Meghmani Organics Limited (MOL) Q4 FY22 Earnings Concall Transcript

Meghmani Organics Limited (NSE: MOL) Q4 FY22 Earnings Concall dated May. 02, 2022

Corporate Participants:

Sonam Raghuvanshi — Investor Relations

Ankit Patel — Chief Executive Officer

Gurjant Singh Chahal — Chief Financial Officer

Bharat Mody — Advisor

Analysts:

Aman Vij — Astute Investment Management — Analyst

Rahul Veera — Abakkus — Analyst

Hemant Gupta — Navigdata Analytics — Analyst

Amit Vora — Homeopathy Clinic — Analyst

Yogansh Jeswani — Mittal Analytics — Analyst

Manan Shah — Moneybee Securities — Analyst

Aman More — Alpha Equity Advisors — Analyst

Alisha — Envision Capital — Analyst

Hemant — Rajeshwar Capital — Analyst

Navneet — — Analyst

Jayesh Shroff — CAS Capital — Analyst

Naresh Wadhwani — Sameeksha Capital — Analyst

Krishna Agarwal — — Analyst 

Presentation:

Operator

Good evening, ladies and gentlemen. I’m Jacob, moderator for this conference. Welcome to the Q4 FY 2022 Earnings Conference Call of Meghmani Organics Limited, organized by Dickenson World. [Operator Instructions]

I would now like to hand the floor over to Mr. Sonam Raghuvanshi [Phonetic]. Thank you, and over to you, ma’am.

Sonam Raghuvanshi — Investor Relations

Thank you. Good evening, everyone. I welcome you all to the earnings call of Meghmani Organics Limited for Q4 financial year 2022. Today, we have with us the management represented by Mr. Ankit Patel, Chief Executive Officer; Mr. Gurjant Singh Chahal, Chief Financial Officer; and Mr. Bharat Mody, Advisor, IR Strategies.

Before we get started, I would like to remind you that the remark today might include forward-looking statements, and actual results may differ materially from those contemplated by the forward-looking statements. Any statement we make on the call today is based on our assumptions as on date, and we have no obligation to update these statements as a result of new information or future events.

I would now like to invite Mr. Ankit Patel, Chief Executive Officer; to make his opening remarks. Over to you, sir.

Ankit Patel — Chief Executive Officer

Thank you, Sonam. Thank you very much. Good afternoon, everyone, and a very warm welcome to the Q4 and FY 2022 earnings call of Meghmani Organics Limited. Before highlighting the performance of the period, I hope that you and your family members are all keeping healthy, safe and sound. I’m pleased to inform you that for Q4 and the full financial year 2022, the company has delivered outstanding numbers. Our top line revenue has surged by 53% Y-o-Y to nearly INR2,500 crore. This was helped by higher capacity utilization, along with an improvement in volumes and realization from the Pigment and Agrochemicals business.

The solid performance was a major achievement, given that the year was riddled with a challenging business environment, impacted by uncertainties, caused by global commodity inflation, raw material price fluctuations and supply chain disruptions. Our gross profit registered a sharp improvement of 43.3% year-on-year to reach INR1,040 crore, while our EBITDA margin improved by 35.5% to contribute nearly INR380 crore. Our PAT grew solidly by 66%, and it has reached INR308 crore. The rise in other income and decline in finance costs also contributed to further improving the company’s results.

On the balance sheet front, company’s debt-to-equity ratio stood at 0.34% as on 31st March 2022. The company’s annualized ROCE and ROE return ratios came in strongly at 19% and 23.6%, respectively. Our working capital cycle has also improved significantly from 113 days in last financial year to 76 days in 2022. On our various capex front, I am pleased to inform you that the on-ground execution work is on track as per planned. We expect commercial production to come on stream by Q2 FY ’23 for our Agrochemical division expansion plant project. This will additionally contribute significantly to the topline of all company going forward

During quarter 3, FY ’22, Meghmani Organic fast track its foray into the new product category of Titanium Dioxide by acquiring Kilburn Chemicals Limited. This acquisition was funded through company’s internal accrual deploying INR132 crores. We are doing capex of INR275 crores for commercializing the capacity in the first phase, including the — this includes the acquisition cost of INR132 crores. There will be INR325 crore capex for further capacity expansion in Phase II. The Phase I capacity is expected to be commercialized in the quarter three of FY ’23, while the Phase II is expected to be commissioned by Q3 FY ’24.

This plant is expected to contribute around INR700 crores to INR750 crores to the Meghmani Organic topline on a full financial year basis. The addition of the company’s Titanium Dioxide project represents an improved important diversification from our existing Phthalocyanine-based pigments. In the coming years, this capacity addition will further strengthen Meghmani Organic overall margin profile and return ratios. In summary, I am pleased to inform you that the company is performing well and is consistently producing strong numbers each year. We are confident to sustain this level of performance in the medium term, too. In fact, given our various capex plan companies should be able to double its revenue by FY ’24. In the meantime — sorry FY ’25.

Gurjant Singh Chahal — Chief Financial Officer

FY ’25, sorry. In the meantime, we are continuing to the recommended sound and sustainable dividend despite the considerable capex spent by the company in FY ’22. Our corporate governance continues to be the steadfast and efforts in protecting the environment and contributing to the society continues on EBITDA. Going forward, we are squarely focused on sustaining our contribution to shareholders well in the coming years. I am pleased to inform you that the on-ground execution work is on track as per plant. We expect commercial production to come on stream by Q2 FY ’23 for our Agrochemical shareholders well in the coming years.

With this, we would be happy to take any questions you may have. Thank you.

Questions and Answers:

Operator

Thank you very much. [Operator Instructions] The first question is from the line of Aman Vij from Astute Investment Management. Please go ahead.

Aman Vij — Astute Investment Management — Analyst

Good afternoon, sir.

Ankit Patel — Chief Executive Officer

Good afternoon, Aman bhai.

Aman Vij — Astute Investment Management — Analyst

My first question is on this guidance itself. So you are saying from what INR2,500 crores sales in FY ’22, we are now targeting, say, 5,000 core sales FY’22

Gurjant Singh Chahal — Chief Financial Officer

No. I think that was a misunderstanding. Let me correct it. So in the year of 2021, we were at about INR1,500 crores. At that time, we made an announcement that we’ll be doubling the revenue by FY ’24 to INR3,000 crores, which will be INR2,000 crores agrochemical and INR1,000 crore pigment. So, we will try to achieve it maybe more in advance, but our target remains that we should be able to achieve our target well within the time limit.

Aman Vij — Astute Investment Management — Analyst

Perfect sir. Given–

Ankit Patel — Chief Executive Officer

So, that is INR3,000 crores.

Aman Vij — Astute Investment Management — Analyst

Sure, sir. But given FY 2022 performance, shouldn’t we be revising our estimate of–

Ankit Patel — Chief Executive Officer

That’s what I said, Aman that, we should be able to achieve it well before the time limit. So, this year has been very volatile in terms of the commodity prices as well as the other prices have gone up. So, there has been support from the pricing point of view as well. But on a long-term basis, if this remains constant, then yes, we should be able to achieve it much — very well in advance.

Aman Vij — Astute Investment Management — Analyst

Sure, sir. My question is on business side. So, if you look at our agrochemical side first. So,if you can broadly talk about what is the segmentation of the three main insecticide categories to our revenue, like you had explained in, I think, last call organophosphate insecticide and neo — insecticide and pyrethroid insecticide. So, what is the contribution of these three to our agrochemical sales, if you can talk about for FY 2022? And what kind of growth are we expecting in these three segments for us as a company?

