses in this quarter. So our margins were.
Pramod Bhandari
I will not say directly inventory losses because this is the phenomena. There is a continuous decline in the prices of your raw material and the final product and you continue to hold some inventory INR5,000 to INR6,000 crore. So all inventory losses and gain are inbuilt in your system because it is something which you don’t calculate separately because gain is also inbuilt. So it is not right to say that you have got a loss neither it is right to say it’s profit. It’s part of the business. But, of course, it has impact on the valuation.
Pradeep Rawat
Yeah. Understood. So it must have artificially. It depends our margin this quarter is that understanding correct?
Pramod Bhandari
Right.
Pradeep Rawat
So if those like artificial losses are not there or what would be the margin for us for this quarter?
Pramod Bhandari
If there is no impact of [Indecipherable] we have impact of [Indecipherable] around INR11 crore to INR12 crore on the euro and similarly, INR20 crore was the exception for this quarter.
Pradeep Rawat
So it’s total INR32 crore.
Pramod Bhandari
When I’m saying INR20 crore, we need to reduce the taxes also. So INR10 crore to INR15 crore would have been extra if there is no exceptional things like that.
Pradeep Rawat
Okay, understood. Okay. One suggestion. If you can include prices and spread of Phthalic Anhydride that would be great in our presentation.
Pramod Bhandari
So the challenge is that we can do it for the market because what happened is market has a different set of margin. While IGPL because of the advantage of the operational efficiency byproduct has a generally $100 to $150 over and above the market margin. Specifically don’t give that because it create confusion because when you look at the market you will set $100 $150. When you look at IGPL margin you say $250 to $260. So whatever is the market margin IGPL margin will be $100 to $120 higher than the market because of the other other things associated with our production efficiency and all.
Pradeep Rawat
Understood. Great, sir. Thank you. Thank you and wish you all the best.
Pramod Bhandari
Thank you.
Operator
Thank you very much. The next question is from the line of Chirag [Phonetic] from Udrani [Phonetic] Finance. Please go ahead.
Unidentified Participant
Good afternoon, sir.
Pramod Bhandari
Good afternoon.
Operator
Can you throw some light on this compressed [Indecipherable]? When is then this will get commissioned. What is the payback and some details on it, sir?
Pramod Bhandari
Okay. So we were evaluating last quarter where we have discussed. We were evaluating that project. That project is coming at in Karnataka in Raichur. The project will cost up to INR32 crore including the GST and capacity, net of it will be INR26 crore, INR27 crore. The project, we have already given the contract to set up that EPC contract as well as the plant machinery contract to set up by a player in domestic market. The plant is under designing stage and it is expected to be set up and commissioned by December 2025. It is expected to generate around INR16 crore to INR18 crore of revenue and expect to have between 15% to 20% IRR.
Unidentified Participant
15% IRR.
Pramod Bhandari
Yeah, 15% to 20%. It depends upon the final product price because CBG is blended with the CBG. Whatever is the CBG price, government will give it to you. There is a particular formula to determine that and we have a raw material like Napergat and agro-based which is tied up and available in the market. So, based on that margin will vary and the IRR is expected between 15% to 20%. That is the first plant or you can say the first plant to trial and test the CBG market. Once it is successful. We are planning to replicate the similar type of plant in different locations.
Unidentified Participant
Okay. The second thing on the debt. Can you I mean so you said you are net debt-free, right?
Pramod Bhandari
Yeah.
Unidentified Participant
But so what I understand is what you have shown in your numbers is INR400 crore odd of borrowing.
Pramod Bhandari
Yeah, I will explain it to you. We have a total term debt of INR266 crore, INR266 crore.
Unidentified Participant
Okay.
Pramod Bhandari
And cash was around INR300 crore plus. There are debt which is the usage of CCN bill discounting which is INR110 crore additionally added in this quarter because at the end of quarter, we are not able to realize the money from some of the players. So we need to discount the bills. The sales business that will be normalized by the end of December.
Unidentified Participant
Okay.
Pramod Bhandari
Actual debt remain INR266 crores on the books today. Okay. Okay, sir. And sir, just last your thoughts on sir, how is the demand seen on from your end clients, sir? Is it good or you see some struggle still going on, sir? No, I think for the quarter September the demand actually has improved a lot compared to the June quarter and we continue to see the good and robust demand because then all the downstream segments, whether it’s the paint, plasticizer, pigment, PPC, specialty chemicals all have improved. They were impacted when there was a geopolitical issue between Russia and all that European players were affected. Now everything has come on stream and we expect that demand to continue to remain robust and continue to grow at 5% to 6%.
Unidentified Participant
Okay, sir. Okay. Thank you, sir.
Pramod Bhandari
Thank you.
Operator
Thank you very much. [Operator Instructions] The next question is from the line of Rohit Sinha from Sunidhi Securities. Please go ahead.
Rohit Sinha
Yeah, thank you for taking my question, sir. Some of my questions are already answered. Just one thing to check at this time we have some employment adjustment on the finance cost. So in past or any time when we have observed this kind of bigger adjustment or this is the first time we are witnessing in numbers.
Pramod Bhandari
So typically the euro is very less volatile. It may say EUR1 to EUR1.5 compared to rupee. So it is less than a crore. So there is no impact. So typically finance cost for all term loan including working capital is around INR8.5 crore to INR9 crore, which analyze at INR35 crore to INR36 crore or INR37 crore. So this time, because there is a loan in the euro because we have bought all the equipments from Germany and there is a euro-based loan. So the rate has moved from INR89.25 to INR93.75 or INR94 decidedly, so the jump was 6% in the quarter. That’s why the MPM charges and MPM charges need to be provided every quarter.
