Mold-Tek Packaging Limited (MOLDTKPAC) Q4 FY23 Earnings Concall Transcript

Mold-Tek Packaging Limited (NSE:MOLDTKPAC) Q4 FY23 Earnings Concall dated May. 03, 2023.

Corporate Participants:

Janumahanti Lakshmana Rao — Chairman and Managing Director

Analysts:

Abhishek Navalgund — Nirmal Bang Institutional Equities — Analyst

Karan Khanna — Ambit Capital — Analyst

Sandeep Agarwal — Naredi Investments — Analyst

Bhargav Buddhadev — Kotak Mutual Fund — Analyst

Koushik Mohan — Ashika Stock Broking — Analyst

Darshan Jhaveri — Crown Capital — Analyst

Sunder S — Avanda Spark — Analyst

Piyush Khandelwal — Bank of India Mutual Fund — Analyst

Akshay — CRAMC — Analyst

Pulkit Singhal — Dalmus Capital Management — Analyst

Jenish Karia — Antique Stock Broking — Analyst

Jaiveer Shekhawat — Ambit Capital — Analyst

Mitul Shah — Reliance Securities — Analyst

Presentation:

Operator

Ladies and gentlemen good day and welcome to the Mold-Tek Packaging Q4 FY ’23 Earnings Conference Call hosted by Nirmal Bang Equities Private Limited. As a reminder, all participant lines will be in the listen-only mode. And there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Abhishek Navalgund from Nirmal Bang Equities. Thank you and over to you sir.

Abhishek Navalgund — Nirmal Bang Institutional Equities — Analyst

Yeah, thanks, Lisa. Hello, everyone. On behalf of Nirmal Bang Institutional Equities, I welcome you all to Mold-Tek Packaging Limited 4Q FY ’23 earnings conference call. We have with us Mr. Laxman Rao, the Chairman and Managing Director of the company along with financing [Indecipherable]. Without further ado I would request Laxman Sir, to start with the opening comments post which we will open the floor for Q&A. Thank you and over to you sir.

Janumahanti Lakshmana Rao — Chairman and Managing Director

Good afternoon, everybody. Thank you very much for your…

Operator

Sorry to interrupt sir, we are not able to hear you.

Janumahanti Lakshmana Rao — Chairman and Managing Director

You can’t hear me?

Operator

Sir, you’re sounding very soft.

Janumahanti Lakshmana Rao — Chairman and Managing Director

Good afternoon, everybody. Is that fine or you are not able listen?

Operator

Sir, please proceed.

Janumahanti Lakshmana Rao — Chairman and Managing Director

Yeah, good afternoon, everybody, thank you very much for your interest in our company’s performance…

Operator

I am so sorry sir, but your audio has once again gone soft. Members of the management team, we are not able to hear you. Ladies and gentlemen, please stay connected while we try to regain the audio for the management team. Ladies and gentlemen, thank you for patiently holding, we now have the line for the management reconnected, over to you sir.

Janumahanti Lakshmana Rao — Chairman and Managing Director

Hello, good afternoon, everybody. I hope you can hear me better. I thank you very much for your interest in our company performance. I am glad to inform you, we recorded one of the best volume growths in our company history. That’s 16.3% volume growth and PAT is up by 26.3%. Overall, it’s a very satisfying year and as we also mentioned to you, several projects are on the anvil. Sultanpur only Phase one, started in the last week of March and the main Pharma division, we’ll will be going on-stream in the second quarter of this year. Followed by three projects for RG Chabella Group [Phonetic] at Panipat, Cheyur and Mahan. Our unit expansion at Daman and the second unit of Daman and also unit at Sandila [Phonetic] to be started during this current financial year.

So, as explained, and as seen earlier we crossed our investment target. Actually, INR130 crores has been invested in the current — last financial year ending March 31st. And it looks like we will have a similar kind of investment of about INR120 crores to INR140 crores in the next financial year in these five projects, I just mentioned. So I think we can rather go on question-and-answers to cover more information about our company’s performance. Over back to the operator to — we can start the question-and-answer session.

Questions and Answers:

Operator

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Ladies and gentlemen we will wait for a moment while the question queue assembles. The first question is from the line of Karan Khanna from Ambit Capital. Please go ahead.

Karan Khanna — Ambit Capital — Analyst

Yeah, all right, thanks for the opportunity and good afternoon, Mr. Rao. Sir, my first question is on the pharma packaging business. If you could elaborate more in terms of where the things stand currently and key hirings that you’ve done and companies, you are working within the regulated pharma segment.

Janumahanti Lakshmana Rao — Chairman and Managing Director

Yeah, we have people joined the core team is already in-place and couple of them are joining in the month of June and the buildings are now shaped up. Several machines are on different stages of completion. Few molds have been received, but mostly the projects, assembling and trial runs will start in June-July, and hopefully by August-September commercial production will start in some areas. Areas like regulated market where we need longer period for the client clearance may go on till next year for clocking turnover, but there are other products, which we will be parallelly introducing in July-August, which might start contributions from the second half of the current financial year itself.

So, this is briefly the pharma packaging provision as of today, but certainly in the Q2 there will be a movement towards commercial production and additional volumes, revenues can start adding up from October onwards, in a small way, and once the regulated tablet packs also come in big way, that is from next — though they start in October — August-September, the real same can start only next year because of the long-time for approvals. However, there are products which we are introducing in August-September, which should be adding to the revenues starting from third quarter.

Karan Khanna — Ambit Capital — Analyst

Sure, as a follow-up, what would your ambition with respect to scale of the IBM pharma packaging business here over the next three years till FY ’26 and could this also open up an export opportunity for Mold-Tek?

Janumahanti Lakshmana Rao — Chairman and Managing Director

Yes, certainly, export opportunities will be there, because we are adding few more products into the product mix which probably I’ll be able to share in the next quarterly meeting more detail. So, these products have excellent potential or at least export reinvestment investment potential. And also, this tax [Technical Issues] in three years we understand that the emission [Phonetic] this year, including the OTC product of Iodex [Phonetic] probably we will be able to achieve a turnover around INR10 crores but moving forward in three years from this INR10 crores we are aiming to come anywhere around INR75 to INR80 crores turnover in the pharma division if things go as planned as per plan.

Karan Khanna — Ambit Capital — Analyst

Sure, that’s very helpful, my second question is on your lubes business. Can you help us break-down the 30% volume growth, how much of this was driven by underlying growth in the industry volumes? How much from the day sales and from conversion into IML QR — QR coded IML containers?

