Clean Science and Technology Ltd — Q4 FY26

Clean Science and Technology Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=htnUWP7x19k Published: 1 hour ago

0:02 2 seconds Ladies and gentlemen, good day and welcome to the Q4 FI26 earnings conference call of Clean Science and 0:09 9 seconds Technology Limited. We have with us on the call Mr. Sadhhat Siki, managing director and promoter, Mr. Sanjay Parka, 0:18 18 seconds CFO and Mr. Pratik Bora, President Commercial. 0:22 22 seconds As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation 0:30 30 seconds concludes. Should you need assistance during the conference call, please signal an operator by pressing star then 0:37 37 seconds zero on your touchdown phone. I now hand the conference over to Mr. Sadhar Siki for opening remarks. Thank you and over to you sir. 0:47 47 seconds Thank you so much. 0:50 50 seconds Good evening everyone. Thank you for attending our uh quarter 4 and 12 months FY26 earnings call. 1:00 1 minute I sincerely appreciate your continued trust and engagement and it is our pleasure to connect with you once again. 1:07 1 minute, 7 seconds Let me speak briefly on the business environment. 1:10 1 minute, 10 seconds The Q4 FY26 has been a resilient quarter for the company marked by strong delivery despite challenging global 1:18 1 minute, 18 seconds environment and geopolitical uncertaintities. 1:23 1 minute, 23 seconds The challenging conditions that we had highlighted during the earlier part of the year continued for a large part of FY26 1:32 1 minute, 32 seconds with muted customer uptake, pricing pressure in selected products and selected geographies and of course tariff related uncertaintity. 1:41 1 minute, 41 seconds At the same time, we remain focused on customer engagement, process efficiency, backward integration and protecting our 1:48 1 minute, 48 seconds market position in our key product categories. 1:53 1 minute, 53 seconds On other side, the quarter reflected sequential improvement in overall performance largely driven by increase 2:00 2 minutes in customer in volume of take in our products. 2:05 2 minutes, 5 seconds We continue to see scale in our health business segment which saw the highest ever revenue in Q4 FY26 2:14 2 minutes, 14 seconds with continued improvement in favorable product mix during this quarter. In line with our disciplined and shareholder aligned 2:22 2 minutes, 22 seconds approach, the promoter directors voluntarily chose to forgo substantial portion of their performance bonus for this particular financial year. 2:35 2 minutes, 35 seconds Consequently, the performance bonus for FY26 is reduced to less than 1% of PBT as 2:43 2 minutes, 43 seconds against entitled 4% PBT for this financial year. 2:51 2 minutes, 51 seconds On standalone business performance starting from Q on Q comparison the revenues improved by 8% to 193 2:59 2 minutes, 59 seconds crores largely due to increase in customer uptake in our products. 3:06 3 minutes, 6 seconds The IIDA and PAT margins are at 46 and 40% respectively translating into a IIDA 3:14 3 minutes, 14 seconds of 88 crores and a PAT of 77 crores. 3:19 3 minutes, 19 seconds This revenue increase is primarily led by increase in volumes. 3:26 3 minutes, 26 seconds Coming to Y the sales declined 19% during the quarter and this was 3:31 3 minutes, 31 seconds primarily decline led by sales volume on 12 year on 12 month yi front the 3:40 3 minutes, 40 seconds revenue declined 12% from 900 crores to 796 roughly 800 crores 3:48 3 minutes, 48 seconds this is special this is attributed to loss of key accounts key account or a particular 3:55 3 minutes, 55 seconds per customer in an FMCG which is four map product lower offtake and pricing pressure in our key products 4:07 4 minutes, 7 seconds on consolidated business performance the consolidated revenues increased by 14% to roughly 246 crores and the 4:16 4 minutes, 16 seconds consolidated IITA and margins are at 33 and 28% respectively in absolute terms that is 96 and 58 8 crores respectively. 4:28 4 minutes, 28 seconds On 12 month yi basis, the revenue the revenues remained flattish at about 945 4:35 4 minutes, 35 seconds or gross against the standalone revenue was possible due to consistent scale up in our house business. 4:46 4 minutes, 46 seconds The consolidated IBIDA and PAT margins are at 37 and 24% respectively which 4:53 4 minutes, 53 seconds amounts to 355 and 230 crores respectively. 5:00 5 minutes The key business developments the clean pheninoam limited reported a positive IIDA of 7 crores in Q4 marking its first 5:09 5 minutes, 9 seconds quarter of positive IIDA following an IIDA break even performance in the preceding quarter. 5:17 5 minutes, 17 seconds The hydrokinon catacol plant was established in December 25 is under initial stabilization phase and we 5:25 5 minutes, 25 seconds expect the plant to achieve optimal operations with improved productivity and efficiency in the following one to 5:33 5 minutes, 33 seconds two quarters. The product quality approval from customers have already been secured. 5:40 5 minutes, 40 seconds In the current quarter, the hydrochinone and catacol imports are fully replaced by captive HQ catakol production for our 5:48 5 minutes, 48 seconds products TBHQ and veritrol leading to moderation in raw material cost. 5:55 5 minutes, 55 seconds A little on capeex update. 5:58 5 minutes, 58 seconds Our capeex timeline of performance chemical 2 is as per plan and we expect to commercialize by September 26. 6:07 6 minutes, 7 seconds The change in plant commercialization timeline is attribute due to to scarce manpower resources as labor movement is observed due to increase in gas prices. 