IG Petrochemicals Limited (NSE: IGPL) Q4 2025 Earnings Call dated May. 22, 2025
Corporate Participants:
Pramod Bhandari — Chief Financial Officer
Analysts:
Aditya Khetan — Analyst
Nirav — Analyst
Raghav — Analyst
Gunit Singh — Analyst
Chirag — Analyst
Akshay Kothari — Analyst
Rohan — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to IG Petrochemicals Limited Q4 FY ’25 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. 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 the date of this call. These statements are not the guarantees of future performances and involve risks and uncertainties that are difficult to predict. Should you need assessions during the conference call, please signal an operator by pressing Star zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Pramod Bandari, Chief Financial Officer. Thank you, and over to you, sir.
Pramod Bhandari — Chief Financial Officer
Good evening, friends and everyone. Thank you for joining us today. On the behalf of IG Petrochemicals, we extend a warm welcome to all of you. We are also joined by SG, our Investor Relation Advisor. We regret to inform you that our Chairman and Managing Director, Januka, could not participate in today’s earnings call due to some unforeseeable medical event. I hope everybody had an opportunity to go through our financial results and investor presentation, which has been uploaded on the stock exchange as well as the company’s website. After providing a quick overview of recent industry development, IGPL Progress, we will discuss about the operational and financial performance of the company. Before we started, I think you all are aware that I would like to share that the — it is very heavy heart that we — we have lost our ex-Chairman and Co-Founder member of IG Petrochemical Mr Mohan Danuka, who left us a month ago. MR. Dhanuka was a visionary leader whose guidance and mentorship IGPL journey over the decades for last four to five decades, helping the company to scale new heights.
His commitment to excellence and the split transform IGPL is one of the leading powerhouse in the chemical space. We also celebrate his endearing legacy and remarkable contribution he made to the organization. Coming to the industry, the crude price has declined around 20% to 30% on a year-to-year basis have further affected the entire value chain of chemical industry. Along with this, the demand from the Western market has continued to remain soft and China has shown no major spike. This has softened the performance of the many prominent Indian chemical players, especially those who are aligned on the important raw-material. The ongoing US tariff has further created an individual confusion around the chemical industry. However, this has no direct impact on the IGPU, of course, the downstream sectors and to a certain extent got some impact.
The foundation of any business is built over the years. I would like to state that our company foundation is very strong and many challenges not only in last year, but last couple of decades. The foundation of companies built with the great hard work and commitment of all the employees at the ground level, they are the strongest pillar of our firm. Because of them, our company has shown the visilent performance even during the challenging time. On this forum, I would like to thank them for their support and the contribution inching towards the pole position as the largest producer manufacturer in the world. IG is a renowned player into the and in downstream product. We are one of the largest player of in India and second-largest in the world. Current demand for in the domestic market is around 5,000 to 550,000 ton per annum and is projected to grow to around 5% to 6%, led by the demand from various end-use segments like paints, plus sizers, pigments, coating, polymers.
Our current capacity is around 2,75,000 tons. The plant of course, is not right now operating at a full capacity because of the various plants are down because of the change in the catalyst, because of the boiler inspection and some unplants are down because of the repair maintenance and requirements during the year end day as well as quarter-ending. We also produce many at our plant. These products are used in indices such as the lubricant agrochemical plastics. As a part of our strategy to diversify our product portfolio and increase our product, we are setting up a plasticizer, advanced plasticizer project from 75,000 to-1 lakh tonne capacity with an investment of INR165 crores.
The plant is expected to commence to be completed by the end of this year, say December 2026. This will manufacture the NPDP. This plant will consume around 30,000 to 35,000 tonne of the phthalic and. Additionally, the company has decided to venture into the green side of the chemistry to into the setting up of the CBG plant as highlighted in earlier quarters, the — this has indicated — creative has — this initiative has already progressed well from planning to implementation stage. The construction of plant has commenced and EPC contract has been awarded. This move aligns with our strategic objective to diversify the revenue from and the green side of the chemistry. In addition to that, we have extended our expansion into the green segment by entering into a production of paralysis oil, which is basically different form of the fuel oil.
The Board has approved the project to produce paralysis oil through the sustainable plastic-based chemical recycling, thereby converting the plastic waste entailing a capital expenditure of INR16 crore. That project will also be set-up in the right into the CBG plant. Also to increase the operating efficiency, we have integrated the solar power renewable energy resources into our BFC and the key operational areas. This strategic initiative aligned with our sustainable goal provide a significant cost advantage by reducing our power expenses. By leveraging the clean-energy we aim to lower our carbon and enhance energy security and improve long-term operating efficiency. Apart from that, we are also planning to replace some of the fuel oil, LSFO and the diesel which we are using with the gas which has started in the last quarter, natural gas.
These initiatives will open up a new building up a new expertise and improve our relationship with the new clientele. The expansion aligns with our long-term strategy focus on sustainability and scalable growth. Now coming to finance performance, if you look at the overall scenario, the overall revenue for the quarter stood at INR485 crores. The revenue contribution from the non-thelic business stand at INR33 crores, which is 7% for the quarter. The volume was lower due to the — compared to the last quarter because of the various factors as mentioned about plant and plants and now. Gross profit for the quarter comes at INR136 crores, which is a 30% over and above year-to-year basis increase and 950% basis improvement in gross margin. EBITDA has reached INR254 crore, an improvement of 51% compared to the corresponding previous year same quarter. Profit-after-tax is INR21 crores, a robust 128% increase compared to the previous year same quarter. Subdued demand in downstream segment due to increase in the price of the other raw-material has impacted the profitability. For the year, if you look at the performance, the revenue remained almost flattish at INR2,234 crores.
