Globus Spirits Limited (GLOBUSSPR) Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Globus Spirits Limited Q3 FY '23 Earnings Conference Call. We have with us today Mr. Shekhar Swarup, Joint Managing Director; Mr. Paramjit Gill, CEO, Consumer Division; Mr. Bhaskar Roy, COO; and Mr. Nilanjan Sarkar, CFO. [Operator Instructions] I now hand the conference over to Mr. Shekhar Swarup. Thank you, and over to you, sir.

Good afternoon, everyone. Welcome to our earnings call. Sorry about the delayed start today. There were some technical difficulties at our end. At the outset of this call, I'd like to address the recent announcement by the company about the income tax search. This was a routine search that was conducted. And during the search, no unaccounted assets were ceased. There is no meaningful impact on business operations during the search. And since the completion of the search, we have not received any assessment or notice from the department. We will, of course, inform SEBI regarding any updates on this from time to time. At Globus, in the last few years, we've focused on creating steady growth through a well-entrenched destination business as well as laying the foundation for growth in our consumer business. Both these sides of our business continued to make strides in the quarter gone by. In Jharkhand, we announced the commissioning of our greenfield 140 KL crane, ENA and ethanol plant. Happy to inform you that in the quarter gone by, this facility has produced to 90% of capacity utilization, with efficiency improving every month. The installed capacity of the company is now 765 KL per day, of which 335 KL is dedicated to ENA, and the balance is fungible between ENA and ethanol. Our second expansion in West Bengal and our first expansion in Jharkhand is underway. There has been some delays due to global supply chain disruptions. However, the delays are now behind us. We expect both expansion projects to be completed in early Q1 '24, adding 60 KL per day at each location. We also now look forward to starting construction at Odisha as soon as all regulatory approvals are imposed. Energy costs has been a hot topic. And I'm happy to inform you that various initiatives that were taken up by our engineering and operations team have resulted in reducing energy consumption by 5% in West Bengal starting in the month of December, with the potential of going up to 20% savings. Savings in energy consumption that is. Over the course of next year, we will be implementing these learnings from our West Bengal plant to all our locations. And this will enable us to reduce fuel consumption by 20% at locations in East India and 10% to 15% in our other locations. On margins, as illustrated in the investor presentation, which I hope you've seen by now, excluding IMFL investments and an exceptional underperformance at Samalkha, Q3 EBITDA margins were in the range of 14%. ENA price revisions over the year has been helpful, with prices up 20% year-on-year and about 13% year-to-date. This quarter saw a marginal softening in fuel costs. However, grain costs remained steady. From January, we are beginning to see Coal India making large quantities of coal available to the industry, and this has helped reduce cost of fuel further. As long as this continues, coal cost shall remain subdued. As many of you would be aware, though we use multiple fuels, including coal, rice husk and other agricultural waste, coal prices drive the entire market for fuel. In Q4, however, grain prices have started seeing an upward movement. Going forward, I expect margins to remain in the range of 13% to 15%, excluding IMFL. As we go into the next financial year, price increases, especially in our Value and Value Plus categories, will start getting realized, and that will help our margins further. We've been very excited about the prospects of our prestige and above brands hold. And in the last few quarters, Param and I have spoken to you about all the work that have been happening towards creating competencies and reasons to win in the marketplace. I'm very happy to inform you that this quarter, prestige and above brands have brought in 7% of our consumer revenue. This is a small but an important step as we start to gather some steam towards getting to our first major milestone of 20% consumer segment revenue share. I request Param now to talk a little more about this.

