Deepak Nitrite Limited — Q2 FY26

Deepak Nitrite Ltd Q2 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=C2l3SVtnd3E Published: 6 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to Deepak Nightrid Q2 FI26 earnings conference call hosted by IFL 0:08 8 seconds Capital Services Limited. At the outset, I would like to clarify that certain statements made or discussed on the conference call today may be 0:16 16 seconds forward-looking in nature and a disclaimer to this effect has been included in the investor communications shared with you earlier. The the result 0:25 25 seconds documents have been shared with you earlier and ha also have been posted on the company's website. 0:32 32 seconds As a reminder, all participant lines will be in the listenonly mode and there will be an opportunity for you to ask questions after the presentation 0:40 40 seconds concludes. Should you need assistance during this conference call, please signal an operator by pressing star then 0:47 47 seconds zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ranjit Sriala from IFL Capital. 0:57 57 seconds Thank you and over to you sir. 1:02 1 minute, 2 seconds Thank you Amad. Good afternoon everyone and thank you for joining us on Deepak Nightrides Q2 and H1 FI26 earnings 1:09 1 minute, 9 seconds conference call. Today we have with us Mr. Modik Ma executive director and CEO, Mr. Sanjay Upaday, director finance and 1:17 1 minute, 17 seconds group CFO and Mr. Somar Nandanda, CFO of Deepak Netrack Limited. To begin, Mr. 1:23 1 minute, 23 seconds Malik meta will share his views on the operating performance and the growth plans of the company followed by Mr. 1:28 1 minute, 28 seconds Sanja Upaday who shall take us through financial and segmental performance. I now invite Mr. Ma to share his opening comments. Thank you and over to you sir. 1:40 1 minute, 40 seconds Good afternoon everyone and a warm welcome to all of you on Deepak Nitrides Q2 and H1 FY26 earnings conference call. 1:49 1 minute, 49 seconds Our results documents were shared with you earlier and I hope you've had an opportunity to glance through them. I will initiate by briefly taking you 1:57 1 minute, 57 seconds through the key financial and operational highlights for the quarter and the half year ended 30th September 25. 2:04 2 minutes, 4 seconds As we move into FI26, the operating environment remains complex and challenging. We continue to 2:12 2 minutes, 12 seconds uphold our commitment to responsible chemistry, creating value responsibly for all our stakeholders, our people, 2:18 2 minutes, 18 seconds and our planet. This philosophy anchors our vision. 2:24 2 minutes, 24 seconds Strengthened by our core fundamentals of agility, customer responsiveness and continuous process improvement, it provides us with a resilience to 2:32 2 minutes, 32 seconds deliver an accretive performance even admits multiple headwinds. 2:37 2 minutes, 37 seconds In Q2, Deepak reported consolidated revenues of 1922 crores higher on a quarteronquarter basis. This was 2:46 2 minutes, 46 seconds accompanied by an improved profitability as we reported a 5% quarter-on quartarter increase in consolidated EITA at 224 crores. 2:56 2 minutes, 56 seconds You will notice that we're presenting our performance on a sequential quarter basis as the operating backdrop over the last two quarters has been broadly 3:04 3 minutes, 4 seconds comparable particularly in terms of pricing trends, tariff development, ongoing geopolitical situations and interest rate movements. 3:15 3 minutes, 15 seconds on a year-on-year basis. However, the change in the operating environment is far more pronounced with factors such as 3:22 3 minutes, 22 seconds US tariffs, dumping intensity, and under pricing either being absent or significantly less severe during the 3:30 3 minutes, 30 seconds corresponding period last year. Our phenolics business continues to show performance in continuing continuously 3:39 3 minutes, 39 seconds challenging times reporting a revenue growth of 2% on a sequential basis accompanied by a strong 23% improvement in EBIT. 3:49 3 minutes, 49 seconds Topline growth was aided by higher throughput including achieving a record quarterly production and sales of iso uh profile alcohol. 4:00 4 minutes This was supported by favorable product mix and lower feed stock prices which aided profitability. The advanced intermediate segment on the other hand 4:09 4 minutes, 9 seconds navigated headwinds from tariff actions and the influx of underpriced imports. 4:15 4 minutes, 15 seconds We countered these challenges by pivoting to non-traditional geographies and proactively engaged with customers thereby protecting market share and 4:24 4 minutes, 24 seconds volumes which helped us to report a largely stable topline. 4:29 4 minutes, 29 seconds However, pressure on realizations were fairly severe and profitability has been impacted. 4:37 4 minutes, 37 seconds We've undertaken some aggressive optimization actions to partially mitigate this impact and this will be seen in the quarters ahead. In terms of 4:47 4 minutes, 47 seconds outlook, we are optimistic about our prospects given its strong traction in phenolics and further in the AI segment. 4:55 4 minutes, 55 seconds We anticipate an improvement in performance on the back of better volume for agrochemical linked intermediates from Europe as well as other 5:03 5 minutes, 3 seconds geographies, enhanced contribution from capacities that have undergone the bottlenecking and an improved ability to 5:10 5 minutes, 10 seconds capture contribution across the value chain with our upstream integration assets which are expected to be fully operational in Q4. 5:21 5 minutes, 21 seconds there can be a further uptake to our expectations should there be an amicable resolution to the US tariff matter. 5:29 5 minutes, 29 seconds A key development to share is the commencement of our hydrogenation asset at the Penteci 5:49 5 minutes, 49 seconds which is alongside its sister concern which is focused on polymer compounding. 5:56 5 minutes, 56 seconds The R&D center was built with an investment of about 100 crores and spread over a 5 acre campus which will 6:03 6 minutes, 3 seconds serve as an innovation hub for developing chemistries, specialty applications, polymer technologies as 6:10 6 minutes, 10 seconds well as scale up and semiccommercial matches. 6:15 6 minutes, 15 seconds The center will focus on expanding our product portfolio and increase our operational excellence. It will also 6:22 6 minutes, 22 seconds help us to develop a technology platform and work on new chemistries in partnership with key customers. 6:32 6 minutes, 32 seconds We're confident that this investment coupled with our right uh strategic initiatives with key customers will 6:40 6 minutes, 40 seconds provide a platform and thrust our efforts in this area over time. 6:46 6 minutes, 46 seconds It already has served to reinforce the brand value of the debug group and is serving to support and attract global 6:54 6 minutes, 54 seconds partnerships in the CDMO as well as the CMO space. It'll also of course help to further derisk hazardous chemical 7:02 7 minutes, 2 seconds manufacturing processes through rigorous process safety protocols and h uh thus elevating our HSC practices. 7:11 7 minutes, 11 seconds Moreever, we're on the cusp of a transformative growth phase. Our planned investments in a mega complex, India's 7:18 7 minutes, 18 seconds first integrated polycarbonate project, which is a strategic leap towards self-realiz self-reliance and high value 7:27 7 minutes, 27 seconds addition supported by long-term feedback arrangement with Petronet LNG and robust 7:34 7 minutes, 34 seconds policy tailwind under the Atman Bharat project. This is a landmark step in backward as well as forward integration for the group. 7:43 7 minutes, 43 seconds Deepuk's strong pipeline of upstream products such as nitric acid as well as downstream products such as MIBK and 7:50 7 minutes, 50 seconds MIBC are set to be operationalized in the following few quarters. However, there 7:58 7 minutes, 58 seconds have already been products manufactured under these banners for seating made via different locations in the group's portfolio. 8:11 8 minutes, 11 seconds At Deepuk, responsibility is not just an add-on. It is core and embedded in our DNA. We're transitioning towards 8:18 8 minutes, 18 seconds achieving 60% of our energy consumption coming from renewable sources, which may 8:25 8 minutes, 25 seconds exceed 70% once regulations and policies about banking are made clear. We've 8:32 8 minutes, 32 seconds already achieved a significantly reduced emission uh score and increase our intensity in a meaningful way in H126. 8:43 8 minutes, 43 seconds In conclusion, Deepak stands at the threshold of a new era of sustainability and innovation growth with disciplined 8:50 8 minutes, 50 seconds execution, strategic investment and an unrelenting focus on operational excellence. We will continue to strengthen our foundation for long-term 8:58 8 minutes, 58 seconds success. Our commitment to integration, renewable energy, and digital transformation is not only enhancing our 9:05 9 minutes, 5 seconds efficiency, but deepening our competitive edge. As we move forward, our priority remains clear to deliver 9:12 9 minutes, 12 seconds enduring value to all stakeholders through consistent performance, prudent capital allocation, and sustainable profitability. 