Banswara Syntex Ltd. — Call Transcript 2018

Aug 29, 2018

Date: 25th August, 2018

To, Department of Corporate Services, BSE ltd., zs" Floor, P.l. Towers, Da la I Street, Fort, Mumbai 400 001

To, The Manager, National Stock Exchange of India ltd. 5t h Floor, Exchange Plaza Bandra (E), Mumbai-400 051

Scrip Code: 503722

Symbol" BANSWRAS"

Dear Sir,

Subject: Transcript of Q1 FY 19 Earnings Conference Call held on 16th August, 2018.

Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Kindly find enclosed a transcript of the Q1 FY 19 Earnings Conference Call held on at 16th 2018. The same is also available on the website of the Company i.e. www.banswarasyntex.com.

Please take the same on record.

Thanking You,

Yours FaithfUlly For BANSWARA SYNTEX ~t1f~

~0 {<). eIr ~Jo. ·1 . ~t~~ci

(H.P. KHARWALj ,<~~}j! COMPANY SECRETARY & COMPLIANCE OFFICER

End: a/a

It"-NS\'AHA SYNTEX 1.I1U ITEO COUJll)H,\,mOH;ICE 5lh HiJOt, Gllj1'11llllllWOlI\, J~l!l, Pflnr,elis srrecr, Mumbcu ,\U(}UlJ:l -rd :,·~JI 2:!.fifi:I;-!G.T;71·7G [Pax ;log! 22 2206 Hlltl Email; inJu<i'i'banswi1l"ll;lbrics.;:Of!l

ItE(IlSTEnED OFFICE S! :\lILL."i [ndu;,;lrtlil Area. D'llwdllmuJ,Banswilr.1 ;127()Ill (Ji'lj(l-sth:lll) Td ;+~112!lH2::t>\O{j!lI). fl;!, 25767G-rn l!.m"H: lllf\l(j;lbam~\';lraf;llHits.com

lin IS/150m)!)l; 2Dllllf.omp;wv I CIN: 12D02itl):171il'U:J1QWM www.bnnswarasvntex.com

"Banswara Syntex Limited Q1 FY19 Earnings Conference Call"

August 16, 2018

MANAGEMENT: MR. RAVINDRA TOSHNIWAL – MANAGING DIRECTOR MR. J.K. JAIN – CHIEF FINANCIAL OFFICER

Moderator: Ladies and gentlemen, good day and welcome to the Banswara Syntex Limited Q1 FY2019 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict.

As a reminder, all participant lines will be in the listen-only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing "*" then "0" on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ravindra Toshniwal – MD. Thank you and over to you sir.

Ravindra Toshniwal: Good morning, Ladies & gentlemen. Very warm welcome to our Q1 FY19 earnings for Banswara Syntex Limited. Along with me I have Mr. J.K. Jain – our CFO; and SGA, our investor relations advisors.

Let me take you quickly through the performance for the quarter till date. The turnover for Q1 FY19 has been flat on a year-on-year basis. We have been communicating over the last few quarters that the textile sector, particularly our synthetic sector in the textile has been hit with multiple headwinds. Despite this very challenging environment, in terms of revenue, we have done better. These headwinds are the general industry phenomenon due to the increase in the polyester prices and the rupee becoming weaker. However, we foresee FY19 to be comparatively a better year. We are working on multiple strategies on reduction of cost and on improvement of margin. Our vision continues to reach an EBITDA margin of 14% to 15% in the coming years.

Here are some of the highlights of the quarter. The production of yarn and our readymade garments increased by 11.18% and 1.77%. Whereas the production of fabric was lower by 8.7% as against our Q1 FY18. The share of the garment business increased by 35% against Q1 FY18. And a lot of the garment business uses our own fabric, so in a way the fabric reduction was more than compensated by the garment increase. The prices of polyester, viscose and wool are three main raw materials increased. Polyester increased by 23%, viscose by 4% and wool by 12% respectively compared to with the last financial year quarter one. Power and fuel cost for the quarter stood at 9.96% of the production value as compared to 9.73%, that is an increase of about 0.23%. The increase in stock of finished goods and the stock in process was by about Rs. 26.5 crores and that has impacted the profitability.

We are in business of vertically producing garments using our own yarn and fabrics and catering to the formal sector of travel jackets and suits where we have a significant presence in both global and the international market. 65% of our business continues to be in fabric and garment, which has increase and 35% in yarn. We continue to focus on these value-added segments. However, due to the headwinds of GST in domestic as well as the change in the duty drawback

structure and other global headwinds, we were not able to pass on the increases to customers in a significant way yet, and that has impacted profitability.

