Meghmani Finechem Limited (MFL) Q4 FY23 Earnings Concall Transcript

Meghmani Finechem Limited (NSE:MFL) Q4 FY23 Earnings Concall dated Apr. 25, 2023.

Corporate Participants:

Maulik Patel — Chairman and Managing Director

Sanjay Jain — Chief Financial Officer

Analysts:

Rohan Ohri — Emkay Global Financial Services — Analyst

Dhruv Joglekar — Vasuki India Fund — Analyst

Bobby J — Falcon Investments — Analyst

Amit Vora — Homoeopathic Clinic — Analyst

Unidentified Participant — — Analyst

Archit Joshi — B&K Securities — Analyst

Rohit Nagraj — Centrum Broking — Analyst

Aditya Jhawar — AT Investments — Analyst

Niraj Mansingka — White Pine Investment Management Private Limited — Analyst

Hitesh Poptani — Private Investor — Analyst

Darshil Jhaveri — Crown Capital — Analyst

Riya Mehta — Aequitas Investments — Analyst

Amarnath Bhakat — Ministry of Finance of Oman — Analyst

Ashok Shah — LFC Securities — Analyst

Aditya Devrath — AK Investments — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the Meghmani Finechem Limited Q4 FY ’23 Earnings Conference Call, hosted by Emkay Global Financial Services. We have with us today Mr. Maulik Patel, Chairman and Managing Director; Mr. Kaushal Soparkar, Managing Director; Mr. Sanjay Jain, Chief Financial Officer; Mr. Milind Kotecha, Head, Investor Relations; and Mr. B. Ravi, Advisor. [Operator Instructions]

I now hand the conference over to Mr. Rohan Ohri from Emkay Global Financial Services. Thank you, and over to you.

Rohan Ohri — Emkay Global Financial Services — Analyst

Thank you, Dan. Good evening, everyone. I would like to welcome the management and thank them for this opportunity. I shall now hand over the call to the management for the opening remarks. Over to you, gentlemen.

Maulik Patel — Chairman and Managing Director

Thank you, Rohan. Good afternoon, everyone, and welcome to the call to discuss MFL’s quarter four and FY ’23 performance. I believe you had an opportunity to view the earnings presentation that was released earlier today. FY ’23 has been an exciting year even after a lot of volatility for the business. The realizations for all the products were at peak, at the starting of the year and have reached to a bottom kind of level by the end of the year. Even after this, our top line for the year as a whole has increased by 41% to INR2,196 crores.

In FY ’23, we have commissioned various projects, we commissioned CPVC resin, epichlorohydrin and additional capacity of caustic soda. This the new additional capacities have contributed marginally for the year as a whole and will contribute in a sizable way in FY ’24. The capex that we are already working on in FY ’24 towards additional capacity of CPVC resin and chlorotoluene’s value chain will bring volume growth in FY ’25. In quarter four FY ’23, we witnessed volume growth of 15% year-on-year and 13% on quarter-on-quarter basis.

Even after realizations for all the products had cooled off, we were able to witness growth in top line on account of volume contribution from existing as well as new products commission in FY ’23. In quarter four FY ’23, Derivatives & Specialty Chemical segment has contributed 38% of the top line versus 19% in quarter four FY ’22. Our transitions and the diversification towards Derivatives & Specialty Chemical segment is now reflecting in numbers. Contribution from Derivatives & Specialty segment will keep on increasing as CPVC and ECH will contribute sizable way in FY ’24 because our all future expansion plans are towards this segment for the business.

We have proposed final dividend of 25% on face value of INR10, INR2.5 per equity share. All our expansion projects related to additional capacity of CPVC resin, chlorotoluene’s value chain and R&D center are moving as per the schedule and will get commissioned within the timeline that we have specified. This will drive the growth for FY ’25. We are focused to do continuous expansion in high-value and high-growth products, strengthening our integrated complex and catering to diversify industry to bring continued and consistent growth in the business.

I now hand over the call to Mr. Sanjay Jain, our CFO, who will take us through the financials.

Sanjay Jain — Chief Financial Officer

Thank you, Maulik. Let me first talk about the quarterly numbers for Q4 FY ’23. Year-on year, we witnessed revenue from operation growth of 13% to INR562 crores backed by volume growth of 15% despite the realization in quarter four for various products. Volume growth of 15% is majorly coming from the commissioning of the new capacities at ECH and CPVC and partially from the existing product, otherwise, the issue is down by 23%. In line with our transition plan, Derivatives & Specialty Chemical segment contributed 38% of our revenue in quarter four ’24, against 19% of quarter four of last financial year.

EBITDA degrew year-on-year basis on account of decrease in realization and convention of the higher-cost inventories. On year-on-year basis, there is a negative growth for PAT also on account of higher depreciation and finance expenses on account of the commissioning of new capacities, which the commission at the end of the financial year. On annual basis in FY ’23, we grew by 41% and revenue from operations to INR2,188 crores backed by high — backed by higher realization and volume growth of 9% if we turn PAT grew in line with the revenue growth, PAT grew by 40% to INR353 crores.

Return on capital employed is 32% in FY ’23 against 29% in FY ’22 and return on equity stood at 40% in FY ’23 versus 36% in FY ’22. Our net debt has decreased by INR112 crores to INR877 crores in FY ’23 versus INR989 crores in FY ’22. In FY ’23, we have redeemed the potential of INR62 crores and had outstanding at INR150 crores as on March 31 — March ’23 compared to the INR211 crores as on March 31, 2022. The net debt to EBITDA has improved to 1.3 times in FY ’22 against 1.9 times in FY ’22 on account of absolute growth in EBITDA and decrease in the debt repayment.

Net debt equity of the company is also stood at 0.8 times in FY ’23 against 1.3 times in FY ’22. In FY ’23, in total, we spent INR416 crores towards — on capital expenditure, the same was INR456 crores in FY ’22.

With this, we can now open the floor for Q&A session.

Questions and Answers:

Operator

Thank you. [Operator Instructions] Our first question comes from the line of Dhruv [Phonetic] from Vasuki India Fund. Please go ahead.

Dhruv Joglekar — Vasuki India Fund — Analyst

Hi, thanks for taking my question. Am I audible?

Maulik Patel — Chairman and Managing Director

Yeah.

Sanjay Jain — Chief Financial Officer

Yeah.

Dhruv Joglekar — Vasuki India Fund — Analyst

Yeah, couple of questions from my side. So firstly, how was the performance of chlorine in this quarter and what was the percentage that was [Indecipherable]?And second was, what was the margin in the caustic business for this product?

Maulik Patel — Chairman and Managing Director

So in terms of chlorine again in this whole quarter have remained a bit negative. And considering in terms of the take-off, again, as we have increased the CPVC, the percentage of chlorine consumption now is around 65% and in the EBITDA margin as you would have seen the company as a whole is around 28%, so we would avoid giving EBITDA margin product-to-product, but you can assume that it is in the same range between 26% to 30% put together.

Dhruv Joglekar — Vasuki India Fund — Analyst

Okay. So this 65% of chlorine consumes in-house also includes the one which we sell through Meghmani Organics or that’s separate?

Maulik Patel — Chairman and Managing Director

So yes, that includes, so 65%, when we say that includes the pipeline customers, which is like in-house consumption only.