9:20 9 minutes, 20 seconds We're building a future ready enterprise that balances growth with responsibility and success with trust. Together we will 9:28 9 minutes, 28 seconds ensure the deeper continues to create a lasting impact for our stakeholders, community and for India that we're all proud to help build. I would now like to 9:37 9 minutes, 37 seconds hand the call over to Mr. Sanjay up who will address this forum and take you through the financial performance and key updates during the period under review. 9:49 9 minutes, 49 seconds Thank you Mo. Good afternoon everyone and thank you for joining us today on Deepo Nitrides earning call. I will now 9:57 9 minutes, 57 seconds take you through the highlights of the financial results for the quarter and half year end September 3825. 10:03 10 minutes, 3 seconds Amid a challenging landscape, Deepak has sustained a resilient performance. The company expanded its market share 10:11 10 minutes, 11 seconds especially in fenel segment. Our operations remain capital efficient which which has added to the returns on 10:18 10 minutes, 18 seconds a consolidate basis. Our ROC is reported at 14% continuing our on our track record. 10:25 10 minutes, 25 seconds Coming to our financial performance on the operating front, our domestic business revenues stood at 1,632 crores and 3,256 crores in Q2 and H1 respectively. 10:38 10 minutes, 38 seconds Export revenues were 270 crores in Q2 and 536 cr in H1. On a consolidated 10:45 10 minutes, 45 seconds level, the domestic to export mix stood at 86 to4. 10:50 10 minutes, 50 seconds In Q2 FY26 on a considered basis revenue stood at 1,922 crores compared to 1,914 crores in Q1 11:00 11 minutes FY26 while AITA while AITA came in at 224 crores up by 5% on a sequential basis. 11:09 11 minutes, 9 seconds Margins were up by 100 basis points at 12%. 11:13 11 minutes, 13 seconds PBT and P stood at 163 crores and 119 crores respectively up 5% and 6% respectively. 11:22 11 minutes, 22 seconds In H1 on a considered basis revenue stood at 3,836 crores compared to 4,239 crores in H1 FI25. 11:32 11 minutes, 32 seconds AITA came in at 430 crores in H1 FI26 compared to 647 crores in H1 FI25. 11:40 11 minutes, 40 seconds Margins came at 11% in H1 FI26. PBT and PAT came at 318 crores and 231 crores respectively. 11:50 11 minutes, 50 seconds Moving to our segmental performance, the phenolics delivered an encouraging performance with the revenue growth of 11:56 11 minutes, 56 seconds 2% quarteronquarter basis rupees 1,333 crores in Q2 as compared to 1,34 crores 12:05 12 minutes, 5 seconds in Q1. While Abid grew at 23% sequentially at 145 crores and AIT 12:13 12 minutes, 13 seconds margin came in at 11% in the quarter. In H126 revenue stood at rupes 2,637 crores 12:22 12 minutes, 22 seconds and EIT came in at 263 crores translating into margin of 10%. 12:28 12 minutes, 28 seconds In the advanced intermediate segment, revenue stood at 588 crores in Q2 FI26 compared to 605 crores in Q1 FI26 12:38 12 minutes, 38 seconds while EIT stood at 23 crores translate into margin of 4% during the quarter under review. In H1 FI26 revenue cabinet 12:46 12 minutes, 46 seconds 100 1,193 crores and abit cabinet 58 crores translating into margin of 5% despite the current level of 12:55 12 minutes, 55 seconds environmental and challenging circumstances. 13:00 13 minutes On the balance sheet front company's financial position is significantly enhanced. The company continues to maintain low gearing position with debt 13:07 13 minutes, 7 seconds to equity of 21 and net worth of 5,550 crores maintaining a strong balance sheet for plant future expansion. 13:16 13 minutes, 16 seconds We are also excited about our new R&D center at SAI which is set to drive innovation and product diversification. 13:24 13 minutes, 24 seconds As Mollik shared, it will play a vital role in strengthening our capabilities in life science, material science, and sustainable solutions, reinforcing our 13:33 13 minutes, 33 seconds long-term competitiveness by enhancing our mode in existing areas and opening new vistas for growth. 13:41 13 minutes, 41 seconds Lastly, on ongoing projects, our ongoing projects reflect our commitment to long-term growth and self-reliance. Our nitric acid as well 13:50 13 minutes, 50 seconds as MABF project is expected to be commissioned soon while MIBK MIBC plant along with offsite and UT projects are 13:58 13 minutes, 58 seconds in advanced stage of completion and expected to pre-commission level activity to start soon at a commercial 14:06 14 minutes, 6 seconds phase. Apart from above, we are in final stage of construction activity in specialty chemical plant. The polycarbonate project is on track and 14:14 14 minutes, 14 seconds signifies a major advancement towards building one of the world's first fully integrated value chain in phenolics. 14:22 14 minutes, 22 seconds As these projects come to fusion, they will enhance our competitiveness, improve margins and support sustainable growth, creating lasting value for all 14:31 14 minutes, 31 seconds our stakeholders. With that, I would now request the moderator to open the forum for question and answer session, please. 14:39 14 minutes, 39 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 14:47 14 minutes, 47 seconds telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. 14:58 14 minutes, 58 seconds Ladies and gentlemen, we will wait for a moment while the question queue assembles. 15:07 15 minutes, 7 seconds The first question is from the line of NRA Jimurya from annual wealth. Please go ahead. 15:13 15 minutes, 13 seconds Yeah sir, good afternoon. Uh thanks for the opportunity. Uh sir, few questions. 15:18 15 minutes, 18 seconds So first uh you mentioned that in the advanced intermediate business. Uh we are expecting some better trajectory for 15:25 15 minutes, 25 seconds the select agric agrochemical intermediates in second half. So just wanted to understand like when those 15:32 15 minutes, 32 seconds supplies to those global measures who are using our intermediates were at the peak level. Uh if we just compare Q2 to 15:41 15 minutes, 41 seconds reserve is those peak volumes. Uh how much of the volume erosion or uh or the quantities would have fallen from those 15:50 15 minutes, 50 seconds peak volumes which they were earlier using from us. 15:54 15 minutes, 54 seconds Okay. Uh NAS thanks for the question. In uh the second quarter uh regardless of the peak volumes, the 16:04 16 minutes, 4 seconds volumes that we sent were essentially zero or close enough to zero. 16:11 16 minutes, 11 seconds uh and this is because uh there was an intense uh I think four or five quarters 16:18 16 minutes, 18 seconds of inventory restocking that took place and hence what ended up happening is that the customers were essentially not 16:26 16 minutes, 26 seconds even producing. They were only trying to release their own inventory of uh finished good product. 16:34 16 minutes, 34 seconds Now all of this also uh meant that the intermediates from our side were at so it basically let me put it 16:43 16 minutes, 43 seconds this way that these products are conspicuously absent in our Q2 uh results. 16:52 16 minutes, 52 seconds Correct. So sir just uh taking this ahead. So let's say in terms of the recovery what we are expecting uh in H2 17:00 17 minutes uh how are you seeing uh this volumes picking up in the subsequent quarters based on your interactions with the customers. 17:10 17 minutes, 10 seconds So uh cautious optimism here and I think all of them just like us are all waiting for some degree of clarity with regards 17:18 17 minutes, 18 seconds to things like US tariffs and uh you know overall the situation with regards to crops such as soya and corn and uh 17:28 17 minutes, 28 seconds other things. So what we are seeing definitely is that uh moving forward the 17:35 17 minutes, 35 seconds number is no doubt higher than the zero that it was in Q2. 17:40 17 minutes, 40 seconds uh we are not aware of what uh it will grow to or plateau up to but right now 17:48 17 minutes, 48 seconds what we have in uh clarity is that material movement is is to begin 17:54 17 minutes, 54 seconds from uh I think this month or next month onwards and then there are discussions that are ongoing with regards to volumes 18:03 18 minutes, 3 seconds with regards to diversified geographies where now even China and other regions like India have come come into play. So, 18:12 18 minutes, 12 seconds uh there are multiple conversations that are taking place. Rest assured that uh on these fronts, especially on these 18:20 18 minutes, 20 seconds kinds of agrochemical intermediates, we're looking at more traction in H2 than in H1. Got it. It's helpful. So 18:29 18 minutes, 29 seconds second question is on the ammonia side since we are uh we are already uh in the process of commissioning the uh WN CN 18:38 18 minutes, 38 seconds plant and what we are understood is that most of the domestic players in India have a very little to offer in terms of 18:45 18 minutes, 45 seconds the excess ammonia and also because it requires large storage infrastructure. 