6:20 6 minutes, 20 seconds The clean chinoam is further backward integrating in some of the key starting m starting material or raw materials 6:27 6 minutes, 27 seconds which are required for our health production. This strategic initiative is aimed at ensuring uninterrupted supply 6:35 6 minutes, 35 seconds of essential inputs while strengthening our margins and overall operational efficiency 6:42 6 minutes, 42 seconds and this initiatives will be implemented with minimal capital expenditure and in-house develop processes. 6:51 6 minutes, 51 seconds We are now planning to also debottleneck our some of our health product lines and also setting up a dedicated product line 7:00 7 minutes for HAL 2020 which is a key intermediate product for higher grade of noral 7:06 7 minutes, 6 seconds product. Thus we are enlarging our existing HAL product portfolio while enhancing our presence in value added specialtity chemistries. 7:18 7 minutes, 18 seconds During this year the capital infusion in subsidiary was approximately 200 crores with total investments of subsidiary now standing at 750 crores. 7:31 7 minutes, 31 seconds I am glad to inform you that the board in today's meeting has declared a final dividend of rupees 4 per equity share 7:39 7 minutes, 39 seconds amounting to 400% of face value of rupee 1 per share. 7:45 7 minutes, 45 seconds With this I conclude my opening remarks and looking forward to the Q&A session. Thank you so much. 8:09 8 minutes, 9 seconds So shall we open the floor for Q&A? Yes, you can please. 8:16 8 minutes, 16 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 touchstone 8:24 8 minutes, 24 seconds telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are 8:32 8 minutes, 32 seconds requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question assembles. 9:03 9 minutes, 3 seconds The first question is from the line of Sanjay Chin from ICIC securities. Please go ahead. 9:10 9 minutes, 10 seconds Yeah. Hi. Uh good afternoon. Uh Sar. 9:12 9 minutes, 12 seconds Thanks. Thanks for taking the call. Uh and my questions. Uh first just can you help us with the segmental numbers? I 9:20 9 minutes, 20 seconds think uh uh that you used to give in the presentation uh that will be really useful to make the analysis. 9:30 9 minutes, 30 seconds So basically you want the performance versus performance pharma FMCG and others. So 9:39 9 minutes, 39 seconds so Sanjesh uh performance segment contributed 72%. Okay. 9:44 9 minutes, 44 seconds The second segment pharma agro 19% and FMCG balance 9%. 9:49 9 minutes, 49 seconds This for the quarter or the full year Pratik? This for full year. Okay, for the quarter. 9:56 9 minutes, 56 seconds Uh quarter I think. Okay, I'll get back to you on quarter number. But effectively the presentation also we put for the full year. Uh so basically full 10:03 10 minutes, 3 seconds year minus 9 months you can get to a quarter number. 10:06 10 minutes, 6 seconds I can do I can do I can do that. I got it. I got it. But that's that's super useful. Uh Suda just wanted to get your view on MAHQ now that HQ prices have 10:15 10 minutes, 15 seconds gone up so sharply. Um how should we see the MAHQ competitiveness for us? Uh the phenol price has also gone up but 10:23 10 minutes, 23 seconds relatively do you think your position has strengthened in the market in uh post this West Asia and how should we see MHQ market in FI27? 10:34 10 minutes, 34 seconds No, I agree with you because of the hydrokinon prices going up it definitely helps us in MEHQ but also to be honest 10:42 10 minutes, 42 seconds with the capacities of hydrokinon in China and they are not as impacted with the raw material prices which we have in 10:49 10 minutes, 49 seconds India. So in view of this we have to calibrate our prices in a manner that we are able to balance all the positions 10:58 10 minutes, 58 seconds and still keep our the market share within China as a market. 11:05 11 minutes, 5 seconds Okay. Um, so so what we are telling is that we are able to fully absorb the 11:12 11 minutes, 12 seconds increased phenol prices or do you think that we are able to pass? We are able to pass some but wherever there has been 11:20 11 minutes, 20 seconds long-term contracts in those cases we have not been able to pass. 11:27 11 minutes, 27 seconds And and how long are this contract for us? Sir, it depends on customer to customer. 11:33 11 minutes, 33 seconds There are some contracts which are half yearly, some there are full yearly. 11:38 11 minutes, 38 seconds So as they expire, we will renegotiate, right? Absolutely. 11:43 11 minutes, 43 seconds Got it. Got it. So but slowly steadily we will pass on a lot of it. Correct. Would be the right understanding. Yes. Yes. Yes. We definitely will. 11:51 11 minutes, 51 seconds Got it. Got it. Uh second on the hands. 11:54 11 minutes, 54 seconds It's very heartening to see a very sharp increase in the uh revenue for health when we do console minus standalone. Can 12:01 12 minutes, 1 second you just give us a color um what led to sudden jump and how sustainable these number are what volume we did which 12:09 12 minutes, 9 seconds category of house did very well for us domestic versus yeah I will not get into too much of product wise and this due to competitive 12:18 12 minutes, 18 seconds nature of the business but I can tell you this was not I mean actually we have this was a little delayed response I 12:26 12 minutes, 26 seconds mean we were really hoping this response to come a few quarters prior so This is not actually surprising but it is just 12:34 12 minutes, 34 seconds delayed. So of course as customers were evaluating big accounts were testing trials all validations that took a large 12:43 12 minutes, 43 seconds portion of this time but now that as I said you can see our export growth picking up earlier we were predominantly 12:51 12 minutes, 51 seconds Indian substitute we were only trying to cater majorly to Indian market. So we were roughly 80% India, 20% export. 