Ellenbarrie Industrial Gases Limited — Q3 FY26

Ellenbarrie Industrial Gases Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=s7TkXBmcA4A Published: 3 months ago

0:00 Good evening ladies and gentlemen. 0:01 1 second Welcome to the Q3 FI26 earnings conference call of Elenbury Industrial Gases Limited hosted by Radhi Capital. 0:08 8 seconds [clears throat] As a reminder, all attendees will be in the listenon only mode and there will be an opportunity for you to ask questions after the 0:15 15 seconds presentation concludes. If you have any questions, please feel free to press the raise hand button. We'll call on you in turn and unmute your line so you can 0:23 23 seconds speak. You can also post your questions in the chat window and we'll try to answer either during the call or get back to you on email. Please note that this conference is being recorded. 0:33 33 seconds Kindly also note that the audio of the earnings call is a corporate material of Ellenbury Industrial Gases Limited and cannot be copied or rebroadcasted or 0:42 42 seconds attributed in the PR media without specific and written consent of the company. Please note that anything said on this call that reflects the outlook 0:49 49 seconds towards the future, which can be construed as a forward-looking statement must be reviewed in conjunction with the risk that the company faces. A copy of 0:58 58 seconds the disclosure is available on the investor relations section of the website as well as on the stock exchanges. To give you an in-depth 1:05 1 minute, 5 seconds understanding of the company and answer all your queries, we have from the management side today, Mr. Padam Kumar Agarwala, chairman and managing 1:13 1 minute, 13 seconds director, Mr. Dr. Vunu Nagarwal, joint managing director and Mr. Quesri Nias Prasad, chief financial officer. I now 1:20 1 minute, 20 seconds hand over the conference to Mr. Agarwala for his opening remarks. Thank you and over to you sir. 1:27 1 minute, 27 seconds Good afternoon everyone and thank you for joining us. This is the first call of the calendar year and I wish you all a happy, healthy and safe 2026. 1:39 1 minute, 39 seconds We have seen a lot of events on the national and global scene which could not be imagined 5 years back. 1:48 1 minute, 48 seconds For the first time, our honorable frighten finance minister has presented a budget on a Sunday. Yesterday, we also 1:55 1 minute, 55 seconds saw a roll back of the US tariffs which changes the general mood of business and government. 2:03 2 minutes, 3 seconds Gases industry is also evolving and we now see a slow shift in focus from 2:09 2 minutes, 9 seconds metals to renewables, recycling and green energy. Although metals still have a maximum bearing on our business. 2:19 2 minutes, 19 seconds Let me start with a quick snapshot of our Q3 performance for the quarter. 2:25 2 minutes, 25 seconds Revenue from operations stood at uh rups 813 million and total income was rupees 2:33 2 minutes, 33 seconds 974 million. AITA at rupees 253 million translating to an AITA margin of 31%. 2:43 2 minutes, 43 seconds PAT came in at 261 million. 2:48 2 minutes, 48 seconds Now, while the year yearon-year numbers show healthy growth, it is fair to acknowledge that this was a tougher 2:57 2 minutes, 57 seconds quarter. Sequentially, revenue from operations declined 9% quarteron quarter. AITA declined 25% and margins 3:06 3 minutes, 6 seconds moved from 38% in Q2 to 31% in Q3. 3:12 3 minutes, 12 seconds Uh there were two main drivers. First, we saw low argan realizations during the quarter. This was largely a function of 3:21 3 minutes, 21 seconds a softer environment and steel and an over supply of argan into the market from captive gas plants operated by steel manufacturers. 3:31 3 minutes, 31 seconds Second and other expenses were elevated compared to Q3 of last year driven by certain one-off costs. 3:42 3 minutes, 42 seconds Together along with slightly lower sequential volumes due to softness of steel sector impacted profitability for the quarter. 3:51 3 minutes, 51 seconds Looking ahead, we remain constructive. 3:55 3 minutes, 55 seconds First on execution, we have commissioned the Olivia 2 merchant plant in West Bengal. uh capacity 220 4:03 4 minutes, 3 seconds tons per day of liquid products and we are now focused on ramp up and commercial optimization. 4:10 4 minutes, 10 seconds We are also progressing on next leg of additions including the East India 4:17 4 minutes, 17 seconds on-site plant 320 tons per day expected in Q1 FY27 4:24 4 minutes, 24 seconds and the North India bulk plant 220 targeted H2 FY27. 4:33 4 minutes, 33 seconds Second on capital allocation and resilience we continue to operate with a strong balance sheet as per our stated 4:41 4 minutes, 41 seconds position net cash is at 3550 million and we remain disciplined on kix 4:49 4 minutes, 49 seconds with guidance of rupees 2500 million in FY26 and rups 2,000 million in FY27. 