Kiri Industries Limited (KIRIINDUS) Q2 FY23 Earnings Concall Transcript

Kiri Industries Limited (NSE:KIRIINDUS) Q2 FY23 Earnings Concall dated Nov. 10, 2022

Corporate Participants:

Anuj Sonpal — Investor Relations

Manish Kiri — Managing Director

Analysts:

B. Suresh — Burram Financial services — Analyst

Suresh Bandola — Company Secretary

V.P. Rajesh — Banyan Capital Advisors — Analyst

Yogesh Tiwari — Arihant Capital — Analyst

Namit Mata — KC Capital — Analyst

Nihar miricorilant — Lowe Investors — Analyst

Pura Shah — Pason Enterprise — Analyst

Jeff Vatica — Savi Investments — Analyst

James Martha — Individual Investor — Analyst

Carmen Jakurton — Individual Investor — Analyst

Rohit — Individual Investor — Analyst

Pramod Kataria — Individual Investor — Analyst

Anton Paul — Campden Wealth — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to Q2 FY ’23 Earnings Conference Call of Kiri Industries Limited. [Operator Instructions]

I now hand the conference over to Mr. Anuj Sonpal. Thank you, and over to you, sir.

Anuj Sonpal — Investor Relations

Thank you. Good morning, everyone, and a very warm welcome to you all. My name is Anuj Sonpal from Valorem Advisors. We present the Investor Relations of Kit Industries Limited. On behalf of the company, I’d like to thank you all for participating in the company’s earnings call for the second quarter of financial year 2023. Before we begin, let me mention a short cost segement. Some of the statements made in today’s earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management’s beliefs as well as assumptions made by and information currently available to management.

Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today’s earnings call is purely to educate and bring awareness for the company’s fundamental business and financial quarter review. Let me now introduce you to the management participating with us in today’s earnings call and hand it over to the opening remarks. — we firstly have with us Mr. Manish Kiri, Managing Director; Mr. Jay Siani, Senior Manager, Accounts and Finance; and Mr. Suresh Bandola, Company Secretary. I now request Mr. Manish Kiri to start with this order. Thank you, and over to you, sir.

Manish Kiri — Managing Director

Good afternoon, everybody, and welcome to the earnings conference call for the second quarter of financial year 2023. I hope you are all keeping safe and well. During Q2 FY ’23, the industry experienced very sluggish demand driven by geopolitical tensions due to Russia, upend for more than 34 weeks. Additionally, China recently announced new Covismasors, where in 28 cities are implementing varying degrees of lockdowns, which made global dies and did intermediate products more volatile, impacting growth of the industry. During Q2 FY ’23, Kiri Industries Limited at same consolidated sales revenue of INR242 crores, lower by 32% year-on-year basis and EBITDA loss of INR7 crores. Net loss for Q2 FY ’23 was INR26 crores versus net profit of INR12 crores in the same period of last financial year.

Coming to the H1 numbers, company, I think consolidated sales revenue of INR519 crores, lower by 20% year-on-year basis and EBITDA loss of INR15 crores. Net loss for Q2 FY ’23 was INR53 crores sorry, for the first half versus net profit of INR19 crores right in the same period of last financial year. During the quarter, Kerastand-alone sales revenue of INR141 crores, lower by 47% year-on-year basis, and EBITDA loss of INR32 crores against breakeven in the same period last year. The net loss for the quarter was INR44 crores as compared to the loss of INR7 crores last year. For the half year, EE earned sales revenue of INR312 crores, lower by 22% year-on-year basis and EBITDA loss of INR64 crores. Net loss for the first 6 months was INR72 crores. During the quarter, the prices of raw materials, gas, fuel, which have increased during the preceding 2 quarters have not reduced during the current quarter, which has impacted margins of all die in some medias units of the industry.

The high legal costs also impacted margins during the quarter and half year. The payment cycle has also lengthened and inventory churning has decreased as a result of stagnant demand and unstable raw material prices. The company anticipates a smoothing of liquidity over the next few quarters and return to normalcy for the payable cycle over the next 2 to 3 quarters. In the matter of data, where — those 37.57% the Supreme Court of Singapore has given judgment on 6 July 2022 in SIC. Kiri has prevailed on the issues of Supreme Court with regards to 19% discount for the lack of marketability and quantum of license fees for the wrongful exploration of the patent. The Supreme Court had remanded the matter back to Singapore International and Commercial Court to give an effect to the decisions and to determine the quantum of license fees based on available evidence submitted by both the parties and for reversal of DLM.

As per the direction of SICC, related submissions from the parties had been completed and final valuation order is awaited. The dismantwas also reserved — in another appeal against got order of IC SICC dated December 2021. Gearing at Supreme Court of Singapore has been completed on September 16, 2022, and order from the Supreme product Singapore’s reserve and Aveta. In SIC7, Kerian Distal have filed appeals against SICC order with regard to preferred supply data Superior. FICC had rejected his claim-related to the rate to be treated as prefer supply against Asta wider order dated September 24, 2021. The hearing of appeal at Supreme Court of Singapore had been completed on 22nd September and order is reserved and at — he has been keeping an eye on the ball market for the dues and has been actively taking steps to mitigate challenging market conditions and reduce cash losses.