18:51 18 minutes, 51 seconds uh how we are placed in terms of our ammonian ammonia contracts A and B uh in terms of minimizing our storage and 18:59 18 minutes, 59 seconds transportation cost to uh uh minimize the impact of uh the higher ammonia cost which otherwise the domestic players are currently charging on. 19:10 19 minutes, 10 seconds So fair question one uh we do have an alignment similar to the way that we 19:16 19 minutes, 16 seconds have uh with regards to uh you know other key raw materials which allow us to import ammonia as well as buy from 19:26 19 minutes, 26 seconds domestic sources. So I think there is a fair diversity in terms of our ammonia sources and uh generally speaking the 19:35 19 minutes, 35 seconds product that we are buying has degree of linkage with regards to international indexes. That said then 19:43 19 minutes, 43 seconds the second question that you were asking was regards our ability to store. 19:49 19 minutes, 49 seconds Now our ability to store in historically over the last uh 30 40 years was limited 19:56 19 minutes, 56 seconds to a very minuscule volume which was close to maybe just you know couple of days of uh consumption. 20:03 20 minutes, 3 seconds Now moving forward I think from uh the end of Q3 onwards uh anyways we've already commissioned a 20:11 20 minutes, 11 seconds storage facility uh I think about last year which uh about doubled our uh 20:18 20 minutes, 18 seconds storage against our consumption and now it will be about uh I think it will be 20:25 20 minutes, 25 seconds roughly about 15 times how much we would have had over these many years Again, I 20:33 20 minutes, 33 seconds don't know whether this will be enough moving forward, but we're actively seeing how we can do it in a way which is going to give us a an accretative 20:42 20 minutes, 42 seconds benefit and do it in a safe way. So now we have multiple storage facilities that are all feeding into our consumption 20:51 20 minutes, 51 seconds point via pipelines and we already have in place also a network of tankers that move. 20:59 20 minutes, 59 seconds Now I think from uh Q4 onwards not only will our consumption capacity increase 21:05 21 minutes, 5 seconds almost to double or more but our storage facility will be equal to about uh 15 21:13 21 minutes, 13 seconds days of the higher consumption as against maybe one day that we have had for the last 40 years. 21:19 21 minutes, 19 seconds Perfect sir. Uh so last from my side since now we are in the process of uh commissioning the WN and CNN is it 21:27 21 minutes, 27 seconds possible to share the capacities for both of them like what sort of uh operationalized capacities uh we are 21:34 21 minutes, 34 seconds coming up with I'll tell you the name plate capacity but you can reflect on our experience with phenol that name 21:42 21 minutes, 42 seconds plate capacity is only a challenge to see how we can overcome. 21:48 21 minutes, 48 seconds So uh we would be on an uh annualized basis I think producing roughly about uh between 250 to 270 tons per day. 22:01 22 minutes, 1 second What w yeah and uh I think uh somewhat close to that with regards to uh concentrated 22:09 22 minutes, 9 seconds acid maybe slightly lower because we also are large consumers of WNA. 22:15 22 minutes, 15 seconds Got it. So sir here like uh uh in terms of this uh nitric acid plant and capacities uh would it be fair to assume 22:24 22 minutes, 24 seconds that uh initially as our requirement uh picks up over the subsequent quarters uh 22:31 22 minutes, 31 seconds we would try to maximize the plant utilization and try to sell the excess production in the market and uh try to cover up the fixed cost or would it be 22:39 22 minutes, 39 seconds only for our captive consumption only and nothing would be sold outside? No, we will make sure that we are we've been aggressively increasing our nitration 22:48 22 minutes, 48 seconds capacity and also in many cases our hydrogenation capacity. So, uh we're looking at significantly increasing our 22:57 22 minutes, 57 seconds own self consumption because that's where we will make more margin. 23:02 23 minutes, 2 seconds But, uh the nitric acid plants, I'll just put it in a simple way. Our nitric acid plants will be pushed to their 23:09 23 minutes, 9 seconds limits regardless of anything. So our consumption plan is happening independently and aggressively but our 23:18 23 minutes, 18 seconds nitric acid uh production plan will happen aggressively of its own accord. 23:24 23 minutes, 24 seconds Perfect sir. Thank you so much and wish you all the best. Thank you so much. Thank you. 23:32 23 minutes, 32 seconds The next question is from the line of Arun from Aendes Park. Please go ahead. 23:41 23 minutes, 41 seconds Thanks for the opportunity and good afternoon everyone. Um my first question is on um the uh volume growth on phenol. 23:50 23 minutes, 50 seconds Uh we have mentioned uh there is some uh sequential growth. Um so what will be the yway growth because we have done a 23:58 23 minutes, 58 seconds debottle of the phenol plant. So um I can share this. 24:06 24 minutes, 6 seconds Are you talking about in uh H1 or are you talking about in H2 in in Q2 in in this quarter 24:15 24 minutes, 15 seconds and and overall if you can guide what will be the FI26 volume growth on the phenol front? 24:21 24 minutes, 21 seconds Yeah. So uh in Q2 there was uh I think it was very moderate growth. I think it 24:27 24 minutes, 27 seconds was about uh 2 3% frankly and uh we actually had a very hot summer in the h 24:36 24 minutes, 36 seconds and uh you know these large continuous plants uh prefer to have nice cool climates so the cooler the winter the more efficient our assets will be. 24:50 24 minutes, 50 seconds We also had a you know pretty heavy monsoon. So I would say that in H2 uh we should be able to operate the 24:59 24 minutes, 59 seconds plant with uh you know we should be able to squeeze out more output in H2 as 25:08 25 minutes, 8 seconds okay if I remember rightly we did a debottleing and the capacity was supposed to go by 25:16 25 minutes, 16 seconds around 10%age so summer to summer uh shouldn't also be a 10% volume growth. 25:24 25 minutes, 24 seconds or is it some other constraint in uh sales uh selling the material in the domestic market? Uh how should we look at it? 25:33 25 minutes, 33 seconds No, no, no. Let me just clarify this 10% was something that we said earlier. So I'm not sure about what base it was said 25:41 25 minutes, 41 seconds on this was I think several quarters ago. So that we have already achieved that is behind us. Look honestly uh 25:49 25 minutes, 49 seconds around every quarter the uh you know the team says that they're looking at maybe 25:56 25 minutes, 56 seconds uh 4% uh opportunity to debottleneck and then every quarter they achieve it and then they come back saying that okay now 26:04 26 minutes, 4 seconds we've identified some other places where we canize so this is an ongoing activity and uh you know I'll join all of our 26:12 26 minutes, 12 seconds shareholders in congratulating them for constantly aiming higher so Even looking ahead, they have similarly come back 26:21 26 minutes, 21 seconds with the same commentary that they've given every single quarter that while they achieved last quarter's uh uh you 26:28 26 minutes, 28 seconds know efficiency improvement numbers they believe that there is some headroom left and they are targeting to do that and 26:36 26 minutes, 36 seconds generally all of this around with uh I would say either zero or insignificant capex so uh you know this is all an 26:44 26 minutes, 44 seconds efficiency improvement um you know from the plant side. 26:49 26 minutes, 49 seconds No, no, absolutely. I was just uh trying to reconcile my own numbers. No, it's uh it goes without saying that it's a it's 26:56 26 minutes, 56 seconds a tremendous that I had mentioned has already been achieved. We've gone past that. So the 27:02 27 minutes, 2 seconds 3% I'm referring to is over and above I don't even know when I said 10% but I think it would have been at least a few quarters ago. So we're past that point. 