Sigachi Industries Ltd (SIGACHI) Q3 FY23 Earnings Concall Transcript

Sigachi Industries Ltd (NSE:SIGACHI) Q3 FY23 Earnings Concall dated Feb. 1, 2023.

Corporate Participants:

Anuj Sonpal — Investor Relations

Amit Raj Sinha — Managing Director & Chief Executive Officer

O. Subbarami Reddy — Chief Financial Officer

Analysts:

Praful Siddharth — Shravas Capital — Analyst

Munjal Shah — AMA Services Private Limited — Analyst

Raj — — Analyst

Saket Kapoor — Kapoor and Company — Analyst

Rajesh Jain — NB Investments — Analyst

Shasvath Gokhale — Capitalized Investment — Analyst

Kushal — Individual Investor — Analyst

Manav Vijay — Deep Financial Consultants — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the Q3 FY ’23 Earnings Conference Call of Sigachi Industries Limited. [Operator Instructions]

I now hand the conference over to Mr. Anuj Sonpal from Valorem Advisors. Thank you and over to you, sir.

Anuj Sonpal — Investor Relations

Thank you. Good evening, everyone, and a very warm welcome to you all. My name is Anuj Sonpal from Valorem Advisors. We represent the Investor Relations of Sigachi Industries Limited. On behalf of the company, I’d like to thank you all for participating in the company’s earnings call for the third quarter and nine months ended of financial year 2023.

Before we begin, let me mention a short cautionary statement. Some of the statements made in today’s earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ from those anticipated. Such statements are based on management’s beliefs as well as assumptions made by and information currently available to management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions.

The purpose of today’s earnings call is purely to educate and bring awareness about the company’s fundamental business and financial quarter under review. Let me now introduce you to the management participating with us in today’s earnings call and hand it over to them for opening remarks. We have with us Mr. Amit Raj Sinha, Managing Director and Chief Executive Officer; and Mr. O. S. Reddy, Chief Financial Officer.

Without any further delay, I request Mr. Amit Raj Sinha to start with his opening remarks. Thank you and over to you, sir.

Amit Raj Sinha — Managing Director & Chief Executive Officer

Thank you, Anuj. A very good evening, everybody. It’s a pleasure to welcome you to the earnings conference call for the third quarter and nine months for financial year 2023. Firstly, I hope everyone is keeping safe and doing well. In the interest of some of the people who are new to the company, let me first start by giving a brief overview of the company, after which Mr. O. S. Reddy, our CFO, will brief you on the financial performance for the quarter under review.

Sigachi was incorporated in the year 1989, and today we are one the leading manufacturers of microcrystalline cellulose in the world. Our company manufacturers high quality Cellulose-based excipients, which predominantly find usage in the pharmaceutical supplement and the food industry. The company has created a niche in manufacturing highly innovative, pre-formulated excipients and 60 plus widely used varieties of excipients of international quality standards, apart from customized solutions.

From a state-of-the-art R&D facility, we ensure continuous innovation to efficiently meet evolving customer demands. In our manufacturing facilities, we have two of them in Gujarat and one in Telangana, from where we ensure supply chain reliability to our customers in India and across the globe. Our total capacities of these three facilities is more than 13,800 metric ton per annum, which we are further enhancing through our ongoing capex plans to 2,000 metric ton per annum.

We at Sigachi have a global sales and distribution network and export to more than 45 different countries across Asia, Australia, American Continent, EU region, and Middle East. In the recent months, the company has also ventured into certain new business initiatives of OTC and branded generic products and human nutritional products as well.

Now, I request our CFO to give you a brief on the financial performance, after which I’ll give you the operational highlights for the quarter. Over to you, O. S. Reddy.

O. Subbarami Reddy — Chief Financial Officer

Yeah. Thank you, Mr. Sinha, and good evening, everyone. Let me first brief you on the financial performance for the third quarter of financial year 2023. The operational income for the quarter was around INR69 crores, representing an increase of about 5% year-on-year. EBITDA reported was INR14 crores, an increase of approximately 10% year-on-year and the EBITDA margin stood at 20.35%. Net profit reported was around INR10 crores, an increase of 3% year-on-year, while the PAT margin percentage was 14.24%.

For the nine months ended for the financial year 2023, the operational income for nine months FY ’23 stood approximately INR230 crores, which was a significant increase of 29% year-on-year. The operating EBITDA stood at INR46.5 crores, seeing a growth of 21% year-on-year. EBITDA margins were 20.25%, net profit stood at around INR36 crores, which grew by 27.5%, while the PAT margin stood at 15.77%.

Now, I hand over the call back to our MD to give you the operational highlights. Over to you, sir.

Amit Raj Sinha — Managing Director & Chief Executive Officer

Thank you, Mr. Reddy. On the operational front, the revenue growth in the quarter under review was primarily driven by realization growth of 17% and a volume growth in the range of 2% on a year-on-year basis. Our focus on high margin yielding product mix and cost-effective manufacturing processes, effective management of inventory resulted in increase of EBITDA and profitability.

During the quarter, the company was successful in being able to pass on increased freight and raw material prices on to the customers. The company is constantly thriving to improve upon its R&D capabilities, cost-effective manufacturing processes, and thereby remaining a manufacturer of choice with highest quality standards.

With this, we are now open, and open the floor for the question-and-answer session.

Questions and Answers:

Operator

Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Praful Siddharth from Shravas Capital. Please go ahead.

Praful Siddharth — Shravas Capital — Analyst

Hello, sir. Thank you for taking my questions. So my first question is on your fundraise which you are doing. So we are doing approximately INR300 crores for expansion into intermediates and APIs, so could you please throw some more light on what exactly are we looking at with these new investments?

Amit Raj Sinha — Managing Director & Chief Executive Officer

Thanks a lot, Praful. At this moment, we are actively exploring options to see which way we can diversify beyond the excipients range and still have the same customer base. So naturally, that is the API and the intermediates. So we are looking to see various options available. We still don’t have anything firmed up, but we shall keep you posted on things as and when they are in the [Indecipherable] stage.

Praful Siddharth — Shravas Capital — Analyst

Got it, sir. Got it. So my second question is, how do you see the demand side on the end-user segments. So do you see any slowdown in terms of deferment of orders or anything of that sort, especially in the Pharma segment?

Amit Raj Sinha — Managing Director & Chief Executive Officer

So Praful, what we have seen in the last couple of months is that there has been a slight slowdown in our demand understanding from the developed markets, that’s primarily EU and the US region. So we believe that it is kind of temporary and hopefully we will have the fourth quarter being better than the third quarter.

Praful Siddharth — Shravas Capital — Analyst

Right. So do you see any volumes regrowth in the next couple of quarters or are we going to be all right?