The company is working to ensure that this product mix is optimal in order to boost overall margins, allowing the business to absorb its fixed costs and make a big step forward actually normalize revenues and EBITDA in the upcoming quarters. As I mentioned, operational margins are currently negative, but we expect it to turn positive once the ball market stabilized and the demand increases. With that, I would now like to open the floor for any questions. Thank you…

Questions and Answers:

 

Operator

Thank you very much. We will now begin with the question-and-answer session. [Operator Instructions] we take the first question from the line of B. Suresh from Burram Financial services. Go ahead sir.

B. Suresh — Burram Financial services — Analyst

Afternoon, [Indecipherable] opportunity.

Suresh Bandola — Company Secretary

Hello?

B. Suresh — Burram Financial services — Analyst

Yes, sir, last to do a conference call. I policies, you remember Suresh.

Suresh Bandola — Company Secretary

Please go ahead.

B. Suresh — Burram Financial services — Analyst

Sir, actually, the Supreme Court cases in September, we can expect a complaidation. But okay, I’m not asking a doubt. You can expect any time delay. What is the reason there?

Suresh Bandola — Company Secretary

I think, Steve, we have been actually following up on the final number and the final judgment from SICC. And as I mentioned in my speech, all the submissions got completed on August 29. And we are expecting that at least in a month or 2, the judgment should come from SICC. But somehow, maybe due to the internal court process, the delay happened and we continue to await. Now it has already been more than 2 months, actually 2.5 months by this time from the submissions, which got completed on August 29. So we hope that any time the final judgment has to come from SICC regarding the valuation number. So let’s hope that it is announced from the court on any day.

B. Suresh — Burram Financial services — Analyst

Okay. Actually, sir, the talent is not being the court…No..It is..

Suresh Bandola — Company Secretary

I think it’s the generalized delay on in court, and there is no particular specific reason for the delay. Neither cot give any further instructions to submit anything more? So it was only the general delay that the court is experiencing and we are experiencing for the same. So there’s nothing specific reason that has caused this delay.

B. Suresh — Burram Financial services — Analyst

Sir, you can — any is not a legal action, but any take so much time, you can take any action to write my ourselves any right in taking action to deliver the issue? — the answer is there? Is there any action taken…

Suresh Bandola — Company Secretary

You may be right to the cost. That’s what you’re asking or…Act…

B. Suresh — Burram Financial services — Analyst

Yes sir.

Suresh Bandola — Company Secretary

Based on the protocol, now the legal counsels of Kiri all the legal counsels of Cendant — once the judgment is reserved, there is no system to follow up, okay? So we just need to wait and keep patients till the judgment comes. There is no process of filing anything to follow up on the judgments which are already reserved. So I think we have no choice but to keep patients, and he is actually testing your patients, our bases, everybody’s basin…

B. Suresh — Burram Financial services — Analyst

Market

Suresh Bandola — Company Secretary

There is no procedure to guide to the fault and the segment is resolved.

B. Suresh — Burram Financial services — Analyst

Actually, your lean legal panel is there in Kiryat you’re plane or what time at there are any time eat is or — you are also waiting.

Suresh Bandola — Company Secretary

Yes, any day. Everybody is waiting…Any day

B. Suresh — Burram Financial services — Analyst

Sir, actually, okay, Gastar case is okay. But in the standalone, Kiri, you will give a turnaround performance, how much time takes — it is only depend now caring continued loss making in stand-alone. Without that, after Distort judgment is completed, you can get the money after stand-alone Kiri financial turnaround, how much time take, you can take any steps to individually stand alone, you can grow?

Suresh Bandola — Company Secretary

Very correct questions, actually. And even before the distal Funcom, stand-alone has to turn around. And stand-alone has been impacted due to several reasons. Market dynamics is one reason. Our continuing heavy legal expenses is second reason — and third reason is high volatility in the prices of input raw materials, correct? So these are broadly speaking 3 reasons impacting our financials. But we are working continuously to improve. And hopefully, in the next quarter or 2, you will see it come around because we are rentalizing a lot of products. We may discontinue certain products temporarily, we may change certain products temporarily.

We may reduce our costs in terms of employees, which is happening as we speak. So we are trying to make certain changes to reduce the losses and to breakeven as soon as possible, even before it has nothing to do with the diaper. This we have to do anyway. And if you look at the consolidated EBITDA as I mentioned even in last quarter also because the raw materials go to long Center and then the group company sells to the customers, which is consolidated into Kiri. And if you look at that level, EBITDA loss is INR7 crores. So we will shortly bridge in next quarter, you will see that it is not there. We are working on it right now. So we would do it even before that…

B. Suresh — Burram Financial services — Analyst

Before judgment.

Suresh Bandola — Company Secretary

Yes, — before the director funds come…

B. Suresh — Burram Financial services — Analyst

Okay. Sir, actually, Gerry, after diester amount received, data, you are not dependent on any Cereproducts in Ditabusiness tire after…

Suresh Bandola — Company Secretary

Is not selling any products to that on for also.

B. Suresh — Burram Financial services — Analyst

Today. Is there any legal expenses in further to see…

Suresh Bandola — Company Secretary

No, no legal actions further no cases further. I think once this judgment is out, there is no pending legal actions or there is no — any other actions related to minority operation and buyout. There is no cure legal proceedings flat, nothing now. It’s only to realize whenever…That’s the only reaction which will take place going forward is pertaining to enforcing the order.