27:14 27 minutes, 14 seconds No, I I was reconsidering because last year we took a shutdown in um in the the Q3 after that we said there is a debottlenecking so I was expecting 27:22 27 minutes, 22 seconds that's why the Q2 to Q2 there should be some bigger volume growth nevertheless no problem we'll I I'll take that offline 27:30 27 minutes, 30 seconds just clear uh you know there is a summer winter monsoon aspect that does come in so I would hasten don't look at it you know 27:39 27 minutes, 39 seconds literally you know quarteron quarter last year uh Q2 to this year Q2 don't look at it from that perspective at all 27:46 27 minutes, 46 seconds uh what I had said last year in Q2 10% we've done it it's behind us after that 27:54 27 minutes, 54 seconds subsequently there has been further debottlenecking and now subsequently uh the plant is confident of being able to uh create 28:02 28 minutes, 2 seconds even more headroom in H2 let me just put it that way okay all right uh clear very clear uh my second 28:12 28 minutes, 12 seconds question is on the the current width of roughly 2,000 crores is there in the balance sheet. Um we can now that we are 28:21 28 minutes, 21 seconds in the final stages of the u um u project each of the projects which is about to be commission commissioned. So 28:28 28 minutes, 28 seconds can you just give a break up of you know how should we look at this 2,000 crores and how much of how much of this 2,000 crores so far we have spent on the 28:35 28 minutes, 35 seconds phenol and the integrated polycarbonate and what will how much of this will will be capitalized in the balance sheet in 28:42 28 minutes, 42 seconds the in the next uh six to uh 8 months most of this is not on phenol and polycarbonate 28:51 28 minutes, 51 seconds maybe if there is something that would have been with regards to things like licensing fees or something like that but that is I don't think that would be 28:59 28 minutes, 59 seconds uh considered. This is for investments uh which will be into commissioning in 29:06 29 minutes, 6 seconds this quarter and in the next and there is uh some balance amount of it which will be in commissioning uh during first quarter of FI20. 29:22 29 minutes, 22 seconds Sorry, can you uh can still provide some kind of a break up between various projects which are under commission excluding the maybe the polycarbonate? 29:32 29 minutes, 32 seconds So all of this is not I think 95% of this would not have anything to do with polycarbonates or phenol 29:41 29 minutes, 41 seconds right? So sorry so I think we are in the nitration hydrogenation 29:49 29 minutes, 49 seconds in uh and florination in uh the h this would be over nitric acid in nandesari 29:56 29 minutes, 56 seconds this would be over the R&D facility this would be uh over a couple of other uh 30:03 30 minutes, 3 seconds purpose plants so all of these are so the R&D facility was commissioned the hydrogenation was uh commissioned 30:11 30 minutes, 11 seconds nitration will be commissioned at some point either this month or early next month. nitric acid will be coming this 30:18 30 minutes, 18 seconds quarter uh is in the process of being commissioned in fact and then you will have uh some balance uh the 30:26 30 minutes, 26 seconds multi-purpose plants which are going to be commissioned between the uh between March and May and finally MIBC and MIBK 30:37 30 minutes, 37 seconds which will be commissioned by uh March and that will be then taking care of uh 30:45 30 minutes, 45 seconds all of that 2,000 crores that we uh had announced into speciality chemicals and upstream integration. 30:52 30 minutes, 52 seconds So, so largely this 2,000 crores by say by March uh 26 or April or or before 30:59 30 minutes, 59 seconds June 26 we should see uh fully capitalized uh right most of it in uh this year and one uh I think two 31:08 31 minutes, 8 seconds projects will be commissioned uh in uh the first quarter of next year. So by June I think June end everything will be 31:17 31 minutes, 17 seconds submitted whatever we had announced and if you can also provide timelines when we can full see the full uh impact 31:26 31 minutes, 26 seconds on the both revenue and the bottom line it should also be by June or it will be 31:32 31 minutes, 32 seconds little bit elongated uh or it will most when it is for upstream integration such as uh uh nitric acid 31:42 31 minutes, 42 seconds we start uh you know running hot as soon as we are able to because we don't foresee any challenge in consumption. Uh 31:51 31 minutes, 51 seconds in nitration and hydrogenation also we will see how quickly we can go to 100. 31:57 31 minutes, 57 seconds Uh and again these are all now as compared to before they're all flexible assets. So they will be able to do multiple different kinds of products. 32:07 32 minutes, 7 seconds uh but for the multi-purpose plants which are going to be commissioned between uh March and June there there 32:16 32 minutes, 16 seconds will be a ramp up based on customer validation and on the basis of those stability trial things which 32:24 32 minutes, 24 seconds traditionally take anywhere between three five months. So there we will have some production 32:31 32 minutes, 31 seconds u and it'll be over you know several customers but then uh high uh operating 32:38 32 minutes, 38 seconds rates will be from I would say from mid uh onwards which will then arrive at uh 32:47 32 minutes, 47 seconds their end in uh December or yeah December onwards. 32:54 32 minutes, 54 seconds So okay that's how it would be. 32:57 32 minutes, 57 seconds Uh sorry I I missed on uh um I I didn't hear anything on the Oman plant. So how much we have spent on Oman plant so far? 33:10 33 minutes, 10 seconds Oman will take some time. So maybe uh 24 months from now. 33:20 33 minutes, 20 seconds Understood. Understood. And one final question is Sorry to interrupt sir but I may request you to rejoin the question queue for follow-up questions. 33:28 33 minutes, 28 seconds Sure. Okay. Thank you. 33:31 33 minutes, 31 seconds The next question is from the line of Abijit Kala from KIE. Please go ahead. 33:38 33 minutes, 38 seconds Yeah. Thank you and good afternoon. Um so just on these agrochemical intermediates you know where where 33:45 33 minutes, 45 seconds there's been some um kind kind of uh stop in in exports. Um are the US tariffs a factor behind this as well? 33:52 33 minutes, 52 seconds Are these intermediates subject to the tariffs and is that a factor holding back the demand from customers or is it purely a matter of in demand? 34:02 34 minutes, 2 seconds Okay. Uh so Abijit the problem is that the US tariffs have been spread across the whole world. So uh nowadays 34:12 34 minutes, 12 seconds everything is one way or another linked to US tariffs. either the anticipation of tariffs being withdrawn or the imposition of new tariffs or the 34:20 34 minutes, 20 seconds uncertainty about what is tariffed and what is not tariffed. So this creates a 34:27 34 minutes, 27 seconds lot of uncertainty in the customer's perspective. Even if there is a conversation about whether you know a 34:34 34 minutes, 34 seconds purchases will take place in China bought from the US and those questions I would say that hey anything that you 34:42 34 minutes, 42 seconds want to throw at this uh you can throw this tariff word at anything nowadays and it is a fair with fair confidence 34:50 34 minutes, 50 seconds you can say that there is some impact because of this. 34:55 34 minutes, 55 seconds So uh I would I would rather say that while tariffs are certainly a significant portion of the uncertainty 35:04 35 minutes, 4 seconds in the quarter and uh in the previous uh in Q1 and in Q2 but mostly in Q2 the gap 35:11 35 minutes, 11 seconds has been genuinely simply because uh of a uh of an inventory buildup which took 35:20 35 minutes, 20 seconds a lot longer than it should have to uh deplete itself. So when our customers are not producing 35:27 35 minutes, 27 seconds they're not in a position to buy our intermediates and the customers start consuming then they are in a position to buy our intermediates. 35:37 35 minutes, 37 seconds So moving forward as I have mentioned it is more linked to the consumption plan rather than just the tariffs. The 35:46 35 minutes, 46 seconds tariffs will of course affect the intensity of the consumption class. 35:55 35 minutes, 55 seconds Okay, fair enough. Yeah, got it. Thank you for that. Um, and just on the advanced intermediate segment, uh, the 36:02 36 minutes, 2 seconds 3% revenue decline we see year on year this quarter, uh, to 588 crores, would it be possible to just help us, uh, get 36:10 36 minutes, 10 seconds a split between, uh, volumes and prices for that segment for the quarter? 36:15 36 minutes, 15 seconds So all I can tell you is that uh I'll give you the answer but the answer won't make sense because the value drop is from one direction where the volume is 36:24 36 minutes, 24 seconds not high and the volume bump is in another direction where the margins are not high. 36:32 36 minutes, 32 seconds So uh let me put it this way. As I mentioned uh key chemicals being absent 36:38 36 minutes, 38 seconds from our uh Q2 sales plan have been a significant contributing factor to the 36:46 36 minutes, 46 seconds uh top line as well as the uh bottom line. 36:52 36 minutes, 52 seconds But in other places uh ironically our production uh efficiencies and our throughput continue to remain high even 37:01 37 minutes, 1 second in the face of uh dumping from China as we are ensuring that we maintain market 37:08 37 minutes, 8 seconds share because whatever one says important at this point is to ensure that we keep our plants running at 37:15 37 minutes, 15 seconds optimized efficiencies and uh we remain key in our customers wallet shares. 37:23 37 minutes, 23 seconds So we are confident that sooner or later this kind of dumping either by uh you know policy measures or non-policy 37:31 37 minutes, 31 seconds measures will uh it will start to moderate to levels which have been traditionally 37:38 37 minutes, 38 seconds there over the last how many of years but look honestly nothing stops uh you 37:45 37 minutes, 45 seconds know a large country like China from importing sanctioned natural gas from Russia. 