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DCW Ltd
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Ladies and gentlemen, good day, and welcome to the Q4 and FY 2024 Earnings Conference Call of DCW Limited hosted by Valorem Advisors. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Purvangi Jain from Valorem Advisors. Thank you, and over to you, ma'am.
Good afternoon, everyone, and a warm welcome to you all. My name is Purvangi Jain from Valorem Advisors. We represent the Investor Relations of DCW Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the fourth quarter of the financial year 2024. Before we begin, let me mention a short cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's beliefs as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. Now let me introduce you to the management participating with us in today's earnings call and hand it over to them for their opening remarks. We have with us Mr. Saatvik Jain, President; Mr. Amitabh Gupta, CEO; Mr. Sudarshan Ganapathy, COO; and Mr. Pradipto Mukherjee, CFO. Without any further dealing, I request Mr. Saatvik Jain to start with his opening remarks. Over to you, sir.
Thanks Purvangi. Good afternoon, everyone, and welcome to DCW earnings call to discuss quarter 4 and FY '24 performance. We will start today's call with a brief on the industry and also moving on to the company's performance. It has been an extremely difficult year for the chemical industry across all products. The global sentiment has been weak, fueled by weak demand in China, leading to excess imports into India and also weaker exports. Demand in India is not lacking, which is a big positive for the domestic market. So moving on to the industry dynamics of our products, we'll start with soda ash. There has been an increase in production of soda ash internationally. The increase in supply, along with weaker demand in U.S. and Europe has resulted in an oversupply situation, putting pressure on pricing. This year, however, we do not see any capacity additions, which we feel will lead to a rebalance in the supply-demand situation globally, bringing in some stability. The cheaper imports not only are putting pressure on pricing but have also resulted in the domestic industry operating at lower capacity utilizations. For us, most of the year, we have operated at lower utilizations due to our own mechanical issues at the plant, as we have already discussed earlier. These are being resolved, and we hope to be producing at around 85% utilization in this fiscal. Like soda ash, PVC also suffers in the domestic markets due to cheap products being dumped from China. However, the prices are gradually getting stabilized, indicating robust demand from downstream piping sector. The PVC pipe industry is set to score a hat-trick of double-digit volume growth of 10% to 12% year-on-year in this financial, signaling a strong demand from the end user industries. Owing to this, PVC demand is expected to remain strong and is growing at around 8% to 10% per annum. Tightening of ocean freight across Asia are expected to increase the international PVC price announcements from major Asian PVC producers for June shipments. As for caustic soda, irrespective of the global situation, the oversupply in the domestic market itself is a challenge. With the ECU being under tremendous pressure, domestic industry has been operating at below 80% utilization. Moving on to synthetic rutile. The market situation in terms of TiO2 demand in China is improving, though there is still a severe pressure on pricing. Unlike quarter 3 of last year, we have seen some movement of our buildup inventory in quarter 4 and are seeing improvement in the demand situation from quarter 2, quarter 3 of this year into China as well as into other markets. As for C-PVC and synthetic iron oxide pigment. There have been significant contributors for DCW in this year. There has been severe pressure on pricing of C-PVC, again due to Chinese imports. However, as the demand remains strong and is growing, we are adding capacity this year and have achieved our highest ever C-PVC sales. Our new capacity is now operating, and we are producing at around 100% utilization. As for SIOP, even with the weaker pigment demand in the international market, we have managed to achieve our highest ever sales for this product. Work on our line balancing CapEx is complete and are on the verge of commissioning. Commercial volumes, however, will catch up with a lag effect. Despite challenges in the chemical space, DCW has shown its resilience with continuous focus on specialty chemicals over the last couple of years with investment in the segment, yielding reasonable stability to our bottom line and has helped the company tied over the depressed environment in the commodity segments. The Specialty Chemicals EBITDA for the quarter stood at INR 46 crores as against INR 34 crores in the same quarter of FY '23. Even in this environment, we have managed to post an EBITDA shy of INR 200 crores for FY '24. For the first time in many years, we have our finance cost for the FY at a normalized level of INR 74 crores and have maintained our credit rating at A. Our long-term debt has also reduced by INR 100 crores this year. Our investment in the renewable energy project is also underway and are hopeful to start drawing power from this from the second half of FY '25. With our investments completed towards the end of FY '24 and the market situation improving, we see the benefit significantly picking up in the second half of this year and are overall hopeful for a better fiscal. With that, I request our CFO, Pradipto Mukherjee to brief you on our financial performance. Over to you, Pradipto.