B. Suresh — Burram Financial services — Analyst

Sir, one small dose, it is not a company issue. But generally, I can talk to market in so many investors in Kerian social media rumors — it is some play with the directorate or can the SPAs already with or take an INR10 or INR20 share. They can sold it any mutual fund is not interested to take investment in TD? Just it is a social media rumor, but he cannot misunderstand just I am asking as an investor. What is that issue so you can just clarify the US side, please can Dependent replace…

Suresh Bandola — Company Secretary

Such kind of social media rumors are nonfactual. They are false and which has nothing to do with the fact, okay? So these are not only incorrect. These are business and nothing — no fruit related to them at.

B. Suresh — Burram Financial services — Analyst

Okay. Sir, you can also eagerly waiting please restrict to receive the…

Suresh Bandola — Company Secretary

We also early — thank you.

B. Suresh — Burram Financial services — Analyst

So can expect much time, sir, any day, any time you can at least November will obeen complete? Cancer is there.

Suresh Bandola — Company Secretary

Today…

Operator

I’m sorry to interrupt, sir. May we request you to turn to the question queue, as we have…

B. Suresh — Burram Financial services — Analyst

Okay. Thank you madam. Thank you.

Operator

We take the next question from the line of Mr. V.P. Rajesh from Banyan Capital Advisors. Please go ahead sir.

V.P. Rajesh — Banyan Capital Advisors — Analyst

Yes. Thanks for the opportunity. And Manish, just clarifying your comments on the Singapore case. You are saying that we had DLL and the patent issues will be sorted out anytime. Is that correct? And then there are a couple of other court cases which are also pending…

Manish Kiri — Managing Director

No, the — for the valuation-related judgment with Supreme Court already in our favor and order an overturn on 2 points, as you rightly said, the LOM and the patent license fee. So that judgment would come at any day, any time right now, pay from SIC giving the effect to the Supreme Court’s decision. Now that’s the main judgment. Besides that, there are 2 other cases, which got concluded again in the Supreme Court in appeal. One was related to the legal cost. If you look at the previous judgments, there was a legal cost-related judgment of $8.11 million plus interest. And the other party went — signed up and to appeal against that.

That matter and that hearing also got concluded in September, judgment is reserved and abated right now. There was a third site case. So these are size cases. There was a third site base we again went also to appeal from CDs where there was a size is refi against Distant and about not treating TD as a briefer supplier and reporting the carolement. So that was only 2 years ago order against Kiri and that was dismissed and key gen to appeal against the order in the Supreme Court. That site case also got completed in September and the judgment is now reserved and awaited. So even 5 cases are completed in Supreme Cosan.

V.P. Rajesh — Banyan Capital Advisors — Analyst

I understand. And I think in the last con call, you said that because of the BLM ruling coming in our favor, we should get approximately $600 million from is that correct or is that the change…

Manish Kiri — Managing Director

No, that is correct. That is correct. The DLM number is very clear in the courts, DoubendLOM, is very clear in the earlier just men. Even if you read the judgment of June 2021, you will see the BLM number. And that would be completely reversed. So there is no debate on the LAM. The only number which FICC had to decide was the pattern license fee number. And the submission which got completed on August 29 was only pigtaining to the patent license fee and nothing else. And that number was having a range from $1 million, which was awarded earlier and overturned by SuperimCort. And another number from Kirsi was $40 million. So now it’s up to the court to divide and pick any number between one and 40 and whichever number the peak that it would be more than 600 anyway.

V.P. Rajesh — Banyan Capital Advisors — Analyst

I see. So $600 million is just for the valuation of our stake plus the patent fee that could come anywhere between 1 million to 50 million…

Manish Kiri — Managing Director

Yes, yes. So whatever number we up to the car is to decide, and that would be the number in addition to INR600 crore.

V.P. Rajesh — Banyan Capital Advisors — Analyst

Understood. Okay. And then on the business front, you have been slowly ramping up your plans on the Specialty Chemicals side. So any update on that one?

Manish Kiri — Managing Director

Yes. See, we — unfortunately, we try to add several products. We try to even the first phase of our specialty instruments are already operational. Somehow, we entered into a phase where market has not been supporting. And that we see on the results funds. And I think the ultimate dependency on textile is affecting by chain effect on the demand side. Just to give you some numbers, usually, India exports every month reachout the tune of 18,000 to 20,000 tonnes. And last 4 months, the numbers indicate only 10,000, 10,500. So we are running at 50% demand and that is affecting our fixed cost per unit and what we are trying to address on immediate basis currently. So even though our facilities are operational, even though we have certain products which would be now adding more margins to us. But due to market slickness and the price issue, we are not able to get thrus.But let’s hope that things change in the next quarter or 2.

V.P. Rajesh — Banyan Capital Advisors — Analyst

So is the expectation that your profitability has now bottomed out at least at the EBITDA level. And at the consol level, in Q3 and Q4, we should see positive EBITDA numbers.

Manish Kiri — Managing Director

Absolutely. You will see the — now we are bottoming out, and you will see the change, which will be happening at a better level on consol level as well as standalone. Again, please take in mind that even in this quarter also, our — in the earlier quarters, our running legal expenses are ranging somewhere between INR14 crores to INR18 crores, right? So when you add that on consol basis, you will have profit instead of INR7 crore loss. But unfortunately, those legal expenses would continue if we — this quarter, it would be lower. But once we enter into enforcement phase, again, they are going to be there, maybe slightly lower number, but we will see the continuity of legal expenses.