Amit Raj Sinha — Managing Director & Chief Executive Officer

So, it’s difficult to make out if there will be a degrowth, but we are working to see how we can get back our volumes what we lost in the Q3.

Praful Siddharth — Shravas Capital — Analyst

Sure, got it, sir. Thank you. Thank you so much.

Amit Raj Sinha — Managing Director & Chief Executive Officer

Thank you, Praful.

Operator

Thank you. [Operator Instructions] The next question is from the line of Munjal Shah from AMA Services Private Limited. Please go ahead.

Munjal Shah — AMA Services Private Limited — Analyst

Hello?

Operator

Yes, please go ahead.

Munjal Shah — AMA Services Private Limited — Analyst

Am I audible?

Operator

Yes, you are.

Munjal Shah — AMA Services Private Limited — Analyst

Yes, thank you. Thank you for giving me an opportunity. Sir, there are a couple of questions. Sir, firstly, based on the raising of funding for the pharma in the intermediate facility or the plans to move into that range. So this — the entire industry of API basically is to cluster and it’s very highly competitive. So any — so I would like to know your thought process of venturing into the same.

Sir, my second question is related to, sir, the trademarks and I think the copy rights and trade marks of R&D are given by the company to the promoters. That is Mr. Sinha’s Trust. I would like to understand the mindset behind the same because if the trademark and the copy rights remain with the company, I think the intangible value of the company would also increase because that is the strength of the entire R&D. So, I would like to know the thought of management on the same? So these are my two questions. Thank you.

Amit Raj Sinha — Managing Director & Chief Executive Officer

So on — Mr. Munjal, on your first question on the API are what we believe is, of course, it is a competitive market. There is no market which is without competition. However, the market, which caters to the developed segments like the US or the EU Region, and which of course have a US FDA approval, they are a niche in themselves and there there is better level of realization and better levels of margins which come in.

At this moment, our look out is to see that we have such facilities in our fold and that is our current focus. So we don’t really would — we would not really like to compete among the masses and be looking at competing locally, rather we will be looking at competing on an international levels among the USFDA group of — set of manufacturers.

In terms of synergies, as of now excipients, these excipients self to the formulators. So we have developed markets. We have the US and the EU and the Australian region where we are selling a reasonable bit of our excipients. What we see as synergies is that the same set of customers would be our base when we venture out into the APIs because formulation, the customer remain the same, it is just that we’re adding in one more chemistry, that is it. The compliance, the regulatory needs, everything remains the same. It is just one more chemistry being added. So I see this as a very good synergy. In terms of the trademark, Mr. Reddy, would you be kind enough to just take this answer?

O. Subbarami Reddy — Chief Financial Officer

Yes, sir. Yeah, good evening, Mr. Munjal. This is the trademark. Even, Amit Raj Sinha, he has spent his personnel time and efforts even before joining company and after joining company. And he has developed. Earlier as a commodity, the company was selling this product, but after them he has different [Indecipherable] different, brands he has developed and then it was given for free of cost for the company till 2025.

2025 onwards, there was the royalty for 10 years up to 2035. This was the thought behind that. Even at the time of branding itself, it was agreed that the company has to give it back whenever the promoter, Amit Raj Sinha, whenever there is a need. It was a understanding and it was given at for free. It is completely the hard work and our thought process of Mr. Amit Raj Sinha behind this.

Munjal Shah — AMA Services Private Limited — Analyst

Okay. So, I would just — I just have a count, like I would have one more point here. So basically the company — Sigachi belongs to Mr. Sinha and the family, right? So basically anything which is developed for the company if it stays inside the company it would be beneficial for all the stakeholders involved in the — stakeholders involved in the company. So, because, like basis the trademarks and on R&D if it remains with the promoter trust and not in the company, I think this will be very — a negative for the minority shareholders because till 2025, yes, the promoters have agreed that the company can use it without any royalty payment. But I think it would be more beneficial for the company as a whole that the trademarks and copyrights stays with the company is because Mr. Sinha is the promoter of the company, right? Mr. Sinha is not — maybe it’s not — they are not employed by the company, they are the promoters of the company. So I think, I would request the management if If they can have a — like they can think on the same once again.

And also regarding the royalty I requested to the management that if they can have royalty as a percentage of profits and not the part of the sales it could be very beneficial on the overall basis, so that is a suggestion from my end.

And one more question, I just — I would like to chip in is that we are also getting into human nutrition and the OTC business. So are both these business also synergistic to our excipient business? Or I hope we are not getting into any diversified field where suddenly the focus can be shifted from our basic products. So, I would like to have your thought process.

O. Subbarami Reddy — Chief Financial Officer

[Speech Overlap] Your suggestion moving into the profits, that anyway that is anyway under consideration and then we will announce it at appropriate time. And even before for the same thing — branding and all, before joining into Sigachi itself he has worked — lot of time he has spent. He has lot of thought process and he as developed different, different this brands to the company. That’s why it was agreed at that time by the management. And anyway, these — your suggestion of shifting from top-line to bottom-line, anyway that is under consideration. We will announce it at appropriate time.

And this your second question, this food and nutrition. Anyway, some certain portion of — excipient is anyway involved I request MD sir to throw some light there.

Amit Raj Sinha — Managing Director & Chief Executive Officer

So, Mr. Munjal in terms of diversification to the Healthcare segment. If you completely now have a look at what is our intention, I mean for the fund raise, our intention is to grow beyond excipients and get into synergistic APIs. And I’m sure you would realize that if one is already having a portfolio of excipients and APIs, it would be just as logical to be having brands which are in a B2C space, which is the branded generic space.

So, it is natural that we come to a stage where we are able to give our excipients and APIs for job work and get it done at facilities where there is enough capacity available. And when we have a distribution system in place, we just kind of have consumption happening in the B2C space, so that’s very logical. In terms of nutritional, it is the same logic because there are ingredients what we are making which go into nutritional space and they kind of get consumed by every other food player as a nutrition additive. So it becomes logical that these are diversification with our — with literally no negatives, no downside. So these are good diversification to get into because the pharma, food and nutrition and the branded generic healthcare is just so related. I hope I managed to answer your question, sir.

Munjal Shah — AMA Services Private Limited — Analyst

Okay sir, thank you. Thank you for you answering my questions patiently. Sir, one more last question if it’s fine with you.

Amit Raj Sinha — Managing Director & Chief Executive Officer

Sure, sure. Sir, please.

Munjal Shah — AMA Services Private Limited — Analyst

Thank you. So basically when we are getting into the human nutrition or the OTC business as well as we’re getting into API and intermediate, so will these divisions be or maybe the business will be margin accretive to our excipients business or we are focusing more on volume — volume-based business. So if you can just throw some light on the same?

