Fairchem Organics Limited — Q3 FY26

Fairchem Organics Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=2AZZ5nSToT0 Published: 3 months ago

0:00 Ladies and gentlemen, good day and welcome to the Q3 and 9 months FI26 conference call of Fair Cam Organics 0:07 7 seconds Limited. As a reminder, all participant lines will be in the listen mode and there will be an opportunity for you to ask questions after the presentation concludes. 0:18 18 seconds Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. I now hand the 0:26 26 seconds conference over to Miss Purwangi Jan from Valerm Advisers. Thank you and over to you ma'am. 0:33 33 seconds Good afternoon everyone and a warm welcome to you all. My name is Purwangi Jen from Valerim Advisers. We represent the investor relations of Faircam 0:41 41 seconds Organics Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the third quarter and 9 months of the financial year 2026. 0:53 53 seconds Before we begin, a quick cautionary statement. Some of the statements made in today's con may be forward-looking in nature. Such forward-looking statements 1:02 1 minute, 2 seconds are subject to risk and uncertaintities which could cause actual results to differ from those anticipated. 1:09 1 minute, 9 seconds Such statements are based on management's belief as well as assumptions made by and information currently available to the management. 1:17 1 minute, 17 seconds Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decision. 1:24 1 minute, 24 seconds The purpose of today's earnings conference call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. 1:34 1 minute, 34 seconds I would now like to introduce you to the management participating with us in today's call. We have with us Mr. Nahush 1:41 1 minute, 41 seconds Zari, managing director and chairman and Mr. Mr. Bhavesh Sha, Chief Financial Officer. Without any delay, I would now 1:50 1 minute, 50 seconds like to ask Mr. Bhavesha to begin with his opening remarks. Thank you and over to you, sir. 1:56 1 minute, 56 seconds Uh thanks uh Mr. Purwangi and good afternoon everyone. Uh welcome to our uh earning call for uh Q3 and 9 month ended 2:05 2 minutes, 5 seconds financial year 2026. Uh for the quarter under review, the revenue for the operation for the quarter stood at 2:13 2 minutes, 13 seconds rupees 100 crores reflecting a 12% year-on-year decline. IITA for the quarter was rupees 4 cr with aa margin 2:21 2 minutes, 21 seconds of 4.2%. The adjusted net profit after tax uh for the quarter without considering the exceptional item stood 2:28 2 minutes, 28 seconds at uh around uh 60 lakhs uh translating a pat margin of 6%. uh we have 2:36 2 minutes, 36 seconds recognized rupees 80 88 lakhs as exceptional item uh due to implementation of new labor code uh for 2:43 2 minutes, 43 seconds the 9 month ended FI26 the revenue from operation stood at 343 crores a decline of 18% IITA for the period was 14 crores 2:53 2 minutes, 53 seconds reflecting a decline of 65% with IITA margin of 7 uh ITA margin of 3.97% the 3:00 3 minutes net profit after tax uh before exceptional item stood at 2.5 5 crores with a beta margin of with a PAT margin 3:08 3 minutes, 8 seconds of 73%. The domestic sale contributed 91% of the total revenue. Uh with that 3:16 3 minutes, 16 seconds uh I would like to hand over uh uh to Mr. uh Nao Jeriala, managing director for key operational highlight and strategic initiatives. 3:27 3 minutes, 27 seconds Thank you Bes. Good afternoon everyone. 3:31 3 minutes, 31 seconds The third quarter was a challenging one for the company marked by multiple external headwinds across demand pricing 3:39 3 minutes, 39 seconds and grow global trade dynamics. During the quarter overall performance was affected primarily by lower uptake from 3:47 3 minutes, 47 seconds the pain segment and this continuation of exports of our key products to US markets which weighed on volumes and realization. 3:58 3 minutes, 58 seconds profitability during the period was impacted by elevated raw material prices and availability of lower price imports 4:06 4 minutes, 6 seconds uh especially from China which limited our ability to fully pass on the cost increase to customers. The paint sector 4:14 4 minutes, 14 seconds witnessed lower material uptake during the quarter which appears to be linked to market share disruptions following of entry of new players. 4:25 4 minutes, 25 seconds Raw material prices remained elevated due to higher custom duty levels currently at around 16.5% 4:32 4 minutes, 32 seconds for our raw materials. Uh and margins on our dimer acid segment continued to 4:40 4 minutes, 40 seconds remain under pressure impacted by aggressive pricing from Chinese suppliers. We and the unchanged 7.5% 4:48 4 minutes, 48 seconds import duty which constrained our pricing flexibility. 