Oriental Carbon & Chemicals Limited (NSE: OCCL) Q3 2025 Earnings Call dated Feb. 12, 2025
Corporate Participants:
Akshat Goenka — Joint MD & Whole Time Director
Anurag Jain — CFO
Unidentified Speaker
Analysts:
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, thank you for patiently holding. The conference will begin shortly. Please stay connected. Do not disconnect. Ladies and gentlemen, thank you for patiently holding. The conference will begin shortly. Please stay connected, do not disconnect. Thank you ladies and gentlemen, good day and welcome to the OCC Limited Q3 and Nine Months FY ’25 Earnings Conference Call. As a reminder, all participant lines will be in listen-only mode and there will be an opportunity for you to ask question after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded.I now hand the conference over to Mr Akshit Goenka, Joint Managing Director of OCCL Limited. Thank you, and over to you, sir.
Akshat Goenka — Joint MD & Whole Time Director
Good evening and a very warm welcome to everyone. Along with me, I have Mr Anurag Jain, CFO and SGI Investor Relation Advisors. We have uploaded our results and investor presentation for the quarter ended 31st December on the stock exchanges and company website. Hope each one of you had a chance to go through the same. The demand environment remains challenging with major markets experiencing a slowdown. Also, most high companies are currently facing margin pressures due to elevated natural rubber prices , which has significantly increased production costs. This trend is also impacting our volumes. Despite these challenges, we remain focused on optimizing operations and exploring cost-efficient solutions to mitigate the impact on our business. We have also submitted an application to the DGPR seeking a recommendation for anti-dumping duty on IS imports from China and Japan. With the demerger complete, our focus is on strengthening and expanding our core chemical business. This strategic shift allows us to prioritize innovation, deliver high-quality solutions and drive sustainable long-term growth. While the industry is currently navigating challenges, we have a proven track-record of successfully managing similar downturns in the past. Our robust financial position, competitive advantage and unwavering commitment to ESG principles position us well to navigate this effectively and emerge stronger. Additionally, our established customer approvals and long-standing relationships provide a solid foundation to capitalize on opportunities as market conditions improve. Supported by efficient operations and the agility to adapt quickly, we are well-prepared to enhance capacity utilization and maximize efficiency as demand recovers. This positions us to deliver consistent value to our stakeholders and seize growth opportunities in the evolving market lens. I’d like to now hand the line to Mr Jain.
Anurag Jain — CFO
Thank you,. I will take you all through the financials of the company for the quarter ended December 2024. Total income stood at INR97 crores, EBITDA stood at INR16 crores. EBITDA margins were 16.6%, profit-after-tax is INR5 crores and the PAT margins are 5.4%. Margins have been impacted on account of substantially high international freight costs during the quarter, which have more than doubled since the last quarter of the same last year’s same quarter. Our focus remains on maintaining financial discipline, leveraging our strengths and staying agile to adapt to evolving market conditions. With this, I would like to open the floor for questions-and-answers.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Aditya Khetin from Smith Institutional Equities. Please go-ahead.
Unidentified Participant
Yeah. Thank you sir, for the opportunity. Sir, my first question is, like you mentioned in your presentation and in your initial commentary that higher freight cost has impacted the margins. But overall, it seems like the other expenses has been largely in-line only like when we look at last quarter and this quarter also, it has not been at a — on the higher side, but in-spite the raw-material prices have gone up, which is why the margin seems to be on the lower side. Sir, your view on the same and why are the sulfur in the coating oil?
Akshat Goenka
So both the raw-material prices are moving up and how is the trend-right now. You are right, if you look at, if you com, if we compare from the preceding month the freight rates are not much different, even though they are a little bit higher but the other costs therefore appear to be the same. As far as raw materials are concerned, one moment. My raw-material cost overall has gone up by a little more than INR1,000 a ton from the previous — from the preceding quarter. So not much difference if we look at them in book, both of them together. What has happened during the quarter is, though there has been increase in sulfur prices, but we have got a little relief in oil prices. So the overall impact is about INR1,000 crores.
