Clean Science and Technology Limited — Q3 FY26

Clean Science and Technology Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=LAq8PhXMyr4 Published: 3 months ago

0:00 Ladies and gentlemen, good day and welcome to the Q3 FY26 earnings conference call of Clean Science and 0:07 7 seconds Technology Limited. We have with us on call Mr. Siddhad Sikchi, executive director and promoter. Mr. Sanjay Paral 0:17 17 seconds CFO and Mr. Pratik Bora, President Commercial. As a reminder, all participants line will be in the listenonly mode. And there will be an 0:25 25 seconds opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an 0:33 33 seconds operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now 0:41 41 seconds hand the conference over to Mr. Siddhad Sikshi for opening remarks. Thank you and over to you sir. 0:49 49 seconds Thank you so much. Good evening everyone. 0:56 56 seconds We thank you all for joining our call on a Saturday afternoon. I am happy to connect with you all to discuss the 1:04 1 minute, 4 seconds business performance of the company for Q3 FY26. 1:10 1 minute, 10 seconds Let me first start speaking about the business environment. 1:14 1 minute, 14 seconds There have been challenging conditions which we witnessed in quarter 2 have continued during this quarter as well. 1:22 1 minute, 22 seconds The current quarter was marked by challenging and uncertain business environment driven by muted customer 1:29 1 minute, 29 seconds uptake, pricing pressure and tariff related uncertaintities along with incremental capacities of some of the products especially in China. 1:42 1 minute, 42 seconds We remain focused on customer engagement, long-term growth and operational discipline while maintaining 1:49 1 minute, 49 seconds the market share amid these evolving market conditions. 1:55 1 minute, 55 seconds On positive note, the house business delivered robust Y growth of 55% 2:02 2 minutes, 2 seconds driven by a favorable product mix and higher contribution from costefficient higher derivatized health polymers. 2:13 2 minutes, 13 seconds With the commercialization of our new hydrochinone and catakol plant, we expect immediate margin benefit across 2:21 2 minutes, 21 seconds the downstream products such as TBHQ and veretrol. 2:27 2 minutes, 27 seconds Let me speak on the standalone business performance on Qoq basis. On Q basis, the revenue 2:34 2 minutes, 34 seconds mod moderated to 180 crores largely due to lower sales in certain established products. 2:42 2 minutes, 42 seconds The IITA and PAT margins are at 40% and 29% translating into an IITa of 72 crores and a PAT of 52 crores. 2:54 2 minutes, 54 seconds The Q on Q decline in revenue was primarily led by softer volumes in some of our selected products 3:03 3 minutes, 3 seconds which also led to temporary reduction in the contribution of our top four products. 3:10 3 minutes, 10 seconds Consequently, top four products contribution to standalone revenue declined to 75% as against 80% in the last quarter. 3:22 3 minutes, 22 seconds Coming to the YI comparison on Yi the sales declined by 21% during the quarter. 3:31 3 minutes, 31 seconds This revenue decline was primarily led by decrease in sales volume. 3:37 3 minutes, 37 seconds The profitability margins impacted on account of change in product mix on 9 month yi basis the revenue declined 3:47 3 minutes, 47 seconds by 10% that is from 668 crores to 602 crores. 3:54 3 minutes, 54 seconds It was the reduction in revenue was attributed to a loss of a key customer in one of our product in cosmetic 4:01 4 minutes, 1 second section. also pricing pressure and lower offtake in act segment. 4:07 4 minutes, 7 seconds We believe we are well positioned to protect market share and drive sustainable growth over the long term. 4:17 4 minutes, 17 seconds On consolidated business performance on sequential basis revenue moderated by 10% to 216 crores and the consoa and 4:28 4 minutes, 28 seconds pack margins are at 33 and 21% respectively with stood at 72 crores and 46 crores. 4:37 4 minutes, 37 seconds In the sales profile, the segment wise, the performance chemical has been the largest with 72%. 4:45 4 minutes, 45 seconds Pharma agro at 21 and FMCG was 5%. 4:50 4 minutes, 50 seconds The performance segment was most impacted with volume decline in sales across MEHQ and BHA. However, please 4:57 4 minutes, 57 seconds note we have not seen any domestic competition in these products. 5:03 5 minutes, 3 seconds The FNCG segment witnessed volume decline in a product called as 4 MAP. 5:12 5 minutes, 12 seconds Key business developments in the health business volume showed steady improvement during the quarter 5:19 5 minutes, 19 seconds driven by better demand traction and effective execution. 5:23 5 minutes, 23 seconds The health business continued to grow sequentially supported by a healthier product mix and increasing contribution from higher margin products. 5:34 5 minutes, 34 seconds Building on this momentum, this quarter marked a meaningful milestone for us as we achieved a bit break even in the subsidiary Clean Phenino Limited. 5:46 5 minutes, 46 seconds We are encouraged by the progress and remain confident in sustaining this momentum. 5:53 5 minutes, 53 seconds A little on capeex update. The hydrophenone and catakol was commercialized in the month of December and customer trials are ongoing. 6:02 6 minutes, 2 seconds With commercialization of these products, we will have immediate moderation in raw material cost of both the end product that is TBHQ and veratrol. 6:13 6 minutes, 13 seconds The commercialization of the hydrochinone plant and the expansion of TBHQ are strategically aligned with our one 6:21 6 minutes, 21 seconds with our purpose-driven growth and value optimization strategy and are expected to enhance existing product margins. 6:30 6 minutes, 30 seconds Further capex timeline of performance chemical 2 is as per plan and we expect to commercialize in Q1 FY27 6:40 6 minutes, 40 seconds with our reworked process. We have sent newer samples to customer for our pharma intermediate DHDT. 6:50 6 minutes, 50 seconds While the testing is underway, we expect to have clearer outcomes over the next coming few weeks. 6:58 6 minutes, 58 seconds During the last 9 month the capital infusion in subsidiary has been 150 crores with now the total investment in subsidiary around 700 crores. 