Thanks, Shekhar. Good afternoon, everyone, and I hope you all are well. In the overall consumer segment, the aggregate sales in Q2 FY '23 came in at 4.05 million cases, up 7% year-on-year -- I'm sorry, that was Q3. It is noteworthy to mention that in the quarter gone by, the average realization of the consumer segment further improved INR 400, INR 510 per case in Q2 of FY '23 to INR 527 per case in the quarter gone by, that is Q3. This was on account of better mix across states and continued lower trade spend in Haryana in line with maintaining our focus on better brand profitability. Going forward, with our product mix improving towards Value Plus and Premium segments, we believe realizations will continue to remain robust. Let me start on the Value and Value Plus segments. Our overall revenue in this segment grew [ 22% ], which is happening. In Value Plus, RML, the Value Plus segment, continued to demonstrate our brand strength in the marketplace. This was supported by our Black Lace Rum, which, in its second year of launch, delivered double-digit market share in its segment in the quarter gone by. Notably, our whisky, which is also in its second year, is slowly gaining consumer acceptance and is helping us get stronger in the whisky portfolio as well, which is led by our Country Club, which is our flagship whisky. We also launched [indiscernible] in the Value segment last quarter, and we'll continue our work in increasing our product offerings to the ever-evolving consumer. In Haryana, our strategy to creating a distillery business model is playing out. We have maintained our increased contribution of INR 26 per case, and we'll continue to build [indiscernible]. Consistent efforts on metro liquor, which is in the Value Plus segment, are bearing fruit as we are seeing our momentum build in this segment, and both our brands in the segment are interlocked. In West Bengal, there was, again, a road to market change in the Value and Value Plus segments at the end of last quarter, which led to some disruption in our service-led industry. The good news is that the new RTM is not tradable to brand building and will help us in times ahead. In this change, a new category in the Value Plus segment has been introduced. This clearly demonstrates that across its opportunity of this segment is now being recognized, which will now go well for us as we go forward. Coming to the Premium segment, we are happy to report that the Premium -- and this segment is going -- is showing very promising prospects. Our revenue in Q3 clocked almost INR 15 crores against INR 2.3 crores at same time last year and INR 4.4 crores in Q2 of this year. Corona, where we had launched sometime at the beginning of Q3, has also shown encouraging reception to all our 3 brands, with thriving launch in the current quarter. In Telangana, however, we could not get approval for 1 of our key brands to operate and hence, are revisiting our strategy for the state and keep you updated. In West Bengal, we have expanded our portfolio now to take advantage of the self-owned local manufacturing facility and are hopeful of posting meaningful growth in the coming quarters. We are in the process of launching [indiscernible] whiskey as we talked to you. UP as well as Delhi markets also have started well, as we inch closer to the end of our first full year. That gives us confidence to expand our offering portfolio, and we will be launching 3 new products in this calendar year across local markets, 2 of them in the first quarter of FY '24. Focus have relatively undertaken to strengthen our key accountabilities as we continue to drive our premiumization journey. We expect to close FY '23 with close to about 2.25 lakh cases under our belt, thereby setting ourselves up for a great future. I will now hand over to our CFO, Nilanjan, to take this forward.

Thank you, sir. Good afternoon, everybody. Since all the results and the investor presentation have been published in advance, I will not take much time and will open the floor for questions.

[Operator Instructions] The first question is from the line of Prithvi Raj from Unifi Capital.

I just have a couple of questions. So the first, can you give the CapEx for Q4 and next year? And how much it will be funded through internal accruals and then borrowings?

Nilanjan, could you please take that?

You are asking the question for the Q4 of next year?

No, no, Q4 of this year and then FY '24 full year, what is the CapEx plan and how it will be blended?

Nilanjan speaks for next year. It is based on our approvals coming through for this. So currently, we are working on that. So Nilanjan won't be able to give you that figure. As soon as approvals are in place, then the CapEx plan will get firmed up. But for Q4, Nilanjan, please do give the figure.

For Q4, the entire CapEx that we have, pending for the 60 KLPD that is pending to be done, and it will be entirely from our internal accruals.

And what's the figure?

We have spent almost 150 KLPD. We have spent almost INR 35 crores, INR 40 crores and other...

Another we have INR 20-ish crores left?

Yes, another INR 20-ish crores left.

