Rossari Biotech Ltd (ROSSARI) Q4 FY23 Earnings Concall Transcript

Rossari Biotech Ltd (NSE:ROSSARI) Q4 FY23 Earnings Concall dated May. 02, 2023.

Corporate Participants:

Aesha Shah — Investor Relations

Edward Menezes — Executive Chairman & Co-Founder

Sunil Chari — Managing Director & Co-Founder

Ketan Sablok — Group Chief Financial Officer

Manasi Nisal — Chief Financial Officer

Analysts:

Sanjesh Jain — ICICI Securities. — Analyst

Nitin Tiwari — YES Securities — Analyst

Aditya Chheda — InCred Asset Management — Analyst

Unidentified Participant — — Analyst

Aashish Upganlawar — InvesQ Investment Advisors — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the Rossari Biotech Limited Earnings Conference Call. [Operator Instructions] I now hand the conference over to Ms. Aesha Shah from CDR India. Thank you and over to you.

Aesha Shah — Investor Relations

Good evening, everyone, and thank you for joining us on Rossari Biotech Limited Q4 and FY ’23 earnings conference call. We have with us Mr. Edward Menezes, Promoter and Executive Chairman; Mr. Sunil Chari, Promoter and Managing Director; Mr. Ketan Sablok, Group Chief Financial Officer; and Ms. Manasi Nisal, Chief Financial Officer.

We will begin the call with the opening remarks from the management, following which we will have the forum open for a question-and-answer session.

Before we start, I would like to point out that some statements made in today’s call may be forward-looking in nature, and a disclaimer to this effect has been included in the earnings presentation shared with you earlier.

I would now like to invite Mr. Edward Menezes to make his opening remarks. Thank you, and over to you, sir.

Edward Menezes — Executive Chairman & Co-Founder

Thank you. Good evening, everyone, and thank you for joining us on our Q4 and FY

23 earnings call to discuss the operating and financial performance for the quarter. I hope you all had the opportunity to go through our results presentation, which provides details of our operational and financial performance.

We are pleased to report a healthy finish to the year with our standalone revenues increasing by 11.3% on a quarter-on-quarter basis. While we faced several challenges during the year, we believe we have successfully addressed them and are now better positioned to deliver consistent growth going forward. Throughout the past year, we faced significant volatility in the price of raw materials, which resulted in some business disruptions. However, by focusing on our inherent strengths, we were able to onboard several new customers which have helped us grow our revenues on a sequential basis. Despite the challenges presented by market fluctuations, we have continued to prioritize our mission of offering high quality sustainable products to our customers while remaining agile in response to changing market conditions.

Since our inception, we have remained dedicated to the advancement of sustainable and environmentally friendly chemicals. This sustainability focus is an integral part of our strategy and we have continuously seeded a range of eco-friendly products with several customers in our base industries such as HPPC, Textile. and AHN as well as in emerging sectors for us such as paints, paper, water treatment, agrochemicals and others. With the growing global demand for sustainable solutions, we are optimistic about commercializing our investments in this space growing forward.

Overall, our strong financial position, strengthened product portfolio, adequate capacity and other inherent strengths provide a solid foundation for us to deliver healthy financial and operational performance in the coming years. We remain committed to delivering long-term value to all our stakeholders while maintaining our market position as a top provider of intelligent and sustainable solutions.

With this, I would like to conclude my address, and I now hand it over to Mr. Chari for his comments.

Sunil Chari — Managing Director & Co-Founder

Thank you, Edward sir. Good evening and a warm namaste to everyone. Financial year 2023 has been a challenging year for our standalone business, with pressure on volumes and bargains. However, our team was able to navigate the situation and throughout year on a steady note. To a large extent, we not only managed to recoup our volumes but also improve our margins.

At a consolidated level, we are extremely pleased with the outcome of our acquisitions. We have given exceptional synergies in various aspects including R&D, product development, market research and personnel. Also, the chemical industry was facing a challenging period. The revenue and EBITDA for Unitop and Tristar since FY 2022 increased by 23% and 13% respectively, reaching INR763.2 crores and INR98.5 crores in FY 2023. These figures showcase the positive impact of our acquisitions and the successful integration of these companies into our business.

Here, I am happy to share that we have successfully acquired the final tranche of Tristar making it a wholly-owned subsidiary as of April 1, 2023. Additionally, we are on track to fully acquire Unitop in the upcoming fiscal year.

Looking ahead to the demand scenario in the upcoming fiscal year, we anticipate healthy growth in our HPPC segment due to new client additions, a growing product portfolio and expanding market reach, including export opportunities.

In the Textile segment, we continue to face demand uncertainty in the near term due to global factors. However, we remain optimistic that we will see an uptick in demand in the second half of FY ’24.

As for our AHN business, we are very bullish about its demand outlook and are confident in our ability to double its revenue over the next two, three years.