Ankit Patel — Chief Executive Officer

Sure. So, as Meghmani, we have always been a parathyroid-based company. And so parathyroid product portfolio is always a strong product portfolio. Almost two-third of our revenue comes from that segment. And that will remain more or less in the same range, I would say, we are also adding some other products into the same basket. So the that can be increased in that product. It is relatively safe insecticides compared to neonicotinoids and organophosphate insecticides. We have some amount of organophosphate revenue as well in our basket as well as we have on herbicide, which is a 2, 4-D, which is a phenoxy herbicide. So that is also contributing relatively good amount of revenue in our topline.

Aman Vij — Astute Investment Management — Analyst

So sir, organophosphate will be like, what, 10%, 20%?

Ankit Patel — Chief Executive Officer

I would say approximately 10%.

Aman Vij — Astute Investment Management — Analyst

Okay. And neonicotinoids–

Ankit Patel — Chief Executive Officer

No, neonicotinoids already is less, but 2, 4-D, which is a phenoxy herbicide would be about 20%.

Aman Vij — Astute Investment Management — Analyst

Sir, on this 2, 4-D side, so what was our utilization level for the full year as well as we — what is our capacity now, is it — if you can explain it?

Ankit Patel — Chief Executive Officer

Sure. So, our capacity is 22,000 tonnes. If you remember, we commissioned our plant in the last financial year. So — and we were expecting that after a capacity expansion, we thought that for the first year, we should be able to utilize the newer capacity by 50%, 55%, followed by the third year, we should be able to reach at about 80% plus. But I’m happy to say that in the first year itself, we have been able to utilize the plant by more than 75% capacity.

Aman Vij — Astute Investment Management — Analyst

Sure, sir. And if you can talk about the current pricing, what we have heard are some Chinese players have come back, so the pricing have come down, if you can talk about the same.

Ankit Patel — Chief Executive Officer

See, Chinese companies were already there in the market 2,4-D, it was not like that they have come back. But depending on the demand as well as the market conditions’ point of view, price kept on — keeps on wearing. It went at a very high level, which I think in the history, nobody has seen that kind of price in the last financial year. But yes, it has come to the reasonable level. It has come down.

Aman Vij — Astute Investment Management — Analyst

It’s around $3.5, $4 now?

Ankit Patel — Chief Executive Officer

You can say that about $3.50.

Aman Vij — Astute Investment Management — Analyst

Sure, sir. And on the NPP side, if you can talk a little bit, are we — will we be introducing mostly insecticides and this pyrethroid insecticides only? Or are we focusing on some other products or like herbicides and all those things also…

Ankit Patel — Chief Executive Officer

So on a lot of people ask us this question, but we would like to keep it confidential for the time being because we are coming with some new generation products, which are going to be manufactured by — being manufactured by a multinational company in India or not being manufactured. So we’ll be — we want to — we’ll be typically the second runner after them. So relatively new products, by that chemistry. So from the business perspective, we are keeping it low profile. So once the plant is commercialized, commission will be announcing the kind of the projects we are coming up with. But for the time being, I can say it is all insecticide.

Aman Vij — Astute Investment Management — Analyst

Sure, sir. Final question on Agrochem side and then one question on the xPigment side. Sir, what do you expect the base business to grow without the new products? So we have a base of, say, INR1,700 crores now. What should be the growth in this space?

Ankit Patel — Chief Executive Officer

Aman Bhai, the thing is the growth will come definitely, we are expecting very high amount of growth in coming years. So if we don’t add the new products, then the growth remains a little low. So definitely, in the existing product, there will be some amount of growth, but the major growth will be coming from the new products.

Aman Vij — Astute Investment Management — Analyst

So base business, is it correct to game like 5%, 6% kind of growth or even lower?

Ankit Patel — Chief Executive Officer

No, five, six is too low. We expect a little more than that, at least 10% to us, but just a minute. So 5%, 6% would be too low. Definitely, we’ll have small growth in the existing product, but the major growth will come from the new product segment.

Aman Vij — Astute Investment Management — Analyst

Sure, sir. Final question on the Pigment side. So on titanium dioxide, there are a number of global players who have like 5 lakh tonnes to 10 lakh tonnes kind of big capacity, four, five player each. So how will we compete with them? What is their import landed price? Are we thinking of getting some antidumping duties? What are your thought process on the same?

Ankit Patel — Chief Executive Officer

As far as the titanium dark side is concerned, the market is huge, and it does keep — that is kept — keep on expanding, mainly because of the expansion in the pain segment and India imports more than 200,000 tonnes of Titanium Dioxide approximately. So the demand is already there. The global players which are there in Europe, US and other markets. Now in current time, when the situation in terms of the logistic cost is very high, the utility cost is very high. So we are going to cater firstly to the Indian market. So we’ll have that first advantage. Second thing, definitely, there is a duty on Titanium Dioxide approximately 7.5%. So that is not an issue. And we have done the calculation even on without duty basis. And our calculation says that we should be able to compete with the global players. There’s not be much problem.

Bharat Mody — Advisor

Even if our capacity will be much, much smaller than the big giants, you think we can compete and win market share.

Ankit Patel — Chief Executive Officer

Correct.

Aman Vij — Astute Investment Management — Analyst

Yeah. You have already spoken to customers? And we have some kind of order book of this product, since it will…

Ankit Patel — Chief Executive Officer

Continue on the upside? No. Yes, our customer knows that we are coming in Titanium upside. We have acquired the company. They know very well. They are very happy with that. And they are going to add us as a one more product basket point of view. And so it’s going to help us definitely.

And as of now, because the plant has not started, so we don’t have any order book. Once we’ll be commercializing the production, we’ll have a stable production, at that time, we’ll go aggressively on the marketing. But as of now, we have started discussing with the various customers.

Aman Vij — Astute Investment Management — Analyst

On the inventory side, if you can talk about inventory and receivables have gone up a lot this year. What is the mix of inventories, finished goods versus, say, raw material? And what are thought process of, say, I’m reducing it?

Ankit Patel — Chief Executive Officer

In current time, when the prices — all the raw material prices are up, at the same time, the logistic time cycle has increased. Every company, I would say, inventory has gone up. Be it at the raw material level, at WIP level, at the same time, finish goods level. So we are also in the same segment where our — we have expanded the capacity. So our requirement for the raw material has gone up. The WIP portion has also increased because of the capacity.

At the same time, our turnover — our top line has also increased. So all because of all these factors, there has been significant increase in the working capital and mainly at the inventory level. And going forward, I think with this, now the base has already been made. So it will improve, in coming days, time. It will not going to increase further. That is what we feel.

Aman Vij — Astute Investment Management — Analyst

On receivables, sir?

Ankit Patel — Chief Executive Officer

Yeah, the same way, because the sales — at the moment sales goes up, the receivables also goes up. And typically, in Agrochemicals market, there is a credit policy. So yes, the receivable cycle has also gone up.

Aman Vij — Astute Investment Management — Analyst

Okay. Thank you for Ankit all the answer.

Bharat Mody — Advisor

Just to add what Ankit said, because due to global supply chain disruption. So there is an increase in cycle time on the both ends. So raw material side also and the finished goods also. So in our sales, whereas the CIF sale is there, so stock in target inventory also goes up. So that is also one factor which has increased inventory.

Aman Vij — Astute Investment Management — Analyst

Sure sir. Thank you for answering all the questions.