Janumahanti Lakshmana Rao — Chairman and Managing Director

I don’t have exactly the details, but it is certainly more than 12% to 15%, that much I can say. And QR coded Shell has converted partly of its brands into QR code and IML conversion and QR code together could be the balance 15%, sorry. Given that 7% to 8% industry growth maybe around 8% to 10% is the growth coming from shift in IML and QR code.

Karan Khanna — Ambit Capital — Analyst

Sure. And lastly on the FMCG [Phonetic] business, what kind of volume addition has been on account of addition of Kissan and Horlicks custom packs.

Janumahanti Lakshmana Rao — Chairman and Managing Director

Actually the — I’m a little disappointed to say that, so-far only trial lots have run for Kissan Jam, in the month of May, they indicated lifting about four lakh bottles as agonist 10 to 15 lakhs — sorry jars they committed. So hopefully, only from June these products will be fully productive. In-spite of that, we have recorded 36 — 32.6% percent growth in food and FMCG without these three products contributing to the production. As I mentioned earlier, these three have the potential to give almost another 7% to 8% growth in the food and FMCG segment. I’m sure from June onwards, hopefully these two products will be contributing.

Karan Khanna — Ambit Capital — Analyst

Sure, that’s it from my side. I’ll come back-in the queue. Thank you and all the best.

Janumahanti Lakshmana Rao — Chairman and Managing Director

Thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Sandeep Agarwal from Naredi Investments. Please go ahead.

Sandeep Agarwal — Naredi Investments — Analyst

Hello thank you, sir for the opportunity. Sir my question is regarding, sir what is our internal IRR assessment regarding these investments?

Janumahanti Lakshmana Rao — Chairman and Managing Director

We always have an IRR [Indecipherable] 4-year IRR time to recover the funds that is but keeping one year as our projects and preliminary, it’s 20% on five years. IRR [Technical Issues].

Sandeep Agarwal — Naredi Investments — Analyst

Okay, sir just a bookkeeping question sir, what is the balance sheet, the investment amount is INR51.6 crores, what is the including these investments.

Janumahanti Lakshmana Rao — Chairman and Managing Director

Sorry, how much you said?

Sandeep Agarwal — Naredi Investments — Analyst

Investment amount which is INR51.6 crores. So…

Janumahanti Lakshmana Rao — Chairman and Managing Director

We were predicting INR130 crores actually…

Sandeep Agarwal — Naredi Investments — Analyst

Sorry — sorry, investment — as a investment line-item in-balance sheet?

Janumahanti Lakshmana Rao — Chairman and Managing Director

Investment line-item in balance sheet?

Sandeep Agarwal — Naredi Investments — Analyst

Which is — which INR17 crores previous year?

Janumahanti Lakshmana Rao — Chairman and Managing Director

What are you referring? Maybe capitalized amounts are not included in that.

Sandeep Agarwal — Naredi Investments — Analyst

No, no, it is not a capitalized amount sir. It is financial asset, and subgroup is investment, which is INR17.08 crore previous [Technical Issues].

Janumahanti Lakshmana Rao — Chairman and Managing Director

No, what he is saying is these financial assets? That is the investment in Mold-Tek Packaging in technology — MTTL shares. That is by virtue of the shale price of Mold-Tek Technologies has gone three times and the investment value has shot up from INR17 crores to INR51 crores.

Sandeep Agarwal — Naredi Investments — Analyst

Okay.

Janumahanti Lakshmana Rao — Chairman and Managing Director

It is an internal benefit. But we don’t put it in the P&L, it comes under IML shipping [Phonetic].

Sandeep Agarwal — Naredi Investments — Analyst

I understand — I understand. Sir can I ask another question regarding the Mold-Tek Technology.

Janumahanti Lakshmana Rao — Chairman and Managing Director

Okay, if it is a brief one, let’s go quickly.

Sandeep Agarwal — Naredi Investments — Analyst

Yeah. No — sir what is the growth outlook for next 1 or 2-years? Have you seen any challenge due to current economic environment in USA?

Janumahanti Lakshmana Rao — Chairman and Managing Director

No, actually our economy, and our line of activity in MG deal has big relevance, U.S. economy because what growth is given in MTPL is the electrical vehicles market where many-many new models have been introduced by several automobile companies, so there is a big surge in demand for our services. Mainly in designing and even simulation. In Mold-Tek Technologies we have two divisions, civil and mechanical, yes that is now growing rapidly, which was backlog. It was rather in our cards still now is the started performing for last seven, eight months and the future looks very bright for the next three-four years. So that is where Mold-Tek Technologies is itself in electrical vehicles market. And we got an opportunity in 2019 to do Tesla project. So that background is really helping us in attracting inquiries and orders from several other automobile companies.

Sandeep Agarwal — Naredi Investments — Analyst

Okay sir, last one is, can you provide any guidance regarding the next year order — next year, or order book in hand, any such data? In civil and mechanical both divisions? Yeah, yeah, civil we can get around 25% to 30% growth there because we achieved 49% growth in the previous year and we are on a bigger base of $18 million this year. We hope to hit somewhere close to $23, $24 or maybe $23 million. Okay, thank you sir.

Janumahanti Lakshmana Rao — Chairman and Managing Director

Thank you.

Operator

Thank you. The next question is from the line of Bhargav Buddhadev from Kotak Mutual Fund. Please go ahead.

Bhargav Buddhadev — Kotak Mutual Fund — Analyst

Yeah, good evening, team and congrats on a good performance. My first question is on signing-up Pidilite Paints as a customer. Is it possible to highlight some details in terms of which geography will you be serving and what could be the revenue potential, maybe over the next three years?

Janumahanti Lakshmana Rao — Chairman and Managing Director

I wouldn’t be able to tell you, such a detailed one, but it is for the new brand of products where IML is being used and they have given a commitment for us to pick up all the IML paints from us and also some part of the HTL, that is heat transferred labeled paints. Accordingly, we started supplies to them three to four months ago. But I think at least, business will be worth around INR8 to INR10 crores in the beginning and as our association grows with Pidilite it has every possibility to at least double or triple in the next three to four years.

Bhargav Buddhadev — Kotak Mutual Fund — Analyst

Okay, so you are referring to about INR20 crores to INR30 crores of revenue in the next two to three years?

Janumahanti Lakshmana Rao — Chairman and Managing Director

Yeah, it is possible.

Bhargav Buddhadev — Kotak Mutual Fund — Analyst

Okay, okay. Secondly, with regards to Shell out of 20 SKUs, about four SKUs were under QR code. So, have the increase this?