37:51 37 minutes, 51 seconds even if other countries cannot and this will of course lead to a degree of arbitrage which we are happy to forego 38:01 38 minutes, 1 second because it's better to operate with all you know legal compliances not really get into spaces which have sanction 38:09 38 minutes, 9 seconds risks and all those things. So we believe that these things will moderate in terms of the impact on the bottom line. Uh and we believe that it'll be in H2. 38:21 38 minutes, 21 seconds Right. Are there any uh pre-operative expenses also within advanced intermediates that are uh depressing the results and if so is it possible to just quantify how much that impact might be? 38:37 38 minutes, 37 seconds There are uh expenses which are which is a part of this uh to quantify 38:44 38 minutes, 44 seconds it will be around 15 crores for the quarter. 38:52 38 minutes, 52 seconds Okay. Okay. Uh similar number in one Q as well or uh yes yes similar number. 38:59 38 minutes, 59 seconds Okay. Okay. Got it. Uh thank you so much. Maybe just one last thing if you'll permit me. Uh just on the new products uh that we are proposing to 39:06 39 minutes, 6 seconds launch in advanced intermediates u you know any incremental color you could share there uh you know regarding uh I mean just end users uh you know those 39:16 39 minutes, 16 seconds sorts of and I mean maybe growth potential and and revenue potential that would be very very helpful. Malik thank you so much. 39:22 39 minutes, 22 seconds Sure. uh what I can tell you right now rather than getting into uh revenue potential because these are still uh 39:29 39 minutes, 29 seconds products which we have recently started producing and uh you know I'm happy actually I'm delighted to share that I 39:37 39 minutes, 37 seconds think we've uh we have started production of uh I think seven new products in just Q2 itself 39:47 39 minutes, 47 seconds uh and these are all homegrown homedeveloped products which we did not really require any technical u you know technology licensing or 39:56 39 minutes, 56 seconds anything. Uh all of these products are uh into for example in one case it is into life sciences in another case I 40:05 40 minutes, 5 seconds think in another three cases these are into uh what we call effect chemicals so they go into applications such as 40:12 40 minutes, 12 seconds polymers flame retardants mining chemicals etc. Now all of them uh do 40:19 40 minutes, 19 seconds have uh you know a validation and an approval cycle. Some of these are I think a large amount of them would go to 40:26 40 minutes, 26 seconds customers in uh Japan and in the EU. So they do have uh a validation cycle 40:33 40 minutes, 33 seconds required. Uh happy to share that our product specifications so far have exceeded what is available in the market as told to us by our customers. 40:44 40 minutes, 44 seconds Nonetheless, stability studies and all that have to be carried out because in some cases they are what we what they 40:50 40 minutes, 50 seconds qualify as food grade because they uh you know they have contact with food ingredients. So these qualification 40:58 40 minutes, 58 seconds cycles can take as little as 3 months or as much as 5 months. uh and I think by some point maybe towards the end of Q4 41:07 41 minutes, 7 seconds or the middle of Q1 we will be able to have an aggressive ramp up on all of these. All of these will be done in 41:14 41 minutes, 14 seconds existing assets themselves and they will be done in uh campaigns. All of them have good margin profiles 41:22 41 minutes, 22 seconds and uh they will factor significantly in our uh FY27 numbers and completely in 41:31 41 minutes, 31 seconds our Q2 FY27 numbers but they will start to feature in uh Q1 as well and I think as we come closer to that I will be able 41:40 41 minutes, 40 seconds to share more light but uh these are you know exciting molecules with a lot of uh upside potential on margin and volume. 41:49 41 minutes, 49 seconds So we're just about starting to scratch the surface. 41:54 41 minutes, 54 seconds So that's very very helpful. The total uh investment in in these uh products would be how much is this part of the multi-purpose plants and if so how much 42:02 42 minutes, 2 seconds have we spent on on that area? So in a couple of cases yes uh you know for agrochemicals it'll be and I think one 42:09 42 minutes, 9 seconds pharma product it'll be in the multi-purpose plant in the others it will be in existing plants which have 42:17 42 minutes, 17 seconds already been refurbished uh to make them more compliant to these stringent specifications. 42:24 42 minutes, 24 seconds So other than the multi-purpose plant uh investment, nothing else is uh I would say a significant capital investment. 42:32 42 minutes, 32 seconds Maybe small things such as uh solid handling systems and powdering systems, HVAC systems, those things. So these are 42:39 42 minutes, 39 seconds all what we consider as minor. We don't go into uh uh tomtoming about them as 42:47 42 minutes, 47 seconds investments. But there is a good upside potential in terms of their market penetration and growth because the 42:54 42 minutes, 54 seconds product quality has been surpassing the customer's expectation but now we have to await their validation period. 43:03 43 minutes, 3 seconds Understood. Thanks a lot and uh wish you all the best. Thank you. Thank you. 43:10 43 minutes, 10 seconds The next question is from the line of Sesh Jen from ICIC Securities. Please go ahead. 43:17 43 minutes, 17 seconds Yeah. Uh good afternoon. Thanks for taking the question. I got a few of them. First on the agrochemical molecule spoke about uh moving up in the value 43:25 43 minutes, 25 seconds chain. Uh when we should see that and uh how many products are we working there and and uh uh the effect of that should 43:35 43 minutes, 35 seconds be visible in the second half of uh uh this fiscal year. That's one. Uh number two on the phenol spread that appears to 43:42 43 minutes, 42 seconds be quite depressed uh it's gone further down can help us understand whether it's a demand side issue or whether it's a uh 43:49 43 minutes, 49 seconds supply side issue and if it is supply side where are we seeing the supplies coming in and how much more can come in that's second uh number third you said 43:58 43 minutes, 58 seconds in opening remark that you have seen uh Chinese dumping uh few products uh in other geography because they are facing 44:05 44 minutes, 5 seconds challenge from US tariff uh which are this product and uh which are the geographies whether it is also coming into India can help us build. So these are the three questions. Thank you. 44:16 44 minutes, 16 seconds Okay. Uh I'll answer your uh third question first. So the significant amount of dumping that we're finding 44:24 44 minutes, 24 seconds from China would be in products such as uh sodium nitrite would be in products 44:31 44 minutes, 31 seconds such as uh uh dasta which is an intermediate uh to make optical brightness and in a couple of cases of nitroaromatics. 44:42 44 minutes, 42 seconds So uh the pressure from uh Chinese dumping is substantial. Now obviously it 44:49 44 minutes, 49 seconds is always going to be a fight about maintaining wallet share versus maintaining uh a price premium 44:57 44 minutes, 57 seconds and this is a balancing act with regards to the um the the margin question with 45:06 45 minutes, 6 seconds regards to phenol spreads. I think right now we are in a very strange position where none of these things are actually 45:14 45 minutes, 14 seconds representative of the reality on the ground simply because you've had a lot of these situations such as you know a 45:22 45 minutes, 22 seconds few traders in distributors in India being uh sanctioned by the US government. There has therefore been a 45:32 45 minutes, 32 seconds uh you know a curtailment of the normal trade flows that one would see between South Asia and uh India in terms of 45:41 45 minutes, 41 seconds these large volume petrochemical products. Uh obviously that also affects uh you know products such as phenol and 45:48 45 minutes, 48 seconds all. So uh what you're seeing as indexes are different from what uh is being felt 45:57 45 minutes, 57 seconds on the ground in terms of the ease of availability or the premium that uh is charged over and above the index to 46:06 46 minutes, 6 seconds service the Indian market. So what turns out to be a negative for the AI segment because of a challenge in bringing 46:14 46 minutes, 14 seconds petrochemical products into India also turns out to be uh at least a short-term advantage for phenolics because it is 46:23 46 minutes, 23 seconds able to ensure that it continues to retain a market share even if it is able to create a you know a small premium in the short term it's able to do that. 46:37 46 minutes, 37 seconds Got it. What was your first question? Sorry. 46:42 46 minutes, 42 seconds Uh on the um uh moving up in the value chain and in sense of agrochemical uh you spoke about it a few quarters back. 46:50 46 minutes, 50 seconds Just wanted to get your sense where are we in the process and uh when should we see these products uh commercializing? 