V.P. Rajesh — Banyan Capital Advisors — Analyst

So if you can talk about a little more on this enforcement process, what will it look like? Because once the Supreme Court has given the judgments, Senda has to pay up, right? So if you can just give us more color on what do you expect, how it will unfold.

Manish Kiri — Managing Director

I see the way the process will follow is once the final number is announced and given by SICC, there will be certain sign and there is a 21notice that we would need to issue the legal for the recovery of the amount, okay? So that will happen immediately as soon as the result is out. And Sanda is supposed to honor the judgment as early as possible within 21 days. And if it is not honored, then we will have to go back to cost — and then we will have to invest and it was go to interval in the enforcement.

V.P. Rajesh — Banyan Capital Advisors — Analyst

Understood. And if I have more questions, I’ll come back and with you.

Manish Kiri — Managing Director

Sure. Sure, Ravi. Thank you.

V.P. Rajesh — Banyan Capital Advisors — Analyst

Thank you, sir.

Operator

[Operator Instructions] we take the next question from the line of Mr. Yogesh Tiwari from Arihant Capital. Please go ahead sir.

Yogesh Tiwari — Arihant Capital — Analyst

Am I audible?

Manish Kiri — Managing Director

Yes. Yes, we can hear on your question, please.

Yogesh Tiwari — Arihant Capital — Analyst

So my first question was basically around China. So what would be our dependency in terms of percentage in imports as well as exposed to China?

Manish Kiri — Managing Director

Right. See, currently, exposed to China is very, very minimal. And it is next to nothing. While import dependency on China on certain products are still there, to give you an average at least 20% to 25% of the requirements of raw materials continue to be coming from China being served from China as on today. So that dependency is continuing on certain products. There are areas in which on the finished product sales also, we have competition from China. And for example, prices of its today has been drastically reduced in China and some other intermediates also drastically reduced in China. And that is putting backward pressure on Indian producers to match those prices — and that’s how even the global price is due to the competition has gone down to bottom. So to the extent that those are nonprofit making and certain long generating price levels have come. Unfortunately, due to lack of demand and excess supply, we have reached to this level.

Yogesh Tiwari — Arihant Capital — Analyst

And sir, I assume that the raw material would be coming through route. So from which port is like we only operate through Sunday or it’s like which ports that you operate to…

Manish Kiri — Managing Director

Here several ports. One is Shanghai and then another part where we get a lot of material is single. So it’s also coming from Ningbo and one more part. I think that our Tianjin is also there sinachloride and certain normatives are coming from engine — so there are several ports we import from China. Fortunately, rate has come down. So sea freight from China have have been reduced, and they are almost half compared to the peak levels that we experienced earlier. Certain net clean and mastery derivatives still China dependency is there and Matarani mine and its derivatives in China dependency is continuing.

Yogesh Tiwari — Arihant Capital — Analyst

And sir, lastly, on this — the China factor basically. So in October, there was news on closing of the ports because of core. And recently, some ports have reopened and the traffic has risen. So is this — has the reopened, like what is the current status as of now?

Manish Kiri — Managing Director

I think — so there was a lot of reach up and disruption when Shanghai was closed, if you remember a few months back, right? And then certain goods were diverted from other ports, but now it’s moving out and getting regularized. So situation is much better now from Chinese spot operations compared to what was a month or 2 back. So yes, it has improved significantly now. Earlier, after placing orders, we were estimating at least 2.5, 3 months now, we can expect material to come in 1.5 months, 1 month to 1.5. So it is coming on track actually.

Yogesh Tiwari — Arihant Capital — Analyst

Sure. But there is still some delay in the contract.

Manish Kiri — Managing Director

There is some delay and sometimes report cause delays to the extent of 20 days, 25 days, things like that. So those tragic problems are still continuing.

Yogesh Tiwari — Arihant Capital — Analyst

And sir, lastly, on the raw material front. So there has been the price correction in commodities. So when will we see the benefit of the decline in commodity prices for us?

Manish Kiri — Managing Director

The major commodity prices, which will depend on are the prices, for example, related to caustic soda. I mean, the caustic prices reduced from INR70 to INR60, but comparatively, still much higher. Similarly, prices of sulfur went down to INR8 and then increased back to INR1617. Soda has reduced from peak of INR46 to INR36 37%, but still continuing to be at a higher level. So those commodity prices, which relate to our business have not — are not crashed actually, have been still continuing at a relatively high level…

Yogesh Tiwari — Arihant Capital — Analyst

Okay. So sir, this INR8 to INR50 cultures and caustic quota, this you are comparing between Q2 and current quarter?

Manish Kiri — Managing Director

These are — these have increased from Q2 to the current quarter exactly.

Yogesh Tiwari — Arihant Capital — Analyst

Got it. Thank you so much for answering my questions. That’s all from mine. Thank you.

Manish Kiri — Managing Director

Thank you.

Operator

[Operator Instructions] We take the next question from the line of Mr. Namit Mata from KC Capital. Please go ahead sir.

Namit Mata — KC Capital — Analyst

Hi Manish. How are you there?

Manish Kiri — Managing Director

I’m good, Namit..How are you?