And Shekhar, if I assume you get approvals for Odisha and UP greenfield projects over the next couple of quarters, how much can be the CapEx? And how are you planning it to fund?

The capacity of these projects has not yet been firmed up. It's based on the approvals that will come. Based on approvals, we will then decide how to correctly engineer. But let's assume that each of them are a 200 KL project. If it is 200 KL, it will cost us about INR 150 crores for each. There may be some debt financing, maybe about 20% or 25% could be financed by debt, and the rest would be internal accruals. But as I mentioned, it's all based on when this will come. This debt amount is also assuming both projects start on the same day. So there's a lot of ifs and buts. That's why I said the -- I can't give you clarity, but each project is roughly INR 150 crores. If it's a 200 KL plan, if you take up 1 project in this year, then there shouldn't be any need for debt. If you take up 2 projects, then maybe about 20% debt.

That's clear. That's quite helpful. My second question is on the IMFL business. We see the way that revenue has increased this year has been quite good. At what revenue run rate can we reach EBITDA breakeven in this particular business?

So I'll let Param give more details on that. But roughly we are, according to our plans, every state takes 2 years to breakeven from the date we launch in that state. And different states has been opening up different time periods. All states we haven't gone into together. But as a rule of thumb, approximately 2 years to breakeven in every state. Of course, there are some states that we've had problems like Telangana Param was talking about. So aside from any of those problems, we have seen that states have taken 2 years. Param, do you want to say anything more?

Yes. The way we do is, also, the first year, when we introduced, obviously, it takes us quite a long lead time to test the product out and get the brand into the market. So from the day the first liquid flows in, you can say, end of third year. Regardless of that year, which are part time of the year we launched it in. So third complete year, we expect almost all the states barring and exceptions here and there to turn around and start contributing to the equity.

My final question, Shekhar, again on margin. See, I mean, last few quarters, I guess you have been guiding that you can reach to 20% EBITDA margin, okay? But now we are talking 12% to 14%, that is also excluding IMFL. So what exactly has changed the narrative here? Is it because you expect this ENA inflation and fuel inflation to remain for many quarters going forward? Or is there any pricing pressure that you are facing from your customers?

No. I mean, ENA prices, we've been able to pass on our cost increases, as I explained earlier. This sort of margin range, I mentioned, it does not include price increases on the consumer business, which will start coming in, in April as was expected. So if you remember in the last couple of calls, I've said that in each of our businesses, the time it takes to pass on costs are different. So ENA is the quickest, followed by ethanol, followed by our consumer business. So ENA has happened. Ethanol has happened. However, ethanol price increases were not in line with what we were expecting. But whatever it was, has happened, and now we're expecting consumer prices to start getting revised from April onwards, in fact, Rajasthan has already announced a price increase of -- Nilanjan, please correct me. I think it's INR 25 for Value and about INR 40 for Value Plus.

Yes. Yes. Yes.

So all this will start getting implemented next year. So we are still working at new costs in the consumer business without any new prices. So that's going to increase margins. Ethanol price increase has been unsatisfactory, not in line with what we were expecting. So there's been some margin erosion there. But without consumer, 15% is something that I can see clearly right now.

[Operator Instructions] The next question is from the line of Tarang Agrawal from Old Bridge Capital.

Three questions from my side. The first, if I see on a sequential basis, your consumer business, as a proportion of your overall revenues, increased, which is also validated by a commentary, your realization is moving up from INR 510 to INR 527, so on and so forth. But for whatever reason, the gross margins are down to about 110 bps, right, Q-on-Q? And my understanding in the previous quarter was that you were seeing cost inflation coming off in so far as raw materials are concerned. So has that actually -- if I am in your only opening commentary, you spoke about maybe grain prices actually inching up in Q4. So if you could just give us some sense in terms of what's happening there? That's one. The second, on the power and fuel cost, if you could give us the number for Q3 FY '23? And what was the number for the same period last year? And third, if you could just tell us what happened with Samalkha, which resulted in lower-than-expected yields?