Unidentified Participant
Okay. And sir, consequently, how is the trend of the — of our — so finished good price — finished good prices like they are also similarly inching up in-line with sulfur or are we not able to pass-on? And what are the volumes figure in terms of utilization, just a ballpark figure if you can share that would also help.
Akshat Goenka
Sure if you look to answer your first question, the raw-material prices now seem to have stabilized and therefore, I do not see much upside on that front as far as costs are concerned during the coming?
Unidentified Participant
And sir, the finished product prices of sulfur like were they were on the higher side as compared to last quarter or like they have been declining?
Akshat Goenka
No, no same competitive intensity and all those things. When you say last quarter, I am assuming we are talking about the preceding quarter, right?
Unidentified Participant
Yes, yes, the preceding quarter.
Akshat Goenka
So if you talk about preceding quarter, they are marginally lower, but in the same output.
Unidentified Participant
Okay. And sir, on to the utilization level, any sort of a change from last quarter?
Akshat Goenka
No. Any particular volumes are not picking-up. I think quarter-to-quarter, yes, there the profit during this quarter is less than last quarter. But this is mainly because generally in the month of December there are less dispatches because of the annual holidays internationally.
Unidentified Participant
Okay. Sir, any ballpark figure you can share like for full-fiscal FY ’25,
Akshat Goenka
What been in the range of 70% to 75%, 70% to 75%.
Unidentified Participant
Okay. Sir, just one last question on to the global capacity addition. Sir, we are witnessing like some competitors in China are also expanding their sulfur capacity. Any update how this can change the global dynamics at a time when already the demand is reeling under the pain? And sir, what is the confidence on the anti-dumping duty like — so with your discussions with the authorities, what is the initial suggestion like you’re getting from them?
Akshat Goenka
So to answer your first question, I have not thought of further capacity expansions in China as of now. But even if they were to come, I think the prices are at a level where it cannot have much of an impact as far as Chinese prices are concerned. To answer your second question, the process is in the advanced stages. Once the — once the DGTR gives a finding which we are hopeful should come soon, then it has to be referred to the ministry and it is for the ministry to decide whether to impose the duty or not.
Unidentified Participant
Sir, just one last question, if you now. Sir, considering two years from here on, how you see like the company moving because already we have taken so much pain in terms of the realizations and volumes also haven’t been picking-up that fast. Two years down the line, sir, what are the numbers you’re looking at in terms of top-line, EBITDA and margins? How much improvement we are foreseeing from your own?
Akshat Goenka
See, globally, we expect the market to grow at about 2% to 2.5% and we are working hard to get business. So there are two scopes, there are two-ways we can increase. We are working hard to get business in India. As you know that we are also working for anti-dumping duty, which is our fastest-growing market today. And we would like to retain the growth in the international market. So on these two accounts, of course, we feel that our quantities will go up. As far as far as the other things are concerned, pricing and pricing, et-cetera, we feel that the pricing already is isn’t under pressure as far as China is concerned and in our, there is not much scope of them going down further.
Unidentified Participant
Got it. Thank you, sir. Thank you. B
Operator
Efore we take the next question, a reminder to all the participants that you may press start and one to ask a question. The next question is from the line of Pritesh Kandhi from Discovery Capital. Please go-ahead.
Unidentified Participant
Hi, sir., you had indicated on your last conference call that the overall industry capacity utilization was roughly at 70%. And given it’s a low single-digit growth actual industry, do you — or how do you see potentially capacity ever reaching optimum levels? And in the event that there is an internal capacity needed or is actually where would we then be deploying our free-cash flows in terms of — in terms of expansion and growth. See, our capacity utilization, if you take on an annualized basis is between 75% to 80%.
Akshat Goenka
No, I’m talking about the industry globally. Yeah. So you were talking about our expansion or global expansion? No, no, I’m saying that globally, I would about 70%, so is there always going to be pressure on prices?