To sum up, we remain dedicated to providing long-term value to all our stakeholders while maintaining our market position as a leading provider of intelligent and sustainable solutions. We are confident in our ability to capitalize on emerging growth opportunities in the market as we continue to innovate and evolve.

On this note, I would now request Ketanji to share as his perspective.

Ketan Sablok — Group Chief Financial Officer

Thank you, Chari sir, and good evening, everyone. We’ve closed the year on a positive note with a consistent performance in quarter four. Y-o-Y for Q4 even though the revenues were down 7%, we were able to show improvement in gross margins and maintained our GP margins at 30%. Also the EBITDA grew by 4% maintaining a margin of around 13.4%.

For FY ’23, we have been able to consistently improve our performance and margins. We have ended the year with gross margins of 29% compared to 25% last year, and EBITDA of 13.5% versus 12.4% last year. Both Unitop and Tristar ended the year on a strong note, registering a top-line growth of over 20% Y-o-Y, which is a good margin. We’ve been able to synergize the business between the group companies very well, be it in operations, sales, R&D, and new business development. The impact of these synergies will further be visible in the years to come.

As mentioned by Chari sir, we have completed the acquisition of the additional 16% stake in Tristar, making it a 100% fully owned company as of April 12, ’23. We incurred a net adjusted out go of about INR17 crores for the final tranche, and it was funded through our internal accruals.

Rossari’s operational and balance sheet status remains strong and robust. As of March ’23, our net cash on a consolidated basis stayed at INR77 crores. With the normalization of both the overall macroeconomic landscape and the RM situation, we are confident in our ability to consistently deliver healthy performance across all our business verticals in the coming years.

Overall, we remain confident in our ability to deliver long-term value to our stakeholders, through our focus on profitability, innovation and growth.

On that note, I would request Mina’s to take you through the financials for the quarter post which, we will be happy to take questions from your side.

Manasi Nisal — Chief Financial Officer

Thank you, Ketan sir. Good evening, everyone. Let me provide you with a brief overview of the financial performance for the quarter and full year ended March 31, 2023. In terms of overall performance, the company’s revenue for the quarter amounted to INR406.5 crores, as against INR389.3 crores in Q3 FY ’23. On a standalone basis, the company’s revenue from operations for Q4 FY ’23 was INR263.6 crores as compared to INR236.9 crores in Q3 FY ’23.

Among the company’s business segments, HPPC generated revenues of INR1157 crores, which accounted for 70% of total company’s revenue. Following HPPC, the TSC business contributed INR373.2 crores, accounting for 23% of the total company’s revenue. AHN also contributed INR125.7 crores making up 7% of the company’s total revenue on a consolidated basis.

On a standalone basis, EBITDA stood at INR35.8 crores as against INR31.9 crores in Q3 FY ’23. PAT during the quarter stood at INR23.1 crores as against INR17.5 crores in Q3 FY ’23. On a consolidated basis EBITDA stood at INR54.6 crores as against INR54.2 crores in Q3 FY ’23. PAT during the quarter stood at INR29 crores as against INR25.7 crores in Q3 FY ’23.

On a full year basis, our consolidated revenue from operations in FY ’23 stood at INR1655.9 crores, up by 11.7% on Y-o-Y basis. Revenue from HPPC stood at INR476.3 crores contributing to 49% of revenue followed by TSC Business and INR373.2 crores contributing to 38% and AHN at INR125.7 crores contributing 13% of total revenue.

On a profitability front, EBITDA stood at INR122.7 crores as against INR122.8 crores in FY ’22. EBITDA margin stood at 12.6% [Phonetic]. Depreciation increased to INR62.9 crores owing to amortization of fair valuation on account of consolidation of subsidiary.

Interest cost during the year stood at INR22.3 crores, PAT during the year stood at INR107.3 crores as against INR97.7 crores in FY ’22.

From a balance sheet perspective, cash and cash equivalents during the fiscal stood at INR69.8 crores. Additionally, the net cash flow from operating activities for the year was a healthy INR152.4 crores.

On that note, I come to the end of my opening remarks and would request the moderator to open the forum for any questions that you may have. Thank you.

Questions and Answers:

Operator

Thank you. [Operator Instructions] We have the first question from the line of Sanjesh Jain from ICICI Securities. Please go ahead.

Sanjesh Jain — ICICI Securities. — Analyst

Hi, good evening, sir. Thanks for taking my question. First on the Unitop and the Tristar, one clarification and a question. For this quarter, it looks like the subsidiaries, which is Unitop and Tristar, had a 20% Y-o-Y decline in the sales. Now can you help us understand what is leading to such a sharp decline and this is despite the anticipation that the synergy benefit will drive the revenue growth faster. So what is the thing which is hurting the growth in the Unitop and the Tristar put together? That’s number one.

