DCM Shriram Limited — Q3 FY26

DCM Shriram Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=inZEvJBbHtA Published: 3 months ago

0:00 Ladies and gentlemen, good day and welcome to the BCM Shriam Limited Q3 FI26 earnings conference call. As a 0:10 10 seconds reminder, all participant lines will remain in the listenon mode and there will be an opportunity for you to ask questions after the presentation concludes. 0:19 19 seconds Should you need assistance during the conference call, please signal the operator by pressing star then zero on your touchstone telephone. 0:27 27 seconds Please note that this conference is being recorded. 0:31 31 seconds I will now hand the conference over to Mr. Sedat Ragnik from CDR India for opening remarks. Thank you and over to you Sedar. 0:40 40 seconds Thank you Ryan. Good evening and welcome to DCM Shiram Limited's quarter 3 and 9mm FI 2026 earnings conference call. 0:47 47 seconds Today we have with us Mr. A Shiram, chairman and senior managing director. 0:52 52 seconds Mr. Sikram Shiram, vice chairman and managing director. Mr. Sadita Shiram, deputy managing director and Mr. Amit 0:58 58 seconds Agarwal, group CFO of the company. We shall commence with remarks from Mr. Aay Shirram and Mr. Vikram Shiram. Members of the audience will get an opportunity 1:06 1 minute, 6 seconds to ask their queries to the management following these comments during the interactive question and answer session. 1:13 1 minute, 13 seconds Before we begin, please note that some of the statements made on today's call could be forward-looking in nature and a note to this effect has been included in 1:20 1 minute, 20 seconds the conference call invitation that has been circulated earlier and is also available on the stock exchange website. 1:27 1 minute, 27 seconds I would now like to invite Mr. Ajira to give us a brief overview. Over to you sir. 1:33 1 minute, 33 seconds Thank you Sedar. Good evening ladies and gentlemen and a very warm welcome to all of you. Wishing all of you a very happy 1:40 1 minute, 40 seconds new year. I will begin with perspectives on the business dynamics and the strategic imperatives following which 1:48 1 minute, 48 seconds Vikram Vicram will share views on the financial perspectives. The global landscape is currently defined by what 1:57 1 minute, 57 seconds can be called a great realignment where we are witnessing a transition from globalization to regional resilience as well as new global trade realignments. 2:09 2 minutes, 9 seconds Extreme geopolitical shifts, tightening financial liquidity, rapid technological disruption and the weaponization of 2:17 2 minutes, 17 seconds trade through selective tariffs have created a volatile supply chain for industry. 2:24 2 minutes, 24 seconds Amid this turbulence, India is not unaffected but is resilient. 2:30 2 minutes, 30 seconds Our nation's trajectory powered by a massive infrastructure buildup and a demographic dividend that is actively 2:38 2 minutes, 38 seconds converting into consumption and entrepreneurial energy provides us with a robust foundation to navigate external 2:46 2 minutes, 46 seconds headwinds with strategic voice. Recent reforms under the labor codes align us 2:53 2 minutes, 53 seconds better as a country with global standards on social inclusion, health and safety of the workforce while while 3:01 3 minutes, 1 second driving scale and formalization of the economy. 3:07 3 minutes, 7 seconds The RBI continues to actively complement the government's growth agenda through calibrated monetary easing, liquidity 3:15 3 minutes, 15 seconds support, and a strong focus on financial stability in a period marked by fluid 3:22 3 minutes, 22 seconds market dynamics. DCM Shira remains firmly positioned to navigate the operating environment ahead with 3:30 3 minutes, 30 seconds confidence. This strength is anchored in a diversified and strengthened product portfolio across our core businesses and 3:38 3 minutes, 38 seconds a sustained emphasis on efficiency and cost discipline. As the business landscape continues to change, we are 3:47 3 minutes, 47 seconds thoughtfully we are we are thoughtfully enhancing the agility of our operations to build 3:54 3 minutes, 54 seconds resilience, manage risk and reinforce our competitive position. Guided by a long-term perspective, sustainability 4:03 4 minutes, 3 seconds remains the bedrock of our decision making. It is a lens through which we evaluate every investment, ensuring that 4:10 4 minutes, 10 seconds we generate not just immediate returns but enduring multigenerational value for all our stakeholders. 4:19 4 minutes, 19 seconds I shall now invite your attention to industry dynamics across our businesses. First is the chemicals business. 4:27 4 minutes, 27 seconds Globally toxic soda market is operating at around 80% utilization with worldwide annual installed capacity of 4:36 4 minutes, 36 seconds approximately 106 million tons. While demand is strong in regions like Asia-Pacific, the industry is also 4:43 4 minutes, 43 seconds facing challenges like fluctuating prices due to economic factors, geopolitical uncertainty and 4:51 4 minutes, 51 seconds unsustainable energy costs in regions like Europe. 4:56 4 minutes, 56 seconds Domestic costic market fundamentals remain stable. Looking ahead, we see a two-faced outlook. Growing structural 5:05 5 minutes, 5 seconds demand from industrial end markets versus short-term volatility from g global supply chain disruptions. 5:14 5 minutes, 14 seconds However, chlorine prices have been under pressure. Costic soda and chlorine downstream customers have been impacted 5:22 5 minutes, 22 seconds by geopolitical factors including tariffs. 5:26 5 minutes, 26 seconds Hydrogen peroxide demand was broadly stable underpinned by strong uptake from pulp and paper textiles and water 5:35 5 minutes, 35 seconds treatment. However, the domestic market remained overs supplied with new facilities being commissioned and 5:43 5 minutes, 43 seconds dumping from Bangladesh. Prices continue to be under pressure and industry is working to ensure that cheap imports do 5:51 5 minutes, 51 seconds not disrupt domestic prices. Hydrogenis peroxide plant performance has been good with improving utilization levels. Epic 6:00 6 minutes chloro hygiene demand stood firm supported by structurally strong consumption as well as increase in 6:07 6 minutes, 7 seconds capacity of epoxy raisins. Our ECS plant was commissioned in October 25 and the product has been well accepted in the 6:16 6 minutes, 16 seconds market. We are in the process of commissioning the balance capacity and plans to stabilize in the current 6:23 6 minutes, 23 seconds quarter. We have started expanding our sales network including exports. 