NOCIL Limited (NSE: NOCIL) Q2 2025 Earnings Call dated Oct. 29, 2024
Corporate Participants:
Anand V.S. — Managing Director
P. Srinivasan — President of Finance & Chief Financial Officer
Analysts:
Nirav Jimudia — Analyst
Aditya Khetan — Analyst
Radha Agarwalla — Analyst
Dhaval Shah — Analyst
Rohit Nagraj — Analyst
Raman KV — Analyst
Manoj Jethwa — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q2 FY ’25 Earnings Conference Call of Nocil Limited. This conference call may contain forward-looking statements about the Company, which are based on the beliefs, opinions and expectations of the Company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions]
I now hand the conference over to Mr V.S. Anand, Managing Director of NOCIL Limited. Thank you, and over to you, Mr. Anand.
Anand V.S. — Managing Director
Thank you. Thank you, Shlok, and good morning to everyone. I’d like to start by expressing my appreciation for your presence today. Joining me are Mr. P. Srinivasan, our Chief Financial Officer; and our Investor Relations Advisors from SGA. I hope you have all received our investor presentation. It is available on both the stock exchanges and our Company website.
To start with, let me provide you with an overview of the Company’s performance for quarter two financial year ’25. During this period, revenue from operations amounted to INR363 crores. We witnessed a slight degrowth in volumes in quarter two financial year ’25 sequentially compared to the preceding quarter, partially impacted by logistical challenges. Having said that, we continue to build on our volumes year-on-year, both on a quarterly and half-yearly basis. The domestic demand for rubber chemicals continues to remain robust on the back of the tire industry stable replacement volumes and recovery in exports.
Aggressive pricing actions and product dumping by Chinese, Korean and EU rubber chemical players have put a significant strain on prices. On the industry front, there was a temporary slowdown in compounding production due to the shortages and very high prices of natural rubber. The natural rubber prices have since begun easing and availability improving. The OE growth for tires is expected to moderate amid softened demand. The two-wheelers are expected to fare relatively better while the commercial vehicle segment is impacted by moderation in demand amidst a high base.
On the export side, we have seen continued momentum in our international business growth, despite global challenges such as geopolitical tensions, container shortages, issues in the Red Sea region, and rising freight costs, we have made good progress in expanding our international presence, a result of our long-term strategic engagement with our customers and our focused efforts in gaining approvals. The Latex business has been witnessing a mild recovery with improved exports of rubber gloves from ASEAN [Phonetic] and this augurs well for us.
In terms of raw materials, prices remain marginally higher during the quarter. Passing on these cost increases to customers have been challenging due to the fierce competition from China, Korea and EU. In response, we have adopted a judicious approach, balancing price and volume amidst these ongoing challenges. Our [Technical Issues] chemicals expansion program is progressing well at our Dahej site. This capex program that aligns with our strategic objectives for growth will enable us to continue to partner with our customers in their growth journey.
We continue to work on improving our operational efficiencies with technology and infrastructure, and at the same time, prioritizing eco-friendly practices from energy-efficient production methods to waste reduction technologies. Looking ahead, while there continues to be an element of unpredictability in the external environment, we remain positive on our growth opportunities. We continue to focus on building our market strengths, deepening our customer relationships, and leveraging our rubber chemical expertise to drive growth.
I should pause for now. That’s it from my side. I will now invite Mr. Srinivasan to provide an overview of our financial performance.
P. Srinivasan — President of Finance & Chief Financial Officer
Thank you, Mr. Anand, and good morning to everyone. Now let’s run through the consolidated financial highlights. On the sales volume ton on index basis for Q2 FY ’25 is 141, taking base of Q1 FY ’20 as 100. On the revenue parameters, the net revenue from operations for Q2 FY ’25 stood at INR363 crores, as against INR372 crores in Q1 FY ’25, a marginal degrowth as compared to the previous quarter.
For the half year, the net revenue from operations stood at INR735 crores, as against INR748 crores for the quarter ended H1 FY ’24, again a degrowth of 2%. We are maintaining our selling budgets largely for the quarter. Volumes for Q2 FY ’25 grew by 11% year-on-year but showed a slight decline on a quarter-to-quarter due to logistic issues. The international business continues to show a growth trajectory. For the first half of FY ’25, the volumes reflected a strong growth of 9% as compared to H1 FY ’24.