Janumahanti Lakshmana Rao — Chairman and Managing Director

Actually, we have shifted this machine and there was some disruption for a while in April, but now that machine is in place, once the third machine flexo machine has been arrive from supplier and now the printing machines are all set. So, we have given them clearance that in case they wanted to introduce more-and-more QR coded items, we’re all set to go with it. So hopefully starting from June-July, they might introduce more QR coded paints.

Bhargav Buddhadev — Kotak Mutual Fund — Analyst

Okay and any update on Castrol sign-up, because I believe it was under pilot?

Janumahanti Lakshmana Rao — Chairman and Managing Director

Castrol is still considering, and they have taken thrice with us, but their marketing team has to take a call. Unfortunately, or fortunately, two months ago, or a month ago, they started rebranding Castrol all over. The logos and everything are undergoing change now. You might have noticed in the market, some new logos have been introduced. So I think their marketing team is more focused on that change and hopefully they’ll come back once they set that in place.

Bhargav Buddhadev — Kotak Mutual Fund — Analyst

Okay, and lastly, has the Satara plant of Asian Paints ramped-up? It was under maintenance. So how has been the progress with them?

Janumahanti Lakshmana Rao — Chairman and Managing Director

No, no they have ramped up. They have started I think their production. I mean it is not that they stopped or anything. It was going on and ramp-up also has been completed, partially, and it’s going on.

Bhargav Buddhadev — Kotak Mutual Fund — Analyst

Okay, okay, sir, I’ll come back-in the queue, thank you.

Operator

Thank you. The next question is from the line of Koushik Mohan from Ashika Stock Broking. Please go ahead.

Koushik Mohan — Ashika Stock Broking — Analyst

Hi, sir. Thanks for the opportunity and congratulations for the great set of numbers. Sir can you guide us on the next coming couple of years or three years? What would be your OPM margins or like what is your EBITDA margins that you’re focusing on?

Janumahanti Lakshmana Rao — Chairman and Managing Director

Yeah, going-forward we have combination of new paint clients like ABG adding to our numbers and new segments like pharma, which will be adding to our members also. So given these combination, the way is better, because even with as you know that in pharma, we have much higher-value add additions and you might have noticed steady 30 plus percentage of growth in food and FMCG. And with our plan to set-up food and FMCG plant in north by Jan-Feb of ’24 along with ABG Paints plant. We will be able to access food and FMCG clients more easily in the northern region and I’m hoping that this trend of 30 plus percentage of growth in food and FMCG division will continue for next few more years. Having said that, in all probabilities, the EBITDA margin from around 40 now should reach around 42, 43 in the next two-three years, per kilogram [Phonetic].

Koushik Mohan — Ashika Stock Broking — Analyst

Okay, got it, sir. Sir, another one, what is your plan on the capex and how is your plan going on increasing the capacity utilizations for all the plants? Are you focusing to make it, because on an average the capacity utilization stands around 76% to 77%. Any focus on increasing that and putting any capex, new capex?

Janumahanti Lakshmana Rao — Chairman and Managing Director

There is a big capex plan I explained INR130 crores, we completed this year and we hope to spend again another INR130 to INR140 crores in the year ’23 and ’24 mainly for the Sultanpur plant’s, second phase followed by Panipat, Cheyyar and [Indecipherable], plants for the ABG and in Panipat, not only ABG, we are also setting up food containers — Food and FMCG product base also. And Daman 2 project is there. And Sandila we have committed to start in this year. So, all these projects put together, this year again there will be investment in the tune of INR130 crores to INR140 crores, which is considerable, because if you wish to know the company’s overall investment until 2019, that is almost for a period of 33 years, company has invested only INR275 crores and in the last five years we have invested INR275 crores and with this INR140 probably it will go to INR420 crores investment in the last five to five and half year.

Koushik Mohan — Ashika Stock Broking — Analyst

Got it sir, sir, what will be your asset terms on an average?

Janumahanti Lakshmana Rao — Chairman and Managing Director

Asset turn has always tend to be in the region of 1.5 to 2 in the greenfield projects with 7.5 and in brownfield we crossed to 2.5, but majority of the projects now are going are all greenfield, if you look at five plants, which are coming up there will be contributing maybe in the year two or year three in the region of around 1.5, but as they progress with expansions and brownfield expansions, which the clients have committed then the asset turnover will start give creeping towards two.

Koushik Mohan — Ashika Stock Broking — Analyst

Got it, sir. Thanks. And sir how go your cash conversion cycles? Like, is it under control or like, how about the inventory and debts, that I wanted to understand more?

Janumahanti Lakshmana Rao — Chairman and Managing Director

Inventory and debtors remained more or less same, like [Technical Issues] The inventories have come down from INR95 crores to INR85 crores and INR143 crores of trade receivables has become INR123 crores and increased turnover. So, there is a much better improvement maybe in number of days. I don’t have count. I can tell you that.

Koushik Mohan — Ashika Stock Broking — Analyst

That’s fine. So, sir what is your targeted on the focus on ROCE’s? Are you focusing to be only 25% plus ROCE’s in the coming years or any focus over there? Because you have some margin of around [Speech Overlap]

Janumahanti Lakshmana Rao — Chairman and Managing Director

Around 25 but the new green field projects, it is difficult to reach 25% ROCE. But once we stabilize and start earning on the capacities created it is possible to come close to that. So currently we are near 20%, 18% to 20%, sometimes it is 20% to 21% last two-three years ago and since we are expanding rapidly and some of the greenfield projects like even today, we have land worth of around INR30 crores, purchased recently, but nothing has started on it. So, which is going to happen this year. So that way if you look at all the complete investment, which is effectively being utilized, it looks in 18% to 19%, but once those projects are completed and start yielding results it can cross 20% and might reach even 22% to 23%. But these ongoing expansions are going on, because we are creating capacities in multiple locations. So, for the time-being a 20% ROCE is what we can watch in the next couple of years.

Koushik Mohan — Ashika Stock Broking — Analyst

Thanks sir, and the last final question. Sir can I understand which brand actually contributes to major chunk of your revenue? And if possible, can you please put them on your presentations.

Janumahanti Lakshmana Rao — Chairman and Managing Director

I can’t tell you one brand as such but Asian Paints, is our largest client even today with more than 30% contributions from the client and several paint and lube companies and brands of [Indecipherable] brands of HUL still contribute sizable numbers. Probably I don’t know, I’m guessing Hindustan Lever’s brand could be one single brand which is contributing to the maximum amount towards the revenues.