Thank you, Saatvik, and good afternoon, and welcome to the quarter 4 FY '24 earnings call. The financial highlights for the quarter is as follows. The revenue stood -- the revenue for the quarter stood at INR 622 crores as against INR 398 crores last quarter and INR 588 crores in quarter 4 last year. This is an increase of 56% quarter-on-quarter and approximately 6% Y-o-Y. The increase in top line was driven by higher sales in SIOP and C-PVC also marking our highest ever sales for the quarter. With early in shoots in export demand, the SR volumes for the quarter was also highest ever. However, there were certain cutoff benefits which accrued in this quarter from Q3. The PVC price and volumes remain stable with a slight improvement in net realizations are being witnessed currently. The demand for caustic soda and soda ash remained subdued with prices continuing to correct, however, at a lower pace. The price correction was also witnessed in SR and C-PVC quarter-on-quarter, but it is expected to remain stable from here on. For the EBITDA, we clocked a number of INR 69 crores compared to INR 24 crores last quarter and INR 104 crores in quarter 4 of last year. It's 1.9x higher quarter-on-quarter, but a decline of 34% year-on-year. While there was price correction across all our product segments, the input cost did not see any meaningful correction. This has resulted in a margin pressure for the company. For the current quarter, we clocked at 11% margin as against 18% in quarter 4 of last year. Our continued focus and investment in the specialty segment has resulted in providing stability to the bottom line. The share of specialty EBITDA for the quarter rose to 67% as against 34% in quarter 4 of last year. The absolute EBITDA already mentioned, by Saatvik, stood at INR 46 crores for the quarter as against INR 35 crores in quarter 4 of last fiscal, an increase by 33% year-on-year. For the year as a whole, the revenue stood at INR 1,872 crores as against INR 2,634 crores in last fiscal. The dip of INR 762 crores is about 29%. The drop in realization across board has resulted in an impact -- of price impact closer to INR 620 crores and lower volumes of soda ash due to continued technical issues due to weak export demand has further contributed to the downtown of revenue. EBITDA margins for the year stood at 10% as in 17% last fiscal. The drop predominantly due to price erosions, as already mentioned, in our commodity segment, while C-PVC also witnessed a price erosion of 28%. The EBITDA for the year stood at INR 194 crores versus INR 443 crores, of last year, down by 56%. It's important to mention here that the specialty EBITDA for the full year stood at INR 135 crores, as against INR 115 crores last year despite a price correction of C-PVC, as mentioned, of 28%. Quickly to touch up on the balance sheet, the long-term debt stood at the year-end at INR 409 crores as against INR 504 crores last year, a reduction of approximately by INR 100 crores. The cash balance -- the cash maintained in the balance sheet at INR 170 crores as against INR 168 crores in the last fiscal. The current ratio, however, for the company dipped to 1.13 versus 1.38 last fiscal. This was due to subdued business performance for the year. It's worth mentioning that the company has also completed its major payment for its growth project of INR 125 crores in C-PVC and SIOP which was announced earlier. The company has also further invested INR 20 crores in group captive solar investment. The financial benefits of all the above investments are expected to accrue in a phased manner with FY '24, '25, while C-PVC already has been commercialized and favorable impacts have been witnessed in quarter 4. With this, we would be open for questions. Thank you.