13:00 13 minutes Today we stand at 50/50 domestic, 50% export. So our exports have picked up dramatically. And I think over the 13:08 13 minutes, 8 seconds period our expensive grades of health are also being uh I mean we have been able to also start selling those on 13:17 13 minutes, 17 seconds larger scale and hence we are also now in a process of debottlenecking and also putting more capeex wherever needed to get into backward integration of these products. 13:27 13 minutes, 27 seconds I thought we were significantly backward integrated. 13:31 13 minutes, 31 seconds Um yeah actually we are but you know then there are some of the key intermediates which typically not all health producers 13:40 13 minutes, 40 seconds make but we have found that it would further strengthen our positions and we are getting into those intermediates as well. 13:49 13 minutes, 49 seconds Got it. Got it. What was the house volume? Because we were looking at uh like 250 metric ton per month. Uh what 13:57 13 minutes, 57 seconds is the I think overall we did about over,000 plus tons in this for the quarter. Yeah. Yeah. Yeah. 14:06 14 minutes, 6 seconds And and as you said when you say export which are the geographies where we are seeing an increase majorly Europe, Middle East and of course United States. 14:16 14 minutes, 16 seconds Okay. Got it. So there are still untapped regions now where we are exploring like majorly Southeast Asia, 14:24 14 minutes, 24 seconds Latin. So these are some markets which now we want to explore. 14:29 14 minutes, 29 seconds Just one question here. Uh for HS we use acetone and acetone as a commodity has seen a very sharp increase in prices. 14:36 14 minutes, 36 seconds Absolute sharp increase and same is the case with ammonia because light stabilizers are amine based and so as the case with ammonia. 14:46 14 minutes, 46 seconds So how should we see the pricing competitiveness for us and ability to pass on in a market considering that we are a new kid on the block? 14:55 14 minutes, 55 seconds See I can tell you very I mean in a simple manner you have seen quarter three we were IITA neutral in quarter 15:01 15 minutes, 1 second four we made an of 8 crores despite all prices shooting up in the month of March. So more or less we are now quite 15:09 15 minutes, 9 seconds competitive. We are able to pass prices at some point not 100% but I think with the efficiencies which have picked up 15:17 15 minutes, 17 seconds and as the volumes grow all these in combination will help us in this financial year and we are very hopeful 15:24 15 minutes, 24 seconds that will be a good I mean good business decision for us. 15:30 15 minutes, 30 seconds Got it. Just just one final question before I join back in the queue. Um how should we look? So last year was a flattish year for us. Um how how do we 15:39 15 minutes, 39 seconds envisage FI27 panning out uh for us with health finding traction being in the 15:45 15 minutes, 45 seconds business? How should we see the uh IITA and revenue growth in FI27? 15:51 15 minutes, 51 seconds We are waiting for this Chinese summit to end then this Russian Putin Chinese again summit to end to understand where the world stands in terms of crude oil. 16:01 16 minutes, 1 second What is our supply positions in terms of crude oil? You know, we are so dependent on macro that it is very difficult to 16:08 16 minutes, 8 seconds really tell you how do we see this financial year. This is going to be a very tricky financial year for chemical industry in my view. 16:17 16 minutes, 17 seconds But generally I thought inflation is a good scenario to be than the deflation. 16:21 16 minutes, 21 seconds It is it is it is very good but it has to be across the world. It does not work 16:27 16 minutes, 27 seconds when price differentiation between Hello. Yeah. If if 16:36 16 minutes, 36 seconds China gets better crude oil positions from some part of the geography and which we are we are we don't get in 16:44 16 minutes, 44 seconds India you know then there will always be a price test I mean arbitrage between the Chinese producers for commodity 16:51 16 minutes, 51 seconds versus us. This is the major game plan where it spoils the parties. 16:58 16 minutes, 58 seconds I hope you are able to understand. No, I I got your point. But have we seen that happening in in last one one and a half month? 17:06 17 minutes, 6 seconds I can tell you we bought majority of phenol and acetone from China which was never the case in last many years. 17:16 17 minutes, 16 seconds There was a sign significant pricing differential in Indian available versus absolutely absolutely and the delta in 17:24 17 minutes, 24 seconds commodity chemicals the delta is not too high but this time the arbitrage was very high. 17:29 17 minutes, 29 seconds So I mean just to give you a correlation so quickly the prices in China are so I mean quite better for these commodities 17:36 17 minutes, 36 seconds that we were able to import into India and still be competitive against the guys who are just placed few 100 kilometers away from us. 17:46 17 minutes, 46 seconds Got it. But has that reduced over a time or you still see that scenario persist in India? 17:53 17 minutes, 53 seconds At least in June I can tell you they are more competitive. Okay. 17:58 17 minutes, 58 seconds Okay, got it. Got it. Thanks. Thanks for answering all those questions and best of luck for the coming quarter. 18:06 18 minutes, 6 seconds Thank you so much. 18:10 18 minutes, 10 seconds Thank you. Next question is from the line of Ankor from Access. Please go ahead. 18:16 18 minutes, 16 seconds Uh yeah, hi Sad. Thanks for the opportunity. Uh first question, you know, continuing uh with health there. 