7:11 7 minutes, 11 seconds On account of corporate governance in line with our commitment to dividend payout policy the company has approved an interim dividend of rupees two per share. 7:21 7 minutes, 21 seconds We are also very happy to announce and welcome two new board members Mr. Raj Kamill and Mrs. Palavi Gokle as 7:29 7 minutes, 29 seconds successors to our earlier retiring uh independent directors. 7:35 7 minutes, 35 seconds With this we continue to uphold the highest corporate co governance standards. 7:40 7 minutes, 40 seconds With this I conclude my opening remarks and look forward to the Q&A. Thank you so much. 7:48 7 minutes, 48 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone 7:56 7 minutes, 56 seconds telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are 8:04 8 minutes, 4 seconds requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question cue assembles. 8:46 8 minutes, 46 seconds The first question is from the line of Jason Swans from ID. DBI Capital please go ahead. 8:54 8 minutes, 54 seconds Yeah. Uh sir thanks for taking my question so first question just pertains to um you know the I mean the two 9:02 9 minutes, 2 seconds capexes which we had mentioned. Now you have spoken about performance chemical 2 and one. So uh going back of course you were investing 1.5 billion in both of 9:11 9 minutes, 11 seconds these projects. So just wanted to know sir uh I mean according to your internal I mean calculations how much revenue do 9:17 9 minutes, 17 seconds we expect uh these both these projects to you know to generate in 27 and 28 just uh as a broad outline I know you 9:25 9 minutes, 25 seconds have spoken about an asset turn of two for both these projects but just 27 28 just if some specifics could be given 9:33 9 minutes, 33 seconds so typically in these fluid market conditions you would avoid giving any forward-looking statements but to just 9:40 9 minutes, 40 seconds pinpoint uh with the performance chemical one because of the prices reduction overall uh the the at 100 or 9:50 9 minutes, 50 seconds 80% capacity utilization we are looking at a revenue of 260 crores which was 9:57 9 minutes, 57 seconds earlier 320 odd crores and performance chemical to the uh capex is under I mean 10:05 10 minutes, 5 seconds we are still in the capex phase and the facility will only begin by May June and we expect after teething issues, 10:12 10 minutes, 12 seconds customer approvals, we should only see revenues in Q4. 10:20 10 minutes, 20 seconds Okay. So, performance chemical 2 will be commissioned by May June and then probably Q4 you'll get some revenue from that, right? 10:27 10 minutes, 27 seconds Not full revenue of course. Staggered revenues. Yeah. Staggered revenue. Okay. Okay. 10:31 10 minutes, 31 seconds Okay. Okay. Sure sir. And so again now with regards Yeah. And with regards to halls with regards to halls I'm sorry uh 10:39 10 minutes, 39 seconds the hindered demand light stabilizer just wanted to understand you know uh you know how much volumes and realizations are we targeting for 26 and 10:48 10 minutes, 48 seconds 27 now 26 is almost done but how much volumes and realization in dollars are we targeting for 26 and 27 10:59 10 minutes, 59 seconds I mean for this year we are already at 2,000 tons of volume for 9 months and I mean I mean you would be happy to note that year on year we have reported 11:07 11 minutes, 7 seconds a 55% growth in HA sales for this particular quarter right and our target like uh that's 11:16 11 minutes, 16 seconds typically with any new product which we are commercializing at least around 50% of utilization over 2-year period now 11:24 11 minutes, 24 seconds has been a different case because this is a totally new pro zone which we have entered into but our endeavor continues to remain to stand by that guidance. 11:35 11 minutes, 35 seconds Okay. Okay. And just a realization would be around $5 that that range or five five dollar or are we looking at a lesser realization? 11:45 11 minutes, 45 seconds Our our blended portfolio realization for this quarter has been 425 rupees a kg. 425 rupees kg. Okay. 11:52 11 minutes, 52 seconds So predominantly the sales has been driven by 770. Okay. Okay. 12:00 12 minutes Sure. Sure. And just last piece I just wanted to understand I mean you did spoke in your initial comments about uh I mean probably losing a customer in the 12:07 12 minutes, 7 seconds cosmetic segment just I missed that comment uh was it in the performance chemical segment or or what what segment was that 12:14 12 minutes, 14 seconds CG segment FMCG segment where a product called for map where we've lost a customer in China and due to secondary 12:23 12 minutes, 23 seconds impact of tariff of our end customers in India they have lost their business in United States and hence we are impacted by them as well. 12:33 12 minutes, 33 seconds Sure. Sure. Thanks. I have more questions. I'll come back in the queue. Thank you so much. Thank you so much. Thank you. Yeah. 12:39 12 minutes, 39 seconds Thank you. The next question is from the line of Sanjay Jen from ICICI Securities. Please go ahead. 12:48 12 minutes, 48 seconds Yeah. Good afternoon Sid. Uh thanks for taking my questions. Yeah, I got few. Uh let's go segment by segment. Uh first of 12:56 12 minutes, 56 seconds the performance uh you did mention two things. one uh you said MHQ and HS has a lower volume but you also mentioned that 13:04 13 minutes, 4 seconds there was no competition in the domestic market uh at the same time in the opening remark you said that China has started producing some of these 13:11 13 minutes, 11 seconds molecules. uh can you give us a complete road map on performance established molecule it is China which has got 13:19 13 minutes, 19 seconds aggressive and hence we have seen MEHQ BHA volume decline or was it general demand slowdown u what's your take on 13:28 13 minutes, 28 seconds MHQ and BHA first let me speak on MHQ so the reason 13:34 13 minutes, 34 seconds of price drop is reason is because overall pricing of hydrokinon which is 13:41 13 minutes, 41 seconds in the old process the conventional process to make MEHQ starts from hydrokinon now because the Chinese have lowered the 13:50 13 minutes, 50 seconds prices of hydrokinon all-time low price and hence the conventional process of hydrokinon to MHQ makes MHQ also at a 13:59 13 minutes, 59 seconds lower cost point to attribute to this we have no choice but to lower prices of 14:06 14 minutes, 6 seconds MHQ to compete with these emerging players of hydrochinone derived MESQ in China. 