Sure. Nilanjan, can you take this all?

Yes. And the first question -- can you repeat your first question, please?

Yes. So on a quarter-on-quarter basis, if I see your consumer business, the share of consumer business is higher than your -- than the previous quarter, which is Q2 FY '23. Yet the gross margins have actually come off by about 110 bps, right, from 41.1% to about 40%. And my sense was that as we were going into Q3, the grain prices were actually softening, or at least that was the anticipation. If I just add the 2, then theoretically, the gross margin should have increased, but that's not happened. So what am I missing here?

See, here we can do a deep dive on this. But the main things that have happened in Q3 are as follows: there's been an uptick in consumer, which you have noticed; there has been an addition of the Jharkhand capacity, and all of that has come in as ENA. The first, say, 30 to 45 days of Jharkhand, the efficiencies were pretty low. That has only started moving up, as I indicated in my opening remarks towards the later part of the quarter. And now, of course, it is as per our target. The next thing that impacts our margins is the IMFL business. Of course, not so much as gross margins but EBITDA, where there is an EBITDA loss. These are the 3 major themes that have played out last month -- last quarter. With regard to commodity prices, there has been a slight reduction in fuel cost, very nominal. We have seen a much more -- a greater reduction into January, of course, let's see what happens in the rest of the quarter. But Q4, we've also seen an uptick in grain prices. The reduction in grain prices that we were expecting in the season -- in the harvest season has not happened to the extent it was expected. But to the extent of our ethanol business, we are covered with FCI. Grain, however, this does impact our consumer business. ENA, of course, we're able to pass on grain costs pretty well now. But our consumer business is impacted because of high grain and fuel costs throughout the year. And as I mentioned to the person before you, cost increase -- price increases in consumer are going to start coming in, in April, which will offset the cost increases that would have happened in the current financial year.

Okay. And what was the average grain cost, if you were to tell me, in Q2? And how has that trended in Q3? And how we're looking at it for Q4?

Nilanjan, do you have that Q2 information?

Yes. Q2 average grain cost was INR 19.63, and Q3, it was INR 19 -- in the same range of INR 19.45 to INR 19.5. So there was hardly a marginal decrease in grain cost. I'm talking about grain from the open market, which is the damaged food grain.

In Q4, we are seeing this go to about INR 2,000 and INR 2,100 per quote.

Sure. Okay. And how much is the power and fuel cost in Q3 this year? And what was it for the corresponding period in the previous year?

Okay. Within power and fuel comparative mainly of 3 -- as mentioned of 3 coal, multi-fuel, and rice husk. While rice husk were sitting at almost INR 5.5 per KG last year same period, which goes up to INR 8.9 in the current period -- 9-month period. Coal, which was at INR 7, goes up to INR 10. And multi-fuel, which was at almost INR 1.9, goes up to INR 3.2.

But Q-on-Q, there is some reduction in that -- 3%, 4% reduction in that. And then, of course, there has been some reduction.

As I understand, there's about INR 74 crores in the previous quarter. So I'm just looking into your absolute number for this quarter.

Okay. Nilanjan, do you have the absolute number for power and fuel?

Yes. The absolute number on the rate impact on the 9-month period compared to last year was a negative of INR 77 crores.

That's not the question. What is the total power and fuel spend in Q3?

INR 105.37 crores.

And now the reason it goes up dramatically is because of our contract?

Yes.

And what was that in the same period, same quarter last year?

Sir, I'm giving you the number for last year. The current year number is INR 222.78 crores.

You call it as 9 months, right?

9 months. Yes.

Sure. And last on Samalkha.

Samalkha, the plant and equipment is aging. We've seen some -- how do I say it, lower recovery in Samalkha, lower alcohol in Samalkha due to aging equipment. These equipments are being replaced or retired, and we expect all of that to be complete by the end of this quarter.