Amit Raj Sinha — Managing Director & Chief Executive Officer

Yes, so, if you look at each of these divisions individually, they might probably be maybe 100 basis points plus or minus around our current margin of 21% and 22%. But if I look at it as cumulative — cumulatively as a vertically integrated pharmaceutical player, the overall benefits in margin, the customer perception of Sigachi would add in much more than what it would be on a individual division basis. So, cumulatively together would be far more, sir. I believe over the years as each of these divisions gain ground and penetrate deeper into the market we should be staring at far better margins than what we’re currently actually having.

Munjal Shah — AMA Services Private Limited — Analyst

Okay, okay. And sir, then we, and we keep on the guidance of growing at 20% maybe for a couple of years coming down the line till we get the new capex in place. I think, the both plants in Gujarat, Dahej and Jhagadia, probably will start contributing from Q2 FY ’24, if I’m not mistaken, sir?

Amit Raj Sinha — Managing Director & Chief Executive Officer

So, the Q2 would be the commissioning and trials, sir. We probably have couple of orders, but our firm belief is that we’ll be able to match quality standards from the end of September or maybe the first of October. So my estimate is that first of October we should start seeing this on the balance sheet. Q2 is the trial and commissioning phase where we will have production, but we’re not really looking at having them on the balance sheet. Maybe we will have to see that there are certain norms which are there in terms of compliance for pharmaceutical products. So once those compliance are in place, we see that happening by probably by September. So by September end we should start having these on the balance sheet, sir.

And of course, the growth, I don’t foresee the growth getting lower than a 25% year-on-year, sir. That is our prime focus at this moment and defending the EBITDA margins at this moment is the prime focus. There’s nothing else.

Munjal Shah — AMA Services Private Limited — Analyst

Okay, sir, just one last thing. So, can we considered Q2 as the quarterly run rate or the Q3 would be, because till the new capacities come in, I believe our — all the capacities are fully utilized. So, I don’t know if we have a chance of volume growth. So can we consider Q2 to be consistent for Q4, Q1, and Q2 in the forthcoming quarters or Q3 revenue would be the consistent run rate?

Amit Raj Sinha — Managing Director & Chief Executive Officer

So, I believe that Q3 of FY ’24 would show us the capex turning into sale, sir. First of October onwards we should be able to add into the new capex cycle turning into sales.

Munjal Shah — AMA Services Private Limited — Analyst

Okay

Amit Raj Sinha — Managing Director & Chief Executive Officer

Did I answer your question, sir?

Munjal Shah — AMA Services Private Limited — Analyst

Sir, basically I wanted to know regarding Q4 FY ’23, Q1 FY ’24 and Q2 FY ’24. When I am considering all these quarters, so can we take a run rate of INR80 crores a quarter to be reasonable or it would be around INR70 odd crores?

Amit Raj Sinha — Managing Director & Chief Executive Officer

Sir, INR80 crore should be very fair, sir. We have — in the Q2 of FY ’23, we have already done a top line of INR84 crore. So keeping a run-rate of INR80 crore over the next three quarters is a very fair thing — is a very fair estimate from our side, sir.

Munjal Shah — AMA Services Private Limited — Analyst

Okay sir, thank you. Thank you so much for answering my questions and I’ll come back in the queue. All the best for the forthcoming quarter. Thank you, sir.

Amit Raj Sinha — Managing Director & Chief Executive Officer

Thank you very much, sir. Thank you.

Operator

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

Raj — — Analyst

Yeah, looking at your expansion. So how do you think the peak sales would be if we expand to 21,000 tons?

Amit Raj Sinha — Managing Director & Chief Executive Officer

So, if you could just amplify the question, sir, peak sales of 21,000 ton, what is it that you’re looking at, I mean, as an answer?

Raj — — Analyst

Hello. Yes, so I’m talking about — you talked about expanding your capacities 21,000 tons. So on the expanded side, how do you think the sales figure would be?

Amit Raj Sinha — Managing Director & Chief Executive Officer

So, if we just look at our average realization what we are having as on-date, and we probably add in maybe or a certain number of years we add in capacity utilization of 90%. I believe it will be a minimum at that level if not more, because realizations as the go will only get better because of the product mix.

Raj — — Analyst

All right, understood, understood. And if we take five years from now. So how far do you aspire to take the company to — Sigachi Industries?

Amit Raj Sinha — Managing Director & Chief Executive Officer

Sir, that’s a very long call, but my belief is that [Speech Overlap] No, I understand Mr. Raj. I appreciate your thoughts and your long outlook. We believe that investors should come in for the long-haul. Our prime focus is that, like I spoke to Mr. Munjal, my prime focus is that we continue to grow at a minimum year-on year growth of 25% if not more while defending our EBITDA margins, sir. So, you should see that it could be slight diversification — related diversification, either more markets, better products, vertical integration, all these things coming in. And that should what is should be able to defend us in terms of our margins and in terms of our — the place where we play.

Raj — — Analyst

All right, understood. Thank you. All the best, sir.

Amit Raj Sinha — Managing Director & Chief Executive Officer

Thank you, sir.

O. Subbarami Reddy — Chief Financial Officer

Thank you, Raj.

Operator

Thank you. The next question is from the line of Saket Kapoor from Kapoor and Company. Please go ahead.

Saket Kapoor — Kapoor and Company — Analyst

[Foreign Speech]

Amit Raj Sinha — Managing Director & Chief Executive Officer

[Foreign Speech]

Saket Kapoor — Kapoor and Company — Analyst

Sir, firstly about the volume loss, sir. What have been the loss in volume and the key reason for the same for this quarter?

Amit Raj Sinha — Managing Director & Chief Executive Officer

So, volume loss, I’ll have to dig deeper

Saket Kapoor — Kapoor and Company — Analyst

Do you have the volume in place. I only had the topline difference, do you have the volume loss?

O. Subbarami Reddy — Chief Financial Officer

For nine months if we see, this is overall 10,750 metric tons is the installed capacity and around 10,000 we have produced and sold, around 9,869. And that is — overall our utilization is 91%. And when we see the unit wise, that is at Dahej 85% and Jhagadia it is 97%, and Hyderabad it is 94%. Okay, in nine months period it is to fine, sir. Q3 is concerned, there is little drop is there in volumes. But we hope in Q4 again we’ll regain and then we do — or we’ll perform well.

Saket Kapoor — Kapoor and Company — Analyst

Sir, on a nine-month basis?

Amit Raj Sinha — Managing Director & Chief Executive Officer

Nine-month basis it is — 91% is the utilization.