18:22 18 minutes, 22 seconds So uh given that you know we have seen good traction uh in the export markets here uh would be fair to say that Q4 18:30 18 minutes, 30 seconds should be a a base case revenue here for us and incrementally things should only improve and uh uh and second 18:39 18 minutes, 39 seconds yeah and and this will also is there you know a significant benefit that we are seeing from the distribution tie-up that we had done or is it the the older ones 18:48 18 minutes, 48 seconds wherein you were doing direct touch up touch with the customers and those are sort of you know both uncle it's always a combination right in 18:56 18 minutes, 56 seconds sales larger accounts direct accounts distribution channels even when distributions are now increasing I mean 19:03 19 minutes, 3 seconds you know they started with small volumes now their confidence have picked up they are now able to maintain more safety stocks supply more to the customer so 19:11 19 minutes, 11 seconds you know it's a combination of both right but in totality we are now known as a good supplier of health both not just 19:20 19 minutes, 20 seconds India but also glo global player and now we are also seeing a lot of inbound interest coming from customers so it's a 19:28 19 minutes, 28 seconds good thing for us I think sure and uh you know given given the traction now your earlier uh you know 19:36 19 minutes, 36 seconds guidance of let's say optimal utilization in 3 years uh that stands or probably we can look at you know we we 19:44 19 minutes, 44 seconds will be looking at increasing capacity in health further to capture the opportunity see I think when we try and increase capacity we have a little longerterm 19:52 19 minutes, 52 seconds view because you know increasing capacities in chemical businesses do not happen in few weeks you know it typically takes couple of months 20:00 20 minutes sometimes a larger period when you have to debottleneck in a running plant. So with all these view we have started to 20:07 20 minutes, 7 seconds understand that there will be a phase where we will run out of these capacities and hence we have already started looking at debottlenecking or 20:16 20 minutes, 16 seconds getting backward integrated in some of our products which I mentioned during the uh start of the call. So with all 20:23 20 minutes, 23 seconds this we feel or I personally believe this can be a good traction for the company in the coming years. 20:32 20 minutes, 32 seconds Okay fair enough. uh from a uh you know the other capeex that we were doing uh you did highlight uh you know push back 20:40 20 minutes, 40 seconds in uh uh in the water treatment product the performance to part uh to September there right uh if you 20:47 20 minutes, 47 seconds can help you know the the timelines of you know capeex and if at all with the current volatility there is any change in revenue uh timelines etc that will be 20:56 20 minutes, 56 seconds helpful so I think typically validation Q3 commercial production I mean commercial some business Q4 and then pick up FY28. 21:08 21 minutes, 8 seconds So you know it's a standard process. 21:12 21 minutes, 12 seconds Sure. This is for the performance uh you know to the HQ cate you mentioned one two quarters we'll take for the product validation. 21:20 21 minutes, 20 seconds Yeah. So that has started in some of the accounts. I mean I'm sure you've seen some exports also happening. We are already supplying within India markets 21:27 21 minutes, 27 seconds you know. Plus we are using all all our captive needs are now fully satisfied by our own uh uh in-house production but 21:36 21 minutes, 36 seconds but we are still not at the point where we want to be. So I think I mean chemical plant it takes some time probably two more a quarter or two will 21:45 21 minutes, 45 seconds take to completely optimize and be running at the full scale capacities which we were looking for. 21:52 21 minutes, 52 seconds Fair enough. And the last one, the pharma one. Uh the time that that plant already got commissioned, right? 21:58 21 minutes, 58 seconds No, the pharma we have already refurbished. We realized there is too many issues which we did not anticipate 22:06 22 minutes, 6 seconds and fortunately we were able to refurbish those plants very quickly to make the health intermediates where we 22:13 22 minutes, 13 seconds were dependent on just some Chinese sources. So all those refurbishment will happen in the next couple of months and 22:20 22 minutes, 20 seconds those plants and those are better returned to us rather than keeping that pharma intermediate. 22:27 22 minutes, 27 seconds Okay. So as a product you know that intermediate is no longer there on the no we drop 22:35 22 minutes, 35 seconds fair enough. Uh uh lastly you know we have al also been working on you know other products uh across performance as well as uh you know on the pharma side. 22:45 22 minutes, 45 seconds uh any updates there, any breakthrough there and just uh you know one more addition there from a global competition 22:52 22 minutes, 52 seconds perspective not only India uh any thoughts there anyone sort of you know being looked as a competition or a or a threat to our business or growth there? 23:01 23 minutes, 1 second No, I think uh whatever we are looking at, I mean we are still pursuing those opportunities and of course like we mentioned right now that I mentioned 23:09 23 minutes, 9 seconds this 2020 which we developed a completely in-house technology that will be a greater addition to our health and also already been uh validated with some 23:18 23 minutes, 18 seconds customers in Europe where supplies have begun. We want to scale up these capacities and also now trying to get into higher grade of health. So I think 23:28 23 minutes, 28 seconds a lot of focus is now put on those businesses where where we see the offtake being quicker and also the TAM 23:36 23 minutes, 36 seconds being far larger than some of the other products which we were pursuing in the past. 23:44 23 minutes, 44 seconds Sure. And on the competition bit any comments? 23:49 23 minutes, 49 seconds I question in in which business uh in in the you know MHQ uh you know 23:56 23 minutes, 56 seconds BHA business both in India or even from the global players if at all the India 24:03 24 minutes, 3 seconds I mean you know the players who are who are there but we are not seeing yet so I will not comment too much there could be 24:12 24 minutes, 12 seconds some competition within China and we are well placed to compete with Okay. Uh, great. Uh, that's helpful. 