Koushik Mohan — Ashika Stock Broking — Analyst

Sir, I have one specific question on single brand called as Nandini from Karnataka. How about that brand sir? Yeah, Nandini, we started, we started entering Nandini sales, it’s not very considerable now, but still our relation has started few months ago with them. So, sir on Nandini which products are you focusing on majorly?

Janumahanti Lakshmana Rao — Chairman and Managing Director

I think I guess it is curds and ice creams.

Koushik Mohan — Ashika Stock Broking — Analyst

Curds and ice creams got it sir. So, for this Nandini exactly for Nandini sir where is your — which location of the plant supplies are [Speech Overlap]

Janumahanti Lakshmana Rao — Chairman and Managing Director

Hyderabad plant only we are serving. Today, our Food and FMCG completely is only from Hyderabad. We have a small setup of square pack containers that is ghee and oil containers are being supplied from Daman in a small way, but 90% of our sales in all or at least 85% happen only from Hyderabad. That is why we are now planning to have Panipat plant the capability of Food and FMCG products, so that it will be able to cater to the northern division. And similarly, Daman 2 plant at Daman is also going to cater to the Food and FMCG sales in the western region. These two plants will go on-stream by next season, that is March next year, ’24.

Koushik Mohan — Ashika Stock Broking — Analyst

Got it sir, got it. Sir, can I assume what kind of sales can be the potential sales for Nandini? Can it be around currently at least INR5 crores to INR6 crores revenue coming from them.

Janumahanti Lakshmana Rao — Chairman and Managing Director

Maybe per annum. But not very significant as of now. I know that our marketing team has penetrated into Nandini and started supplying a few months ago, but I don’t think it has become any big client as of now.

Koushik Mohan — Ashika Stock Broking — Analyst

Got it sir, got it, got it.

Janumahanti Lakshmana Rao — Chairman and Managing Director

But we got an [Indecipherable].

Koushik Mohan — Ashika Stock Broking — Analyst

Sure, sure, thanks sir, and I’ll come back-in the queue.

Operator

Thank you. The next question is from the line of Darshan Jhaveri of Crown Capital, please go ahead. Hello, good evening, sir and thank you for taking my question. Congratulations on a great set of numbers, sir. I hope I’m audible?

Darshan Jhaveri — Crown Capital — Analyst

Yeah, yeah, you are. So, sir, I just wanted to know what kind of growth are we targeting for the next few years because a lot of capacities are coming online, so any indication of our revenue or volume growth target that we might have?

Janumahanti Lakshmana Rao — Chairman and Managing Director

Yeah, I said it last year and I continue to hold onto the same number. We are aiming annual CAGR of at least 15% to 20% volume growth in the next three years. That’s very clearly visible to us and it can be better if some of our clients who are — I mean proposing or targeting their own numbers, if they achieve, we can be closer to 20%, but you can take for guidance 15% to 20% as our annual growth rate for the next three years.

Darshan Jhaveri — Crown Capital — Analyst

Okay, that helps a lot sir, and sir with a new capex, could we quantify how much capacity total units in metric tons, are we adding in the current [Technical Issues]. I think we are at 45,000 correct sir?

Janumahanti Lakshmana Rao — Chairman and Managing Director

Yeah, 45,000 as we progress, but at the beginning of the year that is April ’22, we were around 42,000 tons and today, and we are close to 49,000 tons because some of the IBM machines are on the way and with that addition happening in month or two, we will be somewhere close to 50,000 tons. So, from 42,000 to 50,000 is what we have created in the last one year. And going-forward, I guess we should be reaching close to 60,000 tons after all these five plants are completed, which may take 12 to 15 months.

Darshan Jhaveri — Crown Capital — Analyst

Okay sir, and how much in terms of capacity, there is — how much time does it take to scale-up on new additions. So maybe it could take a year to reach optimum utilization or how would that be?

Janumahanti Lakshmana Rao — Chairman and Managing Director

Utilization of at least 75% capacity utilization will take minimum one year for any plant to reach, because of the client themselves at this same, they are new in the market and also they there won’t be much teething troubles, because it is a proven process, and we have control on the various variables of the injection molding process. So but I would give safely one year period for takeoff.

Darshan Jhaveri — Crown Capital — Analyst

Okay sir. Thank you. That helps me a lot. All the best for the next quarter, sir.

Janumahanti Lakshmana Rao — Chairman and Managing Director

Thanks.

Operator

Thank you. The next question is from the line of Sunder S from Avanda Spark [Phonetic]. Go ahead.

Sunder S — Avanda Spark — Analyst

Hello sir, thanks for this opportunity. My first question is with regards to the paint volumes. So we see, it’s been another quarter by paint volumes have been relatively flat on a year-on year basis and realization has also come off. So is it a slowdown in the end-market or have we lost any share to any other player in the market?

Janumahanti Lakshmana Rao — Chairman and Managing Director

I don’t think we lost any major client or nor any volumes to clients. But I can’t guess whether our growth is equal to the growth of the paint industry. But my opinion, it is a maximum, plus or minus 1%, so when we grew 5% the paints industry might have grown 6% to 7% or maybe 5% to 7%, so — but there could be some variations in others numbers. Like individual paint companies numbers, which I’m not able to comment. My second question stems ways, we’re just indicators, they still want to have a 15% to 20% kind of volume growth guidance. Right sir, sir my second question stems from this. You have just indicated that you want to have a 15% to 20% volume growth guidance. Now, how much of this could be impacted if there is a slowdown across the paint segment, because this was not something that we envisage going into this quarter. This paint industry volumes have been low. Is there anything that you are picking-up from that segment in terms of order book, something that we should look-forward into FY ’24, how are the number shaping up across the paint segments? In the paint sector, we are still not looking at anything beyond 8% to 9% growth for the financial year ’23 and ’24, from 5.6% because our last couple of years’ experience shows that which — at least in our case, our growth is restricted within 10% for the paint industry. But going-forward, one positive for Mold-Tek is that these three plants of ABG which will go into production one, by end of this calendar year, let’s say, December-January and the other two by March, approximately January, but let’s say, Jan to March ’24 could start adding numbers to Mold-Tek. So, though this year might be flattish like 7% to 8% next year could be more than 10% in our absolute numbers, is my estimation. That is why the next year is going to be, though ’23, ’24 will be a good year, a better year could be ’24, ’25, in my opinion because by then pharma will be well-established. Our products will be received, and we will be able to the pharma client deal using our product range, which we are starting in August and that will evolve into a decent size of contributions from ’24 and ’25 and probably ABG’s plants will mature and will start picking-up reasonable volumes. So that is why in the period of next three years, which is up to ’26, ’27, I am confident that will be clocking a volume growth between 15% to 20% and also one of the moves, which we are doing now, it’s getting into Western and Northern markets for Food and FMCG products which we are completely 0 as of today. Our sales in the West is okay, but our sales in North are hardly anything. So, our entry into binding, but for Food and FMCG and in Daman, which we will certainly complete before the next season that is February ’24, will lead us to sustain our 30% plus growth in Food and FMCG portfolio. So that itself today stands around 26% of or volumes. So, 30% of it is almost close to 8%. So, 8% of the overall company growth would come from that. And if we get even 8% to 10% in paint that will lead to another 4% to 5% growth. And assuming lubes will continue to grow at least at 10% to 12%, assuming from chips and QR code entries that will be adding another 4% to 5%. So, we are at 15% as a very comfortable level of growth and 20% on the high-end side, because any one of these pharma and other contributions, new products like this Horlicks and Kissan which got delayed last six to seven months may start from May-June. So, they may add another 2% to 4% percent. So, we are comfortable in stating our targets between 15% and 20%.

