Himatsingka Seide Ltd. — Call Transcript 2021

Jun 10, 2021

REF: HSL/SEC/2021/32

June 10, 2021

To	To
The Deputy Manager	The Manager
Department of Corporate Services	National Stock Exchange of India Ltd.
BSE Ltd.	Exchange Plaza, Plot No. C/1, G Block
PJ Towers, Dalal Street	Bandra-Kurla Complex, Bandra (E),
Mumbai -400001	Mumbai 400051
Script Code: 514043	Symbol: HIMATSEIDE

Dear Sirs,

Sub: Transcript of conference call.

Ref: Disclosure under Regulation 30 of SEBI (Listing Obligation and Disclosure Requirements), Regulations, 2015

Pursuant to Regulation 30 of SEBI (Listing Obligation and Disclosure Requirements), Regulations, 2015, we attach herewith a copy of transcript of conference call held on May 31, 2021.

Please also note that the transcript of conference call will also be available on our website www.himatsingka.com. This is for your information & records.

Thanking you,

Yours faithfully, For Himatsingka Seide Limited

SRIDHAR MUTHUKRISH NAN

Digitally signed by SRIDHAR MUTHUKRISHNAN Date: 2021.06.10 10:19:16 +05'30'

Sridhar Muthukrishnan Company Secretary

Encl: as above

Himatsingka Seide Limited Registered Office: 10/24 Kumara Krupa Road High Grounds, Bangalore 560 001, India T +91 8o 2237 8000, F +91 Bo 4147 9384 E hslblr@himatsingka.com CIN L17112KA1985PLC006647

www.himatsingka.com

Earnings Call Transcript Bengaluru, May 31, 2021

Q4 FY21 Earnings Conference Call

May 31, 2021

Moderator:	Ladies and gentlemen, good day and welcome to the Himatsingka Seide Limited
	Q4 FY2021 earnings conference call hosted by Batlivala & Karani Securities India
	Private Limited. 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 the 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 Ms. Prerna
	Jhunjhunwala from Batlivala & Karani Securities India Private Limited. Thank you
	and over to you Madam!

• Prerna Jhunjhunwala: Thank you Steven. Good evening everyone. On behalf of B&K Securities, I would like to welcome you all for 4QFY2021 and full year FY2021 post results conference call of Himatsingka Seide Limited. From the company we have with us the senior management including Mr. Shrikant Himatsingka, Managing Director & CEO; Mr. KP Rangaraj, President - Finance & Group CFO and Mr. Dilip Panjwani, Senior Vice President and CFO – Strategic Finance. I would now like to hand over the call to Mr. KP Rangaraj for the initial comments. Thank you and over to you Sir!
• KP Rangaraj: Thank you Prerna. Good afternoon and good evening ladies and gentlemen. I hope you and your families are staying safe and doing fine. On behalf of the company we would like to welcome you to this earnings call of Q4 FY2021 and the full year FY2021 results. As always I would start off with the business updates followed by an update on the consolidated financial statements and which will also take you to the profile of the company and after that I will hand you over to the Q&A session to our Managing Director & CEO Mr. Shrikant Himatsingka.

I will now start off with the business update. As you are all aware FY2021 has been one of the most challenging fiscals to navigate while we were severely impacted during FY2021 on account of the lockdowns, COVID-19 led disruptions, regulatory uncertainty and raw material inflation. We were pleased with our operating performance during H2 FY2021 on account of better capacity utilizations and order books. The demand for home textile products continues to be strong across segments and markets. We see a strong order book for FY2022. The capacity utilization levels at our Bedding and Terry Towel facilities increased in the quarter ended March and expected to continue to improve in FY2022 on the back of strong order books. Capacity utilization levels for our manufacturing facilities during Q4 FY2021 are as follows: Sheeting division clocked 76%

capacity utilization in Q4 versus 71% capacity utilization in Q3. Terry Towel division clocked 63% capacity utilization in Q4 versus 45% capacity utilization in the quarter ended December 2020. The spinning division continued with 101% capacity utilization and pretty much the same in Q3. During the quarter, revenue streams from brands stood at ₹565 Crores versus ₹385 Crores during the quarter Q4 FY20 the previous year and ₹551 Crores during the previous quarter.