[Operator Instructions] We have our first question from the line of Sanjeev Damani from SKB Consulting.
Am I audible?
Yes, you are, please.
Sir, actually, I would just request you to kindly give an appraisal of pricing and production capacities of SIOP, synthetic rutile and C-PVC we having expanded already. So at what monthly production rate, we are running these plants, if you can kindly tell me.
Good afternoon. After our investments in the SIOP plant, we are running practically to about 55% of the capacity. We are doing about 75 tonnes per day against the installed capacity of about 85 tonnes per day. Synthetic rutile we are running to practically full production. And C-PVC also, we are running to our full production.
But can you kindly C-PVC now at 20,000 or even more because previously, we used to produce some 13,000 tonnes against our capacity of 10,000 tonnes.
No, 13,000 tonnes is a combined capacity, including the compounding. So the resin capacity stand -- which was standing at 10,000 tonnes that has become [indiscernible] now.
Okay. So I mean...
Full capacity of [ 2,800 ] tonnes a month.
Approximately. Sir, for 20,000 tonnes per annum is our resin capacity. And when we convert it into compound, C-PVC compound, then the capacity gets enhanced by how much percentage, sir?
2,000 tonnes roughly by 20%.
Roughly by 20%. And when we do -- we get compound out of resin then we have to add certain things from outside purchase item or within our in-house item we are adding there?
No. compounding chemicals, we don't manufacture so it is our purchased items.
Okay. Okay. Okay. So for us, margins are same whether we sell resin or we sell compound?
No, value add [indiscernible]
Okay. So when we sell compound, our margins are better, sir. Regarding synthetic rutile, I could not understand the figures that you have spoken. What is our capacity and how much we are producing per month these days?
So post our investments into the capacity -- the debottenecking in CapEx -- also synthetic rutile our capacity is 40,000 tonnes. So we have been producing, let's say, at 90%.
Okay. So 40,000 per annum or it is per month?
Per annum, sorry. Per annum.
No problem. No problem. And we are running at 90% there also. Sir, last time [indiscernible], you had mentioned about yellow SIOP, which will go to America and has gone for American approval. So is there any development to be understood about that product?
No, no. All our products are very well approved. Like today, America is our biggest buyer. And practically, 60% of our production is exported. And our product is very well accepted by the buyers over there. So we are frankly -- our quarter 4 sales shows, we sold total 8,000 tonnes out of which practically 60% was exported and balance was in the domestic.
Okay, sir. Okay. So sir, is there a further sign of improvement in American consumption in days to come, because they are also now coming out of recession or something like that, slowdown. So can we estimate that we can export more?
We will not try to keep all our eggs in one basket. So we will be exploring other international markets as well and as well as the domestic market. So for the time being, even though the consumption in the U.S. may improve, but I think we will be concentrating more on the other markets than USA alone.
Okay. And red and yellow only 2 type of SIOP we are manufacturing or even more, sir.
It's red and yellow. Now very recently, we have come up with the black which samples have been sent to the buyer. And the initial report, which we have got is it is very well accepted by the buyers.
Okay. So sir, this time we produce 8,000 metric tonnes. So how much we can raise it to -- this is 8,000 metric tonnes on quarterly basis sir, am I right?
That's true.
So sir, how much we can further improve on this capacity...
No. Let me clarify that 8,000 tonnes was not a production in the quarter. It was a little less. But then some of the stock went from the -- some of the sales went from the stock. So I think at best, we can think of producing about 2,500 tonnes in a month.
In a month, okay. Thank you very much, sir. All the best. These were very difficult periods. But regarding PVC, can we see margin improvement in coming days in the domestic market.
Yes. We are seeing early signs of market improvements coming, but it's too early to celebrate our results. We have to see whether it is sustainable.
Sir, one fine point if I can touch upon, I was studying Epigral so I mean, are we planning to add certain products, which we are not making and Epigral is making that is Meghmani Finechemical.