Sunder S — Avanda Spark — Analyst

See just on the FMCG part is that more the Daman specific as well as the Panipat, do we have in the order book right now sir? Assured order book once the project [Speech Overlap] In West, we have been asked by a couple of clients to come closer to them and on the promise of better volumes. I can’t name them as of now, but so Daman-2, that way it is having couple of commitments from our side also, that we will be starting our supplies in the next financial year. So, Daman-2, will be part of the current business that’s Asian business expected from them. And once we are there in West, there will be better access and better ability to serve the clients, but I’m more bagging on Panipat unit for Northern market entry.

Majority of the big players there, who are buying from us, they are suffering or feeling the pinch of high-cost of transportation and long-time of transportation, which is sometimes seven to nine days. So, they will be very much pleased to shift towards our — to our IML containers. So, I am banking new business to flow-in from north starting from next season in the Food and FMCG. Finally, sir, there is just one last one, with ABG coming in, has Asian Paints opened up for IML containers?

Janumahanti Lakshmana Rao — Chairman and Managing Director

I don’t want to comment on that, it’s — they have their own strategies, but whenever they want to enter, we are ready with them. We have facilities created for Asian Paints. So once they take a decision, will be ready to support them.

Sunder S — Avanda Spark — Analyst

Sure sir. Fair enough. Thank you and all the best sir.

Janumahanti Lakshmana Rao — Chairman and Managing Director

Thank you. Thank you. [Operator Instructions] The next question is from the line of Piyush Khandelwal from Bank of India Mutual Fund. Please go ahead.

Piyush Khandelwal — Bank of India Mutual Fund — Analyst

Thanks for the opportunity, sir. Sir, just wanted to ask on this working capital that we have seen a reduction by ’24, I mean across the line-item debtor days and inventory days. From 120 days of working capital in FY ’22 to around 88, 89 days. So I mean some side of it would be in raw-material question, but what could be the sustainable range that, let’s say, we can look at for next two to three years? And is there some sustainable reduction that we can see because of maybe product mix change that we are seeing in pharma I mean, OTC, that we’re seeing or maybe the Food and FMCG contribution increasing.

Janumahanti Lakshmana Rao — Chairman and Managing Director

See, one of the reasons why we improve our collections or decrease our inventories is basically, our ability to have clients who pay faster. In the field and food and FMCG the payments are faster. Even we collect some advances in case of some of the smaller clients. So that is why you might notice that there is a reduction in the number of days. [Technical Issues]

Piyush Khandelwal — Bank of India Mutual Fund — Analyst

What could be the sustainable range sir?

Janumahanti Lakshmana Rao — Chairman and Managing Director

Also, the inventories were valued at a higher valuation last year, because at the time of foreclosure of March 31st, ’22, the raw material was at its peak. Today, raw materials are at 110 or 108 compared to 125, 130 last year. So, this also contributed. For details, you can send a mail and I can ask the finance department to provide a number of days, how it reflects. There is no deduction, but partly is also due to undervaluation of the inventories.

Piyush Khandelwal — Bank of India Mutual Fund — Analyst

That I understand, sir, so can we expect the working capital days to be I mean less than 90 days on a sustainable basis 90, 95 days going-forward.

Janumahanti Lakshmana Rao — Chairman and Managing Director

Yeah, yeah, yeah going-forward, it will be better and better, because as more and more pharma products, where 45 to 60 days is the general norm, and Food and FMCG we collect in advance. And at the most we allow 30 to 45 days credit. So, these sectors contribute more-and-more. We will have the inventory days and the receivables is coming down.

Piyush Khandelwal — Bank of India Mutual Fund — Analyst

Understood, sir. Understood. Sir my next question was on short-term borrowing. I mean, I have noticed that our long-term borrowing has decreased whereas short-term borrowing has increased, on the same and our working capital has reduced. So is there any some adjustment meant that has happened on the balance sheet?

Janumahanti Lakshmana Rao — Chairman and Managing Director

No, there is no different. Short-term borrowing means they are basically working capital borrowings, which will increase as we draw more-and-more funds on the drawing limit. We have more than INR120 crores limit, but we are using only 21 crores under working capital. Short-term debt keeps coming down because we repay them the amount and this is being a forex loan which is tied-up at a very low dollar rate, if we pay in between we lose the advantage. So, we are keeping the long-term debt for maybe next one year or one and half year, it gets wiped off. So, we will not have any long-term debt on our books, within the next one to one-and-half year.

Piyush Khandelwal — Bank of India Mutual Fund — Analyst

Is it one and half year or two years? [Technical Issues] My question was, our working capital has reduced, I mean…

Janumahanti Lakshmana Rao — Chairman and Managing Director

[Speech Overlap] but increase from 7.32 to 21.9, the short-term debt.

Piyush Khandelwal — Bank of India Mutual Fund — Analyst

No sir, my question was since our working capital days has reduced, but short-term borrowing on the same hand has increase, so that is the reason why I was asking the question.

Janumahanti Lakshmana Rao — Chairman and Managing Director

Okay, okay, I understand. See basically, all these moneys are fungible as you know better than me. So, when we have limits either in the long-term or short-term wherever funds are required, we will be drawing them and what banks look at is the backup of the current assets, for giving us the limits. So that is how the funds utilization comes in. The effectiveness of our collections are reduction in inventories is a different ballgame altogether on the inventories, and receivables INR250 crores we are eligible close to a INR180 crores funding. But currently we are drawing only INR21.9 which is the long scope for us to further borrow from the banks without taking the route of long-term debt, but if long-term debt comes cheaper we will certainly go for it.