The revenue contribution from the non-thetic business remained INR165 crore, which is around 7% for FY ’25. Gross profit has zoomed from INR547 crores, it’s a 87 basis-point or say 587% improvement in the gross margin. EBITDA stood at INR248 crore, 82% increase compared to the last year. Margin has improved and profitability has also improved. The profit-after-tax is INR112 crores, which is 183% higher than the previous year. For this quarter, the profitability was impacted because of the mainly lower-volume in terms of the sales, the lower prices of the and dietide and other DP and other products. And NPM of the INR10 crore which we have provided in our quarterly performance, which is around INR6 crore was the employment of INR4 crores was a part of the interest and finance cost. And because of the plant and the plant shutdown, there was the energy cost and the repairment maintenance cost has been incurred during the quarter.
So put together, INR10 crore to INR15 crore, 10 on account of and INR500 crores of the repair and maintenance and energy cost extra indulged into the profitability, which has impacted overall profitability. The Board on account of the good profitability compared to the last year has recommended a dividend of INR10 per share for the financial year. The company for the March has maintained a net debt-free position with a strong balance sheet and cash-flow by prioritizing the long-term growth. We believe we will build a solid foundation for future, have increased our capacity and we are well-prepared to capitalize on the emerging opportunity, including the growing domestic demand. Furthermore, our expansion into the plasticizer offer built Group portfolio enhance our ability to serve the ending.
With this, I would like to conclude my presentation and welcome your questions. 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 on the touchtone telephone. If you wish to remove yourself from the question queue, you may press RN2. Participants are requested to use handsets while asking your question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles the first question is from the line of Aditya Khettan from Smiths Institutional Equities. Please go-ahead.
Aditya Khetan
Hi,. Hi, sir. Hi, sir, thank you for the opportunity. Sir, first question is on to the volumes. As you had mentioned that because of change in catalyst, there were — so volumes were impacted. If you can share the volume figure for the quarter and for soon fiscal FY for?
Pramod Bhandari
Generally we don’t share the volume figure specifically for the quarter and year. Indicatively, it was 20% lower than the last quarter. That is why the overall revenue impacted from INR565 crore to INR487 crore. And a yearly basis, the volume was actually around INR2 lakh compared to 195 last year. So on a yearly basis, it’s almost same except 4,000 to 5,000 different. But from quarter-to-quarter basis from Q3 to Q4, it was 20% lower because of the plant shutdown as well as unplanned shutdown for change in catalyst, all air inspections and others.
Aditya Khetan
Got it. So on Y-o-Y basis for fiscal FY ’25, the growth seems to be lower like we have added this new —
Pramod Bhandari
I agree. I agree. I agree with you because if we need to go full potential, because still we are hovering around because we have given you an indication of around 2 lakh to 2 lakh 10,000, we are around 2 lakh, 2 lakh 5,000 in view of the internal consumption for the DP. So this year, if you ask me, frankly speaking, with the PFIF, we can reach up to 240 to 50 to 30 to 240 clearly. But we are right now between 200,000 to 2,000. I think there is a scope to go by at least 5% to 10% higher next year.
Aditya Khetan
Got it. Sir, on to the spread side, it was clearly visible like on spot also for Q4 that spreads have improved. But sir, when you look at the last two months spread, they are again seem to be contracting. So any thoughts on this, sir? And what is the outlook for the long-term?
Pramod Bhandari
I think there are lot of factors which is impacting. You can’t pinpoint the one factor. The domestic demand, however, is steady in the paying process. But lot of things have changed in the geopolitical US policy for the import has impacted some of the downstream segment. Of course, they keep on changing like EPR segment was impacted because earlier — because a lot of UPR send their product — final product to the European — American market earlier they put duty from 6% to 26%, then they revised to 16%. But of course, 6% to 16% has a big impact because the margin is really low in that UPR segment. So that has some sluggishness in the demand, but of course, that will be reviewed again after 90 days. The second thing is the price of some of the raw materials required for our downstream like CPC has also got impacted because other raw materials, apart from is required for the CPC, the price has gone up by 10% to 15%. So overall, the demand is steady, but it could have been much better if there is no other geopolitical issues.
And third point is because there is a duty on China, of course, it was very-high, then it reduced to 120, then 30 because they are changing every week. So China used to sell a lot of product to the domestic market. Of course, that is restricted because there is a lot of limitation in terms of what they can sell to India because of the DS standards are there, BIC standards are there. But overall, the demand was okay, not good, not bad. But typically for our production, it was low, the overall profitability was impacted because of the first volume. The second, because of the shutdown, there is a high-energy cost and repair maintenance, which has increased by INR7 crores compared to the last quarter. And third, we have most of our debt in euro. So we have provided INR6.7 crore on the foreign-exchange NPM loss and then INR4 crore was included in the finance cost. So effectively INR10 crore to INR11 crore is the NPM charges and INR5 crores to INR7 crore on the repair and maintenance. That has impacted the profitability. Third, of course, is the volume, which I already indicated.