We are continuing to deliver European style products made in India with speed and prices as good as Turkey, with prices better than Turkey and speed as good as Turkey. With recent changes in Turkey, it should be useful as our product will be adopted by many of our customers because there is a concern or a cloud hanging over Turkey for the moment. In a way that also impacts our yarn sales to Turkey. But we are hoping that it will be more than countered by the increase in our fabric sales that may happen as a substitute for Turkey.

Our partnerships with global players which are essential for expanding our global markets are moving well. The arrangement with the Japanese Takisada company has been formalized and continues the joint venture expected.

We continue to work and focus upon our partnerships in the global markets that are essential to add value to our business. Our partnership is with Takisada in Japan as well as our partnership with Riopele which we expect to conclude in September first week. That was delayed due to the health of the promoter. And now we expect that it will be signed by middle of September for sure.

These partnerships are essential towards our strategy for value addition. We continue to look for newer customers and our partnership with customers like the Inditex Group for Zara and the Uniqlo for Japan. They are critical to our growth and we are hoping once the joint venture is signed as well as our own strategy of India becoming more important for the global players as a whole starts to improve as their base in India is improving. We will have significant opportunity to grow our relationships with the big suppliers. So, our strategies are constantly evolving to counter these headwinds and we are confident of overcoming the obstacles. It has taken longer than expected but we continue to try & find ways to deal with this in a more effective fashion.

Thank you, everyone. And I would like to hand the line over to Mr. J.K. Jain to update you on the financial performance.

J.K. Jain: Thanks, Mr. Toshniwal. Good morning, everybody. The working results for Q1 FY18-19 are already with you, I will just quickly take you through the financial performance of the company. The net revenue for the Q1 FY19 at Rs. 302 crores against Rs. 306 crores in Q1 FY18, yarn contributed 37% of the sales, fabric contributed 43% of the sales and garment contributed 18% of the sales. Profit before interest and depreciation including other income and other comprehensive income for the Q1 FY19 at Rs. 30.95 crores against Rs. 30.27 crores during Q1 FY18, margin was 10.2% in Q1 FY19 against 9.9% in Q1 FY18. We improved other comprehensive income in PBIDT as accrued gratuity are not due today and as per the IndAS they are included in other comprehensive income. The decline in margin was attributable to increase in stock of finished goods and stock in process.

As Mr. Toshniwal has informed that there was an increase of about Rs. 26.5 crores in finished goods and WIP, which is mainly being delivered in the July-September quarter for an actual realization for the quarter Rs. 66.26 per dollar as against Rs. 65.19 per dollar in Q4 FY18. During the quarter, we have made the repayment of debt by Rs. 14.76 crores. There is no major CAPEX planned for the next few years and our debt repayment is progressing as per schedule.

Now, I open the call for questions please.

Moderator: Thank you very much. Ladies & gentlemen, we will now begin the question-and-answer session. We have the first question from the line of Ritesh Bafna from RB Securities. Please go ahead.

Ritesh Bafna: Sir, I have two questions basically. First one is in terms of clientele, I want to understand who are our top five clients in India and in global markets? And what would be their percentage?

• Ravindra Toshniwal: Do you want to me answer the first question first?
• Ritesh Bafna: Or should I post the second one as well?

Ravindra Toshniwal: Go ahead.

Ritesh Bafna: So, in terms of the men's and women's wear, what trends do you observe in the Indian and the global markets? These are the two questions.

Ravindra Toshniwal: See, as far as our clientele is concerned, if you look at overall turnover, our turnover is 45% in exports and 55% in domestic. For the export clientele, the major markets for us is the US. In the US, we have around Rs. 150 crores of sales, roughly, including fabric and garment. And that is the single largest market and, in that market, we have a basket of maybe three or four customers where the maximum sales happen. So, we have about 10 customers in the US as a whole and out of which three or four of the customers have 50% of the business and the balance seven or eight customers have 50% of the business. Of those big three or four, Peerless Clothing is the single largest suit seller in the US and they sell for the brands like Calvin-Klein, Tommy Hilfiger and for Macy's in general. So, you find most of the suits in Macy's and J. C. Penney as a retailer, they come from Peerless Clothing. And Peerless Clothing is producing these in Vietnam and some in India. So we ship the fabrics to Vietnam and India for Peerless Clothing which makes the suits for different brands whose licenses they own. imilarly, there is Lanier Clothing, Marcraft, these are the main suit guys. But eventually customers that we have are the best brands in the US. So we are dealing with Phillips-Van Heusen and their brands. We are dealing with the brands of Calvin-Klein, DKNY, Phillips-Van Heusen and we are doing Dockers and we are doing GAP, Banana Republic. So, these are the customers we have in the US. If you look at Europe, the biggest market for us will now become with Zara, Inditex Group. And we are looking at making a better relationship with H&M and with C&A. We have in the UK significant relationship with Next and Marks & Spencer. Then we have also significant chunk of exports in