Bharat Mody — Advisor

Thank you very much sir.

Operator

Thank you. The next question is from the line of Rahul Veera from Abakkus. Please go ahead sir.

Rahul Veera — Abakkus — Analyst

Sir?

Bharat Mody — Advisor

Yes, Rahul bhai Good afternoon.

Rahul Veera — Abakkus — Analyst

Congratulations for the good set of results.

Bharat Mody — Advisor

Thank you.

Rahul Veera — Abakkus — Analyst

Just wanted to understand like, you made a comment that there was some kind of a price increase which has helped in creating that delta. So what if the price normalizes, will we continue with the INR800 crores of net or it will sharply come off, like again, it will be back to INR700 or INR750 crores of top line quarterly.

Bharat Mody — Advisor

Rahul bhai, definitely, the global situation, if we see that every company, for every raw material, we are seeing the new level. Currently, it has gone up drastically in basic chemicals, be it every other commodities. And if at all, it comes — it will come down then it will not go to the original level. Everything will have a new base now, be it a logistic cost, be it utility cost, be it the raw material. So, we don’t see that drastically, it should go down. At the same time, in the near future, we don’t see the things going back to the normal very soon. So it will be there for quite some time. At the same time, our own growth into the new products — new projects will also drive a good amount of growth. So we don’t see the things going down.

Rahul Veera — Abakkus — Analyst

Right. So this new MPP plant that you’re talking about, it’s coming in June. Is it correct or is there some delay there?

Ankit Patel — Chief Executive Officer

We hope to commission the plant by end of Q2 of FY ’23. So we hope that by September, we should be able to commercialize.

Rahul Veera — Abakkus — Analyst

Okay. Okay. So H2 FY ’23, the tightening that’s the capacity plus the MPP plan should drive growth. Is that correct?

Ankit Patel — Chief Executive Officer

Yeah. So Titanium Dioxide Kilburn plant, we hope to commission first phase by December. So we’ll have probably Q4 for the Kilburn chemicals, that is Titanium Dioxide. And for the agro-chemicals, I think we should have nearly four to five months’ time.

Rahul Veera — Abakkus — Analyst

Fair point, Sir. Sir, congratulations and best wishes. Thank you.

Ankit Patel — Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from the line of Hemant Gupta with Navvij [Phonetic] Data Analytics. Please go ahead.

Hemant Gupta — Navigdata Analytics — Analyst

Hello, Sir. Can you hear me?

Ankit Patel — Chief Executive Officer

Yes, Hemantbhai.

Hemant Gupta — Navigdata Analytics — Analyst

Sir, first of all congratulations for excellent results. And my questions are regarding backward integration. In last con call, Ankitji, you mentioned that we are trying to get backward integrated in most of the new products which we have. I think you mentioned probably apart from one or two via backward integrated. So I just want to understand where we stand on that front? And in a similar question like the new product which you are coming up in agro-chemicals, are would we be backward integrating in that?

Ankit Patel — Chief Executive Officer

Sure. So Hemantbhai, yes, for the majority of our current products, we are already backward integrated. And yes, the moment I mentioned in my last con call that we will be further backward integrated, that is the purpose that in the new project, which we are doing about INR300 crore-plus capex for in the agro chemical division. The product which we are bringing, I would say, majority of the products, we are coming with about five products. Out of five products, four products we are going to be backward integrated.

Hemant Gupta — Navigdata Analytics — Analyst

Excellent, sir. Thank you very much. And another question is just to understand, so like once we say that we are backward integrated, would that sort of bring benefits in terms of supply shocks and all? Or is it like some cost benefit also gets accrued to us.

Ankit Patel — Chief Executive Officer

To some — definitely, the cost point of view, it should help. But apart from the cost, we look at it from the sustainable business growth point of view, because we are more into exports business. Our customers always look make money as how sustainable we are, because if we are dependent on somebody else or, let’s say, China, then my customers in the overseas market, they will not like it. So, to have a strong fundamental growth and base, we have to be backward integrated that helps in the future growth plan. And definitely, to some extent, it definitely helps in the costing outlook.

Hemant Gupta — Navigdata Analytics — Analyst

Thanks, Ankitji. My last question to you, like in terms of which pesticide product in case you can tell like which is still not backward integrated from pesticide perspective?

Ankit Patel — Chief Executive Officer

I’m sorry. Can you repeat your question?

Hemant Gupta — Navigdata Analytics — Analyst

What specific pesticide products in which we still are not backward integrated? Is it like from the top four or five which you just mentioned…?

Ankit Patel — Chief Executive Officer

I would say the products where we don’t have a significant volume, or if we are targeting from the Indian perspective, Indian market perspective, then there are chances if we don’t have a bigger volume, we don’t go for the backward integration. But for the product where we have a big volume and long-term planning, we always go for the backward integration. So I would say today, more than 85% of our agrochemical revenue is a backward integrated.

Hemant Gupta — Navigdata Analytics — Analyst

Thank you, sir. Thank you so much for answering all the questions, and best wishes from us. Thank you sir.

Ankit Patel — Chief Executive Officer

Thank you very much.

Operator

Thank you. The next question is from the line of Dr. Amit Vora from the Homeopathy Clinic. Please go ahead sir.

Amit Vora — Homeopathy Clinic — Analyst

Yeah. Am I audible?

Ankit Patel — Chief Executive Officer

Yes, Amit bhai.

Amit Vora — Homeopathy Clinic — Analyst

Yeah. Ankit bhai congratulations, congratulations Chahal bhai. And my question is that on the Pigment side, the margins of FY 2021 was 18.1% and FY 2022 is 9.3%. So do you see margins improving on the Pigment side further? So still 9.3% is much — is almost 50% less than 18.1% of FY ’21? Pigment side?

Ankit Patel — Chief Executive Officer

Yeah. Thank you, Amit bhai for your question. The thing is the pigment typically in the Phthalocyanine-based segment where we are present; typically, the margin varies in the range of about 12% to 14%. Last year was one of its kind where the market conditions were very favorable, raw material prices were very low. So the margin improved from — in the range of about 12%, 13% it went up to 18%. So at that time, also, we mentioned that this 18% is never sustainable. We are getting the market benefit in the situation.

This year, yes, it has come down drastically because of heavy pressure in two areas in raw material as well as in the logistics cost. This major problem — toward even in current situation, there is some pressure, because the heavy raw material price increase. We have been trying to pass it on to the customer, and we are very confident that in the coming quarters, it should improve.

Amit Vora — Homeopathy Clinic — Analyst

Okay. Any idea to around what level it can come to 12%, 13%?

Ankit Patel — Chief Executive Officer

In the current situation is even volatile than the last year. So it is difficult to predict. But we have been very vigilant and continuously discussing with our customers and about the cost increase, about the raw material price increase, and we have been doing that quarter-on-quarter. So it may take one or two quarters more. But in the long run, it will come back to the normal level.

Amit Vora — Homeopathy Clinic — Analyst

Okay. And one more question. Sir, you have said that our revenue might double by 2025, so from INR25 crores, or INR100-odd crores in current year to — around INR5,000 crores in 2025. So just a roadmap of what products — how much from Pigment division, and how much from Agrochemical division do you see in 2025?