Number two for FY ’20, I think Ketan sir did mention that the like-to-like or I don’t know Unitop and Tristar had a 20% revenue growth for the year. So can you give us the Unitop number for FY ’23 similar way as we disclosed for the Tristar as well, that will be helpful and this 20% growth is on a like-to-like basis or how it is? These are the first two questions.

Sunil Chari — Managing Director & Co-Founder

Namaste, Sanjay Ji. This is Sunil Chari here. Tristar, as you told in the last earnings call also, the major exports was in Europe. And Europe has been affected after the Ukraine war. And that is why we had pressure on sales and pressure on margins. One thing also we need to see is there are some new customers developed by Rossari because of synergy benefits, which you also mentioned in the presentation and earlier in the call. And when we do sales from Tristar or Unitop to Rossari, in the consol it gets neutralized and there is no sales seen in Unitop or Tristar.

So now our request would be to see the company on a consolidated basis rather than standalone, Tristar and Unitop basis. Unitop also traditionally the first half is more stronger than the second half, which we always told in all our calls. And we expect the current quarter and the next quarter to be better than the earlier quarters.

Sanjesh Jain — ICICI Securities. — Analyst

No, no, when I am looking at standalone minus consol, I’m looking at third-party sales. So any which ways in the base also the inter-party transactions get negated. So on a like-to-like third party basis, it has declined by 20%. And I don’t think this will have entirely come from Tristar, because Tristar is only INR200 crores of revenue per annum. And how has been the Unitop performance in that sense? Can you explain that?

Sunil Chari — Managing Director & Co-Founder

I’ll answer before Ketan sir comes in. Unitop, now we were sourcing ethoxylate totally from outside. We were sourcing it from other companies. Now this sourcing has come from Unitop. And, again, because if you buy from outside, then there is no issues but if you buy from Unitop or Tristar, in the consolidated, that gets knocked off. Hence you see the lower sales because the material has come to you know — and because we were buying from outside and it has come into Rossari, it is not seen as sales of Rossari because it is coming from Unitop.

Sanjesh Jain — ICICI Securities. — Analyst

No, no, I understand that, Chari. Sir, I’m telling you, I’m talking about third party sales. That looks like decline and we thought that there is enough headroom within the capacity to meet the demand for the Rossari in that case. What do you — is it my right understanding that you are telling that we compromise or we sold less to third party to service more to Rossari parent, is that the right understanding?

Sunil Chari — Managing Director & Co-Founder

No, any new customer which is generated because of synergy and if it is a customer of Rossari, the sales happen through Rossari wherever it is manufactured, whether it is manufactured at Tristar or whether it is manufactured in Unitop.

Sanjesh Jain — ICICI Securities. — Analyst

Okay, okay. That means you’re telling me that Rossari lot of sales in the standalone what we look at is also because of Unitop and Tristar and it’s not purely on a like-to-like basis to compare that standalone is delivering that growth. Is that a fair understanding?

Sunil Chari — Managing Director & Co-Founder

No, not standalone. Because what we were doing is if there was a rip-off [Phonetic] rate and we were buying it from outside and selling it to our customers, now we’re buying this from Unitop. So it is not that standalone is not growing. Standalone is growing. Standalone has grown. But the purchase has happened from Unitop and that is knocked off in the consol.

Sanjesh Jain — ICICI Securities. — Analyst

No, no, I understand that Chari sir. What you are telling, I understand. I am telling it would have been true even for the base year also, right? For the last year Q4 FY ’22.

Sunil Chari — Managing Director & Co-Founder

No, no, last year [Foreign Speech]

Sanjesh Jain — ICICI Securities. — Analyst

[Foreign Speech] despite you paying, the UI [Phonetic] has eased and even then our sales on a like-to-like basis will decline.

Sunil Chari — Managing Director & Co-Founder

I did not understand your question. [Foreign Speech] if you are buying a product from outside, we started buying from Unitop.

Sanjesh Jain — ICICI Securities. — Analyst

That is fine. That is fine. It doesn’t impact the mathematics of it.

Sunil Chari — Managing Director & Co-Founder

No, no. For example, if you see our textile business is bigger one. But the standalone business is still strong in HPPC and textile. The raw material has come from Unitop and Tristar.

Sanjesh Jain — ICICI Securities. — Analyst

Let me take this offline. I think I will take this offline.

Sunil Chari — Managing Director & Co-Founder

Okay.

Sanjesh Jain — ICICI Securities. — Analyst

Second question is, it continues, what is the revenue/EBITDA for Unitop for FY ’23?

Ketan Sablok — Group Chief Financial Officer

FY ’23, Sanjesh, Unitop’s revenue is INR554 crores.

Sanjesh Jain — ICICI Securities. — Analyst

Okay.

Ketan Sablok — Group Chief Financial Officer

EBITDA is about INR81 crores.