Here the domestic maintaining the growth trend as per the market trending and the export performing at a relatively higher double-digit growth. On operating EBITDA performance, operating EBITDA for Q2 FY ’25 stood at INR38 crores as against INR41 crores for Q1 FY ’25 with EBITDA margins around 10% in Q2 FY ’25. Operating EBITDA margins for the quarter were impacted due to increase in production activity by 10% on a sequential basis, which led to higher operating cost, along with certain freight costs [Indecipherable]
For the half year, operating EBITDA stood at INR79 crores against INR101 crores for H1 FY ’24 with margins standing at 11%. Coming to the PBT parameters, the PBT for Q2 FY ’25 operating PBT for Q2 FY ’25 stood at INR32 crores as compared to INR37 crores in Q1 FY ’25. H1 operating PBT stood at INR69 crores as compared to INR84 crores in H1 FY ’24.
On the profit-after-tax, the profit-after-tax for Q2 FY ’25 stood at INR42 crores, as compared to INR27 crores in Q1 FY ’25. This is on account of the consequent to the budget ’24 announcement where the long-term capital gains of tax rate underwent have changed. There is a tax credit of INR14.89 crores was recognized due to budget changes. For H1 FY ’25, the profit-after-tax stood at INR69 crores as compared to INR61 crores in H1 FY ’24.
With this, we would like to open the floor for question-answers.
Questions and Answers:
Operator
Thank you very much. [Operator Instructions] The first question is from the line of Nirav from Anvil Wealth. Please go ahead.
Nirav Jimudia
Good morning, sir. Thanks for the opportunity. Sir, I have two, three questions. Sir, first is you mentioned that there was increase in the production activity this quarter, but I think the sales were impacted due to the logistics issue. I think very well reflected in our stock changes also. So let’s say that if there was no logistics issue and we were able to sell whatever we have produced this quarter, what would have been the sequential growth in the volumes in Q2?
P. Srinivasan
No, I would expect it would have marginally been higher than the previous quarter.
Nirav Jimudia
Got it. And are those logistic challenges behind us and could we see the production what we have clocked in second quarter that should start moving in the third quarter onwards plus the normalized volume growth, which you mentioned last time that we are seeing every quarter some bit of volume increases through the contracts what we have negotiated with the customers. So if you can just help us out, understanding how the volume trajectory is looking out in H2 of FY ’25.
So I think we have clocked something close to around 9% volume growth in H1. So if you can just help us understand some bit on the volume side, that would be helpful.
Anand V.S.
Yeah, sure. So like we mentioned also in the previous calls, we see volume to develop positively, and we also for the second-half, we maintain that there should be an improvement from here on further going into the second half, at least at this point when we look ahead and clearly with the volumes developing positively.
Nirav Jimudia
Correct. Because, sir, last year third quarter was a bit sluggish in terms of the volumes. So safe to believe that the current level of volumes, what we have been doing on a quarter-on-quarter basis, there should be improvement on the base volume of H1 is the right understanding to do?
Anand V.S.
Yes. Yes.
Nirav Jimudia
Correct. Sir, second question is on the competition part. I think you mentioned that there was intense pricing pressure due to competition from China, Korea and EU. So just wanted to understand from you like when the competition behaves in terms of the — on the pricing side, do they work on the cost-plus basis like when the raw material prices start coming down, they exist their prices accordingly on a spot basis, and change their prices because of which we also face a similar sort of pressure in getting our volumes to be placed. So how do the competition behaving at this point of time in terms in terms of pricing, A, and in terms of placing their incremental volumes in the market?
Anand V.S.
Yeah. So I — based on our experience, what we see and I can’t specifically comment on what the approach is, but by and large, I see that they start with a cost-plus kind of cost-related pricing, but then it tends to then also become very, very market-based, depending on how the rest of the pricing in the market tends to play-out. So then that kind of tends to put a downward pressure if there is lowering of prices by some other players. So that’s how this is playing out.