We have a separate strategy game. We will look into it. We will be fitting in our chemistry, and then we will act accordingly.
[Operator Instructions] We have our next question from the line of [ Parth Chauhan ], our shareholder.
So I just wanted to know that in light of the prevailing conditions in the chemical industry, can you give some insight on the company's revenue for the upcoming periods.
So we -- it would be very difficult as of now to give a guidance on the revenue. However, having said that, whatever revenues we've done this year is on a depressed prices what we have seen. And the prices have gradually fallen over the year so there -- so yearly revenue what you see is basically average of those prices, right? Now what we are doing is we are only trying to focus on increasing volumes so far as our specialty segment is concerned where we see aggregated margins. Now that's where -- with that thought, we had invested to double our capacity into C-PVC and also debottlenecking SIOP. So to put a number in such a volatile situation would be difficult on the revenue side. But these are such drivers so far as our growth is concerned for next year. Like C-PVC, our CapEx has been done. So we would be operating at a capacity of 20,000 metric tonnes per annum. We are buying capacity of 27,000, 28,000 tonnes of production of SIOP, which we intend to reduce the time lag for sale and target of 55,000 tonnes of sales for next year. We concluded around 20,000 tonnes of sales this year, a 20% growth over there.
Understood. And secondly, I just wanted to know that moving forward, what would be the percentage contribution of Specialty chemicals to the overall revenue coming forward?
So Specialty Chemical as a percentage of revenue is quite -- is not that much meaningful because Specialty chemical is high price, low volume, with high margin, right? The idea behind the organization to put in Specialty is basically to bring stability in the bottom line. In a year like this, we saw that our total profit for the company has come at INR 195 crores, INR 193 crores, INR 194 odd-crores. Our 3 commodity segments would have only contributed INR 60 crores. The balance, INR 140 crores has come from the Specialty. The idea is basically to put but the ability to a bottom line and shift our mix towards the Specialty segment. So our target is basically to take our Specialty EBITDA to more than 50% in the outer year.
We have our next question from the line of Rohit Nagraj from Centrum Broking.
Sir, if you could just give us individual segment-wise, what is the current market environment? Where are we in terms of cycle? And how do we think margins or overall demand probably would start improving in the next foreseeable future?
So we basically have 5 major product segments. In SIOP, we have been seeing our margins very steady of around 35%. We hope that would continue or maybe slightly improve because of economies of scales of additional production coming in. C-PVC at current prices is well, we are seeing a 30% kind of a margin. PVC, we are a [indiscernible] PVC producer. The standard margin is 3% to 5% but the profit stream happens because of the inventory. So when the PVC prices go up, we then report higher profits. If the PVC prices go down, we report a loss because of the effect of inventory carry. Soda roughly is a stable business, which gives 18% to 20% kind of a margin for us. We have been bit challenged because of the technical issue to operate the plant at 80%. Once we go to a 100%, we think we should be north of 20% in terms of steady margin. And what else. I think caustic, caustic obviously, as of now, the current prices have still been falling. So quarter-on-quarter, there has been a reduction. We have now been operating caustic not for profit because it's not yielding profits. We are basically operating caustic to derive the inputs for synthetic rutile and C-PVC. That is chlorine and [ HCl ]
Right. And just from the industry demand perspective in each of the segment, I know C-PVC that its imports [indiscernible] whatever we produce, we will be able to sell it. But for the other segments, how has been the demand from the domestic market and again a similar thing from the exports for the product which are doing.
All products, I think except caustic soda, I think we are in a reasonably good place in terms of the demand. Only caustic soda, we are seeing surplus capacity in the domestic industry, which will have some pressure on the production capacity utilization and margin.
Right, right. And one last, if I can squeeze in. So now our CapEx flows are coming to fruition. How will be the incremental capital allocation we are looking at? Are we looking at any diversification into some other segments or the same segments we want to continue with higher capacity additions?