Ankit Patel — Chief Executive Officer

Amit bhai, I’m sorry. I clarified to — in the first question also, I’m clarifying again that in the FY 2021, we were at about INR1,500 crore. At that time, we came up — we come up with a three years vision that in the three years, we’ll be doubling the top line from INR1,500 crore to INR3,000 crore. And we started doing various projects in that line. And we are also very much committed to achieve the INR3,000 crore topline before FY ’24. Looking at this year’s number, it looks that we should be able to attribute much more in advance and that would be our target. So, once we achieve the INR3,000 crore plus topline, after that we’ll be again announcing or three more years vision where we’ll be reaching both in agrochemicals as well as in pigment.

Amit Vora — Homeopathy Clinic — Analyst

Okay. So I — did I miss here that the revenue will double by 2025?

Ankit Patel — Chief Executive Officer

No. That was miscommunicated by me. So I’m correcting it.

Amit Vora — Homeopathy Clinic — Analyst

Okay. And any risk and any foreseeable risk in both the agrochemical and pigment section? Do you see?

Ankit Patel — Chief Executive Officer

There has been some pressure in terms of raw material price increase, volatility because of the global situation. And it has been very challenging coming days. The current times are very challenging. But we like it and it gives us — the challenging time helps to improve your performance. So, we keep on working on that and improvise our performance. So, let’s see how we grow falter.

Amit Vora — Homeopathy Clinic — Analyst

Thank you so much, sir. All the best.

Ankit Patel — Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from the line of Yogansh Jeswani from Mittal Analytics. Please go ahead, sir.

Yogansh Jeswani — Mittal Analytics — Analyst

Thanks for the opportunity and congratulations on great quarter. Sir, two questions on the titanium dioxide pigment business that you are purposing to start. So, I think the Kilburn capacity, as you shared for a very long term, are we facing any issues in streamlining the production? Or what is the kind of response that you are getting in setting of this plant any progress that you can share?

Ankit Patel — Chief Executive Officer

Yes. So definitely, we acquired this asset, Kilburn Chemical, it was not running. So once the chemical plant is not under operation, if you want to restart, there are some challenges. At the same time, we need to take all the government approvals again because we acquired it from the NCLT. So, we are taking all the approvals again. Certain approvals were already available. But we are already doing — along with the first phase, we are doing capex for the second phase also. So whatever remaining approvals are also there, we are taking all those approvals. And as per — we want to have the plant as per the Meghmani standard, the current plant was not as per our standard. So, it will take some time to upgrade it and bring it to the operation.

Yogansh Jeswani — Mittal Analytics — Analyst

Okay. So sir, once you start the production from there what is the kind of utilization that you are expecting post commercialization?

Ankit Patel — Chief Executive Officer

There is some disturbance. Can you repeat your question?

Yogansh Jeswani — Mittal Analytics — Analyst

I think in the time of starting the commercial production, what is the kind of utilization you’re expecting in the Q3 or Q4 when we start?

Ankit Patel — Chief Executive Officer

Yes. So when we start in the Q4, Q3, we plan to commission the plant. So initially, the utilization is going to be challenging. But for the first year, we expect that we should be able to utilize between 55% to 60%. And later on, we have a target to go above 80%.

Yogansh Jeswani — Mittal Analytics — Analyst

Okay. Understood. And sir, there was also an announcement by Adani Group trying to set up a under titanium dioxide plant. So any thought process from you — how you look at this competition? Do you see there’s enough space in the Indian market for another player to come in, especially when we are doubling our capacity? And there’s enough capacity globally, which is also taken to the Indian market? How do you look at this new competition that’s coming, given the fact that Adani is very, very aggressive whenever they are or any there–

Ankit Patel — Chief Executive Officer

Yes. We also got this news that Adani is planning to enter into Titanium Dioxide. And definitely, we are nowhere near to Adani. They are very large conglomerate. And the kind of the capex and the product they will be coming up with, we don’t know as of now. But what — the information what we have currently that they are coming with the petrochemical complex where they will be putting up a PVC, caustic chlorine, everything in Mundra.

And sometimes what happens to they want to have an integrated campus. So to utilize the chlorine or some other commodity, they might be putting up Titanium Dioxide plant. But when they are planning to put up a plant from the zero level, so I think it will take at least three years to four years time for them to enter.

Yogansh Jeswani — Mittal Analytics — Analyst

Okay. That’s very helpful. So — and there is no other asset like Kilburn available in the market? Or is there still any other activities like–

Ankit Patel — Chief Executive Officer

See though — there are two, three other plants which are in south of India, Kerala Minerals and Tuticorin…

Yogansh Jeswani — Mittal Analytics — Analyst

But those are the operational ones, right? I mean, the way Kilburn was on the block.

Ankit Patel — Chief Executive Officer

I’m sorry. Can you repeat your question?

Yogansh Jeswani — Mittal Analytics — Analyst

I think the two plants that you mentioned are fairly operational, right? I mean something like Kilburn were..

Ankit Patel — Chief Executive Officer

Operational.

Yogansh Jeswani — Mittal Analytics — Analyst

Yes. And something like Kilburn which is available on the block for sale. Is there any other asset also in India now?

Ankit Patel — Chief Executive Officer

In the oxide, you mean to say?

Yogansh Jeswani — Mittal Analytics — Analyst

Yes. Yes.

Ankit Patel — Chief Executive Officer

No, no. As of now, apart from this, there is no other asset available for Titanium Dioxide.

Yogansh Jeswani — Mittal Analytics — Analyst

Okay. So just the two other companies which you mentioned, right?

Ankit Patel — Chief Executive Officer

Yes. At the same time, the Adani, which you have mentioned, they are coming into not exactly Titanium Dioxide, but it is — they are coming into titanium slack. So my assumption is they may go for a Titanium metal in the long-term from Titanium slack.

Yogansh Jeswani — Mittal Analytics — Analyst

Okay. But then again, that is three, four years down the line. So you still have time to figure out…

Ankit Patel — Chief Executive Officer

Yes, yes, definitely…

Yogansh Jeswani — Mittal Analytics — Analyst

And sir, overall, you did mention about the Pigment business having — facing some challenges. So going forward, how do you look at the industry standing? Do you still see this pressure and pain to continue for, say, next year or so? Or do you see demand coming back? And where exactly are you seeing this pressure coming from? Is it lack of demand? Or is it there some new capacities that coming which are pushing in the margins?

Ankit Patel — Chief Executive Officer

The major pressure is because of the input cost, which is the raw material like urea, gallium nitrate, copper sulfate and everything. And this commodity, prices of this raw material have increased drastically, and it is not coming down in the near-term. So that is one of the major factors.

At the same time, when we try to increase the price of the pigment beyond certain limits very significantly, then the demand gets impacted because the customer cannot absorb that kind of price increase. So this is the transition phase. Slowly, gradually, the industry is trying to pass on the price increase to the customer. And so, it will take some time, maybe one or two quarters. But in a long run, we are very confident that it will be — it will go back to the normal margin like earlier days.

Yogansh Jeswani — Mittal Analytics — Analyst

All right, sir. That’s really helpful. Sir, I’ll get back in the queue. Thank you.

Ankit Patel — Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from the line of Manan Shah from Moneybee Securities. Please, go ahead.

Manan Shah — Moneybee Securities — Analyst

Yes. Hi. Congratulations on good set of numbers. Most of my questions have been answered. I just had one question. There was a news in some Gujarati newspaper regarding some penalty on our company for disposal of toxic waste or something. If you can — this was somewhere in February, I believe, if I can recollect. So can you recollect — okay, sorry, can you update us what was this regarding? And have we provided for this penalty and any further action that has been taken against our company?

Ankit Patel — Chief Executive Officer

Yes. Sure, Manan. It was not just against one company, it was for the whole industrial area for various companies.