5:00 5 minutes We are working on multiple expansion projects which will continue to drive the long-term growth of the company. 5:08 5 minutes, 8 seconds Thirdly, on cost, we are working towards power cost optimization and sustainability by signing up for a 5:17 5 minutes, 17 seconds renewable energy contract. Since power costs are the single largest item for us, this becomes extremely crucial. 5:28 5 minutes, 28 seconds In summary, while the macro environment presented hurdles this quarter, we expect this to now improve with the 5:36 5 minutes, 36 seconds recent trade deals. Our fundamental business remains resilient. We are committed to our long-term growth 5:44 5 minutes, 44 seconds trajectory and are confident that our upcoming capacities will drive significant value for our stakeholders. 5:52 5 minutes, 52 seconds With that, we will now open up for question and answers. Thank you. 6:00 6 minutes Thank you. So that's all. We will now open the call for questions. Kindly raise your hand to ask a question. We will unmute your line. And as a 6:07 6 minutes, 7 seconds reminder, we request all participants to restrict themselves to two questions and come back in the queue. 6:23 6 minutes, 23 seconds Our first question is from the line of Dika. Uh Devika please go ahead and ask your question. 6:38 6 minutes, 38 seconds Uh Da unmute yourself and please go ahead. 6:44 6 minutes, 44 seconds [snorts] 6:52 6 minutes, 52 seconds Hello. Yeah. Can you speak really loudly? Hello. Can you hear me? 6:58 6 minutes, 58 seconds Yeah. Yeah. Yeah. Please go ahead. 7:09 7 minutes, 9 seconds Uh Dika, unmute yourself. Uh hello. Now, can you hear me? Yes. 7:17 7 minutes, 17 seconds Um I apologize for the technical glitch. 7:19 7 minutes, 19 seconds Uh first of all, thank you so much for the opportunity. Um I just wanted to understand that um like you mentioned about the EIDA margins how it like 7:28 7 minutes, 28 seconds decline due to the one-off cost and the lower argon realization in this quarter. 7:32 7 minutes, 32 seconds I wanted to understand what would be the uh sustainable EIDA margin that we see for the business over the medium term like do we still hold on to the 40% 7:41 7 minutes, 41 seconds margin aspiration once the argon pricing perhaps normalizes? 7:47 7 minutes, 47 seconds Uh sure. Uh so Dika right this is Vun 7:55 7 minutes, 55 seconds Nagaral. Um so yes uh we we do hold on to uh Eida margins of uh around 40% you 8:04 8 minutes, 4 seconds know this was a a weak quarter that uh we just uh finished. uh if you broadly 8:11 8 minutes, 11 seconds look at you know the 9-month uh kind of aida margins uh I I mean on a sort of 8:18 8 minutes, 18 seconds financial year-to-ate basis we are still you know at about uh 36%. 8:25 8 minutes, 25 seconds Um and you know why why we are guiding towards a 40% AIDA margin is because you 8:32 8 minutes, 32 seconds know the new capacities that come in would be uh 8:38 8 minutes, 38 seconds the new the new capacities that come in would be more efficient in terms of uh you know 8:47 8 minutes, 47 seconds the uh power usage uh which is the single largest cost for us. I think we are also building up more on-site 8:55 8 minutes, 55 seconds capacity which will come in uh which has a higher eida margin profile uh just in 9:02 9 minutes, 2 seconds terms of you know eida as a percentage of revenue. Uh and of course uh we do expect argan prices to normalize which 9:11 9 minutes, 11 seconds were uh you know last quarter was significantly hit due to the weakness uh 9:18 9 minutes, 18 seconds in the steel sector which uh led to a supply demand uh imbalance over the last 9:25 9 minutes, 25 seconds quarter. So yes we we do hold on to that uh 40% uh long-term aida margin uh profile. 9:35 9 minutes, 35 seconds Okay sir. And also sir if possible could you just share some color on the gas volumes across the key gases like oxygen, nitrogen and argon. 9:48 9 minutes, 48 seconds So we uh you know we are not um sort of reporting uh uh volumes on a gas-wise basis. 9:57 9 minutes, 57 seconds uh but you know uh it's safe to say that uh compared to on a on a year-on-year 10:04 10 minutes, 4 seconds basis of course there's been an improvement in the volumes uh however on a Q1 Q uh sorry on a sequential basis uh 10:15 10 minutes, 15 seconds there has been a very minor uh decline in the volumes uh and that's largely uh 10:22 10 minutes, 22 seconds again on account of the softness in the steel sector Okay. Thank you so much, sir. If I have any questions, I'll join back. Thank you. 10:32 10 minutes, 32 seconds Thank you. 10:34 10 minutes, 34 seconds Thank you. Uh the next question is from the chat. 10:39 10 minutes, 39 seconds Cold gas's growth is around 10% for 9 months versus your 20 to 25% tagger target. What exit revenue run rate is needed to stay on track? 