Saket Kapoor — Kapoor and Company — Analyst

Yes, so on a nine-0month basis is 91% and the dip happened for the third quarter. So what was the utilizing level [Speech Overlap]

Amit Raj Sinha — Managing Director & Chief Executive Officer

The only thing is had it been there, it would have increased to 94% to 95% like that. It is maybe another 2%.

Saket Kapoor — Kapoor and Company — Analyst

That is 3%, 4% only, sir?

Amit Raj Sinha — Managing Director & Chief Executive Officer

Yes, yes, that’s all.

Saket Kapoor — Kapoor and Company — Analyst

Okay. But the revenue dip is more than that when, I think 82% to 69%.

Amit Raj Sinha — Managing Director & Chief Executive Officer

Yeah, we are seeing in Q2 there is a reasonable, very good hike is there, growth is there, almost INR85 crores we have done in terms of revenue and first quarter also we’ve done — we have done well. And only — Q3 we have done only around INR69 crores. A small dip when we compare to Q2.

Saket Kapoor — Kapoor and Company — Analyst

What was the reason, sir? Why we’re turnover lower, sir?

Amit Raj Sinha — Managing Director & Chief Executive Officer

Yeah, this is — market sentiments itself was not good for the third quarter. Normally, when we compare every year also, Q3 is less when we compare to Q2 and Q4. This is the normal scenario and this time because of this global sentiments are not good, that is one of the reason.

Saket Kapoor — Kapoor and Company — Analyst

[Speech Overlap] Sir, if I may speak, I believe that there are two reasons for the dip. Of course, what the CFO spoke on the overall the sentiments, wherein the discretionary spends of nutraceutical or the nutritional products have been restricted in the developed markets, primarily EU and US. The second reason is that in the second quarter we had the ocean freight rate abnormally high, and around 65% to 70% of our produce is exported out and our contract terms are mostly CIF. So our revenue had incorporated the increased ocean freight as well. Now, over the last three, four months we have had a drop-in the ocean freight component and there as well there is slight reduction in our effective CIF because ocean freight components have dropped. This two could be prime reasons attributable to the drop-in the Q3, sir?

Amit Raj Sinha — Managing Director & Chief Executive Officer

Correct, right.

Saket Kapoor — Kapoor and Company — Analyst

Thank you, sir. But when we look at your employee cost, employee cost benefit have gone up Q-on-Q from INR8.29 crore to INR10 crores, so what explains this increase in the employee cost?

O. Subbarami Reddy — Chief Financial Officer

Yes, the reason for this is we have deployed field staff for OTC and generics and the revenue is yet to generate, and because of this the employee cost, employee benefit has increased. And also we have one segment, operational and management segment wherein the cost of manpower is around 60%, 63%. And that business has increased. Normally, when we compare to the total overall income, the percentage of O&M income would be around 6%, this time it is around 15%. Means, around INR90 lakhs there is an increase in this quarter. Because of that also the manpower cost will increase. The portion of our O&M income increases because that is a predominantly it is — it consisting of manpower cost only, 63%. Otherwise, in manufacturing sector our regular listing around 10% is there. But for that, the manpower cost would be higher. That is one reason and the field staff already we have deployed for OTC and generics because of that.

Amit Raj Sinha — Managing Director & Chief Executive Officer

Mr. Saket, I’ll just add. In the last quarter, we have commenced a O&M contract with ONGC Dahej. Sigachi’s team have been deployed at ONGC site Dahej for O&M, and there we have added around 120 odd people team members there and those revenues have just started trickling in. That’s another reason for the people cost showing reasonably higher than what it was in the last quarter.

Saket Kapoor — Kapoor and Company — Analyst

Sir, which company you mentioned, I’m not getting the name?

Amit Raj Sinha — Managing Director & Chief Executive Officer

Sir, Oil and Natural Gas Corporation, ONGC.

Saket Kapoor — Kapoor and Company — Analyst

And what is the scope of work for ONGC we are doing? Is it similar — I think so, sir, I was looking for the number for the O&M work we do for Gujarat Alkali’s also. So, if you could give the breakup, sir.

Amit Raj Sinha — Managing Director & Chief Executive Officer

So, Gujarat Alkali’s, we are doing a reasonable level of different O&M for the plants, stable bleaching powder, hydrogen hydride, chloromethane, sodium chlorate. These are what we do at GSEL. Now as ONGC, the contract has just commenced and we’re still settling down, sir. Exact scope, we will be able to tell you when things firm up, sir. Right now, we haven’t yet firmed up, but the contract has commenced. We should be able to update you at probably the next earning call, sir.

Saket Kapoor — Kapoor and Company — Analyst

Okay and GSEL contribution to the O&M part, where the utilization level at 100% for the quarter for the unit we have done work for Gujarat Alkali?

Amit Raj Sinha — Managing Director & Chief Executive Officer

Sir, 100%, I don’t think so because there again the production is dependent on the market acceptance of those products. For stable bleaching powder the market demand is very good, then automatically it peaks. Whereas chloromethane and hydrogen hydride, they are still in commissioning stage. It was — the plant was inaugurated by our Honorable PM. So both of these plants are still in commissioning stage and the production has still not reached its peak. In fact, it has not even started it’s 20%, 30% capacity utilization. It’s just at a trial stage. Once it starts speaking, we should have far better numbers in our O&M, sir.

Saket Kapoor — Kapoor and Company — Analyst

Correct. But O&M [Foreign Speech] sir, for this quarter and for the nine months.

Amit Raj Sinha — Managing Director & Chief Executive Officer

CFO, do we have with an O&M breakup in our revenue?

O. Subbarami Reddy — Chief Financial Officer

Yes, yes, yes.

Saket Kapoor — Kapoor and Company — Analyst

And my next question was regarding the preferential allotment partner. Sinha Ji, you were mentioning that the commitment — there will be commercial production of the unit in the third quarter of next financial year and the preferential allotment I think so is, we will be raising the capital, there is a deadline of 18 months. So the allotment will — the shares will be allotted before the second quarter itself?

Amit Raj Sinha — Managing Director & Chief Executive Officer

Sir, it is 18 months. So share warrants have been issued, so that makes it to 25% upfront payments, sir. And balance 75% is over the 18-month cycle. So, of course, the commercial production will commence way before the 18 months expires. But both of these are not really related, sir.

Saket Kapoor — Kapoor and Company — Analyst

Okay. So, can you explain then sir, what is the purpose of this fund raising when you’re coming up with a new capacity and a diversification, and for that you have your internal accruals?