Sanjesh Jain — ICICI Securities. — Analyst

INR81 crores. And Ketan sir, in your opening remarks you talked about 20% Y-o-Y growth in the acquisition company. Can you help us understand whether you are talking on a like-to-like basis or there is lesser revenue being recognized because we bought it in the mid of the year last year, right?

Ketan Sablok — Group Chief Financial Officer

What I said was on a like-to-like basis. In the accounts, it will be for 7 months but just for giving you a flavor of the growth that has come in, it is on a like-to-like basis. So Unitop’s revenue as I said INR554 crores in the current year, it was about INR454 crores in last full year.

Sanjesh Jain — ICICI Securities. — Analyst

Okay. Fair enough. Second on the — I know there has been too much of a price volatility in FY ’23 for us to appreciate the performance. Can you help us understand what was the volume growth in FY ’23 to understand how have we done for FY ’23? That’s number one.

And number two is on the gross profit. I think sequentially there is a sharp drop in the raw material prices. Even mathematically the margin should have gone up if the gross profit per kg was protected, but what we are seeing is the sequential decline in the margin. Was there any inventory losses because of a very steep fall or why there is a decline versus the growth in the margin?

Ketan Sablok — Group Chief Financial Officer

Sanjesh sir, as we explained in the last call, our raw material prices have fallen if we compare ’21/’22 to ’22/’23. Similarly, if raw material prices have fallen, then the finished goods prices would have fallen. Now on a like-to-like basis, Unitop [Foreign Speech] 20% we have grown in spite of falling of raw material prices. And so you can see the growth in Unitop, which [Foreign Speech] Unitop has grown and there would be at least 10%, 15% fall in raw material prices.

[Foreign Speech]

Sanjesh Jain — ICICI Securities. — Analyst

[Foreign Speech] This 20% growth is for the full year?

Ketan Sablok — Group Chief Financial Officer

[Foreign Speech]

Sanjesh Jain — ICICI Securities. — Analyst

[Foreign Speech] My question was more on the margin and FY ’23 volumes.

Ketan Sablok — Group Chief Financial Officer

[Foreign Speech] Right, right. [Foreign Speech] volumes you are not able to work out because product which changes from quarter-to-quarter, product-to-product, division-to-division, so volumes you are never able to measure in [Foreign Speech]. And measuring volumes quarter-to-quarter or even year-on-year quarter-to-quarter is not very easy for us.

Sanjesh Jain — ICICI Securities. — Analyst

Fair enough. And on the margin, why the margins have declined despite a fall in the raw material prices? I think mathematically the margins [Foreign Speech] and then you got the benefit of raw material pricing falling and coming into your margin. So why there is a decline in the margins at the gross profit level on the sequential basis?

Ketan Sablok — Group Chief Financial Officer

Sanjesh here let me try to explain this. See a few quarters back we had started doing a lot of cross-selling and synergizing the sales operations across the group. So in the last quarter and the quarter before that, we have started to route in lot of sales of Tristar and Unitop through the Rossari network of customers and distributors.

So that as we have said, we want to move these customers onto the Rossari brand

And start doing that brand from this year itself so that whenever we bring all the companies under one umbrella we are able to use the Rossari brand and see to it the customers know about that and that is what is happening now quarter-on-quarter. Now as most of these sales are getting billed now through Rossari, part of the margins are getting booked at Rossari and part of the margins are getting booked at the subsidiary level because the transfer is happening at a transfer-facing arm’s length basis.

So the request would be that the ideal way to now start looking at the numbers is on a consolidated level because certain part of the margins will remain in RBL and certain part of the margin will remain in the subsidiary. So we should look at the consolidated numbers to understand the entire margin profile of all the companies.

And the other reason, also that’s not the gross margin, but quarter-on-quarter on a consolidated level, you should see EBITDAs have fallen slightly because in this quarter, since we bought out — of course, the stake was bought out post in April, but we had done the full and final settlement of some of the senior directors in Tristar, and that one time substantial impact is also factored into the other expenses, which has also impacted the EBITDA for this quarter not showing but it remains stagnant at about INR54 crores, INR55 crores.

Sanjesh Jain — ICICI Securities. — Analyst

[Foreign Speech]

Ketan Sablok — Group Chief Financial Officer

I think it was about INR2.5 crores, INR3 crores we had given to couple of the characters as their full and final settlement.

Sanjesh Jain — ICICI Securities. — Analyst

Which is not part of the payment, which is part of the opex?

Ketan Sablok — Group Chief Financial Officer

Yes.

Sanjesh Jain — ICICI Securities. — Analyst

Got it. And Ketan sir on the same note, even sequentially on a consolidated basis the gross profit margin has come off by 40 bps. It’s not as high as it is in the standalone but here also the margins have come off by 40 bps. I think you have a scope for margin expansion just because of the arithmetic.