10:50 10 minutes, 50 seconds So, I think here, you know, yeah, maybe I'll just take this one first. So uh you 10:56 10 minutes, 56 seconds know again our our uh 20 25% uh kagger is you know of course uh a long-term 11:05 11 minutes, 5 seconds kagger and you know this typically will the growth will tend to be a little bit lumpy in the sense that you know 11:13 11 minutes, 13 seconds whenever we bring in new capacity uh and you know that's where you'll see u the growth uh being pushed forward. 11:22 11 minutes, 22 seconds Currently we are at a high degree of capacity utilization and of course the fact that we've got a new capacity 11:31 11 minutes, 31 seconds that's come online uh we'll see um you know hopefully some impact on that uh 11:38 11 minutes, 38 seconds this quarter uh which would uh actually uh drive uh the revenue growth faster 11:45 11 minutes, 45 seconds than uh what what you've seen so far on a YTD basis. 11:55 11 minutes, 55 seconds Uh thank you. What is the current argan revenue mix percentage and argon margin this quarter? 12:06 12 minutes, 6 seconds So, so Argan uh this quarter is uh close to about 10% in terms of uh the revenue. 12:15 12 minutes, 15 seconds The margins have uh again we don't report margins on a per gas um basis 12:23 12 minutes, 23 seconds largely because the costs are kind of uh difficult to uh break up uh between each 12:32 12 minutes, 32 seconds gas because it's the same plant that produces oxygen, nitrogen and argon. Uh but you know safe to say that with the 12:39 12 minutes, 39 seconds argon prices declining uh in the last quarter uh you know the margin there has taken a hit. Um the 12:50 12 minutes, 50 seconds argon prices have declined uh in the last quarter by more than 25%. Uh you know again we don't we don't think this 12:58 12 minutes, 58 seconds is sustainable. Um we expect this to improve and our realizations of course 13:05 13 minutes, 5 seconds are always higher than uh sort of the average market price because of the contracts that we have because of the 13:13 13 minutes, 13 seconds fact that we also do a lot of value addition. We do lot of distribution um to the uh sort of end use customers etc. 13:24 13 minutes, 24 seconds So you know we we do expect these uh prices and um uh margins to improve 13:31 13 minutes, 31 seconds especially uh now given uh that the macro environment is improving the uh steel um scenario for the steel industry is also improving. 13:44 13 minutes, 44 seconds Thank you for that. uh for the 220 TPD merchant plan 160 crx uh say around 100 13:51 13 minutes, 51 seconds to 110 cr revenue potential how much revenue has started and what is the ramp up timeline 14:00 14 minutes so uh you know the the plant has uh been commissioned recently uh so I think it's 14:07 14 minutes, 7 seconds it's very early to comment on how much revenue has started but uh you know 14:13 14 minutes, 13 seconds typically uh we look at um uh kind of an 85% capacity utilization over a period 14:22 14 minutes, 22 seconds of uh 18 months uh from the date of uh startup um but uh you know as I said 14:29 14 minutes, 29 seconds it's very early to kind of give a revenue impact uh but uh what I can say 14:37 14 minutes, 37 seconds is that uh yes the the ramp up is uh proceeding uh well uh can't put a number 14:44 14 minutes, 44 seconds on Thank you. As a reminder, we request all participant to kindly raise your hand to ask a question. 14:58 14 minutes, 58 seconds Please raise your hand to ask a question. Uh the next question is for solar and speciality gases and western expansion. Can you share sign contracts 15:07 15 minutes, 7 seconds or committed volumes and expected revenue contribution timeline? 15:14 15 minutes, 14 seconds So um you know in terms of our expansion into west um you know we it's um in FY28 15:23 15 minutes, 23 seconds is what we are expecting um our uh plant along with um you know some high purity 15:32 15 minutes, 32 seconds and specialtity gases facility to come up uh that's targeted for FI28. 15:39 15 minutes, 39 seconds Of course uh at this stage we can't really share any signed contracts etc. 15:45 15 minutes, 45 seconds Uh however we are in discussions with uh a lot of uh companies uh especially in 15:53 15 minutes, 53 seconds the solar cell uh manufacturing space and uh you know we are seeing good traction a lot of positive interest uh 16:01 16 minutes, 1 second towards um our capacity that's coming up. 16:07 16 minutes, 7 seconds Thank you. uh is the EITA margins squeeze condition same for all peers Lindy Inogs other industry others in the 16:16 16 minutes, 16 seconds industry so look we can't obviously comment on their margins but the you know the 16:25 16 minutes, 25 seconds pricing is a reality I mean the the fact that the argon prices were down in Q3 16:32 16 minutes, 32 seconds uh you know assuming that they will also be subject to that uh pricing. Uh it 16:41 16 minutes, 41 seconds would be logical to expect that their margins would also um correct. But uh of 16:48 16 minutes, 48 seconds course uh you know uh we don't want to comment on uh uh their numbers specifically and what percentage revenue 16:58 16 minutes, 58 seconds uh and margin profile they have with Argon. 