I will now move on to an update on the consolidated financial performance for the quarter ended March 2021. The consolidated total income Q4 FY21 stood at ₹748.04 Crores versus ₹471.40 Crores in Q4 FY20 the previous year, an increase of 58.7%, on an year-on-year basis versus ₹681.65 Crores in the previous quarter, which translates to an increase of 9.7% quarter-on-quarter. This growth was driven by the enhanced capacity utilizations at the Sheeting and the Terry Towel facilities. However, please note the financial results for the quarter Q4 FY2021 does not include any recognition of export incentives under the RoDTEP scheme, which is effective from January 1, 2021 and the rates for the same are yet to be notified. The RoDTEP scheme as you are all aware has replaced the RoSCTL and MEIS schemes for export incentives, therefore Q4 FY21 consolidated revenues and operating performance are not comparable to the other quarters in the light of the above. Consolidated EBITDA for Q4 FY21 was ₹129.66 Crores versus ₹96.60 Crores in Q4 FY20, which is the previous year, an increase of 34.2%. EBITDA margins stood at 17.3% in Q4 FY21 compared to 20.5% in the previous year. The consolidated PAT for Q4 FY21 was ₹37.57 Crores versus a loss of ₹68.84 Crores in the previous year.

So I will now move on to the yearly financial performance on the consolidated financial results. Consolidated total income for FY21 stood at ₹2,272.53 Crores versus ₹2,419.65 Crores in the previous year, which is a decline of 6.08%. The consolidated total income and operating performance have been impacted for FY21 on account of the following: 1) Lockdown restrictions imposed during the first quarter of the fiscal. 2) Major COVID-led disruptions witnessed during Q2 FY21; and 3) as I already explained earlier Q4 revenues have been impacted on account of the non-recognition of export incentives under the RoDTEP scheme as the rates of the same are yet to be notified. 4). The inflation in raw material prices and imposition of import duty and levies on raw cotton. Consolidated EBITDA for FY2021 stood at ₹303.17 Crores versus ₹479.31 Crores in the previous year, which is a decline of 36.7%. EBITDA margin was 13.3% as compared to 19.8% in the previous year. The consolidated PAT for the full year ended March 2021 stood at a loss of ₹53.35 Crores versus a profit of ₹13.25 Crores in the previous fiscal.

I now move on to the debt profile. The consolidated gross debt as of March 31, 2021 stood at ₹2,467 Crores compared to ₹2,814 Crores at the end of the previous fiscal, which translates to a reduction of ₹348 Crores. The total term debt stood at ₹1,613 Crores and the total working capital debt stood at ₹836 Crores. The cash and cash equivalent stood at ₹144 Crores at the end of March 2021. We will continue to be focused on deleveraging our balance sheet going forward. With this I would like to complete my update we will be happy to take on your questions now. I would now request our Managing Director, Mr. Shrikant Himatsingka to address the Q&A session. Thank you and over to you Sir!

• Shrikant Himatsingka: Thank you very much Ranga.
• Moderator: Thank you very much. We will begin the question and answer session. The first question is from the line of AM Lodha from Sanmati Consultants. Please go ahead.
• AM Lodha: My first question is just I wanted to know whether company is fully integrated for the yarn requirement?
• Shrikant Himatsingka: It is partially integrated for the yarn requirement and we partially buy requirements from third party.
• AM Lodha: Can you tell me the percentage wise?
• Shrikant Himatsingka: Our internal capacities are adequate for approximately 35% to 40% of our requirements at this moment.
• AM Lodha: 35% to 40% you are buying from the market?
• Shrikant Himatsingka: 35 to 40% is what we produce internally by weight the rest we buy from.the market.
• AM Lodha: Remaining we are procuring from the market?
• Shrikant Himatsingka: That is right.
• AM Lodha: What capacity this terry towel plant is running?
• Shrikant Himatsingka: As stated by the Group CFO, during the fourth quarter fiscal it operated at a utilization level of 63%.
• AM Lodha: Are we planning for the capacity expansion of the Sheeting and Terry Towel?