Dhruv Joglekar — Vasuki India Fund — Analyst

Okay. So 35% or so —

Maulik Patel — Chairman and Managing Director

Yes, that is [Indecipherable]. But as you know that we are again increasing the capacity of CPVC resin, plus entering into chlorotoluene. So we expect that when both these plants are commissioned, the 65% will move to 75% and then further products will let this to 85%, so our target is to reach 85% consumption of chlorine in-house by in a matter of two to three years.

Dhruv Joglekar — Vasuki India Fund — Analyst

Got it. And if we decline 23% is what you mentioned, so the margin will costing business will remain in the range of 26% to 30% or being at lower?

Maulik Patel — Chairman and Managing Director

Yeah, it should be in that range, because even the raw material prices have been pulled off. So it would be in that range.

Dhruv Joglekar — Vasuki India Fund — Analyst

Okay. Got it. Thanks, Maulik.

Maulik Patel — Chairman and Managing Director

Yeah.

Operator

Thank you. Our next question comes from the line of Bobby J from Falcon Investments. Please go ahead.

Bobby J — Falcon Investments — Analyst

So for the INR155 crores operating EBITDA, how much did you see ECH and CPVC contribute?

Maulik Patel — Chairman and Managing Director

Again, in terms of EBITDA, we are not sharing product-to-product wise, but again, in terms of ECH also and CPVC also, this would be in — I mean, put together would be in the range of 25% to 30%.

Bobby J — Falcon Investments — Analyst

20% to 30% of INR155 crores, correct?

Maulik Patel — Chairman and Managing Director

INR155 crores, I mean, where did that number come from?

Bobby J — Falcon Investments — Analyst

It’s your operating EBITDA right for this quarter?

Maulik Patel — Chairman and Managing Director

Yes, yes, definitely. No, no — I’m not saying that way, because when I say 25% to 30%, that is a part of a percentage as a top line.

Bobby J — Falcon Investments — Analyst

No, no, I’m interested in the EBITDA margin, not top line.

Maulik Patel — Chairman and Managing Director

The EBITDA margin that’s what I’m saying —

Bobby J — Falcon Investments — Analyst

No, no, not the EBITDA margin, the absolute EBITDA contribution out of INR155 crores.

Maulik Patel — Chairman and Managing Director

Again, we would avoid giving number-wise breakup in terms of the product wise for the EBIT also.

Bobby J — Falcon Investments — Analyst

Then how to make out whether you’re actually profitably selling these chemicals or not, because it’s easy to get revenues, right. It’s harder to make profits out of that.

Maulik Patel — Chairman and Managing Director

Yes, that is right, but considering the market scenario, we believe to be in a competitive considering there are other various players also, it’s beneficial that we don’t share from the business perspective.

Bobby J — Falcon Investments — Analyst

Understand. Were they profitable? Were they —

Maulik Patel — Chairman and Managing Director

Yes, it is —

Bobby J — Falcon Investments — Analyst

Just like the profits you were expecting when you put up the plant?

Maulik Patel — Chairman and Managing Director

Yes, what we have anticipated in that line, the profit have been in that range initially for a quarter or two when you have a high inventory at that time, that particular quarter, you get impacted but overall if you look at the current raw material prices and the selling price, the margin remains intact, which is in the range of 25% to 30%.

Bobby J — Falcon Investments — Analyst

Okay. And in terms of the investments you have put up right for the ECH plan and the CPVC, what is your target return on investment?

Maulik Patel — Chairman and Managing Director

So in terms of ECH and CPVC, so that stands for any product that we enter into. Our focus is on the return on capital employed and considering the profitability that we have estimated, while putting up the plant, our ROCE in this both the projects will be 25% or above that.

Bobby J — Falcon Investments — Analyst

But how were you able to predict that given that you don’t have control over the prices?

Maulik Patel — Chairman and Managing Director

See prices if you see in the market that has remained in the range with the raw material prices. So if you track both the things put together, then you will see the margin has remained intact. But again, we would definitely not buy on spot and sell on spot. So again, the raw material that we have in our hand, with that lag only, there will be impact on a margin for that particular quarter or maybe six months till the time the inventory have. Otherwise, on a normal basis, one can, I mean, in this particular range, 25% to 30% margin is achievable.

Bobby J — Falcon Investments — Analyst

Understand. You said in the last call that the some of the ECH contracts would sum up for negotiation, how has that panned out to be for those customers who are buying it from outside sources?

Maulik Patel — Chairman and Managing Director

I didn’t get it.

Sanjay Jain — Chief Financial Officer

Yeah. So, yeah, so we have existing in India, we are in — we are already — we are discussing with the players, we are started selling also to the big players also in contract also. And we are also doing the same contract with the European customers and the U.S. customers. So the tank, we have invested in the infrastructure in Houston for the U.S. market and we also invested in a network for the European market. And we have already sold the first vessel from India and it is almost arrived in Europe and U.S. the first vessel will be sold from the next week onwards, yeah.

Bobby J — Falcon Investments — Analyst

So for FY ’24, you mentioned ECH would start contributing significantly, right. Is that going to be exports or what percent is going to be exports versus domestic?

Maulik Patel — Chairman and Managing Director

So in FY ’23, the exports as a company put together is around 4% and considering the ECH export that we are expecting in next year, that percentage would go somewhere around [Indecipherable].

Bobby J — Falcon Investments — Analyst

So 90% of ECH you’re going to sell domestically next year.

Maulik Patel — Chairman and Managing Director

The company as a whole, yeah, we do export. So particularly about the product yeah —

Bobby J — Falcon Investments — Analyst

I’m not asking as a whole, for ECH particularly, are you going to be selling the bulk of it domestically or exports?

Maulik Patel — Chairman and Managing Director

It’s going to be a mix of both. Looking at the current situation, it looks like that it would be in the range of 40%, 60%. So 40% would be somewhere exports and 60% domestic at current situation.

Bobby J — Falcon Investments — Analyst

Okay. And CPVC would be 100% domestic.

Maulik Patel — Chairman and Managing Director

Yes.

Bobby J — Falcon Investments — Analyst

Right. And one question on caustic soda. Do you produce it in the form of liquids or flakes?

Maulik Patel — Chairman and Managing Director

Both the forms, liquid and flakes, both.

Bobby J — Falcon Investments — Analyst

Right. But there has been quite a bit of price difference between the two. I mean, the price fluctuation has been much higher for the liquid, has it not?

Maulik Patel — Chairman and Managing Director

Yes, the price fluctuation is higher in the liquid in the last couple of quarters. But in the solid also now the price is also — because looking at majorly from liquid to solid only the energy costs will come into the picture. And looking at the current energies on the higher side, yeah, the difference is little on the higher side, yeah, compared to the previous year, yeah.

Bobby J — Falcon Investments — Analyst

Okay. And is there any caustic soda India imports currently or is it all employee self-published?

Maulik Patel — Chairman and Managing Director

On the eastern side, yeah, there is a caustic soda people are reporting because for the alumina business and the western side also, because of the high-demand there is an import, but it’s negligible quantity compared to the demand on the western side, yeah, there is a slight import is coming.

Bobby J — Falcon Investments — Analyst

Okay, all right. Okay, thank you. Thank you very much.

Maulik Patel — Chairman and Managing Director

Thank you.