So next quarter now the rate has again moved to INR92. You will see the positive side of that, that this rate will be there will be gain on the formation next quarter. So that is under as per the Indian accounting standard. We need to provide that. As such it doesn’t have any impact on the balance sheet or the P&L in terms of the cash flow.
Rohit Sinha
Okay. So for full year maybe as you were highlighting that INR35 crore, INR36 crore kind of interest cost would be there. So at the full year, it would be that similar range, correct?
Pramod Bhandari
Yes.
Rohit Sinha
After adjusting all this entire thing. Okay.
Pramod Bhandari
Because it will result to sometime gain sometimes loss and it has hardly any impact.
Rohit Sinha
Got it. Yeah, that’s it from my side. Sir, I’ll come back in queue. Thank you.
Pramod Bhandari
Thank you.
Operator
Thank you very much. The next question is from the line of Aditya Khetan from SMIFS Institutional Equities. Please go ahead.
Aditya Khetan
Yeah, thank you, sir. For the follow-up. Sir, in your opening remarks you mentioned that some of the global players are struggling. Any ideas, sir, like which players you’re talking about and are there any closures in terms of capacity we have seen in China on petrochemical side?
Pramod Bhandari
So the global. When I mentioned global I’m not referring to the petrochemical. I’m saying in general the refinement business is Europe is not going. So there are challenges in the Europe because of the gas prices have increased, the manpower cost is high and there is a change in demand. Europe petrochemical players are designed in such a way to give the product back to Europe. They are not designed for the purpose of exporting because they are not cost competitive compared to India and China.
So when I’m saying they are struggling that means there are challenges in that segment and there may be chances. Right now I don’t have any information what has change. There were some instances in Taiwan and other places Korea where it was changed. But in next three years to five years you will see a lot of chemical industries or the players either sold out or closed out in Europe. That will give the advantage to the Indian player in the downstream segment when they are increasing the capability two times, three times, then it will be a big jump into the overall demand for chemical.
Aditya Khetan
Okay. Sir, any idea onto the domestic players or any global players who are expanding the capacity?
Pramod Bhandari
I think domestic metal there are three players IGPL and the two other players. One is [Indecipherable]. They are I think within public domain. In global, player side, I have not listened anything that they are increasing the capacity and Europe and America maybe some places they may be doing some new bottlenecking, increasing the capacity by 5% to 7%. That is not generally in the public domain. New big capacity is coming up.
Aditya Khetan
Okay. And sir, annual [Indecipherable] rate for finance cost what you mentioned of around INR34 crore to INR35 crore. So that will be the replicate we have to build.
Pramod Bhandari
It will be between INR9 crore to INR10 crore per quarter for IG. So balance, which you are seeing the swing of INR5 crore to INR7 crore is on account of interim charges.
Aditya Khetan
Got it. Okay. Thank you.
Operator
Thank you very much. The next question is from the line of Naitik Mody from OHM Portfolio. Please go ahead.
Naitik Mody
Yeah. Hi. Thanks for the opportunity. So what is the capacity available for production for quarter one and quarter two?
Pramod Bhandari
So capacity available. What is the meaning of capacity available? When you look at all five plants and capacity is 275,000 tonnes and around 250,000 tonnes is the capacity. When you’re saying available. 250,000 is I feel we can produce at any point of time.
If you divide it by four it is 62,000 tonne per quarter.
Naitik Mody
So what was the utilization for Q1 and Q2?
Pramod Bhandari
You can say that the utilization for that is around 75% to 80%. Typically we have a utilization of 90% historically for last 20 years.
But there are some change in the catalyst sometime unplanned, sometimes the regulatory requirements we are not able to reach up to the potential of 90%, which is our historical capacity utilization. Now we are at 78% to 80%. We expect probably in ’25, ’26 we will be around 90%.
Naitik Mody
Okay. And so what is the difference between this 275,000 tonnes and 250,000 tonnes, what is the balance 25,000 tonnes loss?
Pramod Bhandari
See, 275,000 tonnes is the total capacity. But we are counting 90% is the extended capacity in the industry. So that is why 275,000 tonnes, we are saying 250,000 tonnes because the balance 25,000 tonnes capacity is lost because of change in practice and restricted requirement. That is the industry norms.
Naitik Mody
Yeah. Okay, thank you.
Operator
Thank you very much. The next question is from the line of Rahul Jagwani from PGIM. Please go ahead.
Rahul Jagwani
Yeah, hi sir, is there any specific reason we have the euro loan? Yeah, all our equipment for Phthalic are from Germany, and in Germany when we are paying, we are getting the advantage of ECA. ECA is a system through which you can get a fixed amount of loan at a fixed rate. For PA 3, PA4 we have taken loan, for PA5 because of the paucity of time, we have opted for the Indian base euro loan because all equipment are denominated in the euro, we have opted for the euro loan for that. So blended cost of the euro loan is around 4.5% to 5%, 5.5% now. So compared to the dollar it is cheaper, there is a lower fluctuation and compared to the rupee loan it is 3% to 4% cheaper. So that is the reason. And the ETA facility which is a fixed interest at very low interest is available only if you are taking loan in that currency of a country to which you are taking product from. Okay, sir. Understood. And out of this term, there are 266. How much is the euro loan component? It is around 152. Okay. And so what is the repayment time for this?
Pramod Bhandari
All loans are two years and more than five-year repayment. Now I think we have studied now four years, four and a half years.
Rahul Jagwani
Okay. Okay, thank you.
Operator
Thank you very much. As there are no further questions from the participants, I would now like to hand the conference over to the management for the closing comments. Thank you and over to you, sir. Thank you very much everyone for joining this call during the peak market hour. We appreciate your interest in the company. If you have any query, please contact our invest relation advisor or you can directly send us a mail. We will be happy to respond. Thank you very much and have a nice day. [Operator Closing Remarks]