Shrikant Himatsingka: Yes, we have the ability to debottleneck our facility and enhance our capacities organically as and when the need arises. So Sheeting can expand further at very marginal capital expenditure requirements and so can Terry Towel. So while we are operating at 76% and 63%, respectively and we expect the utilization levels to continue to rise in FY22. As we also said we will see pretty robust demand for our products during the next fiscal. Should the need arise we will consider organic debottlenecking our capacities and enhance the same if required.

AM Lodha: Thank you very much Sir. I will rejoin if any questions.

• Moderator: Thank you. The next question is from the line of Resham Jain from DSP Investment Managers. Please go ahead.
• Resham Jain: Thank you and good afternoon team. I have three questions. The first is incentive what was the impact if we assume Q3 numbers in terms of the incentive rate what would have been the impact in Q4 in terms of rupees Crores?
• Shrikant Himatsingka: The exact numbers Resham would depend on certain product mix and things like that, but it would be in the region of ₹35 to ₹40 crores.
• Resham Jain: Okay understood Sir. Sir my second question generally we are seeing inflationary environment across raw material and also in terms of logistic cost and lot of other things and at the same time we are seeing good demand and better utilization levels, is there any trade off between these two going into FY22 some of these inflationary headwinds can be mitigated by better utilization operating leverage if you can just share your thoughts around this?
• Shrikant Himatsingka: So other than RoDTEP the Q4 has also been impacted by raw material inflation both at the raw cotton level and at yarn levels along with other raw material inputs that are used along the value chain. It is not normal to see these levels of inflation of course on a weighted average basis a lot of it has been absorbed but the inflation has been present starting the middle of Q3 and the growth will help obviously offset the impacts of inflation as when superior product mix, price increases, when I think all these factors acting in confluence will help mitigate the impact. In addition, at some point the inflationary movements have to abate and correct so I think all these four pieces put together will make sure that things are handled in terms of managing the impact of inflation. There could be some timing difference between quarters in handling inflation but directionally I think there should not be a material issue and since growth is one of the important factors that will make sure that the inflation is dealt with strong order books helped that cause. So I think

we remain reasonably confident of addressing a substantial portion of the inflationary impact going forward.

Resham Jain: Understood Sir. My last and the final question is on you mentioned about very good order book in FY22, any number if you can share broad range in terms of what kind of growth because FY20 also got impacted, FY2019 we saw peak revenue and on the days what kind of broad range of growth should one expect in FY22?

• Shrikant Himatsingka: That is a tough one Resham we do not give guidance, but under the circumstances it is fair that we guide a little more clarity as to what one could expect. So when we use the term strong order books we see them to be buoyant not only because of the enhanced demand for soft home products but also more specifically because of the various new products, which we have launched across our Bedding and Bath verticals and they have seen a good reception across markets so I think both the factors that is general demand for soft home products as well as more specifically our efforts in furthering our market share both these factors will act in confluence to make sure revenue goes sort of north. Now coming how much north obviously we would like to put a finger on it but it will be safe to assume two things, A. it will progressively increase during the fiscal 2022 and B. we should be doing better than annualized run rates of Q4.
• Resham Jain: Okay got it Sir. Thank you very much.

Moderator: Thank you. The next question is from the line of Raj Nahar from Money Consultant. Please go ahead.

Raj Nahar: Good afternoon. My question is regarding the yarn capacity as you mentioned it 35% to 40% so currently the yarn market has been very strong and are we able to first is that to buy the required quantity and whether we are able to pass the increased cost of yarn and second is that thought process on enhancing the spinning capacity more?