Turkey which is to the fabric manufacturers who buy our yarn. This might be a little bit challenge now because of the Turkish conditions in which the Turkish Lira has depreciated so much that the LCs of the Turkish banks are not even being accepted by the Indian banks any more for some reason or the other. So, that might be a little bit headwind which we have to face for a while. On the other hand, because the Turkish market is place where we compete with Turkey for the fabric they produce. So, we have fabric turnover of Rs. 600 crores in which we have about Rs. 400 crores in exports or so. That part will increase and some of the yarn part might decrease. So, I do not know what the net impact will be, we are still assessing, it is too early to say.

Ritesh Bafna: So, basically you mean to say that Turkish crises might help you?

Ravindra Toshniwal: Yes.

Ritesh Bafna: I am sorry to interrupt, just a follow-up question on this. Since you mentioned that you export to the US a large chunk of it, so since the rupee has depreciated, do you expect some more demand to come in in the future since our products will be cheaper for them? And how much do you see our financials to get benefited by this depreciation in rupee?

• Ravindra Toshniwal: I cannot answer the second part but let me talk about the first part. In terms of the scope for increase in our sales in the US market, it is a lot more now. One of the reasons is also de-risking to China. Because we are providing products which will essentially replace either China or Turkey. China is at the cheaper price level and Turkey is at the more expensive price level. On both those fronts, the US is now much more open to us. Therefore, we believe, that the US as a thrust area for increasing our business will be a very strategic one. We will continue to push with each one of our clients who are all billion dollar companies and we believe we have a very small share of the market. Even though we are the largest exporter out of India into the US for synthetic fabrics and poly wool fabrics, Banswara Syntex is the largest in that segment, that itself is only Rs. 150 crores. So, you can imagine the largest in that segment is only Rs. 150 crores which is too small. The scope of improvement is huge because we are talking about a market share where we have like 1% or 0.5% of the market.
• Ritesh Bafna: So, there is a long way to go there?

Ravindra Toshniwal: There is a long way to go and that is what makes us enthusiastic. That is just a question of our timing being right with certain customers and our focus being clear that we have to acquire these customers and then understanding. For example, with Peerless Clothing, we did not had a single year in which there is no growth, and that has been happening for 15 years. So, what we need is customers like that where we can engage with them and we can have a long-term relationship with consistent growth. So, the domestic market when you talk, we are basically working with three main groups. One if the Raymond Group, and the Raymond Group's different brands which is like Park Avenue and the other brand they have for their formal clothing. Then we are

working with the Madura Group and they have Van Heusen and Peter England, Allen Solly and the brands they are doing, Luis Phillip, etc. And then we do Arrow for the group which comes from Arvind, so Arrow and their brands. And then of course within India, we have the yarn business. In yarn business, we have customers like Siyaram and Dornier. What I am speaking about is for garment and fabric business when I spoke initially, and then the yarn business. We have corporate clients, even Raymond is a big client of ours for yarn. So, the customer base that we have is quite good and most of our exports is not to the Middle East at all. Middle East is a very small portion of our exports. The biggest markets for us are USA and then Europe, UK, and then Japan and Middle East comes after that.

Coming to the men's and women's wear question you asked. The joint venture that we are doing is going to focus on women's wear. At this moment, we are not into women's wear in a significant way. And that is again a huge area and because we are a stretch clothing-based company where out of the 3 million meters of fabric we do, we don't do actually 3 million. We are doing only right now 2.5 million meters or so per month, but out of that we are doing only about 1 million meters of stretch. We are hoping to increase that target with a real stretch target to improve our overall fabrics which stretch to 2 million meters, doubling it. So, when that happens, it will happen through women's wear also. That is why we are going in for this joint venture with Riopele, which is a Portuguese company and they are the leaders in women's wear stretch clothing in poly-viscose and in also cotton base. So, that technology, customer base and designing skill set will come to us with Riopele, allowing us to penetrate the global women's wear market. Speaking about the market between domestic and export, we find a lot of conversions now. There is basically only one market and one style sense and fashion sense. There may be some variations to it in India which are just adding diversity and much more SKUs in India as compared to rest of the world, which is why we think we need more focus on exports, because the funds involved are less and there is less SKUs and it gives us more productivity. The Indian market is far more complicated.