17:04 17 minutes, 4 seconds Uh thank you. The next question is from the live. 17:08 17 minutes, 8 seconds Prashant, please unmute yourself and go ahead. 17:23 17 minutes, 23 seconds Hello. Am I audible? Yes, you are. 17:28 17 minutes, 28 seconds Yeah. So my question is uh given that uh you know uh in the presentation you have mentioned that the gas I mean the total 17:38 17 minutes, 38 seconds market size is around 1.2 2 million uh tons of gases and uh if we work on the basis of the U capacity and the 87 86 17:47 17 minutes, 47 seconds 87% utilization our production is somewhere around 1 uh 1 lakh 5 to 1 lakh 10,000 tons which annualize gives around 17:55 17 minutes, 55 seconds 400,000 tons and a 33% cap market share is that correct 18:02 18 minutes, 2 seconds no I think there is some gap in the understanding uh prashant I think so you 18:08 18 minutes, 8 seconds know our our market share is in the sort of mid uh single digits. 18:17 18 minutes, 17 seconds Okay. So I mean uh then what is the uh total addressable market uh in terms of tonnage? 18:26 18 minutes, 26 seconds So uh you know if we look at it from a market size point of view uh which is probably the the better [clears throat] way to look at it in terms of the 18:35 18 minutes, 35 seconds revenue potential I think the the market uh available to uh kind of the gas 18:43 18 minutes, 43 seconds industry is uh you know when we had last uh done the 18:49 18 minutes, 49 seconds um uh the industry report was somewhere in the region of about 15,000 kes 18:56 18 minutes, 56 seconds and it was growing at about uh 10 uh odd percent on an annualized basis. 19:04 19 minutes, 4 seconds Okay, this is as per the industry report which was prepared uh and which is a part of our uh um IPO documents. 19:16 19 minutes, 16 seconds Fair enough. Uh so I mean uh out of this 15,000 crores, how much of the market are we addressing or competing in? 19:24 19 minutes, 24 seconds because uh we might we might not have product for the all the segments of the market. So what is market available for us to play with? 19:37 19 minutes, 37 seconds Um so look we are uh historically uh you know we've only been in um uh the 19:46 19 minutes, 46 seconds eastern and southern regions of the country. So that itself kind of puts puts us out of a large segment of the 19:54 19 minutes, 54 seconds market. In terms of gases of course who deliver the 20:02 20 minutes, 2 seconds sorry notic. 20:08 20 minutes, 8 seconds No. So this is broadly the um you know we have the uh products to cater to this 20:16 20 minutes, 16 seconds entire um segment because this is basically comprising of the basic industrial gases and not uh you know any 20:26 20 minutes, 26 seconds of um uh any of the sort of hydrocarbon gases etc. Right? So this is our uh you 20:34 20 minutes, 34 seconds can say the this is the core market for our industry. So product wise that is the market but 20:42 20 minutes, 42 seconds uh the um you know we we obviously in terms of geographic uh revenue uh revenue split 20:51 20 minutes, 51 seconds etc we are not covering a large part of the country. 20:59 20 minutes, 59 seconds Uh okay, understood. And uh uh since the current capacity capacity you 21:07 21 minutes, 7 seconds almost maxed out uh is there a I mean uh uh is there any way I mean we can do uh 21:14 21 minutes, 14 seconds uh increase the capacity or put up additional units at the existing locations or do we have to go for units only? 21:23 21 minutes, 23 seconds Yeah. So uh uh basically for uh our industry the uh it's very difficult to 21:32 21 minutes, 32 seconds uh increase the capacity of a an existing plant. So typically all the expansions are either green field 21:40 21 minutes, 40 seconds expansions at a new site or potentially you could do a green field expansion at an existing site. uh in our case for 21:49 21 minutes, 49 seconds example the recent uh plant which was commissioned uh is a green field plant 21:56 21 minutes, 56 seconds and it's at a site which is adjacent to one of our existing plants. So you know uh the typically the way to grow uh is 22:05 22 minutes, 5 seconds to add new capacity and uh that's that involves doing a project from scratch 22:15 22 minutes, 15 seconds and uh wherever we are having captive plants uh is possible to increase I mean capacity 22:24 22 minutes, 24 seconds there and use it for commercial or merchant purposes. 22:29 22 minutes, 29 seconds Uh it's possible at the time of building the plant. 22:33 22 minutes, 33 seconds Yeah. Yeah. It's possible at the time of building the plant once the plant is built and has started uh commenced 22:40 22 minutes, 40 seconds operations then it's uh not really possible. Uh so we do that typically and in couple of our on-site plants we have 22:50 22 minutes, 50 seconds set up um a plant of a capacity which is higher than what the pipeline customer 22:58 22 minutes, 58 seconds requires and uh the excess product then becomes available for us to sell externally. 