6:29 6 minutes, 29 seconds Our operations and in specialtity chemicals are stabilizing well. The government of India also levied 6:36 6 minutes, 36 seconds anti-dumping duty on liquid epoxy raisins in November 25 which has started having impact 6:44 6 minutes, 44 seconds which should start having impact in the coming quarter. 6:50 6 minutes, 50 seconds Our project in aluminium chloride calcium chloride at bars and the 68 megawatt green power plant at Kota 6:58 6 minutes, 58 seconds continue to progress as planned. The nice global as well as Indian PBC demand 7:05 7 minutes, 5 seconds was muted in the key geographies and prices remained soft in the period. PBC pricing continued to witness downward 7:13 7 minutes, 13 seconds pressure given abundant imports and global over supply despite BGTR finding 7:20 7 minutes, 20 seconds justification for anti-dumping duty on PVC raisin imports due to significant dumping and predatory pricing. The 7:29 7 minutes, 29 seconds Ministry of Finance chose not to impose ADP resulting in a sharp fall in domestic PVC prices. Sugar and ethanol. 7:38 7 minutes, 38 seconds Global sugar supply for sugar season 2526 is expected to be in surplus of 3.2 7:46 7 minutes, 46 seconds million metric tons mainly due to expected surplus production in India by about 2.2 million metric tons. The 7:54 7 minutes, 54 seconds Indian sugar season 2526 is expected to end with a stock of 6.2 million metric 8:00 8 minutes tons with production estimate of 30.6 million metric tonses after diversion of 8:07 8 minutes, 7 seconds around 3.5 million metric tonses for ethanol production. Consumption of 2.84 million metric tonses and export allowance of 1.5 million metric tonses. 8:18 8 minutes, 18 seconds Current price is around rupees 450 per twin. On the ethanol front, OMC's 8:26 8 minutes, 26 seconds received 1,777 cr L of ethanoline offers ethanol offers 8:33 8 minutes, 33 seconds for the 25 26 season which is 1.7 times of the total requirement tender for by OMC's. 8:42 8 minutes, 42 seconds allocation is led by grainbased feed stock that is 72% and balanced 28% from sugar cane which has reduced significantly as against 34% last year. 8:55 8 minutes, 55 seconds Industry is urging government for for support through increase in price MSP, sugar MSP and higher blending targets of 9:04 9 minutes, 4 seconds ethanol as well as sufficient allocation for sugar cane feed stock to ensure mill viability and increasing costs of 9:13 9 minutes, 13 seconds production. The industry continues to contest the export levies on ethanol sent outside Uttar Pradesh with the matter being heard in the courts. 9:25 9 minutes, 25 seconds Finesta Building Systems, a consumerf facing app. Finesta Building Systems is evolving from a product provider to a 9:33 9 minutes, 33 seconds comprehensive lifestyle partner, expanding his footprint in the building segment category to capture a larger 9:40 9 minutes, 40 seconds share of the customer wallet. Finesta continues to report healthy volume growth with margins undergoing a 9:48 9 minutes, 48 seconds normalization driven by ongoing shifts in the product mix. The alibusion project at Kota is running as per 9:56 9 minutes, 56 seconds schedule and phase one is slated to be commissioned by the end of next quarter. 10:02 10 minutes, 2 seconds Moving on, Agri Inputs business portfolio comprises of Shiram farm solutions, fertilizers and bioed 10:10 10 minutes, 10 seconds business. Shiram farm solutions. The SFS business sustained momentum delivering healthy revenue growth. Performance was 10:19 10 minutes, 19 seconds underpinned by growth in research seed research wheat seed where we have strengthened our market leadership by 10:27 10 minutes, 27 seconds registering highest ever sales. The crop protection and specialtity plant nutrition verticals continue to be 10:34 10 minutes, 34 seconds benefited due to small farmer acceptance of new molecules and products launched earlier. Innovation remains central to 10:43 10 minutes, 43 seconds our strategy and we remain committed on deepening R&D collaborations and exclusive product partnerships to 10:51 10 minutes, 51 seconds introduce differentiated next generation global products to the Indian farmers. 10:57 10 minutes, 57 seconds Fertilizer the URA business remains stable with continued emphasis on improving energy efficiency optimizing 11:05 11 minutes, 5 seconds production levels and maintaining tight control over fixed costs. Subsidy dispersements have been timely bioed due 11:15 11 minutes, 15 seconds to extended monsoon and heavy rainfall in the at the beginning of Q3 farmers profitability in the curry season 11:24 11 minutes, 24 seconds reduced which ultimately led to reduced spending in the ry season and farmers going for safe seed in wheat and mustard 11:33 11 minutes, 33 seconds while good growth was witnessed in corn and paddic. I will now request Vikram to provide the financial perspectives. 11:41 11 minutes, 41 seconds Vikram over to you. 11:44 11 minutes, 44 seconds Thank you. Good evening everyone. I will now take you through the financial highlights of Q3 and 9 months financial year 26. 11:55 11 minutes, 55 seconds Net revenues net of exercise excise duty for Q3 FY26 12:02 12 minutes, 2 seconds were at rupees 3,811 crores versus rups 3,367 12:09 12 minutes, 9 seconds crores in Q3 FY25 an increase of 13% yearonear driven by 12:17 12 minutes, 17 seconds the chemicals sugar and ethanol panesta and sriam farm solutions businesses 12:24 12 minutes, 24 seconds PBDIT for Q3 FY26 was at rupees 560 crores versus rupes 12:31 12 minutes, 31 seconds 537 crores in Q3 FY25 an increase of 4% year on year profit 12:40 12 minutes, 40 seconds after tax was rupees 213 crores after an exceptional item of rups 55 crores 12:47 12 minutes, 47 seconds provided pursuant to the implementation of the new labor reports 12:55 12 minutes, 55 seconds chemicals. The chemicals business reported an increase in revenue by 30% 13:01 13 minutes, 1 second year on year led by costic soda volumes that were up by 6% on account of better capacity utilization. 13:11 13 minutes, 11 seconds New projects that is hydrogen peroxide, aluminium chloride, refined glycerine 13:17 13 minutes, 17 seconds and epoxy also supported the revenue growth. 13:22 13 minutes, 22 seconds ECUs were down by 4% as compared to last year. PBGIT was down by 8% due to higher 13:30 13 minutes, 30 seconds fixed costs given business growth and stabilization costs of new plants partly 13:37 13 minutes, 37 seconds offset by lower input prices and better operating efficiency. 