Amit Raj Sinha — Managing Director & Chief Executive Officer

Yeah, that’s right. [Foreign Speech] that the deployment of funds for this is a for possible acquisition. We are looking at opportunities in the market which synergizes with our product portfolio at this moment, keeping our customer base the same. So on that account, we are looking at certain opportunities and we are still in discussion and active look out. As and when we have things firmed up, we will come back to the markets, we will come back for the regulatory approval and we will update the stock exchange, sir.

Saket Kapoor — Kapoor and Company — Analyst

Okay, so okay. So that is a work in progress. And you were mentioning that…

Amit Raj Sinha — Managing Director & Chief Executive Officer

Yeah, that is a work in progress. Absolutely, sir.

Saket Kapoor — Kapoor and Company — Analyst

CFO, sir, you are mentioning…

O. Subbarami Reddy — Chief Financial Officer

Yeah, Saket you have asked about this O&M income. For Q3, we have achieved INR6.8 crores and for the nine months period we had achieved INR17.67 crore. Whereas for the last year — full year, we have achieved around INR13.4 crores.

Saket Kapoor — Kapoor and Company — Analyst

Okay, so this year we will be ending somewhere around INR26 crore, INR27 crore easily?

O. Subbarami Reddy — Chief Financial Officer

Yeah, yeah. But that is futuristic, but we hope we will achieve it.

Saket Kapoor — Kapoor and Company — Analyst

Okay. And last one more point, sir. How will the profile of the company look post the expansion which you have envisaged todays, how will the revenue mix will be looking from the different segments. So if you could give us some color? And lastly, also sir, how did you build this books, sir? I think we have a lot number of allotees when we see the list. So how was — what process did we follow, sir, in building up this book — in getting these people as the preferred allotee, sir? Only to understand the process, sir. Barring these two big funds, there were even people getting 5,000 shares, so would like to understand — what was the process followed for the 60 lakh warrants which were issued to around 63 individuals. Sir, I’m on line, sir?

Amit Raj Sinha — Managing Director & Chief Executive Officer

Sir, in terms of process — a process being followed, I believe that there were only two sectors, sir, the promoters and the non-promoters. In terms of non-promoters, we had a select group and among them it was between them to decide to see who is it that would be coming in and who would be the allotee. So it on them to see how they broke it up between themselves. It was no specific structure followed, sir. The structure was followed for the promoter side, but of course, on the promoter side, it was internal to them. It was — there was no specific structure which was followed, sir.

In terms of which way are — the company would look like when all these divisions grow and expand, I believe we — what we are heading towards is, we are laying the seeds for being a healthcare conglomerate, sir, having expertise in the excipient chemistry, building on expertise or by virtue of acquisition in API chemistry, developing a distribution system for the Healthcare segment, B2C segment. And, of course, the O&M, which also on the B2B part. On the B2B part, we also have the related diversification of food and nutrition. I believe the biggest among all these verticals would be the Pharma vertical which probably contribute 60% to 70% of our revenue couple of years down the line, balance 30% of our revenue would come in from all other verticals. I hope I answered your question, sir.

Operator

Thank you

Amit Raj Sinha — Managing Director & Chief Executive Officer

Thank you.

Operator

Mr. Kapoor, request you to join the queue for any follow-up. [Operator Instructions] Thank you. The next question is from the line of Rajesh Jain from NB Investments. Please go ahead.

Rajesh Jain — NB Investments — Analyst

Good evening. Sir, I had two, three questions. The first one is the, the reason for the delay in commissioning of our plant at Dahej?

Amit Raj Sinha — Managing Director & Chief Executive Officer

Yes, so we have had approximately a two to three months delay what we are seeing. One of the primary reasons for the delay is certain civil works, civil contractor and certain equipment being received as per schedule — not being as per schedule because of certain big equipment’s which — equipment’s like [Indecipherable] where that can only be built once the equipment is positioned. I mean, the civil work and only be completed once the equipment is in position. So on account of that, we are staring at a two to three months delay, sir. That is one of the prime reasons.

Rajesh Jain — NB Investments — Analyst

Okay. The second is regarding the CCS plant. What is the status of the approval from the pollution board?

Amit Raj Sinha — Managing Director & Chief Executive Officer

Sir, we have submitted the environmental clearance application. We believe that we should get the EC within the next six months. So I believe that in another six months we should be in a position to commence civil works, because while the EC approval comes in, all the groundwork for layout approval and every other non-pollution approval would be in place. The moment the EC documentation is through, we would immediately commence with our civil work. And of course, every other planning which entails — which is entailed in a project planning.

Rajesh Jain — NB Investments — Analyst

Okay. So as and when you get the approval, how many months it would take to commission the plant?

Amit Raj Sinha — Managing Director & Chief Executive Officer

Sir, my estimate is that on the optimistic side it would be at 15 months. On the pessimistic side it would be an 18-month cycle, sir, not more than that.

Rajesh Jain — NB Investments — Analyst

Okay. And my last question is a both this new ventures, the premix as well as the OTC product, we were expecting some contribution during the current financial year. If you could give us the latest status of these two ventures?

Amit Raj Sinha — Managing Director & Chief Executive Officer

Yes, sir. So in the current financial year, sir, we believe that they should add up to couple of crores at this moment. These couple of crores are primarily on account of certain trial lots, certain trial dispatches, certain trial orders coming in from certain select customers. We are still sampling a lot of other customers. We are pushing aggressively for sales in certain new markets because here the customer profile changes. So I believe that both of these independently would add up to couple of crores in the current financial year, sir.

Rajesh Jain — NB Investments — Analyst

Sir, when we had spoken, maybe not in the previous call, maybe six months back, it was given that around INR10 crore to INR15 crores or so revenue would come from the premix. So can that be expected during the current financial year?

Amit Raj Sinha — Managing Director & Chief Executive Officer

No, sir, it was our overestimation when we spoke of that. I agree with you because I recollect that we had estimated a reasonable positive. However, probably on account of certain international scenarios certain markets are rather dull. So we believe that it should only be couple of crores on each of these segments towards the end of this financial year, sir.

Rajesh Jain — NB Investments — Analyst

Okay, fair enough. But based on whatever the initial reaction and also getting the customer’s reaction, how much we can expect in the next financial year for these two divisions, sir?

Amit Raj Sinha — Managing Director & Chief Executive Officer

Sir, on the positive side, we are looking at, at least a INR10 crore to INR12 crore on each of these verticals, sir.

Rajesh Jain — NB Investments — Analyst

So, irrespective of these two divisions contribution, still you are confident of achieving 20% growth on the overall company’s revenues from next year?

Amit Raj Sinha — Managing Director & Chief Executive Officer

Yes, sir, absolutely. Absolutely, sir. That remains our prime focus, and we believe we can because we will have new capacities coming into our core product and that should give us a jump.