4:53 4 minutes, 53 seconds uh demand conditions were further affected by uncertainty around US trace policies which impacted our export 5:00 5 minutes viability during the quarter and added pressure on overall product mix. Despite the near-term challenges, we remain 5:08 5 minutes, 8 seconds cautiously optimistic about the outlook at the recent announcement of level playing field uh tariff structure in US 5:16 5 minutes, 16 seconds along with progress towards proposed free trade agreement with UK uh EU provides improved visibility for our 5:26 5 minutes, 26 seconds export recovery. As you are aware that our isoseric business which is more 5:32 5 minutes, 32 seconds export oriented uh business and so this trade agreements I'm sure are going to uh help us a long way. 5:42 5 minutes, 42 seconds I mean to recall and whole proverb when things going uh when going gets tough the toughs get going. We at fair cam 5:50 5 minutes, 50 seconds have taken uh up this uh uh thought process very positively and we have 5:57 5 minutes, 57 seconds started working on multiple areas uh right from energy saving uh in uh by undertaking indepth detailed energy 6:06 6 minutes, 6 seconds audit by uh undertaking trials utilizing uh catalyst uh which can help us uh in 6:13 6 minutes, 13 seconds reducing our uh catalyst cost by replacing the imported catalyst with 6:20 6 minutes, 20 seconds domestic ones. At the same time, how developing newer products from the current set of uh products which can 6:29 6 minutes, 29 seconds find application in uh different uh areas. Uh so multiple things uh we have started working and I'm sure uh that in 6:38 6 minutes, 38 seconds long term all this is going to help our company uh to uh come back to good old days. 6:46 6 minutes, 46 seconds Now I with that I open the floor for question and answer session. 6:57 6 minutes, 57 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press 7:05 7 minutes, 5 seconds star and one on their touchtone telephone. 7:09 7 minutes, 9 seconds If you wish to withdraw yourself from the question queue you may press star and two. Participants are requested to use handset while asking a question. 7:19 7 minutes, 19 seconds Ladies and gentlemen, we will wait for a moment while the question queue assembles. 7:32 7 minutes, 32 seconds The first question comes from the line of Yash Nayak with Kamakia Wealth Management. Please go ahead. 7:38 7 minutes, 38 seconds Yeah. Am I audible? Yes. Yeah. Thank you for taking my question. 7:45 7 minutes, 45 seconds So sir, first question is regarding the by which quarter do we expect the volume to return to the normal rate and the 7:52 7 minutes, 52 seconds margin to become normalized. So any timeline on the we can able to see the recovery from the let's say the next quarter or maybe the next year any 8:01 8 minutes, 1 second comment on uh the way things are uh going with uh 8:08 8 minutes, 8 seconds the changes in uh tariff structure in US and signing of uh trade uh agreements we are fairly confident that uh the worst 8:17 8 minutes, 17 seconds quarter uh is behind us and now every quarter we'll see uh volume and value 8:24 8 minutes, 24 seconds growth happening the way I mean the outlook looks uh very promising. 8:31 8 minutes, 31 seconds So can we expect a double margin a bit in FI27 or 8:39 8 minutes, 39 seconds uh we'll obviously we'll be improving we will be seeing seeing uh good numbers from uh shortly 8:46 8 minutes, 46 seconds from H2 FI27 and see once the volume see 8:55 8 minutes, 55 seconds once the volume growth happens volume and value growth happens automatically the IBITA margins are going to go 9:02 9 minutes, 2 seconds So sir as you mentioned we can able to see a good number from S2 FI27 right? 9:08 9 minutes, 8 seconds Yes, sure. Okay. It will gradually improve and in H2 FI27 we should be seeing a better numbers 9:16 9 minutes, 16 seconds and s now since the there is a trade deal with the US as well. So can we see the uptake in the isoic how will you see the isoactly? 9:25 9 minutes, 25 seconds Yes, exactly. Exactly. Because see since last uh 6 8 months nothing was happening on that front. In fact to the extent 9:34 9 minutes, 34 seconds that no sampler sample approvals work was also not being taken up by the US 9:41 9 minutes, 41 seconds customers. Uh so now with this happening already uh people have started we have started receiving mail for the same and 9:49 9 minutes, 49 seconds we have started working on it. So we are pretty confident that in next 6 months things should be uh back on track. 9:58 9 minutes, 58 seconds Okay. Yeah. That's it from my if I have anything I will join directly. Thank you so much. Thank you. 10:07 10 minutes, 7 seconds Thank you ladies and gentlemen. If you wish to ask a question to the management you may press star and one. 10:15 10 minutes, 15 seconds The next question comes from the line of Madur Rati with Counter Cyclical Investments. Please go ahead. 10:23 10 minutes, 23 seconds Sir, thank you for the opportunity. Sir, I wanted to understand uh uh regarding the Chinese uh uh reduction and rebates 10:32 10 minutes, 32 seconds of these chemically modified fats and oils. So can we expect that to help us improve our realizations going forward? 10:41 10 minutes, 41 seconds Three to be frank like you we have also heard that from 1st of April China uh on 10:48 10 minutes, 48 seconds 700 chemical products China is going to remove export incentives and uh when but 10:56 10 minutes, 56 seconds at the same time we don't know whether uh uh they haven't given out the names of the products uh on which uh they the 11:06 11 minutes, 6 seconds reduction I mean the subsidy is going to be removed if uh dimemer falls under that then automatically 11:13 11 minutes, 13 seconds we'll see a 12 or 13% uh uh price hike coming from the Chinese players. 