13:44 13 minutes, 44 seconds Demand for costic soda remains robust although surplus capacity in the Indian market and subdue demand of chlorine 13:53 13 minutes, 53 seconds derivatives continues to weigh on prices especially chlorine venile 14:00 14 minutes the revenues were down by 13% yearonear due to lower volumes of PVC and subdued 14:07 14 minutes, 7 seconds prices of both PVC and carbide PG PBGIT was lower at rupes 19 crores as 14:15 14 minutes, 15 seconds compared to rups 29 crores last year due to lower prices despite better operating 14:22 14 minutes, 22 seconds cost due to power and carbon material sugar and ethanol sugar and ethanol 14:29 14 minutes, 29 seconds business revenue net of excise duty was higher by 15% yearon year volumes of 14:36 14 minutes, 36 seconds both domestic sugar and ethanol were up by 8% and 10% respectively In both cases, it is a timing 14:44 14 minutes, 44 seconds difference. Prices of sugar were up by 7% while ethanol prices were down by 3% due to change in sales mix. 14:56 14 minutes, 56 seconds PBDIT for the segment came in at rupees 204 crores as against rupees 112 crores 15:03 15 minutes, 3 seconds last year. In Q3 FY26, there was a significant positive impact 15:09 15 minutes, 9 seconds of rupees 36 crores on account of reversal of provision provided in Q1 15:16 15 minutes, 16 seconds financial year 26 for retrospective levy of UP and ethanol exported outside state of UP. 15:25 15 minutes, 25 seconds Panesta building systems Anasta's revenues increased 20% 28% year 15:32 15 minutes, 32 seconds on year with project vertical leading to the growth VGP PVDIT for the quarter was 15:41 15 minutes, 41 seconds down at rupees 35 crores as against 43 crores last year. This was due to 15:48 15 minutes, 48 seconds product mix and higher fixed costs owing to investments in growing newer revenue platforms, enhancing brand presence and 15:58 15 minutes, 58 seconds acquisition related costs partially offset by increased in volume. 16:05 16 minutes, 5 seconds Shiram palm solutions palm solutions revenues increased by 7% yearonear supported by higher volumes of 16:14 16 minutes, 14 seconds research wheat and specialtity nutrients. 16:17 16 minutes, 17 seconds PBDIT for the quarter was down by 11% mainly due to moderation and research wheat margins owing to poor khif season leading to lower product prices. 16:30 16 minutes, 30 seconds Fertilizer [clears throat] fertilizer revenue was down by 2% yearonear gas prices were down at $13.2 $2 per 16:39 16 minutes, 39 seconds MMBTU in Q3 FY26 versus $14.5 mm per MMBTU last year. 16:49 16 minutes, 49 seconds Consequently, PBJIT was also down at rupees 20 crores versus rupes 29 crores last year. Outstanding fertilizer 16:58 16 minutes, 58 seconds subsidy was rupes 116 crores as on 31st December as against 111 crores last year. 17:08 17 minutes, 8 seconds Bio seed revenues for the quarter increased by 16% year on year led by better volumes of corn and patty. Prices were also better across the products. 17:20 17 minutes, 20 seconds Further there was a positive impact of about 10 crores due to sale of vegetable R&D germ plasm and technology. 17:29 17 minutes, 29 seconds Accordingly PBGIT for the quarter was up by 73% year on year. 17:36 17 minutes, 36 seconds Coming to the highlights of 9 months FY26 for the 9 months ended 31st December 25 17:44 17 minutes, 44 seconds revenues net of excise duty was at rupees 10,345 crores an increase of 12% year on year 17:55 17 minutes, 55 seconds contributed by all the businesses especially chemicals with slight moderation in sugar and ethanol. 18:03 18 minutes, 3 seconds PVDIT came in at rupees 1,294 crores, an increase of 24% yearonear led 18:12 18 minutes, 12 seconds by chemicals, sugar and ethanol and siram farm solutions businesses. 18:20 18 minutes, 20 seconds The company's net debt stood at rups 1,084 crores as on 31st December 25 as 18:29 18 minutes, 29 seconds against rups 867 crores as on 31st December 24 and rups 1,395 crores as on March 31st 2025. 18:42 18 minutes, 42 seconds The yearon-year increase was because of capital expenditure over the last year and acquisitions made during the period. 18:50 18 minutes, 50 seconds Over March 25, the decline is primarily because of reduction in sugar inventory. 18:57 18 minutes, 57 seconds Return on capital employed for December 25 came in at 14% similar to the levels of last year. 19:06 19 minutes, 6 seconds The board announced an interim dividend of 180% to uh to rupees 56.14 crores. This took 19:16 19 minutes, 16 seconds the total dividend announced for the year to 360% amounting to rupees 112.28 crores. 19:26 19 minutes, 26 seconds As our major investments in the chemical segments are near completion, nearing completion, our strong balance sheet and 19:34 19 minutes, 34 seconds healthy cash flow position as well as to explore value added uh chain opportunities align aligning with our core businesses. 19:44 19 minutes, 44 seconds We remain optimistic about sustaining steady and responsible growth in the years ahead. 19:51 19 minutes, 51 seconds That concludes my remarks and I request the moderate moderator to please open the forum for questions and answers. 19:59 19 minutes, 59 seconds Thank you. 20:03 20 minutes, 3 seconds Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a 20:10 20 minutes, 10 seconds question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, 20:17 20 minutes, 17 seconds you may press star and two. Participants are requested to use their handsets while asking a question. Ladies and 20:25 20 minutes, 25 seconds gentlemen, we will wait for a moment while the question keeper symbols. 20:32 20 minutes, 32 seconds Ladies and gentlemen, if you wish to ask a question, please press star and one. 20:43 20 minutes, 43 seconds We take the first question from the line of Pujan Sha from Molecule Ventures. Please go ahead. Uh hi sir how are you? 20:51 20 minutes, 51 seconds Hello. Hello. Yes sir. Yeah. 20:56 20 minutes, 56 seconds Yeah. My first question pertains to the PDC side. So right now if you look into so government has uh now decided that 21:06 21 minutes, 6 seconds they won't announce the ed. So is there any possibility of MIP being implemented or is there any discussion being going 21:15 21 minutes, 15 seconds on? uh because uh PBC industry is suffering a lot and so what are your views on this same 21:23 21 minutes, 23 seconds so we are actually working with the government on this you're right after the add was not done which was I think around the end of November we've 21:31 21 minutes, 31 seconds actually been to the government and various ministries to look at MIP and had meetings with the chemical ministry 21:39 21 minutes, 39 seconds with the commerce ministry and in the finance ministry and we talked about looking at MIP Because if you take the 21:46 21 minutes, 46 seconds last 5 years, the average import price was about $800, $800, $820. 21:52 21 minutes, 52 seconds But in the last 3 4 months has come down to $600, $620. 