Namit Mata — KC Capital — Analyst

Good…Just a couple of questions, Manisha from my side. So first is, I know that you have hired a few new people for the new projects over the last couple of years. Are these pipes still in the organization? And if yes, then what are they doing as we wait for the…

Manish Kiri — Managing Director

We are still there in the organization. They are still working on several project analysis. So they are still there. We are still there, and everyone is waiting for the funds to realize from Singapore. I think implementation of the next phase of projects would wait and they are working on, for example, various fronts. So they are working on environment clearances, for example. They are working on technology evaluations and technology tie-ups. They are working on further reducing capital investments on each project, what can be done. So all the paper work and the clearance work is going on, but not the implementation of the project side.

Namit Mata — KC Capital — Analyst

Okay. Got it. And just one full question on the capital allocation side, 2 parts. One, any further thought on the dividend buyback post proceeds? Any sense on the quantum that you would like to distribute. And then as a correlate that more sort of macro level question on capital allocation, where you’ve historically deployed a few hundred crore in operational business. Now you’re going to or potentially through the quarter, you talked about levering up on that as well, so maybe 6, 7, 8, how it will go. So what sort of gives you confidence of deploying such large sum money and that’s not really been the case historically?

Manish Kiri — Managing Director

See, the first — we never had this kind of money historically, right? So there was never need historically. Historically, we have been in the business of diesel intermediates, and we do not intend to deploy these funds into the current business because it is not required besides INR100 crores, INR200 crores of working capital, there is no further deployment would be made in this and intermediate industry because it is not needed. So entire chunk of money for future projects would be of a different scale of a different size. And it would make sense to have and create, as I repeated said earlier a different platform for rig. So it would be a transformative platform. And with that, there is no prior experience. But the team which would be deployed, the new management bandwidth for these projects, which would be hired would have a lot of experience to implement, run and operate these type of businesses.

So we have aspirations to do that. And hence, coming to your first question, we would deploy a majority of the funds in projects space-wise, — it’s not like we will start 3, 4 different projects at a time, but we would be slowly meticularly and prudently deploy funds for the larger projects for the larger size of businesses in future and some portion would again given back to shareholders, either dividend or buyback. Now what could be that quantum, again, is not decided yet. But as soon as the number comes out, we will deliver. And definitely, the Board will decide that number. So I’m not able to give you a specific number, but yes, there would be a number to it in titin.

Namit Mata — KC Capital — Analyst

Okay. And just to understand that a little bit more, given the profile of the new businesses will be pretty different from the existing business, why not sort of return a larger portion to investors and reinvest them through non-listed entities or independent entries. Why do that within the frame of given that there are going to be businesses in different industries, not necessarily linked to the core date?

Manish Kiri — Managing Director

Right. So the way we structure those new investments through new subsidiaries and the separate value creations can take this. We see the fundamental reason to ramp up and to change the platform of Keri with this once in a lifetime opportunity is for the benefit of shareholders. So we would be entering into the projects that would be giving us much better return than what the financial securities or others may would earn for the company. So we would do these projects only if we see the return on investment and return on equity for the shareholders are substantially better than the other options. And if we see that the return on equity or return on investment are not high, we may decide otherwise to give back. It all depends on what kind of returns we are able to generate to the shareholders with this tenth of money.

Namit Mata — KC Capital — Analyst

Okay. Sure. And then last question. Manish…

Operator

May we request you to return to the question queue, sir. We have many participants waiting for the

Namit Mata — KC Capital — Analyst

Sure.

Operator

Thank you.— we’ll take the next question from the line of Mr. Nihar miricorilant from Lowe Investors. Go ahead sir.

Nihar miricorilant — Lowe Investors — Analyst

My question related with the proportion is related to a 260 allowed to in respect to both users where the other LTC has allowed a vision proposed as per the posh method. So as than what is the value which we have seen from the court with respect to the valuation? Is it in the range of $40 million. So $591 million plus $40 million is the total value which we have seen from both I mean $31 million.

Manish Kiri — Managing Director

Yes. So if you look at that era and which the DLM specific number is mentioned, correct? So you add that to 40…

Nihar miricorilant — Lowe Investors — Analyst

DL is not displayed…

Manish Kiri — Managing Director

Yes.

Nihar miricorilant — Lowe Investors — Analyst

DL1 is not a disease if we had DLM on, it comes to $591 million. And when we talk about this 288 notional fees, what is the — what is the valuation which we have seen from the field?

Manish Kiri — Managing Director

Right. So we — our site number in the court was $40 million. caught earlier awarded was $1 million, with Supreme Court has reversed and reverted back to SICC to decide between any number between 1 to 40. So as you rightly said, whatever number judges decide between 10 and 40 based on the existing evidences before the court, — and whatever number that the court finds appropriate, that number would be added to that. And that would be the range. That is the range between 10 and 40…

Nihar miricorilant — Lowe Investors — Analyst

Correct 150, Sir, what is the role of the company modes we have incorporated in 2009, a company called CD International Nordics Limited. So it was named as a dependent company in wearing when I take in FICC pipe. So what is the role of the cumin what is the present state of this company?