11:21 11 minutes, 21 seconds So that would help us. Yeah, that would help us a lot because automatically then our sales price would go up by that percentage. 11:33 11 minutes, 33 seconds And sir, would it be fair to assume that whatever sales price uh that additional sales price would majority of that would flow to our AETA? 11:41 11 minutes, 41 seconds Yes, obviously. 11:43 11 minutes, 43 seconds Right. Uh sir, I wanted to understand regarding u this US and EU FTA. Sir, what is the risk of these uh isoteric 11:52 11 minutes, 52 seconds acid or the value added product that they are currently manufacturing getting imported to India due to this FTA? So if you could just help us understand on 12:00 12 minutes that and how does our cost of production compare? 12:04 12 minutes, 4 seconds No the products what we are manufacturing in that there is no possibility of uh uh any material coming 12:12 12 minutes, 12 seconds from US to India uh because in US there are for as for example DRE no one is manufacturing dimer fatty acid in US at 12:19 12 minutes, 19 seconds the same time for isosteric acid no one is manufacturing isosteric acid in US so I mean it's not going to be a problem 12:28 12 minutes, 28 seconds for us not for but with EU as well Is that the case? 12:35 12 minutes, 35 seconds In fact, we are selling our isosteric acid to EU. So, it doesn't make any difference to us. India is not a market. 12:42 12 minutes, 42 seconds Yeah. And for isosteric acid, India is India doesn't it's a very very small market. Major market is Europe and US. 12:52 12 minutes, 52 seconds So, I mean, how does Sorry, please go ahead. 12:58 12 minutes, 58 seconds No, so it doesn't make any difference to us. It's not going to ne negatively impact it in any way for us. 13:06 13 minutes, 6 seconds Right. Right. And sir, how does our cost of production compare for isosteric acid versus these uh European manufacturers? 13:14 13 minutes, 14 seconds Yeah, obviously obviously we are fairly competitive because the cost structure is compared to those companies is much lower. 13:23 13 minutes, 23 seconds Sir, would it be lower by 20 30% or even further? 13:27 13 minutes, 27 seconds No, that is a percentage wise it would be very tough. 13:31 13 minutes, 31 seconds for us to spell out because I mean that uh that type of analysis is not going to be possible because all these companies 13:39 13 minutes, 39 seconds manufacture multiple products so how they divide their cost structure it won't be possible for us to know right 13:46 13 minutes, 46 seconds yeah one thing is sure that we have done uh this uh ex this capacity addition at a fraction of cost compared to what it 13:55 13 minutes, 55 seconds would have happened in developed nations got it And sir just a final question sir if you could just help us understand on 14:03 14 minutes, 3 seconds the animal feed product that we were expected to launch uh in Q3 and sir the new product that we were expecting to 14:12 14 minutes, 12 seconds launch in Q4 or Q1 animal feed plant is ready it's the plant is ready and for which uh we have 14:20 14 minutes, 20 seconds already applied for the GMP certifications once the GMP certificate comes uh we'll start uh the plant so 14:29 14 minutes, 29 seconds everything is ready as regards that plant and the new product uh equipment 14:35 14 minutes, 35 seconds also uh I mean we expect it to go in uh uh production by uh third quarter for sure. 14:46 14 minutes, 46 seconds So what kind of capacity are we uh adding on this uh product? You know it's initially we are doing a very small cap 14:54 14 minutes, 54 seconds small capacity once we are absolutely uh satisfied uh with the quality and uh 15:01 15 minutes, 1 second once we receive the approvers from our uh buyers uh we'll go in for major 15:08 15 minutes, 8 seconds capacity expansion the thing I mean this is something what we have learned based on our experience with our isosteric 15:16 15 minutes, 16 seconds acid because in that product new product also So we are going to be third or fourth company in the world and 15:24 15 minutes, 24 seconds so getting approvals from uh the buyers we have realized that it is taking more than two to three years and so it 15:32 15 minutes, 32 seconds doesn't make any sense initially to create a huge capacity. It it's better to create a small capacity at a lower 15:38 15 minutes, 38 seconds capex get the approvals and then go for uh expansion. 15:43 15 minutes, 43 seconds Got it. So so this animal feed uh capex I understand that they'll do it. So will this be uh will the raw material for the 15:52 15 minutes, 52 seconds animal feed be supplied from our oil refine uh the waste oil refining capacity that we have? 15:59 15 minutes, 59 seconds Yes. Yes. Yes. It's a forward integration. It's a forward integration. 16:05 16 minutes, 5 seconds Got it. Uh and what what kind of margin profile can we expect from this product? 