21:57 21 minutes, 57 seconds So we have taken up this issue MIP very actively with the government. Our own ministry, the chemical petrochemical ministry, we have submitted lot of data. 22:06 22 minutes, 6 seconds they are also working on it and we are really aggressively moving for MIT coming in uh uh at a short period of 22:14 22 minutes, 14 seconds time. The second point we are also working is on QCOS because ultimately a lot of the PVC is used for portable 22:21 22 minutes, 21 seconds material like for filling water or soft drinks or others and there there is a need to balance out the quantity of 22:29 22 minutes, 29 seconds residual chlorine in the VCM sorry residual VCM in the PBC. So we are working with the government on that also 22:37 22 minutes, 37 seconds to have QCOS implemented which will ensure that the right quality product is used for the portable products. So we've 22:44 22 minutes, 44 seconds had a discussion with the judge shaky ministry also and working with them. So we hope that with our steps we are 22:51 22 minutes, 51 seconds taking for the rational benefits to the PBC industry something will happen. 22:58 22 minutes, 58 seconds Got it. Is there any timeline you want to put in for the MIT or it is too uh far to understand this? 23:07 23 minutes, 7 seconds Yeah I think time frame is little difficult when we are dealing with government ministries but we are actively on the job. 23:15 23 minutes, 15 seconds Got it. And we have been hearing the news about the China being revoking the vet benefits. So do you think that that 23:24 23 minutes, 24 seconds so that will help us in terms of inching up the realization because the benefit will be gone from 1st Free and 23:32 23 minutes, 32 seconds continuing with the same might be we see a Q4 dumping a very severe dumping because might inventory get built up at 23:40 23 minutes, 40 seconds a cheaper level. So is that is that a possibility happening or industry? 23:46 23 minutes, 46 seconds Well actually when the government administr the government of China announced the the removal of subsidy of 23:52 23 minutes, 52 seconds 13% on PBC from 1st April it straight away had a positive impact on the industry and the prices have gone up 34 24:00 24 minutes rupees already. We are hoping that once it's implemented it will benefit a little more. So that is something we are also actually hoping will bring an 24:08 24 minutes, 8 seconds advantage and if MIP comes along with it, it'll be an advantage with the with the industry really needs. 24:16 24 minutes, 16 seconds Okay, got it. Last questions the same is that in PBC we have been posting a 38 k 24:23 24 minutes, 23 seconds of PBIT and we have performs performance is very well compared to the uh impact of uh happening in the industry. So have 24:32 24 minutes, 32 seconds you seen a easing of uh pricing in RM uh that is benefiting that that helps in 24:39 24 minutes, 39 seconds the PBIT or it was more linked of the operational efficiency. 24:45 24 minutes, 45 seconds So uh this was uh see one our power costs have come down. So as you know power is the almost 60 70% cost of 24:53 24 minutes, 53 seconds production. So we've seen reduction in our power cost and that's continuous. If you see last one and a half year our power costs have been coming down. So 25:01 25 minutes, 1 second that is one key reason. Uh other than that the other material carbon materials which have been more or less stable. So it's the power cost that has helped us. 25:12 25 minutes, 12 seconds Okay. Got it. I will join back in the Thank you so much for answering my question. Thank you. Thank you. 25:19 25 minutes, 19 seconds Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and one. 25:26 25 minutes, 26 seconds We take the next question from the line of Raj Vias from Balanta Portfolio. Please go ahead. 25:35 25 minutes, 35 seconds Okay. So, am I audible? I'm sorry we can't hear you. 25:43 25 minutes, 43 seconds Am I audible? Hi. 25:45 25 minutes, 45 seconds Uh Raj, uh please use your handset if you are on a speaker phone. 25:50 25 minutes, 50 seconds I'm using my hands. Am I audible right now? Your voice is very feeble. 25:59 25 minutes, 59 seconds Hello. Right now it's this is better. Please go ahead. Yeah. 26:06 26 minutes, 6 seconds Uh so I just wanted to uh understand what is the uh right now the demand scenario across the products and the 26:13 26 minutes, 13 seconds impact of the US tariff that we are seeing because we are into the export challenging business as well and earlier we have also highlighted about uh some 26:21 26 minutes, 21 seconds kind of pressure in I'm sorry I'm sorry to I'm sorry to interrupt you could kindly repeat that we couldn't get uh the clarity was not 26:29 26 minutes, 29 seconds okay am I audible right now yeah Please please repeat what you said. 26:37 26 minutes, 37 seconds So I just wanted to have a brief update with respect to the demand scenario that we are having across the product and 26:44 26 minutes, 44 seconds also any uh tariff impact that we are facing and that has impacted the performance in certain um verticles. 26:53 26 minutes, 53 seconds So which product are you talking about? 26:56 26 minutes, 56 seconds Across the board across the products all our products. 27:01 27 minutes, 1 second Yes. So all of them have different duties, different structures. So that is moving as uh with the government as I 27:09 27 minutes, 9 seconds just mentioned about PBC. What is already moving on PBC that you are aware of what we are looking at. I think on the other products really on cost exora 27:17 27 minutes, 17 seconds there is some uh import duty which is there at a very low level that is moving over there on uh on um epoxy raisins the 27:27 27 minutes, 27 seconds government has has uh implemented some anti-dumping duty in November 2025 which 27:34 27 minutes, 34 seconds is an advantage that industry so government is aware but we need to government needs to actually take some more corrective action for some of the 27:42 27 minutes, 42 seconds products which will make a difference to not not only us but to many other factories or companies [clears throat] who are in similar businesses, 27:51 27 minutes, 51 seconds right? And uh we have also seen uh this margin pressure continuing for the 27:58 27 minutes, 58 seconds Finesta vertical, right? And last quarter also you mentioned that it was primarily because of the product mix and 28:06 28 minutes, 6 seconds uh this time also it was because of product mix and higher fixed cost as well. So and the ballpark number that we 28:13 28 minutes, 13 seconds are looking at uh for example to see where the margins can stabilize and also what was the reason behind the order 28:21 28 minutes, 21 seconds book going slightly down for the quarter. 