14:15 14 minutes, 15 seconds That is point number one. Got it. Are we clear on this? Okay. 14:19 14 minutes, 19 seconds Yeah. But but we said that there is still no price decline. What you mentioning the price decline in MHP is it to hit our P&L or it's already there in Q3. 14:30 14 minutes, 30 seconds It is already mentioned in Q3. So it's already we have already taken cut in uh Q3. 14:36 14 minutes, 36 seconds We have taken that hit. We have taken that we have reduced the prices because the endeavor was to keep volumes intact 14:43 14 minutes, 43 seconds but uh so this has happened BHA no there is nobody in China. Uh when I mentioned about domestic player I was pertaining 14:51 14 minutes, 51 seconds to uh the players which announced coming in MHQ or BHA or call and for map that is what I meant that we have not seen 15:00 15 minutes any competition from these players. So there is no volume loss to these players is what I wanted to mention on the call. 15:11 15 minutes, 11 seconds And reason for me BHA being slower for us is it pricing driven or it is more volumedriven unlike M2? 15:18 15 minutes, 18 seconds No no uh the BHA we've reduced uh it went lower pro in mostly in in in quarter 3. It is a very typical standard 15:26 15 minutes, 26 seconds because the drop has happened in North America. there was some tariff related concern and also because a lot of 15:34 15 minutes, 34 seconds customers prefer to have lower stocks at the end of December month. So that impact is not as huge as the other 15:41 15 minutes, 41 seconds products and you mentioned about China starting certain product you mentioned about HQ and MHQ value chain. 15:50 15 minutes, 50 seconds Yes. And for map and for map lost a customer in China and also indirect tariff which has hit our customer and hence we are hit by that. 16:00 16 minutes Got it. Got it. Uh now we forward integrate MEHQ to make BHA. Can that be 16:08 16 minutes, 8 seconds possibility in China as well now that they have started manufacturing uh MHQ? 16:15 16 minutes, 15 seconds The possibility in China is very difficult to mention today. 16:20 16 minutes, 20 seconds I I I agree. I agree Sidar. I know it's very very uh open-ended. But have you seen any sign is my question? Sorry. Not yet. Putting it so opened. 16:29 16 minutes, 29 seconds No. No. There is nothing today. There is nothing today. 16:33 16 minutes, 33 seconds Got it. Got it. uh now now coming to the uh FMCG last last quarter you mentioned 16:40 16 minutes, 40 seconds that probably that form customer is also looking to backward integrate or it's purely the US thing which has hurt or 16:48 16 minutes, 48 seconds the customer not going to backward integrate sometime can he come back or that possibility is ruled out no I mentioned even on the last call and 16:56 16 minutes, 56 seconds I'm re-re repeating it again that customer I think is dead I mean it's lost for us because they have backward integrated so that remains for China. 17:05 17 minutes, 5 seconds However, the Indian customers and the customers in other parts, the reason is because say our end product of formap is 17:12 17 minutes, 12 seconds a benzison. Now, a benzon from India has a tariff of 55% in the United States. 17:19 17 minutes, 19 seconds So, all the Indian customers who are buying has slowed down dramatically because of this severe impact of tariffs from the US. 17:30 17 minutes, 30 seconds So what is the revenue hit from the Chinese customer? So we know that that is a permanent loss and remaining can 17:36 17 minutes, 36 seconds come back wise or customer wise suggest product wise or customer wise we are not comfortable sharing. 17:47 17 minutes, 47 seconds No that's fine. I was just from modeling perspective key how much should I take as a recurring loss and how much is recoupable but but that's fine. That's 17:55 17 minutes, 55 seconds fine. But yeah, it's safe to anchor that you can take probably this quarter as a run rate going forward at a this quarter as a right run rate to look at right. 18:05 18 minutes, 5 seconds Yes. Yes. Yes. We are not factoring in any further customer loss in this run rate. 18:11 18 minutes, 11 seconds Okay. Uh now uh switching to HQ and catacol uh HQ we will use obviously for 18:17 18 minutes, 17 seconds TBHQ and uh the aggro intermediate. How much uh will be captive demand for HQ for us? That's number one. Number two, 18:26 18 minutes, 26 seconds Catacall. What are we planning with that product? 18:30 18 minutes, 30 seconds So, Catacall the current plan is to of course uh make our own in-house veratrol which anyways we are making. We are also 18:38 18 minutes, 38 seconds talking to companies within India who are uh buying catacol to make some of the derivatives because if you uh there 18:47 18 minutes, 47 seconds is no current I mean I mean no current production happening of catacol within India at the moment at the moment. So we 18:56 18 minutes, 56 seconds are also talking to these customers within India whether we can have a contractual arrangement with them. So 19:04 19 minutes, 4 seconds that are the two applications and also we are started to export we have recently got some orders from China to export catakol and that you shall see 19:11 19 minutes, 11 seconds starting from February itself it largely goes into making van I think 19:18 19 minutes, 18 seconds used to make it in a large quantity he doesn't make it anymore in India no I'm not aware of what is happening 19:26 19 minutes, 26 seconds with them but I just think uh probably uh I mean I I I have no comment on the competition but I don't see lot of 19:34 19 minutes, 34 seconds catacol available in uh the market available and all is imported currently from China. If you see the import data 19:42 19 minutes, 42 seconds currently all the catacol is imported either from China or by solv. So this is a market which we want to uh capture 19:50 19 minutes, 50 seconds first being the local player and uh giving services like just in time to the customers. 