Aditya Khetan
Got it, sir. Thanks. And sir, on to the non-TAM side, like from second-quarter like where we were standing at around INR52 crores, now we are at INR33 at INR33 crores. Sir, when we look at the price of malic and hydride and for DP, they are more or less stable only. So why this?
Pramod Bhandari
I think the price of malic and DP, you’re absolutely right is stable. But when you reduce the hylic production, automatically malic and DP will be impacted because malic is produced from the wash water of halic if halic is down 20% automatically malic production will be down. Okay, okay, okay. That has a direct correlation because malic is in proportion to the hallic production.
Aditya Khetan
Got you. And sir, this expansion of these of advanced plastic sizer like sir, what guidance we had given like we could be increasing our top-line by INR1,000 crores. Are those things intact like on EBITDA also versus guidance also?
Pramod Bhandari
So the guidance is very clear. We will be increasing our revenue — gross revenue by INR900 crores to INR950 crore, but the net revenue will be INR500 crore because around INR400 crore help will be used. So when we gross classify the revenue is INR900 crore to INR950 based on the today’s prices, but the net revenue, which will be increased in the P&L and profitability statement is INR500 crore because will be used up between INR80 crores to INR400 crores.
Aditya Khetan
Yeah. Sir, just one last question. Sir, on to the import side, are you witnessing any sort of a structural change like imports are coming down or they are still at the same level?
Pramod Bhandari
I think I think compared to the last year when KLG was not started their production, import was between INR1 lakh to INR20,000. Now structurally, import is between 50,000 to 60,000 tons per annum, that means around 15,000 ton. Sometime it is 13, sometime it’s 16 17. So import more or less in the same way. But ideally if you ask me when the India is having the production of IG, and other players, the import have to be substantially reduced, but still there are guys who are looking to import because import is good when the market is steady, because now the market is too much having a fluctuation because import take time, then there is a too much fluctuation in the foreign-exchange and all that. So somewhere the import — the traders are making losses, somewhere they make the extraordinary. If you import at say X price, 1,000 and by the time it comes price is 1,200, you will make money. If you import at 1,200 and by the time it reached to you, you guys INR1,000 will make loss. It’s like more of a speculation in the import gain or loss rather than the actual money-making?
Aditya Khetan
Okay, okay. Got it. Got it. Sir, any idea on the spreads like how they will behave from here on, considering all these geopolitical tensions are — and sir, like we — like for the last two years, the cycle has been quite depressed. Any chance like this spreads are bottoming out and there is a chance of a super-cycle if suppose some capacities globally shut-down in this
Pramod Bhandari
I think rather than asking about the press or super-cycle, it’s absolutely right to maintain its spread right now is between $150 to $200. And I believe this is a fair range. It may go to $300, it may come to $150 also. But average, I believe $200 is a fair raise to assume for the spring. For long-term average is better.
Aditya Khetan
Thank you.
Operator
Thank you. Ladies and gentlemen, before we take the next question, we would like to remind that you may press to ask a question. The next question is from the line of Nirav from Anvil Wealth. Please go ahead.
Nirav
Yes, sir, good afternoon and thanks for the opportunity.
Pramod Bhandari
Good afternoon.
Nirav
Sir, I have few questions to ask. So first is you mentioned that our production in FY ’25 was close to around 2 lakh tonnes. So if we exclude what is used for captive DEP per land too.
Pramod Bhandari
After at around 2 lakh tonnes.
Nirav
Okay. Okay. So captive would be close to around 4,500 tonnes.
Pramod Bhandari
4,000 to 5,000 tonnes.
Nirav
Correct. So actual sales in the market from I G was close to around 2 lakh tonnes, correct?
Pramod Bhandari
Yes, between 195,000 to 205,000 tonnes. Yes.
Nirav
Correct. And sir, you mentioned that consumption of phthalic in India is close to around 550,000 tonnes.
Pramod Bhandari
Right.
Nirav
So you also alluded on the fact that like the imports this year have been in the range of 50,000, 60,000 tonnes. So is it fair to assume that — yes, so is it fair to assume that domestically, the players would have produced close to around 480,000, 490,000 tonnes and which also includes the production of KLJ or it is only between the 2 of us, which…
Pramod Bhandari
I’m talking about Indian demand, Indian production. So Indian demand 5% to 550 and import is between 50 to 60. So balance is produced by all the balanced players.
Nirav
Got it. And sir, what was this consumption of hydic in FY ’24? This is for FY ’25, which you mentioned. So what was for FY ’24?
Pramod Bhandari
4% to 5% lower, 190 to 195, only 5,000, 7,000 tonne is improvement compared to last year. It would have been much better, but our capacity utilization for — effectively we have utilized four plants only in-spite of having five plants.
Nirav
Got it. So sir, now you also mentioned that we have some shutdown issues, some boiler inspection, which you also mentioned in the earlier calls. Now I believe that all those issues are behind us. So going-forward in FY ’26, how do you see –.
Pramod Bhandari
I think I can give you a projection, but it is all really depend upon how it will be. I think it should be between 220 to 230. Okay. Okay. At least 10% should be higher.