Operator

Thank you. Our next question comes from the line of Dr. Amit Vora from the Homoeopathic Clinic. Please go ahead.

Amit Vora — Homoeopathic Clinic — Analyst

Yeah, just a minute. Am I audible?

Maulik Patel — Chairman and Managing Director

Yes.

Amit Vora — Homoeopathic Clinic — Analyst

Yeah. Sir, I have a question on the inventory levels, if you see last three years, our inventory levels have gone up from 54% in ’21 to 154% and ’22 and now it is 211%. So, can you just explain about this?

Maulik Patel — Chairman and Managing Director

Yeah, there are few factors which led to this increase in the inventory level in FY ’23 vis-a-vis the FY ’22, the level of INR154 crores has gone up to INR211 crores, because there are major projects like ECH, CPVC which was not in FY ’22 the inventory of that has been there. Second thing, we have modeled — these are — there was an export in — for initiating bulk quantity, that is also in under transition that also fall under inventory as on 31st March, 2023. And since operations are increasing, our inventory pertaining to spares has also gone up a little bit, because overall the operation is increasing.

Amit Vora — Homoeopathic Clinic — Analyst

Okay. And what is the caustic soda realization in this quarter, in the last quarter of the FY ’23?

Maulik Patel — Chairman and Managing Director

The caustic soda realization for Q4 FY ’23 is around 45,000 kind of — for FY ’23.

Amit Vora — Homoeopathic Clinic — Analyst

FY ’23 complete or just Q4.

Sanjay Jain — Chief Financial Officer

Q4 is 38,000 in Q4 — 38,000 Q4.

Amit Vora — Homoeopathic Clinic — Analyst

Q4 is 38,000, okay. And the capacity utilization of caustic soda for Q4?

Sanjay Jain — Chief Financial Officer

Yeah, on the increased capacity, it was around 78% after increasing the capacity, yeah.

Amit Vora — Homoeopathic Clinic — Analyst

4,10,000. On 4,10,000, it is 78%?

Sanjay Jain — Chief Financial Officer

Yes.

Amit Vora — Homoeopathic Clinic — Analyst

And the cost realization is 38,000?

Maulik Patel — Chairman and Managing Director

Yes.

Amit Vora — Homoeopathic Clinic — Analyst

Thank you so much. That answered my questions. Thank you so much.

Operator

Thank you. Our next question comes from the line of [Indecipherable] from Swan Investments. Please go ahead.

Unidentified Participant — — Analyst

Hi sir, thanks a lot for the opportunity. So I just wanted to know what was the realization for CPVC and ECH during the quarter?

Maulik Patel — Chairman and Managing Director

CPVC and ECH realization for the quarter, again see ECH realization would be revolving somewhere around 1,20,000 to 1,25,000 and the CPVC would be somewhere 1,50,000 to 1,60,000.

Unidentified Participant — — Analyst

Okay. And sir, how is the imports from China affecting the pricing in the CPVC segment? The good mix, I have observed that, it has been increasing in the past quarter. So do you think that this will be the bottom price for CPVC or is this further expected to go down?

Sanjay Jain — Chief Financial Officer

Yeah, it can further go down slightly from here, but yeah, but the demand is also increasing in India, so I think — I don’t think so it is going to be big drastic change from this current level.

Unidentified Participant — — Analyst

Okay. So max, you can say 5% to 10% decline from here.

Maulik Patel — Chairman and Managing Director

Yeah. So it is also based on the PVC price, yeah, because PVC price is also decreasing.

Unidentified Participant — — Analyst

Yes. That’s it my side. Thank you.

Operator

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

Archit Joshi — B&K Securities — Analyst

Good evening, sir. Thanks for the opportunity. Sir, could you throw some light on our initiative on chlorotoluenes. I think we are seeing some bit of competition also coming in a couple of good players having some concrete plans in chlorotoluenes and the value chain, of course, as you have mentioned in the presentation. So what are the things you’re targeting, what will be the application area? And is this similar to what our competitor also planning?

Maulik Patel — Chairman and Managing Director

So, Archit, this is first time in India, we have started focusing on this project in India and we have already started a construction almost — our project is almost 60% to 70% is completed. And we are going to commission by quarter four this financial year. And chlorotoluene if you see right now in India it is everything is imported and the major application is agrochemical and the pharmaceutical. And there are in the chlorotoluene and value chain, there are hundred kind of products which is there. And out of that, we have selected in the first phase around 15 kind of product and selected four to five different chemistries right now in the first phase and that is going to be commissioned by quarter four.

The second phase, we are going to add further chemistry in the down the line and that is going to be in the second phase of chlorotoluene and its value chain, which is we are working in the R&D center right now, which is a from Ahmedabad — from our headquarter, it is — we are going to create a new R&D center which is there we are focusing on the second phase of chlorotoluene and value-added products. So what our competitors and what kind of products they are coming into, we have no idea right now. Yeah, so this is our status of the project, anything, if you’d like to know about more about the chlorotoluene, you can ask questions, yeah.

Archit Joshi — B&K Securities — Analyst

Sure sir, thanks for that clarification. Sir, you mentioned about chemistries that you’re going to add, so could you explain what are these? Are these little more on hydrogenation and things like that, because I think it requires a fair bit of complexity for us to go down in the value chain. So what are chemistries will be incorporating in this entire process?

Maulik Patel — Chairman and Managing Director

So in a first phase as we are doing a chlorination of toluene which is our strength, because in that majorly energy is another requirement, which we already have in our existing complex, down the line, we are going to do the further chlorination like a photochlorination kind of product which is mixed chemistry and then further down the line, we are focusing on the hydrolysis and cyanation kind of product. So this is going to be in the first phase right now. Nitration and hydrogenation and other down the line chemistry, which we are not focusing in the first phase, we might think in the second phase down the line.

Archit Joshi — B&K Securities — Analyst

Understood, sir. Understood. And, sir, one last question, what would be the revenue potential that you might be looking at in the first phase and what kind of margins would this make? Would this be like a percentage margin or we are looking at some conversion margins that we anticipate and maintaining?

Maulik Patel — Chairman and Managing Director

Yeah, so looking at our project analysis, as you rightly said, we are doing import subsidiary, but at the same time, our ROCE requirement of the project to the board is around 25% ROCE minimum. So on the minimum side and that — based on that we have selected this project and our initial in the first phase, we are targeting around more than around INR300 crore kind of turnover from this project.

Archit Joshi — B&K Securities — Analyst

Got it, sir. Sir, just one question I had about the — on the chemistry side. So is this the ring side or the supply chain chemistry that we are targeting, planning to introduce?

Maulik Patel — Chairman and Managing Director

So we are going to start with ring and then followed by supply chain.

Archit Joshi — B&K Securities — Analyst

Got it, sir. Thanks. Thanks a lot for this clarification, sir. All the best. Thank you.

Operator

Thank you. Our next question comes from the line of Rohit Nagraj from Centrum Broking. Please go ahead.

Rohit Nagraj — Centrum Broking — Analyst

Yeah, thanks for the opportunity. The first question is, so we have our capex plan, which is planned out for FY ’24, after that what is the kind of capex that we are looking at in FY ’25 side and afterwards?