Manan Shah — Moneybee Securities — Analyst

Right.

Ankit Patel — Chief Executive Officer

And the industry, all put together as an association, they have gone to the Ministry as well as to the Pollution Control Board. This was regarding what happens typically, if I give you a little bit more in-detail idea. During the monsoon time, industries are not allowed to dispose of the solid waste, because of the monsoon. The solid waste disposal site remains close for four months. So nobody is allowed to dispose it off. So you have to store it in your factory properly.

Manan Shah — Moneybee Securities — Analyst

Okay.

Ankit Patel — Chief Executive Officer

Last year, what happened, the rain got elongated a little bit during the end season. So the solid waste site remained close for — instead of four months, they were closed for almost six months. So the accumulation at all the factories, even apart from Meghmani also, the accumulation took place in every company’s plant. And everyone was talking that, please restart this site, so that we can dispose it off properly.

And during the same time, they visited and they saw that there is a lot of solid waste accumulation. And without any reasoning, they just started penalizing everyone. And there has been strong representation made by the industry to the industry — to the ministry as well as to the government department, and they have considered it.

So, so far, nobody has paid even a single rupee and it is not going to happen in near future. If, at all, we need to fight in the court and we’ll fight. But as a legal point of view, every company is in the safe mode, nothing to worry.

Manan Shah — Moneybee Securities — Analyst

Okay. Got it. Thanks for that clarification. And, secondly, on the [Indecipherable], you were earlier planning to commission this plant by end of Q2. Now it seems there’s a delay of another three months. So any specific reason for this?

Ankit Patel — Chief Executive Officer

No, we announced Q3 only, from the first only — from the first phase only, we said that we’ll be commercializing the plant into Q3 of FY 2023.

Manan Shah — Moneybee Securities — Analyst

Okay. Okay, okay. Okay. Thank you. I’ll get back in the queue.

Ankit Patel — Chief Executive Officer

Thank you, very much.

Operator

Thank you. The next question is from the line of Aman More [Phonetic] from Alpha Equity Advisors [Phonetic]. Please, go ahead.

Aman More — Alpha Equity Advisors — Analyst

Yes. Thanks a lot for the opportunity and Ankit bhai congratulations for a very good set of numbers.

Ankit Patel — Chief Executive Officer

Thank you.

Aman More — Alpha Equity Advisors — Analyst

A couple of questions. Number one is, is it like in the whole year, as a whole, you would be having like 50% kind of volume growth in the agrochemical and round about 20% kind of volume growth in the pigment business. Is this a right number?

Ankit Patel — Chief Executive Officer

Yes, that’s correct. It is the right number. So when we compare it with the previous year, there are two factors. What has happened in the previous year because of the COVID beginning, it was a proper COVID year. At that time, the plant utilization was less, which has gone back to the earlier level. At the same time, we also expanded the capacities. So that also adds in the volume growth.

Aman More — Alpha Equity Advisors — Analyst

Great. Second thing is like then, I believe in the agrochemical like the 50% volume growth, bulk of the volume growth would also come from your new food 2 4-D expansion, correct?

Ankit Patel — Chief Executive Officer

Yes.

Aman More — Alpha Equity Advisors — Analyst

Okay. Now sir, as you indicated that 4-D expansion and utilization was basically very fast than your expected time line. Now the next capex, which you are talking about into the MPP, this would be around something around 1,600 to 1,700 metric tonne kind of capacity again?

Ankit Patel — Chief Executive Officer

I’m sorry, the capacity for the new plant you are talking about?

Aman More — Alpha Equity Advisors — Analyst

Yes, yes, MPP plant?

Ankit Patel — Chief Executive Officer

The MPP plant capacity so far, we have not announced in the market. So we would like to announce it when we are commercializing the plant, along with the product needs.

Aman More — Alpha Equity Advisors — Analyst

Okay. Okay. So what I was trying to understand, like 2 4-D, despite being a me-too product, you have been able to utilize the plant at a very early time line. Secondly, now this — the new capex, which you are doing is more of a unique kind of a capex. So should we expect that by 24, you should be able to utilize like 70% to 75% of your plant?

Ankit Patel — Chief Executive Officer

On the else — defer over here, because in 2 4-D, we were there in the market since last 10 years. We already had some capacity. We had — agrochemical is a registration-oriented business. So you need to have a registration of the product in various markets, more the registration, more the customer base, more the product you can sell. So because of our 10 years of experience of 2 4-D, we were having a reasonable amount of the registration in various markets. So the moment we expanded the capacity, we were sure that we should be able to cater to all our customers with the new registration mix. And that is what has happened in the case of 2 4-D.

Now with the new product line, which were coming up in the multipurpose plant, over there, these products are completely new for us as well as these are relatively high-value products. So normally, what happens this company — other companies, what they do once they put up the plant, then they generate the data, then they do the registration. So even after putting up the plant, utilization doesn’t happen at a very fast level.

In the case of Meghmani, we started doing it parallelly. — while putting up the plant, we parellely generated the data. We already submitted in various markets to obtain the registration. And we are confident that we should be able to utilize the plant at the fair capacity in the coming days time. But it will not ramp up as fast as 2 4-D capacity. It will take some time for sure. So these are new products.

Aman More — Alpha Equity Advisors — Analyst

Okay. So normal tenure, you’re saying is three years, right?

Ankit Patel — Chief Executive Officer

Correct.

Aman More — Alpha Equity Advisors — Analyst

Okay. So first year, as you said that 50%, 55% second year would be around 65% to 70% and then reaching to the 80%, 85% capacity.

Ankit Patel — Chief Executive Officer

Correct, right? Correct — correct…

Aman More — Alpha Equity Advisors — Analyst

Okay. And sir, secondly, like in terms of your margin, I believe, in this quarter, you had also seen a good amount of price increase, both in your agro and pigment business on a year-over-year basis. So this kind of margin is now likely to sustain going forward? I’m saying exit margin, Q4 exit margin of agrochemical, at least agrochemical and obviously, you will see some improvement in the pigment business again. So this kind of margin at 18% kind of a level at a consolidated number is sustainable now?

Ankit Patel — Chief Executive Officer

So if we just go by quarter-to-quarter, then it would be difficult because what has happened that the Russia-Ukraine situation at the same time, the China again, COVID wave situation, all this came in the end of the Q4 quarter. I would say, March was the big for the more kind of situation where the commodity prices have started going up, wheat, crude, coal, natural gas, everything. So the impact of this, all the raw material and everything has started coming up in the Q1.

Aman More — Alpha Equity Advisors — Analyst

Okay.

Ankit Patel — Chief Executive Officer

So it is going to be difficult to have — or to maintain that kind of margin in the Q1. But yes, as a year as a whole, we will try to regain because we are very hopeful that this kind of situation may not last long. So on an average, it should be better. But if you look at definitely immediately Q1 why it should be the same, and there may be difficult for the Q1.

Aman More — Alpha Equity Advisors — Analyst

Okay. Perfect. Perfect. And lastly, sir, in terms of other income, I believe your other income in this whole year had come up at around a very kind of INR96 crores, INR97 crores. And out of that, what kind of the normal run rate we should assume for 2023?

Ankit Patel — Chief Executive Officer

Out of this INR96 crores, there were some one-time entries were there. I would say, about INR25 crores to INR26 crores, where the one-time entries were there. Apart from that, there was a big gain because of the ForEx gain because of our export exposure. And our export is always going to be there. If dollar keeps on appreciating, then there will be margins and there will be other income for sure, because of that. So you can consider out of INR96 crores, at least INR26 crores, where one kind — one of its kind situation, which is not permanent. Otherwise, INR70 crores was more or less because of — mainly because of the export and other factors.