Nirav
Got it. So on a, let’s say, base of 2 lakh tons, we are almost talking about 14% 15% or anywhere between 10% to 15% volume
Pramod Bhandari
10% to 15% is a fair assumption. Got it then plastic sizer will start by the end of year, which is say December, Jan, March by commissioning. So, ’26, ’27, you will see the incremental revenue of INR500 crore from plastic sizes. Is go by 10%, so it will be INR2,500 crores, then INR500 crore is on account of classes. So INR3,000 crore to INR3,200 crores for other income, DP and others is our target for ’26,.
Nirav
Got it, got it. So my question was slightly different. My question was that which of the user industries would drive the demand, like which according to you would be the driving force of this incremental volumes getting absorbed in the market. So how do you ask me —
Pramod Bhandari
Yeah, I understood your question. How incremental demand is being absorbed in the market. So if you ask me typically for the market, I think CPC, paint and plasticizer remain the majority. CPC, which is 20% to 25%, 22%, the in-between 18% to 20% and the classes has between 12% to 15%. These three are the majority which cover 50% to 55%. Balanced segment is now the specialty chemical and UPR. UPR actually five, six years ago about 2% to 3%, now it’s 10% to 11%. And plastic hydrog which remain between 13% to 15% and deep is another segment which is doing around 10%. So if you ask me the major three is the paint, which is resin, CPC and plastic hydrate between 50% to 55%, balance improves the UPI,, specialty chemical, agrochemical and all other sort of industries.
Nirav
Got it. And sir, like when we see the plasticizer consumption in India, predominantly few of the plasticizer also goes into the production of soft PVC, which ultimately goes into production of toys and carpets and everything.
Pramod Bhandari
Correct, correct.
Nirav
So with new players setting up the PVC capacities in India, how we are placed in terms of capturing the upstream demand for this PVC. So the products what you mentioned in your opening remarks like DBP or DIPP, who qualify for this demand coming from this sector.
Pramod Bhandari
So all PVC players will ultimately looking for the waste type of plasticizer and most of these players are either direct customer for. So if they are plasticizers, guys are already there into the PVC. So PVC will have a direct demand. Some of the them have the regime and the PVC regime and PVC capacity combined. So they will have a demand for as well as plasticizer. I think 50% plus customer will be common, which is the customer for as well as the plastics.
Nirav
Got it. So is there any benchmark which we can look into like how much of the plastic services would be going into the PVC end-use segment? Because generally, the capacities which are getting built
Pramod Bhandari
Probably that we’ll keep it for next quarter. I will take and get you data that plastic size and uses industry-wise, like we have plastic sizer, I think we will be able to get it probably for next quarter onwards. How much plus is — and also the pluses are different, different cap kept like different, different quality DOP, BP, DI, TB and all that. So majority two DOP and all that, we will get the fragment wise — segment-wise consumption in domestic market.
Nirav
Got it. Sir, last question we reach near to our production, yeah. So that’s the last question from my side, like out of INR165 crores of non-PS, which you have registered in FY ’25, how much would be from Malik?
Pramod Bhandari
So typically if you ask me the Malik sale has to be on annualized basis, it has to be equivalent to INR55 crores to INR60 crore. DEP cell has to be same between INR50 crore to INR60 crore. But because of the lower-volume, we have reached around the same level which indicated and balance was the DP and plus the majority, 70% portion, there is the acid export incentive, duty drawback interest income.
Nirav
Got it. Thank you so much and wish you all the best. Thank you
Operator
Thank you. The next question is from the line of Ragar from Aequitous Investments. Please go-ahead.
Raghav
Good evening, sir. I had three, four music questions just figure that. Sir, what would be regarding the spreads of in Q4 and in May ’25 for the company and industry level higher than that.
Pramod Bhandari
Sorry, can you repeat your question? Your voice is cracking.
Raghav
Sorry. Sir, my question was regarding the spreads of in Q4 as in May 25 both at the company and at the industry level.
Pramod Bhandari
I think on that. In the industry, it is between $170 to $200 for company, it is between $300 to $350 because IP always make $100 to $120 higher on account of the operational efficiencies, yield as well as byproduct. Absolutely. You can easily calculate by reducing the revenue from the raw-material will get the gross margin. This time the gross margin was around 27% for the last quarter. For the year, it was 23.4%.
Raghav
Okay. Thank you. Sir, my second question will be regarding the thing, whether they have started the raw-material supply?
Pramod Bhandari
Yeah, yeah, they have started supplying. Yeah.
Raghav
And so that has started from this month perhaps.
Pramod Bhandari
I think premium onwards. They have taken a shutdown. They have not stopped, they have taken a shutdown, now they started.
Raghav
Perfect. Right. As said the plasticizer plant which we have announced will be commissioned by one-time next year.
Pramod Bhandari
I think it’s expected to complete in December. So you can say two, three months for the purpose of ramping-up the capacity. So, ’26, ’27, you can easily take around 60% to 70% of caps to achieve utilization.
Raghav
Perfect, 60% to 70%. And sir, any impact of tariffs has announced by US on our revenue that we can?