Shrikant Himatsingka: If I may answer both of your questions there is no issue on the supply of yarn as such while there are supply chain disruptions, interstate movements are hampered from time to time and inward logistics hampered for imported cotton and things like that there are supply chain disruptions but those are being handled and we have made sure that there is no material disruption to the business at this point. So supply chain disruptions exist but the supply is very much continued so that is to your question about are we able to procure the required yarn under these

circumstances the answer is yes. The second part of your question is how do we plan to mitigate the yarn price increases. The answer to that is the company will have three to four pronged approach, the growth in revenues that will help us mitigate some of this impact, there will be some price increases, superior product mix amongst the three most important pieces that will help address this issue, we are also realigning our supply chains to be able to mitigate some of these impacts. However, we do not see any increase in spinning capacity in the near future to mitigate this impact. We will contemplate enhancing spinning capacity given our large captive consumptions going forward but nothing in the near future.

Raj Nahar: Okay Sir. Thank you.

Moderator: Thank you. The next question is from the line of Rishikesh Oza from Robo Capital. Please go ahead.

Rishikesh Oza: Sir just one question from my side. Could you please share an outlook for the EBITDA margins going ahead in FY22 given this increase in raw material prices?

• Shrikant Himatsingka: It is a difficult one Rishi but I think our normal EBITDA percentages are somewhere in the range of 20% to 22% in that range where I think we will see a little correction in those margins for the full year given the inflationary impact, but we should be able to keep them range bound with a progressively better performance during the entire fiscal. In other words, in the near term the impact could be slightly exaggerated but as our price increases kicks in and the inflation settles down progressively we will catch up with the margins and as a whole maybe we should be closer to the lower end of the band what we normally achieve.
• Rishikesh Oza: Okay Sir. Thank you very much.

Moderator: Thank you. The next question is from the line of Devang Patel from NAFA AMC. Please go ahead.

Devang Patel: If I look at the difference between the consolidated and the standalone numbers at the PBT level this quarter the number has turned from negative to positive could you explain what has changed and is this sustainable?

Shrikant Himatsingka: We have been attempting to better manage our global sort of value chain and balance sheet a little better Devang so this is a result of that and maybe do not go exactly by this quarter but you are right the balancing between standalone and consolidated will be better than it is normally the case, so directionally this is here to stay, the quantum might decrease a little to balance it out but yes directionally

this is why we headed to better manage our value chain but I would urge you only to look at the consolidated numbers and not the standalone and consolidated separately.

Devang Patel: Debottlenecking in the next phase how much time would it take to debottleneck and when would you consider that decision?

Shrikant Himatsingka: We can debottleneck our capacities within six months from when we hit the button as I said so we will watch this demand pattern for near term and then take our call. Since we have some capacities in hand we will wait for a little more time but post that if this continues as I said for very marginal organic capital expenditure we will debottleneck our capacities.

Devang Patel: Sir you would consider that sometime later this year?

Shrikant Himatsingka: I think it is a good time to revisit the question at the end of next quarter.

Devang Patel: That is all from my side Sir. Thank you.

Moderator: Thank you. The next question is from the line of Vibha Batra from FairConnect. Please go ahead.

Vibha Batra: My question is on topline growth, FY21 was exceptionally lower, so the basic sales is low so if you were to just calculate as you said on quarterly you will expect similar growth trends can we expect 25% to 30% growth on an annual basis for this financial year?

• Shrikant Himatsingka: As I said we hope to do better than the annualized run rate of Q4. It might unfold progressively during the fiscal but as a fiscal as a whole that is what we plan to achieve that is where we are headed towards subject to cause any extremities and unforeseen circumstances that might come our way on account of COVID the third wave or things like that, that apart this is where we seem to be headed.
• Vibha Batra: In presentation I calculate for example March 2021 growth over December 2020 and then infuse the percentages or year-on-year?
• Shrikant Himatsingka: Just look at Q4 FY21 and as I said we hope to do better than the annualized run rate of Q4 FY21. Although I would like to remind everyone that I did use the term progressively so there could be timing differences between quarters but as a whole fiscal that is where we headed.