For example, we have now some interest free loan to come from Mysore government for the plant which we set-up three years ago. That might be released in next couple of weeks. It carries 0 interest-rate for next 10 years.

Piyush Khandelwal — Bank of India Mutual Fund — Analyst

For how many years, 8 or 10 years?

Janumahanti Lakshmana Rao — Chairman and Managing Director

Ten years. So, we will be using those funds for our long-term needs. So, this fungibility is what you are seeing there. I hope you understand.

Piyush Khandelwal — Bank of India Mutual Fund — Analyst

Got it, got it, got it sir, and sir, just one last question, I don’t know, because I’ve joined the call late, in case you have outlined the capex plan for next two-three years then how are you going to fund that?

Janumahanti Lakshmana Rao — Chairman and Managing Director

I think next year the plan is INR140 crores, again, INR130 crores to INR140 crores. We completed INR130 crores against INR225 crores projected in the financial year ’22, ’23. And again there are five projects, including the Phase-II of Sulthanpur, Hyderabad is going on. So, with that, the total again looks like a budget of around INR132 to INR140 investment.

Piyush Khandelwal — Bank of India Mutual Fund — Analyst

FY ’25, same number?

Janumahanti Lakshmana Rao — Chairman and Managing Director

FY ’25 might taper a bit down, because the growth in FY ’25 will be more for Brownfield expansions into all these units, where the clients have indicated their numbers and if the plants go per their estimates and our estimates, there will be more of Brownfield instruments in ’24 and ’25. They may not be as high as INR140 crores probably it may tapper down to INR80 to INR100 crores. It again depends upon our growth in Pharma division, which if it happens as our plants, probably we have to set-up entirely a separate plant unit for pharma. Based upon the size of the pharma and that opportunity and if entrench well by ’24, ’25, and the year ’25, ’26 could be again an investment in pharma. So, let’s see, ’25 and ’26 when we reach ’24.

Piyush Khandelwal — Bank of India Mutual Fund — Analyst

Got it, sir. Got it, thanks. Thanks a lot.

Operator

Thank you. The next question is from the line of Akshay from CRAMC [Phonetic]. Please go ahead.

Akshay — CRAMC — Analyst

Hello? Hello.

Janumahanti Lakshmana Rao — Chairman and Managing Director

Yeah, Akshay tell me.

Akshay — CRAMC — Analyst

No sir, actually my question has been answered. Sorry, sir. Thank you.

Operator

Thank you. The next question is from the line of Pulkit Singhal from Dalmus Capital Management. Please go ahead.

Pulkit Singhal — Dalmus Capital Management — Analyst

Thank you for the opportunity. Sir can you share the volumes for thin wall for the year. And within the context of 30% growth for Food and FMCG, how much growth do you expect in all to have in the next two-three years.

Janumahanti Lakshmana Rao — Chairman and Managing Director

Yeah, I think the total tonnage of thin wall in the year ’23 is around 6,753 to be precise. That is contributing to 32.6% growth compared to the previous year, which is 5,100. So, we are anticipating to maintain an 30 plus percent growth in the coming weeks…

Pulkit Singhal — Dalmus Capital Management — Analyst

Sorry, sir this volume you mentioned this for the entire Food and FMCG, right?

Janumahanti Lakshmana Rao — Chairman and Managing Director

Yeah.

Pulkit Singhal — Dalmus Capital Management — Analyst

I’m asking about thin wall within that, you are thin wall…

Janumahanti Lakshmana Rao — Chairman and Managing Director

[Speech Overlap] towards 4,180, compare to 5,080, which is a 35.5% growth. [Indecipherable] right.

Pulkit Singhal — Dalmus Capital Management — Analyst

And within Food and FMCG of 30% growth, will this be going faster or slower than [Indecipherable]?

Janumahanti Lakshmana Rao — Chairman and Managing Director

Sorry.

Pulkit Singhal — Dalmus Capital Management — Analyst

So, will [Indecipherable] involved be growing faster than 30% that you guided for Food and FMCG or will it be at a similar rate?

Janumahanti Lakshmana Rao — Chairman and Managing Director

Yeah, we are aiming at 30% to 35% percent growth, again, on the 4,178 probably 5,500 plus is our target for next year in Food and FMCG.

Pulkit Singhal — Dalmus Capital Management — Analyst

Right. Sir, I’m asking this is because. I mean, you seem to have guided for an EBITDA per kg of 42 or 43, is that just for next year or FY ’25, FY ’26?

Janumahanti Lakshmana Rao — Chairman and Managing Director

See next year probably 41, 42 is possible. Next year, 42, 43 will be possible in my estimate.

Pulkit Singhal — Dalmus Capital Management — Analyst

Which is what I am just trying to understand because you have a thin wall is much higher EBITDA per kg as you mentioned earlier. And if the contribution of that is growing at 30, 35 percent annually, your overall EBITDA per kg should be going up much faster than what you’re guiding. Is there — Are there some change in economics or some of the other segments like paints and lubes, which has come down, which is why the overall company EBITDA per kg is not going up as fast?

Janumahanti Lakshmana Rao — Chairman and Managing Director

No, we need to be conservative in our estimates and increasing costs of various consumables and others. So, keeping that in mind, I want to guide anywhere between 41, 42 for this financial year. Because there is no pressure as such reduction in the pricing, but obviously to expand volumes, you need to be competitive and that’s what we are doing. And in fact, wherever it’s possible. We are also asking for improvement in the conversion cost citing the genuine reasons like increased labor and power costs. So, there are some companies, we are obliging and some quick players in the companies we are in discussions with. So, if those things fall in-line, we can be closer to 42, but if there are circumstances which hold the clients to hold on to the pricing, we might be in the same bracket of 40 to 41. But looking-forward, with the improvement in Food and FMCG, we are targeting around 41 to 42 percent this year.

Pulkit Singhal — Dalmus Capital Management — Analyst

Right. So, this is to gain new clients to having to provide better economics. So, that you are able to get business. Is my understanding correct?

Janumahanti Lakshmana Rao — Chairman and Managing Director

Typically, what I understand your question is which set of clients will be more inclined to pay, is that’s what you’re saying.

Pulkit Singhal — Dalmus Capital Management — Analyst

No, I’m just saying as you grow in various segments, over the next two-three years. Are you finding that you have to give better economics to them to be able to grow or are you able to retain your current economics. No in Food and FMCG, we are able to maintain our current economics without breaking down our margins or reducing our margins. In paint and lube it is more or less matured now, not much of difference is possible either ways. And with the new — new projects coming in, we typically safeguard our interest because of low volumes, but coming into food and FMCG is the area where we are comfortable maintaining our margins because of for ability to deliver the quality, consistency and volume.