Pramod Bhandari
And sir, there is no impact directly because for our raw-material, there is no impact because we are not buying anything from the US and in terms of the selling, IG doesn’t have any sale directly to the American market. We generally sell some portion, 10% to 15% to the Middle-East market. However, downstream segment, some of the players have direct link with the US, which is depend upon what is the tariff because in UTR, they have gone from 6% to 26%, then they reduced to 16% and that is also under review in next, I think 60 to 90 days, they will review it. But I believe whatever tariff is being imposed is for the purpose of negotiation. Finally next three to six months, it will settle to the what level they were.
Raghav
Perfect. And sir, I just wanted some sense of view regarding the demand scenario? Have I seen the industry is declining. So what do we foresee in our demand scenario? Do you see any effect?
Pramod Bhandari
So I don’t see any impact. It’s not declining because the new player has entered. Yes, they capture some of the share of the existing player as well as some of the known branded player. So paint industry is continuously growing. If you look at the total number, it is growing well. So we have seen the good growth in the paint. Overall paint, I’m not specially talking about one or two companies. In overall paint, it’s doing well. This one comprises around 15% to 20% of overall hallic consumption paint.
Raghav
So there has been consolidation of course due to the entry of
Pramod Bhandari
Consolidation is separate because in this one company is acquiring another company or new players entering, but that is not changing the overall consumption.
Raghav
Okay. So it hasn’t had any significant effect on us.
Pramod Bhandari
Yeah, yeah. Absolutely.
Raghav
And sir, for FY ’26 mannequin DVD, what will be the contribution?
Pramod Bhandari
FY ’26,
Raghav
Yeah, what are we targeting at?
Pramod Bhandari
We target actually — we are targeting always the INR100 crores, but it’s all depend on the pricing. If the prices of the melic and the DP remain higher than the. In case of DP, it is always 20% higher. Melic has to be higher than the phthalic by 20%, but right now is 20% lower than the athleic if it remains in the same range, we expect to have around INR130 crores to INR150 crores both inclusive of the and DEP. Otherwise, INR80 crores or INR90 crore from Malek if prices are good and INR60 to INR80 crore from that. It’s all really depend on pricing. It may range between INR130 crores to INR200 crore depend upon where the pricing of the and TP is.
Raghav
Absolutely. And sir, the spreads you identified were 20% lower, right?
Pramod Bhandari
And, right now, the pricing is 20% lower. But in terms of the spread, we are producing the melic from the wash water to whatever is the revenue, it directly flow to the EBITDA. But for malic and for plasticizer, for DEP, it will range gross margin — the margin remain between 10% to 15%.
Raghav
For DEP, 10% to 15% target.
Pramod Bhandari
Over and above because Thalic is one of the raw materials.
Raghav
Absolutely. Absolutely absolute. As a, what volume are we seeing for Q4 and what would be our target for ’26?
Pramod Bhandari
Generally, we don’t give the indication, but the Q4 volume was 20% lower than the Q3 and annualize around 2 lakh tonnes.
Raghav
2 lakh tonnes. And we are — approximately we are targeting 220,000 tonnes this year?
Pramod Bhandari
220,000 tonnes, 230,000 tonnes. If we reach at a peak, we can go up to 240,000 tonnes, 250,000 tonnes, because capacity is 275,000 tonnes and ideal operating is at 90% to 91% is the standard.
Raghav
Right. And we can — if things play out in the right direction, we can reach 90% to 95%?
Pramod Bhandari
In any case, when the plasticizer start, we need to produce it to that level of 240,000 tonnes, 250,000 tonnes because 25,000 tonnes to 30,000 tonnes will go into plasticizer.
Raghav
Sure, sir. Thank you so much, sir. Thank you for all the thank you. Thank you.
Operator
Thank you. The next question is from the line of Kuneet Singh from Counters Cyclical. Please go-ahead.
Gunit Singh
Hi, sir. My first question would be, so what is the IR on our plastic pyrolysis project and the CBG project
Pramod Bhandari
So first to answer you, we don’t do any project if IRR is less than 15%. So it has to be higher than 15%. The — as a part of our green initiative and entering into green chemistry, we started the first CBG plant, which is based on the agro waste as well as the grass. Adjuning to that, we are setting up the paralysis plant. It is a pilot plant in which all type of plastics, all type of — it’s a PVC, PP, UPR, all type of plastics available that will be used to produce the fuel oil, which is the paralysis fuel oil, which is generally used for the industry. We expect the — depend upon the pricing today between 15% to 20% higher. All right. So we — green side of the project. Yeah.
Gunit Singh
All right. So currently in FY ’25, we did about 10% EBITDA margins. So at what kind of spreads do we expect to reach 15% plus margins and we have already seen about 1.5, 2 months in FY ’24
Pramod Bhandari
Margin for FY ’25, EBITDA was around 11.3% including the other income DP and. So if overall and the DP revenue increased directly translated — directly translated into EBITDA. So right now, EBITDA compared to the FY ’24, it is 6.5%, it has improved to 11.3% in this year. And we expect if the similar margin remain and we are able to achieve the operationalize of our — all the fire plants up to 2030, you will see the uptick of 2% to 3% in the margin even with the similar margin with a higher-volume, because right now in our profitability, all the fixed-cost, whether it’s interest cost or depreciation of PFIs is also while the volume is not there for the PFI. That is why the margin looks to be 11.2%.