Ketan Sablok — Group Chief Financial Officer

Yes, Sanjesh, see in Tristar we have it significantly on the export side and there I think export margins in Tristar has been quite strong. But with the EuropeCo [Phonetic] exports coming down significantly, that’s kind of impacting the overall gross margins. So once the exports in Tristar picks up I think we should see in some of these margin improvements coming through.

Sanjesh Jain — ICICI Securities. — Analyst

Got it, got it. And just two last questions from my side. One on the textile side, is worst is behind because I can see sequentially we have grown by 10%. And how should we see textile because we still sound slightly cautious on the textile side. Well, the numbers have sequentially been very good.

And second on the animal health and nutrition. It looks like suddenly firing. What is driving such a strong growth in the AHN business?

Ketan Sablok — Group Chief Financial Officer

So the textile segment, Sanjesh, is still facing some headwind. While we had a better quarter this year, but we are still being cautious because we are seeing the market is still quite sluggish. We were able to add some new products during this quarter, which helped us do a little better than Q3. Now what we understand from the customers in the market and that’s what we would like to currently go with is that the demand should start picking up from the second half of this year. So that’s what the understanding is as of now. Textile had been acting a little crazy over the last 1 year, so every time we think that if the worst is over, it really doesn’t happen that. But currently this is what the understanding is.

And on the AHN front, I think we’ve ended the year on a strong note, almost INR81.26 crores [Phonetic]. We expect this business now to maintain its growth trajectory. We’ve added some new customers, we’ve added new products, so we’ve gone into the vitamins and the minerals phase quite aggressively now. We’re also setting up a small capex for the vitamin premix setup at Dahej. And that’s still a few months away, but we anticipate that once that comes through then in effect from the later half of Q2 and Q3, we should see some good sales in the second half of this year with this capex coming through.

So we are quite bullish on the AHN.

Sanjesh Jain — ICICI Securities. — Analyst

Got it. Thanks for answering all the questions and best of luck for the coming quarters.

Sunil Chari — Managing Director & Co-Founder

Sanjesh?

Sanjesh Jain — ICICI Securities. — Analyst

[Foreign Speech]

Sunil Chari — Managing Director & Co-Founder

[Foreign Speech] so year-on-year Tristar even after phenol prices and phenoxyethanol prices coming down, on a year-on-year basis we have grown 27% from INR164 crores, like-on-like basis, IINR220.9 crores.

Sanjesh Jain — ICICI Securities. — Analyst

No, I was talking more from the — [Foreign Speech]

Sunil Chari — Managing Director & Co-Founder

In spite of Europe going down, we have been able to get some good customers who were new customers, which Rossari has brought in. And because part of the profits would have gone to Rossari because sales were Rossari, hence with the margin coming down [Phonetic]. But even after falling finished goods prices, we have done well at Tristar.

Sanjesh Jain — ICICI Securities. — Analyst

Sunil sir, I completely appreciate the yearly performance. It looks very strong. I’m telling exit looks on a weaker footing because at least the number talks about a decline for the Q4. I completely take your point for the full year. We have done fantastic. I am not debating that. I am not debating on that part of the point. Thank you very much.

Operator

Thank you. We have the next question from the line of Nitin Tiwari from YES Securities. Please go ahead.

Nitin Tiwari — YES Securities — Analyst

Good evening sir. Thank you for the opportunity. I hope I’m audible. Sir, my question is related to the HPPC segment. So you highlighted that textiles, they are still facing headwinds and you’ve given a positive commentary on AHN. So how is the HPPC segment looking for FY ’24? And because in the past four quarters, at least, we have seen a declining trend of revenue. So my first query was that. Secondly, why is that [Indecipherable] on a standalone basis, the numbers look sort of steady for the segment. But when consolidated with the subsidiary, there is a decline that we see consistently across the past four quarters. And related to that, you had earlier alluded to basically a large customer now not being part of our portfolio. So have we completely recovered that loss of revenue, or we are still in the process?

Ketan Sablok — Group Chief Financial Officer

HPPC, as we had said, that we have lost one large customer who was there on our — or in our numbers last quarter, early part of last quarter. Current quarter, we had no sales from that customer. So that’s one of the reasons why we had not seen the growth in HPPC as we had described [Phonetic]. But however, I think we’ve been able to maintain her sales number inspite of the absence of a large account.

Going forward, I think to cover up this we’ve added a large number of customers in the detergent industry. So large number of smaller customers are getting now added in that space. Also we are working in some of the new segments of paints and paper. So one of the large MNCs that we started now working with is HUL and a lot of the supplier ingredients for the detergents have started, who already worked — started working with them in two of their plant. I think over the year we will add a few more plants going forward.

And, of course, with the agro — one of the agro piece also growing, I think with a couple of quarters we should be able to cover up this entire piece of loss that we have incurred.