Maulik Patel — Chairman and Managing Director

So one thing like we are starting chlorotoluene and value chain as a first phase as a part of value chain that is our first phase right now we are doing. CPVC expansion which we’re doing it, that will result in 2025 in terms of the volume. And in 2026 onwards, the chemistry which are working right now as [Indecipherable] that the 75% chlorine consumption is going to happen in-house right now after chlorotoluene and the CPVC. And further, we have a plan to go up to 85% of the chlorine consumption as well as other derivatives consumption which we already have. So we are thinking, which is our strength and we can increase the integrated complex of our existing product and that kind of derivatives and the import substitute derivatives we are focusing right now. So we have not disclosed right now, but at the right point of time, we are going to disclose once the Board will approve.

Rohit Nagraj — Centrum Broking — Analyst

Right. Got it. My second question is in terms of the R&D capabilities. So you talked about multiple chemistries in the initial phases and then further moving up the value chain. So what is the R&D initiative that we have taken in terms of teams, in terms of collaboration with any other universities [Phonetic] or so and what is our focus over the next couple of years once we start building up, I mean, once we built the R&D facility? Thank you.

Maulik Patel — Chairman and Managing Director

Yeah. So it’s a good question. We have already started focusing on this R&D of chlorotoluene and its value chain I think one year before. And the first phase, whatever we are targeting chemistry as we have mentioned recently that chemistry is already done, all the chemistry project is done at the R&D level, all are completed. Now we have to execute in terms of the engineering and the site commissioning only. The second phase we have just started the work of the chlorotoluene and for that already the people who are experienced in the similar chemistry we are hiring right now. So we currently we have around 20 to 25 people. We are working in R&D right now. And over a period of time, we will increase the strength once our first phase was going to be commissioned. So this is just the beginning in terms of the R&D spending, in terms of the specialty chemical. But this trend — this team will continuously in towards the value-added chemistry in the chlorotoluene value chain right now.

Rohit Nagraj — Centrum Broking — Analyst

Sure. That’s all from my side. Best of luck. Thank you.

Operator

Thank you. Our next question comes from the line of Aditya Jhawar from AT Investments [Phonetic]. Please go ahead.

Aditya Jhawar — AT Investments — Analyst

Hi, am I audible?

Maulik Patel — Chairman and Managing Director

Yes.

Aditya Jhawar — AT Investments — Analyst

Yeah, can you give me the volume breakdown for CPVC resin, H2O2 and CMS?

Maulik Patel — Chairman and Managing Director

Sorry.

Aditya Jhawar — AT Investments — Analyst

CPVC resin, H2O2 and Hydrogen Peroxide and Chloromethanes, volume data.

Sanjay Jain — Chief Financial Officer

For CPVC resin, volume data, see we can — what we can convey is that it has run at the capacity utilization of around 90%. And Hydrogen Peroxide, we have given, right, it’s somewhere around 90% to 100% yeah. So any other product that you were talking about.

Operator

Gentlemen, the line of the participant has been dropped. We’ll take our next question, which is from the line of Niraj Mansingka from White Pine Investment Management Private Limited. Please go ahead.

Niraj Mansingka — White Pine Investment Management Private Limited — Analyst

Yeah. I just wanted to know the volumes of epichlorohydrin for the quarter.

Sanjay Jain — Chief Financial Officer

Sorry.

Maulik Patel — Chairman and Managing Director

Volumes for ECH.

Sanjay Jain — Chief Financial Officer

Okay. So again ECH, the capacity to regulation is around 40%.

Niraj Mansingka — White Pine Investment Management Private Limited — Analyst

Okay. And what was in the Q3?

Sanjay Jain — Chief Financial Officer

So, Q3, it’s very negligible. So it was gradually increasing and that’s why we have reached in Q4, and as, Maulik earlier specified in the call that we have ready with the infra and the goods are started moving in the global market also. This number should improve from the Q1 onwards.

Niraj Mansingka — White Pine Investment Management Private Limited — Analyst

And as we are speaking about the volume utilization for this year.

Sanjay Jain — Chief Financial Officer

I mean, we just started the April, so I guess 31st March is something which is more reliable. So that is 40%, as I said in ECH.

Niraj Mansingka — White Pine Investment Management Private Limited — Analyst

Okay. The other question I wanted to know Maulik bhai is, on this chloromethane products that you have downstream products, can you shed some more how much value does India import and derisking yourself being the only player in, say, five — three, four years from now or the period between this derivatives and how much investment can go into this actually — the entire chloromethanes derivative?

Maulik Patel — Chairman and Managing Director

Yeah. So see, chloromethane capacity which is right now majorly application is of pharma segment as a solvent and another segment is the refrigerant gas and third is the PTFE kind of product. So these three segments are growing, everybody is expanding capacity. The refrigerant gas earlier, people used to manufacture R22 for the chloroform consumption, now the new next-generation gas, this R32, which is consumed MDC, so now everybody started focusing the investment towards R32 and the MDC consumption will grow, which is 60% of part of the chloromethane production. So R32 is going to be the next product globally, which can consume as a refrigerant gas and or existing refrigerant gas people, they’re also expanding capacity in India.

At the same time the PTFE capacities also people are expanding. So the R22 consumption will remain as it is or it will increase further in terms of the — as the PTFE capacity of India is increasing. And the pharmaceutical consumption was little down last couple of quarters. So it was little down, but it may increase as the normal situation will happen and now we can see that again the pharma segment also started picking up slowly compared to last couple of quarters. So earlier India used to import a lot, MDC, as well as chloroform. But now, if you see the domestic manufacturing capacities are also coming because people are planning down the line chemistry of refrigerant gas and the PTFE expansion. So and the import may reduce over a period of time in India. That’s what we believe, based on the currency situation.

Niraj Mansingka — White Pine Investment Management Private Limited — Analyst

Okay. Sir, is it likely that we will be making R32 in the longer perspective, this year down the line?

Sanjay Jain — Chief Financial Officer

Sorry.

Niraj Mansingka — White Pine Investment Management Private Limited — Analyst

Is it possible that you’ve been making products like R32 from your side?

Sanjay Jain — Chief Financial Officer

No, right now we don’t have any focus to manufacture R32. Right now, our focus is very clear in terms of the capex where we are going to spend. First, we will reach 85% of the internal consumption of the chlorine content and then probably we might focus on the other value chain, yeah.

Niraj Mansingka — White Pine Investment Management Private Limited — Analyst

And sir, two questions related only, is chlorotoluene, what was the imports of its chlorotoluene and its derivative in say FY ’22 or ’23 whatever number you can share?

Sanjay Jain — Chief Financial Officer

So chlorotoluene as I mentioned, one particular product is not we are going to manufacture, we are going to target I think 15 to 20 products line and — yeah, so it is a group of products. So it is very difficult to comment on one particular product in terms of volume.

Niraj Mansingka — White Pine Investment Management Private Limited — Analyst

No, no, I’m asking about group of products. You said, there are 15, 20 products we are targeting and the 100 products that are derivatives of chlorotoluene. So wanted to know what is the imports that India take on those entire basket?

Sanjay Jain — Chief Financial Officer

So right now, we understand that our strategy is very clear, we are targeting 50% domestic market. We will absorb because everybody would like to have two vendors. So the import will continue, but we are targeting just a replacement of the 50% out of domestic market and the 50% we are going to export. That is the strategy we have kept mind in India because in terms of volume, I would say around it is continuously increasing if you see the last three to four years data because as the China Plus One, all specialty and agrochemical companies they are increasing their dependency on India like all specialty chemical companies are increasing and the new molecule, there are lot of more opportunity, they are giving to the Indian market, rather than the Chinese market. So, I would say the future opportunity will be more in this current set of products which we are planning to manufacture in the first phase.