24:22 24 minutes, 22 seconds Thank you and all the best. Thank you. 24:28 24 minutes, 28 seconds Thank you. Next question is from the line of Aron Prasad from Aendas Spar. Please go ahead. 24:37 24 minutes, 37 seconds Hi. Uh, good evening Sedat. Uh, thanks for the opportunity. Uh, my question is 24:42 24 minutes, 42 seconds on the Q. Um so because of the excess HQ capacity uh last at least 3 4 months we 24:51 24 minutes, 51 seconds were anticipating there will be the we need to compete really hard in terms of pricing. So is that part behind us or we 25:00 25 minutes are still seeing uh too much of HQ being in China at least diverted towards MH 25:06 25 minutes, 6 seconds production and uh uh keeping us in to see we are still trying to keep our 25:14 25 minutes, 14 seconds market share and if you see that is still happening. So wherever needed we are working on pricing tech and whatever is needed to keep our market share. 25:27 25 minutes, 27 seconds Okay. So uh the these HQ capacities were originally put up for uh manufacturing 25:34 25 minutes, 34 seconds in the HQ or something else and that's something else is not happening. That's why this HQ is diagic HQ. How is this happening in China? 25:43 25 minutes, 43 seconds Hydrochone in itself is a very very large product. It itself is used as multiffold application. Mhq is just the 25:52 25 minutes, 52 seconds smallest item out of that. So hydrophenone is never made to I mean hydrophon is not produced to make me mu. 26:00 26 minutes Hydrophenon itself is has a lot of usage like for instance we have started hydrophenolone now but we are not making 26:06 26 minutes, 6 seconds anything into getting into MEHQ right. So so what prompted these uh 26:13 26 minutes, 13 seconds Chinese players to uh actually move I mean allocate HQ for MHQ production in the first place? Only if we can 26:22 26 minutes, 22 seconds understand Chinese and their pricing ways I mean you know life would be so easier. 26:28 26 minutes, 28 seconds Okay. So okay. So so that uncertainty still remains largely in the NHK business. Is that right understanding? 26:38 26 minutes, 38 seconds I don't know if it's a right answer sir but it says that as I said whatever is needed to maintain the market share we 26:46 26 minutes, 46 seconds are doing and I think you have seen that the revenues are not dropping anymore but it is on flatish basis so we have 26:54 26 minutes, 54 seconds been able to I mean keep our market share intact right uh can I just highlight what is 27:02 27 minutes, 2 seconds our volume growth uh in NHQ during FI 26 Six we don't give on these product by 27:09 27 minutes, 9 seconds product now Arun you are aware of it all right all right uh but but largely we when we say we 27:17 27 minutes, 17 seconds have maintained the market share uh and NHQ as a category also grows at a certain level there will be some positive growth that is a fair 27:26 27 minutes, 26 seconds understand yes understood 27:33 27 minutes, 33 seconds uh second uh do we are paying that we have maintained the market share and MHQ by taking the appropriate pricing 27:42 27 minutes, 42 seconds um actions at least on a gross margin level we are seeing we're not seeing this happening is it because uh as a 27:50 27 minutes, 50 seconds percentage it is not uh giving the right picture because we have maintained the gross margin almost at a 65 to 67 percentage in the standalone business. 28:00 28 minutes So uh what is happening on this plan? 28:05 28 minutes, 5 seconds Arun in standard the gross margins have improved. So this quarter the RMC is 33%. 28:11 28 minutes, 11 seconds Which is better compared to the previous quarters by at least 2%. 28:16 28 minutes, 16 seconds Yeah, that's a point. We we we have we have maintained the market share by responding to the competition but still 28:25 28 minutes, 25 seconds in in at least in percentage terms the gross margin has increased. So I I'm trying to understand what we are missing here. 28:34 28 minutes, 34 seconds Is it or is it a is it a we no it's a good thing right? It's a 28:43 28 minutes, 43 seconds yeah but it's a product mix which is driving a better gross margin on sequential basis whatever growth we 28:51 28 minutes, 51 seconds have seen of 78% that is largely volume and in that too if you go to level two retail which is these flagship products 28:58 28 minutes, 58 seconds have contributed more compared to the last quarter. So in fact we have seen a rebound in volume in the flagship products which is leading to not only 29:06 29 minutes, 6 seconds increase in revenue but also better gross margins. 29:10 29 minutes, 10 seconds uh any one-off because of say repeat depreciation or or a or a or say inventory related uh gain in this? 29:19 29 minutes, 19 seconds No, no, there is no one-off not in the gross margin but yeah below line items we have already explained about this performance bonus thing. 