28:26 28 minutes, 26 seconds Yes. So see one coming on the margin uh reduction see margins uh as as was 28:33 28 minutes, 33 seconds mentioned in the chairman's speech uh and you rightly put it that there's a product mix but one another reason that 28:40 28 minutes, 40 seconds has happened is that one our facade business is picking up so there were larger volumes and revenue coming from facade and currently that business since 28:49 28 minutes, 49 seconds we are entering the market right and so we not really wanting to earn any significant margins there that is one and then aluminum prices went up 28:57 28 minutes, 57 seconds significantly. So that does impact that has a lag impact because your older orders which were taken especially in retail they may not have the linkage to 29:05 29 minutes, 5 seconds price. So therefore you know that was one additional factor this quarter which uh led to uh reduction in margin. Uh 29:14 29 minutes, 14 seconds that is your answer to your first question. What was the second question please? So uh so any where we are seeing 29:21 29 minutes, 21 seconds the stability in the margins right because earlier it was in double digit margins if I see on a yearly basis right 29:28 29 minutes, 28 seconds and this quarter it was it has come to single digit so any stability in margins where we can see that going forward yeah 29:37 29 minutes, 37 seconds this is the ballpark number that we uh we can look forward to yeah so see currently we are investing in growth right as I mentioned facad 29:46 29 minutes, 46 seconds doing well our aluminum extrusion plant will uh come online in uh next 3 to 4 months. So there is you know this 29:54 29 minutes, 54 seconds business is in the investment and the growth phase right now. So you know margins I won't say at the end of pressure it's like building up for a 30:02 30 minutes, 2 seconds better margins going forward which should be there let's say 6 months down the line we should see margins cinching up once all these you know investments 30:10 30 minutes, 10 seconds that we're doing acquisition that we have done looking at few more so all these things will add up but then it'll take uh one or two or two quarters at 30:18 30 minutes, 18 seconds least for margins to add up and help grow as the volume goes as the volume grows. Yeah. Okay. and the cost efficiencies come in. 30:28 30 minutes, 28 seconds Okay, understood. And coming to a question with respect to the acquisition. So um on Hindustan speciality chemicals that we have 30:36 30 minutes, 36 seconds acquired, right? So um we were expecting to break even the losses that we were having from that company by year end. So are we sticking to that uh timeline? 30:49 30 minutes, 49 seconds So see we said it will take about a year. We acquired uh this business in uh end of August. All right. So yeah by 30:58 30 minutes, 58 seconds within by end of the year we should be nearing uh by the end of these 12 months since acquisition we should be nearing the break even or maybe better than that. 31:08 31 minutes, 8 seconds Okay. And lastly with respect to the de merger of our consumerf facing products any update that uh we can get? 31:17 31 minutes, 17 seconds Yeah. So we are in the advanced agency. 31:19 31 minutes, 19 seconds See this a it's a you know very old organization over 100 years old organization. So there are a lot of interlinkages and the idea is when we 31:28 31 minutes, 28 seconds separate uh the companies uh there should not be any interlinkages. So those having clarity on that takes a bit of time. So we have large part of the 31:37 31 minutes, 37 seconds clarity and we are moving in that direction. We have clarity internally. So we are moving in that direction. 31:43 31 minutes, 43 seconds Okay. Okay. and any kind of guidance before I um like uh I end my questions. 31:50 31 minutes, 50 seconds Any kind of guidance on the top line or bottom line for the next say um 2 years down the line or 3 years down the line 31:57 31 minutes, 57 seconds that we as a company are aspiring to reach that level. 32:01 32 minutes, 1 second See we as an organization have been making investments. You've seen we've invested close to about 4 5,000 crores 32:08 32 minutes, 8 seconds in last 3 four years and uh you know and these should uh acrew to our uh cash 32:15 32 minutes, 15 seconds profits going forward in in uh you know once they stabilize so let's say from FY27 onward we should see our profit 32:23 32 minutes, 23 seconds better and we'll continue to grow. So our endeavor is to grow each of these businesses uh add to the value chain in each of the businesses. So we'll continue to do that. 32:32 32 minutes, 32 seconds Okay. Okay. Thank you so much. Thank you. 32:37 32 minutes, 37 seconds Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and one. 32:45 32 minutes, 45 seconds We take the next question from the line of Ahmed Mada from Unifi Capital. Please go ahead. 32:52 32 minutes, 52 seconds Thanks for the opportunity. Uh firstly on taking a previous participant on the uh restructuring/de 33:00 33 minutes merger uh spin-off uh can you give broad sense of timelines? Uh I think we 33:06 33 minutes, 6 seconds announced this uh board meeting about I think 9 or 10 months ago. So there is a bit of time. So any broad timelines can give to finalize the structure. 33:18 33 minutes, 18 seconds Mad our intention is to do it as early as possible. Frankly uh as I said uh when 33:26 33 minutes, 26 seconds answering the last question we have a lot of clarity now right certain certain loose ends just have to be tied we hope to do it as early as possible if all 33:34 33 minutes, 34 seconds goes well maybe next 3 4 months we should be there u but we are pretty much as I said a lot of loins have been tied 33:42 33 minutes, 42 seconds up few have are left which we should complete the next 3 4 months hopefully 33:48 33 minutes, 48 seconds can you elaborate a bit on what all things are uh are are sort of leading to 33:56 33 minutes, 56 seconds a sort of a delay. It helps us to appreciate you know what all uh what are the moving sectors. 34:02 34 minutes, 2 seconds Sure. So see it comes from the fact that you know there are like for example festa business it has its roots in kota 34:10 34 minutes, 10 seconds itself right now kota has particular kind of lease structure. So all those have to we need to have clarity even with the government we need to have clarity whether we can do that or not. 34:19 34 minutes, 19 seconds So which means we need to speak to government channels and all that. So those are the kind of things which take time and have clarity and at times given 34:26 34 minutes, 26 seconds that it is government uh it takes a little more time and few such other things. 