Manish Kiri — Managing Director

That company was closed in 2,000 tons, okay? And it was open in 2009 to acquire DyStar through Mauricio stepdown subsidiary of Singapore. So in 2009, KeryHolding Singapore was formed, which was then changed through Distra Global Holdings. And original idea was to have a step-down subsidiary in Mauritius and then Mauricio acquired Daystar NPDs in 2010. So that was the intent. It was opened in 2009. But then the Singapore entity is acquired DyStar directly from Germany. So it was not required. And then 2012, that entity was closed, but one share was there during that time. And that is the reason that you see that name during the acquisition time appearing in the court documents.

Nihar miricorilant — Lowe Investors — Analyst

So right now, shares are made with her industry India or with the subsidiary?

Manish Kiri — Managing Director

In India.

Nihar miricorilant — Lowe Investors — Analyst

India Okay. What is the cash level of data and the value of depreciated companies? Well, the compatible in honoring the judgment?

Manish Kiri — Managing Director

Yes, the cash level of data based on our understanding by end of December would be more than $500 million, and there are no bank loans in data…

Nihar miricorilant — Lowe Investors — Analyst

This is operator I think we lost connection on Mr.

Manish Kiri — Managing Director

Okay. I think the voice is long.

Operator

Yes. So we take the next question from the line of Mr. Pura Shah from Pason Enterprise. Please go ahead sir.

Pura Shah — Pason Enterprise — Analyst

My question has to do with the projects that we’re looking at with the new capital that we are expecting. I just wanted to understand, is there any reason we’re looking at such a wide range of projects instead of concentrating on maybe 1 or 2 because it’s unprecedented to see success in so many projects simultaneously under one route.

Manish Kiri — Managing Director

You are absolutely right. We are looking at a number of projects and evaluating a number of options. It’s not 1 or 2. So we still not decided which projects we will commence and which product we would select. There is a separate committee, the Board has for and that committee will review the projects when time comes and make prudent decisions where to invest and which projects to invest in. So we are still at a evaluation side, and we are evaluating a number of projects. The separate project teams are evaluating the large number of options and not limited to few projects.

Pura Shah — Pason Enterprise — Analyst

Okay. But just following up on that, if let’s say, you like 5 projects, is there a limit to the number of new ventures will be looking at like 1, 2 size, how many ever it could be? Or is it open as of now that how many of the projects we like that are feasible that we go ahead with…

Manish Kiri — Managing Director

See, we are open with which projects and it could not be 1 or 2, it should be multiple so we diversify our risk. But we choose a project which makes the best business sense and which has the best only potential for the shareholders.

Pura Shah — Pason Enterprise — Analyst

Okay. And just another question. On your balance sheet, payables, the trade payables going up. So is there any reason that it’s now close to INR300 crores, that that number is increasing quarter-on-quarter?

Manish Kiri — Managing Director

So if you recall, company had an obligation by September and to pay INR68 crores, okay, it was the pre-settled debt, and that has become — that has gone now. So some of the working capital funds were utilized to pay the presettle liabilities and all the ARP loans, which have been there in the company since last almost 7, 8 years, all have been repaid. So we are, from that sense, completely out of that debt.

Pura Shah — Pason Enterprise — Analyst

Okay. So next, in the coming few quarters, this should drastically improve, then — there’s nothing will improve. Okay. Thank you so much.

Operator

Thank you Sir. The next question from the line of Mr. Jeff Vatica from Savi Investments. Please go ahead sir.

Jeff Vatica — Savi Investments — Analyst

Good morning Sir, my connection referred to last quarter on me. we have been expecting the regimen and the company’s business to improve, but some of we are always during the same as we will improve from next quarter some things or just some environmental change. But when can we expect the to be seen in the results? When can we see the results are profitable for the company.

Manish Kiri — Managing Director

Let me put it this way. Currently, the market situation and the dynamics of disintermediate industries are uncertain, right? So when we are hopeful and when we give you a positive outlook, it is based on certain improvement assumptions. But to be honest with you, the markets continue to remain uncertain. And as you can see, the entire export of dies from India is at half level, right? Now in such a scenario, you can understand that even the textile sector has been doing slow and not well domestically. So we hope and we try to make certain changes internally to improve the numbers and to improve the bottom line. But top line, whether we would be bent or not, we still uncertain, right? So you said very rightly, but unfortunately, from operations side, the reality is reality is uncertain. Now the second part of your question about the cost judgments.

And as I mentioned before, once the judgment is resolved in Singapore courts, there is no specific time line that it would be announced or given. So as on today, we have 3 result judgment sitting in Singapore, Supreme Court as well as international commercial card, but we can only hope that it will come in a reasonable time. And based on that hope we give you guidance that it should come. But the fact and the reality is it can come maybe today after our call is over or it cannot come even for the next 1 month or so, which I have either idea or visibility, nor our counties and layers have any idea of when it would come. What we can only make a statement based on the expectations. Now if you look at certain judgments of the July onwards or August always in international costs, they have come certain judgments, but our injustment has not come for that. Now — so that’s the reason that we wish to give you a good news. — but somehow the system and the judiciary is facing our patients.