Sunil Chari — Managing Director & Co-Founder

To add here to Ketan sir, I am Chari here. Our HPPC now on a consol base is 70% of sales and textile is 23% and AHN is 8%. So as we said that we have to look at it on a consolidated basis. Two years back, we were 50% in HPPC of the total sales, now we are at 70% and we expect this to still become better.

Nitin Tiwari — YES Securities — Analyst

Great. Sir, thanks for that answer actually for that guidance. Just wanted to have this understanding around HPPC segment in terms of the segmentation if we look at, so although you said that we should be looking at it from a consolidated perspective, but nonetheless, why is that on a standalone basis, the segment looks steady, but when we consolidate with the subsidiary accounts, then there is a decline that we see — sharper decline rather that we see, like, you know, on a sequential basis, as well as on a Y-o-Y basis. So just wanted to understand that, that how is the same business segment getting different traction in standalone entity and the subsidiary? And correct my understanding if it’s wrong from me.

Ketan Sablok — Group Chief Financial Officer

No, no, you are right. If we consolidated the HPPC, we have quarter-on-quarter seen a slight decline. And as we have said that mainly because of Q4 doing a lower exports for Tristar, that has — that is what is expected in the HPPC segment quarter-on-quarter.

Nitin Tiwari — YES Securities — Analyst

Okay. So the large customer that we lost was with the standalone entity, right? And we have grown despite that large customer not being there in the fourth quarter. And so does that imply that you have practically made up for all the lost revenues or the accounts that you [Indecipherable] you did with not so small detergent manufacturers [Indecipherable]?

Ketan Sablok — Group Chief Financial Officer

Yes, so this quarter we have — see, in Q3 also, that customer was there only for about, I thinka month or month and a half, we only had a few shipment. But if you see our last year number, then you will get probably a better idea. Q4 of last year had a significantly larger chunk of that sales.

Nitin Tiwari — YES Securities — Analyst

Okay, got it. I’ll get back in the queue.

Operator

We have the next question from the line of Aditya Chheda from InCred Asset Management. Please go ahead.

Aditya Chheda — InCred Asset Management — Analyst

Hi, Aditya here from InCred. Couple of questions. One, on the interest cost, the cash cost [Indecipherable]. What would that be for ’24? Going ahead, how much of that is to be accounted for?

Ketan Sablok — Group Chief Financial Officer

Can you come again, we didn’t quite get your question. Something on interest cost you asked.

Aditya Chheda — InCred Asset Management — Analyst

Yes, so the interest cost which we reported for this year has been INR22 crores. Part of that is an accounting entity for consolidating the M&A companies. So what would that be for the subsequent years for ’24?

Ketan Sablok — Group Chief Financial Officer

’24 would be, as of now it will come down because currently we have about INR74 crores of loan in our books, so INR20 crores of working capital. So sequentially it will come down. We’ve given that bifurcation. That’s why we’ve given that bifurcation in our presentation. of what is the normal interest cost and what the interest cost is because of this bifurcation consideration. So for the next year, I think as of now we should be — [Indecipherable] FY ’24. It will be slightly lower than that what it is in the current year. I don’t have the exact number now.

Aditya Chheda — InCred Asset Management — Analyst

Got it. Next, could you share the capacity utilization across the company and for Tristar and Unitop you have separately?

Ketan Sablok — Group Chief Financial Officer

So, on an overall company level, I think we are at utilization of about 50%, 55% across most of our plants.

Aditya Chheda — InCred Asset Management — Analyst

Got it. And if I look forward for FY ’24, so you mentioned in your opening remarks, but most of it is — this is on the growth drivers across segments. So could you allude to what should be the growth drivers going ahead for all the three different segments and if there are any product specific growth drivers or customer specific growth drivers in terms of wallet share which you are sort of looking forward to and if you can share on what are the key growth drivers you are looking for FY ’24?

Edward Menezes — Executive Chairman & Co-Founder

Hi, I am Edward here. So, in various verticals we have elaborate plans for the next couple of years. One of the important verticals that we want to grow and we have been mentioning that we want to double this in the next two to three years is the animal health and nutrition segment. Like Ketan sir has mentioned in the opening remarks, that a small capex is being done here and we are putting in place a premix plant. This pre-mix plant will help us improve our quality and also make the product line, a continuous product line for vitamins, for mineral mixes, as well as for enzymes.

Then in the animal health and nutrition, we’ve already developed a range of products for the aqua business and the business development is the next step. The business development, this vertical has already started. We have introduced glycerides and esters for gut health and to reduce antibiotics, another big blockbuster for us. And we’ve also installed a granulation facility at the plant. This is primarily done to increase our efficiency of granulation as well as a product differentiation.

In the HPPC segment, in addition to the Anti-redeposition product for powder, we developed an excellent product — Anti-redeposition product for liquid detergent because the normal ARDs as we call the Anti-redeposition product, they are not compatible with liquid detergent. Here we have developed a product and we have got good traction for these products.