Aman More — Alpha Equity Advisors — Analyst

Okay. Okay. And out of that, like you said INR26 crores is one-off. And out of that remaining, how much would be the ForEx gain?

Ankit Patel — Chief Executive Officer

INR45 crores was the ForEx gains.

Aman More — Alpha Equity Advisors — Analyst

Okay. INR45 crores was a ForEx gain. But you’re saying, if the borrower has to —

Ankit Patel — Chief Executive Officer

INR54 were dividend actually this is all RPS.

Aman More — Alpha Equity Advisors — Analyst

Okay. That you are saying is the dollar appreciate that will come? I mean, this is a rupee, dollar gain, right?

Ankit Patel — Chief Executive Officer

Yes, you can say that.

Aman More — Alpha Equity Advisors — Analyst

Okay. Okay. Thanks a lot sir. I have a few more, but I’ll come back in queue.

Ankit Patel — Chief Executive Officer

Okay. Thank you.

Operator

Thank you. The next question is from the line of Alisha [Phonetic] from Envision Capital. Please go ahead.

Alisha — Envision Capital — Analyst

Hi, sir. Good evening, and thank you for taking my question, Sir, firstly, I just wanted to confirm in the pigment space, in the pigment segment, we’re at about 90% capacity utilization. Is this the peak? Or is there a scope for us to grow in 2023 also for volume growth?

Ankit Patel — Chief Executive Officer

For the pigment green and pigment blue, we are already at good capacity utilization. So there is not much scope. So that is why for the pigment division growth point of view, the major growth will come from the Titanium Dioxide Segment.

Alisha — Envision Capital — Analyst

Which will come on stream from H2 of ’23?

Ankit Patel — Chief Executive Officer

Correct.

Alisha — Envision Capital — Analyst

So — and in the agrochemicals business, that 80%, that is obviously scope for us to continue volume growth till the MPP plant comes.

Ankit Patel — Chief Executive Officer

Yes, definitely. And at the same time, we also keep on doing small, small debottleneck changes in the agrochemical plant. So that helps in the increase in the production. At the same time, the major growth will come from the new plant for sure.

Alisha — Envision Capital — Analyst

Sure. What is it that we’re doing for the MPP plant?

Ankit Patel — Chief Executive Officer

Approximately INR310 crores.

Alisha — Envision Capital — Analyst

Which will also come towards the end of this year. And what is the kind of asset turn we’re expecting on this plant?

Ankit Patel — Chief Executive Officer

On the full year of operation basis, we should be able to generate revenue of close to IN600 crores plus…

Gurjant Singh Chahal — Chief Financial Officer

So turnover will be two.

Alisha — Envision Capital — Analyst

Understood. Understood. Sure. And just a clarification, the volume growth in the agrochemicals segment was mentioned as 30% or 50%?

Gurjant Singh Chahal — Chief Financial Officer

It was 50%.

Alisha — Envision Capital — Analyst

50%. Okay, great. Thank you so much…

Operator

Thank you. The next question is from the line of Hemant Gupta from Navigdata Analytics. Please go ahead.

Hemant Gupta — Navigdata Analytics — Analyst

Thank you. Thanks for giving me another opportunity. So I just want to understand a little bit around biopesticides in the countries in which we export, do you see biopesticide as a sort of a challenge to us from the industry perspective? Or do we see ourselves going into that direction anytime soon?

Ankit Patel — Chief Executive Officer

Hemant Bhai, biopesticide, I would say the market compared to the conventional pesticide, synthetic pesticide is a very small. It is a good thing like if we compare in pharma like what we have homeopathy versus what we call allopathic. So similarly, the market will always remain big for the segment, our side of the product. But yes, the biopesticide market will also grow.

As of now, currently, I would say there are not very — there are many players in the market, but not all of them are regulated player. There are a lot of irregularities into biopesticide by adding conventional product, they sell in the name of biopesticide, so it unnecessarily spoils the name of the agrochemical industry.

So the moment the government makes it regularized. At that time, it will be more better. And that is what government is working on. As of now, we are not thinking in a big way into biopesticide, we are not at all there. But maybe in the future, if the things are good, we can think of entering into it. But as of now, no.

Hemant Gupta — Navigdata Analytics — Analyst

Thanks, Ankit. Just one more small question, in terms of — there’s a lot of talk about some pesticide ban, etc, across the world. Do you see getting up getting affected in the near future in one or two years’ time line by any of the sort of proposed brand around pesticides?

Ankit Patel — Chief Executive Officer

Yes. So definitely, a lot of products are getting banned globally in different markets of being in India also. As a Meghmani, there is — these products are getting banned based on the toxicity, so there are toxicity triangles. So the red triangle products are the most, most toxic product. As a Meghmani, we are not manufacturing a single Red Triangle product. We don’t sell a single kg of Red Triangle product, basket. So, we were having a few products, but in the year of 2018, 2019, we discontinued all of them. So as of now, we don’t have any revenue coming from the Red Triangle product. So that is the biggest advantage.

Second thing, the pyrethroid range of product, what we are manufacturing are relatively safe insecticides where we have a sizable business. And we don’t see any problem coming in the — our current product basket. So there is not any issue.

Hemant Gupta — Navigdata Analytics — Analyst

Perfect. Thank you, sir. Thank you very much for answer.

Ankit Patel — Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from the line of Hemant [Phonetic] from Rajeshwar Capital. Please go ahead.

Hemant — Rajeshwar Capital — Analyst

Yes, thanks for the opportunity. Akintji in the last conference call, you had mentioned that you’re looking forward to announce one more round of capex for your Agrochem division. So, any update on that, sir?

Ankit Patel — Chief Executive Officer

Definitely, Hemantji, we are already working on it. The details — detailing is going on. So, our plan is, the moment we commercialized the first phase of a multipurpose plant. at the same time, we would like to start with the second phase of expansion. So, the detailing is going on. We hope to have the Board approval in the coming days’ time. So, I hope that probably in the first quarter con-call maybe after that, we should be able to announce that.

Hemant — Rajeshwar Capital — Analyst

Okay, sir. And sir, the INR16 crore dividend, which was about to be received from Meghmani Finechem. So is it accounted in the other income this quarter? Or is it yet to be received or accounted for the next quarter?

Ankit Patel — Chief Executive Officer

See, we have done the provision. So, it is as a part of other income. So, we are yet to receive it.

Hemant — Rajeshwar Capital — Analyst

Okay. Got it. Thanks. That’s it for me.

Operator

Thank you. The next question is from the line of Navneet [Phonetic] an Individual Investor. Please go ahead.

Navneet — — Analyst

Hi. Sir, you’ve added about INR350 crores of gross block in FY 2022. I believe of that INR130-odd crores is to all the Kilburn Chemicals plants that you have taken over. Can you give details of the remaining? Is it pertaining to the new chemical Aggrecan complex that you’re building, which is expected to come in Q2?

Ankit Patel — Chief Executive Officer

Correct, that’s correct, Navneetji.

Navneet — — Analyst

So what is the remaining capex lined up for FY 2023 as in what is the total amount you’re expected to spend of the announced projects?