46:57 46 minutes, 57 seconds So our ability to commercialize will be within the quarter. We're speaking with a couple of uh potential strategic 47:05 47 minutes, 5 seconds partners to see how we can do it uh together which allows them to have uh 47:12 47 minutes, 12 seconds you know an expanded presence in India without needing to put steel on the ground. Now we're trying to see whether we can do it together. If not together 47:20 47 minutes, 20 seconds then we will find a different strategy to approach the market. Uh what we've also done in the meanwhile is assets 47:27 47 minutes, 27 seconds which are you you know used for making one agrochemical intermediate are now funible towards being able to make other agrochemical intermediates or other life science intermediates. 47:38 47 minutes, 38 seconds So most of our assets over the last 6 months have been made increasingly fungeible because we are continuing to 47:46 47 minutes, 46 seconds anticipate a degree of volatility that we have not seen in the previous few years. First and foremost, our focus has 47:53 47 minutes, 53 seconds to be to see that we can do multiple products in the same plant in a campaign basis or by saying okay let's break this 48:02 48 minutes, 2 seconds plant up into stream one and two stream one will continue to do the legacy products stream two will continue to do these two or three new products in 48:10 48 minutes, 10 seconds campaigns. This is how we're approaching uh to increase our own resilience and by being product agnostic but uh chemistry focused. 48:22 48 minutes, 22 seconds Got it. One one follow-up question there Malik on the uh sanctioned part you spoke about in the phenolic spread now that increasingly when Indians are 48:30 48 minutes, 30 seconds talking of using le lesser Russian oil that means the feed stock prices can increase in India. Are you seeing that 48:37 48 minutes, 37 seconds impact and can it be uh act as an catalyst in coming quarters? 48:44 48 minutes, 44 seconds Um feed stock prices you know products such as tooline, benzene, xylene 48:51 48 minutes, 51 seconds normally you know even if there are large Indian refiners there is also a significant trade flow 49:00 49 minutes that takes place from Asia uh from South Asia. Somehow you don't generally see these products being 49:08 49 minutes, 8 seconds imported from China but whether it is Korea, whether it is Thailand, Taiwan etc. you do see a regular trade flow 49:15 49 minutes, 15 seconds from these regions into India and I think that uh there is a short-term glip with regards to the uh you know dealer 49:23 49 minutes, 23 seconds distributor network having some sanction threat over them but other than that I would not say that uh Russian oil 49:32 49 minutes, 32 seconds sanctions would dramatically affect uh the prices on such things such as uh you 49:39 49 minutes, 39 seconds know tolwine benzene xylene uh I could be wrong. I could be wrong but uh so far we have not seen any direct implication of that. 49:50 49 minutes, 50 seconds That's clear. Thanks Molly for answering all those questions and the support for the goddess. Thank you so much. 49:57 49 minutes, 57 seconds Thank you. The next question is from the line of Kumar Samya from Ambit Capital. Please go ahead. 50:04 50 minutes, 4 seconds Hi sir, good afternoon. A couple of question from myself. Firstly when I look at the difference between advanced intermediate and standalone business we 50:12 50 minutes, 12 seconds are seeing good improvement over the last two three quarters if you could help me understand what is driving this is it entirely chem or there's some 50:20 50 minutes, 20 seconds contribution from polymer compounding as well no not so far uh we're optimistic 50:28 50 minutes, 28 seconds I think uh once the projects start getting uh commissioned uh kech will become a significant contributor to the group's bottom line. 50:38 50 minutes, 38 seconds But uh again just to be clear that the products that are being made in Cheek are products which are largely familiar to the business teams in both Deep Nitrite and Finolics. 50:49 50 minutes, 49 seconds So the teams are across the board working together to ensure that there is uh smooth project execution and 50:57 50 minutes, 57 seconds commissioning that there have been delays uh in the last couple of quarters. There's no 51:04 51 minutes, 4 seconds doubt about it. But uh we're starting to ensure that there is a greater degree of uh control and coordination 51:14 51 minutes, 14 seconds and that's why we are more positive about uh uh the commissioning dates as I had mentioned earlier. 51:22 51 minutes, 22 seconds Got it. Uh where are we on the uh this compounding business right now? Have we started that asset or are we starting to test the market? 51:32 51 minutes, 32 seconds So we uh we put up a polymer compounding facility which I would still call a pilot facility in Savi 51:42 51 minutes, 42 seconds uh and uh this is a state-of-the-art facility. So this is allowing us to create uh formulations which have uh you 51:52 51 minutes, 52 seconds know which are in their uh validation process. But now in compounding these validations unlike agrochemicals and 51:59 51 minutes, 59 seconds other products these validations can take up to almost uh maybe a year or 18 months. So that's the reason we started 52:07 52 minutes, 7 seconds early and that's the reason that we've started uh you know seeding this. So we've been getting a lot of positive 52:15 52 minutes, 15 seconds traction on that front. What we're also starting to do is engage with uh potential strategic players who are 52:23 52 minutes, 23 seconds already there in the space to see if there's opportunities to approach uh 52:30 52 minutes, 30 seconds jointly for certain applications where there is IP on their uh you know which they have and an interest and intent in 52:38 52 minutes, 38 seconds getting into the Indian market and at the same time they're able to see how to get this made in our own what as I 52:47 52 minutes, 47 seconds mentioned earlier are pilot facilities to service the customers otherwise uh it's not really competitive for them to 52:54 52 minutes, 54 seconds do it in high-cost regions such as Europe. 52:58 52 minutes, 58 seconds So this is an ongoing activity and still too early to you know congratulate ourselves but we are seeing positive 53:06 53 minutes, 6 seconds traction from global majors on this front. uh how much this translates into what percentage of the polymer uh 53:15 53 minutes, 15 seconds revenue coming from these kinds of partnerships and how much of it comes from doing it ourselves uh it's too 53:22 53 minutes, 22 seconds early to say got uh so two questions for Sanjay sir uh firstly on the cost control measures 53:30 53 minutes, 30 seconds that we have seen in the standard and business uh how should we look at this uh should we expect this run to continue or uh so just if you would throw some 53:39 53 minutes, 39 seconds light on Yes, because we are seeing some cost controls and even Q1 Q on year on year on the employee plus side other expenses. 53:46 53 minutes, 46 seconds Yes. Yes. I mean that is an ongoing exercise. In fact uh I had mentioned uh in last conference also that uh 53:55 53 minutes, 55 seconds companies actively actively pursue this cost starting business because the market being whatever it is you know 54:02 54 minutes, 2 seconds this tariffs and uh we are we are I mean certain things are not in our control 54:08 54 minutes, 8 seconds but cost cutting or the uh spend reducing the spend and this we can 54:15 54 minutes, 15 seconds certainly do and you are seeing in the first half and you will see in the second half also. 54:20 54 minutes, 20 seconds you know going forward uh there will be reduction in the fixed cost uh over and above whatever we have achieved so far 54:29 54 minutes, 29 seconds you got it and so lastly uh the capex guidance for this year was about 1,500 crores are you holding on to that 54:37 54 minutes, 37 seconds sorry can you repeat the keex guidance for this year was about 1 1500 crores so is it still there or 54:46 54 minutes, 46 seconds more or less same I don't see Yes, thank you sir. That was all. Thank you. Thanks. 54:54 54 minutes, 54 seconds Thank you. The next question is from the line of Vive Rajamani from Morgan Stanley. Please go ahead. 55:06 55 minutes, 6 seconds Um hi sir uh thank you so much for the presentation. Uh the question was an extension to the previous participants. 55:14 55 minutes, 14 seconds Uh just with respect to the downstream integrated polycarbonate projects uh could you just uh give us how should we 55:21 55 minutes, 21 seconds think about the capeex for uh you know 27 fiscal 27 fiscal 28 and if you could also give us an update uh with respect 55:29 55 minutes, 29 seconds to the timelines of the commissioning uh of the various parts. Thank you. 55:37 55 minutes, 37 seconds So uh commissioning we had mentioned earlier it will be in the uh in January to March 28th quarter. 