In the water treatment chemicals in HPPC, we focused on the textile industry. in the CETP for the textile industry and yielded very good results for us. We’ve also entered the technical textile coating industry. Business development is in full swing and it has given us very good traction.

In the coating chemicals that we do in HPPC for paints, paper, ceramics as well as pharma tablet coating, we have introduced a few new products. which are highly modified, which have better scrub properties. And we’ve seen good enthusiasm from the paint industry for this product.

In the pharma tablet coating, we have received FDA approval for this product and production is likely to start in the coming quarter.

If you look at the textiles, synergistically we have started manufacturing the silicone oils as well as the block silicones in-house and this has increased flexibility for Rossari and also made us more competitive here.

In the yarn lubricant segment for silicones, we have developed a product for yarn lubricant which is a silicone wax and a small capex for a sonolator or homogenizing equipment is in place.

In film [Phonetic] finishes also there is a steady progress. We started this about a year ago and we have made good progress in the [Indecipherable] polypropylene and polyamide space. We have — a new product line has been introduced in the additives for regenerated cellulose, which is Lyocell and we have started this business development and acquired a few companies there.

Similarly in the agro space, focus is on development of emulsifiers for new trends where a combination of technicals is used. And one very exciting business that we have entered is the Silicon Supervators [Phonetics]. And we have also started doing some capex here to scale up. So there are many other initiatives that we have taken, but I’ve given you a small gist of what we are doing and how the business development is going.

Aditya Chheda — InCred Asset Management — Analyst

Fair. Adding to another question which I had, so we mentioned about choosing better margin product. Now with customers such as HUL coming in where you know predominantly a premium player in terms of detergents versus someone like a Baddi, which we used to cater. How are you looking at this market where do you think the premiumization has already played out or it would sort of continue to play out and that would help you to sort of deliver higher realization products going ahead, if you have any comments on that or any outlook on that?

Edward Menezes — Executive Chairman & Co-Founder

The ingredients that we manufacture, most of the raw materials and the technologies are own. And therefore we definitely have a cost advantage over other manufacturers. And we hope that we will make decent margins with the ingredients to the detergent industry. Earlier actually our hands were tied and we could not go country-wise or even to the Southeast Asian countries but with the new situation where now we are free to sell our ingredients to all India as well as to the neighboring countries, you would have seen that we have been doing well even though we lost the large customer.

So in addition to that, the margins also would be more here because we’ve been able to launch a battery of products here, whereas in the previous regime we had only one product and we were restricted to that product.

Aditya Chheda — InCred Asset Management — Analyst

Got it. And last question from my end. So for Rossari standalone, the asset turns were as high as 6 times, 7 times. This is just on the reported gross block numbers and the subsidiary have a little lower asset turn. So on a consol basis, given the growth profile is very similar across all the three segments, is 4 times a good asset turn number to work with on a consol number going ahead with what the gross block we have currently 4 times to 5 times or what is the number you are looking at going ahead?

Ketan Sablok — Group Chief Financial Officer

Yes, I think currently for the next year we can go with a number of 4 times to 5 times but our plan is that as the business brands up, we do not plan to add much in way of gross block in the next at least two to three years. So if we are able to wrap up the business as planned, I think this asset turn number, we should see a good improvement; probably two years down the line, we should see a good improvement on this.

Aditya Chheda — InCred Asset Management — Analyst

Got it. So the reason I was asking is that we are already at INR450 crores of gross block and at say 4 times, 4.5 times we’d be at the INR2,000 crores top line, which we are envisaging. So can you help with the — what would be the capex for next two years if you have any number INR40 crores, INR50 crores is the number for ’24 and ’25?

Ketan Sablok — Group Chief Financial Officer

Ideally, it should be around that number or at least for next year we will be around that number.

Aditya Chheda — InCred Asset Management — Analyst

Got it, got it, thanks. That’s it from my end. Thanks.

Operator

[Operator Instructions] We have the next question from the line of S. M. Kumar, an Investor, please go ahead.

Unidentified Participant — — Analyst

Sir, my question regarding the beta managed enzyme, monobactam [Phonetic], like that any kind of enzyme product can we expect next one year?

Sunil Chari — Managing Director & Co-Founder

For the enzyme product, actually we are working on a product which is a bio product basically, which will be used as a surfactant. So we are using — we are working on this kind of a product and we are excited that we will be able to introduce this product in a few months time.

Unidentified Participant — — Analyst

Okay. Thank you, sir, thank you. Thanks a lot.

Operator

[Operator Instructions] We have the next question from the line of Nitin Tiwari from YES Securities. Please go ahead.

Nitin Tiwari — YES Securities — Analyst

Thank you for the opportunity again, sir. Sir, can you just repeat the revenue and the EBITDA number for Unitop and Tristar separately?