16:10 16 minutes, 10 seconds Obviously it will be anything for forward integration. the margins would be better but 16:16 16 minutes, 16 seconds okay uh so and the uh other product that we are planning to launch uh then no I won't be able to share the 16:25 16 minutes, 25 seconds name of the product right now but we'll launch the product we'll let you know right and also we also mentioned a few 16:33 16 minutes, 33 seconds quarters ago that we were trying some different raw material to uh avoid this import duty differential versus our the 16:41 16 minutes, 41 seconds import duty versus Yeah. Yeah. Work is going on for that. 16:45 16 minutes, 45 seconds Work is going on for that. So, so when can we expect some material impact from the sir? Maybe second or third quarter. 16:54 16 minutes, 54 seconds Maybe second or third quarter. 16:57 16 minutes, 57 seconds Okay sir. Sir, thank you so much and all the best. Thank you. 17:06 17 minutes, 6 seconds Thank you. 17:07 17 minutes, 7 seconds The next question comes from the line of Polaria with Gir Capital. Please go ahead. 17:13 17 minutes, 13 seconds Yeah, thanks for the opportunity. Sir, you used to give the uh this volume throughput. Uh can you give it for this quarter please? 17:22 17 minutes, 22 seconds Yeah, it was 9,850 tons. 17:25 17 minutes, 25 seconds Okay. Uh another on uh dimemer acid. Uh are we making uh profits on the this product? 17:35 17 minutes, 35 seconds So at at this stage it is I mean we are just keeping our heads out of water. Yeah it's marginal. It's very marginal. 17:42 17 minutes, 42 seconds Okay. It's very marginal. Okay. And uh sir this animal seed I understand uh it will reduce the dependence on lionic 17:51 17 minutes, 51 seconds acid as it's a forward integration. Uh how much lionic acid will convert into this animal feed product? 17:57 17 minutes, 57 seconds No no no no. It's a forward integration of our palmetic acid stream. I this is 18:04 18 minutes, 4 seconds from palmetic acid. Okay. Uh and uh uh this new product what you are 18:11 18 minutes, 11 seconds talking about that will come from the uh that capacity which we have uh reserved for the new products right? Yes. Yes. 18:19 18 minutes, 19 seconds Yes. Okay. Yeah. That's all from my side. Thank you very much. Thank you. 18:27 18 minutes, 27 seconds The next question comes from the line of dish with eternal capital. Please go ahead. 18:34 18 minutes, 34 seconds Yeah. Hi. Uh thank you so much for the opportunity sir. Uh I just wanted to ask you uh looking ahead uh so let's say for 18:41 18 minutes, 41 seconds for 27 uh how can we expect better uh revenue growth and uh profitability like what are the drivers that will take the company over there. 18:51 18 minutes, 51 seconds one is our we'll be able to open with the uh signing of the treaty with US the 18:58 18 minutes, 58 seconds US market would open up for the isosteric acid and dimer fatty acid that is one thing and second thing is uh we 19:05 19 minutes, 5 seconds expect the export incentive to go uh 13% exports incentive what Chinese dimemer 19:13 19 minutes, 13 seconds players are getting uh would go away so in turn they'll have to increase the price and so our price realization on 19:20 19 minutes, 20 seconds dimer fatty it would also go up in which case we can ramp up our production also. 19:25 19 minutes, 25 seconds So it's going to be a combined effect of everything. 19:29 19 minutes, 29 seconds Right sir? Uh very well mentioned about the US. So my second question was upon that only. So what is the level of like 19:36 19 minutes, 36 seconds you know revenue split that you're expecting in the next 12 months from US and Europe and if the trade deals do actually come into 19:46 19 minutes, 46 seconds obviously our our target is to uh go much much uh I mean from 9% we want to go up as high as 50% on exports. 19:57 19 minutes, 57 seconds So I mean that's obviously we are working on uh uh that right sir and I s I just wanted to 20:05 20 minutes, 5 seconds understand what is the on ground uh demand for the pain segment uh right in these months like January and at least the first week of February how is it 20:13 20 minutes, 13 seconds going and any signs of uh recovery of that no we are we don't see any major upswing 20:21 20 minutes, 21 seconds but at the same time there is no downslide so I mean it's above average I would say above average 20:29 20 minutes, 29 seconds understood. Okay, so that's it. I said uh thank you so much. That gives me a lot of clarity. 20:38 20 minutes, 38 seconds Thank you. 20:41 20 minutes, 41 seconds Before we take the next question, we would like to remind participants that you may press star and one to ask a question. 20:49 20 minutes, 49 seconds The next question comes from the line of madrati with counter cyclical investments. Please go ahead. 20:56 20 minutes, 56 seconds So now with India US uh trade deal if so we have allowed zero duty import of soya 21:04 21 minutes, 4 seconds bean oil which is our raw material. So, so can we import uh soya oil uh from US, 21:13 21 minutes, 13 seconds give it to our refinary partners and take the byproduct from them and then export our end product dutyfree to the 21:22 21 minutes, 22 seconds US. I mean dutyree means just a second just a second uh for every 21:28 21 minutes, 28 seconds uh 100 kg of soya bean oil 1% of our raw material is getting generated. 