Moderator: Thank you. We have the next question from the line of Ankit Agarwal from Arc Capital. Please go ahead.

Ankit Agarwal: I have a couple of questions here. The first one being, can you please give us an update about the capacity utilization across all three divisions, that is yarn, fabric and garment?

Ravindra Toshniwal: Basically, in yarn division the capacity utilization is about 86% - 87%, there is a scope to improve further which can go in dyed yarn and the SKUs that we produce it can go up to 91% - 92% that was the best we have achieved. So, there is a scope for improvement in the spinning section. In the weaving also, we have the weaving capacity of about 3 million meters, now we are gradually scaling down because the outside job weaving is available at cheaper rate and producing on certain type of weaving capacity that we have and cost us more. So, the present weaving capacity which is already there for 2.5 million meter plus, we are reducing that capacity.

And the capacity which we will have finally would be about 2.2 million meters for old type of fabric. And the capacity utilization is about there also close to 75%, there is a scope for improvement. In terms of garment capacity utilization, there is a utilization including the SEZ factory which is in Surat, and there is always a concern about the capacity utilization in SEZ plant. Including that the capacity utilization is about 80% - 81%, there is a scope for improvement also.

• Ankit Agarwal: I have one more question. Do we have scope for any brownfield expansion in fabric and garment division?
• Ravindra Toshniwal: At this moment because we have excess capacities everywhere what we are just doing is adding some technology and machines that give us differentiation, but we are not adding capacity.

Ankit Agarwal: So, you do not have any future plans to add any capacity as of now?

• Ravindra Toshniwal: No. In fact, we are moving more to an outsourcing model and we are going to be using weaving capacity from outside and we are going to be also buying some yarn from outside, we do not need to add any capacity internally.
• Moderator: Thank you. Our next question is from the line of Manan Mehta from MM Securities. Please go ahead.

Manan Mehta: Sir, I have a couple of questions. The first question is, since we are more focusing on fabric and garments, are we looking to sell off our yarn spinners?

• Ravindra Toshniwal: No, at this moment we are not looking to sell off our yarn business. Yarn is basically supporting the fabric and garment business. The total yarn that we produce about 2,800 metric tons a month, we consume about 40% of our yarn for fabric conversion and rest we are selling into the market. So, yarn itself is a big business for the company and yarn business is contributing about 37% of the top-line that we are getting. So, we are not looking for any spinning capacities. We are not just adding capacities, we are modernizing and we are trying to sell more value-added yarns, but we do not intend to sell the business, we like the business
• Manan Mehta: Eventually we will do, as you said, value-added, so we will be improving our margins through that business also?
• Ravindra Toshniwal: Yes, we will be improving the margins in our yarn business which at this moment are pretty challenged because of the various increases in prices and GST impact in the domestic part of the yarn business. The value chain has not absorbed the GST in a good way yet. It is still taking time for the entire supply chain to absorb it in a way that is still to be positive for the overall textile industry.

• J.K. Jain: Again, last month there was a notification given by the government for changes in the duty structure and the refund, so that is also causing a problem in the product pricing for the fabric business.
• Manan Mehta: So, going ahead we will see this improving?
• Ravindra Toshniwal: Yes, going ahead it will improve, the GST situation. It is just taking much longer than expected and it has been a disappointment the way it was implemented.
• Manan Mehta: And my second question is regarding our subsidies and incentives, what are the kind of subsidies or the incentives that we are getting from the central and state government currently?
• Ravindra Toshniwal: There are two ways to look at, one is the export incentives that we get for the yarn, fabric and garment business. We get the duty drawback, that has reduced after the implementation of GST, now it is below 2% for all these three products put together. And the other is MEIS, merchandize export scheme, there we get about 2% on fabric and garment export. So, that is a benefit. And a certain extra benefit that is available, 3% extra benefit on the garment export. These are the three benefits that we get on exports. And for the textile, there is a scheme for giving TUF's benefit, there we get the capital subsidy from the government, that too is available for garment and certain machineries for the fabric production. But the advantage which was available earlier into the textile industry, 5% interest rebate and all that is now not available. We get only capital subsidy and that is one time at the time of purchase of the asset.
• Manan Mehta: So, we are not getting any interest subsidies?
• J.K. Jain: No, nothing. All the loans which were sanctioned earlier, these loans still continue to get the advantage of interest subsidy, but for the fresh loans that we take now, there is no interest subsidy.
• Manan Mehta: But there are other subsidies in garment.