Unidentified Participant
Sorry. So the question is, is there always going to be some amount of pressure on pricing, given there appears to be just — that is true.
Akshat Goenka
As long as the whole industry does not reach optimum capacity, the pressure on pricing, you know, is expected to continue at least in the short — next one or two years till the capacity utilization levels do not increase. But if we are running, let’s say, globally this it’s 17% and we are — and the industry is growing at like low-single digits. It’s going to take a number of years actually before actually capacity utilization reaches optimal level, maybe like this. That is true. It could take about — I mean, if you consider 80% to 85% is normally considered an optimum level. To reach that level, it could take four years or there about three to five years, three to five years, okay. So we don’t expect any — okay.
Unidentified Participant
And with regards to anti-dumping with regards to — is there any — any update? I believe there was a hearing which happened and some of the tie-up manufacturers also had made a case against it. Just wanted to understand what the status is and what the likelihood is of anti-dumping so all the hearing has hearing has happened, the arguments have been filed and BGTR has done its audit.
Akshat Goenka
Now it is up to DGR — DGTR to publish its findings. So this is where the — where the sectors is of now. Are we hopeful or is it 50-50 in your view or how you look at it? No. So there are two things. We are always hopeful and that is the fact that we filed and we thought for it is because we are hopeful.
Unidentified Participant
Okay, got it. Understood. Sir, the next question is with regards to given we don’t expect idley industry capacity utilization of where-is our next phase of expansion and growth going to be? Because I mean despite having reasonably low prices, we are still — I mean generating free-cash flow.
Akshat Goenka
So you know so initially, I guess we can reduce leverage slightly. But over and above that, are there any new areas of expansion or the related that we’re looking at? So expansion, as I said, we are already operating at 75% to 80% capacity. The moment we cross — cross 90, 95 to 95, we will look at extension. We already have a year — we have already have year marked space in Dharu for the next phase. So we always do expect expansion in two phases, out of which one phase expansion has been done. And second phase expansion has been deferred because of the slowdown in the global market. So it will always be to the expansion would all be — and all of the expansion would be in actually insoluble sulfur only. We wouldn’t look outside of that into other new areas, which may be a little more promising.
Unidentified Participant
Yeah. So the next expansion, yes, would be in insoluble sulfur when we reach the capacity. After that, depending on the situation, we will analyze. Got it. Sir. And last question was towards the end of November, we had our last conference call where we had indicated that if the freight rates were actually normalizing and that assuming freight rates do actually normalize,
Akshat Goenka
About there was about a 600 basis-points impact on the margin because of freight. So it should go back to like normalized 25% at the operating level EBITDA level. Just wanted to understand as to between the end of November and December, what went wrong in our assumptions and do we expect to see this is, I mean 25% EBITDA number to come over in — by Q4 or Q1 of next year. So the thing went wrong in our assumption. Let me clarify that first. The freight rates have started coming down in November, but the actual booking of those sales which have saved in, say, the month of November and thereafter gets hit into our books in January and February in some cases. So therefore, it did not reflect in the freight rates that for Q3. Obviously, the fact that the freight rates have started coming down will have an impact in our Q4 results should have an impact in our Q4 results. Even though they have not come back to the level that they were last year, but yes, we are seeing that they are coming down. So if you could give us any give us an indication because obviously, there was a huge swing what I can give you is that the impact of freight cost if you look at — look at it from last year to current year is about INR6 crores, okay. Okay. That’s on — that’s on a quarterly basis or annual basis. Yeah. So the 64. So would we expect this to be normalized in Q4 effectively?
Unidentified Participant
I’m not saying that you’ll come back to the Q3 level, but somewhere in-between. They have started coming down, but they have not reached the level that they were in last year. Okay. And we aren’t able to actually pass-on the freight rates to freight rates are not possible in many, many places. So yes, there was we can do. Okay. I’ll just rejoin the queue. Thank you.