19:58 19 minutes, 58 seconds That's fair. On on HQ that entire HQ we will uh we will use inhouse or or we will also have HQ to sell in the market. 20:06 20 minutes, 6 seconds No, we will have a lot of HQ to sell. 20:08 20 minutes, 8 seconds Probably we will be only using about 15 odd% for our own captive and the balance will be sold in the market. That is both international and local. 20:18 20 minutes, 18 seconds Got it. Got it. Uh that's great. That's it. I think I got all my answers. Just one comment on EIT. 20:27 20 minutes, 27 seconds I know you mentioned that it's quite fluid and uncertain time and you don't want to give any guidance but at the start of the year you mentioned that uh 20:35 20 minutes, 35 seconds 40% AITA margin at console was something we were aspiring for uh we have hit 33 20:42 20 minutes, 42 seconds what should one look at an AITA margin for this year at the console level 20:48 20 minutes, 48 seconds I know I know I understand but with the way the pricing are being driven by the Chinese um the way things are also with 20:57 20 minutes, 57 seconds the tariffs the uncertaintities which we are seeing you know it is it would be appropriate to wait for at least for a quarter to really understand where we 21:06 21 minutes, 6 seconds stand so probably in the next quarter or the end of the next quarter we can have this discussion please no that's that's fine thank thanks for 21:14 21 minutes, 14 seconds answering all those questions so patiently and best of luck for the coming quarters thank you Sanjesh 21:21 21 minutes, 21 seconds thank you the next question is from the line [clears throat] of abija from kotic securities ities please go ahead. 21:30 21 minutes, 30 seconds Uh yeah hi good afternoon thank you so much for taking my questions. Um so uh maybe just to start with the volume 21:38 21 minutes, 38 seconds versus price breakdown you know of the revenues this quarter if it's possible to share that please on a Q and Y basis. 21:46 21 minutes, 46 seconds So on Q basis the volume decline has so out of the 13% decline majority is by 21:53 21 minutes, 53 seconds volume decline and on YI basis out of the 21% the volume decline is 19% 22:01 22 minutes, 1 second whereas the price realization is 2%. So majorly it's volume decline. 22:09 22 minutes, 9 seconds Got it. Thank you. And uh just on HAL's uh on a sequential basis what would the volume trajectory have been like u curious to you. 22:20 22 minutes, 20 seconds So uh officially on sequential basis we have witnessed 6% growth in volume. So this quarter we have almost uh crossed 22:27 22 minutes, 27 seconds 800 tons in volumes almost 810 tons is the sales volume. 22:32 22 minutes, 32 seconds And just to add over that uh the product mix has also improved meaning 944 is now almost contributing 20% to the high portfolio. 22:41 22 minutes, 41 seconds Okay. So on a revenue basis how much would would the growth have been sequentially enhanced sequentially 5 6%. 22:51 22 minutes, 51 seconds Revenue as well is it volume as well as revenues volume last quarter was 760 tons this quarter it's close to 810 tons. 22:59 22 minutes, 59 seconds Yes. Okay. And um just to understand you know this tariff impact which is happening because of destocking I guess 23:08 23 minutes, 8 seconds primarily by customers um so across the major products that we have um you know 23:15 23 minutes, 15 seconds what categories of customers are these exactly I mean in MEHQ or uh uh you know I don't know BHA gua call as well what 23:23 23 minutes, 23 seconds categories are these and are we seeing any maybe green shoots in terms of their demand in the new calendar 23:33 23 minutes, 33 seconds So I think um [clears throat] there are I mean it is there are multiple factors there. I think there 23:40 23 minutes, 40 seconds are some reasons are also impacting the sales in North America as well as in Europe also because their end product 23:48 23 minutes, 48 seconds could also be impacted by competition from the Chinese. 23:53 23 minutes, 53 seconds Okay. So that would have also led them to cut [clears throat] down their production which implies that their 24:01 24 minutes, 1 second offtake has also reduced which is which is contri I mean that is what completely impacts us as well because if their 24:09 24 minutes, 9 seconds contribution or their sales uh has reduced purchases have reduced so that impacts our sales that is one level and 24:16 24 minutes, 16 seconds of course the second is with the uncertaintity which remains on our products on tariff the customers are very careful in deciding when to order 24:24 24 minutes, 24 seconds and how much to order. So these are two impacts which we are seeing. Whether this will improve I think with tariffs 24:33 24 minutes, 33 seconds not going anywhere. So that impact of tariffs still remains and the prices which currently we are seeing in the 24:40 24 minutes, 40 seconds chemical market segment primarily led by the Chinese is also I think might remain for the quarter or two. So 24:49 24 minutes, 49 seconds the impact would be at least continue for the next two quarters if not more. 24:56 24 minutes, 56 seconds That's clear. Understood that. And uh just last couple of months from my side, one is um with regard to this four map 25:05 25 minutes, 5 seconds um you know as and when maybe demand comes back from uh you know the the customers that have been impacted by tariffs would that be adequate to sell 25:14 25 minutes, 14 seconds out our full capacity despite the loss of uh the customer we have had or will we sort of need to you know so no a lost customer will I mean 25:23 25 minutes, 23 seconds whatever volumes we used to make for him or that customer that volumes is loss is lost others might not be able to recover their volume as well as that volume. 25:34 25 minutes, 34 seconds So I think we would be seriously evaluating what can we do out of that facility which of course we are working 25:41 25 minutes, 41 seconds on or making something interesting out of these products so that we can keep utilizing these facilities. 