34:33 34 minutes, 33 seconds Sure. Got it. Got it. And on the chemical business uh we have been investing we have invested a lot uh on 34:40 34 minutes, 40 seconds ECH business and epoxy business uh specifically if you can give some sense where are we in epiclorohydrine as of 34:49 34 minutes, 49 seconds now in terms of the product trials approval operating capacity uh what stage we have reached so far and in 34:58 34 minutes, 58 seconds foreseeable future uh what kind of utilization are sort of fair to achieve. 35:04 35 minutes, 4 seconds or uh uh practical to achieve uh in next few quarters and in the current quarter 35:12 35 minutes, 12 seconds what sort of losses uh or the incremental stabilization costs we incurred uh for epiclorohydrren business 35:20 35 minutes, 20 seconds then I'll come to epoxy section uh so as as you will be aware the the epiclorohydrren plant was uh 35:28 35 minutes, 28 seconds commissioned uh in Q3 uh FY26 uh 2/3 of the capacity approximately has 35:36 35 minutes, 36 seconds been commissioned. The plant is now you know under stabilization ensuring the right efficiencies and we expect that uh 35:43 35 minutes, 43 seconds in the current quarter uh we will be doing some fine further work uh to ensure that we are able to run the plant 35:50 35 minutes, 50 seconds steadily and by the end of this quarter we expect to uh commission the remaining capacity uh and therefore after that run 35:58 35 minutes, 58 seconds smoothly. uh the effort on the market side has been ongoing continuously whether it is domestic markets or export markets. Uh our quality has been 36:07 36 minutes, 7 seconds approved and accepted by by the key customers uh largely the epoxy players themselves. Uh so we are very optimistic 36:14 36 minutes, 14 seconds that by the end of this quarter uh we will run run the plant uh efficiently and then ramp up the capacity uh soon after that. 36:24 36 minutes, 24 seconds Okay. And will the balance capacity be commissioned by the end of this quarter or it will take uh more time? 36:32 36 minutes, 32 seconds Yes, by the end of this quarter we expect the balance capacity to be commissioned. 36:37 36 minutes, 37 seconds Got it. On epoxy business uh uh sort of I'm assuming you would have 36:45 36 minutes, 45 seconds consolidated this uh the entire company for the first time in this quarter. So in terms of changes to be made in terms 36:52 36 minutes, 52 seconds of processes uh vendors uh where are we in the overall process and uh what was 36:58 36 minutes, 58 seconds the contribution from the uh Hindustan chemical entity in terms of revenue and 37:04 37 minutes, 4 seconds uh profits or rather losses uh in Q3 and where do we see it going in the next financial year? 37:15 37 minutes, 15 seconds So the acquisition uh that we did uh in August 2025 has now been completed. Uh we are in the process of uh uh 37:23 37 minutes, 23 seconds integrating you know the operations, improving uh efficiencies, improving the safety practices, standards uh you know 37:31 37 minutes, 31 seconds running the entire uh plant and the business uh you know along the lines that we expect. Uh so that takes some 37:38 37 minutes, 38 seconds time some stabilization. uh what we are doing also is actually focusing more on the higher value uh part which is what 37:46 37 minutes, 46 seconds is what is called formulated raisin. So we have le capacity and we have FR formulated raisin capacity. So we are looking to grow uh that part of the 37:55 37 minutes, 55 seconds business uh more aggressively. Uh that of course takes time. You have to get approvals from customers uh you know uh 38:02 38 minutes, 2 seconds work on application development etc along with the R&D teams. But we expect that you know with that we'll be able to grow the vertical uh and we expect a 38:11 38 minutes, 11 seconds healthy profitability in you know start in the coming quarters. So in the next year FY27 onwards we should see a good profitability uh from this vertical. 38:21 38 minutes, 21 seconds And uh can you please uh spell out the revenue/ losses number for epoxy business as well as EC business. It 38:29 38 minutes, 29 seconds helps us to understand we can give a broad range. It helps us to understand how the base costic business has done considering the volumes have been better 38:38 38 minutes, 38 seconds compared last year. Prices have declined year on year but sequentially it has been okay. So just to understand the 38:45 38 minutes, 45 seconds base business a little better if you can give the numbers. Yeah. Broad range will be okay. 38:51 38 minutes, 51 seconds Yeah. Yeah. So revenue was in the range of around 90 to 100 crores for the quarter from the HSCL which is currently 38:59 38 minutes, 59 seconds a subsidiary and uh there were marginal losses at EIA level okay any box the business sorry EC 39:08 39 minutes, 8 seconds business EC brand EC is so I don't have the exact number you see each year EC we started only in 39:16 39 minutes, 16 seconds the month of October right and uh in EC I think by now in the first week of 39:23 39 minutes, 23 seconds January is when we've reached almost 100 tons per day uh which is like 23 of the capacity which we commissioned. However, 39:31 39 minutes, 31 seconds we are still working on the efficiencies uh because it takes time. These are you know one we doing for the first time and 39:38 39 minutes, 38 seconds uh you know stabilizing the technology takes time. So we are not very efficient right now. So we are not making money in 39:44 39 minutes, 44 seconds ECH right now. So but we do expect that by Q4 end we should have solved a large part of our u efficiency issues. 39:57 39 minutes, 57 seconds So yeah that's where we are. Okay got it. uh moving to the uh sugar business considering there has been meaningful 40:05 40 minutes, 5 seconds increase in the u SAP prices for the season and uh the the sugar prices have 40:13 40 minutes, 13 seconds gone up compared to last year but not enough and you have been very vocal about it uh in both terms of making policy decision as well as in investor 40:22 40 minutes, 22 seconds calls. uh going by the current season, would you like to provide some comments on how do you see the season uh upcoming 40:30 40 minutes, 30 seconds season in terms of both volume production as well as uh a profitability with higher uh uh cost? 40:39 40 minutes, 39 seconds See on u volume and production production as of now is good. It is uh a little better than last year also 40:48 40 minutes, 48 seconds because the recoveries are better than last year. So that is encouraging. Uh but what will be the total production? 