21:36 21 minutes, 36 seconds So I don't can I as a company we cannot take risk of one to buy to get 1% 21:42 21 minutes, 42 seconds material take a risk of 99% of vegetable oil which is a commodity where prices go 21:48 21 minutes, 48 seconds up and down every moment. So that is something uh we won't uh double ourself. 21:56 21 minutes, 56 seconds It's not our core competency. Uh trading in commodity is not our core competency. 22:02 22 minutes, 2 seconds We'll prefer to buy uh the waste uh what the refinery from the refineries who will be importing vegetable oils uh from 22:11 22 minutes, 11 seconds uh US or Brazil or Argentina wherever. 22:16 22 minutes, 16 seconds But the the our vendors from whom we are buying the byproducts if they import 22:24 22 minutes, 24 seconds directly from us soya bean oil and then do the edible oil refining and sell the product in domestic market and we buy 22:32 22 minutes, 32 seconds the byproduct from them and sell the end product to US. Uh can't we claim set off of 18% uh import duty in US? 22:42 22 minutes, 42 seconds No, I don't think so. 22:44 22 minutes, 44 seconds Uh okay. I think the price the overall price uh uh would become favorable with this. If if this this trade uh actually 22:53 22 minutes, 53 seconds comes up see more of soya bean oil starts coming the raw material prices would come down. 22:59 22 minutes, 59 seconds So we will be benefited uh to that extent we'll be benefited. 23:04 23 minutes, 4 seconds But have not edible oil prices over the past two years have already come down. If you 23:12 23 minutes, 12 seconds look at the numbers of listed edible oil companies, their revenues and all have fallen because of the price deflation. 23:20 23 minutes, 20 seconds So I mean but despite that no again now they have gone up also in last two months. In last two months they have as high as 25%. 23:31 23 minutes, 31 seconds Sir, but during whole of F2, FR24 and FR25 and till now FR26 for at least the first 23:40 23 minutes, 40 seconds half uh when the even when the prices were going down of uh the edible oil prices, it did not show in our numbers. 23:48 23 minutes, 48 seconds I mean we were still getting hit for the same reason when the edible oil prices time and again we are saying one thing 23:56 23 minutes, 56 seconds the raw materials that is vegetable oils in India are getting imported at 16.5% 24:04 24 minutes, 4 seconds import duty by paying 16.5% import duty and based on that our raw 24:11 24 minutes, 11 seconds material is also priced accordingly and against that if you import dimer fatty acid it is carrying import duty of 7.5%. 24:21 24 minutes, 21 seconds So effectively we are uh sufferers because the raw material is having higher import duty but the 24:30 24 minutes, 30 seconds finished product is having lower import duty. So that is getting uh affected that is really the crux and second thing 24:38 24 minutes, 38 seconds is on China is giving exports incentive to dmer manufacturers there and so they 24:45 24 minutes, 45 seconds are in turn are doing dumping. So our problem is that raw material is coming at a higher price and finished product 24:54 24 minutes, 54 seconds is coming at a lower price. In addition there is a dumping coming from happening from China. So that's the reason the dimemer 25:02 25 minutes, 2 seconds is not making that much money what it should right sir and sir if we compare our FY22 25:10 25 minutes, 10 seconds numbers when we did roughly 650 K revenue versus now we are doing roughly 450 K revenue in the past 12 months. So 25:18 25 minutes, 18 seconds basically this roughly 200 K uh reduction that has happened in the top line it has basically the realizations 25:27 25 minutes, 27 seconds have gone down or the volumes also have gone down both combined effect. Yeah because the 25:34 25 minutes, 34 seconds margins were very less we were also cautious in uh accepting uh the orders. 25:41 25 minutes, 41 seconds Sir, so uh now that you are so firstly if uh what is the maximum volume I mean 25:49 25 minutes, 49 seconds like what is the like you said that 9800 ton was the volume in the third quarter so what is the maximum volume provided 25:57 25 minutes, 57 seconds spreads are good what is the maximum volume that we can do in one quarter if we operated full double double then what we did double 26:05 26 minutes, 5 seconds okay so okay okay okay so basically we can do roughly 900 K revenue knew just on these current realizations. 26:14 26 minutes, 14 seconds Yes, obviously. Yes, obviously. 26:16 26 minutes, 16 seconds Okay. And sir, how much have the prices gone down broadly percentage wise from FR22 levels from peak level till uh today? 26:27 26 minutes, 27 seconds 10 to 15%, you 10%, 15%. 