Ravindra Toshniwal: Yes, but we are not doing that expansion. I mean just because there is a subsidy available, there is no reason for us to expand at this moment.

• Moderator: Thank you. Our next question is from the line of Niraj Mansingka from Goldman Sachs Asset Management. Please go ahead.
• Niraj Mansingka: I have two questions, one, isn't the garment MEI is 4%?
• Ravindra Toshniwal: We are saying that the MEI benefit available on garment exports is only 2%.

Niraj Mansingka:	Okay. So, what is the overall benefits you get on combination of garment and state level rebates of GST, etc, what would be the overall benefit you would get?
Ravindra Toshniwal:	So, let us just look at it this way. Prior to the implementation of GST, what we were getting overall other than refund of all duties that we have paid. So basically export is supposed to be duty neutral, so any local taxes are given back to you and then you are given something which is called a drawback which is based on cost that could not be identified as being refundable to you as direct back to you, but which are given to you as an overall lump-sum. That lump-sum amount used to be around 9%, that 9% was reduced to 2%. What you are being given back is your GST and 2%.
Niraj Mansingka:	So, there are talks about this.
Ravindra Toshniwal:	There was a lost to us around 3.5% in garments and in fabric about 4% and in yarn I do not know exactly how much we have lost, but we have lost maybe around that much, around 2% or 3% in yarn.
Niraj Mansingka:	Other thing is what do you see as a possible outcome of removal of MEI that is being talked about?
Ravindra Toshniwal:	If that is removed, then there is a further loss of 2% on that export incentive which we were getting. But it is not likely that it will be removed in our opinion.
J.K. Jain:	It will be replaced by some other incentive and will be given in some other form.
Ravindra Toshniwal:	Unless the government is hell bent on reducing the exports of the country, our buyers globally are not able to understand why it is that the Indian government is so unfriendly. Because no other country in the world has changed the status of what existed from one year to the other by reducing what is available by 5% to 3% across different and value addition. Obviously, the buyer is not going to pay you that difference in 5%.
J.K. Jain:	The government should have a long-term policies for benefit of exporters.
Ravindra Toshniwal:	That is why we see that Vietnam, Bangladesh, Sri Lanka and Pakistan continue to increase their exports while India does not.
Niraj Mansingka:	Got that. On the second question about the inverted duty structure, I think GST did some changes. Can you quantify some numbers, how it has in fact changed the scenario for you as an industry?
Ravindra Toshniwal:	No change, there is nothing in this inverted duty structure recent changes that they have done that will in any way impact us, because we as a composite mill were getting those back one way or the other anyway.

J.K. Jain: We are manufacturing from yarn to readymade garment and whatever duty credit that we get we can utilize entire duty credit while clearance of goods from the factory. There is no big accumulation and there will not be a situation where the duty will go waste and we will not be able to recover it in the product pricing. So, that way it is not an impact on the composite mills, the major impact which is being talked about is standalone weaving industry. They were buying yarn and there also if they are not willing to take the refund of the goods produced before 31st of July 2018, they will also not have any impact. If they ask for refund then only the government will question otherwise their credit will remain with them and they can utilize and get it in product pricing. So, it is more of a discussion rather, otherwise it is not going to impact in anyway.

Ravindra Toshniwal: I think it is more of a political statement than anything else.

Niraj Mansingka: And about JV partnership that you have about Riopele, Takisada, other players like Zara, can you basically talk about how you see them emerging over next three to five-year period, what you are talking about with them?