23:06 23 minutes, 6 seconds Okay. Uh just to last one I mean uh in the presentation you have mentioned that uh uh the foreign players are the are 23:14 23 minutes, 14 seconds some of our biggest competitors. What would be their market share be like? 23:23 23 minutes, 23 seconds No, I I mean these uh I would say you know uh Lindai Inox and Air Products are 23:30 23 minutes, 30 seconds all uh larger than us. Um 23:32 23 minutes, 32 seconds [clears throat] 23:33 23 minutes, 33 seconds and of course uh uh significantly larger with with a size of maybe uh at least uh 23:41 23 minutes, 41 seconds you know some of them are five times our size. 23:48 23 minutes, 48 seconds So uh uh if we were to grow I mean we would have to take the market from 23:56 23 minutes, 56 seconds unorganized sector or we would have to from this uh 24:03 24 minutes, 3 seconds the growth will be driven by of course unorganized sector where we can take market from and also the fact that the 24:11 24 minutes, 11 seconds industry size itself is growing. So that's that's itself is the key driver for for growth. 24:22 24 minutes, 22 seconds Okay. Uh that's all from my side. I wish you all the best. Thank you. 24:28 24 minutes, 28 seconds Thank you. Uh the next question is from the line of Watsal Bandari. Watsal please unmute yourself and uh go ahead. 24:38 24 minutes, 38 seconds Good evening sir. Uh two questions from my end sir. So regarding the solar gases uh we understand that Lindai and Inox 24:46 24 minutes, 46 seconds have been supplying to most of the solar players today and most of these gases are either traded from China or and few 24:54 24 minutes, 54 seconds are made in India. What is our play over here and how do we plan to compete against the Lindes and Inox in this space where they have already won most of the contracts. 25:07 25 minutes, 7 seconds So I think they have won um a number of the legacy uh contracts which were uh 25:16 25 minutes, 16 seconds you know on the block. uh we have also won uh some contracts. Uh I think going 25:23 25 minutes, 23 seconds forward given that there is a huge uh potential uh in terms of the capacity 25:31 25 minutes, 31 seconds coming up in solar cell um I think uh it's fair to say that you know uh all of 25:40 25 minutes, 40 seconds us would get a piece of the pie. uh it's also fair to say that uh [clears throat] they they will probably get a larger 25:49 25 minutes, 49 seconds piece of the pie but you know given that there is a significant size differential 25:55 25 minutes, 55 seconds between us and them I think you know for us even if we get a smaller piece of the 26:01 26 minutes, 1 second pie we uh it's it still bodess well for our uh future growth uh and you know 26:10 26 minutes, 10 seconds importing these gases you're right most of them are imported from China. 26:15 26 minutes, 15 seconds You know the the difficult part is not importing the gases but handling them 26:21 26 minutes, 21 seconds once you bring them to your facility. uh because these typically need to be um 26:28 26 minutes, 28 seconds you know transferred into smaller containers etc before uh supplying to the customer and that's going to be a 26:36 26 minutes, 36 seconds part of our western region facility um you know and that's going to be integrated with a plant that produces 26:46 26 minutes, 46 seconds uh high purity oxygen and nitrogen uh along with um um uh kind of a warehouse 26:55 26 minutes, 55 seconds and bottling station for these specialtity gases as well. 27:01 27 minutes, 1 second So then last question, how does the capeex and margins look for the solar gases versus something like for the 27:08 27 minutes, 8 seconds merch for the regular merchant plants or the onsites? What kind of capeex and margins eida margins are there for this 27:16 27 minutes, 16 seconds business of this segment? See the the capeex is uh not very heavy here in terms of solar gases because you know we 27:24 27 minutes, 24 seconds are not really uh going to be manufacturing uh a lot of them right so it's it's mostly going to be traded and 27:32 27 minutes, 32 seconds you know we we need like a effectively just a debulking facility and again uh even in terms of margin 27:41 27 minutes, 41 seconds profiles you know for a for a traded product typically uh you know as the size of this 27:50 27 minutes, 50 seconds um uh the size of this solar industry uh keeps growing which it is uh at a very 27:57 27 minutes, 57 seconds rapid pace. Um you know the the margins would would become like your typical trading and uh service uh you know in 28:07 28 minutes, 7 seconds terms of last mile delivery that that sort of margin which would be you know in the teens. uh it's it's not going to 28:13 28 minutes, 13 seconds be uh you know as at par with the um uh 28:20 28 minutes, 20 seconds ASU gases because here we are doing the entire manufacturing uh process whereas there it's only a traded product. 