Operator
Thank you. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Garvida from Seven Island PMS. Please go-ahead.
Unidentified Participant
Hello, sir. I just wanted to — sorry to interrupt, ma’am. I would request you to please use your handset. Hello, am I clearly audible now? Yes sir, I’m looking for if you could give me the sales realization number for sulfur and for the sulfur asset as well. And if you could give me the raw-material prices cost as well. No, we do not give the breakup of raw-material cost because that’s something you know, which can be used by our competitors.
Akshat Goenka
So we don’t give that breakup. If you could give me the trend has that stabilized. I can tell — I can tell you the trend. The trend is that the per metric ton sales realization has come down a little bit from the preced quarter and has come down by about 8%, 9% from last year. No, raw-material cost I’m sorry, I will like to correct that. It’s about 5% from last year. Raw-material cost is 5% lower than the last self-realization is down 5% self-realization is 5%. And is it total self-realization or the self-realization per installible self-preserve? I’m talking about insolute sulfur realization.
Unidentified Participant
Okay. Okay, sir. And if you could give me the trends like a trend for the cost of the raw materials as well, sir, do we see that stabilizing going-forward?
Akshat Goenka
Yes. We hope that it stabilizes. Raw-material costs are more or less the same as they were last year. And though they are a little higher than the preceding year. But as I said earlier, currently, they appear to be stable at least for this quarter. Okay. Okay, sir. Thank you so much.
Operator
That’s all. Yeah. Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Madhar Rathi from Countercyclic Investments. Please go-ahead.
Unidentified Participant
Sir, thank you for the opportunity. Sir, I wanted to understand we are going for this anti-dumping duty on insoluble sulfur. But sir, we have seen that in the nylon cords as well as the polyester that are used in tires, these tyre manufacturers that import advanced licenses against exports. So what percentage do we think can of — if this advanced are given to sensor, so what — to what extent can we see impact of this antidumption duty on our overall revenue?
Anurag Jain
So let us see how it unloads. It’s very difficult to say whether the tire companies will use the advanced license. So there is some disturbance coming. Can you — I think there is some other audio in your team room, some disturbance is coming. I will repeat myself. It is very difficult to say how much the tire companies will use the advanced license for installible normally they import a much lot of other material where they would like to use the advanced license. As far as the impact on our sales price is concerned, we are unable to comment on that because we don’t know-how much anti-dump-in duty, if any would be imposed by the. And secondly , and there are two kind of prices in India, one is the prices from the non-dumping countries and one are the prices from the dumping countries. So it will be a mixture, so it will not be a uniform increase by that amount, it will be somewhere.
Unidentified Participant
Okay. Yes, also it gives you a broad idea. I think in the time we don’t get a official circular, it would be difficult for us to comment. Sir, so these tyre companies are using the recycled rubber more-and-more of recycled rubber. So does the insoluble sulfur content increase for the tires which are using higher percentage of recycled rubber or it’s on the similar level as it would be been if it’s a rubber kind of a tire? No, no, it is on the similar level. Okay. Okay, got it. And sir, just a final question was around the pricing front, sir, at where do we see, sir, what would be the trigger for increasing the margins or increasing this insoluble sulfur pricing or do we think that it’s dependent on — so any trigger that would lead to improvements in margin and when can we expect the same?
Akshat Goenka
So as far as margins or prices are concerned, obviously, the prices worldwide are dictated on a global competition basis. The rupee depreciation is good for us than we are exporting. We hope to get to have some better realization on account of anti-dumping duty if it comes. We hope to have some tailwinds on account of reduction in freight rate also, which will help us to increase our margins. So these are the two, three positive impacts that we are seeing that can come in the next six to seven months. We said that fleet rates were higher by INR6 crores in December quarter. So that would mean our EBITDA would increase probably to INR20 crore kind of a quarterly run-rate if the pricing is stable, other as volumes are similar. So can we expect that 5% Delta it comes if it comes? Sorry, please continue. I thought you had completed your question. No, sir, sir, that I think you got my question, sir. So I wanted to get yourself. So when we say 6 basis-point is what we had said earlier and that is true. If we compare it to the same quarter last year, right? Now if the freights were to come back, the average freights for us were to come back to the same levels as they were last year, yes, that is true. Our margins would have an impact of — impact in the range of 6%, 6 basis-points.