Jeff Vatica — Savi Investments — Analyst

Okay. And my second question is, we have a lot of time like to decide what all projects we won. So as we partner any 2 or 3 users are still the company under survey to partner the rate…

Manish Kiri — Managing Director

Company will continue to survey when it is best interest of the company to continue to service until we have visibility of the funds, right? Anything if we freeze now and after 1 or 2 years when the implementation starts and if the market changes, you should not be that prospectively regretting your decision. So that is the reason that we would continue to evaluate rather than biasing ourselves to 1 or 2 specific projects. And then we will make the decision at an appropriate time. And as I mentioned, there is a separate committee created on the Board and which will continue to resume all the projects that the management evaluate

Jeff Vatica — Savi Investments — Analyst

So thank you. That’s all

Operator

Thank you very much. The next question comes from James Martha from Individual Investor. Please go ahead Sir.

James Martha — Individual Investor — Analyst

Hello. Good afternoon sir.

Manish Kiri — Managing Director

Good afternoon might as well.

James Martha — Individual Investor — Analyst

Sir Last year same quarter earnings con call, I asked you when the promoters are going to street there taking the company. You mentioned that very soon, already 1 year as far. So why the delays, whether the price is not favorable for the promoter or…

Manish Kiri — Managing Director

It all depends on where promoters can have excess of funds Capesight? So promoters have been very keen even today also to increase take. But it all depends on how promoters are able to arrange and infuse funds, all right? So that is where the dealer has happened. But again, the intention and the eagerness continue to be increased stake as soon as we can.

James Martha — Individual Investor — Analyst

Okay. And next one is that during quarter 3, quarter 4 con call in FY ’21, you said that on tenders into the appeal for the SITC order, you will ask the cost for a portion of the amount to be transferred at the core, something like that was in radio. What happened on that portion?

Manish Kiri — Managing Director

Sorry, I didn’t understand your question.

James Martha — Individual Investor — Analyst

Means…During the FICC order in 3rd June 2021, before that, you were saying that when Tenderos to the appeal for this main case, 483 million, which was awarded, you said that you will ask the code for the part portion of the buyout money to be transferred to the port or Espro, like that for the guarantee for per…

Manish Kiri — Managing Director

Yes. So see, after — see what happened after that, after in 2021, there were 2 things which happened. One is to go and file an appeal in the Supreme Court. And second was to get a stay on the enforcement of June 21 order, correct? And Senda has not been able to has not secured a stay. — on the CV order of June 21. So tactically, Shanda is running in continuous default since June ’21 because not being able to secure a stake. Now Kiri wanted and to give some money, put some escrows and the without that, the state should not be granted and that never happens.

James Martha — Individual Investor — Analyst

Okay.

Manish Kiri — Managing Director

So they could never secure stay. And even today, they are technically ruling default for more than 1 year and 3 months. — now the appeal was emitted an uphill admission was a different process and Supreme Court of Singareni appeal being one of the large and one of the bigger cases running in Singapore High Court in the international call. But eventually, today, because they’re not able to secure stay, Kiri can claim that they have the content of cost because of not being able to honor for such a long time.

James Martha — Individual Investor — Analyst

Okay. So any assurance has been taken from the tender that they will make the payment as soon as now the SICC GSD judgment been 21 days?

Manish Kiri — Managing Director

No, there is no time line or there is a statutory recovery time line of 21 days, okay? So 21 days is a legal general time line, and that is the practice that we will have to follow.

James Martha — Individual Investor — Analyst

So after that, you’re sure that you have to go for the enforcement order.

Manish Kiri — Managing Director

Yes, up to them. So if they don’t pay in 21 days, then you have to start the enforcement purpose.

James Martha — Individual Investor — Analyst

So post enforcement order, how much time line you are expecting within which the payment will be received?

Manish Kiri — Managing Director

Well, that depends on the court, how much time got gives them. So the way the process usually follow is a court will take control and then depending on hearing them, God will then decide what would be the time to be humeronot to be given any time. It depends on that.

James Martha — Individual Investor — Analyst

Okay, okay. So…

Operator

I’m sorry, as maybe comes join the question too, sir. We have other participants waiting for that term.

James Martha — Individual Investor — Analyst

Yes. Sure.

Operator

Thank you. We’ll take the next question from the line of Mr. Carmen Jakurton from Individual Investor… Please go ahead sir.

Carmen Jakurton — Individual Investor — Analyst

Okay. Now the only question arises because the promoter holding is only 27%. And if you are expecting such a big amount from Singapore Court, why don’t the promoters start buying from the market, so that the investor get the confidence? Any plan on that?

Manish Kiri — Managing Director

Well, as I mentioned, we are always keen to increase our stake. And you will see in future, but I cannot commit to you on any time lines, number one. Number two, buying from the market by promoters also depends on the funds availability with promoters, right? And currently, that is not there. So that is the reason that promoters and promoters buying from the market or promoters increasing their stake right May is work in progress. And at appropriate time, you will see what happens. I cannot give you any specific answer right now. But the only thing I can say is that promoter is extremely keen and very much having interest to increase the thing. Because as an investor, we should have some confidence because we always see get INR12 when the FCC was converted and there is always a fear that FPI will sold off the entire stake and the investors will not get any money out of…

Carmen Jakurton — Individual Investor — Analyst

It depends on the holders, right? And if they sell the cell. So it’s not been as companies come for or anyone.

Manish Kiri — Managing Director

Yes, I agree with you because we are only concerned is the promoter…

Carmen Jakurton — Individual Investor — Analyst

Right. So irrespective of the state of the promoters, the…

Operator

Sorry to interrupt, I think we lost the connection for Mr. Garmin. We’ll take the next question from the line of Mr. Rohit Individual Investor.