Ketan Sablok — Group Chief Financial Officer

Yes, so Unitop this year was INR554 crores. And Tristar was INR209 crores.

Nitin Tiwari — YES Securities — Analyst

And the EBITDA for Unitop was, I think, INR81 crores, right? So what was the same for Tristar?

Ketan Sablok — Group Chief Financial Officer

INR81 crores and Tristar was INR18 crores.

Nitin Tiwari — YES Securities — Analyst

And the same figures for last year, sir?

Ketan Sablok — Group Chief Financial Officer

Last full year Unitop was INR464 crores and Tristar was like INR164 crores.

Nitin Tiwari — YES Securities — Analyst

And EBITDA numbers for both of them?

Ketan Sablok — Group Chief Financial Officer

Unitop was INR69 crores. And Tristar was INR17 crores.

Nitin Tiwari — YES Securities — Analyst

All right. Thank you. Thank you so much. [Operator Instructions] We have the next question from the line of Aashish Upganlawar from InvesQ Investment Advisors. Please go ahead.

Aashish Upganlawar — InvesQ Investment Advisors — Analyst

Yes, thanks for this. Sir, to gauge whatever is happening based on the commentary that we have heard from you throughout this call, there are different moving parts and different segments and even subsidiaries and your standalone. So to sum up everything, how do we read into the coming year FY ’24? And should we — because — there’s lot of volatility in the raw material cost and the pricing and stuff. So looking at only the top line in terms of numbers or EBITDA margins, it becomes difficult to make a picture of the company in terms of gross. We are stuck around at INR100 crores of bottom line or INR100 crores, INR110 crores for quite some time now. So what should we expect over the coming couple of years from you?

Sunil Chari — Managing Director & Co-Founder

Yes, namaste, it’s Chari. So what we did is, you know, we had the loss of one big customer which we had recouped. The focus seems to be growth in HPPC. As you know, we are into four chemistries with surfactant, acrylic, enzyme and silicones. The surfactant chemistry seems to be something which is picking up steam every passing day, exports is something which is, you know, picking speed every passing year. If you see our exports last year was INR264 crores and this year was INR380 crores. And the HPPC anyways has gone from INR966 crores to INR1156 crores.

So this year we would see HPPC increasing further. Because finally we were at INR373 crores and this year we expect not really big growth. AHN should do very well this year. So on a whole, what is that we are looking at is not top line. What is that we are not looking at is EBITDA percentage. What is we are looking at is EBITDA as an absolute amount. So our internal target is 20% growth in EBITDA over the consol EBITDA which was there. That is the focus area. [Foreign Speech] we are not focusing.

Last year, we had a lot of tax in terms of textile industry did not do well, the Ukraine war created lot of issues, we lost a big customer, and generally the FG prices and the raw material prices came down. But there is still a swing going up and down, up and down in the raw materials based on supply and demand of raw materials.

Consequently, the prices of raw materials, our finished goods are going up and down also. We learned around 2021, 2022, and 2023. that we will not do any forward positions, we will not do any long contracts with our customers, and we hold to this position that we will not do this. We have been always prudent that we do not do very big positions in government areas, and if you see your inventory levels and working up to levels, ours are very, very good and very disciplined, which have been there for the last 25 years.

Similarly, forex we have never hedged, and we will never hedge also. In terms of operations, this year we want to merge our companies. You know, Tristar is already a 100% owned subsidiary. Unitop will be in August and we’ll start the process of mergers. And hopefully by March 31, 2024, we’ll be one consolidated entry instead of Rossario having two subsidiaries. The growth from HPPC segment in various industries would continue to do well; agro, home and personal care and then performance chemicals. All these three segments we see a healthy demand outlook for the coming financial year.

AHN has a smaller base and it is now at INR125 crores. So we should see the highest growth as a percentage in the AHN this year.

Aashish Upganlawar — InvesQ Investment Advisors — Analyst

Okay So basically we are looking at 20% EBITDA alone, that’s the bottom line and given that there is no additional capex and depreciation, then everything should be under control. So you should be gunning for a 25% kind of bottom line growth this year.

Ketan Sablok — Group Chief Financial Officer

20% is something which we have projected in our own budget.

Aashish Upganlawar — InvesQ Investment Advisors — Analyst

Okay, sir, all the best. Thank you so much.

Operator

Thank you. Ladies and gentlemen, that is the last question. I would now like to hand the floor back to the management for closing comments. Please go ahead.

Edward Menezes — Executive Chairman & Co-Founder

So thank you.

Ketan Sablok — Group Chief Financial Officer

I hope we have been able to answer all your questions satisfactorily. Should you need any further clarifications or would like to know more about the company, please feel free to contact our team or CDR India. Thank you once again for taking the time to join us on this call. Good evening to all.

Operator

[Operator Closing Remarks]