Rajesh Jain — NB Investments — Analyst

Thank you very much, sir. And wish you all the best.

Amit Raj Sinha — Managing Director & Chief Executive Officer

Thank you very much, Rajesh, sir.

O. Subbarami Reddy — Chief Financial Officer

Thank you.

Operator

Thank you. The next question is from the line of Shasvath Gokhale from Capitalized Investments. Please go ahead.

Shasvath Gokhale — Capitalized Investment — Analyst

Hello. So last — last means H1, our volume was 6,800 metric ton, and for this nine-month we have volume of 9,800 metric ton. So in last concall you mentioned that you have, means in FY ’23 we will do somewhere around 14,000 metric ton. So still we are on that guidance or would you revise?

Amit Raj Sinha — Managing Director & Chief Executive Officer

14,000 that is yearly capacity that is right now it is available, and post expansion that would be 21,000 metric tons capacity. That is the overall capacity available.

Shasvath Gokhale — Capitalized Investment — Analyst

Okay, so what will be the full-year volume guidance for FY ’23 and maybe for FY ’24?

Amit Raj Sinha — Managing Director & Chief Executive Officer

Yeah, maybe that is that is futuristic, but somewhere around 13,000 change would be there, nearly 14,000, 13,000 and odd will be there.

Shasvath Gokhale — Capitalized Investment — Analyst

That’s helpful. Thank you, sir.

Amit Raj Sinha — Managing Director & Chief Executive Officer

Thank you, sir. Thank you.

Operator

Thank you. The next question is from the line of Praful Siddharth from Shravas Capital. Please go ahead.

Praful Siddharth — Shravas Capital — Analyst

Hello, sir. Thank you for the follow-up. So since you said that we will be targeting developed markets for APIs and intermediates, so would the focus be more on the generic side of the API or do you look at things spanning out here?

Amit Raj Sinha — Managing Director & Chief Executive Officer

So, sir, actually that’s a very good question. In the beginning, we would want to take care of our cost structure by focusing on something like the generics. But as we go deeper into whatever company we look at acquiring, our objective would be to see how we have the regulated system come in. So to see that we have a DMF filed with the US FDA and probably see how we can gradually focus on better ones like ANDAs, because that is where the actual — the cream lies.

Praful Siddharth — Shravas Capital — Analyst

Right, right. So, but what do you think would our right to when be in this generics market because it’s already very — the competition intensity is very high. So what would be our right to win, because we got to know build on our cost structures very effectively to actually win the markets, so where do you see this playing out– how do you see this playing out?

Amit Raj Sinha — Managing Director & Chief Executive Officer

If I can understand your question correctly, you’re asking me where do you see yourself in the market, is that so?

Praful Siddharth — Shravas Capital — Analyst

Yes, sir. I mean, we need to compete in terms of cost right, because US market you got to win based on your cost. So do you think we can get to that position?

Amit Raj Sinha — Managing Director & Chief Executive Officer

Yes, sir, there is technological competence available. It is very much possible, sir. There are players who are making 28%, 30% EBITDA in the developed markets. So nothing actually stops us. However, when we look to acquire a plant, you can’t really start of running a full marathon on the first day, you want to gradually build it up. So, I believe that starting of the generic, taking care of the cost structure and gradually transforming yourself to be able to put in a DMF application and getting it approved, having it audited would set us apart.

Praful Siddharth — Shravas Capital — Analyst

Got it, got it. So what do you think we are spreading ourselves [Indecipherable] because we have already entered into OTC, healthcare, nutrition and now APIs and intermediates.

Amit Raj Sinha — Managing Director & Chief Executive Officer

So, I believe that when the company is small and flexible, there is a lot possible. It becomes big, rigid, it gets difficult. The downside of getting into all of this is an absolute nil. There is no downside. There is no negative. I don’t really have to fear about any kind of risk coming in. It is just a complementary product lines, same customer or a same raw material have been there. So I believe that these are very good things and that will only make us stronger by this kind of diversification, sir.

Praful Siddharth — Shravas Capital — Analyst

Sure, sure. Thank you so much, sir. Thank you.

Amit Raj Sinha — Managing Director & Chief Executive Officer

Thank you so much, Mr. Praful.

Operator

Thank you. The next question is from the line of Kushal an Individual Investor. Please go ahead.

Kushal — Individual Investor — Analyst

Hello.

Operator

Sir, line is unmuted, yes. Please proceed with your question.

Kushal — Individual Investor — Analyst

Just wanted to know all about your manufacturing facilities…

Operator

Sir, may I request you to use the handset. Sir, you are not very clear.

Kushal — Individual Investor — Analyst

Yeah, there are in, Dahej, Jhagadia and Hyderabad business facilities right?

Hello

Operator

Sir, you still not audible.

O. Subbarami Reddy — Chief Financial Officer

Three facilities are there manufacturing facilities.

Kushal — Individual Investor — Analyst

Yeah, on the nutrition side [Indecipherable] plant, where it is.

Amit Raj Sinha — Managing Director & Chief Executive Officer

The news don’t add up. That is in Hyderabad. I’m sorry sir. We are not able to make out what is being spoken.

Operator

Kushal, may I request to use the handset, sir. If you’re using your phones or you on a speaker, please use the handset mode.

Kushal — Individual Investor — Analyst

Hello. Now, am I audible?

Operator

This is better. Please go ahead.

Kushal — Individual Investor — Analyst

Yeah, just on the manufacturing facility side on Dahej, Jhagadia, and Hyderabad there are three facilities. And one more facility is leased out on the Nutrition segment for 9,000 metric ton capacity, it’s already there, right?

Amit Raj Sinha — Managing Director & Chief Executive Officer

Yes. This is already there, sir.

Kushal — Individual Investor — Analyst

And regarding the products when I Google, are the products similar to Herbalife or [Indecipherable] or in Karnataka our plant proteins like the type of products?

Amit Raj Sinha — Managing Director & Chief Executive Officer

No, sir. These are more finished product in the nutritional line. These are nutritional premixes based on label claims of the finished formulators in the nutritional or in the food segment.

Operator

Thank you.

Amit Raj Sinha — Managing Director & Chief Executive Officer

These are nutritional premixes, sir.

Operator

Thank you. The next question is from the line of Manav Vijay from Deep Financial Consultants. Please go ahead.

Manav Vijay — Deep Financial Consultants — Analyst

Yes. Thank you, sir. Am I audible?

Operator

Yes.