Everybody is trying to really grab volumes because there is lower demand in some of the markets. We know that the Chinese economy as such utilization levels are at a significantly lower level. So they are really looking to take those volumes. So sometimes they do take some, I would put it as rational or irrational decision to take some volumes and then that tends to put pressure on quite a few of the other players on the pricing.
Nirav Jimudia
Correct. So at some point of time, do the customers approach also on the similar lines that do we also need to price our products on a cost-plus basis or exist our price accordingly? So if you can just help us understand what sort of volumes of ours are susceptible to the spot prices and how much of our volumes are more towards the contracted side where such changes on a quarterly basis doesn’t impact us?
Anand V.S.
Yeah, it’s a mix of both. So basically like we have also explained in the previous calls, most of the pricing tends to hold for a quarter at least with the large customers, some of them even for longer periods. But some of them — since they are also long-term relationships, they don’t tend to fluctuate that much. Some of the customers — and it’s a balance of both, when you have the long-term engagement where you don’t see too much of fluctuation in volumes from one quarter to the other.
But some of the other customers you know tend to see this fluctuation. So it’s a mix of basket of both that we have near us, yeah.
Nirav Jimudia
Got it. Sir, last bit from my side. One, you mentioned that there is a double-digit volume growth on the export side on a Y-o-Y basis. If you can just clarify that number? And second, are we seeing any recovery on the Latex side of the business where our volumes were impacted last year and even in first quarter? So are we seeing some sort of recovery there on the Latex side of the business?
Anand V.S.
Yeah. So on the latex, yes, there is — we do see that the production of rubber gloves is improving partially I think also what we see is that exports from ASEAN [Phonetic] is also improving. So there is an uptick in the market compared to the situation last year for sure.
Nirav Jimudia
Correct. And sir, last one on that export numbers or export volume growth on a Y-o-Y basis, if you can clarify, sir.
P. Srinivasan
Yes. So it’s double-digit growth only when confirmed. We are — I will not specify the exact number, but it is definitely more than double-digit growth.
Nirav Jimudia
Okay, sir. Thank you so much, sir and wishing the entire team of NOCIL, a Happy Diwali and a prosperous New Year.
Anand V.S.
Thank you. Thank you.
Operator
Thank you. Thank you. And the next question is from the line of Aditya Khetan from SMIFS Institutional Equities. Please go ahead.
Aditya Khetan
Yeah. Thank you, sir, for the opportunity. Sir, my first question is on the — if there’s also the volume part. Sir, on a sequential basis, sir, can you clarify this volume dip is majorly because of the international volumes or because of the domestic volumes?
Anand V.S.
There is growth on both fronts from a year-to-year basis. Also on a sequential, we see there is a bit of a staggering of volumes is what I would say. It’s not a — and due to logistical challenges that we have witnessed here. So I don’t see that as a real degrowth per se.
Aditya Khetan
Okay. Sir, onto the logistical challenges, so that is clearly a little [Technical Issues] so reflected into the higher other expense, sir, is it possible to quantify the number? How much was it higher on sequential basis? Absolute figure, sir, if it is possible to share?
P. Srinivasan
So like as I mentioned, at least I think if we did have hypothetically, we should have marginally been higher than the previous quarter volumes.
Aditya Khetan
Okay. Sir as you had also mentioned in your initial commentary that higher competition is clearly impacting the Company and that is also reflected into our per ton margins, which we calculate. Sir, any idea like — so in terms of a cycle, so that is clear. So we are standing at the bottom. So what are the triggers like which can take this per ton margins to the original levels, so which were there, you can say five to six years so before any triggers you find apart from the higher competition or any sort of the value addition which is going up or any sort of new products we are launching. So that can help us to improve the margins or we will — so more or less remain at this levels going ahead?
Anand V.S.
I say that with the improving of the economies outside of India and improving demand, we should see prices moving up. But then to — I don’t have a specific timeframe to put in terms of when this will — this will improve given the uncertainties that are all around. But that’s on the market front and where I see that there is clearly a possibility that prices should improve with increasing demand in the other markets. But on the other hand, we continue to work on products, which we can bring to the market, but they do take its time.