26:31 26 minutes, 31 seconds Sir, so basically sir now uh now that with every passing quarter you are expecting growth in volume and margins 26:39 26 minutes, 39 seconds both sir it is only due to the trade deal with US and Europe or is there any additional factor also 26:47 26 minutes, 47 seconds in share it's a going to be a combined effect because we'll be with the trade deal happening 26:56 26 minutes, 56 seconds with us we'll be able to export our dimemer fatty acid That is uh one big thing which is going 27:03 27 minutes, 3 seconds to happen and which is going to help us uh increase our volumes. Second thing is uh we'll be able to export more of 27:12 27 minutes, 12 seconds isosteric acid which will again help us uh generate better realization. So it's 27:19 27 minutes, 19 seconds going to be a combined effect. That's uh that's the reason we are saying that if things everything settles down well I 27:27 27 minutes, 27 seconds mean uh we'll be back to good old days to interrupt. 27:34 27 minutes, 34 seconds Yes sure I'll join the queue. Yeah thank you. 27:38 27 minutes, 38 seconds Yeah thank you ladies and gentlemen if you wish to ask a question please press star N1. 27:46 27 minutes, 46 seconds The next question comes from the line of Aman Singh an individual investor. Please go ahead. 27:54 27 minutes, 54 seconds Um hi sir good uh just wanted to ask key like uh how the neutraical products like tools and steroids performing compared to the candles during the slowdown. 28:06 28 minutes, 6 seconds I mean tool business uh basically all 100% of our materials getting exported 28:13 28 minutes, 13 seconds to us. So it is uh uh since two quarters the business has been zero. 28:20 28 minutes, 20 seconds Okay sir. So with the like the reciprocal tri with the reduction in the recipro uh can we see any increase from that segment going forward? 28:28 28 minutes, 28 seconds We'll have to again revive the whole thing. Okay sir. 28:33 28 minutes, 33 seconds Because already the US buyers would have switched on to other suppliers. 28:40 28 minutes, 40 seconds Okay sir. And my one more question is key what was this like rational behind the back uh given there are the the 28:48 28 minutes, 48 seconds current pressure and the margins and the cash flows. 28:51 28 minutes, 51 seconds No there is no pressure in cash flow uh uh in fact uh uh the complete uh volume 28:58 28 minutes, 58 seconds increase which is going to happen in next 2 years uh is going to come from the current uh capacity only since our 29:06 29 minutes, 6 seconds capacity utilization is close to around 55%. 29:10 29 minutes, 10 seconds We don't expect any further capex to happen. So this was one way to increase the promoter's holding in the company. 29:18 29 minutes, 18 seconds Okay. Okay sir. Okay sir. Understood. Thanks for the opportunity. Thank you. 29:27 29 minutes, 27 seconds Thank you. Participants who wish to ask a question to the management may press star and one. No. 29:45 29 minutes, 45 seconds The next question comes from the line of Madurati with counter cyclical investments. Please go ahead. 29:52 29 minutes, 52 seconds Sir, so earlier we had given a guidance of 1,000 K topline with 23% AITA margin which we had subsequently withdrawn. So, 30:01 30 minutes, 1 second so now with the trade deal is that uh guidance can we expect for FIR 27 or 28 30:08 30 minutes, 8 seconds in your best judgment as things stand when can shareholders I mean I mean it's not advisable to give 30:16 30 minutes, 16 seconds any uh forward-looking statements we never do exactly in figure terms what we say is we'll be back to good old days 30:24 30 minutes, 24 seconds that's the most I can say right sir and sir the on the trade Right sir, we got a good deal. Now sir, what 30:33 30 minutes, 33 seconds has to happen? What should shareholders track for which can be the next trigger for us? I mean one is the reduction in 30:40 30 minutes, 40 seconds the import duty on edible oil is one thing uh that we'll keep an eye. What else sir are the main uh variables that 30:50 30 minutes, 50 seconds can basically change our fortunes for the better? 30:53 30 minutes, 53 seconds I mean uh now no it's everything is uh more importantly if the raw material 31:00 31 minutes prices come down that is based on the uh duties what are going to be on the crude 31:07 31 minutes, 7 seconds oils which which you said you'll be tracking so that is the one main thing second thing is uh automatically for re 31:16 31 minutes, 16 seconds I mean we get raw materials a reasonable price and China removes the export put incentive automatically uh the 31:25 31 minutes, 25 seconds realization for us would go up in dimer and we'll uh start manufacturing more and more it's not that we don't have 31:32 31 minutes, 32 seconds customers India doesn't have a market and we don't have manufacturing capability no everything is there in 31:39 31 minutes, 39 seconds place it's because the margins are not there though it didn't make any sense for us to uh just go for volume and uh 31:47 31 minutes, 47 seconds make uh make no profit or losses Yes sir. And regarding the paint sector sir 31:55 31 minutes, 55 seconds any update over there are we seeing some relief on the realizations or are the customers asking for a lower price or or is a price hike over there? 