25:50 25 minutes, 50 seconds Got it. And uh the last one from my side is uh actually regarding the uh promoter slide in the presentation. Uh you know 25:58 25 minutes, 58 seconds the title says strong visibility on longevity of promoters engagement in the business. So uh know just wanted to seek 26:06 26 minutes, 6 seconds your perspective on uh whether we should interpret that to mean that uh even after the expiry of the three-year lockin period uh that uh you know there 26:15 26 minutes, 15 seconds will not be any further uh offs from the promoters or you know any any comment you could offer on that point. Of 26:24 26 minutes, 24 seconds course, of course. So, of course the promoters I mean though there was a three-year period or so but of course I 26:31 26 minutes, 31 seconds mean all all of the promoters are equally engaged in the business and all want to work towards the well-being of 26:38 26 minutes, 38 seconds the company. So there will not be in my view there will not be any further dilution by the book family in the next couple of years. 26:52 26 minutes, 52 seconds Yeah, but I guess the locking was anyway for 3 years. So I guess the question pertains to beyond that. Um so any thoughts beyond that as well? 27:01 27 minutes, 1 second See I it's it's it is a very uh subjective decision by the family I mean in fact the boop family I am I cannot 27:10 27 minutes, 10 seconds really comment but but unlikely but unlikely that they will even sell beyond 3 years and not in these markets which I'm sure you understand. So I 27:18 27 minutes, 18 seconds think it is a it can be a delayed process by then. 27:23 27 minutes, 23 seconds Got it. No thanks. Really appreciate your frank answer to that. Thank you so much and wish you all the best. Thank you so much. 27:32 27 minutes, 32 seconds Thank you. The next question is from the line of Ankural from Axis Capital. Please go ahead. 27:39 27 minutes, 39 seconds Uh yeah. Hi Sadat. Thanks for the opportunity. Uh first question uh you know on the the geographic breakup uh if I look at the the Q3 numbers in specific 27:48 27 minutes, 48 seconds uh domestic demand slowdown probably was a bigger factor here. If I look at 9 months obviously China is also a contributor here. Uh so any thoughts 27:56 27 minutes, 56 seconds from a you know demand uptick both uh uh in the international markets as well as uh on the domestic side. 28:04 28 minutes, 4 seconds So domestic [clears throat] first let me understand the international international yes definitely both in Europe and US we have seen uh decent uh 28:14 28 minutes, 14 seconds decline closer to 15 16% uh in these markets as I mentioned right now it is 28:21 28 minutes, 21 seconds because of two factors one is tariff and other is whether they're being impacted by the global acrylic acid prices which 28:29 28 minutes, 29 seconds have come down and they are at its all-time low point so if that is the reason that is why the Europe and the uh 28:36 28 minutes, 36 seconds sales are down. Uh in terms of uh India these were just campaign 28:43 28 minutes, 43 seconds related cycles I think which have moved or postponed and it is a very uh customer ccentric thing. So uh when 28:52 28 minutes, 52 seconds these ATM cycles come back uh probably these volumes will again come back but we have not lost the volumes. I just 28:59 28 minutes, 59 seconds want to repeat this the volume is not lost it is postponed. 29:05 29 minutes, 5 seconds Uh sure Sedat and uh just you know on on the volume bit uh is it largely the macro or is there a risk of you know the 29:13 29 minutes, 13 seconds backward integration what we saw in format also playing out in uh in some of our you know leading products there. 29:20 29 minutes, 20 seconds See the leading products there are you have to understand these are performance chemical. So these are again as I mentioned these are performance chemical 29:28 29 minutes, 28 seconds which are so an acrylic acid is the biggest example where MEHQ a,000 ppm MEHQ or a 2,000 ppm hydrophenone is 29:37 29 minutes, 37 seconds used. So a backward integration to these would not make any sense to the buyer I mean to the customer. This was 29:46 29 minutes, 46 seconds particularly in a particular example of form map because Evobenzison has 60% of the cost of raw material depends on for 29:53 29 minutes, 53 seconds map and hence it made probably logical sense for them to do so but not in other segments. 30:02 30 minutes, 2 seconds Uh okay. So so it's largely the end product uh driven demand which is slowing down and possibly maybe a couple of quarters and then there should be some some uh leg up there. 30:13 30 minutes, 13 seconds Absolutely. and and uh another thing on the the pricing bit uh you know given you know what you what you shared on the 30:20 30 minutes, 20 seconds China bit as well the pricing in the overall let's say HQ value chain uh right presuming these prices are what they are 30:28 30 minutes, 28 seconds let's say even one year down right uh how how what will be your thoughts in terms of uh you know the cost economics 30:35 30 minutes, 35 seconds for us or probably the pricing and whether you know these margins probably can hover you know in this range only going ahead 30:44 30 minutes, 44 seconds If everything remains the same then this is what is going to happen. I mean if your question is if prices of finished good is going to remain at this point 30:52 30 minutes, 52 seconds assuming the raw materials are also at the current I mean the oil prices are also at low point. So if this continues 31:00 31 minutes for two quarters then the number remains the same over the next two quarters as well right so so my my question was more like let's say you know let's say three four 31:07 31 minutes, 7 seconds quarters out the volume growth recovery comes back but the pricing is what it is. uh how how much is there further sort of you know scope for us to 31:15 31 minutes, 15 seconds probably improve our costing in terms of improving the margins or probably it's the it's only the operating leverage which will play out uh on on those 31:24 31 minutes, 24 seconds will play out we will try and optimize some of the costs so these are initiatives which we are taking 31:31 31 minutes, 31 seconds constantly on trying to improve the prices but again I mean whatever we do we cannot I mean because these are so 31:40 31 minutes, 40 seconds squeezed out products for us that I don't see anywhere that we can do some magic and reduce the prices by 10%. So 31:47 31 minutes, 47 seconds it'll be very marginal what I can do but rest the [clears throat] prices are currently driven by the uh the world market itself. 