The next question is from the line of Imran from Longo India Capital.

Sir, can you please share your power and fuel mix? How much comes from rice husk and how much is coming from coal?

I don't have -- I don't think any of our team members have that number ready. But roughly speaking, 60% is rice husk and multi-fuel and 40% is coal.

Yes. It is.

And what was this number roughly last year?

Similar.

Similar number.

[Operator Instructions] The next question is from the line of Jatin from RTL Investments.

My first question is the price increase that you have received in Rajasthan, is that sufficient to cover the cost inflation that you've seen in FY '23? And actually, in Rajasthan, would consumer margins go back to normal going forward?

Yes. I mean, if you look, it's INR 26 is about -- on many terms is about INR 8.50 a liter, which is sufficient.

Okay. Second, you mentioned about the fact that the ethanol price increase is lower than expected, and it seems the levels at which we are operating today, the return ratios on the ethanol plants also will not be great. So why is it then that you still are looking to add more plants...

I've not said ethanol returns are not great. I said that ethanol rate increase was not great. That doesn't mean the return on our investment is not great.

So even with current ethanol prices and current kind of cost pressures that we see, we are still making reasonable returns on ethanol, sir?

Yes.

Okay. And this quarter, there has been a sharp increase in other expenses and employee expenses. Is that all to do with the Jharkhand plant?

Yes. It's all to do with the other expenses, comprises of power and fuel also. And it also comprises of bottling expenses and numbers. The higher we bottle, the expenses on bottling will go up. And also, on your question on employee cost, we had the liberty of capitalizing costs till the Jharkhand plant was not capitalized, which was capitalized last quarter -- end of last quarter. After that, we had to charge off expenses of employee costs. So that was another blip in the expense.

But going forward, we should assume this kind of number to continue?

Yes. Yes.

Okay. In this margin guidance that you gave of 12% to 14%, that is only for 4Q? Because in FY '24 at least 1Q onwards, the Rajasthan price increase should come in?

Yes. It is Q4.

FY '24, any guidance you would like to give us?

Difficult to say it right now, but this should be the base for FY '24. We have to see how coal volumes continue through the year. Last year, we saw Coal India reduced coal volumes dramatically and increased their own stocks. So I hope that doesn't happen. It doesn't make sense why Coal India should do that. I hope something like that doesn't happen. If coal continues to be available for industry, then I don't see a problem increasing on these margins as the year goes by.

Sure. Sure. And on the ethanol price, any chances of you getting any price revisions? Or will this now happen only next year in December once -- for the next season comes in?

We are trying, if coal prices is in public domain that information. So the information is available with the decision makers. But let's just -- to be conservative, let's assume it will only come next year. But work is on to get some sort of interim [indiscernible].

[Operator Instructions] The next question is from the line of Saket Kapoor from Kapoor and Company.

Sir, firstly, regarding the Jharkhand unit. Sir, when will the unit start contributing the expenses, which we have debited for the quarter? When it will commensurate with the revenue, sir? What's the date on it?

See, making profits today, there is no problem. It has made profits in Q3, it is also making profits today.

Okay. But since it was the higher expenses that are highlighted on account of Jharkhand, so if you could explain the reason then for the price?

Jharkhand facility was not cleaned in Q2. In Q3, it was commissioned, and you saw impact of revenue and expenses in Q3. So it is a startup of a new factory. And therefore, in the first quarter, revenue will jump as well as expenses will jump. And thereafter, it will stabilize.

So what should be the -- as I'm going ahead. So [indiscernible] this quarter, we are not getting the entire benefit of the revenue. That is it, sir?

90% capacity utilization in Q3. This will go up by maybe 4%, 75% points. Average, we are able to utilize 95% of our capacity. So to that extent, revenue will increase. But most of it is there.

Okay. And the expense line item will remain the same. It is not that -- the running of -- the ramp-up cost is no different than what it is a regular course of business?

Yes.