Gunit Singh
All right, sir. So sir, you’re guiding to 20,000
Pramod Bhandari
I’m not guiding, I’m saying we — it’s not guidance, you don’t provide the guidance. You ask your capacity is to 75, what you believe? I believe it between 15 to 220,
Gunit Singh
That’s what I’m saying. Do you believe that at this level of conviction, I mean even if we reach 220,000 to 220,000? Yeah. Even if we reach 220,000, so I mean we can assume EBITDA margins to go up by 200 basis-points
Pramod Bhandari
Without change in the margin. If margin up, it will further up. But I’m saying just we improve the volume it will up by 2% because all the cost of the PA5, which is the employee cost, the repair and maintenance cost and the finance cost in that everything is being built-in the existing profitability.
Gunit Singh
All right, sir. Got it. Sir, also, can you give a breakup of the fall in around INR70 crores revenue in Q4 year-on-year?
Pramod Bhandari
Sorry, can you repeat again?
Gunit Singh
Can you give a breakup of the reasons for fall in the revenue in Q4 FY ’25 year-on-year, about INR70 crores fall in revenues.
Pramod Bhandari
Is it because of volume, 20% decline in the volume is the reason? Because the hallic was lower produced because of plant and unplant shutdown similarly, malic was also reduced because malic is purely dependent on the hallic production. It’s mainly because of volume, revenue was impacted. If you ask me the profitability, it was impacted first because of volume. Second, because of the lower realization of the medic, which is now $830. And third is that because of the repair maintenance and the shutdown or because of the plant and plant shutdown, our repair maintenance cost up by INR5 crore and the energy cost up by INR2 crores, INR7 crore is this. And because of M2M, we need to provide INR10 crores extra, IN fix in the exchange GLOs, of course, it is the accounting antibody you have to provide and INR4 crores into interest cost. So INR17 crores we have provided extra in this quarter.
Gunit Singh
All right, sir. Got it. Sir, so our revenues have almost been flat since FY ’23. So I mean, can we consider that the worst is behind us, I mean, in terms of stagnation and FY ’26 can be one of the vehicle areas.
Pramod Bhandari
I think if we are able to utilize our plant capacity up to 85% to 90%, RBL revenue is when we operate all the plants of has to be between INR2,600 crores to INR2,700 crores on annualized basis. And by adding the plasticizer, gross is INR900, net is INR500 crore, we need to reach between INR3,200 crores to INR3,400 crore at peak after plasticize.
Gunit Singh
All right, sir. Got it, sir. Wish you all the best. Thank you very much. Thank you.
Pramod Bhandari
Thank you.
Operator
Thank you. Ladies and gentlemen, before we move to the next question, we would like to remind that you may press R&1 to ask a question. The next question is from the line of Chirag from Keynote Capital. Please go-ahead.
Chirag
Yes, thank you for the opportunity. Sir, if I try to look at the last four quarters, I’m able to see in Q1, we had two of the plants under inspection due to which they were shut-down for 70 to 3 days. Currently also there are some infection going on earlier in-quarter three also, there were some inspection going on. Wanted to understand what kind of inspections are going on at this moment.
Pramod Bhandari
So there is a regulation every three years there will be a boiler inspection. We have five plants. So every year we need to have one or two boilers to be inspected by the inspector because there is a regulation in which every two to three years, there is a boilers in we need to change the catalyst for one or two plant every year. So either you have a boiler inspection or you have some unplanned shutdown or you have the change in the catalyst. So on and off, we are using consistently four plants. If you look at the volume, it looks like that we are operating four plants, but actually there are five plants. But at a time only four were operating because of some reason or other reason, because of plan on plant reason, one plant is set. But the expenditure, which is the interest of depreciation and employee cost, everything is therefore five plants in FY ’25.
Chirag
So can I expect that in FY ’25, we had two catalysts change apart from one new plant. So out of four plants, two catalysts for change in this particular year. So yeah, FY ’26, we would see one catalyst change
Pramod Bhandari
One is the minimum.
Chirag
Right, right. And almost three — and all the boilers inspection are being concluded in this particular year.
Pramod Bhandari
We have concluded for the four plants, four plants we have concluded. So fifth, again, when we started, they will see it. But you can say that at least even if we operate at, say, one plant is set for three months is still we will be able to achieve to 2030. That’s why we have not given any aggressive guideline. We believe that 10% should be improved from the last year.
Chirag
That makes sense, plus the additional cost we had, it would — it would be lower down for the one-time expense.
Pramod Bhandari
Yeah, because right now, if you look at the fixed-cost, we are incurring around INR50 crore to INR60 crore of fixed-cost every year for one plant. So one plant is that means INR50 crore is extra inside the system because of the manpower, because of interest, because of depreciation. But there is no contribution from plan. If you add the revenue,, manic other operating efficiency advantage, the gross margin will directly translate it to your EBITDA to PAT except after directing tax because no other expenditure is going to change the finance cost remain same, cost remain same, manpower cost remain same.
Chirag
So second question from my end is that we had some lower inventory on books in Q3. As crude prices softened up, are we at a normal level of inventory at this moment or are
Pramod Bhandari
We at higher-level of — normal level of inventory.
Chirag
Normal level. And third, sir, I would like to understand, currently, as you said that the spreads are between $150 to $200, this is that you are quoting about the international level
Pramod Bhandari
I’m talking about international market much.