28:31 28 minutes, 31 seconds Okay sir thank you. Thank you. Thank you. 28:37 28 minutes, 37 seconds Kindly raise your hand to ask a question. 28:42 28 minutes, 42 seconds The next question is from the line of u Ashish Parik. Ashish I have unmuted. Please unmute yourself and go ahead. 28:56 28 minutes, 56 seconds Ashish. 29:07 29 minutes, 7 seconds Uh we'll take the question from chat box. 29:10 29 minutes, 10 seconds Given the steel sector softness, how did your take or pay contracts perform relative to your merchant sales? Did any 29:19 29 minutes, 19 seconds on-site customers fail to lift their minimum committed volumes this quarter? 29:25 29 minutes, 25 seconds So, uh that's a good question. I think uh you know there has been a softness in 29:32 29 minutes, 32 seconds the volumes that they've lifted. Uh again uh it's important to note that you 29:39 29 minutes, 39 seconds know when we talk of our volumes uh we don't include the on-site volumes here because 29:48 29 minutes, 48 seconds these contracts are of a take or pay nature where we only recognize 29:55 29 minutes, 55 seconds uh the fixed monthly amount that they that the customer has to pay to us. However, the 30:04 30 minutes, 4 seconds reduction in their opt although it did translate into lower revenues uh it did 30:12 30 minutes, 12 seconds uh give us a kind of firsthand view in terms of the softness of that sector. Uh 30:19 30 minutes, 19 seconds but uh as I said it it doesn't impact our revenue. Uh that's the nature of the contract the way they are structured. 30:30 30 minutes, 30 seconds Thank you. Uh the next question is in the last call you mentioned significant inquiries from the solar 30:37 30 minutes, 37 seconds cell and semiconductor sectors. Have you converted uh any of those inquiries into firm contracts during Q3? And what is 30:46 30 minutes, 46 seconds the status of your supply chain setup for high purity glasses gases sorry so I think some of this we've covered uh 30:54 30 minutes, 54 seconds you know in terms of the supply chain setup for the high purity gases we we uh 31:01 31 minutes, 1 second we have the capability to manufacture the high purity air gases 31:07 31 minutes, 7 seconds uh within um you know locally within our facilities uh and some of the other gases which go 31:16 31 minutes, 16 seconds into uh the solar uh uh space uh would be imported. Um and uh you know we are 31:25 31 minutes, 25 seconds talking to uh a number of uh the solar uh guys. Uh we have signed up with a 31:32 31 minutes, 32 seconds couple of them. um on on the semiconductor side of course uh you know 31:39 31 minutes, 39 seconds uh we have not yet signed up with anyone but um that's still in a more nent stage 31:47 31 minutes, 47 seconds compared to the uh solar uh space and there we are as I said we've already signed up uh with a couple of uh 31:55 31 minutes, 55 seconds companies and we are actively working uh with several more and hope to conclude 32:02 32 minutes, 2 seconds uh a few more contracts uh in the coming quarters. 32:09 32 minutes, 9 seconds Thank you. The next question is from the line of Ashish. Um please unmute yourself, Ashish. 32:37 32 minutes, 37 seconds I think yeah I think the the question is more in terms of the um 32:44 32 minutes, 44 seconds the revenue and EIDA margins for Q4 and uh then for FY27. 32:51 32 minutes, 51 seconds So look, I think um I think it's important to um you know 32:59 32 minutes, 59 seconds understand that this is this business is pretty long-term in nature and it has a 33:06 33 minutes, 6 seconds lot of um you know the growth happens in not on a sort of consistent Q on Q basis 33:15 33 minutes, 15 seconds but rather it happens in sort of step changes as and when new capacities ities 33:21 33 minutes, 21 seconds are operationalized. So I think you know uh while of course we do understand that Q3 was disappointing but uh it doesn't 33:31 33 minutes, 31 seconds really change the long-term trajectory uh we are still uh you know working on a lot of projects we've you know 33:39 33 minutes, 39 seconds commissioned a project uh of late so you know directionally speaking we are going in the right direction in in terms of a 33:48 33 minutes, 48 seconds number I think the only thing which we can guide on uh is a long-term kagger rather than a uh you know a short-term 33:57 33 minutes, 57 seconds number. But having said that, of course, in terms of Q4, we do expect uh some 34:05 34 minutes, 5 seconds impact to come from the new capacity that we've commissioned. So, uh we do hope that uh Q4 would be uh much better than Q3. 34:18 34 minutes, 18 seconds Thank you. Uh the next question is on the East India on-site plant we noticed that the commissioning timeline had 34:25 34 minutes, 25 seconds moved to Q1 FI27 versus Q4 FI26 indication shared earlier. Could you help us understand if there were any 34:34 34 minutes, 34 seconds operational or external factors that led to this shift? 