31:58 31 minutes, 58 seconds Sure. Uh fair enough. And uh just lastly on health uh how has been the geographic mix now? Uh you did mention you know the 32:05 32 minutes, 5 seconds higherend products you know seeing some pickup uh which is driving their beta break even as well. uh how should we see 32:11 32 minutes, 11 seconds 30% is domestic currently Ankor 70% is domestic 30% is international but you 32:18 32 minutes, 18 seconds will start seeing as we move in quarter 4 and then subsequently in 27 this mix will start will start changing and we 32:27 32 minutes, 27 seconds expect the exports to quickly start uh start ramping up yeah we were waiting for some product approvals to come in from from Europe 32:36 32 minutes, 36 seconds and other countries so yes we have got some of these approvals And uh in fact in month of January also you will start seeing lot of shipments 32:43 32 minutes, 43 seconds happening in the United States. But uh yeah you will start seeing more action in uh the export markets. 32:53 32 minutes, 53 seconds Okay. Uh that's it for myself. Thank you and all the best. Thank you so much Ankur. 32:58 32 minutes, 58 seconds Thank you. The next question is from the line of Archid Jooshi from Noama. Please go ahead. 33:07 33 minutes, 7 seconds Hi sir. Thanks a lot for the opportunity. Uh so first question on uh MHQ I mean you did explain quite well as 33:13 33 minutes, 13 seconds to how uh MHQ prices have come off. Uh but uh sir the entire let down in HQ prices would also be a function of 33:21 33 minutes, 21 seconds phenol prices coming off. Uh would it be right to assume that with phenol maybe pricing cycle going higher uh HQ prices 33:30 33 minutes, 30 seconds will also eventually be uh uh on the higher side and you will have the uh have the MHQ prices also going upwards. 33:39 33 minutes, 39 seconds Uh so is this like a very transient situation uh a slight extension to the same question like you mentioned before. 33:46 33 minutes, 46 seconds Uh HQ also is used as a polymerization inhibitor. Uh so is there a dr is there a downtrading that is happening from 33:53 33 minutes, 53 seconds MEHQ to HQ which might have uh aided into this volume loss? 33:58 33 minutes, 58 seconds No no no [clears throat] okay there are a couple of questions you've asked. Let me start by the last one. See these processes of interchangeability 34:07 34 minutes, 7 seconds of performance additives is not I mean I'm sure people would have done this in the past but these are now set rules of 34:14 34 minutes, 14 seconds the game. So I don't think those shift has happened that people have replaced MHQ2 to HQ. So that has not happened number one. 34:23 34 minutes, 23 seconds Number two, yes the phenol prices has come off. But I have seen these phenol prices couple of time in my 20 year of 34:31 34 minutes, 31 seconds working career. But the prices of HQ and MHQ which I'm seeing today are the prices which were not even these are not 34:39 34 minutes, 39 seconds even I mean they are below 20 or low prices. So what I'm trying to mention is just raw material play is not playing 34:47 34 minutes, 47 seconds out. There is also competition and the prices of lower prices of hydrokinon is also pushing um lowering prices of MHQ 34:56 34 minutes, 56 seconds and hence we have to lower the prices to keep our volume up uh in these markets. 35:05 35 minutes, 5 seconds Got it. Got the fluidity in the situation. I I get your point. Uh so uh secondly on uh the the hydroonine 35:13 35 minutes, 13 seconds catacol plant that we have had and I I believe uh we we did have plans to uh have better yields of HQ and catacol 35:22 35 minutes, 22 seconds compared to the competitor. Uh where would we be in that uh uh learning curve or have we already achieved that uh uh 35:30 35 minutes, 30 seconds you know yield that we had expected earlier? 35:33 35 minutes, 33 seconds So, so we I can say that probably we are better than the competition but we are still a little away from where we had 35:41 35 minutes, 41 seconds expected to be and probably all the endeavors we are still trying to figure out how to reach at that point which we had anticipated. So actually we are in 35:49 35 minutes, 49 seconds midpoint between the competition and the perfect scenario. We are actually in a midpoint and probably in the next couple 35:57 35 minutes, 57 seconds of months we should reach uh the better yield uh process. 36:03 36 minutes, 3 seconds Uh sure understandably uh sure. So the same question on on HQ and Catacall uh 36:10 36 minutes, 10 seconds on a overall margin basis uh would we be at par to what we are doing uh in terms of EIDA margin uh uh or 36:19 36 minutes, 19 seconds no no yeah no no I don't think uh no that EIDA margins will not be at 36:27 36 minutes, 27 seconds those extent uh they would be lower that they will be lower uh I think 36:36 36 minutes, 36 seconds they'll better than health lower than the parent business so again they'll be like midpoint and with these current prices of hydrophenon which we are 36:43 36 minutes, 43 seconds currently seeing and because they are declined quite a bit so I think it is again a very fluid condition to mention really on the iota front probably 36:52 36 minutes, 52 seconds another quarter or so to understand where it all stabilizes how our plans also stabilizes and I think we'll have some better picture 37:01 37 minutes, 1 second sure sir uh one last on uh health uh I believe in the previous quarter uh A few global majors had taken a a price hike 37:09 37 minutes, 9 seconds in Hal. Uh is the overall global situation in Hal improving uh by that uh price action that they had taken? Uh 37:18 37 minutes, 18 seconds anything that would like to comment on how margins and prices can be in house uh let's say uh one year down the line. 37:25 37 minutes, 25 seconds I think those announcements were made yes we have also seen those public announcements but they have not really translated into reality. So we have to 37:35 37 minutes, 35 seconds just keep a wait and watch scenario but they have not been implemented by the competition yet. 37:43 37 minutes, 43 seconds Understood. So the situation broadly is uh you know status quo uh on the total supply demand dynamics of files let's say. 37:52 37 minutes, 52 seconds Yes. So we have to keep working and keep improving our wallet share and that is what we are doing and despite of those low prices I think the improvement has 38:00 38 minutes completely happened because of our improvement in our process efficiency and of course because these higher grades have also started picking up. So 38:08 38 minutes, 8 seconds I think this will keep improving over the next few quarters. 