So that is main [Indecipherable] days as of now, but going-forward, pharma, will be adding our — aiding our abilities and strength, much better than Food and FMCG. Food and FMCG has been there for last seven to eight years and pharma is coming into our basket of products only from second-half of this financial year. So going-forward, pharma will also support Food and FMCG in sustaining are improving our margins. That will only happen more from next financial year. Understood, understood. Just very quickly. I mean, if you could mention what is the EBITDA per kg in pharma and blended for Food and FMCG broadly that you expect over next two-three years?

Janumahanti Lakshmana Rao — Chairman and Managing Director

See Food and FMCG will continue to expect it [Indecipherable] in the region of 80 plus per kilogram. And coming to Food — pharma products, it can be as high as 150 plus. Even if we take some products as an entry-level, we can easily look at 120. But as we go into this regulated pharma containers and products, some of the niche products, which I can’t give details now, then 150 is also usually possible. Okay, so 120 to 150 is the range, okay sir. Relax. Got it, thank you sir.

Operator

Thank you. The next question is from the line of Jenish Karia from Antique Stock Broking. Please go ahead.

Janumahanti Lakshmana Rao — Chairman and Managing Director

[Technical Issues] thank you for the opportunity. Sir first question is, if you can help us with the volume and value number in IML and non-IML. Yeah, IML and non-IML. Its overall year is closed at in terms of tonnage, 54%, up from 62 last year. And in terms of sales value, it is close to 68 from 65.3.

Jenish Karia — Antique Stock Broking — Analyst

Okay, all right, thank you. And sir, with regards to paints segment, the volume that we deliver for the quarter was more or less flattish and we had a decline in revenue. So, is there [Indecipherable] in the general segment or it has to do with pass-on of [Indecipherable] prices coming off.

Janumahanti Lakshmana Rao — Chairman and Managing Director

No and I think prices were stable during this quarter, not much of variation, that is not to be blamed. In terms of paint volumes we also find that there is some delay in the takeoff and probably things will move more favorably from April onwards.

Jenish Karia — Antique Stock Broking — Analyst

Okay, but during the quarter is there any mixed duration because value-wise we registered a decline despite volume being flat.

Janumahanti Lakshmana Rao — Chairman and Managing Director

Yeah, this maybe due to some of the input costs were not compensated that’s what I mentioned that we are talking with clients all over, mainly both in lubricants and paints to compensate for some of increased costs. So that could be one of the reasons why the decline in the turnover number compared to the value.

Jenish Karia — Antique Stock Broking — Analyst

Okay, understood. That’s it from me, sir. Thank you and all the best.

Operator

Thank you. The next question is from the line of Jaiveer Shekhawat from Ambit Capital. Please go ahead.

Jaiveer Shekhawat — Ambit Capital — Analyst

Thank you. Good afternoon to Mr. Rao. So, first question on the paint segment. Now, we understand that due to entry of that Grasim in the paints industry, the existing paint companies are likely to face margin pressure and possibly they would also look to pass-on some of it packaging suppliers like you. So what’s your strategy to [Technical Issues].

Janumahanti Lakshmana Rao — Chairman and Managing Director

What is — what is the question?

Jaiveer Shekhawat — Ambit Capital — Analyst

Sir, my question is that as the paint and customers itself face margin pressures they will also look to pass it on to packaging suppliers like you. So what’s your strategy to deal with those margin pressures?

Janumahanti Lakshmana Rao — Chairman and Managing Director

See one thing is we are all-in discussions with our clients, conveying to them the cost price and compensation that is required. Couple of them are already given relief from April. I can’t name them, but couple of them are in the process of considering of bringing request of labor and power costs. So there are two-three items which we periodically indicates, that is labor costs and power cost because this being matured line of segment for us, not many other continuation are there generally negotiated. On these two problems itself couple of major clients have approved our request and effective from April 1st, we are getting that and I hope other clients also will agree for it, and if that happens, probably we’ll not have this pressure at least for next couple of years.

Jaiveer Shekhawat — Ambit Capital — Analyst

Understood. And sir, additionally, we seen that our Asian Paints is going ahead with greenfield expansion, one in Madhya Pradesh also probably in East as well. So are we in talks with them to set-up capacity there?

Janumahanti Lakshmana Rao — Chairman and Managing Director

From them there is no additional information to us and of course, as and when they given an opportunity, we are ready to go with them. So like there are other suppliers, we also stand a good chance and I am sure they will also give us an opportunity whenever they expand.

Jaiveer Shekhawat — Ambit Capital — Analyst

Understood sir, last question, can you just break-down your F&F revenues into thin wall products. You have sales-through Cadbury as well as [Technical Issues]. What will be the proportion of each of these?

Janumahanti Lakshmana Rao — Chairman and Managing Director

You can take the number for them FMCG volume is 4,180 tons in this year as against 2,580 tons in [Indecipherable], that is our feedback.

Jaiveer Shekhawat — Ambit Capital — Analyst

And the rest how much will be distributed amongst Cadbury and how much from Q-Pak [Phonetic] for edible oil?

Janumahanti Lakshmana Rao — Chairman and Managing Director

No, Food and FMCG is 4,180 and that includes Cadbury, [Technical Issues] ice creams all thin wall products and Q-Pak is 2,580 that is edible oil, cashew and some of the several products including agro products.

Jaiveer Shekhawat — Ambit Capital — Analyst

Got it, got it, thanks a lot, sir.

Operator

Thank you. The next question is from the line of Suruchi Parmar from Amex Wealth Management [Phonetic]. Please go ahead. Suruchi Parmar we are not able to hear you. As there is no response from the current participant we will move onto the next participance from the line of Mitul Shah from Reliance Securities. Please go ahead.

Mitul Shah — Reliance Securities — Analyst

Sir, thank you for the opportunity. Sir my first question is on new customers, which we mentioned in our presentation about this Pidilite, [Technical Issues] etc. So how much revenue contribution will be from this new customer during FY ’23 and if you can do a similar number for ’22 and Q4 also.