40:55 40 minutes, 55 seconds Uh it's a little early. I think by February is when we get more clarity on how the overall production will pan out. 41:03 41 minutes, 3 seconds So that is one. In terms of cost, you are right cost will be higher. I mean with 3 rupees get passed on although the recovery will better uh then it's a 41:13 41 minutes, 13 seconds matter of what the product prices will be. But then yes uh we are actively pursuing government to look at uh 41:20 41 minutes, 20 seconds minimum support price for sugar uh if that comes up it helps if something happens on u on sugar exports that can 41:29 41 minutes, 29 seconds help and also on ethanol. So we working a lot of lot of uh frameworks with the government a lot of policy advocacy with the government which should support 41:38 41 minutes, 38 seconds prices but as of now yes margin will be lower than uh what they've been till now at current prices. Sure. 41:46 41 minutes, 46 seconds Last question on tenesta. You explained in it it should take couple of quarters for uh margins to sort of stabilize and 41:55 41 minutes, 55 seconds again improving with volumes. U based on uh whatever investments you have made uh 42:02 42 minutes, 2 seconds what what should be the normalized margin we should assume for fista business in terms of aida. Last year it was 1819 they said it was 12 to 14. So 42:12 42 minutes, 12 seconds will it be somewhere between the number or it will be like 13 14% kind of a number with expanded capacities and products? 42:20 42 minutes, 20 seconds I would say this business uh uh should be around 14% once uh we have 42:29 42 minutes, 29 seconds scale and backward once we have the scale and the back cost advantage is coming from backward integration I feel we should be at 42:38 42 minutes, 38 seconds around 14%. That's what guidance I've been giving for last couple of quarters. 42:42 42 minutes, 42 seconds That was never a 18 19% margin business given what we were planning to do and now that planning is taking shape. So uh 42:51 42 minutes, 51 seconds it uh we will continue to target around 14% margin. 42:55 42 minutes, 55 seconds See the scale will build up compensate for the margin as a percentage. 43:01 43 minutes, 1 second Sure I get it. Sure. Sorry last question I had on the agree business. So uh assuming this season was slightly uh 43:10 43 minutes, 10 seconds average for Rabi [snorts] uh are he sort of carrying any major inventories uh for farm solution business uh which sort of 43:18 43 minutes, 18 seconds creates a a problem later or next season something of that sort. Uh is it fair to assume or are we the channel is clean 43:26 43 minutes, 26 seconds and we don't have major inventories. We like to provide any comments on that. 43:30 43 minutes, 30 seconds Yeah there are no channel inventory. You see our biggest business is uh wheat seed research wheat and we are glad to 43:38 43 minutes, 38 seconds say that we uh last year we did about 93,000 metric tons. This year we have increased by about 20%. Uh in terms of 43:45 43 minutes, 45 seconds our uh sales to the farmers which is about 113 114,000 tons. What is impacted is we targeted about 125 130,000 tons. 43:55 43 minutes, 55 seconds So that product could not be sold and in wheat you can't store. So you have to sell it in the money which goes below cost. Okay. 44:03 44 minutes, 3 seconds So that is what has hit the profitability otherwise and you know some bit of the margins overall but otherwise uh I would say the the segment 44:12 44 minutes, 12 seconds has done well in terms of volumes. So and and just to answer your question there is no pipeline of inventory. 44:19 44 minutes, 19 seconds Okay. So okay so basically whatever the the incremental volumes here have been cleared up and there is no baggage going to the next. 44:29 44 minutes, 29 seconds Okay. Sure. Perfect. Uh, thank you so much. Thank you. 44:35 44 minutes, 35 seconds Thank you. We take the next question from the line of Rajakumar Vyanatan from RK Invest. Please go ahead. 44:44 44 minutes, 44 seconds Yeah. Uh, good evening. Can you hear me? Yeah, we can hear you. 44:49 44 minutes, 49 seconds Yeah, thank you. Thanks for the opportunity. Uh, so the first question is on the costic solar segment. Uh, I just want to know what is the outlook 44:56 44 minutes, 56 seconds for this segment for the upcoming quarters? This quarter you have done very good on the volume side but the margins are big. Uh so given the tariff 45:05 45 minutes, 5 seconds situation are you seeing any softness in demand? Uh can you just give some color on the outlook? 45:13 45 minutes, 13 seconds Uh so I think in in the uh in the coming quarters we do expect a fairly stable to positive outlook for the costic soda and 45:21 45 minutes, 21 seconds chlorine business. Uh the demand fundamentally is robust for us in India. 45:26 45 minutes, 26 seconds uh a large percentage of the demand is domestic itself. Uh as an industry you know we have moved from being net 45:33 45 minutes, 33 seconds importers to net exporters uh uh but but bulk of the demand remains to be uh uh continues to be uh domestic demand. So 45:43 45 minutes, 43 seconds we feel that uh you know while there are some large capacities coming up in the next one one to two years uh we expect 45:50 45 minutes, 50 seconds you know uh stable to positive outlook uh in the in the coming quarters. 45:56 45 minutes, 56 seconds Okay, thank you sir. And sir, the second question is on the hydrogen peroxide segment. Uh uh can you give some 46:04 46 minutes, 4 seconds outlook? How is the pricing and the margins uh looking? 46:10 46 minutes, 10 seconds So currently uh our plant itself uh you know is running at close to capacity. Uh 46:16 46 minutes, 16 seconds uh as an industry in India uh it is an overs supplied scenario at this point. 46:21 46 minutes, 21 seconds There are other players also who have commission capacities. uh so prices are are under pressure uh so we will have to 46:29 46 minutes, 29 seconds see how it evolves in the coming quarters but we are working on various avenues uh to help uh you know help improve margins. 46:37 46 minutes, 37 seconds Okay. Okay. And moving to sugar segment I want to know what is the current recovery levels compared to last year and do you expect the recoveries to be better uh in the upcoming quarter? 46:50 46 minutes, 50 seconds Yeah. So compared to last year we are better by about 4.5%. 46:57 46 minutes, 57 seconds Now if the trend continues yes we should be better in the coming quarters as well. So what is the absolute number? 47:05 47 minutes, 5 seconds I won't have the number right away but we are better by that number. 47:11 47 minutes, 11 seconds Okay. And and you expect this to improve further in the current quarter right? 47:16 47 minutes, 16 seconds Yeah. Is the trend continues? Yes. See these are climate driven so we do expect it should continue. 