Vibha Batra: Fair enough and where do we see our return on capital employed say if in single digit if we were to see now..

Shrikant Himatsingka: So obviously FY21 Madam it is not fiscal to judge our capital efficiency but as stated we would like to achieve capital efficiencies in the region of 17% to 18% ideally is what we target once our model stabilizes. Please note that our Terry Towel plant is a new facility we have been ramping it up through these rather challenging times and unfortunately we have faced regulatory uncertainty that you all are aware of along with unprecedented levels of inflation so that will help in our models settling down, but we have taken the mitigation measures as outlined and hopefully with that directionally we will continue to improve our ROCE. I would also like to say that the return on capital employed not only should be adjusted for payables but I do not know how most analysts look at it, but because of the change in accounting standards there are two buckets that have enhanced the size of the balance sheet not just for us but any company that any duty benefits availed of in the purchase of important machinery will now be sitting in our balance sheet as government grants and the second change has come through in the form of the right to use of these liabilities that sit on the balance sheet as well. The reason I am pointing this out is that it depresses the ROCE number because of the fact that it sits in the denominator so I do not how most houses are dealing with it, but this is a result of an accounting standard change that has been introduced probably a year ago and as far as our balance sheet is concerned it has enhanced the balance sheet capital employed by over 400 Crores and right of use.

Vibha Batra: Especially write-off use is said to be included in the capital as you have computed?

Shrikant Himatsingka: Whether it is fair or unfair is a separate subject even if you have notices that it is different and departure from what existed and therefore I do not know how you would like to compute it and bringing this to your attention in context to it is having a depressive influence on the number.

Vibha Batra: I appreciate this and this incentive how long will it take in your estimate for government to finalize it?

• Shrikant Himatsingka: Madam unfortunately I have no clarity on the subject other than what any of you read in the media so per media statements the government should be announcing it shortly but whether they do or not remains to be seen.
• Vibha Batra: So then you will have an exceptional gain also for January to March quarter and whatever is going forward that will reflect in your numbers whenever it comes?

Shrikant Himatsingka: Per the current due and that is how it should be but do keep in mind but the inflation will also be very heightened during this time probably more than Q1 because by the time price increases kick in and so on we are already in the end of the May so while you will have some exceptional gains you might have some enhanced impacts on account of these factors as well.

Vibha Batra: Okay thank you.

Moderator: Thank you. The next question is from the line of Prerna Jhunjhunwala from Batlivala & Karani Securities India Private Limited. Please go ahead.

• Prerna Jhunjhunwala: Hello Sir. Congratulations on a good set of numbers. In your earlier comments you mentioned that FY22 is going to experience superior product mix so could you please enhance on that comment what kind of changes we are seeing on the demand perspective as well as in what context we can see this happening in FY2022?
• Shrikant Himatsingka: I mentioned it as recently I have had a superior product mix in revenue streams so that will help us mitigate some of the inflationary impact, I did not mean that our product mix will improve further from here I just meant that it is a good thing to have in our arsenal to fight inflation and superior product mix definition would also include the fact that a substantial part of our revenue streams do come from brands so to that extent we might be helped in managing inflation.
• Prerna Jhunjhunwala: In the US we have seen good consumer demand coming in do we see the brand performing much better than low value products which we saw in FY20 as an industry, FY21 as an industry we saw demand for low products to be heightened due to pandemic times, etc., but going forward do we see that brands will outperform?
• Shrikant Himatsingka: A lot of our brands are mass brands in fact they all are and it is good for us that the demand is broad based and it is good for us and in general as well that it is not just the high priced products the thing is because of bulk of Himatsingka products are getting to broader audiences, so when I say superior product mix it does not necessary mean high priced product mix it can mean better priced lower end product as well. So I think the demand pull is across price points and it is not focused just on the better or the lower price points we see demand being strong across price points so it is holistic it is broad based, which is good.