55:48 55 minutes, 48 seconds Okay. And we are trying to see the project all the project goes on stream by and large the at the same time because it's a very integrated approach 55:57 55 minutes, 57 seconds we are taking. So some project may start late but ultimately completion will should be in the same uh 56:04 56 minutes, 4 seconds during the same time. Now we are still working on uh one or two uh products on 56:11 56 minutes, 11 seconds that. So exact dates and these we'll come back to you later but by and large we have endor is to complete at the same time by March 28. 56:27 56 minutes, 27 seconds Uh sure sir that's clear and any yeah sorry let me complete if there's a delay in propane supply then we may have to 56:36 56 minutes, 36 seconds push back our uh project also or we may run through imported uh uh BPA but that 56:44 56 minutes, 44 seconds all calculations we are making now once we know the reality I mean when we come nearer to the project 56:56 56 minutes, 56 seconds so It's uh clear and any indication of how we should think about the ethics spend over you know over the course of 57:03 57 minutes, 3 seconds this uh uh March 28th startup 57:10 57 minutes, 10 seconds what is that uh what's the question like and I just wanted to get a sense of uh you mentioned 1500 crores of capeex for 57:19 57 minutes, 19 seconds this year uh could you just give us an indication for fiscal 27 and fiscal 28 as 57:27 57 minutes, 27 seconds Okay. You want the capeex outlay for next 3 years? Uh it will be around 3,000 to 4,000 57:36 57 minutes, 36 seconds because the total outlet is around 9,000 crores. So 3 three three and a half th000 and then 4,000 next year. 57:47 57 minutes, 47 seconds Okay sir. Uh that's helpful. Um thank you so much and I'll rejoin the queue. Okay. 57:54 57 minutes, 54 seconds Thank you. The next question is from the line of Sajal Kapoor from Antifragile Thinking. Please go ahead. 58:03 58 minutes, 3 seconds Yeah. Hi, thank you for taking my questions. Malik, I heard the refreshing keyword funible earlier on the call. So 58:11 58 minutes, 11 seconds how does the new state-of-the-art R&D center at Savi combined with um you know Deepak's existing digital and 58:18 58 minutes, 18 seconds intellectual capital enable a more sort of nimble and multi-purpose incremental capex investments approach um you know 58:27 58 minutes, 27 seconds perhaps helping avoid the prolonged rigidity and risks that are often associated with you know large dedicated capex in a volatile and uncertain world. 58:37 58 minutes, 37 seconds That's my first question. Thank you. 58:39 58 minutes, 39 seconds Okay, thanks for the question. Uh, so basically the R&D facility has uh a 58:47 58 minutes, 47 seconds three-pronged approach to it. One is uh to develop new molecules. The other one is uh what we call process 58:55 58 minutes, 55 seconds intensification. How to make the same molecules more efficiently. And the third one is to basically look at 59:02 59 minutes, 2 seconds processes independent of each other. So for example, I have a plant that makes sodium nitrite or I have a plant that makes nitroines. 59:12 59 minutes, 12 seconds Now it is a plant. It has you know certain reactor setup. It has certain peak efficiencies and kinetics. What can 59:20 59 minutes, 20 seconds I do using uh AI? What can I do using the data lake that we have generated? 59:28 59 minutes, 28 seconds And uh what can I do to identify other products that can be made in the same reactor assembly without compromising on 59:37 59 minutes, 37 seconds uh safety and perhaps uh you know ensure that rather quickly using just you know 59:46 59 minutes, 46 seconds the digital tools available at our fingertips like uh modeling software for example or by u uh you know doing 59:55 59 minutes, 55 seconds failure mode analysis. How can I quickly have a tech pack developed internally to be able to replace the existing product 1:00:03 1 hour, 3 seconds with a new product as quickly as possible so that at least my bottom line is secure if I feel that there is a period of time where I'm expecting a 1:00:12 1 hour, 12 seconds lull in the marketplace. So one of the key things that we have done thanks to that is uh as I mentioned we have 1:00:21 1 hour, 21 seconds genuinely accelerated our ability to take uh uh products from idea to commercial. Now uh you know they do 1:00:29 1 hour, 29 seconds appear they do appear to be attractive to customers but they have to go through their validation period and we've 1:00:37 1 hour, 37 seconds cherrypicked ones which would be made using assets where there is currently a lower occupancy. We've made large volumes of those and then seeded them 1:00:46 1 hour, 46 seconds out in time to ensure that the assets are then cleaned up so that they are available to make the legacy product. 1:00:55 1 hour, 55 seconds And once we get this feedback uh from customers hopefully for uh steadystate supply, then we will be able to run 1:01:02 1 hour, 1 minute, 2 seconds multiple products in campaigns. And uh all of this again feeds to a very tightly integrated system between the 1:01:11 1 hour, 1 minute, 11 seconds idea generation the R&D which is both the software as well as the hardware uh the people who are there in it uh the 1:01:20 1 hour, 1 minute, 20 seconds piloting and scale up for sample seeding and then the plant teams. So that's why I just want to carefully say that while 1:01:28 1 hour, 1 minute, 28 seconds we're introducing a lot of new chemistries, I think by the end of uh next year we will be at least in India 1:01:36 1 hour, 1 minute, 36 seconds company that has the maximum amount of chemistry platforms under one house compared to any other Indian chemical company. 1:01:44 1 hour, 1 minute, 44 seconds uh we will also see that much of this is developed using in-house uh R&D and uh a 1:01:51 1 hour, 1 minute, 51 seconds collaborative approach as I mentioned software hardware pilot plant engineering and R&D 1:02:02 1 hour, 2 minutes, 2 seconds yeah no data l data lake yeah sorry yeah so data lake I like that 1:02:09 1 hour, 2 minutes, 9 seconds um and thanks for um giving a very detailed and very reassuring um answer. 1:02:14 1 hour, 2 minutes, 14 seconds We we have all been you know um personally invested um in Deepak for many many years and um 1:02:22 1 hour, 2 minutes, 22 seconds and look forward to you know um a a longl lasting glory ahead. My second question is Malik um given India 1:02:29 1 hour, 2 minutes, 29 seconds currently imports all the polycarbonate um what market intelligence beyond quote unquote import substitution underpins um 1:02:39 1 hour, 2 minutes, 39 seconds conviction in future domestic demands from um EVs, electronics and also healthcare. 1:02:48 1 hour, 2 minutes, 48 seconds So um a lot of the investment that is going into all of these what you would call sunrise segments in India although 1:02:58 1 hour, 2 minutes, 58 seconds I would say also that you know you have a neighbor like China where these are mature technologies. 1:03:03 1 hour, 3 minutes, 3 seconds uh what I qualify in India is it's a term which I think other people don't like but I'll share it anyways is a 1:03:10 1 hour, 3 minutes, 10 seconds second mover advantage where a lot of these applications are already finding a high degree of uh maturity and 1:03:19 1 hour, 3 minutes, 19 seconds acceptance polycarbonates are uh they're the backbone in a sense what is important is the changing formulations 1:03:28 1 hour, 3 minutes, 28 seconds and the compounds that are created by using polycarbonate as a board. So, uh if I was to give you an example, you 1:03:37 1 hour, 3 minutes, 37 seconds know, a chair is a chair has been a chair for the last how many ever centuries. What changes is the fabric, 1:03:44 1 hour, 3 minutes, 44 seconds what changes is, you know, various things like, you know, the flexibility, the modularity, those things. But a 1:03:51 1 hour, 3 minutes, 51 seconds chair remains a chair. A polycarbonate resin is a chair. The compound is the 1:03:58 1 hour, 3 minutes, 58 seconds different functionalities that you can add to it. So if you want to create uh you know resistance to heat, if you want 1:04:07 1 hour, 4 minutes, 7 seconds to create uh you know insulation or conductivity, all those properties are added onto the backbone of a polycarbonate 1:04:15 1 hour, 4 minutes, 15 seconds and that's where you have the compounding and the formulations. 1:04:19 1 hour, 4 minutes, 19 seconds So the interesting thing is that India actually imports a substantial amount of the polycarbonate backbone itself. Our 1:04:27 1 hour, 4 minutes, 27 seconds effort step one has been to make polycarbonate as uh costefficiently as possible. But 1:04:35 1 hour, 4 minutes, 35 seconds because that takes a couple of years and a large scale project execution, what we've done is in the meanwhile we've gone downstream and we started seing 1:04:43 1 hour, 4 minutes, 43 seconds ourselves into the mind space and the uh factory space of our customers 1:04:51 1 hour, 4 minutes, 51 seconds to say that we're here. We're offering you compounds which are made using polycarbonate as a backbone. Now as 1:04:58 1 hour, 4 minutes, 58 seconds these compounds start getting accepted and validated at our customers end those are electronics those are you know 1:05:05 1 hour, 5 minutes, 5 seconds things like mobile phones and uh uh auto components and those things then uh then it will just simply look like 1:05:13 1 hour, 5 minutes, 13 seconds polycarbonate manufacturing was an upstream integration. Even though it was thought of first, it came in last and it 1:05:21 1 hour, 5 minutes, 21 seconds integrated as uh a cost uh optimization measure. 