Manav Vijay — Deep Financial Consultants — Analyst

Thank you. Sir, the first question is regarding the topline growth that you have reported on a Y-o-Y basis as to 5%. Now the breakup that you have provided for the 5% topline growth of 17% volume growth and a 2% pricing growth. This is what is mentioned in the PPT and what was spoken by you. So I just could not — I could not correlate these two things that while the top end is 5%, how can we — how can give a 17% volume growth and a 2% pricing growth?

O. Subbarami Reddy — Chief Financial Officer

Yeah, can you please repeat your question.

Manav Vijay — Deep Financial Consultants — Analyst

Okay. My question is on a Y-o-Y basis, you have reported a 5% topline growth. Am I right?

O. Subbarami Reddy — Chief Financial Officer

Yes, yes.

Manav Vijay — Deep Financial Consultants — Analyst

Now, in the PPT as well as in your opening remarks, it was mentioned that you had a 17% volume growth and a 2% pricing growth. So can you please correlate?

O. Subbarami Reddy — Chief Financial Officer

It was vice-versa.

Amit Raj Sinha — Managing Director & Chief Executive Officer

It is a vice-versa, yes.

Manav Vijay — Deep Financial Consultants — Analyst

That the volume growth has been muted, sir, at just about 2% because we are already at our peak capacity utilization. So the volume growth isn’t much, but the realization growth has been fair. CFO, is that right?

O. Subbarami Reddy — Chief Financial Officer

Yes, yes. That’s right, sir. Quantity is 2% and value it is 17%. That is exactly right, sir.

Manav Vijay — Deep Financial Consultants — Analyst

Sir, you have reported a 5% topline growth, so INR69 crores, I believe against INR65 crores, INR66 crores last year, okay? Just 5% topline growth. Now, 5% topline growth is a combination of pricing growth and realization growth.

O. Subbarami Reddy — Chief Financial Officer

Yes. Pricing is realization only. Pricing and realization both are same and volume and value.

Manav Vijay — Deep Financial Consultants — Analyst

Sorry for that, pricing and — pricing and volume. You are saying that you had a pricing growth of 2%.

O. Subbarami Reddy — Chief Financial Officer

Yeah, that is a quantity, growth in quantity in FY that is 2%.

Manav Vijay — Deep Financial Consultants — Analyst

The volume grew by 2% and pricing grew by 17%. That means sales growth should have been 19% and not 5%. I have not been able to correlate these two numbers, sir.

Amit Raj Sinha — Managing Director & Chief Executive Officer

See, this, you are comparing the total turnover.

Manav Vijay — Deep Financial Consultants — Analyst

Correct, sir.

O. Subbarami Reddy — Chief Financial Officer

That is different. That you are pricing the — that is your individual sales realization. Again, your total turnover it depends upon the sales mix. You have — we have different products. It depends upon the sales mix. See, the quantity for nine months last year it was 9,567 metric tons, and this year 9,760 metric tons. That is a 2%.

Manav Vijay — Deep Financial Consultants — Analyst

Sure.

O. Subbarami Reddy — Chief Financial Officer

Difference for nine months.

Manav Vijay — Deep Financial Consultants — Analyst

I’m talking about this quarter, I’m talking about this quarter because in the PPT as well as in the opening remarks it was specifically mentioned 17% and 2%. So help me understand this [Indecipherable] I’m sorry, I’m harping on this question.

Amit Raj Sinha — Managing Director & Chief Executive Officer

Yeah, there is no problem. This overall on topline that is 5%. This breakup is breakup is — that quantity there is a this thing — that is 2% and then pricing for nine months for this Q3 versus Q2, again there is no much difference to 217.14 is the realization for nine months of our first half year which is 217.04, hardly there is very minute difference.

Manav Vijay — Deep Financial Consultants — Analyst

No, I have not been able to [Speech Overlap]

O. Subbarami Reddy — Chief Financial Officer

In realization, first half year the realization — average realization is 217.04. And the average realization for nine months is 217.14. Hardly there is no difference. And in volumes there is slight dip is there. And but when we compare to previous year, then there is a growth of 5%, but we are comparing, previous year Q3 versus current year Q3, then there is a growth. And we are talking about exactly — for nine months we are comparing with the — you are talking about Q3 of last year versus current year Q3. And there we are comparing the nine months figures, that’s why there is a difference.

Manav Vijay — Deep Financial Consultants — Analyst

So what you’re saying is that this 17% growth and 2% growth in the nine months and not in this three months, That’s right., that’s right.

O. Subbarami Reddy — Chief Financial Officer

Yes, exactly.

Amit Raj Sinha — Managing Director & Chief Executive Officer

There is a mistake. There is a mistake, an oversight there. It is actually for the nine months. It’s not really for the quarter. When we look deeper [Speech Overlap]

Manav Vijay — Deep Financial Consultants — Analyst

But, sir, if I see on a nine-month basis, your topline growth is around 29%. Am I right?

O. Subbarami Reddy — Chief Financial Officer

Yes, correct.

Manav Vijay — Deep Financial Consultants — Analyst

So what you’re saying is that out of that 29%, 17% belongs to volume, 2% to the pricing or vice-versa and rest is the OEM. OEM book that you do?

O. Subbarami Reddy — Chief Financial Officer

Yeah, other income is there, other income

Amit Raj Sinha — Managing Director & Chief Executive Officer

Other income or food and nutrition, the healthcare part.

O. Subbarami Reddy — Chief Financial Officer

Operational, I mean

Manav Vijay — Deep Financial Consultants — Analyst

Sir, I would — so just as a matter of suggestion to you, since these two segments that you operate, MCC and the OEM, these two are I would say they are very different segment. From next quarter onwards if you can provide the segmental numbers that would really make our life slightly more easy while doing the comparison.

Amit Raj Sinha — Managing Director & Chief Executive Officer

Fair, sir. Point noted. [Speech Overlap]

O. Subbarami Reddy — Chief Financial Officer

If at all it is required, then we’ll provide it.

Manav Vijay — Deep Financial Consultants — Analyst

Okay, my second question to you, Amit, is that, so in this allotment — preferential allotment, you’re also taking roughly 50% of this, for say, commitment around INR150 crore, to INR160 crore [Indecipherable] Help me to understand from where do, let’s say, intend to generate this much of money that you will be putting it in, and yeah?

Amit Raj Sinha — Managing Director & Chief Executive Officer

So I’ll be generating this from my private sources.

O. Subbarami Reddy — Chief Financial Officer

Yeah, Kushal we can raise debt.

Manav Vijay — Deep Financial Consultants — Analyst

Sorry.

O. Subbarami Reddy — Chief Financial Officer

We will raise debt. Wwe will take loan.

Manav Vijay — Deep Financial Consultants — Analyst

You will take loan?

O. Subbarami Reddy — Chief Financial Officer

Yeah, on personal point of the promoter. Promoter funding.