32:05 32 minutes, 5 seconds So because of the competition they are obviously asking for lower and lower prices. So that's the reason we have 32:11 32 minutes, 11 seconds started looking at uh other applications uh which we can uh use our for I mean 32:19 32 minutes, 19 seconds where are Lenin can find any other application though be which might be based on some modification in the 32:27 32 minutes, 27 seconds process or improvement in quality in some way. So that's the work what we have already started doing and it's 32:35 32 minutes, 35 seconds showing or the trend looks positive and sir like you mentioned earlier that we are sourcing our raw material from 32:42 32 minutes, 42 seconds around 80 to 100 refineries whereas sir I understand there must be thousands of refineries in India s so are we making 32:50 32 minutes, 50 seconds any efforts to basically for new vendor development so that we can get at a more competitive price 32:57 32 minutes, 57 seconds this 80 to see this 80 to 100 refund constitute more than 80 to 90% of India's vegetable oil processing. 33:07 33 minutes, 7 seconds So I mean the other guys would be marginal players and this 80 to 100 refineries can give us 100% of our raw 33:14 33 minutes, 14 seconds material requirement. So it's it's not that we are going uh short on raw material or anything. No it's not that 33:22 33 minutes, 22 seconds availability is there sir. to 80 to 100. That means sir let's say for example this Marico and uh 33:31 33 minutes, 31 seconds Sunundrop etc all all of them Adani Wilmer etc we are all are our vendors already 33:39 33 minutes, 39 seconds yes okay and sir are we the only buyer of these byproducts from them or we are 33:46 33 minutes, 46 seconds competing for these byproducts and other players also no no there are other applications also for example 33:54 33 minutes, 54 seconds so for example what are the are applications soap, biodiesel. Okay. 34:02 34 minutes, 2 seconds There are multiple applications. 34:04 34 minutes, 4 seconds Uh Madus sir, uh I would request you to please come back in the queue for further questions. 34:09 34 minutes, 9 seconds Yeah, thank you. The next question comes from the line of Shan Parak with Value Wise Wealth Management. Please go ahead. 34:18 34 minutes, 18 seconds Hi sir, good afternoon. Thanks for the opportunity. So my question was last quarter we had mentioned that we had lost market share in dimer asset. So did 34:26 34 minutes, 26 seconds it continue in this quarter as well and also like we we had mentioned in our conference uh in our investor presentation 34:34 34 minutes, 34 seconds we have not lost any market share what we are saying is that as margins 34:41 34 minutes, 41 seconds were very low we were not taking 100% orders. 34:45 34 minutes, 45 seconds Okay. If someone wanted 100 tons, we would supply them 50 tons, 40 ton. 34:51 34 minutes, 51 seconds Okay. Also sir, we were facing competition from a new entrant as well. 34:56 34 minutes, 56 seconds So uh they continue they are very marginal clear. 35:01 35 minutes, 1 second Okay. They are so our volumes would not be hampered going further. Not at all. Not at all. 35:08 35 minutes, 8 seconds Okay sir. Got it. Thank you so much. 35:13 35 minutes, 13 seconds Thank you. The next question comes from the line of Krypa Kander with an individual investor. Please go ahead. 35:21 35 minutes, 21 seconds Um hello. Hello. 35:25 35 minutes, 25 seconds Yes ma'am. You're audible. Please go ahead. 35:26 35 minutes, 26 seconds Uh yeah actually I just wanted to ask something on the dimer asset front. So apart from the dimemer asset right now 35:34 35 minutes, 34 seconds which faces competition from Chinese companies. Why are we not able to you know pass on this increasing cost of import duty to the customer side? 35:44 35 minutes, 44 seconds Because then if I try to increase my prices, they'll import from China. 35:51 35 minutes, 51 seconds It's very simple. 35:53 35 minutes, 53 seconds See, end of the day, I have to be competitive. If the landed price of Chinese dimemer is 100 rupees, I no one is going to give me 101. 36:03 36 minutes, 3 seconds I'll have to match that uh pricing at the most. I'll be getting the domestic player. I'll be getting the preference 36:12 36 minutes, 12 seconds of I mean they'll be buying first option they'll buy from me that's all who is I mean no one would do that 36:20 36 minutes, 20 seconds okay but then uh that is the risk that the business would have and yes yes obviously 36:27 36 minutes, 27 seconds obviously okay all right got it thank you 36:36 36 minutes, 36 seconds thank you next Question comes from the line of Sunil with Hi-Tech. Please go ahead. 36:44 36 minutes, 44 seconds Hello sir. Am I audible? Yes, please go ahead. 36:50 36 minutes, 50 seconds Yeah, first I would like to congratulate the company and the management for the Pots the company is doing. Uh because 36:58 36 minutes, 58 seconds there are two things one is controllable other is uncontrollables. 