Okay. Sir, you did spoke about this softening of coal prices. I missed your earlier commentary. So going ahead, sir, how is Q4 currently shaping up in terms of the raw material basket? If you could give some more color, [indiscernible] reputation.

This is a reputation. I'll quickly summarize an interest of taking the other question. And then when the transcript is available, you can get more details. But we have seen coal prices soften in Q4. However, grain prices have been upward. It is my expectation that without IMFL losses, we will have an EBITDA margin of around 15% in Q4. Going forward, we will get an increase on consumer prices, especially in Value/Value Plus. It actually help us show our margins further.

Right, sir. Sir, and if you take this packaging part and also how do the glass prices affects our input cost? So give a color on these line item?

Glass prices, if glass pricing goes up, our input costs go up.

Yes. So glass prices are probably there I think so. I wanted to have the impact whether there is a dent on the margins because of higher glass prices? Or how are we dealing this...

There has been, but for us, most of the impact has been on account of coal and grain prices -- coal plus fuel and grain prices. There has been some impact on glass as well. Our glass procurement is much lower. By volume, the majority of our business is in PET bottles. The premium brands are in glass bottles.

Right, sir. And coming lastly to the expansion in the West Bengal facility. Sir, taking into account the expansion that is supposed to pick up in Q1 of next financial year, what should be the geographical mix in percentage-wise? Or which states will garner the highest in the ascending order?

Are you saying which states will have the highest capacity?

The highest capacity, yes, sir.

The highest capacity will be in West Bengal.

West Bengal. And what would be then our market share there, sir, in the IMFL in the product for 5 years looking forward?

I mean, these are 2 different things. Size of the unit and market share and consumer are 2 different things altogether. And these things are not -- they're not directly proportional at all.

With the scale up of our capacity in West Bengal, with the nearest competitor, I just wanted to understand what would be our market share with the expanded capacity? That was my question.

Market share of what?

In the IMFL segment, sir?

Sir, our IMFL segment volumes -- I cannot -- our market share will be 2 percent points at best. And our market share is not relevant.

Sir, the capacity increases to serve the ENA and ethanol opportunities and not to -- and so with the IMFL requirement, just in case if that clarity was [indiscernible].

Okay. So our dependence on the external purchase of ENA will go down. That is the main.

Sir, we do not...

Sir, we do not pay, because we already have our capacity there. We already have our capacity. We already have...

If you don't mind, let us set up a call and I can explain this to you more in detail one-on-one.

[Operator Instructions] The next question is from the line of Agastya Dave from CAO Capital.

Shekhar, what exactly happened in Telangana? You said that one of your key brands was rejected. What exactly was an issue? Is it a permanent setback in the state? What were the parameters on which the brand was...

Param, could you take?

Yes. So I have not approved the reserves. The red colored whisky, the red label whisky. Their contention is that 2 brands having the owner ever made. We do not want to approve at the same time. And while there are enough competition brands who play in the different price points and don't have similarity of some part of the name, there are many, but we have not been able to secure that approval. And in the absence of that approval, now we've been, obviously, our brands have got approved and we have done a soft launch. But since [indiscernible] has not got approved, we are reevaluating our thought process of how to proceed. But be less assured that this is not going to anyway impact our overall strategy of higher income, nor is it going to impact the overall top line and bottom line business plan objectives. These things can happen from time to time. And we haven't seen it yet because we've got approvals everywhere and it's like all other companies do. So there are [indiscernible] behave in a unique way. And as an organization, we are dependent and we can only wait so far and then we have to evaluate ourselves.

Right. Right. Sir, next question is on this IMFL target that you have shared over the last few quarters that we are targeting a 20% revenue share coming from our IMFL branch. So what kind of timelines do you foresee for achieving these targets? Because so far the scale-up has been fairly decent. I would say, almost impressive. How do you see things going from here? Because you also have a lot of capacities coming in the other segments.

Yes. So just to clarify, the 20% is the segment revenue share.