34:39 34 minutes, 39 seconds So I think um you know this is uh basically um uh delay of uh let's say 34:47 34 minutes, 47 seconds about a a couple of months um and you know uh one of the things that we uh you 34:55 34 minutes, 55 seconds know which I've uh mentioned in my previous uh investor calls as well is that you know I think the the key um 35:05 35 minutes, 5 seconds kind of risk is in terms of executing uh the projects in a timely manner uh 35:13 35 minutes, 13 seconds because largely because all of these typically tend to be green field projects and each one comes with its own 35:19 35 minutes, 19 seconds set of challenges. So you know I would say that uh you know a couple of months 35:26 35 minutes, 26 seconds um movement in the commissioning of a plant uh is 35:33 35 minutes, 33 seconds um you know I would say I won't call that abnormal uh here too I think uh you 35:40 35 minutes, 40 seconds know uh we are on track um in uh for Q1 of FY27 35:47 35 minutes, 47 seconds uh which which would mean a couple of months and For typically for a project which takes let's say u you know about 35:56 35 minutes, 56 seconds 15 odd months to uh commission um you know uh a month or two uh delay 36:04 36 minutes, 4 seconds can happen uh over the course of the construction of the project. 36:10 36 minutes, 10 seconds Thank you. Uh the next question is is the worst over? Why are margins down? Any recovery expected in margins? 36:20 36 minutes, 20 seconds Um so we do feel that the worst is over. 36:24 36 minutes, 24 seconds Uh I think that was kind of u captured in the u you know the opening comments 36:31 36 minutes, 31 seconds made by chairman. Um and I think also why the margins were down uh etc. All of 36:39 36 minutes, 39 seconds that was covered. Uh we don't expect this to sustain. I think our uh you know 36:46 36 minutes, 46 seconds longerterm uh EIDA margin targets are closer to 40% uh and um while the 36:55 36 minutes, 55 seconds previous quarter was in the low30s for the year year-to- date numbers uh we are at about 36%. 37:05 37 minutes, 5 seconds um as more capacity comes in which is uh you know of uh better I mean the newer 37:13 37 minutes, 13 seconds plants have better economics in terms of their power efficiency etc. Um we do expect uh margins to uh tick up. 37:26 37 minutes, 26 seconds Thank you. The next question is from the line of Shubam Toat. Shoubam please go ahead. 37:40 37 minutes, 40 seconds Can you please unmute yourself? Sure. Yeah. 37:44 37 minutes, 44 seconds Uh so um yeah, thank you for the opportunity. Uh sir, I am a little new to the company. Uh and I missed your 37:53 37 minutes, 53 seconds remarks on the capex plans of the company. So please briefly explain what are capex plans. uh what gases are we 38:01 38 minutes, 1 second trying to enter and what kind of potential uh do we see there? 38:08 38 minutes, 8 seconds So currently um you know we are uh talking of uh three projects uh which we 38:15 38 minutes, 15 seconds are uh undertaking. Um one uh one is a 38:22 38 minutes, 22 seconds um on-site plant uh in eastern India. Uh the second one is a merchant plant in 38:29 38 minutes, 29 seconds northern India and the third one is a merchant plant along with a um 38:37 38 minutes, 37 seconds um sort of a special gases unit uh is what we call it in uh western India. Um 38:45 38 minutes, 45 seconds all of these put together uh would entail uh you know capex over the next 38:51 38 minutes, 51 seconds couple of years uh to the tune of about uh 450 kores. 38:58 38 minutes, 58 seconds And in terms of gases um you know again our our core focus would continue to be 39:07 39 minutes, 7 seconds uh on you know the basic air gases which are oxygen, nitrogen, argon and of course we would like to increase our 39:15 39 minutes, 15 seconds portfolio to some of these specialtity gases which are used uh especially in the solar industry. 39:26 39 minutes, 26 seconds Okay. And just to follow up on that uh so when do we expect this plants to be commissioned and what kind of revenue potential is there? 39:36 39 minutes, 36 seconds So um uh the first plant which uh which is an on-site plant in eastern India we expect 39:45 39 minutes, 45 seconds this uh to be online in Q1 of uh the next financial year. The uh merchant 39:53 39 minutes, 53 seconds plant in north India we expect in the second half of next financial year and the uh plant in the west along with the 40:02 40 minutes, 2 seconds specialtity gases we are uh targeting FY28. 40:09 40 minutes, 9 seconds Um given um that these three plants would sort of come in a staggered manner. uh you know 40:19 40 minutes, 19 seconds uh while we don't want to comment on revenue from uh at a individual plant level because that's not something that 40:27 40 minutes, 27 seconds we report but you know on a uh longer term basis we have um 40:35 40 minutes, 35 seconds uh about um a 20 to 25% kind of a uh growth rate that uh we expect uh which 40:44 40 minutes, 44 seconds of course will be lumpy but given the type of capex and the uh growth plans that we have that's what we are guiding. 