Ravindra Toshniwal: So, we have significantly set our objectives to increase the proportion of business we have with what we call our A-list customers. And we want to focus on these A-list customers all over the world, which includes of course the Inditex Group for Zara which includes Uniqlo and which includes customers like Banana Republic or the Calvin-Kline and others in the US for us. So, let's say, we have maybe about 10 to 15 strategic customers in the world who are all multibillion companies. And where we can significantly deliver them our stretch materials in polyviscose, cotton yarn dyed stretch and wool poly and wool stretch materials in a way that is as good, if not better than Turkey, at better prices. And we feel that that it can be a very good growth area for us. So that is a key objective of ours to significantly grow this business from wherever we are right now, i.e. 1 million meters, we want to double it to 2 million meters of this kind of thing. Then we have several other objectives in terms of other areas which may be finance cost that we have or the amount of people we employ and the quality of people we employ, the HR objectives, the finance objectives and the process improvement objectives. We are working very systematically on seeing that if we have to first achieve our sales objective the key alignment of all players in our company right from the yarn division to fabric and garment is how we service the customer. It should be align towards acquiring significant presence with these customers. What is very interesting for us and makes us optimistic about the relationships with these customers is the presence that is increasing in India for these customers. So, for example Zara's growth in India is very good, Uniqlo is coming in now, H&M is already inside, we already work with Marks & Spencer and they have grown significantly in India, and that has helped us too. Even the players who are now in India which are the real large volume garment operations, like for example Fashion at Big Baazar, or Reliance Trendz, we are engaging with all these customers because they give us the volume we need and we have the product differentiation they are looking for. So, we are seeing that if this engagement improves and we

move more towards in the export market big customers that give us like maybe 60% export instead of 45% export of our turnover which reduces our finance cost and increases our margins, with fewer people to deal with and less SKUs, it significantly impacts our cost structure and margins.

• Niraj Mansingka: Any thoughts on how your operational numbers of 2.5 million meters a month, or how many garments you are making can scale up to whatever discussions you have been having with Riopele or Takisada or the others?
• Ravindra Toshniwal: See, the capacity is not the constraint, it is not a capacity constraint that is stopping us from achieving our objective, it is sales. So, it is only about what pricing and what product we engineer for them and whether that engages them in a way where they feel that they should buy it from India and not from China and not from Turkey. I do not even look at much of the competition as being from India.
• Moderator: Thank you. Our next question is from the line of Navneet Bhaiya, an Individual Investor. Please go ahead.
• Navneet Bhaiya: I joined the call slightly late, so there might be a repetition. My first question is, while your line comes from synthetic yarn line, does the increase in cotton prices indirectly impact your business by any means?
• Ravindra Toshniwal: It is a good thing that the cotton prices have increased, because that gives synthetics a little bit of a competitive advantage.
• Navneet Bhaiya: So, you could gain out of increase in cotton prices in your garments and fabric business specially?
• Ravindra Toshniwal: Yes. There has been an increase across the board in price increases however, because even the synthetics have increased

Navneet Bhaiya: Second question on the currency, so there has been depreciation in INR as well as a lot of other currencies across the world. I remember in one of your earlier calls you were saying that we are positioning ourselves more as a European manufacturer or something like that. So, how do you see that impacting your margins over the next few quarters, Turkish Lira has also depreciated quite a lot?

Ravindra Toshniwal: So, as long as we are able to increase our exports and reduce our domestic business the impact will be positive. And that is the intention with which we are working, the government has not helped us by taking away the drawbacks we were getting. And we have to be more aggressive in our pricing towards the export, but find ways to reduce our own cost. So, which we have been

working on. So I think by large where we want to go and already set objectives and key result areas that we have identified, the rupee becoming weaker is good for us.

Navneet Bhaiya: So, have your realizations improved in the June quarter, your average realization, and it is likely to improve further basis the currency status that is right now?

Ravindra Toshniwal: We have to make a mark-to-market loss because of the June quarter of around Rs. 2 crores, because we had sold some bookings based on the orders that we had booked. So, actually the initial impact was bad. But now on the basis of what we see happening we are just not covering any more currency for the future for the next quarter.

Navneet Bhaiya: You are realizing at spot rates right now?

Ravindra Toshniwal: Yes, we are working on spot rates.

Moderator: Thank you very much. That was the last question in queue. As there are no further questions, I would like to hand the conference back to the management for closing comments.

Ravindra Toshniwal: I want to thank everyone for joining the call. And we hope that we were able to answer your questions with enough detail and hope they were satisfactory for you. If you do have any further queries please be free to get in touch with SGA who will be happy to address your queries and we will welcome your emails. Thank you for continuing to be interested in Banswara Syntex. And we will put our best efforts to see that we continue to engage with you and answer your questions. Thank you.

Moderator: Thank you very much. On behalf of Banswara Syntex Limited, that concludes this conference. Thank you for joining us, Ladies & gentlemen. You may now disconnect your lines.