29:29 29 minutes, 29 seconds Apart from that there is no one-off in this. 29:33 29 minutes, 33 seconds Understood. And um secondly on our uh performance chemical one um we said it'll take around uh couple of quarters 29:42 29 minutes, 42 seconds to optimize uh usually uh uh you we we volumes are at 29:50 29 minutes, 50 seconds least firm we have optimization will probably help us in achieving better uh yields and margins but do we have 29:58 29 minutes, 58 seconds visibility on the u uh volume placement to the for for our capacity We have 30:05 30 minutes, 5 seconds already started selling hydrogenon catacol both in India and abroad. The product quality which is coming out is 30:13 30 minutes, 13 seconds is at par with the world's I mean competition quality. So quality is not a concern. However, we need to keep 30:21 30 minutes, 21 seconds improvising our processes meaning the efficiency the norms we have to keep improving right. So when you start a 30:29 30 minutes, 29 seconds plant I mean there is more I mean you know there would be more I mean the norms are not as we had expected. So 30:36 30 minutes, 36 seconds these optimization keeps happening but the production has started the volume material is coming out on daily basis we are already selling these products but 30:45 30 minutes, 45 seconds what we would love is to get that you know get that norms perfectioning that norms what is happening and that is what 30:52 30 minutes, 52 seconds we are trying to establish over the next one or two quarters that's what I I wanted to highlight 31:00 31 minutes no no uh uh understood sar just what I'm trying to understand is uh If our 31:06 31 minutes, 6 seconds utilization levels reached uh certain uh threshold uh so where you know we can we 31:14 31 minutes, 14 seconds can actually break even within these two quarters or you will increase the utilization only after achieving certain optimized yield levels. 31:23 31 minutes, 23 seconds Yes. Yes, you are right. 31:28 31 minutes, 28 seconds So we will so our utilizeration level is still in the very low level at this point of very low we don't compared to 31:35 31 minutes, 35 seconds what we yeah it is less than it is 10 15 odd percent right now and we want to ramp up every quarter on quarter you 31:43 31 minutes, 43 seconds will see the ramp up happening okay uh if we have uh volume placement 31:50 31 minutes, 50 seconds and sales visibility why not uh operate at a higher level and then later on we can do minor optimization because at any point of time absolute revenue and 31:59 31 minutes, 59 seconds absolute is uh is better right Arun Arun let us let us do what we want 32:09 32 minutes, 9 seconds to do please let us we understand our business no absolutely I just wanted to usually we no no problem 32:17 32 minutes, 17 seconds I know I know usually what happens we understand but let us do what we are doing you know 32:23 32 minutes, 23 seconds got it and finally on HAL um this we we said that we have converted our uh DHT 32:33 32 minutes, 33 seconds uh facility into H hall intermediate uh does it give you the better edge over 32:40 32 minutes, 40 seconds the say at least u u Chinese uh yes 100% otherwise what would be the point 32:46 32 minutes, 46 seconds on doing all this and even in that same line also we will we will be adding this 2020 capacity 32:56 32 minutes, 56 seconds Right. And then this quarters a bit margin in the subsidiary 15%age. Um I'm sure there will be some cost associated 33:04 33 minutes, 4 seconds with the HQ catalog also into this. So if not for that what kind of a not 33:11 33 minutes, 11 seconds not too big not too big not too big okay and and this sequentially the margin expansion in the subsidiary from 33:20 33 minutes, 20 seconds 1% to 10% uh because of the uh any anything is because of the pricing because I'm sure you would have passed 33:28 33 minutes, 28 seconds on the better pricing no ramping up will start happening fixed cost will get distributed you know and plus the higher value added products. 33:39 33 minutes, 39 seconds See, primarily we were until last year we were still selling the the basic health product. 33:46 33 minutes, 46 seconds Now the higher grade of HS has started picking up. So the favorable mix if you read my transcript I mentioned that the 33:55 33 minutes, 55 seconds favorable product mix is now rolling out what we wanted. So all this will start you'll start seeing uh you know will help us in margin expansion. 34:07 34 minutes, 7 seconds What is our exit utilization in halls in March? 34:14 34 minutes, 14 seconds March was almost around 40%. How much% on March? Yes. 40%. 34:22 34 minutes, 22 seconds 40%. Yes. Yes. 34:24 34 minutes, 24 seconds And then and our you said that we we have better mix and uh what will be the blended realization? 34:31 34 minutes, 31 seconds Blended realization per kg is around 460 rupees. 34:36 34 minutes, 36 seconds which was around probably 8 to 10 percentage higher than on a sequential basis. 34:42 34 minutes, 42 seconds No, last quarter it was in the range of 420 430. Okay. 34:48 34 minutes, 48 seconds And then eventually our plan to reach 7 to 700 of uh kg dollar per kg of uh blended rail edition that is that is still we are aspiring to. 34:59 34 minutes, 59 seconds Yes absolutely we are aspiring to do that. Thank you very much and all the best. 35:08 35 minutes, 8 seconds Thank you very much. Thank you. 35:13 35 minutes, 13 seconds Thank you. Next question is from the line of Shri Jane from SJ Capital. Please go ahead. 35:23 35 minutes, 23 seconds Uh hello am I audible? Yes you are. 35:26 35 minutes, 26 seconds Thank you for the opportunity. So I have few questions. Uh so first with new players entering the anusol MHQ BHA 35:34 35 minutes, 34 seconds space with large capacity and they start started filling up uh companies like Vinity Organics and Gem Aomatics. 35:42 35 minutes, 42 seconds Uh how do you see the demand and supply scenario over there and can there be an over supply and can prices come down and hit our margins? 35:53 35 minutes, 53 seconds TV is we cannot comment on the competition but so far we are very well secured 36:01 36 minutes, 1 second and I just wanted to know about uh the standalone market size of ANS in India and globally as 36:11 36 minutes, 11 seconds market in India and globally we are the largest producer and we are the largest consumer 36:18 36 minutes, 18 seconds okay sir I'm I'm new to the company so I question Why China is producing MHQ from HQ and 36:25 36 minutes, 25 seconds why they are not developing uh paper technology which will get better realization and also better ESG 36:32 36 minutes, 32 seconds compliance uh just in interest of the other 36:40 36 minutes, 40 seconds participants who have joined the call we can connect offline for these questions because these are initial level questions we can connect offline in interest of time. 36:48 36 minutes, 48 seconds Okay. Thank you. 36:53 36 minutes, 53 seconds Thank you. Next question is from the line of Omar Dander from 3A Capital Services. Please go ahead. 