Janumahanti Lakshmana Rao — Chairman and Managing Director

In this year notable names, ExxonMobil has come back to us. He was our client earlier and other clients is Pidilite, notable names and there other companies like [Technical Issues] and other companies. Currently this year, hopefully these new companies I am talking about these top five or six companies would have contributed INR7 crores to INR8 crores in this current financial year. Maybe, ExxonMobil, I don’t have exact number, it could be more, but remaining other five or six clients would have contributed, maybe around INR6 crores to INR7 crores. That will at least double to INR14 to INR20 crores in the next financial year. ExxonMobil alone has ability to give us more than INR10 crores top-line in the next financial year, if they start moving more-and-more orders to us. So one of the reasons why they come back is also IML. And now the another point, which I wanted to tell you all is [Technical Issues] here is that Mold-Tek is working hand-in-glove with many of our clients on the sustainability aspect of plastic management and steps have been taken to utilize RCP that is reprocessed plastic granules.

Now a days, the availability of reprocessed high-quality granules is available. Many companies have set up units in different corners of the country producing plastic granules from recycled plastic and they’re able to meet some of our criteria and we are working with all the top paints and lube countries even Food and FMCG companies, wherever possible to use these granules that will partially use customer benefit, but more than that gives them the sustainability aspect to which government is also trying to pass-on to them for the past couple of years. So Mold-Tek has taken the initiative in this direction. And in fact we are experimenting with most of our clients with their products to have these RCP material used as much as possible to make them eligible passing the criteria, set by the Environmental Authorities.

Mitul Shah — Reliance Securities — Analyst

Okay sir and in this paint business, we highlighted 8% to 9% kind of growth. So, wherein we are factoring this Pidilite related revenues also incremental from new clients?

Janumahanti Lakshmana Rao — Chairman and Managing Director

Yeah, Pidilite just started three months ago, and I guess the monthly turnover is close to around INR25 to INR30 lakhs but that can grow up to INR50 lakhs to INR60 lakhs per month. But as they also promising more-and-more brands to be shifted to IML, if that happens, the numbers can go better than what we are expecting.

Mitul Shah — Reliance Securities — Analyst

Okay sir, and this RCP you highlighted, so what would it be approximate proportion wherein maximum we can mix in terms virgin versus, this is RCP?

Janumahanti Lakshmana Rao — Chairman and Managing Director

See earlier, if you ask me three years ago, the kind of RCP available in the market was so bad, even 5% addition would reflect on the performance of the product, even the esthetics of the product. Today, thanks to various investments made by different the entrepreneurs, they are processes which are giving very cleared and clean material and also well classified material, polymer classified, as polypropylene classified as PET. So we are in a position to mix comfortably at 10% to 15%. But going-forward with better technology is coming in this field, I don’t see a problem to even reach 20% to 25% in the next couple of years, which is the government set deadline I think, to aim by ’26, ’27 or ’25, ’26 most of these brand owners, not us but the brand owners have to adhere to the 20%, 25% of the plastic reuse.

So those numbers we are online and we have already started working on our molds to adopt to this kind of material mix and we have mass entry [Phonetic] processing techniques, which won’t affect our production efficiency and at the same time won’t hamper or damage the molds. So those techniques of the trade-in the last one-two years Mold-Tek has taken initiative. Actually, we have been fulfilling this form — this what you call, specification, much earlier than our competitors to most of our clients.

Mitul Shah — Reliance Securities — Analyst

This polypropylene and reprocessed I can understand, but you said that PET also so is it possible now in PET also, we are — we can use this very process because it’s being a primarily…

Janumahanti Lakshmana Rao — Chairman and Managing Director

No, we cannot use but PET reprocess, PET is now currently available at much better form, then even polypropylene because PET bottles are easy to collect and they will not have contamination because most of them are used for water and other liquids, so cleaning those bottles before grinding and before mixing is much more meticulous and can be done much better way. So PET bottles scrap and recycling is becoming, it was once considered, PET was once considered as a non-reprocessable material, but the new technologies have come up in the last five years, especially the last two-three years and these PET bottles are recycled, and granules that generated can be easily mix with the virgin material without impacting the transparency and performance, but of course we are not consumers of PET.

Mitul Shah — Reliance Securities — Analyst

Yeah, [Indecipherable] you also highlighted for food grain also it can be used. So are we using anything reprocessed for food grain also?

Janumahanti Lakshmana Rao — Chairman and Managing Director

Yes, some — some processes are claiming that their products are — can be mixed for food packaging also and we are experimenting with couple of them.

Mitul Shah — Reliance Securities — Analyst

Sir, last question on this pharma business, which we are going to start in second-half. Sir, in that case the generally the higher-level of accuracy is required in terms of Micron. So these molds, would it be in house or it will be, will be procuring within country or will be depending on the countries like China, Korea?

Janumahanti Lakshmana Rao — Chairman and Managing Director

No, we will be depending on countries for the time-being, because two things, we have several projects on-hand this year, especially [Indecipherable] three projects we have to execute. We have thin-walled projects coming up at Panipat. And without having real expertise in the pharma products as of today, we don’t want to I mean experiment with the project which has now and delayed the project. So, we are depending on some of the molds for the first phase of pharma to come from abroad and we concentrated manufacturing the molds for our [Indecipherable] and food segment.

Mitul Shah — Reliance Securities — Analyst

Because even material for mold making is also not available…

Janumahanti Lakshmana Rao — Chairman and Managing Director

No, we make sure that the materials and hardness and mold testing is thoroughly done and today thanks, last 10 years of experience in China and Korea and Taiwan, we have established reliable partners for mold supplies and they know today, what we need and we insists on their design to be approved by us and all the design drawings to be shared with us because whenever any maintenance comes up, we should have those drawings to change the parts which are damaged during course of time. So that way we have now established strong relations with couple of three or four…

Mitul Shah — Reliance Securities — Analyst

And then sir, plastic raw-material for pharma is also initially imported or will that be combination of?

Janumahanti Lakshmana Rao — Chairman and Managing Director

No, no, no, 90% of that material is available in India, few materials, which are specific to certain obligations, need to be imported and their pricing is also in-line with Indian operators.

Mitul Shah — Reliance Securities — Analyst

Okay sir, thanks a lot and all the best.

Janumahanti Lakshmana Rao — Chairman and Managing Director

Thank you.

Operator

Thank you. The next question is from the line of Krishna Doshi from Oshkosh Stock Broking. Please go ahead. Ma’am, we are not able to hear you clearly. As the line for the current participant has dropped off and that was our last question. I now hand the conference over to the management for their closing comments.

Janumahanti Lakshmana Rao — Chairman and Managing Director

Thank you everybody for your interest in our Company’s performance and I wish you all the people very good evening. And all the best. Thank you very much to Nirmal Bang for holding this conference. Thank you.

Operator

[Operator Closing Remarks]