Chirag
Perfect. Perfect.. Right. And can roughly we are expecting 55,000 ton of volume on a quarterly basis in FY ’26.
Pramod Bhandari
So based on ideally it has to be — ideally it has to be 55 for every quarter so that you can reach 50 to 220, but it will range between 50 to 55 because it depends on a lot of other factors.
Chirag
So generally the plant works on 90% utilization, it is like 24/7 a running plants.
Pramod Bhandari
Yeah, 100%, 100% continuous plants is continuously working. All the plants you will — if all the five plants working consistent basis, we will produce 60,000 tonne plus in the. We are right now between 45 to 50, we believe we will be between 50 to 55 for next year. But at peak it has to be 58 to 60. I’m talking about. Sales will be — sales will be lower because there are some internal consumption which will be happening for the plasticizer, deep and other things.
Chirag
Yeah. I got it. I got it. And just last question from my end. We were expecting — we were expecting to start almost our trial batches for plasticizers in the start of Q3, if I’m not wrong.
Pramod Bhandari
Sorry, can you repeat again?
Chirag
What we were expecting to start our trial in the start of Q3 FY ’26, if I’m not wrong.
Pramod Bhandari
For plasticizers?
Chirag
Yes.
Pramod Bhandari
Yeah. I think we are doing it. We are on-track, but we are not sure about the raining season. It really depend on raining season because during the raining your workflow is impacted by 30% 40%. I’m talking about construction of the plant. So we got everything ready, but I think plant instrument nothing is also coming up in the — some portion has come some — is coming in June, July. So if everything goes online without any interruption, it will be ready by December or it will be started by December. But if it is impacted, then it will impact one or two months. It all depend on raining. I think we have seen the premature raining in Mumbai.
Chirag
I understand. I understand. Yeah, I understand that. Thank you. Thank you so much. All the very best. And just one thing I wanted to know if the to such level, is it possible for us to have higher amounts of or ox — I mean as a raw-material on books so that it can benefit us for a longer run.
Pramod Bhandari
Not higher to 10,000 tonnes. This is always there because we need to keep because there is a continuous plant. You can’t wait for the ortho. So we keep up to 7,000. Typically it’s 5,000 tonne, but, but sometime we need to import it, then we keep 8,000 to 10,000 ton. And there is a consistent supply every week of orthod from import or from domestic market. So we keep it very consistent. Generally, we don’t want to hold or accumulate it for the purpose of taking advantage because we just wanted to price in time. When we buy the price, we ensured that 70%, 80% of our final product coming from that sold and booked during the time reached to our factory so that the entire cycle of the pricing is maintained.
Chirag
If the crude prices are down, can I expect that ortho prices and has also very different?
Pramod Bhandari
Ideally it has to be. Ortho is not down. Right now it is maintained crude is down, is down, but ortho slightly has gone down, but not much. Generally there is a lag of one and a half month between the crude prices to the and the ortho.
Chirag
And what were the imports from China for the particular quarter in India? Any idea?
Pramod Bhandari
Total import was around 17,000 to 18,000 ton compared to 15, which is the ideal case 13,000 to 15, but this time slightly higher. And China was I think roughly 3,000 to 4,000 tonnes. Taiwan was better, higher.
Chirag
Thank you. Thank you so much, for all the answers. Okay. Thank you.
Operator
The next question is from the line of Akshaya Kothari from Envision Capital. Please go-ahead.
Akshay Kothari
Thanks for the opportunity. Sir, I have four questions. First on the plasticizers business. Sir, what would regarding the volumes in plasticizers, I think we are going to consume 30,000 to 35,000 tonnes of thalic in-house in FY ’27, correct. We would be having the same volume of phthalic for external sale after plasticizer consumption.
Pramod Bhandari
So if we operate all five plants, we will be between 250 to 255, in which 35 will go to plasticizer. So typically it will be 220 available.
Akshay Kothari
Okay, okay. And sir, what would be the margins in plasticizers again?
Pramod Bhandari
So plastic sizer margin is actually varying because we have a different, different type of plasticizer and every plastics there are difference in margin. Typically it range between the gross margin rate between 10% to 15% to 20% over and about selling. And it also depends upon the price at which you are transferring with selling if you are transferring the thalic at average price of your average realization, then the margin will be higher. If you’re transferring the thalic at the lowest realization, then the plastic margin will be much higher. If you take average, then it will be lower. It’s all depend upon. But in general, if it is a third-party plasticizer and they are buying from some third-party, then it between 10% to 15%.
Akshay Kothari
How much is as a percentage of RMC of plasticizer?
Pramod Bhandari
Around you can say the average between 35% to 50% for different, different classified. Understood. So when we are producing say 75,000 ton, so I’m expecting 30,000 tonne to 32,000 ton of to be used at 75,000 ton of classified. So roughly we can calculate it at around 40%.
Akshay Kothari
Okay. Okay. Understood. And sir, secondly, on the orthozylene pricing, how much is the capacity of in India and world over? And what is your view? You did mention a lot about the pricing on-demand of halic as such, but, what is your view regarding the pricing of orthozylene? How are we placed?