We are in trial phases, products are in different stages where we want to also get into products and applications where we can see more resilience. So that is work in progress, but that’s still some time away.
Aditya Khetan
Okay. But sir, sir, in your presentation also, so the graph of the rubber consumption, so sir, that number is quite similar to the 2017 figures of 28 million tons. So it seems, sir, over a period of six to eight years, so demand has been largely flattish only due to the global markets. Any particular reason, sir, why this demand has not gone up and it is at the similar level?
P. Srinivasan
So, Aditya, there are few challenges which the market encountered. One was the automobile degrowth in 2018, ’19 in China. Second, the COVID waves of COVID 1, COVID 2 and stuff like that, which had its impact on the consumption — rubber consumption. So therefore, if you see there were two major interruptions during those periods where the market degrew and therefore, you saw a flattish thing. But whenever there is a recoup happening, it goes into 3% thereabout or 4% thereabout. So it’s a matter of time where — before we — so once the stable — condition stabilize, I think hopefully the momentum will pick up.
Having said that, in the last 10 years, one has seen despite these volatility the average growth for this industry has been 2%, 1.8% or thereabout. So component of CAGR growth is 2% per annum. Now maybe once these things rectify, I think or corrected the conditions have stabilized, hopefully the momentum starts pick up.
Aditya Khetan
Got it. Got you. Sir, just one last question, sir, any update on the anti-dumping duty have you represented to the government? And is the government so seriously considering to import an anti-dumping duty in the near future considering the impact which we have seen in our margins and all?
P. Srinivasan
We are actually at the moment studying various parameters of — we’re studying we have not filed anything.
Aditya Khetan
Okay. So we have not applied yet, sir?
P. Srinivasan
We are studying this before we decide which product if at all if you want to. So for this study, we have to — there are various parameters to be studied before we take a view. And this is a joint decision between our consultants and with NOCIL. So at an appropriate as and when we do it, we will announce it.
Aditya Khetan
Sure, sir. Thank you, sir. That’s it from me.
P. Srinivasan
Thank you.
Anand V.S.
Thank you, Aditya.
Operator
Thank you. The next question is from the line of Radha from B&K Securities. Please go ahead.
Radha Agarwalla
Hi, sir. Thank you for the opportunity. Sir, firstly, I would like to appreciate the management and team for continuously increasing volumes despite the challenges. Sir, my question was on the other expense front. I was surprised to see the higher other expense in this quarter. So normally around 45% of other expense is power and fuel cost and, 14%, 15% is freight. So in the previous concall, you had mentioned that from this quarter, you’d be witnessing the benefit of cogen turbine. So I had thought that any increase in freight costs would have been offset by benefit of cogen. However, it was not reflected in the numbers. So I request you to kindly help me understand these numbers.
P. Srinivasan
Radha, there are a few things. So the turbine got commissioned in this quarter, it’s a fact. We saw some benefits accruing. But what we — I think what you’ve missed is that we had a production increase in the activity because we had anticipated a higher sales or dispatch during the quarter, which didn’t happen. So therefore the loading of expenses is there, proportionate to the activity — manufacturing activity. So that’s one thing. And secondly, you also had the exports to the destinations of the Western world, so obviously, it will be having a relatively higher freight cost as compared to our Asian continent markets. So both these factors came into the system in terms of other manufacturing expenses or — and which includes even the packing material also.
So there were three, four parameters which got loaded in other expenses. That’s why it’s a one-time you see this, but it should stabilize as we go along.
Radha Agarwalla
All right, sir. So sir, just continuing this point, so from July to October on — July to October period, we have seen that freight rates have halved from $6,000 to $3,000. So in the next quarter, do we expect to see twin benefits of cogen plus lower freight rate in addition to the operating leverage on anticipation of higher volumes?
P. Srinivasan
Yeah, we are going to see that. Those things will come in.
Radha Agarwalla
All right, sir. Also, so just wanted to ask that in the last quarter we were expecting some large approvals from customers. So has that come through?
Anand V.S.