So I think as has been -- deliberations in our previous communications. We're basically trying to meet our South facility become chlorine neutral by adding value-added products. So we have some work to go additional CapEx to come in, in our South facility, to make the facility totally tied up and balanced in terms of chlorine, right, and also had growth through value-added products in our related chemistry. So that is a journey which we have to run for a year, year and a half maybe. Post that, we would have to venture into newer industries, which we've started discussion in the drawing board now. Bit premature for us to communicate that now.
We have our next question from the line of [indiscernible] an individual investor. As there is no response, we'll move on to the next participant. We have our next participant from the line of Giriraj Daga from Visaria Family Trust.
Yes. My first question is would you be able to share the volume of sales volume detail for FY '24 for each of the segments?
Could you be a bit loud, please.
Am I audible now?
Yes.
So would you be able to share the sales volume number for FY '24 for each of the segment?
I think we intend to sell our capacity in the next year -- I mean, last year or what are you talking? Talking to the years gone by?
First, I'm asking for FY '24 and then the guidance for FY '25 sales volume number.
I think we have done -- I mean, we had operated at around the capacity -- production capacity for -- we started caustic and synthetic rutile so synthetic rutile we have operated at 80% capacity, the sales were at 75%. So basically there was some inventory buildup over there. SIOP, we had worked at 65 tonnes per as capacity which is 18,000 tonnes odd. We have done -- we surpassed that capacity and we have been whiskering distance of sales to 20,000 tonnes for the last year. Caustic soda we would have done 210 tonnes to 215 tonnes all throughout the year per day and have sold that. So I would off hand probably able to tell the quantity, but I can just check and get back. C-PVC, we have done 10,000 capacity from the old plant and around 2,000 tonnes from the new plant so 12,000 that's quarter 4 new additions. Rest all, soda ash we've operated at -- I mean we sold 80,000 plus odd tonnes and we have produced that much is only. PVC at around 1 lakh tonnes production...
Okay. And the idea was to get the inter segment also. So like C-PVC we have mentioned production of about 14,500 for the full year. So I'm assuming that sales will be roughly about similar 14,000 level, right?
That is C-PVC. Yes, you're right. So our sales would be around 14,000 tonnes per annum. So we have sold -- so we have not built up inventory in PVC and C-PVC. We have built up inventory in SR and SIOP.
Okay. SIOP we have mentioned 21,570 is the production number where you have mentioned...
Yes, we have been -- we have sold around 19,800 tonnes approximately.
Okay. 19,800 and then this number is expected to go above 25, 26 this year, right?
That's what the intent is.
Okay. And C-PVC around this 14, we are looking at about roughly 18,000, 18,500, 19,000, right?
We would try to reach a number of 20,000 tonnes each year. That's the full capacity of what we've laid down. So we hope to sell the exact 20,000 next year.
Okay. And is there an intersegment between caustic soda, PVC and soda ash so I had the production number. So if the intersegment...
But then you saw for our soda ash sales May for next year go up to 90,000 tonnes. We are planning to do a stop gap arrangement till such time the technical issues gets resolved. So we will be producing around 90,000 tonnes and selling 90,000 tonnes and increase by roughly 10,000 tonnes. That's what is our planning. C-PVC and SIOP we told you, PVC will remain same 1 lakh tonne production in sales. Caustic obviously will depend on how the prices play out. And SR, which is a 40,000 tonne capacity, it obviously would depend on see if it's 100% exported that obviously would depend upon how the export plays, but we are hopeful to liquidate 90% of the capacity for next year. Which would have been -- this year it is around 28,000 tonnes of SR.
And sir, the volume you mentioned 28,000 tonnes, what was the revenue number?
For SIOP?
No, no, SR.