Niraj Mansingka — White Pine Investment Management Private Limited — Analyst

Okay. I’ll come back. Thank you very much.

Operator

Thank you. Our next question comes from the line of Hitesh Poptani [Phonetic] an individual investor. Please go ahead.

Hitesh Poptani — Private Investor — Analyst

Hi, thanks for taking my question. I just wanted to know about the ECH utilization in the current quarter as we were expecting that with the China opening up, there would be orders coming in. So are we expecting — are we seeing something better on that side?

Sanjay Jain — Chief Financial Officer

Yes. So right now as we are seeing that we have run in quarter-four around 40% of the capacity. But the China is opening up the second time in the world. The renewable energy demand is also picking up. So the win-win market is opening up very fast and which is also a major consumption for the [Indecipherable]. So, I would say from the quarter one onwards and we have also started infrastructure in Europe and U.S. So that will open up and the quarter one onwards from this year onwards, our volume will increase from 40% onward quarter-on-quarter this year.

Hitesh Poptani — Private Investor — Analyst

Okay, great. And I was also looking for a better clarification like we have said that we are expecting to reach INR5,000 crores by 2027. So I can see that we have a roadmap till 3,000 FY ’25, with our new capacities coming in with the chlorotoluene and CPVC. So are we expecting to foray into something new chemistry or are we looking to expand in toluene chemistry only.

Sanjay Jain — Chief Financial Officer

So I think we will do both of the new chemistry as well as the toluene downstream also, we will expand further, yeah, so we are targeting both. And third, there is opportunity in existing product also, we will also think of the existing expansion of — in the existing product line also. So all three segments, we are focusing to reach at INR5,000 crores, yeah.

Hitesh Poptani — Private Investor — Analyst

Okay. And what was the ECU realization on our different segments, can you bifurcate on that?

Sanjay Jain — Chief Financial Officer

Sorry realization for?

Hitesh Poptani — Private Investor — Analyst

For all the segments, like chlorine and hydrogen product side and everything.

Sanjay Jain — Chief Financial Officer

I won’t be able to give product-wise, but the ECU caustic soda that we generally share is somewhere around 38,000 in Q4 FY ’23.

Hitesh Poptani — Private Investor — Analyst

And since we have already started the downward journey in the prices, so are we seeing further downward movement in the prices or is there a cap that we can expect like this won’t go down from this price point?

Sanjay Jain — Chief Financial Officer

See again, when the 38,000 is not something which is a downward this looks more like a realistic kind of a situation. So in the current situation if you see, that has happened in line with the energy prices and considering the situation when there is a global slowdown and there is a subdued demand at this level, despite there’s kind of a stable out and looking at the situation, we expect that it might be at this level, it might go up down the line.

Hitesh Poptani — Private Investor — Analyst

Okay. Thank you so much for taking the questions.

Operator

Thank you. Our next question comes from the line of Darshil Jhaveri from Crown Capital. Please go ahead.

Darshil Jhaveri — Crown Capital — Analyst

Hello. Hi, good evening and thank you so much for taking my question. So, sir, I just wanted to ask all our new capacities are now come in for yearly two quarters, so what kind of revenue jump we might be able to see in FY ’24?

Sanjay Jain — Chief Financial Officer

So in FY ’24, again what we, I mean, see, we expect volume growth in the range of 15% to 20% and that will drive the value growth somewhere around 20% plus. So that is what we are expecting to happen in FY ’24.

Darshil Jhaveri — Crown Capital — Analyst

Okay sir. And that — because of that, our margins will remain in our 30% range, right sir.

Sanjay Jain — Chief Financial Officer

So margins we had earlier also specified like last — since last April, we are specifying that our margins would be in the range of 28% plus, minus 2%. And that is something which can sustain for a longer period of time, so this year or even for the coming years, 28% plus, minus 2% is a sustainable margin.

Darshil Jhaveri — Crown Capital — Analyst

Okay. So that I think helps me a lot, sir. And sir, I’m sorry, the earlier participants had asked, which would be just 3,000 by FY ’25 and 5,000 by FY ’27, that is our basic within that we are planning, sir. Right sir?

Sanjay Jain — Chief Financial Officer

We have — I mean, see, we have given a long-term number, we would avoid giving a yearly kind of a guidance. What we have given is 5,000 CF for by FY 2027.

Darshil Jhaveri — Crown Capital — Analyst

Okay, okay. Thank you, sir. That helps me a lot. All the best, sir.

Sanjay Jain — Chief Financial Officer

Thank you.

Operator

Thank you. Our next question comes from the line of Riya Mehta from Aequitas Investments. Please go ahead.

Riya Mehta — Aequitas Investments — Analyst

Hello, thank you for giving me the opportunity. And my first question would be in regards to caustic soda, what is the power cost side now for us. And I think last quarter we had some high-cost inventory of coal. Right now, what would be the —

Sanjay Jain — Chief Financial Officer

Okay, coal. If you look at the power costs, the coal prices increased by almost 30% compared to last year. And from quarter to quarter basis, the coal price is little bit cooled off by 50% even the power generation costs also moving at same line.

Riya Mehta — Aequitas Investments — Analyst

So almost 15% reduction.

Sanjay Jain — Chief Financial Officer

Quarter-to-quarter, it is almost down by 14% sort of thing, in line with the coal prices.

Maulik Patel — Chairman and Managing Director

Yeah, so normally, yes, coal is such a by inventory where we don’t have a very heavy stock, people don’t keep very heavy stock, normally, it will be absorbed whatever the past order or something is there it is absorbed in couple of months’ time. Normally it is started rolling. If the price is down, then we can get advantage in one quarter itself.

Riya Mehta — Aequitas Investments — Analyst

So more or less is the, see on a quarter-on-quarter basis, our realizations have fallen to the similar extent of reduction in power cost.

Maulik Patel — Chairman and Managing Director

Yeah, the inventory — so coal prices in a couple of months, we’d be getting the realistic figure what is going on right now in the existing market. Yeah, so it is not much difference in terms of the timeline.

Riya Mehta — Aequitas Investments — Analyst

Okay. And in terms of ECH, what are the volumes, it will give me the production numbers for ECH business.

Sanjay Jain — Chief Financial Officer

I mean in ECH, again, we can give the capacity utilization that we have done in Q4 which is —

Riya Mehta — Aequitas Investments — Analyst

40% I think that you mentioned.

Sanjay Jain — Chief Financial Officer

Yes.

Riya Mehta — Aequitas Investments — Analyst

And for CPVC.

Sanjay Jain — Chief Financial Officer

CPVC, it is around 90%.

Riya Mehta — Aequitas Investments — Analyst

90% of the 30,000 which has been badly commissioned.

Maulik Patel — Chairman and Managing Director

Yes.

Riya Mehta — Aequitas Investments — Analyst

And in terms of the coming. So generally I think ECH cycle is on an annual basis, so would be — is it likely to assume that the current 40% is likely to sustain with plus or minus 5% to 10% for the full-year?