Yeah, yes, Radha. So this is ongoing and we do receive on a quarterly basis approvals. So like I’ve mentioned, it’s not specifically — it will be a customer, multiple customers, multiple sites. So that’s ongoing and that is progressing from quarter-to-quarter.
Radha Agarwalla
Sir, when can we see those volumes reflected in the number?
Anand V.S.
So actually we are seeing this. So as we speak, we are seeing this and like we just discussed in one of the earlier questions, we are clearly seeing it in the volume development.
Radha Agarwalla
All right, sir. Sir, lastly, the South America market, OE and aftermarket demand seems to be very strong. So just wanted to know, are we supplying to this region and any new customer addition or share of business increase with customers located in this region? Also today volume in South America, if we take an index number of 100, then how much growth are you expecting from this region in the next two years?
Anand V.S.
So we are supplying to the South American market. We have presence with our — some of the global customers in those markets. We — most of the growth, I expect more in North America than in South America because also the volumes and the opportunities are more there. So I — this — we have not put a specific number on what we will expect from South America in the next few quarters as yet.
Radha Agarwalla
Sir, what percentage of our total volumes would be to South America, would it be lower than 5%?
Anand V.S.
By and large, yeah.
Radha Agarwalla
Okay, sir. Thanks and all the best.
Anand V.S.
Thank you.
Operator
Thank you. The next question comes from the line of Dhaval Shah from Girik Capital. Please go ahead.
Dhaval Shah
Yeah. Hi, sir. Sir, my question is on the commentary made for H2. Now the overall auto market globally, you know, is the commentaries has been quite low, and we see a good improvement for us in terms of volume growth. Now this is coming on back of you seeing more customer wins on the specialty side and some market-share gain. So where is this positivity coming out from? That’s my first question. And second question is on the competitive intensity, as you mentioned a couple of countries name. Now this intensity, and we’ve seen it many times in the past also, so that the quantum of intensity, is it similar to sometime in the past or it’s something like very high right now? If you could relate to a time period in the past for us to better understand how we react at that time and how did we come out of it? So some relation to the past. These are my two questions.
Anand V.S.
Sure. So the first part of your question, there are two things. One is, if you look at our market share outside in India, we have a very negligible market share. That is one. So there is an opportunity to grow with customers. And the other part is, when you look at the rubber industry consumption, largely it is the tire-dominated. And within that it’s — the OE part is a smaller percentage, right? It’s about only 30% very reflective of what we have in India and again in the global market. So it’s more of the replacement market. And I see that the replacement market is still reasonably doing better than last year when I see this across the regions here. So that is also a positive trend.
On the other hand, our presence is also small. So with both this as a combination, there is reason for optimism. Yeah. And the third part, which I can add is the long-term engagement that we’ve been having the strategic engagements, and the approvals that are coming through, which also I see as a positive contributor to that. So if I would summarize, I think these are some of the points to answer your first question.
The second one on the part of the intensity of competition, I would say, it is at a high level now to really say is it how related is it to some period in the past? Maybe, I’m sure there has been a period similar to this in the past, some period around 2019, ’20 and ’12, ’13 also. So there have been phases where this intensity has been high. So that’s a, let’s say, if I look at a timeframe from the past, there are some comparisons to this similar period. Yeah.
Dhaval Shah
Okay. So between then and now, our portfolio mix is much better towards better margin products or specialty products, you may put it. Is it the right way to understand since we have always been focusing many years to improve our specialty portfolio outside India?
Anand V.S.
Yeah. So they have increased over the years, but also some fluctuation here and there in the last one or two years. We see that has contributed also with some of the specialized application products increasing in volumes over the years. That has given us a lot more robustness to the bottom line.
Dhaval Shah
Okay. Sir, any innovation index kind of metrics we maintain to understand out of our total sales volume as you do today, how much of the products have we developed in the last three years or a two-year period? Just to understand how are we progressing as a Company?
Anand V.S.
So we are — we are tracking what’s usually called the vitality Index and so which is critical to look at new product introduction and how they perform as an overall percentage of sales. We are tracking it but we have not declared any of this in public domain. But to give you an idea, it is progressing positively. So that’s something that we have as a — as part of our leadership dashboard that we watch very, very closely. So that’s something that we track. So products introduced in the last five years.