1:05:28 1 hour, 5 minutes, 28 seconds Yeah. No, absolutely. Thanks for that. 1:05:30 1 hour, 5 minutes, 30 seconds And second mover advantage is brilliant strategy Mik because if you can learn from the mistakes of the first mover and make it better and cheaper maybe uh 1:05:39 1 hour, 5 minutes, 39 seconds nothing like it. So thank you. Thank you for that. 1:05:42 1 hour, 5 minutes, 42 seconds Thank you. I really appreciate. I'll just add one more point. This was also one of the reasons why we chose to go with uh you know rather than investing 1:05:51 1 hour, 5 minutes, 51 seconds in putting up a brand new polycarbonate facility, we went with uh an asset which 1:05:57 1 hour, 5 minutes, 57 seconds has been proven with a high degree of reliability where you know over this period of time 1:06:06 1 hour, 6 minutes, 6 seconds you know you've seen the cost of everything like metals uh you know exotic alloys and all that go up. So honestly if I was to put up a plant a 1:06:15 1 hour, 6 minutes, 15 seconds brand new plant today the same exotic alloys would be uh available at at least 1:06:22 1 hour, 6 minutes, 22 seconds 100% higher cost. So here we have an asset where we have proven reliability 1:06:30 1 hour, 6 minutes, 30 seconds understanding about how maintenance has taken place how scheduling for those things has taken place learning from 1:06:37 1 hour, 6 minutes, 37 seconds experience comes in for free in a sense and so I mean I want to allay anyone's 1:06:44 1 hour, 6 minutes, 44 seconds concern here thinking that uh you know if it was a green field investment would it have had uh more traction to be 1:06:52 1 hour, 6 minutes, 52 seconds honest the way that we've gone ahead with this has not been uh to save money but it has been to be able to hit 1:07:00 1 hour, 7 minutes traction very fast with uh you know where we have been able to buy in experience literally for free when putting up the asset. 1:07:13 1 hour, 7 minutes, 13 seconds Absolutely brilliant thinking and all the very best Molly. Thank you so much. Thank you so much. Thank you. 1:07:21 1 hour, 7 minutes, 21 seconds The next question is from the line of Nisha from Vaj Vajani Capital Services. Please go ahead. 1:07:30 1 hour, 7 minutes, 30 seconds Uh yeah, I'm audible. Yes. Hello. Yeah. 1:07:36 1 hour, 7 minutes, 36 seconds Yes. My first question is could you please explain the sensitivity of your margins to the fluctuations of the 1:07:42 1 hour, 7 minutes, 42 seconds phenol price uh propane price? Sorry, that's the raw material of phenol. 1:07:51 1 hour, 7 minutes, 51 seconds Um I I've mentioned this uh earlier also that uh the index I think because of these 1:07:59 1 hour, 7 minutes, 59 seconds short-term challenges not a fair representation of the uh the price at which we consume the feed stock. 1:08:09 1 hour, 8 minutes, 9 seconds So I think it's a fair question, good question, but uh maybe the same question 1:08:15 1 hour, 8 minutes, 15 seconds if it is asked next quarter uh or in Q1 I I would be able to give you a more honest answer. 1:08:23 1 hour, 8 minutes, 23 seconds Uh and the second question that I have is uh can you just just give me a guidance about the revenue and the profit profitability for the next quarter or the financial year? 1:08:35 1 hour, 8 minutes, 35 seconds Uh look, all I can say is that uh we are cautiously optimistic about an H2 1:08:42 1 hour, 8 minutes, 42 seconds which is uh I would say better than what we saw in Q2. 1:08:49 1 hour, 8 minutes, 49 seconds And uh this will partially come from a what we hope is an improving market uh sentiment and a demand sentiment and 1:08:58 1 hour, 8 minutes, 58 seconds partially it'll also come from the commissioning of investments that have uh uh that are in that process in Deepak. 1:09:08 1 hour, 9 minutes, 8 seconds I'm referring to this answer. Okay sir. Thank you so much. 1:09:16 1 hour, 9 minutes, 16 seconds Thank you. 1:09:18 1 hour, 9 minutes, 18 seconds Thank you. The next question is from the line of Arun from Aendespak. Please go ahead. 1:09:28 1 hour, 9 minutes, 28 seconds Uh thanks for the followup question team Malik. Uh my question is on the once again on the polygon project. So now that we have uh reaffirmed our uh uh 1:09:38 1 hour, 9 minutes, 38 seconds start date as uh before March 28. So if you have to work backwards uh what should be the latest period by 1:09:46 1 hour, 9 minutes, 46 seconds which we should finalize let's say uh each individual packages like uh uh 1:09:53 1 hour, 9 minutes, 53 seconds detailed engineering or uh ordering long lead items or when we should be ground breaking the ground uh those timelines 1:10:01 1 hour, 10 minutes, 1 second if you can uh just u uh uh explain it will be very helpful. 1:10:08 1 hour, 10 minutes, 8 seconds I think uh I can just say one that uh we've already broken ground first of all. Uh so there is already uh site 1:10:16 1 hour, 10 minutes, 16 seconds development that is taking place. In the meanwhile we've already appointed the dismantling contractors in Q1. 1:10:24 1 hour, 10 minutes, 24 seconds Dismantling has already uh started in uh in Germany. Uh we have also as I've 1:10:34 1 hour, 10 minutes, 34 seconds mentioned as Mr. I clarified that this is our goal with regards to uh ensuring that this is an integrated complex. If 1:10:43 1 hour, 10 minutes, 43 seconds there is a mismatch in timelines for whatever reasons, we have already ensured that the investment includes 1:10:51 1 hour, 10 minutes, 51 seconds that degree of uh flexibility where we are able to afford a degree of mismatch. 1:10:57 1 hour, 10 minutes, 57 seconds So while everything will be integrated uh you know as the uh final outcome if 1:11:05 1 hour, 11 minutes, 5 seconds there is a mismatch where one thing comes up before another thing there's ample opportunity for uh you know placing that in the market also and 1:11:13 1 hour, 11 minutes, 13 seconds there is ample opportunity for us to buy the feed stock and have that as a storage in our uh uh site where the 1:11:21 1 hour, 11 minutes, 21 seconds downstream consumption may be ready before the upstream uh integration. 1:11:27 1 hour, 11 minutes, 27 seconds So, so endeavor is to uh start polycarbonate at a resin capacity by any cost before this time period but you are flexible with say BPA or the phenol one. 1:11:39 1 hour, 11 minutes, 39 seconds Uh right we've already uh we've already signed an agreement uh uh for licensing and basic 1:11:48 1 hour, 11 minutes, 48 seconds package for the phenol plant. We as as you're aware we've already signed an agreement with uh Trinszio for the 1:11:57 1 hour, 11 minutes, 57 seconds technology and assets to make uh polycarbonate resins. We've already approved the dismantling contractor in 1:12:05 1 hour, 12 minutes, 5 seconds Q1. We've already appointed uh an EPCM for polycarbonate and all the offshore 1:12:13 1 hour, 12 minutes, 13 seconds off-site and utility packages. hand where in advanced stages of a discussion with regards to certain uh utilities 1:12:22 1 hour, 12 minutes, 22 seconds being supplied is part of the integrated asset. So uh I think across the board uh 1:12:30 1 hour, 12 minutes, 30 seconds there's a lot of activity a lot of things have been signed there are a few things that are uh still in front of us but I hope that this gives you 1:12:38 1 hour, 12 minutes, 38 seconds confidence about the elacrity with which we are progressing on this. 1:12:44 1 hour, 12 minutes, 44 seconds uh any update on BPF part because uh I think we are to finalize the technology. 1:12:50 1 hour, 12 minutes, 50 seconds I look forward to answering that question. 1:12:56 1 hour, 12 minutes, 56 seconds Okay. Some still the discussions are going on it seems. 1:13:00 1 hour, 13 minutes Uh let's let's give the team uh the best opportunities they have to get the best technology possible. 1:13:08 1 hour, 13 minutes, 8 seconds But rest assured, just to be clear, rest assured, uh nothing in this value chain stops us 1:13:16 1 hour, 13 minutes, 16 seconds from executing whatever has been signed off. Uh so none of these things are dependent on 1:13:24 1 hour, 13 minutes, 24 seconds something else happening first. Let's be clear about that. 1:13:30 1 hour, 13 minutes, 30 seconds Okay, understood, Malik and all the best. Thank you very much. Thank you. 1:13:35 1 hour, 13 minutes, 35 seconds Thank you ladies and gentlemen. As there are no further questions from the participants, I now hand the conference over to the management for closing comments. 1:13:45 1 hour, 13 minutes, 45 seconds Thank you so much for taking out uh time to join us on earning conference call. I hope you adequately answered all your 1:13:53 1 hour, 13 minutes, 53 seconds questions. We look forward to connecting with all you again in the next quarter. Thank you. 1:14:02 1 hour, 14 minutes, 2 seconds Thank you. On behalf of Deepak Nitrate, that concludes this conference.