Sanjay Jain — Chief Financial Officer

So, no I think now the export infrastructure as, we have started, so there is a high possibility it will increase further from quarter one this year onwards, yeah, from 40% yeah.

Riya Mehta — Aequitas Investments — Analyst

Okay. And so for caustic soda as a whole since lot of capacity that’s come on stream, what kind of demand slowdown are you seeing if any?

Sanjay Jain — Chief Financial Officer

Yes, normally if you see in the past, every year, like one plant of sizable caustic soda plant is easily absorbed in India. So in the current — we are still that — if any new plant will come in once in a year it will easily absorb in one year time, definitely a couple of quarters, we find it little over-supply will be there, but eventually, it will be absorbed. So that’s what we see in last five years, whoever has done the expansion, eventually it is absorbed in the market in one year time. And looking at the current expansion, all the companies, all the chemical companies and the specialty chemical companies, which they are spending, irrespective of the current market scenario. So we think that the caustic consumption will easily absorb in next six-month time.

Riya Mehta — Aequitas Investments — Analyst

Right. And are we seeing any dumping from China?

Sanjay Jain — Chief Financial Officer

China will never exporter for Indian market, if you see them —

Riya Mehta — Aequitas Investments — Analyst

For driving last couple of quarters back, we were chlorine and the chlorine business because of that the caustic was down. So are we seeing the similar phenomena happening?

Sanjay Jain — Chief Financial Officer

No China in Indian market, they never export normally in India, it is coming from the Iran and the Middle East side. China is not exporting to India.

Riya Mehta — Aequitas Investments — Analyst

Okay, sir. And I think that’s it form my side.

Operator

Thank you. Our next question comes from the line of Amarnath Bhakat from Ministry of Finance of Oman. Please go ahead.

Amarnath Bhakat — Ministry of Finance of Oman — Analyst

Yeah, hi. Am I audible?

Sanjay Jain — Chief Financial Officer

Yes.

Amarnath Bhakat — Ministry of Finance of Oman — Analyst

Got it, okay. Yeah. Two, three quick questions. It’s all raw material prices whenever it fluctuates either go up or go down. Is it a pass-through?

Sanjay Jain — Chief Financial Officer

Yes, normally it is pass-through. But normally whatever the inventory you have, you have to absorb. So, in every product, every inventory level is different, depends on the supply situation of that particular time. So, normally it is pass-through, but — so as I mentioned inventory — it depends on the inventory level and the product which product and which inventory which raw material, particularly you are talking about, but normally it is pass-through year.

Amarnath Bhakat — Ministry of Finance of Oman — Analyst

CPVC and ECH.

Sanjay Jain — Chief Financial Officer

Yes, eventually it is pass through, yes.

Maulik Patel — Chairman and Managing Director

So pass-through is majorly happening because there is a good demand for these products in the market.

Amarnath Bhakat — Ministry of Finance of Oman — Analyst

Yeah, that is if the price goes up, it is not decision for you to pass it to the customer and the demand is supporting the price escalation.

Sanjay Jain — Chief Financial Officer

That’s right. See, normally in some product, it will take one or one quarters or two quarters, depends on the market situation. But yeah, eventually it is pass-through.

Amarnath Bhakat — Ministry of Finance of Oman — Analyst

Yeah, okay. And second thing is see this, last year, we heard a lot because of the China lockdown, clear consumption has and came down drastically. And now from January and while China has opened up their economy is now coal pledge. Now, how do we characterize that impact on your company? They are opening up fully as the economic cycle. How does it impact to you either in terms of the availability of your raw material or the product demand or prices of the product?

Sanjay Jain — Chief Financial Officer

Yeah. So in China, see, definitely there is something in China is changing, it can impact the overall part of the world, indirectly or directly. The same situation happened with in the chemical segment also because they are — majority of the chemical, they are the biggest supplier to the world. So their internal consumption, it will not increase because they are very opportunistic in terms of the manufacturing when they require, there is a local demand is there in the internal market, they give always a priority and the export market, they consider as the secondary market. So right now after their New Year, everybody will think that economy will open up and will start picking up, but that’s what we are not seeing as of now, but eventually it will happen and they will reduce the dumping of the product in terms of the world market.

So there is an indirect impact in India also, but thanks to the — in terms of the duty protections whatever having some of the products. I think that will protect us in terms of the margin and in terms of the business.

Amarnath Bhakat — Ministry of Finance of Oman — Analyst

And are you feeling some kind of an advantage of China Plus One. Though you are not a major exporter at the moment, but are getting a sense that there is existing of demand for some of the product is generally being procured from China and there is a tendency just procured that from India? I’m talking about the products you are dealing with?

Maulik Patel — Chairman and Managing Director

So, yeah, I would say that, yes, because there are two major reasons, like, there are over-dependency of all big multinational companies in China. So they wanted to risk [Phonetic] so they wanted to divide in the future, so new more businesses are coming to India. So —

Amarnath Bhakat — Ministry of Finance of Oman — Analyst

Are you getting the advantage?

Maulik Patel — Chairman and Managing Director

Yes, indirectly the domestic consumption as the domestic specialty chemical companies, we are expanding indirectly we are getting benefited and advantage in terms of the supplying to those companies. And like chlorotoluene is one of the examples. Secondly, like U.S., there are Trump [Phonetic] tax which is given in 25% duty to the Chinese manufacturing company. So that Trump tax also indirectly helps to the Indian manufacturers to supply more to the U.S. market. So, yes, this kind of protection also supporting for the Indian manufacturing companies. And if you see the like European situations last one year and even in the current times, lot of mid-sized specialty companies and lot of mid-sized chemical companies, they are struggling a lot, even though gas prices reduced come back original level, but still.

If you see, they are not they are suffering, because they cannot increase, nobody is thinking of any expansion or any capex plan in the European chemical market. So all those volume people are taking now to manufacture in India. So, yeah, indirectly because of whatever the reason Ukraine or the Trump tax or we are getting indirectly advantage as the Indian as a chemical manufacturing up.

Amarnath Bhakat — Ministry of Finance of Oman — Analyst

Thank you very much. The last part was, if let’s say few — this energy cost whether the power and fuel cost which is part of your major expenditure. Now, we can see the coal prices on a downtrend, of course, in the latter part, it has increased, plus, others where expenditure also came down in the last few quarters. How does it impact your cost structure and in terms of savings or if there is saving, you can pass on to the customer, this one as well.

Maulik Patel — Chairman and Managing Director

Yeah. So I, yeah, that is right. If you see the overall portfolio of our products, we have ChlorAlkali was the — with the product, where our dependency on the power side is very high. And that also if you see on other derivatives, where we are expanding and where we are doing capex, where the power its intensity — power intensity is very low in terms of compared to the ChlorAlkali level. So the power dependency on the ChlorAlkali side, yeah, we have a little on the higher side, but that also thanks to the Government of Gujarat, also they had come up with a very great policy where we can get a long-term contract with solar and renewable power, where we can reduce our energy costs.

So at first phase, I think we have announced a couple of quarters back, we have announced we are going to commission it, but there was a little hiccup in the Gujarat government policy and we are going to commission by next month onwards. So that’s how the new energy requirement, I don’t think so anybody is going to focus in terms of the energy investment, they’re going to tie-up with such kind of companies who are ready to supply for a long-term contract to company like us and we’re going to tie-up with them. That’s what happened in Europe, U.S., Japan, everywhere, people don’t invest in the captive power plant. So that kind of scenario will happen in India also and that’s how the people will mitigate the risks in terms of the power cost.