So SR, I mean, it will be difficult to give you a revenue number projected for next year. And since it's assumed in the caustic division, it would be difficult for me to pull out [indiscernible]
But last year, FY '24, how much was the SR revenue, FY '24 last year?
I can't say. So that number is assumed as a part of my caustic division. So product as of now, it's not readily available. We can [indiscernible] the question for us.
Okay. Second, my question is on what is the CapEx we are looking for FY '25. And if you can break between the growth CapEx and sustenance CapEx.
Yes, routine CapEx roughly is around INR 35 crores to INR 40 crores per annum. Growth CapEx is something we will just hold back. There's something of which we are in the -- I mean, we are deliberating, I think the announcement will come soon. And some efficiency CapEx we do that to the tune of around INR 15 crores to INR 20 crores.
So roughly INR 55 crore, INR 60 crore at stakes and growth CapEx as and when you decide will be additional over and above.
Yes. Yes. Yes.
Okay. And that's obviously looking at the cash flow should be funded from the internal accruals.
No, we would be -- for these CapExs, which are retained in the INR 60 crores, which we counted will be from internal accruals. The growth CapEx would be obviously funded. This time, we will go for bank borrowings for funding the growth CapEx.
Okay. Okay. So what is our average cost of debt as of now?
It's around 10%.
We have our next question from the line of [ Saket Kapoor ] from [indiscernible]
Sir, you alluded to the fact that there is an additional capacity that has been commercialized in the caustic soda segment. So currently, I think so caustic soda is also [indiscernible] continues to be net importer of caustic soda. So what's the status for the current financial year '23, '24, what have been our imports on the caustic front? And what's the likelihood because of the additional capacity that has been commercialized?
So sir, we have not added any capacity in caustic in the recent past. I think there is some miscommunication...
No, I'm talking about the country since you mentioned that the country capacity has moved up significantly that will be -- so that was my question, sir.
So I think -- see the country -- let me put it this way, when the caustic prices was quite robust, lot of the local manufacturers, they thought of investing in this particular business. Unfortunately, the demand has not risen to that extent. So there is a surplus today. And what happens when you produce caustic soda, chlorine is like a coproduct. So chlorine prices are very, very subdued. Frankly speaking, sometimes it is like a negative contribution. And that is the reason at least DCW has not put in any new money investments in caustic soda business. And well, the rest of the industry is also hard struggling. So as and when international prices firm up a little, we export. Otherwise, I think [indiscernible] production gets dropped because of the chlorine cannot be utilized you cannot produce caustic soda. So frankly, caustic production in the country gets regulated by chlorine and hydrochloric acid consumption in the country.
Do we have the import numbers for the last financial year for caustic soda.
Off hand, we don't have, but then we can possibly give it to you subsequently.
And for soda ash also said, the realizations are down significantly as the prices did corrected from the peak. So what's the scenario for soda ash since I think so the domestic demand and supply are equally balanced. And how much has been the import for soda ash also sir, if you can give some color.
Let's see, there are -- local capacity is not sufficient to take care of the total demand in the country. But all said and done internationally, there is so much of surplus in soda ash that the prices are very, very subdued. I think they have hit the bottom. It cannot go any further down. So let us hope the prices will firm up a little in the near future. But all said and done, India is a net importer of soda ash.
I think you said earlier last call or before that, you people were alluding to some unabated imports from countries like Turkey and Iran. So I would just wanted to understand what have been the quantity of import for soda ash vis-a-vis if any competitive number, if you could give? And currently, sir, a bit of March, what are the price trends for soda ash? Any color you can share, sir.
So whatever we have the numbers available with us, I think the caustic soda import -- I mean, the soda ash import for the year last that is FY '23 was around 4.8 lakh tonnes. I mean this year, I think it's 11 lakh tonnes, which is what they have. So it's almost doubled from last year. And for regions what we have spoken last time. And we think that the prices more or less would stabilize from here on as Mr. Amitabh Gupta said.