37:02 37 minutes, 2 seconds Even though lot of headwinds are there in raw material, we are trying to find an alternative. Uh when there is competition from China on one of our 37:11 37 minutes, 11 seconds product dimemer we are finding to uh export it to us. When there is an issue with one product which we wanted to do 37:19 37 minutes, 19 seconds to something then the market fell we areing to something else. So we are we are continuously 37:27 37 minutes, 27 seconds focusing on things which are in our hands which is very very commendable from the company's point of view and 37:34 37 minutes, 34 seconds despite the company's good efforts uh the performance is uh affected due to the external factors and the share price 37:42 37 minutes, 42 seconds drop and as a very good uh management we have done a buyback. So I think from the shareholders point of view I should 37:49 37 minutes, 49 seconds commend you people for all the great work which you are doing on the operational stuff and also the capital allocation stuff 37:58 37 minutes, 58 seconds and coming to coming to my question since now we are uh looking to target 38:05 38 minutes, 5 seconds 50% of autooron exports uh as uh you already said that next two 38:12 38 minutes, 12 seconds years there will not be any new capital uh uh spent because already we are having a good amount of uh spare capacity. 38:21 38 minutes, 21 seconds Can can we expect to achieve that 50% export turn or in the next uh uh 3 years or 5 years or whatever it is because 38:29 38 minutes, 29 seconds external factors also are there without any capex or we may require some capeex also. 38:36 38 minutes, 36 seconds Oh I mean we won't require any capex. 38:40 38 minutes, 40 seconds Yes we we are capable of doing this. I mean our capacity is absolutely in place and no capex will be required. Uh nothing nothing is required. 38:52 38 minutes, 52 seconds That's that's very uh hardening to hear sir. Second thing is this is like uh little bit more longish term question. 39:00 39 minutes Let's say we uh we streamline everything all these exports and everything in the next 5 years. Let's say because one or two years is very short amount of time 39:08 39 minutes, 8 seconds to uh uh um force your or you are doing your best uh which we can see in the last 3 years. Let's say in the five 39:16 39 minutes, 16 seconds years time we streamline all these things and to take the next step uh since lot of uh uh jobs are being 39:25 39 minutes, 25 seconds affected in western countries because of this artificial intelligent all these things and everybody is trying to protect their jobs every country and 39:33 39 minutes, 33 seconds this is a good management sector which we are in so assuming that let's say the tariffs come back again in the western countries after the 5 years or whatever 39:42 39 minutes, 42 seconds it is and the a impact is huge because of our uh very good uh global parentage 39:48 39 minutes, 48 seconds like Fairfax and uh we are able to prove uh uh great extent in our R&D by 39:55 39 minutes, 55 seconds cracking lot of uh uh new stuff which are very difficult to do for anybody in the world that proves our research uh capabilities. 40:05 40 minutes, 5 seconds How comfortable will we be in setting up a plant in a western country? Maybe after 5 years or 7 years because we are 40:14 40 minutes, 14 seconds all having a technical capability here and we have a good uh parentage in terms of fairs. Obviously if the opportunity 40:23 40 minutes, 23 seconds comes by would uh we shy away but at this stage uh yeah at this stage we haven't thought 40:30 40 minutes, 30 seconds about it but I mean that's no big deal if opportunity comes 40:37 40 minutes, 37 seconds yeah we'll be ready for it because all these issues which came up in the last 2 three years are I believe that they are transient in nature and 40:45 40 minutes, 45 seconds even though these some let's say 50% of the issues persist uh you taking the pivot all these things you are trying to uh remove the effect of all those stuff 40:54 40 minutes, 54 seconds which you can do in your control. So once these things stabilize as uh very less people can crack this research as 41:02 41 minutes, 2 seconds you as you are able to do it in the last 5 years or 10 years for a long period of time. So using the same research the 41:08 41 minutes, 8 seconds fruits of research u we should be able to uh do capeex in a western country and 41:16 41 minutes, 16 seconds crack it. That's what I felt and it's very heartening to hear it from you also in the very long term not in the next 5 years 7 years or 10 years because fairs 41:24 41 minutes, 24 seconds I know that they think very long term in decades. So that's the reason I'm asking this question sir. 41:30 41 minutes, 30 seconds Yeah I mean and thanks a lot. Yeah sir. Thank you. Thank you. 41:43 41 minutes, 43 seconds Thank you ladies and gentlemen. We'll take this as a last question. I now hand the conference over to the management for closing comments. 41:54 41 minutes, 54 seconds Yeah, thank you everyone uh for attending the con. Uh hope to see you all back in uh uh Q4 Concord. Thank you. 42:03 42 minutes, 3 seconds Thanks a lot. 42:07 42 minutes, 7 seconds Thank you on behalf of Fairim Organics Limited. That concludes this conference. 42:12 42 minutes, 12 seconds Thank you for joining us and you may now disconnect your lines. Thank you.