Dhaval Shah
Interesting. And last question, sir, as we see a volume growth from basically the index what we gave, so this quarter we were at 140 odd. Now like a 10% growth from here should give — should bring a big leverage on the on the EBITDA. Is my understanding correct? Like if we just compare itself to in FY ’23 quarters. So is there like a large operating leverage sitting here for 10% volume growth from here?
Anand V.S.
There will be operating leverages kicking in as the volumes go up for sure.
Dhaval Shah
So can we look at like a 10% volume growth from here could give a 3%, 4% jump on the EBITDA side?
P. Srinivasan
I think we cannot quantify those things at this moment. We are studying that because it all depends on the product mix also. So that’s —
Dhaval Shah
I mean, is there a room to improve our gross margin further from here? I mean, keeping aside the price increases, which are market-driven but or is there some like organic growth room to improve our GP, which was like 43% this quarter?
P. Srinivasan
There is a continued improvement and we always work on our efficiencies and the yield parameters on a regular basis. So we start monitoring on a regular basis and we do have an internal target where we can stretch ourselves, but it all comes under the broad chemistry composition of the structure of the molecule. So I think we have some room to play, but I don’t think it’s that significant but maybe a 1% here and there can improve definitely.
Anand V.S.
And just to add, a lot of our work of our R&D team apart from looking at new products is the process efficiencies and both on the yield as well as the process. So they continue to accrue and I’m positive with volumes they will also add there.
Dhaval Shah
Got it. Thank you very much and Happy Diwali to everyone.
P. Srinivasan
Thank you.
Anand V.S.
Thank you. Wishing you the same.
Operator
Thank you. The next question is from the line of Rohit Nagraj from Centrum Broking. Please go ahead.
Rohit Nagraj
Yeah. Thanks for the opportunity. Sir, first question is on the export recovery. So you mentioned that there is a recovery in exports and double-digit volume growth. At the same time, you have also mentioned that there have been aggressive pricing actions from China, Korea and new players. So how have we fared in terms of these competition and maybe which geographies which have given this kind of growth or is there anything which can be explained by these two contradictory things? Thank you.
Anand V.S.
Hey, thanks, Rohit. So I would say while, yes, the competition and price intensity continues to be there not only in India, but also outside, probably a bit more in India because people see that there is demand in the country. If I were to put it, it’s a combination of the long-term engagements that we are getting into and the push over the last two to three years and the long-term relationship that we have had, which is is enabling us to mitigate some of these other factors to a certain extent. So I cannot say that we are immune to it. Surely we also will be susceptible, but at least it’s holding us in good stead. And we are positive that we should be able to at least continue in that direction more as a reliable supplier, a long-term supplier, somebody they can derisk their supply chains from. So these are things that are working positively, Rohit.
Rohit Nagraj
Yeah. Sure. Second question, sir, we’ve been talking that we want to derisk ourselves from the rubber chemicals and probably we’ve been working on the same in our R&D, but nothing has actually come out. So any progress on that? And given that there could be opportunities outside the current vertical that we are in, are we aggressively looking at any inorganic opportunities besides the capex program that we are having, and given the cash balance is significantly higher on our balance sheet? Thank you.
Anand V.S.
Yes. So it is a two-pronged approach where we look to leverage adjacencies in our chemistry. That means how do we look at our own chemistry that can go to other application. There is work that’s happened and there has been some sales in that front, but really not so material for us to report it. These are very specialized applications also where we see some good traction. We’ve been working on these projects for more than two, three, four years now. And some of them are showing some traction, but I’m really not in a position to really talk about it because I don’t see it as so material, but hopefully, they will start gaining some traction.
On the other hand, the option is always to look at the inorganic, and we are actively looking at it. At the same time, we want to find an option that can also leverage our own strengths, strengths not only in chemistry but all a lot of our other capabilities that we have, we can actually then have those synergies coming together. We’ll be working on this and I’m also not able to put any timeline to that because there are so many other factors that play into this that sometimes they don’t work in the last minute. So I think that’s ongoing. We will continue to pursue that.