38:13 38 minutes, 13 seconds Understood. Sir, would it be fair to assume that our cost competitiveness in health uh will be better than uh uh our 38:20 38 minutes, 20 seconds peers globally uh or we are still in that uh learning curve uh to improve our uh you know uh yields or maybe uh cost uh to that extent. 38:32 38 minutes, 32 seconds See, I think we are still see it is very difficult to understand the the competitive processes of the other competition and what are their yields 38:39 38 minutes, 39 seconds and norms. But what I believe is we are still not at the most optimum situation because I think we are still improving like if you can see between Q2 and Q3 38:48 38 minutes, 48 seconds also there is an improvement in the process efficiencies and I believe there is still more scope for us and uh I think that is what makes a little 38:57 38 minutes, 57 seconds difference that because these products are all created inhouse we have an ability to improve the process further and the endeavor is to further improve 39:05 39 minutes, 5 seconds these so that it'll start meaningfully impacting our EITA levels. 39:12 39 minutes, 12 seconds Got a point sir. Uh thanks a lot for answering all the questions and wish you all the best in these tough times. Thanks. Thanks a lot. Thank you so much Arish. 39:20 39 minutes, 20 seconds Thank you. The next question is from the line of Balam Murali Krishna from Oman Investment Advisors. Please go ahead. 39:36 39 minutes, 36 seconds You can go ahead with the question. your unmute Bala 39:45 39 minutes, 45 seconds as there are is no respon from Bala's side we move to the next question the next question is from the line of Jason 39:53 39 minutes, 53 seconds Sans from IDBI capital please go ahead yes yeah sir thank you so much for taking my question again sir you 40:01 40 minutes, 1 second explained very much detail about the HQ prices and how you know that those prices are going down now I understand that that they're on an all-time low. 40:09 40 minutes, 9 seconds Just wanted your take on sir I mean there's a lot of talk about this China anti-involution drive going on where you know they'll basically focus on getting 40:16 40 minutes, 16 seconds back to market dynamics. Do you expect by any chance this drive to basically at least gradually there'll be some uptake 40:23 40 minutes, 23 seconds in those HQ prices and it'll help you gain pricing advantage. 40:28 40 minutes, 28 seconds See I I mean I have also been reading a lot of articles but I think it's better to see in reality than to 40:34 40 minutes, 34 seconds make assumptions because uh you know what is said and what really happens is is absolutely two different scenarios. 40:43 40 minutes, 43 seconds So all our costings and all our pricing currently we are based at the current market situation rather than uh speculating of any price increase from the Chinese competition. 40:54 40 minutes, 54 seconds Sure sir. Sure. Sure. Okay. Okay. And uh so just uh the next question I mean I understand both these 1.5 million 41:02 41 minutes, 2 seconds capaces which they have been a little bit delayed. I understand tariff thing and you have explained that the situation is fluid. Now now I just wanted to understand sir uh the 41:11 41 minutes, 11 seconds performance chemical one at least must be ready are we expecting it to generate revenue by when do we expect in 27 to 41:18 41 minutes, 18 seconds for it to generate any revenue and how much? you'll start seeing so so so uh the plan started currently we are using 41:26 41 minutes, 26 seconds because there are teething issues the product is slight offsp spec but we are currently consuming all the products inhouse so where I was importing say 41:34 41 minutes, 34 seconds probably around 70 80 tons of hydrophenon per month you would have seen that those imports have stopped completely uh same is the case with 41:42 41 minutes, 42 seconds katakol which we were importing uh to make our own veratrol so these imports have stopped completely so all these current products are being serviced by 41:50 41 minutes, 50 seconds our own subsidiary to the parent company. That is point one. And point two is we'll start seeing sales starting 41:58 41 minutes, 58 seconds in the month of February and of course gradually increasing in March. And of course we expect uh decent numbers coming in FY27. 42:10 42 minutes, 10 seconds Okay. But performance chemical tool you expect revenue only in the last quarter. 42:14 42 minutes, 14 seconds That's been a little bit delayed from that perspective, right? 42:17 42 minutes, 17 seconds Yes. I think we had anticipated that we will start the production in March but now I feel with the current scenario we'll start by May. So there has been a 42:26 42 minutes, 26 seconds two month or 60-day delay probably another 50 odd days for water trials and commissioning. So yeah there has been a quarter delay. Yeah you're right. 42:37 42 minutes, 37 seconds Right. Right. Okay. Okay. Sure sir. 42:39 42 minutes, 39 seconds Thanks. Thanks a lot for taking my questions. Thank you. Thank you. 42:43 42 minutes, 43 seconds Thank you. We'll take the last question from the line of Manish, an individual investor. Please go ahead. 42:52 42 minutes, 52 seconds Hey. Hi sir, can you hear me? Yeah, we can hear you Manish. 