• Prerna Jhunjhunwala: That sounds great Sir. That is very helpful. Sir second question is on debt we have seen substantial improvement on your debt profile what can we expect for FY22 and 23 going forward?
• Shrikant Himatsingka: So as we have shared with you earlier major capex has anywhere been concluded we are now in organic capex mode and we will continue to be focused on deleveraging our balance sheet on the one hand and enhancing EBITDA on the other so they will have a twin impact on our leverage ratios going forward. So I think during FY22 we will continue to see debt reducing there could be timing differences between quarters but as the financial year as a whole you should see debt correct I guess it would be safe to assume that we would expect correction of up to ₹ 200 Crores or thereabouts.
• Prerna Jhunjhunwala: That sounds interesting. My last question would be on European Union you had entered into a tie-up with Disney could you help us with any progress on the European Union traction?
• Shrikant Himatsingka: Yes, we did forge an alliance with Disney for the distribution of soft home products in the EMEA region, the Europe, Middle East, and African regions and we should see progress on that front in FY22 as well. It is an important addition to our brand portfolio it helps broad base our reach, it strengthens our juvenile portfolio and these are all exciting things going on in that space as well so that should also be a contributor to the growth that we envisage during FY22.

Prerna Jhunjhunwala: Okay. Thank you so much and all the best.

• Moderator: Thank you. The next question is from the line of Anurag Jain from Green Lantern Capital LLP. Please go ahead.
• Anurag Jain: Thank you so much for this opportunity and congratulations on a decent set of numbers in challenging times. So one question which I have was that with this China Plus strategy becoming more and more visible and we at the same time over the last few years have significantly enhanced our gross block we are ready with our world class capacity so are we seeing significant increase in enquiries and more number of customers talking to us and would we see significant traction on that front in the next couple of years?
• Shrikant Himatsingka: So the traction as we see it, Anurag is being witnessed for the following reasons. The way Himatsingka has broad based its product mix with a long Terry Towel plant and entered several subsegments in both Sheeting and Towel segments and we are reaching out to a broader client audience globally and that is giving up

some mileage so that is one reason that we are seeing growth. Second is there is a general buoyancy of soft home products globally and then there is a third piece which is to do with the geopolitical reasons there are driving demand shifts and that we witnessed over the last year or so. You are right in your observation that the intensity of the demand shifts are more let us say pronounced over the last few months. So as we see it will be a contributor to the strong demand over the next few years that we have seen this will be one of the reasons that caused such movement. I would caution you though that these things can also reverse should there be issues with Indian supply chains of any material nature these things can also reverse but at this point we see it as a positive factor that will drive demand going forward.

Anurag Jain: One last question from my side this was on the business model. Right from spinning till the brands we are present across the board in bed linen, sheetings, and the towels, so the question is I was going through annual report and we were big brands and very high end cotton products and stuff like that what I wanted to understand was again in terms of margins, in terms of resilience of the business, in terms of return ratios being such a huge vertical integration what are your thoughts were are we up to full potential of the business model that we built or there is scope to build margins, return ratios?

Shrikant Himatsingka: Let me give you just a broad overview. Please do not hold me to specific numbers because the assumptions change from time to time and underlying sort of drivers change from time to time but I think to your question of what is full potential vis-àvis what our investments are and what we have made so far, there is a fair bit of upside for the seeds that we have sown thus far. We have capacities to be tapped in Sheeting and in Terry and we have some organic debottlenecking that we will sort of put through as we are closing on some capacities, there is also scope to enhance capacity beyond the debottlenecking at marginal capex rates. So I think home textile solutions portfolio has a fair amount of upside from here both on topline and on the EBITDA front and with continuing deleveraging focus given the fact that we have completed our major capex it will also automatically drive our focus on capital allocations. So someone just asked me the question about the ROCE, so I think we will look at trying to deliver 17% to 18% ROCE ideally speaking on the capital that we employ and the industry is stable, there are entry barriers that exist, there are only three players with large integrated capacity in this field at this point and so it is not easy to set up capacities it is time consuming and capital intensive and so on. So given those entry barriers, given the fact that there is a fair amount of upside that is still left, given the fact we operate entirely integrated model on a B2B basis and anything that truly has world class assets we have demonstrated the