37:02 37 minutes, 2 seconds Hello. Am I audible? Hello. Yes, you are. 37:08 37 minutes, 8 seconds Hello. Thank you for the opportunity. Uh my question is on the who are the players globally and India who has developed vapor based technology. 37:18 37 minutes, 18 seconds Currently I think gem aromatic and vinity also have the same technology. Any other players? 37:27 37 minutes, 27 seconds I think you know better. I think these are the two even we know. I don't know any third one. No globally. 37:34 37 minutes, 34 seconds India we don't have Hello. 37:41 37 minutes, 41 seconds Yeah. Globally for which product? Any based technology? 37:48 37 minutes, 48 seconds ah based technology who whom you said in India has has developed uh J aromatics and organics. 37:58 37 minutes, 58 seconds Ah okay okay okay okay we can't confirm for other companies 38:07 38 minutes, 7 seconds it's only in our case we can confirm that yeah our any soul I mean that paper phase route is being used for manufacturing anyone for other companies 38:14 38 minutes, 14 seconds we are not the right ones to confirm okay one more question I have do we face any 38:21 38 minutes, 21 seconds competition from China and any is the demand and supply scenario Anisol. 38:31 38 minutes, 31 seconds No. So, uh, Anisol we use largely for the captive purpose. Competition from China does not impact us on the sales part. That is second. That is second. 38:42 38 minutes, 42 seconds Third is Anisol global market could be in the range of 25 or,000 T. Okay. 38:50 38 minutes, 50 seconds And uh one question is on a global uh player Solve. They are selling the aroma 38:58 38 minutes, 58 seconds business which announced Amaz. 39:04 39 minutes, 4 seconds They are losing the market share in this product from last three to four years. 39:09 39 minutes, 9 seconds So this is the reason Indian players entering this market to take market share. 39:16 39 minutes, 16 seconds But if they have already lost then somebody has already gained also now. Yes. 39:23 39 minutes, 23 seconds So this is the reason like uh Indian players are entering. 39:29 39 minutes, 29 seconds Indian players I don't know if they are entering but they believe looking at our margins that they can also replicate 39:36 39 minutes, 36 seconds this. That is why Indians enter in other businesses. There is no other real reason for it. 39:43 39 minutes, 43 seconds Okay. Okay, that's from my side. Thank you. 39:52 39 minutes, 52 seconds Thank you. Next question is from the line of Adujit from Cortex Securities. Please go ahead. 40:01 40 minutes, 1 second Good afternoon. Yeah, thank you so much. 40:03 40 minutes, 3 seconds Uh and congratulations on uh you know significantly improved results. Uh just a few very basic uh data point related 40:11 40 minutes, 11 seconds questions for me. Uh keep it brief. um that revenue salience of the top products uh you know would it be possible to share how much it was this 40:18 40 minutes, 18 seconds quarter and second thing also the breakdown by geography we used to give that in the presentations competition no 40:27 40 minutes, 27 seconds we have realized that these are fairly sensitive data points from competition perspective and that's why we have taken a conscious 40:34 40 minutes, 34 seconds call not to share that level those level details fair enough fair enough um the revenue sorry the revenue breakdown in terms of 40:42 40 minutes, 42 seconds volumes versus prices for this quarter gone by. 40:46 40 minutes, 46 seconds uh so sequentially whatever growth we have seen around 8% that is largely volume led and uh this I'm talking only from a 40:54 40 minutes, 54 seconds standalone perspective at console level of course because of health the growth is more volume led okay 41:03 41 minutes, 3 seconds and uh the 200 cr capex that you're investing in clean finer chem uh any further color you might be able to you 41:12 41 minutes, 12 seconds know share with us on that in terms of capacity your uh you know revenue potential or products or things like anything that may be possible to share. 41:22 41 minutes, 22 seconds Uh this 200 cr this is an enabling resolution which we have taken from the board. There are certain products in the pipeline. We may also plan to undertake 41:29 41 minutes, 29 seconds a green field apex. Uh we are in the initial stages. Uh but this is an enabling resolution. We have a road map but we don't want to put out at this 41:38 41 minutes, 38 seconds stage. It's it's more in the work in progress stage. 41:44 41 minutes, 44 seconds Fair enough. So will there be any investments in fiscal 27 on this front or is that a bit later on? 41:51 41 minutes, 51 seconds Uh no it could be in the later half of 27. 41:56 41 minutes, 56 seconds Okay. Uh just a capex budget for the upcoming year. Uh what what should we work with? 42:02 42 minutes, 2 seconds It could be in the range of max 80 to 100 crores. 42:06 42 minutes, 6 seconds Understood. And one last thing from my side just on this uh the performance bonus reversal uh so what would the 42:14 42 minutes, 14 seconds exact amount be that we have reversed out here and how much would the bonus be for the full year that is roughly amounting to about 11 42:23 42 minutes, 23 seconds odd crores 11 odd crores reversed and uh so the full year bonus will be uh 42:32 42 minutes, 32 seconds take I can take that offline thank you so much yeah I can take it offline Yeah, 42:39 42 minutes, 39 seconds thank you. Next question is from the line of Priyan from Well Capital. Please go ahead. 