42:58 42 minutes, 58 seconds Yes. Hi sir. Uh sir, I'm a retail Englisher. I I have written a mail to you as well. So, so what I understand 43:06 43 minutes, 6 seconds from the layman term as a layman term that we have some loss from China because of some customers and we have 43:13 43 minutes, 13 seconds some loss from us right so that's the reason uh we have because of the tariff so we are losing revenues on on top of 43:22 43 minutes, 22 seconds it because of the Chinese competition we are losing revenues right so we are hit from all the ends now uh what do you 43:30 43 minutes, 30 seconds what message do you give to a retail investor who have been investing in you since long when can we see the margin 43:38 43 minutes, 38 seconds that we used to do around revenue growth that we had around 21 to 23 could come back. 43:45 43 minutes, 45 seconds So u man is uh thank you for your question. Uh, of course the endeavor for 43:53 43 minutes, 53 seconds us is always to keep making more profits but alongside the endeavor is also to 44:00 44 minutes retain our market share in the segments because it has taken us 20 long years to build these markets to retain these 44:09 44 minutes, 9 seconds customers. But the macroeconomics is something which is which is very difficult and which is beyond our 44:16 44 minutes, 16 seconds control. So a tariff of 55% in United States was never anticipated. The over capacities in China was never 44:24 44 minutes, 24 seconds anticipated and all this has led to margin reduction. However, the endeavor 44:31 44 minutes, 31 seconds is to come up with new products. The endeavor is to to derisk from couple of products to more products. uh uh the 44:40 44 minutes, 40 seconds endeavor is to keep performing and doing R&D and to get more and more products online so that the revenues built up 44:47 44 minutes, 47 seconds keep happening. Uh the endeavor is to not lose a customer to a competition. Um 44:53 44 minutes, 53 seconds so these are some things which I as a promoter have to do uh to make sure that 45:00 45 minutes my business does not I mean you know it's not a quarter business but that we run for a couple of years. I mean we 45:08 45 minutes, 8 seconds have to look for a fiveyear strategy in the company. So with all this yes there has been a hit but um we are there I 45:16 45 minutes, 16 seconds mean uh we are healthy in terms of cash flow company still sitting on 500 450 45:23 45 minutes, 23 seconds crores of cash. uh the projects which we had mentioned uh have all happened beyond I mean within uh probably a less 45:33 45 minutes, 33 seconds than a quarter delay but all the capexes have happened at the project cost which we had anticipated despite of all these 45:40 45 minutes, 40 seconds volatile times. So I mean we are trying our best I can only say that and uh even our endeavor is to reach those 45:48 45 minutes, 48 seconds profitability but but with the macroeconomics in hand I mean we have I mean some things which we cannot control we cannot control. 45:57 45 minutes, 57 seconds Agree agree sir I've read about you a lot you know I'm a great fan of yours uh how you built up this company along with the boo family so I respect that you 46:06 46 minutes, 6 seconds know but I was just coming from a little point of view you know many many retailers I've seen many friends of mine everyone is scared everyone is scared 46:14 46 minutes, 14 seconds what will happen next okay so that's the reason I thought of asking you and second uh one more question that I want to ask you is you know the the trade 46:23 46 minutes, 23 seconds deal that we had right as of now with Europe that help us right sir that might help us to negate some 46:30 46 minutes, 30 seconds traffic or that might help us uh if you compare to China has some uh tariffs if if you see China has some tariff in euro 46:39 46 minutes, 39 seconds Europe EU but we not have that tariff so do you see that playing around and and why sorry sir 46:48 46 minutes, 48 seconds yes I agree with you that would play but of course uh our I mean this I think this will only start in 27 I think this 46:56 46 minutes, 56 seconds still lot of paperwork has to be done between the two countries. So it is not going to I mean you will not see anything on immediate basis. Uh this 47:04 47 minutes, 4 seconds will I think only start in 27 and the trade impact would have a 5 and a half% 47:10 47 minutes, 10 seconds to 12% is the tariffs which we pay versus the and also the Chinese. So if those will come out then of course it will help the Indian chemical industry 47:19 47 minutes, 19 seconds for sure versus the Chinese of course. 47:22 47 minutes, 22 seconds Yeah. Yes. So, so we have we have one what do you say positive group for the FDA and also why so why don't we capture 47:29 47 minutes, 29 seconds the market of Australia we uh have you any plan to do that or Canada by any chance because you know by the condition 47:37 47 minutes, 37 seconds moving on Canada is anti- US sorry sir no the point is sir Australia or Canada 47:45 47 minutes, 45 seconds they don't have such acrylic acid plants even for that matter even India does not India has only one acrylic acid 47:53 47 minutes, 53 seconds Plus all these blends of pet food industries where we supply there is they are users but they are not producers. 48:01 48 minutes, 1 second Hence Australia is not a market for our products at the moment. 48:06 48 minutes, 6 seconds Okay sir. Okay sir. Thank you sir. All the best. We we hope to see uh we hope to grow with team sir. Thank you sir. 48:16 48 minutes, 16 seconds Thank you so much Manish. Thank you so much. 48:20 48 minutes, 20 seconds Thank you. I now hand the conference over to Mr. Sedat Sikshi for closing comments. Over to you sir. 48:27 48 minutes, 27 seconds Uh so thank you all for spending time with us on Saturday. Um I understand there has been uh I mean it has not been 48:35 48 minutes, 35 seconds a greatest quarter for us. I think we have had a glitch in our quarter 3 also as well as in quarter 2. But I can only 48:42 48 minutes, 42 seconds assure that we are working towards improving the margins, improving the revenues, bringing new products online 48:50 48 minutes, 50 seconds as quickly as possible. Uh trying to maintain our capeex cycles and I think we are trying to do as a team whatever 48:58 48 minutes, 58 seconds best can be done and uh I think that's all from our side. Thank you so much on behalf of Clean Science and 49:06 49 minutes, 6 seconds Technologies Limited. That concludes this conference. Thank you for joining us and you may now disconnect your lines. 49:14 49 minutes, 14 seconds Thank you so much.