Unidentified Participant
Okay, got it. And sir, on the debt reduction front, sir, what kind of debt repayment do we expect over the next like maybe in FY ’25 — in FY ’25 and FY ’26? So our — our current repayment is around INR15 crores and by the end-of-the current year, our term-loan should be around INR34 crores. So that should be repaid in two years and some months got it. And sir, just like similar question on the previous part even sir, when we are generating so much free-cash flow, sir, why — and we have a good understanding about the tire industry or rubber chemical industry, why don’t we go for some other chemicals that will help us increase our addressable market as well as margins or at least increase our revenue and like take us from the stagnancy to a growth trajectory. So let us first stabilize our position here.
Akshat Goenka
Let us first be stable here, let us have enough heft in the balance sheet and then we will look about extension because one expansion is already lined-up, which we have not done because of the market situation. So it is something which we will look into maybe somewhere down the line, not at present. Okay. Okay, got it. Sir, thank you so much and all the best.
Operator
Yes. Thank you. The next question is from the line of Rohit Mehra from SK Securities. Please go-ahead. Hello. Am I audible? Yes, sir. I would request you to please use your handset, sir. Yeah, yeah.
Unidentified Participant
Okay. Yeah, thank you for the opportunity. So my first question is why is the demand scenario in Europe deteriorating and going-forward and when we expect to it to improve? Demand scenario where Europe, Europe it’s very difficult to say.
Akshat Goenka
You know the fact that it has deteriorated is correct but when it will improve because of a very fluid geopolitical situation as of now it’s very difficult to comment. I would not like to hazard against mainly because of you know there are some tariff issues now going on and there are other issues it will be difficult to comment on when it is going to. Okay, okay, okay. So regarding this only, which key regions within Europe are experiencing most significant demand suppression and what were the underlying causes see demand suppression in Europe is across EU. So non-EU countries are still doing a little better than EU countries again the cause of demand coming down post COVID is of course the Ukraine war, the resulting increase in gas prices, inflation, the geopolitical situation has been moving from one crisis to the other and all these things are there and you know the adverseness of the European countries in EU to protect new plants all these are coming together to contribute to the situation in Europe? Got it, got it. So the continuous problems are going on. And sorry, if I am repeating, I joined a little late. So during the quarter three, FY — quarter three FY ’25, have you witnessed volume growth? And by how much have the realization reduced? So volume has been lower than Q2, which is traditionally the case in Q3 because in December, international markets you know shut-down. But if you look at — if you compare it with Q3 of last year, it is marginally higher. Okay, got it, got it, sir. That’s it from my side.
Unidentified Participant
Thank you and all the best. Thank you.
Akshat Goenka
The next question is from the line of Sagshi Prata from Securities. Please go-ahead. Hello. Thank you for the opportunity. Sir, just one question. How is the North-America market doing? And have we received any new customer approvals for the same?
Unidentified Participant
Not in the current quarter, not in the current quarter, but in the last six months. This is something which continues and then we are in touch with them. We are hopeful of getting business later on, but nothing new has come in the current-period. Okay, understood. Thank you very much. Thank you.
Operator
A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Amit Saksena, who is an Individual Investor. Please go-ahead. Yeah.
Unidentified Participant
What would be the replacement cost of our assets, which in the book there is to around INR400 crores. I can’t hear you clearly, please. Can you repeat your question? MR. Amit, I would request you to please use your hand, sir. I hope it will be better now. Yes, marginally better.