Manav Vijay — Deep Financial Consultants — Analyst

Okay, fair enough. Thanks for all the answers.

Amit Raj Sinha — Managing Director & Chief Executive Officer

Thank you, Kushal.

Operator

Thank you. The next question is a follow-up question from the line of Saket Kapoor from Kapoor and Company. Please go ahead.

Saket Kapoor — Kapoor and Company — Analyst

Yes, just I missed the last comment. For the fund raising exercise, the source of funds for the promoters would be a personal loan, that will be how you would be funding the sale?

O. Subbarami Reddy — Chief Financial Officer

Yeah promoter funding will go for and then we’ll take it.

Saket Kapoor — Kapoor and Company — Analyst

No, sir, from out of the total issuance of INR1 crore 10 lakh warrant, INR50 lakh is from the promoter category, Mr. Amit Raj Sinha, and his family. So for that funding, sir will be borrowing money and then subscribing to the same?

O. Subbarami Reddy — Chief Financial Officer

[Speech Overlap] borrowing money and investing in the company.

Saket Kapoor — Kapoor and Company — Analyst

Okay, okay. So Mr. Sinha, what could be the reason then sir, you have to borrow money and then go for the subscription. You would have kept your stakes lower and allowed — that puts the interest cost and also the risk on your part to repay going ahead, just to have a basic understanding of the same.

Amit Raj Sinha — Managing Director & Chief Executive Officer

So, Saket, sir. I would put it the other way. I would put it that if the promoter is so confident of borrowing money and growing the company, everybody else should be happy about it.

O. Subbarami Reddy — Chief Financial Officer

See, if any dilution, then that will be viewed negatively. But see, when the promoter has got confidence into the business, then that is a good gesture only investing — anyway company requires the capital — the growth capital is required and promoter is infusing the capital.

Saket Kapoor — Kapoor and Company — Analyst

Sir, for the nine months, for the first half I think the capital work in progress was around, I missed that numbers, yeah, just a second, in your PPT it was mentioned that it is around INR18 crore CWIP. So, what will be the capitalize part going ahead? How much we would capitalizing for the year and the total capex for the ones we have?

Amit Raj Sinha — Managing Director & Chief Executive Officer

Once the [Indecipherable] Dahej and Jhagadia completes, then will be capitalizing around INR59 crores, INR60 crores.

Saket Kapoor — Kapoor and Company — Analyst

Okay, sir, when, I look at your balance sheet part, H1 shows INR18 crores, and I think so that year ending was around INR9 crore only, so didn’t get the number, that INR59 crore.

O. Subbarami Reddy — Chief Financial Officer

That is in Q2 of next year once that capitalization. We are not talking about 31st March — 31st March also that would be there in a capital working process only unless the commercial products comes out, we’ll keep it under capital work in progress only. And once we’ve commercial production commences, then we’ll capitalize the entire INR58 crores, INR59 crores.

Saket Kapoor — Kapoor and Company — Analyst

No, sir, just if you give me the breakup for this INR18 crore. The one which is lying…

O. Subbarami Reddy — Chief Financial Officer

[Speech Overlap] I think that INR18 crores that is completely towards this capital work-in process and which we have spent towards — we are spending towards for the completion of the projects, upcoming and ongoing projects.

Saket Kapoor — Kapoor and Company — Analyst

Ongoing, projects. And any further capex?

O. Subbarami Reddy — Chief Financial Officer

That itself is a for the we spent towards the capital assets, means expansion.

Saket Kapoor — Kapoor and Company — Analyst

And this will increase to INR59 crores?

Amit Raj Sinha — Managing Director & Chief Executive Officer

Yeah, by end of — after completing. See, once we complete these projects by end of September, that will increase to that extent. Because the total of cost for the increasing capacities to 21,000 metric tons by increasing another 7,000 metric tons at the Dahej and Jhagadia, the amount we are going to spend is around INR58 crore, INR59 crores or around INR60 crores you can say.

Saket Kapoor — Kapoor and Company — Analyst

Two-line items, one for the other income and other on the other expenses part. When we look at your nine-month other income, that has moved up to INR5 crore, and last year total year number was INR2.63 crore.

Amit Raj Sinha — Managing Director & Chief Executive Officer

Yes.

Saket Kapoor — Kapoor and Company — Analyst

So, what constitute this and then I have one question for the other expense.

Amit Raj Sinha — Managing Director & Chief Executive Officer

Yeah, other income, it constitutes this format change, fluctuation gain and the interest income on our margin money deposit and actually fixed deposits, and around INR3 crores and odd is towards foreign exchange gain due to fluctuation. Dollar appreciation or rupee depreciation.

Saket Kapoor — Kapoor and Company — Analyst

Okay.

O. Subbarami Reddy — Chief Financial Officer

Net forex earnings are there, let’s say, there is a gain in foreign currency fluctuation.

Saket Kapoor — Kapoor and Company — Analyst

Correct, sir. And to the other expenses part, sir, we see a quarter-on-quarter there is a dip from INR18 crore to…

O. Subbarami Reddy — Chief Financial Officer

Yeah, other expenses majorly consisting of the freight element. If freight cost has come down that’s why there is a decrease in other expenses.

Saket Kapoor — Kapoor and Company — Analyst

But, that is again factored into your revenue also?

O. Subbarami Reddy — Chief Financial Officer

Yes, obviously, that is yeah, that is one of the reason for decrease in the total revenue. But it is a small impact, but that is also one of the reason. Otherwise, that would be included in the selling price and at the same time the expenses will render the other expenses.

Saket Kapoor — Kapoor and Company — Analyst

Okay, so that get net-net of.

Amit Raj Sinha — Managing Director & Chief Executive Officer

Yes. [Speech Overlap]

Saket Kapoor — Kapoor and Company — Analyst

Okay and sir, what is our working capital requirement, how much funds we need?

O. Subbarami Reddy — Chief Financial Officer

That is — roughly it is 90-day cycle. It is 90-day cycle.

Operator

Thank you.

O. Subbarami Reddy — Chief Financial Officer

Yes, sir, thank you.

Operator

Ladies and gentlemen due to paucity of time, that would be our last question for today. I now hand the conference over to the management from Sigachi Industries Limited for closing comments. Thank you and over to you.

Amit Raj Sinha — Managing Director & Chief Executive Officer

Thank you all for participating in this earnings concall. I hope we were able to answer your questions satisfactorily and at the same time offer insights into our business. If you have any further questions or would like to know more about the company, please do reach out to our Investor Relations Manager at Valorem Advisors. Thank you. Stay safe and stay healthy.

Operator

[Operator Closing Remarks]