40:56 40 minutes, 56 seconds Okay, that's it from my side. Thank you. 41:01 41 minutes, 1 second Thank you. The next next question is uh you recently commissioned the area 2 merchant plant. Given the current soft 41:08 41 minutes, 8 seconds demand environment in East India, how is the capacity utilization ramp up progressing in this new unit? 41:16 41 minutes, 16 seconds So look we it's still very early days but uh you know I can tell you that it's 41:22 41 minutes, 22 seconds uh things are uh moving well. uh we would expect to while while we are 41:30 41 minutes, 30 seconds talking of an 18month uh ramp up for to get to an 85% capacity 41:38 41 minutes, 38 seconds utilization here. Uh you know we've done because this is a market that we are already present in and we have very 41:45 41 minutes, 45 seconds strong um relations with u a lot of the large buyers. 41:52 41 minutes, 52 seconds uh we would expect to ramp up this production uh little bit faster than that. 42:03 42 minutes, 3 seconds Thank you. The next question is if we then commission north Indian capacity by H27 and it takes 18 months to commission 42:11 42 minutes, 11 seconds each of such plans has the construction already begun. 42:16 42 minutes, 16 seconds So uh yes and no in the sense that we've ordered the plant uh the so typically 42:22 42 minutes, 22 seconds for our industry the uh the longest lead time for or the sort 42:30 42 minutes, 30 seconds of the the real challenge is not in terms of the construction but uh it's more in terms of uh the delivery of the equipment and that takes quite a while. 42:41 42 minutes, 41 seconds So I think the the important thing is that we have uh um ordered the plants um and uh you know 42:52 42 minutes, 52 seconds uh as and when the uh equipment is ready for shipment the construction uh the 42:59 42 minutes, 59 seconds civil work etc would be done uh in order to receive it. 43:06 43 minutes, 6 seconds Thank you. Can you please provide YOLO guidance uh for FI27 revenue and EITA margins? 43:15 43 minutes, 15 seconds So you know again we are we are not uh giving annual guidance but rather a 43:22 43 minutes, 22 seconds longerterm guidance. Um in our industry as I said it's uh you know it's a uh very much of a long-term uh kind of a 43:31 43 minutes, 31 seconds play. uh all our contracts are also long-term and the way to look at it is 43:38 43 minutes, 38 seconds um on a sort of a longerterm growth trajectory than a quarteronquarter 43:45 43 minutes, 45 seconds uh kind of a basis. Having said that, of course, [clears throat] you know, because we've got new capacity coming 43:52 43 minutes, 52 seconds in, I think it's very safe to say that there will be an improvement in terms of 43:59 43 minutes, 59 seconds the uh revenue, right? because we've got one plant which has started now which is going to be um you know giving 44:08 44 minutes, 8 seconds [clears throat] 44:09 44 minutes, 9 seconds uh entire the the entire next FY will have some impact from that and uh the 44:16 44 minutes, 16 seconds other plant which is starting at the beginning of the next financial year where also majority of the financial year would get a positive impact from 44:25 44 minutes, 25 seconds that. So, you know, I think it's only logical to say that there will be a growth. Uh, as I said, we are not 44:32 44 minutes, 32 seconds guiding on a quarterly or an annual growth, but rather on a long-term growth. 44:41 44 minutes, 41 seconds Thank you. 44:43 44 minutes, 43 seconds Just to confirm, uh, the commission timeline for North India is H2 FI27 or H2 CY27. 44:51 44 minutes, 51 seconds Also, who do we procure cryogenic equipment from? Do we source it from China or indigenous players like Inox, CVA? 45:01 45 minutes, 1 second So, uh it's uh the commissioning timeline is uh H2 FY27. 45:09 45 minutes, 9 seconds Um and uh in terms of the cryogenic equipment uh we so it depends on the 45:18 45 minutes, 18 seconds equipment. Uh there are certain equipment that we buy domestically uh including storage tanks uh and 45:26 45 minutes, 26 seconds certain equipment that we source uh internationally. Um but yes we we do source from indigenous players uh 45:35 45 minutes, 35 seconds without specifi specifying a particular name. We do source from indigenous players as well. 45:44 45 minutes, 44 seconds Thank you. Kindly raise your hand to ask a question. 46:05 46 minutes, 5 seconds Please raise your hand or put your question in chat. 46:11 46 minutes, 11 seconds Since there are no further questions, uh I would like to thank you once again for your time and 46:20 46 minutes, 20 seconds participation on just one second I think one question has come 46:30 46 minutes, 30 seconds on behalf of Ellenbury Industrial Gases this concludes today's conference for any questions please feel free to write us on the email ids mentioned on the 46:38 46 minutes, 38 seconds invite we appreciate your engagement you may now disconnect your lines