Akshat Goenka
Yeah, sir, I was asking what will be the replacement cost of our asset which carry around INR400 crores in our book? And which assets are you talking about INR400 crores? I mean, I mean the plant, plant. I mean in this, what I mean to ask is the current capacity of close to 40,000 metric ton, what will be the — if you want to have it today what is something. This is a question I’m not prepared for. I don’t have the figures ready. We can come back to you on that.
Unidentified Participant
Okay, hello, okay. Yeah, yeah, yeah, yeah. We can come back to you. I mean, I was coming with a background in the past, you have said that the new capacity is not kind of ROC accretive, right? So with that background, I was coming with that question.
Akshat Goenka
So if you can — see, let me cross-check the figures what you are saying. Let me just have a look at them and I will come back to you. Okay. Okay. Okay. My second question was on the — we have guided for 50% PAT as dividends in the past and given the Share price currently, which looks quite attractive in terms of valuation, do you think it will be a better way to do a buyback rather than a dividend given dividends have high fraction cost in terms of tax?
Anurag Jain
While we have just undergone a — we have just undergone a demerger. We have a — we have reduced the price, the face value from INR10 to INR2. So buyback is not something which we are immediately looking at?
Unidentified Participant
Okay. Yeah. And sir, lastly, what will be the — what is the kind of maintenance capex that you have kind of yearly maintenance capex that we have around INR5 crores.
Operator
Okay. Okay. Thank you very much, sir. Yeah. Thank you. The next question is from the line of Devanshu, who is an Individual Investor. Please go-ahead.
Unidentified Participant
Yeah, hello, sir. Good evening. Sorry to interrupt, sir, your voice is not clear. I would request you please use your handset. Yeah, is it better,? Yeah. Hello. Yeah. So I have a couple of questions. So is the management exploring investing towards renewable energy and captive power? Is there any plans on the cards? So we have entered into a contract the company for captive power consumption so we should the company should start supplying for our Haryana plant in the month of April.
Akshat Goenka
So how much — how much capital are we looking to deploy towards this? This is around 3 megawatt capacity — installed capacity, three MWPI what is it called? I’m not sure the exact terminology or in DC terms and we sh we hope that we start receiving the power from it from the month of April, from April. Okay. Sir, second question I just want to understand, so at full capacity, would it be fair to assume our turnover would be about INR550 crores? Let me do the math for you. So around INR500 maybe INR500 odd. Okay. At current prices and can you give a sense of the situation from Europe right now. So would you say it’s bottomed-out or we still seeing volume pressures and declining? I think that it has bottomed-out a little. There are no further downward pressures we can see in the current quarter, then they were already earlier. So if you look at it from that perspective, I think it has bottomed-out as far as demand for installable sulfur is concerned. Sure. And when it comes to your Phase-2 expansion, how much of a capex would we be looking to deploy whenever the time comes and how much capacity would that be for? See, it will depend on when the line comes, right? So what are the — what are the prices then? So if I give you a figure now, it will not be appropriate. It will be appropriate to share the figure once we are sure that we are going for expansion.
Unidentified Participant
I’m just trying to get a ballpark number, sir.
Anurag Jain
See, we spent — one we spent about INR150 crores last-time. Of course, it included the cost for the acid plant, etc. And there is some additional civil work, but that could be indicator of how much is required, but it’s very difficult to say. Okay, sure, sure. And sir, just I just have a last question on the two-parts something to do with what the previous have been asking also, right? So in the FY ’24 annual report, it mentioned that the new structure and the standalone entity being a chemical business now will make it possible for opportunities of global alliances and partnerships that would have not been possible in a multi-operational structure earlier. So this is clearly something that the management has also thought about and written in annual report. So can you share some thought process plans on that? That is Part A and with Mr and Mr Arvind both now having multiple businesses, you know, I just wanted to get a sense of how the father son do is basically able to manage the bandwidth with so many things happening and how much of a focus they can have on that. Sorry, can you — can you please repeat the question?