42:47 42 minutes, 47 seconds Hi Sidar, Pratik and team. Uh first Sedab, if you were to you know analyze the the the situation of the of our 42:56 42 minutes, 56 seconds industry before this uh disruption that happened. the prices were trending at 20 year low uh and uh and which was the 43:06 43 minutes, 6 seconds case with the base chemical as well as the the end product that we make. Now the position as we stand today uh I'm 43:13 43 minutes, 13 seconds sure the base chemicals would have moved uh would you be able to quantify in certain or any uh any broader range that 43:21 43 minutes, 21 seconds what would have been the price uh hikes or or the increase in the prices because of whatever the reasons uh that we would 43:28 43 minutes, 28 seconds have taken standing as on date uh which which should be reflected in the coming quarters and uh to our positioning or 43:36 43 minutes, 36 seconds our situation where we are uh in our industry. Would there be certain any disruption which would lead an to an 43:44 43 minutes, 44 seconds advantage position for us to supply our materials? Maybe there would be certain other players in Europe who would be facing 43:51 43 minutes, 51 seconds uh high cost of raw materials. Maybe certain parts of China may be facing some uh other disruptions. So we would 43:58 43 minutes, 58 seconds be be in the position to ramp up our core products other than health. I'm not talking about health but our standalone business. 44:09 44 minutes, 9 seconds Uh yeah in base products like at least in the commodity we have seen the prices shorting up two times in that range. Uh 44:17 44 minutes, 17 seconds but that's not again a fair benchmark because these are not transactional prices. Second is uh the there is a 44:24 44 minutes, 24 seconds pressure in the European geography which is leading to some gain in terms of volumes or uh the end product pricing as well. However, as Sedat mentioned 44:33 44 minutes, 33 seconds earlier that uh China continues to be in a better position compared to the other geographies. Hence, there is some arbitrage in terms of the price increases. 44:47 44 minutes, 47 seconds Got it. But we would not be able to quantify that benefit that can that we should think of it when it comes to FI27 in terms of standalone business. And 44:56 44 minutes, 56 seconds just wanted your thoughts around what should we uh after eating a thousand tons of health uh sales in Q4. What 45:03 45 minutes, 3 seconds should be that number that we should think of as a targets for FI27? 45:07 45 minutes, 7 seconds Uh and also I just missed out what should be the utilization that we are planning in HQ cate for FI27 that we should think of. 45:17 45 minutes, 17 seconds Uh yeah no so so Priyank we don't want to pencil into any like price hikes and what could be the guidance given this is a very evolving situation as of now. 45:27 45 minutes, 27 seconds However, as we have mentioned that in inflationary environment, we stand to benefit and that has been the case during FI23 as well. 45:36 45 minutes, 36 seconds For has also progressively quarteron quarter we have seen increase in momentum like eight quarters back we were doing around 350 360 tons per 45:44 45 minutes, 44 seconds quarter. Today we are doing over,000 tons per quarter. 45:49 45 minutes, 49 seconds So uh that momentum we see building and not only momentum but also the product portfolio. Now the higher grades of LS 45:56 45 minutes, 56 seconds have also added uh to the revenue and hence the margins are also seen uh better profile month quarter on quarter. 46:06 46 minutes, 6 seconds One last question on health again. uh the backward integration that we have done or we are planning to do I'm not 46:13 46 minutes, 13 seconds sure I'm confused around it that CT plant for pharma plant which we we are having we have converted into the 46:20 46 minutes, 20 seconds intermediate which leads to backward integration for health right so uh that leads to certain benefits in terms of 46:29 46 minutes, 29 seconds margins for us what should be a revised state CD state optimal utilization level margins that uh earlier we were guiding 46:37 46 minutes, 37 seconds for 25 What should be that revised number? 46:41 46 minutes, 41 seconds No, we are not getting into such numbers but yes it will definitely help us improve our margins and supply positions. So our dependence on import will dramatically drop. 46:53 46 minutes, 53 seconds So okay got it and Sid one last thing uh again on hell sorry uh we we we we read 47:00 47 minutes through that a large European player like Bas uh is expanding health's capacity in China nor HS 47:09 47 minutes, 9 seconds uh is there any possibility of uh of we uh you know benefiting out of that in terms of you know uh contracting a large 47:18 47 minutes, 18 seconds volumes to their front-end products. uh is there any such kind of possibility that we should think of it? 47:26 47 minutes, 26 seconds No, not at the moment. 47:29 47 minutes, 29 seconds So, so the so the total sales whatever we have or we would do are the to are the are the commercial sales not in terms of contract manufacturing but in 47:38 47 minutes, 38 seconds terms of final end to end sales to the consumers. 47:42 47 minutes, 42 seconds Yes. Right now we are focusing on distribution and end to end customers. Got it. Thank you sir. 47:54 47 minutes, 54 seconds Thank you ladies and gentlemen. We will take that as the last question for today. And now Han the conference back to Mr. Sadat Sikki for closing comments. 48:02 48 minutes, 2 seconds Over to you sir. 48:05 48 minutes, 5 seconds So thank you everybody for your time to understand the company on and for our uh understanding our quarterly and uh 26 48:14 48 minutes, 14 seconds numbers. Appreciate your time. Thank you so much. Have a good one. 48:19 48 minutes, 19 seconds Thank you very much on behalf of Clean Science and Technology Limited. That concludes this conference. Thank you also joining us today and you may now disconnect your lines. 48:30 48 minutes, 30 seconds Thank you.