Amarnath Bhakat — Ministry of Finance of Oman — Analyst

Okay. So can I assume that this power cost [Indecipherable] will be a stable one and not fluctuate much likely that happened last year?

Maulik Patel — Chairman and Managing Director

See, this is — last year was — I think it was in the history, it was never happened before, because of the Ukraine, war, the gas supply, the global energy situation is like that. If you see the current situation also, the energy, which is also not in a normal condition I would say not reached to a back to a regional level of pre-COVID level yet. So, yeah, situation energy indirectly, depends on the global oil price, global gas price or whatever it is happening in the political level. But yeah, so it is a global —

Amarnath Bhakat — Ministry of Finance of Oman — Analyst

At a company level, can we assume some stability at your company level considering you are having a long-term contract or you are planning to have a long-term contract and I will assume the prices will be stabilized here. So in a going-forward cases, if you secure a long-term power contracts, either from solar or wearable, then the stability of the unit cost of the power will be realistically assumed.

Maulik Patel — Chairman and Managing Director

So frankly speaking, like you have asked the question about the raw material situation, it is passed on or not. The same situation for the caustic soda because caustic soda, we consider power is a part of the raw material, it is not part of the utility. So whatever the power price scenario in the world depends on the — we have to pass on the cost in the caustic soda.

Amarnath Bhakat — Ministry of Finance of Oman — Analyst

Yeah, but the caustic soda market is so volatile, that actually it is a seller, buyers March we are seeing how the prices dropped in the recent past. So are you in a really positioned to dictate the price in a fluctuating market or you have to accept the market price.

Maulik Patel — Chairman and Managing Director

See, we accept the market price. But as you see in the past when some suppliers or once capacity is coming in the new capacity is coming for the short period of time, this will — scenario will remain like this little oversupply in India, but eventually it is absorbed.

Amarnath Bhakat — Ministry of Finance of Oman — Analyst

So you will get the pricing power in the sense —

Maulik Patel — Chairman and Managing Director

Yeah, eventually for one or couple of quarters, I think you feel that you don’t have a pricing power, but normally it is after a couple of quarters. And the second thing — another thing is now our entire focus, whatever we have done in the past is on the — I think we have reached 1,200 tons per day capacity, which is 4 lakh ton capacity and now in the next five years, our strategy is very clear, we are going to focus 100% on the derivatives, that only.

Amarnath Bhakat — Ministry of Finance of Oman — Analyst

Yeah, value-added side, the margin will be improved overall consolidated margin.

Maulik Patel — Chairman and Managing Director

Yes, like in the earlier remarks, what we have mentioned, we have reached to 38% in the quarter four, we have reached to 38% of our revenue will be from the derivatives, rather than the ChlorAlkali. So eventually, we are also focusing I think next year, end of next year, we will see our revenue — more revenue will come from the derivatives side. So almost we will reach at 50%-50% level in the end of next — end of current financial year.

Amarnath Bhakat — Ministry of Finance of Oman — Analyst

Then in that case, that means, if we assume that much of the higher proportion of sales from the value-added services, your blended margin it’s supposed to be higher than what you ended in this quarter. You’re ending is around 28%, so if I assume what you are just saying, then your blended margin for the next year or next year onwards on is supposed to be higher than that. I don’t want to see that, but at least it will be higher than your Q4 ’23 number.

Maulik Patel — Chairman and Managing Director

It can be, but if you see the from the ChlorAlkali side, last two years, our margin was very healthy because of the global scenario was like that. So but, yeah, I would say, down the line, down the road, you will see that our numbers and everything will be more balanced, because our products will be — now we are catering to 15 to 20 kind of end-users in next three to four years’ time. So we will not be only focus on one particular end-user, one particular product. Our portfolio will be widely diversified and our end-use and application will be around 15 different segment.

Sanjay Jain — Chief Financial Officer

And just to add to what Maulik said in terms of the margins also like what you said is, our margins will remain in this range, 28% plus-minus 2%, so worst-case 25% and the best case kind of 30%, but the — when we are entering into this derivative products, our focus is on the ROCE, which will improve, like if compared to what we then you’re adjusting to ChlorAlkali. So what we’re trying to do is we’re trying to bring consistency in our top line and the bottom line like catering to 15 industries. So there is going to be one district, which might not perform that well in that particular year. But as you will be in the various industries, various catering to various industries will mean consistency growth in top line and bottom line and also in terms of margin and growth in ROCE.

Amarnath Bhakat — Ministry of Finance of Oman — Analyst

That’s really fantastic. And I’m trying to understand what if I calculate it what you just know said, your next five years, 23% revenue CAGR. You’re talking about the margin of 28% to 30% on an average in this range, with an expected ROCE of an incremental capital between 25% to 30% on a consistency basis of the next three, four years and that’s for a chemical companies. Fantastic. And I can use this word fabulous anyway, if it is, that happened very good but very, very, I can say we are dealing with the entire world chemical companies, but this is very surprising, but we are hearing from an Indian company, something like that and best of luck for you.

Last question if I may, allow please. How much of your material go for as an input to pharma center on an average, Indian Pharma center?

Maulik Patel — Chairman and Managing Director

So to be very honest, every product line has the different sector to cater. There is all for like, if you say the chloromethanes segment they have a very high weightage on the pharma sector than the Chloro Alkali segment. If you see like epichlorohydrin, we will have a little pharma segment around 20% because as the intermediate. So, every product has a different percentage level dependency in the pharma segment. So it is company as overall, I think we need to see how much we have.

Sanjay Jain — Chief Financial Officer

It won’t be like a substantial number of the total revenue.

Amarnath Bhakat — Ministry of Finance of Oman — Analyst

Yeah, but why I’m asking this question, let me clarify that we have very nearly seen that Indian pharma industry, especially the intermediate and the API sector is growing or expected to grow quite rapidly, because of the huge capacity they’ve built up and there is a clear indication that the orders are flowing to them either from China Plus One or Europe Plus One situation, some of the big pharma companies that the announcement in a big way. And I know some of them getting raw material from you as well. So I’m trying to understand if the pharma API effect or intermediate sector are really falls for a growth for the next four, five years down the line. Then how it is going to impact you as a raw material supply to them?

Maulik Patel — Chairman and Managing Director

Definitely the pharma segment, definitely, it will help to absorb all — majority of the all the products in India, but we also feel that we are diversified, because agro also sector in terms of volume, there are number of companies are less, but in terms of the volume, there are huge opportunity in the global situation. So not only pharma, but we are also considering a lot of new agro molecules will come in India as a toll manufacturing or custom manufacturing for the global multinational in India. So — and see different segment like B2C segment in India — Indian consumption is also increasing in the other part of the industry also. So we are not focused on one particular line. But yeah, our portfolio is going to be more diversified, yeah.

Amarnath Bhakat — Ministry of Finance of Oman — Analyst

Okay. Thank you very much, Mr. Patel and best of luck for your all the junctions and I hope they’ve really been delivered. Thank you very much.

Maulik Patel — Chairman and Managing Director

Thank you.

Operator

Thank you. [Operator Instructions] Our next question comes from the line of Rohit Nagaraj from Centrum Broking. Please go ahead.