Unidentified Participant
I lost track of it. Can you repeat the question? Yeah, yeah, sure. So the first part was regarding the global alliances and partnerships comment that was made in the annual report, right? So the new entity allows the chemical business allows you to focus only on only on chemicals and possibly look at extra opportunities. One. And second, Mr Akshata and Mr Arvind both are — have many, many businesses that are happening there’s AG Ventures also, which is — which is the — which is the website that going through and there are many things happening over there. So just wanted to get a sense of the bandwidth that the promoters will be able to give to this company or just a thought process on that?.
Akshat Goenka
So I’ll answer your question in two-ways. The first part of your question where the company will be open to looking at global alliances and mergers and various kinds of things. To put it bluntly, the first thing that has to happen for that is the core business needs to start performing better and that be reflected in the market cap because you know today it’s severely undervalued. And as you know, for any kind of partnership or whatever, market cap becomes a benchmark. So while things are being explored, I don’t see anything proper fructifying till, you know our market doesn’t — market cap doesn’t reflect its true value. The second question regarding the myself and Mr Arvind being involved in various ventures and all of these things. So these ventures have been there for the last six years and maybe 12, 14 years respectively. These are not new ventures that have recently started or that people have got diverted into. Each, as I said before, each of these ventures, each of these three ventures, whether it’s Duncan, whether it’s AG Ventures, the investment arm or whether it’s OCCL has its own management team, which is well-equipped to run the day-to-day business. And so I don’t see any challenge in this bandwidth issue.
Unidentified Participant
Sure. Thank you. I’m wishing you all the very best. Thank you.
Operator
The next question is from the line of Shah from Crystal Capital. Please go-ahead.
Unidentified Participant
Thank you for the opportunity. I have two questions. The first one is, what are the key factors driving the fall in realization? Is this competition driving price pressure or raw-material cost dynamics. So the fall in prices have mainly been because of the competition. It’s not about raw-material dynamics because raw materials have at all they have been firm rather than weak.
Akshat Goenka
So the pricing pressure is mainly on competition. As far as the cost pressure is there, it is — it has emanated mainly from freight rates. Okay. And sir, by the next one is how is the company planning to manage price pressure. Are the efforts to differentiate through product quality or other value-added services? See, the strategy everywhere is different. Obviously, as far as service is concerned, that is one of the prime selling proposition is our service and relationships that we build with the tire companies and that is what we are doing. In some places, we have had to, for example, in India, we have had to we were forced to go to the DGTR for anti-dumping because of the way the Chinese have Japanese have done their goods in India and our selling proposition mainly lies around our service and our keenness to serve our customers with the exact thing that they want. Even telemade products for them.
Operator
Okay. Thank you. Thank you. The next question is from the line of Raj Desai from RB Securities. Please go-ahead. Hi, sir. Thanks for taking my question. Good morning. So my first question was regarding China Sunshine has doubled its insoluble sulfur manufacturing capacities and has even announced the plan for further capital expenditures. So is their product quality similar to us and can we expect further to reduce our realizations?
Akshat Goenka
See, they have doubled the capacity much earlier. Yes, their quality is near to our quality today. But as I have answered earlier also to the level at which the Chinese manufacturers are many — are selling today, leave little scope for further price correction from them because I have one more question. So you know, are we kind of losing the market shares to our competitors or is the slowdown informly affecting the whole industry as in whole? No, the slowdown, number-one, again, slowdown is impacting the whole industry. Number two, we did lose market-share in India in the — actually compared to last year and that is why we had to go for anti-dumping because we did lose some market-share in India. And we did lose some market-share in Southeast Asia also because of China. Without losing quantities, we have lost some market-share in these two areas.
Unidentified Speaker
Got it. Got it, sir. That was very helpful, sir. That’s all from my side.
Operator
Okay. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments.
Akshat Goenka
I’d like to thank everyone for being part of this call. We hope you’ve answered your questions. If you need more information, please feel free-to contact us on Mr from SGA, our Investor Relation Advisor.
Operator
Thank you. On behalf of OCCL Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.