Rohit — Individual Investor — Analyst

Good morning sir. Thank you. Recently, there have been certain investors who have been totally selling the shares, mainly — has the management have tried to have a call with them to understand why are the leasing rate in the company and are continuously filling the share…

Manish Kiri — Managing Director

No, there is no discussion. There has been no discussion either the company or the management has approached them, and I don’t think that is a practice. I think whoever wants to buy whoever wants to sell is their own decisions. We do not intend to interfere in that.

Rohit — Individual Investor — Analyst

Okay. Okay. And sir, can we expect to be pro the financial year ’21 on a consolidated level?

Manish Kiri — Managing Director

Well, on consolidated level, profitability will be there. by the end of the year.

Rohit — Individual Investor — Analyst

Okay. Sir, one general comment as an investor I have with respect to CV is. So generally, as a shareholder investor, any someone sees positive movement even if there is a rumor that something is going to happen. But for CV India, there is no rumor. There is 100% sure that in a basis amount of money within 1 day or within 1 year. Mostly, we do not see that positive movement from the shareholders. I don’t know what to say, but I think management should try to understand probably something that you see from management. But there is definitely something missing that even after 100% surety that we are such a real amount, shareholders do not see that positivity.

Manish Kiri — Managing Director

I think I can only make assessment what you can make. And one of the reasons with the investors and even us also as a management and the company expected since 2015 beginning to get the Singapore court issues that result in 2 to 3 years, okay? And it has been now 8 years. From 2023 beginning onwards, we will be entering into a 9 years of legal pattern, correct? Now this 9 years and the extended delays after deal is then the one hearing then the COVID and then the oil and then the side cases. You see so 9 years have tested everyone’s patients. And then — and because of that, I think there is a market perception where it would come and when the company will have the next phase of growth in which year when, when 9 years have passed, See, there’s always a negative feeling about it. I think that is what is affecting the price. If you ask me honestly, that is what I can interpret.

And it is rightfully so because — but when the market would naturally think that let us believe when the money comes, correct? Now as on Pure, do I know that the money will come in December now. Now do I know that the money will come 1 year from now? No, I don’t know, correct — do I know that the lounge would honor the judgment or not, I have no reason it whether they intend to judgment the judgment or not. So with all these uncertainties, the market and shareholders perception will be not incorrect saying that let us see what actual result comes in the end out of 9 years legal battle. And we ourselves were thinking that well by 2018 in all the cases would be over and will have finality of the judgment and out of this legal mass than 2019, 2020, it should definitely happen. The legal counsel say that it is out the limit we should be able to go through the cost posin2021 also past and we are ending now 2022. So see, that’s where the basically patients are out…

Rohit — Individual Investor — Analyst

Correct? Okay. So lastly, a…

Operator

Sorry to interrupt sir.Mr. Rowe may we request to join the question queue A reminder to the participants, please limit your question to the participant. — we take the next question from the line of Mr. Pramod Kataria, Individual Investor. Please go ahead sir.

Pramod Kataria — Individual Investor — Analyst

Good morning, Manish. I have a question is a follow-up question. Now as you are saying the core battle has been going on for 9 years. So I’m also the most of your company since 2014, ’15. Now everyone is aware now it’s a fact that the company is going to receive INR1,000-plus crores, okay? stage by stage 1, then what you call the upend a lot of things happen, the valuations. It took a lot of time. Now it’s a flat noon can be a enthecompany iiN5,000-plus crores.

Manish Kiri — Managing Director

Absolutely. Then we move on into it could have been some other group like Tata any pilot market, many big valuation metrics and revaluation would have happened. But no one is interested in industries at the moment. Whether have you land on anything like to improve the construction or like whatever it has to do by the book group only to give the confidence in a lot of this INR5,000 crores, INR2,500 crores is the market cap for the company. 1,000, we are going to receive the amount. The book value still will grow about 1,000 right now, the book values at 490 — the book value in the IR1000, an no one is interested. I think the same question I have was you…

Pramod Kataria — Individual Investor — Analyst

Correct. So I have no clue and no idea why the shareholders do not want to put in. I am aware of what is happening, and you are also educated well enough. You also know that the cases have been completed, Supreme Court hearings have been completed. — numbers are getting crystallized, maybe 10 million to 5 million plus/minus. But broadly, the numbers are there. But still the enough interest has not been generated. All these information which you have all in public domain, right? And respected, whenever we interact with the investors cabinet or the analyst community as we have explained again and again, and all evidences are there in public to me. So still, if the valuation doesn’t come and our valuations remain under value that only the market can explain. As a promoter and the management, I wish that the value was silcome same as you after knowing all these things as educated investor, how you know, but somehow it is not there, which is really a on..

Operator

Mr. not.? We lost. I think we lost this mine, sir. right, ladies and gentlemen, that was the last question for the day. I would now like to hand the conference over to Mr. Anton Paul for closing comments. Please go ahead, sir.

Anton Paul — Campden Wealth — Analyst

Management will make the closing comments. Manish are all over to you.

Manish Kiri — Managing Director

I thank all of you for spending your time and for participating in today’s call. I’ll discuss with you next quarter, hopefully, with better numbers and better results. We’ll see you next quarter. All the best. Keel. Thank you very much…

Operator

[Operator Closing Remarks]