Ankit Patel — Chief Executive Officer

So, even in this FY 2023 also, we’ll be doing the capex — the remaining capex, which is left for the agrochemical complex that will be completing in this financial year. Apart from that, some small, small routine capex we’ll be doing in our existing plants where we will be upgrading the facility where we’ll be putting up some facilities to improve the safety, environment norms and everything. The ongoing projects will be there worth about INR65 crores. So, approximately INR300 crores worth of capex will be there in the Meghmani Organic Limited. Apart from that, we’ll be doing the capex into Kilbane Chemical also.

Navneet — — Analyst

Okay. So a total consolidated capex of what, about INR400 crores, INR500 crores for the year?

Ankit Patel — Chief Executive Officer

Approximately INR450 crores.

Navneet — — Analyst

Okay. And your EBITDA for this year was about INR370-odd crores. So, we are looking to maintain our debt levels if we can maintain our EBITDA? Or do you see it decreasing or increasing over the year?

Ankit Patel — Chief Executive Officer

Yes, definitely, our aspiration would be to increase the EBITDA. And the way we’ll be growing in top line, the EBITDA will also improve. And on an average EBITDA margin will be in model at the same range.

Navneet — — Analyst

I was talking about the debt level, sir. So we are at about seeing…

Ankit Patel — Chief Executive Officer

Debt, definitely for the Kilburn projects, we’ll be taking some debt and also for the existing. But as we have mentioned that we’ll be maintaining the debt to equity in the range of nearly 0.5. We will try to maintain it more or less in that range.

Navneet — — Analyst

When can we expect you to come out with your new guidance because the INR3,000 crores is not very far from where we are already? I totally appreciate your points on the price fluctuation and everything. But do you expect to come out with a fresh guidance in the next couple of quarters or something like that?

Ankit Patel — Chief Executive Officer

Definitely, we would like to announce it by the next year for sure. Maybe we should be doing it in this year onwards, whenever we get a chance. Maybe in next two or three quarters, we should be able to announce it.

Navneet — — Analyst

Okay. Fair enough. All the best. Thank you so much.

Ankit Patel — Chief Executive Officer

Thank you.

Gurjant Singh Chahal — Chief Financial Officer

Thank you.

Operator

Thank you. The next question is from the line of Aman Vij from Astute Investment Management. Please go ahead.

Aman Vij — Astute Investment Management — Analyst

Yes. Thank you for the opportunity again. So my question is on this — we have talked about we are targeting to get this Responsible Care in FY ’23. So any firm targets in terms of which quarter are we targeting this?

Ankit Patel — Chief Executive Officer

Yes. The work is going on already, Aman Vij. And we hope that normally, they come for the inspection, that didn’t come for the inspection. We hope that they will be visiting probably in the third quarter of this financial year. And if they’ll find everything okay, then we should have it by end of this financial year.

Aman Vij — Astute Investment Management — Analyst

And if we get this, sir, what kind of additional benefits do you think we can get? Are there any geographies which only — or companies which only accept Responsible Care products. So if you can talk a little bit about the same?

Ankit Patel — Chief Executive Officer

Definitely, it is a very prestigious certificate. And the moment you have it, it shows the responsibility of the company towards environment, health, safety for their employees, for the society, everyone. The globally, the big companies and your customer base take it very positively. At the same time, the SEBI has come up with the ESG guidelines that first 1,000 companies listed in India has to do ESG compliance, and they have to do the ESG reporting. So this Responsible Care is one of its part for the ESG. So we were not knowing that SEBI is coming with such kind of guidelines, but this RC approval will help in a big way for the ESG certification also.

Aman Vij — Astute Investment Management — Analyst

And sir, any plans of doing sales at ZLD in the new facilities or even in older for that to prevent — there were a lot of issues of chemical companies in the last couple of months.

Ankit Patel — Chief Executive Officer

Can you repeat your question?

Aman Vij — Astute Investment Management — Analyst

I was talking about ZLD and there were a lot of issues in, say, other chemical companies in this agrochem space in the last couple of quarters. So what are we doing to avoid such kind of issue with our company?

Ankit Patel — Chief Executive Officer

See, frankly speaking, scientifically, we — people talk, very good things about Zero Liquid Discharge, ZLD. But we have been discussing with the pollution control board with the Ministry of Environment and Forest and that has been scientifically prove that if you want to make a zero liquid discharge, tactically, it is — there is nothing called zero liquid discharge. And if at all, you do a zero liquid discharge, then the cost is very high. And apart from the cost, you’re converting on pollution into other positions. What is zero liquid discharge, it’s basically, let’s say, the water affluent, you vaporize it, you burn it, right? So to do that, you need to have a steam or you need to have a power. So that will be — again, you will be generating from the coal, so you’ll be converting one pollution into other pollution.

At the same time, while burning the water, you will have some residue at the end, that will be the solid waste. You need to again dispose it off. So it is basically converting one affluent into another affluent. You cannot make it zero. It is not possible. If you burn it, then there will be an air pollution. So that has been scientifically been — as Meghmani, we have already been doing it. Whatever best possible, we do it. We call it water conservation policy. You cannot make it zero, but you need to keep on improving it by reducing the water consumption, by recycling it. And that is what every year we submitted to the different departments.

Aman Vij — Astute Investment Management — Analyst

Sure, sir. On the contract manufacturing side, if you can talk about what was the contribution in FY 2022? And are we targeting to make this segment big?

Ankit Patel — Chief Executive Officer

As a Meghmani, we are not a pure contract manufacturing company. Reasons is, we are already there on our own into various markets. So in a way, we are already competing with certain companies. So they don’t come to us for the contract manufacturing. But yes, with the kind of the assets we are coming up with and a lot of companies are looking at the China Plus One strategy. They want to have the good assets available in the Indian market. So there can be good opportunities in the coming days with our new capex, which we are coming up with.

Aman Vij — Astute Investment Management — Analyst

Sure. So can it become like 10%, 20% of our agrochem revenue? Are we targeting something of that sort?

Ankit Patel — Chief Executive Officer

I cannot comment more in that segment. We do one certain contract manufacturing, but I cannot disclose much information about it. But if there is such a contract — if we come up with any other business where we don’t have confidentiality with our customers, then we can disclose it.

Aman Vij — Astute Investment Management — Analyst

Okay. Final question from my side. So in the agrochemical sales number of, say, INR700-odd crores, so if you remove the 2, 4-D portion, what was the volume growth and value growth in rest of the business, agrochemical?

Ankit Patel — Chief Executive Officer

I wouldn’t — I need to calculate that because I have not calculated it separately apart from 2, 4-D. So…

Aman Vij — Astute Investment Management — Analyst

You can talk about Pyrethroid Group [phonetic] whole, how much was the volume growth for the group?

Ankit Patel — Chief Executive Officer

Volume growth for the agrochemical, right? So it was about 50%. No. Agrochem numbers are there. I’m talking about this specific group, if Pyrethroid Group, we. Yeah. So that’s what I’m saying I have the complete group number. So I have to calculate it separately apart from the 2, 4-D million what is the actual growth about 15%, about 10% to 15%.

Aman Vij — Astute Investment Management — Analyst

So it will be similar, broadly, right?

Bharat Mody — Advisor

Correct.

Ankit Patel — Chief Executive Officer

Correct.

Aman Vij — Astute Investment Management — Analyst

Okay, sir. Thank you.

Ankit Patel — Chief Executive Officer

Thank you.Thank you.

Operator

Thank you. The next question is from the line of Jayesh Shroff from CAS Capital [Phonetic]. Please go ahead.