Pramod Bhandari
Orthozylene is domestically, typically the player which is producing has a capacity of 4 lakh — sorry, 4 lakh to 450,000 tonne, but they produce typically today at 40%, 50% capacity. And international market, it all depend upon their own commercial economics because they produce the PX also. Typically, when the PX is produced, the ortho is the byproduct and PS goes into PPA and the OS goes into the. So it depend upon — if they operate at a full capacity, then I think that is sufficient for the entire India, all the. If they are not operating, then everybody needs to import. When you import, it is ample available in the international market. Generally it is coming from Singapore, Europe and other places. It is available. It’s only a question of you need to incur the extra logistic cost and there is no direct hedging mechanism. So you should be worried about the time it take around 25 30 days to 35 days. In-between if there is a moment of time, there is no direct instrument available to hedge that. So that risk you will be carrying if you are importing more. Otherwise, it is easily available in the domestic market.
Akshay Kothari
Yes. Understood. Understood. Sir, the last question which I have is regarding the use of phthalate free plasticizers. So Birla has come up with the Birla Twist, which is halate-free plasticizer. So your view on the same and how do we see this development going forward?
Pramod Bhandari
So I think that there are lot of players who are looking at that. We also have a flexibility to go for the and base and non-thelic base can also get into DOP or DOTP that flexibility is there. But right now in India, all type of processors are used.
Akshay Kothari
But I’m asking, sir, in terms of demand, if plasticizersenbly
Pramod Bhandari
Goes into toys and all that. So our plant, we have inherent capability to move between DOP and DOTP. DOTP is the thalate free passe.
Akshay Kothari
Okay, okay. Okay, sir. Yeah, that’s it from my side. And it would be great if you could arrange for some plant
Pramod Bhandari
Definitely, you can get interested SGA, we will be arranging somewhere in July, August after raining season.
Akshay Kothari
Thanks a lot, sir, and all the best.
Pramod Bhandari
Okay. Thank you.
Operator
Thank you. Ladies and gentlemen, before we take the next question, we would like to remind that participants may press char and one to ask a question. The next question is from the line of Rohan from Total Capital. Please go-ahead. Yes, thanks for the opportunity, sir. Sir, just a clarity I want. Sir, you mentioned to your previous participants’ question that optimum revenue that you can generate from our plants, plants is somewhere around INR2,600 crores to INR2,700 crores, right?
Pramod Bhandari
Correct. If we operate at a peak capacity of all the plants, yeah,
Rohan
Yeah. And operating at that level, we can increase our margins to — by 2% to 3%.
Pramod Bhandari
Correct, because it’s just driving from the volume. If real margin increase, there will be increased, but only volume change will also increase the margin because all the fixed costs are already taken care for all the five plants.
Rohan
Okay. And so currently, can we assume that we are doing around 10% margins, right?
Pramod Bhandari
Right now, our EBITDA margin is for the year was 11.3%,
Rohan
11.3%. Okay, yeah. And apart from that, our plasticizer plant at optimum capacity utilization, what kind of margins we can just give you?
Pramod Bhandari
I think marginal plasticizer, as I mentioned, it depend upon the various type of plasticizer and their margins and also depend on the price at which you are transferring the thalic. If you are considering plasticizer as an independent unit, then you will be making 10% to 12% of the EBITDA margin in plasticizers. But if you transfer the at average, it is good. If you transfer the at the lowest realization of, then you will be making 15% in. So this is my point,. Because it is 40% of the raw-material. Of course, there will be saving because you will not be converted into powder and you don’t need the logistics, you don’t need the pack it is just in-house transfers.
Rohan
And broad question seeing our last eight to 10 years of history, we have seen that our margins have went from single-digit to say towards double-digit or as high as say 25% 20%. So what — considering that you have seen a long period of history. So how do you see our margins going-forward? Like are you feeling confident that this can go from freelance considering plasticizer coming in, we are confident to go to, 16% 17% in two years.
Pramod Bhandari
So I think rather than taking call on the margin because it vary between 10% to gross margin vary between 15% to 25% and EBITDA margin vary between 10% to 18%. We rather than taking call on the margin, we are confident that is the volume we will be generating. And based on the volume, whatever is the margin it will be there because if you predict the margin, first we don’t know about the margin, but there are some products like byproduct, which could have ideally be INR150 crores to INR200 crore of revenue from the and the DP because prices has to be 20% higher. But last two years, the melic prices were depressed and our INR120 crore of is just realizing INR60 crore that revenue is directly translated to EBITDA even if which we are producing 7,000 ton is at correct market price, our margin was up by 2%. But it is not the case. Nobody can predic the pricing actually and the margin. We can talk about the volume and overall revenue.
Rohan
Okay. Got you. Yeah. Thanks for answering all my questions. Thank you.
Pramod Bhandari
Thank you.
Operator
Thank you. Ladies and gentlemen, due to time constraints, I now hand the conference over to the management for closing comments.
Pramod Bhandari
Okay. Thank you very much for the call. And I just wanted to remind that the company is constantly looking for diversification. We have got into the CBG and now. We are again evaluating the opportunity to go further downstream of phthalic and plasticizer and hear very soon about the new projects. Thank you very much and all the best. Bye.
Operator
Thank you. On behalf of IG Petrochemicals Limited, that concludes this conference. Thank you for joining us and you may now disconnect the lines.