Rohit Nagraj — Centrum Broking — Analyst

Yeah, thanks for the follow-up. So, I read somewhere that U.S. EPA is proposing some ban on chloromethane. If you have heard about it, and if you can just give us any clarification on the same. How will it impact the overall chloromethanes landscape in India and probably globally? Thank you.

Maulik Patel — Chairman and Managing Director

See, chloromethane is a product line where major — so this is a major change, people are because, it is consumed in three different segments like pharmaceutical segment as a solvent, where I think U.S. is not in a big way. Refrigerant gas is another application where U.S. is big, so refrigerant application and people are coming earlier was refrigerant gas was famous and because of that deadline and monitory protocols, people are changing the focus on R22 to R32, as I mentioned. So people are focusing on the different, different gases, different, different time. But as India, we believe that in India I think the — still I think we are far away from that deadline and I don’t think so, till 2000 I think — in 2032 I think we are going to continue with the refrigerant gas is what we have right now and gas is like R32, it will continue in India. So I don’t think so that is the impact on the Indian chloromethane industries because of the U.S. situation.

Rohit Nagraj — Centrum Broking — Analyst

Any impact globally in terms of demand-supply mismatch and that may have repercussions across the pricing?

Maulik Patel — Chairman and Managing Director

So global situation, yeah, it might change over a period of time because the new refrigerant gas and there are new chemistry which is Europe and U.S., which we are adapting, they’re consuming different — different part, like earlier we used to consume chloroform more now they’re focusing on MDC more in the future, they will focus something more on other chemistry. So yeah, there it keeps changing, it is never a constant, but yeah, but timing of the product in India, we feel we are far away from that and it will not change in India. And chloromethane mostly in India, it is coming, import from not from Europe and U.S., more it is coming more from the China side. So I don’t think it will have a major impact in India.

Rohit Nagraj — Centrum Broking — Analyst

Yeah, sure. That’s all from my side. Just wanted to question in terms of questions. So if the conversation has elongated further, you should restrict the number of questions. So there it is clear for the other people who are in the queue. Thank you so much and best of luck.

Sanjay Jain — Chief Financial Officer

Thank you.

Operator

Thank you. Our next question comes from the line of Ashok Shah from LFC Securities. Please go ahead.

Ashok Shah — LFC Securities — Analyst

Thanks for taking my question. Hello sir, can you just guide me on are there any still the antidumping duty protection is available? And — yeah.

Maulik Patel — Chairman and Managing Director

Antidumping duty is available for the CPVC resin.

Ashok Shah — LFC Securities — Analyst

Not on chlorine and caustic?

Maulik Patel — Chairman and Managing Director

Chlorine, there is no import in India —

Ashok Shah — LFC Securities — Analyst

Caustic?

Maulik Patel — Chairman and Managing Director

Caustic, there was in the past, but I think the current prices is so high. So there is not duty is applicable on caustic soda right now.

Sanjay Jain — Chief Financial Officer

Sir, currently in margin bucket chlorine prices in negative.

Maulik Patel — Chairman and Managing Director

Yeah, it is negative slightly negative, yeah, it is.

Ashok Shah — LFC Securities — Analyst

Can you just bifurcate caustic price and chlorine price?

Sanjay Jain — Chief Financial Officer

So in terms of when we share the ECO, that is 38,000 for Q4 FY ’23, that considers the impact of chlorine.

Ashok Shah — LFC Securities — Analyst

So it is minus 8% or minus 9% for chlorine?

Maulik Patel — Chairman and Managing Director

It will be somewhere around minus 2,000 kind of thing.

Ashok Shah — LFC Securities — Analyst

Mine 2,000, okay. And at the salt level and the power post, what is our fuel cost of product line. It comes around the 25,000 approximately?

Maulik Patel — Chairman and Managing Director

See, again, as I said earlier, we would not be able to share the product-wise EBITDA margin, but if we consider company as a whole, it will be in the range of 28% plus-minus 2%.

Ashok Shah — LFC Securities — Analyst

Products will cost. I’m talking about production cost for the manufacturing of caustic.

Maulik Patel — Chairman and Managing Director

That’s what I’m saying, we won’t be able to share the product-wise production cost.

Ashok Shah — LFC Securities — Analyst

Okay. Thank you. And chloromethane, has the prices gone up or is down due to import?

Maulik Patel — Chairman and Managing Director

So chloromethanes price has almost in Q4 has marginally dropped by say somewhere around 10%.

Ashok Shah — LFC Securities — Analyst

Okay. Thank you sir. That’s all from my side.

Operator

Thank you. Our next question comes from the line of Aditya Devrath [Phonetic] from AK Investments. Please go ahead.

Aditya Devrath — AK Investments — Analyst

Hi. I need an H2O2 prices and CMS prices realization for this quarter?

Maulik Patel — Chairman and Managing Director

Sorry, which realization?

Aditya Devrath — AK Investments — Analyst

H2O2 Hydrogen Peroxide and Chloromethanes.

Maulik Patel — Chairman and Managing Director

So again H2O2 realization would be somewhere around 27,000 kind of thing.

Aditya Devrath — AK Investments — Analyst

And chloromethane?

Maulik Patel — Chairman and Managing Director

Chloromethane would be somewhere around 40,000 — 45,000 kind of thing.

Aditya Devrath — AK Investments — Analyst

Okay. And the final question regarding the CPVC, what gives the management the confidence that currently your capacity of 30,000 tons per annum. Now, we are increasing to about 45,000 tons per annum, and in this quarter, I think it is above expectation, 90% capacity utilization for chloromethane. And what is your demand and what gives the confidence to increase that within one year?

Maulik Patel — Chairman and Managing Director

So you mean to say, why we are expanding the CPVC resin capacity?

Aditya Devrath — AK Investments — Analyst

Yes, yes. What give you confidence, yeah.

Maulik Patel — Chairman and Managing Director

Yeah, because India is a net importer. People are importing from other part of the world and the demand is growing in India. So we think this is the right products to expand in India and we have almost reached to 90%, so we feel this is very easy to absorb in the market also, that’s why we are expanding.

Aditya Devrath — AK Investments — Analyst

Any further expansion also you have in the mind or is the first phase on you will evaluate off [Indecipherable]

Maulik Patel — Chairman and Managing Director

So whenever we expand, first we try to optimize that particular plant and then we decide the next phase of growth and next phase of expansion. So currently based on the first phase, we have expanded CPVC now, the next phase of CPVC, once we reach to 90%, we will announce further, if there is — at that point of time, if there is a possibility to expand, yeah.

Aditya Devrath — AK Investments — Analyst

Okay. Thank you. That’s all from my side.

Operator

Thank you. Ladies and gentlemen, we have reached the end of the question-and-answer session. I now hand the conference over to the management for closing remarks.

Maulik Patel — Chairman and Managing Director

In conclusion, I would like to convey that MFL team is geared up for the continuous and consistent growth in the business. We are focused to enter into high-value and high-growth products, strengthen our integrated complex, generate good ROCE for the business and increasing revenue contribution from derivatives and specialty chemical business.

I would like to thank you all for joining us here today. Please feel free to reach out to our IRC if there are still any unanswered questions. Thank you everyone for your participation.

Operator

[Operator Closing Remarks]