Jayesh Shroff — CAS Capital — Analyst

Yeah. Hi. Thank you for taking my question. My question was pertaining to our investment in passenger shares of Meghmani Finechem. So this is a real long-term investment. I believe it’s spread over like more than 15 years. So any — and we have an aggressive plan of growth, capex, everything. So any thought process that we have in terms of monetizing this large investment that we have?

Ankit Patel — Chief Executive Officer

Jayesh bhai, thank you I think when we did that, it was for a very long-term perspective. At the same time, both the companies Meghmani Finechem is also having the good amount of capex cycle. So it will not happen immediately in near future. But I think internally, we’ll discuss. And once we now have some plan, we’ll be announcing for the interest of the investors.

Jayesh Shroff — CAS Capital — Analyst

Okay, okay. Thank you.

Operator

Thank you. The next question is from the line of Aman Mori [Phonetic] from Alpha Equity Advisors. Please go ahead.

Aman More — Alpha Equity Advisors — Analyst

Yeah. Thanks a lot for the opportunity again. So couple of things, are now when you say that the margin in this quarter was basically like not likely to sustain. But ideally, like this commodity inflation is there from last three, four quarters, but still you have been able to maintain a good healthy margin level at least in the agrochemical side. So I’m just trying to understand the historical trend is likely to sustain, right?

Ankit Patel — Chief Executive Officer

Yes, Aman, we would like to maintain it. But I’m just giving the scenario what is happening in the market. We have seen a couple of other companies’ results also where the margins have under been pressure. So we will always try to have a better margin. That would be our aspiration. And we’ll work towards that. But it is always to be — we need to be a little cautious. So just giving some idea.

Aman More — Alpha Equity Advisors — Analyst

Okay. Okay. Okay. So are you saying the pressure is more because see — before there is not much broad pressure, right? So are you saying the pressure is more from the synthetic [Indecipherable] price?

Ankit Patel — Chief Executive Officer

I’m not saying this product wise, but in general. If we talk in general situation where the basic commodity prices have gone up drastically, the solvent prices have gone up drastically. And situations are not improving in near future. You know, Initially, when the Russia-Ukraine war kind of situation was there. So there was a prediction that the situation will become normal very soon. But more than two months have been passed and nothing has been improving. So looking at the situation, the cost overall is keeping up. At the same time, we also try to pass it on to our customer base.

Aman More — Alpha Equity Advisors — Analyst

Correct. Correct.

Ankit Patel — Chief Executive Officer

So that is an ongoing exercise. So there may be some gap — there may be. So that’s what I said that on the long run, it will be better as an average. But there may be a gap for about one or two quarters. That’s it.

Aman More — Alpha Equity Advisors — Analyst

Okay. Okay. But as a — year as a whole, like you closed the year at a 15.1% kind of EBITDA margin. Year as a whole, we will be like up, right, on the year-over-year basis?

Ankit Patel — Chief Executive Officer

Definitely, that would be our aspiration, definitely.

Aman More — Alpha Equity Advisors — Analyst

Okay, okay. Got that. Thank you.

Ankit Patel — Chief Executive Officer

Thanks.

Operator

Thank you. The next question is from the line of Naresh Wadhwani from Sameeksha Capital. Please go ahead.

Naresh Wadhwani — Sameeksha Capital — Analyst

Yeah, sir. Congrats for good set of numbers. Sir, my question is in agro-chemicals your capacity has increased by around 18,000 tonnes in FY ’22. Out of that 10,000 would be relating to 240 capacity? Can you tell me the remaining capacity, which project has added that?

And second question is on the margins per kg or per tonne margin of agro-chemicals segment. So despite the cost are going up, this year you have improved per tonne EBITDA, so what is driving that? Is it a product mix change? Or can you explain what has driven there?

Gurjant Singh Chahal — Chief Financial Officer

Yes, Nareshbhai, thank you very much. The first question you asked about the 240 and the other product capacity. The other product capacity, where there has been increase in the parasite segment? And the second question, you asked about the margin per kg. So we don’t calculate margin per kg as a basket of a grow capital. But from product-to-product, it can vary. In this financial year, the margin was better in certain products, like 240, the margins were better. Some other products also, the margins were better. We changed some product mix.

So, we always keep on doing that. And we analyze the market well in advance, wherever there is an opportunity, we take the advantage of it, be it the raw material kind of situation, be it a market kind of situation. And that’s what in the volatile time, if you sit idle, then you will have a tough time. But if you be vigilant and keep the market track, then you can always take advantage of it. And that’s what we keep on doing.

Naresh Wadhwani — Sameeksha Capital — Analyst

Sure, sir. And there was a formulation capacity, which also came this year. So what capacity — what was the volume of that capacity?

Gurjant Singh Chahal — Chief Financial Officer

Again, the formulation capacity expansion, we have done it from the long-term perspective where we have a vision to expand our formulation business in a long run basis. And we have added a good amount of capacity. So the utilization might be low in this financial year. But by doing small capex, you can keep on doing the expand…

Naresh Wadhwani — Sameeksha Capital — Analyst

So I was asking the capacity and what was the capacity which got added?

Gurjant Singh Chahal — Chief Financial Officer

About 13,500 tonnes.

Naresh Wadhwani — Sameeksha Capital — Analyst

Okay. Okay. Thank you.

Operator

Thank you. The next question is from the line of Krishna Agarwal from [Indecipherable]. Please go ahead.

Krishna Agarwal — — Analyst

Firstly, on a great set of numbers. My question is that you mentioned about the group organoid contribute about 10% of revenue. And in that group, the pesticide name [Indecipherable] is being banned in many countries and it’s in the banning list in India as well. And I read it somewhere in the annual report only that it contributed around 15%, 20% back in 2020. And also the group contributes around 10%. So do you see any threat from this seeing that ban in most of the countries and — further they don’t do?

Ankit Patel — Chief Executive Officer

Yeah. So Krishna ji, we have not just chlorpyrifos in our basket. Chlorpyrifos is a very small basket. We have Profenofos, chlorpyrifos and some other small organophosphate products in our basket. And chlorpyrifos, you rightly mentioned that it is having pressure in certain markets. But still, it is widely, widely used product in India, in many more other markets like US, Brazil, Argentina, various used in market. So it is not going to be banned very soon.

And — but at the same time, as Meghmani, we are not expanding further into organophosphate segment. It is being 10% as of now. And the moment we’ll be adding other products this percentage as a pie will go down slowly gradually. We are not going to expand into organophosphate in a big way.

Krishna Agarwal — — Analyst

Okay, okay. So basically, parathyroid range will become even bigger than, because the new capacity, new products are going to be from the parathyroid range only.

Ankit Patel — Chief Executive Officer

Parathyroid range as well as some other new range of products also.

Krishna Agarwal — — Analyst

Okay, okay. Thank you.

Operator

Thank you. The next question is from the line of Dr. Amit Vora from the Homeopathy Clinic. Please go ahead.

Amit Vora — Homeopathy Clinic — Analyst

Yeah, my question is answered. Thank you so much for the second chance. Hello?

Ankit Patel — Chief Executive Officer

Thank you.

Amit Vora — Homeopathy Clinic — Analyst

Yeah. My question is answered.

Ankit Patel — Chief Executive Officer

Okay. Thank you.

Operator

As there are no further questions, I now hand the conference over to Mr. Ankit Patel, CEO, to make his closing comments.

Ankit Patel — Chief Executive Officer

Thank you, everyone, for your valuable time and joining us for this con call. Thank you very much. Take care.

Operator

[Operator Closing Remarks]