Rohit Nagraj
Got it, sir. Sir, just one last clarification the 20% increase in capacity from this INR250 crores of capex, what is the timeline for this? When is it likely to get commissioned?
P. Srinivasan
And that’s like the third, fourth quarter of — so actually, Rohit, we will — we have announced that by September ’26, 30 months from the date of announcement we’ll be ready with the plant ready for completion thereafter the trials and approvals thereafter. So it may take three, four months thereafter. So that’s why we said fourth quarter of FY ’27, the business should start coming in.
Rohit Nagraj
Fair enough. That’s all from my side. Thanks a lot. Best of luck and, Shubha Deepawali.
P. Srinivasan
Thank you.
Anand V.S.
Thank you. Same to you.
Operator
Thank you. The next question is from the line of Raman KV from Sequent Investments. Please go ahead.
Raman KV
Can you hear me, sir?
Anand V.S.
Yes, sir. Yeah, please go ahead.
Raman KV
Sir, can you give the guidance for FY ’25 as well as what’s the current capacity utilization?
P. Srinivasan
So current capacity utilization is 70%.
Raman KV
70%. Yeah.
P. Srinivasan
And our guidance in terms of volume, we — as we have said in the past and again, we maintain we — our endeavor is to grow sequentially quarter-over-quarter. So we don’t want to give any specific guidance. Our intention of the base number is 140, we would like to grow from here every quarter.
Raman KV
Okay. In terms of volume, you want to grow quarter-on-quarter.
P. Srinivasan
Yeah, yeah, that’s what we are looking at.
Raman KV
And sir, you have announced INR250 crores capex for the Dahej facility. So is the whole capex only for depot — bottling the existing facility or are you planning to addition?
Anand V.S.
It’s a brownfield new plant Raman, yeah. It’s a [Indecipherable]
Raman KV
It’s a brownfield project?
Anand V.S.
Yeah, that’s right.
Raman KV
And sir, you have told in this onccall itself that the specialized products gave more robustness to the Company’s finances, as well as you have mentioned that there are new products under development. So these products, are they like a specialized chemical products or they are just like a how do I say, low-margin products?
Anand V.S.
Yeah. So what I mentioned was over the years, the specialized applications have slightly moved up, but not beyond a certain point. And there was a — not specifically to this quarter to the previous quarter. Nothing has significantly changed on the specialized application products. Coming to our new developments, clearly, the focus is on better margin products, less on the commodity space, yeah.
Raman KV
Okay. Thank you, sir.
Anand V.S.
Thank you.
Operator
Thank you. The next question is from the line of Manoj Jethwa here from KSA Shares & Securities Private Limited. Please go ahead.
Manoj Jethwa
Good afternoon, sir and thank you for the opportunity. So my first question is relating to the green chemistry, which you have mentioned in the presentation slides. So at par currently, NOCIL is having 20 plus product applications. So are we going to launch any new products, keeping in mind the green chemistry in mind?
Anand V.S.
Yeah. We are working on this. When you say green chemistry, it also includes substances that are safe to use, as well as looking at greener renewable options. So all these — all these are in — we’re looking at all this regularly and they are in the works, Manoj, yeah.
Manoj Jethwa
Sir, my second question is pertaining to China Plus One strategy. Say, everybody is talking on the buzz of China Plus One strategy, China Plus One strategy, but China is also coming out with the new unique economic package of almost around $854 billion. So how we got trails against such developments which might take place in China as well?
Anand V.S.
Yeah. So when you say China Plus One strategy and it’s — if you really bottom line that, it’s nothing but reducing your supply chain risk, right? And as a player, as a large, if I put myself in the shoes of any of our customers who buy something that is very dependent on ingredients that run their plant. I’m always looking to derisk my supply chains to ensure that I have a stable supply chain. And this obviously leads to opportunities for players who can support them in this front.
So I see that this supply-chain de-risking will continue to gather momentum with all the uncertainties that are around. So I see that this will gain more traction as we go along. I’m not able to comment on the stimulus or what’s really happened there. But I think the fundamental concept is to look at supply chain derisking.