fact that we have lead the pack I would say most years in terms of EBITDA profile and things like that so given all those things there is a fair amount of fuel that is left on table and that is what we are now focused on sweating.

Anurag Jain: Okay got that thank you so much all the best.

Moderator: Thank you. The next question is from the line of Pratiksha Daftari from Aequitas Investment Consultancy. Please go ahead.

• Pratiksha Daftari: Sir just a couple of questions if you could just tell us what are the key drivers for our growth expectation for the next year the order book that we have that is my first question and secondly I wanted to understand that do we have any maintenance capex plan and what would be the quantum?
• Shrikant Himatsingka: Drivers will let us just go through this from a standpoint of logical sequencing. The most important growth driver is the end consumer and the consumption that is sort of being witnessed across markets so that is where it emanates from that is robust at this point. The second important factor is that one must be well entrenched in global markets which means our client reach must be strong, which exists because that is required to tap in to the consumption that taken place at the point of sale. If these two factors are aligned then you need the right products to offer to these clients who will in turn offer to the end consumer, which is also in line. We believe we have probably the best brand portfolio in industry and a very, very versatile range of products both in our Sheeting vertical and in our Towel vertical. Our spinning vertical is largely captive as I said earlier also that does not count, it also leads the industry in capability solutions in the cotton space, which is very important for the millennial consumer and new age retailers as they realign and relook at their offerings to audiences. Once we have the right offering in the brands and the right product versatility what is important is global scale manufacturing capabilities and scale which is something we have put together over the last few years and before finishes focus on execution and ability to actually execute this demand which is something that is currently underway. The last few quarters have been volatile there is no denying fact,, but if you look at our track record through 2015, 2016, 2017, 2018, 2019 and probably the first half of FY2020 we have consistently grown our topline and our EBITDA during this period. The volatility that we witnessed has really been affecting half of FY2020 and right through to the end of first half of FY21 and then we saw a sort of coming back to stability during the second half of FY21. So I think the worst period of volatility is over for Himatsingka, there could some near term pressures or inflation of raw material but that would not disturb our model as such and we are poised to now harness the

benefits of the seeds we have sown over years to realize true potential of our model and of our assets. These are the growth drivers that will help going forward. I am sorry what was the second part of your question?

Pratiksha Daftari: Maintenance capex?

Shrikant Himatsingka: Maintenance capex as we have shared earlier stakeholders probably in the range of ₹60 to ₹80 cores in a year could be more in some years, could be less in some years that is why I could average out, so it works out to approximately 3% of net block and 2.5% of gross block.

Pratiksha Daftari: Just want to confirm this you said that debt reduction target would be about 200 Crores in FY2022 right?

Shrikant Himatsingka: Yes, approximately that is right subject to volatility and unforeseen circumstances that might crop up during the year on account of COVID I would like to qualify it for that so if there are such movements during the year that are extreme these targets could change accordingly.

Pratiksha Daftari: Okay Sir, got it, thank you.

Moderator: Thank you. I would now like to hand the conference over to Mr. Shrikant Himatsingka for closing comments. Over to you Sir!

Shrikant Himatsingka: Thank you all so much for taking the time today. I hope I have been able to answer most of your queries and questions. We are available anytime to take you through more questions and queries, should you have any do feel free to reach out to us and we make sure we have addressed your questions. Thank you very much again and do stay safe.

Moderator: Thank you. Ladies and gentlemen on behalf of Batlivala & Karani Securities that concludes this conference. Thank you all for joining us and you may now disconnect your lines.