47:24 47 minutes, 24 seconds Okay. Okay. And the last question is you recently signed a JV or MO with Bayer India. So I want to know what is the 47:32 47 minutes, 32 seconds short to medium-term benefits uh we will be getting in terms of sales and margins. 47:38 47 minutes, 38 seconds So see the MOU with bear uh is largely to explore what uh we can do together. 47:46 47 minutes, 46 seconds So currently like uh there are one or two products one product we have already tied up uh in the crop protection space which we will be launching uh for bear. 47:56 47 minutes, 56 seconds So it's like those kind of things is more futuristic to see how both the parties can come together uh with their technical prowess, their product prowess 48:04 48 minutes, 4 seconds and our distribution prowess uh we can work together and create value for the farmers. 48:12 48 minutes, 12 seconds Okay. And uh uh are you looking at uh furthering this relationship or uh it'll be only restricted to whatever you have mentioned the press? 48:22 48 minutes, 22 seconds Yeah, as of now uh it is more uh you know transaction based. U if something 48:30 48 minutes, 30 seconds comes up we may we are open to looking at uh working together as well. 48:36 48 minutes, 36 seconds Yeah. My question is will there be any outsourcing opportunities with Bayer? 48:40 48 minutes, 40 seconds Will you be supplying to their entities overseas? 48:44 48 minutes, 44 seconds No, as of now we there's no such plan. Okay. Thank you so much. 48:52 48 minutes, 52 seconds Thank you. 48:54 48 minutes, 54 seconds Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and one. 49:02 49 minutes, 2 seconds We take the next question from the line of Pujan Sha from Molecule Venture. Please go ahead. 49:09 49 minutes, 9 seconds Thanks for the opportunity sir. Uh my question pertains to the costics. So uh 49:16 49 minutes, 16 seconds u in costics for division we have seen bit of a uh uh sweep in terms of ECU. So 49:24 49 minutes, 24 seconds just wanted to understand it is because of the chlorine or it is just a broad realization of cost has been fallen down. 49:34 49 minutes, 34 seconds So there is the question is on the can you can you repeat the question please 49:40 49 minutes, 40 seconds sure so in terms of yeah carry on carry on with the question please yeah yes yeah so just wanted to 49:48 49 minutes, 48 seconds understand on the costic soda part so in costic soda have the realization has been cooled off or it the has been uh 49:57 49 minutes, 57 seconds cooled because of the impact of chlorine see there There's no significant reduction I would say in ECUs 50:06 50 minutes, 6 seconds their marginal you know 3 400 500 rupees here and there so I don't think uh I would attribute to any 50:15 50 minutes, 15 seconds particular factor in month on month it keeps varying whether chlorine goes down or uh costic price goes down or the 50:22 50 minutes, 22 seconds flakes prices are better so there's no fundamental shift is where I'm coming from great and uh so amplifying the question 50:32 50 minutes, 32 seconds uh in terms of China is implementing this uh V. So uh so do we see the benefit in costic as well? 50:42 50 minutes, 42 seconds So to the best of our knowledge uh China not implemented this for costic soda. It is for PVC and for other products. Uh so 50:52 50 minutes, 52 seconds there won't be a direct impact. Uh but the PVC and the costic soda industries are closely linked. uh so we'll have to 50:59 50 minutes, 59 seconds see you know how how it plays out uh the impact of this on PBC and therefore on costing 51:06 51 minutes, 6 seconds okay got it sir I just want to understand the PVC so let's suppose uh uh uh if we consider if 51:16 51 minutes, 16 seconds ADD gets implemented the China duty was range around 122 to 232 per uh dollar 51:23 51 minutes, 23 seconds per ton so now if MIP comes up so it's it's it's equivalent significance of uh 51:30 51 minutes, 30 seconds of the duty. So then we are not going to apply for ADD right because MIP might be for a limited time. So till that time we 51:39 51 minutes, 39 seconds might refile for ADD or it won't be that case. 51:44 51 minutes, 44 seconds I think the the approach to MIP MIP is a priority right now because ADD has already been rejected once by the 51:51 51 minutes, 51 seconds government and the ADD approval process is fairly long. it doesn't happen as fast as we hopefully MIP will. So MIP is 52:00 52 minutes a focus right now. We'll see what the market situation is like after that and then take up the ADD work also if necessary. 52:09 52 minutes, 9 seconds Okay. And if if NIP gets implemented it would be for 6 months. 52:14 52 minutes, 14 seconds We don't know. We don't know. We've asked for a longer period. We don't know what the government will do. Got it. Got it. Thank you sir. 52:23 52 minutes, 23 seconds Thank you. 52:26 52 minutes, 26 seconds Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and one. 52:39 52 minutes, 39 seconds Ladies and gentlemen, we take that as the last question and conclude the question and answer session. I now hand the conference over to the management for their closing comments. 52:50 52 minutes, 50 seconds Thank you ladies and gentlemen. Thank you very much for your participation in our conference call. As new trade 52:58 52 minutes, 58 seconds barriers emerge across developed economies, the imperative for Indian corporates is towards realignment. 53:05 53 minutes, 5 seconds True progress lies in building internal strength through sharper cost focus, operational efficiencies, continuous 53:12 53 minutes, 12 seconds innovation and deeper technological adapt adaptability. 53:17 53 minutes, 17 seconds At GCM Shiram, we are building this resilience through number one, relentlessly optimizing our operational core to ensure we remain lean and agile. 53:28 53 minutes, 28 seconds By focusing on efficiencies, we are working towards ensuring that our margins remain healthy. Number two, 53:36 53 minutes, 36 seconds strengthening the value chain in our businesses. And number three, digital transformation. As technology is the 53:43 53 minutes, 43 seconds backbone of our evolution and we are leveraging datadriven insights and automation to enhance our adaptability, 53:52 53 minutes, 52 seconds efficiencies and to sharpen our decision making. Environmental stewardship is no longer a peripheral goal. It is a 54:01 54 minutes, 1 second primary embedded it is pime firmly embedded in our investment philosophy. 54:06 54 minutes, 6 seconds We are making our businesses greener that deliver long-term value to all our stakeholders. Thank you very much once again. 54:17 54 minutes, 17 seconds Thank you on behalf of DCM Sriam Limited. That concludes this conference call. Thank you for joining us and you may now disconnect your lines.