P. Srinivasan
So just to add a bit, I think the — despite the stimulus, what we have seen is the export tax subsidy or the rebate the Chinese government has extended to the rubber chemical manufacturers continues to remain at the same level. It has not been increased.
Manoj Jethwa
Thank you. Sir, appreciate to — you could share some growth trajectory apart from the rubber chemical things, are we looking out for any inorganic growth in the same space, either say in India or overseas?
Anand V.S.
We are exploring options, Manoj like I had responded to one of the earlier questions. So that’s an ongoing process. We are doing it in a structured manner. That’s ongoing.
Manoj Jethwa
Sir, thank you very much and wish him very Happy Diwali to all at NOCIL team sir.
Anand V.S.
Thank you, Manoj, wishing you the same.
Operator
Thank you. The next question is from the line of Nirav from Anvil Wealth. Please go ahead.
Nirav Jimudia
Sir, thanks for the opportunity. Sir, when I see our annual report and in particularly the power schedule, and when we compare our volumes of FY ’22 and similar amount of power consumption. I think what we have consumed in terms of per metric ton of finished goods was something around close to 5,500 units, which is now down to 5,000 units precisely in FY ’24. So this is despite of the fact that our volumes have not grown, but we have bring down our per ton consumption of power. So one thing you mentioned that we have been continuously investing in the process part of our business.
So two things here. One, with the improvement in the volumes which we are envisaging, could this further fall and specifically, I’m talking about the power consumption per metric ton of finished goods and with the turbine benefits also now accruing to us, would it also bring it down our unit cost of power because predominantly we were more reliant on the coal side and with this renewable power coming on. So just wanted to understand the benefit of this in light of volume growth, A, and the mix of power getting changed.
P. Srinivasan
Yeah, we will see some benefits accruing in. I think because some things marginally got kicked in, in this quarter because we commissioned during the quarter. So as we go along and once it starts operating at a stable capacity, these benefits will start accruing in.
Nirav Jimudia
Got it. But sir, is it the right understanding that our power consumption per metric ton has come down by close to 10% over the last two years and this is purely because of the process part of our investments?
Anand V.S.
So what happens is whenever you are running a plant at a particular throughput rate or a better utilization rate, you will get the optimization benefit. Some of [Indecipherable]
Nirav Jimudia
Got it. And this should further improve once our volumes getting ramped-up?
Anand V.S.
Yeah, yes. That’s expected to happen. And also the fact that we’ve been also looking at green energy options. That’s also been contributing to that with the ramp-up.
Nirav Jimudia
Got it. Sir, secondly, apart from the power side, are we seeing any improvement on the per unit consumption of raw material or let’s say, improvement in the input-output norms for some of our products where you mentioned that the process innovation is also being a key investment for us. So are we seeing some improvement there also which eventually brings down our cost of production?
Anand V.S.
Yeah. So we have several examples internally where we have had this. And over the years this is a continual program and regularly, there is work on the yields, on the consumption of the raw materials. So there is positive traction on this on a regular basis. Yeah.
Nirav Jimudia
Correct. Sir, last from my side is, in terms of the debottlenecking what we have been doing, how much would have been capitalized till FY — H1 of FY ’25 and how much balance is yet to be capitalized?
P. Srinivasan
Nirav, I don’t have specific numbers right now with me. As and when I get the details maybe I’ll share it separately with the SGA at a later day.
Nirav Jimudia
Fine, sir. Thank you so much and wish you all the best.
Anand V.S.
Thank you.
P. Srinivasan
Thank you.
Operator
Thank you. As there are no further questions, I would now like to hand the conference over to Mr. Anand for closing comments.
Anand V.S.
Thank you. Thanks, Shlok, and thank you everybody for your time and engaging discussion. I take this opportunity to thank everyone for joining the call. I hope we’ve been able to address all your queries. For any further information, kindly get in touch with me or Strategic Growth Advisors, our Investor Relations Advisors. We wish you all a happy and safe Diwali and a Happy New Year. Thank you once again, and have a nice day.
Operator
[Operator Closing Remarks]