I understand, sir. Yes, yes, yes. I understand, sir. In the consumer segment, right?

Go ahead, Param.

I think it's a little further down the line. Let me put it like that, that's what we set ourselves up for. And we have all goods available to us how to grow this category. In the short term, let me take the liberty of stating it upfront that we are -- our plan is to -- for sure, more than double our volumes and revenues in the coming year. And as the pace picks up, our ambition is going to get bigger and bigger because we are introducing new brands. A little difficult to put a time line, and then be held accountable to the time line at this stage. But what we will do is, as we keep demonstrating quarter-on-quarter how we are progressing, we are very confident that the larger stakeholders will derive a lot of confidence and comfort to see that we are not only on a current part, but we are well on it. I think that should suffice.

Yes, I just want to add something to what Param said. One of the reasons it's very difficult to give a date on this is also because the Value and Value Plus segments are growing at a pretty good rate...

Yes. Yes. Yes.

So that's why it becomes difficult to give an exact date.

Yes.

Because if that number was a static number, it would be a lot easier.

A lot easier. Yes.

Both are growing. It's something that we're working towards. You would appreciate that despite a strong growth in the Value and Value Plus segments in Q3, we've landed at a 7%.

Yes, that's impressive. Yes.

And I think it haven't been for that growth in Value/Value Plus, we could have been north of 10%.

Right.

So we've got to balance both of these things and see how we land in terms of share of segment revenue.

Right. Shekhar, I'm sorry to repeat this question about coal and the cost side. You've, obviously, gone into great details. But kindly help me understand this better. When I look at the international prices, when I look at the coal prices, our problems started on the margin side when the coal prices jumped up after the Ukraine attack, right, Russia-Ukraine war started. And the prices went through the roof, and they stayed there for...

Let me [ preemptive that ]. Last 3, 6 months, I've spent a lot of time modeling Indian Coal prices with the international coal prices.

Right. And the link is not working out, at least for me.

There is no link. There is no link. The link was established when the war started.

Yes. And it has not gone away.

It has not gone away. I am 100% seeing the same thing as you're seeing. It does not make sense to me, but that is how the Indian coal market is behaving, and I don't know why.

And when I tried to figure it out at the international level, the reasons for the prices coming down by 50-odd percent in coal over the last 30-odd days, the reason given is that the Indian imports have fallen. So that is -- just adding to the paradox here...

And the data that I'm seeing for Indian coal prices is not just our purchase data, but also a wider auction results of various Coal India options that took place in India. That link is broken. I don't know why. But the good news is that it can't remain broken forever.

Right. Right. Right. Shekhar, would you -- so if I look at our peak performance, right, the 20-plus percent margins and when the going was really, really nice. What would be the #1 villain in for you? Which has dragged down the margins the most? Is it just the lag effect of ability to pause the consumer prices much more slowly than what you would like to? Or is it the coal prices?

Single reason is coal.

Yes. Okay. That is what I thought. And that is behaving very artificially, right? That's -- it's not being driven by market forces as of now?

Yes. No, up till Ukraine war and before, there was a link. After Ukraine war, there was a link. But after that, the link is gone.

Yes. Yes. Yes. Great. One more thing, Shekhar, some of your competitors have actually mentioned that. So I have also been tracking the grain prices, and I saw that the wheat prices, even though international prices were collapsing, the wheat prices are very, very steady in the domestic market. But now they have started coming off. And at least the data I have, and I'm pretty sure your data is much better than mine. But the data that I have, I have also seen around a rupee fall INR 1, INR 1.50 per KG fall in the broken rice prices also. So again, I -- immediately, I own up to the fact that my data quality could be bad, especially in the grain side. But you mentioned that...

There was a reduction, but -- and that was in early January. But thereafter, the markets have gone the other way.

Okay. And let's hope that the coal -- the market links actually start working again. I think that's a big drag on the company as of now.

Not just company, for the economy.