Okay. And our issue with the production facility, when are we going to correct, what are -- where are we in the midst of we getting the optimum desired quantity from our soda ash plant?
I think support from the technical disruption has come from Germany and that we have done whatever has to be done from our side. We think that the support will be in place somewhere in quarter 4 of FY '25. So we'd be 3, 3.5 quarters with a 90% kind of capacity.
Okay. And sir, for the net debt number, can you just allude the number once again? What is our net debt?
Gross long-term borrowing has come down by INR 100 crores to INR 409 crores. The APs and the cash in the balance sheet is INR 170 crores. So if you talk, we are talking of INR 280 crores of net debt.
And what is the short-term borrowing, sir?
Short-term borrowing, I think we have around INR 25 crores, INR 26 crores.
25?
INR 25 crores, INR 26 crores.
Only short-term borrowing of INR 25 crores, INR 26 crores?
Yes. When it is short-term borrowing or short-term funded borrowing.
No, no, I want the full number.
[indiscernible] is what is rotational, which is around INR 330 crores, INR 340 crores, which is [indiscernible] by creditors.
Right, sir. And our current maturities?
So the current maturity would be INR 125 -- [ INR 131 crores ] [indiscernible] which is an outlay of cash for next year.
Okay. And that we are going to pay for our cash generation only or are we going to borrow further?
So I mean we have to pay that from our generation only. I think that's what we have done this year also. So even this year being very bad, we have serviced the INR 125 crores of repayment and we have serviced INR 74 crores of interest from our current approvals only.
Correct sir. So our derisking strategy has borne the fruit for this current year and when the commodity products have declined, and it is the support from our value-added or the special chemical product that has contributed. So going ahead also, we can continue to be dependent on the synthetic rutile and C-PVC as the main contributor. Is that understanding correct, sir?
I think what we are thinking over here is a true moat for the company would be SIOP. C-PVC, obviously, is we continue to consider that as a specialty. SR obviously, there are price swings based on the market we sell. But it's obviously elevated margin level compared to our commodities. Our commodities so far as caustic and PVC has been struggling for last 3, 4 quarters.
Sir, about SIOP last point, what is our current capacity utilization levels? And how much more capacity augmentation have we contemplated?
Capacity utilization is 100% at 18,000 tonnes of what we were operating. We have sold more than our capacity this year at around 20,000 tonnes. As we complete the debottlenecking the capacity gets recasted to 27,000, 28,000 tonnes, which we intend to fill up in the next 1, 1.5 years...
Last point I missed sir, 20 to 27?
So our capacity will go up from 18,000 tonnes to 27,000 tonnes in terms of production capacity. And our sales, what we intend immediately for FY '25 would be around 25,000 tonnes, 26,000 tonnes which gets mitigated in 1 year, 1.5 years, we will be able to sell our full increased capacity in the market.
Okay. And for the price trend, sir, can you give some color how are the prices...
Collectively, we called for SIOP and it's not corrected with the market corrections of other commodities or even C-PVC. And we hope that the price is maintained at this level.
Okay. And how should we benchmark it, sir? What are the key indicators to track SIOP prices?
It's basically the international pricing. All said and done China is the biggest producer in the world. So we have to follow Chinese prices. And like locally also, we -- all said and done, it is China pricing, if you ask me.
[Operator Instructions] We have our next question from the line of [ Sriram ], a shareholder.
What is our C-PVC compound capacity?
[indiscernible]
Okay. Okay. So that has [indiscernible] okay. And sir, any further expansion in resin or compound because currently, you said we are running at full capacity.
Not yet -- we have not [indiscernible] as of now.
[Operator Instructions] As there are no further questions, I would now like to hand the conference over to the management for closing comments.
Thanks, everyone, for joining the call today, and hope we've been able to answer all your questions. If you have any further information requests, you can connect with our Investor Relations advisers at Valorem, and thank you once again.
Thank you. On behalf of DCW Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.